/raid1/www/Hosts/bankrupt/TCR_Public/061019.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, October 19, 2006, Vol. 10, No. 249
Headlines
7-HILLS RADIOLOGY: Not a Health Care Business Under Sec. 101(27A)
ADELPHIA COMMS: Judge Gerber Okays Rejection of BMI License Pact
ADELPHIA COMMS: National Grid Seeks Court Nod on Expense Claims
ADMIRALTY CORP: Defaults on $2.5 Mil. Senior and Junior Debentures
ADVANCED COMM: Berenson LLP Expresses Going Concern Doubt
ALLIED HOLDINGS: Authorized to Pay Automobile Claims
ALLIED HOLDINGS: Court OKs Broadspire Claims Administration Pact
ALOHA AIRLINES: Sues Mesa Air for Unfair Competition
ALTEON INC: Low Equity Prompts AMEX Listing Non-Compliance Notice
AMERICAN GREETINGS: Posts $10M Net Loss in 2nd Qtr. Ended Aug. 25
AMERICAN HOME: August 31 Balance Sheet Upside-Down by $3.1 Million
AMERICAN HOME: Recurring Losses Spur Going Concern Doubt
AMERICHIP INT'L: Aug. 31 Stockholders' Deficit Widens to $1.2 Mil.
ANVIL HOLDINGS: July 29 Balance Sheet Upside-Down by $133,904,000
ARMSTRONG WORLD: Inks Technology Pact with Industrial Nanotech
ARMSTRONG WORLD: Invemed & Five Claimants Withdraw Proofs of Claim
AZTAR CORP: Earns $23.3 Million in Third Quarter of 2006
BALLY TOTAL: Moody's Affirms Junk Ratings on $535MM Senior Notes
BECKMAN COULTER: $185MM Lumigen Deal Cues Moody's to Hold Ratings
BEST MANUFACTURING: U.S. Trustee Amends Committee Composition
BIONICHE LIFE: Losses & Financial Woes Prompt Going Concern Doubt
BOOKHAM INC: Annual Stockholders' Meeting Slated for November 1
BRAVO! FOODS: June 30 Stockholders' Deficit Rose to $32.8 Million
CABOODLES LLC: Wants Until November 6 to Decide on Leases
CHICAGO HUDSON: U.S. Trustee Calls for Chapter 7 Conversion
COLLINS & AIKMAN: Court Approves Expanded Hilco Retention
COLLINS & AIKMAN: Customers Want GECC Dispute Resolved
COMMUNITY HEALTH: Fitch Holds B+ Rating on Sr. Subordinated Notes
COMPLETE RETREATS: Court Okays Rejection of 21 Contracts & Leases
COMPLETE RETREATS: LEG Asks Debtors to Assume or Reject Agreements
CONVERIUM HOLDINGS: CHNA Sale Plan Cues Moody's to Review Ratings
DANA CORP: Court Approves Toledo-Lucas Lease Pact on Ohio Property
DANA CORP: Seeks Court's Approval on Bing Metals Settlement Pacts
DEL PUEBLO: Case Summary & 20 Largest Unsecured Creditors
DELPHI CORP: Can File EDS and HP Agreements Under Seal
DELPHI CORP: Wants 396 Proofs of Claim Deemed as Timely Filed
DELTA AIR: Comair Implements Court-Approved Changes on CBA
DOW CORNING: Appeals Court Remands Interest Dispute to Dist. Court
DUBBINS LLC: Case Summary & 4 Largest Unsecured Creditors
DURA AUTOMOTIVE: Interest Non-Payment Cues Moody's Default Rating
EVERGREEN INT'L: Extends 12% Senior Notes Offering to October 24
EXTENDICARE HEALTH: Completes $500 Million Mortgage Loan Financing
FELCOR LODGING: Moody's Rates $215 Mil. Sr. Debt Offering at Ba3
FLORIDA GAS: Moody's Rates $600 Million Junior Sub. Notes at Ba1
GARSON RESOURCES: Buys Britannia Mine from Kinross and Pegasus
GB HOLDINGS: Disclosure Hearing Scheduled on November 29
GENERAL ELECTRIC: Fitch Holds Low-B Ratings on Four Cert. Classes
GLOBAL HOME: Panel Hires Basham Ringe as Mexican Counsel
GOODYEAR TIRE: Labor Dispute Prompts S&P's Negative Watch
HAZLETON GENERAL: Moody's Holds Ba2 Rating on $10.1MM Rev. Bonds
HAZELTON-ST. JOSEPH: Moody's Cuts $13.8MM Rev. Bonds Rating to Ba3
HEXION SPECIALTY: Subsidiaries to Offer $825 Million Secured Notes
HEXION SPECIALTY: Moody's Assigns B3 Ratings to New Senior Notes
HIT ENTERTAINMENT: Moody's Affirms B1 Corporate Family Rating
IMPERIAL PETROLEUM: Briscoe Burke Resigns as Auditor
IMPLANT SCIENCES: UHY LLP Expresses Going Concern Doubt
INT'L GALLERIES: Ct. OKs John Haffey as Ch. 7 Trustee's Consultant
INTEGRATED SECURITY: Weaver and Tidwell Raises Going Concern Doubt
INTERMOST CORP: Randall Gruber Raises Going Concern Doubt
INTRAWEST CORP: Securityholders Approve Plan of Arrangement
IT GROUP: Shaw Group Wins Lawsuit Against Bechtel Jacobs
JACOBS FINANCIAL: August 31 Balance Sheet Upside-Down by $5.9 Mil.
JACOBS FINANCIAL: Malin Bergquist Expresses Going Concern Doubt
JOHN MANEELY: Moody's Assigns Loss-Given-Default Rating
MAGUIRE PROPERTIES: Ends $273 Million Loan Term Refinancing
MASSEY ENERGY: Moody's Assigns Loss-Given-Default Rating
MERIDIAN AUTOMOTIVE: Wants to Reject 37 Contracts and Leases
MGM MIRAGE: Sells Two Hotel-Casinos for $200 Mil. to Marnell-Sher
MILLENIUM BIOLOGIX: Closes $325,000 Debenture Financing
MONOGEN INC: Hires Ted Geiselman as Chief Operating Officer
MUSICLAND HOLDING: Plan Confirmation Hearing Set to November 28
NAPIER ENVIRONMENTAL: Lenders Waive 3rd Quarter Interest Payments
NATIONAL JOCKEY: Case Summary & 20 Largest Unsecured Creditors
NEENAH PAPER: Closes $218 Million FiberMark Purchase Deal
NEXMED INC: Faces NASDAQ Delisting for Stock Price Noncompliance
NORTEL NETWORKS: Board Declares Nov. Dividend on Preferred Shares
NORTEL NETWORKS: Offers Shares with a 5-Year Fixed Rate Dividend
NORTH AMERICAN: Extends 9% Senior Notes Offering to November 20
OCEAN WEST: Restates Sept. 30, 2005 Financial Statements
PARMALAT: Court Moves Parmalat SpA Injunction Hearing to Nov. 28
PARMALAT: Deloitte Wants Pappas' 2nd Amended Complaint Dismissed
PHOTOCIRCUITS CORP: Disclosure Statement Hearing Set for Oct. 26
PINNACLE ENTERTAINMENT: Inks Second Amendment to Credit Agreement
QUEEN'S SEAPORT: Taps Sulmeyer Kupetz as Bankruptcy Counsel
RACE POINT: Fitch Affirms 'BB-' Ratings on Three Note Classes
RADNOR HOLDINGS: Taps Kurzman Carson as Claims Agent
RAVEN MOON'S: Reduces Outstanding Shares Under Restructuring Plan
READ-RITE CORP: Trustee Hires Hanson Bridgett as Special Counsel
REFCO INC: RCMI Wants to Sell All Assets to R.J. O'Brien Fund
RIVERSIDE CASINO: Moody's Assigns Loss-Given-Default Ratings
RIVIERA HOLDINGS: Moody's Assigns Loss-Given-Default Ratings
RONCO CORP: Mahoney Cohen Raises Going Concern Doubt
ROWE COS: Storehouse Taps Keen Realty to Auction 68 Retail Leases
ROYAL CARIBBEAN: Moody's Assigns Loss-Given-Default Ratings
SAINT VINCENTS: Enters Into SW BOCES Lease Pact
SAINT VINCENTS: Gets Interim OK to Retain CIT as Property Advisor
SCOTT BAILEY: Voluntary Chapter 11 Case Summary
SEMINOLE TRIBE: Moody's Assigns Loss-Given-Default Ratings
SENECA GAMING: Moody's Assigns Loss-Given-Default Ratings
SENTINEL OFFENDER: SSG Arranges New $11 Million Credit Facility
SFG LP: Files Schedules of Assets and Liabilities
SFX ENTERTAINMENT: Moody's Assigns Loss-Given-Default Ratings
SILICON GRAPHICS: Four Creditors Sell Claims Totaling $307,050
SIX FLAGS: Moody's Assigns Loss-Given-Default Ratings
SKYEPHARMA PLC: Posts GBP26.4 Mil. Net Loss in 2006 Second Quarter
SMART MODULAR: Earns $32.3 Mil. in Fiscal Year 2006 Ended Aug. 25
SMOOTH MOVES: Case Summary & 20 Largest Unsecured Creditors
SOUTHERN UNION: Moody's Places Ba1 Rating on $600MM Junior Notes
SPEEDWAY MOTORSPORTS: Moody's Assigns Loss-Given-Default Ratings
STATION CASINOS: Moody's Assigns Loss-Given-Default Ratings
STATSURE DIAGNOSTIC: To Restate Financial Statements
SYMPHONY BUILDERS: Voluntary Chapter 11 Case Summary
TOWER RECORDS: Court Approves O'Melveny & Myers as Co-Counsel
TOWER RECORDS: Court Okays Houlihan Lokey as Investment Banker
TOWER RECORDS: Court Okays Richards Layton as Co-Counsel
TUNICA-BILOXI: Moody's Assigns Loss-Given-Default Ratings
TURNING STONE: Moody's Assigns Loss-Given-Default Ratings
UNITED CUTLERY: Taps Gentry Tipton as Bankruptcy Counsel
UNITEDHEALTH GROUP: Inks $7.5 Billion Credit Agreement
US AIRWAYS: Operations EVP Al Crellin Resigns Effective Nov. 15
VAIL RESORTS: Moody's Assigns Loss-Given-Default Ratings
VALENTIS INC: Ernst & Young Raises Going Concern Doubt
WEBB INDUSTRIES: Case Summary & 36 Largest Unsecured Creditors
WHEELING ISLAND: Moody's Assigns Loss-Given-Default Ratings
WICKES INC: Wants to Hire Vanek Vickers as Special Counsel
WINN-DIXIE: Wants Court to Approve CEO Peter Lynch's Contract
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
7-HILLS RADIOLOGY: Not a Health Care Business Under Sec. 101(27A)
-----------------------------------------------------------------
When 7-Hills Radiology, LLC, filed its voluntary chapter 11
petition on August 2, 2006, it checked the box indicating it was a
health care business. Accordingly, Section 333(a)(1) of the
Bankruptcy Code required the appointment of a patient care
ombudsman "not later than 30 days after the commencement of the
case." The Honorable Bruce A. Markell wondered about the exact
nature of 7-Hill's business and exercised his discretion to show
cause, before the expiration of the 30-day period, as to why it
was a "health care business." The court took this step as a
patient care ombudsman and the other consequences of being a
health care business entail significant and additional costs.
In response to the order to show cause, the debtor changed its
position, and contended that it was not a health care business.
Its managing member provided a declaration stating that 7-Hills
gives radiological tests only to patients who are referred by
treating physicians, and that after the tests are given, 7-Hills
does not advise the patients of the test results. Instead, it
sends the reports to the treating physician, who reviews them with
the patient. 7-Hills does not keep the patient's records; they
are also maintained by the referring physician.
"Does this activity make the debtor a "health care business"?
Judge Markell says it doesn't.
The Bankruptcy Code, Judge Markell explains in a decision
published at 2006 WL 2706480, defines a health care business at 11
U.S.C. Sec. 101(27A) -- a section added to the Bankruptcy Code by
the Bankruptcy Abuse Prevention and Consumer Protection Act of
2005 -- as:
(A) . . . any public or private entity (without regard to
whether that entity is organized for profit or not for
profit) that is primarily engaged in offering to the
general public facilities and services for --
(i) the diagnosis or treatment of injury, deformity,
or disease; and
(ii) surgical, drug treatment, psychiatric, or obstetric
care. . . .
Judge Markell says that 7-Hills argues persuasively, despite its
initial indication, it is not a "health care business" within this
definition. Its principal argument is that it is not "engaged in
the offering to the general public" of any services. As
established by the declaration of its managing member, 7-Hills
performs radiological services only at the request of a referring
physician. No member of the general public may walk in and
request an X-ray or any other procedure 7-Hills performs.
It might be contended, Judge Markell observes, that 7-Hills'
treatment of any and all persons referred to it constitutes
treating the "general public." While that may be so, that reading
does not give adequate weight to the words Congress used: a health
care business is "engaged in offering to the general public"
certain facilities and services. 7-Hills does not offer anything
to the general public. Instead, it offers its services and
facilities to referring physicians only. This limitation of its
business to referring physicians takes it out of the definition of
health care business.
Reporting $5,000,000 in assets and $2,896,693 in liabilities, 7-
Hills Radiology, LLC, sought chapter 11 protection from its
creditors (Bankr. D. Nev. Case No. 06-11926) on August 2, 2006.
The Debtor provides radiology services. The Debtor's managing
member, Chinasa Oliver Egemonu, filed for chapter 11 personally on
June 2, 2006 (Bankr. D. Nev. Case No. 06-11233). Michael J.
Dawson, Esq., in Las Vegas, represents the Company.
ADELPHIA COMMS: Judge Gerber Okays Rejection of BMI License Pact
----------------------------------------------------------------
The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for
the Southern District of New York approved the stipulation between
Adelphia Communications Corporation and Broadcast Music, Inc.,
resolving the parties' settlement with regards to cable systems
local origination music license.
Specifically, the Debtors' and BMI agree that:
(1) BMI's objection to the Debtor's notice to reject its Cable
Systems Local Origination Music License Agreement, as
amended, dated Jan. 1, 2000, with BMI is withdrawn with
prejudice;
(2) The Debtor rejected the License Agreement effective
July 31, 2006; and
(3) By Sept. 10, 2006, or ten days after Court approval of the
Stipulation, whichever date is later, the Debtor will
Report and pay any and all license fees due pursuant to
the terms of the Agreement for the period from
Jan. 1, 2006, through and including July 31, 2006.
Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television
company. Adelphia serves customers in 30 states and Puerto Rico,
and offers analog and digital video services, 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 Debtors in their
restructuring efforts. 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 No. 149; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ADELPHIA COMMS: National Grid Seeks Court Nod on Expense Claims
---------------------------------------------------------------
Niagara Mohawk Power Corporation, Granite State Electric Company
and Massachusetts Electric Company, all doing business as National
Grid, ask the U.S. Bankruptcy Court for the Southern District of
New York to allow their administrative expense claim against
Adelphia Communications Corporation and its debtor-affiliates for:
(1) $3,178,318, including but not limited to at least
$1,323,856 against the Joint Venture Debtors --
specifically against Parnassos, LP, or Western NY
Cablevision, LP -- for amounts owing under a NIMO
Distribution Agreement dated June 3, 2001, between Niagara
Mohawk, Parnassos, Western NY and certain other ACOM
Debtors; and
(2) an unliquidated amount of up to approximately $160,000 for
all amounts owing on National Grid's utility accounts with
the Debtors after the date of filing for chapter 11
protection through July 31, 2006.
National Grid and certain ACOM Debtors were also parties to
various transmission and license agreements.
National Grind relates that several of the named counterparties to
the five agreements with Massachusetts Electric do not match with
any of the ACOM Debtors.
Jil Mazer-Marino, Esq., at Rosen Slome Marder LLP, in Uniondale,
New York, informs the Court that the ACOM Debtors' counsel has
advised that:
-- agreements with Massachusetts Electric were assigned to
Comcast Corporation or Time Warner Cable NY, LLC,
effective July 31, 2006; and
-- the ACOM counterparties to the five agreements were:
Adelphia Cablevision Corp.; FrontierVision Cable New
England, Inc.; Mountain Cable Company, LP; Century
Berkshire Cable Corp.; and FrontierVision Cable
New England, Inc.
National Grind asserts that the amount due and owing from the ACOM
Debtors for services provided under the transmission and license
agreements from the Petition Date to the Effective Date of the
Third Modified Fourth Amended Joint Plan of Reorganization for the
Century-TCI Debtors and the Parnassos Debtors, totals $3,178,318.
Ms. Mazer-Marino contends that based on the ACOM Debtors'
counsel's representations regarding the applicable Adelphia
counterparties to the agreements, of the $3,178,318, the amounts
due and owing to National Grid from the JV Debtors, specifically
from Parnassos or Western NY, totals $1,323,856.
National Grid had provided postpetition electric utility service
to the ACOM Debtors on more than 3,400 accounts through the
Effective Date. It is unclear from the customer names reflected
on those accounts whether the customer on any of the accounts was
one of the JV Debtors, states Ms. Mazer-Marino.
National Grid believes that the ACOM Debtors routinely failed to
update the customer names or provide correct customer names on
many utility service accounts. Thus, National Grid is unable to
identify with any certainty which Adelphia entity is the customer
on its various utility accounts with the ACOM Debtors.
Ms. Mazer-Marino relates that the amounts owing on National Grid's
utility service accounts with the ACOM Debtors for postpetition
service through the Effective Date has not yet been determined.
National Grid is working diligently to pull data on the amounts
together. From the information gathered thus far, National Grid
estimates that the liability will total approximately $160,000,
she contends.
Ms. Mazer-Marino asserts that the postpetition joint use and
utility services provided by National Grid to the ACOM Debtors
constitute actual, necessary expenses of preserving the Debtors'
estates and are entitled to an administrative expense priority
pursuant to Section 503(b) of the Bankruptcy Code.
As of Sept. 13, 2006, National Grid has not received payment for
the administrative expenses amounts.
Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television
company. Adelphia serves customers in 30 states and Puerto Rico,
and offers analog and digital video services, 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 Debtors in their
restructuring efforts. 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 No. 149; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ADMIRALTY CORP: Defaults on $2.5 Mil. Senior and Junior Debentures
------------------------------------------------------------------
Admiralty Corporation, a wholly owned subsidiary of Admiralty
Holding Company, was unable to negotiate a requested one-year
extension of the first of the Senior and Junior Debentures due to
Capital Bank and Holden Holdings, Limited, respectively. The
principal amounts due at the maturity date were $2,000,000 and
$500,000, respectively, for the Senior and Junior Debentures. The
approximate total amount due, including interest, was $4,000,000.
The Debentures allowed for an automatic extension of five days in
which to cure the default. The Company believed that an extension
could be negotiated and it had made offers and received a
counteroffer for the extension. However, the counteroffer
submitted by the representative of the holders of the Senior
Debenture was not acceptable to the Company. Accordingly, to date
the parties have not reached an agreement to extend the term of
the Debentures and the Company is unable to pay the Debentures.
The Debentures were issued in 1996 and are not collateralized by
assets of the Company. To the contrary, the Debentures, by their
terms, are subordinate to secured indebtedness of the Company.
All of the assets of the Company, except the ship, The New World
Legacy, are pledged to certain funds commonly referred to in the
Company's public filings as the NIR Group of Funds. Certain
individuals, including the CEO of Admiralty Holding Company, hold
a first lien on the New World Legacy.
The Debentures carry a default interest rate of 12% per annum and
entitle the Debenture holders to receive 1% of the Company's
earnings for each $100,000 of principal amount of the Debentures.
This would translate to 25% of the Company's earnings for the
maturing Debentures. The NIR Group of Funds has granted the
Company a waiver of default such that the failure to pay the
Debentures has not triggered a default in the loans from the NIR
Group of Funds.
The Company is continuing to seek a resolution of the default
through continued discussions with the representatives of the
holders of the Debentures and has submitted a new proposal to
which it has yet to receive a response. However, there can be
no assurance that the Company will be successful in these
negotiations. The Company intends to avail itself of all
defenses, which may be available to it at law, and in equity
should the holders of the Debentures commence litigation.
Headquartered in Douglasville, Georgia, Admiralty Corporation
(OTCBB: ADMH) -- http://www.admiraltycorporation.com/-- develops
nonferrous metal detection technology incorporated into a remote-
sensing device capable of identifying gold and silver bullion,
coins and artifacts located on and beneath the ocean floor. The
breakthrough technology will be used in the world's oceans to
search for, locate and recover documented treasure-bearing
shipwrecks.
ADVANCED COMM: Berenson LLP Expresses Going Concern Doubt
---------------------------------------------------------
Berenson LLP in New York raised substantial doubt about Advanced
Communications Technologies, Inc.'s ability to continue as a going
concern after auditing the Company's financial statements for the
fiscal year ended June 30, 2006. The auditing firm pointed to the
Company's net loss and working capital deficiency.
For the fiscal year ended June 30, 2006, the Company reported a
$573,841 million net loss on $9.1 million of net revenues compared
to a $735,833 net loss on $7.5 million of net revenues for the
previous fiscal year.
The Company's June 30 balance sheet also showed strained liquidity
with $1.6 million in total current assets available to pay
$2.9 million in total current liabilities coming due within the
next 12 months.
A full-text copy of the Company's Annual Report is available for
free at http://researcharchives.com/t/s?13a3
Based in New York, Advanced Communications Technologies, Inc.,
specializes in the technology aftermarket service and supply
chain, known as reverse logistics. Its wholly owned subsidiary
and principal operating unit, Encompass Group Affiliates, Inc.,
acquires and operates businesses that provide computer and
electronics repair and end-of-life cycle services
ALLIED HOLDINGS: Authorized to Pay Automobile Claims
----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
authorized Allied Holdings Inc. and its debtor-affiliates to pay
certain prepetition automobile claims in their sole discretion,
subject to the terms and conditions of applicable insurance
policies and related agreements. The payment of any single
Automobile Claim will not exceed $250,000.
If a proposed settlement payment exceeds $250,000, the Debtors
will provide counsel for the Official Committee of Unsecured
Creditors five days written notice of the proposed payment. If
the Committee objects, the matter will be heard by the Court.
As reported in the Troubled Company Reporter on Sept. 8, 2006,
pursuant to certain policies, two insurance carriers provide
automobile liability coverage for the Debtors, specifically:
(i) the ACE Group of Companies through the ACE AL Program,
which provided coverage for the U.S. Debtors from March 1,
2003, through December 31, 2005; and
(ii) the American Home Assurance Company by the AHA Policy,
which provided coverage for the Debtors in Canada,
prepetition.
Under the Insurance Policies, ACE and AHA retained a portion of
the premiums paid by the Debtors each year, and ceded the
remaining amount of premiums to Haul Insurance Limited in return
for Haul's agreement to reinsure a substantial portion of
automobile liability losses under the Policies.
To secure its obligations to ACE, Haul has caused letters of
credit to be issued in favor of ACE under their reinsurance
agreement.
In 2005, the ACE AL Program carried a $1,000,000 per incident
deductible and a $5,000,000 limit of coverage. Under the ACE AL
Program, the Debtors are responsible for $7,000,000 inner-
aggregate liability between the $1,000,000 and $5,000,000 layers
of coverage.
On the same year, the AHA Policy carried a CN$500,000 per
incident deductible and a CN$2,500,000 limit of coverage, under
which the Debtors are responsible for CN$500,000 inner-aggregate
liability between the CN$500,000 and CN$1,000,000 layers of
coverage.
As of the Petition Date, the Debtors have approximately 204
claims pending for alleged automobile-related liability, of which
164 are in the U.S. and 40 are in Canada.
Harris B. Winsberg, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, told the Court that if the Debtors do not pay amounts
within the deductible limits or Haul does not pay its obligations
under its reinsurance agreements, the Insurance Carriers may draw
on the letters of credit posted by the Debtors or Haul. He
pointed out that the draw would hurt Haul's and the Debtors'
ability to seek a return of any cash collateral posted with the
banks that issued the letters of credit.
The Debtors are also authorized to accept and enter into the
Corrective Endorsement.
A full-text copy of the Corrective Endorsement if available for
free at http://researcharchives.com/t/s?113f
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor. Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee. When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts. (Allied Holdings Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/
or 215/945-7000)
ALLIED HOLDINGS: Court OKs Broadspire Claims Administration Pact
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
authorized Allied Holdings Inc. and its debtor-affiliates to enter
into a claims administration agreement with Broadspire Services,
Inc.
The Debtors entered into the Broadspire deal after rejecting their
claims administration and brokerage services agreement with USI of
Georgia, Inc. Broadspire will assume responsibility for the
management of claims incurred during, but not paid after,
Dec. 31, 2005.
Under their Agreement, Broadspire will:
(i) adjust, investigate, settle or resist any claim, pursuant
to the terms of a relevant policy;
(ii) file required claim reports and notices, as agreed to --
from time to time -- in writing by the parties;
(iii) establish the appropriate loss reserve for each claim;
(iv) manage all litigation or other proceedings involving any
claim; and
(v) issue checks for losses and expenses in amounts consistent
with the investigation and evaluation of liability and
damages.
The Debtors will pay Broadspire commissions and fees as is
customary in the insurance industry. In addition, the Agreement
provides that the Debtors will:
-- establish a loss fund for $744,000 for payments of amounts
made by Broadspire on behalf of Allied Holdings, Inc.; and
-- provide a deposit equivalent to 3 months of the total
estimated annual service fees for claims management.
A full-text copy of the Claims Administration Agreement is
available for free at http://researcharchives.com/t/s?1131
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor. Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee. When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts. (Allied Holdings Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/
or 215/945-7000)
ALOHA AIRLINES: Sues Mesa Air for Unfair Competition
----------------------------------------------------
Aloha Airlines, Inc., and Aloha Airgroup, Inc., in a suit filed in
the state Circuit Court, said Mesa Air Group, Inc., received
confidential information as a potential investor in the Company
and used it improperly to enter Hawaii's inter-island market with
intent to drive the Company out of business.
The Company alleges that Mesa used its proprietary information to
unethically compete in the Hawaii market by offering air fares
that failed to cover Mesa's costs. Mesa's chief executive
officer, Jonathan Ornstein, has stated more than once that Mesa's
Go! can "fly empty" for five years with the profits from Mesa's
Mainland operations, indicating that Mesa is not covering its
costs and is ultimately motivated to offer unrealistic fares with
intent to drive out competition from the Hawaii market.
The Company also pointed out that according to other legal
documents, Mesa's chief financial officer, George Murnane III,
sent an e-mail message, stating that Mesa's entry would make "no
sense" if Aloha remained in the inter-island market: "We
definitely don't want to wait for them to die; rather we should be
the ones to give them the last push."
The Company says that as a result of the substantial and
continuing economic harm brought on by Mesa's actions, it is
seeking damages and injunctive relief to stop Mesa from competing
unfairly, and threatening the jobs of the Company's 3,500
employees in Hawaii.
"Mesa came to Hawaii under false pretenses, making false
promises," David A. Banmiller, president and chief executive
officer, said. "Aloha is not opposed to competition, we're
opposed to unfair competition, and a competitor whose objective
appears to be the demise of Aloha Airlines, ultimately to the
detriment of Hawaii's consumers."
The suit stated that Mesa signed two confidentiality agreements in
2005 and January 2006 stipulating that Mesa would only use the
confidential information for the purpose of pursuing an investment
and that if there was no investment, the confidential information,
including financial records, business plans, internal forecasts,
customer lists, and other highly sensitive data regarding
projections for the inter-island market should be promptly
destroyed.
In its filing, the Company noted that Mesa's Ornstein admitted to
their shareholders that Mesa's decision to begin inter-island
passenger service in 2006 was based on confidential information
obtained from Aloha and Hawaiian Airlines during their
bankruptcies. Ornstein was quoted as telling shareholders: " ...
we do have the benefit of looking at both Aloha and Hawaiian when
they were in bankruptcy... "
About Mesa Air
Mesa Air Group, Inc. is an aviation services company registered in
Nevada and based in Arizona. Mesa began inter-island service with
its Go! subsidiary on June 9, 2006.
About Aloha Airgroup
Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc.
-- http://www.alohaairlines.com/-- provides air carrier service
connecting the five major airports in the State of Hawaii. Aloha
Airgroup and its subsidiary Aloha Airlines, Inc., filed for
chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No.
04-03063). Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., and
Simon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevansky
represent the Debtors in their restructuring efforts. As of
Dec. 30, 2004, Aloha Airgroup reported $333,901 in assets and
$24,124,069 in liabilities, while Aloha Airlines reported
$9,134,873.23 in assets, and $543,709,698.75 in liabilities.
As reported in the Troubled Company Reporter on Feb. 20, 2006
Aloha Airlines formally exited bankruptcy on Feb.17, 2006, with
new investors joining longtime stakeholders.
ALTEON INC: Low Equity Prompts AMEX Listing Non-Compliance Notice
-----------------------------------------------------------------
Alteon Inc. received a notice from the staff of the American Stock
Exchange Inc. on Oct. 9, 2006, indicating that the Company is not
in compliance with certain AMEX continued listing standards,
specifically as a result of the Company's shareholder's equity in
recent years not meeting the thresholds under Section 1003(a) of
the AMEX Company Guide.
The Company has been afforded the opportunity to submit a plan of
compliance to AMEX by Nov. 8, 2006, advising AMEX of the action
the Company has taken, or will take, that would bring it into
compliance with all the continuing listing standards of the
Company Guide by April 9, 2008. If AMEX accepts the Plan, the
Company will be able to continue its listing during the Plan
period for up to seventeen months, during which time the Company
will be subject to periodic review to determine whether it is
making progress consistent with the Plan. If AMEX does not accept
the Company's Plan or if the Company does not make progress
consistent with the Plan during the Plan period or if the Company
is not in compliance with the continued listing standards at the
end of the Plan period, AMEX may then initiate delisting
proceedings.
The Company intends to prepare and submit the Plan within the time
frame required by AMEX. However, there is no guarantee that the
Plan will be accepted by AMEX, or that the Company will be able to
make progress consistent with the Plan if it is accepted. Prior
to filing the Plan and while the Plan is under review by AMEX, the
Company expects that its common stock will continue to trade
without interruption on AMEX; however, the trading symbol for the
Company's Common Stock will have an indicator (.BC) added as an
extension to signify noncompliance with the continued listing
standards. Within five days of the Oct. 9, 2006 letter from AMEX,
the Company will be included in a list on the AMEX website of
issuers that do not comply with the listing standards. The .BC
indicator will remain as an extension on the Company's trading
symbol until the Company has regained compliance with all
applicable continued listing standards.
About Alteon Inc.
Headquartered in Parsippany, New Jersey, Alteon Inc. (AMEX: ALT)
--- http://www.alteon.com/-- is a product-based biopharmaceutical
company engaged in the development of small molecule drugs to
treat and prevent cardiovascular diseases and other diseases
associated with aging and diabetes.
Going Concern Doubt
As reported in the Troubled Company Reporter on Sept. 19, 2006,
J.H. Cohn LLP expressed substantial doubt about Alteon'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 $13 million net loss and
using approximately $14 million of cash in operating activities
during the year ended Dec. 31, 2005.
AMERICAN GREETINGS: Posts $10M Net Loss in 2nd Qtr. Ended Aug. 25
-----------------------------------------------------------------
American Greetings Corporation filed its financial statements for
the second fiscal quarter ended Aug. 25, 2006, with the Securities
and Exchange Commission on Oct. 4, 2006.
Second Quarter Results
For the second quarter of fiscal 2007, the Company reported net
sales of $360.1 million, a pre-tax loss from continuing operations
of $14.7 million and a loss from continuing operations of
$13.2 million.
For the second quarter of fiscal 2006, the Company reported net
sales of $385.0 million, pre-tax income from continuing operations
of $8.9 million and income from continuing operations of
$3.8 million.
For the second fiscal quarter ended Aug. 25, 2006, the Company
reported a $10,498,000 net loss compared with $3,241,000 of net
income for the period ended Aug. 26, 2005.
At Aug. 25, 2006, the Company's balance sheet showed
$1,889,300,000 in total assets, $731,932,000 in total liabilities,
and $1,157,368,000 in total shareholders' equity.
Management Comments
Chief Executive Officer Zev Weiss said, "The combination of our
normal seasonality as well as the planned rollout of both our
strategic card and scan-based trading initiatives put enough
downward pressure on revenues and earnings to cause a loss from
continuing operations for the quarter.
"Although we had anticipated a down quarter, our results were
slightly below our plan by a few million dollars. However,
because the second half of the fiscal year is stronger seasonally
than the first half, at the mid-point of the fiscal year we still
anticipate falling within our previously announced earnings per
share range for the full year of $0.80 to $1.00."
In addition, Weiss stated, "We are incurring costs associated with
the strategic card initiative, and we believe that the consumer is
beginning to notice the changes we are making in our card products
and merchandising and our objective is to turn that heightened
consumer interest into revenues and earnings."
Weiss added, "During the quarter, we also completed our strategic
refinancing effort. The last step of this process reduced the
shares that would have been issued due to the conversion of our 7%
notes by slightly more than 7 million. Over the course of the
last 18 months, we have reduced our diluted share count by
approximately 27%. Over the long term, we will be focusing more
of our resources on growth opportunities, including our strategic
card initiative, and less aggressively on share repurchases."
Financing Activities
During the quarter, with the settlement of its 7% convertible
notes (both the original notes and the new notes issued in its
exchange offer), the Company completed the last major step of its
strategic refinancing effort.
During the second fiscal quarter, the Company used $159.1 million
of cash to settle the principal due under its new notes and issued
shares to settle the balance of the conversion value of the new
notes.
As a result of completing this last major step, the Company did
not have to issue approximately 7.1 million shares that it would
have had to issue if all of the original convertible notes had
remained outstanding and been converted.
Share Repurchases
During the second fiscal quarter of 2007, the Company purchased,
under the share repurchase program initiated in February 2006,
2.1 million shares of common stock for $49.1 million.
As of the end of the second quarter, the Company had a balance of
approximately $48.8 million available under its repurchase
program. During the past 18 months, over the course of two share
repurchase programs, the Company has repurchased 15.2 million
shares for $351.2 million at an average price of $23.14 per share.
Cash Dividend
The Company's Board of Directors authorized a cash dividend of
$0.08 per share to be paid on Oct. 23, 2006, to shareholders of
record at the close of business on Oct. 13, 2006.
Full-text copies of the Company's second fiscal quarter financials
are available for free at http://ResearchArchives.com/t/s?13a4
About American Greetings
Cleveland, Ohio-based American Greetings Corporation (NYSE: AM) --
http://corporate.americangreetings.com/-- manufactures social
expression products. Along with greeting cards, its product lines
include gift wrap, party goods, candles, stationery, calendars,
educational products, ornaments, and electronic greetings.
American Greetings generates annual net sales of approximately
$1.9 billion.
* * *
Moody's Investors Service lowered the rating on American Greetings
Corporation's $22.7 million 6.1% senior unsecured notes due 2028
to Ba2 from Ba1.
Standard & Poor's Ratings Services assigned its preliminary 'BB+'
senior unsecured debt rating to American Greetings Corp.'s
Rule 415 shelf registration for debt securities. The new shelf
has an indeterminate aggregate initial offering price or number of
debt securities.
AMERICAN HOME: August 31 Balance Sheet Upside-Down by $3.1 Million
------------------------------------------------------------------
American Home Food Products Inc. disclosed financial results for
the quarterly period ended Aug. 31, 2006.
For the three-month period ended Aug. 31, 2006, the Company had
net sales of $61,792 versus $52,820 for the same period in 2005.
The Company says that in both periods it generated a 100% gross
margin attributable to the conversion of its business from a
manufacturing company into a licensing company.
Since February 2003, the Company has maintained an exclusive
licensing agreement with CGM, Inc., whereby CGM fulfills all
orders for products sold under the trade names that the Company
continues to own and thereafter pays the Company a cash royalty on
sales. All royalty payments are based on actual sales in the
previous month and are paid on a monthly basis.
For the three months ended Aug. 31, the Company recorded a loss
from operations of $30,031 and a $70,584 net loss.
The Company discloses that until it can either refinance its
outstanding debt, or merge with another company, which will
include a refinancing of the debt, it will continue to accrue
inordinate debt charges. The Company incurred selling, general
and administrative costs of $91,823, which included $12,628 of
amortization charges.
At Aug. 31, 2006, the Company's balance sheet showed $22,550 in
current assets, which represented the royalty receivable. The
Company also reported intangible assets of $427,531, which
represents the book value of its trademarks, trade names and
customer list, which collectively are the assets that generate the
royalty income that the Company earns. At Aug. 31, 2006, the
Company had total assets of $450,081, total current liabilities of
$3,604,067 and total shareholders' deficiency of $3,153,986.
The Company discloses that its current liabilities include loans,
including interests, that are now due, totaling $2,637,038. These
loans were used to fund the Company's operations. The loans are
principally to shareholders of the Company. Of the principal
loans outstanding, $1,120,958 is held by one person that has a
properly perfected security interest against the Company's
remaining assets, being all its intangible property.
The Company says that it is planning to increase its royalty
revenue and use excess cash proceeds to pay down its debt while it
continues to pursue a new business that could be merged with the
Company. With any merger the Company will seek to refinance its
debt by either paying off all debt in cash or an offer of cash and
stock. Although the Company is required to carry its intangible
property at a net value of $427,531, it believes that the fair
market value for these assets is much higher. The Company
believes that a refinancing that would enable creditors to receive
cash and some additional equity in the company will eliminate all
debts. Until such time as the Company shall merge with another
entity, the Company says that its current cash flow is sufficient
to meet its fixed monthly expenses.
Subsequent Event
In January 2006, the Company and a judgment creditor reached an
agreement whereby the creditor agreed to refrain from enforcing
its judgment in exchange for a monthly payment of interest on the
creditor's original loan to the Company and the Company's
commitment to pay the judgment upon the earlier of the
recapitalization of the Company or Sept. 30, 2006.
In September 2006, the judgment creditor agreed to extend the
agreement to Dec. 31, 2006. In exchange for the extension, the
Company agreed to increase the monthly interest payment and to
issue 40,000 shares of common stock to the creditor.
A full-text copy of the Company's quarterly report for the period
ended Aug. 31, 2006 is available for free at:
http://ResearchArchives.com/t/s?13a5
Based in New York City, American Home Food Products Inc. fka Novex
Systems International, engages in licensing its tradenames and
marketing of construction materials. It licenses its Por-Rok,
Dash Patch, and Sta-Dri trademarks. The Por-Rok and Dash Patch
product lines include prepackaged concrete repair and floor
resurfacing products; and Sta-Dri product line includes masonry
waterproofing products.
AMERICAN HOME: Recurring Losses Spur Going Concern Doubt
--------------------------------------------------------
Sherb & Co. LLP expressed substantial doubt on American Home Food
Products, Inc.'s ability to continue as a going concern after
auditing the Company's financial statements for the fiscal year
ended May 31, 2006. The auditing firm pointed to the Company's
working capital deficiency and recurring losses form operations.
For the year ended May 31, 2006, the Company reported royalties of
$223,522 compared to $209,258 in 2005. The Company says that it
achieved a 100% gross profit for the year ended May 31, 2006, due
to the licensing nature of its business.
For the year ended May 31, 2006, the Company generated a net loss
of $306,621, which included $159,325 of accrued interest and non-
cash expenses for depreciation and amortization of $50,512 and
stock issuances of $27,600. On a monthly basis, the Company
incurred approximately $35,000 in selling, general and
administrative expenses expense. The monthly selling, general and
administrative expenses are predominantly comprised of $20,000 in
payroll expenses, $3,000 in amortization expense of the
intangibles and $4,000 of professional fees.
As of May 31, 2006, the Company had $17,452 in current assets
representing the royalty receivable. The Company also has
intangibles of $440,159, attributable to the two acquisitions that
it completed in 1999 and 2000.
The Company's May 31, 2006 balance sheet showed $457,611 in total
assets, current liabilities of $3,541,013, and total shareholders'
deficiency of $3,083,402.
A full-text copy of the Company's annual report is available for
free at http://ResearchArchives.com/t/s?13a2
Based in New York City, American Home Food Products, Inc., fka
Novex Systems International, engages in licensing its tradenames
and marketing of construction materials. It licenses its Por-Rok,
Dash Patch, and Sta-Dri trademarks. The Por-Rok and Dash Patch
product lines include prepackaged concrete repair and floor
resurfacing products; and Sta-Dri product line includes masonry
waterproofing products.
AMERICHIP INT'L: Aug. 31 Stockholders' Deficit Widens to $1.2 Mil.
------------------------------------------------------------------
AmeriChip International Inc. delivered its financial statements
for the third fiscal quarter ended Aug. 31, 2006, with the
Securities and Exchange Commission on Oct. 16, 2006.
The Company reported a $1,646,466 net loss on $30,059 of sales for
the three months ended Aug. 31, 2006, compared with a net loss of
$1,375,480 on $29,560 of sales for the same period in 2005.
At Aug. 31, 2006, the Company's balance sheet showed $1,063,610 in
total assets, $2,291,816 in total liabilities, and $3,413 in
minority interest, resulting in a $1,231,619 stockholders'
deficit. The Company had a $697,203 deficit at May 31, 2006.
The Company's Aug. 31 balance sheet also showed strained liquidity
with $273,048 in total current assets available to pay $2,098,341
in total current liabilities.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?1394
Going Concern Doubt
Williams & Webster, P.S., in Spokane, Washington, raised
substantial doubt about AmeriChip International Inc.'s ability to
continue as a going concern after auditing the Company's financial
statements for the years ended Nov. 30, 2005, and 2004. The
auditor pointed to the Company's significant operating losses.
About AmeriChip
Headquartered in Plymouth, Michigan, AmeriChip International Inc.
-- http://www.americhiplacc.com/-- holds a patented technology
known as Laser Assisted Chip Control, the implementation of which
results in efficient chip control management in industrial metal
machining applications. This technology provides substantial
savings in machining costs of certain automobile parts providing
much more competitive pricing and more aggressive sales approaches
within the industry.
ANVIL HOLDINGS: July 29 Balance Sheet Upside-Down by $133,904,000
-----------------------------------------------------------------
As of July 29, 2006, Anvil Holdings Inc.'s balance sheet showed
a $133,904,000 total stockholders' deficiency resulting from
total assets of $110,682,000 and total liabilities of
$244,586,000.
The company's July 29 balance sheet also showed negative working
capital with $80,653,000 in total current assets and $176,449,000
in total current liabilities.
For the fiscal quarter ended July 29, 2006, the company's net loss
increased to $5,132,000 from a $2,813,000 net loss for the fiscal
quarter ended July 30, 2005.
Net sales for the current quarter increased to $51,169,000 from
net sales of $48,953,000 for the previous fiscal quarter.
Full-text copies of the company's financial statements for the
fiscal quarter ended July 29, 2006, are available for free at:
http://researcharchives.com/t/s?1390
Anvil Holdings Inc., through its subsidiary Anvil Knitwear Inc.,
designs, manufactures and markets activewear for men, women and
children, including short and long sleeve T-shirts, sport shirts
and niche products.
ARMSTRONG WORLD: Inks Technology Pact with Industrial Nanotech
--------------------------------------------------------------
Industrial Nanotech signed an agreement submitted by Armstrong
World Industries, Inc. to work towards incorporation of the
Company's proprietary technologies into products manufactured by
Armstrong.
Armstrong World Industries Inc., a subsidiary of Armstrong
Holdings, designs and manufactures floors, ceilings and cabinets.
Armstrong generated nearly $4 billion in revenues in 2005 and has
14,600 employees worldwide with 41 plants in 12 countries.
"The application of Nansulate coatings on walls and in attics of
commercial and residential buildings has been an important and
growing market sector for us," Stuart Burchill, CEO of Industrial
Nanotech, stated. "Armstrong World Industries approached us in
early August and I found the concept of incorporating our
technology into their ceiling and flooring products as an OEM
product to be a fascinating idea with tremendous potential. This
agreement, which I signed as submitted yesterday, will allow us to
significantly expand this market for Nansulate and will provide
Armstrong with a superior proprietary product line in a very
competitive industry," Mr. Burchill, added.
About Nansulate(TM)
Nansulate is a product line of water-based translucent insulation
coatings containing a nanotechnology-based material well
documented to provide thermal insulation, prevent corrosion and
resist mold. The entire Nansulate Product Line includes: Nansulate
GP, Nansulate PT, Nansulate Chill Pipe, Nansulate High Heat,
Nansulate HomeProtect ClearCoat and HomeProtect Interior, and
Nansulate LDX.
Nansulate GP is a general purpose formulation designed for wood,
fiberglass and other non-metal substrates and Nansulate PT is a
direct to metal coating for pipes, tanks and other metallic
substrates.
Coatings that target extreme industrial environments include
Nansulate Chill Pipe designed for low temperature applications on
pipes and tanks and Nansulate High Heat designed for high
temperature applications. Nansulate HomeProtect ClearCoat and
HomeProtect Interior are designed for residential and commercial
buildings and Nansulate LDX is designed for lead encapsulation
applications.
About Industrial Nanotech Inc.
Industrial Nanotech Inc. is a nanoscience solutions and research
company. It develops and commercializes applications for
nanotechnology through funding of and participation in research
with scientists and laboratories, including the U.S. Center for
Integrated Nanotechnology (CINT) and Princeton Polymers
Laboratories.
About Armstrong World Industries
Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc.
-- http://www.armstrong.com/-- the major operating subsidiary of
Armstrong Holdings, Inc., designs, manufactures and sells interior
floor coverings and ceiling systems, around the world.
The Company and its affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen
Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.
Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors in their restructuring efforts. The Company and its
affiliates tapped the Feinberg Group for analysis, evaluation, and
treatment of personal injury asbestos claims.
Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and
O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and
Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, represent the Official Committee of Unsecured Creditors.
The Creditors Committee tapped Houlihan Lokey for financial and
investment advice. The Official Committee of Asbestos Personal
Injury Claimant hired Ashby & Geddes as counsel.
The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The
District Court Judge Robreno confirmed AWI's Modified Plan on
Aug. 14, 2006. The Clerk entered the formal written confirmation
order on Aug. 18, 2006. The Company's "Fourth Amended Plan of
Reorganization, as Modified," has become effective and AWI has
emerged from Chapter 11. (Armstrong Bankruptcy News, Issue
No. 102; Bankruptcy Creditors' Service,Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Oct. 9, 2006
Standard & Poor's Ratings Services raised its corporate credit
rating on Armstrong World Industries Inc. to 'BB' from 'D',
following the Company's emergence from bankruptcy on Oct. 2, 2006.
The outlook is stable.
ARMSTRONG WORLD: Invemed & Five Claimants Withdraw Proofs of Claim
------------------------------------------------------------------
Invemed Catalyst Fund, L.P., sought to withdraw its claim against
Armstrong World Industries, Inc., since no amounts are due or
owing to Invemed under its Agreements with the Company, as noted
by Jeffrey Saferstein, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison LLP, in New York.
Invemed filed Claim No. 4852, a contingent, unliquidated, general
unsecured claim, against the Company.
Mr. Saferstein, relates that the Claim arose under the parties'
agreements:
(1) A Subscription Agreement dated March 29, 1999, between
the Retirement Income Plan for Employees of Armstrong
World Industries, Inc., and Invemed; and
(2) A Second Amended and Restated Agreement of Limited
Partnership dated as of July 1, 1999, as amended from
time to time between RIPEAWI and Invemed, relating to
RIPEAWI's commitment to make capital contributions on
an as-called basis through March 31, 2009, with
Claimant's option to extend through March 31, 2011.
Aside from Invemed, five entities advise the Court that they are
withdrawing the proofs of claim they filed in the Company's
Chapter 11 case:
Claim Claim Date
Claimant Number Amount Filed
-------- ------ ------ -----
ACandS, Inc. 3414 $41,429 08/29/01
Apollo Distributing
Company 3597 unliquidated 08/30/01
Century Indemnity Company 3445 unliquidated 08/28/01
Commonwealth of
Massachusetts 4227 326,857 02/25/02
Haines & Company, Inc. 4866 unliquidated 11/04/05
Haines, ACandS and Apollo withdrew their claims pursuant to Rule
3006 of the Federal Rules of Bankruptcy Procedure.
Under Rule 3006, a creditor may withdraw a claim as a matter of
right by filing a notice of withdrawal. However, a creditor may
not withdraw its claim without Court order if, after filing a
proof of claim:
* an objection or a complaint is filed against it;
* it accepted or rejected a plan of reorganization; or
* it participated significantly in the bankruptcy case.
The Commonwealth of Massachusetts provided no explanation
regarding the withdrawal of its claim.
Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc.
-- http://www.armstrong.com/-- the major operating subsidiary of
Armstrong Holdings, Inc., designs, manufactures and sells interior
floor coverings and ceiling systems, around the world.
The Company and its affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen
Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.
Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors in their restructuring efforts. The Company and its
affiliates tapped the Feinberg Group for analysis, evaluation, and
treatment of personal injury asbestos claims.
Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and
O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and
Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, represent the Official Committee of Unsecured Creditors.
The Creditors Committee tapped Houlihan Lokey for financial and
investment advice. The Official Committee of Asbestos Personal
Injury Claimant hired Ashby & Geddes as counsel.
The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The
District Court Judge Robreno confirmed AWI's Modified Plan on
Aug. 14, 2006. The Clerk entered the formal written confirmation
order on Aug. 18, 2006. The Company's "Fourth Amended Plan of
Reorganization, as Modified," has become effective and AWI has
emerged from Chapter 11. (Armstrong Bankruptcy News, Issue No.
102; Bankruptcy Creditors' Service,Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Oct. 9, 2006
Standard & Poor's Ratings Services raised its corporate credit
rating on Armstrong World Industries Inc. to 'BB' from 'D',
following the Company's emergence from bankruptcy on Oct. 2, 2006.
The outlook is stable.
AZTAR CORP: Earns $23.3 Million in Third Quarter of 2006
--------------------------------------------------------
Aztar Corporation reported financial results for its 2006 third
quarter, including property EBITDA from continuing operations of
$71 million, compared with $65.7 million in the year-earlier
quarter.
Third-quarter 2006 revenue was $234 million, compared with
$234.3 million in third quarter 2005.
The company earned $23.3 million for the third quarter ended
Sept. 30, 2006, compared with $19.4 million of net income in the
comparable 2005 quarter.
Property EBITDA
Property EBITDA in the 2006 third quarter includes construction
accident related expenses of $1 million and insurance recoveries
of $3.9 million, compared with expenses of $1.4 million and no
insurance recoveries in the 2005 third quarter.
Other income (expense) of $2.7 million consists of insurance
recoveries for the rebuilding of the damaged portion of the
Tropicana Atlantic City expansion after the construction accident
that occurred on Oct. 30, 2003, net of direct costs to obtain the
recoveries, compared with negative $300,000 in the comparable 2005
quarter.
Discontinued Operations
On May 19, 2006, the company signed a merger agreement with Wimar
Tahoe Corporation d/b/a Columbia Entertainment, the gaming
affiliate of Columbia Sussex Corporation. Results for Casino
Aztar in Caruthersville, Missouri, are reported as discontinued
operations, net of income taxes, reflecting the company's
commitment to sell or close that property as part of the merger
agreement.
Year-to-Date Results
Consolidated revenue was $677.2 million in the first three
quarters of 2006, compared with $671.6 million in the first three
quarters of 2005. Property EBITDA from continuing operations was
$191.7 million in the 2006 period, compared with $175.5 million a
year earlier.
Year-to-date 2006 net loss was $39.6 million.
Prior to signing the Columbia Entertainment merger agreement, the
company terminated its earlier merger agreement with Pinnacle
Entertainment, Inc., and paid to Pinnacle a termination fee of
$52.16 million and termination expenses of $25.84 million.
The payment is not deductible for tax purposes. The payment to
Pinnacle and certain other costs, consisting mainly of
professional fees, are reported as merger-related expenses.
Status of Merger with Columbia Entertainment
On Oct. 17, 2006, Aztar shareholders approved the merger at a
special meeting of Aztar shareholders. Its merger with Columbia
Entertainment is subject to the satisfaction of customary closing
conditions, including the receipt of necessary gaming approvals.
Filings regarding approval of the transaction have been made by
Columbia Entertainment in each of New Jersey, Nevada, and Indiana.
The company understands that Columbia Entertainment also filed
applications relating to its financing of the transaction in each
of Louisiana and Mississippi; Mississippi authorities have
approved the financing. The merger is presently expected to close
in the fourth quarter of 2006.
In its merger agreement with Columbia Entertainment, the company
agreed to use commercially reasonable efforts to sell its Missouri
property, commonly known as Casino Aztar Caruthersville. The
company signed an agreement with Fortunes Entertainment, LLC, on
Aug. 17, 2006, under which Fortunes Entertainment will acquire the
Caruthersville property. Approval of the sale by Missouri gaming
authorities is required.
About Aztar Corporation
Headquartered in Phoenix, Arizona, Aztar Corporation (NYSE: AZR)
-- http://www.aztar.com/-- is a publicly traded company that
operates Tropicana Casino and Resort in Atlantic City, New Jersey,
Tropicana Resort and Casino in Las Vegas, Nevada, Ramada Express
Hotel and Casino in Laughlin, Nevada, Casino Aztar in
Caruthersville, Missouri, and Casino Aztar in Evansville, Indiana.
* * *
As reported in the Troubled Company Reporter on Oct. 11, 2006,
Moody's Investors Service's confirmed its Ba2 Corporate Family
Rating for Aztar Corporation.
BALLY TOTAL: Moody's Affirms Junk Ratings on $535MM Senior Notes
----------------------------------------------------------------
Moody's Investors Service affirmed the credit ratings of Bally
Total Fitness Holding Corporation. The rating outlook remains
negative.
Bally closed on a new $284 million senior secured credit facility,
which was used to refinance borrowings under its prior credit
facility and will be used to fund capital expenditures and provide
for additional liquidity. Moody's withdrew the ratings on Bally's
prior secured bank credit facility.
The new credit facility provides Bally with modest additional
liquidity and will terminate 14 days prior to the maturity of the
9-7/8% senior subordinated notes due October 2007, including
extensions, but no later than Oct. 1, 2010. The previous credit
facility was set to mature on April 15, 2007 in the event the
subordinated notes were not refinanced prior to such date. The
new credit facility includes a $206 million term loan facility, a
$34 million delayed draw term loan facility and a $44 million
revolver. The proceeds of the delayed draw term loan facility are
limited to the financing of capital expenditures.
The Caa1 corporate family rating continues to recognize:
-- significant near term debt maturities and a probable need
for a recapitalization or sale of the company;
-- negative free cash flow generation;
-- litigation and regulatory risks; and,
-- extensive material weaknesses in internal controls.
Moody's affirmed these ratings (LGD assessments for the senior
notes and subordinated notes were revised as needed to reflect the
larger size of the new credit facility):
-- $235 million 10.5% senior unsecured notes (guaranteed) due
2011, rated Caa1 (LGD 4, 51%)
-- $300 million 9.875% senior subordinated notes due 2007,
rated Caa3 (LGD 5, 88%)
-- Corporate family rating, rated Caa1
-- Probability of default rating, rated Caa1
Moody's withdrew these ratings:
-- $136 million senior secured term loan B facility due 2009,
rated B1 (LGD 1, 8%)
-- $100 million senior secured revolving credit facility due
2008, rated B1 (LGD 1, 8%)
The negative rating outlook reflects Moody's expectation that,
absent a sale of the company, Bally may need to restructure its
debt to stabilize its capital structure.
The outlook could be changed to stable or positive if the senior
subordinated notes are refinanced or extended on reasonable terms
prior to Oct. 1, 2007; adequate availability is maintained under
the revolving credit facility; regulatory and legal risks are
substantially reduced; material progress is made in remediating
internal control weaknesses; and positive free cash flows are
expected to be sustained.
The rating could be downgraded if efforts to sell the company and
refinance near term debt maturities are not successful and the
probability of default increases, or, continued negative free cash
flow generation results in a decrease in Moody's assessment of
Bally's enterprise value at default.
Bally, through its wholly owned subsidiaries, is one of the
largest publicly traded commercial operators of fitness centers in
North America. Revenues for the 12 month period ending June 30,
2006 were approximately $1 billion.
BECKMAN COULTER: $185MM Lumigen Deal Cues Moody's to Hold Ratings
-----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Beckman Coulter.
The outlook on Beckman's ratings remains stable.
The rating action follows Beckman's agreement to acquire Lumigen,
Incorporated, for $185 million in cash. Beckman reportedly will
finance the transaction through $185 million of long-term
borrowings. Lumigen generated over $33 million in revenues during
2005 with Beckman having accounted for about 40% of the total. In
addition, Lumigen generated free cash flow of nearly $12 million
in 2005. The exact terms and structure of the planned debt
financing have not yet been announced. As such, Moody's is not
assigning a rating on the proposed financing instrument until the
details have been finalized and made public.
While Moody's is affirming the company's existing ratings despite
the increase in leverage to finance the acquisition of Lumigen,
Moody's notes that this transaction will constrain the company's
future financial flexibility and place Beckman at the low end of
its existing rating category with respect to several credit
metrics, most prominently including adjusted free cash flow to
adjusted debt. As a result, the ratings would become more
unfavorable if Beckman were to pursue another debt-financed
acquisition. The ratings would also be under pressure if there is
a meaningful deterioration in the company's cash flow in the
short-term to intermediate-term.
Lumigen develops and manufacturers detection chemistries for high-
sensitivity testing in clinical diagnostics and life science
research. Beckman uses Lumigen's proprietary reagents in its
immunoassay systems. As a result, the acquisition ensures that
Beckman will have a steady supply of current technology as well as
future Lumigen technology to be used for its immunochemical and
other high-sensitive testing. Lumigen also manufactures and
licenses proprietary chemicals used by other clinical diagnostics
and life-science manufacturers. Moody's expects the transaction
to close by November 2006.
Despite the increase in long-term debt, the affirmation of
Beckman's rating and stable outlook incorporates Moody's
expectation that the company will continue to generate meaningful
operating cash flow relative to its long-term debt of 30% to 35%,
which is still indicative of an investment grade company. The
outlook also assumes that the company will be effective in
integrating Lumigen without having a significant impact on its
credit metrics. While Beckman is paying $185 million for Lumigen
and financing the transaction with long-term debt, Moody's notes
that Beckman should benefit from continued growth of the business
and high margins historically derived by Lumigen.
These ratings were affirmed:
-- $500 Million Universal Shelf Registration (Senior and
Subordinate); (P) Baa3/ (P) Ba1
-- $240 Million 7.45% Senior Notes due 2008; Baa3
-- $235 Million 6.875% Senior Notes due 2011; Baa3
-- $100 Million 7.05% Senior Debentures due 2026; Baa3
-- $300 Million revolving credit facility, due 2010; Baa3
Beckman Coulter, Inc., headquartered in Fullerton, California, is
a leading provider of instrument systems and complementary
products that simplify and automate processes in biomedical
research and clinical laboratories. The company reported total
revenue of $2.4 billion during 2005.
BEST MANUFACTURING: U.S. Trustee Amends Committee Composition
-------------------------------------------------------------
The U.S. Trustee for Region 3 amended the composition of the
members of the Official Committee of Unsecured Creditors in Best
Manufacturing Group LLC and its debtor-affiliates' chapter 11
cases. The Committee is now composed of:
1. Denis M. Golden, Chairperson
Milliken & Company
1045 Sixth Avenue
New York, NY 10018
Tel: (212) 819-4586
Fax: (212) 819-4279
2. Bernard S. Berkowitz
Best Manufacturing, Inc.
443 Northfield Avenue
West Orange, NJ 07052
Tel: (973) 243-6025
Fax: (973) 325-7930
3. Michael Helms
The CIT Group/
Commercial Services, Inc.
301 So. Tryon Street, Suite 2200
2 Wachovia Center
Charlotte, NC 28202
Tel: (704) 339-2920
Fax: (704) 339-2822
4. David Greenstein
Homestead Holdings, Inc.
1700 Westlake Avenue N., Suite 200
Seattle, WA 98109
Tel: (206) 270-5300
Fax: (206) 270-5301
5. Gerald Smith
Central Textile Inc.
P.O. Box 68
Central, SC 29630
Tel: (864) 639-2491
Fax: (864) 639-4513
6. Mehtab Uddin Chawla
Al Karam Towel Industries (Pvt) Ltd.
D-11, S.I.T.E., Super Highway
Scheme No. 33
Karachi, PK
Tel: (646) 290-0415 (U.S.)
Fax: 92 21 688-1387
7. Robert C. DeMasi
Dan River, Inc.
P.O. Box 261
Danville, VA 24543
Tel: (434) 799-7327
Fax: (434) 799-4871
Headquartered in Jersey City, New Jersey, Best Manufacturing Group
LLC -- http://www.bestmfg.com/-- and its subsidiaries manufacture
and distribute textiles, career apparel and other products for the
hospitality, healthcare and textile rental industries. The
Company and four of its subsidiaries filed for chapter 11
protection on Aug. 9, 2006 (Bankr. D. N.J. Case No. 06-17415).
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., represent the Debtors. Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, and Morris S. Bauer, Esq.
and Stephen B. Ravin, Esq., at Ravin Greenberg PC, 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.
BIONICHE LIFE: Losses & Financial Woes Prompt Going Concern Doubt
-----------------------------------------------------------------
Bioniche Life Sciences Inc. announced its financial results for
the 2006 fiscal year ended June 30, 2006.
Going Concern Doubt
Due to a number of factors, including the Company's increased
operating losses with no material increase in working capital and
cash balances, and current burn rate, as well as management's
expectation that operating losses will increase due to the FDA-
approved start of its Phase III trials with Urocidin, describe a
"going concern uncertainty".
The Company is addressing this situation through monetizing
certain other non-core business assets; completing a partnership
deal to support its Phase III development program for Urocidin;
raising additional debt, preferred or common equity, and
potentially finding strategic financing partners to support the
animal health business.
These initiatives are progressing at various stages with the
support of the Board of Directors, and there is, however, no
assurance that they will be completed as currently planned.
FDA Approval
"Bioniche had an eventful year. The U.S. Food and Drug
Administration approved our two Phase III trial protocols using
Urocidin(TM) in the treatment of non-muscle invasive bladder
cancer," Graeme McRae, president and chief executive officer of
Bioniche Life Sciences Inc., stated.
"In addition, we were granted fast track status for the refractory
protocol, meaning that, when data from the refractory study
becomes available, we can expect an expedited review of our
Biologics Licensing Application for Urocidin."
Urocidin is the first product to be developed from the
Mycobacterial Cell Wall-DNA Complex (MCC) platform. This is a key
technology for Bioniche, not only for bladder cancer, but for
other human oncology indications which will be pursued once the
Phase III clinical trials for bladder cancer are underway.
Cystistat(R) Sale
During Fiscal 2006, the Company sold certain non-core assets that
were originally part of its Human Health division. The sale of
Bioniche Pharma Group Limited and the product, Cystistat(R), were
part of a strategic plan to monetize non-core assets and
streamline the Company's focus.
The cash generated from these transactions was used to finance
core research activities as the Company starts its Phase III
bladder cancer clinical trials and completes trials with its
E. coli O157:H7 cattle vaccine for U.S. registration.
Fiscal 2006 Financial Results Highlights
Consolidated revenues for the fiscal year remained flat when
compared with Fiscal 2005.
For the year ended June 30, 2006, the Company reported a net loss
of CDN$1.1 million on revenues of CDN$26.7 million, compared with
a net loss of CDN$15.6 million on revenues of CDN$26.6 million for
the same period in 2005.
The continued rise of the Canadian dollar in Fiscal 2006 had a
negative impact on U.S. dollar and Euro dominated revenues of
CDN$1.3 million. This was offset by revenues from product
additions, including the portfolio of embryo transfer products
from the former AB Technology (acquired in 2004) and increases in
market penetration of existing products, including additional
registrations for the Company's top-selling follicle stimulating
hormone, Folltropin(R)-V, in Europe.
Excluding currency fluctuation, Fiscal 2007 revenues are expected
to improve in the animal health technology platforms, primarily in
reproduction and embryo transfer products.
The overall gross profit margin continued remained constant in
Fiscal 2006, at 57% as compared with 56% in Fiscal 2005.
Expenses totaled CDN$22.1 million for the 12 months ending
June 30, 2006, which compares with CDN$17.2 million recorded in
the same period last year. This increase of CDN$4.9 million, or
28%, includes:
* CDN$2.5 million incurred to restructure the Company's
previous debt;
* CDN$1.4 million in additional amortization associated with
the intangible and other assets and write-off of deferred
financing fees;
* CDN$600,000 for administration charges associated with
certain severances, staff additions, and quality assurance;
* CDN$200,000 for cash paid interest and non-cash imputed
interest associated with the new debt; and
* CDN$200,000 in other non-material charges.
Gross research and development expenses remained stable in Fiscal
2006, reaching CDN$12.9 million compared with CDN$12.4 million in
Fiscal 2005.
As a result of the Company's focus on the E. coli O157:H7 cattle
vaccine and bladder cancer therapy, the Company completed several
financing transactions to increase its liquidity and reorganize
its capital structure.
These transactions impacted the Fiscal 2006 income statement:
* The sale of Bioniche Pharma Group, which closed during third
quarter, generated a CDN$9.5 million gain, inclusive of the
net year to date operations,
* The sale of the Cystistat business, which closed during
fourth quarter, generated an CDN$8.3 million gain inclusive
of CDN$700,000 from net sales associated with the product.
"We are at an important point in our corporate development, and
expect to achieve several significant milestones in the coming
year," Mr. McRae added. "These events will drive our future
commercial success and deliver significant value to our
shareholders."
A full-text copy of the Company's 2006 Annual Report is available
for free at http://ResearchArchives.com/t/s?139c
About Bioniche Life Sciences Inc.
Based in Belleville, Ontario, Canada, Bioniche Life Sciences Inc.
(TSX: BNC) -- http://www.Bioniche.com/-- is a research-based,
technology-driven Canadian biopharmaceutical company focused on
the discovery, development, manufacturing, and marketing of
proprietary products for human and animal health markets
worldwide. The fully-integrated company employs approximately 185
skilled personnel and has three operating divisions: Human Health,
Animal Health, and Food Safety. The Company's primary goal is to
develop proprietary cancer therapies supported by revenues from
marketed products in human and animal health.
BOOKHAM INC: Annual Stockholders' Meeting Slated for November 1
---------------------------------------------------------------
Bookham Inc. has scheduled its 2006 annual meeting of stockholders
for Wednesday, Nov. 1 at 3:00 p.m. The meeting will be held at
the Four Seasons Hotel, 2050 University Avenue in East Palo Alto,
California.
During the meeting, stockholders will be asked to:
1. elect one Class II director for the ensuing three
years;
2. ratify the selection of Ernst & Young LLP as the Company's
independent registered public accounting firm for the
current fiscal year; and
3. transact other business as may properly come before the
annual meeting, including any postponements or
adjournments thereof.
Holders of record of the Company's common stock at the close of
business on Sept. 15, 2006 are entitled to vote at the annual
meeting.
A copy of the definitive proxy statement for the annual
stockholders' meeting is available for free at:
http://researcharchives.com/t/s?1398
About Bookham Inc.
Bookham, Inc. -- http://www.bookham.com/-- designs, manufactures
and markets optical components, modules and subsystems that
generate, detect, amplify, combine and separate light signals
principally for use in high-performance fiber optics
communications networks. The Company has manufacturing facilities
in the UK, US, Canada, China and Switzerland; and offices in the
US, UK, Canada, France and Italy and employs approximately 2000
people worldwide.
* * *
As reported in the Troubled Company Reporter on Sept. 21, 2006,
Ernst & Young LLP expressed substantial doubt about Bookham's
ability to continue as a going concern after auditing the
Company's financial statements for the fiscal year ended
July 1, 2006. The auditing firm pointed to the Company's
recurring operating losses.
BRAVO! FOODS: June 30 Stockholders' Deficit Rose to $32.8 Million
-----------------------------------------------------------------
As of June 30, 2006, Bravo! Foods International Corp.'s balance
sheet showed total assets of $23,324,420 and total liabilities of
$53,724,920 resulting in a total stockholders' deficit of
$32,892,045. The company's total stockholders' deficit at
Dec. 31, 2005, stood at $22,191,884.
The company's June 30 balance sheet also showed strained liquidity
with $5,350,875 in total current assets and $53,629,137 in total
current liabilities.
For the three months ended June 30, 2006, the company's net loss
decreased to $13,104,020 from a $80,445,296 net loss for the
three months ended June 30, 2005.
Revenues for the current quarter increased to $3,705,226 from
revenues of $2,448,618 for the same period 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?1392
Bravo! Foods International Corp. -- http://www.bravobrands.com/--
develops, brands, markets, distributes and sells flavored milk
products throughout the 50 United States, Great Britain and
various Middle Eastern countries.
CABOODLES LLC: Wants Until November 6 to Decide on Leases
---------------------------------------------------------
Caboodles LLC asks the U.S. Bankruptcy Court for the Western
District of Tennessee to further extend, until Nov. 6, 2006, the
period within which it can decide whether to assume, assign and
assign, or reject non-residential real property leases.
The Debtor is the lessee of a warehouse location at Suite 112,
6400 Shelby View Drive in Memphis, Tennessee and a warehouse
location at 750 Chester Road, Delta in British Columbia.
The Debtor tells the Court that it is still reviewing and
exploring its reorganization options, including the possible
dismissal of the case.
A hearing on the motion is scheduled on Oct. 24, 2006, at
11:00 a.m. in Memphis, Tennessee.
Headquartered in Memphis, Tennessee, Caboodles, LLC, aka Caboodles
Cosmetics, manufactures cosmetics. The company filed for chapter
11 protection on Sept. 30, 2005 (Bankr. W.D. Tenn. Case No. 05-
35710). Steven N. Douglass, Esq., at Harris Shelton Hanover
Walsh, PLLC, represents the Debtor in its restructuring efforts.
No Official Committee of Unsecured Creditors has been appointed in
the Debtor's case. When the Debtor filed for protection from its
creditors, it listed $18,422,133 in assets and $15,874,247 in
debts.
CHICAGO HUDSON: U.S. Trustee Calls for Chapter 7 Conversion
-----------------------------------------------------------
William T. Neary, the U.S. Trustee for Region 6, asks the U.S.
Bankruptcy Court for the Northern District of Illinois, Eastern
Division, to convert Chicago Hudson, LLC's Chapter 11 case into a
liquidation proceeding under Chapter 7 of the Bankruptcy Code.
Mr. Neary argues that the Debtor's estate has suffered a
substantial diminution and that there is no longer any reasonable
likelihood of rehabilitation following the Debtor's sale of its
real property located at 750 North Hudson in Chicago. Chicago
Hudson's schedules of assets and liabilities, filed on May 31,
2006, had listed the property as the Debtor's sole asset.
The U.S. Trustee is pushing for a Chapter 7 conversion instead of
a dismissal because a conversion would result in the immediate
appointment of a Chapter 7 trustee. The Chapter 7 Trustee will
have the authority to examine and possibly avoid approximately
$616,200 in prepetition transfers allegedly made by the Debtor to
Rezmar Corporation, Mr. Neary says. The Rezmar transfers could
provide value to the Debtor's estate, while a dismissal will
result in the loss of that value, he adds.
The Court is scheduled to hold a status hearing on the Debtor's
Plan and Disclosure Statement at 11:00 a.m., on Nov. 9, 2006, at
219 South Dearborn, Courtroom 682 in Chicago, Illinois.
Headquartered in Chicago, Illinois, Chicago Hudson, LLC, filed for
chapter 11 protection on May 16, 2006 (Bankr. N.D. Ill. Case No.
06-05596). Richard S. Lauter, Esq., at Levenfeld Pearlstein, LLC,
represents the Debtor in its restructuring efforts. No Official
Committee of Unsecured Creditors has been appointed in the
Debtor's case to date. When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
and $50 million.
COLLINS & AIKMAN: Court Approves Expanded Hilco Retention
---------------------------------------------------------
The Honorable Steven Rhodes of the U.S. Bankruptcy Court for the
Eastern District of Michigan approved Collins & Aikman Corp. and
its debtor-affiliates' amended engagement letter with Hilco
Appraisal Services, LLC.
As reported in the Troubled Company Reporter on Oct. 4, 2006, the
Debtors notified the Court that they have further expanded Hilco's
scope of services. The Court had previously approved the Debtors'
request to retain Hilco as their personal property appraiser.
Hilco will physically appraise the machinery and equipment of
Collins & Aikman Corporation, at 845 Progress Court and 1560 Noble
Road, in Williamston, Michigan. Hilco will provide the Debtors
with a detailed Orderly Liquidation Value and Forced Liquidation
Value appraisal for the assets.
Pursuant to Sections 327(a) and 328 of the Bankruptcy Code, Judge
Rhodes authorizes the Debtors to employ Hilco to perform these
additional services.
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. 43; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
COLLINS & AIKMAN: Customers Want GECC Dispute Resolved
------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates are owed
more than $10,000,000 from major customers on account of certain
tooling equipment. These customers refused to pay receivable
balances until the Debtors resolve their dispute with General
Electric Capital Corporation concerning a Receivables Transfer
Agreement.
The customers are concerned that their payments would be
transferred to GECC rather than be used by the Debtors to pay
third-party vendors who helped develop the tooling equipment,
Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, explains. These customers fear that if the funds were
transferred to GECC, third-party vendors would seek payment
directly from the customers, Mr. Carmel says.
For this reason, the Debtors ask the U.S. Bankruptcy Court for the
Eastern District of Michigan to approve their Stipulation with
GECC. Pursuant to the stipulation, GECC will receive payments to
satisfy its claims under the Receivables Transfer Agreement, thus
allowing customers to pay the Debtors knowing that this payment
will be available for third-party vendors.
GECC Complaint
On Sept. 14, 2005, GECC filed a complaint against Collins &
Aikman Corporation; Carcorp, Inc.; General Motors Corporation;
General Motors of Canada Limited; General Motors de Mexico, S.
del R.L. de C.V.; Saturn Corporation; DaimlerChrysler
Corporation; DaimlerChrysler Canada, Inc.; and DaimlerChrysler
Motor Company, LLC. The GECC Adversary Proceeding addresses
prepetition receivables that GECC believes were sold by the
Debtors to Carcorp, and subsequently sold by Carcorp to GECC.
GECC seeks a declaratory judgment as to its interest in the
receivables. The Debtors seek to collect the receivables as
GECC's collection agent.
According to Mr. Carmel, approval of the Stipulation will not
only enable the Debtors to receive payments from customers but
also:
(a) eliminate the Debtors' loss of their use of cash
inadvertently paid to GECC;
(b) enable the Debtors to discontinue producing certain
accounting reports and compensating GECC's advisors for
work related to certain Prepetition Receivables Facility
Interests and the Receivables Transfer Agreement; and
(c) lead to GECC withdrawing its legal actions against the
Debtors and certain of their customers, thereby
maintaining goodwill.
Certain of the Debtors' customers have made receivables payments
to GECC mistakenly believing that it was entitled to those
payments, Mr. Carmel notes. Pursuant to the Stipulation, the
Debtors' Receivables Purchase Agreement and Receivables Transfer
Agreement with GECC will be terminated to prevent the loss of any
further funds on account of the wrong payments.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 43; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
COMMUNITY HEALTH: Fitch Holds B+ Rating on Sr. Subordinated Notes
-----------------------------------------------------------------
Fitch affirmed Community Health Systems, Inc.'s:
-- Issuer Default Rating 'BB';
-- Senior secured bank facility 'BB'; and
-- Senior subordinated notes 'B+'.
The Rating Outlook is Stable.
The rating action is driven by strong company specific operating
results despite industry pressures of increasing bad debt and
lower patient volumes. Community Health maintains solid free-
cash-flow, with $135.8 million generated for the last twelve
months ended June 30, 2006.
Fitch expects Community Health to achieve its FCF target between
$155 and $190 million for the full year 2006. The company
continues to grow through acquisitions, having completed seven so
far in 2006 financed using cash flow and revolver borrowings.
Fitch believes that higher-than-typical (typically 3-4
hospitals/year) levels of acquisitions will continue into 2007.
Due to Community Health's success in improving margins of newly
acquired hospitals, potential higher debt levels coincide with
increased EBITDA allowing leverage to remain relatively stable.
In late 2005, Community Health called for redemption of $150
million of the convertible subordinated notes due 2008 and the
remaining balance of $137 million was converted in January 2006.
Therefore the rating on the convertible subordinated notes has
been withdrawn.
At that time, Community Health initiated a five million share
repurchase program which concludes when $200 million in shares has
been repurchased or January 13, 2009. As of June 30, 2006,
approximately $139 million in shares had been repurchased at a
weighted-average price of $35.95 per share.
Total debt at June 30, 2006, was consistent with year-end 2005
levels at $1.7 billion as the redemption of the convertibles was
offset by revolver borrowings used to repurchase shares and for
acquisitions. Fitch expects that debt levels may be as high as
$1.9 billion at year end 2006, but anticipates that fiscal year
2006 interest coverage (Operating EBITDA/interest) will be close
to 5.0x and leverage (total debt/EBITDA) will be around 3.0x.
Primary liquidity is provided by cash flow from operations and the
company's $425 million revolving credit facility (availability at
June 30, 2006 was $283 million offset by $21 million in
outstanding LOC's). The credit facility is secured by capital
stock.
Community Health's capital structure includes 6.5% subordinated
notes due 2012, which are callable in 2008 and have a change of
control provision to buy back notes at 101%. The Secured Credit
facility has a cross default provision and limits payments on
several items, most notably, dividends, capital expenditures and
share repurchases. The company remains well within the financial
covenants set forth in the bank agreement.
The industry trends of increasing bad debts and soft volumes are
impacting Community Health and their peers' margins. These trends
are expected to continue as more individuals become self-insured
and underinsured.
Community Health has fared better than peers in maintaining volume
with 1.1% year-over-year same store volume growth achieved in
2Q06. The company still expects 1-2% same-store volume growth for
the year. Community Health's successful physician recruitment
efforts help mitigate the soft volume trend.
Bad debt expense continues to be unpredictable and growing,
increasing to 10.9% of total sales from 10.0% last year. Charity
care write-offs continue to range between 4% and 5% of revenue.
Community Health's pricing has remained strong, similar to its
peers. Revenues per adjusted admission for the company were up
7.2% YOY in the second quarter and have achieved YOY growth over
7% the past four quarters. Reimbursement expectations for 2007
are expected to be relatively consistent with 2006, specifically
3.4% Medicare increases and 5-7% in private-pay increases.
With a portfolio of 76 hospitals in 22 states, Community Health
Systems, Inc., is one of the largest publicly owned hospital
management companies in the U.S. Community Health concentrates its
operations in rural markets where in 85% of them, they are the
sole provider.
COMPLETE RETREATS: Court Okays Rejection of 21 Contracts & Leases
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut gave
Complete Retreats LLC and its debtor-affiliates authority to
reject these executory contracts and unexpired leases for the use
and rental of various properties:
Monthly Effective Termination
Counterparty Fees Date Date
------ ------- --------- -----------
Gordon & Joan Edwards $20,000 09/06/05 09/31/06
Michael Ryan 5,400 09/15/05 09/14/06
Desarrollos Turisticos Milenio 20,000 11/07/05 11/15/06
W. Klappenbach & C. Clift 5,000 09/06/05 08/30/06
Willian O'Neil 31,200 09/14/05 12/31/06
Kenneth E. Moore 15,000 04/10/06 04/30/08
Michelle Redlich 8,500 11/30/05 12/31/09
Brian N. Hollinagel 30,000 04/19/06 04/30/07
Gail Kology 6,000 09/19/06 11/30/06
Ruth Belleville 5,200 08/02/05 08/21/06
Fontainebleau Florida Hotel 69,865 05/05/06 04/30/07
L+M Investment Group L.L.C. 15,000 04/23/04 04/30/07
Marlin Ventures USA Inc. 20,000 03/31/06 04/30/07
Bonita Stewart 4,600 08/20/05 10/31/06
Ted & Lida Urban 6,500 02/13/06 03/31/07
Charles & June McNeirney 10,609 03/16/04 03/31/07
Thomas H. Hurlburt 5,062 11/18/02 12/31/06
Richard & Linda Sher 4,500 07/01/05 07/31/07
Frank Rostron 7,000 05/31/05 07/31/07
Jeff Dishner - 07/29/04 -
Christopher Miller/Richard Treves - 10/15/05 -
As reported in the Troubled Company Reporter on Sept. 8, 2006, the
Debtors have paid security deposits for six of the Contracts and
Leases:
Agreement Security Deposit
--------- ----------------
Edwards Agreement $20,000
Hollinagel Agreement 30,000
L+M Agreement 12,500
Marlin Agreement 20,000
Stewart Agreement 6,750
McNeirney Agreement 30,000
The Debtors told the Court that they have exited all properties
related to the Agreements as of their bankruptcy filing because
those properties were no longer beneficial to their business or
necessary to their reorganization efforts.
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. 11; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
COMPLETE RETREATS: LEG Asks Debtors to Assume or Reject Agreements
-----------------------------------------------------------------
On Nov. 28, 2005, LEG Investments, Ltd., and Complete Retreats LLC
and its debtor-affiliates entered into a property management
agreement for the management of a real property located at 138
Polecat Lane, in Telluride, Colorado. The Agreement became
effective on Feb. 1, 2006, and will terminate on Jan. 31, 2007.
The Agreement provides that the Debtors will pay LEG $22,000 per
month. As of July 23, 2006, the Debtors owe $60,322 to LEG.
In order to assume the Agreement as an executory contract
pursuant to Section 365(b)(2) of the Bankruptcy Code, Scott M.
Charmoy, Esq., at Charmoy & Charmoy, in Fairfield, Connecticut,
notes that the Debtors must:
-- cure or provide adequate assurance of prompt cure of all
defaults;
-- compensate or provide adequate assurance of prompt
compensation for any actual pecuniary losses resulting from
a default; and
-- provide adequate assurance of future performance under the
Agreement.
LEG now wants to sell the Property, Mr. Charmoy says. Considering
LEG's desire to sell the Property, even if the Debtors cure all
defaults, they cannot assure LEG of adequate future performance
considering the circumstances, Mr. Charmoy contends. The Debtors
will therefore not be able to assume the Agreement, and their
continuing delay in assuming or rejecting the Agreement prejudices
LEG's efforts to sell or lease the Property during the upcoming
winter "peak" season.
The Property is located in a prime skiing area in Colorado, and
LEG believes that the Property has a fair rental value of $5,000
to $10,000 per night during the winter "peak" season.
If the U.S. Bankruptcy Court for the District of Connecticut
does not require an immediate assumption or rejection of the
Agreement, the Debtors could effectively force a renewal of the
Agreement by delaying assumption or rejection until after the Jan.
31, 2007 termination date, Mr. Charmoy points out.
LEG thus asks the Court to:
(a) compel the Debtors to make an immediate assumption or
rejection of the Agreement pursuant to Section 365(d)(2);
(b) lift the automatic stay, nunc pro tunc to Sept. 29, 2006,
so that it may terminate the Agreement and consummate the
sale of the Property; and
(c) find that its Motion to Compel satisfies the requisite
written notice requirements for termination under the
Agreement.
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. 11; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
CONVERIUM HOLDINGS: CHNA Sale Plan Cues Moody's to Review Ratings
-----------------------------------------------------------------
Moody's Investors Service placed the B2 senior unsecured debt
rating of Converium Holdings (North America) Inc. on review for
possible upgrade following an announcement by its parent company,
Converium Holding AG, that it will sell CHNA and its U.S.
subsidiaries to National Indemnity Company, a subsidiary of
Berkshire Hathaway Inc. Moody's has also placed the B2 insurance
financial strength rating of Converium Reinsurance (North America)
Inc., a subsidiary of CHNA, on review for possible upgrade. The
review for possible upgrade will focus on the nature of Berkshire
Hathaway's support for CHNA and its subsidiaries.
Under the terms of the agreement, Berkshire Hathaway will inherit
the debt obligations of CHNA, which consists of $200 million,
7.125% unsecured senior notes due October 2023, albeit Berkshire
Hathaway will not be providing an explicit guarantee for these
securities. Future debt service at CHNA will continue to rely
largely on the support provided by the parent organization, given
that CRNA has lacked the ability to provide dividends to CHNA in
the recent past and is unlikely to be able to do so in the
foreseeable future. In this regard, Berkshire Hathaway, which has
a long-term issuer rating of Aaa, is expected to afford
bondholders and policyholders greater support than that afforded
by Converium (subordinated debt rating of Ba1), given its stronger
credit profile.
Moody's decision to review the rating of CRNA for possible upgrade
also acknowledges the progress that the company has made in
running off and commuting its liabilities. Its NAIC risk-based
capital ratio has improved to 303% at year-end 2005 compared to
162% at year-end 2004. Further, the ratio of its loss reserves-
to-surplus has declined to 1.99 at mid-year 2006 compared to 5.07
at year-end 2004. However, the pace of commutations will likely
slow under Berkshire's ownership, given that Berkshire will have
less incentive to commute claims.
The sale is expected to close by year-end 2006, at which time
Moody's expects to conclude the review for possible upgrade based
on the level of support that is to be expected from Berkshire
Hathaway and the risk-adjusted capitalization of CHNA's
subsidiaries.
The last rating action on CHNA occurred on April 27, 2006, when
Moody's changed the outlook on ratings of Converium AG and
affiliates to stable from negative.
These ratings have been placed on review for possible upgrade:
* $200 million 7.125% unsecured senior notes due October 2023
-- senior debt rating of B2;
* Converium Reinsurance (North America) Inc -- insurance
financial strength rating of B2.
Converium Holdings (North America) Inc is the U.S. intermediate
holding company of Converium AG, based in Zurich, Switzerland.
Converium AG is the main operating company of Converium Holding
AG, Zug, Switzerland.
DANA CORP: Court Approves Toledo-Lucas Lease Pact on Ohio Property
------------------------------------------------------------------
On Oct. 1, 2002, Debtor Torque-Traction Technologies, LLC,
formerly known as Spicer Driveshaft, Inc., and the Toledo-Lucas
County Port Authority entered into a Lease Agreement with respect
to a certain property located in Maumee, Ohio.
Dana Corporation guaranteed Torque-Traction's obligations under
the Lease pursuant to a Guaranty Agreement dated October 2002.
Certain letters of credit in the face amount of $1,700,000 have
also been posted to secure certain of Torque-Traction's
obligations under the Lease, Corinne Ball, Esq., at Jones Day, in
New York, relates.
Although designated as a "Lease Agreement", Ms. Ball points out
that the Lease has many of the hallmarks of a financing
arrangement. The Debtors asserts that the proper treatment of
the Lease is as a loan and security agreement rather than an
unexpired lease, and in that event, postpetition payments under
the Lease may be recharacterized.
Toledo-Lucas Port Authority contends that the Lease should be
treated as a true lease or, if other than a lease for bankruptcy
purposes, must be treated as a fully secured loan and a security
agreement. The Port Authority maintains that Torque-Traction is
obligated to continue to make postpetition payments under the
Lease pursuant to Section 365 of the Bankruptcy Code.
As of Sept. 29, 2006, Torque-Traction has made postpetition
payments under the Lease with a reservation of rights that the
payments may be recharacterized as payments of principal and
interest under a loan, or may be subject to any other claims,
defenses or counterclaims that the parties may have under the
operative documents.
Accordingly, in a stipulation approved by the U.S. Bankruptcy
Court for the Southern District of New York, the parties agree
that:
(a) Unless and until notice is provided to the Port Authority,
Torque-Traction will continue to observe and perform all
of its obligations under the Lease, provided that if the
Lease ultimately is determined to be a financing
arrangement, all payments made under the Lease as of the
Petition Date will be deemed to have been adequate
protection payments, and:
(i) if and to the extent the Port Authority is
determined to be undersecured, be applied solely
against principal except to the extent otherwise
applied by Court order; and
(ii) if and to the extent the Port Authority is
oversecured, be applied to fees, costs, principal
and interest or otherwise to the extent permitted
by law as determined by the Court.
(b) As long as Torque-Traction continues to observe and
perform all of its obligations under the Lease on a timely
basis, the Port Authority agrees that it will not:
(i) direct The Huntington National Bank, as Trustee, or
J.P. Morgan Trust Company, National Association, as
Trustee, to draw on the Letters of Credit; or
(ii) take any other action to draw on the LOCs.
(c) The deadline for Torque-Traction to assume or reject the
Lease is extended until the earlier of:
(i) March 31, 2007, or
(ii) the date that is 45 days after it sends a written
notice of its intent to cease making payments.
(d) The Agreement does not prejudice the parties' rights to
argue that the Lease is, or is not, a true lease and that
Section 365 is not applicable; or if not treated as a true
lease, that any secured claim under the Lease is, or is
not, a fully secured claim for bankruptcy purposes.
(e) Torque-Traction will continue to make monthly payments
under the Lease until it decides whether to assume or
reject the Lease.
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. Stahl Cowen Crowley, LLC serves as counsel to the
Official Committee of Non-Union Retirees. When the Debtors filed
for protection from their creditors, they listed $7.9 billion in
assets and $6.8 billion in liabilities as of Sept. 30, 2005.
(Dana Corporation Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
DANA CORP: Seeks Court's Approval on Bing Metals Settlement Pacts
-----------------------------------------------------------------
Dana Corporation and its debtor-affiliates, and Bing Metals Group-
Assembly Inc., are parties to a number of agreements relating to
two separate manufacturing programs for Operations, Engineering
and Maintenance products:
(1) The Ford U-354 Program
Bing Metals supplies the Debtors with parts utilized to
manufacture frames for the Ford Expedition and Lincoln
Navigator sport-utility vehicle.
In February 2005, the Debtors issued a purchase order for
tooling in connection with the Ford Program. Pursuant to
the Purchase Order and the Debtors' agreements with Ford
Motor Company, ownership of the Ford Tooling passed from
Bing to the Debtors to Ford.
The Debtors have paid Bing Metals in full before the
Petition Date for the Ford Tooling, and was reimbursed by
Ford for the cost of those tooling.
(2) The Toyota 200L Program
In late 2005, Bing Metals was identified as a supplier
parts utilized to manufacture frames for the Sequoia
sport-utility vehicle, referred to as the Toyota 200L
Program. In connection with the Toyota Program, the
Debtors and Bing Metals entered into a non-binding letter
of intent in November 2005.
The Debtors then issued a series of purchase orders, dated
June 7, 2006, for approximately $3,611,459 for tooling to
be utilized in Bing Metals' production of component parts
for the Toyota 200L Program.
Bing Metals, in turn, sought to purchase that tooling from
Fabest Co., Ltd., for approximately $400,000 less than the
amount the Debtors were to pay for the Toyota Tooling.
As of the Debtors' bankruptcy filing, the Toyota Tooling
had not been completed by Fabest or sold to Bing Metals,
and the Debtors have not paid any amounts to Bing Metals
for the Tooling.
Corinne Ball, Esq., at Jones Day, in New York, relates that in
late July and August 2006, the Debtors expressed certain concerns
to Bing Metals regarding the quality of the parts Bing Metals was
producing for them.
After continuing to experience various financial, quality and
other difficulties, Bing Metals advised the Debtors that it no
longer desired to produce production parts under the Ford U-354
Program, and that it desired to terminate its relationship with
the Debtors with respect to that program.
In response, the Debtors exercised its right to cancel the letter
of intent with respect to the Toyota 200L Program. The parties
then held a number of discussions in an effort to effect an
equitable and consensual conclusion of their business
relationship.
As part of the process, the Debtors sought to take possession of
the Ford Tooling from Bing Metals so that it could be delivered
to a replacement supplier. Bing Metals, however, was unwilling
to release the Ford Tooling unless and until the Debtors agreed
to pay certain disputed amounts associated with both the Ford U-
354 Program and the Toyota 200L Program.
Specifically, Bing Metals demanded that the Debtors pay various
costs it incurred in connection with the Ford U-354 Program,
including reimbursement for steel purchased by Bing Metals,
certain expedited freight charges it incurred in shipping parts
to the Debtors and the cost of certain packaging baskets it had
purchased. Bing Metals sought to have the Debtors waive their
rights to certain debits or claims they have against Bing Metals
for short shipments and defective parts. Bing Metals also
demanded that the Debtors reimburse various costs it allegedly
incurred in connection with its efforts to source the tooling for
the Toyota 200L Program.
The Michigan Lawsuit
The Debtors were unwilling to pay the demanded amounts.
Subsequently, on Sept. 11, 2006, the Debtors commenced a lawsuit
against Bing Metals in the U.S. District Court for the Eastern
District of Michigan:
(a) asserting that Bing Metals had breached its contracts with
the Debtors relating to the Ford U-354 Program; and
(b) seeking the return of the Ford Tooling, along with money
damages and other forms of relief.
On the same date, the Debtors filed a motion in the Michigan
Lawsuit, seeking a temporary restraining order requiring Bing
Metals to give the Debtors' employees access to its premises so
that the Debtors could take possession of the Ford Tooling. Bing
Metals filed a response to the Debtors' TRO Motion. Before the
hearing on the TRO Motion, the Debtors and Bing Metals have
agreed on a settlement of their disputes.
Bing Metals Settlement
Ms. Ball notes that the terms and provisions of the Settlement
are not yet embodied in a formal written definitive agreement.
However, the terms and provisions have been read onto the record
of the Michigan District Court. The Debtors anticipate filing a
motion soon in the Michigan District Court, seeking to enforce
the terms of the Settlement.
According to Ms. Ball, the Settlement between the Debtors and
Bing Metals provides that:
(a) The Debtors will purchase at normal invoice price all
parts in Bing Metals' inventory produced for the Ford
U-354 Program in an as-is condition, as long as those
parts are not generally recognized as scrap. The parties
will reconcile their accounts receivable and accounts
payable for those parts, taking into account any
postpetition debits possessed by the Debtors for "offsets
for steel, short shipping, sorting costs and defective
costs" and to determine the amount to be paid upon
reconciliation.
The Debtors will limit its potential offsets to the
offsets they had previously brought to Bing Metals'
attention, including $48,000 in debits they identified to
Bing Metals on the eve of Settlement. The Debtors will
also waive any other potential debits and pay the
reconciled amount.
The Debtors estimates that the amount is approximately
$150,000, whereas Bing Metals has argued that it should be
approximately $170,000.
(b) The Debtors agree to purchase at normal invoice price 176
packaging baskets that Bing Metals had purchased for
packaging parts to be sold to the Debtors. The total
invoice cost of those baskets was approximately $55,000.
The Debtors estimate that the amount represents the fair
market value for those packaging baskets and as part of
the Settlement, the Debtors paid the amount to Bing Metals
on September 22, 2006.
(c) The Debtors will purchase from Bing Metals any Severstal
brand steel inventory in Bing Metals' possession at
$0.1814 per pound. Bing Metals has since advised the
Debtors that it can provide no evidence that the steel it
possesses is Severstal brand steel. As a result of the
concession, the Debtors have no obligation to pay those
amounts.
(d) The Debtors agree to pay $75,000 to Bing Metals for "costs
attributed to start-up of the Toyota Program," including
"sunk costs." Bing Metals was required to provide to the
Debtors all of the documentary evidence of those costs in
Bing Metals' possession, but the Debtors agreed as a part
of the Settlement to pay the amount immediately regardless
of what evidence was produced by Bing Metals. In
connection with the Settlement, the Debtors made the Sunk
Cost Payment on September 22, 2006.
(e) Bing Metals was to surrender possession of the Ford
Tooling by immediately providing the Debtors with access
to its premises and assisting with the shipment of those
tooling. Bing Metals surrendered possession of the Ford
Tooling to the Debtors on September 12, 2006.
(f) The Debtors would assume Bing Metals' obligations to third
parties with respect to the purchase of Toyota Tooling.
(g) The parties agree to a limited release of claims with
respect to the Toyota and Ford Programs, but the Debtors
will retain certain warranty claims against Bing Metals
for parts sold by Bing Metals to them.
(h) The Debtors will pay $25,000 to Bing Metals if it could
provide proof that the Debtors agreed to pay a particular
expedited shipping charge. Bing Metals has since conceded
that it has no proof that the Debtors ever agreed to pay
the amount.
If the Michigan District Court determines or the parties agree
that the Settlement contains terms materially different from
those set forth, the Debtors intend to file appropriate
supplemental pleadings in the Court and seek additional relief,
if necessary.
Ms. Ball maintains that the Debtors are paying Bing Metals for
goods that they can utilize in their business. On the contrary,
litigating the issues resolved by the Settlement in the Court and
in the Michigan District Court could take substantial time and
resources, Ms. Ball points out. Litigation would require the
Debtors to incur substantial additional attorneys' fees and
expenses without any guaranty that the results would be better
for their estates than the results embodied in the Settlement.
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. Stahl Cowen Crowley, LLC serves as counsel to the
Official Committee of Non-Union Retirees. When the Debtors filed
for protection from their creditors, they listed $7.9 billion in
assets and $6.8 billion in liabilities as of Sept. 30, 2005.
(Dana Corporation Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
DEL PUEBLO: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Del Pueblo Holdings, LLC
515 A South Fry Road, Suite 109
Katy, TX 77450
Bankruptcy Case No.: 06-10440
Chapter 11 Petition Date: October 18, 2006
Court: Eastern District of Texas (Beaumont)
Debtor's Counsel: John J. Durkay, Esq.
Mehaffy, Weber, Keith & Gonsoulin
2615 Calder, 8th Floor
P.O. Box 16
Beaumont, TX 77704
Tel: (409) 835-5011
Fax: (409) 835-5177
-- and --
J. Craig Cowgill, Esq.
J. Craig Cowgill & Associates, P.C.
2211 Norfolk, Suite 1190
Houston, TX 77098
Tel: (713) 956-0254
Estimated Assets: Less than $10,000
Estimated Debts: More than $100 million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
McMaster-Carr $84,484
6100 Fulton Industrial Boulevard
Atlanta, GA 30336
Joseph A. Caragol Inc. $82,744
29 South Central Avenue
Valley Stream, NY 11580
Agro Sevilla USA $80,000
340 Herndon Parkway
Herndon, VA 20170
PGI Enterprises, Inc. $13,000
1000 Beecher Street
San Leandro, CA 94577
Santa Barbara Olive Company $9,477
12477 Calle Real
Goleta, CA 93117
The Hartford $6,266
RJC Management, Inc. $5,127
Ryco Packaging Corp. $2,222
Consolidated Mills, Inc. $2,032
Regional Credit Corp. $1,854
Tri-Star Printing $1,732
Old Dominion $1,614
Trans-Consolidated Distributors $1,109
Seal-It, Inc. $995
SBC $781
Sprint $247
SimplexGrinnell Dept. $186
Plastics Technics, Inc. $156
Penn Wheeling Closure LLC $130
UPS Lockbox 577 $23
DELPHI CORP: Can File EDS and HP Agreements Under Seal
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Delphi Corporation and its debtor-affiliates to file
under seal certain agreements between the Debtors and Electronic
Data Systems Corporation, EDS Information Services, LLC, and
Hewlett Packard Company.
As reported in the Troubled Company Reporter on Sept. 29, 2006,
the Debtors want to transform their salaried workforce to ensure
that their organizational and cost structure is competitive and
aligned with product portfolio and manufacturing footprint.
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. For this reason the Debtors entered into agreements
with EDS and HP to provide IT infrastructure services.
The Debtors said 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.
Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/
-- supplies 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. 43; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DELPHI CORP: Wants 396 Proofs of Claim Deemed as Timely Filed
-------------------------------------------------------------
Delphi Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to deem 396
proofs of claim as timely filed.
The Debtors noticed certain abnormalities in their claims register
because it reflected a disproportionate number of proofs of claim
as having been received on Aug. 9, 2006. The claims received on
Aug. 9 were 800% more than the claims received on any other day in
August.
After noticing this abnormality, the Debtors immediately
investigated the procedures of Kurtzman Carson Consultants LLC,
their claims agent, and The DRS Group, a firm engaged by KCC to
help in claims retrieval.
Parties were directed to mail their proofs of claim to a post
office box at the Bowling Green Station of the United States Post
Office, to the extent not delivered to the Court by messenger or
overnight courier. KCC engaged DRS to physically retrieve all
proofs of claim from the Post Office Box, as well as to receive
from the clerk of the Court proofs of claim delivered to the
Court by messenger or overnight courier. DRS will stamp each
proof of claim with the date on which it was received and a give
it unique claim number. Thereafter, the first page of each proof
of claim will be scanned into computer files and provided to the
Court and the original proofs of claim will be forwarded to the
Claims Agent for entry onto the claims register.
The Debtors' investigation revealed that DRS's general practice
was to retrieve mail from the Post Office Box twice daily. The
first mail retrieval is around 9 a.m. while the second mail
retrieval occurred in the early afternoon. On the July 31, 2006
deadline for filing proofs of claim, DRS did not alter this
routine and last retrieved mail from the Post Office Box in the
early afternoon on the Bar Date. Therefore, some proofs of claim
that may have been timely received into the Post Office Box in
accordance with the Bar Date Order may not have been collected by
DRS from the Post Office Box until the morning of Aug. 1, 2006.
On Aug. 1, 2006, DRS again collected mail from the Post Office
Box on two occasions -- first in the early morning and last in
the early afternoon. DRS continued to collect mail from the Post
Office Box at least once daily on each day following the Bar
Date. Beginning with the proofs of claim collected by DRS from
the Post Office Box on the morning of August 1 up to August 9,
DRS did not segregate proofs of claim by the date received but
combined all of them instead. DRS stamped all proofs of claim
collected since August 1 with an August 9, 2006, receipt date.
Those proofs of claim, however, could have been received into the
Post Office Box at any point in time from mid-afternoon on the
Bar Date through mid-afternoon on Aug. 9, 2006. DRS apparently
discarded all envelopes in which those proofs of claim had been
received.
Because the proofs of claim that were collected from the Post
Office Box between August 1 and August 9 were not necessarily
stamped with the accurate date of receipt and because the
envelopes are not available, the Debtors cannot determine with
any certainty which of the Proofs of Claim were timely filed and
which were not.
The Proofs of Claim assert liquidated claims for $21.3 million as
well as additional undetermined unliquidated claims. The Debtors
have not yet reconciled any of the Proofs of Claim and therefore
make no representation as to the possible claim amounts
ultimately to be allowed.
A list of the 396 Proofs of Claim is available for free at:
http://researcharchives.com/t/s?13a0
Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/
-- supplies 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. 43; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DELTA AIR: Comair Implements Court-Approved Changes on CBA
----------------------------------------------------------
Comair, Inc., on Oct. 9, 2006, informed the International
Brotherhood of Teamsters, its flight attendants' bargaining
representative, that it will implement certain cost-saving
modifications to the flight attendant collective bargaining
agreement effective Nov. 15, 2006.
The U.S. Bankruptcy Court for the Southern District of New York
had authorized Comair in July 2006, to reject, pursuant to Section
1113(c) of the Bankruptcy Code, the flight attendant CBA. Among
others, Comair proposed an average pay cut of 7.5% to its flight
attendants.
A summary of the terms Comair intended to implement effective
November 15 is available for free at:
http://ResearchArchives.com/t/s?13a6
Although Comair was entitled to implement the proposals
immediately, Comair deferred implementation and continued to
bargain with IBT in the hope of reaching a consensual agreement,
John J. Gallagher, Esq., at Paul, Hastings, Janofsky & Walker
LLP, in Washington, D.C., said.
However, according to Mr. Gallagher, Comair simply cannot wait
any longer and is unwilling to bargain further against itself,
making further concessions and continuously raising the floor for
a new agreement in an effort to reach agreement with IBT. Comair
is thus, unfortunately, faced with the need to implement cost
reductions necessary to permit its reorganization.
Comair Wants Scope of Modifications Clarified
In its July 2006 Order, the Court found that Comair's proposed
changes to the terms and conditions of employment of flight
attendants were, inter alia, "necessary . . . to maintain the
Company as a viable enterprise", fair and equitable to the flight
attendants in light of the sacrifices of all other stakeholders,
and rejected by IBT without good cause.
While it believes that its actions are supported by principles of
both bankruptcy law and labor law, and is the most appropriate
manner in which to pursue a consensual agreement with IBT, Comair
admitted that the appropriate scope of implementation following
labor contract rejection lies in uncharted waters.
Mr. Gallagher added that the terms Comair announced that it would
implement effective November 15 do not include every discrete
item contained in its Section 1113 Proposal. Comair has not yet
determined whether or when to implement three groups of
additional proposed changes. These proposed changes either:
(1) have no meaning or legal significance in the absence of
mutual agreement;
(2) provide future, "out-year," changes that are not presently
ripe for implementation; or
(3) constitute enhancements, compromises, or "upsides" offered
by Comair in an effort to encourage consensual agreement.
Accordingly, Comair sought the Court's guidance on the scope of
changes to be implemented. Specifically, Comair asked Judge
Hardin to:
* clarify pursuant to the July 2006 Order, it is permitted
to implement the cost-savings provisions of its Section
1113 Proposal to IBT; and
* determine whether or not it is presently required to
implement any of the items that belongs to the three
groups of proposed changes.
Parties Reach Tentative Agreement
Concurrent with its announcement to implement changes to the
terms of the flight attendants' employment, Comair conveyed that
it remains willing and available to bargain with IBT. Comair
also said that its complete contract proposals to IBT, including
profit sharing and benefit enhancements, remain on the table and
open for negotiation.
In response, Jim Hoffa, IBT general president, in a press
release, said the union would work to reach a fair settlement
with Comair. He, however, stated that Comair's plans to
unilaterally cut wages and change work rules for its 970 flight
attendants based on some artificial deadline is outrageous and
will not be tolerated.
"The flight attendants understand that if their company is in
dire straits, they will share the burden of necessary cuts. It's
time that Comair acknowledges this, and negotiate a fair contract
that enables the company and its entire workforce to thrive,"
Mr. Hoffa added.
After further negotiations, representatives from Teamsters Union
Local 513 and Comair, on October 13, 2006, reached a tentative
agreement, IBT announced in its Web site.
According to The Associated Press, Connie Slayback, Teamsters
Local 513 president, said that the terms of the Tentative
Agreement include:
-- the contract duration will be four years;
-- health insurance payments will be capped;
-- implementation of a 7.5% across-the-board pay cut; and
-- job protection to flight attendants if Delta sells Comair.
IBT will send the TA to flight attendants for ratification.
Voting is expected to conclude on November 14, 2006.
According to IBT, if the flight attendants ratify the agreement,
it will be imposed by the end of the year, dependent on when
Comair pilots and mechanics reach agreements with Comair. The
flight attendants' agreement would take effect sooner if Comair
and the two unions negotiate agreements before December 31, 2006.
"I applaud our flight attendants for taking a strong stand to
protect their families and communities in the face of Comair's
severe demands," Mr. Hoffa said in IBT's press release. "This
agreement ensures that the flight attendants remain the best-paid
flight attendants in the regional carrier industry."
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DOW CORNING: Appeals Court Remands Interest Dispute to Dist. Court
------------------------------------------------------------------
The U.S. Court of Appeals for the Sixth Circuit reversed a
decision by the U.S. District Court for the Eastern District of
Michigan concerning payment of interest at the federal judgment
rate on approximately $1 billion of commercial claims against Dow
Corning Corporation. The Appeals Court says the solvent debtor
must pay interest at the applicable contractual default rate of
interest rather than the (much lower) federal judgment rate.
As reported in the Troubled Company Reporter, the Honorable Arthur
J. Spector ruled that Dow Corning's payment of interest at the
6.28% federal judgment rate in effect on Dow Corning's chapter 11
petition date was sufficient. See In re Dow Corning Corp., 244
B.R. 678, 680 (Bankr. E.D. Mich. 1999). Angelo Gordon & Co.,
L.P., Franklin Mutual Advisors and Appaloosa Management, L.P.,
holding $300,000,000 in principal amount of commercial claims
against Dow Corning, argued that the law requires higher interest
payments and charged that the Debtor was being mean-spirited. The
Honorable Denise Page Hood, 2004 WL 764654, affirmed Judge
Spector's decision at the District Court level.
The Official Committee of Unsecured Creditors argued:
1) that under the Plan, unsecured creditors would be
receiving less than they would have received if Dow
Corning were liquidated; and
2) that the imposition of the federal judgment interest rate
meant that they were not being paid the full interest
entitled to them while Dow Corning's two shareholders were
retaining millions in equity.
The Bankruptcy Court overruled the Committee's first argument but
verbally amended the Plan to allow for the payment of interest to
unsecured creditors in accordance with the terms of their
contracts. However, the Court expressly stated that in
determining the applicable interest rate "no effect is to be given
to contractual provisions which purport to define as a default the
filing of a voluntary petition for bankruptcy relief."
The Committee appealed the decision with the District Court.
However, the District Court upheld the Bankruptcy Court's
determination that the original plan had not included default
interest, and that the Committee failed to establish that the Plan
would violate Section 1129(b)'s fair-and-equitable standard absent
the payment of default interest.
Court of Appeals Rules
In its appeal from the District Court's decision, the Committee
maintained that the Bankruptcy Court abused its discretion by
interpreting the Plan in a way as to produce a result that
violates Section 1129(b). The Committee argued that by
interpreting the plan as not requiring the payment of default
interest, the Bankruptcy Court caused the Plan to violate the
absolute priority rule.
In a decision published at 2006 WL 2061802, the Sixth Circuit
agreed with the Committee's stand that denying interest at rates
applicable to defaults would violate the statutory requirement of
a fair and equitable plan, absent compelling equitable
considerations. The Appeals Court said that by interpreting the
plan as allowing interest only at the non-default rate, the
Bankruptcy Court effectively transferred that risk of default back
to the unsecured creditors.
However, the Court of Appeals remanded the matter to the District
Court because the record in this matter is not sufficient to
determine whether the general rule calling for the payment of
default interest in solvent-debtor cases, when considered with
other equitable factors, makes the award of default interest
appropriate in Dow Corning's case.
Donald S. Bernstein, Esq., at Davis, Polk & Wardwell, and Glenn E.
Siegel, at Dechert LLP, represented the Official Committee of
Unsecured Creditors. David M. Bernick, Esq., at Kirkland & Ellis
represented Dow Corning.
About Dow Corning
Dow Corning Corp. -- http://www.dowcorning.com/-- produces and
supplies more than 7,000 silicon-based products and services to
more than 25,000 customers worldwide. Dow Corning is equally
owned by The Dow Chemical Company and Corning Incorporated.
The Company filed for chapter 11 protection on May 15, 1995
(Bankr. E.D. Mich. Case No. 95-20512) to resolve silicone implant-
related tort liability. The Company owed its commercial creditors
more than $1 billion at that time. A consensual Joint Plan of
Reorganization, amended on February 4, 1999, offering to pay
commercial creditors in full with post-petition interest,
establish a multi-billion-dollar settlement trust for tort claims,
and leave Dow Corning's shareholders unimpaired, took effect on
June 30, 2004.
DUBBINS LLC: Case Summary & 4 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Dubbins LLC
320 Roebling Street, Suite 522
Brooklyn, NY 11211
Bankruptcy Case No.: 06-43868
Chapter 11 Petition Date: October 17, 2006
Court: Eastern District of New York (Brooklyn)
Debtor's Counsel: Bruce Weiner, Esq.
Rosenberg Musso & Weiner LLP
26 Court Street, Suite 2211
Brooklyn, NY 11242
Tel: (718) 855-6840
Fax: (718) 625-1966
Total Assets: $1,220,000
Total Debts: $591,334
Debtor's 4 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Leopold Braun $40,000
199 Lee Avenue #154
Brooklyn, NY 11211
Shia Schwartz $35,000
517 Flushing Avenue
Brooklyn, NY 11205
Mack Holding Inc. $25,000
199 Lee Avenue
Brooklyn, NY 11211
Wyde Lumber $4,500
Route 17 B
Mangaup Valey, NY 12742
DURA AUTOMOTIVE: Interest Non-Payment Cues Moody's Default Rating
-----------------------------------------------------------------
Moody's Investors Service lowered the Probability of Default
rating of Dura Automotive Systems, Inc. to D from Caa3. The
ratings for the company's various debt instruments are unaffected.
The lowered Probability of Default rating reflects the company's
disclosure that it did not make the interest payment due on Oct.
16, 2006 on the 8-5/8% Senior Notes due 2012 issued by Dura
Operating Corp.
The related Indenture provides a 30 day grace period before an
event of default may be called by the Trustee or at least 25% in
principal amount of the noteholders. The failure to make the
interest payment on the Senior Notes constitutes an immediate
event of default under the Company's asset-based revolving credit
facility. The failure to make the interest payment on the Notes
upon the expiration of the 30 day grace period will also
constitute an event of default under the Company's outstanding 9%
Senior Subordinated Notes due 2009 and Second Lien Term Loan.
The outlook is stable
Ratings lowered:
* Dura Automotive Systems, Inc.:
-- Probability-of-Default rating to D from Caa3
Ratings Affirmed:
* Dura Automotive Systems, Inc.:
-- Corporate Family Rating, Ca;
-- SGL-4 Speculative Grade Liquidity Rating
* Dura Operating Corp.:
-- $150 million guaranteed senior secured second-lien term
loan due May 2011, Caa2 (with the LGD assessment changed
to LGD2 from LGD3, and the LGD rate changed to 23% from
35%);
-- $75 million guaranteed senior secured second-lien add-on
term loan due May 2011, Caa2 (with the LGD assessment
changed to LGD2 from LGD3, and the LGD rate changed to
23% from 35%);
-- $400 million of 8.625% guaranteed senior unsecured notes
due April 2012 (consisting of $350 million and $50
million tranches), Ca (LGD4, with the LGD rate changed to
52% from 61%);
-- $456 million of 9% guaranteed senior subordinated notes
due May 2009, C (with the LGD assessment changed to LGD5
from LGD6, and the LGD rate changed to 89% from 92%);
-- ?100 million of 9% guaranteed senior subordinated notes
due May 2009, C (with the LGD assessment changed to LGD5
from LGD6, and the LGD rate changed to 89% from 92%);
* Dura Automotive Systems Capital Trust:
-- $55.25 million of 7.5% convertible trust preferred
securities due 2028, C (LGD6, 98%)
Dura Automotive's $175 million guaranteed senior secured first-
lien asset-based revolving credit is not rated by Moody's.
The last rating action was Sept. 20, 2006 when the ratings were
lowered.
Dura Automotive, headquartered in Rochester Hills, Michigan,
designs and manufactures components and systems primarily for the
global automotive industry including driver control systems,
structural door modules, glass systems, seating control systems,
exterior trim systems, and mobile products. Annual revenues
approximate $2.3 billion.
EVERGREEN INT'L: Extends 12% Senior Notes Offering to October 24
----------------------------------------------------------------
Evergreen International Aviation, Inc.'s pending offer to purchase
any and all of its outstanding 12% Senior Second Secured Notes Due
2010 (CUSIP No. 30024DAF7) previously scheduled to expire at 5:00
p.m., New York City time, on Oct. 16, 2006, has been extended
until 5:00 p.m., New York City time, on Oct. 24, 2006, unless
otherwise extended or earlier terminated. Except for the change,
all terms and conditions of the tender offer are unchanged and
remain in full force and effect.
Holders of approximately 97.94% of the outstanding principal
amount of the Notes have tendered and consented to the proposed
amendments to the indenture governing the Notes. Subject to the
satisfaction or waiver of the remaining conditions (including the
consummation of a new Senior Secured Credit Facility by Evergreen)
set forth in the Offer to Purchase and Consent Solicitation
Statement dated July 20, 2006, Evergreen currently intends to
accept the entire amount of Notes tendered pursuant to the tender
offer and consent solicitation.
Credit Suisse Securities (USA) LLC is serving as the exclusive
Dealer Manager and Solicitation Agent for the tender offer and
consent solicitation. Questions regarding the terms of the tender
offer or consent solicitation should be directed to Credit Suisse
Securities (USA) LLC, Attn: Liability Management Group at (212)
325-7596 or (800) 820-1653. The Tender Agent and Information
Agent is D.F. King & Co., Inc. Any questions or requests for
assistance or additional copies of documents may be directed to
the Information Agent, toll-free at (800) 290-6426 (bankers and
brokers call collect at (212) 269-5550).
Based in McMinnville, Oregon, Evergreen International Aviation,
Inc. -- http://www.evergreenaviation.com/-- is a privately held
global aviation services company that is active through several
subsidiary companies.
* * *
As reported in the Troubled Company Reporter on Aug. 11, 2006,
Standard & Poors' Ratings Services raised its rating on Evergreen
International Aviation Inc.'s first-lien bank loan rating to 'B+'
from 'B' and changed the recovery rating to '1' from '2'. The
rating action reflects a change in the structure of the proposed
credit facility.
EXTENDICARE HEALTH: Completes $500 Million Mortgage Loan Financing
------------------------------------------------------------------
Extendicare Inc.'s wholly owned U.S. subsidiary, Extendicare
Health Services Inc., completed an initial $500 million mortgage
loan financing and entered into a new $120 million senior secured
revolving credit facility.
The $500 million financing is a 5-year fixed rate loan at 6.6525%,
with interest only payments for the first three years, and a
25-year amortization for the last two years. It is currently
expected that another mortgage financing will follow in March
2007. The new $120 million revolving credit facility has a
three-year term with floating-rate interest based on a pricing
grid.
Proceeds will be used primarily to repay EHSI's $150 million
9-1/2% Senior Notes Due 2010 and its $125 million 6-7/8% Senior
Subordinated Notes Due 2014, of which 100% and 99.98%,
respectively, have been accepted for payment pursuant to EHSI's
Sept. 22, 2006 tender offers for the two classes of notes.
In addition, proceeds will be used:
* to repay the balance outstanding on EHSI's existing term loan
and line of credit,
* to unwind its existing interest rate swap and cap
arrangements,
* to pay for transaction costs related to the debt refinancing
and planned distribution of Assisted Living Concepts, Inc. to
shareholders of Extendicare Inc. and
* for general working capital purposes.
The mortgage loan is being originated by Lehman Brothers Bank, FSB
and Lehman Brothers is sole arranger of the revolving credit
facility.
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 Oct. 3, 2006,
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. Hospital and Long-term Care sectors, the
rating agency confirmed its Ba3 Corporate Family Rating for
Extendicare Health Services, Inc.
FELCOR LODGING: Moody's Rates $215 Mil. Sr. Debt Offering at Ba3
----------------------------------------------------------------
Moody's Investor's Service assigned a Ba3 senior unsecured rating
to the proposed $215 million senior unsecured debt offering of
FelCor Lodging Trust and affirmed the REIT's ratings. In
addition, Moody's assigned a Ba3 Corporate Family Rating to
FelCor. The rating outlook remains stable. According to the
REIT, the gross proceeds of $215 million will be used to
repurchase outstanding debt.
FelCor's business environment and performance continue to improve
with revenue per available room increasing 8.4% primarily as a
result of an 8.2% increase in the REIT's average daily rate.
In April 2006, Moody's upgraded FelCor's ratings (senior unsecured
to Ba3) as a result of the REITs improved operating results, as
well as plans to reduce leverage.
These ratings were affirmed, with stable outlooks:
* FelCor Lodging Limited Partnership
-- senior unsecured debt at Ba3;
-- senior unsecured debt shelf at (P)Ba3;
-- subordinated debt shelf at (P)B2.
* FelCor Lodging Trust Incorporated
-- preferred stock at B2;
-- preferred shelf at (P)B2.
FelCor Lodging Trust, Incorporated, headquartered in Irving,
Texas, USA, is one of the largest lodging REITs in the USA, with a
portfolio of 105 consolidated hotels located in 27 states and
Canada. FelCor owns 65 upper upscale, all-suite hotels, and is
the largest owner of Embassy Suites Hotels(R) and Doubletree Guest
Suites(R) hotels. FelCor's hotels are flagged under global brands
such as Embassy Suites Hotels, Doubletree(R), Hilton(R),
Sheraton(R), Westin(R), and Holiday Inn(R). Based on June 30,
2006 operating profit, 36% of FelCor Lodging's portfolio is
located in suburban locations, with the balance located in urban
(29%), airport (24%) and resort (11%) areas.
FLORIDA GAS: Moody's Rates $600 Million Junior Sub. Notes at Ba1
----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 credit rating to Southern
Union Company's $600 Million Series A Junior Subordinated Notes
Due 2066 with negative outlook. The rating is one notch below the
Baa3 senior unsecured debt rating of the company. The issue is
subordinated to all senior indebtedness and capital lease
obligations of the company and receives a Basket "B" treatment for
purposes of Moody's on balance sheet debt treatment.
Southern Union Company is a diversified energy company engaged
primarily in the business of gathering, processing,
transportation, storage, and distribution of natural gas in the
United States. It maintains its headquarters in Houston, Texas.
Issuer: Southern Union Company
Assignments:
-- $600 million Junior Subordinated Regular Bond/Debenture,
assigned Ba1
GARSON RESOURCES: Buys Britannia Mine from Kinross and Pegasus
--------------------------------------------------------------
Garson Resources Ltd. and Piper Capital Inc. have entered into a
definitive purchase agreement with Kinross Gold Corporation and
Pegasus Mines Ltd., as well as a letter of understanding with High
River Gold Mines Ltd. to acquire a 100% interest in the New
Britannia Mine and Mill located in Snow Lake, Manitoba.
The NBM assets include the New Britannia Mine, with associated
plant, infrastructure and some equipment including a fully
permitted 2,150 tonne per day modern mill and tailings facility. A
measured and indicated mineral resource of 364,000 ounces of gold
-- 2,211,000 tonnes at 5.11 grams per tonne -- for the mine and an
inferred mineral resource of 176,000 ounces of gold -- 1,094,000
tonnes at 5.01 grams per tonne) -- for the total property were
estimated by the geological staff of the New Britannia mine in
December 2004. The mineral resources were estimated using a gold
price of $400 per ounce, are fully diluted and are compliant with
the current Canadian Institute of Mining, Metallurgy and Petroleum
standards and definitions for mineral resources.
The property consists of about 7,500 hectares of mineral claims
and leases containing many known gold showings and a very high
potential for new discoveries. The #3 Zone and Birch Zone both
contain inferred mineral resources of 220,000 tonnes at 7.10 g/t
gold, and 569,000 tonnes at 4.42 g/t gold. respectively, and both
have had past production. Of these zones, the #3 Zone has the
potential for increasing resources and will be the focus of the
initial diamond drilling program which will commence immediately
upon closing of the transaction.
David Tafel, CEO of Piper and Ed Stringer, CEO of Garson state,
"We are very excited about the acquisition of the New Britannia
Mine property. This acquisition has the potential to move our two
companies from exploration to production companies very quickly
and at minimal cost."
In consideration of the acquisition, each of Piper and Garson will
issue shares to Kinross consisting of 19.9% of their issued share
capital at closing and grant Kinross the right to receive, at no
additional consideration, 19.9% of the common shares issued by
Piper and Garson upon the exercise or conversion of any
convertible security issued by Piper and Garson as part of any
equity financing that Piper and Garson undertake after the signing
of the definitive purchase agreement and prior to the closing of
the transaction. Piper and Garson will also have to post CDN$1.9
million in financial assurances with the Government of Manitoba
and CDN$3.9 million in the form of a letter of credit to Kinross
which will be refundable upon reaching commercial production from
the mine.
Upon closing, Kinross will have the right to appoint a
representative to the boards of both Piper, and Garson. Kinross
retains a back-in right should a NI 43-101 compliant resource of 3
million ounces be proven up. High River has agreed to sell its
50% interest in NBM and to waive its right of first refusal on the
Kinross interest in exchange for the cancellation of its non-
recourse project debt and the assumption of all liabilities and
obligations. The agreements are subject to, among other things,
receipt of regulatory approvals and completion of financing. It
is anticipated that closing will take place within 90 days.
It is contemplated that Piper and Garson will enter into a joint
venture agreement whereby Piper will retain a 60% interest and
Garson a 40% interest in the joint venture.
As consideration for offering Piper and Garson the opportunity to
participate in the Asset Purchase Agreements and to acquire the
New Britannia Assets, both Garson and Piper agree that on
execution of the Asset Purchase Agreement, Pegasus will be
entitled to a Participation Fee payable by way of the pro rata
issue of 1,800,000 shares issued at a value of $0.20 per share as
to 60% Piper (1,080,000 shares) and 40% Garson (720,000 shares).
Certain principals of Pegasus including, David Constable, Ed
Stringer, Ken Cawkell, and David Tafel are directors of Garson.
David Tafel is also a director, and president of Piper Capital.
About Piper Capital
Based in Vancouver, British Columbia, Piper Capital, Inc. (TSX
VENTURE:PCL) -- http://www.pipercapitalinc.com/-- is a mining
company focused on mineral and mine exploration.
About Garson Resources
Garson Resources Ltd., fka Tri-Energy, Inc. (CNQ:GARR) --
http://www.garsonresources.com/-- is a mining exploration company
holding a 100% interest in three Canadian exploration projects;
the McMillan gold mine property in Espanola, Ontario; the Copper
Prince nickel/copper-PGM property in Sudbury, Ontario; and the
Squall Lake, Manitoba gold project. The Company intends to
continue exploration on its current properties and to acquire
other mineral properties of merit.
* * *
In its quarterly financial statements for the three months ended
June 30, 2006, Garson Resources relates that it has not yet
achieved revenue-generating operations and has an accumulated
deficit of $286,023. Without additional sources of funding the
company may be unable to meet its obligations as they fall due and
complete the exploration and development of its mineral
properties. Management is actively pursuing additional financing
but there is no assurance that additional funding will be
available in the future.
GB HOLDINGS: Disclosure Hearing Scheduled on November 29
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey will
convene a hearing on Nov. 29, 2006, at 10:00 a.m., to consider the
adequacy of the Fifth Modified Disclosure Statement explaining the
Fifth Modified Chapter 11 Plan of Liquidation of the Official
Committee of Unsecured Creditors in GB Holdings Inc.'s bankruptcy
case.
As reported in the Troubled Company Reporter on Sept. 27, 2006,
the Committee's Plan hinges either on its successful attempt to
compel the payment of dividends due on Atlantic Coast
Entertainment Holdings, Inc., common stock owned by the Debtor or
the sale of these common stock holdings to the highest bidder at
an auction.
The Debtor has no operating activities and no income and its
principal tangible asset consist of 2,882,938 shares of common
stock, representing approximately 41.7% of the equity interests in
Atlantic. Atlantic owns and operates The Sands Hotel & Casino in
Atlantic City, New Jersey.
The Committee believes that general unsecured creditors will
recover 100% of their claims if it's lawsuit to compel payment of
the dividend is successful.
The Atlantic stock will be sold to the highest bidder if the
Committee's dividend payment suit fails. If the stock is sold
before the effective date of the plan, the net proceeds of the
sale will be used to fund a Liquidating Trust Reserve, in an
amount not to exceed $4 million, with the remaining amount to be
paid pro-rata to holders of Allowed "American Real Estate Holdings
Limited Partnership" AREH Claims and Allowed General Unsecured
Claims.
If the Atlantic stock is not sold before the effective date, the
stock will be transferred to the Liquidating Trust and the
Liquidating Trust will obtain an Exit Facility to administer the
Liquidating Trust Assets, which would include the sale of the
Atlantic stock and prosecution of causes of action.
In the event the dividend payment suit and the stock sale is
unsuccessful, the Liquidating Trust will have an Exit Facility in
the principal amount of up to $6,000,000 to fund the costs of
maintaining the Liquidating Trust and the Liquidating Trust
Assets, including the prosecution of the Causes of Action and any
marketing of the Atlantic stock.
Treatment of Claims
Pursuant to the Committee's liquidating plan, holders of Allowed
Administrative Claims, Priority Tax Claims, Other Priority Claims
and Secured Claims will be paid in full in cash or have their
secured interests reinstated.
The holder of an Allowed AREH Secured Claim will receive the
Restructured Note in full satisfaction, settlement and release of
the AREH Secured Claim. However, if the dividend payment suit is
successful or a sale of the Atlantic stock is consummated, the
holder of an Allowed AREH Secured Claim will be paid in full and
in cash.
Holders of Allowed General Unsecured Claims will receive pro rata
Cash Distributions from either the dividend claim or the stock
sale and will receive pro rata beneficial interests in the
Liquidating Trust.
Holders of Allowed Equity Interests will receive pro rata
distributions, if any, from the residual proceeds of the dividend
claim or the stock sale.
A blacklined copy of the Committee's Fifth Modified Disclosure
Statement is available for a fee at:
http://www.researcharchives.com/bin/download?id=061018043859
A blacklined copy of the Committee's Fifth Modified Chapter 11
Plan is available for a fee at:
http://www.researcharchives.com/bin/download?id=061018043701
About GB Holdings
Headquartered in Atlantic City, New Jersey, GB Holdings, Inc.,
primarily generates revenues from gaming operations in Atlantic
Coast Entertainment Holdings, which owns and operates The Sands
Hotel and Casino in Atlantic City, New Jersey. The Debtor also
provides rooms, entertainment, retail store and food and beverage
operations. These operations generate nominal revenues in
comparison to the casino operations. The Debtor filed for
chapter 11 protection on September 29, 2005 (Bankr. D. N.J. Case
No. 05-42736). Alan I. Moldoff, Esq., at Adelman Lavine Gold and
Levin, represents the Debtor. Charles A. Stanziale, Jr., Esq., at
McElroy, Deutsch, Mulvaney & Carpenter, serves as counsel to the
Official Committee Of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it estimated assets and debts
between $10 million to $50 million.
GENERAL ELECTRIC: Fitch Holds Low-B Ratings on Four Cert. Classes
-----------------------------------------------------------------
Fitch affirmed General Electric Capital Assurance Company, Inc.'s
commercial mortgage pass-through certificates, series 2003-1:
-- $106.1 million class A-2 at 'AAA'
-- $110 million class A-3 at 'AAA'
-- $270 million class A-4 at 'AAA'
-- $112.7 million class A-5 at 'AAA'
-- Interest-only class X at 'AAA'
-- $11.3 million class B at 'AA+'
-- $13.4 million class C at 'A+'
-- $11.3 million class D at 'BBB'
-- $10.3 million class E at 'BBB-'
-- $12.3 million class F at 'BB+'
-- $7.2 million class G at 'BB'
-- $2.1 million class H at 'BB-'
-- $2.1 million class J at 'B-'
Class A-1 has been repaid in full.
The rating affirmations reflect the stable pool performance and
moderate paydown since Fitch's last rating action. As of the
September 2006 distribution date, the pool has paid down 18.7%, to
$668.7 million from $822.6 million at issuance. In addition,
there are no delinquent or specially serviced loans.
This deal is comprised of low leverage loans with an average loan-
to-value significantly lower than that of a typical fusion deal.
The loans are well seasoned and 69.8% percent of the pool is made
up of fully amortizing loans.
The pool is geographically diverse with the highest concentration
in California (15.6%). Other concentrations include Maryland
(11.1%), North Carolina (10.2%), Florida (8.8%) and New York
(5.9%).
The highest property type concentration in the pool is in
Industrial/Warehouse properties (35%) with other concentrations
including retail (29.2%), office (23.2%), multifamily (12%) and
self storage (0.6%).
Seven loans in the pool (3%) have been identified as Fitch Loans
of Concern due to decreases in debt service coverage ratio,
occupancy, or other performance indicators. These loans' higher
likelihood of default was incorporated into Fitch's analysis.
GLOBAL HOME: Panel Hires Basham Ringe as Mexican Counsel
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware allowed the
Official Committee of Unsecured Creditors in Global Home Products
LLC and its debtor-affiliates' bankruptcy cases' to retain Basham,
Ringe y Correa, S.C., as its special Mexican counsel, nunc pro
tunc to Aug. 1, 2006.
The Committee wants Basham Ringe to perform services related to
the examination of prepetition liens and security interests
purportedly held by Wachovia Bank National Association and
Madeleine LLC. Wachovia and Madeleine allegedly hold those liens
in relation to the Debtors' foreign business entities and their
non-debtor subsidiaries located in Mexico.
As reported in the Troubled Company Reporter on Oct. 2, 2006,
Basham Ringe will:
a. assist the Committee in investigating the extent, validity,
priority, and perfection of alleged liens and security
interest of Wachovia and Madeleine allegedly secured by the
assets or equity of the Debtors and their non-debtor foreign
subsidiaries located in Mexico;
b. assist in the preparation of applications, motions,
complaints, answers, orders, agreements, and other legal
papers if necessary; and
c. perform other related legal services as may be required and
that are in the interest of the Committee and creditors
represented by the Committee.
The Firm's hourly rates are:
Designation Hourly Rate
----------- -----------
Partners $310 - $350
Off Counsel $350
Associates $170 - $250
Legal Assistants $67 - $110
Basham Ringe assured the Court that it does not hold nor represent
any interest adverse to the Debtors' estates.
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.
GOODYEAR TIRE: Labor Dispute Prompts S&P's Negative Watch
---------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' corporate
credit rating on Goodyear Tire & Rubber Co. on CreditWatch with
negative implications because of the potential for business
disruptions and earnings pressures that could result from the
ongoing labor dispute at some of its North American operations.
Goodyear has total debt (including the present value of operating
leases and underfunded employee benefit liabilities) of about $7
billion.
About 15,000 employees at 14 plants in the U.S. and Canada went on
strike on Oct. 5, 2006. The employees are represented by the
United Steel Workers.
Goodyear's contract with the USW expired on July 22, 2006,
although negotiations for a new contract continued until early
October. The company's main priorities for a new labor contract
are to lower legacy costs, reduce its high cost footprint, and
improve productivity, while the union is focused on
preserving job security protections and employee benefits.
Since the strike began, Goodyear has borrowed almost $1 billion
under a revolving credit facility to enhance liquidity should the
strike persist. The company had about $1.3 billion in cash before
the start of the strike. Goodyear's liquidity should be more than
adequate to allow the company to comfortably meet its cash
requirements for at least the next several months.
But the business and financial costs to the company will rise over
time. Goodyear currently is able to meet most customer
requirements through existing inventory, but as inventory is
depleted, the company would experience shortages that could damage
customer relationships.
"Ultimately, we expect the two parties to reach an agreement that
should help Goodyear to lower its burdensome cost position in
North America. The ratings could be lowered, however, if it
appears that the strike is likely to strain the company's credit
profile for the near to medium term," said Standard & Poor's
credit analyst Martin King.
HAZLETON GENERAL: Moody's Holds Ba2 Rating on $10.1MM Rev. Bonds
----------------------------------------------------------------
Moody's Investors Service affirmed the Hazleton General Hospital's
Ba2 long-term rating on its Series 1997 Revenue Bonds issued by
the Hazleton Health Services Authority with $10.1 million
outstanding.
The outlook remains negative.
At the same time, Moody's have downgraded the long-term rating
for Hazleton-St. Joseph Medical Center to Ba3 from Ba2 on
$13.8 million of Series 1996 bonds issued by the Hazleton Health
Services Authority.
The outlook remains negative.
Legal security:
HGH, with Hazleton-St. Joseph Medical Center, formed a joint
operating company, Greater Hazleton Health Alliance in 1996, which
consolidated management of the two hospitals and established an
income sharing arrangement, but left assets and liabilities
separate. HGH's and HSJ's debt obligations remain separately
secured by Gross Receipts (as defined in the bond documents). HGH
has granted a mortgage lien on substantially all of its property
and equipment for the Series 1997 bondholders. Both hospitals
have debt service reserve funds for the outstanding bonds.
Since the formation of GHHA, the credit positions of the two
organizations had increasingly converged and since 2000 both HSJ
and HGH carried comparable ratings. However, with HSJ's surrender
of the acute care medical license and the cessation of patient
services, Moody's believes the credit profiles for both
institutions have now diverged, resulting in the differentiation
in long-term ratings.
Interest Rate Derivatives: None
Strengths:
* Turnaround in System operating performance, with GHHA
producing an operating surplus of 7.1% in FY 2005 and
profitable, although at a lower level, for year-to-date FY
2006. The improvement is driven by improved performance at
HGH, as well as savings from the cessation of patient
services at HSJ following the surrender of its license.
* Improved liquidity for the System, with days cash on hand
rising to 93.7 days for FYE 2005, although declining to 83.8
days as of 8/31/06 due to self-funding of capital projects.
Liquidity will improve as GHHA reimburses itself for
$10 million with the issuance of debt later this year.
Challenges:
* Maintaining favorable operating performance for the System
in the face of rising expenses while working to build
volume, with eight months year-to-date FY 2006 operating
results down from the prior year but reflecting improved
performance during July and August.
* Highly competitive service area, with GHHA competing with
other large hospitals within the broader service area, as
well as physician and niche providers.
* Continued consolidation/operational challenges expected as
GHHA finalizes migration of services to HGH and uncertainty
regarding the future uses of HSJ's campus.
* Weak service area demographics, with expected decline in
population, an increase in the aging, and income levels
lower than the Commonwealth average.
* Moderately high leverage, with cash-to-proforma debt
(assuming $14 million of total new issuance by HGH) of 71%
and proforma debt to cashflow of 4 times when based on FY
2005 results, which are expected to somewhat weaken in 2006.
* Large unfunded pension plan liability, although HSJ is
frozen and HGH will be effective 12/31/06.
Recent Developments:
GHHA has reported a noteworthy improvement in operating
performance following the implementation of the turnaround
recommendations of Wellspring Partners LTD in 2003/2004.
Following a loss of $9.1 million in FY 2003 (a -11.7% operating
margin), GHHA's operating performance improved to a loss of
$3.7 million for 2004 (-4.3% margin), and then rose to a profit
of $6.7 million (7.1% operating margin) in 2005. The turnaround
was driven by the success in realigning services between HGH and
HSJ, gains in operating revenues from improved coding efforts,
increased Medicare reimbursement from a reclassification of labor
expenses, and increases in third-party reimbursement; also
contributing are managed expenses, including reduced staffing
levels. The improvement occurred at HGH, with its operating
surplus rising to $8.3 million in FY 2005 (11.4% margin) from
$247 thousand in FY 2004 (a 0.5% margin).
Through the Binding Alliance Agreement, HSJ recorded global budget
settlement revenues of $2.1 million and $6.3 million during 2004
and 2005, respectively, to enable HSJ to meet debt service
requirements. However, in 2006, operating performance has
dropped, with GHHA and HGH producing operating surplus of
$2.2 million (3.5% margin) and $1.5 million (2.5% margin),
respectively. The decline is attributable to increased bad debt,
as well as GHHA continuing to work through consolidation issues,
manage labor costs, and cope with lower-than-budgeted utilization,
attributed by management to construction work on the HGH campus.
Effective Sept. 16, 2005, HSJ ceased providing patient services
and surrendered its acute-care medical license. Previously,
GHHA closed HSJ's emergency department and transferred all
inpatient services to HGH. Since then, HSJ has leased its
facility to HGH to provide space for various HGH operations,
including outpatient services until the Health and Wellness
Center opens in Spring 2007. As a result, HSJ is no longer
producing patient revenues. For FY 2004 and 2005, HSJ produced
operating deficits of $4.2 million and $4.9 million, respectively,
before consideration of the global budget settlements that
increased operating revenues and enabled HSJ to meet covenant
calculations. For YTD 2006 eight month interim results, the loss
of $529 thousand is better than the $2.4 million loss for the
prior year.
The future of HSJ's campus is currently uncertain following the
final migration of the services from the campus to the Health and
Wellness Center, a joint venture of HGH with physicians from its
medical staff. GHHA is considering options for the campus,
including sale of the property or an alternative use of the
property for economic development purposes. As a result, we
expect HSJ to have no revenue production, relying solely on the
support of HGH to meet its obligations which, although
contractual, is not guaranteed. Until a plan can be devised for
the campus, we expect a negative impact on HGH as it funds HSJ's
operating deficits until its debt can be restructured.
Located in Hazleton in northeast Pennsylvania's, GHHA's primary
service area is a 35 mile area surrounding the city. Moody's
believes that the general demographics of the area are a credit
weakness, with the Hazleton area suffering a decline in population
which is projected to continue. The region also shows both a
population older than the State and national averages and with a
lower per capita income than the state average. Coupled with the
weak demographics is the high degree of competition within both
the primary and secondary service areas, including formidable
competition in Bethlehem, Pottsville and Wilkes-Barre.
HGH is attempting to prevent out-migration of patients to these
competitors through the capital investment in its facilities
(including expansion of the emergency department and operating
suite), the opening of the outpatient services center in the
Health and Wellness Center, recruiting of additional physicians,
and growth of existing service lines (e.g. bariatric surgeries).
Additionally, it appears that GHHA has repaired the relationship
between management and the medical staff, with management stating
the physician support critical to the turnaround efforts.
Nonetheless, we expect that competitive pressures will continue to
challenge GHHA and HGH to increase both inpatient and outpatient
utilization.
GHHA has shown some improvement in liquidity since 2003, with
unrestricted cash rising to $21.6 million or cash days of
93.7 days for FYE 2005 (12/31/2005), up from $17.7 million or 76.8
days in the prior year. The increase is noteworthy as GHHA used
operating cash flow to fund its capital projects. It is
anticipated that GHHA will reimburse itself for $10 million of
capital expenditures from debt issuance, improving its liquidity.
As of Aug. 31, 2006, GHHA's proforma liquidity assuming the
reimbursement of $10 million would be 124.1 days. For HSJ,
unrestricted cash slightly rose to $5.1 million for FY 2005 from
$4.7 million the prior year but remains weak.
Additionally, HSJ's cash dropped to $2.9 million at June 30, 2006
as GHHA retained cash deemed sufficient to meeting the site's
operating needs and to meet debt service obligations. However,
the decline in cash is troubling given the lack of revenue
generated by the facility and sizable debt service payments.
Nonetheless, with HGH's current use of HSJ's campus under an
informal rental agreement and the obligation under the Binding
Alliance Agreement, we believe that HSJ will have sufficient cash
to meet debt service obligations within the near-term.
It is expected that HGH will borrow up to $14 million of debt over
the next two years to reimburse itself for $10 million of capital
expenses and provide $4 million of additional funding to complete
the emergency department renovation and expansion. GHHA is
considering its options regarding the outstanding debt for HGH and
HSJ. Currently HSJ's rated debt is an obligation of only HSJ,
with the security being the revenues of the Hospital. GHHA will
decide how to proceed once the governance of HSJ is finalized,
with the Bernadine Sisters of the Third Order of Saint Francis
having the controlling interest in HSJ as an operating entity.
Until then, bondholders of the HSJ's rated bonds must look to GHHA
and its support for the debt service payments.
Outlook
The negative outlook reflects our expectations of continued
constrained operating performance while GHHA continues to work
through the closure of HSJ, migrate services to HGH, manage
expense growth and attempt to increase utilization at its
facilities, resulting in minimal growth in operating cash flow and
liquidity. Moody's believes the demographics and competition
within the service area pose long-term challenges to the
organization in maintaining market share and volume, as well as
the translation to operating revenues and surplus.
What could change the rating-up:
* Improved and consistently favorable operating performance
and good cash flow generation;
* proven ability to combat competitive pressures and build
volume; and
* growth of liquidity and related measures with no additional
debt issuance.
What could change the rating-down:
* Failure to maintain operating improvement, loss of
physicians or increase in competition within service area;
* deterioration in liquidity and related measures; and
* additional borrowing.
Key indicators
Assumptions & Adjustments:
* Based on financial statements for Greater Hazleton
Healthcare Alliance (including Hazleton General Hospital and
Hazleton St. Joseph's)
* First number reflects audit year Dec. 31, 2004
* Second number reflects audit year Dec. 31, 2005
* Proforma debt includes $14 million of debt issued, assuming
$10 million self-reimbursement
* Investment returns smoothed at 6% unless otherwise noted
Inpatient admissions:
-- 8,462; 7,787 (actual)
Total operating revenues:
-- $84.6 million; and,
-- $95.0 million
Moody's-adjusted net revenue available for debt service:
-- $3.5 million; and,
-- $13.6 million
Total debt outstanding:
-- $32.6 million; and,
-- $29.2 million
Proforma debt:
-- $44.7 million
Maximum annual debt service proforma:
-- $3.84 million
MADS Coverage with reported investment income:
-- 3.3 times
Moody's-adjusted MADS Coverage with normalized investment income
(2005 proforma):
-- 3.6 times
Debt-to-cash flow (2005 proforma):
-- 4.0 times
Days cash on hand:
-- 93.7 days (2005 actual); and,
-- 135.4 days (2005 proforma)
Cash-to-debt:
-- 74.0% (2005 actual); and,
-- 73.2% (2005 proforma)
Operating margin:
-- -4.3%; and,
-- 7.1%
Operating cash flow margin:
-- 2.9%; and,
-- 13.0%
HAZELTON-ST. JOSEPH: Moody's Cuts $13.8MM Rev. Bonds Rating to Ba3
------------------------------------------------------------------
Moody's Investors Service downgraded Hazelton-St. Joseph Medical
Center's long-term rating to Ba3 from Ba2 for the Series 1996
Revenue Bonds ($13.8 million outstanding) issued by the Hazleton
Health Services Authority. The outlook remains negative. The
downgrade reflects our concerns regarding the future status of
HSJ's ability to produce operating cash flow to meet its debt
service obligations as the campus moves to closure, coupled with
the Series 1996 debt that would remain outstanding until a debt
restructuring is accomplished under which HSJ's debt is refunded
or is guaranteed by Hazleton General Hospital or Greater Hazleton
Health Alliance.
At the same time, Moody's affirmed the Ba2 long-term rating for
Hazleton General Hospital on $10.1 million of Series 1997 bonds
issued by the Hazleton Health Services Authority.
The outlook remains negative.
Legal security:
HSJ, with HGH, formed a joint operating company, GHHA in 1996,
which consolidated management of the two hospitals and established
an income sharing arrangement, but left assets and liabilities
separate. HGH's and HSJ's debt obligations remain separately
secured by Gross Receipts (as defined in the bond documents). HGH
has granted a mortgage lien on substantially all of its property
and equipment for the Series 1997 bondholders. Both hospitals
have debt service reserve funds for the outstanding bonds.
Since the formation of GHHA, the credit positions of the two
organizations had increasingly converged and since 2000 both HSJ
and HGH carried comparable ratings. However, with HSJ's surrender
of the acute care medical license and the cessation of patient
services, we believe the credit profiles for both institutions
have now diverged, resulting in the differentiation in long-term
ratings.
Interest rate derivatives: None
Strengths
* Turnaround in System operating performance, with GHHA
producing an operating surplus of 7.1% in FY 2005 and
profitable, although at a lower level, for year-to-date FY
2006. The improvement is driven by improved performance at
HGH, as well as savings from the cessation of patient
services at HSJ following the surrender of its license.
* Improved liquidity for the System, with days cash on hand
rising to 93.7 days for FYE 2005, although declining to 83.8
days as of 8/31/06 due to self-funding of capital projects.
Liquidity will improve as GHHA reimburses itself for $10
million with the issuance of debt later this year.
Challenges
* Maintaining favorable operating performance for the System
in the face of rising expenses while working to build
volume, with eight months year-to-date FY 2006 operating
results down from the prior year but reflecting improved
performance during July and August.
* Highly competitive service area, with GHHA competing with
other large hospitals within the broader service area, as
well as physician and niche providers.
* Continued consolidation/operational challenges expected as
GHHA finalizes migration of services to HGH and uncertainty
regarding the future uses of HSJ's campus.
* Weak service area demographics, with expected decline in
population, an increase in the aging, and income levels
lower than the Commonwealth average.
* Moderately high leverage, with cash-to-proforma debt
(assuming the $14 million of new issuance by HGH) of 88% and
proforma debt to cashflow of 2.4 times when based on FY 2005
results, which are expected to somewhat weaken in 2006.
* Large unfunded pension plan liability, although HSJ is
frozen and HGH will be effective 12/31/06.
Recent developments.
GHHA has reported a noteworthy improvement in operating
performance following the implementation of the turnaround
recommendations of Wellspring Partners LTD in 2003/2004. Following
a loss (as calculated by Moody's) of $9.1 million in FY 2003 (a -
11.7% operating margin), GHHA's operating performance improved to
a loss of $3.7 million for 2004 (-4.3% margin), and then rose to a
profit of $6.7 million (7.1% operating margin) in 2005. The
turnaround was driven by the success in realigning services
between HGH and HSJ, gains in operating revenues from improved
coding efforts, increased Medicare reimbursement from a
reclassification of labor expenses, and increases in third-party
reimbursement; also contributing are managed expenses, including
reduced staffing levels.
The improvement occurred at HGH, with its operating surplus (as
calculated by Moody's) rising to $8.3 million in FY 2005 (11.4%
margin) from $247 thousand in FY 2004 (a 0.5% margin). Through
the Binding Alliance Agreement, HSJ recorded global budget
settlement revenues of $2.1 million and $6.3 million during 2004
and 2005, respectively, to enable HSJ to meet debt service
requirements. However, in 2006, operating performance has
dropped, with GHHA and HGH producing operating surplus of $2.2
million (3.5% margin) and $1.5 million (2.5% margin),
respectively.
The decline is attributable to increased bad debt, as well as GHHA
continuing to work through consolidation issues, manage labor
costs, and cope with lower-than-budgeted utilization, attributed
by management to construction work on the HGH campus.
Effective September 16, 2005, HSJ ceased providing patient
services and surrendered its acute-care medical license.
Previously, GHHA closed HSJ's emergency department and transferred
all inpatient services to HGH. Since then, HSJ has leased its
facility to HGH to provide space for various HGH operations,
including outpatient services until the Health and Wellness Center
opens in Spring 2007. As a result, HSJ is no longer producing
patient revenues. For FY 2004 and 2005, HSJ produced operating
deficits of $4.2 million and $4.9 million, respectively, before
consideration of the global budget settlements that increased
operating revenues and enabled HSJ to meet covenant calculations.
For YTD 2006 eight month interim results, the loss of $529
thousand is better than the $2.4 million loss for the prior year.
The future of HSJ's campus is currently uncertain following the
final migration of the services from the campus to the Health and
Wellness Center, a joint venture of HGH with physicians from its
medical staff. GHHA is considering options for the campus,
including sale of the property or an alternative use of the
property for economic development purposes. As a result, we
expect HSJ to have no revenue production, relying solely on the
support of HGH to meet its obligations which, although
contractual, is not guaranteed. Until a plan can be devised for
the campus, we expect a negative impact on HGH as it funds HSJ's
operating deficits until its debt can be restructured.
Located in Hazleton in northeast Pennsylvania's, GHHA's primary
service area is a 35 mile area surrounding the city. We believe
that the general demographics of the area are a credit weakness,
with the Hazleton area suffering a decline in population which is
projected to continue. The region also shows both a population
older than the State and national averages and with a lower per
capita income than the state average. Coupled with the weak
demographics is the high degree of competition within both the
primary and secondary service areas, including formidable
competition in Bethlehem, Pottsville and Wilkes-Barre.
HGH is attempting to prevent out-migration of patients to these
competitors through the capital investment in its facilities
(including expansion of the emergency department and operating
suite), the opening of the outpatient services center in the
Health and Wellness Center, recruiting of additional physicians,
and growth of existing service lines (e.g. bariatric surgeries).
Additionally, it appears that GHHA has repaired the relationship
between management and the medical staff, with management stating
the physician support critical to the turnaround efforts.
Nonetheless, we expect that competitive pressures will continue to
challenge GHHA and HGH to increase both inpatient and outpatient
utilization.
GHHA has shown some improvement in liquidity since 2003, with
unrestricted cash rising to $21.6 million or cash days of
93.7 days for FYE 2005 (12/31/2005), up from $17.7 million or 76.8
days in the prior year. The increase is noteworthy as GHHA used
operating cash flow to fund its capital projects. It is
anticipated that GHHA will reimburse itself for $10 million of
capital expenditures from debt issuance, improving its liquidity.
As of August 31, 2006, GHHA's proforma liquidity assuming the
reimbursement of $10 million would be 124.1 days. For HSJ,
unrestricted cash slightly rose to $5.1 million for FY 2005 from
$4.7 million the prior year but remains weak.
Additionally, HSJ's cash dropped to $2.9 million at June 30, 2006
as GHHA retained cash deemed sufficient to meeting the site's
operating needs and to meet debt service obligations. However,
the decline in cash is troubling given the lack of revenue
generated by the facility and sizable debt service payments.
Nonetheless, with HGH's current use of HSJ's campus under an
informal rental agreement and the obligation under the Binding
Alliance Agreement, we believe that HSJ will have sufficient cash
to meet debt service obligations within the near-term.
It is expected that HGH will borrow up to $14 million of debt over
the next two years to reimburse itself for $10 million of capital
expenses and provide $4 million of additional funding to complete
the emergency department renovation and expansion. GHHA is
considering its options regarding the outstanding debt for HGH and
HSJ. Currently HSJ's rated debt is an obligation of only HSJ, with
the security being the revenues of the Hospital. GHHA will decide
how to proceed once the governance of HSJ is finalized, with the
Bernadine Sisters of the Third Order of Saint Francis having the
controlling interest in HSJ as an operating entity. Until then,
bondholders of the HSJ's rated bonds must look to GHHA and its
support for the debt service payments.
Outlook
The negative outlook reflects our expectations of continued
constrained operating performance while GHHA continues to work
through the closure of HSJ, migrate services to HGH, manage
expense growth and attempt to increase utilization at its
facilities, resulting in minimal growth in operating cash flow and
liquidity. We believe the demographics and competition within the
service area pose long-term challenges to the organization in
maintaining market share and volume, as well as the translation to
operating revenues and surplus.
What could change the rating-up
-- Improved and consistently favorable operating performance
and good cash flow generation;
-- proven ability to combat competitive pressures and build
volume; and,
-- growth of liquidity and related measures with no
additional debt issuance.
What could change the rating-down
-- Failure to maintain operating improvement, loss of
physicians or increase in competition within service area;
-- deterioration in liquidity and related measures; and,
-- additional borrowing.
Key indicators.
Assumptions & Adjustments:
-- Based on financial statements for Greater Hazleton
Healthcare Alliance (including Hazleton General Hospital
and Hazleton St. Joseph's)
-- First number reflects audit year December 31, 2004
-- Second number reflects audit year December 31, 2005
-- Proforma debt includes $14 million of debt issued, assuming
$10 million self-reimbursement
-- Investment returns smoothed at 6% unless otherwise noted
Inpatient admissions:
-- 8,462; 7,787 (actual)
Total operating revenues:
-- $84.6 million; and,
-- $95.0 million
Moody's-adjusted net revenue available for debt service:
-- $3.5 million; and,
-- $13.6 million
Total debt outstanding:
-- $32.6 million; and,
-- $29.2 million
Proforma debt:
-- $40.3 million
Maximum annual debt service proforma:
-- $3.84 million
MADS Coverage with reported investment income (2005 proforma):
-- 3.3 times
Moody's-adjusted MADS Coverage with normalized investment income
(2005 proforma):
-- 3.6 times
Debt-to-cash flow (2005 proforma):
-- 4.0 times
Days cash on hand:
-- 93.7 days (2005 actual); and,
-- 135.4 days (2005 proforma)
Cash-to-debt:
-- 74.0% (2005 actual); and,
-- 73.2% (2005 proforma)
Operating margin:
-- 4.3%; and,
-- 7.1%
Operating cash flow margin:
-- 2.9%; and,
-- 13.0%
HEXION SPECIALTY: Subsidiaries to Offer $825 Million Secured Notes
------------------------------------------------------------------
Hexion Specialty Chemicals, Inc.'s wholly owned finance
subsidiaries, Hexion 2 U.S. Finance Corp. and Hexion 2 Nova Scotia
Finance ULC, intend to offer through a private placement an
aggregate of $825 million of Second-Priority Senior Secured
Floating Rate Notes Due 2014 and Second-Priority Senior Secured
Notes Due 2014.
The senior secured Notes will be guaranteed by the Company and
certain of its domestic subsidiaries and will be senior
obligations secured by a second-priority lien on certain of the
Company and its subsidiaries' existing and future assets. The
floating rate notes and the fixed rate notes will each have eight-
year maturities with interest payable in cash. The Senior Secured
Notes will be offered within the United States only to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act of 1933, and, outside the United States, only to non-U.S.
investors in reliance on Regulation S.
The Company disclosed that the Senior Secured Notes will not be
and have not been registered under the Securities Act of 1933, as
amended, or any state securities laws, and unless so registered,
may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
Based in Columbus, Ohio, Hexion Specialty Chemicals Inc.
-- http://hexionchem.com/-- makes thermosetting resins (or
thermosets). Thermosets add a desired quality (heat resistance,
gloss, adhesion) to a number of different paints and adhesives.
Hexion also makes formaldehyde and other forest product resins,
epoxy resins, and raw materials for coatings and inks. The
Company has 86 manufacturing and distribution facilities in 18
countries.
* * *
As reported in the Troubled Company Reporter on May 4, 2006,
Standard & Poor's Ratings Services assigned its 'B+' rating and
its recovery rating of '3' to Hexion Specialty's $1.675 billion
senior secured term loan and synthetic letter of credit
facilities.
The rating on the existing $225 million revolving credit facility
was lowered to 'B+' with a recovery rating of '3', from 'BB-' with
a recovery rating of '1', to reflect the similar security package
as the new term loan and synthetic letter of credit facility.
The ratings on the existing senior second secured notes were
raised to 'B', with a recovery rating of '3', from 'B-' with a
recovery rating of '5'. The ratings on the senior second secured
notes reflect the amount of priority claims of the revolving
facility and the first-lien term loan lenders.
At the same time, Standard & Poor's affirmed its 'B+' corporate
credit rating on Hexion and revised the outlook to stable from
negative.
HEXION SPECIALTY: Moody's Assigns B3 Ratings to New Senior Notes
----------------------------------------------------------------
Moody's Investors Service assigned B3 ratings to the new
guaranteed senior secured second lien notes due 2014 of Hexion
Specialty Chemicals Inc. The company expects to issue roughly
$825 million of notes split (55/45) between fixed and floating
rate notes. The new notes will be used to refinance roughly
$625 million of existing second lien notes and partially fund a
$500 million dividend to existing shareholders. A $375 million
increase in the company's existing guaranteed senior secured first
lien term loan to $2 billion, rated Ba3, will fund the remainder
of the extraordinary dividend.
Moody's also affirmed Hexion's other long term debt ratings and
its SGL-2 speculative grade liquidity rating. As a result of this
refinancing, the LGD assessment rates have changed as shown in the
table below. The outlook is stable and the ratings on the
existing second lien notes will be withdrawn upon successful
completion of the refinancing.
New ratings assigned:
* Hexion Specialty Chemicals Inc.
-- Floating Rate Gtd. Second Lien Sr. Sec Notes
due 2014 -- B3, LGD5, 75%
-- Fixed Rate Gtd Second Lien Sr Sec Notes
due 2014, -- B3, LGD5, 75%
Ratings affirmed with revised LGD rates:
-- $225mm Gtd Sr Sec Revolving Credit Facility
due 5/2011 -- Ba3, LGD2, 24% from 29%
-- $50mm Gtd Sr Sec Letter of Credit Facility
due 5/2011 -- Ba3, LGD2, 24% from 29%
-- $1,625mm Gtd Sr Sec Term Loan
due 5/2013 -- Ba3, LGD2, 24% from 29%*
-- $300mm Flt Rate Gtd Second Lien Sr Sec Notes
due 7/2010 -- B3, LGD5, 75% from 77%**
-- $325mm 9.0% Gtd Second Lien Sr Sec Notes
due 7/2014 -- B3, LGD5, 75% from 77%**
-- $34.0mm Pollution Control Revenue Bonds Series 1992
due 12/2009 -- B3, LGD5, 75% from 77%
Ratings affirmed:
* Hexion Specialty Chemicals Inc.
-- Corporate Family Rating -- B2
-- Probability of Default Rating -- B2
-- $114.8mm 9.2% Sr. Unsec Debentures due 3/2021 -- Caa1,
LGD6, 94%
-- $246.8mm 7.875% Sr. Unsec Notes due 2/2023 -- Caa1, LGD6,
94%
-- $78.0mm 8.375% S.F. Sr. Unsec Debentures
due 4/2016 -- Caa1, LGD6, 94%
*: Facility size will increase to $2 billion upon successful
completion of the refinancing
**: Ratings will be withdrawn is the tender offer is successfully
completed; if any stub bonds remain, the rating could be lowered
by more than one notch
The B3 ratings on Hexion's second lien notes reflect elevated
leverage on a historical EBITDA basis, the expectation that cash
flows will be reduced by pension contributions and ongoing
restructuring costs, integration risk due to the pace of
additional tuck-in acquisitions, and concern over financial
metrics in the trough of the cycle. Moody's notes that if the
company were to significantly increase the size of the secured
first lien term loan, as permitted under the indenture for the
secured second lien notes, this could cause a downgrade of the
ratings on the second lien notes.
Hexion has significant pension liabilities and modest litigation
exposure, which is unusual for a highly leveraged company. The
ratings benefit from the company's size, product diversity, global
operations and the anticipation of significant additional
synergies (management expects to generate additional synergies of
more than $100 million from the original merger and subsequent
acquisitions). The company's metrics would map to the cusp of the
"Ba" and "B" rating category using Moody's Chemical Industry
ratings methodology, versus the B2 corporate family ratings.
However, given the limited historical data, the pro forma averages
may not adequately reflect the company's through-the-cycle
performance.
The stable outlook reflects the continuing solid operating
environment for thermoset resins that has resulted in substantial
earnings growth over the past year and the expectation that
trailing debt to EBITDA (excluding one-time extraordinary items)
will remain elevated at over 5x and free cash flow to debt
(excluding restructuring costs) will remain below 5% over the next
two years. Moody's believes that 2006 EBITDA will be in excess of
$525 million excluding pro forma adjustments for ongoing
acquisitions and planned synergies.
Hexion Specialty Chemicals, Inc., headquartered in Columbus, Ohio
is a leading producer of commodities such as formaldehyde,
bisphenol A and epichlorhydrin, as well as formaldehyde-based
thermoset resins, epoxy resins, and versatic acid and its
derivatives. The company is also a supplier of specialty resins
for inks and specialty coatings sold to a very diverse customer
base. Hexion was formed from the merger of Borden Chemicals Inc.,
Resolution Performance Products LLC, Resolution Specialty Material
LLC and the Bakelite Group. The company reported sales of $4.8
billion on a LTM basis ending June 30, 2006.
HIT ENTERTAINMENT: Moody's Affirms B1 Corporate Family Rating
-------------------------------------------------------------
Moody's affirmed all HIT Entertainment's ratings and stable
outlook, following the company's request for credit agreement
amendments, which allows the company more flexibility under its
covenants. The proposed amendments adjust for HIT's lower EBITDA
growth compared to original projections and higher investments
going forward, as the company takes a greater share of toy
manufacturing in house.
HIT's corporate family rating continues to reflect its high
leverage, sizable annual programming expenses and competitive
operating environment, offset by attractive assets with strong
brand value and good growth opportunities. While in Moody's view,
HIT's increased capital investment ("ToyCo" investment) should
enhance the company's value over the long term, in the short to
medium term it increases risk to HIT's lenders.
The company presents relatively high financial risk, as its
leverage remained elevated at 5.7 times debt-to-EBITDA in 2006.
While HIT had modest positive free cash flow in the last year,
Moody's expects negative free cash flow in 2007 given the current
plans for investments in the new ToyCo.
These are the rating actions:
Affirmed:
-- Corporate Family Rating, B1
-- Probability of Default Rating, B1
-- Senior Secured First Lien Bank Credit Facility, Ba3, LGD3,
34%
-- Senior Secured Second Lien Loan, B3, LGD5, 87%
The rating outlook is stable.
HIT Entertainment, with offices in London, Dallas and New York, is
a leading pre-school entertainment company with a portfolio of
properties including Bob the Builder, Thomas the Tank Engine, and
Barney the Dinosaur. HIT's annual revenues are approximately $260
million. The company has operations in the UK, US, Canada, Japan
and Germany. Business segments include home entertainment,
consumer products, television and live events as well as a US
digital pre-school channel.
IMPERIAL PETROLEUM: Briscoe Burke Resigns as Auditor
----------------------------------------------------
Briscoe Burke & Grigsby LLP has resigned as Imperial Petroleum,
Inc.'s auditor effective as of Sept. 19, 2006, "due to the
difficulty and expense in obtaining acceptable liability
insurance".
The Company relates that Briscoe Burke & Grigsby audited its
financial records for the year ended July 31, 2005 and issued an
unqualified opinion in connection with the audit. During each of
the Company's prior two fiscal years ending July 31, 2005 and
July 31, 2004 and the subsequent interim period preceding the
resignation of Briscoe Burke & Grigsby, there were no
disagreements on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of the
former accountant, would have caused it to make reference to the
subject matter of the disagreements in connection with its report,
as required by Item 304(a)(1)(iv) of Regulation S-K of the
Securities Act of 1933, as amended.
The Company said that Briscoe Burke & Grigsby LLP notified the
Audit Committee in connection with its audit as of July 31, 2005,
that a material weakness existed in the Company's internal
controls such that in its belief "the accounting personnel of the
Company do not possess the necessary skills to achieve accurate
financial reporting in accordance with U.S. generally accepted
accounting principals nor the requirements of the Securities &
Exchange Act of 1934, as amended, Rules 13a-14 and 15d-14."
Furthermore, Briscoe Burke & Grigsby advised the Audit Committee
that a reportable condition was also noted in the Company's
internal controls in regards to segregation of duties and that the
Company should take steps to segregate duties in the accounting
function to assist in alleviating the control deficiencies. The
Company's management accepted the comments and recommendations of
Briscoe Burke & Grigsby without dispute and the Audit Committee
has subsequently authorized the Company to seek and retain third
party bookkeeping services with respect to its accounting
functions. The Company has retained those services in connection
with its current audit.
By approval of the Company's Board of Directors, Weaver & Martin
LLC was retained on Sept. 20, 2006 to replace Briscoe Burke &
Grigsby as certified public accountants and to complete audits of
the financial accounts and records for the fiscal year ending
July 31, 2006.
About Imperial Petroleum
Headquartered in Evansville, Indiana, Imperial Petroleum, Inc.,
(OTCBB:IPTM) is an oil and natural gas exploration and production
company.
* * *
The Company's balance sheet at April 30, 2006 showed total assets
of $17 million and total liabilities of $21 million resulting to a
total stockholders' deficit of $4 million. Total stockholders'
deficit at July 31, 2005 stood at $2 million.
IMPLANT SCIENCES: UHY LLP Expresses Going Concern Doubt
-------------------------------------------------------
UHY LLP expressed substantial doubt about Implant Sciences
Corporation's ability to continue as a going concern after it
audited the Company's financial statements for the fiscal year
ended June 30, 2006. The auditing firm pointed to the Company's
recurring losses from operations.
The Company reported a $7 million net loss on $26.3 million of net
revenues for the fiscal year ended June 30, 2006, compared to a
$7.4 million net loss on $12.2 million of net revenues from the
previous year.
A full-text copy of the Company's Annual Report is available for
free at http://researcharchives.com/t/s?139d
Credit Facility
On Sept. 7, 2006, the Company extended the expiration date of its
revolving credit facility for $1.5 million with Silicon Valley
based Bridge Bank, N.A. The revolving credit facility expiring
Dec. 31, 2007, provides for advances of up to 80% of the Company's
eligible accounts receivable, bears interest at the prime rate
plus 1/2%, and is collateralized by certain assets of the Company.
The credit facility is also subject to various financial
covenants. As of June 30, 2006, $1 million has been drawn on this
credit facility and the Company is in compliance with the
covenants.
Litigation
On March 8, 2006, the Company commenced an arbitration under the
Rules of the American Arbitration Association against Respondents
Majid Ghafghaichi and Vahe Sarkissisian, seeking a total of
$3,994,000 for indemnification of various "Losses," as defined in,
and expressly allowed pursuant to, a Stock Purchase Agreement
dated March 9, 2005, between the Company, as the purchaser,
Accurel Systems International Corporation, and Majid and Vahe, as
the sellers of 100% of the issued and outstanding shares of
Accurel stock.
More specifically, there are four claims asserted by the Company
against Respondents:
(1) Damages of $3.4 million resulting from misrepresentations
concerning the loss of business from a key Accurel
customer;
(2) unauthorized withdrawals in the amount of approximately
$276,000 from Accurel by the Respondents prior to the
closing;
(3) approximately $49,000 of disallowed transaction expenses
that the Respondents improperly received; and
(4) undisclosed net liabilities totaling approximately
$269,000.
Respondents have asserted counterclaims seeking "an aggregate
amount in excess of $1,750,000," based on the allegedly "late
payment" to Respondents of Company stock and a Secured Promissory
Note as part of the consideration for their sale of Accurel stock.
The Company has filed a detailed denial of all counterclaims.
The arbitration is now in the discovery phase, and the hearings
are scheduled for February 2007.
On March 23, 2005, the Company entered into a Development,
Distribution and Manufacturing Agreement with Rapiscan Systems,
Inc. Under the terms of this agreement, the Company gave Rapiscan
the exclusive worldwide rights to market our Quantum Sniffer(TM)
portable and benchtop trace detection devices under their private
label. The Company also agreed to give Rapiscan the exclusive
worldwide rights to distribute certain other new security products
which we may develop in the future with their funding, as well as
rights, in some circumstances, to manufacture certain components
of the Quantum Sniffer(TM) portable and benchtop trace detection
devices.
On March 24, 2006, the Company brought suit in the United States
District Court in the District of Massachusetts against Rapiscan
and its parent, OSI Systems, Inc. The Company is requesting
rescission of the Agreement, for lack of performance and other
grounds. In the alternative, the Company is seeking termination
of the Agreement due to material breaches of contract and implied
covenant of good faith and fair dealing and for damages due to
Rapiscan's breach of contract and the implied covenant of good
faith and fair dealing.
On March 27, 2006, the Company received notice that Rapiscan filed
a complaint against the Company and its contract manufacturer,
Columbia Tech Manufacturing Services, in the United States
District Court for the Central District of California, regarding
the Agreement. Rapiscan's complaint against the Company is based
upon claims of breach of contract and breach of warranty and is
requesting a decree for specific performance, declaratory relief
and injunctive relief. Rapiscan's complaint against Columbia Tech
is based upon injunctive relief, declaratory relief and tortuous
interference with contractual relations. On April 12, 2006,
Rapiscan dismissed all claims against Columbia Tech.
As of Aug. 18, 2006, as a result of motions made by both parties,
the two lawsuits have been consolidated in the United States
District Court for the Central District of California with the
Company as plaintiff. Presently, discovery is in process.
Rapiscan and OSI have filed a motion to dismiss certain of the
Company's claims. The Company has not yet responded to the
motion. The Court is expected to hear and rule on the motion in
October 2006.
Based in Wakefield, Massachusetts, Implant Sciences Corporation --
http://www.implantsciences.com/-- develops, manufactures, and
markets products for the medical device and explosives detection
industry. Its core technology involves ion implantation and thin
film coatings of radioactive and nonradioactive materials. The
company manufactures and sells I-Plant Iodine-125 radioactive seed
for the treatment of prostate cancer, and Ytterbium-192 for breast
cancer therapy. It also provides surface engineering technology
to manufacturers of orthopedic hip and knee total joint
replacements. The company has a strategic alliance with Rapiscan
Systems, Inc. for the manufacture and sale of explosives detection
equipment on a private label basis.
INT'L GALLERIES: Ct. OKs John Haffey as Ch. 7 Trustee's Consultant
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized Dan Lain, the Chapter 7 Trustee overseeing the
liquidation of International Galleries Inc., to employ John Haffey
as his consultant.
Mr. Haffey is expected to:
a) locate prospective buyers for the 30,000 Giclee
reproductions of original paintings, all printed on canvas
(Artwork);
b) solicit offers to purchase the Artwork;
c) consult with and advise the Trustee regarding offers to
purchase the Artwork; and
d) perform other consulting services as the Trustee deems
necessary.
The Trustee discloses that he proposes to pay Mr. Haffey a $2,500
fixed fee for his consulting services. Mr. Haffey will also be
entitled to a 5% commission on the gross sale proceeds.
The Trustee assures the Court that Mr. Haffey does not hold or
represent an interest adverse to the estate, and that Mr. Haffey
is a "disinterested person" as that term is defined in Section
101(14) of the U.S. Bankruptcy Code.
Headquartered in Addison, Texas, International Galleries Inc. --
http://www.igi-art.com/-- sponsors artists and sells their
artwork through referrals. The company filed for chapter 11
protection on Jan. 31, 2006 (Bankr. N.D. Tex. Case No. 06-30306).
Omar J. Alaniz, Esq., at Neligan Foley LLP represented the Debtor
in its restructuring efforts. David W. Elmquist, Esq., at
Winstead Sechrest & Minick P.C., served as counsel to the Official
Committee of Unsecured Creditors. On May 16, 2006, the case was
converted to a Chapter 7 liquidation. Dan Lain serves as the
Chapter 7 Trustee for the Debtor and is represented by
Jeffery D. Carruth, Esq., at Winstead, Sechrest & Minick. When
the Debtor filed for protection from its creditors, it estimated
assets less than $50,000 and debts between $10 million to $50
million.
INTEGRATED SECURITY: Weaver and Tidwell Raises Going Concern Doubt
------------------------------------------------------------------
Weaver and Tidwell, LLP, expressed substantial doubt about
Integrated Security Systems, Inc.'s ability to continue as a going
concern after auditing the company's financial statements for the
fiscal years ended June 30, 2006 and 2005. The auditing firm
pointed to the Company's significant losses from operations.
In fiscal 2006, Integrated Security incurred a $4.2 million net
loss, compared to a $4.9 million loss reported in the prior year.
The company's sales for the current fiscal year decreased by
approximately 8.9% or $1.2 million to $12.3 million in fiscal year
2006 from $13.5 million in fiscal 2005.
The company operates through three wholly owned subsidiaries, B&B
ARMR Corporation, DoorTek Corporation and Intelli-Site, Inc., and
a joint venture entity, B&B Roadway, LLC. Sales at B&B ARMR
decreased approximately $5.8 million due to a reduction in product
manufacturing resulting from the closure of B&B ARMR's Norwood,
Louisiana manufacturing facility, coupled with productivity
reductions associated with the restructuring of the operations at
B&B ARMR. This decrease was offset by the inclusion of an
increase in sales at B&B Roadway of approximately $4.3 million,
Intelli-Site of approximately $100,000 and DoorTek of
approximately $200,000.
At June 30, 2006, the company's balance sheet showed $10 million
in total assets, $16.9 million in total liabilities and minority
interest of $105,297, resulting in a $6.9 million stockholders'
deficit.
A full-text copy of the company's annual report is available for
free at http://researcharchives.com/t/s?1395
Promissory Notes Issue
On Oct. 6, 2006, Integrated Security issued two unsecured
convertible promissory notes to Frost National Bank FBO
Renaissance US Growth Investment Trust PLC and Frost National Bank
FBO US Special Opportunities Trust PLC in exchange for an
aggregate $750,000 cash investment.
Each of the convertible notes is in the original principal amount
of $375,000, mature on October 10, 2009 and bear interest at an
annual rate of 6%. Interest to be accrued during the first year
the notes are outstanding was paid in cash on the date of issuance
of the notes, and interest accruing after the first year will be
payable in cash in quarterly installments. The notes are
convertible at the option of the holder into shares of common
stock of Integrated Security at the then-current market price,
subject to standard anti-dilution adjustments, upon:
* the conversion of all or substantially all of Integrated
Security's outstanding convertible indebtedness into
shares of capital stock of Integrated Security; or
* a change of control of Integrated Security.
Simultaneously with the execution of the notes, Integrated
Security and its subsidiaries entered into an Amended Royalty
Agreement with Renn III, RUSGIT and USSO, replacing the prior
Royalty Agreement with Renn III, RUSGIT and USSO entered into on
June 16, 2006. Under the terms of the Royalty Agreement,
Integrated Security and its subsidiaries are to pay the lenders a
fixed percentage of sales made from narrowly defined new projects
of Integrated Security and its subsidiaries. The total royalty
payments cannot exceed $100,000 in any year, or $25,000 in any
calendar quarter.
Headquartered in Irving, Texas, Integrated Security Systems, Inc.
-- http://www.integratedsecurity.com/-- is a technology company
that provides products and services for homeland security needs.
ISSI also designs, develops and markets safety equipment and
security software to the commercial, industrial and governmental
marketplaces. Integrated Security's Intelli-Site(R) provides
users with a software solution that integrates existing subsystems
from multiple vendors without incurring the additional costs
associated with upgrades or replacement.
INTERMOST CORP: Randall Gruber Raises Going Concern Doubt
---------------------------------------------------------
E. Randall Gruber, CPA, PC, expressed substantial doubt about
Intermost Corporation's ability to continue as a going concern
after it audited the Company's financial statements for the fiscal
year ended June 30, 2006. The auditing firm pointed to the
Company's recurring losses and negative cash flows from operations
and has accumulated deficit.
The Company reported a $2.1 million net loss on $12.3 million of
net revenues for the fiscal year ended June 30, 2006, compared to
$541,823 of net income on $16.8 million of net revenues from the
previous year.
The decrease in net revenues was primarily attributable to the
restructuring of the company to focus on the core business of
equity exchange and related trades while the net loss was
primarily attributable to the disposal of an associate company,
Shanghai Fortune Venture Limited, which had failed to perform the
mission the local partner originally promised.
Mr. Xiangxiong Deng, acting CEO of Intermost said, "After careful
consideration, the company decides that to cease this operation
would allow Intermost to re-organize the Shanghai strategy. This
move does not affect the cashflow of the company and the loss is
an impairment in accounting treatment."
"Intermost has focused its business on China's equity exchange
business. With the rapid development in China's economy there are
plenty of business opportunities in China equity market. We have
recently completed the company's restructuring of associate
companies and subsidiaries to strengthen its equity exchange
focus. We are ready to move forward in full force on this area of
operation," Mr. Deng added.
A full-text copy of the Company's Annual Report is available for
free at http://researcharchives.com/t/s?13a1
Headquartered in Shenzhen, China, Intermost Corporation --
http://www.intermost.com/-- provides electronic exchange
platforms for equity exchanges and financial products in China.
It also provides value-added service to overseas financing and
listing for medium and small sized companies. The Company was
established in USA in September 1998. It was quoted on US OTC
Bulletin Board (stock symbol: IMOT) in December 1998. As a
financial service provider, Intermost Corporation is the first
Chinese Internet Company quoted on the US OTC BB.
INTRAWEST CORP: Securityholders Approve Plan of Arrangement
-----------------------------------------------------------
The proposed statutory plan of arrangement involving Intrawest
Corporation, its shareholders and optionholders and two companies
owned directly or indirectly by funds managed by affiliates of
Fortress Investment Group LLC has been approved by Intrawest
securityholders.
At the special meeting of Intrawest shareholders and optionholders
held on Oct. 17, 2006, the Arrangement was approved by more than
99.9% of the securityholders voting. The closing of the
transaction remains subject to court approval in Canada as well as
satisfaction or waiver of other conditions specified in the
Arrangement Agreement entered into on Aug. 10, 2006, including
approval by the Ministry of Industry under the Investment Canada
Act. Subject to such regulatory approval being obtained, an
application for final court approval is scheduled to be heard by
the British Columbia Supreme Court on Oct. 24, 2006. If court
approval is obtained and the other conditions to closing are
satisfied or waived, the transaction is expected to close on Oct.
25, 2006, after which all Intrawest shareholders will be entitled
to receive $35 in cash for each Intrawest common share.
Based in Vancouver, British Columbia, Intrawest Corporation
(IDR: NYSE; ITW: TSX) -- http://www.intrawest.com/-- operates
destination resorts and adventure travel. The company has
interests in 10 resorts at North America's most popular mountain
destinations, including Whistler Blackcomb, a host venue for the
2010 Winter Olympic and Paralympic Games. Intrawest owns Canadian
Mountain Holidays, the largest heli-skiing operation in the world,
and an interest in Abercrombie & Kent, the world leader in luxury
adventure travel. The Intrawest network also includes Sandestin
Golf and Beach Resort in Florida and Club Intrawest -- a private
resort club with nine locations throughout North America.
Intrawest develops real estate at its resorts and at other
locations across North America and in Europe.
* * *
As reported in the Troubled Company Reporter on Oct. 3, 2006,
Moody's Investors Service's confirmed Intrawest Corp.'s Ba3
Corporate Family Rating.
IT GROUP: Shaw Group Wins Lawsuit Against Bechtel Jacobs
--------------------------------------------------------
Shaw Environmental, Inc., wholly owned by The Shaw Group, Inc.,
provides professional engineering, construction, and consulting
services. Bechtel Jacobs Company LLC, is the environmental
management contractor for the United States Department of Energy's
Oak Ridge Operations Office in Oak Ridge, Tennessee. Prior to the
commencement of The IT Group, Inc.'s chapter 11 cases on
Jan. 16, 2002, Bechtel, as general contractor, entered into four
subcontracts with the Debtor:
(1) a TSCA Contract for the operation and maintenance of a
Toxic Substance Control Act incinerator for mixed
hazardous wastes in Oak Ridge, Tennessee;
(2) a Burial Ground Contract for remediation work in an area
containing hazardous materials;
(3) a Tank Contract for remediation work in an area where
a storage tank had previously contained hazardous
materials; and
(4) a Portsmouth Contract for remedial construction in
Portsmouth, Ohio.
Shortly after IT Group's bankruptcy filing, as reported in the
Troubled Company Reporter, the Debtors and Shaw entered into an
Asset Purchase Agreement. Shaw agreed to purchase substantially
all the Debtors' assets for at least $262 million in cash, stock,
and assumed liabilities. The primary assets to be transferred
were the Debtors' rights under various project contracts,
including three of the four Bechtel subcontracts. Shaw determined
not to take the Portsmouth Contract. The Bankruptcy Court
approved the Sale Agreement on April 25, 2002, and the sale closed
on May 3, 2002.
On March 25, 2002, the Debtor filed a motion to reject the
Portsmouth Contract. On May 10, 2002, the Court granted the
rejection motion, effective as of March 25, 2002. Bechtel
subsequently filed a proof of claim for rejection damages totaling
$4,469,000.
Post-closing, the Debtors and Shaw agreed to memorialize the
assignment of the TSCA, Tank, and Burial Ground Contracts by
executing a Novation Agreement with Bechtel on May 3, 2002. This
Novation Agreement was incorporated into Subcontract Modifications
executed by Shaw and Bechtel on April 30 and May 1, 2003.
Subsequent to the Closing on the APA, Shaw and Bechtel both
performed under the Assumed Contracts. Shaw submitted monthly
invoices for its work, and Bechtel paid 90% of the invoiced
amount, and retained 10% pursuant to the terms of their contracts,
subject to a $1 million cap.
As of the Closing Date, Bechtel held $659,521.70 of Retention
under the TSCA Contract and $215,339.25 under the Tank Contract
for work performed by the Debtor. In the course of Shaw's
performance after the Closing Date, the TSCA Retention grew to
$1 million and the Tank Retention grew to $222,166.75.
On February 14, 2003, Shaw sent Bechtel an invoice for work done
on the TSCA project, which it believed was due in full because it
had reached the $1 million cap set forth in the Retention
Provision. In a letter dated June 23, 2003, Bechtel asserted a
right of offset against the TSCA invoice for the Portsmouth
Contract rejection damages and refused to pay the invoice.
Thereafter, Bechtel paid only 90% of the amount of Shaw's monthly
invoices, apparently on the theory that the TSCA Retention was
depleted by the offset and, therefore, had not reached the
$1 million cap.
Shaw subsequently completed the Burial Ground Contract, and on
January 14, 2004, Bechtel paid Shaw the entire Retention held by
it thereunder ($674,294.64).
The parties dispute whether Shaw subsequently completed the Tank
Contract. They agree, however, that on June 4, 2004, Shaw
submitted an invoice for payment of the Tank Retention. Bechtel
responded to this invoice on July 28, 2004, by again asserting a
right of offset for the Portsmouth Contract rejection damages.
Shaw sued Bechtel (Bankr. D. Del. Adv. Pro. No. 04-57971) on
December 17, 2004, seeking declaratory relief and damages for
breach of contract and unjust enrichment. Both parties moved for
summary judgment. Oral argument was held on November 16, 2005,
and the Honorable Mary F. Walrath requested supplemental briefs.
In a decision published at 2006 WL 2708006, Judge Walrath finds
that the Sale Order issued under sections 363 and 365 of the
Bankruptcy Code precludes Bechtel from offsetting any rejection
damages arising under the Portsmouth Contract against amounts that
are otherwise due and owing to Shaw under the TSCA and Tank
Contracts. Accordingly, Judge Walrath rules, Bechtel's failure to
pay 100% of Shaw's invoices after the TSCA Retention reached $1
million constituted a breach of the TSCA Contract.
Headquartered in Monroeville, Pennsylvania, The IT Group, Inc.
http://www.theitgroup.com/-- together with its 92 direct and
indirect subsidiaries, was a leading provider of diversified,
value-added services in the areas of consulting, engineering and
construction, remediation, and facilities management. The Company
filed for chapter 11 protection on Jan. 16, 2002 (Bankr. Del.
Case No. 02-10118). Lawyers at Skadden Arps Slate Meagher &
Flom LLP, represented the Debtors. On Sept. 30, 2001, the
Debtors listed $1,344,800,000 in assets and $1,086,500,000 in
debts. The Court confirmed the Debtors' chapter 11 Plan on
April 5, 2004, and the Plan took effect on April 30, 2004. Alix
Partners LLC is the IT Litigation Trust Trustee appointed under
the confirmed Plan. John K. Cunningham, Esq., and Ileana Cruz,
Esq., at White Case LLP represents the Trustee.
JACOBS FINANCIAL: August 31 Balance Sheet Upside-Down by $5.9 Mil.
------------------------------------------------------------------
Jacobs Financial Group Inc. disclosed financial results for the
quarterly period ended Aug. 31, 2006. For the quarter, the
Company reported a net loss of $304,887 on $234,964 of total
revenues. This compares to a net loss of $297,274 on total
revenues of $59,627 for the quarter ended Aug. 31, 2005.
At May 31, 2006, the Company's balance sheet showed $4,495,343 in
total assets, $2,106,057 in total liabilities, $8,309,857 in total
mandatorily redeemable proffered stock, and a stockholders'
deficit of $5,920,571.
Notes Payable
At Aug. 31, 2006, the Company had unsecured notes payable to
individuals, primarily common shareholders, amounting to $152,503.
The notes have maturity dates of less than one year or are payable
on demand and bear 10% interest per annum.
On June 28, 2006, the Company borrowed $250,000 under an
unsecured short-term line of credit facility with a commercial
bank to provide additional operating capital. The credit facility
requires monthly interest payments at a variable interest rate
based on the Wall Street Journal Prime rate plus 5%. The loan
matures on Dec. 28, 2006.
Other Liabilities
The Company discloses that it had been delinquent in paying
certain of its payroll tax obligations for periods ending on or
before Dec. 31, 2005. The total liability, including an estimate
for penalties and interest, is approximately $457,425. The
Company says that its management continues to seek financing
arrangements that will allow it to fully satisfy this obligation
in the near future.
Subsequent Event
On Sept. 13, 2006, the Company obtained a release from the obligee
of the $365,000 account payable that was assumed by John M. Jacobs
pursuant to the Assumption Agreement. In accordance with the
terms of the Assumption Agreement, Mr. Jacobs assumption of the
account payable was offset against and eliminated the account
receivable of the company from Mr. Jacobs.
On Sept. 30, 2006, the Company elected to continue to defer
payment of dividends on its Series A Preferred stock and Series B
Preferred stock with the accrued and unpaid dividends amounting to
$13,014 and $190,572, respectively. As of Sept. 30, 2006, the
accumulated accrued and unpaid dividend on the Series A Preferred
stock and Series B Preferred stock amounted to $28,008 and
$556,313, respectively.
A full-text company of the company's quarterly financial report on
Form-10QSB is available for free at:
http://ResearchArchives.com/t/s?139f
Based in Charleston, West Virginia, Jacobs Financial Group, Inc.,
fka NELX, Inc., through its subsidiaries, provides investment
advising, investment management, surety business, security
brokerage, and related services. Subsidiaries include Jacobs &
Co., which provides investment advisory services; FS Investments,
a holding company organized to develop surety business through the
formation and acquisition of companies engaged in the issuance of
surety bonds, and FSI's wholly-owned subsidiary Triangle Surety
Agency, which places surety bonds with insurance companies.
Subsidiary Crystal Mountain Water holds mineral property in
Arkansas.
JACOBS FINANCIAL: Malin Bergquist Expresses Going Concern Doubt
---------------------------------------------------------------
Malin, Bergquist & Company, LLP expressed substantial doubt on
Jacobs Financial Group Inc.'s ability to continue as a going
concern after auditing the Company's financial statements for the
fiscal year ended May 31, 2006. The auditing firm pointed to the
Company's significant net working capital deficit and operating
losses.
The Company says that it has experienced significant operating
losses of approximately $1,874,000 for the year ended May 31, 2006
compared to $1,120,000 for the year ended May 31, 2005. The
Company discloses that while short-term borrowings at year-end
have been substantially refinanced by conversion to preferred
stock, it continues to face significant working capital
deficiencies and adequate funds to pay its preferred stock
dividend obligation.
For the fiscal year ended May 31, 2006, the Company reported a net
loss of $1,494,015 on total revenues of $407,304 compared to a net
loss of $1,120,133 on total revenues of $260,347 for the year
ended 2005.
At May 31, 2006, the Company's balance sheet showed $4,300,896 in
total assets, $1,840,114 in total liabilities, $7,816,027 in total
mandatorily redeemable proffered stock, resulting in a
stockholders' deficit of $5,355,245. The Company's balance sheet
further showed $7,227,668 in accumulated deficit at May 31, 2006.
A full-text copy of the Company's annual report is available for
free at http://ResearchArchives.com/t/s?139e
Based in Charleston, West Virginia, Jacobs Financial Group, Inc.,
fka NELX, Inc., through its subsidiaries, provides investment
advising, investment management, surety business, security
brokerage, and related services. Subsidiaries include Jacobs &
Co., which provides investment advisory services; FS Investments,
a holding company organized to develop surety business through the
formation and acquisition of companies engaged in the issuance of
surety bonds, and FSI's wholly owned subsidiary Triangle Surety
Agency, which places surety bonds with insurance companies.
Subsidiary Crystal Mountain Water holds mineral property in
Arkansas.
JOHN MANEELY: 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 North American Metals & Mining sectors, the
rating agency confirmed its B2 Corporate Family Rating for John
Maneely 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:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$200 Million
Guaranteed
Senior Secured
Revolving Credit
Facility Ba3 Ba1 LGD2 13%
$290 Million
Guaranteed
Senior Secured
Term Loan due 2012 B2 B2 LGD4 51%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Collingswood, New Jersey, John Maneely Company
manufactures small diameter steel pipe as well as tubular products
at seven domestic manufacturing facilities.
MAGUIRE PROPERTIES: Ends $273 Million Loan Term Refinancing
-----------------------------------------------------------
Maguire Properties Inc. completed a new $273 million, 7-year,
interest only financing at a fixed rate of 5.84% for the Company's
777 Tower property in Downtown Los Angeles. The net proceeds of
the refinancing after repayment of the existing $155 million
mortgage loan, payment of prepayment penalties, closing costs and
loan reserves were approximately $104 million.
The Company also repaid the remainder of its $450 million term
loan using proceeds from the 777 Tower refinancing and cash on
hand. Approximately, 98% of the Company's outstanding debt is now
fixed at a weighted average interest rate of approximately 5.2%
for a remaining term of approximately seven years.
777 Tower is an architecturally significant, 52 story office
building designed by Cesar Pelli and located in Downtown Los
Angeles. The property is currently 88% leased and features
1.3 million square feet.
About Maguire Properties
Maguire Properties, Inc. (NYSE:MPG) operates office properties in
the Los Angeles central business district. The Company is a full-
service real estate company with substantial resources in property
management, marketing, leasing, acquisitions, developmentand
financing.
* * *
As reported in the Troubled Company Reporter on Aug. 1, 2006,
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit ratings assigned to Maguire Properties Inc. and Maguire
Properties L.P.
At the same time, the rating assigned to a $332 million term loan
and $100 million revolving credit facility (collectively referred
to as "the facilities") is raised to 'BB+', and the related
recovery rating is revised to '1' from '3'. The outlook is
stable.
MASSEY ENERGY: 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 North American Metals & Mining sectors, the
rating agency confirmed its B1 Corporate Family Rating for Massey
Energy Company.
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
---------- ------- ------- ------ ----------
$754 Million
6.875% Guaranteed
Senior Unsecured
Notes due 2013 B1 B2 LGD4 58%
$355 Million
6.625% Guaranteed
Senior Unsecured
Notes due 2010 B1 B2 LGD4 58%
$10 Million
2.25% Guaranteed
Convertible
Senior Unsecured
Notes due 2024 B1 B2 LGD4 58%
$1 Million
4.75% Guaranteed
Convertible
Senior Unsecured
Notes due 2023 B2 B3 LGD6 97%
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 Richmond, Virginia, Massey Energy Company (NYSE: MEE) --
http://www.masseyenergyco.com/-- produces Central Appalachian
coal, with subsidiaries serving more than 125 utility, industrial
and metallurgical customers around the world.
MERIDIAN AUTOMOTIVE: Wants to Reject 37 Contracts and Leases
------------------------------------------------------------
Meridian Automotive Systems Inc. and its debtor-affiliates ask
permission from the U.S. Bankruptcy Court for the District of
Delaware to reject 37 executory contracts and unexpired
leases.
The Debtors are parties to these 37 contracts and leases, which
provide little or no benefit to their ongoing business operations
as they prepare to emerge from Chapter 11.
The Rejected Contracts and Leases are comprised primarily of
unexpired leases for unneeded and outdated manufacturing or
office equipment, whose terms are no longer consistent with the
market, Robert S. Brady, Esq., at Young Conaway Stargatt &
Taylor, LLP, in Wilmington, Delaware, informs the Court.
The costs associated with rejecting the Contracts and Leases are
relatively minor when compared to the benefits of eliminating
them from the Debtors' estates, Mr. Brady asserts.
A four-page list of the 37 Rejected Contracts and Leases is
available at no charge at http://ResearchArchives.com/t/s?138a
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. 41;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
MGM MIRAGE: Sells Two Hotel-Casinos for $200 Mil. to Marnell-Sher
-----------------------------------------------------------------
MGM Mirage has agreed to sell its Colorado Belle and Edgewater
hotel-casinos located in Laughlin, Nevada, to a group led by
Anthony Marnell III for $200 million.
The Company disclosed that both parties anticipate the transaction
to be completed by the second quarter of 2007.
The Company acquired the Hotel-Casinos in April 2005 as part of
its acquisition of Mandalay Resort Group. On a combined basis,
the two properties feature 2,535 guest rooms, 138,000 square feet
of casino space, 2,224 slot machines and 72 gaming tables on a
combined 57 acres of land along the Colorado River.
About Anthony Marnell III
Anthony Marnell III is the chairman and chief executive officer of
M Resorts. Mr. Marnell and his management team are partnered with
Sher Gaming, LLC, led by Ed Sher, on the transaction. On
June 1, 2006, a Marnell-Sher partnership bought the Saddle West
Hotel and Casino in Pahrump, Nevada. Further information on the
Marnell-led group can be obtained from Greg Wells, president of
Austi LLC, at 702-739-2000. Banc of America Securities acted as
financial advisor to the Marnell group in the transaction.
Las Vegas, Nev.-based, MGM Mirage -- http://www.mgmmirage.com/--
owns and operates 23 properties located in Nevada, Mississippi and
Michigan, and has investments in three other properties in Nevada,
New Jersey and Illinois. MGM MIRAGE has also announced plans to
develop Project CityCenter, a multi-billion dollar mixed-use urban
development project in the heart of Las Vegas, and has a 50%
interest in MGM Grand Macau, a hotel-casino resort currently under
construction in Macau S.A.R.
* * *
As reported in the Troubled Company Reporter on Oct. 3, 2006
Moody's Investors Service's, in connection with the implementation
of its new Probability-of-Default and Loss-Given-Default rating
methodology, confirmed MGM MIRAGE's Ba2 Corporate Family Rating.
MILLENIUM BIOLOGIX: Closes $325,000 Debenture Financing
-------------------------------------------------------
Millenium Biologix Corporation completed the closing of a further
$325,000 of its Convertible Debentures to a new investor in the
Company.
As reported in the Troubled Company Reporter on Sept. 18, 2006,
Millenium closed $1 million of its convertible debenture financing
from two of its existing investors. Included in the $1 million is
$500,000 from the conversion of a demand loan from one of the
investors. The Debentures are secured by a general charge over
the assets of the Company and its subsidiary, subject to existing
prior ranking security.
Additionally, the Company has entered into a non-binding term
sheet with a third party proposing to invest $1.4 million to own
approximately 35% of the common shares of the Company's wholly
owned subsidiary, Millenium Biologix Inc. The transaction
involving MBI would be completed following a corporate
reorganization that would transfer all of MBI's intellectual
property, operational assets and liabilities either to the Company
or to a newly created, wholly owned subsidiary of the Company.
The transaction is expected to close in November 2006 and is
subject to the completion of definitive agreements and certain
conditions precedent.
In order to effect the corporate reorganization necessary to
complete the transaction, MBI has filed a Notice of Intent to make
a proposal to its creditors under the Bankruptcy and Insolvency
Act (Canada) as the initial step in the restructuring process.
Ernst & Young Inc. have been appointed as trustee under the Notice
of Intent.
As part of this decision Millenium will focus the energies of its
management and technical teams towards activities in support of
partnering and other strategic options.
"These are important events intended to extend Millenium's
financial resources into 2007 allowing important time for the
completion of work initiated with Medical Capital Advisors last
month" noted Brian Fielding, Millenium's CEO.
About Millenium Biologix
Headquartered in Ontario, Canada, Millenium Biologix Corporation
(TSX: MBC) -- http://www.millenium-biologix.com/-- is focused on
the development and commercialization of next generation cell
culture and tissue engineering systems that will drive change from
synthetic implants to more effective biologics-based solutions.
* * *
As of April 30, 2006, the Company had cash of $3.2 million. The
Company continues to review various strategic options, including
seeking investors for a private placement financing to obtain the
resources necessary to continue execution of the business plan.
The implementation of the Company's strategy is dependent on
successfully securing these necessary resources in the very near
term. In the event the Company is unable to raise financing
within the next two months, there is substantial doubt as to the
Company's ability to continue as a going concern, which could
require the partial or complete divestiture of one or more of its
core technologies.
The Company disclosed that for the three months ended June 30,
2006, the Company incurred a loss of $3,647,910 and negative cash
flow from operations of $3,113,711. The Company has accumulated a
deficit of $41,136,426 as at June 30, 2006. All of these factors
continue to raise substantial doubt about the Company's ability to
continue as a going concern. On Aug. 17, 2006, the Company was
informed by the Toronto Stock Exchange that the common shares of
the Company have been suspended from trading for failure to meet
the continued listing requirements, and that the Company will be
delisted at the close of business on Sept. 15, 2006. The Company
is in discussions with the TSX to lift the suspension and reverse
the delisting order.
MONOGEN INC: Hires Ted Geiselman as Chief Operating Officer
-----------------------------------------------------------
MonoGen, Inc., the investee company of Oxbow Equities Corp., hired
Ted S. Geiselman as Senior Vice President and Chief Operating
Officer.
Mr. Geiselman has consulted to several medical device and
diagnostic companies as well as several venture capital firms
assessing investment opportunities in the health sector. From
1993 through 2000, Mr. Geiselman assisted the growth of Cytyc from
a development-stage company to a profitable commercial business
focused on the use of liquid-based cytology products in a women's
healthcare industry. Mr. Geiselman assumed growing
responsibilities at Cytyc culminating with him being Senior Vice
President responsible for R&D, Operations, Regulatory and Clinical
Affairs, and Quality Assurance.
During his tenure at Cytyc, Mr. Geiselman and his staff developed
the ThinPrep(R) 2000 and the ThinPrep Imaging System, acquired and
provided design support for customized automated manufacturing
equipment, and created a highly efficient, "best-in-class"
operations organization. Before joining Cytyc, Mr. Geiselman was
a Director of Instrument Systems for the Dade Division of Baxter
Diagnostics in Miami, Florida.
Oxbow President and CEO, Andre Denis, commented: "Mr. Geiselman,
with his leadership strengths and industrial experience in helping
Cytyc Corporation grow from an early stage medical device business
into a high-revenue, high-margin operating company, is an
important addition to MonoGen's management team."
MonoGen President and CEO, Norman J. Pressman, Ph.D., stated:
"MonoGen is exceptionally fortunate to have Ted join our team
given his in-depth experience and past involvement in our cancer
screening and diagnostic cytopathology industry. Mr. Geiselman is
a successful entrepreneurial executive with more than 27 years of
experience managing primarily engineering and operations with
responsibilities in QA/RA and IT as well. His solutions-oriented
focus and leadership strengths in imaging system development,
world-class and high-volume manufacturing operations, and program
management are of timely importance to our business as MonoGen is
about to embark on the commercialization of its FDA-approved
MonoPrep(R) Pap Test and the MonoPrep Processor system."
About Oxbow Equities
Oxbow Equities Inc. (TSX:XBO) is a venture capital and merchant
banking corporation specializing in early stage investments in
health care companies. In addition to providing capital, the
company and its wholly owned subsidiary, 1067719 Alberta Ltd.,
offer strategic direction and financial services. On June 30,
2006, Oxbow Equities invested 54.8% of its assets on MonoGen, Inc.
About MonoGen
MonoGen, Inc. is a private medical device and diagnostics company
developing and commercializing an integrated suite of fully
automated devices -- the Savant Laboratory System (TM) -- for
anatomic and molecular pathology laboratories. The system is
being designed to aid clinical laboratories by reducing their
costs, simplifying workflow operations through reliable automation
and improving the quality and consistency of the laboratory
results. Oxbow Equities, Inc. owns a majority equity interest on
the company.
* * *
In its interim quarterly financial statements for the three-month
period ended June 30, 2006, Oxbow Equities relates that as of June
30, 2006, approximately 54.8% of its assets -- 49.1% as of
December 31, 2005 -- were invested in MonoGen, Inc. This
represented a 41% equity interest at June 30, 2006.
The ultimate recoverability of Oxbow's investment in MonoGen will
be dependent upon a number of factors including the capacity of
MonoGen to obtain funding from third parties, the ability of
MonoGen to maintain government regulations such as those of the
U.S. Food and Drug Administration, the eventual commercial success
of MonoGen's products, and the capability of the company's to
realize the value of MonoGen on commercially reasonable terms and
in a timely manner. The ultimate realizable value of MonoGen may
vary materially from the carrying amount.
MonoGen will require additional funding during the period starting
July 1, 2006 and until it becomes cash flow positive.
These funding needs are well in excess of amounts currently
available to MonoGen from Oxbow. The company is assisting MonoGen
in establishing an operational and financial plan that will allow
it to reach its objectives while maximizing shareholder value.
The financial plan could result in the company investing a portion
or all of its cash resources in MonoGen and raising more equity
capital in due course at
both the company level and at the MonoGen level.
MonoGen's ability to generate positive cash flows, as well as its
ability and Oxbow's ability to raise additional capital,
are outside of Oxbow's control and therefore there is significant
uncertainty about the company's ability to continue as a going
concern.
MUSICLAND HOLDING: Plan Confirmation Hearing Set to November 28
---------------------------------------------------------------
Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York approves Musicland Holding Corp. and
its debtor-affiliates' request for solicitation and voting
procedures. The Court rules that the solicitation and voting
procedures with respect to the Debtors' Joint Plan of Liquidation
satisfy the requirements of the Bankruptcy Code and the Federal
Rules of Bankruptcy Procedure.
However, the Debtors reserve, subject to Court approval, the right
to further amend or supplement the Solicitation Procedures to
better facilitate the solicitation process.
Judge Bernstein also approves the forms of the Non-Voting Status
Notices, the Disputed Claim Notice, the Ballots, and the voting
instructions.
The Court authorizes the Debtors to distribute the Solicitation
Packages to all parties-in-interest, including the U.S. Trustee
for the Southern District of New York and the counsels for the
Official Committee of Unsecured Creditors and the Informal
Committee of Secured Trade Vendors.
The Court establishes Oct. 13, 2006, as Voting Record Date.
To be counted as votes to accept or reject the Plan, all Ballots
must be properly executed, completed and actually received by the
Debtors' voting agent no later than the Nov. 16, 2006, at
4:00 p.m. prevailing Eastern Time. The Debtors may extend the
Voting Deadline, if necessary, without further Court order, to a
date that is no later than five business days before the
Confirmation Hearing, provided that notice of that extension will
be provided to voting creditors.
The Confirmation Hearing will commence on Nov. 28, 2006, at
10:00 a.m., which date may be continued from time to time by the
Court or the Debtors without further notice other than
adjournments announced in open court.
Any objections to the Plan must be filed by Nov. 20, 2006, at
4:00 p.m. prevailing Eastern Time.
The Debtors must file their reply to objections, if any, to the
confirmation of the Plan no later than four days prior to the
Confirmation Hearing.
The Court authorizes BMC Group, Inc., to perform all balloting
services as the Debtors' voting agent.
Judge Bernstein further extends the Debtors' exclusive period to
solicit votes to accept or reject the Plan through and including
Dec. 28, 2006.
Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products. The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts. Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts. (Musicland Bankruptcy News, Issue
No. 20; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
NAPIER ENVIRONMENTAL: Lenders Waive 3rd Quarter Interest Payments
-----------------------------------------------------------------
Lenders of Napier Environmental Technologies Inc. have agreed to
waive their rights to interest for September 2006 and with that,
now for the entire third quarter.
September marks the end of the second consecutive quarter, where
the lenders have agreed to not charge interest in an effort to
help Napier during this time of re-building their customer base.
These interest payments have been waived and the interest
otherwise payable will not be paid or payable currently or in the
future.
About Napier Environmental
Headquartered in Delta, British Columbia, Napier Environmental
Technologies, Inc. (TSX:NIR) -- http://wwwbiowash.com/-- is a
Canadian company primarily engaged in the development, manufacture
and distribution of a wide range of products utilizing
environmentally advanced technology. The product lines include
coating removal and wood restoration products for both the
industrial/commercial market and the consumer/retail market.
Napier is currently operating under the protection of the Canadian
Bankruptcy and Insolvency Act.
NATIONAL JOCKEY: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: National Jockey Club
3501 South Laramie Avenue
Cicero, IL 60804
Bankruptcy Case No.: 06-13247
Type of Business: The Debtor is an organization that conducts
thoroughbred horse racing meets.
Chapter 11 Petition Date: October 17, 2006
Court: Northern District of Illinois (Chicago)
Judge: Pamela S. Hollis
Debtor's Counsel: Chad H. Gettleman, Esq.
Adelman & Gettleman
53 West Jackson Boulevard, Suite 1050
Chicago, IL 60604
Tel: (312) 435-1050 ext. 215
Fax: (312) 435-1059
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Illinois Department of $750,000
Commerce and Economic
Opportunity
Office of the General
Counsel
620 E. Adams Street
Springfield, IL 62701
Chuhak & Tecson Legal Fees $257,056
30 S. Wacker Dr., 26th Fl.
Chicago, IL 60606
Quinlan & Carroll Ltd. Legal Fees $146,452
30 N. LaSalle St., Ste. 2900
Chicago, IL 60602
Wildman, Harold, Allen & Legal fees $100,177
Dixon LLP
Nash, Lalich & Kralovec Legal Fees $79,298
Bertram T. Ebzery Legal fees $73,105
Richlan Consulting Consulting services $43,384
William Engelter & Co. Audit fees $30,000
American Express Business Audit fees $25,000
Service
Coresource 12/05-9/06 $22,118
Insurance
Altschuler, Melvoin & Audit fees $21,648
Glasser LLP
McGoven & Greene LLP Legal fees $15,000
Laner Muchin Dombrow Becker Legal fees $13,597
Record Copy Svcs. Copies - legal $10,881
Documents
Sheridan & Pearlman Legal fees $7,435
BBF $5,985
Meyer, Darragh, Buckler, Legal fees $3,557
Bebenek & Eck
Tishler & Wald, Ltd. Legal fees $3,241
Mastercard Credit card charges $461
Schiff Hardin LLP Legal fees $326
NEENAH PAPER: Closes $218 Million FiberMark Purchase Deal
---------------------------------------------------------
Neenah Paper Inc. has completed the purchase of FiberMark's German
subsidiaries for $218 million.
The transaction was financed through $160 million of available
cash and $58 million of new debt drawn against the Company's
existing senior credit facility.
The acquired businesses will operate as part of the Company's
technical products business under the name Neenah Germany. Neenah
Germany will be comprised of two subsidiaries, Neenah Gessner and
Neenah Lahnstein. The businesses, with three mills located near
Munich and Frankfurt, produce a wide range of products, including
auto and other filter media, non-woven wall coverings, masking and
other tapes, abrasive backings, and specialized printing and
coating substrates.
Sean Erwin, chief executive officer and chairman, said, "This
acquisition, coupled with the sale of our Terrace Bay pulp
operation in August, makes Neenah Paper a much different and
stronger company than we were at the start of the year, as we
continue to execute our strategy to transform into a leading
premium fine paper and technical products company," Mr. Erwin
further said "With today's closing, our integration plans can now
move forward quickly; and we are more excited than ever about
opportunities in Neenah Paper to create value both for our
customers and our shareholders."
Headquartered in Alpharetta, Georgia, Neenah Paper
-- http://www.neenah.com/-- manufactures and distributes premium
and specialty paper grades, with brands such as CLASSIC(R),
ENVIRONMENT(R), KIMDURA(R) and MUNISING LP(R), Gessner(R) and
varitess(R). The company also produces and sells bleached pulp,
primarily for use in the manufacture of tissue and writing papers.
Neenah Paper has manufacturing operations in Wisconsin, Michigan,
Nova Scotia, Canada, and Bruckmuhl, Feldkirchen-Westerham and
Lahnstein, Germany.
* * *
As reported in the Troubled Company Reporter on Sept. 8, 2006
Moody's Investors Service took these rating actions with respect
to Neenah Paper Inc.:
Ratings Affirmed:
* Corporate family rating; B1
* $150 million senior secured revolving credit facility, Ba3
* $225 million senior unsecured notes, B1
Ratings Lowered:
* Speculative Grade Liquidity Rating, SGL-3 from SGL-2
The outlook remains stable.
NEXMED INC: Faces NASDAQ Delisting for Stock Price Noncompliance
----------------------------------------------------------------
NexMed Inc. received a notice from Nasdaq indicating that it did
not comply with the minimum $50 million market value of listed
securities requirement for continued listing set forth in
Marketplace Rule 4450(b)(1)(A). Additionally, the Company does
not comply with the alternative Marketplace Rule 4450(b)(1)(B)
which requires total assets and total revenue of $50 million each
for the most recently completed fiscal year or two of the last
three most recently completed fiscal years. Further, the company
remains on notice for failure to maintain a minimum $1 bid
requirement and, pursuant to Marketplace Rule 4450(e)(2), has
until October 30th to remedy this deficiency.
Nasdaq will provide written notice that the Company's common stock
will be delisted from the Nasdaq National Market at the opening of
business on Nov. 3, 2006 unless the Company's market value of
listed securities is $50 million or more for a minimum of 10
consecutive business days during the 30 day period ended Nov. 3,
2006. Additionally, Nasdaq will provide notice that the Company's
common stock will be delisted on Oct. 30, 2006 unless the bid
price of the Company's stock closes at $1 per share or more for a
minimum of 10 consecutive business days before Oct. 30, 2006.
As of Oct. 3, 2006, 2006 the market value of NexMed's listed
securities based on its current 66,642,661 shares outstanding was
$40,652,023. In order to comply with the $50 million market value
criteria, the Company's share price would have to be $0.76 or
greater for 10 consecutive days prior to Nov. 3, 2006.
About NexMed
Headquartered in Robbinsville, New Jersey, NexMed, Inc. (NASDAQ:
NEXM) -- http://www.nexmed.com/-- develops drug through
participation in early stage licensing and development
partnerships with large pharmaceutical companies.
Going Concern Doubt
As reported in the Troubled Company Reporter on April 11, 2006,
PricewaterhouseCoopers LLP expressed substantial doubt about
NexMed's ability to continue as a going concern after it audited
the Company's financial statements for the year ended Dec. 31,
2005. The auditing firm pointed to the Company's recurring
losses and accumulated deficit.
NORTEL NETWORKS: Board Declares Nov. Dividend on Preferred Shares
-----------------------------------------------------------------
The board of directors of Nortel Networks Limited declared a
dividend on each of the outstanding Cumulative Redeemable Class A
Preferred Shares Series 5 and the outstanding Non-cumulative
Redeemable Class A Preferred Shares Series 7.
The Company disclosed that the annual dividend rate for each
series floats in relation to changes in the average of the prime
rate of Royal Bank of Canada and The Toronto-Dominion Bank during
the preceding month and is adjusted upwards or downwards on a
monthly basis by an adjustment factor which is based on the
weighted average daily trading price of each of the series for the
preceding month, respectively. The maximum monthly adjustment for
changes in the weighted average daily trading price of each of the
series will be plus or minus 4% of Prime. The annual floating
dividend rate applicable for a month will in no event be less than
50% of Prime or greater than Prime. The dividend on each series
is payable on Dec. 12, 2006 to shareholders of record of the
series at the close of business on Nov. 30, 2006.
Headquartered in Ontario, Canada, Nortel Networks Limited
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology
solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband.
Nortel does business in more than 150 countries.
* * *
As reported in the Troubled Company Reporter on July 10, 2006,
Dominion Bond Rating Service confirmed the long-term ratings of
Nortel Networks Capital Corporation, Nortel Networks Corporation,
and Nortel Networks Limited at B (low) along with the preferred
share ratings of Nortel Networks Limited at Pfd-5 (low). All
trends are Stable.
DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb
Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd-
5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low)
Stb Class A, Non-Cumulative Redeemable Preferred Shares.
As reported in the Troubled Company Reporter on June 20, 2006,
Moody's Investors Service affirmed the B3 corporate family rating
of Nortel; assigned a B3 rating to the proposed US$2 billion
senior note issue; downgraded the US$200 million 6.875% Senior
Notes due 2023 and revised the outlook to stable from negative.
Standard & Poor's also affirmed its 'B-' long-term and 'B-2'
short-term corporate credit ratings on the company, and assigned
its 'B-' senior unsecured debt rating to the company's proposed
$2 billion notes. The outlook is stable.
NORTEL NETWORKS: Offers Shares with a 5-Year Fixed Rate Dividend
----------------------------------------------------------------
Nortel Networks Limited disclosed that the fixed dividend rate for
its Cumulative Redeemable Class A Preferred Shares Series 6 will
be equal to 80% of the yield on five-year non-callable Government
of Canada bonds to be determined on Nov. 10, 2006.
The Company says that the Series 6 preferred shares will be issued
as of Dec. 1, 2006 to holders of its Cumulative Redeemable Class A
Preferred Shares Series 5, who exercise their right to convert
their Series 5 preferred shares, on a one-for-one basis, provided
that a minimum number of shares are tendered for conversion. The
Series 6 preferred shares, if issued, will pay, on a quarterly
basis, as declared by its Board of Directors, a cash dividend
based on the fixed rate, which will be published on Nov. 15, 2006
in several Canadian newspapers. The rate will be fixed for 5
years.
Holders of Series 5 preferred shares, the Company further says,
who continue to hold the shares will continue to receive a monthly
floating rate dividend as declared by its Board. The floating
rate dividend will continue to be based on the average prime rate
of two Canadian banks in effect for each day of the applicable
month.
Headquartered in Ontario, Canada, Nortel Networks Limited
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology
solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband.
Nortel does business in more than 150 countries.
* * *
As reported in the Troubled Company Reporter on July 10, 2006,
Dominion Bond Rating Service confirmed the long-term ratings of
Nortel Networks Capital Corporation, Nortel Networks Corporation,
and Nortel Networks Limited at B (low) along with the preferred
share ratings of Nortel Networks Limited at Pfd-5 (low). All
trends are Stable.
DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb
Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt;
Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5
(low) Stb Class A, Non-Cumulative Redeemable Preferred Shares.
As reported in the Troubled Company Reporter on June 20, 2006,
Moody's Investors Service affirmed the B3 corporate family rating
of Nortel; assigned a B3 rating to the proposed US$2 billion
senior note issue; downgraded the US$200 million 6.875% Senior
Notes due 2023 and revised the outlook to stable from negative.
Standard & Poor's also affirmed its 'B-' long-term and 'B-2'
short-term corporate credit ratings on the company, and assigned
its 'B-' senior unsecured debt rating to the company's proposed
$2 billion notes. The outlook is stable.
NORTH AMERICAN: Extends 9% Senior Notes Offering to November 20
---------------------------------------------------------------
North American Energy Partners Inc. is extending the expiration
date of its tender offer and consent solicitation for its 9%
Senior Secured Notes due 2010 (CUSIP No. 656844 AE 7) to 5:00
p.m., New York City time, on Nov. 20, 2006, unless further
extended or earlier terminated.
Based on the new expiration date, the dealer manager and
solicitation agent will determine the actual pricing for Notes
validly tendered and accepted for payment on Nov. 6, 2006. The
Company will publicly announce the pricing information by issuing
a news release prior to 9:00 a.m. New York City time on the day
following the price determination date.
The Notes are being tendered pursuant to the Company's Offer to
Purchase and Consent Solicitation Statement, dated Sept. 8, 2006,
which more fully sets forth the terms and conditions of the cash
tender offer to purchase any and all of the outstanding principal
amount of the Notes as well as the consent solicitation to
eliminate substantially all of the restrictive covenants and
certain events of default contained in the indenture governing the
Notes.
The Company expects to pay for any Notes purchased pursuant to the
tender offer and consent solicitation on a date promptly following
the expiration of the tender offer. The Company may accept and
pay for any Notes at any time after the consent date, in its sole
discretion.
The obligation of the Company to accept for payment and purchase
the Notes in the tender offer, and pay for the related consents,
is conditioned on, among other things, the Company's proposed
amalgamation with its parent corporations and completion of the
subsequent initial public offering of common shares of the
amalgamated company, as described in more detail in the Offer to
Purchase.
The Company has retained Credit Suisse Securities (USA) LLC to
serve as the dealer manager for the tender offer and the
solicitation agent for the consent solicitation. Questions
regarding the tender offer and the consent solicitation may be
directed to Credit Suisse Securities (USA) LLC at (800) 820-1853
(toll free) or (212) 538-0652 (collect). Requests for documents
in connection with the tender offer and the consent solicitation
may be directed to D. F. King & Co., Inc., the information agent
for the tender offer and the consent solicitation, at (800) 431-
9633.
About North American Energy
Headquartered in Edmonton, Alberta, North American Energy Partners
Inc. -- http://www.naepi.ca/-- provides mining and site
preparation, piling and pipeline installation services in western
Canada. The Company specializes in providing services for the
Canadian oil sands.
* * *
As reported in the Troubled Company Reporter on Oct. 5, 2006,
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 last week, the rating agency confirmed its B3 Corporate
Family Rating for North American Energy Partners Inc.
OCEAN WEST: Restates Sept. 30, 2005 Financial Statements
--------------------------------------------------------
Ocean West Holding Corporation restated its financial statements
for the quarter ended Sept. 30, 2005, after determining that the
proposed spin-off of its subsidiary, Ocean West Enterprise, could
not occur until approved by the Securities and Exchange
Commission.
In addition, the financial statements have been adjusted to
reflect the write off of $327,700 of loans held for investment.
The Company's restated balance sheet at Sept. 30, 2005, showed
$2,006,004 in total assets and $3,289,176 in liabilities,
resulting in a stockholders' deficit of $$1,283,172. For the
three months ended Sept. 30, 2005, the Company incurred a
$1,283,172 net loss on $164,119 of revenue.
A copy of the amended quarterly report is available for free
at http://researcharchives.com/t/s?139a
Going Concern Doubt
Chavez and Koch CPA's expressed substantial doubt about Ocean West
Holding Corporation's ability to continue as a going concern after
it audited the Company's financial statements for the fiscal year
ended Sept. 30, 2004. The auditing firm points to the Company's
recurring losses from operations and accumulated deficit of
$6,149,853 as of Sept. 30, 2004.
Ocean West Holding Corporation is a retail and wholesale mortgage
banking company primarily engaged in the business of originating
and selling loans secured by real property with one-to-four units.
The Company offers a wide range of products aimed primarily at
high quality, low risk borrowers, currently in the state of
California. Under its current business strategy, it makes most of
its loans to: purchase existing residences, refinance existing
mortgages, consolidate other debt, and finance home improvements,
education or similar needs.
PARMALAT: Court Moves Parmalat SpA Injunction Hearing to Nov. 28
----------------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York adjourned the hearing to consider
entry of a permanent injunction in Parmalat SpA and its
affiliates' Section 304 cases until Nov. 28, 2006, at 10:00 a.m.
(prevailing Eastern Time).
In the interim, the preliminary injunction is extended until
Nov. 30, 2006. All persons subject to the jurisdiction of
the U.S. court are enjoined and restrained from engaging in any
action against the Foreign Debtors without obtaining permission
from the Bankruptcy Court.
The Civil and Criminal Court of Parma, in Italy, will continue to
have exclusive jurisdiction to hear and determine any suit,
action, claim or proceeding, other than an enforcement action
initiated by the U.S. Securities and Exchange Commission, and to
settle all disputes which may arise out of (i) the construction
or interpretations of the Foreign Debtors' restructuring plan
approved by the Italian Court, or (ii) any action taken or
omitted to be taken by any person or entity in connection with
the administration of the Italian Plan.
As reported in the Troubled Company Reporter on Sept. 6, 2006,
five creditors and parties-in-interest filed with the Court
their objections to Dr. Enrico Bondi's request for a permanent
injunction order in Parmalat's ancillary proceedings.
Dr. Bondi is the authorized foreign representative of Parmalat
Finanziaria S.p.A. and certain of its affiliates.
In his request, Dr. Bondi filed with the Court a proposed
permanent injunction order pursuant to Section 304 of the
Bankruptcy Code. Dr. Bondi also submitted with the Court a
memorandum of law supporting his permanent injunction request.
A full-text copy of the proposed Permanent Injunction Order is
available for free at http://researcharchives.com/t/s?e22
Creditors BankBoston, N.A., FleetBoston Financial, Bank of America
Corporation, Bank of America National Trust & Savings
Association, Banc of America Securities, LLC, and Bank of
America, N.A., told the Court that the proposed Permanent
Injunction Order cannot be approved because it would constitute
an inappropriate anti-foreign suit injunction.
BofA, et al. also argued that the Foreign Debtors' request for
extra-territorial application of the Permanent Injunction would
unduly limit the ability of domestic and foreign creditors to
pursue all appropriate remedies outside of the United States in
accordance with applicable foreign law.
The Pension Benefit Guaranty Corporation, which provides
termination insurance for all of the Debtors' Pension Plans, said
the proposed Permanent Injunction Order contains illegal
discharges, releases, exculpations and injunctions.
The PBGC said it was willing to withdraw its objections if the
proposed Permanent Injunction Order clarifies that:
-- no provisions of or proceeding within the Foreign Debtors'
reorganization cases in Italy and the Section 304 cases
before the U.S. Bankruptcy Court will in any way be
construed as discharging, releasing, limiting or relieving
the Foreign Debtors, or any other party from any liability
with respect to the Pension Plans or any other defined
benefit pension plan; and
-- the PBGC and the Pension Plans will not be enjoined or
precluded from enforcing liability resulting from any of
the provisions of the Foreign Debtors' restructuring plan
approved by the Italian court, or the entry of a Permanent
Injunction Order.
Grant Thornton International does not want the Permanent
Injunction to apply to it in any manner in the conduct of:
-- a securities fraud class action pending before the U.S.
District Court for the Southern District of New York;
-- three actions initiated by Dr. Bondi against banks and
accounting firms; and
-- actions commenced by the trustees of the U.S. Debtors and
two liquidators of Parmalat SpA's Cayman Islands
affiliates.
Grant Thornton is a defendant in those actions.
On behalf of Israel Discount Bank of New York, Bruce S. Nathan,
Esq., at Lowenstein Sandler PC, in New York, argues that in
seeking entry of a permanent injunction order, the Foreign
Debtors must demonstrate that claimholders in the Italian
proceedings are receiving "just treatment" and not experiencing
"prejudice and inconvenience" in the claims administration
process. The Foreign Debtors cannot meet this burden as to IDB,
Mr. Nathan says.
IDB's claims arise from promissory notes totaling $6,000,000 in
principal plus interest, guaranteed by Parmalat S.p.A.
Hermes Focus Asset Management Europe, Ltd.; Cattolica
Partecipazioni, S.p.A.; Capital & Finance Asset Management S.A.;
Societe Monderne des Terrassements Parisiens; and Solarat -- the
lead plaintiffs in a securities class action -- want the proposed
Permanent Injunction Order modified to clarify that it does not
impact their rights to pursue claims against Reorganized
Parmalat.
In July 2006, the District Court granted the Hermes Focus, et al.
leave to file an amended complaint against Reorganized Parmalat.
About Parmalat
Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- together with Milk Products
of Alabama, LLC, and Farmland Dairies, LLC filed Chapter 11
petitions on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139).
Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, represent the U.S. Debtors. When the
U.S. Debtors filed for bankruptcy protection, they reported more
than $200 million in assets and debts. The U.S. Debtors emerged
from bankruptcy on April 13, 2005.
The U.S. Debtors' parent company, Parmalat SpA and its Italian
affiliates, filed separate petitions for Extraordinary
Administration before the Italian Ministry of Productive
Activities and the Civil and Criminal District Court of the City
of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed
Extraordinary Commissioner in each of the cases. The Parma Court
has declared the units insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York. Dr. Bondi is represented by Mr. Holtzer and
Ms. Goldstein at Weil Gotshal & Manges LLP in the Sec. 304 case.
Parmalat has three financing arms: Parmalat Capital Finance
Limited, Dairy Holdings, Ltd., and Food Holdings, Ltd. Dairy
Holdings and Food Holdings are Cayman Island special-purpose
vehicles established by Parmalat SpA. The Finance Companies are
under separate winding up petitions before the Grand Court of the
Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll
(Cayman) Limited serve as Joint Provisional Liquidators in the
cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition,
Case No. 04-10362, in the United States Bankruptcy Court for the
Southern District of New York. In May 2006, the Cayman Island
Court appointed Messrs. MacRae and Cleaver as Joint Official
Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham
& Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon,
Herlands Randolph, represent the Finance Companies in the Sec. 304
case.
The Honorable Robert D. Drain presides over the Parmalat Debtors'
U.S. cases.
(Parmalat Bankruptcy News, Issue No. 79; Bankruptcy Creditors'
Service, Inc., 215/945-7000, http://bankrupt.com/newsstand/)
PARMALAT: Deloitte Wants Pappas' 2nd Amended Complaint Dismissed
----------------------------------------------------------------
G. Peter Pappas, administrator of Parmalat USA Corp.'s Plan of
Liquidation, filed a second amended complaint with the U.S.
District Court for the Southern District of New York against:
* Bank of America Corporation;
* Bank of America, N.A.;
* Bank of America National Trust & Savings Association;
* Banc of America Securities LLC;
* Banc of America Securities Limited;
* BankAmerica International Limited;
* Grant Thornton International;
* Grant Thornton, LLP;
* Italaudit SpA, In Liquidizacione;
* Deloitte & Touche USA, LLP;
* Deloitte & Touche, LLP;
* Deloitte & Touche, SpA;
* Deloitte Touche Tohmatsu;
* Credit Suisse;
* Credit Suisse International;
* Credit Suisse Securities (Europe) Limited; and
* Banca Nazionale del Lavoro, SpA
A full-text copy of the Second Amended Complaint is available for
free at http://researcharchives.com/t/s?135f
The Deloitte Defendants ask the District Court to dismiss the
Second Amended Complaint.
The Deloitte Defendants argue that the Second Amended Complaint
fails to state any claim of primary liability against Deloitte
Touche Tohmatsu. Parmalat USA also fails to plead that DTT is
vicariously liable for the alleged acts of Deloitte & Touche USA,
LLP; Deloitte & Touche, LLP; Deloitte & Touche S.p.A.; or any
other member firm, the Deloitte Defendants add.
The Deloitte Defendants point out that Parmalat USA fails to
plead a joint venture relationship or agency relationship between
DTT and DT-US, DT-Italy or any other member firm.
Parmalat USA's claim is deficient because the Second Amended
Complaint fails to allege that DTT performed any audit work or
was otherwise a party to the alleged joint venture, or that DTT
and its member firms exercised a mutual right to control the
Parmalat audits, Michael J. Dell, Esq., at Kramer Levin Naftalis
& Frankel LLP, in New York, the Deloitte Defendants' counsel,
tells the Court.
In Mr. Pappas' amended complaint, as published in the Troubled
Company Reporter on Sept. 1, 2006, he asserted claims against the
banks and auditors for helping Parmalat insiders artificially
inflate the company and its subsidiaries' financial health.
According to Mr. Pappas, the conspiracy allowed the insiders to
hide substantial operating losses for over a decade, misstate
Parmalat's debt by nearly $10 billion, and misstate total net
assets by $16.4 billion.
Mr. Pappas told the District Court that Parmalat USA was a victim
of the fraudulent scheme. From 1999 through 2003, Parmalat USA
accumulated substantial and material debt -- eventually reaching
in excess of $20,000,000 at the time of Parmalat USA's bankruptcy
filing -- to certain banks. But for the false portrayal of
Parmalat as a thriving, financially sound company, which each of
the Defendants aided and abetted, Mr. Pappas said, Parmalat USA
would not have or could not have incurred tens of millions of
dollars of debt which it could not repay on its own and which
drove it deeper into insolvency.
The Plan Administrator sought unspecified damages on account of
his claims for aiding and abetting, breach of fiduciary duty, and
civil conspiracy.
According to Mr. Pappas, Bank of America structured transactions
that allowed for the manipulation and falsification of Parmalat's
financial statements, and sold more than $1 billion of Parmalat's
private placements to U.S. investors based on what Bank of
America knew were materially false and misleading statements
about Parmalat. To sell the Parmalat securities in the U.S.,
Bank of America representatives arranged "road show" meetings
with major U.S. institutional investors during which Bank of
America representatives, together with culpable Parmalat
insiders, distributed false and misleading information about
Parmalat that was reviewed and approved by Bank of America. Bank
of America also helped disguise loans as equity, thereby
concealing Parmalat's disastrous financial condition.
Mr. Pappas noted that, as Parmalat's culpable insiders have
testified, far from providing mere banking services, Bank of
America conceived, proposed, and carried out numerous deceptive
transactions in concert with the insiders that generated enormous
commissions, concealed Parmalat's mounting debt and which caused
Parmalat's financial statements to be misstated.
The Parmalat insiders could not have concealed the fraud absent
the active participation of the Grant Thornton entities, Mr.
Pappas asserts. Among others, Mr. Pappas said Grant Thornton had
direct knowledge of the role of the offshore entities used to
allow Parmalat to conceal the ever-growing debt generated from its
fraudulent sales.
In 1999, under Italian law, Parmalat was forced to retain
Deloitte & Touche as new auditor. However, Grant Thornton
continued to manage and conceal the true financial status of
offshore entities when Deloitte took over.
Mr. Pappas said that Deloitte certified the financial statements
of Parmalat USA that materially overstated assets from 2000
through 2002, and failed to report, despite knowledge to the
contrary, that Parmalat USA was not a going concern. Deloitte
also knew that Parmalat USA's ability to continue as a going
concern depended upon the ongoing financial support of Parmalat
SpA and, therefore, Deloitte was required by generally accepted
auditing standards to inquire into the financial condition of
Parmalat SpA. According to Mr. Pappas, the Deloitte entities
negligently, recklessly, or fraudulently combined to prepare the
component parts that were then consolidated into Parmalat SpA's
certified financial statements to perpetuate the fraud.
The Credit Suisse Defendants, Mr. Pappas continued, joined the
conspiracy by helping to hide Parmalat's growing debt. The
Credit Suisse Entities acted as an underwriter for Parmalat
securities and directly participated in a complex financial
transaction with Parmalat -- through Parmalat Brasil -- which was
designed to artificially inflate Parmalat's assets, while
appearing to provide Parmalat with financing through the issuance
of bonds by Parmalat Brasil.
Banca Nazionale del Lavoro participated in the factoring scheme
whereby Parmalat's culpable insiders used previously paid
invoices to raise additional capital.
About Parmalat
Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- together with Milk Products
of Alabama, LLC, and Farmland Dairies, LLC filed Chapter 11
petitions on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139).
Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, represent the U.S. Debtors. When the
U.S. Debtors filed for bankruptcy protection, they reported more
than $200 million in assets and debts. The U.S. Debtors emerged
from bankruptcy on April 13, 2005.
The U.S. Debtors' parent company, Parmalat SpA and its Italian
affiliates, filed separate petitions for Extraordinary
Administration before the Italian Ministry of Productive
Activities and the Civil and Criminal District Court of the City
of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed
Extraordinary Commissioner in each of the cases. The Parma Court
has declared the units insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York. Dr. Bondi is represented by Mr. Holtzer and
Ms. Goldstein at Weil Gotshal & Manges LLP in the Sec. 304 case.
Parmalat has three financing arms: Parmalat Capital Finance
Limited, Dairy Holdings, Ltd., and Food Holdings, Ltd. Dairy
Holdings and Food Holdings are Cayman Island special-purpose
vehicles established by Parmalat SpA. The Finance Companies are
under separate winding up petitions before the Grand Court of the
Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll
(Cayman) Limited serve as Joint Provisional Liquidators in the
cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition,
Case No. 04-10362, in the United States Bankruptcy Court for the
Southern District of New York. In May 2006, the Cayman Island
Court appointed Messrs. MacRae and Cleaver as Joint Official
Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham
& Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon,
Herlands Randolph, represent the Finance Companies in the Sec. 304
case.
The Honorable Robert D. Drain presides over the Parmalat Debtors'
U.S. cases.
(Parmalat Bankruptcy News, Issue No. 79; Bankruptcy Creditors'
Service, Inc., 215/945-7000, http://bankrupt.com/newsstand/)
PHOTOCIRCUITS CORP: Disclosure Statement Hearing Set for Oct. 26
----------------------------------------------------------------
The Hon. Stan Bernstein of the U.S. Bankruptcy Court for the
Eastern District of New York will convene a hearing at 10:00 a.m.,
on Oct. 26, 2006, to consider approval of Photocircuits Corp.'s
amended disclosure statement and confirmation of its Amended
Chapter Plan of Liquidation. The hearing will be held at
Courtroom 860, Long Island Federal Court House, in Central Islip,
New York.
Overview of the Amended Plan
The Debtor's Amended Plan incorporates settlements previously
approved with the Debtor's senior and junior secured creditors and
other insiders.
The Debtor consummated a sale of substantially all of its
operating business assets as a going concern for the benefit of
its creditors with American Pacific Financial Corporation, which
will require the transfer of title to the 45-A Property and 45-B
Property. The sale closing was funded on March 31, 2006, and
became effective on March 29, 2006.
American Pacific's modified purchase offer consist of:
a) cash of $35.5 million ($3.5 million of which will be applied
to reimburse Stairway for the draw on the letter of credit);
b) the assumption of $2.1 million of administrative obligations
consisting primarily of outstanding checks and accounts
payable to post-petition vendors;
c) the assumption of $1.5 million of accrued but unpaid
vacation pay to employees; and
d) a series of non-interest bearing contingent promissory notes
in favor of the estate in the aggregate amount of $5.5
million.
The notes indicated in the Asset Purchase Agreement mature one
each in years 2006, 2007, 2008, 2009, 2010, and 2011. The payment
of the notes will be made from 50% of American Pacific's net
operating income in excess of $1 million for the perspective note
years.
The Plan is subject to the Court's approval of two settlements
reached with various parties. The first settlement is the
Stairway/CMK Parties Settlement and the settlement with Messrs.
Endee, Wohlgemuth and Robbins, the Debtor's shareholders. The
Court approved these settlements on March 10, 2006. Following the
settlement approval, the Debtor's debt structure before further
reduction from objections to Claims is:
a) Stairway (senior secured lender) -- approximately
$23.3 million;
b) CMK (junior secured creditor) -- $5.2 million;
c) Other liens/cure costs -- $4.62 million;
d) Administrative claims -- (Estimated) $5.4 million; and
e) Unsecured creditors -- $50 million;
The Amended Plan provides that the estates of Photocircuits, Alpha
Forty-Five LLC and Beta Forty-Five LLC will be substantially
consolidated.
Plan Funding
The Debtor tells the Court that the Plan will be funded from the
proceeds from the sale of the assets after payment of the various
classes of Allowed Secured Claims and all other assets recovered
by the Litigation Trustee. The Restructuring Committee will
nominate an individual to act as Distributing Agent to make the
Distributions under the Plan.
Headquartered in Glen Cove, New York, Photocircuits Corporation
-- http://www.photocircuits.com/-- was the first independent
printed circuit board fabricator in the world. Its worldwide
reach comprises facilities in Peachtree City, Georgia; Monterrey,
Mexico; Heredia, Costa Rica; and Batangas, Philippines. The
Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr.
E.D.N.Y. Case No. 05-89022). Gerard R. Luckman, Esq., at
Silverman Perlstein & Acampora LLP, represents the Debtor in its
restructuring efforts. Ted A. Berkowitz, Esq., and Louis A.
Scarcella, Esq., at Farrell Fritz, P.C., represent the Official
Committee of Unsecured Creditors. When the Debtor filed for
protection from its creditors, it estimated more than $100 million
in assets and debts.
PINNACLE ENTERTAINMENT: Inks Second Amendment to Credit Agreement
-----------------------------------------------------------------
Pinnacle Entertainment, Inc., disclosed on Oct. 11, 2006, that it
entered into a Second Amendment with Lehman Commercial Paper Inc.,
as Administrative Agent, to its Second Amended and Restated Credit
Agreement dated Dec. 14, 2005.
The Second Amendment entered relates to the Company's Second
Amended and Restated Credit Agreement dated Dec. 14, 2005, as
amended by that First Amendment to the Second Amended and Restated
Credit Agreement, dated Dec. 22, 2005, among the Company, the
Lenders referred to therein, Lehman Brothers Inc., and Bear,
Stearns & Co. Inc., as Joint Advisors, Joint Lead Arrangers and
Joint Book Runners, Wells Fargo Bank, N.A., as Lead Arranger,
Societe Generale, Deutsche Bank Securities Inc., and Wells Fargo
Bank, N.A., as Joint Documentation Agents, Bear Stearns Corporate
Lending Inc., as Syndication Agent, and Lehman Commercial Paper
Inc., as Administrative Agent.
The Second Amendment was entered in connection with the Company's
pending acquisition of the Sands Hotel and Casino and certain
surrounding property in Atlantic City, New Jersey.
As reported in the Troubled Company Reporter on Sept. 6, 2006, the
Company and Atlantic Coast Entertainment Holdings, Inc., signed a
definitive agreement under which Pinnacle agreed to purchase the
entities that own The Sands and Traymore sites from entities
affiliated with financier Carl Icahn for approximately
$250 million, plus an additional $20 million for certain tax-
related benefits and additional real estate.
The Second Amendment, which will become effective upon the
consummation by the Company of the Sands Acquisition and any
required regulatory approvals, modifies certain covenants of the
Credit Agreement to, among other things:
* permit the Company to make investments in any unrestricted
subsidiary in connection with or otherwise pertaining to the
Sands Acquisition, in an amount not to exceed $350 million
at any one time outstanding;
* increase the maximum permitted consolidated leverage ratio
and consolidated senior debt ratio during certain time
periods;
* permit capital expenditures associated with the previously
announced expansions of the Company's L'Auberge du Lac
facility, the Belterra facility and the Boomtown New Orleans
facility;
* increase the maximum permitted capital expenditures for the
Company's two St. Louis, Missouri projects from $750 million
to $850 million; and
* establish a separate investment basket for claims acquired
in the bankruptcy of President Casinos, Inc. of up to
$65 million at any one time outstanding.
A full-text copy of the Second Amendment is available for free at:
http://ResearchArchives.com/t/s?139b
Headquartered in Las Vegas, Nevada, Pinnacle Entertainment, Inc.,
(NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates casinos
in Nevada, Louisiana, Indiana and Argentina, owns a hotel in
Missouri, receives lease income from two card club casinos in the
Los Angeles metropolitan area, has been licensed to operate a
small casino in the Bahamas, and owns a casino site and has
significant insurance claims related to a hurricane-damaged casino
previously operated in Biloxi, Mississippi. Pinnacle opened a
major casino resort in Lake Charles, Louisiana in May 2005 and a
new replacement casino in Neuquen, Argentina in July 2005.
* * *
As reported in the Troubled Company Reporter on Oct. 4, 2006,
Moody's Investors Service's confirmed Pinnacle Entertainment,
Inc.'s B2 Corporate Family Rating.
At the same time, Standard & Poor's Ratings Services affirmed its
'BB-' rating and '1' recovery rating following Pinnacle
Entertainment Inc.'s proposed $250 million senior secured bank
facility add-on.
QUEEN'S SEAPORT: Taps Sulmeyer Kupetz as Bankruptcy Counsel
-----------------------------------------------------------
Howard M. Ehrendberg, Esq., the chapter 11 trustee appointed
in Queen's Seaport Development Inc.'s bankruptcy cases, asks
the U.S. Bankruptcy Court for the District of California for
permission to employ Sulmeyer Kupetz, PC, as his bankruptcy
counsel.
Sulmeyer Kupetz will:
a) examines claims of creditors in order to determine their
validity;
b) advice and counsel to the Trustee in connection with
legal problems;
c) negotiate with creditors holding secured and unsecured
claims for plan of reorganization;
d) draft plan of reorganization and disclosure statement;
e) take all steps necessary to confirming a plan;
f) engage in litigation on behalf of the estate and acting
on behalf of the Trustee in any and all bankruptcy law
matters which may arise in the course of this case.
The Trustee's application did not disclose the firm's compensation
rates.
Mark S. Horoupian, Esq., an attorney at the firm, assures the
Court that his firm does not hold any interest adverse to the
Debtor's estate and is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
Mr. Horoupian can be reached at:
Mark S. Horoupian, Esq.
333 South Hope Street, 35th floor
Los Angeles, California 90071-1406
Tel: (213) 626-2311
Fax: (415) 981-9948
http://www.skbr.com/
Headquartered in Long Beach, California, Queen's Seaport
Development, Inc. -- http://www.queenmary.com/-- operates the
Queen Mary ocean liner, various attractions and a hotel. The
Company filed for chapter 11 protection on March 15, 2005
(Bankr. C.D. Calif. Case No. 05-15175). Joseph A. Eisenberg,
Esq., at Jeffer Mangles Butler & Marmaro LLP represents the Debtor
in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of $10 million to $50 million.
RACE POINT: Fitch Affirms 'BB-' Ratings on Three Note Classes
-------------------------------------------------------------
Fitch affirmed eight classes of notes issued by Race Point CLO
Ltd./Race Point CLO, Inc. These affirmations were the result
of Fitch's review process and are effective immediately:
-- $327,000,000 class A-1 notes 'AAA'
-- $71,000,000 class A-2 notes 'AA-'
-- $10,000,000 class B-1 notes 'A-'
-- $12,000,000 class B-2 notes 'A-'
-- $20,000,000 class C notes 'BBB'
-- $15,500,000 class D-1 notes 'BB-'
-- $2,000,000 class D-2 notes 'BB-'
-- $3,500,000 class D-3 notes 'BB-'
Race Point is a collateralized debt obligation that closed
Nov. 20, 2001, and is managed by Sankaty Advisors, LLC. Race
Point's portfolio will be revolving until May 2007 and currently
consists of 87.4% leveraged loans and 12.6% high yield bonds.
The affirmations are the result of relatively stable collateral
performance and coverage test ratios.
Since the last rating action in October 2004, the classes A, B, C,
and D overcollateralization ratios have all improved slightly, and
each is passing its minimum required level by at least 7
percentage points as of the Aug. 31, 2006 trustee report.
Each class's interest coverage ratio has declined since the last
review, but all are above their required levels by at least 25% as
of the latest report. The weighted average rating factor has
deteriorated to 54 ('B/B-') from 51 ('B+/B') during this period,
and is currently failing its maximum level of 52 ('B+/B');
however, the strong coverage ratios alleviate the effect of this
negative net credit migration. There are currently no defaulted
assets.
The ratings of the class A-1 and A-2 notes address the likelihood
that investors will receive full and timely payments of interest,
as per the governing documents, as well as the stated balance of
principal by the legal final maturity date. The ratings of the
class B-1, B-2, C, D-1, D-2, and D-3 notes address the likelihood
that investors will receive ultimate and compensating interest
payments, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date.
RADNOR HOLDINGS: Taps Kurzman Carson as Claims Agent
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave Radnor
Holdings Corporation and its debtor-affiliates permission to
employ Kurtzman Carson Consultants LLC, as their claims agent.
Kurtzman Carson is expected:
a) assist the Debtors in the preparation and filing of the
Debtor's schedules of assets and liabilities and
statements of financial affairs.
b) prepare and serve required notices in these chapter 11
cases, including:
-- a notice of commencement of these chapter 11 cases and
the initial meeting of creditors under Bankruptcy Code
Section 341(a);
-- a notice of claims bar date;
-- notices of any hearings on a disclosure statement and
confirmation of a plan of reorganization;
-- such other miscellaneous notices as the Debtors or the
Court may deem necessary or appropriate for an orderly
administration of these chapter 11 cases; and
c) prepare or filing with the clerk's office and affidavit
of service that includes:
-- a copy of the notice served;
-- an alphabetical list of persons on whom the notice was
served, along with their addresses; and
-- the date and manner of service.
d) maintain copies of all proofs of claim and proofs of
interest filed in these cases;
e) maintain official claims registers in these cases by
docketing all proofs of claim and proofs of interest in a
claims database that includes these information for each
claim or interest asserted:
-- 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;
-- the date the proof of claim or proof of interest was
received by KCC and the Court;
-- the claim number assigned to the proof of claim of
proof of interest; and
-- the asserted amount and classification of the claim.
f) implement necessary security measures to ensure the
completeness and integrity of the claims registers;
g) maintain a current mailing list for all entities that
have filed proofs of claim of proofs of interest and make
list available to the clerk's office or any party in
interest upon request;
h) provide access to the public for examination of copies of
the proofs of claim of proofs of interest filed in these
cases without charge during regular business hours;
j) create and maintain a public access website setting forth
pertinent case information and allowing access to
electronic copies of proofs of claim or proofs of
interest;
k) record all transfers of claims pursuant to Bankruptcy
Rule 3001(e) and give notice of such transfers as
required by Bankruptcy Rule 3001(e);
l) assist the Debtors in the reconciliation and resolution
of claims;
m) comply with applicable federal, state, municipal and
local statutes, ordinances, rules, regulations, orders
and other requirements;
n) assign temporary employees to process claims, as
necessary;
o) comply with further conditions and requirements as the
clerk's office or the Court may at any time prescribe;
p) provide balloting and solicitation services, including
preparing ballots, producing personalized ballots and
tabulating creditor ballots on a daily basis; and
q) provide other claims processing, noticing, balloting and
related administrative services as may be requested from
time to time by the Debtors.
The Debtors' application did not disclose Kurztman Carson's
compensation rates.
To the best of the Debtor's knowledge, the firm does not hold any
interest adverse to the estate and is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.
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. Victoria Watson Counihan, Esq., at
Greenberg Traurig, LLP, represents the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they listed total assets of $361,454,000 and
total debts of $325,300,000.
RAVEN MOON'S: Reduces Outstanding Shares Under Restructuring Plan
-----------------------------------------------------------------
Raven Moon Entertainment Inc.'s recent restructuring plan made the
company more appealing with only 4% of the total outstanding
shares being free trading and 96% restricted.
The company rewarded its shareholders with a warrant dividend that
when exercised protected them from any reverse splits for twelve
months.
"We have a lot going on - all of it focused on growing the
business," said Joey DiFrancesco, Chairman and CEO of Raven Moon.
"We think that our company is a more attractive investment today
because of the progress we've made with our Gina D brand and
because of the actions we've taken to reduce the number of
outstanding free trading shares."
The company also reported that Trinity Broadcasting and the Smile
of a Child Networks signed Raven Moon's GINA D'S KIDS CLUB to air
seven days a week beginning October 7, 2006. The programs will
air on Saturdays at 11 a.m. PST on Trinity Broadcasting Network
and daily at 10:30 a.m. PST on Smile of a Child networks worldwide
to over 100,000,000 new viewers.
About Raven Moon
Raven Moon Entertainment, Inc. -- http://www.ravenmoon.net/--
develops and produces children's television programs and videos,
CD music. At http://www.ginadskidsclub.com/ Raven Moon sells
DVDs, music CDs and plush Cuddle Bug toys. Raven Moon also talks
about music publishing and talent management on its Web site.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 15, 2006,
Richard L. Brown & Company, P.A., in Tampa, Florida, raised
substantial doubt about Raven Moon Entertainment, Inc.'s ability
to continue as a going concern after auditing the Company's
consolidated financial statements for the year ended Dec. 31,
2005. The auditor pointed to the Company's losses from operations
and stockholders' deficiency.
READ-RITE CORP: Trustee Hires Hanson Bridgett as Special Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
in Oakland authorized Tevis T. Thompson, Jr., the Chapter 7
Trustee appointed in Read-Rite Corp.'s bankruptcy case, to retain
Hanson Bridgett Marcus Vlahos Rudy LLP as his special counsel.
Hanson Bridgett will assist the Chapter 7 Trustee in terminating
Read-Rite's 401(k) Plan. As reported in the Troubled Company
Reporter on Sept. 28, 2006, Hanson Bridgett will:
-- review Plan documents, all amendments for termination
provisions, and qualification requirements;
-- draft applicable amendments;
-- review related documents such as Form 5500 and participant
materials;
-- draft necessary resolutions and actions;
-- prepare termination resolutions and participant
notifications;
-- draft Form 5310 and applicable schedules; and
-- prepare necessary documents for corrective measures.
The hourly rates for the firm's professionals are:
Designation Hourly Rate
----------- -----------
Attorneys $250 - $475
Paralegals $155 - $185
Case Clerks $90
Hanson Bridgett assured the Court that it does not hold any
interest adverse to the estate and is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Fremont, California, Read-Rite Corp. filed for
chapter 7 liquidation on June 17, 2003 (Bankr. N.D. Calif. Case
No. 03-43576). Katherine D. Ray, Esq., at Goldberg, Stinnett,
Meyers and Davis represented the Debtor. Tevis T. Thompson, Jr.,
is the appointed Chapter 7 Trustee of the Debtor. Jeremy W. Katz,
Esq., and Matthew J. Shier, Esq., at Pinnacle Law Group represent
the Chapter 7 Trustee.
REFCO INC: RCMI Wants to Sell All Assets to R.J. O'Brien Fund
-------------------------------------------------------------
Refco Commodity Management, Inc., seeks the U.S. Bankruptcy Court
for the Southern District of New York's authority to sell
substantially all of its assets, free and clear of liens claims
and encumbrances, to R.J. O'Brien Fund Management, Inc., an
indirect wholly owned subsidiary of R.J. O'Brien & Associates,
Inc.
RCMI, formerly known as CIS Investments, Inc., is a wholly owned
subsidiary of Debtor Westminster-Refco Management, LLC, an
indirect, wholly owned subsidiary of Refco, Inc. RCMI is
registered with the Commodity Futures Trading Commission as a
commodity pool operator under the Commodity Exchange Act, and is
a member of the National Futures Association.
RCMI has no employees, does not lease or own any real property,
and has few, if any, undisputed, liquidated liabilities.
Founded in 1914, RJO is one of the oldest and best known
independent futures brokerage firms in the industry, J. Gregory
St. Clair, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in
New York, tells the Court. RJO is a founding member of the
Chicago Mercantile Exchange, a full clearing member of the
Chicago Board of Trade, New York Mercantile Exchange, Commodity
Exchange of New York and the New York Board of Trade. RJO
services a nationwide network of over 185 introducing brokers and
some of the world's largest financial, industrial and
agricultural institutions.
RJO Purchase Agreement
RJO will acquire all properties, assets, rights, titles and
interests owned or leased by RCMI, including RCMI's interest in
JWH Global Trust, for cash equal to the amount of a Managing
Owner's General Liability Interest as of the date immediately
prior to the closing, plus $500,000. RJO will also assume
obligations and duties under any assumed contracts after the
consummation of the transaction.
RCMI is the managing owner of the JWH Global Trust. The Trust
trades in U.S. and international futures and forward markets in
currencies, interest rates, energy and agricultural products,
metals and stock indices.
RCMI began marketing its assets after Refco filed for bankruptcy
in October 2005. The parties entered into a binding letter of
intent in September 2006.
The parties' Asset Purchase Agreement, dated October 12, 2006,
provides for RCMI to commence a Chapter 11 proceeding.
In the event the sale is not consummated for any reason other
than a material breach or termination of the Purchase Agreement
by the Buyer, on the earlier of the date (i) RCMI consummates a
sale of its interest as Managing Owner with another party, and
(ii) RCMI consummates a plan of reorganization, RCMI would owe
RJO a $100,000 break-up fee and reimbursement of RJO's out-of-
pocket fees and expenses in excess of $100,000 up to a maximum
amount of $100,000.
Managing Owner's General Liability Interest
As Managing Owner, RCMI manages the business and affairs of the
Trust, other than trading decisions with respect to the Trust's
capital which is the sole responsibility of John W. Henry &
Company, Inc. The Managing Owner has a fiduciary duty to conduct
Trust affairs in the Trust's best interests and has power of
attorney on the Trust's behalf.
Beneficial interests in the Trust consist of two types:
(a) limited liability interests in the Trust acquired by
investors upon their investment of capital in the Trust;
and
(b) the Managing Owner's general liability interest in the
Trust.
As of August 31, 2006, there were approximately 8,987 Unitholders
holding approximately 1,423,902 Units, with an aggregate net
asset value of approximately $140,724,397, exclusive of any
claims against RCM.
The amount of the Managing Owner's General Liability Interest
currently is approximately $2,149,100. RCMI also currently has a
$251,293 additional interest in the Trust.
The Managing Owner is also entitled to be reimbursed by the Trust
for certain expenses incurred on the Trust's behalf and
indemnified by the Trust for certain obligations incurred in
discharging its duties as Managing Owner.
As Managing Owner, RCMI receives a monthly fee based upon the net
asset value of the Trust.
Dissolution of IDS Pools
RCMI is the co-general partner of two public commodity pools, IDS
Managed Futures, L.P., and IDS Managed Futures II, L.P., which it
operates jointly with co-general partner IDS Futures Corporation.
RCMI currently performs most of the management functions with
respect the IDS Pools, including most administrative functions.
The IDS Pools trade a wide range of U.S. and international
futures and forward contracts and related options pursuant to the
trading instructions of professional trading advisors.
Mr. St. Clair notes that RCMI is not seeking to sell its interest
as co-general partner of either the IDS Pools; instead the Debtor
is withdrawing as co-general partner of both. Mr. St. Clair
relates that RCMI has been unable to locate any entity interested
in purchasing or taking an assignment of RCMI's interest, duties
and obligations as co-general partner of the IDS Pools.
As of December 31, 2005, IDS I's and IDS II's assets totaled
$11,100,000 and $3,350,000, exclusive of their claims against
RCM. As of August 31, 2006, IDS I and IDS II had 1,279 and 413
limited partners, and RCMI held interests in IDS I and IDS II
totaling $54,641 and $16,508, exclusive of any claims against
RCM. IDS I and IDS II will terminate by their own terms on
December 31, 2006, and December 31, 2007.
IDS Futures has told RCMI that it is unable and unwilling, under
the circumstances, to serve as sole general partner if required
to manage the IDS Pools as an active business or provide the
services currently provided by RCMI. However, IDS Futures has
agreed to continue to act as general partner of the IDS Pools for
the purpose of supervising the dissolution and winding up of the
IDS Pools, provided that it is allowed to retain a third party to
perform the management and administrative services currently
performed by RCMI.
Under the Purchase Agreement, RJO will provide administrative and
management services currently provided by RCMI during the winding
up process.
On September 27, 2006, IDS Futures filed with the Court of
Chancery of the State of Delaware applications seeking for each
of the IDS Pools decrees of dissolution and instructions for
administration, or, alternatively, appointment of liquidating
trustees, pursuant to Sections 17-802, 17-803, and 17-805 of the
Limited Partnership Act. IDS Futures sought orders authorizing
it to wind up the affairs of the IDS Pools, as the sole general
partner of the IDS Pools, with the assistance of RJO or,
alternatively, appointing liquidating trustees to wind up the
affairs of the IDS Pools in the event that the IDS Pools' limited
partners object to IDS Futures managing and administering the
winding up process with the assistance of RJO.
A hearing on IDS Futures' applications is scheduled for December
2006.
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 Commodity Management, Inc., formerly known as CIS
Investments, Inc., a debtor-affiliate of Refco Inc., filed for
chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No.
06-12436). (Refco Bankruptcy News, Issue No. 46; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
RIVERSIDE CASINO: 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 Gaming, Lodging & Leisure sector, the rating
agency revised its Corporate Family Rating for Riverside Casino &
Golf Resort LLC from B3 to Caa1.
Additionally, Moody's held its probability-of-default ratings and
assigned loss-given-default ratings on these loans:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$10 Million Senior
Secured Revolving
Credit Facility B3 B3 LGD3 35%
$100 Million Senior
Secured Term Loan B3 B3 LGD3 35%
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%).
Riverside Casino operates a casino and golf resort.
RIVIERA 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 for the Gaming, Lodging & Leisure sector, the rating
agency confirmed its B2 Corporate Family Rating for Riviera
Holdings Corporation, and held its B2 rating on the company's 11%
Senior Secured 2010 Notes. In addition, Moody's assigned an LGD4
rating to those bonds, suggesting noteholders will experience a
56% 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 Las Vegas, Nevada, Riviera Holdings Corporation operates
a casino located on the Las Vegas Strip. The casino contains some
1,150 slot machines, 40 gaming tables, a keno lounge, poker room,
and a sports-betting club. The Riviera complements its 2,100-room
hotel with five bars, four restaurants, and entertainment such as
An Evening at La Cage and Splash. Its Black Hawk Casino in Black
Hawk, Colorado, has about 1,000 slot machines, 10 blackjack
tables, two bars, two restaurants, and an entertainment center.
RONCO CORP: Mahoney Cohen Raises Going Concern Doubt
----------------------------------------------------
Mahoney Cohen & Company, CPA, P.C., expressed substantial about
Ronco Corporation's ability to continue as a going concern after
auditing the company's financial statements for the fiscal years
ended June 30, 2006 and 2005. The auditing firm pointed to the
company's net loss of approximately $44.42 million in fiscal 2006
and working capital deficiency of approximately $12.86 million at
June 30, 2006.
Ronco incurred a $44.4 million net loss for the year ended
June 30, 2006, in contrast to a $2.4 million loss for comparable
year ended June 30, 2005. The increase in the company's net loss
of approximately $42 million for the year ended June 30, 2006 was
due to the decrease in revenue and increase in operating expenses.
Net sales for the year ended June 30, 2006 was $58.7 million,
compared with $90.1 million for the year ended June 30, 2005. The
decline of $31.4 million, or 34.8%, in net sales for the year
ended June 30, 2006 is primarily due to a decline in direct
response sales of the company's rotisserie ovens by approximately
$12.7 million, a decline in direct response sales of its cutlery
product line by $24.2 million, and an increase of approximately
$1.9 million in direct response sales of its other products,
including Popeil's Pasta Maker, Electric Food Dehydrator, GLH
Formula Number 9 Hair System and the Pocket Fisherman.
The Company's balance sheet at June 30, 2006, showed $28.2 million
in total assets, $24.3 million in total liabilities and
stockholders' equity of $3.8 million.
A full-text copy of the Company's annual report is available for
fee at http://researcharchives.com/t/s?1397
Ronco Corporation -- http://www.ronco.com/-- develops, markets
and distributes branded consumer products for the kitchen and
home. Its products are sold primarily through direct response
television marketing by broadcasting 30-minute long advertisements
commonly referred to as "infomercials."
ROWE COS: Storehouse Taps Keen Realty to Auction 68 Retail Leases
-----------------------------------------------------------------
Storehouse Inc., an affiliate of The Rowe Companies, retained Keen
Realty, LLC, subject to Bankruptcy Court approval, to market and
assist with the disposition of the company's retail leasehold
interests located in AL, DC, DE, FL (7), GA (8), LA, MD (9), MI,
NC (5), NJ (5), OK, PA (3), SC, TN (3), TX (12), and VA (9).
"We are excited to offer these leases for sale, as they are
located in premier centers and locations throughout the country.
Many of the leases are located in such major markets as Washington
DC (16), Atlanta (7), Dallas (5), Houston (6), Philadelphia (10),
and Charlotte (3)" said Mike Matlat, Keen Realty's Vice President.
"Bids must be submitted in accordance with bid procedures, subject
to Bankruptcy Court approval, no later than November 13th. An
auction is scheduled for November 14th. Interested parties are
encouraged to act immediately, as the leases may be sold prior to
the auction," Matlat added.
The locations range in size from approximately 4,800 sq. ft. -
16,750 sq. ft. Three warehouse leases and one office-headquarters
lease are also available. The auction will be
held at the office of Wiley Rein & Fielding, Attorneys for the
Debtors and Debtors-in-Possession, 1776 K Street NW, Washington,
DC 20006.
Keen Realty consulted with hundreds of clients nationwide, and
evaluated and disposed of more than 18,400 properties consisting
of approximately 1,723,300,000 sq. ft. across the country.
Recent clients include:
-- Cornell Trading, Inc. d/b/a April Cornell,
-- Eddie Bauer/Spiegel,
-- The LoveSac Corp.,
-- Copeland Sports,
-- The Penn Traffic Company,
-- Frank's Nursery and Crafts,
-- Arthur Andersen, Warnaco, and
-- JP Morgan Chase.
About Storehouse Inc.
Storehouse -- http://www.storehouse.com/-- provides furnishings
for home d,cor.
About The Rowe Companies
Headquartered in McLean, Virginia, The Rowe Companies --
http://www.therowecompanies.com/-- manufactures upholstered
retail home and office furniture, interior decorations, tableware,
lighting fixtures, and other interior design accessories. The
Company owns 100% of stock of manufacturing and retail
subsidiaries, Rowe Furniture -- http://www.rowefurniture.com/--
and Storehouse, Inc. -- http://www.storehousefurniture.com/
The Company and its two of its debtor-affiliates filed for chapter
11 protection on Sept. 18, 2006 (Bank. E.D. Va. Case Nos. 06-11142
to 06-11144). Dylan G. Trache, Esq., H. Jason Gold, Esq., and
Valerie P. Morrison, Esq., at Wiley Rein & Fielding LLP, represent
the Debtors. When the Debtors filed for protection from their
creditors, The Rowe Companies listed total assets of $130,779,655
and total debts of $93,262,974; Rowe Furniture estimated assets
between $50 million and $100 million and debts between $10 million
and $50 million; and Storehouse, Inc. estimated assets and debts
between $10 million and $50 million. The Debtors' exclusive
period to file a chapter 11 plan expires on Jan. 16, 2006.
ROYAL CARIBBEAN: 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 Gaming, Lodging & Leisure sector, the rating
agency confirmed its Ba1 Corporate Family Rating for Royal
Caribbean Cruises Ltd.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these
debentures:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Unsecured Notes
6.75%-8.75%
2006-2027 Ba1 Ba1 LGD4 55%
$550 Senior
Unsecured 7% 2013 Ba1 Ba1 LGD4 55%
$350 Senior
Unsecured 7.25% 2016 Ba1 Ba1 LGD4 55%
Zero Coupon
Convertible Notes Ba1 Ba1 LGD4 55%
Senior Unsecured
Shelf Ba1 Ba1 LGD4 55%
Preferred Shelf Ba3 Ba2 LGD6 97%
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 Miami, Florida, Royal Caribbean Cruises Ltd. --
http://www.royalcaribbean.com/-- operates a cruise line with more
than 170 destinations worldwide and an array of shore excursions
and cruise tour options. The company's ships offer itineraries,
activities and amenities designed to appeal to every taste, energy
level and age group giving guests the opportunity to create their
own adventure.
SAINT VINCENTS: Enters Into SW BOCES Lease Pact
-----------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates seek authority from the U.S. Bankruptcy Court
for the Southern District of New York to lease an office and
classroom space located at 275 North Street, Harrison, in New
York, to Southern Westchester Board of Cooperative Educational
Services.
Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New
York, informs the Court that the proposed transaction continues a
longstanding relationship between SW BOCES and Saint Vincent
Catholic Medical Centers following the expiration of a similar
lease for two SW BOCES programs.
Pursuant to the Lease, SW BOCES will occupy 4,813 square feet of
classroom and office space on the first and second floors of
Vincentia Hall, located on the Debtors' Westchester campus in
Harrison, New York. The Lease will run from September 1, 2006,
through August 31, 2009.
SW BOCES will pay rent for:
Rent Period
---- ------
$189,825 09/01/06 - 08/31/07
$195,520 09/01/07 - 08/31/08
$201,385 09/01/08 - 08/31/09
SVCMC will pay for all utilities and building maintenance
expenses, except SW BOCES' telephone bills.
SW BOCES will have access to the Premises from Monday through
Friday, from 7:30 a.m. until 4:30 p.m. SVCMC will also provide
SW BOCES with access to gym, recreation, and art therapy areas,
subject to SVCMC's right to schedule their use and access.
SW BOCES agrees to provide and maintain a comprehensive policy of
general liability insurance protecting itself, SVCMC, SVCMC's
mortgagee, and any other designated parties against any liability
for which SW BOCES is liable.
In addition, pursuant to the Lease, events of default will
include SW BOCES':
(a) failure to pay rent on the due date and further failure to
cure that delinquency within 10 days;
(b) breach of any covenant of the Lease or any other lease
between the parties, and corresponding failure to cure the
breach within 30 days after written notice has been given
by SVCMC to SW BOCES; or
(c) commencement of bankruptcy proceedings.
Upon default, SVCMC may cancel the Lease or re-enter the Premises
and elect to recover as liquidated damages the present value of
the rent to be paid by SW BOCES to SVCMC for the remainder of the
term of the Lease, less the present value of the fair rental
value of the Premises over the same period.
SW BOCES agrees to indemnify and hold SVCMC and its employees,
agents, contractors and directors from any liabilities, expenses
and damages resulting from its use or occupancy of the
Premises.
Either party can terminate the Lease for cause.
Mr. Troop says the Court should approve SVCMC's entry into the
Lease because the Debtors:
-- are not currently using and do not anticipate a need for
the Premises for their own operations;
-- believe that the rent under the Lease may exceed market
rent for similar properties;
-- are provided with an additional revenue source as a result
of the services provided to participants in the SW BOCES
programs by SVCMC; and
-- obtain the benefits without undue risk in light of the
termination provisions in the Lease and which can be
realized in a manner consistent with the Debtors' mission
of providing quality health care services to the
underserved by making critical educational and therapeutic
services available to children unable to function in
mainstream educational environments.
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. 36 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SAINT VINCENTS: Gets Interim OK to Retain CIT as Property Advisor
-----------------------------------------------------------------
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, on an interim basis, to employ CIT Capital
USA, Inc., as their real estate advisors.
The Debtors have commenced a strategic analysis of their real
estate assets, businesses and operations on their Manhattan Campus
as part of their reorganization efforts. To the end, the Debtors
are seeking the Court's permission to employ CIT Capital as their
real estate advisors for the Manhattan Options and Review Process,
nunc pro tunc to July 5, 2006.
To assist with the design and implementation of the Debtors' plan
of reorganization, CIT Capital will identify and advise on
potential options concerning the Debtors' Manhattan real estates
assets, Mr. Sansone states. Among others, CIT Capital will:
(a) review and analyze real estate studies performed by or for
the Debtors;
(b) review and recommend third-party consultants to complete
due diligence;
(c) evaluate the third-party professionals currently engaged
or consulted to perform due diligence;
(d) work with the Debtors' staff and architectural,
engineering and legal teams to identify potential issues
or considerations relevant to Debtors' options relating to
the Properties;
(e) develop an in-depth understanding of the Debtors'
financial, operational and emergence objectives and
subsequently, devise scenarios to maximize the value of
the Properties in connection with those objectives and
timing requirements;
(f) prepare an analysis of potential Transaction structures;
(g) conduct market research and valuation analysis;
(h) assist the Debtors in narrowing the range of options and
determining the optional real estate strategy to meet the
Debtors' goals and which supports the plan of
reorganization;
(i) provide project management services;
(j) work under the sole direction of Mr. Sansone and make
itself available to consult and report to the Joint Real
Estate Advisor Committee -- a committee comprised of an
equal number of the Creditors Committee members and the
Debtors' representatives who would serve as voting members
of the search committee for the selection of a real estate
advisor; and
(k) provide other services relating to the Properties, as
requested by the Debtors' management and Board.
Dennis R. Irwin, head of CIT Commercial Real Estate, will lead
the CIT Capital Team. CIT Commercial Real Estate is a business
unit of parent company CIT Group, Inc.
The Debtors propose to pay CIT Capital monthly and transaction
fees:
(1) Effective July 5, 2006, the Debtors will pay CIT Capital a
$75,000 monthly fee, payable in cash for the remainder of
the term of the Agreement.
(2) For each property for which a Transaction is consummated,
CIT will receive a fee equal to:
* 1.50% of Gross Aggregate Transaction Proceeds up to
$50,000,000; plus
* 1.00% of Gross Aggregate Transaction Proceeds in
excess of $50,000,000 up to $100,000,000; plus
* 0.75% of Gross Aggregate Transaction Proceeds in
excess of $100,000,000 up to $150,000,000; plus
* 0.67% of Gross Aggregate Transaction Proceeds in
excess of $150,000,000 up to $200,000,000; plus
* 0.50% of Gross Aggregate Transaction Proceeds in
excess of $200,000,000 up to $250,000,000; plus
* 0.40% of Gross Aggregate Transaction Proceeds of more
than $250,000,000.
CIT Capital will be entitled to Transaction Fees in connection
with the disposition of Properties during the term or within one
year after the date of termination of the Agreement. The
combined amount of the aggregate Transaction Fees, however, will
not exceed $2,000,000.
In the event a Transaction with respect to certain properties is
consummated, CIT Capital will be paid 50% of its Transaction Fees
upon the closing of that Transaction as long as it has provided
notice of the proposed Transaction Fee, including the basis of
the calculation to the Creditors Committee, the U.S. Trustee and
the Court.
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. 36 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SCOTT BAILEY: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Scott A. Bailey
P.O. Box 25426
Scottsdale, AZ 85255
Bankruptcy Case No.: 06-03403
Chapter 11 Petition Date: October 18, 2006
Court: District of Arizona (Phoenix)
Judge: Redfield T. Baum
Debtor's Counsel: Allan D. Newdelman, Esq.
Allan D. Newdelman, P.C.
80 East Columbus Avenue
Phoenix, AZ 85012
Tel: (602) 264-4550
Fax: (602) 277-0144
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
SEMINOLE TRIBE: 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 Gaming, Lodging & Leisure sector, the rating
agency confirmed its Ba1 Corporate Family Rating for the Seminole
Tribe of Florida, and held its Ba1 rating on the company's Senior
Notes. Additionally, Moody's assigned an LGD4 rating to those
notes, suggesting noteholders will experience a 64% 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 Hollywood, Florida, The Seminole Tribe of Florida
operates six casinos. The company owns the Seminole Hard Rock
hotel, and other casinos in Tampa and Hollywood. Each casino is
equipped with thousands of gaming machines and poker tables. The
Seminole Tribe also operates a cultural and historical museum
adjacent to its gaming facilities in Hollywood. The tribe also
operates a private airstrip, a television broadcasting department,
and various educational programs at six reservations throughout
Southern Florida.
SENECA GAMING: 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 Gaming, Lodging & Leisure sector, the rating
agency raised its Corporate Family Rating for Seneca Gaming
Corporation from Ba2 to Ba1, and revised its Ba2 rating from Ba3
on the company's 7 1/4% Senior Notes Due 2012. Additionally,
Moody's assigned an LGD4 rating to those bonds, suggesting
noteholders will experience a 66% 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 Niagara Falls, New York, Seneca Gaming Corp. is an
incorporated instrumentality of the Seneca Nation of Indians of
New York. The Seneca Nation of Indians of New York is federally
recognized and has a compact with the State of New York that
provides the Nation with the right to establish and operate three
Class III gaming facilities in western New York.
SENTINEL OFFENDER: SSG Arranges New $11 Million Credit Facility
---------------------------------------------------------------
Sentinel Offender Services, LLC, retained the Special Situations
Group/SSG of NatCity Investments, Inc., a subsidiary of National
City Corporation, as its financial advisor to recapitalize its
balance sheet in order to refinance existing indebtedness and
secure liquidity to fund growth opportunities.
SSG arranged a new $11 million revolving line of credit and term
loan facility using what it describes as "a creative cash flow
structure" with the leveraged lending arm of a large [unnamed]
hedge fund. The transaction, SSG says, provides sufficient
availability to finance Sentinel's continued growth.
The SSG Special Situations Group team members who worked on the
Sentinel deal are:
Mark E. Chesen
Matthew P. Karlson
Michael S. Goodman
Luis A. Pillich
SSG CAPITAL ADVISORS, L.P.
Five Tower Bridge
300 Barr Harbor Drive, Suite 420
West Conshohocken, PA 19428
Telephone (610) 940-1094
Fax (610) 940-3875
http://www.ssgca.com/
Sentinel Offender Services, LLC provides a broad array of
community corrections services ranging from location monitoring
(utilizing ankle bracelets) to private probation services (such as
offender fee collection). The Company uses state-of-the-art
tracking technology and maintains a centralized monitoring center
at its headquarters in Irvine, California. Sentinel currently
contracts with over 200 governmental agencies and provides
services to more than 35,000 offenders in 41 states.
SFG LP: Files Schedules of Assets and Liabilities
-------------------------------------------------
SFG LP delivered its schedules of assets and liabilities to
the U.S. Bankruptcy Court for the Western District of Texas,
disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property
B. Personal Property
C. Property Claimed
as Exempt
D. Creditors Holding $264,776
Secured Claims
E. Creditors Holding
Unsecured Priority Claims
F. Creditors Holding $4,083,703
Unsecured Nonpriority
Claims
-------------- ------------
Total $4,348,479
SFG, LP -- http://sandiafood.com/-- operates as a franchisee and
operator of "Johnny Carino's" restaurants in Texas, New Mexico and
Arizona. The Company filed for chapter 11 protection on Aug. 4,
2006 (Bankr. W.D. Tex. Case No. 06-11207). When the Debtor filed
for protection from its creditors, it estimated its assets and
debts between $10 million and $50 million.
Sandia Food Group, Inc., its general partner, filed for chapter 11
protection on Aug. 7, 2006 (Bankr. W.D. Tex. Case No. 06-11212).
On Aug. 8, 2006, three more affiliates filed chapter 11 petitions
in the same Court.
SFX ENTERTAINMENT: 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 Gaming, Lodging & Leisure sector, the rating
agency confirmed its B1 Corporate Family Rating for SFX
Entertainment, Inc.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these loans:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Senior Secured
Revolver due 2012 B1 B1 LGD3 48%
Senior Secured
Term Loan Due 2013 B1 B1 LGD3 48%
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 City, SFX Entertainment, Inc. is a promoter,
producer and venue operator for live entertainment events. The
company is also an integrated sports marketing and management
specializing in the representation of sports athletes and
broadcasters, integrated event management, television programming
and production and marketing consulting services.
SILICON GRAPHICS: Four Creditors Sell Claims Totaling $307,050
--------------------------------------------------------------
From September 6 to 22, 2006, the Clerk of the U.S. Bankruptcy
Court for the Southern District of New York recorded four claim
transfers in Silicon Graphics, Inc., and its debtor-affiliates'
Chapter 11 cases, aggregating $307,050:
Transferee Transferor Amount
---------- ---------- ------
Argo Partners Access Communications $61,511
12 West 37th St., 9th Flr.,
New York, NY 10018 Area Electric 59,857
Tel. No.: (212)643-5446
Volex Powercords, 56,827
Inc.
Liquidity Solutions, Inc., Sterne, Kessler, 128,855
dba Revenue Management Goldstein & Fox
One University Plaza
Suite 312,
Hackensack, NJ 07601
Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance
computing. SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data. The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts. Judge Lifland confirms the Debtors' Plan
of Reorganization on Sept. 19, 2006. When the Debtors filed for
protection from their creditors, they listed total assets of
$369,416,815 and total debts of $664,268,602. (Silicon Graphics
Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
SIX FLAGS: 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 Gaming, Lodging & Leisure sector, the rating
agency confirmed its B3 Corporate Family Rating for Six Flags,
Inc. and its subsidiary Six Flags Theme Parks, Inc.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these loans and
bond debt obligations:
Issuer: Six Flags, Inc.
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
7.25% PIERS
Mandatorily
Convertible
Preferred Stock
Due Aug. 15, 2009 Caa3 Caa2 LGD6 98%
Sr. Unsec. 8 7/8%
Senior Notes
Due 2010 Caa2 Caa1 LGD5 74%
Sr. Unsec. 9 3/4%
Senior Notes
Due 2013 Caa2 Caa1 LGD5 74%
Sr. Unsec. 9 5/8%
Senior Notes
Due 2014 Caa2 Caa1 LGD5 74%
Issuer: Six Flags Theme Parks, Inc.
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Senior Secured RC B1 Ba3 LGD2 16%
Multi Currency RC B1 Ba3 LGD2 16%
Term Loan B1 Ba3 LGD2 16%
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 City, Six Flags, Inc., through its subsidiaries,
engages in the ownership and operation of regional theme,
amusement, and water parks in North America. The theme parks
offer traditional thrill rides, water attractions, themed areas,
concerts and shows, restaurants, game venues, and merchandise
outlets. As of March 16, 2006, it owned or operated 29 parks.
SKYEPHARMA PLC: Posts GBP26.4 Mil. Net Loss in 2006 Second Quarter
------------------------------------------------------------------
SkyePharma PLC announces financial results for the six months
ended June 30, 2006.
Operating highlights
Marketed products:
- Sales of royalty-earning products reported by SkyePharma's
partners have largely met or exceeded its expectations,
- Pipeline progress:
* DepoDur(TM) approved in UK,
* DepoCyt(R) approved in Australia,
* zileuton CR filed by Critical Therapeutics,
* Lodotra(TM) filed by Nitec,
* Flutiform(TM) commenced Phase III trials, and
* Foradil(R) Certihaler(TM) successfully modified and
modifications filed with the FDA.
New corporate agreements:
- Flutiform(TM) licensed to Kos Pharmaceuticals for USA,
- Flutiform(TM) licensed to Mundipharma for Europe,
- DepoBupivacaine(TM) rights regained from Mundipharma,
- Development of nisoldipine CR for Sciele Pharma, and
- Negotiations ongoing to divest the Injectables unit.
Financial highlights
- Revenue GBP25.6 million (2005: GBP36 million)
- Royalties GBP11.5 million (2005: GBP12 million)
- R&D spend GBP19.2 million (2005: GBP10.9 million)
- Gross Profit GBP12 million (2005: GBP21.4 million)
- Loss before tax GBP26.4 million (2005: GBP12.8 million)
- Loss per share GBP3.5 (2005: GBP2.1)
- Net cash GBP21.8 million (2005: GBP19.0 million)
"SkyePharma has made significant progress on the strategic
objectives put forward this year. With our new management team in
place, we have licensed Flutiform(TM), our major pipeline asset,
in both the USA and Europe," Frank Condella, chief executive
officer, commented.
"We have also expanded our development pipeline while improving
our operational efficiency. Throughout the remainder of this year
we look forward to continue executing on our strategic plan,
including the divestiture of our injectables unit as an outright
sale or under the possible alternative scenario of the out-
licensing of DepoBupivacaine.
"We continue to believe that if we deliver on our strategic
objectives we will reach sustainable profitability and create
value for shareholders."
Chairman's Statement
Dr. Jerry Karabelas, the Company's non-executive chairman, said
that SkyePharma has made substantial progress on executing its
strategic plan announced earlier this year.
Appoint new leadership
SkyePharma's founder Ian Gowrie-Smith resigned from the Board in
January and Dr. Karabelas was appointed non-executive chairman in
his place. A new executive management team has also been
appointed with Frank Condella as chief executive officer and
Dr. Ken Cunningham as chief operating officer. Both have now
joined the Board.
Divest the injectables unit
This is a stand-alone operation in San Diego with its own
management team, manufacturing facilities for marketed products
(DepoCyt(R) and DepoDur(TM)), and R&D activities with a pipeline
of products including DepoBupivacaine(TM) and several therapeutic
proteins.
The Company retained UBS as its investment bank to manage the
divestment process. The Company is in active negotiations with
several parties interested in acquiring the entire business unit,
with terms likely to include a combination of upfront and
milestone payments and royalties on product sales.
In addition, a number of parties have expressed their interest in
licensing DepoBupivacaine(TM), the major pipeline asset. The
Company is therefore in parallel negotiations regarding a
potential license.
Under this option, the Company would expect an upfront payment and
full funding of further development of DepoBupivacaine(TM),
milestone payments and a longer-term royalty stream. Should it
pursue the license option, the Company would plan to reduce the
size of the unit, minimizing the ongoing cash burn, and pursue the
future divestment of the remaining components of this business
unit. The Company aims to complete a transaction before the end
of the year.
Continue Phase III for Flutiform(TM)
The Company will continue Phase III for Flutiform(TM) and out-
license Phase III trials started in February as planned. This
represents its major R&D expenditure until anticipated completion
in mid-2007.
The 12-month safety study is ongoing and the three pivotal studies
have also commenced recently, all on track for its target of
filing with the FDA in the second half of 2007 and in Europe in
2008.
In May, the Company granted exclusive U.S. marketing rights for
Flutiform(TM) to Kos Pharmaceuticals, a US specialty
pharmaceutical company with a highly successful sales record and
experience in the respiratory market.
The Company is convinced that Kos has an ideal profile to optimize
sales of Flutiform(TM) in the key U.S. market, and the Company is
gratified by its obvious commitment to the product. The Company
recently announced a partnership with Mundipharma for Europe and
other territories.
Focus on core oral/inhalation unit and expand pipeline
In June, SkyePharma's Business Review disclosed that it is about
to enter clinical trials in two new projects: a treatment for pain
and inflammation and a novel approach to the treatment of sleep
disorders.
The Company also announced one new partnered project (a controlled
release version of Sular(R) (nisoldipine), the lead product of
Sciele Pharma, the Company's U.S. partner for Triglide(TM)), and
two late-stage products that have now been filed: a controlled
release version of the oral asthma drug Zyflo(R) for Critical
Therapeutics and Lodotra(TM), a delayed release formulation of an
anti-inflammatory drug for rheumatoid arthritis for Nitec.
The Company is seeking additional complementary projects to
reinforce its pipeline.
Improve operational efficiency
The Company has been reviewing all costs, but remain committed to
prudent R&D expenditure as it is the future of the company.
Having completed a survey of the London market, the Company has
found the rent of its existing offices to be highly competitive.
Regardless, it has reduced its space requirements and halved the
costs of its London head office. Also, it is vacating its U.S.
office in New York, which will further reduce overheads. The
Company has reviewed overall staffing levels and reduced the
number of personnel at its plant in Lyon. Finally, it has
restructured its investor relations, legal, and company
secretarial functions.
Dr. Karabelas said that he is confident that the strategy the
Company has adopted will enable it to maximize the potential of
Flutiform(TM) and other pipeline products, to become profitable
and to deliver long-term value for shareholders.
Financial Review
The Group's revenues are sensitive to the timing and recognition
of milestone payments and up-front payments received on the
signing of new agreements. Revenues for the first six months of
2006, at GBP25.6 million, were 29% below the GBP36.0 million
reported in the first half of 2005, primarily due to the phasing
of recognition of up-front revenues received in 2006 for the US
marketing and distribution rights for Flutiform(TM).
Contract development and licensing revenue in the half year
decreased by GBP9.3 million to GBP10.2 million, compared with
GBP19.5 million in 2005. Revenues recognized from milestone
payments and up-front payments received on the signing of
agreements amounted to GBP8.3 million in the first half of 2006
compared with GBP17.6 million in 2005, primarily due to
differences in revenue recognition for up-front payments received.
Under SkyePharma's accounting policy for revenue recognition, up-
front payments are generally deferred and recognized over the
period of development up to filing. Consequently, while
SkyePharma received GBP13.4 million ($25 million) in May 2006 from
Kos for the US marketing rights to Flutiform(TM), only GBP2.9
million was recognized in the first half of 2006.
By contrast, in the first half of 2005, the Company was able to
recognize GBP10.7 million from the payment from Sciele Pharma for
the approval of Triglide(TM). Research and development costs
recharged remained constant at GBP1.9 million.
The recent up-front payment of GBP10.1 million (EUR15.0 million)
received on signature of a licensing transaction with Mundipharma
for European rights to Flutiform(TM) will result in a significant
increase in the total revenue in respect of Flutiform(TM) that can
be recognized in the second half of 2006, compared with the 2.9
million pounds recognized in the first half of 2006.
Royalty income decreased slightly to GBP11.5 million compared with
GBP12.0 million in the first half of 2005. During the early part
of 2005 the Company received royalties based on GlaxoSmithKline's
budgeted sales of Paxil CR(TM) while the product was temporarily
off the market as a result of GSK's suspension of production at
their Cidra plant in Puerto Rico. The slight decrease in 2006 was
due to a 48% fall in Paxil CR(TM) royalty income: although the
product returned to the market in June 2005, continuing supply
constraints mean that sales have not fully recovered to the pre-
withdrawal level. This was largely offset in 2006 by an increase
in royalty income from DepoCyt(R), Triglide(TM), Xatral(R), and
Coruno (R).
Excluding Paxil CR(TM), royalties for the balance of SkyePharma's
other products grew by 50% in the first half of 2006 compared with
the first half of 2005.
Manufacturing and distribution revenue decreased by GBP600,000 in
the first half to GBP3.9 million, compared with GBP4.5 million in
the first half of 2005, primarily due to a fall in the production
of clinical trial material for Novartis in respect of QAB 149
following the withdrawal of Foradil(R) Certihaler(TM) from the
market.
Going Concern Doubt
As reported in the Troubled Company Reporter on Aug. 1, 2006,
PricewaterhouseCoopers LLP in London, disclosed that there is
uncertainty as to when Skyepharma PLC's certain strategic
initiatives may be concluded and their effect on the Company's
working capital requirements. PwC said that this raises
substantial doubt on the Company's ability to continue as a
going concern. PwC disclosed this explanatory paragraph after
auditing the Company's financial statement for the year ended
Dec. 31, 2005.
About SkyePharma PLC
Headquartered in London, SkyePharma PLC (Nasdaq: SKYE; LSE: SKP)
-- http://www.skyepharma.com/-- develops pharmaceutical products
benefiting from world-leading drug delivery technologies that
provide easier-to-use and more effective drug formulations. There
are now twelve approved products incorporating SkyePharma's
technologies in the areas of oral, injectable, inhaled and topical
delivery, supported by advanced solubilisation capabilities.
SMART MODULAR: Earns $32.3 Mil. in Fiscal Year 2006 Ended Aug. 25
-----------------------------------------------------------------
SMART Modular Technologies (WWH), Inc. reported its financial
results for the fourth quarter and fiscal year 2006.
Net sales for the fourth quarter of fiscal 2006 were
$197.0 million, compared with $188.5 million for the third quarter
of fiscal 2006, and $141.6 million for the fourth quarter of
fiscal 2005.
Net sales for the fiscal year ended Aug. 25, 2006, were
$707.4 million, compared with $607.3 million for fiscal year 2005.
Gross profit for the fourth quarter of fiscal 2006 was
$33.5 million, compared with $32.7 million for the third quarter
of fiscal 2006, and up 12% from $29.8 million for the fourth
quarter of fiscal 2005. Gross profit for fiscal year 2006 totaled
$126.6 million, 25% higher than gross profit of $101.3 million for
fiscal 2005.
GAAP net income for the fourth quarter of fiscal 2006 was
$15.7 million compared with net income of $6.5 million for the
third quarter of fiscal 2006, and $8.6 million for the fourth
quarter of fiscal 2005.
For fiscal year 2006, SMART reported GAAP net income of
$32.3 million compared with $26.2 million for fiscal year 2005.
Non-GAAP net income for the fourth quarter of fiscal 2006 was
$11.9 million compared with $10.4 million for the third quarter of
fiscal 2006, and $8.6 million for the fourth quarter of fiscal
2005.
For fiscal 2006, non-GAAP net income was $40.2 million compared
with $26.9 million for fiscal 2005.
For the fourth quarter of fiscal 2006, non-GAAP financial results
have been adjusted to exclude a $3.8 million tax benefit due to a
deferred tax assets' valuation allowance release. For fiscal year
2006, non-GAAP financial results have also been adjusted to
exclude $1.9 million of other income due to a change in accounting
treatment for the Company's interest rate swaps, a $5.9 million
charge related to the redemption of $43.8 million aggregate
principal amount of its senior secured floating rate notes, as
well as a $9.0 million charge ($7.7 million, net of taxes) to
terminate annual fees payable under certain advisory service
agreements.
SMART ended the fourth quarter and fiscal year with $85.6 million
in cash and cash equivalents.
"We successfully closed fiscal year 2006 delivering strong
financial results, demonstrated in part by growing gross profit
25% year over year," Iain MacKenzie, president and chief executive
officer of SMART, stated.
"We continue to gain traction as a market leader in high-end OEM-
focused memory modules and embedded systems and display products,
through our global manufacturing footprint and product and
technology expertise. The strong demand for our memory products
and engineering expertise has enabled us to drive growth in new
markets and expand our technology and product offerings. We are
pleased with the progress of our business diversification
initiatives."
Business Outlook
For the first quarter of fiscal 2007, SMART estimates net sales
will be in the range of $200 million to $210 million, gross profit
will be in the range of $35 million to $37 million, GAAP diluted
net income per share will be in the range of $0.19 to $0.20, and
the shares used in computing diluted net income per ordinary share
will be in the range of 63.3 million to 63.8 million. SMART
currently expects fiscal 2007 GAAP diluted net income per share
will be in the range of $0.80 to $0.85 per share.
About SMART Modular Technologies
Fremont, Calif.-based SMART Modular Technologies (WWH), Inc.
(Nasdaq: SMOD) -- http://www.smartm.com/-- is a holding company
that is incorporated in the Cayman Islands. The Company, through
its subsidiaries, is an independent manufacturer of memory
modules, embedded computing subsystems, and TFT-LCD display
products for use in a variety of electronics systems, including
computers and storage devices, networking and communications
equipment, industrial products, and others.
Solectron Corp. owned SMART Modular between 1999 and 2004. The
business was later spun out of Solectron in April 2004 to private
equity investors and management.
* * *
Moody's Investors Service assigned B2 rating to SMART Modular
Technologies (WWH), Inc.'s $125 million senior secured second lien
notes due 2012 issued under Rule 144A.
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Fremont, California-based SMART Modular
Technologies (WWH), Inc.
SMOOTH MOVES: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Smooth Moves, Inc.
dba Move 1 Relocation Services
46 Northfield Avenue
Edison, NJ 08837
Bankruptcy Case No.: 06-20080
Type of Business: The Debtor provides moving services.
Chapter 11 Petition Date: October 17, 2006
Court: District of New Jersey (Trenton)
Judge: Raymond T. Lyons Jr.
Debtor's Counsel: Larry Lesnik, Esq.
Ravin Greenberg PC
101 Eisenhower Parkway
Roseland, NJ 07068
Tel: (973) 226-1500
Total Assets: $1 Million to $100 Million
Total Debts: $1 Million to $100 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
TRFCA $204,310
38004 Network Place
Chicago, IL 60673
Therese Mauch $119,423
415 Fox Chase Road
Chester, NJ 07930
Federal Business Centers $99,631
300 Raritan Center Parkway
Edison, NJ 08818
Movers Specialty Services $57,923
Pasha Group $51,835
Ross, Anglim, Angelini & Co. $51,760
Fidelity Paper & Supply Co. $43,225
Davedana Trucking Services $35,111
Teamsters Local 814 Welfare Fund $32,556
Empire State Regional Council $32,217
Healthcare Relocation System $30,368
Installation Plus $26,966
Alex Wolf & Associates $25,900
Collins Brothers $23,869
Eastern Seaboard Packaging $22,982
Beltmann Group, Inc. $20,528
Cooper's Truck Services $18,391
A-1 Freeman Moving & Storage $11,992
Greater Syracuse Moving & Storage $10,812
Dave's Office Installations $9,995
SOUTHERN UNION: Moody's Places Ba1 Rating on $600MM Junior Notes
----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 credit rating to Southern
Union Company's $600 Million Series A Junior Subordinated Notes
Due 2066 with negative outlook. This rating is one notch below
the Baa3 senior unsecured debt rating of the company. This issue
is subordinated to all senior indebtedness and capital lease
obligations of the company and receives a Basket "B" treatment for
purposes of Moody's on balance sheet debt treatment.
Southern Union Company is a diversified energy company engaged
primarily in the business of gathering, processing,
transportation, storage, and distribution of natural gas in the
United States. It maintains its headquarters in Houston, Texas.
Issuer: Southern Union Company
Assignments:
-- $600 million Junior Subordinated Regular Bond,
assigned Ba1
SPEEDWAY MOTORSPORTS: 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 Gaming, Lodging & Leisure sector, the rating
agency confirmed its Ba1 Corporate Family Rating for Speedway
Motorsports, Inc.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these loans and
bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Guaranteed Senior
Secured Revolver
R/C Due May 16, 2008 Ba1 Baa2 LGD2 20%
6.75% Guaranteed
Senior Subordinate
Notes Due
June 1, 2013 Ba2 Ba2 LGD5 75%
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 Concord, North Carolina, Speedway Motorsports, Inc. --
http://www.speedwaymotorsports.com/-- promotes, markets, and
sponsors motorsports activities in the U.S. It owns and operates
Atlanta Motor Speedway, Bristol Motor Speedway, Infineon Raceway,
Las Vegas Motor Speedway, Lowe's Motor Speedway, and Texas Motor
Speedway. The company also provides event souvenir merchandising
services, food, beverage, and hospitality catering services, and
radio programming, production, and distribution services.
STATION CASINOS: 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 Gaming, Lodging & Leisure sector, the rating
agency confirmed its Ba2 Corporate Family Rating for Station
Casinos, Inc.
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
---------- ------- ------- ------ ----------
6% Senior Notes Ba3 Ba2 LGD3 48%
7 3/4% Senior Notes Ba3 Ba2 LGD3 48%
6 1/2% Senior
Subordinated Notes B1 Ba3 LGD5 82%
6 7/8% Senior
Subordinated Notes B1 Ba3 LGD5 82%
6 5/8% Senior
Subordinated Notes B1 Ba3 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%).
Station Casinos, Inc. (NYSE:STN) -- http://www.stationcasinos.com/
-- is a provides gaming and entertainment to the residents of Las
Vegas, Nevada. Station owns and operates Palace Station Hotel &
Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel &
Casino, Wildfire Casino and Wild Wild West Gambling Hall & Hotel
in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and
Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset
Station Hotel & Casino, Fiesta Henderson Casino Hotel, Magic Star
Casino and Gold Rush Casino in Henderson, Nevada. Station also
owns a 50% interest in Green Valley Ranch Station Casino, Barley's
Casino & Brewing Company and The Greens in Henderson, Nevada and a
6.7% interest in the Palms Casino Resort in Las Vegas, Nevada. In
addition, Station manages Thunder Valley Casino near Sacramento,
California on behalf of the United Auburn Indian Community.
STATSURE DIAGNOSTIC: To Restate Financial Statements
----------------------------------------------------
StatSure Diagnostic Systems, Inc., disclosed that the Audit
Committee of its Board of Directors, on Oct. 12, 2006, concluded
that based upon the recommendation of management and its
independent auditors, the Company will restate its previously
issued financial statements.
The restatement includes financial statement for the quarters
ended March 31, 2005, June 30, 2005, and Sept. 30, 2005, and for
the year ended Dec. 31, 2005, included in the Company's Annual
Report on Form 10-KSB, and for the quarters ended March 31 and
June 30, 2006. The Company's previously issued financial
statements for these periods should therefore no longer be relied
upon.
The Company also disclosed that in the course of a routine
Securities and Exchange Commission review of the Company's prior
periodic filings, the SEC issued a comment letter dated
Oct. 4, 2006, alerting the Company to a possible incorrect
application of certain accounting principles.
The conclusion to restate its financial statements arose from the
incorrect application of generally accepted accounting principles
related to the beneficial conversion feature on the issuance of
the convertible debt by the Company, and revised calculations of
the Employee Stock Options pursuant to FIN 28: Accounting for
Stock Appreciation Rights and Other Variable Stock Options or
Award Plans.
The Company further says that the restatement is not expected to
have any impact on its statements of cash flows.
Based in Framingham, Massachusetts, StatSure Diagnostic Systems,
Inc. (OTC BB: SSUR) -- http://www.statsurediagnostics.com/--
develops, manufactures, and markets oral fluid collection devices
for the drugs of abuse market and rapid immunoassays for use in
the detection of infectious diseases.
Going Concern Doubt
Lazar Levine & Felix LLP expressed substantial doubt about
Statsure Diagnostic Systems, Inc.'s ability to continue as a going
concern after it audited the Company's financial statements for
the years ended Dec. 31, 2005, and Dec. 31, 2004. The auditing
firm pointed to the Company's recurring losses from operations,
has negative working capital and has a net capital deficiency.
As reported in the Troubled Company Reporter on Oct. 2, 2006 at
June 30, 2006, the Company's balance sheet showed $2.3 million in
total assets and $11.6 million in total liabilities, resulting in
a $9.3 million stockholders' deficit.
SYMPHONY BUILDERS: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Symphony Builders LLC
2151 East Broadway Road, Suite 103
Tempe, AZ 85282
Bankruptcy Case No.: 06-03398
Chapter 11 Petition Date: October 18, 2006
Court: District of Arizona (Phoenix)
Judge: Sarah Sharer Curley
Debtor's Counsel: Mark C. Hudson, Esq.
Schian Walker, PLC
3550 North Central Avenue, Suite 1500
Phoenix, AZ 85012-2188
Tel: (602) 285-4597
Fax: (602) 297-9633
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
TOWER RECORDS: Court Approves O'Melveny & Myers as Co-Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave MTS
Inc. dba Tower Records and its debtor-affiliates permission
to employ O'Melveny & Myers LLP as their bankruptcy co-counsel.
As reported on the Troubled Company Reporter on Aug. 31, 2006,
O'Melveny & Myers is expected to:
a. advise the Debtors generally regarding matters of
bankruptcy law in connection with their chapter 11 cases;
b. advise the Debtors of the requirement of the Bankruptcy
Code, the Federal Rules of Bankruptcy Procedure,
applicable local bankruptcy rules pertaining to the
administration of their cases and the U.S. Trustee
Guidelines related to the daily operation of their
business and the administration of the estates;
c. prepare motions, applications, answers, proposed orders,
reports and papers in connection with the administration
of the estates;
d. negotiate with creditors, prepare and seek confirmation of
a plan of reorganization and related documents, and assist
the Debtors with implementation of the plan;
e. assist the Debtors in the analysis, negotiation and
disposition of certain estate assets for the benefit of
the estates and their creditors;
f. advise the Debtors regarding the general corporate and
securities matters as well as bankruptcy related
employment and litigation issues; and
g. render other necessary advice and services as the Debtors
may require in connection with their cases.
Stephen H. Warren, Esq., a partner at O'Melveny & Myers, told
the Court that he bills $675 per hour. The firm's other
professionals bill:
Professional Hourly Rate
------------ -----------
Ben H. Logan, Esq. $735
Evan Jones, Esq. $705
Victoria A. Graff, Esq. $510
Karen Rinehart, Esq. $505
Emily R. Culler, Esq. $420
Hilary S. Reed, Esq. $340
Mr. Warren assured the Court that his firm is disinterested
pursuant to Section 101(14) of the Bankruptcy Code.
Mr. Warren can be reached at:
Stephen H. Warren, Esq.
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071
Tel: (213) 430-6000
Fax: (213) 430-6407
http://www.omm.com/
Headquartered in West Sacramento, California, MTS, Inc., dba Tower
Records -- http://www.towerrecords.com/-- is a retailer of music
in the U.S., with nearly 100 company-owned music, book, and video
stores. The Company and seven of its affiliates filed for chapter
11 protection on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886
through 06-10893). When the Debtors filed for protection from
their creditors, they estimated assets and debts of more than $100
million.
The Company and its affiliates previously filed for chapter 11
protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No.
04-10394). The Court confirmed the plan on March 15, 2004.
TOWER RECORDS: Court Okays Houlihan Lokey as Investment Banker
--------------------------------------------------------------
The Honorable Brendan Linehan Shannon of the U.S. Bankruptcy Court
for the District of Delaware authorized MTS Inc. dba Tower Records
and its debtor-affiliates to employ Houlihan Lokey Howard & Zukin
Capital Inc. as their investment banker.
As reported in the Troubled Company Reporter on Sept. 8, 2006,
Houlihan Lokey will:
(a) solicit, coordinate, and evaluate indications of interest
regarding a sale of the Debtors;
(b) facilitate due diligence requests by interested parties;
(c) assist the Debtors in communications and negotiations with
its constituents, including creditors, vendors,
shareholders, and other parties-in-interest in connection
with a sale of the Debtors; and
(d) conduct and facilitate the auction process to be run
pursuant to Section 363 of the Bankruptcy Code.
The Debtors told the Court that it will pay Houlihan Lokey a
transaction fee, upon closing or consummation of a sale, equal to
2% of the aggregate gross consideration of up to $85 million, plus
4% of incremental aggregate gross consideration from $85 million
to $120 million, plus 6% aggregate gross consideration in excess
of $120 million, less $488,000.
To the best of the Debtors' knowledge, the firm is disinterested
pursuant to Section 101(14) of the Bankruptcy Code.
About Tower Records
Headquartered in West Sacramento, California, MTS, Inc., dba Tower
Records -- http://www.towerrecords.com/-- is a retailer of music
in the U.S., with nearly 100 company-owned music, book, and video
stores. The Company and its affiliates previously filed for
chapter 11 protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case
No. 04-10394). The Court confirmed the Debtors' plan on March 15,
2004.
The Company and seven of its affiliates filed their second
voluntary chapter 11 petition on Aug. 20, 2006 (Bankr. D. Del.
Case Nos. 06-10886 through 06-10893). Richards, Layton & Finger,
P.A. and O'Melveny & Myers LLP represent the Debtors. The
Official Committee of Unsecured Creditors is represented by
McGuirewoods LLP and Cozen O'Connor. When the Debtors filed for
protection from their creditors, they estimated assets and debts
of more than $100 million. The Debtors' exclusive period to file
a chapter 11 plan expires on Dec. 18, 2006.
TOWER RECORDS: Court Okays Richards Layton as Co-Counsel
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware MTS Inc.
dba Tower Records, and its debtor-affiliates permission to employ
Richards, Layton & Finger, P.A., as their bankruptcy co-counsel.
The Debtors told the Court that they wish to employ Richards
Layton under an evergreen retainer and that they will file a
separate request to employ O'Melveny & Myers LLP, as co-counsel.
As reported on the Troubled Company Reporter on Aug. 31, 2006,
Richards Layton is expected to:
a. advise the Debtors of their rights, powers and duties as
debtors and debtors-in-possession;
b. take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions on
the Debtors' behalf, the defense of any actions commenced
against the Debtors, the negotiation of disputes in
which the Debtors are involved, and the preparation of
objections to claims filed against the Debtors' estates;
c. prepare on behalf of the Debtors all necessary motions,
applications, answers, orders, reports and papers in
connection with the administration of the Debtors'
estates; and
d. perform all other necessary legal services in connection
with the Debtors' bankruptcy proceedings.
Mark D. Collins, Esq., a director at Richards Layton, told the
Court that he bills $520 per hour. Mr. Collins disclosed that the
firm's other professionals bill:
Professional Hourly Rate
------------ -----------
Michael J. Merchant, Esq. $390
Jason M. Madron, Esq. $270
Ann Jerominski $165
The Debtors told the Court that they have paid the firm a $100,000
retainer.
Mr. Collins assured the Court that his firm is disinterested
pursuant to Section 101(14) of the Bankruptcy Code.
Mr. Collins can be reached at:
Mark D. Collins, Esq.
Richards, Layton & Finger, P.A.
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Tel: (302) 651-7700
Fax: (302) 651-7701
http://www.rlf.com/
Headquartered in West Sacramento, California, MTS, Inc., dba Tower
Records -- http://www.towerrecords.com/-- is a retailer of music
in the U.S., with nearly 100 company-owned music, book, and video
stores. The Company and seven of its affiliates filed for chapter
11 protection on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886
through 06-10893). When the Debtors filed for protection from
their creditors, they estimated assets and debts of more than $100
million.
The Company and its affiliates previously filed for chapter 11
protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No.
04-10394). The Court confirmed the plan on March 15, 2004.
TUNICA-BILOXI: 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 Gaming, Lodging & Leisure sector, the rating
agency held its B2 Corporate Family Rating for Tunica-Biloxi
Gaming Authority, and confirmed its B2 rating on the company's 9%
Senior Unsecured Notes. Additionally, Moody's assigned an LGD4
rating to those notes, suggesting noteholders will experience a
53% 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%).
TBGA, an unincorporated governmental agency and instrumentality of
the Tunica-Biloxi Tribe of Louisiana, was created in October 2005
to operate Paragon for the Tribe. The Tunica-Biloxi Tribe is one
of three federally recognized Native American tribes operating
gaming establishments in Louisiana.
TURNING STONE: 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 Gaming, Lodging & Leisure sector, the rating
agency revised its Corporate Family Rating for Turning Stone
Casino Resort Enterprise from Ba3 to Ba2, and confirmed its Ba3
rating on the company's 9.125% Senior Notes. In addition, Moody's
assigned an LGD4 rating to these notes, suggesting noteholders
will experience a 67% loss in the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Based in Verona, New York, Turning Stone Casino Resort Enterprise
-- http://www.turningstone.com/-- is a casino and resort operated
by the Oneida Indian Nation, a federally recognized Indian nation
in Central New York. The company features a 125,000 square-foot
casino and 285-room hotel. Their casino has table games including
poker, blackjack, craps and baccarat. There are more than 2,380
video gaming machines that require a prepaid card for use.
UNITED CUTLERY: Taps Gentry Tipton as Bankruptcy Counsel
--------------------------------------------------------
United Cutlery Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Eastern District of Tennessee for
permission to employ Gentry, Tipton & McLemore, P.C., as its
bankruptcy counsel.
Gentry Tipton will provide the Debtors with legal services in
connection with their bankruptcy proceedings.
The Debtors disclose that its has paid the firm a $50,070
retainer.
Maurice K. Guinn, Esq., attorney at Gentry Tipton, assures the
Court that his firm does not hold any interest adverse to the
Debtors or their estates
Mr. Guinn can be reached at:
Maurice K. Guinn, Esq.
Gentry, Tipton & McLemore P.C.
P.O. Box 1990
Knoxville, TN 37901
Tel: (865) 525-5300
Fax: (865) 523-7315
http://www.tennlaw.com/
Headquartered in Sevierville, Tennessee, United Cutlery Corp. --
http://www.unitedcutlery.com/-- manufactures hunting, camping,
fishing, military, utility, collectible, and fantasy knives. The
Debtors also market fantasy-based swords, weapons and armor under
license from movie studios. The Company and two of its affiliates
filed for chapter 11 protection on Oct. 2, 2006 (Bankr. E.D. Tenn.
Case No. 06-50884). When the Debtors filed for protection from
their creditors, they listed estimated assets and debts between
$10 million and $50 million. The Debtors' exclusive period to
file a chapter 11 plan expires on Jan. 30, 2007.
UNITEDHEALTH GROUP: Inks $7.5 Billion Credit Agreement
------------------------------------------------------
UnitedHealth Group Incorporated disclosed in a regulatory filing
with the U.S. Securities and Exchange Commission that on Oct. 16,
2006, it entered into a Credit Agreement with the lenders party
thereto, JP Morgan Chase Bank, N.A., as Administrative Agent, and
Citibank, N.A. and Bank of America, N.A., as Co-Syndication
Agents, providing for a $7.5 billion 364-Day Revolving Credit
Facility.
J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and
Banc of America Securities LLC are acting as Joint Lead Arrangers
and Joint Bookrunners.
The Company says that the Facility is intended to insure the its
immediate and continued access to additional liquidity, if
necessary, and to enhance its position in any litigation that is
commenced with respect to the Company's outstanding debt
securities. The Facility is available for working capital
purposes as well as to pay or repay any outstanding borrowings of
the Company.
As of the date hereof, no amounts are outstanding under the
Facility. Interest rates on outstanding borrowings under the
Facility will be determined by reference to LIBOR, with margins
determined based on credit ratings, or to an alternate base rate,
as described in the Facility. The Facility contains various
representations, warranties, terms, conditions and covenants
customary for financings of this type.
A full-text copy of the Credit Agreement dated Oct. 16, 2006, is
available for free at http://ResearchArchives.com/t/s?13a8
Default
The Company had disclosed on Aug. 28, 2006, that it received a
purported notice of default from persons claiming to hold certain
of its debt securities alleging a violation of the Company's
indenture governing its debt securities. The noticed was spurred
by the Company's not filing its quarterly report on Form 10-Q for
the quarter ended June 30, 2006.
The Company believes it is not in default and intends to defend
itself vigorously. The Company's indenture requires it to provide
to the trustee copies of the reports the Company is required to
file with the SEC, such as its quarterly reports, within 15 days
of filing such reports with the SEC.
About UnitedHealth Group
UnitedHealth Group Inc. -- http://www.unitedhealthgroup.com/-- is
a diversified health and well-being company dedicated to making
health care work better. Headquartered in Minneapolis, Minnesota,
the Company offers a broad spectrum of products and services
through six operating businesses: UnitedHealthcare, Ovations,
AmeriChoice, Uniprise, Specialized Care Services and Ingenix.
Through its family of businesses, UnitedHealth Group serves
approximately 70 million individuals nationwide.
US AIRWAYS: Operations EVP Al Crellin Resigns Effective Nov. 15
---------------------------------------------------------------
US Airways disclosed Monday that Executive Vice President,
Operations Al Crellin has elected to leave the company, effective
Nov. 15, 2006.
Mr. Crellin, 59, oversees the airline's flight operations,
maintenance and safety departments. He was instrumental in
establishing the airline's operating certificate merger plan,
which is on track for completion in the first half of 2007.
Crellin began his airline career at Pacific Southwest Airlines in
1971. He rose through the ranks at PSA and was that airline's
vice president of customer service when it was acquired by US
Airways in 1988. At US Airways, he held a series of operations
roles at the executive level, culminating in executive vice
president, operations in 2002. He retained that title at the new
US Airways after its merger with America West Airlines in
September 2005.
Chairman and CEO Doug Parker said, "Al has dedicated 35 years to
our airline and we are extremely grateful for his leadership and
professionalism. In the past year, he has done a fantastic job of
leading the process to merge US Airways and America West onto a
single operating certificate. His experience and operational
knowledge have also ensured we have an extremely capable team in
place to continue the initiatives he put into place. His
contributions to our airline are vast, and we wish him the best in
his new endeavors."
With the announcement, the airline's president, Scott Kirby, will
assume overall responsibility for the flight operations,
maintenance and safety functions. The maintenance department will
continue to report to Senior Vice President, Technical Operations
Hal Heule, who will now report to Kirby. In addition, the safety
and regulatory compliance department will now report to Heule.
The flight operations and inflight departments will continue to
report to Senior Vice President, Flight Operations/Inflight Ed
Bular, who will now also report to Kirby. Chief Financial Officer
Derek Kerr, who prior to the announcement reported to MR. Kirby,
will now report directly to Chairman and CEO Doug Parker.
About US Airways
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of US Airways, Inc.,
Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines,
Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales,
Inc., Material Services Company, Inc., and Airways Assurance
Limited, LLC.
The Company and its affiliates filed for chapter 11 protection on
Aug. 11, 2002 (Bank. E.D. Va. Case No. 02-83984). Under a chapter
11 plan declared effective on March 31, 2003, USAir emerged from
bankruptcy with the Retirement Systems of Alabama taking a 40%
equity stake in the deleveraged carrier in exchange for $240
million infusion of new capital.
US Airways and its subsidiaries filed their second chapter 11
petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J.
Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken,
Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent
the Debtors in their restructuring efforts. In the Company's
second bankruptcy filing, it listed $8,805,972,000 in total assets
and $8,702,437,000 in total debts. The Debtors' chapter 11 plan
for its second bankruptcy filing became effective on Sept. 27,
2005. The Debtors completed their merger with America West on the
same date.
On March 31, 2006, the Court entered a final decree closing the
chapter 11 cases of four affiliates. Only US Airways, Inc.'s
chapter 11 case remains open.
US Airways (NYSE: LCC) and America West's merger created the fifth
largest domestic airline employing nearly 35,000 aviation
professionals. US Airways, US Airways Shuttle and US Airways
Express operate approximately 3,800 flights per day and serve more
than 230 communities in the U.S., Canada, Europe, the Caribbean
and Latin America. US Airways is a member of Star Alliance, which
provides connections for our customers to 841 destinations in 157
countries worldwide.
* * *
As reported in the Troubled Company Reporter on June 14, 2006,
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit and other ratings on US Airways Group Inc., and revised the
outlook to stable from negative.
VAIL RESORTS: 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 Gaming, Lodging & Leisure sector, the rating
agency confirmed its Ba3 Corporate Family Rating for Vail Resorts,
Inc., and revised its B2 rating to B1 on the company's $390
million, 6.75% Senior Subordinated Notes Due 2014. Additionally,
Moody's assigned an LGD5 rating to these debentures, suggesting
noteholders will experience a 75% 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 Vail, Colorado, Vail Resorts, Inc --
http://www.vailresorts.com/-- operates mountain resorts
throughout the U.S. The company offers a complement of
recreational activities as well as planning, development, and
construction of real estate properties.
VALENTIS INC: Ernst & Young Raises Going Concern Doubt
------------------------------------------------------
Auditors working for Ernst & Young LLP in Palo Alto, Calif.,
raised substantial doubt about Valentis, Inc.'s ability to
continue as a going concern after the firm audited the Company's
consolidated financial statements for the year ended June 30,
2006, and 2005. The auditors pointed to the Company's losses
since inception, accumulated deficit, and need for additional
financial resources to fund its operations at least through
June 30, 2007.
For the year ended June 30, 2006, Valentis reported a net loss of
$15.3 million on revenue of $727,000, compared with a net loss of
$11.1 million on revenue of $2.2 million for fiscal year ended
June 30, 2005.
For the quarter ended June 30, 2006, Valentis recorded a net loss
of $3 million on revenue of $140,000 compared with a net loss of
$2.6 million on revenue of $557,000, for the quarter ended
June 30, 2005.
On June 30, 2006, Valentis had $4.3 million in cash, cash
equivalents and short-term investments compared with $7.9 million
on March 31, 2006, and $12.5 million on June 30, 2005. The
decreases of $3.6 million and $8.2 million in cash, cash
equivalents and short-term investments balances for the quarter
and the year, respectively, reflect a $5.3 million financing
completed in March 2006 offset by spending to fund the company's
operations.
Costs of contract research consisted of costs incurred for
contract research on the manufacturing of biological materials for
other companies.
For the fiscal years ended June 30, 2006, and 2005, costs of
contract research were $93,000 and $521,000, respectively. For
the quarter ended June 30, 2006, and 2005, costs of contract
research were $17,000 and $293,000, respectively.
Research and development expenses for the fiscal year ended
June 30, 2006, increased to $11.2 million, from $9.2 million for
fiscal 2005. The increase was primarily attributable to increased
expenses related to VLTS 934 Phase IIb clinical trial and non-cash
stock-based compensation expenses recorded in the year ended
June 30, 2006.
Research and development expenses for the quarter ended June 30,
2006, decreased to $2.0 million, from $2.1 million for the
corresponding period in fiscal 2005. The decrease was primarily
attributable to decreased clinical trial expenses offset by non-
cash stock-based compensation expenses recorded in the quarter
ended June 30, 2006.
General and administrative expenses for the fiscal year ended
June 30, 2006, increased to $5.0 million from $3.8 million in
fiscal 2005. General and administrative expenses for the quarter
ended June 30, 2006, increased to $1.2 million from $750,000 in
the corresponding period in fiscal 2005. The increases were
attributable primarily to non-cash stock-based compensation
expenses recorded in the year and quarter ended June 30, 2006.
July 2006 Clinical Trial Results for VLTS 934
In July 2006, Valentis announced that no statistically significant
difference was seen in the primary endpoint or any of the
secondary endpoints in its Phase IIb clinical trial of VLTS 934 in
PAD. Valentis has no plans for further development of VLTS 934,
has ceased research and development activities on all of its
remaining potential products and technologies and is assessing
strategic opportunities, which include the sale or merger of the
business, the sale of certain assets or other actions.
A full-text copy of the Company annual report is available for
free at http://ResearchArchives.com/t/s?1396
Headquartered in Burlingame California, Valentis, Inc. --
http://www.valentis.com/-- is a clinical-stage biotechnology
company engaged in the development of innovative products for
peripheral arterial disease. PAD is due to chronic inflammation
of the blood vessels of the legs leading to the formation of
plaque that obstructs blood flow. Valentis was formed from the
merger of Megabios Corp. and GeneMedicine, Inc., in March 1999.
In August 1999, the Company acquired PolyMASC Pharmaceuticals plc
as its wholly owned subsidiary. Valentis is incorporated in the
State of Delaware.
WEBB INDUSTRIES: Case Summary & 36 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Webb Industries, Inc.
495 Park Road
Frierson, LA 71027
Tel: (318) 872-5423
Bankruptcy Case No.: 06-12209
Debtor-affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Kenneth W. Webb 06-12210
Chapter 11 Petition Date: October 18, 2006
Court: Western District of Louisiana (Shreveport)
Judge: Stephen V. Callaway
Debtor's Counsel: Richard J. Reynolds, Esq.
Shuey Smith LLC
401 Edwards Street, 13th Floor
Shreveport, LA 71101
Tel: (318) 221-8671
Fax: (318) 222-4320
Estimated Assets Estimated Debts
---------------- ---------------
Webb Industries, Inc. $1 Million to Less than $10,000
$100 Million
Kenneth W. Webb $100,000 to $1 Million to
$1 Million $100 Million
A. Webb Industries, Inc.'s 17 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Robert Paulk $25,000
P.O. Box 119
Jonesville, TX 75659
Marice Conley $10,000
7204 Old River Drive
Shreveport, LA 71105
Lasyone Insurance Agency $8,988
P.O. Box 1395
GMAC $6,775
P.O. Box 78369
Phoenix, AZ 85062-8369
DeSoto Parish Sales $4,262
P.O. Box 927
Mansfield, LA 71052
Williams Truck Parts, Inc. $1,984
Oliver Van Horn $1,257
J&L Industry Supply $1,199
Valley Electric $572
Orchard Bank $556
Mid-South Metals $481
Bankcard Services $452
Hendrix $445
Bell South $410
H&E Equipment $88
Waterworks District $47
Air Gas Mid-South $31
B. Kenneth W. Webb's 19 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
First Louisiana Bank $100,000
P.O. Box 52079
Shreveoport, LA 71135
Citibank South Dakota $76,444
[no address]
Internal Revenue Service $59,659
3007 Knight Street, Room 100
Shreveport, LA 71105
Robert Paulk $25,000
P.O. Box 119
Jonesville, TX 75659
Marice Conley $10,000
7204 Old River Drive
Shreveport, LA 71105
Lasyone Insurance Agency $8,988
Louisiana Department of Revenue $7,348
GMAC $6,775
DeSoto Parish Sales $4,262
Williams Truck Parts, Inc. $1,984
Oliver Van Horn $1,257
J & L Industry Supply $1,199
Louisiana Department of Labor $656
Valley Electric $572
Orchard Bank $556
Mid-South Metals $481
Bankcard Services $452
Hendrix $445
Bell South $410
WHEELING ISLAND: 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 Gaming, Lodging & Leisure sector, the rating
agency confirmed Wheeling Island Gaming, Inc.'s B2 Corporate
Family Rating, and held its B3 rating on the company's 10.125%
Senior Notes. In addition, Moody's assigned an LGD4 rating to
these debentures, suggesting noteholders will experience a 60%
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%).
Wheeling Island Gaming, Inc. -- http://www.wheelingisland.com/--
owns and operates Wheeling Island Racetrack & Gaming Center, a
gaming and entertainment complex located in Wheeling, West
Virginia. It is the largest operation of Delaware North Companies
Gaming & Entertainment, Inc., a wholly owned subsidiary of
Delaware North Companies, Inc.
WICKES INC: Wants to Hire Vanek Vickers as Special Counsel
----------------------------------------------------------
Wickes Inc. asks the U.S. Bankruptcy Court for the Northern
District of Illinois, Eastern Division, for permission to employ
Vanek, Vickers & Masini, P.C., as its special counsel.
The firm will perform all legal services in connection with the
Debtor's federal and state antitrust claims against certain
manufacturers of oriented strand board for their agreements to
fix, raise, maintain and stabilize OSB prices.
Specifically, Vanek Vickers will:
(1) prepare all pleadings, including the complaint and any
subsequent amended complaints;
(2) draft and respond to discovery requests, including
admissions, interrogatories and requests for production of
documents;
(3) conduct depositions;
(4) conduct settlement discussions;
(5) try any cases associated with the Antitrust Claims if
necessary; and
(6) address any appeals if necessary.
Joseph M. Vanek, Esq., a Vanek Vickers member, discloses that the
firm will charge for its professional servics on a 35% contingent
fee basis of any recovery the firm achieves on behalf of the
Debtor in connection with the Antitrust claims.
Mr. Vanek assures the Court that his firm does not hold nor
represent any interest adverse to the Debtor's estate.
Headquartered in Vernon Hills, Illinois, Wickes Inc. --
http://www.wickes.com/-- is a retailer and manufacturer of
building materials, catering to residential and commercial
building professionals, repairs and remodeling contractors and
project do-it-yourself consumers. Wickes, Inc., and GLC Division,
Inc., filed for chapter 11 protection on January 20, 2004 (Bankr.
N.D. Ill. Case No. 04-02221). The Court dismissed GLC's case on
Feb. 17, 2005. Richard M. Bendix Jr., Esq., at Schwartz, Cooper,
Greenberger & Krauss and Steven J. Christenholz, Esq., David N.
Missner, Esq., and Deborah M. Gutfeld, Esq., at DLA Piper Rudnick
Gray Cary US LLP represent the Debtors in their restructuring
efforts. Sonnenschein Nath & Rosenthal LLP serves as counsel for
the Official Committee of Unsecured Creditors. When the Debtors
filed for protection from their creditors, it listed $155,453,000
in total assets and $168,199,000 in total debts.
WINN-DIXIE: Wants Court to Approve CEO Peter Lynch's Contract
-------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek
authorization from the U.S. Bankruptcy Court for the Middle
District of Florida to enter into an employment agreement with
their current president and chief executive officer Peter L.
Lynch.
The Debtors value the leadership of Mr. Lynch, and believe that
their prospects for success following emergence from bankruptcy
protection depend significantly on his continued leadership.
The Debtors also ask the Court to approve the employment
agreement's related Restricted Stock Unit Award Agreement, Non-
Qualified Stock Option Award Agreement, and Winn-Dixie Stores,
Inc. 2006 Deferred Compensation Plan.
The Employment Contract is the result of trilateral negotiations
among the Debtors, the Official Committee of Unsecured Creditors,
and Mr. Lynch, D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, in New York, relates.
The Employment Contract provides the terms for Mr. Lynch's
continued employment with the Debtors following the effective
date of their Joint Plan of Reorganization. Material terms of
the Employment Contract include:
-- Mr. Lynch will not only serve as the Debtors' president
and CEO, but also as the chairman of Winn-Dixie Stores'
board of directors;
-- The term of Mr. Lynch's employment will commence on the
Effective Date and will continue until June 30, 2010,
unless terminated earlier. Beginning July 1, 2010, unless
terminated earlier, the Employment Contract will
automatically be renewed and extended for additional one-
year terms unless Mr. Lynch or Winn-Dixie objects;
-- Mr. Lynch will receive an annual base salary of
$1,250,000, which will be paid in accordance with the
Debtors' then prevailing payroll practices. At the sole
discretion of the Board, the Base Salary may be increased
based on Mr. Lynch's performance;
-- For each fiscal year ending during the term of his
employment, Mr. Lynch will be eligible to receive an
annual bonus if he achieves the target performance goals
established for each year by the Board's Compensation
Committee. In no event will Mr. Lynch's bonus exceed 150%
of the Base Salary;
-- In addition to any Bonus to which he is entitled, the
Debtors will pay Mr. Lynch $2,000,000, less all applicable
withholding taxes, as an additional bonus for fiscal year
2007 following the Effective Date;
-- Mr. Lynch will be granted Winn-Dixie Stores stock options,
deferred compensation plan, and the company's restricted
stock, and other long-term incentive programs; and
-- The Debtors agree to indemnify Mr. Lynch in the event that
he is made party to any action or proceeding by reason
that, after the Effective Date, he is or was a Winn-Dixie
director, officer or employee.
A full-text copy of Mr. Lynch's Employment Agreement is available
for free at http://ResearchArchives.com/t/s?1385
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates 527 stores in Florida,
Alabama, Louisiana, Georgia, and Mississippi. The Company,
along with 23 of its U.S. subsidiaries, filed for chapter 11
protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063,
transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos.
05-03817 through 05-03840). D.J. Baker, Esq., at Skadden
Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders,
Esq., and Brian C. Walsh, Esq., at King & Spalding LLP,
represent the Debtors in their restructuring efforts.
Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 56; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:
In re Outreach Word Academy
Bankr. S.D. Tex. Case No. 06-60156
Chapter 11 Petition filed October 10, 2006
See http://bankrupt.com/misc/txsb06-60156.pdf
In re Luminite Signs, LLC
Bankr. D. Ore. Case No. 06-33163
Chapter 11 Petition filed October 11, 2006
See http://bankrupt.com/misc/orb06-33163.pdf
In re NCW, Inc.
Bankr. M.D. Pa. Case No. 06-02264
Chapter 11 Petition filed October 11, 2006
See http://bankrupt.com/misc/pamb06-02264.pdf
In re Schwarck Quarries, Inc.
Bankr. D. Nebr. Case No. 06-41348
Chapter 11 Petition filed October 11, 2006
See http://bankrupt.com/misc/neb06-41348.pdf
In re Staddleman's Diamond Gallery, Inc.
Bankr. E.D. Calif. Case No. 06-24095
Chapter 11 Petition filed October 11, 2006
See http://bankrupt.com/misc/caeb06-24095.pdf
In re Carl H. Mead, Sr.
Bankr. W.D. Wash. Case No. 06-13549
Chapter 11 Petition filed October 12, 2006
See http://bankrupt.com/misc/wawb06-13549.pdf
In re Facilities Maintenance Experts
Bankr. W.D. Tenn. Case No. 06-28335
Chapter 11 Petition filed October 12, 2006
See http://bankrupt.com/misc/tnwb06-28335.pdf
In re Fred Albert Dieterich
Bankr. N.D. Ala. Case No. 06-82119
Chapter 11 Petition filed October 12, 2006
See http://bankrupt.com/misc/alnb06-82119.pdf
In re Other Coast LLC
Bankr. W.D. Wash. Case No. 06-13539
Chapter 11 Petition filed October 12, 2006
See http://bankrupt.com/misc/wawb06-13539.pdf
In re Brunswick Development LLC
Bankr. D. Md. Case No. 06-16388
Chapter 11 Petition filed October 15, 2006
See http://bankrupt.com/misc/mdb06-16388.pdf
In re Hampton Seafarer Inn, Inc.
Bankr. D. N.H. Case No. 06-11363
Chapter 11 Petition filed October 16, 2006
See http://bankrupt.com/misc/nhb06-11363.pdf
In re Miller Associates
Bankr. W.D. Pa. Case No. 06-25044
Chapter 11 Petition filed October 13, 2006
See http://bankrupt.com/misc/pawb06-25044.pdf
In re Robert James Robinson
Bankr. N.D. Ind. Case No. 06-11818
Chapter 11 Petition filed October 13, 2006
See http://bankrupt.com/misc/innb06-11818.pdf
In re Ronnie Anthony Rekowski
Bankr. W.D. Wis. Case No. 06-12555
Chapter 11 Petition filed October 13, 2006
See http://bankrupt.com/misc/wiwb06-12555.pdf
In re Breacya Washington Madry
Bankr. W.D. Ky. Case No. 06-32825
Chapter 11 Petition filed October 17, 2006
See http://bankrupt.com/misc/kywb06-32825.pdf
In re Firehouse Barbecue, Inc.
Bankr. D. Md. Case No. 06-16462
Chapter 11 Petition filed October 17, 2006
See http://bankrupt.com/misc/mdb06-16462.pdf
In re Frego & McReynolds Investments, Inc.
Bankr. M.D. Fla. Case No. 06-03243
Chapter 11 Petition filed October 17, 2006
See http://bankrupt.com/misc/flmb06-03243.pdf
In re The Total Woman Healthcare Center, P.C.
Bankr. M.D. Ga. Case No. 06-52000
Chapter 11 Petition filed October 17, 2006
See http://bankrupt.com/misc/gamb06-52000.pdf
In re Trich Van Nguyen
Bankr. W.D. La. Case No. 06-50897
Chapter 11 Petition filed October 17, 2006
See http://bankrupt.com/misc/lawb06-50897.pdf
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
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related conferences are encouraged. Send announcements to
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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.
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interest to troubled company professionals. All titles are
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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.
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