/raid1/www/Hosts/bankrupt/TCR_Public/061212.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, December 12, 2006, Vol. 10, No. 295
Headlines
ALIMENTATION COUCHE-TARD: Earns $74.7 Mil. in Period Ended Oct. 15
AMERICAN AXLE: Moody's Holds Corporate Family Rating at Ba3
CALPINE CORP: Court Approves Pacific Gas Settlement Agreement
CANADA MORTGAGE: Moody's Rates $2-Mil. Class F Certificates at B2
CAROLINA CARE: A.M. Best Cuts Rating and Says Outlook is Negative
CATHOLIC CHURCH: Tucson Tort Panel Wants $3 Million Distribution
CATHOLIC CHURCH: Spokane Taps Catholic Finance as Fin'l Consultant
CEP HOLDINGS: Hires McDonald Hopkins as Special Counsel
CHESAPEAKE ENERGY: $1-Bil. Equity Issue Cues S&P's Outlook Change
CIT RV: S&P Pares Rating on Class B Debt to BB- from BB+
CITIZENS COMMS: Avails of $150 Million CoBank Term Loan Facility
CITIZENS COMMS: Fitch Rates New $150-Mil. Senior Facility at BB
CLARION TECHNOLOGIES: Post $3.2 Million Loss in 2006 Third Quarter
COMM 2004: Moody's Holds B3 Rating on $3-Mil. Class O Certificate
COMPLETE RETREATS: Committee Wants Funds Paid to LPP Disgorged
COMPLETE RETREATS: Can Walk Away from 14 Contracts and Leases
CONSOLIDATED ENERGY: Reports $964,110 Equity Deficit at Sept. 30
DAIMLERCHRYSLER: Freightliner Will Lay Off 800 Employees
DANA CORP: Wants Excl. Plan-Filing Period Extended to Sept. 2007
DANA CORP: Selling Engine Products Biz to MAHLE GmbH for $157 Mil.
DELPHI CORP: Cadence Wants to Proceed with Patent Litigation
DELPHI CORP: Responds to Employees' Insurance Payment Plea
DELTA AIR: Comair Pilots Votes to Strike if Contract is Rejected
DELTA FUNDING: S&P Cuts Rating on Class M-2 Certs. to BB- from BBB
DOLE FOOD: Posts $56.1 Million Net Loss in Period Ended October 7
EDDIE BAUER: Opening New Store at Quinte Mall in Belleville
EQUITY INNS: Secured Debt Reduction Cues Moody's Positive Outlook
ESCO CORP: S&P Assigns B Rating on Proposed $275-Mil. Notes
FAIRCHILD SEMICONDUCTOR: Management Approves Restructuring Program
FERRELLGAS PARTNERS: Posts $29.5MM Net Loss in Fiscal 1st Quarter
FIRST WORLD: Games Committee Faces Bankruptcy
FORD MOTOR: S&P Holds Junk Rating on Proposed $4.5 Bil. Sr. Debt
GEORGIA-PACIFIC: S&P Rates Proposed $1-Billion Senior Notes at B
GEORGIA-PACIFIC: S&P Affirms BB- Rating on Sr. Secured Bank Loan
GLOBAL EMPIRE: Ch. 11 Trustee Wants Case Converted to Chapter 7
GRAHAM PACKAGING: Warren Knowlton Replaces Philip Yates as CEO
GRAHAM PACKAGING: Posts $15 Million Net Loss in 2006 Third Quarter
GRANITE BROADCASTING: Files for Chapter 11 Protection in New York
GRANITE BROADCASTING: Case Summary & 20 Largest Unsec. Creditors
HOLLINGER INC: Subsidiary Sells Toronto Corp. Office for $14 Mil.
HOMETOWN COMMERCIAL: S&P Places Low-B Ratings on $3.9MM of Debt
IMMUNE RESPONSE: Plans 1-for-100 Reverse Stock Split on Dec. 20
INDUSTRIAL ENTERPRISES: Hires G. Impellicceiri as Controller
INDUSTRIAL ENTERPRISES: De Joya Griffith to Serve as New Auditors
INT'L THOROUGHBRED: Case Summary & 82 Largest Unsecured Creditors
INTEGRAL VISION: Posts $661,000 Net Loss in Quarter Ended Sept. 30
INTERPUBLIC GROUP: Moody's Rates New $250-Mil. Notes at Ba3
INTERPUBLIC GROUP: S&P's B Rating Remains on Negative Watch
JOHN MANEELY: Moody's Cuts Corporate Family Rating to B2 from B1
JP MORGAN: Moody's Holds Low-B Ratings on $26 Mil. of Certificates
JP MORGAN: Moody's Junks Rating on $3-Mil. Class P Certificates
KEYSTONE AUTO: Weak Credit Metrics Cue Moody's Negative Outlook
LARRY'S MARKETS: Wants Bankruptcy Case Closed
LASALLE COMMERCIAL: Moody's Holds Low-B Ratings on 3 Cert. Classes
LIBERTY TAX: Sept. 30 Balance Sheet Upside-Down by $7.5 Million
MARCAL PAPER: Organizational Meeting Scheduled on December 18
MIRANT CORP: Selling Philippine Assets for $3.4 Billion
MORGAN STANLEY: S&P Holds Junk Rating on Class M Certificates
MUSICLAND HOLDING: H. Truesdell Files Affidavit in Support of Plan
MUSICLAND HOLDING: Wants Deluxe Media Settlement Pact Approved
NAVISITE INC: Oct. 31 Balance Sheet Upside-Down by $3.5 Million
NOMURA HOME: DBRS Rates $9.3 Million Class N4 Notes at B
NORTH AMERICAN: Moody's Lifts Corp. Family Rating to B2 from B3
ORBITAL SCIENCES: S&P Rates $143 Million Convertible Notes at B+
PEACE ARCH: Posts $4.1 Million Net Loss in Fiscal Year 2006
PERFORMANCE TRANSPORTATION: Gets Removal Period Interim Extension
PLATFORM LEARNING: Has Until January 17 to Decide in E&Y Lease
PRC LLC: Moody's Places First Time B2 Corporate Family Rating
PRIMUS TELECOM: Debt Impairment Cues Moody's to Junk Ratings
QUEBECOR WORLD: S&P Holds Corporate Credit Rating at B+
QUEBECOR WORLD: Moody's Junks Senior Subordinated Debt Rating
RAAC SERIES: Loan Loss Cues Moody's to Junk Rating on One Tranche
SHEARSON FINANCIAL: Earns $4.4 Million in 2006 Third Quarter
SITESTAR CORP: Earns $282,468 in 2006 Third Quarter Ended Sept. 30
STRUCTURED ASSET: Fitch Rates $19-Mil. Class B Certificate at BB+
STRUCTURED ASSET: Fitch Rates $11-Mil. Class B Certificates at BB+
TDS INVESTOR: Moody's Holds Corporate Family Rating at B2
TEMBEC INC: DBRS Confirms Sr. Unsecured Debentures' Rating at CCC
TERWIN MORTGAGE: Moody's Junks Rating on Class B-1 Certificates
TIMKEN CO: Sells Latrobe Steel to Watermill, Hicks for $215 Mil.
TRIMOL GROUP: Sept. 30 Balance Sheet Upside-Down by $571,000
ULICO CASUALTY: A.M. Best Upgrades Rating with Stable Outlook
UNITED HOSPITAL: Wants Until April 30 to File Chapter 11 Plan
UNIVERSAL PROPERTY: Posts $1.4 Million Loss in 2006 Third Quarter
US AIRWAYS: Pilots Express Grave Concerns on Planned Delta Merger
US TELEPACIFIC: Moody's Holds Corporate Family Rating at B3
UWINK INC.: Sept. 30 Balance Sheet Upside-Down by $3 Million
VALASSIS COMMS: Releases Pretrial Brief on ADVO Litigation
VIKING SYSTEMS: Sept. 30 Balance Sheet Upside-Down by $10.1 Mil.
WACHOVIA BANK: Moody's Holds Ba1 Rating on $7MM Class CS-2 Certs.
WCI COMMUNITIES: Unfavorable Trends Cue Moody's Negative Outlook
WISE METALS: S&P Lifts Corporate Credit Rating to CCC from CCC-
* District Judge Rules that Part of BAPCPA Violates 1st Amendment
* Large Companies with Insolvent Balance Sheets
*********
ALIMENTATION COUCHE-TARD: Earns $74.7 Mil. in Period Ended Oct. 15
------------------------------------------------------------------
Alimentation Couche-Tard Inc. reported results for the second
quarter and the first half of fiscal 2007 ended Oct. 15, 2006.
For the 12-week period ended Oct. 15, 2006, the company reported
net earnings of $74.7 million on $2.76 billion of revenues,
compared with net earnings of $55.5 million on $2.39 billion of
revenues for the 12-week period ended Oct. 9, 2005.
At Oct. 15, 2006, the company's balance sheet showed total assets
of $2.44 billion, $1.37 billion in total liabilities, and
$1.07 billion in total stockholders' equity.
"We achieved an excellent second quarter. We are pleased with our
results, with the implementation of our IMPACT program and with
our network developments, mainly driven by our acquisitions.
First, I would like to point to the sustained improvement in our
merchandise and service gross margins - which grew by 0.9% to
33.7% in the U.S. and by 1.4% to 35.0% in Canada, reflecting the
benefits of our IMPACT program and of good purchasing conditions.
"Same-store merchandise revenues were also satisfactory,
especially since last year we benefited from aggressive
promotional campaigns in some markets, much more favorable weather
conditions and an exceptional increase in revenues following the
hurricanes in Florida and Gulf Coast Region last year.
"As for motor fuel, in Canada, the sharp decline in retail pump
prices during the quarter led to a reduction in the second quarter
gross margin, whereas in the U.S., the motor fuel volume grew by
23.4%, reflecting the contribution of the stores acquired from
Spectrum and the success of selective pricing strategies in some
of our divisions. As for the U.S. motor fuel gross margin per
gallon, it increased substantially by 21.6% in the second quarter.
However, as we have already stated, the volatility in margins
tends to stabilize on an annual basis," indicated Alain Bouchard,
Chairman of the Board, President and Chief Executive Officer.
Couche-Tard's capital expenditures and acquisitions realized
during the last six-month period of the current year were mainly
financed using the company's excess cash. In the future, Couche-
Tard is confident that it will be able to finance these capital
expenditures and acquisitions through a combination of its cash
flows from operating activities, additional debt, monetization of
its real estate portfolio and, as a last resort, by share
issuance.
As at Oct. 15, 2006, $180.2 million was used under the revolving
operating credit and the effective interest was 5.88%. In
addition, CDN$1 million and $15.5 million were used for standby
letters of credit.
During the first six months of the current year, the cash used in
other activities is related to the variance in the company's non-
cash working capital, which results primarily from the significant
drop in accounts payable, due mainly to the seasonal nature of the
business, the increase in accounts receivable, offset by the
increase in income taxes payable.
Couche-Tard's major investments realized during this quarter were
the acquisitions of the Holland Oil, Close to Home and Stop-n-Save
stores. With respect to the first six-month period of fiscal
2007, these acquisitions are combined with the acquisition of the
Spectrum stores carried out in the first quarter of this fiscal
year. Capital expenditures are primarily related to the ongoing
implementation of the IMPACT program throughout the company's
network, new constructions, as well as the replacement of
equipment in some stores to enhance the offering of products and
services.
The second quarter was affected by the refinancing of the
company's credit facilities, which resulted in a net increase of
$15.2 million in its long-term debt due to its investments.
Couche-Tard also paid out $9 million in dividends.
Business Acquisitions
On Oct. 4, 2006, Couche-Tard finalized with Holland Oil Company,
the acquisition of a network of 24 stores operating under the
Stop-n-Save banner in the Monroe area of Louisiana, United States.
Of these 24 stores, the company will operate 11 and 13 will be
operated by independent store operators. These transactions were
carried out for a cash consideration of $103.7 million, including
inventories and related expenses.
Contractual Agreements
On Oct. 9, 2006, in order to manage its renewal risk for certain
leased stores, Couche-Tard committed towards two of its landlords
to acquire 52 properties on which the company is currently
operating an equivalent number of stores and for which the company
is committed under operating leases. The amount of the
transaction is approximated at $61 million.
On Oct. 5, 2006, Couche-Tard signed agreements with Shell Oil
Products US and its affiliate, Motiva Enterprises LLC, to acquire
a network of 236 stores operating under the Shell banner in the
regions of Baton Rouge, Denver, Memphis, Orlando, Tampa as well as
in Southwest Florida, Unites States. Of the 236 stores, 175 are
company-operated, 49 are operated by independent store operators
and 12 have a motor fuel supply agreement. If the transaction is
completed as expected in December 2006, Couche-Tard anticipates
that these stores will contribute to its operating income on an
annual basis. The transaction amount will be determined on
closing.
On Aug. 25, 2006, Couche-tard signed an agreement with Shell Oil
Products US to lease and operate 31 stores in the Chicago
Metropolitan Area, Illinois, United States. The 31 stores will be
re-imaged under Circle K banner and will continue to sell Shell
motor fuel.
Deployment of the IMPACT Program
During the second quarter, Couche-Tard implemented its IMPACT
program in 119 company-operated stores, bringing its annual total
to 158. As a result, 49.3% of its company-operated stores have
now been converted to its IMPACT program, which gives it
considerable flexibility for future internal growth.
New Credit Facility
On Sept. 22, 2006, the company entered into a new credit
agreement, replacing its secured senior term and revolving credit
facilities. The new credit agreement consists of a renewable
unsecured credit facility of a maximum amount of $500 million with
an initial term of five years that can be extended each year to
its initial five-year term at the request of the company and with
the consent of the lenders. In addition, the credit agreement
includes a clause that permits the company to increase the limit
by a maximum amount of $250 million, also with the lenders
consent.
Franchises and Licenses
During the second quarter, Couche-Tard was informed by SSP
Partners, owner of 318 stores operating under the Circle K banner
in Texas, of their decision not to renew their license agreement.
The parties could not agree on renewal terms. The current
agreement expires on Nov. 26, 2006. The impact on the company's
financial position and operating results will not be significant.
Dividends
On July 31, 2006, Couche-Tard paid out the dividend declared in
the fourth quarter of fiscal 2006. In addition, in line with the
company's dividend policy, the Board of Directors declared and
approved a quarterly dividend of CDN$0.025 per share for the first
quarter of 2007, which was paid on Sept. 18, 2006. With the aim
to maintain the return on investment to the shareholders, the
Board of Directors has adjusted upward the quarterly dividend to
CDN$0.03 per share from CDN$0.025 per share for Class A multiple
voting shares and for Class B subordinate voting shares and
approved its payment for Dec. 8, 2006.
Full-text copies of the company's financials are available for
free at http://ResearchArchives.com/t/s?1669
About Alimentation Couche-Tard Inc.
Headquartered in Laval, Quebec, Alimentation Couche-Tard Inc. --
http://www.couche-tard.com/-- is a Canadian convenience store.
In North America, Couche-Tard, which mainly operates under the
Couche-Tard, Mac's, and Circle K trademarks, is the third largest
convenience store operator and the second largest independent (not
integrated with a petroleum company) convenience store operator.
The company currently operates a network of 5,204 convenience
stores; 3,235 of which include motor fuel dispensing, located in
eight large geographic markets, including three in Canada covering
seven provinces and territories and five of which cover 23
American states. Approximately 38,000 people work at
Couche-Tard's executive offices and throughout the network in
North America.
* * *
As reported in the Troubled Company Reporter on Oct. 30, 2006,
Moody's Investors Service affirmed Alimentation Couche-Tard Inc.'s
Ba1 Corporate Family Rating and held its Ba1 probability-of-
default rating in connection with the rating agency's
implementation of its new Probability-of-Default and Loss-Given-
Default rating methodology.
AMERICAN AXLE: Moody's Holds Corporate Family Rating at Ba3
-----------------------------------------------------------
Moody's Investors Service confirmed American Axle & Manufacturing
Holdings Inc.'s Corporate Family Rating of Ba3 and affirmed
American Axle & Manufacturing, Inc.'s Speculative Grade Liquidity
rating of SGL-2.
Unsecured debt ratings of Ba3 LGD-4, 57% at both American Axle and
Holdings have also been confirmed.
The outlook is negative.
The actions conclude a ratings review reported on Oct. 5, 2006,
after the company's disclosure of a special attrition program and
other restructuring actions which will be implemented at the end
of the fourth quarter of 2006 and early 2007.
Collectively, the programs are anticipated to involve special
charges of between $150-$250. In confirming the ratings, Moody's
noted that these programs will involve substantial cash
disbursements and cause higher debt levels to persist in the
short-term.
However, it will have a relatively quick pay-back period through
establishing a lower cost structure which is anticipated to
improve future performance and cash flows. Metrics more
consistent with the Ba3 rating category could develop during 2007
assuming industry conditions stabilize and sufficient consumer
demand for vehicles based on the GMT-900 platform develops.
The Corporate Family rating of Ba3 reflects weighting placed on
scores under the Auto Supplier Methodology for elevated leverage,
customer concentration and deterioration in coverage ratios which
has occurred over the last year. Scores on those factors are
partially mitigated by stronger results from the company's sound
capitalization, good liquidity profile, efficient operations, and
the long-term nature of its business awards.
Moody's would expect free cash flow in 2006 to be close to break-
even as the company's investment in organic growth has coincided
with sharply lower production at its major customers. The rating
also emphasizes potential volatility to the company's cash flows
arising from its ongoing customer, geographic and platform
concentration. American Axle has a capital intensive business
model which creates significant operating leverage as well as
ongoing capital expenditure requirements. Those traits tend to
compound its exposure to challenges faced by its largest customer,
GM.
Improved customer, geographic and platform diversification will
slowly evolve. Substantial disbursements to facilitate those
objectives, the SAP and other restructuring actions will be
required. Weak debt service ratios, elevated leverage and
constricted free cash flows are anticipated to continue over the
near term. However, over the intermediate period, improvements in
the company's cost structure and enhanced free cash flow generated
from the SAP and other restructuring actions combined with lower
capital expenditures in 2007 ought to position key credit metrics
within a more acceptable range for Ba3 rated credits.
The outlook is negative and reflects the company's continued
concentration with GM, whose Corporate Family rating is B3, and
issues related to the mix of vehicles it supports.
While uncertainty exists on what build rates consumer demand may
ultimately support for models based on the GMT-900 platform, the
rating agency would expect American Axle to remain profitable
during the intermediate term. In the near term, the company's
leverage and debt service coverage ratios will remain weak as
interest expense will increase as higher debt levels incurred from
funding the combination of 2006 capital expenditures and
significant SAP disbursements and other restructuring actions will
continue. The company remains vulnerable to downside developments
at GM and the potential that labor contract issues in late 2007 at
the Big 3 OEMs could disrupt build-rate assumptions.
The SGL-2 rating represents good liquidity over the coming twelve
months. American Axle should generate internal funds to meet
basic operating needs during the coming year. However, the cash
impact of its SAP and other restructuring programs are likely to
cause incremental borrowings towards the end of the fourth quarter
and early 2007. While the company maintained only minimal balance
sheet cash, it does have access to a $600 million unsecured
revolving credit facility whose commitment extends to April 2010.
At the end of the third quarter, the company had approximately
$486 million available under the facility.
Ratings confirmed:
* American Axle & Manufacturing, Inc.
-- Senior Unsecured notes, Ba3, LGD-4, 57%
-- Senior Unsecured term loan, Ba3, LGD-4, 57%
-- American Axle & Manufacturing Holdings, Inc.
-- Corporate Family Rating, Ba3
-- Probability of Default Rating, Ba3
-- Senior Unsecured convertible notes, Ba3, LGD-4, 57%
Ratings affirmed:
* American Axle & Manufacturing, Inc.
-- Speculative Grade Liquidity rating, SGL-2
American Axle & Manufacturing, headquartered in Detroit, Michigan,
is engaged in the manufacture, design, engineering and validation
of driveline systems and related components and modules, chassis
systems, and metal formed products for light truck, SUVs and
passenger cars. The company has manufacturing locations in the
U.S.A., Mexico, the United Kingdom and Brazil. The company
reported revenues of $3.4 billion in 2005 and has approximately
10,900 employees.
CALPINE CORP: Court Approves Pacific Gas Settlement Agreement
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has approved a Settlement Agreement between Calpine Corp., its
debtor-affiliates and Pacific Gas & Electric Company.
As reported in the Troubled Company Reporter on July 20, 2006,
Calpine Gilroy Cogen LP operated a 130-megawatt cogeneration
facility. In 1983, Gilroy and Pacific Gas & Electric Company
entered into a Power Purchase Agreement.
In 1999, the parties executed an agreement for termination and
buy-out of standard offer. The PPA was terminated in October
2002.
As consideration for the Termination Agreement, the parties
agreed that PG&E would make monthly termination payments of not
more than $20,700,000 per year for 14 years and 8 months
commencing on Feb. 28, 2000, with the last payment due on
Sept. 30, 2014.
Under the Termination Agreement, PG&E reserved and was granted
certain rights of set-off against the Termination Agreement
Payments.
In November 2003, Gilroy sold the receivable stream associated
with the Termination Agreement Payments. The Termination
Agreement Payments Receivable was subject to those rights of set-
off reserved by PG&E under the Termination Agreement.
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York,
related that Calpine Corporation and Gilroy indemnified the
purchaser of the Termination Agreement Payments Receivable
against any set-offs PG&E may make against the Termination
Agreement Payments. The Purchaser was also granted a security
interest in the Gilroy Facility, and was given the right to
foreclose on the Gilroy Facility if Calpine and Gilroy fail to
honor their guaranty obligations.
Mr. Cieri noted that for the passed years, PG&E, Gilroy and other
power generators have been involved in a dispute regarding
certain historical rates charged by Gilroy and other power
generators under certain types of contracts with PG&E.
The Termination Agreement provided that if Gilroy is found to
have any liability to PG&E under the Pricing Dispute, PG&E would
be authorized to offset Gilroy's liability against PG&E's
Termination Payments.
Using the methodology advocated by PG&E in the Pricing Dispute,
PG&E's asserted damages against Gilroy under the Pricing Dispute
could exceed $40,000,000, Mr. Cieri notes.
Calpine disputed liability and did not agree with PG&E's
calculations. However, any finding of liability by Gilroy on
account of the Pricing Dispute could result in a dollar-for-
dollar reduction in the Termination Payments, and could trigger
dollar-for-dollar guaranty obligations on the part of Gilroy and
Calpine with respect to the Termination Agreement Payments
Receivable, Mr. Cieri pointed out.
Furthermore, Mr. Cieri said that because the purchaser of the
Termination Agreement Payments Receivable was granted a security
interest in the Gilroy Facility, any guaranty obligations could
constitute secured debt.
Thus, Calpine and Gilroy negotiated with PG&E in an attempt to
minimize Gilroy's secured debt exposure.
Accordingly, the parties agreed that:
(a) Calpine's King City Plant, a non-debtor entity, will be
the proxy for the Gilroy Plant;
(b) Gilroy will pay PG&E, for the next 54 months, the amount
equal to $0.975 per MWh of electricity delivered to PG&E
from the King City Plant;
(c) the settlement will be deemed null and void if no approval
from the Court or the California Public Utilities Company
is received before December 31, 2006, unless otherwise
agreed by the parties; and
(d) they will mutually release all claims and causes of action
arising from the Settled Issues.
A full-text copy of the PG&E Settlement Agreement is available
for free at http://ResearchArchives.com/t/s?de2
Headquartered in San Jose, California, Calpine Corporation
(OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies
customers and communities with electricity from clean, efficient,
natural gas-fired and geothermal power plants. Calpine owns,
leases and operates integrated systems of plants in 21 U.S. states
and in three Canadian provinces. Its customized products and
services include wholesale and retail electricity, gas turbine
components and services, energy management and a wide range of
power plant engineering, construction and maintenance and
operational services.
The company previously produced a portion of its fuel consumption
requirements from its own natural gas reserves. However, in July
2005, the company sold substantially all of its remaining domestic
oil and gas assets to Rosetta Resources Inc.
The company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts. Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities. (Calpine Bankruptcy News, Issue No. 31; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
CANADA MORTGAGE: Moody's Rates $2-Mil. Class F Certificates at B2
-----------------------------------------------------------------
Moody's Investors Service assigned definitive ratings to the
Mortgage Pass-Through Certificates, Series 2006-C5 issued by
Canada Mortgage Acceptance Corporation.
These are the rating actions:
* CMAC Mortgage Pass-Through Certificates, Series 2006-C5
-- $185.0 Million 4.313% Class A-1 Certificates at Aaa
-- $159.0 Million 4.274% Class A-2 Certificates at Aaa
-- $118.3 Million Floating Rate Initial Class VFC
Certificates at Aaa
-- $18.7 Million 4.497% Class B Certificates at Aa2
-- $14.03 Million 4.845% Class C Certificates at A2
-- $9.61 Million 5.150% Class D Certificates at Baa2
-- $5.45 Million 5.150% Class E Certificates at Ba2
-- $2.08 Million 5.150% Class F Certificates at B2
-- $391.79* Million Floating Rate Class IO-P at Aaa; and
-- $519.47* Million Floating Rate Class IO-C at Aaa
* Initial notional amount
The ratings on the Certificates are based on the quality of the
underlying collateral -- a pool of residential mortgage loans
secured by residential properties located in Canada; the credit
enhancement furnished by the subordinate tranches and on the
structural and legal integrity of the transaction.
The transaction uses a "bullet" structure that permits the payment
of principal to Class A-1 and A-2 certificate holders on specified
targeted final payment dates.
On the closing date, the Issuer will issue, in addition to the two
Class A certificates, an initial variable funding certificate.
The VFC, which will be sold into an asset-backed commercial paper
conduit, is used to make principal payments on the targeted final
payment dates, and absorb prepayments on the underlying mortgage
loans.
All available principal amounts will be allocated to the VFC until
the targeted final distribution date of each successive Class A
certificate. If the VFC is paid down before the targeted final
distribution date of the Class A certificates, then principal is
accumulated in a principal accumulation account.
At the specified targeted final distribution date for each of the
Class A-1 and Class A-2 certificates, CMAC will use reasonable
efforts to issue additional VFC's, the proceeds of which will be
used to repay the related Class A certificates.
On closing, a swap will be put in place with the Toronto-Dominion
Bank as counterparty to offset the interest rate mismatch between
the floating rate on the VFC and the fixed interest rates on the
mortgage loans in the collateral pool.
Concurrently, a swap will also be put in place to mitigate any
risk of negative carry on cash, if any, accumulating in the
principal accumulation account for the Class A Certificates.
The Mortgage Pool, as of Nov. 1, 2006, consists of 2,743 fixed
rate mortgage loans that amounted to an aggregate balance of
$519,470,296. Each mortgage loan constitutes a first lien on a
one to four family residential property located in Canada and are
partially-amortizing, first mortgage loans with original terms to
maturity ranging from 5 to 61 months in length.
The credit quality of the Mortgage Pool, overall, is weaker than
the previous CMAC pool primarily because this pool does not
contain any 'A' or conforming mortgages, which is reflected by the
increased credit enhancement for the Class A and Class VFC
Certificates.
The previous pool had a 26.6% portion that was either insured or
was below 75% LTV. The pool also contains a much higher portion
of the ideclare (TM) product, a product that provides mortgages to
debtors that have not provided full documentation of income
sources.
Approximately 69.4% of this pool consists of ideclare (TM)
mortgages, whereas the previous transaction had 43.2% of this
product type. This pool also has a lower concentration of
iresolve (TM) products this time around, as only 1.8% of the pool
consists of this type of product.
The profile of the iresolve (TM) borrowers is riskier than those
of the other loan products. The i95/i107 (TM) portion of this
pool is also lower in this deal relative to the previous
transaction. This loan product offers mortgages with higher
leverage points than other product groups in the GMAC offering
group. These high leverage loans comprise approximately 6.40% of
the total deal pool, compared to 9.7% in the previous transaction.
Therefore, while the absence of any isecure (TM) products in this
pool weakens the overall credit quality of this pool, the other
product types provide for slightly stronger pool characteristics
than the CMAC transactions brought to the market prior to 2006.
The characteristics of the various subpools have remained
relatively consistent with previous transactions. The overall
leverage is slightly lower, at 83.1% for this transaction as
compared to 85.2% last time.
GMAC Residential Funding of Canada is a wholly-owned subsidiary of
Residential Funding Company LLC, which is in turn a wholly-owned
subsidiary of Residential Capital, LLC.
Residential Capital, LLC is an indirect wholly-owned subsidiary of
GMAC LLC. As of Sept. 30, 2006, RFC was responsible for servicing
residential mortgage loans in the U.S. totaling approximately
US$161 billion.
While RFOC is ultimately responsible for servicing, it will rely
on the services of MCAP Service Corporation as Sub-Servicer to
service the Mortgage Loans. As of Dec. 31, 2005, MCAP was
responsible for servicing residential mortgage assets for various
customers, including RFOC, with an aggregate outstanding principal
balance of approximately $18.6 billion.
Moody's issued provisional ratings on these Certificates on
Nov. 17, 2006.
CAROLINA CARE: A.M. Best Cuts Rating and Says Outlook is Negative
-----------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to
C++ (Marginal) from B (Fair) of Carolina Care Plan, Inc. of
Columbia, SC. The outlook has been revised to negative from
stable.
The rating downgrade is due to Carolina Care's reported financial
condition as of Sept. 30, 2006. Carolina Care reported a
statutory net loss of $6.1 million. This drop in earnings
translates into a large drop in capital and surplus in the same
period in an organization where capital levels were already low.
A.M. Best is concerned about Carolina Care's ability to grow its
capital without enduring a long turnaround period and that
additional losses may cause the company's financial position to
deteriorate further. In addition, Carolina Care has limited
access to additional capital, putting further pressure on the
company's capital position.
A.M. Best Co., established in 1899, is the world's oldest and most
authoritative insurance rating and information source.
CATHOLIC CHURCH: Tucson Tort Panel Wants $3 Million Distribution
----------------------------------------------------------------
The Official Committee of Tort Claimants in the Chapter 11 case of
the Diocese of Tucson asks the U.S. Bankruptcy Court for the
District of Arizona to authorize the trustee of the Settlement
Trust to make a second interim distribution from funds in the
Settlement Trust for the allowed claims in Tiers 1, 2, 3, 4 and
the California Tier.
Currently, the Settlement Trust has $4,647,913 available for
distribution to Tort Claimants with Allowed Claims, Warren J.
Stapleton, Esq., at Stinson Morrison Hecker LLP, in Phoenix,
Arizona, tells Judge Marlar. About $520,000 of this fund will be
paid to Claimants holding Allowed Claims so the balance will be
$4,127,913.
The Tort Committee wants Judge Marlar to authorize a further
distribution of $3,152,500 at this time, Mr. Stapleton explains.
Of the $3,152,500, the Diocese will receive $152,500 pursuant to
the Sharing Agreement and the remainder will be distributed to
Allowed claims in the ratio of:
* Tier 1 - 1;
* Tier 2 - 2;
* California Tier - 3.5;
* Tier 3 - 5; and
* Tier 4 - 7,
in accordance with the Weighted Distribution Ratio as provided by
the Plan.
If the Court approves the request, approximately $1,000,000 will
remain in the Trust, which is more than enough to pay the
remaining unresolved claims, Mr. Stapleton asserts.
According to Mr. Stapleton, the parties have settled all remaining
claims except one Tort Claim and a relationship claim associated
with it. The Tort Committee believes that these two claims face
significant proof problems and do not anticipate a large
settlement. The Trust's maximum exposure for funding
distributions for both claims is approximately $735,000, Mr.
Stapleton relates.
Thus, since enough funds are available for the unresolved claims,
the Tort Committee believes that the proposed distribution will
not prejudice any Tort Claimant.
The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese. Tucson's Third Amended and Restated Plan of
Reorganization became effective on Sept. 20, 2005. (Catholic
Church Bankruptcy News, Issue No. 74; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: Spokane Taps Catholic Finance as Fin'l Consultant
------------------------------------------------------------------
The Diocese of Spokane seeks authority from the U.S. Bankruptcy
Court for the Eastern District of Washington to employ Catholic
Finance Corporation as its financial consultant.
Spokane Bishop William S. Skylstad relates that in connection with
the Diocese's Plan of Reorganization, Spokane will require the
services of a financial consultant to develop a financing plan and
obtain monetary support to partially fund the Plan. He adds that
CFC specializes as a financial consultant for Catholic
organizations.
In exchange for its services, CFC will be paid based on its hourly
rate of:
Designation Hourly Rate
----------- -----------
Professional members $240
Other staff members $80
The accumulated fees will be paid from the proceeds of the
financing fund when it closes, but the Spokane Diocese will remain
responsible for fees in the event financing does not come to
fruition, Bishop Skylstad discloses. In either case, CFC will be
paid within nine months of initiating the engagement. There is
also monthly reimbursement of necessary expenses, Bishop Skylstad
explains.
Bishop Skylstad assures the Court that CFC:
a) does not hold or represent an interest adverse to the
estate;
b) is a "disinterested person"; and
c) has not served as examiner to the Spokane Diocese's case.
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 74; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CEP HOLDINGS: Hires McDonald Hopkins as Special Counsel
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio
allowed CEP Holdings LLC and its debtor-affiliates to employ
McDonald Hopkins Co., LPA, as their special counsel, nunc pro tunc
to Oct. 16, 2006.
As reported in the Troubled Company Reporter on Dec. 4, 2006,
McDonald Hopkins will represent the Debtors when their lead
counsel, Baker & Hostetler won't be able to represent them as
conflicts arise. In addition, the firm will also serve as the
Debtors' primary conflicts counsel, when specific matters occur
that cannot be handled by Baker & Hostetler.
The firm's professionals bill:
Position Hourly Rate
-------- -----------
Shareholders $255 - $460
Of Counsel $215 - $400
Associates $145 - $290
Paralegals $100 - $180
Law Clerks $85
To the best of the Debtors' knowledge, McDonald Hopkins does not
represent nor hold any interest adverse to the Debtors or their
estates.
Based in Akron, Ohio, CEP Holdings, LLC, manufactured hard, molded
rubber products and extruded plastic materials for companies in
the automotive, construction, and the medical industries. The
Company and two of its subsidiaries filed for chapter 11
protection on Sept. 20, 2006 (Bankr. N.D. Ohio Case No. 06-61796).
McGuireWoods LLP represents the Official Committee of Unsecured
Creditors. When the Debtors filed for protection from their
creditors, they estimated assets and debts between $10 million and
$50 million. The Debtors' exclusive period to file a chapter 11
plan expires on Jan. 18, 2007.
CHESAPEAKE ENERGY: $1-Bil. Equity Issue Cues S&P's Outlook Change
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on oil and gas exploration and production company
Chesapeake Energy Corp., and revised the outlook to positive from
stable.
The outlook revision comes after the company's disclosure that it
intends to issue roughly $1 billion in common equity, which will
result in improved financial leverage measures.
As of Sept. 30, 2006, Oklahoma City-based Chesapeake had
$7.9 billion of debt and $2 billion of preferred stock.
While Standard & Poor's considers Chesapeake's business risk
profile to be satisfactory, the company's high debt leverage and
acquisitive growth strategy currently limit the corporate credit
rating at 'BB'.
The reported equity issuance will improve Chesapeake's financial
leverage metrics somewhat.
The outlook is positive.
Ratings improvement will be contingent upon further deleveraging,
a demonstration of a moderate financial policy, and an evaluation
of the company's operating results and its year-end reserve
report.
The pace of deleveraging, in addition to operating performance,
will largely determine the pace of any potential future ratings
actions.
"Any potential rating upgrade to investment grade would require
time, probably at least two years, not only due to the significant
deleveraging that would be required, but also due to the
confidence needed in management's willingness to operate under
more stringent financial constraints," said
Standard & Poor's credit analyst David Lundberg.
"If Chesapeake instead pursues largely debt-financed acquisitions
causing financial leverage metrics to worsen, or if operating
performance worsens, a negative ratings action could result," he
continued.
CIT RV: S&P Pares Rating on Class B Debt to BB- from BB+
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of securities from CIT RV Trust's series 1998-A and 1999-A
and SSB RV Trust 2001-1 and removed them from CreditWatch, where
they were placed with negative implications on Sept. 26, 2006.
At the same time, the rating on class B from series 2001-1 was
affirmed and removed from CreditWatch positive, and the ratings on
five other classes from these transactions were affirmed.
All three trusts are backed by loans secured by recreational
vehicles that were acquired or originated by CIT. The CIT RV
1998-A and 1999-A trusts have experienced cumulative net losses
that are more than double original expectations, and cumulative
net losses on the SSB RV 2001 trust are nearly double the original
expectations.
The downgrades on the 1998-A and 1999-A trusts reflect the poor
performance of the underlying pool of loans, along with the
growing principal shortfall carryover caused by excess spread
levels that have been inadequate to cover net losses following
collateral liquidation. Because there is no cash on deposit in
the reserve accounts, subordination is diminishing each month.
Moreover, although growth in cumulative net losses for these
trusts appears to be slowing, projected remaining losses are
higher than previously anticipated.
Likewise, the rating on SSB RV Trust 2001-1's class D notes was
lowered and the rating on the class B notes was affirmed and
removed from CreditWatch positive because of the poor performance
of the underlying pool of loans. On a seasonally adjusted basis,
this pool appears to be performing worse than the prior series at
the same point in time.
Consequently, the amount on deposit in the reserve account
($4.8 million) is well below the amount required. While
monthly recovery rates have improved recently, there is
considerable uncertainty about how long they will remain at
current levels.
The affirmations of the remaining ratings reflect credit
enhancement levels that are adequate, relative to expected and
stressed remaining losses, to support the current ratings.
Ratings Lowered And Removed From CreditWatch Negative
CIT RV Trust 1998-A
Rating
------
Class To From
----- -- ----
B BB- BB+/Watch Neg
CIT RV Trust 1999-A
Rating
------
Class To From
----- -- ----
B B BBB-/Watch Neg
SSB RV Trust 2001-1
Rating
------
Class To From
----- -- ----
D BB+ BBB/Watch Neg
Rating Affirmed And Removed From CreditWatch Positive
SSB RV Trust 2001-1
Rating
------
Class To From
----- -- ----
B AA AA/Watch Pos
Ratings Affirmed
CIT RV Trust 1998-A
Class Rating
----- ------
A-5 AAA
CIT RV Trust 1999-A
Class Rating
----- ------
A-5 AAA
SSB RV Trust 2001-1
Class Rating
----- ------
A-4 AAA
A-5 AAA
C A
Other Outstanding Ratings
CIT RV Trust 1998-A
Class Rating
----- ------
Certs. D
CIT RV Trust 1999-A
Class Rating
----- ------
Certs. D
CITIZENS COMMS: Avails of $150 Million CoBank Term Loan Facility
-------------------------------------------------------------
Citizens Communications Company notified, on Dec. 6, 2006, the
lenders under its $150 million senior unsecured term loan facility
to draw down the full amount of the facility. The Company intends
to use the proceeds to repurchase a portion of its outstanding
debt.
The Company entered into a credit agreement, on Dec. 6, 2006, with
CoBank, ACB, as administrative agent, lead arranger and a lender,
and the other lenders party thereto for a $150 million senior
unsecured term loan facility. The facility matures on Dec. 31,
2012, and bears interest based on the prime rate or LIBOR, at the
election of the company.
The Credit Agreement contains customary representations and
warranties, affirmative and negative covenants, a financial
covenant that requires compliance with a leverage ratio, and
customary events of default. The Company may repay, upon proper
notice and subject to certain limitations, the facility without
premium or penalty. Amounts pre-paid may not be re-borrowed.
A full text-copy of the Credit Agreement with CoBank, ACB, may be
viewed at no charge at http://ResearchArchives.com/t/s?16bb
Headquartered in Stamford, Connecticut, Citizens Communications
Company fka Citizens Utilities (NYSE: CZN) -- http://www.czn.net/
-- provides phone, TV, and Internet services to more than two
million access lines in parts of 23 states, primarily in rural and
suburban markets, where it is the incumbent local-exchange carrier
operating under the Frontier brand.
* * *
As reported in the Troubled Company Reporter on Sept. 20, 2006,
Fitch Ratings affirmed Citizens Communications Company's Issuer
Default Rating rating at 'BB'. The Rating Outlook is Stable.
As reported in the Troubled Company Reporter on Sept. 20, 2006,
Moody's Investors Service upgraded the corporate family rating of
Citizens Communications to Ba2 from Ba3 and also assigned a Ba2
probability of default rating to the company. The ratings on the
senior unsecured revolver and the senior unsecured notes and
debentures were also upgraded to Ba2 from Ba3. The instrument
ratings reflect both the overall Ba2 probability of default of the
company, and a loss given default of LGD 4. The ratings on the
preferred EPPICS were upgraded to B1 from B2, and assigned an LGD6
assessment. The outlook is stable.
As reported in Troubled Company Reporter on Nov. 16, 2006 Standard
& Poor's Ratings Services affirmed its ratings on Stamford,
Connecticut-based Citizens Communications Co., including the 'BB+'
corporate credit rating. The rating outlook is negative.
CITIZENS COMMS: Fitch Rates New $150-Mil. Senior Facility at BB
---------------------------------------------------------------
Fitch Ratings assigned a 'BB' rating to Citizens Communications
Company's new $150 million senior unsecured credit facility which
matures Dec. 31, 2012.
Citizens has drawn on the facility, and the proceeds from the
facility will be used to repurchase outstanding debt.
Citizens issuer default rating is 'BB' as is the rating of its
existing senior unsecured $250 million credit facility and the
rating of its senior unsecured debt.
The Rating Outlook is Stable.
Similar to the existing $250 million revolving credit facility,
the new term loan facility is unsecured, but it will become
equally and ratably secured by certain liens and equally and
ratably guaranteed by certain subsidiaries upon the issuance of
debt that is secured or guaranteed. The new facility requires the
company to maintain a net debt-to-EBITDA level of 4.5x or less
during the entire period, plus there are customary terms and
conditions which are similar to those found in the revolving
credit facility.
Citizens 'BB' rating reflects the relatively stable financial
performance of its telecommunications business, which stems from
its primarily rural operations.
Offsetting factors include the continuing pressure of competition,
the slight levering effect of the proposed acquisition of
Commonwealth Telephone Enterprises and the company's higher payout
of free cash flow in the form of dividends than is the norm in the
industry.
The company's guidance calls for pre-dividend cash flow in the
range of $500 million to $525 million in 2006. Liquidity is good
with an undrawn, $250 million senior unsecured credit facility in
place until October 2009.
In addition to the $150 million in cash resulting from the draw on
the new term-loan facility, the company had $417 million in cash
at Sept. 30, 2006. Citizens has approximately $653 million in
maturing debt in 2008, and Fitch will monitor the company's
progress toward addressing this maturity.
In connection with its proposed acquisition of Commonwealth, the
company halted its $300 million stock repurchase program, having
repurchased $135 million through Sept. 30, 2006, and expects to
complete the remaining amount on the stock repurchase program in
2007 following the close of the acquisition. Citizens expects to
complete its previously announced $150 million debt reduction in
conjunction with the financing of the transaction.
In the intermediate term, there is some uncertainty regarding
revenues and cash flows due to potential longer-term reforms of
the universal service fund program and the intercarrier
compensation structure. Policymakers are generally supportive of
rural carriers but the outcome of reforms is uncertain.
Fitch believes Citizens proposed acquisition of Commonwealth will
be slightly levering for Citizens upon its close, but within the
range of the current 'BB' rating category. Moreover, an
anticipated dividend payout in the low 60% range is expected to
continue to provide Citizens with good financial flexibility.
The total value of the transaction is approximately $1.3 billion,
including $335 million for the retirement of Commonwealth's debt.
The transaction is expected to be financed with approximately
75% cash and 25% equity.
Fitch anticipates that Citizens gross debt-to-EBITDA will rise to
approximately 3.7x in 2007 from 3.5x for the trailing 12 months
ending Sept. 30, 2006. To finance the transaction, Citizens has
obtained a $990 million bridge credit facility, and will term out
the debt facility in the public markets. The company expects to
obtain approximately $30 million in annual synergies, and will
incur approximately $35 million in integration costs. The
transaction is expected to be completed in 2007 after the
customary regulatory approvals and the Commonwealth shareholder
vote.
CLARION TECHNOLOGIES: Post $3.2 Million Loss in 2006 Third Quarter
------------------------------------------------------------------
Clarion Technologies reported a $3.2 million net loss on
$32.1 million of net sales for the third quarter ended Sept. 30,
2006, compared with a net income of $392,000 on $41 million of net
sales for the third quarter ended Oct. 1, 2005.
The net loss resulted from lower gross profits due to increased
cost of sales, the increase in operating expenses, and slightly
higher interest expense.
Net sales decreased in view of a $4 million reduction in sales due
to the elimination of electronics content on an existing program
effective March 2006, as well as a $5.8 million reduction in sales
in the appliance segment due to lower sales from a major customer.
Excluding the circumstances involving the electronics content
elimination, the automotive business experienced increased sales
of $2.4 million due to the launch of a new seating program.
Modification and Consent Agreement
As reported in the Troubled Company Reporter on Aug. 17, 2006,
JPMorgan Chase Bank, N.A. and Fifth Third Bank, the company's
senior lenders, entered into a Modification and Consent Agreement
on July 27, 2006 with Clarion, certain of its subsidiaries,
William Blair Mezzanine Capital Fund III, L.P. and Crown Realty
Holdings, LLC. Pursuant to the Consent Agreement, Blair and Crown
loaned Clarion an aggregate $1,375,000, the principal of which
loan is due and payable on Dec. 31, 2006.
Pursuant to the Consent Agreement, Blair Mezzanine and Crown
Realty loaned the Company an aggregate $1.375 million, the
principal is due and payable on Dec. 31, 2006. The Loan is pre-
payable at the Company's and the holders' option. The Loan is
pari passu with the Company's debt to its senior lenders, except
that it is unsecured. If the Loan is not repaid by Dec. 31, 2006,
the unpaid amount will become additional subordinated debt under
the terms of the Senior Subordinated Loan Agreement, dated as of
Dec. 27, 2002, to which Blair and Crown are already parties.
As consideration for the Loan, Blair Mezzanine and Crown Realty
will receive:
(a) on July 31, 2006, their pro rata share of 250 shares of
Class A Preferred Stock of the Company, and
(b) on Nov. 1, 2006, up to 750 additional shares of Class A
Preferred Stock of Clarion, adjusted pro rata for the
amount of unpaid principal of the Loan as of such date. To
the extent the loan is not paid in full by Dec. 31, 2006,
Blair and Crown will receive, as additional consideration,
their pro rata portion of 1,000 shares of Class A Preferred
Stock of the Company.
Loan Covenant Default
As disclosed also in the Troubled Company Reporter on Sept. 5,
2006, the company, on Mar. 31, 2006, defaulted on certain
financial covenants contained in the company's Senior Loan
Agreement as well as certain financial covenants contained in the
company's Senior Subordinated Loan Agreement. The company has
been negotiating with its lenders to obtain default waivers and
amendments to both credit facilities.
As of Sept. 30, 2006, the company and its lenders have been unable
to agree upon the terms of those waivers and amendments. Such
defaults allow the lenders to discontinue lending or declare all
borrowings outstanding to be due and payable. In addition, the
company's lenders have imposed significant constraints on the
operating capital available to the company.
Business Recovery Plan
The company is addressing its current liquidity and operational
issues in an effort to improve cash flows. In the fourth quarter
of fiscal 2006, the company began launching an aggressive business
recovery plan. The plan includes targeted cost-cutting in the
corporate administration areas and at the plant operations level,
strengthening of certain controls, renegotiation of pricing of
certain items, and greatly improved performance metric reporting.
Improvement of inefficient processes, cost-advantageous material
substitutions, and continued consolidation of manufacturing
facilities in Michigan are occurring. The remaining production in
the Caledonia, Michigan facility should be fully shifted to the
Greenville, Michigan facility by the end of the fourth quarter of
fiscal 2006. Prior to fourth quarter of fiscal 2006, the
corporate headquarters, which were located in downtown Grand
Rapids, were relocated to the Caledonia facility.
Liquidity Constraints
On June 30, 2007, the company is obligated to pay its senior
subordinated debt and redeem its Series A Preferred Stock. Based
upon current and anticipated operations, cash flows and capital
resources, the company does not expect to satisfy these
obligations without further restructuring of the company's capital
and debt obligations.
The company's Sept. 30, 2006, balance sheet showed $69.2 million
in total assets, $116.4 million in total liabilities,
$38.1 million in redeemable series A preferred stock, and
$19.3 million in redeemable B preferred stock, resulting in a
$104.6 million total stockholders' deficit.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with $21.6 million in total current assets
available to pay $97.6 million in total current liabilities.
The decrease in working capital is mainly attributable to the
increase in accrued interest, which is classified as current
resulting from related debt becoming due within one year as well
as a portion of accrued dividends becoming current as the related
preferred stock is redeemable within one year.
Full-text copies of the company's consolidated financial
statements are available for free at:
http://researcharchives.com/t/s?16ab
Going Concern Doubt
As reported in the Troubled Company Reporter on April 27, 2006,
BDO Seidman, LLP, raised substantial doubt about Clarion
Technologies, Inc.'s ability to continue as a going concern after
it audited the company's financial statements for the year ended
Dec. 31, 2005. The auditing firm pointed to the company's
recurring losses from operations, working capital deficit,
accumulated deficit and violation of certain covenants in its loan
agreements.
About Clarion Technologies
Headquartered in Grand Rapids, Michigan, Clarion Technologies,
Inc. -- http://www.clariontechnologies.com/-- creates products
and parts for the automotive, furniture and consumer goods
industry. The company makes plastic injection molding, and offers
post-molding assembly and finishing operations.
COMM 2004: Moody's Holds B3 Rating on $3-Mil. Class O Certificate
-----------------------------------------------------------------
Moody's Investors Service affirms the ratings of 21 classes of
COMM 2004-LNB4, Commercial Mortgage Pass-Through Certificates:
-- Class A-1, $23,318,027, Fixed, affirmed at Aaa;
-- Class A-2, $148,782,000, Fixed,affirmed at Aaa;
-- Class A-3, $86,461,000, Fixed, affirmed at Aaa;
-- Class A-4, $88,047,000, Fixed, affirmed at Aaa;
-- Class A-5, $343,272,000, Fixed,affirmed at Aaa;
-- Class A-1A, $349,039,491, Fixed, affirmed at Aaa;
-- Class X-C, Notional, Fixed, affirmed at Aaa;
-- Class X-P, Notional, Fixed, affirmed at Aaa;
-- Class B, $24,442,000, Fixed, affirmed at Aa2;
-- Class C, $10,693,000, Fixed, affirmed at Aa3;
-- Class D, $22,914,000, Fixed, affirmed at A2;
-- Class E, $10,694,000, Fixed, affirmed at A3;
-- Class F, $15,276,000, Fixed, affirmed at Baa1;
-- Class G, $15,276,000, Fixed, affirmed at Baa2;
-- Class H, $12,221,000, Fixed, affirmed at Baa3;
-- Class J, $4,583,000, Fixed, affirmed at Ba1;
-- Class K, $3,055,000, Fixed, affirmed at Ba2;
-- Class L, $6,111,000, Fixed, affirmed at Ba3;
-- Class M, $7,638,000, Fixed, affirmed at B1;
-- Class N, $3,055,000, Fixed, affirmed at B2; and
-- Class O, $3,055,000, Fixed, affirmed at B3.
As of the November 15, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 2.4%
to $1.19 billion from $1.22 billion at securitization. The
Certificates are collateralized by 117 mortgage loans ranging in
size from less than 1.0% to 6.7% of the pool with the top 10 loans
representing 38.7% of the pool. The pool consists of four shadow
rated loans, representing 16.7% of the pool, and a conduit
component, representing 83.3% of the pool. No loans have
defeased. One loan has been liquidated with no loss.
Two loans, representing 1.2% of the pool, are in special
servicing. Moody's is not projecting any losses from these
specially serviced loans. Fourteen loans, representing 15.2% of
the pool, are on the master servicer's watchlist. Moody's was
provided with full-year 2005 and partial-year 2006 operating
results for 94.6% and 77.7% respectively, of the performing loans.
Moody's loan to value ratio for the conduit component is 93.2%,
compared to 93.5% at securitization.
The largest shadow rated loan is the 731 Lexington Avenue Loan,
which is secured by a 694,000 square foot office condominium. The
collateral is part of a 1.4 million square foot complex in midtown
Manhattan on Lexington Avenue between 58th and 59th Streets. The
loan represents a 23.6% pari passu interest in the senior portion
of a first mortgage loan totaling $308.0 million.
In addition there is $86.0 million of subordinate debt held
outside of this transaction. Built in 2005, the condominium is
100.0% leased to Bloomberg, LP through 2028, the same as at
securitization. Should the loan not refinance at its balloon date
in 2014, 100% of the excess cash flow will be applied to loan
amortization.
Moody's current shadow rating is A3, the same as at
securitization.
The second largest shadow rated loan is the Strategic Hotel
Portfolio Loan ($67.9 million - 5.7%), which is secured by three
Hyatt hotels located in New Orleans, Louisiana, Phoenix, Arizona
and La Jolla, California. The properties were built between 1976
and 1989 and contain a total of 2,315 rooms. The loan is on the
master servicer's watchlist. The New Orleans Hyatt was severely
damaged during Hurricane Katrina. The property is currently under
redevelopment and is not open for business. The property is
scheduled to be re-opened in September 2007. The current
occupancy, ADR and RevPAR are 34.0%, $152.85 and $51.96,
respectively; compared to 64.6%, $144.41 and $93.26 at
securitization.
Excluding the Hyatt in New Orleans, the current occupancy, ADR and
RevPAR are 70.09%, $152.85 and $107.13, respectively. RevPAR for
the two operational hotels was $102.10 at securitization. Moody's
current shadow rating is Ba1, compared to Baa2 at securitization.
The third largest shadow rated loan is the 280 Trumbull Street
Loan ($33.9 million -- 2.8%), which is secured by a 660,000 square
foot Class A office tower located in Hartford, Connecticut. The
property is 89.0% leased, compared to 95.4% at securitization.
The two largest tenants are Prudential Insurance and Robinson &
Cole. Moody's current shadow rating is Baa2, the same as at
securitization.
The fourth largest shadow rated loan is the DDR Portfolio Loan
($24.3 million -- 2.0%), which is secured by a portfolio of
20 retail properties totaling 3.3 million square feet. The
properties are located in New York, Minnesota, Pennsylvania,
Arizona, North Carolina and Tennessee. The loan represents an
11.4% pari passu interest in the senior portion of a first
mortgage loan totaling $215.0 million. The properties were built
between 1972 and 2004 and are leased to approximately 230 tenants.
The portfolio has suffered because of a decrease in net cash flow.
Moody's current shadow rating is Ba2, compared to Baa2 at
securitization.
The top three conduit loans represent 13.8% of the pool. The
largest conduit loan is the Crossings at Corona-Phase I & II Loan
($79.5 million -- 6.7%), which is secured by a 503,000 square foot
portion of an 878,000 square foot retail center located in Corona,
California, approximately 55 miles southeast of downtown Los
Angeles. As of March 2006, the property was 95.3% occupied,
compared to 89.1% at securitization. The largest tenants are
Kohl's, and Best Buy. The center is also anchored by a non-
collateral Target store. The loan is interest only for the first
three years and then converts to a 30-year amortization schedule.
Moody's LTV is in excess of 100% the same as at securitization.
The next two conduit loans comprise 7.1% of the pool. The
Woodyard Crossing Shopping Center Loan is secured by a 343,000
square foot portion of a 483,000 square foot retail center located
in Clinton, Maryland, a suburb of Washington, D.C. Moody's LTV is
90.8% compared to 91.3% at securitization. The Metro I Building
Loan, is secured by a 310,000 square foot Class A office building
located in Hyattsville, Maryland, approximately 10 miles northeast
of Washington D.C. Moody's LTV is 85.7%, compared to 99.3% at
securitization.
The pool's collateral is a mix of multifamily and manufactured
housing, retail, office, hotel, industrial and self storage and
mixed-use. The collateral properties are located in 37 states and
Washington, D.C. The top five state concentrations are California,
New York, Maryland, Connecticut and Texas. All of the loans are
fixed rate.
COMPLETE RETREATS: Committee Wants Funds Paid to LPP Disgorged
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in Complete Retreats
LLC and its debtor-affiliates' bankruptcy cases filed a complaint
against LPP Mortgage Ltd. for the disgorgement of funds paid to
LPP, by or on behalf of the Debtors, for any claim or portion of
a claim that is disallowed by the U.S. Bankruptcy Court for the
District of Connecticut, and for avoidance of certain liens
asserted by LPP.
Jonathan B. Alter, Esq., at Bingham McCutchen LLP, in Hartford
Connecticut, relates that in December 2005, certain of the
Debtors entered into a Loan Agreement with Beal Bank, S.S.B., to
borrow up to $28,500,000. As of March 6, 2006, Beal purportedly
assigned its rights in the Loan Documents and the collateral
securing the Loan to an affiliated company, LPP.
LPP asserted that, as of the Petition Date, the Debtors'
prepetition obligations to LPP were fully secured pursuant to the
Loan Documents by first priority security interests and liens
granted by the Debtors to LPP, upon all of the Debtors' interests
in certain of the property of the Debtors' bankruptcy estates.
LPP further asserted that the collateral for its Loan includes,
among other things, real estate mortgages on these real
properties:
1. Trump Towers, #1222, New York,
2. Trump Towers, # 1622, New York,
3. One Central Park West, # 300, New York, and
4. One Central Park, West, # 310, New York.
The LPP Claims
On Oct. 19, 2006, LPP filed identical proofs of claim in 25 of the
Debtors' Chapter 11 cases. LPP alleged prepetition secured claims
against the estates of certain of the Debtors arising from the
Loan Documents for $28,601,467, comprised of:
Category Amount
-------- ------
Unpaid principal $27,647,761
Accrued and unpaid interest
at the non-default contract rate 208,736
Accrued and unpaid default interest 7,551
Exit fee 691,194
Prepetition legal fees 46,233
The LPP Claims further assert a reservation of LPP's purported
right to amend the Claims to include, among other things,
"additional fees and expenses incurred as a result of this
proceeding."
Committee Disputes LPP Claims
The Committee objects to the LPP Claims on the grounds that the
Claims unreasonably seek to burden the Debtors' estates with more
than $1,000,000 of default interest and excessive legal fees and
costs comprised of:
-- prepetition default-rate interest amounting $7,551 based on
a technical, non-monetary covenant default;
-- postpetition default-rate interest amounting $378,736 based
on the same technical, non-monetary covenant default; and
-- $615,000 in postpetition legal fees charged over a three-
month period by the three major law firms retained by LPP.
The Committee argues, among other things, that:
* LPP's claim for default rate interest based on a covenant
default unfairly results in a windfall to LPP and a penalty
to the Debtors' estates;
* LPP's claim for default rate interest cannot be justified on
grounds of adequate protection because LPP has not
demonstrated any postpetition diminution in the value of the
collateral securing its Loan;
* LPP is not entitled to any postpetition interest or fees
attributable to its Loan pursuant to Section 506(b) of the
Bankruptcy Code to the extent that its Claims are determined
not to be fully secured; and
* the amount of attorneys' fees sought by LPP are neither
reasonable nor necessary.
Thus, the Committee asks the Court to:
(a) deny LPP's request for payment of interest at the default
rate; and
(b) modify and decrease the amount of postpetition
professional fees payable to LPP.
Disgorgement
Pursuant to Section 549 of the Bankruptcy Code, a trustee may
avoid a postpetition transfer of property of the estate that is
not authorized by the Bankruptcy Code or the Court. Pursuant to
Section 550 of the Bankruptcy Code, to the extent that a transfer
is avoided under Section 549, the trustee may recover, for the
benefit of the estate, the property transferred from the initial
transferee of that transfer or the entity for whose benefit the
transfer was made.
The Final DIP Order provides the Committee with the right to seek
disgorgement with respect to any claim against LPP related to the
Loan and the Replacement DIP Order preserves that right, Mr.
Alter notes.
Pursuant to Section 551 of the Bankruptcy Code, to the extent a
transfer is avoided under Section 549, the transfer is
automatically preserved for the benefit of the estate with
respect to property of the estate.
Accordingly, the Committee asks the Court to require LPP to
disgorge any and all amounts paid, by or on behalf of the
Debtors, for any claim or portion of it that is disallowed by the
Court in connection with their Chapter 11 cases.
Lien Avoidance
Mr. Alter relates that pursuant to New York State statute, a
mortgage recording tax, the amount of which is based on the
amount of principal debt secured by the mortgage, is imposed on
all mortgages that are not specifically exempted from payment of
the MRT. A contract or agreement by which the indebtedness
secured by any mortgage is increased or added to, is deemed to be
a mortgage of real property for the purpose of the MRT, and is
taxable upon the amount of that increase or addition.
As a matter of New York State law, a mortgage on real property
located within the State of New York that is subject to the MRT
may not be judicially enforced under New York law unless the MRT
has been paid, together with all applicable interest and
penalties if a mortgage has been recorded without payment of the
MRT, Mr. Alter adds.
A. Trump Tower Mortgages
On October 31, 2003, Private Retreats, LLC, executed two
mortgages, granting The Patriot Group LLC a security interest in
the real properties known as Trump Towers Unit 1222 and Unit
1622. Each of the Trump Tower Mortgages states that the maximum
indebtedness to be secured is $593,775.
LPP has asserted that it is the assignee of the Trump Tower
Mortgages, as modified.
On December 19, 2005, certain of the Debtors and Beal entered
into Modification Agreements, which purport to increase the
principal amount secured by the Trump Tower Mortgages from
$593,775 to $712,530. The MRT was not paid on the increase in
the principal amount secured by the Trump Tower Mortgages
purportedly effected by the Modification Agreements, Mr. Alter
informs the Court.
In connection with the Modification Agreements, "Sec. 255
Affidavits" were filed requesting that the Modification
Agreements be declared exempt from the MRT. The affidavits state
that the Trump Tower Mortgages, as modified, have an unpaid
principal balance of $365,265, and further state that there is no
new money being advanced.
The MRT was not paid on any re-advance of the $593,775 originally
secured by the Modification Agreements, Mr. Alter says.
Accordingly, under New York State law, the maximum indebtedness
recoverable under the Trump Tower Mortgages, as modified, is
limited to $365,265 and any lien claimed by LPP in excess of that
amount should be avoided, Mr. Alter asserts.
B. One Central Park West Mortgages
On October 7, 2003, DR TR I, LLC, the alleged predecessor in
interest to Private Retreats, LLC, executed two mortgages,
granting Patriot a security interest in real properties known as
One Central Park West #300 and #310.
The maximum indebtedness to be secured under the 310 Mortgage is
$720,000, while under the 300 Mortgage it is $720,000.
LPP has asserted that it is the assignee of the Central Park
Mortgages, as modified.
Certain of the Debtors and Beal entered into certain Modification
Agreements:
-- Under the 310 Modification Agreement, the principal amount
secured by the 310 Mortgage is increased to $1,440,000. A
Sec. 255 Affidavit was filed requesting that the 310
Modification Agreement be declared exempt from the MRT.
-- The First 300 Modification Agreement provides that the 300
Mortgage only secures $500,000, while the "Sec. 255
Affidavit" filed requesting that the First 300 Modification
Agreement be declared exempt from the MRT states that the
300 Mortgage has an unpaid principal balance of $750,000
and that there is no new money being advanced. The Second
300 Modification Agreement purports to increase the
principal amount secured by the 300 Mortgage to $1,680,000
According to Mr. Alter, the MRT was not paid on any re-advance of
the originally secured amounts of the Central Park Mortgages.
Accordingly, under New York State law, the maximum indebtedness
recoverable (i) under the 310 Mortgage, as modified, is limited
to $720,000, and (ii) under the 300 Mortgage, as modified, is
limited to $500,000, and any lien claimed by LPP in excess of
those amounts should be avoided.
Mr. Alter asserts that pursuant to Section 544 of the Bankruptcy
Code, the liens claimed by LPP with respect to the New York
Properties are avoidable to the extent that the MRT was not paid
as required by New York State law.
Accordingly, the Committee asks the Court to avoid liens asserted
by LPP on the New York Properties pursuant to Sections 544, 550
and 551 to the extent those liens are unenforceable or
unperfected as against the interests of the Debtors' estates.
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.
The Debtors' exclusive period to file a plan expires on
February 18, 2007. They have until April 19, 2007, to solicit
acceptance to that plan. (Complete Retreats Bankruptcy News,
Issue No. 17; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
COMPLETE RETREATS: Can Walk Away from 14 Contracts and Leases
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut gave
Complete Retreats LLC and its debtor-affiliates authority to
to reject, effective Sept. 30, 2006, fourteen executory contracts
and unexpired leases for the use, sale or lease of certain assets
or real property with these counterparties:
* Gateway Realty, LLC,
* Scott A. Boyd,
* MR No. 5, LLC, predecessor-in-interest to Murphy Properties,
* 7575 E. Redfield, L.L.C.,
* Alpine Bank, Aspen Branch,
* SF101, LLC,
* SF201, LLC,
* Thurman Family Trust,
* Lawrence J. Nasella,
* Kenneth E. Moore,
* Five Star Destinations Company,
* Audi of North Scottsdale, and
* UAG Fairfield CM, LLC.
The Court directed:
(a) the landlord under the Alpine Agreement to immediately
return to the Debtors the $6,500 security deposit provided
for pursuant to the Alpine Agreement; and
(b) Five Star Destinations Company to immediately return to
the Debtors the $10,000 in overpayments it currently holds
under the 1501 Agreement, and the $26,000 in overpayments
it currently holds under the 1610 Agreement.
Claims arising from the rejection of the Rejected Agreements must
be filed with the Court by Dec. 27, 2006.
The Debtors will provide all non-debtor parties to the Rejected
Agreements with a notice of the Rejection Bar Date with respect
of any claims they may have arising from the rejection of the
Rejected Agreements.
As reported in the Troubled Company Reporter on Nov. 6, 2006, the
Debtors assert that they have exited the properties related
to the Rejected Agreements on or about Sept. 30, 2006. The
Debtors do not believe that the Rejected Agreements could be
assigned for any meaningful value or that the Agreements provide
any other potential value to their estates.
Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut,
told the Court that the Debtors would owe approximately
$4,200,000, plus certain additional expenses and taxes, if the
Agreements are not rejected.
Mr. Daman assured the Court that the Debtors intend to pay, or
have already paid, all non-Debtor parties to the Rejected
Agreements amounts due up to Sept. 30, 2006.
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.
The Debtors' exclusive period to file a plan expires on
February 18, 2007. They have until April 19, 2007, to solicit
acceptance to that plan. (Complete Retreats Bankruptcy News,
Issue No. 17; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CONSOLIDATED ENERGY: Reports $964,110 Equity Deficit at Sept. 30
----------------------------------------------------------------
Consolidated Energy Inc.'s balance sheet showed total assets of
$30.3 million and total liabilities of $31.3 million at Sept. 30,
2006, resulting in a stockholders' deficit of $964,110. The
company reported stockholders' equity of $47,232 at Dec. 31, 2005.
For the third quarter ended Sept. 30, 2006, the company reported a
net loss of $4.7 million, compared with a net income of $898,313
for the same period in the prior quarter.
Total revenue for the 2006 third quarter was $1.7 million, versus
$920,739 for the comparable quarter in 2005.
For the three months ended Sept. 30, 2006, costs and expenses
totaled $6,433,283, which included other expenses of approximately
$1.47 million related to the change in value of the convertible
debt and warrant liabilities.
The company, at Sept. 30, 2006, had cash and cash equivalents of
approximately $754,000, of which approximately $753,000 was
restricted cash. It also had negative working capital of
approximately $14.23 million.
Its operations were primarily funded through the issuance of notes
payable and convertible debentures and have also issued stock for
services in lieu of cash.
A full text-copy of the company's quarterly report on Form 10-QSB
may be viewed at no charge at http://ResearchArchives.com/t/s?16ac
Going Concern Doubt
As reported in the Troubled Company Reporter on May 25, 2006,
Killman, Murrell & Company, P.C., Houston, Texas, raised
substantial doubt about Consolidated Energy, Inc.'s ability to
continue as a going concern after auditing the Company's financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's recurring losses from operations and limited
capital resources.
About Consolidated Energy
Consolidated Energy, Inc. (OTCBB: CEIW) mines coal in Eastern
Kentucky. The Company conducts business through its wholly owned
coal-mining subsidiary, Eastern Consolidated Energy, Inc. The
Company is also engage in gas and oil exploration and development,
and develops related clean energy technologies that are
environment friendly.
DAIMLERCHRYSLER: Freightliner Will Lay Off 800 Employees
--------------------------------------------------------
Freightliner LLC, a subsidiary of DaimlerChrysler AG, announced
plans for production rate adjustments at its truck manufacturing
plant in St. Thomas, Ontario. Eight hundred employees will be
idled as a result. These changes are the first in a series of
such measures that will affect all the company's vehicle and
component assembly plants during the first quarter of 2007. As
many as 4,000 production and related workers may be affected.
All manufacturers of heavy and medium trucks, as well as the
suppliers of components used in their assembly, are facing a
dramatic reduction in volumes presently. Truck buyers in all
markets are showing hesitation to purchase trucks equipped with
the new engine technology necessary to meet the diesel exhaust
emissions standards that go into effect in Canada and the United
States on Jan. 1, 2007.
Depending on specification and weight class, Freightliner LLC
vehicles are subjected to price increases ranging from $4,600 to
$12,500, before application of taxes, for the new engines. It is
clear that all residents of North America benefit from the cleaner
atmosphere that will ultimately result, but it is equally obvious
that the costs associated with this worthy initiative are borne
almost entirely by the truck manufacturing industry's employees,
suppliers, shareholders, and dealers.
"Workforce reductions are always the last thing any of us want to
do," Freightliner LLC president and chief executive officer Chris
Patterson said. "Unfortunately it has become necessary at this
point as the entire industry is dealing with an extraordinary
market situation.
"We will continue to monitor the market closely and make
adjustments accordingly but we anticipate further reductions of up
to 3,200 workers in the first few months of 2007. We are
anticipating that demand will begin to recover in the second half
of the year, as our customers gain confidence in the new
technology, and their existing vehicles suffer the effects of
aging. We expect to be able to make some positive workforce
adjustments at that time."
Affected employees in St. Thomas were already notified.
The St. Thomas plant, operated by Freightliner Canada Ltd.,
produces the company's Sterling-brand heavy- and medium-duty
trucks.
About Freightliner LLC
Headquartered in Portland, Ore., Freightliner LLC --
http://www.freightliner.com/-- is a medium- and heavy-duty truck
manufacturer in North America. Freightliner produces and markets
Class 3-8 vehicles and is a company of DaimlerChrysler.
About DaimlerChrysler
DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops,
manufactures, distributes, and sells various automotive products,
primarily passenger cars, light trucks, and commercial vehicles
worldwide. It primarily operates in four segments: Mercedes Car
Group, Chrysler Group, Commercial Vehicles, and Financial
Services.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler, Jeep,
and Dodge brand names. It also sells parts and accessories under
the MOPAR brand.
The Chrysler Group is facing a difficult market environment in the
United States with excess inventory, non-competitive legacy costs
for employees and retirees, continuing high fuel prices and a
stronger shift in demand toward smaller vehicles. At the same
time, key competitors have further increased margin and volume
pressures -- particularly on light trucks -- by making significant
price concessions. In addition, increased interest rates caused
higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and cut
costs in the short term are being examined at all stages of the
value chain, in addition to structural changes being reviewed as
well.
DANA CORP: Wants Excl. Plan-Filing Period Extended to Sept. 2007
----------------------------------------------------------------
Dana Corporation and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to further extend
their exclusive period to propose a plan of reorganization through
and including Sept. 3, 2007, and to solicit acceptances of that
plan through and including Nov. 2, 2006.
Since their bankruptcy filing, the Debtors have made efforts to
stabilize their business and transition into Chapter 11. Corinne
Ball, Esq., at Jones Day, in New York, relates that the Debtors
have performed and substantially completed exhaustive analysis
identifying and quantifying the primary restructuring initiatives
dominating their turnaround. The Debtors have also embarked on
the negotiation and implementation phase of their restructuring,
focusing on their customers, retirees and workforce.
Ms. Ball relates that the primary thrust of this phase of the
restructuring is addressing the U.S. Operations' current loss and
cash burn situation in 2007 by pursuing interdependent
initiatives, including:
(a) Restructuring wage and benefit programs for the Debtors'
active workforce to create an appropriate and industry
competitive labor and benefit cost structure, whether
union, non-union hourly or salaried;
(b) Addressing the excessive cash requirements of the legacy
pension and other postretirement benefit liabilities that
the Debtors accumulated over the years, in large part from
prior divestitures and closed operations;
(c) Optimizing the Debtors' manufacturing footprint by
rationalizing production, moving certain machining
operations to lower cost country production sites where
feasible, achieving consolidation and right sizing of
remaining U.S. Operations;
(d) Achieving a permanent reduction and realignment of
overhead costs;
(e) Achieving positive margins for the Debtors' products by
addressing prior "pricedowns" and increased material costs
by obtaining substantial price recovery from customers;
and
(f) Achieving realistic and competitively priced material
sources for the Debtors' supply chain management systems
on appropriate terms.
According to Ms. Ball, the Debtors contemplate presenting their
2007 Business Plan to their Committees by mid-December 2006. The
Business Plan will lay out the Debtors' plans with regards to
their U.S. Operations. Ms. Ball adds that the achievement of the
Business Plan will provide a basis for emergence from Chapter 11
and the negotiation of a reorganization plan.
While the 2007 Business Plan will be presented by mid-December,
there are still many things that the Debtors need to do before it
can finally present its reorganization plan, Ms. Ball says. The
Debtors believe that finalizing their 2007 Business Plan and
negotiating the terms of their reorganization plan with their
various constituencies, together with the day-to-day tasks of
operating their businesses, will consume their time and efforts
in the coming months.
Thus, extension of the Debtors' Exclusive Periods is warranted,
Ms. Ball asserts.
About Dana Corporation
Toledo, Ohio-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). As of Sept. 30,
2005, the Debtors listed $7,900,000,000 in total assets and
$6,800,000,000 in total debts.
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.
The Debtors' exclusive period to file a plan expires on Jan. 3,
2007. They have until Mar. 5, 2007, to solicit acceptances to
that plan.
(Dana Corporation Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DANA CORP: Selling Engine Products Biz to MAHLE GmbH for $157 Mil.
------------------------------------------------------------------
As part of their restructuring efforts, Dana Corporation and its
debtor-affiliates are in the process of divesting a number of non-
core businesses to allow them to focus on their core business
operations. In October 2005, the Debtors publicly announced their
intention to divest a number of businesses, including the Engine
Products Group.
The Engine Products Group manufactures piston rings and bearings
for original equipment manufacturers and heavy-duty camshafts for
heavy-duty diesel and industrial markets. The Engine Products
Group is also involved in the global aftermarket distribution
business, including the "Clevite" operations.
In 2005, the Engine Products Group generated pro forma sales of
$674,100,000 and $505,400,000 in the first months of 2006. It
has 5,000 employees in 39 facilities located in 10 countries and
has interests in joint ventures in North America and India.
Since March 2006, Miller Buckfire & Co., LLC, the Debtors'
investment banker, has been actively engaged in marketing the
Engine Products Group. Miller Buckfire contacted approximately
50 potential buyers of the Engine Products Group. After vigorous
negotiations, the Debtors selected MAHLE GmbH as the stalking
horse bidder for the Engine Products Group.
Pursuant to an Asset Purchase Agreement, the Debtors will sell
the Engine Products Group to MAHLE GmbH for $97,700,000 in cash,
plus the assumption of certain of the Debtors' liabilities
related to the Engine Products Group. The Debtors estimate that
the total consideration from the Sale will aggregate
approximately $157,000,000.
The APA provides, among other things, that:
(a) MAHLE will purchase substantially all of the assets used
by the Debtors in their manufacture of piston rings,
bearings, and camshafts and in their aftermarket
distribution business;
(b) MAHLE will purchase all of the issued equity shares of a
newly created non-debtor affiliate in France to which
certain assets of non-debtor Glacier Vandervell SAS, which
are used as part of the Engine Products Group, will be
contributed;
(c) MAHLE will purchase substantially all of the assets used
by non-debtors, other than those contributed to the
Engines Newco, in an asset sale;
(d) MAHLE will acquire the Debtors' interests in the
Allied Ring Corporation joint venture with Riken, which
operates in certain of the facilities of the Debtors in
the United States, and Promotora de Industrias Mec nicas,
S.A. de C.V. with Grupo Condumex, S.A. de C.V. and their
interest in Perfect Circle India, Ltd.;
(e) MAHLE will take on substantially all of the employees of
the Engine Products Group;
(f) MAHLE will assume the Debtors' existing domestic
collective bargaining agreements related to the Engine
Products Group and certain related retiree medical
obligations;
(g) MAHLE will assume certain, but not all, environmental,
products liability and warranty claims and the
postpetition liabilities of the Engine Products Group,
which are listed on the Closing Statement of Net Assets;
(h) MAHLE will enter into the Victor Reinz Distribution
Agreement for the distribution of certain products
manufactured by the Debtors, which are currently
distributed by Clevite in the United States and Canada,
for a period of 10 years and will acquire certain
distribution rights in Mexico and certain countries in
Central and South America through the end of the same
10-year period; and
(i) a non-debtor affiliate will lease the facility used by the
Engine Products Group in Gravatai, Brazil, to MAHLE for up
to two years at market rent.
A full-text copy of the 152-page MAHLE APA is available for free
at http://researcharchives.com/t/s?16bc
Bidding Procedures
To maximize the value to be realized by the Debtors' estates from
the sale of the Engine Products Group, the Debtors will subject
the proposed sale of the engine business to a market test through
an auction.
The Debtors ask the U.S. Bankruptcy Court for the Southern
District of New York to approve uniform bidding procedures
that will govern the proposed sale of the Engine Products Group:
(1) To be deemed a "Qualifying Bidder," each interested party
must deliver to the Debtors, Miller Buckfire, Hunton &
Williams, L.L.P., Jones Day, Kramer Levin Naftalis &
Frankel, LLP, Fried, Frank, Harris, Shriver & Jacobson,
LLP, and Shearman & Sterling, L.L.P., a written offer no
later than Feb. 8, 2007;
(2) The written offer must, among other things, state that the
bidder is willing to purchase the Engine Products Group,
and that the bid is not subject to any due diligence or
financing contingency and is irrevocable until after the
Closing. The written offer must not seek that the Bidder
is entitled to any break-up fee or similar type of payment;
(3) A Qualifying Bid must be accompanied by a deposit that is
equal to 10% of the cash purchase price;
(4) If more than one Bid is received, the Debtors will conduct
an auction on Feb. 12, 2007, at the office of Jones
Day, located at 222 East 41st Street, in New York;
(5) For a bid to be considered a Qualifying Bid, it must
create value of at least $3,000,000 more than the sum of
the Initial Cash Consideration and the value of the
liabilities. Each overbid increment must be at least
$1,000,000 more than the Baseline Bid;
(6) If the Debtors consummate an alternative transaction other
than with MAHLE, MAHLE will receive a $1,954,000 Break-up
Fee. MAHLE will also be entitled to a reimbursement of
its actual out-of pocket expenses of up to $977,000; and
(7) If no other Qualifying Bids are timely received, a hearing
to approve the proposed sale to MAHLE will take place on
Feb. 14, 2007.
About MAHLE
Headquartered in Stuttgart, Germany, the MAHLE Group manufactures
components and systems for the combustion engine and engine
peripherals -- from piston systems, cylinder components, valve
train systems via air management systems up to liquid management
systems. With approximately 37,500 employees in more than 80
production locations and in seven research and development
centers, MAHLE expects in 2006 a sales of approximately
EUR4.3 billion.
About Dana Corporation
Toledo, Ohio-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). As of
Sept. 30, 2005, the Debtors listed $7,900,000,000 in total assets
and $6,800,000,000 in total debts.
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.
The Debtors' exclusive period to file a plan expires on Jan. 3,
2007. They have until Mar. 5, 2007, to solicit acceptances to
that plan.
(Dana Corporation Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DELPHI CORP: Cadence Wants to Proceed with Patent Litigation
------------------------------------------------------------
Cadence Innovation LLC asks the U.S. Bankruptcy Court for the
Southern District of New York to lift the automatic stay so it can
proceed with a patent infringement suit against Delphi Corporation
and its debtor-affiliates.
On Dec. 15, 1999, Patent Holding Company, predecessor-in-interest
to Cadence, commenced an action against Delphi Automotive Systems
Corp. in the U.S. District Court for the Eastern District of
Michigan, Southern Division, on account of the Debtors' alleged
direct and willful infringement of three patents.
The Debtors are still infringing the Patents by continuing to
manufacture infringing airbag covers postpetition, Dennis J.
Connolly, at Alston & Bird LLP, in Atlanta, Georgia, contends.
Subsequently, Cadence timely filed Claim Nos. 10074, 10077,
10078, 10079, 10080, 10081, 10082, 10083, 10084, 10085, 10086,
10087, 10088, 10089, 10090, 10091, 10092, 10093, 10094, 10095,
10096, 10097, 10098, 10099, 10100, 10101, 10102, 10103, 10104,
10105, 10106, 10107, 10108, 10109, 10110, 10111, 10112, 10113,
10114, 10115, 10116, and 10117.
Cadence's claims assert an unliquidated general unsecured claim on
account of the Debtors prepetition manufacture of airbag covers
that infringe on the Patents, and an unliquidated administrative
expense priority claim with respect to the Debtors' postpetition
infringement of the Patents.
Mr. Connolly informs the Court that Cadence filed its Claims
against each and every Debtor to preserve its rights against the
actual Debtor or Debtors that infringed on the Patents.
Mr. Connolly argues that Cadence's request is warranted for these
reasons:
(1) Relief from the stay will completely resolve the parties'
dispute;
(2) Relief from the stay will not interfere with the Debtors'
bankruptcy cases;
(3) As a result of presiding over the Action since 1999, the
District Court has obtained a specialized knowledge with
respect to the Action and is now a specialized forum;
(4) The interests of judicial economy and expeditious
resolution are better served in the District Court;
(5) The parties have obtained paradigm claim construction
determinations from the District Court; and
(6) Continuation of the stay will prejudice Cadence.
Cadence further asks the Court to allow the Cadence Postpetition
Claim and direct the Debtors to immediately pay the Claim once its
value is determined.
The Cadence Claims, once liquidated, will total at least
$21,000,000 on account of the Debtors' prepetition infringement
and at least $4,000,000 on account of the Debtors' postpetition
infringement, according to Mr. Connolly. The ultimate value of
the Cadence Claims will be determined at the District Court
Action.
The Debtors objected to the Cadence Claims, asserting that the
Claims are duplicative to other claims and are not reflected in
their books and records, Mr. Connolly notes.
Mr. Connolly argues that Cadence is entitled to the Postpetition
Claim because the Claim is directly attributable to the Debtors'
postpetition infringement of the Patents.
Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/--
is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology. The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide. The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts. (Delphi Bankruptcy News, Issue No. 49; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DELPHI CORP: Responds to Employees' Insurance Payment Plea
----------------------------------------------------------
Delphi Corporation and its debtor-affiliates, the Official
Committee of Equity Security Holders and the Teachers' Retirement
System of Oklahoma have responded to the request of certain former
Delphi employees to obtain advance fees under certain insurance
policies. These fees will cover defense costs they incurred in
pending and future lawsuits.
Former employees J.T. Battenberg III, Alan S. Dawes, Paul R. Free,
John G. Blahnik, Milan Belans, Catherine Rozanski, Pamela Geller,
Peter Janak, and Laura Marion want the U.S. Bankruptcy Court for
the Southern District of New York to lift the automatic stay so
that National Union Fire Insurance Company of Pittsburgh, Pa., may
advance or pay under certain insurance policies covered defense
costs, subject to National Union fully reserving its rights and
defenses and the execution of a written undertaking by each of
them to repay any amounts advanced if it ultimately is determined
that they are not entitled to coverage.
1. Debtors
The Debtors do not object to the Former Employees' request to the
extent that:
-- reasonable limitations and oversight can be ensured with
respect to any advancement by the National Union Fire
Insurance Company of Pittsburgh, Pennsylvania of defense
costs to the Former Employees under the Directors and
Officers Liability Insurance Policy and Employee Benefit
Plan Fiduciary Liability Insurance Policy; and
-- the Debtors, National Union, and the Former Employees
reserve all rights to contest the impact on the each of the
parties' rights of any advancements that the Insurer may
make to the Former Employees.
"The [Former Employees] are not the only persons with a stake in
the proceeds of the two liability insurance policies at issue,"
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Chicago, Illinois, tells the Court. The Debtors, as
well as their current and former employees other than the Former
Employees, may have direct and competing claims for the insurance
proceeds sought by the Former Employees.
Thus, the Debtors believe that the Court should craft an
equitable, provisional remedy to provide the Former Employees
with immediate, interim relief, while at the same time protect
the insurance proceeds available for named defendants and insured
persons other than the Former Employees.
Under the circumstances, therefore, the Debtors do not object to
advancement by the National Union of defense costs actually and
reasonably incurred by the Former Employees, subject to these
terms and conditions:
(a) Any advancements by National Union will not modify, amend,
abridge, or compromise any term, condition, or limitation,
either express or implied by operation of law, contained
in the Policies. All disputes between the parties about
those matters, as appropriate, will be addressed at a
later date;
(b) Any advancements by National Union will not modify, amend,
abridge, compromise, or deprive any interested party of
any of right, protection, burden, obligation, or duty
otherwise applicable or available under the Bankruptcy
Code, or any other federal, state, local, or common law,
statute, regulation, or ordinance. All disputes between
the parties about those matters, as appropriate, will be
addressed at a later date;
(c) During the pendency of the Chapter 11 cases, the Former
Employees will submit to the Court, the Debtors, and the
Official Committee of Unsecured Creditors for review and
prior approval (i) all invoices for advancements not yet
paid by the Debtors; and (ii) all future invoices for
advancements for costs and fees reasonably and actually
incurred in connection with the Securities and Exchange
Commission's litigation and investigations; and
(d) Any advancements by National Union will be capped at
$5,000,000.
The Former Employees represented that National Union "has agreed
to provide interim funding" of their advancements, pending
resolution of certain disputes between the Insurer and the
Debtors regarding particulars of policy coverage, Mr. Butler
notes.
2. Teachers' Retirement System of Oklahoma, et al.
The Teachers' Retirement System of Oklahoma, the Public
Employees' Retirement System of Mississippi, Raiffeisen
Kapitalanlage-Gesellschaft m.b.H., and Stichting Pensioenfonds
ABP are the Court-appointed Lead Plaintiffs in a consolidated
securities class action against, among others, Delphi Corporation
and its officers and directors, certain underwriters, and other
parties. The Securities Litigation is currently pending in the
United States District Court for the Eastern District of
Michigan.
In the Securities Litigation, the Lead Plaintiffs seek to recover
damages from the Debtors for alleged violations of certain
federal securities laws.
The Lead Plaintiffs assert that the automatic stay does not apply
at all to the proceeds of the Debtors' liability insurance policy
with National Union Fire Insurance Company of Pittsburgh,
Philadelphia.
The Insurance Proceeds are not property of the Debtors' estate.
The Former Employees' request to lift the stay is therefore not
necessary, Ira M. Levee, Esq., at Lowenstein Sandler, PC, in New
York, maintains.
The Lead Plaintiffs do not object to the ultimate relief sought
by the Former Employees. The Lead Plaintiffs, however, object to
the entry of an order that implies that Court approval is
necessary or that the Proceeds are property of the Debtors'
estate.
The Lead Plaintiffs propose to include this language in any order
entered by the Court in connection with the Former Employee's
Motion:
"Nothing in this Order shall constitute a determination that
the proceeds of the National Union [Liability] Policy, or any
similar policy, are property of the Debtors' estate."
3. Equity Committee
The Official Committee of Equity Security Holders asks the Court
to deny the Former Employees' request for three reasons:
(a) The Insurance Policies are property of the Debtors' estate
and any disbursement of the proceeds of the Insurance
Policies would be premature at this time;
(2) The doctrine of unclean hands bars the relief sought by
the Former Employees; and
(3) The Former Employees' claims are contingent and thus,
should be disallowed under Section 502(e)(1) of the
Bankruptcy Code.
The Former Employees are seeking to elevate their claims to
administrative priority status through their motion, Bonnie
Steingart, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP,
in New York, contends. Moreover, the Former Employees specify
neither the amount of their claims nor the amounts they believe
they will seek in the future under the Debtors' Insurance
Policies.
The Former Employees' claims for payment of their legal fees and
expenses are prepetition claims that are subject to disallowance
under the Bankruptcy Code, Mr. Steingart maintains. It is thus
inappropriate to permit the Former Employees to receive any
payment on account of their claims prior to a determination of:
(i) the scope of the Insurance Policies;
(ii) the total amount of the available insurance proceeds;
(iii) the claims pending against the Debtors that may be
satisfied out of the Insurance Proceeds; and
(iv) the total amount of the claims.
National Union has reserved all of its rights under the Insurance
Policies. Consequently, it is possible that after making
payments to the Former Employees, National Union will shift the
obligation to fund the Former Employees' defense costs on the
Debtors by seeking to have the Debtors reimburse it for all
payments made to the Former Employees, Mr. Steingart notes.
Robert M. Stern, Esq., at O'Melveny & Myers LLP, in Washington,
D.C., represents Alan Dawes.
Richard A. Rossman, Esq., and Matthew J. Lund, Esq., at Pepper
Hamilton LLP, in Detroit, Michigan, represent Paul Free.
Thomas W. Cranmer, Esq., at Miller Canfield Paddock & Stone PLC,
in Troy, Michigan, represents John Blahnik and Peter Janak.
William A. Sankbeil, Esq., at Kerr, Russell & Weber PLC, in
Detroit, Michigan, also represents John Blahnik.
William H. Jeffress, Jr., at Baker Botts L.L.P., in Washington,
D.C., represents J.T. Battenberg, III.
Eric R. Wapnick, Esq., in Bloomfield Hills, Michigan, represents
Pam Geller.
Martin E. Crandall, Esq., at Clark Hill PLC, in Detroit,
Michigan, represents Milan Belans.
Christopher A. Andreoff, Esq., at Jaffe, Raitt, Heuer & Weiss PC,
in Southfield, Michigan, represents Laura Marion.
David Dumouchel, Esq., and Laurie J. Michelson, Esq., at Butzel
Long PC, in Detroit, Michigan, represent Cathy Rozanski.
Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/--
is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology. The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide. The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts. (Delphi Bankruptcy News, Issue No. 49; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DELTA AIR: Comair Pilots Votes to Strike if Contract is Rejected
----------------------------------------------------------------
The Comair pilots, represented by the Air Line Pilots Association,
Int'l, showed their unity and resolve by voting, on Dec. 11, 2006,
to authorize their union representatives to strike if their
contract is rejected in U.S. bankruptcy court.
The 1,500-plus Comair pilots overwhelmingly supported the union's
strike authorization ballot with more than 93% of the responding
pilots voting in support of the measure. The vote demonstrates
the increased level of labor unrest at Comair, which flies as the
Delta Connection brand (Other OTC: DALRQ), just as the airline
heads into the busy holiday season.
"We continue to negotiate with Comair management in an effort to
reach a consensual agreement," said Comair MEC Chairman, Capt.
J.C. Lawson. "However, management appears to have decided that
the fate of our contract should rest in the hands of the courts,
rather than at the negotiating table with the pilots who have
contributed so much in the success of this airline."
"Make no mistake, the pilots will not tolerate company-imposed pay
and work conditions," continued Capt. Lawson. "[The] vote should
send a clear message that our pilots are united and we are ready
to take all appropriate steps in defense of our working
agreement."
The result of the strike authorization vote comes on the day that
closing written arguments were submitted to the bankruptcy court
in response to the company's 1113(c) filing. During recent
bankruptcy proceedings, Delta management revealed that Comair is
projected to earn $50 million in profits for 2006.
Over the past year, Comair pilots have made significant sacrifices
in order to keep the company financially solvent. In early 2005,
the pilots agreed to $11 million in annual concessions to help
their airline better manage its finances. Comair management has
yet to acknowledge the full value of those concessions and is now
using the bankruptcy court to demand additional wage concessions
ranging from an additional 8% to 22%. The pilots contend that
this will place Comair pilots near the bottom of the industry,
lowering the bar for future negotiations with other carriers
within the Delta family.
"Comair management could do the right thing and withdraw their
1113 motion to reject the pilots' contract, and seriously
negotiate with the pilots for a fair contract," said Capt. Lawson.
"This action would not only restore our airline's stability, but
it would be an opportunity to collectively develop solutions that
would offer contract relief in exchange for future contract
incentives or snap-back provisions. Sadly, it appears Comair
management prefers to litigate, rather than negotiate."
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 FUNDING: S&P Cuts Rating on Class M-2 Certs. to BB- from BBB
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
M-2 certificates issued by Delta Funding Home Equity Loan Trust
2000-4 to 'BB-' from 'BBB-'.
The rating remains on CreditWatch, where it was placed with
negative implications on Jan. 25, 2006.
Concurrently, the rating on the remaining class from the same
series was affirmed.
The lowered rating and continued CreditWatch placement on class M-
3 reflect:
-- Standard & Poor's determination that the previous rating
is no longer consistent with the available credit
support;
-- Monthly net losses that, on average, have outpaced
excess interest cash flow;
-- Total delinquencies of 51.53%, more than two-thirds of
which are severe; and,
-- Loss projections indicating that the current performance
trend may result in a principal write-down to the class
M-2 certificates within 15 months.
If the credit support continues to erode, further negative rating
actions can be expected. Conversely, if pool performance improves
and credit support is not further compromised, the rating agency
will affirm the rating and remove it from CreditWatch.
The affirmations reflect sufficient levels of credit support to
maintain the current ratings, despite the high level of
delinquencies. To date, cumulative realized losses are $9,942,220
million, or 8.65% of the original pool balance.
Credit support for classes M-1 and M-2 is provided by excess
interest and subordination, and the classes no longer benefit from
overcollateralization.
The collateral consists of fixed- and adjustable-rate, first- and
second-lien home equity loans secured by one- to four-family
residential properties.
Rating Lowered And Remaining On CreditWatch Negative
Delta Funding Home Equity Loan Trust 2000-4
Asset-Backed Certificates
Rating
------
Class To From
----- -- ----
M-2 BB-/Watch Neg. BBB-/Watch Neg.
Rating Affirmed
Delta Funding Home Equity Loan Trust 2000-4
Asset-Backed Certificates
Class Rating
----- ------
M-1 AA
DOLE FOOD: Posts $56.1 Million Net Loss in Period Ended October 7
-----------------------------------------------------------------
Dole Food Company Inc. reported a $56.1 million net loss on
$1.8 billion of revenues for the third quarter ended Oct. 7, 2006,
compared with $17.6 million of net income on $1.6 billion of
revenues for the third quarter ended Oct. 8, 2005.
Revenues increased as a result of higher sales in the company's
fresh fruit, fresh vegetables and packaged foods operating
segments.
The net loss is primarily due to an operating loss of $22 million
in the third quarter of 2006, compared to an operating income of
$26.7 million earned in the prior year, due to lower operating
results from the company's fresh-cut flowers, packaged foods and
fresh fruit operating segments, and the $15.7 million increase in
interest expenses as a result of additional borrowings and higher
effective market-based borrowing rates on the company's debt
facilities.
At Oct. 7, 2006, the company's balance sheet showed $4.5 billion
in total assets, $4.1 billion in total liabilities, $23.6 million
in minority interests, and $378.3 million in total stockholders'
equity.
In the three quarters ended Oct. 7, 2006, cash flows provided by
operating activities were $85.3 million lower, primarily due to
lower earnings and lower payables, due in part to the 2005 accrual
of income taxes payable related to the provision on repatriated
foreign earnings, as well as the timing of payments, partially
offset by lower levels of expenditures for inventory, primarily in
the packaged foods business due to lower inventory build, and
higher accrued liabilities due in part to the timing of payments.
Cash flows used in investing activities decreased $41.9 million
during 2006 primarily due to the first quarter 2005 payment of
$47.1 million to Saba shareholders in connection with the
company's purchase of the remaining 40% minority interest.
Cash flows provided by financing activities increased
$63.8 million due to higher current year debt borrowings of
$155.3 million, net of repayments and an equity contribution of
$28.4 million made by Dole Holding Company, LLC, the company's
immediate parent during 2006. These items were offset by an
increase in dividends of $89.8 million paid to Dole Holding
Company, LLC, during 2006 compared to 2005 as well as a
distribution of additional paid-in capital to Dole Holding
Company, LLC during the third quarter of 2006 of $31 million.
Fresh-cut Flowers Business Restructuring
During the third quarter of 2006, the company restructured its
fresh-cut flowers division to better focus on high-value products
and flower varieties, and position the business unit for future
growth. In connection with this restructuring, the fresh-cut
flowers division has ceased its farming operations in Ecuador and
will close two farms in Colombia and downsize other Colombian
farms.
During the third quarter ended Oct. 7, 2006, total restructuring
and impairment costs incurred amounted to approximately
$5.9 million and $22.3 million, respectively. The $5.9 million of
restructuring costs relate to approximately 3,500 employees who
will be severed by the end of fiscal 2007. As of Oct. 7, 2006, no
restructuring costs had been paid.
Restructuring of Saba Business
During the first quarter of 2006, the commercial relationship
substantially ended between the company's wholly-owned subsidiary,
Saba Trading AB and Saba's largest customer. Saba imports and
distributes fruit, vegetables and flowers in Scandinavia. Saba's
financial results are included in the fresh fruit reporting
segment.
The company restructured certain lines of Saba's business and
expects to incur approximately $13 million of total related costs.
Total restructuring and fixed asset write-offs incurred as of
Oct. 7, 2006, amounted to approximately $10.1 million, of which
$7.7 million is included in cost of products sold and $2.4 million
in selling, marketing, and general and administrative expenses in
the condensed consolidated statements of operations. Total
restructuring costs of $9.6 million include $7.9 million of
employee severance costs, which impacted 245 employees as well as
$1.7 million of contractual lease obligations. Fixed asset write-
offs of $0.5 million were also incurred as a result of the
restructuring.
Write-off of Crop Related Costs
In connection with the company's on-going farm optimization
programs in Asia, approximately $6.7 million of crop related costs
were written-off during the third quarter of 2006. The
$6.7 million non-cash charge has been included in cost of products
sold in the condensed consolidated statements of operations.
Amendment and Restatement of Credit Facilities
On April 12, 2006, the company completed an amendment and
restatement of its senior secured credit facilities. The company
obtained $975 million of term loan facilities consisting of:
* $225 million related to "Term Loan B;"
* $750 million related to "Term Loan C;" and
* $100 million in a pre-funded letter of credit facility.
The proceeds of the term loans were used to repay the outstanding
term loans under the company's then existing senior secured credit
facilities which consisted of Term Loan A, denominated in Japanese
yen, and Term Loan B. In addition, the company paid a dividend of
$160 million during the second quarter of 2006 to its immediate
parent, Dole Holding Company, LLC, which proceeds were used to
repay its Second Lien Senior Credit Facility. The weighted
average variable interest rate at Oct. 7, 2006, for the term loan
facilities was 7.5%.
In addition, the Company entered into a new asset based revolving
credit facility of $350 million. The facility is secured and is
subject to a borrowing base consisting of up to 85% of eligible
accounts receivable plus a predetermined percentage of eligible
inventory, as defined in the credit facility. As of Oct. 7, 2006,
the ABL revolver borrowing base was $305.6 million and the amount
outstanding under the ABL revolver was $111.2 million. The
weighted average variable interest rate at Oct. 7, 2006, for the
ABL revolver was 7.7%.
Interest Rate Swap Agreement
During June 2006, the company entered into an interest rate swap
agreement in order to hedge future changes in interest rates.
This agreement effectively converted $320 million of borrowings
under Term Loan C, which is variable-rate debt, to a fixed rate
basis through June 2011. The interest rate swap fixed the
interest rate at 7.2%. The fair value of the interest rate swap
was a liability of $6.2 million at Oct. 7, 2006.
Simultaneously, the company executed a cross currency swap to
synthetically convert $320 million of Term Loan C into Japanese
yen denominated debt in order to effectively lower the U.S. dollar
fixed interest rate of 7.2% to a Japanese yen interest rate of
3.6%. Since the cross currency swap does not qualify for hedge
accounting, all gains and losses are recorded through other income
(expense), net in the condensed consolidated statements of
operations. The fair value of the cross currency swap was an
asset of $19.4 million at Oct. 7, 2006.
Business Acquisition
On Oct. 3, 2006, Jamaica Producers Group Ltd. accepted the
company's offer to purchase from JPG the 65% of JP Fruit
Distributors Ltd. that the company does not already own for
$41.9 million in cash. The transaction closed during the fourth
quarter of 2006. JP Fruit Distributors Ltd. imports and sells
fresh produce in the United Kingdom. The company is considering
expressions of interest by potential partners with respect to the
ownership and operation of Jamaica Producers Group Ltd.
Full-text copies of the company's consolidated financial
statements for the third quarter ended Sept. 30, 2006, are
available for free at http://researcharchives.com/t/s?168a
About Dole Food Co.
Based in Westlake Village, California, Dole Food Company, Inc.,
-- http://www.dole.com/-- is the world's largest producer and
marketer of high-quality fresh fruit, fresh vegetables, and fresh-
cut flowers based on revenues. Dole markets a growing line of
packaged and frozen foods and is a produce industry leader in
nutrition education and research.
* * *
As reported in the Troubled Company Reporter on Sept. 27, 2006,
Moody's Investors Service's confirmed its Ba3 Corporate Family
Rating for Dole Food Company Inc.
EDDIE BAUER: Opening New Store at Quinte Mall in Belleville
-----------------------------------------------------------
Eddie Bauer Inc. will open a new 5,377 square foot store at the
Quinte Mall in Belleville, Ontario, in conjunction with its grand
opening celebration on Dec. 15, 2006.
The location will open featuring the company's Holiday 2006
Collection, including heritage sweaters and timeless down
outerwear.
Headquartered in Redmond, Washington, Eddie Bauer Holdings, Inc.
-- http://www.eddiebauer.com/-- is a specialty retailer that
sells casual sportswear and accessories for the "modern outdoor
lifestyle." Established in 1920 in Seattle, Eddie Bauer
believes the Eddie Bauer brand is a nationally recognized brand
that stands for high quality, innovation, style, and customer
service. Eddie Bauer products are available at approximately
375 stores throughout the United States and Canada, through
catalog sales and online at http://www.eddiebaueroutlet.com/The
Company also participates in joint venture partnerships in Japan
and Germany and has licensing agreements across a variety of
product categories. Eddie Bauer employs approximately 10,000
part-time and full-time associates in the United States and
Canada.
* * *
As reported in the Troubled Company Reporter on Oct. 24, 2006,
Moody's Investors Service confirmed its B2 Corporate Family Rating
for Eddie Bauer, Inc. and its B2 rating on the company's $300
million term loan, in connection with the implementation
of its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector. In addition,
Moody's assigned an LGD4 rating to those notes, suggesting
noteholders will experience a 55% loss in the event of a default.
EQUITY INNS: Secured Debt Reduction Cues Moody's Positive Outlook
-----------------------------------------------------------------
Moody's Investors Service affirmed the Ba3 issuer rating for
Equity Inns Partnership, L.P., and the B2 preferred stock rating
for Equity Inns, Inc.
The rating outlook was revised to positive, from stable.
The rating outlook change reflects Equity Inns' success in
decreasing its secured debt and significantly growing its
unencumbered property pool, while making progress on reducing the
concentration of Hampton Inns in its hotel investment portfolio.
In addition, Equity Inns has continued to grow and upgrade its
holdings by selling or renovating older assets while purchasing
new properties through its network of hotel developers. The REIT
has also benefited from the cyclical strength in the hospitality
industry, as well as the relative stability of its chosen segment
-- select service without food and beverage.
The short-term management contracts and a wide variety of managers
employed by Equity Inns are a plus, in Moody's opinion, since they
increase the REIT's control over its assets and reduce its
exposure to any single manager. Moody's also positively views the
agreement with Hyatt to convert Equity Inns' AmeriSuites into
Hyatt Place properties.
These credit strengths are tempered by remaining geographic
concentration in Equity Inns' portfolio, most notably in Florida,
which accounts for close to 24% of revenue. The REIT's exposure
to Hampton Inns is also high at 36% of revenue. An expected
gradual slowdown in the lodging sector is an additional concern.
The positive rating outlook reflects Moody's expectation that
Equity Inns will continue to increase the diversification of its
hotel portfolio both geographically and in terms of brands while
maintaining stable leverage and use of secured debt, and
demonstrating consistent profitable growth.
A rating upgrade would depend on added diversification in Equity
Inns' hotel assets, with Hampton Inns' contribution reduced closer
to 30% revenue, and no individual state accounting for over 20% of
revenue. The REIT would also have to grow its gross asset base
closer to $2 billion while maintaining secured debt below 38% of
gross assets, effective leverage around 50% of gross assets, and
fixed charge coverage at above 2.1X. Success in Hyatt Place
conversions that help drive RevPAR would also be important.
The rating outlook would likely be returned to stable should gains
in unencumbered assets be reversed, as would an increase in
secured debt above 40% of gross assets, a rise in effective
leverage above 50% of gross assets, or a decline in coverage below
1.8X. Failure to maintain a growth trajectory, or challenges in
executing the Hyatt Place conversions, would also be perceived
negatively.
These ratings were affirmed with a positive outlook:
* Equity Inns, Inc.
-- Preferred stock at B2
* Equity Inns Partnership, L.P.
-- Issuer rating at Ba3
Equity Inns, Inc., based in Memphis, Tennessee, USA, is a
self-advised real estate investment trust and the largest US REIT
focused on the upscale extended stay, all-suite and mid-scale
limited-service segments of the hotel industry. Equity Inns
became publicly traded in 1994 and is now the oldest public hotel
REIT in the USA with 125 hotels in 35 states. At Sept. 30, 2006,
Equity Inns' total assets were $1.1 billion.
ESCO CORP: S&P Assigns B Rating on Proposed $275-Mil. Notes
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Portland, Ore.-based ESCO Corp. At the same
time, Standard & Poor's assigned its 'B' ratings to the company's
proposed $275 million, seven-year senior unsecured notes.
The outlook is stable.
Proceeds from the issuance will be used to complete a partial
leveraged ESOP buyout transaction following the sale of two
business units.
"The ratings reflect ESCO's highly leveraged financial profile as
well as the cyclical and competitive nature of its markets,
somewhat offset by the company's technical expertise and strong
recent operating performance," said Standard & Poor's credit
analyst Dan Picciotto.
ESCO is a leading manufacturer of engineered products for the
mining, construction and industrial sectors as well as turbine
components. The Engineered Products Group produces tooth and lip
systems, buckets and other products, and will represent around 80%
of sales following the divestitures.
This segment benefits from the consumable wear-part nature of much
of its sales. The other 20% of sales will be generated by the
Turbine Technologies division, which manufactures precision cast
components for aerospace and industrial gas turbine applications.
The company plans on selling its Integrated Manufacturing Group
and Engineered Metals Group, which together
represent around 9% of EBITDA.
FAIRCHILD SEMICONDUCTOR: Management Approves Restructuring Program
------------------------------------------------------------------
Fairchild Semiconductor disclosed that management has approved a
restructuring plan involving the consolidation and simplification
of certain supply chain planning processes and the streamlining
and transfer of certain information systems support activities.
These transfers will allow for greater operating efficiency as
resources will now be deployed much closer to key Asian business
operations. Direct financial benefits will also result from the
move to lower cost locations.
The Company expects to record restructuring charges of
approximately $4 million in the fourth quarter of 2006 and
approximately $500,000 in the first quarter of 2007 for severance
and asset impairment costs related to these actions which are
expected to generate future cost savings of approximately
$3 million per year.
In addition, Fairchild reiterated its previous guidance for fourth
quarter 2006 revenue to be flat to up 2% and gross margins to be
50 - 200 basis points lower sequentially. Fairchild expects to
report its fourth quarter financial results before the market
opens on Jan. 25, 2007.
About Fairchild
Fairchild Semiconductor -- http://www.fairchildsemi.com/--
supplies power products to electronic applications in the
computing, communications, consumer, industrial and automotive
segments. Fairchild's 9,000 employees design, manufacture and
market power, analog & mixed signal, interface, logic, and
optoelectronics products.
* * *
As reported in the Troubled Company Reporter on Nov. 6, 2006,
Moody's Investors Service confirmed Fairchild Semiconductor
Corp.'s Ba3 corporate family rating in connection with the rating
agency's implementation of its new Probability-of-Default and
Loss-Given-Default rating methodology.
FERRELLGAS PARTNERS: Posts $29.5MM Net Loss in Fiscal 1st Quarter
-----------------------------------------------------------------
Ferrellgas Partners LP reported earnings for its fiscal first
quarter ended Oct. 31, 2006.
The seasonal net loss for the fiscal quarter was $29.5 million, as
compared to $25.8 million in first quarter of fiscal 2006. Due to
the seasonal nature of the propane industry, the partnership has
historically experienced a net loss during its fiscal first
quarter as fixed costs exceed off-season cash flow. The increased
net loss for the quarter primarily related to fixed costs
associated with recently completed acquisitions and growth capital
investments made since the same quarter last year.
Adjusted EBITDA for the first quarter of fiscal 2007 was
$19.7 million. This compared to a record $20.2 million achieved
in the first quarter of fiscal 2006, which more than doubled the
Adjusted EBITDA reported in the first quarter of fiscal 2005.
Gross profit for the first quarter of fiscal 2007 was
$127.1 million, as compared to $127.6 million achieved in the
first quarter of fiscal 2006. These results reflect the
partnership's continued margin improvement which has helped to
offset the impact of customer conservation on off-season propane
gallon demand, which for the first quarter of fiscal 2007 was 161
million gallons, compared to 167 million gallons sold in the first
quarter of fiscal 2006.
Operating expense for the first quarter of fiscal 2007 was
$90 million, as compared to $89.7 million in the first quarter of
fiscal 2006 and general and administrative expense was
$11.1 million, materially unchanged from the prior fiscal year's
first quarter results. Equipment lease expense for the first
quarter of fiscal 2007 was $6.6 million, down from $7 million in
the first quarter of fiscal 2006.
"We were pleased to be able to repeat last year's record
performance, despite slightly lower propane demand realized
industry-wide this Fall," said James E. Ferrell, Chairman and
Chief Executive Officer. "We have been focused during the off-
season on organic customer growth, leveraging our new operating
capabilities. We stand more ready than ever to face whatever
Mother Nature may throw at us this year."
Headquartered in Overland Park, Kansas, Ferrellgas Partners, LP --
http://www.ferrellgas.com/-- through its operating partnership,
Ferrellgas, LP, is a propane marketer in the United States.
Ferrellgas serves more than 1 million customers in all 50 states,
the District of Columbia, Puerto Rico, and Canada, and has annual
sales volumes approaching 1 billion retail gallons. Ferrellgas
employees indirectly own more than 20 million common units of the
partnership through an employee stock ownership plan.
* * *
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the broad energy midstream sector, encompassing
companies that engage in the extraction, treating, transmission,
distribution, and logistics for crude oil, natural gas, and other
hydrocarbon products, the rating agency affirmed its Ba3 corporate
family rating on Ferrellgas Partners L.P.
FIRST WORLD: Games Committee Faces Bankruptcy
---------------------------------------------
The First World Outgames' organizing committee is bankrupt with
$2.09 million in debt, Hilary White writes for LifeSiteNews.com.
LifeSiteNews.com reports that the homosexual sporting event had
lost over $5 million. The First World Outgames, held in Montreal
last summer was supported in part by a $3 million donation from
the Province of Quebec.
The games committee, according to the French-language TV Channel
LCN, has 30 days to try to satisfy its creditors, including the
celebrity spokesmen who publicized the event.
Among the creditors are retired tennis star and gay-athlete icon
Martina Navratilova, which is still owed half the $39,384; Olympic
swimming champion Mark Tewksbury asserted $1,055 claim; and Cirque
du Soleil claimed for $48,209, LifeSiteNews.com relates.
According to the report, when the government declined to pay the
bills, there were several unpaid suppliers for the games. The
Outgames reported a deficit estimated at $5.3 million.
FORD MOTOR: S&P Holds Junk Rating on Proposed $4.5 Bil. Sr. Debt
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' bank loan and
'2' recovery ratings on Ford Motor Co. after the company increased
the size of its proposed senior secured credit facilities to
between $17.5 billion and $18.5 billion, up from $15 billion.
The 'B' bank loan rating and '2' recovery rating indicate the
expectation of substantial recovery of principal in the event of a
payment default.
In addition, Standard & Poor's affirmed its 'CCC+' issue rating on
Ford's proposed $4.5 billion senior unsecured convertible debt
issue, which Ford increased from the earlier $3 billion. The size
of this issue may increase to $4.95 billion if underwriters
exercise their option to purchase an additional $450 million of
notes.
The secured credit facilities consist of a revolving credit
facility, which Standard & Poor's believes will not exceed
$11.5 billion, up from the original $8 billion, and a $7 billion
term loan B. The size of the term loan B, as well as a
$1.5 billion permitted basket of non-loan exposure, remains
unchanged.
Although the substantial increase in the size of the revolving
credit facility does not change our '2' recovery rating, estimated
recoveries according to Standard & Poor's default and emergence
scenario are now at the lower end of the '2' range.
Standard & Poor's also notes that the increased revolving credit
facility reduces the cushion Ford has above a 1x borrowing-base
coverage test, one of the primary loan covenants afforded to
secured lenders. Pro forma for the proposed transactions, Ford
would have availability to fully draw the revolving credit
facility with borrowing-base coverage of about 1.15x, down from
1.4x earlier.
Because Ford must maintain coverage of at least 1x under this
test, a significant future decline in collateral book values or
eligibility may reduce availability under the revolving credit
facility.
In addition to increasing the size of the financing package, Ford
also amended the terms under which it may borrow an additional
$2 billion of first-lien debt at a later date. To access this
additional $2 billion of borrowings, Ford must add its minority
investment in Mazda Motor Corp. as collateral for all senior
secured facilities or reduce the amount of availability under the
revolving credit facility by a like amount.
Ratings List:
* Ford Motor Co.
-- Corporate credit rating at B/Negative/B-3;
-- Senior secured credit facilities at B; and
-- $4.5 billion senior unsecured debt at CCC+
GEORGIA-PACIFIC: S&P Rates Proposed $1-Billion Senior Notes at B
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' senior
unsecured debt rating to the proposed $1 billion senior unsecured
notes of Georgia-Pacific Corp. to be issued in two tranches
maturing in 2015 and 2017 under Rule 144a without registration
rights.
The rating is based on preliminary terms and conditions.
Proceeds from the notes offering together with $1.25 billion of
add-on loans to GP's senior secured first-lien credit facility
will be used to repay the company's $2.25 billion senior secured
second-lien term loan.
The new notes are rated two notches below GP's corporate credit
rating, reflecting their disadvantaged position in the company's
capital structure. Certain of GP's domestic subsidiaries that
represent a significant portion of the company's EBITDA and
consolidated assets will guarantee the notes.
However, there are meaningful priority liabilities, including the
$10.25 billion senior secured first-lien bank facility, that rank
ahead of these notes. Although the guarantees provide a benefit
not afforded to the holders of GP's existing senior unsecured
notes, which are also rated 'B', Standard & Poor's believes
the advantage is not sufficient to warrant a distinction in the
ratings.
GP had about $16.8 billion of debt adjusted for various debt-like
obligations outstanding at Sept. 30, 2006.
The ratings on Atlanta, Georgia-based GP reflect the company's
very aggressive debt leverage, forest products industry
cyclicality, and highly competitive end markets.
The ratings also reflect the company's large-scale manufacturing
base, broad product diversity, good cost positions in several
segments, and leading market shares in most of the product
categories in which it competes.
Ratings List:
* Georgia-Pacific Corp.
-- Corporate credit rating at BB-/Positive/B-2
-- Senior secured bank loan at BB-/Recovery rating: 2
Ratings Assigned:
-- $1 billion senior unsecured notes at B
GEORGIA-PACIFIC: S&P Affirms BB- Rating on Sr. Secured Bank Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' senior
secured bank loan and '2' recovery ratings on the $1.25 billion
add-on to the senior secured first-lien bank facility of Georgia-
Pacific Corp. The company has reported that it plans to add on
$250 million to its five-year revolving credit facility and
$1 billion to its seven-year term loan B.
Pro forma for the add-ons, the $10.25 billion facility will
consist of a $2 billion revolving credit facility, a $2 billion
five-year term loan A, and a $6.25 billion term loan B.
The first-lien loan rating is the same as the corporate credit
rating, and the '2' recovery rating indicates the expectations for
substantial recovery of principal in the event of a payment
default.
The proceeds from the credit facility add-ons and other financing
will be used to repay GP's $2.25 billion second-lien term loan C.
At closing, the 'B+' senior secured bank loan and '3' recovery
ratings on the second-lien loan will be withdrawn.
Ratings list:
* Georgia-Pacific Corp.
-- Corporate credit rating at BB-/Positive/B-2
-- $10.25 billion senior secured bank facility at BB-
GLOBAL EMPIRE: Ch. 11 Trustee Wants Case Converted to Chapter 7
---------------------------------------------------------------
David Askanase, the Chapter 11 Trustee for the estate of Global
Empire Investments and Holdings LLC, asks the U.S. Bankruptcy
Court for the Southern District of Texas in Houston to convert the
Debtor's Chapter 11 case into a Chapter 7 liquidation proceeding.
The Trustee informs the Court that a Chapter 7 conversion would
better serve the creditors of the Debtors' bankruptcy estate. Mr.
Askanase did not disclose any further information in his
conversion motion.
Headquartered in Houston, Texas, Global Empire Investments &
Holdings, LLC, filed for chapter 11 protection on Dec. 6, 2005
(Bankr. S.D. Tex. Case No. 05-95389). Richard L. Fuqua, II, Esq.,
at Fuqua & Keim, represents the Debtor in its restructuring
efforts. David J. Askanase serves as Chapter 11 Trustee for the
Debtor's estate. When the Debtor filed for protection from its
creditors, it estimated assets and debts between $10 million to
$50 million.
GRAHAM PACKAGING: Warren Knowlton Replaces Philip Yates as CEO
--------------------------------------------------------------
Graham Packaging Holdings Company disclosed that Warren D.
Knowlton has been named as the company's chief executive officer,
effective Dec. 4, 2006, replacing Philip R. Yates, who has
retired. Mr. Knowlton will also join the company's board of
directors.
Mr. Knowlton, served as chief executive officer and executive
director of Morgan Crucible PLC, from December 2002 to
August 2006. Morgan Crucible is a specialty manufacturer of
carbon and ceramic products. Prior to joining Morgan Crucible, he
was an executive director of a glass-maker Pilkington PLC. With
Pilkington, he first served as president of Global Building
Products and then as president of Global Automotive. Mr. Knowlton
joined Pilkington in 1997. Since 2000, Mr. Knowlton has served as
a non-executive director of Smith & Nephew PLC, Filtrona PLC, and
Ameriprise Financial.
Philip R. Yates, who has been with Graham Packaging for more than
30 years and has served as chief executive officer since 1998, has
agreed to continue with the company as chairman of the board.
Mr. Yates will continue to be involved in the oversight of the
company's operations. Mr. Yates already serves on the Board and
the company expects he will be named chairman at the next meeting.
Appointment of Mark Burgess as CFO
Mark Burgess has been named chief financial officer, succeeding
John E. Hamilton, who is leaving after a 22-year career with
Graham Packaging to pursue other interests, including his family's
business.
Mr. Burgess served as president and chief executive officer, as
well as chief financial officer, of Anchor Glass Container
Corporation, from May 2005 until September 2006, where he led the
company through a successful financial restructuring. He
previously served as executive vice president and chief financial
officer of Clean Harbors Environmental Services, Inc., from May
2003 until May 2005 and prior to that he served as executive vice
president and chief financial officer at JL French Automotive
Castings, Inc, from November 2000 to May 2003.
Chinh Chu, senior managing director of The Blackstone Group,
majority owner of Graham Packaging, said, "Warren Knowlton and
Mark Burgess are extremely talented and experienced executives,
and we are excited to have them join Graham Packaging. We would
also like to thank Phil Yates and John Hamilton for their many
dedicated years of service to Graham Packaging. We are pleased
that Phil will be remaining as the company's chairman."
About Graham Packaging Holdings
Graham Packaging Holdings Company is a Pennsylvania limited
partnership. Graham Packaging Company, L.P., Holdings' wholly-
owned subsidiary is a worldwide leader in the design, manufacture
and sale of customized blow molded plastic containers for the
branded food and beverage, household, personal care/specialty and
automotive lubricants product categories and, as of the end of
September 2006, operated 85 manufacturing facilities throughout
North America, Europe and South America.
The Blackstone Group, an investment firm, holds 78.6 percent
equity in Graham Packaging Holdings Company. MidOcean Capital
Investors, L.P., holds 4.1 percent. A group of management
executives holds 2.3 percent. The family of Graham Packaging
founder Donald Graham holds 15 percent.
* * *
Graham Packaging Holdings Company carries Standard & Poor's B
rating for both its LT Foreign Issuer Credit and LT Local Issuer
Credit.
GRAHAM PACKAGING: Posts $15 Million Net Loss in 2006 Third Quarter
------------------------------------------------------------------
Graham Packaging Holdings Company reported a $15 million net loss
on $643 million of sales for the third quarter ended Sept. 30,
2006, compared with a $2.2 million net loss on $615.1 million of
sales in the same period in 2005.
At Sept. 30, 2006, the company's balance sheet showed
$2.52 billion in total assets and $3.05 billion in total
liabilities, resulting in a $526.1 million total partners'
deficit.
The increase in net loss is primarily due to the decrease in gross
profits to $69.1 million in the third quarter of 2006, from
$79.2 million in the third quarter of 2005.
Net sales for the three months ended Sept. 30, 2006, increased
$27.9 million to $643.0 million from $615.1 million for the three
months ended Sept. 30, 2005. The increase in sales was primarily
due to an increase in resin pricing and volume, net of changes in
mix and price erosion.
The decrease in gross profit was primarily due to a reduction to
depreciation expense in 2005 related to finalizing the fixed asset
valuation for O-I Plastic of $11.5 million, a net increase in
project costs of $1.6 million and a net decrease in gross profit
related to ongoing business of $3.4 million, partially offset by a
decrease in non-recurring charges of $2.7 million, a favorable
impact from changes in foreign currency exchange rates of $0.5
million and a net decrease in the loss on disposal of fixed assets
of $3.2 million.
Interest expense increased $900,000 to $48.3 million for the three
months ended Sept. 30, 2006, from $47.4 million for the three
months ended Sept. 30, 2005. The increase was primarily related
to an increase in interest rates.
Income tax provision increased $2 million to $6.6 million for the
three months ended Sept. 30, 2006, from $4.6 million for the three
months ended Sept. 30, 2005. The increase was primarily related
to the establishment of a valuation allowance on a portion of the
tax benefit due to taxable losses and tax credits in North
America, partially offset by decreased earnings in North America
and Europe.
Full-text copies of the company's consolidated financial
statements for the third quarter ended Sept. 30, 2006, are
available for free at: http://researcharchives.com/t/s?1633
About Graham Packaging Holdings
Graham Packaging Holdings Company is a Pennsylvania limited
partnership. Graham Packaging Company, L.P., Holdings' wholly-
owned subsidiary is a worldwide leader in the design, manufacture
and sale of customized blow molded plastic containers for the
branded food and beverage, household, personal care/specialty and
automotive lubricants product categories and, as of the end of
September 2006, operated 85 manufacturing facilities throughout
North America, Europe and South America.
The Blackstone Group, an investment firm, holds 78.6 percent
equity in Graham Packaging Holdings Company. MidOcean Capital
Investors, L.P., holds 4.1 percent. A group of management
executives holds 2.3 percent. The family of Graham Packaging
founder Donald Graham holds 15 percent.
* * *
Graham Packaging Holdings Company carries Standard & Poor's B
rating for both its LT Foreign Issuer Credit and LT Local Issuer
Credit.
GRANITE BROADCASTING: Files for Chapter 11 Protection in New York
-----------------------------------------------------------------
Granite Broadcasting Corporation, along with certain of its
subsidiaries, has voluntarily filed, on Dec. 11, 2006, petitions
for reorganization under chapter 11 of the U.S. Bankruptcy Code in
the U.S. Bankruptcy Court for the Southern District of New York.
The filing included a plan of reorganization that has been pre-
negotiated with the company's secured debt holders and is designed
to protect Granite's operations, allow for an orderly
reorganization, and restore financial health to the company's
balance sheet.
Under the reorganization process Granite will continue to operate
its businesses in the ordinary course, and its stations will
continue to serve their local communities, including their viewers
and advertisers.
"We operate competitive and profitable television stations, and
despite our need to restructure our corporate balance sheet, we
have continued to successfully grow the business," W. Don
Cornwell, Chairman and Chief Executive Officer, said. "The
strategic arrangement we entered into in 2005 with Malara
Broadcast Group in Duluth and Fort Wayne is off to an excellent
start. Our acquisition of the CBS affiliate in Binghamton earlier
this year added an exceptionally strong station to our portfolio
and expanded our reach to almost 60% of Upstate New York
households. During the past year we launched additional news
programming in Buffalo, Fresno, Fort Wayne, Peoria and Duluth, and
introduced new channels affiliated with the CW Network and My
Network TV in Detroit, Duluth, Fort Wayne, Peoria and Binghamton.
We are very proud of our colleagues who have worked diligently to
expand the services we provide to our communities.
"We have been candid about the Company's need to restructure its
corporate balance sheet. In that regard, we explored a wide range
of alternatives, including the sale of stations formerly
affiliated with The WB Network in San Francisco and Detroit. Our
ability to sell those stations on an acceptable basis was directly
impacted in January 2006 by The WB Network's announcement that it
would cease operations. This unexpected and damaging decision
forced us to seek other alternatives. Together with our financial
advisor, Houlihan Lokey Howard & Zukin, we evaluated and exhausted
a number of strategic options. However, we were unable to find an
alternative long-term solution that would have permanently
addressed our capital structure."
Mr. Cornwell concluded, "We are pleased to report that we enter
this filing with the support of our secured debt holders, who have
worked with us to complete a comprehensive plan of reorganization
that, once approved by the courts, will have a positive impact on
our business by reducing our corporate debt by over $275 million
to approximately $230 million. The advanced agreement with our
secured debt holders should expedite the restructuring process and
enable us to complete the reorganization by the first half of
2007. This restructuring will provide us with additional
resources to re-invest in and grow our local television
businesses, and enables us to continue to seek out new stations
and markets."
Under the proposed plan of reorganization, it is anticipated that
the company will become privately held, and that the current
secured debt holders will exchange their existing notes for a
combination of new notes and new common stock, and the current
common and preferred stockholders will exchange their existing
stock for shares of the newly reorganized company.
Granite Broadcasting Corporation (OTC Bulletin Board: GBTVK) --
http://www.granitetv.com/-- owns and operates, or provides
programming, sales and other services to 23 channels in these 11
markets: San Francisco, California; Detroit, Michigan; Buffalo,
New York; Fresno, California; Syracuse, New York; Fort Wayne,
Indiana; Peoria, Illinois; Duluth, Minnesota-Superior, Wisconsin;
Binghamton, New York; Utica, New York and Elmira, New York. The
Company's channel group includes affiliates of NBC, CBS, ABC, CW
and My Network TV, and reaches approximately 6% of all U.S.
television households.
GRANITE BROADCASTING: Case Summary & 20 Largest Unsec. Creditors
----------------------------------------------------------------
Lead Debtor: Granite Broadcasting Corporation
767 Third Avenue
New York, NY 10017
Bankruptcy Case No.: 06-12984
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
WEEK-TV License, Inc. 06-12985
WXON, Inc. 06-12987
WXON License, Inc. 06-12988
KBWB, Inc. 06-12990
KBWB License, Inc. 06-12991
Type of Business: The Debtor owns and operates, or provides
programming, sales and other services to 23
channels in 11 markets: San Francisco,
California; Detroit, Michigan; Buffalo, New
York; Fresno, California; Syracuse, New York;
Fort Wayne, Indiana; Peoria, Illinois; Duluth,
Minnesota-Superior, Wisconsin; Binghamton, New
York; Utica, New York and Elmira, New York. The
company's channel group includes affiliates of
NBC, CBS, ABC, CW and My Network TV, and reaches
approximately 6% of all U.S. television
households. See http://www.granitetv.com/
Chapter 11 Petition Date: December 11, 2006
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Ira S. Dizengoff, Esq.
Akin, Gump, Strauss, Hauer & Feld, LLP
590 Madison Avenue
New York, NY 10022
Tel: (212) 872-1000
Fax: (212) 872-1002
Debtors' Financial Advisor: Houlihan Lokey Howard & Zukin
Capital, Inc.
Debtors' Noticing Agent: The Trumbull Group, LLC
Debtors' Financial Condition as of Sept. 30, 2006:
Total Assets: $443,563,020
Total Debts: $641,100,000
Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
D.B. Zwirn Specialist Guaranty $30,000,000
Opportunities Fund, L.P.
Elizabeth Leckie
Allen & Overy LLP
1221 Avenue of the Americas
New York, NY 10020
Tel: (212) 610-6317
Katz Media Trade $35,514
125 West 55th Street
New York, NY 10019
Delaware Secretary of State Government $33,000
State of Delaware
Division of Corporations
P.O. Box 74072
Baltimore, MD 21274-4072
Music Express East, Inc. Trade $13,718
475 Boulevard
Elmwood Park, NY 07407
Ameren CILCO Trade $11,930
P.O. Box 66836
St. Louis, MO 63166-6826
New Revenue Solutions Trade $10,823
730 Peachtree Street
Suite 600
Atlanta, GA 30308
Qwest Communications Trade $9,619
P.O. Box 856169
Louisville, KY 40285
Secretary of State-Illinois Government $6,540
Department of Business
Services
501 South 2nd Street
Room 328
Springfield, IL 62756
HHC Foundation Trade $6,000
160 Water Street
Suite 1129
New York, NY 10038
Avon Foundation Trade $5,000
1345 Avenue of the Americas
26th Floor
New York, NY 10105
NYC Department of Finance Government $4,411
P.O. Box 5150
Kingston, NY 12402
VCI Trade $4,272
146 Chestnut Street
Springfield, MA 01103
Katz Trade $3,917
12019 Collections Center Drive
Chicago, IL 60693-0120
Alvin Ailey American Trade $3,000
Dance Theater
405 West 55th Street
New York, NY 10019
Markertek Trade $2,269
812 Kings Highway
P.O. Box 397
Saugerties, NY 12477
J&L Trade $1,972
2000 Springfield Road
East Peoria, IL 61611
Associated Press Trade $1,911
P.O. Box 414212
Boston, MA 02241-4212
Madison River Trade $1,895
P.O. Box 1293
Bedford, IL 60499-1293
Carrier Trade $1,800
P.O. Box 93844
Chicago, IL 60673-3844
Katz Communications Trade $1,750
12019 Collections Center Drive
Chicago, IL 60693-0120
HOLLINGER INC: Subsidiary Sells Toronto Corp. Office for $14 Mil.
-----------------------------------------------------------------
Hollinger Inc.'s wholly owned subsidiary entered into an agreement
of purchase and sale, through which the property at 10 Toronto
Street, Hollinger's Toronto corporate office, will be sold to
Morgan Meighen & Associates for $14 million.
The sale is expected to close in May 2007.
About Morgan Meighen
Morgan Meighen & Associates Limited is an independent investment
manager in Canada. It provides investment management services to
private clients through its Private Wealth Management division and
has been managing Canadian and international portfolios for over
50 years. With over $1.2 billion under management, it provides
services to clients including a family of closed-end funds: Third
Canadian General Investment Trust Limited; Canadian General
Investments, Limited and Canadian World Fund Limited.
About Hollinger Inc.
The principal asset of Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B)
-- http://www.hollingerinc.com/-- is its approximately 70.1%
voting and 19.7% equity interest in Sun-Times Media Group Inc.
(formerly Hollinger International Inc.), a newspaper publisher
with assets which include the Chicago Sun-Times and a large number
of community newspapers in the Chicago area. Hollinger also owns
a portfolio of commercial real estate in Canada.
Litigation Risks
Hollinger Inc. faces various court cases and investigations:
(1) a consolidated class action complaint filed in Chicago,
Illinois;
(2) a class action lawsuit that was filed in the Saskatchewan
Court of Queen's Bench on Sept. 7, 2004;
(3) a $425,000,000 fraud and damage suit filed in the State
of Illinois by International;
(4) a lawsuit seeking enforcement of a Nov. 15, 2003,
restructuring proposal to uphold a Shareholders' Rights
Plan, a declaration that corporate by-laws were invalid and
to prevent the closing of a certain transaction;
(5) a lawsuit filed by International seeking injunctive relief
for the return of documents of which it claims ownership;
(6) a $5,000,000 damage action commenced by a lessor of an
aircraft lease, in which Hollinger was the guarantor;
(7) an action commenced by the United States Securities and
Exchange Commission on Nov. 15, 2004, seeking injunctive,
monetary and other equitable relief; and
(8) investigation by the enforcement division of the OSC.
HOMETOWN COMMERCIAL: S&P Places Low-B Ratings on $3.9MM of Debt
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its ratings to
Hometown Commercial Trust 2006-1's $149.192 million commercial
mortgage pass-through certificates series 2006-1.
The ratings reflect the credit support provided by the subordinate
classes of certificates, the liquidity provided by the trustee,
the economics of the underlying loans, and the geographic and
property type diversity of the loans.
Standard & Poor's analysis determined that, on a weighted average
basis, the pool has a debt service coverage of 1.11x, a beginning
LTV of 105.5%, and an ending LTV of 96.1%. The pool includes six
loans that consist of related loans that are cross-defaulted and
cross-collateralized with each other. For the purposes of this
report, crossed loans are considered to be one loan.
Ratings Assigned
Hometown Commercial Trust 2006-1
Approximate
credit
Class Rating Amount support
----- ------ ------ -----------
A AAA $125,694,000 15.750
B AA $3,357,000 13.500
C AA- $1,679,000 12.375
D A $3,170,000 10.250
E BBB+ $4,289,000 7.375
F BBB $1,492,000 6.375
G BBB- $1,865,000 5.125
H BB+ $1,119,000 4.375
J BB $560,000 4.000
K BB- $746,000 3.500
L B+ $372,000 3.250
M B $560,000 2.875
N B- $559,000 2.500
O NR $3,730,752 0.000
X* AAA $141,546,000 N/A
* Interest-only class with a notional amount.
N/A -- Not applicable.
NR -- Not rated.
IMMUNE RESPONSE: Plans 1-for-100 Reverse Stock Split on Dec. 20
---------------------------------------------------------------
The Immune Response Corporation will make a 1-for-100 reverse
stock split of its common stock, effective upon the opening of
markets on Dec. 20, 2006.
On a pre-split basis, the company disclosed that it has
approximately 900 million basic shares of common stock outstanding
as of the end of trading on Dec. 4, 2006. The reverse stock split
will combine 100 shares of common stock into one share of common
stock and the total number of basic shares outstanding will be
reduced to approximately 9 million.
The company also disclosed that its common stock will trade under
the symbol "IMNRD" for 20 days to designate that it is trading on
a post reverse split basis. The stock will resume trading under
the symbol "IMNR" on or about Jan. 19, 2007.
"We believe that the reverse stock split will position Immune
Response's stock in a price range that is more attractive to a
broad range of institutional investors as well as members of the
sell-side community," Dr. Joseph O'Neill, president and chief
executive officer, said. "Further, this capital restructuring may
enable us to seek a listing for our common shares on one of the
major stock exchanges or marketplaces which will enhance our
visibility in the marketplace. Our decision to undertake the
reverse stock split was done in anticipation of progress in our
clinical programs. In particular, IRC expects to inject the first
patient with NeuroVax (TM) in the next month and is looking
forward to seeing interim 36-week data early next year in its
HIV/AIDS program. I firmly believe that Immune Response has the
strategy, science, people and ultimately the capital structure in
place to deliver long-term shareholder value."
The company further disclosed that stockholders will receive cash
payments for any fractional shares resulting from the reverse
split.
Headquartered in Carlsbad, California, The Immune Response
Corporation (OTCBB:IMNR) -- http://www.imnr.com/-- is an immuno-
pharmaceutical company focused on developing products to treat
autoimmune and infectious diseases. The Company's lead immune-
based therapeutic product candidates are NeuroVax(TM) for the
treatment of multiple sclerosis and IR103 for the treatment of
Human Immunodeficiency Virus infection. Both of these therapies
are in Phase II clinical development and are designed to stimulate
pathogen-specific immune responses aimed at slowing or halting the
rate of disease progression.
Going Concern Doubt
As reported in the Troubled Company Reporter on June 8, 2006,
Levitz, Zacks & Ciceric expressed substantial doubt about The
Immune Response's ability to continue as a going concern after
auditing the company's financial statements for the years ended
Dec. 31, 2005 and 2004. The auditing firm pointed to the
Company's stockholders' deficit and comprehensive loss for each of
the years in the two-year period ended Dec. 31, 2005.
INDUSTRIAL ENTERPRISES: Hires G. Impellicceiri as Controller
------------------------------------------------------------
Industrial Enterprises of America Inc. disclosed that Gary
Impellicceiri, CPA, has been appointed as its Financial
Controller.
Mr. Impellicceiri will work at the company's Pitt Penn facility,
where all financial reporting and audit functions have been
consolidated and will report directly to John Mazzuto, chief
executive officer. Investor Relations responsibilities will
remain in New York.
Recently, Mr. Impellicceiri served as the corporate controller of
Union Drilling, Inc., a publicly traded oil and gas company with
assets of $190 Million and annual revenues of over $140 Million.
Prior to that, he served as a senior auditor in Assurance and
Financial Services for KPMG Peat Marwick, LLP and as a senior fund
analyst and staff auditor for Federated Investors in Pittsburgh,
Pa.
The company also disclosed that Mr. Mazzuto will serve as interim
chief financial officer while James Margulies, current chief
financial officer, shifts responsibilities to the company's Legal
& Compliance department.
Headquartered in New York City, Industrial Enterprises of America,
Inc. (OTCBB:IEAM) is an automotive aftermarket supplier that
specializes in the sale of anti-freeze, auto fluids, and other
automotive additives & chemicals. The company has distinct
proprietary brands that collectively serve the retail,
professional, and discount automotive aftermarket channels.
Going Concern Doubt
Beckstead and Watts, LLP, in Henderson, Nevada, raised substantial
doubt about Industrial Enterprises' ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended June 30, 2005. The auditor pointed
to the Company's net losses from its inception, and its limited
operations, since the Company has not commenced planned principal
operations.
INDUSTRIAL ENTERPRISES: De Joya Griffith to Serve as New Auditors
-----------------------------------------------------------------
Industrial Enterprises of America, Inc.'s board of directors has
approved the retention of De Joya Griffith & Company, LLC, as the
company's new independent auditors, replacing Beckstead and Watts
LLP.
Beckstead and Watts informed the company on Dec. 7, 2006 that it
would not stand for reelection as its independent auditors.
The company disclosed that Beckstead and Watts' report on its
financial statements for the fiscal years ended June 30, 2005, and
2006, contained no adverse opinion or disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope, or
accounting principle. Nor had there been disagreements with any
of the company's independent auditors to the knowledge of the its
Board of Directors.
Headquartered in New York City, Industrial Enterprises of America,
Inc. (OTCBB:IEAM) is an automotive aftermarket supplier that
specializes in the sale of anti-freeze, auto fluids, and other
automotive additives & chemicals. The company has distinct
proprietary brands that collectively serve the retail,
professional, and discount automotive aftermarket channels.
Going Concern Doubt
Beckstead and Watts, LLP, in Henderson, Nevada, raised substantial
doubt about Industrial Enterprises' ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended June 30, 2005. The auditor pointed
to the Company's net losses from its inception, and its limited
operations, since the Company has not commenced planned principal
operations.
INT'L THOROUGHBRED: Case Summary & 82 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: International Thoroughbred Breeders, Inc.
aka Palm Beach Princess, Inc.
aka Palm Beach Casino Line
1111 Lincoln Road, 4th Floor
Miami Beach, FL 33140
Bankruptcy Case No.: 06-16441
Debtor-affiliates that filed separate chapter 11 petitions on
December 6, 2006:
Entity Case No.
------ --------
Palm Beach Maritime Corporation 06-16411
Palm Beach Empress, Inc. 06-16412
Debtor-affiliates that filed separate chapter 11 petitions on
December 4, 2006:
Entity Case No.
------ --------
ITG Vegas Inc. 06-16350
ITG Palm Beach, LLC 06-16351
Cruise Holdings I, LLC 06-16352
Cruise Holdings II, LLC 06-16353
Royal Star Entertainment, LLC 06-16354
Riviera Beach Entertainment, LLC 06-16355
Orion Casino Corporation 06-16356
International Thoroughbred Gaming 06-16357
Development Corp.
Type of Business:
Chapter 11 Petition Date: December 7, 2006
Court: Southern District of Florida (West Palm Beach)
Judge: Steven H Friedman
Debtors' Counsel: John W. Kozyak, Esq.
2525 Ponce de Leon Boulevard, 9th Floor
Coral Gables, FL 33134
Tel: (305) 372-1800
Fax: (305) 372-3508
Total Assets Total Debts
------------ -----------
International Thoroughbred $14,767,693 $35,821,222
Breeders, Inc.
Palm Beach Maritime Corporation $20,905,569 $41,189,526
Palm Beach Empress, Inc. $12,300,317 $36,953,156
ITG Vegas Inc. $28,738,364 $38,833,865
ITG Palm Beach LLC $20,679,047 $36,419,042
Cruise Holdings I LLC $21,802,340 $41,248,221
Cruise Holdings II LLC $9,578,942 $35,250,366
Royal Star Entertainment LLC $3,199,344 $32,979,703
Riviera Beach Entertainment LLC $0 $37,083,631
Orion Casino Corporation $4,278,668 $34,006,597
International Thoroughbred Gaming $289,374 $33,606,651
Development Corp.
A. International Thoroughbred Breeders, Inc.'s 20 Largest
Unsecured Creditors:
Entity Claim Amount
------ ------------
Cozen O'Connor $269,567
1900 Market Street
Philadelphia, PA 19103-3508
First Insurance Funding Corp. $170,163
8075 Innovation Way
Chicago, IL 60682
Stockton Bates, LLC $79,314
42 South 15th Street, Suite 600
Philadelphia, PA 19102-2218
Delaware Secretary of State $75,081
The Corporation Trust Co.
Corporation Trust Center
Wilmington, DE 19801
Allmerica Financial $58,315
American Stock Transfer & Trust Company $51,000
Highbridge Capital $44,807
Horizon Blue Cross Blue Shield of NJ $14,615
Benigno LLC $9,284
Fidelity Investment Inst. $7,849
The United States Treasury $7,194
Wilmington Trust SP Services, Inc. $6,000
Lexus Financial Services $2,021
Iron Mountain Records $1,821
American Transfer of N.J., Inc. $1,526
Allstate $1,481
ATX Telecommunications Services, Ltd. $1,322
RGN-South Florida, LLC $1,316
De Lage Landen Financial Services $1,181
ServIt $1,074
B. Palm Beach Maritime Corporation's 9 Largest Unsecured
Creditors:
Entity Claim Amount
------ ------------
Ritz Carlton Golf Club & Spa, Jupiter $48,220
115 Eagle Tee Terrace
Jupiter, FL 33477
Stockton Bates, LLP $10,350
42 South 15th Street, Suite 600
Philadelphia, PA 19102
CT Corporation $2,876
Philadelphia Corporate Team 1
1515 Market Street
Philadelphia, PA 19102
Independent Community Bank $2,000
Lexus Financial Services $979
Rood & Riddle Equine Hospital $774
Gunster Yoakley & Stuart, P.A. $220
Florida Power & Light Company $172
BellSouth $81
C. Palm Beach Empress, Inc.'s Largest Unsecured Creditor:
Entity Claim Amount
------ ------------
Florida Department of State $150
P.O. Box 1500
Tallahassee, FL 32302-1500
D. ITG Vegas Inc.'s 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
American Express $102,630
P.O. Box 360001
Ft. Lauderdale, FL 33336
Cozen and O'Connor $83,987
W1385
P.O. Box 7777
Philadelphia, PA 19175
McAlpin & Brais, P.A. $38,307
Brickwell Bay View Center
80 SW 8th Street, Suite 2805
Miami, FL 33130
Page Mracheck Fitz & Rose, P.A. $35,811
Miles Media Group $31,238
James Crystal & Broadcasting Charles $30,127
Pigott, P.A.
Palm Beach Newspaper $25,980
William Ackerman Arosemena Avenida Balboa $25,911
Superior Charter Bus, Inc. $25,615
WRMF-FM Radio $24,545
Word of Mouth Advertising Inc. $20,550
Horr Novak $20,141
Jupiter Stadium Ltd. $17,400
Topline Printing & Graphics $16,858
McLeod & Associates $15,500
Wright Ponsoldt & Lozear LLP $15,000
Arias, Fabrega & Fabrega $14,025
Good Karma Broadcasting LLC $14,000
Palm Beach County Tax Collector $11,690
Boomer Times and Senior Life $11,687
E. ITG Palm Beach, LLC's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Churchill Capital, LLC $50,000
805 Third Avenue, 28th Floor
New York, NY 10022
Viacom Outdoor $48,900
Cheifetz-Iannitelli-Marcolini
1850 North Central Avenue
Phoenix, AZ 85004
Marie Mariucci $36,530
112 La Costa Court
Holmdel, NJ 07733
Oolala Productions Inc. $21,000
Robert Mackall $14,931
The Mathis Group $12,552
Progressive Energy $11,242
Immediacy Public Relations $10,000
Ticketmaster - Vista $9,083
Top Line Printing & Graphics $8,870
Passport Publication & Media Corp. $8,837
Advertisers Display & Exhibits Inc. $8,669
Casino Careers Online $5,000
Upchurch Watson White & Max $4,849
Bell South Advertising & Publishing Corp. $2,620
Cusano's $2,410
Compton Dancer Consulting Inc. $2,400
WRMF-FM Radio $2,210
Gate Transportation, Inc. $2,130
Stockton Bates $1,375
F. Cruise Holdings II, LLC's Largest Unsecured Creditor:
Entity Claim Amount
------ ------------
Florida Department of State $150
P.O. Box 1500
Tallahassee, FL 32302-1500
G. Royal Star Entertainment, LLC's 4 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Page Mracheck Fitz & Rose, P.A. $1,725
505 South Flagler Drive, Suite 600
West Palm Beach, FL 33401
Holiday Inn $666
c/o ISP
4770 Biscayne Boulevard, Penthouse A
Miami, FL 331337
Florida Transportation & Tour Crew $65
c/o ISP
4770 Biscayne Boulevard, Penthouse A
Miami, FL 331337
Leamington Hotel $51
c/o ISP
4770 Biscayne Boulevard, Penthouse A
Miami, FL 331337
H. International Thoroughbred Gaming Development Corp.'s 7 Largest
Unsecured Creditors:
Entity Claim Amount
------ ------------
Edward Knurek $9,776
3000 North Ocean Drive, Apartment 17F
Singer Island, FL 33404
Motto Fernandes Rocha $8,293
[address not provided]
Charles P. Reay $8,250
1116 Warson Woods Drive
Saint Louis, MO 63122
William Ackerman Arosemena Avenida Balboa $4,577
CT Corporation System $839
CSC $646
American Express $319
INTEGRAL VISION: Posts $661,000 Net Loss in Quarter Ended Sept. 30
------------------------------------------------------------------
Integral Vision Inc. recorded a $661,000 net loss on $353,000 of
net revenues for the three months ended Sept. 30, 2006, compared
to a $780,000 net loss on $14,000 of net revenues for the same
period in 2005.
At Sept. 30, 2006, the company's balance sheet showed $1.2 million
in total assets and $933,000 in total liabilities.
The company's investing activities included the purchase of
approximately $49,000 of equipment and $8,000 for patents in the
nine months ended Sept. 30, 2006. Additionally, the company
reported $153,000 of consignment and demonstration equipment was
reclassified from inventory to Marketing Demonstration Equipment
as capital goods to more accurately reflect how it is being used.
A full-text copy of the company's quarterly report is available
for free at http://researcharchives.com/t/s?16b8
Going Concern Doubt
In May 2006, the Troubled Company Reporter disclosed that Rehmann
Robson in Troy, Michigan, raised substantial doubt about Integral
Vision, Inc.'s ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
year ended Dec. 31, 2004, and 2005. The auditor pointed to the
Company's recurring losses and difficulties in achieving necessary
sales to attain profitability.
Integral Vision, Inc. (OTCBB: INVI) -- http://www.iv-usa.com/--
develops, manufactures, and markets flat panel display inspection
systems to ensure product quality in the display manufacturing
process.
INTERPUBLIC GROUP: Moody's Rates New $250-Mil. Notes at Ba3
-----------------------------------------------------------
Moody's Investors Service assigned a Ba3 senior unsecured debt
rating to Interpublic Group of Companies Inc.'s new $250 million
floating rate notes due 2010. The Ba3 rating reflects a loss given
default of about 66% given the company's all-bond debt capital
structure.
The rating outlook is negative.
The new notes are being offered in exchange for IPG's $250 million
of floating rate notes due 2008. The Ba3 rating reflects the
senior priority of the new notes, pari passu with all of IPG's
other senior unsecured debt. The exchange period expires
Dec. 21, 2006 with early participators receiving a payment of
$41.25 in cash per $1,000 principal amount of old notes exchanged.
The early participation payment ended Dec. 7, 2006, with all $250
million exchanged. As compared to the exchanged floating rate
notes, all terms are substantially identical except the new notes
bear a lower interest rate at LIBOR plus 200 versus LIBOR plus
325.
"The exchange is another significant step in reducing the 2008
maturities and provides IPG with added liquidity headroom to get
its house in order, since it is still in the midst of a
significant turnaround and internal control weakness remediation
program", said Moody's Senior Vice President Neil Begley.
Moody's also notes that the company is showing signs of turnaround
traction despite the recent Draft/FCB surprising loss of
Wal-Mart's marketing account, and stated that the company will
need to maintain its momentum around its other recent notable
client wins and the operating performance improvement of the third
quarter in order to remove the negative outlook and be comfortable
within the Ba3 rating category.
The Interpublic Group of Companies, Inc., with headquarters in New
York, is one of the world's largest advertising, marketing and
corporate communications holding companies.
INTERPUBLIC GROUP: S&P's B Rating Remains on Negative Watch
-----------------------------------------------------------
Standard & Poor's Ratings Services reported that its ratings on
The Interpublic Group of Cos. Inc., including the corporate credit
rating of 'B', remain on CreditWatch with negative implications,
where they were placed on March 22, 2006.
The CreditWatch update came after the news that Wal-Mart Stores
Inc. has decided to place under review its business with one of
Interpublic's advertising agencies, although other Interpublic
units may pitch for the business. The New York-based global
advertising agency holding company had approximately $2.2 billion
in debt outstanding at Sept. 30, 2006.
"Standard & Poor's remains concerned about the resolution of
Interpublic's financial and reporting issues resulting from
material weaknesses in internal controls, the negative trends in
auto advertising, and the overall earnings outlook, especially in
light our lower GDP growth forecast for 2007," said Standard &
Poor's credit analyst Deborah Kinzer.
In resolving our CreditWatch listing, Standard & Poor's will
evaluate the sustainability of recent trends in the company's
organic revenues, margin, and cash flow, and monitor its progress
in resolving control deficiencies.
Standard & Poor's will also address issues relating to client
retention, including implications, if any, of the Wal-Mart review.
JOHN MANEELY: Moody's Cuts Corporate Family Rating to B2 from B1
----------------------------------------------------------------
Moody's Investors Service downgraded John Maneely Company's
corporate family rating to B2 from B1.
At the same time Moody's confirmed the Ba1 and B2 ratings on the
company's existing senior secured revolving credit facility and
senior secured term loan respectively. These rating actions
reflect the closing of the new bank financings for DBO Holdings
Inc's $1.2 billion acquisition of Atlas Tube Inc., refinancing of
existing debt, and payment of fees and expenses. DBO Holdings
Inc., is the holding company for JMC and the US and Canadian
operations of Atlas Tube. DBO Holdings is owned 55% by the
Carlyle Group and former JMC shareholders and 45% by existing
Atlas shareholders.
The Ba1 and B2 ratings on the existing bank facilities will be
withdrawn.
Moody's also confirmed JMC's B2 probability of default rating, the
Ba2 rating on the new $400 million secured revolver and the B3
rating on the new $1.285 million senior secured term loan. The
rating outlook is positive. This concludes Moody's ratings review
of JMC's bank facilities, which review commenced Oct. 25, 2006,
and was continued Nov. 9, 2006.
The B2 corporate family rating reflects the significant increase
in leverage resulting from the acquisition of Atlas Tube Inc.,
pro-forma debt/EBITDA of 3.8x at Sept. 30, 2006, higher interest
burden and weakened debt protection metrics. The rating also
considers the high degree of exposure to the non-residential
construction market, particularly for its hollow structural steel,
standard steel pipe and electrical conduit products, and its
dependence on continued relatively robust demand conditions and
prices in the markets it serves in order to reduce debt to more
reasonable levels in a timely fashion.
However, the rating reflects the leadership position the company
enjoys in its key product areas, HSS, standard pipe and electrical
conduit, where it is number 1 or 2, the increased size and
operating diversity of the company post the Atlas acquisition,
relatively modest capital expenditure requirements and the absence
of material debt amortization until 2011.
The positive outlook incorporates Moody's view that conditions for
the non residential construction market will continue to be solid
for the next 12-15 months.
In addition, Moody's expects that JMC's management will be able to
execute their plan to strengthen the purchasing power of the
combined entities, further improving the cost profile and
enhancing the ability to sustain better earnings levels in a
downturn than exhibited in the past.
Moody's also anticipates that management will take advantage of
the current favorable market conditions to deploy excess cash flow
to debt reduction.
JMC manufactures small diameter steel pipe as well as tubular
products at six domestic manufacturing facilities. Sales are
predominately into the more commodity oriented standard pipe
market followed by the electrical conduit market, which provides a
greater degree of value added products. The company also enjoys
leading market positions in the galvanized mechanical tube and
fittings markets. Its products are sold principally to plumbing
and electrical distributors. Atlas, which operates through five
locations, holds an approximate 35% share in the HSS market and
enjoys a competitive cost position. The B2 corporate family
rating reflects the enhanced market position of JMC following the
Atlas acquisition and the improved operational and purchasing
position but considers that significant growth in margins, on a
sustainable basis, is limited due to the "margin on metals" nature
of its business profile.
Moody's would expect that prices realized would continue to trend
comparably to the movement in prices for the company's raw
material requirements, principally hot rolled steel, thereby
providing a relative degree of stability in performance. Despite
the positive strategic business enhancement, the corporate family
rating reflects the increase in leverage, the commodity nature of
the business and concerns about the pace of possible debt
repayment in the event of a slowdown in the non-residential
construction or steel markets.
Ratings Downgraded:
-- Corporate Family Rating: to B2 from B1
Rating Confirmed:
-- Probability of Default rating at B2;
-- $400 million Secured Revolver at Ba2; and,
-- $1,285 million Secured Term Loan at B3.
Ratings to withdrawn:
-- Ba1 to the $200 million Secured Revolver;
-- B2 to the $290 million Secured Term Loan
Headquartered in Collingswood, New Jersey, JMC had net revenues of
$713 million in its fiscal year ended Sept. 30, 2005. Pro forma
JMC/Atlas LTM revenues to Sept. 30, 2006 are $2.1 billion.
JP MORGAN: Moody's Holds Low-B Ratings on $26 Mil. of Certificates
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of two classes and
affirmed the ratings of 17 classes of J.P. Morgan Chase Commercial
Mortgage Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 2004-C1 as:
-- Class A-1, $63,227,467, Fixed, affirmed at Aaa;
-- Class A-2, $210,000,000, Fixed, affirmed at Aaa;
-- Class A-3, $303,158,000, Fixed, affirmed at Aaa;
-- Class A-1A, $224,812,606, Fixed,affirmed at Aaa;
-- Class X-1, Notional, affirmed at Aaa;
-- Class X-2, Notional, affirmed at Aaa;
-- Class B, $27,355,000, Fixed, upgraded to Aa1 from Aa2;
-- Class C, $11,724,000, Fixed, upgraded to Aa2 from Aa3;
-- Class D, $22,145,000, Fixed, affirmed at A2;
-- Class E, $13,026,000, Fixed, affirmed at A3;
-- Class F, $11,723,000,WAC, affirmed at Baa1;
-- Class G, $9,119,000, WAC, affirmed at Baa2;
-- Class H, $10,421,000,WAC, affirmed at Baa3;;
-- Class J, $6,513,000, Fixed, affirmed at Ba;
-- Class K, $5,210,000, Fixed, affirmed at Ba2;
-- Class L, $3,908,000, Fixed, affirmed at Ba3;
-- Class M, $5,211,000, Fixed, affirmed at B1;
-- Class N, $2,605,000, Fixed, affirmed at B2; and
-- Class P, $2,605,000, Fixed, affirmed at B3;
As of the Nov. 15, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 9% to
$948.4 million from $1 billion at securitization. The
Certificates are collateralized by 116 mortgage loans ranging in
size from less than 1% to 16.1% of the pool with the top 10 loans
representing 48.1% of the pool. Six loans, representing 4.1% of
the pool, have defeased and are collateralized by U.S. Government
securities. The balance of the pool consists of one shadow rated
loan, representing 16.1% of the pool, and a conduit component,
representing 79.8% of the pool. The pool has not incurred any
losses. One loan, representing less than 1% of the pool, is in
special servicing. Moody's has estimated a loss of approximately
$4.2 million for this specially serviced loan. Thirteen loans,
representing 6% of the pool, are on the master servicer's
watchlist.
Moody's was provided with full-year 2005 and partial-year 2006
operating results for 81.7% and 86.5% respectively, of the
performing loans. Moody's loan to value ratio for the conduit
component is 87.8%, compared to 89.7% at securitization.
Moody's is upgrading Classes B and C due to increased credit
support, stable pool performance and defeasance.
The shadow rated loan is the Forum Shops Loan, which is a 33.3%
pari passu interest in a $458.8 million first mortgage loan. The
loan is secured by a 639,000 square foot retail center located at
Caesar's Palace in Las Vegas, Nevada. The center, which is 99.4%
occupied, includes numerous upscale national retailers. Average
sales for tenants less than 10,000 square feet were $1,234 per
square foot for calendar year 2005. The loan sponsor is the Simon
Property Group, Inc., a publicly traded REIT. The property is
also encumbered by an $84 million B Note which is held outside the
trust. Moody's current shadow rating is Aa1, compared to Aa3 at
securitization.
The top three conduit loans represent 21% of the pool. The
largest conduit loan concentration is the Hometown America
Portfolio IV & V Loans ($95.4 million -- 10.1%), which are secured
by mortgages on 14 cross-collateralized and cross-defaulted
manufactured home communities located in eight states.
The manufactured home communities include 3,742 units distributed
in Florida (45.5%), Colorado (15.2%), Michigan (12.8%), Virginia
(12.8%), Arizona (4.9%), Minnesota (4.9%) and Massachusetts
(3.2%).
Performance is stable despite a slight occupancy decline to 94.5%
from 95.6% at securitization. Moody's LTV is 86.7%, compared to
88.9% at securitization.
The second largest conduit loan is the One Fordham Plaza Loan
($58.3 million -- 6.1%), which is secured by a 12-story, 414,000
square foot office building with an adjacent three-story
750-space parking garage located in the Bronx, New York.
As of June 2006 the property was 93.3% occupied, compared to 95.8%
at securitization. The property was subject to a ground lease;
however, the borrower purchased the ground lessor's interest and
is required to extinguish the ground lease structure for payment
of $1 prior to December 2007.
The largest tenant is Montefiore Hospital. Approximately
109,000 square feet or 26.3% of the building is subject to two
proprietary leases to Montefiore Hospital that expire in May 2012
and May 2013. Montefiore can extend the leases to Sept 2036 at a
rate of $1.00 per square foot. The loan was structured to account
for the Montefiore Hospital lease extension as a $17.2 million
portion of the loan amortizes over an 8.5-year time period while
the balance of the loan amortizes on a 30-year schedule. Other
tenants include the New York City Housing Authority and the New
York State Division of Human Resources. Moody's LTV is 76.4%,
compared to 76.5% at securitization.
The third largest conduit loan is the White Oak Crossing Shopping
Center Loan ($45.0 million - 4.8%). The loan is secured by the
borrower's interest in a 517,000 square foot shopping center
located approximately seven miles southeast of Raleigh, North
Carolina. The center is anchored by BJ's Wholesale Club, Kohl's,
Dick's Sporting Goods, Best Buy, Ross Stores, T.J.Maxx, Linens 'n
Things, HomeGoods, Michaels and Petsmart. The center is shadow
anchored by Target. As of June 2006 the center was 99.5%
occupied, compared to 97.2% at securitization. Moody's LTV is
79.7%, compared to 84.8% at securitization.
The pool's collateral is a mix of multifamily and manufactured
housing, office and mixed-use, retail, U.S. Government securities
and industrial and self storage. The collateral properties are
located in 31 states and Ontario, Canada. The top five state
concentrations are California, Nevada, Florida, New York and North
Carolina. All of the loans are fixed rate.
JP MORGAN: Moody's Junks Rating on $3-Mil. Class P Certificates
---------------------------------------------------------------
Moody's Investors Service downgraded the ratings of six classes
and affirmed the ratings of 14 classes of J.P. Morgan Chase
Commercial Mortgage Securities Corp., Commercial Mortgage Pass-
Through Certificates, Series 2004-CIBC8 as:
-- Class A-1, $54,577,216, Fixed, affirmed at Aaa;
-- Class A-1A, $333,022,035, Fixed, affirmed at Aaa;
-- Class A-2, $188,000,000, Fixed, affirmed at Aaa;
-- Class A-3, $110,000,000, Fixed, affirmed at Aaa;
-- Class A-4, $349,357,000, Fixed, affirmed at Aaa;
-- Class X-1, Notional, affirmed at Aaa;
-- Class X-2, Notional, affirmed at Aaa;
-- Class B, $31,348,000, Fixed, affirmed at Aa2;
-- Class C, $14,107,000, Fixed, affirmed at Aa3;
-- Class D, $28,213,000, WAC, affirmed at A2;
-- Class E, $14,107,000, WAC, affirmed at A3;
-- Class F, $15,674,000, WAC, affirmed at Baa;
-- Class G, $12,539,000, WAC, affirmed at Baa2;
-- Class H, $18,809,000, WAC, affirmed at Baa3;
-- Class J, $6,270,000, WAC, downgraded to Ba2 from Ba1;
-- Class K, $6,269,000, WAC, downgraded to Ba3 from Ba2;
-- Class L, $6,270,000, WAC, downgraded to B2 from Ba3;
-- Class M, $4,702,000, WAC, downgraded to B3 from B1;
-- Class N, $4,702,000, WAC, downgraded to Caa2 from B2;
-- Class P, $3,135,000, WAC, downgraded to Caa3 from B3;
As of the Nov. 13, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 3% to
$1.2 billion from $1.3 billion at securitization. The
Certificates are collateralized by 105 mortgage loans ranging in
size from less than 1% to 12.6% of the pool, with the top
10 loans representing 46.7% of the pool. The pool includes four
shadow rated investment grade loans comprising 26.3% of the pool.
Two loans, representing 1.2% of the pool balance, have defeased
and are collateralized by U.S. Government securities.
The pool has not sustained any losses to date. Sixteen loans,
representing 11.8% of the pool, are on the master servicer's
watchlist. Currently there is one loan, Parkwoods Apartments, in
special servicing. The loan, which was transferred to special
servicing in January 2006 for payment delinquency, is secured by a
30-year old, 824-unit multifamily property located in Dallas,
Texas. The property is currently 60% leased and suffers from
extensive deferred maintenance and building code violations.
Moody's is estimating a $10 million loss for this loan.
Moody's was provided with year-end 2005 and partial year 2006
operating results for approximately 98.8% and 37%, respectively,
of the pool's performing loans. Moody's loan to value ratio for
the conduit component, excluding the defeased and specially
serviced loans, is 90.4% compared to 92.6% at securitization.
Moody's is downgrading Classes J, K, L, M, N and P due to
potential losses from the specially serviced loan.
The largest shadow rated loan is the Forum Shops Loan
($152.9 million - 12.6%), which is a 33.3% pari passu interest in
a $459.3 million first mortgage loan. The loan is secured by a
639,000 square foot retail center located at Caesar's Palace in
Las Vegas, Nevada. The center, which is 99.4% occupied, includes
numerous upscale national retailers. Average sales for tenants
less than 10,000 square feet were $1,234 per square foot for
calendar year 2005. The loan sponsor is the Simon Property Group,
a publicly traded REIT. The property is also encumbered by an $84
million B Note, which is held outside the trust. Moody's current
shadow rating is Aa1, compared to Aa3 at securitization.
The second shadow rated loan is the Harbor Plaza Loan
($84.3 million - 6.9%), which is secured by a 731,000 square foot
Class A office complex located on an 18 acre site along the Long
Island Sound, approximately one mile from downtown Stamford,
Connecticut. The complex is 84.6% occupied, compared to 88.6% at
securitization. The largest tenants include National Westminster
Bank, Time Warner Entertainment and Ascent Media Group, Inc.
Moody's current shadow rating is Baa3, the same as at
securitization.
The third shadow rated loan is the Camp Creek Marketplace Loan
($43.0 million -- 3.5%), which is secured by a 425,000 square foot
community center located in Atlanta, Georgia. The center is
anchored by Target and Lowe's, which are not part of the
collateral, and is 100.0% occupied. The center's largest tenants
include BJ's Wholesale Club, Marshall's and Ross Stores.
Moody's current shadow rating is Baa3, the same as at
securitization.
The fourth shadow rated loan is the Northpark Mall Loan
($39.9 million -- 3.3%), which is secured by the borrower's
interest in a 984,000 square foot regional mall located in Joplin,
Missouri. The mall is anchored by Sears and J.C. Penney. The
property is 94.2% occupied, essentially the same as at
securitization. Performance has improved since securitization due
to higher rents, stable expenses and amortization. Moody's
current shadow rating is Baa1, compared to Baa3 at securitization.
The top three conduit loans represent 13.7% of the outstanding
pool balance. The largest conduit loan is the Hometown America
Portfolio VI Loan, which is secured by six manufactured housing
communities located in four states. The portfolio contains a
total of 2,727 pads with individual properties ranging from 201 to
1,000 pads. The largest property, which represents 43% of the
allocated loan amount, is located in suburban Detroit, Michigan.
The portfolio is 86.6% occupied, compared to 93.4% at
securitization.
Moody's LTV is 93.8%, compared to 90.6% at securitization.
The second largest conduit loan is the Santee Trolley Square Loan
($53.0 million -- 4.4%), which is secured by a 311,000 square foot
retail power center located approximately 18 miles northwest of
San Diego in Santee, California. The center is shadow anchored by
Target and the largest tenants include 24 Hour Fitness, Bed Bath &
Beyond and T.J. Maxx. The center is 97.6% occupied, compared to
93.8% at securitization.
Moody's LTV is 97.8%, compared to 99.2% at securitization.
The third largest conduit loan is the 554 Third Avenue Loan ($34.5
million -- 2.8%), which is secured by a 126-unit multifamily
property located in the Murray Hill submarket of New York City.
The property is 100% leased to ExecuStay Corporation for 15 years.
ExecuStay may terminate its lease on one or all of the rental
units with 60 days notice and payment of a termination fee. The
property's performance has been impacted by increased operating
expenses.
Moody's LTV is 89.2%, compared to 87.9% at securitization.
The pool's collateral is a mix of retail, multifamily, office and
mixed use, industrial and U.S. Government securities. The
collateral properties are located in 30 states and Puerto Rico.
The highest state concentrations are Nevada, California, Florida,
Texas and Connecticut. All of the loans are fixed rate.
KEYSTONE AUTO: Weak Credit Metrics Cue Moody's Negative Outlook
---------------------------------------------------------------
Moody's Investors Service affirmed the ratings for Keystone
Automotive Operations, Inc.:
-- Corporate Family, B2; and,
-- Probability of Default, B2.
Moody's also made these actions:
-- the company's new senior secured term loan, B1; and,
-- affirmed the ratings on the guaranteed senior subordinated
notes, Caa1.
The new term loan along with an unrated senior secured asset based
revolving credit facility will be used to refinance the company's
existing bank facilities.
The outlook is negative.
The B2 Corporate Family rating continues to reflect Keystone's
weak credit metrics after the acquisition of Reliable Investments,
Inc., a distributor of specialty automotive accessories, in
December of 2005. Reliable was Keystone's largest competitor in
the specialty accessories and equipment market. Benefits realized
from the Reliable acquisition have been offset by higher than
expected attrition from overlapping customers. The company
expects to see additional cost savings from synergies in 2007.
The negative outlook continues to reflect Moody's concern that
current industry softness, driven by volatile gasoline pricing,
will pressure expected improvements in Keystone's credit metrics.
Keystone's new asset based revolver will provide additional
liquidity for the company in the near term while the company
attempts to realize the debt reduction benefits from the
anticipated synergies of the Reliable acquisition in 2007.
The ratings assigned are:
-- B1, LGD3, 42% for the new senior secured term loan
These ratings were affirmed:
-- B2, Corporate Family Rating
-- B2, Probability of Default Rating
This rating is revised:
-- Caa1 rating, with the LGD percentage changed to LGD5, 85%
from LGD5, 83% for the $175 million guaranteed senior
subordinated unsecured notes due 2013;
This rating is withdrawn:
-- Ba3, LGD2, 23% rating for the guaranteed senior secured
bank credit facilities, consisting of:
(a) $50 million revolving credit facility due 2008;
(b) $115 million term loan due 2009; and,
(c) $90 million incremental guaranteed senior secured term
loan due 2010
The last rating action for Keystone was on Sept. 22, 2006 when the
LGD Methodology was applied.
For the twelve month period ending Sept. 30, 2006, Debt/EBITDA
was 5.9x, and EBIT/Interest approximated 1.2x. Free cash flow was
approximately negative $21 million. Free cash flow was
significantly lower than fiscal 2005 due to higher inventory
levels resulting from the Reliable acquisition and a warehouse
expansion in the southeast.
Future events that would be necessary to achieve improvement in
Keystone's rating outlook include:
-- improved margins and free cash flow resulting from the
realization of operational synergies from the Reliable
acquisition which would result in a de-leveraging of the
company's balance sheet so that Debt/EBITDA is sustained
below 4.5X, and EBIT/Interest improving above 1.5x.
Future events that have the potential to lower Keystone's ratings
include:
-- any material deterioration in the company's operating
margins; and,
-- an erosion in the inventory and working capital management
systems that results in working capital consumption of cash
and weakening liquidity, or higher leverage resulting from
additional acquisitions.
Consideration for lower ratings could result if any combination of
the above factors results in EBIT/Interest deteriorating below 1x,
or Debt/EBITDA over 6x.
Keystone, headquartered in Exeter, Pennsylvania, competes as a
leading distributor in the specialty accessories and equipment
segment of the broader automotive aftermarket equipment industry.
Keystone's specialty products are used by consumers to improve the
performance, functionality, and appearance of their vehicles. The
company sells only a nominal dollar amount of commodity
replacement parts. Keystone is presently the dominant player in
the Northeast, with a strong presence as well in the Midwest, the
Southeast, and Canada. Keystone's revenues approximate
$625 million.
LARRY'S MARKETS: Wants Bankruptcy Case Closed
---------------------------------------------
Larry's Markets Inc. asks the Honorable Philip H. Brandt of the
U.S. Bankruptcy Court for the Western District of Washington in
Seattle to close its chapter 11 case.
Judge Brandt approved on Aug. 24, 2006,
-- the sale of substantially all of its assets free and clear
of all liens, claims, interests, and encumbrances; and
-- the assumption and assignment of executory contracts and
unexpired leases.
Judge Brandt approved on Sept. 1, 2006, the sale of its Tukwila,
Oaktree, and Redmond locations free and clear of all liens,
claims, interests, and encumbrances; and another assumption and
assignment of executory contracts and unexpired leases.
Christine M. Tobin, Esq., at Bush Strout & Kornfeld says all
claims entitled to distribution will have been resolved by
December 2006. Also, all of its assets, other than those held for
the payment of the professionals in the case, which will be
distributed pursuant to the terms of the orders relating to such
professionals' fee applications entered on or before the date of
the Hearing, have been distributed pursuant to the orders issued
by this Court.
Thus, Ms. Tobin says, final distribution has been made, and the
estate has been fully administered.
Judge Brandt will hear the debtor's motion at 9:30 a.m. on
Dec. 14, 2006.
Headquartered in Kirkland, Washington, Larry's Markets, Inc.,
-- http://www.larrysmarkets.com/-- operated several supermarkets
and department stores in the U.S. Northwest. The company filed
for chapter 11 protection on May 7, 2006 (Bankr. W.D. Wash. Case
No. 06-11378). Armand J. Kornfeld, Esq., at Bush Strout &
Kornfeld, represents the Debtor. The Official Committee of
Unsecured Creditors has selected Marc L. Barreca, Esq., and
Michael J. Gearin, Esq., at Preston Gates & Ellis LLP, to
represent it in the Debtor's case. When the Debtor filed for
protection from its creditors, it listed total assets of
$12,574,695 and total debts of $21,489,800.
LASALLE COMMERCIAL: Moody's Holds Low-B Ratings on 3 Cert. Classes
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Lasalle
Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-
Through Certificates, Series 2005-MF1 as:
-- Class A, $321,085,911, WAC, affirmed at Aaa
-- Class X, Notional, affirmed at Aaa
-- Class B, $7,263,000, WAC, affirmed at Aa2
-- Class C, $10,168,000, WAC, affirmed at A2
-- Class D, $6,779,000, WAC, affirmed at Baa1
-- Class E, $2,905,000, WAC, affirmed at Baa2
-- Class F, $2,905,000, WAC, affirmed at Baa3
-- Class G, $4,842,000, WAC, affirmed at Ba1
-- Class H, $1,936,000, WAC, affirmed at Ba2
-- Class J, $1,937,000, WAC, affirmed at Ba3
-- Class K, $968,000, WAC, affirmed at B1
-- Class L, $1,937,000, WAC, affirmed at B2
-- Class M, $969,000, WAC, affirmed at B3
As of the Nov. 20, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 4.6%
to $369.5 million from $387.3 million at securitization. The
Certificates are collateralized by 330 mortgage loans with an
average loan balance of approximately $1.1 million. The top
10 loans represent 8.9% of the pool.
The pool has not experienced any realized losses to date. Four
loans, representing less than 1% of the pool, are currently in
special servicing. Moody's has estimated aggregate losses of
approximately $630,000 for all of the specially serviced loans.
Thirty-seven loans, representing 13.8% of the pool, are on the
master servicer's watchlist.
Moody's was provided with full year 2005 operating results for
approximately 82.6% of the pool. The pool's overall performance
is in line with Moody's expectations. Moody's loan to value ratio
is 92%, compared to 93% at securitization.
The pool's collateral is a mix of multifamily, manufactured
housing and mixed use. The collateral properties are located in
40 states. The highest state concentrations are Texas,
Washington, Arizona, California and Oklahoma. Virtually all of
the loans are floating rate.
LIBERTY TAX: Sept. 30 Balance Sheet Upside-Down by $7.5 Million
---------------------------------------------------------------
Liberty Tax Credit Plus II L.P. has filed its financial statements
for the three months ended Sept. 30, 2006, with the Securities and
Exchange Commission.
The Partnership reported a $2,718,006 net income on $2,252,009 of
total revenues for the quarter ended Sept. 30, 2006, compared to a
$2,206,613 net income on $2,193,539 of total revenues for the same
period in 2005.
At Sept. 30, 2006, the Partnership's balance sheet showed a
stockholders' deficit of $7,554,350, compared to a deficit of
$6,869,110 at March 31, 2006.
The Partnership's capital was originally invested in twenty-seven
Local Partnerships. As of Sept. 30, 2006, the properties and the
related assets and liabilities of ten Local Partnerships and the
limited partnership interest in five Local Partnerships were sold.
In addition, the Partnership has entered into agreements for the
sale of two Local Partnerships.
Subsequently, on Oct. 11, 2006, one Local Partnership entered into
a sale and purchase agreement to sell its property and the related
assets and liabilities, and on Oct. 31, 2006, the Partnership's
limited partnership interest in one Local Partnership was sold.
A full-text copy of the regulatory filing is available for free at
http://ResearchArchives.com/t/s?16b1
Liberty Tax Credit Plus II L.P. invests in other limited
partnerships owning leveraged low-income multifamily residential
complexes that are eligible for the low-income housing tax credit
enacted in the Tax Reform Act of 1986, and to a lesser extent in
Local Partnerships owning properties that are eligible for the
historic rehabilitation tax credit.
MARCAL PAPER: Organizational Meeting Scheduled on December 18
-------------------------------------------------------------
The U.S. Trustee for Region 3 will hold an organizational meeting
to appoint an official committee of unsecured creditors in Marcal
Paper Mills Inc.'s chapter 11 case at 2:00 p.m., on Dec. 18, 2006,
at the U.S. Trustee's Office, 14th Floor, Room 1401 in Newark, New
Jersey.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases. The
meeting is not the meeting of creditors pursuant to Section 341 of
the Bankruptcy Code. However, a representative of the Debtors
will attend and provide background information regarding the
cases.
Creditors interested in serving on a Committee should complete and
return to the U.S. Trustee a statement indicating their
willingness to serve on an official committee.
Official creditors' committees, constituted under Section 1102 of
the Bankruptcy Code, ordinarily consist of the seven largest
creditors who are willing to serve on a committee. In some
Chapter 11 cases, the U.S. Trustee is persuaded to appoint
multiple creditors' committees.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management
with an independent trustee. If the Committee concludes that the
reorganization of the Debtors is impossible, the Committee will
urge the Bankruptcy Court to convert the Chapter 11 cases to a
liquidation proceeding.
Headquartered in Elmwood Park, NJ, Marcal Paper Mills, Inc. --
http://www.marcalpaper.com/-- produces over 160,000 tons of
finished paper products, including bath tissue, kitchen towels,
napkins and facial tissue, distributed to retail outlets for home
consumption and to distributors for away-from-home use in hotels,
restaurants, hospitals offices and factories. Marcal, founded in
1932, is a privately-held, fourth generation family business. It
employs over 900 people in its Elmwood Park, New Jersey and
Chicago, Illinois manufacturing operations.
The Debtor filed for chapter 11 protection on Nov. 30, 2006
(Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, represent the Debtor. When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of more than $100 million.
MIRANT CORP: Selling Philippine Assets for $3.4 Billion
-------------------------------------------------------
Mirant Corp. will sell its Philippine assets to a group of
Japanese investors for $3.42 billion, Kate Linebaugh writes for
The Wall Street Journal. The deal is expected to close in the
second quarter of next year.
According to The Journal, Japanese trading giant Marubeni Corp.
and Tokyo Electric Power Co. will each purchase a 50% stake in
Mirant Asia Pacific, an independent power producer with 2,203
megawatts in the Philippines.
Under the sale agreement, the companies will acquire two coal-
fired power plants and a 20% stake in natural-gas-fired power
plant, which account for about 20% of power assets in the Luzon
area, including Manila.
The Journal states that Marubeni and Tepco considered foreign
independent power producers as an investment priority.
Government-affiliated Japan Bank for International Cooperation
provided financing to the Japanese bidders.
The Journal relates that the sale resulted after a failed purchase
deal with NRG Energy Inc. In addition, Mirant's investors have
pressured Mirant to return cash to shareholders through share
buybacks and the sale of assets in the Philippines and the
Carribean, The Journal says.
Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- http://www.mirant.com/-- is an energy company that produces
and sells electricity in North America, the Caribbean, and the
Philippines. Mirant owns or leases more than 18,000 megawatts of
electric generating capacity globally. Mirant Corporation filed
for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590), and emerged under the terms of a confirmed Second Amended
Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case
LLP, represented the Debtors in their successful restructuring.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts. The
Debtors emerged from bankruptcy on Jan. 3, 2006.
* * *
Moody's Investors Service assigned its B2 corporate family rating,
effective July 13, 2006, on Mirant Corporation.
MORGAN STANLEY: S&P Holds Junk Rating on Class M Certificates
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on all
classes of commercial mortgage pass-through certificates from
Morgan Stanley Capital I Trust 2003-TOP11.
The affirmed ratings reflect credit enhancement levels that
provide adequate support through various stress scenarios.
As of Nov. 13, 2006, the collateral pool consisted of 181 loans
and three real estate owned assets with an aggregate balance of
$1.13 billion, compared with 188 loans with a balance of $1.19
billion at issuance. The master servicer, Wells Fargo N.A.,
provided primarily full year-end 2005 financial information for
97% of the pool, excluding $101.7 million in defeased collateral.
Based on this information, Standard & Poor's calculated a weighted
average debt service coverage of 2.07x for the pool, compared with
2.11x at issuance. All of the loans in the pool are current
except for the aforementioned REO assets, which comprise the
fourth-largest exposure, and are the only assets with the special
servicer, ARCap Special Servicing Inc.
A $5.6 million appraisal reduction amount related to these assets
is in effect. The trust has not experienced any losses to date.
The top 10 loans secured by real estate have an aggregate
outstanding balance of $262.1 million and a weighted average DSC
of 2.13x, down from 2.21x at issuance. The DSC figure excludes
the second-largest loan exposure, the Alabama and Arizona
Distribution Center, which has not provided 2004 and 2005
year-end financial statements. The decrease in the DSC is
primarily attributable to the aforementioned REO assets.
Additionally, the sixth-largest loan exposure is on the master
servicer's watchlist. Both loans are discussed below. Standard &
Poor's reviewed property inspections provided by Wells Fargo for
all of the assets underlying the top 10 loan exposures, and all
were characterized as "good."
The properties that make up the Troy Technology Park portfolio in
Troy, Michigan, are the only assets with the special servicer. The
office/flex properties include 11 buildings totaling 426,526
square feet built between 1986 and 1987. The three cross-
collateralized and cross-defaulted loans were transferred to the
special servicer in November 2004 due to imminent default
resulting from substantial vacancy at the properties, which
became REO in January 2005. The combined occupancy for the
properties had improved to 66% as of November 2006 from 44% in
April 2005. The combined properties are reporting positive cash
flow. The most recent "as is" appraisal, dated February 2006, was
for $30.5 million, and an ARA of $5.6 million is in effect. The
special servicer has listed the properties for sale at $34 million
and has received several offers that it is currently reviewing.
Wells Fargo reported a watchlist of 22 loans with an aggregate
outstanding balance of $122.8 million. The Heritage Pavilion loan
is the largest loan on the watchlist and the sixth-largest loan in
the pool. This loan is secured by a 263,933-sq.-ft. retail center
in Smyrna, Georgia, that was built in 1995. The loan was placed
on the watchlist because occupancy dipped to 69% in the first
quarter of 2006 after Rhodes Furniture, which occupied 42,934 sq.
ft., rejected its lease after filing for bankruptcy, and then
vacated the property. The leasing manager reported that American
Signature is expected to sign a lease within the next week, and
will then move into the former Rhodes Furniture space. In
addition, Famous Footwear has signed a lease for 11,542 sq. ft.
Once all of the vacant space is occupied, occupancy is expected to
increase to approximately 90%. As of June 30, 2006, DSC was
1.62x.
Standard & Poor's stressed various loans in the transaction,
paying closer attention to the assets with the special servicer
and the loans on the watchlist. The resultant credit enhancement
levels support the affirmed ratings.
Ratings Affirmed
Morgan Stanley Capital I Trust 2003-TOP11
Commercial mortgage pass-through certificates series 2003-TOP11
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 12.64%
A-2 AAA 12.64%
A-3 AAA 12.64%
A-4 AAA 12.64%
B AA 9.88%
C A 6.98%
D A- 5.79%
E BBB+ 4.48%
F BBB 3.82%
G BBB- 3.16%
H BB- 2.11%
J B+ 1.84%
K B 1.58%
L B- 1.32%
M CCC+ 1.05%
X-1 AAA N/A
X-2 AAA N/A
N/A-Not applicable.
MUSICLAND HOLDING: H. Truesdell Files Affidavit in Support of Plan
------------------------------------------------------------------
Hobart G. Truesdell, as the Responsible Person under Musicland
Holding Corp. and its debtor-affiliates' Joint Plan of
Liquidation, asserts that the U.S. Bankruptcy Court for the
Southern District of New York should confirm the Plan because it
complies with Section 1129(a)(1) of the Bankruptcy Code.
According to Mr. Truesdell, he is familiar with the Debtors'
financial affairs and the terms and provisions of the Plan.
The Plan is the result of negotiations between the Debtors, the
Official Committee of Unsecured Creditors and the Informal
Committee of Secured Trade Vendors, Mr. Truesdell relates. "The
Plan was filed to effectuate an orderly distribution of the
Debtors' liquidated assets to facilitate the resolution of the
remaining claims of and by the Debtors' estates and in an effort
to provide the most value to the Debtors' creditors."
Mr. Truesdell contends that the classification of Claims and
Interests in the Plan complies with Section 1122 of the
Bankruptcy Code because the classification is based on the similar
nature of claims or interests contained in each Class.
The Plan complies with Section 1123(a) of the Bankruptcy Code,
Mr. Truesdell avers, because:
-- the Plan provides that Claims in Classes 1 and 2 are
unimpaired under the Plan;
-- the Plan specifies the treatment of each impaired Class of
Claims and Interests;
-- the Plan provides similar treatment of each Class or
Interest of a particular Class;
-- the Plan sets forth the means for implementation of the
Plan including the appointment of the Responsible Person
and the formation of the Plan Committee; and
-- the Plan describes the means and manner of distribution of
the assets and dissolution of the Debtors.
Mr. Truesdell attests that:
(a) the Plan was proposed in good faith with the legitimate
and honest purpose of liquidating the Debtors' remaining
assets and providing for the orderly distribution to all
holders of the Allowed Claims;
(b) the Debtors and their agents have solicited votes on the
Plan in good faith;
(c) the Debtors have paid the fees, costs and expenses in
connection with the Chapter 11 Cases in a manner
consistent with the Court's order;
(d) the Plan does not contemplate any ongoing business
operation, and does not provide for any rate charges over
which a governmental regulatory commission has
jurisdiction;
(e) all persons holding impaired Claims will receive property
having a value of at least as much or more under the Plan
than in a Chapter 7 liquidation;
(f) the Plan is fair and equitable, and does not discriminate
unfairly against the deemed rejecting Class;
(g) the Plan provides for the full payment, on the Effective
Date, of all Allowed Administrative Expense Claims,
Priority Tax Claims, Other Priority Claims and Other
Secured Claims; and
(h) the voting classes of creditors has voted overwhelmingly
in favor of the Plan.
Post-Effective Date Agreement Amended
The Debtors presented to the Court a copy of their Post-effective
Date Agreement with Hobart Truesdell, dated Nov. 27, 2006, with
certain modifications:
(a) If a claimholder's distribution is returned as
undeliverable, no further distributions to the claimholder
will be made unless and until the Responsible Person,
Hobart G. Truesdell, is notified of the claimholder's then
current address, at which time all missed distributions
will be made to the claimholder without interest.
(b) All funds or other undeliverable distributions returned to
Mr. Truesdell and held in the Unclaimed Distributions
Reserve but not claimed within six months of return will
be with respect to Claims in Classes 3 and 4 distributed
to the other creditors of Classes 3 and 4, in accordance
with the provisions of the Plan applicable to
distributions to that Class.
(c) Mr. Truesdell will have no obligation to make a
distribution on account of an Allowed Claim from any
Reserve or account to any holder of an Allowed Claim if
the aggregate amount of all distributions authorized to be
made from all those Reserves or accounts on the
Distribution Date in question is less than $250,000.
(d) Proceeds recovered from the Prosecution of the Unsecured
Transferred Actions will be distributed in accordance with
the terms of the Plan.
A full-text copy of November 27 Post-Effective Date Agreement is
available for free at http://researcharchives.com/t/s?16ad
Schedule of Avoidance Actions Also Amended
The Debtors amend the schedule of current and potential defendants
to Avoidance Actions, which have or may be commenced by Hobart G.
Truesdell, on behalf of the Debtors, or the Plan Committee
pursuant to the Second Amended Plan of Liquidation.
The Defendants, as amended, received transfers totaling more than
$50,000.
An amended list of the Avoidance Action Defendants is available
for free at http://researcharchives.com/t/s?16ae
The hearing to consider confirmation of the Debtors' Plan of
Liquidation began on November 28, 2006. As noted in the
transcript of the November 28 hearing, the Court has yet to rule
on the "feasibility" of the Plan.
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. 24; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
MUSICLAND HOLDING: Wants Deluxe Media Settlement Pact Approved
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Musicland Holding Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to approve
their Settlement Agreement with Deluxe Media Services Inc.
Andrea L. Johnson, Esq., at Kirkland & Ellis LLP, in New York,
relates that Musicland Purchasing Corp. and Deluxe Media entered
into a Logistics Services Agreement. Under the LSA, in exchange
for certain payments by Musicland Purchasing, Deluxe Media
provided certain warehousing, inventory, logistics, sorting and
fulfillment services to the Debtors with respect to the inventory
received from the Debtors' vendors.
In November 2005, Deluxe Media filed a demand for arbitration with
the AAA pursuant to the dispute resolution provisions of the LSA,
and sought $11,200,000 in damages. The Debtors denied Deluxe
Media's allegations in the demand and filed their own counterclaim
for damages caused by Deluxe Media's alleged failure to perform
under the Agreement. Shortly after the Petition Date, the
Arbitration Association, in light of the automatic stay, dismissed
the arbitration.
In February 2006, Deluxe Media asked the Court to compel Musicland
Purchasing to assume or reject the executory contract and to pay
the administrative expense.
Subsequently, the Debtors, the Informal Committee of Secured
Trade Vendors, Wachovia Bank, National Association, as agent for
the Debtors' postpetition senior secured lenders and Deluxe Media
entered into a stipulation whereby:
-- Deluxe Media agreed to adjourn that its request to compel
assumption or rejection of the LSA;
-- the Debtors agreed to pay Deluxe Media, on a provisional
basis, without prejudice to their ability to dispute any
portion of the invoices, and without waiving Deluxe
Media's rights under the LSA; and
-- the parties agreed to conduct discovery and prepare for an
evidentiary hearing on Deluxe Media's postpetition claims
under the LSA.
On March 8, 2006, Deluxe Media asked the Court to determine the
amount and validity of its prepetition lien. Deluxe Media also
sought to compel the Debtors to pay the lien amount. Deluxe Media
alleged that the amount of the prepetition lien is $4,142,931 in
costs and expenses, plus interest at 4% per annum.
The Debtors objected to Deluxe Media's request.
Pursuant to Court-approved expedited procedures for rejection of
executory contracts, the Debtors rejected the LSA in May 2006.
Deluxe Media filed six proofs of claim against the Debtors from
April through June 2006:
Claim No. Claim Amount
--------- ------------
1847 $27,200,000
1848 27,200,000
3324 447,619
3325 447,619
3400 -
3401 -
On June 22, 2006, the Debtors filed a motion for partial summary
judgment, asking the Court to deny Deluxe Media's statutory lien
claim for warehouse charges incurred with respect to goods that
had left Deluxe Media's possession prior to January 22, 2006.
Deluxe Media also filed a motion to partial summary judgment.
The parties engaged in further negotiations. In full and final
settlement of their disputes, the parties agreed to enter into a
settlement.
The salient terms of the Settlement Agreement are:
(a) The Settlement resolves all administrative, priority and
secured claims that Deluxe Media may have against the
Debtors;
(b) Deluxe will have an allowed administrative expense
priority claim for $1,100,000;
(c) the Debtors will pay Deluxe Media $1,100,000 in
satisfaction of the Allowed Claim without delay. Once the
payment is made, Deluxe's Allowed Claim will be reflected
on the claims register as satisfied;
(d) Deluxe Media reserves the right to assert a general
unsecured claim, which for purposes of the proposed Second
Amended Joint Plan of Liquidation is a Class 5 Claim. The
Debtors, the Informal Committee and the Official Committee
of Unsecured Creditors and other parties-in-interest will
have the right to object to any such claim asserted by
Deluxe; and
(e) Upon receipt of the Settlement Payment, the parties will
mutually release and discharge each other from all claims
and liabilities, except Deluxe Media's general unsecured
claim.
"The Settlement Agreement resolves all of the outstanding claims
and motions between the Debtors and Deluxe Media without the need
for negotiations and litigation and the subsequent depletion of
estate resources," Ms. Johnson asserts.
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. 24; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
NAVISITE INC: Oct. 31 Balance Sheet Upside-Down by $3.5 Million
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NaviSite Inc.'s balance sheet showed $100.3 million in total
assets and $103.8 million in total liabilities at Sept. 30, 2006,
resulting in a $3.5 million total stockholders' deficit.
The company reported a $2.6 million net loss on $28.5 million of
net revenues for the quarter ended Oct. 31, 2006, compared with a
$3.5 million net loss on $25.4 million of net revenues for the
same period in 2005.
The $827,000 decrease in net loss is mainly due to the
$1.5 million increase in gross profit and the $491,000 decrease in
operating expenses, partially offset by a $1.3 million increase in
interest expense.
Revenue for the first quarter of fiscal year 2007 increased 12% to
$28.5 million, compared to $25.4 million for the first quarter of
fiscal year 2006, mainly due to the increased sales to new and
existing customers. Sequentially, revenue for the first quarter
of fiscal year 2007 decreased 3% versus the $29.4 million of
revenue in the fourth quarter of fiscal year 2006, primarily due
to the completion in the fourth quarter of fiscal 2006 of a large
professional services contract.
Income from operations was $0.7 million in the first quarter of
fiscal year 2007 as compared to a loss from operations of $1.4
million in the first quarter of fiscal year 2006, and income from
operations of $0.4 million in the fourth quarter of fiscal year
2006.
NaviSite recorded $5.3 million of EBITDA, excluding impairment,
stock-based compensation and one-time charges (EBITDA), for the
first quarter of fiscal year 2007, which represents a 79% increase
over the $2.9 million of EBITDA reported in the first quarter of
fiscal year 2006.
"We are pleased to have started fiscal year 2007 with solid
results for the first quarter," said Arthur Becker, CEO, NaviSite.
"Our strong customer bookings position NaviSite well for revenue
growth in fiscal year 2007 and continue to validate the value
customers place on the services and single-source capabilities
NaviSite has to offer."
The company's balance sheet at Oct. 31, 2006, also showed strained
liquidity with $24.3 million in total current assets.
As of Oct. 31, 2006, the company's principal sources of liquidity
included cash and cash equivalents, a revolving credit facility of
$3.0 million provided by Silver Point Finance and a revolving
credit facility with Atlantic Investors LLC, to borrow a maximum
amount of $5.0 million.
The total net change in cash and cash equivalents for the three
months ended Oct. 31, 2006 was a decrease of $1.8 million. The
primary uses of cash during the three months ended Oct. 31, 2006
included $0.4 million of cash used for operating activities, $1.4
million for purchases of property and equipment and approximately
$0.9 million in repayments on notes payable and capital lease
obligations.
The company's primary sources of cash during the three months
ended Oct. 31, 2006, were $200,000 in proceeds from exercise of
stock options and $600,000 in proceeds from note payable. Net
cash used for operating activities of $400,000 during the three
months ended Oct. 31, 2006, resulted primarily from funding the
$2.6 million net loss and $2.6 million of net changes in operating
assets and liabilities, which was partially offset by non-cash
charges of approximately $4.8 million.
As of Oct. 31, 2006, the company had not started borrowing from
its separate credit facilities with Silver Point and Atlantic
Investors LLC.
Full-text copies of the company's consolidated financial
statements for the first fiscal quarter ended Oct. 31, 2006, are
available for free at http://researcharchives.com/t/s?16b7
Going Concern Doubt
KPMG LLP, in Boston, Massachusetts, raised substantial doubt about
NaviSite Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
years ended July 31, 2005, and 2004. The auditors pointed to the
company's recurring operating losses since inception and
accumulated deficiency.
About NaviSite Inc.
NaviSite Inc. (NASDAQ: NAVI) -- http://www.navisite.com/--
provides application and technology services for companies who
seek to accelerate their business IT performance. NaviSite Inc.
has over 950 customers in 14 data centers, offices in the US, UK
and India.
NOMURA HOME: DBRS Rates $9.3 Million Class N4 Notes at B
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Dominion Bond Rating Service assigned these ratings to the Net
Interest Margin Notes, Series 2006-HE3 issued by Nomura Home
Equity Loan NIM 2006-HE3:
* $22.7 million Class N1 rated at A (low)
* $4.3 million Class N2 rated at BBB (low)
* $2.7 million Class N3 rated at BB (high)
* $9.3 million Class N4 rated at B
The NIM Notes are backed by a 100% interest in the Class X and
Class P Certificates issued by Nomura Home Equity Loan, Inc., Home
Equity Loan Trust, Series 2006-HE3. The Class X Certificates will
be entitled to all excess cashflows of the respective loan groups
in the underlying trust, and the Class P certificates will be
entitled to all prepayment premiums or charges received in respect
of the mortgage loans. In addition, the Notes will benefit from
an underlying swap agreement, Swiss Re Financial Products
Corporation.
Payments on the NIM Notes will be made on the 25th of each month,
commencing in December 2006. Class N4 Notes are Accrual Notes, as
the interest amount accrued on these notes is paid as principal to
Class N1 through N3 Notes and such accrued interest amount is
added to the principal balance of the Class N4 Notes.
On each payment date, Interest payments will be distributed
sequentially to the holders of Class N1 through N3 Notes, followed
by principal payments distributed sequentially to the holders of
Class N1 through N3 Notes, until the Note balance of such class
has been reduced to zero. Interest followed by principal payments
will be then distributed to Class N4 Notes. Any remaining amounts
will be distributed to the Issuer, the Indenture Trustee and
holders of preference shares.
The mortgage loans in the Underlying Trust were primarily
originated or acquired by People's Choice Home Loan Inc., First
NLC Financial Services, LLCand Equifirst Corporation (10.77%).
The remaining mortgage loans were originated by various other
originators.
NORTH AMERICAN: Moody's Lifts Corp. Family Rating to B2 from B3
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Moody's Investors Service upgraded North American Energy Partners
Inc.'s:
-- Corporate Family Rating to B2 from B3;
-- its Probability of Default Rating to B2 from B3; and,
-- its senior unsecured note rating to B3, LGD4, 67% from
Caa1, LGD5, 72%.
The rating upgrade reflects:
-- improved financial flexibility and financial leverage; and,
-- improvement in the company's profitability metrics.
The rating outlook is stable.
NAEP's completion of its IPO has improved the company's financial
flexibility and financial leverage profile. On Nov. 28, 2006,
NAEP completed an IPO of approximately 12.5 million shares of its
common stock. Net proceeds to the company of about
CDN$143 million were used to redeem the company's 9% senior
secured notes due 2010, repay the promissory note used to acquire
the NACG Preferred Corp. Series A preferred shares, and to
purchase certain equipment under operating leases. In conjunction
with the IPO, the company also converted each NAEPI Series B
preferred share into 100 common shares and simplified its
corporate structure, with NACG Holdings Inc., NACG Preferred Corp.
and North American Energy Partners Inc. amalgamating into one
entity, North American Energy Partners Inc.
Moody's estimates pro-forma debt/EBITDA for the last twelve months
ending Sept. 30, 2006 of 3.4x, as compared to actual results of
5.5x. In addition, Moody's estimates pro-forma debt/capital
improved to approximately 59% from 91% at
Sept. 30, 2006.
The company has undertaken several initiatives to improve
profitability levels and strengthen internal controls, following a
history of underestimating costs prior to bidding on a major
contract, internal delays in detecting the subsequent operating
departures from original costs estimates, and consequently, the
need to restate its financial restatements. NAEP has restructured
its management team, added additional finance staff, increased its
focus on equipment efficiency and utilization, and implemented a
company wide procurement system, as well as a business planning
and reporting system. These efforts, in addition to strong sector
activity levels, have had a positive impact on the company's
profitability. The company's EBITDA for the last twelve months
ending Sept. 30, 2006 reached CDN$105 million, as compared to
EBITDA of C$90 million and CDN$43 million in fiscal 2005 and
fiscal 2004, respectively, with EBITDA margins improving to
approximately 20% for the last twelve months ending Sept. 30, 2006
from 18% and 12% in fiscal 2005 and fiscal 2004, respectively. In
addition, NAEP has successfully generated free cash flow in both
fiscal 2006 and the last twelve months ending Sept. 30, 2006.
NAEP's performance should continue to benefit from management's
continued focus on improving operating efficiencies and controls,
with visibility into 2007 strengthened by its CDN$774 million
backlog. However, Moody's notes that the company faces numerous
challenges to maintain its profitability levels, including efforts
to fully resolve its material weaknesses in financial reporting
processes and internal controls, its exposure to higher risk lump
sum and unit price contracts, tight regional labor markets, and
the risk of market share or margin erosion from potential new
competitors or from a greater scope of project work being
conducted internally by NAEP's customer base.
NAEP's B2 Corporate Family Rating remains constrained by:
-- the concentration of its business in the Canadian oil sands
sector;
-- exposure to large customer concentrations;
-- revenue dependence on non-recurring site preparation work
and piling work on new projects or project expansions;
-- the numerous challenges the company faces to fully resolve
its weak internal controls and maintain its profitability
levels;
-- heavy capital spending needs for fiscal 2007;
-- significant liquidity needs for working capital swings and
letter of credit needs;
-- an ongoing acquisition and expansion appetite; and,
-- low tangible fixed asset coverage of debt.
The B2 rating is supported by:
-- the company's strong market position in the western
Canadian oil sands sector;
-- its long-standing position in the oil sands, conventional
oil and gas, and mining markets;
-- a CDN$774 million backlog that provides visibility into the
2007 calendar year;
-- a market environment of rising oil sands sector project
activity over the near to medium term; and,
-- improving financial performance.
The stable rating outlook reflects our expectation that management
will follow a disciplined approach in growing the company and
achieving continued operating improvement, and that the company
will maintain a conservative level of financial leverage, with
capital spending maintained within cash flow.
Moody's notes that financial leverage remains at the high end of
the range appropriate for the B2 Corporate Family Rating and that
in order to strengthen the company within the present rating and
provide more flexibility in the event of weaker market conditions,
NAEP will need to take actions to continue to reduce its debt
burden.
The rating or outlook could face negative pressure if NAEP faces a
material weakness in cash flow generation, margins, or market
share.
Given the recent ratings upgrade, a positive outlook or ratings
upgrade is unlikely in the near-term. However, significantly
increased business diversification in tandem with the maintenance
of low financial leverage could be positive for the ratings.
North American Energy Partners Inc. is headquartered in Acheson,
Alberta, Canada.
ORBITAL SCIENCES: S&P Rates $143 Million Convertible Notes at B+
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Standard & Poor's Ratings Services assigned its 'B+' rating to the
$143.8 million 2.4375% convertible subordinated notes due 2027 of
Orbital Sciences Corp. The notes will be issued via SEC Rule 144A
with registration rights. The proceeds and cash on hand will be
used to repurchase the company's outstanding 9% senior unsecured
notes due 2011, as well as $50 million of common stock.
The ratings on the small satellite and launch vehicle manufacturer
based in Dulles, Virginia, reflect the company's modest size
compared with competitors, limited program diversity, the risky
nature of the launch business, and the possibility of debt-
financed acquisitions. These factors are offset somewhat
by leading positions in market niches, modest debt leverage, ample
liquidity, and currently high levels of defense spending. Orbital
is a leading provider of small launch vehicles and small
geostationary communications satellites, as well as boost vehicles
and targets for missile defense programs.
Ratings actions:
* Orbital Sciences Corp.
-- Corporate credit rating at BB/Stable
-- $143.75 million convertible subordinated notes rated B+
PEACE ARCH: Posts $4.1 Million Net Loss in Fiscal Year 2006
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In its annual financial reports for the fiscal year of 2006, Peace
Arch Entertainment Group, Inc. reported a net loss of $4.1 million
on $21.3 million of total revenues, compared to net earnings of
$1.4 million on $10.7 million of revenues for fiscal year 2005.
The company explains that the decrease in earnings year over year
is primarily driven by the inclusion in fiscal 2005 net earnings
of a one-time gain of $2.6 million relating to the settlement of
an obligation, the overall growth of corporate infrastructure,
higher stock based compensation and warrant expense associated
with investor relations, equity financing and bridge financing.
The higher net interest expense of $1.6 million in fiscal 2006 was
primarily associated with a charge of $700,000 in 2006
representing the financing costs associated with the acquisition
of kaBOOM!.
The significant growth in revenues reflects a 46% increase in
Television segment revenues as well as the result of sales
generated by the company's new Home Entertainment sector through
the acquisition of kaBOOM! Entertainment Inc. in the second
quarter.
Peace Arch Chief Executive Officer Gary Howsam, stated, "In fiscal
2006, we began to see results of our aggressive growth strategy to
refocus our business on distribution and sales and building new
revenue sources. Revenues grew by 98% to $21.3 million with a
substantial increase in the number of film and television programs
acquired, as well as the diversification of our operations with
the recently purchased DVD distribution business, kaBOOM!
Entertainment Inc. The company solidified its management team in
2006 by adding noted industry veterans focused on sales and
distribution. During the year we funded strategic acquisitions
and incurred significant charges associated with these ongoing
efforts. The costs of acquiring kaBOOM!, building the sales group
and commencing active investor relations had a negative impact on
our net earnings for the year. However, we believe that we have
done a good job in delivering on our strategic priorities in 2006.
With the continued expansion of our sales operations and our
anticipated closing of the acquisition of a film and television
library, we now expect future revenue and earnings growth while
steadily increasing shareholder value."
During fiscal 2006, the company delivered ten feature films and
nine other features for distribution were in production at year-
end, in addition to a television event mini-series, "The Tudors."
The company further expanded its television division beyond its
traditional lifestyle and documentary niche to include made-for-
television movies, series and mini-series. The company delivered
ten episodes of lifestyle programming, two documentaries and one
made-for-television movie. In addition, the company had one mini-
series, two television series and three made-for-television movies
in production at year end. During fiscal 2005, Peace Arch
delivered six feature films and 26 episodes of a television series
and had two motion pictures, one television lifestyle series and
one television pilot in production at year end.
At Aug. 31, 2006, Peace Arch's total shares outstanding was
31,308,665 Common Shares (including 343,689 shares in escrow) and
4,347,827 Series I Preference Shares and 2,661,929 Series II
Preference Shares. The company also has outstanding 1,685,896
Series II Preference Share purchase warrants and 1,769,000 Common
Share purchase warrants.
In addition, the company completed an arm's length private
placement of 7.5 million of its Common Shares to a group of
institutional and private investors at a purchase price of
CDN$1.21 per share, yielding gross proceeds of CDN$9,075,000. The
investment group was headed by Todd Wagner.
About Peace Arch Entertainment
Based in Toronto, Vancouver, Los Angeles and London, England,
Peace Arch Entertainment Group, Inc. (AMEX: PAE) (TSX: PAE) --
http://www.peacearch.com/-- produces and acquires feature films,
television and home entertainment content for distribution to
worldwide markets. Peace Arch Home Entertainment is one of the
leading distributors of DVDs and related products in Canada. The
company recently entered into an agreement to acquire Castle Hill
Productions and Dream LLC, whose library of more than 500 classic,
contemporary and genre films is expected to supplement Peace
Arch's own annual output of more than two dozen new feature films
and long form television programs.
* * *
In its consolidated financial statements for the fiscal year ended
2006, the company relates that in spite of substantial operating
losses and working capital constraints, it has undergone
substantial growth in corporate and sales infrastructure and also
through acquisitions. The company continues to maintain its day-
to-day activities and produce and distribute films and television
programming.
The company is pursuing various financing initiatives. If the
company is unsuccessful, it will be required to significantly
reduce or limit operations.
PERFORMANCE TRANSPORTATION: Gets Removal Period Interim Extension
-----------------------------------------------------------------
The Honorable Michael J. Kaplan of the U.S. Bankruptcy Court for
the Western District of New York extends, on an interim basis, the
period within which Performance Transportation Services, Inc., and
its debtor-affiliates may remove certain actions to and including
the later to occur of:
a) Dec. 27, 2006; or
b) 30 days after the entry of an order terminating the
automatic stay with respect to the particular action
sought to be removed.
The interim order will be without prejudice to any position the
Debtors may take regarding whether Section 362 of the Bankruptcy
Code applies to stay any actions, Judge Kaplan says.
The Debtors want the Court to extend the period within which they
may remove certain actions to and including the later to occur of:
(i) Feb. 28, 2007; or
(ii) 30 days after the entry of an order terminating the
automatic stay with respect to the particular action
sought to be removed.
Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York,
says extension of the Removal Period will help the Debtors:
* to concentrate on negotiations with principal creditor
constituencies and customers. The outcome of those
negotiations is crucial to finalizing the terms of the
Debtors' business plan and their successful emergence from
bankruptcy;
* to make fully informed decisions on the potential removal of
all Actions;
* not to forfeit valuable rights under Section 1452 of the
Judiciary Code.
Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America. The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment. The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.
Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts. David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors. When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts. (Performance Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
PLATFORM LEARNING: Has Until January 17 to Decide in E&Y Lease
--------------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York gave Platform Learning Inc. until
Jan. 17, 2007, to decide whether to assume or reject its sublease
agreement with Ernst & Young U.S. LLP.
The company maintains its headquarters at 55 Broad Street in New
York City in offices leased from Ernst & Young. Ernst & Young
sought to collect unpaid rent from the Debtor or, in the
alternative, an order compelling the Debtor to reject the lease.
The Debtor argued that it requires continued and uninterrupted
operations at the New York headquarters in order to move forward
with the confirmation of a successful plan of reorganization.
Eric W. Sleeper, Esq., at Herrick, Feinstein LLP, explained that
the lease is a necessary and essential element of the Debtor's
rehabilitation efforts.
Based in Broad Street, New York, Platform Learning Inc. --
http://www.platformlearning.com/-- provides supplemental
educational services through its Learn-to-Succeed tutoring
program to students attending public schools. The Company filed
for chapter 11 protection on June 21, 2006 (Bankr. S.D.N.Y. Case
No. 06-11391). David M. Bass, Esq., and Eric W. Sleeper, Esq., at
Herrick Feinstein LLP represent the Debtor in its restructuring
efforts. Edward Joseph LoBello, Esq., at Blank Rome LLP
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it listed
total assets of $21,026,148, and total debts of $36,933,490.
PRC LLC: Moody's Places First Time B2 Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service assigned PRC, LLC, a first time B2
corporate family rating with a stable outlook.
Moody's assigned a Ba3 rating to its first lien credit facilities,
consisting of an undrawn $20 million revolving credit facility, a
$25 million delayed draw facility for capital expenditures, and a
$105 million term loan.
Moody's also assigned a B3 rating to its $55 million second lien
term loan facility. On Nov. 3, 2006, IAC/InterActiveCorp agreed
to sell PRC to private equity firm Diamond Castle Holdings and
members of PRC's management team.
The B2 corporate family rating incorporates PRC's high business
line and client concentration, which compares to sector peers
rated in the Caa category.
However, the company's size and financial strength compare to
sector peers rated B2 for the overall B2 corporate family rating
assignment.
The ratings reflect both the overall probability of default of the
company at a 50% LGD rate, to which Moody's assigns a PDR of B2,
and a loss-given-default of LGD-3 for the first lien facilities
and an LGD-5 for the second lien term loan.
Ratings assigned are:
-- Corporate Family Rating B2
-- $20 million first lien revolving credit facility at Ba3,
LGD3, 31%
-- $25 million first lien delayed draw capital expenditures
term loan at Ba3, LGD3, 31%
-- $105 million first lien term loan at Ba3, LGD3, 31%
-- $55 million second lien term loan sat B3, LGD5, 76%
Headquartered in Plantation, Florida, PRC, LLC provides outsourced
customer care and sales and marketing business process outsourcing
services.
PRIMUS TELECOM: Debt Impairment Cues Moody's to Junk Ratings
------------------------------------------------------------
Moody's Investors Service has downgraded Primus Telecommunications
Group Inc.'s corporate family rating to Caa3 from Caa1.
The downgrade reflects the high probability of debt impairment
within the capital structure over the rating horizon, given the
company's high levels of debt in relation to its operating
metrics. Despite modest improvements in Primus's operating
performance over the past twelve months, Moody's does not believe
that the company will demonstrate a significant turnaround in its
performance to stave off distressed debt restructuring over the
rating horizon. The rating is modestly tempered by $71 million in
liquidity, which is expected to fund the operations through 2007.
Moody's has taken these rating actions:
* PTGI
-- Corporate Family Rating Downgraded to Caa3 from Caa1
-- Probability of Default Rating Downgraded to Caa3 from
Caa1
-- 12.75% Senior Notes Due 2009 Downgraded to Ca, LGD5,
87%, from Caa3
-- 5.75% Convertible Subordinated Debentures Due 2007
Affirmed at Ca, LGD6, 95%
* Primus Telecommunications Holdings, Inc
-- Senior Secured Term Loan due 2011 Downgraded to Caa2,
LGD3, 37%, from B3
-- 8% Senior Notes Due 2014 Downgraded to Caa3, LGD3, 45%,
from Caa1
The outlook remains negative.
The Caa3 rating reflects:
a) uncertainties surrounding the company's ability to meet the
debt obligations over the next two years and its ability to
fund its continuing operations;
b) Primus's limited financial and operating flexibility due to
its high leverage, coupled with a continuing cash burn;
and,
c) Competitive pressures from larger and better capitalized
incumbent operators.
The Negative Outlook reflects Moody's opinion that Primus's high
debt level hinders its ability to operate in an industry
characterized by rapidly changing technologies and intense
competition.
Primus is a competitive telecom provider headquartered in McLean,
Virginia. The company offers telecommunications services to small
and medium-sized enterprises, residential customers and other
telecommunications carriers and resellers located in the United
States, Australia, Canada, the United Kingdom and Western Europe.
QUEBECOR WORLD: S&P Holds Corporate Credit Rating at B+
-------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
its 'B+' long-term corporate credit rating, on printing company
Quebecor World Inc. At the same time, Standard & Poor's removed
the ratings from CreditWatch with negative implications, where
they were placed Sept. 28, 2006.
The outlook is negative.
The move follows Standard & Poor's review of Quebecor World's
operating and financial strategies, as well as its financial
policies, in the context of an intensely competitive environment.
"Although management must still improve operations, stem the
decline in profitability metrics, and strengthen the balance
sheet, we believe the company's near-term liquidity position is
likely to continue to be adequate," said Standard & Poor's credit
analyst Lori Harris.
Into the affirmation, Standard & Poor's incorporated an
expectation that Quebecor World will improve EBITDA as a result of
the company's restructuring and capital investment activities.
"Should Quebecor World's financial performance not be in line with
our expectations in the next several quarters, the ratings could
face pressure," Ms. Harris added.
The ratings on Quebecor World reflect the company's highly
leveraged financial profile, its weakness in revenues and earnings
despite restructuring efforts, operating losses in the European
division, inefficiencies related to the installation of new
printing presses, and difficult industry conditions.
In addition, unfavorable shifts in product mix and higher energy
costs are adding to the company's challenges and have resulted in
margins well below historical levels.
The negative outlook reflects Standard & Poor's ongoing concerns
regarding the challenges the company faces given its weak
operating performance, including lower earnings, reduced free cash
flow because of lower profits and increased capital expenditure
requirements, and difficult industry fundamentals.
Downward pressure on the ratings could result from the continued
deterioration in Quebecor World's operations or weakness in credit
protection measures. In the medium term, there are limited
prospects for an upgrade. The outlook could be revised to stable
if the company demonstrates improved operating performance.
QUEBECOR WORLD: Moody's Junks Senior Subordinated Debt Rating
-------------------------------------------------------------
Moody's Investors Service downgraded Quebecor World Inc.'s
Corporate Family Rating as well as Quebecor World Capital
Corporation and Quebecor World Capital ULC's Senior Unsecured
rating to B2 from B1, and also lowered Quebecor World Inc.'s
Senior Subordinated rating to Caa1 from B3.
The outlook for all ratings remains negative.
The action is prompted by Moody's belief that QWI will be unable
to make significant progress to lower leverage and improve both
interest coverage and cash flow within the rating horizon of
approximately the next 18 months.
The outlook remains negative because Moody's currently expects
QWI's credit metrics in 2007 to be weak for the B2 rating.
Moody's expects QWI's Debt/EBITDA leverage at the end of 2006 to
approximate 7X (after Moody's standard adjustments), (EBITDA-
Capital Expenditures)/Interest to be below 1X and free cash flow
to be materially negative. Given expectations for continued
challenging industry economics, Moody's does not currently expect
much improvement in these and other metrics over the next several
years, although the rating agency acknowledged that the company's
cash burn rate will decline in 2007 with a full year's elimination
of the common stock dividend.
The company will need to improve its EBITDA margin materially,
most likely due to the efficiency of the new presses that are now
largely installed, in order to maintain its B2 Corporate Family
Rating.
Ratings affected by this action:
* Quebecor World Inc.
-- Corporate Family Rating downgraded to B2 from B1; and,
-- Probability of Default Rating: downgraded to B2 from B1
* Quebecor World (USA) Inc.
-- Senior Subordinate rating downgraded to Caa1 from B3;
and,
-- $130 million Convertible Senior Subordinated Notes,
LGD6, 94%
* Quebecor World Capital Corporation
-- Senior Unsecured rating downgraded to B2 from B1;
-- $200 million Senior Notes due 2008, LGD4, 50%;
-- $400 million Senior Notes due 2013, LGD4, 50%; and,
-- $150 million Senior Debentures due 2007, LGD4, 50%
* Quebecor World Capital ULC
-- Senior Unsecured rating downgraded to B2 from B1; and,
-- $450 million Senior Notes due 2016, LGD4, 50%
Quebecor World Inc. is one of the world's largest commercial
printers, headquartered in Montreal, Quebec, Canada.
RAAC SERIES: Loan Loss Cues Moody's to Junk Rating on One Tranche
-----------------------------------------------------------------
Moody's Investors Service downgraded the Cl. B-2 tranche from RAAC
Series 2004-SP2 Trust and placed an additional two tranches from
the same transaction on review for possible downgrade. The
underlying collateral consists of seasoned fixed-rate first lien
mortgage loans.
The action is attributed to a higher than anticipated loss taken
on a single loan which led to a write-down of a portion of the Cl.
B-2 tranche balance.
These are the rating actions:
* Issuer: RAAC Series 2004-SP2 Trust
-- Class M-3, currently Baa2; on review for possible
downgrade
-- Class B-1, currently Ba2; on review for possible
downgrade
-- Class B-2, downgraded to Ca, previously B2
SHEARSON FINANCIAL: Earns $4.4 Million in 2006 Third Quarter
------------------------------------------------------------
Shearson Financial Network Inc., formerly known as Consumer Direct
of America, reported earnings of $4.4 million on revenues of
$14 million for the nine months ended Sept. 30, 2006 and earnings
of $2.5 million on $10.3 million of revenues for the third quarter
ended Sept. 30, 2006.
This compares with a $7.6 million net loss on revenues of $6.3
million for the nine months ended Sept. 30, 2005 and a $1.9
million net loss on $2.5 million of revenues for the three months
ended Sept. 30, 2005.
The increase in net income in the third quarter is related to an
increase in net operating income of $992,000 related to the
company's acquisitions, $2.7 million forgiveness of notes payable,
offset by the $415,000 charged to debt discount expense and
interest of $404,768 for the Sept. 30, 2005 quarter.
Net revenues from origination or sale of loans increased 90.8% or
$2.3 million, to $4.8 million for the quarter ended Sept. 30, 2006
from $2.5 million for the quarter ended Sept. 30, 2005. The
increase in revenues is directly related to the company's
acquisitions of Real Properties Technologies Inc., Allstate
Funding Corp. and eHome Credit Corp., of which revenues totaled
approximately $4.6 million. Data base revenue income from Real
Property Technologies Inc. was $5.4 million for the quarter ended
Sept. 30, 2006.
For the quarter ended Sept. 30, 2006, one note totaling
approximately $2.7 million between Club Vista Holdings, Inc and
the company was recorded as forgiven, of which Club Vista recorded
this debt forgiveness on Dec. 31, 2005. The company incurred
costs associated with the debt discount amortization related to
the beneficial conversion features on three of its notes in the
amount of $1.2 million for the three months ended Sept. 30, 2005,
as compared to $72,993 for the three months ended Sept. 30, 2006.
The company's CEO and Chairman Michael Barron stated, "We believe
our operating results in both the Real Properties Technologies
Inc. unit and the Shearson Home Loans are reflective of the
progress the company is making with our acquisition strategy in
both industry segments. We have had our challenges in the past
and now look forward to realizing our future growth potential
under our current business strategy."
At Sept. 30, 2006, the company's consolidated balance sheet showed
$84.4 million in total assets, $36.7 million in total liabilities,
and $47.8 million in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2006, are available for
free at http://researcharchives.com/t/s?16bd
Acquisitions
On June 5, 2006, the company acquired all the outstanding stock of
Real Property Technologies, a New York corporation, for 100,000
shares of Series A-1 Convertible Preferred Stock valued at
approximately $40 million.
On June 9, 2006, the company agreed to acquire certain assets and
defined liabilities of eHome CreditCorp., a New York corporation,
for 7,500 shares of Series A-1 Preferred Stock valued at
approximately $3 million.
On July 29, 2006, the company entered into a Shares Exchange
Agreement and Plan of Reorganization Agreement with Allstate Home
Loans Inc. and the sole shareholder of all of the issued and
outstanding shares of Allstate. Pursuant to the Agreement, which
closed on July 29, 2006, the company is purchasing from the sole
shareholder 850 shares of Allstate's issued and outstanding shares
of common stock. As of July 29, 2006, Allstate has 1,000 shares
common stock that are issued and outstanding. The consideration
for this purchase equaled 82,000,000 in common Stock and
$1.25 million in the company's preferred stock.
Sources and Uses of Cash
During the first nine months of fiscal 2006 the company had net
cash used in operating activities of $53.3 million compared to a
net cash provided by operating activities of $1.4 million in 2005.
The primary sources of net cash used in operating activities was
stock based expenses of $3.4 million, forgiveness of debt of $7.8
million, increase in accounts receivable of $5.4 million, increase
of mortgage loans held for sale of $31.3 million, increase in loan
receivable of $2 million, and the increase in goodwill of $12.9
million.
The primary sources of net cash provided by operating activities
was a decrease in receivables from loan sold of $3.6 million, debt
discount expense of $2.9 million relating primarily to beneficial
conversion debt discount, and stock based expenses of $2.1 million
for the nine month period ending Sept. 30, 2005.
Net cash used for investing activities during the first nine
months of fiscal 2006 was $25.5 million primarily related to fixed
assets purchased by acquisitions, which occurred during the
period. Net cash used for investing activities during the first
nine months of fiscal 2005 was $16,733, which was attributable to
the purchase of property and equipment.
Net cash provided by financing activities for the nine months
ended Sept. 30, 2006 was $80.2 million. This consisted of $31.5
million on advances from lines of credit, proceeds of notes
payable of $1.4 million, increase in capital for Allstate
acquisition of $1.9 million, and issuance of preferred stock of
$44.3 million.
Net cash provided by financing activities for the nine months
ended Sept. 30, 2005 was $1.5 million. This consisted primarily
of net payments under the warehouse lines of credit of $1.7
million.
Going Concern Doubt
Pollard-Kelley Auditing Services, Inc., in Fairlawn Ohio, raised
substantial doubt about ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Dec. 31, 2005. The auditing firm pointed to the
company's inability to generate significant revenues or profits.
About Shearson Financial
Headquartered in Las Vegas, Nevada,Shearson Financial Network,
Inc. -- http://www.shearsonfinanciasl.com/-- operates as a
direct-to-consumer mortgage broker and banker. The company
originates mortgage loans and home equity loans in the United
States. Its mortgage loan products include conforming mortgage
products, which are adjustable and fixed rate loan programs;
alternative A/sub prime mortgage products; fixed rate amortizing
and fixed rate with a balloon payment programs; JUMBO loans, which
are adjustable and fixed rate loan program; and fixed-rate first
mortgage loans. As of December 31, 2005, Shearson Financial
Network operated through 28 retail branches in 12 states, It was
formerly known as Blue Star Coffee Inc. and changed its name to
Consumer Direct of America in 2002. Further, the company changed
its name to Shearson Financial Network, Inc. in June 2006.
SITESTAR CORP: Earns $282,468 in 2006 Third Quarter Ended Sept. 30
------------------------------------------------------------------
Sitestar Corporation's net income for the three months ended
Sept. 30, 2006, increased to $282,468 from net income of $116,524
for the three months ended Sept. 30, 2005. Total revenues also
increased to $1,463,885 from $818,408 for the same period in 2005.
At Sept. 30, 2006, the company's balance sheet showed total assets
of $4,384,039, total liabilities of $2,665,430, and total
stockholders' equity of $1,718,609.
The company's September 30 balance sheet also showed strained
liquidity with $317,633 in total current assets available to pay
$1,904,434 in total current liabilities.
Cash and cash equivalents totaled $137,152 and $36,047 at
Sept. 30, 2006 and at Dec. 31, 2005, respectively. EBITDA was
$1,721,583 for the nine months ended Sept. 30, 2006, as compared
to $841,017 for the same period in 2005.
Common Stock
During the nine months ended Sept. 30, 2006, the company issued
2,050,000 shares of common stock in connection with the purchase
of NetRover Inc.
Effective Jan. 1, 2006, the company entered into a definitive
agreement pursuant to which it acquired 100% of the issued and
outstanding shares of stock of NetRover Inc., a Canadian
corporation.
The transaction consists of the acquisition of over 7,000
customers including dial-up and DSL Internet subscribers, web
hosting and other business accounts. The total purchase price was
$604,535 representing the fair value of the company, paid by a
down payment of 2,000,000 shares of the company's common stock,
with the balance represented by a non-interest bearing note
payable by the company to Idacomm Inc. with the note due in full
by a balloon payment on Jan. 6, 2007.
Because the acquisition of NetRover was consummated on Jan. 1,
2006, there are no results of operations of these companies for
the nine months ended Sept. 30, 2005, included in the accompanying
Sept. 30, 2006, and 2005 consolidated financial statements.
A full-text copy of the company's financial report for the quarter
ended Sept. 30, 2006, is available for free at:
http://researcharchives.com/t/s?16bf
Going Concern Doubt
As reported in the Troubled Company Reporter on May 16, 2006,
Bagell, Josephs & Company LLC expressed substantial doubt about
Sitestar Corp.'s ability to continue as a going concern after
auditing the company's financial statements for the years ended
Dec. 31, 2005 and 2004. The auditing firm pointed to the
company's $1,715,797 working capital deficiency as of Dec. 31,
2005.
About Sitestar Corp.
Headquartered in Lynchburg, Virginia, Sitestar Corporation --
http://www.sitestar.com/-- is an Internet access and computer
solutions provider that offers narrow and broadband Internet
access, Web hosting and design and other value-added services to
residential and commercial customers. The company's customers
include residential and commercial accounts throughout the United
States and Canada.
Sitestar's wholly owned subsidiaries include: Sitestar.net;
netROVER, Inc.; Prolynx; SurfWithUs.Net; Lynchburg.net; Advanced
Internet Services; Computers by Design; and CBD Toner Recharge.
The Company was founded in 1999 and is traded on the over-the-
counter bulletin board exchange under the symbol SYTE.
STRUCTURED ASSET: Fitch Rates $19-Mil. Class B Certificate at BB+
-----------------------------------------------------------------
Fitch rates Structured Asset Securities Corp. $1.55 billion
mortgage pass-through certificates, series 2006-BC4:
-- $1.283 billion classes A1 - A5 'AAA';
-- $61.5 million class M1 'AA+';
-- $53.6 million class M2 'AA';
-- $27.6 million class M3 'AA-';
-- $24.4 million class M4 'A+';
-- $18.1 million class M5 'A';
-- $18.1 million class M6 'A-';
-- $15.0 million class M7 'BBB+';
-- $12.6 million class M8 'BBB';
-- $15.8 million class M9 'BBB-'; and
-- $18.9 million class B 'BB+'
The 'AAA' rating on the senior certificates reflects the 18.65%
total credit enhancement provided by the 3.9% class M1, 3.4% class
M2, 1.75% class M3, 1.55% class M4, 1.15% class M5, 1.15% class
M6, 0.95% class M7, 0.8% class M8, 1% class M9, the privately
offered 1.2% class B, as well as the initial 1.8%
overcollateralization.
Fitch believes that the amount of credit enhancement will be
sufficient to cover credit losses, including limited bankruptcy,
fraud and special hazard losses. In addition, the ratings reflect
the quality of the mortgage collateral, the strength of the legal
and financial structures, and the master servicing capabilities of
Wells Fargo Bank, N.A., which is rated 'RMS1' by Fitch.
The aggregate trust consists of 7,572 fixed and adjustable-rate,
conventional, first and second lien residential mortgage loans,
95.89% of which have original terms to maturity of not more than
30 years and 4.11% of which have original terms to maturity of
40 years. As of the Nov. 1, 2006 cut-off date, the mortgages have
an aggregate principal balance of approximately $1,576,618,375.
30.03% of the mortgage pool is fixed rate and 69.97% is
adjustable. The mortgage pool has a weighted average original
loan-to-value ratio of 80.91%, a weighted average coupon of
8.278%, and a weighted average remaining term of 356.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.
The mortgage loans were originated by various originators or
acquired by various originators or their correspondents in
accordance with such originator's respective underwriting
standards and guidelines. The largest percentages of originations
were those made by BNC Mortgage, Inc., Countrywide Home Loans,
Inc., and Lehman Brothers Bank, FSB.
SASCO, a special purpose corporation, deposited the loans in the
trust, which issued the certificates. For federal income tax
purposes, an election will be made to treat the trust fund as
multiple real estate mortgage investment conduits.
STRUCTURED ASSET: Fitch Rates $11-Mil. Class B Certificates at BB+
------------------------------------------------------------------
Fitch rates Structured Asset Securities Corp. $778.9 million
mortgage pass-through certificates, series 2006-BC5:
-- $598.9 million classes A1-A5 'AAA';
-- $71.5 million class M1 'AA+';
-- $33.5 million class M2 'AA';
-- $11.2 million class M3 'AA-';
-- $11.6 million class M4 'A+';
-- $17.2 million classes M5 and M6 'A';
-- $9.2 million class M7 'A-';
-- $6.8 million class M8 'BBB+';
-- $8 million class M9 'BBB'; and
-- $11.2 million class B 'BB+'.
The 'AAA' rating on the senior certificates reflects the 25% total
credit enhancement provided by the 8.95% class M1, 4.2% class M2,
1.4% class M3, 1.45% class M4, 1.20% class M5, 0.95% class M6,
1.15% class M7, 0.85% class M8, 1% class M9, the privately offered
1.4% class B, as well as the initial 2.45% overcollateralization.
Fitch believes that the amount of credit enhancement will be
sufficient to cover credit losses, including limited bankruptcy,
fraud and special hazard losses. In addition, the ratings reflect
the quality of the mortgage collateral, the strength of the legal
and financial structures, and the master servicing capabilities of
Wells Fargo Bank, N.A., which is rated 'RMS1' by Fitch.
The aggregate trust consists of 3,811 fixed- and adjustable-rate,
conventional, first and second lien residential mortgage loans,
96.21% of which have original terms to maturity of not more than
30 years and 3.79% of which have original terms to maturity of
40 years. As of the Nov. 1, 2006 cut-off date, the mortgages have
an aggregate principal balance of approximately $798,487,780.
Approximately 32.48% of the mortgage pool is fixed rate and 67.52%
is adjustable. The mortgage pool has a weighted average original
loan-to-value ratio of 81.57%, a weighted average coupon of
8.11%, and a weighted average remaining term of 356 months.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.
The mortgage loans were originated by various originators or
acquired by various originators or their correspondents in
accordance with such originator's respective underwriting
standards and guidelines. The largest percentages of originations
were those made by BNC Mortgage, Inc., Countrywide Home Loans,
Inc., People's Choice Home Loans, Inc., and Argent Mortgage
Company, LLC.
SASCO, a special purpose corporation, deposited the loans in the
trust, which issued the certificates. For federal income tax
purposes, an election will be made to treat the trust fund as
multiple real estate mortgage investment conduits.
TDS INVESTOR: Moody's Holds Corporate Family Rating at B2
---------------------------------------------------------
Moody's Investors Service affirmed the ratings of TDS Investor
Corporation after the recent report of phase one of a process
which will result in a acquisition of Worldspan LP, one of its
larger GDS competitors.
The immediate financial impact on TDS, prior to the closing of the
acquisition is fairly minimum - TDS will invest $250 million in
the form of subordinated note in Worldspan, and $125 million of
which will be funded by TDS' own balance sheet and the other half
funded by a loan from its parent company. The proposed
transaction should aid Travelport in solidifying its position as a
key GDS provider, with the total global GDS providers to reduce to
three from the current four, and Worldspan's strength in the on-
line segment.
These ratings were affirmed:
-- Corporate family rating at B2
-- PDR at B2
-- $275 million revolving credit facility due 2012, Ba3, LGD2,
29%
-- $125 million synthetic letter of credit facility due 2013,
Ba3, LGD2, 29%
-- $2,200 million term loan facility due 2013, Ba3, LGD2, 29%
-- EUR235 million senior unsecured notes due 2014, Caa1, LGD5,
78%
-- $150 million floating rate senior unsecured notes due 2014,
Caa1, LGD5, 78%
-- $450 million fixed senior unsecured notes due 2014, Caa1,
LGD5, 78%
-- $300 million subordinated notes due 2016, Caa1, LGD6, 93%
-- EUR160 million subordinated notes due 2016, Caa1, LGD6, 93%
-- Speculative Grade Liquidity rating -- SGL-2
The rating outlook is stable.
Developments that could cause downward rating pressure include
-- a significant acceleration of a shift in booking channels
towards direct supplier distribution and Travelport's B2C
business unable to capture growth opportunities to offset
losses; and,
-- free cash flow growth going forward unable to match
expectations either because of an inability to extract cost
savings currently envisioned and/or underperforming the
operational forecast.
Conversely, upward rating pressure if Travelport could:
-- significantly de-lever;
-- increase FCF as a result of solid performance in non-U.S.
GDS markets; or,
-- improve its international B2C business performance.
Headquartered in Parsippany, New Jersey, Travelport is one of the
world's largest and most geographically diverse travel companies,
operating 20 leading brands, including Orbitz, an online travel
agency; Galileo, a global distribution system; and GTA, a
wholesaler of global travel content. For the fiscal year 2005, it
had revenues of $2.4 billion.
TEMBEC INC: DBRS Confirms Sr. Unsecured Debentures' Rating at CCC
-----------------------------------------------------------------
Dominion Bond Rating Service confirmed the rating of Tembec Inc.'s
Senior Unsecured Debentures at CCC. DBRS downgraded the rating of
Tembec on Jan. 31, 2006.
The rating action reflected the sharper-than-expected decline in
Tembec's operating performance and liquidity position, and the
risk that the Company would not have the liquidity required to
fund its operations substantially beyond the next 12 months.
However, the repayment of lumber duties in fiscal first quarter
2007 will provide additional cash of $242 million ensuring
that Tembec's liquidity will be sufficient to meet near-term
requirements. The Company's financial risk has been reduced to
a level commensurate with the above rating.
Despite the much-needed cash infusion, the trend remains Negative,
reflecting the high probability that:
(1) a deterioration in operating performance could occur in
the next year, and
(2) continued weak earnings and cash flows may jeopardize the
refinancing of a large debt maturity in 2009.
Successful supply management strategies have enabled pulp and
paper manufacturers to implement cost-push product price increases
over the past year. However, industry supply discipline may be
increasingly difficult to maintain since most of the high-cost
production capacity has been closed. Failure to close a widening
demand/supply gap would result in price erosion and declining
earnings.
Continued weak pulp and paper markets and the possibility
that industry production curtailments may not be sufficient to
support cost-push price increases elevates the risk that Tembec's
operating performance and liquidity could quickly deteriorate.
The declining U.S. residential construction industry, continuing
lumber trade restrictions, and the potential of a U.S. economic
slowdown exacerbates the situation.
The Company is highly exposed to weakness in the U.S. dollar
relative to the Canadian dollar and the euro, and additional
strength in the Canadian dollar will have a significant impact on
earnings. Equally important is the significant cost pressures
facing Tembec, which are showing no signs of abating. The trend
will remain Negative until the Company's financial performance
significantly improves and the 2009 debt maturity is successfully
refinanced.
TERWIN MORTGAGE: Moody's Junks Rating on Class B-1 Certificates
---------------------------------------------------------------
Moody's Investors Service downgrades one certificate and places
another certificate under review for possible downgrade both
issued by Terwin Mortgage Trust 2004-EQR1.
The underlying collateral consist of non-performing, fixed-rate
and adjustable-rate, first-lien residential mortgage loans.
These subordinate classes have been downgraded or placed under
review for possible downgrade based on the low credit enhancement
levels compared to the current loss projections. The
overcollateralization and reserve fund are rapidly declining due
to the realized losses and low payments. As a result, the
subordinate tranches have limited credit support.
These are the rating actions:
* Terwin Mortgage Trust, Series 2004-EQR1
-- Class M-2, Current Rating: A2, under review for possible
downgrade.
-- Class B-1, Downgraded from B3 to Caa3.
TIMKEN CO: Sells Latrobe Steel to Watermill, Hicks for $215 Mil.
----------------------------------------------------------------
The Timken Company completed the sale of its subsidiary, Latrobe
Steel, to a group of investors led by the Watermill Group, Hicks
Holdings and Sankaty Advisors, for approximately $215 million in
cash.
The proceeds provide resources for general corporate purposes,
including strategic growth initiatives and pension funding.
"We are taking actions across our portfolio to increase the
ability to generate consistent profitable growth," James W.
Griffith, president and chief executive officer, said. "We
believe the divestment of Latrobe Steel will create new
opportunities for us to invest in key industrial markets that have
the potential to generate greater value for our shareholders over
time."
Steven E. Karol, founder and managing partner of the Watermill
Group said, "Watermill has a long history of buying and helping
businesses improve. Latrobe Steel is attractive to us due to its
position in growing and profitable markets and a strong management
team. Latrobe has manufacturing and distribution facilities that
are up-to-date, well-maintained and which will support the
company's continued growth. We look forward to partnering with
Hicks, Sankaty and local management in this endeavor."
"As with our recent sale of the precision steel components
business in Europe and our intention to exit the tubing business
in the United Kingdom, the sale of Latrobe Steel reinforces our
focus on the alloy steel business," Salvatore J. Miraglia, Jr.,
president of Timken's Steel Group, said. "We invested in our
alloy steelmaking capabilities during 2006, adding a new induction
heat-treat line and expanding large bar capacity, and will
continue to look for opportunities to strengthen our portfolio in
this core area going forward."
About Latrobe Steel
Headquartered in Latrobe, Pa., Latrobe Steel through its two
primary business units, Latrobe Steel Manufacturing and Latrobe
Steel Distribution, produces and distributes more than 300 grades
of specialty steels for use in aerospace applications, high
performance cutting tools, aluminum casting dies, extrusion and
thread roll dies and other demanding applications. Latrobe Steel
has more than 800 associates across the United States, including
approximately 530 in Latrobe, Pa.
About The Watermill Group
The Watermill Group -- http://www.watermill.com-- is a private
strategic investment firm that focuses on acquiring middle-market
companies in which it can add value through strategic and
operational guidance as well as investment capital.
About Hicks Holdings LLC
Dallas, Tex.-based Hicks Holdings LLC is a private investment firm
that makes corporate acquisitions as well as owns and manages
assets in sports and real estate. The firm's strategy is based on
the "buy build" concept pioneered by Tom Hicks in the mid-1980s.
Examples of the buy build strategy include Dr Pepper/7-Up,
International Home Foods and Chancellor/Clear Channel.
About Sankaty Advisors
Sankaty Advisors, LLC, the credit affiliate of Bain Capital, LLC,
is a private manager of high yield debt obligations. With
approximately $13 billion in assets, Sankaty invests in a variety
of securities, including leveraged loans, high-yield bonds,
stressed debt, distressed debt, mezzanine debt, structured
products and equity investments.
About The Timken Company
Headquartered in Canton, Ohio, The Timken Company (NYSE: TKR)
-- http://www.timken.com/-- manufactures highly engineered
bearings and alloy steels. It also provides related components
and services such as bearing refurbishment for the aerospace,
medical, industrial, and railroad industries. The Company has
operations in 27 countries and employs 27,000 employees.
* * *
As reported in the Troubled Company Reporter on Oct. 30, 2006,
Moody's Investors Service confirmed The Timken Company's Ba1
Corporate Family Rating and the Ba1 rating on the company's
$300 Million Unsecured Medium Term Notes Series A due 2028 in
connection with the rating agency's implementation of its new
Probability-of-Default and Loss-Given-Default rating methodology.
TRIMOL GROUP: Sept. 30 Balance Sheet Upside-Down by $571,000
------------------------------------------------------------
Trimol Group Inc. reported a $215,000 net loss on zero revenues
for the third quarter ended Sept. 30, 2006, compared with $146,000
of net income on $1.8 million of revenues for the same period in
2005.
At Sept. 30, 2006, the company's balance sheet showed $1.6 million
in total assets and $2.2 million in total liabilities, resulting
in a $571,000 total stockholders' deficit.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with $1.6 million in total current assets,
available to pay $2.2 million in total current liabilities.
During the three month period ended Sept. 30, 2006, company's
operations consisted solely of administrative activities and those
related to pursuing the breach of contract claims against the
Republic of Moldova. The operations of Intercomsoft Limited,
company's wholly owned subsidiary, were inactive during this
period.
On or about Feb. 11, 2006, the company received a notice from the
Government of the Republic of Moldova wherein it advised the
company that it does not intend to renew the Supply Agreement
which, unless renewed, expired by its terms on April 29, 2006.
The company does not believe that such non-renewal notice was sent
timely under the applicable provisions of the Supply Agreement and
has contested such non-renewal notice.
On June 27, 2006, the company and Intercomsoft commenced an action
in the United States District Court for the Southern District of
New York against the Ministry of Economics of the Republic of
Moldova and the Government of the Republic of Moldova seeking
damages of approximately $41 million for breach of contract and an
injunction prohibiting Moldova from producing further essential
government documents in accordance with the terms of the Supply
Agreement. As a consequence of discussions with counsel to the
defendants in this action, the company withdrew the action in
August 2006, without prejudice to its rights to reinstate it in
the United States courts.
On Sept. 20, 2006, Intercomsoft filed a Demand for Arbitration
with the International Chamber of Commerce, International Court of
Arbitration, in Geneva, Switzerland. The demand repeats and
incorporates the claims that were set forth in the complaint in
the withdrawn prior action noted above.
Full-text copies of the company's consolidated balance sheet for
the third quarter ended Sept. 30, 2006, are available for free at:
http://researcharchives.com/t/s?16b0
Going Concern Doubt
Paritz & Company, P.A., in Hackensack, New Jersey, raised
substantial doubt about Trimol Group Inc.'s ability to continue
as a going concern after auditing the company's consolidated
financial statements for the second quarter ended June 30, 2006.
The auditor pointed to the company's stockholders' deficit and the
expiration of the contract of its only customer.
About Trimol Group, Inc.
Trimol Group, Inc., owns all of the outstanding shares of
Intercomsoft Limited, a company which is engaged in the operation
of a computerized photo identification and database management
system utilized in the production of secure essential government
identification documents such as passports, drivers' licenses,
national identification documents and other forms of essential
personal identification.
ULICO CASUALTY: A.M. Best Upgrades Rating with Stable Outlook
-------------------------------------------------------------
A.M. Best Co. has upgraded the financial strength rating to B+
(Very Good) from B (Fair) of Ulico Casualty Company of Delaware.
The outlook for this rating has been revised to stable from
positive.
In addition, A.M. Best has affirmed the FSR of B+ (Very Good) of
The Union Labor Life Insurance Company of Baltimore, MD. The
outlook for this rating is stable. Concurrently, A.M. Best has
affirmed the FSR of B- (Fair) of Ulico Standard of America
Casualty Company of California. The outlook for this rating has
been revised to stable from negative. These companies are wholly-
owned subsidiaries of the holding company, ULLICO Inc. of
Washington, DC.
The FSR upgrade reflects Ulico Casualty's improvement in a number
of key areas that have led to strengthened capitalization,
operating performance and internal control standards.
Policyholder surplus has grown for three consecutive years due in
large part to the significant improvement in claims handling
processes and controls. During the past two years, Ulico Casualty
has devoted considerable resources to corporate governance and
risk management. The level of customer loyalty and affinity
toward the Ulico name gives it a sustainable competitive advantage
in its core lines of fiduciary liability and union general
liability.
The affirmation of Union Labor Life's FSR reflects its
strengthened capital position and improved invested asset quality
from earlier periods, as well as its established niche in the
Taft-Hartley market.
The FSR affirmation and revised outlook of USA Casualty, which is
now in run-off, is based on the company's maintenance of
sufficient capital to pay reported loss and loss adjustment
expenses that arise from business written in prior years. The
company's risk-adjusted capitalization is supportive of its FSR.
A.M. Best Co., established in 1899, is the world's oldest and most
authoritative insurance rating and information source.
UNITED HOSPITAL: Wants Until April 30 to File Chapter 11 Plan
-------------------------------------------------------------
New York United Hospital Medical Center and U.H. Housing Corp. ask
the United States Bankruptcy for the Southern District of New York
to extend until:
a) April 30, 2007, their exclusive period to file a chapter 11
plan; and
b) June 7, 2007, their period to solicit acceptances of that
plan.
The Court previously extended the Debtors' exclusive plan-filing
period until Dec. 29, 2006, as published in the Troubled Company
Reporter on Sept. 14, 2006.
The Debtors inform the Court that they have prepared their plan of
liquidation and the accompanying disclosure statement, and are in
the process of resolving several large claims against the Debtors'
estates. The Debtors and the Committee believe that resolving the
claims will facilitate and expedite creditor distributions under
the plan.
In addition, the Debtors will analyze the appropriate structure
for the wind-down and liquidation of their businesses to maximize
tax efficiencies for the Debtors and their creditors. The delay
of plan-filing period, the Debtors say, is necessary until after
the large claims have been analyzed and reconciled and the
structure for the liquidation has been determined.
Headquartered in Port Chester, New York, New York United Hospital
Medical Center is a community healthcare provider and a member of
the New York-Presbyterian Healthcare System, serving several
Westchester communities, including Port Chester, Rye, Mamaroneck,
Rye Brook, Purchase, Harrison and Larchmont. The Company filed
for chapter 11 protection on Dec. 17, 2004 (Bankr. S.D.N.Y. Case
No. 04-23889). Burton S. Weston, Esq., at Garfunkel, Wild &
Travis P.C. and Lawrence M. Handelsman, Esq., at Stroock & Stroock
& Lavan LLP represent the Debtor in its restructuring efforts.
Craig Freeman, Esq. and Martin G. Bunin, Esq., at Alston & Bird
LLP represent the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it listed
total assets of $39,000,000 and total debts of $78,000,000.
UNIVERSAL PROPERTY: Posts $1.4 Million Loss in 2006 Third Quarter
-----------------------------------------------------------------
Universal Property Development Acquisition Corp. reported a
$1.42 million net loss on $141,217 of revenues for the third
quarter ended Sept. 30, 2006, compared with a $1.45 million net
loss for the same period in 2005. The company had no revenues in
the third quarter of 2005.
At Sept. 30, 2006, the company's balance sheet showed $7.3 million
in total assets, $2 million in total liabilities, $844,399 in
minority interest, and $4.5 million in total stockholders' equity.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with $956.161 in total current assets available
to pay $2 million in total current liabilities.
The revenues were the result of the producing wells in the Canyon
Creek, Catlin and Texas Energy subsidiaries.
Full-text copies of the company's consolidated balance sheet at
Sept. 30, 2006, are available for free at:
http://researcharchives.com/t/s?16af
Going Concern Doubt
KBL, LLP expressed substantial doubt about Universal Property'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, and is dependent upon the sale
of equity securities to provide sufficient working capital to
maintain continuity.
Headquartered in Juno Beach, Florida, Universal Property
Development & Acquisition Corp. is a holding company that operates
through the formation of joint ventures with other entities in the
oil and natural gas acquisition, development and production
industry. Its current operating joint ventures are Canyon Creek
Oil & Gas, Inc., West Oil & Gas, Inc., Winrock Energy, Inc., Texas
Energy, Inc. and UPDA Petro Trading, Inc.
US AIRWAYS: Pilots Express Grave Concerns on Planned Delta Merger
-----------------------------------------------------------------
Following a meeting with US Airways management on Dec. 6, 2006,
the leadership of the US Airways Group Inc. and America West pilot
groups have expressed significant concerns about the proposed
merger with Delta Air Lines Inc. The leaders point out that, by
failing to integrate two pilot groups under one contract, US
Airways management has not yet properly merged US Airways and
America West, demonstrating little chance of completing the merger
of a third airline.
Equally important, the pilot groups, both of which are represented
by the Air Line Pilots Association, International, have determined
that US Airways' Delta proposal raises serious issues about the
job protections contained in the US Airways and America West
contracts, and are questioning the company's ability to move
forward with this transaction.
"Management cannot successfully merge without labor on board. We
have made it clear that our pilots have zero interest in ratifying
a contract that provides them with only minimal gains," said
Captain John McIlvenna, America West Master Executive Council
Chairman. "US Airways, despite its statements to its investors
and the financial community, has not completed the business of
integrating US Airways and America West. This failure calls into
question their ability to successfully merge three airlines,
continue to serve their passengers, deliver dividends to their
investors, and maintain a motivated employee base."
The US Airways and America West pilot groups are insisting that
management must address their concerns before proceeding with
their plans for any future merger.
"Although they have had ample time and opportunity, US Airways
hasn't yet merged US Airways and America West, and they have not
integrated the pilot groups under one contract," said Captain Jack
Stephan, US Airways MEC Chairman. "I don't expect that they will
be capable of merging a third airline into the fold. ALPA has
determined that job protections are available to the pilots in
their contract language, and will continue to protect the interest
of all ALPA pilots."
Joint negotiations with US Airways management for a single, fair
contract have been ongoing for more than one year, and during this
time, the pilots have received only concessionary proposals that
resemble the bankruptcy-driven contracts made as pilot investments
in the airline during the 9/11 era. Both pilot groups remain
focused on the issue of achieving a fair single contract, one that
is commensurate with US Airways' position in the marketplace.
About ALPA
Founded in 1931, Air Line Pilots Association, International --
http://www.alpa.org/-- represents 60,000 pilots at 39 airlines in
the U.S. and Canada.
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 Nov. 21, 2006,
Fitch Ratings affirmed its ratings of US Airways Group, Inc.,
as Issuer Default Rating (IDR) at 'CCC'; Secured Term Loan Rating
at 'B/RR1'; and Senior Unsecured Rating at 'CC/RR6'.
Fitch's ratings apply to approximately $1.4 billion in debt
obligations. The Rating Outlook has been revised to Stable from
Positive.
As reported in the Troubled Company Reporter on Nov. 17, 2006,
Standard & Poor's Ratings Services placed its ratings on US
Airways Group Inc., including the 'B-' corporate credit ratings on
US Airways Group Inc. and its major operating subsidiaries America
West Holdings Corp., America West Airlines Inc., and US
Airways Inc., on CreditWatch with developing implications.
At the same time, ratings on enhanced equipment trust certificates
of Delta Air Lines Inc. were also placed on CreditWatch with
developing implications.
US TELEPACIFIC: Moody's Holds Corporate Family Rating at B3
-----------------------------------------------------------
Moody's Investors Service affirmed US TelePacific Corporation's B3
corporate family rating on the news of the pending acquisition of
Arrival Communications.
In addition, Moody's affirmed the B1 rating for the existing
$30 million senior secured revolving credit facility and for the
$175 million first lien term loan facility. The company also has
a $100 million 2nd lien term loan facility, which Moody's has not
rated.
The outlook is stable.
The affirmation assumes that Telepacific will fund the entire
Arrival acquisition with debt. The acquisition of Arrival will
expand the company's presence in California and solidify the
company's position as the largest competitive local exchange
carrier in California and Nevada.
Moody's has affirmed these ratings:
* US TelePacific Corporation
-- Corporate Family Rating at B3;
-- Probability of Default Rating at B3;
-- Senior Secured Revolving Credit Facility at B1 LGD2,
29%; and,
-- 1st Lien Term Loan at B1 LGD2 -29%.
Outlook is Stable.
The B3 corporate family rating reflects TelePacific's financial
risk, lack of free cash flow generation, challenging competitive
position as a CLEC, the complexity of integrating Arival on the
heels of the acquisition of MPower, completed in August 2006, and
the potential for further acquisitions, which may postpone debt
reduction. The ratings benefit from the company's emerging
operating scale in California and Nevada and the expected EBITDA
growth driven by merger synergies.
The company's leverage is expected to be about 6.0x 2006 EBITDA at
closing, and is high relative to the CLECs that Moody's rates.
Moody's continues to expect TelePacific to generate break-even
free cash flow in 2007. However, consistent with
telecommunications industry trends, TelePacific has reached the
inflection point in its operations where the existing customer
base is covering the high fixed costs, and the incremental revenue
is accretive to EBITDA at levels slightly below the company's 60%
gross margin.
The recent acquisitions by TelePacific continue the consolidation
trend in the telecommunications industry that is gradually easing
the overcapacity that was built up over the last decade. The
combined entity is expected to benefit from a geographic
concentration in a heavily populated region that has a higher
growth rate of businesses than the national average.
Moody's expects TelePacific to drive cost synergies by optimizing
the combined transport and colocation facilities, and to drive
revenue and cash flow growth by expanding customer penetration in
its existing markets without significant additional capital.
The stable rating outlook considers the company's growth plans and
the reasonable likelihood of achieving merger synergies to
commence free cash flow generation to drive deleveraging over the
rating horizon.
Given the challenges management will face in integrating the
operations and achieving cost synergies, the ratings are somewhat
prospective in nature. Should the company fail to quickly realize
on the expected merger benefits, the outlook or the rating could
come under downward pressure.
TelePacific Communications, headquartered in Los Angeles,
California, is a CLEC serving nearly 900,000 access line
equivalents, pro forma the acquisition of Arrival, of Bakersfield,
California.
UWINK INC.: Sept. 30 Balance Sheet Upside-Down by $3 Million
------------------------------------------------------------
uWink Inc. reported a $3.5 million net loss on net sales of
$35,720 for the third quarter ended Sept. 30, 2006, compared to a
$610,103 net loss on negative sales of $76,290 for the same period
in 2005. The negative sales of $76,290 for the third quarter
ended Sept. 30, 2005, is a result of an accounting error in
recording sales in said period.
The increase in net loss is primarily due to the increase in
operating expenses and the recognition of a $2.6 million expense
for the fair value of financing warrants issued during the period.
At Sept. 30, 2006, the company's balance sheet showed $1.9 million
in total assets and $4.9 million in total liabilities, resulting
in a $3 million total stockholders' deficit.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with $991,899 in total current assets available
to pay $4.9 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the third quarter ended Sept. 30, 2006, are
available for free at http://researcharchives.com/t/s?16b9
Going Concern Doubt
Kabani & Company, Inc., in Los Angeles, California, raised
substantial doubt about uWink's ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the company's significant losses and negative cash flow from
operations since its inception, its working capital deficit and
its difficulty in developing a substantial source of revenue.
About uWink Inc.
Based in Los Angeles, California, uWink, Inc. (OTCBB: UWNK) --
http://wwwuwink.com/-- is a digital entertainment company that
develops interactive entertainment software and platforms for
restaurants, bars, and mobile devices. uWink opened it's first
uWink Bistro restaurant in Los Angeles in October of 2006.
VALASSIS COMMS: Releases Pretrial Brief on ADVO Litigation
----------------------------------------------------------
A public version of Valassis Communications Inc.'s reply to ADVO
Inc.'s pretrial brief is available for free at:
http://researcharchives.com/t/s?16be
A copy of the company's pretrial brief is also available at:
http://researcharchives.com/t/s?16c1
Valassis filed suit on Aug. 30, 2006, seeking to rescind its
$1.3 billion merger agreement with ADVO based on fraud and
material adverse changes.
As reported in the Troubled Company Reporter on July 7, 2006,
Valassis inked a definitive merger agreement with ADVO under
which it will acquire all of the outstanding common shares of ADVO
stock for $37 per share in cash in a merger. The fully financed
transaction was valued at $1.3 billion, including $125 million in
existing ADVO debt that Valassis planned to refinance.
Valassis subsequently sued ADVO in the Delaware Chancery Court to
rescind the merger agreement based on fraud and material adverse
changes, alleging that ADVO management materially misrepresented
the financial health of the company and failed to reveal internal
control deficiencies.
About ADVO
Based in Windsor, Conn., ADVO, Inc. -- http://www.ADVO.com/-- is
a direct mail media company, with annual revenues of $1.4 billion.
Serving 17,000 national, regional and local retailers, the company
reaches 114 million households, more than 90% of the nation's
homes, with its ShopWise(R) shared mail advertising. ADVO employs
3,700 people at its 23 mail processing facilities, 33 sales
offices.
About Valassis
Headquartered in Livonia, Michigan, Valassis Communications Inc.
(NYSE: VCI) -- http://www.valassis.com/-- provides marketing
services to consumer-packaged goods manufacturers, retailers,
technology companies and other customers with operations in the
United States, Europe, Mexico and Canada. Valassis' products and
services portfolio includes: newspaper-delivered promotions and
advertisements such as inserts, sampling, polybags and on-page
advertisements; direct-to-door advertising and sampling; direct
mail; Internet-delivered marketing; loyalty marketing software;
coupon and promotion clearing; and promotion planning and analytic
services. Valassis has been listed as one of FORTUNE magazine's
"Best Companies to Work For" for nine consecutive years. Valassis
subsidiaries include Valassis Canada, Promotion Watch, Valassis
Relationship Marketing Systems, LLC and NCH Marketing Services,
Inc.
* * *
As reported in the Troubled Company Reporter on Nov. 1, 2006,
Moody's Investors Service downgraded Valassis Communications,
Inc.'s senior unsecured note ratings to Ba1 from Baa3. Moody's
also assigned a Ba1 Corporate Family Rating, Ba1 Probability of
Default Rating, and LGD4 loss given default assessments to
Valassis' debt securities. The ratings remain on review for
downgrade.
VIKING SYSTEMS: Sept. 30 Balance Sheet Upside-Down by $10.1 Mil.
----------------------------------------------------------------
Viking Systems Inc. earned $1.5 million of net income on
$1.5 million of net revenues for the three months ended
Sept. 30, 2006, in contrast to a $2 million net loss on
$1.1 million of net revenues in 2005.
At Sept. 30, 2006, the company's balance sheet showed $4.7 million
in total assets and $14.8 million in total liabilities, resulting
in a $10.1 million stockholders' deficit.
The company's Sept. 30 balance sheet also showed strained
liquidity with $4.1 million in total current assets and $6.5
million in total current liabilities.
The company has financed its operations principally through
private sales of equity securities and convertible notes. From
Jan. 1, 2004, through Sept. 30, 2006, the company has raised net
proceeds of $8.1 million through the sale of common and preferred
stock in private placements, and $5.7 million through the issuance
of convertible promissory notes. As of Sept. 30, 2006, the
company had cash, cash equivalents and short-term investments of
$1.8 million compared to $434,503 as of Dec. 31, 2005. The
company incurred operating losses in 2006 and 2005, and at
Sept. 30, 2006, had an accumulated deficit of approximately
$17,086,933.
A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?16ba
Going Concern Doubt
As reported in the Troubled Company Reporter on May 16, 2006,
Peterson & Co., LLP, in San Diego, California, raised substantial
doubt about Viking Systems' ability to continue as a going concern
after auditing the Company's financial statements for the year
ended Dec. 31, 2005. The auditor pointed to the Company's
recurring losses from operations and working capital deficit.
About Viking Systems
Based in La Jolla, California, Viking Systems, Inc. (OTCBB: VKSY)
-- http://www.vikingsystems.com/-- provides 3D endoscopic vision
systems to hospitals for minimally invasive surgery. Viking is
leveraging that position to become a market leader in bringing
integrated solutions to the digital surgical environment. The
company's focus is to deliver integrated information,
visualization and control solutions to the surgical team,
enhancing their capability and performance in MIS and complex
surgical procedures.
WACHOVIA BANK: Moody's Holds Ba1 Rating on $7MM Class CS-2 Certs.
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of seven classes
and affirmed the ratings of 11 classes of Wachovia Bank Commercial
Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 2005-WHALE 6 as:
-- Class A-2, $51,650,000, Floating, affirmed at Aaa;
-- Class X-1A, Notional, affirmed at Aaa;
-- Class X-1B, Notional, affirmed at Aaa;
-- Class X-2, Notional, affirmed at Aaa;
-- Class X-3, Notional, affirmed at Aaa;
-- Class B, $38,257,000, Floating, upgraded to Aaa from Aa1;
-- Class C, $35,524,000, Floating, upgraded to Aaa from Aa2;
-- Class D, $30,059,000, Floating, upgraded to Aaa from Aa3;
-- Class E, $27,326,000, Floating, upgraded to Aaa from A1;
-- Class F, $24,593,000, Floating, upgraded to Aa1 from A2;
-- Class G, $24,594,000, Floating, upgraded to Aa3 from A3;
-- Class H, $24,593,000, Floating, upgraded to A3 from Baa1;
-- Class J, $21,861,000, Floating, affirmed at Baa2;
-- Class K, $32,793,000, Floating, affirmed at Baa3;
-- Class WS-1, $3,000,000, Floating, affirmed at Ba3;
-- Class WS-2, $7,000,000, Floating, affirmed at Ba1;
-- Class CS-1, $3,000,000, Floating, affirmed at Baa3; and
-- Class CS-2, $7,000,000, Floating, affirmed at Ba1.
As of the Nov. 17, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 74.9%
to $331.2 million from $1.3 billion at securitization. The
Certificates are collateralized by nine loans ranging in size from
4.8% to 30.5% of the pool. The trust has not realized any losses
since securitization and there are no loans currently in special
servicing.
Moody's was provided with year-end 2005 operating results for 100%
of the pool. Moody's is upgrading Classes B, C, D, E, F, G and H
due to increased credit support from loan payoffs and stable
overall pool performance.
The largest loan is the 14 Wall Street Loan, which is secured by a
1 million square foot, 37-story, Class B office building located
in lower Manhattan. Built in 1911 and renovated in 1996, the
property is located at the northwest corner of Wall Street and
Nassau Street. The major tenants are Skidmore, Owings, & Merrill,
LP and the New York Stock Exchange. As of September 2006,
occupancy was 62.8%, compared to 63.3% at securitization. The
loan matures in October 2007 and the borrower has three 12-month
extension options. The loan is interest only. The sponsors are
Shaya Boymelgreen and Boymelgreen Developers.
Moody's current shadow rating is Baa2, the same as at
securitization.
The second largest loan is the 100 Church Street Loan
($70 million - 22.5%), which is secured by a 1.1 million square
foot, 21-story, Class B office building located in the City Hall
submarket of New York City. The major tenant is the City of New
York. Current occupancy is 47.7%, compared to 32.2% at
securitization. Property performance has improved somewhat due to
increased occupancy. The loan matures in August 2007 and the
borrower has one 12-month extension option. The loan is interest
only. The loan sponsor is Tamir Sapir.
Moody's current shadow rating is Baa2, the same as at
securitization.
The third largest loan is the Grand Resort Apartments Loan
($50 million - 16.1%), which is secured by a 768-unit multifamily
property located in Anaheim, California. Built in 1969, the
property is located approximately five miles northwest of
Disneyland. The property is in the midst of a $12 million
renovation program. The property's performance has been
temporarily impacted by its current renovation. As of August 2006
occupancy is 78.0%, compared to 94.7% at securitization. The loan
matures in May 2010 and is interest only. The loan sponsor is
Pacific Property Company. Moody's current shadow rating is Baa2,
the same as at securitization.
The pool's collateral is a mix of office, multifamily, lodging
and retail. The collateral properties are located in six states--
New York, California, Pennsylvania, Illinois, Georgia and Florida.
All of the loans are floating rate.
WCI COMMUNITIES: Unfavorable Trends Cue Moody's Negative Outlook
----------------------------------------------------------------
Moody's lowered the ratings of WCI Communities, Inc., including
its corporate family rating to B1 from Ba3 and the ratings on its
senior subordinated notes to B3 from B1.
The ratings outlook is negative.
The downgrade was triggered by a continuation of the unfavorable
trends and developments regarding WCI's closings, new orders,
cancellation rates, and revenue and earnings generation. In
addition, the company will probably end up its year with 60% or
higher debt leverage.
The negative outlook reflects Moody's expectation that:
-- WCI's earnings in 2007 will decline significantly from 2006
levels, perhaps breaking into negative territory;
-- that complying with its interest coverage covenant may
become problematic; and;
-- that management's ability to build liquidity and reduce
debt leverage in the face of a downturn of unknown breadth
and duration is as yet unproven.
Going into its fourth quarter, WCI was projecting roughly
$1.2 billion of tower closings in the subsequent six month period,
with roughly half to occur during the fourth quarter and the
remainder in the first quarter of 2007. Because of delays in
getting certificates of occupancy as well as in getting buyers to
agree on closing dates, some of these fourth quarter closings will
slide into the first quarter, while cancellation rates on those
that have closed are tracking somewhat higher than what the
company expects the total average to be.
The news in the single family business continues unfavorable, with
very weak net new order generation. The upshot is that while
Moody's still expects WCI to pay down a significant portion of its
short-term debt from proceeds from the tower closings, this pay
down will be less and later than had been anticipated, debt
leverage will stay unacceptably high for the former rating, and
covenant compliance will become very challenging.
Going forward, the ratings could be reduced again if the company
were unwilling or unable to reduce and maintain debt leverage
below 60% after the tower closings occur, if earnings turned
sharply negative, or if covenant violations occur. The ratings
outlook could stabilize if the company were to place greater
emphasis on building liquidity and reducing outstanding debt, were
to stay profitable in the coming quarters, and were able to meet
its debt covenant tests with some headroom.
These ratings were affected:
-- Corporate family rating changed to B1 from Ba3;
-- Probability of default rating changed to B1 from Ba3; and
-- Senior sub debt ratings changed to B3 from B1.
LGD assessment and rate on the senior sub debt changed to LGD5,
83% from LGD5 81%.
Headquartered in Bonita Springs, Florida, WCI Communities, Inc. is
a fully integrated homebuilding and real estate services company
with 60 years of experience in the design, construction, and
operation of leisure-oriented, amenity-rich master planned
communities targeting affluent homebuyers. Revenues and earnings
for 2005 were $2.6 billion and $186 million, respectively.
WISE METALS: S&P Lifts Corporate Credit Rating to CCC from CCC-
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Linthicum, Maryland-based Wise Metals Group LLC to 'CCC'
from 'CCC-'.
At the same time, Standard & Poor's raised its senior secured note
rating on the company to 'CC' from 'C'.
The outlook is positive.
"The upgrade reflects the company's success in garnering
additional financing from The Employees' Retirement System of
Alabama to bolster its liquidity while successfully replacing its
fourth-quarter 2006 volume and the majority of the 2007 volume
that it lost when Crown, Cork & Seal Inc. informed Wise in the
third quarter of 2006 that it had arranged to cover its beverage
can sheet requirements," said Standard & Poor's credit analyst
Thomas Waters.
"We expect liquidity to be sufficient in the very near term to
allow Wise to fund its operations until new sales contracts, which
should alleviate margin pressures, take effect at the start of
2007 and begin to markedly improve operating margins and financial
performance in 2007."
Nevertheless, liquidity remains relatively thin, and Wise has been
experiencing negative cash flows and increasing debt levels.
Wise participates in the mature and consolidated aluminum
beverage-can industry through the manufacture of aluminum sheet
from a single facility.
"Although we still believe the company's financial position is
precarious and makes it vulnerable to unforeseen events, we
believe the additional liquidity, the replacement of much of its
2007 lost volume, and new contracts should push the company toward
sustainable financial improvement," Mr. Watters said.
"However, if Wise loses further business or does not benefit from
some of its new contracts, we will revise the outlook to negative
or possibly lower the ratings."
* District Judge Rules that Part of BAPCPA Violates 1st Amendment
-----------------------------------------------------------------
The Honorable James Rosenbaum of the U.S. District Court in
Minneapolis ruled last week that a portion of the 2005 bankruptcy
law violates the First Amendment.
Judge Rosenbaum said that part of the law "forbids truthful and
possibly efficacious advice" from an attorney to a client.
Robert Milavetz, Esq., and Barbara Nevin, Esq., at Milavetz,
Gallop & Milavetz and two anonymous plaintiffs filed a complaint
for a declaratory judgment against the Bankruptcy Abuse Prevention
and Consumer Protection Act in Minneapolis District Court on Nov.
14, 2005.
They said that a provision of BAPCPA prohibits attorneys from
advising their clients to incur more debt while considering for
bankruptcy.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Abraxas Petro ABP (20) 118 (3)
Acorda Therapeut. ACOR (8) 40 5
AFC Enterprises AFCE (40) 157 4
Alaska Comm Sys ALSK (25) 566 26
Alliance Imaging AIQ (18) 674 30
AMR Corp. AMR (514) 30,128 (1,202)
Armstrong World AWI (1,197) 4,721 1,132
Atherogenics Inc. AGIX (136) 197 146
Bare Essentials BARE (619) 139 42
Blount International BLT (107) 441 121
CableVision System CVC (5,400) 9,776 (400)
Centennial Comm CYCL (1,062) 1,434 33
Charter Comm-a CHTR (5,632) 15,198 (999)
Choice Hotels CHH (78) 286 (48)
Cincinnati Bell CBB (679) 1,889 55
Clorox Co. CLX (55) 3,539 (20)
Compass Minerals CMP (74) 671 145
Corel Corp. CRE (22) 113 11
Crown Media HL CRWN (449) 917 190
Delphi Corp DPHIQ (7,756) 17,514 2,250
Deluxe Corp DLX (68) 1,296 (188)
Denny's Corporation DENN (231) 454 (73)
Domino's Pizza DPZ (592) 360 (20)
Echostar Comm DISH (365) 9,351 1,696
Emeritus Corp. ESC (115) 713 (34)
Empire Resorts I NYNY (25) 61 (2)
Encysive Pharm ENCY (88) 69 33
Gencorp Inc. GY (98) 1,017 (3)
Graftech International GTI (157) 875 253
Hansen Medical HNSN (32) 38 33
HealthSouth Corp. HLS (1,339) 3,310 (314)
I2 Technologies ITWO (46) 208 1
ICOS Corp ICOS (18) 285 111
IMAX Corp IMAX (33) 243 84
Immersion Corp IMMR (22) 47 31
Immunomedics Inc IMMU (21) 49 21
Incyte Corp INCY (66) 465 295
Indevus Pharma IDEV (147) 79 35
Inergy Holdings NRGP (18) 1,647 (12)
Investools Inc. IEDU (63) 120 (79)
J Crew Group Inc. JCG (55) 414 128
Kaiser Aluminum KALU (3,105) 1,598 123
Koppers Holdings KOP (86) 637 148
Ligand Pharm LGND (239) 232 (162)
Lodgenet Entertainment LNET (62) 269 18
McMoran Exploration MMR (38) 438 (46)
New River Pharma NRPH (65) 170 135
Northwest Airlines NWACQ (7,718) 13,498 659
NPS Pharm Inc. NPSP (182) 237 150
Omnova Solutions OMN (2) 366 72
ON Semiconductor ONNN (1) 1,417 316
Portal Software PRSF (20) 112 (14)
Qwest Communication Q (2,576) 21,114 (1,569)
Radnet Inc. RDNT (75) 127 (1)
Riviera Holdings RIV (29) 222 10
Rural Cellular RCCC (540) 1,410 165
Rural/Metro Corp. RURL (89) 305 51
Savvis Inc. SVVS (142) 442 16
Sealy Corp. ZZ (188) 933 89
Sepracor Inc. SEPR (33) 1,352 424
St. John Knits Inc. SJKI (52) 213 80
Sun-Times Media SVN (322) 905 (383)
Town Sports Inte. CLUB (25) 417 (55)
Vertrue Inc. VTRU (9) 441 (75)
Weight Watchers WTW (103) 935 (72)
Worldspace Inc. WRSP (1,574) 604 140
WR Grace & Co. GRA (480) 3,641 902
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
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related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
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Monthly Operating Reports are summarized in every Saturday edition
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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, Ronald C. Sy, 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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re-mailing and photocopying) is strictly prohibited without prior
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*** End of Transmission ***