/raid1/www/Hosts/bankrupt/TCR_Public/070215.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, February 15, 2007, Vol. 11, No. 39
Headlines
ACE SECURITIES: Moody's Puts Two Certificate Ratings on Review
ADELPHIA COMMS: Time Warner Cable Becomes Public; To Trade at NYSE
ADVANCED MARKETING: Panel Objects to Capstone Retention as Advisor
ADVANCED MARKETING: Hires Focus Management as Financial Advisor
AEGIS ASSET: S&P Cuts Rating on Series 2003-2 Class B Certs. to BB
AIR AMERICA: Selling Substantially All Assets for $4.25 Mil. Today
AIRBASE SERVICES: Court Confirms Chapter 11 Plan of Reorganization
AMERICAN REAL: Purchase Offer Opposed by Lear Corp. Shareholder
AMERIGAS PARTNERS: Earns $55.6 Million in Quarter Ended Dec. 31
ANDREW CORP: Posts $2.5 Million Net Loss in Quarter Ended Dec. 31
AOT BEDDING: S&P Puts BB- Rating on Proposed $450 Mil. Facilities
ARMOR HOLDINGS: Earns $2.3 Billion in Fiscal Year Ended Dec. 31
ATLANTIC BROADBAND: Proposed Add-on Cues Moody's to Hold Ratings
ATRIUM COS: Pending Buyout Prompts S&P to Hold Credit Rating at B
AURIGA LABORATORIES: Trevor Pokorney to Join Board of Directors
AVIS BUDGET: Agrees to Secure Unit's $1 Billion Senior Notes
BANC OF AMERICA: S&P Lifts Rating on Class M Certs. to BB- from B+
BETRAND CHAFFEE: Taps American Healthcare as Financial Advisor
BEVERAGES & MORE: S&P Junks Rating on $100 Mil. Sr. Secured Notes
BOBCAT GAS: Moody's Assigns B2 Ratings to $185 Million Term Loans
CHARTER COMMS: Good Performance Cues S&P's Positive CreditWatch
CHARTER COMMS: Proposed Refinancing Cues Moody's to Hold Ratings
COLLINS & AIKMAN: Two Canadian Plants Will Lay Off 525 Employees
COLLINS & AIKMAN: Wachovia Bank Has Until Feb. 28 to Answer Charge
CREDIT SUISSE: S&P Drops 'A' Class I-B-3 Certificate Rating to 'D'
DAIMLERCHRYSLER: Reports EUR3.2 Bil. Preliminary 2006 Net Income
DAIMLERCHRYSLER: Chrysler Discloses Recovery & Transformation Plan
DANA CORP: Judge Lifland Amends Deadlines of 1113/1114 Schedules
DANA CORP: Wants to Sell Columbia Property for $1.7 Million
DAVITA INC: Fitch Rates $400 Mil. Senior Unsecured Notes at B
DAVITA INC: Gambro Buyout Cues Moody's to Upgrade Ratings
EMERGE INTERACTIVE: Files for Bankruptcy Protection in Florida
EMERGE INTERACTIVE: Case Summary & 19 Largest Unsecured Creditors
EPIC DATA: Posts CDN$190,000 Net Loss in First Qtr. Ended Dec. 31
EOP OPERATING: Blackstone Deal Cues Moody's to Cut Sr. Debt Rating
FORD MOTOR: Merrill Lynch Cuts Recommendation on Shares to "Sell"
FRASER PAPERS: Weak Performance Prompts S&P's Ratings Downgrade
GATEHOUSE MEDIA: S&P Rates Proposed $960 Mil. Sr. Facilities at B+
GRAY TELEVISION: Moody's Cuts Ba2 Corporate Family Rating to Ba3
GSAA HOME: Moody's Rates Class B3 Certificates at Ba2
GSMPS MORTGAGE: Losses Cue Moody's Ratings Review, Eyes Downgrade
HOME PRODUCTS: Files Schedules of Assets & Liabilities
HOME PRODUCTS: Hires Morris Anderson as Financial Advisor
HUGHES COMMS: Unit Inks $115 Mil. Loan Facility with Bear Stearns
INFOUSA INC: Board Member Martin Kahn Resigns Effective February 2
INFOUSA INC: Earns $8 Million in 2006 Fourth Quarter
JARDEN CORPORATION: Plans $100MM Sr. Subordinated Notes Offering
KARA AT FREEHOLD: Case Summary & 117 Largest Unsecured Creditors
LEAR CORP: Shareholder to Vote Against American Real's Buyout Bid
MAPCO EXPRESS: Calfee Deal Cues S&P to Hold B+ Corp. Credit Rating
MMM HOLDINGS: Moody's Puts Debt Ratings on Review, Eyes Downgrade
MYLAN LABORATORIES: Earns $135.4 Million in Quarter Ended Dec. 31
NAVISTAR INTL: Intends to Appeal Delisting Warning from NYSE
ORLEANS HOMEBUILDERS: Posts $7.5MM Net Loss in 2nd Fiscal Quarter
PENN OCTANE: Inks Purchase Option Agreement with Shore Trading LLC
PILLOWTEX CORP: Court Confirms Joint Plan of Liquidation
PINNACLE FOODS: $2 Billion Buyout Deal Cues Moody's Ratings Review
PORTRAIT CORP: Section 341 Meeting Slated Tomorrow
QWEST COMMUNICATIONS: Earns $593 Million in Year Ended December 31
RESMAE MORTGAGE: Files Chapter 11 Protection in Delaware
RESMAE MORTGAGE: Case Summary & 20 Largest Unsecured Creditors
SAINT VINCENTS: Court Dismisses CMC-OHS's Bankruptcy Case
SAINT VINCENTS: Court Approves Benloss Settlement Agreement
SAINT VINCENTS: Lender Extends Cash Collateral Access to April 30
SEMINOLE HARD ROCK: Moody's Assigns B1 Corporate Family Rating
SEMINOLE TRIBE: Moody's Puts Ba1 Rating on New $700 Mil. Term Loan
SOUTHAVEN POWER: Court Further Extends Plan-Filing Date to Apr. 16
VISTEON CORP: Appoints William Quigley as Chief Financial Officer
UMBRELLA ACQUISITION: Moody's Rates Proposed $8.2 Bil. Loan at Ba3
UNIVISION COMMS: Moody's Holds B1 Corporate Family Rating
USEC INC: Ohio American Centrifuge Project to Cost $2.3 Billion
WALCO OIL: Selling Convenience Store and Gas Station on Feb. 21
WINDSTREAM CORP: Moody's Rates Proposed $500 Million Notes at Ba3
WINDSTREAM CORPORATION: Prices New $500 Million Senior Notes
ZAIS INVESTMENT: Moody's Junks Ratings on $10 Million Debentures
* Huron Consulting Promotes 12 Professionals to Managing Directors
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
ACE SECURITIES: Moody's Puts Two Certificate Ratings on Review
--------------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade two classes of certificates from one of the Ace
Securities Corp Home Equity Loan Trust deals from 2005.
The notes are backed by fixed rate, second lien collateral
primarily originated by Ameriquest & Fremont. The pool is being
serviced by Wells Fargo.
The pool has taken significant losses in recent months and has not
built overcollateralization to its target. The current level of
overcollateralization is $4,623,228 compared to a target of
$14,980,000.
Moody's will analyze the credit quality of the pool to determine
the likelihood and severity of future losses.
These are the rating actions:
* ACE Securities Corp. Home Equity Loan Trust, Series 2005-SL1
* Review for Possible Downgrade:
-- Class B-1, current rating Ba1
-- Class B-2, current rating Ba2
ADELPHIA COMMS: Time Warner Cable Becomes Public; To Trade at NYSE
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Time Warner Inc. and Time Warner Cable Inc. said Tuesday that Time
Warner Cable has become a public company as a result of Adelphia
Communications Corporation's Chapter 11 plan having become
effective.
Time Warner Cable expects its Class A common stock to be listed on
the New York Stock Exchange, under the "TWC" symbol, and start
trading as early as March 1, 2007.
Adelphia received shares of Time Warner Cable Class A common stock
on July 31, 2006 as part of the payment for systems bought from
Adelphia. These shares will be distributed by Adelphia to its
stakeholders in accordance with its Chapter 11 plan, starting
within the next few days.
Time Warner Cable became public without the traditional
underwritten offering that was one alternative under the
agreements with Adelphia. As a result, Time Warner Cable has
withdrawn the registration statement on Form S-1 it had filed with
the Securities and Exchange Commission.
Dick Parsons, Chairman and CEO of Time Warner, said: "We are very
pleased that Time Warner Cable has become a public company and are
excited about its stock soon being listed on the New York Stock
Exchange. We believe Time Warner Cable is positioned to compete
successfully in the fast-growing cable sector and to increase
value for the shareholders of Time Warner and Time Warner Cable."
Glenn Britt, President and CEO of Time Warner Cable, said:
"Becoming a public company is the latest step in creating a Time
Warner Cable with greater scale, improved subscriber clusters,
stronger growth opportunities and enhanced strategic flexibility.
Our aggressive integration efforts of the newly acquired systems
are ongoing, and we're making progress toward preparing these
systems to offer Time Warner Cable's advanced services."
How Time Warner Cable Became a Public Company
On July 31, 2006, Time Warner Cable completed the acquisition of
assets from Adelphia. Approximately 156 million shares of Time
Warner Cable Class A common stock - approximately 16% of Time
Warner Cable's total outstanding common shares - were included in
the consideration paid for the assets.
Under Adelphia's Chapter 11 plan, most of the Time Warner Cable
stock Adelphia received will be distributed to Adelphia
stakeholders. This will end Adelphia's obligation to sell a
portion of the shares in an underwritten public offering.
Although the distribution may take some time to be completed,
Adelphia and Time Warner Cable expect approximately 75% of the
shares to be distributed within the next week. The remaining
shares are expected to be distributed over the coming months as
remaining disputes are resolved by the bankruptcy court, including
the 4% of the shares being held in escrow in connection with Time
Warner Cable's acquisition of assets from Adelphia.
Under applicable securities regulations and provisions of the U.S.
bankruptcy code, Time Warner Cable is now a public company subject
to the requirements of the Securities Exchange Act of 1934.
Pursuant to applicable provisions of the Bankruptcy Code, the
distribution by Adelphia of Time Warner Cable Class A common stock
to Adelphia stakeholders is exempt from the registration
requirements of the Securities Act of 1933, and upon receipt these
shares are freely tradable without restriction or further
registration.
Adelphia's Plan
As reported in the Troubled Company Reporter on Jan. 9, 2007, the
Honorable Robert E. Gerber of the U.S. Bankruptcy Court for the
Southern District of New York entered an order confirming the
first modified fifth amended joint Chapter 11 plan of
reorganization of Adelphia and Certain Affiliated Debtors.
As reported in Tuesday's Troubled Company Reporter, that Plan
became effective on Feb. 13, 2007.
The Distribution Record Date for distributions under the Plan to
holders of Notes Claims and Equity Interests was set last Feb. 13,
2007 at 4:00 p.m. (Eastern Standard Time). Jan. 10, 2007 at 4:00
p.m. (Eastern Standard Time) remains the Distribution Record Date
for holders of all Claims other than Notes Claims and Equity
Interests.
A full-text copy of the chart of the distribution of certain
classes of claims is available for free at:
http://ResearchArchives.com/t/s?19d0
A full-text copy of the chart of the distribution of certain
classes of equity interest is available for free at:
http://ResearchArchives.com/t/s?19d1
Time Warner Inc.
Time Warner (NYSE:TWX) is a leading media and entertainment
company whose businesses include interactive services, cable
systems, filmed entertainment, television networks and publishing.
Time Warner Cable Inc.
Time Warner Cable owns and manages cable systems passing
approximately 26 million homes in 33 states. The company has
14.6 million customers for its various products, including video,
high-speed data and residential telephone. This includes
approximately 13.4 million basic video subscribers and more than 6
million customers who purchase more than one product. Time Warner
Cable includes some of the most technologically advanced and best-
clustered cable systems in the country, with nearly 85 percent of
the Company's customers located in five geographic regions: New
York, Texas, Ohio, the Carolinas and southern California. It is
the largest cable provider in the nation's two largest cities, Los
Angeles and New York. Leveraging its leadership in innovation and
quality customer care, Time Warner Cable delivers advanced
products and services such as video-on-demand, high-definition
television, digital video recorders, high-speed data and Digital
Phone.
About Adelphia Communications
Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television
company. Adelphia serves customers in 30 states and Puerto Rico,
and offers analog and digital video services, Internet access and
other advanced services over its broadband networks. The Company
and its more than 200 affiliates filed for Chapter 11 protection
in the Southern District of New York on June 25, 2002. Those
cases are jointly administered under case number 02-41729.
Willkie Farr & Gallagher represents the Debtors in their
restructuring efforts. PricewaterhouseCoopers serves as the
Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman,
LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the
Official Committee of Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the
Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC. The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through
06-10642). Their cases are jointly administered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.
ADVANCED MARKETING: Panel Objects to Capstone Retention as Advisor
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The Official Committee of Unsecured Creditors in Advanced
Marketing Services Inc. and its debtor-affiliates' Chapter 11
cases and Kelly Beaudin Stapleton, the U.S. Trustee for Region 3,
object to the Debtors' request to retain Capstone Advisory Group
LLC as their financial advisors.
"The Debtors have not demonstrated the need to retain Capstone as
an investment banker," Thomas F. Driscoll III, Esq., at Morris,
Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, tells the
United States Court for the District of Delaware.
Representing the Committee, Mr. Driscoll contends that Capstone's
services may be duplicative of those performed by the Debtors'
other professionals.
Rather than deplete the Debtors' limited resources by engaging
Capstone to assist Houlihan, Lokey, Howard & Zukin Capital, Inc.,
in its efforts to market and refinance the Debtors, the Committee
argues that the Debtors, with the help of their other
professionals, could adequately perform those services.
Also, Capstone is not an investment banker but a financial
advisor and should not be entitled to any Success Fees, Mr.
Driscoll tells Judge Christopher S. Sontchi. The Committee
believes that Capstone should be compensated for actual work done
and actual value provided; Capstone should not receive a windfall
at the expense of the unsecured creditor body.
"The Court must condition Capstone's retention upon a review of
Capstone's fees and expenses pursuant to Section 330 of the
Bankruptcy Code so that the Court, the Committee, the Office of
the United States Trustee and other parties-in-interest may
submit any appropriate objections to such fees and expenses," Mr.
Driscoll explains.
Capstone "should provide hourly rates for its professionals," Ms.
Stapleton tells the Court.
Certain terms and provisions of the Indemnification Provisions
contained in The Capstone Agreements and the Application are
likewise overly broad and must be revised, Mr. Driscoll points
out.
As reported in the Troubled Company Reporter on Feb. 7, 2007, the
Debtors sought to employ Capstone to:
(a) analyze and challenge the Debtors' short-term and long-
term cash flow forecasts;
(b) assist management, as appropriate, in developing
corresponding liquidity analysis;
(c) analyze the Debtors' business plan and any alternative
business plans suggested by the Debtors;
(d) assist the Debtors and their advisors in identifying and
evaluating strategic financial and restructuring
alternatives;
(e) support or assist investment banks of the Debtors in their
efforts to sell or restructure the business entity;
(f) act as a liaison between the Debtors and their investment
bankers;
(g) assist in providing data and information requested by
Houlihan, Lokey, Howard & Zukin Capital, Inc., in its
efforts to market and refinance the Debtors;
(h) assist Houlihan Lokey in its efforts to market or
refinance the Debtors;
(i) assist Houlihan, Lokey in identifying and executing an
alternative transaction that best meets the objectives of
the Debtors' and their estates; and
(j) perform other tasks as may be requested by the Debtors
from time to time.
Capstone has provided services to the Debtors since May 2006. At
that time, Capstone was hired, through the Debtors' counsel,
O'Melveny & Myers, LLP, to review the Debtors' short-term and
long-term financial forecasts, and assist the Debtors in
identifying and evaluating restructuring alternatives.
The Debtors will pay Capstone hourly rates on actual hours worked
at Capstone's standard hourly rates in effect when the services
are rendered. Capstone's hourly rates are:
Designation Hourly Rate
----------- -----------
Executive Directors $505 - $595
Staff $275 - $475
Support $90 - $200
The Capstone employees that are expected to be directly
responsible for the engagement and their hourly rates are:
* Mark Rohman, Capstone Executive Director -- $595
* Monique Atkins -- $450
Representing the Debtors, Mark D. Collins, Esq., at Richards,
Layton & Finger, PA, in Wilmington, Delaware, noted that there
will be a fee awarded to Capstone upon the completion of a
successful sale or refinancing of the Debtors, equal to 30% of any
transaction fee or financing fee paid by the Debtors to Houlihan
Lokey.
In addition, Mr. Collins stated that Capstone will be reimbursed
for all reasonably incurred out-of-pocket expenses in connection
with the rendering of services. These include travel, lodging,
costs of reproduction, reasonable out-of-pocket counsel fees and
other direct expenses.
The Debtors will also indemnify Capstone for its services.
Mr. Rohman assured the Court that Capstone and its partners and
associates do not have any connection with or any adverse
interest to the Debtors, their creditors, or any other parties-
in-interest.
Based in San Diego, California, Advanced Marketing Services, Inc.
-- http://www.advmkt.com/-- provides customized merchandising,
wholesaling, distribution and publishing services, currently
primarily to the book industry. The company has operations in the
U.S., Mexico, the United Kingdom and Australia and employs
approximately 1,200 people Worldwide.
The company and its two affiliates, Publishers Group Incorporated
and Publishers Group West Incorporated filed for chapter 11
protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480
through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron,
Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP,
represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark
D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton
& Finger, P.A., represent the Debtors as Local Counsel. When the
Debtors filed for protection from their creditors, they listed
estimated assets and debts of more than $100 million. The
Debtors' exclusive period to file a chapter 11 plan expires on
Apr. 28, 2007. (Advanced Marketing Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
ADVANCED MARKETING: Hires Focus Management as Financial Advisor
---------------------------------------------------------------
Advanced Marketing Services Inc. and its debtor-affiliates
obtained authority from the U.S. Bankruptcy Court for the District
of Delaware to employ Focus Management Group U.S.A. Inc. to
provide them with financial reporting, consulting and
advisory services in their Chapter 11 cases.
As reported in the Troubled Company Reporter on Feb. 8, 2007, Mark
D. Collins, Esq., at Richards, Layton & Finger, PA, at
Wilmington, Delaware, told the Court that Focus has substantial
experience in both the financial analysis area and certain
insolvency services, having served in Chapter 11 cases on behalf
of debtors and creditors.
Specifically, Focus is expected to:
(a) prepare and, from time to time, update cash flow
forecasts, other projections and other financial data for
the Debtors;
(b) assemble and prepare information for the Debtors' DIP
lenders;
(c) assist the Debtors in monitoring compliance with operating
cash flow requirements as per the loan agreement with the
Debtors' DIP lenders;
(d) assist the Debtors in the preparation of reports to the
United States Trustee;
(e) assist the Debtors in complying with guidelines
established by the U.S. Trustee;
(f) assist the Debtors in connection with other financial
operations and related tasks;
(g) periodically communicate with and participate in meetings
with the Debtors' management and other parties-in-interest
regarding the Debtors' financial condition; and
(h) perform other functions as requested by the Debtors, their
legal counsel, and their financial advisors.
Mr. Collins added that Focus' retention centers around its
familiarity from prepetition work with certain aspects of the
Debtors' books, records and financial reporting needs.
Focus will be working on a number of projects either in
conjunction with the Capstone Advisory Group, LLC, or under the
supervision of Capstone.
Firm's Compensation
Prior to the Dec. 29, 2006, the Debtors paid Focus $1,044,850 for
fees and expenses for prepetition services rendered by Focus to
the Debtors, as well as to serve as retainer, of which $775,452
was received during the 90 days prior to the Petition Date.
After deducting fees and expenses previously billed -- and paid
-- and estimated unbilled prepetition amounts for prepetition
services rendered, $346,626 remains as a retainer. The balance
will be available to be applied to postpetition services and any
prepetition fees and expenses incurred but unprocessed, prior to
the Petition Date.
The Debtors will pay Focus its hourly fees and reasonable
expenses. Focus' discounted hourly rate schedule for the Debtors
is:
Designation Hourly Rate
----------- -----------
Managing Directors $375
Senior Consultants $350
The Debtors and Focus also agreed to certain indemnification
provisions.
Robert O. Riiska, a managing director at Focus, assured the Court
that Focus' partners and associates do not have any connection
with or any interest adverse to the Debtors, their creditors, or
any other party-in-interest, or their attorneys.
About Advanced Marketing
Based in San Diego, California, Advanced Marketing Services, Inc.
-- http://www.advmkt.com/-- provides customized merchandising,
wholesaling, distribution and publishing services, currently
primarily to the book industry. The company has operations in the
U.S., Mexico, the United Kingdom and Australia and employs
approximately 1,200 people Worldwide.
The company and its two affiliates, Publishers Group Incorporated
and Publishers Group West Incorporated filed for chapter 11
protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480
through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron,
Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP,
represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark
D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton
& Finger, P.A., represent the Debtors as Local Counsel. When the
Debtors filed for protection from their creditors, they listed
estimated assets and debts of more than $100 million. The
Debtors' exclusive period to file a chapter 11 plan expires on
Apr. 28, 2007. (Advanced Marketing Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
AEGIS ASSET: S&P Cuts Rating on Series 2003-2 Class B Certs. to BB
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of mortgage-backed securities issued by two Aegis Asset
Backed Securities Trust transactions.
One of these ratings was also placed on CreditWatch with negative
implications, one remains on CreditWatch negative, and one was
removed from CreditWatch negative. Concurrently, the ratings on
two classes from two other series were placed on CreditWatch
negative. In addition, 13 other ratings from these four series
were affirmed.
The downgrades and CreditWatch placements reflect recent monthly
losses that have outpaced monthly excess spread, along with the
current level of delinquencies, which implies that this trend
could continue. In addition, the overcollateralization (O/C)
target has begun to step down, which has allowed O/C levels to
remain close to their targets despite negative performance. Once
the O/C target has reached its floor, Standard & Poor's expects
that these transactions will continue to incur losses and that the
O/C levels will fall below their targets.
Standard & Poor's will closely monitor the performance of the
classes with ratings on CreditWatch. If monthly losses decline to
a point at which they no longer outpace monthly excess interest,
and the level of O/C has not been further eroded, S&P will affirm
these ratings and remove them from CreditWatch.
Conversely, if losses continue to outpace excess interest, and the
levels of O/C continue to decline, S&P will take further negative
rating actions on these classes.
The rating on class B-1 from series 2003-1 was removed from
CreditWatch negative because it was lowered to 'CCC'. According
to Standard & Poor's surveillance practices, classes of
certificates or notes from RMBS transactions with ratings lower
than 'B-' are no longer eligible to be on CreditWatch.
The rating affirmations are based on credit support percentages
that are sufficient to maintain the current ratings on the
certificates.
Cumulative losses in these transactions range from 1.90%
to 2.75% of the original pool balances. Ninety-plus-day
delinquencies range from 20.35% to 27.82% of the current pool
balances.
Credit enhancement for these transactions is provided through a
combination of O/C, excess interest, and subordination of the
junior classes.
The underlying collateral for these certificates consists
primarily of conventional, first- or second-lien, adjustable- or
fixed-rate, fully amortizing and balloon residential mortgage
loans. The mortgage loans were originated in accordance with
underwriting guidelines that target nonconforming loans or
subprime mortgage loans.
Rating Lowered And Placed
On Creditwatch Negative
Aegis Asset Backed Securities Trust
Rating
------
Series Class To From
------ ----- -- ----
2003-2 B BB/Watch Neg BBB
Rating Lowered And Remaining
On Creditwatch Negative
Aegis Asset Backed Securities Trust
Rating
------
Series Class To From
------ ----- -- ----
2003-1 M-2 BBB/Watch Neg A/Watch Neg
Rating Lowered And Removed
From Creditwatch Negative
Aegis Asset Backed Securities Trust
Rating
------
Series Class To From
------ ----- -- ----
2003-1 B-1 CCC B/Watch Neg
Ratings Placed On Creditwatch Negative
Aegis Asset Backed Securities Trust
Rating
------
Series Class To From
------ ----- -- ----
2003-3 B BBB/Watch Neg BBB
2004-1 B-3 BBB-/Watch Neg BBB-
Ratings Affirmed
Aegis Asset Backed Securities Trust
Series Class Rating
------ ----- ------
2003-1 A-1 AAA
2003-1 M-1 AA
2003-2 M-1 AA
2003-2 M-2 A
2003-3 M-1 AA
2003-3 M-2 A
2003-3 M-3 A-
2004-1 A AAA
2004-1 M-1 AA
2004-1 M-2 A
2004-1 M-3 A-
2004-1 B-1 BBB+
2004-1 B-2 BBB
AIR AMERICA: Selling Substantially All Assets for $4.25 Mil. Today
------------------------------------------------------------------
Air America Radio has obtained authority from the U.S. Bankruptcy
Court for the Southern District of New York to sell substantially
all of its assets to Air America Media LLC for $4.25 million,
subject to higher and better offers at an auction set today.
The Court will convene a hearing at 10:00 a.m. on Oct. 16, 2007,
to further consider approval of the sale.
Air America Media is controlled by SLG Media LLC, an entity owned
by Stephen L. Green in his individual capacity. Stephen L. Green
is the chairman and founder of the SL Green Realty Corporation, a
real estate investment trust.
Air America Media's proposed purchase offer is comprised of:
a) an amount equal to the sum of the outstanding principal
amount of the debtor-in-possession financing provided by
Democracy Allies LLC;
b) $500,000 cash; and
c) an amount representing the designated cure obligations not
to exceed $500,000 in the aggregate.
Air America Media will assume no liabilities of the Debtor, except
payment of up to $500,000 to cure assigned leases and designated
contracts which are comprised primarily of the Debtor's lease on
its corporate headquarters in New York, and certain other
contracts.
DIP Financing
The Debtor previously obtained Court authority to borrow up to
$2.6 million from Democracy Allies, pursuant to a debtor-in-
possession loan agreement dated Oct. 12, 2006.
The DIP Financing Agreement primarily entails closing of the sale
of the Debtor's business.
By order dated Feb. 1, 2007, the Court authorized the Debtor to
borrow up to an additional $650,000 from Democracy Allies,
increasing the total authorized postpetition lending facility to
$3.25 million.
Air America Media has advanced $250,000 in new money to Democracy
Allies to assist it in making additional loan advances to the
Debtor.
Democracy Allies owns a minority interest in Air America Media.
Competing Bids
To qualify in the auction, competing bids must not be less than
$4.6 million and must be accompanied by an earnest money deposit
of 10% of the competing offer.
Any further bids will be in increments of at least $50,000 greater
than the preceding bid.
Air America Media, the stalking horse bidder, is entitled to a
break-up free of the greater of:
-- $150,000; or
-- 3.5% of the purchase price; plus
-- reimbursement of expenses up to an additional $150,000.
About Air America
Air America Radio, aka Piquant LLC -- http://www.airamerica.com/
-- is a full-service radio network and program syndication service
in the United States. The network features discussion and
information programs reflecting a liberal, left wing, or
progressive point of view. Air America filed a voluntary Chapter
11 petition on Oct. 13, 2006 (Bankr. S.D.N.Y. Case No: 06-12423)
Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents
the Debtor. No Official Committee of Unsecured Creditors has been
appointed in this case. When the Debtor filed for bankruptcy, it
disclosed total assets of approximately $4.3 million and total
debts of over $20 million.
AIRBASE SERVICES: Court Confirms Chapter 11 Plan of Reorganization
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
confirmed the Plan of Reorganization filed by Airbase Services
Inc.'s Chapter 11 Trustee, Dennis Faulkner, on Nov. 16, 2006.
The Debtor no longer has any officers or employees and has sold
substantially all of its assets to 4316924 Canada Inc. and Regent
Aerospace Corporation. Mr. Faulkner has been given authority to
manage all of the affairs of the Debtor. Following confirmation
of the Plan, he will be appointed as Plan Administrator.
From the proceeds of the sale of the Debtor's assets, the Chapter
11 Trustee has reserved a total of $1,505,000 for:
-- up to $130,000 for the claims of taxing authorities;
-- $25,000 related to claims of secured creditors holding an
interest in titled vehicles;
-- $350,000 related to that portion of the Airbase Canada
stock not pledged to Harris;
-- $100,000 representing the General Unsecured Claim Carve-
Out; and
-- $900,000 with respect to the carve-out for the payment of
certain administrative expenses.
Pursuant to the records of the Debtor, Mr. Faulkner has identified
approximately 500 creditors. The Debtor's records show secured
debt of $16,735,506, priority debt of $18,971 plus material
unknown priority debt, and unsecured debt of $11,557,406.
Treatment of Claims
Administrative Expense and Priority Tax Claims will be paid in
full on the effective date of the Plan or upon the Court's
approval.
Harris N.A. fka Harris Trust and Savings Bank N.A. are parties to
a January 2000 credit agreement. When the Debtor filed for
bankruptcy, it owed Harris approximately $15,089,996, plus
interest, costs and expenses. The loan is secured by
substantially all of the Debtor's assets. Harris has received
$9,523,026 as paydown for the secured portion of its claim. The
total deficiency claim of Harris, treated as an unsecured claim,
is currently unknown. Harris' claim will be paid on the effective
date unless the Court allows an earlier payment.
The claims of other secured creditors will be paid on the latter
of the effective date or the date upon which all secured claims
are resolved with respect to this class or classes with a higher
or conflicting priority of payment.
General unsecured creditors will get a Pro Rata Share of the
residual assets of the Debtor after the payment of all other
creditors. The Chapter 11 Trustee anticipates distributing to
unsecured creditors $100,000 from the asset sale carve-out plus
35% or approximately $350,000 from the sale of the Airbase Canada
stock.
Equity interest holders get nothing under the Plan. All equity
interest will be cancelled on the effective date and new equity
will be deemed held by the Plan Administrator.
Headquartered in Grand Prairie, Texas, Airbase Services, Inc. --
http://www.airbaseservices.com/-- maintained and repaired a wide
range of cargo equipment and cabin interior designs for commercial
airlines, and provided maintenance and management services for the
airline industry. Due to bankruptcies filed by several of its
airline customers, the Company eventually filed for bankruptcy
protection on May 1, 2006 (Bankr. N.D. Tex. Case. No. 06-41231).
The Court approved the appointment of Dennis Faulkner as Chapter
11 Trustee in the Debtor's chapter 11 case on May 3, 2006. Mark
J. Petrocchi, Esq., at Goodrich Postnikoff Albertson & Petrocchi,
LLP, represents the Trustee. No Official Committee of Unsecured
Creditors has been appointed in the Debtor's case. In its
schedules of assets and liabilities, the Debtor listed $12,628,078
in total assets and $28,311,883 in total liabilities.
AMERICAN REAL: Purchase Offer Opposed by Lear Corp. Shareholder
---------------------------------------------------------------
If the current proposal by Carl Icahn's American Real Estate
Partners L.P. to purchase Lear Corp. for $36 per share is put to a
shareholder vote, Evercore Asset Management LLC intends to vote
against the transaction.
Two Key Objections
First, EAM believes the current offer price does not fairly
reflect the value of Lear, as Lear management has taken a
series of actions in recent months designed to generate
increased value for shareholders. These include the:
* Refinancing of the company's long-term debt;
* Divestiture of the company's European interiors business;
* Planned joint venture for the U.S. interiors business; and
* Ongoing restructuring of the core seating business.
EAM believes Lear's management should be commended for these
actions, as well as others being contemplated, and believes that
over time they have the potential to restore to Lear sustainable
earnings in excess of $4 per share.
"This is a level of earnings that is less than what Lear earned
only two years ago and, indeed, less than what it has earned
throughout most of this decade," Greg Sawers, Chief Executive
Officer of EAM, said. "Against that type of earnings power, a
price of $36 per share is simply unreasonable and we therefore
strongly oppose the proposed transaction with Mr. Icahn."
Second, EAM recommends that to the extent Lear wants to put itself
up for sale, it should do so through a simple, open and
conventional auction process. EAM believes Lear has effectively
handicapped the process in favor of Mr. Icahn, as the "go shop"
clause of the current agreement permits Lear and American Real
Estate Partners to commence deal closing preparations immediately,
before the existence of any other bids can even be determined.
Moreover, the clause expires in 45 days, creating a significant
time hurdle for other parties to adequately assess their interest.
Contrast this with the fact that Mr. Icahn had already been
working with Lear management for several months before making his
bid. An added impediment to the emergence of a competitive bid is
the fact that Lear's agreement includes a break-up fee of up to
$85 million in addition to up to $15 million in expense
reimbursements.
While EAM is a relatively small shareholder of Lear, it takes
seriously its fiduciary obligations to its clients. In that
spirit, it cannot support the proposed transaction.
As reported in the Troubled Company Reporter on Feb. 12, 2007,
Lear and American Real Estate Partners entered into an agreement
for Lear to be acquired by AREP, in a transaction valued at
approximately $5.3 billion, including the assumption of debt.
Under the terms of the agreement, Lear shareholders would receive
$36.00 per share in cash. Closing is expected to occur by the end
of the second quarter of 2007.
Under the terms of the agreement, Lear may solicit alternative
proposals from third parties for a period of 45 days from the
execution of the agreement and intends to consider any such
proposals with the assistance of its independent advisors. In
addition, Lear may, at any time, subject to the terms of the
merger agreement, respond to unsolicited proposals. If Lear
accepts a superior proposal, a break-up fee would be payable to
AREP.
"Following a very thorough review of the proposed transaction, our
Board unanimously concluded that the AREP offer was in the best
interests of Lear's shareholders," Bob Rossiter, Lear's chairman
and chief executive officer, commented. "We believe that the
transaction price, which represents a multiple of about 9x our
forecasted 2007 core operating earnings -- excluding the Interior
business, provides shareholders with significant value.
Furthermore, we intend to solicit other offers to ensure that
value is maximized for all of our shareholders."
"Lear is an excellent company with a strong management team in
place," said Carl Icahn. "We look forward to working with Lear's
team to improve its long-term competitiveness, capitalize on
growth opportunities globally and to build an even stronger and
more valuable company in the future."
In connection with the transaction, J.P. Morgan Securities Inc.
served as a financial advisor and Winston & Strawn, LLP served as
legal counsel to a Special Committee of Lear's Board of Directors.
Bank of America provided American Real Estate Partners, L.P. with
debt financing commitments for this transaction.
The agreement is subject to the affirmative vote of the holders of
a majority of the outstanding shares of Lear common stock,
regulatory filings and approvals and other customary closing
conditions. Upon the closing of the transaction, shares of Lear
common stock will no longer be listed on the New York Stock
Exchange or publicly-traded.
About Evercore Asset Management
Evercore Asset Management, LLC, is an institutional investment
management firm that makes high conviction value investments in
small- and mid-cap companies. EAM was established in late 2005
when four longtime colleagues and value investors, with working
relationships that span two decades, formed an alliance with
Evercore Partners -- a leading financial services boutique -- to
create a value-based asset management organization.
About Lear Corp.
Headquartered in Southfield, Michigan, Lear Corporation (NYSE:
LEA) -- http://www.lear.com/-- supplies automotive interior
systems and components. Lear provides complete seat systems,
electronic products, electrical distribution systems, and other
interior products. The company has 104,000 employees at 275
locations in 33 countries.
About American Real Estate
Headquartered in New York City, American Real Estate Partners, LP
(NYSE:ACP) -- http://www.arep.com/-- a master limited
partnership, is a diversified holding company engaged in a variety
of businesses. The company's businesses currently include gaming,
oil and gas exploration and production, real estate and home
fashion. The company is in the process of divesting its Oil and
Gas operating unit and their Atlantic City gaming property.
The company owns a 99% limited partnership interest in American
Real Estate Holdings Limited Partnership. Substantially all of
the assets and liabilities are owned by AREH and substantially all
of the company's operations are conducted through AREH and its
subsidiaries. American Property Investors, Inc., or API, owns a
1% general partnership interest in both the company and AREH,
representing an aggregate 1.99% general partnership interest in
the company and AREH. API is owned and controlled by Mr. Carl C.
Icahn.
* * *
As reported in the Troubled Company Reporter on Jan. 15, 2007,
Standard & Poor's Rating Services affirmed its 'BB+' long-term
counterparty credit rating on American Real Estate Partners L.P.
The outlook is stable.
AMERIGAS PARTNERS: Earns $55.6 Million in Quarter Ended Dec. 31
---------------------------------------------------------------
AmeriGas Partners L.P. reported net income of $55.6 million on
revenues of $616.6 million for the first fiscal quarter ended
Dec. 31, 2006, compared with net income of $55 million on
$630.2 million of revenues for the same period in 2005.
For the quarter ended Dec. 31, 2006, retail volumes sold declined
3% to 282.9 million gallons from 291.9 million gallons sold in the
prior-year period. Weather was 8.6% warmer than normal during the
recent quarter compared to weather that was 4.1% warmer than
normal in the prior-year period, according to the National Oceanic
and Atmospheric Administration.
Eugene V. N. Bissell, chief executive officer of AmeriGas, said,
"Once again we experienced significantly warmer weather in the
first quarter of our fiscal year. However, we are pleased that we
were able to offset the effects of lower sales volumes through
improved margins and higher fee revenues to cover increased
operating expenses."
Operating and administrative expenses increased as a result of
higher employee compensation and benefits expenses and repair and
maintenance expenses.
At Dec. 31, 2006, the company's balance sheet showed $1.6 billion
in total assets, $1.4 billion in total liabilities, $10.5 million
in minority interests, and $242.9 million in partners' capital.
Full-text copies of the company's consolidated financial
statements for the quarter ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?19d4
About AmeriGas Partners
AmeriGas Partners L.P. (NYSE: APU) -- http://www.amerigas.com/--
is a retail propane marketer, serving nearly 1.3 million customers
from over 600 locations in 46 states. UGI Corporation (NYSE: UGI)
through its subsidiaries owns 44% of the Partnership and
individual unitholders own the remaining 56%.
* * *
As reported in the Troubled Company Reporter on Oct. 18, 2006,
Moody's Investors Service affirmed AmeriGas Partners L.P.'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.
ANDREW CORP: Posts $2.5 Million Net Loss in Quarter Ended Dec. 31
-----------------------------------------------------------------
Andrew Corp. reported a $2.5 million net loss on $522 million of
sales for the first quarter of fiscal 2007 ended Dec. 31, 2006,
compared with $14.8 million of net income for the same period in
fiscal 2006. The net loss in the current quarter was due to a
higher recorded income tax expense of $14.7 million for the
current quarter compared with $3.7 million in the same period last
year. This was due to the concentration during the quarter of
losses in the United States and Italy, for which the company
recorded no current tax benefit. The prior year first quarter,
however, included a $1.9 million tax benefit related to
repatriation of foreign earnings.
"Andrew achieved improved results in sales and gross margins
despite the very challenging spending environment among original
equipment manufacturers and North American operators, driven
primarily by consolidation," said Ralph Faison, the company's
president and chief executive officer. "Even with our revenue
pressured by external factors, we generated a year over year
increase in gross margin, and believe this demonstrates that our
focus on operational improvement is starting to materialize.
"Andrew remains confident that the long-term demand for our
wireless infrastructure products and solutions is robust despite
short-term disruptions that are negatively impacting our industry.
We anticipate a return to normal spending patterns by our
customers as we approach the second half of our fiscal year. With
our globally diversified customer base and portfolio of complete
radio frequency products and solutions, we believe Andrew will
benefit from growth in the wireless industry," Mr. Faison added.
Wireless Infrastructure sales increased 3% to $499 million versus
the prior year first quarter due to strong demand for antenna and
cable products and the implementation of price increases on
cable products which were partially offset by weaker sales of
active products, primarily to original equipment manufacturers
customers. Total orders of $491 million increased 2% from the
prior year first quarter due mainly to a 3% increase in Wireless
Infrastructure orders.
Gross margin was 23.3%, compared with 22.7% in the prior year
first quarter. Gross margin increased due mainly to the solid
performance by antenna and cable products and price increases on
cable products, which were partially offset by a significant
decline in sales of base station components to certain original
equipment manufacturers affected by consolidation.
Operating income for the quarter was $15.9 million, or 3.1% of
sales, compared to $21.3 million, or 4.1% of sales in the prior
year first quarter. The decrease in operating income was mainly
due to the $7 million operating loss in the company's Satellite
Communications segment due mainly to decreased sales and
incremental research and development costs associated with the
acquisition of Skyware Radio Systems in February 2006. This
compares to the $14 million operating income in this segment in
the prior period quarter.
Other expenses increased to $3.8 million in the first quarter,
compared to $2.7 million in the prior year first quarter, due
primarily to foreign exchange losses.
At Dec. 31, 2006, the company's balance sheet showed $2.4 billion
in total assets, $907.6 million in total liabilities, and
$1.5 billion in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?19d6
Acquisition of EMS Wireless
On Dec. 1, 2006, the company acquired EMS Wireless, a division of
EMS Technologies Inc., a major designer and manufacturer of base
station antennas based in Norcross, Georgia for approximately $50
million in cash. A preliminary allocation of the purchase price
resulted in $32 million of goodwill. The company has not
completed its purchase price allocation and has not yet assigned
any of the purchase price to intangible assets, nor has the
company finalized the valuation of assets acquired and liabilities
assumed. The company anticipates completing its purchase price
allocation by the end of fiscal 2007. This acquisition did not
have a material impact on the financial statements.
Net Cash Flows
Cash used in operations was $26.5 million in the first quarter,
compared to cash used in operations of $1.8 million in the prior
year first quarter. Cash used in operations increased compared to
the prior year first quarter due to the net loss and increased
working capital requirements.
Capital expenditures increased to $200 million in the first
quarter compared to $12.3 million in the prior year quarter
primarily due to construction costs for the new cable
manufacturing facilities in Goa, India, which opened during the
quarter, and in Joliet, Illinois, which is scheduled
for completion in the company's fiscal 2007 third quarter.
Cash and cash equivalents were $100 million at Dec. 31, 2006,
compared to $170 million at Sept. 30, 2006. Cash and cash
equivalents decreased from the prior quarter due mainly to
the increase in cash used in operations, the EMS Wireless
acquisition and the repurchase of 1 million shares of common
stock.
Total debt outstanding was $386 million at Dec. 31, 2006,
compared to $346 million at Sept. 30, 2006.
About Andrew Corp.
Headquartered in Westchester, Illinois, Andrew Corp.
(NASDAQ: ANDW) -- http://www.andrew.com/--designs, manufactures
and delivers equipment and solutions for the global
communications infrastructure market. The company serves
operators and original equipment manufacturers from facilities
in 35 countries. Andrew Corporation is an S&P MidCap 400 company
founded in 1937.
* * *
As reported the Trouble Company Reporter on Dec. 28, 2006,
Standard & Poor's Ratings Services revised its CreditWatch
implications on Andrew Corp. to positive from negative. The 'BB'
corporate credit and 'B+' subordinated debt ratings were placed
on CreditWatch with negative implications on Aug. 10, 2006.
AOT BEDDING: S&P Puts BB- Rating on Proposed $450 Mil. Facilities
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Hofmann Estates, Illinois-based AOT Bedding Holdings Corp. to
negative from stable.
All ratings on the company, including the 'B+' corporate credit
rating, were affirmed.
At the same time, Standard & Poor's assigned its 'BB-' bank loan
rating and its '1' recovery rating to the company's proposed
$450 million of first-lien senior secured credit facilities. In
addition, Standard & Poor's assigned its 'B' bank loan rating and
its '3' recovery rating to the company's proposed $210 million
second-lien senior secured credit facility.
"The outlook revision is due to AOT Bedding's more aggressive
financial policy and high debt leverage, as the company is issuing
additional debt to finance the redemption of preferred stock from
its shareholders," said Standard & Poor's credit analyst Rick Joy.
"Our expectation was that lease-adjusted debt to EBITDA would be
reduced to the 5x range by the end of fiscal 2006. Pro forma for
the refinancing, we estimate adjusted leverage will increase to
the 6.5x-7.0x range."
AOT, through its wholly-owned operating subsidiary National
Bedding Co. LLC, markets and manufactures bedding products and
mattresses in the U.S.
ARMOR HOLDINGS: Earns $2.3 Billion in Fiscal Year Ended Dec. 31
---------------------------------------------------------------
Armor Holdings Inc.'s revenue for the fourth quarter and fiscal
year ended Dec. 31, 2006, increased 77%, to $801 million, from
$453 million in the 2005 fourth quarter. Net income for the
fourth quarter was $38 million versus $38 million in 2005.
Earnings before interest, taxes, depreciation and amortization for
the fourth quarter increased by 23% to $82 million versus
$67 million in the 2005 quarter.
For the fiscal year ended Dec. 31, 2006, the company reported
revenue of $2.3 billion, an increase of 44%, compared to
$1.6 billion in 2005. Net income for 2006, was $135 million
versus $133 million, for 2005. EBITDA for the fiscal year ended
Dec. 31, 2006, increased by 19% to $280 million versus
$236 million in 2005 comparable period.
As of Dec. 31, 2006, the company's balance sheet reflected:
(i) Cash, cash equivalents, short-term investment securities
and equity-based securities of $40 million compared to
$500 million at Dec. 31, 2005. Cash equivalents at
Dec. 31, 2005 excluded $29 million that was invested in
equity-based securities,
(ii) Total debt of $767 million at Dec. 31, 2006, compared to
$497 million at Dec. 31, 2005.
Headquartered in Jacksonville, Florida, Armor Holdings, Inc.
(NYSE: AH)-- http://www.armorholdings.com/-- manufactures and
distributes security products and vehicle armor systems for the
law enforcement, military, homeland security, and commercial
markets.
* * *
Armor Holdings, Inc.'s 8-1/4% Senior Subordinated Notes due 2013
carry Moody's Investors Service's B1 rating and Standard & Poor's
B+ rating.
ATLANTIC BROADBAND: Proposed Add-on Cues Moody's to Hold Ratings
----------------------------------------------------------------
Moody's affirmed Atlantic Broadband's B2 corporate family rating,
B2 probability of default rating and stable outlook following the
proposed increase to the company's senior secured debt facility.
The company plans to redeem a portion of its existing preferred
equity of $77 million, refinance its $25.5 million Term Loan A and
issue add-on $110 million to its existing Term Loan B.
The transaction will also increase the company's flexibility under
its debt covenants. In addition, Moody's affirmed the B1 senior
secured rating assessed at LGD3, 38%, and Caa1 senior subordinated
note rating assessed at LGD5, 89%.
In Moody's view, the company ratings can sustain the approximate
one-turn increase in leverage following the financing. Upon
closing, Moody's will withdraw the Term Loan A rating.
Atlantic Broadband's ratings reflect:
-- high financial risk;
-- leverage of over 7x debt-to-EBITDA pro forma the current
transaction and G-Force acquisition; and
-- low interest coverage, lack of free cash flow and small
scale.
The upgraded cable systems and expectations for solid EBITDA
growth leading to de-leveraging over the next 18 months support
the ratings.
Moody's notes Atlantic Broadband has improved its operating
performance, exceeding Moody's prior expectations and in line with
management's projections.
These are the rating actions:
* Atlantic Broadband Finance, LLC
* Affirmed:
-- Corporate Family Rating at B2
-- Probability of Default Rating at B2
-- Senior Secured Debt at B1, LGD3, 38%
-- Senior Subordinated Notes at Caa1, LGD5, 89%
The outlook is stable.
Atlantic Broadband Finance, LLC is a multiple system operator
serving approximately 265 thousand cable subscribers. Its annual
revenue is approximately $200 million. The company maintains its
headquarters in Quincy, Massachusetts.
ATRIUM COS: Pending Buyout Prompts S&P to Hold Credit Rating at B
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit and senior secured ratings on Atrium Cos. Inc. in
connection with the company's pending acquisition of a window
manufacturer serving the replacement market.
The outlook is negative.
"This action reflects Atrium's cost-saving initiatives, which
should lend support to earnings in 2007, and the benefits of the
acquisition, which include a slight increase in geographic
diversity and more exposure to the less cyclical repair and
remodeling sector of the residential window market," said
Standard & Poor's credit analyst Pamela Rice.
"Still, we expect new residential construction, to which Atrium is
highly exposed, to stay around current levels at least through
2007. The affirmation also reflects the additional equity
investment in the company by Kenner & Co., the controlling
stockholder, to finance the acquisition."
Leverage is currently very aggressive at about 8x for the 12
months ended Sept. 30, 2006, with total debt of $651 million.
Atrium, based in Dallas, Texas, is a consolidator in the
fragmented residential window industry, with about 60%-65% of
sales going to new construction.
"We could lower the ratings if the downturn in residential
construction is more severe than we expect or if raw material
costs rise and cause Atrium's earnings to fall further. We could
also lower the ratings if liquidity narrows from its already tight
levels, or if the company plans meaningful debt-financed
acquisitions. We could revise the outlook to stable
if end-market demand stabilizes at higher-than-anticipated levels
and Atrium's debt leverage improves toward the 5x area," Ms. Rice
added.
AURIGA LABORATORIES: Trevor Pokorney to Join Board of Directors
---------------------------------------------------------------
Auriga Laboratories Inc. reported that Trevor K. Pokorney will
join the company's board of directors, effective March 1, 2007.
"As Auriga expands its sales force and seeks to optimize our
operations, we anticipate Mr. Pokorney many years of experience
with fast-growing, highly-successful companies will make an
important contribution to our success," said Philip S. Pesin,
Auriga's CEO.
Mr. Pokorney has extensive business and financing experience, and
has lead and helped finance a number of successful high-tech
startups. He is currently the COO of Gemini Environmental, a
startup company in natural gas industry. Prior to Gemini, Mr.
Pokorney was the operations manager of Intel's Acceleration
Products Division, where he had been vice president of operations
before it was acquired by Intel in 2005.
Prior to Intel, Mr. Pokorney was senior vice president of sales,
marketing, and manufacturing logistics at Newisys, Inc., a startup
company which was the first to introduce an enterprise server
based on AMD's new x86-64 processor. At Newisys, Mr. Pokorney
oversaw the development and introduction of several product lines
and drove sales to a $200 million annual run rate within four
years.
Before Newisys, Mr. Pokorney served as the vice president of
operations for Living.com, a startup e-commerce company, which
supplied furniture and home accessories to the U.S. market.
Financed by Benchmark Capital, GE Capital, and Starbucks, Mr.
Pokorney helped Living.com enter a multi-million-dollar strategic
alliance with Amazon.com to create a "Home Living" store at
Amazon.com.
Mr. Pokorney holds a Master of Science degree from Carnegie
Mellon University Graduate School of Industrial Administration,
Manufacturing and Operations Management where he graduated Magna
Cum Laude. Mr. Pokorney earned his Bachelor of Science in
Mechanical Engineering from the University of Texas at Austin,
graduating Summa Cum Laude.
Going Concern Doubt
Jaspers + Hall, P.C., in Denver, Colorado, raised substantial
doubt about Auriga Laboratories' ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Sept. 30, 2005. The auditor pointed
to the Company's operating losses, has minimal working capital as
of Sept. 30, 2005, and no ongoing source of income.
About Auriga Laboratories
Based in Norcross, Georgia, Auriga Laboratories(TM), Inc., (OTCBB:
ARGA) -- http://www.aurigalabs.com/-- is a pharmaceutical company
capitalizing on high-revenue markets and opportunities in the
pharmaceutical industry through aggressive sales, integrated
marketing and advanced in-house drug development capabilities.
AVIS BUDGET: Agrees to Secure Unit's $1 Billion Senior Notes
------------------------------------------------------------
Avis Budget Group Inc. has agreed to guarantee the principal of,
and interest on, the $1 billion aggregate principal amount of
senior notes issued by Avis Budget Car Rental, a subsidiary, in
April 2006.
Accordingly, Avis Budget Car Rental's 7.625% Senior Notes due
2014, 7.75% Senior Notes due 2016 and Floating Rate Senior Notes
due 2014 will now have the benefit of a parent-company guarantee.
As a result of the guarantee, under applicable rules of the
Securities and Exchange Commission, the company will continue to
file periodic reports with the SEC for the company but does not
expect that periodic reports will be required for any of its
subsidiaries, including Avis Budget Car Rental.
The company expects to achieve cost savings as a result of filing
periodic reports for just one entity. In consideration of Avis
Budget Group's agreement to guarantee the notes, the company
received $14 million, before fees and expenses, from certain
institutional investors in a transaction arranged by Deutsche
Bank Securities Inc.
The guarantee has not been registered under the Securities Act of
1933, as amended, and may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements.
[ About Avis Budget
Avis Budget Group, Inc. -- http://www.avisbudgetgroup.com/--
(NYSE:CAR) provides vehicle rental services, with operations in more than
70 countries. Through its Avis and Budget brands, the company is the
largest general-use vehicle rental company in
each of North America, Australia, New Zealand and certain other regions.
Avis Budget Group is headquartered in Parsippany, N.J. and has more than
30,000 employees.
* * *
As reported in the Troubled Company Reporter on Feb. 14, 2007,
Standard & Poor's Ratings Services assigned its 'BB+' corporate
credit rating to Avis Budget Group Inc., parent of Avis Budget Car
Rental LLC. According to S&P, the rating assignment follows after
Avis Budget Group's statement that it will guarantee Avis Budget Car
Rental's unsecured notes.]
BANC OF AMERICA: S&P Lifts Rating on Class M Certs. to BB- from B+
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on nine
classes of commercial mortgage pass-through certificates from Banc
of America Commercial Mortgage Inc.'s series 2000-2.
Concurrently, ratings were affirmed on the remaining classes from
the same series.
The raised and affirmed ratings reflect the stable performance of
the pool and increased credit enhancement levels that provide
adequate support through various stress scenarios. The upgrades
of several senior certificates reflect the defeasance of
$187.8 million (25%) of the pool's collateral since issuance.
As of the Jan. 16, 2007, remittance report, the collateral pool
consisted of 116 loans with an aggregate trust balance of
$761 million, down from 128 loans with a balance of $889.8 million
at issuance. The master servicer, KeyBank Real Estate Capital,
reported primarily full-year 2005 and interim 2006 financial
information for 98% of the pool, which excludes the defeased
collateral. Based on this information, Standard & Poor's
calculated a weighted average debt service coverage of 1.40x,
compared with 1.39x at issuance.
All of the loans in the pool are current, except for one that is
60-plus days delinquent. The loan has a total exposure of
$5.9 million and is the only asset with the special servicer, LNR
Partners Inc. To date, the trust has experienced four losses
totaling $2.7 million.
The top 10 loans secured by real estate have an aggregate
outstanding balance of $284.8 million and a weighted average DSC
of 1.51x, up from 1.49x at issuance. The fourth-largest loan is
on the watchlist and is discussed below. Excluding the fourth-
largest loan, the weighted average DSC is 1.65x, compared with
1.51x at issuance.
Standard & Poor's reviewed property inspections provided by the
master servicer for all of the assets underlying the top 10 loans.
Four properties were characterized as "excellent," while the
remaining collateral was characterized as "good."
KeyBank reported a watchlist of 25 loans with an aggregate
outstanding balance of $128.5 million, which includes one of the
top 10 loans in the pool. The fourth-largest exposure, 111 West
Jackson at $25 million (3%), is secured by a 540,351-sq.-ft. class
B office building in the south sector of Chicago's central
business district built in 1960 and renovated in 1992. The
loan was placed on the watchlist due to a decline in occupancy to
48% as of Dec. 31, 2005, after several of the largest tenants
vacated, compared with 91% at issuance. Year-end 2005 DSC was
0.19x.
The remaining loans on the watchlist have low occupancy, lease
expirations, or low DSC levels.
There is one asset with the special servicer. HomeBase-Spokane has
a total exposure of $5.9 million and is secured by a
100,100 sq. ft. retail center in Spokane, Wash. In August 2001,
the single tenant, HomeBase, declared bankruptcy and vacated the
premises, and the property has been vacant since. Debt service
payments were being funded from the reserve account, which was
depleted, prompting a transfer to the special servicer in December
2005.
Foreclosure is in process. Based on the draft appraisal,
Standard & Poor's expects a loss at eventual disposition of this
asset.
Standard & Poor's stressed various loans in the transaction,
paying closer attention to the asset with the special servicer and
those on the watchlist. The resultant credit enhancement levels
support the raised and affirmed ratings.
Ratings Raised
Banc of America Commercial Mortgage Inc.
Commercial Mortgage Pass-Through
Certificates Series 2000-2
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
D AAA AA 17.21%
E AAA AA- 16.04%
F AA+ A+ 14.58%
G AA A- 12.24%
H A+ BBB+ 10.78%
J BBB BB+ 6.25%
K BBB- BB 5.52%
L BB BB- 4.64%
M BB- B+ 4.35%
Ratings Affirmed
Banc of America Commercial Mortgage Inc.
Commercial Mortgage Pass-Through
Certificates Series 2000-2
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 27.74
A-2 AAA 27.74
B AAA 22.77
C AAA 19.55
N B 3.47
O B- 2.89
X AAA N/A
N/A -- Not applicable.
BETRAND CHAFFEE: Taps American Healthcare as Financial Advisor
--------------------------------------------------------------
The Bertrand Chaffee Hospital and its debtor-affiliate, Jennie B.
Richmond Chaffee Nursing Home Company Inc., ask the U.S.
Bankruptcy Court for the Western District of New York for
permission to employ American Healthcare Solutions LLC as
their financial advisor and consultant.
Paul DeSantis, the senior consultant of the firm, is the Interim
Chief Financial Officer for the Debtors. Mr. Desantis and other
temporary employees of the firm will be involved in directing
the Debtors' operations with the objection of restructuring the
operations and managing the its daily operations and restructuring
efforts.
Specifically, the firm will:
a. lead and direct cash management strategies, tactics and
processes, including coordination of resources with the
Debtors' professionals and constituents as necessary and
appropriate;
b. lead and coordinate development of the Debtors' revised
business plan, including the review and development of
long-range business plans and supporting analyses and the
evaluation of various strategic alternatives;
c. identify and implement both short-term and long-term
liquidity generating initiatives while developing and
implementing measures to reduce indebtedness or to modify
the terms of such indebtedness;
d. assist with the identification of executory contracts and
leases and performance of cost/benefit evaluations with
respect to the affirmation or rejection of each;
e. assist in the preparation of financial information for
distribution to creditors and others, including, but not
limited to, cash flow projections and budgets, cash
receipts and disbursement, analysis of various asset and
liability accounts and analysis of proposed transactions,
as well as directing the additional financial reporting
requirements associated with a chapter 11 filing including
the statement of financial affairs, statement of assets
and liabilities, monthly operating reports and claim
reconciliation;
f. attend meetings and assist in discussions with potential
investors, banks and other secured lenders, any official
committee(s) appointed in these cases and other parties
in interest and their professionals, as needed;
g. assist in the preparation of information and analyses
necessary for the confirmation of a plan of
reorganization in these chapter 11 cases, including
information contained in the disclosure statement;
h. assist in the evaluation and analysis of avoidance
actions, including fraudulent conveyances and
preferential transfers;
i. provide accounting and tax support;
j. testify on case-related issues as required or requested
by the Debtors; and
k. render other general business and consulting or other
assistance as Debtors' management or counsel may deem
necessary that are consistent with the role of financial
advisor and consultant and are not duplicative of
services provided by other professionals in these
proceedings.
Mr. DeSantis charges the Debtors $188 per hour for his services.
To the best of the Debtors' knowledge, the firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
Mr. DeSantis can be reached at:
Paul DeSantis, CPA
Senior Consultant
American Healthcare Solutions LLC
One Oxford Centre, Suite 4300
301 Grant Street
Pittsburgh, PA 15219
Tel: (724) 337-3011
Fax: (724) 337-3118
http://www.americanhs.com/
Headquartered in Springville, New York, The Bertrand
Chaffee Hospital and its debtor-affiliate, Jennie B. Richmond
Chaffee, Nursing Home Company, operates hospital facilities and
serves a rural population of 55,000 people in approximately 525
square miles in a three county area of Erie, Wyoming and
Cattaraugus counties. The Debtors filed for Chapter 11 protection
on Feb. 7, 2007 (Bankr. W.D. NY Case No. 07-00470). Gary M.
Graber, Esq., and Julis S. Kreher, Esq., at Hodgson Russ LLP,
represent the Debtors in their restructuring efforts. No Official
Committee of Unsecured Creditors has been appointed in the
Debtors' bankruptcy proceedings. When the Debtors filed for
protection from their creditors, they estimated assets and debts
of more than $100 million.
BEVERAGES & MORE: S&P Junks Rating on $100 Mil. Sr. Secured Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to Concord, California-based Beverages & More! Inc.
Standard & Poor's also assigned a 'CCC+' rating to the company's
$100 senior secured notes due 2012.
The ratings reflect BevMo's participation in the highly
competitive alcoholic beverage retail industry, limited regional
focus, small size and market share, and dependence on product
introductions from producers for growth.
Pro forma for the $205 million LBO with Towerbrook Capital
Partners, BevMo will be substantially levered at about 8.1x
lease-adjusted debt to EBITDA, with weak cash flow credit
protection measures.
The outlook is stable.
BevMo participates in the highly competitive and fragmented
alcoholic beverage industry. The industry is subject to
individual state regulation, although the landscape has recently
improved for retailers. Because almost all of its 62 stores are
in California, Standard & Poor's regards this heavy regional
concentration as a vulnerability. The company competes primarily
on the basis of customer service and selection, but does price its
product competitively.
The stores, which average around 10,000 sq. ft., have a greater
selection of beer, wine, and spirits than other supermarkets and
grocery clubs. BevMo's size provides it with some economies of
scale compared with individually owned liquor stores. General
demand is somewhat insulated from macroeconomic trends and
experiences limited seasonality.
BOBCAT GAS: Moody's Assigns B2 Ratings to $185 Million Term Loans
-----------------------------------------------------------------
Moody's Investors Services assigned a B2 corporate family rating
to Port Barre Investments, LLC dba Bobcat Gas Storage and B2
ratings to its 7.5 year senior first secured $65 million delayed
draw Term Loan A and $120 million single-draw Term Loan B.
Term Loan A and Term Loan B rank pari passu in their claim on all
Bobcat assets, contracts, permits, and sponsors' equity in Bobcat.
Another $10 million of first secured debt is permitted for
post-completion working capital. In St. Landry Parish, Louisiana,
100 miles northwest of Baton Rouge and 45 miles from the Henry
Hub, Bobcat will create by solution mining a FERC-regulated
two-cavern natural gas salt dome storage facility with 13.5 Bcf of
design working gas capacity.
The rating outlook is stable, assuming Bobcat completes its first
two caverns reasonably within scheduled timing and costs. Bobcat
will have no material cash flow until 2009 and high leverage
through at least 2010. It believes its site can accommodate seven
6.75 Bcf caverns and may commence expansion while still
substantially leveraged. A positive outlook is possible when the
first cavern and infrastructure near or achieve completion on time
and on budget and if Bobcat has contracted a substantially higher
level of firm revenue at supportive prices.
The B2 ratings are supported by:
-- a sponsor and management long-seasoned in the natural gas
midstream and salt dome storage sectors;
-- a sound market rationale for Bobcat's capacity and
advantaged location;
-- a suitably structured debt facility with adequate lender
control and third party engineer approvals for all
drawdowns;
-- significant contracted revenue, though short of full debt
service and subject to Cavern I start-up by Nov. 30, 2008;
-- and three supportive third party engineering reviews of
geological, construction, and natural gas market risk and
opportunity.
Including contingencies and capitalized G&A, roughly $93 million
of debt actually faces construction and hard asset value risk
since $60.8 million of first-in cash equity funds initial costs
and some $50 million of TLA will fund the acquisition of 6.4 Bcf
of hedged readily monetized pad gas to maintain cavern pressure.
The ratings are restrained by:
-- completion, delay, and cost overrun risk inherent to salt
dome storage development;
-- an aggressive construction timeline and a need to be in
service by Nov. 30, 2008 to ensure retention of the Merrill
Lynch (4 Bcf), Sequent (1 Bcf), and Atmos Energy (1 Bcf)
precedent firm storage contracts;
-- rising salt dome storage competition;
-- a need to finish negotiating all 5 pipeline interconnect and
metering stations, remaining surface access rights, and
permits needed to build Bobcat; and
-- the need to arrange the remaining storage contracts needed
for full debt service.
With a modest 3 month time cushion for completion, delay could
invalidate the storage contracts. The contracts have the same
start date so revenue risk due to start-up delay is not
diversified. The ratings are constrained by Bobcat's less ample
equity sponsorship versus its rated peers Niska Gas Storage and
Pine Prairie and a lack of contingent equity for unfunded cost
overruns. This is tempered by Moody's expectation for a material
degree of voluntary support by Haddington.
Bobcat's competitive position is enhanced by its proximity and
bi-directional access to 5 strategic natural gas pipelines,
serving 5 major consuming regions, and its physical proximity to
the Henry Hub pipeline interchange. Henry Hub proximity results
in narrower and highly correlated differentials to Henry Hub cash
and Nymex forward prices, improving hedge efficiency on stored
volumes and enhancing Bobcat's attraction to merchant marketers
pursuing active trading strategies.
While Bobcat has so far only executed sufficient firm lease
contracts to roughly cover its estimated operating and interest
expense, it reported sufficiently strong bidding during two open
seasons to fully lease up its capacity.
Due to flat-to-down natural gas production, the reduction in
steady industrial natural gas demand, and demand growth from
highly seasonal peaking power plants, the demand for high
deliverability storage capacity is rising. Salt dome storage is
the only gas storage system able to meet peak surges in gas demand
due to its capacity for rapid withdrawals and re-injections.
Completion can be delayed bay a number of inherent factors, some
listed here. Leaching can take longer if salt homogeneity is less
favorable than expected; if raw water withdrawal rates from nearby
shallow aquifers are inadequate or require additional raw water
wells or surface access negotiations; or if brine disposal rates
are impeded by suboptimal rock qualities and formation volumes in
the depleted oil and gas reservoirs Bobcat targets at 4,500 feet
to 5,500 feet. Completion can be delayed if surface facilities
cannot support the expected leaching pace or post-completion
injection and withdrawal rates. Port Barre is also significantly
deeper than other domes from which caverns have been leached.
Resulting greater heat and pressure will cause greater salt creep
over time, adding to design, engineering, cost, and execution
complexity. Sandia National Laboratories reports that salt core
samples appear to mitigate some of these risks.
Moody's also notes potential significant excess capacity risk
within 4 or 5 years if regionally imported liquefied natural gas
volumes does not grow by orders of magnitude by then, given a
proportionately very large amount of new salt dome storage under
construction or in the planning stage. A near-term mitigant is
that Bobcat comes at the early stages of sector expansion. There
are sound reasons for at least the early expansion round of high
deliverability, fast injection and withdrawal cycle time, salt
dome storage, though Bobcat will be competing with Pine Prairie
Energy Center, LLC and Liberty Gas Storage which are under
construction.
Longer term, step change increases in Gulf Coast LNG import
volumes are likely needed to fully support later rounds of salt
dome expansion. The U.S.'s growing LNG need alone cannot drive
that growth. The world LNG market is distinctly
supply-constrained and will remain so pending several years of
major foreign LNG liquefaction and LNG tanker capacity expansion.
Several foreign liquefaction projects are delayed, some on-line
projects are not delivering design rates, and one key government
has slowed development to reassess prudent field production rates
at which it can feed liquefaction. Until then, U.S. salt dome
expansion may drive increasingly competitive markets in which
Bobcat will be seeking to lease Cavern II capacity, re-contract
Cavern I and II initial contract rollovers 36 to 54 months hence,
and lease out other new caverns.
In the meantime, Bobcat is well-situated to source natural gas
from multiple producing regions, including rising volumes from
East Texas, the Texas Barnett Shale, and deepwater Gulf of Mexico
production. This provides medium term offset to declining shallow
water GOM and Gulf Coast production. Bobcat will have
bi-directional access to interconnections with five key natural
gas transmission lines serving the deepest largest natural gas
consuming markets in the U.S., including the Midwest, Northeast,
Mid-Atlantic, Southeast, and Florida.
The credit facilities include a 60% to 80% cash flow sweep, though
the degree of cash flow that will be carved out for expansion
capital outlays has yet to be finalized. Cost overrun risk is
significant given still heated conditions in the oilfield services
sector. The credit facility provides modest cost overrun cushion,
with a $22.1 million of cost overruns contingency and another
$11.7 million of undrawn TLA availability. The facility also
includes a six month debt service reserve account of approximately
$7.6 million.
Bobcat is owned 50% by Port Barre Holdings, LLC, which is 99%
owned by Haddington Energy Partners III LP and 1% by Bobcat
management, and 50% by GE Energy Financial Services. It targets
third quarter 2008 and third quarter 2009 Cavern I and II
completions, respectively. GE EFS will have a one-time option to
convert its preferred shares to 50% common ownership of Bobcat
within 90 days after its commercial completion, currently
estimated for fourth quarter 2009.
Bobcat's raw water sourcing wells, brine separation facilities,
and gas compression facilities will be situated on 34 leased
acres, beneath which the Port Barre Salt Dome structure begins
roughly 3,700 feet below the surface and extends to at least a
depth of 14,000 feet. Beginning 500 feet below the top of the
salt dome, each cavern will have a maximum diameter of 265 feet
and an approximate depth of 1,300 feet. The brine disposal wells
are not located on the leased acreage, being approximately 2 miles
from the project.
Port Barre Investments, LLC is headquartered in Houston, Texas.
CHARTER COMMS: Good Performance Cues S&P's Positive CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on St.
Louis, Missouri-based cable television provider, Charter
Communications Inc. and its subsidiary Charter Communications
Holdings LLC, including the 'CCC+' corporate credit ratings, on
CreditWatch with positive implications.
"This action reflects the improvement in liquidity that will
result if the company successfully refinances its bank
facilities," said Standard & Poor's credit analyst Richard
Siderman.
"In particular, the new credit facilities would materially reduce
otherwise problematic near-term debt maturities."
Charter had about $19 billion of consolidated debt at
Dec. 31, 2006. On Feb. 9, 2007, Charter disclosed its plans to
refinance and expand the existing $6.85 billion senior secured
credit facilities of its subsidiary, Charter Communications
Operating LLC. The proposed aggregate $8.05 billion of new
facilities will consist of $7.5 billion in first-lien facilities
and a $550 million second-lien term loan.
The $1.5 billion revolver portion of the first-lien facilities
will mature in 2013 and the first- and second-lien term loans will
mature in 2014. A portion of the proceeds from the transaction
will be used to redeem up to an aggregate $737 million of
subsidiary notes that mature in 2009 and 2010.
If the transaction, which is expected to close within a few weeks,
is completed as contemplated, at that time, Standard & Poor's
expects to raise the corporate credit rating to 'B-' and assign a
stable outlook. The proposed upgrade would be based on the
improved, albeit, still limited, liquidity which would result from
the new credit facilities. In particular, the new credit
facilities would
reduce S&P's concerns about the company's ability to meet 2007 and
2008 debt maturities in light of heavy capital spending related to
the rollout of new services.
The proposed transaction follows a series of other opportunistic
refinancings, including debt exchanges, over the past year and a
half that have extended some looming debt maturities.
Nevertheless, Charter continues to be very aggressively levered, a
legacy of building the company through heavily debt-financed
acquisitions of cable properties at prevailing market prices;
significant rebuilding costs; and operational challenges.
CHARTER COMMS: Proposed Refinancing Cues Moody's to Hold Ratings
----------------------------------------------------------------
Moody's affirmed Charter's Caa1 corporate family rating, Caa1
probability of default rating and stable outlook following the
proposed refinancing of the senior secured credit facilities of
Charter Communications Operating, LLC, a wholly owned subsidiary
of Charter Communications, Inc.
The proposed facilities include a $1.5 billion revolving facility,
a $1 billion initial term loan, a $5 billion refinancing term loan
and a $550 million second lien loan. The proposed transaction
improves intermediate term liquidity, extending the company's
maturity profile at a modestly lower interest rate.
However, the Caa1 corporate family rating continues to assume
Charter's capital structure remains unsustainable over the long
term, also despite recent operational progress.
Notwithstanding Charter's balance sheet challenges, the proposed
transaction provides evidence of the company's continued debt
market access, which has enabled it to opportunistically enhance
intermediate term liquidity. Charter's ratings benefit from its
substantial available bank capacity, which Moody's estimates will
remain in the $1 billion range throughout 2007.
Furthermore, the ratings also incorporate Moody's belief in the
company's meaningful asset value including a sizeable subscriber
base of approximately 5.4 million and its ability to sell assets
to raise capital.
Charter's Caa1 corporate family rating reflects the company's
untenable capital structure, which outweighs the benefits of its
scale as well as its operating capabilities. Charter's operating
metrics are weaker than most of its peers and, while improving,
still lag. Moreover, capital investments are constrained by the
company's very high interest burden. Clearly, Moody's views scale
as a strength in the cable sector, however in Moody's view, it has
also limited certain opportunities for Charter, particularly
regarding the streamlining of operations.
In Moody's view, recent steps, including asset sales and a more
coordinated marketing plan, should become more reflected in the
company's operating performance going forward.
These are the rating actions:
* Charter Communications Inc
* Affirmed:
-- Caa1 Corporate Family Rating
-- Caa1 Probability of Default Rating
-- SGL-3 Speculating Grade Liquidity
-- Caa3, LGD6, 96%, Convertible Senior Notes
-- Stable Outlook
* Charter Communications Operating, LLC
* Assigned:
-- B1, LGD2, 14%, $1000 New 1st Lien Loan
-- B3, LGD3, 41%, $550 Second Lien Loan
* Affirmed:
-- B1, LGD2, 14%, Senior Secured Revolver
-- B1, LGD2, 14%, Senior Secured 1st Lien Term Loan
-- B3, LGD3, 41%, Senior Second Lien Notes
* CCO Holdings, LLC:
* Affirmed:
-- Caa1, LGD4, 53%, Senior Notes
* Affirmed and to be withdrawn:
-- Caa1, LGD3, 48%, Senior Floating Notes
CCH II, LLC:
* Affirmed:
-- Caa2, LGD5, 72%, Senior Secured Notes
* CCH I, LLC
* Affirmed:
-- Caa2, LGD5, 72%, Senior Secured Notes
* CCH I Holdings, LLC:
* Affirm:ed
-- Caa3, LGD6, 91%, Senior Notes
-- Caa3, LGD6, 91%, Senior Discount Notes
* Charter Communications Holdings, LLC
* Affirmed:
-- Caa3, LGD6, 95%, Senior Notes
-- Caa3, LGD6, 95%, Senior Discount Notes
* Affirmed and to be withdrawn:
-- Caa3, LGD6, 95%, 8.250% senior notes due 2007
-- Caa3, LGD6, 95%, 8.625% senior notes due 2009
Charter Communications is one of the largest domestic cable
operators serving approximately 5.4 million subscribers.
Charter's annual revenue is approximately $5.4 billion. The
company maintains its headquarters in St. Louis, Missouri.
COLLINS & AIKMAN: Two Canadian Plants Will Lay Off 525 Employees
----------------------------------------------------------------
Collins & Aikman Corp.'s two Canadian plants producing plastic
trim parts will lay off approximately 525 employees,
CanPlastics.com reports. The Gananoque, Ontario, facility that
will close at the end of February will cut 125 jobs. Around 400
jobs will be lost at a plant in Toronto at the end of March.
The Detroit News also reported that Collins will close the Port
Huron plant unless a buyer is found by March 3, 2007. The Port
Huron plant employs 530 people, and is one of the largest
employers in the city.
David Youngman, Collins spokesman, notes that a "saturated
plastics market is one reason why the Port Huron plant is hard to
sell." The plant was acquired from Textron Inc. in 2001.
The instrument panels manufacturing plant in Missouri will also
be closed, eliminating 250 jobs. As Collins liquidates its
assets and makes distributions to secured creditors, it is
shutting plants it deems unlikely to be sold.
Mr. Youngman says that the Missouri plant is expected to close by
March 3, 2007. However, the closing date may be postponed if the
facility is needed to fulfill customer orders.
Additional plant closings may be announced at a later date.
In January, Collins announced that three North American plants and
two Canadian plants will be shut, cutting more than 1,100 jobs.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in
cockpit modules and automotive floor and acoustic systems and is
a leading supplier of instrument panels, automotive fabric,
plastic-based trim, and convertible top systems. The Company
has a workforce of approximately 23,000 and a network of more
than 100 technical centers, sales offices and manufacturing
sites in 17 countries throughout the world. The Company and its
debtor-affiliates filed for chapter 11 protection on May 17,
2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri,
Esq., at Kirkland & Ellis LLP, represents C&A in its
restructuring. Lazard Freres & Co., LLC, provides the Debtor
with investment banking services. Michael S. Stammer, Esq., at
Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors Committee. When the Debtors
filed for protection from their creditors, they listed
$3,196,700,000 in total assets and US$2,856,600,000 in total
debts. (Collins & Aikman Bankruptcy News, Issue No. 50;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
COLLINS & AIKMAN: Wachovia Bank Has Until Feb. 28 to Answer Charge
------------------------------------------------------------------
The Honorable Steven W. Rhodes of the U.S. Bankruptcy Court for
the Eastern District of Michigan extended until Feb. 28, 2007,
Wachovia Bank and Trust Company, N.A.'s deadline to file, at its
behest, an answer to Collins & Aikman Corp. and its debtor-
affiliates' complaint asking the Court to direct Wachovia to
turnover property that is currently being held in trust by the
Bank and seeking damages for alleged breach of contract.
In December 1986, the Debtors established a trust to pay
supplemental retirement benefits to Donald F. McCullough, the
former chief executive officer of Collins & Aikman Corp.
Wachovia serves as Trustee of the C&A Rabbi Trust.
Wachovia did not discontinue the payment of benefits under the
Trust. Instead, between June 2005 and October 2005, Wachovia
continued to use or invade the Trust Assets to pay monthly
benefits to Louise V. McCullough, the surviving spouse of
Mr. McCullough and the sole remaining beneficiary of the Trust,
aggregating $35,215.
The Debtors and Wachovia are currently in the process of
negotiating a settlement agreement to resolve all issues relating
to the adversary proceeding, and both agree that additional time
is needed to finalize the settlement.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in
cockpit modules and automotive floor and acoustic systems and is
a leading supplier of instrument panels, automotive fabric,
plastic-based trim, and convertible top systems. The Company
has a workforce of approximately 23,000 and a network of more
than 100 technical centers, sales offices and manufacturing
sites in 17 countries throughout the world. The Company and its
debtor-affiliates filed for chapter 11 protection on May 17,
2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri,
Esq., at Kirkland & Ellis LLP, represents C&A in its
restructuring. Lazard Freres & Co., LLC, provides the Debtor
with investment banking services. Michael S. Stammer, Esq., at
Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors Committee. When the Debtors
filed for protection from their creditors, they listed
$3,196,700,000 in total assets and US$2,856,600,000 in total
debts. (Collins & Aikman Bankruptcy News, Issue No. 52;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
CREDIT SUISSE: S&P Drops 'A' Class I-B-3 Certificate Rating to 'D'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class
I-B-3 mortgage pass-through certificates from Credit Suisse First
Boston Mortgage Securities Corp.'s series 2002-AR2 to 'D' from
'A'. Concurrently, the ratings on classes I-B-1 and I-B-2 were
lowered and placed on CreditWatch negative.
In addition, the rating on class II-B was placed on CreditWatch
with negative implications. Lastly, the ratings on classes I-A
and II-M-2 were affirmed.
The three downgrades reflect the $409,471 in losses incurred by
loan group one during the January 2007 distribution period. These
losses completely eroded the credit support for the class I-B-3
certificates. In addition, the loss also significantly eroded the
credit support for classes I-B-1 and I-B-2.
Loan group one has incurred approximately 0.36% in cumulative
realized losses and has 0.59% in total delinquencies. This loan
group has paid down its principal balance to 3.34% of its original
balance and is 59 months seasoned.
The 'BBB' rating on class II-B from loan group two was placed on
CreditWatch negative, reflecting the fact that nearly 40% of the
loan group is severely delinquent.
In addition, the overcollateralization (O/C), currently 0.39% of
original principal balance, is below its target of 0.50%. This
loan group has total delinquencies of 44.28% and cumulative
realized losses of 0.95%. The loan group has paid down to
approximately 2.56% of its original principal balance.
Standard & Poor's will continue to monitor the performance of this
transaction. With regard to loan group one, if losses do not
continue to erode the credit support to classes I-B-1 and I-B-2,
the ratings will be affirmed and removed from CreditWatch. With
regard to loan group two, if the severely delinquent loans do not
result in material losses, the rating on class II-B will be
affirmed and removed from CreditWatch.
Conversely, if losses continue to erode credit support, with
respect to both loan groups, Standard & Poor's will take
additional negative rating actions on these classes.
The affirmed ratings reflect adequate actual and projected credit
support percentages.
Credit support for loan group one is provided by subordination,
with O/C and excess interest cash flow serving as additional forms
of credit support for loan group two. The collateral for both
loan groups consists of 30-year, adjustable-rate, Alt-A mortgage
loans secured by first liens on one-to-four family residential
properties.
Rating Lowered
Credit Suisse First Boston Mortgage Securities Corp.
Mortgage Pass-Through Certificates Series 2002-Ar2
Rating
------
Class To From
----- -- ----
I-B-3 D A
Ratings Lowered And Placed On Creditwatch Negative
Credit Suisse First Boston Mortgage Securities Corp.
Mortgage pass-through certificates series 2002-AR2
Rating
------
Class To From
----- -- ----
I-B-1 AA/Watch Neg AAA
I-B-2 A/Watch Neg AA+
Rating Placed On Creditwatch Negative
Credit Suisse First Boston Mortgage Securities Corp.
Mortgage pass-through certificates series 2002-AR2
Rating
------
Class To From
----- -- ----
II-B BBB/Watch Neg BBB
Ratings Affirmed
Credit Suisse First Boston Mortgage Securities Corp.
Mortgage pass-through certificates series 2002-AR2
Class Rating
----- ------
I-A AAA
II-M-2 A+
DAIMLERCHRYSLER: Reports EUR3.2 Bil. Preliminary 2006 Net Income
----------------------------------------------------------------
DaimlerChrysler AG has reported its preliminary Group and
divisional results for the year 2006.
DaimlerChrysler recorded an operating profit of EUR5.517 billion
in 2006, compared with EUR5.185 billion in 2005.
The development of the Group's operating profit was primarily
impacted by the significant decline in earnings at the Chrysler
Group. This was more than offset by the substantial earnings
improvement at the Mercedes Car Group and the repeated increase in
earnings at the Truck Group and the Financial Services division.
The contribution to earnings from the Van, Bus, Other segment was
lower than in the prior year.
Net income increased by EUR4 million to EUR3.2 billion (2005:
EUR2.8 billion). Based on the reported net income, earnings per
share amounted to EUR3.16 compared with EUR2.80 in 2005.
Dividend
The Board of Management proposes to the Supervisory Board that a
dividend of EUR1.50 per share should be distributed for the year
2006 (2005: EUR1.50). This proposal takes account not only of the
development of operating profit and cash flow in 2006, but also of
expectations for the coming years.
Unit Sales and Revenues
DaimlerChrysler sold a total of 4.7 million vehicles in 2006
(2005: 4.8 million), while the Group's total revenues increased by
1% to EUR151.6 billion. Adjusted for exchange-rate effects and
changes in the consolidated Group, the increase in revenues
amounted to 2%.
The Workforce
As of Dec. 31, 2006, DaimlerChrysler employed a workforce of
360,385 people worldwide (2005: 382,724). Of this total, 166,617
were employed in Germany (2005: 182,060) and 94,792 in the United
States (2005: 97,480).
The implementation of the new management model is running
according to plan. By the end of January 2007, approximately
2,000 employees worldwide had either signed voluntary severance
agreements or had already left the Group.
DaimlerChrysler has been working with the new structures since
Aug. 1, 2006. Important processes have been made faster and more
efficient, allowing substantial efficiency gains. The total
expenditure for the implementation of the program in the years
2006 through 2008 is likely to be in the region of EUR2 billion.
Of this total, EUR393 million was incurred in the year 2006.
Investing to Safeguard Future
Worldwide, the DaimlerChrysler Group invested a total of
EUR5.9 billion in property, plant and equipment in 2006 (2005:
EUR6.6 billion). Capital expenditure at the Mercedes Car Group of
EUR1.7 billion was slightly higher than in the prior year
(EUR1.6 billion). To continue its product offensive and to make
its production facilities more flexible, the Chrysler Group
invested EUR2.9 billion in property, plant and equipment (2005:
EUR3.1 billion). The Truck Group invested EUR907 million in 2006,
mainly related to new technologies, powertrains, and safety
concepts (2005: EUR966 million).
Expenditure for research and development totaled EUR5.3 billion in
2006 (2005: EUR5.6 billion). The most important projects at the
Mercedes Car Group were the new generation of the E-Class, the new
version of the CL-Class, and preparations for the model change for
the C-Class in 2007.
The Chrysler Group's focus was on the development of the new
minivan generation as well as on hybrid vehicles. The Truck
Group's major projects included the successor models for the
Mercedes-Benz Actros and Axor, for the Freightliner Premium Class
and for the Mitsubishi Fuso Super Great.
Additional key areas of R&D activities at DaimlerChrysler were the
further development of powertrain technologies, alternative
propulsion systems such as hybrid drive and fuel cells, and
electronic systems for the improvement of vehicle safety.
During the planning period of 2007 through 2009, DaimlerChrysler
will presumably invest a total of EUR17.5 billion in property,
plant and equipment and EUR16.2 billion in research and
development activities. This adds up to total of investment in
safeguarding the future of EUR33.7 billion.
Mercedes Car Group
The Mercedes Car Group division, comprising the brands Mercedes-
Benz, Maybach, smart, Mercedes-Benz AMG, and Mercedes-Benz
McLaren, sold 1,251,800 vehicles in 2006 (2005: 1,216,800).
Revenues of EUR54.6 billion were 9% higher than the prior year's
level.
The Mercedes Car Group achieved an operating profit of
EUR2.415 billion in 2006, compared with an operating loss of
EUR505 million in the prior year. The results of both years were
significantly affected by special items.
There were expenses of EUR946 million in connection with the
discontinuation of production of the smart forfour in 2006, while
the realignment of the smart business model in 2005 resulted in
charges of EUR1.111 billion.
Charges relating to staff reductions at Mercedes-Benz Passenger
Cars in the context of the CORE program decreased to
EUR286 million in 2006 (2005: EUR570 million).
The substantial increase in the division's operating profit is due
in particular to the efficiency improvements achieved in the
context of the CORE program. Other positive factors were the
higher unit sales of Mercedes-Benz passenger cars and the improved
model mix due to the launch of the new S-Class as well as the
M- and GL-Class models. A negative impact on operating profit in
2006 resulted from currency effects.
The Mercedes-Benz brand increased unit sales in the year under
review by 5% to 1,149,100 vehicles. As a result, the brand was
able to boost its market share in key regions, despite tougher
competition. This positive result was primarily due to the very
successful new model launches in 2005, particularly of the new
S-Class, which went on sale in the United States in February 2006.
Like the new CL- and GL-Class models, the updated E- and SL-Class
vehicles launched in 2006 were also very well received by the
market and contributed to the Mercedes-Benz brand's success in the
year under review. On Oct. 15, 2006, the division launched the
E320 BLUETEC -- the world's cleanest diesel passenger car -- in
the United States and Canada.
The extensive measures being implemented to further improve the
quality of DaimlerChrysler's vehicles are having very positive
effects. This claim is supported by internal analyses and many
external studies. The J.D. Power Initial Quality Study 2006
concluded that the Mercedes-Benz brand has a positive trend in the
category of initial quality. Improvements were achieved in nearly
all of the issues that were addressed in last year's study (IQS
2005).
Unit sales of the smart brand totaled 102,700 vehicles in the year
under review (2005: 124,300). Unit sales of the smart fortwo
developed especially well throughout the year, with the model's
production volume once again exceeding the planned target in the
vehicle's ninth year of production.
More than 750,000 smart fortwos have been sold since the vehicle's
market launch. Despite an increase in production at the beginning
of the year, nearly all smart fortwo models built had been sold by
the end of 2006. Sales of the last smart roadsters and smart
forfour models proceeded according to plan; nearly all remaining
stocks of these vehicles had been sold by the end of the year
under review.
In November 2006, smart unveiled the new smart fortwo, which will
be launched in Europe in April 2007. Starting in 2008, the new
smart fortwo will also be available in the United States, which
has become a promising market for smart due to increasing traffic
volumes and rising fuel prices. The second-largest automobile
retail organization in the United States -- the UnitedAuto Group
-- will act as the exclusive importer of smart brand vehicles.
Chrysler Group
Worldwide, the Chrysler Group shipped 2.7 million Chrysler,
Jeep(R) and Dodge branded passenger cars, sports tourers,
minivans, SUVs, and light trucks to its dealerships in 2006 (2005:
2.8 million). Worldwide retail sales decreased by 5% in 2006 to
2.7 million units.
As a result of lower volumes and a weaker US dollar on average for
the year, the Chrysler Group's revenues for the year of
EUR47.1 billion were significantly lower than in 2005
(EUR50.1 billion).
The Chrysler Group posted an operating loss of EUR1.118 billion in
2006, compared with an operating profit of EUR1,534 million in
2005.
The deterioration in operating results was primarily the result of
negative net pricing, unfavorable product, and sales market mix,
and a decline in factory unit sales in the United States. These
factors reflect the continuing difficult market environment in the
United States during 2006 marked by an overall decline in market
volume, a shift in consumer demand towards smaller, more fuel-
efficient vehicles due to higher fuel prices, as well as the
impact of higher interest rates.
These negative factors were partially offset by the market success
of the new models, most of which were launched in the second half
of the year. Several of these vehicles target this shift in
consumer demand, resulting in a positive contribution to earnings
in the fourth quarter of the year.
In addition, the financial support provided to supplier Collins &
Aikman led to a charge of EUR66 million in 2006, compared to
EUR99 million in 2005. The Chrysler Group's prior-year operating
profit was positively impacted by a EUR240 million gain on the
sale of the Arizona Proving Grounds vehicle testing facility.
The Chrysler Group launched a total of 10 attractive new models in
2006, and significantly expanded its sales outside the NAFTA
region (+22% to 214,400 vehicles). Dodge launched its compact
five-door car -- the Dodge Caliber, as well as its first mid-size
SUV -- the Dodge Nitro, and the new Dodge Ram 3500 Chassis Cab.
The new positioning of the Jeep(R) brand portfolio continued with
the launch of the compact Jeep(R) Compass. Other new models
launched were the Jeep(R) Grand Cherokee SRT8, the new Jeep(R)
Wrangler, the four-door Jeep(R) Wrangler Unlimited and the Jeep(R)
Patriot. The Chrysler brand launched the Aspen, its first full-
size SUV, while the new Chrysler Sebring is intended to strengthen
the Chrysler Group's competitive position in the mid-size sedan
category.
The Chrysler Group also made more progress in the field of vehicle
quality in 2006. Internal measurements show that the quality of
the division's vehicles is better than ever before, a fact which
is confirmed by external quality studies: The Chrysler brand
ranked in the top ten in the 2006 J.D. Power Initial Quality
Study.
All three Chrysler Group brands also made gains in the 2006 J.D.
Power Vehicle Dependability Study, showing that customer
perception of quality continues to improve as new vehicles replace
older models in the product range.
The new manufacturing flexibility strategies have helped to
improve the Chrysler Group's efficiency, allowing the division to
better utilize its assets, such as the Belvidere (Illinois)
Assembly Plant, where the Dodge Caliber is built with the use of
highly flexible robots and free of vehicle-specific heavy tooling.
Over the four years of 2002 through 2005, the Chrysler Group
posted a cumulative 24% productivity improvement, with a 6%
improvement in 2005, as confirmed by the 2006 Harbour Report, a
recognized industry study that measures the productivity of North
American automotive manufacturers.
One year after the start of production by the Global Engine
Manufacturing Alliance, the second World Engine plant opened in
Dundee (Michigan) in October 2006. The two plants in Dundee are
part of a five-factory global venture developed by
DaimlerChrysler, Hyundai Motor and Mitsubishi Motors.
Truck Group
In 2006, the Truck Group built on the very successful developments
of the prior year, increasing unit sales by 1% to a new record of
537,000 vehicles.
The higher sales volume and an improved model mix also led
revenues to rise sharply by 5% to EUR32.0 billion.
The Truck Group achieved an operating profit of EUR2.020 billion
in 2006, a significant increase from the previous year's result of
EUR1.606 billion. The operating profit posted in 2005 included
exceptional income of EUR276 million from the settlement reached
with Mitsubishi Motors Corporation relating to expenditure for
quality actions and recall campaigns at Mitsubishi Fuso Truck and
Bus Corporation.
The increase in operating profit was primarily the result of
efficiency improvements realized in the context of the Global
Excellence Program as well as improved product positioning and
model mix. In addition, higher unit sales, which were mainly the
result of purchases brought forward because of stricter emission
limits in important markets, contributed to the higher earnings.
Higher expenses for new vehicle projects, for the fulfillment of
future emission regulations as well as currency effects had a
negative impact on operating profit.
Trucks Europe/Latin America (Mercedes-Benz) once again increased
its unit sales in the core markets of Western Europe. However,
due to a market downturn in Brazil and lower sales in the Near and
Middle East, total unit sales of 142,100 vehicles were slightly
below the prior year's high level. Operating in a very positive
market environment, the Trucks NAFTA unit (Freightliner, Sterling,
Western Star, Thomas Built Buses) increased its sales by 3% in
2006 to the record level of 208,300 vehicles. Trucks Asia
(Mitsubishi Fuso) sold 186,600 vehicles in 2006, a sharp increase
(+4%) on the prior year.
In the summer of 2006, as part of a roadshow through 12 major
European cities the division presented the Mercedes-Benz Safety
Truck, which combines all of the currently available assistance
and safety systems, including Active Brake Assist (emergency
braking support), Lane Assistant, Adaptive Cruise Control, and the
Stability Program.
Large-scale trials have shown that accident frequency can be
reduced by 50% by the Mercedes-Benz Safety Package. Furthermore,
The Truck Group's Hybrid Technology Competence Center passed one
of its first milestones with the introduction of Fuso's Canter
Eco Hybrid in Japan. In 2006, to ensure that it is ideally
prepared to face future challenges, the Truck Group began to build
a Development and Testing Center in the vicinity of the W"rth,
Germany, truck assembly plant. The first stage of construction is
scheduled to be completed during the year 2007.
Coinciding with Group-wide implementation of the new management
model, the Truck Group was launched on Aug. 1, 2006, with a
modified organizational structure. The division now consists of
three operating units: Trucks Europe/Latin America, Trucks NAFTA,
and Trucks Asia, each of which is responsible for production and
sales operations in its respective region.
In order to more extensively exploit synergies as early as the
product creation phase -- and to allow the enhanced harmonization
of parts and components -- the former Truck Product Creation unit
was split into two powerful units: Truck Product Engineering,
which is responsible for the three vehicle development centers in
Stuttgart, Portland and Kawasaki as well as the integrated
development of large components, and Truck Powertrain Operations
& Manufacturing Engineering, which oversees worldwide component
production and production planning for vehicle and component
plants.
Financial Services
The Financial Services division once again developed positively
and further improved its market position in 2006. Financial
Services significantly improved its operating profit from
EUR1.468 billion in 2005 to EUR1.714 billion in 2006, thus
achieving record earnings for the fifth consecutive year. The
increase in operating profit was the result of higher new business
and ongoing efficiency improvements. These factors more than
offset higher expenses resulting from higher interest rates and
increased cost of risk. In addition, the business development at
Toll Collect also contributed to the positive earnings trend.
New business increased by 10% to EUR53 billion, while contract
volume of EUR113.3 billion was 4% lower than in the prior year.
Adjusted for exchange-rate effects, contract volume rose by 5%.
At the end of 2006, Financial Services' portfolio comprised
6.5 million leased and financed vehicles.
The Americas region (North and South America) managed a total
contract volume of EUR80.4 billion at the end of 2006 (end of
2005: EUR85.9 billion). This was once again the highest volume
recorded by any Financial Services region, accounting for 71% of
the total portfolio. Adjusted for exchange-rate effects, the
portfolio in the region expanded by 4%.
The Europe, Africa & Asia/Pacific region also developed positively
in 2006. Contract volume of EUR32.9 billion was 3% higher than
the prior year's level. In Germany, DaimlerChrysler Bank further
improved its market position: contract volume at the biggest
European national company rose by 5% to EUR16 billion.
DaimlerChrysler Bank welcomed its one-millionth customer in May
2006.
DaimlerChrysler Financial Services expanded its financing
activities for commercial vehicles in Japan by establishing the
new Fuso Financial business unit. Since September 2006, Fuso
Financial is in charge of Mitsubishi Fuso's entire dealer network
in Japan.
Van, Bus, Other
Within the framework of the new management model, DaimlerChrysler
decided that the vans and buses activities, which until 2005 were
part of the Commercial Vehicles division, would be directly
managed as separate units. In addition, the Corporate Research
department and the development departments of the Mercedes Car
Group were merged; as a result, they are now directly allocated to
the Mercedes Car Group.
The Van, Bus, Other segment recorded an operating profit of
EUR913 million in 2006 (2005: EUR1.091 billion). Operating profit
in 2006 includes charges of EUR393 million for the implementation
of the new management model. These charges were mainly incurred
for workforce reductions in the DaimlerChrysler Group's
administrative areas. Exceptional income was achieved in 2006
from the sale of real estate not required for operating purposes
(EUR133 million) and the consummation of the sale of the off-
highway business (EUR248 million).
Operating profit for 2005 included a positive contribution from
the off-highway business of EUR144 million. The Van and Bus
operating units again achieved positive results.
Unit sales at the Vans unit totaled 256,900 vehicles worldwide in
the year under review (2005: 267,200). This slight decrease in
sales was due to the Sprinter model changeover and associated
production bottlenecks at the Dsseldorf plant. DaimlerChrysler
Buses comprises the bus operations of the Mercedes-Benz, Setra,
and Orion brands. The unit sold 36,200 buses and chassis
worldwide in 2006 (2005: 36,200). The Buses unit thus repeated
the high level of unit sales it achieved in the prior year and
maintained its position as the global market leader.
EADS contributed EUR649 million to the segment's operating profit,
which was below the prior-year result of EUR757 million. The
reduction is primarily related to delays with the delivery of the
Airbus A380. EADS will publish its results for the 2006 financial
year on March 9, 2007.
Outlook
On the basis of the divisions' planning, DaimlerChrysler expects
the Group's total unit sales to increase slightly in the year
2007. DaimlerChrysler assumes that total revenues in 2007 will be
at least in the magnitude of the prior year.
Based on the divisions' projections, DaimlerChrysler should
achieve a significant increase in profitability in the planning
period of 2007 through 2009.
A fundamental condition for the targeted increase in earnings is a
generally stable economic and political situation, as well as the
moderate rise in the worldwide demand for passenger cars and
commercial vehicles expected for the years 2007 through 2009.
Opportunities and risks may arise from the development of currency
exchange rates and raw-material prices.
In the year 2007, DaimlerChrysler will change over its accounting
and financial reporting to the International Financial Reporting
Standards. The present main performance measure, operating profit
according to US GAAP, will then be replaced with EBIT (earnings
before interest and taxes). The earnings outlook will be put into
more detail with the publication of the interim report on the
first quarter of 2007.
A full-text copy of the company's 2006 results is available for
free at http://ResearchArchives.com/t/s?19dc
About DaimlerChrysler
Based in Stuttgart, Germany, 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.
DAIMLERCHRYSLER: Chrysler Discloses Recovery & Transformation Plan
------------------------------------------------------------------
DaimlerChrysler AG's Chrysler Group disclosed a three-year
Recovery and Transformation Plan that seeks a return to
profitability by 2008 while also taking steps to change its
business model for the long run. The plan will result in an
employee reduction of 13,000 people from 2007 to 2009.
Chrysler Group President and Chief Executive Officer Tom LaSorda
outlined the plan at the DaimlerChrysler AG Annual Press
Conference, held in Auburn Hills, Mich.
DaimlerChrysler Chairman of the Board of Management Dr. Dieter
Zetsche said: "The Chrysler Team worked out a comprehensive
Recovery and Transformation Plan using all resources within
DaimlerChrysler. In addition to that and in order to optimize and
accelerate the presented plan we are looking into further
strategic options with partners beyond the business cooperation
partners mentioned. In this regard, we do not exclude any option
in order to find the best solution for both the Chrysler Group and
DaimlerChrysler."
Overall, the Recovery and Transformation Plan is aimed at a return
to profitability with a primary focus on costs. It is structured
to over-achieve in order to offset potential unforeseen market
headwinds, resulting in a target of EUR3.5 billion ($4.5 billion)
of financial improvements -- or a return on sales of 2.5% -- by
2009.
"There are two integrated parts to the plan," Mr. LaSorda said.
"First, the Chrysler Group needs to solidify its position in the
North American marketplace. In addition, the key to our long-term
success will be our ability to transform the organization into a
different company to achieve and sustain long-term profitability."
The program will be supported by a EUR2.3 billion ($3 billion)
investment in new engines, transmissions, and axles, which will
set the table for a product offensive of more than 20 all-new and
13 refreshed vehicles from 2007 to 2009.
Recovery
The Recovery plan is aimed at a return to profitability through a
combination of revenue programs and by sharply focusing on costs.
The key measures include:
A. Revenue Management
* Continue the product offensive with eight new and five
refreshed products in 2007. Key products include the new
Chrysler Town and Country and Dodge Grand Caravan minivans,
midsize Dodge Avenger sedan, Chrysler Sebring convertible,
and a Jeep Liberty that completes the revamping and expansion
of the Jeep family.
* Improve the retail-to-fleet mix, build momentum with new
offerings in global markets, and improve the effectiveness of
marketing and incentive spending.
* Reduce and optimize the dealer network to improve dealer
profitability.
B. Material and Fixed Costs
* Reduce material costs by up to EUR1.15 billion ($1.5 billion)
by 2009.
* Explore the sale of support operations, including
transportation services.
C. Capacity & Efficiency
* Reduce total production capacity by 400,000 units per year.
* In 2007, eliminate a shift at Newark (Delaware) Assembly
Plant and the Warren (Michigan) Truck Plant. In 2008,
eliminate a shift at St. Louis (Missouri) South Assembly
Plant.
* Idle Newark Assembly Plant in 2009.
* Idle the Cleveland (Ohio) Parts Distribution Center in
December 2007.
* Adjust powertrain, stamping, and component operations to
reflect reduced capacity.
D. Employee Reduction
* Overall, Chrysler Group will reduce the number of employees
by 13,000, or approximately 16%.
* Hourly employment will be reduced by 11,000 over three years,
with 9,000 in the U.S., and 2,000 in Canada (4,700 in the
U.S. and 1,100 in Canada in 2007 alone).
* Of the U.S. hourly total, 4,000 employees will be impacted by
assembly plant actions; 1,000 by reduced capacity in
powertrain, stamping and other component operations, 1,000 by
other actions including the potential sale of support
functions and 3,000 through technology, efficiency, and
productivity.
* Salaried employment will be reduced by 2,000 over the next
two years, with 1,000 each in 2007 and 2008.
* Special retirement programs and other termination and
attrition programs will be announced separately.
Mr. LaSorda said these actions complement significant other
restructuring measures taken since 2001. Previous to this
announcement, the company closed, idled, or sold 16 plants (five
assembly, 11 component) and reduced its workforce by one-third.
The financial impact of these Recovery measures will be seen
beginning in 2007 with a restructuring charge of up to
EUR1 billion ($1.3 billion), with the net cash impact for the year
of about EUR800 million ($1 billion). The impact of the balance
will be in the following two years.
In 2007, the Chrysler Group expects to further reduce dealer
inventories to align with market demand, which will result in a
reduction in operating profit of approximately EUR230 million
($300 million).
Transformation
Key parts of the Transformation will be a greater global footprint
and a shift in the product mix to smaller, more fuel-efficient
vehicles.
Currently, North America represents some 90% of the Chrysler
Group's business, and its product line-up has historically been
heavily weighted toward minivans, trucks and sport utility
vehicles.
"Those two factors were advantages for Chrysler Group once upon a
time," Mr. LaSorda said, "but the rules of the global marketplace
have changed. High fuel prices and other dramatic shifts in the
market have driven a shift in consumer preferences to smaller,
more fuel-efficient vehicles. We must make some strategic
adjustments to build off our historic strengths, but not rely on
them so much so that we are put at a competitive disadvantage," he
said.
"That will require a redesigned business model, with three primary
areas of strategic focus," Mr. LaSorda said. "First, the Chrysler
Group will add a more robust customer and brand focus while
continuing to stress product leadership. In addition, we must
achieve better global balance and rely more heavily on leveraging
partnerships to manage costs while finding growth opportunities."
Specifically, Mr. LaSorda pointed to the following initiatives:
A. Customer and Brand Focus
* Continue the product offensive through 2009, with more than
20 all-new vehicles and 13 refreshed vehicles.
* Build on its existing product strengths through new entries
in the minivan, pick-up truck, and select rear-drive
full-size vehicles. At the same time, the company will learn
to do more with less with a plan to reduce product platforms
from the current 12 to seven by the year 2012.
* Expand into new commercial vehicle segments, including
entering the Class 4 & 5 truck segments for the first time.
* Continue the shift to a car/truck mix that is less reliant on
trucks.
* Invest in powertrain with EUR2.3 billion ($3 billion)
dedicated to new engines, transmissions, and axles, in order
to move toward a portfolio that is more fuel efficient. That
will include a common axle program for all vehicles, plus
work on a new transmission technology. Last week, the
company signed a non-binding memorandum of understanding with
Getrag (a German-based supplier) to develop this more fuel
efficient "dual clutch" transmission technology.
* As part of that powertrain offensive, the company has under
development a new V-6 engine platform (dubbed "Phoenix")
which is targeted to reduce the number of six-cylinder engine
families from four to one.
* In addition, Chrysler Group will introduce its first two-mode
full hybrid with the 2008 Dodge Durango, and is also
evaluating a mild hybrid for future applications.
* Finally, it will expand its line-up of diesel engines,
including several BLUETEC-labeled vehicles, a designation
emblematic of the cleanest diesel in its class.
B. Increase Global Presence
* Avoid nameplate redundancies in North America and develop and
introduce vehicle programs aimed at global markets.
* Use third parties where possible to access regional products
and markets where it makes economic sense.
* Balance supplier purchasing globally by targeting
EUR3.8 billion ($5 billion) of additional purchasing to
low-cost sources to complement the company's global growth.
C. Partnerships
* Better use of alliances and partnerships around the world,
such as the Chrysler Group does currently with:
-- In manufacturing, an agreement with Volkswagen to build
minivans in North America for VW's dealers.
-- In retail, such as in Mexico where it sells a
Hyundai-produced vehicle as the Dodge Atos, and soon will
sell a small cargo van produced in Taiwan.
-- In import opportunities, such as the recently-announced
agreement in principle with Chery Automobile Company of
China (contingent upon approvals from the DaimlerChrysler
Supervisory Board and the Chinese government) produce a
small car for sale in North America and Europe.
-- And in focused partnerships, such as the GEMA World Engine
project with Hyundai and Mitsubishi in Dundee, Mich., or
the DaimlerChrysler consortium with General Motors and
BMW to develop hybrids.
About DaimlerChrysler
Based in Stuttgart, Germany, 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: Judge Lifland Amends Deadlines of 1113/1114 Schedules
----------------------------------------------------------------
The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for
the Southern District of New York amended the deadlines governing
the briefing, discovery, hearing and adjudication of Dana Corp.
and its debtor-affiliates' Section 1113/1114 Process:
February 22, 2007 - Deadline to respond or object to
Section 1113/1114 Motion
February 23, 2007 - Deadline for Retiree Committee and the
Unions to file final witness list
February 28, 2007 - Deadline for filing of declarations and
affidavits to be used for testimony
March 5, 2007 - Completion of discovery
- Deadline to respond to objections to
Section 1113/1114 Motion
March 6, 2007 - Pre-trial Conference
March 12 & 13, 2007 - Trial
April 30, 2007 - Target Date for Court to Decide on the
Section 1113/1114 Motion
Retiree Committee Wants Scheduling Order Modified
The Official Committee of Non-Union Retirees asks the Court to
amend the Section 1113/1114 Scheduling Order to reflect that the
deadline for it to file a response brief is within 21 days after
it has received the Debtors' 2008 financial projections.
According to Trent P. Cornell, Esq., at Stahl Cowen Crowley, LLC,
in Chicago, Illinois, the Debtors have informed the Retiree
Committee that they intend to delay giving their 2008 financial
projections.
The 2008 financial projections is necessary for the Retiree
Committee to make an informed evaluation of the Debtors' proposed
benefit elimination, Mr. Cornell contends. Thus, the Retiree
Committee cannot make a substantial responsive brief without
first knowing the Debtors' 2008 financial projections.
About Dana Corp.
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 Sept. 3,
2007. They have until Nov. 2, 2007, to solicit acceptances of
that plan. (Dana Corporation Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
DANA CORP: Wants to Sell Columbia Property for $1.7 Million
-----------------------------------------------------------
Dana Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court
for the Southern District of New York to approve the sale of a
real property located in Columbia City, Indiana, for $1,700,000,
to Mark E. GiaQuinta, pursuant to the Court's previous order
approving procedures to sell or transfer certain de minimis
assets.
The Assets to be sold consist of:
(a) Approximately 27 acres of land at the Southwest
intersection of 800 East and U.S. Route 30 in Columbia
City, Indiana, together with:
* the Debtors' interests to all rights-of-way, open or
proposed streets, alleys, easements, strips or gores of
land adjacent to the Property;
* buildings, improvements and structures located on the
Property; and
* fixtures that are located at and affixed to any of
the Improvements as of the Closing Date;
(b) All of the Debtors' right, title and interest in and to
the tangible personal property that is located at and used
in connection with any of the Property as of the Closing
Date; and
(c) To the extent transferable, all of the Debtors' right,
title and interest in and to all tangible and intangible
assets of any nature relating to the Property.
The Debtors and Mr. GiaQuinta agree that real estate and
personal property taxes and assessments will be allocated between
them on a cash basis as of the Closing Date, other than ad
valorem real estate and personal property taxes. The parties
also agree to share the costs and fees incurred in connection
with the sale of the Assets.
After the Closing, Mr. GiaQuinta will have the right to remain in
possession of the Warehouse and the non-exclusive right to use
the adjourning parking area. At the Closing, the parties will
execute a lease, providing for:
(a) a term of no less than five months and continuing
thereafter on not less than 90 days prior written notice
and;
(b) an annual rent at a rate of $4.75 per square foot.
On or before the Closing, Mr. GiaQuinta will deposit into
an escrow account the Purchase Price, adjusted to account for
Pro-ration and Closing Costs, together with all other costs and
amounts he needs to pay at the Closing pursuant to the terms of
the Asset Purchase Agreement.
Two parties hold liens or have other interests in the Assets:
1. Citicorp North America, Inc., as Administrative Agent under
the Senior Secured Superpriority DIP Credit Agreement,
dated March 6, 2006; and
2. Citicorp USA, Inc., as Administrative Agent under the
Security Agreement, dated November 18, 2005.
Each Lienholder has either consented to the Proposed Sale or the
Lienholder's lien or interest can be extinguished, has been
waived or is capable of monetary satisfaction.
In connection with the Proposed Sale, the Debtors propose to pay
a $63,750 broker commission to Signature Associates and $31,960
commission to The Zacher Company who worked with Signature
Associates to represent the Debtors on the sale.
About Dana Corp.
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 Sept. 3,
2007. They have until Nov. 2, 2007, to solicit acceptances of
that plan. (Dana Corporation Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
DAVITA INC: Fitch Rates $400 Mil. Senior Unsecured Notes at B
-------------------------------------------------------------
Fitch Ratings has assigned a 'B' rating to DaVita Inc.'s
$400 million 6.625% senior unsecured notes due 2013.
Fitch's other ratings for DaVita are:
-- Issuer Default Rating 'B+';
-- Bank Credit Facility 'BB/RR2';
-- Senior Subordinated Notes 'B-/RR6'; and
-- Senior Unsecured Notes 'B/RR5'.
The Rating Outlook is Stable.
The notes are part of the same series of notes as DaVita's
$500 million 6.625% senior unsecured notes due 2013, issued in
March 2005. Pricing on the new notes has been completed and the
offering is expected to close on Feb. 23, 2007.
Fitch expects DaVita to use the proceeds from the issuance to
reduce amounts outstanding under the Term Loan portion of its
senior secured credit facility. At Sept. 30, 2006, DaVita had
approximately $279 million outstanding on its Term Loan A and
$2,181 million outstanding on its Term Loan B. The company also
had an undrawn $253 million revolver with $49 million in letters
of credit outstanding. The interest rates on the Term Loan A and
Term Loan B were LIBOR+1.75% and LIBOR+2%, respectively. The
company is currently seeking an amendment to its credit facility
in order to obtain better pricing.
DaVita's ratings reflect significant debt levels and an uncertain
regulatory environment. At the same time, DaVita has demonstrated
improved financial performance for the past several quarters.
Leverage has decreased to 4.49x for the latest 12 months ended
Sept. 30, 2006 from 6.85x at the end of 2005.
DAVITA INC: Gambro Buyout Cues Moody's to Upgrade Ratings
---------------------------------------------------------
Moody's Investors Service upgraded DaVita Inc.'s Corporate Family
Rating to Ba3 from B1.
Moody's also upgraded the ratings of the company's senior secured
credit facilities to Ba1 from Ba2, its senior unsecured notes to
B1 from B2, and its senior subordinated notes to B2 from B3.
Moody's also changed the outlook to stable from positive.
The upgrade of the ratings primarily reflects the improvement in
DaVita's credit quality after the acquisition of Gambro
Healthcare, the US dialysis clinics of Sweden's Gambro AB. Since
the acquisition, the company has outpaced expectations, with
respect to cash flow, EBITDA and debt reduction. The stable
outlook reflects the expectation for continued positive operating
results.
The Ba3 Corporate Family Rating is supported by DaVita's large
scale and competitive position as the second largest provider of
dialysis services in the US.
Additionally, Moody's notes DaVita's steady cash flow is supported
by the recurring nature of revenues, minimal exposure to bad debt
and geographic diversification, which has been enhanced by the
acquisition of the Gambro business. The steady free cash flow has
allowed DaVita to prepay a considerable amount of the outstanding
term loan thereby restoring some of the financial flexibility
foregone at the time of the Gambro acquisition.
The ratings also consider the closing of the investigation of
DaVita by the Civil Division of the US Attorney's Office for the
Eastern District of Pennsylvania. However, investigations by the
US Attorney's Offices for the Eastern District of Missouri and the
Eastern District of New York remain open.
Further, the ratings still reflect the considerable amount of
financial leverage of the company. The ratings also consider the
company's limited diversification of revenue streams resulting
from Davita's singular focus on the dialysis services marketplace
and its high concentration of revenues from Medicare.
Additionally, a significant amount of total dialysis revenue is
generated from the administration of Epogen, manufactured solely
by Amgen, Inc. EPO, being one of the most costly pharmaceuticals
to the US healthcare system, has been and will likely continue to
be the subject of government scrutiny. Negative reimbursement or
pricing changes for EPO or a new competitive entrant to the market
could have a significant effect on the operations of the company.
These ratings were upgraded:
-- Senior Secured Revolving Credit Facility due 2011, to Ba1,
LGD2, 23% from Ba2, LGD2, 29%
-- Senior Secured Term Loan A, to Ba1, LGD2, 23% from Ba2,
LGD2, 29%
-- Senior Secured Term Loan B, to Ba1, LGD2, 23% from Ba2,
LGD2, 29%
-- Senior Unsecured notes due 2013, to B1, LGD4, 68% from B2,
LGD5, 73%
-- Senior Subordinated notes due 2015, to B2, LGD6, 90% from
B3, LGD6, 90%
-- Corporate Family Rating, to Ba3 from B1
-- Probability of Default Rating, to Ba3 from B1
The ratings outlook was changed to stable from positive.
DaVita, Inc., headquartered in El Segundo, California, is an
independent provider of dialysis services in the U.S. for patients
suffering from end-stage renal disease. As of Dec. 31, 2006,
DaVita operated or managed 1,300 outpatient facilities in 42
states, as well as Washington D.C., serving approximately 103,000
patients. Moody's estimates that DaVita had revenue of
approximately $4.7 billion for the twelve months ended
Sept. 30, 2006.
EMERGE INTERACTIVE: Files for Bankruptcy Protection in Florida
--------------------------------------------------------------
eMerge Interactive, Inc., filed for voluntary protection on
Feb. 14, 2007, under Chapter 11 of the U.S. Bankruptcy Code for
the Southern District of Florida, West Palm Beach division.
eMerge and PRIME BioSolutions, LLC, mutually agreed to terminate a
merger agreement between them because adequate financing on
acceptable terms was not available.
In contemplation of the bankruptcy filing, eMerge and The Biegert
Family Irrevocable Trust, dated June 11, 1998, signed a non-
binding letter of intent for the sale of the assets relating
primarily to eMerge's CattleLog, or "Animal Information
Solutions," business to the Biegert Trust. The Biegert Trust is
eMerge's largest stockholder and beneficially owns approximately
18% of the outstanding shares of eMerge common stock. The Biegert
Letter of Intent provides that the purchase price for the
CattleLog business will be a sum necessary to satisfy in full any
and all amounts outstanding, as of the closing date of the sale
transaction, under the $1.5 million principal amount loan from the
Biegert Trust to eMerge.
In contemplation of the bankruptcy filing, it and Chad, Inc.
signed a non-binding letter of intent for the sale of the assets
relating primarily to eMerge's VerifEYE business to Chad. The
Chad Letter of Intent provides that the purchase price for the
VerifEYE business will be $250,000.
By executing the Letters of Intent, eMerge intends to work towards
the preparation of definitive purchase agreements with the Biegert
Trust and Chad to consummate the respective proposed sales
transactions. Consummation of the sales transactions will be
subject to execution of Definitive Purchase Agreements, approval
of the Bankruptcy Court and customary closing conditions.
The consummation of the transactions contemplated by the Biegert
Letter of Intent will be subject to proposed bidding procedures
and a potential auction of the CattleLog assets pursuant to
Section 363 of the United States Bankruptcy Code. eMerge intends
to file a motion with the Bankruptcy Court that will request that
the Bankruptcy Court enter an order establishing bidding
procedures for the sale of the CattleLog assets. In order to
participate in the auction process, each potential bidder in the
auction process must be qualified and submit a bid in the manner
and by the date and time established by the Bankruptcy Court in
the Bidding Procedures Order.
Without being able to complete the proposed merger with PRIME,
eMerge does not have the liquidity to continue pursuing its long-
term business plan. eMerge entered into the Letters of Intent
after exhaustive, but unsuccessful, efforts to pursue other
strategic alternatives and secure commitments for additional
funding to sustain its operations. eMerge's board of directors,
with advice from management and financial and legal advisors,
determined that it is in the best interest of the company, its
stockholders and its creditors to file for protection under the
Bankruptcy Code and to seek an orderly liquidation of its assets
via an auction process supervised by the Bankruptcy Court.
There can be no assurances that eMerge will be able to complete
either of the transactions contemplated by the Letters of Intent
or any other transactions involving the liquidation of the
CattleLog and VerifEYE assets. eMerge expects that if the
transactions contemplated in the Letters of Intent, or alternative
transactions involving the liquidation of the CattleLog and
VerifEYE assets, are completed and eMerge is liquidated, eMerge
will return little or no value to its existing stockholders.
eMerge will continue to operate in the normal course of business
during its Chapter 11 case and will continue payments of its
employees' wages and benefits and meeting its customer-related
obligations.
About eMerge
Headquartered in Sebastian Florida, eMerge Interactive Inc.
(Nasdaq: EMRG) -- http://www.emergeinteractive.com/-- is a
technology company focusing on the agricultural and meat
processing industries. eMerge's products include CattleLog, a
USDA-approved Process Verified Program providing individual-animal
data collection and reporting that enables livestock tracking,
verification and branding; the VerifEYE Carcass Inspection System,
a real-time, optical inspection system that scans beef carcasses
in packing plants; and the Solo handheld inspection unit, a
portable instrument, incorporating the VerifEYE imaging
technology.
EMERGE INTERACTIVE: Case Summary & 19 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: eMerge Interactive, Inc.
fdba eMerge Vision Systems, Inc.
fdba Enhanced Vision Systems, Inc.
10305 - 102nd Terrace
Sebastian, FL 32958
Bankruptcy Case No.: 07-10932
Type of Business: The Debtor provides products and services
focused on food safety technology and livestock
management software.
See http://www.emergeinteractive.com/
Chapter 11 Petition Date: February 14, 2007
Court: Southern District of Florida
Judge: Steven H. Friedman
Debtor's Counsel: Jimmy D. Parrish, Esq.
Latham, Shuker, Barker, Eden & Beaudine, LLP
390 North Orange Avenue, Suite 600
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Debtor's financial condition as of December 31, 2006:
Total Assets: $4,463,300
Total Debts: $2,626,988
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Al H. Gapsch Accrued Vacation $57,793
3410 Holly Spring St. and Severance Pay
Melbourne, FL 32934
Timothy G. Niedecken Accrued Vacation & $51,040
P.O. Box 150479 Severance Pay
Fort Worth, TX 76108
James M. Vessenmeyer Accrued Vacation $44,738
2715 Whistler Street and Severance Pay
West Melbourne, FL 32904
Norman D. Miller Accrued Vacation & $38,622
Severance Pay
AgriCapital Corp. Contingent Fee $37,500
B. Riley & Co. Contingent Fee $37,500
KPMG LLP 2005 Audit Fee $35,000
Shane P. Walter Accrued Vacation & $33,875
Severance Pay
Mary L. Robbins Accrued Vacation & $28,571
Severance Pay
Richard E. Harrison Accrued Vacation & $26,180
Severance Pay
Christine Smith Severance Pay $15,095
Nuvat Engelhardt Accrued Vacation & $19,956
Severance Pay
Jess M. King Accrued Vacation $19,802
and Severance Pay
Dana L. Elliott Accrued Vacation $19,686
and Severance Pay
Pamela D. Gallagher Accrued Vacation & $19,477
Todd E. Richardson Accrued Vacation & $11,595
Severance Pay
Mark H. Wellman Accrued Vacation & $9,386
Severance Pay
Lori Ann Scheffler Accrued Vacation & $6,603
Severance Pay
Gilberto Aguilar, Jr. Accrued Vacation $1,291
Severance Pay
EPIC DATA: Posts CDN$190,000 Net Loss in First Qtr. Ended Dec. 31
-----------------------------------------------------------------
Epic Data International Inc. reported a CDN$190,000 net loss
for the first quarter ended Dec. 31, 2006, compared to a net loss
of CDN$390,000 in the first quarter of fiscal 2006.
For the first quarter ended Dec. 31, 2006, the company reported
revenue of CDN$2.90 million compared to revenue in the previous
year's first quarter of CDN$4.14 million.
The company's contracted sales backlog at quarter end improved to
CDN $6.07 million from an opening position of CDN $5.49 million,
on approximately CDN $3.5 million in new bookings, the majority of
which were won in the later stages of the first quarter; and the
closing unencumbered cash position at Dec. 31, 2006 was
CDN$120,000.
"These results, although considerably short of where we need to
be, are none-the-less showing positive progress. Our operating
expense levels have been reduced significantly and we are entering
our second quarter with a solid contracted sales backlog. It's
now in the hands of our new management team to successfully
execute on the fulfillment of this backlog, while we continue to
build on the sales momentum initiated in the first quarter," said
James Dodds, Epic Data's President and Chief Executive Officer.
Headquartered in British Columbia, Canada, Epic Data International
Inc. (TSX: EKD) -- http://www.epicdata.com/-- has been a leader
in automatic identification and data capture solutions for the
world's most progressive aerospace, automotive, high technology
and heavy machinery manufacturers for over 30 years. The company
increases plant productivity and velocity while identifying the
continuous improvement initiatives vital to winning in today's
competitive manufacturing environments. Epic Data's enterprise
mobility solutions for parking enforcement and route management
increase productivity while improving customer service and worker
safety by connecting mobile personnel to central offices in real
time.
* * *
As reported in the Troubled Company Reporter on Feb. 2, 2007, Epic
Data International Inc.'s stockholders' deficit as of Dec. 31,
2006, stood at $1,929,000, compared to a deficit of $5,344,000 at
Sept. 30, 2006.
EOP OPERATING: Blackstone Deal Cues Moody's to Cut Sr. Debt Rating
------------------------------------------------------------------
Moody's Investors Service downgraded the senior unsecured debt of
EOP Operating Limited Partnership to Ba3, from Baa2, and will
withdraw all of the REIT's ratings.
These rating actions follow the acquisition closing by The
Blackstone Group of EOP on Feb. 9, 2007.
According to Moody's, the rating downgrade reflects the more
aggressive capital strategy that will be employed by The
Blackstone Group. Leverage is expected to rise to almost 80% of
total assets, most of which is expected to be secured.
In addition, EOP advised that $8.1 billion of the $8.4 billion of
bonds have tendered, and the consent solicitation stripped out
substantially all of the restrictive bond covenants that EOP's
debtholders have enjoyed. Moody's does not expect there to be
adequate information for it to monitor EOP going forward which is
why the ratings are being withdrawn.
These ratings were downgraded and will be withdrawn:
* EOP Operating Limited Partnership
-- senior long-term debt to Ba3, from Baa2
-- senior unsecured medium-term notes to Ba3, from Baa2
-- senior debt shelf to Ba3, from Baa2
* Equity Office Properties Trust
-- preferred stock to B2, from Baa3
-- preferred stock shelf to B2, from Baa3
* Spieker Properties, L.P.
-- senior unsecured debt to Ba3, from Baa2
Equity Office Properties Trust, operating through subsidiaries and
affiliates, was the USA's largest publicly held office building
owner and manager, with an office portfolio consisting of whole or
partial interests in 580 buildings. At Sept. 30, 2006, the REIT
reported assets of $25.3 billion and equity of $6.4 billion.
FORD MOTOR: Merrill Lynch Cuts Recommendation on Shares to "Sell"
-----------------------------------------------------------------
Merrill Lynch has lowered its recommendation on shares of Ford
Motor Co. to "sell" from "neutral" because the stock may be
overvalued, The Associated Press reports Tuesday.
Ford may be trading at a price that is higher than appropriate,
AP says, citing Merrill.
According to AP, Merrill auto analyst John Murphy is of the
opinion that newly appointed Ford Chief Executive Alan Mulally is
"making progress," but he is saddled by slumping products and a
decline in large pickup truck sales.
The automaker, Mr. Murphy added, may have difficulty raising money
needed to buy down some of its retiree health-care obligations.
AP relates that Deutsche Bank also upgraded the company's shares
to "buy," citing optimism that the company can win health care
cost savings from the United Auto Workers union this fall.
Lower Sales
Ford disclosed in a press statement that its January 2007 sales
declined 19% compared with a year ago, as a result of a proposed
reduction in sales to daily rental companies.
Sales to daily rental companies were cut by 65%, Ford said.
Commenting on the results, Mark Fields, Ford's President of The
Americas, said, "All of us at the company are focused on
restructuring our business to be profitable at lower volumes and
offering more of the products people want, including more cars and
more crossovers. We are focusing more of our attention on retail
customers and reducing sales to daily rental companies sharply.
The company's customers benefit from this plan because their
vehicles' residual values will improve -- a trend we already are
seeing with our newest products."
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures and distributes automobiles
in 200 markets across six continents. With more than 324,000
employees worldwide, the company's core and affiliated automotive
brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln,
Mazda, Mercury and Volvo. Its automotive-related services include
Ford Motor Credit Company and The Hertz Corporation.
* * *
As reported in the Troubled Company Reporter on Dec. 12, 2006,
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.
As reported in the Troubled Company Reporter on Dec. 7, 2006,
Fitch Ratings downgraded Ford Motor Company's senior unsecured
ratings to 'B-/RR5' from 'B/RR4' due to the increase in size of
both the secured facilities and the senior unsecured convertible
notes being offered.
As reported in the Troubled Company Reporter on Dec. 6, 2006,
Moody's Investors Service assigned a Caa1, LGD4, 62% rating to
Ford Motor Company's $3 billion of senior convertible notes due
2036.
FRASER PAPERS: Weak Performance Prompts S&P's Ratings Downgrade
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Fraser
Papers Inc., including the long-term corporate credit rating, to
'CCC+' from 'B-'.
The outlook is negative.
The downgrade is driven by continued poor financial performance
reflected in Fraser Papers' fourth-quarter 2006 results, coupled
with its disclosure of a definitive agreement to acquire the
operations of Katahdin Paper Company LLC from Brookfield Asset
Management Inc. for $50 million, to be funded with cash and debt.
In addition, the company will pay a royalty to Brookfield
contingent on the generation of positive free cash flow from
Katahdin's super-calendered business. Fraser Papers has been
managing Katahdin's operations for Brookfield under contract and
received a $8 million management fee in 2006.
"Fraser Papers continues to generate negative free cash flow amid
difficult industry conditions," said Standard & Poor's credit
analyst Donald Marleau.
"Also, during the fourth quarter the company implemented
market-related shutdowns of seven weeks at both New Brunswick
sawmills and four weeks at one sawmill in Maine," Mr. Marleau
added.
With limited improvement in lumber prices expected because of the
sharp slowdown in U.S. housing starts, the company's earnings and
cash flow in the next several quarters will continue to rely
heavily on higher prices and cost improvements in its pulp and
paper operations.
The ratings reflect Fraser Papers' weak financial performance
stemming from its below-average cost position, pressure from the
strong Canadian dollar, limited product diversity, exposure to
volatile paper and lumber prices, and some foreign exchange risk.
The company's negative free cash flow, together with the use of
existing cash and additional debt to finance the acquisition of
the Katahdin assets, will consume most of its cash, thereby
further pressuring its liquidity.
The company's proposed acquisition of the Katahdin assets will
increase the company's debt and significantly weaken its
liquidity. The combination of a higher Canadian dollar, weak
lumber prices, and high fiber and energy costs have more than
offset higher pulp and paper prices, and could contribute to
continuing weak near-term earnings and negative cash flow. Fraser
Papers must improve the profitability and cash flow generation of
its core paper assets to ensure its long-term viability.
GATEHOUSE MEDIA: S&P Rates Proposed $960 Mil. Sr. Facilities at B+
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its loan and recovery
ratings to GateHouse Media Operating Inc.'s planned $960 million
senior secured credit facilities. The loan was rated 'B+' with a
recovery rating of '2', indicating the expectation for substantial
recovery of principal in the event of a payment default.
At the same time, Standard & Poor's affirmed its existing ratings
on the company, including the 'B+' corporate credit rating.
The rating outlook is stable.
The new credit facilities will consist of a $40 million revolving
credit facility, a $670 million term loan, and a $250 million
delayed-draw term loan, all maturing in 2014. Proceeds will be
used to refinance existing debt, to fund the planned acquisition
of SureWest Directories, and for future acquisitions.
The 'B+' corporate credit rating on GateHouse Media Operating Co.
is based on the consolidated credit quality of its holding company
parent, GateHouse Media Inc.
"The rating reflects the company's highly leveraged capital
structure as a result of its initial capitalization and growth
through acquisition," said Standard & Poor's credit analyst Peggy
Hwan Hebard.
In addition, GateHouse is expected to pay out a major portion of
its free operating cash flow as dividends. These factors are
offset in part by the company's fairly stable revenues and cash
flow throughout the advertising cycle. This is attributable to
GateHouse's geographic diversity and the fact that its operations
are primarily in non-metropolitan markets where it is the major
source of local news and print advertising. The company also
benefits from healthy operating cash flow margins, modest capital
expenditures, minimal cash income taxes, and no required debt
amortization.
GRAY TELEVISION: Moody's Cuts Ba2 Corporate Family Rating to Ba3
----------------------------------------------------------------
Moody's Investors Service downgraded Gray Television, Inc.'s
corporate family rating to Ba3 from Ba2 due to weaker than
anticipated operating performance and higher capital spending in
2006, which resulted in higher leverage than previously
anticipated.
In a press release dated Nov. 28, 2005, Moody's had indicated that
the Ba2 rating would face negative pressure if adjusted debt to
EBITDA was not at or around 6.0x by the end of 2006, and it now
appears that leverage will not return to that level until 2008, at
the earliest.
In addition, Moody's assigned a Ba3 rating to Gray's new
$100 million Senior Secured Revolving Credit Facility and
$900 million Senior Secured Term Loan B. Proceeds from the
proposed facilities will be used to refinance the company's
existing $700 million Senior Secured Credit Facilities, 9.25%
Senior Subordinated Notes and Series C Preferred Stock.
Ratings on the existing Senior Credit Facilities will be withdrawn
upon completion of the refinancing and ratings on the 9.25% Senior
Subordinated Notes will be withdrawn upon completion of the
redemption of the Notes.
Ratings downgraded:
* Gray Television, Inc.
-- Corporate family rating from Ba2 to Ba3
-- Probability-of-default rating from Ba2 to B1
Ratings assigned:
-- $100 million Secured Revolver, Ba3, LGD3, 34%
-- $900 million Secured Term Loan B, Ba3, LGD3, 34%
Ratings to be withdrawn:
-- Secured Revolver, Ba1, LGD3, 34%
-- Secured Term Loan A, Ba1, LGD3, 34%
-- Secured Term Loan B, Ba1, LGD3, 34%
-- 9 1/4% Senior Subordinated Notes due 2011, B1, LGD5, 87%
The outlook is stable.
Gray Television, Inc.'s Ba3 corporate family rating reflects high
debt to EBITDA leverage of 7.0x for fiscal year ending 2006,
modest scale and its sizeable debt burden relative to free cash
flow.
The rating also incorporates Moody's expectation that over the
intermediate term, management will apply free cash flow to debt
reduction before returning capital to shareholders. The rating
further reflects the increasing business risk associated with the
broadcast television industry as advertising spending gets
diversified over a growing number of media.
Gray's rating is supported by its diverse geographic footprint and
network affiliations, dominant news franchise that helps capture a
significant share of in-market revenues and strategy of operating
stations in university markets or state capitals. The rating is
further supported by the company's concentration of local
advertising revenue and substantial EBITDA margin.
Gray Television, Inc., headquartered in Atlanta, Georgia, is a
television broadcaster that operates in 30 U.S. markets.
GSAA HOME: Moody's Rates Class B3 Certificates at Ba2
-----------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by GSAA Home Equity Trust 2007-1, and ratings
ranging from Aa1 to Ba2 to the mezzanine and subordinate
certificates in the deal.
The securitization is backed by adjustable-rate, Alt-A residential
mortgage loans acquired and originated by Goldman Sachs Mortgage
Company (50.27%), Countrywide Home Loans, Inc. (43.26%), and
various other originators, none of which originated more than 10%
of the mortgage loans. The ratings are based primarily on the
credit quality of the loans and on the protection against credit
losses provided by subordination, overcollateralization, excess
spread, and an interest rate swap agreement.
Moody's expects collateral losses to range from 1.05% to 1.25%.
Avelo Mortgage, LLC and Countrywide Home Loans Servicing LP will
service the mortgage loans underlying the transaction. Wells
Fargo Bank, N.A. will act as master servicer. Moody's has
assigned Wells Fargo Bank N.A. its top servicer quality rating of
SQ1 as a master servicer of residential mortgage loans.
These are the rating actions:
* GSAA Home Equity Trust 2007-1
* Asset-Backed Certificates, Series 2007-1
Class 1A1, Assigned Aaa
Class 1A2, Assigned Aaa
Class 2A1A, Assigned Aaa
Class 2A1B, Assigned Aaa
Class A4A, Assigned Aaa
Class A4B, Assigned Aaa
Class M1, Assigned Aa1
Class M2, Assigned Aa2
Class M3, Assigned Aa3
Class M4, Assigned A1
Class M5, Assigned A2
Class M6, Assigned A3
Class B1, Assigned Baa1
Class B2, Assigned Baa2
Class B3, Assigned Ba2
GSMPS MORTGAGE: Losses Cue Moody's Ratings Review, Eyes Downgrade
-----------------------------------------------------------------
Moody's Investors Service has placed under review for possible
downgrade three subordinate certificates from the GSMPS Mortgage
Loan Trust 2005-LT1 securitization.
The transaction consists of the securitization of FHA insured and
VA guaranteed nonperforming loans virtually all of which were
repurchased from GNMA pools. The insurance covers a large percent
of any losses incurred as a result of borrower defaults.
However, recent losses have led to a severe erosion of
overcollateralization and as a result the current levels of credit
enhancement are too low to support existing ratings.
These are the rating actions:
* GSMPS Mortgage Loan Trust
-- Class B1, current rating Baa2, under review for possible
downgrade;
-- Class B2, current rating B1, under review for possible
downgrade; and
-- Class B3, current rating Caa3, under review for possible
downgrade.
HOME PRODUCTS: Files Schedules of Assets & Liabilities
------------------------------------------------------
Home Products International Inc. and its debtor-affiliate Home
Products International-North America delivered their schedules of
assets and liabilities to the U.S. Bankruptcy Court for the
District of Delaware.
Home Products reports it doesn't have any personal property while
its real property assets are unknown. The Debtor scheduled an
unsecured non-priority claim of HSBC, as agent for certain
bondholders, for $122,217,971. The Debtor also identified General
Electric Capital Corporation, Bank of America, MJR/NLR Gift
Trusts, and Plexxar Joint Venture as creditors holding unsecured
non-priority claims, but the claim amounts are unknown.
Home Products International-North America discloses:
Assets Liabilities
------ -----------
A. Real Property $0
B. Personal Property $99,448,142
C. Property Claimed as Exempt
D. Secured Claims $40,000,000
E. Unsecured Priority Claims $612,000
F. Unsecured Non-priority Claims $143,970,707
----------- ------------
Total $99,448,142 $184,582,707
Headquartered in Chicago, Illinois, Home Products International,
Inc. -- http://www.hpii.com/-- designs, manufactures, and markets
ironing boards, covers, and other high-quality, non-electric
consumer houseware products. The Debtor's product lines include
laundry management products, bath and shower organizers, hooks,
hangers, home and closet organizers, and food storage containers.
Their products are sold under the HOMZ brand name, and are
distributed to hotels, discounters, and other retailers such as
Wal-Mart, Kmart, Sears, Home Depot, and Lowe's.
The company and its affiliate, Home Products International-North
America, Inc., filed for chapter 11 protection on Dec. 20, 2006
(Bankr. D. Del. Case Nos. 06-11457 and 06-11458). Ronald
Barliant, Esq., and Kathryn A. Pamenter, Esq., at Goldberg Kohn,
Bell, Black, Rosenbloom & Moritz, Ltd., and Mark D. Collins, Esq.,
and Michael J. Merchant, Esq., at Richards, Layton & Finger P.A.
represent the Debtors. When the Debtors filed for protection from
their creditors, they listed estimated assets between $1 million
and $100 million and debts of more than $100 million. The
Debtors' exclusive period to file a chapter 11 plan of
reorganization expires on April 18, 2007.
HOME PRODUCTS: Hires Morris Anderson as Financial Advisor
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave Home
Products International Inc. and Home Products International-North
America Inc. permission to employ Morris Anderson & Associates
Ltd. as their financial advisors, nunc pro tunc to Dec. 20, 2006.
Morris Anderson will:
(a) develop budgets, cash flows, projections, and other
financial information;
(b) assist with inventory analysis;
(c) analyze ongoing product line and customer profitability;
(d) analyze equipment scheduling and utilization;
(e) assist with the preparation of a business plan; and
(f) assist the Debtors in their chapter 11 cases.
The professionals who will be directly involved in the engagement
and their hourly rates are:
Name Designation Hourly Rate
---- ----------- ---------
Howard Korenthal Managing Director $350
Steven Courtrade Consultant $300
Richard Schluter Consultant $300
Ray Przytula Consultant $190
The Debtors paid Morris Anderson a $225,000 advance payment
retainer.
Mr. Korenthal assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Home Products
Headquartered in Chicago, Illinois, Home Products International,
Inc. -- http://www.hpii.com/-- designs, manufactures, and markets
ironing boards, covers, and other high-quality, non-electric
consumer houseware products. The Debtor's product lines include
laundry management products, bath and shower organizers, hooks,
hangers, home and closet organizers, and food storage containers.
Their products are sold under the HOMZ brand name, and are
distributed to hotels, discounters, and other retailers such as
Wal-Mart, Kmart, Sears, Home Depot, and Lowe's.
The company and its affiliate, Home Products International-North
America, Inc., filed for chapter 11 protection on Dec. 20, 2006
(Bankr. D. Del. Case Nos. 06-11457 and 06-11458). Ronald
Barliant, Esq., and Kathryn A. Pamenter, Esq., at Goldberg Kohn,
Bell, Black, Rosenbloom & Moritz, Ltd., and Mark D. Collins, Esq.,
and Michael J. Merchant, Esq., at Richards, Layton & Finger P.A.
represent the Debtors. When the Debtors filed for protection from
their creditors, they listed estimated assets between $1 million
and $100 million and debts of more than $100 million. The
Debtors' exclusive period to file a chapter 11 plan of
reorganization expires on April 18, 2007.
HUGHES COMMS: Unit Inks $115 Mil. Loan Facility with Bear Stearns
-----------------------------------------------------------------
Hughes Network Systems LLC, wholly owned subsidiary of Hughes
Communications Inc., has entered into a commitment letter with
Bear Stearns Corporate Lending Inc., as the initial lender, Bear
Stearns & Co. Inc., as lead arranger and bookrunning manager, and
BSCL, as administrative agent.
Pursuant to the commitment letter, Bear Stearns Corporate agreed
to provide the company with debt financing in the aggregate
principal amount of $115 million in the form of an unsecured
senior term loan facility.
The entry into the Loan Facility and financing thereunder
is subject to the satisfaction of certain customary conditions.
The commitment letter will terminate on March 31, 2007, unless
terminated earlier by the company.
Pursuant to the commitment letter, the Loan Facility will be
guaranteed on a senior unsecured basis by all existing and future
subsidiaries of the Company that guarantee the Company's existing
9-1/2% Senior Notes due 2014 and the Company's existing
$50 million senior secured revolving credit facility.
HNS Finance Corp., a wholly owned subsidiary of the company and
co-issuer of the Senior Notes, will be a co-borrower under the
loan facility. The interest rate on the loan facility is expected
to be, at the option of the company, the Adjusted LIBO Rate plus
2.75% plus 1.75%.
The loan facility will be subject to certain mandatory and
optional prepayment provisions and contain negative covenants
and events of default, in each case, substantially similar to
those provisions contained in the indenture governing the Senior
Notes. The maturity date of the loan facility will be April 15,
2014. The company plans to use the net proceeds from the loan
facility to partially fund the purchase and construction of
a satellite and for general corporate purposes.
The company expects that it will enter into the loan facility on
or about Feb. 28, 2007. However, there can be no assurance that
the company will enter into the loan facility.
Headquartered in Germantown, Maryland, Hughes Network Systems
LLC (NASDAQ:HUGH) -- http://www.hughes.com/-- provides broadband
satellite networks and services for large enterprises,
governments, small businesses, and consumers. Hughes offers
complete turnkey solutions, including program management,
installation, training, maintenance and support-for professional
and rapid deployment anywhere, worldwide. The company owns and
operates a global base of HughesNet shared hub services throughout
the United States, Brazil, China, Europe, and India. In Europe,
Hughes maintains operations facilities and/or sales offices in
Germany, U.K., Italy, Czech Republic, and Russia.
* * *
Moody's Investors Service assigned a B1 rating to Hughes Network
Systems LLC's proposed $115 million senior unsecured term loan,
due 2014.
In addition, the ratings agency also affirmed the B1 corporate
family rating, the B1 rating on the existing $450 million senior
notes due 2014 and the Ba1 rating on the $50 million senior
secured revolving credit facility. The proceeds of the new term
loan will be used primarily to fund capital expenditures and for
general corporate purposes.
INFOUSA INC: Board Member Martin Kahn Resigns Effective February 2
------------------------------------------------------------------
Martin F. Kahn has resigned from infoUSA Inc.'s Board of Directors
effective Feb. 2, 2007. He had been a board member since October
2004.
Mr. Kahn has taken a new position as chief executive officer of
ProQuest CSA. The terms of his employment prohibit him from
serving on the board of any outside public company.
At a board meeting on Feb. 2, 2007, the board accepted Mr. Kahn's
resignation, fixed the current number of directors at eight, and
passed a resolution expressing the appreciation of the company for
Mr. Kahn's years of service.
"We are sorry to lose Marty as a director, and thank him for
serving so well," infoUSA Founder, Chairman, and Chief Executive
Officer Vin Gupta said. "We wish him the very best in his new
position."
Headquartered in Omaha, Nebraska, infoUSA Inc. (NASDAQ: IUSA) --
http://www.infoUSA.com/-- provides business and consumer
information products, database marketing services, data processing
services and sales and marketing solutions. Founded in 1972,
infoUSA owns a proprietary database of 250 million consumers and
14 million businesses under one roof.
* * *
As reported in the Troubled Company Reporter on Nov. 21, 2006,
Moody's affirmed the Ba2 rating on $275 million in first lien
credit facilities of infoUSA Inc. Concurrently, Moody's has
affirmed the corporate family rating of infoUSA at Ba3. Moody's
also said the outlook is stable.
INFOUSA INC: Earns $8 Million in 2006 Fourth Quarter
----------------------------------------------------
infoUSA Inc. reported net income of $8 million for the fourth
quarter ended Dec. 31, 2006, compared with $11 million of net
income for the same period in 2005.
infoUSA Founder, Chairman, and Chief Executive Officer Vin Gupta
stated, "2006 was a great year for infoUSA. We showed organic
growth during the year. Today, infoUSA is a full service provider
to the sales and marketing departments of corporations and small
businesses.
"We offer proprietary databases and services from these databases;
for example, sales leads, mailing lists, and unlimited access on-
line. We offer direct marketing services, database marketing
services and e-mail marketing services all under one roof.
"With the acquisition of Opinion Research(R), we were also able to
offer marketing research services that include customer surveys,
product surveys, and employee surveys to the corporate and public
sector.
"infoUSA is blessed with a world class management team for leading
this successful transition. Our entire workforce at the company
is better positioned than ever to create additional value for all
of its shareholders. We look forward to even greater success in
2007."
Fourth Quarter 2006 Highlights
* infoUSA continued to build on its successful subscription
model, which is now generating a sustainable and predictable
revenue stream. The company added 6,200 subscribers to
Salesgenie.com(R), Credit.net(R), SalesLeadsUSA.info, and
infoUSA's other subscription products during the quarter.
infoUSA now has approximately 54,000 total subscribers with
an annualized revenue value of over $98 million. The
cancellation rates on subscription products remain stable at
approximately 19%.
* infoUSA completed its previously announced acquisition of
Opinion Research Corporation. It was effective Dec. 4, 2006.
This transaction is a continuation of infoUSA's strategic
plan to leverage its existing capabilities and be a full
service provider to the sales and marketing departments of
corporations worldwide.
Financial Highlights
During the fourth quarter of 2006, infoUSA delivered record
revenues of $125.1 million as compared with $98.8 million for the
same period in 2005. This strong fourth quarter helped infoUSA
achieve record full year revenue of $434.9 million, an increase of
13% over revenues of $383.2 million in fiscal 2005.
infoUSA's fourth quarter operating income increased to
$21.6 million from $15.7 million in the fourth quarter of 2005.
For the full year, infoUSA's operating income increased to
$64.6 million from $58.3 million in 2005.
EBITDA for the fourth quarter was $29.2 million versus
$23.0 million in the fourth quarter of 2005. EBITDA for full year
2006 was $94.0 million as compared to $91.9 million in 2005.
Segment Revenue
* Revenue for the Donnelley Group in the fourth quarter was
$71.5 million compared with $63.8 million for the same period
last year. For the fiscal year 2006, revenue was
$268.4 million as compared with $240.3 million for the same
period last year.
* Revenue for the infoUSA Group in the fourth quarter was
$39 million compared with $35 million for the same period
last year. Revenue for the fiscal year 2006 was
$151.9 million as compared with $143.3 million for the same
period last year.
* Revenue for Opinion Research, acquired Dec. 4, 2006, was
$14.6 million since the date of acquisition.
New Reporting Segments
In 2007, infoUSA is reorganizing its segments both for operational
and reporting purposes. In fiscal 2007, the company will report
results in three segments: Data Group, Services Group, and
Research Group.
The Donnelley Group will be reorganized and will be named
"Services Group" beginning in January 2007. This group will be
lead by Ed Mallin and will consist of Yesmail, Catalog Vision, and
the List Brokerage and List Management divisions.
The "Data Group" will be comprised of Donnelley Marketing, which
will now be known as infoUSA National Accounts, along with
OneSource, Database License, and the former infoUSA Group (Small
Business Group). The Data Group will be lead by Monica Messer.
infoUSA believes that by organizing all of its businesses that
sell proprietary content into a single segment, it can more
effectively deploy its sales and marketing resources. The
reorganization is also expected to create better opportunities for
cross selling proprietary databases under one brand name.
The Research Group will be comprised of the recently acquired
operations of Opinion Research Corporation, whose operations will
be divided into the Corporate Market Research division to be known
as Opinion Research, and the Government Research division to be
known as Macro International. Gerard Miodus will lead the
Corporate Market Research division worldwide, and Greg Mahnke will
lead the Government Research division called Macro International.
Operating Highlights
A. Services Group
1. List Brokerage and List Management
This division operates under the Walter Karl(R), Edith
Roman(R), Millard Group(R), Mokrynskidirect, and Rubin
Response brands, based in New York, New Jersey, New
Hampshire, and Illinois. Rubin Response was acquired in
November of 2006, expanding this group's expertise in
B-to-B high tech and consumer marketing. In the fourth
quarter, the Millard Group launched a new product called
InterACT, targeting the consumer cooperative database
market. While the traditional direct mail business is
stabilizing due to online advertising and e-mail marketing,
infoUSA is creating value by leveraging its e-mail marketing
expertise, proprietary data, and data processing services.
All of its list brokerage and management companies are
offering multi-channel marketing to their customers.
2. Catalog Vision(R) and Triplex(R)
Catalog Vision is the company's Data Processing and Direct
Marketing division dedicated to Direct Mail Catalog
Retailers and non-profit and charitable organizations. This
division, based in Marshfield, Wis., has retained nearly
100% of existing clients and adding new customers due to its
cutting edge technology and white glove customer service.
In addition, Catalog Vision is expanding its modeling and
analytics group to meet the growing demands of its client
base. Also, under the leadership of Dan Gust, the main
operations for Catalog Vision's Triplex division have been
moved to Marshfield, greatly reducing the cost structure and
improving the profitability of the business. Triplex is
expanding its sales office in Washington, D.C., to better
serve many of its customers in that region. Triplex has been
able to combine direct marketing with e-mail marketing to
offer a total sales solution to the non-profit
organizations.
3. Yesmail(R) - E-mail Technology Company
Yesmail, under the leadership of Michael Hilts and
Tim Price, based in the Silicon Valley and Portland, Ore.,
is one of the largest and best e-mail technology companies.
Yesmail is comprised of six e-mail companies purchased
during the past several years. infoUSA recently announced
its sixth e-mail technology acquisition, Digital
Connexxions. Based in Toronto, it will continue to build on
Yesmail's position as one of the dominant players in the
e-mail industry. Yesmail has expanded into the UK market by
opening a sales office in London and has plans for future
international expansion in Europe and the Far East.
In 2007, Yesmail intends to grow its customer base via its
expanded sales force, by investing in its leading technology
platform and by taking advantage of cross-selling
opportunities with other divisions throughout the company.
In the fourth quarter, Yesmail completed several key
technology milestones and is currently offering new features
and functions to its client base for both its full-service
and self-service product line. This investment in technology
will continue with new releases scheduled for 2007.
B. Data Group
The Data Group will be comprised of Donnelley Marketing, which
will now be known as infoUSA National Accounts, OneSource,
Database License Group, and the Small and Medium Sized Business
Group. The Data Group will be lead by Monica Messer who has
been with infoUSA for 23 years and she has been the leading
force in most of our database, technology and product
initiatives.
Subscription revenue, which includes revenue from
Salesgenie.com, SalesLeadsUSA.info and Credit.net, led to
growth in the Data Group, despite a drop in revenue from Polk
Directories. The company attributes this growth to its highly
accurate database, delivery technology, and successful
advertising campaigns. The advertising campaigns include
e-mail, print, TV, radio, direct mail, and search word
advertising, as well as the use of white glove client services
group.
1. Streamlined Pricing of Subscription Products
The company has streamlined the price of its subscription
products. SalesGenie.com offers full access to 12 databases
including mapping, driving directions, CRM, etc.
SalesGenie.com will also have unlimited view, unlimited
cherry picking, and downloading for a fixed price of
$180 per month for the first user. Subsequent discounts
will be given for multiple users.
The company is also offering a scaled-down version called
SalesGenie.com/Lite for sales people who cannot afford
$180 per month. This product will offer six databases,
unlimited view and be priced at $90 per month.
2. infoUSA Database in In-Car Navigation
In-car navigation has become a necessity for many motorists.
Many new cars have either in-car navigation or mobile
devices that offer in-car navigation. The company believes
it is a leading provider of the most accurate business
databases and points of interest information to these
devices. In order to further enhance the accuracy and the
comprehensiveness, it is improving the quality of its points
of interest (P.O.I.) database, such as stadiums, golf
courses, parks, etc. It is the objective of infoUSA to be a
leader in every market, which it serves.
3. Product Design, Development, and Technology
Having a proprietary database is not enough. The company
designs products for its users. The company wants its
customers to say "Wow, this is fantastic. I can be more
efficient and make more money." Its Design and Development
and Technology Teams are totally focused on the needs of
customers. Personnel will get feedback from customers and
create services to meet their needs.
Throughout 2007, the company plans to add additional features to
its subscription products it believes will create more value for
its customers by offering a "one-stop-shop" application for all of
its direct marketing, sales prospecting needs, and credit needs.
It plans to add a new tool to SalesGenie.com called "Customer
Analyzer". This will allow users to upload their customer files
and profile them to find additional prospects that look like their
best customers. It will also allow customer data to be suppressed
from future prospect campaigns. The company also plans to launch
Salesgenielounge.com, a website designed to offer sales and
marketing tips, education, and collaboration with other sales
people on-line.
Additionally in 2007, the company plans to launch a new feature on
its websites that will allow businesses to create and upload their
own two-minute commercial. The businesses can broadcast the
commercial within many of its website applications. It also plans
to extend the services of Salesgenie.com to include: e-mail
retention marketing tools, easier integration into third party CRM
tools, and mobile viewing, and searching capability. Additional
investments will be made in providing its customers with more
robust mapping capabilities to map prospects and customers.
The company has also incorporated the ability to collect real-time
customer feedback about its data and products. This allows the
company to quickly verify the information and continue to improve
the overall quality of all of its products.
Its product plans also include significant improvements to its
ability to search and find people and information within any of
its databases. Whether customers are looking for persons at home
or at their business, they will be able to find them within one
second.
Polk City Directories(R) and infoUSA City Directories(R)
subscription-based websites are successfully transitioning print
directory customers to an online subscription product, which
includes unlimited sales leads and mailing labels that includes
SalesGenie.com/Lite. Polk City Directories has gone through a
complete overhaul and reengineering. The expensive field sales
force has been entirely replaced by a call center sales force in
Livonia, Mich.
infoUSA National Accounts
Formerly Donnelley Marketing(R)
In December 2006, infoUSA announced that Rakesh Gupta will lead
the infoUSA National Accounts Group. The company plans to
consolidate this operation in Omaha by the end of 2007 to take
advantage of its database and technology capabilities centralized
in the corporate headquarters. This move will ensure that
customers are placed with the appropriate sales team within
infoUSA to reduce channel conflict, better client service, and
increase customer satisfaction.
OneSource(R) - Global Business Database Products
Beginning in 2007, OneSource will be part of the newly formed Data
Group taking advantage of consolidated database & marketing
expertise and maximizing cross-selling opportunities. infoUSA has
increased its advertising and marketing effort to create more
awareness of the OneSource(R) brand. The OneSource(R)
International Database will be fully merged and integrated with
all of infoUSA's other databases and will be available through the
company's other subscription products. OneSource has been
successful in attracting small and midsize companies and has
increased its number of subscribers in this marketplace.
OneSource(R) is expanding its presence in the UK, Europe, and the
Asia-Pacific region. In September, OneSource(R) was a co-sponsor
of the Clinton Global Initiative in New York, a very effective
place to network with global leaders and global corporate CEO's.
OneSource(R) was also recently a sponsor of the World Business
Forum in New York.
Database License Group
infoUSA's database license division provides business and consumer
databases to Value Added Resellers for incorporation into a
product or service for use by their customers.
The company believes infoUSA is the leading provider of
proprietary business databases to the online yellow pages and
local search industries. The top five search engines -- Yahoo,
Microsoft, AOL, Google, and infoSpace -- that support 97% of all
U.S. searches use infoUSA data to power their local search and
directory offerings due to its superior quality.
FY 2007 Guidance
1. 2007 revenue to be in the range of $620 million to
$630 million.
2. EBITDA to be in the range of $118 million to $125 million.
3. Earnings per share to be in the range of $0.68 per share to
$0.75 per share.
About infoUSA
Headquartered in Omaha, Nebraska, infoUSA Inc. (NASDAQ: IUSA) --
http://www.infoUSA.com/-- provides business and consumer
information products, database marketing services, data processing
services and sales and marketing solutions. Founded in 1972,
infoUSA owns a proprietary database of 250 million consumers and
14 million businesses under one roof.
* * *
As reported in the Troubled Company Reporter on Nov. 21, 2006,
Moody's affirmed the Ba2 rating on $275 million in first lien
credit facilities of infoUSA Inc. Concurrently, Moody's has
affirmed the corporate family rating of infoUSA at Ba3. Moody's
also said the outlook is stable.
JARDEN CORPORATION: Plans $100MM Sr. Subordinated Notes Offering
----------------------------------------------------------------
Jarden Corp. intends to offer $100 million aggregate principal
amount of its 7-1/2% Senior Subordinated Notes due 2017.
The offering is being made pursuant to the company's effective
shelf registration statement filed with the Securities and
Exchange Commission on Feb. 2, 2007.
The company intends to use the net proceeds of the offering for
general corporate purposes, which may include the repayment of
debt, the funding of capital expenditures and potential
acquisitions.
Lehman Brothers Inc. will act as sole book-running manager.
When available, a prospectus supplement relating to this proposed
offering may be obtained from:
Lehman Brothers Inc.
High Yield Capital Markets, 4th Floor
745 Seventh Avenue
New York, NY 10019
Jarden Corporation (NYSE: JAH) -- http://www.jarden.com/-- is
a leading manufacturer and distributor of niche consumer products
used in and around the home. The company's primary segment
include Consumer Solutions, Branded Consumables, and Outdoor.
Headquartered in Rye, New York, the company reported consolidated
net sales of approximately $3.85 billion for the 12 month period
ending Dec. 31, 2006.
* * *
As reported in the Troubled Company Reporter on Feb. 2, 2007,
Standard & Poor's Ratings Services affirmed it B+ corporate credit
rating on Jarden Corp.
As reported in the Troubled Company Reporter on Jan. 31, 2007,
Moody's Investors Service affirmed its B1 corporate family ratings
for Jarden Corporation and assigned a B3 rating and LGD5, 86% loss
given default assessment to the company's proposed $400 million
subordinated note issue.
KARA AT FREEHOLD: Case Summary & 117 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Kara at Freehold LLC
197 Route 18 South, Suite 235S
East Brunswick, NJ 08816
Bankruptcy Case No.: 07-11924
Debtor-affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Summerfield Estates by Kara, LLC 07-11928
Kara at Orchard Meadows, LLC 07-11932
Limerick Estates by Kara, LLC 07-11937
Kara at Farrington Ridge LLC 07-11939
Forest Edge Estates by Kara, LLC 07-11941
Type of Business: The Debtors are affiliates of Kara Homes, Inc.
Kara Homes builds single-family homes,
condominiums, townhomes, and active-adult
communities. Kara Homes filed for chapter 11
protection on Oct. 5, 2006 (Bankr. D. N.J.
Case No. 06-19626).
Twenty five Kara Homes affiliates filed their
respective voluntary chapter 11 petitions
between the period of Oct. 9, 2006 and Feb. 2,
2007.
Chapter 11 Petition Date: February 13, 2007
Court: District of New Jersey (Trenton)
Debtors' Counsel: David L. Bruck, Esq.
Greenbaum, Rowe, Smith, et al.
P.O. Box 5600
Woodbridge, NJ 07095
Tel: (732) 549-5600
Fax: (732) 549-1881
Total Assets Total Debts
------------ -----------
Kara at Freehold LLC $46,234 $896,876
Summerfield Estates $52,512 $215,625
by Kara, LLC
Kara at Orchard $26,101 $1,250,497
Meadows, LLC
Limerick Estates by $55,708 $416,030
Kara, LLC
Kara at Farrington $29,653 $6,064,386
Ridge LLC
Forest Edge Estates $0 $716,309
by Kara, LLC
A. Kara at Freehold LLC's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Teresa Cueva Deposit $191,853
39 Thomas Terrace
Wayne, NJ 07470
A-1 Bracket $21,832
145 West Philadelphia Avenue
Morrisville, PA 19067
Air Management Heating and Air Real Estate $18,160
30 Rachel Terrace
Piscataway, NJ 08854
Americas Servicing Co. $10,808
Jocama Construction Corp. $9,131
Quality Insulation, LLC $7,054
Marlboro Lawn Inc. $6,250
Manzo-Maroba Construction $4,085
All County Aluminum Inc. $3,025
Township of Freehold $3,000
Nassau Construction Co. Inc. $2,400
Home Remodeling Concepts $2,130
Sakoutis Brothers Disposal Real Estate $2,060
Michael J. Wright Real Estate $1,960
Bailey Square Janitorial Inc. $1,900
Robert W. King Company $1,684
Tile It, Inc. $1,500
National Waterproofing Inc. $1,403
Keystone/Maxx $1,029
B. Summerfield Estates by Kara, LLC's 19 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Perez, Erica and Samuel Deposit $50,000
1177 Beach Lane
Manahawkin, NJ 08050
Sunrise Concrete Company $33,080
P.O. Box 435
911 Millcreek Road
Rushland, PA 18956
Michael J. Wright Real Estate $38,235
Construction Co., Inc.
16 Madison Avenue
Toms River, NJ 08753
ADE, Inc. $14,762
Strober Building Supply Truss $10,178
East Lake Interiors LLC $8,008
Browning Landscape $7,699
All County Aluminum Inc. $7,332
R&T Contractors $6,750
Green Thumb Gardens $6,440
C&R Plumbing & Heating $6,235
MGS Corp. $5,615
Century Kitchens, Inc. $3,416
Strober Building Supply Inc. $2,909
Lou's Electric $2,538
Woodhaven Lumber & Millwork $2,432
Top Coat Paving, Inc. $2,070
Bailey Square Janitorial Inc. $1,740
East Coast Site Work $945
C. Kara at Orchard Meadows, LLC's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Behar, Michael and Arlene Deposit $122,985
17 Gilroy Street
Staten Island, NY 10309
Township of Manalapan $31,287
120 Route 522 & Taylor Mills Road
Englishtown, NJ 07726
Northern Source $22,657
132 West 31st Street
New York, NY 10001
East Lake Interiors LLC $12,210
A-1 Bracket $7,000
Silva Guard, Inc. $6,498
Michael J. Wright Real Estate $2,600
Construction Co., Inc.
Willis Construction Services $2,460
Sakoutis Brothers Disposal Real Estate $3,369
Home Remodeling Concepts $1,420
East Coast Site Work $1,097
All County Aluminum Inc. $1,000
First Choice Construction $990
C&L Sweeper Services $974
Just Landscaping Inc. $875
Bailey Square Janitorial Inc. $741
J. Manzo Recycling Co. $463
BP Associates $445
Johnny on the Spot $417
D. Limerick Estates by Kara, LLC's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Live Oak Landscaping $40,519
Contractors
dba April Showers Sprinklers
2 Lakeview Avenue
Piscataway, NJ 08854-2700
Marlboro Lawn Inc. $19,495
P.O. Box 122
Marlboro, NJ 07746
John S. Truhan Consulting Real Estate $12,000
Engineers
P.O. Box K
Manasquan, NJ 08736
Sunrise Concrete Company $10,197
Caruso Excavating Co. $8,808
Michael J. Wright $7,825
Construction Co., Inc.
April Showers Sprinklers $7,040
Blue Line Drywall & Insulation $6,550
John S. Truhan $5,997
Consulting Engineers
Clem's Ornamental Ironworks $4,620
Arisokraft $4,565
Middlesex Water Co. $4,190
Coggins Waste Management $3,769
Republic Services - NJ
Carl's Fencing $3,630
T.C. & Associates, Inc. $2,934
Bailey Square Janitorial Inc. $2,733
Midco Waste Systems $2,432
Integrated Home Technologies Real Estate $2,375
Advanced Coring Cutting Corp. $2,258
Home Depot/GECF $1,419
E. Kara at Farrington Ridge LLC's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
ICS LLC $25,449
P.O. Box 363
Monmouth Junction, NJ 08852
Flemington Department Store $14,041
151 Route 31
Flemington, NJ 08822
Diaz, David and Santiago Lillian $5,000
[no address provided]
Home Remodeling Concepts $4,654
Northeast Roof Maintenance $3,246
April Showers Sprinklers $2,449
BP Associates $2,274
T.C. & Associates, Inc. $1,952
Maser Consulting $1,547
Township of Old Bridge $1,500
Bailey Square Janitorial Inc. $652
GE Cap Modular Space $380
Sunrise Concrete Company $320
Strober Building Supply, Inc. $317
National Waterproofing Inc. $250
Michael J. Wright $200
Construction Co., Inc.
Garcia Associates $157
Caruso Excavating Co. Unknown
Farrington Ridge Unknown
Shoreline Grading, Inc. Unknown
F. Forest Edge Estates by Kara, LLC's 20 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Doyle, Steven and Kathleen Deposit $120,901
160 Barracuda Road
Manahawkin, NJ 08050
Sunrise Concrete Company $43,809
P.O. Box 435
911 Millcreek Road
Rushland, PA 18956
A-1 Bracket $41,471
145 West Philadelphia Avenue
Morrisville, PA 19067
Woodhaven Lumber & Millwork $34,384
Strober Building Supply, Inc. Real Estate $22,981
Michael J. Wright Real Estate $18,149
Construction Co., Inc.
Century Kitchens, Inc. Real Estate $14,137
All County Aluminum, Inc. $14,069
Home Remodeling Concepts $13,793
MAC Electrical Contracts Real Estate $10,391
Levitt, Dorian and Deposit $10,000
Evans and Sean
Strober Building Supply, Inc. Real Estate $9,247
Tile It, Inc. $7,769
Vintage $5,783
RWZ Inc. Stairs & Rails $5,771
Lou's Electric $3,673
R&T Contractors $3,125
C&R Plumbing & Heating $3,105
Township of Stafford $1,763
Tax Collector
Environmental Waste $1,625
Minimization
LEAR CORP: Shareholder to Vote Against American Real's Buyout Bid
-----------------------------------------------------------------
If the current proposal by Carl Icahn's American Real Estate
Partners L.P. to purchase Lear Corp. for $36 per share is put to a
shareholder vote, Evercore Asset Management LLC intends to vote
against the transaction.
Two Key Objections
First, EAM believes the current offer price does not fairly
reflect the value of Lear, as Lear management has taken a
series of actions in recent months designed to generate
increased value for shareholders. These include the:
* Refinancing of the company's long-term debt;
* Divestiture of the company's European interiors business;
* Planned joint venture for the U.S. interiors business; and
* Ongoing restructuring of the core seating business.
EAM believes Lear's management should be commended for these
actions, as well as others being contemplated, and believes that
over time they have the potential to restore to Lear sustainable
earnings in excess of $4 per share.
"This is a level of earnings that is less than what Lear earned
only two years ago and, indeed, less than what it has earned
throughout most of this decade," Greg Sawers, Chief Executive
Officer of EAM, said. "Against that type of earnings power, a
price of $36 per share is simply unreasonable and we therefore
strongly oppose the proposed transaction with Mr. Icahn."
Second, EAM recommends that to the extent Lear wants to put itself
up for sale, it should do so through a simple, open and
conventional auction process. EAM believes Lear has effectively
handicapped the process in favor of Mr. Icahn, as the "go shop"
clause of the current agreement permits Lear and American Real
Estate Partners to commence deal closing preparations immediately,
before the existence of any other bids can even be determined.
Moreover, the clause expires in 45 days, creating a significant
time hurdle for other parties to adequately assess their interest.
Contrast this with the fact that Mr. Icahn had already been
working with Lear management for several months before making his
bid. An added impediment to the emergence of a competitive bid is
the fact that Lear's agreement includes a break-up fee of up to
$85 million in addition to up to $15 million in expense
reimbursements.
While EAM is a relatively small shareholder of Lear, it takes
seriously its fiduciary obligations to its clients. In that
spirit, it cannot support the proposed transaction.
As reported in the Troubled Company Reporter on Feb. 12, 2007,
Lear and American Real Estate Partners entered into an agreement
for Lear to be acquired by AREP, in a transaction valued at
approximately $5.3 billion, including the assumption of debt.
Under the terms of the agreement, Lear shareholders would receive
$36.00 per share in cash. Closing is expected to occur by the end
of the second quarter of 2007.
Under the terms of the agreement, Lear may solicit alternative
proposals from third parties for a period of 45 days from the
execution of the agreement and intends to consider any such
proposals with the assistance of its independent advisors. In
addition, Lear may, at any time, subject to the terms of the
merger agreement, respond to unsolicited proposals. If Lear
accepts a superior proposal, a break-up fee would be payable to
AREP.
"Following a very thorough review of the proposed transaction, our
Board unanimously concluded that the AREP offer was in the best
interests of Lear's shareholders," Bob Rossiter, Lear's chairman
and chief executive officer, commented. "We believe that the
transaction price, which represents a multiple of about 9x our
forecasted 2007 core operating earnings -- excluding the Interior
business, provides shareholders with significant value.
Furthermore, we intend to solicit other offers to ensure that
value is maximized for all of our shareholders."
"Lear is an excellent company with a strong management team in
place," said Carl Icahn. "We look forward to working with Lear's
team to improve its long-term competitiveness, capitalize on
growth opportunities globally and to build an even stronger and
more valuable company in the future."
In connection with the transaction, J.P. Morgan Securities Inc.
served as a financial advisor and Winston & Strawn, LLP served as
legal counsel to a Special Committee of Lear's Board of Directors.
Bank of America provided American Real Estate Partners, L.P. with
debt financing commitments for this transaction.
The agreement is subject to the affirmative vote of the holders of
a majority of the outstanding shares of Lear common stock,
regulatory filings and approvals and other customary closing
conditions. Upon the closing of the transaction, shares of Lear
common stock will no longer be listed on the New York Stock
Exchange or publicly-traded.
About Evercore Asset Management
Evercore Asset Management, LLC, is an institutional investment
management firm that makes high conviction value investments in
small- and mid-cap companies. EAM was established in late 2005
when four longtime colleagues and value investors, with working
relationships that span two decades, formed an alliance with
Evercore Partners -- a leading financial services boutique -- to
create a value-based asset management organization.
About American Real Estate
Headquartered in New York City, American Real Estate Partners, LP
(NYSE:ACP) -- http://www.arep.com/-- a master limited
partnership, is a diversified holding company engaged in a variety
of businesses. The company's businesses currently include gaming,
oil and gas exploration and production, real estate and home
fashion. The company is in the process of divesting its Oil and
Gas operating unit and their Atlantic City gaming property.
The company owns a 99% limited partnership interest in American
Real Estate Holdings Limited Partnership. Substantially all of
the assets and liabilities are owned by AREH and substantially all
of the company's operations are conducted through AREH and its
subsidiaries. American Property Investors, Inc., or API, owns a
1% general partnership interest in both the company and AREH,
representing an aggregate 1.99% general partnership interest in
the company and AREH. API is owned and controlled by Mr. Carl C.
Icahn.
About Lear Corp.
Headquartered in Southfield, Michigan, Lear Corporation (NYSE:
LEA) -- http://www.lear.com/-- supplies automotive interior
systems and components. Lear provides complete seat systems,
electronic products, electrical distribution systems, and other
interior products. The company has 104,000 employees at 275
locations in 33 countries.
* * *
As reported in the Troubled Company Reporter on Feb. 7, 2007,
Moody's Investors Service placed the long term ratings of Lear
Corporation, corporate family rating at B2, under review for
possible downgrade. The company's speculative grade liquidity
rating of SGL-2 was affirmed.
MAPCO EXPRESS: Calfee Deal Cues S&P to Hold B+ Corp. Credit Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'B+' corporate credit rating, on Franklin, Tennessee-based
Mapco Express Inc.
The affirmation follows the company's report that it has signed a
definitive agreement for the purchase of 107 retail fuel and
convenience stores from Calfee Company of Dalton Inc. for about
$65 million plus the cost of inventory.
Standard & Poor's believes that credit metrics for MAPCO, a wholly
owned subsidiary of Delek U.S. Holdings Inc., will remain
appropriate for the 'B+' rating given the company's plan to
finance the acquisition with a combination of additional
borrowings and cash from Delek's May 2006 IPO.
The outlook remains negative.
"The ratings," said Standard & Poor's credit analyst Jackie E.
Oberoi, "reflect MAPCO's participation as a relatively small
regional player in the competitive and highly fragmented
convenience store industry and significant exposure to the
volatility of gasoline prices."
Another factor is its concentration in a few key markets in the
Southeastern U.S. where economic slowdowns can affect operations.
The company also is highly leveraged and has a relatively small
EBITDA base.
MMM HOLDINGS: Moody's Puts Debt Ratings on Review, Eyes Downgrade
-----------------------------------------------------------------
Moody's Investors Service has downgraded the senior debt rating of
MMM Holdings Inc., NAMM Holdings Inc., and Preferred Health
Management Corporation to B3 from B1 following the report by the
parent company, Aveta Inc., of a significant decline in
profitability during the fourth quarter of 2006.
The ratings are being placed under review for possible downgrade.
According to Moody's, MMM, NAMM, and PHMC are co-borrowers under
Aveta's bank credit facility. The bank facility is guaranteed by
Aveta and is secured with the pledge of the stock and assets of
Aveta, as well as the pledge of the stock of each of the borrowers
and their regulated subsidiaries and all assets of the
non-regulated entities.
As a result of the revised earnings projection for 2006, Aveta
announced that it may fail to meet one or more of the financial
covenants of its bank loan agreement for fiscal year 2006.
The shortfall in earnings, the rating agency stated, is primarily
the result of higher medical utilization in the company's Puerto
Rico operations, which provides only Medicare Advantage products.
MMM Healthcare and Preferred Medical Choice, Inc., the two main
operating subsidiaries of MMM, are the two largest providers of
Medicare Advantage products in Puerto Rico, with over 200,000
members as of Sept. 30, 2006. These two companies service in
excess of 60% of the Medicare Advantage enrolled population in
Puerto Rico and account for approximately 80% of Aveta's operating
earnings.
Moody's notes that the Medicare Advantage product does not allow
the carrier to change benefits, cancel coverage, or change premium
rates during the contract year. Since the discovery of the
utilization problem was discovered so late in 2006, MMM will need
to implement cost savings initiatives such as tighter medical
management and authorization protocols to avoid earnings
shortfalls in 2007.
However, according to Moody's, this requires behavioral changes
from providers and members and may be difficult to implement in a
short time frame. Other initiatives mentioned by the company,
such as renegotiating provider contracts, may be even more
difficult to implement. As a result, the rating agency expects
earnings to be depressed for at least the first half of 2007, if
not longer. Also in question, is the company's ability to file
with CMS a profitable product offering for 2008, without having a
full grasp of long-term medical cost trends and how to control
them.
Moody's stated that while the company may still be able to meet
the financial covenants for fiscal year 2006, based on the current
guidance for 4th quarter 2006 it was unlikely that the company
would be able to meet the Consolidated Leverage Ratio covenant at
March 31, 2007. As a result, the company will likely be forced to
seek a waiver and amendment to its credit agreement.
Moody's review will focus on the liquidity of MMM, the explanation
by the company of the reasons for the unfavorable results, as well
as the development of a comprehensive action plan to improve
earnings in 2007. Moody's will also review the terms of any
renegotiation of the credit facility.
These ratings were downgraded and placed under review for possible
downgrade:
* MMM Holdings, Inc.'s senior secured debt rating to B3 from
B1; corporate family rating to B3 from B1;
* NAMM Holdings, Inc.'s senior secured debt rating to B3 from
B1;
* Preferred Health Management Corporation's senior secured debt
rating to B3 from B1;
* MMM Healthcare, Inc.'s insurance financial strength rating to
Ba3 from Ba2; and
* PrimeCare Medical Network, Inc.'s insurance financial
strength rating to Ba3 from Ba2.
The insurance financial strength ratings of Aveta's operating subs
were lowered one notch to Ba3 and its senior debt ratings were
downgraded two notches to B3. Due to the company's current
financial situation, the security provided by the underlying
assets is less certain making a three notch rating differential
more appropriate.
The last rating on MMM Holdings was on June 28, 2006 when the
company's ratings were affirmed at the time of their acquisition
of Preferred Health Management Corporation.
MMM Healthcare and Preferred Medicare Choice, Inc. offer Medicare
Advantage products exclusively to eligible participants in Puerto
Rico. Moody's notes that the combined companies currently enjoy
being the market leader in providing Medicare Advantage products
in Puerto Rico. NAMM is a medical management company that
operates in California and Illinois. Its regulated operating
subsidiary, PrimeCare Medical Network, Inc., consists of 10 owned
IPAs in Southern California that contract with major health care
benefit companies on a capitated basis to provide medical care to
commercial and Medicare members.
Aveta, Inc. is headquartered in Fort Lee, New Jersey. As of
Sept. 30, 2006, Aveta reported stockholders' equity of $73 million
and approximately 230,000 Medicare members. For the first nine
months of 2006, pro-forma total revenues were $1.4 billion.
Moody's health insurance financial strength ratings are opinions
about the ability of life and health insurance companies to
punctually repay senior policyholder claims and obligations.
Moody's corporate family rating is an opinion of a corporate
family's ability to honor all of its financial obligations and is
assigned to a corporate family as if it had a single class of debt
and a single consolidated legal entity structure.
MYLAN LABORATORIES: Earns $135.4 Million in Quarter Ended Dec. 31
-----------------------------------------------------------------
Mylan Laboratories Inc. reported $135.4 million of net earnings on
$401.8 million of revenues for the third quarter ended Dec. 31,
2006, compared with $48.2 million of net earnings on
$311.2 million of revenues for the same period in 2005.
Robert J. Coury, Mylan's vice chairman and chief executive
officer, commented: "We are extremely pleased to have been able to
deliver the most successful quarter and nine month period,
financially, in our company's history. These results are even
more impressive considering they were achieved at the same time
the company was successfully completing the Matrix transaction,
further demonstrating Mylan's ability to maintain its focus on its
superior operational performance while executing on its well-
stated strategic growth initiatives."
The increase in revenues was primarily due to revenues contributed
by products launched subsequent to Jan. 1, 2006, specifically
$66.2 million from sales of oxybutynin, Mylan's generic version of
Alza Corporation's Ditropan XL(R) extended-release tablets.
Third quarter gross profit increased 44% or $68.7 million to
$224.5 million from $155.8 million in the same prior year period,
and gross margins increased to 55.9% from 50.1%. Earnings from
operations were $183.7 million for the quarter ended
Dec. 31, 2006, compared with $78 million in the same period in
2005.
The higher gross profit combined with lower overall operating
expenses and a net gain of $34.6 million from the settlement of
non-product litigation were primarily responsible for the increase
in earnings from operations.
Other income for the third quarter of fiscal 2007 was
$32.4 million, compared to $4.5 million in the same prior year
period. This change is the result of a $25.2 million gain related
to a foreign currency forward contract with respect to the Matrix
acquisition.
At Dec. 31, 2006, the company's balance sheet showed $2.2 billion
in total assets, $1.1 billion in total liabilities, and
$1.1 billion in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?19d8
Acquisition of Matrix Laboratories
On Aug. 28, 2006, Mylan Laboratories Inc. entered into a Share
Purchase Agreement to acquire, through MP Laboratories (Mauritius)
Ltd, its wholly-owned indirect subsidiary, a controlling interest
in Matrix Laboratories Limited, a publicly traded company in
India. Matrix is engaged in the manufacture of active
pharmaceutical ingredients and solid oral dosage forms and is
based in Hyderabad, India.
On Jan. 8, 2007, Mylan completed its acquisition of approximately
51.5% of Matrix's outstanding shares from the selling shareholders
for approximately $545,551. Including the Matrix shareholdings
maintained by Prasad Nimmagadda (one of the selling shareholders),
which are subject to a voting arrangement with Mylan, Mylan
controls in excess of 75% of the voting share capital of Matrix.
About Mylan Laboratories
Headquartered in Canonsburg, Pennsylvania, Mylan Laboratories Inc.
-- http://www.mylan.com/-- is a pharmaceutical company with three
principal subsidiaries, Mylan Pharmaceuticals Inc., Mylan
Technologies Inc., UDL Laboratories Inc., and a controlling
interest in Matrix Laboratories Limited, India. Mylan develops,
licenses, manufactures, markets and distributes an extensive line
of generic and proprietary products.
* * *
As reported in the Troubled Company Reporter on Sept. 26, 2006,
Moody's Investors Service affirmed Mylan Laboratories Inc.'s Ba1
Corporate Family Rating in connection with the implementation of
its Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Pharmaceutical sector.
NAVISTAR INTL: Intends to Appeal Delisting Warning from NYSE
------------------------------------------------------------
Navistar International Corp. has planned to appeal to the New York
Stock Exchange from proceeding to delist the company from the
exchange and suspend trading in company stock, as part of the
procedure.
The NYSE's action was a result of the company's December 15 report
that it will complete the restatement of its 2005 financial
statements after Feb. 1, 2007. The company anticipated being
quoted on the Pink Sheet Electronic Quotation Service soon as the
exchange suspends trading.
"While the company was disappointed with the exchange's ruling and
plan to appeal, the company remained focused on its principal
mission of creating value for its shareholders and that included
turning in strong operating results in the company's current
fiscal year," Daniel C. Ustian, Navistar chairman, president and
chief executive officer, said.
"Navistar was committed to accurate financial statements and the
company will continue to devote the necessary time and resources
to achieve that goal," Bill Caton, the company's Executive Vice
President and Chief Financial Officer, said. "Navistar has made
progress on completing the restatement of its financial statements
while at the same time strengthening accounting processes
throughout the company. Wherever Navistar was listed, the company
was committed to continued communications with the company's
shareholders."
Based in Warrenville, Illinois, Navistar International Corp.
(NYSE:NAV) -- http://www.nav-international.com/-- is the parent
company of Navistar Financial Corp. and International Truck and
Engine Corp. The company produces International brand
commercial trucks, mid-range diesel engines and IC brand school
buses, Workhorse brand chassis for motor homes and step vans, and
is a private label designer and manufacturer of diesel engines for
the pickup truck, van and SUV market. The company also provides
truck and diesel engine parts and service sold under the
International brand. A wholly owned subsidiary offers
financing services.
* * *
As reported in the Troubled Company Reporter on Jan. 12, 2006,
Fitch has assigned a 'BB-' rating to Navistar International
Corp.'s proposed $1.3 billion senior unsecured credit facility.
Fitch also withdraws the 'BB-' rating on the company's senior
unsecured notes, the 'B' rating on company's senior subordinated
debt, and the senior unsecured debt rating at Navistar Financial
Corp., all of which have been substantially retired. Fitch
expects to withdraw the 'BB-' rating on company's existing credit
facility upon the closing of the new $1.3 billion facility.
ORLEANS HOMEBUILDERS: Posts $7.5MM Net Loss in 2nd Fiscal Quarter
-----------------------------------------------------------------
Orleans Homebuilders Inc. filed its second fiscal quarter
financial statements ended Dec. 31, 2006, with the Securities and
Exchange Commission on Feb. 9, 2007.
Orleans Homebuilders reported a $7,524,000 net loss on
$157,129,000 of revenues for the three months ended Dec. 31, 2006,
compared with $15,416,000 of net income on $224,651,000 of
revenues for the same period in 2005.
New orders for the three months ended Dec. 31, 2006, decreased
$11,041,000, or 6.8%, to $152,375,000 on 367 homes, compared with
$163,416,000 on 361 homes for the three months ended Dec. 31,
2005. The average price per home of new orders decreased by
approximately 8.4% to $415,000 for the three months ended Dec. 31,
2006, compared with $453,000 for the three months ended Dec. 31,
2005.
The significant decrease in the company's new orders during the
three months ended Dec. 31, 2006, compared to the three months
ended Dec. 31, 2005, was attributable to unfavorable market
conditions in the housing industry.
The major factors contributing to the unfavorable market
conditions include:
a. increased new and resale home inventory levels primarily
caused by speculators attempting to sell their homes,
specifically in the company's Palm Coast market in the
Florida region, and
b. decreased homebuyer demand due to lower consumer confidence
in the overall housing market.
The decrease in homebuyer demand as a result of lower consumer
confidence can be attributed to concerns of prospective buyers of
new homes about the direction of home prices, which has increased
general homebuyer uncertainty regarding whether now is the best
time to buy a home.
In response to these unfavorable market conditions, the company
reduced its workforce by approximately 170 employees during the
six months ended Dec. 31, 2006.
The workforce reductions took place in all of its regions and
included general and administrative, sales, and construction,
overhead positions.
Second Quarter Financial Highlights
* Fiscal year 2007 second quarter residential property revenue
decreased 31% to $153,172,000 (377 homes) compared with
$220,912,000 (540 homes) for the prior year period.
* Fiscal year 2007 second quarter new orders decreased 7% to
$152,375,000 (367 homes) compared with $163,416,000
(361 homes) for the prior year period.
* Fiscal year 2007 second quarter net loss was $7,524,000,
including charges related to inventory impairments and land
deposits and pre-acquisition costs for abandoned projects of
$8,842,000 after tax, compared with net income of $15,416,000
for the prior year period. Excluding charges for inventory
impairments and abandoned projects, adjusted net income for
the second quarter of fiscal year 2007 was $1,318,000.
* Excluding charges for inventory impairments, abandoned
projects and stock option expense, fiscal year 2007 second
quarter adjusted EBITDA decreased to $7,488,000 compared with
$30,021,000 for the prior year period.
* The backlog at Dec. 31, 2006, decreased 52% to $289,870,000
(591 homes) compared with $599,127,000 (1,392 homes) at
Dec. 31, 2005.
* The company controls approximately 13,100 building lots at
Dec. 31, 2006, compared with approximately 18,000 building
lots at Dec. 31, 2005.
* The company experienced a cancellation rate of approximately
24% for the quarter ended Dec. 31, 2006, compared with a
cancellation rate of approximately 21% for the quarter ended
Dec. 31, 2005
Balance Sheet
At Dec. 31, 2006, the company had $1,056,184,000 in total assets,
$767,517,000 in total liabilities, and $288,667,000 in total
shareholders' equity.
Fiscal Year 2007 Guidance
* The company revises its guidance for diluted earnings per
share between $0.25 to $0.45 down from $1.50 to $1.65 for
fiscal year ending June 30, 2007,.
* The company revises its guidance with respect to revenue
between $690 million and $725 million down from $750 million
to $780 million for fiscal year ending June 30, 2007.
Full-text copies of the company's second fiscal quarter financials
are available for free at http://ResearchArchives.com/t/s?19d7
About Orleans Homebuilders
Based in Bensalem, Pennsylvania, Orleans Homebuilders, Inc. and
its subsidiaries (ASE: OHB) -- http://www.orleanshomes.com/--
market, develop and build high-quality, single-family homes,
townhomes and condominiums to serve various types of homebuyers,
including first-time, first move-up, second move-up, luxury, empty
nester and active adult. The company believes this broad range of
home designs gives it flexibility to address economic and
demographic trends within its markets.
Defaults Under Amended Revolving Credit Loan
As reported in the Troubled Company Reporter on Feb. 8, 2007,
Orleans Homebuilders has determined that it is in violation
of a financial covenant under its Amended and Restated Revolving
Credit Loan Agreement in the course of preparing its quarterly
financial statements for the second quarter of 2007.
The Loan Agreement was entered into by the company as guarantor,
certain of the company's wholly owned subsidiaries, and various
banks as lenders, dated Jan. 24, 2006, and amended by a First
Amendment on Nov. 1, 2006.
The Loan Agreement required the company to maintain a certain
"Debt Service Ratio", which is the ratio of the company's
"Adjusted EBITDA" to "Debt Service". As of Dec. 31, 2006, the
company's Debt Service Ratio was 1.61 to 1.00. The Revolving
Credit Facility required a Debt Service Ratio of 2.00 to 1.00.
As of Feb. 1, 2007, approximately $501,950,000 of borrowings and
approximately $40,724,000 of letters of credit and other
assurances were outstanding under the Revolving Credit Facility.
PENN OCTANE: Inks Purchase Option Agreement with Shore Trading LLC
------------------------------------------------------------------
Penn Octane Corporation entered into a purchase option agreement
with Shore Trading LLC that provides the company with the option
to purchase 25,000 units of membership interest of Rio Vista GP
LLC currently held by Shore Trading.
Rio Vista GP is the general partner of Rio Vista Energy Partners
L.P. Shore Trading acquired the Shore Units from Shore Capital
LLC on Dec. 14, 2006. Shore Capital LLC acquired the Shore Units
from Penn Octane on July 1, 2006.
The Shore Units represent 25% of the outstanding membership
interests of Rio Vista GP. The company currently holds 50% of
the outstanding membership interests of Rio Vista GP. The
remaining 25% of such interests are held by a trust controlled by
Jerome B. Richter. Both Shore Trading and Richter are parties
to a voting agreement with Penn Octane pursuant to which Shore
Trading and Richter have agreed to vote their units as instructed
by Penn Octane, subject to certain exceptions.
As a result of the voting agreement, whether or not the purchase
option is exercised, the company has the right to elect all
members of the board of managers of Rio Vista GP.
The company paid Shore Trading $100,000 in order to acquire the
Purchase Option. The exercise price for the Purchase Option is
$1,300,000, for a total purchase price of $1,400,000, if the
company exercises the Purchase Option between July 1 and July 31,
2007. If the company exercises the purchase option before July 1,
2007, the exercise price is $1,700,000, for a total purchase price
of $1,800,000. The purchase option expires if it is not exercised
on or before July 31, 2007.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 4, 2006,
Burton McCumber & Cortez, L.L.P., Brownsville, Texas, raised
substantial doubt about Penn Octane's ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended
Dec. 31, 2005.
Burton McCumber pointed to the Company's insufficient cash flow to
pay its obligations when due, inability to obtain additional
financing because substantially all of the Company's assets are
pledged or committed to be pledged as collateral on existing debt,
existing credit facility may be insufficient to finance its
liquefied petroleum gas and Fuel Sales Business, and working
capital deficiency.
About Penn Octane
Headquartered in Palm Desert, California, Penn Octane Corporation
(NASDAQ:POCC) -- http://www.pennoctane.com/-- formerly known as
International Energy Development Corporation buys, transports and
sells liquefied petroleum gas for distribution in northeast
Mexico, and resells gasoline and diesel fuel. The Company has a
long-term lease agreement for approximately 132 miles of pipeline,
which connects ExxonMobil Corporation's King Ranch Gas Plant in
Kleberg County, Texas and Duke Energy's La Gloria Gas Plant in Jim
Wells County, Texas, to the Company's Brownsville Terminal
Facility.
PILLOWTEX CORP: Court Confirms Joint Plan of Liquidation
--------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware confirmed the Joint Plan of Liquidation
proposed by Pillowtex Corporation and its debtor-affiliates and
the Official Committee of Unsecured Creditors.
Plan Overview
As reported in the Troubled Company Reporter on Feb. 2, 2007,
the Plan provides for the substantive consolidation of the estates
of the Debtors. On the effective date, each Debtor other than
Pillowtex will be deemed merged into Pillowtex and:
-- all guarantees of any Debtor for the payment, performance
or collection of obligation of any other Debtor will be
eliminated and cancelled;
-- any obligation of any Debtor and all guarantees by one or
more of the other Debtors will be deemed to be a single
claim against the Consolidated Debtors;
-- all joint obligations of two or more of the Debtors and
all multiple claims against any Debtor on account of these
joint obligations will be treated and allowed only as a
single claim against the Consolidated Debtors; and
-- each proof of claim filed against any Debtor will be
deemed filed only against the Consolidated Debtors and
will be deemed a single obligation of the consolidated
Debtors.
Treatment of Claims
Holders of Priority Claims, estimated at $150,000, will be paid
the full amount of their allowed claims on the effective date.
Holders of other secured claims, totaling $5.5 million, will
receive the collateral securing their claim. Any excess amount
of the allowed claim over the value of the collateral will be
treated as a general unsecured claim.
Convenience Claims are estimated to amount to $12.5 million. Each
person holding a convenience claim will recover 10% of the allowed
claim on the effective date.
Holders of General Unsecured Claims, totaling $172.5 million, will
receive a pro rata share of the beneficial interests, the initial
distribution amount and interim distribution amounts.
On the effective date, the Pillowtex Equity and Securities Trading
Claims will be cancelled and holders will not be entitled to
receive or retain any property or interest. Likewise, all
subsidiary equity will be cancelled and holders will get nothing
under the plan.
About Pillowtex Corp.
Based in Dallas, Texas, Pillowtex Corporation --
http://www.pillowtex.com/-- sold top-of-the-bed products to
virtually every major retailer in the U.S. and Canada. The
company filed for Chapter 11 protection on November 14, 2000
(Bankr. Del. Case No. 00-4211), emerged from bankruptcy under a
Chapter 11 plan, and filed a second time on July 30, 2003 (Bankr.
Del. Case No. 03-12339). The second chapter 11 filing triggered
sales of substantially all of the company's assets. David G.
Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at
Morris Nichols Arsht & Tunnel, represent the Debtors. Jason W.
Staib, Esq., and Mark J. Packel, Esq., at Blank Rome LLP represent
the Official Committee of Unsecured Creditors. On July 30,
2003, the company listed $548,003,000 in assets and $475,859,000
in debts.
PINNACLE FOODS: $2 Billion Buyout Deal Cues Moody's Ratings Review
------------------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
the ratings of Pinnacle Foods Group Inc., including the company's
B1 corporate family rating.
This review action follows Pinnacle's report that it will be
acquired by The Blackstone Group for approximately $2.16 billion,
including the assumption of certain obligations, and reflects
Moody's concern that the transaction might result in higher
leverage.
Ratings under review for possible downgrade:
-- Corporate family rating at B1
-- Probability of default rating at B1
-- Guaranteed senior secured revolving credit agreement at Ba3,
LGD3, 33%
-- Guaranteed senior secured term loan B at Ba3, LGD3, 33%
-- $394 million 8.25% guaranteed senior subordinated notes due
2013 at B3, LGD5, 85%
Moody's review will focus on Pinnacle's post acquisition capital
structure and leverage, the organic growth prospects for its
existing brands, and the company's future acquisition appetite and
financial policies under new ownership.
Headquartered in Cherry Hill, New Jersey, Pinnacle Foods Group
Inc. manufactures and markets branded convenience food products in
the US and Canada. Its brands include Hungry-Man and Swanson
Dinners, Vlasic pickles, Mrs. Paul's and Van de Kamp's frozen
prepared seafoods, Aunt Jemima frozen breakfasts, Log Cabin and
Mrs. Butterworth's syrup and Duncan Hines cake mixes. Net sales
for the twelve months ended Sept. 24, 2006 were approximately
$1.4 billion.
PORTRAIT CORP: Section 341 Meeting Slated Tomorrow
--------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of Portrait
Corporation of America Inc. and its debtor-affiliates' creditors
tomorrow, Feb. 16, 2007, at 2:00 p.m. The meeting will be held at
80 Broad Street, 2nd Floor, in New York.
All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible officer of the
Debtors under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Portrait Corporation of America, Inc. -- http://pcaintl.com/--
provides professional portrait photography products and services
in North America. The Company operates portrait studios within
Wal-Mart stores and Supercenters in the United States, Canada,
Mexico, Germany and the United Kingdom. The Company also operates
a modular traveling business providing portrait photography
services in additional retail locations and to church
congregations and other institutions.
Portrait Corporation and its debtor-affiliates filed for
Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case
No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft
LLP, represents the Debtors in their restructuring efforts.
Berenson & Company LLC serves as the Debtors' financial advisor
and investment banker. Kristopher M. Hansen, Esq., at Stroock &
Stroock & Lavan LLP represents the Official Committee of Unsecured
Creditors. Peter J. Solomon Company serves as financial advisor
for the Committee. At June 30, 2006, the Debtor had total assets
of $153,205,000 and liabilities of $372,124,000.
QWEST COMMUNICATIONS: Earns $593 Million in Year Ended December 31
------------------------------------------------------------------
Qwest Communications International Inc. reported $593 million of
net income on $13.92 billion of revenues for the year ended
Dec. 31, 2006, compared with a $779 million net loss on
$13.90 billion of revenues for the year ended Dec. 31, 2005.
"Qwest reached many notable financial and operational milestones
in 2006 due to our focus on the fundamentals - operate
efficiently, remain disciplined with spending and deliver
exceptional service to customers," said Richard C. Notebaert,
Qwest chairman and CEO. "With our solid financial foundation, we
have an opportunity to deliver continued value to all our
constituents."
"We delivered on our objectives for the year," said Oren G.
Shaffer, Qwest vice chairman and CFO. "Margins expanded toward
our target of the mid-30 percent range, free cash flow grew
significantly, sustainable profitability was achieved and
shareholders were rewarded through our share repurchase program."
Qwest's operating expenses totaled $12.4 billion for the year, a
savings of $680 million, or 5.2 percent, from 2005. Improvements
in productivity and operating efficiencies and lower facility
costs drove the decline.
Interest expense was $1.17 billion, down $314 million from 2005 as
a result of retirement of high coupon, legacy debt and lower debt
levels.
Net income of $593 million included gains of $156 million for one-
time non-operating items. The net loss in 2005 included a net
charge of $199 million for one-time non-operating items.
At Dec. 31, 2006, the company's balance sheet showed
$21.24 billion in total assets and $22.68 billion in total
liabilities, resulting in a $1.44 billion total stockholders'
deficit.
Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2006, are available for
free at http://researcharchives.com/t/s?19d9
Net Debt
At Dec. 31, 2006, the company's net debt (gross debt less cash and
short-term investments) declined to $13.4 billion, down
$1.1 billion since year-end 2005.
Qwest offers a unique and powerful combination of voice and data
solutions for businesses, government agencies and consumers -
locally and throughout the country. Customers coast to coast are
turning to Qwest's industry-leading national fiber optic network
and its Spirit of Service for quality products and superior
customer experience. For more information on Qwest, and its
various operating subsidiaries, please go to www.qwest.com.
About Qwest
Based in Denver, Colorado, Qwest Communications International Inc.
(NYSE: Q) -- http://www.qwest.com/- provides full-service voice,
video and data services.
* * *
As reported in the Troubled Company Reporter on Dec. 28, 2006,
Standard & Poor's Ratings Services raised the corporate credit
ratings on Denver, Colorado-based telecommunications carrier Qwest
Communications International Inc. and incumbent local exchange
carrier subsidiary Qwest Corp. to 'BB' from 'BB-', and affirmed
the short-term credit rating on Qwest Communications at 'B-1'.
The outlook is stable.
RESMAE MORTGAGE: Files Chapter 11 Protection in Delaware
--------------------------------------------------------
ResMAE Mortgage Corp., a sub-prime lender and a wholly owned
subsidiary of ResMAE Financial Corp., filed for chapter 11
protection with the U.S. Bankruptcy Court for the District of
Delaware on Feb. 12, 2007.
ResMAE Mortgage filed for bankruptcy because Credit Suisse
Securities LLC informed ResMAE Financial that it would only
proceed with the acquisition of ResMAE Mortgage's assets through a
Section 363 sale process, Eugene S. Weil, the chief executive
officer of Milestone Advisors LLC, said.
ResMAE Financial hired Milestone Advisors to sell its shares or
assets to prospective bidders. Credit Suisse, who signed an asset
purchase agreement on Feb. 13, 2007, for ResMAE Mortgage's assets,
was one of the 12 prospective bidders.
"This agreement brings together ResMAE's core competence in
originating subprime mortgages with Credit Suisse's global
expertise in risk management, securitization and distribution,"
ResMAE Mortgage President and Chief Executive Officer Ed Resendez
said.
"To ensure that our customer and vendor relationships remain
intact during the sale process," Mr. Resendez added, "Credit
Suisse is providing us with post-petition warehouse financing and
operating funds that we anticipate will enable us to operate in a
normal manner during the reorganization. Our offices shall remain
open as usual with loan originations and the associated
transactions proceeding in the ordinary course of business. Our
customers should see no disruption in our service and delivery
commitments. We currently expect that suppliers will be paid for
all post-petition goods and services."
Mr. Weil said ResMAE Mortgage will sell substantially all of its
assets to Credit Suisse for $15,259,140. Credit Suisse has also
agreed to assume ResMAE Mortgage's certain liabilities and retain
80% of its employees.
In its petition, ResMAE Mortgage estimated its assets and debts of
more than $100 million.
Daniel J. DeFranceschi, Esq., Mark D. Collins, Esq., Mark A.
Kurtz, Esq., and Michael Joseph Merchant, Esq., at Richards,
Layton & Finger, P.A., represent ResMAE Mortgage.
ResMAE Mortgage Corp. -- http://www.resmae.com/-- is a subsidiary
of ResMAE Financial Corporation, a specialty finance company
engaged in the business of originating, selling, and servicing
subprime residential mortgage loans. The company serves the needs
of borrowers who do not conform to traditional "A" credit lending
criteria due to credit history, debt to income ratios, or other
factors.
The Debtor has regional processing centers nationwide, including
Northern and Southern California, Texas, New Jersey, Illinois,
Florida, and Hawaii.
RESMAE MORTGAGE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: ResMAE Mortgage Corporation
6 Pointe Drive
Brea, CA 92821
Bankruptcy Case No.: 07-10177
Type of Business: The Debtor is a subsidiary of ResMAE Financial
Corporation, a specialty finance company
engaged in the business of originating, selling,
and servicing subprime residential mortgage
loans. The company serves the needs of
borrowers who do not conform to traditional "A"
credit lending criteria due to credit history,
debt to income ratios, or other factors.
The Debtor has regional processing centers
nationwide, including Northern and Southern
California, Texas, New Jersey, Illinois, Florida
and Hawaii. See http://www.resmae.com/
Chapter 11 Petition Date: February 12, 2007
Court: District of Delaware (Delaware)
Judge: Kevin J. Carey
Debtor's Counsel: Daniel J. DeFranceschi, Esq.
Mark D. Collins, Esq.
Mark A. Kurtz, Esq.
Michael Joseph Merchant, Esq.
Richards, Layton & Finger, P.A.
One Rodney Square
P.O. Box 551
Wilmington, DE 19899
Tel: (302) 651-7700
Fax: (302) 651-7701
Estimated Assets: More than $100 Million
Estimated Debts: More than $100 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The CIT Group/Consumer Repurchase Demand Unliquidated
Finance, Inc. Obligations
1 CIT Drive
Livingston, NJ 07039
Tel: (973) 535-3518
Fax: (973) 535-5962
Barclays Bank, PLC Warehouse Unliquidated
200 Park Avenue Obligations
New York, NY 10166
Tel: (212) 412-5542
Fax: (212) 412-6846
Merrill Lynch Bank USA EPD and Unliquidated
4 World Financial Center Warehouse
10th Floor Obligations
New York, NY 10080
Tel: (212) 526-7522
Fax: (212) 449-6710
Lehman Brothers Bank, FSB Warehouse Unliquidated
745 - 7th Avenue, 7th Floor
New York, NY 10019
Tel: (212) 250-7328
Fax: (646) 758-2028
DB Structured Products, Inc. EPD and Unliquidated
Deutsche Bank Warehouse
Securitized Products Group Obligations
60 Wall Street, 19th Floor
New York, NY 10005
Tel: (212) 250-7328
Fax: (212) 797-5160
EMC Mortgage Corporation EPD Claimant Unliquidated
(Bear Stearns)
909 Hidden Ridge Drive
Suite 200
Irving, TX 75083
Tel: (800) 723-3004
Fax: (214) 626-2555
JPMorgan Chase Bank EPD and Unliquidated
707 Travis, 6th Floor North Warehouse
Houston, TX 77252 Obligations
Tel: (713) 216-4425
Fax: (713) 216-1567
Nomura Credit & Capital, Inc. EPD Claimant Unliquidated
2 World Financial Center
Building B, 21st Floor
New York, NY 10281
Tel: (212) 667-9480
Fax: (212) 667-1024
Morgan Stanley Mortgage EPD Claimant Unliquidated
Capital Inc.
1221 Avenue of the Americas
27th Floor
New York, NY 10020
Tel: (212) 762-4000
Fax: (212) 507-3565
Blue Cross of California Trade Debt $527,857
3070 Bristol Street, Suite 400
Costa Mesa, CA 92626
Tel: (714) 429-2768
Fax: (714) 429-2727
Olen Commercial Realty Trade Debt $267,755
Seven Corporate Plaza
Newport Beach, CA 92660
Tel: (714) 255-1313
Fax: (714) 255-1361
Progressive Incentives Trade Debt $189,733
Grant Thornton LLP Trade Debt $144,777
First American San Diego Trade Debt $139,939
The Hartford Trade Debt $102,418
Office Depot Trade Debt $67,886
MortgageServ Trade Debt $61,611
Cadwalader, Wickersham and Trade Debt $59,609
Taft LLP
Clear Capital Trade Debt $55,955
LSI Flood Services Trade Debt $48,407
SAINT VINCENTS: Court Dismisses CMC-OHS's Bankruptcy Case
---------------------------------------------------------
The Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court
for the Southern District of New York granted the request of Saint
Vincents Catholic Medical Centers of New York and its debtor-
affiliates to dismiss the Chapter 11 case of CMC-OHS (Case No.
05-14950) effective on the assignment to Caritas Health Care
Planning, Inc., of an agreement between Saint Vincent Catholic
Medical Centers and Dr. Neil Mandava, as the sole shareholder of
CMC-OHS.
According to Judge Hardin, all claims by SVCMC and the other
Debtors against CMC-OHS will survive the assignment of the
Shareholder Agreement to Caritas and the dismissal of CMC-OHS'
case, and will remain assets of SVCMC and the Other Debtors.
CMC-OHS' rights to file a future petition for relief under
Chapters 7 or 11 of the Bankruptcy Code are preserved to the
fullest extent allowed by the Bankruptcy Code.
Judge Hardin clarifies that the order will not affect the
prosecution of the bankruptcy cases of SVCMC and the Other
Debtors, which will continue to be jointly administered under
Case No. 05-14945.
CMC-OHS is directed to immediately pay to the U.S. Trustee the
appropriate sum required for its Chapter 11 case, and to provide
the U.S. Trustee an appropriate affidavit indicating the cash
disbursements for the relevant period.
Any objections that have not been withdrawn, waived, or settled,
and all reservations of rights included in the objections, are
overruled on the merits with prejudice, Judge Hardin says.
Accordingly, SVCMC filed and served on Jan. 8, 2007, a notice
stating that:
(i) CMC-OHS' Chapter 11 case has been dismissed;
(ii) the automatic stay is no longer in effect; and
(iii) parties asserting claims against CMC-OHS may seek payment
from, and exercise any other rights against, CMC-OHS.
Judge Hardin directs SVCMC and the Other Debtors to use
reasonable efforts to perfect their secured claims, if any,
against CMC-OHS, and to otherwise enforce and obtain payment of
all their claims against CMC-OHS.
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 44 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SAINT VINCENTS: Court Approves Benloss Settlement Agreement
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York to
approved a settlement agreement between Saint Vincents Catholic
Medical Centers of New York, its debtor-affiliates and former
employee Eroll Benloss.
Eroll Benloss filed a lawsuit before the Supreme Court of the
state of New York, County of New York, on Jan. 10, 2005, alleging
age and race discrimination against Saint Vincent Catholic Medical
Centers in relation to the termination of his employment in 2003.
The complaint sought, among other things, $5,000,000 in
compensatory damages and an additional $5,000,000 in punitive
damages.
According to Andrew M. Troop, Esq., at Weil, Gotshal & Manges
LLP, in New York, the State Court Action has been stayed
following the commencement of the Debtors' Chapter 11 cases.
In August 2006, Mr. Benloss sought an extension for the deadline
to file a proof of claim in the Debtors' Chapter 11 cases and
contended that:
(i) although he received notice of the March 30, 2006,
deadline for filing proofs of claim based on prepetition
debts or liabilities against any of the Debtors, he failed
to appreciate its significance;
(ii) the Debtors sent notice of the March 30 Bar Date to a law
firm that was no longer engaged in his representation; and
(iii) the attorney actually representing Mr. Benloss and of whom
the Debtors should have been aware did not receive notice
of the Bar Date.
The Debtors and Mr. Benloss have agreed to settle both his
extension motion and claims against SVCMC in consideration of the
likelihood of success in litigating either the State Court Action
or the Extension Motion, as well as the delay, expense, and
uncertainty of that litigation.
Pursuant to the Settlement Agreement:
(1) Mr. Benloss will:
* execute all documents, including a stipulation of
discontinuance with prejudice, necessary to settle,
waive, dismiss and withdraw, the State Court Action;
* release SVCMC from all claims he may have against it;
* release both SVCMC and its related persons and entities
from any claims asserted in the State Court Action or
relating to his employment at SVCMC; and
* be allowed an unsecured, prepetition claim for $80,000
in the Debtors' bankruptcy cases;
(2) SVCMC will:
* change the coding in its computer employment records to
show that Mr. Benloss resigned; and
* provide only its standard neutral response if it
receives a written request for an employment reference
for Mr. Benloss;
(3) SVCMC denies every allegation of wrongdoing in
Mr. Benloss' complaint; and
(4) Bankruptcy Court approval is a condition precedent to the
effectiveness of the Settlement Agreement.
A full-text copy of the Settlement Agreement is available for free
at http://ResearchArchives.com/t/s?19d5
Mr. Troop tells Judge Hardin that the Settlement Agreement is
reasonable and is in the best interests of the Debtors' estate
and creditors as it allows the Debtors to convert a lawsuit
seeking $10,000,000 in damages to an unsecured claim for $80,000
and to avoid the time, expense, and uncertainty inherent in
employment litigation.
In addition, Mr. Troop explains that the Debtors' decision is
justified by the facts and circumstances surrounding Mr. Benloss'
failure to timely file a proof of claim.
About Saint Vincents
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 45 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SAINT VINCENTS: Lender Extends Cash Collateral Access to April 30
-----------------------------------------------------------------
In an amended stipulation, Saint Vincents Catholic Medical Centers
of New York and its debtor-affiliates and lender Comprehensive
Cancer Corporation of New York agree that:
(1) the Debtors' use of CCC's cash collateral is extended to
the earlier of April 30, 2007, or the confirmation of a
plan of reorganization; and
(2) the super-priority administrative claim granted to CCC as
additional adequate protection will:
* not attach to, or be payable from, any proceeds from
causes of action arising under Sections 544, 545, 547,
548, 549, 550 and 724 of the Bankruptcy Code;
* be junior to any claim allowed in favor of General
Electric Capital Corporation under the Court-approved
debtor-in-possession credit agreement between the
Debtors and GECC;
* be pari passu with any other super-priority
administrative claim arising under Section 507(b); and
* be subject to the carve-out as that term is defined in
the Credit Agreement.
All other terms and conditions of the Original Stipulation will
remain in full force and effect.
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.
The company and six of its affiliates filed for chapter 11
protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945
through 05-14951).
Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will
& Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 46 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SEMINOLE HARD ROCK: Moody's Assigns B1 Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service assigned a B1, LGD3 rating to Seminole
Hard Rock Entertainment Inc.'s and Seminole Hard Rock
International LLC's $500 million senior secured floating rate
notes due 2014, and a B1, LGD3 rating to its $25 million senior
secured revolver due 2012. A B1 corporate family rating, B1
probability of default rating, and stable ratings outlook were
also assigned.
Proceeds from the offerings along with $529 million of cash equity
will be used by the Seminole Tribe of Florida to purchase Hard
Rock International from the Rank Group for $965 million, and to
buyout Hard Rock Cafe's Universal Joint Venture partner for
$25 million. Excluding transaction expenses, the purchase price
represents a 10.8x EBITDA multiple. Seminole Hard Rock is a
wholly-owned, non-recourse subsidiary of the Seminole Tribe of
Florida. The new revolver and senior notes will be non-recourse
to the Tribe's Gaming Division revenue and assets. The
acquisition is expected to close in Mar. 2007.
The ratings take into account Seminole Hard Rock's high leverage -
pro forma lease-adjusted debt/EBITDAR will be slightly above 6.0x
- and the competitive nature of restaurant business and
vulnerability to competitor preferences. Also considered is the
company's significant revenue concentration. Company-owned
restaurants currently account for about 90% of consolidated
revenues, and 10 of the 68 total company-owned restaurants
contribute a majority of that division's revenue and EBITDA.
Positive ratings consideration is given to the Seminole Hard
Rock's brand recognition, geographic diversification and the
potential growth from fees coming from casinos branded with the
Hard Rock name. Also, while the debt is non-recourse to Seminole
Hard Rock's new owner, the Seminole Tribe of Florida, positive
ratings credit is given to the Tribe's financial strength.
The stable ratings outlook anticipates that the Hard Rock brand
will continue its popularity and that the company will generate
positive free cash flow after debt service and capital
expenditures. The stable outlook also considers that the Seminole
Tribe of Florida would support the Seminole Hard Rock if it ran
into financial difficulties.
Seminole Hard Rock Entertainment owns and operates 68 Hard Rock
cafes located throughout North America, Europe, Asia, Australia
and the Caribbean. The company also has 55 Hard Rock cafe
franchises located throughout Canada, Asia, Europe, Mexico, the
Middle East, South America, and the Pacific. Additionally, the
company owns 7 hotels and receives fees from 2 Hard Rock Hotel and
Casinos that are owned and operated by the Seminole Tribe of
Florida. The company generates annual revenues of close to
$450 million.
SEMINOLE TRIBE: Moody's Puts Ba1 Rating on New $700 Mil. Term Loan
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Moody's Investors Service assigned a Ba1, LGD4 to the Seminole
Tribe of Florida's new $700 million senior secured term loan
comprised of a $540 million 7-year funded senior secured term loan
and a $160 million 7-year delayed draw senior secured term loan.
The Tribe's Ba1 corporate family rating and existing long-term
debt ratings were affirmed.
The rating outlook remains negative.
Proceeds from the new term loan will be used fund the Tribe's
$529 million equity investment into a new 100% owned unrestricted
subsidiary that will acquire Hard Rock International, Inc. from
The Rank Group Plc for approximately $965 million.
In addition, approximately $160 million will be applied towards
planned capital expenditures.
The ratings acknowledge that although the Tribe's Gaming Division
is almost doubling the amount of its outstanding debt with the
addition of the new term loan, pro forma debt/EBITDA will still be
less than 2X. Other positive ratings considerations include the
continued strong operating performance of the Gaming Division, the
high quality of the Tribe's casino assets, the favorable
demographics of the densely populated central and southern Florida
gaming markets, and the expectation that the Tribe's lawsuit
against Power Plant will not negatively impact the Tribe's
financial results over the near-term given that Power Plant has no
operational ties to the casino.
The negative ratings outlook continues to reflect the complexity
of the Tribe's lawsuit against Power Plant as well as the
uncertainty associated with the outcome, particularly given the
lack of legal precedent with respect to this particular type of
lawsuit between a Native American Tribe and a commercial casino
developer.
The negative outlook also takes into account that despite the
completion of fieldwork in Dec. 2005 and the Tribe's expectation
that there will not be any material NIGC audit issues that will
negatively impact the Tribe or its casino operation, the NIGC has
not yet issued its findings.
Moody's most recent action occurred on Sep. 28, 2006 when PDR
ratings and LGD assessments were assigned to the company as part
of the implementation of Moody's Loss-Given-Default rating
methodology. Moody's initially assigned a Ba1 corporate family
rating to the Tribe in Sep. 2005.
The Seminole Tribe of Florida is a federally recognized Indian
tribe with enrolled membership of about 3,200 members, most of
whom reside on Tribal lands in Florida. The Tribe owns and
operates six Class II gaming facilities located on Tribal lands
throughout southern and central Florida. The gaming operations
are managed by the Seminole Gaming Division, an organizational
unit of the Tribal government with no separate legal existence.
SOUTHAVEN POWER: Court Further Extends Plan-Filing Date to Apr. 16
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The United States Bankruptcy Court for the Western District of
North Carolina further extended, until April 16, 2007, Southaven
Power LLC's exclusive period to file a Chapter 11 Plan of
Reorganization. The Court also extended the Debtor's exclusive
period to solicit acceptances of that plan until June 11, 2007.
The most important asset in the Debtor's estate is the ongoing
arbitration against PG&E Energy Trading-Power, L.P., nka NEGT
Energy Trading - Power, L.P. The arbitration relates to a
Dependable Capacity and Conversion Services Agreement dated
June 1, 2000, with ET Power. ET Power's obligations under the
Agreement were partially guaranteed by its parent, PG&E National
Energy Group, nka National Energy & Gas Transmission, Inc.
ET Power filed a lawsuit asserting an $8 million breach of
contract claim against the Debtor. In turn, the Debtor asserted
a $500 million rejection damage claim against ET Power and a
$176.2 million claim against NEGT, as guarantor.
ET Power and NEGT filed for Chapter 11 protection on July 8, 2003,
in the U.S. Bankruptcy Court for the District of Maryland.
The litigation is subject to an arbitration proceeding. A panel
of arbitrators held a number of evidentiary hearings between
Feb. 6, 2006 to Aug. 8, 2006. All briefing on the issues of
damages, liability, and litigation expenses has been completed,
and the parties are now awaiting a decision from the Panel.
According to the Debtor, it appears that the arbitration will
not be resolved until some time in 2007.
The Debtor said it will need to confirm any final award made in
its favor in the ET Power and NEGT bankruptcy cases before it can
craft an appropriate plan of reorganization.
Headquartered in Charlotte, North Carolina, Southaven Power LLC
operates an 810-megawatt, natural gas-fired electric power plant
located in Southaven, Mississippi. The company filed for chapter
11 protection on May 20, 2005 (Bankr. W.D.N.C. Case No. 05-32141).
Mark A. Broude, Esq., at Latham & Watkins LLP represents the
Debtor in its restructuring efforts, and Hillary B. Crabtree,
Esq., at Moore & Van Allen, PLLC, represents the Debtor in
litigation against PG&E Energy Trading-Power, L.P. No official
committee of unsecured creditors has been appointed in the
Debtor's case. When the Debtor filed for protection from its
creditors, it estimated assets and debts of more than
$100 million.
VISTEON CORP: Appoints William Quigley as Chief Financial Officer
-----------------------------------------------------------------
Visteon Corporation has named William G. Quigley III as chief
financial officer effective March 9, 2007. He will assume this
role and continue as the company's chief accounting officer.
"Bill Quigley brings strong financial acumen and industry
knowledge that positions him to take on this key role to help
Visteon continue driving its three-year improvement plan," Michael
F. Johnston, Visteon Chairman and Chief Executive Officer, said.
"Being able to draw on talent from within our organization enables
us to ensure a seamless transition and continued momentum in
executing our plan."
Mr. Quigley, who currently serves as vice president, corporate
controller and chief accounting officer for Visteon, has been
responsible for leading the company's financial planning, analysis
and reporting. He joined Visteon in 2005 and is an elected
corporate officer.
Prior to joining Visteon, Mr. Quigley was vice president and
corporate controller for Federal-Mogul Corp., where he held
several management positions during his 10-year tenure. Before
that, Mr. Quigley was an assistant corporate controller at Nissan
Research and Development and an audit manager at Deloitte &
Touche.
Mr. Quigley earned a bachelor's degree in accounting from Michigan
State University and is a certified public accountant in the state
of Michigan. He is a member of the American Institute of
Certified Public Accountants and the Michigan Association of CPAs.
Mr. Quigley will replace James F. Palmer who was named CFO for
Northrop Grumman, a $30 billion global defense and technology
company headquartered in Los Angeles. Mr. Palmer served as
Visteon's executive vice president and CFO since 2004.
"We appreciate Jim Palmer's significant contribution to Visteon,"
Mr. Johnston added. He played an important role in bringing
together the Ford agreement that set Visteon on a path to improve
its cost structure and competitiveness. We wish him the best in
his new assignment."
About Visteon Corporation
Headquartered in Van Buren Township, Mich., Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. With corporate offices in the Michigan
(U.S.); Shanghai, China; and Kerpen, Germany; the company has more
than 170 facilities in 24 countries and employs approximately
50,000 people.
At Sept. 30, 2006 the Company's balance sheet showed total assets
of $6.721 billion and total liabilities of $6.823 billionresulting
in a total shareholders' deficit of $102 miilion. Total
shareholders' deficit at Dec. 31, 2005 stood at $48 million.
* * *
As reported in the Troubled Company Reporter on Nov. 24, 2006,
Moody's Investors Service has downgraded Visteon Corporation's
Corporate Family Rating to B3 from B2, changed the ratings outlook
to stable from under review for possible downgrade and affirmed
the company's liquidity rating of SGL-3.
UMBRELLA ACQUISITION: Moody's Rates Proposed $8.2 Bil. Loan at Ba3
------------------------------------------------------------------
Moody's Investors Service confirmed Univision Communications
Inc.'s B1 Corporate Family rating and the Ba3 rating on
Univision's existing senior unsecured notes, concluding the review
for downgrade initiated on June 27, 2006 in connection with the
proposed $13.5 billion acquisition of the company by a consortium
of private equity owners.
Moody's also assigned a Ba3 rating to Umbrella Acquisition Inc.'s
proposed $8.2 billion guaranteed senior secured credit facility
and B3 ratings to Umbrella's proposed $500 million guaranteed
second lien senior secured asset sale bridge and $1.5 billion
guaranteed senior unsecured notes. Umbrella is an acquisition
vehicle owned by the equity sponsor group that will be merged into
Univision to complete the acquisition with Univision continuing as
the survivor and borrower post closing.
The rating outlook is stable.
Confirmations:
* Univision Communications Inc
-- Corporate Family Rating, Confirmed at B1
-- Probability of Default Rating, Confirmed at B1
-- Multiple Seniority Shelf, Confirmed at B3
-- Senior Unsecured Regular Bond/Debenture, Confirmed at Ba3
Assignments:
* Umbrella Acquisition, Inc.
-- Corporate Family Rating, Assigned B1
-- Probability of Default Rating, Assigned B1
-- Senior Secured Bank Credit Facility, Assigned Ba3, LGD3,
39%
-- Senior Secured Second Lien Bridge Term Loan, Assigned B3,
LGD5, 86%
-- Senior Unsecured Regular Bond/Debenture, Assigned B3,
LGD6, 92%
* Univision Communications Inc
-- Senior Unsecured Regular Bond/Debenture, Assigned LGD3,
39% (Ba3 rating confirmed)
Outlook Actions:
* Univision Communications Inc
-- Outlook, Changed To Stable From Rating Under Review
* Umbrella Acquisition, Inc.
-- To Stable from No Outlook
The confirmation of the B1 rating reflects Moody's belief that
Univision's strong and leading market position in Spanish-language
media within the United States, good operating margins, and
favorable intermediate-term growth prospects, supported by
Hispanic demographic trends, will allow the company to manage the
very high 12.4x debt-to-EBITDA leverage resulting from the
acquisition.
Moody's believes the acquisition financing structure -- including
the ability to PIK up to 100% of the interest on the $1.5 billion
senior unsecured notes through 2011, an undrawn $750 million
revolver, no required term loan amortization for three years, and
a committed $450 million delayed-draw term loan to support 2007
and 2008 bond maturities -- provides flexibility should earnings
growth or proceeds from the sale of the music business and certain
radio stations not meet expectations.
The B1 rating also incorporates an assumption that Univision will
continue to benefit from the Spanish-language programming license
agreement with Grupo Televisa, S.A. de C.V and Venevision that
provides Univision with the exclusive broadcast rights in the U.S.
and Puerto Rico to Televisa and Venevision programming through
2017.
However, Moody's noted the contentious relationship and current
litigation between Univision and Televisa as a potential risk.
While the B1 CFR assumes that the PLA continues in its current
form, there is a high probability, in the rating agency's view,
that Televisa will continue to place pressure on Univision for
additional fees or an amendment to the terms of the agreement.
Moody's believes the highly levered capital structure limits
Univision's flexibility to renegotiate the terms of the contract
as part of any resolution of Televisa's litigation to terminate
the PLA. Should the PLA remain in place, contract extension risk
creates uncertainty in the company's long-term cash flow prospects
due to the approximate 36% share of Univision gross advertising
revenue related to Televisa programming.
The stable rating outlook reflects Moody's belief that the company
will utilize a growing earnings and free cash flow stream and an
estimated $500 - $550 million of proceeds from identified asset
sales to reduce debt, including the second lien asset sale bridge,
over the intermediate term. The ratings could be downgraded if
the company does not meet management's expectations of debt-to-
EBITDA to 9.0x within two years of the acquisition closing.
The confirmation of the Ba3 rating on the existing senior
unsecured notes reflects Moody's expectation that the notes will
benefit from an identical guarantee and collateral package as the
new senior secured credit facility post closing as a result of
tripping the negative pledge in the note indenture.
Univision Communications Inc. is the largest Spanish-language
media company in the United States. The company is headquartered
in Los Angeles with television network operations in Miami and
television and radio stations and sales offices in major cities
throughout the United States. Annual revenues approximate
$2.2 billion.
UNIVISION COMMS: Moody's Holds B1 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service confirmed Univision Communications,
Inc.'s B1 Corporate Family rating and the Ba3 rating on
Univision's existing senior unsecured notes, concluding the review
for downgrade initiated on June 27, 2006 in connection with the
proposed $13.5 billion acquisition of the company by a consortium
of private equity owners.
Moody's also assigned a Ba3 rating to Umbrella Acquisition, Inc.'s
proposed $8.2 billion guaranteed senior secured credit facility
and B3 ratings to Umbrella's proposed $500 million guaranteed
second lien senior secured asset sale bridge and $1.5 billion
guaranteed senior unsecured notes. Umbrella is an acquisition
vehicle owned by the equity sponsor group that will be merged into
Univision to complete the acquisition with Univision continuing as
the survivor and borrower post closing.
The rating outlook is stable.
Confirmations:
* Univision Communications Inc
-- Corporate Family Rating, Confirmed at B1
-- Probability of Default Rating, Confirmed at B1
-- Multiple Seniority Shelf, Confirmed at B3
-- Senior Unsecured Regular Bond/Debenture, Confirmed at Ba3
Assignments:
* Umbrella Acquisition, Inc.
-- Corporate Family Rating, Assigned B1
-- Probability of Default Rating, Assigned B1
-- Senior Secured Bank Credit Facility, Assigned Ba3, LGD3,
39%
-- Senior Secured Second Lien Bridge Term Loan, Assigned B3,
LGD5, 86%
-- Senior Unsecured Regular Bond/Debenture, Assigned B3,
LGD6, 92%
* Univision Communications Inc
-- Senior Unsecured Regular Bond/Debenture, Assigned LGD3,
39% (Ba3 rating confirmed)
Outlook Actions:
* Univision Communications Inc
-- Outlook, Changed To Stable From Rating Under Review
* Umbrella Acquisition, Inc.
-- To Stable from No Outlook
The confirmation of the B1 rating reflects Moody's belief that
Univision's strong and leading market position in Spanish-language
media within the United States, good operating margins, and
favorable intermediate-term growth prospects, supported by
Hispanic demographic trends, will allow the company to manage the
very high 12.4x debt-to-EBITDA leverage resulting from the
acquisition.
Moody's believes the acquisition financing structure -- including
the ability to PIK up to 100% of the interest on the $1.5 billion
senior unsecured notes through 2011, an undrawn $750 million
revolver, no required term loan amortization for three years, and
a committed $450 million delayed-draw term loan to support 2007
and 2008 bond maturities -- provides flexibility should earnings
growth or proceeds from the sale of the music business and certain
radio stations not meet expectations.
The B1 rating also incorporates an assumption that Univision will
continue to benefit from the Spanish-language programming license
agreement with Grupo Televisa, S.A. de C.V and Venevision that
provides Univision with the exclusive broadcast rights in the U.S.
and Puerto Rico to Televisa and Venevision programming through
2017.
However, Moody's noted the contentious relationship and current
litigation between Univision and Televisa as a potential risk.
While the B1 CFR assumes that the PLA continues in its current
form, there is a high probability, in the rating agency's view,
that Televisa will continue to place pressure on Univision for
additional fees or an amendment to the terms of the agreement.
Moody's believes the highly levered capital structure limits
Univision's flexibility to renegotiate the terms of the contract
as part of any resolution of Televisa's litigation to terminate
the PLA. Should the PLA remain in place, contract extension risk
creates uncertainty in the company's long-term cash flow prospects
due to the approximate 36% share of Univision gross advertising
revenue related to Televisa programming.
The stable rating outlook reflects Moody's belief that the company
will utilize a growing earnings and free cash flow stream and an
estimated $500 - $550 million of proceeds from identified asset
sales to reduce debt, including the second lien asset sale bridge,
over the intermediate term. The ratings could be downgraded if
the company does not meet management's expectations of debt-to-
EBITDA to 9.0x within two years of the acquisition closing.
The confirmation of the Ba3 rating on the existing senior
unsecured notes reflects Moody's expectation that the notes will
benefit from an identical guarantee and collateral package as the
new senior secured credit facility post closing as a result of
tripping the negative pledge in the note indenture.
Univision Communications Inc. is the largest Spanish-language
media company in the United States. The company is headquartered
in Los Angeles with television network operations in Miami and
television and radio stations and sales offices in major cities
throughout the United States. Annual revenues approximate
$2.2 billion.
USEC INC: Ohio American Centrifuge Project to Cost $2.3 Billion
---------------------------------------------------------------
USEC Inc. reported its revised cost projection of $2.3 billion for
building the American Centrifuge Plant and its revised schedule
for completing the uranium enrichment plant in Piketon, Ohio.
In 2006, USEC initiated a complete, bottom-up review of the
American Centrifuge program to develop a better estimate of the
cost and schedule for constructing the enrichment plant.
USEC reported in November 2006 that its new estimate would be
significantly higher than an initial estimate of $1.7 billion that
was developed in 2002 based on extrapolated data from the U.S.
Department of Energy's centrifuge project.
"The USEC management team used a variety of data points to
develop an updated estimate for building this essential facility
for America's energy future," said John K. Welch, USEC president
and chief executive officer. "Our revised cost projection of
$2.3 billion also used input from our project participants --
Honeywell International, Alliant Techsystems, Boeing Company
and Fluor Enterprises.
"We have also revised our schedule, reflecting the previously
announced delay in beginning Lead Cascade operations that allowed
for additional testing and demonstration of the individual
machines. The time we invested in obtaining better performance
proved to be very beneficial. We have frozen the design of our
Lead Cascade centrifuge machine with tested performance that
exceeds our initial target by approximately 10 percent," he said.
"This is an ambitious plan from both a cost and a schedule
perspective, and the target estimate assumes cost savings we are
working to achieve in 2007. A year from now, as we begin to
finalize manufacturing contracts, we should have more data that
will improve our ability to more accurately estimate the ultimate
cost of the commercial uranium enrichment plant. This is our
target estimate based on the information that we have currently,"
Welch added.
About USEC Inc.
USEC Inc. (NYSE:USU) supplies enriched uranium fuel for commercial
nuclear power plants.
* * *
As reported in the Troubled Company Reporter on Oct. 23, 2006,
Moody's Investors Service affirmed its B1 Corporate Family Rating
for USEC Inc. and its B3 rating on the company's $150 million
issue of 6.75% senior unsecured notes due 2009. Moody's also
assigned an LGD5 rating to those loans, suggesting noteholders
will experience a 75% loss in the event of a default.
WALCO OIL: Selling Convenience Store and Gas Station on Feb. 21
---------------------------------------------------------------
Walco Oil Company Inc. will be selling its operating convenience
store and former gas station in Natchez, Miss., at an auction
scheduled by the U.S. Bankruptcy Court for the Southern District
of Mississippi at 4:00 p.m. on Feb 21, 2007.
The auction will be held at 1108A North Dixie Avenue in
Elizabethtown, Kentucky.
To qualify, sealed bids must be received no later than the auction
date, and must accompany a $10,000 deposit and proof of financial
availability to close the transaction.
For copies of the sealed bid form and for further information,
contact:
Tim Mast
Project Manager
Tranzon Asset Advisors
1108-A N. Dixie Avenue
Elizabethtown, KY 42701
Tel: (270)769-0284
Based in Richton, Mississippi, Walco Oil Company Inc. is an oil
petroleum retailer. The company filed a chapter 11 petition on
April 13, 2006 (Bankr. S. D. Miss. Case No. 06-50275). Craig M.
Geno, Esq. at Harris & Geno, PLLC represents the Debtor. When the
Debtor filed for bankruptcy, it listed assets and debts between $1
million to $10 million.
WINDSTREAM CORP: Moody's Rates Proposed $500 Million Notes at Ba3
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to the
$500 million proposed senior note issuance at Windstream
Corporation.
The proceeds of the notes will be used to refinance an equal
amount of Windstream's senior secured term loan. Moody's also
affirmed Windstream's Ba2 corporate family rating and the Ba3
ratings of the company's existing senior unsecured debt.
As part of the rating action, Moody's has upgraded the ratings of
Windstream's senior secured bank facilities, Valor
Telecommunications' 7.75% senior secured notes and Windstream
Holdings of the Midwest, Inc.'s 6.5% notes due 2013 to Baa3, from
Ba1, while affirming the Baa2 rating of Windstream Georgia
Communications Corp.
The outlook is stable.
* Windstream Corporation
-- Corporate Family Rating at Affirmed Ba2
-- $500 million Senior Secured Revolving Credit Facility
Upgraded to Baa3, LGD 2-19%, from Ba1, LGD2-24%
-- $500 million Senior Secured Term Loan A Upgraded to Baa3,
LGD 2-19%, from Ba1, LGD2-24%
-- $1,900 million Senior Secured Term Loan B Upgraded to
Baa3, LGD 2-19%, from Ba1, LGD2-24%
-- $500 million of new Senior Notes Due 2019 Assigned Ba3,
LGD5-75%
-- $800 million Senior Notes due 2013 Affirmed Ba3, LGD5-75%
-- $1,703 million Senior Notes due 2016 -- Affirmed Ba3,
LGD5-75%
-- Speculative Grade Liquidity Rating at SGL-1
The outlook is stable.
* Valor Telecommunications Enterprises, LLC
-- $400 million Senior Notes due 2015 Upgraded to Baa3, LGD
2-19%, from Ba1, LGD2-24%
The outlook is stable.
* Windstream Holdings of the Midwest, Inc
-- $100 million Senior Notes due 2028 Upgraded to Baa3, LGD
2-19%, from Ba1, LGD2-24%
* Windstream Georgia Communications Corp.:
-- $80 million Senior Notes due 2013 Affirmed Baa2, LGD 1-0%
The Ba2 corporate family rating reflects Windstream's high debt
levels and the expected downward pressure on wireline revenue and
cash flow growth in the future.
Due to the company's high dividend payments, cash flows available
for debt reduction are likely to remain below 3% of total debt in
the next two years, and Moody's does not expect debt to decline
below 3.3x EBITDA over the ratings horizon. The ratings and the
outlook benefit from the stability of the company's operations,
and management's track record of delivering on expected results.
Moody's believes that although the proposed transaction will
generate modest interest cost savings, it will not have a material
impact on the company's credit profile. The upgrade of the
company's secured debt is in accordance with Moody's Loss Given
Default methodology, and reflects the reduction in the secured
debt relative to the total outstanding debt, leading to a higher
prospective recovery for secured creditors in the event of a
default.
Windstream, headquartered in Little Rock, Arkansas, is an ILEC
formed via merger of Alltel's wireline operations and Valor. The
company provides telecommunications services in 16 states with
approximately 3.2 million access lines in service and generates
about $3.2 billion in annual revenues.
WINDSTREAM CORPORATION: Prices New $500 Million Senior Notes
------------------------------------------------------------
Windstream Corporation has priced its reported offering of
$500 million of senior notes due 2019. The interest rate on the
notes has been set at 7%. The offering is expected to be
completed this month.
The company intends to use the net proceeds from the offering to
repay approximately $500 million of amounts outstanding under the
term loan portion of its senior secured credit facilities.
Headquartered in Little Rock, Arizona, Windstream Corp. is an ILEC
formed via merger of Alltel's wireline operations and Valor. The
company provides telecommunications services in 16 states with
approximately 3.3 million access lines in service and about
$3.2 billion in annual revenues.
* * *
As reported in the Troubled Company Reporter on Dec. 19, 2006,
Moody's Investors Service affirmed Windstream Corporation's
Ba2 corporate family and Ba1 Senior secured revolving credit
facility on the reported split-off of its directory publishing
business to affiliates of Welsh, Carson, Anderson and Stowe.
ZAIS INVESTMENT: Moody's Junks Ratings on $10 Million Debentures
----------------------------------------------------------------
Moody's Investors Service upgraded the ratings on the notes issued
in 1999 by ZAIS Investment Grade Limited, a managed structured
finance collateralized debt obligation issuer:
* The $25,000,000 Class A-1 Floating Rate Notes Due 2014
-- Prior Rating: Baa2, on watch for possible upgrade
-- Current Rating: Aaa
* The $30,000,000 Class A-2 Fixed Rate Notes Due 2014
-- Prior Rating: Baa2, on watch for possible upgrade
-- Current Rating: Aaa
* The $206,500,000 Class A-3 Floating Rate Notes Due 2014
-- Prior Rating: Baa2, on watch for possible upgrade
-- Current Rating: Aaa
* The $34,000,000 Class B Floating Rate Notes Due 2014
-- Prior Rating: Ca, on watch for possible upgrade
-- Current Rating: Baa3
* The $5,000,000 Class C-1 Floating Rate Notes Due 2014
-- Prior Rating: C, on watch for possible upgrade
-- Current Rating: Caa2
* The $5,000,000 Class C-2 Fixed Rate Notes Due 2014
-- Prior Rating: C, on watch for possible upgrade
-- Current Rating: Caa2
The rating actions reflect the repayment of the deferred interest
balance on all notes, as well as the ongoing delevering of the
transaction, according to Moody's.
* Huron Consulting Promotes 12 Professionals to Managing Directors
------------------------------------------------------------------
Huron Consulting Group promoted 12 professionals to the role of
managing director. The promotions are in connection with the
recent acquisitions of Glass & Associates, Inc., a turnaround and
restructuring firm, and Wellspring Partners LTD, a management
consulting firm specializing in integrated performance improvement
services for hospitals and health systems.
"We are looking forward to the contributions of these talented
individuals who recently joined us from Wellspring and Glass,"
said Gary E. Holdren, chairman and chief executive officer,
Huron Consulting Group. "Huron congratulates them on this
important milestone in their careers."
Huron's promotes these professionals to managing directors:
* Michael G. Cadwell, Health and Education Consulting
practice (Chicago);
* Richard D. Caruso, Corporate Consulting practice (New York);
* B. Gay Casey, Health and Education Consulting
practice (Chicago);
* Sherman K. Edmiston III, Corporate Consulting
practice (New York);
* Thomas E. Evans, Corporate Consulting
practice (Detroit);
* Matthew W. Harrison, Health and Education Consulting
practice (Chicago);
* James P. Martin, Health and Education Consulting
practice (Chicago);
* Paul R. Osborne, Health and Education Consulting
practice (Chicago);
* Jack S. Partridge, Health and Education Consulting
practice (Chicago);
* Douglas E. Pedersen, Health and Education Consulting
practice (Chicago);
* J. Cathy Smith, Health and Education Consulting
practice (Chicago);
* Gary A. Van House, Health and Education Consulting
practice (Chicago);
About Huron Consulting Group
Huron Consulting Group (NASDAQ: HURN) --
http://www.huronconsultinggroup.com/-- helps clients effectively
address complex challenges that arise in litigation, disputes,
investigations, regulatory compliance, procurement, financial
distress, and other sources of significant conflict or change.
The company also helps clients deliver superior customer and
capital market performance through integrated strategic,
operational, and organizational change. Huron provides services
to a wide variety of both financially sound and distressed
organizations, including Fortune 500 companies, medium-sized
businesses, leading academic institutions, healthcare
organizations, and the law firms that represent these various
organizations.
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:
In re Avanza Marine Corp.
Bankr. M.D. Fla. Case No. 07-00367
Chapter 11 Petition filed February 2, 2007
See http://bankrupt.com/misc/flmb07-00367.pdf
In re The Ranch Wine & Spirits, LLC
Bankr. D. Colo. Case No. 07-10853
Chapter 11 Petition filed February 2, 2007
See http://bankrupt.com/misc/cob07-10853.pdf
In re William Fulton Broemer
Bankr. S.D. Tex. Case No. 07-30674
Chapter 11 Petition filed February 2, 2007
See http://bankrupt.com/misc/txsb07-30674.pdf
In re Grace Community Baptist Church, Inc.
Bankr. E.D. Pa. Case No. 07-10686
Chapter 11 Petition filed February 4, 2007
See http://bankrupt.com/misc/paeb07-10686.pdf
In re Advantage Plastic Surgery, P.C.
Bankr. N.D. Ga. Case No. 07-61889
Chapter 11 Petition filed February 5, 2007
See http://bankrupt.com/misc/ganb07-61889.pdf
In re Africa's Children's Fund, Inc.
Bankr. N.D. Ga. Case No. 07-62020
Chapter 11 Petition filed February 5, 2007
See http://bankrupt.com/misc/ganb07-62020.pdf
In re Brock Development Company
Bankr. E.D. Va. Case No. 07-10276
Chapter 11 Petition filed February 5, 2007
See http://bankrupt.com/misc/vaeb07-10276.pdf
In re Dumfries Auto Body and Frame, Inc.
Bankr. E.D. Va. Case No. 07-10272
Chapter 11 Petition filed February 5, 2007
See http://bankrupt.com/misc/vaeb07-10272.pdf
In re Harney/Tyson Enterprises, Inc.
Bankr. S.D. Ga. Case No. 07-10217
Chapter 11 Petition filed February 5, 2007
See http://bankrupt.com/misc/gasb07-10217.pdf
In re Hollywood Party Rentals Inc.
Bankr. C.D. Calif. Case No. 07-10921
Chapter 11 Petition filed February 6, 2007
See http://bankrupt.com/misc/cacb07-10921.pdf
In re Jerry Beran
Bankr. N.D. Ga. Case No. 07-61955
Chapter 11 Petition filed February 5, 2007
See http://bankrupt.com/misc/ganb07-61955.pdf
In re Pedro Ferrao Rivera
Bankr. D. P.R. Case No. 07-00548
Chapter 11 Petition filed February 5, 2007
See http://bankrupt.com/misc/prb07-00548.pdf
In re The Parker Law Firm, PLC
Bankr. D. Ariz. Case No. 07-00449
Chapter 11 Petition filed February 5, 2007
See http://bankrupt.com/misc/azb07-00449.pdf
In re Back Bay Properties, LLC
Bankr. D. Maine Case No. 07-20078
Chapter 11 Petition filed February 6, 2007
See http://bankrupt.com/misc/meb07-20078.pdf
In re Calvin Davis & Associates, LLC
Bankr. E.D. La. Case No. 07-10215
Chapter 11 Petition filed February 6, 2007
See http://bankrupt.com/misc/laeb07-10215.pdf
In re Dac N Sac, Inc.
Bankr. N.D. Calif. Case No. 07-50324
Chapter 11 Petition filed February 6, 2007
See http://bankrupt.com/misc/canb07-50324.pdf
In re Acanto Crown City, LLC
Bankr. C.D. Calif. Case No. 07-10985
Chapter 11 Petition filed February 7, 2007
See http://bankrupt.com/misc/cacb07-10985.pdf
In re Complete Sleep Analysis, LLC
Bankr. D. Ariz. Case No. 07-00494
Chapter 11 Petition filed February 7, 2007
See http://bankrupt.com/misc/azb07-00494.pdf
In re Michael A. Goldman
Bankr. D. Mass. Case No. 07-10722
Chapter 11 Petition filed February 7, 2007
See http://bankrupt.com/misc/mab07-10722.pdf
In re Applied Mailing Technology, Inc.
Bankr. D. Minn. Case No. 07-40433
Chapter 11 Petition filed February 8, 2007
See http://bankrupt.com/misc/mnb07-40433.pdf
In re Matthew J. Yaquinto, Jr.
Bankr. E.D. Mich. Case No. 07-42465
Chapter 11 Petition filed February 8, 2007
See http://bankrupt.com/misc/mieb07-42465.pdf
In re Clyde's CAD & Design, LLC
Bankr. D. Ariz. Case No. 07-00531
Chapter 11 Petition filed February 9, 2007
See http://bankrupt.com/misc/azb07-00531.pdf
In re Cody Equipment & Leasing Corporation, Inc.
Bankr. D. Ariz. Case No. 07-00530
Chapter 11 Petition filed February 9, 2007
See http://bankrupt.com/misc/azb07-00530.pdf
In re Convivo Bistro, LLC
Bankr. D. Ariz. Case No. 07-00527
Chapter 11 Petition filed February 9, 2007
See http://bankrupt.com/misc/azb07-00527.pdf
In re Roger D. Hall
Bankr. N.D. Ala. Case No. 07-80390
Chapter 11 Petition filed February 9, 2007
See http://bankrupt.com/misc/alnb07-80390.pdf
In re David Crawford
Bankr. D. Conn. Case No. 07-30311
Chapter 11 Petition filed February 10, 2007
See http://bankrupt.com/misc/ctb07-30311.pdf
In re Appling Auto Supply, Inc.
Bankr. S.D. Ga. Case No. 07-20105
Chapter 11 Petition filed February 12, 2007
See http://bankrupt.com/misc/gasb07-20105.pdf
In re ETI, LLC
Bankr. D. N.J. Case No. 07-11869
Chapter 11 Petition filed February 12, 2007
See http://bankrupt.com/misc/njb07-11869.pdf
In re Hawke Realty, Inc.
Bankr. E.D. Mich. Case No. 07-42697
Chapter 11 Petition filed February 12, 2007
See http://bankrupt.com/misc/mieb07-42697.pdf
In re Paul Archie Phillips
Bankr. N.D. Ala. Case No. 07-00662
Chapter 11 Petition filed February 12, 2007
See http://bankrupt.com/misc/alnb07-00662.pdf
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy,
Joel Anthony G. Lopez, Cecil R. Villacampa, Cherry A. Soriano-
Baaclo, Jason A. Nieva, Melvin C. Tabao, Tara Marie A. Martin,
Frauline S. Abangan, and Peter A. Chapman, Editors.
Copyright 2007. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***