/raid1/www/Hosts/bankrupt/TCR_Public/080110.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, January 10, 2008, Vol. 12, No. 8
Headlines
ABN AMRO: Fitch Junks Rating on 2003-12 Class B-4 Certificates
ACANDS INC: Judge Fitzgerald Approves Amended Disclosure Statement
ACANDS INC: Amended Plan Confirmation Hearing Set on April 21
ACTIVBIOTICS INC: Bidding for Assets to End on February 1
ALERIS INT'L: To Phase Out Toronto Coil Coating Facility
ALL AMERICAN: Creditors Committee Files Liquidating Plan
ALLIANT TECHSYSTEMS: Taps Marchetto to Lead New Space Systems Biz
ALLIANT TECHSYSTEMS: To Acquire MDA's Unit for CDN$1.325 Billion
AMERICAN HOME: Court Okays Cutting DIP Commitment by $15 Million
AMERICAN HOME: Limited Recourse Facility Up by $50 Million
AMERICAN HOME: Gets OK to Set Servicing Business Sale Consummation
AXIUM INTERNATIONAL: Shuts Down Offices Worldwide, Sources Say
BEAR STEARNS: Moody's Junks 14 Tranches' Ratings on Delinquency
BOSTON GENERATING: S&P Lowers Rating on $1.13 Billion Loan to B+
BOSTON SCIENTIFIC: S&P Ratings Unmoved by Affirmed Court Ruling
BRADLEY RECKER: Voluntary Chapter 11 Case Summary
BSI CORP: Case Summary & 20 Largest Unsecured Creditors
BURKE TRUCKING: Case Summary & 12 Largest Unsecured Creditors
CENTRAL ILLINOIS: Illinois AG Looking into Bankruptcy Filing
CHC HELICOPTER: High Leverage Prompts Moody's to Change Outlook
CINCINNATI BELL: Sept. 30 Balance Sheet Upside-Down by $671.2 Mil.
CITIUS II: Moody's Junk Ratings on Two Note Classes
CLASS V FUNDING: Moody's Cuts Rating on Preference Shares
CONSOLIDATED HEALTH: Case Summary & 20 Largest Unsecured Creditors
CONSTELLATION BRANDS: $700MM Notes Exchange Offer Expires Today
CONSTELLATION BRANDS: Arm Buys 50% Stake in Planet 10 Project
CONSTELLATION BRANDS: Earns $119.6 Mil. in 3rd Qtr. Ended Nov. 30
CONTINENTAL GLOBAL: Signs $270 Mil. Merger Deal with Joy Global
CONTINENTAL GLOBAL: $270MM Deal Cues S&P's Positive CreditWatch
COUNTRYWIDE FIN'L: Says December Total Loan Fundings Beat Forecast
CUMMINS INC: Earns $184 Million in 2007 Third Quarter
CW MINING: Involuntary Chapter 11 Case Summary
DELPHINUS CDO: S&P Places Ratings Under Negative Watch
DELTA FINANCIAL: GAIC Wants Stay Lifted to Cancel Surety Bonds
DELTA FINANCIAL: Millers Sell 4,237,895 Shares in Private Deals
DEUTSCHE BANK: Moody's Downgrades ratings on 62 Tranches
DIRECT INSITE: Sept. 30 Balance Sheet Upside-Down by $1.6 Million
DYADIC INTERNATIONAL: Unit Gets Default Notice from Emalfarb Trust
EL PASO CORP: Earns $155 Million in 2007 Third Quarter
ENTERGY GULF: S&P Maintains Rating on Preferred Stock at BB+
FAIRPOINT COMM: Urges Vermont Public Service Board to Okay Buy
FEDDERS CORP: Runs Short of Sec. 363 Conditions, U.S. Trustee Says
FEDERAL-MOGUL: Moody's Holds Low-B Ratings with Stable Outlook
FINZER IMAGING: Case Summary & 13 Largest Unsecured Creditors
FIRST MAGNUS: Panel Denies Snobbing Snell & Wilner Retention Issue
FIRST MAGNUS: May Pursue Tucson Lot Sale; Pays Tax to Pima County
FORD MOTOR: Focused Talks Spur Bidder Tata Motors' High Bond Risk
G REIT INC: Discloses Intent to Form Liquidation Trust
HARRAH'S ENTERTAINMENT: Prices Cash Tender Offer for Senior Notes
HEALTHSOUTH CORP: Sept. 30 Balance Sheet Upside-Down by $1.5 Bil.
HMSC CORP: S&P Changes Outlook to Negative and Retains B Rating
HYPPCO FINANCE: Fitch Revises Recovery Rating on $11.2 Mil. Notes
IAP WORLDWIDE: Likely Restructuring Cues S&P to Cut Ratings
IMPAC SECURED: Moody's Lowers Ratings on 11 Tranches to Low-B
KELLWOOD CO: Completes $162MM Sale of Smart Shirts Operations
KRONOS ADVANCED: Lenders Extend Debt Maturity to February 29
KRONOS ADVANCED: Two Investors Elect Debt-for-Equity Swap
LARRY CHAO: Case Summary & Two Largest Unsecured Creditors
MICHAEL KIRKBRIDE: Case Summary & Five Largest Unsecured Creditors
MIDDLE MOUNTAIN: Case Summary & Five Largest Unsecured Creditors
MOVIE GALLERY: Wants Court Approval on Cure Procedures
MOVIE GALLERY: Wants to Pursue Whitaker & Williams Litigations
MOVIE GALLERY: Wants to Reject Boards Inc. License Agreement
N-STAR REAL: Fitch Holds Low-B Ratings on Two Note Classes
NASDAQ STOCK: S&P Upgrades Counterparty Credit Rating
NATIONAL CITY: Moody's Puts B- Financial Strength Rating on Review
NATIONWIDE HEALTH: Earns $57.7 Million in 2007 Third Quarter
NATUROPATHIC LABORATORIES: Voluntary Chapter 11 Case Summary
NORTH PARK: Wants to Use Bank Midwest's Cash Collateral
ORANGE REGIONAL: Moody's Holds Ba1 Rating on $260 Million Bonds
PACIFIC LUMBER: Panel Has Until Jan. 31 to File Competing Plan
PACIFIC LUMBER: Withdraws Amended Chapter 11 Plan
PACIFIC LUMBER: Wants Court Approval on MAXXAM Log Purchase Pact
PAUL SHERIDAN: Case Summary & 17 Largest Unsecured Creditors
PERRY ELLIS: To Acquire Liz Claiborne Brands for $37 Million
PHARMANET DEV'T: Moody's Lifts $45 Mil. Facility's Rating to Ba3
PROPEX INC: Posts $60.7 Mil. Net Loss in Quarter Ended Sept. 30
QUECHAN TRIBE: Fitch Assigns 'BB' Rating on Gaming Revenue Bonds
SHARPE LLC: Case Summary & Three Largest Unsecured Creditors
SVI MEDIA: Court Okays Use of Secured Lenders' Cash Collateral
SWEET TRADITIONS: Mulls Sale of 21 Krispy Kreme Stores to Allied
TARPON INDUSTRIES: AMEX to Delist Securities on January 17
THOMAS BLICKHAHN: Case Summary & 20 Largest Unsecured Creditors
TOPPS MEAT: Court Okays Sale of Assets for $1.25 Million
US ENERGY: Files for Chapter 11 Bankruptcy Protection in New York
US ENERGY: Case Summary & 40 Largest Unsecured Creditors
WARNEX INC: Gets Waiver on Quarterly Capital Repayment from SIPAR
WHEELING ISLAND: Note Redemption Cues Moody's Rating Withdrawal
WHITEFORD BAPTIST: Case Summary & 19 Largest Unsecured Creditors
* Andrew Curie Joins as Partner in Venable's Baltimore Office
* Chadbourne & Parke Names Six Partners for US, Russia & London
* Kroll Opens Grenada Office to Serve Eastern Caribbean Clients
* M. Mann Joins Sheppard Mullin as Finance and Bankruptcy Partner
* Proskauer Rose Outlines Litigation & Regulation Top Issues
* Sallie Mae's Credit Quality Worsens as Risk Indicators Rise
* Fitch Expects Continued Weakness in Mortgage and Housing Markets
* Chapter 11 Cases with Assets & Liabilities Below $1,000,00
*********
ABN AMRO: Fitch Junks Rating on 2003-12 Class B-4 Certificates
--------------------------------------------------------------
Fitch Ratings has taken rating actions on these ABN AMRO 2003-12
mortgage pass-through certificates:
-- Class A affirmed at 'AAA';
-- Class M affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'BBB';
-- Class B-3 downgraded to 'B' from 'BB';
-- Class B-4 downgraded to 'C/DR5' from 'B'.
The affirmations reflect a stable relationship between credit
enhancement and expected losses, and affect approximately $142.09
million in outstanding certificates. The downgrades reflect
deterioration in the relationship between CE and expected losses,
and affect approximately $844,306 in outstanding certificates.
The pool factor is approximately 48%, and the transaction is 48
months seasoned. The cumulative losses are approximately 0.19%.
The trust is secured by conventional, 30-year fixed-rate mortgage
loans. All of the loans were originated by ABN AMRO Mortgage
Group, Inc. Washington Mutual Mortgage Securities Corp. (rated
'RPS2+' by Fitch) acts as servicer.
ACANDS INC: Judge Fitzgerald Approves Amended Disclosure Statement
------------------------------------------------------------------
Hononrable Judith K. Fitzgerald of the United States Bankruptcy
Court for the District of Delaware approved the adequacy of ACandS
Inc.'s Second Amended Disclosure Statement explaining its Second
Amended Chapter 11 Plan of Reorganization dated Nov. 19, 2007.
Overview of the Plan
The Amended Plan provides for the issuance of injunctions under
Section 524(g) of the Bankruptcy Code that result in channeling of
certain asbestos-related liabilities of the Debtor into a trust.
The Debtor says that its $449,000,000 insurance claim against
Travelers Casualty and Surety Company is its most valuable asset.
The Debtor also says that a Trust will be created which will (i)
possess the status and features of a "qualified settlement fund"
for the purposes of Section 468B of the IRC, (ii) assume the
Debtor's liabilities with respect to all Asbestos Personal Injury
Claims, and (iii) use Trust Assets and income to pay Asbestos
Personal Injury Claims, as provided in the Plan and Trust
Documents.
The Trust will be funded with various assets, which includes,
among others things:
a) an $11,600,000 cash contribution by Irex Corporation;
b) 100% of common stock of the Reorganized Debtor and 100% of
the common stock of the Debtor;
c) Pre-Petition trust assets and remaining collateral in the
Pre-Petition trust as of the effective date; and
d) the ACandS QSF Trust, which had a value of $2,665,336 as of
July 31, 2007.
Treatment of Claims
Under the Amended Plan, all Administrative and Priority Tax Claims
will be receive cash in full satisfaction of the claim.
Priority Claims against the Debtor will receive, either:
a) cash in the allowed amount of its priority claim; or
b) other, lesser treatment as agreed in writing by the holder
and the Debtor.
Holders of this claim is expected to receive 100% of the allowed
amount of their claims.
Holders of Non-Asbestos Secured Claims will retain, unlatered,
legal, equitable and contractual rights, including any liens that
secure the allowed claim. The Debtor further says that holders of
this claim will also receive 100% of the allowed amount of their
claims.
All holders of Asbestos Personal Injury Claims will be assumed by
the Trust without further act and will be channeled to and
resolved in accordance with the asbestos personal injury claim
treatment.
Holders of General Unsecured Claims will receive cash equal to 10%
of their claims.
Holders of Non-Asbestos Unsecured Insured Litigation Claims will
be allowed to liquidate their claims. The recovery of these
claims depends on the amount of any available applicable insurance
coverage for each claim. If these holders have not received 10%
of the principal amount of their allowed claim, the Debtor says
that it will distribute cash to these holders in the sum of 10% of
the principal amount plus 6% interest rate.
Holders of Equity Interests will retain their interest under the
Amended Plan.
About ACandS
Headquartered in Lancaster, Pennsylvania, ACandS Inc. was an
insulation contracting company, primarily engaged in the
installation of thermal and mechanical insulation. In later
years, the Debtor also performed a significant amount of asbestos
abatement and other environmental remediation work. The Company
filed for chapter 11 protection on Sept. 16, 2002 (Bankr. Del.
Case No. 02-12687).
Laura Davis Jones, Esq., Curtis A. Hehn, Esq., James E. O'Neill,
Esq., and Michael Paul Migliore, Esq., at Pachulski Stang Ziehl
Young Jones & Weintraub, P.C., represent the Debtor in its
restructuring efforts.
Kathleen Campbell Davis, Esq., Aileen F. Maguire, Esq., Mark T
Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine,
LLC, represent the Official Committee of Asbestos Personal Injury
Claimants.
At Dec. 31, 2006, the Debtor disclosed that it had book assets of
approximately $11.78 million and book liabilities, including
liabilities for the payment of asbestos-related and other claims
of $11.78 million. At June 30, 2007, net book assets before
liabilities for asbestos-related and other claims was
approximately $9,010,000.
ACANDS INC: Amended Plan Confirmation Hearing Set on April 21
-------------------------------------------------------------
the Honorable Judith K. Fitzgerald of the United States Bankruptcy
Court for the District of Delaware set April 21, 2008, at 11:30
a.m., to consider confirmation of AcandS Inc.'s Second Amended
Chapter 11 Plan of Reorganization.
Objections to the Plan, if any, are due March 24, 2008.
Headquartered in Lancaster, Pennsylvania, ACandS Inc. was an
insulation contracting company, primarily engaged in the
installation of thermal and mechanical insulation. In later
years, the Debtor also performed a significant amount of asbestos
abatement and other environmental remediation work. The Company
filed for chapter 11 protection on Sept. 16, 2002 (Bankr. Del.
Case No. 02-12687).
Laura Davis Jones, Esq., Curtis A. Hehn, Esq., James E. O'Neill,
Esq., and Michael Paul Migliore, Esq., at Pachulski Stang Ziehl
Young Jones & Weintraub, P.C., represent the Debtor in its
restructuring efforts.
Kathleen Campbell Davis, Esq., Aileen F. Maguire, Esq., Mark T
Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine,
LLC, represent the Official Committee of Asbestos Personal Injury
Claimants.
At Dec. 31, 2006, the Debtor disclosed that it had book assets of
approximately $11.78 million and book liabilities, including
liabilities for the payment of asbestos-related and other claims
of $11.78 million. At June 30, 2007, net book assets before
liabilities for asbestos-related and other claims was
approximately $9,010,000.
ACTIVBIOTICS INC: Bidding for Assets to End on February 1
---------------------------------------------------------
ActivBiotics, Inc., said that upon reviewing strategic options
after its clinical trial of Rifalazil failed in peripheral
arterial disease patients, it will sell all or substantially all
of its assets on an "as is" basis through an Assignment for the
Benefit of Creditors process.
The Assignee of the assets is Mr. Joseph Finn, Jr., CPA, of Finn,
Warnke & Gayton.
The bidding for the assets, which may be purchased separately or
in combination, started on Dec. 18, 2007 and will end on Feb. 1,
2008.
"The Board of Directors has decided to pursue the sale of the
company's clinical and preclinical drug assets," said Steven C.
Gilman, Ph.D., Chairman of ActivBiotics. "We believe that our
anti-inflammatory Phase II drug candidate and our antibacterial
library of compounds are of significant value to companies in
those therapeutic areas," added Gilman. Bidding packages have
been assembled and are ready to be distributed subject to a
potential purchaser entering into a standard form confidentiality
agreement.
The company assets available for sale include:
1. A superoxide dismutase (SOD) mimetic program consisting of
two clinical-stage drug candidates, M40403 and M40419, and
a library of 250 small molecules which have potential as
novel therapeutic agents for the treatment of inflammatory
diseases.
M40403, which has been studied in approximately 700
patients/subjects, has an active IND, and a protocol on
file with the FDA under which a Phase II clinical trial
for the treatment of post-operative ileus can be
conducted, and a protocol to initiate a Phase II clinical
trial for the treatment of oral mucositis. The company
has submitted and expects to shortly receive Orphan Drug
Designation status in Europe and has an Orphan Drug
application pending with the US FDA for the treatment of
oral mucositis in subjects with advanced head and neck
cancer. In addition to these indications, the SOD
mimetics have potential therapeutic uses in a variety of
inflammatory disorders including asthma, chronic
obstructive pulmonary disease, and radiation protection,
stroke, and ischemia reperfusion injury.
2. An antibacterial library of compounds consisting of
approximately 800 small molecules, all new chemical
entities (NCEs), which may be developed for the treatment
of serious bacterial infections, including complicated
skin and skin structure infections, endocarditis,
osteomyelitis, foreign-body infections, Clostridium
difficile-associated diarrhea (CDAD), as well as peptic
ulcer disease due to Helicobacter pylori, and disease due
to Chlamydia infections. In addition, these NCEs have the
potential to be administered as topical agents for the
treatment of acne and for the eradication of
Staphylococcus aureus in nasal passages.
3. Rifalazil, a clinical stage compound which has been tested
in approximately 600 patients, is a potent antibacterial
agent with activity mainly against pathogenic Gram-
positive bacteria. Rifalazil was found efficacious in a
Phase II Chlamydia STD clinical trial, and, separately, a
protocol has been submitted to the FDA to begin a Phase II
clinical trial in carotid artery atherosclerosis.
Rifalazil has been granted Fast Track designation for the
treatment of CDAD. The company has open INDs to continue
rifalazil development for infectious diseases, and
atherosclerosis-related disease.
Any person interested in purchasing the assets or learning more
about the bidding process should contact the Assignee, Mr. Finn
at:
Joseph F. Finn, Jr., CPA
Finn, Warnke & Gayton
167 Worcester Street, Suite 201
Wellesley Hills, MA 02481-3613.
Tel: (781) 237-8840
ActivBiotics, Inc. -- http://www.activbiotics.com/-- is a
biopharmaceutical company focused on the discovery, development
and commercialization of therapies for the treatment of
inflammatory diseases and bacterial infections.
ALERIS INT'L: To Phase Out Toronto Coil Coating Facility
--------------------------------------------------------
Aleris International Inc. will be permanently closing its Toronto,
Ontario coil coating facility. Production will be phased-out
during the first quarter of 2008 and the site will be permanently
closed shortly thereafter.
The facility, which was acquired by Aleris when it acquired the
downstream aluminum business of Corus plc in 2006, employs
64 people and supplies coated aluminum coil for building and
construction, transportation, distribution and consumer durables
applications.
Aleris expects to take a restructuring charge of approximately $5
million to $6 million related to severance, shutdown costs and
asset impairment. Production will be transferred to other Aleris
facilities in North America and Aleris will continue to provide
the same high quality products and services that customers expect.
Headquartered in Beachwood, Ohio, Aleris International Inc. (NYSE:
ARS) -- http://www.aleris.com/-- manufactures rolled aluminum
products and offers aluminum recycling and the production of
specification alloys. The company also manufactures value-added
zinc products that include zinc oxide, zinc dust and zinc metal.
The company operates 42 production facilities in the United
States, Brazil, Germany, Mexico and Wales, and employs
approximately 4,200 employees.
* * *
As reported in the Troubled Company Reporter on Sept. 21, 2007,
Standard & Poor's Ratings Services revised its outlook on Aleris
International Inc. to negative from stable. At the same time S&P
affirmed its 'B+' corporate credit rating and the other ratings on
the company. Concurrently, S&P assigned a 'B-' rating to the
company's recent $105 million 9% senior notes due 2014, which are
an add-on to the company's existing $600 million 9% senior notes
due 2014.
ALL AMERICAN: Creditors Committee Files Liquidating Plan
--------------------------------------------------------
The Official Committee of Unsecured Creditors of All American
Semiconductor Inc. delivered to the United States Bankruptcy Court
for the Southern District of Florida a Chapter 11 Plan of
Liquidation and a Disclosure Statement explaining that Plan.
Overview of the Plan
The proposed Plan contemplates the liquidation of all of the
Debtor's assets and to investigate and prosecution of all
litigation claims of the estate. The Plan intends to maximize
the value of recoveries to all valid creditors of the Debtors on
an equitable basis.
The Committee says it will select Kenneth A. Welt as liquidating
trustee who is expected to liquidate and distribute the proceeds
in accordance with the Plan.
Treatment of Claims
Under the Plan, these claims are unimpaired and will be paid in
full:
-- Super-Priority Claims totaling $8,526,060;
-- Administrative Claims totaling $3,227,818;
-- Priority Tax Claims totaling $321,443; and
-- Priority Claims totaling $468,580.
The Debtor relates that holders of Allowed General Unsecured
Claims, totaling $34,205,920, will receive at least 32.93% of
their respective claims plus a pro rata share of the initial
distribution amount.
Holders of Allowed Lender Deficiency Claims, totaling $9,361,650,
is also expected to recover at least 32.93% of their claims.
Equity Interests will be cancelled on the effective date and
holders will not receive anything under the Plan.
A full-text copy of the Disclosure Statement is available for a
fee at:
A full-text copy of the Chapter 11 Plan of Liquidation is
available for a fee at:
About All American Semiconductor
Based in Miami, Florida, All American Semiconductor Inc. (Pink
Sheets: SEMI.PK) -- http://www.allamerican.com/-- distributes
electronic components manufactured by others. The company
distributes a full range of semiconductors including transistors,
diodes, memory devices, microprocessors, microcontrollers, other
integrated circuits, active matrix displays and various board-
level products. All American also distributes passive components
such as capacitors, resistors and inductors; and electromechanical
products such as power supplies, cable, switches, connectors,
filters and sockets. The company also offers complete solutions
for flat panel display products.
In total, the company offers approximately 40,000 products
produced by approximately 60 manufacturers. The company has 36
strategic locations throughout North America and Mexico, as well
as operations in China and Western Europe.
The company and its debtor-affiliates filed for Chapter 11
protection on April 25, 2007 (Bankr. S.D. Fla. Lead Case No.
07-12963). Craig D. Hansen, Esq., Tina M. Talarchyk, Esq., and
Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P.,
represent the Debtors. Mesirow Financial Consulting, LLC serve as
financial advisor to the Committee. William Hawkins, Esq., at
Loeb & Loeb, LLP, is the Official Committee of Unsecured Creditors
general bankruptcy counsel. Jerry M. Markowitz, Esq., at
Markowitz, Davis, Ringel & Trusty, P.A., is the Committee's local
counsel. As of Feb. 28, 2007, the Debtors' balance sheet showed
total assets of $117,634,000 and total debts of $106,024,000.
ALLIANT TECHSYSTEMS: Taps Marchetto to Lead New Space Systems Biz
-----------------------------------------------------------------
Alliant Techsystems Inc. disclosed that Carl A. Marchetto has
joined the company to lead the formation of ATK Space Systems, a
fourth business group for the company which will be established on
April 1, 2008. Mr. Marchetto will become President, ATK Space
Systems once the group is established. Mr. Marchetto was most
recently the Executive Vice President of Orbital Sciences
Corporation's Space Systems Group. He previously held senior
leadership positions at NASA's Jet Propulsion Laboratory, Lockheed
Martin's Astro Space Division, as well as Eastman Kodak, where he
led its Commercial and Government Systems group.
ATK Space Systems will include the existing space operations of
ATK's Mission Systems group. This will be combined with the
Information Systems and Geospatial businesses of MacDonald
Dettwiler and Associates upon completion of the acquisition, which
is expected to close early in the first quarter of the company's
fiscal year 2009. The new group will be a full-spectrum satellite
and space systems business with FY09 revenues of approximately
$900 million. The group will have operations in four Canadian
provinces and numerous facilities across the United States.
"The strategic significance of acquiring MDA's Information Systems
and Geospatial Information Services businesses calls for equally
strategic leadership and vision. Carl possesses these critical
talents and I am very pleased he has joined our company," Dan
Murphy, Chairman and CEO, said. "Carl brings decades of technical
experience, a wealth of customer knowledge, and a focused,
disciplined business approach. Through his leadership, we will
capitalize on significant opportunities in international
commercial and military space markets."
About Alliant Techsystems
Headquartered in Edina, Minnesota, Alliant Techsystems, Inc.
(NYSE: ATK) -- http://www.atk.com/-- is an advanced weapon and
space system company that provides small satellites and large
satellite sub-systems, hypersonic engines, rocket motors for
spacecraft launch and orbit transfer -- programs critical to
reaching new space frontiers. The company employs approximately
17,000. ATK also produces solid rocket motors and the prime
contractor for the first stage of Ares I, NASA's next-generation
launch vehicle.
* * *
Alliant Techsystems, Inc., continues to carry Fitch's 'BB' Issuer
Default Rating assigned on May 2007. Fitch says the rating
outlook is stable.
ALLIANT TECHSYSTEMS: To Acquire MDA's Unit for CDN$1.325 Billion
----------------------------------------------------------------
Alliant Techsystems Inc. has negotiated definitive agreements with
Canadian-based MacDonald, Dettwiler and Associates Ltd., to
acquire its Information Systems and Geospatial Information
Services businesses for CDN$1.325 billion. The company expects
that this acquisition will provide a higher growth and earnings
profile, and be neutral to earnings per share in fiscal year 2009
and accretive thereafter.
With more than 1,900 employees and estimated FY09 revenues of
approximately US$500 million, the MDA business ATK is acquiring is
a global leader in space-based radar systems, space robotics,
satellite systems, and imaging satellite ground stations and
processing; with additional world-class capabilities in satellite
payloads, C4ISR, and geospatial services.
The transaction, which is subject to regulatory and MDA
shareholder approval, is expected to close early in the first
quarter of the company's FY2009. ATK has arranged committed
financing to support the proposed acquisition. However, there can
be no assurance that the transaction will be completed.
This acquisition will establish ATK as a full-spectrum
international space company, providing launch services, next-
generation satellites, robotics, and the ground systems that will
process and deliver mission critical information solutions. It
will also provide an entry point for MDA's proven high-performance
technology to the U.S. market, creating significant sales growth
opportunities. Further, it will diversify ATK's portfolio into
non-U.S. and commercial space markets, nearly doubling the
company's international revenues. The transaction will also
enhance ATK's existing and potential content in space exploration,
Operationally Responsive Space, and C4ISR; while adding satellite
ground station and geospatial imagery content.
"The welcome addition of MDA's Information Systems and Geospatial
Information Services, and their talented workforce substantially
grows our market position in space systems, both domestically and
internationally," Dan Murphy, ATK Chairman and CEO, said. "ATK
has enjoyed a close working relationship with MDA for many years.
Like ATK, its business model is one of low-cost innovation.
Together we will make a significant contribution to the global
space industry."
"We believe that this transaction provides an excellent home for
our Information Systems and Geospatial Services business as it is
highly complementary to ATK's business," MDA President and CEO,
Daniel Friedmann, said. "ATK is committed to realize the inherent
value in the U.S. market of the many accomplishments of our
employees."
Beginning April 1, 2008, ATK will establish a fourth business
group, ATK Space Systems. Carl Marchetto, formerly Executive Vice
President and General Manager of Orbital Sciences Corporation's
Space Systems Group, will become President, ATK Space Systems.
With operations in four Canadian Provinces and across the United
States, ATK Space Systems is expected to generate FY09 sales of
approximately $900 million. It will be a full-spectrum satellite
and space systems business building markets in North America and
around the world.
The combined value of ATK Launch Systems and the new Space Systems
group will make ATK the fifth largest space systems company in
North America.
About MDA's Information Systems
MacDonald, Dettwiler and Associates Ltd.'s Information Systems
business -- http://www.mdacorporation.com/-- provides space-based
and ground-based systems that support the information and
operational needs of government and commercial customers
worldwide, and MDA's Geospatial Services business provides these
same customers with satellite imagery and value-added information
products.
About Alliant Techsystems
Headquartered in Edina, Minnesota, Alliant Techsystems, Inc.
(NYSE: ATK) -- http://www.atk.com/-- is an advanced weapon and
space sytem company that provides small satellites and large
satellite sub-systems, hypersonic engines, rocket motors for
spacecraft launch and orbit transfer -- programs critical to
reaching new space frontiers. The company employs approximately
17,000. ATK also produces solid rocket motors and the prime
contractor for the first stage of Ares I, NASA's next-generation
launch vehicle.
* * *
Alliant Techsystems, Inc., continues to carry Fitch's 'BB' Issuer
Default Rating assigned on May 2007. Fitch says the rating
outlook is stable.
AMERICAN HOME: Court Okays Cutting DIP Commitment by $15 Million
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware
approved American Home Mortgage Investment Corp. and its
debtor-affiliates' request to amend their debtor-in-possession
loan and security agreement with WLR Recovery Fund III, L.P.
dated as of Aug. 6, 2007.
The amendment reduces the total commitment under the DIP
Facility from $50,000,000 to $35,000,000.
The Court also ruled that the DIP Lenders' liens on the
construction loans owned by Bank of America, N.A., will be
released once the amount of certain construction loan advances
is recovered by the Debtor-Borrowers.
Judge Sontchi said that the amounts received by the Debtor-
Borrowers in excess of the advances will be held by the Debtors
in a segregated account for the benefit of their general
unsecured creditors for eventual distribution pursuant to a
confirmed plan of reorganization, unless the Official Committee
of Unsecured Creditors agrees that a portion of the fund may be
used for other purposes.
As reported in the Troubled Company Reporter on Jan. 3, 2008,
the Debtors sought to modify the DIP Agreement due to recent
developments in their bankruptcy cases, including the sale of
their loan servicing business and the sale's initial closing.
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors selected Hahn & Hessen LLP as
its counsel. As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000. The Debtors' exclusive period to
file a plan expires on March 3, 2008. (American Home Bankruptcy
News, Issue No. 22, Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN HOME: Limited Recourse Facility Up by $50 Million
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware
authorized American Home Mortgage Investment Corp. and its
debtor-affiliates to increase the limited recourse facility
commitment from $50,000,000 to $100,000,000, pursuant to and on
the terms and conditions of an amended agreement among them and
their lenders.
The Debtors previously obtained the Court's approval to enter into
a $50,000,000 Debtor-in-Possession Loan and Security Agreement
dated Nov. 16, 2007, among the Debtor-Borrowers, several lenders,
and AH Mortgage Acquisition Co., Inc., in its capacity as lender
and administrative agent.
In their request for amendment of the limited recourse facility,
the Debtors told the Court that since operating their mortgage
loan servicing business from its initial closing without the use
of the cash collateral, they determined that additional
availability is necessary to satisfy the obligations associated
with the Servicing Business.
According to them, the necessity for additional funding is due to,
among other reasons, the increased amount of servicing advances
and other costs.
The Debtors-Borrowers believe that by the increased financing
commitment, they will be able to meet the borrowing needs
necessary to operate the Servicing Business to the final closing
of its sale, and thus, enable them to operate the business as
required under an asset purchase agreement.
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors selected Hahn & Hessen LLP as
its counsel. As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000. The Debtors' exclusive period to
file a plan expires on March 3, 2008. (American Home Bankruptcy
News, Issue No. 22, Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN HOME: Gets OK to Set Servicing Business Sale Consummation
------------------------------------------------------------------
American Home Mortgage Investment Corp. and its debtor-
affiliates obtained permission from the U.S. Bankruptcy Court for
the District of Delaware to undertake certain activities to
prepare for the consummation of the previously-approved sale of
their mortgage loan servicing business to AH Mortgage Acquisition
Co. Inc. pursuant to the terms of an assset purchase agreement.
As reported in the Troubled Company Reporter on Jan. 3, 2008,
under the APA, the Sale will close in two steps, in which the
initial "economic" close occurred on November 16, 2007. From the
Initial Closing Date until the "legal" close on the final closing
date, the Debtors will continue to operate the Servicing
Business, subject to certain bankruptcy exceptions, for the
economic benefit and risk of AHM Acquisition.
Specifically, the Debtors sought Court authority to:
-- create one or more non-debtor business entities, which may
include corporations, limited liability companies and
transition entities, for entering into certain agreements
relating to the transition of the purchased assets from the
sellers to the purchaser, or relating to the continued
operation of the Servicing Business;
-- fund the Transition Entities with amounts sufficient to
perform their respective obligations under the Transition
Entities Agreements;
-- enter into a fourth amendment to the APA, which provides,
among other things, that the Debtors' interests in the
Transition Entities will be deemed Purchased Assets under
certain provisions of the APA;
-- enter into a employment agreement, between American Home
Mortgage Servicing, Inc., and David M. Friedman;
-- file the Employment Agreement with the Court under seal,
and direct that the Employment Agreement remain under seal,
confidential and not be made available to anyone, except
for the Court, the office of the U.S. Trustee, counsel to
the Official Committee of Unsecured Creditors, counsel to
Bank of America, N.A., AHM Acquisition, and counsel to the
DIP Lenders; and
-- limit service of the request to:
* the U.S. Trustee;
* counsel to the Creditors Committee;
* counsel to BofA;
* counsel to the Debtors' postpetition lender;
* counsel to AHM Acquisition; and
* all other parties entitled to notice under Rule 2002-1(b)
of the Local Rules of Bankruptcy Practice and Procedure
of the United States Bankruptcy Court for the District of
Delaware.
The Debtors state that the Transition Entities will assist them
in transitioning the Purchased Assets to AHM Acquisition, and
facilitate the continued operation of the Servicing Business.
Prior to the Final Closing, the Transition Entities will be
funded by the Sellers to the extent necessary to meet any
obligations incurred in connection with the Transition Entities
Agreements. However, only sources of funding would be the
revenues
and working capital of the Servicing Business.
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors selected Hahn & Hessen LLP as
its counsel. As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000. The Debtors' exclusive period to
file a plan expires on March 3, 2008. (American Home Bankruptcy
News, Issue No. 22, Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AXIUM INTERNATIONAL: Shuts Down Offices Worldwide, Sources Say
--------------------------------------------------------------
Axium International Inc. reportedly shut down operations for an
undetermined period, The Hollywood Reporter says, citing sources
familiar with the matter.
According to the Reporter, Axium's headquarters in Los Angeles,
and offices in New York, Burbank, Ontario, British Columbia and
London "were quiet." The Reporter relates that Axium workers were
informed not to report beginning Tuesday through electronic mail
messages.
Ruben Rodriquez, company president, resigned from his post,
Reporter added, citing undisclosed sources.
The company had remained silent on whether the closures involved
the Internal Revenue Service.
Axium International Inc. -- http://www.axium.com/-- has nearly
two decades of experience in the entertainment industry by
providing payroll solutions for production. It offers various
financial services and technology for the entertainment industry
through Axium Global and Axium Global Workforce. It serves
companies ranging from mid-market to Fortune 500. Axium
International has offices in Los Angeles, New York, Burbank,
Hollywood, Las Vegas, Toronto, Vancouver and London.
BEAR STEARNS: Moody's Junks 14 Tranches' Ratings on Delinquency
---------------------------------------------------------------
Moody's Investors Service downgraded the ratings of 46 tranches
and has placed under review for possible downgrade the ratings of
11 tranches from 8 deals issued by Bear Stearns in 2007. The
collateral backing these classes consists of primarily first lien,
fixed and adjustable-rate, Alt-A mortgage loans.
The ratings were downgraded and placed under review for downgrade
based on higher than anticipated rates of delinquency,
foreclosure, and REO in the underlying collateral relative to
credit enhancement levels. In its re-rating Moody's has also
applied its published methodology updates to the non delinquent
portion of the transactions.
Complete list of rating actions:
Issuer: Bear Stearns Alt-A Trust 2007-1
-- Cl. II-B-2, Downgraded to Baa1, previously A2,
-- Cl. II-B-3, Downgraded to B1, previously Baa2.
-- Cl. I-M-1 Currently Aa2 on review for possible downgrade,
-- Cl. I-M-2, Downgraded to Baa1, previously A2,
-- Cl. I-B-1, Downgraded to Ba2, previously Baa1,
-- Cl. I-B-2, Downgraded to Ba3, previously Baa2,
-- Cl. I-B-3, Downgraded to B3, previously Baa3,
-- Cl. I-B-4, Downgraded to Caa3, previously Ba2.
Issuer: Bear Stearns ALT-A Trust 2007-2
-- Cl. I-M-1 Currently Aa2 on review for possible downgrade,
-- Cl. I-M-2, Downgraded to Baa2, previously A2,
-- Cl. I-B-1, Downgraded to Ba3, previously Baa1,
-- Cl. I-B-2, Downgraded to B2, previously Baa2,
-- Cl. I-B-3, Downgraded to Caa2, previously Baa3,
-- Cl. I-B-4, Downgraded to Caa3, previously Ba2,
-- Cl. II-B-1 Currently Aa2 on review for possible downgrade,
-- Cl. II-BX-1 Currently Aa2 on review for possible
downgrade,
-- Cl. II-B-2, Downgraded to Ba1, previously A2,
-- Cl. II-B-3, Downgraded to B3, previously Baa2.
Issuer: Bear Stearns ALT-A Trust 2007-3
-- Cl. M-1 Currently Aa2 on review for possible downgrade,
-- Cl. M-2, Downgraded to Baa1, previously A2,
-- Cl. B-1, Downgraded to Ba1, previously Baa1,
-- Cl. B-2, Downgraded to Ba2, previously Baa2,
-- Cl. B-3, Downgraded to B2, previously Baa3,
-- Cl. B-4, Downgraded to Caa2, previously Ba2.
Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC1
-- Cl. M-1 Currently Aa2 on review for possible downgrade,
-- Cl. M-2 Currently Aa3 on review for possible downgrade,
-- Cl. M-3, Downgraded to A3, previously A1,
-- Cl. M-4, Downgraded to Baa1, previously A2,
-- Cl. B-1, Downgraded to Baa2, previously A3,
-- Cl. B-2, Downgraded to Ba2, previously Baa1,
-- Cl. B-3, Downgraded to B1, previously Baa2,
-- Cl. B-4, Downgraded to Caa3, previously Ba2.
Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC2
-- Cl. M-1 Currently Aa2 on review for possible downgrade,
-- Cl. M-2, Downgraded to A3, previously A1,
-- Cl. M-3, Downgraded to Baa2, previously A2,
-- Cl. M-4, Downgraded to Baa3, previously A3,
-- Cl. B-1, Downgraded to Ba1, previously Baa1,
-- Cl. B-2, Downgraded to Ba3, previously Baa2,
-- Cl. B-3, Downgraded to Caa1, previously Baa3,
-- Cl. B-4, Downgraded to Caa2, previously Ba2.
Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC3
-- Cl. M-1 Currently Aa2 on review for possible downgrade,
-- Cl. M-2, Downgraded to A3, previously A1,
-- Cl. M-3, Downgraded to Baa2, previously A2,
-- Cl. M-4, Downgraded to Baa3, previously A3,
-- Cl. B-1, Downgraded to Ba1, previously Baa1,
-- Cl. B-2, Downgraded to Ba2, previously Baa2,
-- Cl. B-3, Downgraded to Caa1, previously Baa3,
-- Cl. B-4, Downgraded to Caa2, previously Ba2.
Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC4
-- Cl. M-1 Currently Aa2 on review for possible downgrade,
-- Cl. M-2, Downgraded to Ba1, previously A2,
-- Cl. B-1, Downgraded to Caa1, previously Baa2,
-- Cl. B-2, Downgraded to Caa3, previously Ba2.
Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC5
-- Cl. B-1 Currently Aa2 on review for possible downgrade,
-- Cl. B-2, Downgraded to Ba2, previously A2,
-- Cl. B-3, Downgraded to Caa1, previously Baa2,
-- Cl. B-4, Downgraded to Caa2, previously Ba2,
-- Cl. B-5, Downgraded to Caa3, previously B2.
BOSTON GENERATING: S&P Lowers Rating on $1.13 Billion Loan to B+
----------------------------------------------------------------
Standard & Poor's Rating Services lowered its rating on Boston
Generating Co. LLC's $1.13 billion first-lien term loan B due in
2013, its $70 million revolving facility, and its $250 million
letter of credit facility to 'B+' from 'BB-' (the '1' recovery
rating is unchanged). In addition, S&P lowered the rating on the
issuer's second-lien $350 million term loan C to 'B-' from 'B'
(the '4' recovery rating is unchanged). The outlook is negative.
The $300 million of holding company notes outstanding at parent
EBG Holdings are not rated.
The rating action follows the project's weak financial performance
due to lower energy revenue and absence of reliability must run
payments. The project's rolling 12-month interest coverage ratio
and leverage ratio have been well below initial forecasts by
previous management, and has steadily weakened. However,
operating performance in 2007 was in line with 2006's performance.
"As a result of weaker financial performance, the project could
not achieve supplemental debt amortization under the cash sweep
mechanism, thus increasing the refinancing risk when the debt
matures in 2013," said Standard & Poor's credit analyst Mark
Habib.
Effective June 1, 2007, Astoria Generating Co. Acquisitions LLC's
and Boston Gen's parent companies completed their merger, with the
combined entity named US Power Generating Co. Inc. The two
project companies (Astoria Gen and Boston Gen) will, however,
remain separate, bankruptcy-remote entities. After the merger,
USPG owns and operates eight power generation
facilities with a total capacity of more than 5,000 MW.
Boston Gen owns generating assets with a total capacity that
exceeds 3,000 MW through its primary subsidiaries Mystic I LLC,
Mystic Development LLC, and Fore River Development LLC, which
guarantee Boston Gen's loans.
The negative outlook on Boston Gen reflects S&P's concern about
financial performance that has fallen short of anticipated levels.
Preservation of the rating will hinge on the project's
demonstration of stronger and sustainable financial performance.
Inability to resume debt amortization under the cash sweep
mechanism at a pace more closely in line with 2006's expectations
could further increase refinancing risk and result in a lowered
rating. S&P could revise the outlook to stable if the project
demonstrates stronger and more sustainable financial performance
than exhibited in the past and significantly improves the pace at
which its cash sweep mechanism amortizes debt. Prospects for
rating upgrades are unlikely.
BOSTON SCIENTIFIC: S&P Ratings Unmoved by Affirmed Court Ruling
---------------------------------------------------------------
Boston Scientific Corp. announced that the Court of Appeals for
the Federal Circuit affirmed a District Court ruling that found
the NIR stent infringed one claim of a patent owned by
Johnson & Johnson. Standard & Poor's Ratings Services' says that
this does not affect its ratings or outlook for Boston Scientific.
Boston Scientific's corporate credit rating is rated 'BB+' by S&P
with a negative outlook.
The District Court must now rule on Johnson & Johnson's request
for the reinstatement of damages of $324 million. Also, the
company has not indicated that it will appeal this decision, but
noted that the District court may need to revisit the issue of
validity in light of a revised claim construction. As a result,
the amount and timing of a potential payment by Boston Scientific
are unknown. To some degree, the financial uncertainty of
litigation is factored into the rating. Boston Scientific, like
many of its peers, is involved in several patent and product
liability lawsuits. The company has both initiated litigation and
been subject to challenges by other companies, and such
proceedings can be protracted.
Boston Scientific continues to make progress in reducing its debt
burden; adjusted debt to EBITDA declined to 3.8x for the 12 months
ended Sept. 30, 2007, from 4.1x at the end of the second quarter
of 2007. Cash was $1.2 billion at the end of the second quarter,
and proceeds from recently announced asset divestitures should
provide the means for further debt reduction.
BRADLEY RECKER: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtors: Bradley J. Recker
Cindy M. Recker
9125 Longfellow Lane
Machesney Park, IL 61115
Bankruptcy Case No.: 08-00161
Chapter 11 Petition Date: January 7, 2008
Court: Middle District of Florida (Ft. Myers)
Judge: Alexander L. Paskay
Debtors' Counsel: Harley E. Riedel, Esq.
Stichter, Riedel, Blain & Prosser
110 East Madison Street, Suite 200
Tampa, FL 33602
Tel: (813) 229-0144
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtors do not have any creditors who are not insiders.
BSI CORP: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: BSI Corp
352 West 39th Street
New York, NY 10018
Bankruptcy Case No.: 08-10046
Chapter 11 Petition Date: January 8, 2007
Court: Southern District of New York (Manhattan)
Judge: Allan L. Gropper
Debtor's Counsel: Fredrick J. Levy, Esq.
Olshan Grundman Frome Rosenzweig & Wolosky, LLP
65 East 55th Street
New York, NY 10022
Tel: (212) 451-2218
Fax: (212) 451-2222
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
Debtor's list of its 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Dicarlo Distributors Inc. $148,706
P.O. Box 2365
1630 North Ocean Avenue
Holtsville, NY 11742-0911
ADJ Wholesale Produce Inc $50,847
1290-A Oak Point Avenue
Bronx, NY 10474
Moritt Hock Hamroff & Horowitz LLP $38,648
400 Garden City Plaza
Garden City, NY 11530
Sweet Clover FarmsInc. $34,276
Isabella City Carting Corporation $31,846
Paper Plus $28,854
Strategic Energy $25,706
Davidoff & Malito LLP $25,419
Mayab Happy Tacos Inc $18,724
AICCO Inc $17,233
NYC Water Board $12,291
ESCOLAB $12,045
Ace Natural Inc. $11,874
Austin Meat Company $10,596
Verizon $9,864
Broadview $8,568
State Insurance Fund $7,815
Intelli-Tec Security Services $7,053
Anastasi & Associates $6,424
Plascon $5,944
BURKE TRUCKING: Case Summary & 12 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Burke Trucking, Inc.
101 Spurgeon Road
West Monroe, LA 71291
Bankruptcy Case No.: 08-30033
Type of Business: The Debtor provides trucking services.
Chapter 11 Petition Date: January 8, 2008
Court: Western District of Louisiana (Monroe)
Debtor's Counsel: James W. Spivey, II, Esq.
1310 North 7th Street
West Monroe, LA 71291-4338
Tel: (318) 387-3666
Fax: (318) 387-3630
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 12 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Financial Federal vehicles; value of $1,428,452
1300 PootOak Boulevard, security: $97,1000
Suite 1660
Houston, TX 77056
Paccar Financial Group 9-Truck/Trailers $310,120
P.O. Box 1518
Bellevue, WA 98009-1518
First National Bank of land $263,571
Farmerville
310 East Water Street
Farmerville, LA 71241
Bancorp South real estate $100,686
$10,500
V.M.S., Inc. $84,954
J.W. Burke vehicles $48,000
I.F.C. Credit Corp. leases $38,003
Susquehanna Commercial Finance $21,914
Citibank $20,789
Pelican General Insurance $18,127
Agency
Ronald L. Bell & Associates $18,044
A.R.J. Enterprises, Inc. vehicles $17,617
CENTRAL ILLINOIS: Illinois AG Looking into Bankruptcy Filing
------------------------------------------------------------
The Illinois Attorney General's Office is looking into Central
Illinois Energy's bankruptcy filing, Brenda Rothert of the Journal
Star reports.
A spokesman for the Attorney General told the Journal Star that
the Department of Commerce and Economic Opportunity requested the
investigation and asked the Attorney General's Office to represent
the state in the ethanol plant's bankruptcy proceeding.
The Journal Star relates that the $40 million plant project
tumbled into bankruptcy despite numerous corporate and government
grants amounting to $130 million to keep the plant afloat. Most
of the company's board of directors have resigned before the
filing.
The DCEO already made initial payments to meet infrastructure and
equipment costs. "Because the company has entered bankruptcy,
they are not eligible to receive the remaining payment at this
time," Journal Star reports citing DCEO spokeswoman Marcelyn
Love. "The final result of the bankruptcy proceeding is
impossible to predict, but the agency hopes that the project will
emerge from bankruptcy to be completed, operate as an ethanol
production facility and provide stable jobs and growth for the
region and state."
Based in Canton, Illinois, Central Illinois Energy LLC --
http://www.centralillinoisenergy.com/-- operates a 37-million
gallons-per-year ethanol plant. The Debtor filed for Chapter 11
protection on Dec. 13, 2007 (Bankr. C.D. Ill. Case No 07-82817).
Barry M. Barash, Esq., at Barash & Everett, LLC, represents the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed estimated assets between
$1 million to $100 million, and more than $100 million in
estimated liabilities.
CHC HELICOPTER: High Leverage Prompts Moody's to Change Outlook
---------------------------------------------------------------
Moody's Investors Service changed the rating outlook for CHC
Helicopter Corporation to negative from stable. Moody's affirmed
CHC's corporate family rating and probability of default rating at
Ba3, and the B1 (LGD 5, 72% changed from LGD 4, 67%) rating on
CHC's $400 million senior subordinated notes.
"Moody's changed CHC's rating outlook to negative to highlight our
concerns regarding the company's substantial increase in leverage
to fund its major fleet expansion," commented Pete Speer, Moody's
Vice-President/Senior Analyst. "While this fleet expansion is in
response to strong customer demand driven by the deepwater
development trends, CHC has funded these capital expenditures
almost exclusively with lease financing and revolver borrowings."
Since fiscal year ended April 30, 2006, CHC has purchased 43 heavy
and medium helicopters, increasing its total fleet size by 10%,
net of the disposal of older aircraft. While these net additions
have further high-graded the company's fleet towards heavy and
medium helicopters to service the increasing demand from deepwater
oil and gas activities, CHC's leverage has increased from
approximately 4.5x at FY 2006 to around 6x for LTM Oct. 31, 2007
(including standard lease adjustment at a 6x multiple of rent
expense). As of Oct. 31, 2007, the company had 85 helicopters on
order for delivery through 2012.
The effect on this leverage metric from the financed helicopter
additions has been compounded by the significant introduction
costs incurred for this new technology aircraft and the lag
between the delivery of the new helicopters and their commencement
of customer operations. Including management's estimate of the
additional EBITDA that would have been generated had these
helicopters been in full operation over the period, Debt/EBITDA
would have been around 5.5x, which is still high for the company's
rating.
The Ba3 CFR is supported by CHC's leading global market position
in helicopter services, including an approximate 64% market share
in its core North Sea operations. Approximately 67% of the
company's revenues in its most recent fiscal year were generated
under long-term contracts and most of the company's revenues are
tied to production activities, factors that provide a level of
stability and predictability to the company's earnings and cash
flows. The outlook for helicopter services demand is currently
strong, with major and national oil companies requiring additional
medium and heavy helicopters to support their increasing deepwater
oil and gas activities.
CHC's Ba3 CFR also incorporates the inherent cyclicality in the
oil and gas services sector; the company's lack of operating
presence in the Gulf of Mexico and relative concentration in the
North Sea; and the fact that the company's long-term contracts
contain cancellation clauses and therefore are not as binding as
contracts for offshore drilling rigs, although CHC has rarely
experienced customer cancellations.
The rating outlook could return to stable if CHC's expectations
for increased EBITDA from its fleet expansion and investments in
its repair and overhaul operations are achieved resulting in the
company reducing its Debt/EBITDA to below 5x on a durable basis.
The company's complicated ownership structure, partially due to
the regulatory licensing requirements of some foreign
jurisdictions, has made equity offerings difficult. However, if
CHC were to address these issues and complete a meaningful equity
offering, the company could also return leverage metrics to levels
consistent with the Ba3 rating.
If CHC's continued fleet expansion results in further increases in
leverage or if the expected leverage reductions are not achieved
the ratings could be downgraded. In addition, if market
conditions were to weaken with these elevated leverage levels the
ratings could also be downgraded.
CHC Helicopter Corporation is headquartered in Vancouver, British
Columbia, Canada. It is one of the world's largest providers of
helicopter services to the offshore exploration and production
industry, with operations in over 30 countries.
CINCINNATI BELL: Sept. 30 Balance Sheet Upside-Down by $671.2 Mil.
------------------------------------------------------------------
Cincinnati Bell Inc.'s consolidated balance sheet at Sept. 30,
2007, showed $1.97 billion in total assets and $2.64 billion in
total liabilities, resulting in a $671.2 million total
shareowners' deficit.
The company reported net income of $25.7 million for the third
quarter ended Sept. 30, 2007, versus net income of $25.1 million
in the comparable period of 2006. Net income excluding special
items was $25.5 million in the three months ended Sept. 30, 2007,
compared with net income excluding special items of $24.3 million
in the 2006 quarter, a 5% increase.
For the third quarter 2007, revenue totaled $344.3 million, an
increase of 8% over revenue of $320.1 million for the
corresponding period in 2006.
"The momentum generated in Cincinnati Bell's key growth areas of
Wireless, Technology Solutions and DSL led to the eighth
consecutive quarter of year-over-year revenue growth. In
addition, adjusted EBITDA in our core operations has increased the
last five quarters," said Jack Cassidy, president and chief
executive officer of Cincinnati Bell Inc. "By introducing new
products and developing previously underserved markets, Cincinnati
Bell continues to meet customer demands for value and convenience,
superior network quality and outstanding service."
"We are pleased with the financial performance in each of our
business segments," said Brian Ross, chief financial officer of
Cincinnati Bell Inc. "We produced revenue, EBITDA and subscriber
growth, while continuing to invest in the expansion of our data
center business and new 3G wireless network."
Liquidity
As of Sept. 30, 2007, the company held $27.3 million in cash and
cash equivalents. At Sept. 30, 2007, the company had
$205.9 million of availability under the Corporate credit
facility.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2007, are available for
free at http://researcharchives.com/t/s?26e0
About Cincinnati Bell
Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE:
CBB) -- http://www.cincinnatibell.com/-- provides a wide range of
telecommunications products and services to residential and
business customers in Ohio, Kentucky and Indiana.
CITIUS II: Moody's Junk Ratings on Two Note Classes
---------------------------------------------------
Moody's Investors Service has downgraded these notes issued by
Citius II Funding, Ltd.:
Class Description: $20,000,000 Class C Deferrable Floating Rate
Notes Due 2047
-- Prior Rating: Baa3, on review for possible downgrade
-- Current Rating: Caa2
Class Description: $19,000,000 Class D Deferrable Floating Rate
Notes Due 2047
-- Prior Rating: Ba3, on review for possible downgrade
-- Current Rating: Ca
In addition Moody's also downgraded and left on review for
possible downgrade these notes:
Class Description: $95,000,000 Class A Secured Floating Rate Notes
Due 2047
-- Prior Rating: Aaa, on review for possible downgrade
-- Current Rating: Baa1, on review for possible downgrade
Class Description: $50,000,000 Class B Secured Floating Rate Notes
Due 2047
-- Prior Rating: Aa2, on review for possible downgrade
-- Current Rating: Ba3, on review for possible downgrade
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, which consists primarily of structured
finance securities.
CLASS V FUNDING: Moody's Cuts Rating on Preference Shares
---------------------------------------------------------
Moody's Investors Service placed these notes issued by Class V
Funding, Ltd. on review for possible downgrade:
Class Description: Class C Fourth Priority Secured Floating Rate
Deferrable Notes due 2045
-- Prior Rating: A2
-- Current Rating: A2, on review for possible downgrade
Class Description: Class D-1 Fifth Priority Mezzanine Secured
Floating Rate Notes due 2045
-- Prior Rating: Baa2
-- Current Rating: Baa2, on review for possible downgrade
Class Description: Class D-2 Fifth Priority Mezzanine Secured
Fixed Rate Notes due 2045
-- Prior Rating: Baa2
-- Current Rating: Baa2, on review for possible downgrade
In addition Moody's also downgraded and left on review for
possible downgrade these notes:
Class Description: 15,000 Preference Shares with an Aggregate
Liquidation Preference of $15,000,000
-- Prior Rating: Ba2
-- Current Rating: B2, on review for possible downgrade
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, which consists primarily of structured
finance securities.
CONSOLIDATED HEALTH: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Consolidated Health Services Inc.
dba Advantage Hospice & Homecare
P.O. Box 1828
Lumberton, NC 28358
Bankruptcy Case No.: 08-00103
Chapter 11 Petition Date: January 7, 2008
Court: Eastern District of North Carolina (Wilson)
Judge: A. Thomas Small
Debtor's Counsel: Gerald A Jeutter, Jr., Esq.
Kilpatrick Stockton LLP
P.O. Box 300004
Raleigh, NC 27622
Tel: (919) 420-1700
Fax: (919) 420-1800
http://www.kilpatrickstockton.com/
-- and --
John A. Northen, Esq.
Northen Blue, LLP
P.O. Box 2208
Chapel Hill, NC 27515-2208
Tel: (919) 968-4441
Fax: (919) 942-6603
http://www.nbfirm.com/
Total Assets: $6,717,358
Total Debts: $14,001,275
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Centers for Medicare & value of security: $13,200,000
Medicaid Services $1,350,000
Palmetto GBA, LLC
2300 Springdale Avenue
Camden, SC 29020
Procare $48,764
3090 Premiere Parkway
Suite 100
Duluth, GA 30097
Britthaven of Harnett $41,402
P.O. Box 1597
Dunn, NC 28335
Brookstone Living Center $32,636
Premier Living $26,333
Smithfield Manor $21,552
Wesley Pines $21,551
Dunn Rehab And Nursing $21,103
Allstate Workplace Div. $20,586
Brian Center Health $20,186
Harnett Manor $20,093
Gulfsouth $18,895
Alltel $16,588
Elizabethtown Nursing Center $14,549
Apria Healthcare Inc. $14,020
Betsy Johnson Hospital $12,246
Deltacom $12,167
Cumberland Health Care $11,657
Wayne Pharmacy $11,475
Forestview Rehabilitation $10,925
Court
CONSTELLATION BRANDS: $700MM Notes Exchange Offer Expires Today
---------------------------------------------------------------
Constellation Brands Inc. has extended its offer to exchange $700
million aggregate principal amount of its 7.25% Senior Notes due
2017 for all $700 million of its outstanding 7.25% Senior Notes
due 2017.
The exchange offer, which had been scheduled to expire on
Jan. 7, 2008 at 5:00 p.m., New York City time, will expire today,
Jan. 10, 2008, at 5:00 p.m., New York City time, unless further
extended by the company.
The extension of the exchange offer has been made to allow holders
of outstanding Original Notes who have not yet tendered their
Original Notes for exchange additional time to do so. All other
terms, provisions and conditions of the exchange offer will remain
in full force and effect.
As of 5:00 p.m. New York City time, Jan. 7, 2008, $697,499,000 in
aggregate principal amount of the Original Notes had been validly
tendered and not withdrawn in the exchange offer, representing
approximately 99.6% of the outstanding principal amount of the
Original Notes.
Persons with questions regarding the exchange offer should contact
the exchange agent, The Bank of New York Trust Company, N.A., at
212-815-2742.
The company will not receive any proceeds from the exchange offer,
nor will the company's debt level change as a result of this
exchange offer. The terms of the Exchange Notes and the Original
Notes are substantially identical in all material respects, except
that the Exchange Notes have been registered under the Securities
Act.
A copy of the prospectus for the exchange offer, dated Dec. 6,
2007, and related letter of transmittal, which have been filed
with the United States Securities and Exchange Commission, may
be obtained by calling the exchange agent, The Bank of New York
Trust Company, N.A., at 212-815-2742.
About Constellation Brands
Headquartered in Fairport, New York, Constellation Brands Inc.
(NYSE:STZ) -- http://www.cbrands.com/-- has more than 250 brands
in its portfolio, sales in approximately 150 countries and
operates approximately 60 wineries, distilleries and distribution
facilities. The company has market presence in
the U.K., Australia, Canada, New Zealand; Mexico.
Barton Brands Ltd. is the spirits division of Constellation Brands
Inc. is a producer, importer and exporter of a wide range of
spirits products, including brands such as Black Velvet Canadian
Whisky, Ridgemont Reserve 1792 bourbon, and Effen vodka.
* * *
As reported in the Troubled Company Reporter on Dec. 3, 2007,
Fitch Ratings assigned a 'BB-' rating to a note registered by
Constellation Brands Inc. to fund the purchase price of Beam Wine
Estates Inc., a subsidiary of Fortune Brands Inc: $500 million
8.375% senior unsecured note due Dec. 15, 2014. The rating
outlook is negative.
CONSTELLATION BRANDS: Arm Buys 50% Stake in Planet 10 Project
-------------------------------------------------------------
Constellation Brands Inc. disclosed that its Chicago-based spirits
company, Barton Brands, has acquired the remaining 50% equity
stake in its Planet 10 Spirits joint venture. Terms of the
transaction were not disclosed.
Planet 10 Spirits was formed in 2004 as an entrepreneurial premium
spirits brand development and marketing platform to expand
Constellation's participation in the imported vodka category.
Planet 10 Spirits' leading product, Effen vodka from Holland, has
achieved widespread on- and off-premise distribution and consumer
acceptance resulting in a fivefold increase in Effen sales volume
since the formation of the joint venture. In addition, Effen has
been launched in key global spirits markets such as the U.K.,
Canada, Japan and Australia.
"Our participation in the Planet 10 Spirits joint venture has
given us invaluable insights into the high-end spirits marketplace
and has enabled us to shape a strategy for growing this important
piece of our business," Marty Birkel, president of Barton Brands,
said. "We are confident that our efforts to expand our premium
spirits portfolio will continue to provide profitable growth and
value creation for the long term. The addition of Planet 10
Spirits to the Barton organization will provide us with a team of
dedicated and successful on-premise sales & marketing specialists
who will continue to build Effen and other select premium spirits
brands within our
portfolio."
About Constellation Brands
Headquartered in Fairport, New York, Constellation Brands Inc.
(NYSE:STZ) -- http://www.cbrands.com/-- has more than 250 brands
in its portfolio, sales in approximately 150 countries and
operates approximately 60 wineries, distilleries and distribution
facilities. The company has market presence in
the U.K., Australia, Canada, New Zealand; Mexico.
Barton Brands Ltd. is the spirits division of Constellation Brands
Inc. is a producer, importer and exporter of a wide range of
spirits products, including brands such as Black Velvet Canadian
Whisky, Ridgemont Reserve 1792 bourbon, and Effen vodka.
* * *
As reported in the Troubled Company Reporter on Dec. 3, 2007,
Fitch Ratings assigned a 'BB-' rating to a note registered by
Constellation Brands Inc. to fund the purchase price of Beam Wine
Estates Inc., a subsidiary of Fortune Brands Inc: $500 million
8.375% senior unsecured note due Dec. 15, 2014. The rating
outlook is negative.
CONSTELLATION BRANDS: Earns $119.6 Mil. in 3rd Qtr. Ended Nov. 30
-----------------------------------------------------------------
Constellation Brands Inc. reported Tuesday results for its fiscal
2008 third quarter ended Nov. 30, 2007.
The company reported net income of $119.6 million on net sales of
$1.09 billion for the third quarter ended Nov. 30, 2007, compared
with net income of $107.8 million on sales of $1.50 billion in the
corresponding period ended Nov. 30, 2006.
"The company's third quarter performance was in line with our
expectations, and we are especially pleased with the performances
from our North American wine business and our spirits business,"
said Rob Sands, Constellation Brands president and chief executive
officer. "We're also delighted with the addition of the Fortune
Brands U.S. wine portfolio to Constellation's U.S. wine business
and the benefits we expect from our expanded super-premium-plus
offerings. Also, we are continuing our efforts in the U.K. to
mitigate the impact of the lingering Australian wine surplus in
the marketplace and to maximize profitability."
The reported consolidated net sales decrease of 27% primarily
reflects the impact of reporting the Crown Imports and Matthew
Clark wholesale business joint ventures under the equity method,
partially offset by the benefits of favorable foreign currency,
branded wine business growth and the SVEDKA Vodka acquisition.
Organic net sales increased 6% on a constant currency basis.
Branded wine net sales increased 4% on an organic constant
currency basis. For North America, branded wine net sales
increased 5% on a constant currency basis, reflecting solid growth
in the U.S.
"Our U.S. branded wine business turned in a solid third quarter
performance, with wines such as Woodbridge, Robert Mondavi Private
Selection, Blackstone, Estancia, Kim Crawford and Simi leading the
way with very healthy sales growth," explained Sands. "Growth of
these brands is indicative of the trade-up trends we've been
seeing for the past several years, and we feel that the growth
trajectory for our premium and luxury brands will continue due to
consumer preferences for these wines."
Organic net sales for branded wine for Europe increased 4% on a
constant currency basis, primarily due to higher sales of popular
priced wine in mainland Europe, and a slight increase in net sales
for the U.K. On a constant currency basis, net sales for
Australia/New Zealand branded wine were even with the prior year.
The branded wine market in the U.K. and Australia reflects ongoing
competitive challenges and continued pricing pressure.
Total spirits net sales increased 31% for the quarter, primarily
due to the March 2007 acquisition of SVEDKA Vodka, with 12% growth
in organic net sales reflecting higher average selling prices and
volume gains.
"SVEDKA's double-digit growth continues to prove that this is an
exceptional brand," stated Sands. "We anticipate SVEDKA will
continue to be a growth engine in our spirits portfolio.
Additionally, focus on our premium offerings, including Black
Velvet, the 99 Schnapps line and Ridgemont Reserve 1792 has
bolstered our spirits portfolio performance."
Operating income decreased to $198.3 million during the three
months ended Nov. 30, 2007, versus $235.8 million in the
comparable period last year. Equity in earnings of equity method
investees increased to $74.2 million versus $10.4 million in the
corresponding period in fiscal 2007. The decrease in operating
income and the increase in equity earnings for third quarter 2008
were primarily due to the impact of reporting $62.0 million of
equity earnings from the Crown Imports joint venture under the
equity method.
For the third quarter, acquisition-related integration costs,
restructuring and related charges and unusual items totaled
$3.0 million, compared with $45.0 million for the prior year. Net
income was also impacted by interest expense, which increased 13%
to $82.0 million for third quarter 2008, primarily due to the
financing of the SVEDKA acquisition and $500.0 million of share
repurchases completed earlier in the year.
On a year-to-date basis through November the company generated
free cash flow of $173.0 million versus a usage of $22.0 million
in the prior year. The increase in free cash flow was primarily
driven by improved working capital, reduced tax payments and lower
capital spending.
Acquisition and integration of
Fortune Brands U.S. wine business
Constellation Brands completed the acquisition of the Fortune
Brands U.S. wine portfolio on Dec. 17, 2007, for a purchase price
of $885.0 million, subject to closing adjustments.
"This acquisition significantly advances our strategy for
expanding our presence in the growing high-end U.S. wine
business," stated Sands.
Constellation expects the integration of the acquired wine
business, realignment of the U.S. wine sales and marketing teams
and portfolio rationalization to produce net cost savings of
approximately $30.0 million annually by the end of fiscal 2010,
with approximately $20.0 million anticipated as savings in fiscal
2009. The company expects to incur one-time cash charges of
$22.0 million and one-time non-cash charges of $23.0 million, for
a total of $45.0 million in one-time charges.
The company also expects to incur one-time cash costs of
approximately $28.0 million that will be recorded in the company's
allocation of purchase price in connection with the acquired wine
business, including $19.0 million for employee termination costs
and $9.0 million for contract termination and other costs that
will be paid primarily in fiscal 2009.
Balance Sheet
At Nov. 30, 2007, the company's consolidated balance sheet showed
$10.19 billion in total assets, $6.68 billion in total
liabilities, and $3.51 billion in total stockholders' equity.
About Constellation Brands
Headquartered in Fairport, New York, Constellation Brands Inc.
(NYSE:STZ) -- http://www.cbrands.com/-- is a producer and
marketer of beverage alcohol in the wine, spirits and imported
beer categories, with market presence in the U.S., Canada, U.K.,
Australia and New Zealand. The company has more than 250 brands
in its portfolio, sales in approximately 150 countries and
operates approximately 60 wineries, distilleries and distribution
facilities.
* * *
As reported in the Troubled Company Reporter on Dec. 3, 2007,
Fitch Ratings assigned a 'BB-' rating to a note registered by
Constellation Brands Inc. to fund the purchase price of Beam Wine
Estates Inc., a subsidiary of Fortune Brands Inc: $500.0 million
8.375% senior unsecured note due Dec. 15, 2014. The rating
outlook is Negative.
CONTINENTAL GLOBAL: Signs $270 Mil. Merger Deal with Joy Global
---------------------------------------------------------------
Joy Global Inc. has entered into a definitive agreement with NES
Group Inc. to acquire Continental Global Inc.
Continental's 2007 sales of conveyor equipment are expected to be
approximately $340 million. The purchase price will be
$270 million to be funded through available liquidity sources
pending completion of permanent financing.
The transaction is structured as a purchase from NES Group of the
stock of NES Investment Co., the parent holding company of
Continental, and is expected to be accretive to earnings in the
first full fiscal year following the acquisition. All businesses
of NES unrelated to conveyor equipment are being retained by NES
Group. Completion of the transaction is subject to the receipt of
necessary regulatory approvals and other customary closing
conditions and is expected to occur during the first calendar
quarter of 2008.
"Continental Global expands the range of products and services we
can deliver to our customers, and is consistent with our strategy
of adding related and highly synergistic product lines," stated
Mike Sutherlin, president and chief executive officer of Joy
Global. "Continental's conveyor systems fit closely with our
surface and underground businesses, allowing us to leverage our
strong global presence in both segments."
"Integrating conveyor systems into our life cycle management
programs will extend the impact of these programs to deliver the
highest reliability in equipment and systems that are mission
critical to our customers, Mr. Sutherlin continued. "This
enhances the efficiency of our existing mine site operations, and
is even more important as our customers look to green field
projects for future expansion."
"We are very pleased to welcome the Continental family to Joy
Global," Mr. Sutherlin added.
About Joy Global Inc.
Headquartered in Milwaukee, Wisconsin, Joy Global (Nasdaq:JOYG) --
http://investors.joyglobal.com-- is a manufacturing,
distributing and servicing equipment for surface mining through
P&H Mining Equipment and underground mining through Joy Mining
Machinery.
About Continental Global Group Inc.
Based in Winfield, Alabama, Continental Global Group Inc. --
http://www.continentalglobalgroup.com/-- designs and manufactures
conveyor systems and components for mining applications, primarily
in the coal industry. The company's direct operating subsidiaries
are Continental Conveyor and Equipment Company, and Goodman
Conveyor Company. The company indirectly owns Continental
Conveyor & Equipment Pty. Ltd., an australian holding company that
owns four australian operating companies and a wholly foreign
owned enterprise in Beijing, China. The company also owns
indirectly Continental Conveyor Ltd., a United Kingdom operating
company, and Continental MECO Ltd., a South African operating
company. In April 2007, the company acquired Mid-Florida Wheel
and Axle Inc., a business in Florida that refurbishes axle
components and tires. The company operates in two principal
business segments: conveyor equipment and manufactured housing
products.
CONTINENTAL GLOBAL: $270MM Deal Cues S&P's Positive CreditWatch
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' corporate credit
rating on Continental Global Group Inc. on CreditWatch with
positive implications, following the announcement that Joy Global
(BBB-/Stable/--) will acquire the company for $270 million.
"We did not place the ratings on CGG's bank loan and revolving
credit facility on CreditWatch, because we expect the debt to be
refinanced as part of the acquisition," said Standard & Poor's
credit analyst Sarah Wyeth.
Furthermore, S&P expects to withdraw the corporate credit rating
shortly after the close of the acquisition, expected in the first
quarter of 2008.
COUNTRYWIDE FIN'L: Says December Total Loan Fundings Beat Forecast
------------------------------------------------------------------
Countrywide Financial Corporation released operational data for
the month ended Dec. 31, 2007.
"Our fourth quarter ended with a number of positive
operational trends," said David Sambol, President and Chief
Operating Officer. "Total loan fundings were $24 billion
for the month of December, up slightly from November 2007
and ahead of our forecasts. This pushed our fourth quarter
fundings to $69 billion, also exceeding our expectations.
Although average daily mortgage loan applications and the
pipeline of mortgage loans-in-process decreased from
November, this reflected a seasonal decline typically seen
this time of year.
"Our mortgage loan servicing portfolio is approaching
$1.5 trillion, representing approximately 9 million loans,"
Mr. Sambol continued. "Prepayment speeds continued to decline
throughout the quarter, which has enhanced the economic
value of our mortgage servicing rights asset.
"Banking Operations' assets were $113 billion at Dec. 31,
2007, with total deposits reaching $61 billion at the end
of December. Retail deposits alone increased $2.3 billion
during the month and $7.7 billion for the quarter to
$33 billion. The Bank continued to make progress in
opening its Financial Centers during the month, with 194
in operation at year-end. Our Insurance segment also
produced solid operating results, with continued growth
and net premiums earned reaching a record $1.5 billion for
2007.
"Management is pleased with the progress we have made in
positioning the Company to navigate the current challenging
environment," Mr. Sambol concluded.
Summary of Key Operating Statistics
* Total loan fundings for the month of December 2007
were $24 billion, up one percent from November 2007.
* Average daily mortgage loan application activity for
December 2007 was $1.5 billion, which compares to
$1.9 billion for November 2007. The mortgage loan
pipeline was $35 billion at Dec. 31, 2007, as
compared to $43 billion for November 2007.
* The mortgage loan servicing portfolio continued to
grow, reaching $1.48 trillion at Dec. 31, 2007, up
$5.4 billion from Nov. 30, 2007 and $178 billion
from Dec. 31, 2006.
* Banking Operations' assets were $113 billion at
Dec. 31, 2007, which compares to $109 billion at
Nov. 30, 2007 and $83 billion at Dec. 31, 2006.
* Securities trading volume in the Capital Markets segment
was $315 billion for December 2007 as compared to
$294 billion for November 2007 and $362 billion for
December 2006.
* Net earned premiums from the Insurance segment were
$164 million in December 2007, up 12 percent from
November 2007 and up 55 percent from December 2006.
About Countrywide Financial
Based in Calabasas, California, Countrywide Financial Corporation
(NYSE: CFC) -- http://www.countrywide.com/-- is a diversified
financial services provider and a member of the S&P 500, Forbes
2000 and Fortune 500. Through its family of companies,
Countrywide originates, purchases, securitizes, sells, and
services residential and commercial loans; provides loan closing
services such as credit reports, appraisals and flood
determinations; offers banking services which include depository
and home loan products; conducts fixed income securities
underwriting and trading activities; provides property, life and
casualty insurance; and manages a captive mortgage reinsurance
company.
* * *
The company recently denied speculations that it might seek
bankruptcy protection after its shares dropped 28%.
"There is no substance to the rumor that Countrywide is planning
to file for bankruptcy, and we are not aware of any basis for the
rumor that any of the major rating agencies are contemplating
negative action relative to the company," Countrywide said in a
statement cited by Reuters.
November last year, Countrywide modified its funding structure by
reducing its reliance on the public debt and non-agency secondary
mortgage markets after credit rating agencies downgraded the
company's debt ratings due to current market conditions and
constrained liquidity.
For the third quarter ended Sept. 30, 2007, Countrywide reported a
net loss of $1.2 billion, compared to net income of $648 million
for the third quarter of 2006.
Countrywide said it will report its 2007 Fourth Quarter and Year-
End Earnings on Jan. 29, 2008.
CUMMINS INC: Earns $184 Million in 2007 Third Quarter
-----------------------------------------------------
Cummins Inc. reported net earnings of $184 million in the third
quarter ended Sept. 30, 2007, versus net earnings of $171 million
in the comparable 2006 period.
Sales grew 20.0% to $3.37 billion, from $2.81 billion during the
same period in 2006, led by record sales in the Engine, Power
Generation and Distribution segments while the Components segment
also experienced a strong sales performance.
Earnings before interest and taxes rose 3.4% to $306.0 million, or
9.1% of sales, from $296.0 million, or 10.5% of sales, in the same
period in 2006. Earnings growth was moderated by a downturn at
some OEM customers, and the expected higher costs associated with
the introduction of new emissions-related products.
"We continue to experience significant growth in most of our
markets around the world, and are well-positioned to take
advantage of many opportunities for future growth," said Cummins
chairman and chief executive officer Tim Solso. "Our technology
leadership has resulted in a sustainable competitive advantage for
Cummins, and we remain focused on producing profitable growth for
all our stakeholders."
Net earnings for the nine months ended Sept. 30, 2007, were
$541.0 million on sales of $9.53 billion, compared to net earnings
of $526.0 million on sales of $8.33 billion in the corresponding
period of 2006.
Liquidity
Cash and cash equivalents decreased $216.0 million during the
period to $624.0 million at the end of the first nine months
compared to $840.0 million at the beginning of the period. Cash
and cash equivalents were higher at the end of 2006 due to lower
accounts receivable at the end of 2006.
In the first quarter of 2007, approximately $62.0 million of the
company's $120.0 million 6.75% debentures were repaid on Feb. 15,
2007, at the election of the holders. Total debt as a percent of
the company's total capital, including total debt, was 17.2% at
Sept. 30, 2007, compared with 22.4% at Dec. 31, 2006, and 28.4% at
Oct. 1, 2006.
Balance Sheet
At Sept. 30, the company's consolidated balance sheet showed
$8.03 billion in total assets, $4.56 billion in total liabilities,
$275.0 million in minority interests, and $3.20 billion in total
shareholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2007, are available for
free at http://researcharchives.com/t/s?26e2
About Cummins
Headquartered in Columbus, Indiana, Cummins Inc. (NYSE: CMI)
-- http://www.cummins.com/-- designs, manufactures, distributes
and services engines and related technologies, including fuel
systems, controls, air handling, filtration, emission solutions
and electrical power generation systems.
Cummins serves customers in more than 160 countries through its
network of 550 company-owned and independent distributor
facilities and more than 5,000 dealer locations.
* * *
Cummins' Junior Convertible Subordinated Debentures carry
Fitch's 'BB' rating with a stable outlook.
Moody's Investors Service raised Cummins' convertible preferred
stock rating to Ba1 from Ba2 and withdrew the company's SGL-1
Speculative Grade Liquidity rating and its Ba1 Corporate Family
Rating.
CW MINING: Involuntary Chapter 11 Case Summary
----------------------------------------------
Alleged Debtor: C.W. Mining Co.
dba Co-Op Mining Company
P.O. Box 65809
Salt Lake City, UT 84165
Case Number: 08-20105
Involuntary Petition Date: January 8, 2008
Court: District of Utah (Salt Lake City)
Petitioner's Counsel: Keith A. Kelly, Esq.
79 South Main Street
P.O. Box 45385
Salt Lake City, UT 84145-0385
Tel: (801) 532-1500
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Aquila, Inc. judgment $24,841,988
20 West 9th Street
Kansas City, MO 64105
House of Pumps, Inc. trade debt $19,256
8510 South Sandy Parkway
Sandy, UT 84070
Owell Precast, L.L.C. trade debt $3,440
P.O. Box 2347
Sandy, UT 84091
DELPHINUS CDO: S&P Places Ratings Under Negative Watch
------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the class
A-1A, A-1B, S, A-1C, A-2, A-3, B, C, D-1, D-2, and D-3 notes
issued by Delphinus CDO 2007-1 Ltd. on CreditWatch
with negative implications.
Standard & Poor's noted that Delphinus CDO 2007-1 Ltd. triggered
an event of default on Jan. 2, 2008, under section 5.01(i) of the
indenture dated July 19, 2007, when the par value coverage ratio
fell below 100%.
When Standard & Poor's receives EOD notices, S&P place all of the
affected note ratings on CreditWatch with negative implications.
Ratings Placed on CreditWatch Negative
Delphinus CDO 2007-1 Ltd.
Rating
------
Class To From
----- -- ----
A-1A AAA/Watch Neg AAA
A-1B AAA/Watch Neg AAA
S AAA/Watch Neg AAA
A-1C AA+/Watch Neg AA+
A-2 AA+/Watch Neg AA+
A-3 A+/Watch Neg A+
B BBB+/Watch Neg BBB+
C BBB-/Watch Neg BBB-
D-1 B+/Watch Neg B+
D-2 CCC+/Watch Neg CCC+
D-3 CCC/Watch Neg CCC
Other Outstanding Ratings
Delphinus CDO 2007-1 Ltd.
Class Rating
----- ------
E CC
DELTA FINANCIAL: GAIC Wants Stay Lifted to Cancel Surety Bonds
--------------------------------------------------------------
Great American Insurance Company, pursuant to Sections 362(d)(l)
and (2) of the Bankruptcy Code, seeks the modification of the
automatic stay to permit its cancellation of certain surety bonds
it issued on behalf of Delta Funding Corporation, doing business
as Fidelity Mortgage, as principal.
Before the Debtors' bankruptcy filing, GAIC issued surety bonds
with an aggregate penal sum in excess of $2,596,000, on behalf of,
or for the benefit of, Delta, certain of which bonds remain
outstanding. Nearly all of the bonds are continuous obligations
that can only be canceled by providing notice to the obligees,
various state entities, as provided in the bonds or by statute.
The surety bonds secured the statutory and regulatory duties of
Delta to operate as a mortgage lender, broker and servicer under
various state laws.
Kevin J. Mangan, Esq., at Womble Carlyle Sandridge & Rice, PLLC,
in Wilmington, Delaware, relates that in most instances, GAIC may
cancel or terminate a bond by providing 30 or 60 days' prior
written notice to the obligee.
Delta is obligated to indemnify and reimburse GAIC for all
payments made under the Surety Bonds pursuant to an General
Indemnity Agreement dated October 17, 2007. The Indemnity
Agreement provides, in pertinent part, Delta agrees to, at all
times, exonerate, indemnify and keep indemnified GAIC from and
against any and all liability or losses that GAIC will or may
incur in connection with the executions of the Bonds.
In addition, under common law, Delta and the other bond
principals are also liable to GAIC for all losses and expenses
incurred in connection with the Surety Bonds, and GAIC is
subrogated to the rights of the Obligees as against Delta and the
other bond principals for any obligations which GAIC pays under
the Surety Bonds.
Mr. Mangan asserts that cause exists to lift the automatic stay.
The Surety Bonds are executory contracts which are considered
"financial accommodations" under Section 365(c)(2) of the
Bankruptcy Code. As "financial accommodations", the Surety Bonds
cannot be assumed by Delta and are deemed terminated upon the
filing of a bankruptcy petition.
Mr. Mangan notes that the under the Surety Bonds, as executory
contracts, (i) Delta has a continuing obligation to indemnify,
exonerate and reimburse the surety, and (ii) the Debtor, as
principal obligor of the Bonds, has a duty to perform the
underlying obligations, for example, the lending and servicing of
loans to comply with state laws and regulations.
GAIC asks the U.S. Bankruptcy Court for the District of Delaware
to deem the Surety Bonds terminated as of Dec. 17, 2007 with
respect to any postpetition transaction in connection with the
Surety Bonds. In addition, it asks the Court to lift the
automatic stay to permit it to cancel its Surety Bonds.
Mr. Mangan notes that:
-- For the Surety Bonds that require written notice to the
obligee prior to cancellation, the termination should
occur after the giving of the requisite notice by GAIC;
and
-- For the Surety Bonds that have no cancellation provision,
cancellation should be deemed effective as of the Petition
Date.
In addition, since Delta is continuing to use the Surety Bonds to
guarantee ongoing postpetition obligations under the Surety Bonds
and will continue to do so up to the effective date of the
cancellation of the Surety Bonds, GAIC requests that Delta be
compelled to provide adequate protection to GAIC either through
collateral, the granting of a lien or by providing some form of
assurance of postpetition performance by Delta under the Surety
Bonds.
About Delta Financial
Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) --
http://www.deltafinancial.com/-- is a Woodbury, New York-based
specialty consumer finance company that originates, securitizes
and sells non-conforming mortgage loans.
The company filed a chapter 11 petition on December 17, 2007
(Bankr. D. Del. Lead Case No. 07-11880). On the same day, three
affiliates filed separate chapter 11 petitions -- Delta Funding
Corp., Renaissance Mortgage Acceptance Corp., and Renaissance
R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881
to 07-11883).
The Debtors selected David B. Stratton, Esq. and James C.
Carignan, Esq. at Pepper Hamilton LLP as their counsel. The
Debtors' amended consolidated quarterly financial condition as of
Sept. 30, 2007, showed $7,223,528,000 in total assets and
$7,108,232,000 in total liabilities. The Debtors' petition listed
D.B. Structured Products Inc. as their largest unsecured creditor
holding a $19,500,000 claim.
The Debtors' exclusive period to file a plan expires on April 15,
2008. (Delta Financial Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or
215/945-7000).
DELTA FINANCIAL: Millers Sell 4,237,895 Shares in Private Deals
---------------------------------------------------------------
Hugh Miller, Marc Miller, Lee Miller and William J. Horan
disclose in four separate regulatory filings delivered to the
U.S. Securities and Exchange Commission on Dec. 31, 2007, that
two unnamed family trusts for which they serve as Trustees sold
4,237,895 shares of stock in Delta Financial Corp. in eight
private $1.00 transactions on Dec. 27, 2007.
Hugh Miller acquired 1,145,965 of the shares personally in two
$1.00 transactions from the family trusts on Dec. 27; Marc Miller
personally purchased 1,145,965 shares in two $1.00 transactions
from the family trusts on Dec. 27; and Lee Miller personally
purchased 1,145,965 shares in two $1.00 transactions from the
family trusts on Dec. 27.
Marc Miller discloses that he sold 600,000 shares for $1.00 in a
private transaction on Dec. 27, and Lee Miller also sold 600,000
shares for $1.00 on the same date.
On Dec. 27, the filings relate, a UTMA Trust under which Marc
Miller serves as Custodian sold 8,814 shares in two private $1.00
transactions.
Sidney A. Miller discloses that on Dec. 27, he disposed of
350,000 shares in a private $1.00 transaction; his wife, as a
beneficiary of the family trusts, received a distribution of
150,000 shares from the family trusts; and his wife sold 450,000
shares that same day in a private $1.00 transaction.
On Dec. 29, the filings relate, Hugh Miller personally purchased
800,000 shares from the family trusts for $1.00, and a UTMA Trust
under which he serves as Custodian purchased 12,676 shares in two
private $1.00 transactions.
Following these Dec. 27 and 29 transactions:
-- Hugh Miller beneficially owns 2,206,101 shares of common
stock in Delta Financial. 290,895 of those shares are
owned by a family trust, of which Mr. Miller is a trustee
with shared voting and dispositive power, 54,375 of those
shares are in the form of restricted stock, and 19,000
shares are held as Custodian for two children under the
UTMA.
-- Marc Miller beneficially owns 1,032,647 shares of common
stock in Delta Financial. 290,895 of those shares are
held by a family trust, of which Mr. Miller is a trustee
with shared voting and dispositive power, and 6,338 shares
are held by his wife.
-- Lee Miller beneficially owns 1,032,647 shares of common
stock in Delta Financial. 290,895 of those shares are
held by a family trust, of which Mr. Miller is a trustee
with shared voting and dispositive power, and excludes
6,338 shares held by his wife.
-- William J. Horan beneficially owns 290,895 shares of
common stock in Delta Financial that are held by a family
trust, of which Mr. Horan is a trustee with shared voting
and dispositive power.
-- Sidney A. Miller or his wife own 89,742 shares of common
stock in Delta Financial.
About Delta Financial
Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) --
http://www.deltafinancial.com/-- is a Woodbury, New York-based
specialty consumer finance company that originates, securitizes
and sells non-conforming mortgage loans.
The company filed a chapter 11 petition on December 17, 2007
(Bankr. D. Del. Lead Case No. 07-11880). On the same day, three
affiliates filed separate chapter 11 petitions -- Delta Funding
Corp., Renaissance Mortgage Acceptance Corp., and Renaissance
R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881
to 07-11883).
The Debtors selected David B. Stratton, Esq. and James C.
Carignan, Esq. at Pepper Hamilton LLP as their counsel. The
Debtors' amended consolidated quarterly financial condition as of
Sept. 30, 2007, showed $7,223,528,000 in total assets and
$7,108,232,000 in total liabilities. The Debtors' petition listed
D.B. Structured Products Inc. as their largest unsecured creditor
holding a $19,500,000 claim.
The Debtors' exclusive period to file a plan expires on April 15,
2008. (Delta Financial Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or
215/945-7000).
DEUTSCHE BANK: Moody's Downgrades ratings on 62 Tranches
--------------------------------------------------------
Moody's Investors Service downgraded the ratings of 62 tranches
and has placed under review for possible downgrade the ratings of
16 tranches from 6 deals issued by Deutsche Bank in 2007.
Additionally, one downgraded tranche remains on review for
possible further downgrade. The collateral backing these classes
consists of primarily first lien, fixed and adjustable-rate, Alt-A
mortgage loans.
The ratings were downgraded and placed under review for downgrade
based on higher than anticipated rates of delinquency,
foreclosure, and REO in the underlying collateral relative to
credit enhancement levels. In its re-rating Moody's has also
applied its published methodology updates to the non delinquent
portion of the transactions.
Complete list of rating actions:
Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series
2007-1
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A3, previously A1,
-- Cl. M-5, Downgraded to Baa2, previously A3,
-- Cl. M-6, Downgraded to Ba2, previously Baa1,
-- Cl. M-7, Downgraded to Ba3, previously Baa2,
-- Cl. M-8, Downgraded to B1, previously Baa3,
-- Cl. M-9, Downgraded to Caa1, previously Ba1,
-- Cl. M-10, Downgraded to Caa2, previously Ba2.
Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series
2007-AR2
-- Cl. M-1 Currently Aa1 on review for possible downgrade,
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to Baa2, previously A1,
-- Cl. M-5, Downgraded to Baa3, previously A2,
-- Cl. M-6, Downgraded to Ba1, previously A3,
-- Cl. M-7, Downgraded to Ba3, previously Baa1,
-- Cl. M-8, Downgraded to B2, previously Baa2,
-- Cl. M-9, Downgraded to Caa1, previously Baa3,
-- Cl. M-10, Downgraded to Ca, previously Ba2.
Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series
2007-BAR1
-- Cl. A-5 Currently Aaa on review for possible downgrade,
-- Cl. M-1 Currently Aa1 on review for possible downgrade,
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to Baa3, previously A1,
-- Cl. M-5, Downgraded to Ba2, previously A2,
-- Cl. M-6, Downgraded to Ba3, previously A3,
-- Cl. M-7, Downgraded to B2, previously Baa1,
-- Cl. M-8, Downgraded to Caa1, previously Baa2,
-- Cl. M-9, Downgraded to Caa3, previously Baa3,
-- Cl. M-10, Downgraded to C, previously Ba2.
Issuer: Deutsche Alt-A Securities, Inc. Mortgage Loan Trust Series
2007-AR1
-- Cl. M-1 Currently Aa1 on review for possible downgrade,
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to Baa2, previously A1,
-- Cl. M-5, Downgraded to Ba1, previously A2,
-- Cl. M-6, Downgraded to Ba2, previously A3,
-- Cl. M-7, Downgraded to B1, previously Baa1,
-- Cl. M-8, Downgraded to B3 on review for possible further
downgrade, previously Baa3,
-- Cl. M-9, Downgraded to Ca, previously Ba1.
Issuer: Deutsche Alt-A Securities, Inc. Mortgage Loan Trust Series
2007-AR3
-- Cl. I-M-1, Downgraded to Baa2, previously A1,
-- Cl. I-M-2, Downgraded to Baa3, previously A2,
-- Cl. I-M-3, Downgraded to Ba2, previously A3,
-- Cl. I-M-4, Downgraded to B2, previously Baa2,
-- Cl. I-M-5, Downgraded to Caa2, previously Baa3,
-- Cl. II-M-1 Currently Aa1 on review for possible downgrade,
-- Cl. II-M-2 Currently Aa2 on review for possible downgrade,
-- Cl. II-M-3 Currently Aa3 on review for possible downgrade,
-- Cl. II-M-4, Downgraded to Baa1, previously A1,
-- Cl. II-M-5, Downgraded to Baa3, previously A2,
-- Cl. II-M-6, Downgraded to Ba1, previously A3,
-- Cl. II-M-7, Downgraded to B1, previously Baa1,
-- Cl. II-M-8, Downgraded to B3, previously Baa2,
-- Cl. II-M-9, Downgraded to Caa2, previously Baa3.
Issuer: Deutsche Alt-B Securities Mortgage Loan Trust, Series
2007-AB1
-- Cl. B-1 Currently Aa1 on review for possible downgrade.
DIRECT INSITE: Sept. 30 Balance Sheet Upside-Down by $1.6 Million
-----------------------------------------------------------------
Direct Insite Corp.'s consolidated balance sheet at Sept. 30,
2007, showed $4.4 million in total assets and $6.0 million in
total liabilities, resulting in a $1.6 million total shareholders'
deficiency.
The company's consolidated balance sheet at Sept. 30, 2007, also
showed strained liquidity with $3.7 million in total current
assets available to pay $5.8 million in total current liabilities.
The company reported net income of $524,000 on revenue of
$2.6 million for the third quarter ended Sept. 30, 2007, compared
with a net loss of $93,000 on revenue of $2.2 million in the
corresponding quarter of 2006.
Revenue from the company's recurring Invoices on Line services
increased to $2.0 million for the three months ended Sept. 30,
2007, compared to recurring revenue of $1.7 million for the three
months ended Sept. 30, 2006.
"As our customers migrate from deployment to global production of
our service offerings we continue to achieve increased recurring
revenues, resulting in our 4th consecutive quarter of
profitability", said James A. Cannavino, chairman and chief
executive officer of Direct Insite.
Net income was $1.5 million for the nine months ended Sept. 30,
2007, compared to a net loss of $400,000 for the nine months ended
Sept. 30, 2006.
Total revenue for the nine months ended Sept. 30, 2007, was
$7.4 million, a 15.9% increase over revenue of $6.4 million for
the nine monhts of 2006.
The company also reported growth in cash flows from continuing
operations improving to $2.3 million for the nine months ended
Sept. 30, 2007, compared to cash flows from continuing operations
of $910,000 for the same period in 2006.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2007, are available for
free at http://researcharchives.com/t/s?26df
About Direct Insite
Headquartered in Bohemia, New York, Direct Insite Corp.
(OTC BB: DIRI.OB) -- http://www.directinsite.com/-- provides
financial supply chain automation across Procure-to-Pay and Order-
to-Cash processing. The company's global eInvoice Management
services automate complex manual business processes such as
invoice validation, order matching, consolidation, dispute
handling, and e-payment processing. Direct Insite solutions are
used by more than 7,000 corporations across 62 countries, 15
languages and multiple currencies.
DYADIC INTERNATIONAL: Unit Gets Default Notice from Emalfarb Trust
------------------------------------------------------------------
Dyadic International, Inc. said Tuesday that is wholly-owned
subsidiary, Dyadic International (USA), Inc., on Jan. 2, 2008,
received a purported declaration of default from the Mark A.
Emalfarb Trust under agreement dated October 1, 1987 relating to
Dyadic (USA)'s Revolving Note in favor of the Emalfarb Trust dated
as of May 29, 2003 with a maturity date of January 1, 2009.
Principal under the Note bears interest at the rate of 8% per
annum, 14% following a default under the Note; the Note has a
principal balance of approximately $2.4 million and is secured by
certain of Dyadic (USA)'s assets.
The Emalfarb Trust has as its trustee and beneficiary Mark A.
Emalfarb, a director of the company and the former Chief Executive
Officer and President of the company.
According to a Schedule 13D filing, filed on Nov. 13, 2007, Mark
Emalfarb, through the Emalfarb Trust, owned 5,822,125 shares, or
approximately 19.4%, of the company's outstanding shares of common
stock as of Nov. 9, 2007. In addition, according to the 13D
filing, the Francisco Trust under agreement dated Feb. 28, 1996,
whose beneficiaries are the spouse and descendants of Mark
Emalfarb, owned 4,844,578 shares, or approximately 15.9%, of the
company's outstanding shares of common stock as of Nov. 9, 2007.
2007 Default Notice
As disclosed in the in the company's Current Report on Form 8-K
filed Oct. 24, 2007, Dyadic (USA), on Oct. 3, 2007, received a
purported written notice of default from the Emalfarb Trust
pursuant to the Note and the Security Agreement dated as of May
29, 2003, as amended by the first amendment thereto dated as of
Aug. 19, 2004.
The 2007 Default Notice alleged that, with reference to certain
events identified in the 2007 Default Notice and reported in the
company's Current Reports on Form 8-K filed prior to the date of
the 2007 Default Notice, Dyadic (USA) may be in default under the
Note and Security Agreement.
2008 Default Notice
The 2008 Default Notice asserts that the Events, as referred to in
the 2007 Default Notice, with no new or different events
identified, have continued for more than 90 days and purports to
declare Dyadic Florida in Default, as defined in the Note, under
the Note and that all amounts evidenced under the Note are
immediately due and payable to the Emalfarb Trust.
The 2008 Default Notice demands payment of all unpaid principal
and accrued interest due on the Note, plus approximately $11,000
in legal fees.
The company had previously stated and reaffirms its belief that it
is not in default under the Note. The company does not believe
that any of the Events constitutes a default under the Note. The
company says that it has made all payments required by the terms
of the Note.
Although no assurances can be given as to the ultimate outcome of
this matter, the company disagrees with the claims in the 2007
Default Notice and the 2008 Default Notice that a default has
occurred under the Note and intends to vigorously contest these
claims.
About Dyadic
Dyadic International, Inc. (AMEX: DIL) is a biotechnology company
that uses its patented and proprietary technologies to conduct
research and development activities for the discovery,
development, and manufacture of products and enabling solutions to
the bioenergy, industrial enzyme and pharmaceutical industries.
EL PASO CORP: Earns $155 Million in 2007 Third Quarter
------------------------------------------------------
El Paso Corp. reported net income of $155.0 million on operating
revenues of $1.17 billion for the third quarter ended Sept. 30,
2007, compared with net income of $135.0 million on operating
revenues of $942.0 million in the same period last year.
Third quarter 2007 results from continuing operations include a
$65.0 million after-tax impairment of the company's interests in
its Brazilian power assets due in part to ongoing developments in
Brazil's electricity markets.
Results also include a $49.0 million after-tax gain related to the
reversal of a liability related to The Coastal Corporation's
legacy crude oil marketing and trading business; a $7.0 million
after-tax loss associated with the company's indemnification of
Case Corporation retiree benefits; and a $10.0 million after-tax
gain related to the mark-to-market impact of derivatives in the
marketing segment intended to manage price risk on natural gas and
oil production.
Third quarter 2006 results include a comparable $43.0 million
after-tax mark-to-market gain.
"This quarter continues our financial and operational success as
our Pipelines and E&P businesses performed well," said Doug
Foshee, El Paso's president and chief executive officer. "During
the quarter, we completed the Peoples acquisition, which added
excellent staff and properties into our E&P operations. The
quarter also included significant exploration success in Brazil.
And three major pipeline projects, representing $1.2 billion of
capital, received FERC approval as we have continued to expand our
pipeline business. We also marked an important step in forming
our pipeline MLP with the registration filing for El Paso Pipeline
Partners."
For the nine months ended Sept. 30, 2007, El Paso reported net
income of $950.0 million compared with $641.0 million for the
first nine months of 2006. In addition to the aforementioned
third quarter 2007 items, results for 2007 include $674.0 million
of earnings that relate primarily to the gain on the sale of ANR
and related assets. Results for 2007 also include a
$184.0 million after-tax charge related to early debt retirement
costs and a $40.0 million mark-to-market after-tax loss on
production-related derivatives in the marketing segment.
During the same period in 2006, production-related derivatives
generated a $164.0 million mark-to-market after-tax gain, and
earnings from discontinued operations were $95.0 million.
Cash Flow from Operations
During 2007, the company generated positive operating cash flow of
approximately $1.46 billion, primarily as a result of cash
provided by the company's pipeline and exploration and production
operations. The company utilized this operating cash flow and
cash from its discontinued operations to fund maintenance and
growth projects in the pipeline and exploration and production
operations and to reduce debt obligations.
Balance Sheet
At Sept. 30, 2007, the company's consolidated balance sheet showed
$24.08 billion in total assets, $19.05 billion in total
liabilities, $22.0 million in securities of subsidiaries, and
$5.01 billion in total stockholders' equity.
The company's consolidated balance sheet at Sept. 30, 2007, also
showed strained liquidity with $2.03 billion in total current
assets available to pay $2.78 billion in total current
liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2007, are available for
free at http://researcharchives.com/t/s?26e3
About El Paso Corporation
Headquartered in Houston, Texas, El Paso Corporation (NYSE: EP) --
http://www.elpaso.com/-- provides natural gas and related energy
products. El Paso owns North America's largest interstate natural
gas pipeline system and one of North America's largest independent
natural gas producers.
* * *
As reported in the Troubled Company Reporter on Nov. 20, 2007,
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit ratings on El Paso Corp. and subsidiaries. The outlook
remains positive.
ENTERGY GULF: S&P Maintains Rating on Preferred Stock at BB+
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BBB' corporate
credit rating to Entergy Gulf States Louisiana LLC and Entergy
Texas Inc. and withdrew the ratings on Entergy Gulf States Inc.
The ratings are on CreditWatch with developing implications
pending the receipt of additional details regarding the spin-off
of parent Entergy Corp.'s merchant nuclear power plant assets and
the use of the proceeds.
The rating action is the result of EGSI's plan to legally separate
into two distinct vertically integrated utilities, along local
jurisdictional lines: EGSI-LA and ETI, effective Jan. 1, 2008.
The separation did not result in the creation of new obligations
or the issuance of new or additional debt, and does not adversely
affect the consolidated credit quality of Entergy Corp. The debt
obligations of EGSI will remain with EGSI-LA, with the first
mortgage bonds affirmed at 'BBB+' with recovery rating of '1', the
senior unsecured debt rate at 'BBB-', and the preferred stock
affirmed at 'BB+'.
Post-separation, EGSI-LA will assume all of EGSI's debt
obligations. The debt obligations totaled $2.688 billion as of
Sept. 30, 2007, including about $2.1 billion of first mortgage
bonds. As part of the separation plan, ETI will enter into a
debt-assumption agreement with EGSI-LA for about $1.1 billion of
the total obligations and will execute a Texas and Louisiana
mortgage in favor of EGSI-LA. This agreement explicitly defines
the portion of each debt obligation for which ETI is responsible
and provides it with three years to repay or refinance the assumed
debt. Therefore, when computing certain coverage or
capitalization ratios, Standard & Poor's backs out the effect of
the assumed debt from EGSI-LA's financial statements.
FAIRPOINT COMM: Urges Vermont Public Service Board to Okay Buy
--------------------------------------------------------------
FairPoint Communications Inc. has reached an agreement with the
Vermont Department of Public Service regarding its proposed
acquisition of Verizon's wireline operations in Vermont.
The stipulation incorporates key features of the approved amended
stipulation agreement in Maine, well as other conditions.
In the stipulation FairPoint, Verizon, and the Department
urge the Vermont Public Service Board to approve the merger,
subject to the conditions.
In the stipulation, the Department also agrees that subject to the
conditions, the merger transaction "will promote the public good
and the general good of the state." FairPoint and Verizon also
filed a motion requesting the board approve the transaction as
modified.
FairPoint's acquisition of Verizon's wireline operations in
Vermont is part of a transaction in which FairPoint would
also acquire Verizon's wireline operations in Maine and New
Hampshire. The transaction requires approval by the three states'
regulatory agencies and by the Federal Communications Commission.
Maine's Public Utilities Commission has already voted to approve
an amended stipulation agreement and other conditions, with some
remaining matters subject to further deliberations.
"We're pleased with the stipulation and appreciate the hard work
and support of the Vermont Department of Public Service," Gene
Johnson, FairPoint's chairman and CEO, stated. "We look forward
to working with the Department as we serve the public interest in
the state of Vermont."
In addition to those key approved conditions in the Maine
stipulation, FairPoint agreed to additional conditions in Vermont,
which include:
-- the commitment to make approximately $40 million in
capital expenditures in Vermont in each of the first
three years after transaction close;
-- additional broadband expansion in Vermont to ensure
broadband is available to all customers in at least 50%
of FairPoint's markets by Dec. 31, 2010;
-- the adoption of a Performance Enhancement Plan that
further solidifies FairPoint's commitment to improve
service quality and expand broadband availability;
-- FairPoint agreed to an independent third party monitor
for the back-office cutover process or the conversion
from Verizon's systems to FairPoint's systems; and
-- the adoption of a dual pole remediation project.
About FairPoint Communications
Based in Charlotte, North Carolina, FairPoint Communications Inc.
(NYSE: FRP) -- http://www.fairpoint.com/-- provides
communications services to rural and small urban communities
across the country. FairPoint owns and operates 30 local
exchange companies located in 18 states offering an array of
services, including local and long distance voice, data, Internet
and broadband offerings.
* * *
FairPoint Communications Inc. continues to carry Moody's Investor
Services' "B1" probability of default and long term corporate
family ratings, which were placed in January 2005.
FEDDERS CORP: Runs Short of Sec. 363 Conditions, U.S. Trustee Says
------------------------------------------------------------------
Kelly Beaudin Stapleton, the United States Trustee for Region 3
asks the U.S. Bankruptcy Court for the District of Delaware to
deny Fedders Corporation and its debtor-affiliates' request, among
others, to sell their properties and to grant relief to Eubank
Coil Company, the Universal Comfort Products Private Ltd. and
Fedders Islandaire Inc.
The U.S. Trustee also wants denial of the Debtors' motion to
transfer interest in Xian Fedders Dong Fang Air Conditioning
Compressor Co., Ltd. to Xi'an Oriental Group Co., Ltd.
The U.S. Trustee relates that various sales or transfer motions
were filed with the Court on Dec. 21, 2007, and that the Debtors
failed to meet obligations under Section 363 of the U.S.
Bankruptcy Code regarding the various sales or transfers.
Also, the U.S. Trustee requests that the Debtors address issues
related to consumer privacy under Section 363(b)(1) and consumer
fraud under Section 363(o) before it seeks approval of any sale.
Specifically, the U.S. Trustee says that Debtors must provide
evidence that the sale is for fair value and that a good business
reason exists.
It is essential, the U.S. Trustee contends, that there is full
disclosure with respect to the parties' relationships to make a
good faith determination at the sale hearing. The Debtors'
relationship to the purchasers must be fully disclosed;
In addition, the U.S. Trustee wants that the proposed sales and
transfers must satisfy the "Abbotts Dairies" requirements and
comply with Fed. R. Bankr.P.6004 so that the U.S. Trustee, Court,
Committee, creditors and other parties can evaluate the proposed
transactions' bona fides and determine that the sales and
transfers are in the creditors' best interests and comply with
applicable law;
According to the U.S. Trustee, close and careful scrutiny and
examination should be given to the proposed motion to sell Fedders
Islandaire Inc. to Robert E. Hansen, Jr., who is currently the
president and board member of Islandaire. Islandaire's assets are
those it used for business operations. Islandaire has about 120
employees and is headquartered in leased facilities in East
Setuaket, New York. It primarily manufactures replacement
packaged terminal air conditioners (heating and cooling) for units
that are no longer available from the original manufacturer.
Further, the U.S. Trustee says that Debtors must acknowledge that
the proposed sales and transfers will not be free and clear of
claims and defenses related to consumer credit transactions
subject to the Truth in Lending Act as defined by Section 363(o).
The U.S. Trustee relates that the Debtors' various motion does not
provide sufficient information for her to determine whether a
consumer privacy ombudsman needs to be appointed to protect
personally identifiable information about individuals.
Last day for filing objection to the matter is today, Jan. 10,
2008, at 4:00 p.m. and the hearing will be on Jan. 17, 2008, at
10:30 a.m.
About Fedders Corporation
Based in Liberty Corner, New Jersey, Fedders Corporation --
http://www.fedders.com/-- manufactures and markets air
treatment products, including air conditioners, air cleaners,
dehumidifiers, and humidifiers.
The company filed for Chapter 11 protection on Aug. 22, 2007,
(Bankr. D. Del. Case No. 07-11182). Its debtor-affiliates
filed for separate Chapter 11 cases. Norman L. Pernick, Esq.,
Irving E. Walker, Esq., and Adam H. Isenberg, Esq., of Saul,
Ewing, Remick & Saul LLP represents the Debtors in their
restructuring efforts. The Debtors have selected Logan & Company
Inc. as claims and noticing agent. The U.S. Trustee for Region 3
has appointed an Official Committee of Unsecured Creditors in this
case. When the Debtors filed for protection from its creditors,
it listed total assets of $186,300,000 and total debts of
$322,000,000.
The company has production facilities in the United States in
Illinois, North Carolina, New Mexico, and Texas and
international production facilities in the Philippines, China
and India.
FEDERAL-MOGUL: Moody's Holds Low-B Ratings with Stable Outlook
--------------------------------------------------------------
Moody's Investors Service confirmed the ratings of the reorganized
Federal-Mogul Corporation -- Corporate Family Rating, Ba3;
Probability of Default Rating, Ba3; and senior secured bank credit
facilities, Ba2. The outlook is stable. The financing for the
company's emergence from Chapter 11 bankruptcy protection has been
funded in line with the structure originally rated by Moody's in a
press release dated Nov. 28, 2007.
These ratings were confirmed:
-- Ba3 Corporate Family rating;
-- Ba3 Probability of Default rating;
-- Ba2 (LGD3, 42%) rating for the $540 million senior secured
asset based revolver;
-- Ba2 (LGD3, 42%) rating for the $1.0 billion senior secured
delayed term loan facility, which includes a $50 million
senior secured synthetic letter of credit facility and a
$0.95 billion senior secured delayed draw term loan;
-- Ba2 (LGD3, 42%) rating for the $1.96 billion senior
secured term loan.
The Speculative Grade Liquidity Rating of SGL-2 is unchanged.
Federal-Mogul Corporation, headquartered in Southfield, Michigan,
is a leading global supplier of vehicular parts, components,
modules and systems to customers in the automotive, small engine,
heavy-duty, marine, railroad, aerospace and industrial markets.
The company's primary operating segments are: Powertrain - Energy,
Powertrain Sealing and Bearings, Vehicle Safety and Protection,
Automotive Products, Global Afermarket. Federal-Mogul offers
market-leading products for original equipment and aftermarket
applications. Annual revenues approximate $6.7 billion.
FINZER IMAGING: Case Summary & 13 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Finzer Imaging Systems, Inc.
7000 East 47th Avenue Drive, Suite 100
Denver, CO 80216
Bankruptcy Case No.: 08-10127
Type of Business: The Debtor sells furniture in wholesale. See
http://www.finzer.com
Chapter 11 Petition Date: January 7, 2008
Court: District of Colorado (Denver)
Judge: Howard R. Tallman
Debtor's Counsel: Jeffrey Weinman, Esq.
William A. Richey, Esq.
730 17th Street, Suite 240
Denver, CO 80202
Tel: (303) 572-1010
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 13 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Travelers $20,559
C.I. Remittance Center
Hartford, CT 06183-0001
Kutner, Miller & Kearns, P.C. $9,019
303 East 17th Avenue,
Suite 500
Denver, CO 80203-1258
Harry L. Simon, Esq. $6,817
7100 East Hampden Avenue
Denver, CO 80203-4534
B.K.D., L.L.P. $5,400
Colortech Printing $5,324
Xcel Energy $4,881
Cowboy Moving Storage $4,023
Specialized Trans., Inc. $3,681
Howard & Francis, L.L.P. $2,779
Equipment Savors $2,678
Ricoh Canada, Inc. $2,608
O.M.D. Corp. $2,556
Jeff Feldman $2,393
FIRST MAGNUS: Panel Denies Snobbing Snell & Wilner Retention Issue
------------------------------------------------------------------
The Official Committee of Unsecured Creditors informed the Hon.
James M. Marlar of the U.S. Bankruptcy Court for the District of
Arizona that it acted immediately on the issue about Snell &
Wilmer LLP's representation of the National Bank of Arizona and
First Magnus Capital Inc.
"The Creditors Committee knew of the representation and addressed
the matter immediately upon its formation by the Office of the
United States Trustee," says Michael D. Warner, Esq., at Warner
Stevens LLP, in Forth Worth, Texas. "It is important to
inform the Court of these facts, since WNS North America Inc.,
seeks to create the impression in its request that the Creditors
Committee has ignored the issue."
As previously reported, WNS asked the Court for Snell & Wilmer's
disqualification from intervening in the Chapter 11 case of First
Magnus Financial Corporation. It questioned why the law firm
accepted its engagements with National Bank of Arizona and FMC,
given their diametrically opposed interests.
FMCI is the Debtor's 100% parent company while the National Bank
of Arizona is its largest listed unsecured creditor.
Mr. Warner relates that Matt Waterman of Snell & Wilmer was
initially appointed by the U.S. Trustee as the representative of
the National Bank of Arizona.
"After the Creditors Committee raised the issue of Snell &
Wilmer's representation of the National Bank of Arizona and FMC
with Mr. Waterman, he then discussed the issue of the firm's
concurrent representation with the U.S. Trustee," Mr. Warner
says.
The U.S. Trustee filed an amended notice of appointment of Ken
Goldstein, an officer of the bank, after she was informed by
Snell & Wilmer and the National Bank of Arizona that the officer
would be the Creditors Committee member to represent the bank
while the law firm would serve as its counsel.
Meanwhile, Mr. Waterman agreed with the U.S. Trustee and the
panel that he would rescue himself and that Mr. Goldstein would
not discuss the matter with him or with anyone else at Snell &
Wilmer if any issues about FMC came up before the Creditors
Committee. Mr. Waterman also agreed not to discuss any Creditors
Committee matters with any counsel within his firm representing
FMC.
"Since the National Bank of Arizona and Snell & Wilmer informed
the Creditors Committee of the arrangement, we don't believe
there have been issues presented to or addressed by the panel
that have directly dealt with FMC," according to Mr. Warner. He
further says that under the proposed Plan of Liquidation, insider
issues and claims will be addressed by the Litigation Trustee
after its confirmation.
About First Magnus
Based in Tucson, Arizona, First Magnus Financial Corporation --
http://www.firstmagnus.com/-- purchases and sells prime and
Alt-A mortgage loans secured by one-to-four unit residences.
The company filed for chapter 11 protection on Aug. 21, 2007
(Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at
Greenberg Traurig LLP serves as the counsel for the Debtor. The
Official Committee of Unsecured Creditors has selected the firm
Warner Stevens LLP as its counsel. When the Debtor filed for
bankruptcy, it listed total assets of $942,109,860 and total debts
of $812,533,046.
The Debtor's exclusive period to file a plan expired on Dec. 19,
2007. The confirmation hearing on the Debtor's liquidation plan
is on Feb. 7, 2008. (First Magnus Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/
or 215/945-7000).
FIRST MAGNUS: May Pursue Tucson Lot Sale; Pays Tax to Pima County
-----------------------------------------------------------------
The Hon. James M. Marlar of the U.S. Bankruptcy Court for the
District of Arizona granted the request of First Magnus Financial
Corporation to sell about 105,979 square feet of real property
located in the City of Tucson, Pima County, State of Arizona, for
$1,600,000 to Rynoke LLC.
Prior to the decision, the Court held an auction but failed to
solicit higher bids for the property at the sale hearings on
Dec. 7 and 17, 2007.
Judge Marlar allowed the Debtor to sell the property free and
clear of any judgment liens, including the lien recorded at the
Office of the Pima County Recorder. He also approved the
employment of Town West Realty as real estate broker and the
payment of a 6% sales commission for its services.
The Debtor was directed to segregate and hold a portion of the
sale proceeds in the DIP Hold Account to cover the lien alleged
by Pima County Treasurer as well as an additional $20,000 for the
alleged judgment lien.
Payment of $128,865 in Taxes Requested
Shortly after the decision, Pima County Treasurer asked the Court
to direct the Debtor to pay $128,865 in personal property taxes
and the accrued interest from the sale proceeds of the real
property.
German Yusufov, Deputy County Attorney for Pima County, said the
request is appropriate under Section 42-17154 of A.R.S. Section
42-17154 states that a personal property is liable for taxes
levied on real property and vice-versa.
"The Debtor's personal property tax liability is a lien on all of
its real property in Pima County, including the parcel being sold
and is payable from the sale proceeds," Mr. Yusufov stated. He
further said that Pima County Treasurer's lien for the personal
property taxes from the real property cannot be removed until the
Debtor pays the taxes in full.
As reported in the Troubled Company Reporter on Dec. 10, 2007,
Pima County asked the Court to deny First Magnus' request to
sell its Tucson real property unless Pima County is assured
payment for taxes due.
About First Magnus
Based in Tucson, Arizona, First Magnus Financial Corporation --
http://www.firstmagnus.com/-- purchases and sells prime and
Alt-A mortgage loans secured by one-to-four unit residences.
The company filed for chapter 11 protection on Aug. 21, 2007
(Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at
Greenberg Traurig LLP serves as the counsel for the Debtor. The
Official Committee of Unsecured Creditors has selected the firm
Warner Stevens LLP as its counsel. When the Debtor filed for
bankruptcy, it listed total assets of $942,109,860 and total debts
of $812,533,046.
The Debtor's exclusive period to file a plan expired on Dec. 19,
2007. The confirmation hearing on the Debtor's liquidation plan
is on Feb. 7, 2008. (First Magnus Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/
or 215/945-7000).
FORD MOTOR: Focused Talks Spur Bidder Tata Motors' High Bond Risk
-----------------------------------------------------------------
Tata Motors Ltd.'s bond risk rose to a record with credit-default
swaps on the company reaching 325 basis points Tuesday morning
from 300 basis points last week, The Economic Times reports.
According to the report, the increase of the risk of the Tata
Motors defaulting on its bonds was brought about by the concern
that it will borrow to fund its acquisition of Ford Motor Co's
Jaguar and Land Rover brands.
As reported in the Troubled Company Reporter on Jan. 4, 2008,
Lewis Booth, executive vice president for Ford of Europe and
Premier Automotive Group (Chairman - Jaguar, Land Rover, Volvo and
Ford of Europe) said that Ford has entered into "focused
negotiations at a more detailed level" with Tata Motors,
signaling that the Indian carmaker has become the preferred
bidder for the two brands.
"It may not be a good time for Tata to enter into such a deal
given the state of the credit market," ET quotes Aaron Low, a
principal in Singapore at hedge fund Lumen Advisers as saying.
The Ford negotiations cued rating agencies to place Tata Motors
credit ratings on negative watch.
About Tata Motors
India's largest automobile company, Tata Motors Limited --
http://www.tatamotors.com/-- is mainly engaged in the business
of automobile products consisting of all types of commercial and
passenger vehicles, including financing of the vehicles sold by
the Company. The Company's operating segments consists of
Automotive and Others. In addition to its automotive products,
it offers construction equipment, engineering solutions and
software operations.
Tata Motors has operations in Russia and the United Kingdom.
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The company provides
financial services through Ford Motor Credit Company.
The company has operations in Japan in the Asia Pacific region.
In Europe, the company maintains a presence in Sweden, and the
United Kingdom. The company also distributes its brands in
various Latin American regions, including Argentina and Brazil.
* * *
As reported in the Troubled Company Reporter on Nov. 19, 2007,
Moody's Investors Service affirmed the long-term ratings of Ford
Motor Company (B3 Corporate Family Rating, Ba3 senior secured,
Caa1 senior unsecured, and B3 probability of default), but changed
the rating outlook to Stable from Negative and raised the
company's Speculative Grade Liquidity rating to SGL-1 from SGL-3.
Moody's also affirmed Ford Motor Credit Company's B1 senior
unsecured rating, and changed the outlook to Stable from Negative.
These rating actions follow Ford's announcement of the details of
the newly ratified four-year labor agreement with the UAW.
G REIT INC: Discloses Intent to Form Liquidation Trust
------------------------------------------------------
G REIT, Inc. said Monday that it intends to enter into a
liquidating trust agreement on or about Jan. 22, 2008, for the
purpose of winding up the company's affairs and liquidating its
assets, Triple Net Properties, LLC, disclosed in its website.
It is currently anticipated that, on or about Jan. 28, 2008, the
company will transfer its then remaining assets to the Trustees of
the G REIT Liquidating Trust. The Liquidating Trust will also
assume the company's then remaining liabilities.
As of Jan. 22, 2008, the company's stock transfer books will be
closed. The formation of the Liquidating Trust is in accordance
with the company's Plan of Liquidation, which was previously
approved by the company's stockholder
.
The transfer of the company's assets and liabilities to the
Liquidating Trust should preserve the company's ability to have
deducted amounts distributed pursuant to the Plan of Liquidation
as dividends and thereby not be subject to federal income tax on
such amounts. In addition, the company expects that the transfer
of assets to the trust will enable the company to reduce the
costs associated with public reporting obligations and related
audit expenses that may not be applicable to the Liquidating
Trust.
Under the terms of the proposed Trust Agreement and the Plan of
Liquidation, each stockholder of the company on the Record Date
automatically will become the holder of one unit of beneficial
interest in the Liquidating Trust for each share of the company's
common stock then held of record by such stockholder. Upon the
transfer of the company's assets and liabilities to the
Liquidating Trust, all outstanding shares of the company's common
stock will be deemed canceled. The rights of beneficiaries in
their beneficial interests will not be represented by any form of
certificate or other instrument.
Stockholders will not be required to take any action to receive
beneficial interests.
The Trustees will maintain a record of the name and address of
each beneficiary and such beneficiary's aggregate units of
beneficial interest in the Liquidating Trust. Subject to certain
exceptions related to transfer by will, intestate succession or
operation of law, beneficial interests in the Liquidating Trust
will not be transferable, nor will a beneficiary have authority or
power to sell or in any other manner dispose of any such
beneficial interests.
On the date of the conversion, the economic value of each unit of
beneficial interest will be equivalent to the economic value of a
share of the company's common stock. In addition, immediately
before the transfer of the company's assets and liabilities to the
Liquidating Trust, the company's operating partnership will redeem
the special limited partner interest held by Triple Net, in
exchange for the right to receive 15% of certain distributions
made by the company and the Liquidating Trust after the company's
stockholders have received certain returns, as provided by the
partnership agreement.
After the redemption, the company will own 100% of the outstanding
partnership interests in the operating partnership. The operating
partnership will be dissolved in connection with the dissolution
of the company, and all of its assets and liabilities will be
distributed to the Company immediately before the transfer to the
Liquidating Trust.
It is currently contemplated that all of the members of the
company's board of directors, Gary H. Hunt, W. Brand Inlow, Edward
A. Johnson, D. Fleet Wallace and Gary T. Wescombe, will serve
as the initial trustees. Successor trustees may be appointed to
administer the Liquidating Trust in accordance with the terms of
the Liquidating Trust Agreement.
It is expected that from time to time the Liquidating Trust will
make distributions of its assets to beneficiaries, but only to the
extent that such assets will not be needed to provide for the
liabilities, including contingent liabilities, assumed by the
Liquidating Trust. No assurances can be given as to the
amount or timing of any distributions by the Liquidating Trust.
For federal income tax purposes, on the date the assets and
liabilities of the company are transferred to the Liquidating
Trust, each stockholder of the company as of the Record Date will
be treated as having received a pro rata share of the assets of
the company to be transferred to the Liquidating Trust, less such
stockholder's pro rata share of the liabilities of the company
assumed by the Liquidating Trust.
Accordingly, on that date each stockholder should recognize gain
or loss in an amount equal to the difference between (x) the fair
market value of such stockholder's pro rata share of the net
equity of the Company transferred to the Liquidating Trust,
and (y) such stockholder's adjusted tax basis in the shares of the
company's common stock held by such stockholder on the Record
Date.
The Liquidating Trust is intended to qualify as a "liquidating
(grantor) trust" for federal income tax purposes. As such, the
Liquidating Trust should not itself be subject to federal income
tax. Instead, each beneficiary (formerly stockholder) shall take
into account in computing its taxable income, its pro rata share
of each item of income, gain, loss and deduction of the
Liquidating Trust, regardless of the amount or timing of
distributions made by the Liquidating Trust to beneficiaries.
Distributions, if any, by the Liquidating Trust to beneficiaries
generally should not be taxable to such beneficiaries. The
Trustees will furnish to beneficiaries of the Liquidating Trust a
statement of their pro rata share of the assets transferred by the
company to the Liquidating Trust, less their pro rata share of the
company's liabilities assumed by the Liquidating Trust so that
they may calculate their gain or loss on the transfer. On a
yearly basis, the Trustees also will furnish to beneficiaries a
statement of their pro rata share of the items of income, gain,
loss, deduction and credit (if any) of the Liquidating Trust to be
included on their tax returns.
The state and local tax consequences of the transfer of assets to
the Liquidating Trust may be different from the federal income tax
consequences of such transfer. In addition, any items of
income, gain, loss, deduction or credit of the Liquidating Trust,
and any distribution made by the Liquidating Trust, may be treated
differently for state and local tax purposes than for federal
income tax purposes. The tax summary above is for general
informational purposes only and does not address all possible tax
considerations that may be material to a stockholder of the
Company and does not constitute legal or tax advice. Moreover, it
does not deal with all tax aspects that might be relevant to a
stockholder of the company, in light of its personal
circumstances, nor does it deal with particular types of
stockholders that are subject to special treatment under the
federal income tax laws.
To ensure compliance with requirements imposed by the Internal
Revenue Service, any tax information contained in this press
release is not intended or written to be used, and cannot be
used, for the purposes of (i) avoiding penalties under the
Internal Revenue Code or (ii) promoting marketing or recommending
to another party any transaction or matter addressed herein.
Stockholders of the company are urged to consult with their tax
advisers as to the tax consequences to them of the establishment
and operation of, and distributions, if any, by, the Liquidating
Trust.
About Triple Net
Triple Net Properties, LLC, the advisor to G REIT, Inc., is a
wholly owned indirect subsidiary of Grubb & Ellis Company, a real
estate services and investment management firm. Triple Net
Properties and affiliates manage a growing portfolio of nearly
39 million square feet of real estate, including more than 10,000
apartment units, with a combined market value in excess of
$5.4 billion. Triple Net Properties and affiliates are currently
buying and selling properties throughout the United States,
offering a full range of commercial real estate investments,
including tenant-in-common programs for investors structuring tax-
deferred (like-kind) exchanges under Section 1031 of the Internal
Revenue Code, real estate investment trusts and institutional
investments.
About G REIT Inc.
Headquartered in Santa Ana, California, G REIT Inc. is operating
under the plan of liquidation. On Dec. 19, 2005, the company's
board of directors approved a plan of liquidation which was
thereafter approved by its stockholders. The company's plan of
liquidation contemplates the orderly sale of all its assets, the
payment of its liabilities and the winding up of operations and
the dissolution of the company. The company has engaged Robert A.
Stanger & Co. Inc., or Stanger, to perform financial advisory
services in connection with its plan of liquidation, including
rendering opinions as to whether its net real estate liquidation
value range estimate and the company's estimated per share
distribution range are reasonable.
As of June 30, 2007, net assets in liquidation amounted to
$151,719,000.
HARRAH'S ENTERTAINMENT: Prices Cash Tender Offer for Senior Notes
-----------------------------------------------------------------
Harrah's Entertainment Inc. disclosed the consideration to be paid
in its cash tender offer and consent solicitation for any and all
of the outstanding:
(i) 8.875% Senior Subordinated Notes due 2008 (CUSIP No.
700690AJ9; ISIN No. US700690AJ90);
(ii) 7.5% Senior Notes due 2009 (CUSIP No. 413627AE0;
ISIN No. US413627AE02);
(iii) 7.5% Senior Notes Due 2009 (CUSIP No. 700690AN0; ISIN
No. US700690AN03); and
(iv) 7% Senior Notes due 2013 (CUSIP No. 700690AS9; ISIN No.
US700690AS99), commenced by Harrah's Operating Company
Inc., a subsidiary of Harrah's Entertainment.
The total consideration for each series of the Notes was
determined as of 2:00 p.m., New York City time, on Jan. 8, 2008,
by reference to a fixed spread of 50 basis points above the yield
to maturity of the applicable U.S. security.
The reference yield for the 8.875% Notes was 3.214%; the reference
yield for the 7.5% Notes (1998) was 2.920%; the reference yield
for the 7.5% Notes (2001) was 2.869%; and the reference yield for
the 7% Notes was 3.197%.
The total consideration per $1,000 principal amount of each series
of the Notes that were validly tendered by
5:00 p.m., New York City time, on Jan. 7, 2008 is:
-- $1,032.35 for the 8.875% Notes;
-- $1,038.78 for the 7.5% Notes (1998);
-- $1,063.88 for the 7.5% Notes (2001); and
-- $1,155.56 for the 7% Notes, which in each case, includes
a cash consent payment of $30.
Holders who tender their Notes and deliver their consents after
the Consent Payment Deadline, but prior to the Offer Expiration
Date will receive the applicable tender offer consideration, which
consists of the applicable Total Consideration less the cash
consent payment of $30 per $1,000 principal amount of tendered
Notes.
All holders of Notes validly tendered prior to the Offer
Expiration Date will receive accrued and unpaid interest on their
tendered Notes up to, but not including, the payment date for the
tender offer and consent solicitation.
As a result of the receipt of the requisite consents to adopt the
proposed amendments to the applicable indentures pursuant to which
each series of the Notes was issued,
(i) the Third Supplemental Indenture among Harrah's
Entertainment, Harrah's Operating and Wells Fargo Bank,
National Association, as trustee for the Holders of the
8.875% Notes;
(ii) the Second Supplemental Indenture among Harrah's
Entertainment, Harrah's Operating and Bank of New York
Mellon Global Corporate Trust, as trustee for the
Holders of the 7.5% Notes (1998);
(iii) the Third Supplemental Indenture among Harrah's
Entertainment, Harrah's Operating and Wells Fargo, as
trustee for the Holders of the 7.5% Notes (2001); and
(iv) the Third Supplemental Indenture among Harrah's
Entertainment, Harrah's Operating and U.S. Bank National
Association, as trustee for the Holders of the 7% Notes,
have been executed.
The proposed amendments, which will eliminate substantially all
of the restrictive covenants and eliminate or modify certain
events of default and related provisions contained in each
applicable indenture, will become operative when the tendered
Notes are accepted by purchase by Harrah's Entertainment and
Harrah's Operating.
The tender offer and consent solicitation remains open and is
scheduled to expire at 8:00 a.m. New York City time, on
Jan. 23, 2008, unless extended.
Harrah's Operating's tender offer is subject to the conditions set
forth in the Statement and the related Consent and Letter of
Transmittal, including, among other things, that Harrah's
Operating obtains the financing necessary to pay for the Notes and
consents in accordance with the terms of the tender offers and
consent solicitations.
Harrah's Operating and Harrah's Entertainment have retained Citi
to act as lead dealer manager in connection with the tender offers
and consent solicitations. Questions about the tender offers and
consent solicitations may be directed to Citi at (800) 558-3745
(toll free) or (212) 723-6106 (collect).
Copies of the Offer Documents and other related documents may be
obtained from Global Bondholder Services Corporation, the
information agent for the tender offers and consent solicitations,
at (866) 924-2200 (toll free) or (212) 430-3774 (for banks and
brokers only).
About Harrah's Entertainment Inc.
Headquartered in Las Vegas, Nevada, Harrah's Entertainment
(NYSE:HET) - http://www.harrahs.com/-- has grown through
development of new properties, expansions and acquisitions, and
now owns or manages casino resorts on four continents and hosts
over 100 million visitors per year. The company's properties
operate under the Harrah's, Caesars and Horseshoe brand names;
Harrah's also owns the London Clubs International family of
casinos and the World Series of Poker. Harrah's also owns the
London Clubs International family of casinos.
* * *
Harrah's Entertainment Inc. continues to carry Standard & Poor's
"BB" long term foreign and local issuer credit ratings, which were
placed in December 2006.
HEALTHSOUTH CORP: Sept. 30 Balance Sheet Upside-Down by $1.5 Bil.
-----------------------------------------------------------------
HealthSouth Corporation's consolidated balance sheet at Sept. 30,
2007, showed $2.53 billion in total assets, $3.55 billion in total
liabilities, $93.6 million in minority interest in equity of
consolidated affiliates, and $387.4 million in convertible
perpetual preferred stock, resulting in a $1.50 billion total
shareholders' deficit.
The company's consolidated balance sheet at Sept. 30, 2007, also
showed strained liquidity with $668.9 million in total current
assets available to pay $1.02 billion in total current
liabilities.
Net income was $287.6 million for the third quarter of 2007
compared to a net loss of $76.1 million for the third quarter of
2006. Net income in the third quarter of 2007 included
approximately $40.4 million of post-tax gains associated with the
company's divesture of its surgery centers, outpatient, and
diagnostic divisions in the second and third quarters of 2007.
Net income for the quarter also included a $281.1 million income
tax benefit as a result of the recovery of federal income taxes
paid and associated interest related to tax years 1996 through
1999. As previously disclosed, in October 2007, the company
received a $440.0 million income tax recovery from the Internal
Revenue Service.
Consolidated net operating revenues were $431.6 million for the
third quarter of 2007 compared to $413.5 million for the third
quarter of 2006. Net operating revenues from inpatient hospitals
were $383.5 million, representing a 5.1% increase over the same
quarter of 2006. This increase was primarily attributable to an
increase in the company's patient case mix index and continued
compliant case growth, both of which increased revenue per
discharge, offset by slightly lower discharges quarter over
quarter due primarily to nine hospitals that moved from a 60%
compliance threshold to a 65% compliance threshold under the 75%
Rule on July 1, 2007.
Operating earnings, a non GAAP measure used by the company as an
indicator of financial performance, were $43.3 million for the
third quarter of 2007 compared to operating earnings of
$28.7 million for the third quarter of 2006.
"We saw good progress in the current quarter as both revenues and
operating earnings improved over prior year," said Jay Grinney,
president and chief executive officer of HealthSouth. "Inpatient
hospital revenues were up 5.1% and salaries and benefits improved
as a percent of net operating revenues. In addition, based on
industry data published through the Uniform Data System for
Medical Rehabilitation for the second quarter of 2007, our
hospitals continued to grow their market share of compliant cases.
This industry information, as reported on a quarter lag, showed a
6.7% compliant case growth by HealthSouth during the second
quarter of 2007 compared to an average 1.8% decline for non-
HealthSouth rehabilitation sites, which reinforces our role as the
nation's preeminent provider of inpatient rehabilitative
services."
The company reported a pre-tax loss from continuing operations of
$31.1 million for the third quarter of 2007 compared to its pre-
tax loss from continuing operations of $56.0 million for the third
quarter of 2006. The company's pre-tax loss from continuing
operations for the third quarter of 2007 included an $8.6 million
gain related to the sale of its remaining investment in Source
Medical Solutions Inc.
Cash Flow and Balance Sheet
Cash and cash equivalents were $15.9 million as of Sept. 30, 2007.
Total debt was $2.4 billion. Capital expenditures were
$10.0 million for the quarter and $25.2 million for the year-to-
date period.
The company's government, class action, and related settlements
liability decreased by $24.7 million during the third quarter of
2007 and by $141.3 million since Dec. 31, 2006.
Total debt outstanding decreased from $3.4 billion as of Dec. 31,
2006, to $2.4 billion as of Sept. 30, 2007.
During the third quarter of 2007, the company used available cash
and borrowings on its revolving credit facility to redeem
approximately $32.0 million of its 10.75% Senior Notes due 2016.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2007, are available for
free at http://researcharchives.com/t/s?26e4
About HealthSouth Corp.
Headquartered in Birmingham, Alabama, HealthSouth Corporation
(NYSE: HLS) -- http://www.healthsouth.com/-- provides inpatient
rehabilitation services. Operating in 26 states across the
country and in Puerto Rico, HealthSouth serves more than 250,000
patients annually through its network of inpatient rehabilitation
hospitals, long-term acute care hospitals, outpatient
rehabilitation satellites, and home health agencies.
HMSC CORP: S&P Changes Outlook to Negative and Retains B Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on HMSC
Corp., the intermediate holding company of Swett & Crawford Group
Inc., to negative from stable.
Standard & Poor's also said that it affirmed its 'B' counterparty
credit rating on HMSC.
"The revised outlook reflects our belief that Swett & Crawford
will not meet our stated expectations for 2007," said Standard &
Poor's credit analyst Tracy Dolin. "In addition, Swett &
Crawford's coverage metrics are starting to mirror those of lower
rated peers." During the first nine months of 2007, the
company's adjusted EBITDA fixed-charge coverage was 1.7x, which is
low for the current rating. Swett & Crawford's operating and
coverage metrics will likely deteriorate further in 2008 if
property/casualty rates soften at an accelerating pace.
The outlook revision also stems from S&P's view of Swett &
Crawford's competitive position in the wholesale insurance
brokerage space, which, though good, has deteriorated somewhat
over the last year. Swett & Crawford's market share (based on the
Business Insurance study), which had been No. One for 20 years,
fell to No. Three last year (based on 2005 premiums) and No. Four
(based on 2006 pro-forma premiums). Its peers have been more
rapidly taking advantage of opportunistic acquisitions and have
generated relatively more business from nonproperty/casualty
insurance brokering revenue streams, which are less susceptible to
current rate pressures.
The rating reflects Swett & Crawford's highly leveraged capital
structure, limited financial flexibility, and low-quality balance
sheet, which is the result of a large amount of intangibles. In
addition, Swett & Crawford is more susceptible to the vagaries of
underwriting cycles, particularly in excess and surplus lines,
than its peers because of less earnings diversification. Swett &
Crawford's wholesale property/casualty brokerage segment
contributed about 80% of commissions and fees, with the remainder
derived from its managing general agency operations. In addition,
the wholesale brokerage space has experienced increased
competition.
Partially offsetting these negative factors are the company's good
competitive position as a leading wholesale insurance broker in
the U.S. and a seasoned management team that has historically
delivered strong operating margins relative to the company's peers
and positive cash flow.
If the company remains unable to meet S&P's original performance
expectations for the current rating level, which include adjusted
EBITDA fixed-charge coverage of at least 1.9x, the ratings could
be lowered. The ratings will come under pressure particularly if
the company's margins compress or property/casualty rates continue
to soften at an accelerated pace, precipitating unsatisfactory
coverage metrics. If the company is able to improve its financial
profile materially, Standard & Poor's will consider revising the
outlook back to stable.
HYPPCO FINANCE: Fitch Revises Recovery Rating on $11.2 Mil. Notes
-----------------------------------------------------------------
Fitch revised the Distressed Recovery rating of one class of notes
issued by HYPPCO Finance Company Ltd. This revision is the result
of Fitch's review process and is effective immediately:
-- $11,216,387 class A-2 notes remain at 'CCC-'; DR revised
to 'DR1' from 'DR2'.
HYPPCO is a collateralized debt obligation, comprised primarily of
high yield bonds, that closed Feb. 29, 1996 and is managed by
Delaware Investment Advisors. Included in this review, Fitch
discussed the current state of the portfolio with the asset
manager and their portfolio management strategy going forward.
The revision of the DR rating is the result of relatively stable
collateral performance. At the time of the last review, there was
$40,066,946 of the A-2 notes remaining. Since then, over
$28,850,559 in principal has been paid to the note holders. The
transaction had an overcollateralization ratio of 121% as of the
Dec. 2, 2007 trustee report. Fitch projects that the A-2 notes
will continue to receive significant principal payments in the
future. However, there will likely not be enough proceeds to
fully redeem the notes. The current rating remains reflective of
the expected ultimate principal recovery of the notes.
The rating of the class A-2 notes addresses the likelihood that
investors will receive full and timely payments of interest, as
per the governing documents, as well as the stated balance of
principal by the legal final maturity date.
IAP WORLDWIDE: Likely Restructuring Cues S&P to Cut Ratings
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered the ratings on Cape
Canaveral, Florida-based IAP Worldwide Services Inc., including
the corporate credit rating, which was lowered to 'CC' from 'CCC'.
The ratings remain on CreditWatch with negative implications.
"The downgrade reflects the increased potential for a
restructuring given the lack of progress in resolving covenant
violations," said Standard & Poor's credit analyst Dan Picciotto.
The company violated financial covenants in the second and third
quarters of 2007. On Aug. 10, 2007, Standard & Poor's lowered the
corporate credit rating to 'CCC' from 'B-', and placed the ratings
on CreditWatch with negative implications, because of concerns
about the company's operating performance and near-term liquidity.
Total debt outstanding on Sept. 30, 2007, was about $541 million.
Standard & Poor's will lower the ratings if the company fails to
meet its financial obligations.
IMPAC SECURED: Moody's Lowers Ratings on 11 Tranches to Low-B
-------------------------------------------------------------
Moody's Investors Service downgraded the ratings of 18 tranches
and has placed under review for possible downgrade the ratings of
8 tranches from 3 deals issued by Impac in 2007. The collateral
backing these classes consists of primarily first lien, fixed and
adjustable-rate, Alt-A mortgage loans.
The ratings were downgraded and placed under review for downgrade
based on higher than anticipated rates of delinquency,
foreclosure, and REO in the underlying collateral relative to
credit enhancement levels. In its re-rating Moody's has also
applied its published methodology updates to the non delinquent
portion of the transactions.
Complete list of rating actions:
Issuer: Impac Secured Assets Corp. Mortgage Pass-Through
Certificates, Series 2007-1
-- Cl. M-1 Currently Aa1 on review for possible downgrade,
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to Baa1, previously A1,
-- Cl. M-5, Downgraded to Baa3, previously A2,
-- Cl. M-6, Downgraded to Ba1, previously A3,
-- Cl. M-7, Downgraded to Ba3, previously Baa1,
-- Cl. M-8, Downgraded to B1, previously Baa2,
-- Cl. B, Downgraded to B2, previously Baa3.
Issuer: Impac Secured Assets Corp. Mortgage Pass-Through
Certificates, Series 2007-2
-- Cl. 1-M-1 Currently Aa1 on review for possible downgrade,
-- Cl. 1-M-2 Currently Aa2 on review for possible downgrade,
-- Cl. 1-M-3 Currently Aa3 on review for possible downgrade,
-- Cl. 1-M-4, Downgraded to Baa1, previously A1,
-- Cl. 1-M-5, Downgraded to Baa3, previously A2,
-- Cl. 1-M-6, Downgraded to Ba1, previously A3,
-- Cl. 1-M-7, Downgraded to Ba3, previously Baa1,
-- Cl. 1-M-8, Downgraded to B1, previously Baa2,
-- Cl. 1-B, Downgraded to B2, previously Baa3.
Issuer: Impac Secured Assets Corp. Mortgage Pass-Through
Certificates, Series 2007-3
-- Cl. M-2 Currently Aa2 on review for possible downgrade,
-- Cl. M-3 Currently Aa3 on review for possible downgrade,
-- Cl. M-4, Downgraded to A3, previously A1,
-- Cl. M-5, Downgraded to Baa1, previously A2,
-- Cl. M-6, Downgraded to Baa2, previously A3,
-- Cl. M-7, Downgraded to Ba1, previously Baa1,
-- Cl. M-8, Downgraded to Ba2, previously Baa2,
-- Cl. B, Downgraded to Ba3, previously Baa3.
KELLWOOD CO: Completes $162MM Sale of Smart Shirts Operations
-------------------------------------------------------------
Kellwood Company has completed the sale of its Smart Shirts
manufacturing operations and related real estate assets in two
separate transactions resulting in gross proceeds of approximately
$162 million in cash in the aggregate according to Robert C.
Skinner, Jr., chairman, president and chief executive officer.
On Nov. 6, 2007, the board of directors has unanimously approved
the sale of its Smart Shirts manufacturing operations well as
related real estate assets in two separate transactions.
Kellwood received approximately $121 million in cash at closing
from the sale of the Smart Shirts business from Youngor Group Co.
Ltd.
Separately, the company sold its Smart Shirts real estate assets
in Hong Kong to Bright Treasure Development Ltd. for approximately
$41 million in cash.
"This sale is an important step in the execution of our long-term
financial and strategic plans," Mr. Skinner stated. "We
significantly reduced our percentage of private label business and
eliminated capital-intensive manufacturing from our operations
while enhancing our focus on the development of lifestyle brands
with the strongest opportunities for sales
and earnings growth."
The proceeds from the transactions will be used to repurchase
shares and reduce debt. On Jan. 3, 2008, Kellwood disclosed that
the board of directors authorized the company to enter into an $80
million accelerated share repurchase program.
"The repurchase of our shares is a tremendous investment
opportunity and is indicative of the board's confidence in our
ability to execute on our strategic initiatives," Mr. Skinner
added. "The use of the proceeds from these transactions will
enhance shareholder value and strengthen our balance sheet while
maintaining the financial flexibility for future investments in
our business."
UBS Investment Bank acted as financial advisor to the company in
connection with the sale of the Smart Shirts business.
About Youngor Group Co. Ltd.
Headquartered in China, Youngor Group Co. Ltd. (SHA:600177) --
http://www.youngor.com/-- is engaged in the garment
manufacturing, textile production and real estate businesses. The
company's products include suits and shirts under the brand of
"Youngor".
About Kellwood Company
Headquartered in St. Louis, Missouri, Kellwood Company (NYSE: KWD)
-- http://www.kellwood.com/-- markets apparel and consumer soft
goods. The company specializes in branded as well as private
label products, and markets to all channels of distribution with
product specific to a particular channel.
Smart Shirts is a manufacturer, marketer, seller and distributor
of woven and knit garments - men's shirts. While a manufacturer
for private brands, this business also designs, makes, and sells
licensed brands of men's shirts including Nautica, Claiborne,
Axcess A Claiborne Company, Concepts by Claiborne, O Oscar, an
Oscar de la Renta Company, and Perry Ellis. Smart Shirts has 14
manufacturing facilities located in the People's Republic of
China, Hong Kong, Sri Lanka and the Philippines.
* * *
As reported in the Troubled Company Reporter on Jan 7, 2008,
Standard & Poor's Ratings Services said that its long-term
corporate credit rating 'BB-' on Kellwood Co. would remain on
CreditWatch with negative implications after Kellwood's report
that it has entered into an $80 million accelerated share
repurchase program.
KRONOS ADVANCED: Lenders Extend Debt Maturity to February 29
------------------------------------------------------------
Kronos Advanced Technologies Inc. entered into an amendment to the
secured convertible promissory note dated June 19, 2007, in the
principal amount of up to $859,000 with the Sands Brothers Venture
Capital entities named therein and Critical Capital Growth Fund
L.P., which extended the maturity date of the note to Feb. 29,
2008, from Dec. 31, 2007.
Pursuant to the amendment, Kronos agreed to pay the note holders
an amendment fee comprised of:
(a) either a $25,000 cash payment or 1,470,588 shares of
Kronos' common stock; and
(b) an additional 1,470,588 shares of Kronos' common stock.
Located in Belmont, Massachusetts, Kronos Advanced Technologies
Inc. -- http://www.kronosati.com/-- through its wholly owned
subsidiary, Kronos Air Technologies Inc., has developed a new,
proprietary air movement and purification system that utilizes
high voltage electronics and electrodes to silently move and clean
air without any moving parts. Kronos is commercializing its
technology for standalone and embedded products across multiple
residential, commercial, industrial and military markets. The
company's business strategy includes a combination of building
internal capabilities, establishing strategic alliances and
structuring licensing arrangements.
At Sept. 30, 2007, the company's balnce sheet showed total assets
of $1,809,781 and total liabilities of $2,763,881, resulting to a
total stockholders' deficit of $954,100.
Going Concern Doubt
Sherb & Co. LLP, expressed substantial doubt about Kronos
Advanced Technologies, Inc.'s ability to continue as a going
concern after auditing the Company's financial statements for the
fiscal years ended June 30, 2007 and 2006. The auditing firm
pointed to the company's significant losses and working capital
deficiency at June 30, 2007.
KRONOS ADVANCED: Two Investors Elect Debt-for-Equity Swap
---------------------------------------------------------
Daniel R. Dwight, president and chief executive officer of Kronos
Advanced Technologies Inc. disclosed that two of the company's
largest investors, AirWorks Funding LLLP and Hilltop Holding
Company LP, each converted a portion of their secured convertible
promissory notes due June 19, 2010, to common stock of Kronos,
which resulted in a change in control of Kronos.
Specifically, effective Dec. 31, 2007, AirWorks and Hilltop
elected to convert an aggregate of $731,440 of the principal
amount of their Notes into an aggregate of 243,813,400 shares of
the company's common stock, in accordance with the terms of their
respective notes.
The 146,288,040 shares of common stock issued as a result of the
conversion of the AirWorks Note constitute approximately 30% of
the total outstanding shares of the Kronos' common stock.
The 97,525,360 shares of common stock issued as a result of
the conversion of the Hilltop Note constitute approximately 20% of
the total outstanding shares of the Kronos' common stock.
Kronos expects AirWorks and Hilltop to exercise their right,
pursuant to agreements entered into in connection with the initial
issuance of the Notes, to designate a majority of the members of
the company's board of directors.
Reincorporation/Recapitalization
On Dec. 14, 2007, the Kronos' board of directors approved a
reincorporation/recapitalization of Kronos which will include:
(1) Kronos being reincorporated in the State of Delaware via
a reincorporation merger with a newly created subsidiary
of Kronos;
(2) increasing the authorized share capital of Kronos to
500,000,000,000 shares of common stock and 100,000,000
shares of preferred stock; and
(3) making certain other changes to the organizational
documents of Kronos.
Effective Dec. 31, 2007, and after the conversion of the AirWorks
and Hilltop Notes, a majority of Kronos' stockholders approved the
reincorporation/recapitalization by written consent.
Prior to the effectiveness of the reincorporation/
recapitalization, Kronos will be distributing an information
statement to its stockholders in accordance with Schedule 14C
of the Securities and Exchange Act of 1934, as amended. This
information statement will include additional details regarding
the reincorporation/recapitalization.
About Kronos Advanced Technologies Inc.
Located in Belmont, Massachusetts, Kronos Advanced Technologies
Inc. -- http://www.kronosati.com/-- through its wholly owned
subsidiary, Kronos Air Technologies Inc., has developed a new,
proprietary air movement and purification system that utilizes
high voltage electronics and electrodes to silently move and clean
air without any moving parts. Kronos is commercializing its
technology for standalone and embedded products across multiple
residential, commercial, industrial and military markets. The
company's business strategy includes a combination of building
internal capabilities, establishing strategic alliances and
structuring licensing arrangements.
At Sept. 30, 2007, the company's balnce sheet showed total assets
of $1,809,781 and total liabilities of $2,763,881, resulting to a
total stockholders' deficit of $954,100.
Going Concern Doubt
Sherb & Co. LLP, expressed substantial doubt about Kronos
Advanced Technologies, Inc.'s ability to continue as a going
concern after auditing the Company's financial statements for the
fiscal years ended June 30, 2007 and 2006. The auditing firm
pointed to the company's significant losses and working capital
deficiency at June 30, 2007.
LARRY CHAO: Case Summary & Two Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Larry P. Chao
1025 Lancaster Road
Hillsborough, CA 94010
Tel: (650) 866-3979
Bankruptcy Case No.: 08-30016
Chapter 11 Petition Date: January 7, 2008
Court: Northern District of California (San Francisco)
Judge: Dennis Montali
Debtor's Counsel: Merle C. Meyers, Esq.
Meyers Law Group, PC
44 Montgomery Street, Suite 1010
San Francisco, CA 94104
Tel: (415)362-7500
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's list of its Two Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
PSM Holding Corp. Judgment entered in $43,000,000
c/o Milbank, Tweed, Hadley & favor of PSM Holding
McCloy LLP Corp. in PSM Holding
Linda Dakin-Grimm, Esq. Corp. v. National
601 South Figueroa Street, Farm Corporation,
30th Floor et al., Case No.
Los Angeles, CA 90017-5735 CV05-8891-VBF-(FMOx).
UCSF Medical Center Healthcare $284
Recovery Solutions
4510 East Pacific Coast Highway,
Suite 600
Long Beach, CA 90804-6914
MICHAEL KIRKBRIDE: Case Summary & Five Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Michael Lynn Kirkbride
Dolores Avoline Kirkbride
905 South Fort Fisher Boulevard
Kure Beach, NC 28449
Bankruptcy Case No.: 08-00120
Chapter 11 Petition Date: January 8, 2008
Court: Eastern District of North Carolina (Wilson)
Judge: J. Rich Leonard
Debtor's Counsel: Trawick H. Stubbs, Jr.
Stubbs & Perdue, P.A.
P.O. Drawer 1654
New Bern, NC 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
Total Assets: $25,384,223
Total Debts: $15,836,518
Debtor's Five Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
New Hanover Co. Tax. 2007 tax lien, 2008 $133,547
Attention: Manager or Agent
230 Gov. Center Drive,
Suite 190
Wilmington, NC 28403
American General Furniture $28,623
Attention: Manager or Agent
5120 South College Road,
Suite 121 Avenue
Wilmington, NC 28412
Bluewater Structures, Inc. Unknown
Attention: Manager or Agent
614 Monroe Street
Carolina Beach, NC 28428
Internal Revenue Service Unknown
North Carolina Department Unknown
of Revenue
MIDDLE MOUNTAIN: Case Summary & Five Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Middle Mountain Properties LLC
P.O. Box 10940
Glendale, AZ 85318
Bankruptcy Case No.: 08-00133
Chapter 11 Petition Date: January 7, 2008
Court: District of Arizona (Phoenix)
Judge: Redfield T. Baum Sr.
Debtor's Counsel: Allan D. Newdelman, Esq.
Allan D. Newdelman PC
80 E. Columbus Avenue
Phoenix, AZ 85012
Tel: (602) 264-4550
Fax: (602) 277-0144
Total Assets: $6,120,000
Total Debts: $5,514,022
Debtor's Five Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Allen D. Jenkins & loan $500,000
Associates
5417 West ironwood Drive
Glendale, AZ 85302
I Tow Limited Partnershp trade debt $500,000
2155 West Williams Drive
Phoenix, AZ 85027
A Cal Wrecking Co. trade debt $250,000
c/o Peter Petersen
13443 North 20th Street
Phoenix, AZ 85022
Maricopa County Treasurer property taxes $14,022
Guaranty Title Agency claim unknown
MOVIE GALLERY: Wants Court Approval on Cure Procedures
------------------------------------------------------
Movie Gallery, Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Eastern District of Virginia to approve
procedures to permit the determination of cure amounts for leases
that the Debtors may ultimately assume.
The Cure Procedures will enable the Debtors to ascertain the cure
amounts and determine if a lease should be assumed, based in part
on the associated cure amounts, Kimberly A. Pierro, Esq., at
Kutak Rock, LLP, in Richmond, Virginia, says.
Moreover, the Cure Procedures ensure that in any related disputes
in advance of any potential assumption, the Debtors will be able
to (i) determine the leases that should be assumed pursuant to a
Reorganization Plan or otherwise, and (ii) calculate accurately
the leases' assumption costs.
Ms. Pierro contends that the Procedures will provide the Lessors
with additional time to calculate and assert their proposed
prepetition cure amounts. Through the Procedures, the Lessors
and the Debtors will also be given additional time to reconcile
and settle on the Leases' cure amounts.
The Cure Procedures are:
(1) The Debtors will file written notice with the Court, to be
served with the order approving the Cure Procedures, by
first class mail upon these parties-in-interest:
* each non-Debtor counterparty to each Lease;
* other appropriate parties-in-interest to the Lease; and
* the Core Group and the 2002 List.
(2) The Cure Notice will contain these information:
* the name and address of each Lessor and other
appropriate parties-in-interest, if any, to each Lease;
* the cure amount corresponding to each Lease calculated
by the Debtors;
* the telephone numbers and e-mail addresses for the
various individuals responsible for each Lease at the
Debtors' Asset Management Department; and
* the deadline for submitting Cure Statements in
accordance with the Cure Procedures.
(3) Any disputing party to the Cure Amounts will contact the
Debtors' Asset Management Department to discuss any
related discrepancies; and, at a minimum, the disputing
party will provide the store number for the disputed
Lease.
(4) The disputing party and the Debtors' Asset Management
Department must reach a resolution regarding the Cure
Amount on or before 5:00 p.m., prevailing Eastern Time, on
a date that is no less than 23 days after the date of
service of the Cure Notice. Otherwise, the disputing
party must file with the Court a cure Reconciliation
Statement within the Cure Statement Deadline, addressed
to:
* Movie Gallery, Inc., 900 West Main Street, Dothan,
Alabama 36301, attention to Jeffry B. Gordon; and
* Kirkland & Ellis LLP, 200 East Randolph Drive, Chicago,
Illinois 60601, attention to Anup Sathy, P.C. and Marc
Carmel.
(5) With respect to a Lease, each Cure Statement must, at a
minimum:
-- be made in writing;
-- include lessor's name and the store location for the
lease;
-- provide an alternate cure amount;
-- include a breakdown by store by category of all amounts
claimed, including,without limitation, amounts for
rent, real estate taxes, insurance and common area
maintenance; and
-- all relevant documentation supporting the alternate
cure amount.
(6) The Debtors may, in their sole discretion, resolve any
disputes related to the cure amounts by mutual agreement
with the disputing party and without further Court order.
(7) If the Debtors are not able to reach a resolution with the
disputing party, the Debtors may request a hearing before
the Court and provide the disputing party, the Core Group
and the 2002 List with a notice in no less than seven
days.
(8) Any entity that fails to timely file and serve a Cure
Statement will be forever barred, estopped and enjoined
from asserting, collecting or seeking any amounts on
account of the cure amounts in excess of the amounts in
the Cure Notice. Consequently, the Debtors will be
forever discharged from any and all indebtedness or
liability.
(9) Actions by any party-in-interest, including, without
limitation, the Debtors and the lessors, will not be
deemed as an assumption, adoption, rejection or
termination of any Lease or an acceptance that any Lease
is executory or unexpired.
The Debtors reserve their rights, in their sole discretion, to
reject or assume any Lease pursuant to Section 365(a) of the
Bankruptcy Code, Ms. Pierro notes.
The Procedures do not deem to alter in any way the prepetition
nature of the leases or the validity, priority or amount of any
claims of a lessor against the Debtors, Ms. Pierro emphasizes.
Moreover, the Procedures are neither deemed to create a
postpetition contract or agreement nor elevate any claims of a
lessor against the Debtors to administrative expense priority.
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment specialty
retailer. The company owns and operates 4,600 retail stores that
rent and sell DVDs, videocassettes and video games.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to
07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors.
Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak
Rock LLP, is the Debtors' local counsel. The Debtors' claims &
balloting agent is Kutzman Carson Consultants LLC. When the
Debtors' filed for protection from their creditors, they listed
total assets of $891,993,000 and total liabilities of
$1,419,215,000.
The Official Committee of Unsecured Creditors has selected Robert
J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq.,
and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as
its lead counsel, and Brian F. Kenney, Esq., at Miles &
Stockbridge PC, as its local counsel.
The Debtors' spokeswoman Meaghan Repko said that the company does
not expect to exit bankruptcy protection before the second quarter
of 2008. The Debtors' exclusive plan filing period expires on
Feb. 13, 2008. (Movie Gallery Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MOVIE GALLERY: Wants to Pursue Whitaker & Williams Litigations
--------------------------------------------------------------
Movie Gallery, Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Eastern District of Virginia to modify
the automatic stay imposed by Section 362(a) of the U.S.
Bankruptcy Code solely to the extent necessary to permit the
Debtors to pursue, obtain and enforce dismissal of two
litigations, and to determine attorneys' fees and costs asserted
against the plaintiffs for damages incurred during the
proceedings.
(1) The Whitaker RICO Litigation
Three Plaintiffs commenced an action against the Debtors in the
United States District Court for the Middle District of Georgia,
Albany Division, in July 2005. The Action, styled as Russell
Whitaker, et al., v. MGA, Inc., at al., was commenced by the
Whitaker Plaintiffs composed of:
(a) Russell Whitaker, doing business as C&B Video's;
(b) C.R. Gregory, formally doing business as Tiffany's Movies;
and
(c) Robert Knighton, formally doing business as C.J.'s Video
Plus.
In December 2005, the District Court dismissed the Whitaker RICO
Litigation requested by Debtor-affiliate Movie Gallery US, LLC.
The Order was affirmed by the United States Court of Appeals for
the Eleventh Circuit in March 2007.
Pursuant to Rule 38 of the Federal Rules of Appellate Procedure,
the Debtors also filed a claim for damages and costs incurred
during the litigation, which the Eleventh Circuit granted in
part.
As of the date of bankruptcy, the attorneys' fees and costs for
damages asserted by the Debtors was still pending in the District
Court. The automatic stay arising pursuant to Section 362 of the
Bankruptcy Code has stayed the Litigation.
(2) The Williams RICO Litigation
Michael Williams and Marco Williams, doing business as First
Choice Video, commenced a civil action against the Debtors on
March 14, 2007, in the United States District Court for the
Middle District of Alabama, Southern Division, styled as Michael
Williams, et al., v. MGA, Inc., et al., Case Number 1:07-CV-228-
MEF.
In April and May 2007, the Debtor filed with the District Court a
request to dismiss the Williams RICO Litigation, and a motion for
sanctions.
As of the bankruptcy filing, the Debtors' dismissal and sanctions
requests were pending in the District Court. The Litigation has
been stayed pursuant to Section 362 of the Bankruptcy Code.
The District Court entered an Order to show cause on Nov. 27,
2007. The Order provides that any party "has the right to
petition to reinstate [the] Action to pursue any claim . . . not
adjudicated in or discharged by proceedings in the bankruptcy
court."
Modification of Stay is Necessary
Michael E. Condyles, Esq., at Kutak Rock, LLP, in Richmond,
Virginia, notes that pursuant to Section 362(d)(1) of the
Bankruptcy Code, relevant factors weigh heavily in favor of
modifying the automatic stay to permit the Debtors to proceed
with the Litigations and collect attorneys' fees and costs
against the Plaintiffs.
Continuing the Litigations, Mr. Condyles says, will neither
interfere with the Debtors' Chapter 11 cases nor prejudice the
rights of the Debtors' other creditors.
The modification of the stay is necessary only to permit the
pursuit, and to obtain and enforce the pending determination of
attorneys' fees and costs against the Plaintiffs, Mr. Condyles
assures the Court.
Accordingly, the request allows the Debtors to proceed with
efforts to augment the Debtors' estates with amounts recovered
through the claims, and deter the Plaintiffs from pursuing
further "frivolous litigation" against the Debtors.
"While the Debtors' request presents a rare instance in which the
Debtors themselves are seeking relief from the automatic stay to
proceed with the prepetition litigation pending against them . .
. the interests of the Debtors and the purpose for the request
are aligned," Mr. Condyles asserts.
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment specialty
retailer. The company owns and operates 4,600 retail stores that
rent and sell DVDs, videocassettes and video games.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to
07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors.
Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak
Rock LLP, is the Debtors' local counsel. The Debtors' claims &
balloting agent is Kutzman Carson Consultants LLC. When the
Debtors' filed for protection from their creditors, they listed
total assets of $891,993,000 and total liabilities of
$1,419,215,000.
The Official Committee of Unsecured Creditors has selected Robert
J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq.,
and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as
its lead counsel, and Brian F. Kenney, Esq., at Miles &
Stockbridge PC, as its local counsel.
The Debtors' spokeswoman Meaghan Repko said that the company does
not expect to exit bankruptcy protection before the second quarter
of 2008. The Debtors' exclusive plan filing period expires on
Feb. 13, 2008. (Movie Gallery Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MOVIE GALLERY: Wants to Reject Boards Inc. License Agreement
------------------------------------------------------------
Movie Gallery, Inc. and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the Eastern District of Virginia to
reject the license agreement and product & support agreement with
Boards Predecessor. The Debtors also ask the Court to require
Boards to cease using the Debtors' licensed marks upon the
effectiveness of the rejection.
Prior to the Debtors' acquisition of Hollywood Entertainment
Corporation, Hollywood entered into a license agreement in
January 2001, with Boards Predecessor.
Mark J. Wattles, Hollywood's former chief executive officer, is
the owner of Boards Predecessor.
The License Agreement provided that:
(i) Boards Predecessor reserves a non-exclusive license to use
Hollywood names, trademarks and likenesses in connection
with 20 video stores it owned; and
(ii) upon change in control scenarios, Boards Predecessor has
the right to require Hollywood or its successor-in-
interest, to purchase Boards' 20 stores within six months
at a price to be determined pursuant to valuation
procedures -- the Put Right.
Hollywood also entered into a product and support agreement with
Boards Predecessor and agreed to supply Boards' stores with
products and operational support services, including, but not
limited to, revenue sharing, accounting, promotions, store
software and credit card collection.
Boards Predecessor operated the stores under the Agreements from
July 2002 to January 2003, and assigned its interests to Boards,
Inc. Subsequently, Movie Gallery acquired Hollywood in April
2005. Boards Predecessor notified the Debtors of its election to
exercise the Put Right based on the Debtors' acquisition of
Hollywood.
Kimberly A. Pierro, Esq., at Kutak Rock LLP, in Richmond,
Virginia, disclosed that despite the Debtors' good faith
negotiations, the Debtors and Boards Predecessor have not agreed
on a purchase price for Boards' stores.
In March 2007, Boards Predecessor made a demand for arbitration
regarding the Put Right, which remains outstanding, subject to
the automatic stay.
Ms. Pierro informed the Court that the Debtors have determined
that they no longer wish to remain in a business relationship
with Boards Predecessor.
The Debtors believe that the Agreements are highly favorable to
Boards Predecessor, and Hollywood does not receive fair
compensation for the benefits it provides to Boards.
Ms. Pierro noted that the Debtors are in the process of reducing
their overall number of store locations and have no desire to
purchase Boards' stores.
The Debtors are concerned that Boards' continued operation of the
stores may diminish the integrity of the licensed marks, Ms.
Pierro explains. By rejecting the Agreements, the Debtors will
be able to reclaim the licensed marks and focus on operating
their business. Moreover, the Debtors want to discontinue the
time consuming and costly arbitration commenced by Boards, she
added.
Boards Video Company Reacts
Boards Video Company, LLC argues that notwithstanding the "Put
Option" which requires the Debtors to purchase Boards' stores,
the Boards Contracts are profit centers for the Debtors' estates.
Dylan G. Trache, Esq., at Wiley Rein LLP in McLean, Virginia,
discloses that Boards has made a yearly royalties payment of not
less than $600,000 to Hollywood pursuant to the License
Agreement. The Contracts were entered into by the parties to
prevent the complete loss of new store locations that Hollywood
was not able to acquire for itself due to financial constraints.
Thus, contrary to the Debtors' assertion, their transactions with
Boards do not burden their estates, Mr. Trache says.
Moreover, Boards would have a substantial rejection claim of not
less than $30,000,000 against the Debtors in the event of an
allowed rejection of the Contracts, which will affect the
Debtors' unsecured creditors, he says.
According to Mr. Trache, Boards had said it is "willing to waive
the Put Option in the event the Debtors ultimately assume the
Boards Contracts."
The Debtors have not proved that Boards somehow misused or
tarnished the Hollywood marks, Mr. Trache contends. In fact,
maintaining the marks is essential to Boards' interests as it is
to the Debtors' businessm, he adds.
Boards also questions whether the Debtors' proposed rejection is
in good faith, considering that:
-- Mark Wattles, Hollywood's founder and former CEO and
current owner of Boards, is a potential investor in
connection with a possible competing Reorganization Plan;
-- the rejection of Contracts will cause Boards to:
(a) lose the goodwill associated with the Hollywood marks;
(b) incur substantial re-branding expenses to continue
operations;
(c) require Boards to enter into individual agreements with
major movie studios in order to acquire product; and
(d) purchase new information technology and computer
systems.
In light of the consequences of a rejection of the Boards
Contracts, Boards requires discovery on issues core to the
central question of the Debtors' business judgment, Mr. Trache
tells the Court. In addition, Mr. Trache continues, the Debtors'
request to require Boards to cease use of the Hollywood marks
upon the rejection of the Contracts must be sought in the context
of an adversary proceeding, by which the Debtors should be
required to re-file any request for equitable or injunctive
relief.
Against this backdrop, Boards asks the Court to (i) sustain its
objection and deny the Debtors' request or alternatively,
continue the hearing and establish a discovery schedule; and (ii)
require the Debtors to re-file any request for equitable or
injunctive relief as an adversary proceeding.
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment specialty
retailer. The company owns and operates 4,600 retail stores that
rent and sell DVDs, videocassettes and video games.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to
07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors.
Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak
Rock LLP, is the Debtors' local counsel. The Debtors' claims &
balloting agent is Kutzman Carson Consultants LLC. When the
Debtors' filed for protection from their creditors, they listed
total assets of $891,993,000 and total liabilities of
$1,419,215,000.
The Official Committee of Unsecured Creditors has selected Robert
J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq.,
and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as
its lead counsel, and Brian F. Kenney, Esq., at Miles &
Stockbridge PC, as its local counsel.
The Debtors' spokeswoman Meaghan Repko said that the company does
not expect to exit bankruptcy protection before the second quarter
of 2008. The Debtors' exclusive plan filing period expires on
Feb. 13, 2008. (Movie Gallery Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
N-STAR REAL: Fitch Holds Low-B Ratings on Two Note Classes
----------------------------------------------------------
Fitch has affirmed all classes of notes issued by N-Star Real
Estate CDO IX, Ltd. as:
-- $512,000,000 class A-1 floating rate notes at 'AAA';
-- $96,000,000 class A-2 floating rate notes at 'AAA';
-- $48,000,000 class A-3 floating rate notes at 'AAA';
-- $37,280,000 class B floating rate notes at 'AA';
-- $12,800,000 class C deferrable fixed rate notes at 'A+';
-- $23,200,000 class D deferrable floating rate notes at 'A';
-- $4,800,000 class E deferrable floating rate notes at 'A-';
-- $3,600,000 class F deferrable floating rate notes at
'BBB+';
-- $14,080,000 class G deferrable floating rate notes at
'BBB';
-- $7,200,000 class H deferrable floating rate notes at
'BBB-';
-- $7,040,000 class J deferrable fixed rate notes at 'BB+';
-- $6,000,000 class K deferrable fixed rate notes at 'BB'.
N-Star IX is a revolving commercial real estate collateralized
debt obligation which closed Feb. 28, 2007, and is supported by
collateral selected by NS Advisors, LLC an indirect wholly owned
subsidiary of NorthStar Realty Finance Corp. (NorthStar, rated
'CAM2' as collateral asset manager by Fitch). The CDO went
effective Nov. 26, 2007.
The transaction has a five-year reinvestment period, during which
the collateral manager has the ability to sell any asset, as long
as the aggregate amount of assets sold during a given year does
not exceed 10% of the collateral balance at the beginning of that
year. Principal proceeds not reinvested will be used to pay down
the notes pro rata, provided the current portfolio balance remains
at least 50% of the original portfolio balance, no
overcollateralization test is failing as of that payment date and,
if an OC test has previously failed for two or more dates, the OC
ratio is at least equal to or greater than the ratio on the
effective date. The portfolio is currently composed of commercial
mortgage-backed securities (CMBS: 67.8%), real estate investment
trust debt securities (REIT: 13.8%), CRE CDOs (8.8%), commercial
real estate debt (7.5%), and credit tenant lease loans (CTLs:
2.1%). N-Star IX will end its reinvestment period in June 2012.
The affirmations are the result of stable portfolio performance
measures, such as coverage test ratios and weighted average rating
factor. As of the effective date, all six overcollateralization
and interest coverage ratios have remained stable and above their
covenants. The current WARF on the collateral is 8 ('BBB-
'/'BB+'), which is below the maximum Fitch WARF covenant of 10
('BBB-'/'BB+'). There have been no defaulted or distressed
securities in the portfolio, to date.
It should be noted that the CDO includes a REIT TRUPS CDO that
Fitch downgraded six notches from its initial rating, as well as
three CDOs that Fitch includes in its First Loss CDO universe. Of
these three CDOs, Fitch placed 14 classes of Ansonia 2006-1A on
Rating Watch Negative. Upgrades during the reinvestment period
are unlikely given the pool could still migrate to the maximum
weighted average rating factor covenant.
NASDAQ STOCK: S&P Upgrades Counterparty Credit Rating
-----------------------------------------------------
Standard & Poor's Ratings Services raised its long-term
counterparty credit rating on The Nasdaq Stock Market Inc. to
'BBB-' from 'BB'. The rating is removed from CreditWatch Positive
where it was placed on Sept. 20, 2007. The outlook is stable.
S&P also assigned its 'BBB-' bank loan rating to the proposed
$1.5 billion senior secured Term Loan A and $75 million senior
secured revolving credit facility. The senior secured Term Loan A
and revolving credit facility are protected by guarantees from
certain domestic subsidiaries of Nasdaq and first-priority
security interest in all of the stock and assets of Nasdaq and its
domestic subsidiaries, plus 65% of the stock of foreign
subsidiaries.
In addition, S&P assigned its 'BB+' debt rating to Nasdaq's
proposed $625 million senior unsecured notes. These senior
unsecured notes have the same guarantees, but do not have any
security interests, as Term Loan A and the revolving credit
facility. For this reason, the rating on the senior unsecured
notes is one notch lower than the counterparty credit rating.
Proceeds from the senior secured Term Loan A and senior unsecured
notes will be used to partially finance the acquisitions of
Stockholm-based OMX AB (which, in turn, is acquiring Nord Pool
ASA), the Philadelphia Stock Exchange, and the Boston Stock
Exchange. Nasdaq will use unrestricted cash on the balance sheet
and issue common stock to Borse Dubai to complete the acquisition
financing. Borse Dubai's 20% economic interest (5% voting stake)
in the combined group has no bearing on the ratings at this time.
"The upgrade of Nasdaq, which will be renamed The NASDAQ OMX
Group, Inc., is based on the potential transformation of Nasdaq's
franchise upon completion of the OMX, Phlx, and BSE acquisitions,
partially offset by potential integration risks and a moderately
large amount of debt financing," said Standard & Poor's credit
analyst Charles D. Rauch. Nasdaq will use cash and issue common
stock to complete the acquisition financing.
Upon completion of the three acquisitions, Nasdaq will transform
to an international cash and derivatives exchange and technology
provider from strictly being a domestic stock exchange. OMX
brings its Nordic and Baltic cash equities and options exchanges,
as well as its global technology group. Phlx is the third-largest
stock option exchange in the U.S. with a 15% market share. BSE
brings its dormant stock exchange and stock clearing licenses.
The combined group will have a revenue mix that is more
diversified by geography and product mix than historical Nasdaq.
S&P projects the combined group will generate strong earnings and
sufficient cash flows to service its debt obligations. Initial
debt-to-EBITDA coverage and EBITDA interest coverage will be in
line with similarly rated corporations.
While both Nasdaq and OMX have good track records in mergers and
acquisitions, this four-way combination introduces unique
integration risks, along with synergistic opportunities. The OMX
acquisition is a trans-Atlantic deal, in which there are cultural
differences that need to be melded. The toughest job, but the one
offering the best long-term operating efficiencies and strategic
advantages, is consolidation of the global technology and
infrastructure.
Goodwill generated from these acquisitions will result in negative
tangible equity at the consolidated entity. While S&P's credit
analysis for exchanges focuses more on cash-flow generation than
on balance-sheet leverage, S&P expects regulated operating
subsidiaries with clearing operations to maintain sufficient
capital to cover unexpected losses arising from member default.
The stable outlook considers the forthcoming acquisitions of OMX
(including Nord Pool), Phlx, and BSE, that should translate into
less volatile and better-quality revenues and stronger earnings
power over the long term.
Ratings are currently constrained by Nasdaq's moderately heavy
debt load and, secondarily, its negative tangible capital. If
Nasdaq successfully integrates the three acquisitions and
generates strong cash flows so it can quickly pay down debt, there
is upside rating potential. Alternatively, ratings could be
vulnerable if Nasdaq fails to achieve anticipated merger
synergies or issues even more debt in pursuit of yet another
acquisition.
NATIONAL CITY: Moody's Puts B- Financial Strength Rating on Review
------------------------------------------------------------------
Moody's Investors Service placed the ratings of National City
Corporation under review for possible downgrade. More
specifically, the long-term ratings of NCC (senior at A2) and the
Prime-1 short-term rating of National City Credit Corporation,
guaranteed by NCC, were placed under review for possible
downgrade. In addition, Moody's placed National City Bank's B-
financial strength rating and its A1 rating for long-term deposits
under review for possible downgrade. Moody's affirmed the bank's
Prime-1 short-term rating.
Moody's said that the review will focus on the level of loan-loss
provisions NCC may need to take in 2008 and 2009 against its
sizable exposure to the residential mortgage market and its
commercial-real-estate exposure especially against its
residential-development portfolios. "National City has a large
second-lien-home-equity exposure and a sizable exposure to
residential development and land loans," said Moody's Senior Vice
President, Sean Jones. "Recent market trends are suggesting the
severity of loss in components of these portfolios could be higher
than what we thought just two months ago", said Mr. Jones.
The potential incremental provisions could offset the positive
capital initiatives that NCC is implementing, said Moody's.
Moody's stated that National City's capital initiatives include
cutting its dividend by one-half to approximately $120 million a
quarter. It also recently announced its intention to raise hybrid
capital in the first quarter 2008. The review will also focus on
the amount of capital NCC can generate in comparison to the
potential rise in credit costs.
National City's retail and commercial bank located in the mid-west
continue to support its ratings, stated Moody's. The platform
provides $54 billion of low-cost deposits supporting both the
bank's liquidity and the bank's earnings diversity. Moody's
added that although National City's business is skewed towards the
more troubled economies of Michigan and Ohio, the direct bank
generates a vital source of core earnings that will help National
City absorb potential losses in its problematic portfolios.
Reviews for Possible Downgrade
Issuer: First of America Capital Trust I
-- Preferred Stock Preferred Stock, Placed on Review for
Possible Downgrade, currently A3
Issuer: Merchants National Corp
-- Senior Unsecured Medium-Term Note Program, Placed on
Review for Possible Downgrade, currently A2
Issuer: National City Bank
-- Bank Financial Strength Rating, Placed on Review for
Possible Downgrade, currently B-
-- Issuer Rating, Placed on Review for Possible Downgrade,
currently A1
-- OSO Senior Unsecured OSO Rating, Placed on Review for
Possible Downgrade, currently A1
-- Multiple Seniority Bank Note Program, Placed on Review for
Possible Downgrade, currently A2
-- Subordinate Regular Bond/Debenture, Placed on Review for
Possible Downgrade, currently A2
-- Senior Unsecured Deposit Program, Placed on Review for
Possible Downgrade, currently A1
-- Senior Unsecured Regular Bond/Debenture, Placed on Review
for Possible Downgrade, currently A1
-- Senior Unsecured Deposit Rating, Placed on Review for
Possible Downgrade, currently A1
Issuer: National City Bank of Kentucky
-- Subordinate Regular Bond/Debenture, Placed on Review for
Possible Downgrade, currently A2
Issuer: National City Bank of Pennsylvania
-- Subordinate Regular Bond/Debenture, Placed on Review for
Possible Downgrade, currently A2
Issuer: National City Bank, Indiana
-- Subordinate Regular Bond/Debenture, Placed on Review for
Possible Downgrade, currently A2
-- Senior Unsecured Regular Bond/Debenture, Placed on Review
for Possible Downgrade, currently A1
Issuer: National City Capital Trust I
-- Preferred Stock Preferred Stock, Placed on Review for
Possible Downgrade, currently A3
Issuer: National City Capital Trust II
-- Preferred Stock Preferred Stock, Placed on Review for
Possible Downgrade, currently A3
-- Preferred Stock Shelf, Placed on Review for Possible
Downgrade, currently (P)Baa1
Issuer: National City Capital Trust III
-- Preferred Stock Preferred Stock, Placed on Review for
Possible Downgrade, currently A3
-- Preferred Stock Shelf, Placed on Review for Possible
Downgrade, currently (P)Baa1
Issuer: National City Capital Trust IV
-- Preferred Stock Preferred Stock, Placed on Review for
Possible Downgrade, currently A3
-- Preferred Stock Shelf, Placed on Review for Possible
Downgrade, currently (P)Baa1
Issuer: National City Corporation
-- Junior Subordinated Shelf, Placed on Review for Possible
Downgrade, currently (P)A3
-- Multiple Seniority Shelf, Placed on Review for Possible
Downgrade, currently (P)Baa1
-- Preferred Stock Preferred Stock, Placed on Review for
Possible Downgrade, currently Baa1
-- Subordinate Regular Bond/Debenture, Placed on Review for
Possible Downgrade, currently A3
-- Senior Unsecured Regular Bond/Debenture, Placed on Review
for Possible Downgrade, currently A2
Issuer: National City Credit Corporation
-- Commercial Paper, Placed on Review for Possible Downgrade,
currently P-1
Issuer: PFGI Capital Corporation
-- Preferred Stock Preferred Stock, Placed on Review for
Possible Downgrade, currently Baa1
Issuer: Provident Bank
-- Subordinate Regular Bond/Debenture, Placed on Review for
Possible Downgrade, currently A2
Issuer: Provident Capital Trust I
-- Preferred Stock Preferred Stock, Placed on Review for
Possible Downgrade, currently A3
Issuer: Provident Capital Trust III
-- Preferred Stock Shelf, Placed on Review for Possible
Downgrade, currently (P)A3
Issuer: Provident Financial Group, Inc.
-- Senior Unsecured Regular Bond/Debenture, Placed on Review
for Possible Downgrade, currently A2
Outlook Actions
Issuer: First of America Capital Trust I
-- Outlook, Changed To Rating Under Review From Negative
Issuer: Merchants National Corp
-- Outlook, Changed To Rating Under Review From Negative
Issuer: National City Bank
-- Outlook, Changed To Rating Under Review From Negative
Issuer: National City Bank of Kentucky
-- Outlook, Changed To Rating Under Review From Negative
Issuer: National City Bank of Pennsylvania
-- Outlook, Changed To Rating Under Review From Negative
Issuer: National City Bank, Indiana
-- Outlook, Changed To Rating Under Review From Negative
Issuer: National City Capital Trust I
-- Outlook, Changed To Rating Under Review From Negative
Issuer: National City Capital Trust II
-- Outlook, Changed To Rating Under Review From Negative
Issuer: National City Capital Trust III
-- Outlook, Changed To Rating Under Review From Negative
Issuer: National City Capital Trust IV
-- Outlook, Changed To Rating Under Review From Negative
Issuer: National City Corporation
-- Outlook, Changed To Rating Under Review From Negative
Issuer: National City Credit Corporation
-- Outlook, Changed To Rating Under Review From Negative
Issuer: PFGI Capital Corporation
-- Outlook, Changed To Rating Under Review From Negative
Issuer: Provident Bank
-- Outlook, Changed To Rating Under Review From Negative
Issuer: Provident Capital Trust I
-- Outlook, Changed To Rating Under Review From Negative
Issuer: Provident Capital Trust III
-- Outlook, Changed To Rating Under Review From Negative
Issuer: Provident Financial Group, Inc.
-- Outlook, Changed To Rating Under Review From Negative
National City Corporation is headquartered in Cleveland, and as of
Sept. 30, 2007 its reported assets were $154 billion.
NATIONWIDE HEALTH: Earns $57.7 Million in 2007 Third Quarter
------------------------------------------------------------
Nationwide Health Properties Inc. reported net income of
$57.7 million on revenues of $87.0 million in the third quarter
ended Sept. 30, 2007, compared with net income of $31.7 million on
revenues of $67.8 million in the same period in 2006.
"The third quarter was a good one for NHP with revenues up 28% and
normalized FFO per share up 8%," commented Douglas M. Pasquale,
NHP's president and chief executive officer. "During the quarter
we closed $150.0 million of accretive investments, bringing our
total for 2007 to $685.0 million. With over $300.0 million of
investments expected to close in the fourth quarter, 2007 should
make for another $1 billion investment year," Mr. Pasquale added.
Triple-net lease rental income increased $15.7 million, or 26%, in
2007 as compared to 2006. The increase was primarily due to
rental income from 74 facilities acquired in 2007, 30 facilities
acquired during the last six months of 2006 and rent increases at
existing facilities. The company also recognized $1.1 million of
triple-net lease rental income related to a non-recurring
settlement of delinquent tenant obligations.
Operating rent was generated by the company's non triple-net
leased medical office buildings and increased $1.1 million, or
44%, in 2007 as compared to 2006. The increase was primarily due
to five facilities acquired during 2007 and increased expense
reimbursement revenues.
Income from continuing operations includes gain on sale of
facilities to the company's unconsolidated joint venture of
$29.3 million for the three months ended Sept. 30, 2007. No gain
on sale of facilities to was recognized in 2006.
Discontinued operations income decreased $14.2 million to a loss
of $10,000 during the three months ended Sept. 30, 2007, as
compared to 2006. Discontinued operations income of $14.2 million
for the three months ended Sept. 30, 2006, was comprised of gains
on sale of $8.7 million and rental income of $7.1 million,
partially offset by depreciation of $1.6 million and general and
administrative expenses of $9,000.
At Sept. 30, 2007, the company had $484.0 million available under
its $700.0 million revolving senior unsecured credit facility
compared to $561.0 million at Dec. 31, 2006. The Credit Facility
expires on Dec. 15, 2010.
Balance Sheet
At Sept. 30, 2007, the company's consolidated balance sheet showed
$2.99 billion in total assets, $1.51 billion in total liabilities,
$2.2 million in minority interest, and $1.48 billion in total
stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2007, are available for
free at http://researcharchives.com/t/s?26e5
About Nationwide Health
Headquartered in Newport Beach, California, Nationwide Health
Properties Inc. -- http://www.nhp-reit.com/-- is a real estate
investment trust that invests in senior housing and long-term care
facilities and medical office buildings. The company has
investments in 547 facilities in 43 states.
* * *
Moody's Investors Service placed Nationwide Health Properties
Inc.'s cumulative preferred and non-cumulative preferred ratings
at 'Ba1' in July 2001. The ratings still hold to date.
NATUROPATHIC LABORATORIES: Voluntary Chapter 11 Case Summary
------------------------------------------------------------
Debtor: Naturopathic Laboratories International Inc.
75 Rockefeller Plaza, 16th Floor
New York, NY 10019
Bankruptcy Case No.: 08-10022
Type of Business: The Debtor manufactures pain reliever for
arthritis.
Chapter 11 Petition Date: January 4, 2008
Court: Southern District of New York (Manhattan)
Judge: Robert D. Drain
Debtor's Counsel: Erica R. Feynman, Esq.
Rattet, Pasternak & Gordon Oliver, LLP
550 Mamaroneck Avenue
Harrison, NY 10528
Tel: (914) 381-7400
Fax: (914) 381-7406
http://www.rattetlaw.com/
Estimated Assets: $100,000 to $1 million
Estimated Debts: $1 million to $100 million
The Debtor did not file a list of its 20 largest unsecured
creditors.
NORTH PARK: Wants to Use Bank Midwest's Cash Collateral
-------------------------------------------------------
North Park Village, LLC asks authority from the U.S. Bankruptcy
Court for the District of Arizona to use the cash collateral of
Bank Midwest N.A. and Scripps Investments & Loans Inc.
The Debtor seeks to withdraw funds held in its excess cash flow
account at Bank Midwest. Currently, the account holds $611,826,
consisting of excess income generated from the Debtor's real
properties since May 2006. Bank Midwest claims a first security
interest and lien in such funds.
The Debtor tells the Court that it needs to use those funds that
constitute cash collateral on a periodic basis to pay for
operation and construction costs.
Scripps Investments, the Debtor relates, may claim a second
security interest and lien in such funds. Additionally, Scripps
and Bank Midwest is also adequately protected with a substantial
equity cushion in the Debtor's real property as well as an
interest reserve account it is holding on behalf of the Debtor, in
the sum of $419,740. The amount $419,740 covers interest payments
on the loan with Bank Midwest through June 2008. The Debtor is
current with its payments to Bank Midwest.
The Debtor also wants to compel Bank Midwest to disburse
construction loan draws in accordance with the construction loan
agreement executed between it and the Debtor. Currently, the
Debtor has provided Bank Midwest with outstanding construction
draw requests totaling approximately $165,024 to pay contractors
for work performed on the Debtor's real property.
Currently, Bank Midwest and Scripps are refusing to permit funding
of the draw requests, the Debtor says. The amount held by Bank
Midwest in the Construction Loan account to be disbursed totals
$2,388,742. To date, Bank Midwest has disbursed $2,675,788.
Again, the Debtor tells the Court, Bank Midwest is more than
adequately protected by the equity in the Debtor's real property
and the amounts being held in the interest reserve.
Moreover, the Debtor also seek the release of $196,385 that
Scripps improperly placed into either the construction loan
account or some other account it is holding on behalf of the
Debtor. These proceeds were to be credited and paid to the Debtor
when it purchased its real property back in May of 2006. The
funds represented pre-closing real property taxes, pro-rata rents,
prepaid rents, and tenant security deposits.
The Debtor relates that it has been continually requesting that
Scripps pay the amount, but to no avail. The Debtor had to use
its income from operations to pay the taxes and security deposits
causing the Debtor to go into default under its loans.
Based in Phoenix, Arizona, North Park Village LLC owns and manages
apartments. The company filed for Chapter 11 protection on
Dec. 7, 2007 (Bankr. D. Ariz. Case No. 07-06618). Mark W. Roth,
Esq., at Hebert Schenk, P.C., represents the Debtor in its
restructuring efforts. The Debtor, in its schedules of assets and
liabilities, reported total assets of $51,551,757, and total
liabilities of $29,338,901.
ORANGE REGIONAL: Moody's Holds Ba1 Rating on $260 Million Bonds
---------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Orange Regional
Medical Center's $260 million of Series 2008 bonds to be issued by
the Dormitory Authority of the State of New York. The rating
outlook is stable. All outstanding debt issued on behalf of ORMC
(formerly known as Arden Hill Hospital and the Horton Medical
Center) through the Orange County Industrial Development Agency,
New York, which carried underlying Baa1 ratings, will be refunded
with the proceeds of this offering.
Use of proceeds: Proceeds from the 2008 bonds, along with other
funds, will refinance all of ORMC's existing bonds and fund the
construction of a 374 bed replacement hospital on a new campus.
Legal security: The bonds are secured by a pledge of Gross
Receipts of the Orange Regional Medical Center and a pledge of
first mortgage on the new campus. While not obligated the Orange
Regional Medical Center Foundation covenants to turnover to ORMC
all pledged funds for the new hospital. The Series 2008 bonds
will carry a fully funded debt service reserve fund and a days
cash on hand test (60 days).
Interest rate derivatives: ORMC has a floating-to-fixed rate swap
in the notional amount of $24.46 million. ORMC pays a fixed rate
of 4.54%. The counterparty is UBS. The swap will be terminated
with the proposed Series 2008 bonds.
Strengths
* Leading and stable market share of 37% of Orange County (63%
in PSA), compared to 23% for the number two provider.
* Historically good volume growth, with inpatient admissions
exceeding 5% growth in FY 2006, though inpatient volumes in
FY 2007 are showing some softening.
* Increasing case mix index, from 1.18 in 2002 to 1.31 in 2006,
reflecting the strategy to pursue higher acuity clinical
services.
* Reasonably strong demographics, reflecting increasing
population, regional development, high income levels and low
unemployment.
* Very recent negotiations with a number of third party payers
have resulted in substantial multi-year increases to rates
under new agreements that should begin to translate into
measurable additional revenue in 2008.
* Award of New York State Healthcare Efficiency and
Affordability Law Grant monies totaling $48.6 million
for both the cost of construction and defeasance of prior
debt demonstrates strong community and state support.
* Success in extending the term for Medicare reclassification
to the New York City MSA for wage index reimbursement to
Sept. 30, 2010, yielding $11 million of annual net revenue.
By Sept. 30, 2010, ORMC will have benefited from twelve
consecutive years of re-classification.
Challenges
* Variability in operating performance with the interim period
of FY 2007 representing the second year of an operating
decline, though full year will likely better 2006 results
when the benefit of recent third party rate increases.
* Elevated leverage after the upcoming financing with a high
(unfavorable) 15.6 times debt-to-cashflow and a thin 1.0
times peak debt service coverage.
* Replacement hospital project heightens credit risk through
increased debt, construction and the uncertainty of patient
referral patterns to a new site, although management expects
the new site to strengthen referral patterns and inpatient
volumes.
* Competition from a large, 130-member physician group for
outpatient services, notwithstanding recent overtures to
collaborate.
Market Position/Competitive Strategy: Fundamantals Remain Solid
ORMC continues to maintain its market share lead capturing a
distinctly leading 62% market share of its primary market and a
37% share of its total service area consisting of most of Orange
County. The number two provider (St. Luke's-Cornwall) has
actually lost share, capturing a distant 23% market share of the
greater market while the three Bon Secours Health System hospitals
have increased their share to a 14% capture. ORMC also faces
competition from several multi-specialty physician groups, the
largest of which is Crystal Run with 130 physicians. Relations
between Crystal Run physicians and management had been fractured
with Crystal Run posing the most significant outpatient
competition to ORMC. Management, including a relatively new CEO,
is focused on collaborative ventures with these physicians to
restore relations. As evidence of improving relations, Crystal
Run has recently committed $1 million to the replacement hospital
capital campaign fund.
ORMC's replacement hospital will be the first new hospital in New
York State in over 20 years. The new hospital will house 374 beds
on 61 acres in the Town of Wallkill. The new site is located
between the two current campuses at the intersection of the two
main bypasses through Orange County. The replacement hospital
addresses several key challenges currently facing ORMC including
the need to improve accessibility to services, the inability of
the two legacy facilities to accommodate upgraded technologies and
inefficiencies in clinical delivery due to duplicative functions.
The nearest competitor facility to the new hospital campus is
located at a distance of more then 15 miles. With a 36 month time
line to completion the hospital is slated to open in early 2011.
The relocation of all services to one campus should support the
establishment of more tertiary services and bring significant
savings and efficiency to the system's operations. However,
Moody's retains concerns that the project heightens risk through
increased debt, construction and the uncertainty of patient
referral patterns to a new site, although management expects the
replacement hospital to strengthen referrals due to the improved
location, more efficient operations, and state of the art
facility.
In the meanwhile, management continues to work hard to replace and
add new physicians in higher end specialties, including invasive
cardiology (opened first diagnostic catheterization lab in 2004;
planning to initiate emergency angioplasty in 1st Quarter 2008),
neonatology, spine & joint, bariatric surgery, GYN-oncology and
diagnostics. Management retains an ultimate goal of offering a
full-service cardiac program within 5 years.
ORMC's success has been reflected in an increase in its Medicare
Case Mix Index from 1.18 in 2002 to 1.31 in 2006. Volume trends
over the last two and a half years are generally indicative of the
dynamic growth of the service area. Total admissions for the
system increased nearly 4% in 2004 and over 5.54% in 2006 but
declined in 2005 and through the eight months of fiscal year 2007.
The system has established a clinical and operational affiliation
with Catskill Regional Medical Center for referrals but success
is by no means assured. ORMC and CRMC will continue to operate
independently. In addition, ORMC has recently executed a clinical
transfer agreement with Ellenville Regional Hospital (located in
southern Ulster County) for referrals.
The demographics of the service area remain good and Moody's
believes that ORMC remains the best positioned provider in this
market to capture the more profitable higher end services. Average
household income is above the state and U.S. average. Located
approximately 65 miles north of New York City, the area has been
enjoying growth from people relocating from New York City
(approximately 24% growth projected from 2000 -2012). Orange
County is the fastest growing county in the State.
Operating Performance: Historic Performance Has Been Variable;
New Contracts Anticipated to Enhance Patient Revenue
Operating performance declined in FY 2006 and appears to be weaker
in 2007 (based on 8 month interim financials though full year 2007
financial performance should be stronger than 2006 with the
benefit of recently negotiated third party contracts, some of
which took effect in the last quarter of CY 2007). This weaker
performance follows two relatively stable years of performance in
which operating cashflow exceeded $17 million (FY's 2004 and
2005). The 2006 decline is attributable to a number of challenges
including rapidly increasing expenses (11.8% over FY 2005)
highlighted by a 7.2% increase in salary and benefits, a 15%
increase in bad debt, competition for outpatient volumes and
historic third party contracts that were below market. Similar
challenges tempered performance through 8 months of FY 2007
including modest revenue growth due to a decline in inpatient
volumes.
ORMC generated an operating margin of just 0.2% in FY2006,
compared with 0.9% in FY2005. Operating cash flow declined from
over $17 million in FY 2005 (6.9%) to $15.5 million in FY 2006
(5.6%), with FY 2007 year to date operating cashflow 21% below the
comparable period of FY 2006. ORMC is reporting under $10 million
of operating cashflow through 8 months of FY 2007 as compared with
$12.4 million the same period of the prior year; however with
recently negotiated third party rate increases FY 2007 operations
are projected to better FY 2006 levels. Operating margin is
projected to improve to 0.5% in FY 2007. Pro-forma debt coverage
measures, based on projected FY 2007 performance, will be at their
lowest for the forecast period at just over 1.0 times maximum
annual debt service coverage, assuming MADS of $18.3 million, and
over 15 times debt-to-cash flow.
ORMC has a history of inconsistent performance and the current
year continues that trend. It is anticipated that recently
negotiated contracts with third party payers will produce
substantially increased revenue for inpatient clinical services.
However, Moody's retains concerns that ORMC may be challenged to
improve performance, despite recent third party contract success,
due to both inpatient and outpatient volume challenges, expense
pressures and construction diversions.
Balance Sheet Position: Measures Are Weak
As a result of the above mentioned operating weakness and funding
of information technology and other capital improvements liquidity
remains a credit weakness. Pro-forma Days Cash on Hand a modest
99 days and pro-forma cash to debt ratio of only 28.5% (based on
forecasted FY 2007). Over the next 5 years, cash is projected to
grow as the majority of capital needs for the new campus will be
funded with the Series 2008 bond issue. In addition the award of
New York State HEAL Grant monies totaling $48.6 million for both
the cost of construction and defeasance of prior debt demonstrates
strong community and state support and reduces leverage and the
dependency on cash and cashflow to fund construction. It is
estimated that ORMC will contribute approximately $35.4 million of
equity to the construction project, consisting of
$17.2 million of fundraising and internal funds of $18.2 million.
The project is also being funded with the sale / leaseback of one
of the two legacy campuses to a community foundation ($10
million). The formal closing of the sale is scheduled to coincide
with bond closing. The costs of the project, including a 835%
increase in outstanding debt, will result in material dilution of
already modest balance sheet measures underscoring Moody's rating
assignment of Ba1.
Outlook
The stable rating outlook is supported by ORMC's fundamental
attributes highlighted by a commanding market share in a high
growth area of upstate New York and recent State support of
consolidation efforts
What could change the rating - Up
Successful completion and start-up of new Medical Center and
material reduction in leverage or increase in liquidity through
improved financial performance
What could change the rating - Down
Further deterioration in operating performance, issuance of
additional debt beyond current issue, decline in cash
Rated Debt
Series 2008 Bonds
To be refunded with the Series 2008 bonds:
-- Series 2002 Variable Rate Demand Civic Facility Revenue
Bonds (Arden Hill Hospital Project)
-- Series 2002 Variable Rate Demand Civic Facility Revenue
Bonds (Horton Medical Center Project)
-- Series 2002B (Taxable) Variable Rate Demand Civic Facility
Revenue Bonds (Horton Medical Center West Hudson Facility
Project)
PACIFIC LUMBER: Panel Has Until Jan. 31 to File Competing Plan
--------------------------------------------------------------
The Honorable Richard Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas, in an order dated Jan. 4, 2008, that
the exclusivity periods of the Pacific Lumber Company and its
debtor-affiliates are terminated with respect to the Official
Committee of Unsecured Creditors, the Indenture Trustee for the
Timber Notes, and Marathon Structured Finance Fund L.P.
As to all other parties, the Court ordered that the Debtors'
exclusive period to:
(i) file a Chapter 11 plan of reorganization is extended until
February 29, 2008; and
(ii) solicit acceptances for that plan is extended to April 2,
2008.
The Creditors Committee, the Indenture Trustee, and Marathon may
file a competing plan no later than January 30, 2008, the Court
noted.
The Court further ruled that the hearing:
(a) to approve any and all disclosure statements will commence
on February 28; and
(b) to confirm a plan of reorganization will commence on
April 1.
All objections to the Exclusive Period Extension Motion that have
not been withdrawn, resolved, waived or settled are overruled.
About Pacific Lumber
Based in Oakland, California, The Pacific Lumber Company --
http://www.palco.com/-- and its subsidiaries operate in several
principal areas of the forest products industry, including the
growing and harvesting of redwood and Douglas-fir timber, the
milling of logs into lumber and the manufacture of lumber into a
variety of finished products.
Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.
Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transaction pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.
Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker
Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter
Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan,
Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific
Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J.
Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia
Pacific's lead counsel. John F. Higgins, Esq., and James Matthew
Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-
counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones
LLP, represents the Official Committee of Unsecured Creditors.
When Pacific Lumber filed for protection from its creditors, it
listed estimated assets and debts of more than $100 million.
Scotia Pacific listed total assets of $932,000,000 and total debts
of $765,978,335. The Debtors filed their Joint Plan of
Reorganization on Sept. 30, 2007. (Scotia/Pacific Lumber
Bankruptcy News, Issue No. 40, http://bankrupt.com/newsstand/or
215/945-7000).
PACIFIC LUMBER: Withdraws Amended Chapter 11 Plan
-------------------------------------------------
Pacific Lumber Company and its debtor-affiliates, in a filing
dated Jan. 4, 2008, notified Judge Richard Schmidt of the U.S.
Bankruptcy Court for the Southern District of Texas that they were
withdrawing their Amended Chapter 11 Plan filed on Dec. 20, 2007.
The Debtors did not state a reason for the withdrawal.
The Amended Plan
Scotia Development LLC, The Pacific Lumber Company, Britt Lumber
Co., Inc., Salmon Creek LLC, Scotia Inn Inc., and Scotia Pacific
Company LLC, together with MAXXAM Inc., MAXXAM Group Holdings
Inc., and MAXXAM Group Inc., delivered to the Court their Amended
Plan of Reorganization, and an accompanying amended Disclosure
Statement, on Dec. 20, 2007.
PALCO President and Chief Executive Officer George A. O'Brien
discloses that the Amended Plan reflects discussions and
negotiations between the Debtors and their various
constituencies, and constitutes an improvement in the overall
reorganization structure.
The most significant changes incorporated into the Amended Plan,
Mr. O'Brien relates, are:
* MAXXAM will provide approximately $10,000,000 of liquidity
to PALCO throughout the remainder of the case through a
redwood log and/or lumber purchase program with MAXXAM;
* MAXXAM will purchase about 3% of Reorganized Scopac's stock,
which is owned by PALCO, for $10 million on the Effective
Date. The purchase will be subject to higher and better
offers at the Confirmation Hearing;
* The separateness of Scopac and the PALCO Debtors after
emergence from bankruptcy will be maintained;
* All existing liens are preserved and cross collateralization
of debt will be eliminated;
* All payment-in-kind interest with respect to the new timber
notes will be eliminated;
* The maturity of the new timber notes will be shortened from
20 years to 10 years; and
* Scopac's exit financing will be reduced from $275 million to
$150 million -- of which only $65,000,000 will be drawn on
the Effective Date.
"The Plan pays all creditors in full, leaves equity intact, and
preserves jobs, business operations, and going concern value,"
Mr. O'Brien reiterates.
Under the Plan, the Debtors expect to pursue a development
project divided into two parts -- (i) the sale of the Ancient
Redwood Grooves as old-growth redwood conservation forests; and
(ii) the development and sale of the Redwood Village Development
as a master-planned development concept. The Debtors tell the
Court that since September 2007, they have refined the
Development Project to address potential concerns. The
Development Project will be guided by current and projected land
use policies and procedures. Policies under consideration may
favor a General Plan Amendment and rezoning for projects meeting
certain public interest standards, Mr. O'Brien notes.
As to asset valuation, the appraised value of the Debtors'
current operations exceeds $1.1 billion, according to Mr.
O'Brien, without placing any value on new developments, strategic
sales or litigation assets. Scopac's operating timberlands, he
notes, are worth approximately $950,000,000 by themselves, and
the PALCO Debtors' assets add another $170,000,000 in value.
Subsequently, the Debtors have decided to put some of their
unique Timberlands to a higher and better use, which will
increase the appraised value of the Debtors' assets by another
$500,000,000, for a total appraised value of over $1.6 billion.
The Debtors relate that they will satisfy, complete, perform and
comply with all environmental obligations as if no Chapter 11
bankruptcy cases were filed.
Under the Amended Disclosure Statement, the Debtors also provided
updates of the recent developments in their cases, including
exclusivity issues and the recently concluded mediation process.
The mediation parties were hopeful that a global settlement and a
consensual Chapter 11 plan could be reached. They, however,
reached an impasse over a fundamental disagreement regarding the
value of the Scopac Timberlands.
Exit Financing
As an integral part of their Plan, the Debtors expect to obtain
three exit financing facilities with these material terms:
PALCO Scopac Intercompany
Exit Facility Exit Facility Exit Facility
------------- ------------- -------------
Amount $75.3 MM $150 MM $46.4 MM
------------- ------------- -------------
Security/ to be First Priority None
Collateral determined Lien on all of
Scopac's assets
------------- ------------- -------------
Term up to five yrs. up to 10 yrs. up to 10 yrs.
------------- ------------- -------------
Use of Fund Reorganized *$65.4MM - Plan Repayment
Proceeds PALCO's turn- distributions of DIP
Source around costs & & intercompany Financing,
working capital exit facility Plan
distribu-
*84.6MM - future tions &
interest working
payments for capital
the New Timber
Notes and
working capital
------------- ------------- -------------
Source to be determined to be determined Reorganized
Scopac
------------- ------------- -------------
A full-text copy of PALCO's First Amended Plan of Reorganization
is available for free at:
http://bankrupt.com/misc/PALCO_FirstAmendedPlan.pdf
A full-text copy of the 104-page Disclosure Statement explaining
the Debtors' Amended Plan is available for free at:
http://bankrupt.com/misc/PALCO_DisclosureStatement.pdf
About Pacific Lumber
Based in Oakland, California, The Pacific Lumber Company --
http://www.palco.com/-- and its subsidiaries operate in several
principal areas of the forest products industry, including the
growing and harvesting of redwood and Douglas-fir timber, the
milling of logs into lumber and the manufacture of lumber into a
variety of finished products.
Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.
Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transaction pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.
Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker
Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter
Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan,
Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific
Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J.
Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia
Pacific's lead counsel. John F. Higgins, Esq., and James Matthew
Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-
counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones
LLP, represents the Official Committee of Unsecured Creditors.
When Pacific Lumber filed for protection from its creditors, it
listed estimated assets and debts of more than $100 million.
Scotia Pacific listed total assets of $932,000,000 and total debts
of $765,978,335. The Debtors filed their Joint Plan of
Reorganization on Sept. 30, 2007. (Scotia/Pacific Lumber
Bankruptcy News, Issue No. 40, http://bankrupt.com/newsstand/or
215/945-7000).
PACIFIC LUMBER: Wants Court Approval on MAXXAM Log Purchase Pact
----------------------------------------------------------------
Nathaniel Peter Holzer, Esq., at Jordan, Hyden, Womble, Culbreth
& Holzer, P.C., in Corpus Christi, Texas, relates that due to the
2007 subprime mortgage crisis, the related slowdown in new home
construction and the winter season, redwood logs are currently
plentiful and sales demand is low. At the same time, Mr. Holzer
notes, Pacific Lumber Co. and its debtor-affiliates are funding
significant fees and expenses associated with the reorganization.
To provide liquidity to PALCO as needed, MAXXAM has agreed, but
is not obligated to purchase Redwood logs and lumber from PALCO
at prevailing market prices, according to Mr. Holzer. Thus, the
parties wish to enter into a log/lumber purchase agreement, with
these salient terms:
(a) PALCO agrees to sell, and MAXXAM agrees to purchase,
redwood logs.
(b) MAXXAM will pay PALCO for the redwood logs at prevailing
market prices, plus any delivery costs incurred by PALCO.
The Redwood Logs will be payable by MAXXAM no later than
5:00 p.m., Pacific Standard Time on the day on which the
Logs are delivered to MAXXAM.
(c) PALCO will deliver the Logs to MAXXAM at a location as
mutually agreed by the parties. MAXXAM will pay all
transportation costs associated with the log delivery.
(d) The title to the Redwood Logs will pass to MAXXAM upon
payment of the purchase price.
The MAXXAM Log Purchase Agreement also provides for PALCO's
repurchase rights, Mr. Holzer notes. Under the Agreement, MAXXAM
grants PALCO the exclusive right to repurchase some or all of the
Redwood Logs, at the same price, for a period of 60 days after
closing of a particular sale. At the end of a Call Period for a
particular sale, MAXXAM is entitled to sell the items into the
market, but must first offer them to PALCO. In the event PALCO
declines the repurchase and MAXXAM closes a sale to the market,
MAXXAM must remit any net profit received on that sale to PALCO
within five days of the end of the transaction. However, in the
event the sale by MAXXAM result in a loss to MAXXAM, MAXXAM bears
the loss. Thus, MAXXAM will make no profit on any purchase from
PALCO under the Purchase Agreement.
PALCO believes that the contemplated sale are in the ordinary
course of its business and doe not require Court approval.
Nevertheless, due to the contentious nature of the Debtors'
bankruptcy cases and the fact that the pending sales are to an
insider, PALCO seeks the U.S. Bankruptcy Court for the Southern
District of Txas' permission to enter into the Log Purchase
Agreement with MAXXAM.
Mr. Holzer asserts that the Log Purchase Agreement should be
approved for these reasons:
1. It provides needed liquidity for PALCO through exit from
Chapter 11.
2. The Call Rights and the First Offer Rights ensures a
potential source of logs for milling in the Spring and
Summer when demand for Redwood lumber and lumber products
is normally higher.
3. Selling the logs into the market now may negatively impact
prices further. Many of the buyers in the market are
competitors who will mill the logs themselves, and so will
eventually be PALCO's competitors in the lumber market.
About Pacific Lumber
Based in Oakland, California, The Pacific Lumber Company --
http://www.palco.com/-- and its subsidiaries operate in several
principal areas of the forest products industry, including the
growing and harvesting of redwood and Douglas-fir timber, the
milling of logs into lumber and the manufacture of lumber into a
variety of finished products.
Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.
Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transaction pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.
Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker
Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter
Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan,
Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific
Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J.
Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia
Pacific's lead counsel. John F. Higgins, Esq., and James Matthew
Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-
counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones
LLP, represents the Official Committee of Unsecured Creditors.
When Pacific Lumber filed for protection from its creditors, it
listed estimated assets and debts of more than $100 million.
Scotia Pacific listed total assets of $932,000,000 and total debts
of $765,978,335. The Debtors filed their Joint Plan of
Reorganization on Sept. 30, 2007. (Scotia/Pacific Lumber
Bankruptcy News, Issue No. 40, http://bankrupt.com/newsstand/or
215/945-7000).
PAUL SHERIDAN: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------
Debtors: Paul A. Sheridan
Amanda Lee McKee-Sheridan
1206 Secotan Place
Fuquay Varina, NC 27526
Bankruptcy Case No.: 08-00110
Chapter 11 Petition Date: January 7, 2008
Court: Eastern District of North Carolina (Wilson)
Judge: A. Thomas Small
Debtors' Counsel: Richard D. Sparkman, Esq.
Richard D. Sparkman & Associates, P.A.
P.O. Drawer 1687
Angier, NC 27501
Tel: (919) 639-6181
Total Assets: $694,388
Total Debts: $1,648,150
Debtors' list of its 17 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Alliance Bank of Arizona Liability arising $362,748
Attn: Managing Agent out of business debt
4646 East Vanburen Street,
Suite 100
Phoenix,AZ 85008
Countrywide Home Loans 7500 East Calle $116,636
Attn: Managing Agent Brisas, Tucson, AZ ($400,000
P.O. Box 5170, MS SV314B 85750 secured)
Simi Valey, CA 93065 FMV $400,000 based ($331,615
on comparables senior lien)
Kelly Concrete Liability arising $106,137
Attn: Managing Agent out of business debt
P.O. Box 31834
Tucson, AZ 85751
Whitten Plumbing, Inc. Liability arising $95,143
out of business debt
Zagar Paint & Manufacturing, Liability arising out $73,304
Inc. of business debt
Bank of America Credit Card $69,558
New Base Plastering, LLC Liability arising out $51,650
of business debt
Rosario Curcio Liability arising out $50,000
of business debt
Mike McKee Personal Loan $40,000
Messa Fully Formed, Inc. Liability arising out $32,885
of business debt
L&L Industries- dba Davis Liability arising out $30,486
Kitchens of business debt
Suntrust/FIA Credit Card $27,746
Preston Insulation Liability arising out $22,263
of business debt
Kaiser & Koch Liability arising out $17,729
of business debt
AT&T Customer Service Credit Card $15,799
AZ Wholesale Judgment $15,650
Chase Credit Card $13,870
PERRY ELLIS: To Acquire Liz Claiborne Brands for $37 Million
------------------------------------------------------------
Perry Ellis International Inc. has entered into a definitive
agreement for the acquisition of the C&C California and Laundry
brands from Liz Claiborne Inc. for $37 million subject to
inventory adjustment. The acquisition will be financed through
existing cash and borrowings under the Company's existing credit
facility. The company expects to close the acquisition, subject
to receipt of customary government approvals and other customary
conditions, by Feb. 4, 2008.
"These acquisitions, which advance Perry Ellis International's
growth strategy with two strong brands, with a very young
following," George Feldenkreis, chairman and chief executive
officer, said. "The addition of C&C California and Laundry will
allow us to aggressively pursue women's apparel in the
contemporary segment, which is the fastest growing one of the
women's market today. With this acquisition, we increase our long
term growth potential and mark another key milestone in our
Company's history."
Subject to completion of the transaction, Perry Ellis will combine
its C&C California and Laundry operations with the Original
Penguin brand to create a new Contemporary Business Platform. The
combined additional annual revenues for Fiscal 2009 of these two
brands are expected to be approximately $60 million. Reflecting
the high growth potential for Original Penguin, C&C California and
Laundry, the contemporary brand revenues should increase at a
double digit annual rate over the next five years. The
acquisition will have no impact on Fiscal 2008, and accretion in
the range of $0.08 to $0.10 is expected in Fiscal 2009.
"We are pleased to welcome the associates from C&C California and
Laundry to the Perry Ellis International family," Oscar
Feldenkreis, president and chief operating officer, concluded.
"We believe our contemporary platform will benefit greatly from
their experience and knowledge.
"The creation of this platform is an indication of our commitment
to building new vehicles for sustainable growth. We believe that
these brands will also translate into our swimwear division, plus
expansion into children's and additional product lines."
About Liz Claiborne
Liz Claiborne Inc. -- http://www.lizclaiborneinc.com/-- designs
and markets an extensive range of branded women's and men's
apparel, accessories and fragrance products. The company's
diverse portfolio of quality brands -- available domestically and
internationally via wholesale and retail channels -- consistently
meets the widest range of consumers' fashion needs, from classic
to contemporary, active to relaxed and denim to streetwear.
About Perry Ellis
Headquartered in Miami, Florida, Perry Ellis International Inc.
(Nasdaq: PERY) -- http://www.pery.com/-- designs, sources,
markets and licenses a portfolio of brands including Perry Ellis,
Jantzen, John Henry, Cubavera, Munsingwear, Original Penguin and
Farah. The company also operates 38 retail locations including 3
Original Penguin locations. The company has sourcing offices in
Indonesia, India, Korea, Thailand, Peru, Nicaragua, and El
Salvador.
* * *
Standard & Poor's Ratings Services assigned, on July 2007, its
preliminary 'B+' senior unsecured debt, preliminary 'B-'
subordinated debt, and preliminary 'CCC+' preferred stock ratings
to the Rule 415 universal shelf registration for $200 million in
debt securities of Perry Ellis International Inc. (PEI;
B+/Stable/--). Ratings still apply.
PHARMANET DEV'T: Moody's Lifts $45 Mil. Facility's Rating to Ba3
----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of PharmaNet
Development Group, Inc. including the Corporate Family Rating and
the rating on the Senior Secured Credit Facility. In addition,
Moody's changed the speculative grade liquidity rating to SGL-2
from SGL-3, reflecting Moody's belief that the company will have
good liquidity over the next twelve months.
The outlook for the ratings is positive.
The upgrade of the ratings and the positive outlook reflect the
good progress that PharmaNet has made in its turnaround. This
progress includes:
1) the closure of the Florida facilities and completion of
additional clinic and laboratory capacity in Canada and
Europe;
2) the settlement of a class action lawsuit; and
3) new additions to the management team and Board of Directors.
In addition, PharmaNet has demonstrated healthy operating
performance in 2007, indicating to Moody's that issues at the
former Miami facility have not permanently impaired the company's
reputation among pharmaceutical firms and other clients. The
upgrade also acknowledges the company's modest financial leverage,
good interest coverage, favorable trends in free cash flow
generation and relatively good revenue diversity by customer.
The ratings continue to be constrained for several reasons,
including:
1) an on-going formal investigation of PharmaNet by the SEC;
2) uncertainty regarding the potential refinancing of the
company's convertible notes;
3) limited track record of the current Board following changes
in late 2007; and
4) uncertainty regarding the availability of insurance to cover
potential future liabilities related to the former Florida
facility.
The B3 rating also reflects PharmaNet's relatively limited scale
in the global contract research organization industry, which is
highly competitive and subject to cancellation risk.
Ratings Upgraded
* $45 Million Senior Secured Bank Credit Facility, to Ba3
(LGD1, 5%) from B1 (LGD1, 7%)
* Corporate Family Rating, to B3 from Caa1
* Probability of Default Rating, to B3 from Caa1
* Speculative Grade Liquidity Rating, to SGL-2 from SGL-3
The outlook is positive.
PharmaNet, based in Princeton, New Jersey, is a leading North
American CRO firm that provides Phase I through Phase IV clinical
development services, bio-analytical laboratory services, and
specialized drug development services to pharmaceutical,
biotechnology and generic pharmaceutical companies. PharmaNet
generated direct revenues of approximately $350 million for the
twelve month period ended Sept. 30, 2007.
PROPEX INC: Posts $60.7 Mil. Net Loss in Quarter Ended Sept. 30
---------------------------------------------------------------
Propex Inc. reported its financial results for the three months
ended Sept. 30, 2007.
The company disclosed a net loss of $60.7 million in three months
ended Sept. 30, 2007, compared to a net loss of $6.5 million in
the same period in 2006.
For the three months ended Sept. 30, 2007, total net revenue
decreased $15.2 million, or 7.8%, to $179.4 million from
$194.6 million in the corresponding period of 2006. The net
revenue decrease is due primarily to a decrease in North America
furnishings net revenue of $24.2 million and a decrease in North
America industrial products net revenue of $4.2 million. The
segment decreases were partially offset by an increase in North
America geosynthetics net revenue of $5.4 million, an increase in
concrete fiber net revenue of $2.4 million, an increase in Europe
net revenue of $0.6 million and an increase in Brazil net revenue
of $4.8 million from the corresponding period in 2006.
For the nine months ended Sept. 30, 2007, total net revenue
decreased $73.5 million, or 12.4%, to $517.8 million from
$591.3 million in the corresponding period of 2006. This net
revenue decrease is due to a decrease in North America furnishings
net revenue of $90.9 million and a decrease in North America
industrial products net revenue of $11.3 million. The segment
decreases were partially offset by an increase in North America
geosynthetics net revenue of $3.5 million, an increase in concrete
fiber net revenue of $9.8 million, an increase in Europe net
revenue of $3.5 million and an increase in Brazil net revenue of
$11.9 million from the corresponding period in 2006.
At Sept. 30, 2007, the company's balance sheet showed total assets
of $585.7 million and total liabilities of $527.4 million,
resulting in a $58.3 million stockholders' equity.
Covenant Default
At Sept. 30, 2007, the company disclosed that it was not in
compliance with the two leverage ratio covenants under the Second
Amendment to a Credit Agreement dated Jan. 26, 2007. The company
is currently in default under the Credit Agreement and in
negotiations with its lenders in order to resolve the issue of
non-compliance.
The company has notified the Administrative Agent of its non-
compliance in accordance the Credit Agreement, and the
Administrative Agent and the lenders under the Credit Agreement
have indicated a willingness to work with the company to resolve
the issue of non-compliance. To proactively address the issue of
non-compliance and to provide strategic advice related to its
indebtedness, on Oct. 23, 2007, the company engaged Houlihan Lokey
Howard & Zukin Capital, Inc. as its exclusive advisor. Houlihan
Lokey will assist the company as it negotiates with its current
lenders and will provide strategic and tactical recommendations to
successfully address the long-term financing needs of the company.
No assurance of a successful resolution of these matters can be
given as of the date of this report. The company has not been
notified by the lenders of their intent to exercise the right to
accelerate the debt under the default provisions of the Credit
Agreement.
As a result of its default under the Credit Agreement, the company
is precluded from additional borrowings from the revolving credit
facility while in default. In addition, the terms of the Credit
Agreement state that after the occurrence of default, the company
may not elect to have line of credit borrowings be made or
maintained as a LIBOR loan after expiration of the interest
period. As portions of its borrowings under LIBOR interest rate
agreements expire, these borrowings will be at the base rate as
defined by the Credit Agreement, plus 2%. If not for the event of
default, in accordance with our monthly borrowing base
calculation, Propex Inc. would have had $22.6 million of
availability, as of Sept. 30, 2007, under its $50 million
revolving line of credit.
As of Sept. 30, 2007, the company had $230.6 million of borrowings
outstanding under the Credit Agreement. As a result of its
default, this amount has been classified as current on the
consolidated balance sheet. If the lenders exercise their right
to accelerate the indebtedness or foreclose on collateral under
the Credit Agreement, it would have a material adverse effect on
the company. At Sept. 30, 2007, the balance of unamortized
deferred financing costs that may be required to be written-off in
the event that a waiver or restructuring of terms cannot be
negotiated and the debt is accelerated or otherwise extinguished,
was $3.8 million.
About Propex Inc.
Propex Inc. -- http://www.propexinc.com/-- manufactures primary
and secondary carpet backing. The company also manufactures and
markets woven and non-woven polypropylene fabrics and fibers used
in geosynthetic and a variety of other industrial applications.
* * *
As reported in yesterday's Troubled Company Reporter, Standard &
Poor's Ratings Services lowered its ratings on Propex
Inc. by two notches, including its corporate credit rating to
'CCC' from 'B-'. The ratings remain on CreditWatch with negative
implications where they were placed on Oct. 8, 2007.
QUECHAN TRIBE: Fitch Assigns 'BB' Rating on Gaming Revenue Bonds
----------------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB' to The Quechan Tribe
of the Fort Yuma Indian Reservation's gaming enterprise revenue
bonds, series 2008 (federally taxable) and has affirmed these
ratings:
-- Governmental Project Bonds series 2007 (Tax-Exempt) at
'BB-';
-- Issuer Rating at 'BB-'.
The Rating Outlook is Stable.
Approximately $160 million gaming enterprise revenue bonds are
expected to price via negotiation with JP Morgan and are due Jan.
1, 2018 and 2025. The bonds are subject to monthly mandatory
sinking fund payments sufficient to amortize the bonds by
maturity. Quechan issued approximately $45 million of
governmental project bonds in December 2007. The governmental
project bonds are due Dec. 1, 2027 and are also subject to monthly
mandatory sinking fund payments sufficient to amortize the bonds
by maturity.
The 'BB-' issuer rating for the Quechan Tribe is supported by the
stable operating performance of its existing casino operations,
which are the Tribe's main economic driver and primary source of
cash flows. The Tribe currently operates two casinos, located on
adjacent parcels of land straddling the Arizona/California border,
which have a history of producing strong and stable cash flows.
The gaming revenue bonds benefit from a security interest in the
cash flows of Quechan's present and future gaming operations. The
governmental project bonds are an unsecured general obligation of
the Tribe, payable from all available net assets and subordinate
to the interests of senior obligations, which include the gaming
enterprise revenue bonds. Available net assets will largely be
comprised of cash flows of the gaming operation after debt service
on the gaming enterprise revenue bonds.
Quechan is issuing debt to construct a replacement facility for
its current California casino. The project represents a
significant expansion and upgrade from the existing facilities,
which offer a limited set of amenities, and cater mostly to a
local market. The expanded facility will benefit from a prime
location on I-8, a major east/west transportation route, and
approximately one mile from the U.S./Mexico Andrade Border
crossing. The project will provide a level of diversification
that is lacking in the existing operations, enabling the Tribe to
attract a broader market segment at the new facility. There will
be no business disruption during construction, as the project site
is located approximately eight miles from the existing facilities,
both of which will remain open during construction.
Based on fiscal 2008 projected gaming enterprise earnings before
interest, taxes, depreciation and amortization at the current
facilities, and pro forma for the $205 million in total issuance,
debt to EBITDA is expected to peak at 4.1 times. Following the
realization of cash flows of the California casino project, debt-
to-EBITDA is expected to normalize at roughly 2.9x in fiscal 2011.
Fitch notes that Quechan is uniquely positioned in relation to
regulatory risk relative to other Native American gaming issuers
in that it operates facilities under compacts with two states. In
addition, the competitive environment is somewhat more favorable
for the Quechan than for other Native American gaming operators in
the Southern California market, with only one competitor located
within a 75 miles radius and no other tribe with trust lands
located along I-8 until the closet competitor facilities, located
110 miles west.
Offsetting the strengths in Quechan's credit profile are concerns
including the limited experience of the current management team.
Fitch believes that the current management team lacks the depth of
experience to effectively manage the new casino and resort, which
will include a much more intensive offering of both gaming and
non-gaming amenities, as well as a hotel property. Quechan
recognizes this issue and has developed a plan to strategically
hire management personnel where they do not currently have
expertise prior to project opening.
Of additional concern, the demographic profile of the target
market indicates a relatively low income consumer. The clientele
of the existing facilities includes residents of the primary
market area, which encompasses a 75 mile radius from Yuma,
Arizona, as well as winter residents of Yuma. Given the higher
quality and associated higher price point of the planned
California casino amenities, Fitch believes that the success of
the project somewhat depends on management's ability to broaden
the target market. In order to accomplish this, Quechan plans to
market the new property to a wider area, believing the improved
amenities will draw tourists from the San Diego area, and the
superior location will allow for increased capture of traffic and
pedestrian flow from the Andrade border crossing and I-8.
There have been political difficulties related to the location of
the California casino project. A group of tribal members have
protested the location of the project because they believe it is
culturally significant ground and should not be developed. If the
construction is delayed by legal action, the Tribe could continue
to operate at the current California facility, producing adequate
cash flows to cover debt service, but failure to complete
development of the project by Dec. 1, 2009 would be an event of
default under the gaming enterprise Indenture, which could cause
an acceleration of principal payment. This may require Quechan to
re-finance the bonds. Fitch believes Quechan would have the
ability to successfully re-finance the debt given the previously
noted strength of cash flows of the existing operations. To date,
the large majority of the earth moving required by the project has
been completed and no culturally significant items have been
uncovered.
SHARPE LLC: Case Summary & Three Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Sharpe, L.L.C.
6986 Poudre Canyon Highway
Bellvue, CO 80512
Bankruptcy Case No.: 08-10193
Chapter 11 Petition Date: January 8, 2008
Court: District of Colorado (Denver)
Judge: Michael E. Romero
Debtor's Counsel: Lee M. Kutner, Esq.
Kutner, Miller, Brinen, P.C.
303 East 17th Avenue, Suite 500
Denver, CO 80203
Tel: (303) 832-2400
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's Three Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
City of Dacono $2,077
P.O. Box 186
Dacono, CO 80514
Diamond H. Excavation $1,000
37130 Rusty Spur Travel Agent
Kiowa, CO 80117
Terracon Consultants $1,000
301 North Howest Street
Fort Collisn, CO 80521-2012
SVI MEDIA: Court Okays Use of Secured Lenders' Cash Collateral
--------------------------------------------------------------
SVI Media, Inc. and Oxford S.V.I., Inc. obtained permission from
the U.S. Bankruptcy Court for the Central District of Illinois to
use the cash collateral of their senior secured debenture holders.
Prior to its bankruptcy filing, the secured parties entered into
secured financing arrangements with the Debtors, in the combined
principal amount of $4,210,526:
Debenture Holder Amount
---------------- ------
Cantone Office Center, LLC $2,894,737
Midsummer Investment, Ltd. $526,316
Palisades Master Fund, L.P. $526,316
Crescent International, Ltd. $263,158
The Debtors then entered into a security agreement to secure the
debentures, covering all assets of the Debtors. Pursuant to the
security agreement, the secured parties designated Cantone Office
Center, LLC as their agent.
Including accrued and unpaid interest through the date of
bankruptcy, the Debtors were indebted to the secured parties an
amount equal to $4,303,158, of which, the Debtors relate, they
went into default under the agreements.
The Court permitted the Debtors to use the cash collateral only to
purchase inventory, meet their payroll, and generally continue
their ongoing business operations. These necessary operating
expenses do not include payments to pay or cure any pre-bankruptcy
obligations of the Debtors without consent from the secured
parties.
About SVI Media
Based in Peoria, Illinois, SVI Media, Inc. -- http://www.svi.com/
-- develop hybrid digital video on demand and pay-per-view
entertainment systems that offer hotel guests a variety of video
content on demand. They have a customer base of over 2,400
hotels, of which 1,970 hotels (160,000 rooms) provide video on
demand services. The remaining properties receive internet access
and support as well as ancillary services.
The Debtor and its affiliate, Oxford S.V.I., Inc., filed for
Chapter 11 protection on Dec. 7, 2007 (Bankr. C.D. Ill. Case Nos.
07-82762 and 07-82763). Barry M. Barash, Esq., at Barash &
Everett, LLC, represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed assets and liabilities of $1 million to
$100 million.
SWEET TRADITIONS: Mulls Sale of 21 Krispy Kreme Stores to Allied
----------------------------------------------------------------
Sweet Traditions LLC is considering sale of 21 of its Krispy Kreme
stores to Allied Capital Corp., Mike Nolan of the Chicago Sun-
Times reports.
The report says part of the sale agreement would be Allied's
assumption of about $27 million of the Debtor's liabilities.
A hearing to consider approval of the sale has been scheduled for
early February, Sun-Times says.
As reported in the Troubled Company Reporter on Oct. 30, 2007,
Allied, which owns 100 percent of the voting stock of Sweet
Traditions, provided the Debtor with $700,000 in postpetition
financing and access to its cash collateral.
As adequate protection, the Debtor granted Allied a continuing
replacement lien and security interest in all of its
postpetition properties.
As reported in the Troubled Company Reporter on Oct. 4, 2007, the
Official Committee of Unsecured Creditors opposed the financing
arguing that the credit agreement lacked clear and detailed
explanation of some basic terms like nature of the facility as
a revolving line or single advance, applicable interest rates,
repayment of the facility, and maturity date.
Additionally, the Committee argued that the credit agreement
prohibited the Debtor from engaging in any merger or
consolidation with any entity, which provision would
eliminate some potential options of the Debtor to
reorganize the bankruptcy estate.
About Sweet Traditions
Saint Louis, Missouri-based Sweet Traditions LLC --
http://www.sweettraditions.com/-- and its debtor-affiliate, Sweet
Traditions of Illinois LLC, are franchisees of Krispy Kreme
Doughnuts, Inc, which owns, operates and franchises specialty
retail stores offering doughnuts.
The Debtors filed for Chapter 11 bankruptcy protection on Sept. 4,
2007 (E.D. Missouri Case Nos. 07-45787 and 07-45789). David A.
Warfield, Esq. and Laura Toledo, Esq. at Blackwell Sanders, L.L.P.
represent the Debtors in their restructuring efforts. Jonathan
Margolies, Esq. at Shughart Thomson & Kilroy, P.C., is counsel to
the Debtors' Official Joint Committee of Unsecured Creditors. The
Debtors' schedules disclose total assets of $9,391,175 and total
liabilities of $51,552,132.
TARPON INDUSTRIES: AMEX to Delist Securities on January 17
----------------------------------------------------------
The American Stock Exchange LLC(R) disclosed its final
determination to remove the common stock of Tarpon Industries Inc.
from listing on the Exchange, and filed an application on Form 25
to strike the Securities from listing with the Securities and
Exchange Commission. The delisting will become effective on
Jan. 17, 2008, unless postponed by the SEC.
Pursuant to its rules, the Exchange provided notice to Tarpon
Industries Inc. of the decision to delist the Securities and an
opportunity to appeal the decision to a panel designated by the
Exchange's board of governors.
The Exchange will provide public notice of its determination on
its website. Notice will remain posted on the website until the
delisting is effective.
Headquartered in Marysville, Michigan, Tarpon Industries Inc.
(AMEX: TPO) -- http://www.tarponind.com/-- through its wholly
owned subsidiaries within the United States and Canada,
manufactures and sells structural and mechanical steel tubing and
engineered steel storage rack systems.
Going Concern Doubt
As reported in the Troubled Company Reporter on April 26, 2007,
Rehman Robson expressed substantial doubt about Tarpon Industries
Inc.'s ability to continue as a going concern after auditing the
company's financial statements for the year ended Dec. 31, 2006.
The auditor pointed to the company's sustained recurring net
losses since its inception, negative working capital, and default
of its principle loan agreements due to its violation of specific
financial and non-financial debt covenants.
THOMAS BLICKHAHN: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Thomas J. Blickhahn, Jr.
2830 Wilmington Road
Lake Placid, NY 12946
Tel: (518) 523-2180
Bankruptcy Case No.: 08-10028
Chapter 11 Petition Date: January 7, 2007
Court: Northern District of New York (Albany)
Judge: Robert E. Littlefield Jr.
Debtor's Counsel: Michael B. Fisher, Esq.
Niles, Piller and Bracy, PLLC
1944 Saranac Avenue
Suite 2
Lake Placid, NY 12946
Tel: (518) 523-5600
Fax: (518) 523-5601
Estimated Assets: Less than $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's list of its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Margaret Yakaboski and John Personal Loan $30,000
Yakaboski
50 Service Road - A
Calvinton, NY 11933-1363
Citi Cards Credit Card Debt $21,964
P.O. Box 183053
Columbus, OH 43218-3053
Bank of America/MBNA Credit Card $21,219
P.O.Box 15287
Wilmington, DE 19886-5287
Citibank (South Dakota) Credit Card Debt $18,398
Capital One Bank Capital One Bank $12,930
Collection
Discover Card Credit Card Debt $12,000
Rice Furniture Furniture/Carpet $8,459
Margaret Blickhahn Personal Loan $7,600
Deborah D. Mueller Bookkeeping Services $6,519
Hurley Brothers Fuel Services $5,697
Edenfield & Snow Accounting Services $5,575
Gordon W. Pratt Insurance $3,156
Adirondack Daily Enterprise Advertising $2,285
Peerless Insurance Company Insurance $2,166
W.E. Aubuchon Co., Inc. Credit Card $1,599
The Garden Center Pool Repair/Gardening $1,148
Split Rock Refrigeration $787
Time Warner Cable Services $721
Stoves & Chimneys Fireplace repair $680
Lake Placid Carpet Care Carpet Cleaning $594
TOPPS MEAT: Court Okays Sale of Assets for $1.25 Million
--------------------------------------------------------
The Hon. Rosemary Gambardella of the U.S. Bankruptcy Court for the
District of New Jersey approved the sale of Topps Meat Co.'s
assets for $1.25 million, Jeffrey Gold of the Associated Press
reports.
As previously reported in the Troubled Company Reporter, the
company was forced to close its Elizabeth plant and go out of
business effective Oct. 5, 2007, due largely to the economic
impact of the second-largest beef recall in U.S. history involving
more than 21.7 million pounds of ground beef products.
On Nov. 21, 2007, the company filed for Chapter 7 liquidation
with the United States Bankruptcy Court for the District of New
Jersey, disclosing assets and debts between $1 million to
$100 million.
According to the AP, citing Chapter 7 Trustee Catherine E.
Youngman, the Topps name and company equipment were sold to TMC
Acquisition Co. for $800,000 while the remainder of the company's
lease and its flash-freezing equipment was bought by MSDT
Acquisition, an affiliate of Premio Foods Inc., for $250,000. TMC
Acquisition will further pay up to 10 cents per pound for about
2.2 million pounds of hamburger, the AP adds.
Most of the sale proceeds, the AP relates, will go to secured
lender RBS Citizens Bank of Philadelphia which had loaned the
company $14.5 million.
Around 5,000 other creditors however, the AP discloses, will share
in the remaining $107,500 of the proceeds. The creditors though,
according to the Chapter 7 Trustee, may get additional
distributions through litigation. The Chapter 7 Trustee further
said that 40 creditors could get paid through the company's
insurance carries, the AP adds.
About Topps Meat
Headquartered in Elizabeth, New Jersey, Topps Meat Company --
http://www.toppsmeat.com/-- manufactures and supplies branded
frozen hamburgers and other portion controlled meat for
supermarkets and merchandisers.
US ENERGY: Files for Chapter 11 Bankruptcy Protection in New York
-----------------------------------------------------------------
U.S. Energy Systems Inc. has filed voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in the
Southern District of New York. The company's U.S. Energy Overseas
Investments LLC and GBGH, LLC subsidiaries also have filed
petitions for reorganization.
The company's wholly owned subsidiary U.S. Energy Biogas Corp. and
the USEB subsidiaries, and UK Energy Systems Ltd. and the
company's other UK subsidiaries are not part of the Chapter 11
filings and are not adversely affected by them. Virtually all of
USEY's employees and all of its income generating operating
activities are in USEB and the UK subsidiaries and therefore are
not affected by the filings.
The company anticipates that its Wednesday filings will accelerate
and bring an orderly, timely and most cost effective conclusion to
the process of analyzing and implementing strategic alternatives
for addressing the company's capital structure and working capital
needs, which, as previously announced, has been underway since
mid-2007.
As previously announced, the company has received expressions of
interest from several parties in a wide range of possible
strategic proposals all of which are continuing to be analyzed.
Chapter 11 of the U.S. Bankruptcy Code provides a court-supervised
mechanism that the company believes is the best venue for
efficiently selecting and implementing the optimum strategic
options for the company for the benefit of its stakeholders.
Protection for UK-Based Assets
To protect the value of the company's UK-based assets and
operations, which are not part of the Chapter 11 filings, the
company filed a motion for cash collateral that, if granted by the
Court, will ensure that the UK subsidiaries will have access to
the working capital they need on an ongoing basis to continue
operating.
As previously reported, the company's UK operations have been
funded for the past several months through a series of waivers
negotiated with certain of the company's lenders. The company has
not requested that the cash collateral motion be approved on a
preliminary basis as part of First Day orders.
The company affirmed that all of its income producing business
operations -- consisting of USEB and its subsidiaries and UKES and
the UK subsidiaries -- are continuing normal operations and that
employees, customers and vendors of these businesses are
unaffected by the Chapter 11 filings.
Peter Partee of Hunton & Williams LLP serves as lead counsel to
U.S. Energy Systems Inc., U.S. Energy Overseas Investments LLC and
GBGH LLC.
About U.S. Energy Systems
U.S. Energy Systems Inc. (Pink Sheets: USEY) --
http://www.usenergysystems.com/-- owns green power and clean
energy and resources. USEY owns and operates energy projects in
the United States and United Kingdom that generate electricity,
thermal energy and gas production.
US ENERGY: Case Summary & 40 Largest Unsecured Creditors
--------------------------------------------------------
Lead Debtor: U.S. Energy Systems, Inc.
40 Tower Lane, 1st Floor
Avon, CT 06001
Bankruptcy Case No.: 08-10054
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
G.B.G.H., L.L.C. 08-10056
U.S. Energy Overseas Investments, L.L.C. 08-10057
Debtor-affiliates filing separate chapter 11 petitions on November
29, 2006:
Entity Case No.
------ --------
U.S. Energy Biogas Corp. 06-12827
Brookhaven Energy Partners, L.L.C. 06-12826
Illinois Electrical Generation Partners,L.P. 06-12828
Illinois Electrical Generation Partners II, 06-12829
L.P.
Upper Rock Energy Partners, L.L.C. 06-12830
Streator Energy Partners, L.L.C. 06-12831
Brickyard Energy Partners, L.L.C. 06-12832
Dixon Lee Energy Partners, L.L.C. 06-12833
Roxanna Resource Recovery, L.L.C. 06-12834
Avon Energy Partners, L.L.C. 06-12835
Devonshire Power Partners, L.L.C. 06-12836
Riverside Resource Recovery, L.L.C. 06-12837
Zapco Illinois Energy, Inc. 06-12838
B.M.C. Energy, L.L.C. 06-12839
Barre Energy Partners, L.P. 06-12840
Biogas Financial Corp. 06-12841
Burlington Energy, Inc. 06-12842
Cape May Energy Associates, L.P. 06-12843
Dunbarton Energy Partners, L.P. 06-12844
Lafayette Energy Partners, L.P. 06-12845
Oceanside Energy, Inc. 06-12846
Onondaga Energy Partners, L.P. 06-12847
Power Generation (Suffolk), Inc. 06-12848
Resources Generating Systems, Inc. 06-12849
Suffolk Energy Partners, L.P. 06-12850
Suffolk Transmission Partners, L.P. 06-12851
Taylor Energy Partners, L.P. 06-12852
Tuscon Energy Partners, L.P. 06-12853
Zapco Energy Tactics Corp. 06-12854
Z.F.C. Energy, Inc. 06-12855
Morris Genco, L.L.C. 06-12856
Countryside Genco, L.L.C. 06-12857
Type of Business: The Debtors own and operate energy facilities
producing electricity and energy alternatives to
natural gas. See http://www.usenergysystems.com
Chapter 11 Petition Date: January 9, 2008
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Peter S. Partee, Esq.
Richard P. Norton, Esq.
Joseph J. Saltarelli, Esq.
Hunton & Williams, L.L.P.
200 Park Avenue
New York, NY 10166-0136
Tel: (212) 309-1000, (212) 309-1260
Fax: (212) 309-1100, (212) 209 1100
Debtors' Consolidated Financial Condition:
Total Assets: $258,200,000
Total Debts: $175,300,000
U.S. Energy Systems, Inc's Eight Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Kostin, Ruffkess & Co., $48,500
L.L.P.
76 Batterson Park Road
Farmington, CT 06032
Eckert Seamans Cherin & $24,403
Mellott, L.L.C.
300 Delaware Avenue,
Suite 1210
Wilmington, DE 19801
International Plaza $29,010
Associates
750 Lexington Avenue
New York, NY 10022
Citrix Systems, Inc. $823
Leslie Waterworks, Inc. $407
First Reliance Life $403
Insurance
Limores.net $345
Corporation Service Co. $29
Consolidated List of 40 Largest Unsecured Creditors of Debtors
filing separate chapter 11 petitions on November 29, 2006:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Office of the Chief Clerk Repayment of tax $62,518,250
Illinois Commerce Division incentives
527 East Capital Avenue
P.O. Box 19260
Springfield, IL 62794
Jenbaeher Energy Systems Ltd. Trade $368,624
5244 N. Sam Houston
Parkway East
Houston, TX 77032
Cape May County Municipal Tax $348,195
P.O. Box 610
Cape May Court, NJ 08220
Run Energy, L.P. Trade $179,602
Woodbine Developmental Trade $73,204
Center
City of Suffolk Tax $68,774
Zampell Refractories Inc. Trade $60,624
Illinois Department of Tax $50,946
Revenue
Marina Development, Inc. Trade $50,416
Cananwill, Inc. Trade $44,165
Brown County Port & Solid Trade $40,200
Waste
Carter Machinery Co., Inc. Trade $35,896
Deutz Corp. Trade $25,651
Southeastern Public Service Trade $22,901
Square D Co. Trade $20,559
Automation Engineering Trade $20,000
Systems
Long Island Power Trade $19,517
C.K. Resources Trade $17,659
Professional Engine Services Trade $17,189
Derenzo and Associates, Inc. Trade $11,800
Motive Parts, Co., Inc. Trade $11,528
Tucson Electric Power Co. Trade $10,592
BISYS Retirement Services Trade $9,880
Atlantic States Lubricant Trade $9,554
Allied Waste Industries, Inc. Trade $8,680
Grainger Trade $8,636
Windward Petroleum Trade $8,299
City of Garland Tax $7,936
Southworth Milton, Inc. Trade $7,817
American Environmental Group Trade $6,574
Wear Check U.S.A. Trade $6,400
S.C.S. Engineers, P.C. Trade $6,346
Anthem Blue Cross of Trade $6,088
Connecticut - Insurance
Brenco Operating Inc. Trade $6,024
Town of Hempstead Tax $5,239
C.E.S. Industrial Piping Trade $5,166
Supply
Town of Onondaga Tax $5,142
B.P. Fuel Trade $5,131
Papco Oil Company Trade $4,677
Ronald H. Williams, Trade $4,516
Treasurer
WARNEX INC: Gets Waiver on Quarterly Capital Repayment from SIPAR
-----------------------------------------------------------------
Warnex Inc. disclosed last week that it obtained a waiver from
SIPAR Inc. for the company's quarterly capital repayment of
$500,000 which was due on Jan. 3, 2008.
SIPAR will allow Warnex to repay this amount any time up to
April 1, 2008. This agreement is part of Warnex's strategy,
following its announcement on Dec. 20, 2007, to refinance and
restructure its debt instruments in order to present a more stable
balance sheet in the near future.
"We are pleased that SIPAR has agreed to grant us this waiver in
order to allow us to conclude financing arrangements with various
parties," said Mark Busgang, President and CEO of Warnex. "This
accommodation demonstrates SIPAR's confidence in our ability to
reorganize our financial instruments."
Warnex Inc. -- http://www.warnex.ca/-- (TSX: WNX) provides
laboratory services to the pharmaceutical and healthcare sectors.
Warnex's analytical services division provides pharmaceutical and
biotechnology companies with a variety of quality control
services, including traditional chemistry, chromatography,
microbiology, method development and validation, and stability
studies. Warnex's bioanalytical services division specializes in
bioequivalence and bioavailability studies for clinical trials.
Warnex's medical laboratories division focuses on genetic and
biochemical testing for the healthcare industry and has extensive
expertise in genetic testing for human identification, molecular
diagnostics, and pharmacogenetics.
WHEELING ISLAND: Note Redemption Cues Moody's Rating Withdrawal
---------------------------------------------------------------
Moody's withdrew the B2 corporate family rating and B2 probability
of default rating of Wheeling Island Gaming Inc. following the
redemption of its $125 million 10 1/8% senior unsecured notes.
Wheeling Island Gaming, Inc. owns and operates Wheeling Island
Racetrack & Gaming Center located in Wheeling, West Virginia.
WHITEFORD BAPTIST: Case Summary & 19 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Whiteford Baptist Church
aka Whiteford Church and Schools
aka Whiteford Christian Day School
aka Whiteford School of the Arts
501 Whiteford Way
Lexington, SC 29072
Bankruptcy Case No.: 08-00182
Type of Business: The Debtor is a religious organization.
Chapter 11 Petition Date: January 7, 2008
Court: District of South Carolina (Columbia)
Judge: Helen E. Burris
Debtor's Counsel: Nancy E. Johnson, Esq.
Law Office of Nancy E. Johnson, LLC
P.O. Box 146
Columbia, SC 29202-0146
Tel: (803) 343-3424
http://www.njohnson-bankruptcy.com/
Total Assets: $2,546,378
Total Debts: $1,745,073
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
CitiCorp Vendor Finance $56,805
P.O.Box 7247-0118
Philadelphia, PA 19170
NEC Financial $46,700
300 Frank W. Burr Boulevard
7th floor
Teaneck, NJ 07666
Hewlett Packard Finance Executory Contract $24,625
420 Mountain Avenue
Murray Hill, NJ 07974
CitiBusiness Card $15,395
Bank of America $11,214
Pitney Bowes Purchase Power $6,542
Office Depot $6,225
Lowe's $5,973
Staples $4,932
Sams Club $4,228
BP Oil $3,884
Church Mutual Insurance insurance $2,478
Dell Financial Services $1,609
Val Pak $1,500
Sysco Foods $1,374
HH Refrigeration $1,223
BellSouth $973
The State $913
Aqua Seal $900
* Andrew Curie Joins as Partner in Venable's Baltimore Office
-------------------------------------------------------------
Venable LLP reported that Andrew J. Currie has joined the firm as
a partner in the Baltimore office.
Mr. Currie, 38, has a well-rounded background in business
bankruptcy, including litigation, restructurings, out-of-court
workouts and insolvencies. He has represented debtors as well as
creditor committees (secured and unsecured), equity holders and
lenders, and also buyers and sellers of assets both in and outside
of bankruptcy.
Mr. Currie serves as counsel for U.S. Office Products Company, the
country's third largest office supply business. USOP originally
faced more than $1 billion in debt, including over 7,000 creditor
claims, which Mr. Currie helped restructure.
He also served as debtors' counsel for satellite and
telecommunications provider Iridium, LLC. At the time of its
Chapter 11 filing, Iridium was the largest telecom bankruptcy on
record, though it would soon be overshadowed by the likes of
Global Crossing and WorldCom.
Mr. Currie estimates that he has negotiated and resolved more than
7,000 claims in his career, including administrative and priority
claims, while pursuing and defending over 2,000 preference
actions. That includes his role in litigation and mediating
several multi-million dollar actions. He has also managed an
estimated 300 reclamation claims.
Other noteworthy bankruptcies in which he has participated include
EXDS, Inc., Homelife Inc., Budget Group, Inc., Exide Corp., LTV
Steel Company, Bethlehem Steel Corp., Federal-Mogul Global,
HomeLife Corporation, National Steel Corporation, Hayes Lemmerz
International, Inc. and Ogden New York Services, Inc.
"Andrew is a great addition to our growing practice. He has a
plethora of experience on the national scene, handling every phase
of the Chapter 11 cycle and working in a variety of industries
that will continue to draw attention in 2008, including automotive
and steel, as well as retail, financial services and food
services," said Greg Cross, chair of Venable's Bankruptcy and
Creditors' Rights Group.
Mr. Cross noted that the bankruptcy group has been heavily engaged
in recent months, including assignments related to the collapse of
the subprime mortgage market. Mr. Cross himself has been
overseeing one of the largest individual asset workouts in the
country. "Obviously a great many sectors are under some stress
and we expect to field a lot of new work in the year ahead," Mr.
Cross said. "With his track record both in and out of litigation,
including debtor financing and bankruptcy-related transactions,
Andrew is certain to be right in the center of our practice."
Mr. Currie has written on and taught bankruptcy law since 2003 and
has been a guest lecturer on Chapter 11 and restructuring topics
at Georgetown's McDonough School of Business. He is a
contributing editor for Norton Bankruptcy Law and Practice and
contributed a chapter to a 2006 handbook on cross-border
restructurings and insolvencies. He has also written for the
American Bankruptcy Institute's ABI Journal. Mr. Currie has been
recognized as a top bankruptcy lawyer by both American Lawyer and
The Deal.
"Venable is a great fit for my practice," he said. "The firm has
built a strong bankruptcy and restructuring team, on the national
and regional levels, representing all the critical constituencies
in Chapter 11 matters. Venable has a well-balanced and
experienced group of corporate and litigation attorneys who can
provide excellent advice and support on the most challenging
restructuring proceedings."
Mr. Currie received his J.D. magna cum laude from Michigan State
University (1996) where he served as Managing Editor of the
Michigan State Law Review, and his B.A. from the University of
Michigan (1992).
About Venable LLP
Venable LLP -- http://www.Venable.com>www.Venable.com-- has
attorneys practicing in all areas of corporate and business law,
complex litigation, intellectual property and government affairs.
Venable serves corporate, institutional, governmental, nonprofit
and individual clients throughout the U.S. and around the world
from its headquarters in Washington, D.C. and offices in
California, Maryland, New York and Virginia.
* Chadbourne & Parke Names Six Partners for US, Russia & London
---------------------------------------------------------------
The international law firm of Chadbourne & Parke LLP named Shane
de Burca, Douglas Deutsch, Dmitry Gubarev, Julia Romanova and
Andrew Rosenblatt as counsel in the United States and the Russian
Federation, and Stefan Unna as partner in the London multinational
partnership, effective Jan. 1, 2008.
"These outstanding lawyers reflect the broad expertise and
geographic presence of Chadbourne," managing partner Charles
O'Neill, said. "They are helping to maintain the Firm's fast pace
in their practice areas and we congratulate them on their new
roles and responsibilities."
Mr. de Burca, corporate and insurance practices, New York, advises
domestic and foreign clients and financial institutions in
corporate and securities matters. His securities experience
includes the representation of numerous underwriters and issuers
in the sale of equity, debt and hybrid securities in both public
and private offerings.
Mr. de Burca also has significant experience in insurance industry
related corporate work such as acquisitions, financial products
and securities offerings. He graduated from University College,
Dublin, with a B.C.L., first class honors, in 1995, and he
received an LL.M. from Cornell Law School in 1997.
Mr. Deutsch, bankruptcy and financial restructuring practice, New
York, represents debtors, secured and unsecured creditors and
creditors' committees.
Mr. Deutsch graduated with a B.S. in 1991 from Drew University,
and he earned a J.D. in 1996 from St. John's University School of
Law, where he was editor-in-chief of the American Bankruptcy
Institute Law Review. He also received an LL.M. in 2001 from St.
John's University School of Law.
Mr. Deutsch served as a law clerk to the Hon. Leif M. Clark, U.S.
Bankruptcy Judge, Western District of Texas in 1996- 1997.
Mr. Gubarev, corporate and project finance practices, Moscow,
specializes in issues relating to finance and banking law and
capital markets transactions, including structured finance,
project finance and derivatives.
His work with Chadbourne has included advising multilateral
lenders, as well as Russian and western banks and companies on
various securitizations, syndicated loans, project finance
transactions, credit linked notes issues and other financings in
Russia and other CIS countries.
Mr. Gubarev received a law degree from Lomonosov Moscow State
University, Faculty of Law in 1998 and a Doctor of Laws in 2002
from the Diplomatic Academy of the Ministry of Foreign Affairs of
the Russian Federation.
Ms. Romanova, litigation, arbitration and bankruptcy practices,
Moscow, focuses her practice on litigation, arbitration,
corporate, bankruptcy and real estate matters. She advises
clients with regard to Russian foreign investment legislation and
regulations.
Ms. Romanova has worked with international multilateral lending
institutions on recovery and restructuring matters, including
rendering advice in connection with international arbitration
proceedings. She received a law degree, with honors, in 1996 from
Lomonosov Moscow State University, Faculty of Law.
Mr. Rosenblatt, bankruptcy and financial restructuring practice,
New York, has handled various bankruptcy issues, including the
representation of debtors in Chapter 11, advising borrowers and
lenders in out-of-court restructurings, secured and unsecured
lenders in Chapter 11 cases and foreign representatives in cross-
border ancillary proceedings.
He received a B.S. in 1994 from the State University of New York,
Binghamton University and a J.D. in 1997 from Hofstra University
School of Law, where he graduated with distinction and was a
member of the Hofstra Law Review.
Mr. Unna, project finance practice, London, has advised project
lenders and developers in the development and financing of power
and other energy infrastructure projects around the world
including Jordan, Nigeria, Pakistan, Poland, Uganda, Ukraine, the
United States and Yemen.
His development work includes the drafting and negotiation of EPC
contracts, power purchase agreements, fuel supply agreements and
maintenance arrangements for projects. His financing experience
includes extensive work with many multilateral institutions and
export credit development agencies as well as commercial lenders.
Mr. Unna received a B.A. in 1990 from Columbia University's
Columbia College and a J.D. in 1997 from the University of
California, Los Angeles School of Law, where he was executive
editor of the UCLA Law Review.
About Chadbourne & Parke LLP
Headquartered in New York City, Chadbourne & Parke LLP --
http://www.chadbourne.com/-- is a law firm that provides a full
range of legal services, including mergers and acquisitions,
securities, project finance, private funds, corporate finance,
energy, communications and technology, commercial and products
liability litigation, securities litigation and regulatory
enforcement, special investigations and litigation, intellectual
property, antitrust, domestic and international tax, insurance and
reinsurance, environmental, real estate, bankruptcy and financial
restructuring, employment law and ERISA, trusts and estates and
government contract matters. Major geographical areas of
concentration include Central and Eastern Europe, Russia and the
CIS, and Latin America. The firm has offices in New York,
Washington, DC, Los Angeles, Houston, Moscow, St. Petersburg,
Warsaw (through a Polish partnership), Kyiv, Almaty, Tashkent,
Beijing, and a multinational partnership, Chadbourne & Parke, in
London.
* Kroll Opens Grenada Office to Serve Eastern Caribbean Clients
---------------------------------------------------------------
Kroll opens new office in the Eastern Caribbean. Based in
Grenada, the office will service clients throughout the Eastern
Caribbean, providing a full range of risk consulting services,
including investigations, forensic accounting, asset tracing,
litigation support, insolvency and due diligence.
In addition to serving local and regional clients, Kroll's Eastern
Caribbean office will enhance the company's offshore investigative
capabilities on matters worldwide. It will also work closely with
Kroll's Corporate Advisory and Restructuring affiliates in the
Cayman Islands and the British Virgin Islands.
The office is led by two former Big Four accountants who possess
more than 20-years experience working in the Eastern Caribbean:
David A. Holukoff and Glen E. Harloff.
Mr. Holukoff has led numerous complex and high-profile engagements
in the region, specializing in offshore banking and financial
institution insolvency matters. He is an authority in identifying
fraudulent investment schemes and has acted on behalf of creditors
and other stakeholders in multi-jurisdictional insolvency
proceedings.
He has extensive experience in business restructuring, insolvency,
asset tracing and litigating support. Prior to joining Kroll, Mr.
Holukoff worked for more than 10 years with PricewaterhouseCoopers
in Grenada and Canada. He is a Chartered Accountant and a
Grenadian citizen.
Mr. Harloff, a forensic accountant and former law enforcement
officer, is a specialist in white-collar crime investigations. He
has extensive experience in the prevention, detection and
investigation of fraud, including insolvency/bankruptcy, secret
commissions/kickbacks, procurement fraud and other schemes.
Mr. Harloff has traced assets for numerous clients throughout
North America, the Caribbean, Europe, and Asia. Prior to joining
Kroll, he held senior positions at LECG and
PricewaterhouseCoopers. He also served for more than 20 years
with the Royal Canadian Mounted Police, including nine years as a
senior investigator in the commercial crimes investigation unit.
Mr. Harloff is a Certified General Account and a Certified
Forensic Investigator.
"More and more engagements - whether out of London, New York,
Miami or Hong Kong - have significant 'offshore' components, and
usually in the Caribbean," Sam Anson, Kroll's regional managing
director for Latin America and the Caribbean, said. "David's and
Glen's expertise in navigating offshore transactions in the region
will strengthen our capabilities there."
"With their local contacts and knowledge of the islands, David and
Glen will give an immediate boost to our ability to serve clients
throughout the Eastern Caribbean," Thomas V. Cash, executive
managing director for Kroll in Miami, added. "In a crisis,
companies need 'boots on the ground,' and Kroll now has an instant
response capability from Trinidad up the chain to Jamaica."
Kroll'ss Eastern Caribbean office is located at: the Netherlands
Building - Grand Anse, St. George's, Grenada, W.I. The main phone
number is (473) 439-7999.
About Kroll
Headquartered in New York, Kroll -- http://www.kroll.com/--is a
risk consulting company that provides a range of investigative,
intelligence, financial, security and technology services to help
clients reduce risks, solve problems and capitalize on
opportunities. The company has offices in more than 65 cities in
over 33 countries, Kroll has a multidisciplinary corps of more
than 4,800 employees and serves a clientele of law firms,
financial institutions, corporations, non-profit institutions,
government agencies, and individuals. It is a subsidiary of Marsh
& McLennan Companies Inc. (NYSE: MMC) the professional services
firm.
Kroll serves individual, business, public sector and non-profit
clients in Latin America through its regional headquarters in
Miami and offices in Brazil, Mexico, Argentina, Colombia, and
Grenada -- http://www.krolllatinamerica.com/-- Core services
include business investigations and intelligence; forensic
accounting; business valuation; corporate turnaround; employee
screening; and electronic discovery.
* M. Mann Joins Sheppard Mullin as Finance and Bankruptcy Partner
-----------------------------------------------------------------
Margaret M. Mann, Esq., has joined the San Diego office of
Sheppard Mullin Richter & Hampton LLP as partner in the firm's
Finance and Bankruptcy practice group. Ms. Mann most recently led
Heller Ehrman's Restructuring and Insolvency practice and was the
firm's National Hiring Chair.
Ms. Mann has significant experience in large, complex domestic and
international insolvency proceedings on behalf of creditors,
fiduciaries, borrowers and other interested parties, with
expertise in the franchise and tax credit syndication industries.
She is skilled in negotiating, documenting and litigating
complicated financial transactions, particularly in the technology
field and in regard to financial contracts such as swaps, repo
agreements and forward contracts.
"[Ms. Mann] is one of the preeminent bankruptcy attorneys in San
Diego and is well known in bankruptcy circles nationally. She is
smart, affable and industrious," said Guy Halgren, chairman of the
firm. "The timing of Margaret joining us is perfect, as San Diego
partner Laura Taylor was recently appointed to the U.S. Bankruptcy
Court."
"With more than 25 years of experience, [Ms. Mann] adds
significantly to our bankruptcy practice," commented Alan Martin,
the head of the firm's Finance and Bankruptcy practice group. "In
the current business climate where restructurings and insolvencies
are on the upswing, [Ms. Mann]'s commercial litigation and
bankruptcy expertise is of even greater value to clients."
Commented Ms. Mann, "Sheppard Mullin occupies a strategic position
in California and beyond, and offers the support needed to handle
sophisticated bankruptcy matters. I am greatly impressed by the
firm's dedication to client service and its reputation as a 'go-
to' firm for banking and restructuring clients."
Ms. Mann's recent, representative matters include:
-- In re First Magnus (represented agent for syndicate on
$100 million repurchase facility);
-- Washington Mutual Capital Corporation (represented in
repurchase trades);
-- enforced rights for major tax credit syndicator in In re
500 West Broadway and In re St Casimir Development LLP;
-- In re Magis Networks (debtor's counsel in wireless video
Chapter 11 with technology sold in 45 days);
-- In re PinnFund (represented preference recipient and
obtained $4 million summary judgment);
-- Commercial Money Center (creditor counsel in $400 million
failed pooled investment fund); and
-- In re Cimm's Inc. Consolidated Case (debtors' counsel
in $100 million franchise case, successfully reorganized
in one year).
Ms. Mann earned a J.D. from the University of Southern California
School of Law in 1981 and was a member of the Hale Moot Court
Honors Program. She received a B.A. in finance, with distinction,
from University of Illinois in 1978. Ms. Mann is a fellow in the
American College of bankruptcy.
About Sheppard Mullin
Sheppard Mullin Richter & Hampton LLP --
http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm
with more than 520 attorneys in 10 offices located throughout
California and in New York, Washington, D.C. and Shanghai. The
firm's California offices are located in Los Angeles, San
Francisco, Santa Barbara, Century City, Orange County, Del Mar
Heights and San Diego. Founded in 1927 on the principle that the
firm would succeed only if its attorneys delivered prompt, high
quality and cost-effective legal services, Sheppard Mullin
provides legal counsel to U.S. and international clients.
Companies turn to Sheppard Mullin to handle a full range of
corporate and technology matters, high stakes litigation and
complex financial transactions. In the U.S., the firm's clients
include more than half of the Fortune 100 companies.
Sheppard Mullin has 80 attorneys based in its San Diego offices.
The firm's Finance and Bankruptcy practice group includes more
than 70 attorneys firmwide.
* Proskauer Rose Outlines Litigation & Regulation Top Issues
------------------------------------------------------------
The International Practice Group of Proskauer Rose LLP has
released its "2008 Trends and Developments in International Legal
Practice". The Report forecasts and analyzes the most significant
legal issues currently facing businesses operating globally,
focuses on the practical implications of these trends, and
discusses best practices for dealing with them over the coming
year.
The Trends Report follows the highly successful launch of
"Proskauer on International Litigation and Arbitration: Managing,
Resolving, and Avoiding Cross-Border Business and Regulatory
Disputes," the firm's e-Guide on international litigation,
proceedings, and practice.
"The accelerating pace and increasing complexity in each of the
three major areas of our focus - international litigation and its
alternatives, regulatory and investigative proceedings, and
transactional and corporate practice - demand constant vigilance
by clients and other companies in the international sphere," Louis
M. Solomon, co-chair of Proskauer's Litigation Department and
editor-in-chief of the Proskauer e-Guide. "We track these trends
and developments and will continue to offer our observations to
our clients and interested practitioners so that businesses can
prepare themselves and adapt."
How to deal with these and other important trends will be
addressed in forthcoming updates to the Proskauer e-Guide, well as
by Proskauer's International Practice Group at its Major Trends
Conference 2008, being held in Paris in Spring 2008.
Among the most significant trends identified by Proskauer's
International Practice Group are:
-- increased litigation of international controversies in
the United States. In the last five years, there has
been an increase in attempts by parties operating in
international commerce to gain access to US courts to
resolve disputes. Despite some noteworthy developments
to the contrary, the IPG forecasts that this trend will
continue, particularly in relation to forum-related
issues such as personal and subject matter jurisdiction,
venue, and choice of law. The Trends Report concludes
that it is imperative that companies operating
internationally consider the complex challenges and
opportunities of simultaneously managing litigation in
the US and elsewhere, including issues of privilege,
evidence-gathering and taking, going to trial in the US,
and how to structure legal relations and deals and to
manage disputes with a keen eye to enforcing, or
successfully resisting enforcement of, awards and
judgments.
-- increased use of alternative dispute resolution
techniques other than in-court litigation and
international arbitration. With in-court litigation and
arbitrations being seen as too costly and protracted,
many clients are increasingly turning to other systems of
dispute resolution. The Trends Report sees this on a
large scale for disputes affecting large numbers of
businesses or individuals. The rapid expansion of
mediation techniques, staged claims procedures, and
"rent-a-judge" programs will continue apace in 2008.
-- increased risk faced by international companies of
simultaneous, coordinated regulatory or enforcement
proceedings in multiple countries. The Antitrust
Division of the US Department of Justice and the US
Securities and Exchange Commission continue to be very
active in investigating and prosecuting alleged
international antitrust and securities violations. The
advent of multiple proceedings increases the risks to
companies operating in international and global markets -
a phenomenon equally prevalent for US-based clients and
for clients in Europe and Asia. As of November 2007, for
example, the DOJ reported that there were 56 sitting
grand juries investigating suspected international cartel
activity, which accounted for over 40% of the DOJ's
ongoing grand jury investigations. Meanwhile, US
regulators are increasingly working cooperatively with
securities and antitrust authorities in numerous other
jurisdictions and regulators outside the US are taking a
more active role in investigating and punishing various
types of anticompetitive behavior. The result is that
international entities are facing more parallel
investigations, cooperative investigations, and, in many
cases, joint investigations by the DOJ or SEC and
regulators in other jurisdictions, while US entities will
likely have more than just the DOJ or SEC to contend
with. The Trends Report predicts that these efforts will
intensify in the coming year, as will the consequential
phenomenon of follow-on private or class action
litigation in the US and elsewhere and associated
internal investigations based on the same allegations as
the regulators are investigating.
-- the continued "Americanization" of non-US legal systems.
This trend will continue in 2008. Noteworthy examples
include:
-- the advent of collective litigation or class actions
in Europe. Europe's legal framework is beginning to
adopt the US approach to litigation of individual
claims in a collective or class-based system. Even as
the European Union considers measures to facilitate
such lawsuits, the threat of international litigation
grows. The risk of these types of actions is most
pronounced in the areas of product liability,
competition, intellectual property, and shareholder
rights/corporate governance.
-- proposed reforms to civil law on remedies available to
civil litigants. The reform of contract law in Europe
is likely to continue. One particular area of focus
is in France, where a preliminary draft of reforms to
civil remedies is being considered, among them the
introduction of punitive damages. Should this become
law, many other civil law jurisdictions, both in the
EU and worldwide, will likely see fundamental changes
in the manner in which lawsuits are brought, defended,
and resolved.
-- the ramifications of the subprime mortgage crisis and
accompanying credit crunch in the context of the
drafting, enforcement, and resolution of disputes over
MAC clauses. The Trends Report forecasts that the
trickle of litigation stemming from the write-downs that
big banks have taken on their portfolios, the cross-
border cash infusions that have resulted, and the impact
in the mergers and acquisitions sphere, where financing
has dried up, will soon be a torrent. Affected companies
must brace themselves for the ensuing litigation and
regulatory proceedings. Relatedly, in addition to the
drying up of financing for acquisitions as a result of
the fallout from the credit crunch, some buyers have
asserted material adverse change, with some then
renegotiating deal terms such as purchase price and
alternative investment transactions, and other deals
going into litigation. This trend is extraordinary and
unresolved - MAC is typically a pro-seller standard, but
there is relatively little case law regarding it, leading
to uncertainty as to the outcome of related litigation.
As the Trends Report observes, many private equity
acquisitions effectively capped damages at two to three
percent of purchase price through a reverse breakup fee,
adding to buyer leverage in negotiation. There is likely
to be increased in or out-of-court dispute resolution
activity in this area in the coming year.
About Proskauer Rose
Headquartered in New York City, Proskauer Rose LLP --
http://www.proskauer.com/-- is a law firms that provides a
variety of legal services to clients throughout the United States
and around the world from offices in New York, Los Angeles,
Washington, D.C., Boston, Boca Raton, Newark, New Orleans, Paris
and Sao Paulo. Founded in 1875, the firm has experience in all
areas of practice important to businesses and individuals,
including corporate finance, mergers and acquisitions, general
commercial litigation, private equity and fund formation, patent
and intellectual property litigation and prosecution, labor and
employment law, real estate transactions, bankruptcy and
reorganizations, trusts and estates, and taxation. Its clients
span industries including chemicals, entertainment, financial
services, health care, information technology, insurance,
internet, lodging and gaming, manufacturing, media and
communications, pharmaceuticals, real estate investment, sports,
and transportation.
* Sallie Mae's Credit Quality Worsens as Risk Indicators Rise
-------------------------------------------------------------
Student Loan Marketing Corp.'s credit-default swaps rose by 20
basis points to 430 points, indicating increased investor
skepticism on the student lender's credit quality, Bloomberg News
reports, citing Phoenix Partners Group in New York.
The company's credit risk rose despite SLM Corp., nicknamed Sallie
Mae, appointing Anthony P. Terracciano and John F. Remondi to
chairmanship positions. Bloomberg says that Sallie Mae may have
to terminate some of its loan services, as it tries to secure
$30 billion in debt refinancing.
"The company has been in meltdown mode the past few weeks,"
Kathleen Shanley, Gimme Credit LLC analyst in Chicago, told
Bloomberg in an E-mail message. "The company still faces
significant operating and financial challenges."
Based in Reston, Virginia, SLM Corporation --
http://www.salliemae.com/-- through its subsidiaries, provides
education finance in the United States. It originates and holds
student loans by providing funding, delivery, and servicing
support for education loans through its participation in the
federal family education loan program (FFELP) and through offering
non-federally guaranteed private education loans. It also engages
in debt management operations business, which provides a range of
accounts receivable and collections services, including student
loan default aversion services, defaulted student loan portfolio
management services, contingency collections services for student
loans and other asset classes, and accounts receivable management
and collection for purchased portfolios of receivables.
* Fitch Expects Continued Weakness in Mortgage and Housing Markets
------------------------------------------------------------------
Fitch Ratings expects continued weakness in the U.S. mortgage and
housing markets in 2008, which is likely to further contribute to
a slowdown in the national economy and exert downward pressure on
public finance credits. According to its recently issued special
report titled 'U.S. Public Finance Credit Trends for 2008,' Fitch
believes there will be fiscal pressures due to slower growth and,
in some cases reductions, in government revenues. As noted in
earlier reports from 2007, Fitch expects revenue pressures will
not be uniform and are likely to hit particularly hard those
issuers that enjoyed the fastest growth in the decade.
In the coming year, Fitch is also concerned with expense pressures
facing governments, particularly in health care, energy, and cost
of capital. Additionally, Fitch notes the risk of isolated cases
of investment losses or compromised liquidity on certain short-
term securities and counterparty risk to certain financial
institutions.
Fitch notes that many state and local governments are entering
this challenging operating environment with significant reserves
accumulated during the past several years of strong economic
growth, providing near-term flexibility. Fitch expects that most
issuers, particularly those that are less affected by the housing
slowdown, will likely be able to perform through a downturn at
levels consistent with their existing ratings. However, those
governments that have incorporated prior strong revenue growth
into their operations with the expectations that it would continue
will have to develop additional revenue sources or make
adjustments in services provided to avoid deterioration in their
credit quality.
* 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 William Street Associates, L.P.
Bankr. D. N.J. Case No. 07-29208
Chapter 11 Petition filed December 28, 2007
See http://bankrupt.com/misc/njb07-29208.pdf
In Re 46 South Arlington Associates
Bankr. D. N.J. Case No. 07-29207
Chapter 11 Petition filed December 28, 2007
Filed as Pro Se
In Re Real Estate Short Sales, Inc.
Bankr. C.D. Calif. Case No. 08-10026
Chapter 11 Petition filed January 2, 2008
See http://bankrupt.com/misc/cacb08-10026.pdf
In Re Emerald Entertainment, L.L.C.
Bankr. D. Conn. Case No. 08-30007
Chapter 11 Petition filed January 2, 2008
See http://bankrupt.com/misc/ctb08-30007.pdf
In Re John K. Aziz
Bankr. D. Md. Case No. 08-10092
Chapter 11 Petition filed January 2, 2008
See http://bankrupt.com/misc/mdb08-10092.pdf
In Re Gerald William Filice
Bankr. E.D. Calif. Case No. 08-20087
Chapter 11 Petition filed January 2, 2008
Filed as Pro Se
In Re Michael James Luther
Bankr. D. Md. Case No. 08-10011
Chapter 11 Petition filed January 2, 2008
Filed as Pro Se
In Re Bartholomew Andrew Butler
Bankr. D. Md. Case No. 08-10069
Chapter 11 Petition filed January 2, 2008
Filed as Pro Se
In Re Advanced Artistic Facial Plastic Surgery of Texas, P.A.
Bankr. W.D. Tex. Case No. 08-50016
Chapter 11 Petition filed January 2, 2008
See http://bankrupt.com/misc/txwb08-50016.pdf
In Re The Monaco Collection, L.L.C.
Bankr. D. Utah Case No. 08-20021
Chapter 11 Petition filed January 2, 2008
See http://bankrupt.com/misc/utb08-20021.pdf
In Re Remnant Evangelistic Center
Bankr. S.D. Ala. Case No. 08-10016
Chapter 11 Petition filed January 3, 2008
See http://bankrupt.com/misc/alsb08-10016.pdf
In Re Iliana Mercedes Saldana
Bankr. C.D. Calif. Case No. 08-10074
Chapter 11 Petition filed January 3, 2008
See http://bankrupt.com/misc/cacb08-10074.pdf
In Re J.&M. Development, L.L.C.
Bankr. D. Mass. Case No. 08-10052
Chapter 11 Petition filed January 3, 2008
See http://bankrupt.com/misc/mab08-10052.pdf
In Re El Paraiso Dorado, Inc.
Bankr. D. Neb. Case No. 08-80014
Chapter 11 Petition filed January 3, 2008
See http://bankrupt.com/misc/neb08-80014.pdf
In Re Arthur Francis Powers
Bankr. E.D. Calif. Case No. 08-20122
Chapter 11 Petition filed January 3, 2008
Filed as Pro Se
In Re Village Food Markets, Inc.
Bankr. W.D. Wash. Case No. 08-10022
Chapter 11 Petition filed January 3, 2008
Filed as Pro Se
In Re Charles I. Williams, II, D.D.S., P.A.
Bankr. N.D. Tex. Case No. 08-30035
Chapter 11 Petition filed January 3, 2008
See http://bankrupt.com/misc/txnb08-30035.pdf
In Re Valerie Sue Miller
Bankr. N.D. Fla. Case No. 08-10003
Chapter 11 Petition filed January 4, 2008
See http://bankrupt.com/misc/flnb08-10003.pdf
In Re Coastal Excavating Services, Inc.
Bankr. D. Mass. Case No. 08-10083
Chapter 11 Petition filed January 4, 2008
See http://bankrupt.com/misc/mab08-10083.pdf
In Re Rainbow Popcorn Co., Inc.
Bankr. D. Neb. Case No. 08-40014
Chapter 11 Petition filed January 4, 2008
See http://bankrupt.com/misc/neb08-40014.pdf
In Re Omelio, L.L.C.
Bankr. D. N.J. Case No. 08-10129
Chapter 11 Petition filed January 4, 2008
See http://bankrupt.com/misc/njb08-10129.pdf
In Re Maria Cristina Bautista
Bankr. N.D. Calif. Case No. 08-50023
Chapter 11 Petition filed January 4, 2008
Filed as Pro Se
In Re Paul C. Hollis
Bankr. D. Maine Case No. 08-20011
Chapter 11 Petition filed January 4, 2008
Filed as Pro Se
In Re Paul Steven Mead
Bankr. N.D. Calif. Case No. 08-10009
Chapter 11 Petition filed January 4, 2008
Filed as Pro Se
In Re LaScala, L.L.C.
Bankr. E.D. Va. Case No. 08-10042
Chapter 11 Petition filed January 4, 2008
See http://bankrupt.com/misc/vaeb08-10042.pdf
In Re Matthew Jay Mullett
Bankr. D. Colo. Case No. 08-10108
Chapter 11 Petition filed January 5, 2008
See http://bankrupt.com/misc/cob08-10108.pdf
In Re P. Rye Trucking, Inc.
Bankr. E.D. Ark. Case No. 08-10094
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/akeb08-10094.pdf
In Re Pirates Marine, Inc.
Bankr. N.D. Ala. Case No. 08-80035
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/alnb08-80035.pdf
In Re Allied Impex, Inc.
Bankr. S.D. Fla. Case No. 08-10104
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/flsb08-10104.pdf
In Re Public Safety Communications, Inc.
Bankr. N.D. Ill. Case No. 08-00216
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/ilnb08-00216.pdf
In Re Prentice C. Stovall, Sr.
Bankr. N.D. Ind. Case No. 08-40009
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/innb08-40009.pdf
In Re Cytech Computers & Internet Solutions, Inc.
Bankr. W.D. N.C. Case No. 08-10012
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/ncwb08-10012.pdf
In Re Kefallonia Development Corp.
Bankr. E.D. N.Y. Case No. 08-40067
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/nyeb08-40067.pdf
In Re W.F.B. Restaurants, L.L.C.
Bankr. S.D. N.Y. Case No. 08-22018
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/nysb08-22018.pdf
In Re J.&J. Real Estate Development, Inc.
Bankr. E.D. Penn. Case No. 08-10131
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/paeb08-10131.pdf
In Re Affordable Dentures-Hazleton, P.C.
Bankr. M.D. Penn. Case No. 08-50024
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/pamb08-50024.pdf
In Re Mountain Top Management, Inc.
Bankr. W.D. Penn. Case No. 08-20123
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/pawb08-20123.pdf
In Re Michael R. Spreng
Bankr. N.D. Ohio Case No. 08-10059
Chapter 11 Petition filed January 7, 2008
Filed as Pro Se
In Re David Lee Namay
Bankr. S.D. W.V. Case No. 08-20002
Chapter 11 Petition filed January 7, 2008
See http://bankrupt.com/misc/wvsb08-20002.pdf
In Re Stacia Christine Hill
Bankr. D. Ariz. Case No. 08-00164
Chapter 11 Petition filed January 8, 2008
See http://bankrupt.com/misc/azb08-00164.pdf
In Re Pavelic Holdings, L.L.C.
Bankr. C.D. Calif. Case No. 08-10265
Chapter 11 Petition filed January 8, 2008
See http://bankrupt.com/misc/cacb08-10265.pdf
In Re Yehudah O. Younessian
Bankr. N.D. Calif. Case No. 08-30019
Chapter 11 Petition filed January 8, 2008
See http://bankrupt.com/misc/canb08-30019.pdf
In Re Bowlers Country Club, Inc.
Bankr. N.D. Ind. Case No. 08-30026
Chapter 11 Petition filed January 8, 2008
See http://bankrupt.com/misc/innb08-30026.pdf
In Re Bison Plumbing, Inc.
Bankr. E.D. Mich. Case No. 08-40370
Chapter 11 Petition filed January 8, 2008
See http://bankrupt.com/misc/mieb08-40370.pdf
In Re Asado Brazilian Grill, Inc.
Bankr. D. N.M. Case No. 08-10041
Chapter 11 Petition filed January 8, 2008
See http://bankrupt.com/misc/nmb08-10041.pdf
In Re Original Stylin', Inc.
Bankr. W.D. Penn. Case No. 08-20134
Chapter 11 Petition filed January 8, 2008
See http://bankrupt.com/misc/pawb08-20134.pdf
In Re Juan Ramon Febres Medina
Bankr. D. P.R. Case No. 08-00068
Chapter 11 Petition filed January 8, 2008
See http://bankrupt.com/misc/prb08-00068.pdf
In Re Robert Bruce Gittelson
Bankr. C.D. Calif. Case No. 08-10136
Chapter 11 Petition filed January 8, 2008
Filed as Pro Se
In Re Travarla Saffore
Bankr. C.D. Calif. Case No. 08-10278
Chapter 11 Petition filed January 8, 2008
Filed as Pro Se
*********
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, Jason A. Nieva,
Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez,
Tara Marie A. Martin, John Paul C. Canonigo, Joseph Medel C.
Martirez, Philline P. Reluya, and Peter A. Chapman, Editors.
Copyright 2008. All rights reserved. ISSN: 1520-9474.
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