/raid1/www/Hosts/bankrupt/TCR_Public/080507.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, May 7, 2008, Vol. 12, No. 108
Headlines
AMERICAN HOME: Deadline for Assumed Contract Claims Set for May 7
AMPEX CORP: Wants Court to Deny Committee Access to Information
ARVINMERITOR INC: Spins Off Light Vehicle Biz to Shareholders
ARVINMERITOR: Light Vehicle's Spinoff Cues Fitch's Negative Watch
ARVINMERITOR INC: S&P Holds 'B+' Rating on Light Vehicle Spinoff
AVENSYS CORP: Posts $419,824 Net Loss in 2nd Quarter Ended Dec. 31
BCAP LLC: Moody's Cuts 60 Tranches' Ratings From Six Alt-A Deals
BGF INDUSTRIES: Sept. 30 Balance Sheet Upside-Down by $28.5 MM
BIRCH MOUNTAIN: Amex Sends Notice of Noncompliance on Deficiencies
BLAST ENERGY: March 31 Balance Sheet Upside-Down by $3,006,117
BLOUNT INC: S&P's 'BB- Rating Unaffected by Carlton Acquisition
BLUE WATER: Shortens Plan Schedule to Meet Customers' Deadline
BLUE WATER: Hearing on Case Conversion Set for May 12
BON-TON STORES: Earns $11.6 Million in Fiscal Year Ended Feb. 2
BROOKLYN PSYCHIATRIC: Case Summary & 16 Largest Unsec. Creditors
CASH SYSTEMS: Has Until July 31 to Comply with Nasdaq Criteria
CEDAR MANAGEMENT: Files For Chapter 11 Protection in California
CHARMING SHOPPES: Moody's Withdraws Ratings for Business Reasons
CHURCH & DWIGHT: Buys Del Pharma Biz from Coty Inc. at $380 Mil.
CHURCH & DWIGHT: Moody's Keeps 'Ba1' Ratings on Del Pharma Deal
CHURCH & DWIGHT: Stable Performance Cues S&P to Lift Rating to BB+
CITIGROUP MORTGAGE: Moody's Downgrades Ratings on 45 Tranches
CLEBURNE & TM: Voluntary Chapter 11 Case Summary
COMPASS MINERALS: Planned Note Redemption Cues S&P's Pos. Watch
COUNTRYWIDE FINANCIAL: Fitch Puts All Ratings Under Evolving Watch
DELPHI CORP: Plastech Can Return Tooling to Delphi Automotive
DELPHI CORP: Court Extends Exclusive Plan-Filing Period to Aug. 31
DELPHI CORP: GM's Charges on Delphi Issues Reach $8.3 Billion
DIAMOND GLASS: Can Hire Getzler Henrich as Financial Advisor
DIAMOND GLASS: Court Okays NatCity as Investment Banker
DR HORTON: Posts $1 Billion Net Loss in Quarter Ended March 31
DURA AUTOMOTIVE: Court Approves Merger with Automotive Aviation
DURA AUTOMOTIVE: Wants to Expand Assessment Tech's Scope of Work
EDUCATION MANAGEMENT: $22.5MM Add'l Facility Cues S&P to Hold Rtng
EOS AIRLINES: Wants to Employ Squire Sanders as Bankruptcy Counsel
EVIVA COFFEE: Case Summary & 20 Largest Unsecured Creditors
FIRST MARBLEHEAD: To Trim Down Operating Cost in Student Loan Unit
FGIC CORP: Negotiates with Potential Investors on Revamp Proposals
FORD MOTOR: CAW Union Members Ratify New Labor Agreement
FRENCH LICK: Completed Exchange Cues Moody's Rating Lift to 'Caa3'
GENERAL MOTORS: Charges on Delphi Corp. Issues Reach $8.3 Billion
GENERAL MOTORS: Plastech Inks MOU with GM for Exit Financing
GMAC LLC: Home Mortgage Unit Unable to Pay Debts Due June 2008
HEALTH NET: Moody's Reviews 'Ba2' Rating After First Qtr. Results
HILEX POLY: Files for Chapter 11 Protection in Delaware
HILEX POLY: Case Summary & 20 Largest Unsecured Creditors
HOMBANC CORP: Files Joint Chapter 11 Plan of Liquidation
HOMEBANC CORP: Classification and Treatment of Claims Under Plan
JO-ANN STORES: Moody's Changes Outlook to Positive; Holds Ratings
JONES APPAREL: Moody's Reviews 'Ba1' Rating for Possible Cuts
JPMORGAN CHASE: S&P Affirms Ratings on 13 Certificate Classes
KG LEGACY: Voluntary Chapter 11 Case Summary
KIMBALL HILL: Section 341 Meeting of Creditors Slated for June 19
KIMBALL HILL: U.S. Trustee Appoints Seven-Member Creditors Panel
KIMBALL HILL: Wants to Hire Kirkland & Ellis as Bankr. Counsel
LEHMAN MORTGAGE: Higher Delinquencies Cues Moody's 28 Rating Cuts
LINENS N THINGS: Gets Limited Access to Lenders' Cash Collateral
LINENS N THINGS: Noteholders Threaten to Challenge DIP Facility
LEXINGTON PRECISION: Seven Members Appointed to Creditors' Panel
LEXINGTON PRECISION: Court Okays Weil Gotshal as Bankr. Counsel
MARATHON HEALTHCARE: Wants to Hire Rogin Nassau as Counsel
MASONITE INT'L: Moody's Cuts Debt Ratings on Revenue Contraction
MCJUNKIN RED: S&P Assigns 'B+' Corporate Credit Rating
MEDIANEWS GROUP: Weak Sales Cues Moody's Corp. Rating Cut to 'B3'
MONITOR OIL: Global Maritime & Adshead Sued for Contract Breach
MUTUAL SAVINGS: AM Best Lifts Rtng. to B+(Good) From C++(Marginal)
NEWFIELD EXPLORATION: Fitch Holds Ratings on $425MM Notes Issuance
NEWFIELD EXPLORATION: Moody's Puts 'Ba3' Rating on $600 Mil. Notes
NUTRITIONAL SOURCING: Supermercados Buys Assets For $29.5 Million
NUTRITIONAL SOURCING: Has Until July 2 to File Chapter 11 Plan
NVIDIA CORP: Court Rejects Trustee's Claim for $100 Million
OXFORD INDUSTRIES: Moody's Reviews Ratings for Possible Downgrade
PACE UNIVERSITY: Moody's Keeps 'Ba1' Ratings on MBIA Insured Bonds
PANAVISION INC: Weakening Liquidity Prompts Moody's Rating Reviews
PITG GAMING: Moody's Ratings Unmoved by Change on Facility's Terms
PITG GAMING: S&P Lifts Ratings After Changes on Proposed Structure
PLASTECH ENGINEERED: To Close Shreveport Manufacturing Plant
PLASTECH ENGINEERED: Can Return Tooling to Delphi Automotive
POLYPORE INT'L: Moody's Lifts Ratings to 'B2' on Reduced Leverage
PRC LLC: Files Amended Chapter 11 Plan and Disclosure Statement
PRC LLC: Discloses Various Analysis Under Chapter 11 Plan
PRC LLC: Verizon and Affiliates Balk at Disclosure Statement
PREMAIR INC: Section 341(a) Meeting Slated for Friday
PREMAIR INC: Wants to Hire William Tucker as General Counsel
R&G FINANCIAL: Fitch Drops Ratings to 'CC' & Ceases Coverage
REEDEN CAPITAL: Case Summary & 19 Largest Unsecured Creditors
RESIDENTIAL CAPITAL: Unable to Pay Debts Due June 2008
ROCKVILLE CDO: Poor Credit Quality Cues Moody's Rating Downgrades
SEE WHY GERARD: Didn't Dispute Court Decision to Dismiss Case
SOLAR COSMETICS: Files Chapter 11 Petition; Gets $1.9 Mil. Loan
SOLAR COSMETIC: Case Summary & 20 Largest Unsecured Creditors
SPRINT NEXTEL: Considers Sale or Spin Off of Nextel Business
SPRINT NEXTEL: Nears $12 Billion Joint Venture with Clearwire
SUNCREST LLC: Trustee Appoints Seven-Members to Creditors Panel
SUNCREST LLC: Committee Panel Wants Plan-Filing Periods Ended
TBW MORTGAGE: Moody's Cuts Ratings on 36 Tranches on Delinquencies
TLB EQUIPMENT: Case Summary & Four Largest Unsecured Creditors
UAL CORP: Lenders Approve Amendment to $1.5BB Credit Facility
VALLEJO CITY: Must File for Bankruptcy, City Manager Advises
VILLAGE HOTEL: Ritz-Carlton Opposes Conversion or Dismissal Plea
WHITING PETROLEUM: $365MM Uinta Deal Won't Affect S&P's BB- Rating
WIRELESS PARTNERS: Case Summary & 19 Largest Unsecured Creditors
* Fitch Says Health of Vehicle Market Is A Good Indicator of Loss
* S&P Says LOC-Backed Debt Became Increasingly Popular in 2007
* Five Bankruptcy Attorneys Join Morrison & Foerster in New York
* Reed Smith Names A. Sussman as Corporate & Securities Partner
* Upcoming Meetings, Conferences and Seminars
*********
AMERICAN HOME: Deadline for Assumed Contract Claims Set for May 7
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The closing of the sale of the mortgage loan servicing business of
American Home Mortgage Investment Corp. and its debtor-affiliates
to Wilbur L. Ross' AH Mortgage Acquisition Co., Inc., was
consummated on April 11, 2008. Pursuant to the parties' Asset
Purchase Agreement and the sale order of the U.S. Bankruptcy Court
for the District of Delaware, the Debtors assumed and assigned or
transferred certain unexpired leases, license agreements and
executory contracts to AHM Acquisition.
Consequently, the Debtors notified all parties-in-interest that
the deadline for filing any claim by a counterparty to an Assumed
Contract is on May 7, 2008.
As reported by the Troubled Company Reporter on May 5, AH Mortgage
Acquisition informed Judge Christopher Sontchi that the closing of
the sale of the mortgage loan servicing business of the Debtors
has occurred. The Court approved the sale of the mortgage loan
servicing business to AHM Acquisition for about $500,000,000,
pursuant to an Asset Purchase Agreement, under a two-stage closing
process. The Initial Closing occurred on Nov. 16, 2007.
Under the APA, the Debtors operated the Servicing Business for
the economic benefit and risk of AHM Acquisition pending the
final closing. To fund the servicing operations in the interim,
the Debtors entered into a $50,000,000 Debtor-in-Possession Loan
and Security Agreement, which was later amended to increase the
financing commitment to $100,000,000.
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 U.S. Bankruptcy Court for the District of Delaware extended
the exclusive periods for American Home Mortgage Investors Corp.
and its debtor-affiliates to file a plan of reorganization through
June 2, 2008; and solicit and obtain acceptances for that plan
through July 31, 2008.
(American Home Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AMPEX CORP: Wants Court to Deny Committee Access to Information
---------------------------------------------------------------
Ampex Corporation and its debtor-affiliates ask the Hon. Arthur J.
Gonzalez of the U.S. Bankruptcy Court for the Southern District of
New York to prohibit the Official Committee of Unsecured Creditors
from accessing confidential and other non-public proprietary
information of the Debtors.
Rachel C. Strickland, Esq., at Willkie Farr & Gallagher LLP in
New York, say the distribution of confidential information --
including compensation levels and other employee information --
to the Committee could have serious harm to the Debtors' estates.
The public disclosure of this information may cause other problems
for the Debtors, Ms. Strickland adds.
A hearing is set for May 20, 2008, at 10:00 a.m., to consider
approval of the Debtors' request. The hearing will took place at
Courtroom 523, One Bowling Green in New York.
Objections, if any, are due May 16, 2008, at 4:00 p.m.
About Ampex
Headquartered in Redwood City, California, Ampex Corp. --
http://www.ampex.com/-- (Nasdaq:AMPX) is a licensor of visual
information technology. The company has two business segments:
Recorders segment and Licensing segment. The Recorders segment
primarily includes the sale and service of data acquisition and
instrumentation recorders (which record data and images rather
than computer information), and to a lesser extent mass data
storage products. The Licensing segment involves the licensing
of intellectual property to manufacturers of consumer digital
video products through their corporate licensing division.
On March 30, 2008, Ampex Corp. and six affiliates filed for
protection under Chapter 11 of the Bankruptcy Code with the U.S.
Bankruptcy Court for the Southern District of New York (Case
Nos. 08-11094 through 08-11100). Matthew Allen Feldman, Esq.,
and Rachel C. Strickland, Esq., at Willkie Farr & Gallagher LLP,
represents the Debtors in their restructuring efforts. The
Debtors have also retained Conway Mackenzie & Dunleavy as their
financial advisors. In its schedules of assets and liabilities
filed with the Court, Ampex Corp. disclosed total assets of
$9,770,089 and total debts of $82,488,054.
The Debtors have nine foreign affiliates that are incorporated
in seven countries -- one each in the United Kingdom, Japan,
Belgium, Colombia and Brazil and two each in Germany and Mexico.
With the exception of the affiliates located in the U.K. and
Japan, none of the other foreign affiliates conduct meaningful
business activity. As of March 30, 2008, none of the foreign
affiliates have commenced insolvency proceedings.
ARVINMERITOR INC: Spins Off Light Vehicle Biz to Shareholders
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The board of directors of ArvinMeritor, Inc. approved a plan to
spin off its Light Vehicle Systems business to ArvinMeritor
shareholders, with the Commercial Vehicle Systems business
remaining with ArvinMeritor.
"The plan to separate our two businesses is the result of a
comprehensive strategic review to enhance the company's long-term
value for our shareholders," Chip McClure, chairman, CEO and
president, said. "We are confident that this transaction will not
only unlock shareholder value, but will also significantly
strengthen the competitive positions of both companies and better
align them with their respective customer bases.
"Each company will benefit from a greater strategic focus on its
core business and growth opportunities as well as from increased
recognition in each of its global market segments. In addition,
the separate companies will offer more attractive and targeted
investment opportunities, with incentives for management and
employees that are more closely aligned with company performance
and shareholder interests," Mr. McClure continued.
The planned spinoff of the LVS business -- to be named Arvin
Innovation, Inc. -- would be implemented through a pro rata tax-
free dividend to ArvinMeritor shareholders. Upon completion of
the spinoff, ArvinMeritor shareholders will own 100% of the common
stock of Arvin Innovation. Approval of the spinoff by
ArvinMeritor shareholders is not required, and the company expects
to complete the spinoff within the next 12 months, contingent upon
satisfactory financial and automotive market conditions as well as
other customary approvals.
"Our decision to spin off the LVS business is part of the
company's ongoing corporate transformation -- our 3R strategy to
rationalize, refocus and regenerate -- that has been underway for
the last three years," Mr. McClure said. "Separating these two
businesses and successfully implementing our Performance Plus
initiatives are major steps in the transformation to build two
stronger, more competitive companies for the future.
"Our LVS business group will have the right leadership team, a
solid financial structure, market-leading positions in many of its
product lines, a well-diversified customer mix and the global
reach to grow this new company as a market leader going forward,"
Mr. McClure concluded.
Mr. McClure will remain as ArvinMeritor's chairman, CEO and
president. James Marley, currently a board member of
ArvinMeritor, will lead Arvin Innovation's board of directors as
non-executive chairman. Until the spin is completed, Marley, a
retired chairman of the board of AMP Inc., will remain on the
ArvinMeritor board. Phil Martens, currently ArvinMeritor's senior
vice president and president, Light Vehicle Systems, will become
the president and CEO of Arvin Innovation.
"As a separate independent unit, Arvin Innovation will be better
positioned to drive specific growth initiatives, including
improving our customer focus and expanding our global presence,"
Mr. Martens said. "With increased flexibility as a stand-alone
business, Arvin Innovation will have an excellent opportunity to
create next-generation systems technology solutions for our
customers around the world. In addition, we look forward to the
many new and enhanced opportunities the new organization will
provide for our worldwide employees."
Jim Donlon, executive vice president and CFO of ArvinMeritor will
immediately begin supporting ArvinMeritor's LVS business group in
the capacity of chief financial officer as it prepares to become
an independent company. Upon completion of the spin, he will
become executive vice president and CFO of Arvin Innovation.
Jay Craig, senior vice president and controller, will replace
Donlon as ArvinMeritor's senior vice president and CFO, effective
immediately.
Rakesh Sachdev, senior vice president of ArvinMeritor and
president of Asia Pacific, will become executive vice president,
chief administrative officer and managing director of Emerging
Markets of the new company, upon the completion of the spin.
However, until a successor is named, he will continue to be
responsible for ArvinMeritor's Asia Pacific region.
When the spinoff is completed, Carsten Reinhardt, senior vice
president of ArvinMeritor and president of the company's
Commercial Vehicle Systems business, will be named COO for
ArvinMeritor.
In addition, Mary Lehmann, currently the company's senior vice
president, Strategic Initiatives, and Treasurer, will expand her
responsibilities to include Information Services, M&A activities,
and Investor Relations. Vernon Baker, currently senior vice
president and general counsel, with overall legal responsibility
for all of ArvinMeritor's global operations and its subsidiaries,
and Environmental, Health and Safety, will also assume
responsibility for the global Human Resources organization.
ArvinMeritor will remain headquartered in Troy, Michigan. Arvin
Innovation will be headquartered in Detroit, Michigan, at the
current location of the LVS Detroit Technology Center, with other
corporate offices located in Europe, Asia Pacific and South
America.
The spinoff is subject to customary conditions, including final
approval by ArvinMeritor's board of directors; completion of all
required activities with employee representatives; receipt of
applicable consents; effectiveness of a registration statement
with the Securities and Exchange Commission; receipt of a tax
ruling from the IRS; and the approval of applicable regulatory
authorities.
ArvinMeritor's common stock will continue to trade on the New York
Stock Exchange under the symbol ARM. Management has applied for
Arvin Innovation to be listed on the NASDAQ global stock market
under the symbol ARVI.
Until the spinoff is effective, ArvinMeritor's management intends
to recommend that its board continue its current dividend policy.
J.P. Morgan Securities Inc. is ArvinMeritor's lead financial
advisor for this transaction. UBS Securities is also advising
ArvinMeritor on financial matters relating to the transaction.
Chadbourne & Parke LLP as well as Miller, Canfield, Paddock and
Stone, P.L.C. are acting as ArvinMeritor's legal advisors.
Light Vehicle Systems
ArvinMeritor's LVS business is a global provider of dynamic motion
and control automotive systems and components, with sales of
$2.2 billion in 2007 -- $2.0 billion of value-added sales and $200
million of pass-through sales. Of the value-added sales, more
than 60% were outside North America. ArvinMeritor's LVS business
group is a market leader in many of the product categories it
serves, supplying components and integrated systems and modules to
the world's leading passenger car and light truck OEMs. The
business will have approximately 9,000 employees with 42
facilities in 16 countries. LVS has interests in eight joint
ventures (three consolidated and five non-consolidated).
About ArvinMeritor
Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM) --
http://www.arvinmeritor.com/-- supplies a broad range of
integrated systems, modules and components to the motor vehicle
industry. The company serves commercial truck, trailer and
specialty original equipment manufacturers and certain
aftermarkets, and light vehicle manufacturers. ArvinMeritor
employs approximately 19,000 people in 24 countries.
ARVINMERITOR: Light Vehicle's Spinoff Cues Fitch's Negative Watch
-----------------------------------------------------------------
Fitch has placed the ratings of ArvinMeritor on Rating Watch
Negative following the announced spinoff of ArvinMeritor's Light
Vehicle Systems group. As information becomes available Fitch
will review the details of each entity and resolve the Rating
Watch designation.
The spinoff will reduce the business diversification of the
current consolidated entity, increasing exposure of the remaining
Commercial Vehicle Systems business to the cyclical truck market,
and increasing exposure of the LVS entity to competitive
conditions and individual manufacturers in the automotive market.
The benefits of recent restructuring actions have begun to be
reflected in financial results, although margins at LVS currently
remain at low levels and have been challenging to stabilize.
Duplicating corporate functions at the LVS entity concurrent with
the spin will also pressure margins.
Total liquidity requirements will likely increase from current
levels in order to finance working capital requirements,
continuing restructuring actions, capital expenditures, and to act
as a buffer against cyclical volatility. The combined entity has
forecast continued negative cash flow for its current fiscal year,
indicating that total debt to be allocated at the time of the spin
will be higher than current levels. Existing senior unsecured
debt could be pushed farther down the capital structure or face
reduced recovery prospects depending on the allocation of debt and
new financing arrangements.
Fitch has placed these ratings for ARM on Rating Watch Negative:
-- Issuer Default Rating 'B';
-- Senior Unsecured 'B/RR4'
-- Bank Credit Facility 'BB/RR1'.
ARVINMERITOR INC: S&P Holds 'B+' Rating on Light Vehicle Spinoff
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating and other ratings on ArvinMeritor Inc. The outlook
remains negative.
"The affirmations follow ArvinMeritor's announcement of its plan
to spin off its light vehicle systems business to ArvinMeritor
shareholders," said Standard & Poor's credit analyst Lawrence
Orlowski. Management expects that the transaction, which is not
subject to shareholder approval, will be completed within 12
months.
After the spin-off, ARM's primary focus will be trucks and other
commercial vehicles. The company supplies drivetrain systems,
which include axles and drivelines, braking systems, suspension
systems, and ride control products. S&P would continue to
characterize the business risk profile as weak.
S&P are concerned about how profitability and cash flow will
unfold before the legal separation, given uncertainty about
production among many automotive and heavy-truck customers.
Still, S&P expect the company's financial profile to strengthen in
time because of its adequate liquidity. S&P could lower the
rating if the downturn in the company's commercial vehicle systems
business is much more severe or longer than expected, perhaps
because of unexpected economic weakness and worsening negative
free cash flow. S&P could revise the outlook to stable if the
company seems capable of generating positive cash flow as a result
of better operating efficiencies and some end-market improvements.
AVENSYS CORP: Posts $419,824 Net Loss in 2nd Quarter Ended Dec. 31
------------------------------------------------------------------
Avensys Corp. reported a net loss of $419,824 on revenue of
$4.3 million for the second quarter ended Dec. 31, 2007, compared
with a net loss of $1.5 million on revenue of $4.9 million in the
same period ended Dec. 31, 2006.
Sales from the Avensys Tech and Avensys Environmental Solutions
divisions of Avensys Inc., for the three and six month periods
ended Dec. 31, 2007, account for 94.7% and 95.7%, respectively, of
the company's net revenues.
Revenues for the three month period ended Dec. 31, 2007, decreased
by 11.5% over the same period in 2006. Excluding C-Chip non-
royalty revenues included in the comparative period, revenues for
the three month period ended Dec. 31, 2007, increased by 36.6% and
36.0%, respectively, over the same period in 2006.
Gross margin increased to $1.5 million during the three month
period ended Dec. 31, 2007, versus gross margin of $918,201 during
the same period ended Dec. 31, 2006, mainly as a result of
improved margins at Avensys Tech and the new C-Chip business
model.
Loss from operations decreased to $1.0 million from loss from
operations $1.1 million during the three months ended Dec. 31,
2006, mainly due to the increase in gross margin, partly offset by
the incredase in total operating expenses.
Depreciation and amortization expenses for the three month period
ended Dec. 31, 2007, increased by $65,301 over the same period in
2006.
Selling, general and administrative expenses for the three month
period ended Dec. 31, 2007, increased by $113,682 compared to the
same period in 2006.
Research and development expenses for the three month period ended
Dec. 31, 2007, increased by $331,994 compared with the same period
in 2006. The increase is primarily attributable to the expanded
roster of research and development projects at ITF Labs.
Refundable tax credits for the three month period ended Dec. 31,
2007, increased to $425,422 compared to $164,501 during the same
period in 2006.
Balance Sheet
At Dec. 31, 2007, the company's consolidated balance sheet showed
$19.6 million in total assets, $11.2 million in total liabilities,
$25,232 in non-controlling interest, and $8.4 million in total
stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended Dec. 31, 2007, are available for
free at http://researcharchives.com/t/s?2b7d
Going Concern Doubt
As reported in the Troubled Company Reporter on Oct. 4, 2007,
Montreal, Canada-based Raymond Chabot Grant Thornton LLP expressed
substantial doubt about Manaris Corp. nka. Avensys Corp.'s ability
to continue as a going concern after auditing the company's
consolidated financial statements for the year ended June 30,
2007. The auditor pointed to the company's significant losses
since inception and reliance on non-operational sources of
financing to fund operations.
During the three month period ended Dec. 31, 2007, the company
used $339,808 of cash to fund operating activities from continuing
operations. In comparison, during the three month period ended
Dec. 31, 2006, the company used $81,321 of cash to fund operating
activities from continuing operations.
About Avensys Corp.
Headquartered in Montreal, Canada, Avensys Corp. fka. Manaris
Corp. (OTC BB: AVNY.OB) -- http://www.avensyscorporation.com/--
operates Avensys Inc., its wholly-owned core subsidiary. Avensys
Inc., through its manufacturing division Avensys Technologies,
designs, manufactures, distributes, and markets high reliability
optical components and modules as well as FBGs for the telecom
market and high power devices and sub-assemblies for the
industrial market.
Avensys Technologies also develops packaged fiber-based sensors.
Avensys Environmental Solutions, also a division of Avensys Inc.,
provides environmental monitoring solutions for air, water and
soil in the Canadian marketplace.
BCAP LLC: Moody's Cuts 60 Tranches' Ratings From Six Alt-A Deals
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Moody's Investors Service downgraded the ratings of 60 tranches
from 6 Alt-A transactions issued by BCAP LLC Trust. Thirty
tranches remain on review for possible further downgrade.
Additionally, 6 tranches were placed on review for possible
downgrade.
The collateral backing these transactions consists primarily of
first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The
ratings were downgraded, in general, based on higher than
anticipated rates of delinquency, foreclosure, and REO in the
underlying collateral relative to credit enhancement levels. The
actions are a result of Moody's on-going review process.
Complete rating actions are:
Issuer: BCAP LLC Trust 2006-AA1
-- Cl. A-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. M-1, Downgraded to B3 from Aa1
-- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to B3 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to Caa1 from Baa3; Placed Under Review
for further Possible Downgrade
-- Cl. M-6, Downgraded to Ca from Ba1
-- Cl. M-7, Downgraded to Ca from Ba3
-- Cl. M-8, Downgraded to Ca from B3
Issuer: BCAP LLC Trust 2006-AA2
-- Cl. A-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. M-1, Downgraded to B2 from Aa1
-- Cl. M-2, Downgraded to B2 from Aa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to B3 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B3 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to Caa1 from Baa3; Placed Under Review
for further Possible Downgrade
-- Cl. M-7, Downgraded to Ca from Ba3
-- Cl. M-8, Downgraded to Ca from B3
Issuer: BCAP LLC Trust 2007-AA1
-- Cl. I-A-4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. I-M-1, Downgraded to Ba3 from Aa1
-- Cl. I-M-2, Downgraded to B1 from Aa2; Placed Under Review for
further Possible Downgrade
-- Cl. I-M-3, Downgraded to B2 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. I-M-4, Downgraded to B3 from Baa1; Placed Under Review
for further Possible Downgrade
-- Cl. I-M-5, Downgraded to B3 from Baa3; Placed Under Review
for further Possible Downgrade
-- Cl. I-M-6, Downgraded to Ca from Ba1
-- Cl. I-M-7, Downgraded to Ca from Ba3
-- Cl. II-M-1, Downgraded to Baa1 from Aa1
-- Cl. II-M-2, Downgraded to Ba3 from Aa2
-- Cl. II-M-3, Downgraded to B1 from Aa3
-- Cl. II-M-4, Downgraded to B1 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. II-M-5, Downgraded to B2 from Baa2; Placed Under Review
for further Possible Downgrade
-- Cl. II-M-6, Downgraded to Ca from Ba2
-- Cl. II-M-7, Downgraded to Ca from B3
Issuer: BCAP LLC Trust 2007-AA2
-- Cl. I-1-A, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. I-2-A-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. I-M-1, Downgraded to Baa2 from Aa1
-- Cl. I-M-2, Downgraded to B1 from Aa2
-- Cl. I-M-3, Downgraded to B1 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. I-M-4, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. I-M-5, Downgraded to B3 from Baa2; Placed Under Review
for further Possible Downgrade
-- Cl. I-M-6, Downgraded to Ca from Ba1
-- Cl. I-M-7, Downgraded to Ca from Ba2
-- Cl. I-M-8, Downgraded to Ca from B3
-- Cl. II-M-1, Downgraded to Baa2 from Aa2
-- Cl. II-B-1, Downgraded to B1 from Baa2; Placed Under Review
for further Possible Downgrade
-- Cl. II-B-2, Downgraded to B3 from B1; Placed Under Review for
further Possible Downgrade
-- Cl. II-B-3, Downgraded to Ca from B3
Issuer: BCAP LLC Trust 2007-AA3
-- Cl. II-A-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-M-1, Downgraded to Ba2 from Aa1
-- Cl. II-M-2, Downgraded to B1 from Aa2; Placed Under Review
for further Possible Downgrade
-- Cl. II-M-3, Downgraded to B1 from Aa3; Placed Under Review
for further Possible Downgrade
-- Cl. II-M-4, Downgraded to B1 from A1; Placed Under Review for
further Possible Downgrade
-- Cl. II-M-5, Downgraded to B2 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. II-M-6, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. II-M-7, Downgraded to B3 from Baa1; Placed Under Review
for further Possible Downgrade
-- Cl. II-M-8, Downgraded to B3 from Baa3; Placed Under Review
for further Possible Downgrade
-- Cl. II-M-9, Downgraded to Ca from Ba1
Issuer: BCAPB LLC Trust 2007-AB1
-- Cl. M-2, Downgraded to A1 from Aa2
-- Cl. M-3, Downgraded to A3 from Aa3
-- Cl. M-4, Downgraded to Baa2 from A1
-- Cl. M-5, Downgraded to Ba1 from A2
-- Cl. M-6, Downgraded to B1 from A3
-- Cl. M-7, Downgraded to B1 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to B1 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to B2 from Baa3; Placed Under Review for
further Possible Downgrade
BGF INDUSTRIES: Sept. 30 Balance Sheet Upside-Down by $28.5 MM
--------------------------------------------------------------
BGF Industries Inc.'s balance sheet at Sept. 30, 2007, showed
$85.4 million in total assets, and $113.9 million in total
liabilities, resulting in a $28.5 million total stockholders'
deficit.
The company reported net income of $2.0 million for the third
quarter ended Sept. 30, 2007, compared with a net loss of
$2.5 million in the same period of 2006.
Results for the third quarter ended Sept. 30, 2006, included other
income of $1.8 million, or 4.1% of net sales, due to the
settlement of a class action lawsuit.
Net sales increased $4.1 million, or 9.5%, to $47.8 million in the
three months ended Sept. 30, 2007, from $43.7 million in the three
months ended Sept. 30, 2006, primarily due to the increase in
sales of the company's filtration fabrics and protective fabrics.
Selling, general and administrative expenses decreased $200,000 to
$2.8 million in the three months ended Sept. 30, 2007, from the
three months ended Sept. 30, 2006, due primarily to decreased
management fees.
Operating income increased $1.3 million to $4.9 million, or 10.3%
of net sales, in the three months ended Sept. 30, 2007, from
$3.6 million, or 8.2% of net sales, in the three months ended
Sept. 30, 2006.
Interest expense decreased $100,000 to $2.7 million, or 5.6% of
net sales, in the three months ended Sept. 30, 2007, from
$2.8 million, or 6.5% of net sales, in the three months ended
Sept. 30, 2006.
Liquidity and Capital Resources
The company's primary sources of liquidity are cash flows from
operations and borrowings under its financing arrangements.
On June 6, 2003, the company entered into a five year financing
arrangement with Wells Fargo Foothill Inc. The WFF loan is
guaranteed by the company's parent, NVH Inc., BGF Services Inc.
and Glass Holdings LLC. The WFF Loan, as amended, has a maximum
revolver credit line of $21.0 million and a term loan of $6.0
million.
As of Sept. 30, 2007, amounts outstanding under the WFF Loan
totaled $4.8 million which consisted solely of $4.8 million under
the term loan.
Availability under the revolver at Sept. 30, 2007, and Oct. 29,
2007 was $19.6 million. This availability has been reduced by a
reserve to allow for the annual interest payments on the Senior
Subordinated Notes.
Full-text copies of the company's financial statements for the
third quarter ended Sept. 30, 2007, are available for free at:
http://researcharchives.com/t/s?2b7f
About BGF Industries
Headquartered in Greensboro, North Carolina, BGF Industries Inc.,
a wholly owned subsidiary of NVH Inc. -- http://www.bgf.com/--
focuses on the production of value-added specialty woven fabrics,
non-woven fabrics and parts made from glass, carbon, and aramid
yarns. The company's products are a critical component in the
production of a variety of electronic, filtration, composite,
insulation, protective, construction and commercial products.
The company's glass fiber fabrics are used in printed circuit
boards, which are integral to virtually all advanced electronic
products, including computers and cellular telephones. The
company's products are also used to strengthen, insulate and
enhance the dimensional stability of hundreds of products that
they make for their own customers in various markets, including
aerospace, transportation, construction, power generation and oil
refining.
* * *
BGF Industries Inc. still carries Moody's Investors Service's
"Caa2" corporate family rating assigned on Nov. 24, 2004. Outlook
is Negative.
BIRCH MOUNTAIN: Amex Sends Notice of Noncompliance on Deficiencies
------------------------------------------------------------------
Birch Mountain Resources Ltd. reports that on April 29, 2008, it
received notice from the American Stock Exchange, Listing
Qualifications Department, that the company is below certain of
the Exchange's continued listing standards due to deficiencies in
its financial condition and operating results under Sections
1003(a)(i), 1003(a)(ii), 1003(a)(iii) and 1003(a)(iv) of the Amex
company Guide.
To maintain its Amex listing, Birch Mountain will submit a plan
to the Exchange by May 29, 2008, documenting the actions it has
taken, and will take, to regain compliance with the continued
listing standards by Oct. 29, 2009. If the plan is not acceptable
to Amex, Birch Mountain will be subject to delisting procedures as
set forth in Section 1010 and part 12 of the company Guide. If
the plan is accepted but it is not in compliance with the
continued listing standards at the conclusion of the plan period,
or if the company does not make progress consistent with the plan
during the plan period, the Amex Staff will initiate delisting
proceedings as appropriate.
About Birch Mountain
Headquartered in Calgary, Canada, Birch Mountain Resources Limited
(AMEX:BMD) -- http://www.birchmountain.com/-- is in the
industrial minerals business producing and selling limestone
aggregate products. The company's operations are located north of
Fort McMurray, Alberta, where the company holds metallic and
industrial mineral rights over a portion of the Athabasca region
in the heart of Alberta's expanding oil sands industry. The
company operates the Muskeg Valley Quarry, an early production
stage limestone quarry that produces limestone aggregate products
for sale to customers in the Athabasca oil sands region of north-
eastern Alberta. The company is engaged in the regulatory
approval process for the Hammerstone Project, which would expand
the MVQ and add an integrated limestone processing complex to
provide manufactured limestone-based products, such as quicklime,
as well as related environmental services, such as spent lime
recalcining.
BLAST ENERGY: March 31 Balance Sheet Upside-Down by $3,006,117
--------------------------------------------------------------
Blast Energy Inc.'s consolidated balance sheet at March 31, 2008,
showed $2,841,638 in total assets and $5,847,755 in total
liabilities, resulting in a $3,006,117 total stockholders'
deficit.
At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $1,760,142 in total current assets
available to pay $2,502,755 in total current liabilities.
The company reported a net loss of $666,284 for the first quarter
ended March 31, 2008, compared with a net loss of $3,529,340 in
the same period in 2007. Thes decrease in net loss is primarily
related to the lower loss from discontinued operations arising
from the sale of the company's contract drilling business during
2007 and lower administrative costs.
Satellite Communication Services' revenues decreased to $71,652
for the quarter ended March 31, 2008, compared to $162,419 for the
quarter ended March 31, 2007. The company attributed the decrease
in revenues to the decline in new business and existing customer
renewals during the time the company was in Chapter 11.
There were no Down-hole Solutions' revenues for the quarters ended
March 31, 2008, and March 31, 2007.
Selling, general and administrative expenses decreased to $585,947
for the quarter ended March 31, 2008, compared to $1,879,082 for
the quarter ended March 31, 2007.
Cash Flows from Financing Activities
Net cash provided by financing activities was $3,546,530 for the
quarter ended March 31, 2008. Net cash provided by financing
activities for the quarter ended March 31, 2008, included
$4,000,000 from the issuance of convertible preferred stock and
$100,000 of borrowings under the company's DIP loan facility
offset by $552,570 of payments on short term debt.
As reported in the Troubled Company Reporter on April 11, 2008,
under the terms of the confirmed plan, Blast raised $4.0 million
in cash proceeds from the sale of convertible preferred securities
to Clyde Berg and McAfee Capital, two parties related to its
largest shareholder, Berg McAfee Companies.
The proceeds from the sale of the securities were used to pay 100%
of the unsecured creditor claims, all administrative claims, and
all statutory priority claims, for a total amount of approximately
$2.4 million. The remaining approximately $1.6 million will be
used to execute an operational plan, including but not limited to,
reinvesting in the Satellite Services and Down-hole Solutions
businesses and pursue an emerging Digital Oilfield Services
business.
Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2b80
About Blast Energy
Headquartered in Houston, Blast Energy Services Inc. --
http://www.blastenergyservices.com/-- provides contract land
drilling services to the energy industry in the United States and
Africa. The company also provides satellite services to oil and
gas producers, which enables them to monitor and control well
head, pipeline, and drilling operations through broadband data and
voice services from remote operations where conventional land-
based communication networks do not exist.
The company and its wholly owned subsidiary Eagle Domestic
Drilling Operations LLC, filed for Chapter 11 protection on
Jan. 19, 2007 (Bankr. S.D. Tex. Case No. 07-30424 and 07-30426).
On Feb. 26, 2008, the Court entered an order confirming the
company's Second Amended Plan of Reorganization. This ruling
allows the Debtors to emerge from Chapter 11 bankruptcy, which
became effective Feb. 27, 2008.
BLOUNT INC: S&P's 'BB- Rating Unaffected by Carlton Acquisition
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings and
outlook on Blount Inc. (BB-/Negative/--) are not affected by the
company's announcement that it acquired Carlton Holdings Inc., a
saw chain manufacturer based in Oregon, for $63 million. The
acquisition bolsters Blount's core Outdoor Products Group
operations and further diversifies the company's sales
internationally. Despite a weakening U.S. economy, the company
continues to meet S&P's expectations, including funds flow to
total debt of about 15% and total debt to EBITDA of about 4x.
BLUE WATER: Shortens Plan Schedule to Meet Customers' Deadline
--------------------------------------------------------------
Blue Water Automotive Systems, Inc. and its affiliated debtors ask
the United States Bankruptcy Court Eastern District of Michigan to
modify a prior scheduling order to set a disclosure statement
hearing at which final approval may be obtained, rather than the
preliminary approval process presently established in the Order.
The Court has previously set these deadlines for the confirmation
of a plan of reorganization and the approval of a disclosure
statement explaining the plan:
May 23, 2008 -- Deadline for parties to ask the Debtors to
include any information in the Disclosure
Statement
June 11, 2008 -- Deadline for the Debtors to file a combined
plan and disclosure statement
July 29, 2008 -- Deadline to return ballots on the plan and
file objections to final approval of the
disclosure statement and responses to
confirmation of the plan
August 5, 2008 -- Hearing on Disclosure Statement objections
and confirmation of the plan
The Court also ordered for "preliminary" approval of a disclosure
statement, instead of final approval, prior to the period during
which the Debtors will be permitted to solicit acceptance or
rejection of the plan. Specifically, the Order stated that the
Court "will consider whether to grant preliminary approval of the
disclosure statement," and that the Court will notify the
Debtors' counsel if it determines not to grant preliminary
approval of the disclosure statement.
Pursuant to Section 1125(b) of the Bankruptcy Code and Rule
3017(a) of the Federal Rule of Bankruptcy Procedure, the Debtors
are not permitted to solicit acceptance or rejection of a plan
before the disclosure statement is approved by the Court, after
notice and a hearing, John A. Simon, Esq., at Foley & Lardner,
LLP, in Detroit, Michigan, states. However, pursuant to the
Court's Order, the Debtors are required to solicit acceptance or
rejection of the Plan without final approval of the disclosure
statement.
The Debtors ask the Court to set these new deadlines:
May 7, 2008 - Deadline for Debtors to file a separate plan
and disclosure statement
May 21, 2008 - Deadline to file objections to final approval
of the disclosure statement
May 23, 2008 - Hearing on objections to final approval of the
disclosure statement
June 10, 2008 - Deadline to return ballots on the plan and
file objections to confirmation of the plan
June 13, 2008 - Final approval and confirmation of the plan
Mr. Simon avers that these shortened timeframes are necessary
because the Debtors must meet the deadlines in the Accommodation
Agreements to prevent Ford Motor Company, General Motors
Corporation and Chrysler LLC -- the Major Customers -- from
resourcing and thus preserve their business and the highest value
of their assets for a sale. The Financing Period under the
Accommodation Agreements will expire no later than June 30, 2008.
Mr. Simon relates that the Debtors have obtained 10 expressions
of interest or non-binding letters of intent from parties
interested in purchasing the Debtors' assets. He says the
Debtors expect to have an Asset Purchase Agreement signed by
May 28, 2008, and to close a sale of their assets in connection
with confirmation of a chapter 11 plan by June 30, 2008, as
required under the short time-frame mandated by the Accommodation
Agreements.
The Debtors also ask the Court to remove the deadline to file
motions to value security because these motions will likely be
based on the proceeds resulting from the Debtors' sale and thus
will likely not be capable of being determined until after the
sale.
About Blue Water Automotive
Blue Water Automotive Systems, Inc. designs and manufactures
engineered thermoplastic components and assemblies for the
automotive industry. The company's product categories include
airflow management, full interior trim/sub-systems, functional
plastic components, and value-added assemblies. They are
supported by full-service design, program management,
manufacturing and tooling capabilities. With more than 1,400
employees, Blue Water operates eight manufacturing and product
development facilities and has annual revenues of approximately
US$200 million. The company's headquarters and technology
center is located in Marysville, Mich. The company has
operation in Mexico.
In 2005, KPS Special Situations Fund II, L.P., and KPS Special
Situations Fund II(A), L.P., acquired Blue Water Automotive
through a stock purchase transaction. In 2006, the company
acquired the automotive assets and operations of Injectronics,
Inc., a manufacturer of thermoplastic injection molded
components and assemblies. KPS then set about reorganizing the
company. The company implemented a program to improve operating
performance and address its liquidity issues. During 2007, the
company replaced senior management, closed two facilities, and
reduced overhead spending by one third.
Blue Water Automotive and four affiliates filed for chapter 11
bankruptcy protection Feb. 12, 2008, before the United States
Bankruptcy Court Eastern District of Michigan (Detroit) (Case
No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at
Foley & Lardner, LLP, serves as the Debtors' bankruptcy
counsel. Administar Services Group LLC acts as the Debtors'
claims, noticing, and balloting agent. Blue Water's bankruptcy
petition lists assets and liabilities each in the range of
US$100 million to US$500 million. The hearing on the Debtors'
disclosure statement and plan is set for Aug. 5, 2008. (Blue
Water Automotive Bankruptcy News, Issue No. 13, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
BLUE WATER: Hearing on Case Conversion Set for May 12
-----------------------------------------------------
Blue Water Automotive Systems, Inc. and its affiliated debtors and
its Official Committee of Unsecured Creditors agree to adjourn the
hearing on the panel's request to convert the Debtors' Chapter 11
cases to cases under Chapter 7 of the Bankruptcy Code to May 12,
2008. Objections are due May 9, 2008.
The United States Bankruptcy Court Eastern District of Michigan
approved the parties' stipulation.
As reported in the Troubled Company Reporter on March 31, 2008,
the Committee batted for the conversion of Blue Water's cases
based on its apprehensions that the Debtors would only incur more
debts if they continue operations, further diminishing recovery by
creditors.
Ford Motor Company, one of Blue Water Automotive Systems, Inc.'s
key customers, asserted that conversion of the Chapter 11 cases to
Chapter 7 is not in the best interest of creditors and the
estates, the TCR reported April 25.
"As several courts have emphasized, short term operating losses
are not unusual during the first few months of a Chapter 11 case
and they certainly do not provide a basis for the drastic remedy
of conversion. The Debtor's rehabilitation is not a hopeless
and unrealistic prospect as it will have positive EBITDA of
US$11 million in 2008," asserted Ford's counsel, Timothy A.
Fusco, Esq., at Miller, Canfield, Paddock and Stone, PLC, in
Detroit, Michigan.
Blue Water Automotive Systems, Inc. designs and manufactures
engineered thermoplastic components and assemblies for the
automotive industry. The company's product categories include
airflow management, full interior trim/sub-systems, functional
plastic components, and value-added assemblies. They are
supported by full-service design, program management,
manufacturing and tooling capabilities. With more than 1,400
employees, Blue Water operates eight manufacturing and product
development facilities and has annual revenues of approximately
US$200 million. The company's headquarters and technology
center is located in Marysville, Mich. The company has
operation in Mexico.
In 2005, KPS Special Situations Fund II, L.P., and KPS Special
Situations Fund II(A), L.P., acquired Blue Water Automotive
through a stock purchase transaction. In 2006, the company
acquired the automotive assets and operations of Injectronics,
Inc., a manufacturer of thermoplastic injection molded
components and assemblies. KPS then set about reorganizing the
company. The company implemented a program to improve operating
performance and address its liquidity issues. During 2007, the
company replaced senior management, closed two facilities, and
reduced overhead spending by one third.
Blue Water Automotive and four affiliates filed for chapter 11
bankruptcy protection Feb. 12, 2008, before the United States
Bankruptcy Court Eastern District of Michigan (Detroit) (Case
No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at
Foley & Lardner, LLP, serves as the Debtors' bankruptcy
counsel. Administar Services Group LLC acts as the Debtors'
claims, noticing, and balloting agent. Blue Water's bankruptcy
petition lists assets and liabilities each in the range of
US$100 million to US$500 million. The hearing on the Debtors'
disclosure statement and plan is set for Aug. 5, 2008. (Blue
Water Automotive Bankruptcy News, Issue No. 13, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
BON-TON STORES: Earns $11.6 Million in Fiscal Year Ended Feb. 2
---------------------------------------------------------------
The Bon-Ton Stores Inc. reported net income of $11.6 million for
the fifty-two week period ended Feb. 2, 2008, compared to net
income of $46.9 million in the fifty-three week period of fiscal
2006.
Net income in fiscal 2007 was negatively impacted by an asset
impairment charge of $4.1 million on a pre-tax basis related to
the reduction in the estimated net realizable value of certain
store properties and a reduction in the value of two private label
brand names. Net income in fiscal 2006 was negatively impacted by
$2.9 million of charges for an impaired store property and a
reduction in the value of duplicate information systems software.
Total sales were relatively unchanged at $3.4 billion for the
fifty-two week period of fiscal 2007, compared with $3.4 billion
for the prior year period, which consisted of fifty-three weeks.
Other income in the fifty-two week period of fiscal 2007 increased
to $101.7 million, compared to $93.5 million in the fifty-three
week prior year period, primarily due to the inclusion of thirteen
weeks of Carson's (the Northern Department Store Group acquired
from Saks Incorporated effective March 5, 2006) operations in the
first quarter of fiscal 2007, as compared to eight weeks of
Carson's operations in the first quarter of fiscal 2006, and an
increase in the program revenue received under the Credit Card
Program Agreement (CCPA) with HSBC.
Gross margin dollars in 2007 decreased $27.7 million compared to
2006. The decrease in gross margin dollars primarily reflects the
reduced sales volume attributable to a comparable store sales
decrease of 6.5% and a decrease in the gross margin rate.
Selling, general and administrative expense increased
$9.3 million compared to 2006. The principal factors in the
increase in SG&A expense were the inclusion of five incremental
weeks of Carson's operations in the first quarter of 2007 as
compared to the first quarter of 2006 and increases in those costs
affected by normal inflationary adjustments.
Depreciation and amortization expense and amortization of lease-
related interests increased $19.2 million, to $126.1 million, in
2007 from $106.9 million in 2006, primarily the result of
including thirteen weeks of Carson's operations in the first
quarter of 2007 as compared to eight weeks of Carson's operations
in the first quarter of 2006 as well as the increased expense
associated with asset additions.
Income from operations in 2007 was $125.7 million, or 3.7% of net
sales, as compared to $173.7 million, or 5.2% of net sales, in
2006.
Net interest expense in 2007 was $108.2 million, or 3.2% of net
sales, as compared to $107.1 million, or 3.2% of net sales, in
2006. The $1.0 million increase is principally due to the net
additional weeks of interest expense on debt incurred in
connection with the acquisition of Carson's compared to interest
expense in the prior year, partially offset by a prior year charge
of $6.8 million for the write-off of fees associated with a bridge
facility and the early extinguishment of previous debt.
Liquidity and Capital Resources
Prior to March 6, 2006, the company's primary sources of working
capital were cash flows from operations and borrowings under its
revolving credit facility. On March 6, 2006, to finance the
acquisition of Carson's and the related payoff of its previous
revolving credit facility, the company entered into a new Senior
Secured Credit Facility that provides for up to $1.0 billion in
borrowings, issued $510.0 million in senior unsecured notes and
entered into a new mortgage loan facility in the aggregate
principal amount of $260.0 million.
As of Feb. 2, 2008, the company had borrowings of $310.8 million,
with $351.0 million of borrowing availability and letter-of-credit
commitments of $14.0 million under its Senior Secured Credit
Facility.
Capital expenditures for 2007 totaled $109.7 million, compared
with $95.2 million for 2006.
The company anticipates that cash flows from operations,
supplemented by borrowings under the Senior Secured Credit
Facility, will be sufficient to satisfy operating cash
requirements for at least the next twelve months.
Balance Sheet
At Feb. 2, 2008, the company's consolidated balance sheet showed
$2.1 billion in total assets, $1.7 billion in total liabilities,
and $363.1 million in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the year ended Feb. 2, 2008, are available for free
at http://researcharchives.com/t/s?2b88
About The Bon-Ton Stores
York, Pennsylvania-based The Bon Ton Stores Inc. (Nasdaq: BONT) --
http://www.bonton.com/-- operates 280 department stores, which
includes eleven furniture galleries, in 23 states in the
Northeast, Midwest and upper Great Plains under the Bon-Ton,
Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman,
Herberger's and Younkers nameplates and, under the Parisian
nameplate, three stores in the Detroit, Michigan area. The stores
offer a broad assortment of brand-name fashion apparel and
accessories for women, men and children, as well as cosmetics and
home furnishings.
* * *
As reported in the Troubled Company Reporter on March 17, 2008,
Fitch Ratings affirmed The Bon-Ton Stores, Inc.'s 'B' issuer
default rating. The rating outlook has been revised to negative
from stable.
As reported in the Troubled Company Reporter on Feb. 13, 2008,
Moody's Investors Service downgraded the corporate family rating
of Bon-Ton Stores Inc. to B2 from B1, downgraded the probability
of default rating to B2 from B1, and downgraded the rating on the
$510 million senior unsecured notes to Caa1 (LGD 5, 78%) from B3
(LGD 5, 83%). The company's speculative grade liquidity rating of
SGL-3 was affirmed. The outlook on all ratings is stable.
BROOKLYN PSYCHIATRIC: Case Summary & 16 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Brooklyn Psychiatric Centers, Inc.
dba Brooklyn Care Works
189 Montague St.
Brooklyn, NY 11201
Bankruptcy Case No.: 08-42658
Type of Business: The Debtor treats individuals and families
who suffer emotional distress. Its 100 mental
health professionals conduct more than 60,000
sessions annually at five community-based
mental health clinics in Bushwick, Canarsie,
Flatbush-Sheepshead Bay, Williamsburg-
Greenpoint, and downtown Brooklyn; an
outpatient drug and alcohol treatment program
for individuals with co-existing mental health
issues and chemical addictions; on-site
programs in the public schools; a prevention
program serving at-risk children and their
families; senior programs, and a specialized
mental health program. See
http://www.brooklyncareworks.org/
Chapter 11 Petition Date: April 30, 2008
Court: Eastern District of New York (Brooklyn)
Judge: Jerome Feller
Debtor's Counsel: Gary C. Fischoff, Esq.
Email: gcf@title11.net
Steinberg, Fineo, Berger & Fischoff
40 Crossways Park Dr.
Woodbury, NY 11797
Tel: (516) 747-1136
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
Debtor's 16 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Seedco Financial Services, $500,000
Inc.
915 Broadway 17th Flr.
New York, NY 10010
1199SEIU United Heathcare $165,462
Workers East
Levy Ratner PC
80 Eighth Ave.
New York, NY 10011
Bank of America NA $115,817
Attn: Capital Mgmt. Markets
Svc. Grp.
555 SW Flower St. 6th Flr.
Los Angeles, CA 90071
Healthnet of New York $107,914
Peter Moschovitis $85,028
Rockaway Parkway Assoc. $72,860
The Vantage Consulting Group, $68,750
Inc.
Kazlow and Kazlow $59,628
Mirram Global, LLC $32,500
Joseph P. Day Realty Corp. $29,912
44 Court Street LLC $25,818
JPMorgan Chase Bank NA $18,822
Family Services Network of NY $17,100
Con Edison $14,087
RSM McGladrey $13,346
Brown McMahon & Weinraub, LLC $12,000
CASH SYSTEMS: Has Until July 31 to Comply with Nasdaq Criteria
--------------------------------------------------------------
Cash Systems Inc. received a letter from The NASDAQ Stock Market
indicating that the company failed to comply with the minimum bid
price requirement for continued listing set forth in Marketplace
Rule 4450(a)(5) because the bid price of its common stock closed
under $1.00 for the last 30 consecutive business days.
The company also obtained a letter from NASDAQ, indicating that
the company's common stock has not maintained a minimum market
value of publicly held shares of $15 million as required for
continued listing by Marketplace Rule 4450(b)(3). The NASDAQ
letters have no effect on the listing of the company's common
stock at this time.
In accordance with NASDAQ Marketplace Rule 4450(e)(2), the company
will be provided 180 calendar days, or until Oct. 28, 2008, to
regain compliance with the minimum bid price requirement. To
regain compliance with this requirement, the closing bid price of
the company's common stock must remain at or above $1.00 per share
for a minimum of 10 consecutive business days on or before
Oct. 28, 2008.
In accordance with NASDAQ Marketplace Rule 4450(e)(1), the company
will be provided 90 calendar days, or until July 31, 2008, to
regain compliance with the minimum market value of publicly held
shares. To regain compliance with this requirement, the company's
minimum market value of publicly held shares must trade at
$15 million or more for ten consecutive trading days before
July 31, 2008.
If the company not be able to demonstrate compliance with
Marketplace Rule 4450(e)(1) by July 31, 2008, or with Marketplace
Rule 4450(a)(5) by Oct. 28, 2008, the NASDAQ staff will provide
written notification that the company's common stock will be
delisted. At that time, the company may appeal the staff's
determination to delist its common stock to a Listing
Qualifications Panel.
Alternatively, the company could apply to transfer its common
stock to The NASDAQ Capital Market if it satisfies all
requirements, other than the minimum closing bid price
requirement, for initial inclusion set forth in Marketplace Rule
4310(c).
If an application is approved and the company otherwise maintains
compliance with the listing requirements for The NASDAQ Capital
Market, the company would be afforded an additional 180 calendar
days to regain compliance with the minimum closing bid price
requirement while listed on The NASDAQ Capital Market.
About Cash Systems Inc.
Based in Las Vegas, Nevada, Cash Systems Inc. (NASDAQ:CKNN) --
http://www.cashsystemsinc.com/-- is a provider of cash-access and
related services to the retail and gaming industries. Cash
Systems' products include its proprietary cash advance systems,
ATMs and check cashing solutions. The company has additional
offices in San Diego and Minneapolis.
* * *
As reported in the Troubled Company Reporter on April 29, 2008,
Virchow Krause & Company LLP, in Minneapolis, raised substantial
doubt on the ability of Cash Systems Inc., to continue as a going
concern after auditing the company's consolidated financial
statements for the years ended Dec. 31, 2007, and 2006. The
auditing firm pointed to the company's recurring operating losses,
negative cash flows from operations, negative working capital and
accumulated deficit. Additionally, holders of notes have an
option to put $12.1 million in outstanding notes to the company in
October 2008.
Virchow Krause also said that the company did not maintain, in all
material respects, effective internal control over financial
reporting as of Dec. 31, 2007.
CEDAR MANAGEMENT: Files For Chapter 11 Protection in California
---------------------------------------------------------------
Cedar Management LLC aka Cedar Signature Home files for relief
under Chapter 11 of the Bankruptcy Code from its creditors,
Tiffany Kary of Bloomberg News reports.
Cedar Management owes $13.7 million to Keybank National
Association, $10.4 million to Redwood Mortgage Investors VII and
$8.2 million to Preferred Bank, Ms. Kary says. Cedar Management
listed assets of at least $10 million and debts between $50
million to $100 million, she adds.
Headquartered in Santa Monica, California, Cedar Management LLC
aka Cedar Signature Home develops real estate. It also develops
condominiums and townhomes near Santa Monica Beach.
CHARMING SHOPPES: Moody's Withdraws Ratings for Business Reasons
----------------------------------------------------------------
These ratings of Charming Shoppes, Inc. have been withdrawn:
-- The B2 Corporate Family rating;
-- The B2 Probability of Default Rating.
Moody's has withdrawn these ratings for business reasons. Moody's
added that the ratings were withdrawn because this issuer has no
rated debt outstanding.
CHURCH & DWIGHT: Buys Del Pharma Biz from Coty Inc. at $380 Mil.
----------------------------------------------------------------
Church & Dwight Co. Inc. signed a definitive agreement to acquire
the Del Pharmaceuticals Inc. business for $380 million in cash
from Coty Inc. The transaction, which is subject to regulatory
approval and other customary conditions, is expected to close in
July 2008.
Del Pharmaceuticals' net sales in the fiscal year ended Dec. 31,
2007 were approximately $100 million. Over three quarters of
those sales were from the Orajel(R) brand, the premium-priced #1
brand in the fast-growing oral analgesic category, with remaining
sales from a variety of other OTC brands.
Church & Dwight's 2007 net sales of $2.2 billion include a premium
oral care business led by the Arm & Hammer toothpaste and
SpinBrush brands. According to the company, adding the Orajel
brand will immediately increase the gross margin for the company
and will complement the strategy of building scale in core
categories. The brand will be integrated into the company's
existing oral care business.
"Orajel is a great addition to our existing portfolio and provides
access to a fast-growing segment of the attractive premium oral
care category," James R. Craigie, chairman and chief executive
officer, said. "Orajel also brings to our company a powerful
franchise that has developed great consumer loyalty."
"This transaction is consistent with our growth strategy of
strengthening our businesses by adding #1 or #2 brands in areas of
high growth potential with gross margins that are accretive to the
overall company," Mr. Craigie added.
"It was important for Coty to identify the most suitable purchaser
who will provide the best opportunity to grow this portfolio,"
Bernd Beetz, chief executive officer of Coty Inc., said. "While
these pharmaceutical brands are highly respected, we remain
focused on building and strengthening our core beauty business
comprised of fragrance, color cosmetics, skin care and
toiletries."
Church & Dwight expects to combine operations which will result in
additional cost synergies of over $10 million a year by the end of
2009. The Orajel products are expected to be integrated into
existing Church & Dwight manufacturing facilities by the end of
2009.
The transaction is structured as an asset purchase resulting in a
cash tax benefit from intangibles amortization with a net present
value of $90 million. The company will finance the acquisition
with an addition to its bank credit facility combined with
available cash and existing lines of credit. The acquisition is
expected to have a neutral impact on 2008 earnings per share due
primarily to one-time integration costs and the step-up of
inventory.
"We expect it to be accretive in 2009 and contribute meaningfully
to earnings and free cash flow," Mr. Craigie concluded. "We also
remain comfortable with our previously announced objective of
achieving $2.77 in earnings per share for 2008, including any
impact from the acquisition."
About Church & Dwight
Headquartered in Princeton, New Jersey, Church & Dwight Co. Inc.
(NYSE: CHD) -- http://www.churchdwight.com/-- manufactures and
markets a wide range of personal care, household and specialty
products, under the Arm & Hammer brand name and other well-known
trademarks.
CHURCH & DWIGHT: Moody's Keeps 'Ba1' Ratings on Del Pharma Deal
---------------------------------------------------------------
Moody's Investors Service affirmed Church & Dwight Company Inc.'s
Ba1 corporate family and probability of default ratings following
the proposed debt financing of the company's acquisition of the
assets of Del Pharmaceuticals (primarily the Orajel brand of
products) for $380 million. In addition, Moody's assigned a Baa3
to the company's $100 million revolving credit facility and
affirmed the Baa3 senior secured bank rating and Ba2 senior
subordinated note rating. The rating on the company's senior
convertible debenture was lowered to Ba2 from Ba1 as a result of
the increase in its subordination to the senior secured debt used
to finance the transaction. The rating outlook remains stable.
Ratings affirmed include These:
-- Corporate family rating at Ba1;
-- Probability of default rating at Ba1;
-- $641 million senior secured term loan A facility, affirmed at
Baa3 (LGD-2, 29%);
-- $250 million senior subordinated notes, affirmed at Ba2
(LGD-5, 87%);
Rating assigned:
-- $100 million senior secured revolving credit facility, Baa3
(LGD-2, 29%)
Rating downgraded includes These:
-- $100 million convertible senior debentures to Ba2 (LGD-4,
69%) from Ba1 (LGD-4, 56%);
-- Outlook is stable.
Church & Dwight's Ba1 corporate family rating continues to reflect
the company's strong operating performance and proven ability to
efficiently integrate new acquisitions as well as its strong
credit metrics, particularly for the Ba1 rating category. The
company's liquidity remains very good following the acquisition
supported by its improving free cash flow and interest coverage.
According to Christina Padgett, Senior Vice President, "Church &
Dwight's current acquisition fits well with the company's
portfolio of branded consumer products and is likely to contribute
to margin expansion. Importantly, the company's conservative
credit metrics allow for meaningful flexibility within the rating
category despite a mostly debt-financed acquisition."
Constraints on the rating include the company's modest size
relative to many of its competitors, its speculative grade
oriented capital structure, particularly the high proportion of
secured debt, the intense competition prevalent in the consumer
space and ongoing event risk given the focus on acquisitions.
Church & Dwight Company Inc., based in Princeton, New Jersey, is a
leading marketer and manufacturer of a broad portfolio of
household and personal care consumer products, historically under
the Arm and Hammer brand name, and is also the world's leading
sodium bicarbonate producer. Total revenues for the last twelve
months ended December 2007 were approximately $2.2 billion.
CHURCH & DWIGHT: Stable Performance Cues S&P to Lift Rating to BB+
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Church & Dwight Co. Inc. to 'BB+' from 'BB', and
assigned a 'BBB' senior secured debt and '1' recovery rating to
the company's planned up to $250 million term loan A facility.
In addition, Standard & Poor's raised all of its existing issue-
level ratings on the company by one notch, and removed the
existing ratings from CreditWatch, where they were placed with
positive implication on April 1, 2008. The outlook is stable.
"The upgrade is based on Church & Dwight's stable operating
performance in recent years and its successful track record of
managing its acquisitive growth strategy to leverage levels
consistent with the revised rating," said Standard & Poor's credit
analyst Patrick Jeffrey.
Standard & Poor's expects Church & Dwight's planned acquisition of
the over-the-counter pharmaceutical business (Orajel) from Coty
Inc. (unrated) for $380 million to result in pro forma debt
leverage of less than 3x, and expects this transaction to be
funded primarily with the new term loan maturing in 2012. "The
company's good free cash flow generation provides flexibility to
delever and help fund future acquisitions," said Mr. Jeffrey.
The rating on Princeton, New Jersey-based Church & Dwight reflects
the company's participation in the highly competitive personal
care segment of the consumer products industry, its lack of
geographic diversity, and its somewhat aggressive acquisition
strategy. This is mitigated to an extent by its established
consumer brands, stable operating performance, good free cash flow
generation, and moderately leveraged balance sheet.
CITIGROUP MORTGAGE: Moody's Downgrades Ratings on 45 Tranches
-------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 45
tranches from 13 Alt-A transactions issued by Citigroup Mortgage
Loan Trust. Seventeen tranches remain on review for possible
further downgrade. Additionally, 27 tranches were placed on
review for possible downgrade.
The collateral backing these transactions consists primarily of
first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The
ratings were downgraded, in general, based on higher than
anticipated rates of delinquency, foreclosure, and REO in the
underlying collateral relative to credit enhancement levels. The
actions are a result of Moody's on-going review process.
Complete rating actions are:
Issuer: Citigroup Mortgage Loan Trust Inc. 2005-7
-- Cl. 1-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-AIO1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-AIO2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-B1, Downgraded to Ba1 from Aa2
-- Cl. 1-B2, Downgraded to B3 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. 1-B3, Downgraded to Caa1 from Baa2; Placed Under Review
for further Possible Downgrade
Issuer: Citigroup Mortgage Loan Trust Series 2005-8
-- Cl. II-B1, Downgraded to A2 from Aa2
-- Cl. II-B2, Downgraded to Ba3 from A2
-- Cl. II-B3, Downgraded to B2 from Baa3; Placed Under Review
for further Possible Downgrade
Issuer: Citigroup Mortgage Loan Trust Series 2005-10
-- Cl. I-A12B, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. I-A34B, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. I-A5B, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. I-B1, Downgraded to Baa3 from Aa2
-- Cl. I-B2, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. I-B3, Downgraded to Caa1 from Ba2; Placed Under Review
for further Possible Downgrade
Issuer: Citigroup Mortgage Loan Trust, Series 2005-WF2
-- Cl. MF-1, Downgraded to Aa3 from Aa2
-- Cl. MF-2, Downgraded to Baa1 from A2
-- Cl. MF-3, Downgraded to B3 from Baa2
-- Cl. MF-4, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. MV-5, Downgraded to Baa2 from Baa1
-- Cl. MV-6, Downgraded to Caa1 from Baa2; Placed Under Review
for further Possible Downgrade
-- Cl. MV-7, Downgraded to Ca from Ba1
Issuer: Citigroup Mortgage Loan Trust 2006-4
-- Cl. B1, Downgraded to A1 from Aa2
-- Cl. B2, Downgraded to Ba2 from A2
-- Cl. B3, Downgraded to B1 from Baa3; Placed Under Review for
further Possible Downgrade
Issuer: Citigroup Mortgage Loan Trust 2006-AR3
-- Cl. 2-A12B, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 2-1AX, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-2AX, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A34B, Placed on Review for Possible Downgrade,
currently Aa1
Issuer: Citigroup Mortgage Loan Trust 2006-AR6
-- Cl. 2-A4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-M1, Downgraded to B2 from Aa2
-- Cl. 2-M2, Downgraded to B3 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. 2-M3, Downgraded to Caa1 from Ba1; Placed Under Review
for further Possible Downgrade
-- Cl. 2-M4, Downgraded to Ca from Ba3
Issuer: Citigroup Mortgage Loan Trust 2006-FX1
-- Cl. M-2, Downgraded to Baa2 from A2
-- Cl. M-3, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to Ca from Ba1
Issuer: Citigroup Mortgage Loan Trust Inc. 2006-WF1
-- Cl. M-1, Downgraded to Baa1 from Aa2
-- Cl. M-2, Downgraded to B2 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to Ca from Ba2
-- Cl. M-4, Downgraded to Ca from B1
-- Cl. M-5, Downgraded to Ca from Caa2
Issuer: Citigroup Mortgage Loan Trust Inc. 2006-WF2
-- Cl. M-1, Downgraded to Baa2 from Aa2
-- Cl. M-2, Downgraded to B2 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to Ca from Ba1
-- Cl. M-4, Downgraded to Ca from B3
-- Cl. M-5, Downgraded to Ca from Caa3
Issuer: Citigroup Mortgage Loan Trust 2007-AR1
-- Cl. A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. M1, Downgraded to B3 from Aa2; Placed Under Review for
further Possible Downgrade
-- Cl. M2, Downgraded to Ca from B1
Issuer: Citigroup Mortgage Loan Trust 2007-AR7
-- Cl. 3IO, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 4IO, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. B1, Downgraded to B3 from Aa2; Placed Under Review for
further Possible Downgrade
-- Cl. B2, Downgraded to Ca from B3
-- Cl. B3, Downgraded to Ca from Caa3
Issuer: Citigroup Mortgage Loan Trust 2007-OPX1
-- Cl. A-1A, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-1B, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-3A, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-3B, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-4A, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-4B, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-5A, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-5B, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. M-1, Downgraded to Ba1 from Aa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-2, Downgraded to B3 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to Ca from Ba3
-- Cl. M-4, Downgraded to Ca from B1
CLEBURNE & TM: Voluntary Chapter 11 Case Summary
------------------------------------------------
Lead Debtor: Cleburne & TM, L.P.
2911 E. Division St. Ste. 411
Arlington, TX 76011
Bankruptcy Case No.: 08-32193
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
65 Acres, L.P. 08-32186
IE 30, Inc. 08-32195
Corpus Sunrise Mall, L.P. 08-32196
Six Flags Mall, L.P. 08-32201
Arlington & TM, L.P. 08-32203
Lone Star Plaza 08-32205
Chapter 11 Petition Date: May 5, 2008
Court: Northern District of Texas (Dallas)
Debtors' Counsel: Joyce W. Lindauer, Esq.
Email: courts@joycelindauer.com
8140 Walnut Hill Lane, Ste. 301
Dallas, TX 75231
Tel: (972) 503-4033
Fax: (972) 503-4034
-- and --
Arthur I. Ungerman, Esq.
Email: arthur@arthurungerman.com
One Glen Lakes Tower
8140 Walnut Hill Ln., No. 301
Dallas, TX 75231
Tel: (972) 239-9055
Fax: (972) 239-9886
Estimated Assets: $10 million to $50 million
Estimated Debts: $1 million to $10 million
The Debtors did not file lists of their largest unsecured
creditors.
COMPASS MINERALS: Planned Note Redemption Cues S&P's Pos. Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'BB-' corporate credit rating, on Overland Park, Kansas-based
Compass Minerals International Inc. on CreditWatch with positive
implications.
"The CreditWatch listing followed the company's announcement that
it plans to redeem $70 million of 12% senior subordinated notes
due 2013 with existing sources of liquidity, thus lowering the
company's overall borrowing costs," said Standard & Poor's credit
analyst Anna Alemani. "The CreditWatch listing also reflects the
company's continued good operating performance and prospects for
sustained profitability and cash flow in the near term."
As of March 31, 2008, and pro forma for the announced debt
reduction, Compass Minerals' adjusted debt to EBITDA is 2.5x,
while funds from operation to total debt is 28%, measures that S&P
consider to be good for the current rating.
"In resolving the CreditWatch listing, we will meet with
management and review both its near- and intermediate-term
business and financial strategies," Ms. Alemani said. "If, as a
result, we were to raise the rating, we would limit it to one
notch."
COUNTRYWIDE FINANCIAL: Fitch Puts All Ratings Under Evolving Watch
------------------------------------------------------------------
Fitch Ratings has placed all ratings of Countrywide Financial
Corporation on Rating Watch Evolving, removing them from Rating
Watch Positive. The Rating Watch Evolving reflects further
disclosure surrounding Bank of America's treatment of CFC debt
following the acquisition. While Fitch continues to believe that
BAC's acquisition of CFC will likely close, the rating action
considers uncertainty over the transaction's final structure.
As disclosed in BAC's amended S-4 filed on May 1, 2008, BAC left
open the possibility that any remaining CFC debt could remain
obligations of CFC and not BAC. Further, BAC made no assurances
that such debt would be redeemed, assumed or guaranteed. Any
structure that does not result in full BAC support of CFC could
result in some or all CFC ratings being notched below those of
BAC, with the potential for significant notching, including CFC
debt being downgraded below its current level. Conversely,
depending upon the ultimate structure, some or all of CFC's
ratings could be equalized with BAC ratings. (BAC rated 'AA/F1+',
Rating Watch Negative by Fitch.)
CFC's ratings had been on Rating Watch Positive pending the
acquisition of CFC by BAC, announced in January 2008. Since that
time, BAC has repeatedly indicated its expectation that the
transaction will be completed and Fitch continues to believe that
the probability that the transaction is completed remains
extremely high. However, BAC has been unusually silent regarding
the ultimate structure of the transaction
CFC's results have deteriorated further as the residential
mortgage sector continues to weaken. First quarter results
produced a net loss of $983 million, more than double the loss
recorded in the final quarter of 2007. CFC recorded sharply
higher loan loss provisions, increased provisions for
representations and warranty claims, increased provisions for
captive mortgage insurance claims, and a high, albeit reduced,
level of impairment of retained interests. Given CFC's operating
difficulties and the stressed environment, CFC's ratings would be
likely be downgraded absent the capital and liquidity support
already provided by BAC, and more likely still if the merger is
not consummated.
These ratings have been removed from Rating Watch Positive to
Rating Watch Evolving
Countrywide Financial Corp.
-- Long-term Issuer Default Rating 'BBB-';
-- Short-term IDR 'F3';
-- Individual 'C/D';
-- Senior debt 'BBB-';
-- Subordinated 'BB+;
-- Commercial paper 'F3';
-- Support '5';
-- Support floor 'NF'.
Countrywide Bank FSB
-- Long-term IDR 'BBB-';
-- Short-term IDR 'F3';
-- Individual 'C/D';
-- Senior debt 'BBB-';
-- Long-term deposits 'BBB-';
-- Short-term deposits 'F3';
-- Short-term debt 'F3';
-- Support '5';
-- Support floor 'NF'.
Countrywide Home Loans, Inc.
-- Long-term IDR 'BBB-';
-- Short-term IDR 'F3';
-- Senior debt 'BBB-';
-- Commercial paper 'F3'.
Countrywide Capital I, III, IV, V
-- Trust preferred 'BB'.
DELPHI CORP: Plastech Can Return Tooling to Delphi Automotive
-------------------------------------------------------------
Plastech Engineered Products Inc. and its debtor-affiliates
obtained permission from the U.S. Bankruptcy Court for the Eastern
District of Michigan to return certain tooling equipment to Delphi
Automotive Systems LLC.
As reported in the Troubled Company Reporter on April 21, 2008,
the Debtors sought authority specifically to:
(a) surrender certain tooling owned by Delphi Automotive
Systems, LLC, that is in the Debtors' possession; and
(b) sell to Delphi certain de minimis finished goods inventory
made with the Delphi tooling for $4,671, free and clear of
liens.
The Debtors also asked the Court to lift the automatic stay to
effectuate the release of tooling and the sale of the de minimis
inventory to Delphi.
The Debtors currently are in possession of certain tooling which
is fully paid for and is owned by Delphi at a plant in Croswell,
Michigan, that was used to make service parts for Delphi's
Powertrain Division that are no longer in production.
The Debtors informed that the Inventory represents idle assets
that are of little or no use or value to the Debtors' estates or
restructuring efforts, as the Inventory consists of service parts
that are no longer in production. The Debtors have determined in
their sound business judgment that the sale of the Inventory to
Delphi is the most efficient way to convert idle assets of de
minimis value into cash.
The Debtors believe that the sale of the inventory to Delphi is
commercially reasonable in light of the assets being sold and as
a result, the value of the proceeds from the sale fairly reflects
the value of the Inventory sold. The Debtors proposed that any
party with a lien on the Inventory be given a corresponding
security interest in the proceeds of the sale. In light of these,
the requirements of Section 363(f) of the Bankruptcy Code would be
satisfied for any proposed sales free and clear of liens, the
Debtors said.
Moreover, because the Debtors have no further need for the Delphi
Tooling, the Debtors believe that the automatic stay should be
lifted pursuant to Section 362(d) of the Bankruptcy Code to allow
Delphi to take possession of the Delphi Tooling and to deem the
applicable purchase orders between Delphi and the Debtors
terminated upon the return of the Delphi Tooling and payment for
the Inventory.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry. Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is certified
as a Minority Business Enterprise by the state of Michigan.
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States. The company's products are
sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The Debtors
chose Jones Day as their special corporate and litigation counsel.
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services. The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) --
http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology. The company's
technology and products are present in more than 75 million
vehicles on the road worldwide. Delphi has regional headquarters
in Japan, Brazil and France.
The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007. The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.
DELPHI CORP: Court Extends Exclusive Plan-Filing Period to Aug. 31
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended Delphi Corp. and its debtor-affiliates' exclusive periods
to file a plan of reorganization until 30 days after substantial
consummation of the confirmed First Amended Joint Plan of
Reorganization or any modified Plan, and their exclusive periods
to solicit acceptances of that Plan until 90 days after
substantial consummation of the First Amended Plan or modified
Plan.
The Court ruled that:
(i) the Debtors' exclusive period under Section 1121(d) of the
Bankruptcy Code for filing a plan of reorganization, as
between the Debtors and the Official Committee of Unsecured
Creditors and the Official Committee of Equity Security
Holders is extended through and including August 31, 2008.
(ii) The Debtors' exclusive period under Section 1121(d) for
soliciting acceptance of a plan of reorganization, as
between the Debtors and the Statutory Committees, is
extended through and including October 31, 2008.
As reported in the Troubled Company Reporter on April 17, 2008,
out of an abundance of caution and to ensure clarity with their
stakeholders, including their customers and supplies, the Debtors
sought an extension of the Exclusive Periods to prevent any lapse
in exclusivity, John Wm. Butler, Jr., Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, in Chicago, Illinois, clarified.
A further extension of the Exclusive Periods, Mr. Butler said, is
justified by the significant progress the Debtors have made
toward emerging from Chapter 11. After obtaining confirmation of
the First Amended Plan, the Debtors secured exit financing and
met all other conditions to the effectiveness of the Plan and
Investment Agreement and were prepared to emerge from Chapter 11.
The Debtors' efforts to emerge from Chapter 11, however, were
affected by severe dislocations in the capital markets that began
late in the second quarter of 2007 and that have continued
through the present, according to Mr. Butler. Although the
Debtors eventually obtained the exit financing required by the
First Amended Plan, the turbulence in the capital markets was a
principal cause of the delay in the Debtors' emergence from
Chapter 11 before the end of 2007, he maintained. Moreover, the
decision by Appaloosa Management L.P. and the other Plan
Investors to not honor their commitments in the parties' New
Equity Purchase and Commitment Agreement prevented the Debtors
from emerging on April 4, 2008.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) --
http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology. The company's
technology and products are present in more than 75 million
vehicles on the road worldwide. Delphi has regional headquarters
in Japan, Brazil and France.
The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007. The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 127; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DELPHI CORP: GM's Charges on Delphi Issues Reach $8.3 Billion
-------------------------------------------------------------
General Motors Corp. said that during the first quarter of 2008,
it took a non-cash charge of $731,000,000 to increase its
liability for estimated net costs associated with its support of
Delphi Corp.'s bankruptcy and restructuring efforts.
"This charge primarily results from updated estimates reflecting
uncertainty around the nature, value and timing of GM's
recoveries," GM said. Delphi was scheduled to emerge from
bankruptcy in mid-April but obtained problems with its exit
equity financing from Appaloosa Management, PC, thus affecting
the timing of GM's recoveries from Delphi.
General Motors has now recorded charges totaling $8,300,000,000
in connection with Delphi-related issues, Reuters reports.
GM has recently agreed to advance Delphi $650,000,000 in 2008 in
anticipation of settlement agreements between the companies that
would have been paid to the supplier had Delphi emerged from
court protection as expected in April.
General Motors also recorded a $1,450,000,000 non-cash partial
impairment charge for its equity investment in its finance unit
GMAC LLC for the first quarter of 2008.
General Motors reported net losses of $3,251,000,000 on
$42,700,000,000 of revenues for the first quarter. GM said its
results were marked by improved adjusted automotive operating
performance, rapid growth in emerging markets, continued cost
performance in North America operations and liquidity of nearly
$24,000,000,000, despite the impact of the American Axle strike
and weakness in the U.S. auto industry.
Bloomberg News said the loss was smaller than analysts estimated,
causing GM shares to gain 9.4% in the New York Stock Exchange.
GM's loss excluding costs for Delphi and the GMAC was
$350,000,000, or 62 cents a share, beating the $1.52 average
estimate of 13 analysts surveyed by Bloomberg.
GM said that in light of the current state of the U.S. economy
and automotive industry, it has revised its 2008 U.S. industry
seasonally adjusted annual rate outlook to the mid to high
15 million unit range, down from the low 16 million unit range.
As a result of the anticipated softer automotive industry, GM
announced earlier this week that it will eliminate a shift of
production at four assembly plants: Janesville, Wisconsin;
Pontiac and Flint, Michigan; and Oshawa, Ontario.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) --
http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology. The company's
technology and products are present in more than 75 million
vehicles on the road worldwide. Delphi has regional headquarters
in Japan, Brazil and France.
The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007. The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 127; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DIAMOND GLASS: Can Hire Getzler Henrich as Financial Advisor
------------------------------------------------------------
Diamond Glass Inc. and DT Subsidiary Corp. obtained permission
from the U.S. Bankruptcy Court for the District of Delaware to
employ Getzler Henrich & Associates LLC as their management
consultant and financial advisor, nunc pro tunc to April 1, 2008.
Getzler Henrich is expected to assist the Debtors' management in
the development of its restructuring options, determination of the
Debtors' cash requirements, and in the bankruptcy process to
minimize costs associated with the Chapter 11 filing.
William H. Henrich, a vice chairman at Getzler Henrich, told the
Court that the firm's professionals bill at these hourly rates:
Principal & Managing Director $395 - $525
Director & Specialist $335 - $475
Associate $235 - $335
Mr. Henrich assured the Court that the firm is disinterested as
that term is defined in Section 101(14) of the U.S. Bankruptcy
Code.
About Diamond Glass
Based in Kingston, Pennsylvania, Diamond Glass Inc. --
http://www.diamongtriumph.com/and
http://www.daimondtriumphglass.com/-- is a provider of automotive
glass replacement and repair services.
The company and and its debtor-affiliate DT Subsidiary Corp.,
filed for Chapter 11 bankruptcy petition on April 1, 2008 (Bankr.
D. Del. Lead Case No. 08-10601). Michael P. Richman, Esq., at
Foley & Lardner LLP, and Donald J. Bowman Jr., Esq., at Young
Conaway Stargatt & Taylor LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for bankruptcy
protection, they listed estimated assets of between $10 million to
$50 million and estimated debts of between $100 million to $500
million.
DIAMOND GLASS: Court Okays NatCity as Investment Banker
-------------------------------------------------------
Diamond Glass Inc. and DT Subsidiary Corp. obtained authority from
the U.S. Bankruptcy Court for the District of Delaware to employ
NatCity Investments Inc. as their investment banker, nunc pro tunc
to April 1, 2008.
NatCity is expected to assist and advise the Debtors in their
contemplated sale of their assets.
J. Scott Victor, a senior managing director at NatCity, told the
Court that, as compensation, the firm will receive from the
Debtors:
a) an initial fee of $50,000;
b) monthly fees of $25,000;
c) a restructuring fee of $750,000;
d) a sale fee of $750,000 or 1.75% of the total sale
consideration up to $45 million, and 2.5% of the total
consideration in excess of $45 million; and
e) other necessary fees and expenses.
Mr. Victor assured the Court that the firm is disinterested as
that term is defined in Section 101(14) of the U.S. Bankruptcy
Code.
About Diamond Glass
Based in Kingston, Pennsylvania, Diamond Glass Inc. --
http://www.diamongtriumph.com/and
http://www.daimondtriumphglass.com/-- is a provider of automotive
glass replacement and repair services.
The company and and its debtor-affiliate DT Subsidiary Corp.,
filed for Chapter 11 bankruptcy petition on April 1, 2008 (Bankr.
D. Del. Lead Case No. 08-10601). Michael P. Richman, Esq., at
Foley & Lardner LLP, and Donald J. Bowman Jr., Esq., at Young
Conaway Stargatt & Taylor LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for bankruptcy
protection, they listed estimated assets of between $10 million to
$50 million and estimated debts of between $100 million to $500
million.
DR HORTON: Posts $1 Billion Net Loss in Quarter Ended March 31
--------------------------------------------------------------
D.R. Horton Inc. reported net loss of $1.3 billion for its second
fiscal quarter ended March 31, 2008, compared with net income of
$51.7 million for the same quarter of fiscal 2007.
The quarterly results included $834.1 million in pre-tax charges
to cost of sales for inventory impairments and write-offs of
deposits and pre-acquisition costs related to land option
contracts that the company does not intend to pursue.
Homebuilding revenue for the second quarter of fiscal 2008 totaled
$1.6 billion, compared to $2.6 billion in the same quarter of
fiscal 2007. Homes closed in the current quarter totaled 6,719,
compared to 9,792 homes closed in the year ago quarter.
For the six months ended March 31, 2008, the company reported a
net loss totaling $1.4 billion compared with net income of
$161.4 million in 2007. The six-month results included pre-tax
charges to cost of sales of $1.1 billion of inventory impairments
and write-offs of deposits and pre-acquisition costs related to
land option contracts that the company does not intend to pursue.
Homebuilding revenue for the six months ended March 31, 2008,
totaled $3.3 billion, compared to $5.4 billion for the same period
of fiscal 2007. Homes closed in the six-month period totaled
13,268, compared to 19,994 homes closed in the same period of
fiscal 2007.
During the three months ended March 31, 2008, the company recorded
a valuation allowance of $714.3 million against its deferred tax
assets, of which $385.0 million relates to the deferred tax assets
existing as of the beginning of the fiscal year, and the remainder
represents a valuation allowance for deferred tax assets created
during the six months ended March 31, 2008. The deferred tax
asset valuation allowance is included in income tax expense for
the three and six-month periods ended March 31, 2008.
The company's sales backlog of homes under contract at March 31,
2008, was 8,947 homes or $2.1 billion, compared to 16,885 homes
or $4.8 billion at March 31, 2007. Net sales orders for the
second quarter ended March 31, 2008, totaled 7,528 homes or
$1.7 billion, compared to 9,983 homes or $2.6 billion for the same
quarter of fiscal 2007.
The company's cancellation rate, cancelled sales orders divided by
gross sales orders, for the second quarter of fiscal 2008 was 33%.
Net sales orders for the first six months of fiscal 2008 were
11,773 homes or $2.6 billion, compared to 18,754 homes or
$4.9 billion for the same period of fiscal 2007.
"Although market conditions in the homebuilding industry remain
challenging, we continue to focus on reducing inventory and
generating cash flow from operations," Donald R. Horton, chairman
of the board, said. "We reduced our homes in residential
inventory to approximately 15,100 homes at the end of March, down
approximately 13% from the end of December.
"We generated approximately $450 million of cash flow from
operations this quarter and exceeded our fiscal year goal of at
least $1 billion in only six months," Mr. Horton continued. "We
ended the quarter with a homebuilding cash balance of
$519 million. We also maintained our focus on controlling our
costs, reducing our homebuilding SG&A expenses by approximately
$88 million in our quarter ended March 31, 2008, compared to the
year ago quarter."
At March 31, 2008, the company's balance sheet showed total assets
of $8.9 billion, total liabilities of $4.8 billion and total
stockholders' equity of $4.1 billion.
Dividend Payment
The company has declared a quarterly cash dividend of $0.075 per
share. The dividend is payable on May 29, 2008, to stockholders
of record on May 19, 2008.
About D.R. Horton
Based in Fort Worth, Texas, D.R. Horton Inc. (NYSE: DHI) --
http://www.drhorton.com/-- is engaged in the construction and
sale of high quality homes with sales prices ranging from $90,000
to over $900,000. D.R. Horton also provides mortgage financing
and title services for homebuyers through its mortgage and title
subsidiaries. D.R. Horton operates in 83 markets in 27 states in
the Northeast, Southeast, South Central, Southwest, California and
West regions of the United States.
* * *
Moody's Investors Service placed D.R. Horton Inc.'s corporate
family, senior unsecured debt and probability of default ratings
at 'Ba1' in December 2007. The ratings still hold to date with a
negative outlook.
DURA AUTOMOTIVE: Court Approves Merger with Automotive Aviation
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Dura Automotive Systems Inc. and its debtor-affiliates to merge
Automotive Aviation Partners, LLC, into Aviation Operating
Company, LLC.
Upon the merger, there will be no restrictions on the ability to
sell assets held by either entity to a third party other than the
restrictions contained in the Existing Revolver DIP Credit
Agreement and the Replacement Term DIP Credit Agreement.
As reported in the Troubled Company Reporter on April 21, 2008,
Aviation has a clause in its operating agreement that requires
dissolution upon the occurrence of certain events, including the
bankruptcy of a member, Christopher M. Samis, Esq., at Richards,
Layton & Finger, P.A., in Wilmington, Delaware, said.
Minnesota law does not allow the dissolution requirement to be
reversed after the bankruptcy has occurred, Mr. Samis said.
Minnesota law further limits Aviation solely to undertaking
activities to wind up operations once the liquidation clause has
been triggered, he adds.
Due to the automatic stay, liquidation of Aviation has not been
completed, Mr. Samis said. However, out of an abundance of
caution and as part of a general corporate reorganization, the
Debtors desire to eliminate Aviation to resolve any corporate
governance ambiguity. Thus, the Debtors believe that Aviation
should be merged into Aircraft Operating.
Mr. Samis related that Aviation is a guarantor of the Debtors' DIP
Facility and the Second Lien Facility, Senior Notes, and
Subordinated Notes. Aviation and Aircraft Operating are both
guarantors and obligors under the debts. Aviation has
approximately $5,600,000 in assets and there have been no
prepetition claims schedule for or filed against Aviation other
than the debts. Aircraft Operating also has no prepetition filed
against it other than the debts. As a result, the Debtors
believe the merger will not affect recoveries under the Revised
Plan and does not prejudice any third party creditors.
Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq:
DRRA) -- http://www.DURAauto.com/-- is an independent designer
and manufacturer of driver control systems, seating control
systems, glass systems, engineered assemblies, structural door
modules and exterior trim systems for the global automotive
industry. The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries. DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.
The company has three locations in Asia -- China, Japan and Korea.
It has locations in Europe and Latin-America, particularly in
Mexico, Germany and the United Kingdom.
The Debtors filed for chapter 11 petition on Oct. 30, 2006,
(Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq.,
Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at
Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy
proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron,
Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors'
co-counsel. Baker & McKenzie acts as the Debtors' special counsel.
Togut, Segal & Segal LLP is the Debtors' conflicts counsel.
Miller Buckfire & Co., LLC is the Debtors' investment banker.
Glass & Associates Inc., gives financial advice to the Debtor.
Kurtzman Carson Consultants LLC handles the notice, claims and
balloting for the Debtors and Brunswick Group LLC acts as their
Corporate Communications Consultants for the Debtors.
As of Jan. 31, 2008, the Debtor had $1,503,682,000 in total
assets and $1,623,632,000 in total liabilities.
On April 3, 2008, the Court approved the Debtors' revised
Disclosure Statement explaining their revised Chapter 11 plan of
reorganization. A plan confirmation hearing is set for May 13,
2008.
(Dura Automotive Bankruptcy News, Issue No. 53; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
DURA AUTOMOTIVE: Wants to Expand Assessment Tech's Scope of Work
----------------------------------------------------------------
Dura Automotive Systems Inc. and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to expand the scope of Assessment Technologies, Ltd.'s
employment to include property tax consulting services with
respect to tax year 2008 and future tax years, pursuant to a
first amended service agreement between the Debtors and ATL,
dated March 1, 2008.
The Debtors also ask the Court to allow them to continue to
employ ATL pursuant to the service agreement, dated March 7,
2007.
Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A.,
in Wilmington, Delaware, relates that the Debtors believe that
extending ATL's services to tax year 2008 and beyond is
reasonable, appropriate, and will help maximize the value of
their estates.
Under the Service Agreement Amendment, ATL's fee for tax year
2008 and future years is 25% or 35% of all tax savings depending
on the nature of the required tax resolution process.
The Service Agreement Amendment also provides that the Debtors
are responsible for all reasonable and necessary expenses
incurred in connection with the services provided for tax year
2008 and beyond. Anticipated expenses include, but are not
limited to, special property tax counsel legal fees, third party
appraisal fees, expert testimony and travel expenses.
Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq:
DRRA) -- http://www.DURAauto.com/-- is an independent designer
and manufacturer of driver control systems, seating control
systems, glass systems, engineered assemblies, structural door
modules and exterior trim systems for the global automotive
industry. The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries. DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.
The company has three locations in Asia -- China, Japan and Korea.
It has locations in Europe and Latin-America, particularly in
Mexico, Germany and the United Kingdom.
The Debtors filed for chapter 11 petition on Oct. 30, 2006,
(Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq.,
Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at
Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy
proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron,
Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors'
co-counsel. Baker & McKenzie acts as the Debtors' special counsel.
Togut, Segal & Segal LLP is the Debtors' conflicts counsel.
Miller Buckfire & Co., LLC is the Debtors' investment banker.
Glass & Associates Inc., gives financial advice to the Debtor.
Kurtzman Carson Consultants LLC handles the notice, claims and
balloting for the Debtors and Brunswick Group LLC acts as their
Corporate Communications Consultants for the Debtors.
As of Jan. 31, 2008, the Debtor had $1,503,682,000 in total
assets and $1,623,632,000 in total liabilities.
On April 3, 2008, the Court approved the Debtors' revised
Disclosure Statement explaining their revised Chapter 11 plan of
reorganization. A plan confirmation hearing is set for May 13,
2008.
(Dura Automotive Bankruptcy News, Issue No. 53; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
EDUCATION MANAGEMENT: $22.5MM Add'l Facility Cues S&P to Hold Rtng
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed the bank loan rating
on Education Management LLC's (B/Stable/--) secured bank financing
following the addition of $22.5 million to the company's
$300 million revolving credit facility. The issue rating is 'B+',
one notch above the corporate credit rating on the company, and
the recovery rating remains '2', indicating S&P's expectation of
substantial (70%-90%) recovery in the event of a payment default.
With the add-on, the facility consists of a $322.5 million
revolving credit facility due 2012 and a $1.18 billion term loan B
due 2013.
In addition, S&P affirmed the issue-level rating on the company's
unsecured notes at 'CCC+', two notches below the corporate credit
rating. The recovery rating remains '6' as S&P expect negligible
(0%-10%) recovery in the event of a payment default.
EOS AIRLINES: Wants to Employ Squire Sanders as Bankruptcy Counsel
------------------------------------------------------------------
EOS Airlines Inc. asks permission from the U.S. Bankruptcy Court
for the Southern District of New York to employ Squire Sanders &
Dempsey LLP as its general bankruptcy counsel in its Chapter 11
case.
Squire Sanders will, among others, advise the Debtor with respect
to its powers and duties as debtor-in-possession in the continue
operations of its business, attend meetings and negotiate with
various parties-in-interest, and to take all necessary action to
protect and preserve the Debtor's estates.
Tim J. Robinson, Esq., counsel at Squire Sanders, tells the Court
that the firm's professionals bill at these hourly rates:
Partners $275 - $870
Associates and Counsel $190 - $650
Legal Assistants $95 - $300
Mr. Robinson assures the Court that the firm is disinterested as
that term is defined in Section 101(14) of the U.S. Bankruptcy
Code.
About EOS Airlines
Based in Purchase, New York, EOS Airlines, Inc. --
http://www.eosairlines.com/-- is a transatlantic airline. The
company filed for Chapter 11 protection April 26, 2008 (Bankr.
S.D.N.Y. Case No.08-22581). Stephen D. Lerner, Esq., at Squire
Sanders & Dempsey, LLP, represents the Debtor in its restructuring
efforts. When the Debtor filed for protection against it
creditors, it listed total assets of $70,233,455 and total debts
of $34,858,485.
EVIVA COFFEE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Eviva Coffee & Tea Co., Inc.
6789 Industrial Loop
Greendale, WI 53129
Bankruptcy Case No.: 08-24469
Chapter 11 Petition Date: April 29, 2008
Court: Eastern District of Wisconsin (Milwaukee)
Judge: James E. Shapiro
Debtor's Counsel: Dayten P. Hanson, Esq.
Email: dayten@ameritech.net
Hanson & Payne, LLC
1841 N. Prospect Ave.
Milwaukee, WI 53202
Tel: (414) 271-4550
Fax: (414) 271-7731
Estimated Assets: $100,000 to $500,000
Estimated Debts: $1 million to $10 million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
James Gendron $590,000
Attn: WandMLawP, LLC
26555 Evergreen, Ste. 1315
Southfield, MI 48076
Chase Bank JP Morgan Land and Building; $568,830
OH2-5170 S. Main St. value of security:
Akron, OH 44311 $400,000
Kenkaf Importing $409,386
500 Alen Road. Ste. 211-212
Markham, Ontario
Irwin Union Bank FSB $309,000
555 N. Plankinton Ave.
Milwaukee, WI 53203
Direct Capital $71,228
TEC Foods $70,000
Vournas Coffee Co $51,906
US Bank $48,000
Lyon Financial $43,243
Evans Leasing $42,000
American Express $31,365
Internal Revenue Service Withholding taxes $28,000
2nd quarter of
2007
Andeano Coffee Co. $24,000
Marlin Bank $20,541
Chase Visa $18,703
Nestle USA $13,414
Berenz Packaging $10,468
Community Bank $11,000
M&I Bank $11,000
Susguehanna Commercial $10,000
Finance
FIRST MARBLEHEAD: To Trim Down Operating Cost in Student Loan Unit
------------------------------------------------------------------
The First Marblehead Corporation plans to further reduce operating
expenses related to its student loan business. The steps were
aimed to reposition the company in a volatile student loan market,
including a reduction in operating expenses and a streamlining of
operations.
Under the plan, First Marblehead expects to lower its operating
expenses by approximately $200 million, before tax on an
annualized basis and has eliminated approximately 500 positions at
all levels of the company including management and executive
positions.
The measure was a result of the voluntary bankruptcy petition by
The Education Resources Institute, followed by a major client's
decision to exit the private student loan industry and terminate
its relationship with the company well as the continued disruption
in the capital markets.
"We believe that the private student loan market will continue to
fill a vital niche in helping students achieve their education
dreams," Jack Kopnisky, First Marblehead CEO and President, said.
"The cost of college is rising, federal aid is not keeping pace,
families of college-eligible students are saving less, and more
students than ever are going to college."
"Our model going forward will leverage our marketing coordination
services, processing, and capital markets expertise to facilitate
our planned transition into a diversified education finance
products and services company to serve students and their
families," Mr. Kopnisky added. "We are making the difficult
operational decisions we believe will position us to best take
advantage of these opportunities."
"This has been an extraordinarily challenging business environment
for our company," Mr. Kopnisky related. "The market and credit
conditions have not improved and TERI's bankruptcy filing has
forced our business situation to change quickly. We have taken
many steps to move our company forward. Our action plan includes
prudent expense management and streamlining our business
operations."
"We are taking the necessary actions to operate the company
efficiently in this environment," Mr. Kopnisky said. "Although it
is not easy, it also is necessary to make a significant reduction
in our workforce at this time. We appreciate the affected
employees' service to the company and will assist them with
severance benefits, health care assistance and outplacement
services."
The company will release its financial and operating results for
the three-month and nine-month periods ended March 31, 2008, after
market close on May 8, 2008,
About The First Marblehead
First Marblehead Corporation -- http://www.firstmarblehead.com/--
provides financial solutions that help students achieve their
dreams. The company helps meet the growing demand for private
education loans by providing national and regional financial
institutions and educational institutions, well as businesses and
other enterprises, with an integrated suite of design,
implementation and securitization services for student loan
programs.
First Marblehead supports responsible lending for borrowers and is
a strong proponent of the smart borrowing principle, which
encourages students to access scholarships, grants and federally
guaranteed loans before considering private education loans. At
Dec. 31, 2008, the company's balance sheet showed total assets of
$1,584,564,000, total liabilities of $663,514,000 and total
stockholders' equity of $921,050,000
* * *
As reported by the Troubled Company Reporter on April 9, 2008,
First Marblehead's stocks dropped 37% after The Education
Resources Institute, guarantor of its loans, filed for Chapter 11
protection. According to Bloomberg News, First Marblehead
declined $2.84 to $4.86 in New York Stock Exchange trading after
TERI's bankruptcy filing. The descent is the biggest one-day drop
in the securities' record and reduces First Marblehead below 89%
for the past 12 months.
First Marblehead is scheduled as TERI's largest unsecured
creditor, holding claims of $11 million, according to papers TERI
filed in bankruptcy court.
First Marblehead said it is analyzing the implications of TERI's
Chapter 11 filing on its lenders, investors, borrowers, well as
the The National Collegiate Student Loan Trusts.
FGIC CORP: Negotiates with Potential Investors on Revamp Proposals
------------------------------------------------------------------
FGIC Corp. will discuss proposals to revamp its Financial Guaranty
Insurance Co. unit with the potential investors.
FGIC has commenced negotiations with potential investors and other
parties regarding the company's plan to split its bond-insurance
business into public and private units, The Wall Street Journal
reports.
According to the report, the proposal involves restructuring its
insurance operations to form a new financial guaranty insurer.
Potential deals include raising capital, selling all or part of
the company, or a volume of reinsurance transaction on all or
parts of FGIC's business, the report says.
In a press statement, a FGIC spokesman said: "We are encouraged to
see the high degree of interest that has been expressed in FGIC.
We plan to work expeditiously to finalize a transaction that is in
the best interests of all of our constituents, including our
policyholders."
FGIC will continue to work with the New York Insurance Department
and Superintendent Eric Dinallo, various reports note.
FGIC has hired Goldman Sachs Group Inc. to assist in the weighing
of the options, WSJ says.
In a press statement, FGIC said that discussion will continue in
the next several weeks, while investors complete their due
diligence. Definitive proposals are expected to be submitted at
the end of this period.
About FGIC
FGIC Corporation is a holding company whose primary operating
subsidiaries, Financial Guaranty Insurance Corporation and FGIC UK
Limited, provide credit enhancement and protection products to the
public finance and structured finance markets throughout the
United States and internationally. For the nine months ended
Sept. 30, 2007, FGIC reported net operating income available to
common shareholders of $62.4 million. As of Sept. 30, 2007, FGIC
had shareholders' equity of approximately $2.4 billion.
FGIC guaranteed about $315 billion of debt as of September 2007.
Financial Guaranty Insurance Co. -- http://www.fgic.com/-- has
enjoyed a reputation for financial strength, underwriting
discipline and superior client service. As a leading financial
guaranty insurance company, FGIC provides credit enhancement on
infrastructure finance and structured finance securities
worldwide, enabling bond issuers to obtain capital cost
effectively and enhancing their access to the capital markets.
* * *
Financial Guaranty Insurance Company has lost its premium "AAA"
rating from all three ratings firms.
As reported in the Troubled Company Reporter on Feb. 11, 2008,
Fitch Ratings downgraded its ratings of FGIC's insurer financial
strength to 'AA' from 'AAA', on Jan. 30, 2008. This rating
remains on Rating Watch Negative. Standard & Poor's stripped FGIC
of its key AAA rating on Jan. 31, saying FGIC may fail to raise
the capital needed to cushion possible losses on complex
securities that have plunged in value.
As reported in the Troubled Company Reporter on Feb. 15, 2008,
Moody's Investors Service downgraded to A3 the insurance financial
strength ratings of FGIC's operating subsidiaries, including
Financial Guaranty Insurance Company and FGIC UK Limited. Moody's
also downgraded FGIC's senior debt rating to Ba1 from Aa2, and the
contingent capital securities ratings of Grand Central Capital
Trusts I-VI to Baa3 from Aa2.
FORD MOTOR: CAW Union Members Ratify New Labor Agreement
--------------------------------------------------------
For the first time in its history, Ford Motor Company of Canada,
Limited has reached a collective bargaining agreement with the
Canadian Auto Workers more than four months before the current
contract expires. Ford employees represented by the CAW ratified
the new deal in a vote held May 4, 2008.
The early settlement brings stability to Ford's operations as it
prepares to launch the new Ford Flex crossover vehicle at the
Oakville Assembly Complex, which also builds the Ford Edge and
Lincoln MKX. Ford disclosed plans to add 500 positions to
increase production at the Oakville plant due to high demand for
the Ford Edge and Lincoln MKX, and to prepare for the start of
production of the Ford Flex.
"This agreement is the right solution for the Canadian
marketplace," Stacey Allerton Firth, vice president, human
resources, Ford of Canada, said. "The terms recognize the
importance of our employees' contributions and improves the
competitiveness of the Canadian operations."
"It's a credit to the relationship we have with the CAW that we
were able to reach a responsible agreement in record time. Both
the union and the company realized that we had to work
collaboratively, with complete transparency, in order to find
innovative solutions to the challenges facing the industry."
Highlights of the agreement include:
* Each CAW-represented employee receives a $2,200 productivity
and quality bonus upon ratification to recognize their
efforts in helping Ford become one of the best in the
industry in product quality.
* Cost-of-living allowance payments are frozen for the next 16
months. Quarterly COLA adjustments resume in December 2009.
* Effective immediately, a unique wage rate has been
established -- during the first three years of employment,
new employees earn 70% of base wages, COLA payments are
suspended, and Supplemental Unemployment Benefits and time-
off provisions are phased in. After three years, employees
receive 100% of base wages and benefits.
* Health care savings generated through a new 10% co-pay
program for prescription drugs and a cap on long-term care
provisions.
* A 40-hour-per-year reduction in vacation pay, offset by a
$3,500 cash payment in January 2009.
* Production at the St. Thomas Assembly Plant, near London,
Ontario is extended by one year to 2011.
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 March 28, 2008,
Standard & Poor's Ratings Services said that the ratings and
outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated
B/Stable/B-3) were not affected by Ford's announcement of an
agreement to sell its Jaguar and Land Rover units to Tata Motors
Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of
pension contributions by Ford for Jaguar-Land Rover).
As reported in the Troubled Company Reporter on Feb. 15, 2008,
Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor
Company and Ford Motor Credit Company at 'B', and maintained the
Rating Outlook at Negative.
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 United Auto
Workers.
FRENCH LICK: Completed Exchange Cues Moody's Rating Lift to 'Caa3'
------------------------------------------------------------------
Moody's Investors Service upgraded French Lick Resorts and Casino,
LLC's probability of default rating to Caa3 from D. The corporate
family rating and the rating on the mortgage notes were affirmed
at Caa3. The rating outlook is stable. These actions reflect
Moody's assessment of the company's financial profile following
the completion of the distressed exchange and the rating agency's
expectations with regards to FLRC's business performance in the
near term.
Despite the $128 million notes redemption and the repayment of the
revolver borrowings allowed by the cash injections of Cook Group
Incorporated, the shareholder, Moody's believes that the risk of
default in the near term is still above 50%, with a pro-forma
leverage ratio (adjusted for the recent debt redemption) in excess
of 10 times as of Dec. 31, 2007 and a weak internal liquidity.
The evolution of FLRC's operating performance remains an area of
concern in Moody's opinion, considering the remote location of the
resort, the increasing competition in Southern Indiana and the
challenging consumer spending environment.
The affirmation of the corporate family rating and the rating on
the mortgage notes reflects both Moody's view on the probability
of default and the expected recovery rate assumptions post
distressed exchange, based on its assessment of FLRC's EBITDA
multiple-implied enterprise value.
The stable outlook reflects some support from the Cook family,
illustrated by the recent cash infusions and the restored full
availability under a $22 million revolving credit line, which is
now directly borrowed from Cook Group Incorporated. However,
should free cash flow deteriorate further and the availability
under the credit line materially decline negative rating pressures
could be exerted.
Rating upgraded:
-- Probability of default rating to Caa3
Ratings affirmed:
-- Corporate family rating at Caa3
-- Mortgage notes due 2014 at Caa3 (LGD assessment changed to
LGD3/45%)
French Lick Resorts & Casino LLC is a privately held company that
owns a luxury resort consisting of a casino with about 1,200 slot
machines and 32 table games, two historic hotels with 680 guest
rooms and suites, and 45 holes of golf in French Lick, Indiana.
GENERAL MOTORS: Charges on Delphi Corp. Issues Reach $8.3 Billion
-----------------------------------------------------------------
General Motors Corp. said that during the first quarter of 2008,
it took a non-cash charge of $731,000,000 to increase its
liability for estimated net costs associated with its support of
Delphi Corp.'s bankruptcy and restructuring efforts.
"This charge primarily results from updated estimates reflecting
uncertainty around the nature, value and timing of GM's
recoveries," GM said. Delphi was scheduled to emerge from
bankruptcy in mid-April but obtained problems with its exit
equity financing from Appaloosa Management, PC, thus affecting
the timing of GM's recoveries from Delphi.
General Motors has now recorded charges totaling $8,300,000,000
in connection with Delphi-related issues, Reuters reports.
GM has recently agreed to advance Delphi $650,000,000 in 2008 in
anticipation of settlement agreements between the companies that
would have been paid to the supplier had Delphi emerged from
court protection as expected in April.
General Motors also recorded a $1,450,000,000 non-cash partial
impairment charge for its equity investment in its finance unit
GMAC LLC for the first quarter of 2008.
General Motors reported net losses of $3,251,000,000 on
$42,700,000,000 of revenues for the first quarter. GM said its
results were marked by improved adjusted automotive operating
performance, rapid growth in emerging markets, continued cost
performance in North America operations and liquidity of nearly
$24,000,000,000, despite the impact of the American Axle strike
and weakness in the U.S. auto industry.
Bloomberg News said the loss was smaller than analysts estimated,
causing GM shares to gain 9.4% in the New York Stock Exchange.
GM's loss excluding costs for Delphi and the GMAC was
$350,000,000, or 62 cents a share, beating the $1.52 average
estimate of 13 analysts surveyed by Bloomberg.
GM said that in light of the current state of the U.S. economy
and automotive industry, it has revised its 2008 U.S. industry
seasonally adjusted annual rate (SAAR) outlook to the mid to high
15 million unit range, down from the low 16 million unit range.
As a result of the anticipated softer automotive industry, GM
announced earlier this week that it will eliminate a shift of
production at four assembly plants: Janesville, Wisconsin;
Pontiac and Flint, Michigan; and Oshawa, Ontario.
About Delphi
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) --
http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology. The company's
technology and products are present in more than 75 million
vehicles on the road worldwide. Delphi has regional headquarters
in Japan, Brazil and France.
The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007. The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 127; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: Plastech Inks MOU with GM for Exit Financing
------------------------------------------------------------
In connection with the $87,000,000 financing provided by its
major customers General Motors Corporation, Chrysler, LLC,
Johnson Controls, Inc., and Ford Motor Company, Plastech
Engineered Products Inc. and its debtor-affiliates agreed to a
covenant requiring that at least one Major Customer accepts, by
May 15, 2008, a proposal by the Debtors regarding a means of
exiting Chapter 11.
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, informs the U.S. Bankruptcy Court
for the Eastern District of Michigan that General Motors has
accepted Plastech's Chapter 11 exit plan, pursuant to the terms of
a memorandum of agreement, and a related sale of assets in
connection with the memorandum.
"The MOU was only recently finalized, however, and the Debtors
must be authorized to consummate the transactions contemplated
thereby as soon as possible in order to maintain compliance with
their postpetition financing and the terms of the MOU,"
Mr. Galardi said. In that light, the Debtors sought the Court's
permission to shorten the notice period to 17 days, instead of
20, schedule a hearing on the MOU for May 16, 2008 at 9:30 a.m.
Mr. Galardi said if the MOU is not approved by May 16, Plastech
will be unable to comply with the terms of their DIP Financing,
and, absent funding from the Major Customers, the Debtors will
likely be unable to continue to operate their businesses.
Plastech did not disclose the specific terms of the GM Memorandum
of Understanding as it sought and obtained the Court's permission
to file the GM MOU documents under seal.
Mr. Galardi explained the Debtors are seeking relief that is "of
a confidential, commercial nature, which the Debtors believe
would cause severe disruption to their operations if made
publicly available." He said the sealed documents contain
information pricing, quantity and timing of production and other
sensitive business issues.
Plastech will only provide unsealed copies of the GM MOU Motion
to the Court and the U.S. Trustee. Subject to entry into a
confidentiality agreement reasonably acceptable to General
Motors, the Debtors' term loan lenders, sources of financing and
capital necessary for confirmation and implementation of the
Plan, and counsel to the Committee may be provided with an
unsealed copies of the documents.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry. Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is certified
as a Minority Business Enterprise by the state of Michigan.
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States. The company's products are
sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The Debtors
chose Jones Day as their special corporate and litigation counsel.
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services. The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
About GM
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
* * *
As reported in the Troubled Company Reporter on April 28, 2008,
Standard & Poor's Ratings Services said that its 'B' long-term and
'B-3' short-term corporate credit ratings on General Motors Corp.
remain on CreditWatch with negative implications, where they were
placed March 17, 2008. The CreditWatch update follows downgrades
of 49%-owned subsidiaries GMAC LLC (B/Negative/C) and Residential
Capital LLC (CCC+/Watch Neg/C). The rating actions on Residential
Capital LLC and GMAC were triggered by the resignation of the only
independent directors at Residential Capital LLC.
GMAC LLC: Home Mortgage Unit Unable to Pay Debts Due June 2008
--------------------------------------------------------------
Residential Capital LLC, a home mortgage unit of GMAC LLC,
disclosed that it is highly leveraged relative to its cash flow,
and its liquidity position has been declining. According to a
Securities and Exchange Commission filing, there is a significant
risk that the company will not be able to meet its debt service
obligations, be unable to meet certain financial covenants in its
credit facilities, and be in a negative liquidity position in June
2008.
As of Feb. 29, 2008, ResCap's liquidity portfolio (cash readily
available to cover operating demands from across its business
operations and maturing obligations) totaled $1.8 billion. In
addition, the company has expended a significant amount of its
available cash in recent weeks. ResCap had approximately
$4.4 billion of unsecured long-term debt maturing during the
remainder of 2008, consisting of approximately $1.2 billion
aggregate principal amount of notes due in June 2008,
approximately $1.8 billion of outstanding borrowings under its
term loan due in July 2008, and approximately $1.1 billion
aggregate principal amount of notes due in November 2008.
In addition, the company had approximately $15.6 billion of
secured, short-term debt outstanding as of Dec. 31, 2007, with
various maturity dates in 2008, excluding debt of GMAC Bank. In
an effort to improve its short-term liquidity and its capital
structure and generally reduce its financial risk, ResCap has
undertaken these:
a) ResCap is conducting debt tender and exchange offers, as
reported in yesterday's Troubled Company Reporter, for its
outstanding unsecured notes to improve its financial
flexibility by extending the maturities of such indebtedness
and reducing the company's overall indebtedness. ResCap is
offering eligible holders of ResCap notes that mature in 2008
and 2009, as well as holders of ResCap notes that mature in
2010 through 2015, the ability to exchange such notes for one
of two newly-issued series of notes of ResCap. Holders of
ResCap's floating rate notes maturing on June 9, 2008, have the
ability to tender such notes for cash. In addition, eligible
holders participating in the exchange offers may elect to
receive cash in lieu of new notes that they would otherwise
receive pursuant to a "Modified Dutch Auction" process. Newly
issued notes would be secured by a second or third priority
lien on the assets that would secure the proposed senior
secured credit facility with GMAC.
b) ResCap is in negotiations with its parent, GMAC LLC, to provide
ResCap with a new $3.5 billion senior secured credit facility,
which would be used to fund the cash required for the offers,
to repay the term loan maturing in July 2008, and to replace
its $875.0 million 364-day revolving bank credit facility and
its $875.0 million 3-year revolving bank credit facility. Such
facility would be secured by a first priority lien in
substantially all of its existing and after-acquired
unencumbered assets remaining available to be pledged as
collateral.
c) ResCap is seeking amendments to substantially all of its
secured bilateral facilities that would extend the maturities
of such facilities from various dates in 2008 to May 2009 and
eliminate or modify the tangible net worth covenant contained
in such facilities. Although some of its secured facilities
have been extended during 2008, the extensions have generally
been for periods shorter than such facilities' previous terms.
Between March 1, 2008 and Dec. 31, 2008, the company has
$30.2 billion, or 96.8%, of its secured committed capacity
maturing.
d) ResCap is in negotiations with GMAC for them to contribute to
ResCap by May 31, 2008, approximately $350.0 million principal
amount of its outstanding notes held by GMAC in exchange for
additional ResCap preferred units, which are exchangeable at
GMAC's option at any time after Jan. 1, 2009, subject to
certain conditions, into preferred units of IB Finance
Holdings, LLC, the owner of GMAC Bank.
e) ResCap is seeking approximately $150.0 million in additional
borrowings under one of its existing secured facilities with
GMAC, the availability of which is subject to certain
conditions.
Even if ResCap is successful in implementing all of the actions,
it will be required, in order to satisfy its liquidity needs and
comply with anticipated covenants to be included in its new debt
agreements requiring maintenance of minimum cash balances, to
consummate in the near term certain asset sales or other capital
generating actions over and above its normal mortgage finance
activities to provide additional cash of $600 million by June 30,
2008.
Asset liquidation initiatives may include, among other things,
sale of retained interest in ResCap's mortgage securitizations,
marketing of loans secured by time share receivables, marketing of
its U.K. and Continental Europe mortgage loan portfolios, whole
loan sales and marketing of businesses and platforms that are
unrelated to its core mortgage finance business. Moreover, the
amount of liquidity ResCap needs may be greater than currently
anticipated as a result of additional factors and events (such as
interest rate fluctuations and margin calls) that increase its
cash needs causing the company to be unable to independently
satisfy its near-term liquidity requirements.
Liquidity and Capital Resources
Domestic and international mortgage and capital markets have
continued to experience significant dislocation. As a result, the
company's liquidity was negatively impacted due to reduced
committed lending levels and lower effective advance rates of its
secured committed sources of liquidity. In addition, the company
has incurred significant losses in the first quarter of 2008, and
many of its secured committed facilities experienced shorter dated
extensions than in the past.
On Feb. 21, 2008, ResCap's subsidiary, Residential Funding
Company, LLC, entered into a secured credit agreement with GMAC,
as a lender and as agent, to provide RFC with a revolving credit
facility with a principal amount of up to $750.0 million. To
secure the obligations of RFC under the credit agreement, RFC has
pledged as collateral under a pledge agreement, among other
things, its membership interest in RFC Resort Funding, LLC, a
wholly owned special purpose subsidiary of RFC, certain loans made
by RFC to resort developers secured by time-share loans or
agreements to purchase timeshares and certain loans made by RFC to
resort developers to fund construction of resorts and resort-
related facilities and all collections with respect to the pledged
loans. This funding is supplemental to existing third party
financing for the Resort Finance business. On Feb. 21, 2008, RFC
borrowed $635.0 million under the credit agreement maturing on
Aug. 21, 2009, and subsequently drew an additional $20.0 million
in March 2008.
As previously reported in the TCR, ResCap's parent, GMAC LLC,
contributed notes of ResCap that GMAC had previously purchased in
open market purchase transactions with a face amount of
approximately $1.2 billion and a fair value of approximately
$607.2 million to ResCap in exchange for 607,192 ResCap preferred
units with a liquidation preference of $1,000 per unit. The
ResCap preferred units are exchangeable at GMAC's option on a
unit-for-unit basis into preferred membership interests in IB
Finance at any time after Jan. 1, 2009, so long as neither ResCap
nor any of its significant subsidiaries was the subject of any
bankruptcy proceeding on or before that date.
As reported in the Troubled Company Reporter on April 25, 2008,
Residential Funding Company and GMAC Mortgage LLC, both
subsidiaries of Residential Capital, LLC, borrowed $468 million
collectively under a Loan and Security Agreement with ResCap's
parent, GMAC LLC, as lender, to provide ResCap's subsidiaries with
a revolving credit facility with a principal amount of up to
$750 million, providing incremental liquidity for ResCap's
operations until longer-term financing is arranged.
ResCap and GMAC are investigating various strategic alternatives
related to all aspects of ResCap's business, including extensions
and replacements of existing secured borrowing facilities, and
establishing additional sources of secured funding for ResCap's
operations. One potential source of new secured funding is credit
secured by certain of ResCap's mortgage servicing rights.
About Residential Capital
Headquartered in Minneapolis, Minnesota, Residential Capital LLC
-- http://www.rescapholdings.com/-- is the home mortgage unit of
GMAC Financial Services, which is in turn wholly owned by GMAC
LLC.
About GMAC LLC
GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses. GMAC was established in 1919 and employs
approximately 26,700 people worldwide. Cerberus Capital
Management LP bought 51% GMAC LLC stake from General Motors Corp.
on December 2006.
* * *
As reported in yesterday's Troubled Company Reporter, Fitch
Ratings has downgraded the long-term Issuer Default Rating
of GMAC LLC and related subsidiaries to 'BB-' from 'BB'. Fitch
has also downgraded GMAC's unsecured long-term ratings to 'B+'
from 'BB-', reflecting the potential for reduced recovery in a
default scenario should the company encumber assets.
Additionally, Fitch has affirmed the 'B' short-term ratings. The
Rating Outlook remains Negative.
As reported in the Troubled Company Reporter on April 25, 2008,
Moody's Investors Service downgraded GMAC LLC's senior rating to
B2 from B1; the rating remains on review for further possible
downgrade. This action follows Moody's rating downgrade of ResCap
LLC, GMAC's wholly owned residential mortgage unit, to Caa1 from
B2.
HEALTH NET: Moody's Reviews 'Ba2' Rating After First Qtr. Results
-----------------------------------------------------------------
Moody's Investors Service placed Health Net, Inc.'s ratings
(senior unsecured debt at Ba2) under review for possible downgrade
following the company's first quarter earnings release.
Moody's stated that while a portion of Health Net's first quarter
2008 net loss of $35.7 million was attributable to anticipated
charges for severance and other cost cutting initiatives, there
were additional factors that contributed to the loss that raise
both operational and financial concerns. These include a
$43.2 million pre-tax charge for litigation and regulatory actions
related to the company's rescission practices and additional
charges in connection with the McCoy litigation charges taken in
the third quarter of 2007. Other charges taken during the quarter,
according to the rating agency, were associated with higher claim
costs from a combination of unfavorable development from 2007,
higher than expected flu costs in 2008, and higher than expected
trend on the company's Medicare products that was a result of an
aggressive pricing policy.
According to Steve Zaharuk, V.P. and Senior Credit Officer, "the
combination of these factors raises questions concerning the
company's risk management oversight and medical management
operations and has led to the ratings being placed under review.
It also raises concerns with respect to additional volatility in
earnings from additional litigation charges and the possibility of
continuing unfavorable claims development during 2008."
Moody's also commented that the company has changed its target
NAIC risk-based capital level downward to 175% of company action
level from 200% CAL. While Dec. 31, 2007 consolidated RBC was
approximately 185% and within the range anticipated for the
current rating level, the lower target is viewed as another
negative credit development.
Moody's stated that its review will focus on further developments
with respect to litigation issues and settlements, emerging
medical claim costs, management's philosophy with respect to
managing RBC levels and the stability of Health Net's commercial
membership base.
Moody's last rating action on Health Net was on Nov. 2, 2007 when
it affirmed Health Net's ratings after the announcement of 2007
third quarter results which included a $297 million pre-tax
litigation charge.
Health Net, based in Woodland Hills, California, reported total
revenues of $3.8 billion for the first three months of 2008. As
of March 31, 2008, the company had total medical membership of
approximately 6.2 million and reported shareholder's equity of
$1.7 billion.
Moody's has placed these ratings under review for possible
downgrade:
-- Health Net, Inc.: senior unsecured debt rating at Ba2; senior
unsecured debt shelf rating at (P)Ba2; senior subordinated
debt shelf rating at (P)Ba3; subordinated debt shelf rating
at (P)Ba3.
-- Health Net of California, Inc.: insurance financial strength
rating at Baa2.
Moody's health insurance financial strength ratings are opinions
about the ability of life and health insurance companies to
punctually repay senior policyholder claims and obligations.
HILEX POLY: Files for Chapter 11 Protection in Delaware
-------------------------------------------------------
Hilex Poly Co., LLC, reached an agreement with its lenders to
restructure its senior secured debt. To facilitate this
agreement, the company has elected to file a voluntary, pre-
packaged Chapter 11 reorganization, which will allow the company
to finalize the restructuring of debt while continuing to operate,
business as usual, and serve its customers. This filing was made
in the U.S. Bankruptcy Court for the District of Delaware in
Wilmington, Delaware.
Hilex is taking this action to significantly reduce its overall
debt and strengthen its balance sheet to better serve its
customers and continue its market leadership position in the
plastic bag industry. In addition to a substantial reduction in
outstanding debt, the plan will reduce annual interest expense and
significantly improve cash flow.
"Hilex undertook a comprehensive strategic review to evaluate all
options for restructuring our balance sheet and, after careful
consideration, determined that a pre-packaged filing was in the
best interest of all our stakeholders," David Pastrich, president
and chief executive officer of Hilex, said. "We believe the
restructuring will enable us to invest more capital in the
business and position Hilex as a more attractive long-term partner
for our customers and vendors. We will continue to focus on our
industry-leading environmentally friendly solutions including HED
degradable bags, Bag-2-Bag in store closed loop recycling systems,
and Enviro-Count rack technology."
The filing will not impact day-to-day operations for employees,
customers, suppliers and general business operations. It ensures
that employee pay and benefits are fully protected, all current
and future obligations to its customers are fulfilled, and that
suppliers will be paid in full as part of this process.
The company has also arranged for debtor-in-possession financing
from GE Capital and Morgan Stanley Senior Funding, Inc., with an
initial commitment of $140 million as well as a commitment for
robust exit financing.
"This financing provides additional reassurance to employees,
customers and suppliers that we can meet all of our ongoing
commitments," Mr. Pastrich continued. "The ability to come to a
consensual debt-for-equity agreement with our lenders demonstrates
our lender's belief in Hilex's business model and their long-term
faith in the company."
"We look forward to completing our financial restructuring over
the course of the next 45-60 days and emerging as a stronger, more
financially sound company, well-positioned for the future," Mr.
Pastrich concluded.
Headquartered in Hartsville, South Carolina, Hilex Poly Co., LLC
-- http://www.hilexpoly.com/-- is an industry manufacturer of
plastic bag and film products. Focusing primarily on high density
polyethylene film products and related services, our products
range from bagging systems to agricultural films. Hilex has 11
strategically located manufacturing facilities across the United
States which includes a plastic bag recycling plant.
HILEX POLY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Lead Debtor: Hilex Poly Co., LLC
101 East Carolina Ave.
Hartsville, SC 29550
Bankruptcy Case No.: 08-10890
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Hilex Poly Holding Co. LLC 08-10891
Type of Business: The Debtors manufacture plastic bag and film
products. Focusing primarily on high density
polyethylene (HDPE) film products and related
services, their products range from bagging
systems to agricultural films. See
http://www.hilexpoly.com/
Chapter 11 Petition Date: May 6, 2008
Court: District of Delaware (Delaware)
Judge: Kevin J. Carey
Debtors' Counsel: Edmon L. Morton, Esq.
Email: bankfilings@ycst.com
Kenneth J. Enos, Esq.
Email: bankfilings@ycst.com
Young, Conaway, Stargatt & Taylor
The Brandywine Bldg.
1000 W. St., 17th Flr.
P.O. Box 391
Wilmington, DE 19899
Tel: (302) 571-6600
Fax: (302) 571-1253
http://www.ycst.com
Hilex Poly Co., LLC's Financial Condition:
Estimated Assets: $100 million to $500 million
Estimated Debts: $100 million to $500 million
Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Sonoco Products Co. note debt $28,000,000
Attn: Kevin P. Mahoney
1 North Second St.
Hartsville, SC 29550
Tel: (843) 383-7000
Fax: (843) 383-7008
Equistar Chemicals trade debt $24,993,015
Attn: Wanda Green
One Houston Ctr., Ste. 700
1221 McKinney St.
Houston, TX 77010
Tel: (713) 309-4982
Fax: (713) 652-4562
Formosa Plastics Corp. trade debt $11,739,852
Attn: John Rocktoff
9 Peach Tree Hill Rd.
Livingston, NJ 07039
Tel: (973) 716-7294
Fax: (973) 716-7450
E20on Mobil Chemical Co. trade debt $6,599,446
Attn: Archie Murray
619 Competition Rd.
Raleigh, NC 27603
Tel: (919) 661-4512
Fax: (262) 953-9375
Logistics Management $2,633,096
Solutions, LLC
One Cityplace Dr., Ste. 415
St. Louis, MO 63141
Bunzl Distribution USA, Inc. trade debt $2,179,169
825 Maxham Rd., Ste. 400
Lithia Springs, GA 30122
Tel: (770) 745-6445
Fax: (770) 745-3443
Dow Chemical Co. trade debt $1,985,498
Attn: Mary Root
Two Wheaton Center, Ste. 2001
Wheaton, IL 60187
Tel: (630) 682-1079
Fax: (800) 761-4164
PWP Industries trade debt $802,363
Attn: Leon Farahnik
10250 Constellation Blvd.,
Ste. 2820
Los Angeles, CA 90067
Tel: (310) 473-7005
Fax: (310) 473-9592
Temple Inland trade debt $742,542
Attn: Frank Marinaro
3 North Way
Hopatcong, NJ 07843
Tel: (973) 770-5440
Fax: (973) 770-5443
Independent Purchasing trade debt $663,506
Cooperative (Subway)
Attn: Cherry Canary
9200 S. Dadeland Blvd.,
Ste. 705
Miami, FL 33156
Tel: (305) 670-0041
Fax: (305) 670-4465
Graphic Sciences, Inc. trade debt $464,308
Attn: Jeff Ashburn
312 Quachita Ave.
Hot Springs, AR 71901
Tel: (888) 723-4465
Fax: (501) 318-4467
Sobeys-Montreal North trade debt $431,403
Warehouse
Attn: Steve Boudreau
11281 Boul Albert-Hudon
Montreal-Nord, QC H1G 3J5
Tel: (514) 324-1010
Fax: (514) 324-6030
Exacta Packaging Designs, Inc. trade debt $366,740
Attn: Tom Spitz
1942 N. Interstate 35 E.
Carrollton, TX 75006
Tel: (972) 323-1063
Fax: (972) 323-8030
US Customs & Border Protection government debt $363,945
Attn: Alfonso Robles
1300 Pennsylvania Ave., N.W.
Washington, D.C. 20229
A&P Co. of Canada trade debt $268,781
Attn: Bob Ramsey
P.O. Box 68 Stn. A.
Toronto, ON M5W 1A6
Tel: (416) 234-6690
Fax: (416) 234-6581
Duke Energy utility $256,588
P.O. Box 9001076
Louisville, KY 40290-1076
Tel: (800) 774-1202
Fax: (317) 838-2234
Jennings County Treasurer taxes $207,174
King & Spalding, LLP professional fees $180,579
CSX Transportation, Inc. trade debt $178,577
Topco Associates, LLC trade debt $175,426
HOMBANC CORP: Files Joint Chapter 11 Plan of Liquidation
--------------------------------------------------------
HomeBanc Mortgage Corporation, HomeBanc Corp., HomeBanc Funding
Corp., HomeBanc Funding Corp. II, HMB Acceptance Corp., and HMB
Mortgage Partners, LLC, filed with the United States Bankruptcy
Court for the District of Delaware their Joint Consolidated
Liquidating Chapter 11 Plan and accompanying disclosure statement,
dated April 30, 2008.
The Debtors relate that after paying secured claimants and all
costs associated with the administration of their Chapter 11
cases, they expect to have funds to return 1 cents to 10 cents
on the dollars to unsecured creditors holding $223,500,000 in
claims. The Debtors, however, won't make distributions to
holders of equity interests.
Debtors' Acting Chief Operating Officer and Senior Vice
President/Controller Donald R. Ramon says that the Official
Committee of Unsecured Creditors, which represents the unsecured
creditors, and JPMorgan Chase Bank, N.A., as administrative agent
with respect to certain of the Debtors' prepetition loan
repurchase and credit agreements, both support the Debtors' Joint
Consolidated Liquidating Chapter 11 Plan and accompanying
Disclosure Statement, dated April 30, 2008.
Holders of unsecured claims and holders of Prepetition Agent
(JPMorgan) Claims are entitled to vote on the Plan. Equity
holders are deemed to reject the Plan, while the remaining
creditors are deemed to accept the Plan on account of the full
recovery on their claims.
The Debtors believe that their Liquidating Chapter 11 Plan
provides the best possible recovery for claimants. With respect
to impaired classes of claims, the distributions under the Plan
are greater than the amounts that would be received if the
Debtors were liquidated under Chapter 7.
Since filing for bankruptcy, the Debtors have focused their
efforts on liquidating their estates and preserving the value
thereof for a period of time long enough to allow a sale of their
servicing business. Immediately after the Petition Date, the
Debtors sold numerous pipeline loans as well as five branch
offices to Countrywide Home Loans, Inc. On December 3, 2007, the
Debtors sold their servicing business to EMC Mortgage Corporation
for a purchase price of $59,000,000. The servicing rights sold
to EMC excluded rights to mortgages sold to Freddie Mac, which
rights were purchased by AH Mortgage Acquisition Co., Inc., for
approximately $9,300,000.
During their Chapter 11 cases, the Debtors and the Committee
retained a number of professionals and have paid 80% to 100% of
their fees and 100% of their expenses in accordance with Court-
approved procedures. The Debtors will pay remaining compensation
to professionals as soon as the Court grants final allowance to
to the professionals' fee applications. The Debtors also
implemented retention and incentive plans -- they made retention
payments of $849,074 to key employees retained in the Chapter 11
cases and paid incentive bonuses aggregating $391,875.
The Debtors entered into an $8,500,000 postpetition financing
facility with JPMorgan but never borrowed under the DIP Facility.
Availability under the DIP Financing was terminated pursuant to a
stipulation with JPMorgan.
As previously reported, the Wind-Down Stipulation, between the
Debtors, the Committee and JPMorgan, which was approved by the
Court January 3, 2008, set for the mechanism and budget to to be
employed by the Debtors to complete the liquidation of their
estates. The Wind-Down Stipulation also provided that JPMorgan,
on behalf of the Prepetition Lenders and Prepetition Purchases,
will receive (i) repayment of cash collateral of approximately
$4,850,000, (ii) an adequate protection claim of $1,500,000, and
(iii) allocation of proceeds from certain litigation claims.
The Debtors estimate that at least $5,000,000 will be available
for distribution to various creditors. Under the Plan, a
liquidating a liquidating agent will be appointed to, among other
things, (i) make distributions to holders of allowed claims, (ii)
continue to pursue and commence various causes of action post-
confirmation, and (iii) prosecute any necessary objections to
administrative, priority or secured claims that are filed.
A full-text copy of the Plan is available for free at
http://ResearchArchives.com/t/s?2b85
A full-text copy of the Disclosure Statement is available for
free at http://ResearchArchives.com/t/s?2b86
A copy of the Wind Down Budget is available for free at
http://ResearchArchives.com/t/s?2b87
Substantive Consolidation
According to Mr. Ramon, on and after the effective date of the
Plan, except as specifically provided in the Plan:
(a) all assets and liabilities of the Debtors will be treated
as though they were merged, provided that all Estate
Assets will remain subject to only those liens that
attached to these assets before the merger;
(b) all intercompany claims between and among the Debtors will
be eliminated and no distributions will be made under the
Plan on account of these;
(c) the interests of HomeBanc in HBMC, HB Funding, HB Funding
II and HMB Acceptance, and the interests of HBMC in HMB
Mortgage will be eliminated and no distributions will be
made under the Plan on account of these Equity Interests;
(d) all guarantees of the Debtors of the obligations of any
other Debtor will be eliminated so that any Claim against
any Debtor and any guarantee executed by any other Debtor
and any joint or several liability of any of the Debtors
will be deemed one obligation of the consolidated Debtors;
and
(e) each and every Allowed Unsecured Claim filed or to be
filed against any Debtor will be deemed filed against, and
will be one Claim against and obligation of, the
consolidated Debtors.
Mr. Ramon states that the substantive consolidation effected
pursuant to the Plan will not be construed as an election of
remedies and will not affect or prejudice, among other things,
any Claims or defenses of the Debtors existing before the
substantive consolidation; requirements for any third party to
establish mutuality in order to assert a right of set-off;
distributions out of any insurance policies or proceeds of those
policies; and any similar or analogous rights.
The Plan will serve as a motion seeking the substantive
consolidation of the Debtors, their Chapter 11 cases and their
Estates, Mr. Ramon says.
The Debtors and the Creditors Committee believe that substantive
consolidation is justified because:
-- none of the Debtors other than HomeBanc and HBMC had any
employees;
-- the Debtors all occupied the same physical facilities for
purposes of conducting their businesses;
-- HBMC paid all of the bills and receipted all of the
revenues for all the Debtors, and then allocated those
bills and receipts to various accounts;
-- virtually all invoices from creditors were billed to HBMC,
whether the goods supplied or services performed were
rendered to one or more of the other Debtors;
-- the Debtors believe that the general perception of their
creditors was that the Debtors were a single entity; and
-- there will be considerable savings in administrative costs
by having one disclosure statement and plan of
reorganization instead of six.
Funding of Distributions
On or before the Effective Date, the Liquidating Agent will
establish these interest-bearing accounts:
* Adequate Protection Claim Escrow
* Liquidation Proceeds Account
* Post-Confirmation Operating Account
* Disputed APS Claims Reserve
* Disputed Unsecured Claims Reserve
* Unsecured Claims Distribution Reserve
On the Effective Date, the Liquidating Agent will fund:
(a) Adequate Protection Claim Escrow -- to the extent required
by the Plan, $1,500,000 in Cash;
(b) Disputed APS Claims Reserve -- Cash in the amount
necessary for the payment in full of all Disputed
Administrative Expense Claims, Disputed Priority Tax
Claims, Disputed Priority Claims, Disputed Secured Tax
Claims, Disputed Secured Claims and unpaid professional
claims;
(c) Post-Confirmation Operating Account -- with all Cash then
on deposit in the Wind-Down Budget Account, to the extent
consistent with the amount budgeted in the Wind-Down
Budget to pay for all costs of administration of the
Estate Assets; and
(d) Disputed Unsecured Claims Reserve -- to the extent that an
initial distribution is made to the holders of Allowed
Unsecured Claims, with Cash sufficient to fund a Pro Rata
distribution n like amount on account of Disputed
Unsecured Claims.
To the extent the Liquidating Agent determines to pay the Pro
Rata share with respect to an undisputed portion of any of the
Disputed Claim, the Liquidating Agent will be allowed to reduce
the amount reserved for that Claim in the appropriate amount,
Mr. Ramon says.
Liquidation of Assets and Prosecution of Claims
On or after the Confirmation Date, the Liquidating Agent may,
without further Court approval, use, sell, assign, transfer,
abandon or otherwise dispose of at a public or private sale any
of the Debtors' remaining assets for the purpose of liquidating
and converting those assets to Cash, making distributions,
subject to and consistent with the terms of the Wind-Down
Stipulation and certain Liquidating Agent Agreement, and fully
consummating the Plan.
The Liquidating Agent, in consultation with (i) a Post-Effective
Date Committee, and (ii) until the occurrence of the Prepetition
Payoff, counsel to the Prepetition Agent, and exercising its
reasonable business judgment, will, in an expeditious but orderly
manner, liquidate and convert to Cash the Wind-Down Litigation
Claims and Other Litigation Claims, either through prosecution,
compromise and settlement, abandonment or dismissal of any or all
claims, rights or causes of action, or otherwise.
Plan Implementation
>From and after the Confirmation Date, the Debtors will continue
to exist pursuant to the terms of the Plan solely for purposes of
allowing the Liquidating Agent to (i) wind-up their affairs, (ii)
liquidate, by converting to Cash or other methods, any remaining
Estate Assets, (iii) enforce and prosecute claims, interests,
rights and privileges of the Debtors in conjunction with the
marshaling of Estate Assets, (iv) resolve Dispute Claims, (v)
administer the Plan and Wind-Down Stipulation, and (vi) file
appropriate tax returns.
The Estate Assets will be managed by the Liquidating Agent, who
will be the exclusive trustee of the Estate Assets for purposes
of 31 U.S.C. Section 3713(b) and 26 U.S.C. Section 6012(b)(3), as
well as the representative of the Estates appointed pursuant to
Section 1123(b)(3)(B) of the Bankruptcy Code.
(1) Liquidating Agent
The Liquidating Agent will be compensated from the Estate Assets,
as specified in the Liquidating Agent Agreement, according to
Mr. Ramon. Removal of the Liquidating Agent will be governed by
the provisions of the agreement.
The Liquidating Agent may, consistent with the restrictions of
the Wind-Down Budget, employ one or more attorneys, accountants,
appraisers, auctioneers, or other professional persons, that do
not hold or represent an interest adverse to the Debtors, and are
disinterested persons, to represent the Liquidating Agent in
carrying out its duties under the Plan and Liquidating Agent
Agreement.
The fees for the Liquidating Agent and any of its professionals
will be subject to the approval of the Post-Effective Date
Committee upon receipt of a detailed invoice.
The duties, responsibilities and powers of the Liquidating Agent
will terminate after all causes of action involving the Debtors
are fully resolved or abandoned; all the Estate Assets have been
distributed in accordance with the Plan; and a final decree has
been entered closing the Debtors' Chapter 11 cases.
The Estate Assets will be distributed no later than five years
from the Effective Date, provided that the Cash Collateral
Reimbursement Amount must be paid to the Prepetition Agent on or
before the Wind-Down Termination Date on December 31, 2008, or a
later date as may be agreed.
(2) Post-Effective Date Committee
The Creditors Committee will be dissolved, on the Effective Date,
for purposes other than the preparation, filing and prosecution
of final fee applications. The Post-Effective Date Committee,
comprised of no more than three members, will be formed on the
Effective Date, and continue in existence until the Final
Distribution Date.
The individual members of the Post-Effective Date Committee will
serve without compensation, but will be entitled to reimbursement
of reasonable, actual and necessary out-of-pocket expenses.
The powers and duties of the Post-Effective Date Committee will
be limited solely to performing, among other things:
-- the functions specifically provided for in the Plan,
including the prosecution of certain Wind-Down Litigation
Claims and Other Litigation Claims; and
-- retention of liaison counsel and contingency fee counsel
to assist in the prosecution of those Claims.
Causes of Action
Causes of action belonging to the Debtors' estates include claims
against Bear Stearns & Co., Inc., that are currently in
litigation; potential claims against certain of the Debtors'
former officers and directors; with respect to payments received
from the Debtors within one year of the Petition Date; claims
with respect to a deferred compensation plan for the Debtors'
former officers; and claims arising under Section 547 of the
Bankruptcy Code relating to preferential payments before the
Petition Date to parties other than "insiders" of the Debtors.
The Debtors are in the process of analysing payments made during
the preference periods set forth in Section 547 and identifying
the creditors that have received payments that may be subject to
an action, Mr. Ramon informs the Court. Litigation may be
required to pursue the Debtors' actions under Section 547, both
before and after Plan confirmation, he adds.
Under the Plan, the Debtors, through the Liquidating Agent, have
the right to continue to pursue and commence various causes of
action post-confirmation, including certain Wind-Down Litigation
Claims and any other claims.
Mr. Ramon says that a Plan supplement will include a list of
actions the Debtors may prosecute and all parties that they
believe may be subject to these actions. The fact that a
creditor or third party has not already been the subject of an
action with respect to the Wind-Down Litigation Claims and Other
Litigation Claims is no guarantee that the creditor or third
party is free from liability, or that the Debtors are waiving the
right to pursue an action against that person or entity, he adds.
Voting Instructions
The Debtors are seeking the acceptance of the Plan by holders of
Class 3 Allowed Prepetition Agent Claims and Class 5 Allowed
Unsecured Claims.
All Ballots must be timely returned to Kurtzman Carson
Consultants LLC, the Debtors' solicitation agent, via U.S. mail
or overnight delivery at:
HomeBanc Mortgage Corp. Claims Processing
c/o Kurtzman Carson Consultants LLC
2335 Alaska Avenue
El Segundo, California 90245
Ballots will be accepted until 4:00 p.m., Pacific Time, of the
voting deadline that is yet to be determined.
Votes cast in any manner other than by using a Ballot will not be
counted.
A replacement to lost or damaged Ballots, or if one does not
receive a Ballot, may be obtained by contacting KCC at 866-381-
9100.
Beneficial owners of certain Floating Rate Debentures or Junior
Subordinated Notes can vote by completing and signing the
enclosed Ballot and returning it directly to KCC using the
enclosed pre-addressed, postage prepaid envelope.
Holders of Floating Rate Debentures or Junior Subordinated Notes
in "street name" or an authorized signatory must return the
Ballot to the appropriate brokerage firm, commercial bank, trust
company or other nominee by the mailing deadline yet to be
determined. If the Ballot is not received by the Master Ballot
Agent on or before the Mailing Deadline, and the deadline is not
extended, the vote will be counted.
If more than one Ballot is to be submitted for a Class, the names
of all broker dealers or other intermediaries holding the
securities for the holder in the same Class must be indicated in
the appropriate item of the Ballot.
Authorized signatories voting on behalf of more than one
beneficial owner must complete a separate Ballot for each
beneficial owner.
Brokerage firms, banks and other nominees that is a registered
holder of Floating Rate Debentures or Junior Subordinated Notes
for a beneficial owner, or that is a participant in a securities
clearing agency and is authorized to vote in the name of the
securities clearing agency, can vote on behalf of the beneficial
owner by:
-- distributing a copy of the Disclosure Statement and
appropriate Ballots to the beneficial owner;
-- collecting all Ballots;
-- completing a Master Ballot compiling the votes and other
information from the Ballots collected; and
-- transmitting the completed Master Ballot to KCC.
The Plan represents the efforts of the Debtors to maximize the
cash distribution to holders of Allowed Claims, Mr. Ramon says.
With respect to holders of Unsecured Claims, the Debtors believe
that the Plan offers the highest, best and quickest recovery that
could be had in their Chapter 11 cases.
Headquartered in Atlanta, Georgia, HomeBanc Mortgage Corporation
-- http://www.homebanc.com/-- is a mortgage banking company
focused on originating primarily prime purchase money residential
mortgage loans in the Southeast United States.
HomeBanc Mortgage together with five affiliates filed for chapter
11 protection on Aug. 9, 2007 (Bankr. D. Del. Case Nos. 07-11079
through 07-11084). Joel A. Waite, Esq., at Young, Conaway,
Stargatt & Taylor was selected by the Debtors to represent them in
these cases. The Official Committee of Unsecured Creditors
selected the firm Otterbourg, Steindler, Houston and Rosen, P.C.
as its counsel. The Debtors' financial condition as of June 30,
2007, showed total assets of $5,100,000,000 and total liabilities
of $4,900,000,000. The Debtors' exclusive period to file a plan
ends on April 7, 2008.
(HomeBanc Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000).
HOMEBANC CORP: Classification and Treatment of Claims Under Plan
----------------------------------------------------------------
HomeBanc Mortgage Corporation, HomeBanc Corp., HomeBanc Funding
Corp., HomeBanc Funding Corp. II, HMB Acceptance Corp., and HMB
Mortgage Partners, LLC, inform the United States Bankruptcy Court
for the District of Delaware that they received more than 1,000
proofs of claim by the deadline for filing proofs of claim and are
in the process of reconciling the claims with their books and
records.
According to Donald R. Ramon, the Debtors' acting chief operating
officer and senior vice president/controller, under their Joint
Consolidated Liquidating Chapter 11 Plan and accompanying
disclosure statement, dated April 30, 2008, the Debtors, through
the Liquidating Agent, have the right to file objections to claims
after Plan confirmation. The fact that a Claim has not been the
subject of an objection to date is no guarantee that the Claim
will be an Allowed Claim, or that the Debtors are waiving the
right to object to the Claim, Mr. Ramon states.
Except as otherwise indicated in the Plan, many payments under
the Plan are expected to occur on the Effective Date.
Claim Treatment and Recovery
Estimated
Allowed Estimated
Class/Claim Amount Recovery Treatment
----------- --------- --------- ---------
Adequate Protection Claim - 100% -
of Prepetition Agent
MSR Adequate Protection - 100% -
Claim of the Prepetition
Agent
Prepetition Agent Claims - (Class 3) -
Administrative Expense $46,500 100% unimpaired
Claims
Allowed Priority Tax Claims 2,626,000 100% -
Class 1 1,380,000 100% unimpaired
Allowed Priority Claims
Class 2 0 100% unimpaired
Allowed Secured Tax Claims
Class 3 69,600,000 100% impaired
Allowed Prepetition Agent
Claims
Class 4 0 100% unimpaired
Allowed Other Secured
Claims
Class 5 223,500,000 1% - 10% impaired
Allowed Unsecured Claims
Class 6 - 0% -
Equity Interests
-- Adequate Protection Claim
On the effective date of the Plan, if certain conditions have not
occurred and only if certain payments have not been made, the
designated liquidating agent will deposit cash of $1,500,000 in
an escrow account to be created on the Effective Date -- Adequate
Protection Claim Escrow -- which escrow funds will be paid to
JPMorgan Chase Bank, N.A., as Prepetition Agent, for the benefit
of the Prepetition Lenders and repetition purchasers under
certain warehouse facility.
-- MSR Adequate Protection Claim
In full and final satisfaction of the certain MSR Adequate
Protection Claim, JPMorgan will be permitted to receive, on
account of certain Prepetition Agent Claims, distributions of
certain Prepetition Agent Wind-Down Property until the time as
the aggregate recovery form any and all sources of the
Prepetition Agent with respect to those Claims is equal to the
Prepetition Payoff Settlement Amount of $69,600,000.
-- Prepetition Agent Claims
All Prepetition Agent Claims will be paid in accordance with the
Wind-Down Stipulation. To the extent the Prepetition Payoff has
not occurred on or before the Effective Date, all Prepetition
Agent Claims will constitute Allowed Claims in Class 3 until, to
the extent necessary to ensure, payment in full of the
Prepetition Payoff Settlement Amount.
To the extent the Prepetition Agent Claims have not been
satisfied in full as a result of the distributions made to Class
3 and the Warehouse Debt has not been paid in full, the amount of
any remaining deficiency will constitute and be limited to the
Allowed Prepetition Agent Deficiency Claim and, subject to
Section 5.5 of the Plan, receive treatment accorded to other
Unsecured Claims in Class 5, Mr. Ramon tells the Court.
-- Administrative Expense Claims, Allowed Priority Tax Claims,
Class 1 Claims, and Class 2 Claims
Mr. Ramon informs the Court that most of the Administrative
Expense Claims have already been paid in the ordinary course of
business.
With respect to these claims, the Debtors will tender to holders,
in full satisfaction, release and discharge of and in exchange
for the Claim, either (i) the amount of the Allowed Claim in
Cash, or (ii) other consideration agreed upon in writing by the
holder and the Liquidating Agent.
Distributions will take place on the later of the Effective Date,
or a date 10 business days after the Claim becomes Allowed.
-- Class 3 Claims
JPMorgan will receive, on behalf of the Prepetition Lenders and
Prepetition Purchasers and on the terms and conditions set forth
in the Wind-Down Stipulation, the Prepetition Agent Wind-Down
Property. The aggregate recovery of JPMorgan with respect to the
principal and accrued prepetition interest on the Prepetition
Agent Claims will not exceed the Prepetition Payoff Settlement
Amount.
-- Class 4 Claims
Each holder will receive in full satisfaction and release of and
in exchange of the Claim either (i) Cash equal to the Allowed
Secured Claim amount, or a return of the collateral or other
property that secures the Allowed Secured Claim. All liens and
security interests asserted by the holder of the Allowed Secured
Claim will be extinguished and of no further force or effect.
-- Class 5 Claims
Each holder, including JPMorgan, as holder of the Prepetition
Agent Deficiency Claim, will receive in full satisfaction and
release of and in exchange for the Claim, its pro rata share of
(i) Unsecured Claim Wind-Down Property, (ii) the GUC Trust -- the
trust to be established for the benefit of the holders of Allowed
Unsecured Claims pursuant to the Wind-Down Stipulation and
Section 8.6.2 of the Plan, and (iii) any other Cash distribution
to holders of Allowed Unsecured Claims from the Estate Assets.
JPMorgan will not receive, on behalf of the Prepetition Lenders
and Prepetition Purchasers, any Pro Rata Share of the GUC Trust.
-- Class 6 Claims
On the Effective Date, all Equity Interests will be canceled,
annulled and voided, and the holders will be entitled to no
distribution whatsoever under the Plan or in the Debtors' Chapter
11 cases on account of the Equity Interests.
One new share of reorganized HomeBanc's common stock will be
issued to the Liquidating Agent on the Effective Date, Mr. Ramon
tells the Court.
Mr. Ramon notes that if the Allowed Claims are greater than the
Debtors' estimates, then holders of Allowed Unsecured Claims in
Class 5 may receive a lower recovery than estimated by the
Debtors. The Debtors are still in the process of completing
Claims reconciliation and certain of the Claim amounts may be
further reduced after the Debtors have completed this task, he
tells the Court.
Headquartered in Atlanta, Georgia, HomeBanc Mortgage Corporation
-- http://www.homebanc.com/-- is a mortgage banking company
focused on originating primarily prime purchase money residential
mortgage loans in the Southeast United States.
HomeBanc Mortgage together with five affiliates filed for chapter
11 protection on Aug. 9, 2007 (Bankr. D. Del. Case Nos. 07-11079
through 07-11084). Joel A. Waite, Esq., at Young, Conaway,
Stargatt & Taylor was selected by the Debtors to represent them in
these cases. The Official Committee of Unsecured Creditors
selected the firm Otterbourg, Steindler, Houston and Rosen, P.C.
as its counsel. The Debtors' financial condition as of June 30,
2007, showed total assets of $5,100,000,000 and total liabilities
of $4,900,000,000. The Debtors' exclusive period to file a plan
ends on April 7, 2008.
(HomeBanc Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000).
JO-ANN STORES: Moody's Changes Outlook to Positive; Holds Ratings
-----------------------------------------------------------------
Moody's Investors Service revised its rating outlook for Jo-Ann
Stores, Inc.'s to positive from stable. The company's B3
corporate family rating and probability of default ratings as well
as its Caa2 subordinated debt ratings were affirmed.
"The positive rating outlook reflects recent positive trends in
operating performance, as the company has recorded six consecutive
quarters of positive same store sales growth, and reported
operating margins expanding by nearly 150 basis points in its most
recent fiscal year" said Moody's Vice President Scott Tuhy.
Upward rating momentum would build if the company can maintain
performance in credit metrics notwithstanding the current
challenging macro economic environment.
These ratings were affirmed:
-- Corporate Family Rating and Probability of Default rating
at B3
-- $100 million Senior Subordinated Notes due 2012 at Caa2
(LGD 5, 79%)
Jo-Ann Stores, headquartered in Hudson, Ohio, is one of the
nation's largest fabric and craft specialty retailers. As of
Feb. 2, 2008, the company operated 774 retail locations in 47
states. Revenue for the fiscal year ending in January 2008 was
$1.9 billion.
JONES APPAREL: Moody's Reviews 'Ba1' Rating for Possible Cuts
-------------------------------------------------------------
Moody's Investors Service placed all ratings for Jones Apparel
Group Inc. under review for a possible downgrade. LGD assessments
are subject to change. The company's Speculative Grade Liquidity
rating was also lowered to SGL-3 from SGL-2.
The review for possible downgrade reflects Moody's concerns over
the company's poor operating performance and inability to improve
its operating margins. The downgrade of the company's SGL rating,
reflects Moody's concerns regarding prospective covenant
compliance under the company's existing $1.75 billion of committed
revolving credit facilities. Compliance with financial covenants
could become a challenge in the company's third fiscal quarter
when it will no longer retain the benefit from the gain on the
sale of Barneys New York Inc., which closed in the third fiscal
quarter of 2007, in the calculation. At the same time Moody's
review will focus on the company's ongoing efforts to improve
results in a challenging macro environment and the timing and
extent of possible expansion in operating margins from recent weak
performance. The review will also examine the company's efforts
to address financial covenant levels.
These ratings were placed under review:
-- Corporate Family Rating at Ba1
-- Probability of Default Ratings at Ba1
-- $750 million Senior Unsecured Notes (various maturities) Ba1
Jones Apparel Group Inc. headquartered in Bristol, Pennsylvania is
a leading designer, marketer and wholesaler of branded apparel,
footwear, and accessories. The company also markets directly to
consumers through various mall based specialty retail stores and
outlet stores. The company owns a number of nationally recognized
brands including Jones New York, Anne Klein, Nine West, Gloria
Vanderbilt and l.e.i.
JPMORGAN CHASE: S&P Affirms Ratings on 13 Certificate Classes
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on 13
classes of commercial mortgage pass-through certificates from
JPMorgan Chase Commercial Mortgage Securities Corp.'s series
2002-C3.
The affirmations reflect subordination levels that provide
adequate credit enhancement to support the ratings at their
current levels.
As of the April 14, 2008, remittance report, the collateral pool
consisted of 79 loans with an aggregate trust balance of
$606.9 million, compared with 87 loans with a balance of
$745.3 million at issuance. Excluding defeased loans
($197 million, 32%), the master servicer, Capmark Finance Inc.,
reported financial information for 92% of the pool. All of the
servicer-reported information was full-year 2006 data or partial-
or full-year 2007 data. Based on this information, Standard &
Poor's calculated a weighted average debt service coverage of
1.56x, up from 1.45x at issuance. All loans in the pool are
current. One loan ($3.4 million, 0.6%) is with the special
servicer, ING Clarion Capital Loan Servicing LLC. To date, the
trust has experienced three losses totaling $31.3 million, or 4%
of the initial pool balance.
The top 10 loans secured by real estate have an aggregate
outstanding balance of $179.5 million (30%) and a weighted average
DSC of 1.57x, compared with 1.58x at issuance. Four of the top 10
loans are on the servicer's watchlist and are discussed below.
Standard & Poor's reviewed property inspections provided by the
master servicer for all of the assets underlying the top 10 loans.
One property was characterized as "fair," while the rest were
characterized as "good."
Capmark reported a watchlist of 17 loans with an aggregate
outstanding balance of $112 million (18%), which includes the
fourth-, sixth-, seventh-, and eighth-largest loans. The fourth-
largest loan, Pender Business Park ($19.9 million, 3%), is secured
by a 170,940-sq.-ft. suburban office property in Fairfax,
Virginia. The loan appears on the watchlist because the largest
tenant, Web Methods Inc. (32% of net rentable area), vacated the
property when its lease expired on Dec. 31, 2007. As of Sept. 30,
2007, the property was 100% occupied, and DSC was 2.27x.
Excluding the Web Methods Inc. lease, S&P expect the DSC for this
loan to remain above 1.0x.
The sixth-largest loan, 78 Corporate Center ($18 million, 3%), is
secured by two suburban office buildings totaling 185,850 sq. ft.
in Lebanon, New Jersey. The loan is on the watchlist due to low
DSC and occupancy. Capmark reported a DSC of 1.01x and 69%
occupancy as of Sept. 30, 2007. Performance deteriorated further
after a major tenant vacated the property after Sept. 30, 2007.
According to a rent roll dated Dec. 1, 2007, occupancy was 18%.
S&P expect DSC to be negative at the 18% occupancy level.
The seventh-largest loan, Holiday Inn Newark ($14 million, 2%), is
secured by a 412-room full-service hotel in Newark, New Jersey.
The loan appears on the watchlist due to a decline in DSC. The
reported DSC was 1.16x as of year-end 2006, compared with 3.1x at
issuance. The borrower reported an average daily occupancy of 95%
and an average daily room rate of $80.30 as of August 2007.
The eighth-largest loan, Getronics Campus ($13 million, 2%), is
secured by a 278,802-sq.-ft. suburban office property consisting
of a 190,716-sq.-ft. office component and an 88,086-sq.-ft.
warehouse component in Liberty Lake, Washington. The loan is on
the watchlist because the warehouse has been vacant since 2005.
The office space is fully occupied, and the reported DSC as of
Sept. 30, 2007, was 1.79x.
There is one loan, Aero Plastics ($3.4 million, 0.6%), with the
special servicer. The loan is secured by a 144,000-sq.-ft.
industrial property in Leominster, Massachusetts. The loan was
transferred to the special servicer in November 2007 due to
payment default. The borrower entered into a forbearance
agreement, which terminated on April 29, 2008. The forbearance
agreement was extended on a month-to-month basis through July 2008
to allow the borrower to market the property. A recent appraisal
report indicates a value above the loan exposure. At this time,
Standard & Poor's anticipates a minimal loss upon the resolution
of this asset.
Standard & Poor's stressed the loans on the watchlist and other
loans with credit issues as part of its analysis. The resultant
credit enhancement levels support the affirmed ratings.
Ratings Affirmed
JPMorgan Chase Commercial Mortgage Securities Corp.
Commercial mortgage pass-through certificates series 2002-C3
Class Rating Credit support
----- ------ ------------
A-1 AAA 22.47%
A-2 AAA 22.47%
B AAA 17.86%
C AAA 16.33%
D AA+ 12.34%
E AA 10.80%
F BBB+ 7.12%
G BBB- 5.27%
H BB 2.82%
J CCC 0.67%
K CCC- 0.21%
X-1 AAA N/A
X-2 AAA N/A
N/A - Not applicable.
KG LEGACY: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: KG Legacy Ozarks, LLC
12720 Hillcrest Rd. Ste. 720
Dallas, TX 75230
Bankruptcy Case No.: 08-41177
Chapter 11 Petition Date: May 5, 2008
Court: Eastern District of Texas (Sherman)
Debtor's Counsel: Frank J. Wright, Esq.
Email: bankruptcy@wgblawfirm.com
Wright Ginsberg Brusilow, P.C.
600 Signature Place
14755 Preston Road
Dallas, TX 75254
Tel: (972) 788-1600
http://www.wgblawfirm.com/
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor did not file a list of its largest unsecured creditors.
KIMBALL HILL: Section 341 Meeting of Creditors Slated for June 19
-----------------------------------------------------------------
William T. Neary, the U.S. Trustee for Region 11, will convene a
meeting of the creditors of Kimball Hill, Inc., and its debtor
subsidiaries at 1:30 p.m., on June 19, 2008, at the Dirksen
Federal Building, Room 804, at 219 South Dearborn, in Chicago,
Illinois.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases.
Attendance by the Debtors' creditors at the meeting is welcome,
but not required. The Sec. 341(a) meeting offers the creditors a
one-time opportunity to examine the Debtors' representative under
oath about the Debtors' financial affairs and operations that
would be of interest to the general body of creditors.
About Kimball Hill
Based in Rolling Meadow, Illinois, Kimball Hill Inc. --
http://www.kimballhillhomes.com/-- is one of the largest
privately-owned homebuilders and one of the 30 largest
homebuilders in the United States, as measured by home deliveries
and revenues. The company designs, builds and markets single-
family detached, single-family attached and multi-family homes.
The company currently operate within 12 markets, including, among
others, Chicago, Dallas, Ft. Worth, Houston, Las Vegas, Sacramento
and Tampa, in five regions: Florida, the Midwest, Nevada, the
Pacific Coast and Texas.
Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11
protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08-
10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents
the Debtors in their restructuring efforts. The U.S. Trustee for
Region 11 appointed an Official Committee of Unsecured Creditors
in the Debtors' cases.
The Debtors' consolidated financial condition as of Dec. 31, 2007
reflected total assets of $795,473,000 and total debts
$631,867,000. (Kimball Hill Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
KIMBALL HILL: U.S. Trustee Appoints Seven-Member Creditors Panel
----------------------------------------------------------------
William T. Neary, the U.S. Trustee for Region 11, appointed seven
members to the Official Committee of Unsecured Creditors of the
Chapter 11 cases of Kimball Hill Inc. and its 29 debtor
affiliates.
The Creditors Committee members are:
Member Representative
------ --------------
US Bank National Association Cindy Woodward
Indenture Trustee
Corporate Trust Services
60 Livingston Avenue
St Paul, MN 55107
SMH Capital Advisors, Inc. Stephen Cooke
4800 Overton Plaza
Suite 300
Fort Worth, TX 76109
California National Bank Jon Simon
221 S. Figueroa
Los Angeles, CA 90012
Tower Crossing Jamie Hadac
Homeowner's Association
6400 Shafer Court
Suite 175
Rosemont, IL 60018
Masco Builder Cabinet Group Stacy L. Lapham
21001 Van Born Road
Taylor, MI 48180
Builders Gypsum Supply David Groom
2015 Pasket Lane
Houston, TX 77092
Cesari Response Television, Inc. Tim O'Brien
1414 Dexter Avenue
Suite 300
Seattle, WA 98109
About Kimball Hill
Based in Rolling Meadow, Illinois, Kimball Hill Inc. --
http://www.kimballhillhomes.com/-- is one of the largest
privately-owned homebuilders and one of the 30 largest
homebuilders in the United States, as measured by home deliveries
and revenues. The company designs, builds and markets single-
family detached, single-family attached and multi-family homes.
The company currently operate within 12 markets, including, among
others, Chicago, Dallas, Ft. Worth, Houston, Las Vegas, Sacramento
and Tampa, in five regions: Florida, the Midwest, Nevada, the
Pacific Coast and Texas.
Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11
protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08-
10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents
the Debtors in their restructuring efforts. The Debtors'
consolidated financial condition as of Dec. 31, 2007 reflected
total assets of $795,473,000 and total debts $631,867,000.
(Kimball Hill Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
KIMBALL HILL: Wants to Hire Kirkland & Ellis as Bankr. Counsel
--------------------------------------------------------------
Kimball Hill Inc. and its debtor-affiliates ask authority from the
U.S. Bankruptcy Court for the District of Northern District of
Illinois to employ Kirkland & Ellis LLP, as their lead bankruptcy
counsel, nunc pro tunc to April 23, 2008.
Kimball Hall, Inc., Senior Vice President, Treasurer and Chief
Financial Officer Edward J. Madell, says that Kirkland & Ellis
has represented the Debtors with respect to corporate matters
since September 2005 and restructuring matters since January
2008. Thus, Kirkland & Ellis is familiar with the Debtors'
business and many of the legal issues that may arise in the
context of the Debtors' Chapter 11 cases.
The Debtors believe that Kirkland & Ellis is both well qualified
and uniquely able to represent them in their Chapter 11 cases in
an efficient and timely manner.
As the Debtors' counsel, Kirkland & Ellis will:
a. advise the Debtors with respect to their powers and duties
as debtors in possession in the continued management and
operation of their business and properties;
b. advise and consult on the conduct of the Chapter 11 cases,
including all of the legal and administrative
requirements of operating in Chapter 11;
c. attend meetings and negotiate with representatives of the
creditors and other partied in interest;
d. take all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the
Debtors' behalf, defending any action commenced against
the Debtors and representing the Debtors' interests in
negotiations concerning litigation in which the Debtors
are involved, including objections to claims filed against
the Debtors' estates;
e. prepare pleadings in connection with these Chapter 11
cases, including motions, applications, answers, orders,
reports, and papers necessary or otherwise beneficial to
the administration of the Debtors' estates;
f. represent the Debtors in connection with obtaining
postpetition financing;
g. advise the Debtors in connection with any potential sale
of assets;
h. appear before the Bankruptcy Court and any appellate
courts to represent the interests of the Debtors' estates
before those courts;
i. advise the Debtors regarding tax matters;
j. take any necessary action on behalf of the Debtors to
negotiate, prepare on behalf of the Debtors and obtain
approval of a disclosure statement and confirmation of a
Chapter 11 plan and all related documents; and
k. perform all other necessary legal services for the Debtors
in connection with the prosecution of these Chapter 11
cases, including:
* analyzing the Debtors' leases and contracts and the
assumptions, rejections, or assignments;
* analyzing the validity of liens against the Debtors; and
* advising the Debtors on corporate and litigation
matters.
Kirkland & Ellis' current hourly rates for contemplated services
to be rendered to the Debtors are:
Billing Category Hourly Rate
---------------- -----------
Partners $500 to $975
Of Counsel $380 to $870
Associates $275 to $595
Paraprofessionals $120 to $260
Paul M. Basta, Ray C. Schrock, and Catherine Peshkin, all
Kirkland & Ellis professionals, are presently expected to have
primary responsibility for providing services to the Debtors. In
addition, as necessary, other K&E professionals and
paraprofessionals may provide services to the Debtors.
The firm will also be reimbursed for any necessary and reasonable
expenses it incurs in relation to services rendered to the
Debtors, including postage, overnight mail, courier delivery,
transportation, overtime expenses, computer assisted legal
research, photocopying, outgoing facsimile transmissions,
airfare, meals and lodging.
In January 2008, the Debtors paid Kirkland & Ellis a classic
retainer of $250,000. On February 6, 2008, the Debtors increased
the classic retainer to $750,000; and further adjusted it to
$500,000 on February 12.
As of the date of bankruptcy, the Debtors assert that they do not
owe the firm any amounts for legal services rendered before the
bankruptcy filing.
Paul M. Basta, Esq., a partner at Kirkland & Ellis, assures the
Court that his firm is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code, and does not hold or
represent an interest adverse to the Debtors' estates. Moreover,
the firm has no connection to the Debtors, their creditors, or
their related parties except as may be disclosed, he adds.
Kirkland & Ellis informs the Court that it will periodically
review its files during the pendency of the Debtors' Chapter 11
cases to ensure that no conflicts or other disqualifying
circumstances exist or arise. If any new facts or relationships
are discovered or arise, the firm will use reasonable efforts to
identify further developments and will file promptly a
supplemental declaration as required.
The firm adds that it represents Madison Dearborn Partners, Inc.,
Dow Chemical Company, Bank of America, and Wachovia Corporation
in matters unrelated to the Debtors and their cases.
About Kimball Hill
Based in Rolling Meadow, Illinois, Kimball Hill Inc. --
http://www.kimballhillhomes.com/-- is one of the largest
privately-owned homebuilders and one of the 30 largest
homebuilders in the United States, as measured by home deliveries
and revenues. The company designs, builds and markets single-
family detached, single-family attached and multi-family homes.
The company currently operate within 12 markets, including, among
others, Chicago, Dallas, Ft. Worth, Houston, Las Vegas, Sacramento
and Tampa, in five regions: Florida, the Midwest, Nevada, the
Pacific Coast and Texas.
Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11
protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08-
10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents
the Debtors in their restructuring efforts. The U.S. Trustee for
Region 11 appointed an Official Committee of Unsecured Creditors
in the Debtors' cases.
The Debtors' consolidated financial condition as of Dec. 31, 2007
reflected total assets of $795,473,000 and total debts
$631,867,000. (Kimball Hill Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
LEHMAN MORTGAGE: Higher Delinquencies Cues Moody's 28 Rating Cuts
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of 28 tranches
from eleven Lehman Mortgage Trust deals. Three tranches remain on
review for possible further downgrade. Additionally, 103 tranches
were placed on review for possible downgrade.
The collateral backing these transactions consists primarily of
first-lien, fixed, Alt-A mortgage loans. The ratings were
downgraded or placed on review, in general, based on higher than
anticipated rates of delinquency, foreclosure, and REO in the
underlying collateral relative to credit enhancement levels. The
actions are a result of Moody's on-going review process.
Complete rating actions are:
Issuer: Lehman Mortgage Trust 2005-2
-- Cl. B1(1-3), Downgraded to A2 from Aa2
-- Cl. B2(1-3), Downgraded to A3 from Aa3
-- Cl. B3(1-3), Downgraded to Ba1 from A2
-- Cl. B4(1-3), Downgraded to Ba3 from A3
-- Cl. B5(1-3), Downgraded to B1 from Baa2; Placed Under Review
for further Possible Downgrade
-- Cl. B6(1-3), Downgraded to B2 from Baa3; Placed Under Review
for further Possible Downgrade
Issuer: Lehman Mortgage Trust 2005-3
-- Cl. B1, Downgraded to Aa3 from Aa2
-- Cl. B2, Downgraded to A2 from Aa3
-- Cl. B3, Downgraded to Baa3 from A2
-- Cl. B4, Downgraded to Ba2 from A3
-- Cl. B5, Downgraded to B2 from Baa2
-- Cl. B6, Downgraded to B2 from Baa3; Placed Under Review for
further Possible Downgrade
Issuer: Lehman Mortgage Trust 2006-1
-- Cl. B2, Downgraded to Baa1 from A2
-- Cl. B3, Downgraded to B1 from Baa2
-- Cl. B4, Downgraded to Caa2 from Ba2
Issuer: Lehman Mortgage Trust 2006-3
-- Cl. 2-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. AP, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. M, Downgraded to Ba2 from Aa2
Issuer: Lehman Mortgage Trust 2006-5
-- Cl. 1-A4, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 1-A5, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A6, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A7, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A8, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A9, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A10, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A11, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A12, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A13, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A14, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A15, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A16, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A4, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. AX, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. AP, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. M, Downgraded to Baa3 from Aa2
Issuer: Lehman Mortgage Trust 2006-7
-- Cl. 1-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A5, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A6, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 1-A7, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A8, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A9, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A10, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A3, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 2-A4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A5, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A6, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A7, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A8, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 2-A9, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A11, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 3-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 3-A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 3-A3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 3-A4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 3-A5, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 3-A6, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 3-A7, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 4-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 4-A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 5-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 5-A3, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 5-A5, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 5-A7, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 5-A8, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. AX, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. AP, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. M, Downgraded to Baa3 from Aa2
Issuer: Lehman Mortgage Trust 2006-8
-- Cl. 1-A2, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 2-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A4, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 3-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 3-A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 4-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 4-A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. AP, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. M, Downgraded to Ba2 from Aa2
Issuer: Lehman Mortgage Trust 2006-9
-- Cl. 1-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A6, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A8, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A9, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A10, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A11, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 1-A13, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A14, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A15, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A16, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A17, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A18, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A19, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A20, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A21, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A22, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A23, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A24, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A25, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A26, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A27, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 1-A28, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A4, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 2-A5, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A7, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 2-A9, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 2-A11, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 2-A12, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 3-A1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 3-A2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. AP, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. M-1A, Downgraded to Baa3 from Aa2
-- Cl. M-1B, Downgraded to Baa3 from Aa2
Issuer: Lehman Mortgage Trust 2007-2
-- Cl. M, Downgraded to Baa1 from Aa2
Issuer: Lehman Mortgage Trust 2007-5
-- Cl. 1M, Downgraded to Aa3 from Aa2
-- Cl. 2B1, Downgraded to Aa3 from Aa2
-- Cl. 2B2, Downgraded to Ba1 from Baa2
-- Cl. 2B3, Downgraded to Caa2 from Ba2
-- Cl. 2B4, Downgraded to Ca from B2
-- Cl. 2B5, Downgraded to Ca from Caa1
Issuer: Lehman Mortgage Trust 2007-7
-- Cl. 4-A4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 4-A9, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 5-A5, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 6-A3, Placed on Review for Possible Downgrade,
currently Aa1
LINENS N THINGS: Gets Limited Access to Lenders' Cash Collateral
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Linens Holding Co., its operating subsidiary Linens 'N Things
Inc., and their debtor-affiliates limited use of their lenders'
prepetition collateral on the terms agreed with the parties.
The Court will convene a hearing on May 27, 2008, at 2:00 p.m. to
consider, on a final basis, the Debtors' use of the lenders' cash
collateral.
In addition to the need for a $700,000,000 debtor-in-possession
financing, the Debtors require immediate use of collateral,
including cash collateral, pending final approval of their DIP
Loan. The Debtors require use of cash collateral to be able to
pay operating expenses, including payroll, and to pay vendors to
restore and ensure a continued supply of goods essential to their
continued viability.
Pursuant to a Credit Agreement dated October 24, 2007, among
Linens Inc., and Linens Center, as U.S. borrowers, Linens Canada,
as Canadian borrower, entered into a credit facility with a
syndicate of lenders and General Electric Capital Corporation, as
U.S. Administrative and Collateral Agent, and GE Canada Finance
Holding Company, as Canadian Administrative and Collateral Agent.
The Prepetition Credit Facility consists of:
-- a $625,000,000 revolving credit facility, and
-- a $75,000,000 Tranche B commitment, both of which are
subject to a borrowing base.
Up to $40,000,000 is available under the revolving credit portion
of the Prepetition Credit Facility exclusively to Linens Canada,
as Canadian borrower.
As of May 2, 2008, an aggregate amount of $369,300,000, is
outstanding under the Prepetition Credit Facility.
Amounts outstanding under the Prepetition Credit Facility are
secured by (i) a first priority security interest in all of the
Linens Companies' inventory, accounts receivable, general
intangibles, chattel paper, instruments, letter of credit rights,
and certain of the Linens Companies' deposit accounts, securities
accounts and capital stock of certain subsidiaries; and (ii) a
second priority security interest in the Linens Companies'
equipment, owned real estate, intellectual property, certain
deposit accounts, the capital stock of Linens Inc., and the
capital stock of certain subsidiaries, limited, in the case of
the Canadian Subsidiaries, to 65% of the capital stock.
The second priority security interest in the Linens Companies'
owned real estate, securing the Prepetition Credit Facility,
extends only to the Linens Companies' owned real estate in
Guilford County, North Carolina, and not the owned real estate in
Newport News, Virginia.
In addition to the Prepetition Credit Facility, Linens Inc. and
Linens 'n Things Center, Inc.,issued $650,000,000 of Senior
Secured Floating Rate Notes due 2014 to noteholders pursuant to
an Indenture, dated February 14, 2006, under which Bank of New
York acted as Indenture Trustee. The Notes are secured by a
first priority security interest in the Indenture Collateral and
a second priority security interest in the Prepetition Credit
Facility Collateral.
The Prepetition Lenders have consented to the Debtors' use of
Collateral on the terms agreed by the parties, including the
provision of adequate protection, relates Proposed counsel for
the Debtors, Mark D. Collins, Esq., at Richards, Layton & Finger,
P.A., in Wilmington, Delaware.
As adequate protection for any diminution in their security
interests, the Prepetition Lenders will receive, (i) replacement
liens junior only to, among other liens, the DIP Liens, (ii) an
allowed super priority administrative expense claim pursuant to
Section 507(b) of the Bankruptcy Code that is junior to the
superpriority claim of the DIP Lenders and the superpriority
adequate protection claims of the Indenture Trustee, and (iii)
adequate protection payments in the amount of interests and fees
and other amounts due under the Prepetition Credit Agreement.
As adequate protection for any diminution in the interests of the
Indenture Trustee, it will receive (i) replacement liens junior
to the DIP Liens and the adequate protection liens of the
Prepetition Agent on the Prepetition Credit Facility collateral,
(ii) an allowed super priority administrative expense claim
pursuant to Section 507(b) of the Bankruptcy Code that is junior
to the superpriority claim of the DIP Lenders and the
superpriority adequate protection claims of the Prepetition
Agent, and (iii) subject to the rights of the Debtors and other
parties-in-interest under Section 506(b) of the Bankruptcy Code,
to later assert that the payments should be allocated to a
reduction of the principal amount of the Notes, adequate
protection payments in the amount of reasonable fees, costs and
expenses, including legal and other professional fees and
expenses of the Indenture Trustee and the ad hoc committee of
Noteholders.
About Linens N' Things
Clifton, New Jersey-based Linens Holding Co., which does business
through its operating subsidiary Linens 'N Things Inc. --
http://www.lnt.com/-- is the second largest specialty retailer of
home textiles, housewares and home accessories in North America
operating 589 stores in 47 U.S. states and seven Canadian
provinces as of December 29, 2007. The company is a destination
retailer, offering one of the broadest and deepest selections of
high quality brand-name well as private label home furnishings
merchandise in the industry.
Linens 'N Things and 11 affiliates filed separate voluntary
petitions under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court for the District of Delaware on
May 2, 2008 (Lead Case No. 08-10832). The Canadian operations are
not included in the filings.
Linens 'N Things has secured a $700 million debtor-in-possession
financing from General Electric Capital Corp. The company plans
to be out of chapter 11 by the end of the year, on this timetable:
09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan
10/14/2008 DIP Facility Deadline for Disclosure Statement
Approval
11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan
11/28/2008 DIP Facility Deadline for Entry of a Confirmation
Order
Linens 'N Things is represented by Richards, Layton & Finger,
P.A., and Morgan, Lewis & Bockius LLP. Conway, Del Genio, Gries &
Co., LLC will serve as the retailer's restructuring advisor until
substantial consummation of a chapter 11 plan. Conway Del Genio's
Michael F. Gries acts as the Debtors' chief restructuring officer
and interim CEO. Kurtzman Carson Consultants LLC acts as the
Debtors' claims agent.
A Noteholder Committee has been formed and is represented by
Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl
& Jones.
(Linens 'n Things Bankruptcy News, Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
LINENS N THINGS: Noteholders Threaten to Challenge DIP Facility
---------------------------------------------------------------
Bloomberg News said noteholders of Linens Holding Co., its
operating subsidiary Linens 'N Things Inc., and their debtor-
affiliates have indicated they might oppose final approval of the
Debtors' $700,000,000 DIP Credit Facility from General Electric
Capital Corporation and other lenders, if Linens' financial
position weakens.
The noteholders did not oppose interim approval of the DIP Loan.
"We are in the first loss position as the debtors' position
erodes," said Adam L. Shiff, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, concerned that payment for the DIP Loan would come
ahead of payments to noteholders. Prepetition Linens 'n Things
issued $650,000,000 of Senior Secured Floating Rate Notes due 2014
to noteholders, with the Bank of New York as indenture Trustee.
According to Reuters, Mark D. Collins, Esq., at Richards, Layton
& Finger, P.A., in Wilmington, Delaware, said interim approval of
the loan boosts Linens 'n Things' available cash by $40,000,000.
Winning interim approval helped the company, its lenders and
bondholders avoid "a fight at the outset of the case, which would
not have helped the debtors' ability to restructure," Mr. Collins
told Judge Sontchi, according to Bloomberg News.
"I don't want you to hold money hostage," Judge Sontchi warned
GECC, according to CNNMoney. Part of the DIP Loan will be used
to pay $430,000,000 in existing loans to GECC.
The Court will convene a hearing to consider final approval of
the DIP Loan on May 27, 2008, at 2:00 p.m. Objections are due
May 19.
Linens Reaffirms Commitment to Honor Gift Cards
Separately, Linens has reaffirmed its commitment to honor the
Company's gift cards in all of its stores. Following the
Company's recent Chapter 11 filing, the Court has approved that
customers will continue to be able to redeem gift cards in LNT
stores. The Company's rebate and wedding registry programs will
also continue to be available.
"LNT gift cards are a popular item for our guests and an important
part of our business," said David Coder, President and Chief
Operating Officer. "We are pleased that our current restructuring
will not interrupt our gift card program and our guests will be
able to redeem gift cards as usual. There will also be no change
to our rebate policy or to our valued wedding registry business."
About Linens N' Things
Clifton, New Jersey-based Linens Holding Co., which does business
through its operating subsidiary Linens 'N Things Inc. --
http://www.lnt.com/-- is the second largest specialty retailer of
home textiles, housewares and home accessories in North America
operating 589 stores in 47 U.S. states and seven Canadian
provinces as of December 29, 2007. The company is a destination
retailer, offering one of the broadest and deepest selections of
high quality brand-name well as private label home furnishings
merchandise in the industry.
Linens 'N Things and 11 affiliates filed separate voluntary
petitions under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court for the District of Delaware on
May 2, 2008 (Lead Case No. 08-10832). The Canadian operations are
not included in the filings.
Linens 'N Things has secured a $700 million debtor-in-possession
financing from General Electric Capital Corp. The company plans
to be out of chapter 11 by the end of the year, on this timetable:
09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan
10/14/2008 DIP Facility Deadline for Disclosure Statement
Approval
11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan
11/28/2008 DIP Facility Deadline for Entry of a Confirmation
Order
Linens 'N Things is represented by Richards, Layton & Finger,
P.A., and Morgan, Lewis & Bockius LLP. Conway, Del Genio, Gries &
Co., LLC will serve as the retailer's restructuring advisor until
substantial consummation of a chapter 11 plan. Conway Del Genio's
Michael F. Gries acts as the Debtors' chief restructuring officer
and interim CEO. Kurtzman Carson Consultants LLC acts as the
Debtors' claims agent.
A Noteholder Committee has been formed and is represented by
Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl
& Jones.
(Linens 'n Things Bankruptcy News, Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
LEXINGTON PRECISION: Seven Members Appointed to Creditors' Panel
----------------------------------------------------------------
Diana G. Adams, the U.S. Trustee for Region 2, appointed seven
members to the Official Committee of Unsecured Creditors in
Lexington Precision Corp. and Lexington Rubber Group Inc.'s
Chapter 11 cases.
The Committee members include:
1) Wilmington Trust Company
Attn: James J. McGinley
1100 North Market Street
Wilmington, DE 19890
Tel: (212) 415-0522
2) Jefferies High Yield Trading
Attn: Robert J. Welch
The Metro Center
One Station Place, Three North
Stamford, CT 06902
Tel: (203) 708-5800
3) Wilfrid Aubrey, LLC
Attn: Nicholas Walsh
100 William Street, Suite 1850
New York, NY 10038
Tel: (212) 675-4906
4) Valhalla Capital Partners, LLC
Attn: Ramond P. Mercherle
2527 Nelson Miller Parkway
Suite 207
Louisville, KY 40223
Tel: (502) 301-8400 ext. 14
5) Momentive Performance Materials, Inc.
Attn: Janette Wendorf
260 Hudson River Road
Waterford, NY 12188
Tel: (518) 233-5608
6) Wacker Chemical Corporation
Attn: James D. Lammers
3301 Sutton Road
Adrian, MI 49221
Tel: (517) 264-8309
7) Environmental Products & Services of Vermont, Inc.
Attn: Michael J. Lawler
532 State Fair Boulevard
Syracuse, NY 13204
Tel: (315) 451-6666 ext. 213
About Lexington Precision
Based in New York, Lexington Precision Corp. --
http://www.lexingtonprecision.com/-- manufacture tight-tolerance
rubber and metal components for use in medical, automotive, and
industrial applications. As of Feb. 29, 2008, the companies
employed about 651 regular and 22 temporary personel.
The company and its affiliate, Lexington Rubber Group Inc., filed
for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead
Case No.08-11153). Richard P. Krasnow, Esq., at Weil, Gotshal &
Manges, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection against their creditors,
they listed total assets of $52,730,000 and total debts of
$88,705,000.
LEXINGTON PRECISION: Court Okays Weil Gotshal as Bankr. Counsel
---------------------------------------------------------------
Lexington Precision Corp. and Lexington Rubber Group Inc. obtained
authority from the U.S. Bankruptcy Court for the Southern District
of New York to employ Weil Gotshal & Manges LLP as their general
bankruptcy counsel.
Weil Gotshal is expected to take all necessary and appropriate
action to protect and preserve the estates of the Debtors,
including the prosecution, defense, and negotiations of actions in
which the Debtors are involved, and assist the Debtors in drafting
their plan of reorganization and related disclosure statement.
Richard P. Krasnow, Esq., a member at Weil Gotshal, told the Court
that the firm's professionals bill at these hourly rates:
Members and Counsel $650 - $950
Associates $355 - $595
Paraprofessionals $155 - $290
Mr. Krasnow assured the Court that the firm is disinterested as
that term is defined in Section 101(14) of the U.S. Bankruptcy
Code.
About Lexington Precision
Based in New York, Lexington Precision Corp. --
http://www.lexingtonprecision.com/-- manufacture tight-tolerance
rubber and metal components for use in medical, automotive, and
industrial applications. As of Feb. 29, 2008, the companies
employed about 651 regular and 22 temporary personel.
The company and its affiliate, Lexington Rubber Group Inc., filed
for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead
Case No.08-11153). Richard P. Krasnow, Esq., at Weil, Gotshal &
Manges, represents the Debtors in their restructuring efforts.
The U.S. Trustee for Region 2 has appointed an Official Committee
of Unsecured Creditors in the Debtors' cases.
When the Debtors filed for protection against their creditors,
they listed total assets of $52,730,000 and total debts of
$88,705,000.
MARATHON HEALTHCARE: Wants to Hire Rogin Nassau as Counsel
----------------------------------------------------------
Marathon Healthcare Group, LLC and its debtor-affiliates asked the
U.S. Bankruptcy Court for the District of Connecticut to employ
Rogin Nassau LLC as their counsel.
Among other services, the firm will give the Debtor legal advice
concerning their powers and duties of a debtor in possession.
Rogin Nassau's partners charge at $275 to $485 per hour, its
associates at $150 to $275 per hour. The Debtor paid the firm a
$93,415 retainer prior to the bankruptcy filing.
Barry S. Feigenbaum, Esq., at Rogin Nassau, LLC, said that his
firm has no adverse interest against the Debtor and the estate.
The law firm is located at 185 Asylum Street, CityPlace I in
Hartford, Connecticut.
East Hartford, Connecticut-based Marathon Healthcare Group, LLC --
http://www.marathonhealthcare.com/-- provides nursing and long
term care. Together with seven affiliates, the healthcare
provider filed for chapter 11 protection on April 3, 2008 (Bankr.
D. Conn. Lead Case No. 08-20591). When the Debtors filed for
chapter 11, they listed assets between $100,000 and $1 million and
debts between $1 million and $10 million.
MASONITE INT'L: Moody's Cuts Debt Ratings on Revenue Contraction
----------------------------------------------------------------
Moody's Investors Service has downgraded the debt ratings of
Masonite International to reflect the outlook for the company's
ongoing financial performance given the pressures from the new
home construction market and from the repair and remodeling
market. The company's CFR was downgraded to B3 and the ratings
outlook remains negative.
These debt ratings or assessments have been affected:
-- Corporate family rating, downgraded to B3 from B2;
-- Probability of default rating, downgraded to B3 from B2;
-- $1,172 million Gtd. Sr. Sec. Term Loan due 2013, downgraded
to B2 (LGD3, 33%) from Ba3 (LGD3, 32%);
-- $350 million Gtd. Sr. Sec. Revolver due 2011, downgraded to
B2 (LGD3, 33%) from Ba3 (LGD3, 32%);
-- Speculative grade liquidity rating, downgraded to SGL-4 from
SGL-3.
Moody's downgrade of Masonite's debt ratings reflects ongoing
revenue contraction due to the slowdown in new home construction
and in the repair & remodeling segment. The company also lost
half of its Home Depot business starting in early 2007, at a time
when its end markets began contracting. Although management has
aggressively tackled its cost structure through plant closings,
employee reductions, marketing initiatives, and product
initiatives, the pressure from contracting sales has been too much
to offset. Moreover, Moody's currently estimates new housing
starts to be 900 thousand for 2008 vs. approximately 1.35 million
in 2007. There is also significant pressure in the repair and
remodeling market in the US, which impacts the company's North
America wholesale and retail businesses. The North American
business was approximately 70% of Masonite's 2007 revenue and is
expected to remain under pressure through 2008.
The senior secured credit facility is rated one notch higher than
the company's CFR to reflect its senior status in the event of
bankruptcy. The CFR and the notching consider the company's
capital structure and anticipated recovery in the event of default
per Moody's LGD rating methodology.
The negative ratings outlook reflects the outlook for the
company's business segments and the limited amount of cushion
under its financial covenants. The company's decision to borrow
aggressively under its revolver may affect its relationship with
its banks. The company's ratings may therefore be further
downgraded if the company has difficulty in obtaining bank waivers
in the event that it trips its covenants.
Masonite is headquartered in Ontario, Canada. The company is a
leading global manufacturer of doors and door components with over
60 facilities in 18 countries in North America, Europe, Latin
America, Asia and Africa. Revenues for fiscal year 2007 were
approximately $2.2 billion.
MCJUNKIN RED: S&P Assigns 'B+' Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to McJunkin Red Man Holding Corp. S&P also assigned
a 'B-' issue rating, two notches below the corporate credit
rating, and a '6' recovery rating to its proposed $450 million
term loan facility. The '6' recovery rating reflects the
expectation of negligible (0% to 10%) recovery in the event of a
payment default. The outlook is stable.
At the same time, S&P revised its outlook on operating company
McJunkin Red Man Corp. to stable from positive. S&P also affirmed
its 'BB' rating, two notches above the 'B+' corporate credit
rating, and its '1' recovery rating to MRMC's proposed $50 million
asset-backed revolving credit facility due 2012, which is an
add-on to the company's existing $650 million facility. The
recovery rating of '1' indicates the expectation of very high
(90% to 100%) recovery in the event of a payment default. S&P
affirmed all other ratings for MRMC, including its 'B+' corporate
credit rating.
"MRMHC is a holding company with no direct operations and depends
upon cash flow from MRMC to meet its debt obligations. As a
result, we view MRMHC and MRMC as a consolidated enterprise," said
Standard & Poor's credit analyst Sherwin Brandford.
The proceeds from the proposed financings will be used to return
the $475 million special equity contribution that shareholders
made in October 2007 to partially fund the McJunkin/Red Man merger
transaction. Pro forma for the proposed transactions, MRMHC will
have approximately $1.3 billion of outstanding consolidated debt.
"The outlook revision reflects the somewhat more aggressive
financial policy of MRMHC as a result of the return of the special
equity contribution transaction." Mr. Brandford said. "As a
result, it is our assessment that, despite pro forma credit
measures remaining at a level that we would consider good for the
rating, we would expect them to be maintained at a level more
consistent with the current 'B+' rating over time. However, if
operating performance remains good throughout the next few to
several quarters, and credit measures remain around pro forma
levels or improve, we could revise the outlook back to positive."
S&P could revise the outlook back to positive in the near term if
the company consistently maintains debt leverage below 4x as a
result of continued solid operating performance or steady debt
reduction. Conversely, a negative outlook is possible if debt
levels increase as a result of the pursuit of material debt-
financed growth initiatives or if end markets become pressured,
resulting in weaker-than-expected operating performance, a
scenario S&P see as less likely in the near term, given good
market conditions.
MEDIANEWS GROUP: Weak Sales Cues Moody's Corp. Rating Cut to 'B3'
-----------------------------------------------------------------
Moody's Investors Service has downgraded the Corporate Family
rating of MediaNews Group Inc. to B3 from B1 and Probability of
Default rating to Caa1 from B1, largely reflecting substantially
weaker than expected advertising and circulation sales, which
management disclosed had declined by 14% and 6%, respectively, on
a same newspaper basis for the three months ended Dec. 30, 2007,
and a correspondingly increased probability of default relative to
former expectations. Somewhat offsetting this growing risk,
however, is the shift to an above-average recovery expectation for
the corporate enterprise (resulting in lower loss given default or
LGD rates for its rated securities), which should be readily
supportable based on the perceived high underlying value of the
company's assets relative to debt, even under more distressed
conditions.
The continuing negative outlook underscores Moody's concern that a
continuation in the recent pace of MediaNews's top line and EBITDA
declines will exacerbate pressure on the company's asset coverage
metrics, leading to a further deterioration in liquidity, and a
questionable ability to comply with financial covenants which are
scheduled to step-down over the next six months ( absent a further
amendment, or a reduction in debt from the proceeds of asset sales
or equity investments from MediaNews's owners and partners,
including The Hearst Corporation).
Details of the rating action are:
-- Corporate family rating: to B3 from B1
-- Probability of Default rating: to Caa1 from B1
-- Senior secured revolving credit facility due 2009: to B1,
LGD2, 18% from Ba3, LGD3, 33%
-- Senior secured term loan A due 2010: to B1, LGD2, 18% from
Ba3, LGD3, 33%
-- Senior secured term loan B due 2010: to B1, LGD2, 18% from
Ba3, LGD3, 33%
-- Senior secured term loan C due 2013: to B1, LGD2, 18% from
Ba3, LGD3, 33%
-- 6.375% senior subordinated global notes due 2014: to Caa2,
LGD4, 69% from B3, LGD5, 86%
-- 6.875% senior subordinated global notes due 2013: to Caa2,
LGD4, 69% from B3, LGD5, 86%
The rating outlook remains negative.
Headquartered in Denver, Colorado, MediaNews Group Inc. is a large
newspaper publishing company. For the LTM period ended Dec. 31,
2007, the company reported pro-rata revenues of approximately
$1.6 billion.
MONITOR OIL: Global Maritime & Adshead Sued for Contract Breach
---------------------------------------------------------------
Monitor Oil PLC and its debtor-affiliates commenced an adversary
proceedings against Global Maritime, an offshore engineering and
design firm in Houston, Texas, and Stephen Adshead, a controlling
party of Mancorp AS, for breach of fiduciary duties to the
Debtors.
The Debtors assert that Global Maritime has not complied with
some obligations under a second amended and restated agreement
entered among the parties in August 2006, which remains in effect
and governs the current relationship between the parties. Global
Maritime has failed to provide schematic drawings, calculations,
regulatory approvals and other intellectual property for the
Single Lift Vessel (SLV) design to the Debtors pursuant to the
agreement.
Mancorp entered in an agreement dated June 2006 with the Debtors,
which calls for Mr. Adshead to oversee and manage "all phases of
the SLV construction project." Mr. Adshead was the president and
director of Monitor Offshore Systems AS.
The Debtors say Mr. Adshead failed to obtain documents for the SLV
design from Global Maritime. Mr. Adshead permitted Global
Maritime to take all of the materials constituting the SLV design
back after Global Maritime terminated the second amended and
restated agreement on Nov. 14, 2007.
The Debtors say they requested Global Maritime and Mr. Adshead to
turn over all documents of the SLV design but both refused to do
so. Global Maritime and Mr. Adshead have taken action to use the
SLV design for their own benefit, the Debtors allege.
The Debtors could suffer imminent harm if Global Maritime and Mr.
Adshead still have control over the SLV design.
About Monitor Oil
Headquartered in the Cayman Islands, Monitor Oil, Plc --
htpp://www.monitoroil.com/ -- an oil and gas service company that
provides oil and gas production solutions, offshore services and
engineering services. The Monitor Group has operations in London,
England; Aberdeen, Scotland; Stavanger, Norway; Caldicot, Wales;
Shanghai, China and New York, United States.
The company and two of its affiliates, Monitor Single Lift 1,
Ltd., and Monitor US FinCo, Inc., filed for Chapter 11 Protection
on Nov. 21, 2007 (Bankr. S.D.N.Y. Case No. 07-13709). Eric Lopez
Schnabel, Esq., at Dorsey & Whitney, L.L.P., represents the
Debtor. The U.S. Trustee for Region 2 appointed five creditors
to serve on an Official Committee of Unsecured Creditors in the
Debtors' cases. Ira L. Herman, Esq., at Thompson & Knight, LLP,
represents the Committee. As of Dec. 31, 2007, the company
disclosed total assets of $98,340,000 and total debts of
$56,125,000.
MUTUAL SAVINGS: AM Best Lifts Rtng. to B+(Good) From C++(Marginal)
------------------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of
A(Excellent) and issuer credit ratings of "a" of Unitrin Property
and Casualty Insurance Group and some of its members. The outlook
for these ratings is stable.
A.M. Best also has continued the under review with negative
implications status of the FSRs of A(Excellent) and ICRs of "a" of
the remaining members of Unitrin : Milwaukee Casualty Insurance
Company, Security National Insurance Company, Trinity Lloyd's
Insurance Company and Trinity Universal Insurance Company of
Kansas, Inc. These ratings will remain under review with negative
implications pending the close of their sale to AmTrust Financial
Services, Inc.
Concurrently, A.M. Best upgraded the FSR to B+(Good) from
C++(Marginal) and ICR to "bbb-" from "b" of a recently acquired
and separately rated subsidiary of Unitrin, Mutual Savings Fire
Insurance Company. These ratings have been removed from under
review and assigned a positive outlook.
Additionally, A.M. Best has affirmed the ICR of "bbb" and debt
ratings of the outstanding senior notes of Unitrin's parent,
Unitrin, Inc. The outlook for these ratings is stable.
In addition, A.M. Best has affirmed the FSR of A(Excellent) and
ICRs of "a" of United Insurance Company of America, Union National
Life Insurance Company and The Reliable Life Insurance Company,
the three career agent life/health insurance subsidiaries of
Unitrin, Inc. At the same time, A.M. Best has affirmed the FSR of
A-(Excellent) and ICR of "a-" of Reserve National Insurance
Company, the independent agent life/health insurance subsidiary of
Unitrin, Inc. The outlook for these ratings is stable.
A.M. Best also has upgraded the FSR to B++(Good) from B-(Fair) and
ICR to "bbb" from "bb-" of Mutual Savings Life Insurance Company,
a recently acquired subsidiary of Unitrin, Inc. These ratings
have been removed from under review with positive implications and
assigned a stable outlook.
Unitrin's ratings reflect its solid operating income in recent
years, geographic spread of risk and operational support of its
parent. These positive rating factors are partially offset by the
group's elevated underwriting and investment leverage ratios.
Unitrin's outlook is based on the solid operating performance in
recent years.
Mutual Savings Fire Insurance Company's ratings recognize its
improved underwriting leverage measures, return to profitable
operating performance in recent years, reduced exposure to
weather-related losses and the support of Unitrin, Inc. Partially
offsetting these positive rating factors is the company's
geographic concentration in Alabama and Mississippi and its
limited product offerings. The outlook reflects the expectation
that the company eventually will be covered by a reinsurance
contract with Unitrin's lead company, Trinity Universal Insurance
Company.
The ratings of the life/health career agent subsidiaries reflect
their important role within the Unitrin, Inc. organization, strong
niche presence in the home service life insurance market, a well
established employee agency field force and overall positive
operating performance. Furthermore, A.M. Best believes that the
risk-adjusted capitalization of the three life/health career agent
subsidiaries, both on a combined and stand-alone basis, remains
sufficient despite large dividend payments made to Unitrin, Inc.
over the past several years.
Partially offsetting these positive rating factors is A.M. Best's
belief that the life/health career agent subsidiaries may be
challenged to sustain organic premium growth given the limited
growth potential in the mature home service market and to sustain
and improve upon historical earning results given the reduced
levels of invested assets and the current low interest rate
environment.
The ratings of RNIC acknowledge its improved accident and health
premium trends, favorable operating performance and adequate
stand-alone risk-adjusted capitalization. Partially offsetting
these positive rating factors is the challenge for RNIC to sustain
its operating performance given its limited business profile
marketing accident and health insurance products and Medicare
supplement insurance to individuals and small business owners
living in rural areas.
The rating actions on MSL follow the completion of the acquisition
of MSL's former parent, Primesco, Inc. by Unitrin, Inc. on
April 1, 2008. A.M Best believes MSL will benefit from its new
parent through additional financial flexibility and expanded
marketing resources while modestly enhancing Unitrin, Inc.'s
market share in the home service and limited supplemental health
benefit segments and expanding Unitrin, Inc.'s geographic
footprint. Additionally, A.M Best believes that MSL will be
modestly accretive to Unitrin, Inc.'s earnings. The rating
actions also reflect MSL's profitable operating performance and
the expected improvement in both the company's absolute levels of
capital and surplus and stand-alone risk-adjusted capitalization.
Offsetting these positive factors is MSL's significant business
concentration in Alabama, leaving it susceptible to the market,
judicial and regulatory environment of a single jurisdiction.
Moreover, MSL's direct and net premium written trends have been
declining in recent years. A.M. Best believes the company may be
challenged going forward to sustain and grow its businesses due to
both the historically weak sales growth in the home service life
insurance segment as well as the direct impact that the economic
climate has had on the home service sector.
Future rating actions on MSL will reflect the progress of the
integration of MSL into the existing operations of Unitrin's life
and health segment as well as the materiality of its strategic and
financial contributions to the group. A.M. Best notes Unitrin,
Inc.'s considerable acquisition experience, suggesting the
likelihood of a successful integration.
NEWFIELD EXPLORATION: Fitch Holds Ratings on $425MM Notes Issuance
------------------------------------------------------------------
Fitch Ratings has affirmed Newfield Exploration Company's Issuer
Default Rating at 'BB+' after the company announced that it plans
to issue $425 million of senior subordinated notes due in 2018.
In addition, Fitch has affirmed the ratings on Newfield's senior
subordinated notes at 'BB-'. Fitch maintains these ratings on
Newfield with a Stable Rating Outlook:
-- Issuer Default Rating 'BB+';
-- Senior unsecured 'BB+';
-- Senior unsecured bank facility 'BB+';
-- Senior subordinated notes 'BB-'.
The rating action reflects Newfield's expectations that the
current debt offering should be sufficient to fund the increased
2008 capital expenditure program and to repay outstanding
borrowings under the company's credit agreement. Following the
debt issuance, debt/boe metrics are expected to rise, however the
2008 capital program is also expected to result in sizeable
reserve adds for the year which will drive improvement in these
metrics. Since Newfield has shifted its asset base away from the
high decline Gulf of Mexico shelf assets toward the more
predictable onshore basins, Moody's believe the company is
currently better positioned to handle the higher debt levels
within the current rating category.
Credit metrics were strong at year-end 2007 as Newfield generated
EBITDA of $1.213 billion during the year and provided interest
coverage of 11.9 times and leverage, as measured by debt-to-EBITDA
of 0.9x. Free cash flow during 2007 was negative $789 million
primarily related to the acquisitions and divestitures completed
by the company during the year. Free cash flow is expected to
remain negative in 2008 as the company aggressively develops the
Woodford Shale resource play and completed an acquisition during
the first quarter of 2008. At year-end 2007, debt/boe of proven
reserves was $2.52/boe ($.42/mcfe) and debt/boe of proven
developed reserves was $4.02/boe ($.67/mcfe). While the proposed
debt offering, is expected to increase debt levels on a per boe
basis, reserve adds during the year are expected to significantly
mitigate the increased debt/boe and debt/PDP by year-end 2008.
Newfield's credit profile should continue to benefit from high
commodity prices and the company's active hedging program which
reduces exposure to near-term commodity price volatility. While
interest expense and production costs are expected to rise, the
increase should be mitigated by the robust production levels
Newfield is currently generating. During the company's first
quarter earnings call, production guidance was increased to 224 to
234 bcfe for 2008 and should support higher cash flows levels in
2008 and beyond.
Newfield is a mid-sized oil and gas exploration and production
company headquartered in Houston, Texas. Newfield has operations
in several major regions of the United States (Mid-Continent,
Rocky Mountains, South Texas, and deep water Gulf of Mexico), as
well as international offshore operations in Malaysia and China.
At YE 2007, Newfield's reserves had grown to 416 mmboe, of which
63% was proven developed and approximately 70% natural gas.
NEWFIELD EXPLORATION: Moody's Puts 'Ba3' Rating on $600 Mil. Notes
------------------------------------------------------------------
Moody's Investors Service assigned a Ba3 (LGD 5; 78%) rating to
Newfield Exploration's pending $600 million of 10-year senior
subordinated notes and affirmed its existing Ba2 corporate family,
Ba2 Probability of Default, Ba1 (LGD 2; 25%) senior unsecured
note, and Ba3 (LGD 5; 78%) senior subordinated ratings. The
rating outlook remains stable.
Note proceeds would repay any borrowings under its unsecured bank
revolver, and build cash to pre-fund a portion of its $2 billion
2008 capital spending budget.
The ratings generally reflect increased leverage on reserves after
outspending 2007 operating cash flow (net of proceeds and reserves
deducted from NFX's divestiture of its Gulf of Mexico Shelf
properties and an expected further large outspending of 2008
operating cash flow; the inherent potential for substantial
acquisitions; high levels of capital spending relative to the
production response, and the need to demonstrate sustainable amply
economic production growth of scale generally and, in particular,
in NFX's core Woodford Shale play.
However, the ratings also reflect a sound and strengthening
production trend; strong 2008 organic reserve replacement results
at acceptable reserve replacement costs relative to price
realizations and cash flows; a strong base of onshore U.S.
properties; the particular contribution of rising production from
the Woodford Shale, which is reacting to accelerated more
intensive drilling; sound finding and development costs and total
costs; expected additional diversifying core operating
contributions from NFX holdings offshore Malaysia; and strong
seasoned management.
Furthermore, pro-forma for the note offering, NFX's discretionary
cash flow, full undrawn availability under its $1.25 billion
unsecured revolver, and ample covenant headroom supply ample
liquidity for NFX's visible needs over the next four quarters.
At the pro-forma leverage level, the stable rating outlook could
be negatively impacted by large leveraging acquisitions or
positively impacted by amply equity funded large acquisitions
predominately consisting of developed producing properties. The
outlook could also be impacted by sustained weakening production
trends and uneconomic drilling and development results from NFX's
heavy capital spending program.
Newfield Exploration is headquartered in Houston, Texas. NFX is a
diversified medium sized independent exploration and production
firm with 416.1 mmboe of proven reserves (63% of which is proven
developed).
NUTRITIONAL SOURCING: Supermercados Buys Assets For $29.5 Million
-----------------------------------------------------------------
The Hon. Peter J. Walsh of the United States Bankruptcy Court
for the District of Delaware authorized Nutritional Sourcing
Corporation and its debtor-affiliates to sell their Pueblo's De
Diego assets to Supermercados Maximo Inc., free and clear of all
liens and interests.
At an April 30 auction, Supermercados Maximo made a $29,500,000
bid for the Debtors' assets beating the $29,350,000 "stalking-
horse" bidder from Empresas A. Cordero Badillo Inc. As part of
the transaction, the Debtors will pay undisputed cure amount and
will escrow that amount at closing.
The Debtors agree to pay a $900,000 break-up fee and return all
deposits to Empresas pursuant to the asset purchase agreement
dated Feb. 7, 2008. Empresas made a $1,325,000 deposit, as
reported in the Troubled Company Reporter on March 3, 2008.
Judge Walsh approved the Debtors' proposed bidding procedure for
the sale of their Pueblo's De Diego assets in March 2008.
About Nutritional Sourcing
Based in Pompano, Florida, Nutritional Sourcing Corp., fdba Pueblo
Xtra International, Inc. -- http://www.puebloxtra.com/-- owns and
operates supermarkets and video rental shops in Puerto Rico and
the US Virgin Islands. The company and two affiliates, Pueblo
International, L.L.C., and F.L.B.N., L.L.C., filed for chapter 11
protection on Aug. 3, 2007 (Bankr. D. Del. Case Nos. 07-11038
through 07-11040). Kay Scholer LLC represents the Debtors in
their restructuring efforts. Pepper Hamilton LLP serves as their
Delaware counsel. The U.S. Trustee for Region 3 appointed eight
creditors to serve on an Official Committee of Unsecured
Creditors. Skadden, Arps, Slate, Meagher & Flom LLP represent
the Official Committee of Unsecured Creditors. The company has
disclosed $130.8 million in assets and debt totaling $266.5
million with the Court.
NUTRITIONAL SOURCING: Has Until July 2 to File Chapter 11 Plan
--------------------------------------------------------------
The Hon. Peter J. Walsh of the United States Bankruptcy Court for
the District of Delaware further extended the exclusive periods
for Nutritional Sourcing Corporation and its debtor-affiliates to
file a Chapter 11 plan until July 2, 2008.
Judge Walsh also extended the Debtors' exclusive right to solicit
acceptances of that plan until Oct. 6, 2008.
The Debtors say they will not file a Chapter 11 plan of
liquidation that is not reasonably acceptable to the Official
Committee of Unsecured Creditors. The Debtors also indicate that
they will not file any pleading seeking to modify their exclusive
periods to file a Chapter 11 plan.
About Nutritional Sourcing
Based in Pompano, Florida, Nutritional Sourcing Corp., fdba Pueblo
Xtra International, Inc. -- http://www.puebloxtra.com/-- owns and
operates supermarkets and video rental shops in Puerto Rico and
the US Virgin Islands. The company and two affiliates, Pueblo
International, L.L.C., and F.L.B.N., L.L.C., filed for chapter 11
protection on Aug. 3, 2007 (Bankr. D. Del. Case Nos. 07-11038
through 07-11040). Kay Scholer LLC represents the Debtors in
their restructuring efforts. Pepper Hamilton LLP serves as their
Delaware counsel. The U.S. Trustee for Region 3 appointed eight
creditors to serve on an Official Committee of Unsecured
Creditors. Skadden, Arps, Slate, Meagher & Flom LLP represent
the Official Committee of Unsecured Creditors. The company has
disclosed $130.8 million in assets and debt totaling $266.5
million with the Court.
NVIDIA CORP: Court Rejects Trustee's Claim for $100 Million
-----------------------------------------------------------
NVIDIA Corporation said Friday that the United States Bankruptcy
Court for the Northern District of California issued its
Memorandum Decision After Trial in the 3dfx bankruptcy action.
The Court found in favor of NVIDIA on all issues and rejected the
Trustee's attempts to obtain damages from NVIDIA in excess of
$100 million. The Trustee's lawsuit arose from NVIDIA's 2001
acquisition of certain assets of its former competitor, 3dfx
Interactive, Inc. Specifically, the Trustee claimed that NVIDIA
did not pay fair value for the assets it acquired in the
transaction, thereby allegedly harming 3dfx's creditors.
"A trial was necessary to fully demonstrate that we conducted
ourselves appropriately in the acquisition and we are very
pleased with the Decision from the Court. The Decision is
comprehensive, thorough, well-reasoned, and a complete rejection
of the Trustee's legal and factual arguments," said David
Shannon, NVIDIA's senior vice president and general counsel.
The Court expressly found that "the Trustee's valuation theory
-- every way it is articulated -- is simply not credible," and
concluded that "the creditors of 3dfx were not injured by the
Transaction."
"We will continue to fight this matter through any and all
appeals," said Mr. Shannon.
About NVIDIA
Headquartered in Santa Clara, California, NVIDIA Corp. (Nasdaq:
NVDA) -- http://www.nvidia.com/-- provides visual computing
technologies and invented the GPU, a high-performance processor
which generates breathtaking, interactive graphics on
workstations, personal computers, game consoles, and mobile
devices. NVIDIA serves the entertainment and consumer market
with its GeForce(R) products, the professional design and
visualization market with its Quadro(R) products, and the high-
performance computing market with its Tesla(TM) products.
Outside the U.S., the company has subsidiaries in these
countries; Canada, Cayman Islands, Singapore, Australia, the
United Kingdom, Germany, Hong Kong, Japan, Mauritius, India,
China, British Virgin Islands, Finland and Netherlands.
* * *
The company carries Standard & Poor's Ratings Services BB-
corporate credit rating.
OXFORD INDUSTRIES: Moody's Reviews Ratings for Possible Downgrade
-----------------------------------------------------------------
Moody's Investors Service placed all ratings for Oxford Industries
under review for possible downgrade. LGD assessments are subject
to change.
The review for possible downgrade reflects Moody's concerns
regarding very limited perceived cushion in the company's
financial covenants governed within its bank credit agreement,
which steps down in the next quarter. Moody's review will focus
on the company's ability to address tightening financial
covenants. In addition, Moody's review will assess the company's
ability to stabilize operating performance, after weaker year over
year results during the recent transition period, despite
expectations the retail environment will remain challenging. The
weaker recent performance follows after the $60 million share
buyback undertaken in November 2007, at which time Moody's
commented this action left the company with less cushion in its
rating and formerly stable outlook to withstand deterioration in
performance.
These ratings were placed on review for possible downgrade:
-- Corporate Family Rating and Probability of Default
Rating at Ba3
-- $200 million Senior Unsecured Notes due 2011 at B1
Headquartered in Atlanta, Georgia, Oxford Industries is a producer
and marketer of branded and private label apparel for men, women
and children. Oxford's brands include Tommy Bahama, Ben Sherman
and Indigo Palms. The company reported net sales of approximately
$1.1 billion for the twelve month period ended Feb. 2, 2008.
PACE UNIVERSITY: Moody's Keeps 'Ba1' Ratings on MBIA Insured Bonds
------------------------------------------------------------------
Moody's Investors Service affirmed Pace University's Ba1 debt
rating on its Series 1997, 2000, 2005A, and 2005B bonds. The
affirmation affects $127 million of rated debt issued through the
Dormitory Authority of the State of New York. The bonds are
insured by MBIA.
The rating outlook remains negative reflecting Moody's concerns
about Pace's thin liquidity, enrollment declines exacerbated by
weak student recruitment and retention strategies, poor operating
performance, and higher debt service caused by auction rate market
volatility. The University appears to be bottoming out and has
begun to improve operating performance and show initial signs of
enrollment growth, which could lead to growth in unrestricted
financial resources and a stabilized credit position over the next
few years. Alternatively, Pace's failure to meet near-term
enrollment growth and budgetary goals for FY 2008 and 2009 could
cause further deterioration of liquidity and would likely lead to
a downgrade.
Legal security: Loan payments are a general obligation of the
University secured by debt service reserve funds and a security
interest in Pledged Revenues (including tuition and fees) equal to
maximum annual debt service. The University's obligations to the
Authority under the Loan Agreement are additionally secured by a
mortgage on certain property, which is not initially pledged to
bondholders unless an event of default occurs and the bond insurer
requests that the Authority assign the mortgage to the Trustee.
Debt-related rate derivatives: Pace has entered into an interest
rate swap agreement to swap its Series 2005A bonds to a fixed
rate. Under the swap agreement with Merrill Lynch Capital
Services (with an unconditional guarantee provided by Merrill
Lynch & Co.), Pace pays a fixed rate and receives a percentage of
LIBOR. As of April 21, 2008, the fair value of the swap is close
to negative $2.4 million. The swap is insured by MBIA, and
downgrade of MBIA (currently rated Aaa with a negative outlook)
below A3 would constitute an Additional Termination Event per the
swap schedule. Should MBIA be downgraded, Pace could enter into a
credit support annex and post collateral for the full negative
mark-to-market value of the swap, in order to prevent termination
of the swap. Moody's has factored these credit risks into Moody's
Ba1 long-term rating on Pace.
Strengths
* Change in presidential leadership and senior enrollment
management and stronger senior financial management, with
increased presidential involvement in enrollment management,
development of better controlled financial aid and tuition
strategies, and tighter annual budgeting process;
* Multiple real estate holdings in various high value locations
in the New York City area including Manhattan and nearby
Westchester County.
* Large operating size ($262.8 million of total operating
revenue and close to 10,000 full-time equivalent students),
with diverse array of undergraduate, graduate, and
professional degree offerings including schools of business,
law, and education.
Challenges
* Multi-year enrollment declines (9,844 full-time equivalent
students in fall 2007, compared to 11,030 in fall 2003) due to
weak oversight of enrollment management, poor execution of
tuition-setting and financial aid strategies, and challenges
retaining and graduating students; Pace's complex multi-campus
structure, with campuses in downtown Manhattan as well as
multiple campuses in Westchester, New York, adds student
recruitment and operational challenges and diffuses Pace's
brand identity in the student market;
* Thin balance sheet liquidity and heavy reliance on proceeds of
note issuance for seasonal cash flow needs. Financial
resource base depressed by large and growing post-retirement
liability ($59.4 million in FY 2007). The University had
$39.6 million of adjusted expendable financial resources
(excluding post-retirement liability) at close of FY 2007,
covering debt a thin 0.2 times and operations 0.14 times.
Pace's operating lease commitments also have increased
significantly with the decision to lease close to 500 beds in
a residential facility in downtown Manhattan for
undergraduates over the next 10 years. Management has
instituted more formal budget monitoring and reporting
procedures and devised a 13 week cash forecasting model.
Nevertheless, levels of unrestricted cash throughout the year
for an institution of this size are very thin, with a low
point of approximately $20 million of unrestricted cash
(including proceeds of note issuance, which is managed as an
internal line of credit) during FY 2008.
* Operating deficits in recent years (-4.6% three-year operating
deficit) and 0.6 times debt service coverage in FY 2007
largely due to fall 2006 significant enrollment shortfall.
Management has worked with various enrollment and financial
consultants over the past year, focused heavily on expense
containment, and now projects a smaller operating deficit for
FY 2008, no higher than $6 million (compared to $17.7 million
in FY 2007). Interest rates on the University's R-FLOATS
bonds spiked in early 2008 in line with broader market
volatility, but the interest rates have steadily declined over
the past few weeks (current reset rates are 4.75% on tax-
exempt Series 2005A and 7.75% on taxable Series 2005B).
Moody's is heavily weighing Moody's expectations for positive
cash flow in FY 2008 and further improvement in FY 2009 and
2010 operating performance into Moody's current rating
affirmation.
* Slowed capital spending (64%, cash spent on plant divided by
depreciation expense in FY 2007) and limited debt or
fundraising capacity for investment in facilities. Pace must
also continue to evaluate its multi-campus structure and the
possibility of consolidating or eliminating campuses in the
future.
Outlook
The negative outlook reflects Moody's concern that there remains
moderate risk that the University will not meet its enrollment and
ambitious net tuition revenue growth targets. Failure to achieve
these goals in light of thin liquidity would again highlight the
modest margin for error. Significantly worse than expected FY
2008 operating results or further enrollment declines in fall 2008
could pressure the rating down further over the next year.
Alternatively, the University's ability to more clearly define
Pace's market position, achieve improvement in operations, and
build liquidity, under the leadership of the new president, could
lead to longer-term credit improvement.
What could change the rating - Up
Significant growth of liquid financial resources to better cushion
debt and operations coupled with stronger annual cash flow and
growing enrollment.
What could change the rating - Down
Further enrollment declines and pressure on net tuition per
student; further deterioration of operating cash flow; additional
borrowing without compensating growth of financial resources.
Key Indicators
(FY 2007 financial data and fall 2007 enrollment data)
-- Total Full-Time Equivalent Enrollment: 9,844 FTE
-- Freshmen Selectivity: 80.8%
-- Freshmen Matriculation: 22.0%
-- Adjusted Total Financial Resources (adding back $59 million
post-retirement liability): $108.9 million
-- Total Cash and Investments: $170.1 million
-- Direct Debt: $192.8 million
-- Adjusted Expendable Financial Resources-to-Direct Debt: 0.2
times (excluding post-retirement liability)
-- Adjusted Expendable Financial Resources-to-Operations: 0.1
times (excluding post-retirement liability)
-- Average Operating Margin: -4.6%
-- Operating Cash Flow Margin: 2%
-- Average Debt Service Coverage: 1.0 time
-- Reliance on Student Charges: 87.6%
Rated Debt
-- Series 1997, 2000, 2005A and 2005B bonds: Ba1 underlying
rating, insured by MBIA, MBIA's current financial strength
rating is Aaa with a negative outlook.
-- Series 2000 Insured Lease Revenue Bonds (State Judicial
Institute, included as indirect debt of the University): A1
underlying rating, insured by Ambac (Ambac's current
financial strength rating is Aaa with a negative outlook).
PANAVISION INC: Weakening Liquidity Prompts Moody's Rating Reviews
------------------------------------------------------------------
Moody's Investors Service placed the B3 corporate family rating
and all other ratings for Panavision Inc. on review for possible
downgrade. The action reflects weakening liquidity and
fundamental operating concerns.
Moody's believes continued compliance with bank financial
covenants throughout 2008 could prove difficult for Panavision.
Furthermore, its $35 million revolver provides only relatively
modest external capacity for a seasonal, cash consumptive business
with limited visibility, in Moody's view. These liquidity
constraints compound core business challenges, including the
negative impact of the strike by the Writers' Guild of America,
which could result in a permanent loss of related TV segment
revenue in 2008. A potential future strike by the Screen Actors'
Guild would further reduce volume, and even absent a SAG strike,
an increased focus on production costs by television studios could
lead to diminished use of Panavision equipment. Finally, adoption
of Genesis cameras remains below Panavision's previously lowered
forecasts, and the company has again reduced forecasts for revenue
from this initiative.
In resolving the review, Moody's will evaluate Panavision's
prospective ability to improve operating performance and establish
a greater cushion of compliance under bank financial covenants.
Panavision Inc.
-- Corporate Family Rating, Placed on Review for Possible
Downgrade, currently B3
-- Probability of Default Rating, Placed on Review for Possible
Downgrade, currently B3
-- Senior Secured First Lien Bank Credit Facility, Placed on
Review for Possible Downgrade, currently B2
-- Senior Secured First Lien Bank Credit Facility, Placed on
Review for Possible Downgrade, currently Caa2
-- Outlook, Changed To Rating Under Review From Stable
Panavision's B3 corporate family rating reflects weak liquidity,
high financial risk, some degree of volatility in its core camera
rental business, and uncertain asset coverage. Panavision's
industry leading market share in the feature film and episodic
television markets, strong brand image and reasonably high EBITDA
margins support its ratings. Ratings also benefit from some
evidence of success in identifying and integrating acquisitions
and from recent cost cutting initiatives undertaken in response to
challenging operating conditions.
Headquartered in Woodland Hills, California, Panavision
manufactures and rents camera systems and lighting equipment to
motion picture and television producers worldwide. Its annual
revenue is approximately $300 million.
PITG GAMING: Moody's Ratings Unmoved by Change on Facility's Terms
------------------------------------------------------------------
Moody's Investors Service stated that the revision of certain
terms related to PITG Gaming HoldCo's senior secured credit
facilities will not have an impact on the company's ratings that
were initially assigned on April 29, 2008, and remain subject to
Moody's receipt and review of final documentation.
Despite the fact that Moody's has a favorable view of the
revisions, they do not change the overall risk profile of PITG
enough to warrant a positive rating action. On April 29, 2008,
Moody's assigned a B3 corporate family rating, B3 probability of
default rating, and a stable outlook to PITG. A Ba3 was assigned
to the 1st lien portion of the company's secured credit facilities
while a Caa1 was assigned to the second lien portion. PITG's
ratings and outlook continue to reflect the debt-financed and
start-up nature of the Majestic Star Casino Pittsburgh, the
company's high annual interest burden, and the existing
competition within the proposed casino's primary market area.
As part of the revision of certain of certain terms related to the
senior secured credit facilities, the completion guaranty has been
increased from $25 million to $35 million and is now secured by
the assets and of the Fitzgeralds Casino Hotel in Las Vegas.
Fitzgeralds Las Vegas is owned by Barden Development, Inc. PITG
is a wholly-owned, indirect subsidiary of Barden Development, Inc.
Additionally, upon completion of construction, any unused portion
of the $35 million completion guarantee and the $24.6 million
construction contingency will be deposited into a debt service
reserve account and will be available to service cash interest
expense and mandatory amortization.
Proceeds from PITG proposed debt offering along with proceeds from
an unrated $150 million subordinated loan issued by PITG
Entertainment, LLC (formerly PITG Gaming SuperHoldCo), the parent
company of PITG HoldCo, will be used to fund costs associated with
the development, construction, equipping, and opening of the
Majestic Star Casino Pittsburgh, and to repay existing debt and
fund interest and contingency reserves.
PITG began construction of the Majestic Star Casino Pittsburgh in
December 2007. In December 2006, the Pennsylvania Gaming Control
Board awarded the Pittsburgh gaming license to PITG Gaming, LLC, a
wholly-owned, direct subsidiary of PITG and a guarantor of the its
proposed senior credit facilities. The casino is anticipated to
be completed in the second quarter of 2009. At opening, the
casino will contain 3,000 slot machines, a 3,842 parking garage
and numerous restaurants and bars.
PITG GAMING: S&P Lifts Ratings After Changes on Proposed Structure
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on PITG
Gaming Holdco LLC; the corporate credit rating was raised to 'B'
from 'B-'. The rating outlook is negative.
At the same time, Standard & Poor's raised its ratings on PITG
Holdco's proposed $390 million senior secured first-lien credit
facility to 'B+' from 'B'. The recovery rating of '2', indicating
the expectation for substantial (70% to 90%) recovery in the event
of a payment default, remains unchanged. The bank facility
consists of a $10 million revolving credit and a $380 million term
loan (up $10 million from the previous structure), both due in
2011.
In addition, S&P raised its rating on the company's proposed
$260 million senior secured second-lien term loan (up $10 million
from the previous structure) due 2011 to 'CCC+' from 'CCC'. The
recovery rating on this debt remains unchanged at '6', indicating
the expectation for negligible (0% to 10%) recovery in the event
of a payment default.
"The upgrade reflects meaningful changes to the originally
proposed structure, including an amendment to the completion
guarantee provided by Barden Nevada Gaming LLC, which offers
additional liquidity in the event of a slow ramp-up of the
facility," explained Standard & Poor's credit analyst Ben Bubeck.
The amendment calls for a $35 million completion guarantee and
requires that any unused portion be deposited into a liquidity
reserve account upon completion of construction. S&P expect the
near-term sale of the Fitzgeralds casino in Las Vegas to
facilitate this cash inflow. The previous structure limited BNG's
commitment to a $25 million completion guarantee, which included
a $10 million contribution to the liquidity reserve account that
would have been offset dollar for dollar by any amount remaining
in the interest reserve account upon completion of construction.
S&P's previous rating incorporated our concern that, while
adequate liquidity was provided during the construction phase of
the project, a strong opening was necessary for PITG Holdco to
meet its significant debt service costs. Although the revision to
the terms of the transaction alleviates much of S&P's concern
around a shortfall in year one, its current rating continues to
incorporate the significant fixed-charge coverage burden for the
property, and its expectation that the company will drain most, if
not all, of its liquidity reserves during the first year of
operation.
PLASTECH ENGINEERED: To Close Shreveport Manufacturing Plant
------------------------------------------------------------
Plastech Engineered Products, Inc. is closing its Shreveport,
Louisiana, plant in June, KSLA News reports.
According to the report, Plastech told employees it will be
permanently closing the manufacturing facility located at 9360
Interport Drive, in Shreveport "due to an economic downturn in
our business."
Plastech expects the layoff will occur on June 30, 2008 or within
14 days thereafter.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry. Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is certified
as a Minority Business Enterprise by the state of Michigan.
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States. The company's products are
sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The Debtors
chose Jones Day as their special corporate and litigation counsel.
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services. The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
PLASTECH ENGINEERED: Can Return Tooling to Delphi Automotive
------------------------------------------------------------
Plastech Engineered Products Inc. and its debtor-affiliates
obtained permission from the U.S. Bankruptcy Court for the Eastern
District of Michigan to return certain tooling equipment to Delphi
Automotive Systems LLC.
As reported in the Troubled Company Reporter on Apr 21, 2008, the
Debtors sought authority specifically to:
(a) surrender certain tooling owned by Delphi Automotive
Systems, LLC, that is in the Debtors' possession;
(b) sell to Delphi certain de minimis finished goods inventory
made with the Delphi tooling for $4,671, free and clear of
liens; and
(c) lift the automatic stay to effectuate the release of
tooling and the sale of the de minimis inventory to
Delphi.
The Debtors currently are in possession of certain tooling which
is fully paid for and is owned by Delphi at a plant in Croswell,
Michigan that was used to make service parts for Delphi's
Powertrain Division that are no longer in production.
The Debtors informed that the Inventory represents idle assets
that are of little or no use or value to the Debtors' estates or
restructuring efforts, as the Inventory consists of service parts
that are no longer in production. The Debtors have determined in
their sound business judgment that the sale of the Inventory to
Delphi is the most efficient way to convert idle assets of de
minimis value into cash.
The Debtors believe that the sale of the inventory to Delphi is
commercially reasonable in light of the assets being sold and as
a result, the value of the proceeds from the sale fairly reflects
the value of the Inventory sold. The Debtors proposed that any
party with a lien on the Inventory be given a corresponding
security interest in the proceeds of the sale. In light of these,
the requirements of Section 363(f) of the Bankruptcy Code would be
satisfied for any proposed sales free and clear of liens, the
Debtors said.
Moreover, because the Debtors have no further need for the Delphi
Tooling, the Debtors believe that the automatic stay should be
lifted pursuant to Section 362(d) of the Bankruptcy Code to allow
Delphi to take possession of the Delphi Tooling and to deem the
applicable purchase orders between Delphi and the Debtors
terminated upon the return of the Delphi Tooling and payment for
the Inventory.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) --
http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology. The company's
technology and products are present in more than 75 million
vehicles on the road worldwide. Delphi has regional headquarters
in Japan, Brazil and France.
The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed $11,446,000,000
in total assets and $23,851,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007. The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry. Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is certified
as a Minority Business Enterprise by the state of Michigan.
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States. The company's products are
sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The Debtors
chose Jones Day as their special corporate and litigation counsel.
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services. The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
POLYPORE INT'L: Moody's Lifts Ratings to 'B2' on Reduced Leverage
-----------------------------------------------------------------
Moody's Investors Service raised the ratings of Polypore
International, Inc., Corporate of Family to B2 from B3 and
Probability of Default to B2 from B3. Moody's also raised the
ratings of Polypore's bank credit facility to Ba2 from Ba3, and
senior subordinated notes to B3 from Caa1. The outlook is changed
to stable.
The upgrade reflects Polypore's overall improvement in credit
metrics stemming from a reduction in leverage, steady free cash
flow generation, improved interest coverage, and strong operating
margins. Polypore's de-leveraging activities and actions to shift
production to low cost countries, close plants, and restructure
away from its cellulosic membrane business have all contributed to
the improvement of credit metrics. The ratings also reflect the
expectation that the hemodialysis and lead-acid battery after-
markets will continue to support the company's track record of
generating positive free cash, and its recent turnaround.
Polypore announced in March 2008 the acquisition of 100% of the
stock of Microporous Holding Corporation from Industrial Growth
Partners II L.P. and other stockholders, through its subsidiaries,
Daramic LLC and Daramic Acquisition Corporation, for total
consideration of approximately $76 million. The acquisition was
funded with a combination of cash, assumption of debt and
borrowings under Polypore's existing credit facility.
Polypore said the acquisition of Microporous adds rubber-based
battery separator technology to the Daramic product line. The
acquisition broadens Polypore's participation in the deep-cycle
industrial battery market, adds to the membrane technology
portfolio and product breadth, enhances service to common
customers and adds cost-effective production capacity.
Polypore said, as a result of its acquisition of Microporous, it
has increased its financial guidance for fiscal 2008. For the
year ending Jan. 3, 2009, Polypore now expects to achieve net
sales of $580 million to $605 million, adjusted EBITDA of $170
million to $178 million and earnings. These estimates are based
on an assumed full-year weighted average fully diluted share count
of 40.7 million shares. Additionally, the company estimates total
capital expenditures of approximately $52 million in 2008.
According to Moody's, the acquisition was funded with a
combination of $45 million of cash, $17 million of revolver
borrowings, and $14 million of assumed debt.
Moody's sees that additional debt from this transaction as nominal
and expects these amounts to paid down over the near term. The
acquisition is expected to be accretive to Polypore's earnings
prior to any synergies.
The stable rating outlook reflects the expectation that the
company's solid growth trends and operating performance will
continue, bolstered by solid end-market growth prospects, its
recurring revenue base and strong geographical diversification,
tempered to some extent by a sluggish North American economy. In
addition, the outlook reflects the company's adequate liquidity
profile, including nominal debt maturities over the near term.
These ratings are raised:
Polypore International, Inc.
-- Corporate Family Rating, to B2 from B3;
-- Probability of Default, to B2 from B3;
-- $90 million guaranteed senior secured revolving credit
facility due 2013; to Ba2 (LGD2, 19%) from Ba3 (LGD2, 19%);
-- $370 million guaranteed senior secured term loan due November
2014; to Ba2 (LGD2, 19%) from Ba3 (LGD2, 19%);
-- $[_______] guaranteed senior subordinated notes due May 2012,
to B3 (LGD5, 76%) from Caa1 (LGD5, 78%);
-- Euro guaranteed senior subordinated notes due May 2012, to B3
(LGD5, 76%) from Caa1 (LGD5, 78%);
The last rating action was on May 9, 2007 when the bank credit
facility ratings were assigned and the outlook changed to
Positive.
Using Moody's standard adjustments for the last twelve months
ended March 29, 2008, Polypore's consolidated total debt EBITDA
leverage approximated 5.5x, EBIT interest was approximately 1.4x.
Pro forma for the exclusion of interest accreted on the discount
notes, EBIT interest coverage was approximately 1.5x. Polypore
maintained a $90 million revolving credit facility under which
there were approximately $17 million of borrowings at March 29,
2008. The company also maintained $23 million of cash on hand.
Polypore International Inc., headquartered in Charlotte, North
Carolina, is a leading worldwide developer, manufacturer and
marketer of specialized polymer-based membranes used in separation
and filtration processes. The company is managed under two
business segments. The energy storage segment, which currently
represents approximately two-thirds of total revenues, produces
separators for lead-acid and lithium batteries. These products
have applications in transportation, electronics, and general
industrial applications. The separations media segment, which
currently represents approximately one-third of total revenues,
produces membranes used in various healthcare and industrial
applications. For the twelve months ending March 31, 2008,
Polypore's net sales approximated $553 million.
PRC LLC: Files Amended Chapter 11 Plan and Disclosure Statement
---------------------------------------------------------------
PRC LLC and its debtor-affiliates amended their Chapter 11 Plan of
reorganization and accompanying disclosure statement.
Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in Houston,
Texas, informs the Honorable Martin Glenn of the U.S. Bankruptcy
Court for the Southern District of New York that after the Debtors
filed their Disclosure Statement on April 10, 2008, the Official
Committee of Unsecured Creditors raised various concerns related
to the proposed treatment of general unsecured claims under the
proposed Plan of Reorganization.
Rather than waiting for those concerns to be raised through
objections to the Court -- and in an effort to avoid a protracted
and costly confirmation process -- the Debtors, their DIP Lenders,
their Prepetition Lenders, and the Creditors Committee engaged in
extensive, arm's-length negotiations to resolve the Creditors
Committee's concerns, Mr. Perez relates. The negotiations, he
states, have resulted in certain revisions to the Debtors'
proposed Plan that, in the parties' judgment, will allow the
Debtors to successfully and expeditiously emerge from Chapter 11.
"The Creditors' Committee now supports the Plan," Mr. Perez tells
the Court. In furtherance of that support, should the Court
approve the Revised Disclosure Statement to reflect the parties'
Agreement, the Creditors Committee will provide an appropriate
letter of support to be included in the Solicitation Package
delivered to creditors entitled to vote on the Plan, he adds.
The salient terms of the parties' Agreement incorporated in the
Revised Disclosure Statement are:
* The Plan eliminates the prior distinction between Class 6A
General Unsecured Claims and Class 6B Convenience Claims.
Consequently, all General Unsecured Claims are now classified
in Class 6 of the Plan.
* The cash available for distribution to holders of Allowed
General Unsecured Claims is increased from $430,000 to
$1,350,000.
* The Debtors will waive all causes of action under Section 547
of the Bankruptcy Code against the Debtors' Trade Creditors
-- holders of General Unsecured Claim who had provided goods
or services to the Debtors in the ordinary course of
business. Trade Creditors do not include IAC/Interactive
Corp. and the Debtors' former employees and officers.
* The Debtors and the Creditors Committee will cooperate in the
prosecution of objections to Material General Unsecured
Claims, which are General Unsecured Claims that, if reduced
or disallowed pursuant to Rule 3007 of the Federal Rules of
Bankruptcy Procedure, would reduce the aggregate amount of
Allowed General Unsecured Claims by at least $200,000.
* To facilitate cooperation between the Debtors and the
Creditors Committee during the claims administration process,
the Creditors Committee and their professionals will continue
to perform their duties with respect to claim objections for
a period after the Effective Date of the Plan, until any
objections to Material General Unsecured Claims are resolved.
* The Creditors Committee will have standing (i) to appear and
be heard in connection with the administration of General
Unsecured Claims and any pending objections to those Claims,
(ii) to file objections to any Material General Unsecured
Claim as to which, despite the Committee's urging, the
Reorganized Debtors elect not to object to, and (iii) to
oppose any proposed settlement or compromise of a Material
General Unsecured Claim that is advocated by the Reorganized
Debtors.
* The Creditors Committee agrees that from and after May 1,
2008, all fees and expenses incurred by the Creditors
Committee and their professionals that are chargeable to the
Debtors' estates will be capped at $75,000 per month for a
period of two months, and will be capped at $50,000 for all
time thereafter. The sum of these amounts will be a
cumulative amount which, if exceeded during one period, will
go against the total cap and, similarly, any amount which is
not used during a given period will be carried forward,
subject to a total cap of $200,000.
Accordingly, the Debtors ask the Court to approve their Revised
Disclosure Statement.
A full-text copy of the black-lined version of the PRC Disclosure
Statement dated May 2 is available for free at:
http://researcharchives.com/t/s?2b81
A full-text copy of the black-lined version of the PRC Plan of
Reorganization dated May 2 is available for free at:
http://researcharchives.com/t/s?2b82
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC --
http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-focused,
Fortune 500 U.S. corporations and delivers these services through
a global network of call centers in the U.S., Philippines, India,
and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of Access
Direct Telemarketing, Inc., each of which is a debtor and debtor-
in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring and
turnaround advisor. Additionally, Evercore Group LLC provides
investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of Dec. 31, 2007
showed total assets of $354,000,000 and total debts of
$261,000,000.
The Debtors submitted to the Court a Chapter 11 Plan of
Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue
No. 11; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
PRC LLC: Discloses Various Analysis Under Chapter 11 Plan
---------------------------------------------------------
PRC LLC and its debtor-affiliates presented to the U.S. Bankruptcy
Court for the Southern District of New York financial projections,
and valuation and liquidation analyses in support of their Chapter
11 plan of reorganization.
The Debtors believe that their proposed Plan of Reorganization
meets the U.S. Bankruptcy Code's feasibility requirement, and that
Plan confirmation is not likely to be followed by liquidation, or
the need for further financial reorganization of the Debtors.
In connection with the development of the Plan, and for the
purposes of determining whether the Plan satisfies the feasibility
standard, the Debtors analyzed their ability to satisfy financial
obligations while maintaining sufficient liquidity and capital
resources, Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP,
in Houston, Texas, tells the Court. In this regard, the Debtors,
in consultation with their professionals, have prepared projected
consolidated income statements and projected consolidated
statements of cash flows of the operating Debtors for the six
months ending Dec. 31, 2008 -- the Stub Period -- and for the
years ending Dec. 31, 2009 and 2010, and the projected
consolidated balance sheets of Debtor PRC LLC as at Dec. 31, 2008,
2009 and 2010.
According to Mr. Perez, the Projections assume that (i) the Plan
will be confirmed and consummated in accordance with its terms,
(ii) there will be no material change in legislation or
regulations, or the administration thereof, that will have an
unexpected effect on the operations of the Reorganized Debtors,
(iii) there will be no change in generally accepted accounting
principles in the United States that will have a material effect
on the reported financial results of the Reorganized Debtors,
(iv) the application of Fresh Start Reporting will not materially
change the Debtors' revenue accounting procedures, and (v) there
will be no material contingent or unliquidated litigation or
indemnity Claims applicable to the Reorganized Debtors.
Nevertheless, Mr. Perez notes, the Projects are only an estimate
and therefore, necessarily speculative in nature.
A full-text copy of the Debtors' Financial Projections is
available for free at:
http://researcharchives.com/t/s?2b84
Valuation Analysis
The Debtors have been advised by Evercore Group LLC, their
investment banker, with respect to the consolidated enterprise
value of the Reorganized Debtors on a going-concern basis.
Evercore undertook an valuation analysis for the purpose of
determining value available for distribution to holders of Allowed
Claims pursuant to the Plan, and to analyze the relative
recoveries to those holders. The estimated total value available
for distribution to holders of Allowed Claims is comprised of an
estimated value of the Reorganized Debtors' operations on a going
concern basis -- the "Enterprise Value."
Based in part on information provided by the Debtors, Evercore has
concluded solely for purposes of the Plan that the Enterprise
Value of the Reorganized Debtors ranges from approximately $74 to
$109 million, Mr. Perez reports.
Evercore's estimated Enterprise Value implies a value for the
equity interests in the Reorganized Debtors of approximately
$0 to $10 million. These values do not assume any value for
potential net operating losses that may be available upon the
Effective Date.
The assumed Enterprise Value range reflects work performed by
Evercore on the basis of information available to it as of
April 7, 2008.
Liquidation Analysis
The Debtors believe that through their proposed Plan of
Reorganization, holders of Allowed Claims will receive a greater
recovery from their estates than they would in a liquidation under
Chapter 7 of the Bankruptcy Code, Alfredo R. Perez, Esq., at Weil,
Gotshal & Manges LLP, in Houston, Texas, tells the Court.
Consequently, the Debtors prepared a liquidation analysis that
reflects the estimated cash proceeds, net of liquidation-related
costs that would be realized if each Debtor were liquidated in
accordance with Chapter 7. The Liquidation Analysis is based on a
number of estimates and assumptions that, although considered
reasonable, are inherently subject to significant business,
economic and competitive uncertainties and contingencies beyond
the Debtors' control, and which could be subject to material
change.
The Liquidation Analysis assumes that the Debtors would commence a
Chapter 7 liquidation on June 30, 2008.
PRC LLC, et al.
Liquidation Recovery Analysis
(in thousands)
Book Est. Recovery Est. Liquidation
Value Low High Low High
------- ------------- -----------------
Asset Liquidation
Cash & cash
equivalents 1,000 100.0% 100.0% $1,000 $1,000
Net Accounts
Receivable 51,359 40.3% 62.6% 20,706 32,171
FF&E 41,679 5.9% 11.1% 2,452 4,641
Other Assets 6,091 14.5% 29.0% 884 1,767
------- ------- ------ -------- -------
Proceeds from
Asset Liquidation $100,129 25.0% 39.5% $25,042 $39,579
Proceeds from
Preference
Claims 45,964 5.0% 10.0% 2,298 4,596
-------- -------
Total Proceeds $27,340 $44,176
-------- -------
Costs Associated
with Liquidation:
Payroll/overhead costs 1,506 1,255
Site Clean-Up/Security Cost 1,694 1,694
Professional Fees 1,750 1,750
Chapter 7 Trustee Fees 870 1,375
-------- -------
Total Wind down Costs $5,820 $6,074
-------- -------
Cash Available for Distribution $21,520 $38,101
-------- -------
A full-text copy of the Debtors' Liquidation Analysis is available
for free at http://researcharchives.com/t/s?2b83
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC --
http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-focused,
Fortune 500 U.S. corporations and delivers these services through
a global network of call centers in the U.S., Philippines, India,
and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of Access
Direct Telemarketing, Inc., each of which is a debtor and debtor-
in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring and
turnaround advisor. Additionally, Evercore Group LLC provides
investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of Dec. 31, 2007
showed total assets of $354,000,000 and total debts of
$261,000,000.
The Debtors submitted to the Court a Chapter 11 Plan of
Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue
No. 11; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
PRC LLC: Verizon and Affiliates Balk at Disclosure Statement
------------------------------------------------------------
Verizon Communications Inc. and its affiliates object to PRC LLC
and its debtor-affiliates' amended Chapter 11 plan of
reorganization.
The Verizon and its affiliates inform the U.S. Bankruptcy Court
for the Southern District of New York that they have provided
extensive telecommunications services and facilities to the
Debtors before and after the date of
bankruptcy.
On Sept. 30, 2003, InterActiveCorp, the former parent of Debtor
PRC LLC, entered into a Global Services Agreement with Verizon.
In January 2007, PRC entered into a Communications Services
Authorized User Participation Agreement, pursuant to which PRC was
authorized to purchase goods and services from Verizon pursuant to
the GSA.
Verizon says it also has been a major customer of the Debtors. In
May 2005 and March 2006, Verizon and PRC entered into Agreements
for Technical Services, for PRC to provide technical support to
Verizon. In September 2006, PRC and Verizon entered into a Master
Agreement for Call Center Customer Services for other technical
support services to be provided to Verizon.
As a result of these agreements, Verizon is a very large creditor
in the Debtors' cases, with an aggregate prepetition claim for
more than $19.5 million, Darryl S. Laddin, Esq., at Arnall Golden
Gregory LLP, in Atlanta, Georgia, asserts. Verizon is also a
member of the Official Committee of Unsecured Creditors of the
Debtors.
Verizon tells the Court that it objects to the Disclosure
Statement filed by the Debtors for these reasons:
(1) The Debtors seek to reserve, through the date of the
confirmation hearing, the right to amend the schedule of
executory contracts to be assumed pursuant to Section 365
of the Bankruptcy Code.
(2) The Debtors propose to delay the payment of sums necessary
to cure defaults under assumed executory contracts until
as far as 30 days after the effective date of the
confirmation order.
(3) In the event that the cure amount due under an assumed
executory contract is disputed, the Debtors seek to
reserve the right, even well after confirmation, to remove
that contract from the schedule of contracts originally
designated for assumption, and instead reject the
contract.
The Debtors' reservation (i) to amend the Contract Assumption
Schedule and (ii) to remove a contract from that Schedule a few
days before or after the plan confirmation fails to provide
"adequate information" to creditors prior to the voting deadline,
or even prior to confirmation, concerning the executory contracts
that the Debtors do and do not propose to assume, Mr. Laddin
contends. It is also impermissible under Section 365 of
the Bankruptcy Code, which requires executory contracts to be
either assumed or rejected by no later than confirmation of a
plan, he adds.
Even if disputes as to required cure amounts are heard and finally
adjudicated after confirmation, the Debtors are required, as a
matter of law, to make their elections as to assumption or
rejection of executory contracts before confirmation, and
thereafter to be irrevocably bound by those elections regardless
of how a dispute over cure amounts is ultimately determined, Mr.
Laddin notes.
Verizon objects to the procedures that the Debtors have proposed
for tabulation of votes for and against their Plan of
Reorganization. Verizon complains that the Debtors seek the right
to object to a creditor's claim as late as only 10 days prior to
the voting deadline, and on that objection, have the creditor's
claim be deemed temporarily disallowed for voting purposes "except
as ordered by the Court before the Voting Deadline."
"In so doing, the Debtors effectively seek the right to
disenfranchise creditors of their voting rights merely upon the
filing of a claim objection, as late as only ten days before the
voting deadline, and place the onus on such creditors to seek what
would amount to emergency relief from the Court in an effort to
have their voting rights restored in time to be counted for or
against the Debtors' plan," Mr. Laddin says.
Mr. Laddin argues that the proposal is unsupported by the
Bankruptcy Code, vests the Debtors with far too much power to
manipulate the voting process and places far too onerous and
unreasonable a burden on creditors who wish simply to exercise the
voting rights afforded to them under the Code.
The Disclosure Statement Approval Motion should be denied, Verizon
contends, unless the procedures for vote tabulations are amended
to provide that claims subject to an unresolved objection by the
Debtors will be deemed temporarily allowed for voting purposes, at
the face amount of the claim, unless the Debtors obtain an order
to the contrary from the Court in advance of the voting deadline.
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC --
http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-focused,
Fortune 500 U.S. corporations and delivers these services through
a global network of call centers in the U.S., Philippines, India,
and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of Access
Direct Telemarketing, Inc., each of which is a debtor and debtor-
in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring and
turnaround advisor. Additionally, Evercore Group LLC provides
investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of Dec. 31, 2007
showed total assets of $354,000,000 and total debts of
$261,000,000.
The Debtors submitted to the Court a Chapter 11 Plan of
Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue
No. 11; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
PREMAIR INC: Section 341(a) Meeting Slated for Friday
-----------------------------------------------------
The U.S. Trustee for Region 10 will convene a meeting of creditors
in the bankruptcy case of Premair Inc. at 3:00 p.m., on May 9,
2008, at Room 416C, U.S. Courthouse, 46 East Ohio Street in
Indianapolis, Indiana.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in the Debtor's case. The Section
341(a) Meeting has been scheduled within the time required by
Rule 2003 of the Federal Rules of Bankruptcy Procedure.
All creditors are invited, but not required, to attend. The
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible officer of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Indianapolis-based Premair, Inc. -- http://www.premair.com/--
trains pilots. The company filed for bankruptcy protection on
March 24, 2008 (Bankr. S.D. Ind. Case No. 08-03045). Judge Frank
J. Otte presides the case. William J. Tucker, Esq. represents the
Debtor in its restructuring efforts. When the Debtor filed for
bankruptcy, it listed assets and debts between $10 million and
$50 million.
PREMAIR INC: Wants to Hire William Tucker as General Counsel
------------------------------------------------------------
Premair Inc. asked the U.S. Bankruptcy Court for the Southern
District of Indiana for permission to employ William J. Tucker &
Associates LLC as its general counsel.
The law firm will render legal services regarding the performance
of the Debtor's duties in the chapter 11 case.
The Debtor will pay the firm's professionals and paraprofessionals
based on these rates:
Name Designation Hourly Rate
---- ----------- -----------
William J. Tucker, Esq. Partner $400
Steven K. Dick, Esq. Partner $300
Jeffrey M. Hester, Esq. Partner $300
Niccole Sadowski, Esq. Attorney $275
Lara B. O'Dell, Esq. Attorney $250
Kathy Shamblin Legal Assistant $120
Tracy Wilkerson Legal Assistant $110
Pam McGinnis Legal Assistant $100
Beth Adams Legal Assistant $100
William Tucker has served the Debtor prior to the bankruptcy
filing and has received a $26,039 retainer from the Debtor.
The Debtor maintained that the law firm is a "disinterested
person" as that term is defined under Sec. 101(14) of the
Bankruptcy Code, and has no adverse interest in the case. The
Debtor also noted that the firm has not represented any creditor
in the case.
The firm can be reached at:
William J. Tucker & Associates, LLC
Pennsylvania Center, Suite 100
429 N. Pennsylvania Street
Indianapolis, IN 46204-1816
Tel: (317) 833-3030
Fax: (317) 833-3031
http://www.wjtucker.com
Indianapolis-based Premair, Inc. -- http://www.premair.com/--
trains pilots. The company filed for bankruptcy protection on
March 24, 2008 (Bankr. S.D. Ind. Case No. 08-03045). Judge Frank
J. Otte presides the case. William J. Tucker, Esq. represents the
Debtor in its restructuring efforts. When the Debtor filed for
bankruptcy, it listed assets and debts between $10 million and
$50 million.
R&G FINANCIAL: Fitch Drops Ratings to 'CC' & Ceases Coverage
------------------------------------------------------------
Fitch Ratings downgraded the long-term Issuer Default Rating of
R&G Financial Corporation to 'CC' from 'CCC' and simultaneously
withdraws all ratings of R&G Financial and its subsidiaries.
Fitch will no longer provide ratings on R&G.
In September 2007, Fitch downgraded the long-term IDR of R&G
Financial to 'CCC' from 'BB-' and placed R&G Financial on Rating
Watch Negative. Since that time, audited financial statements
still have not been released and financial performance has
continued to deteriorate (based on regulatory filings). R&G
Financial has recently announced the suspension of dividends on
preferred stock and the deferral of payments on trust preferred
securities. R&G continues to explore strategic alternatives.
Fitch downgrades and withdraws these ratings:
R&G Financial Corporation
-- Long-term IDR to 'CC' from 'CCC';
-- Individual to 'E' from 'D/E';
-- Preferred Stock to 'C/RR6' from 'CC/RR5'.
R-G Premier Bank
-- Long-term IDR to 'B-' from 'B';
-- Long-term Deposits to 'B/RR3' from 'B+/RR3'.
R&G Mortgage
-- Long-term IDR to 'CC' from 'CCC'.
Fitch affirmed and withdrawn these ratings:
R&G Financial Corporation
-- Support '5';
-- Support Floor 'NF'.
R-G Premier Bank
-- Short-term IDR 'B' (removed from Rating Watch Negative);
-- Short-term deposits 'B' (removed from Rating Watch Negative);
-- Individual 'D/E' (removed from Rating Watch Negative);
-- Support '5';
-- Support Floor 'NF'.
REEDEN CAPITAL: Case Summary & 19 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Reeden Capital Group, Inc.
fka Related Capital Group, Inc.
17W240 22nd St.
Oakbrook Terrace, IL 60181
Bankruptcy Case No.: 08-10657
Type of Business: The Debtor provides net leased investments,
construction assistance, property management,
and financing solutions. See
http://www.reeden.com/
Chapter 11 Petition Date: April 29, 2008
Court: Northern District of Illinois (Chicago)
Judge: Jack B. Schmetterer
Debtor's Counsel: Forrest L. Ingram, Esq.
Email: fingram@fingramlaw.com
79 W. Monroe St. Ste. 900
Chicago, IL 60603
Tel: (312) 759-2838
Fax: (312) 759-0298
Estimated Assets: $1 million to $10 million
Estimated Debts: $100,000 to $500,000
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Class A Properties 5 $60,000
7030-7032 W. Huntley Rd.
Carpentersville, IL 60110
Class A Properties 7 Rent $54,585
17W240 22nd St.
Oakbrook Terrace, IL 60181
Univision Radio (3) Advertising $53,347
625 N. Michigan Ave., 3rd Flr.
Chicago, IL 60611
WSNS-Telemundo Advertising $30,000
KCG-Group $25,770
TVC Broadcasting of Chicago Advertising $25,123
WLEY-La Ley Advertising $16,620
PSD Solutions $14,131
AT&T (4) Phones $9,099
ComEd Utilities $8,698
Plains Capital Leasing $7,622
OCE Financial Services, Inc. Office Equipment $5,536
(OFSI)
Fine Line Group $5,125
Rosario Barreto $5,000
Cook County Treasurer Schaumburg Tax $4,000
MB Financial $3,716
MCI Small Business Service (3) $3,619
Land Rover Capital Auto $1,845
Aramark $1,185
RESIDENTIAL CAPITAL: Unable to Pay Debts Due June 2008
------------------------------------------------------
Residential Capital LLC disclosed that it is highly leveraged
relative to its cash flow, and its liquidity position has been
declining. According to a Securities and Exchange Commission
filing, there is a significant risk that the company will not be
able to meet its debt service obligations, be unable to meet
certain financial covenants in its credit facilities, and be in a
negative liquidity position in June 2008.
As of Feb. 29, 2008, ResCap's liquidity portfolio (cash readily
available to cover operating demands from across its business
operations and maturing obligations) totaled $1.8 billion. In
addition, the company has expended a significant amount of its
available cash in recent weeks. ResCap had approximately
$4.4 billion of unsecured long-term debt maturing during the
remainder of 2008, consisting of approximately $1.2 billion
aggregate principal amount of notes due in June 2008,
approximately $1.8 billion of outstanding borrowings under its
term loan due in July 2008, and approximately $1.1 billion
aggregate principal amount of notes due in November 2008.
In addition, the company had approximately $15.6 billion of
secured, short-term debt outstanding as of Dec. 31, 2007, with
various maturity dates in 2008, excluding debt of GMAC Bank. In
an effort to improve its short-term liquidity and its capital
structure and generally reduce its financial risk, ResCap has
undertaken these:
a) ResCap is conducting debt tender and exchange offers, as
reported in yesterday's Troubled Company Reporter, for its
outstanding unsecured notes to improve its financial
flexibility by extending the maturities of such indebtedness
and reducing the company's overall indebtedness. ResCap is
offering eligible holders of ResCap notes that mature in 2008
and 2009, as well as holders of ResCap notes that mature in
2010 through 2015, the ability to exchange such notes for one
of two newly-issued series of notes of ResCap. Holders of
ResCap's floating rate notes maturing on June 9, 2008, have the
ability to tender such notes for cash. In addition, eligible
holders participating in the exchange offers may elect to
receive cash in lieu of new notes that they would otherwise
receive pursuant to a "Modified Dutch Auction" process. Newly
issued notes would be secured by a second or third priority
lien on the assets that would secure the proposed senior
secured credit facility with GMAC.
b) ResCap is in negotiations with its parent, GMAC LLC, to provide
ResCap with a new $3.5 billion senior secured credit facility,
which would be used to fund the cash required for the offers,
to repay the term loan maturing in July 2008, and to replace
its $875.0 million 364-day revolving bank credit facility and
its $875.0 million 3-year revolving bank credit facility. Such
facility would be secured by a first priority lien in
substantially all of its existing and after-acquired
unencumbered assets remaining available to be pledged as
collateral.
c) ResCap is seeking amendments to substantially all of its
secured bilateral facilities that would extend the maturities
of such facilities from various dates in 2008 to May 2009 and
eliminate or modify the tangible net worth covenant contained
in such facilities. Although some of its secured facilities
have been extended during 2008, the extensions have generally
been for periods shorter than such facilities' previous terms.
Between March 1, 2008 and Dec. 31, 2008, the company has
$30.2 billion, or 96.8%, of its secured committed capacity
maturing.
d) ResCap is in negotiations with GMAC for them to contribute to
ResCap by May 31, 2008, approximately $350.0 million principal
amount of its outstanding notes held by GMAC in exchange for
additional ResCap preferred units, which are exchangeable at
GMAC's option at any time after Jan. 1, 2009, subject to
certain conditions, into preferred units of IB Finance
Holdings, LLC, the owner of GMAC Bank.
e) ResCap is seeking approximately $150.0 million in additional
borrowings under one of its existing secured facilities with
GMAC, the availability of which is subject to certain
conditions.
Even if ResCap is successful in implementing all of the actions,
it will be required, in order to satisfy its liquidity needs and
comply with anticipated covenants to be included in its new debt
agreements requiring maintenance of minimum cash balances, to
consummate in the near term certain asset sales or other capital
generating actions over and above its normal mortgage finance
activities to provide additional cash of $600 million by June 30,
2008.
Asset liquidation initiatives may include, among other things,
sale of retained interest in ResCap's mortgage securitizations,
marketing of loans secured by time share receivables, marketing of
its U.K. and Continental Europe mortgage loan portfolios, whole
loan sales and marketing of businesses and platforms that are
unrelated to its core mortgage finance business. Moreover, the
amount of liquidity ResCap needs may be greater than currently
anticipated as a result of additional factors and events (such as
interest rate fluctuations and margin calls) that increase its
cash needs causing the company to be unable to independently
satisfy its near-term liquidity requirements.
Liquidity and Capital Resources
Domestic and international mortgage and capital markets have
continued to experience significant dislocation. As a result, the
company's liquidity was negatively impacted due to reduced
committed lending levels and lower effective advance rates of its
secured committed sources of liquidity. In addition, the company
has incurred significant losses in the first quarter of 2008, and
many of its secured committed facilities experienced shorter dated
extensions than in the past.
On Feb. 21, 2008, ResCap's subsidiary, Residential Funding
Company, LLC, entered into a secured credit agreement with GMAC,
as a lender and as agent, to provide RFC with a revolving credit
facility with a principal amount of up to $750.0 million. To
secure the obligations of RFC under the credit agreement, RFC has
pledged as collateral under a pledge agreement, among other
things, its membership interest in RFC Resort Funding, LLC, a
wholly owned special purpose subsidiary of RFC, certain loans made
by RFC to resort developers secured by time-share loans or
agreements to purchase timeshares and certain loans made by RFC to
resort developers to fund construction of resorts and resort-
related facilities and all collections with respect to the pledged
loans. This funding is supplemental to existing third party
financing for the Resort Finance business. On Feb. 21, 2008, RFC
borrowed $635.0 million under the credit agreement maturing on
Aug. 21, 2009, and subsequently drew an additional $20.0 million
in March 2008.
As previously reported in the TCR, ResCap's parent, GMAC LLC,
contributed notes of ResCap that GMAC had previously purchased in
open market purchase transactions with a face amount of
approximately $1.2 billion and a fair value of approximately
$607.2 million to ResCap in exchange for 607,192 ResCap preferred
units with a liquidation preference of $1,000 per unit. The
ResCap preferred units are exchangeable at GMAC's option on a
unit-for-unit basis into preferred membership interests in IB
Finance at any time after Jan. 1, 2009, so long as neither ResCap
nor any of its significant subsidiaries was the subject of any
bankruptcy proceeding on or before that date.
As reported in the Troubled Company Reporter on April 25, 2008,
Residential Funding Company and GMAC Mortgage LLC, both
subsidiaries of Residential Capital, LLC, borrowed $468 million
collectively under a Loan and Security Agreement with ResCap's
parent, GMAC LLC, as lender, to provide ResCap's subsidiaries with
a revolving credit facility with a principal amount of up to
$750 million, providing incremental liquidity for ResCap's
operations until longer-term financing is arranged.
ResCap and GMAC are investigating various strategic alternatives
related to all aspects of ResCap's business, including extensions
and replacements of existing secured borrowing facilities, and
establishing additional sources of secured funding for ResCap's
operations. One potential source of new secured funding is credit
secured by certain of ResCap's mortgage servicing rights.
About Residential Capital
Headquartered in Minneapolis, Minnesota, Residential Capital LLC
-- http://www.rescapholdings.com/-- is the home mortgage unit of
GMAC Financial Services, which is in turn wholly owned by GMAC
LLC.
* * *
As reported in yesterday's Troubled Company Reporter, Moody's
Investors Service downgraded to Ca, from Caa1, its ratings
on the senior debt of Residential Capital, LLC subject to the bond
exchange announced by ResCap on May 2, 2008. The rating of
ResCap's approximately $1.2 billion of bonds maturing on June 9,
2008 was affirmed at Caa1. All ratings remain under review for
downgrade.
Standard & Poor's Ratings Services lowered selected ratings on
Residential Capital LLC, including lowering the long-term
corporate credit rating to 'CC' from 'CCC+', following the
company's launch of an exchange offer for unsecured bonds that
S&P interpret as a distressed debt exchange. The ratings remain
on CreditWatch with negative implications, where they were placed
April 24, 2008.
Fitch Ratings has downgraded Residential Capital LLC's Issuer
Default Rating to 'C' from 'BB-' following the company's debt
exchange offer announcement. ResCap remains on Rating Watch
Negative pending execution of the debt exchange offer. Upon
completion of the exchange, Fitch will downgrade ResCap's IDR to
'D' indicating a default has occurred in accordance with Fitch's
criteria on distressed debt exchanges.
ROCKVILLE CDO: Poor Credit Quality Cues Moody's Rating Downgrades
-----------------------------------------------------------------
Moody's Investors Service downgraded ratings of seven classes of
notes issued by Rockville CDO I, Ltd., and left on review for
possible further downgrade ratings of two of these classes of
notes. The notes affected by this rating action are:
Class Description: $680,000,000 Class A-1 First Priority Senior
Secured Floating Rate Delayed Draw Notes due 2048
-- Prior Rating: Aaa, on review for possible downgrade
-- Current Rating: Aa3, on review for possible downgrade
Class Description: $400,000,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes due 2048
-- Prior Rating: Aa3, on review for possible downgrade
-- Current Rating: B3, on review for possible downgrade
Class Description: $65,000,000 Class A-3 Third Priority Senior
Secured Floating Rate Notes due 2048
-- Prior Rating: Baa2, on review for possible downgrade
-- Current Rating: Ca
Class Description: $19,500,000 Class B Fourth Priority Senior
Secured Floating Rate Notes due 2048
-- Prior Rating: Ba1, on review for possible downgrade
-- Current Rating: Ca
Class Description: $5,400,000 Class C Fifth Priority Senior
Secured Floating Rate Notes due 2048
-- Prior Rating: Ba1, on review for possible downgrade
-- Current Rating: Ca
Class Description: $13,800,000 Class D Sixth Priority Mezzanine
Deferrable Secured Floating Rate Notes due 2048
-- Prior Rating: B2, on review for possible downgrade
-- Current Rating: C
Class Description: U.S. 11,600,000 Class E Seventh Priority
Mezzanine Deferrable Floating Rate Notes due 2048
-- Prior Rating: Caa1, on review for possible downgrade
-- Current Rating: C
The rating actions reflect deterioration in the credit quality of
the underlying portfolio, as well as the occurrence on April 16,
2008, as reported by the Trustee, of an event of default caused by
the Class A Overcollaterization Ratio falling below 100% pursuant
to Section 5.1(i) of the Indenture dated Oct. 25, 2006.
Rockville CDO I, Ltd. is a collateralized debt obligation backed
primarily by a portfolio of structured finance securities.
The rating downgrades taken reflect the increased expected loss
associated with each tranche. Losses are attributed to diminished
credit quality on the underlying portfolio. The severity of
losses of certain tranches may be different, however, depending on
the timing and choice of remedy to be pursued following the
default event. Because of this uncertainty, the ratings assigned
to the Class A-1 Notes and the Class A-2 Notes remain on review
for possible further action.
SEE WHY GERARD: Didn't Dispute Court Decision to Dismiss Case
-------------------------------------------------------------
The Honorable Robert E. Littlefield Jr. of the U.S. Bankruptcy
Court for the Northern District of New York dismissed the Chapter
11 case of See Why Gerard LLC, since the Debtor did not file its
operating reports with the Court during the proceedings, The
Business Review (Albany) reports.
The decision came as the Debtor was working out its dispute with a
tenant over lease payments.
As reported in the Troubled Company Reporter on March 19, 2008,
Judge Littlefield ordered the tenant, The Comedy Works and its
owner Tom Nicchi, and the Debtor's owner, Chaim Ausch, to settle
their arguments through mediation.
The feud arose when Mr. Nicchi refused to vacate DeWitt Clinton,
an 11-story apartment at Albany owned by See Why Gerard. The
Debtor intended to turn the DeWitt property into a hotel, which it
acquired at $5.3 million in April 2006. However, Mr. Nicchi said
he holds a five-year lease deal with DeWitt's former owner that
matures in December next year and has shelled out at least
$500,000 in renovation expenses.
Through the Chapter 11 filing, the Debtor had asked the Court to
reject the lease of Comedy Works, saying that its $3,000 monthly
rate is not enough for the its occupied space of 6,000 square
feet.
According to the Albany Review, no mediation was ever held between
the two parties.
Debtor's counsel, Richard Weiskopf, Esq., told the Albany Review
that the Debtor did not challenge the Court's decision to dismiss
its case. "It wasn't anything that was helping to move this
along," the Review quotes Mr. Weiskopf as saying.
About The Comedy Works
Tom Nicchi, runs The Comedy Works through GRAMRO Entertainment
Corp. since April 2004. He also operates a 6,000-square-foot
banquet facility in the building called The State Room.
About See Why Gerard
Brooklyn, New York-based See Why Gerard LLC is a real estate
holding and development company. It filed for chapter 11
bankruptcy on Nov. 14, 2007 (Bankr. N.D. N.Y. Case No. 07-13113).
Richard H. Weiskopf, Esq., at O'Connell & Aronowitz represents the
Debtor in its restructuring efforts. When the Debtor filed for
bankruptcy, it listed total assets of $4,817,000 and total debts
$5,296,273.
SOLAR COSMETICS: Files Chapter 11 Petition; Gets $1.9 Mil. Loan
---------------------------------------------------------------
Solar Cosmetic Labs Inc. and Solar Packaging Corp. sought
protection under Chapter 11 of the Bankruptcy Code with U.S.
Bankruptcy Court in Miami, Florida.
The Debtors have obtained $1.9 million in revolving credit
facility from KeyBank NA to fund the companies during their
bankruptcy cases, Christopher Scinta of Bloomberg News reports.
Mr. Scinta, citing papers filed with the Court, says Solar
Cosmetic disclosed total assets between $10 million and $50
million, and total debts between $50 million and $100 million.
Dornbusch Family Trust LP, New Capital Partners LP and Vigour
Holdings SA Trust each holds 10% stake in Solar Cosmetic, he adds.
Fujian Shuangfei of Fujian, China, holds a $1.43 million claim
against Solar Cosmetic, Mr. Scinta relates.
Headquartered in Miami Gardens, Florida, Solar Cosmetic Labs Inc.
-- http://www.solarcosmetics.com/-- manufactures skin care and
hygiene products. John Carson is the chief executive officer of
the company.
SOLAR COSMETIC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Solar Cosmetic Labs, Inc.
4920 N.W. 165 St.
Miami Gardens, FL 33014
Bankruptcy Case No.: 08-15793
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Solar Packaging Corp. 08-15796
Type of Business: The Debtors manufacture, markets and sells
perfumes, cosmetics, and other toilet
preparations. See
http://www.solarcosmetics.com/and
http://www.bodyandearth.com/
Chapter 11 Petition Date: May 6, 2008
Court: Southern District of Florida (Miami)
Judge: Robert A. Mark
Debtors' Counsel: Peter E. Shapiro, Esq.
Email: pshapiro@shutts.com
Shutts & Bowen, LLP
200 E. Broward Blvd. Ste. 2100
Ft. Lauderdale, FL 33301
Tel: (954) 524-5505
Estimated Assets: $10 million to $50 million
Estimated Debts: $50 million to $100 million
A. Solar Cosmetic Labs' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Fujian Shuangfei Daily Che trade debt $1,428,236
Logwen Industral Development
Area
No. 8
Fujian, CH
Frutarom, Inc. trade debt $799,241
1534 Solutions Center
Chicago, IL 60677-1005
Logistics Worldwide USA trade debt $416,954
18601 Susana Road, Ste. A
Rancho Dominquez, CA 90221
ISP Technologies trade debt $414,983
P.O. Box 915175
Dallas, TX 75391-5175
DSM Nutritional Products, Inc. trade debt $365,008
2408 Technology Center Pkwy.,
Ste. 200
Lawrenceville, GA 30043
Carolina Logistic Brokers, trade debt $345,000
Inc.
P.O. Box 598
306 A. Pine Street
Pembroke, NC 28372
Timbar Packaging trade debt $257,638
P.O. Box 680519
Miami, FL 33168-0519
Adecco Employment Services trade debt $223,253
Kaufman Container trade debt $184,779
Tricorbraun trade debt $182,286
Astra, Inc. trade debt $171,253
Kobo Products trade debt $161,575
Standard Packaging Co. trade debt $135,136
All American Container, Inc. trade debt $134,952
Seaquist Perfect Dispensing trade debt $132,848
Lamont & Neiman, PA trade debt $119,824
Solove & Solove PA trade debt $110,000
Interstate Packaging trade debt $109,833
Future Force trade debt $107,171
Essential Ingredients, Inc. trade debt $106,378
B. Solar Packaging Corp. does not have any creditors who are not
insiders.
SPRINT NEXTEL: Considers Sale or Spin Off of Nextel Business
------------------------------------------------------------
Sprint Nextel Corp. is considering the sale or spin off of its
Nextel unit, the wireless business that has lost more than 3
million customers since 2006, The Wall Street Journal reports.
WSJ, citing people familiar with the situation, relates that
Sprint is deliberating different alternatives for Nextel. WSJ
states that the company has initial agreements with Nextel founder
Morgan O'Brien, who now runs Cyren Call Communications.
WSJ states that Mr. O'Brien is seeking to assemble a consortium of
investors to acquire Nextel. Sprint is also contemplating other
possible buyers, such as private-equity firms, WSJ added.
According to WSJ, Nextel's current valuation is unclear. WSJ
cites one telecom-industry veteran saying that its value has
significantly deteriorated since the takeover, adding that the
ailing unit now may be worth from $5 billion to $16 billion.
The company could also opt to spin off Nextel into a separate
company, WSJ states. Ralph Whitworth of Relational Investors, a
member of Sprint's board, has endorsed the Nextel spin off, WSJ
says.
WSJ relates citing people familiar with the situation, Sprint took
a $29.5 billion loss in the fourth quarter because of a massive
write-down related to the struggling Nextel business. The Nextel-
related problems have contributed to the wipe out two-thirds of
Sprint's stock price since the merger, WSJ states.
WSJ relates that selling the Nextel division could make Sprint a
more attractive takeover target. WSJ adds that by spinning off
Nextel, Sprint will reduce several billion dollars in debt.
According to WSJ citing one person familiar with the situation,
another option is for the company to transition customers off
Nextel's network and onto Sprint's. WSJ notes that the measure
would allow the company to shut down the Nextel network and cancel
leases for cell towers nationwide, moves that could cost at least
$1 billion.
Bloomberg reports that Sprint stock climbed 83 cents, or 11%, to
$8.72 at 4:15 p.m. in New York Stock Exchange composite trading,
the most since March 20. The stock has dropped 34% this year,
Bloomberg adds.
About Sprint Nextel
Sprint Nextel Corp. -- http://www.sprint.com/-- offers a
comprehensive range of wireless and wireline communications
services bringing the freedom of mobility to consumers, businesses
and government users. Sprint Nextel is widely recognized for
developing, engineering and deploying innovative technologies,
including two robust wireless networks serving about 54 million
customers at the end of the fourth quarter 2007; industry-leading
mobile data services; instant national and international walkie-
talkie capabilities; and a global Tier 1 Internet backbone.
* * *
As reported in the Troubled Company Reporter on May 2, 2008,
Standard & Poor's Rating Services lowered its corporate credit and
senior unsecured ratings on Sprint Nextel Corp. to 'BB' from
'BBB-' and removed the ratings from CreditWatch with negative
implications. The outlook is stable.
SPRINT NEXTEL: Nears $12 Billion Joint Venture with Clearwire
-------------------------------------------------------------
Sprint Nextel Corporation and Clearwire Corporation are close to
disclosing a $12 billion joint venture that would build a new
high-speed wireless network, the Wall Street Journal reports.
According to WSJ, Sprint will combine its wireless broadband
business with Clearwire, a firm founded by cellphone pioneer Craig
McCaw. WSJ states that the new company will take on Clearwire's
name and will offer both traditional voice service and wireless
broadband access.
Cable providers will be able to offer wireless service under a re-
sell agreement with the new Clearwire, WSJ relates. The new
company will give cable operators and Google prominent roles in
shaping the future of mobile Internet access and a new platform
for their content and services as growth begins to slow in their
traditional businesses, WSJ says. For Intel, it breaths life into
WiMax, a technology standard the company has championed that will
be used by the new venture to provide high-speed wireless signals,
WSJ states.
WSJ notes that the new company has secured $3.2 billion financing
from several investors:
$1.05 billion from Comcast Corp.,
$1.0 billion from Intel Corp.,
$550 million from Time Warner Cable Inc.,
$500 million from Google Inc., and
$100 million from Bright House.
The investments value the new company at more than $12 billion,
WSJ relates.
WSJ adds that Dan Hesse agreed to give up operational control to
Clearwire to address some concerns that Sprint could use its
control of the venture to prevent it from competing effectively
for Sprint customers.
Clearwire CEO Ben Wolff would hold the same position in the new
company while Mr. McCaw would be chairman, WSJ notes.
WSJ, citing one person familiar with the deal, says that the final
approval needed from the investors was received Tuesday, May 6.
The deal still requires approval from regulators, WSJ states.
About Clearwire Corporation
Headquartered in Kirkland, Washington, Clearwire Corporation
(NASDAQ:CLWR) -- http://www.clearwire.com/-- builds and operates
wireless broadband networks that enable Internet communications.
Its wireless broadband networks cover entire communities and
deliver a high-speed Internet connection that not only creates a
new communications path into the home or office, but also provides
a broadband connection anytime and anywhere within its coverage
area. It offers services in both domestic and international
markets. The company's services consist primarily of providing
wireless broadband connectivity, but in some of its domestic
markets, it also offers voice-over Internet protocol telephony
services.
About Sprint Nextel
Headquartered in Reston, Virginia, Sprint Nextel Corporation
(NYSE:S) -- http://www.sprint.com/-- offers a comprehensive range
of wireless and wireline communications services bringing the
freedom of mobility to consumers, businesses and government users.
Sprint Nextel is widely recognized for developing, engineering and
deploying innovative technologies, including two robust wireless
networks serving about 54 million customers at the end of the
fourth quarter 2007; industry-leading mobile data services;
instant national and international walkie- talkie capabilities;
and a global Tier 1 Internet backbone.
* * *
As reported in the Troubled Company Reporter on May 2, 2008,
Standard & Poor's Rating Services lowered its corporate credit and
senior unsecured ratings on Sprint Nextel Corp. to 'BB' from
'BBB-' and removed the ratings from CreditWatch with negative
implications. The outlook is stable.
SUNCREST LLC: Trustee Appoints Seven-Members to Creditors Panel
---------------------------------------------------------------
Charles F. McVay, the U.S. Trustee for Region 19, appoints seven
members to the Official Committee of Unsecured Creditors in
SunCrest LLC's Chapter 11 case.
The Committee members include:
1) WW Clyde (Chairperson)
Attn: Brian Babcock, Esq.
505 East 200 South, Suite 300
Salt Lake City, UT 84102
Tel: (801) 531-7000
Fax: (801) 531-7060
2) Proterra Inc.
Attn: Chuck Ackerlow
261 East Broadway, Suite 100
Salt Lake City, UT 84111
Tel: (801) 363-3390
Fax: (801) 363-3395
3) TS Electric
Attn: Brian Babcock, Esq.
505 East 200 South, Suite 300
Salt Lake City, UT 84102
Tel: (801) 531-7000
Fax: (801) 531-7060
4) Stantec Consulting, Inc.
Attn: Jacob Jensen
3995 South 700 East
Salt Lake City, UT 84107
Tel: (801) 261-0090
Fax: (801) 266-1671
5) Grass Master Inc.
Attn: David A. Sullivan
1192 East Draper Parkway, Suite 221
Draper, UT 84020
Tel: (801) 598-5355
Fax: (801) 501-0306
6) IGES Ingenieros, LLC
Attn: Tyler Jensen, Esq.
476 West Heritage Park Boulevard, Suite 200
Layton, UT 84041
Tel: (801) 773-9488
Fax: (801) 733-9489
7) Howrey, LLP
Attn: John H. Bogart, Esq.
170 South Main, Suite 400
Salt Lake City, UT 84101
Tel: (801) 533-8383
Fax: (801) 531-1486
About SunCrest
Based in Draper, Utah, SunCrest, L.L.C. fka DAE/Westbrook LLC --
http://www.suncrest.com-- develops master planned community
located in the Traverse Ridge in Draper in both Salt Lake and Utah
Counties. At present, approximately 2,452 homes sites remain
available out of 3,903 sites. The company holds a majority of the
representative positioms with the SunCrest Home Owners
Association. The company has spent at least $102 million on land
development in the aggregate, pursuant to court documents.
The Debtor filed chapter 11 protection on April 11, 2008 (Bankr.
D. Utah Case No. 08-22302) with Judge William T. Thurman
presiding. John E. Mitchell, Esq., P. Beth Lloyd, Esq., and
William L. Wallander, Esq., at Vinson & Elkins L.L.P., represent
the Debtor. When the Debtor filed for protection against its
creditors, it listed assets and debts between $50 million to $100
million and debt.
SUNCREST LLC: Committee Panel Wants Plan-Filing Periods Ended
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in SunCrest LLC's
Chapter 11 case asks the U.S. Bankruptcy Court for the District of
Utah to terminate the Debtor's exclusive plan-filing periods,
saying that it prefers a Chapter 11 plan over an auction sale of
the Debtor's assets.
Pursuant Section 1121 of the U.S. Bankruptcy Code, the Debtor's
120-day exclusivity period will not expire until Aug. 11, 2008.
The Committee relates that the Debtor proposed a very quick sale
procedure in its case, along with a request for approval of the
solicitation of bids, followed by a proposed auction sale. The
Committee complains that nothing in this process insures unsecured
creditors that they will receive any distribution. The process
also contemplates a sale without a previously approved disclosure
statement or confirmed plan of reorganization.
The panel argues that it is hard for the Court to determine
whether the action is in the best interest of the creditors unless
it also considers alternatives to the sale. Moreover, possible
bidders may prefer to obtain the Debtor's assets through a plan,
rather than at an auction, since a plan offers more flexibility by
way of financing options.
The design of the Debtor's sale process essentially makes all but
one creditor a "hostage" of SunCrest, with the fate of all other
creditors dependant upon an uncertain, and unknown, future sale
price, the panel contends. Allowing parties to propose and
solicit alternative uses of the Debtor's assets through the plan
confirmation process will stimulate negotiation and open a window
to possible better treatment of claims.
The panel concludes that the estate may be prejudiced if the
Debtor proceeds with its asset sale.
About SunCrest
Based in Draper, Utah, SunCrest, L.L.C. fka DAE/Westbrook LLC --
http://www.suncrest.com-- develops master planned community
located in the Traverse Ridge in Draper in both Salt Lake and Utah
Counties. At present, approximately 2,452 homes sites remain
available out of 3,903 sites. The company holds a majority of the
representative positioms with the SunCrest Home Owners
Association. The company has spent at least $102 million on land
development in the aggregate, pursuant to court documents.
The Debtor filed chapter 11 protection on April 11, 2008 (Bankr.
D. Utah Case No. 08-22302) with Judge William T. Thurman
presiding. John E. Mitchell, Esq., P. Beth Lloyd, Esq., and
William L. Wallander, Esq., at Vinson & Elkins L.L.P., represent
the Debtor. The U.S. Trustee for Region 19 appointed an Official
Committee of Unsecured Creditors in the Debtor's case. When the
Debtor filed for protection against its creditors, it listed
assets and debts between $50 million to $100 million and debt.
TBW MORTGAGE: Moody's Cuts Ratings on 36 Tranches on Delinquencies
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings of 36 tranches
from 6 Alt-A transactions issued by TBW Mortgage-Backed Trust.
Fifteen tranches remain on review for possible further downgrade.
Additionally, 14 tranches were placed on review for possible
downgrade.
The collateral backing these transactions consists primarily of
first-lien, fixed rate Alt-A mortgage loans. The ratings were
downgraded, in general, based on higher than anticipated rates of
delinquency, foreclosure, and REO in the underlying collateral
relative to credit enhancement levels. The actions are a result
of Moody's on-going review process.
Complete rating actions are:
Issuer: TBW Mortgage-Backed Trust 2007-1, Mortgage Pass-Through
Certificates, Series 2007-1
-- Cl. M-1, Downgraded to A2 from Aa1
-- Cl. M-2, Downgraded to Ba1 from Aa2
-- Cl. M-3, Downgraded to B2 from Aa3
-- Cl. M-4, Downgraded to B2 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to Ca from Ba2
-- Cl. M-8, Downgraded to Ca from Ba3
-- Cl. M-9, Downgraded to Ca from B2
Issuer: TBW Mortgage-Backed Trust 2007-2, Mortgage Pass-Through
Certificates, Series 2007-2
-- Cl. M-1, Downgraded to A1 from Aa2
-- Cl. M-2, Downgraded to Ba1 from Baa1
-- Cl. M-3, Downgraded to B2 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to B3 from Ba1; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B3 from Ba2 ;Placed Under Review for
further Possible Downgrade
Issuer: TBW Mortgage-Backed Trust Series 2006-3
-- Cl. 1-A, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 2-A2, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 3-A, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 4-A2, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 4-A3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. 5-A2, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. 5-A3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. AX, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. AP, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. M, Downgraded to Ba2 from Aa2
Issuer: TBW Mortgage-Backed Trust Series 2006-4
-- Cl. A-7, Downgraded to A1 from Aa1
-- Cl. M-1, Downgraded to B2 from Aa2
-- Cl. M-2, Downgraded to B3 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to Ca from Ba1
-- Cl. M-4, Downgraded to Ca from Ba2
Issuer: TBW Mortgage-Backed Trust Series 2006-5
-- Cl. M-1, Downgraded to A1 from Aa2
-- Cl. M-2, Downgraded to Baa2 from Aa3
-- Cl. M-3, Downgraded to B2 from A1
-- Cl. M-4, Downgraded to B2 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-5, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B3 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to B3 from Baa2; Placed Under Review for
further Possible Downgrade
Issuer: TBW Mortgage-Backed Trust Series 2006-6
-- Cl. A-2A, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-2B, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-5B, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. A-6B, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. M-1, Downgraded to Baa1 from Aa1
-- Cl. M-2, Downgraded to Ba3 from Aa2
-- Cl. M-3, Downgraded to B2 from Aa3
-- Cl. M-4, Downgraded to B2 from A1
-- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for
further Possible Downgrade
-- Cl. M-6, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-7, Downgraded to B3 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-8, Downgraded to B3 from Baa2; Placed Under Review for
further Possible Downgrade
-- Cl. M-9, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
TLB EQUIPMENT: Case Summary & Four Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: TLB Equipment, LLC
dba TLB Equipment Leasing
dba Tommy Bellville Trucking, Inc.
736 2nd Ave.
Gallipolis, OH 45631
Bankruptcy Case No.: 08-53990
Chapter 11 Petition Date: April 29, 2008
Court: Southern District of Ohio (Columbus)
Debtor's Counsel: Gary Paul Price, Esq.
Price Law Firm, LLC
555 City Park Ave.
Olde World Center
Columbus, OH 43215
Tel: (614) 224-2319
Fax: (614) 224 4708
Email: gary.price@pricelawohio.com
http://www.pricelawohio.com/
TLB Equipment, LLC's Financial Condition as of December 31, 2007:
Total Assets: $1,901,270
Total Debts: $1,699,262
Debtor's Four Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Quality Car and Truck Leasing, $1,400,000
Inc.
P.O. Box 1346
Portsmouth, OH 45662
Rosemont Insurance $50,000
4746 Old Scioto Trail
South Webster, OH 45682
Tel: 1-866-532-1234
Petroleum Products fuel $52,224
Attn: Jeff Golden
500 River East Drive
Belle, WV 25015
Tel: (304) 926-3000
Internal Revenue Service heavy highway $6,000
vehicle use tax
UAL CORP: Lenders Approve Amendment to $1.5BB Credit Facility
-------------------------------------------------------------
UAL Corporation, with the approval of its lenders, amended its
existing $1.5 billion Amended and Restated Revolving Credit, Term
Loan and Guaranty Agreement dated February 2, 2007 with JPMorgan
Chase Bank, N.A., Citicorp USA, Inc., J.P. Morgan Securities Inc.,
Citigroup Global Markets, Inc., Credit Suisse Securities (USA) LLC
and other lenders party.
"This amendment gives us the flexibility to implement the
significant actions we are taking to combat higher fuel costs
including reducing capacity, creating new streams of revenue and
lowering our costs," said Jake Brace, executive vice president and
CFO. "We are comfortable with our liquidity and are well
positioned relative to peers with $2.9 billion in unrestricted
cash and $3.0 billion in unencumbered assets."
After the May amendment, the company is required to comply with
these financial covenants:
The company must maintain a specified minimum ratio of EBITDAR to
the sum of these fixed charges for all applicable periods: (a)
cash interest expense and (b) cash aircraft operating rental
expense. EBITDAR represents earnings before interest expense net
of interest income, income taxes, depreciation, amortization,
aircraft rent and certain cash and non-cash charges as further
defined by the Credit Facility.
The requirement to meet the above fixed charge coverage ratio is
suspended for four quarters, beginning with the second quarter of
2008, and ending with the first quarter of 2009. Starting with the
second quarter of 2009, the ratio will be determined as:
Number of Preceding Required
Months Covered Period Ending Coverage Ratio
------------------- ------------- --------------
Three June 30, 2009 1.0 to 1.0
Six September 30, 2009 1.1 to 1.0
Nine December 31, 2009 1.2 to 1.0
Twelve March 31, 2010 1.3 to 1.0
Twelve June 30, 2010 1.4 to 1.0
Twelve September 30, 2010 1.5 to 1.0
(and each quarter ending thereafter)
The company must also maintain a minimum unrestricted cash balance
of $1.0 billion, an increase of $250 million over what was
previously required. This is effective beginning the second
quarter of 2008 and for all periods thereafter.
All other provisions of the Credit Facility remain unchanged.
These amendments will provide United with more financial
flexibility as it implements its action plan to combat high fuel
costs.
As of March 31, 2008, the company had approximately $2.9 billion
in unrestricted cash and approximately $3.0 billion in
unencumbered hard assets which it believes it could use to raise
financing and enhance liquidity.
About UAL Corp.
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest
air carrier. The airline flies to Brazil, Korea and Germany.
The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts. Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. Judge
Wedoff confirmed the Debtors' Second Amended Plan on
Jan. 20, 2006. The company emerged from bankruptcy protection
on Feb. 1, 2006.
* * *
As reported in the Troubled Company Reporter on April 24, 2008,
Standard & Poor's Ratings Services said that its ratings and
outlook on UAL Corp., parent of United Air Lines Inc. (both rated
B/Negative/--) are not affected by UAL's report of a heavy
first-quarter loss. UAL reported a first-quarter $542 million
pretax loss, as much higher fuel prices more than offset increased
revenues. S&P had revised its rating outlook on both entities to
negative from stable on April 16, 2008. In that outlook revision,
S&P cited very high fuel prices and the expected effect on UAL
revenues of a weak U.S. economy.
VALLEJO CITY: Must File for Bankruptcy, City Manager Advises
------------------------------------------------------------
City Manager Joseph Tanner late last week recommended that the
City of Vallejo, California, file for bankruptcy, according to
various reports. The reports say that the recommendation comes
after the city couldn't resolve its solvency problems.
As reported by the Troubled Company Reporter on April 24, 2008,
the City Council on Tuesday moved until 7:00 p.m., on May 6, 2008,
the date to decide on the fate of the city.
During the last couple of weeks, city officials have been working
out a plan to stave off bankruptcy. Vallejo faces a $13.2 million
2007-2008 general fund operating deficit and a negative funding
balance of $9 million on June 30.
In March, the TCR said that the council approved a tentative
agreement that temporarily kept it afloat. The council approved a
tentative agreement with the Vallejo Police Officers Association
and the International Federation of Firefighters in relation to a
contract that expires June 30. Under the agreement, Vallejo
police and firefighters will give up 6.5% of an 8.5% raise they
received last year.
But the city still needs additional concessions, the TCR related.
According to the reports, officials weren't able to reach an
agreement after they were set to present a long-term financial
plan by April 22, 2008.
Much of the city's financial woes sprang from the slump in housing
market.
Bloomberg relates that on Feb. 21, 2008, Standard & Poor's placed
the A and A- ratings of Vallejo's bonds worth $59 million under
review for a possible downgrade. Bloomberg adds that the city
owes another $150 million loan secured by water-system revenue,
motor-vehicle license fees and special district property
assessments.
Bankruptcy is Vallejo's "last, best option" after negotiations
with unions proved unsuccessful, reports quote councilwoman
Stephani Gomes as stating.
About the City of Vallejo
Vallejo -- http://www.ci.vallejo.ca.us/GovSite/-- is a city in
Solano County, California. As of the 2000 census, the city had a
total population of 116,760. It is located in the San Francisco
Bay Area on the northern shore of San Pablo Bay. According to
Vallejo's comprehensive annual report for the year ended June 30,
2007, the city has $983 million in assets and $358 million in
debts.
VILLAGE HOTEL: Ritz-Carlton Opposes Conversion or Dismissal Plea
----------------------------------------------------------------
Ritz-Carlton Hotel Company LLC, which owns interest in Village
Hotel Holdings LLC, the parent company of Village Hotel Investors
LLC, opposes the request of German American Capital Corp. to
dismiss or convert the Debtors' bankruptcy case to a Chapter 7
liquidation proceeding, or in the alternative, to appoint a
Chapter 11 Trustee in the Debtors' case.
Ritz-Carlton contends that German American, an affiliate of
Deutsche Bank, has not provided strong proof for the conversion or
dismissal of the Chapter 11 case.
The only "proof" offered by Deutsche Bank consists of:
i) the allegation that Village Hotel Investors breached its
fiduciary duty by refusing to modify or terminate the terms
of valid and existing contracts; namely a hotel management
agreement between the Debtor and Ritz-Carlton, and the
Subordination, Non-Disturbance and Attornment Agreement to
which the Investors, Ritz-Carlton and Deutsche Bank are
signatories; and
ii) the assertion by a single Deutsche Bank employee, without
proof or other establishment of qualification, expertise or
background, that the continued, yet valid, existence of the
Management Agreement somehow creates a burden for attracting
prospective buyers of the hotel.
Ritz-Carlton argues that allowing foreclosure by Deutsche Bank
would provide a benefit solely to the bank and would not provide
assurance to any of Investors' other creditors for even an
effort to create a potential benefit.
Ritz-Carlton complained that Deutsche Bank's assertion that
Investor seeks to maintain the management agreement at the expense
of maximizing value to the estate is baffling, when Deutsche Bank
also asserts that Investors and Ritz-Carlton have breached some
duty and have some conflict of interest due to the fact that
Marriott, an affiliate of Ritz-Carlton, is the lender under a $12
million mezzanine loan.
Ritz-Carlton laments that even if it did have some control over
the decisions made by Investors as to management and operations of
the hotel, it is illogical that Ritz-Carlton or Investors would
seek to minimize or depress the value realizable to the Debtors'
estate when it is clear that Marriott, whose loan to holders is
currently in default itself, cannot be paid anything on such
loan until all creditors of Investors have been paid on their
allowed claims.
To the extent that Deutsche Bank takes issue with the right of
Ritz-Carlton to act on its own behalf and for its own interests
with respect to the management agreement, such assertion is not
only unconvincing as it relates to any effect the exercise of such
right may have on the conduct of Investors, but also ignores the
fact that Ritz-Carlton has the express right to enter into such
"affiliated agreements" with Investors and to act as an
independent party.
Ritz-Carlton argues that, at its basic level, Deutsche Bank's
request can only really be about its attempt to avoid the terms of
the valid, existing and binding SNDA between Deutsche Bank,
Investors and Ritz-Carlton, which clearly requires the bank to
take the hotel with the management agreement in place in the event
of any foreclosure action by Deutsche Bank. The bank cannot and
should not be allowed to simply disavow its agreements, which it
entered into knowingly, through relief to which it is not entitled
under the U.S. Bankruptcy Code and applicable authority, concludes
Ritz-Carlton.
About Village Hotel
Based in Henderson, Nevada, Village Hotel Investors LLC and its
affiliate Village Hotel Holdings LLC --
http://www.ritzcarlton.com/-- owns the AAA Four Diamond Ritz
Carlton Lake Las Vegas, a Mediterranean-style resort nestled in
the midst of Southern Nevada desert and mountain landscape.
The company and its affiliate filed for Chapter 11 protection on
April 1, 2008 (D. Nev. Case Nos. 08-13043 and 08-13044). Brett A.
Axelrod, Esq., at Lewis and Roca LLP, represents the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, Village Hotel Investors listed
estimated assets and debts of $100 million to $500 million.
WHITING PETROLEUM: $365MM Uinta Deal Won't Affect S&P's BB- Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'BB-' corporate
credit rating on oil and gas exploration and production company
Whiting Petroleum Corp. was unaffected by the company's
announcement that it will acquire properties in the Uinta Basin in
northeastern Utah for $365 million. While Whiting's adjusted debt
will increase to more than $1 billion as a result of the
transaction, its credit measures remain at acceptable levels, with
debt to barrel of oil equivalent in the $5 area.
WIRELESS PARTNERS: Case Summary & 19 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Wireless Partners USA, Inc.
P.O. Box 25100
Woodbury, MN 55125
Bankruptcy Case No.: 08-32092
Chapter 11 Petition Date: April 30, 2008
Court: District of Minnesota (St. Paul)
Judge: Nancy C. Dreher
Debtor's Counsel: Joseph W. Dicker, Esq.
Email: joe@joedickerlaw.com
1406 West Lake St., Ste. 208
Minneapolis, MN 55408
Tel: (612) 827-5941
Fax: (612) 822-1873
Total Assets: $1,557,401
Total Debts: $2,833,260
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ron Musich $281,250
2715 Pioneer Trail
Medina, MN 55430
Wachovia SBA Lending, Inc. value of collateral: $692,721
1620 East Roseville Pkwy., $1,543,502
Ste. 100
Roseville, CA 95661
Charles Kasbohm $168,750
5990 68th Lane North
Greenfield, MN 55357
American Express $138,990
Morena Vista, LLC $116,369
Wells Fargo Bank $82,764
Brooks Mall Properties, LLC $32,312
Ridgedale Center $27,562
Hopkins Auto Mall Park $26,511
Midwest
Puget Sound Leasing Co., Inc. $25,064
Carlson-Lavine, Inc. $22,375
City of Advantage, Inc. $22,227
Bank of America $20,193
Axis Capital, Inc. value of collateral: $17,240
$1,434,722
Elease/Lyon Financial $17,240
Canon Industrial Center $16,253
Oakwood Hills Mall Partners, $10,277
LLP
Gateway Washington, Inc. $9,982
First Data $9,000
* Fitch Says Health of Vehicle Market Is A Good Indicator of Loss
-----------------------------------------------------------------
The expected health of the wholesale vehicle market is a good
indicator of future loss severity levels and loss rates in U.S.
auto asset-backed securities, according to Fitch Ratings in a new
report.
Currently, the wholesale vehicle market is exhibiting weakness due
to several factors including a weak economy and soft job market.
Loss severity in auto ABS is also under pressure due to lower used
vehicle values and loan structure trends including longer loan
terms and higher loan-to-values.
A recent Fitch analysis confirms that there is an indirect,
inverse relationship between wholesale vehicle values and
annualized net loss rates in auto ABS. As wholesale vehicle
values increase, auto ABS net loss rates decline, and vice-versa.
In short, the healthier the wholesale vehicle markets, the lower
loss severity in auto ABS as vehicle recovery rates increase, and
thus loss levels ultimately decrease.
Despite these recent market developments, prime auto ABS rating
performance has remained stable through the first quarter of 2008,
even in light of weakening asset performance. In the subprime
sector, outside of rating actions relating to the health of
insurance guarantors' insurer financial strength, rating
performance has remained relatively stable in 2008 despite
declining asset performance.
* S&P Says LOC-Backed Debt Became Increasingly Popular in 2007
--------------------------------------------------------------
Letter of credit-backed debt became increasingly popular in 2007,
according to a recent report by Standard & Poor's Ratings
Services, and issuance is likely to rise even further this year.
"With the ongoing uncertainty in the financial markets, investors
continue to search for risk transparency, increased liquidity, and
stable pricing," said Standard & Poor's credit analyst Justin
Hansen, a director in the LOC-backed group. "At the same time,
the recent unrest in the auction rate market, combined with
declining investor appetite for monoline insurer exposure, is
leading issuers to seek cheaper financing alternatives."
More and more, Mr. Hansen said, these market participants are
turning to LOC-backed debt. As a result, 2007 was a very strong
year for the U.S. LOC market, with issuance of debt fully
supported by LOCs reaching approximately $33.5 billion.
In 2008, he added, Standard & Poor's believes that issuance will
rise 5% based on continued investor desire for rated LOC-backed
debt and the increasing presence in the market of international
banks as LOC providers.
* Five Bankruptcy Attorneys Join Morrison & Foerster in New York
----------------------------------------------------------------
Bankruptcy attorneys Brett Miller, Esq. and Lorenzo Marinuzzi,
Esq. have joined Morrison & Foerster LLP as partners in the firm's
New York office. In addition, Melissa Hager, Esq. and associates
Todd Goren, Esq. and Jordan Wishnew, Esq. have also joined the
firm.
Messrs. Miller and Marinuzzi chiefly represent official committees
of unsecured creditors in all aspects of the reorganization and
liquidation of public and private companies. Notable cases
handled by Mr. Miller and Mr. Marinuzzi included Northwest
Airlines, US Airways, Hawaiian Airlines, Aloha Airlines, American
Plumbing and Mechanical, HomeBanc Mortgage, Phar-Mor, Midland
Foods, AmeriServe and Fruit of the Loom.
Mr. Miller has also represented ad hoc committees as well as
individual secured and unsecured creditors in numerous other
bankruptcy cases including ATA Airlines, Schlotzsky's, Summit
Global Logistics, Sybra Corp., Teligent, Tower Automotive and 360
Networks.
In addition to his experience with airlines, Mr. Marinuzzi has
represented lenders in major international fraud cases, including
a Swiss bank in a prominent European insolvency, and a secured
lender in the Allied Deal metals trading fraud.
In a case filed in February, Mr. Miller and Mr. Marinuzzi are
representing the creditors' committee of prominent New York
retailer Fortunoff. The pair also represents the liquidating
trust established in connection with the liquidation of FLYi,
Inc., and its subsidiary, Independence Air, which filed for
bankruptcy protection in November 2005. Since joining Morrison &
Foerster, Mr. Miller was selected as counsel to the creditors'
committee in the Skybus Airlines case pending in Delaware.
Morrison & Foerster's bankruptcy and restructuring practice group
developed significantly in 2007, as they were joined by a
prominent team from Lovells, led by former practice chair Gary Lee
and partner Karen Ostad. With new bankruptcy filings and credit
defaults already increasing sharply and more of the same expected
through 2008, Messrs. Miller and Marinuzzi will further enhance
Morrison & Foerster's well-established practice.
Mr. Lee, who co-chairs Morrison & Foerster's bankruptcy group
along with Larren Nashelsky said, "We are extremely fortunate that
Brett and Lorenzo have decided to join us in a very busy period.
Brett and Lorenzo complement our ongoing work representing debtors
and committees, as well as trustees, equity holders and other key
stakeholders in Chapter 11 cases."
Morrison & Foerster's bankruptcy practice group has expanded to
meet the needs of an increasingly demanding business landscape, as
credit markets have seized up and consumer confidence has flagged.
The firm has notched a significant uptick in bankruptcy
engagements -- among other assignments, Morrison & Foerster
represents Delta Financial Corp., which was the fifth largest
bankruptcy filing in the U.S. in 2007. The firm is also
representing the Dominican Republic-based telecom provider Tricom,
S.A. in its pre-packaged bankruptcy filing in the Southern
District of New York.
Mr. Lee said he expects the new bankruptcy attorneys will play an
active role in several of Morrison & Foerster's prominent practice
groups, including financial services, real estate and litigation.
"As the current economic cycle continues to turn in a more
challenging direction, it is important for us to maintain our
strong presence in the distressed arena," said Morrison & Foerster
Chair Keith Wetmore. "Brett and Lorenzo's decision to join our
firm will supplement our existing bankruptcy practice in an
important period for this sector. Their stellar credentials
complement our existing expertise and will add important synergies
to our practices."
Both Mr. Miller and Mr. Marinuzzi have been recognized by
Turnarounds & Workouts, with Mr. Miller having been named an
Outstanding Young Bankruptcy Lawyer four years in a row and Mr.
Marinuzzi receiving his accolades in 2007.
"Morrison & Foerster is a world-class firm, with superbly talented
lawyers and exceptional leadership," said Mr. Miller. "We look
forward to applying the breadth of the firm's resources to fulfill
further the needs of our clients."
Mr. Miller received his law degree from Georgetown University Law
Center in 1991 and an undergraduate degree from Columbia
University in 1988. He regularly is a panelist at industry
conferences and seminars, speaking at the American Bankruptcy
Institute, American Bar Association, New York County Lawyers'
Association and GAIM Fund of Funds Conference, among others.
A 1996 Fordham University School of Law School graduate, Mr.
Marinuzzi received his undergraduate degree from Fordham College
in 1993, and is a member of the American Bankruptcy Institute and
the American Bar Association.
Ms. Hager received her law degree, magna cum laude, from the
University of Bridgeport -- Quinnipiac University School of Law --
in 1992. She received her undergraduate degree, cum laude, from
Providence College in 1988. Mr. Goren received his law degree,
magna cum laude, in 2002 from Georgetown University Law Center,
where he was elected to Order of the Coif, and earned his B.S.
from Washington University in St. Louis in 1998. Mr. Wishnew
earned his J.D. in 2002 from Brooklyn Law School, and his B.A. in
1999 from Emory University.
About Morrison & Foerster
Morrison & Foerster LLP -- http://www.mofo.com/-- has more than
1,000 lawyers in 18 offices around the world. The company offers
clients comprehensive, global legal services in business and
litigation, and is distinguished by its expertise in finance, life
sciences, and technology, its legendary litigation skills, and an
unrivaled reach across the Pacific Rim, particularly in Japan and
China.
* Reed Smith Names A. Sussman as Corporate & Securities Partner
---------------------------------------------------------------
Reed Smith LLP added Allen Z. Sussman as a partner in the
Corporate & Securities Group, effective immediately.
Mr. Sussman had been a partner in the Los Angeles office of
Morrison & Foerster LLP since 2001, where his practice focused on
securities, capital markets, and mergers and acquisitions.
"[Mr. Sussman] brings senior level experience in public offerings
and SEC related matters, and he furthers our ongoing efforts to
grow our public offering and capital markets practice globally,"
said John Iino, Reed Smith's firmwide head of the Corporate &
Securities Group. "He also strengthens our emerging growth
company and venture capital practice in California, where the
demand for these services remains strong and steady."
Mr. Sussman represents public and private issuers, banks, broker-
dealers, and underwriters in securities matters and has extensive
public offering experience on both the company and underwriter
side. His clients include emerging growth companies and investors
in the technology and media sectors.
Prior to joining Morrison & Foerster, Mr. Sussman was a corporate
and securities lawyer at Brobeck, Phleger & Harrison during that
firm's prominence in technology transactions. Mr. Sussman's move
to Reed Smith reunites him with two former colleagues from
Brobeck, David Halbreich and Doug Rawles who recently joined Reed
Smith's growing Insurance Recovery Group in Los Angeles.
Prior to entering private law practice, Mr. Sussman served as an
enforcement attorney with the Securities and Exchange Commission
in Washington, D.C., where he handled significant cases involving
auditors, attorneys, and insiders of failed banks. He also served
two years as counsel in the Office of Thrift Supervision in San
Francisco.
"This is a tremendous opportunity to continue building my practice
with technology and life science companies," said Mr. Sussman. "I
find Reed Smith attractive for many reasons, including its dynamic
growth and energy, strong specialties and global reach. I believe
the firm's recent expansion into Asia also provides a valuable
asset for my clients, many of which have strategic interests in
Asia. Reed Smith offers a great fit for my practice."
A 1988 graduate of Boston University School of Law, Mr. Sussman
lectures frequently on topics related to securities and M&A
matters, venture capital transactions and strategic and other
business transactions, including programs sponsored by the
Directors Roundtable, Bank Director Conference, and the Las Vegas
Consumer Electronics Show. He has also appeared as a guest
commentator on CNBC's "PowerLunch" program.
Mr. Sussman earned recognition in 2006, 2007 and 2008 as a Best
Lawyer in America in the field of Corporate Law. For five years
from 1998 to 2003, he was ranked within the Top 100 IPO lawyers
nationwide by the IPO Lawyer Yearbook. He is admitted to practice
in California and the District of Columbia.
About Reed Smith
Reed Smith LLP -- http://www.reedsmith.com/-- is one of the 15
largest law firms in the world, with more than 1,600 lawyers in 23
offices throughout the United States, Europe, Asia and the Middle
East. Founded in 1877, the firm represents international
businesses from Fortune 100 corporations to mid-market and
emerging enterprises. Its attorneys provide litigation services
in multi-jurisdictional matters and other high stake disputes,
deliver regulatory counsel, and execute the full range of
strategic domestic and cross-border transactions. Reed Smith is a
preeminent advisor to industries including financial services,
life sciences, health care, advertising and media, shipping,
international trade and commodities, real estate, manufacturing,
and education.
The firm's U.S. offices are located in New York, Chicago, Los
Angeles, Washington, San Francisco, Philadelphia, Pittsburgh,
Oakland, Princeton, Northern Virginia, Wilmington, Century City,
and Richmond. Its European offices are in London, Paris, Munich,
Birmingham, and Greece. Its Asian locations are in Abu Dhabi and
Dubai in the UAE, Hong Kong, and Beijing, China.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
May 9, 2008
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts for Young Practitioners - NYC
Alexander Hamilton U.S. Custom House, New York
Contact: 1-703-739-0800; http://www.abiworld.org/
May 12, 2008
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
Millennium Broadway Hotel & Conference Center, New York
Contact: 1-703-739-0800; http://www.abiworld.org/
May 12-13, 2008
PRACTISING LAW INSTITUTE
30th Annual Current Developments in
Bankruptcy & Reorganization
PLI Center San Francisco, California
Contact: http://www.pli.edu/
May 13-16, 2008
AMERICAN BANKRUPTCY INSTITUTE
Litigation Skills Symposium
Tulane University, New Orleans, Louisiana
Contact: 1-703-739-0800; http://www.abiworld.org/
May 15-16, 2008
BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES
Fifth Annual Conference on Distressed Investing Europe
Maximizing Profits in the European
Distressed Debt Market
Le Meridien Piccadilly Hotel - London
Contact: 800-726-2524; 903-595-3800;
http://www.renaissanceamerican.com/
May 18-20, 2008
INTERNATIONAL BAR ASSOCIATION
14th Annual Global Insolvency & Restructuring Conference
Stockholm, Sweden
Contact: http://www.ibanet.org/
May 21, 2008
TURNAROUND MANAGEMENT ASSOCIATION
What Happened to My Money - The Restructuring of a Loan
Servicer
Marriott North, Fort Lauderdale, Florida
Contact: http://www.turnaround.org//
June 4-7, 2008
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
24th Annual Bankruptcy & Restructuring Conference
J.W. Marriott Spa and Resort, Las Vegas, Nevada
Contact: http://www.airacira.org/
June 12-14, 2008
AMERICAN BANKRUPTCY INSTITUTE
15th Annual Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Michigan
Contact: http://www.abiworld.org/
June 19 & 20, 2008
BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES
Corporate Reorganizations
Contact: 800-726-2524; 903-595-3800;
http://www.renaissanceamerican.com/
June 24, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Fraud Panel
Citrus Club, Orlando, Florida
Contact: http://www.turnaround.org/
June 26-29, 2008
NORTON INSTITUTES ON BANKRUPTCY LAW
Western Mountains Bankruptcy Law Seminar
Jackson Hole, Wyoming
Contact: http://www.nortoninstitutes.org/
July 10, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Cynthia Jackson of Smith Hulsey & Busey
University Club, Jacksonville, Florida
Contact: http://www.turnaround.org/
July 10-13, 2008
AMERICAN BANKRUPTCY INSTITUTE
16th Annual Northeast Bankruptcy Conference
Ocean Edge Resort
Brewster, Massachussets
Contact: http://www.abiworld.org/events
July 29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Employment Issues Following Hurricanes & Disasters
Centre Club, Tampa, Florida
Contact: http://www.turnaround.org/
July 31 - Aug. 2, 2008
AMERICAN BANKRUPTCY INSTITUTE
4th Annual Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay
Cambridge, Maryland
Contact: http://www.abiworld.org/
Aug. 16-19, 2008
AMERICAN BANKRUPTCY INSTITUTE
13th Annual Southeast Bankruptcy Workshop
Ritz-Carlton, Amelia Island, Florida
Contact: http://www.abiworld.org/
Aug. 20-24, 2008
NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES
NABT Convention
Captain Cook, Anchorage, Alaska
Contact: http://www.nabt.com/
Aug. 26, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Do's and Don'ts of Investing in a Turnaround
Citrus Club, Orlando, Florida
Contact: http://www.turnaround.org//
Sept. 4-5, 2008
AMERICAN BANKRUPTCY INSTITUTE
Complex Financial Restructuring Program
Four Seasons, Las Vegas, Nevada
Contact: http://www.abiworld.org/
Sept. 4-6, 2008
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Four Seasons, Las Vegas, Nevada
Contact: http://www.abiworld.org/
Sept. 17, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Real Estate / Condo Restructuring Panel
Marriott North, Fort Lauderdale, Florida
Contact: http://www.turnaround.org//
Sept. 24-26, 2008
INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION
IWIRC 15th Annual Fall Conference
Scottsdale, Arizona
Contact: http://www.ncbj.org/
Sept. 24-27, 2008
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Desert Ridge Marriott, Scottsdale, Arizona
Contact: http://www.iwirc.org/
Sept. 30, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Private Equity Panel
Centre Club, Tampa, Florida
Contact: http://www.turnaround.org//
Oct. 9, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Luncheon - Chapter 11
University Club, Jacksonville, Florida
Contact: http://www.turnaround.org/
Oct. 28, 2008
TURNAROUND MANAGEMENT ASSOCIATION
State of the Capital Markets
Citrus Club, Orlando, Florida
Contact: http://www.turnaround.org//
Oct. 28-31, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott New Orleans, Louisiana
Contact: 312-578-6900; http://www.turnaround.org/
Oct. 30 & 31, 2008
BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES
Physicians Agreements and Ventures
Contact: 800-726-2524; 903-595-3800;
http://www.renaissanceamerican.com/
Nov. 19, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Interaction Between Professionals in a
Restructuring/Bankruptcy
Bankers Club, Miami, Florida
Contact: 312-578-6900; http://www.turnaround.org/
Dec. 3-5, 2008
AMERICAN BANKRUPTCY INSTITUTE
20th Annual Winter Leadership Conference
Westin La Paloma Resort & Spa
Tucson, Arizona
Contact: http://www.abiworld.org/
May 7-10, 2009
AMERICAN BANKRUPTCY INSTITUTE
27th Annual Spring Meeting
Gaylord National Resort & Convention Center
National Harbor, Maryland
Contact: http://www.abiworld.org/
June 11-13, 2009
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
June 21-24, 2009
INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY &
BANKRUPTCY PROFESSIONALS
8th International World Congress
TBA
Contact: http://www.insol.org/
July 16-19, 2009
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Mt. Washington Inn
Bretton Woods, New Hampshire
Contact: http://www.abiworld.org/
Sept. 10-12, 2009
AMERICAN BANKRUPTCY INSTITUTE
17th Annual Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nevada
Contact: http://www.abiworld.org/
Oct. 5-9, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900; http://www.turnaround.org/
Dec. 3-5, 2009
AMERICAN BANKRUPTCY INSTITUTE
21st Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 4-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
BEARD AUDIO CONFERENCES
2006 BACPA Library
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com
BEARD AUDIO CONFERENCES
BAPCPA One Year On: Lessons Learned and Outlook
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Calpine's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Carve-Out Agreements for Unsecured Creditors
Contact: 240-629-3300; http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Changes to Cross-Border Insolvencies
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Changing Roles & Responsibilities of Creditors' Committees
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Chinas New Enterprise Bankruptcy Law
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Clash of the Titans -- Bankruptcy vs. IP Rights
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Coming Changes in Small Business Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer
for Navigating the Restructuring Process
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com
BEARD AUDIO CONFERENCES
Dana's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Deepening Insolvency Widening Controversy: Current Risks,
Latest Decisions
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Diagnosing Problems in Troubled Companies
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Claims Trading
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Market Opportunities
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Real Estate under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Employee Benefits and Executive Compensation under the New
Code
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Equitable Subordination and Recharacterization
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Examining the Examiners: Pros and Cons of Using
Examiners in Chapter 11 Proceedings
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com
BEARD AUDIO CONFERENCES
Fundamentals of Corporate Bankruptcy and Restructuring
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Handling Complex Chapter 11
Restructuring Issues
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Healthcare Bankruptcy Reforms
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
High-Yield Opportunities in Distressed Investing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Homestead Exemptions under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Hospitals in Crisis: The Insolvency Crisis Plaguing
Hospitals Across the U.S.
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
IP Rights In Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
KERPs and Bonuses under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
New 'Red Flag' Identity Theft Rules
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com
BEARD AUDIO CONFERENCES
Non-Traditional Lenders and the Impact of Loan-to-Own
Strategies on the Restructuring Process
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Partnerships in Bankruptcy: Unwinding The Deal
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Privacy Rights, Protections & Pitfalls in Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Real Estate Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Reverse Mergersthe New IPO?
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Second Lien Financings and Intercreditor Agreements
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Surviving the Digital Deluge: Best Practices in E-Discovery
and Records Management for Bankruptcy Practitioners
and Litigators
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Technology as a Competitive Advantage For Todays Legal
Processes
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
The Battle of Green & Red: Effect of Bankruptcy
on Obligations to Clean Up Contaminated Property
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
The Subprime Sector Meltdown:
Legal Developments and Latest Opportunities
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Twenty-Day Claims
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Using Virtual Data Rooms to Expedite Corporate Restructuring
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com
BEARD AUDIO CONFERENCES
Using Virtual Data Rooms to Expedite M&A and Insolvency
Proceedings
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Validating Distressed Security Portfolios: Year-End Price
Validation and Risk Assessment
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
When Tenants File -- A Landlord's BAPCPA Survival Guide
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
* * *
Featured Conferences
Beard Conferences presents:
May 15-16, 2008
Fifth Annual Conference on Distressed Investing Europe
Maximizing Profits in the European Distressed Debt Market
Le Meridien Piccadilly Hotel - London
Brochure available soon!
* * *
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.
*********
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. Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez,
Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr.,
Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya,
Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.
Copyright 2008. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***