/raid1/www/Hosts/bankrupt/TCR_Public/080827.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, August 27, 2008, Vol. 12, No. 204
Headlines
530 WEST: Case Summary & 20 Largest Unsecured Creditors
ALPINE SECURITIZATION: DBRS Places $76MM Liquidity Facility at BB
AMERICAN COLOR: Court Confirms Prepackaged Chapter 11 Plan
AMERICAST TECH: S&P Puts 'B' on Watch Positive on Bradken Deal
ARIZANT INC: Moody's Rates $140MM Sr. Secured Facility B1
ASCENDIA BRANDS: U.S. Trustee Forms Creditors' Committee
BASIS YIELD: Some $23MM to be Returned to Investors, Report Says
BASIS YIELD: Capital Discloses First Quarter 2008 Market Summary
BEARD COMPANY: June 30 Balance Sheet Upside-Down by $6,805,000
BLUE HERON IX: Fitch Junks $85MM Class B Notes, Removes from RWN
BUI INC: Case Summary & 60 Largest Unsecured Creditors
BUILDING COMMERCIAL: Voluntary Chapter 11 Case Summary
CADENCE INNOVATION: Files for Bankruptcy Protection in Delaware
CADENCE INNOVATION: Case Summary & 20 Largest Unsecured Creditors
CARDIAC MANAGEMENT: Wants to Hire Two Firms as Special Counsel
CARDIAC MANAGEMENT: Committee Objects to Hiring of Health Counsel
CARDIAC MANAGEMENT: Gets Final Nod to Tap Merrill Lynch's DIP Fund
CARDIAC MANAGEMENT: Committee May Engage Kluger Peretz as Counsel
CHATEAU SENIOR: Organizational Meeting Set for September 4
CIFG GUARANTY: S&P Cuts Rating to 'B' on Restructuring Plan Delay
CIMAREX ENERGY: Moody's Raises B1 Rating on Senior Notes to Ba3
CLICO LIMITED: A.M. Best Downgrades Issuer Credit Rating to BB
CMT AMERICA: Court Okays Jager Smith as Committee Counsel
CORD BLOOD: June 30 Balance Sheet Upside-Down by $6,195,170
COSTA BELLA: Fitch Downgrades 5 Classes, Off Rating Watch Negative
CSFB MORTGAGE: Moody's Junks Class B-5 Certificate
DANA CORP: Reports $140MM 2Q Loss; To Cut 3,000 Jobs
DAVITA INC: Fitch Affirms BB- Issuer Default Rating
DELPHI CORP: Highland Capital Seeks to Block $300MM Loan from GM
DELTA AIR: Merger Violates Antitrust Act, Customers Allege
DIABLO GRANDE: Has Until Aug. 28 to Bare Winning Bidder for Resort
DIAGNOSTIC IMAGING: S&P Affirms 'B' Ratings; Outlook Stable
EMPIRE STATE: Court Approves Sale of Assets to ION Holdings
EPIX PHARMACEUTICALS: June 30 Balance Sheet Upside-Down by 75.6MM
ERVIN MOTT: Case Summary & 6 Largest Unsecured Creditors
FANNIE MAE: Bank Financial Strength Rating Tumbles, Moody's Says
FEY 240: U.S. Trustee Wants Case Converted or Dismissed
FORTUNOFF: Presses for Dismissal of Chapter 11 Proceedings
FREDDIE MAC: Bank Financial Strength Rating Tumbles, Moody's Says
FTS GROUP: Posts $1,202,015 Net Loss in 2008 Second Quarter
GENERAL MOTORS: Delphi Bondholder Seeks to Block $300MM Loan
GLASS & POWDER: To Close Last Shop in Virginia
GLOBAL REALTY: June 30 Balance Sheet Upside-Down by $2,055,716
GOLDEN VALLEY: Case Summary & Four Largest Unsecured Creditors
GOODY'S FAMILY: Court Sets Sept. 10 as Admin. Claims Bar Date
GPS INDUSTRIES: Posts $3,866,000 Net Loss in 2008 Second Quarter
GREY WOLF: Precision Buyout Cues Moody's to Review Ratings
GROUP 1: S&P Holds 'BB-' Rtgs on Worsening Industry Conditions
GSAMP TRUST: Moody's Junks Two Class M Certificates
HANOVER CAPITAL: June 30 Balance Sheet Upside-Down by $71.9 MM
IMAX CORP: June 30 Balance Sheet Upside-Down by $88,788,000
INTEGRATED MEDIA: June 30 Balance Sheet Upside-Down by $10,412,339
INTERMET CORP: Unites States Trustee Forms Creditors' Committee
INTERMET CORP: Wants to Hire Pachulski Stang as Co-Counsel
INTERMET CORP: Wants Milbank Tweed as Bankruptcy Counsel
I/0MAGIC CORP: June 30 Balance Sheet Upside-Down by $1,069,761
ISCO INTERNATIONAL: Posts $2.3 Million Net Loss in 2008 2nd Qtr.
JABIL CIRCUIT: Fitch Affirms BB+ Issuer Default Rating
JED OIL: Gets Creditors Protection Under CCAA Until September 15
JFPS HOLDING: Case Summary & 18 Largest Unsecured Creditors
LAKE TYE: Voluntary Chapter 11 Case Summary
LAS VEGAS MONORAIL: Fitch Maintains CC Rating on $451MM Rev. Bonds
LAWRENCE REDMAN: Involuntary Chapter 11 Case Summary
LINENS N THINGS: Outlines Plan & Bankruptcy Exit by 2009
LINENS N THINGS: Court Approves Sale of Leases to Smart & Final
L.I.D. LTD: Gets Court Permission to Revise Disclosure Statement
MERVYN'S LLC: Gets Final OK to Access $465MM Wachovia DIP Facility
M FABRIKANT: Former Owners Demand Release of $200 Million Assets
MIDWEST AIR: Failed Airtran Deal Remembered in Midst of Job Cuts
MILLENNIUM CELL: Trading Halted, Faces Nasdaq Delisting
MORGAN STANLEY: Moody's Junks Two Class B Certificates
NEENAH FOUNDRY: S&P Keeps 'B'; Outlook Neg on Increased Leverage
NEW CENTURY: Amended Joint Chapter 11 Plan Effective
NEW CENTURY: Court Approves Agreement With Credit Suisse
NEXIA HOLDINGS: March 31 Balance Sheet Upside-Down by $7,828,151
NOE OBANDO: Case Summary & 8 Largest Unsecured Creditors
NORTHWEST AIRLINES: Wants Capt. Friday Denied of Arbitration Order
NORTHWEST AIRLINES: Resolves Northwestern Mutual's $46.2MM Claim
NORTHWEST AIRLINES: Merger Violates Antitrust Act, Clients Say
NORTHWEST AIRLINES: Oil Price Drop Has Mixed Reviews from Analysts
PARKER EXCAVATING: Court Okays Wolf Slatkin as Special Counsel
PARMALAT SPA: Judge Junks Class Suit Against BofA, Citgroup
PENN TREATY: S&P Keeps 'B-' Ratings; Outlook Revised to Negative
PORT BARRE: S&P Affirms 'B+' Rating Affirmed; Outlook Negative
POSTAL LOGISTICS: Case Summary & 20 Largest Unsecured Creditors
PREMD INC: Amex to Suspend Trading and Delist Stocks on August 28
PROPEX: Lenders Hold Valid Lien on Foreign Affiliates, Court Says
PROPEX INC: Court Extends Exclusive Plan-Filing Period to Oct. 20
PROTECTED VEHICLES: Files Liquidation Plan with Creditors' Panel
PROXYMED INC: Trading Halted, Faces Nasdaq Delisting
QUEBECOR WORLD: Posts $77.7 Million Loss in Second Quarter 2008
QUEBECOR WORLD: Judge Peck Approves Watson Wyatt Retention
QUEBECOR WORLD: Panel May Retain Lowenstein as Conflicts Counsel
REFCO LLC: Former President Receives 10-Year Sentence
RENAISSANCE HOSPITAL: Voluntary Chapter 11 Case Summary
ROTECH HEALTHCARE: Trading Halted, Faces Nasdaq Delisting
RENAISSANCE HOSPITAL: Case Summary & 40 Largest Unsec. Creditors
ROBERT PLAN: Files for Bankruptcy Protection in New York
ROBERT PLAN: Case Summary & 20 Largest Unsecured Creditors
RSFC SERIES: Moody's Junks Class M-3 Certificates
SAM SELTZER'S: Court Okays Argus as Interim Management Consultant
SAM SELTZER'S: Panel Wants to Employ Forizs & Dogali as Counsel
SAM SELTZER'S: Committee Wants Protivit as Financial Advisors
SASCO MORTGAGE: S&P Cuts 2003-HEL1, 2004-GEL3 Class B to 'CCC'
SASCO MORTGAGE: Moody's Cuts Ba2 Rating on Class B Cert. to Ca
SBARRO INC: Moody's Junks $150 Million Senior Unsecured Notes
SEQUOIA COMMUNITY: To Sell Assets to Clinica for $8.27 Million
SEQUOIA COMMUNITY: Final Hearing on $2MM DIP Financing on Aug. 27
SHAWN SOHRABIAN: Court Okays Tyler Bartl as Bankruptcy Counsel
STAMFORF CENTER: Case Summary & 20 Largest Unsecured Creditors
SHOE PAVILION: Trading Halted, Faces Nasdaq Delisting
SONIC AUTOMOTIVE: S&P Keeps BB- on Worsening Economic Conditions
SOUTHWEST WAFFLES: Files for Bankruptcy Under Chapter 11
SOUTHEAST WAFFLES: Case Summary & 20 Largest Unsecured Creditors
SRAM CORPORATION: Moody's Rates $265MM Senior Secured Loan Ba3
SRAM LLC: S&P Assigns 'B' Corp. Credit Rating; Stable Outlook
STANDARD PACIFIC: Fitch Affirms Issuer Default Rating at B-
STRUCTURED ASSETS: Moody's Puts Low-B Class B4 Cert. on Review
TEXAS HEMATOLOGY: Voluntary Chapter 11 Case Summary
TOPAZ POWER: Moody's Rates First Lien Credit Facility Ba3
TOUSA INC: Panel Cuts Ties with Jefferies, Seeks Payment of Fees
TOUSA INC: Panel Taps Moelis to Replace Jefferies as Advisors
TRANSAX INT'L: June 30 Balance Sheet Upside-Down by $3,479,528
TRIBUNE CO: Fitch Lowers IDR to 'CCC' from B-; Outlook Negative
TRICOM SA: Court Extends Plan Solicitation Period to December 31
TRICOM SA: Court Adjourns Plan Status Conference to September 11
TRICOM: Bancredit Insists Debtor Waived Attorney-Client Privelege
TRIPLE CROWN: Trading Halted, Faces Nasdaq Delisting
TRONOX INC: Raises Bankruptcy Sceptre, Rothschild on Board
TRONOX INC: Moody's Junks Senior Unsecured Regular Bond
TROPICANA ENTERTAINMENT: Continues to Market Casino Aztar Assets
TRUMAN CAPITAL: Moody's Junks Two Class B Certificates
URIELS INC: Court Okays John Berman as Bankruptcy Counsel
URIELS INC: Court Okays Onsager Staelin as Bankruptcy Co-counsel
VERMEER FUNDING: Fitch Ratings Junks $15.7 Million Class C Notes
VERTIS COMMS: Court Confirms Prepackaged Chapter 11 Plan
WATERFORD GAMING: Moody's Rates B1 on Senior Unsecured Notes
WCI COMMUNITIES: Section 341(a) Meeting Set for September 10
WCI COMMUNITIES: Taps FTI Consulting as Restructuring Advisors
WESTERN NONWOVENS: Sells All Assets to Sylvan for $11.2 Million
WHITEHALL JEWELERS: Sells 17 Stores to Michael Hill for $5MM
WM BOLTHOUSE: Limited Covenant Cushion Cues S&P to Hold 'B'
WORLD HEART: Consolidates Operations, Eliminates Five Positions
X-RITE INC: Inks Forbearance, New Lender Deal to Reduce Debt
X-RITE INC: S&P Revises 'CCC+' Rating to Watch Pos on Lender Deal
ZAIO CORP: Net Loss Lowers to $1.8MM in Quarter ended June 30
* S&P Junks Ratings on 63 Subprime RMBS Deals After Write-Downs
* S&P Cuts 453 U.S. Subprime RMBS Ratings on Revised Assumptions
* Experts See Second Bankruptcies for Auto Parts Makers
* Record High Bankruptcies Seen as Filings Continue to Increase
* Duanne Morris Slimming Down; To Cut Nonlawyer Jobs
* Upcoming Meetings, Conferences and Seminars
*********
530 WEST: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: 530 West 28th St., LP
dba Mansion
dba Pink Elephant
fdba Crobar
fdba Studio Mezmore
530 West 28th St.
New York, NY 10001
Bankruptcy Case No.: 08-13266
Chapter 11 Petition Date: August 21, 2008
Court: Southern District of New York (Manhattan)
Debtor's Counsel: John H. Hall, Jr., Esq.
Email: jhall@shaw-licitra.com
Shaw, Licitra, Gulotta & Esernio, P.C.
1050 Franklin Ave.
Garden City, NY 11530
Tel: (516) 742-0610
Fax: (516) 742-2670
http://www.shaw-licitra.com/
Estimated Assets: $1,000,000 to $10,000,000
Estimated Debts: $1,000,000 to $10,000,000
A copy of 530 West 28th St., LP's petition is available for free
at http://bankrupt.com/misc/nysb08-13266.pdf
ALPINE SECURITIZATION: DBRS Places $76MM Liquidity Facility at BB
-----------------------------------------------------------------
DBRS confirmed the rating of R-1 (high) for the Commercial Paper
issued by Alpine Securitization Corp., an asset-backed commercial
paper vehicle administered by Credit Suisse, New York branch. In
addition, DBRS has confirmed the ratings and revised the tranche
sizes of the aggregate liquidity facilities provided to Alpine by
Credit Suisse.
The $14,312,338,188 aggregate liquidity facilities are tranched
as:
-- $13,885,973,634 rated AAA
-- $127,162,262 rated AA
-- $74,544,382 rated A
-- $99,807,090 rated BBB
-- $76,531,507 rated BB
-- $32,633,992 rated B
-- $15,685,321 unrated
The ratings are based on April 30, 2008, data.
The CP rating reflects the AAA credit quality of Alpines asset
portfolio. The updated credit quality aspect of the CP rating is
based on both the portfolio of assets and the available program-
wide credit enhancement. The rationale for the CP rating is based
on the updated AAA credit quality assessment well as DBRSs prior
and ongoing review of legal, operational and liquidity risks
associated with Alpines overall risk profile.
The ratings assigned to the Liquidity reflect the credit quality
of Alpines asset portfolio based on an analysis that assesses each
transaction to a term standard. The tranching of the Liquidity
reflects the credit risk of the portfolio at each rating level.
The tranche sizes are expected to vary each month based on changes
in portfolio composition.
For Alpine, both the CP and the Liquidity ratings utilize DBRSs
simulation methodology, which was developed to analyze diverse
ABCP conduit portfolios. This analysis uses the DBRS CDO Toolbox
simulation model, with adjustments to reflect the unique structure
of an ABCP conduit and its underlying assets. DBRS models the
portfolio based on key inputs such as asset credit quality, asset
tenors, correlations and recovery rates.
DBRS models the portfolio on an ongoing basis to reflect changes
in Alpines portfolio composition and credit quality. The rating
results are updated and posted on the DBRS website.
AMERICAN COLOR: Court Confirms Prepackaged Chapter 11 Plan
----------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware confirmed a prepackaged Chapter 11 plan
of reorganization filed by American Color Graphics. He also
confirmed Vertis Communication's reorganization plan.
American Color expects to emerge from its pre-packaged chapter 11
within 10-20 days, at which time it will complete a planned merger
with Vertis Communications. Both companies filed pre-packaged
reorganization plans on July 15, 2008 to implement the merger.
"During this restructuring, American Color has continued business
as usual, meeting all of our obligations to our vendors, employees
and customers," said Steve Dyott, Chairman and CEO of American
Color. "We are extremely pleased with our progress toward a
merger with Vertis. The combined company will be able to offer
customers a broader range of capabilities, production options and
innovative solutions."
Voluntary reorganization undertaken by the two companies will
reduce the combined company's debt obligations by approximately
$1 billion before transaction fees and expenses. The noteholders
of American Color and Vertis will exchange their notes for an
aggregate of $550 million in new notes and substantially all of
the equity in the new, combined company.
At exit, American Color will have access to a $250 million Senior
Secured Revolving Credit exit facility from GE Commercial Finance
and a $400 million exit facility from Morgan Stanley Senior
Funding, Inc., as lead arranger, to satisfy obligations under the
prepackaged plan.
"The successful completion of our restructuring would not have
been possible in such a short time without the dedication and
support of our employees. We extend our heartfelt thanks to all of
them for their continuing commitment to providing our customers
with the high levels of quality and service they have come to
expect from us. We also appreciate that our customers, suppliers,
bondholders, and others have supported us in this vision," said
Mr. Dyott.
"[Tues]day's action brings us one step closer to realizing the
benefits of merging our two great companies. We look forward to a
bright future, better positioned to meet the challenges facing our
industry, with greater financial strength and new resources,"
concluded Mr. Dyott.
About Vertis Holdings Inc.
Headquartered in Baltimore, Maryland, Vertis Holdings, Inc. --
http://www.vertisinc.com/-- is a provider of targeted print
advertising and direct marketing solutions to America's retail and
consumer services companies.
The company and its six affiliates filed for Chapter 11 protection
on July 15, 2008 (Bank.D.Del. Case No. 08-11460). Gary T.
Holtzer, Esq. and Stephen A. Youngman, Esq. at Weil, Gotshal &
Manges LLP represent as the Debtors lead counsels and Mark D.
Collins, Esq. and Michael Joseph Merchant, Esq. at Richards Layton
& Finger, P.A. represent as their Delaware local counsels. Lazard
Freres & Co. LLC is the company's financial advisors. When the
Debtors filed for protection from their creditors they listed
estimated assets between $500 million and $1 billion and estimated
debts of more than 1 billion.
About American Color Graphics
American Color Graphics Inc. -- http://www.americancolor.com/--
is one of North America's largest and most experienced full
service premedia and print companies, with eight print locations
across the continent, six regional premedia centers, photography
studios nationwide and a growing roster of customer managed
service sites. The company provides solutions and services such
as asset management, photography, and digital workflow solutions
that improve the effectiveness of advertising and drive revenues
for their customers.
The company filed and its four affiliates filed for Chapter 11
protection on July 15, 2008 (Bank.D.Del. Case No. 08-11467).
Pauline K. Morgan, Esq. and Sean T. Greecher ,Esq., at Young,
Conaway, Stargatt & Taylor represent the Debtors in their
restructuring efforts. Lehman Brothers, Inc. serves as the
company's financial advisors. When the Debtors filed for
protection from their creditors they listed estimated assets
$100 million to $500 million and estimated debts of $500 million
to $1 billion.
ACG Holdings, Inc. and American Color Graphics also filed
bankruptcy petition under the Companies' Creditors Arrangement Act
before the Ontario Superior Court of Justice (Commercial List) on
July 16, 2008. Jay A. Carfagnini, Esq., David B. Bish, Esq., and
Jason Wadden, Esq. at Goodmans LLP are their solicitors.
PricewaterhouseCoopers Inc. serves as their CCAA Information
Officer.
AMERICAST TECH: S&P Puts 'B' on Watch Positive on Bradken Deal
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on AmeriCast
Technologies Inc., including the 'B' corporate credit rating, on
CreditWatch with positive implications, following the announcement
that unrated Bradken Ltd. acquired the company in a transaction
valued at about $288 million, including the assumption of debt.
"With the closing of the acquisition, AmeriCast is now a wholly
owned subsidiary of Bradken and could benefit from inclusion in a
larger consolidated entity," said Standard & Poor's credit analyst
Sarah Wyeth. However, the strategic importance of AmeriCast to
Bradken is unclear, and therefore the effect on AmeriCast's
outstanding debtholders remains uncertain.
S&P will resolve the CreditWatch as more details become available.
ARIZANT INC: Moody's Rates $140MM Sr. Secured Facility B1
---------------------------------------------------------
Moody's upgraded the Corporate Family Rating of Arizant Inc. to B1
from B2. Moody's also raised the ratings on the senior secured
credit facility to B1 from B2 and the Probability of Default
Rating to B2 from B3. The outlook is stable.
Ratings Revised:
Corporate Family Rating, to B1 from B2
-- $20 million senior secured revolving credit facility due July
2009, to B1, LGD3, 33% from B2, LGD3, 35%
-- $120 million original issue senior secured term loan due July
2010, to B1, LGD3, 33% from B2, LGD3, 35%
-- Probability of Default Rating, to B2 from B3
The ratings outlook is stable.
The upgrade reflects the substantial improvement in financial
metrics since the company was first rated in 2004, as a result of
double-digit organic growth in revenue and EBITDA, consistent free
cash flow generation and debt repayment. The B1 rating is also
supported by Arizant's leading market position in the niche
patient warming industry and the stable, recurring revenue stream
generated from high-margin disposable products. The B1 rating is
primarily constrained by the company's small scale and limited
product diversity, which Moody's views as the most significant
credit risk to the company.
Arizant Inc., headquartered in Eden Prairie, Minnesota, is the
industry-leading maker of perioperative patient temperature
management systems including Bair Hugger therapy, the Bair
Pawspatient adjustable warming system and Ranger blood and fluid
warming product lines. The company designs, manufactures and
markets medical devices that provide innovative, practical
solutions to common medical problems. Moody's estimates that the
company generated revenues of approximately $150 million for the
twelve months ended June 30, 2008.
ASCENDIA BRANDS: U.S. Trustee Forms Creditors' Committee
--------------------------------------------------------
The United States Trustee for Region 3 appointed five members to
the Official Committee of Unsecured Creditors in the bankruptcy
case of Ascendia Brands, Inc. and its debtor-affiliates.
The members of the Committee are:
1. Coty, Inc.
Attn: Steven Danatos
2 Park Avenue
New York, NY 10016
Phone: (212) 479-4338
Fax (212) 479-4328
2. Zotos International, Inc.
Attn: Carl R. Stella
100 Tokeneke Road
Darien, CT 06820
Phone: (203) 656-7825
Fax: (203) 656-7962
3. Rand Display, Inc.
Attn: David Kauffman
3 Ethel Road, Suite 310
Edison, NJ 08817
Phone: (732) 787-2525
Fax: (732) 287-2511
4. Cognis Corporation
Attn: John Schold
5051 Estecreek Drive
Cincinnati, OH 45232
Phone: (513) 482-3157
Fax: (513) 482-5574
5. DeW olf Chemical Company, Inc.
Attn: Henry DeW olf III
400 Massasoit Avenue
East Providence, RI 02914
Phone: (401) 434-3515
Fax: (401) 434-5306
Official creditors' committees have the right to employ legal
and accounting professionals and financial advisors, at the
Debtors' expense. They may investigate the Debtors' business and
financial affairs. Importantly, official committees serve as
fiduciaries to the general population of creditors they represent.
Those committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
About Ascendia Brands
Headquartered in Hamilton, New Jersey, Ascendia Brands, Inc. --
http://www.ascendiabrands.com/-- makes and sells branded consumer
products primarily in North America and over 80 countries as well.
The company's customers include Walmart, Walgreens, Kmart, Meijer
Stores, Target, and CVS. The company and six of its affiliates
filed for Chapter 11 protection on Aug. 5, 2008 (Bankr. D. Del.
Lead Case No. 08-11787). M. Blake Cleary, Esq., at Young,
Conaway, Stargatt & Taylor, represents the Debtors in their
restructuring efforts. The Debtors selected Epiq Bankruptcy
Solutions LLC as their claims agent. When the Debtors filed for
protection against their creditors, they listed total assets of
$194,800,000 and total total debts of $279,000,000.
BASIS YIELD: Some $23MM to be Returned to Investors, Report Says
----------------------------------------------------------------
The New South Wales Supreme Court in Sydney, Australia, on
July 28, 2008, determined that Basis Capital Funds Management
Ltd., is obliged to return the application monies received by its
two funds, Basis Yield Fund (Master) and Basis Aust-Rim
Diversified Fund, to investors who applied for units at the Funds
in June 2007.
According to MoneyManagement.com, the Wales Supreme Court's
judgment means that more than $23,000,000 will be returned to
investors.
In March 2008, Basis Capital commenced proceedings before the
Wales Supreme to seek declarations with respect to the treatment
of application monies received by Basis Yield Fund and Basis
Aust-Rim Diversified Fund, and the payment of redemptions for the
June 2007 quarter.
The Wales Supreme Court also determined that the June 2007
Redeemers are creditors of the Funds in respect of their
redemption request for July 2, 2007, and that Basis Capital would
be acting in compliance with its duties in calculating redemption
proceeds based on the Net Asset Value at June 30, 2007.
Chris Freeman, head of BT Wrap at BT Financial Group, described
the Wales Supreme Court's ruling as "great news for investors in
the funds, who have been waiting for over a year for clarity and
certainty on the status of their application monies,"
MoneyManagement.com said. BT Financial Group agreed to act as
the representative defendant for all investors who made
applications in June 2007, as well as to provide input into the
case for other representative defendants.
In March 2008, counsel for Grant Thornton, the official liquidator
of Cayman Islands-based Basis Yield Alpha Master Fund, said it is
considering whether it has any claim in respect of the Application
Monies held on behalf of Basis Yield Fund. Grant Thornton,
however, immediately sent a written confirmation to Basis Capital
that it will not be making any claim in respect of the Application
Monies and that, without reservation, it will not seek to
intervene in the Proceedings.
Basis Capital, in a letter sent to investors, said it will take
steps to return the Application Monies to the June Applicants and
will calculate the redemption proceeds to which the June
Redeemers are entitled. With respect to the position of the June
Redeemers, Basis Capital noted that payment of the redemption
proceeds to the June Redeemers is dependent on sufficient assets
being available to the Funds to make those payments. Basis
Capital said that the June Redeemers will rank as creditors ahead
of unitholders in the relevant Fund.
In its letter to investors, Basis Capital noted that the Wales
Supreme Court made no order as to costs but Basis Capital is
hopeful that the appointment of a single representative defendant
for each of the June Applicants, June Redeemers and the
unitholders in each of the Funds is the outcome most likely to
minimize costs in the proceedings.
In addition, Basis Capital informed investors that it continues
to assist the directors and Joint Official Liquidators of the
Alpha Fund with a view to maximizing any potential future returns
to shareholders in the Alpha Fund and the Yield Fund.
About Basis Yield
Basis Yield Alpha Fund (Master) is a Cayman Islands mutual fund.
It operates as a master-feeder structure that allows investors'
funds to be channeled through two companies operating in a
single jurisdiction to a "master" company operating in the same
jurisdiction. These two feeder funds are Basis Yield Alpha Fund
(US), a US feeder fund for US taxable investors, and Basis Yield
Alpha Fund, a non-US feeder for all other investors.
On Aug. 29, 2007, Hugh Dickson, Stephen John Akers, and Paul
Andrew Billingham filed a chapter 15 petition for Basis Yield
(Bankr. S.D.N.Y. Case No. 07-12762). Karen Dine, Esq. at
Pillsbury Winthrop Shaw Pittman LLP represents the petitioners.
The U.S. Bankruptcy Court dismissed Basis Yield's Chapter 15 case
on April 30, 2008.
(Basis Yield Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or
215/945-7000).
BASIS YIELD: Capital Discloses First Quarter 2008 Market Summary
----------------------------------------------------------------
Basis Capital Funds Management Ltd., in its First Quarter 2008
Market Summary, noted that the first quarter of 2008 was "one of
the worst in the last decades for the performance of equities,
credit markets and hedge funds globally; amidst what amounted to
the nearest thing to a full blown collapse of the banking
system." Particularly, the Market Summary noted that banks
stopped trusting each other and there were widespread fears that
the U.S. economy is already in recession, which dominated
investor concerns.
Basis Capital said that throughout the first quarter of 2008,
Basis Aust-Rim Diversified Fund's strategy continued to focus on
reducing portfolio risk and increasing liquidity amidst trading
conditions that remain difficult. Consequently, the Diversified
Fund has:
-- sold from the portfolio in excess of $100,000,000 of Asian
and global securities;
-- reduced net leverage on the portfolio to less than one
times net asset value; and
-- maintained a policy of marking to market CDO assets on a
monthly basis, despite major disruptions in credit markets.
Basis Capital noted that from a performance attribution
perspective and despite dislocated trading conditions and ongoing
portfolio risk reduction, the Diversified Fund's more liquid and
Asian high yield strategies continued to maintain capital.
However, amidst the market's ongoing repricing of risk-based
assets, the Diversified Fund's CDO investments continued to drag
down overall portfolio performance.
As a result of the unprecedented and escalating dislocation in
the Structured Credit space, which makes up a material part of
the Fund's investments, the Fund's existing freeze on
applications and redemptions remains in place.
With regard to the Basis Yield Alpha Fund, Basis Capital pointed
out that it invests predominantly all of its cash into the Basis
Yield Alpha Master Fund (Master) which is currently in the hands
of Grant Thornton, the official liquidator. Consequently, no NAV
is being calculated for the Fund.
As previously reported, official liquidation proceedings began
with a hearing on December 19, 2007.
A full text copy of Basis Capital's First Quarter 2008 market
summary is available for free at:
http://bankrupt.com/misc/Jan_Quarterly.pdf
About Basis Yield
Basis Yield Alpha Fund (Master) is a Cayman Islands mutual fund.
It operates as a master-feeder structure that allows investors'
funds to be channeled through two companies operating in a
single jurisdiction to a "master" company operating in the same
jurisdiction. These two feeder funds are Basis Yield Alpha Fund
(US), a US feeder fund for US taxable investors, and Basis Yield
Alpha Fund, a non-US feeder for all other investors.
On Aug. 29, 2007, Hugh Dickson, Stephen John Akers, and Paul
Andrew Billingham filed a chapter 15 petition for Basis Yield
(Bankr. S.D.N.Y. Case No. 07-12762). Karen Dine, Esq. at
Pillsbury Winthrop Shaw Pittman LLP represents the petitioners.
The U.S. Bankruptcy Court dismissed Basis Yield's Chapter 15 case
on April 30, 2008.
(Basis Yield Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or
215/945-7000).
BEARD COMPANY: June 30 Balance Sheet Upside-Down by $6,805,000
--------------------------------------------------------------
The Beard Company's consolidated balance sheet at June 30, 2008,
showed $2,301,000 in total assets and $9,106,000 in total
liabilities, resulting in a $6,805,000 total shareholders'
deficit.
At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $1,300,000 in total current assets
available to pay $3,154,000 in total current liabilities.
The company reported a net loss of $516,000 on revenues of
$373,000 for the second quarter ended June 30, 2008, compared with
a net loss of $611,000 on revenues of $330,000 in the same period
last year.
Continuing operations posted a net loss of $283,000 compared to
$333,000 for the same period in 2007.
Financial results also included losses of $233,000 from
discontinued operations for the second quarter of 2008 compared to
$278,000 for the same period in 2007, as a result of the
discontinuance of three of the company's segments.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?311c
Going Concern Doubt
As reported in the Troubled Company Reporter on April 23, 2008,
Cole & Reed, P.C., in Oklahoma City, expressed substantial doubt
about The Beard Company's ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2007, and 2006. Cole & Reed pointed to
the company's recurring losses and negative cash flows from
operations.
About The Beard Company
Based in Oklahoma City, The Beard Company (OTC BB: BRCO)
http://www.beardco.com/-- through its subsidiaries, is
principally engaged in coal reclamation in the United States.
It operates in four segments: Coal Reclamation, Carbon Dioxide,
e-Commerce, and Oil and Gas.
BLUE HERON IX: Fitch Junks $85MM Class B Notes, Removes from RWN
----------------------------------------------------------------
Fitch downgrades the rating of one class of notes, and affirms the
rating of the certificates issued by Blue Heron Funding IX Ltd.
These rating actions are effective immediately:
-- $85,000,000 class B notes downgraded to 'C' from 'A-' and
removed from rating watch negative;
-- $5,000,000 certificates affirmed at 'AAA'.
The class A notes have been paid-in-full.
Fitch's rating actions reflect the significant collateral
deterioration within the portfolio, specifically subprime
residential mortgage-backed securities, alternative-A RMBS, and
structured finance, collateralized debt obligations with
underlying exposure to subprime RMBS.
Blue Heron IX is a CDO that closed Feb. 25, 2004 and is managed by
Westdeutsche Landesbank Girozentrale, New York Branch. Currently,
30.5% of the $914 million portfolio is comprised of commercial
mortgage-backed securities, 29.3% consists of U.S. subprime RMBS,
15% consists of CDOs containing non-SF portfolios, 13.2% consists
of U.S. Alt-A RMBS, and 10.3% consists of U.S. SF CDOs with
underlying exposure to subprime RMBS. The remaining 1.7% of the
portfolio consists of asset-backed securities and prime RMBS
assets.
The rating of the class A notes was originally directly tied to
the short-term rating of WestLB, as counterparty to the put option
agreement entered into between itself and Blue Heron IX. These
notes were paid-in-full in February 2008 when the put option was
exercised and subsequently terminated, causing the class A notes
to be sold to WestLB and for new class A purchased notes, in the
same notional amount, to be issued. Fitch does not rate the class
A purchased notes
Since April 17, 2007, approximately 23.0% of the portfolio has
been downgraded with 12.7% of the portfolio currently on Rating
Watch Negative. Of the portfolio, 10.2% is now rated below
investment grade, of which 8.2% is rated 'CCC+' and below, which
is in excess of Fitch's calculated credit enhancement for the
class B notes of approximately 0.9%. The negative credit
migration experienced since the last review on April 17, 2007, has
resulted in the Weighted Average Rating Factor deteriorating to
3.35 from 0.46, breaching its covenant of 0.50, as of the July 18,
2008, trustee report.
The collateral deterioration has caused both of the
overcollateralization ratios to fail their respective test levels.
As of the trustee report dated July 18, 2008, the class A OC ratio
was 100.4% versus a test level of 104.0% and the class B OC ratio
was 93% versus a covenant of 100%. As a result of the class A OC
test failure, the transaction is making all distributions of
principal and interest to only the class A purchased notes.
Payment of interest to the class B notes is currently being
deferred.
Additionally, due to the termination of the put agreement, the
newly created class A purchased notes now receive an interest
coupon of LIBOR + 0.70% compared to LIBOR + 0.03% before the
termination of the put agreement. The higher spread requirement
has contributed to an interest shortfall on the May 2008 payment
date. As a result, principal proceeds were used to help fulfill
interest requirements of the classes A purchased notes on that
date. The use of principal proceeds to pay interest further
reduces the amount of proceeds available to the notes,
particularly the class B notes. As a result, Fitch expects
minimal future distributions to the class B noteholders.
The certificates are affirmed at 'AAA', as their principal balance
is protected by $5 million par value zero-coupon bonds issued by
Resolution Funding Corporation, which is backed by the U.S.
Government. As per the terms of the transaction, the senior
noteholders, the asset manager, the hedge counterparties, or any
other party other than the certificateholders, have no claim
against the certificate protection asset.
The rating of the class B notes and the certificates address the
likelihood that investors will receive the stated balance of
principal by the legal final maturity date.
Fitch is reviewing its SF CDO approach and will comment separately
on any changes and potential rating impact at a later date. Fitch
will continue to monitor and review this transaction for future
rating adjustments.
BUI INC: Case Summary & 60 Largest Unsecured Creditors
------------------------------------------------------
Lead Debtor: Bui, Inc.
1623 6th Ave.
Des Moines, IA 50314
dba Des Moines Asian Foods
Bankruptcy Case No.: 08-03215
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Thom Bui 08-03216
dba Bui, Inc.
dba Des Moines Asian Foods
dba BMV Properties, LLC
BMV Properties, LLC 08-03217
Chapter 11 Petition Date: August 21, 2008
Court: Southern District of Iowa
Debtors' Counsel: Jeffrey D. Goetz, Esq.
Email: bankruptcyefile@bradshawlaw.com
801 Grand Ave., Ste. 3700
Des Moines, IA 50309-8004
Tel: (515) 246-5817
Fax: (515) 246-5808
http://www.bradshawlaw.com/
Estimated Assets: $1,000,000 to $10,000,000
Estimated Debts: $1,000,000 to $10,000,000
A. A copy of Bui, Inc.'s petition is available for free at:
http://bankrupt.com/misc/iasb08-03215.pdf
B. A copy of Thom Bui's petition is available for free at:
http://bankrupt.com/misc/iasb08-03216.pdf
C. A copy of BMV Properties, LLC's petition is available for free
at:
http://bankrupt.com/misc/iasb08-03217.pdf
BUILDING COMMERCIAL: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Building Commercial Arizona, L.L.C.
PO Box 4756
Mesa, AZ 85211
Bankruptcy Case No.: 08-11065
Type of Business: The Debtor operates a real estate business.
Chapter 11 Petition Date: August 25, 2008
Court: District of Arizona (Phoenix)
Debtor's Counsel: J. Kent Mackinlay, Esq.
Warnock, Mackinlay & Associates, PLLC
1019 S. Stapley Drive
Mesa, AZ 85204
Tel: (480) 898-9239
Fax: (480) 833-2175
Email: kmackinlay@qwest.net
Estimated Assets: $1 million to $ 100 million
Estimated Debts: $1 million to $ 100 million
The Debtor did not file a list of its 20 Largest Unsecured
Creditors.
CADENCE INNOVATION: Files for Bankruptcy Protection in Delaware
---------------------------------------------------------------
Cadence Innovation LLC filed voluntary petitions under Chapter 11
of the United States Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware.
Bloomberg News relates that Cadence's subsidiary, New Venture Real
Estate Holdings LLC, also filed for bankruptcy.
The company blamed (i) the faltering economy and the increased
cost of fuel that has severely impacted the US automotive
industry, (ii) the declining OEM production volumes and
significant changes in vehicle segment mix in the US that have
reduced the company's revenues during a period of rapidly
increasing materials costs, and (iii) the combination of sky-
rocketing material costs and quickly deteriorating revenue.
Cadence's US-based operations consist of six active manufacturing
plants plus various support facilities, all located in Michigan
and Indiana. All of the company's European operations are
excluded from this restructuring.
According to Reuters, the company listed assets of between
$10 million and $50 million, and debts of between $100 million and
$500 million.
The Detroit News reports that the company owes $9.9 million in
loan to Chrysler LLC. Its largest investors are Ventura Blocker
Inc. and Ron Burkle's Yucaipa Co., the report says.
"The cause and effect in this situation is obvious and the cause
is a clear set of external factors -- collapsing revenue and
material costs increasing at double digit rates. The Cadence team
has managed the internal issues exceptionally, and in most cases,
we were prepared in advance of the next OEM plant shutdown or
price increase from our supply base.
"We find the need to file for bankruptcy protection as a dreadful
development, particularly given the commendable efforts of our
workforce and the many sacrifices the Cadence Innovation team has
made. The reality is that this groundswell of external factors
and environmental change exceeds the flexibility of our business
model," said Jerry Mosingo, President and Chief Executive Officer
of Cadence Innovation.
During the process, Cadence Innovation expects to maintain current
staffing levels at its plants and support facilities and will fund
ongoing operations from debtor-in-possession financing that is
being used to supplement its working capital.
This is a planned and voluntary Chapter 11 filing and as such the
company does not expect any disruption to the flow of product to
our customer base. "From day one, we have always prioritized the
welfare of our employees and the quality and delivery needs of our
customers. We will continue to manage the company in that
fashion," said Mr. Mosingo.
Cadence Innovation is actively engaged in an effort to divest
both its North American and European based operations and these
activities will continue as it moves through Chapter 11. While
the bankruptcy filing process under Chapter 11 has a defined path
and finite timeline, the divestiture process is not as
predictable. As a result, the company cannot comment on the
likely, or potential, end-state of the company.
About Cadence Innovation
Headquartered in Troy, Michigan, Cadence Innovation LLC --
http://www.cadenceinnovation.com/-- manufactures and sells auto
parts to its customers GM and Chrysler. The company has at least
4,200 employees in the United States and Europe, including Hungary
and Czech Republic.
CADENCE INNOVATION: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Cadence Innovation LLC,
977 E 14 Mile
Troy, MI 48083
http://www.cadenceinnovation.com/
Bankruptcy Case No.: 08-11973
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No.
------ --------
New Venture Real Estate Holdings, LLC 08-11974
977 E 14 Mile Road
Troy, MI 48083
Type of Business: Cadence is an automotive supplier, offering
design, engineering, manufacturing, and
assembly/sequencing solutions for interior and
exterior components, systems and modules.
The company has approximately 4,200 employees in
the United States, Hungary and the Czech
Republic and supplies its products and services
to automotive manufacturers around the world.
Chapter 11 Petition Date: August 26, 2008
Court: District of Delaware
Judge: Kevin Gross
Debtors' Counsel: Norman L. Pernick, Esq.
(bankruptcy@coleschotz.com)
Patrick J. Reilley, Esq.
(preilley@coleschotz.com)
Cole, Schotz, Meisel, Forman & Leonard,
1000 N. West Street, Suite 1200
Wilmington, DE 19801
Tel: (302) 295-4829
Fax: (302) 652-3117
Special Corporate Counsel: Katten Muchin Rosenman LLP
Special Automotive and Litigation Counsel: Butzel Long
Investment Bankers: Rothschild Inc.
Claims Agent: Kurtzman Carson Consultants LLC
Estimated Assets: $10 million to $50 million
Estimated Debts: $100 million to $500 million
Debtors' Consolidated List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Chrysler LLC
Attention: Doug Doran
CIMS 484 01 10
Auburn Hills, MI 48326 Money Lent $9,932,698
Ventra c/o CoAmerica Bank Trade $2,374,368
Attn: Kim Boyer
Mail Code
411 West Lafayette
Detroit, MI 48275-3328
Recticel Interiors North Trade $1,426,734
America, LLC
5600 Bow Pointe Drive
Clarkson, MI 48346
Bayer Material Science Trade $1,396,808
P.O. Box 223105
Pittsburgh, PA 15251-2105
Blakhawk Automotive Plastics Trade $1,034,574
Salem Division
1159 Paysphere Circle
Chicago, IL 60674
Exxon Mobil Chemical Trade $861,119
P.O. Box 371127M
Pittsburgh, PA 15251
Summit Polymers Trade $680,121
6715 South Sprinkle Road
Portage, MI 49002
O'Sullivan Films, Inc. Trade $669,324
1310 Paysphere Circle
Chicago, IL 60674
Unique Fabricating Trade $556,752
800 Standard Parkway
Auburn Hills, MI 48326
Michigan Department of Treasury Tax $533,217
Department 78172
P.O. Box 78000
Detroit, MI 48278-0172
ADAC Plastics Trade $502,628
P.O. Box 888375
Grand Rapids, MI 49588-8375
Michigan Staffing LLC Trade $432,471
29400 Van Dyke, Suite 222
Warren, MI 48093
Coastal Container Trade $416,747
c/o Vericorr Packaging
1210 Industrial Avenue
Holland, MI 49423
City of Fraser Tax $408,908
P.O. Box 26032
Fraser, MI 48026
Emhart Technologies Inc. Trade $396,701
12337 Collections Center Drive
Chicago, Il 60693
Anchor Bay Trade $373,013
30905 23 Mile Road
New Baltimore, MI 48047
Mico Industries, Inc. Trade $364,403
1425 Burlingame Avenue SW
Grand Rapids, MI 49509
Charter Two of Chesterfield Tax $353,837
Pamela R. Harris, Treasurer
47275 Sugarbush Road
Chesterfield, MI 48047
Dow Chemical Company Trade $205,362
7719 Collection Center Drive
Chicago, IL 60693
City of Troy Tax $199,823
500 West Big Beaver Road
Troy, MI 48084
CARDIAC MANAGEMENT: Wants to Hire Two Firms as Special Counsel
--------------------------------------------------------------
Cardiac Management Systems, Inc. and its debtor-affiliates asked
the U.S. Bankruptcy Court for the Southern District of Florida for
permission to employ special counsel.
The Debtors want to employ:
a. Alan L. Landsberg, Esq., at Bunnell Woulfe Kirschbaum Keller
& Gregoire, P.A., to represent Cardiac Management and Gables
Diagnostic Testing Group, Inc. in the seeking recovery of
uninsured damages above the amounts paid by Travelers
Indemnity Company of Connecticut and Travelers Property
Casualty of America on their insurance policies. The
Debtors are seeking $2,529,276 in damages resulting from a
leak in a water-flow meter for an MRI machine at the
Debtors' Coral Gables location.
Under the terms of the employment, the Debtors are
responsible for costs above a $15,000 retainer, already
posted, and a fee of 40% of the recovery, as well as $10,000
fee already paid.
b. Steven A. Weinberg, Esq., at Frank Weinberg & Black, P.L. to
provide consulting and advice regarding potential non-
bankruptcy litigation claims by the Debtors against third
parties, including prompt-payment statutory causes of action
and any insurace claims; malpractice claims review; tax law
issues; day-to-day garnishment and subpoena responses, among
others.
The Debtors related that with nearly 200 employees, they
have no in-house counsel. The firm has served as general
counsel for the Debtors for many years.
The firm is owed $352,421 for prepetition services, a claim
which the firm is waiving.
The firms can be reached at:
Alan L. Landsberg, Esq.
Bunnell Woulfe Kirschbaum Keller & Gregoire, P.A.
One Financial Plaza Suite 900, 100 Southeast Third Avenue
Fort Lauderdale, FL 33394
Steven A. Weinberg, Esq.
Frank Weinberg & Black, P.L.
7805 Southwest, 6th Court
Plantation, FL 33324-3203
Objection by the Creditors' Committee
The Official Committee of Unsecured Creditors objects to the
application to hire Mr. Landsberg the extent that it requires the
Debtors to reimburse the firm with a blank check for all costs
incurred during the prosecution of the Travelers action above the
cost retainer already paid by the Debtors.
The Landsberg application and affidavit failed to disclose the
anticipated costs that the firm will incur in prosecuting the
action against Travelers. If the action requires multiple
depositions, expert testimony, and expensive trial exhibits the
costs of the litigation could create a substantial administrative
expense claim without guarantee of any recovery for the Debtors'
creditors.
The Committee noted that the Debtors' current operations show
negative cash flow of $300,000 per month.
The Committee further contended the contingency fee and requests
that it be adjusted as: (i) a reduction of the contingency fee
from 40% to 33.3% to the extent the Debtors obtain a favorable
recovery prior to trial; and (ii) a reduction of the contingency
fee from 40% to 33.3% for any recovery exceeding $1,000,000. The
Committee asserted that the adjusted contingency fee generally
comports with the industry standard.
Hearing on the special counsel engagement request is set for
today, Aug. 26, 2008, at 1:30 p.m.
About Cardiac Management
Based in Miami, Florida, Cardiac Management Systems, Inc. and its
affiliates provide management services and medical laboratory
facilities. The company and 14 of its affiliates filed for
Chapter 11 protection on June 30, 2008 (Bankr. S.D. Fla. Lead Case
No. 08-19029). Patrick S. Scott & Associates P.A., represents the
Debtors in their restructuring efforts. D. Brett Marks, Esq., and
Eyal Berger, Esq., at Kluger, Peretz, Kaplan & Berlin, P.L.,
represent the Official Committee of Unsecured Creditors. When the
Debtors filed for protection from their creditors, they listed
estimated assets of $10 million to $50 million, and estimated
debts of $10 million to $50 million.
CARDIAC MANAGEMENT: Committee Objects to Hiring of Health Counsel
-----------------------------------------------------------------
Cardiac Management Systems, Inc. and its debtor-affiliates asked
the U.S. Bankruptcy Court for the Southern District of Florida for
permission to employ special health law counsel.
The Debtors wish to employ:
a. Anthony C. Vitale, Esq., at Anthony C. Vitale, P.A., as
special counsel to represent them in a Department of
Justice investigation into compliance with health care
billing laws, including the Stark Law and federal anti-
kickback statute.
The Debtors said that although the investigation is not in
active litigation, it may be necessary for Mr. Vitale to
engage in continuing dialogue with the government and to
advise the Debtors on any compliance issues.
The Debtors stated that Mr. Vitale bills at his standard
hourly rates, which are typical for his experience and
expertise.
b. Lee F. Lasris, Esq., at the Florida Health Law Center as
their special counsel to represent and consult on matters
involving physician contracting, Medicare reimbursement,
health law compliance issues, state and federal regulatory
matters, the preparation and review of policies and
procedures, and general healthcare contracting and as co-
counsel to Anthony Vitale, Esq.
The Debtors said they need the continuing services of Mr.
Lasris on a project-by-projec, as-needed basis. Mr. Lasris
has required the Debtors post a $2,000 retainer.
The Debtors related that the firms do not represent or hold any
interest adverse to the Debtors or to the estate.
Objection by the Creditors' Committee
The Official Committee of Unsecured Creditors said that under the
Vitale application, the Debtor stated that the DOJ action is not
in active litigation and that most of the information sought by
the government was produced last year.
The Committee noted that the Debtors have commenced an expedited
sale process which contemplates an auction of substantially all of
the Debtors' assets on Oct. 2, 2008, or less than 60 days.
The Committee asserted that in view of the liquidation of the
Debtors' assets, the employment of Mr. Vitale is completely
unnecessary and will be of no benefit to the estates. According
to the Committee, physician contracting, medicare reimbursement,
or healthlaw compliance issues can be dealt with by the Debtors'
president and chief executive officer.
The Committee argued that the employment of Messrs. Vitale and
Lasris are unnecessary luxury.
Based on a statement of financial affairs of DTG management, Inc.:
(i) Mr. Lasris and the Florida Health Law Center received a
payment in the amount of $25,000 during the 90-day preference
period; and (ii) Mr. Vitale received a payment in the amount of
$23,952.82 during the 90-day preference period, the Committee
noted. The preference payments received by Messrs. Vitale and
Lasris coupled with the Debtors' failure to disclose the
preference payments constitutes ample cause to deny their
retention.
The hearing on the special health law counsel engagement request
is set for today, Aug. 26, 2008, at 1:30 p.m.
About Cardiac Management
Based in Miami, Florida, Cardiac Management Systems, Inc. and its
affiliates provide management services and medical laboratory
facilities. The company and 14 of its affiliates filed for
Chapter 11 protection on June 30, 2008 (Bankr. S.D. Fla. Lead Case
No. 08-19029). Patrick S. Scott & Associates P.A., represents the
Debtors in their restructuring efforts. D. Brett Marks, Esq., and
Eyal Berger, Esq., at Kluger, Peretz, Kaplan & Berlin, P.L.,
represent the Official Committee of Unsecured Creditors. When the
Debtors filed for protection from their creditors, they listed
estimated assets $10 million to $50 million, and estimated debts
of $10 million to $50 million.
CARDIAC MANAGEMENT: Gets Final Nod to Tap Merrill Lynch's DIP Fund
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
gave final authority to Cardiac Management Systems, Inc. and its
debtor-affiliates to access Merrill Lynch Commercial Finance
Corp.'s postpetition financing.
Merrill Lynch Commercial is the assignee of the interest of
Merrill Lynch Business Financial Services Inc. secured by (i)
first priority security interests in the postpetition collateral,
and (ii) junior liens and security interests in the prepetition
collateral.
Merrill Lynch Commercial and the Debtors entered into a
reafirmation of a working capital management account loan and
security agreement dated July 14, 2000. The wcma loan carries
variable per annum interest of 3.5% plus one month LIBOR. The
maximum wcma line of credit is an amount equal to the lesser of
(a) $8,000,000 from July 9, 2008, through Aug. 5, 2008, and
$8,500,000 thereafter or (b) 65% of eligible customers' accounts
as shown on regular books and records.
As of the bankruptcy filing, the Debtors were liable to the lender
in respect of prepetition loans in the aggregate principal amount
of $7,471,670.
About Cardiac Management
Based in Miami, Florida, Cardiac Management Systems, Inc. and its
affiliates provide management services and medical laboratory
facilities. The company and 14 of its affiliates filed for
Chapter 11 protection on June 30, 2008 (Bankr. S.D. Fla. Lead Case
No. 08-19029). Patrick S. Scott & Associates P.A., represents the
Debtors in their restructuring efforts. D. Brett Marks, Esq., and
Eyal Berger, Esq., at Kluger, Peretz, Kaplan & Berlin, P.L.,
represent the Official Committee of Unsecured Creditors. When the
Debtors filed for protection from their creditors, they listed
estimated assets $10 million to $50 million, and estimated debts
of $10 million to $50 million.
CARDIAC MANAGEMENT: Committee May Engage Kluger Peretz as Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Cardiac
Management Systems, Inc. and its debtor-affiliates obtained
permission from the U.S. Bankruptcy Court for the Southern
District of Florida to retain Kluger, Peretz, Kaplan & Berlin,
P.L., as its counsel.
Kluger will, among others, give advice to the Committee with
respect to its powers and duties, and represent the Committee in
all proceedings before the Court.
The firm bills at these hourly rates: $115 to $180 for legal
assistants, paralegals and law clerks; $190 to $400 for
associates; $350 to $600 for members. The hourly rates of Bradley
S. Shraiberg, Esq., and D. Brett Marks, Esq., are $400.
To the best of the Committee's knowledge, the firm does represent
any interest adverse to the Debtors, the estate, or its creditors.
The firm can be reached at:
Kluger, Peretz, Kaplan & Berlin, P.L.
Seventeenth Floor, Miami Center
201 South Biscayne Boulevard
Miami, FL 33131
Tel: (305) 379-9000
Fax: (305) 379-3428
http://www.kpkb.com/
About Cardiac Management
Based in Miami, Florida, Cardiac Management Systems, Inc. and its
affiliates provide management services and medical laboratory
facilities. The company and 14 of its affiliates filed for
Chapter 11 protection on June 30, 2008 (Bankr. S.D. Fla. Lead Case
No. 08-19029). Patrick S. Scott, Esq., represents the Debtors in
their restructuring efforts. An Official Committee of Unsecured
Creditors has been appointed in this case. When the Debtors filed
for protection from their creditors, they listed estimated assets
$10 million to $50 million, and estimated debts of $10 million to
$50 million.
CHATEAU SENIOR: Organizational Meeting Set for September 4
----------------------------------------------------------
Roberta A. DeAngelis, the acting United States Trustee for Region
3, will hold an organizational meeting in the Chapter 11 cases of
Chateau Senior Services LLC and its debtor-affiliates on Sept. 4,
2008, at 10:00 a.m. at the Office of the United States Trustee,
833 Chestnut Street, Suite 501, Chapter 11 341(a) Meeting Room in
Philadelphia, Pennsylvania.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting,
and provide background information regarding the bankruptcy
cases.
Headquartered in Bryn Mawr, Pennsylvania, Chateau Senior Services,
LLC dba Brighten at Bryn Mawr provides healthcare services. The
company and its five debtor-affiliates, Ambler Senior Services,
LLC, Brighten Health Group, LLC, Church Lane Senior Services, LLC,
Julio Ribaudo Senior Services, LLC, and Winthrop House Senior
Services, LLC, filed for Chapter 11 protection on Aug. 20, 2008
(E.D. Pa. Case Nos. 08-15318 to 08-15322 and 08-15324). David B.
Smith, Esq., at Smith Giacometti, LLC, in Malvern, Pennsylvania,
represents the Debtors. When the Debtors filed for protection
from their creditors, they listed assets between $0 to $50,000 and
debts between $1 million to $10 million.
CIFG GUARANTY: S&P Cuts Rating to 'B' on Restructuring Plan Delay
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its financial strength
ratings on CIFG Guaranty, CIFG Europe, and CIFG Assurance North
America Inc. to 'B' from 'A-'. The ratings remain on CreditWatch,
with the implications changed to developing from negative.
"The downgrade is the result of delays in the company's
implementation of its restructuring plan and slow progress in its
negotiations with counterparties of its collateralized debt
obligations of asset-backed securities exposure," said Standard &
Poor's credit analyst David Veno.
If management is not successful in its negotiations to develop
strategic alternatives for problematic credits in its insured
portfolio, S&P believes the impaired financial position of the
company could lead to regulatory intervention, in which case the
rating could be further lowered. If management is successful in
its negotiations and presents a viable business strategy for the
company, the rating could be revised upward.
CIMAREX ENERGY: Moody's Raises B1 Rating on Senior Notes to Ba3
---------------------------------------------------------------
Moody's Investors Service upgraded Cimarex Energy Co.'s Corporate
Family Rating to Ba2 from Ba3, its Probability of Default Rating
to Ba2 from Ba3, and its senior unsecured notes to Ba3 from B1.
The rating outlook is stable.
Moody's analyst Andrew Oram commented that "XEC's upgrade
reflects current strong production growth trends from internal
reinvestment, sound full-cycle costs relative to the price
environment, strong liquidity, expected continued conservative
leverage policy, and historically conservative reserve recognition
policies. Though XEC is conducting a very heavy capital spending
program, by far its largest ever, the program has been funded by
cash flow."
The ratings also benefit from XEC's increased focus on lower risk
Permian Basin and Mid-Continent operations and relatively smaller
focus on shorter-lived Gulf Coast and Gulf of Mexico properties.
XEC's drilling programs historically focused on flush, quick
payout, conventional but short-lived reserves along the Texas Gulf
Coast. In addition to reducing that focus and increasing its
focus on longer lived Mid-Continent and Permian Basin conventional
properties, it has expanded into unconventional resource
properties as well.
The ratings remain restrained by moderate size, cost pressures due
to very tight drilling rig and oilfield services markets, XEC's
rapid expansion of Mid-Continent and Permian properties and
activity and the comparatively short timeframe in which it has
relied nearly exclusively on those regions to drive organic
growth, and Moody's view that strong sector natural gas production
growth relative to demand may pressure 2009 natural gas prices.
Moody's anticipates higher reserve replacement costs as XEC
acquires unproven acreage in unconventional resource plays, funds
early stage development, and digests an approximately 40% surge in
capital spending which, of necessity, may dip lower into the
quality spectrum of XEC's drilling inventory.
While the move towards unconventional plays does reduce overall
geologic risk, it does expose the company to substantial front-end
outlays for as yet non-producing acreage, substantial subsequent
capital spending and longer lead times before first production,
and the economics of such plays tend to be much more price
sensitive as well. Furthermore, given that XEC does not hedge
production, concerns about the natural gas supply and demand
balance in 2009 combined with a pattern of budgeting to spend cash
flow also expose intra-year capital programs to price and cash
flow decline. Nevertheless, XEC carries low leverage and high
liquidity to mitigate that risk.
The company intends to fund its capital program through internal
cash flow over the near term. XEC has devoted only 16% of its
capital budget to its higher risk Gulf Coast operations, versus
23% in 2006. XEC continues to seek to divest its offshore Gulf of
Mexico properties which would add further to liquidity. Moody's
believes that any stock buyback activity would be sized to fit a
conservative leverage policy. Much of XEC's previous reserve
replacement issues were associated with its Gulf Coast operations.
XEC's leverage is amongst the lowest in the high-yield E&P peer
group. The company has a moderate reserve scale, an adequately
diversified inventory of drilling locations with an adequate seven
year proved reserve life, and historically has maintained a
favorably low proportion of proven undeveloped reserves. XEC's
ratings reflect total full cycle costs in the $35 range, in line
with Ba2 peer averages. Our rating assumes XEC will continue its
conservative leverage strategy.
Cimarex Energy Co. is an independent exploration and production
company headquartered in Denver Colorado. XEC's operations are
centered in the Mid-Continent, Permian Basin, Gulf Coast and
Wyoming. XEC drilled 253 gross wells in first half 2008,
completing 94% to production. It is currently operating 39 rigs.
XEC's Permian activity is focused principally on oil horizontal
drilling plays.
CLICO LIMITED: A.M. Best Downgrades Issuer Credit Rating to BB
---------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to B
(Fair) from B+ (Good) and issuer credit rating to "bb" from "bbb-"
of CLICO (Bahamas) Limited (Nassau, Bahamas). The outlook for
both ratings is negative. CLICO Bahamas is an insurance member
company of CL Financial Limited, a diversified holding company
based in Trinidad and Tobago.
The downgrades reflect the significant exposure CLICO Bahamas has
to affiliated loans as a percentage of assets and capital, the
volatility of earnings in its international operations and its
somewhat modest market share in the Bahamas, when compared to its
competitors. CLICO Bahamas' loan to a real estate subsidiary,
which represents a concentration risk and high exposure to the
depressed Florida real estate market, has been revalued to reflect
the current market conditions. A.M. Best feels that given most of
its reserves are fixed annuities, this real estate exposure
represents a mismatch to CLICO Bahamas' liabilities. In addition,
certain of its non-Bahamas regions have produced operating losses.
CLICO Bahamas' ratings recognize its ownership by CL Financial, as
well as its overall insurance premium growth and profitability.
CLICO Bahamas benefits from being part of CL Financial by
leveraging information technology, administration, actuarial,
investment and other group resources to effect operating
efficiencies in its operations.
CMT AMERICA: Court Okays Jager Smith as Committee Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave
authority to the Official Committee of Unsecured Creditors in CMT
America Corp.'s Chapter 11 case to employ Jager Smith P.C. as its
counsel.
Jager Smith will represent the panel with respect to proposals and
pleadings submitted by the Debtor or other parties-in-interest to
the Court.
Bruce F. Smith, Esq., a partner at Jager Smith, told the Court
that the firm will charge these hourly rates:
Bruce F. Smith $525
Steven C. Reingold $375
Michael J.Fencer $325
Paralegals $105 - $175
Mr. Smith assured the Court that the firm does not represent any
interest adverse to the Debtor's estates or of any class of the
Debtor's creditors.
Headquartered in Farmington, Connecticut, CMT America Corp.,
a.k.a. Fairvane Corp. is a 70-store women's clothing retailer.
The company filed for Chapter 11 protection on July 13, 2008
(Bankr. D. Del. Case No.08-11434). Edmon L. Morton, Esq., at
Young Conaway Stargatt & Taylor, LLP, represents the Debtor in its
restructuring efforts. The Debtor selected Administar
Services Group LL as its claims agent.
When the Debtor filed for protection against its creditors, it
listed assets between $10 million and $50 million, and estimated
debts between $10 million and $50 million.
CORD BLOOD: June 30 Balance Sheet Upside-Down by $6,195,170
-----------------------------------------------------------
Cord Blood America Inc.'s consolidated balance sheet at June 30,
2008, showed $5,859,694 in total assets and $12,054,864 in total
liabilities, resulting in a $6,195,170 stockholders' deficit.
At June 30, 2008, the company's consolidated financial statements
also showed strained liquidity with $204,924 in total current
assets available to pay $12,054,864 in total current liabilities.
The company reported a net loss of $2,499,142 for the second
quarter ended June 30, 2008, compared with a net loss of
$1,758,472 in the same period last year.
For the three months ended June 30, 2008, total revenue decreased
to $1,057,262, compared to $2,345,544 in the three months ended
June 30, 2007. The decrease in total revenue primarily reflects
the 86% decrease in Rainmakers International's revenues, due to a
change in the business model.
Interest, financing costs and changes in derivative liabilities
increased from $1,463,409 to $2,341,402, mainly as a result of
additional debt which were raised to finance both the company's
acquisitions as well as operating losses.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?3139
Going Concern Doubt
Rose, Snyder & Jacobs, in Encino, Calif., expressed substantial
doubt about Cord Blood America Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditing firm
reported that the company has sustained recurring operating
losses, continues to consume cash in operating activities, and has
insufficient working capital and an accumulated deficit at
Dec. 31, 2007.
About Cord Blood
Headquartered in West Hollywood, Calif., Cord Blood America Inc.
(OTC BB: CBAI) -- http://www.cordblood-america.com/-- is an
umbilical cord blood stem cell preservation company with a
particular focus on the acquisition of customers in need of family
based products and services. The company also provides
television, radio and internet advertising services to businesses
that sell family based products and services.
The company operates two core businesses:
-- Cord Partners Inc., CorCell Co. Inc., CorCell Ltd. ("Cord")
operates the umbilical cord blood stem cell preservation
operations, and
-- Career Channel Inc. dba. Rainmakers International ("Rain")
operates the television and radio advertising operations.
COSTA BELLA: Fitch Downgrades 5 Classes, Off Rating Watch Negative
------------------------------------------------------------------
Fitch downgrades five classes of notes issued by Costa Bella CDO
Ltd./Corp. All eight classes of Costa Bella are also removed from
Rating Watch Negative. These rating actions are effective
immediately:
-- $242,029,860 Class A-1 notes downgraded to 'CCC' from 'BB-'
and removed from Rating Watch Negative;
-- $40,000,000 Class A-2 notes downgraded to 'CC' from 'B-' and
removed from Rating Watch Negative;
-- $30,000,000 Class B notes downgraded to 'CC' from 'CCC+' and
removed from Rating Watch Negative;
-- $5,000,000 Cass C notes remain at 'CC' and removed from
Rating Watch Negative;
-- $23,000,000 Cass D notes remain at 'CC' and removed from
Rating Watch Negative;
-- $18,324,647 Cass E notes remain at 'CC' and removed from
Rating Watch Negative;
-- $10,525,455 Cass F notes downgraded to 'C' from 'CC' and
removed from Rating Watch Negative;
-- $7,581,698 Cass G notes downgraded to 'C' from 'CC' and
removed from Rating Watch Negative.
Fitch's rating actions reflect the significant collateral
deterioration within the portfolio specifically in subprime
residential mortgage backed securities.
Costa Bella is a hybrid structured finance collateralized debt
obligation that closed on Dec. 1, 2006, and is managed by Pacific
Invesment Management Company LLC. Presently 84.8% of the
portfolio is comprised of U.S. subprime RMBS, 7.16% U.S.
Alternative-A RMBS, 3.7% U.S. prime RMBS, 2.2% U.S. SF CDOs, 0.6%
commercial mortgage backed securities, 0.6% manufactured housing
and 0.8% non SF collateral.
Since November 21, 2007, approximately 60.7% of the portfolio has
been downgraded with 13% of the portfolio currently on Rating
Watch Negative. Of the portfolio, 85.8% is now rated below
investment grade, with 74.8% of the portfolio rated 'CCC+' or
below. Overall, 82.1% of the assets in the portfolio now carry a
rating below the rating assumed in Fitch's November 2007 review.
Costa Bella contains no overcollateralization or interest coverage
tests, however, the transaction contains a Sequential Pay Test.
Failure of the Sequential Pay Test causes principal payments to
the notes to be made sequentially instead of on a pro rata basis.
The collateral deterioration caused the Sequential Pay ratio to
fail in October 2007 and fall below 100% for the first time in
April 2008, which caused an Event of Default to occur. The
trustee has not been instructed to accelerate the transaction.
On the June 2008 payment date, the class A-1, B, C, D and E notes
received current interest payments, although class E deferred
interest was not paid. Deferred payments of interest to the class
E, F and G notes have been made in kind by writing up the
principal balance of each class by the amount of interest owed.
To the extent the notes are not accelerated and interest proceeds
are sufficient, classes A-2, B, C, D and E notes will continue
receiving interest distributions. Fitch does not expect the class
A-2, B, C, D or E notes to receive any principal distributions in
the future. Also, although the class A-1 notes will continue to
receive interest, Fitch does not expect class A-1 to receive its
full principal. The downgrades to the rated notes reflect Fitch's
updated view of the default risk associated with each of the
notes.
Fitch is reviewing its SF CDO approach and will comment separately
on any changes and potential rating impact at a later date. Fitch
will continue to monitor and review this transaction for future
rating adjustments.
The rating of the class A-1, A-2, B and C notes addresses the
likelihood that investors will receive full and timely payments of
interest, as per the transaction's governing documents, well as
the stated balance of principal by the maturity date. The rating
of the class D, E, F and G notes addresses the likelihood that
investors will receive ultimate and compensating interest
payments, as per the transaction's governing documents, well as
the stated balance of principal by the maturity date.
CSFB MORTGAGE: Moody's Junks Class B-5 Certificate
--------------------------------------------------
Moody's Investors Service published the underlying rating on the
insured note identified below. The underlying rating reflects the
intrinsic credit quality of the notes in the absence of the
guarantee. The current rating on the below insured note is
consistent with Moody's practice of rating insured securities at
the higher of the guarantor's insurance financial strength rating
and any underlying rating that is public.
Complete rating actions are as follows:
Issuer: Credit Suisse First Boston Mortgage Securities Corp. Pass-
Through Certificates, 2002-P1
-- Cl. A, Currently Aaa
Financial Guarantor: Ambac Assurance Corporation
-- Underlying Rating: Aaa
-- Cl. B-4, Downgraded to Ba3 from Baa3
-- Cl. B-5, Downgraded to Ca from Ba2
Moody's Investors Service has also downgraded 2 non-insured
certificates from the same transaction. The transaction is backed
by first-lien adjustable-rate alt-a mortgage loans originated by
Credit Suisse. These downgrades are due to current credit
enhancement provided by subordination, overcollateralization and
excess spread being low compared to the projected pipeline losses
of the underlying pool. This transaction has currently a pool
factor below 5%. Furthermore, step-down and continuous losses
have left the deal with thin credit enhancement levels and made
certain tranches more vulnerable to pool deterioration in the tail
end of the deal's life.
DANA CORP: Reports $140MM 2Q Loss; To Cut 3,000 Jobs
----------------------------------------------------
Dana Holding Corporation (NYSE: DAN) has announced its second-
quarter 2008 results.
Second-quarter highlights include:
-- Sales of $2,333 million, a 2-percent increase compared to
2007, primarily because of currency effects;
-- Net loss of $140 million, including an $82 million non-
cash impairment charge. This compares to a net loss of
$133 million in the second quarter of 2007;
-- Earnings before interest, taxes, depreciation,
amortization, and restructuring (EBITDA) of $128 million,
compared with $143 million in 2007;
-- Strong cash balance of $1.2 billion and total liquidity
of $1.6 billion at June 30, 2008; and
-- Free cash flow of $38 million.
Dana Making Progress in Turnaround
We are making progress in our turnaround despite
unprecedented headwinds in North America," said Executive
Chairman John Devine. "The combination of much lower production
volumes and higher steel costs has put considerable pressure on
our 2008 operating results."
"But we are working to offset these challenges through
pricing, additional restructuring, and cost reductions," he
added. "And we remain focused on our game plan to turn around
Dana by rebuilding the management team, improving operations,
tightening our strategic direction, and employing a strong
balance sheet."
Added Chief Executive Officer Gary Convis, "For the near
term, we continue to scale our North American operations --
through facility consolidations and workforce reductions -- to
reflect a market that's very different than what was expected
just six months ago. This will necessitate the reduction of
approximately 3,000 positions over the course of 2008, including
the planned reduction of 500 salaried positions announced last
week. At the same time, we are experiencing modest employment
growth in the markets where our business is performing better.
"Longer term, we're picking up speed with introducing what
is essentially a new way of managing our business, manufacturing
our products, and measuring our performance worldwide," he added.
"The new Dana Operating System is already enabling our people to
drive improved product quality, customer satisfaction, and
financial performance."
Business Highlights
Total EBITDA of $128 million in the second quarter was
$15 million below 2007 results for the same period. This
primarily reflected higher steel costs of $25 million (net of
recovery actions), lower North American production of
$22 million, unfavorable currency effects of $26 million, and
reduced non-steel pricing of $6 million. These negative
developments were partially offset by cost savings of
$64 million.
At June 30, 2008, cash balances remained strong at
$1.2 billion, with available global liquidity of $1.6 billion.
Free cash flow was $38 million for the second quarter, which was
largely achieved through reduced working capital of $69 million
during the period.
Six-Month Results
Sales for the six months ended June 30, 2008 were
$4,645 million which compares to $4,434 million for the same
period in 2007. For the first six months of 2008, the company
reported net income of $545 million compared to a net loss of
$225 million for the same period in 2007. The six-month 2008
results include a net gain of $754 million recognized in
connection with the company's emergence from bankruptcy and
application of fresh start accounting in January.
EBITDA of $275 for the first six months of 2008 improved
from the $247 million for the same period in 2007, as cost
reduction actions initiated during the first half of 2008,
combined with previously achieved annual cost savings and pricing
improvements more than offset the earnings reduction attributable
to lower North American production levels and higher steel costs.
Dana will discussed its second-quarter results in a conference
call at 10 a.m. EDT, on August 7. A Webcast replay will also be
available after 5 p.m. on August 7, and may be accessed via the
Dana Investor Web site.
A copy of Dana's second-quarter 2008 results is available for free
at http://ResearchArchives.com/t/s?3140
About DANA
Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/--
designs and manufactures products for every major vehicle producer
in the world, and supplies drivetrain, chassis, structural, and
engine technologies to those companies. Dana employs 46,000
people in 28 countries. Dana is focused on being an essential
partner to automotive, commercial, and off-highway vehicle
customers, which collectively produce more than 60 million
vehicles annually.
Dana has facilities in China in the Asia-Pacific, Argentina in
the Latin-American regions and Italy in Europe.
The company and its affiliates filed for chapter 11 protection
on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of
June 30, 2008, the Debtors listed $7,482,000,000 in total debts,
resulting in $2,979,000,000 in total shareholders' deficit.
Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day,
in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represent the Debtors. Henry S. Miller at
Miller Buckfire & Co., LLC, served as the Debtors' financial
advisor and investment banker. Ted Stenger from AlixPartners
served as Dana's Chief Restructuring Officer. -- pls. delete this,
Tar, kai not applicable na.
Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel
LLP, represens the Official Committee of Unsecured Creditors.
Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel
to the Official Committee of Equity Security Holders. Stahl
Cowen Crowley, LLC served as counsel to the Official Committee
of Non-Union Retirees.
The Debtors filed their Joint Plan of Reorganization on
Aug. 31, 2007. On Oct. 23, 2007, the Court approved the
adequacy of the Disclosure Statement explaining their Plan.
Judge Burton Lifland of the U.S. Bankruptcy Court for the
Southern District of New York entered an order confirming the
Third Amended Joint Plan of Reorganization of the Debtors on
Dec. 26, 2007.
The Debtors' Third Amended Joint Plan of Reorganization was deemed
effective as of Jan. 31, 2008. Dana Corp., starting on
the Plan Effective Date, operated as Dana Holding Corporation.
DAVITA INC: Fitch Affirms BB- Issuer Default Rating
---------------------------------------------------
Fitch Ratings has affirmed DaVita Inc.'s ratings as:
-- Issuer Default Rating at 'BB-';
-- Bank credit facility at 'BB+';
-- Senior unsecured notes at 'BB-';
-- Senior subordinated notes at 'B';
The Rating Outlook is Stable.
The ratings apply to approximately $3.7 billion of debt
outstanding as of June 30, 2008.
The ratings reflect DaVita's incrementally improved financial and
operating metrics, partially offset by continued industry
pressures. Leverage (total debt/EBITDA) has declined to 3.38 times
for the last 12 months (LTM) ended June 30, 2008 from 3.62x LTM
ended June 30, 2007. This reduction was driven by an increase in
profitability with EBITDA increasing to $1.098 billion from
$1.024 billion during the same period.
The company also benefits from fairly consistent cash flow. Free
cash flow (cash flow from operations minus capital expenditures)
for the LTM ended June 30, 2008 was approximately $232 million.
Relatively reliable demand and margins combined with low fixed
costs and modest maintenance capital expenditures support the
DaVita's cash generation. Despite the company's consistent
performance, Fitch believes profitability may be pressured during
the next few years due largely to a more restrictive reimbursement
environment involving managed care pricing and selected
pharmaceuticals. On balance Fitch expects leverage to remain
consistent with the 'BB-' rating category.
In July 2008, Congress passed a bill that included the following
provisions, which further codifies Medicare's reimbursement policy
for kidney dialysis services:
-- Provides a 1% annual update to the composite rate for kidney
dialysis services in both 2009 and 2010.
-- Establishes a bundled rate for kidney dialysis by 2011 at 98%
of the baseline reimbursement with an annual update (the
market basket minus 1%) each year thereafter.
-- Establishes a quality incentive payment program for end-stage
renal disease providers.
Short term, depending on the ultimate rate employed, bundling the
rate (including EPO and other medication reimbursement) may or may
not be beneficial to dialysis providers. However, the provision
for an automatic annual inflation update, which the industry does
not currently enjoy, is a long-term economic positive for dialysis
providers. Clearly, financial incentives for quality care benefit
providers such as DaVita.
At June 30, 2008, DaVita had approximately $3.7 billion in
outstanding debt, including approximately $1.9 billion in term
loans under its secured credit facility due mostly in 2012,
$900 million of 6.625% senior notes due 2013, and $850 million of
7.25% senior subordinated notes due 2015. Liquidity comprised
$378 million in cash and short-term investments, well as
$200 million in availability on its secured revolving credit
facility, net of $50 million in outstanding letters of credit.
Fitch believes DaVita may allocate more cash to fund investments
or return value to shareholders. Pre-payments on its credit
facility, if any, are expected to be moderate.
DELPHI CORP: Highland Capital Seeks to Block $300MM Loan from GM
----------------------------------------------------------------
ABIWorld.org reports that Highland Capital Management LP wants to
stop Delphi Corp. from borrowing $300 million more from former
parent General Motors Corp. As reported by the Troubled Company
Reporter on Aug 11, 2008, General Motors Corp. will grant Delphi
Corp. an additional $300 million on top of the $650 million
already promised to help its former parts unit exit bankruptcy
protection.
The Wall Street Journal, citing court papers, said that GM may
increase its loans to its top supplier to $950 million through the
end of 2008 to reimburse Delphi for labor-related costs and other
liabilities. WSJ related that GM had agreed to assume these
liabilities under a settlement entered into during the Chapter 11
case.
The $950 million, WSJ indicated, represents a portion of the
amount GM would have paid Delphi had the supplier emerged from
Chapter 11. GM will receive a top priority claim under bankruptcy
law for the advances, WSJ notes.
About General Motors
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.
At March 31, 2008, GM's balance sheet showed total assets of
$145,741,000,000 and total debts of $186,784,000,000, resulting in
a stockholders' deficit of $41,043,000,000. Deficit, at Dec. 31,
2007, and March 31, 2007, was $37,094,000,000 and $4,558,000,000,
respectively.
General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units. GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela. GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.
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,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed $9,162,000,000
in total assets and $23,742,000,000 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. The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide $2,550,000,000 in equity financing to
Delphi.
DELTA AIR: Merger Violates Antitrust Act, Customers Allege
----------------------------------------------------------
Some 25 direct purchasers of airline tickets from Northwest
Airlines Corp. and Delta Air Lines Inc. filed a lawsuit in the
United States District Court for the Northern District of
California against the two airlines, asserting that a proposed
Northwest-Delta merger violates Section 7 of the Clayton
Antitrust Act. The ticket purchasers are:
(1) Rosemary D'Augusta
347 Madrone Street,
Millbrae, CA 94030;
(2) Carolyn Fjord
P.O. Box 73493,
Davis, CA 95617;
(3) Sharon Holmes
P.O. Box 295,
Searchlight, NY 89046;
(4) Deborah M. and Steven J.
Pulfer, 16264 E. Mason Rd.,
Sidney, OR 45365;
(5) John Lovell
1910 Breton Rd. SE,
Grand Rapids, M149506;
(6) Gabe Garavanian
40 Vinal Sq.,
No. Chelmsford, MA 01863;
(7) Jose M. Brito
100 California Ave.,
Reno, NV 89505;
(8) Sondra K. Russell
1206 N. Loop 340,
Waco, TX 76705;
(9) Annette M. Tippetts
2783 East Canyon Crest Drive,
Spanish Fork, UT 84660;
(10) Sherry Lynne Stewart
6189 Lehman Drive,
Suite 103,
Colorado Springs, CO 80918;
(11) Robert A. Rosenthal
5975 No. Academy Blvd.,
Colorado Springs, CO 80918;
(12) Lee B. and Lisa R. McCarthy
35 Lancashire Place, Naples, FL 34104;
(13) June Stansbury
690 W. 2nd Street,
Suite 100, Reno, NV 89503;
(14) Keith Dean Bradt
P.O. Box 3262,
Reno, NV 89505;
(15) Donald and Donna Fry
6740 Northrim Lane,
Colorado Springs, CO 80919;
(16) Gary Talewsky
738 Turnpike Street,
Canton, MA 02021;
(17) Diana Lynn Ultican
9039 NE Juanita Dr.,
# 102, Kirkland, WA 98034;
(18) Patricia A. Meeuwsen
1062 Wedgewood,
Plainwell, MI 49080;
(19) Robert D. Conway
6160 W. Brooks Ave.,
Las Vegas, NV 89108;
(20) Michael C. Malaney
2240 28 th St. SE,
Grand Rapids, MI 49508;
(21) Y. Jocelyn Gardner
6602-A Delmonico Dr.,
Colorado Springs, CO 80919;
(22) Clyde D. Stensrud,
1529 10th St. W., Kirkland, WA 98033;
(23) Donna M. Johnson
1864 Masters Drive,
DeSoto, TX 75115;
(24) Valarie Jolly
2121 Dogwood Loop,
Mabank, TX 75156;
(25) Pamela S. Ward
1322 Creekwood Drive,
Garland, TX 75044.
Northwest and Delta signed an agreement on April 14, 2008, in
which the two carriers will combine in an all-stock transaction
with a combined enterprise value of $17,700,00,000. The new
airline will be called Delta. The combined company will be the
largest airline in the world and its regional partners will
provide access to more than 390 destinations in 67 countries, will
have more than $35,000,000 in aggregate revenues, operate a
mainline fleet of nearly 800 aircraft, and employ approximately
75,000 people worldwide.
Section 7 of the Clayton Antitrust Act provides that one business
will not acquire another business when the effect of the
acquisition may be to substantially lessen competition or tend to
create a monopoly.
Northwest and Delta are substantial rivals and competitors in the
relevant market, Joseph M. Alioto, Esq., at Alioto Law Firm, in
San Francisco, California, noted. The behavior of each is
therefore constrained by actual and potential competition from
the other throughout the entire relevant market, he said.
The market for the transportation of airline passengers in the
United States is in, and part of, interstate commerce, Mr. Alioto
stated. Thus, any restraint of trade in the transportation of
airline passengers in the United States, directly and
substantially, restrains and affects interstate commerce, he
asserted.
According to Mr. Alioto, the Merged Airline would operate in a
more highly concentrated market. A Four Firm Concentration Ratio
-- CR4 -- which measures the aggregated market share of the
largest four firms, would increase from 60.1% to 70.1%; and
Herfindahl-Hirschman Index -- HHI -- would increase from 1,240 to
1,509, or by over 250 points. As a result, he said, the
probability of price-fixing and division of markets among the
airlines remaining after the merger would substantially increase.
Mr. Brightwell also told the District Court that based on data
from the U.S. Department of Transportation, the Merged Airline
will account for nearly one fourth of all revenue passenger miles
flown by U.S. carriers.
The potential for increased price-fixing, division of markets,
and other anti-competitive acts, among the remaining airlines is
significant, because certain domestic passenger airlines,
including, Northwest and Delta, have in the past colluded to fix
prices with regard to airfares, surcharges, and cargo prices, and
to fix other terms and conditions of air transportation and
travel, Mr. Alioto explained.
He also warned that the Merged Airline will cause harm to
consumers, including the Plaintiffs, by charging higher airfares,
reducing the number of flights, eliminating air service to
smaller communities, charging for services otherwise part of
normal service, crowding more people into existing airplanes,
and other anti-competitive and anti-consumer welfare practices.
Consumers, including the plaintiffs, will thus pay more for less
airline service than would be the case in the absence of
the Merged Airline, Mr. Alioto asserted.
Mr. Alioto maintained that the effect of the announced merger
may be substantially to lessen competition, or to tend to create
a monopoly, in the transportation of airline passengers in the
United States. By virtue of the merger, the Plaintiffs
are threatened with loss or damage in the form of higher ticket
prices and diminished service, he points out.
Accordingly, the Plaintiffs sought preliminary and permanent
injunctive relief against the merger, and asked the Court to:
-- declare, find, adjudge, and decree that the Merged Airline
violates Section 7 of the Clayton Antitrust Act;
-- preliminarily enjoin Northwest and Delta from consummating
their merger during the pendency of the Civil Action; and
(c) award to Plaintiffs their cost of suit, including a
reasonable attorney's fee.
Northwest and Delta Deny Allegations
Northwest and Delta deny most of the allegations of the
Plaintiffs, including their purported violation of the Clayton
Antitrust Act. Northwest and Delta also says that the Plaintiffs
are not entitled to the relief they seek, because their Complaint
fails to state a claim against the airlines.
The Plaintiffs lack standing to bring or maintain the claims
raised in their Complaint because they are unlikely to sustain
any cognizable antitrust injury attributable to or proximately
caused by the airlines' conduct, Michael F. Tubach, Esq., at
O'Melveny & Myers LLP, in San Francisco, California, counsel for
Northwest, stated.
Northwest and Delta have not yet obtained adequate discovery from
the Plaintiffs, but reserve their individual rights to assert any
and all applicable defenses to the Plaintiffs' claims.
The District Court will convene a hearing on the Complaint on
Nov. 10, 2008.
Parties Stipulate
Northwest, Delta and the Plaintiffs entered into a stipulation
to govern disclosure and discovery activities in relation to the
Complaint. The salient terms of the Stipulation are:
(1) Discovery material designated as "Confidential" will be
treated as confidential.
(2) For confidential information disclosed during deposition,
transcripts containing Protected Material will be
separately bound by the Court reporter and labeled
"Confidential."
(3) A party may use Protected Material produced by another
party only for prosecuting, defending or attempting to
settle the Complaint.
(4) Unless otherwise allowed by the Court or permitted by a
designating party in writing, a receiving party may only
disclose any information designated as "Confidential" to
immediate counsel of the parties involved, experts of the
Receiving Party and the District Court and its personnel.
About Northwest Airlines
Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures. Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks. Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents. Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.
The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts. The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel in the Debtors' chapter 11 cases. When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan. On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement. The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007. On May 21, 2007, the Court confirmed the
Debtors' amended plan. That amended plan took effect May 31,
2007. The Court formally closed the Chapter 11 cases of
Northwest's 12 affiliates on June 25, 2008. The Northwest Airlines
Corp. and Northwest Airlines Inc. cases remain open.
(Northwest Airlines Bankruptcy News, Issue No. 98; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
* * *
As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008. The outlook is
negative.
The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices. S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.
About Delta Air
Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners. Delta flies to
Argentina, Australia and the United Kingdom, among others.
The company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts. Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice. John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007. On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement. In April 25, 2007, the Court confirmed the
Debtors' plan. That plan became effective on April 30, 2007. The
Court entered a final decree closing 17 cases on Sept. 26, 2007.
(Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
DIABLO GRANDE: Has Until Aug. 28 to Bare Winning Bidder for Resort
------------------------------------------------------------------
Judge Robert S. Bardwil of the U.S. Bankruptcy Court for the
Eastern District of California has given the owners of Diablo
Grande until Aug. 28 to disclose the winning bidder for its resort
in western Stanislaus County, according to Tim Moran of The
Modesto Bee (Cal.). The 28,500-acre property in the hills west of
Patterson includes two championship golf courses and about 400
homes.
A hearing to consider the sale of Diablo Grande was set Aug. 19,
2008, at 9 a.m.
The asset sale was arranged after a $25 million "stalking horse"
bid plus assumption of debt with Housing Source Partners of Pismo
Beach didn't materialize. The auction set a minimum bid of $26
million.
According to the report, Judge Bardwil agreed to the continuance,
but warned the attorneys that he had problems with an agreement
regarding how the money from the sale would be distributed to
categories of creditors.
The sale process has been approved by the largest creditors,
including The Bank of Scotland, which is owed $20.6 million. It
faces objections from several smaller creditors, however. The
objectors include:
-- the Veolia Water North America West LLC, which is owed
$4.5 million, according to court documents;
-- West Stanislaus Fire District, which serves the resort,
which is owed $125,000;
-- Diablo Grande Homeowners Association Inc., which contends
it is owed more than $300,000;
-- United Rentals, which is owed an undisclosed sum for
construction equipment supplied at the site; and
-- J.S. West & Co., which wants to make sure it retains
access to propane tanks at Diablo Grande.
About Diable Grande
Patterson, California-based Diablo Grande LP owns 33,000-acre real
property and runs a resort hotel with golf courses and convention
center. Diablo Grande LP's general partner is Diablo Grande Inc.
with Donald Panoz as president. It filed for chapter 11
protection on March 10, 2008 (Bankr. E.D. Calif. Case No. 08-
90365). Judge Robert S. Bardwil is presiding the case. Ori Katz,
Esq., and Michael H. Ahrens, Esq., at Sheppard Mullin Richter &
Hampton LLP, represent the Debtor in its restructuring efforts.
When the Debtor filed for bankruptcy, it listed assets of between
$50 million and $100 million and debts of between $50 million and
$100 million.
DIAGNOSTIC IMAGING: S&P Affirms 'B' Ratings; Outlook Stable
-----------------------------------------------------------
Standard & Poor's Rating Services affirmed its 'B' corporate
credit and senior secured debt ratings on Bethpage, N.Y.-based
Diagnostic Imaging Group LLC. The outlook is stable.
At the same time, Standard & Poor's revised its recovery ratings
on Diagnostic Imaging Group's $135 million senior secured credit
facilities to reflect the company's most recent financial position
and its underlying recovery prospects in a payment default
scenario. The senior secured facilities consist of a $25 million
revolving credit facility and a $110 million term loan B facility
of which approximately $106.2 million remains outstanding (as of
June 30, 2008). The recovery rating was revised to '3' from '4',
indicating S&P's expectation for a meaningful (50%-70%) recovery
for secured lenders in the event of a payment default.
The low speculative-grade rating on Diagnostic Imaging Group
reflects the company's relatively small presence in the
competitive medical imaging field, geographic concentration,
reimbursement risk, and high lease-adjusted financial leverage. In
addition, the company has faced some operational difficulties over
the past several years. These factors overshadow favorable demand
prospects related to an aging population and the benefits of
imaging as a noninvasive diagnostic tool, as well as Diagnostic
Imaging's densely populated markets and solid payor relationships.
In July 2008, the company raised cash of about $25 million through
the sale of common equity to Accretive Exit Capital Parners L.P.
Evercore Capital Partners still maintains a majority interest, and
an additional stake remains in the hands of the former owners, who
retain operational oversight of the business.
The stable outlook reflects S&P's expectation that the pace of
revenue growth will accelerate and debt protection measures will
remain commensurate with a 'B' rating. As cash flow improves, the
company should begin to retire debt. While increased
diversification and a stronger financial profile could cause us to
raise the rating, this is not anticipated over the near term given
expectations that the company will resume its acquisition
activities. To the extent that these activities stretch the
company's liquidity, as was recently the case before the amendment
of the company's debt covenants and subsequent equity infusion,
ratings could be lowered.
EMPIRE STATE: Court Approves Sale of Assets to ION Holdings
-----------------------------------------------------------
The Hon. Robert Littlefield Jr. of the United States Bankruptcy
Court for the Northern District of New York approved the sale of
Empire State Independent Network LLC's assets to ION Holding Co.
-- which comprised of 12 out of 13 original investors in the
Debtor -- for at most $10 million, Mike Schoeck of The Deal
reports.
Richard Weisz, Esq., at Hodgson Russ LLP in Albany, New York, said
that $400,000 of the purchase price has been set aside to repay
the claims of unsecured creditors and professional fees, the
report says.
The Deal, citing papers filed with the Court, relates investor
Sovernet Communications Inc. from Bellows Falls, Vermont, will
take a 75% stake in the Debtor. Other investors include Empire
Telephone Co. of Prattsburg, New York, and Seamless Geoport
Communications Inc. from Middleburg, New York, the report adds.
About Empire State
Headquartered in Albany, New York, Empire State Independent
Network LLC dba Independent Optical Network --
http://www.i-o-n.com/-- provides telecommunication services. It
operates fiber optic cable network in New York.
The Debtor filed for Chapter 11 protection on Dec. 14, 2007, when
one of its vendors planned to cut off its services harming the
Debtor's ability to complete construction of a 2,200 mile fiber-
optic network linking Buffalo and Jamestown, New York, the Deal
reports.
Hodgson Russ LLP represents the Debtor. The U.S. Trustee for
Region 2 appointed creditors to serve on an Official Committee of
Unsecured Creditors. Satterlee Stephens Burke & Burke LLP
represents the Committee in this case.
According to the Deal, when the Debtor filed for protection
against its creditors, it listed total assets of $968,447 and
total debts of $10,300,000.
EPIX PHARMACEUTICALS: June 30 Balance Sheet Upside-Down by 75.6MM
-----------------------------------------------------------------
EPIX Pharmaceuticals, Inc. reported consolidated financial results
for the second quarter ended June 30, 2008. At June 30, 2008, the
company's balance sheet showed total assets of $63.6 million and
total liabilities of $139.2 million, resulting in a stockholders'
deficit of $75.6 million.
"Over the past three months, EPIX has made significant progress
toward achieving its long-term clinical development and corporate
goals," Elkan Gamzu, Ph.D., interim chief executive officer of
EPIX, said. "I am excited to join the company and look forward to
working closely with the entire EPIX team toward the outlined 2008
corporate and development milestones. We are squarely focused on
building upon the successes achieved to date and continuing to
advance our therapeutic pipeline."
Net loss for the second quarter ended June 30, 2008 was
$2.3 million, compared with $18.0 million for the quarter ended
June 30, 2007.
Total revenues for the second quarter ended June 30, 2008 were
$17.4 million, compared with $1.8 million for the second quarter
of 2007. The increase in revenue primarily relates to
$13.0 million in milestone payments earned from the company's
existing collaborations during the second quarter of 2008.
Research and development expenses totaled $15.0 million for the
quarter ended June 30, 2008, compared with $14.8 million in the
second quarter of 2007. The increase in research and development
expense in 2008 primarily relates to increased spending on the
company’s preclinical programs.
General and administrative expense was $3.4 million for the
quarter ended June 30, 2008 compared with $4.5 million for the
second quarter of 2007. The decrease in general and
administrative expense in 2008 was primarily due to lower legal
expenses.
As of June 30, 2008, EPIX had cash, cash equivalents and short-
term investments of $43.2 million compared with $61.1 million on
Dec. 31, 2007. EPIX currently has $100.0 million of convertible
debt outstanding. Approximately 41.4 million shares of common
stock were outstanding at June 30, 2008.
Full Year 2008 Financial Guidance
EPIX is reiterating its previously stated fiscal year 2008
guidance and currently expects to realize a net loss in the range
of $45 to $50 million and revenue in the range of $25 million to
$30 million. Revenue in 2008 is expected to relate primarily to
reimbursed research and development costs and milestone
achievements under the company's existing strategic
collaborations. Management currently estimates that cash, cash
equivalents and marketable securities on hand as of June 30, 2008,
together with anticipated revenue to be earned in 2008, will be
sufficient to fund operations through the first quarter of 2009.
The company's recent CEFF may provide funding beyond the first
quarter of 2009, depending upon the amount and timing of drawdowns
from the facility.
About EPIX Pharmaceuticals
Headquartered in Lexington, Mass., EPIX Pharmaceuticals Inc.
(NasdaqGM: EPIX) -- http://www.epixmed.com/-- is a
biopharmaceutical company focused on discovering and developing
novel therapeutics through the use of its proprietary and highly
efficient in silico drug discovery platform. The company has a
pipeline of internally-discovered drug candidates currently in
clinical development to treat diseases of the central nervous
system and lung conditions. EPIX also has collaborations with
leading organizations, including GlaxoSmithKline, Amgen, Cystic
Fibrosis Foundation Therapeutics, and Bayer Schering Pharma AG,
Germany.
ERVIN MOTT: Case Summary & 6 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Ervin Mott Enterprises, LLC
P.O. Box 98
Fisherville, KY 40023
Bankruptcy Case No.: 08-33728
Chapter 11 Petition Date: August 25, 2008
Court: Western District of Kentucky (Louisville)
Debtor's Counsel: Neil Charles Bordy, Esq.
Seiller Waterman LLC
2200 Meidinger Tower
462 S 4th Street
Louisville, KY 40202
Email: bordy@derbycitylaw.com
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
Debtor's 6 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Minor & Co. $9,075.00
200 South Fifth Street
Suite 400N
Louisville, KY 40202
Louisville Water Co. $2,400.00
5500 South Third Street
Louisville, KY 40202
Sweep All $2,287.35
P.O. Box 436051
Louisville, KY 40223
Waste Management KY $1,495.53
7501 Grade Ln
Louisville, KY 40219-3440
LG&E $660.00
820 West Broadway
Louisville, KY 40202
Industrial Disposal $344.54
P.O. Box 9001825
Louisville, KY 40290
FANNIE MAE: Bank Financial Strength Rating Tumbles, Moody's Says
----------------------------------------------------------------
Moody's Investors Service downgraded the preferred stock ratings
of the Federal National Mortgage Association and Federal Home Loan
Mortgage Corporation to Baa3 from A1 and the Bank Financial
Strength Ratings to D+ from B-. The preferred stock ratings and
BFSRs remain on review for possible further downgrade. Fannie
Mae's and Freddie Mac's Aaa senior long-term debt and Prime-1
short-term debt ratings were affirmed with stable outlooks. The
firms' Aa2 subordinated debt ratings were affirmed, but the
outlook was changed to negative from stable.
Moody's said the downgrade of the BFSRs reflects Moody's view that
Fannie Mae's and Freddie Mac's financial flexibility to manage
potential volatility in its mortgage risk exposures is
constricted. In particular, given recent market movement, Moody's
believes these firms currently have limited access to common and
preferred equity capital at economically attractive terms.
Moody's added that these GSE's more limited financial flexibility
also restricts their ability to pursue their public policy mission
of providing liquidity, stability and affordability to the US
housing market. Fannie Mae and Freddie Mac currently make up
approximately 75% of the mortgage market in the US. A reduction
in the capacity of these firms to support the US mortgage market
could have significant repercussions for the US economy. In an
effort to thwart broader negative economic effects, Moody's
believes the likelihood of direct support from the United States
Treasury has increased.
Fannie Mae's and Freddie Mac's Aaa senior long-term, Prime-1
short-term and Aa2 subordinated debt ratings were affirmed based
on Moody's view that these GSEs benefit from very high systemic
support because of their central role in mortgage finance in the
United States, as well as the importance of housing within in the
U.S. economy. With regard to the firms' subordinated debt,
Moody's believes that it too benefits from implicit support.
Moody's views it unlikely that the US Treasury would allow Fannie
Mae or Freddie Mac to defer payment on a debt instrument given
potential market ramifications. However, the negative outlook on
the subordinated debt rating recognizes that this is a fluid
situation and that, though unlikely, this could change.
"Given Fannie Mae's and Freddie Mac's importance to the US
mortgage market, we believe there is a very high level of support
for their debt from the US Treasury," said Brian Harris, a Moody's
Senior Vice President. "And, given these GSEs more limited
ability to raise capital and grow their portfolio to accomplish
their public policy role in a time of mortgage market turmoil, we
believe that there's an increased probability of actual support
coming from the US Treasury."
The downgrade and continued review for further downgrade of the
preferred stock ratings reflects a greater risk of dividend
omission on the preferred stock. This greater risk stems from two
issues. First, both Fannie Mae's and Freddie Mac's mortgage
portfolio performance is worse and more volatile than Moody's
expected. This could lead to the firms breaching their capital
requirements that govern their ability to pay a preferred
dividend. Second, there is uncertainty with regard to how these
preferred securities would be treated should the US Treasury
provide Fannie Mae or Freddie Mac with support. Should a capital
injection result in the subordination of the existing preferred
stock, or should it result in any missed preferred dividends, then
the preferred stock rating would be lowered further.
Moody's also recognizes that the type of support that the US
Treasury may provide, and the implications of such support for
these GSE's various securities, would likely affect the firms'
future financial flexibility and market access. Moody's believes
that this would weigh into the deliberations as the US Treasury
balances its stated efforts to promote market stability and
mortgage availability.
During its continuing review for downgrade of the BFSR and
preferred stock ratings, Moody's will further develop its credit
loss estimates on Fannie Mae's and Freddie Mac's portfolios and
consider the implications of any changes on the firms' capital
cushions to absorb greater losses. The rating agency noted that
both Fannie Mae's and Freddie Mac's preferred stock has features
that may lead to a suspension of a dividend if certain capital
levels are not maintained.
Moody's Bank Financial Strength Rating measures the likelihood
that an institution will require extraordinary financial
assistance from third parties, such as the government or
shareholders, rather than the probability that a financial
institution would receive such support. Key rating considerations
include financial fundamentals, franchise value, and business and
asset diversification.
These ratings were downgraded and remain on review for possible
downgrade:
Fannie Mae and Freddie Mac
-- Bank financial strength rating to D+ from B-; Preferred stock
to Baa3 from A1.
These ratings were affirmed with a stable outlook:
Fannie Mae and Freddie Mac
-- Senior long-term debt at Aaa; Short-term debt at Prime-1
These rating was affirmed with a negative outlook:
Fannie Mae and Freddie Mac
-- Subordinated debt at Aa2.
Fannie Mae's and Freddie Mac's Baseline Credit Assessment was
lowered to 10 from 5, and remains on review for possible further
revision lower. A Baseline Credit Assessment of 10 maps to a Baa3
rating on the Moody's long-term debt rating scale.
Moody's last rating action on Fannie Mae and Freddie Mac occurred
on July 15, 2008.
Federal National Mortgage Association -- Fannie Mae (NYSE: FNM) --
is a publicly held, federally chartered US Government-Sponsored
Enterprise. It is the largest conduit for residential mortgage
finance in the USA, and is regulated by the Federal Housing
Finance Agency. As of June 30, 2008, Fannie Mae's retained
portfolio and book of business was $750 billion and $3.0 trillion,
respectively.
Federal Home Loan Mortgage Corporation -- Freddie Mac (NYSE: FRE)
-- is a publicly held, federally chartered US Government-Sponsored
Enterprise. It is one of the largest conduits for residential
mortgage finance in the USA, and is regulated by the Federal
Housing Finance Agency. As of June 30, 2008, Freddie Mac's
retained portfolio and total mortgage portfolio was $792 billion
and $2.2 trillion, respectively.
FEY 240: U.S. Trustee Wants Case Converted or Dismissed
-------------------------------------------------------
Peter C. Anderson, the U.S. Trustee for Region 16, asks the U.S.
Bankruptcy Court for the Central District of California to convert
Fey 240 North Brand LLC's Chapter 11 case to a Chapter 7
liquidation proceeding, or in the alternative, dismiss the
Debtor's bankruptcy case.
Court documents filed by the U.S. Trustee reveal that the Debtor,
to date, has not filed a plan of reorganization or a disclosure
statement describing that plan. In addition, the Debtor has
failed to file certain documents and financial reports as required
by the Court.
The U.S. Trustee has suggested in court documents that dismissal
of the case is more appropriate.
Pasadena, California-based Fey 240 North Brand LLC filed for
Chapter 11 protection on June 30, 2008 (Bankr. C.D. Calif. Case
No. 08-19512). John P. Schock, Esq., in Glendale, California,
represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it listed
estimated assets and estimated debts of $10 million to
$50 million.
FORTUNOFF: Presses for Dismissal of Chapter 11 Proceedings
----------------------------------------------------------
Pursuant to Sections 105(a), 305, 330, 349, and 1112(b) of the
Bankruptcy Code and Rules 1017, 2002, 2016, 9013 and 9014 of the
Federal Rules of Bankruptcy Procedure, Fortunoff Fine Jewelry and
Silverware LLC and its debtor-affiliates, with the consent of the
Official Committee of Unsecured Creditors, asked the U.S.
Bankruptcy Court for the Southern District of New York to dismiss
their Chapter 11 cases effective upon their filing of a statement
of final distribution of postpetition administrative expenses.
Frank A. Oswald, Esq., at Togut Segal & Segal LLP, in New York,
told the Court that since the closing of the sale of
substantially all of the Debtors' assets to Fortunoff Holdings
LLC f/k/a H Acquisition LLC, the Debtors, along with the
Committee, have focused their efforts on winding up the Debtors'
affairs, including:
-- rejecting real property and other unexpired leases and
contracts that were not assumed and assigned pursuant to
the Sale; and
-- liquidating the few remaining assets not acquired by the
Fortunoff Holdings -- the Excluded Assets.
Mr. Oswald related that the cash portion of the purchase price
paid by Fortunoff Holdings was only sufficient to satisfy the
Debtors' obligations, aggregating $71,000,000, to their senior
secured prepetition and postpetition lenders, which held valid
liens on, and security interests in, substantially all of the
Debtors' assets. The proceeds of the Sale were not sufficient to
pay any portion of the Debtors' obligations -- exceeding
$19,000,000 -- to their junior secured lenders. The Debtors'
obligations to the Term D Lenders remain secured by a lien on all
of the Excluded Assets and its proceeds -- the Term D Collateral,
Mr. Oswald noted.
Pursuant to the Court's Sale Order, Fortunoff Holdings paid
$2,600,000 in additional consideration -- the Wind Down Reserve
-- to be held by the Debtors in a segregated trust account,
comprising:
(a) $2,100,000 solely for the payment of (i) postpetition
professional fees and expenses, and (ii) allowed
administrative expenses of the United States Trustee; and
(b) $500,000 for professional fees and expenses and other wind
down costs associated with final administration of the
Debtors' cases.
The Wind Down Reserve will not be sufficient to pay all of the
Wind Down Costs, Mr. Oswald stated. The Debtors estimated the
shortfall to be no more than $850,000.
To complete the wind down of the Debtors' Chapter 11 cases, the
Term D Lenders agreed in a stipulation with the Debtors, to
permit a gift or charge against the Term D Cash Collateral, for
up to $850,000 of the costs of winding down the Debtors' affairs,
Mr. Oswald told the Court.
Mr. Oswald maintained that the Stipulation will facilitate the
most efficient liquidation of the Debtors' remaining assets, all
of which are encumbered by the Term D Lenders' liens, and will
pave the way for an orderly dismissal of the Debtors' Chapter 11
cases.
"While there will be no distributions made to prepetition
creditors or equity holders; as a result of the Stipulation, the
postpetition administrative expenses of winding down the Debtors'
estates will be paid in full," Mr. Oswald noted.
Mr. Oswald asserted that dismissal of the Debtors' bankruptcy
proceedings is in their best interests and that of their
creditors, because the Debtors (i) have or will have disposed all
of their assets upon the Court's approval of the Stipulation;
(ii) will have reconciled and paid all Wind Down Costs and
secured claims to the extent possible; (iii) are unable to
effectuate a plan of reorganization under Section 1129 of the
Bankruptcy Code; and (iv) are unable to make any distributions to
prepetition creditors or equity holders.
The Debtors also submitted that conversion of their Chapter 11
cases to Chapter 7 is not warranted because all assets have been
liquidated and the proceeds have been or will be distributed
pursuant to the terms of the Sale and Stipulation. They added
that conversion would only delay distribution and increase the
costs of administration, thereby reducing the amount of cash
available for distribution.
The Term D Stipulation
In a separate motion, the Debtors ask the Court to approve the
Stipulation among them, the Term D Lenders, and Trimaran Fund
Management LLC, as administrative and collateral agent of the
Term D Lenders.
Debtors Fortunoff Fine Jewelry and Silverware, LLC and M.
Fortunoff of Westbury, LLC had entered into a Term D loan
agreement with, among others, Trimaran Fund, on behalf of the Term
D Lenders. Under the terms of the Term D Loan Agreement, the Term
D Lenders extended to the Debtors a term loan facility which the
Debtors' parent company, Source Financing Corp., guarantied.
As reflected in the Court's final order approving their use of
the Term D Lenders' cash collateral, the Debtors agreed that as
of the Petition Date, they were each indebted for $17,400,000 to
the Term D Lenders, secured by security interests in and liens on
substantially all of the Debtors' personal property.
Moreover, because the Sale proceeds were not sufficient to pay
any portion of the Term D Obligations, the Term D Obligations
remain secured by a lien on the Term D Collateral, including,
without limitation:
(1) cash proceeds from the Excluded Assets for about
$3,600,000, which is currently in the Debtors' operating
account; and
(2) $300,000 in other Excluded Assets receivables.
In consideration of, inter alia, the Debtors' time and effort
needed to collect, liquidate and safeguard the Term D Collateral,
Trimaran Fund, on behalf of the Term D Lenders, consented under
the terms of the Stipulation, to the $850,000 charge against the
Term D Cash Collateral, solely for the payment of:
(a) allowed administrative expenses;
(b) postpetition fees and expenses of ordinary course
professionals retained by the Debtors;
(c) administrative expense claims arising from goods and
services provided to the Debtors on or after the Petition
Date;
(d) postpetition professional fees and expenses allowed by the
Court; and
(e) any additional postpetition professional fees, expenses,
and other costs that will be necessary to complete the
wind-down of the Debtors' affairs.
In exchange, the Debtors stipulated and the Committee has not
challenged that:
* Trimaran Fund, on behalf of the Term D Lenders, holds
valid, perfected and first priority security interests and
liens in the Term D Collateral, including, without
limitation, the Term D Cash Collateral and outstanding
receivables; and
* the releases and waivers contained in the Court's final DIP
order are final and binding on all parties.
The Debtors further stipulated and agreed to the modification of
the automatic stay pursuant to Section 362 of the Bankruptcy Code
to permit Trimaran Fund to exercise its rights as a secured
creditor of the Debtors against the Term D Collateral, including
its rights to pursue, settle, compromise or abandon any
outstanding receivables without further approval of the Court or
the Debtors.
The wind-down costs that have accrued since May 2008 aggregate
$545,791 and will be paid from the Wind Down Reserve and the Term
D Cash Collateral upon the Court's approval of the Stipulation.
The Debtors disclosed that the Wind Down Costs have been reviewed
by Trimaran Fund and the Committee. To the extent that
additional Wind Down Costs accrue that are payable from the Wind
Down Reserve or the Term D Cash Collateral, the Debtors ask the
Court for authority to pay the additional costs without further
notice or order of the Court. To the extent the Term D Agent or
the Committee raises an objection to the payment of a particular
Wind Down Cost item, no payment will be made without the Court's
order.
Final Fee Procedures & Ancillary Relief
The Debtors propose these procedures for the filing of final fee
applications for professionals retained by the Debtors and the
Committee:
(a) Any professional retained by the Debtors or the Committee
pursuant to Sections 327 or 328 of the Bankruptcy Code
will file and will serve upon the Debtors, counsel for the
Debtors, counsel for the Committee and the Office of the
U.S. Trustee, a final application for allowance of fees,
reimbursement of expenses and payment of any holdbacks in
connection with services rendered by the professional
during the period from the Petition Date through the date
of the Order granting the relief sought in the Debtors'
request. Fees and expenses awarded pursuant to any Final
Fee Application will be paid from the Wind-Down Reserve or
the Debtors' operating account in accordance with and
subject to the terms of the Stipulation. The submission
must not be later than 30 days upon entry of the Court's
order approving the Debtors' Dismissal Motion.
(b) Payment of professional fees and reimbursement of expenses
for services rendered after the Final Fee Application
Period will be paid by the Debtors in accordance with the
terms of the Stipulation without the need to file a
further fee application with the Court and without further
approval or order of the Court.
(c) A copy of a notice of hearing to consider the Final Fee
Applications will be served, by regular mail upon the Fee
Application Notice Parties, the Professionals who have
filed a Final Fee Application and the parties listed on
the Debtors' master service List.
In connection with dismissing the Chapter 11 cases, the Debtors
ask the Court to:
(a) permit the rejection any remaining unexpired lease or
executory contract, although they believe that all
unexpired leases and executory contracts not assumed and
assigned to the Buyer have been rejected. The Debtors do
not seek to establish a bar date for rejection damage
claims arising from any remaining unexpired lease or
executory contract. Any rejection damage claim would be a
prepetition general unsecured claim and would not be
entitled to any distribution from the Debtors' estates.
(b) authorize them to abandon or destroy their remaining
files, documents and records pursuant to Sections 554 and
105 of the Bankruptcy Code subject to the terms of the
Sale Order.
(c) deny all pending motions (i) for allowance and payment of
administrative claims pursuant to Section 503(b)(9) of the
Bankruptcy Code, and (ii) asserting a right to
reclaim goods.
(d) provide that the provisions and effectiveness of the Final
DIP Order, the Sale Order and all other Orders entered in
the Chapter 11 cases will survive dismissal of the D.
About Fortunoff
New York-based Fortunoff Fine Jewelry and Silverware LLC --
http://www.fortunoff.com/-- started out as a family-owned
business founded by Max and Clara Fortunoff in 1922, until it
merged with M. Fortunoff of Westbury, L.L.C. and Source Financing
Corporation in 2004. Fortunoff offers customers fine jewelry and
watches, antique jewelry and silver, everything for the table,
fine gifts, home furnishings including bedroom and bath, fireplace
furnishings, housewares, and seasonal shops including outdoor
furniture shop in summer and enchanting Christmas Store in the
winter. It opened some 20 satellite stores in the New Jersey,
Long Island, Connecticut and Pennsylvania markets featuring
outdoor furniture and grills during the Spring/Summer season and
indoor furniture (and in some locations Christmas trees and decor)
in the Fall/Winter season.
Fortunoff and its two affiliates filed for chapter 11 petition on
Feb. 4, 2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355)
in order to effectuate a sale to NRDC Equity Partners LLC, --
http://www.nrdcequity.com/-- a private equity firm that bought
Lord & Taylor from Federated Department Stores.
Due to the U.S. Trustee's objection, Fortunoff backed out of
its request to employ Skadden Arps Meagher & Flom LLC, as
bankruptcy counsel. Fortunoff hired Togut Segal & Segal LLP,
as their general bankruptcy counsel instead, but Skadden Arps will
continue to serve the Debtors as special counsel in connection
with the sale the Debtors' assets. Logan & Company, Inc., serves
as the Debtors' claims, noticing, and balloting agent. FTI
Consulting Inc. are the Debtors' proposed crisis manager.
An Official Committee of Unsecured Creditors has been appointed in
this case. Effective March 6, 2008, Morrison & Foerster LLP is
counsel to the Creditors Committee in substitution of Otterbourg
Steidler Houston & Rosen PC. Mahoney Cohen & Company, CPA, P.C.,
serves as financial advisor to the Creditors' Committee.
In their schedules, Fortunoff Fine Jewelry listed $5,052,315 total
assets and $136,626,948 total liabilities; Source Financing Corp.
listed $154,680,100 total assets and $176,961,631 total
liabilities; and M. Fortunoff of Westbury LLC listed $6,300,955
total assets and $119,985,788 total liabilities. The Debtors'
exclusive period to file a plan of reorganization ended June 3,
2008. (Fortunoff Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
FREDDIE MAC: Bank Financial Strength Rating Tumbles, Moody's Says
-----------------------------------------------------------------
Moody's Investors Service downgraded the preferred stock ratings
of the Federal National Mortgage Association and Federal Home Loan
Mortgage Corporation to Baa3 from A1 and the Bank Financial
Strength Ratings to D+ from B-. The preferred stock ratings and
BFSRs remain on review for possible further downgrade. Fannie
Mae's and Freddie Mac's Aaa senior long-term debt and Prime-1
short-term debt ratings were affirmed with stable outlooks. The
firms' Aa2 subordinated debt ratings were affirmed, but the
outlook was changed to negative from stable.
Moody's said the downgrade of the BFSRs reflects Moody's view that
Fannie Mae's and Freddie Mac's financial flexibility to manage
potential volatility in its mortgage risk exposures is
constricted. In particular, given recent market movement, Moody's
believes these firms currently have limited access to common and
preferred equity capital at economically attractive terms.
Moody's added that these GSE's more limited financial flexibility
also restricts their ability to pursue their public policy mission
of providing liquidity, stability and affordability to the US
housing market. Fannie Mae and Freddie Mac currently make up
approximately 75% of the mortgage market in the US. A reduction
in the capacity of these firms to support the US mortgage market
could have significant repercussions for the US economy. In an
effort to thwart broader negative economic effects, Moody's
believes the likelihood of direct support from the United States
Treasury has increased.
Fannie Mae's and Freddie Mac's Aaa senior long-term, Prime-1
short-term and Aa2 subordinated debt ratings were affirmed based
on Moody's view that these GSEs benefit from very high systemic
support because of their central role in mortgage finance in the
United States, as well as the importance of housing within in the
U.S. economy. With regard to the firms' subordinated debt,
Moody's believes that it too benefits from implicit support.
Moody's views it unlikely that the US Treasury would allow Fannie
Mae or Freddie Mac to defer payment on a debt instrument given
potential market ramifications. However, the negative outlook on
the subordinated debt rating recognizes that this is a fluid
situation and that, though unlikely, this could change.
"Given Fannie Mae's and Freddie Mac's importance to the US
mortgage market, we believe there is a very high level of support
for their debt from the US Treasury," said Brian Harris, a Moody's
Senior Vice President. "And, given these GSEs more limited
ability to raise capital and grow their portfolio to accomplish
their public policy role in a time of mortgage market turmoil, we
believe that there's an increased probability of actual support
coming from the US Treasury."
The downgrade and continued review for further downgrade of the
preferred stock ratings reflects a greater risk of dividend
omission on the preferred stock. This greater risk stems from two
issues. First, both Fannie Mae's and Freddie Mac's mortgage
portfolio performance is worse and more volatile than Moody's
expected. This could lead to the firms breaching their capital
requirements that govern their ability to pay a preferred
dividend. Second, there is uncertainty with regard to how these
preferred securities would be treated should the US Treasury
provide Fannie Mae or Freddie Mac with support. Should a capital
injection result in the subordination of the existing preferred
stock, or should it result in any missed preferred dividends, then
the preferred stock rating would be lowered further.
Moody's also recognizes that the type of support that the US
Treasury may provide, and the implications of such support for
these GSE's various securities, would likely affect the firms'
future financial flexibility and market access. Moody's believes
that this would weigh into the deliberations as the US Treasury
balances its stated efforts to promote market stability and
mortgage availability.
During its continuing review for downgrade of the BFSR and
preferred stock ratings, Moody's will further develop its credit
loss estimates on Fannie Mae's and Freddie Mac's portfolios and
consider the implications of any changes on the firms' capital
cushions to absorb greater losses. The rating agency noted that
both Fannie Mae's and Freddie Mac's preferred stock has features
that may lead to a suspension of a dividend if certain capital
levels are not maintained.
Moody's Bank Financial Strength Rating measures the likelihood
that an institution will require extraordinary financial
assistance from third parties, such as the government or
shareholders, rather than the probability that a financial
institution would receive such support. Key rating considerations
include financial fundamentals, franchise value, and business and
asset diversification.
These ratings were downgraded and remain on review for possible
downgrade:
Fannie Mae and Freddie Mac
-- Bank financial strength rating to D+ from B-; Preferred stock
to Baa3 from A1.
These ratings were affirmed with a stable outlook:
Fannie Mae and Freddie Mac
-- Senior long-term debt at Aaa; Short-term debt at Prime-1
These rating was affirmed with a negative outlook:
Fannie Mae and Freddie Mac
-- Subordinated debt at Aa2.
Fannie Mae's and Freddie Mac's Baseline Credit Assessment was
lowered to 10 from 5, and remains on review for possible further
revision lower. A Baseline Credit Assessment of 10 maps to a Baa3
rating on the Moody's long-term debt rating scale.
Moody's last rating action on Fannie Mae and Freddie Mac occurred
on July 15, 2008.
Federal National Mortgage Association -- Fannie Mae (NYSE: FNM) --
is a publicly held, federally chartered US Government-Sponsored
Enterprise. It is the largest conduit for residential mortgage
finance in the USA, and is regulated by the Federal Housing
Finance Agency. As of June 30, 2008, Fannie Mae's retained
portfolio and book of business was $750 billion and $3.0 trillion,
respectively.
Federal Home Loan Mortgage Corporation -- Freddie Mac (NYSE: FRE)
-- is a publicly held, federally chartered US Government-Sponsored
Enterprise. It is one of the largest conduits for residential
mortgage finance in the USA, and is regulated by the Federal
Housing Finance Agency. As of June 30, 2008, Freddie Mac's
retained portfolio and total mortgage portfolio was $792 billion
and $2.2 trillion, respectively.
FTS GROUP: Posts $1,202,015 Net Loss in 2008 Second Quarter
-----------------------------------------------------------
FTS Group Inc. reported a net loss of $1,202,015 on revenues of
$1,233,951 for the second quarter ended June 30, 2008, compared
with a net loss of $522 on revenues of $1,765,673 in the same
period last year.
The decrease in revenues is attributable to the strategic decision
the company made to reduce its retail store count by selling three
locations during the first quarter and realign the retail side of
its wireless distribution business towards a predominately online
business model that generates a higher profit margin.
The increase in net loss is primarily related to the failed OTG
acquisition of certain assets from On The Go Healthcare Inc. and
to a lesser extent increases in fuel prices as well as increased
consulting fees compared to the quarter over quarter period.
At June 30, 2008, the company's consolidated balance sheet showed
$7,618,574 in total assets, $6,419,112 in total liabilities,
$159,368 in noncontrolling interest, and $1,040,094 in total
stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?3119
Going Concern Doubt
As reported in the Troubled Company Reporter on May 9, 2008,
Houston-based R.E. Bassie & Co. expressed substantial doubt about
FTS Group Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended Dec. 31, 2007. The auditing firm pointed to the
company's recurring losses from operations.
The company had an accumulated deficit of $12,714,852 as of
June 30, 2008, and negative cash flows from operations of $755,054
for the six months ended June 30, 2008. Additionally, the company
was in default on approximately $3,300,000 in debts owed to
creditors as of June 30, 2008.
About FTS Group
Headquartered in Tampa, Florida, FTS Group Inc. (OTC BB: FLIP)
-- http://www.ftsgroup.com/-- is a publicly traded acquisition
and development company focused on acquiring, developing and
investing in cash flow positive businesses and viable business
ventures those in the Technology, Wireless and Internet space.
The company generates revenue through its three wholly owned
subsidiaries: See World Satellites Inc., FTS Wireless Inc. and
Elysium Internet Inc.
GENERAL MOTORS: Delphi Bondholder Seeks to Block $300MM Loan
------------------------------------------------------------
ABIWorld.org reports that Highland Capital Management LP wants to
stop Delphi Corp. from borrowing $300 million more from former
parent General Motors Corp. As reported by the Troubled Company
Reporter on Aug 11, 2008, General Motors Corp. will grant Delphi
Corp. an additional $300 million on top of the $650 million
already promised to help its former parts unit exit bankruptcy
protection.
The Wall Street Journal, citing court papers, said that GM may
increase its loans to its top supplier to $950 million through the
end of 2008 to reimburse Delphi for labor-related costs and other
liabilities. WSJ related that GM had agreed to assume these
liabilities under a settlement entered into during the Chapter 11
case.
The $950 million, WSJ indicated, represents a portion of the
amount GM would have paid Delphi had the supplier emerged from
Chapter 11. GM will receive a top priority claim under bankruptcy
law for the advances, WSJ notes.
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.
About General Motors
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.
At March 31, 2008, GM's balance sheet showed total assets of
$145,741,000,000 and total debts of $186,784,000,000, resulting in
a stockholders' deficit of $41,043,000,000. Deficit, at Dec. 31,
2007, and March 31, 2007, was $37,094,000,000 and $4,558,000,000,
respectively.
General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units. GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela. GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.
GLASS & POWDER: To Close Last Shop in Virginia
----------------------------------------------
Richmond (Va.) Times-Dispatch reports that Glass & Powder
Boardshop, Inc., is closing its last location, the Carytown
snowboard and wakeboard shop, by the end of this month.
Glass & Powder Boardshop, which opened the Carytown store in 1998,
filed for Chapter 11 reorganization in February 2006. It emerged
in December of that year with an agreement to pay back creditors
over six years about 29 cents on each dollar owed. Company
officials did not answer questions about whether creditors were
repaid, according to the report.
In a letter to customers, executives at the company said the
business has spent all resources.
Based in Richmond, Virginia, Glass & Powder Boardshop, Inc. --
http://www.glassandpowder.com/-- sells water sports equipment,
supplies, clothing and accessories. (Bankr. E. D. Va. Case No.:
06-30307). The company disclosed total assets of $649,000 and
total debts of $1,297,241 when it filed for bankruptcy.
GLOBAL REALTY: June 30 Balance Sheet Upside-Down by $2,055,716
--------------------------------------------------------------
Global Realty Development Corp.'s consolidated balance sheet at
June 30, 2008, showed $3,112,313 in total assets, and $5,168,029
in total liabilities, resulting in a $2,055,716 stockholders'
deficit.
The company reported a net loss of $2,200,497 for the second
quarter ended June 30, 2008, compared with a net loss of $609,902
in the same period last year.
Revenues of $0 for the three month period ended June 30, 2008, as
compared to $0 for the three month period ended June 30, 2007,
reflect the results due to the discontinuance of operations.
The increase in net loss primarily reflects the disposition of
discontinued operations of SMS Text Media Inc. and the re-
evaluation of its 51% interest in TFM Group, LLC.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?311d
Going Concern Doubt
As reported in the Troubled Company Reporter on June 9, 2008,
Meyler & Company, LLC expressed raised substantial doubt about
Global Realty Development Corp.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007.
The auditor pointed to the company's net losses in 2007 and 2006,
accumulated deficit of $38,275,415 at Dec. 31, 2007, and the
existence of uncertain conditions the company faces relative to
its ability to obtain capital and operate successfully.
The company has an accumulated deficit of $41,253,857 at June 30,
2008.
About Global Realty
Headquartered in Coral Springs, Fla., Global Realty Development
Corp. (OTC BB: GRLY) -- http://www.grdcorporation.com/-- had been
primarily a commercial and residential land development company
with properties located in Australia. The company sold all of the
real estate companies in December 2007 and is reporting such
operations as discontinued operations.
The company acquired 100% of MJD Films, Inc. and a 51% profit
participation in TFM Group, LLC in 2006. The company also
acquired 77% of SMS Text Media in July 2007 and the Beach Boys
Memorabilia assets in April 2007. The company discontinued
operations as of Dec. 31, 2007 of all entertainment operations and
assets. The company has been in the process of unwinding the
acquisitions which occurred in 2007 and selling off of all
remaining entertainment assets acquired in late 2006.
GOLDEN VALLEY: Case Summary & Four Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Golden Valley 566, LLC
8776 E. Shea Boulevard, Suite B3A-623
Scottsdale, AZ 85260
Tel: (602) 307-0837
Bankruptcy Case No.: 08-11107
Chapter 11 Petition Date: August 25, 2008
Court: District of Arizona (Phoenix)
Judge: Sarah Sharer Curley
Debtor's Counsel: Mark J. Guinta, Esq.
Law Offices of Mark J. Guinta
1413 N 35D Street
Phoenix, AZ 85004-1612
Tel: (602) 307-0837
Fax: (602) 307-0838
Email: mark.giunta@azbar.org
Total Assets: $12,000,021
Total Debts: $9,401,670
Debtor's list of its Four Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Dataweb Technologies Unsecured Loan $505,570
13020 N. 82nd Street
Scottsdale, AZ 85260
Carl Flushe Re-Zone Consultant/ $55,000
2800 Sweetwater Avenue, County Admin. Liaison
Suite A-104
Lake Havasu City, AZ 86406
Randall S. Joselit, CPA, PC CPA Services $4,500
1430 E. Missouri Avenue,
Suite 105
Phoenix, AZ 85014
Berens, Kozub & Kloberdanz, PLC Attorneys Fees $2,500
GOODY'S FAMILY: Court Sets Sept. 10 as Admin. Claims Bar Date
-------------------------------------------------------------
The Hon. Christopher S. Sontchi of the United States Bankruptcy
Court for the District of Delaware established Sept. 10, 2008, at
5:00 p.m., Eastern Time, as deadline for filing request for
allowance of administrative expense claims, under Section
503(b)(9) of the Bankruptcy Code, in Goody's Family Clothing Inc.
and its debtor-affiliates.
Each request must be delivered to the Court at 824 North Market
Street in Wilmington, Delaware.
About Goody's Family
Headquartered in Knoxville, Tennessee, Goody's Family Clothing
Inc. -- http://www.shopgoodys.com/-- operates a chain of clothing
stores. The company is owned by Goody's Holdings Inc., a non-
debtor entity. As of May 31, 2008, the company operates 355
stores in several states with approximately 9,868 personnel of
which 170 employees are covered under a collective bargaining
agreement.
The company and 19 of its affiliates filed for Chapter 11
protection on June 9, 2008 (Bankr. D. Del. Lead Case No.08-11133).
Gregg M. Galardi, Esq., and Marion M. Quirk, Esq., at Skadden Arps
Slate Meagher & Flom LLP, represent the Debtors. When the Debtors
filed for protection against their creditors, they listed assets
of between $100 million and $500 million and debts of between
$100 million and $500 million.
As of May 3, 2008, the Debtors' records reflected total assets of
$313,000,000 -- book value -- and total debts of $443,000,000.
GPS INDUSTRIES: Posts $3,866,000 Net Loss in 2008 Second Quarter
----------------------------------------------------------------
GPS Industries Inc. reported a net loss of $3,866,000 on revenue
of $4,564,000 for the second quarter ended June 30, 2008, compared
with a net loss of $2,064,000 on revenue of $2,215,000 in the
second quarter ended June 30, 2007.
The increase in revenue is attributable to an increase in 18-hole
equivalent sales during the period, a significantly higher average
selling price per 18-hole equivalent system and the results of the
company's recent acquisitions of GPSI Europe and the operations
and assets of UpLink Corporation.
The three month loss from operations increased from $1,745,000 in
2007 to $3,559,000. The increase in loss from operations was due
to increased operating expenses offset slightly by an improvement
in gross margin.
Net cash provided by financing activities was $10,075,000 for the
2008 six month period ended June 30, 2008, as compared to
$2,101,000 for the same period in 2007. Financing activities
during the six months ended June 30, 2008.
Total long-term debt was $9,532,000 at June 30, 2008, compared to
$-0- at Dec. 31, 2007. Total long-term debt at June 30, 2008,
includes a convertible promissory note, net of debt discount, of
$4,502,000 which the company obtained from Tulip Group Investments
Limited.
Balance Sheet
At June 30, 2008, the company's consolidated balance sheet showed
$35,746,000 in total assets, $33,419,000 in total liabilities, and
$2,327,000 in total stockholders' equity.
The company's consolidated balance sheet at June 30, 2008, also
showed strained liquidity with $12,138,000 in total current assets
available to pay $18,423,000 in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?313a
Going Concern Doubt
Sherb & Co., LLP, in New York, expressed substantial doubt about
GPS Industries Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended Dec. 31, 2007. The auditing firm reported that the
company has incurred significant losses and has a working capital
deficiency.
About GPS Industries
Headquartered in Surrey, B.C. Canada, GPS Industries Inc. (OTC BB:
GPSN.OB) -- http://www.gpsindustries.com/-- develops and markets
GPS and Wi-Fi multimedia solutions for use with golf course
operations and residential community developments. The company's
primary business is the development, manufacture and sale of the
Inforemer HDX mobile display units (MDU) in both cart mounted and
hand held product lines along with the related infrastructure.
GREY WOLF: Precision Buyout Cues Moody's to Review Ratings
----------------------------------------------------------
Moody's Investors Service placed the ratings for Grey Wolf, Inc.
under review for possible upgrade after its announcement that it
has agreed to be acquired by Precision Drilling Trust. The
ratings for GW that are under review are the Ba3 Corporate Family
Rating, the Ba3 Probability of Default Rating, and the B1 rating
on the senior unsecured convertible notes.
On July 16, 2008, Moody's placed a developing outlook on the
ratings following GW's shareholders voting down a proposed merger
with Basic Energy Services, Inc. and management's subsequent
announcement that it was looking at a number of strategic
initiatives. GW had received three previous bids by Precision,
which GW's management and Board had decided were not superior to
the merger with Basic. However, Precision has revised its bid
which has been approved by management and the Board of Directors
for GW. Under the terms of the new deal, GW shareholders will
receive $5.00 in cash per share and 0.1883 shares of Precision
Drilling Trust, for a total value of $9.04/sharefor GW. Although
the new terms represent a nearly $1.00/share lower price than the
prior proposal by Precision, the equity component is higher as
Precision will be issuing 42 million shares versus 40.2 million
shares in the last deal.
The review for upgrade considers the overall credit worthiness of
Precision Drilling Trust on a stand alone basis and that the
combined company will likely have a profile that is more favorable
for GW's bondholders. Although Moody's does not currently rate
Precision, it does have a track record of carrying very low
leverage and pro forma leverage is expected to be in line within a
higher rating. In addition, the combined company will have a
significant presence in the North American drilling market with a
total fleet of 371 rigs with exposure to both natural gas and oil
while covering Canada, the US, and a growing presence in Mexico.
However, conclusion of the ratings review will consider the pro
forma capitalization of the combined company, the post closing
organization structure, and more clarity as to what will happen to
GW's convertible notes post closing. Concluding the review will
also consider management's strategy for the combined company
regarding growth, the expectations for unit distribution payouts
versus planned capital spending requirements given about 19
newbuilds coming into the fleet over the next several quarters, as
well as Moody's updated views on the momentum of the North
American drilling markets.
Grey Wolf is headquartered in Houston, Texas.
GROUP 1: S&P Holds 'BB-' Rtgs on Worsening Industry Conditions
--------------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on Group 1
Automotive Inc. to negative from stable. At the same time, S&P
affirmed the 'BB-' corporate credit rating on the company.
Houston-based Group 1 had total balance sheet debt of $679 million
(excluding floorplan liabilities) as of June 30, 2008.
"The outlook revision reflects deteriorating macroeconomic
conditions that are likely to pressure EBITDA in upcoming quarters
and lead to higher leverage that could be insufficient to support
the current rating," said Standard & Poor's credit analyst Nancy
Messer. The likelihood of a downgrade in the next year depends on
the depth and duration of the economic downturn, combined with the
company's ability to manage its cost structure to fit the new
market.
"Sales of both new and used light vehicles declined at a higher
rate in the second quarter than in the first quarter, as economic
weakness in the U.S. persisted, consumer vehicle preference
shifted, and credit conditions tightened. In addition, low
consumer confidence about future economic conditions has led to
weakening of discretionary spending on highly profitable vehicle
maintenance. These factors are affecting 2008 financial results
for all of the rated auto retailers to one degree or another,
depending on geographic locations and brand mix. This down cycle
for auto sales and service has become more protracted than we
expected, and visibility regarding the inevitable upturn is
limited. We are also concerned that the company may be required to
take a goodwill impairment charge in the year ahead, signaling
lower future profitability and cash flows, even if any such non-
cash charge would not affect covenants," S&P relates.
In the first half of 2008, Group 1's revenues declined 2.8%, year
over year, more than expected, and EBITDA also declined 2.8%, year
over year. Both new- and used-vehicle sales are down this year for
all the rated auto retailers. However, Group 1 was able to expand
its parts and service (P&S) revenue, which rose 4.8%, year over
year, in the second quarter compared to flat first-quarter sales
for the peer group. Also in the second quarter, Group 1 expanded
its finance and insurance (F&I) revenue despite lower sales
volumes, while on average, F&I revenue for the peer group fell 6%
in the quarter. Because of the high margins earned from P&S and
F&I, which help cover fixed costs, this revenue is an important
component of the business model. Together, P&S and F&I accounted
for nearly 63% of total gross profit in the second quarter.
Despite the variable cost structure of the auto retailers, their
margins are being pressured in 2008, in part because of a lag
associated with reducing personnel in a down trend, the duration
or magnitude of which is unknown. Also, vehicle prices -- both new
and used -- are down or flat from last year's prices. Group 1's
same-store margins have declined in 2008 for new vehicles, used
vehicles, and P&S.
The ratings on Group 1 reflect the company's high leverage
resulting from an aggressive acquisition strategy combined with
the competitive and cyclical challenges of the automotive retail
industry. The majority of Group 1's 105 automotive dealerships are
in the eastern and central U.S., and the remainder are in
California. Group 1 also has a small international exposure, with
three dealerships in the U.K.
Group 1, along with all the rated retailers to varying degrees,
faces a potential goodwill impairment charge under FAS 142, non-
cash but of a material size, if the business climate outlook
remains depressed. Although the timing of such a charge is
uncertain and is less likely to be required for Group 1 in 2008,
such a charge would signal a permanent reduction in the value of
previously acquired franchises and, thus, lower expected future
profits and likely lower credit measures.
"The negative outlook reflects our concerns about the depth and
length of the economic downturn and Group 1's ability to maintain
EBITDA levels appropriate for the rating. If lower profits lead to
leverage that remains close to 6x through 2009, we could lower the
rating in mid-2009 or sooner. This could occur with a continuing
weak U.S. economy and the company's inability to reduce its cost
base to the lower revenue level, or if cash outlays for stock
repurchases, dividends, capital investments, and acquisitions are
deemed aggressive in our opinion. Alternatively, we could revise
the outlook back to stable if Group 1 is able to offset the
difficult auto sales with its good brand mix, revenue diversity,
focus on operating efficiencies, and positive free operating cash
flows. We do not expect to revise the outlook to positive in the
next year, given market conditions," S&P says.
GSAMP TRUST: Moody's Junks Two Class M Certificates
---------------------------------------------------
Moody's Investors Service downgraded the ratings of five tranches
issued by GSAMP Trust 2004-SEA2. The collateral backing the
transaction consists primarily of first lien adjustable-rate and
fixed-rate "scratch and dent" mortgage loans.
Complete rating actions are:
Issuer: GSAMP Trust 2004-SEA2
-- Cl. M-1, downgraded from Aa2 to A3
-- Cl. M-2, downgraded from Ba2 to B3, on review for possible
downgrade
-- Cl. M-3, downgraded from B3 to Caa3
-- Cl. M-4, downgraded from Caa3 to C
-- Cl. M-5, downgraded from Ca to C
The action is part of an ongoing, wider review of all RMBS
transactions, in light of the deteriorating housing market and
rising delinquencies and foreclosures. Many "scratch and dent"
pools are exhibiting higher than expected rates of delinquency,
foreclosure, and REO. The rating adjustments will vary based on
level of credit enhancement, collateral characteristics, pool-
specific historical performance, quarter of origination, and other
qualitative factors.
HANOVER CAPITAL: June 30 Balance Sheet Upside-Down by $71.9 MM
--------------------------------------------------------------
Hanover Capital Mortgage Holdings Inc. disclosed its financial
results for the three and six months ended June 30, 2008.
At June 30, 2008, the company's consolidated balance sheet showed
$62.2 million in total assets, $134.1 million in total
liabilities, resulting in a $71.9 million stockholders' deficit.
In comparison, at Dec. 31, 2007, the company reported total assets
of $135.2 million, total liabilities of $160.8 million, and a
stockholders' deficit of $25.6 million.
The company reported a net loss for the quarter ended June 30,
2008 of $22.9 million, compared to a net loss of $11.4 million for
the same period of 2007. This increase in net loss is due to an
increase in interest expense in connection with the conversion of
the company's short-term revolving financing for its primary
portfolio of subordinate mortgage-backed securities to a fixed-
term financing that was due Aug. 9, 2008 -- Repurchase Transaction
-- and an increase in mark to market losses of mortgage assets net
of free standing derivatives.
Significant changes in the company's financial position are
primarily related to the decline in the estimated fair value of
its Subordinate MBS portfolio and the reduction in the size of its
whole-pool Fannie Mae and Freddie Mac mortgage-backed securities
-- Agency MBS -- portfolio.
For the company's Subordinate MBS portfolio, the mark to market
loss increased by $7.1 million and $28.2 million for the three and
six months ended June 30, 2008, compared to the same periods of
2007. The increase in market loss is due to other-than-temporary
declines in estimated fair value. Similar other-than-temporary
impairments were not experienced during the same period of 2007.
Net interest income decreased for this same period, compared to
2007, due to the increased interest expense associated with the
new fixed-term financing facility the company established in
August 2007. The company had no gains on sales of securities for
the three and six months ended June 30, 2008, compared to gains of
$200,000 for the same periods in 2007.
As of June 30, 2008, the gross unrealized loss for the company's
Subordinate MBS portfolio is considered to be an other-than-
temporary impairment. The company said the declines in the
estimated fair value of its Subordinate MBS portfolio appear to be
attributable to increases in market interest rates and credit
spreads and changes in the loss or repayment assumptions affecting
cash flows. The company is unable to predict when a recovery will
occur and the level of recovery.
As of June 30, 2008, the overall estimated fair value of the
company's Subordinate MBS portfolio was below the contractual
repayment amount of the Repurchase Transaction of $84.9 million by
approximately $41.4 million. The lender had recourse only against
its Subordinate MBS and not to any other asset or right. GAAP
precludes the company from considering the contractual repayment
amount of the Repurchase Transaction, and its recourse limitation,
as the estimated fair value or a realizable value for its
Subordinate MBS. Therefore, without considering the contractual
repayment obligation, the estimated fair value of the Subordinate
MBS securities declined significantly, and the company recorded an
other-than-temporary impairment of $40.2 million during the six
months ended June 30, 2008.
In addition the company did not have sufficient funds to retire or
refinance the outstanding principal under the Repurchase
Transaction upon termination of the financing on Aug. 9, 2008 and,
in accordance with the terms of the Repurchase Transaction,
surrendered the pledged securities to settle the contractual
repayment amount.
The company continues to maintain its portfolio of Agency MBS.
The effect on the company's financial position as of June 30,
2008, of surrendering the portfolio (effective Aug. 9, 2008) to
satisfy the Repurchase Agreement liability is the elimination of
the company's liability under the Repurchase Agreement, the
elimination of the Subordinate MBS portfolio and elimination of
certain deferred costs that were being amortized to the due date
of the Repurchase Agreement.
Effect of Surrender of Subordinate MBS
As of June 30, 2008
Liability under Repurchase Agreement $84.0 million
Less - Carry value of Subordinate MBS
surrendered 43.5 million
Less - Carry value of certain costs being
amortized to Aug. 9, 2008 .3 million
-------------
Pro-Forma Gain upon surrender $40.2 million
The gain will be recognized in income during the third quarter of
2008.
John A. Burchett, the company's president and chief executive
officer, commented, "The market for mortgage-related securities
continued to deteriorate during the second quarter. As a result,
we repaid our repo line using the collateral as payment as
outlined above. We continue to seek additional capital or
alternatives for the future and are working with our financial
advisor for this purpose."
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?3116
Going Concern Doubt
As reported in the Troubled Company Reporter on April 10, 2008,
Grant Thornton LLP, in New York, expressed substantial doubt about
Hanover Capital Mortgage Holdings Inc.'s ability 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 net loss for the year ended
Dec. 31, 2007, which included $76.0 million in impairment losses
on mortgage-backed securities.
Due to unprecedented turmoil in the mortgage and capital markets
during 2007 and into 2008, the company incurred a significant loss
of liquidity over a short period of time. The company experienced
a net loss of approximately $46.3 million for the six months ended
June 30, 2008, and its current operations are not cash flow
positive. Additional sources of capital are required for the
company to generate positive cash flow and continue operations
beyond 2008.
About Hanover Capital
Based in Edison, N.J., Hanover Capital Mortgage Holdings Inc.
(AMEX: HCM) -- http://www.hanovercapitalholdings.com/-- is a
mortgage real estate investment trust. The company invests in
prime mortgage loans and mortgage securities backed by prime
mortgage loans.
IMAX CORP: June 30 Balance Sheet Upside-Down by $88,788,000
-----------------------------------------------------------
IMAX Corp. reported financials for the second quarter ended
June 30, 2008. At June 30, 2008, IMAX Corp.'s balance sheet
showed total assets of $216.4 million and total liabilities of
$305.2 million, resulting in an $88.7 million stockholders'
deficit.
For the quarter ended June 30, 2008, the company reported a net
loss of $12.1 million over $21.1 million revenues, compared to a
net loss of $4.5 million over $27.1 million revenues for the same
period last year.
"We are very pleased with the significant strategic progress made
thus far in 2008, despite the fact that, as we have previously
discussed, our financial results do not yet reflect the pieces
being put in place that should return IMAX to profitability," IMAX
Co-Chairmen and Co-CEOs Richard L. Gelfond and Bradley J. Wechsler
commented.
"Importantly, the execution of our digital roll out launched on
time, our future film slate is strong and growing, our pipeline of
new business remains robust, we have the largest systems backlog
in our history reflecting our joint revenue sharing strategy, and
we believe we have the necessary financing in place to fund our
joint venture initiative. Looking ahead, we believe the
combination of having approximately 50 digital systems in
operation by year-end and the strength of our second half film
slate, led by The Dark Knight: The IMAX Experience, should drive
improved second half financial performance. We continue to expect
profitability in 2009."
The company signed agreements for six IMAX theatre systems in the
second quarter of fiscal 2008 compared to agreements for six IMAX
theatre systems in the second quarter of 2007. At the end of the
second quarter, the company's backlog consisted of a record 246
theatre systems compared to 79 theatre systems in backlog at the
end of last year's second quarter. Included in the 2008 and 2007
system backlog totals were 139 and three joint revenue sharing
arrangements, respectively, for which there is no assigned backlog
value. To date, the company has signed contracts for 189 IMAX
Digital theatre systems. In late July, the company delivered its
second set of digital systems to three AMC theatres in the
Philadelphia market and expects the systems to be operational by
next weekend, as planned.
Turning to second quarter financial results, for the three months
ended June 30, 2008, total revenues were $21.2 million, as
compared to $27.1 million reported for the prior year period.
* Systems revenue was $10.6 million versus $14.0 million in the
prior year period. The company installed four theatre
systems in the second quarter, same as last year, however
revenue recognition was deferred on two of those systems due
to contractual rights for digital upgrades.
* Film revenue was $6.6 million during the second quarter of
2008 versus $8.0 million in the second quarter of 2007. This
included IMAX DMR(R) revenues of $2.5 million compared to
$3.8 million in 2007.
* Theatre operations and other revenue of $4.0 million in the
second quarter of 2008 compared to $5.1 million in the second
quarter of 2007.
The company's cash position was $24.6 million as of June 30, 2008,
compared to cash and short term investments of $16.9 million as of
Dec. 31, 2007 and $18.5 million as of June 30, 2007. The
company’s increased cash position includes the private placement
sale of approximately 2.73 million common shares in May of this
year at market prices, and resulting proceeds of approximately
$18 million. The company made its bi-annual interest payment on
its senior notes of $7.7 million in June.
About IMAX
Headquartered in Ontario, Canada, IMAX Corporation (Nasdaq:
IMAX)(TSX: IMX) -- http://www.imax.com/-- is a digital
entertainment and technology company. As of Dec. 31, 2007, there
were 299 IMAX theatres operating in 39 countries. The company's
groundbreaking IMAX DMR digital remastering technology allows it
to digitally transform virtually any conventional motion picture
into the unparalleled image and sound quality.
INTEGRATED MEDIA: June 30 Balance Sheet Upside-Down by $10,412,339
------------------------------------------------------------------
Integrated Media Holdings Inc.'s consolidated balance sheet at
June 30, 2008, showed $1,070,416 in total assets and $11,482,755
in total liabilities, resulting in a $10,412,339 stockholders'
deficit.
At June 30, 2008, the company's consolidated balance sheet also
showed strained liquidity with $652,825 in total current assets
available to pay $9,726,853 in total current liabilities.
The company reported net income of $28,405 on total revenues of
$1,078,614 for the second quarter ended June 30, 2008, compared
with a net loss of $622,230 on total revenues of $1,154,179 in the
same period last year.
Selling, general and administrative expenses for the three months
ended June 30, 2008, amounted to $308,926 which were virtually all
incurred by TeleChem International Inc. Selling, general and
administrative expenses were $537,612 for the three months ended
June 30, 2007.
Interest Expense for the three months ended June 30, 2008, and
2007, was $156,209 and $161,560 respectively. The reduction in
2008 resulted from the reduction in outstanding debt.
The company incurred a loss on derivative liability of $69,730
during the three months ended June 30, 2008, and a gain of
$181,080 during the three months ended June 30, 2007.
Legal expenses of $26,938 were incurred during the three months
ended June 30, 2008, which were significantly less than the
$990,702 incurred during the three months ended June 30, 2007.
The conclusion of the trial stage of the Pediatrix law suit during
2007 accounts for most of the reduction.
The three months ended June 30, 2007, include income from
discontinued operations of $441,154 resulting from the Endavo,
Bidchaser and WV Fiber subsidiaries.
Six Months Results
The company reported a net loss of $371,770 for the first six
months ended June 30, 2008, compared with a net loss of $1,351,517
in the same period last year.
Gross revenues for the six months ended June 30, 2008 and 2007
were $1,930,986 and $2,174,928.
Selling, General and Administrative expenses for the six months
ended June 30, 2008, amounted to $666,582 which were virtually all
incurred by TeleChem. For the six months ended June 30, 2007
selling, general and administrative expenses were $1,392,316.
Interest Expense for the six months ended June 30, 2008, and 2007,
was $289,021 and $338,300 respectively. The reduction in 2008
resulted from the reduction in outstanding debt.
The company incurred a loss on derivative liability of $46,015
during the six months ended June 30, 2008, and a gain of $362,160
during the six months ended June 30, 2007.
Legal expenses of $49,891 were incurred during the six months
ended June 30, 2008, which were significantly less than the
$1,717,255 incurred during the six months ended June 30, 2007.
The conclusion of the trial stage of the Pediatrix law suit during
2007 accounts for most of the reduction.
The six months ended June 30, 2007 include income from
discontinued operations of $882,307 resulting from the Endavo,
Bidchaser and WV Fiber subsidiaries.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?311a
Going Concern Doubt
Malone & Bailey, PC, in Houston, expressed substantial doubt about
Integrated Media Holdings Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditing firm
pointed to the company's recurring losses, negative working
capital, and stockholders' deficit.
About Integrated Media
Headquartered in Sunnyvale, Calif., Integrated Media Holdings Inc.
(OTC BB: IMHI) -- http://www.arrayit.com/-- is a holding company.
Through its merger with TeleChem International Inc., the company
has undertaken a new strategic and business direction to become
primarily a biotechnology company.
TeleChem's business activities are in the life sciences, chemical
trading and disease diagnostics areas. TeleChem's chemicals
division provides customers with the raw materials required for
plastics, water soluble fertilizers, and alternative fuels.
TeleChem entered the biotechnology sector with the creation of the
Arrayit(R) Life Sciences Division in 1996. Because of the public
interest in the Human Genome Project and microarray technology,
TeleChem focused on microarray products and services for the
research, pharmaceutical and diagnostics markets.
INTERMET CORP: Unites States Trustee Forms Creditors' Committee
---------------------------------------------------------------
The United States Trustee for Region 3 appointed five members to
the Official Committee of Unsecured Creditors of Intermet
Corporation and its debtor-affiliates.
The Committee members are:
1. Spectro Alloys Corp.
Attn: Don W oessner
13220 Doyle Path
Rosemount, MN 55068
Phone: 651-480-6118
Fax: 651-438-3714
2. Behr Iron & Steel, Inc.
Attn: Lee Foecking
1100 Seminary Street
Rockford, IL 61104
Phone: 815-987-2610
Fax: 815-987-2606
3. United Steelworkers
Attn: David R. Jury
Five Gateway Center, Room 807
Pittsburgh, PA 15222
Phone: 412-562-2545
Fax: 412-562-2429
4. Omni Source Corporation
Attn: Marlene Eckman Sloat
7575 West Jefferson Boulevard
Fort Wayne, IN 46804
Phone: 260-423-8542
Fax: 260-423-8675
5. Industrial Supply Corporation
Attn: Thomas R. Torp
1 Waterside Crossing, Suite 400
Windsor, CT 06095
Phone: 860-687-5133
Fax: 860-687-5099
Official creditors' committees have the right to employ legal
and accounting professionals and financial advisors, at the
Debtors' expense. They may investigate the Debtors' business and
financial affairs. Importantly, official committees serve as
fiduciaries to the general population of creditors they represent.
Those committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
About Intermet Corporation
Headquartered in Fort Worth, Texas, Intermet Corporation designs
and manufactures machine precision iron and aluminum castings for
the automotive and industrial markets.
On Sept. 29, 2004, Intermet Corporation and its affiliates filed
their chapter 11 petitions (Bankr. E.D. Mich. Case No. 04-67597
through 04-67614). Salvatore A. Barbatano, Esq., at Foley &
Lardner LLP represented the Debtors. When the Debtors filed for
protection from their creditors, they listed $735,821,000 in total
assets and $592,816,000 in total debts. The Debtors' amended plan
of reorganization was confirmed by the Court on Sept. 29, 2005.
The Debtors exited from bankruptcy in November 2005.
The company and its debtor-affiliates again filed for chapter 11
protection on Aug. 12, 2008 (D. Del. Case Nos. 08-11859 to 08-
11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew
S. Barr, Esq., Michael E. Comerford, Esq., at Milbank, Tweed,
Hadley & McCloy LLP is counsel to the Debtors. James E. O'Neill,
Esq., Laura davis Jones, Esq. and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve
as co-counsel to the Debtors. When the Debtors filed for
protection from their creditors, they listed assets of between
$50 million and $100 million and total debts of between $100
million and $500 million. According to William Rochelle of
Bloomberg News, Intermet's debt includes $20 million in revolving
credit agreement, $53 million secured first-lien term loan, and
$70 million second-lien term loan.
INTERMET CORP: Wants to Hire Pachulski Stang as Co-Counsel
----------------------------------------------------------
Intermet Corporation and its debtor-affiliates asked the United
States Bankruptcy Court for the District of Delaware for
permission to employ Pachulski Stang Ziehl & Jones LLP as co-
counsel.
Pachulski Stang will, among others, provide legal advice with
respect to the Debtors' powers and duties as debtors-in-possession
in the continued operation of their business and management of
their property.
The firm's principal attorneys and paralegals presently designated
to represent the Debtors and their current standard hourly rates
are:
Laura Davis Jones, Esq. $775
James E. O'Neill, Esq. $515
Timothy P. Cairns, Esq. $375
Margaret L. Oberholzer $190
The firm has received $195,780 payment prior to the bankruptcy
filing. The firm is current as of the bankruptcy filing, but has
not yet completed a final reconciliation of its prepetition fees
and expenses.
To the best of the Debtors' knowledge, the firm does not hold or
represent any interest adverse to the Debtors' estates.
The Court is set to hear the Debtors' employment application on
Sept. 3, 2008, at 4:00 p.m. Objections are due Aug. 28, 2008, at
4:00 p.m.
The firm can be reached at:
Pachulski Stang Ziehl & Jones LLP
919 North Market Street, 17th Floor, PO Box 8705
Wilmington, DE 19899
Tel: (302) 652-4100
Fax: (302) 652-4400
http://www.pszjlaw.com/
About Intermet Corporation
Headquartered in Fort Worth, Texas, Intermet Corporation designs
and manufactures machine precision iron and aluminum castings for
the automotive and industrial markets.
On Sept. 29, 2004, Intermet Corporation and its affiliates filed
their chapter 11 petitions (Bankr. E.D. Mich. Case No. 04-67597
through 04-67614). Salvatore A. Barbatano, Esq., at Foley &
Lardner LLP represented the Debtors. When the Debtors filed for
protection from their creditors, they listed $735,821,000 in total
assets and $592,816,000 in total debts. The Debtors' amended plan
of reorganization was confirmed by the Court on Sept. 29, 2005.
The Debtors exited from bankruptcy in November 2005.
The company and its debtor-affiliates again filed for chapter 11
protection on Aug. 12, 2008 (D. Del. Case Nos. 08-11859 to 08-
11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew
S. Barr, Esq., Michael E. Comerford, Esq., at Milbank, Tweed,
Hadley & McCloy LLP is counsel to the Debtors. James E. O'Neill,
Esq., Laura davis Jones, Esq. and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve
as co-counsel to the Debtors. When the Debtors filed for
protection from their creditors, they listed assets between
$50 million and $100 million and total debts between $100 million
and $500 million. According to a report of William Rochelle of
Bloomberg News, Intermet's debt includes $20 million in revolving
credit agreement, $53 million secured first-lien term loan, and
$70 million second-lien term loan.
INTERMET CORP: Wants Milbank Tweed as Bankruptcy Counsel
--------------------------------------------------------
Intermet Corporation and its debtor-affiliates asked the United
States Bankruptcy Court for the District of Delaware for
permission to employ Milbank, Tweed, Hadley & McCloy LLP as their
bankruptcy counsel.
On June 24, 2008, prior to the bankruptcy filing, the Debtors
retained Milbank to advise them on various restructuring matters.
Milbank has represented the Debtors in connection with their
restructuring efforts prior to the bankruptcy filing and is
qualified to assist the Debtors in their reorganization efforts.
Milbank will provide, among others, legal services and advise the
Debtors of their rights, powers, and duties and debtors-in-
possession in the continued management of their business.
As of Aug. 12, 2008, the Debtors provided Milbank with $625,000
aggregate advance payment to established a retainer for legal
services rendered or to be rendered. Milbank received payment
from the Debtors on July 29, 2008 of $224,254, on Aug. 4, 2008 of
$328,629, on Aug. 11, 2008 of $235,801, and on Aug. 12, 2008 of
$343,260.
The firm' present standard hourly rates charged by Milbank range
from $700 to $950 for partners, $650 to $850 for of counsel, $275
to $670 for associates and senior attorneys, and $155 t $325 for
legal assistants.
To the best of the Debtors' knowledge, the firm does not hold or
represent any interest adverse to the Debtors' estates.
The Court is set to hear the Debtors' employment application on
Sept. 3, 2008, at 4:00 p.m. Objections are due Aug. 28, 2008, at
4:00 p.m.
The firm can be reached at:
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, NY 10005
Tel: (212) 530-5000
Fax: (212) 530-5219
http://www.milbank.com/
About Intermet Corporation
Headquartered in Fort Worth, Texas, Intermet Corporation designs
and manufactures machine precision iron and aluminum castings for
the automotive and industrial markets.
On Sept. 29, 2004, Intermet Corporation and its affiliates filed
their chapter 11 petitions (Bankr. E.D. Mich. Case No. 04-67597
through 04-67614). Salvatore A. Barbatano, Esq., at Foley &
Lardner LLP represented the Debtors. When the Debtors filed for
protection from their creditors, they listed $735,821,000 in total
assets and $592,816,000 in total debts. The Debtors' amended plan
of reorganization was confirmed by the Court on Sept. 29, 2005.
The Debtors exited from bankruptcy in November 2005.
The company and its debtor-affiliates again filed for chapter 11
protection on Aug. 12, 2008 (D. Del. Case Nos. 08-11859 to 08-
11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew
S. Barr, Esq., Michael E. Comerford, Esq., at Milbank, Tweed,
Hadley & McCloy LLP is counsel to the Debtors. James E. O'Neill,
Esq., Laura davis Jones, Esq. and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve
as co-counsel to the Debtors. When the Debtors filed for
protection from their creditors, they listed assets between
$50 million and $100 million and total debts between $100 million
and $500 million. According to a report of William Rochelle of
Bloomberg News, Intermet's debt includes $20 million in revolving
credit agreement, $53 million secured first-lien term loan, and
$70 million second-lien term loan.
I/0MAGIC CORP: June 30 Balance Sheet Upside-Down by $1,069,761
--------------------------------------------------------------
I/OMagic Corp.'s consolidated balance sheet at June 30, 2008,
showed $5,330,359 in total assets and $6,400,120 in total
liabilities, resulting in a $1,069,761 stockholders' deficit.
The company's consolidated balance sheet at June 30, 2008, also
showed strained liquidity with $4,814,273 in total current assets
available to pay $6,360,201 in total current liabilities.
The company reported a net loss of $2,171,184 on net sales of
$2,205,033 for the second quarter ended June 30, 2008, compared
with a net loss of $839,599 on net sales of $6,487,868 in the
same period in 2007.
A combination of factors affected net sales, including a
$3,100,000 decrease in sales of magnetic data storage products,
and an $800,000 decrease in sales of optical data storage
products.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?313b
Going Concern Doubt
As reported in the Troubled Company Reporter on April 23, 2008,
Swenson Advisors, LLP, in San Diego, Calif., expressed substantial
doubt about I/OMagic Corp.'s ability 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 said that the company has incurred significant
operating losses, has serious liquidity concerns, and may require
additional financing in the foreseeable future.
About I/OMagic Corp.
Headquartered in Irvine, California, I/OMagic Corp. (OTC BB: IOMG)
-- http://www.iomagic.com/-- sells data storage products,
televisions, most of which are high-definition televisions, or
HDTVs, utilizing liquid crystal display, or LCD, technology, and
other consumer electronics products.
ISCO INTERNATIONAL: Posts $2.3 Million Net Loss in 2008 2nd Qtr.
----------------------------------------------------------------
ISCO International Inc. reported a consolidated net loss of
$2.3 million for the second quarter ended June 30, 2008, versus a
consolidated net loss of $832,039 during the same period of 2007.
ISCO reported consolidated net revenues of $2.5 million for the
quarter ended June 30, 2008, versus $3.4 million during the
comparable period of 2007. All 2008 figures include the addition
of Clarity Communication Systems Inc., which was acquired by ISCO
on Jan. 3, 2008.
Gross margins were $1.2 million compared to $1.7 million for the
same period in 2007. The decline in gross margins is the result
of lower hardware shipments for the second quarter of 2008
compared to the second quarter of 2007. Gross margin rates
declined to 47% of revenue in the current period from 50% for the
same period in 2007. This reduction in gross margin rates was the
result of new software contracts where costs were incurred in
advance of revenues earned thereby lowering the gross margin rate.
Hardware gross margin rates were slightly higher than in the prior
year.
"While we are early in the process, we are initiating the many
changes needed to get the company on the right track over the long
term," said Gordon Reichard, Jr. chief executive officer of ISCO.
"We have cut operating expenses and have realized almost $600,000
of savings in Q2 over Q1 while at the same time refocusing
activities and resources on sales and marketing. So far this
year, we have already started to see our hardware gross margins
improve due to the increased focus on our differentiated AIM
products. As we introduce more products and begin to refine our
product packaging, positioning and channel strategy, we're looking
for this trend to continue."
"The basic foundation of our strategy remains focused on
transitioning our behavior to a sales and market driven
organization. As we continue implementation of our plans, our
prospects for long term success increase but it will take time.
ISCO shareholders should continue to expect to see a very
different company quarter over quarter."
Balance Sheet
At June 30, 2008, the company's consolidated balance sheet showed
$28.2 million in total assets, $21.7 million in total liabilities,
and $6.5 million in shareholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?313c
Going Concern Doubt
As reported in the Troubled Company Reporter on April 18, 2008,
Grant Thornton LLP, in Chicago, expressed substantial doubt about
ISCO International Inc.'s ability 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 reported that the company incurred a net loss of
approximately $6.4 million during the year ended Dec. 31, 2007,
and, as of that date, the company's accumulated deficit was
approximately $171.0 million. The auditing firm also said that
the company has consistently used, rather than provided, cash in
its operations.
About ISCO International
Headquartered in Elk Grove Village, Ill., ISCO International Inc.
(AMEX: ISO) -- http://www.iscointl.com/-- is a supplier of RF
management and interference-control solutions for the wireless
telecommunications industry.
JABIL CIRCUIT: Fitch Affirms BB+ Issuer Default Rating
------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating and
outstanding debt ratings of Jabil Circuit Inc. as:
-- IDR 'BB+';
-- Senior unsecured revolving credit facility 'BB+';
-- Senior unsecured debt 'BB+'.
The Rating Outlook is Stable.
The ratings and outlook reflect these considerations:
-- Fitch expects leverage (total debt/operating EBITDA), which
Fitch estimated to be 2.3 times (or 3.1x when adjusted for
off-balance sheet debt and operating leases) for the latest
twelve months ended May 31, 2008, will decline closer to 2.0x
over the next few quarters;
-- Fitch believes that Jabil will continue achieving better than
average revenue growth relative to the overall EMS market as
it gains market share from smaller rivals based on solid
execution and a strong customer base, the diversification of
which continues to increase across multiple end-markets;
-- Fitch expects EBITDA margins to remain near 5% over the
intermediate-term although a sustainable increase in EBITDA
profitability beyond that could lead to positive rating
action. Prior expectations for significant improvement in
profitability have not been met in recent years due primarily
to industry trends and competitive pressures;
-- Annual free cash flow on a normalized basis should average
$100 million or greater, although Fitch believes meaningful
upside will be constrained by significant capital spending
needs relative to EBITDA. Quarterly free cash flow is
expected to remain volatile due to the industry's high
working capital intensity;
-- Fitch anticipates Jabil will opportunistically pursue
strategic acquisitions to enhance its vertical integration
capabilities going forward, which Fitch believes could be at
least partially debt financed.
Fitch believes that several macroeconomic trends including rising
commodity prices, higher labor costs in traditionally low cost
manufacturing regions, higher transport costs due to rising fuel
prices well as concerns for a broader global economic slowdown
could negatively impact profitability for Jabil and other EMS
vendors over the next several quarters. However, excluding
concerns for a global economic environment, Jabil could also
benefit from rising commodity and labor prices relative to many
predominantly Asian based EMS and ODM competitors based on its
global manufacturing footprint.
The ratings are supported by these considerations:
-- Strong management team with a track record of delivering best
in class execution with a disciplined approach to growing the
business;
-- Advantages in scale as one of the largest of the tier 1 EMS
vendors with a balanced global manufacturing footprint,
including a strong mix of facilities in low-cost regions;
-- Significant exposure to faster growing consumer and mobile
handset end markets as well as the industrial, medical and
automotive markets;
-- Significant working capital balance provides an alternate
source of liquidity during business downturns.
Rating concerns include these:
-- Need for vertical integration represents an on-going
strategic shift and could lead to additional debt financed
acquisitions;
-- Industry pricing pressure, driven by excess manufacturing
capacity well as struggling competitors, has driven
profitability levels below expectations for all tier one
North American EMS providers over the past several years;
-- Significant execution risks in managing a large global
manufacturing operation are compounded by the inherently low
profit margins in the business model.
Liquidity as of May 31, 2008, was solid consisting primarily of
$860 million in cash and a fully available $800 million senior
unsecured revolving credit facility which expires in July 2012.
Jabil also utilizes two accounts receivable securitization
facilities for additional liquidity purposes, including an on-
balance sheet $200 million committed foreign receivables facility
expiring in April 2009 and an off balance sheet $280 million North
American receivables securitization facility expiring March 2009.
Total debt as of May 31, 2008 was $1.4 billion and consisted
primarily of these:
-- $300 million in 5.875% senior unsecured notes due July 2010;
-- $400 million senior unsecured term loan due July 2012;
-- $400 million in 8.25% senior unsecured notes due March 2019;
and
-- $152 million outstanding under the aforementioned foreign
receivables facility.
JED OIL: Gets Creditors Protection Under CCAA Until September 15
----------------------------------------------------------------
JED Oil Inc. and its subsidiaries, JED Production Inc. and JED Oil
(USA) Inc. have obtained creditor protection under the Companies'
Creditors Arrangement Act (Canada) pursuant to an Order obtained
on Aug. 13, 2008, from the Court of Queen's Bench of Alberta,
Judicial District of Calgary.
While under CCAA protection, the company continues with its day-
to-day operations. The board of directors of JED determined that
this was in the best interests of the company and of its
stakeholders, after the disclosed petition by a group of the
company's trade creditors for a CCAA order and the potential of
the holders of JED's 10% Senior Subordinated Convertible Notes to
put the company into receivership.
CCAA protection stays creditors and others from enforcing rights
against the company and affords it the opportunity to restructure
its financial affairs. The Court has granted CCAA protection for
an initial period of 30 days expiring Sept. 15, 2008, to be
extended thereafter as the Court deems appropriate. If by
Sept. 15, 2008, JED has not filed a Plan of Arrangement, or
obtained an extension of the CCAA protection, creditors and others
will no longer be stayed from enforcing their rights.
While under CCAA protection, JED's board maintains its usual role
and its management remains responsible for the day-to-day
operations of the company, under the supervision of a Court-
appointed monitor who will be responsible for reviewing JED's
ongoing operations, assisting with the development and filing of
the Plan, liaising with creditors and other stakeholders and
reporting to the Court. The board and management of JED will also
be responsible for formulating the Plan for restructuring JED's
affairs. The company is still in the process of developing its
Plan, but as diclosed JED has already undertaken various steps to
dispose of enough assets to redeem the Notes and pay its trade
creditors in full. The company's Plan will not deviate
substantially from the efforts already in progress. The Order
extends the bid deadline for the sale process of the Steen assets
by CB Securities Inc. from Sept. 17, 2008, to Sept. 24, 2008, and
the closing deadlines by two weeks to Nov. 15, 2008, if
shareholder approval is not required for the sale, or Dec. 8,
2008, if it is required.
Although CCAA protection enables the company to continue with its
day-to-day operations until its CCAA status changes, the
implications for JED's shareholders are less clear. The company's
intention continues to be the redemption of the Notes and
repayment of all creditors in full, and then to continue to
operate. However the Plan must be approved by the requisite
number and value of the affected creditors, as required by law, as
well as by the Court. If the Plan is not so approved it is
possible that the Company would be placed into receivership or
bankruptcy. Every effort will be made to ensure that all
stakeholders of JED are kept informed of developments as they
occur.
The Order appointed Ernst & Young Inc. as the company's Monitor.
Inquiries may be directed to:
Neil Narfason, CA-CIRP, CBV
Senior Vice President, Transaction Advisory Services
Ernst & Young Inc.
Tel (403) 206-5067
Email neil.narfason@ca.ey.com
About JED Oil
JED Oil Inc. (AMEX: JDO) -- http://www.jedoil.com/-- is an
independent energy company that explores, develops, and produces
natural gas, crude oil, and natural gas liquids in Canada and the
United States. As of Dec. 31, 2007, it had total proved reserves
of 3,035,000 of barrels of oil equivalent. The company was
founded in 2003 and is headquartered in Didsbury, Canada
As reported in the Troubled company Reporter on June 5, 2008,
JED Oil Inc.'s consolidated balance sheet at March 31, 2008,
showed $90.5 million in total assets, $76.4 million in total
liabilities, and $28.5 million in convertible redeemable preferred
shares, resulting in a $14.4 million total stockholders' deficit.
At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $15.2 million in total current
assets available to pay $72.0 million in total current
liabilities.
Going Concern Doubt
At March 31, 2008, the company had a consolidated working capital
deficiency of $56.8 million and a stockholder's deficiency of
$14.4 million. The company requires additional funds to maintain
operations and discharge liabilities as they become due. These
conditions raise substantial doubt about the company's ability to
continue as a going concern.
The company does not currently have a loan facility.
JFPS HOLDING: Case Summary & 18 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: JFPS Holding Co. of Georgia, LLC
505 13th Street
Augusta, GA 30901
Bankruptcy Case No.: 08-11752
Chapter 11 Petition Date: August 22, 2008
Court: Southern District of Georgia (Augusta)
Judge: Hon. Susan D. Barrett
Debtors' Counsel: James C. Overstreet, Jr., Esq.
Klosinski Overstreet, LLP
#7 George C. Wilson Ct.
Augusta, GA 30909
Tel: (706) 863-2255
Fax: (706) 863-5885
Email: jco@klosinski.com
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
A copy of JFPS's petition is available for free at:
http://bankrupt.com/misc/gasb08-11752.pdf
LAKE TYE: Voluntary Chapter 11 Case Summary
-------------------------------------------
Debtor: Lake Tye Building LLC
14090 Fryelands Blvd., #200
Monroe, WA 98272
Bankruptcy Case No.: 08-15340
Chapter 11 Petition Date: August 21, 2008
Court: Western District of Washington (Seattle)
Judge: Thomas T. Glover
Debtor's Counsel: Craig R. Elkins, Esq.
(celkins@elkinslawgroup.com)
3409 McDougall Ave Ste 288
Everett, WA 98201
Tel: (425) 317-9000
Total Assets: $8,500,000
Total Debts: $5,764,000
The Debtor did not file a list of 20 largest unsecured creditors.
LAS VEGAS MONORAIL: Fitch Maintains CC Rating on $451MM Rev. Bonds
------------------------------------------------------------------
The Director of the State of Nevada Department of Business and
Industry's $451.4 million in outstanding Las Vegas Monorail
project revenue bonds, first tier, series 2000 remains at 'CC' by
Fitch Ratings. The Las Vegas Monorail Co. is the nonprofit
public-benefit corporation responsible for the project. The
Rating Outlook is Negative. A 'CC' category rating means that
default of some kind appears probable. Fitch downgraded the bonds
to 'CC' in July 2007.
The bonds are insured by Ambac Assurance Corporation. However,
after the withdrawal of its rating of Ambac, Fitch's rating on the
first tier project revenue bonds reflects only the underlying
rating. Fitch does not rate the $149.2 million in outstanding Las
Vegas Monorail project revenue bonds, second tier, series 2000,
and the $48.5 million in outstanding Las Vegas Monorail project
revenue bonds, third tier, series 2000.
Fitch's 'CC' rating and Negative Outlook on the first tier bonds
reflects an extremely constrained financial environment stemming
from continued declines in monthly revenues for the first six
months of calendar 2008 as compared to the first six months of
2007 despite an approximate 3% increase in ridership attributed to
a fare reduction. Strong competition from buses on the Las Vegas
strip and taxis continues to contribute to the monorail's
deteriorating financial position. Despite management's efforts to
aggressively raise fares on Jan. 1 2006, fare revenues failed to
grow to levels sufficient to pay debt service. Similarly,
management's fare reduction in 2007 failed to grow ridership and
maximize revenues. Fitch anticipates available internal liquidity
to continue to be drained consistent with the previous estimate in
June 2007 and last for approximately two years.
While year-to-date average daily ridership increased by 9.6% to
22,412 from 20,451 in 2007, primarily due to a reduction in the
unlimited daily fee to $9 from $15 which accounts for
approximately 53 % of total tickets sold, it resulted in average
daily revenues declining by 4.6% to $81,547. The average fare in
June 2008 fell to $3.64 from $3.82 in June 2007. Furthermore,
year-to-date ticket sales have declined to $14.8 million from
$15.5 million in 2007 or approximately 4.5%. Given the trend in
the first six months, Fitch believes there is a strong likelihood
that total fare revenues for 2008 will be lower than last year
despite increased ridership.
Monorail demand remains weak, in part due to the continued lack of
aggressive marketing partnerships with the casinos. To the extent
management's efforts are more successful than in the past,
liquidity may last longer. Fitch cannot rule out the possibility
of additional fare adjustments, including reductions, to build
ridership with the goal of establishing a firm base level of
demand with the potential for further growth. Fitch believes the
monorail retains some ability to increase ridership levels if it
is perceived that the monorail provides a superior competitive
means of transportation. Fares remain unchanged from 2007 rates,
except for the unlimited daily ride that decreased in May 2007.
With higher than expected sensitivity to the fare increase and an
overall lower base of ridership, fare revenues continue to be
insufficient to meet the monorail's debt service obligations.
After the recent July 2008 debt service payment, debt service
reserve fund amounts are $35.1 million and $8.5 million for the
first and second tiers, respectively. Beginning in January 2008
and continuing in July 2008 there have been draws from the first
and second tier debt service reserve funds. Internal liquidity
consisting of the first-tier bonds debt service reserve fund and
the second-tier bonds debt service reserve fund only provides a
near-term cushion to lower than expected fare revenues and are
available to pay debt service. Additionally, excess proceeds in
the construction fund and indemnification account total
approximately $2.3 million and can also be used to pay debt
service. However, due to continued declines in ridership and
revenues, Fitch estimates that fare revenues combined with
internal liquidity will likely not be adequate to meet first-tier
bonds debt service obligations beyond 2010, while the second-tier
bonds would encounter payment problems earlier. Based on this
analysis, resources would not be sufficient to make third-tier
bonds debt service payments, which begin in 2012. Debt service
payment problems may only be marginally deferred with better than
expected ridership levels.
LVMC is required to set rates so that revenues available after
operations and maintenance expenses cover first-tier bonds debt
service at least 1.40 times and all debt service obligations by
1.10x. LVMC is currently not in compliance with this covenant.
Fitch believes it is unlikely that LVMC will meet this covenant
for the foreseeable future given the significantly lower than
expected financial performance.
The first-tier bonds are limited obligations payable from monorail
fare and other operating revenues after operations and maintenance
expenses and prior to the payment of second- and third-tier bonds.
The monorail project consists of the upgrade of an existing 0.8-
mile monorail between the MGM Grand Hotel and Casino to Bally's
Hotel and Casino and construction of three miles of new guideway
from Bally's north to the Sahara Hotel and Casino. Seven stations
are located along the alignment serving major hotels, attractions,
and the Las Vegas Convention Center along the Las Vegas Strip.
Monorail management continues to analyze plans to extend the
monorail to Las Vegas McCarran International Airport in order to
enhance ridership.
LAWRENCE REDMAN: Involuntary Chapter 11 Case Summary
----------------------------------------------------
Alleged Debtor: Lawrence Eugene Redman
269 Argonne Ave.
Long Beach, CA 90803
Case Number: 08-21925
Involuntary Petition Date: August 4, 2008
Court: Central District of California (Los Angeles)
Judge: Ernest M. Robles
Petitioner's Counsel: David B. Golubchik
Levene Neale Bender Rankin & Brill LLP
10250 Constellation Blvd. Ste. 1700
Los Angeles, CA 90067
Tel (310) 229-1234
Email dbg@lnbrb.com
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Integrated Financial Corporate Debt $ 450,000
Associates Inc.
7785 W. Sahara Ave. Ste. 100
Las Vegas, NV 89117
Compass FP Corp. Corporate Debt $8,432,575
333 Seventh Ave. 3rd Fl.
New York, NY 10001
Marcie Signorelli Employee Wages $9,006,617
Tel (310) 229-1234
LINENS N THINGS: Outlines Plan & Bankruptcy Exit by 2009
--------------------------------------------------------
Linens Holding Co. and its debtor-affiliates and subsidiaries
have prepared a plan of reorganization outlining their emergence
from bankruptcy in early 2009, and certain reversal of
strategies, the New York Post reports.
The $700,000,000 debtor-in-possession financing arranged by
General Electric Capital Corp. previously required the Debtors to
deliver terms of a proposed plan of reorganization by August 1,
2008 to to the DIP Agents, the ad hoc group of holders of notes
issued by the Debtors, and the Official Committee of Unsecured
Creditors.
The Debtors have negotiated with their major suppliers to support
their Trade Vendor Payment Program approved by the United States
Bankruptcy Court for the District of Delaware. Forty major
vendors including Springs Global US, the Yankee Candle Company,
Croscill Home Fashions, and M. Block & Sons, have recently agreed
to participate in the credit program, which provides letters of
credit of up to $100,000,000.
James Covert of the Post relates that under the Plan, the Debtors
will reverse strategies introduced after they were taken private
in 2005 by Leon Black's Apollo Management for $1,300,000,000.
Among those strategies was a shift to splashy clearance sales and
product promotions.
The Debtors are planning to return Linens 'n Things to an
"everyday, low price" model it had followed during its earlier
years as a public company, Mr. Covert says, quoting unnamed
sources familiar with the matter. He adds that the Debtors will
focus on improving the quality of their merchandise and keeping
shelves stocked in timely fashion.
Industry insiders predict that the Debtors, which will close a
quarter of its stores, will be squeezed by overhead costs as the
U.S. economy continues to slow down.
Still, industry insiders fret the downsized company, which will
lose more than a quarter of its stores, will be squeezed by
overhead costs as the economy continues to slow down, the Post
says.
"Consumers are trained, and once you get them stuck on
promotions, it's hard to get them unstuck," the Post quoted Britt
Beemer, president of retail consultant, America's Research Group.
The terms of the Debtors' $700,000,000 DIP Credit Facility, which
may still be amended, provide that the Debtors will default on
the postpetition loans if they fail to:
-- file the Plan and Disclosure Statement by August 29;
-- obtain approval of the Disclosure Statement by October 12;
-- complete the solicitation of the Plan and Disclosure
Statement by November 17; and
-- obtain a confirmation order by December 1.
Clifton, New Jersey-based 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 Dec. 29, 2007. The company is a destination
retailer, offering one of the broadest and deepest selections of
high quality brand-name as well as private label home furnishings
merchandise in the industry. Linens 'n Things has some 585
superstores (33,000 sq. ft. and larger), emphasizing low-priced,
brand-name merchandise, in more than 45 states and about seven
Canadian provinces. Brands include Braun, Krups, Calphalon,
Laura Ashley, Croscill, Waverly, and the company's own label.
Linens 'n Things was acquired by private equity firm Apollo
Management in 2006.
On May 2, 2008, these Linens entities filed chapter 11 petition
(Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things,
Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834),
Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC
(08-10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838),
LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT
Virginia LLC (08-10841), LNT Merchandising Company LLC (08-10842),
LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844).
Judge Christopher S. Sontchi presides over the case.
The Debtors' bankruptcy counsels are Mark D. Collins, Esq., John
H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton &
Finger, P.A., provide Linens 'n Things with bankruptcy counsel.
The Debtors' special corporate counsel are Holland N. O'Neil,
Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq.,
Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan,
Lewis & Bockius, LLP. The Debtors' restructuring management
services provider is Conway Del Genio Gries & Co., LLC. The
Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of
Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is
Kurtzman Carson Consultants, LLC. The Debtors' consultants are
Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors'
investment bankers are Financo, Inc., and Genuity Capital Markets.
LINENS N THINGS: Court Approves Sale of Leases to Smart & Final
---------------------------------------------------------------
Judge Christopher S. Sontchi of the United States Bankruptcy Court
for the District of Delaware has approved the proposed sale of
certain leases by Linens Holding Co. and its debtor-affiliates to
Smart & Final Stores LLC, pursuant to certain agreements of
assumption and assignment. The Assumed Leases consist of these
leases and related rights:
(1) Lease Agreement between DS Lone Tree Plaza, LLC, and
Donahue Schriber Asset Management Corporation, as
landlord, and LNT West, Inc., as tenant, for the premises
located at 5491 Lone Tree Way, in Brentwood, California;
(2) Lease Agreement between Canyon Springs Associates, Ltd.,
as landlord, and LNT West, Inc., as tenant, for the
premises located at 2744 Canyon East Spring Parkway, in
Riverside, California; and
(3) Lease Agreement between Moorpark Marketplace, LLC, and
Tesoro Village Properties, LLC, as landlord, and LNT West,
Inc., as tenant.
The Court held that the Assumed Leases may be assumed by the
Debtors, and assign to Smart & Final free and clear of all
encumbrances. Judge Sontchi noted that all objections to the
request with respect to the Assumed Leases that have not been
withdrawn, waived, or settled are overruled on the merits.
The total consideration to be paid by Smart & Final to the
Debtors is $850,000, which consists of:
Lease Amount
----- ------
Riverside Lease $400,000
Union City Lease 250,000
Brentwood Lease 100,000
Moorpark Lease 100,000
Judge Sontchi directed the Debtors to pay the cure amounts for
each of the Assumed Leases immediately following the later of the
closing of the sale, or the parties reaching agreements as to the
appropriate Cure Amount. Judge Sontchi maintained that under no
condition will Smart & Final have any direct or indirect
responsibility relative to the payment of the Cure Amounts.
The closing or assignment of the Assumed Leases will take place
on or before August 31, 2008, provided that certain co-tenants at
the Closing Stores' location provide written waivers resolving
any objections they may have to Smart & Final's intended use of
the premises. In the event that the Waiver Letters are not in
place by August 28, the Debtors may bring any disputed use clause
issue before the Court at the hearing scheduled on the same date.
Absent execution of the Waiver Letters or Court order addressing
any use clause issues, the parties will be under no obligation to
consummate the transactions contemplated by the Order. Judge
Sontchi further said that the effective date of the assignment
will be September 1, 2008, and Smart & Final will have no
obligation with respect to liabilities accruing prior to that
date.
Clifton, New Jersey-based 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 Dec. 29, 2007. The company is a destination
retailer, offering one of the broadest and deepest selections of
high quality brand-name as well as private label home furnishings
merchandise in the industry. Linens 'n Things has some 585
superstores (33,000 sq. ft. and larger), emphasizing low-priced,
brand-name merchandise, in more than 45 states and about seven
Canadian provinces. Brands include Braun, Krups, Calphalon,
Laura Ashley, Croscill, Waverly, and the company's own label.
Linens 'n Things was acquired by private equity firm Apollo
Management in 2006.
On May 2, 2008, these Linens entities filed chapter 11 petition
(Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things,
Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834),
Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08-
10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT
Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT
Virginia LLC (08-10841), LNT Merchandising Company LLC (08-10842),
LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844).
Judge Christopher S. Sontchi presides over the case.
The Debtors' bankruptcy counsels are Mark D. Collins, Esq., John
H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton &
Finger, P.A., provide Linens 'n Things with bankruptcy counsel.
The Debtors' special corporate counsel are Holland N. O'Neil,
Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq.,
Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan,
Lewis & Bockius, LLP. The Debtors' restructuring management
services provider is Conway Del Genio Gries & Co., LLC. The
Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of
Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is
Kurtzman Carson Consultants, LLC. The Debtors' consultants are
Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors'
investment bankers are Financo, Inc., and Genuity Capital Markets.
L.I.D. LTD: Gets Court Permission to Revise Disclosure Statement
----------------------------------------------------------------
BankruptcyLaw360 says the U.S. Bankruptcy Court for the Southern
District of New York agreed to a proposal by L.I.D. Ltd. to modify
its plan of liquidation and disclosure statement. The Court,
though, expressed initial reservations about some of the revisions
being discussed by L.I.D. and its lenders, BankruptcyLaw360 adds.
As reported by the Troubled Company Reporter on July 28, 2008,
L.I.D. Ltd. filed with the Court a Chapter 11 plan of liquidation
and a disclosure statement explaining that plan. A hearing was
initially set for Aug. 20, 2008, to consider approval of the
adequacy of the Debtor's disclosure statement.
The plan contemplates the utilization of cash held by its estate
and the liquidation of the Debtor's remaining assets which consist
of (i) claims the Debtor hold which are presently pursued through
litigation; (ii) about $1,000,000 in cash; and (iii) a $257,000
net operating loss carry back receivable. The plan provides the
creation of certain bank accounts to hold proceeds of the wind-
down of the Debtor's assets. The plan further provides for the
appointment of a distribution agent to facilitate the recovery of
assets.
The Debtor has commenced 35 adversary proceedings to certain
entities -- including Zale Corp., Five T. Diamonds Corp., Janel
Manufacturing Co. Inc., Palomar Jewelers Inc., and Benton
Enterprises -- seeking money judgment to collect goods with
respect to its accounts receivable.
The Debtor sold certain of its assets to Bidz.com Inc., AV Jewelry
of New York, Fairway Diamond Inc. and Kiran Jewels Inc. for
$32,850,000 under an asset purchase agreement dated May 14, 2008.
A full-text copy of the Assets Purchase Agreement is available for
free at:
http://ResearchArchives.com/t/s?2c2e
The proceeds of the sale were distributed to the banks including
(i) a $1,117,500 in expenses related to the coast associated with
the sale of the Debtor's assets, which payment was treated as a
reduction of the banks' secured claims.
About L.I.D Ltd.
Headquartered in New York, L.I.D. Ltd., a jeweler, filed a chapter
11 petition on March 17, 2007 (Bankr. S.D. N.Y. Case No. 07-10725)
Avrum J. Rosen, Esq., at The Law Offices of Avrum J. Rosen and
Rochelle R. Weisburg, Esq., at Shiboleth, Yisraeli, Roberts &
Zisman LLP represent the Debtor in its restructuring efforts.
No case trustee, examiner, or official committee of unsecured
creditors has been appointed in the case. When the Debtor sought
protection from its creditors, it listed total assets of
$157,784,935 and total debts of $143,867,465.
MERVYN'S LLC: Gets Final OK to Access $465MM Wachovia DIP Facility
------------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
authorized Mervyn's LLC to obtain, on a final basis, up to
$465 million in debtor-in-possession financing from a group of
lenders led by Wachovia Capital Finance Corporation (Western) as
agent.
The DIP financing was approved by the court with the support of
the Debtor's Official Committee of Unsecured Creditors. All
objections were resolved or withdrawn.
The company previously received interim approval of the DIP
financing facility on July 31, 2008.
The DIP financing and cash generated from operations will be used
to continue to pay vendors and employees, as well as to provide
operational and financial stability as Mervyns proceeds with its
restructuring. The company is now in compliance with all of the
terms and conditions of the DIP financing agreement.
"The Court's approval of our DIP financing is a significant step
in our reorganization process and one we are pleased to have
accomplished," said John Goodman, Chief Executive Officer of
Mervyns. "Our DIP financing provides Mervyns with the liquidity
and stability it needs to continue serving our customers and
meeting our obligations to vendors. With this final DIP financing
in place and our financial position now strengthened, we are able
to maintain our operations while continuing our discussions with
creditors as we focus on emerging from bankruptcy."
"We appreciate the ongoing support of our loyal customers, trusted
vendors, and hard working employees as we progress through our
restructuring," Mr. Goodman concluded.
As previously reported, Mervyn's will close 26 stores by late
October or early November this year, with closing sales scheduled
to begin on Aug. 28, 2008.
About Mervyns LLC
Headquartered in the San Francisco Bay Area, Mervyns LLC --
http://www.mervyns.com/-- provides a mix of top national brands
and exclusive private labels. Mervyns has 176 locations in seven
states. Mervyns stores have an average of 80,000 retail square
feet, smaller than most other mid-tier retailers and easier to
shop, and are located primarily in regional malls, community
shopping centers, and freestanding sites. The company and its
affiliates filed for Chapter 11 protection on July 29, 2008,
(Bankr. D. Del. Lead Case No.: 08-11586). Howard S. Beltzer,
Esq., and Wendy S. Walker, Esq., at Morgan Lewis & Bockius LLP,
and Mark D. Collins, Esq., Daniel J. DeFranceschi, Esq.,
Christopher M. Samis, Esq. and L. Katherine Good, Esq., at
Richards Layton & Finger P.A., represent the Debtors in their
restructuring efforts. Kurtzman Carson Consultants LLC is the
Debtors' claims agent. The Debtors' financial advisor is Miller
Buckfire & Co. LLC. The U.S. Trustee for Region 3 appointed seven
creditors to serve on an Official Committee of Unsecured
Creditors. Robert Sussman, Esq., Cathy Hershcopf, Esq., and Jay
R. Indyke, Esq., at Cooley, Godward, Kronish LLP, represent the
Committee in these cases. Mervyn's LLC has estimated assets of
$500,000,000 to $1,000,000,000 and estimated debts of $500,000,000
to $1,000,000,000 when it filed for bankruptcy.
M FABRIKANT: Former Owners Demand Release of $200 Million Assets
----------------------------------------------------------------
The Fortgang family, former owners of M. Fabrikant & Sons, Inc.
and Fabrikant-Leer International Ltd., pressed the U.S. Bankruptcy
Court for the Southern District of New York to unfreeze their
combined assets worth more than $200 million, the Israeli Diamond
Industry Portal and the National Jeweler Network say.
The Fortgangs asserted that they have been falsely accused of
siphoning money to avoid paying their creditors, the reports
relate.
The National Jeweler notes that the Debtors' unsecured creditors
sued ABN Amro Bank NV, Antwerpse Diamantbank NV, Bank Leumi USA,
Bank of America NA, HSBC Bank USA NA, Israel Discount Bank (IDB)
of New York, J.P. Morgan Chase Bank NA and Sovereign Precious
Metals LLC for fraudulently funding M. Fabrikant with about
$118 million. That lawsuit was filed on Oct. 1, 2007, with the
Bankruptcy Court. The unsecured creditors argued that the
defendants were aware that the money they lent to the Debtors was
not used for the interest of the company but transferred to
Fortgang-affiliated entities, Israeli Diamond Industry Portal
says.
The Fortgangs asserted that the Court was "misled" to believe that
there was an emergency requiring the immediate freezing of the
family' assets, according to the reports. The family claimed that
the asset freezes, also known as the ex parte orders have been
"utterly staggering financially, emotionally and professionally,"
the National Jeweler quotes the request as stating. The Fortgangs
said that only the removal of the ex parte orders can they begin
to remedy the damage done to them and their reputations, the
report adds.
The Court is set to hear the Fortgangs' request in late September
2008, National Jeweler reports.
About M. Fabrikant
Based in New York City, M. Fabrikant & Sons, Inc. --
http://www.fabrikant.com/-- sells diamonds and jewelries. The
company and its affiliate, Fabrikant-Leer International Ltd.,
filed for chapter 11 protection on Nov. 17, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-12737 and 06-12739). Mitchel H. Perkiel, Esq., Lee
W. Stremba, Esq., and Paul H. Deutch, Esq., at Troutman Sanders
LLP represent the Debtors in their restructuring efforts. Alan
Kolod, Esq., Lawrence L. Ginsberg, Esq., and Christopher J.
Caruso, Esq., at Moses & Singer LLP, serve as counsel to the
Official Committee of Unsecured Creditors. The Debtors' schedules
show $225,612,204 in assets and $70,443,195 in liabilities.
MIDWEST AIR: Failed Airtran Deal Remembered in Midst of Job Cuts
----------------------------------------------------------------
A year after TPG Capital and Northwest Airlines Corp. outbid
AirTran Holdings Inc. to acquire Midwest Air Group Inc., the
corporate parent of Midwest Airlines, the question arises whether
Midwest would have been better with Airtran in the face of the
current record increases in jet fuel prices, according to the
Milwaukee Journal Sentinel.
The original plan was for Midwest to remain independent and
continue its journey to steady growth. But a year after the
acquisition, jet fuel prices increases as well as an economic
slowdown are forcing Midwest Air to sharply cut its workforce and
service.
As reported by the Troubled Company Reporter on July 21, 2008,
Midwest Airlines, a unit of Midwest Air Group Inc., will
cease flights to 11 cities by Sept. 8, 2008. The TCR reported on
July 15, 2008, that the company plans to reduce its Midwest
Airlines and its Skyway workforce by about 1,200 employees, or
40%. The majority of the jobs affected are related to the
airline's previously announced decision to remove its 12-plane MD-
80 fleet from service this fall, as well as other schedule
adjustments to be announced.
Industry observers say AirTran may have been better equipped to
cope with higher fuel prices and other economic challenges because
of its bigger revenue, larger network and more efficient aircraft.
But, according to Brian Nelson, an airline industry analyst with
Chicago-based Morningstar Corp., if the acquisition involved cash,
there might be a different story.
Midwest spokesman Michael Brophy said in a statement. "To be sure,
the changes we've had to make have been painful and difficult,
particularly for our employees. So to speculate on the impact of a
hypothetical acquisition in a time of such unprecedented change in
the airline industry is unproductive at best."
About Midwest Air
Oak Creek, Wisconsin-based Midwest Air Group Inc. --
http://www.midwestairlines.com/-- is a holding company of Midwest
Airlines, Inc. Midwest Airlines operates a passenger jet airline
that serves destinations throughout the United States from
Milwaukee, Wisconsin and Kansas City, Missouri. Skyway Airlines,
Inc., dba Midwest Connect, is a wholly owned subsidiary of Midwest
Airlines and serves as the regional airline for the company.
Midwest Airlines and Midwest Connect constitute the company's
segments. It has three principal product offerings: Midwest
Airlines Signature Service, Midwest Airlines Saver Service and
Midwest Connect regional service. As of Dec. 31, 2006, Midwest
Airlines Signature Service operated in 20 cities in the United
States, and Midwest Airlines Saver Service operated in 10 cities.
Midwest Connect builds feeder traffic and provides regional
scheduled passenger service to cities primarily in the Midwest.
Its subsidiaries provide aircraft charter services, transport air
freight and mail. The company has a total of more than 3,000
workers.
As of Sept. 30, 2007, Midwest Air Group listed total assets of
$395,615,000, total liabilities of $331,810,000, and total
stockholders' equity of $63,805,000.
MILLENNIUM CELL: Trading Halted, Faces Nasdaq Delisting
-------------------------------------------------------
The Nasdaq Stock Market said that it will delist the common stock
of several companies including:
-- Rotech Healthcare Inc. whose stock was suspended on June 12,
2008;
-- Shoe Pavilion, Inc. whose stock was suspended on July 28,
2008;
-- Triple Crown Media, Inc. whose stock was suspended on July
25, 2008;
-- ProxyMed, Inc. whose stock was suspended on Aug. 1, 2008;
and
-- Millennium Cell Inc. whose stock was suspended on June 13,
2008.
The stock of each company has not traded on NASDAQ since then.
Accordingly, NASDAQ will file a Form 25 with the Securities and
Exchange Commission to complete the delisting, which becomes
effective 10 days after the form is filed.
About Millennium Cell Inc.
Headquartered in Eatontown, New Jersey, Millennium Cell Inc. --
http://www.millenniumcell.com/-- (OTC:MCEL) is engaged in the
development of hydrogen fuel cartridge technology and designs,
well as hydrogen batteries comprising of a fuel cell and the
company's hydrogen storage technology for use in portable
electronic devices for the military, industrial, medical and
consumer electronics markets. The company continues to license its
hydrogen cartridge technology and designs to companies, which
develop fuel cell systems.
MORGAN STANLEY: Moody's Junks Two Class B Certificates
------------------------------------------------------
Moody's Investors Service downgraded the ratings of three tranches
issued by Morgan Stanley ABS Capital I Inc. Trust 2003-SD1. The
collateral backing the transaction consists primarily of first
lien adjustable-rate and fixed-rate "scratch and dent" mortgage
loans.
Complete rating actions are:
Issuer: Morgan Stanley ABS Capital I Inc. Trust 2003-SD1
-- Cl. M-2, downgraded from A2 to Baa3
-- Cl. B-1, downgraded from Baa2 to Caa3
-- Cl. B-2, downgraded from Ba2 to Ca
The action is part of an ongoing, wider review of all RMBS
transactions, in light of the deteriorating housing market and
rising delinquencies and foreclosures. Many "scratch and dent"
pools are exhibiting higher than expected rates of delinquency,
foreclosure, and REO. The rating adjustments will vary based on
level of credit enhancement, collateral characteristics, pool-
specific historical performance, quarter of origination, and other
qualitative factors.
NEENAH FOUNDRY: S&P Keeps 'B'; Outlook Neg on Increased Leverage
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Neenah
Foundry Co., including its 'B' corporate credit rating, and
removed them from CreditWatch, where they were placed with
negative implications on March 26, 2008. The outlook is negative.
"The negative outlook reflects our concerns regarding the
increased leverage stemming from the company's large investment in
new plant capacity and concerns that operating performance could
weaken if conditions in end markets do not improve," said Standard
& Poor's credit analyst John Sico. The affirmation reflects the
company's still adequate liquidity and the expectation that
operating performance will not materially decline in the near
term. Neenah's operating performance in its key municipal and
heavy-duty truck segments remains weak in 2008. Availability under
Neenah's revolving credit facility is currently more than its
minimum availability requirement (which would trigger covenant
issues). If liquidity weakened to less than $15 million, Neenah
would be in violation of its covenants. Still, weak earnings,
higher capital requirements, and high cash interest requirements
could reduce revolving credit facility availability and
potentially activate financial covenants that the company could
have difficulty meeting.
The ratings on Wisconsin-based Neenah Foundry reflect the
company's highly leveraged financial profile and vulnerable
business profile. Neenah has niche positions in highly cyclical
and competitive metal casting markets. The casting industry is
fragmented, highly capital-intensive, and subject to volatile
demand, customer pricing pressures, and fluctuations in raw
material prices.
Neenah, which had about $500 million in revenues in the 12 months
ended June 30, 2008, provides a broad line of cast manhole covers,
sewer grates, and other cast-iron products to state and municipal
customers. Neenah also provides products to makers of components
used in heavy-duty trucks; agricultural equipment; and heating,
ventilating, and air-conditioning products, as well as goods for
other industrial end markets.
"The outlook is negative. We could lower the ratings if the
company's availability under the revolving credit facility
approaches $25 million, before it reaches the $15 million minimum
availability requirement. Our concerns continue to include
recovery of higher raw material and energy costs and the need for
successful operation of new mold installation and the capturing of
new business. A revision of the outlook to stable would require
positive free cash flow generation and a reduction in debt," S&P
says.
NEW CENTURY: Amended Joint Chapter 11 Plan Effective
----------------------------------------------------
Holly Felder Etlin, president, chief executive officer and chief
restructuring officer of New Century Financial Corporation,
disclosed in a filing with the Securities and Exchange Commission
that the Second Amended Joint Chapter 11 Plan of Liquidation
dated as of April 23, 2008, of NCFC and its debtor-subsidiaries,
which was co-sponsored by the Official Committee of Unsecured
Creditors, became effective on Aug. 1, 2008.
Pursuant to the terms of the Plan, Ms. Etlin stated that all
assets of the Debtors were transferred to the New Century
Liquidating Trust on the Effective Date.
Pursuant to the terms of the Plan, all shares outstanding common
and preferred stock outstanding immediately prior to the
Effective Date are canceled.
Ms. Etlin disclosed that NCFC will file a Form 15 certifying to,
and notifying, the U.S. Securities and Exchange Commission of the
termination of the registration of its classes of common and
preferred stock, under Section 12(g) of the Exchange Act of 1934.
Moreover, NCFC will discontinue the use of its web site --
http://www.ncen.com/
Trustee On Board
The United States Bankruptcy Court for the District of Delaware
has appointed Alan M. Jacobs as trustee of the Liquidating Trust,
vested with the rights, powers and benefits under the New Century
Liquidating Trust Agreement.
The Liquidating Trust, created pursuant to the terms of the
Second Amended Joint Chapter 11 Plan of Liquidation, will be
responsible for the administration of all claims against the
Debtors' estates.
Since the effective date of the Plan, $73,484,183 in cash was
transferred to the Trust's bank accounts and $5,064,779 was
transferred to Reorganized Access Lending's bank accounts.
Mr. Jacobs, the Trustee, obtained a one year bond to cover the
assets of the Trust and Reorganized Access Lending and paid
premiums to the bonding companies:
-- $142,720 out of the Trust Assets; and
-- $10,640 out of Reorganized Access Lending Assets.
Mr. Jacobs obtained an Errors and Omissions insurance policy to
cover himself as Liquidating Trustee and Plan Administrator, the
Trust, and the PAC and its members and paid a three year premium
in the amount of $311,400 out of the Trust Assets.
Mr. Jacobs serve notices of the Effective Date to 127,000
parties, costing the trust in excess of $150,000.
Mr. Jacobs has also retained counsel, financial advisors and
accountants.
Mr. Jacobs says he has started to compromise certain claims and
implement certain decisions with respect to the remaining estate
assets.
Post-Effective Date Claims Bar Dates Set
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, notifies the Debtors' creditors of the
deadlines for claim requests:
* administrative claim requests must be filed on or before
Aug. 31, 2008;
* professional fee claim requests must be filed on or before
Sept. 15, 2008; and
* claim requests for claims arising from the rejection of
executory contracts must be filed by Aug. 31, 2008.
Holders of a Class HC3b Claim asserting a Senior Class Class HC3b
Claim must file with the Court a subordination statement no later
than Aug. 31, 2008. Distributions on that claim will be taken
from distributions to Allowed Capital Trust Claims, and held in a
separate interest bearing account.
About New Century Financial
Founded in 1995, Irvine, Calif.-based New Century Financial
Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real
estate investment trust, providing mortgage products to borrowers
nationwide through its operating subsidiaries, New Century
Mortgage Corporation and Home123 Corporation. The company offers
a broad range of mortgage products designed to meet the needs of
all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and
Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. The
Official Committee of Unsecured Creditors selected Hahn & Hessen
as its bankruptcy counsel and Blank Rome LLP as its co-counsel.
When the Debtors filed for bankruptcy, they listed total assets
of $36,276,815 and total debts of $102,503,950.
The Court confirmed the Debtors' second amended joint chapter 11
plan on July 15, 2008. (New Century Bankruptcy News, Issue No.
46; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
NEW CENTURY: Court Approves Agreement With Credit Suisse
--------------------------------------------------------
Credit Suisse First Boston Mortgage Capital, LLC, entered into an
amended and restated master repurchase agreement dated January 31,
2007, with certain sellers, under which New Century Financial
Corporation was guarantor. CSFB subsequently notified NCFC that
it was terminating and accelerating the MRA.
DLJ Mortgage Capital, Inc., as purchaser, entered into an amended
and restated master repurchase agreement dated October 1, 2004,
with NC Capital Corporation, pursuant to which DLJ purchased
mortgage loans.
CSFB filed seven claims against the Sellers, each aggregating
$106,416,217, plus prepetition and postpetition interest,
expenses, and other unliquidated damages. CSFB and DLJ also
filed 15 claims in unliquidated amounts, in connection with
damages resulting from the Debtors' misstatements or omissions in
their financial statements. Moreover, DLJ filed an EPD/Breach
Claim against New Century Mortgage Corporation, asserting
liquidated damages for $47,445,036, plus unliquidated amounts.
After filing the EPD/Breach Claim, DLJ, the Debtors, and the
Official Committee of Unsecured Creditors agreed that the
liabilities identified in the Claim was related to the NC
Agreement dated October 1, 2004. The parties sought to reconcile
those liabilities under the EPD/Breach Claim Protocol in the
Second Amended Joint Chapter 11 Plan of Liquidation of NCFC and
its debtor-subsidiaries, and the Official Committee of Unsecured
Creditors, dated as of April 23, 2008.
Accordingly, the United States Bankruptcy Court for the District
of Delaware held that:
1. Each CSFB MRA Claim will be allowed as a general unsecured
claim for $103,532,223;
2. The Misstatement Claim will be incorporated into the CSFB
MRA Claims;
3. All financial statement claims will be disallowed;
4. The escrow agent will release the disputed T&I funds; and
5. The EPD/Breach Claim will be subject to the EPD/Breach
Claim Protocol.
The parties agreed that they will not assert against each other
additional claims arising from the master repurchase agreements.
About New Century Financial
Founded in 1995, Irvine, Calif.-based New Century Financial
Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real
estate investment trust, providing mortgage products to borrowers
nationwide through its operating subsidiaries, New Century
Mortgage Corporation and Home123 Corporation. The company offers
a broad range of mortgage products designed to meet the needs of
all borrowers.
The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and
Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors. The
Official Committee of Unsecured Creditors selected Hahn & Hessen
as its bankruptcy counsel and Blank Rome LLP as its co-counsel.
When the Debtors filed for bankruptcy, they listed total assets
of $36,276,815 and total debts of $102,503,950.
The Court confirmed the Debtors' second amended joint chapter 11
plan on July 15, 2008. (New Century Bankruptcy News, Issue No.
46; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
NEXIA HOLDINGS: March 31 Balance Sheet Upside-Down by $7,828,151
----------------------------------------------------------------
Nexia Holdings Inc. filed Amendment No. 2 to its Form 10-Q
originally filed with the Securities and Exchange Commission on
May 20, 2008.
The amendment was filed on Aug. 22, 2008.
At March 31, 2008, the company's consolidated balance sheet showed
$4,167,979 in total assets and $11,828,757 in total liabilities,
resulting in a $7,828,151 stockholders' deficit.
The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $711,170 in total current assets
available to pay $2,917,412 in total current liabilities.
The company reported a net loss of $2,044,803 on total revenue of
$815,348 for the first quarter ended June 30, 2008, compared with
a net loss of $1,201,625 on total revenue of $738,774 in the same
period last year.
The increase in the three month revenue of $76,574, or 10%, is due
to an additional salon location and a new tenant at one of the
buildings.
Nexia recorded operating losses of $1,180,959 for the three month
period ended March 31, 2008, compared to losses of $1,431,795 for
the comparable period in the year 2007. The decrease in three
month operating losses of $250,836, or 18%, was the result of
reducing the amount of outside services being paid for with stock,
reduction in company stock promotion, reduced payroll expenses and
property rental from closing two locations of the Black Chandelier
operations.
The increase in net loss was primarily due to an $829,464 loss on
marketable securities (versus a $300,473 gain in 2008), a $95,079
loss from impairment of assets, and a $217,419 loss on disposal of
assets.
Full-text copies of the company's Amendment No. 2 to its Form 10-Q
for the first quarter ended March 31, 2008, are available for free
at http://researcharchives.com/t/s?3134
Going Concern Doubt
Hansen Barnett & Maxwell, P.C., in Salt Lake City, expressed
substantial doubt Nexia Holdings Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007.
The company has incurred cumulative losses from operations through
March 31, 2008, of $26,226,714, has a working capital deficit of
$2,206,242 and a stockholders' deficit of $7,828,151 at March 31,
2008. In addition, the company has defaulted on several of its
liabilities, has closed two retail clothing stores, and has
entered into agreements to sell two of its commercial real estate
properties.
About Nexia Holdings
Headquartered in Salt Lake City, Utah, Nexia Holdings Inc. (OTC
BB: NEXA) -- http://www.nexiaholdings.com/-- is a diversified
holdings company with operations in real estate, health & beauty,
and fashion retail. Nexia owns a majority interest in Landis
Lifestyle Salon, a hair salon built around the AVEDA(TM) product
lines. Through its Style Perfect Inc. subsidiary, Nexia owns the
retail and design firm Black Chandelier and its related brands.
NOE OBANDO: Case Summary & 8 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Noe A. Obando
aka Noe A. Obando Gomez
7451 Variel Avenue
Canoga Park, CA 91303
Bankruptcy Case No.: 08-16243
Chapter 11 Petition Date: August 22,2008
Court: Central District of California (San Fernando Valley)
Judge: Geraldine Mund
Debtor's Counsel: Steven Earl Smith
20969 Ventura Blvd Ste 230
Woodland Hills, CA 91364
Tel (818) 430-7770
Email: sesmithesq@aol.com
Total Assets: $956,000
Total Debts: $1,234,496
A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/cacb08-16243.pdf
NORTHWEST AIRLINES: Wants Capt. Friday Denied of Arbitration Order
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
granted Capt. Craig S. Friday the authority to pursue an action to
compel arbitration in a court of competent jurisdiction, but he
declined, argued Nathan A. Haynes, Esq., at Cadwalader, Wickersham
& Taft LLP, in New York, counsel for Northwest Airlines
Corporation and its debtor-affiliates.
Mr. Haynes noted that Capt. Friday was aware that he could have
commenced an action against the Debtors to compel arbitration.
Instead, he chose to continue bombarding the Debtors with
unavailing letters as he has been doing for almost a decade,
Mr. Haynes complained. Capt. Friday's Claim should be expunged,
and he should be barred from taking advantage of a nearly two-
year old Arbitration Order, Mr. Haynes contended.
Capt. Friday has personally submitted an untimely and
unauthorized declaration, which failed to provide evidence that he
took any appropriate action under the Arbitration Order,
Mr. Haynes related. According to Mr. Haynes, the Declaration
merely evidences a continued letter-writing campaign relating to
Capt. Friday's grievances and threats of grievances that are far
beyond the scope of his Claim.
Mr. Haynes told the Court that the Air Line Pilots Association,
Int'l., has not appealed the Debtors' decisions to the System
Board on Capt. Friday's behalf. Thus, the Debtors have done all
that is required of them to process Capt. Friday's grievances.
Accordingly, the Debtors ask the Court to expunge Capt. Friday's
Claim.
The Troubled Company Reporter said Sept. 29, 2006, Capt. Friday
asks the Court to compel Northwest Airlines, Inc., to process his
grievances and permit him the opportunity to return to flight
status before his seven-year disability period runs this
year.
Mr. Friday has been employed at Northwest Airlines since July 14,
1978. Mr. Friday presently holds Captain status while being
involuntarily kept on company imposed disability retirement,
James A. Gauthier, Esq., at Gauthier Law Offices, P.S., in Kent,
Washington, related.
Mr. Gauthier recounted that before 1998, Mr. Friday reported
various airline safety violations and concerns to Northwest and
to the Federal Aviation Administration. Northwest engaged in a
series of retaliatory actions against Mr. Friday in an attempt to
stop his safety reporting conduct.
About Northwest Airlines
Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures. Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks. Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents. Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.
The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts. The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel in the Debtors' chapter 11 cases. When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan. On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement. The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007. On May 21, 2007, the Court confirmed the
Debtors' amended plan. That amended plan took effect May 31,
2007. The Court formally closed the Chapter 11 cases of
Northwest's 12 affiliates on June 25, 2008. The Northwest Airlines
Corp. and Northwest Airlines Inc. cases remain open.
(Northwest Airlines Bankruptcy News, Issue No. 98; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
* * *
As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008. The outlook is
negative.
The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices. S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.
NORTHWEST AIRLINES: Resolves Northwestern Mutual's $46.2MM Claim
----------------------------------------------------------------
Northwest Airlines Corp. leased a Boeing 747-451 model aircraft
(U.S. Registration No. N672US) pursuant to a leveraged lease
financing transaction prior to the bankruptcy filing.
Under the leveraged lease financing transaction, Northwest and
NWA Corp. entered into certain agreements, including:
* a participation agreement dated July 26, 1999, among
Northwest as lessee; NWA Corp. as guarantor; The
Northwestern Mutual Life Insurance Company as owner
participant; First Security Bank, National Association as
owner trustee, and State Street Bank and Trust Company as
pass through trustee, indenture trustee and subordination
agent;
* a tax indemnity agreement dated July 26, 1999, between
Northwest as lessee and Northwestern Mutual as owner
participant; and
* a guarantee, also dated July 26, made by NWA Corp.
The Debtors, U.S. Bank National Association, as indenture trustee
and subordination agent, and U.S. Bank Trust National
Association, as pass through trustee entered into a restructuring
of financing for aircraft subject to Northwest 1999-1 EETC
transaction, which was approved by the Court on April 13, 2006.
Pursuant to the 1999-1 Restructuring Term Sheet and the 1999-1
Approval Order, among other things, the lease for the Aircraft
was rejected by Northwest, and U.S. Bank conducted a foreclosure
sale with respect to the Aircraft.
On Aug. 10, 2006, Northwestern Mutual filed Claim No. 7489
against the Debtors, asserting a general unsecured claim for
$46,218,923, in respect of the Aircraft and aircraft agreements,
including alleged damages it asserted was compensable under the
TIA and the Participation Agreement.
Northwestern Mutual also filed Claim No. 7488 asserting a general
unsecured claim for $46,218,923, in respect of NWA Corp.'s
guarantee of the Debtors' obligations under the TIA and the
Participation Agreement.
The Debtors objected to Northwestern Mutual's Claims on the
grounds that they had no liability under the Agreements, and that
the Claim amounts were overstated.
Stipulation to Resolve Dispute
To resolve their dispute, the parties stipulate that in full and
final satisfaction of the Claims held by Northwestern Mutual
against the Debtors relating to the Aircraft:
(a) the Claims are permanently fixed, stipulated, and allowed
as general unsecured claims. The Claim amounts, however,
have been redacted from the Court documents;
(b) Northwestern will receive a catch-up distribution in
respect of the Allowed Claims not later than five business
days after entry of a final non-appealable order approving
the Stipulation; and
(d) the Debtors' claims register will be amended to reflect
the allowance of the Allowed Claims, which will be treated
in accordance with the Debtors' Plan of Reorganization.
The Allowed Claim against the Debtors will be treated under the
Plan as a claim on account of a guaranty that has been eliminated
by the substantive consolidation under the Plan, and Northwestern
Mutual will receive its pro rata distributions of new common
stock for distribution to creditors with a guaranty in respect of
the Allowed Claims.
No party-in-interest will have the right to object to,
subordinate, reclassify, reduce, reconsider or challenge the
Allowed Claims.
About Northwest Airlines
Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures. Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks. Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents. Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.
The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts. The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel in the Debtors' chapter 11 cases. When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan. On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement. The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007. On May 21, 2007, the Court confirmed the
Debtors' amended plan. That amended plan took effect May 31,
2007. The Court formally closed the Chapter 11 cases of
Northwest's 12 affiliates on June 25, 2008. The Northwest Airlines
Corp. and Northwest Airlines Inc. cases remain open.
(Northwest Airlines Bankruptcy News, Issue No. 98; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
* * *
As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008. The outlook is
negative.
The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices. S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.
NORTHWEST AIRLINES: Merger Violates Antitrust Act, Clients Say
--------------------------------------------------------------
Some 25 direct purchasers of airline tickets from Northwest
Airlines Corp. and Delta Air Lines Inc. filed a lawsuit in the
United States District Court for the Northern District of
California against the two airlines, asserting that a proposed
Northwest-Delta merger violates Section 7 of the Clayton
Antitrust Act. The ticker purchasers are:
(1) Rosemary D'Augusta
347 Madrone Street,
Millbrae, CA 94030;
(2) Carolyn Fjord
P.O. Box 73493,
Davis, CA 95617;
(3) Sharon Holmes
P.O. Box 295,
Searchlight, NY 89046;
(4) Deborah M. and Steven J.
Pulfer, 16264 E. Mason Rd.,
Sidney, OR 45365;
(5) John Lovell
1910 Breton Rd. SE,
Grand Rapids, M149506;
(6) Gabe Garavanian
40 Vinal Sq.,
No. Chelmsford, MA 01863;
(7) Jose M. Brito
100 California Ave.,
Reno, NV 89505;
(8) Sondra K. Russell
1206 N. Loop 340,
Waco, TX 76705;
(9) Annette M. Tippetts
2783 East Canyon Crest Drive,
Spanish Fork, UT 84660;
(10) Sherry Lynne Stewart
6189 Lehman Drive,
Suite 103,
Colorado Springs, CO 80918;
(11) Robert A. Rosenthal
5975 No. Academy Blvd.,
Colorado Springs, CO 80918;
(12) Lee B. and Lisa R. McCarthy
35 Lancashire Place, Naples, FL 34104;
(13) June Stansbury
690 W. 2nd Street,
Suite 100, Reno, NV 89503;
(14) Keith Dean Bradt
P.O. Box 3262,
Reno, NV 89505;
(15) Donald and Donna Fry
6740 Northrim Lane,
Colorado Springs, CO 80919;
(16) Gary Talewsky
738 Turnpike Street,
Canton, MA 02021;
(17) Diana Lynn Ultican
9039 NE Juanita Dr.,
# 102, Kirkland, WA 98034;
(18) Patricia A. Meeuwsen
1062 Wedgewood,
Plainwell, MI 49080;
(19) Robert D. Conway
6160 W. Brooks Ave.,
Las Vegas, NV 89108;
(20) Michael C. Malaney
2240 28 th St. SE,
Grand Rapids, MI 49508;
(21) Y. Jocelyn Gardner
6602-A Delmonico Dr.,
Colorado Springs, CO 80919;
(22) Clyde D. Stensrud,
1529 10th St. W., Kirkland, WA 98033;
(23) Donna M. Johnson
1864 Masters Drive,
DeSoto, TX 75115;
(24) Valarie Jolly
2121 Dogwood Loop,
Mabank, TX 75156;
(25) Pamela S. Ward
1322 Creekwood Drive,
Garland, TX 75044.
Northwest and Delta signed an agreement on April 14, 2008, in
which the two carriers will combine in an all-stock transaction
with a combined enterprise value of $17,700,00,000. The new
airline will be called Delta. The combined company will be the
largest airline in the world and its regional partners will
provide access to more than 390 destinations in 67 countries, will
have more than $35,000,000 in aggregate revenues, operate a
mainline fleet of nearly 800 aircraft, and employ approximately
75,000 people worldwide.
Section 7 of the Clayton Antitrust Act provides that one business
will not acquire another business when the effect of the
acquisition may be to substantially lessen competition or tend to
create a monopoly.
Northwest and Delta are substantial rivals and competitors in the
relevant market, Joseph M. Alioto, Esq., at Alioto Law Firm, in
San Francisco, California, noted. The behavior of each is
therefore constrained by actual and potential competition from
the other throughout the entire relevant market, he said.
The market for the transportation of airline passengers in the
United States is in, and part of, interstate commerce, Mr. Alioto
stated. Thus, any restraint of trade in the transportation of
airline passengers in the United States, directly and
substantially, restrains and affects interstate commerce, he
asserted.
According to Mr. Alioto, the Merged Airline would operate in a
more highly concentrated market. A Four Firm Concentration Ratio
-- CR4 -- which measures the aggregated market share of the
largest four firms, would increase from 60.1% to 70.1%; and
Herfindahl-Hirschman Index -- HHI -- would increase from 1,240 to
1,509, or by over 250 points. As a result, he said, the
probability of price-fixing and division of markets among the
airlines remaining after the merger would substantially increase.
Mr. Brightwell also told the District Court that based on data
from the U.S. Department of Transportation, the Merged Airline
will account for nearly one fourth of all revenue passenger miles
flown by U.S. carriers.
The potential for increased price-fixing, division of markets,
and other anti-competitive acts, among the remaining airlines is
significant, because certain domestic passenger airlines,
including, Northwest and Delta, have in the past colluded to fix
prices with regard to airfares, surcharges, and cargo prices, and
to fix other terms and conditions of air transportation and
travel, Mr. Alioto explained.
He also warned that the Merged Airline will cause harm to
consumers, including the Plaintiffs, by charging higher airfares,
reducing the number of flights, eliminating air service to
smaller communities, charging for services otherwise part of
normal service, crowding more people into existing airplanes,
and other anti-competitive and anti-consumer welfare practices.
Consumers, including the plaintiffs, will thus pay more for less
airline service than would be the case in the absence of
the Merged Airline, Mr. Alioto asserted.
Mr. Alioto maintained that the effect of the announced merger
may be substantially to lessen competition, or to tend to create
a monopoly, in the transportation of airline passengers in the
United States. By virtue of the merger, the Plaintiffs
are threatened with loss or damage in the form of higher ticket
prices and diminished service, he points out.
Accordingly, the Plaintiffs sought preliminary and permanent
injunctive relief against the merger, and asked the Court to:
-- declare, find, adjudge, and decree that the Merged Airline
violates Section 7 of the Clayton Antitrust Act;
-- preliminarily enjoin Northwest and Delta from consummating
their merger during the pendency of the Civil Action; and
(c) award to Plaintiffs their cost of suit, including a
reasonable attorney's fee.
Northwest and Delta Deny Allegations
Northwest and Delta deny most of the allegations of the
Plaintiffs, including their purported violation of the Clayton
Antitrust Act. Northwest and Delta also says that the Plaintiffs
are not entitled to the relief they seek, because their Complaint
fails to state a claim against the airlines.
The Plaintiffs lack standing to bring or maintain the claims
raised in their Complaint because they are unlikely to sustain
any cognizable antitrust injury attributable to or proximately
caused by the airlines' conduct, Michael F. Tubach, Esq., at
O'Melveny & Myers LLP, in San Francisco, California, counsel for
Northwest, stated.
Northwest and Delta have not yet obtained adequate discovery from
the Plaintiffs, but reserve their individual rights to assert any
and all applicable defenses to the Plaintiffs' claims.
The District Court will convene a hearing on the Complaint on
Nov. 10, 2008.
Parties Stipulate
Northwest, Delta and the Plaintiffs entered into a stipulation
to govern disclosure and discovery activities in relation to the
Complaint. The salient terms of the Stipulation are:
(1) Discovery material designated as "Confidential" will be
treated as confidential.
(2) For confidential information disclosed during deposition,
transcripts containing Protected Material will be
separately bound by the Court reporter and labeled
"Confidential."
(3) A party may use Protected Material produced by another
party only for prosecuting, defending or attempting to
settle the Complaint.
(4) Unless otherwise allowed by the Court or permitted by a
designating party in writing, a receiving party may only
disclose any information designated as "Confidential" to
immediate counsel of the parties involved, experts of the
Receiving Party and the District Court and its personnel.
About Delta Air
Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners. Delta flies to
Argentina, Australia and the United Kingdom, among others.
The company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts. Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice. John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007. On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement. In April 25, 2007, the Court confirmed the
Debtors' plan. That plan became effective on April 30, 2007. The
Court entered a final decree closing 17 cases on Sept. 26, 2007.
(Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
About Northwest Airlines
Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures. Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks. Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents. Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.
The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts. The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel in the Debtors' chapter 11 cases. When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan. On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement. The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007. On May 21, 2007, the Court confirmed the
Debtors' amended plan. That amended plan took effect May 31,
2007. The Court formally closed the Chapter 11 cases of
Northwest's 12 affiliates on June 25, 2008. The Northwest Airlines
Corp. and Northwest Airlines Inc. cases remain open.
(Northwest Airlines Bankruptcy News, Issue No. 98; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
* * *
As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008. The outlook is
negative.
The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices. S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.
NORTHWEST AIRLINES: Oil Price Drop Has Mixed Reviews from Analysts
------------------------------------------------------------------
The price of oil has dropped to $115 per barrel in recent days,
but airline industry analysts are not yet optimistic, Wayne
Risher at Memphis Commercial Appeal, reports.
Despite outward signs that outlook for the airline industry in
general is improving, recent surge in stock prices merely show
how far the stocks have fallen, Mr. Risher states.
According to the report, Morgan Stanley analysts foresee profits
for Northwest Airlines Corp. in 2009 if oil stays at $115 per
barrel, Mr. Risher discloses. However, Mr. Risher adds, analysts
at The Boyd Group are skeptical about Mr. Greene's statement,
asserting that airlines are still "under water." The Boyd Group
conceded though, that the airline industry is headed towards
profitability, the report states.
Northwest Adds $80 Fuel Surcharge
Northwest confirmed during the last week of July that it will add
on a surcharge for $80 to its round-trip tickets starting on
January 10, 2009, The Associates Press reports.
According to the report, the $80 add-on will affect 7,000 of the
carrier's city pairs. Northwest will implement the surcharge, to
match surcharges imposed by other airlines in those markets, AP
says.
"The charge [is] needed to offset the high price of fuel,"
Northwest spokesperson Kristin Baur, told AP.
Other Airlines Eye Twin Cities Route
Meanwhile, other airlines have been eyeing a Twin Cities route,
now that the Northwest-Delta merger is moving forward, the Duluth
News Tribune reports.
According to the paper, Northwest has been the dominant player at
Twin Cities. However, since Delta started taking over Northwest,
the two airlines have combined their leases of 104 out of 107
gates at the Twin Cities Airport, the report says.
About Northwest Airlines
Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures. Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks. Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents. Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.
The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts. The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel in the Debtors' chapter 11 cases. When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan. On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement. The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007. On May 21, 2007, the Court confirmed the
Debtors' amended plan. That amended plan took effect May 31,
2007. The Court formally closed the Chapter 11 cases of
Northwest's 12 affiliates on June 25, 2008. The Northwest Airlines
Corp. and Northwest Airlines Inc. cases remain open.
(Northwest Airlines Bankruptcy News, Issue No. 98; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
* * *
As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008. The outlook is
negative.
The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices. S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.
PARKER EXCAVATING: Court Okays Wolf Slatkin as Special Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado gave Parker
Excavating, Inc., permission to employ Wolf Slatkin & Madison,
P.C. as its special counsel.
Wolf Slatkin is expected to provide legal services to the Debtor.
Albert B. Wolf, Esq., a shareholder at Wolf Slatkin, told the
Court that the firm's professionals will charge the Debtor these
hourly rates:
Legal Services $315
Other Attorneys $300 - $315
Paralegals $100 - $200
Mr. Wolf assured the Court that the firm does not represent any
interest adverse to the Debtor's estates.
Pueblo, Colorado-based Parker Excavating, Inc., filed for Chapter
11 protection on July 2, 2008 (Bankr. D. Colo. Case Nos. 08-
19552). Lee M. Kutner, Esq. represents the Debtors in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed estimated liabilities of $1 million to
$10 million. Its assets were not disclosed.
PARMALAT SPA: Judge Junks Class Suit Against BofA, Citgroup
-----------------------------------------------------------
U.S. District Judge Lewis A. Kaplan dismissed a class action filed
against Bank of America Corp., Citigroup Inc. and others on behalf
of investors who bought shares of Italy's Parmalat SpA, The Wall
Street Journal reported.
Judge Kaplan tossed out the plaintiffs' argument that Bank of
America owed a duty of disclosure to investors. He said such duty
only applies to private placements, which was not the case.
About Parmalat
Headquartered in Milan, Italy, Parmalat S.p.A. --
http://www.parmalat.net/-- sells nameplate milk products that can
be stored at room temperature for months. It also has about 40
brand product lines, which include yogurt, cheese, butter, cakes
and cookies, breads, pizza, snack foods and vegetable sauces,
soups and juices.
The company's U.S. operations filed for chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer,
Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP,
represent the Debtors. When the U.S. Debtors filed for bankruptcy
protection, they reported more than US$200 million in assets and
debts. The U.S. Debtors emerged from bankruptcy on April 13,
2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003. Dr.
Enrico Bondi was appointed Extraordinary Commissioner in each of
the cases. The Parma Court has declared the units insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition,
Case No. 04-14268, in the United States Bankruptcy Court for the
Southern District of New York.
Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A. The Finance Companies are under
separate winding up petitions before the Grand Court of the Cayman
Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman)
Ltd. serve as Joint Provisional Liquidators in the cases.
On Jan. 20, 2004, the Liquidators filed Sec. 304 petition,
Case No. 04-10362, in the United States Bankruptcy Court for the
Southern District of New York. In May 2006, the Cayman Island
Court appointed Messrs. MacRae and Cleaver as Joint Official
Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham
& Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon,
Herlands Randolph, represent the Finance Companies in the Sec. 304
case.
The Honorable Robert D. Drain presides over the Parmalat Debtors'
U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat
permanent injunction.
PENN TREATY: S&P Keeps 'B-' Ratings; Outlook Revised to Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Penn
Treaty Network America Insurance Co. (PTNA) to negative from
stable.
Standard & Poor's also said that it affirmed its 'B-' counterparty
credit and financial strength ratings on the company.
The negative outlook reflects concerns about the company's
business profile and capitalization following the Aug. 21, 2008,
announcement by PTNA's parent company, Penn Treaty American Corp.
(NYSE:PTA), that it provided notification of breach to its
reinsurer, Imagine International Reinsurance Ltd. (Imagine),
regarding its reinsurance of PTNA's business issued prior to 2002.
The notification followed Imagine's advising PTA that it would not
provide additional letters of credit under the reinsurance
agreement, as Imagine believes that a regulatory risk event has
occurred under the agreement. S&P expects that the dispute will be
resolved through the arbitration provisions of the reinsurance
agreement.
"We believe that the dispute could hinder PTNA's ability to write
new business," said Standard & Poor's credit analyst Neal
Freedman. This ability is critical to the company's profitability,
as these newer policies are likely priced much more profitably
than the company's older (business issued prior to 2002) block of
business. Furthermore, an unfavorable arbitration outcome could
have a materially adverse financial impact on the company's
statutory capitalization.
PORT BARRE: S&P Affirms 'B+' Rating Affirmed; Outlook Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' debt rating
on Port Barre Investments LLC's (PBI; d/b/a Bobcat Gas Storage)
$185 million credit facilities. The '3' recovery rating, which
remains unchanged, indicates that lenders can expect a meaningful
(50%-70%) recovery in the event of a payment default. The outlook
remains negative.
The affirmation of the ratings and outlook follows S&P's review of
a further increase to the construction budget and a modified
development timeline after construction problems were identified
in cavern 1. An amendment to the credit agreement is needed to
allow for a revised construction milestone schedule and additional
equity infusion by the owners. The current ratings assume the
proposed terms of the amendment, and reflect Standard & Poor's
expectation that the co-sponsors will continue to provide credit
support, as demonstrated by their commitment to infuse $13 million
of equity to cover the remaining construction costs through
scheduled completion in the fourth quarter of 2009.
"The negative outlook on PBI reflects Standard & Poor's concern
that the remaining project costs may exceed the committed equity
contingency in the intermediate term," said Standard & Poor's
credit analyst Mark Habib.
"We could lower the ratings if construction costs continue to
escalate or construction is delayed, for example, if the project
fails to fix additional variable construction costs as expected by
Sept. 30, 2008 and Dec. 31, 2008, and if it does not deliver on
its Nov. 1, 2008 and June 1, 2009 capacity "targets. We could also
lower the ratings if a shift in market fundamentals supports lower
storage rates while a significant percentage of the project's
storage capacity remains uncontracted. We could revise the outlook
to stable if projected construction costs remain within budget and
construction continues to progress on schedule. As construction
risks subside, and with significant storage capacity under firm
storage contracts, the rating could gain positive momentum," S&P
says.
POSTAL LOGISTICS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Postal Logistics Services LLC
2380 Diehl Road
Aurora, IL 60504
Bankruptcy Case No.: 08-22006
Type of Business: The Debtor offers postal services.
Chapter 11 Petition Date: August 21, 2008
Court: Northern District of Illinois (Chicago)
Judge: John H. Squires
Debtor's Counsel: Michael L. Gesas, Esq.
(mlgesas@arnstein.com)
Arnstein & Lehr, LLP
120 South Riverside Plaza, Suite 1200
Chicago, IL 60606-3910
Tel: (312) 876-7125
Fax: (312) 876-6260
http://arnstein.com/
Estimated Assets: $1 million to $100 million
Estimated Debts: $1 million to $100 million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Quebcor World (USA) Inc. 2007 $1,104,412
P.O. Box 98668
Chicago, IL 60693-8668
National Freight, Inc. $324,517
P.O. Box 12852
Philadelphia, PA 19101
Thoroughbred Direct Intermodal Serv $177,794
P.O. Box 2576
Fort Wayne, IN 46801
JR Cartage, Inc. $150,186
Teachers Retirement System of IL $141,537
United States Postal Service $108,472
Jevic Transportation Co. $87,532
Pacific Continental Shippers LLC $86,233
J.B. Hunt Transport, Inc. $68,839
The Custom Companies $62,573
Burton Truck Lines, Inc. $54,600
Road Runner $52,967
Intermodal Sales Corporation $47,028
BG Transport, Inc. $43,093
UPS Supply Chain Solutions $40,322
D.M. Bowman, Inc. $40,143
Behnke Trucking $40,025
Freight Masters Systems $39,525
Nationwide Magazine & Book, Inc. $37,919
Angelo Anagnostopoulos $37,030
PREMD INC: Amex to Suspend Trading and Delist Stocks on August 28
-----------------------------------------------------------------
PreMD Inc. received notice from the American Stock Exchange LLC
that AMEX intends to suspend trading in PreMD's stock on the AMEX
effective Aug. 28, 2008, and to initiate delisting proceedings.
PreMD originally received notification of the Exchange's intention
to delist on May 28, 2008. The company appealed this decision and
a hearing was held with the Listing Qualifications Panel on
Aug. 12, 2008. The panel also considered the company's statement
on Aug. 18, 2008, disclosing that the U.S. Food and Drug
Administration had upheld USFDA decision regarding the Non-
Substantially Equivalent letter with respect to PreMD's skin
cholesterol test. Based on the written submissions, oral
presentations and the recent announcement, the panel unanimously
affirmed the determination to delist the common stock of the
Company.
The AMEX stated that the basis for its determination to delist the
company's common stock was based upon the company being non-
compliant with Sections 1003(a)(i), 1003(a)(ii) and 1003(a)(iii)
of the AMEX Company Guide, all of which relate to the company's
insufficient stockholder's equity. PreMD continues to trade on
the Toronto Stock Exchange under the symbol PMD.
Headquartered in Ontario, Canada, PreMD Inc. (TSX: PMD; Amex: PME)
-- http://www.premdinc.com/-- is a predictive medicine company
focused on improving health outcomes with non- or minimally
invasive tools for the early detection of life-threatening
diseases, particularly cardiovascular disease and cancer. The
company's products are designed to identify those patients at risk
for disease. With early detection, cardiovascular disease and
cancer can be effectively treated, or perhaps, prevented
altogether. PreMD is developing accurate and cost-effective tests
designed for use at the point of care, in the doctor's office, at
the pharmacy, for insurance testing and as a home use test.
Going Concern Doubt
Ernst & Young LLP expressed substantial doubt about PreMD Inc.'s
ability to continue as a going concern after auditing PreMD Inc.'s
financial results for the year ended Dec. 31, 2007. The auditors
pointed to the company's loss of C$6.3 million and shareholders'
deficiency of C$4,419,890. The auditors also related that the
company has experienced significant operating losses and cash
outflows from operations since its inception. The company has
operating and liquidity concerns due to its significant net losses
and negative cash flows from operations.
PROPEX: Lenders Hold Valid Lien on Foreign Affiliates, Court Says
-----------------------------------------------------------------
The Honorable John C. Cook of the Eastern District of Tennessee
has confirmed that the DIP lenders of Propex Inc. and its debtor-
affiliates hold a valid perfected lien on all of the stock of the
Debtors' foreign subsidiaries pursuant to the Final DIP Order.
The Debtors previously filed a Security Agreement
Amendment/Foreign Stock Pledge Motion, whereby they asked the
Court to (i) permit them to amend a Security Agreement related to
their DIP Credit Agreement, and (ii) confirm that the liens
granted to the DIP Lenders on 100% of the Debtors' foreign
capital stock is in accordance with the terms of the Final DIP
Order and the DIP Credit Agreement.
In line with that request, the Debtors, the Official Committee of
Unsecured Creditors, and BNP Paribas, on behalf of the DIP
Lenders, entered into a Court-approved stipulation for the filing
under seal of any pleadings or documents relating to the Security
Agreement Motion that may be deemed to contain confidential
information.
BNP Paribas Securities Corp., as administrative agent for the DIP
Lenders, expressed its support of the Debtors' request. BNP
Paribas asserted that the DIP documents plainly and
unequivocally
include the 100% Foreign Stock Pledge as part of the collateral
package granted to the DIP lenders and as part of their adequate
protection package to the prepetition lenders.
Counsel to BNP Paribas, Gene L. Humphreys, Esq., at Bass, Berry &
Sims, PLC, in Nashville, Tennessee, maintained that even if there
is any ambiguity on the amount of equity of the Debtors' foreign
subsidiaries that pledged as collateral under the DIP facility,
the ambiguity is completely mooted by the uncontested fact that
both the Interim and the Final DIP Orders provide a superpriority
administrative claim to the DIP obligations pursuant to Section
364(c)(1) of the Bankruptcy Code.
"The DIP lenders have loaned the Debtors tens of millions of
dollars in reliance upon the fundamental premise of the full
collateral package, including the 100% Foreign Stock Pledge," Mr.
Humphreys said.
On the other hand, the Creditors Committee filed an objection
to the Debtors' Security Agreement Amendment under seal.
BNP Paribas countered that the Committee's attempt to
renegotiate the DIP Facility has no basis in law or fact and
cannot be sustained.
Rule 2004 Exam Disputed
In relation to the Security Agreement Amendment/Foreign Stock
Pledge Motion, the Committee has sought to conduct a Rule 2004
exam on the Debtors.
The Debtors opposed the Rule 2004 Motion and noted that it will
only provide irrelevant parole evidence. The Debtors informed
the Court that they have provided more than 7,000 documents to
the Committee and have made Propex Vice President and Chief
Financial Officer Lee McCarter available for interview. The
Committee has also been given access to all documents relevant to
the negotiation and drafting of the DIP agreements, the Debtors
added.
BNP Paribas, for its part, argued that the discovery sought by
the Committee is patently pointless, onerous and unnecessary.
On the Committee's behalf, Ira S. Dizengoff, Esq., at Akin Gump
Strauss Hauer & Feld LLP, in New York, contended that further
discovery is necessary because based on the limited documents the
Committee had analyzed, it learned that:
(a) The DIP parties always intended the foreign stock pledge
to be contingent on the tax consequences caused by the
pledge;
(b) In a written memorandum sent by Debtors' counsel to
lenders' counsel on February 11, 2008, two days before
the final DIP hearing, the Debtors concluded that a pledge
of 100% of the foreign stock would cause material adverse
tax consequences to the company;
(c) In the same February 11 memorandum, the Debtors concluded
that they were not required under the DIP documents to
pledge 100% of the foreign stock; and
(d) On multiple occasions subsequent to the February 11
memorandum, the Debtors repeated their conclusion to the
lenders that a 100% pledge of the foreign stock would
cause material adverse tax consequences to the company.
Further discovery is needed to understand why the DIP parties
failed to disclose the conditional nature of the 100% foreign
stock pledge, and why, in midstream, the DIP parties abandoned
the condition, to the detriment of the unsecured creditors, Mr.
Dizengoff emphasized.
The Committee added that if the DIP documents were indeed
unambiguous, the DIP parties would not have any need for an
amendment.
The Committee also sought a postponement of the hearing on the
Security Agreement Amendment/Foreign Stock Pledge Motion to
September 10, 2008. The Committee said it needs more time to
complete review of the documents the Debtors provided to it.
The Debtors, however, said the matter of the Rule 2004 Motion can
be resolved by a simple, straightforward review of the relevant
documents, principally the DIP Order and DIP Credit Agreement.
Upon deliberation, the Court denied any adjournment of the
hearing on the Foreign Stock Pledge Motion.
Amendment Request Withdrawn
The Court also noted that the Debtors have orally withdrawn their
remaining request in relation to the Security Agreement
Amendment. Judge Cook thus clarified that the amendment to the
Security Agreement is not approved and will not be effective.
Judge Cook also denied the Committee's Rule 2004 Motion as moot.
About Propex Inc.
Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber. It also produces
primary and secondary carpet backing. Propex operates in North
America, Europe, and Brazil.
The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-
10249). The Debtors have selected Edward L. Ripley, Esq., Henry
J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in
Houston, Texas, to represent them. The Official Committee of
Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin
Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel.
As of June 29, 2008, the Debtors' balance sheet showed total
assets of $562,700,000, and total debts of $551,700,000.
(Propex Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
PROPEX INC: Court Extends Exclusive Plan-Filing Period to Oct. 20
-----------------------------------------------------------------
The Honorable John C. Cook of the U.S. Bankruptcy Court for the
Eastern District of Tennessee extended the exclusive plan filing
period of Propex Inc. and its debtor-affiliates through October
20, 2008, and their exclusive solicitation period through December
19, 2008.
The Debtors' exclusive period to file a plan of reorganization
will expired on Aug. 21, 2008.
Before the Court issued the exclusive period ruling, the Official
Committee of Unsecured Creditors filed an objection to the
Debtors' request. The Committee saw the request as a move by the
Debtors to prevent it and any other party-in-interest from filing
their own plan of reorganization.
"These tactics are inappropriate and are not permitted under the
Bankruptcy Code and well-established case-law, especially when
the [D]ebtor, as is the situation here, does not need any
additional time to develop and file its own plan of
reorganization," Ira S. Dizengoff, Esq., at Akin Gump Strauss
Hauer & Feld LLP, in New York, said on the Committee's behalf.
Mr. Dizengoff asserted that the Debtors' submission of their
business plan and term sheet for a plan of reorganization
demonstrates that (i) their operations are stabilized and the
basic information necessary to formulate a plan already exists,
(ii) their attempts to gain support from creditors for their plan
proposal have failed; and (iii) the only purpose served by an
extension of exclusivity is to create leverage in the hopes of
forcing creditors to accept the Debtors' preferred plan of
reorganization.
"While the Committee concurs that a number of unresolved
contingencies exist, many of these, including possibly the most
important one – namely, the Putative Foreign Stock Pledge - are a
product of the Debtors' own making," Mr. Dizengoff emphasized.
In its ruling, the Court cited that the extension request is
reasonable and is in the best interest of the Debtors and their
creditors.
Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber. It also produces
primary and secondary carpet backing. Propex operates in North
America, Europe, and Brazil.
The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-
10249). The Debtors have selected Edward L. Ripley, Esq., Henry
J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in
Houston, Texas, to represent them. The Official Committee of
Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin
Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel.
As of June 29, 2008, the Debtors' balance sheet showed total
assets of $562,700,000, and total debts of $551,700,000. (Propex
Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
PROTECTED VEHICLES: Files Liquidation Plan with Creditors' Panel
----------------------------------------------------------------
Protected Vehicles Inc. submitted to the U.S. Bankruptcy Court for
the District of South Carolina its chapter 11 plan of liquidation
and accompanying disclosure statement on Aug. 19, 2008, William
Rochelle reports. The plan filing averted the conversion of the
Debtor's case to a chapter 7 liquidation proceeding, the report
says.
The Court ruled on July 17, 2008, that the Official Committee of
Unsecured Creditors was entitled to request the case conversion,
Mr. Rochelle reports. The Court suggested that the Debtor and the
Committee agree on a sale procedure and submit a joint chapter 11
liquidation plan. The chapter 11 case remained to allow both
parties to reach an agreement, Mr. Rochelle states.
The Troubled Company Reporter said on June 12, 2008, that the
Committee requested the conversion of the Debtor's chapter 11 case
to a chapter 7. Michael M. Beal, Esq., at McNair Law Firm, P.A.,
in Columbia, South Carolina, noted that the Court previously
denied the Committee's initial conversion motion after finding
that the losses to the estate continue but noting that the
Committee failed to show, by the "narrowest of margins," the
absence of a reasonable likelihood of rehabilitation.
The Committee asserted that the conversion will be the most
efficient and cost-effective way for the Debtor to maximize the
value of its estate for the benefit of its creditors.
Provisions of the Plan
In its disclosure statement, the Debtor said it owes its secured
creditor $13.6 million. The plan contemplates on voiding the
lender's security interest, Mr. Rochelle reveals. Unsecured
creditors have asserted $67 million in claims. The Debtor listed
unsecured creditors' claims of $58 million.
According to Mr. Rochelle, through a chapter 11 plan confirmed in
June 2008, Patriarch swapped its debt to ownership of American
LaFrance LLC, a manufacturer of fire trucks and emergency vehicles
that filed its chapter 11 petition on January 2008.
The TCR said on July 29, 2008, that American LaFrance has
successfully emerged from chapter 11 after a little over five
months in bankruptcy. The effective date of the Debtor's third
amended plan of reorganization occurred on July 23, 2008,
Christopher A. Ward, Esq., at Polsinelli Shalton Flanigan
Suelthaus PC, in Wilmington, Delaware, stated in a notice to the
U.S. Bankruptcy Court for the District of Delaware. The Court
confirmed the Debtor's plan May 23, 2008.
About American LaFrance
Headquartered in Summerville, South Carolina, American LaFrance
LLC -- http://www.americanlafrance.com/-- is one of the
oldest fire apparatus manufacturers and one of the top six
suppliers of emergency vehicles in North America. The company
filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del.
Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers,
Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead
Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey,
Branzburg & Ellers LLP, are the Debtor's proposed local counsel.
Pepper Hamilton, LLP is the proposed counsel of the Official
Committee of Unsecured Creditors. In its schedules of assets and
debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in
total assets and $89,065,038 in total debts.
About Protected Vehicles
North Charleston, South Carolina-based Protected Vehicles Inc.
aka PVI -- http://www.protectedvehicles.com/-- founded in 2005,
designs and manufactures ballistic and blast protected vehicles
using technology derived from Rhodesian and South African vehicle
development programs. The Debtor filed for chapter 11 protection
on Feb. 5, 2008 (Bankr. S.C. Case No. 08-00783). G. William
McCarthy, Jr., Esq., at McCarthy Law Firm LLC, represents the
Debtor in its restructuring efforts. Its largest unsecured
creditor, the United States Marine Corps, is owed $15,801,765.
In February 2008, the Debtor listed assets of $24 million and
debts of $54.1 million.
PROXYMED INC: Trading Halted, Faces Nasdaq Delisting
----------------------------------------------------
The Nasdaq Stock Market said that it will delist the common stock
of several companies including:
-- Rotech Healthcare Inc. whose stock was suspended on June 12,
2008;
-- Shoe Pavilion, Inc. whose stock was suspended on July 28,
2008;
-- Triple Crown Media, Inc. whose stock was suspended on July
25, 2008;
-- ProxyMed, Inc. whose stock was suspended on Aug. 1, 2008;
and
-- Millennium Cell Inc. whose stock was suspended on June 13,
2008.
The stock of each company has not traded on NASDAQ since then.
Accordingly, NASDAQ will file a Form 25 with the Securities and
Exchange Commission to complete the delisting, which becomes
effective 10 days after the form is filed.
About ProxyMed Inc.
Headquartered in Norcross, Georgia, ProxyMed Inc. fka MedUnite,
Inc. -- http://www.medavanthealth.com-- facilitates the exchange
of medical claim and clinical information. The company and two of
its affiliates filed for Chapter 11 protection on July 23, 2008
(Bankr. D. Del. Lead Case No.08-11551). Kara Hammond Coyle, Esq.,
and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor,
L.L.P., represent the Debtors in their restructuring efforts.
The Debtors indicated $40,655,000 in total consolidated assets and
$47,640,000 in total consolidated debts as of December 31, 2007.
In its petition, ProxyMed Transaction Services, Inc. indicated
$10,000,0000 in estimated assets and $10,000,000 in estimated
debts.
As reported by the Troubled Company Reporter on Aug. 11, 2008,
ProxyMed Inc. disclosed that the Judge presiding over its chapter
11 case in Delaware approved the Debtor's proposed bid procedures
and timetable for the auction of the company's assets on Sept. 8,
2008.
QUEBECOR WORLD: Posts $77.7 Million Loss in Second Quarter 2008
---------------------------------------------------------------
In the second quarter of 2008, Quebecor World Inc. reported a net
loss of $77.7 million or ($0.44) per share compared to a net
income of $10.8 million or $0.05 per share in the second quarter
of last year. Second quarter results included IAROC net of income
taxes of $7.5 million or $0.04 per share, compared to $19.1
million or $0.14 per share in the same period in 2007. Excluding
IAROC, the adjusted operating income was $27.8 million in the
second quarter of 2008 compared to adjusted operating income of
$48.0 million for the second quarter of last year.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of $3,412,100,000, total
liabilities of $4,326,500,000, preferred shares of $62,000,000,
and total shareholders' deficit of $976,400,000.
For the first six months of 2008, Quebecor World reported a
net loss from continuing operations of $226.3 million or ($1.41)
per share, compared to a net income from continuing operations of
$20.5 million or $0.06 per share for the same period in 2007.
The results for the first six months of 2008 incorporate IAROC
net of taxes of $42.7 million or $0.26 per share compared to
$30.5 million or $0.24 per share in 2007. Excluding IAROC,
adjusted diluted loss per share from continuing operations was
$1.15 for the first six months of 2008 compared to adjusted
diluted earnings per share of $0.30 in the same period of 2007.
On the same basis, adjusted operating income in the first six
months of 2008 was $37.0 million compared to $86.5 million in
2007. Consolidated revenues for the first half of 2008 were
$2.0 billion compared to $2.3 billion in the same period of 2007.
The lower revenue is due to the lower paper sales, decreased
volume and continued price pressures. In addition, the Company's
quarterly and year-to-date financial results have been impacted
by significantly higher professional fees and higher financial
expenses related to the DIP financing and the creditor protection
process.
In the second quarter of 2008, Quebecor World Inc. said it made
steady progress in its efforts to exit creditor protection in the
United States and Canada as a strong player in its industry. The
company continued to renew existing customer contracts and secure
new business across all its business groups. In the quarter,
Quebecor World completed the sale of its European operations to a
Netherlands based investment group. The net cash proceeds were
used by the company to repay a portion of the Debtor-In-Possession
financing. In the second quarter, Quebecor World announced a
customer-focused streamlining of its U.S. operations to better
serve its customer base, improve efficiency and reduce costs.
Also in the quarter, the Company presented its business plan to
the creditors' committees. The plan reflects the company's
expectation of future operating performance both during and after
the CCAA and Chapter 11 processes and is an important part of
developing an eventual plan of arrangement to exit creditor
protection.
Since the initial filing on Jan. 21, 2008, the company received
the final order for its $1 billion DIP financing from
the U.S. and Canadian courts. The company has received several
extensions to the stay of proceedings, the most recent of which
is to Sept. 30, 2008 under CCAA in Canada and through to July
of 2009 under Chapter 11 in the U.S. As stated in the Monitor's
report of July 14, 2008, the company had an unrestricted cash
balance of $140 million at July 6, 2008 and continues to have
access to the Revolving Loan Facility of up to $400M.
Quebecor World's results in the second quarter 2008 are based on
continuing operations. In the second quarter, the company
generated consolidated revenues from continuing operations of
$976 million compared to $1.1 billion in 2007. Operating income
before impairment of assets, restructuring, and other charges
(IAROC) in the second quarter was $27.8 million compared to
operating income of $48.0 million in the second quarter of 2007.
Adjusted EBITDA was $92.7 million in the second quarter of 2008
compared to $113.2 million in the second quarter of 2007. The
lower adjusted EBITDA in 2008 is due to decreased volumes and
continued price pressures as well as significant costs associated
with the reorganization and restructuring. The sale of the
European operations generated cash proceeds of $82 million of
which $75 million was applied to partial repayment of the DIP loan
and a loss on disposal of $653 million.
The company's adjusted EBITDA results in the second quarter and
year-to-date continue to be in line with management's expectations
and slightly ahead of projections for the DIP financing.
"We have made important progress in the last six months to
preserve the long-term sustainable profitability of our company
while working through a process to ensure fair and equitable
consideration for all stakeholders. The sale of our European
operations was one such step which will allow us to focus on our
core business in the Americas," said Jacques Mallette President
and CEO Quebecor World Inc. "Since January we successfully
signed new agreements with many of our customers whose work was
due to be renewed despite a challenging economic environment and
the unfavorable perception created by our filing. We have
restructured our U.S. operations towards a more customer-focused
approach and we continue to introduce new products to enhance our
full-service offerings to help our customers better reach or
serve their customers".
Since its filing for creditor protection Quebecor World has
renewed business with major publishers and retailers. This
includes recently announced long-term agreements with Reader's
Digest, Local Insight Media, Dex Media and Canada Wide Publishing.
A full-text copy of the Second Quarter Results is available for
free at http://ResearchArchives.com/t/s?30d3
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
The Debtors have until Sept. 30, 2008, to file a plan of
reorganization in the chapter 11 case. The Debtors' CCAA stay
has been extended to Sept. 30, 2008. (Quebecor World Bankruptcy
News, Issue No. 24; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
QUEBECOR WORLD: Judge Peck Approves Watson Wyatt Retention
----------------------------------------------------------
Judge James M. Peck of the U.S. Bankruptcy Court for the Southern
District of New York ordered that in no event will Quebecor World
Inc. and its debtor-affiliates indemnify Watson Wyatt & Company if
the Debtors or a representative of their estates assert a claim
for, and a court determines by final order that the claim arose
out of, Watson Wyatt's bad-faith, self-dealing, breach of
fiduciary duty, gross negligence or willful misconduct.
Judge Peck, however, approved the Debtors' application to retain
Watson Wyatt.
The Troubled Company Reporter said on Aug. 15, 2008, that the
Debtors sought the authority of the Court to employ Watson Wyatt,
nunc pro tunc to Aug. 1, 2008, to provide actuarial and other
consulting services for their pension and health and welfare
plans, and human resources consulting services.
Before the bankruptcy filing, Watson Wyatt, through its
affiliate Watson Wyatt Canada, ULC, was engaged by the Debtors.
Watson Wyatt has continued to provide postpetition services to
the Debtors as an ordinary course professional. Recently,
Watson Wyatt has exceeded the US$50,000 OCP Limit, and
anticipates that it will also exceed the OCP Limit for July 2008.
Watson Wyatt further expects that it will exceed the aggregate OCP
Limit of US$500,000 over the course of the Debtors' Chapter 11
cases.
Accordingly, the Debtors sought to employ Watson & Wyatt as a
retained professional in their Chapter 11 Cases pursuant to
Sections 327(a) and 328(a) of the Bankruptcy Code.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of $3,412,100,000, total
liabilities of $4,326,500,000, preferred shares of $62,000,000,
and total shareholders' deficit of $976,400,000.
The Debtors have until Sept. 30, 2008, to file a plan of
reorganization in the chapter 11 case. The Debtors' CCAA stay
has been extended to Sept. 30, 2008. (Quebecor World Bankruptcy
News, Issue No. 24; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
QUEBECOR WORLD: Panel May Retain Lowenstein as Conflicts Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the case of
Quebecor World Inc. and its debtor-affiliates sought the
permission of the U.S. Bankruptcy Court for the Southern District
of New York to retain Lowenstein Sandler PC as its conflicts
counsel.
As reported by the Troubled Company Reporter on Aug. 4, 2008, Webb
Stanley, director of risk management at Abitibi-Consolidated
Sales Corp., and co-chairman of the Creditors' Committee, related
that the Committee's lead counsel, Akin Gump Strauss Hauer &
Feld, LLP, has advised the Committee that certain entities who
may be defendants in avoidance actions to be filed by the Debtors
are or were the firm's clients, thus giving rise to potential or
actual conflicts.
The Committee told the Court that it needs to retain Lowenstein
Sandler to prosecute the Avoidance Actions against those
defendants that Akin Gump represents, as well as with future
matters where Akin Gump may have a conflict.
As the Committee's conflicts counsel, Lowenstein Sandler will:
(a) provide legal advice as necessary with respect to the
Committee's powers and duties;
(b) assist the Committee in investigating potential claims
in connection with the Debtors' Chapter 11 cases
including claims related to the Avoidance Actions;
(c) prepare on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers in connection with
the Chapter 11 cases;
(d) appear in Court and other courts on behalf of the
Committee to prosecute necessary motions, applications,
complaints and other pleadings, and otherwise to protect
the interests of the Debtors' unsecured creditors in
instances where Akin Gump has a conflict; and
(e) perform other legal services as may be required by the
Committee.
With respect to the Avoidance Actions, Akin Gump and Lowenstein
Sandler will be working to jointly represent the Committee,
Mr. Stanley said. Akin Gump and Lowenstein Sandler have advised
the Committee that they will coordinate their activities to avoid
any duplication of effort between the two law firms.
Lowenstein Sandler's customary hourly rates are:
Professional Hourly Rates
------------ ------------
Principals $400 - $765
Senior Counsel $310 - $520
Counsel $335 - $405
Associates $220 - $340
Paralegals and Assistants $120 - $195
Lowenstein Sandler will also seek reimbursement of actual and
necessary expenses it will incur during its servicing.
Kenneth A. Rosen, a member at Lowenstein Sandler, maintained that
his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code, and that it does not
represent any interest adverse to the Debtors or their estates.
The U.S. Trustee has notified the Court that it does not have any
objection to the retention application.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of $3,412,100,000, total
liabilities of $4,326,500,000, preferred shares of $62,000,000,
and total shareholders' deficit of $976,400,000.
The Debtors have until Sept. 30, 2008, to file a plan of
reorganization in the chapter 11 case. The Debtors' CCAA stay
has been extended to Sept. 30, 2008. (Quebecor World Bankruptcy
News, Issue No. 24; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
REFCO LLC: Former President Receives 10-Year Sentence
-----------------------------------------------------
Judge Naomi Buchwald of the U.S. District Court for the Southern
District of New York sentenced former Refco Group Ltd. President
Tone Grant to 10 years in prison for defrauding investors of $2.4
billion in an eight-year accounting scheme, David Glovin of
Bloomberg News reports.
Judge Buchwald turned aside a claim by Mr. Grant, 64, that he was
a minor participant in the fraud that led to the collapse of the
company.
Mr. Grant was convicted in April on the jury's second day of
deliberations of conspiracy, securities fraud, wire fraud, bank
fraud and money laundering.
Headquartered in New York, Refco Inc. -- http://www.refco.com/--
is a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives. The company has operations
in Bermuda.
The company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
The Court confirmed the Modified Joint Chapter 11 Plan of Refco
Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26,
2006.
RENAISSANCE HOSPITAL: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Renaissance Hospital Dallas, Inc.
14440 John F. Kennedy Boulevard
Houston, TX 77032-5300
Tel: (832) 886-1900
Bankruptcy Case No.: 08-43819
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Houston Community Hospital, Inc. 08-43820
dba Renaissance Hospital-Houston
Renaissance Hospitals, Inc. 08-43821
Renaissance Hospital-Groves
Renaissance Healthcare Systems, Inc. 08-43822
Type of Business: The Debtors operate acute care hospitals.
See http://www.renhealthcare.org/
Chapter 11 Petition Date: August 26, 2008
Court: Northern District of Texas (Ft. Worth)
Debtors' Counsels: Holland N. O'Neil, Esq.
Gardere, Wynne and Sewell
1601 Elm Street, Suite 3000
Dallas, TX 75201
Tel: (214) 999-4961
Fax: (214) 999-4667
Email: honeil@gardere.com
-- and --
Michael S. Haynes, Esq.
Gardere Wynne Sewell LLP
3000 Thanksgiving Tower
1601 Elm Street
Dallas, TX 75201
Tel: (214)999-4817
Fax: (214)999-3817
Email: mhaynes@gardere.com
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtors did not file a list of their 20 Largest Unsecured
Creditors.
ROTECH HEALTHCARE: Trading Halted, Faces Nasdaq Delisting
---------------------------------------------------------
The Nasdaq Stock Market said that it will delist the common stock
of several companies including:
-- Rotech Healthcare Inc. whose stock was suspended on June 12,
2008;
-- Shoe Pavilion, Inc. whose stock was suspended on July 28,
2008;
-- Triple Crown Media, Inc. whose stock was suspended on July
25, 2008;
-- ProxyMed, Inc. whose stock was suspended on Aug. 1, 2008;
and
-- Millennium Cell Inc. whose stock was suspended on June 13,
2008.
The stock of each company has not traded on NASDAQ since then.
Accordingly, NASDAQ will file a Form 25 with the Securities and
Exchange Commission to complete the delisting, which becomes
effective 10 days after the form is filed.
About Rotech Healthcare
Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI)
-- http://www.rotech.com/-- provides home medical equipment and
related products and services in the United States, with a
comprehensive offering of respiratory therapy and durable home
medical equipment and related services. The company provides
equipment and services in 48 states through approximately 500
operating centers located primarily in non-urban markets.
As reported in the Troubled Company Reporter on March 11, 2008,
Rotech Healthcare Inc.'s consolidated balance sheet at Dec. 31,
2007, showed $546.8 million in total assets, $551.9 million in
total liabilities, and $5.3 million in Series A convertible
redeemable preferred stock, resulting in a $10.5 million total
stockholders' deficit.
RENAISSANCE HOSPITAL: Case Summary & 40 Largest Unsec. Creditors
----------------------------------------------------------------
Lead Debtor: Renaissance Hospital Terrell, Inc.
1551 Highway 34 S.
Terrell, TX 75160
Tel: (832) 886-1900
Bankruptcy Case No.: 08-34143
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Renaissance Hospital-Grand Prairie, Inc. 08-43775
Type of Business: The Debtors provide medical services. See
http://terrell.renhealthcare.org
Chapter 11 Petition Date: August 21, 2008
Court: Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtors' Counsel: Holland N. ONeil, Esq.
Email: honeil@gardere.com
Marcus Alan Helt, Esq.
Email: mhelt@gardere.com
Michael S. Haynes, Esq.
Email: mhaynes@gardere.com
Gardere, Wynne and Sewell, LLP
1601 Elm St., Ste. 3000
Dallas, TX 75201
Tel: (214) 999-4961, (214) 999-4526,
(214) 999-4817
Fax: (214) 999-4667, (214) 999-3526,
(214)999-3817
Renaissance Hospital Terrell, Inc.'s Financial Condition:
Estimated Assets: $10,000,000 to $50,000,000
Estimated Debts: $10,000,000 to $50,000,000
A. Renaissance Hospital Terrell, Inc.'s 20 Largest Unsecured
Creditors:
Entity Claim Amount
------ ------------
Owens & Minor $154,094
P.O. Box 841420
Dallas, TX 75284-1725
Reliant Energy Dept. 0954 $137,157
P.O. Box 120954
Dallas, TX 75312-0954
Cardinal Health $95,995
Pharmaceutical Dist.
P.O. Box 847384
Dallas, TX 75284-7384
Renaissance Healthcare EBPT $92,608
AT&T/SBC $81,110
City of Terrell $47,332
Enviro Engineering Co., LLC $57,933
Suddenlink Media $57,911
Hitachi Medical Systems $40,161
America, Inc.
Medline Industries, Inc. $39,958
Resource Corp. of America $38,637
OTI Oracle $32,764
Quest Diagnostics $32,644
Praxai Distribution, Inc. $29,998
Baxter Healthcare Corp. $28,378
First Insurance Funding Corp. $27,834
Siemens Diagnostics $27,151
J&J Health Care System $26,853
B. A copy of Renaissance Hospital-Grand Prairie, Inc.'s petition
is available for free at:
http://bankrupt.com/misc/txnb08-34143.pdf
ROBERT PLAN: Files for Bankruptcy Protection in New York
--------------------------------------------------------
Christopher Scinta of Bloomberg News reports that Robert Plan
Corp. and its affiliate, Robert Plan of New York Corp., filed
voluntary petitions under Chapter 11 with the United States
Bankruptcy Court for the Eastern District of New York, citing
"serious cash flow problems" because of Lincoln General
Insurance's failure to make payments.
According to the company's chief executive officer Robert Wallach,
Lincoln has not lived up to its obligations and owes the debtors
substantial fees, Bloomberg says.
Mr. Scinta relates that in 2006 the company transferred assets --
excluding its unit's assets -- to Lincoln, a unit of Canada's
Kingsway Financial Services Inc. The company contracted to
solicit quote and market insurance policies in some states on
behalf of Lincoln, he adds.
Bloomberg says that the company listed total assets of
$21.9 million and total debts of $41.1 million. The company owes
$6.8 million in claims to unsecured creditor CGI Group, the report
says.
The company has at most 200 creditors, Bloomberg notes.
Headquartered in Bethpage, New York, The Robert Plan Corp. --
http://www.rpc.com/-- provides insurance services.
ROBERT PLAN: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: The Robert Plan Corporation
999 Stewart Avenue
Bethpage, NY 11714
Bankruptcy Case No.: 08-74573
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
The Robert Plan of New York Corporation 08-74575
Type of Business: The Debtors provide insurance services.
See: http://www.rpc.com
Chapter 11 Petition Date: August 25, 2008
Court: Eastern District of New York (Central Islip)
Judge: Robert E. Grossman
Debtor's Counsel: Harold S. Berzow, Esq.
(hberzow@rmfpc.com)
Ruskin Moscou Faltischek
1425 RexCorp Plaza
Uniondale, NY 11556
Tel: (516) 663-6596
Fax: (516) 663-6796
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
CGI $6,770,373
600 Federal Street
Andover, MA 01810
Eagle Properties $3,000,000
New York State Dept Of Taxation $2,813,364
Clear Water Associates (Landlord) $2,296,822
Schiff Hardin $2,000,000
Wallach Trust $2,000,000
Reliance Ins Co. $2,000,000
Eagle Insurance Company $1,835,000
Accrued Unpaid Salary- R Wallach $1,802,000
Colonial Indemnity Insurance $1,126,000
CB Richard Ellis $693,407
New Jersey Dept Of Labor $673,543
Lion Insurance Co. $640,000
Rothschild $634,847
Kostelanetz & Fink $519,000
Morgan Lewis $449,097
Accrued Unpaid Salary - J Jackson $401,000
McArter & English $367,000
AIG Technologies $358,632
LIPA $292,451
RSFC SERIES: Moody's Junks Class M-3 Certificates
-------------------------------------------------
Moody's Investors Service downgraded the ratings of two tranches
issued by RFSC Series 2003-RP1 Trust. The collateral backing the
transaction consists primarily of first lien adjustable-rate and
fixed-rate "reperforming" mortgage loans.
Complete rating actions are:
Issuer: RFSC Series 2003-RP1 Trust
-- Cl. M-2, downgraded from Baa1 to Baa3
-- Cl. M-3, downgraded from Caa3 to C
The action is part of an ongoing, wider review of all RMBS
transactions, in light of the deteriorating housing market and
rising delinquencies and foreclosures. Many "scratch and dent"
pools are exhibiting higher than expected rates of delinquency,
foreclosure, and REO. The rating adjustments will vary based on
level of credit enhancement, collateral characteristics, pool-
specific historical performance, quarter of origination, and other
qualitative factors.
SAM SELTZER'S: Court Okays Argus as Interim Management Consultant
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida gave
Seltzer's Steak Houses of America, Inc. and its debtor-
affiliates permission to employ Argus Management Corporation as
interim management consultant and advisor.
Thomas B. Doherty, a managing partner at the firm, and Derek
Flanagan, a senior consultant at the firm, are expected to
evaluate the Debtors' businesses and assist the Debtors in the
development of a strategy or plan with regard to its businesses,
perform a financial analysis for each development plan, and assist
the Debtors in dealings and negotiations with lenders, landlords,
lessors and creditors.
The firm will charge the Debtor these hourly rates:
Thomas B. Doherty $395
Derek Flanagan $295
Managing Directors $350
Administrative Staff $125
Mr. Doherty assured the Court that the firm does not represent any
interest adverse to the Debtor's estates.
Based in Tampa, Florida, Sam Seltzer's Steak Houses of America
Inc. is a private no-frills restaurant chain, which has nine
locations from Port Charlotte to Ocala. It opened its first
location in 1995 on North Dale Mabry Highway in Tampa.
Sam Seltzer's and 14 of its affiliates filed for Chapter 11
bankruptcy protection on June 27, 2008 (Bankr. M.D. Fla. Lead Case
No. 08-09533). Amy Denton Harris, Esq., and Harley E. Riedel,
Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, represent
the Debtors in their restructuring efforts. The U.S. Trustee for
Region 21 has appointed an Official Committee of Unsecured
Creditors.
When the Debtors filed for bankruptcy, they disclosed $10,000,000
to $50,000,000 in estimated assets and debts. For the fiscal year
ending Oct. 28, 2007, the company had assets of roughly
$18,000,000 and liabilities of $17,400,000.
SAM SELTZER'S: Panel Wants to Employ Forizs & Dogali as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in Sam Seltzer's
Steakhouses of America, Inc. and its debtor-affiliates' Chapter 11
cases, seeks permission from the U.S. Bankruptcy Court for the
Middle District of Florida to employ Forizs & Dogali, P.L. as its
bankruptcy counsel.
Forizs & Dogali will provide the Committee with legal advice
concerning the duties and powers of the Committee.
Zala L. Forizs, Esq., a member at Forizs & Dogali, P.L., tells the
Court that the firm's professionals will bill at these hourly
rates:
Zala L. Forizs $350
Robert Wahl $325
Timothy Woodward $300
Jackie Taylor $190
Rachel Green $100
Mr. Forizs assures the Court that the firm does not represent any
interest adverse to the Debtor's estates.
Based in Tampa, Florida, Sam Seltzer's Steak Houses of America
Inc. is a private no-frills restaurant chain, which has nine
locations from Port Charlotte to Ocala. It opened its first
location in 1995 on North Dale Mabry Highway in Tampa.
Sam Seltzer's and 14 of its affiliates filed for Chapter 11
bankruptcy protection on June 27, 2008 (Bankr. M.D. Fla. Lead Case
No. 08-09533). Amy Denton Harris, Esq., and Harley E. Riedel,
Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, represent
the Debtor in its restructuring efforts. The U.S. Trustee for
Region 21 appointed an Official Committee of Unsecured Creditors.
When the Debtors filed for bankruptcy, they disclosed $10,000,000
to $50,000,000 in estimated assets and debts. For the fiscal year
ending Oct. 28, 2007, the company had assets of roughly
$18,000,000 and liabilities of $17,400,000.
SAM SELTZER'S: Committee Wants Protivit as Financial Advisors
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in Sam Seltzer's
Steakhouses of America, Inc. and its debtor-affiliates' Chapter 11
cases seeks authority from the U.S. Bankruptcy Court for the
Middle District of Florida to employ Protiviti, Inc., as its
financial advisors.
Protiviti will, among other things, assist the Committee in the
investigation of the acts, liabilities, and financial condition of
the Debtors, the Debtors' assets and business operations, the
disposition of the Debtors’ assets, and any other matter relevant
to these cases and the interests of unsecured creditors.
Michael L. Atkinson, Esq., a managing director at Protiviti, tells
the Court that the firm's professionals will bill the Committee
these hourly rates:
Managing Director $410 - $470
Associate Director $285 - $430
Senior Manager/Manager $240 - $315
Senior Consultant/Consultant $190 - $290
Administrative $85
Mr. Atkinson assures the Court that the firm does not represent
any interest adverse to the Debtor's estate.
Based in Tampa, Florida, Sam Seltzer's Steak Houses of America
Inc. is a private no-frills restaurant chain, which has nine
locations from Port Charlotte to Ocala. It opened its first
location in 1995 on North Dale Mabry Highway in Tampa.
Sam Seltzer's and 14 of its affiliates filed for Chapter 11
bankruptcy protection on June 27, 2008 (Bankr. M.D. Fla. Lead Case
No. 08-09533). Amy Denton Harris, Esq., and Harley E. Riedel,
Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, represent
the Debtor in its restructuring efforts. The U.S. Trustee for
Region 21 appointed an Official Committee of Unsecured Creditors.
When the Debtors filed for bankruptcy, they disclosed $10,000,000
to $50,000,000 in estimated assets and debts. For the fiscal year
ending Oct. 28, 2007, the company had assets of roughly
$18,000,000 and liabilities of $17,400,000.
SASCO MORTGAGE: S&P Cuts 2003-HEL1, 2004-GEL3 Class B to 'CCC'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class B mortgage-backed notes from SASCO Mortgage Loan Trust 2003-
HEL1 and SASCO Mortgage Loan Trust 2004-GEL3 to 'CCC'. At the same
time, S&P affirmed its ratings on the six remaining classes from
these transactions.
The downgrades reflect the adverse performance of the pools as the
collateral continues to realize significance monthly net losses.
Monthly net losses for series 2003-HEL1 and 2004-GEL3 have
generally outpaced monthly excess interest cash flows, resulting
in a write-down of the transactions' overcollateralization, which
prompted us to downgrade both classes to 'CCC'. In addition, the
amount of severely delinquent loans (90-plus days, foreclosures,
and real estate owned {REO}) in both transactions indicate the
likelihood of additional losses in the future. As of the July 2008
distribution period, cumulative realized losses, as a percentage
of the original pool balances, were 4.85% (SASCO 2003-HEL1) and
2.89% (SASCO 2004-GEL3). Total delinquencies were 37.92% (SASCO
2003-HEL1) and 12.69% (SASCO 2004-GEL3) of the current pool
balances, while severe delinquencies were approximately 27% and
9%, respectively. Both transactions are seasoned 55 months or less
and have pool factors of less than 27%.
The affirmations reflect adequate actual and projected credit
support percentages that are sufficient to support the ratings at
their current levels.
Subordination, overcollateralization, and excess spread provide
credit support for these transactions. The collateral for these
transactions consists of 30-year, fixed- or adjustable-rate, and
reperforming mortgage loans secured by first liens on residential
properties.
RATINGS LOWERED
SASCO Mortgage Loan Trust 2003-HEL1
Mortgage-backed notes
Rating
Class To From
----- -- ----
B CCC B
SASCO Mortgage Loan Trust 2004-GEL3
Mortgage-backed notes
Rating
Class To From
----- -- ----
B CCC BB
RATINGS AFFIRMED
SASCO Mortgage Loan Trust 2003-HEL1
Mortgage-backed notes
Class Rating
----- ------
M2 A
M3 BBB
M4 BBB-
SASCO Mortgage Loan Trust 2004-GEL3
Mortgage-backed notes
Class Rating
----- ------
A AAA
M1 AA
M2 A
SASCO MORTGAGE: Moody's Cuts Ba2 Rating on Class B Cert. to Ca
--------------------------------------------------------------
Moody's Investors Service downgraded the rating of one tranche
issued by SASCO Mortgage Loan Trust 2003-GEL1. The collateral
backing the transaction consists primarily of first lien
adjustable-rate and fixed-rate "scratch and dent" mortgage loans.
Complete rating actions are:
Issuer: SASCO Mortgage Loan Trust 2003-GEL1
-- Cl. B, downgraded from Ba2 to Ca
The action is part of an ongoing, wider review of all RMBS
transactions, in light of the deteriorating housing market and
rising delinquencies and foreclosures. Many "scratch and dent"
pools are exhibiting higher than expected rates of delinquency,
foreclosure, and REO. The rating adjustments will vary based on
level of credit enhancement, collateral characteristics, pool-
specific historical performance, quarter of origination, and other
qualitative factors.
SBARRO INC: Moody's Junks $150 Million Senior Unsecured Notes
-------------------------------------------------------------
Moody's Investors Service downgraded the probability of default
rating as well as the corporate family rating of Sbarro, Inc. to
Caa1 from B3. Moody's also affirmed the company's speculative
grade liquidity rating of SGL-3. The outlook is negative.
Ratings downgraded are:
-- Corporate family rating to Caa1 from B3
-- Probability of default rating to Caa1 from B3
-- $25 million senior secured revolver to B1 (LGD2, 21%) from Ba3
(LGD 2, 20%)
-- $183 million senior secured term loan to B1 (LGD2, 21%) from
Ba3 (LGD 2, 20%)
-- $150 million senior unsecured notes to Caa2 (LGD5, 77%) from
Caa1 (LGD 5, 76%)
Ratings affirmed are:
-- Speculative Grade Liquidity rating of SGL-3
The rating outlook is negative
The negative outlook reflects Moody's view that Sbarro's operating
performance will continue to be negatively impacted by weak
consumer spending, declining mall traffic patterns and high
commodity costs over the intermediate term. The outlook also
reflects Moody's concern that the cushion under the company's
financial covenants will likely deteriorate as covenant levels
tighten over the next several quarters, resulting in a potential
covenant violation.
The ratings downgrade reflects Sbarro's weaker than expected
operating performance as increasing cost inflation and declining
store traffic continue to pressure margins. The downgrade and
negative outlook also incorporate Moody's view that -- given the
company's weak operating performance -- Sbarro may have difficulty
meeting financial covenants in its bank credit facility which
tighten over the next several quarters.
The affirmation of Sbarro's SGL-3 speculative grade liquidity
rating reflects our view that the company's internal cash flow and
cash balances -- while weaker than in the past -- should be
sufficient to cover its debt service and capital spending needs
over the next year with modest borrowings under its committed
credit facility. It also reflects the possibility that the
company may need to seek covenant relief from its banks within the
next few quarters. Should the company's liquidity weaken, its SGL
rating -- as well as its long term ratings -- could be downgraded.
The Caa1 corporate family rating reflects the company's
persistently high leverage, weak interest coverage, and a
relatively aggressive growth plan in the context of weak economic
growth. The rating also reflects the high seasonality of cash
flows driven largely by shopping mall traffic patterns in the
fourth quarter, weak consumer spending, cost inflation, and
significant competition in the pizza segment of the restaurant
industry. The ratings are supported by Sbarro's well recognized
brand name, meaningful international presence and predictability
of royalty stream from franchisees.
Headquartered in Melville, NY, Sbarro, Inc. is a leading quick
service restaurant concept that serves Italian specialty foods.
As of June 29, 2008, the company owned and operated 509 and
franchised 546 restaurants worldwide under brand names such as
"Sbarro,", "Mama Sbarro" and "Carmela's Pizzeria". Total revenues
for 12 months ending June 29, 2008 were approximately $365
million.
SEQUOIA COMMUNITY: To Sell Assets to Clinica for $8.27 Million
--------------------------------------------------------------
Sequoia Community Health Foundation, Inc., dba Sequoia Community
Health Clinic, intends to sell its eight clinics to lender Clinica
Sierra Vista for $8.27 million, Terry Brennan of The Deal reports.
The Hon. Whitney Rimel of U.S. Bankruptcy Court for the Eastern
District of California (Fresno) scheduled an auction date for
Aug. 27, 2008, Wednesday, followed by a sale hearing, The Deal
quote court documents as stating.
Under an asset purchase agreement dated Aug. 15, 2008, an $850,000
cash must be submitted to the Debtor during the closing date or
within 24 hours after an entry of a sale order, The Deal says.
Clinica offered to buy the Debtor's assets for $850,000 cash,
$5.92 million in assumed debt and $2 million credit bid, The Deal
quotes the APA as stating.
A stalking horse agreement provides for a $100,000 break-up fee if
Clinica's offer is outbid by another buyer, The Deal relates.
Competing bids start at 110% of Clinica's $8.27 million offer, The
Deal says, citing the APA. Bids will continue in $50,000
increments.
The Deal comments that the sale would allow Bakersfield,
California-based Clinica to become one the largest non-profit
healthcare clinic operator in the U.S. According to the Deal,
Clinica is currently the 15th largest clinic operator in the U.S.
Based on court documents, The Deal relates, Sequoia plans to
either request the Court to convert its chapter 11 case to a
chapter 7 liquidation proceeding, or to proceed with filing a
chapter 11 plan within 30 to 45 days after the sale closing.
About Sequoia Community
Fresno, California-based Sequoia Community Health Foundation,
Inc., dba Sequoia Community Health Clinic, runs eight clinics.
The health care provider filed its chapter 11 petition on June 24,
2008 (Bankr. E.D. Calif. Case No. 08-13653). Judge Whitney
Rimel presides over the case. Riley C. Walter, Esq., at Walter
Wilhelm Law Group represents the Debtor in its restructuring
efforts. No Official Committee of Unsecured Creditors has been
formed in this case. The Debtor has assets of between $1 million
and $10 million and debts of between $1 million and $10 million.
SEQUOIA COMMUNITY: Final Hearing on $2MM DIP Financing on Aug. 27
-----------------------------------------------------------------
According to The Deal's Terry Brennan, The Hon. Whitney Rimel of
the U.S. Bankruptcy Court for the Eastern District of California
(Fresno) gave Sequoia Community Health Foundation, Inc., dba
Sequoia Community Health Clinic, interim access to Clinica Sierra
Vista's $2 million debtor-in-possession financing. A final
hearing on the DIP financing is set for Aug. 27, 2008.
Clinica was also designated as stalking-horse bidder to buy the
Debtor's assets for $8.27 million, The Deal notes.
The DIP facility carries a 10% interest, plus $30,000 closing
fees, according to The Deal.
The Debtor will also seek final authority to use cash collateral
of Wells Fargo Bank and Cal Mortgage at the August 27 hearing, The
Deal adds.
About Sequoia Community
Fresno, California-based Sequoia Community Health Foundation,
Inc., dba Sequoia Community Health Clinic, runs eight clinics.
The health care provider filed its chapter 11 petition on June 24,
2008 (Bankr. E.D. Calif. Case No. 08-13653). Judge Whitney
Rimel presides over the case. Riley C. Walter, Esq., at Walter
Wilhelm Law Group represents the Debtor in its restructuring
efforts. No Official Committee of Unsecured Creditors has been
formed in this case. The Debtor has assets of between $1 million
and $10 million and debts of between $1 million and $10 million.
SHAWN SOHRABIAN: Court Okays Tyler Bartl as Bankruptcy Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
gave Shawn Sohrabian authority to employ Tyler, Bartl, Gorman &
Ramsdell, P.L.C. as its bankruptcy counsel.
Steven B. Ramsdell, Esq., a member at Tyler Bartl, is expected to,
among others, assist with required schedules and related forms and
represent the Debtor at creditors' meetings.
Mr. Ramsdell told the Court that the firm will charge the Debtor
hourly rates between $275 and $325 per hour for bankruptcy
services rendered.
Mr. Ramsdell assured the Court that the firm does not represent
any interest adverse to the Debtor's estates.
McLean, Vancouver-based Shawn Sohrabian, fka Mohammad Reza
Sohrabian, filed for Chapter 11 bankruptcy protection on June 30,
2008 (Bankr. E.D. Va. Case No. 08-13810). When he filed for
bankruptcy, the Debtor disclosed estimated assets and debts of
$10,000,001 to $50,000,000.
STAMFORF CENTER: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Stamforf Center for the Arts, Inc.
307 Altantic St.
Stamford, CT 06901
Bankruptcy Case No.: 08-50773
Chapter 11 Petition Date: August 22, 2008
Court: District of Connecticut (Bridgeport)
Debtor's Counsel: Patrick J. McHugh, Esq.
Email: pmchugh@fdh.com
Finn Dixon and Herling
177 Broad St., 15th Fl.
Stamford, CT 06901
Tel: (203) 325-5000
Fax: (203) 325-5001
http://www.fdh.com
Estimated Assets: $10,000,000 to $50,000,000
Estimated Debts: $1,000,000 to $10,000,000
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Northeast Utilities $141,577
P.O. Box 2957
Hartfvord, CT 06104
Ontour, LLC $84,276
7135 Minstrel St., Ste. 105
Columbia, MD 21045
CIT Technology Fin. Serv., $67,969
Inc.
(Box Office Software)
21148 Network Place
Chicago, IL 60673-1211
Tel: (904) 620-7703
Taylor Design, LLC $56,443
Southern Connecticut $49,075
Newspapers, Inc.
Controlled Air $44,788
Razor Focus $44,000
Yankee Gas Services Co. $32,402
Iatse $23,020
Guardian Angel Computer $21,881
Services, LLC
Cumulus Broadcasting, LLC $20,010
Building One Maintenance, Inc. $17,962
Friedberg, Smith & Co., P.C. $16,350
Sentinel Network Solutions, $13,905
LLC
Aux Delices $13,377
Pitney Bowes Purchase Power $10,775
Anthem Blue Cross and Blue $10,772
Shield
Abrams Artists Agency $10,642
Printech $9,714
Commissioner of Revenue $9,532
Services
SHOE PAVILION: Trading Halted, Faces Nasdaq Delisting
-----------------------------------------------------
The Nasdaq Stock Market said that it will delist the common stock
of several companies including:
-- Rotech Healthcare Inc. whose stock was suspended on June 12,
2008;
-- Shoe Pavilion, Inc. whose stock was suspended on July 28,
2008;
-- Triple Crown Media, Inc. whose stock was suspended on July
25, 2008;
-- ProxyMed, Inc. whose stock was suspended on Aug. 1, 2008;
and
-- Millennium Cell Inc. whose stock was suspended on June 13,
2008.
The stock of each company has not traded on NASDAQ since then.
Accordingly, NASDAQ will file a Form 25 with the Securities and
Exchange Commission to complete the delisting, which becomes
effective 10 days after the form is filed.
About Shoe Pavilion
Headquartered in Sherman Oaks, California, Shoe Pavilion, Inc.
operate independent off-price footwear retail stores that offer a
broad selection of women's and men's designer label
and name brand merchandise. The company and its affiliate,
Shoe Pavilion Corporation, filed for protection on July 25, 2008
(Bankr. C.D. Calif. Case No.08-14939). Ron Bender, Esq.,
represents the Debtors in their restructuring efforts. When
the Debtors filed for protection against their creditors, they
listed total assets of $60,994,000 and total debts of $27,000,000.
SONIC AUTOMOTIVE: S&P Keeps BB- on Worsening Economic Conditions
----------------------------------------------------------------
Standard & Poor's Ratings Services said it has revised its outlook
on Sonic Automotive Inc. to negative from stable. "At the same
time, we affirmed our 'BB-' corporate credit rating on the
company. Charlotte, N.C.-based Sonic had total balance sheet debt
of $783 million (excluding floorplan liabilities) as of June 30,
2008," S&P says.
"The outlook revision reflects deteriorating U.S. macroeconomic
conditions that are likely to pressure EBITDA in upcoming quarters
and lead to higher leverage that could be insufficient to support
the current rating," said Standard & Poor's credit analyst Nancy
Messer. The likelihood of a downgrade in the next year depends on
the depth and duration of the economic downturn, combined with the
company's ability to manage its cost structure to fit the new
market.
"Sales of both new and used light vehicles declined at a higher
rate in the second quarter than in the first quarter, as economic
weakness in the U.S. persisted, consumer vehicle preference
shifted, and credit conditions tightened. In addition, low
consumer confidence about future economic conditions has led to
weakening of discretionary spending on highly profitable vehicle
maintenance. These factors are affecting 2008 financial results
for all of the rated auto retailers to one degree or another,
depending on geographic locations and brand mix. This down cycle
for auto sales and service has become more protracted than we
expected, and visibility regarding the inevitable upturn is
limited. We are also concerned about the possibility that the
company may be required to take a goodwill impairment charge in
the year ahead, signaling lower future profitability and cash
flows, even if any such non-cash charge would not affect
covenants," S&P relates.
The ratings on Charlotte, N.C.-based Sonic reflect the company's
high debt leverage and modest cash flow protection, combined with
its weak business profile as a consolidator in the highly
competitive U.S. auto retailing industry. Sonic has 171 dealership
franchises in 15 states and a presence in the recently fast-
growing but now-pressured markets in the Southeast, West, and
Southwest.
Sonic, as with its large auto retailer peers, has diverse revenue
streams that mitigate business challenges. For the second quarter
of 2008, Sonic's revenue stream consisted of new-vehicle retail
sales (59%), used-vehicle sales (23%), parts and services (P&S)
sales (15%), and finance and insurance (F&I; 3%). Auto retailers
benefit in particular from the stability and higher margins of
their repair P&S operations, which makes up about 48% of Sonic's
total gross profit. The variable nature of retailers' cost
structures is a further benefit because advertising and
compensation expenses are closely correlated with vehicle-sales
volumes. Also, Sonic has a favorable product mix. Of its 2007
total new-vehicle revenue, a vast majority (84%) came from import
and luxury vehicles, as is typical of auto retail consolidators.
These vehicles tend to have a fairly loyal customer base for
service and more stable new and used demand than other vehicles.
"Still, economic weakness is subjecting auto retailers to soft and
somewhat volatile new-vehicle sales. In addition, tight credit
markets have made consumer financing for vehicles harder to come
by, and in some cases more costly. This is particularly true for
new-vehicle leasing, an area from which several finance companies
have recently exited. As a result of these factors, sales are
dropping sharply in 2008. We expect new-vehicle sales of 14.2
million units in 2008, reaching a 15-year low. Sonic's first-half
2008 reported EBITDA of $107 million represented an 11% decline
year over year," S&P says.
Sonic, along with all the rated retailers to varying degrees,
faces a potential goodwill impairment charge under FAS 142, non-
cash but of a material size, if the business climate outlook
remains weak. Although the timing of such a charge is uncertain,
it would signal a permanent reduction in the value of previously
acquired franchises and, thus, lower expected future profits and
likely lower credit measures.
"The negative outlook reflects our concerns about the depth and
length of the economic downturn and Sonic's ability to maintain
EBITDA levels appropriate for the rating. If lower profits lead to
leverage exceeding 5x through 2009, we could lower the rating in
mid-2009 or sooner. This could occur with a continuing weak U.S.
economy and the company's inability to reduce its cost base to the
lower revenue level. We could also lower the rating if Sonic's
cash use for discretionary acquisitions, dividend payouts, and
share repurchase activity in 2008 becomes aggressive amid a very
weak economy and its higher year-on-year capital spending program.
We could also lower the rating if liquidity becomes constrained
because tight covenants limit access to the company's revolving
credit line. Alternatively, we could revise the outlook back to
stable if Sonic is able to offset difficult auto sales with its
good brand mix, revenue diversity, focus on operating
efficiencies, and positive free operating cash flows. We do not
expect market conditions to improve sufficiently to warrant an
outlook revision to positive in the year ahead," S&P explains.
SOUTHWEST WAFFLES: Files for Bankruptcy Under Chapter 11
--------------------------------------------------------
Erik Larson of Bloomberg News reports that Southwest Waffles LLC
filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court for the Middle District
of Tennessee following the discovery of discrepancies in its
finances.
Bloomberg, citing papers filed with the Court, says the financial
discrepancies were detected by the Company following its
accounting officer's resignation.
"Since that time, the [company] has been investigating
certain accounting irregularities related to its financial
situation, but more time and effort will be required," Bloomberg
quoted James Shaub II, chief executive officer of the company.
The company owes $4.57 million in claims to Treetop Enterprises
Inc. and $1 million in unsecured claims to a unit of SunTrust Bank
Inc., Bloomberg relates. The company owes $10.8 million in
secured claims to FirstBank Corp., the report adds.
The company listed assets and debts of between $10 million and
$50 million each, Bloomberg says.
Headquartered in Norcross, Georgia, Southeast Waffles LLC operates
restaurants in Tennessee, Alabama, Mississippi and Kentucky. The
company has more than 2,200 employees.
SOUTHEAST WAFFLES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Southeast Waffles, LLC
dba Waffle House
446 Metroplex Drive, Suite 210
Nashville, TN 37211
Bankruptcy Case No.: 08-07552
Type of Business: The Debtor operates restaurants.
See: http://www.southeastwaffles.com
Chapter 11 Petition Date: August 25, 2008
Court: Middle District of Tennessee (Nashville)
Judge: Keith M. Lundin
Debtor's Counsel: Barbara Dale Holmes, Esq.
(bdh@h3gm.com)
David Phillip Canas, Esq.
(dpc@h3gm.com)
Glenn Benton Rose, Esq.
(gbr@h3gm.com)
Tracy M. Lujan, Esq.
(tml@h3gm.com)
Harwell Howard Hyne Gabbert & Manner
P. 315 Deaderick Street, Suite 1800
Nashville, TN 37238
Tel: (615) 256-0500
Fax: (615) 251-1058
http://h3gm.com/
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Treetop Enterprises Inc. dba $4,574,523
Ezell Holdings LLC
63 South Royal, Suite 1300
Mobile, AL 36602
SunTrust Bank $1,000,000
c/o Robert Goodrich
401 Commerce St., Ste. 1800
Nashville, TN 37219
US Food -- Montgomery $392,601
P.O. Box 117
Montgomery, AL 36101
Ezell, LLC $84,545
BlueCross Blue Shield of $62,000
TN
Chrichton Brandon Jackson $59,821
& Ward
Bell Signs Inc. $28,636
PeopleNet $24,570
Lattimore, Black, Morgan, $20,890
Cain
Alabama power Company $14,142
Kenneth Knight $12,600
Royal Leasing Inc. $10,824
NuCo2 LLC $8,681
Mississippi Logo LLC $7,500
Waste Manegement $7,134
The Kullman Firm $5,617
Mr. Kleen Pressure $5,570
Washing
SRC/Aetna $4,370
Custom Graphics $4,253
J.C. Ezell, LLC $3,986
SRAM CORPORATION: Moody's Rates $265MM Senior Secured Loan Ba3
--------------------------------------------------------------
Moody's Investors Service assigned a B2 first time corporate
family rating and a B2 probability of default rating to SRAM
Corporation. At the same time, Moody's assigned a Ba3 rating to
the company's proposed $265 million senior secured bank credit
facility consisting of a $25 million revolving credit facility and
a $240 million tern loan. The ratings outlook is stable.
These ratings were assigned:
-- Corporate family rating at B2;
-- Probability-of-default rating at B2;
-- $25 million Senior Secured Revolving Credit Facility due 2014
at Ba3 (LGD3, 31%)
-- $240 million Senior Secured Term Loan due 2014 at Ba3 (LGD3,
31%);
The roughly $600 million of proceeds from the new credit facility,
new unrated subordinated debt and an equity contribution of
preferred stock will be used to fund a minority investment in
SRAM, pay dividends to existing shareholders and refinance
existing debt.
The ratings reflect SRAM's modest scale with less than $500
million of revenue and relatively high adjusted financial leverage
of over 5x. The ratings are also constrained by SRAM's narrow
product focus on bicycle parts, history of shareholder friendly
activity with dividends paid in 2007 and modest operating cash
flow. SRAM's ratings benefit from its strong market position
within the bicycle component industry, its extensive product
portfolio within the premium bicycle parts, strong brand
recognition among bike enthusiasts, and stable high single
digit/low double digit operating margins. The ratings also
benefit from the bike industry not being overly correlated with
discretionary consumer spending, moderate seasonality, an
experienced management team, international diversification, and
stable industry dynamics.
The stable outlook reflects Moody's expectation that SRAM will
maintain double-digit operating margins and generate operating
cash flow of more than $20 million with modest amounts of capital
expenditures. The outlook also reflects Moody's expectation that
weak discretionary consumer spending will not materially impact
consumer demand for bicycles and that SRAM will maintain fully
adjusted leverage around 4x.
The ratings of the senior secured credit facility reflects both
the overall probability of default of the company, to which
Moody's assigns a PDR of B2, and a loss given default of LGD 3,
31%. Moody's used a 50% family LGD rate as the company's capital
structure consists of both bank debt and subordinated notes. The
Ba3 ratings of the first lien senior secured credit facility
reflects its senior position in SRAM's capital structure, full
guarantees of existing and future subsidiaries, an all asset
pledge of its domestic subsidiaries, and a significant amount of
subordinated debt and other unsecured obligations such as pensions
and leases in the capital structure.
The $235 million preferred stock, which represents 40% of SRAM's
equity, has no stated maturity date and is neither puttable nor
callable. The preferred investors receive a 10% annual non-cash
cumulative dividend that accrues quarterly. The preferred
investors have the right to force a sale of the company or an IPO
at or after the 5th anniversary of closing. Moody's treats 50% of
the preferred as debt principally because the aforementioned
liquidity event occurs prior to the stated maturity of both the
secured and subordinated debt and because the preferred receives
preference over common equity upon liquidation.
The final credit agreement is expected to contain customary
limitations, and financial covenants governing maximum leverage
and minimum fixed charge coverage. The ratings assume covenant
levels for the credit facility, when finalized, will give the
company appropriate leeway.
Based in Chicago, Illinois, SRAM Corporation is a global
manufacture and manufacture and marketer of premium branded
bicycle components with brand names such as Rock Shock and
TruVativ. Revenue for the twelve months ended June 2008 was
approximately $440 million.
SRAM LLC: S&P Assigns 'B' Corp. Credit Rating; Stable Outlook
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Chicago-based SRAM LLC. At the same time, S&P
assigned its 'B+' bank loan rating, one notch higher than the
corporate credit rating on the company, and '2' recovery rating to
its $265 million bank facility. The '2' recovery rating indicates
that lenders can expect substantial (70%-90%) recovery in the
event of a payment default. The facility consists of a $25 million
revolving credit maturing in 2014 and a $240 million term loan
maturing in 2014. Pro forma for the transaction, total debt
outstanding was $375 million as of June 30, 2008. The outlook is
stable.
"The rating reflects SRAM's high debt leverage and limited
liquidity," said Standard & Poor's credit analyst Hal F. Diamond,
"as well as risks relating to its sales concentration in the
midrange to high-end bicycle market, which faces prospects of
slowing growth."
STANDARD PACIFIC: Fitch Affirms Issuer Default Rating at B-
-----------------------------------------------------------
Fitch Ratings has affirmed and removed Standard Pacific Corp.'s
Issuer Default and outstanding debt ratings from Rating Watch
Negative as:
-- IDR at 'B-';
-- Secured borrowings under bank revolving credit facility at
'BB-/RR1';
-- Unsecured borrowings under bank revolving credit facility at
'B-/RR4';
-- Senior unsecured at 'B-/RR4';
-- Senior subordinated debt at 'CCC/RR6'.
Standard Pacific's Outlook is Stable.
Fitch's Recovery Rating of '1' on the secured advances under SPF's
revolving credit facility indicates outstanding (90%-100%)
recovery prospects for holders of this debt issue. The 'RR4' on
SPF's unsecured notes and the unsecured advances under its
revolving credit facility indicate average (30%-50%) recovery
prospects for holders of these debt issues. SPF's exposure to
claims made pursuant to performance bonds and joint venture debt
and the possibility that a portion of these contingent liabilities
would have a claim against the company's assets were considered in
determining the recovery for the unsecured debt holders. The
'RR6' on SPF's senior subordinated notes indicate poor recovery
prospects (0%-10%) in a default scenario. Fitch applied a
liquidation value analysis for these RRs.
The ratings reflect the current difficult U.S. housing environment
(especially in SPF's key California and Florida markets) and
Fitch's expectation that housing activity will continue to be
challenging during the balance of calendar 2008 and into 2009.
The ratings also reflect current and expected negative trends in
SPF's operating margins and meaningful deterioration in credit
metrics (particularly interest coverage, debt/EBITDA ratios and
tangible net worth).
The Stable Outlook reflects SPF's strengthened balance sheet and
improved liquidity position resulting from the equity investment
made by MatlinPatterson. On June 27, 2008, SPF closed the first
phase of the equity transaction, wherein MatlinPatterson purchased
$381 million of a new series of senior convertible preferred stock
representing 125 million shares of common stock with a conversion
price of $3.05 per share. Additionally, MatlinPatterson exchanged
$128.5 million of senior and subordinated debt for warrants to
acquire preferred stock representing $89.4 million shares of
common stock at an exercise price of $4.10 per share. As a result
of the transaction, SPF reduced consolidated unsecured debt by
$156 million and ended the second quarter with cash of
$572 million. SPF has also commenced a $152.5 million rights
offering for 50 million shares (second phase), which will further
reduce the company's leverage and increase its cash balance.
SPF has also amended its bank credit facilities. As part of the
amendment, the commitments under the revolving credit facility
were reduced from $500 million to $395 million and SPF paid down
its revolver balance from $90 million to $55 million and its Term
Loan A balance from $100 million to $65 million. Additionally,
certain financial covenants, including leverage, interest coverage
and tangible net worth requirements, were eliminated. The amended
credit facilities contain a new liquidity test requiring SPF to
maintain either a minimum ratio of cash flow from operations to
interest incurred or a minimum liquidity reserve.
SPF's improved liquidity position, including a less restrictive
covenant structure under its bank credit facilities, allows the
company to fund working capital needs and meet upcoming debt
maturities, including required quarterly amortizations, during
second half-2008 and 1H'09. SPF has $103.5 million and $125
million of unsecured notes coming due in October 2008 and
April 2009.
SPF and its JV partners generally provide credit enhancements in
connection with JV borrowings in the form of loan-to-value
maintenance agreements. At June 30, 2008, approximately
$275.2 million of its unconsolidated JV borrowings were subject to
these credit enhancements. SPF is solely responsible for $27.8
million and is jointly and severally responsible (with its
partners) for $247.4 million of debt. During the six months ended
June 30, 2008, SPF made $16.5 million of loan remargin payments
related to two joint ventures. Additionally, SPF unwound three
joint ventures for total cash consideration of about $83 million
and the assumption of $47.7 million of debt during the second
quarter. Subsequent to June 30, 2008, SPF exited two JVs with
total assets of $47.8 million and debt aggregating $29.7 million
for a combined payment of $3.3 million. While SPF has reduced its
joint venture exposure, the company's liquidity may be negatively
impacted by potential re-margining contributions as well as cash
outflow from unwinding certain joint ventures.
Future ratings and the direction of SPF's Outlook will be
influenced by broad housing market trends well as company-specific
activity, such as land and development spending, general inventory
levels, speculative inventory activity (including the impact of
high cancellation rates on such activity), gross and net new order
activity, debt levels and free cash flow trends and uses.
STRUCTURED ASSETS: Moody's Puts Low-B Class B4 Cert. on Review
--------------------------------------------------------------
Moody's Investors Service placed on review the rating of one
tranche issued by Structured Asset Securities Corporation
Assistance Loan Trust 2003-AL2. The collateral backing the
transaction consists of disaster assistance loans originated by
the Small Business Administration.
Complete rating actions are:
Issuer: Structured Asset Securities Corporation Assistance Loan
Trust 2003-AL2
-- Cl. B4, currently rated Ba2, on review for possible downgrade
The action is part of an ongoing, wider review of all RMBS
transactions, in light of the deteriorating housing market and
rising delinquencies and foreclosures. Many "scratch and dent"
pools are exhibiting higher than expected rates of delinquency,
foreclosure, and REO. The rating adjustments will vary based on
level of credit enhancement, collateral characteristics, pool-
specific historical performance, quarter of origination, and other
qualitative factors.
TEXAS HEMATOLOGY: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Texas Hematology/Oncology Center, P.A.
10 Medical Parkway, Suite 106
Professional Plaza 3
Dallas, TX 75234
Bankruptcy Case No.: 08-34204
Type of Business: The Debtor is into healhcare business.
Chapter 11 Petition Date: August 26, 2008
Court: Northern District of Texas (Dallas)
Judge: Harlin DeWayne Hale
Debtor's Counsel: Gerrit M. Pronske, Esq.
Pronske & Patel, P.C.
1700 Pacific Avenue, Suite 2260
Dallas, TX 75201
Tel: (214) 658-6500
Fax: (214) 658-6509
Email: gpronske@pronskepatel.com
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor did not file a list of its 20 Largest Unsecured
Creditors.
TOPAZ POWER: Moody's Rates First Lien Credit Facility Ba3
---------------------------------------------------------
Moody's Investors Service rates Topaz Power Holdings, LLC's first
lien credit facility Ba3. The credit facility was originally
rated on a provisional basis based upon draft loan documentation.
Moody's thereafter received and reviewed final documentation, the
terms and conditions of which were not materially different from
the drafts initially provided to us.
When complete, Topaz will consist of five generating units on
three sites. Topaz reports that Laredo Unit 4, one of the two LMS
100 simple-cycle gas-fired peaking units in the portfolio, reached
commercial operations on July 31 and Unit 5 is expected to do so
by the end of August. Constructed on a cost-plus basis, the units
were originally expected to be completed by the end of June and
are currently projected to go slightly over budget.
However, both units have passed all their performance tests, as
well as ERCOT ancillary services testing, and have achieved their
design capabilities including capacity and heat rate.
Furthermore, the owner's contingency in the construction budget
should still be adequate to cover additional cost overruns on the
portfolio's two combined cycle repowering projects, both of which
are being constructed pursuant to fixed-price, date-certain
contracts. Construction on the combined cycle units, which are
not expected to be complete until early 2010, remain on schedule
and within budget.
The operating performance at Barney Davis 1, a steam generating
unit that will remain part of the portfolio in its existing
configuration, has been sound.
TOUSA INC: Panel Cuts Ties with Jefferies, Seeks Payment of Fees
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in TOUSA Inc. and
its debtor-affiliates' Chapter 11 cases filed an amended
and restated application with the U.S. Bankruptcy Court for the
Southern District of Florida to retain Jefferies & Company Inc.,
as its financial advisors and investment bankers, for the period
from Feb. 19, 2008, through July 14, 2008.
As reported in the Troubled Company Reporter on April 2, 2008,
the Creditors Committee sought to retain Jefferies & Company as
its financial advisor, nunc pro tunc to Feb. 19, 2008.
Tara Lynn Torrens, vice-president of Capital Research and
Management Company and as co-chair of the Creditors Committee,
relates that after the Committee filed the Jefferies Application,
the firm's professionals primarily responsible for providing
services to the Committee left the firm's employ.
As of July 15, 2008, the Jefferies personnel providing services
to the Committee -- the TOUSA Team -- transferred to Moelis &
Company LLC. The Committee decided to follow the TOUSA Team from
Jefferies to Moelis, effective as of July 15, 2008.
Ms. Torrens concedes that the TOUSA Team has been providing
financial advisory services for the Committee since Feb. 19, 2008,
and is continuing to provide those services.
Ms. Torrens relates that in connection with the TOUSA Team's
migration from Jefferies to Moelis, the firms entered into an
agreement dated July 2, 2008, whereby both firms agree that
Jefferies may seek and receive fees for services performed by the
TOUSA Team prior to July 15 and Moelis may seek and receive fees
for services performed by the TOUSA Team on and after July 15.
The Committee believes that Jefferies personnel provided high-
quality financial advisory services for the Committee and the
terms of Jefferies' retention are reasonable. Accordingly, the
Committee asks the Court to approve the Amended Application.
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home. It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928).
The Debtors have selected M. Natasha Labovitz, Esq., Brian S.
Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at
Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger
Singerman, to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst
& Young LLP is the Debtors' independent auditor and tax services
provider. Kurtzman Carson Consultants LLC acts as the Debtors'
Notice, Claims & Balloting Agent.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed
total assets of $2,276,567,000 and total debts of $1,767,589,000.
Its consolidated balance sheet as of Feb. 29, 2008 showed total
assets of $1,961,669,000 and total liabilities of $2,278,106,000.
TOUSA's Exclusive Plan Filing Period expires Oct. 25, 2008.
(TOUSA Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
TOUSA INC: Panel Taps Moelis to Replace Jefferies as Advisors
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in TOUSA Inc. and
its debtor-affiliates' Chapter 11 cases seeks the U.S. Bankruptcy
Court for the Southern District of Florida's authority to retain
Moelis & Company LLC, as its successor financial advisor and
investment banker.
Tara Lynn Torrens, vice-president of Capital Research and
Management Company, as co-chair of the Committee, relates that
the Committee retained Jefferies & Company Inc., as its financial
advisor and investment banker, for the period from Feb. 19, 2008
through July 14, 2008.
However, the Jefferies professionals responsible for providing
investment banking services to the Committee -- the TOUSA Team --
left Jefferies and are now at Moelis. The Committee has decided
to follow the TOUSA Team from Jefferies to Moelis subject to the
Court's approval.
Ms. Torrens concedes that the TOUSA Team has been providing
financial advisory services for the Committee since
Feb. 19, 2008, and is continuing to provide those services.
As financial advisor and investment banker to the Committee,
Moelis will:
(a) will analyze the business, business plan operations,
assets, financial condition and prospects of the Debtors;
(b) provide valuation analyses of the Debtors if requested,
in a form agreed upon by Moelis and the Committee, and
provide expert testimony relating to that valuation;
(c) advise the Committee on the current state of the
restructuring and capital markets;
(d) assist and advise the Committee in examining and analyzing
any potential or proposed strategy for restructuring or
adjusting the Debtors' outstanding indebtedness or overall
capital structure;
(e) assist and advise the Committee in evaluating and
analyzing the proposed implementation of any
restructuring; and
(f) render other investment banking services.
In connection with the TOUSA Team's migration from Jefferies to
Moelis, Ms. Torrens states that the two firms entered into an
agreement, under which Jefferies may seek and receive fees for
services performed by the TOUSA Team prior to July 15, 2008, and
Moelis may seek and receive fees for services performed by the
TOUSA Team on and after July 15, 2008.
The Debtors' estates will pay Moelis a $150,000 monthly fee,
beginning on July 15, 2008, until the expiration or termination
of its retention. The Debtors will also reimburse 100% of
Moelis' incurred reasonable expenses.
Moreover, the Debtors' estates will pay Moelis a $3,000,000
transaction fee upon the consummation of a restructuring or
similar transaction. Moelis will not be entitled to the
Transaction Fee in the event the only restructuring consummated
is a sale of assets representing less than 75% of the Debtors'
value.
William Q. Derrough, a managing director at Moelis, assures the
Court that his firm and its professionals are "disinterested
persons" as defined in Section 101(14) of the Bankruptcy Code.
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home. It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928).
The Debtors have selected M. Natasha Labovitz, Esq., Brian S.
Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at
Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger
Singerman, to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst
& Young LLP is the Debtors' independent auditor and tax services
provider. Kurtzman Carson Consultants LLC acts as the Debtors'
Notice, Claims & Balloting Agent.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed
total assets of $2,276,567,000 and total debts of $1,767,589,000.
Its consolidated balance sheet as of Feb. 29, 2008 showed total
assets of $1,961,669,000 and total liabilities of $2,278,106,000.
TOUSA's Exclusive Plan Filing Period expires Oct. 25, 2008.
(TOUSA Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
TRANSAX INT'L: June 30 Balance Sheet Upside-Down by $3,479,528
--------------------------------------------------------------
Transax International Limited's consolidated balance sheet at
June 30, 2008, showed $2,691,076 in total assets and $6,170,604 in
total liabilities, resulting in a $3,479,528 stockholders'
deficit.
At June 30, 2008, the company's consolidated balance sheet also
showed strained liquidity with $1,560,077 in total current assets
available to pay $5,907,321 in total current liabilities.
The company a net loss of $901,447 on revenues of $1,730,992
during the three-month period ended June 30, 2008, as compared to
a net loss of $189,703 on revenues of $1,337,676 during the three-
month period ended June 30, 2007.
During the three-month period ended June 30, 2008, the company
incurred operating expenses in the aggregate amount of $1,832,553
compared to $1,384,315 incurred during the three-month period
ended June 30, 2007.
During the three-month period ended June 30, 2008, the company
incurred other expenses of $701,752, compared to other expenses of
$143,064 during the three-month period ended June 30, 2007. The
variance resulted primarily from the three-month period change
in the fair value of the company's derivative liabilities
positions of $527,543 loss in 2008, as compared to a $51,095 loss
in 2007. This change is related to the classification of the
embedded conversion feature and related warrants issued in
connection with the company's Series A Preferred Stock and
debenture payable as derivative instruments.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?311b
Going Concern Doubt
Moore Stephens, P.C., in New York, expressed substantial doubt
about Transax International Limited's ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007.
Since inception, the company has incurred cumulative net losses of
$13,475,019, and has a stockholders' deficit of $3,479,528 and a
working capital deficit of $4,347,244 at June 30, 2008.
About Transax International
Based in Miami, Florida, Transax International Limited (OTC BB:
TNSX.OB) -- http://www.transax.com/-- primarily through its
wholly-owned subsidiary, Medlink Conectividade em Saude Ltda., is
an international provider of information network solutions
specifically designed for healthcare providers and health
insurance companies. The company has offices located in
Miami, Florida and Rio de Janeiro, Brazil.
TRIBUNE CO: Fitch Lowers IDR to 'CCC' from B-; Outlook Negative
---------------------------------------------------------------
Fitch Ratings has downgraded these ratings on Tribune Company:
-- Issuer Default Rating to 'CCC' from 'B-';
-- Senior guaranteed revolving credit facility to 'CCC/RR4' from
'B/RR3';
-- Senior guaranteed term loan to 'CCC/RR4' from 'B/RR3';
-- Senior unsecured bridge loan to 'CC/RR6' from 'CCC/RR6';
-- Senior unsecured notes to 'CC/RR6' from 'CCC/RR6';
-- Subordinated exchangeable debentures due 2029 to 'CC/RR6'
from 'CCC-/RR6'.
Approximately $13.4 billion of debt is affected by this action.
The Rating Outlook is Negative.
The downgrade and Negative Outlook reflect the following
considerations:
-- Given the acceleration of declines in newspaper advertising
revenue and cash flow at Tribune and no evidence from any
participants in the industry regarding the prospects for
current pressure relenting, Fitch believes Tribune's credit
profile is consistent with a 'CCC' rating. For issuers in
the 'CCC' rating category, default is a real possibility and
the capacity to meet financial commitments is vulnerable to
deterioration in business and economic conditions. Fitch
notes business and economic conditions have been rapidly
deteriorating for newspaper companies over the past
12 months.
-- On August 13, TRB announced continued weak operating and
financial results. On a comparable basis, in the second
quarter of 2008, publishing revenue was down 11%, costs were
down 4% and operating EBITDA was off 38%, reflecting the
significant operating leverage in the business as cost cuts
have not been able to compensate for the revenue
deterioration. Advertising revenue has been under pressure
across advertising categories with classifieds continuing to
post double-digit declines (over 40% for real estate
classifieds). Interactive revenue was also down 4%. On the
broadcasting side, revenue has been up modestly while costs
were also up (7.5%) and operating EBITDA decreased 3%.
-- Fitch is aware that there is limited visibility regarding the
likelihood, timeframe and magnitude of a potential reversal
of these negative trends.
-- Over the longer term Fitch continues to anticipate that the
company will be challenged to generate meaningful and
consistent revenue growth, and remains cautious regarding
newspaper companies' prospects for capturing and monetizing
the significant volume of advertising dollars that are
migrating toward the internet. While the second half of 2008
should be favorable for the broadcasting division, Fitch
expects 2009 to be a weak year for TV broadcasting stations,
particularly those affiliated with lower rated networks (e.g.
The CW Network).
-- Cost cuts announced and implemented in the first half of 2008
should help in the intermediate term, but Fitch notes that
even more action may be necessary to offset the rapid erosion
of advertising dollars. Newsprint prices have been
escalating but have largely been offset by reduced
consumption through web width reductions, fewer pages (lower
advertising, less editorial, and actions such as elimination
of stock charts) and discontinuation of low-value
circulation.
-- Fitch expects TRB to continue to pursue asset sales (namely
the sale of the Chicago Cubs franchise and the company's 25%
stake in Comcast SportsNet Chicago) to enable it to address
principal amortization ($593 million) on the tranche X of its
term loan facility in June of 2009. However, further asset
monetization may be necessary. In the long run, Fitch is
concerned about the company's ability to generate cash to
meet its interest payments, principal amortization and
maturities under its debt obligations in a timely manner. In
the near term, Fitch believes the company can meet its
obligations for several quarters, but has grown more
concerned regarding the room the company has around its
covenants given the pressured EBITDA generation.
-- TRB has limited flexibility around its 9 times (x) guaranteed
leverage covenant. Fitch calculates the ratio to be in the
low-to-mid 8x range at June 30, 2008. If the company were to
experience similar declines in the second half of the year as
experienced in the first half, and sells the Cubs and
SportsNet stakes before year-end for net proceeds of more
than $675 million (which appears realistic), it could be
under the 9x leverage covenant.
However, if negative trends accelerate or if the
Cubs/SportsNet deal is not completed the company could be at
risk of breaching the threshold. Also, Fitch recognizes that
even with the Cubs sale, the company faces a material risk of
breaching the covenant threshold when it steps down in first-
quarter 2009 to 8.75x. While the company could receive an
amendment or waiver from the banks if it breaches a covenant,
in this credit environment Fitch is uncertain and cautious
regarding the terms of such a potential negotiation for such
a highly leveraged entity with deteriorating prospects. In
this scenario, the receipt of a waiver or amendment without
an upturn in business prospects is not likely to have a
positive impact on the rating. However, failure to receive
covenant relief could result in a restructuring (not
necessarily bankruptcy) that would likely further pressure
ratings.
-- Tribune management has met or exceeded Fitch's expectations
on the elements of its business over which it has more
explicit control: expense containment, asset sales and
exclusive dedication of cash flow toward debt repayment.
Fitch believes TRB management has distinguished itself from
other newspaper management teams by taking aggressive actions
across various areas of the company to attempt to preserve
the longer term health of the company: bringing in new
leadership from outside the industry, communicating directly
with staff about the challenges facing the industry, reducing
headcount, re-tooling incentive compensation for sales teams,
redesigning the product, exploring asset monetization/
utilization opportunities, and experimenting with new revenue
streams. While these actions appear prudent in the
intermediate- to long-term, they are less quantifiable in the
near term and they may not produce results that address the
company's currently strained financial flexibility. The
downgrade primarily reflects weakness stemming from elements
of the business that the company has less control over,
namely areas that Fitch understood were highly volatile, such
as classified advertising.
-- The 'CCC/RR4' rating for Tribune's secured bank credit
facility and term loans B and X reflects Fitch's belief that
31%-50% recovery is reasonable in distress given that it
benefits from a first-priority guarantee from direct and
indirectly owned U.S. subsidiaries (providing it priority
over other claims under a default scenario). The 'CC/RR6'
Recovery Rating on the bridge loan ($1.6 billion), the
unsecured notes and the subordinated exchangeable debentures
(PHONES) reflects Fitch's estimate that 0% recovery is
realistic in a distress scenario. (Although not reflected in
notching due to the expectation of 0% recovery, Fitch notes
there are differences in priority among the 'CC/RR6' rated
securities.)
Fitch's ratings reflect TRB's significant debt burden, well as the
decline in its revenue and cash flow. Fitch believes newspapers
and broadcast affiliates (particularly in large markets where
there is more competition for advertising dollars) face meaningful
secular headwinds that could lead to more cash flow pressure in
the future. In addition, the ratings continue to reflect volatile
newsprint prices and the threat of emerging technologies on the
economics of the pure-play broadcasting affiliate business. TRB's
businesses face the risk of margin compression as revenue
pressures are coupled with cost structures that are fixed or
contain elements that are largely outside of management's control.
The margin of safety to endure these threats in a cyclical
downturn has largely been exhausted. These concerns are balanced
somewhat by the geographic diversity of the company's assets as
well as the success of several of the company's on-line
investments. Also, TRB owns some valuable assets (L.A. Times,
Chicago Cubs, Food Network stake, CareerBuilder stake, etc.) that
are separable from the company. Fitch estimates that cash proceeds
from core divestitures would not likely de-leverage the company
but could provide some capacity to enhance liquidity (non-core
asset sales would be deleveraging, particularly the Cubs).
Liquidity is supported by availability under its $750 million
revolving bank credit facility which is fully available (with the
exception of $95 million in letters of credit) and $75 million
available under a $300 million Trade Receivable Securitization
Facility (entered into on July 1, 2008). In addition, the company
has available a delayed draw on the Term Loan B facility which
should permit the company to fund the $238 million medium-term
note coming due in October 2008 (which will slightly increase the
numerator of the guaranteed leverage test).
TRICOM SA: Court Extends Plan Solicitation Period to December 31
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Tricom S.A. and its U.S. affiliates until December 31, 2008,
to solicit votes for their Joint Prepackaged Chapter 11 Plan of
Reorganization.
The Debtors already made an initial solicitation of votes from
their creditors, which concluded on February 28, 2008. Results
of the solicitation showed that 100% of the holders of Class 3
Credit Suisse Existing Secured Claims and 97% of the holders of
Class 6 Unsecured Financial Claims voted to accept the Plan.
The Debtors have said they anticipate a re-solicitation of votes
in light of the proposed summary judgment presently being heard by
the Court. The summary judgment motion seeks to resolve the
proposed estimation of claims of Bancredit Cayman Limited and
Bancredito (Panama) S.A., against the Debtors.
The banks' claims, aggregating $178,000,000, allegedly resulted
from Tricom S.A's issuance in December 2002 of more than
21,000,000 shares of stock to investors for an aggregate purchase
price of $70,000,000. Bancredito seeks to recover $92,000,339
while Bancredit Cayman asserts $86,525,273.
The Debtors said the results of the hearing on the proposed
summary judgment may affect the Plan's feasibility and the course
of their reorganization, which may entail modification of the
Plan and re-solicitation of votes.
About Tricom S.A.
Tricom, S.A., was incorporated in the Dominican Republic on
January 25, 1988, as a Sociedad Anonima. Tricom is one of the
pre-eminent full service communications services providers in
the Dominican Republic. Headquartered in Santo Domingo, Tricom
offers local, long distance, and mobile telephone services,
cable television and broadband data transmission and Internet
services, which are provided to more than 729,000 customers.
Tricom's wireless network covers about 90% of the Dominican
Republic's population. Tricom's local service network is 100%
digital. The Company also owns interests in undersea fiber-
optic cable networks that connect and transmit
telecommunications signals between Central America, the
Caribbean, the United States and Europe.
Tricom USA, Inc., a wholly owned subsidiary of Tricom, was
incorporated in Delaware in 1992, and at that time was known as
Domtel Communications. A name change was effected in 1997 and
Domtel Communications formally became Tricom USA, Inc.
Tricom USA originates, transports and terminates international
long-distance traffic using switching stations and other
telecommunications equipment located in New York and Florida.
Tricom S.A. and its U.S. affiliates filed for Chapter 11
protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-
10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP,
in New York City, represent the Debtors. When the Debtors'
filed for protection from their creditors, they listed total
assets of US$327,600,000 and total debts of US$764,600,000.
As of June 30, 2008, Tricom had US$316,325,466 in assets and
US$771,970,349 in liabilities.
(Tricom Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000)
TRICOM SA: Court Adjourns Plan Status Conference to September 11
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
adjourned the status conference on the confirmation of
Tricom S.A. and its U.S. affiliates' Prepackaged Joint Chapter 11
Plan of Reorganization to September 11, 2008. A status conference
was previously scheduled for August 13, 2008.
About Tricom S.A.
Tricom, S.A., was incorporated in the Dominican Republic on
January 25, 1988, as a Sociedad Anonima. Tricom is one of the
pre-eminent full service communications services providers in
the Dominican Republic. Headquartered in Santo Domingo, Tricom
offers local, long distance, and mobile telephone services,
cable television and broadband data transmission and Internet
services, which are provided to more than 729,000 customers.
Tricom's wireless network covers about 90% of the Dominican
Republic's population. Tricom's local service network is 100%
digital. The Company also owns interests in undersea fiber-
optic cable networks that connect and transmit
telecommunications signals between Central America, the
Caribbean, the United States and Europe.
Tricom USA, Inc., a wholly owned subsidiary of Tricom, was
incorporated in Delaware in 1992, and at that time was known as
Domtel Communications. A name change was effected in 1997 and
Domtel Communications formally became Tricom USA, Inc.
Tricom USA originates, transports and terminates international
long-distance traffic using switching stations and other
telecommunications equipment located in New York and Florida.
Tricom S.A. and its U.S. affiliates filed for Chapter 11
protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-
10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP,
in New York City, represent the Debtors. When the Debtors'
filed for protection from their creditors, they listed total
assets of US$327,600,000 and total debts of US$764,600,000.
As of June 30, 2008, Tricom had US$316,325,466 in assets and
US$771,970,349 in liabilities.
(Tricom Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000)
TRICOM: Bancredit Insists Debtor Waived Attorney-Client Privelege
-----------------------------------------------------------------
Bancredit Cayman Limited says that Tricom S.A. failed to prove
that the attorney-client and work-product privileges had not been
waived when it disclosed the special committee report to the
counsel for the Ad Hoc Committee of Unsecured Creditors and
Sotomayor & Associates LLP.
Tricom previously urged the U.S. Bankruptcy Court for the Southern
District of New York to deny the proposed production of the
special committee report because it is protected from disclosure
by attorney-client and work product privileges.
The report contains findings of the Special Committee appointed
by Tricom's Board of Directors to investigate into a private
placement of shares of the company's common stock in December
2002, wherein Bancredito allegedly loaned off $70,000,000 to
investors to purchase the stock.
Glenn Edwards, Esq., at Satterlee Stephens Burke & Burke LLP, in
New York, says that Tricom merely argued that the disclosure "did
not increase the likelihood of potential disclosure to likely
adversaries."
"Intentionally or not, Tricom appears to be eliding, or hoping
that this Court will, between the very different standards for
waiver for attorney-client privilege and work-product protection.
This is a critical error," Mr. Edwards says.
Mr. Edwards points out that unlike the attorney-client privilege,
work-product protection is not necessarily waived by disclosures
to third persons.
"Attorney-client privilege is more susceptible to waiver than
work-product protection, and a demonstration that work-product
protection has not been waived says nothing about the waiver of
attorney-client privilege," Mr. Edwards argues.
According to Mr. Edwards, Tricom has, in effect, failed to prove
its burden of showing that attorney-client privilege has not been
waived and that it is only by demonstrating the propriety of
work-product protection that it can successfully resist
production of the report.
Mr. Edwards dismisses Tricom's contention that the special
committee report is entitled to attorney work-product protection
since it has been made in anticipation of a potential litigation.
"The materials sought to be protected must not simply concern
issues of potential litigation, preparation for litigation must
be the reason such materials were created in the first
place," he points out.
About Tricom S.A.
Tricom, S.A., was incorporated in the Dominican Republic on
January 25, 1988, as a Sociedad Anonima. Tricom is one of the
pre-eminent full service communications services providers in
the Dominican Republic. Headquartered in Santo Domingo, Tricom
offers local, long distance, and mobile telephone services,
cable television and broadband data transmission and Internet
services, which are provided to more than 729,000 customers.
Tricom's wireless network covers about 90% of the Dominican
Republic's population. Tricom's local service network is 100%
digital. The Company also owns interests in undersea fiber-
optic cable networks that connect and transmit
telecommunications signals between Central America, the
Caribbean, the United States and Europe.
Tricom USA, Inc., a wholly owned subsidiary of Tricom, was
incorporated in Delaware in 1992, and at that time was known as
Domtel Communications. A name change was effected in 1997 and
Domtel Communications formally became Tricom USA, Inc.
Tricom USA originates, transports and terminates international
long-distance traffic using switching stations and other
telecommunications equipment located in New York and Florida.
Tricom S.A. and its U.S. affiliates filed for Chapter 11
protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-
10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP,
in New York City, represent the Debtors. When the Debtors'
filed for protection from their creditors, they listed total
assets of US$327,600,000 and total debts of US$764,600,000.
As of June 30, 2008, Tricom had US$316,325,466 in assets and
US$771,970,349 in liabilities.
(Tricom Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000)
TRIPLE CROWN: Trading Halted, Faces Nasdaq Delisting
----------------------------------------------------
The Nasdaq Stock Market said that it will delist the common stock
of several companies including:
-- Rotech Healthcare Inc. whose stock was suspended on June 12,
2008;
-- Shoe Pavilion, Inc. whose stock was suspended on July 28,
2008;
-- Triple Crown Media, Inc. whose stock was suspended on July
25, 2008;
-- ProxyMed, Inc. whose stock was suspended on Aug. 1, 2008;
and
-- Millennium Cell Inc. whose stock was suspended on June 13,
2008.
The stock of each company has not traded on NASDAQ since then.
Accordingly, NASDAQ will file a Form 25 with the Securities and
Exchange Commission to complete the delisting, which becomes
effective ten days after the form is filed.
About Triple Crown
Headquartered in Lawrenceville, Georgia, Triple Crown Media Inc.
(Nasdaq: TCMI) -- http://triplecrownmedia.com/-- owns and
operates six daily newspapers and one weekly newspaper in Georgia.
TRONOX INC: Raises Bankruptcy Sceptre, Rothschild on Board
----------------------------------------------------------
Tronox Inc. disclosed in a regulatory filing with the Securities
and Exchange Commission that it is evaluating all strategic
options for the company, including mitigation of environmental
liabilities and capital restructuring.
Tronox said it has experienced significant losses for the year
ended December 31, 2007, and the six months ended June 30, 2008,
and has generated negative cash flows from operations in the
current year.
Tronox reported $403.8 million in net sales, on a consolidated
basis for the three months ended -- and $752.9 million in net
sales, on a consolidated basis, for the six months -- June 30,
2008. The company incurred a $34.4 million net loss for the
recent quarter and $34.6 million for the half year.
The company has $1.7 billion in total assets, including $703.5
million in current assets, as at June 30. The company has $937.8
million in current debts and $336.9 million in total noncurrent
debts.
Amendment to 2005 Credit Facility
The company's wholly owned subsidiary, Tronox Worldwide LLC, is a
party to a November 2005 senior secured credit facility. This
facility consists of a $200 million six-year term loan facility
and a five-year multicurrency revolving credit facility of $250
million.
In February 2008, Tronox requested and obtained approval for an
amendment to the 2008 and 2009 financial covenants. On June 27,
2008, the company received a waiver for a potential default on the
Consolidated Total Leverage Ratio -- as defined in the agreement
-- for the fiscal quarter ended June 30, 2008. In July 2008, the
company obtained approval for an amendment to the Consolidated
Total Leverage ratio for the second, third and fourth quarters of
2008. The limitations on capital expenditures have not been
modified and are $130 million in 2008 and $100 million in 2009 and
thereafter.
Tronox incurred amendment fees of approximately $2.5 million for
each of the amendments in February 2008 and July 2008. These costs
will be amortized over the remaining life of the debt. The margin
applicable to LIBOR borrowings at June 30, 2008 was 350 basis
points. Because the companys Consolidated Quarterly Leverage
Ratio (as defined) at June 30, 2008, exceeded 4.25x, the margin
increased by 50 basis points for the third quarter of 2008 to 400
basis points effective July 1, 2008. Due to a downgrade on the
company's debt rating on July 31, 2008, the margin increased by an
additional 50 basis points on that date and is currently 450 basis
points for the remainder of the third quarter of 2008.
The company was in compliance with its financial covenants at June
30, 2008, following the waiver and subsequent amendment. Under
these circumstances, accounting guidance requires the company to
demonstrate that it is not probable that the company will be in
default on its financial covenants in the next 12 months for the
company to classify its debt as noncurrent obligations. Due to the
continued uncertainty of the economic environment, the company is
unable to demonstrate such compliance with reasonable certainty
over the next 12 months and hence the outstanding balances on the
company's credit agreement have now been classified as current
obligations. The company's senior notes contain cross default
provisions such that if a default on the credit agreement were to
occur and remain uncured, this would trigger a default on the
senior notes as well. As a result, the entire $350.0 million
balance on the senior notes has been classified as a current
obligation as well.
As of June 30, 2008, Tronox had total debt of $540.1 million --
including $69.0 million of borrowings on our revolving credit
facility -- cash and cash equivalents of $23.3 million and
outstanding letters of credit issued under the credit facility in
the amount of $69.7 million resulting in unused capacity under the
revolving credit facility of $111.3 million. As of August 5, 2008,
the company had total debt of $544.9 million which included $84.0
million of borrowings on its revolving credit facility.
Amendment to Receivables Agreement
Also on July 29, 2008, Tronox and its subsidiary Tronox Worldwide
LLC entered into a First Amendment to and Waiver of Receivables
Sale Agreement to a Receivables Sale Agreement dated as of
September 26, 2007. Amendment No. 1, among other things, (i)
eliminated the requirement that all purchases and deposits from
collections be made out of, or in the case of collections, be made
into, the cash collateral account; (ii) eliminated Tronox Funding
LLC's ability to extend the scheduled maturity date and deleted
certain definitions; (iii) amended the term "aggregate Commitment"
to reduce $102,000,000 to $76,500,000; and (iv) amended the term
"Purchase Limit" to reduce it from $100,000,000 to $75,000,000.
As consideration for Amendment No. 1, the Company paid a fee of
$286,825.
Amsterdam Funding Corporation and ABN AMRO Bank N.V., as agent for
the Purchasers, and as a committed purchaser, are the
counterparties to the agreement.
Work Force Reduction
On May 22, 2008, the company announced an involuntary work force
reduction program as part of its ongoing efforts to reduce costs.
As a result of the program, the company's U.S. work force was
reduced by 31 employees. An additional 38 positions that were
vacant prior to the work force reduction will not be filled. There
were no costs associated with the elimination of vacant positions.
The program was substantially completed as of June 30, 2008.
Tronox Explores Alternatives
"If we were to continue to generate losses and negative cash
flows, this could raise substantial doubt about our ability to
continue as a going concern and we may need to seek alternative
financing arrangements. Should this occur, debt or equity
financing may not be available, when needed, on terms favorable to
us or even available to us at all," the company said. "Our
ability to continue as a going concern will depend upon our
ability to generate positive results and cash flows, restructure
our capital structure, including, among other alternatives,
refinancing our outstanding indebtedness and mitigating our
environmental liabilities. Failure to address these issues could
result in, among other things, the depletion of available funds
and our not being able to pay our obligations when they become
due, as well as possible defaults under our debt obligations."
... Rothschild on Board
Tronox has retained the investment banking firm Rothschild Inc. to
further assist the company in evaluating strategic options for the
business.
"This has been the most challenging business environment our
company has faced and while we continue to make strides against
difficult conditions, there is no assurance that we will be
successful in pursuing alternatives and options, or that the
current price increases we are implementing will offset continuing
cost increases and other factors that the company is unable to
predict and that are beyond our control. Even if we are successful
with one or more strategic alternatives, we may not be able to
fully address our many ongoing challenges and to maintain
financial viability. If we continue to experience negative impacts
on our operations, the company may need to seek relief under
Chapter 11 of the United States Bankruptcy Code to allow the
company to, among other things, restructure its capital structure
and reorganize its business, including its environmental legacy
issues," the company says.
Tronix says the remainder of 2008 will continue to be challenging
with respect to increasing manufacturing costs. The ongoing
escalation of energy costs coupled with broad inflationary
pressures are expected to continue to negatively impact company
margins.
"To mitigate this pressure, we are aggressively pursuing sales
price increases, fixed cost reductions and productivity
improvements. We have announced and are in the process of
implementing price increases. These increases are intended to help
offset the significant increases in freight, energy and other
input costs that the [titanium dioxide pigment] industry has
absorbed over the last two years," the company relates. "However,
there can be no assurance that the current price increases will
offset the continuing cost increases that the company is unable to
predict and that depend on numerous factors beyond its control."
About Tronox Incorporated
Headquartered in Oklahoma City, Tronox Incorporated (NYSE:TRX) --
http://www.tronox.com/-- is a producer and marketer of titanium
dioxide pigment. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The company's five pigment plants, which are
located in the United States, Australia, Germany and the
Netherlands, supply performance products to approximately 1,100
customers in 100 countries. In addition, Tronox produces
electrolytic products, including sodium chlorate, electrolytic
manganese dioxide, boron trichloride, elemental boron and lithium
manganese oxide.
At March 31, 2008, the company's consolidated balance sheet showed
$1.74 billion in total assets, $1.29 billion in total liabilities,
and $451.9 million in stockholders' equity.
TRONOX INC: Moody's Junks Senior Unsecured Regular Bond
-------------------------------------------------------
Moody's Investors Service downgraded Tronox Worldwide LLC's
Corporate Family Rating (CFR) to Caa3 from Caa2, and the
Probability of Default Rating was lowered to Ca from Caa3. In
addition, Moody's downgraded the company's secured revolver and
term loan to B2 from B1 and its unsecured notes to Ca from Caa3.
The speculative grade liquidity rating was affirmed at SGL-4. The
ratings remain under review with negative implications.
The one notch downgrade for the CFR is in reaction to:
1) recent management changes replacing the former CEO;
2) the presence of "going concern" language in the second
quarter 10Q;
3) the discussion of possibility of filing Chapter 11 appearing
for the first time in the second quarter 10Q; and
4) the possibility of a delisting of Tronox's equity on the
NYSE due to the rapid decline of Tronox's market capital.
Downgrades:
Issuer: Tronox Worldwide LLC
-- Corporate Family Rating, Downgraded to Caa3 from Caa2
-- Probability of Default Rating, Downgraded to Ca from Caa3
-- Senior Secured Bank Credit Facility, Downgraded to B2 from
B1, 9 - LGD1
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Ca
from Caa3, 56 - LGD4
-- Speculative Grade Liquidity Rating, Affirmed at SGL-4
The concerns listed above and Tronox's very low ratings are a
function of the company's inability to effect meaningful price
increases to offset rapidly increasing input costs that have
caused operating margins to drop from 6% in 2006 to just below
breakeven in 2007 and were still negative in the second quarter of
2008. This margin contraction is reflective of both poor
conditions in the housing industry, which is an important end
market for the coatings and PVC that use Tronox's TiO2, and the
unprecedented rise in input costs. Tronox initiated cost control
programs, starting in mid 2006, that have reduced cash costs by
some $93 million cumulatively through June 30, 2008, without which
Tronox's operating performance would have been significantly
worse.
While the willingness of the banks to grant a waiver and work with
management to provide further covenant relief is positive for
Tronox's liquidity, the need for such relief, reflecting weakness
in its ability to generate free cash flow, continues to be a
concern. Furthermore, Moody's is concerned that Tronox will need
to adjust covenants further to maintain access to the facility in
2009. Moody's notes that due to uncertainties regarding the
continued escalation of input costs and the global economic
outlook, Tronox management is unable to predict, with a reasonable
level of certainty, if the company will be able to achieve its
financial covenants in the first half of 2009. As a result of
Tronox's uncertainty accounting guidance requires that the
company's long-term debt be reflected in current liabilities on
the company's June 30, 2008 balance sheet.
Moody's believes that the ratings are constrained by the prospect
of continuing weak operating performance, weakness in the housing
market, covenant compliance and liquidity related pressures, and
large legacy environmental liabilities. Moody's believes that
these legacy environmental liabilities are unique in size and
complexity, and constitute a key negative factor when determining
the rating.
The ratings remain on review as Tronox has added specific new
management and consultants to aid the company in evaluating all
strategic alternatives to improve the business and address ongoing
challenges, including development opportunities, mitigation of
legacy liabilities, capital restructuring, land sales and all
other options available to it. Specifically, Tronox has hired
financial advisor Rothschild Inc. to further assist in its
evaluation of strategic alternatives
Moody's ongoing review will attempt to gauge the chances that the
company will be successful in pursuing alternatives and options or
that the current price increases will offset the continuing cost
increases. A further concern is Tronox's change in communication
policy as noted on their recent second quarter conference call on
July 30, 2008. As Tronox continues to evaluate strategic
alternatives for improving their business and addressing the
ongoing challenges the company faces, and given that these
initiatives are still being developed, Tronox was not prepared, on
the call, to answer questions regarding this process, the
company's strategies or long-term outlook. Moody's believes this
change in policy elevates the level of uncertainty surrounding the
strategic alternatives being considered.
The review also reflects Tronox's weakening business profile as
evidenced by the company's margin deterioration. While Moody's
believes that Tronox is fundamentally a stronger credit over the
medium term than the Caa3 CFR would imply, Moody's recognizes that
Tronox has a sizeable market share, relatively modest debt
maturities, positive geographic diversity, and stable customer
relationships. Moody's is focusing more on the company's near-
term performance due to the expectation of weaker credit metrics
in 2008/2009 and Moody's anticipation that the company may need to
renegotiate the recently amended financial covenants in its
revolver and term loan to maintain access to these facilities over
the next 12 months.
It is this prospect of further covenant pressure along with
reduced cash flows and lower cash balances that has resulted in
the speculative grade liquidity rating of SGL-4 reflecting the
prospect of weakening liquidity. A turnaround in the company's
projected financial performance could result in a positive rating
action. Conversely, weaker conditions in the company's main end-
markets, coatings and PVC, resulting in weak product pricing and
cash flows, could lead to lower ratings.
Tronox Worldwide LLC is the third-largest global producer of TiO2,
a white pigment used in a wide range of products for its ability
to impart whiteness, brightness and opacity. TiO2 is used in a
variety of products including paints and coatings, plastics, paper
and consumer products. The company commands a 12% global market
share in TiO2, reporting sales of $1.5 billion for the twelve
months ended June 30, 2008.
TROPICANA ENTERTAINMENT: Continues to Market Casino Aztar Assets
----------------------------------------------------------------
Tropicana Entertainment, LLC, filed a motion with the U.S.
Bankruptcy Court for the District of Delaware seeking to conduct a
sale process and an auction to obtain the best and highest
possible sale price for Casino Aztar, its Evansville, Indiana-
based casino and resort.
According to a company press release, the motion asks the court to
approve the process for the company to re-market the casino in the
hope that it might attract a higher bid than the one it received,
and tentatively agreed to, with Eldorado Resorts, LLC last March
when the company was operating under substantially different
circumstances and under a completely different governance
structure.
The process that Tropicana has proposed will help determine
whether selling the property or maintaining ownership post-
emergence is the appropriate path for realizing its maximum value.
The latter would require Tropicana to regain the approval of the
Indiana Gaming Commission to continue to operate the casino.
In any event, the proposed auction-style procedure represents an
opportunity for the new management team to pursue options that
could produce more satisfactory results for Tropicana's Chapter 11
constituents – including Indiana gaming regulators, various
creditor groups, and the Delaware Bankruptcy Court.
"We are committed to obtaining maximum value for our assets and to
doing what is right for all of our constituents," said new
Tropicana CEO Scott C. Butera. "The process we have proposed is
completely transparent and it gives our Board of Directors, formed
just last month with a majority of independent members, time to
evaluate its options. In addition, it is designed to ensure
meaningful discussions with our financial and regulatory
constituents along the way."
The request complies with the sales contract between Tropicana and
Eldorado Resorts, which contains provisions that address the
possibility that Tropicana would file for Chapter 11 protections.
Among them, if Tropicana exercises its right to seek another buyer
and subsequently sells the casino to someone other than Eldorado,
Tropicana is required to pay Eldorado a break-up fee of $6.6
million plus reimburse Eldorado for expenses of up to $500,000.
In addition, the Court is set to decide, on Sept. 2, 2008, on a
pending Casino Aztar sale agreement the Debtors and Eldorado
Resorts LLC, Dan Shaw writes for Evansville Courier & Press.
According to the Tropicana Bankruptcy News, Resorts Indiana, LLC,
and Eldorado Resorts, LLC, as parent guarantor, have asked the
Court to compel the Debtors to decide on whether to assume or
reject a Securities Purchase Agreement dated March 31, 2008.
Sale of Casino Aztar Evansville
Debtor Aztar Riverboat Holding Company, LLC, owns 100% of the
membership interests of Debtor Aztar Indiana Gaming Company, LLC.
The Debtors entered, on March 31, 2008, into a Purchase Agreement
with Resorts Indiana and Eldorado Resorts for the sale of all of
Aztar Riverboat's outstanding membership interests in Aztar
Indiana to Resorts Indiana.
Aztar Indiana owns a riverboat casino in Evansville, Indiana,
commonly known as Casino Aztar. Under the terms of the Purchase
Agreement, Resorts Indiana will pay $220,000,000 at closing, and
the Debtors will have the opportunity to receive an additional
$25,000,000 based on the financial performance of Aztar Indiana
during the year after the closing of the Evansville Sale.
The Evansville Sale was pending as of Tropicana's bankruptcy
filing, according to Michael L. Temin, Esq., at Wolf Block LLP, in
Philadelphia, Pennsylvania, relates.
Mr. Temin informs the Court that Eldorado Resorts, as Parent
Guarantor, has obtained a financing commitment, which requires it
to pay a minimum of $196,000 per month through Sept. 30, 2008, and
a minimum of $245,000 per month thereafter, to maintain the
Financing Commitment.
Appointment of Trustee at Casino Aztar Evansville
Also on March 31, 2008, the Indiana Gaming Commission approved a
Durable Power of Attorney, appointing Robert T. Dingman to serve
as Aztar Indiana's attorney-in-fact with respect to the operations
of Casino Aztar during the transitional period from the time of
his appointment to the completion of the Evansville Sale.
Aztar Indiana does not have the right to terminate, revoke,
suspend or amend the Power of Attorney. Effective April 18,
2008, Mr. Dingman's employer, Trinity Hill Group, LLC, was
appointed as the successor attorney-in-fact to replace Mr.
Dingman individually, according to Mr. Temin.
On May 6, 2008, the Court authorized the Debtors to honor their
obligations under the Power of Attorney and a certain Indemnity
Agreement. By July 2, 2008, the Court approved a resolution of
the Trustee Motion, which provides that the Debtors will promptly
commence discussions with gaming regulators for the state of
Indiana in an effort to obtain an reconveyance of gaming assets
in Indiana.
Resorts Indiana and Eldorado Resorts have filed gaming
applications with the Indiana Gaming Commission, which are being
processed, as well as with the Nevada Gaming Commission and the
Louisiana Gaming Control Board. Ernest Yelton, the executive
director of the Indiana Commission, said that "state regulators
will be ready to consider Eldorado's application by November at
the latest," Evansville Courier & Press reported.
Both companies have incurred $850,000, as of Aug. 6, 2008, to
comply with their obligations under the Purchase Agreement.
Additional costs are anticipated to exceed $1,000,000, Mr. Temin
says.
The Debtors have taken no action to either assume or reject the
Purchase Agreement to date.
Mr. Temin notes that the Debtors have two alternatives with
respect to Casino Aztar -- (i) hold the Evansville casino and
make it part of a reorganized Tropicana, or (ii) sell the
Evansville casino to utilize the proceeds to repay debt.
If the Debtors retain that Evansville Casino, it will be of no
detriment to the Debtors if they decide to terminate the Purchase
Agreement as termination would freeze the rejection claim of
Resorts Indiana and Eldorado Resorts, Mr. Temin points out. He
adds that if the Debtors decide to sell the Casino, the Purchase
Agreement will be a benefit to the Debtors' estate whether the
price agreed upon is above or below current fair market value.
If the Debtors believe the purchase price is below current market
value, Mr. Temin continues, assumption of the Purchase Agreement
would give the Debtors a "floor on the bids" thereby insuring
against the assumption being incorrect. Therefore, he maintains,
there is no downside to the Debtors if they are forced to act on
the proposed Evansville sale now.
Mr. Temin notes that the Debtors have agreed that if the Sale
does not take place by Sept. 28, 2008, the attorney-in-fact could
sell the Casino.
Unless the Debtors take prompt action to assume the Evansville
Purchase Agreement, it will terminate by its terms and may not be
extended beyond Dec. 10, 2008, Mr. Temin contends. After that
date, Resorts Indiana will not be available as a purchaser or as a
stalking horse to the proposed sale.
"The effect of failing to act promptly is that Resorts Indiana
and Eldorado Resorts will continue to incur costs, which will
neither benefit them or the Debtors," Mr. Temin argues.
About Tropicana Entertainment
Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada and Atlantic City, New Jersey.
Tropicana Entertainment LLC filed for Chapter 11 protection on
May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor-
affiliates filed for separate Chapter 11 petitions but with no
case numbers assigned yet. Kirkland & Ellis LLP and Mark D.
Collins, Esq., at Richards Layton & Finger, represent the Debtors
in their restructuring efforts. Their financial advisor is Lazard
Ltd. Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor.
Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell
LLP represent the Official Committee of Unsecured Creditors in
this case. Capstone Advisory Group LLC is financial advisor to
the Creditors' Committee.
The Debtors' exclusive plan filing period expires on Sept. 2,
2008. (Tropicana Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
TRUMAN CAPITAL: Moody's Junks Two Class B Certificates
------------------------------------------------------
Moody's Investors Service downgraded the ratings of three
tranches issued by Truman Capital Mortgage Loan Trust 2002-1 and
Truman Capital Mortgage Loan Trust 2002-2. The collateral backing
the transaction consists primarily of first lien adjustable-rate
and fixed-rate "scratch and dent" mortgage loans.
Complete rating actions are as follows:
Issuer: Truman Capital Mortgage Loan Trust 2002-1
-- Cl. B, downgraded from Caa2 to C
Issuer: Truman Capital Mortgage Loan Trust 2002-2
-- Cl. M-2, downgraded from Ba2 to B2, on review for possible
downgrade
-- Cl. B, downgraded from Caa2 to C
The action is part of an ongoing, wider review of all RMBS
transactions, in light of the deteriorating housing market and
rising delinquencies and foreclosures. Many "scratch and dent"
pools are exhibiting higher than expected rates of delinquency,
foreclosure, and REO. The rating adjustments will vary based on
level of credit enhancement, collateral characteristics, pool-
specific historical performance, quarter of origination, and other
qualitative factors.
URIELS INC: Court Okays John Berman as Bankruptcy Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado gave Uriels
Inc. permission to employ John A. Berman, Esq., as its bankrupty
counsel.
Mr. Berman will represent the Debtor in all legal matters arising
in its Chapter 11 case. Mr. Berman related that the Debtor first
consulted him prior to the bankruptcy filing. Since he is a sole
practitioner and, given the potential complexities and manpower
necessary to represent the Debtor, Mr. Berman said that he and the
Debtor sought to have Onsager Staelin & Guyerson LLC assist as co-
counsel.
Mr. Berman told the Court that he will charge the Debtor an hourly
rate of $275 for services rendered, and $95 per hour for paralegal
work.
Mr. Berman assured the Court that he does not represent any
interest adverse to the Debtor's estates, and that he and Onsager
Staelin will be dividing up the legal responsibilities and tasks
so that no task will be duplicative of other.
Westminster, Colorado-based Uriels, Inc. is a real estate
investment company. It filed for Chapter 11 protection on June 1,
2008 (Bankr. D. Col. Case No. 08-19500). Judge Howard R. Tallman
presides over the case. When the Debtor filed for bankruptcy, it
listed total assets of $11,116,654 and total debts of $14,523,624.
URIELS INC: Court Okays Onsager Staelin as Bankruptcy Co-counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado gave
Uriels, Inc., permission to employ Onsager, Staelin & Guyerson,
LLC as its bankruptcy counsel.
David M. Rich, Esq., a member at Onsager Staelin, will co-
represent the Debtor in all legal matters arising in its Chapter
11 case. Mr. Rich related that the Debtor first consulted John A.
Berman, Esq., prior to the bankruptcy filing. Since Mr. Berman is
a sole practitioner and, given the potential complexities and
manpower necessary to represent the Debtor, Mr. Rich said that the
Debtor and Mr. Berman sought to have Onsager Staelin assist as
co-counsel.
Mr. Rich told the Court that they will charge the Debtor these
hourly rates:
David M. Rich $275
Christian Onsager $330
Michael Guyerson $300
Paralegal $95
Mr. Rich assured the Court that they do not represent any interest
adverse to the Debtor's estates, and that the firm and Mr. Berman
will be dividing up the legal responsibilities and tasks to avoid
duplication of work.
Westminster, Colorado-based Uriels, Inc. is a real estate
investment company. It filed for Chapter 11 protection on June 1,
2008 (Bankr. D. Col. Case No. 08-19500). Judge Howard R. Tallman
presides over the case. When the Debtor filed for bankruptcy, it
listed total assets of $11,116,654 and total debts of $14,523,624.
VERMEER FUNDING: Fitch Ratings Junks $15.7 Million Class C Notes
----------------------------------------------------------------
Fitch Ratings affirmed one class and downgraded three classes of
notes issued by Vermeer Funding I, Ltd./Inc. Fitch has also
removed classes A-2, B and C from Rating Watch Negative. These
rating actions are effective immediately:
-- $67,648,721 class A-1 affirmed at 'AAA';
-- $38,500,000 class A-2 downgraded to 'A' from 'AA';
-- $37,625,000 class B downgraded to 'BB' from 'BBB+';
-- $15,709,320 class C downgraded to 'CCC' from 'B'.
Fitch's rating actions reflect the collateral deterioration within
the portfolio, specifically subprime residential mortgage-backed
securities.
Vermeer Funding is a cash flow structured finance collateralized
debt obligation that closed on April 13, 2004, and is managed by
Rabobank International. The now static portfolio is composed of
67.1% RMBS, 10.4% CDOs, 11.5% asset-backed securities, 8.1%
corporates, and 3% commercial mortgage-backed securities.
Presently 8% of the portfolio is comprised of 2006 and 2007
vintage U.S. RMBS.
Since November 2007, approximately 35.1% of the portfolio has been
downgraded with 8.2% of the portfolio currently on Rating Watch
Negative. Further, 28.6% of the portfolio is now rated below
investment grade, with 12.9% of the portfolio rated 'CCC+' and
below. Fitch notes that, overall, 9.4% of the assets in the
portfolio now carry a rating below the rating it assumed in
November 2007. The negative credit migration experienced since
the last review in November 2007 has resulted in the Weighted
Average Rating Factor to decline to 'BB+/BB' from 'BBB/BBB-',
breaching its covenant of 'BBB/BBB-' as of the July 31, 2008,
trustee report.
The collateral quality decline has caused the class C
overcollateralization test to fail. As of the trustee report
dated July 31, 2008, the class C OC ratio was 99.4% compared to
the 101% trigger level. As a result of the failed class C OC
test, principal proceeds are diverted from the preference shares
to pay the class A-1, A-2, B, and C notes sequentially until the
test is cured.
The class A-1 notes are affirmed due to the significant delevering
of the class. Since last review 29.3% of the principal balance
has paid down, and since closing 72.4% has paid down. Also, the
class A/B OC ratio is currently 110.3%, passing its 104% trigger
level.
The ratings on the class A-1, A-2, and B notes address the timely
receipt of scheduled interest payments and the ultimate receipt of
principal as per the transaction's governing documents. The
rating on the class C notes address the ultimate receipt of
interest payments and ultimate receipt of principal as per the
transaction's governing documents. The ratings are based upon the
capital structure of the transaction, the quality of the
collateral, and the protections incorporated within the structure.
Fitch is reviewing its SF CDO approach and will comment separately
on any changes and potential rating impact at a later date. Fitch
will continue to monitor and review this transaction for future
rating adjustments.
VERTIS COMMS: Court Confirms Prepackaged Chapter 11 Plan
--------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware in Wilmington confirmed a prepackaged
Chapter 11 reorganization plan filed by Vertis Communications. He
also confirmed a Chapter 11 reorganization plan filed by American
Color Graphics.
The confirmation orders signed by Judge Sontchi paves the
way for the closing of Vertis' merger with American Color
Graphics. Vertis will close the merger and emerge from its
prepackaged Chapter 11 on the "Effective Date" of the prepackaged
plan, which is expected to occur in mid-September.
"This is a landmark day in the history of Vertis," said Mike
DuBose, chairman and CEO of Vertis. "We have completed the next
step toward successfully restructuring our balance sheet and the
merger of American Color Graphics into Vertis. When our
prepackaged plan becomes effective, our teams will be ready to
create a combined company that offers even more solutions to our
customers by building on the already unparalleled service for
which Vertis is known."
Vertis has maintained business as usual during the restructuring,
including paying vendors in the ordinary course of business. The
company will continue normal operations through the remainder of
the case and pay all trade creditors in the ordinary course
without interruption, DuBose said. Under the prepackaged plan,
trade creditors are being paid in full.
Vertis filed a prepackaged reorganization plan on July 15, 2008 to
effectuate the merger with American Color Graphics. American Color
filed its own prepackaged reorganization plan that same day. The
merger will close at the same time both prepackaged plans become
effective.
As previously reported, the Vertis reorganization plan includes a
$250 million Senior Secured Revolving Credit exit facility from GE
Commercial Finance and a $400 million exit facility from Morgan
Stanley Senior Funding, Inc., as lead arranger.
The focal point of the reorganization plan is the agreement
between Vertis and American Color Graphics, two of the largest
printing and premedia companies in North America, to merge
American Color's operations into Vertis' nationwide marketing and
printing services platform. The merger will allow both companies
to enrich their core advertising inserts and newspaper products
manufacturing capabilities. It will also enable both Vertis and
American Color to offer an unprecedented scope of premedia and
workflow solutions to customers.
The consensual financial restructurings will reduce the combined
company's debt obligations -- including the off-balance sheet
accounts receivable facility and approximately $248 million of
Vertis Holdings Mezzanine Notes -- by approximately $1 billion
before transaction fees and expenses.
The noteholders of Vertis and American Color Graphics will
exchange their bonds for an aggregate of $550 million in new
notes and substantially all of the new equity in the merged
company.
"I want to thank all of our employees for their hard work and
dedication during the restructuring," DuBose said. "They
demonstrated an unwavering focus on client support and it's that
kind of commitment that makes Vertis special. I also want to
acknowledge our customers and supplier partners, who have
maintained their relationships with us throughout the process.
With our stronger finances, we anticipate even more opportunities
for all of our stakeholders."
About American Color Graphics
American Color Graphics Inc. -- http://www.americancolor.com/--
is one of North America's largest and most experienced full
service premedia and print companies, with eight print locations
across the continent, six regional premedia centers, photography
studios nationwide and a growing roster of customer managed
service sites. The company provides solutions and services such
as asset management, photography, and digital workflow solutions
that improve the effectiveness of advertising and drive revenues
for their customers.
The company filed and its four affiliates filed for Chapter 11
protection on July 15, 2008 (Bank. D. Del. Case No. 08-11467).
Pauline K. Morgan, Esq. and Sean T. Greecher ,Esq., at Young,
Conaway, Stargatt & Taylor represent the Debtors in their
restructuring efforts. Lehman Brothers, Inc. serves as the
company's financial advisors. When the Debtors filed for
protection from their creditors they listed estimated assets
$100 million to $500 million and estimated debts of $500 million
to $1 billion.
ACG Holdings, Inc. and American Color Graphics also filed
bankruptcy petition under the Companies' Creditors Arrangement Act
before the Ontario Superior Court of Justice (Commercial List) on
July 16, 2008. Jay A. Carfagnini, Esq., David B. Bish, Esq., and
Jason Wadden, Esq. at Goodmans LLP are their solicitors.
PricewaterhouseCoopers Inc. serves as their CCAA Information
Officer.
About Vertis Holdings Inc.
Headquartered in Baltimore, Maryland, Vertis Holdings, Inc. --
http://www.vertisinc.com/-- is a provider of targeted print
advertising and direct marketing solutions to America's retail and
consumer services companies.
The company and its six affiliates filed for Chapter 11 protection
on July 15, 2008 (Bank.D.Del. Case No. 08-11460). Gary T.
Holtzer, Esq. and Stephen A. Youngman, Esq. at Weil, Gotshal &
Manges LLP represent as the Debtors lead counsels and Mark D.
Collins, Esq. and Michael Joseph Merchant, Esq. at Richards Layton
& Finger, P.A. represent as their Delaware local counsels. Lazard
Freres & Co. LLC is the company's financial advisors. When the
Debtors filed for protection from their creditors they listed
estimated assets between $500 million and $1 billion and estimated
debts of more than 1 billion.
WATERFORD GAMING: Moody's Rates B1 on Senior Unsecured Notes
------------------------------------------------------------
Moody's Investors Service placed the ratings of Waterford Gaming
LLC's and its wholly-owned subsidiary and co-issuer, Waterford
Gaming Finance Corp. on review for possible downgrade, following a
similar action on Mohegan Tribal Gaming Authority in response to
MTGA's weaker operating performance in a challenging economic and
competitive environment.
Ratings placed under review for downgrade:
-- B1 corporate family rating
-- Ba3 probability of default rating
-- B1 senior unsecured notes
Waterford derives substantially all of its revenues from its
partnership interest in Trading Cove Associates, which itself
receives a revenue-based relinquishment fee equal to 5% of the
gross revenues of the Mohegan Sun casino owned by MTGA. During
its review, Moody's will assess the potential implications of
MTGA's deteriorating operating performance and financial profile
on the amount of cash distributions to Waterford and the Company's
continuous ability to meet its coupon payments and de-lever its
balance sheet. The rating agency observes that MTGA has the
ability to block all or part of the relinquishment payments,
should it face a continuing payment or non-payment default.
Waterford's corporate family rating has been positioned one notch
lower than MTGA's senior subordinated notes rating since September
21, 2007.
Waterford is a special purpose company formed solely for the
purpose of holding its 50% partnership interest, as a general
partner, in TCA, a Connecticut general partnership and the manager
and developer of the Mohegan Sun casino located in Uncasville, CT.
The Mohegan Sun casino is owned and operated by the Mohegan Tribal
Gaming Authority.
WCI COMMUNITIES: Section 341(a) Meeting Set for September 10
------------------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3, will
convene a meeting of the creditors of WCI Communities, Inc., and
its debtor affiliates on September 10, 2008, at 11:00 a.m., in
Room 5209 on the 5th Floor of the J. Caleb Boggs Federal
Courthouse at 844 King Street, in Wilmington, Delaware.
This is the first meeting of creditors required under 11 U.S.C.
Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy
cases.
All creditors are invited, but not required, to attend. The Sec.
3419(a) Meeting of Creditors offers the one opportunity in a
bankruptcy proceeding for creditors to question a responsible
office of the Debtor under oath about the company's financial
affairs and operations that would be of interest to the general
body of creditors.
About WCI Communities
Headquartered in Bonita Springs, Florida, WCI Communities, Inc. --
http://www.wcicommunities.com/-- is a fully integrated
homebuilding and real estate services company. It has operations
in Florida, New York, New Jersey, Connecticut, Massachusetts,
Virginia and Maryland. The company directly employs roughly 1,800
people, as well as roughly 1,800 sales representatives as
independent contract employees.
The company and 126 of its affiliates filed for Chapter 11
protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No.08-11643
through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq.,
Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida.
Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard,
P.A, are the Debtors' local bankruptcy counsel. Lazard Freres &
Co. represents the Debtors as financial advisors. The Debtors
selected Epiq Bankruptcy Solutions LLC as their claims & notice
agent.
When the Debtors filed for protection against their creditors,
they listed total assets of $2,178,179,000 and total debts of
$1,915,034,000.
(WCI Communities Bankruptcy News, Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).
WCI COMMUNITIES: Taps FTI Consulting as Restructuring Advisors
--------------------------------------------------------------
WCI Communities Inc. and its debtor-affiliates ask the United
States Bankruptcy Court for the District of Delaware for authority
to employ FTI Consulting, Inc., as their restructuring advisor.
FTI is a global business advisory firm with more than 3,000
professionals located in major business centers around the world.
FTI provides services in areas ranging from corporate finance and
interim management to economic consulting, forensic and
litigation consulting, strategic communications and technology.
Specifically, the Debtors need FTI to:
* evaluate current liquidity position and expected future cash
flows;
* assist in the management and control of all cash
disbursements;
* advise management on cash conservation measures and assist
with implementation of cash forecasting and reporting tools
as requested;
* assist in the development of financial projections;
* assess current situation and determining a solution for
highest and best recovery and recommending appropriate
strategic alternatives;
* assist management and the board of directors in managing the
various aspects of the execution of a Chapter 11 filing;
* advise the Debtors' personnel with the communications and
negotiations with lenders, creditors, and other parties-in-
interest including the preparation of financial information
for distribution to the parties-in-interest;
* advise and assist them in the preparation, analysis and
monitoring of historical, current and projected financial
affairs, including schedules of assets and liabilities,
statement of financial affairs, periodic operating reports,
analyses of cash receipts and disbursements, forecasts, and
various asset and liability accounts between themselves and
any other entities;
* assist them in the valuation of businesses and in the
preparation of a liquidation valuation for a reorganization
plan;
* advise and assist in identifying preference payments,
fraudulent conveyances and other causes of action; and
* assist with any other accounting and financial advisory
services as requested by the Debtors consistent with the
role of a bankruptcy and restructuring advisor.
The Debtors note that they have filed employment applications of
other professionals and FTI will work closely with the Debtors'
other professionals to ensure that there is no duplication in the
performance of tasks.
The Debtors tell the Court that the services of FTI are necessary
to enable them to maximize the value of their estates and to
reorganize successfully. The Debtors believe FTI has a wealth of
experience in providing restructuring and financial advisory
services in restructurings and reorganizations, and has an
excellent reputation for services rendered in large and complex
Chapter 11 cases on behalf of debtors and creditors throughout
the United States.
FTI, the Debtors note, has advised management, senior lenders and
unsecured creditors in several restructurings, including
Northwest Airlines Corporation, American Home Mortgage Corp.,
Calpine Corporation, Tower Automotive, Inc., Winn-Dixie Stores,
Inc., Refco, Inc., Delphi Corporation, Dana Corporation, and
LandSource Communities Development LLC.
The customary hourly rates charged by FTI professionals
anticipated to be assigned to the Debtors' cases are:
Senior Managing Director $650 to $715
Directors/Managing Directors $475 to $620
Associates/Consultants $235 to $440
Administration/Paraprofessionals $100 to $190
In addition, FTI will be entitled to receive a performance fee as
determined to be reasonable by the Debtors' board of directors.
The performance fee will be $500,000 upon confirmation of a plan
of reorganization plus one percent of the total exit financing
raised by the Debtors and will be capped at $1,500,000.
The Debtors will indemnify FTI for any claim arising from the
services the firm will provide, but not for any claim in
connection with the firm's postpetition performance of any other
services unless the postpetition services and indemnification are
approved by the Court.
The Debtors will have no obligation to indemnify FTI for any
claim or expense that is judicially determined to have arisen
from the firm's bad faith, gross negligence, or willful
misconduct and for a contractual dispute in which the Debtors
allege a breach of the firm's contractual obligations.
FTI will file an application if it believes it is entitled to
payments on account of the Debtors' indemnification before the
entry of an order confirming a Chapter 11 plan.
Michael C. Beunzow, a senior managing director with FTI, assures
the Court that his firm does not hold any interest adverse to the
Debtors' estates and is a "disinterested person" as defined
within Section 101(14) of the Bankruptcy Code.
About WCI Communities
Headquartered in Bonita Springs, Florida, WCI Communities, Inc. --
http://www.wcicommunities.com/-- is a fully integrated
homebuilding and real estate services company. It has operations
in Florida, New York, New Jersey, Connecticut, Massachusetts,
Virginia and Maryland. The company directly employs roughly 1,800
people, as well as roughly 1,800 sales representatives as
independent contract employees.
The company and 126 of its affiliates filed for Chapter 11
protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No.08-11643
through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq.,
Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida.
Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard,
P.A, are the Debtors' local bankruptcy counsel. Lazard Freres &
Co. represents the Debtors as financial advisors. The Debtors
selected Epiq Bankruptcy Solutions LLC as their claims & notice
agent.
When the Debtors filed for protection against their creditors,
they listed total assets of $2,178,179,000 and total debts of
$1,915,034,000.
(WCI Communities Bankruptcy News, Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).
WESTERN NONWOVENS: Sells All Assets to Sylvan for $11.2 Million
---------------------------------------------------------------
The Hon. Peter J. Walsh of the United States Bankruptcy Court for
the District of Delaware approved the sale of all assets of
Western Nonwovens Inc. to Sylvan Chemical Company for $11.2
million.
Bloomberg News reports that Sylvan Chemical's bid was $6 million
more than the stalking-horse bidder's offer.
As reported in the Troubled Company Reporter on July 22, 2008,
the Debtor planned to sell all its assets to SBC Manufacturing
Co. LLC, an affiliate of Simmons Bedding Co., for $5 million --
including the Debtor's plants in Orlando, Florida and Sauget,
Illinois.
The Court also approved the sale of the Debtor's other assets --
including inventory and intellectual property -- to Harvest
Consumer Insulation Inc. for $1.05 million.
A full-text copy of the Sylvan Asset Purchase Agreement dated
Aug. 20, 2008, is available for free at:
http://ResearchArchives.com/t/s?3133
About Western Nonwovens
Headquartered in Carson, California, Western Nonwovens, Inc. --
http://www.westernnonwovens.com-- manufactures nonwoven materials
and provides services to industries, including mattress,
automotive, retail apparel, filtration and furniture
manufacturers. Western Nonwovens Inc. and seven of its
affiliates filed voluntary petitions under Chapter 11 on July 14,
2008 (Bankr. D. Del., Case No. 08-11435). Representing the
Debtors is Laura Davis Jones, Esq., at Pachulski Stang Ziehl &
Jones LLP, in Wilmington, Delaware. The U.S. Trustee for Region 3
appointed creditors to serve on an Official Committee of Unsecured
Creditors. Hahn & Hessen LLP and Montgomery McCraken Walker &
Rhoads LLP represent the Committee in this cases. The Debtor
selected Epiq Bankruptcy Services LLC as its claims agent. When
the Debtor filed for protection against its creditors, it listed
assets of $28.4 million and debts of $106.9 million.
WHITEHALL JEWELERS: Sells 17 Stores to Michael Hill for $5MM
------------------------------------------------------------
Whitehall Jewelers Inc. reached a conditional deal with New
Zealand-based jeweler Michael Hill International Ltd. to sell 17
stores in the Midwest for $5 million, BankruptcyLaw 360 reports.
The 17 stores are mostly around Chicago, Illinois, with two stores
in St. Louis, Missouri.
According to Diamond Intelligence Briefs, the payment is primarily
for inventory, or 80 cents on the dollar on the cost price of the
inventory held at the 17 locations. The acquisition also includes
Whitehall's rights with respect to leases for all 17 stores and
all other trading assets at those locations, the report said.
About Whitehall Jewelers
Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings,
Inc. -- http://www.whitehalljewellers.com/-- owns and operates
375 stores jewelry stores in 39 states. The company operates
stores in regional and regional shopping malls under the names
Whitehall and Lundstrom. The Debtors' retail stores operate under
the names Whitehall (271 locations), Lundstrom (24 locations),
Friedman's (56 locations, and Crescent (22 locations). As of
June 23, 2008, the Debtors have about 2,852 workers.
The company and its affiliates, Whitehall Jewelers Inc., filed for
Chapter 11 protection on June 23, 2008 (Bankr. D. Del. Lead Case
No. 08-11261). James E. O'Neill, Esq., Kathleen P. Makowski,
Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl &
Jones, LLP, represent the Debtors in their restructuring efforts.
Epiq Bankruptcy Solutions LLC as their claims, noticing and
balloting agent.
When the Debtors' filed for protection against their creditors,
they listed total assets of total assets of $207,100,000 and total
debts of $185,400,000.
WM BOLTHOUSE: Limited Covenant Cushion Cues S&P to Hold 'B'
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Bakersfield, Calif.-based Wm. Bolthouse Farms Inc. to negative
from stable. S&P also affirmed the existing ratings on the
company, including the 'B' corporate credit rating. As of June 30,
2008, the company had about $811 million of total debt.
The outlook revision reflects S&P's concerns about the current
limited covenant cushion under its bank financial covenants
because of weaker-than-expected operating performance. In
addition, S&P believes the company's liquidity position could
decline because bank financial covenants tighten as of March 2009.
The ratings on Bolthouse reflect its narrow focus on the cut and
peeled carrot and super-premium natural beverage categories, its
high debt leverage, and its participation in the highly
competitive vegetable and beverage industries.
"The outlook on Bolthouse is negative. Although we expect
Bolthouse to maintain solid market share in carrots and super-
premium juices, we are concerned about limited covenant cushion,"
S&P says.
"We could lower the ratings if liquidity becomes further
constrained, and/or the company demonstrates a more aggressive
financial policy," said Standard & Poor's credit analyst Alison
Sullivan. "However, if the company can remain compliant with its
financial covenants in the coming quarters and improve the cushion
on its first-lien leverage ratio covenant close to 15%, compared
with a single-digit percentage cushion as of June 2008, we would
consider an outlook revision to stable," she continued.
WORLD HEART: Consolidates Operations, Eliminates Five Positions
---------------------------------------------------------------
World Heart Corporation is embarking on a phased consolidation
into a primary facility at its current location in Salt Lake City,
Utah. WorldHeart's focus is on the development, clinical trial
and subsequent commercialization of the advanced rotary
Levacor(TM) Ventricular Assist Device.
In this context, and as the first-generation Novacor(R) LVAS
reaches the end of its product life cycle, WorldHeart eliminated
five positions including the vice president of manufacturing John
Vajda at its facility in Oakland, California effective Aug. 22,
2008. The company expected that Mr. Vajda will provide consulting
services for transitional priorities. A second consolidation
phase will be completed by the next three to four quarters as
approximately ten additional Oakland positions are expected to be
eliminated while others are relocated to Salt Lake.
The consolidation plan includes a search for a CEO to reside in
Salt Lake City, Utah. Jal S. Jassawalla, WorldHeart's president
and CEO, will remain in a senior management position based in
California, along with certain key employees in areas as research
and development, clinical affairs and regulatory affairs.
Mr. Jassawalla will continue to focus on these WorldHeart
activities, with emphasis on clinical collaborations, advancement
of VAD technology and adoption of assist device therapy.
World Heart Corp. (TSX: WHT) -- http://www.worldheart.com/-- is a
developer of mechanical circulatory support systems. The company
is headquartered in Oakland, Calif. with additional facilities in
Salt Lake City, and Herkenbosch, Netherlands. WorldHeart's
registered office is Ottawa, Ontario, Canada.
Going Concern
Burr Pilger & Mayer LLP, in San Francisco, expressed substantial
doubt about World Heart Corporation's ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditor pointed
to the company's recurring losses.
The company said it expects to continue to generate operating
losses at least through 2008 and 2009.
X-RITE INC: Inks Forbearance, New Lender Deal to Reduce Debt
------------------------------------------------------------
X-Rite, Incorporated said that, following extensive negotiations,
the Company has signed a forbearance and new lender agreement and
investor agreements that include a plan to substantially reduce
debt, primarily by raising new equity.
Highlights of the Agreements:
-- A forbearance agreement in effect immediately with the
Company's First and Second Lien lenders, including access
to up to $10 million on its existing revolver
-- $155 million investment in the Company's common stock by
both new and certain existing shareholders;
-- Anticipated proceeds of approximately $20 million from the
sale or surrender of existing founders' life insurance
policies
-- A reduction of Company debt from $411 million to roughly
$267 million upon completion of the transaction
-- Upon completion of the transaction, the number of X-Rite's
common shares outstanding will increase from roughly
29.6 million to 76.5 million
-- One Equity Partners and Sagard Capital Partners, L.P. will
be entitled to representation on X-Rite's Board of
Directors
-- Transaction subject to customary closing conditions and
approval by the Company's stockholders with closing
expected in the Company's fourth fiscal quarter
"I am pleased to announce a transaction that addresses X-Rite's
capital structure that we believe balances the long term interests
of all our stakeholders,"said Thomas J. Vacchiano Jr., Chief
Executive Officer for X-Rite. "The combination of the right
capital structure, with a proven P&L and cash flow model, provides
us the needed foundation to refocus one hundred percent of our
efforts and attention toward our customers and strategy to lead
the transformation of the industry and the business of color."
The Company reported that it has reached an agreement with its
First and Second Lien lender groups, as well as three
institutional investors as part of a plan to reduce its debt and
amend the existing credit agreements. The forbearance agreement
with its First and Second Lien lender groups includes forbearance
through the closing and access of up to an additional $10 million
on its existing revolving credit facility. Further, upon the
successful closing of the Company's capital raise and subsequent
debt reduction, these same lenders have agreed to amend their
credit facilities to provide new financial covenants and interest
rates. Under the terms of the agreements with its equity
investors, One Equity Partners will invest $100 million in newly
issued shares of X-Rite common stock at a price of $3.50 per
share, which will represent approximately 28.6 million shares or
37.3 percent of the shares outstanding on a pro forma basis
following completion of the transaction.
One Equity Partners' investment will be complemented with
incremental investments by two existing institutional
shareholders, Sagard Capital Partners, L.P. and Tinicum Capital
Partners II, L.P. Sagard and Tinicum will invest $27.2 million
and $27.8 million respectively in newly issued common stock at a
price of $3.00 per share, which will represent approximately 9.1
million and 9.3 million shares. Sagard and Tinicum's expected pro
forma ownership following completion of the transaction, including
their existing shareholdings, will be approximately 15.4 percent
and 13.4 percent. The transaction will result in an increase in
the number of shares of common stock outstanding from 29.6 million
to 76.5 million. One Equity Partners will be entitled to nominate
three members of the Company's Board of Directors and Sagard will
be entitled to nominate one member of the Company's Board of
Directors. Upon completion of the transaction, the current size of
the Board of Directors will remain unchanged at nine total
members.
The transactions are expected to result in the reduction of the
Company's First Lien debt by approximately $92 million to an
estimated $177 million post closing. Spreads on the First Lien
facilities will be subject to a pricing grid beginning at LIBOR
plus 5 percent and declining to the original 3.5 percent spread as
the Company deleverages.
It is further anticipated that the Company's $105 million Second
Lien debt facility will be reduced by approximately $37 million.
The interest rate on the remaining Second Lien debt will be reset
to LIBOR plus 11.375 percent. The Company's previously disclosed
$12 million liability from its cancellation of certain swap
arrangements with Goldman Sachs will also be paid in full with the
equity proceeds.
The Company's Board has approved the sale or surrender of the life
insurance policies related to its former founders for anticipated
net proceeds of approximately $20 million. These funds will also
be used for debt reduction and general corporate purposes. At the
closing of the transaction, the Company will improve its liquidity
position by retaining $7.5 million of the overall proceeds, plus
reimbursement of any fees and expenses related to the transaction
paid prior to the closing, and regaining access to its existing
revolver.
"We are excited about the opportunity to be a part of X-Rite's
future," stated Colin Farmer, a Managing Director at One Equity
Partners. "X-Rite's market leadership position has been
substantially strengthened by the acquisitions of Amazys and
Pantone. The Company's attractive business model and future market
opportunities fit our investment profile very well."
John Utley, Chairman of the Board of Directors for X-Rite,
commented, "The Board has been integral in shaping this deal and
looks forward to a productive relationship with the new investors.
It is important that the Company regains solid financial footing
so that both existing and future shareholders of X-Rite have an
opportunity for positive value creation. Our new plan is designed
to accomplish this important goal and the Board recommends it
receive shareholder approval."
The transaction, which was unanimously approved by the Company's
Board of Directors, is subject to customary closing conditions and
approval by the Company's stockholders. The transaction is
expected to close in the Company's fourth fiscal quarter.
Vacchiano concluded, "I would like to recognize the challenges
that X-Rite and its' stakeholders have had over the last several
months. Many of you have stayed with us through this time and this
has made a positive difference. The Board and management team are
gratified by the support and the vote of confidence reflected by
the new investments being made in X-Rite."
RBC Capital Markets acted as exclusive financial advisor to X-Rite
with regard to the negotiations with the First and Second Lien
lender groups and the new capital infusion. JPMorgan Securities
and Wachovia Securities acted as financial advisors to One Equity
Partners.
About One Equity Partners
Established in 2001, One Equity Partners manages $8 billion of
investments and commitments for JPMorgan Chase & Co. in direct
private equity transactions. Partnering with management, One
Equity Partners invests in transactions that initiate strategic
and operational changes in businesses to create long-term value.
One Equity Partners' investment professionals are located across
North America, Europe and Asia, with offices in New York, Chicago,
Menlo Park, Frankfurt and Hong Kong. Over recent years, One Equity
Partners has invested approximately $3.5 billion to acquire over
thirty companies in a variety of industries including defense,
chemicals, healthcare, technology and manufacturing.
On the Net: http://www.oneequity.com/
On the Net: http://visitwww.sagardcapital.com/
About X-Rite
X-Rite, Incorporated (NASDAQ:XRIT), including unit Pantone, Inc.,
develops, manufactures, markets and supports innovative color
solutions through measurement systems, software, color standards
and services. X-Rite serves a range of industries, including
printing, packaging, photography, graphic design, video,
automotive, paints, plastics, textiles, dental and medical. On
the Net: http://www.xrite.com/
X-RITE INC: S&P Revises 'CCC+' Rating to Watch Pos on Lender Deal
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its CreditWatch on X-
Rite Inc. to positive from developing.
"The ratings were placed on CreditWatch with positive implications
pending closing of a planned common equity issuance and concurrent
debt repayment expected in the fourth calendar quarter of 2008,"
said Standard & Poor's credit analyst Bruce Hyman.
On Aug. 20, 2008, X-Rite Inc. (CCC+/Watch Pos/--) announced that
it had signed a forbearance and new lender agreement and investor
agreements that include a plan to substantially reduce debt,
primarily through the issuance of $155 million in common equity to
new and certain existing shareholders. The agreement also provides
the company with access to up to $10 million on its revolving
credit agreement. Following closing of the pending
recapitalization, the company's balance sheet debt will be reduced
to about $267 million, from about $411 million today; new
covenants will become effective, interest rates will be higher,
and initial cash levels will also be higher. Pro forma debt
leverage will likely be in the 5.5x area. The transactions are
subject to customary conditions, including shareholder and
regulatory approval, and are expected to close in the December
2008 quarter.
The ratings had been placed on CreditWatch with negative
implications in April 2008 following the company's announcement
that it was not in compliance with certain covenants in its
secured credit facilities. Ratings were lowered and the
CreditWatch implications were revised to developing on June 11,
2008, reflecting the company's ongoing negotiations over covenant
violations with its lenders, lack of further access to its
revolver, ongoing negative free cash flows, Standard & Poor's
further assessment of weakening market conditions, and the
challenges of completing two acquisitions. Following the
recapitalization, the corporate credit rating is likely to be in
the 'B' range.
Standard & Poor's will meet with management and review the pending
capital structure, overall business conditions, and the company's
anticipated profitability and cash flow profiles in resolving the
CreditWatch.
ZAIO CORP: Net Loss Lowers to $1.8MM in Quarter ended June 30
-------------------------------------------------------------
Zaio Corporation disclosed the results for the three and six
months ended June 30, 2008. Net loss in the second quarter of
2008 was C$1.8 million or $1.8 million compared to a loss of
C$2.8 million or $2.6 million in the second quarter of 2007 and
C$3.4 million or $3.3 million for the first six months of 2008
compared to C$3.8 million or $3.3 million for the same period in
the prior year.
Revenue in the second quarter of 2008 increased to C$6.7 million
or $6.7 million) compared to C$1.7 million or $1.5 million in the
second quarter of 2007 bringing the total revenue for the first
six months of the year to C$12.7 million or $12.6 million compared
to C$1.8 million or $1.6 million for the first six months of 2007.
There are two reasons for the increase in revenue. The first six
months of the prior year included only the results of operations
from Zaio's acquisition of Realink Corporation on April 2, 2007,
and only for three of the six months. In addition, there was no
revenue recorded in 2007 from zones being turned over versus
revenue in 2008 from 432 zones turned over as recorded in the
first six months of 2008.
Revenue streams from the sale of traditional valuation products
contributed $4.8 million in the second quarter compared to
$1.5 million in the second quarter of 2007. Revenue from these
products for the first six months of the year was $9.4 million
compared to $1.5 million in the same period of 2007. These
products represented 74% and 82% of the company's revenue for the
first six months of the year in 2008 and 2007. As twelve zones
have now achieved live or operational status, the company expects
to see the first revenues from its Zaio valuation products in
addition to its traditional valuation products in the second half
of this year. This volume is expected to be low until a larger
number of zones are brought live.
At June 30, 2008, Zaio had total assets of $37.6 million. The
company's cash balance at June 30, 2008 was $1.5 million,
excluding $3.6 million held as investments. The company also has
amounts owing to it on the sale of Zone License Agreements of
approximately $3.0 million which do not appear on the balance
sheet.
Going Concern Doubt
Continued operations are dependent upon the company raising the
necessary funds in the senior debt markets, subordinated debt
markets and equity markets, and increasing sales and achieving
profitability, but there is no assurance that this will occur.
Accordingly, there is uncertainty regarding the company's ability
to continue as a going concern. The company continues to pursue
all various financing alternatives available to it. Management
also continues to explore opportunities to align with potential
strategic partners in the valuation industry and will consider
further acquisitions that allow us to penetrate its various
markets sooner.
About Zaio Corp.
Headquartered in Alberta, Canada, Zaio Corporation (TSX-V: ZAO) is
a technology and database company. The Zaio network of appraisers
currently serves 500 lenders with a variety of nationwide
appraisal services. Zaio maintains a secure database of 140
million properties and its affiliated appraisers are now site
verifying property data, photos and appraisals of virtually every
property in America. Zaio's network of local appraiser experts
appraise entire cities, one building at a time using a proprietary
GeoScore(TM) rating system.
* S&P Junks Ratings on 63 Subprime RMBS Deals After Write-Downs
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings to 'D' on
68 classes of asset-backed certificates from 63 U.S. subprime
residential mortgage-backed securities (RMBS) transactions from 18
issuers. One of the lowered ratings was on CreditWatch negative
before the downgrades.
S&P downgraded the affected classes to 'D' because they
experienced principal write-downs.
Subordination, overcollateralization, and excess spread provide
credit support for these transactions. The collateral for these
transactions originally consisted primarily of fixed- and
adjustable-rate subprime mortgage loans secured primarily by one-
to four-family residential properties.
RATINGS LOWERED
Aames Mortgage Investment Trust 2006-1
Series 2006-1
Rating
Class CUSIP To From
----- ----- -- ----
M-11 00252GAQ2 D CC
Asset Backed Securities Corporation Home Equity Loan Trust Series
2001-HE1
Series 2001-HE1
Rating
Class CUSIP To From
----- ----- -- ----
B 04541GBE1 D CCC
Asset Backed Securities Corporation Home Equity Loan Trust Series
2003-HE3
Series 2003-HE3
Rating
Class CUSIP To From
----- ----- -- ----
M5 04541GEQ1 D CC
Asset Backed Securities Corporation Home Equity Loan Trust Series
NC 2006-HE2
Series NC2006-HE2
Rating
Class CUSIP To From
----- ----- -- ----
M11 04541GWS7 D CC
Asset Backed Securities Corporation Home Equity Loan Trust, Series
OOMC
2006-HE3
Series 2006-HE3
Rating
Class CUSIP To From
----- ----- -- ----
M11 04541GXP2 D CC
Asset Backed Securities Corporation, Home Equity Loan Trust,
Series NC 2006-HE4
Series NC2006-HE4
Rating
Class CUSIP To From
----- ----- -- ----
M8 04544GAQ2 D CC
Bear Stearns Asset Backed Securities I Trust 2006-HE5
Series 2006-HE5
Rating
Class CUSIP To From
----- ----- -- ----
M-11 07388CAQ3 D CCC
Bear Stearns Asset Backed Securities I Trust 2006-HE6
Series 2006-HE6
Rating
Class CUSIP To From
----- ----- -- ----
II-M-10 07388UBK5 D B
II-M-11 07388UBL3 D CCC
Bear Stearns Asset Backed Securities I Trust 2006-HE7
Series 2006-HE7
Rating
Class CUSIP To From
----- ----- -- ----
II-M-10 07388HBK4 D CCC
Bear Stearns Asset Backed Securities I Trust 2006-HE8
Series 2006-HE8
Rating
Class CUSIP To From
----- ----- -- ----
I-M-11 07388JBC8 D CC
BNC Mortgage Loan Trust 2006-2
Series 2006-2
Rating
Class CUSIP To From
----- ----- -- ----
B2 055683AR7 D CC
Bravo Mortgage Asset Trust 2006-1
Series 2006-1
Rating
Class CUSIP To From
----- ----- -- ----
M-10 105667AN9 D CC
M-11 105667AP4 D CC
DFC HEL Trust 2001-2
Series 2001-2
Rating
Class CUSIP To From
----- ----- -- ----
B 233205AM5 D CCC
Fieldstone Mortgage Investment Trust Series 2005-1
Series 2005-1
Rating
Class CUSIP To From
----- ----- -- ----
M10 31659TDM4 D CC
Fieldstone Mortgage Investment Trust, Series 2005-3
Series 2005-3
Rating
Class CUSIP To From
----- ----- -- ----
M12 31659TEV3 D CC
M13 31659TEW1 D CC
First NLC Trust 2005-4
Series 2005-4
Rating
Class CUSIP To From
----- ----- -- ----
M-11 32113JCT0 D CC
HSI Asset Securitization Corporation Trust 2005-NC1
Series 2005-NC1
Rating
Class CUSIP To From
----- ----- -- ----
M-14 40430HAW8 D CC
HSI Asset Securitization Corporation Trust 2006-NC1
Series 2006-NC1
Rating
Class CUSIP To From
----- ----- -- ----
M-11 40430HFC7 D CC
HSI Asset Securitization Corporation Trust 2006-WMC1
Series 2006-WMC1
Rating
Class CUSIP To From
----- ----- -- ----
M-6 40430MAM9 D CC
M-7 40430MAN7 D CC
IXIS Real Estate Capital Trust 2005-HE1
Series 2005-HE1
Rating
Class CUSIP To From
----- ----- -- ----
B-3 45071KAZ7 D CC
IXIS Real Estate Capital Trust 2006-HE1
Series 2006-HE1
Rating
Class CUSIP To From
----- ----- -- ----
B-4 45071KDQ4 D CC
IXIS Real Estate Capital Trust 2006-HE2
Series 2006-HE2
Rating
Class CUSIP To From
----- ----- -- ----
B-3 46602WAN4 D CC
MASTR Asset Backed Securities Trust 2005-FRE1
Series 2005-FRE1
Rating
Class CUSIP To From
----- ----- -- ----
M-9 57643LMJ2 D CC
M-10 57643LMK9 D CC
MASTR Asset Backed Securities Trust 2005-HE2
Series 2005-HE2
Rating
Class CUSIP To From
----- ----- -- ----
M-11 57643LKW5 D CC
MASTR Asset Backed Securities Trust 2005-WMC1
Series 2005-WMC1
Rating
Class CUSIP To From
----- ----- -- ----
M-11 57643LHG4 D CCC
MASTR Asset Backed Securities Trust 2006-FRE1
Series 2006-FRE1
Rating
Class CUSIP To From
----- ----- -- ----
M-8 57643LPX8 D CC
MASTR Asset Backed Securities Trust 2006-FRE2
Series 2006-FRE2
Rating
Class CUSIP To From
----- ----- -- ----
M-8 57643GAN7 D CC
MASTR Asset Backed Securities Trust 2006-HE3
Series 2006-HE3
Rating
Class CUSIP To From
----- ----- -- ----
M-8 57645JAM1 D CC
MASTR Asset Backed Securities Trust 2006-HE4
Series 2006-HE4
Rating
Class CUSIP To From
----- ----- -- ----
M-11 576449AQ5 D CC
MASTR Asset Backed Securities Trust 2006-NC2
Series 2006-NC2
Rating
Class CUSIP To From
----- ----- -- ----
M-11 55275BAR8 D CC
MASTR Asset Backed Securities Trust 2006-WMC2
Series 2006-WMC2
Rating
Class CUSIP To From
----- ----- -- ----
M-7 57644TAM0 D CC
MASTR Asset Backed Securities Trust 2006-WMC4
Series 2006-WMC4
Rating
Class CUSIP To From
----- ----- -- ----
M-7 57645MAN2 D CC
MASTR Asset Backed Securities Trust 2007-WMC1
Series 2007-WMC1
Rating
Class CUSIP To From
----- ----- -- ----
M-7 55275TAM0 D CC
MASTR Asset Backed Secutiries Trust 2006-WMC1
Series 2006-WMC1
Rating
Class CUSIP To From
----- ----- -- ----
M9 57643LRV0 D CC
Meritage Mortgage Loan Trust 2005-1
Series 2005-1
Rating
Class CUSIP To From
----- ----- -- ----
M-10 59001FCG4 D CC
Meritage Mortgage Loan Trust 2005-2
Series 2005-2
Rating
Class CUSIP To From
----- ----- -- ----
M-11 59001FDB4 D CC
NovaStar Mortgage Funding Trust Series 2006-6
Series 2006-6
Rating
Class CUSIP To From
----- ----- -- ----
M-11 66988RAR8 D CC
Securitized Asset Backed Receivables LLC Trust 2006 FR2
Series 2006-FR2
Rating
Class CUSIP To From
----- ----- -- ----
B-4 81376VAK3 D CC
Securitized Asset Backed Receivables LLC Trust 2006-FR3
Series 2006-FR3
Rating
Class CUSIP To From
----- ----- -- ----
B-4 813765AK0 D CC
Securitized Asset Backed Receivables LLC Trust 2006-FR4
Series 2006-FR4
Rating
Class CUSIP To From
----- ----- -- ----
B-3 81377GAL3 D CC
Securitized Asset Backed Receivables LLC Trust 2006-HE2
Series 2006-HE2
Rating
Class CUSIP To From
----- ----- -- ----
B-4 81377AAP7 D CC
Securitized Asset Backed Receivables LLC Trust 2006-NC2
Series 2006-NC2
Rating
Class CUSIP To From
----- ----- -- ----
B-4 81376EAK1 D CC
Securitized Asset Backed Receivables LLC Trust 2006-NC3
Series 2006-NC3
Rating
Class CUSIP To From
----- ----- -- ----
B4 81377CAN8 D CC
Securitized Asset Backed Receivables LLC Trust 2006-WM2
Series 2006-WM2
Rating
Class CUSIP To From
----- ----- -- ----
B-1 81376GAL4 D CC
Securitized Asset Backed Receivables LLC Trust 2006-WM3
Series 2006-WM3
Rating
Class CUSIP To From
----- ----- -- ----
B-2 81377EAK0 D CC
Securitized Asset Backed Receivables LLC Trust 2006-WM4
Series 2006-WM4
Rating
Class CUSIP To From
----- ----- -- ----
B-3 81377XAN2 D CC
Securitized Asset Backed Recievables LLC Trust 2005-FR1
Series 2005-FR1
Rating
Class CUSIP To From
----- ----- -- ----
B-4 81375WEA0 D CC
Soundview Home Loan Trust 2005-3
Series 2005-3
Rating
Class CUSIP To From
----- ----- -- ----
B-2 83611MFX1 D CC
Soundview Home Loan Trust 2005-DO1
Series 2005-DO1
Rating
Class CUSIP To From
----- ----- -- ----
B-2 83611MEK0 D CC
Soundview Home Loan Trust 2006-1
Series 2006-1
Rating
Class CUSIP To From
----- ----- -- ----
B 83611MLL0 D CCC
Soundview Home Loan Trust 2006-3
Series 2006-3
Rating
Class CUSIP To From
----- ----- -- ----
M-10 83612HAP3 D CC
Soundview Home Loan Trust 2006-NLC1
Series 2006-NLC1
Rating
Class CUSIP To From
----- ----- -- ----
M-9 83611DAN8 D CC
Soundview Home Loan Trust 2006-OPT4
Series 2006-OPT4
Rating
Class CUSIP To From
----- ----- -- ----
M-8 83611YAN2 D CCC
Structured Asset Investment Loan Trust 2004-11
Series 2004-11
Rating
Class CUSIP To From
----- ----- -- ----
B 86358EPK6 D CCC
Structured Asset Investment Loan Trust 2004-8
Series 2004-8
Rating
Class CUSIP To From
----- ----- -- ----
B2 86358EMK9 D CCC
Structured Asset Investment Loan Trust 2005-7
Series 2005-7
Rating
Class CUSIP To From
----- ----- -- ----
B1 86358EWM4 D CC
Structured Asset Investment Loan Trust 2005-HE2
Series 2005-HE2
Rating
Class CUSIP To From
----- ----- -- ----
M10 86358EVW3 D CC
Structured Asset Investment Loan Trust 2005-HE3
Series 2005-HE3
Rating
Class CUSIP To From
----- ----- -- ----
M11 86358EXK7 D CC
Structured Asset Investment Loan Trust 2006-2
Series 2006-2
Rating
Class CUSIP To From
----- ----- -- ----
M6 86358EF50 D CC
Structured Asset Investment Loan Trust 2006-BNC1
Series 2006-BNC1
Rating
Class CUSIP To From
----- ----- -- ----
M5 86358ED60 D CC
Wachovia Mortgage Loan Trust, LLC
Series 2005-WMC1
Rating
Class CUSIP To From
----- ----- -- ----
M-11 92977YBH3 D CC
Washington Mutual Asset-Backed Certificates WMABS Series 2006-HE2
Trust
Series 2006-HE2
Rating
Class CUSIP To From
----- ----- -- ----
B 93934JAQ7 D CC
RATING LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE
NovaStar Mortgage Funding Trust Series 2006-3
Series 2006-3
Rating
Class CUSIP To From
----- ----- -- ----
M-9 66988WAP1 D B/Watch Neg
* S&P Cuts 453 U.S. Subprime RMBS Ratings on Revised Assumptions
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 453
classes from 112 U.S. residential mortgage-backed securities
(RMBS) transactions backed by U.S. first-lien subprime mortgage
collateral rated between January 2006 and June 2007. Additionally,
S&P placed its ratings on 2,570 classes from 342 U.S. subprime
RMBS transactions on CreditWatch with negative implications.
Lastly, S&P affirmed its ratings on 1,914 classes from 239 U.S.
subprime RMBS transactions, and concurrently removed its ratings
on 76 classes from CreditWatch negative.
"The downgraded classes represent an original par amount of
approximately $8.2 billion, or approximately 1% of the par amount
of U.S. RMBS backed by first-lien subprime mortgage loans rated by
Standard & Poor's between January 2006 and June 2007. We have
taken previous rating actions on approximately $3.3 billion of the
total amount of affected securities. In addition, the classes with
ratings placed on CreditWatch represent an original par amount of
approximately $309 billion. Lastly, the classes with affirmed
ratings represent an original par amount of $164.3 billion of
subprime RMBS certificates issued from January 2006 to June 2007,"
S&P explains.
The rating actions reflect an increase in S&P's loss severity and
default assumptions, as outlined in "Standard & Poor's Revises
U.S. Subprime, Prime, And Alternative-A RMBS Loss Assumptions,"
published on July 30, 2008, as well as a significant increase in
delinquencies and defaults.
"We recently raised our loss severity assumptions for 2006 and
first-half of 2007 transactions to 50% from 45%. The revised
assumptions are based on our belief that continued foreclosures,
distressed sales, higher carrying costs for properties in
inventory, costs associated with foreclosures, and further
declines in home sales will likely depress prices further and push
loss severities higher than we had previously assumed," S&P says.
"There has been a persistent rise in the level of delinquencies
among the subprime mortgage loans supporting these transactions.
As of the July 2008 distribution, severely delinquent loans (90-
plus days, foreclosures, and REOs) accounted for approximately
30.27% of the 2006 transactions and approximately 22.82% of the
transactions from the first half of 2007. Based on the delinquency
trends, loan-level risk characteristics, and continuing
deterioration in the macroeconomic outlook, we have increased our
lifetime loss projections to 23% from 19% for transactions issued
in 2006 and to 27% from 23% for transactions issued in the first
half of 2007.
"The downgrades affected approximately 25% of the transactions
rated between January 2006 and June 2007, while the CreditWatch
placements affected approximately 55% of the transactions rated
during the same period of time. The downgrades affected
certificates that were originally rated 'AA+' or lower, while the
CreditWatch placements affected transactions that had at least one
'AAA' class affected. Since 'AAA' certificates can have different
payment priorities, Standard & Poor's evaluates the
creditworthiness of each class under three constant prepayment
rate (CPR) scenarios. Because the analysis focuses on each
individual class with varying maturities, prepayment scenarios may
cause an individual class to prepay in full before it incurs the
entire loss projection. Since we believe it is unlikely that
subordinate certificates will prepay in full before the entire
loss projection is realized, we took negative rating actions at
this time. Beginning [August 22] and continuing throughout the
next few weeks, Standard & Poor's will be simulating CPR scenarios
to assess the creditworthiness of each class with a rating that we
placed on CreditWatch. As a result of poor collateral performance
and the revision in our projected losses, it is possible that we
may lower many of the ratings that we placed on CreditWatch."
* Experts See Second Bankruptcies for Auto Parts Makers
-------------------------------------------------------
Reuters reports that bankruptcy and restructuring specialists
predict that weak global economy and U.S. auto sales decline could
force U.S. auto parts makers that have already restructured to a
new wave of bankruptcies.
"Those companies that are not nimble enough to react to the
dramatic overall volume change and consumer demand shift are the
ones more susceptible to filing a second time," said Randall
Eisenberg, senior managing director for restructuring advisor FTI
Consulting, according to the report.
The factors that could drive these automakers back to bankruptcy
are increased gasoline prices that reduced demand for SUVs and
trucks; soaring commodity costs that is eating into profit
margins; and the shift by U.S. consumers to smaller, more fuel-
efficient cars.
Those that are likely to survive are companies that significantly
cut their debt in a Chapter 11 restructuring.
According to the report, Roger Frankel, chair of the bankruptcy
group at law firm Orrick, Herrington and Sutcliffe LLP, said that
"anyone that's got a junk-bond rating and is in that industry ...
is going to be a candidate for a filing because that rating would
indicate that they have a lot of debt on their balance sheet and
indicate that they're in a challenging industry."
According to the report, companies that have already filed for
Chapter 11 could have trouble emerging, restructuring experts say.
* Record High Bankruptcies Seen as Filings Continue to Increase
---------------------------------------------------------------
An article in BankruptcyLaw 360 states a continued increase in the
number of Chapter 11 filings in July puts 2008 on track to set
record highs since the Bankruptcy Abuse Prevention and Consumer
Protection Act first became law in October 2005.
* Duanne Morris Slimming Down; To Cut Nonlawyer Jobs
----------------------------------------------------
Duane Morris LLP has cut 15 more nonlawyer jobs. The announcement
came days after the firm said it restructured its marketing and
business development team, hiring three new people while laying
off seven others.
Duane Morris LLP, a full-service law firm of more than 650
attorneys, offers innovative solutions across diverse industries
in the United States and internationally to address the legal and
business challenges of today's evolving global markets.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
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/
Aug. 27-28, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA 4th Annual Northeast Regional Conference
Gideon Putnam Resort & Spa, Saratoga Springs, New York
Contact: www.turnaround.org
Aug. 28, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Arizona Chapter Mixer
TBD, Phoenix, Arizona
Contact: 623-581-3597 or www.turnaround.org
Sept. 10, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
Marriott, Bridgewater, New Jersey
Contact: 908-575-7333 or www.turnaround.org
Sept. 10, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Dallas / Fort Worth Restructuring Workshop
Belo Mansion Dallas, Texas
Contact: www.turnaround.org
Sept. 11, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Lenders Forum
TBD, Long Island, New York
Contact: www.turnaround.org
Sept. 11-12, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Mid-America Regional Conference
Oak Brook Hills Marriott Resort, Oak Brook, Illinois
Contact: www.turnaround.org
Sept. 11-14, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Cross Border Conference
Grand Okanagan Resort, Kelowna, British Columbia
Contact: www.turnaround.org
Sept. 12, 2008
AMERICAN BANKRUPTCY INSTITUTE
ABI/GULC Views from the Bench
Georgetown University Law Center, Washington, DC
Contact: 1-703-739-0800; http://www.abiworld.org/
Sept. 16-18, 2008
ASSOCIATION OF INSOLVENCY &RESTRUCTURING ADVISORS
2nd Annual Restructuring & Investing Conference
Shanghai, China
Contact: http://www.airacira.org/
Sept. 17, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Real Estate / Condo Restructuring Panel
Marriott North, Fort Lauderdale, Florida
Contact: www.turnaround.org/
Sept. 18, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Joint Event - CFA/IWIRC/RMA/NJTMA/NYIC
Maplewood Country Club, Maplewood, New Jersey
Contact: 908-575-7333 or www.turnaround.org
Sept. 18, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Chapter Lunch Program
Nashville City Center, Nashville, Tennessee
Contact: 615-850-8678 or www.turnaround.org
Sept. 18, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Healthcare Industry Update - Panel Discussion
Summit Club, Birmingham, Alabama
Contact: www.turnaround.org
Sept. 18, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Effective Turnarounds: A View From US Trustees
TBA, Syracuse, New York
Contact: www.turnaround.org
Sept. 18-19, 2008
AMERICAN CONFERENCE INSTITUTE
Advanced Insolvency Law and Practice Conference
Paris, France
Contact: www.americanconference.com
Sept. 24, 2008
TURNAROUND MANAGEMENT ASSOCIATION
13 Week Cash Flow Workshop: An Overview
McCormick & Schmick's, Las Vegas, Nevada
Contact: www.turnaround.org
Sept. 24-25, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Florida Annual Golf Tournament
Champions Gate Golf Club, Orlando, Florida
Contact: 561-882-1331 or 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. 25, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Case Study with Tom Kim, TMA Small Business of the Year
Turnaround Award - TMA Arizona Chapter Meeting
TBD, Phoenix, Arizona
Contact: www.turnaround.org
Sept. 26, 2008
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Marriott Desert Ridge, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
Sept. 30, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Private Equity Panel
Centre Club, Tampa, Florida
Contact: www.turnaround.org/
Oct. 3, 2008
AMERICAN BANKRUPTCY INSTITUTE
ABI/UMKC Midwestern Bankruptcy Institute
H. Roe Bartle Hall Convention Center, Kansas City
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 9, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Luncheon - Chapter 11
University Club, Jacksonville, Florida
Contact: http://www.turnaround.org/
Oct. 13, 2008
AMERICAN BANKRUPTCY INSTITUTE
Consumer Bankruptcy Conference
Standard Club, Chicago, Illinois
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 14, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Annual Charity Golf Event
Forest Park Golf Course, St. Louis, Missouri
Contact: www.turnaround.org
Oct. 16, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Billiards Networking Night
Herbert's Billiards, Secaucus, New Jersey
Contact: 908-575-7333 or www.turnaround.org
Oct. 16, 2008
TURNAROUND MANAGEMENT ASSOCIATION
LI-TMA Member Social
Davenport Press, Mineola, New York
Contact: 631-251-6296 or www.turnaround.org
Oct. 16, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
TBD, Calgary, Alberta
Contact: 503-768-4299 or www.turnaround.org
Oct. 16, 2008
TURNAROUND MANAGEMENT ASSOCIATION
View from the Bench - Bankruptcy Update
Summit Club, Birmingham, Alabama
Contact: www.turnaround.org
Oct. 16, 2008
TURNAROUND MANAGEMENT ASSOCIATION
How to Contract with a Turnaround Manager
University Club, Portland, Oregon
Contact: www.turnaround.org
Oct. 22, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Turnaround Nevada Award Night
McCormick & Schmick's, Las Vegas, Nevada
Contact: www.turnaround.org
Oct. 23, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Arizona Chapter Meeting - Election Oriented
TBD, Phoenix, Arizona
Contact: www.turnaround.org
Oct. 23, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Effective Turnarounds: A Panel of Professionals
TBA, Rochester, New York
Contact: www.turnaround.org
Oct. 23-24, 2008
AMERICAN CONFERENCE INSTITUTE
Distressed Assets Boot Camp
TBD, London, United Kingdom
Contact: www.americanconference.com
Oct. 28, 2008
TURNAROUND MANAGEMENT ASSOCIATION
State of the Capital Markets
Citrus Club, Orlando, Florida
Contact: 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. 29-30, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Corporate Governance Meetings
Marriott, New Orleans, Louisiana
Contact: www.turnaround.org
Oct. 30 & 31, 2008
BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES
Physicians Agreements and Ventures
Contact: 800-726-2524; 903-595-3800;
www.renaissanceamerican.com
Oct. 31, 2008
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
Hilton, Frankfurt, Germany
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. 6, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
Coach House Diner & Restaurant, Hackensack, New Jersey
Contact: 908-575-7333 or www.turnaround.org
Nov. 11, 2008
AMERICAN BANKRUPTCY INSTITUTE
Detroit Consumer Bankruptcy Conference
Marriott, Troy, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. 13, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Turnaround Case Study
Summit Club, Birmingham, Alabama
Contact: www.turnaround.org
Nov. 13, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Effective Turnarounds:A View From Workout Consultants
TBA, Buffalo, New York
Contact: www.turnaround.org
Nov. 13, 2008
TURNAROUND MANAGEMENT ASSOCIATION
LI-TMA Social
TBD, Melville, New York
Contact: 631-251-6296 or www.turnaround.org
Nov. 13, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Dinner Meeting
TBD, Calgary, Alberta
Contact: 503-768-4299 or www.turnaround.org
Nov. 19, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Special Program
Tournament Players Club at Jasna Polana, New Jersey
Contact: 908-575-7333 or www.turnaround.org
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/
Nov. 20, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Senior Housing & Long Term Care
Washington Athletic Club,Seattle, Washington
Contact: www.turnaround.org
Nov. 27, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Arizona Chapter Meeting - Chris Kaup
TBD, Phoenix, Arizona
Contact: www.turnaround.org
Dec. 3, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Holiday Party
McCormick & Schmick's, Las Vegas, Nevada
Contact: 702-952-2480 or www.turnaround.org
Dec. 3, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Christmas Function
Terminal City Club, Vancouver, British Columbia
Contact: 503-768-4299 or 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/
Dec. 8, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Holiday Gathering
TBD, Long Island, New York
Contact: 631-251-6296 or www.turnaround.org
Dec. 9, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Holiday MIxer
Washington Athletic Club, Seattle, Washington
Contact: 503-768-4299 or www.turnaround.org
Dec. 11, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Holiday MIxer
University Club, Portland, Oregon
Contact: 503-768-4299 or www.turnaround.org
Dec. 18, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Holiday MIxer
TBD, Phoenix, Arizona
Contact: 623-581-3597 or www.turnaround.org
Dec. 31, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Sponsorships - Annual Golf Outing, Various Events
TBA, New Jersey
Contact: 908-575-7333 or www.turnaround.org
Jan. 21-22, 2009
TURNAROUND MANAGEMENT ASSOCIATION
Corporate Governance Meetings
Bellagio, Las Vegas, Nevada
Contact: www.turnaround.org
Jan. 22-23, 2009
TURNAROUND MANAGEMENT ASSOCIATION
Distressed Investing Conference
Bellagio, Las Vegas, Nevada
Contact: www.turnaround.org
Jan. 22-23, 2009
AMERICAN BANKRUPTCY INSTITUTE
Rocky Mountain Bankruptcy Conference
Westin Tabor Center, Denver, Colorado
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 5-7, 2009
AMERICAN BANKRUPTCY INSTITUTE
Caribbean Insolvency Symposium
Westin Casurina, Grand Cayman Island, AL
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 25-27, 2009
AMERICAN BANKRUPTCY INSTITUTE
Valcon
Four Seasons, Las Vegas, Nevada
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 13, 2009
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Battleground West
Beverly Wilshire, Beverly Hills, California
Contact: 1-703-739-0800; http://www.abiworld.org/
Apr. 17-18, 2009
NATIONAL ASSOCIATION OFBANKRUPTCY TRUSTEES
NABT Spring Seminar
The Peabody, Orlando, Florida
Contact: http://www.nabt.com/
Apr. 20, 2009
AMERICAN BANKRUPTCY INSTITUTE
Consumer Bankruptcy Conference
John Adams Courthouse, Boston, Massachusetts
Contact: 1-703-739-0800; http://www.abiworld.org/
Apr. 27-28, 2009
TURNAROUND MANAGEMENT ASSOCIATION
Corporate Governance Meetings
Intercontinental Hotel, Chicago, Illinois
Contact: www.turnaround.org
Apr. 28-30, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Intercontinental Hotel, Chicago, Illinois
Contact: www.turnaround.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/
May 14-16, 2009
ALI-ABA
Chapter 11 Business Reorganizations
Langham Hotel, Boston, Massachusetts
Contact: http://www.ali-aba.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/
Apr. 15-18, 2010
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 17-20, 2010
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
July 7-10, 2010
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Ocean Edge Resort, Brewster, Massachusetts
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 5-7, 2010
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Maryland
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/
Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.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;
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BEARD AUDIO CONFERENCES
Calpine's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
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BEARD AUDIO CONFERENCES
Carve-Out Agreements for Unsecured Creditors
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BEARD AUDIO CONFERENCES
Changes to Cross-Border Insolvencies
Audio Conference Recording
Contact: 240-629-3300;
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BEARD AUDIO CONFERENCES
Changing Roles & Responsibilities of Creditors' Committees
Audio Conference Recording
Contact: 240-629-3300;
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BEARD AUDIO CONFERENCES
Chinas New Enterprise Bankruptcy Law
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BEARD AUDIO CONFERENCES
Clash of the Titans -- Bankruptcy vs. IP Rights
Audio Conference Recording
Contact: 240-629-3300;
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Coming Changes in Small Business Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
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BEARD AUDIO CONFERENCES
Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer
for Navigating the Restructuring Process
Audio Conference Recording
Contact: 240-629-3300;
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BEARD AUDIO CONFERENCES
Dana's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
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BEARD AUDIO CONFERENCES
Deepening Insolvency Widening Controversy: Current Risks,
Latest Decisions
Audio Conference Recording
Contact: 240-629-3300;
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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;
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BEARD AUDIO CONFERENCES
Distressed Market Opportunities
Audio Conference Recording
Contact: 240-629-3300;
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BEARD AUDIO CONFERENCES
Distressed Real Estate under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
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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;
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BEARD AUDIO CONFERENCES
Examining the Examiners: Pros and Cons of Using
Examiners in Chapter 11 Proceedings
Audio Conference Recording
Contact: 240-629-3300;
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BEARD AUDIO CONFERENCES
Fundamentals of Corporate Bankruptcy and Restructuring
Audio Conference Recording
Contact: 240-629-3300;
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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
Renaissance American Management and Beard Conferences presents
Oct. 30-31, 2008
Physician Agreements & Ventures
The Millennium Knickerbocker Hotel - Chicago
Brochure will be available soon!
Nov. 17-18, 2008
Distressed Investing
The Helmsley Park Lane - New York
Brochure will be available soon!
* * *
Beard Audio Conferences presents
Bankruptcy and Restructuring Audio Conference CDs
More information and list of available titles at:
http://beardaudioconferences.com/bin/topics?category_id=BAR
* * *
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. Sheryl Joy P. Olano, 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, 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 ***