/raid1/www/Hosts/bankrupt/TCR_Public/040909.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, September 9, 2004, Vol. 8, No. 193
Headlines
360NETWORKS: J. Fletcher Fights Committee's Preference Lawsuit
AFTON FOOD: Will Delay Financials Until CCAA Restructuring Is Over
AIR CANADA: Wants Old Property Registrations Discharged
AIR CANADA: Jetsgo President Wants Copies of Confidential Reports
AIR CANADA: Reports Record 83.2% System Load Factor in August
ALLEGHENY ENERGY: Utility Files Rate Petition in Pennsylvania
ANC RENTAL: Wants Court to Approve Aon Risk Settlement Agreement
APPLE COUNTRY INC: Case Summary & 20 Largest Unsecured Creditors
BIODELIVERY SCIENCES: Nasdaq Delisting Hearing Happens Today
BIOVAIL CORP: Narrows Revenue & Earnings Guidance for the Year
BO BO INC: Case Summary & 20 Largest Unsecured Creditors
CATHAY ENTERPRISES: Case Summary & 19 Largest Unsecured Creditors
CATHOLIC CHURCH: Judge Perris Amends AICCO Premium Financing Pact
CDK SERVICES: Breaches Bank Loan's Financial Covenants
CHASE COMM'L: Moody's Junks One Class & Gives Low-B Ratings to Two
CIRTRAN CORP: Wins Wheel Chair Lift Manufacturing Contract
COMM 2001-FL4: Moody's Reviewing Low-B Ratings & May Downgrade
COMMERCE ONE: Grants New Stock Options to Non-Officer Employees
COEUR D'ALENE: Continues to Pursue Offer to Purchase Wheaton
CPT HOLDINGS: Hires Klett Rooney as Special Litigation Counsel
CRDENTIA CORP: Acquires Texas-Based Care Pros Staffing, Inc.
CRDENTIA CORP: Closes Arizona Home & Healthcare Acquisition
DAVEL COMMS: Creditors Ink $118MM Acquisition Pact with MobilePro
DEAN FOODS: Comments on Market Environment & Revises Fin'l Outlook
DELTA AIR: Carrier Outlines Plan to Save $5 Billion Over 3 Years
DENNY'S CORP: Extends 11-1/4% Senior Debt Tender Offer to Oct. 4
DENNY'S CORP: Extends 12-3/4% Senior Debt Tender Offer to Oct. 4
DSTAR SUN PLAZA HOLDINGS, INC: Voluntary Chapter 11 Case Summary
EARTHMOVERS INC: Case Summary & 20 Largest Unsecured Creditors
ECKERD COLLEGE: Fitch Reviewing Financial Effect of Hurricane
EDUCATIONAL DEV'T: Case Summary & 9 Largest Unsecured Creditors
ENRON: Institutional Investors Sue Citigroup for Bank Fraud
ENTERPRISE PRODS: Extends Gulfterra Tender Offers to Sept. 17
FEDERAL-MOGUL: Committee Wants to Fix Asbestos PI Claims Bar Date
FOSTER WHEELER: Subsidiary Wins Russian Engineering Services Pact
FRANK'S NURSERY: Files Chapter 22 Petition in S.D. New York
FRANK'S NURSERY: Case Summary & 20 Largest Unsecured Creditors
FREMONT INVESTMENT: Moody's Places Ba2 Rating on Class B Certs.
FRIEDMAN'S INC: Completes Restructuring of Sr. Secured Bank Loan
GRUPO TMM: Gets S&P's Junk Credit Rating After Debt Restructuring
HANGER ORTHOPEDIC: Loan Amendment Resolves Covenant Violations
HEALTHSOUTH CORP: Names John Workman Chief Financial Officer
HORIZON PCS: June 30 Balance Sheet Upside-Down by $579 Million
INTEGRATED ELECTRICAL: Gets Default Notice for $62.9 Million Debt
INTEGRATED ELECT'L: S&P Ratings on Watch Neg. After Bond Default
INTEGRATED HEALTH: Pickett & Booth Assert Administrative Claims
JERSEY STREET METAL: Case Summary & Largest Unsecured Creditors
JONATHON KYLE MILLER INC: Voluntary Chapter 11 Case Summary
KAISER: Wants Court to Approve Mulberry Site Assumption Pact
KMART: Court Nixes $327 Million of Lease Rejection Damage Claims
METRO MASONRY: Files Chapter 11 Plan of Reorganization in Texas
NATIONAL CENTURY: Mark Aprahamian Presses to Close Lincoln Sale
NKA ASSOCIATES LTD.: Voluntary Chapter 11 Case Summary
NORTEL NETWORKS: Joins WiMAX Forum & Lends Skill on OFDM & MIMO
NORTHERN CONSTRUCTION: Voluntary Chapter 11 Case Summary
ORIGEN: Moody's Hammers 3 Securitization Classes to Junk Levels
OWENS CORNING: Asks Court to Approve CDC Corp. & Wall Tech Merger
PARK PLACE: Fitch Rates $36 Mil. Privately Offered Class BB+
PARKRIDGE PHASE: Voluntary Chapter 11 Case Summary
PG&E NAT'L: Asks Court to Stay Southaven, et al., Claim Objections
PNC MORTGAGE: S&P Junks One Class & Gives Low-B Ratings to Five
PREMIER FARMS: Files Chapter 11 Plan of Reorganization in Iowa
QUIGLEY CO: Nominates Al Togut as Future Claimants' Representative
QUIGLEY COMPANY: Wants Ordinary Course Professionals to Continue
QWEST COMMS: Expands Wireless Services to Three New Mexico Cities
QUESTERRE ENERGY: Will Distribute Options After CCAA Emergence
REPERFORMING LOAN: Moody's Puts Low-B Ratings on Classes B-3 & B-4
REPURCHASES CORP: Case Summary & 4 Largest Unsecured Creditors
RIVERSIDE FOREST: Postpones Separation Time Under Rights Plan
SOLUTIA: Court Lets Retiree Comm. Hire American Express as Advisor
SOUTHEASTERN HOLDINGS: Voluntary Chapter 11 Case Summary
SPIEGEL INC: Court Allows SPCP Group's Claim for $361,877
STELCO INC: Stelware Sale Hearing Rescheduled to Sept. 24
VIAD CORP: GES Exposition Prepares to Handle Clients Amidst Strike
W.R. GRACE: Holds Allowed $21,723,767 Claim Against KWELMBS
WAMU MORTGAGE: Moody's Assigns Low-B Ratings to Four Cert. Classes
WEDDINGSTORE, INC.: Stores Close & Leave Brides Dressless
WIRELESS INFOTECH: Voluntary Chapter 7 Case Summary
WORLDCOM INC: Cuts Workforce by 12,000 in First Half of 2004
* Alvarez & Marsals Names J. Vanderveen Chicago's Managing Dir.
* Chadbourne & Parke Names Schumacher as Houston Managing Partner
* Singer Lewak Wins 80th Largest Accounting Firm Award by IPA
*********
360NETWORKS: J. Fletcher Fights Committee's Preference Lawsuit
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in
360networks Inc. chapter 11 cases, on the Debtors' behalf, seeks:
(a) the avoidance, recovery and turnover of preferential
transfers totaling at least $488,753 that the Debtors
made to J. Fletcher Creamer & Son, Inc., on or within
90 days before the Petition Date; and
(b) in the alternative, the avoidance, recovery and turnover
of fraudulent transfers totaling at least $488,753 that
the Debtors made to J. Fletcher during the one-year
period prior to the Petition Date.
According to Norman N. Kinel, Esq., at Sidley Austin Brown
& Wood, LLP, in New York, on March 26, 2002, the Debtors demanded
J. Fletcher to return the Transfers. But J. Fletcher refused.
J. Fletcher Creamer & Son, Inc., Responds
J. Fletcher contends that the Creditors Committee will not be
able to prove one or more of the elements of Section 547(b) of
the Bankruptcy Code.
Elana C. Bloom, Esq., at Okin, Hollander & DeLuca, LLP, in Fort
Lee, New Jersey, explains that the Payments are not voidable
because:
* they were contemporaneous exchanges for new value within the
meaning of Section 547(c)(1);
* they were made in the Debtors' ordinary course of business
or financial affairs;
* Fletcher gave new value to or for the benefit of the
Debtors;
* Fletcher has a lien on or may retain any interest
transferred since it took for value and in good faith, and
gave value to the Debtors in exchange for the Payments;
* the Committee failed to assert any claims for which relief
can be granted;
* the Claims are barred by the applicable statute of
limitations;
* the Committee lacks standing to assert some or all of the
claims set forth in the Complaint; and
* the Committee is barred by the doctrines of equitable
estoppel for asserting the claims.
Thus, Fletcher asks Judge Gropper to deny the Committee's request
and dismiss the Complaint with prejudice.
Headquartered in Vancouver, British Columbia, 360networks, Inc. --
http://www.360.net/-- is a leading independent provider of fiber
optic communications network products and services worldwide. The
Company filed for chapter 11 protection on June 28, 2001 (Bankr.
S.D.N.Y. Case No. 01-13721), obtained confirmation of a plan on
October 1, 2002, and emerged from chapter 11 on November 12, 2002.
Alan J. Lipkin, Esq., and Shelley C. Chapman, Esq., at Willkie
Farr & Gallagher, represent the Company before the Bankruptcy
Court. When the Debtors filed for protection from its creditors,
they listed $6,326,000,000 in assets and $3,597,000,000 in
liabilities. (360 Bankruptcy News, Issue No. 75; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
AFTON FOOD: Will Delay Financials Until CCAA Restructuring Is Over
-----------------------------------------------------------------
On July 16, Afton Food Group Ltd. (TSX VENTURE:AFF) was granted
protection under the Companies' Creditors Arrangement Act
(Canada). The Court subsequently approved the extension of the
Company's restructuring under CCAA to October 13, 2004. During
this time, the Company will continue its efforts to strengthen the
franchise system and reduce operating costs. In addition, the
Court approved the engagement of a merchant banking firm to assist
with the selection of investors that are able to aid in the
recapitalization of the Company's balance sheet or the marketing
of the business for sale.
In compliance with Ontario Securities Commission Policy 57-603,
the Company submitted to the Ontario Securities Commission a
notice that it is in default of the financial statement filing
requirement for the period ended June 30, 2004.
Past financial statements of the Company have been based on
generally accepted accounting principles on a going concern basis,
which contemplates the realization of assets and the discharge of
liabilities in the normal course of business for the foreseeable
future. The Company's audited financial statements and Management
Discussion and Analysis for the periods ended December 31, 2003
and 2002 identified concerns with respect to the going concern
assumption and the Company's ability to operate as a going
concern. Financial statements based on generally accepted
accounting principles prepared on a going concern basis, while the
Company is proceeding under CCAA restructuring, may result in
misleading information being provided to shareholders and other
interested readers.
The Company expects to issue financial statements at the
conclusion of the CCAA restructuring process. In the interim, the
Company intends to satisfy the requirement to file "Default Status
Reports" until such time as the default filing requirement for the
issue of financial information has been corrected.
Afton, through its subsidiaries, is a franchisor in the Quick
Service Restaurant industry with locations throughout Canada
operating under two principal brands, 241 Pizza and Robin's
Donuts.
AIR CANADA: Wants Old Property Registrations Discharged
-------------------------------------------------------
Air Canada's four global restructuring agreements with General
Electric Capital Corporation and certain of its affiliates provide
for a $681,000,000 exit facility upon the Applicants' emergence
from bankruptcy.
The Exit Facility will be secured against substantially all of the
assets of the Applicants, ACE Aviation Holdings, Inc., and ACE's
other subsidiaries. Pursuant to the parties' term sheet, all of
the Applicants' obligations under any agreement with, or for the
benefit of, GE Capital, including the Exit Facility, are to be
secured by a first priority security interest on all of the
existing and after acquired property of the Applicants, other than
leased assets, assets financed by other parties, and certain other
excluded property.
Under the Exit Facility, GE Capital requires the Applicants to
represent and warrant that there are no registrations registered
against the Applicants, which do not relate to valid security
interest. In addition, as part of their cost reduction program,
the Applicants negotiated with their lessor and secured creditors
to reduce the number of jurisdictions in which the Applicants are
required to maintain security registrations. The Applicants are
attempting to "clean up" the personal property registers in each
of the Canadian provinces and territories, including the Registrar
of the Register of Personal and Movable Real Rights of the
Province of Quebec, and the District of Columbia by removing any
registration that is not properly registered there or that is no
longer required to be registered there.
The Applicants, through their counsel, Bennett Jones, LLP, and
Stikeman Elliott, LLP, conducted name searches of the personal
property registry of each Canadian province and territory,
including the RPMRR in Quebec, and the District of Columbia for
personal property security registrations against each of the
Applicants. The Applicants and their counsel determined whether
each registration was properly registered and should be
maintained. Each registration determined not to relate to a valid
security interest or which was deemed to be no longer required was
categorized into one of six categories:
(1) Underlying lease or financing paid out, terminated or
expired;
(2) Underlying lease or financing restructured and new filings
have been done with respect to the restructured lease or
financing in agreed jurisdictions;
(3) Air Canada is no longer required to maintain registrations
in this jurisdiction but security interest still valid and
perfected in other designated jurisdictions. Discharges
authorized by secured party;
(4) Air Canada is no longer required to maintain registrations
in this jurisdiction but security interest still valid and
perfected in other designated jurisdictions;
(5) Unable to verify status of underlying lease or financing
-- will require secured party to confirm that
registrations still needed upon being served with
materials; and
(6) Registration made in contravention with Initial CCAA
Order.
The determination of whether a particular registration was a
Dischargeable Registration was based on a review of the relevant
Applicant's obligation with respect to the collateral, the
collateral description set out in the registration and, in some
cases, information from the registrant itself. No determination
was made as to whether any action is required in the case of
registrations filed in favor of GE Canada Finance Holding Company
and General Electric Capital Canada, Inc.
On August 25, 2004, Bennett Jones sent a detailed letter to the
known registrant of each of the Dischargeable Registrations to
inform the registrant, among others, that the registration did not
relate to a valid security interest or was no longer required. In
effect, the letter seeks confirmation of the nature and status of
a registration from the registrant. The letter asks the
registrant to authorize and consent to the discharge of its
registration.
The Applicants seek the Ontario Superior Court of Justice's
authority to take actions and execute and file discharges,
financing change statements and other documents as necessary, on
the registrants' behalf. As the authorized signing authority, the
Applicants seek permission to discharge each of the Dischargeable
Registrations.
The Applicants ask the CCAA Court to direct the Registrar of the
RPMRR or the supervising body of each applicable registry to
accept the documents for filing and registration purposes.
The Applicants also ask the CCAA Court to find that effective as
at the Implementation Time of their Plan of Reorganization,
Compromise and Arrangement, the financing statements registered
with respect to the Dischargeable Registrations are null and void.
Black-lined copies of the lists of the Dischargeable
Registrations are available at no charge at:
http://bankrupt.com/misc/dischargeable_registrations_other_provinces.DOC
http://bankrupt.com/misc/dischargeable_registrations_Quebec_RPMRR.DOC
Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo. The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and filed a Section
304 petition in the U.S. Bankruptcy Court for the Southern
District of New York (Case No. 03-11971). Sean F. Dunphy, Esq.,
and Ashley John Taylor, Esq., at Stikeman Elliott LLP, in Toronto,
serve as Canadian Counsel to the carrier. Matthew A. Feldman,
Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher
serve as the Debtors' U.S. Counsel. When the Debtors filed for
protection from its creditors, they listed C$7,816,000,000 in
assets and C$9,704,000,000 in liabilities. (Air Canada Bankruptcy
News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
AIR CANADA: Jetsgo President Wants Copies of Confidential Reports
-----------------------------------------------------------------
In a letter to Air Canada President Robert Milton, Jetsgo
President and CEO Michel Leblanc requested the confidential
documents relating to Jetsgo found on either March 22, or April 5,
2004, by investigators retained by Air Canada at the residence of
WestJet executive Mark Hill. A copy of Mr. Leblanc's letter has
been provided to Clive Beddoe, President and CEO of WestJet.
The complete text of Mr. Leblanc's letter follows:
"I have been following with some interest the lawsuit
commenced by Air Canada against WestJet Airlines Ltd. arising out
of the much reported allegations of corporate espionage and the
unlawful appropriation and misuse of confidential information
belonging to Air Canada by Mark Hill and others at WestJet. We
understand that Air Canada alleges that WestJet surreptitiously
and illegally accessed Air Canada's confidential business
information for approximately one year.
"From the evidence filed with the Ontario Superior Court of
Justice, we understand that investigators retained by Air Canada
have recovered certain shredded documentation from the garbage and
recycling outside the residence of Mark Hill. We further
understand that upon the digital reconstruction of the shredded
documentation, Air Canada discovered documents relating to the
business of Jetsgo, including a document entitled, 'Jetsgo,
November 2003 Summary of domestic load L/F (Load Factors)'.
"As you know, details of Jetsgo's load factors are
confidential, highly sensitive and proprietary. In the
circumstances of the allegations made by Air Canada, the existence
of this document at the residence of Mark Hill is of significant
concern and highly disturbing. We understand that these documents
were not filed with the Court because of the confidential nature
of Jetsgo's information. In these circumstances, we ask that you
provide us with a copy of the reconstructed Jetsgo documents at
this time."
Mr. Leblanc's letter to Mr. Milton concluded, "We are all
competitors, but this appears to be a fundamental issue of fair
play. We hope we can secure your cooperation in this regard."
"I'm hopeful Mr. Milton will respond to our request in a
timely fashion as this apparent discovery of Jetsgo confidential
information in Mark Hill's possession is very disconcerting. We
need to understand how this happened and examination of the
reconstructed documents will help with that process," said
Leblanc.
As reported in the Troubled Company Reporter on August 13, 2004,
the CCAA Court granted Air Canada's request for injunction.
The Court requires WestJet to collect and preserve relevant
records, and prohibits the rival airline from misusing
confidential information.
WestJet CEO Apologizes
WestJet Airlines, Ltd., Chief Executive Officer Clive Beddoe
apologized for Mark Hill, the former WestJet executive who was
accused of corporate espionage, Dow Jones Newswires reports.
"Neither I nor the board condone this activity," Mr. Beddoe told a
Dow Jones reporter.
In a press release announcing WestJet's second quarter results,
Mr. Beddoe indicated that any material loss arising from Air
Canada's allegations is unlikely, and that any potential damages
suffered by Air Canada or potential benefits gained by WestJet
based on the allegations would not be material to WestJet.
Additional stories about Air Canada's disputes with WestJet
appeared in the Troubled Company Reporter on:
* August 10, 2004,
* August 3, 2004,
* July 30, 2004,
* July 26,2004,
* July 2, 2004,
* April 12, 2004, and
* April 8, 2004,
Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo. The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and filed a Section
304 petition in the U.S. Bankruptcy Court for the Southern
District of New York (Case No. 03-11971). Sean F. Dunphy, Esq.,
and Ashley John Taylor, Esq., at Stikeman Elliott LLP, in Toronto,
serve as Canadian Counsel to the carrier. Matthew A. Feldman,
Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher
serve as the Debtors' U.S. Counsel. When the Debtors filed for
protection from its creditors, they listed C$7,816,000,000 in
assets and C$9,704,000,000 in liabilities.
AIR CANADA: Reports Record 83.2% System Load Factor in August
-------------------------------------------------------------
Air Canada reported a system load factor of 83.2 percent in August
2004, the highest on record for any month ever. The mainline
carrier flew 9.8 percent more revenue passenger miles -- RPMs --
in August 2004 than in August 2003, according to preliminary
traffic figures.
Overall, capacity increased by 6.5 percent, resulting in a load
factor of 83.2 percent, compared to 80.6 percent in August 2003;
an increase of 2.6 percentage points. In the domestic market,
capacity decreased by 5.9 percent while traffic increased 0.2
percent resulting in a domestic load factor of 81.9 percent - a
5.0 percentage point increase year over year.
Jazz, Air Canada's regional airline subsidiary, flew 5.9 percent
more revenue passenger miles in August 2004 than in August 2003,
according to preliminary traffic figures. Capacity increased by
0.4 percent, resulting in a load factor of 66.8 percent, compared
to 63.3 percent in August 2003; an increase of 3.5 percentage
points.
"Our new business model and product strategy continues to produce
solid results, delivering an all time high monthly load factor of
83.2 percent in August while at the same time, improving domestic
and international yields," said Montie Brewer, Executive Vice
President, Commercial. "Domestic capacity remained tight in the
month and high transcontinental demand lifted our domestic load
factor to its best performance ever at 81.9 percent. Our strong
domestic performance reflects increasing customer confidence in
Air Canada as the airline of choice for the lowest fares to the
greatest number of destinations on an everyday basis."
Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo. The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and filed a Section
304 petition in the U.S. Bankruptcy Court for the Southern
District of New York (Case No. 03-11971). Sean F. Dunphy, Esq.,
and Ashley John Taylor, Esq., at Stikeman Elliott LLP, in Toronto,
serve as Canadian Counsel to the carrier. Matthew A. Feldman,
Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher
serve as the Debtors' U.S. Counsel. When the Debtors filed for
protection from its creditors, they listed C$7,816,000,000 in
assets and C$9,704,000,000 in liabilities.
ALLEGHENY ENERGY: Utility Files Rate Petition in Pennsylvania
-------------------------------------------------------------
Allegheny Power, the delivery unit of Allegheny Energy, Inc.
(NYSE:AYE), filed with the Pennsylvania Public Utility Commission
for approval to facilitate the recovery of stranded costs and
provide rate certainty for its more than 690,000 electric
customers in Pennsylvania through an extended transition to
competition. The Office of Consumer Advocate, the Office of Small
Business Advocate and The West Penn Power Industrial Intervenors
joined in the filing.
"We believe this extension of rate caps will provide customer rate
protection and a smooth transition to competitive market-based
rates," said Paul J. Evanson, Chairman and Chief Executive
Officer, Allegheny Energy, Inc. "Allegheny hasn't increased rates
in a decade, and our customer rates are among the lowest in
Pennsylvania."
Highlights of the filing include:
-- Extension of the distribution rate caps for an additional
two years through 2007 for all Pennsylvania retail
customers.
-- Extension of generation rate caps for an additional two
years through 2010, with additional generation rate
increases in 2007, 2009 and 2010. Allegheny's 1998
restructuring agreement previously provided for rate
increases in 2006 and 2008. Between the 1998 restructuring
agreement and the amended agreement proposed today, average
unit rates for residential customers will gradually increase
from 6.79 cents per kilowatt-hour (kWh) in 2005 to 7.13
cents per kWh in 2006, 7.49 cents per kWh in 2007, 7.86
cents per kWh in 2008, 8.81 cents per kWh in 2009 and 9.09
cents per kWh in 2010.
-- Securitization of approximately $115 million of stranded
costs.
The new customer rates would enable Allegheny Energy to realize
generation prices of approximately $30.10 per megawatt-hour for
2005, $32.80 per MWh for 2006, $35.50 per MWh for 2007, $38.30 per
MWh for 2008, $46.90 per MWh for 2009 and $50.80 per MWh for 2010
before moving to market prices. Under the current agreement,
generation prices are approximately $30.10 per MWh for 2005,
$32.80 per MWh for 2006 and 2007 and $35.40 per MWh for 2008
before moving to market prices.
Allegheny's request will go before an administrative law judge,
who will make a recommendation to the Commission for further
action.
Headquartered in Greensburg, Pennsylvania, Allegheny Energy is an
integrated energy company with a portfolio of businesses,
including Allegheny Energy Supply, which owns and operates
electric generating facilities, and Allegheny Power, which
delivers low-cost, reliable electric and natural gas service to
about four million people in Pennsylvania, West Virginia,
Maryland, Virginia and Ohio. More information about Allegheny
Energy is available at http://www.alleghenyenergy.com/
ANC RENTAL: Wants Court to Approve Aon Risk Settlement Agreement
----------------------------------------------------------------
Prior to the Petition Date, ANC Rental and its debtor-affiliates
self-insured against employee, workers compensation and certain
general liability claims. The Debtors created two entities --
Rental Liability Management, Inc., and Post Retirement Liability
Management, Inc. -- which assumed certain obligations and
administered certain claims arising in connection with the
Debtors' self-insurance program and provided certain retirement
and health benefits.
Also, prior to the Petition Date, Aon Risk Services, Inc., Aon
Risk Services of Mexico, Inc., Combined Specialty Insurance
Company, Virginia Surety Company, Inc., and their affiliates
assisted the Debtors in administering their self-insurance and
benefits programs. After the formation of the Liability
Management Companies, Aon purchased a minority equity interest in
each Liability Management Company. The Debtors retained the
remaining majority equity interest. The Liability Management
Companies are both debtors in these Chapter 11 proceedings.
On January 13, 2003, Aon filed Claim No. 6967 for $600,000, and
Claim No. 6968 for $350,000. The Aon Claims are based on alleged
breaches by the Debtors of a stock repurchase agreement.
On October 30, 2003, the Debtors commenced an adversary
proceeding seeking to avoid two transfers made to Aon in the 90
days prior to the Petition Date, each amounting $51,250.
The Debtors are currently in the process of winding down their
affairs and preparing to dissolve their remaining corporate
entities. To wind down and dissolve the Liability Management
Companies in the most efficient manner, the Debtors and
Liquidating Trustee want to resolve their pending disputes with
Aon by acquiring the Aon Interest.
Accordingly, the parties arduously negotiated a settlement
agreement to resolve all of the issues between them, including
the Aon Claims, the Aon Adversary Proceeding, and the Debtors'
acquisition of the Aon Interest.
By this motion, the Debtors ask the Court to approve their
Settlement Agreement with Aon Risk.
Joseph Grey, Esq., at Stevens & Lee, in Wilmington, Delaware,
reports that pursuant to the Settlement Agreement:
(a) Claim No. 6967 will be allowed for $600,000 and Claim
No. 6968 will be allowed for $350,000;
(b) The Aon Adversary Proceeding will be dismissed with
prejudice; and
(c) The Aon Interest will be transferred to the Debtors.
The Debtors have reviewed the Transfers and the Aon Adversary
Proceeding, and have concluded that the overreaching benefit to
the estates resulting from the Settlement Agreement will likely
far outweigh the benefit that the estates might otherwise hope to
realize from prosecution of the Aon Adversary Proceeding, taking
into account the time and expense of the litigation.
Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation,
is the world's third-largest publicly traded car rental company.
The Company filed for chapter 11 protection on November 13, 2001
(Bankr. Del. Case No. 01-11200). On April 15, 2004, Judge Walrath
confirmed the Debtors' 3rd amended Chapter 11 Liquidation Plan, in
accordance with Section 1129(a) and (b) of the Bankruptcy Code.
Upon confirmation, Blank Rome, LLP, and Fried, Frank, Harris,
Shriver & Jacobson, LLP, withdrew as the Debtors' counsel. Gazes &
Associates, LLP, and Stevens & Lee, PC, serve as substitute
counsel to represent the debtors' post-confirmation interests.
When the Company filed for protection from their creditors, they
listed $6,497,541,000 in assets and $5,953,612,000 in liabilities.
(ANC Rental Bankruptcy News, Issue No. 59; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
APPLE COUNTRY INC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Apple Country Inc.
P.O. Box 70
Wapato, Washington 98951
Bankruptcy Case No.: 04-06649
Chapter 11 Petition Date: September 3, 2004
Court: Eastern District of Washington (Spokane/Yakima)
Judge: John A. Rossmeissl
Debtor's Counsel: Donald D. Hackney, Esq.
Hackney & Carroll
120 North Wall, Suite 500
Spokane, WA 99201
Tel: 509-624-8200
Estimated Assets: Unstated
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
WA ST Employ. Sec. Dept. Taxes $76,191
Internal Revenue Service Taxes $73,332
American Express Loan $53,008
Weyerhauser Co. Trade debt $32,281
WA ST Dept. Labor & Indus. Taxes $29,285
H.R. Spinners Trade debt $21,992
Fruit Packers Supply Trade debt $20,557
MBNA America Credit card $18,784
Michelsen Packaging Co. Trade debt $18,251
Bank of America Credit card $17,890
Menke Jackson Trade debt $13,486
Amerifresh Trade debt $13,000
Velikanje Moore & Shore Trade debt $8,645
Wells Fargo Trade debt $6,600
Northwest Liquid Fertilizers Trade debt $4,390
Yakima Implement & Trade debt $4,281
Irrigation
Chandler Distributing Co. Trade debt $3,500
Amerigas/Pencro Assoc. Trade debt $3,347
Wind Machine Sales Trade debt $3,236
Duckwall-Pooley Fruit Co. Trade debt $2,844
BIODELIVERY SCIENCES: Nasdaq Delisting Hearing Happens Today
------------------------------------------------------------
BioDelivery Sciences International, Inc. (Nasdaq:BDSI)
(Nasdaq:BDSIW) received a formal notice of hearing and hearing
memorandum as well as notices of additional listing deficiencies
to be addressed in connection with the Company's upcoming
delisting hearing before a Nasdaq panel on Thursday, September 9,
2004.
As previously announced, Nasdaq has initiated procedures, subject
to the Hearing, regarding the continued listing of the Company's
common stock on the Nasdaq SmallCap Market for failure to meet the
stockholders' equity, market value of listed securities, or net
income from continuing operations requirement as set forth in
Marketplace Rule 4310(c)(2)(B). The Company believes that it is
most likely to comply with this rule by achieving and maintaining
a $2.5 million level of stockholders' equity. Additionally, in its
more recent notices, Nasdaq has alleged deficiencies under Nasdaq
Marketplace Rules 4350(i)(1)(C)(ii), 4350(h), Rule 4310(c)(17)(D)
and 4330(c).
Dr. Frank O'Donnell, Chairman, President and CEO of the Company,
stated "We are prepared to address all points raised by the Nasdaq
staff at the upcoming hearing on September 9th. We believe that
BDSI has undertaken several transactions (most notably the
acquisition of Arius Pharmaceuticals, Inc. and the equity line
agreement with Hopkins Capital) to directly address BDSI's ability
to maintain stockholders' equity at the required $2.5 million
level."
Dr. O'Donnell added, "We want our stockholders and the public
markets to know that BDSI has undertaken in good faith to meet all
Nasdaq listing requirements and that BDSI is committed to fully
and properly satisfying all Nasdaq and other regulatory
requirements and responsibilities, regardless of the ultimate
conclusions reached by the Nasdaq panel." Dr. O'Donnell further
added, "We also want to take this opportunity to inform our
stockholders and the markets that it is our understanding that the
hearing panel may not render a final decision at the September 9th
hearing and that therefore an immediate determination of BDSI's
listing on the Nasdaq SmallCap Market may not occur this Thursday.
We intend to keep our stockholders and the markets updated as
information becomes available."
BioDelivery Sciences International, Inc. is a biotechnology
company that is developing and seeking to commercialize patented
and licensed delivery technologies for pharmaceuticals, vaccines,
over-the-counter drugs, nutraceuticals and micronutrients. The
company's technologies include: (i) the patented Bioral(TM)
nanocochleate technology, designed for a potentially broad base of
applications, and (ii) the patented BEMA(TM) (buccal or mouth)
drug delivery technology being developed by the company's Arius
Pharmaceuticals subsidiary with a focus on "acute" treatment
opportunities for surgical and oncology patients.
About BioDelivery Sciences
BioDelivery Sciences International, Inc. is a biotechnology
company that is developing and seeking to commercialize patented
and licensed delivery technologies for pharmaceuticals, vaccines,
over-the-counter drugs, nutraceuticals and micronutrients. The
company's technologies include: (i) the patented Bioral(TM)
nanocochleate technology, designed for a potentially broad base of
applications, and (ii) the patented BEMA(TM) (buccal or mouth)
drug delivery technology being developed by the company's Arius
Pharmaceuticals subsidiary with a focus on "acute" treatment
opportunities for surgical and oncology patients.
* * *
As reported in the Troubled Company Reporter on August 26, 2004,
BioDelivery Sciences International has terminated the previously
announced Facility Credit Agreement, dated August 2, 2004, for up
to $4 million with the Hopkins Capital Group II, LLC, an
affiliated entity of BDSI, which is controlled and partially-owned
by Dr. Francis E. O'Donnell, Jr., BDSI's Chairman and CEO, and has
entered into a binding, enforceable letter of intent with HCG for
an Equity Line of Credit Agreement to replace the Facility.
Pursuant to the Equity Line Agreement, HCG agreed, as requested by
BDSI, to invest up to $4,000,000 in BDSI from August 23, 2004
through March 31, 2006 in consideration of shares of a newly
created class of Series B Convertible Preferred Stock of BDSI. The
holders of the Series B Preferred are entitled to receive a 4.5%
annual cumulative dividend. In addition, the Series B Preferred
is convertible at any time as of or after April 1, 2006, at a
price equal to $4.25. The Series B Preferred ranks senior to
shares of BDSI's common stock and BDSI's Series A Non-Voting
Convertible Preferred Stock, carries registration rights, dividend
and liquidation preferences and certain other privileges. The
Series B Preferred cannot be redeemed at the election of HCG, but
BDSI has the right, in its discretion at any time, to redeem the
shares of Series B Preferred stock for cash equal to the face
value of the amount invested under the Equity Line Agreement plus
accrued dividends.
BIOVAIL CORP: Narrows Revenue & Earnings Guidance for the Year
--------------------------------------------------------------
Biovail Corporation (NYSE:BVF)(TSX:BVF) reported updated revenue
and earnings guidance for 2004 following a comprehensive review of
the Company's operations and projections. As a result of this
review, Biovail is narrowing its revenue guidance from
$800 million to $940 million to $820 million to $920 million and
confirming its previous diluted earnings per share -- EPS --
guidance of $1.35 to $1.60, excluding certain items.
Biovail's updated product sales revenue guidance is based on a
number of variables, including current prescription and business
trends, as well as the buying patterns of wholesaler and
distribution partners. Biovail's 2004 product sales guidance
assumes wholesaler inventory levels will be at a range of one to
two months, unless temporarily impacted by wholesaler buying
patterns due to price increases or seasonality. Wellbutrin XL,
Biovail's once-daily bupropion formulation, which is sold under
license by GlaxoSmithKline -- GSK -- in the United States,
continues to trend materially above the Company's previous
guidance, while the Company's Promoted products are tracking below
previous guidance. Legacy products updated guidance reflects the
recent termination of the Cedax distribution agreement, while the
Company's updated Generic product revenue guidance considers
current product trending and further improvement in this business.
Gross margins are expected to increase through the second-half of
2004 primarily due to product mix and the favorable impact of
higher Wellbutrin XL pricing, among other items. Biovail's
guidance for 2004 gross margins on product sales is 74% to 76%.
Research-and-development expenses in the second-half of 2004 are
expected to increase relative to first-half levels, and be in the
range of $70 million to $85 million. The anticipated increase in
spending reflects an increase in clinical activity, including the
initiation of Phase III development for Acyclovir CR. Biovail's
product pipeline currently consists of over 25 development
programs, and remains the Company's long-term growth engine.
Selling, general and administrative expenses are also expected to
increase in the second half of 2004 relative to first-half 2004
levels, due to the full deployment of Biovail's specialty and
primary-care sales forces and the initiation of various marketing
initiatives in support of the Company's promoted products.
Selling, general and administrative expenses are forecast to be in
the range of $260 million to $280 million for 2004.
Amortization expenses for 2004 are expected to be in the range of
$60 million to $65 million. The Company's tax rate is expected to
be in the 4% to 5% range. Capital expenditures are expected to be
in the range of $25 million to $40 million, and cash flow from
operations is expected to be in the range of $200 million to
$250 million.
Biovail's diluted EPS guidance excludes certain items such as the
2004 first-quarter charge for acquired research and development
and may exclude future items. Updated diluted EPS is expected to
be in the $0.30-$0.40 range for third-quarter 2004 and $0.55-$0.75
for fourth-quarter 2004. Updated 2004 third-quarter diluted EPS
reflects a number of items, including the impact of the recent
termination of the Cedax distribution agreement.
Fourth-quarter 2004 guidance reflects numerous assumptions
including further improvements in our generics business, continued
market penetration of Wellbutrin XL and potential partnering
opportunities; offset by further investment in growth initiatives.
Depending on the timing of these items, full-year diluted EPS for
2004 is expected to be in the range of $1.35 and $1.60.
The Company's diluted EPS guidance is based on a number of
variables, including estimated revenues, expenses, wholesaler and
distribution-partner buying patterns and inventory levels, gross
margins, tax rate, number of shares outstanding and numerous other
items. Attainment of the high end of the Company's diluted EPS
guidance range assumes a number of variables, including achieving
a high level of revenues, high gross margins, a relatively low
level of expenses, further generic business improvements,
continued market penetration of Wellbutrin XL, among other items.
Achieving the low end of the Company's earnings guidance assumes
minimum product sales revenue levels are met, low gross margins
and a higher level of expenses.
Biovail Corporation is an international full-service
pharmaceutical company, engaged in the formulation, clinical
testing, registration, manufacture, sale and promotion of
pharmaceutical products utilizing advanced drug-delivery
technologies. For more information about Biovail, visit the
company's Web site at http://www.biovail.com/
* * *
As reported in the Troubled Company Reporter on March 11, 2004,
Standard & Poor's Ratings Services revised its outlook on the
pharmaceutical company to negative from stable. At the same time,
S&P affirmed its ratings on Mississauga, Ontario-based Biovail,
including the 'BB+' long-term corporate credit rating. The action
was in response to the company's lower 2004 earnings guidance.
BO BO INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Bo Bo, Inc.
dba Always 99 cents
707 West Glencoe Place
Milwaukee, Wisconsin 53217
Bankruptcy Case No.: 04-32755
Type of Business: The Debtor operates a four-outlet chain
of general merchandise stores.
See http://www.always99cents.com/
Chapter 11 Petition Date: September 1, 2004
Court: Eastern District of Wisconsin (Milwaukee)
Judge: Susan V. Kelley
Debtor's Counsel: Jonathan V. Goodman, Esq.
135 West Wells Street, Suite 340
Milwaukee, WI 53203
Tel: 414-297-1199
Estimated Assets: $4.6 million
Estimated Debts: $3.1 million
*** Always 99 Cents President Bo Perry testified to these
*** financial figures in a hearing earlier this week before the
*** Honorable Susan Kelley in U.S. Bankruptcy Court, according to
*** a report by Thomas Daykin in the Milwaukee Journal Sentinel.
*** See http://www.jsonline.com/bym/news/sep04/257045.asp
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Sun City Produce Co. Produce Supplier $597,425
75 NW 13th Ave.
Pompano Beach, FL 33069
Sales Max, Inc. Inventory, HBA, $526,377
2455 E. Francis St. Grocery housewares
Ontario, CA 91761
Ocean Desert Sales, Inc. Inventory, seasonal $335,734
5400 Tulip St. grocery, HBA,
Philadelphia, PA 19124 housewares
Bazaar, Inc. Inventory, grocery, $223,791
HBA, housewares
Brohn Building Corp. Buildout of stores $161,412
Grocery Liquidators Midwest Grocery supplier $159,529
Dairy States Foods, Inc. Inventory, cookies $138,020
A-1 Services, Inc. Refrigeration & $79,731
Freezers &
installation
Michael Levin Trading Inventory, grocery $74,651
Sunset Wholesale Inventory, grocery, $73,887
Candy
TJC Solutions, Inc. Computers & software $57,103
Hillandale Farms of Iowa Eggs $48,240
B & C Values Candy & HBA products $47,771
Lozier Corp. Store fixtures $41,065
Orchids Paper Products Co. Paper Products $39,518
WE Energies Utilities $39,325
Betty, Inc. Grocery products $37,767
Novo Card Publishers, Inc. Cards/greeting $36,880
Western Gourmet Foods Food stuffs $35,825
Wholesale
Tov Lev Enterprises, Inc. General Merchandise $33,701
CATHAY ENTERPRISES: Case Summary & 19 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Cathay Enterprises, Inc.
1635 North Scottsdale Road
Tempe, Arizona 85281
Bankruptcy Case No.: 04-15766
Type of Business: Hotel
Chapter 11 Petition Date: September 7, 2004
Court: District of Arizona (Phoenix)
Judge: Redfield T. Baum Sr.
Debtor's Counsel: Daniel P. Collins, Esq.
Collins, May, Potenza, Baran & Gillespie
2210 Bank One Center
201 North Central Avenue
Phoenix, AZ 85073-0022
Tel: 602-252-1900
Fax: 602-252-1114
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Samuel W. Huang and Secured Value: $1,519,980
Terry C. Tuang $2,600,000
1635 N. Scottsdale Rd.
Tempe, AZ 85281
Samuel Huang $270,000
1635 N. Scottsdale Rd.
Tempe, AZ 85281
Maricopa County Treasurer $39,291
Burch & Cracchiolo, P.A. $31,944
American Hotel $14,151
Arizona Dept. of Revenue $1,096
City of Tempe $1,039
Sysco Food Services of AZ $1,035
City of Tempe $881
Mountain Telecommunications $852
Southwest Gas Corporation $807
BSA Business Solutions, Inc. $594
Ecolab, Inc. $309
VIP International Corporation $261
Ecolab Pest Ellmination Division $239
Multi-Systems, Inc. $237
Quill $223
BSA Business Solutions $144
Ecolab, Inc. $118
CATHOLIC CHURCH: Judge Perris Amends AICCO Premium Financing Pact
-----------------------------------------------------------------
As previously reported, the Court authorized the Archdiocese of
Portland in Oregon to enter into a premium agreement with A.I.
Credit Corp., or its subsidiary AICCO, Inc., on August 6, 2004.
The Agreement provided for the financing of premiums to be paid on
the Debtor's insurance policies.
Recently, AICCO advised the Debtor that it is unwilling to fund
the payment of premiums pursuant to the Agreement without the
ability to receive protection from the automatic stay, without
further hearing or Court order, in the event the Debtor defaults.
Under the Agreement and Statute 746.515(2) of the Oregon Revised
Statutes, AICCO is required to give the Debtor 10-days' notice of
its intent to cancel and to comply with all other notices under
the Agreement before canceling the policies. The Debtor believes
this will provide it with sufficient notice and an opportunity to
cure the default without the necessity of the Court being required
to further consider the matter.
At the Debtor's request, Judge Perris amends the August 6, 2004
Order to provide that in the event the Debtor defaults under the
terms of the Agreement, AICCO may, in accordance with the
Agreement and ORS 746.515(2), cancel the insurance policies as
listed in the Agreement and any amendment to the Agreement, and
receive and supply the unearned or return premiums to the account
of the Debtor, without further Court order.
All other provisions of the Order remain in full force and effect.
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas
W. Stilley, Esq. and William N. Stiles, Esq. of Sussman Shank LLP
represent the debtor in its restructuring efforts. In its
Schedules of Assets and Liabilities filed with the Court on July
30, 2004, the Portland Archdiocese reports $19,251,558 in assets
and $373,015,566 in liabilities. (Catholic Church Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
CDK SERVICES: Breaches Bank Loan's Financial Covenants
------------------------------------------------------
CDK Services, Ltd. reported record 2nd quarter sales for its
quarter ended June 30, 2004. Sales of $2,121,000 were up 21% from
the same period of the prior year. Gross margin percentages
remained strong with resulting record gross margin dollars.
However, increases in SG&A costs related to the Emission
Eliminator resulted in a loss for the quarter of $185,000 compared
to a loss of $73,000 in the second quarter of 2003. To review the
complete financials, go to SEDAR's website at
http://www.sedar.com/
CDK's President and CEO Wayne Thomson said, "We have continued to
grow our valve and BOP sales and service business aggressively
with sales increasing from the previous year for 7 consecutive
quarters. This success in our base business has allowed the
Company to continue to invest in its patented Emission
Eliminator.
For the first time, all of the Company's base businesses generated
positive cash flow and the second half of 2004 is looking
positive. Key B.O.P. has received commitments for the delivery of
6 new BOP stacks in the last half of 2004 generating $1.3 million
in revenue. CDK's Tega Supply division has significant new project
commitments, which will start late in the 3rd and early in the 4th
quarter of this year. We have averaged over 15% growth in sales
in our base business per year over the past three years, while
maintaining our margins. We are on track to exceed that rate of
growth in 2004.
We have made changes in the organization that will result in a
focus on sales growth of the Emission Eliminator. My efforts, in
the initial few months as the Company's CEO, are being directed at
selling and marketing the Emission Eliminator. We have appointed
Kelly Grimes as the Vice-President - Sales and Marketing with
specific responsibility for sales of the Emission Eliminator.
Kelly's experience and leadership will significantly enhance our
sales force.
There are currently 85 Emission Eliminators operating in the
field, some of which have been working continuously for 2 years.
We expect to install a number of additional units into the field
over the next two months, which will result in further sales in
the 4th quarter of this year. In addition, we are finalizing
modifications to the unit to further satisfy specific customer
needs. We are in the field testing stage of this revised unit
and, based on initial customer feedback, sales prospects for this
revised unit are very good. We expect 3rd quarter sales of the
Emission Eliminator to continue to be slow, with significant sales
beginning in Q4."
Breaches Bank Covenants
The Company also stated in their quarterly report ending
June 30, 2004, that it had been in violation of covenants with its
bank relating to maintenance of a current ratio and a debt service
coverage ratio. At June 30, 2004 the Company's current ratio for
bank purposes of approximately 1.0 was lower than the bank's
requirement of 1.20. The Company also remains in violation of the
debt service covenant. The Company has included the entire amount
of its term debt owing to the bank ($170,130) as a current
liability at June 30, 2004. The bank is aware of these conditions
and to date has not made demand for repayment. The Company also
included its 12% debenture ($172,000) maturing in June 2005 in
current liabilities at June 30, 2004. CDK expects to repay this
debenture from operating profits generated in the remainder of
this year and the first half of 2005.
About CDK Services
CDK Services Ltd. is an emerging oilfield services company whose
product offering includes the patented Emission Eliminator. The
Emission Eliminator reduces operating costs and greenhouse gas
emissions at natural gas installations by utilizing a small
pressure differential from the wellhead to the flow line to power
methanol chemical injection pumps, which prevent hydrates from
forming at the wellhead. The CDK pump returns the exhaust gas to
the sales line eliminating wellhead atmospheric emissions. The
Emission Eliminator offers significant economic benefits to
customers while enhancing safety and landowner relations.
Operators can sell gas now being emitted to the atmosphere from
sweet gas facilities, eliminate the need for propane at sour gas
facilities and may accumulate carbon credits for greenhouse gas
reductions. The Emission Eliminator addresses issues raised in
the updated Alberta Energy and Utilities Board Guide 60 on the
emission of fugitive gases from well sites. The Company's base
business provides valve and BOP sales and service solutions to the
oil and gas and other industries in Western Canada.
CHASE COMM'L: Moody's Junks One Class & Gives Low-B Ratings to Two
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of eight classes
and affirmed the ratings of two classes of Chase Commercial
Mortgage Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 1998-1 as follows:
-- Class A-2, $445,747,407, Fixed, affirmed at Aaa;
-- Class X, Notional, affirmed at Aaa;
-- Class B, $32,714,991, Fixed, upgraded to Aaa from Aa1;
-- Class C, $49,072,487, Fixed, upgraded to Aaa from A1;
-- Class D, $44,983,113, Fixed, upgraded to Aa3 from Baa2;
-- Class E, $12,268,122, Fixed, upgraded to A1 from Baa3;
-- Class F, $36,804,365, Fixed, upgraded to Baa3 from Ba2;
-- Class G, $8,178,748, Fixed, upgraded to Ba1 from Ba3;
-- Class H, $18,402,183, Fixed, upgraded to B2 from B3;
-- Class I, $4,089,374, Fixed, upgraded to Caa1 from Caa2.
As of the August 18, 2004 distribution date, the transaction's
aggregate balance has decreased by approximately 19.3% to
$660.2 million from $817.9 million at securitization. The
Certificates are collateralized by 66 mortgage loans secured by
commercial and multifamily properties. The loans range in size
from less than 1.0% of the pool to 15.3% of the pool, with the top
10 loans representing 49.9% of the pool. The pool consists of a
shadow rated component consisting of two loans, representing 24.4%
of the pool, a conduit component, representing 67.5% of the pool,
and a credit tenant lease -- CTL -- component, representing 8.1%
of the pool. Three loans have been liquidated from the pool,
resulting in aggregate realized losses of approximately
$8.1 million. There are no loans in special servicing.
Moody's was provided with year-end 2003 operating results for
approximately 98.0% of the pool excluding the CTL loans. Moody's
loan to value ratio -- LTV -- for the conduit component is 74.6%,
compared to 78.6% at Moody's last full review in June 2002 and
83.0% at securitization. Based on Moody's analysis, 9.5% of the
pool has a LTV greater than 100.0% compared to 11.2% at the last
review and 1.9% at securitization. The upgrade of Classes B, C,
D, E, F, G, H and I is due to an increase in subordination levels
and overall improved pool performance.
The largest shadow rated loan is the Embassy Suites Loan
($100.8 million - 15.3%), a portfolio of nine hotels located inz;
* California (2),
* Texas (2),
* Kansas (1),
* Georgia (1),
* North Carolina (1),
* Illinois (1), and
* New Jersey (1).
The loan has amortized by 11.6% since securitization from an
original balance of $113.4 million. Although the portfolio's
performance has declined since securitization, recent performance
has improved significantly. The portfolio's occupancy was 68.3%
in 2003, compared to 53.0% in 2001, 64.0% in 2000 and 75.0% at
securitization. Based on the servicer's analysis, net operating
income for the first six months of 2004 is 7.0% higher than the
comparable period in 2003. Moody's current shadow rating is A3,
the same as at last review.
The other shadow rated loan is the 330 Madison Avenue Loan
($60 million - 9.1%), which is secured by a 771,000 square foot
office building located in midtown Manhattan in New York City.
The property's financial performance has improved since
securitization due to increased rents. The property is 97.0%
occupied, the same as at securitization. The loan is shadow rated
Aa2, compared to A2 at last review.
The top three conduit loans represent 11.6% of the outstanding
pool balance. The largest conduit loan is the Franklin Village
Shopping Center Loan ($27.7 million - 4.2%), which is secured by a
290,000 square foot community shopping center located in Franklin,
Massachusetts. Approximately 22.0% of the property is leased as
office space. The retail portion is anchored by Stop & Shop and
Marshall's. The property is 95.3% leased, compared to 99.0% at
securitization. Moody's LTV is 74.8%, compared to 79.0% at the
previous review.
The second largest conduit loan is the G&K Portfolio Loan
($25.2 million - 3.8%), which is secured by four multifamily
properties located in California. The properties, which total 500
units, were built in the mid-1970s. The portfolio is 94.0%
occupied, essentially the same as at securitization. Moody's LTV
is 59.0%, compared to 65.2% at last review.
The third largest conduit loan is the Hamptons Apartments Loan
($23.9 million - 3.6%), which is secured by a 659-unit apartment
complex built in 1969 and located in Beachwood, Ohio. The
property's performance has been impacted by a decline in
occupancy. The property is 72.0% occupied, compared to 92.0% at
securitization. Moody's LTV is 84.2%, compared to 67.4% at last
review.
The CTL component includes 7 loans secured by properties leased to
three tenants under bondable leases. The tenants are Brinker
International, Inc. ($30.1 million; Moody's senior unsecured
rating Baa2), H.E. Butt Grocery Stores ($12.6 million) and Star
Market ($10.6 million; an affiliate of Albertson's Inc.; Moody's
senior unsecured rating Baa2).
The pool's collateral is a mix of:
* office (24.2%),
* retail (23.2%),
* hotel (19.2%),
* multifamily (19.0%),
* CTL (8.1%),
* mixed use (4.7%), and
* industrial and self storage (1.6%).
The collateral properties are located in 23 states. The highest
state concentrations are:
* California (19.0%),
* Illinois (14.7%),
* Pennsylvania (7.7%),
* New York (7.4%), and
* Florida (5.9%).
All of the loans are fixed rate.
CIRTRAN CORP: Wins Wheel Chair Lift Manufacturing Contract
----------------------------------------------------------
CirTran Corp. (OTC BB: CIRT), an international full-service
contract manufacturer of printed circuit board assemblies, cables
and harnesses, has been selected and awarded an order for a
complete "box-build" system to a leading Southern California-based
firm specializing in the hydraulic lift gate industry. The
company's product line includes various models of lift gates for
cargo, delivery and shipping trucks and wheelchair lifts for
automobiles and buildings. CirTran will be building and delivering
the wheelchair controller box that will be used by state
transportation agencies. CirTran was granted the project after
successfully delivering the initial product test last month.
CirTran will announce the company's name and the magnitude of this
product once permission is granted.
Trevor M. Saliba, executive vice president of Worldwide Business
Development of CirTran Corp., commented, "We are pleased to
announce the awarding of this new project in a new sector of the
automotive industry for CirTran. Our overall backlog is at a
record high, and we are consistently increasing sales each new
month. This new project award is a direct result of CirTran's
unique marketing program."
About CirTran Corp.
Founded in 1993, CirTran Corp. has established itself as a
premier full-service contract electronics manufacturer by building
printed circuit board assemblies, cables, and harnesses to the
most exacting specifications. CirTran is headquartered in Salt
Lake City with a state-of-the-art 40,000-square-foot facility.
CirTran also provides "just-in-time" inventory management
techniques that minimize the OEM's investment in component
inventories, personnel and related facilities, thereby reducing
costs and ensuring speedy time to market. For further information
about CirTran, visit the company's Web site located at
http://www.cirtran.com/
At June 30, 2004, CirTran Corp.'s balance sheet showed a
$4,015,036 stockholders' deficit, compared to a $4,941,251 deficit
at December 31, 2003.
COMM 2001-FL4: Moody's Reviewing Low-B Ratings & May Downgrade
--------------------------------------------------------------
Moody's Investors Service upgraded one class of COMM 2001-FL4,
Commercial Mortgage Pass-Through Certificates as follows:
-- Class B, $11,302,081, Floating, upgraded to Aaa from A1;
These classes were placed on review for possible downgrade:
-- Class K-PS, $2,381,000, Floating, currently rated Ba1;
-- Class L-PS, $1,163,000, Floating, currently rated Ba2;
-- Class M-PS, $7,037,000, Floating, currently rated Ba3;
-- Class K-CH, $806,652, Floating, currently rated Baa1; and
-- Class M-CH, $2,276,267, Floating, currently rated Baa3.
The Certificates are collateralized by three mortgage loans, which
range in size from 19.0% to 60.9% of the pool based on current
principal balances. As of the August 16, 2003 distribution date,
the transaction's aggregate certificate balance has decreased by
approximately 84.4% to $134.6 million from $862.7 million at
securitization. The mortgage loans do not provide for principal
amortization. The pool balance reduction is due to eight loan
payoffs and the partial payoff of the Cherry Hill Office Portfolio
Loan.
Class B was upgraded due to significant credit support buildup due
to the loan payoffs. Moody's does not rate pooled Classes C, D,
and E.
Classes K, L and M pertain to the 100 Pine Street and the Cherry
Hill Loans. Revenue associated with the 100 Pine Street Loan
collateral has declined significantly as building vacancy has
risen and as above-market rental rates have rolled over to
prevailing market rates. Cherry Hill has a current occupancy rate
of 76.4% which might decline to as low as 70.0% based upon
announced upcoming tenant vacancies.
COMMERCE ONE: Grants New Stock Options to Non-Officer Employees
---------------------------------------------------------------
In accordance with Nasdaq Marketplace Rule 4350, Commerce One
(Nasdaq:CMRC) discloses that during the past fifteen days it has
granted non-statutory stock options to purchase a total of 20,075
shares of Commerce One stock. The options were granted to non-
officer employees under Commerce One's 2004 Inducement Plan. The
options were granted at an exercise price of $0.62 and, after an
initial six-month cliff, will vest on a monthly basis over a four-
year period.
About Commerce One
>From its initial roots in Internet-based software applications,
Commerce One has consistently been at the forefront of delivering
advanced technologies that help global businesses collaborate with
their partners, customers and suppliers over the Internet.
Commerce One has defined many of the open standards and protocols
established for business networks today and our global customer
base includes leaders in a wide range of industries. The Commerce
One Conductor platform and industry-specific Process Accelerators
represent the next generation of business process management
solutions that enable enterprises to optimize their existing
technology investments and enhance functionality of existing
applications and processes. For more information, go to
http://www.commerceone.com/
At June 30, 2004, Commerce One, Inc.'s balance sheet showed a
$10,391,000 stockholders' deficit, compared to a $3,028,000 at
December 31, 2003.
COEUR D'ALENE: Continues to Pursue Offer to Purchase Wheaton
------------------------------------------------------------
Coeur d'Alene Mines Corporation (NYSE: CDE) is committed to the
acquisition of Wheaton River Minerals Ltd. (TSX: WRM, Amex: WHT)
and will continue to pursue its offer to purchase all of the
outstanding common shares of Wheaton River directly from Wheaton
River shareholders.
In response to the Wheaton River Board's latest recommendation to
the company's shareholders, Dennis E. Wheeler, Chairman and Chief
Executive Officer of Coeur, stated, "We continue to receive
support for Coeur's offer from Wheaton River shareholders because
of its significant premium, substantial cash component and
enhanced growth platform. Accordingly, we have taken our offer
directly to Wheaton River shareholders. We remain committed to
completing the transaction so that we can begin to deliver the
benefits of the combination to shareholders of both Wheaton River
and Coeur."
Coeur's offer provides Wheaton River shareholders with significant
value, including:
* a premium of 38% over Wheaton River's closing stock price on
May 27, 2004, the date of Coeur's initial proposal;
* a premium of approximately 17% over Wheaton River's closing
stock price of Cdn$3.51 per share on September 3, 2004; and
* a minimum of Cdn$1.00 per share in cash, representing over
24% of the total offer consideration.
The combination of Coeur and Wheaton River will provide
significant strategic and financial benefits. The combined
company will be the world's leading primary silver producer, a
significant gold producer and the fourth largest precious metals
company in North America. The combined Coeur-Wheaton River will
have a solid growth platform with significant development projects
in both North and South America. In addition, Coeur has one of
the most experienced management teams in the industry with over
400 years of collective experience in the exploration, development
and operation of mines around the world. The combined company is
expected to generate significant free cash flow and will have a
strong balance sheet and access to capital markets to finance
growth. The combined company will also be one of the most liquid
precious metals stocks in North America.
On September 3, 2004, Wheaton River agreed with Coeur to postpone
the closing of the Silver Wheaton transaction. Mr. Wheeler noted,
"We are pleased that the negotiations between the parties resulted
in the postponement of the closing of the Silver Wheaton
transaction until October 15. We have consistently said that it
is in the best interest of Wheaton River shareholders for Wheaton
River to postpone the closing of the Silver Wheaton transaction
until after the expiration of Coeur's offer. We are pleased that
Wheaton River's Board has now listened to its shareholders, and to
Coeur, and agreed to a postponement."
Coeur has established September 30, 2004 as the deadline for
receipt of shares to be deposited by Wheaton River shareholders
under the terms of the offer. A vote to approve the transaction
by Coeur shareholders will be held on September 30, 2004 in Coeur
d'Alene, Idaho. The transaction is expected to close as soon as
practicable after the acceptance of the offer by Wheaton River
shareholders and approval of the transaction by Coeur
shareholders.
CIBC World Markets Inc. and J.P. Morgan Securities Inc. are acting
as dealer managers for the offer Wheaton River shareholders can
obtain more information about the offer by contacting MacKenzie
Partners, Inc., which is serving as information agent, by calling
(800) 322-2885 (toll-free) or (212) 929-5500 (collect).
Coeur d'Alene Mines Corporation is a leading international low-
cost primary silver producer, as well as a significant producerof
gold. The Company has mining interests in Nevada, Idaho,Alaska,
Chile, and Bolivia.
* * *
As reported in the Troubled Company Reporter on June 3, 2004,
Standard & Poor's Ratings Services placed its B- corporate credit
and senior unsecured debt ratings on Coeur D'Alene Mines Corp. on
CreditWatch with positive implications following the company's
announcement that it intends to acquire precious metals mining
company Wheaton River Minerals Ltd. in a stock and cash
transaction valued at approximately $1.8 billion.
"The CreditWatch action reflects what is likely to be a meaningful
improvement in Coeur's business and financial profile upon the
successful acquisition of lower-cost producer Wheaton," said
Standard & Poor's credit analyst Paul Vastola. Standard & Poor's
expects that its ratings on Coeur would likely be raised several
notches. Standard & Poor's will continue to monitor the
transaction for any potential revisions to the deal. The deal
remains subject to several conditions and is expected to close by
Sept. 30, 2004.
CPT HOLDINGS: Hires Klett Rooney as Special Litigation Counsel
--------------------------------------------------------------
The Honorable Alan H.W. Shiff of the U.S. Bankruptcy Court for the
District of Connecticut, Bridgeport Division, gave his stamp of
approval to CPT Holdings, Inc.'s application to retain Klett
Rooney Lieber & Schorling as its special litigation counsel.
As previously reported in the Troubled Company Reporter, CPT is a
defendant in a $3,000,000 lawsuit (Bankr. W.D. Pa. Adv. Pro. No.
02-2360 (BM)) brought by William Pineo, the Chapter 7 Trustee
overseeing the liquidation of J&L Structural, Inc.
Klett Rooney will:
a) advise the Debtor with respect to all issues of law
relating to its defenses;
b) prepare or assist in the preparation of any necessary
legal documents;
c) conduct any necessary discovery;
d) represent the Debtor in Court appearances; and
e) participate as counsel for the Debtor in any appeals
relating to the litigation of the Debtor's operating
subsidiary, J&L.
James D. Newell, Esq., is the lead attorney at Klett Rooney who'll
represent CPT. Klett Rooney will be paid for its professional
services at the Firm's customary hourly rates. The lawyers don't
disclose their hourly billing rates in the papers delivered to the
Bankruptcy Court.
Headquartered in Greenwich, Connecticut, CPT Holdings, Inc., filed
for chapter 11 protection on December 11, 2003 (Bankr. D. Conn.
Case No. 03-51629). Melissa Zelen Neier, Esq., Ivey, Barnum, and
O'Mara represent the Debtor in its restructuring efforts. When
the Company filed for protection from its creditors, it reported
$24,007,122 in total debts.
CRDENTIA CORP: Acquires Texas-Based Care Pros Staffing, Inc.
------------------------------------------------------------
Crdentia Corp. (OTC Bulletin Board: CRDE), a leading U.S. provider
of healthcare staffing services, acquired Care Pros Staffing,
Inc., a per diem medical staffing provider serving the rural North
Central Texas market.
Commenting on the Care Pros Staffing acquisition, President Pamela
Atherton stated, "Care Pros Staffing's per diem registry
complements Crdentia's existing operations in the Dallas Metroplex
and surrounding markets. This acquisition supplies the expertise
and acumen necessary for Crdentia to effectively service hospitals
and nursing homes in rural Texas and build our presence in those
rural markets surrounding our existing and future operational hubs
in large metropolitan cities. As part of our overall expansion
strategy, this is a valuable acquisition that adds a distinct
skill set to our widely diversified product and service line. Care
Pros Staffing is a successful and reputable brand with strong
contracts in its markets, and we enthusiastically welcome Dan Ross
and his team to Crdentia's growing network."
Founded in 2001 by President Dan Ross, Care Pros Staffing has
offices in McKinney, a Dallas suburb, and Temple, a rural
community located in Central Texas. Care Pros Staffing specializes
in the serving the unique dynamics of the rural healthcare
staffing marketplace including community hospitals and nursing
homes. Care Pros Staffing will continue to operate under the
direction of Dan Ross who has been named Vice President of
Crdentia's Dallas market region.
Dan Ross commented, "We are thrilled with the opportunity to join
forces with Crdentia in the North Central Texas market. With
Crdentia's multidimensional services including travel nursing,
international, private duty, as well as per diem, the combination
of expertise and resources adds significant value to our
operations and client relationships."
Ms. Atherton noted that Care Pros meets substantially all of the
acquisition criteria per Crdentia's stated expansion plan
including synergistic geographic focus, proven expertise in a
select staffing segment, strong market reputation and management,
and a substantial contract base. The transaction is expected to be
immediately accretive to Crdentia's operating performance in
fiscal 2004. More information about Care Pros Staffing, Inc is
available at http://www.careprostaffing.com/
The Arizona Home & Healthcare and Care Pros Staffing acquisitions
are two of several acquisitions planned by Crdentia during 2004
focusing on per diem and private duty staffing. Founded in August
2002, Crdentia successfully integrated four acquisitions in 2003
and, including Arizona Home & Healthcare and Care Pros Staffing,
now staffs approximately 500 nurses through nine domestic offices
and one office in the Philippines. Crdentia ranks among the 10
largest healthcare staffing providers in the U.S. market.
About Crdentia Corp.
Crdentia Corp. is one of the nation's leading providers of
healthcare staffing services. Crdentia seeks to capitalize on an
opportunity that currently exists in the healthcare industry by
targeting the critical nursing shortage issue. There are many
small, private companies that are addressing the rapidly expanding
needs of the healthcare industry. Unfortunately, due to their
relatively small capitalization, they are unable to maximize their
potential, obtain outside capital or expand. By consolidating
well-run small private companies into a larger public entity,
Crdentia intends to facilitate access to capital, the acquisition
of technology, and expanded distribution that, in turn, drive
internal growth. For more information, visit
http://www.crdentia.com/
Financial Challenges
Crdentia Corp.'s auditors expressed doubt about the company's
ability to continue as a going concern when they reviewed the
company's 2002 financial statements. At Dec. 31, 2003, the
company's balance sheet showed a $1.2 million working capital
deficit. Crdentia posted a $2.9 million net loss in the half-year
ending June 30, 2004, eroding shareholder equity by more than 50%
from what it was at Dec. 31, 2003, to $1.9 million.
CRDENTIA CORP: Closes Arizona Home & Healthcare Acquisition
-----------------------------------------------------------
Crdentia Corp. (OTC Bulletin Board: CRDE), a leading U.S. provider
of healthcare staffing services, reported the closing of its
acquisition of Arizona Home & Healthcare, a per diem and private
duty healthcare staffing provider serving the Phoenix and Tucson
metro market regions.
Following the announcement last week of its entry into an
agreement to acquire Arizona Home & Healthcare, Crdentia also
reported the closing of the transaction effective August 31, 2004.
Arizona Home & Healthcare's per diem and private duty healthcare
staffing businesses have nearly 300 nurses under contract serving
a diverse base of more than 100 Arizona based clients. The
company's contracts represent Arizona's predominant areas of
medical staffing needs including workers' compensation, hospital
staffing, behavioral health, prisons, corrections and private duty
home care.
Founded in 2000, Arizona Home & Healthcare's per diem and private
duty healthcare staffing businesses have nearly 300 nurses under
contract serving a diverse base of more than 100 Arizona based
clients. The company's contracts represent Arizona's predominant
areas of medical staffing needs including workers' compensation,
hospital staffing, behavioral health, prisons, corrections and
private duty home care. Arizona Home & Healthcare will continue
to operate under the direction of founder William Campbell Crocker
who has joined Crdentia's senior management team as Senior Vice
President.
As reported in the Troubled Company Reporter on September 2, 2004,
Crdentia has entered into a three-year secured term loan of up to
$10 million in support of its strategic expansion strategy and
acquisition plan. Funded by Bridge Healthcare Finance, the term
loan allows Crdentia to draw down amounts based on the EBITDA
performance of the acquired company.
The Arizona Home & Healthcare and Care Pros Staffing acquisitions
are two of several acquisitions planned by Crdentia during 2004
focusing on per diem and private duty staffing. Founded in August
2002, Crdentia successfully integrated four acquisitions in 2003
and, including Arizona Home & Healthcare and Care Pros Staffing,
now staffs approximately 500 nurses through nine domestic offices
and one office in the Philippines. Crdentia ranks among the 10
largest healthcare staffing providers in the U.S. market.
Financial Challenges
Crdentia Corp.'s auditors expressed doubt about the company's
ability to continue as a going concern when they reviewed the
company's 2002 financial statements. At Dec. 31, 2003, the
company's balance sheet showed a $1.2 million working capital
deficit. Crdentia posted a $2.9 million net loss in the half-year
ending June 30, 2004, eroding shareholder equity by more than 50%
from what it was at Dec. 31, 2003, to $1.9 million.
DAVEL COMMS: Creditors Ink $118MM Acquisition Pact with MobilePro
---------------------------------------------------------------
Davel Communications, Inc. (OTCBB:DAVL) signed a definitive
agreement among Davel, MobilePro Corp. (OTCBB:MOBL) and the
secured creditors of Davel, whereby the Telco division of
MobilePro will acquire 100% of Davel's senior secured debt, in the
approximate principal amount of $118 million, as well as
approximately 95% of Davel's issued and outstanding common stock
owned by its secured creditors.
The Davel acquisition represents for MobilePro the addition of
approximately 42,000 payphones in over 25,000 locations around the
United States. The financial terms of the transaction were not
disclosed. The closing of the transaction is subject to final
regulatory approvals, which are expected within the next 60 days.
Woody McGee, CEO of Davel, said, "We at Davel are excited that our
existing customers will have a variety of services to access from
MobilePro's service portfolio. The offerings we can now provide
will strengthen our existing relationships by allowing Davel to
offer a total package solution for local, long distance as well as
payphone services. In addition, Davel will have the ability to
offer a more competitive solution for future customers."
Jay Wright, MobilePro president and CEO, said, "We believe that
Davel's payphone network gives MobilePro a tremendous real estate
footprint for the deployment of Wi-Fi and/or Wi-Max wireless
equipment and thus represents another major step in the execution
of our strategic plan to become a leading next-generation
telecommunications provider. Davel is led by Woody McGee, who we
believe is an excellent chief executive with strong wireless
experience and who I look forward to working with to implement the
wireless network."
Kevin Kuykendall, MobilePro group president of Telco Operations,
said, "Davel's 25,000 locations not only provide an excellent
opportunity to deploy the new wireless technologies, but will also
serve as a launching pad for additional services to be offered by
MobilePro, such as local, long distance, Internet, VoIP and
prepaid calling cards, which are not currently under contract with
the locations. The Davel acquisition, coupled with our other
recent acquisitions and announcements, will further enhance our
revenue and earnings base, thus allowing us to move one step
closer to achieving our goal of $120 million in annualized revenue
by the end of 2004."
Provision was also made in the Agreement for the holders of common
stock other than the secured creditors, whose holdings comprise
approximately 4.8% of the outstanding Davel stock. MobilePro has
agreed to purchase all of the shares of capital stock held by the
Minority Stockholders within 180 days of the closing date of the
acquisition by MobilePro of the Davel senior secured debt. The
purchase price to be offered to the Minority Stockholders shall be
an amount per share of not less than $0.015, which may be paid in
cash or securities of MobilePro. The form of such purchase could
be through a tender offer, a short-form merger, or some other
means as MobilePro may determine. Prior to undertaking the
purchase, MobilePro would retain an investment banker or other
financial advisor to render an opinion that the terms of the
purchase were fair, from a financial point of view, to the
Minority Stockholders. MobilePro is required to deposit into a
third-party escrow account at the closing of the transaction
$450,000, which is the approximate amount necessary to purchase
for $0.015 per share the shares of Davel stock currently held the
Minority Stockholders. In the event that the purchase is not made
within 180 days of the Closing, the amount held in escrow would be
distributed pro rata to the Minority Shareholders.
The provisions in the Agreement for the benefit of the Minority
Stockholders were determined by negotiations between MobilePro and
a Special Committee of the Davel Board consisting of non-employee
directors not affiliated with the senior secured lenders of Davel
or with MobilePro. In connection with the approval of the
Agreement by Davel, the financial advisors to the Special
Committee delivered an opinion as to the fairness, from a
financial point of view, of the consideration to be received by
the Minority Stockholders, as provided under the Agreement.
A number of factors not under the control of the Company could
affect the type and amount of consideration actually received by
the Minority Stockholders from MobilePro, and the timing thereof.
Further, the obligation of MobilePro to close the transaction and
purchase the shares of the Minority Stockholders remains subject
to the timely securing of certain regulatory approvals with
respect to the proposed transaction from the public utilities
commissions of several states. While the regulatory approvals are
expected to be received in a timely manner, Davel shareholders
should be aware that it is possible that, for some unforeseen
reason, delay or failure in obtaining all necessary regulatory
approvals could materially delay or prevent the closing of the
transaction described above. Accordingly, it is not possible for
the Company to state with certainty at this time the precise
amount, type and timing of the consideration, if any, that
ultimately may be received by the Minority Stockholders.
About MobilePro Corp.
MobilePro Corp. is a wireless technology and broadband
telecommunications company based in Bethesda, MD with operations
in Hurst, Houston, Dallas and Beaumont TX; Coshocton, OH; Kansas
City, KS; Janesville, WI; Detroit, MI; and Shreveport, LA. The
company is focused on creating shareholder value by developing
innovative wireless technologies, acquiring and growing profitable
broadband telecommunications companies and forging strategic
alliances with well-positioned companies in complementary product
lines and industries. With the signing of the definitive agreement
to acquire Davel, MobilePro has announced closed deals, definitive
agreements and letters of intent with cumulative expected 2005
calendar revenue of more than $127 million.
About Davel Communications, Inc.
Davel Communications, Inc. operates in a single business segment
within the telecommunications industry, operating, servicing and
maintaining a system of payphones throughout the United States.
The company owns and operates a network of approximately 42,000
payphones in 46 states and the District of Columbia providing it
with one of the broadest geographic ranges of coverage of any
payphone provider with over 25,000 locations. The company's
installed base generates revenue through both coin calls (local
and long distance) and non-coin calls (calling cards collect, and
third party billed calls). A significant portion of the company's
locations are in high-traffic areas such as convenience stores,
shopping centers, truck stops, service stations and grocery
stores.
Going Concern Doubt
In its Form 10-Q for the quarterly ended June 30, 2004, filed with
the Securities and Exchange Commission, Davel Communications, Inc.
reports significant recurring losses and declining revenues. In
addition, as of June 30, 2004, the Company had a working capital
deficit of $10.1 million, which includes $1.9 million of federal
universal service fees and other past due obligations, and the
Company's liabilities exceeded it assets by $110.4 million.
Although the Company's lenders have waived all defaults and have
agreed to defer certain payments, the Company was not in
compliance with certain financial covenants and did not make a
$1.4 million debt payment that was originally due under its Credit
Facility. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
DEAN FOODS: Comments on Market Environment & Revises Fin'l Outlook
------------------------------------------------------------------
Dean Foods Company (NYSE: DF) reported that unprecedented
volatility in raw milk prices, a difficult retail grocery
environment, and record-high fuel, resin and other commodity costs
have caused it to reduce its earnings expectations for 2004. The
company said that these and other factors are contributing to
weaker than expected performance across all of its businesses.
For the full year 2004, the company now expects to achieve
adjusted earnings per share in the range of $2.00 to $2.05. The
company expects to achieve adjusted EPS of $0.44 to $0.46 and
$0.63 to $0.66 in the third and fourth quarters of 2004,
respectively.
Gregg Engles, Chairman and Chief Executive Officer, said, "We said
on our August 4th conference call that our guidance for the
balance of 2004 assumed a certain limited benefit to our Dairy
Group as a result of decreasing raw milk prices. As July results
came in, and we moved through August, it has become apparent that
the competitive pressures we referenced on the call are more
intense than we expected. While our volumes are strong in our
Dairy Group and Branded Products Group segments, we have not
realized the margin benefit we expected from the July and August
declines in dairy commodity costs. Furthermore, we've continued to
be impacted by rising fuel and resin prices, volatility in the
butter market, and aggressive competition among our retail
customers."
Mr. Engles added, "As we also indicated on our second quarter
conference call, our Specialty Foods Group segment has experienced
commodity cost and competitive pricing pressures. These trends
have not abated and, in fact, we have seen sharply weaker demand
from our co-pack customers in the nutritional drinks business,
particularly in low carb beverages. Our retail pickle business
also has been significantly weaker than expected due to soft
demand in a cool, wet summer. We are systematically analyzing all
aspects of our Specialty Foods business with a view to reducing
costs and returning this operation to its historical levels of
profitability."
Mr. Engles continued, "Our Branded Products Group segment -- which
includes Silk and Horizon Organic, the largest and most dynamic
natural and organic brands in the U.S. -- continues to be a bright
spot and we expect it to remain so for the foreseeable future. We
have, however, somewhat reduced our expectations for our branded
business for the balance of the year. We now expect White Wave
sales will grow 36% year over year as opposed to 40%, and have
lowered our profit expectations accordingly. With the recently
announced consolidation of our branded businesses, we are creating
a unified consumer products company with approximately $1.1
billion in sales and operating profit in the range of 8% to 10% in
2004, and we continue to be very encouraged about the
opportunities for this business."
Mr. Engles continued, "Turning to our Spanish dairy operations,
unlike in the U.S., raw milk costs have continued to rise in the
third quarter in Spain, and due to competitive pressure, we have
not been able to pass through the increases as rapidly as we had
hoped. Volume growth continues to be very strong, but lower
branded sales resulting from an industry-wide trend of consumers
shifting to lower-margin private label products and competitive
pressures will adversely affect our margins for the remainder of
the year."
Mr. Engles concluded, "While we're clearly disappointed with the
announcement, we remain confident about our future prospects.
While this year will reset our base, we continue to believe that,
absent the extraordinary circumstances we have faced this year,
our business is well positioned to grow EPS an average of 8% to
10% per year over time. In a difficult market, we've continued to
gain market share in our dairy business and remain committed to
meeting the needs of our customers -- a strategy that we believe
will drive profitability and shareholder value in the longer-term.
We expect to provide earnings guidance for 2005 as usual on our
third quarter conference call in November."
About Dean Foods
Dean Foods Company is one of the leading food and beverage
companies in the United States. Its Dairy Group division is the
largest processor and distributor of milk and other dairy products
in the country, with an extensive refrigerated direct-store-
delivery network. Through its White Wave and Horizon Organic
subsidiaries, Dean Foods Company is also the nation's leading
manufacturer of soymilk, organic milk and other branded organic
foods. The company's Specialty Foods Group is a leading
manufacturer of pickles and other specialty food products. Dean
Foods Company and its subsidiaries operate approximately 120
plants in 36 U.S. states, Spain and the United Kingdom, and employ
approximately 29,000 people.
* * *
As reported in the Troubled Company Reporter on August 18, 2004,
Fitch Ratings assigns a 'BBB-' rating to Dean Foods Company's new
senior secured credit facility and upgrades its senior unsecured
notes rating to 'BB' from 'BB-'. Simultaneously, Fitch withdraws
its 'BB+' rating from Dean's previous senior secured facility
which included a revolver and a Term A, B, and C loan maturing in
2007. The Rating Outlook is Positive. This rating action affects
approximately $3.1 billion of Dean's outstanding debt.
Fitch's 'BBB-' rating covers its new $1.5 billion senior secured
revolver which expires August 2009 and its new $1.5 billion senior
secured term loan A which matures August 2009. The security for
these loans consists of all assets, excluding the capital stock of
the legacy Dean's subsidiaries and the real property owned by the
legacy Dean and its subsidiaries. Fitch's 'BB' rating covers
approximately $661 million senior unsecured notes with maturities
staggered between 2005 and 2017.
The ratings upgrade and outlook consider the improvement in Dean's
credit profile over the past several years, the company's leading
and growing market share in the fluid and soy milk industry, and
its proven management team. Dean's management has established a
track record of effectively integrating acquisitions, extracting
cost savings from its businesses, and successfully managing
through difficult operating environments. Management's successful
navigation through the current unprecedented class one raw milk
price environment provides reassurance that a degree of operating
income stability is obtainable even in the most difficult and
volatile environments.
For the latest 12 months ended June, 30 2004, Dean's total debt-
to-EBITDA was 3.5 times (x) and Dean's EBITDA-to-interest incurred
was 4.6x. Net cash flow from operations has increased
approximately 40% since the 2001 merger of the legacy Dean Foods
and Suiza Foods to over $400 million annually despite recent
demands on working capital. Fitch expects the overall operating
environment to improve going forward and Dean's working capital
requirements to decline. As such, Fitch believes Dean is capable
of sustaining a leverage ratio in the low 3.0x range for the
foreseeable future.
DELTA AIR: Carrier Outlines Plan to Save $5 Billion Over 3 Years
----------------------------------------------------------------
Delta Air Lines' (NYSE: DAL) top executive yesterday outlined key
elements of the company's transformation plan intended to launch
"the right airline for the new era" by improving its customers'
traveling experience while simultaneously targeting more than
$5 billion in annual cash savings by 2006. The company is on
track to deliver by the end of this year through its previously
announced Profit Improvement Initiatives (PII) approximately $2.3
billion of the total savings target.
CEO Gerald Grinstein, in remarks to employees, described the top-
to-bottom overhaul as a "comprehensive, 360-degree plan that
reinvents Delta."
The plan calls for over 51 percent of the company's network to be
restructured by January 31, 2005, resulting in "the largest
single-day schedule transformation in Delta's history," along with
improvements to its product and services, network and fleet, and
operational efficiencies and productivity immediately and over the
next 36 months, Mr. Grinstein said.
In announcing that a simpler, more efficient airline would mean
fewer jobs and reductions in pay and benefits throughout the
company, the CEO also reaffirmed his commitment to providing
meaningful opportunities for employees to share in the company's
future success.
Key initiatives include:
-- Updating and upgrading customer products and services,
including cabins and online functionality, and maintaining
two-class service in mainline operations;
-- Redesigning Atlanta's hub operation to add more flights
for greater customer choice and reliability while
simultaneously reducing congestion;
-- Dehubbing Delta's Dallas/Ft. Worth operation and re-
deploying those assets to grow hub operations in Atlanta,
Cincinnati and Salt Lake City;
-- Adding 31 new nonstop flights to 19 additional
destinations from key focus cities;
-- Growing Song, initially by 12 aircraft;
-- Reducing fleet complexity by retiring at least four fleet
types in four years and increasing overall fleet
utilization and efficiency;
-- Eliminating 6,000-7,000 jobs over the next 18 months,
lowering management overhead costs by 15 percent, and
reducing pay and benefits; and
-- Creating an Employee Reward Program to include equity,
profit sharing and performance-based incentive payouts.
The company has stated that as a result of the rapid deterioration
of its financial condition due to low yields, high fuel prices,
its uncompetitive labor costs, and its high debt burden, coupled
with a possible operational disruption from anticipated pilot
early retirements, bankruptcy is a real possibility. "We're
working hard and fast to avoid it," Mr. Grinstein said, "but if
the pilot early retirement issue is not resolved before the end of
the month, or if all of the pieces don't come together in the near
term, we will have to restructure through the courts."
Mr. Grinstein said four strategic cornerstones guided his new
leadership team's intensive strategic assessment process that
produced the transformation plan. Referred to as Delta's "ACES,"
these key principles are to Achieve viability, Create a customer-
focused culture, Excel in operational performance and Sustain
profitable growth.
"The permanently changed aviation marketplace and Delta's
unsustainable financial losses confirm that our survival requires
a viable cost structure. At the same time, increasing competition
dictates that Delta's success depends on customer satisfaction,
which in turn requires both operational excellence and motivated
employees," Mr. Grinstein said of the company's four-pronged
approach.
Achieve Viability
As the result of its PII launched in 2002, the company is "on
track" to deliver a total of $2.3 billion in annual cash savings
by the end of this year, as compared to 2002. Together, the key
initiatives announced yesterday, the requested $1 billion in pilot
savings, a significant expansion of PII and contributions from
other stakeholders, such as lessors, lenders and vendors are
intended to deliver the additional savings needed to reach the
2006 goal of more than $5 billion in annual cash savings.
Delta's expanded PII will include reductions in organizational
overhead as well as employee-related costs, product and network
changes, increased technology and improved operational
efficiencies.
Create a Customer-Focused Culture
To create a customer-focused culture, Mr. Grinstein said Delta is
"recommitting to its heritage" by listening to its customers and
delivering what they want: simplicity, comfort and style,
flexibility and reliability, and a great experience, all at a
great value.
"Our recently announced SimpliFares(TM) in Cincinnati illustrate
what we mean by simplicity," Mr. Grinstein explained. "We're
making our SkyMiles loyalty program easier to understand and
awards simpler to redeem, especially through delta.com, and
continuing to find new ways to provide passenger-friendly, self-
service technologies. We are going to take the fine print out of
the way we do business to make it easier for customers to do
business with us," he declared.
As part of these technology improvements, Delta will increase by
15 the number of cities with kiosk check-in capabilities, and
expand its services offered through the delta.com website. The
company plans to introduce capabilities to allow customers to find
lower fares and obtain refunds and reissues online. Delta's goal
is to migrate 50 percent of its customer transactions to
delta.com.
In addition to maintaining two classes of service, upgraded and
updated cabins, with features such as leather seats with more
comfort and better lighting, will be phased in over the next 18
months to offer more inviting interiors. The first MD-88 with the
new interiors will begin flying by the middle of this month.
"Importantly, we've built in cost savings to help pay for these
improvements," he noted.
Greater flexibility for the customer will be accomplished by
offering more flights and better schedules. "To get our customers
where they want to go, when they want to go, we will aggressively
compete in our key hubs and cities and invest and grow where there
is the greatest demand," Mr. Grinstein said.
"It's all about customizing our network and fleet to meet the
customers' different needs," he added. The Delta Solution provides
customers the benefits of strengthened hubs and focus cities and
increased point-to-point flying, in part, by:
-- Redesigning Delta's primary hub at Atlanta's Hartsfield-
Jackson International Airport to add more flights than any
airline has ever flown from any one city, while at the
same time reducing congestion;
-- Growing Cincinnati and Salt Lake by re-deploying aircraft
currently used at Dallas/Ft. Worth; and
-- Adding 31 new nonstop flights to 19 additional
destinations from its focus cities:
-- Boston;
-- New York-JFK;
-- Columbus, Ohio; and
-- Ft. Lauderdale, Orlando and Tampa, Florida.
"Difficult decisions had to be made," the CEO added when
explaining that in order to afford the expansion and pursuit of
new opportunities, the company needed to dehub its Dallas/Ft.
Worth operation and discontinue all service to Amarillo and
Lubbock, Texas. "A commanding market presence is critical,"
Mr. Grinstein asserted, "and we didn't have it in Dallas." The
dehubbing of Dallas/Ft. Worth will help the company retain and
build a strong, competitive pattern of service in Atlanta,
Cincinnati and Salt Lake City.
Delta anticipates that it will record accounting charges in
connection with the decision to dehub Dallas/Ft. Worth, the amount
and timing of which have not been finalized.
Other strategic network changes central to the company's larger
transformation include growing Song initially by adding 12
aircraft to its current fleet of 36 beginning in the late Spring
of 2005, increasing seasonal domestic service, capitalizing on
alliance partnerships and expanding international destinations. In
addition, Delta plans to simplify its fleet by retiring at least
four fleet types in four years, while increasing aircraft
utilization through more efficient hub scheduling.
Excel at Operational Performance
"Giving customers a great experience also means excelling at
operational performance," Mr. Grinstein emphasized. The planned
continuous, "un-banked" hub in Atlanta is unique in its design. It
will create a constant flow of arrivals and departures that will
increase capacity while reducing congestion because of the
efficiencies built into the system.
By eliminating the peaks and valleys and decreasing the amount of
time it takes to turn an aircraft, the company said it would able
to add 81 flights daily and seven new destinations, while
decreasing hourly departures and arrivals by approximately 20 per
hour. "This is great for the customer because it means less of a
wait in a less-crowded airport," the CEO said.
Mr. Grinstein noted that to deliver the essentials of a customer's
great travel experience - including clean aircraft, friendly
service, on-time performance and reliable baggage handling - will
require flawless execution and greater productivity from every
member of the Delta team. "We'll be doing more with less," he
said.
Plans were also unveiled to keep flight crews together throughout
the day in an effort to help the airline and its crews be more
efficient.
Sustain Profitable Growth
"All of these improvements and changes add up to a great value for
our customers," Mr. Grinstein said. "By investing only in what our
customers value, streamlining our operation, and fixing our cost
structure we will be able to take it to the competition and win.
Our goal is to become an efficient and respected competitor and to
be in a position to grow profitably."
In another in its series of moves to promote profitable growth,
the company yesterday announced its intent to file for new U.S.-
China service in order to expand its global network.
Profit sharing planned
in the face of additional job losses,
pay cuts and benefit reductions
The CEO emphasized that the changes necessary for viability will
add customer value and contribute to Delta's survival and any
future success. "Regrettably, the changes also will impact Delta
people," he said. "Achieving our goals will require enormous
change. To take it to the competition, we will have to work
harder and more efficiently for less, but if we work together, we
should win together. That is why Delta is adamant that its
employees have the opportunity to share in any success their
contributions help make possible."
The further restructuring of Delta's employment costs is a
"necessary but painful" part of the company's long-term viability
and growth equation, Mr. Grinstein said. The airline's employment
costs continue to be higher than those of network and low cost
carriers.
Delta has called for approximately $1 billion in annual savings
from its pilots, and the company and the pilots' union continue to
meet in an effort to find mutually acceptable solutions. In
addition, the company announced further employee- and management-
based cost saving measures.
"Our people want and deserve the facts as we know them, no matter
how difficult, so there's no sense sugar-coating the situation,"
Mr. Grinstein said before providing employees with the available
details of the reductions, which included:
-- a reduction of between 6,000-7,000 jobs over the course of
the next 18 months;
-- a 15 percent reduction in administrative overhead costs,
including management reductions;
-- reductions in compensation throughout the company, to be
announced by the end of September and implemented at a
later date; and
-- increased employee contributions to health care costs.
Delta anticipates that it will record accounting charges in
connection with the employee job reductions, the amount and timing
of which have not been finalized.
In noting the top-to-bottom reductions, the CEO restated his
commitment to the principles that the sacrifices necessary for
Delta's recovery must be mutually shared, and that employees will
benefit from any recovery.
Delta is set to unveil the employee reward program when it is
finalized later in the year, which will include a combination of
equity, profit sharing and incentive payouts tied to company
performance.
"From the outset, our plan was to achieve long-term viability by
pursuing a 'Delta Solution' unique to us to carve out new
territory in the aviation marketplace, and to 'do it once and do
it right.' In doing so, we're trying to create the right airline
for the new era," Mr. Grinstein said. "Given the severity of our
financial situation, there are no guarantees for success and there
is no time to waste, but with this plan and the commitment of
Delta people, who are second to none, I am realistically hopeful
about Delta's future."
Delta Air Lines is proud to celebrate its 75th anniversary in
2004. Delta 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 493 destinations in 87
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. Delta's marketing alliances
allow customers to earn and redeem frequent flier miles on more
than 14,000 flights offered by SkyTeam, Northwest Airlines,
Continental Airlines and other partners. Delta is a founding
member of SkyTeam, a global airline alliance that provides
customers with extensive worldwide destinations, flights and
services. For more information, please visit delta.com.
The Right Airline for the New Era
Delta's Transformation Plan - Key Facts at a Glance
OVERVIEW:
The Delta Solution
-- Transformation plan calls for targeting more than $5 billion
in annual cash savings by 2006 (compared to 2002) while
simultaneously improving the customer traveling experience
-- Delta is on track to achieve approximately $2.3 billion of
the total savings target by the end of 2004 - a result of
the past 24 months of Profit Improvement Initiatives (PII).
-- More than 51 percent of the company's network will be
restructured by January 31, 2005 to provide greater choice
for customers
-- Improvements to product and services, network and fleet,
operational efficiencies and productivity immediately and
over the next 36 months
-- Profit sharing, equity and incentives tied to performance
planned in the face of additional job losses, pay cuts and
benefit reductions
Based on the four cornerstones of the Delta Solution -- the four
ACES details include:
* ACHIEVING VIABILITY
-- Delivering more than $5 billion in additional cash savings
by 2006 (compared to 2002)
-- On track to deliver $2.3 billion in savings by the end of
this year (2004) through PII launched in 2002
-- Together with the key initiatives announced yesterday, the
requested $1 billion in pilot savings, a significant
expansion of PII, and contributions from other
stakeholders such as lessors, lenders, and vendors, are
intended to deliver the additional savings needed.
* CUSTOMER-FOCUSED CULTURE SIMPLICITY -- easier to understand,
simpler to use
-- SimpliFares in Cincinnati
-- Making SkyMiles loyalty program easier to understand and
awards simpler to redeem
-- Increase by 15 the cities with kiosk check-in. (81 cities
currently have kiosk check in)
-- Expanding delta.com functionality to include fare search,
refund and reissue transactions. Delta's goal is to
migrate 50 percent of its customer transactions to
delta.com by the end of 2005.
* COMFORT AND STYLE -- inviting cabin interiors with updated
and upgraded features
-- Improving cabin features -- leather seats, more comfort,
better lighting
-- First prototype on MD-88 to be flying by mid-September;
improvements to be phased in over next 18 months
-- Continuing two classes of service
* FLEXIBILITY - network and fleet customized to the customer
with more flights, better schedules
-- Redesigning Delta's primary hub in Atlanta to add more
flights than any airline has ever flown from any one city
while at the same time reducing congestion
-- Growing Cincinnati and Salt Lake by re-deploying aircraft
currently used at Dallas/Ft. Worth
-- Dehubbing Dallas/Fort Worth to retain and build strong
competitive service in Atlanta, Cincinnati and Salt Lake
City
-- Adding 31 new nonstop flights and 19 additional
destinations from key focus cities
-- Growing Song by initially adding 12 aircraft to its
current fleet of 36, beginning late Spring 2005
-- Reducing fleet complexity by retiring a minimum of four
fleet types in four years
* EXCEL AT OPERATIONAL PERFORMANCE
-- Unbanking Atlanta hub to increase capacity and reduce
congestion
* Adding 81 flights daily and seven new destinations
while decreasing hourly departures and arrivals by
approximately 20 per hour
* A constant flow of arrivals and departures, while
reducing congestion, because of efficiencies built
into the system
* Eliminating the peaks and valleys in arrivals and
departures and decreasing the time it takes to turn an
aircraft
-- Keeping flight crews together during the day to help the
airline and its crews be more efficient
* SUSTAIN PROFITABLE GROWTH
-- Increasing international service: Delta intends to file
for new U.S. - China service
-- Delta will:
* Strengthen secondary hubs
* Build further presence in focus cities
* Improve West Coast through partnerships
* Expand Florida service
* Grow New York/JFK
* Defend Boston
Profit sharing planned in the face of additional job losses, pay
cuts and benefit reductions
-- Reduction of between 6,000 and 7,000 jobs over 18 months,
on top of 16,000 job cuts in 2001 and 2002
-- 15 percent reduction in administrative overhead, including
management reductions, to be announced by the end of
September, on top of 41 percent cut in administrative and
management costs since 2002 (inclusive of personnel
reduction savings)
-- Reductions to compensation throughout the company to be
announced at the end of September and implemented at a
later date
-- Increased employee contribution to health care costs
-- Employee Reward Program
* Includes a combination of equity, profit sharing and
incentive payouts tied to company performance
NETWORK SPECIFICS
Number of Delta Seats per
Total Nonstop Mainline Connection Departure
Flights Destinations Flights Flights (DL &DCI)
------- ------------ -------- ---------- ---------
ATL Schedule
Current* 970 186 625 345 126
Feb. 2005 1,051 193 688 363 126
DFW Schedule
Current* 254 69 52 202 72
Feb. 2005 21 3 21 0 156
CVG Schedule
Current* 590 135 155 435 73
Feb. 2005 619 138 156 463 76
SLC Schedule
Current* 318 67 92 226 79
Feb. 2005 376 80 113 263 81
* Current = September 2004 schedule
Delta and Delta Connection carriers will begin new and/or
additional service from Boston, New York-JFK, Ft. Lauderdale,
Orlando and Tampa, Fla.; and Columbus, Ohio. The changes are as
follows:
-- From Boston, Delta will offer 2 additional daily flights
to Washington D.C. (total of 8); and 1 additional flight
to Raleigh/Durham, N.C. (total of 4)
-- From New York-JFK:
* 2 new daily flights each to Charlotte, N.C.; and
Melbourne, Pensacola and Tallahassee, Fla.
* 1 additional daily flight each, for a total of 3 each,
to Greensboro, N.C and Jacksonville, Fla.
* 1 additional daily flight, for a total of 2, to
Pittsburgh
-- From Ft. Lauderdale:
* 2 new daily flights each to Dayton, Ohio and
Norfolk, Va.
* 1 new daily flight each to Charleston, S.C. and
Richmond, Va.
* 3 additional flights to Raleigh-Durham, N.C., for a
total of 5 daily flights.
-- From Orlando:
* 2 new daily flights to Knoxville, Tenn.
* 1 new daily flight each to Asheville, N.C.; Gulfport,
Miss.; Lexington, Ky., Little Rock, Ark.; and Panama,
City, Fla.
* 1 additional daily flight each to Birmingham, Ala.;
Columbus, Ohio; Greenville/Spartanburg, S.C.;
Pensacola, Fla.; and Raleigh-Durham, N.C.
-- From Tampa:
* 3 new daily flights to Pensacola, Fla.
* 2 new daily flights each to Dayton, Ohio; Greensboro,
N.C., and Raleigh-Durham, N.C.
-- Delta will also add 3 new daily flights between Columbus,
Ohio, and Hartford, Conn., on Jan. 31.
* * *
As reported in the Troubled Company Reporter on August 23, 2004,
Standard & Poor's Ratings Services lowered Delta Air Lines, Inc.'s
corporate credit rating and the ratings on Delta's equipment trust
certificates and pass-through certificates to 'CCC'. Any out-of-
court restructuring of bond payments or a coercive exchange would
be considered a default and cause the company's corporate credit
rating to be lowered to 'D' -- default -- or 'SD' -- selective
default, S&P noted. Ratings on Delta's enhanced equipment trust
certificates, which are considered more difficult to restructure
outside of bankruptcy, were not lowered.
A Committee of Senior Secured Aircraft Creditors of Delta Air
Lines, Inc., holding $1.4 billion of senior secured debt and
represented by the law firm of Bingham McCutchen LLP, has asked
Delta for more information. Delta hasn't been forthcoming, the
Committee indicated last week.
DENNY'S CORP: Extends 11-1/4% Senior Debt Tender Offer to Oct. 4
----------------------------------------------------------------
Denny's Corporation (OTCBB:DNYY) and its wholly owned subsidiary,
Denny's Holdings, Inc. has commenced a cash tender offer for any
and all of the $343.9 million aggregate principal amount of its
outstanding 11-1/4% Notes Due 2007 with CUSIP No. 00758BAA7,
subject to certain conditions.
The tender offer is scheduled to expire at 12:00 midnight, New
York City, time on October 4, 2004, unless extended or earlier
terminated.
Denny's is also soliciting consents from the holders of the
11-1/4% Notes to approve certain amendments to the indentures
under which the 11-1/4% Notes were issued. The consents being
solicited will eliminate substantially all of the restrictive
covenants and related events of default, and will reduce the
minimum notice period for the redemption of the Notes from 30 days
to three days.
The tender of notes will include and constitute a consent to the
Amendments, and holders of notes may not consent to the Amendments
without tendering their notes. Consents from a majority of the
aggregate principal amount of the notes will be required to effect
the respective Amendments. Solicitation of consents is scheduled
to expire at 5:00 p.m., New York City time, on September 20, 2004,
unless extended or earlier terminated. Holders will be entitled to
withdraw their tenders and revoke their consents pursuant to
either tender offer only up to 5:00 p.m., New York City time, on
the Consent Date.
Offer for 11-1/4% Notes
Subject to certain conditions, holders of 11-1/4% Notes who tender
their notes and deliver their consents prior to 5:00 p.m., New
York City time, on the Consent Date, will receive tender
consideration of 103.75% of the principal amount of the 11-1/4%
Notes, plus a consent fee of 0.25%. Holders who validly tender
their 11-1/4% Notes after 5:00 p.m., New York City time, on the
Consent Date, but prior to 12:00 midnight, New York City time, on
the Expiration Date, will receive only the 11-1/4% Tender
Consideration, and not the consent fee.
In either case, holders that validly tender their 11-1/4% Notes
shall receive accrued and unpaid interest, up to, but not
including, the payment date. It is expected that payment for the
11-1/4% Notes validly tendered through the Expiration Date will be
made only promptly following the Expiration Date.
If the requisite consents to amend the indenture governing the
11-1/4% Notes have been obtained as of the Consent Date, the
Amendments to the indenture governing the 11-1/4% Notes will be
made operative promptly following the Expiration Date, subject to
receipt of the additional financing for the tender offer described
below. In that case, Denny's currently intends, also promptly
following the Expiration Date, to call for redemption, in
accordance with the terms of the indenture governing the 11-1/4%
Notes, and to redeem three days thereafter, the 11-1/4% Notes not
purchased pursuant to the tender offer. If the requisite consents
to amend the indenture governing the 11-1/4% Notes are not
obtained by the Consent Date, but the additional financing has
been received, Denny's currently intends, as of the closing of the
additional financing, to discharge and call for redemption, in
accordance with the terms of the indenture, and to redeem 30 days
thereafter, all 11-1/4% Notes not accepted pursuant to the tender
offer. In either case, the applicable redemption price will be
103.75% of the principal amount thereof, plus interest accrued to,
but not including, the applicable redemption date. This statement
of intent shall not constitute a notice of redemption under the
indenture. Such notice, if made, will only be made in accordance
with the applicable provisions of the indenture.
Denny's intends to finance the offer for the 11-1/4% Notes with a
portion of the proceeds of the New Credit Facilities (for up to
$180 million principal amount of the 11-1/4% Notes), together with
the net proceeds from an additional financing, as further
described in the Offer to Purchase and Consent Solicitation
Statement.
The obligations to purchase and to pay for the 11-1/4% Notes
pursuant to the tender offer are conditioned on, among other
things, the closing of the New Credit Facilities and the closing
of the additional financing. If Denny's effects the closing of the
New Credit Facilities, but does not complete the additional
financing, it currently intends to modify (and to extend as
necessary, without extension of withdrawal rights) the tender
offer for the 11-1/4% Notes in order to accept for payment and pay
for up to $180 million principal amount of the 11-1/4% Notes
validly tendered (on a pro rata basis to the extent valid tenders
of the 11-1/4% Notes exceed that amount). However, the
effectiveness of the Amendments to the indenture governing the
11-1/4% Notes will be conditioned upon the closing of both the New
Credit Facilities and the additional financing.
This press release shall not constitute an offer to purchase or
the solicitation of an offer to sell or a solicitation of consents
with respect to the notes. Each of the tender offers and consent
solicitations may only be made in accordance with the terms of and
subject to the conditions specified in the respective Offer to
Purchase and Consent Solicitation Statement, dated September 7,
2004, and the related Consent and Letter of Transmittal, which
more fully set forth the terms and conditions of the tender offer
and consent solicitation.
UBS Securities LLC and Goldman, Sachs & Co. are acting as the
exclusive dealer managers and solicitation agents; MacKenzie
Partners, Inc. is acting as the information agent; and U.S. Bank
National Association is acting as depositary in connection with
each tender offer and the consent solicitation. Copies of each
Offer to Purchase and Consent Solicitation Statement, Consent and
Letter of Transmittal, and other related documents may be obtained
from the information agent at:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York 10016,
Tel. No. 800-322-2885 (toll free)
212-929-5500 (collect)
Additional information concerning the terms of each Offer and
Consent Solicitation may be obtained by contacting UBS Securities
LLC at 888-722-9555, ext. 4210 (toll free) or 203-719-4210
(collect) or Goldman, Sachs & Co. at 877-686-5059 (toll free) or
212-357-5680 (collect).
Denny's is America's largest full-service family restaurant chain,
consisting of 553 company-owned units and 1,059 franchised and
licensed units, with operations in the United States, Canada,
Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. For further
information on Denny's, including news releases, links to SEC
filings and other financial information, please visit our website
at http://www.dennys.com/
DENNY'S CORP: Extends 12-3/4% Senior Debt Tender Offer to Oct. 4
----------------------------------------------------------------
Denny's Corporation (OTCBB:DNYY) and its wholly owned subsidiary,
Denny's Holdings, Inc. has commenced a cash tender offer for any
and all $111.7 million aggregate principal amount of the
outstanding 12-3/4% Senior Notes due 2007 with CUSIP No.
00763HAA7, subject to certain conditions.
The tender offer is scheduled to expire at 12:00 midnight, New
York City, time on October 4, 2004, unless extended or earlier
terminated.
Denny's is also soliciting consents from the holders of the
12-3/4% Notes to approve certain amendments to the indentures
under which the 12-3/4% Notes were issued. The consents being
solicited will eliminate substantially all of the restrictive
covenants and related events of default, and will reduce the
minimum notice period for the redemption of the 12-3/4% Notes from
30 days to three days.
The tender of notes will include and constitute a consent to the
Amendments, and holders of notes may not consent to the Amendments
without tendering their notes. Consents from a majority of the
aggregate principal amount of the notes will be required to effect
the respective Amendments. Solicitation of consents is scheduled
to expire at 5:00 p.m., New York City time, on September 20, 2004,
unless extended or earlier terminated. Holders will be entitled to
withdraw their tenders and revoke their consents pursuant to
either tender offer only up to 5:00 p.m., New York City time, on
the Consent Date.
Offer for 12-3/4% Notes
Subject to certain conditions, holders of 12-3/4% Notes who tender
their notes and deliver their consents prior to 5:00 p.m., New
York City time, on the Consent Date, will receive tender
consideration of 106.375% of the principal amount of the 12-3/4%
Notes, plus a consent fee of 0.25%. Holders who validly tender
their 12-3/4% Notes after 5:00 p.m., New York City time, on the
Consent Date, but prior to 12:00 midnight, New York City time, on
the Expiration Date, will receive only the 12-3/4% Tender
Consideration, and not the consent fee.
In either case, holders that validly tender their 12-3/4% Notes
shall receive accrued and unpaid interest up to, but not
including, the applicable payment date. It is expected that the
12-3/4% Notes validly tendered prior to the closing of the new
credit facilities referred to below will be paid for upon the
closing of those facilities, which is expected to occur on or
about September 21, 2004. Any additional 12-3/4% Notes validly
tendered thereafter through the Expiration Date may be accepted
for payment and paid for at any time and from time to time
thereafter until promptly following the Expiration Date.
If the requisite consents to amend the indenture governing the
12-3/4% Notes have been obtained as of the Consent Date, the
Amendments to the indenture governing the 12-3/4% Notes will be
made operative on the First Payment Date. In that case, Denny's
currently intends, on or following the First Payment Date, to call
for redemption, in accordance with the terms of the indenture
governing the 12-3/4% Notes, and to redeem as soon as three days
thereafter (but not until promptly following the Expiration Date),
the 12-3/4% Notes not purchased on the First Payment Date, subject
to further tenders of 12-3/4% Notes through the Expiration Date.
If the requisite consents to amend the indenture governing the 12-
3/4% Notes have not been obtained as of the Consent Date, Denny's
currently intends, on the First Payment Date, to discharge the
indenture and call for redemption, in accordance with the terms of
the indenture, and to redeem 30 days thereafter, all 12-3/4% Notes
not then accepted pursuant to the tender offer, subject to further
tenders of 12-3/4% Notes through the Expiration Date. In either
case, the applicable redemption price will be 106.375% of the
principal amount thereof, plus interest accrued to, but not
including, the applicable redemption date. This statement of
intent shall not constitute a notice of redemption under the
indenture. Such notice, if made, will only be made in accordance
with the applicable provisions of the indenture.
Denny's intends to finance the offer for the 12-3/4% Notes with
proceeds of a new senior secured credit facility comprising a
portion of the New Credit Facilities. The New Credit Facilities
are currently anticipated to include up to approximately $345
million of term loans, as well as provide a $75 million revolving
credit facility for Denny's working capital and general corporate
purposes. The New Credit Facilities would also repay amounts
outstanding under Denny's existing credit facility.
The obligation to accept for purchase and to pay for the 12-3/4%
Notes pursuant to the tender offer, as well as the effectiveness
of the Amendments to the indenture governing the 12-3/4% Notes,
are conditioned on, among other things, the closing of the New
First Lien Facility.
This press release shall not constitute an offer to purchase or
the solicitation of an offer to sell or a solicitation of consents
with respect to the notes. Each of the tender offers and consent
solicitations may only be made in accordance with the terms of and
subject to the conditions specified in the respective Offer to
Purchase and Consent Solicitation Statement, dated September 7,
2004, and the related Consent and Letter of Transmittal, which
more fully set forth the terms and conditions of the tender offer
and consent solicitation.
UBS Securities LLC and Goldman, Sachs & Co. are acting as the
exclusive dealer managers and solicitation agents; MacKenzie
Partners, Inc. is acting as the information agent; and U.S. Bank
National Association is acting as depositary in connection with
each tender offer and the consent solicitation. Copies of each
Offer to Purchase and Consent Solicitation Statement, Consent and
Letter of Transmittal, and other related documents may be obtained
from the information agent at:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York 10016,
Tel. No. 800-322-2885 (toll free)
212-929-5500 (collect)
Additional information concerning the terms of each Offer and
Consent Solicitation may be obtained by contacting UBS Securities
LLC at 888-722-9555, ext. 4210 (toll free) or 203-719-4210
(collect) or Goldman, Sachs & Co. at 877-686-5059 (toll free) or
212-357-5680 (collect).
Denny's is America's largest full-service family restaurant chain,
consisting of 553 company-owned units and 1,059 franchised and
licensed units, with operations in the United States, Canada,
Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. For further
information on Denny's, including news releases, links to SEC
filings and other financial information, please visit our website
at http://www.dennys.com/
DSTAR SUN PLAZA HOLDINGS, INC: Voluntary Chapter 11 Case Summary
----------------------------------------------------------------
Debtor: DSTAR Sun Plaza Holdings, Inc.
dba Copper Creek Apartments
13450 Maham Road
Dallas, Texas 75240
Bankruptcy Case No.: 04-39829
Type of Business: The Debtor owns apartments in Nevada.
Chapter 11 Petition Date: September 7, 2004
Court: Northern District of Texas (Dallas)
Debtor's Counsel: Weldon L. Moore, III, Esq.
Creel & Moore, L.L.P.
8235 Douglas Avenue, Suite 1100
Dallas, Texas 75225
Tel: (214) 378-8270
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest creditors.
EARTHMOVERS INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Earthmovers, Inc.
1802 Industrial Park Drive
Washington, Kansas 66968
Tel: (785) 325-3448
Bankruptcy Case No.: 04-42477
Type of Business: The Debtor specializes in the sales and
service of medium to heavy trucks.
Chapter 11 Petition Date: September 2, 2004
Court: District of Kansas (Topeka)
Judge: Janice Miller Karlin
Debtors' Counsel: Charles T. Engel, Esq.
John T. Houston, Esq.
Cosgrove Webb & Oman
534 South Kansas Avenue, Suite 1100
Topeka, Kansas 66603
Tel: (785) 235-9511
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Tim's Truck & Equipment $151,400
United Transmission Exchange $8,585
Chalmers Suspensions International, Inc. $6,100
The Hartford $4,332
Truck Wholesale $4,000
Fire Apparatus $3,700
GCR Topeka Truck Tire Center $3,476
Johnny's Welding Shop, Inc. $3,083
Snap On Tools $3,027
Central Office Service & Supply, Inc. $2,668
Rusty Eck Ford $2,592
High Plains Publishers, Inc. $2,316
Keystone Automotive Industries $2,299
Twin State Energy $2,167
Roberts Truck Center $1,960
Dura Guard, Inc. $1,726
Berkley Risk Administrators Company, Inc. $1,720
Orval Jueneman Dozer Service $1,658
Fastline Publications $1,643
Omaha Truck Center $1,605
ECKERD COLLEGE: Fitch Reviewing Financial Effect of Hurricane
-------------------------------------------------------------
Fitch Ratings will review, over the next 10 days, the financial
effect, if any, on three private universities that were
temporarily closed due to Hurricane/Tropical Depression Frances.
The substantial wind and rainfall occurred at the time that the
fall 2004 semester was to begin. Stetson University, rated 'A',
is located in DeLand. As reported on their web site, the campus
is without power but is expecting power to be restored in several
days. Eckerd College, rated 'BB', is located in St. Petersburg.
The college was closed until late today. Embry-Riddle
Aeronautical University, rated 'BBB+', is located in Daytona
Beach. The campus is expected to remain closed through Sept. 8.
The delay in openings is not expected to have a negative effect on
enrollment at any of the three universities.
Within the next 10 days, Fitch expects to know if any of the
physical facilities were severely damaged and how this may impact
the university's capital reserves.
Eckerd College is a private, coeducational, liberal arts college
in St. Petersburg, Florida. The college was founded in 1958 as
Florida Presbyterian College and changed its name to Eckerd
College in 1972. Today, the college has an enrollment of over
1,600 full time residential students with roughly 25% of its
student body coming from Florida. In addition, there are over
1,000 students in the college's adult education program, which is
known as the PEL program (Program for Experienced Learners).
EDUCATIONAL DEV'T: Case Summary & 9 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Educational Development Resources, Inc.
12420 Telecom Drive
Temple Terrace, Florida 33637
Bankruptcy Case No.: 04-17521
Type of Business: The Debtor runs a private school for infants
thru seventh grade.
Chapter 11 Petition Date: September 7, 2004
Court: Middle District of Florida (Tampa)
Debtor's Counsel: Buddy D. Ford, Esq.
Buddy D. Ford, P.A.
115 North MacDill Avenue
Tampa, Florida 33609
Tel: 813-877-4669
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 9 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
AmSouth Line of Credit $48,412
Sternbrook dba Servpro Services $45,322
SunTrust Commercial Credit Line of Credit $44,330
American Express Credit Card $19,943
MBNA America Credit Card $9,990
Michigan State Credit Card $9,778
MBNA America Credit Card $7,504
Advanta Platinum Credit Card $4,553
Wells Fargo Financial Lsg Leases Copier $817
ENRON: Institutional Investors Sue Citigroup for Bank Fraud
-----------------------------------------------------------
As widely reported, a group of 32 institutional investors
commenced a lawsuit against Citibank, N.A., Citigroup, Inc., and
Delta Energy Corporation in the Supreme Court of the State of New
York, alleging that Citibank designed and orchestrated a "massive
scheme of deception" to raise funds to make disguised loans to
Enron and its affiliates. Citibank used funds from the Investors'
trusts to reduce its own credit risk on Enron, prop up Enron, and
cover up Enron's failing financial conditions and generate
significant fees in the process.
The Investors are:
(1) Yosemite Securities Trust I,
(2) Yosemite Securities Company, Ltd.,
(3) Enron Credit Linked Notes Trust,
(4) Enron Credit Linked Notes Trust II,
(5) Enron Euro Credit Linked Notes Trust,
(6) Enron Sterling Credit Linked Notes Trust,
(7) AG ARB Partners, LP,
(8) AG Capital Funding Partners, LP,
(9) AG Capital Recovery Partners, LP,
(10) AG Capital Recovery Partners II, LP,
(11) AG Capital Recovery Partners III, LP,
(12) AG Capital Recovery Partners III, LP,
(13) AG CNG, LP,
(14) AG Eleven Partners, LP,
(15) AG MM, LP,
(16) AG Princess, LP,
(17) AG Super Advantage, LP,
(18) AG Super Fund, LP,
(19) AG Super Fund International Partners, LP,
(20) Appaloosa Investment LP, I,
(21) Commonfund Event-Driven Company,
(22) Davidson Kempner International, Ltd.,
(23) Davidson Kempner Institutional Partners, LP,
(24) Davidson Kempner Partners,
(25) Elliott International, LP,
(26) GAM Arbitrage Investments, Inc.,
(27) The Liverpool Limited Partnership,
(28) M.H. Davidson & Co.,
(29) Nutmeg Partners, LP,
(30) Palomino Fund Ltd.,
(31) PHS Bay Colony Fund, LP,
(32) and Serena Limited
Yosemite, Enron Credit Linked Notes, Enron Euro Credit Linked
Notes and Enron Sterling Credit Linked Notes Trusts bring their
claims by and through The Bank of New York, as Indenture Trustee
for the noteholders of the Trusts and Collateral Agent for each
of the Secured Parties of the Trusts.
As Citibank well knew, the Plaintiffs charge, Enron's rapid
growth during the 1990s was largely fictional. Enron's actual
operating cash flow was just a fraction of, and its actual debt
levels vastly higher than, the figures it reported publicly.
John B. Quinn, Esq., at Quinn Emanuel Urquhart Oliver & Hedges,
LLP, in Los Angeles, California, notes that since 1994, Citibank
extended Enron credit and helped Enron hide large amounts of
debts as cash flow from operations, through so-called "pre-pay"
transaction. The pre-pays -- in actuality loans -- were designed
to appear as normal commodity trading activity so that Enron
would not have to report them as loans on its financial
statements. However, the pre-pays lacks any of the
characteristics that would justify the accounting treatment Enron
applied to them.
By the late 1990s, Citibank found itself in a dilemma. Mr. Quinn
relates that Citibank had extended massive amounts of credit
through hidden loans to a company that it knew, based on inside
information, was in dire financial straits.
Mr. Quinn alleges that Citibank wanted to keep Enron afloat to
help conceal its prior involvement in Enron's fraud, but it also
wanted to limit its Enron credit exposure in the likely event
that Enron could not be kept afloat. Accordingly, beginning in
1999, Citibank attempted to resolve its dilemma by devising
transaction known as the "Yosemite Transactions."
Mr. Quinn explains that in the Yosemite Transactions, Citibank
and Delta Energy, a special purpose entity created and controlled
by Citibank, loaned $2,400,000,000 to Enron via additional sham
pre-pays. However, rather than use its own money, Citibank
raised the funds from the Trusts. Enron then used these newly
lent funds in part to repay pre-existing Citibank loans, so as to
reduce Citibank's prior Enron exposure. Citibank also shifted
the risk of the new loans to the Trusts by inducing them to enter
into "credit default swap" agreements, under which, in the event
of an Enron bankruptcy, Citibank could force the Trusts to give
up valuable investments in exchange for Citibank's claims against
Enron.
At the time, Citibank knew that the Trusts were getting far less
than they bargained for under the swaps because:
-- of the high likelihood of an Enron bankruptcy; and
-- the pre-pay related Enron claims that Citibank would be
delivering to the Trusts in the event of an Enron
bankruptcy would inevitably be challenged based on
Citibank's wrongdoing.
When Enron finally did collapse and file for bankruptcy, Citibank
did in fact failed to deliver the promised qualified claims.
The Investors seek a Court judgment for:
1. damages to the Investors and the Trusts due to fraud,
negligent misrepresentation, aiding and abetting fraud,
and constructive fraudulent conveyance, under the Credit
Default Swap Agreements, in an amount to be determined at
trial, but in no event less than the value of all funds
transferred to Citibank or Delta Energy, together with
interest accruing from the date of each Trust's transfer of
funds, plus consequential damages and punitive damages;
2. the rescission of the Credit Default Swaps, including
return to the Trusts of the assets transferred to Citibank
of Delta Energy in exchange for return to Citibank of the
non-Qualified Enron Claims now held by the Trusts due to
fraud and failure of consideration;
3. the recovery by the Trusts of the Trust Portfolios, or
their value that were assigned and delivered to Citibank
and Delta Energy;
4. damages to the Trusts in an amount to be determined at
trial, for breach of contract, fraud, negligent
misrepresentation, mutual mistake, conversion, breach of
Citibank's fiduciary duty as "Directing Party," unlawful
distribution and constructive fraudulent conveyance under
the Physical Settlements; and
5. the rescission of the Physical Settlements.
Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations. Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply. The Company filed for chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-
16033). Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. (Enron Bankruptcy News, Issue No. 123;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ENTERPRISE PRODS: Extends Gulfterra Tender Offers to Sept. 17
-------------------------------------------------------------
Enterprise Products Operating L.P., the principal operating
subsidiary of Enterprise Products Partners L.P. (NYSE:EPD) is
extending the Expiration Time of its four cash tender offers to
purchase any and all of the outstanding senior subordinated and
senior notes of GulfTerra Energy Partners, L.P. and GulfTerra
Energy Finance Corporation to 5:00 p.m. New York City time on
Sept. 17, 2004. The Purchase Price for each series of GulfTerra
notes will be determined at 2:00 p.m. New York City time on the
second business day preceding the Expiration Time.
The cash tender offers were initiated by Enterprise on Aug. 4,
2004, and included a solicitation of consents to proposed
amendments that would eliminate certain restrictive covenants and
default provisions contained in the indentures governing the
notes. Through Sept. 3, 2004, holders of approximately 99.3% of
the aggregate outstanding amount of all four series tendered their
notes, thereby consenting to the proposed amendments and
qualifying for the Consent Payment of $30 per $1,000 of notes.
This consent payment is in addition to the tender offer Purchase
Price offered by Enterprise for each series of notes.
GulfTerra has executed supplements to the indentures that affect
the proposed amendments. However, the supplements will become
effective only upon Enterprise's purchase of more than a majority
in principal amount of the outstanding GulfTerra notes. Enterprise
will purchase these notes promptly after the expiration time for
the tender offers, provided that the conditions to the tender
offers, including the completion of the merger between Enterprise
Products Partners L.P. and GulfTerra Energy Partners, L.P., have
been satisfied or waived.
Enterprise recently satisfied one of these conditions by entering
into a $2.25 billion acquisition credit facility, providing an
unsecured 364-day facility that will be available for interim
financing of certain transactions associated with the merger, the
refinancing of GulfTerra's existing secured credit facility and
term loans, and the purchase of all of the GulfTerra notes that
are tendered to Enterprise.
Enterprise's tender offers are contingent upon the completion of
the merger and therefore, the expiration time of the tender period
will be subsequent to the merger closing date. This extension was
made based on our current expectations of the earliest probable
closing date for the merger.
As previously reported, the Board of Directors of Enterprise
Products Partners L.P.'s general partner has approved an increase
in Enterprise's quarterly cash distribution rate to its limited
partners upon the completion of the merger with GulfTerra Energy
Partners, L.P.
The new rate will be at least $0.395 per common unit, or $1.58 per
common unit on an annual basis, effective with the third quarter
cash distribution which is payable in November 2004. This would be
a 6% increase from the current quarterly rate of $0.3725 per
common unit, or an annual rate of $1.49. The increase in the cash
distribution rate is contingent upon the closing of the merger
with GulfTerra and will be effective when the third quarter
distribution is declared by the Board of Directors of Enterprise's
general partner.
Enterprise expects the merger with GulfTerra to be completed this
month.
About Enterprise Products
Enterprise Products Partners, L.P., is the second largest publicly
traded midstream energy partnership with an enterprise value of
over $7 billion. Enterprise is a leading North American provider
of midstream energy services to producers and consumers of natural
gas and natural gas liquids. The Company's services include
natural gas transportation, processing and storage and NGL
fractionation (or separation), transportation, storage and
import/export terminaling.
* * *
As reported in the Troubled Company Reporter on May 20, 2004,
Standard & Poor's Rating Services lowered its corporate
credit ratings on Enterprise Products Partners, L.P., and
Enterprise Products Operating, L.P., to 'BB+' from 'BBB-' and
removed the ratings from CreditWatch with negative implications.
The outlook is stable.
The ratings were originally placed on CreditWatch on Dec. 15, 2003
as a result of the announcement of the merger between Enterprise
Products and GulfTerra Energy Partners L.P. (BB+/Watch Neg/--).
The rating action is based upon an assessment that the credit
rating on Enterprise Products will be 'BB+' whether or not the
proposed merger with GulfTerra takes place.
"On a stand-alone basis, Enterprise Products' creditworthiness has
deteriorated over the past year," said Standard & Poor's credit
analyst Peter Otersen.
FEDERAL-MOGUL: Committee Wants to Fix Asbestos PI Claims Bar Date
-----------------------------------------------------------------
The proposed plan of reorganization of Federal-Mogul Corporation
and its debtor-affiliates provides for the establishment of a
trust to be administered by the Official Committee of Asbestos
Personal Injury Claimants pursuant to certain Trust Distribution
Procedures. The TDP require claimants who are beneficiaries of
the trust to file claims before they receive a distribution.
Thus, the Plan Proponents acknowledge that claimants must file a
claim before they can recover.
However, the Official Committee of Asbestos Property Damage
Claimants complains, without a deadline for filing asbestos-
related personal injury claims in advance of confirmation of the
Plan, the Plan Proponents -- and especially, the Asbestos
Claimants Committee -- do not afford other parties-in-interest the
opportunity to review and assess the validity of current asbestos-
related PI Claims, individually or in the aggregate. The PD
Committee suspects that the Plan Proponents want the PI Claims
filed after plan confirmation and, therefore, out of the watchful
eye of the Court and the confirmation process.
The PD Committee also notes that the Proposed Plan assumes the
presence of more than $11 billion of allowed PI Claims against the
Debtors' estates. The assumption is more than five times the
amount estimated by the Debtors before the Petition Date. To
confirm the Proposed Plan, the Court must determine that each
impaired rejecting class of claims is not being unfairly
discriminated against and is being treated fairly and equitably by
the Plan.
The PD Committee, however, points out that such a finding is
impossible without a reasonable estimation of the aggregate
asbestos personal injury claims. To allow the Plan Proponents to
assign an aggregate value to PI Claims is not acceptable. Only a
bar date process can produce the data necessary to make a proper
determination of whether the Proposed Plan, and the recoveries
presented by it, will not unfairly discriminate.
The PD Committee maintains that a bar date will serve to confirm
whether the Proposed Plan satisfies the "best interest" test under
Section 1129(a)(7) of the Bankruptcy Code. Moreover, the
establishment of a bar date is not optional. Rule 3003(c)(2) of
the Federal Rules of Bankruptcy Procedure requires, inter alia,
that proofs of claim be filed by all creditors whose claims are
"not scheduled or scheduled as disputed, contingent, or
unliquidated." Rule 3003(c)(3) provides that "[t]he court shall
fix and for cause shown may extend the time within which proofs of
claim or interests may be filed." Rule 3003(c)(3) directs courts
to establish bar dates in Chapter 11 cases.
The establishment of a bar date will also provide necessary
transparency to bankruptcy cases. All parties-in-interest,
including creditors, will have the opportunity to evaluate the
extent of the PI Claims asserted and to object to improper claims.
The PD Committee asks the U.S. Bankruptcy Court for the District
of Delaware to:
(a) fix December 1, 2004, as the final date for filing
PI Claims;
(b) approve the forms of notice; and
(c) approve the proposed procedures for providing notice of
the PI Claims Bar Date.
Proof of Claim Form
The Asbestos Personal Injury Claim Form is designed to elicit
necessary information for the classification and resolution of PI
Claims. The PI Claim Form is modeled on Official Bankruptcy Form
No. 10. It is designed to ensure that PI Claimants provide
necessary information relating to their claims in a way as to
allow all parties to determine the nature, extent, and validity of
the claims being asserted. The Form asks for the nature, type,
and degree of asbestos-related injury from which a claimant is
allegedly suffering and the purported source of injury.
The persons or entities not required to file a proof of claim are:
(a) Any person or entity that has already properly filed, with
the Clerk of the United States Bankruptcy Court for the
District of Delaware, a proof of claim against the
Debtors, utilizing a claim form which substantially
conforms to the Proof of Claim or Official Form No. 10;
(b) Any person or entity:
(i) whose claim is listed on the Debtors' Schedules;
(ii) whose claim is not described as "disputed,"
"contingent," or "unliquidated;" and
(iii) who does not dispute the amount or nature of the
claim for the person or entity in the Debtors'
Schedules;
(c) Any person having a claim under Section 507(a) of the
Bankruptcy Code as an administrative expense of the
Debtors' Chapter 11 cases;
(d) Any person or entity whose claim has been paid;
(e) Any person or entity that holds a claim that has been
allowed by a Court order entered on or before the Bar
Date; and
(f) Any person who does not hold a PI Claim.
PI Claimants are required to complete an Asbestos Personal Injury
Proof of Claim Form to be treated as a creditor with respect to
the claim for purposes of distribution. PI Claimants that fail to
file a proof of claim by the PI Claims Bar Date will be forever
barred, estopped, and enjoined from asserting the claim against
the Debtors' estates.
Notice of the Bar Date
Pursuant to Rule 2002(a)(7) of the Federal Rules of Bankruptcy
Procedure, a notice of the PI Claims Bar Date and an Asbestos
Personal Injury Claim Form will be mailed to:
(1) the Debtors and their counsel;
(2) the Office of the U.S. Trustee for Region 3;
(3) each member of the Asbestos Claimants Committee;
(4) the attorneys of all known Current Asbestos Claimants,
including those that may be listed on the Debtors'
Schedules and those that have already filed proofs of
claim at their stated addresses;
(5) the District Director of Internal Revenue for the
District of Delaware;
(6) the Securities and Exchange Commission;
(7) the Legal Representative of Future Asbestos Claimants; and
(8) all persons and entities requesting notice pursuant to
Rule 2002.
The PI Claims Bar Date Notice will notify the affected parties of
the Bar Date and will contain instructions regarding who must file
a PI Claim, the procedure for filing a PI Claim, and the
consequences of failure to timely file a PI Claim.
The PD Committee proposes that the PI Claims Bar Date Notice be
published on two separate occasions more than 45 days before the
Bar Date in:
* The Wall Street Journal,
* The New York Times, including the Sunday edition,
* the national edition of USA Today,
* London Times, and
* Law Journal.
The Garden City Group, Inc., will serve as Claims Agent. To
facilitate and coordinate the claims reconciliation and Bar Date
Notice functions, the PD Committee proposes that the Asbestos
Personal Injury Claim Form be mailed by the Claims Agent together
with the Bar Date Notice.
The PD Committee also asks the Court to direct that:
-- facsimile transmissions of the PI Claims will not be
accepted by the Claims Agent; and
-- each proof of claim form be written in the English
language and be denominated in lawful U.S. currency as of
the Petition Date.
Deferment of Plan Confirmation
The PD Committee tells the Court that the Bar Date process will be
extensive and time-consuming. The PI Claims will have to be
reviewed, assessed, and processed, which will take time. This is
entirely necessary because without a bar date and a concomitant
review of the PI Claims, the Court will be unable to determine
whether the recoveries under the Proposed Plan are fair and
equitable.
The PD Committee estimates that the process may take several
months. Accordingly, PD Committee asks the Court to defer and
adjourn the Confirmation Hearing for three months. The PD
Committee also asks the Court to adjourn the deadline for filing
objections to the Proposed Plan to 30 days before the Confirmation
Hearing.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion. The Company filed for chapter 11 protection on Oct.
1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan, Esq.,
James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin
Brown & Wood and Laura Davis Jones, Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
its creditors, they listed $10.15 billion in assets and $8.86
billion in liabilities. (Federal-Mogul Bankruptcy News, Issue No.
63; Bankruptcy Creditors' Service, Inc., 215/945-7000)
FOSTER WHEELER: Subsidiary Wins Russian Engineering Services Pact
-----------------------------------------------------------------
Foster Wheeler Energy Limited, a UK subsidiary of Foster Wheeler
Ltd. (OTCBB: FWLRF), has been awarded an engineering contract by
OAO Salavatnefteorgsintez (SNOS) for a multi-million dollar
fluidized catalytic cracking (FCC) complex to be built at the
Salavat Refinery, Salavat City, Russia.
The terms of the contract were not disclosed. The booking was
included in the second quarter.
"We are delighted to be awarded this contract by SNOS," said Steve
Davies, chairman and chief executive officer, Foster Wheeler
Energy Limited. "We are well-known for our unrivalled FCC design
and construction experience. I am confident that with our track
record, our Russian experience, the quality of our team and our
engineering, we will fully support SNOS in achieving its business
objectives. The Russian market is of strategic importance to
Foster Wheeler, and we will be building on existing relationships
with Russian engineering companies to ensure maximum value is
offered to SNOS."
Foster Wheeler will provide the first stage of design services,
involving general co-ordination of licensors, a project cost
estimate, advice on Russian design requirements, development of
the required Russian permitting documentation, and initial
detailed engineering and procurement to support an accelerated
overall project schedule. Russian engineering companies well known
to Foster Wheeler will provide specific expertise and support
during project execution.
The catalytic cracking complex will produce high-value gasoline
and liquefied petroleum gas and will comprise a fluidized
catalytic cracker, gasoline hydrotreater, associated gas treatment
units, and a dedicated flare. Vacuum gas oil will be supplied as
feedstock from the existing refinery.
Shell will provide licensed technology for the fluidized catalytic
cracker, Merichem and Belco for the treatment units, and Axens for
the gasoline hydrotreater.
About the Company
Foster Wheeler, Ltd., is a global company offering, through its
subsidiaries, a broad range of design, engineering, construction,
manufacturing, project development and management, research,
plant operation and environmental services.
At June 25, 2004, Foster Wheeler Ltd.'s balance sheet showed an
$856,601,000 stockholders' deficit, compared to an $872,440,000
deficit at December 26, 2003.
FRANK'S NURSERY: Files Chapter 22 Petition in S.D. New York
-----------------------------------------------------------
Frank's Nursery & Crafts, Inc. (OTC:FNCN) filed for Chapter 11
bankruptcy protection in the Bankruptcy Court for the Southern
District of New York. The Company intends to conduct an orderly
liquidation of its assets for the benefit of all of its creditors.
Since the Company's predecessor emerged from a prior Chapter 11
bankruptcy proceeding in May 2002, the Company has worked
diligently in an attempt to return its operations to
profitability. However, due to a general weakness in economic
conditions, a steady decline in customer traffic and unfavorable
weather patterns causing a decline in all markets, the Company has
sustained significant losses from operations.
Despite its efforts to maintain a core group of its retail
locations as a going concern, the Company ultimately concluded
that it did not have sufficient financing to continue operating
such locations.
The Company has entered into a $27.5 million debtor-in-possession
financing facility with Kimco Capital Corporation which will
provide it with liquidity sufficient to dispose of its assets in
an efficient manner. Upon approval of the Bankruptcy Court, the
Company will begin conducting going-out-of-business sales at each
of its 169 retail locations and will sell its real property and
leasehold interests.
In its latest Form 10-Q for the quarterly period ended May 16,
2004, Frank's balance sheet showed a $15,831,000
stockholders' deficit, compared to a $10,803,000 of positive
equity at May 18, 2003.
Headquartered in Troy, Michigan, Frank's Nursery & Crafts, Inc. --
http://www.franks.com/-- specializes in nursery products, lawn
and garden hardlines, floral decor, custom bows & floral
arrangements, and Christmas merchandise. Frank's and its parent
company, FNC Holdings, Inc., each filed a voluntary chapter 11
petition in the U.S. Bankruptcy Court for the District of Maryland
on February 19, 2001. The companies emerged under a confirmed
chapter 11 plan in May 2002. Frank's filed another chapter 11
petition on September 8, 2004 (Bankr. S.D.N.Y. Case No. 04-
15826). In the company's second bankruptcy filing, it lists
$123,829,000 in total assets and $140,460,000 in total debts.
FRANK'S NURSERY: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Frank's Nursery & Crafts, Inc.
580 Kirts Boulevard
Suite 300
Troy, Michigan 48084
Bankruptcy Case No.: 04-15826
Type of Business: The Debtor specializes in nursery products,
lawn and garden hardlines, floral d,cor,
custom bows & floral arrangements, and
Christmas merchandise.
See http://www.franks.com/
Chapter 11 Petition Date: September 8, 2004
Court: Southern District of New York (Manhattan)
Judge: Prudence Carter Beatty
Debtor's Counsels: Alan Barry Hyman, Esq.
Jeffrey W. Levitan, Esq.
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Tel: (212) 969-3275
Total Assets: $123,829,000
Total Debts: $140,460,000
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Keen Limited Trade $871,038
Avn Xian Xing Hai S/N Edf.Zhu
Kuan C.C.
7 and (C) Macau
Monrovia Growers Trade $787,724
PO Box 406964
Atlanta, Georgia 30384-6964
Santa's Best Limited Trade $611,620
PO Box 5011
1701 Eden Road
Millville, New Jersey 08332
Boven's Quality Plants Trade $607,784
8450 East H Avenue
Kalamazoo, Michigan 49048
Zelenka Evergreen Nursery Trade $548,338
16127 Winans Street
Grand Haven, Michigan 49417
Buckeye Nutrition Trade $493,699
330 East Schultz
Dalton, Ohio 44618
Greenleaf Nursery Co. Trade $487,832
28406 Highway 8
Park Hill, Oklahoma 74451-9500
Lebanon Seaboard Seed Corp. Trade $452,872
1600 East Cumberland Street
Lebanon, Pennsylvania 17042
Lake Valley Seed Inc. Trade $423,339
5717 Arapahoe
Boulder, Colorado 80303-1338
National Tree Co. Trade $423,001
2 Commerce Drive
Cranford, New Jersey 07016
Frank Smith & Sons Trade $395,590
876 Indian Trails Road
Carleton, Michigan 48117-0000
Kurt Weiss Greenhouses, Inc. Trade $384,109
95 Main Street
Center Moriches, New York 11934
Gemmy Industries Trade $345,552
117 Wrangler
Coppell, Texas 75019
Ferry-Morse Seed Co. Trade $326,459
600 Stephen Beale Drive
Fulton, Kentucky 42041-0488
A and B Hongda Group, Inc. Trade $284,669
9520 Santa Ana Avenue
Rancho Cucamonga, California 91730
The Handmade Bow Co. Trade $283,953
92 Blandin Avenue, Suite 14
Framingham, Massachusetts 01702
Cara Nurseries Trade $278,209
2060 Linden Boulevard
Elmont, New York 11004
American Oak Preserving Co. Inc. $277,205
601 Mulberry Street
PO Box 187
North Judson, Indiana 46366
Celebrity, Inc. Trade $274,809
PO Box 6666
Tyler, Texas 75711
Ernst Nursery & Farms, LLC Trade $270,203
6180 Gearin Road North East
PO Box 460
Saint Paul, Oregon 97137
FREMONT INVESTMENT: Moody's Places Ba2 Rating on Class B Certs.
---------------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by the ACE Securities Corp. Home Equity Loan
Trust, Series 2004-FM2, and ratings ranging from Aa2 to Ba2 to the
subordinate certificates in the deal.
The securitization is backed by Fremont Investment & Loan loans of
which 81.86% are adjustable-rate and 18.14% are fixed-rate
subprime mortgage loans acquired by DB Structured Products, Inc.
The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination,
overcollateralization -- OC, and excess spread.
Litton Loan Servicing LP will service the loans. Moody's has
assigned its highest servicer quality rating -- SQ1 -- to Litton
as a primary servicer of subprime loans.
The complete rating actions are:
Ace Securities Corp. Home Equity Loan Trust, Series 2004-FM2
* Class A-1A, rated Aaa;
* Class A-1B, rated Aaa;
* Class A-2A, rated Aaa;
* Class A-2B, rated Aaa;
* Class A-2C, rated Aaa;
* Class M-1, rated Aa2;
* Class M-2, rated A2;
* Class M-3, rated A3;
* Class M-4, rated Baa1;
* Class M-5, rated Baa2;
* Class M-6, rated Baa3; and
* Class B, rated Ba2.
FRIEDMAN'S INC: Completes Restructuring of Sr. Secured Bank Loan
----------------------------------------------------------------
Friedman's Inc. (OTC: FRDM.PK) has completed the restructuring of
its senior secured credit facility and has obtained the approval
of its lenders and an informal vendor committee of a secured trade
credit program which was released for subscription to individual
vendors on Tuesday, Sept. 7.
Friedman's and its existing lenders have entered into a definitive
amended and restated credit agreement which replaces Friedman's
existing senior credit facility, and provides for total
commitments of up to $135 million. As finally agreed to, the
facility consists of a senior revolving loan of up to $67.5
million and a $67.5 million junior term loan.
Under the restructured agreement, the senior revolving loan
matures on December 15, 2006 and the junior term loan matures on
August 31, 2007. In connection with the closing, Friedman's issued
warrants to Farallon Capital Management, L.L.C., an affiliate of
one of the lenders under the facility, which, among other things,
entitle Farallon to acquire, for a five-year term, up to three
million shares of Friedman's Class A Common Stock at a price of
$1.75 per share. Farallon would also receive additional warrants
to acquire one million shares of Class A Common Stock should the
junior term loan remain outstanding after approximately one year
following the closing of the restructured credit facility.
Under the Company's secured trade credit program, participating
vendors will be granted a lien in the same assets as, but junior
to, the liens which secure the obligations under the restructured
senior secured credit facility. Subject to the terms of the
secured trade credit program, the vendor lien would generally
secure amounts past due to participating vendors as of July 31,
2004 (which would be repaid over a fifteen month period ending on
December 31, 2005) and amounts due for new shipments (which would
be paid in the ordinary course of business) from participating
vendors which are delivered by the earlier of the duration of a
vendor's participation in the trade credit program or December 31,
2005. The Company has agreed that up to $9.5 million of
availability under its secured credit facility will be reserved
pending the receipt of vendor agreements under the secured trade
credit program totaling up to $15 million in obligations owed by
Friedman's as of July 31, 2004.
Mr. Sam Cusano, Friedman's CEO, said, "We are extremely pleased to
announce the completion of the refinancing of our secured credit
facility. This achievement is a critical success for Friedman's,
of which we are extremely proud. We appreciate the continued
support and commitment of our financial partners, vendors and
other important constituencies." Mr. Cusano added, "The support of
our vendor community has made this first step in our financial
restructuring a success and we look forward to the participation
of our key vendors in the new secured trade credit program. As we
move forward with our preparations for the upcoming holiday sales
season, the availability of new capital has provided Friedman's
with the liquidity to implement both our holiday sales plan and
our strategic plan for the foreseeable future. With an improved
balance sheet we remain focused on returning Friedman's to
financial health."
Friedman's believes that the restructured senior secured credit
facility, together with appropriate vendor support, should provide
adequate liquidity to obtain inventory required for Friedman's
holiday season sales plan and to move forward with Friedman's
overall restructuring program. The extent to which the Company
will be able to draw upon the full amount of availability under
the senior revolving loan will depend upon, among other things,
the Company's ability to enter into individual vendor agreements
as part of its secured trade credit program. The Company said that
it will file on Current Report on Form 8-K copies of the senior
secured credit facility, the Farallon warrant agreement and
documents relating to the Company's secured trade credit program
with the Securities and Exchange Commission on or prior to
September 13, 2004.
About Friedman's
Founded in 1920, Friedman's Inc. is a leading specialty retailer
based in Savannah, Georgia. The Company is the leading operator of
fine jewelry stores located in power strip centers and regional
malls. For more information, go to: http://www.friedmans.com/
* * *
As reported in Troubled Company Reporter's January 2, 2003
edition, the Company was notified by its lenders that it is in
default under certain provisions of its credit agreement. The
Company's lenders continue to provide the Company with the
benefits of its credit agreement, with certain limited
exceptions, although they have the right to terminate their
support at any time.
The company's most recently published balance sheet -- dated
June 28, 2003 -- shows $496 million in assets and $190 million in
liabilities. The Company explains that its year-end closing
process was delayed because of an investigation by the Department
of Justice, a related informal inquiry by the Securities and
Exchange Commission, and its Audit Committee's investigation into
allegations asserted in a August 13, 2003, lawsuit filed by
Capital Factors Inc., a former factor of Cosmopolitan Gem
Corporation, a former vendor of Friedman's, as well as other
matters. Ernst & Young has been working on a restatement of the
company's financials. The company's signaled that a 17% or
greater increase to allowances for accounts receivable can be
expected.
Also, Friedman's Inc. has been notified that the New York Stock
Exchange (NYSE) has made a determination to delist the company's
Class A Common Stock that traded under the ticker symbol FRM on
the NYSE effective May 11, 2004. Friedman's is evaluating an
appeal of the decision of the NYSE.
The Company noted that while it is disappointed with the NYSE's
decision, the delisting from the Exchange does not affect
Friedman's day-to-day business operations. The Company also
noted that although its common stock is not eligible for trading
on the NASD over-the-counter bulletin board (OTC), the Company
understands that market makers have independently begun to make
market in the company's common stock on the Pink Sheets under
the symbol "FRDM."
GRUPO TMM: Gets S&P's Junk Credit Rating After Debt Restructuring
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on Grupo TMM S.A. to 'CCC' from 'D', reflecting the
company's completion of a debt restructure. The outlook is
stable.
"The rating on the company reflects its still-weak financial
profile, higher concentration in the railroad industry, low
liquidity, and minor cash-flow generation," said Standard & Poor's
credit analyst Juan P. Becerra.
TMM completed its exchange offer for its 9.5% notes due 2003 and
its 10.25% senior notes due 2006. The company issued new senior
secured notes due 2007 in exchange for the tendered 2003 notes and
2006 notes. Standard & Poor's considers that the new debt profile
amortization schedule allows a little more financial breathing
room, allowing the company to focus on operational improvements.
TMM's revenues and operating income are concentrated in the
railroad sector. During the first six months of 2004, the
contribution of this division to TMM's revenues and operating
income decreased to 74.9% and 85.7% from 75.6% and 91.0%,
respectively. Nevertheless, TMM cannot access any cash from the
railroad division or declare a dividend to upstream cash.
The stable outlook reflects TMM's debt restructure completion.
The rating could be raised if TMM's operations improve its current
cash-flow generation. On the other hand, the rating could be
lowered if TMM's cash-flow generation turns negative in two
consecutive quarters.
HANGER ORTHOPEDIC: Loan Amendment Resolves Covenant Violations
--------------------------------------------------------------
Hanger Orthopedic Group, Inc. (NYSE: HGR) reported the Amendment
to the Credit Agreement governing its Revolving Credit Facility
and Term Loan B. The amendment was approved by over 80% of the
holders of the facilities, effectively eliminates the covenant
violation reported in the Company's Form 10-Q for the quarter
ended June 30, 2004, and restores full access to the revolving
credit facility.
The Company received majority consent from its syndicate of
lenders to modify the existing credit agreement. The modifications
include:
(i) higher total leverage ratio limitation,
(ii) higher senior secured leverage ratio limitation,
(iii) lower interest coverage ratio limitation,
(iv) lower fixed charge coverage ratio limitation, and
(v) a reduction of permitted acquisitions and capital
expenditures.
A copy of the full amendment will be filed as an exhibit to a Form
8-K filing which is expected to be filed later this week.
Headquartered in Bethesda, Maryland, Hanger Orthopedic Group, Inc.
is the world's premier provider of orthotic and prosthetic
patient-care services. Hanger is the market leader in the United
States, owning and operating 614 patient-care centers in 44 states
and the District of Columbia, with 3,385 employees including 1,016
practitioners as of June 30, 2004. Hanger is organized into four
business segments. The two key operating units are patient-care
which consists of nationwide orthotic and prosthetic practice
centers and distribution which consists of distribution centers
managing the supply chain of orthotic and prosthetic componentry
to Hanger and third party patient-care centers. The third is
Linkia which is the first and only managed care organization for
the orthotics and prosthetics industry. The fourth segment is
Innovative Neutronics which introduces emerging neuromuscular
technologies developed through independent research in a
collaborative effort with industry suppliers worldwide.
* * *
As reported in the Troubled Company Reporter on September 3, 2004,
Moody's Investors Service downgraded the ratings of Hanger
Orthopedic Group, Inc., and changed the outlook to negative.
Moody's downgraded the company's ratings as a result of the
continued deterioration in performance. The particularly weak
results for the second quarter ended June 30, 2004 caused the
company to violate the total leverage covenant under its bank
credit facilities. The company has obtained a waiver and is in
the process of amending the credit facilities. The one notch
downgrade on all the ratings assumes Hanger will be successful in
negotiating the amendment. These ratings were affected:
* $100 Million Revolver due 2007 -- downgraded to B2 from B1;
* $150 Million Term Loan B due 2009 -- downgraded to B2 from
B1;
* $200 Million 10.375% Senior Notes due 2009 -- downgraded to
B3 from B2;
* $53 Million (accreted value) 7% Redeemable Preferred Stock
due 2010 -- downgraded to Caa2 from Caa1;
* Senior Implied Rating -- downgraded to B2 from B1;
* Senior Unsecured Issuer Rating -- downgraded to Caa1 from B3;
The outlook for the company is negative.
The ratings reflect:
* the deterioration in performance,
* the company's high leverage,
* the company's high reliance on government funds and
Medicare's recent decision to freeze rates for three years,
* pricing pressure from large commercial payors,
* a competitive environment, and
* weakening industry utilization and growth trends.
Moody's concerns over these issues are compounded by the number of
other problems that have arisen at the company recently, including
billing discrepancies at the West Hempstead center and the
accounting error related to uncollectible receivables recently
uncovered.
Credit strengths recognized include:
* the company's dominant market position and competitive
advantages including the ability to obtain greater purchase
discounts,
* national contracting capability and access to new technology,
* the company's conservative operations-focused strategy and
minimal reliance on acquisitions,
* the geographic diversification of revenues through over 600
patient care centers, and
* positive long term demographics and industry growth trends.
Moody's also took into consideration the potential for significant
sales and EBITDA growth in 2005 related to the company's Linkia
subsidiary.
The negative outlook reflects the risk that near-term fundamentals
for the industry may remain weak and may lead to a continued
decline in performance for a longer period that the company is
predicting. The negative outlook also incorporates Moody's
concern that the projected turnaround in Hanger's performance
depends highly on the company's ability to grow a new business.
There is considerable uncertainty over whether the company will be
able to sign up additional contracts (at reasonable prices) and
generate the profitability and cash flow anticipated.
If Hanger is unsuccessful in starting up Linkia and other sales
initiatives fail to generate improved same store growth, Moody's
may consider further downgrading the company's ratings. Moody's
notes that while certain targeted near-term expense reductions may
boost profitability, such measures can only temporarily boost
performance and thus may not prevent a downgrade.
HEALTHSOUTH CORP: Names John Workman Chief Financial Officer
------------------------------------------------------------
HealthSouth Corp. (OTC Pink Sheets: HLSH) appointed John Workman,
53, to the position of Executive Vice President and Chief
Financial Officer, effective September 20, 2004. Mr. Workman, who
brings extensive senior financial experience to the position, will
be responsible for the financial operations of the company.
"We are delighted to welcome John as HealthSouth's new Chief
Financial Officer," said Jay Grinney, HealthSouth President and
Chief Executive Officer. "He is an experienced CFO with a proven
history of strong leadership. Throughout his career, he has
exemplified a principled leadership style, with a focus on
operational success and financial controls. I am confident that he
will be a strong addition to our executive management team."
Most recently, Mr. Workman served as CEO of U.S. Can Company, the
country's leading manufacturer of aerosol and general line cans
with $837 million in revenues. During his six-year tenure with the
company, he also served as CFO while the company was traded on the
New York Stock Exchange. Workman and the company's management team
significantly improved results and were able to de-leverage the
company in 1998-1999, allowing for a successful leveraged buyout
in 2000, which returned a significant premium to the shareholders.
Mr. Workman also spent more than 14 years with Montgomery Ward &
Company, Inc., a $7 billion retailer with more than 400 stores,
serving in many capacities in the financial department, including
Chief Financial Officer, then serving as Executive Vice President
and Chief Restructuring Officer. In these roles, he was
responsible for overseeing all financial functions of the company,
negotiating with creditors, and designing and implementing the
company's restructuring plans. Mr. Workman began his career in
public accounting, advancing to the level of partner with the
public accounting firm KPMG.
"I am excited about the opportunity to work with Jay and the
entire HealthSouth management team," Mr. Workman said. "My goal is
to build on the progress made in the past year and a half and
develop a financial department with appropriate control processes
and resources, both of which are necessary in today's highly
regulated financial environment. By putting the right systems in
place and providing our financial employees with information and
training, HealthSouth's financial department will be able to
support the company's operations team in their goals and provide
value for shareholders."
A certified public accountant, Mr. Workman has a bachelor's degree
in accounting from Indiana University and earned his MBA from the
University of Chicago.
Mr. Workman will replace Guy Sansone, a managing director with the
turnaround firm Alvarez & Marsal. Sansone has served as acting CFO
since March 2003 and will transition out of the position over the
next couple of months.
"Guy has done a tremendous job over the past 18 months in leading
our financial department through a very difficult turnaround," Mr.
Grinney said. "We appreciate his commitment to work with John
through the transition."
About HealthSouth
HealthSouth employs approximately 3,500 people in Birmingham and
is the nation's largest provider of outpatient surgery,
diagnostic imaging and rehabilitative healthcare services,
operating facilities nationwide and abroad. HealthSouth can be
found on the Web at http://www.healthsouth.com/
* * *
As reported in the Troubled Company Reporter on July 5, 2004,
HealthSouth Corporation (OTC Pink Sheets: HLSH) announced that it
will permanently close HealthSouth Metro West Hospital effective
midnight September 2, 2004. The Company says its efforts to
recruit and retain the physicians necessary to make the hospital
profitable have been unsuccessful and that the facility continues
to lose in excess of $500,000 every month.
The hospital employs approximately 500 full-time, part-time and
pool employees. Eligible employees will receive severance
packages in accordance with HealthSouth policy. In addition,
HealthSouth will offer resume workshops, internal and external job
fairs and opportunities with local employment agencies to assist
employees in finding new positions in the Birmingham area. The
Company will also network with other employers in the Birmingham
area to solicit job availabilities.
"This was a very difficult decision for us to make," said
HealthSouth Metro West CEO Don Lilly. "Over the past four and a
half years we have all worked diligently to turn the hospital
around and have invested millions of dollars in the facility.
Unfortunately we have been unsuccessful in making the hospital
financially viable. Our primary focus at this point is to help
our employees find new positions and to ensure a smooth transition
for our patients and physicians."
The company acknowledges certain obligations to the City of
Fairfield Healthcare Authority and intends to work with the
Authority to fulfill those commitments. In addition, the Company
will work to procure an appropriate buyer for the hospital
buildings and will maintain Metro West's physical plant until an
appropriate use for the property is determined.
Notice is being provided to appropriate employees, health
providers and local government agencies in accordance with
provisions of the Worker Adjustment and Retraining Notification
Act (29 U.S.C.A. Sections 2101 et seq.). In addition, the Company
will be notifying the appropriate parties in regards to the
closing of the hospital's emergency department, which will be
effective on July 31, 2004.
HORIZON PCS: June 30 Balance Sheet Upside-Down by $579 Million
--------------------------------------------------------------
Horizon PCS, Inc., a PCS affiliate of Sprint (NYSE:FON), reported
financial results for the second quarter and six months ended June
30, 2004. Highlights for the quarter included:
-- Adjusted EBITDA was $7.8 million and $10.4 million for the
three and six months ended June 30, 2004 respectively,
including $(.8) million and $(3.2) million negative EBITDA
for the three and six months ended June 30, 2004 from the
NTELOS operations.
-- For the three and six months ended June 30, 2004, roaming
revenue from the Company's portion of the Sprint PCS network
was $18.3 million and $34.6 million, respectively. For the
quarter ended June 30, 2004, roaming revenue consisted of
$14.1 million of Sprint revenue, $1.9 million of wholesale
revenue, and $2.3 million of other revenue. Roaming revenue
for the six months ended June 30, 2004, consisted of $27.0
million of Sprint revenue, $3.3 million of wholesale
revenue, and $4.3 million of other revenue.
-- As of June 30, 2004, 80% of the Company's subscriber base
was prime credit class and the remaining 20% was sub-prime
credit class. Of the sub-prime base, 63% provided a deposit.
Of the total gross adds in the second quarter of 2004, 82%
were prime credit class subscribers. As of June 30, 2004,
69% of the Company's subscriber base was on contracts.
-- Cost per gross add (CPGA) was $391 for the second quarter
and $356 for the year to date.
At the end of the second quarter, Horizon had cash, cash
equivalents and marketable securities of approximately $66.0
million, which excludes $12.0 million in restricted cash and funds
held in escrow. Capital expenditures were approximately $800,000
for the second quarter and $1.3 million for the year-to-date
period.
As recently reported, on July 19, 2004, Horizon PCS Escrow
Company, a recently formed, wholly owned, indirect subsidiary of
Horizon PCS, Inc., completed an offering of $125 million aggregate
principal amount of 11-3/8% senior notes due 2012. Upon
confirmation and effectiveness of Horizon PCS, Inc.'s plan of
reorganization under Chapter 11 of the Bankruptcy Code, Horizon
PCS Escrow Company will be merged with and into Horizon PCS, Inc.,
the net proceeds of the offering will be released from escrow, and
Horizon PCS, Inc. will then be an obligor under the notes. Under
the plan of reorganization, Horizon expects to use the net
proceeds from the sale of the notes to repay in full the
obligations under the senior secured credit facility. Horizon has
filed a disclosure statement with the bankruptcy court which
outlines its plan of reorganization.
Bill McKell, chairman and CEO of Horizon PCS, said, "We are
pleased with the actions taken and the results achieved in the
second quarter of 2004. We completed our refinancing, completed
the sale of a portion of our markets to Sprint, and settled our
litigation with Sprint. We are looking forward to emerging from
bankruptcy in September and focusing on our future operations."
About Sprint
Sprint is a global integrated communications provider serving more
than 26 million customers in over 100 countries. With more than
$26 billion in annual revenues in 2003, Sprint is widely
recognized for developing, engineering and deploying state-of-the-
art network technologies, including the United States' first
nationwide all-digital, fiber-optic network and an award-winning
Tier 1 Internet backbone. Sprint provides local communications
services in 39 states and the District of Columbia and operates
the largest 100-percent digital, nationwide PCS wireless network
in the United States. For more information, visit
http://www.sprint.com/
About Horizon PCS
Horizon PCS is a PCS Affiliate of Sprint, with the exclusive right
to market Sprint wireless mobility communications network products
and services to a total population of approximately 7.5 million in
portions of 11 contiguous states. Its markets are located between
Sprint's Chicago, New York and Knoxville markets and connect or
are adjacent to 12 major Sprint markets. As a PCS Affiliate of
Sprint, Horizon markets wireless mobile communications network
products and services under the Sprint and Sprint PCS brand names.
At June 30, 2004, Horizon PCS, Inc.'s balance sheet showed a
$579,351,721 stockholders' deficit, compared to a $596,999,529
deficit at December 31, 2003.
INTEGRATED ELECTRICAL: Gets Default Notice for $62.9 Million Debt
-----------------------------------------------------------------
Integrated Electrical Services, Inc. (NYSE: IES) has received
notice of default from the trustee for a series of its senior
subordinated notes under an indenture dated January 28, 1999, with
CUSIP number 45811EAB9 totaling $62.9 million that a default has
occurred because IES failed to file its fiscal 2004 Third Quarter
Report on Form 10-Q with the Securities and Exchange Commission.
The company announced on September 2, 2004 that it had received
notice of default from the trustee for a different series of its
senior subordinated notes under an indenture dated May 29, 2001,
with CUSIP number 45811EAE3 totaling $110.0 million. Both series
of these bonds total $172.9 million and share substantially the
same terms. IES has 30 days to obtain a waiver from a majority in
interest of its subordinated note holders to resolve the default,
and IES is in the process of seeking those waivers.
The company currently anticipates that its delayed Third Quarter
Report on Form 10-Q will be filed concurrently with the filing of
its year-end financial statements.
Integrated Electrical Services, Inc. is the leading national
provider of electrical solutions to the commercial and industrial,
residential and service markets. The company offers electrical
system design and installation, contract maintenance and service
to large and small customers, including general contractors,
developers and corporations of all sizes.
* * *
As reported in the Troubled Company Reporter on Sept. 7, 2004,
Moody's Investors Service has placed the ratings of Integrated
Electrical Services, Inc., on review for possible downgrade
following the announcement that it had received notice from the
trustee on its senior subordinated notes that a default had
occurred because the company had failed to file its fiscal 2004
third quarter 10-Q in a timely fashion. This default notice will
require the company to obtain waivers from 51% of the holders of
its senior sub debt within the next 30 days in order to cure (at
least temporarily) the default. Since a notice of default under
the senior sub notes triggers a cross default under the bank
credit agreement, the company will be required as well to seek a
new waiver from its bank group to replace the one granted on
August 16, 2004.
On August 2, 2004, Integrated Electrical announced that it was
rescheduling its fiscal 2004 third quarter earnings release and
conference call due to its ongoing evaluation of certain large and
complex projects at one subsidiary that experienced project
management changes in the latter part of the third quarter. On
August 13, 2004, Integrated Electrical announced that it would be
delaying the filing of its fiscal 2004 third quarter 10-Q. On
August 16, 2004, the company disclosed that it had identified
potential problems at one of its subsidiaries and an additional
issue on one contract at another subsidiary. This review resulted
in adjustments to operating income of $5.7 million. Integrated
Electrical's auditors, Ernst & Young, advised the company that as
a result of these issues, there were material weaknesses in
complying with Sarbanes-Oxley and that the filing of the 10-Q
would occur simultaneously with the release of the fiscal 2004
year-end audit, which is expected to occur on December 15, 2004.
Moody's review will focus on Integrated Electrical's progress in
obtaining the requisite waivers in a timely fashion and on its
efforts to address weaknesses in its internal controls, including
integrating many disparate subsidiary companies into a smoothly
functioning national corporation and the methods employed in
properly estimating revenues, costs and percentage of completion
on contracts. In addition, the review will address Integrated
Electrical's continuing relationships with its bank group and
surety provider, litigation risks, and the company's ongoing
liquidity. Unrestricted cash on hand, currently estimated at
$29 million, should be sufficient carry the company through to
receipt of the waivers, assuming that trade credit is not
curtailed or suspended.
These ratings are affected by the review:
* Ba3 senior implied rating;
* B1 senior unsecured issuer rating; and
* B2 rating on $173 million (remaining balance) of 9.375%
senior subordinated notes due 2009 (in two series).
INTEGRATED ELECT'L: S&P Ratings on Watch Neg. After Bond Default
----------------------------------------------------------------
Standard & Poor's Ratings Services' ratings on Houston, Texas-
based Integrated Electrical Services, Inc., remain on CreditWatch
with negative implications, where they were placed on June 23,
2004. On Sept. 2, 2004, Integrated Electrical received a notice
of technical default from the trustee for a series of its senior
subordinated notes because the company had failed to file, on a
timely basis, its 10-Q for the fiscal third quarter ended June 30,
2004. The company has a 30-day period to cure the default or
obtain waivers.
As reported in the Troubled Company Reporter on August 19, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured bank loan ratings on Houston, Texas-based
Integrated Electrical Services, Inc., to 'BB-' from 'BB', and its
subordinated debt rating to 'B' from 'B+'.
"Standard & Poor's expects that Integrated Electrical will be able
to obtain waivers to rectify this issue within the allotted time
frame," said Standard & Poor's credit analyst Heather Henyon.
However, she noted that failure to do so could potentially enable
noteholders to accelerate payment, which could lead to a liquidity
crunch.
The filing delay stemmed from ongoing internal control and
financial reporting issues at two Integrated Electrical
subsidiaries. The default on the subordinated notes triggered a
cross-default provision with the company's bank credit facility,
and consequently, the company is currently unable to borrow under
that loan agreement. Integrated Electrical has approximately
$29 million of available cash, which should be sufficient for
near-term liquidity.
Integrated Electrical Services, Inc. is the leading national
provider of electrical solutions to the commercial and industrial,
residential and service markets. The company offers electrical
system design and installation, contract maintenance and service
to large and small customers, including general contractors,
developers and corporations of all sizes.
INTEGRATED HEALTH: Pickett & Booth Assert Administrative Claims
---------------------------------------------------------------
In January 2002, the Official Committee of Unsecured Creditors of
Premier Associates, Inc. (one of Integrated Health Services,
Inc.'s debtor-affiliates) pursued fraudulent conveyance claims and
related causes of action on behalf of Premier. The IHS Debtors
believed that the pursuit of these causes of action would most
likely harm their estates because of the associated litigation
costs. The resulting dispute led to briefing, testimony and oral
argument before the United States Bankruptcy Court for the
District of Delaware during the Summer of 2002. The matter
remained sub judice until March 2003 when the Debtors and the
Premier Committee agreed to a settlement.
The Settlement includes:
(1) Special and favorable treatment for the holders of Premier
Unsecured Claims, which allow them to receive greater
distribution than the holders of General Unsecured Claims
under the Plan;
(2) The IHS Debtors' payment of the Premier Committee's
professional fees; and
(3) The dissolution of the Premier Committee and elimination of
the associated costs on the Plan Effective Date.
On March 8, 2004, the Court entered a Designation Order, a
consensual form of order resolving most of the issues between IHS
Liquidating and the Former Premier Committee Counsel. The
Designation Order designated those claims constituting Premier
Unsecured Claims, without prejudice to IHS Liquidating's right to
object or dispute any of the Premier Unsecured Claims. By
separate order, the Court directed IHS Liquidating to file all new
objections or requests to estimate Premier Unsecured Claims in
sufficient time to schedule a hearing on April 22, 2004.
The Designation Order further requires IHS Liquidating to seek the
Court's authority to make an initial distribution to the Allowed
Premier Unsecured Claim holders, within 10 days after the first
date on which all Premier Unsecured Claims are estimated, capped,
fixed or expunged pursuant to a final Court Order.
In accordance with the Designation Order, IHS Liquidating filed
objections to certain Premier Unsecured Claims, including the
unliquidated or contingent claims. Certain of the claims were
fixed or expunged at the April 22, 2004 hearing pursuant to a
Court Final Order. The unliquidated or contingent claims filed by
Don G. Angell and his affiliates were addressed in a June 25, 2004
Court Order, which has been subsequently appealed by IHS
Liquidating.
On May 26, 2004, the Court held a hearing on whether the Premier
Committee had standing to file motions after the Effective Date.
At that time, IHS Liquidating's counsel did not object to the
payment of the Former Premier Committee Counsel's fees and
expenses so long as the payment is funded from the aggregate
distribution that would otherwise be paid to the Allowed Premier
Unsecured Claim holders pursuant to the Plan.
Currently, the amount of all Premier Unsecured Claims, including
both Allowed and Disputed Premier Unsecured Claims, aggregate
$20,000,000 -- 70% of which are the disputed Angell Claims.
Pursuant to the Court's Final Order, the existing Allowed
Premiere Unsecured Claims total $6,000,000. Accordingly, a 6%
distribution to the Allowed Premier Unsecured Claim holders would
amount to less than $350,000.
Messrs. Picket and Booth Respond
C. Taylor Pickett and Daniel J. Booth assert administrative claims
based on IHS Liquidating, LLC's obligation to indemnify them for
defense costs and liability in connection with the lawsuit
captioned "Don G. Angell, et al. v. Elizabeth B. Kelly, C. Taylor
Picket, Daniel J. Booth and Ronald L. Lord" pending in the United
States District Court for the Middle District of North Carolina.
On June 3, 2003, Messrs. Pickett and Booth filed a Motion to
Establish Indemnification Obligation and Reserve in connection
with the Administrative Claims. The Bankruptcy Court, however,
did not decide on the request. The Court believed that requiring
IHS Liquidating to seek permission before making any distribution
to unsecured creditors is sufficient "to give the Angell
defendants the time to ask again for a reserve in the event that
the motions [the defendants] filed in the Angell suit are not
successful or fully resolved before the distribution."
John D. Demmy, Esq., at Stevens & Lee, PC, in Wilmington,
Delaware, relates that certain issues implicated by Messrs.
Picket and Booth's request were re-noticed for a hearing on
November 4, 2003. Before the hearing, IHS Liquidating and
Messrs. Pickett and Booth entered into a stipulation to resolve
certain aspects of the request relating primarily to the
reimbursement of legal costs. The Stipulation reiterated IHS
Liquidating's requirement to:
(i) seek the Bankruptcy Court's permission before making
any distribution; and
(ii) represent in good faith that the $30,000,000 reserve
for unsecured creditors would not be affected by the
contemplated distribution before making any
distributions to unsecured creditors.
In February 2004, IHS Liquidating sought the Court's authority to
make distributions with respect to Class 6 "Cash Out" claims. To
comply with the Court's June 16, 2003 ruling and its agreement
with Messrs. Pickett and Booth, IHS Liquidating filed a
certification of counsel on March 18, 2004, attesting that the
distribution available to the unsecured creditors will not be less
than $30,000,000.
Mr. Demmy notes that if IHS Liquidating is allowed to make an
initial distribution to the holders of Allowed Premiere Unsecured
Claims, there will be at least $30,000,000 available for
distribution to other unsecured creditors after payment of all
Allowed and reasonably anticipated Excluded Administrative
Expense Claims, Priority Tax Claims, Other Priority Claims and
Other Secured Claims.
Mr. Demmy clarifies that Messrs. Pickett and Booth do not object
to IHS Liquidating's request to make an initial Class 7
distribution to the holders of Allowed Premier Unsecured Claims to
the extent that IHS Liquidating is able to make the same
representation as it did in connection with the Cash Out
Distribution Motion. Mr. Demmy points out that only IHS
Liquidating is in the position to know definitively whether it has
at least $30,000,000 to distribute to the unsecured creditors.
Ronald Lord, another defendant in the Angell Action, supports
Messrs. Picket and Booth's suggestion.
Headquartered in Owings Mills, Maryland, Integrated Health
Services, Inc. -- http://www.ihs-inc.com/-- IHS operates local
and regional networks that provide post-acute care from 1,500
locations in 47 states. The Company filed for chapter 11
protection on February 2, 2000 (Bankr. Del. Case No. 00-00389).
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the Debtors in their restructuring efforts. On
September 30, 1999, the Debtors listed $3,595,614,000 in
consolidated assets and $4,123,876,000 in consolidated debts.
(Integrated Health Bankruptcy News, Issue No. 80; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
JERSEY STREET METAL: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Jersey Street Metal Works, Inc.
113 Jersey Street
West Babylon, New York 11704
Bankruptcy Case No.: 04-85664
Type of Business: The Debtor designs, manufactures & installs
sheet metal HVAC systems
Chapter 11 Petition Date: September 3, 2004
Court: Eastern District of New York (Central Islip)
Judge: Melanie L. Cyganowski
Debtor's Counsel: Michael J Macco, Esq.
Macco & Stern
135 Pinelawn Road
Suite 120 South
Melville, New York 11747
Tel: (631) 549-7900
Fax: (631) 549-7845
Total Assets: $1,111,824
Total Debts: $1,729,404
Debtor's 4 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
The Hartford Insurance $59,686
Pinnacle Air Product $26,089
Worcester/Harleysville $7,000
Insurance Co.
US Bancorp Manifest Funding Value of Security: $3,524
Services $22,000
JONATHON KYLE MILLER INC: Voluntary Chapter 11 Case Summary
-----------------------------------------------------------
Debtor: Jonathon Kyle Miller, Inc.
3114 Marilee
Garland, Texas 75043
Bankruptcy Case No.: 04-39754
Chapter 11 Petition Date: September 6, 2004
Court: Northern District of Texas (Dallas)
Judge: Harlin DeWayne Hale
Debtor's Counsel: Eric A. Liepins, Esq.
Eric A. Liepins, P.C.
12770 Coit Road, Suite 1100
Dallas, Texas 75251
Tel: 972-991-5591
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did file a list of its 20 largest creditors.
KAISER: Wants Court to Approve Mulberry Site Assumption Pact
------------------------------------------------------------
Kaiser Aluminum Corporation and its debtor-affiliates ask the
Court to approve an assumption and assignment agreement among:
* Kaiser Aluminum & Chemical Corporation,
* Environmental Risk Solutions, LLC,
* K.C. Industries, LLC, and
* K.C. Industries Properties, LLC, KCI's affiliate.
Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, explains that the Assumption and Assignment
Agreement resolves KACC's obligations with respect to
environmental conditions associated with its real property
located in Mulberry, Florida. The Assumption and Assignment
Agreement presents the most cost-effective manner of ensuring
continued compliance with environmental laws and addressing
environmental liabilities associated with the Mulberry Site in
the context of KACC's restructuring efforts.
>From 1956 to 1999, KACC owned and operated a facility in
Mulberry, Florida, that produced fluorine-based products. Past
activities and historic practices contributed to the existence of
environmental conditions and the creation of environmental
liabilities and obligations of KACC associated with the Site.
In 1999, KACC sold the Mulberry Plant and other certain assets to
KCI but retained ownership of the Site. Under a sale and
purchase agreement between the parties, KACC agreed to take
remedial actions necessary to continue to respond to the existing
environmental conditions at the Site and to indemnify KCI from
any claims of third parties arising as a result of these
conditions.
KACC and KCI also entered into a lease agreement on February 25,
2000. KACC agreed to lease the Site to KCI for a nominal amount
while KACC conducted the remedial actions required under the
Purchase Agreement. Both parties also entered into a Well
Sharing Agreement to use and share the cost of operation and
maintenance of a well in the Site. KCI prepaid $200,000 for the
Site and is required to purchase the Site for an additional $100
if KACC satisfies certain conditions in the Purchase Agreement.
Consequently, KCI asserted general unsecured claims against KACC
with respect to the Site. KCI filed three proofs of claim:
Claim No. Claim Amt Reason
--------- --------- ------
7123 $67,805 Amounts owing under the Well
Agreement
7124 15,885 Ground water recovery work
7243 unliquidated Claims under the Purchase
Agreement
KACC engaged in negotiations with KCI to transfer title to the
Site to KCI and eliminate KACC's obligation to conduct the
remedial actions at the Site. However, the negotiations were
unsuccessful. The inability to reach an agreement prompted KACC
to negotiate an economic way in satisfying its obligations to the
Site through ERS, a corporation in the business of assuming
environmental liabilities including the remediation of
contaminated sites.
KACC, ERS, KCI and KCI Properties entered into the Assumption and
Assignment Agreement on August 4, 2004, which was later amended
on August 23, 2004. Under the Agreement, KACC will transfer
title to the Site to KCI Properties and the environmental
liabilities associated with the Site to ERS.
The significant terms under the Assumption and Assignment
Agreement are:
(A) Assumption of Environmental Liabilities
Upon the effective date of the Agreement, ERS will:
-- assume any and all liabilities with respect to the
remediation of the Site;
-- obtain a finite risk insurance policy to cover liability
for bodily injury and property damage for actions or
omissions that occurred before the effective date of the
Agreement.
(B) Transaction Price
KACC will pay ERS $5,000,000 to allocate and use, in part, to
purchase the Policy.
(C) Sale of Site
KCI will assign its rights to the Site to KCI Properties.
KCI Properties will then purchase and take title to the Site
by paying KACC $100 as the balance of the purchase under the
Purchase Agreement.
(D) Insurance
ERS will maintain, at its sole cost and expense, certain
insurances coverages including the Policy. The Policy must
include insurance coverage for certain remediation costs of
the Site. The Policy must name ERS as the insured and KACC,
KCI and KCI Properties as additional insureds.
(E) Transfer of Post-Closure Permit
ERS agrees to execute all applicable documents and cooperate
with KACC to submit to the Florida Department of
Environmental Protection an application to transfer to ERS
KACC's interest in a Post-Closure Permit issued to KACC on
July 7, 2003. ERS will assume all obligations with respect
to the Post-Closure Permit irrespective of the timing and
obtainment of Environmental Protection Department's approval.
(F) ERS Releases
ERS will release KACC from any and all losses of any kind
associated with the Site, including the Environmental
Liabilities, the Well Sharing Agreement or the Assumption and
Assignment Agreement.
(G) KCI and KCI Properties Releases
KCI, KCI Properties and each of their affiliates will release
KACC from any and all losses of any kind associated with the
Site, the Well, the Purchase Agreement, the Lease Agreement,
the Well Sharing Agreement, the Post-Closure Permit or the
Assumption and Assignment Agreement.
(H) Kaiser Parties Releases
KACC will release KCI from any losses of any kind associated
with the Environmental Liabilities, the Purchase Agreement,
the Lease Agreement, the Well Sharing Agreement, and the
Post-Closure Permit, except for losses that result from acts
or omissions of KCI occurring after the Assumption and
Assignment Agreement.
(I) Resolution of KCI Claims
In consideration of the withdrawal of KCI's Claims, KACC will
allow KCI a $83,690 general non-priority unsecured claim.
(J) Termination of Previous Agreements
The Lease Agreement, the Purchase Agreement, and the Well
Sharing Agreement will be terminated as of the effective date
of the Assumption and Assignment Agreement. KACC, KCI and
KCI Properties will have no further rights or obligations
under the Agreements.
(K) ERS Indemnification
Under the Assumption and Assignment Agreement, ERS agrees to
indemnify and defend KACC and KCI from various losses and
liabilities, including the Environmental Liabilities, the
Insured Third Party Liabilities and any other obligations
assumed by ERS under the Assumption and Assignment Agreement.
(L) KCI and KCI Properties Indemnification
KCI and KCI Properties agree to indemnify ERS and KACC from
various losses as described in the Assumption and Assignment
Agreement.
Headquartered in Houston, Texas, Kaiser Aluminum Corporation --
http://www.kaiseral.com/-- operates in all principal aspects of
the aluminum industry, including mining bauxite; refining bauxite
into alumina; production of primary aluminum from alumina; and
manufacturing fabricated and semi-fabricated aluminum products.
The Company filed for chapter 11 protection on February 12, 2002
(Bankr. Del. Case No. 02-10429). Corinne Ball, Esq., at Jones,
Day, Reavis & Pogue, represent the Debtors in their restructuring
efforts. On September 30, 2001, the Company listed $3,364,300,000
in assets and $3,129,400,000 in debts. (Kaiser Bankruptcy News,
Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000)
KMART: Court Nixes $327 Million of Lease Rejection Damage Claims
----------------------------------------------------------------
Kmart Corporation and its debtor-affiliates object to 1,388
Lease-Related Damage Claims that:
(a) are amended and superseded by later claims;
(b) are duplicative of other claims;
(c) they have no contractual liability to;
(d) have no dollar amount of their alleged liability;
(e) are satisfied claims;
(f) are settled claims;
(g) are unsupported;
(h) improperly combine claims for multiple Kmart locations
that the Debtors have rejected, assumed, or assumed and
assigned; or
(i) are overstated.
At the Debtors' behest, the Court sustains the Debtors' objection
to 375 Lease-Related Damage Claims aggregating $326,846,564:
Type of Claim Claim Amount Reduced Amount
------------- ------------ --------------
Secured Claims $36,346,959 $0
Administrative Claims 12,873,475 0
Priority Claims 10,656,526 0
Unsecured Claims 266,969,603 $25,048,148
The Court disallows the Amended and Superseded Claims, Duplicate
Claims, No Contractual Liability Claims, No Dollar Amount Claims,
Satisfied Claims and Unsupported Claims.
The Court allows the Settled Claims and Overstated Claims at
reduced amounts.
The Court continues the hearing on the Debtors' objection to the
remaining 1,013 Lease-Related Damage Claims:
Proposed
Type of Claim Claim Amount Treatment
------------- ------------ ---------
Secured Claims $1,126,337,341 $0
Administrative Claims 180,971,955 0
Priority Claims 18,179,671 0
Unsecured Claims 1,331,904,422 143,175,665
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- is the
nation's second largest discount retailer and the third largest
merchandise retailer. Kmart Corporation currently operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam. The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-
02474). Kmart emerged from chapter 11 protection on May 6, 2003.
John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts. The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection. (Kmart Bankruptcy News, Issue No. 80; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
METRO MASONRY: Files Chapter 11 Plan of Reorganization in Texas
---------------------------------------------------------------
Metro Masonry Construction, Inc., filed its Chapter 11 Plan of
Reorganization with the U.S. Bankruptcy Court for the Eastern
District of Texas, Sherman Division. A full-text copy of the Plan
is available for a fee at:
http://www.researcharchives.com/bin/download?id=040812020022
The Plan resolves all prepetition Claims and Debts of whatever
character whether or not contingent or liquidated and allowed by
the Court. For postpetition Claims and Debts, the Debtor will
deal with them according to their terms as they come due.
The Plan groups creditors and equity holders into six classes and
describes their treatment:
Class Treatment
----- ---------
1 - Allowed Administrative Claim Unimpaired and will be
fully paid in cash upon the
effectivity of the Plan.
Professional fees:
a) Eric Liepins, PC,
Debtor's counsel will be
paid immediately upon
confirmation or approval
by the Court;
b) Cutler Smith, PC,
special litigation
counsel will be paid its
fees and expenses subject
to Court's approval;
c) Ryan Company, as tax
consultant will be paid
subject to Court approval
as reasonable.
2 - Allowed Tax Creditor Claims Impaired. Will be paid out of
the continued operations of
the Debtor:
a) Internal Revenue Services
- treated as priority
claim and to be paid over
a 72-month period from
date of assessment and
will receive an annual 5%
interest rate;
b) State Controller sales tax
claims - amount is
disputed and subject to
resolution and to be paid
over a 72-month period
with an interest rate of
5% per annum;
c) Property Tax Claims - will
be paid over a 72-month
period with an annual
interest rate of 5%.
3 - Allowed Secured Claim of Impaired. Will be divided into
Inwood National Bank two parts:
a) secured - represents the
value of the
collateral as
of Effective
Date;
b) unsecured - will be paid in
240 consecutive
payments with an
interest rate of
6% annually
commencing on the
Effective Date.
4 - Allowed General Unsecured Impaired. Will be paid 25% of
Claims of less than $5,000 their allowed claim, without
interest, in four quarterly
payments beginning on the last
day of the first full calendar
quarter after the Effective
Date.
5 - Allowed General Unsecured Impaired. Will receive
Claims of $5,000 or more payments in an amount equal to
10% of their allowed claim
over a period of 20 quarterly
payments commencing on
the last day of the first full
calender quarter after the
Effective Date of the Plan. In
the event that Inwood elects
under section 1111(b) of the
Bankruptcy Code, claimants in
this class will receive 33% of
their allowed claim over the
same payment period.
6 - Certain Allowed Equity Unimpaired. Equity Interest
Interest Holder Claims will retain their stock in the
Reorganized Debtor.
To confirm this plan, among other items required by 11 U.S.C. Sec.
1129(a), the Debtors must present evidence at the confirmation
hearing that their unsecured creditors would receive less than the
present value of the 10% dividend being paid over the five-year
period in a chapter 7 liquidation. Otherwise, without Class 5's
consent, this plan violates the so-called absolute priority rule.
Headquartered in Plano, Texas, Metro Masonry, specializes in
construction and high-end residential masonry. The Company filed
for chapter 11 protection on August 12, 2003 (Bankr. E.D. TX. Case
No. 03-45718). Eric A. Liepins, Esq., in Dallas, Texas,
represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated more
than $1 million in assets and debts.
NATIONAL CENTURY: Mark Aprahamian Presses to Close Lincoln Sale
---------------------------------------------------------------
Mark Aprahamian, the Court-authorized buyer of the Lincoln Medical
Clinic Property of National Century Financial Enterprises, Inc.,
and its debtor-affiliates, objected to the request of Liberty
National Enterprise, L.P., to stay the order compelling Memorial
Drive Office Complex, a National Century Financial Enterprises,
Inc., debtor-affiliate, to sell the Lincoln Medical Clinic
Property to Mark Aprahamian pending its appeal.
As reported in the Troubled Company Reporter on August 13, 2004,
the Bankruptcy Court ruled that Liberty National defaulted under
the Bid Procedures Order for failing to close the sale of the
Lincoln Clinic Property by May 3, 2004. The Court ordered
Memorial Drive Office Complex, National Century Financial
Enterprises, Inc. debtor-affiliate, to sell the Lincoln Clinic
Property to Mark Aprahamian for $4,525,000 as the second highest
bidder.
Liberty National asked the Bankruptcy to reconsider its decision.
As reported in the Troubled Company Reporter on September 7, 2004,
that the Bankruptcy Court denied the reconsideration request.
Liberty National also appealed the Bankruptcy Court's decision to
the Bankruptcy Appellate Panel for the Sixth Circuit. The appeal
is still pending.
Michael S. Kogan, Esq., at Ervin, Cohen & Jessup, in Beverly
Hills, California, reminds the Court that the sale of the Lincoln
Clinic Property has not been objected to by any party-in-interest
except for Liberty National Enterprise, L.P. A stay would merely
delay the approved transaction, and delay of the closing would
mean great harm to Debtor Memorial Drive Office Complex and Mark
Aprahamian.
Mr. Kogan asserts that Liberty cannot meet its extraordinary
burden with respect to the applicable standards for a
discretionary stay pending appeal. Any harm befalling Liberty
from the transaction is either not irreparable or is harm that
Liberty has brought on itself. Liberty defaulted on the terms of
the Auction and the Asset Purchase Agreement, and attempted to
renegotiate the sale price, all in contravention to the Court's
Orders. Thus, Mr. Kogan emphasizes, Liberty cannot be heard to
complain about the inevitable results of its own actions.
On the other hand, loss of transaction because of the stay would
mean the loss of a transaction worth $4,525,000 to MDOC claimants.
In addition, Mr. Aprahamian has liquidated significant assets at a
discount to enable him to close the transaction, and a stay would
cause him a significant financial loss. Moreover, MDOC has
maintained the Qualified Bidder deposits for over six months, and
each of the four Qualified Bidders will not have use of those
funds until the sale transaction closes. The value of the Medical
Clinic Property could also substantially diminish during the
pendency of a stay. Thus, this could deplete the value of the
assets being purchased.
The public's interest in seeing MDOC's assets liquidated in an
orderly fashion and the integrity of bankruptcy sales, also weighs
against granting the stay, Mr. Kogan remarks. Furthermore,
Liberty cannot show a likelihood of success on the merits of its
appeal because it has defaulted on the terms of the Auction Sale.
Mr. Kogan adds that Liberty also waived its right to seek appeal
when it failed to appear at the July 7, 2004 hearing, concerning
Liberty's refusal to move forward with the sale.
Even if the Court were to hold that Liberty had met its burden
with respect to a stay pending appeal, the Court should still deny
the stay based on Liberty's unclean hands with respect to the sale
transaction it seeks to overturn, Mr. Kogan emphasizes. In fact,
the Court vacated the sale of the Lincoln Clinic Property to
Liberty based on Liberty's bad faith conduct and actions regarding
the Auction of the property.
Mr. Aprahamian asks the Court to reject Liberty's stalling tactics
and direct that the closing occur without further delay.
In the alternative, if the Court holds that Liberty should be
granted a stay pending appeal, Mr. Kogan asserts that the Court
should require a $5 million bond to be posted by Liberty to
protect the prevailing parties from the loss of the sale
transaction.
Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader
in healthcare finance focused on providing medical accounts
receivable financing to middle market healthcare providers. The
Company filed for Chapter 11 protection on November 18, 2002
(Bankr. S.D. Ohio Case No. 02-65235). The healthcare finance
company prosecuted its Fourth Amended Plan of Liquidation to
confirmation on April 16, 2004. Paul E. Harner, Esq., at Jones Day
represents the Debtors. (National Century Bankruptcy News, Issue
No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NKA ASSOCIATES LTD.: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: NKA Associates, Ltd.
1002 Ignacio Court
Pinole, California 94564
Bankruptcy Case No.: 04-48670
Type of Business: Real Estate
Chapter 11 Petition Date: September 3, 2004
Court: Northern District of Texas (Ft. Worth)
Judge: D. Michael Lynn
Debtor's Counsel: Jeff P. Prostok, Esq.
Forshey and Prostok
777 Main Street, Suite 1290
Fort Worth, Texas 76102
Tel: 817-877-8855
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest creditors.
NORTEL NETWORKS: Joins WiMAX Forum & Lends Skill on OFDM & MIMO
---------------------------------------------------------------
Nortel Networks (NYSE:NT)(TSX:NT) has become a principal member of
the WiMAX Forum(TM), an industry-led organization that promotes
interoperability and certification of broadband wireless products
for delivery of faster, more affordable data, voice and video
services to businesses and consumers.
Based on the Institute of Electrical and Electronics Engineers --
IEEE -- 802.16 standard for wireless metropolitan-area networks --
MANs, WiMAX is a next generation wireless technology expected to
be in widespread use within the next three to five years. The
WiMAX Forum strives to ensure industry standards are in place to
provide interoperability on a wide range of WiMAX Forum
Certified(TM) communications products across all networks and
vendors.
By joining the WiMAX Forum, Nortel Networks now has the
opportunity to contribute its expertise and capabilities in
wireless, wireline and broadband access technologies. In
addition, Nortel Networks will offer its expertise in the
development of two emerging technologies -- Orthogonal Frequency
Division Multiplexing (OFDM) and Multiple-Input Multiple-Output
(MIMO) -- that greatly enhance WiMAX's potential for widespread
adoption by improving spectral efficiency and data rates. With
OFDM and MIMO, service providers can use less spectrum to serve
more customers with a single base station.
"Nortel Networks commitment and contributions to the WiMAX Forum
underscore our objective to speed the deployment of advanced
broadband service regardless of access choice while decreasing
operator costs," said John Hoadley, vice president, advanced
technology, Wireless Networks, Nortel Networks. "We have been
contributing to the 802.16 standard by helping to develop
underlying technologies like OFDM and MIMO for more than five
years. We strongly believe that the combination of MIMO and OFDM
can be realized in 802.16 and WiMAX."
OFDM is the base radio technology used by Wireless Fidelity
(Wi-Fi)/802.11 and WiMAX/802.16. MIMO is an advanced antenna
technology that enhances the performance of WiMAX, delivering as
much as a four-fold increase in data capacity and spectral
efficiency by Nortel Networks estimates. Future wireless wide area
network access systems beyond third generation (3G) are likely to
be based on OFDM and MIMO technologies.
"We're pleased to have Nortel Networks on board," said Ron
Resnick, president, WiMAX Forum. "Nortel Networks is a
significant and valuable addition to the Forum because of its
expertise and global span in building and deploying wireless
networks, which should greatly help the advancement of 802.16-
based technology into the marketplace."
Nortel Networks has brought significant contributions to the IEEE
802.16 in terms of MIMO and mobility concepts considered to be key
enablers for the standard.
Nortel Networks MIMO technologies have been verified in
measurements in a wide range of environments. In 2001, Nortel
Networks completed an extensive propagation trial in central
London, proving the feasibility of MIMO to provide substantial
performance gains in an urban deployment. In February 2003, Nortel
Networks demonstrated peak data rates up to 20 megabits per second
over-the-air using OFDM/MIMO technology with a 5 MHz carrier.
Nortel Networks is a member of many wireless industry and
standards bodies, including the International Telecommunications
Union -- ITU, the Third Generation Partnership Project -- 3GPP,
3GPP2, the Cellular Telecommunications & Internet Association --
CTIA, IEEE, the Wi-Fi Alliance, and the Wireless Communications
Association -- WCA.
Nortel Networks has designed, installed and launched more than 300
wireless networks in over 50 countries. Nortel Networks was the
industry's first supplier with wireless networks operating in all
advanced radio technologies (GSM/GPRS/EDGE, CDMA2000 1X and 1xEV-
DO, UMTS and WLAN), and is the only end-to-end provider of all
next generation wireless solutions.
About the WiMax Forum
The WiMAX Forum is an industry-led, non-profit corporation formed
to promote and certify the compatibility and interoperability of
broadband wireless products using the IEEE 802.16 and ETSI
HiperMAN wireless MAN specifications. The forum's goal is to
accelerate the introduction of these devices into the marketplace.
WiMAX Forum Certified(TM) products will be fully interoperable and
support Metropolitan Broadband Fixed, Portable and Mobile
Applications. For more information about the WiMAX Forum and its
activities, visit http://www.WiMAXForum.org/
About Nortel Networks
Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges information.
The Company is supplying its service provider and enterprise
customers with communications technology and infrastructure to
enable value-added IP data, voice and multimedia services spanning
Wireless Networks, Wireline Networks, Enterprise Networks, and
Optical Networks. As a global company, Nortel Networks does
business in more than 150 countries. More information about
Nortel Networks can be found on the Web at www.nortelnetworks.com/
or http://www.nortelnetworks.com/media_center
* * *
As reported in the Troubled Company Reporter on August 18, 2004,
the Integrated Market Enforcement Team of the Royal Canadian
Mounted Police recently advised Nortel that it will commence a
criminal investigation into the Company's financial accounting
situation.
As reported in the Troubled Company Reporter on August 12, 2004,
Nortel's directors and officers, and certain former directors and
officers are facing allegations from certain shareholders in the
U.S. District Court for the Southern District of New York that the
directors and officers breached fiduciary duties owed to the
Company during the period from 2000 to 2003.
NORTHERN CONSTRUCTION: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Northern Construction Dynamics, LLC
3010 Route 100, Suite 1
Lowell, Vermont 05847
Bankruptcy Case No.: 04-11225
Type of Business: The Debtor is a steel fabricator and erector.
Chapter 11 Petition Date: September 7, 2004
Court: District of Vermont (Rutland)
Debtor's Counsel: Gleb Glinka, Esq.
Glinka & Schwidde
81 Glinka Road
P.O. Box 7
Cabot, VT 05647-0007
Tel: 802-563-2828
Fax: 802-563-3222
Total Assets: $0 to $50,000
Total Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20-Largest Creditors.
ORIGEN: Moody's Hammers 3 Securitization Classes to Junk Levels
---------------------------------------------------------------
Moody's Investors Service downgraded the ratings on 14 classes of
senior, mezzanine and subordinate certificates of the Origen's
Manufactured Housing Securitizations. The rating action concludes
Moody's rating review, which began on August 2, 2004.
The rating actions are prompted by the weaker-than anticipated
performance of these pools. Delinquencies and repossessions have
exceeded original expectations, leading to higher than expected
cumulative losses. As of the August 16, 2004 remittance report,
cumulative losses and cumulative repossessions for the 2001-A
series were 14.56% and 20.85% respectively, with approximately 55%
of the pool balance outstanding. Cumulative losses and cumulative
repossessions for the 2002-A series equaled 6.39% and 10.87%
respectively, with approximately 74% of the pool balance
outstanding. Since losses have exceeded the available amount of
excess spread, the overcollateralization of the 2001-A series was
completely eroded. As a result, the Class B certificates of the
2001-A series are currently experiencing losses. For the same
reason, the overcollateralization of the 2002-A series is around
5.7% of the aggregate Principal Balance, which is below the target
level of 7%.
The complete rating action is as follows:
Issuer: Origen Manufactured Housing Contract Senior/Subordinate
Asset-Backed Certificates
* Series 2001-A
-- 6.44% Class A-4 Certificates, downgraded from Aaa to A2;
-- 7.08% Class A-5 Certificates, downgraded from Aaa to A2;
-- 7.65% Class A-6 Certificates, downgraded from Aaa to A2;
-- 6.66% Class A-7 Certificates, downgraded from Aaa to A2;
-- 7.82% Class M-1 Certificates, downgraded from Aa2 to Ba2;
-- 8.30% Class M-2 Certificates, downgraded from A2 to Caa2;
and
-- 8.68% Class B Certificates, downgraded from Baa2 to C.
* Series: 2002-A
-- LIBOR + 0.24% Class A-1 Certificates, downgraded from Aaa
to Aa2;
-- 5.22% Class A-2 Certificates, downgraded from Aaa to Aa2;
-- 6.17% Class A-3 Certificates, downgraded from Aaa to Aa2;
-- 7.17% Class A-4 Certificates, downgraded from Aaa to Aa2;
-- 7.87% Class M-1 Certificates, downgraded from Aa2 to A3;
-- 8.85% Class M-2 Certificates, downgraded from A2 to Ba3;
and
-- 9.50% Class B-1 Certificates, downgraded from Baa2 to
Caa3.
Origen is a Delaware limited liability company with its
headquarters in Southfield, Michigan. The company is primarily
engaged in the business of underwriting, originating and servicing
manufactured housing contracts.
OWENS CORNING: Asks Court to Approve CDC Corp. & Wall Tech Merger
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J. Kate Stickles, Esq., at Saul Ewing, LLP, in Wilmington,
Delaware, reports that CDC Corporation and Wall Technology, Inc.,
two of Owens Corning's wholly owned subsidiaries that design and
manufacture acoustical insulation products, plan to merge.
CDC is a subsidiary Debtor and is contemplated to be the surviving
company after the merger. The Debtors owned CDC since March 2000,
when it acquired CDC's stock for $7.5 million. CDC operates out
of a leased manufacturing facility in Ladysmith, Wisconsin, from
which it produces acoustical wall and ceiling panels, which are
used in the internal finish market by commercial and institutional
customers like schools, churches, theatres, offices, libraries and
other entities requiring sound absorption wall and ceiling
products. Specifically, CDC modifies insulation board panels
produced by other entities of the Debtors by adding fabric and
other coverings. CDC has 100 employees. In 2003, CDC generated
$12 million in total sales.
The Debtors acquired Wall Tech in November 2001 for $3.8 million,
via a stock acquisition. Wall Tech currently has four employees,
and is leasing a manufacturing facility near Denver, Colorado. In
2003, Wall Tech generated $9 million in sales.
According to Ms. Stickles, CDC and Wall Tech's businesses are
complimentary since both produce acoustical wall and ceiling
panels. To realize savings in overhead through reduced payroll
and administrative costs, the Debtors determined that CDC and Wall
Tech should merge. A merger will reduce the costs of designing
and manufacturing acoustical insulation products by permitting the
products to be produced from one plant instead of two, while at
the same time permitting CDC to take advantage of Wall Tech's
assets and brand recognition, through the name "Wall Technology."
The essential terms of the parties' Plan of Merger are:
(a) The corporate existence of CDC will continue, and the
shares of capital stock owned by the Debtors in CDC will
remain issued and outstanding; and
(b) The corporate existence of Wall Tech will cease, and the
shares of capital stock owned by the Debtors in Wall Tech
will be cancelled and extinguished without any conversion
and payment.
The Debtors ask the U.S. Bankruptcy Court for the District of
Delaware to approve and authorize CDC and Wall Tech to execute the
Plan of Merger and to consummate all transactions contemplated.
Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts. The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom
represents the Debtors in their restructuring efforts. At
June 30, 2004, the Company's balance sheet shows $7.3 billion in
assets and a $4.3 billion stockholders' deficit. (Owens Corning
Bankruptcy News, Issue No. 83 Bankruptcy Creditors' Service, Inc.,
215/945-7000)
PARK PLACE: Fitch Rates $36 Mil. Privately Offered Class BB+
------------------------------------------------------------
Park Place Securities Inc.'s certificates, series 2004-WCW2, are
rated by Fitch Ratings as follows:
-- $2.29 billion classes A-1 through A-7 'AAA';
-- $147 million class M-1 'AA+';
-- $120 million class M-2 'AA';
-- $54 million class M-3 'AA-';
-- $52.50 million class M-4 'A+';
-- $51 million class M-5 'A';
-- $37.50 million class M-6 'A-';
-- $36 million class M-7 'BBB+';
-- $33 million class M-8 'BBB';
-- $39 million class M-9 'BBB-'; and
-- $36 million privately offered class M-10 'BB+'.
Credit enhancement for the 'AAA' rated class A certificates
reflects the 20.20% subordination provided by classes M-1, M-2,
M-3, M-4, M-5, M-6, M-7, M-8, M-9, M-10, monthly excess interest
and initial overcollateralization --OC -- of 3.55%.
Credit enhancement for the 'AA+' rated class M-1 certificates
reflects the 15.30% subordination provided by classes M-2, M-3,
M-4, M-5, M-6, M-7, M-8, M-9, M-10, monthly excess interest and
initial OC.
Credit enhancement for the 'AA' rated class M-2 certificates
reflects the 11.30% subordination provided by classes M-3, M-4,
M-5, M-6, M-7, M-8, M-9, M-10, monthly excess interest and initial
OC.
Credit enhancement for the 'AA-' rated class M-3 certificates
reflects the 9.50% subordination provided by classes M-4, M-5,
M-6, M-7, M-8, M-9, M-10, monthly excess interest and initial OC.
Credit enhancement for the 'A+' rated class M-4 certificates
reflects the 7.75% subordination provided by classes M-5, M-6,
M-7, M-8, M-9, M-10, monthly excess interest and initial OC.
Credit enhancement for the 'A' rated class M-5 certificates
reflects the 6.05% subordination provided by classes M-6, M-7,
M-8, M-9, M-10, monthly excess interest and initial OC.
Credit enhancement for the 'A-' rated class M-6 certificates
reflects the 4.80% subordination provided by classes M-7, M-8,
M-9, M-10, monthly excess interest and initial OC.
Credit enhancement for the 'BBB+' rated class M-7 certificates
reflects the 3.60% subordination provided by classes M-8, M-9,
M-10, monthly excess interest and initial OC.
Credit enhancement for the 'BBB' rated class M-8 certificates
reflects the 2.50% subordination provided by classes M-9 and M-10,
monthly excess interest and initial OC.
Credit enhancement for the 'BBB-' rated class M-9 certificates
reflects the 1.20% subordination provided by Class M-10, monthly
excess interest and initial OC.
Credit enhancement for the privately offered 'BB+' rated class
M-10 certificates reflects the monthly excess interest and initial
OC. In addition, the ratings reflect the integrity of the
transaction's legal structure, as well as the capabilities of
Countrywide Home Loans Servicing LP as master servicer. Wells
Fargo Bank N.A. will act as trustee.
The mortgage pool consists of closed-end, first lien subprime
mortgage loans that may or may not conform to Freddie Mac and
Fannie Mae loan limits. As of the cut-off date (Sept. 1, 2004),
the mortgage loans have an aggregate balance of $2,999,932,852.
The weighted average loan rate is approximately 7.52%. The
weighted average remaining term to maturity -- WAM -- is
354 months. The average cut-off date principal balance of the
mortgage loans is approximately $164,047. The weighted average
original loan-to-value ratio -- OLTV -- is 83.94% and the weighted
average Fair, Isaac & Co. -- FICO -- score was 622. The
properties are primarily located in:
* California (25.66%),
* Florida (10.12%), and
* New York (7.82%).
The loans were originated or acquired by Argent Mortgage Company,
LLC, and Olympus Mortgage Company. Both mortgage companies are
subsidiaries of Ameriquest Mortgage Company, a specialty finance
company engaged in the business of originating, purchasing and
selling retail and wholesale subprime mortgage loans. Both Argent
and Olympus focus primarily on wholesale subprime mortgage loans.
PARKRIDGE PHASE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Parkridge Phase Three Associates Limited Partnership
aka Parkridge Phase Three Associates LP
aka Parkridge Phase III Assoc. LP
aka Parkridge Phase Three Associates
aka Parkridge III
12007 Sunrise Valley Drive, Suite 400
Reston, Virginia 20191
Bankruptcy Case No.: 04-13707
Chapter 11 Petition Date: September 3, 2004
Court: Eastern District of Virginia (Alexandria)
Judge: Stephen S. Mitchell
Debtor's Counsel: Jeffrey S. Romanick, Esq.
Gross & Romanick, P.C.
3975 University Drive #410
Fairfax, VA 22030-2520
Tel: 703-273-1400
Fax: 703-385-9652
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $10 Million to $50 Million
The Debtors did not file a list of its 20-Largest Creditors.
PG&E NAT'L: Asks Court to Stay Southaven, et al., Claim Objections
------------------------------------------------------------------
NEGT Energy Trading - Power, LP, is a party to separate
Dependable Capacity and Conversion Services Agreements with
Southaven Power, LLC, and Caledonia Generating, LLC. On the
Petition Date, disputes over prepetition alleged breaches by ET
Power, Southaven Power and Caledonia Generating under the Tolling
Agreements were subject to arbitration proceedings before the
American Arbitration Association. In addition, there were
proceedings pending in the Circuit Court for Montgomery County,
Maryland, and in the Maryland Court of Appeals.
After the Petition Date, ET Power sought and obtained the
Bankruptcy Court's permission to reject the Tolling Agreements.
Subsequently:
(a) Southaven Power filed a proof of claim for $500,000,000
against ET Power for damages arising from the Southaven
Tolling Agreement, prepetition breaches of contract, and
the Rejection Order. Southaven Power also filed a
$176,209,004 claim against National Energy & Gas
Transmission, Inc., for the amounts due pursuant to a
guaranty by NEG of ET Power's obligations;
(b) Caledonia Generating filed its proof of claim against ET
Power in an undetermined amount for damages arising from
the Caledonia Tolling Agreement, prepetition breaches of
contract, and the Rejection Order. Caledonia Generating
also filed a claim against NEG for the amounts due
pursuant to a guaranty by NEG of ET Power's obligations.
NEG's guaranty is subject to a $250,000,000 cap; and
(c) General Electric Capital Corporation filed a $10,000,000
claim against ET Power.
The rights of Southaven Power and Caledonia Generating to seek
arbitration under the Tolling Agreements remain unaffected
pursuant to the protocol established by the Bankruptcy Court for
the mediation of trading and tolling contracts. The Protocol
provides for mediation if adversary proceedings were commenced or
if parties to a dispute other than an adversary proceeding
consent.
On July 2, 2004, the NEG Debtors objected to the Claims filed by
Caledonia Generating, Southaven Power, and General Electric.
To resolve the issues between them, the parties agree to proceed
to arbitration to determine all matters between them that relate
to the Tolling Agreements or the Claims which arise from the
Rejection Order. During September 2004, the parties agree to
determine the extent to which agreement can be reached on issues
to be addressed at the initial pre-hearing conference. The
parties will also jointly seek to schedule the initial pre-
hearing conference on a date in October 2004. The parties will
adopt procedures for the commencement of the arbitration process
in accordance with the rules of the American Arbitration
Association and the Federal Arbitration Act.
Each party will select its designated arbitrator and notify the
other parties of the choice, in writing by September 15, 2004.
The neutral prepetition arbitrators will be utilized in
arbitration proceedings. However, if in either arbitration the
neutral arbitrator is not available within a time schedule
acceptable to the parties in the arbitration, a substitute
neutral arbitrator will be selected by the party arbitrators in
the arbitration or by the AAA in accordance with the AAA rules.
The parties agree that any arbitral awards will be binding and
not subject to further challenge, except as provided in Section
10(a) of the Federal Arbitration Act. The parties, however, may
request the Bankruptcy Court to confirm the award.
The parties will ask the Bankruptcy Court to stay the Debtors'
Claim Objections. The resolution of the Claims will be
determined by the arbitration proceedings.
Southaven Power, Caledonia Generating and General Electric
reserve their rights to amend and supplement their Claims or to
file additional claims if they should deem it necessary and
appropriate for any reason, including without limitation, to
provide an updated statement of amount due or for any other
purpose for which a claim filed in the NEG Debtors' Chapter 11
case may be amended.
Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- develops, builds, owns and operates
electric generating and natural gas pipeline facilities and
provides energy trading, marketing and risk-management services.
The Company filed for Chapter 11 protection on July 8, 2003
(Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq.,
Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at
Willkie Farr & Gallagher represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $7,613,000,000 in assets and
$9,062,000,000 in debts. (PG&E National Bankruptcy News, Issue No.
27; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PNC MORTGAGE: S&P Junks One Class & Gives Low-B Ratings to Five
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on nine
classes of commercial mortgage pass-through certificates from
series 1999-CM-1 issued by PNC Mortgage Acceptance Corp. At the
same time, ratings are affirmed on six other classes from the same
transaction.
The raised and affirmed ratings reflect credit support levels that
adequately support the ratings under various stress scenarios and
the seasoning of the underlying loan pool.
As of August 2004, the pool consisted of 197 fixed-rate mortgages
with an aggregate principal balance of $701.9 million, down from
$760.4 million at issuance. Midland Loan Services, Inc., acting
as both master and special servicer, provided interim and year-end
2003 net cash flow -- NCF -- data for 91.9% of the pool, which
does not take into account the defeased assets (2.4% of the pool).
Based on this information, Standard & Poor's calculated the debt
service coverage ratio -- DSCR -- for the outstanding loan at
1.33x, equal to that at issuance. To date, realized losses total
$3.8 million, which includes two mortgages.
The top 10 loans constitute 28.38% of the outstanding pool
balance, with a weighted average DSCR of 1.34x, up from 1.33x, at
issuance, based on interim and year-end 2003 financials. The
statistics do not include the ninth-largest loan (40 West 55th
Street), which was defeased. Two of the mortgages, discussed
below, have experienced declines in excess of 10%, and both appear
on the watchlist.
As of the August 2004 distribution date, there are two specially
serviced mortgages totaling $5.0 million (0.72% of the pool): one
mortgage is categorized as 30 days delinquent ($3.8 million), and
the other ($1.2 million) is still in its grace period.
The 30-days delinquent loan has a balance of $3.8 million. It is
secured by a 158-unit apartment building in Dallas, Texas. The
building was built in 1969 and renovated in 1999. In March of
2004, occupancy levels were reported at 78%, resulting in a NCF
DSCR of 0.55x. The market occupancy level for the Dallas area is
91%, and the market overall is considered oversupplied. The loan
was transferred to the special servicer in May 2004 due to payment
issues and imminent default. The borrower requested and received
a 12-month forbearance from Midland. The agreement will suspend
escrow payments for a period of 12 months while principal and
interest payments are made.
The other specially serviced loan has a balance of $1.2 million.
It is secured by an 81-unit apartment building in Monroe,
Louisiana; the property was built in 1974 and renovated in 1999.
As of April 2004, occupancy levels were reported at 90%, resulting
in a NCF DSCR of 1.05x. The loan was transferred to the special
servicer in May 2004 due to severe deferred maintenance. Since
that time the mortgage has been brought current, and is in the
second month of its three-month rehabilitation period.
Midland reported 36 loans totaling $137.2 million (19.5% of the
pool) on its watchlist. The watchlist includes two of the top 10
loans in the pool, as well as the 11th-largest loan. The largest
loan on the watchlist is the Alliance loan ($31.4 million) secured
by three apartment buildings, one each in College Park, Georgia,
Alexandria, Virginia, and Waldorf, Maryland. The borrower has
expressed interest in defeasing the loan. The sixth-largest loan
totals $11.9 million, and is secured by 467-unit garden style
apartments in Tulsa, Oklahoma. As of June 2004, occupancy levels
for the property were reported at 86%, slightly below the market
rate of 88%. For the same period of time, NCF DSCR was reported
at 0.95x. The Tulsa multifamily market continues to be impacted
by the current low interest rate environment, driving the demand
for more new homebuyers, while reducing the demand for renters.
Midland ranked the property good. The 11th-largest loan in the
pool totaled $10.6 million, and is secured by a 404-unit garden
style apartment complex in Lauderhill, Florida. As of December of
2003, occupancy for the property was reported at 90%, while DSCR
NCF was reported at 1.22x. The property was placed on the
watchlist because of its poor ranking and severe deferred
maintenance. The remaining mortgages on the watchlist generally
appear for a variety of reasons.
The pool is geographically diverse, with properties located in 33
states. Concentrations in excess of 10% include:
* California (15.1%), and
* Texas (11.0%).
The property type concentration of the pool includes:
* multifamily (36.6%),
* retail (26.4%),
* office (18.0%),
* industrial (5.1%), and
* lodging (4.3%), and
* an assortment of other property types (9.6%).
Standard & Poor's stressed the specially serviced and watchlist
loans, and other loans in the pool that appeared to be
underperforming. The resultant credit enhancement levels support
the raised and affirmed ratings.
Ratings Raised
PNC Mortgage Acceptance Corp.
Commercial mortgage pass-thru certs series 1999-CM-1
Rating Credit
Class To From Support (%)
----- -- ---- -----------
A-2 AAA AA+ 22.76
A-3 AA+ AA- 17.88
A-4 AA A+ 15.99
B-1 A BBB+ 12.47
B-2 A- BBB 11.11
B-3 BBB- BB+ 7.32
B-4 BB+ BB 6.24
B-5 BB BB- 5.29
B-6 BB- B+ 3.80
Ratings Affirmed
PNC Mortgage Acceptance Corporation
Commercial mortgage pass-thru certs series 1999-CM-1
Class Rating Credit Support (%)
----- ------ ------------------
A-1A AAA 28.44
A-1B AAA 28.44
S AAA -
B-7 B 2.71
B-8 B- 1.90
C CCC 0.82
PREMIER FARMS: Files Chapter 11 Plan of Reorganization in Iowa
--------------------------------------------------------------
Premier Farms, LC filed its Chapter 11 Plan of Reorganization with
the U.S. Bankruptcy Court for the Northern District of Iowa,
Western Division. A full-text copy of the Plan is available for a
fee at:
http://www.researcharchives.com/bin/download?id=040812020022
The Plan groups the Debtor's creditors into five classes and
describes their treatment:
Class Treatment
----- ---------
1 - Priority Claims Unimpaired. Will be paid in full.
Includes:
a) attorneys fees;
b) IRS claim - for failure
to file tax reports
which will be paid over
a 5-year period with an
annual interest of 2%.
2 - Secured Claim of Bank Impaired. Bank will retains its
of America secured claim but subordinate it to
the extent of payments to unsecured
creditors.
3 - Secured Claim of Geode Claim will be used to offset debt
Gene Center to the Debtor and the balance
treated as general unsecured claim.
4 - Executory Contracts Will be rejected
5 - General Unsecured Paid in monthly payments over a
Claim 15-year period with a monthly
interest rate of 2% beginning
30 days after confirmation of the
Plan.
6 - Unsecured Claims of Will be paid over a 15-year period
DeCoster Contract with interest at 2% in regular
Farming, DeCoster payments based on the available
Feed and DeCoster cash after the monthly payment to
Investment Class 5. In any given year, will
DeCoster Feed not receive distribution in excess
of the prorata distribution to
unsecured creditors.
The Debtor does not provide any disclosure about what it thinks
the present value of the 15-year stream of monthly payments is or
how creditors would fare in a Chapter 7 liquidation.
Headquartered in Clarion, Iowa, Premier Farms, is a livestock
breeder. The Company filed for protection on August 12, 2003
(Bankr. N.D. Iowa Case No. 03-04632). Donald H. Molstad, Esq., in
Sioux City, Iowa represents the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed $22,614,949 in total assets and $93,907,881
in total debts.
QUIGLEY CO: Nominates Al Togut as Future Claimants' Representative
------------------------------------------------------------------
Quigley Company, Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York to appoint Albert Togut, Esq., at
Togut, Segal & Segal, LLP, as the legal representative for future
asbestos personal injury claimants in its chapter 11 proceeding.
In 1992, Quigley, a wholly-owned subsidiary of Pzifer Inc., exited
the refractories business and sold its business to Minteq
International, Inc. Minteq Int. acquired all of the Company's
assets but did not assume Quigley's asbestos-related liabilities.
Quigley retained all liabilites arising from the contents of the
products sold prior to the sale of the business, including present
personal injury claims and future personal injury demands
resulting from exposure to asbestos, silica, mixed dust, talc and
vermiculite.
The Company's principal concern is managing the defense and
resolution of personal injury claims brought against it. As of
August 23, 2004, there are about 162,000 personal injury claims
against the Company.
Mr. Togut discloses that Quigley paid his firm a $125,000
retainer. As for his services, Mr. Togut will be paid his current
hourly rate of $720.
Togut, Segal & Segal assures the Court that it has never
represented any plaintiff, defendant or insurer in any asbestos
litigation against Quigley.
Headquartered in Manhattan, Quigley Company is a subsidiary of
Pfizer Inc which used to produce and market a broad range of
refractories and related products to customers in the iron, steel,
glass and other industries. The Company filed for chapter 11
protection on September 3, 2004 (Bankr. S.D.N.Y. Case No.
04-15739) to resolve legacy asbestos-related liability. When the
Debtor filed for protection from its creditors, it listed assets
of $155,187,000 and debts of $141,933,0000. Pfizer has agreed to
contribute $405 million to an Asbestos Claims Settlement Trust
over 40 years through a note, contribute approximately
$100 million in insurance and forgive a $30 million loan to
Quigley. Michael L. Cook, Esq., at Schulte Roth & Zabel LLP,
represents the Company in its restructuring efforts.
QUIGLEY COMPANY: Wants Ordinary Course Professionals to Continue
----------------------------------------------------------------
Quigley Company, Inc. asks the U.S. Bankruptcy Court for the
Southern District of New York for permission to retain
professionals it turns to in the ordinary course of its business
to render services relating to the management, defense and
settlement of the asbestos-related personal injury claims against
the Company.
Quigley, being a wholly-owned subsidiary of Pfizer, employs the
same professionals who also represent Pfizer in the management,
defense and settlement of toxic tort claims.
The Debtor submits that it would be costly and administratively
cumbersome to the Company and to the Court to require each
Ordinary Course Professional to file and prosecute separate
employment and compensation applications.
Quigley assures the Court that no individual will be paid in
excess of $30,000 per month without prior approval.
Quigley assures the Court that these professionals may hold
certain unsecured claims but none of which are materially adverse
to the Company.
Headquartered in Manhattan, Quigley Company is a subsidiary of
Pfizer Inc which used to produce and market a broad range of
refractories and related products to customers in the iron, steel,
glass and other industries. The Company filed for chapter 11
protection on September 3, 2004 (Bankr. S.D.N.Y. Case No.
04-15739) to resolve legacy asbestos-related liability. When the
Debtor filed for protection from its creditors, it listed assets
of $155,187,000 and debts of $141,933,0000. Pfizer has agreed to
contribute $405 million to an Asbestos Claims Settlement Trust
over 40 years through a note, contribute approximately
$100 million in insurance and forgive a $30 million loan to
Quigley. Michael L. Cook, Esq., at Schulte Roth & Zabel LLP,
represents the Company in its restructuring efforts.
QWEST COMMS: Expands Wireless Services to Three New Mexico Cities
-----------------------------------------------------------------
Qwest Communications International, Inc., (NYSE: Q) expanded its
nationwide wireless voice service to residential and small-
business customers in Las Cruces, Alamogordo and Clovis, New
Mexico. For the first time, residents in these cities can choose
Qwest Wireless for competitive national or state service plans.
Qwest's nationwide calling plans start as low as $34.99 for 500
minutes when customers combine wireless with any other Qwest
service on a single bill. More information about these new plans
is available at http://www.qwest.com/
"Incorporating nationwide wireless calling into our Qwest Choice
bundle creates one of the industry's most compelling offers for
customers," said John Badal, Qwest president for New Mexico.
"This new wireless offer is part of our larger plan to provide
customers with greater choice and flexibility when it comes to
selecting communications services."
All Qwest nationwide plans include the following exclusive
integrated features at no extra charge for customers who have a
Qwest home or office phone:
* Bundle Discounts - Customers receive a monthly discount on
eligible national wireless price plans when they combine
wireless with any other Qwest service on a single bill.
* One Number Service - Customers can automatically have their
home or office calls routed directly to their wireless phone
- so they can stay connected even when they are on the go.
* Voice Mail Link - A simple way for customers to integrate
their wireless phone with their home or office voice mail.
With Voice Mail Link, any call not answered on a customer's
Qwest Wireless phone is directed to the home or office voice
mail box, and a message notification is sent to both the home
(or office) phone and the wireless phone.
Additionally, both residential and small-business customers can
choose from the most competitive shared plans available, including
free calls between wireless phones on the plan and free calls to
and from their Qwest wireline phone (combined bill required to
receive free calls to and from the BTN).
Qwest Wireless data services, including two-way text-messaging and
new advanced data services such as picture phone messaging,
downloadable ring-tones and games, are also available.
Customers can call 1-866-4BEST-4U for information on residential
wireless service and 1-800-603-6000 for more information on small-
business wireless service.
About Qwest
Qwest Communications International, Inc., (NYSE:Q) is a leading
provider of voice, video and data services. With more than 40,000
employees, Qwest is committed to the "Spirit of Service" and
providing world-class services that exceed customers' expectations
for quality, value and reliability. For more information, visit
the Qwest Web site at http://www.qwest.com/
Qwest's June 30, 2004, balance sheet shows a stockholders' deficit
totaling $1,909,000,000 -- swelling 53% from the $1,251,000,000
shareholder deficit reported at March 31, 2004.
QUESTERRE ENERGY: Will Distribute Options After CCAA Emergence
--------------------------------------------------------------
On August 30, 2004, Questerre Energy Corporation (QEC:TSX) granted
incentive stock options to directors, employees and consultants to
purchase up to an aggregate of 2,315,000 common shares at $0.10
per common share. To facilitate the orderly implementation of its
plan of arrangement under the Companies' Creditors Arrangement
Act, Questerre has elected to defer this option grant until the
Company emerges from CCAA protection. Subject to a Court sanction
hearing to be held on or before September 10, 2004, Questerre
anticipates emerging from CCAA protection prior to September 30,
2004.
Questerre Energy Corporation is a Calgary-based independent
resource company actively engaged in the exploration for and
development, production and acquisition of large-scale natural gas
projects in Canada.
REPERFORMING LOAN: Moody's Puts Low-B Ratings on Classes B-3 & B-4
------------------------------------------------------------------
Moody's Investors Service assigned Aaa to B2 ratings to the senior
and subordinate classes of the Reperforming Loan REMIC Trust 2004-
R2 mortgage pass-through certificates. The transaction consists
of the securitization of FHA insured and VA guaranteed
reperforming loans virtually all of which were repurchased from
GNMA pools.
The credit quality of the mortgage loans underlying this
securitization is comparable to that of mortgage loans underlying
subprime securitizations. However after the FHA and VA insurance
is applied to the loans, the credit enhancement levels are
comparable to the credit enhancement levels for prime-quality
residential mortgage loan securitizations. The insurance covers a
large percent of any losses incurred as a result of borrower
defaults.
The Federal Housing Administration -- FHA -- is a federal agency
within the Department of Housing and Urban Development -- HUD --
whose mission is to expand opportunities for affordable home
ownership, rental housing, and healthcare facilities. The
Department of Veterans Affairs -- VA, formerly known as the
Veterans Administration, is a cabinet-level agency of the federal
government.
The rating of this pool is based on the credit quality of the
underlying loans and the insurance provided by FHA and the
guarantee provided by VA. Specifically, about 82% of the loans
have insurance provided by FHA while the rest of the loans have a
guarantee provided by VA. The rating is also based on the
transaction's cash flow and legal structure.
The complete rating action is as follows:
Issuer: NAAC Reperforming Loan Remic Trust 2004-R2
Class Amount ($) Rate Rating
----- ------ --- -----------
A1 $131,258,040 6.50% Aaa
A2 33,468,960 7.00% Aaa
A3 30,000,000 7.50% Aaa
PT 7,151,682 Variable Aaa
M 1,248,000 6.74% Aa2
B-1 1,144,000 6.74% A2
B-2 1,040,000 6.74% Baa2
B-3 937,000 6.74% Ba2
B-4 729,000 6.74% B2
The notes are being offered in privately negotiated transactions
without registration under the 1933 Act. The issuance was
designed to permit resale under Rule 144A.
REPURCHASES CORP: Case Summary & 4 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Repurchases Corporation
330 South Wells Street #712
Chicago, Illinois 60606
Bankruptcy Case No.: 04-32933
Chapter 11 Petition Date: September 3, 2004
Court: Northern District of Illinois (Chicago)
Judge: Jack B. Schmetterer
Debtor's Counsel: Robert M Fishman, Esq.
Shaw Gussis Fishman Giantz Wolfson & Tow
321 North Clark Street, Suite 800
Chicago, Illinois 60610
Tel: 312-541-0151
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 4 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Miller Johson Steichon Kinard $2,402,159
5500 Wayzata Boulevard
Minneapolis, Minnesota 55416
Credit Suisse First Boston $702,444
Eleven Madison Avenue
7th Floor
New York, New York 10010
Robinson Curley & Clayton $166,803
Jack Feltl and Company Unknown
RIVERSIDE FOREST: Postpones Separation Time Under Rights Plan
-------------------------------------------------------------
Riverside Forest Products Limited's (TSX: RFP) Board of Directors
has resolved to defer the "Separation Time" under its shareholder
rights plan until such later date as may be determined by the
Board.
The separation of the rights would otherwise occur 10 trading days
after the August 25, 2004 announcement by Tolko Industries Ltd. of
its intention to make a take-over bid that is not a "Permitted
Bid" under the rights plan.
The rights plan, which was adopted by the Board in July 1999, was
approved by shareholders in 2000 and again in 2003.
Gordon W. Steele, Riverside Chairman, President and Chief
Executive Officer, said, "We put the plan in place in order to
give the company's shareholders sufficient time to assess a take-
over bid without undue pressure, and to give the Board the ability
to pursue alternatives designed to maximize shareholder value. The
plan is doing exactly what it was intended to do."
About Riverside Forest
Riverside Forest Products Limited is the fourth largest lumber
producer in British Columbia with over 1.0 Bbf of annual capacity
and an annual allowable cut of 3.1 million cubic metres. The
company is also the second largest plywood and veneer producer in
Canada.
* * *
As reported in the Troubled Company Reporter on August 27, 2004,
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit and senior unsecured debt ratings on Kelowna,
B.C.-based Riverside Forest Products Ltd. on CreditWatch with
developing implications following the company's announcement that
it would reject an unsolicited takeover offer from privately held
Tolko Industries Ltd.
"The ratings could be lowered, raised, affirmed, or withdrawn
depending on how the situation evolves," said Standard & Poor's
credit analyst Daniel Parker. "Riverside's unsecured notes
contain a provision that requires the company to make an offer to
repurchase all the outstanding notes in the event of a change of
control. It is unclear whether Tolko's offer will be successful
and what the effect will be on the outstanding notes," Mr. Parker
added. Standard & Poor's uses a consolidated methodology and
would consider the credit profile of any successful acquisitor in
determining the effect on the credit ratings on Riverside. At
this stage, it is too early to determine the impact on the
ratings.
The ratings on Riverside reflect its narrow product concentration
in cyclical wood products, its vulnerability to foreign exchange
risk, and its acquisition strategy. Partially offsetting these
risks are the company's low-cost position in the manufacturing of
lumber and plywood, some vertical integration in fiber and energy,
and good liquidity.
SOLUTIA: Court Lets Retiree Comm. Hire American Express as Advisor
------------------------------------------------------------------
Judge Beatty of the U.S. Bankruptcy Court for the Southern
District of New York authorizes the Official Committee of Retirees
of the chapter 11 cases of Solutia, Inc., and its debtor-
affiliates to retain Scott P. Peltz and American Express Tax &
Business Services, Inc., as its financial advisor.
Judge Beatty clarifies that the Debtors are not required to
indemnify American Express as a condition of its retention.
American Express will be compensated for its services as Carve-Out
Expenses pari passu with other professionals employed in the
Debtors' Chapter 11 cases.
As reported in the Troubled Company Reporter on May 12, 2004, the
Retirees Committee requires a financial advisor to assist it in
these Chapter 11 cases. The Retiree Committee's ability to manage
and coordinate its efforts, maximize the value of the estate for
the creditors, and participate in a Chapter 11 plan process is
dependent on, among other things, the retention and dedication of
a financial advisor who possesses strong experience in the
bankruptcy field, as well as other requisite knowledge and skills.
The Retiree Committee believes that a financial advisor with
strong financial management, financial reporting, bankruptcy
negotiation experience and leadership is critical.
Mr. Doyle relates that Mr. Peltz and American Express are highly
qualified to be the financial advisor for the Retiree Committee.
Mr. Peltz is a certified public accountant. Mr. Peltz is
currently a Senior Managing Director at American Express, Chairman
of American Express' National Corporate Recovery Practice, and
Chairman of American Express' Litigation Service Division. Mr.
Peltz has been employed in this capacity with American Express and
its predecessor firm since 1997.
American Express is the ninth largest accounting and financial
services firm in the United States with over 2,800 professionals.
The firm has a prominent bankruptcy and litigation services
practice with specialized knowledge in business analysis,
corporate finance, accounting, valuation, forensic investigation,
actuarial and other areas relevant to the case.
Mr. Peltz and American Express have been involved as a financial
advisor in many large national and international corporate
bankruptcies including Outboard Marine Corporation, Bridge
Information Systems, and National Century Finance.
According to Mr. Doyle, American Express' services to the Retiree
Committee will include:
(a) consulting with Solutia, Inc., the Retiree Committee and
other parties-in-interest concerning administration of the
estate;
(b) investigating the acts, conduct assets, liabilities and
financial condition of Solutia, the operation of its
business and the desirability of the continuance of the
business and any other matter relevant to the case of the
retiree issues;
(c) analyzing the Debtors' operating budgets, cash flow
projections, DIP financing and other financial information
and report findings to the Retiree Committee;
(d) advising the Retiree Committee on asset valuation and
related issues;
(e) assisting and advising the Retiree Committee in
developing, evaluating, structuring or negotiating the
terms and conditions of a Chapter 11 reorganization plan
with respect to retiree claims and rights;
(f) evaluating and monitoring contemplated sales or transfers
of the Debtors' business or assets;
(g) advising the Retiree Committee on the status of the asset
sales process, related negotiations and the desirability
of proposals received for contemplated sales or transfers
of the Debtors' businesses or assets;
(h) providing litigation support services, advice and
testimony, to the extent necessary, in any proceeding
before the Bankruptcy Court;
(i) providing the Retiree Committee with other accounting and
financial advisory services as the Retiree Committee may
require during the course of the Debtors' Chapter 11
cases;
(j) reviewing documentation related to claims held by various
groups of Retirees;
(k) coordinating with The Segal Company to evaluate proposals
concerning retiree benefits; and
(l) consulting with The Segal Company regarding findings from
actuarial benefits consulting to assist the retiree in
formulating a plan.
American Express' professionals are billed the same rates in both
bankruptcy and non-bankruptcy matters. Mr. Peltz will be billed
at $390 per hour. Should additional employees be added to the
engagement, their hourly fees would be:
Managing Directors and Directors $315 - 390
Senior Managers and Managers 175 - 280
Consultants and other Staff 90 - 210
The Debtors will also reimburse Mr. Peltz and American Express for
all reasonable out-of-pocket expenses incurred in connection with
the engagement.
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection
from their creditors, they listed $2,854,000,000 in assets and
$3,223,000,000 in debts. (Solutia Bankruptcy News, Issue No. 22;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SOUTHEASTERN HOLDINGS: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Southeastern Holdings of Georgia, LLC
1850 Cobb Parkway South
Marietta, Georgia 30060
Bankruptcy Case No.: 04-74663
Type of Business: Google.com shows that an auto dealership is
located at 1850 Cobb Parkway in Marietta, Ga.
Chapter 11 Petition Date: September 3, 2004
Court: Northern District of Georgia (Atlanta)
Judge: C. Ray Mullins
Debtor's Counsel: Evan M. Altman, Esq.
6085 Lake Forrest Drive, Suite 300-B
Atlanta, Georgia 30328
Tel: (404) 845-0695
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest creditors.
SPIEGEL INC: Court Allows SPCP Group's Claim for $361,877
---------------------------------------------------------
On April 15, 2003, Eddie Bauer, Inc., and Grupo M Industries,
S.A., entered into a letter agreement which provided, inter alia,
that Grupo had a $657,958 prepetition trade claim -- $296,081 of
which would be paid by Eddie Bauer, leaving Grupo a $361,877 non-
priority unsecured claim. Eddie Bauer paid Grupo the $296,081
pursuant to the Critical Vendor Letter Agreement.
On May 23, 2003, Eddie Bauer filed its Schedules of Assets and
Liabilities, wherein Grupo is scheduled as having a contingent
unliquidated claim. In addition, Eddie Bauer of Canada, Inc.,
filed its Schedules of Assets and Liabilities, which also
scheduled Grupo as having a contingent unliquidated claim.
On September 29, 2003, Grupo filed a proof of claim -- Claim No.
2507 -- against Eddie Bauer for $657,958. Grupo has not filed a
proof of claim against any other Debtor.
On April 5, 2004, Grupo's Claim was transferred to SPCP Group,
L.L.C. SPCP Group represents and warrants that it owns Claim No.
2507.
The Debtors have engaged in productive discussions with SPCP,
reviewed their books and records, and determined that Grupo holds
a general unsecured non-priority claim for $361,877 against Eddie
Bauer, and that Grupo does not have any other claims against the
Debtors.
Accordingly, in a Court-approved stipulation, Eddie Bauer and
SPCP agreed that:
(a) Claim No. 2507 is fixed and allowed as a general unsecured
non-priority claim for $361,877 against Eddie Bauer; and
(b) Grupo does not have any other claims against the Debtors.
Headquartered in Downers Grove, Illinois, Spiegel, Inc. --
http://www.spiegel.com/-- is a leading international general
merchandise and specialty retailer that offers apparel, home
furnishings and other merchandise through catalogs, e-commerce
sites and approximately 560 retail stores. The Company filed for
Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.
03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,
at Shearman & Sterling represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $1,737,474,862 in assets and
1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 31;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
STELCO INC: Stelware Sale Hearing Rescheduled to Sept. 24
---------------------------------------------------------
Stelco Inc. (TSX:STE) reported that the Court hearing to review
and, if appropriate, to approve the processes for the sale of
Stelwire, Stelpipe and Stelfil, scheduled to take place yesterday
morning, has been rescheduled for September 24, 2004.
This will provide additional time in which the Company and
stakeholders can seek to resolve outstanding issues with respect
to the proposed sales and related process.
Stelco also indicated that it would seek to extend the stay period
under its Court-supervised restructuring process during that same
hearing. The stay period currently expires on September 30th.
Stelco Inc., which is currently undergoing CCAA restructuring
proceedings, is a large, diversified steel producer. Stelco is
involved in all major segments of the steel industry through its
integrated steel business, mini-mills, and manufactured products
businesses. Consolidated net sales in 2003 were $2.7 billion.
VIAD CORP: GES Exposition Prepares to Handle Clients Amidst Strike
------------------------------------------------------------------
GES Exposition Services, Inc., Viad Corp's (NYSE:VVI) its
convention services company, is fully prepared to continue
operating and servicing their clients throughout the duration of a
strike by the Las Vegas Teamsters Local 631. Members of the union
provide a portion of the workforce in the set up and dismantling
of expositions in Las Vegas, Nevada. Union negotiators rejected an
offer made jointly by GES and another general services contractor,
Freeman Decorating Company on Saturday, September 4, 2004.
Security plans are in place at the Las Vegas trade show venues
being picketed by union members. GES has alternate sources of
workers to service their upcoming shows if necessary. Viad
anticipates the strike will negatively impact its 2004 results,
and that the extent of any impact will depend on the length of the
strike.
Viad is an S&P SmallCap 600 company. Major subsidiaries include
GES Exposition Services of Las Vegas, Exhibitgroup/Giltspur of
Chicago, Brewster Transport Company Limited of Banff, Alberta,
Canada, and Glacier Park, Inc. of Phoenix. For more information,
visit the company's Web site at http://www.viad.com/
* * *
As reported in the Troubled Company Reporter on July 5, 2004,
Standard & Poor's Ratings Services lowered its ratings on Phoenix,
Arizona-based Viad Corp., including its long- and short-term
corporate credit ratings, which were lowered to 'BB' and 'B',
respectively, from 'BBB' and 'A-2'. In addition, the ratings were
removed from CreditWatch, where they were placed on July 24, 2003.
All ratings for Viad were subsequently withdrawn.
"The ratings action follows Viad's spin-off of MoneyGram
International Inc., its payment services business, to its
shareholders," said Standard & Poor's credit analyst Steven
Picarillo.
Since announcing the spin-off of MoneyGram and concurrent with the
transaction, Viad has tendered the vast majority of its public
debt. All ratings on Viad have been withdrawn, as Standard &
Poor's will no longer rate this company.
W.R. GRACE: Holds Allowed $21,723,767 Claim Against KWELMBS
-----------------------------------------------------------
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub, P.C., in Wilmington, Delaware, relates that the
KWELMBS Companies issued insurance policies in favor of W.R.
Grace & Co., and its debtor-affiliates. The KWELMBS Companies
are:
* KWELM Management Services Limited
* Walbrook Insurance Company Limited
* El Paso Insurance Company Limited
* Lime Street Insurance Company Limited
* Mutual Reinsurance Company Limited
* Bermuda Fire & Marine Insurance Company Limited
* Southern American Insurance Company
The KWELMBS Companies were subsequently adjudicated insolvent.
The Debtors have a $24,097,509 coverage remaining under these
insurance policies, and they also have claims against these
policies that exceed this amount.
Aside from being insolvent, the KWELMBS Companies are also bound
by:
-- Schemes of Arrangement pursuant to Section 425 of the
Companies Act of 1985 of Great Britain; and
-- in the case of Mutual Reinsurance Company Limited and
Bermuda Fire, Section 99 of the Companies Act of 1981 of
Bermuda.
Southern American is also insolvent and has been ordered
liquidated by the Third Judicial District of Salt Lake County,
Utah.
Ms. Jones notes that the KWELMBS Companies subscribed to the H.S.
Weavers Underwriting Agency Limited Underwriting Stamp.
The United States Bankruptcy Court for the Southern District of
New York has issued Permanent Injunction Orders, pursuant to
Section 304 of the Bankruptcy Code, that, among other things,
enjoin the commencement or continuation of any judicial action or
proceedings against the KWELMBS Companies except in accordance
with the provisions of their Schemes of Arrangement.
The Southern American Supervisory Court has issued a permanent
injunction order pursuant to Section 31A-27-336 of the Utah Code,
which, among other things, enjoins the commencement or
continuation of any judicial action or proceeding against Southern
American.
KWELM Settlement Agreement
On August 19, 1996, certain of the Debtors and KWELM Management --
on the KWELM Companies' behalf -- entered into an agreement to
settle Asbestos-Related Claims and Non-Asbestos Products Liability
Claims, which agreement substantially adopted the terms and
conditions of the Confidential Settlement Agreement dated November
17, 1995, between certain of the Debtors and certain solvent
London Market insurance companies. Certain of the Debtors entered
into the Original KWELM Settlement Agreement, in part, because of
uncertainty regarding its ability to collect against the insurers
under the Insurance Policies.
KWELMBS Settlement Agreement
Since the execution of the Original KWELM Settlement Agreement,
the Debtors have submitted additional Asbestos-Related Claims to
the KWELMBS Companies. Certain of the Debtors and the KWELMBS
Companies entered into a Privileged and Confidential Settlement
Agreement and Mutual Release, which would settle different
categories of claims than the claims settled pursuant to the
Original KWELM Settlement Agreement.
According to Ms. Jones, the latest date on which a claim can be
made against the KWELMBS Companies pursuant to their Schemes of
Arrangement, or against Southern American pursuant to the order of
the Southern American Supervisory Court dated June 21, 2004, is
September 29, 2004. The KWELMBS Companies have indicated that if
the KWELMBS Settlement Agreement is not executed and approved
before the KWELMBS Bar Date, then they will not pursue the
proposed settlement.
Pursuant to the KWELMBS Settlement Agreement, the parties seek to
settle and compromise all Asbestos-Related Claims not previously
made under the Original KWELM Settlement Agreement as part of the
Bar Date determination of liability procedures. The Debtors have
concluded that this settlement is fair and reasonable given the
circumstances of the KWELMBS Companies.
The KWELMBS Settlement Agreement provides for the allowance of the
Debtors' claim, in the KWELMBS Companies' insolvency proceedings,
for $21,723,767, which represents the full net-present-value of
the Debtors' remaining insurance coverage. Approximately
$11 million would be paid to the Debtors within 90 days after the
Court's approval of the KWELMBS Settlement Agreement.
According to Ms. Jones, the Agreed Amount is allocable to several
obligations of the individual KWELMBS Companies. These payments
will be subject to the terms and conditions of the Schemes of
Arrangement and the Southern American Liquidation.
The agreed amount represents the $24,097,509 remaining payable
under the policy limits of the Insurance Policies, discounted to
net present value based on discount rates established in the
Schemes of Arrangement for all payments to creditors, and
estimated timing of claim payments under the Insurance Policies if
they would have been paid in accordance with the policies' terms.
Absent the settlement, the Debtors would have been required to
file a proof of claim in the insurers' insolvency proceedings.
However, any payments on proofs of claim filed in the insolvency
proceedings are not expected to be made until 2006. Furthermore,
this process would subject the Debtors to risk concerning the
ultimate amount of recovery. The Debtors believe that any
recovery would not be materially greater than the $11 million they
will receive pursuant to the KWELMBS Settlement Agreement.
The Debtors and the KWELMBS Companies intend to exchange mutual
releases.
The Debtors ask the U.S. Bankruptcy Court for the District of
Delaware to approve the KWELMBS Settlement Agreement.
Headquartered in Columbia, Maryland, W.R. Grace & Co., --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally. The Debtors filed for chapter 11
protection on April 2, 2001 (Bankr. Del. Case No: 01-01139).
James H.M. Sprayregen, Esq., at Kirkland & Ellis and Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl et al. represent the
Debtors in their restructuring efforts. (W.R. Grace Bankruptcy
News, Issue No. 70; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
WAMU MORTGAGE: Moody's Assigns Low-B Ratings to Four Cert. Classes
------------------------------------------------------------------
Moody's Investors Service assigned Aaa to B2 ratings to the senior
and subordinate classes of the WaMu Mortgage Pass-Through
Certificates, Series 2004-RP1. The transaction consists of the
securitization of FHA insured and VA guaranteed reperforming loans
virtually all of which were repurchased from GNMA pools.
The credit quality of the mortgage loans underlying this
securitization is comparable to that of mortgage loans underlying
subprime securitizations. However after the FHA and VA insurance
is applied to the loans, the credit enhancement levels are
comparable to the credit enhancement levels for prime-quality
residential mortgage loan securitizations. The insurance covers a
large percent of any losses incurred as a result of borrower
defaults.
The Federal Housing Administration -- FHA -- is a federal agency
within the Department of Housing and Urban Development -- HUD --
whose mission is to expand opportunities for affordable home
ownership, rental housing, and healthcare facilities. The
Department of Veterans Affairs -- VA, formerly known as the
Veterans Administration, is a cabinet-level agency of the federal
government.
The rating of this pool is based on the credit quality of the
underlying loans and the insurance provided by FHA and the
guarantee provided by VA. Specifically, about 82% of the loans
have insurance provided by FHA while the rest of the loans have a
guarantee provided by VA. The rating is also based on the
transaction's cash flow and legal structure.
The complete rating action is as follows:
Issuer: Wamu Mortgage Pass-Through Certificates, Series 2004-RP1
Class Amount ($) Rate Rating
----- ------ --- -----------
I-F $394,505,000 Variable Aaa
I-HJ Notional Variable Aaa
I-S Notional Variable Aaa
II-A 90,721,000 Variable Aaa
I-B-1 2,642,000 Variable Aa2
I-B-2 2,236,000 Variable A2
I-B-3 1,829,000 Variable Baa2
I-B-4 1,626,000 Variable Ba2
I-B-5 1,423,000 Variable B2
II-B-1 416,000 Variable Aa2
II-B-2 370,000 Variable A2
II-B-3 324,000 Variable Baa2
II-B-4 324,000 Variable Ba2
II-B-5 231,000 Variable B2
The notes are being offered in privately negotiated transactions
without registration under the 1933 Act. The issuance was
designed to permit resale under Rule 144A.
WEDDINGSTORE, INC.: Stores Close & Leave Brides Dressless
---------------------------------------------------------
Pennsylvania Attorney General Jerry Pappert filed a civil lawsuit
this week and sought a Special Injunction against the owners of a
bridal business that closed stores before delivering the bridal
gowns and wedding party apparel that dozens of customers purchased
for their upcoming weddings.
The lawsuit was filed in the Commonwealth Court of Pennsylvania
(Docket No. 649 MD 2004) on Sept. 8, 2004, naming:
Weddingstore, Inc.
dba Kaufman's Wedding World,
4807 Penn Wood Drive
Altoona, Pennsylvania
- and -
Harry and Margaret Kaufman
and Ira Kaufman, individually and
dba Kaufman's Wedding World
1301 11th Avenue
Altoona, Pennsylvania
as defendants. The lawsuit accuses them of numerous violations of
Pennsylvania's Unfair Trade Practices and Consumer Protection
Law. The injunction asks the court to freeze the defendants'
assets, release all purchased on-site merchandise to consumers and
prohibit the defendants from removing other goods, merchandise or
inventory from the stores' premises. The defendants operate
locations in Pennsylvania, Maryland, Ohio and West Virginia and
claim to be reorganizing their business.
The Company's Web site at http://www.weddingworld.com>http://www.weddingworld.com
says the retailer operates a multi-store chain and has been in
business since 1884. The Associated Press reports that a phone
number for Kaufman's Wedding World in Altoona was disconnected and
phone calls to Weddingstore and Harry Kaufman went unanswered, nor
did the company reply to an e-mail sent by the AP Wednesday
evening.
According to investigators, the defendants closed their
Pennsylvania shops without delivering all consumers' pre-paid
merchandise including bridal gowns, wedding party apparel,
occasional dresses and other bridal accessories. In some cases,
consumers do not have the items that they ordered and purchased
from the defendants for their weddings scheduled to take place
this weekend.
"In this case, an immediate injunction was necessary to ensure
that consumers getting married this weekend receive possession of
their bridal gowns and wedding party apparel," the Attorney
General said in a public statement. "We're asking the court to
require the defendants to remain open until the immediate needs of
these particular consumers are met. In addition, we're seeking an
order freezing the defendants' assets and prohibiting them from
removing any items or inventory from the closed stores unrelated
to consumers' orders."
The Pennsylvani Bureau of Consumer Protection has received
complaints from consumers throughout Pennsylvania who claimed that
the defendants failed to honor the promised delivery dates for
their bridal gowns and wedding party dresses and other apparel. In
some instances, consumers said the items were either never
delivered or delivered well beyond the date agreed upon in their
contracts. In other instances, consumers received items that they
did not order or that were of a lesser quality.
"Several consumers told my office that they were forced sometimes
days before their weddings to make other arrangements for their
bridal gowns and bridesmaids' apparel," Mr. Pappert said. "Many
others complained that the dresses were delivered too late to be
professionally altered. In our view, this is an unacceptable
business practice and the allegations are particularly egregious
given that the victims are consumers preparing for their
weddings."
Other complaints included claims that the defendants failed to
respond to consumers' questions and concerns regarding their
refund requests. The defendants allegedly failed to refund
consumers in a timely manner despite promises to return their
money promptly or in a specific time period.
Pappert said the lawsuit asks the court to require the defendants
to:
-- Pay full restitution to consumers who file complaints with
the Bureau of Consumer Protection.
-- Pay civil penalties of $1,000 per violation and $3,000 for
each violation involving a consumer age 60 or older.
-- Satisfy all outstanding orders currently in their
possession.
The lawsuit also asks the court to appoint a receiver to determine
and collect the defendants' assets to satisfy the court's order.
The lawsuit and Special Injunction was filed in Commonwealth
Court. The case is being handled by Senior Deputy Attorney
General Seth A. Mendelsohn in the Bureau of Consumer Protection in
Harrisburg.
Press reports suggest the chain's filed for bankruptcy. The
Bankruptcy Clerk in the Eastern District of Pennsylvania has no
record of a recent bankruptcy filing under any of the defendants'
names.
WIRELESS INFOTECH: Voluntary Chapter 7 Case Summary
---------------------------------------------------
Debtor: Wireless Infotech LLC
17 South Second Street
Harrisburg, Pennsylvania 17101
Bankruptcy Case No.: 04-05334
Type of Business: The Debtor provides high-speed wireless
internet access services.
See http://www.wireless-infotech.com/
Chapter 7 Petition Date: September 2, 2004
Court: Middle District of Pennsylvania (Harrisburg)
Judge: Mary D. France
Debtor's Counsel: Marc W. Witzig, Esq.
Cunningham & Chernicoff
2320 North Second Street
P.O. Box 60457
Harrisburg, PA 17106-0457
Tel: 717-238-6570
Estimated Assets: Unstated
Estimated Debts: $500,000 to $1 Million
WORLDCOM INC: Cuts Workforce by 12,000 in First Half of 2004
------------------------------------------------------------
During the first half of 2004, MCI, Inc., announced reductions in
its workforce primarily from its Operations and Technology
department, and as a result of closing three consumer call centers
and reducing staffing in three others, in large part due to the
effects of "Do Not Call" telemarketing laws. As of June 30, 2004,
Robert T. Blakely, MCI Executive Vice President and Chief
Financial Officer, reports, approximately 12,000 individuals in
the Company's workforce have been identified and notified that
their positions would be eliminated.
In the three and six-month periods ended June 30, 2004, Mr.
Blakely tells the Securities and Exchange Commission, the Company
recorded $90 million and $144 million, as selling, general and
administrative expenses and costs of services and products for
employee termination costs in its condensed consolidated
statements of operations. "In the three and six-month periods
ended June 30, 2003, the Company recorded $17 million and $61
million, related to employee severance programs as reorganization
items, net in its condensed consolidated statements of operations.
During the three and six-month periods ended June 30, 2004,
approximately 6,000 and 7,800 employees, across all business
segments were terminated.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (Worldcom Bankruptcy News,
Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000)
* Alvarez & Marsals Names J. Vanderveen Chicago's Managing Dir.
---------------------------------------------------------------
Jonathan Vanderveen has joined Alvarez & Marsal's Dispute Analysis
and Forensics group as a Managing Director in the firm's Chicago
office.
With over 18 years of financial reporting experience, Mr.
Vanderveen specializes in providing corporate investigative
services to clients related to questionable financial transactions
and/or accounting irregularities. He also provides post-
acquisition arbitration services and consultative and expert
witness services to clients involved in litigation or business
disputes.
"Jonathan brings an outstanding background in forensic accounting
to Alvarez & Marsal," said Bill Abington, an A&M Managing Director
and co-head of the firms Dispute Analysis and Forensics group.
His expertise in analyzing complex financial information and
substantial experience dealing with accounting investigations
involving SEC registrants will be invaluable in serving the needs
of a broad array of clients.
Over the course of his career, Mr. Vanderveen has consulted
numerous special committees of public companies surrounding
allegations of improper financial statement reporting. In some
cases, these investigations have resulted in financial
restatements, securities litigation claims, Securities and
Exchange Commission or other regulatory investigations, and
Department of Justice actions.
Prior to joining A&M, Mr. Vanderveen served as a partner in a Big
Four public accounting firm. Before, he held various financial
reporting positions at a public company in the software industry.
A certified public accountant and a certified fraud examiner, Mr.
Vanderveen, 40, earned a bachelor's degree from Hope College. He
is a member of the American Institute of Certified Public
Accountants, the Illinois CPA Society, and the Association of
Certified Fraud Examiners. He resides in Glenview, Illinois.
Alvarez & Marsals Dispute Analysis and Forensics group provides a
range of analytical and investigative services to major law firms,
corporate counsel and management involved in complex legal and
financial disputes. DA&F provides sophisticated financial and
economic analysis to assist clients in resolving high-stakes
issues ranging from internal matters to litigation - in the
boardroom to the courtroom. The group also conducts corporate,
technology and healthcare investigations to help companies
identify and mitigate risks and properly address internal or
external financial inquiries. DA&F services include: expert
testimony, lost profits analysis, business valuation, business
interruption claims, accounting and financial analysis, claims
preparation and review, arbitration service, forensics
investigations, technology forensic investigations including
electronic evidence and computer forensic analysis and healthcare
investigations.
About Alvarez & Marsal
Founded in 1983, Alvarez & Marsal is a global professional
services firm that helps organizations in the corporate and public
sectors navigate complex business and operational challenges. With
professionals based in locations across the US, Europe, Asia, and
Latin America, Alvarez & Marsal delivers a proven blend of
leadership, problem solving and value creation. Drawing on its
strong operational heritage and hands-on approach, Alvarez &
Marsal works closely with organizations and their stakeholders to
implement change and favorably influence outcomes. For more
information please visit http://www.alvarezandmarsal.com/or
contact Rebecca Baker, chief marketing officer, at
rbaker@alvarezandmarsal.com or Jonathan Vanderveen at
jvanderveen@alvarezandmarsal.com
* Chadbourne & Parke Names Schumacher as Houston Managing Partner
-----------------------------------------------------------------
The international law firm of Chadbourne & Parke LLP named David
K. Schumacher Managing Partner of its Houston office. Since 2003,
Mr. Schumacher has been fulfilling the role as interim managing
partner while serving clients from both the Firm's Washington,
D.C. and Houston offices.
"David is a proven leader who will continue our strategy to grow
and diversify our presence in the Houston market," said Charles K.
O'Neill, the Firm's managing partner. "Over the years, David has
demonstrated strong leadership, strategic thinking, and solid
managerial skills, and I have every confidence that he will direct
our Houston office into a new era of growth and prosperity."
"I am honored to have been selected to manage such a talented
group of lawyers and staff," noted Mr. Schumacher. "I look forward
to building upon the Firm's efforts in the energy capital of the
United States, and am committed full time to ensure the continued
growth of our Houston office."
Mr. Schumacher is a member of the project finance practice and
represents both lenders to, and developers of, oil and gas
projects and independent power projects in the United States,
Latin America and Asia. The Houston office, opened in September
2002 to better serve the Firm's energy clients, plays a pivotal
role in the Firm's project finance group and its oil gas and LNG
practice, providing comprehensive legal services to clients
throughout the region and the world.
Lawyers in the office have extensive experience in all aspects of
energy transactions, including acquisitions and divestitures,
general corporate transactions, restructurings and refinancings,
project development and bank and capital markets financings. The
Houston office is also one of the hubs of the Firm's LNG and
natural gas practice, with special expertise in the structuring,
development and financing of production, pipeline and marine
transportation and receiving facilities, and commodity sale,
purchase, storage and transportation arrangements.
About Chadbourne & Parke LLP
Chadbourne & Parke LLP, an international law firm headquartered in
New York City, provides a full range of legal services, including
mergers and acquisitions, securities, project finance, corporate
finance, energy, telecommunications, commercial and products
liability litigation, securities litigation and regulatory
enforcement, white collar defense, intellectual property,
antitrust, domestic and international tax, reinsurance and
insurance, environmental, real estate, bankruptcy and financial
restructuring, employment law and ERISA, trusts and estates and
government contract matters. The Firm has offices in New York,
Washington, D.C., Los Angeles, Houston, Moscow, Kyiv, Warsaw
(through a Polish partnership), Beijing and a multinational
partnership, Chadbourne & Parke, in London. For additional
information, visit http://www.chadbourne.com/
* Singer Lewak Wins 80th Largest Accounting Firm Award by IPA
-------------------------------------------------------------
Singer Lewak Greenbaum & Goldstein, LLP (SLGG), a leading
California-based CPA and Management Consulting firm, has been
ranked by Inside Public Accounting (IPA) as the 80th largest
accounting firm in the country.
IPA, formerly Bowman's Report, an independent newsletter for the
accounting profession, reports and analyzes news, trends,
strategies and politics. It also issues Performance Analysis and
Benchmark, a tool used to benchmark a firm's fiscal and management
performance against almost 300 other accounting firms nationwide.
"Our goal is to serve clients well and create opportunities for
all of our employees and partners. One measure of our ability to
achieve that success is to be in the top ranks of our industry.
Our professionals work hard at delivering quality client services
and are dedicated to the helping our clients to be successful,"
said David Krajanowski, CPA and Managing Partner of the firm.
About SLGG
Singer Lewak Greenbaum & Goldstein LLP is the largest certified
public accounting and management consulting firm headquartered in
Los Angeles, Calif. Established in 1959, the firm has grown to
more than 150 professionals and support staff. Today, we serve a
broad range of clients ranging from individuals to family-owned
businesses to public companies in diverse industries. Our services
include audits & accounting, tax, business management as well as
specialty practice group services in litigation support, business
valuation, bankruptcy, and SEC services to publicly traded
companies. Singer Lewak Greenbaum & Goldstein LLP has offices in
Los Angeles, Santa Ana, and Ontario, Calif. Visit our web site at
http://www.slgg.com/
*********
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.
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. Yvonne L.
Metzler, Emi Rose S.R. Parcon, Bernadette C. de Roda, Rizande B.
Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie
Sabijon and Peter A. Chapman, Editors.
Copyright 2004. 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 $675 for 6 months delivered via e-
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*** End of Transmission ***