/raid1/www/Hosts/bankrupt/TCR_Public/040923.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 23, 2004, Vol. 8, No. 205
Headlines
AMES: District Court Affirms Dismissal of LFD's $8.9M Lawsuit
AMOROSO CONSTRUCTION: Case Summary & Largest Unsecured Creditors
ARMSTRONG: Court Expunges & Disallows Southwest Contract Claims
BANC OF AMERICA: S&P Puts Low-B Ratings on Six Certificate Classes
CALPINE CORP: Remarketing 5.75% Convertible Preferred Securities
CATHOLIC CHURCH: Tucson Wants to Employ Quarles & Brady as Counsel
CENTERPOINT ENERGY: Fitch Holds BB+ Rating Amidst Deliberations
CHARTWELL DIVERSIFIED: Completes Chapter 11 Reorganization Process
CHIQUITA BRANDS: Moody's Puts B2 Rating on Planned $250M Sr. Notes
CITATION CORP: Case Summary & 297 Largest Unsecured Creditors
COMMONWEALTH INDUSTRIES: Moody's Affirms B1 Senior Implied Rating
DELTA AIR: Names Rob Maruster VP - Atlanta Operations
D.R. HORTON: Moody's Assigns Ba1 Rating to $250M Senior Notes
EATON VANCE: Fitch Raises $14 Million Class D Notes' Rating to BB
ENCORE MEDICAL: S&P Puts B Rating on $180M Senior Secured Facility
ENDURANCE SPECIALTY: S. Patschak to Head Property Catastrophe Unit
ENRON CORP: Doesn't Want District Court to See PBGC Complaint
FRANK'S NURSERY: Hires Bankruptcy Services as Claims Agent
FRANKLIN CAPITAL: Gets Extension to Comply with AMEX Standards
FREMONT INVESTMENT: Moody's Assigns Ba2 Rating to Class M-8 Certs.
FRONTIER OIL: Moody's Lifts Senior Implied Rating to Ba3 from B1
FRONTIER OIL: Fitch Says Outlook is Positive on Low-B Rated Debts
FOSTER WHEELER: Successful Exchange Offer Cuts Debt by $450 Mil.
GIORGIO SHELLFISH: Case Summary & 16 Largest Unsecured Creditors
HOLLINGER INT'L: Declares $0.05 Per Share Quarterly Dividend
IMPERIAL SCHRADE: U.S. Trustee Meets Creditors on Oct. 18
INSTITUTE FOR CANCER: Case Summary & Largest Unsecured Creditors
INTEGRATED TELECOM: 3rd Cir. Tells Bankr. Court to Dismiss Case
INTERSTATE BAKERIES: Files for Chapter 11 Protection in W.D. Mo.
INTERSTATE BAKERIES: Case Summary & 30-Largest Unsecured Creditors
INTRAWEST CORPORATION: Offering $325 Million 7.50% Senior Notes
INTRAWEST CORP: S&P Assigns B+ Rating to $325M Senior Notes
IPSCO INCORPORATED: Fidelity Discloses 14.79% Equity Stake
ISPAT INLAND: Moody's Raises Senior Secured Ratings to B3
JILLIAN'S ENT: Stalking Horse Bidders Win Auction With $65 Million
JOLIET JUNIOR: Fitch Holds C Rating & Says Default "Inevitable"
MCI PROPERTIES: Case Summary & 4 Largest Unsecured Creditors
MEDQUEST INC: Moody's Assigns B1 Rating to $60 Million Term Loan
METROPOLITAN MORTGAGE: Files Joint Plan of Reorganization
MICROCELL TELECOM: Moody's Continues Review of Junk Ratings
MIRANT CORP: Asks Court to Establish Claim Estimation Procedures
MOONEY AEROSPACE: Needs More Time to File 2nd Quarter Report
MUELLER GROUP: Extends Exchange Offer Until Tomorrow
NATIONAL CENTURY: Court Refuses to Quash July Bank One Subpoena
OGLEBAY NORTON: Judge Approves Disclosure Statement
OGLEBAY NORTON: Wants Plan Filing Exclusivity Extended to Oct. 20
ORDERPRO LOGISTICS: Shareholders Demand Chairman's Resignation
ORMET CORP: Steelworkers Union Calls Reorganization Plan 'a Sham'
PACIFIC GAS: Wants CPUC to Approve $80 Million ERCA Settlement
PARMALAT USA: Dean Foods Outbids National Dairy in Auction
PEGASUS SATTELITE: Judge Haines Okays Employee Retention Program
PLAINS EXPLORATION: Inks New Oil Price Collars for 2005-2008
QWEST COMMS: Opens 2 Residential Solutions Centers in New Mexico
ROCKFORD CORP: Focuses on Core Business in Strategic Realignment
SCOTT ACQUISITION: U.S. Trustee Meets Creditors on Oct. 18
SEMINOLE TRIBE: S&P Assigns BB Issuer Credit Rating
SENECA GAMING: Extends 7-1/4% Sr. Debt Offer to Oct. 13
SK GLOBAL: Bureau of Customs Holds $1,819,485 Claim
SOLUTIA INC: Asks Court to Fix November 29 as Claims Bar Date
SYNIVERSE TECH: Moody's Places Ba3 Rating on $244.2M Term Loan
THE HOMESTEADS: U.S. Trustee Meets Creditors on Oct. 18
TOUCH AMERICA: Confirmation Hearing Scheduled for Sept. 30
UAL CORP: Trustee & Machinists Object to Fiduciary Appointment
US AIRWAYS: Court OKs Payment of Prepetition Employee Obligations
US AIRWAYS: Transformation Plan Negotiations with Pilots Continue
US AIRWAYS: Gets Court Okay to Pay Outside Maintenance Providers
UNITED AIRLINES: Revenue Passenger Miles Up 9.9% in August 2004
VLASIC: Campbell Present Two More Witnesses in $250M Spin-Off Suit
WORLDCOM INC: Asks Court to Disallow Celtic's $88.9M Claims
* Garden City Group Opens New West Coast Regional Headquarters
*********
AMES: District Court Affirms Dismissal of LFD's $8.9M Lawsuit
-------------------------------------------------------------
In 2001, LFD Operating, Inc., commenced an adversary proceeding to
compel the Debtors to turn over $8.9 million to them pursuant to a
contract.
LFD is the assignee of a licensing agreement dated Nov. 17, 1987,
as amended, originally between the Debtors and JBI Holding, Inc.,
for Baker to operate shoe departments in various Ames stores.
Baker subsequently assigned to LFD all of its rights in and to the
Agreement. LFD assumed all of Baker's obligations.
In return for a licensing fee taken out of the proceeds of LFD's
sales, the Debtors authorized LFD to operate the shoe departments
in various Ames stores. LFD furnished, staffed and operated the
departments. The sales were then processed through the Debtors'
cashiers and the regular channels of the Debtors' business. The
Debtors were obligated to turn over the proceeds, minus its share,
to LFD on a weekly basis.
Implementation of the Agreement
With respect to the actual implementation of the Agreement, the
Bankruptcy Court found that:
(a) Sales of LFD merchandise were received in the same cash
registers that received proceeds from the Debtors'
merchandise. The Debtors identified these sales at the
point of sale, and tracked them in a manner that permitted
LFD to receive daily transmissions showing its footwear
sales in the Debtors' stores. The Debtors maintained
separate and distinct records of all sales from LFD
merchandise;
(b) The Debtors would then use the information in its system
to calculate the total proceeds from LFD sales, and
calculate the amount that had to be remitted periodically
to LFD. The Debtors would produce a weekly statement of
LFD's sales for the second preceding week, and would also
remit the payment due according to that statement. Thus,
the Debtors would remit a payment on a weekly basis to LFD
for the sales that took place two weeks before that date;
(c) The Debtors did not maintain separate bank accounts for
the proceeds from LFD merchandise. Proceeds from LFD
sales were deposited along with the Debtors' other
proceeds in bank accounts, and at the Debtors' request,
thereafter transferred to certain blocked accounts the
Debtors established;
(d) In March 2001, the Debtors entered into a credit agreement
with a syndicate of banks and financial institutions
headed by General Electric Capital Corporation. The
agreement was collateralized by the Debtors' inventory as
reflected in a stack ledger inventory report and cash
proceeds from all sources. GECC would sweep all funds
from the blocked accounts into a concentration account,
and apply them according to the terms of the Credit
Agreement. GECC would then advance money to the Debtors
by depositing money into a blocked Disbursement Account,
which the Debtors used to pay all of its operating
expenses;
(e) From its Disbursement Account, the Debtors wired to LFD
every Monday the amount of Net Sales Proceeds owed to LFD
on a weekly basis; and
(f) The Debtors' credit limit under its agreement with GECC
was reduced by reserve amounts. One of these reserves was
a shoe sale reserve based on the monthly average of past
payments made by the Debtors to LFD. This reserve,
however, involved no physical segregation of the proceeds
of LFD shoe sales.
The Debtors ceased making wire transfers and did not wire to LFD
the $2 million in Net Sales Proceeds due to it on Aug. 13, 2001.
The Debtors also failed to pay LFD the Net Sales Proceeds owed on
August 20, August 27, September 3, and September 10, 2001.
LFD asserts that it is entitled to immediate payment of the
$8.9 million the Debtors owe it. LFD asserts that the Net Sales
Proceeds are its property and that the Debtors held only legal but
not equitable title to the proceeds. Pursuant to Section 541(d)
of the Bankruptcy Code, property in which the Debtors held legal
but not equitable title is exempt from the bankruptcy estate.
In March 2002, Bankruptcy Judge Arthur Gonzales held that the
disputed funds were the Debtors' property, and that LFD's claims
were no different than any unsecured creditor of the Debtors.
Bankruptcy Appeal
LFD took an appeal from Judge Gonzalez's Order and Judgment.
LFD asserts that the Bankruptcy Court should have simply enforced
the formal language of the Agreement, and not looked past the
language to inquire into the actual relationship between the
parties in determining ownership of the Net Sales Proceeds and the
character of the relationship between the parties.
LFD contends that the actual relationship between the parties was
in fact consonant with the terms of the Agreement, and therefore
the Bankruptcy Court should not have determined ownership and the
character of the relationship in opposition to the Agreement.
LFD disputes the Bankruptcy Court's failure to find a constructive
trust and denial of its subrogation claim.
District Court's Decision
Judge Sidney H. Stein of the United States District Court for the
Southern District of New York Court finds that the Bankruptcy
Court did not err in any of its holdings:
A. The Bankruptcy Court's Interpretation of the Agreement
LFD asserts that an examination past the formal contract
language is unwarranted when a creditor's rights are not at
stake, and therefore concludes that the Bankruptcy Court
should not have looked beyond the contract language because
GECC's rights were not "at stake." However, courts have not
required a finding that the debtor's other creditors have
inconsistent knowledge vis-a-vis the consistency of the
formal and substantive relationship between creditor and
debtor before setting aside formal contract language in
examining whether a trust or agency relationship was
established.
The Bankruptcy Court also held that despite the Agreement's
labeling of the Net Sales Proceeds as the property of LFD,
they were in fact the Debtors' property.
As a general rule, once funds are deposited in a bank account,
the account holder is presumed to have title to and control
over those funds. The factual record supports it. The Net
Sales Proceeds were deposited with the Debtors' other receipts
into its bank accounts. At no point were the Net Sales
Proceeds segregated from the rest of the Debtors' funds, or
precluded from GECC's sweep of the Debtors' blocked funds.
LFD was not paid from a segregated account holding the Net
Sales Proceeds, but rather from general disbursement accounts
in which the Debtors commingled funds and from which it paid
all of its operating expenses. LFD had no control over the
Net Sales Proceeds "once the funds were placed in Ames' cash
management system."
B. Agency
An essential characteristic of an agency relationship is that
the agent acts subject to the principal's direction and
control. If an alleged agent's acts concerning a certain
subject matter cannot be controlled and directed by the
principal, there is no agency relationship.
The Bankruptcy Court's finding that LFD did not have control
over the collection and handling of the Net Sales Proceeds by
the Debtors is completely supported by the factual record.
The Debtors' commingling of the Net Sales Proceeds, placement
of the Net Sales Proceeds in the swept blocked accounts, and
payment of LFD from general accounts are just as determinative
on the issue of agency.
C. Express Trust
The Bankruptcy Court also determined that no trust
relationship existed between LFD and Ames. The Debtors
commingled the Net Sales Proceeds with other funds as a
regular practice. In addition, the Debtors used the funds
between settlement dates for purposes other than paying LFD,
and then made payments to LFD out of general funds provided by
GECC. LFD provided no evidence to demonstrate the findings
are in clear error.
Accordingly, the Bankruptcy Court correctly held that the
actual relationship between the Debtors and LFD was a debtor-
creditor relationship, not a trust relationship.
D. Constructive Trust
In New York, a party seeking to establish entitlement to a
constructive trust must demonstrate:
(i) a confidential or fiduciary relationship;
(ii) a promise, express or implied;
(iii) a transfer made in reliance on that promise; and
(iv) unjust enrichment.
The Bankruptcy Court held that not only was there no fiduciary
relationship between the Debtors and LFD, but also there had
been neither conversion nor unjust enrichment. The Bankruptcy
Court was correct. The mere failure to pay a debt cannot
support a constructive trust.
E. Subrogation
Having concluded that the Net Sales Proceeds are not LFD's
property, and that no agency or trust relationship exists, the
Bankruptcy Court did not err in denying LFD's claim for
subrogation.
Thus, the District Court upholds the Bankruptcy Court's findings
that:
(1) the proceeds from the sale of LFD's merchandise are not
LFD's property;
(2) no trust or agency relationship existed between the
parties;
(3) LFD was not entitled to a constructive trust relationship,
and
(4) LFD was not entitled to its claim for subrogation.
The Bankruptcy Court properly dismissed LFD's complaint for
declaratory relief. Accordingly, the District Court affirms
Judge Gonzalez's Order and Judgment.
Headquartered in Rocky Hill, Connecticut, Ames Department Stores,
Inc., is a regional discount retailer that, through its
subsidiaries, currently operates 452 stores in nineteen states and
the District of Columbia. The Company filed for chapter 11
protection on August 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217).
Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal
LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at
Weil, Gotshal & Manges LLP represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed $1,901,573,000 in assets and
$1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No.
58; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AMOROSO CONSTRUCTION: Case Summary & Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Dennis J. Amoroso Construction Co., Inc.
250 Bel Marin Bouelvard
Building A, Suite 1
Novato, California 94949
Bankruptcy Case No.: 04-12244
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Amoroso Investments, LLC 04-12246
Type of Business: The Debtor is a General Contractor.
Chapter 11 Petition Date: September 21, 2004
Court: Northern District of California (Santa Rosa)
Debtors' Counsel: John H. MacConaghy, Esq.
Law Offices of John H. MacConaghy
466 1st Street E
Sonoma, CA 95476
Tel: 707-935-3205
Estimated Assets Estimated Debts
---------------- ---------------
Dennis J. Amoroso $10 M to $50 M $10 M to $50 M
Construction Co., Inc.
Amoroso Investments, LLC $0 to $50,000 $10 M to $50 M
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Marelich Mechanical Trade Debt $2,036,301
8670 Younger Creek Dr.
Ste. 100
Sacramento, CA 95828
Blue Mountain Steel Trade Debt $955,221
P.O. Box 21770
Carson City, NV 89721
Spencer & Son, Inc., Fw Trade Debt $838,055
99 South Hill Drive
Brisbane, CA 94005
Kamran & Co., Inc. Trade Debt $735,272
411 E. Montecito Street
Santa Barbara, CA 93101
Powerco Electric Corp. Trade Debt $707,021
7876 Deering Avenue
Canoga Park, CA 91304
Smith & Sons Electric Trade Debt $669,916
44081 Grimmer Blvd.
Fremont, CA 94538
Olson and Co. Steel Trade Debt $654,477
Ts 1941 Davis Street
San Leandro, CA 94577
Kone Incorporated Trade Debt $572,342
P.O. Box 429
Moline, IL 61266-0429
Bay Cities Paving & Grading Trade Debt $571,643
P.O. Box 6227
Concord, CA 94520
Calhoun Brothers Trade Debt $543,262
400 Reed Street, Suite A
Santa Clara, CA 95050
Pacific Erectors Inc. Trade Debt $540,938
11768 Atwood Road, Ste. # 23
Auburn, CA 95603
T-Kennel Systems Trade Debt $492,397
415 Osage
Kansas City, KS 66105
Magnum Drywall Inc. Trade Debt $442,400
42027 Boscell Road
Fremont, CA 94538
Cupertino Electric Inc. Trade Debt $435,459
P.O. Box 45
Livermore, CA 94551-0045
Trico Construction Trade Debt $426,363
445-C Hampshire Street
San Francisco, CA 94110
Scott Electric Co. Trade Debt $420,038
1150 25th Street
San Francisco, CA 94107
Rollie French, Inc. Trade Debt $399,715
1813 S. Tenth Street
San Jose, CA 95112
Mcdonald Company, Ross Trade Debt $384,000
6776 Preston Avenue, Suite B
Livermore, CA 94550
Elcor Electric Trade Debt $361,991
3310 Bassett Street
Santa Clara, CA 95054
Encompass Facility Trade Debt $357,357
940 Remillard Court
San Jose, CA 95122
ARMSTRONG: Court Expunges & Disallows Southwest Contract Claims
---------------------------------------------------------------
Judge Fitzgerald of the U.S. Bankruptcy Court for the District of
Delaware disallows and expunges the claims filed by Southwest
Recreational Industries, Inc., against Nitram Liquidators, Inc.,
and Armstrong World Industries.
As reported in the Troubled Company Reporter on January 17, 2003,
Nitram Liquidators, Inc., and Armstrong World Industries jointly
objected to the allowance of the proofs of claim filed by
Southwest Recreational Industries, Inc., in August 2001.
Rebecca Booth, Esq., at Richards Layton & Finger, told the Court
that before June 1999, Nitram was in the business of
manufacturing, selling and installing floor products, including
synthetic running tracks and artificial grass surfaces. Under an
Asset Purchase Agreement, Nitram sold substantially all of its
assets and transferred some of its liabilities to Southwest for an
adjusted price of approximately $9,200,000. Southwest paid this
price by:
(i) delivering a subordinated promissory note payable to
Nitram amounting to $4,500,000;
(ii) depositing $2,000,000 in an escrow account; and
(iii) remitting the balance by wire transfer to Nitram.
The Note matured on October 31, 2003.
After the sale, Nitram no longer had any employees or operations.
Nitram filed its Chapter 11 case only to resolve its contingent
liabilities and wind up its operations.
The parties' material obligations under the APA were performed by
the Closing Date -- i.e., Nitram's assets and certain liabilities
were transferred to Southwest in exchange for Southwest's payment
to Nitram of the purchase price. Both Nitram and Southwest have
certain limited continuing obligations under the APA.
Specifically, Nitram agreed not to compete with Southwest for a
period of time, and AWI agreed to guarantee Nitram's performance
of its obligations under the APA. In addition, certain
contractually defined warranties for products Nitram used in turf
jobs before the Closing Date will remain in effect.
Shortly after the Petition Date, Nitram notified Southwest that
any claims to enforce warranties contained in the APA are subject
to the automatic bankruptcy stay because they are prepetition
claims. Nitram further informed Southwest that it could not
continue to pay any such claims in the ordinary course, as it had
been doing, but that the claims would have to be asserted as
prepetition, unsecured claims against Nitram's estate.
Nitram has asserted that the APA could not be assumed or rejected
because the APA is not an executory contract.
Before the Petition Date, Southwest, with AWI's knowledge and
consent, honored certain claims by customers that had purchased
Nitram products.
The products were covered by warranties from Nitram, and the
amount of the prepetition warranty payments for which Southwest
did not receive reimbursement from Nitram reached $28,802. AWI
has no objection to allowance of a claim for Southwest in this
amount. However, disallowance of the balance is appropriate
because no other amounts are owed to Southwest because of warranty
claims.
Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world. The Company
filed for chapter 11 protection on December 6, 2000 (Bankr. Del.
Case No. 00-04469). Stephen Karotkin, Esq., Weil, Gotshal &
Manges LLP and Russell C. Silberglied, Esq., at Richards, Layton &
Finger, P.A., represent the Debtors in in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $4,032,200,000 in total assets and
$3,296,900,000 in liabilities. (Armstrong Bankruptcy News, Issue
No. 67; Bankruptcy Creditors' Service, Inc., 215/945-7000)
BANC OF AMERICA: S&P Puts Low-B Ratings on Six Certificate Classes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Banc of America Commercial Mortgage Inc.'s
$1.296 billion commercial mortgage pass-through certificates
series 2004-4.
The preliminary ratings are based on information as of
Sept. 21, 2004. Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.
The preliminary ratings reflect:
* the credit support provided by the subordinate classes of
certificates,
* the liquidity provided by the fiscal agent,
* the economics of the underlying loans, and
* the geographic and property type diversity of the loans.
Classes A-1, A-2, A-3, A-4, A-5, A-6, A-1A, B, C, D, and XP are
currently being offered publicly. The remaining classes will be
offered privately. Standard & Poor's analysis determined that, on
a weighted average basis, the pool has a debt service coverage of
1.64x, a beginning LTV of 90.6%, and an ending LTV of 81.9%.
A copy of Standard & Poor's complete presale report for this
transaction can be found on RatingsDirect, Standard & Poor's Web-
based credit analysis system, at http://www.ratingsdirect.com/
The presale can also be found on the Standard & Poor's Web site at
http://www.standardandpoors.com/ Select Credit Ratings, and then
find the article under Presale Credit Reports.
Preliminary Ratings Assigned
Banc of America Commercial Mortgage Inc. Series 2004-4
Class Rating Amount ($)
----- ------ ----------
A-1 AAA 33,000,000
A-2 AAA 48,000,000
A-3 AAA 240,000,000
A-4 AAA 225,000,000
A-5 AAA 107,000,000
A-6 AAA 272,199,171
A-1A AAA 202,345,000
B AA 35,640,764
C AA- 11,340,243
D A 21,060,451
E A- 9,720,209
F BBB+ 16,200,347
G BBB 11,340,243
H BBB- 16,200,347
J BB+ 6,480,139
K BB 6,480,139
L BB- 6,480,139
M B+ 3,240,069
N B 3,240,069
O B- 4,860,105
P N.R. 16,200,348
XC* AAA 1,296,027,783**
XP* AAA TBD**
* Interest-only class.
** Notional amount.
CALPINE CORP: Remarketing 5.75% Convertible Preferred Securities
----------------------------------------------------------------
Calpine Corporation (NYSE: CPN) submitted the required
notification leading up to the potential remarketing of the
company's 5.75% Convertible Preferred Securities -- HIGH TIDES I
-- on Friday, September 17.
Calpine also notified holders of its right to redeem HIGH TIDES I,
in whole or in part, at any time on or before October 25, 2004.
To date, Calpine has expressed its intent to redeem HIGH TIDES I
prior to the reset of the terms of HIGH TIDES I following a
remarketing. If not earlier redeemed, the remarketing of HIGH
TIDES I would begin on October 27, 2004.
About Calpine
Calpine Corporation (S&P, B, CCC+ Senior Unsecured Convertible
Note and B Second Priority Senior Secured Note Ratings, Negative
Outlook), is a North American power company dedicated to providing
electric power to customers from clean, efficient, natural gas-
fired and geothermal power facilities. The company generates
power at plants it owns or leases in 21 states in the United
States, three provinces in Canada and in the United Kingdom.
Calpine is also the world's largest producer of renewable
geothermal energy, and owns or controls approximately one trillion
cubic feet equivalent of proved natural gas reserves in the United
States and Canada. For more information about Calpine, visit
http://www.calpine.com/
* * *
As reported in the Troubled Company Reporter on Sept. 20, 2004,
these notes currently trade in the mid-sixties:
* 7.750% notes due April 15, 2009;
* 8.500% notes due February 15, 2011; and
* 8.625% notes due August 15, 2010.
As reported in the Troubled Company Reporter on August 18, 2004,
Calpine Corp.'s outstanding $5.5 billion senior unsecured notes
are affirmed at 'B-' by Fitch Ratings. In addition, CPN's
outstanding $2.9 billion second priority senior secured notes are
affirmed at 'BB-' and its $1.1 billion outstanding convertible
preferred securities/high TIDES at 'CCC'. The Rating Outlook for
CPN is Stable.
CPN's ratings reflect its highly leveraged financial profile and
exposure to cyclical commodity market conditions, which continue
to reduce realized returns on the unhedged portion of CPN's
generating portfolio. In addition, CPN's remaining plant
construction program will continue to place near-term pressure on
the company's credit profile as cash inflows and earnings tend to
lag investment expenditures. For the twelve-month period ended
March 31, 2004, lease adjusted debt to EBITDAR exceeded 10.0 times
(x). CPN continues to pursue the sale of some of its more liquid
assets, including the planned sale of approximately 230 billion
cubic feet equivalent (Bcfe) of Canadian-based natural gas
reserves and ongoing monetization of above-market power sales
contracts, further reducing financial flexibility.
CATHOLIC CHURCH: Tucson Wants to Employ Quarles & Brady as Counsel
------------------------------------------------------------------
The Roman Catholic Church of the Diocese of Tucson seeks Judge
Marlar's permission to employ Quarles & Brady Streich Lang LLP, as
its general reorganization and restructuring counsel, effective as
of September 20, 2004.
Reverend Gerald F. Kicanas, D.D., the Bishop of the Diocese of
Tucson, relates that Quarles & Brady not only has bankruptcy
expertise, but is also knowledgeable in numerous other practice
specialties.
Among general administrative matters, the Diocese may need legal
services regarding:
* negotiation and refinement of the plan of reorganization
which has been filed on the Petition Date;
* selection and coordination of the efforts of the experts
which may be employed by the Diocese to ascertain the values
of its business and assets, and to perform other analyses as
may be presented by the creditors and other interested
parties in the Reorganization Case;
* evaluation of personal property issues, including lien
validity and perfection;
* evaluation and advice on the unique aspects of the
Reorganization Case and the relationship between the
Bankruptcy Code and applicable law and the law governing the
activities and business of a Roman Catholic Diocese;
* evaluation and prosecution, where appropriate, of any claims
which should be asserted by the Diocese; and
* other activities as it may be reasonable and proper for the
Diocese to undertake to protect its assets and that are
related to the administration of its estate.
According to Bishop Kicanas, the Diocese retained the Quarles
Firm before the Petition Date to provide legal advice regarding
the Diocese's financial affairs. The Quarles Firm received a
$50,000 retainer, which is placed in a segregated trust account.
Bishop Kicanas contends that the Quarles Firm has the
accessibility, experience, expertise, and resources necessary to
provide the multi-faceted legal services needed by the Diocese in
its reorganization matters.
Furthermore, the Retainer is an advance against fees for services
to be rendered and costs incurred by the Quarles Firm in the
Reorganization Case. The Quarles Firm will have the right, in its
discretion, and option, exercisable in its sole and absolute
discretion, to:
(a) apply the Retainer wholly or partially to pay its
allowed professional compensation and expense
reimbursements; or
(b) obtain the payment from available assets of the
Diocese's estate.
The Retainer is reasonable particularly in light of the size of
the Reorganization Case and the unique and complex issues related
to the Reorganization Case, Bishop Kicanas says.
Any portion of the Retainer that exceeds the amount of all fees
earned and costs incurred by the Quarles Firm is refundable. The
Quarles Firm will also comply with the United States Trustee's
"Guide to Applications for Employment of Professionals and
Treatment of Retainers" as revised in December 2002, in
withdrawing any funds from the Retainer.
The professionals who will be providing their services to the
Diocese are:
Name Position Hourly Rate
----- -------- -----------
Susan G. Boswell Senior attorney $300
Kasey Nye Associate 195
Sue Utter Legal Assistants 120
Sybil Aytch Legal Assistants 125
The Quarles Firm will paid for its professional services based on
its hourly rates. The Firm will also be reimbursed for its costs
incurred in representing the Diocese.
Because of the numerous and complex issues in Tucson's
Reorganization Case as well as the time parameters involved, other
attorneys in the firm may be utilized, where appropriate and as
needed, to:
-- assist with case management and administration;
-- assist in specialized matters like financing and
litigation issues;
-- research and analyze discrete bankruptcy issues; and
-- prepare pleadings.
The services provided by the Quarles Firm will not duplicate or
overlap the efforts of any other professional retained by the
Diocese.
Susan G. Boswell, a member and partner of the Quarles Firm,
assures Judge Marlar that the Firm is "disinterested" and does not
represent any entity in the Reorganization Case, which has any
interest adverse to Tucson.
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. 6; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
CENTERPOINT ENERGY: Fitch Holds BB+ Rating Amidst Deliberations
---------------------------------------------------------------
Fitch Ratings anticipates no immediate changes in CenterPoint
Energy, Inc.'s credit ratings or Rating Outlook following the
disclosure that CenterPoint Energy could incur an after-tax charge
of approximately $1.0 billion based on CenterPoint Energy's
management assessment of pending true-up deliberations by the
Public Utility Commission of Texas -- PUCT. Fitch currently rates
CenterPoint Energy's senior unsecured debt 'BBB-' and its trust-
preferred securities 'BB+'. The Rating Outlook for CenterPoint
Energy is Negative.
The conclusion of the true-up proceeding and subsequent
securitization of stranded costs is the second of two anticipated
deleveraging events factored into Fitch's ratings for CenterPoint
Energy and its two wholly owned subsidiaries:
* CenterPoint Energy Houston Electric, LLC (CEHE; 'BBB' general
mortgage bonds, Negative Outlook); and
* CenterPoint Energy Resources Corp. (CERC; 'BBB' senior
unsecured, Negative Outlook).
The first was the definitive agreement reached by CenterPoint
Energy on July 21, 2004 to sell its 81% interest in Texas Genco
Holdings for after-tax cash proceeds of $2.5 billion in a two-step
transaction expected to be completed by early 2005.
CenterPoint Energy's announcement of the potential after-tax
charge reflects the wide gap between CenterPoint Energy's claimed
true-up amount of $3.7 billion (excluding interest) and
CenterPoint Energy's understanding of the current Public Utility
Commission position, which could reduce the final true-up balance
to as low as $1.7 billion or approximately $2.0 billion with
accrued interest. Fitch estimates that a settlement based on
current Public Utility Commission deliberations, combined with the
anticipated TGN sale proceeds would delever CenterPoint Energy's
consolidated balance sheet by at least $4.5 billion, a level
consistent with the current ratings of CenterPoint Energy,
CenterPoint Energy Houston, and CenterPoint Energy Resources.
However, the scale of differentials between the respective
positions of CenterPoint Energy and the PUCT increase the
likelihood that protracted litigation could significantly delay
the timing and ultimate receipt of securitization proceeds
available to CenterPoint Energy.
Fitch continues to monitor CenterPoint Energy's true-up proceeding
and will consider revising the Rating Outlook to Stable once the
outcome of the PUCT review becomes more clearly defined.
Importantly, cash proceeds from the TGN sale will provide a
liquidity backstop against CenterPoint Energy's 2005-2006 debt
maturity profile in the event that the stranded cost recovery
process were to experience a prolonged delay.
CHARTWELL DIVERSIFIED: Completes Chapter 11 Reorganization Process
------------------------------------------------------------------
Chartwell Diversified Services, Inc., a leading provider of home
health care services, has completed its Chapter 11 reorganization
process. The Company's Plan of Reorganization was confirmed by the
U.S. Bankruptcy Court, Eastern District of New York, on Sept. 10,
2004, and became effective on Sept. 17, 2004.
CDSI completes its reorganization as a privately held organization
with a strong balance sheet, a streamlined operational structure
and a talented executive management team. In addition, the Company
has secured financing with the health care financing company
Healthcare Business Credit Corporation in order to meet its short-
term and long-term goals.
"This is a truly gratifying day for Chartwell, having emerged from
reorganization as a strong, financially stable company," said Roy
M. Serpa, president of CDSI. "We have reduced operating costs,
streamlined the organization and continued to secure new
contracts, which reflects our excellence in patient care. I must
thank our employees, customers and partners, whose loyalty over
the past 22 months enabled us to reach this point."
Headquartered in Andover, Massachusetts, Chartwell Diversified
Services, Inc., a subsidiary of Med Diversified, Inc., provides
home health care services to nearly 55,000 patients a year in 18
states. Chartwell Diversified, together with five debtor-
affiliates, filed for chapter 11 protection on Nov. 27, 2002
(Bankr. E.D.N.Y. Case No. 02-88565). Toni Marie McPhillips, Esq.,
at Duane Morris LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for bankruptcy protection, it
listed $196,323,000 in total assets and $143,005,000 in total
debts.
CHIQUITA BRANDS: Moody's Puts B2 Rating on Planned $250M Sr. Notes
------------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the prospective
senior unsecured note issue of Chiquita Brands International, Inc.
and affirmed Chiquita's B1 senior implied rating. The outlook is
stable. Proceeds from the prospective $250 million note issue
will refinance Chiquita's existing $250 million 10.56% notes, due
2009.
Chiquita's ratings reflect moderate debt levels, a well
established market position, and a well recognized brand name, but
also take into account the company's product concentration on
bananas and its earnings concentration in Europe, where a new, as
yet undefined, tariff regime will be implemented in 2006, which
could materially affect profitability.
Moody's ratings actions for Chiquita are:
i) $250 million prospective senior unsecured notes, due 2014
-- B2 assigned,
ii) Senior Implied Rating -- B1 affirmed,
iii) Unsecured Issuer Rating -- B2 affirmed,
iv) Ratings Outlook -- Stable.
Chiquita's ratings are constrained by the company's business mix.
The company is focused on fresh fruit marketing and distribution,
with heavy orientation on bananas, a business with low margins and
high fixed costs. The ratings further take into account
Chiquita's earnings concentration on its European banana
operations, which generate the bulk of the company's profits.
European profitability is bolstered by a regulatory regime for
banana imports, due to be modified in 2006, when Europe is
scheduled to eliminate quotas and move to a tariff-only regime.
The specific regulatory changes are not yet developed, and the
extent of potential negative impact on Chiquita's primary source
of earnings is uncertain but could be significant. European
profitability also is sensitive to the euro exchange rate, which
currently is favorable to profitability.
Chiquita's ratings also consider that:
* the company's primary geographic areas of current operation
-- Europe and North America -- are mature,
* low growth markets, and
* margin expansion in these markets is constrained by ample
global banana supplies and the increased negotiating leverage
of the company's food retailer customers, which have been
consolidating.
As a result, competition among suppliers is intense. In addition,
the business is exposed to labor, disease, pest and weather-
related supply risks, as well as volatile fuel and packaging
costs. The ratings also reflect heavy capital, marketing, and new
product development spending over the next few years, including
planned investment in a new fresh cut fruit business. The fresh
cut business offers potential for higher growth and margins, but
Chiquita's key competitors also have been investing in fresh cut
operations, and ultimate market demand levels, profitability, and
execution success by Chiquita are yet to be demonstrated. In
addition, acquisitions may be pursued by management to diversify
and grow the business.
Chiquita's ratings gain support from the company's moderate debt
and leverage levels, which leave the company with financial
flexibility to weather volatility in its business and a cushion to
facilitate the adaptation of its business to new market conditions
once the 2006 change in Europe's regulatory framework is defined.
The new notes are expected to reduce the company's interest
expense burden and lengthen its debt maturity profile, also
enhancing financial flexibility.
The ratings also gain support from Chiquita's well established
market position as one of three global banana companies, with
leading market shares in Europe and North America. The company's
Chiquita brand name enjoys strong brand awareness, which the
company believes has supported a retail price premium in Europe
and provides opportunity for possible brand extension. In
addition, the ratings recognize Chiquita's risk management
initiatives, which have included hedging of its euro exposure
through 2006 to protect the profitability of its European
operations from negative euro exchange rate movements. The
ratings also reflect Chiquita's progress in divesting non-core
assets, improving banana production efficiency, and reducing
logistics costs. The company's 2003 acquisition and integration
of its German distributor, Atlanta, which had been its largest
customer in Europe, has proceeded in line with expectations.
The stable ratings outlook assumes leverage will remain moderate
as the company continues to expand its business in Asia and other
markets, and into fresh cut and other products. Current business
and earnings concentrations limit Chiquita's upside ratings
potential over the near term. Over the longer term, greater
earnings diversification and less uncertainty about the impact of
the change in European regulations could result in an upgrade,
assuming financial leverage remains moderate. The ratings could
be pressured by the change in European banana import regulations
in 2006, if the impact on profitability is severe and sustained,
or by acquisitions that result in material incremental leverage.
The rating on the unsecured notes is notched down from the senior
implied rating to reflect their unsecured and structurally
subordinated position in the company's capital structure.
Chiquita had $122 million of secured debt at June 30, 2004, and
plans to add a secured revolving credit of $150 to $200 million,
which would effectively be ahead of the unsecured notes. In
addition, the unsecured notes will be issued at the holding
company level with no upstream guarantees, and would be
structurally subordinated to debt and other liabilities at
subsidiaries. At June 30, 2004, in addition to the $122 million
of subsidiary debt, Chiquita had $440 million of payables and
accrued liabilities, $73 million of pension and employee benefit
obligations, and $85 million of other liabilities. Asset coverage
of the notes at par would require realization of a significant
amount of the intangible value on Chiquita's balance sheet.
With total debt of $372 million at June 30, 2003, Chiquita's
leverage is moderate, at 2.7x LTM EBITDA. Adjusted for leases,
Adjusted Debt/EBITDAR is 3.4x. The prospective note issuance is
expected to reduce interest expense and result in comfortable EBIT
coverage of interest for the rating, at 2.7x (1.7x EBITR/Interest
+ Rentals). Chiquita cancelled its revolver in June 2004, but
held $198 million cash at June 30, 2004, providing ample near term
liquidity. The cash accommodates transaction fees and expenses
for the tender of the existing unsecured notes and issuance of the
new unsecured notes, as well as back stops the company's planned
$20 million of share and warrant repurchases, and its heavy
planned capital, product development and marketing spending. The
company plans to put a new revolving credit facility into place in
the near term. Free cash flow is expected to be about 10%
relative to debt, indicating capability to de-leverage over time.
Chiquita Brands International has headquarters in Cincinnati,
Ohio. The company is a global producer and marketer of fresh
fruits, with LTM revenues of $2.6 billion at June 30, 2004.
CITATION CORP: Case Summary & 297 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Citation Corporation
2700 Corporate Drive
Suite 100
Birmingham, Alabama 35242
Bankruptcy Case No.: 04-08130
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Citation Holding Company, Inc. 04-08131
MFC Liquidating Company, Ltd. 04-08133
Texas Foundries Ltd. 04-08134
Interstate Southwest Ltd. 04-08135
ISW Texas Corporation 04-08136
Citation Wisconsin Forgin LLC 04-08138
Texas Steel Corporation 04-08139
TSC Texas Corporation 04-08140
Citation Grand Rapids LLC 04-08141
ITM Holding Company LLC 04-08142
Citation Michigan LLC 04-08143
Bohn Aluminum, Inc. 04-08144
Berlin Foundry Corporation 04-08145
Castwell Products, Inc. 04-08146
Citation Aluminum LLC 04-08147
Citation Castings LLC 04-08148
Citation Lake Zurich LLC 04-08149
Citation Precision, Inc. 04-08150
Citation Wisconsin LLC 04-08151
HI-Tech, Inc. 04-08152
Iroquois Foundry Corporation 04-08153
Mansfield Foundry Corporation 04-08154
OBI Liquidating Corp. 04-08155
Type of Business: Citation Corporation designs, develops and
manufactures cast, forged and machined
components for the capital and durable goods
industries, including the automotive and
industrial markets. Citation uses aluminum,
steel, gray iron, and ductile iron as the raw
materials in its various manufacturing
processes. See http://www.citation.net/
Chapter 11 Petition Date: September 18, 2004
Court: Northern District of Alabama (Birmingham)
Judge: Tamara O Mitchell
Debtor's Counsel: Michael Leo Hall, Esq.
Rita H Dixon, Esq.
Burr & Forman LLP
420 North 20th Street
3100 SouthTrust Tower
Birmingham, Alabama 35203
Tel: 205 251-3000
Entity Total Assets Total Debts
------ ------------ -----------
Citation Corporation More than $100 M More than $100 M
Citation Holding Company, Inc. More than $100 M More than $100 M
MFC Liquidating Company, Ltd. $0 to $50,000 $10 M to $50 M
Texas Foundries Ltd. $50 M to $100 M $10 M to $50 M
Interstate Southwest Ltd. $10 M to $50 M $50 M to $100 M
ISW Texas Corporation $0 to $50,000 $1 M to $10 M
Citation Wisconsin Forgin LLC $1 M to $10 M More than $100 M
Texas Steel Corporation $0 to $50,000 $10 M to $50 M
TSC Texas Corporation $10 M to $50 M $10 M to $50 M
Citation Grand Rapids LLC $10 M to $50 M $50 M to $100 M
ITM Holding Company LLC $0 to $50,000 $10 M to $50 M
Citation Michigan LLC $0 to $50,000 $50 M to $100 M
Bohn Aluminum, Inc $10 M to $50 M $10 M to $50 M
Berlin Foundry Corporation $10 M to $50 M $10 M to $50 M
Castwell Products, Inc. $10 M to $50 M $10 M to $50 M
Citation Aluminum LLC $10 M to $50 M $1 M to $10 M
Citation Castings LLC More than $100 M More than $100 M
Citation Lake Zurich LLC $10 M to $50 M $10 M to $50 M
Citation Precision, Inc. $0 to $50,000 $10 M to $50 M
Citation Wisconsin LLC $10 M to $50 M More than $100 M
HI-Tech, Inc. $1 M to $50 M $10 M to $50 M
Iroquois Foundry Corporation $1 M to $50 M $10 M to $50 M
Mansfield Foundry Corporation $0 to $50,000 $10 M to $50 M
OBI Liquidating Corp. $0 to $50,000 $10 M to $50 M
A. Citation Corporation's 20 largest unsecured creditors:
Entity Claim Amount
------ ------------
Dell Marketing, LP [Unstated]
PO Box 534118
c/o Dell USA
Atlanta, Georgia 30353
Benton County Electric System [Unstated]
PO Box 429
Camden, Tennessee 38320
Capital Strategies Group [Unstated]
2 Metroplex Drive, Suite 111
Birmingham, Alabama 35209
Rose-Walker, LLP [Unstated]
1701 North Market Street,
Suite 200
Dallas, Texas 75202
Bank One, NA [Unstated]
PO Box 974222
Dallas, Texas 75397
Zoll Medical Corporation [Unstated]
PO Box 33080
Newark, New Jersey 07188
LandMark Engineering Sciences [Unstated]
3021 Minot Lane, Suite 200
Waukesha, Wisconsin 53188
CDW Direct LLC [Unstated]
PO Box 75723
Chicago, Illinois 60675
Comshare (U.S.), Inc. [Unstated]
PO Box 102573
Atlanta, Georgia 30368
Department of Labor [Unstated]
3300 Vickery Road
North Syracuse, New York 13212
Invois [Unstated]
PO Box 198145
Atlanta, Georgia 30384
United Parcel Service [Unstated]
PO Box 7247-0244
Philadelphia, Pennsylvania 19170
Optimum Solutions [Unstated]
210 25th Avenue North, Suite 700
Nashville, Tennessee 37203
Bank One Cash Management [Unstated]
PO Box 70176
Chicago, Illinois 60673
Quadrant Software [Unstated]
PO Box 200
Mansfield, Massachusetts 02048
Andrew & Kurth [Unstated]
600 Travis, Suite 4200
Houston, Texas 77002
The Travelers Insurance Company [Unstated]
91287 Collections Center Drive
c/o Bank of America
Chicago, Illinois 60693
Maynard Cooper & Gale, PC [Unstated]
1901 Sixth Avenue North
AmSouth, Harbert Plaza, Suite 2400
Birmingham, Alabama 35203
Quaries & Brandy, LLP [Unstated]
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Adams and Reese LLP [Unstated]
701 Poydras Street, Suite 4500
New Orleans, Louisiana 70139
B. Citation Holding Company, Inc.'s largest unsecured creditor:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
C. MFC Liquidating Company, Ltd.'s largest unsecured creditor:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
D. Texas Foundries Ltd.'s 21 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
American Colloid Company [Unstated]
1500 West Shure Drive
Arlington Heights, Illinois 60004-1434
C.H. Robinson Worldwide [Unstated]
SDS 12-0805, PO Box 86
Minneapolis, Minnesota 55486-0805
Canfield & Joseph Inc. [Unstated]
566B North Beach Street
Fort Worth, Texas 76111
Cast Corporation [Unstated]
10119 Whiteside Road
Buhl, Minnesota 55713
CC Metals & Alloys, Inc. [Unstated]
c/o Canfield & Joseph
566B North Beach Street
Fort Worth, Texas 76111
Cherokee Industrial Fabricators [Unstated]
PO Box 1137
Lufkin, Texas 75902-1137
Griffin Tool Inc. [Unstated]
3033 Johnson Road
Stevensville, Michigan 49127
Levand Steel & Supply [Unstated]
1849 Crestwood Boulevard
Irondale, Alabama 35210-2049
Longview Scrap Metal [Unstated]
PO Box 8089
Longview, Texas 75607
Metal Processors Inc [Unstated]
1010 West John Beers Road
PO Box 196
Stevensville, Michigan 49127-0196
Miller & Company [Unstated]
9700 West Higgins Road, Suite 1000
Rosemont, Illinois 60018
Mindis International Inc. [Unstated]
1400 Sulser
Lufkin, Texas 75904
Motion Industries Inc. [Unstated]
PO Box 3110
Lufkin, Texas 75903
National Material Trading [Unstated]
Division of National Materials LP
1965 Pratt Boulevard
Elk Groove Village, Illinois 60007
Northbend Pattern Works [Unstated]
28080 Ziegler Boulevard
West Harrison, Indiana 47060
Omni Source Corporation [Unstated]
1610 North Calhoun Street
Port Wayne, Indiana 46808
Porter Warner [Unstated]
3202 McKinney
Houston, Texas 77003
SGL Carbon LLC [Unstated]
PO Box 563960
Charlotte, North Carolina 28256-3960
The Reynolds Company (13300) [Unstated]
2212 East Denman Avenue
Lufkin, Texas 75901
Wood County Machine [Unstated]
PO Box 968
104 Park Central
Mineola, Texas 75773
E. Interstate Southwest Ltd.'s 21 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
Bodycote [Unstated]
1975 North Ruby Street
Melrose Park, Illinois 60160
Caterpillar Inc. [Unstated]
PO Box 93344
Chicago, Illinois 60673
Chaparral Steel [Unstated]
PO Box 840547
Dallas, Texas 75284-0547
CIM Systems, Inc. [Unstated]
2865 Wimbledon Lane
Friendswood, Texas 77546
Cleco Energy LLC [Unstated]
Attn: Treasury Services
PO Box 5000
Houston, Texas 77210
Conner Patrick Steel [Unstated]
10537 Fisher Road
Houston, Texas 77064
Dana Corporation [Unstated]
PO Box 67000
Department 21201
Kalamazoo, Michigan 49003-4097
Eaton Steel Corporation [Unstated]
PO Box 78000, Department 78270
Detroit, Michigan 48278-0270
Oak Park, Michigan 48237
Jorgenson Steel [Unstated]
PO Box 200992
Dallas, Texas 77020
Kreher Steel Company Inc. [Unstated]
3218 Paysphere Circle
Chicago, Illinois 60674
Macsteel [Unstated]
Department # 79901
PO Box 67000
Detroit, Michigan 48267
Metalist International [Unstated]
1159 South Pennsylvania
Lansing, Michigan 48912
Navasota Industrial Supply [Unstated]
FM 3455, PO Box 1487
Navasota, Texas 77868
Precision Industries Inc. [Unstated]
PO Box 77101
Minneapolis, Minnesota 55480-7101
Rex Supply Corporation [Unstated]
Department # 587
PO Box 67000
Houston, Texas 77299-0487
Sterling Edge, Inc. [Unstated]
8226 Goldie Street
Walled Lake, Michigan 48390
Superior Die Set Corporation [Unstated]
PO Box 511340
New Berlin, Wisconsin 53151
Timken US Corporation [Unstated]
PO Box 751580
Charlotte, North Carolina 28275
Universal Stainless/Alloy P [Unstated]
PO Box 640595
Pittsburg, Pennsylvania 15264-0595
Bridgeville, Pennsylvania 15017
Williams Alloy & Weldin [Unstated]
PO Box 41127
Houston, Texas 77241-1127
F. ISW Texas Corporation's largest unsecured creditor:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
G. Citation Wisconsin Forgin LLC's largest unsecured creditor:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
H. Texas Steel Corporation's largest unsecured creditor:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
I. TSC Texas Corporation's 20 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
J. Citation Grand Rapids LLC's 21 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
Automation Techniques, Inc. [Unstated]
3315 3 Mile Road Northwest
Grand Rapids, Michigan 49544
Chemtrend Inc. [Unstated]
6600 Reliable Parkway
Chicago, Illinois 60686
City of Lowell [Unstated]
301 East Main Street
Lowell, Michigan 49331
CNC Solutions [Unstated]
1107 Boomer Street
Watertown, Wisconsin 53094
Consumers Energy [Unstated]
PO Box 30090
Lansing, Michigan 48909
Dieco Tool and Die [Unstated]
Division of Southeastern
Extrusion & Tool, Inc.
Florence, Alabama 35630
Empire Refractory [Unstated]
2000 Byron Center Southwest
Wyoming, Michigan 49509
Fremar Industries [Unstated]
2808 Westway Drive
Brunswick, Ohio 44212
Kendall Electric [Unstated]
Department 112101
PO Box 67000
Detroit, Michigan 48267
Linpac Solutions [Unstated]
1393 Wheaton, Suite 400
Troy, Michigan 48083
Metric Die and Mold [Unstated]
320 Marion Avenue Southwest
Grand Rapids, Michigan 49504
Prince Machine Corporation [Unstated]
6005 Paysphere Circle
Chicago, Illinois 60674
Rimrock [Unstated]
PO Box 692089
Cincinnati, Ohio 45269
Same Day Delivery [Unstated]
PO Box 2707
Grand Rapids, Michigan 49501
Standard Tool and Die Company [Unstated]
PO Box 608
Stevensville, Michigan 49127
Steelcase, Inc. [Unstated]
901 44th Street
Global Real Estate Ch 2E 10
Grand Rapids, Michigan 49508
Supreme Tool & Die [Unstated]
1536 Fenpark Drive
Fenton, Missouri 63026
Toolcam Technologies [Unstated]
81 Roysun Road
Vaughan, On L4L8T
Turn Key Tool & Die [Unstated]
801 North Church Street
Suite B
Union, Missouri 63084
W W Grainger [Unstated]
Department 320
Palatine, Illinois 60038
K. ITM Holding Company LLC's largest unsecured creditor:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
L. Citation Michigan LLC's 20 largest unsecured creditors:
Entity Claim Amount
------ ------------
Standard Tool and Die Company [Unstated]
PO Box 608
Stevensville, Michigan 49127
Supreme Tool & Die [Unstated]
1536 Fenpark Drive
Fenton, Missouri 63026
Linpac Solutions [Unstated]
1393 Wheaton, Suite 400
Troy, Michigan 48083
Toolcam Technologies [Unstated]
81 Roysun Road
Vaughan, On L4L8T
Prince Machine Corporation [Unstated]
6005 Paysphere Circle
Chicago, Illinois 60674
Empire Refractory [Unstated]
2000 Byron Center Southwest
Wyoming, Michigan 49509
Fremar Industries [Unstated]
2808 Westway Drive
Brunswick, Ohio 44212
Consumers Energy [Unstated]
PO Box 30090
Lansing, Michigan 48909
Turn Key Tool & Die [Unstated]
801 North Church Street
Suite B
Union, Missouri 63084
Rimrock [Unstated]
PO Box 692089
Cincinnati, Ohio 45269
CNC Solutions [Unstated]
1107 Boomer Street
Watertown, Wisconsin 53094
Dieco Tool and Die [Unstated]
Division of Southeastern
Extrusion & Tool, Inc.
Florence, Alabama 35630
Kendall Electric [Unstated]
Department 112101
PO Box 67000
Detroit, Michigan 48267
Same Day Delivery [Unstated]
PO Box 2707
Grand Rapids, Michigan 49501
Automation Techniques, Inc. [Unstated]
3315 3 Mile Road Northwest
Grand Rapids, Michigan 49544
Chemtrend Inc. [Unstated]
6600 Reliable Parkway
Chicago, Illinois 60686
City of Lowell [Unstated]
301 East Main Street
Lowell, Michigan 49331
Steelcase, Inc. [Unstated]
901 44th Street
Global Real Estate Ch 2E 10
Grand Rapids, Michigan 49508
Metric Die and Mold [Unstated]
320 Marion Avenue Southwest
Grand Rapids, Michigan 49504
W W Grainger [Unstated]
Department 320
Palatine, Illinois 60038
M. Bohn Aluminum, Inc.'s 20 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
Air Products Chemicals, Inc. [Unstated]
Industrial Gases Division
7201 Hamilton Boulevard
Allentown, Pennsylvania 18195-1501
Alfe Heat Treating, Inc. [Unstated]
2439 East Cardinal Drive
Columbia City, Indiana 46725
Aluminum Recovery Technologies [Unstated]
2170 Production Road
Kendallville, Indiana 46755
Beck Aluminum Corporation [Unstated]
300 Allen Bradley Road
Mayfield Heights, Ohio 44124
Beck Aluminum Corporation [Unstated]
340 South Cleveland Avenue
Building 370
Westerville, Ohio 43081
C.M.H. Manufacturing Company [Unstated]
1320 Harvard Street
Lubbock, Texas 79403
Carlson Tool & Manufacturing Corporation [Unstated]
W57 N14386 Doerr Way
PO Box 85
Cedarburg, Wisconsin 53012
CSC Inc. [Unstated]
2315 North Clinton
Fort Wayne, Indiana 46805
Dekalb Engineering [Unstated]
700 East Quincy Street
Garrett, Indiana 46738
Diamond Equipment Services [Unstated]
6326 Constitution Drive
Fort Wayne, Indiana 46804
Johnny on the Spot Delivery Services [Unstated]
PO Box 8034
Fort Wayne, Indiana 46898-8034
Metal Exchange Corporation [Unstated]
111 West Prot Plaza
Suite 704
Saint Louis, Missouri 63146
Molten Metal Equipment Innovations [Unstated]
16286 Nauvoo Road
Middlefield, Ohio 44062
Newco Metals Inc. [Unstated]
7268 South Street, Road 13
Pendleton, Indiana 46064
Pyrotek [Unstated]
W228 N2792 Duplainvill Road
Waukesha, Wisconsin 53186
Rusal America Corporation [Unstated]
550 Mamaroneck Avenue
Suite 301
Harrison, New York 10528
Simcala, Inc. [Unstated]
21266 Network Place
Chicago, Illinois 60673-1266
VJ Technologies [Unstated]
89 Carlough Road
Bohemia, New York 11716
Wick-Fab, Inc. [Unstated]
307 East Fourth Street
Avilla, Indiana 46710
N. Berlin Foundry Corporation's 21 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
A.F. Gelhar Company [Unstated]
PO Box 126
Fairwater, Wisconsin 53931
A.H. Quality Patterns [Unstated]
731 East Line Road
Attn: Al Hatton
Kaukauna, Wisconsin 54130
Alliant Utilities/WP&L [Unstated]
PO Box 77003
Madison, Wisconsin 53707-1003
American Colloid Company [Unstated]
901 County G
PO Box 726
Neenah, Wisconsin 54957-0726
B&B Metals Processing Company, Inc. [Unstated]
14520 Pioneer Road
Newtown, Wisconsin 53063
Carpenter Brothers Inc. [Unstated]
4555 West Schroeder Drive
Suite 100
Milwaukee, Wisconsin 53223
CC Metals & Alloys, Inc. [Unstated]
University Corporate Centre
300 Corporate Parkway, 216 North
Amherst, New York 14226-1207
D&M Pallet Company Inc. [Unstated]
PO Box 106
Neshkoro, Wisconsin 54960
David J. Joseph Company [Unstated]
Ferroa-Alloy Group
Suite 210 Penn Center West # 2
Pittsburgh, Pennsylvania 15276
Foseco Inc. [Unstated]
PO Box 81227
Cleveland, Ohio 44191-0187
HA International [Unstated]
630 Oakmont Lane
Westmont, Illinois 60559
Hi Temp Inc. [Unstated]
310 South Wolf Street
North Lake, Illinois 60164
Jonas Service & Supply [Unstated]
PO Box 5125
De Pere, Wisconsin 54115-5125
Omega Metal Treating Inc. [Unstated]
1883 Commerce Drive
De Pere, Wisconsin 54115
Richland Pattern, Inc. [Unstated]
1001 Foundry Drive
PO Box 554
Richland Center, Wisconsin 53531
Samuels Recycling Company [Unstated]
PO Box 8800
4400 Sycamore Avenue
Madison, Wisconsin 53708
Thompson Creek Metals Company, Inc. [Unstated]
Department 0609
Denver, Colorado 80256-0609
W.L. Deckert Company, Inc. [Unstated]
6353 North 64th Street
Milwaukee, Wisconsin 53218
Wisconsin Lift Truck Corporation [Unstated]
1776 West Matthew Drive
De Pere, Wisconsin 54115
Yale Industries [Unstated]
129 North Main
Yale, Michigan 48097
O. Castwell Products, Inc.'s 21 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
Behr Iron & Steel [Unstated]
3812 Harvest
Glenview, Illinois 60025-1015
Camosy Inc. [Unstated]
PO Box 1070
Waukegan, Illinois 60079
Carpenter Brothers Inc. [Unstated]
4555 West Schroeder Drive
Suite 100
Milwaukee, Wisconsin 53223
Chicago Chain & Transmission Company [Unstated]
140 West Devon
Bensenville, Illinois 60106
David J. Joseph Company [Unstated]
Suite 210
Penn Center West # 2
Pittsburgh, Pennsylvania 15276
Disa Industries, Inc. [Unstated]
80 Kendall Point Drive
Oswego, Illinois 60543
Ervin Industries [Unstated]
PO Box 1168
Ann Arbor, Michigan 48106
Hi Temp Inc. [Unstated]
310 South Wolf Road
North Lake, Illinois 60164
Industrial Pattern Works, Inc. [Unstated]
Works of Benton Harbor
PO Box 124
Benton Harbor, Michigan 49022
Iverson Industries Inc. [Unstated]
580 Hillsdale
Wyandote, Michigan 48192
Janes Power [Unstated]
155-A East Street, Charles Road
Carol Stream, Illinois 60188
KCI Konecranes, Inc. [Unstated]
1213 Capitol Drive # 4
Addison, Illinois 60101
Lechtrotherm [Unstated]
8984 Meridian Circle
North Canton, Ohio 44720
Miller & Company [Unstated]
9700 West Higgins Road
Rosemont, Illinois 60018
National Material Trading [Unstated]
2455 Arthur Avenue
Elk Grove Village, Illinois 60007
Phoenix Staffing & Management [Unstated]
Systems, Inc.
PO Box 891
Plainfield, Illinois 60544-0891
Residual Management LLC [Unstated]
224 West Washington, 5th Floor
Milwaukee, Wisconsin 53204
Unimin [Unstated]
PO Box 156
Oregon, Illinois 61061
United Scrap Metal Inc. [Unstated]
1545 South Cicero Avenue
Chicago, Illinois 60804
W W Grainger [Unstated]
Parts of America Division
1657 Shermer Road
Northbrook, Illinois 60062
P. Citation Aluminum LLC's 19 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
Air Products Chemicals, Inc. [Unstated]
Industrial Gases Division
7201 Hamilton Boulevard
Allentown, Pennsylvania 18195-1501
Alfe Heat Treating, Inc. [Unstated]
2439 East Cardinal Drive
Columbia City, Indiana 46725
Aluminum Recovery Technologies [Unstated]
2170 Production Road
Kendallville, Indiana 46755
Beck Aluminum Corporation [Unstated]
300 Allen Bradley Road
Mayfield Heights, Ohio 44124
Beck Aluminum Corporation [Unstated]
340 South Cleveland Avenue
Building 370
Westerville, Ohio 43081
C.M.H. Manufacturing Company [Unstated]
1320 Harvard Street
Lubbock, Texas 79403
Carlson Tool & Manufacturing Corporation [Unstated]
W57 N14386 Doerr Way
PO Box 85
Cedarburg, Wisconsin 53012
CSC Inc. [Unstated]
2315 North Clinton
Fort Wayne, Indiana 46805
Dekalb Engineering [Unstated]
700 East Quincy Street
Garrett, Indiana 46738
Johnny on the Spot Delivery Services [Unstated]
PO Box 8034
Fort Wayne, Indiana 46898-8034
Metal Exchange Corporation [Unstated]
111 West Prot Plaza
Suite 704
Saint Louis, Missouri 63146
Molten Metal Equipment Innovations [Unstated]
16286 Nauvoo Road
Middlefield, Ohio 44062
Newco Metals Inc. [Unstated]
7268 South Street, Road 13
Pendleton, Indiana 46064
Pyrotek [Unstated]
W228 N2792 Duplainvill Road
Waukesha, Wisconsin 53186
Rusal America Corporation [Unstated]
550 Mamaroneck Avenue
Suite 301
Harrison, New York 10528
Simcala, Inc. [Unstated]
21266 Network Place
Chicago, Illinois 60673-1266
VJ Technologies [Unstated]
89 Carlough Road
Bohemia, New York 11716
Wick-Fab, Inc. [Unstated]
307 East Fourth Street
Avilla, Indiana 46710
Q. Citation Castings LLC's 20 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
Alabama Power Company [Unstated]
Account # 00037-88305 11
PO Box 11407
Birmingham, Alabama 35246-0201
Alabama Power Company [Unstated]
PO Box 242
Birmingham, Alabama 35292
Alabama Power Company [Unstated]
PO Box 2247
Mobile, Alabama 36652
Alabama Power Company [Unstated]
PO Box 242
Birmingham, Alabama 35292
Alabama Power Company [Unstated]
PO Box 242
Birmingham, Alabama 35292
Azcon Corporation [Unstated]
135 South La Salle, Department 1026
Chicago, Illinois 60674-1026
Azcon Corporation [Unstated]
PO Box 616
Alton, Illinois 60002
David J. Joseph Company [Unstated]
1800 International Park Drive
Suite 190
Birmingham, Alabama 35243
David J. Joseph Company [Unstated]
1941 Clements Ferry Road
Suite A
Charleston, South Carolina 29492
Foseco Inc. [Unstated]
3152 Dublin Lane
Bessemer, Alabama 35022
Levand Steel & Supply [Unstated]
1849 Crestwood Boulevard
Irondale, Alabama 35210-2049
Levand Steel & Supply [Unstated]
1849 Crestwood Boulevard
Irondale, Alabama 35210-2049
Levand Steel & Supply [Unstated]
1849 Crestwood Boulevard
Irondale, Alabama 35210-2049
Levand Steel & Supply [Unstated]
Levand House
1849 Crestwood Boulevard
Irondale, Alabama 35210-2049
P&E Machine Company Inc. [Unstated]
2003 Lane Street
Kannapolis, North Carolina 28083
Porter Warner [Unstated]
270 North Center Street
Birmingham, Alabama 35204
Porter Warner [Unstated]
LB Account # 0-20-97842
PO Box 11407, 270 North Center Street
Birmingham, Alabama 35204
Porter Warner [Unstated]
PO Box 2159
Chattanooga, Tennessee 37409
Porter Warner [Unstated]
PO Box 2159
Chattanooga, Tennessee 37409
R. Citation Lake Zurich LLC's 21 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
Advance Waste Service [Unstated]
1126 South 70th Street, Suite N508B
West Allis, Wisconsin 53214
Alltherm Services, Inc. [Unstated]
PO Box 1525
Highland, Indiana 46322
American Chemical Technologies [Unstated]
485 East Van Ripper Road
Fowlerville, Michigan 48836-7931
Centerpoint Energy Marketing, Inc. [Unstated]
PO Box 3029
Carol Stream, Illinois 60132-3029
Commonwealth Edison Company [Unstated]
PO Box 784
Chicago, Illinois 60690
Department 77552 [Unstated]
14214 Edgerton Road
New Haven, Indiana 46774
EPP-MAR Metal Company [Unstated]
135 South La Salle
Department 3947
Chicago, Illinois 60674-3947
Feichtner Fredrick Corporation [Unstated]
3227-14 Avenue
Kenosha, Wisconsin 53140
Helmsman Management Services [Unstated]
PO Box 0569
Carol Stream, Illinois 60132-0569
J & S Chemical Corporation [Unstated]
170 North Industrial Way
Canton, Georgia 30115
J F Harrison [Unstated]
6575 North Sidney Place
PO Box 170831
Milwaukee, Wisconsin 53209-3293
McMaster Carr Supply [Unstated]
PO Box 4355
Chicago, Illinois 60680-4355
Motion Industries Inc. [Unstated]
222 Marquardt Drive
Wheeling, Illinois 60090
PDT Tooling, Inc. [Unstated]
600 Heathrow Drive
Lincolnshire, Illinois 60069
Quality Temperm Inc. [Unstated]
2030 East Algonquin Road
Suite 410
Schaumburg, Illinois 60173
Rimrock [Unstated]
1700 Rimrock Road
Columbus, Ohio 43219
Strategic Edge Solutions [Unstated]
AHL Staff
PO Box 75320
Baltimore, Maryland 21275-5320
Sunset Tool Inc. [Unstated]
2500 South Cleveland Avenue
Saint Joseph, Michigan 49085
Toolcam Technologies [Unstated]
81 Roysun Road
Vaughan, L4L8T5
Vobeda Machine & Tool [Unstated]
3801 Blue River Avenue
Racine, Wisconsin 53405
S. Citation Precision, Inc.'s largest unsecured creditor:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, New York 10017
T. Citation Wisconsin LLC's 20 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, NY 10017
ABB Inc. [Unstated]
1250 Brown St.
Auburn Hills, MI 48326
Badger Technical Ser. Inc. [Unstated]
10025 W. Greenfield Ave.
Milwaukee, WI 53214
Bremer Manufacturing Co. [Unstated]
W2002 Highway Q
Elkhart Lake, WI 53020
Citation Corporation [Unstated]
1642 Progress Street
P.O. Box 30
Albion, IN 46701
Citation Corporation [Unstated]
242 South Pearl Street
Berlin, WI 54923
Citation Corporation [Unstated]
320 East Main St.
Lake Zurich, IL 60047
Citation Corporation [Unstated]
4051 North 27th Street
Milwaukee, WI 53216-1883
Citation Corporation [Unstated]
Hwy. 45 South
Marion, AL 36756-0670
Foundry Systems Int'l [Unstated]
5159 S. Prospect Street
Ravenna, OH 44266
Freudenberg-Nok
47690 East Anchor Court
Plymouth, MI 48170-2455
Grede Foundries [Unstated]
P.O. Box 26499
Milwaukee, WI 53226
Greeneville Castings Inc. [Unstated]
500 N. Rufe Taylor Road
Greeneville, TN 37745
Houghton Int'l Inc. [Unstated]
6600 S. Nashville Ave.
Chicago, IL 60638
KM Tool Supply
N89 W14452 Patrita Dr.
Menomonee Falls, WI 53051
Meritor HVS Systems [Unstated]
1000 Rockwell Drive
Fletcher, NC 28732
Merwin-Stoltz Co. Inc. [Unstated]
N52 W13325 Falls Creek CT
Menomonee Falls, WI 53051
Mitchel and Scott [Unstated]
Machine Company Inc.
1841 Ludlow Ave.
Indianapolis, IN 46201
Northern Diecast Corp. [Unstated]
8582 Moeller Dr.
Harbor Springs, MI 49740
Ward Aluminum Casting Inc. [Unstated]
642 Growth Ave.
Fort Wayne, IN 46808-3795
U. HI-Tech, Inc.'s 21 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, NY 10017
American Tool Service [Unstated]
Division of STI
7007 Trafalgar Street
Fort Wayne, IN 46803
C & E Sales Inc. [Unstated]
677 Congress Park Dr.
Dayton, OH 45459
Freudenberg-Nok [Unstated]
50 Ammon Dr.
Manchester, NH 03103
General Petroleum, Inc. [Unstated]
P.O. Box 10688
Fort Wayne, IN 46853
GKN Sinter Metals, Inc. [Unstated]
7 Michigan Boulevard
St. Thomas, ON N5P 1H1
Grede Foundries [Unstated]
9298 Blue Mound Road
P.O. Box 26499
Milwaukee, WI 53226
Haggard & Stocking - F.W. [Unstated]
Branch 102 - Fort Wayne
5318 Victory Dr.
Indianapolis, IN 46203
Innovative Chemical Solutions [Unstated]
P.O. Box 40
Chelsea, MI 48118
J & B Industrial [Unstated]
150 Progress Way #3
P.O. Box 608
Avilla, IN 45710
Kendall Electric [Unstated]
131 Grand Trunk Ave.
Battle Creek, MI 49015
Kennametal Inc. [Unstated]
P.O. Box 231
Latrobe, PA 15650
Meyer Stamping & Manufacturing [Unstated]
Div. of Duffy Tool & Stamping
4323 Merchant Road
Fort Wayne, IN 46818
MSC 410052 [Unstated]
343 Airport North Office Park
Fort Wayne, IN 46825
Neenah Foundry Company [Unstated]
P.O. Box 729
411 Middle St.
Neenah, WI 54957
NTC Logistics [Unstated]
8044 2nd Avenue South
Birmingham, AL 35206
Specialty Tool Inc. [Unstated]
6925 Trafalgar St.
Fort Wayne, IN 46803
Speedgrip Chuck Inc. [Unstated]
2000 East Industrial Parkway
P.O. Box 596
Elkhart, IN 46515
Testrite, Inc. [Unstated]
P.O. Box 280
887 Degurse Ave.
Marine City, MI 48039
Watry Industries [Unstated]
P.O. Box 131
3312 Lakeshore Dr.
Sheboygan, WI 53082
Winona Powder Coating Inc. [Unstated]
601 South Franklin St.
P.O. Box 527
Mentone, IN 46539
V. Iroquois Foundry Corporation's 21 largest unsecured creditors:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, NY 10017
A & W Iron & Metal, Inc. [Unstated]
7588 Otten Dr.
Kewaskum, WI 53040
ACM Inc. [Unstated]
2254 Commonwealth
N. Chicago, IL 60064
Behr Iron & Steel [Unstated]
1100 Seminary St.
P.O. Box 740
Rockford, IL 61105
Carpenter Brothers Inc. [Unstated]
4555 West Schroeder Dr., Ste. 100
Milwaukee, WI 53223
Cintas Corp. [Unstated]
P.O. Box 14515
Madison, WI 53714
Citizens Gas & Coke Utility [Unstated]
P.O. Box 5225
Oak Brook, IL 60522
Endries International Inc. [Unstated]
P.O. Box 69
714 West Ryan St.
Brillion, WI 54110
Ervin Industries [Unstated]
c/o Metal Parts and Equipment
425 Huehl Rd. Bldg. 10
Northbrook, IL 60062
HA International [Unstated]
630 Oakmont Lane
Westmont, IL 60559
Hanke Trucking Inc. [Unstated]
5451 Hilldale Rd.
P.O. Box 56
Slinger, WI 53086
Hickman Williams & Company [Unstated]
Location 00286
Cincinnati, OH 45264
Lorman [Unstated]
115 Lorman St.
P.O. Box 127
Fort Atkinson, WI 53538
Midwest Pattern Company [Unstated]
84 West 11th St.
Waterloo, IA 50702
Miller & Co.
6400 Shafer Court, Ste. 500
Rosemont, IL 60018
MP Steel Chicago, LLC [Unstated]
5757 West Ogden Avenue
Cicero, IL 60804
Palletone of Wisconsin, Inc. [Unstated]
310 Portland Rd.
P.O. Box 175
Waterloo, WI 53594
Samuels Recycling Co. [Unstated]
4400 Sycamore Ave.
Madison, WI 53714
TECPRO [Unstated]
3555 Atlanta Industrial Parkway
Atlanta, GA 30331
The Tool House Inc. [Unstated]
5205 S. Emmer Dr.
New Berlin, WI 53151
UNIMIN [Unstated]
258 Elm St.
New Caanan, CT 06840
W. Mansfield Foundry Corp.'s largest unsecured creditor:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, NY 10017
X. OBI Liquidating Corp.'s largest unsecured creditor:
Entity Claim Amount
------ ------------
JPMorgan Chase Bank [Unstated]
Loan and Agency Services Group
Administrative Agent
270 Park Avenue, 20th Floor
New York, NY 10017
COMMONWEALTH INDUSTRIES: Moody's Affirms B1 Senior Implied Rating
-----------------------------------------------------------------
Moody's Investors Service confirmed the ratings of Commonwealth
Industries -- B1 Senior Implied. In a related rating action,
Moody's continued to keep the ratings of IMCO Recycling (IMCO - B2
Senior Implied) under review for possible upgrade.
The confirmation of Commonwealth's ratings reflects the company's
improving operating profile as evidenced by increased shipments
and strengthening prices as it works through and replaces prior
sales agreements, which have negatively impacted profitability.
Moody's expects the higher capacity utilization rates, together
with continued success in achieving higher selling prices, given
the level of fixed costs in the business, to restore
Commonwealth's performance (before restructuring and other
charges) to levels more commensurate with its market position and
operating capabilities.
The confirmation also reflects the moderate improvement in total
debt levels (inclusive of accounts receivable financing) following
the sale of Alflex and the application of approximately
$60 million in proceeds to debt reduction. The rating outlook is
stable. This concludes Moody's review of Commonwealth, whose
ratings were placed under review for possible downgrade in June
2004 following the announcement of the intended merger with IMCO.
To the extent that the Commonwealth senior subordinated notes due
2006 are redeemed in full upon completion of the merger, as
required by the change of control clause in the note indenture,
Moody's will withdraw the B3 rating on these notes.
IMCO's ratings remain under review for possible upgrade reflective
of its pending merger with Commonwealth. Under the merger
agreement, IMCO will acquire Commonwealth in an all stock
transaction under which Commonwealth shareholders will receive
0.815 IMCO shares for each Commonwealth share held. The
respective shareholder votes are not expected to take place until
late October with a closing anticipated during the fourth quarter.
Should the transaction close as contemplated, and should there be
no material deterioration in performance, Moody's anticipates that
IMCO's senior implied rating will be upgraded to B1 from B2 and
that the rating on the $210 million 10.375% guaranteed senior
secured notes due 2010 will be upgraded to B2 from B3. The issuer
rating is likely to remain at Caa1.
Commonwealth is a domestic manufacturer of aluminum sheet products
for the transportation, construction and consumer durables end-use
markets. The very competitive building and construction markets
represent the company's largest customer base, accounting for
approximately 43% of sales. Although smaller than its larger
international rolling competitors, the company's annual rolled
capacity of 1.2 billion pounds remains sizeable. However, Moody's
notes that the full benefits of this capacity have not been
realized in recent years as shipments have averaged just
827 million pounds per annum since 2001. This has been a key
factor in what has been relatively weak performance and
demonstrates the critical need for Commonwealth to maintain
volumes shipped in order to gain maximum economies of scale.
Improved market conditions in 2004 are expected to contribute to
better capacity utilization and increased pounds shipped. Moody's
will continue to focus on the company's operating performance in
terms of shipment levels, capacity utilization and the gross
margin per pound shipped. The gross margin per pound shipped
takes into account the difference between molten metal cost and
net selling price and includes costs to roll and fabricate
finished products for shipment. This final gross margin has
averaged approximately $0.10/lb (excluding depreciation) since
2001. As such, the company is extremely thin margined and volume
sensitive.
Imco is the largest aluminum recycler in the world, with
processing capacity of 4.0 billion pounds, and also processes
specialty aluminum alloys and zinc. While the majority of its
operations are located in the U.S., IMCO also has operations in
Germany, U.K., Mexico and Brazil. IMCO's international operations
are becoming increasingly important as it accounted for
approximately 50% of the company's segment income in 2003
reflective of both weak domestic conditions and the consolidation
of VAW-IMCO. Customers generally take product either in molten or
ingot form and approximately 55% of deliveries in 2003 were on a
toll basis, which generally provides a level of earnings
stability.
Pro-forma for the transaction, the combined company will remain
highly leveraged. Moody's expects pro-forma debt of approximately
$447 million to represent 4.8X the combined EBITDA (adjusted for
the sale of Alflex) on an LTM basis for the period ending
June 30, 2004.
Ratings confirmed are:
* Commonwealth Industries:
-- B1 Senior Implied Rating,
-- B3 rating on $125 million 10.75% Senior Subordinated notes
due 2006,
-- B2 Issuer Rating
Ratings continuing under review are:
* IMCO Recycling:
-- B2 Senior Implied Rating,
-- B3 rating on $210 million 10.375% guaranteed senior
secured notes due 2010,
-- Caa1 Issuer Rating
Headquartered in Irving, Texas, IMCO Recycling had revenues of
$892 million in 2003. Headquartered in Louisville, Kentucky,
Commonwealth Industries had revenues of $920 million in 2003.
DELTA AIR: Names Rob Maruster VP - Atlanta Operations
-----------------------------------------------------
Delta Air Lines (NYSE: DAL) has named Rob Maruster as the new Vice
President - Atlanta Worldport, replacing Lem Wimbish who recently
announced his retirement effective Oct. 1, 2004. Mr. Maruster will
oversee all aspects of Delta's operation at Atlanta's Hartsfield-
Jackson International Airport, the world's largest single-airline
hub, including its transition through the largest single-day
network transformation in Delta's history.
"Rob is not only a strategic thinker with solid operational
experience, he also has a true passion for customer service that
will ensure Delta continues to offer friendly, efficient service
at our largest hub," said Rich Cordell, senior vice president,
Airport Customer Service. "Industry relationships are particularly
important in Delta's home town. Rob will work closely with Lem
during the transition to maintain close partnerships with key
organizations, including the TSA, airport authority, city vendors
and construction contractors."
Mr. Maruster began his Delta career as an airport customer service
agent in 1993. Since that time, he has held positions of
increasing responsibility including his most recent leadership as
Director - ACS Strategy, Planning and Performance. In this role,
Mr. Maruster led several strategic projects including planning and
implementation of Delta's airport transformation in 81 domestic
stations. He has also played an instrumental role in the
development and execution of processes that provide a foundation
for Delta's Atlanta hub restructuring, which takes effect January
31, 2005. Mr. Maruster's promotion aligns with Delta's focus on
promoting from within.
A graduate of Auburn University where he earned a BA in Political
Science, Mr. Maruster also holds an MBA from Emory University.
A Delta veteran, Wimbish has led Delta's operations at the Atlanta
Worldport since 1999. His career with Delta began in 1972 in
Airport Customer Service from which he moved to positions of
increasing responsibility, including Station Manager positions in
Washington D.C. and Richmond, VA, as well as Regional Director
positions at Delta's headquarter offices.
"Lem has built a record of proven accomplishments during his
career with Delta, applying his many skills to meeting stringent
operational goals and cost objectives while staying closely
involved in the community," said Mr. Cordell.
About the Company
Delta Air Lines -- http://delta.com/-- 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.
* * *
As reported in the Troubled Company Reporter on Sept. 16, 2004,
Delta Air Lines filed a Form 8-K with the Securities and Exchange
Commission to make changes in its Annual Report on Form 10-K for
the year ended December 31, 2003.
The Annual Report is being revised so it may be incorporated into
another document. Since Delta filed the Annual Report with the
SEC, significant events have occurred which have materially
adversely affected Delta's financial condition and results of
operations. These events, which have been reported in Delta's
subsequent SEC filings, include a further decrease in domestic
passenger mile yield and near historically high levels of aircraft
fuel prices. The Annual Report has been revised to disclose these
events and the possibility of a Chapter 11 filing in the near
term. Additionally, as a result of Delta's recurring losses,
labor and liquidity issues and increased risk of a Chapter 11
filing, Deloitte & Touche LLP, Delta's independent auditors, has
reissued its Independent Auditors' Report to state that these
matters raise substantial doubt about the company's ability to
continue as a going concern.
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.
D.R. HORTON: Moody's Assigns Ba1 Rating to $250M Senior Notes
-------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to the
$250 million of 5.625% senior notes due September 15, 2014 of D.R.
Horton, Inc., proceeds of which will be used to retire bank debt.
At the same time, Moody's confirmed all of the company's existing
ratings, including the senior implied rating, issuer rating, and
the ratings on the company's senior notes at Ba1 and on its senior
subordinated debt at Ba2. The ratings outlook is positive.
The positive ratings outlook reflects the company's steady and
successful execution of its strategy of buying less land,
foregoing an active acquisition policy, and using the excess cash
flow for debt repayment and share purchases. As a result, debt
leverage has improved from the highest in its peer group to one
that compares favorably with those within its peer group. Moody's
expects this trend to continue.
The ratings acknowledge the company's:
* enviable operating performance (107 consecutive quarters of
year-over-year earnings growth),
* success at integrating prior acquisitions,
* strong equity base,
* geographic diversity,
* tight cost controls, and
* sound liquidity.
At the same time, the ratings continue to incorporate Horton's
somewhat higher than average business risk profile given its past
healthy appetite for acquisitions, which its current strategy does
not totally disavow. In addition, capacity under its large bank
credit facility ($1.21 billion) gives the company ample dry powder
to releverage the balance sheet on short notice. The ratings also
consider that the company has a sizable proportion of its earnings
coming from California.
The ratings confirmed are:
-- Ba1 senior implied rating
-- Ba1 senior unsecured issuer rating
-- Ba1 on $200 million of 10.5% senior notes, due 4/1/05
-- Ba1 on $215 million of 7.5% senior notes, due 12/01/07
-- Ba1 on $200 million of 5% senior notes, due 1/15/09
-- Ba1 on $385 million of 8% senior notes, due 2/1/09
-- Ba1 on $235 million of 9.375% senior notes, due 7/15/09
(issued by Schuler Homes and assumed by D.R. Horton in the
merger of February 2002)
-- Ba1 on $200 million of 7.875% senior notes, due 8/15/11
-- Ba1 on $250 million of 8.5% senior notes due 4/15/12
-- Ba1 on $200 million of 6.875% senior notes due 5/1/13
-- Ba1 on $100 million of 5.875% senior notes due 7/1/13
-- Ba1 on $200 million of 6.125% senior notes due 1/15/2014
-- Ba2 on $150 million of 9.75% senior sub notes, due 9/15/10
-- Ba2 on $200 million of 9.375% senior sub notes, due 3/15/11
-- Ba2 on $145 million of 10.5% senior sub notes, due 7/15/11
(issued by Schuler Homes and assumed by D.R. Horton in the
merger of February 2002)
-- SGL-1 Speculative Grade Liquidity rating
All of D.R. Horton's note issues are guaranteed by substantially
all of the company's homebuilding subsidiaries.
Horton's financial profile has shown substantial improvement since
the company adopted in 2002 its current strategy of eschewing most
acquisition opportunities, shifting its lot supply mix to one that
relies more heavily on options and less on ownership, generating
significant free cash flow, and devoting the excess cash flow both
to debt repayment and to moderate share repurchases. As a result,
Horton has reduced debt leverage from a peer group high of 57.5%
(debt/cap) and 3.1x (debt/EBITDA) at fiscal year end 2001 to 44.7%
and 2.0x, respectively, at fiscal year-end 2003. These ratios are
expected to continue to improve.
The company has an operating track record that is enviable. It
has generated 107 consecutive quarterly year-over-year earnings
gains, with no near-term end to this streak in sight. It has
seamlessly integrated its numerous acquisitions, including that of
its largest, Schuler Homes, which was completed in 2002. It has
one of the largest equity bases in the homebuilding industry,
$3.6 billion as of June 30, 2004. It has diversified into
51 markets in 21 states across the U.S., and it has one of the
leanest corporate overheads among homebuilders, with its
SG&A/revenues typically running at or near the lowest in the
industry.
At the same time, the ratings consider that Horton, while pursuing
a new strategy, has not renounced making additional acquisitions,
and that its large, essentially untapped bank credit facility
gives it substantial borrowing capacity to move quickly on a
potentially large acquisition opportunity. Given its history as a
very aggressive consolidator within the homebuilding industry and
the ongoing trend towards consolidation within the industry, there
may be opportunities that challenge Horton's recently adopted
capital structure discipline. Finally, although the company has
diversified geographically into numerous large and attractive
markets, the Schuler acquisition, together with the ongoing
robustness of the California housing market, has driven up
Horton's California concentration levels to approximately 30% with
regard to revenues and to a larger proportion of its profits.
Going forward, the ratings will depend on Horton's maintaining its
fiscal restraint. Moody's would view positively the company's
continuing reduction in its debt leverage. Any action or
transaction that had a significantly adverse effect on debt
leverage would be viewed negatively.
Headquartered in Arlington, Texas, D.R. Horton, Inc., is engaged
in the construction and sale of homes designed principally for the
entry-level and first time move-up markets. The company currently
builds and sells homes in 21 states and 51 markets, with a
geographic presence in the Midwest, Mid-Atlantic, Southeast,
Southwest, and Western regions of the United States. Revenues and
net income for the fiscal year that ended September 30, 2003 were
$8.7 billion and $626 million, respectively.
EATON VANCE: Fitch Raises $14 Million Class D Notes' Rating to BB
-----------------------------------------------------------------
Fitch Ratings upgrades one tranche and affirms five tranches of
notes issued by Eaton Vance CDO III, Ltd. These rating actions
are effective immediately:
-- $288,000,000 class A-1 senior secured notes affirmed at
'AAA';
-- $15,000,000 class A-2 senior secured notes affirmed at
'AAA';
-- $31,000,000 class B senior secured notes affirmed at 'A-';
-- $21,000,000 class C-1 senior secured notes affirmed at
'BBB+';
-- $2,000,000 class C-2 senior secured notes affirmed at
'BBB+';
-- $14,000,000 class D senior subordinated notes upgraded to
'BB' from 'BB-'.
The upgrade of the class D notes is due to multiple factors, two
of which underscore the improvement in credit quality of the
portfolio since the last rating action on August 26, 2003. The
portion of assets rated 'CCC+' or below decreased from 16.04% to
6.21% of the portfolio based on the June 30, 2003 and
August 6, 2004 trustee reports respectively. The Fitch weighted
average rating factor also improved, falling from 54.5 ('B'/'B-')
to 51.8 ('B+'/'B') (based on Fitch's former weighted average
rating factor scale). In addition, the collateral manager has
taken substantial steps to maintain credit enhancement levels by
continuing to redirect excess interest proceeds to purchase
additional collateral.
The ratings of the class A-1 and class A-2 notes address the
likelihood that investors will receive full and timely payments of
interest, as per the governing documents, as well as the aggregate
outstanding amount of principal by the stated maturity date.
The ratings of the class B, class C-1, class C-2 and class D notes
address the likelihood that investors will receive ultimate
payments of interest, as per the governing documents, as well as
the aggregate outstanding amount of principal by the stated
maturity date.
Eaton Vance III, which closed August 24, 2000, is a revolving
collateralized debt obligation managed by Eaton Vance Management.
Eaton Vance III is composed of approximately 96.6% leveraged loans
and 3.4% high yield bonds. Included in this review, Fitch Ratings
discussed the current state of the portfolio with the asset
manager and their portfolio management strategy going forward.
Since the last rating action, the credit quality of the collateral
has improved as noted above. The overcollateralization ratios for
the class A, B, C and D notes are virtually unchanged since the
last rating review. The class A overcollateralization ratio is
126.12% versus a test level of 115.00%. The class B
overcollateralization ratio is 114.42% versus a test level of
107.40%. The class C overcollateralization ratio is 107.05%
versus a test level of 103.90%. The class D overcollateralization
ratio is 103.01% versus a test level of 101.70%.
The class A interest coverage ratio decreased from 251.72% to
224.18% versus a test level of 120.00%. The class B interest
coverage ratio decreased from 223.40% to 199.00% versus a test
level of 118.00%. The class C interest coverage ratio decreased
from 212.75% to 189.59% versus a test level of 115.00%. The class
D interest coverage ratio decreased from 186.20% to 165.79% versus
a test level of 110.00%. Eaton Vance III has one defaulted asset
that represents 0.65% of the $386.3 million of total collateral
and eligible investments. There are 13 obligors rated 'CCC+' or
below, representing 6.21% of the portfolio.
Fitch conducted cash flow modeling utilizing various default
timing and interest rate scenarios to measure the breakeven
default rates going forward relative to the minimum cumulative
default rates required for the rated liabilities. For more
information on the Fitch Vector Model, see 'Global Rating Criteria
for Collateralised Debt Obligations,' dated September 13, 2004,
available on Fitch's web site at http://www.fitchratings.com/ As
a result of this analysis, Fitch has determined that the current
ratings assigned to the class A, B, and C notes still reflect the
current risk to noteholders.
Fitch will continue to monitor and review this transaction for
future rating adjustments.
ENCORE MEDICAL: S&P Puts B Rating on $180M Senior Secured Facility
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B' corporate credit
rating to medical products maker Encore Medical Corp. Standard &
Poor's also assigned a 'B' rating to the $180 million senior
secured credit facility of subsidiary Encore Medical IHC Inc. and
assigned a 'CCC+' rating to the subsidiary's $165 million
subordinated note offering.
The proceeds of this transaction and a sale of stock will go
toward the purchase of another medical products firm, Empi Corp.,
for approximately $365 million. Both Galen Partners and the
Carlyle Group will own equity in Encore at the close of the
transaction, and approximately $317 million of debt will be
outstanding. Encore Medical Corp. guarantees the debt at Encore
Medical IHC.
Encore's new secured credit facility consists of a $150 million
term loan maturing in 2010 and a $30 million revolving credit
facility maturing in 2009. The revolving credit facility should
be fully available at the close of the transaction.
The outlook is positive. Standard & Poor's will withdraw its bank
loan and senior secured ratings on Empi Corp. after the close of
the transaction.
"The speculative-grade ratings on Encore reflect its highly
leveraged capital structure, as well as the challenges the company
will face to integrate the operations of Empi, which is a much
larger company," said Standard & Poor's credit analyst Jordan C.
Grant. "These negative rating factors are partially offset by
Encore's strong positions in niche-physical therapy and orthopedic
rehabilitation equipment markets."
Austin, Texas-based Encore manufactures physical therapy equipment
and orthopedic implants. In addition, the company's Chattanooga
Group division has leading positions in electrotherapy and
produces a comprehensive line of equipment for physical therapy
clinicians. Encore is much larger than other PT equipment
manufacturers and has a broad product offering, so it can sell its
products through more distributors than any of its peers.
Though the company's line of orthopedic implants is comprehensive,
Encore is still in the early stages of developing a sales network
to market these implants and it must compete in this segment
directly against much larger, more mature companies with greater
financial resources.
The acquisition of Empi will give Encore leading positions in two
new fields, transcutaneous electric nerve stimulation used for
pain relief and iontophoretic drug delivery (which is made through
the skin). Empi enjoys a predictable revenue stream stemming from
its relationships with physicians and physical therapists, its
reputation for quality, and its recurring consumables revenue,
which accounts for about 20% of sales.
After the merger, Encore will be able to produce orthopedic
products for use before, during, and after orthopedic surgery.
Still, Encore must integrate Empi's larger operations. Encore
management will also face a challenge in consolidating
manufacturing and systems. In addition, orthopedic implants,
Encore's smallest (but most profitable) business line, must
compete against much larger companies with much greater resources,
such as Stryker Corp. (A-/Stable/--) and Zimmer Holdings Inc.
(BBB/Stable/--).
As part of its strategy, the company plans to take advantage of
cross-selling opportunities that exist between the Chattanooga
division and Empi's core business, and will gradually market
select Chattanooga products directly.
ENDURANCE SPECIALTY: S. Patschak to Head Property Catastrophe Unit
------------------------------------------------------------------
Endurance Specialty Holdings Ltd. (NYSE:ENH) reported that Susan
J. Patschak has joined Endurance Specialty Insurance, Ltd., as the
head of its Property Catastrophe Reinsurance business unit. Ms.
Patschak comes to Endurance with twenty-one years of professional
experience, most recently serving as the Chief Actuary of the ACE
Group of Companies in Bermuda.
Kenneth J. LeStrange, Chairman and Chief Executive Officer,
commented, "Susan is an executive with exceptional technical and
leadership skills. Under her direction, Endurance will continue to
develop and grow our industry leading position in Property
Catastrophe Reinsurance."
After graduating from the University of Maryland, Ms. Patschak
joined the Wyatt Company in Washington D.C. as an Actuarial
Assistant. Shortly thereafter, she joined Tillinghast - Towers
Perrin where she held numerous management positions, including
Property/Casualty Sector Leader for North America and Managing
Director of Latin America and Asia/Pacific. Ms. Patschak was the
liaison between Tillinghast and Towers Perrin Reinsurance,
promoting joint marketing of services for these two divisions of
Towers Perrin and served as the Location Manager for the Atlanta,
Philadelphia, and Bermuda offices. In 2002, Ms. Patschak joined
ACE as Global Chief Actuary where she was responsible for
coordinating and consolidating all actuarial functions of the
group.
Ms. Patschak received her Bachelor of Science degree in
mathematics from the University of Maryland. She is a member of
the American Academy of Actuaries, a Fellow of the Casualty
Actuarial Society, and a Board member of the Leadership Foundation
of America.
About Endurance Specialty Holdings
Endurance Specialty Holdings Ltd. is a global provider of property
and casualty insurance and reinsurance. Through its operating
subsidiaries, Endurance currently writes property per risk treaty
reinsurance, property catastrophe reinsurance, casualty treaty
reinsurance, property individual risks, casualty individual risks,
and other specialty lines. Endurance's operating subsidiaries have
been assigned a group rating of A (Excellent) from A.M. Best, A2
by Moody's and A- from Standard & Poor's. Endurance's headquarters
are located at Wellesley House, 90 Pitts Bay Road, Pembroke HM 08,
Bermuda and its mailing address is Endurance Specialty Holdings
Ltd., Suite No. 784, No. 48 Par-la-Ville Road, Hamilton HM 11,
Bermuda. For more information about Endurance, please visit
http://www.endurance.bm/
* * *
As reported in the Troubled Company Reporter's June 18, 2004,
edition, Standard & Poor's Ratings Services assigned its 'BBB'
counterparty credit rating to Endurance Specialty Holdings Ltd.
and its preliminary 'BBB' senior debt, 'BBB-' subordinated debt,
and 'BB+' preferred stock ratings to the company's $1.8 billion
universal shelf registration.
"The ratings on Endurance are based on its strong competitive
position, which is supported by a diversified business platform,"
noted Standard & Poor's credit analyst Damien Magarelli. "In
addition, Endurance maintains strong capital adequacy and strong
operating performance." Offsetting these positive factors are
concerns about Endurance's exposure to catastrophes and minimal
reinsurance protections. Endurance also is a relatively new
operation, and management has not been tested through difficult
market cycles.
ENRON CORP: Doesn't Want District Court to See PBGC Complaint
-------------------------------------------------------------
The U.S. Bankruptcy Court of the Southern District of New York
approved on July 15, 2004, Enron Corp.'s Joint Chapter 11 Plan.
Prior to the Plan confirmation, the Pension Benefit Guaranty Corp.
reported that to protect the participants in the underfunded
pension plans of Enron, the agency was initiating an action that
it hopes will preserve all the benefits that Enron promised to its
workers.
Following the Company's Plan confirmation, the PBGC notified the
Bankruptcy Court that it intends to take an appeal from Judge
Gonzalez's order confirming the Debtors' Modified Fifth Amended
Plan to the United States District Court for the Southern District
of New York.
Strike Complaint from Designation of
Record on Appeal, Enron Says
Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, in New
York, recounts that after two and a half years of active
participation in the Debtors' chapter 11 cases, the Pension
Benefit Guaranty Corporation filed an action, styled Pension
Benefit Guaranty Corporation v. Enron Corp., Case No. H-04-2151,
in the United States District Court for the Southern District of
Texas (Houston Division).
Through the Termination Action, the PBGC seeks, among other
things, to:
(a) enforce claims against the Debtors, which are identical to
claims previously filed in the Debtors' chapter 11 cases
by the PBGC, and
(b) improperly gain custody and control over estate and non-
Debtor assets.
On its face, the Termination Action is about the PBGC's monetary
claims against the Debtors, which will be paid in full pursuant
to the Plan. In reality, Mr. Rosen notes, the Termination Action
attempts to accomplish in the Texas District Court what the PBGC
could not accomplish in the Bankruptcy Court. By pursuing the
Termination Action, the PBGC, in violation of the automatic stay,
seeks to impermissibly elevate the PBGC Claims (which have not
even been resolved in the Debtors' chapter 11 cases) above those
of similarly situated creditors and avoid treatment pursuant to
the confirmed Plan.
As the Debtors believe the PBGC's commencement of the Termination
Action in the Texas District Court is nothing short of "forum
shopping," the Debtors moved the Bankruptcy Court to enjoin the
PBGC from pursuing the Termination Action. The Debtors believe
the injunction is necessary to prevent the PBGC from frustrating
the Debtors' reorganization efforts and usurping the Bankruptcy
Court's authority to hear, determine, and resolve claims against
the Debtors.
But Judge Gonzalez denied the Debtors' request. The Bankruptcy
Court ruled that PBGC has the right to seek the relief in the
Texas District Court.
During the course of the Debtors' chapter 11 cases, Mr. Rosen
says, the PBGC has attempted to push jurisdictional and
procedural limits to the breaking point. "In addition to
commencing the Termination Action in violation of the automatic
stay, the PBGC has frustrated the Debtors' efforts to voluntarily
terminate the very pension plans that are the subject of the
Termination Action. Prior to confirmation of the Plan, the
Bankruptcy Court prevented the PBGC from multiplying its true
economic stake in the Debtors' chapter 11 cases by a factor of
180 and voting $76 billion worth of claims against the Plan. The
PBGC's conduct is wholly unreasonable in a case where the PBGC
Claims are being paid in full."
Now, Mr. Rosen continues, in an effort to improperly augment the
confirmation record before the Bankruptcy Court as part of PBGC's
appeal of the Confirmation Order, the PBGC has included in its
Designation the complaint in the Termination Action, which the
PBGC did not serve on the Debtors until after the PBGC lost at
the Confirmation Hearing and the Bankruptcy Court issued the
Confirmation Order from which the PBGC now appeals.
Additionally, the Complaint was neither introduced into evidence
at the Confirmation Hearing nor relied upon by the Bankruptcy
Court in rendering the Confirmation Order from which the PBGC
appeals. "The PBGC is attempting to poison the record on appeal
and the designation of the Complaint must be stricken from the
record," Mr. Rosen asserts. "Such designation is in violation of
the Bankruptcy Rules, the Local Rules and applicable case law."
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. 125;
Bankruptcy Creditors' Service, Inc., 15/945-7000)
FRANK'S NURSERY: Hires Bankruptcy Services as Claims Agent
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New
York gave Frank's Nursery & Crafts, Inc., permission to
employ Bankruptcy Services LLC, as its claims, noticing and
balloting agent.
Bankruptcy Services will:
a) notify all potential creditors of the filing of the
bankruptcy petitions and the setting up of the first
meeting of the creditors pursuant to Section 341(a) of
the Bankruptcy Code;
b) file affidavits of service for all mailings, including a
copy of each notice, a list of persons to whom such
notice was mailed, and the date mailed;
c) maintain an official copy of the Debtor's Schedules,
listing creditors and amounts owed;
d) furnish a notice of the last date for the filing of
proofs of claim and a form for filing a proof of claim to
creditors and parties-in-interest;
e) docket all claims filed and maintain the official claims
register on behalf of the Bankruptcy Clerk and providing
the Clerk an exact duplicate of the claims register;
f) specify in the claims register for each claim docket:
(i) the claim number assigned,
(ii) the date received,
(iii) the name and address of the claimant,
(iv) the filed amount of the claim, if liquidated, and
(v) the allowed amount of the claim;
g) record all transfers of claims and provide notices of the
transfer as required pursuant to Bankruptcy Rule 3001(e);
h) maintain the official mailing list for all entities who
have filed proofs of claim;
i) mail the Debtor's disclosure statement, plan of
reorganization, ballots and any other related
solicitation materials to holders of impaired claims and
equity interests;
j) receive and tally ballots and respond to inquiries
respecting voting procedures and the solicitation of
votes on the plan; and
k) provide any other distribution services that are
necessary or required.
Ms. Kathy Gerber, Senior Vice President of Bankruptcy Services,
will bill the Debtor $210 per hour for her services.
Ms. Gerber reports Bankruptcy Services' professionals bill:
Designation Hourly Rate
----------- -----------
Senior Consultants $185
Programmer 130 - 160
Associate 135
Schedule Preparation 225
Data Entry/Clerical 40 - 60
Bankruptcy Services does not have any interest adverse to the
Debtor or its estate.
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).
Allan B. Hyman, Esq., at Proskauer Rose LLP, represent the Debtor
in its restructuring efforts. In the company's second bankruptcy
filing, it listed $123,829,000 in total assets and $140,460,000 in
total debts.
FRANKLIN CAPITAL: Gets Extension to Comply with AMEX Standards
--------------------------------------------------------------
Franklin Capital Corporation (AMEX:FKL) reported that, on
September 15, 2004, it received notification from the American
Stock Exchange that the Amex had accepted the Company's previously
submitted plan of compliance with certain of the continued listing
standards of the Amex and had granted the Company an extension of
time until December 26, 2005 to regain compliance, pursuant to
which the Amex will continue the Company's listing subject to
certain conditions.
The Company originally received a notice from the Amex on June 24,
2004, that the Company's securities were subject to delisting in
accordance with Sections 1003(a)(i) and 1003(a)(ii) of the Amex
Company Guide, which respectively provide that the Amex will
consider delisting the securities of any company with
stockholders' equity of less than $2,000,000 and losses from
continuing operations and/or net losses in two out of its three
most recent fiscal years or stockholders' equity of less than
$4,000,000 and losses from continuing operations and/or net losses
in three out of its four most recent fiscal years. Pursuant to the
original notice, the Company was afforded the opportunity to
submit a plan of compliance to the Amex and, on September 13,
2004, the Company presented the final components of its proposed
plan to the Amex. This plan was designed with the input and
assistance of Ault Glazer & Company Investment Management LLC, a
major stockholder of the Company that has been working with the
Company in recent months to implement a restructuring plan
intended to maximize the value of the Company to its stockholders.
The Company will be subject to, among other things, periodic
review by the Amex staff during the extension period. The Amex has
notified the Company that failure to make progress consistent with
the plan or to regain compliance with the continued listing
standards by December 26, 2005 could result in the Company's
securities being delisted from the Amex, and no assurances can be
made that the Company will be able to maintain its listing.
About Franklin Capital Corporation
Franklin Capital Corporation is a subsidiary of Franklin
Resources Inc., formed to expand Franklin Resources automotive and
consumer lending activities related primarily to the purchase,
securitization and servicing of retail installment sales
contracts originated by retailers and automobile dealerships.
Franklin Capital Corporation originates and services direct and
indirect loans for itself and its sister company Franklin
Templeton Bank and Trust, F.S.B. Eight different loan programs
are offered, allowing Franklin Capital Corporation to serve the
needs of prime, non-prime and sub-prime customers throughout the
United States.
* * *
As reported in the Troubled Company Reporter on August 24,
Franklin Capital Corporation's former independent accountants,
Ernst & Young LLP, indicated in its reports dated March 5, 2004
and March 7, 2003 on Franklin's financial statements, substantial
doubt about the company's ability to continue as a going concern.
FREMONT INVESTMENT: Moody's Assigns Ba2 Rating to Class M-8 Certs.
------------------------------------------------------------------
Moody's Investors Service assigned a Aaa rating to the senior
certificates issued by Fremont Home Loan Trust 2004-C, and ratings
ranging from Aa2 to Ba2 to the subordinate certificates in the
deal, except for subordinate Class M-9.
The securitization is backed by Fremont Investment & Loan subprime
mortgage loans of which 84.74% are adjustable-rate and 15.26% are
fixed-rate. The ratings are based primarily on the credit quality
of the loans, and on the protection from subordination,
overcollateralization, and excess spread.
Fremont, an adequate servicer, will service the loans.
The complete rating actions are:
Fremont Home Loan Trust 2004-C
* Class IA, rated Aaa
* Class IIA-1, rated Aaa
* Class IIA-2, rated Aaa
* Class M-1, rated Aa2
* Class M-2, rated Aa3
* Class M-3, rated A2
* Class M-4, rated A3
* Class M-5, rated Baa1
* Class M-6, rated Baa2
* Class M-7, rated Baa3
* Class M-8, rated Ba2
FRONTIER OIL: Moody's Lifts Senior Implied Rating to Ba3 from B1
----------------------------------------------------------------
Moody's upgraded Frontier Oil Corporation's Senior Implied Rating
from B1 to Ba3 and assigned a B1 rating to its new $150 million of
6.625% senior unsecured guaranteed notes due 2011, with a stable
rating outlook. Moody's also upgraded Frontier Oil's senior
unsecured issuer rating (a notional non-guaranteed parent issuer
rating) from B2 to B1 and Frontier Oil's remaining $170 million of
non-guaranteed 11.75% senior unsecured notes from B2 to B1.
Note proceeds will fund the majority of Frontier Oil's pending
call and retirement of the 11.75% notes (expected to cost roughly
$180 million), with $35 million of Frontier Oil's $88 million in
June 30, 2004 cash balances funding the rest of the tender cost.
The one-notch upgrade in the senior implied rating reflects:
* the impact of a continued disciplined approach to evaluating
acquisition candidates;
* a supportive margin environment driven by supportive regional
crack spreads and by amply wide crude oil quality price
differentials;
* cash balances to provide back-up internal funding for heavy
2005 and 2006 capital spending; and
* moderate leverage to bridge margin down-cycles and support
revolver borrowings in such an environment in needed to
support an escalated capital program and high inventory
investment driven by high oil costs.
The ratings also benefit from Frontier Oil's two-refinery base,
which provides a modest degree of operational and margin risk
diversification the fact that Frontier Oil's two refineries are
well served logistically by vital connections to important
regional crude oil supply and refined product take-away pipelines.
The unit cost structures, conversion capacities, and product yield
profiles of each refinery have adequately permitted them to
operate profitably in the Rocky Mountain and lower Midwest
regions, respectively.
The ratings are restrained by Frontier Oil's small size, leverage,
acquisitive posture, reliance on only two refineries, and
inherently highly volatile refining margins. Additionally, at
very high crude oil costs, Frontier Oil's $175 million revolver
appears to approach full utilization for letters of credit and
existing drawings. This risk is mitigated by high cash balances
and Frontier Oil's ability to pre-pay for crude oil shipments,
though cash balances may be consumed during heavy 2005-2006
capital spending outlays. Furthermore, Frontier Oil will be
increasingly reliant on its own product marketing capabilities as
the refined product off-take contract with Shell Oil continues to
reduce over time.
The rating outlook is stable, reflecting moderate pro-forma net
leverage for the rating and expected sound second-half 2004
operating results, tempered by heavy 2005-2006 capital spending,
flexibility to accommodate a substantial acquisition appetite, and
substantial revolver usage during high oil prices for elevated
letter of credit issuance and cash borrowings. The ratings and
outlook would be vulnerable to leveraged acquisitions. On the
other hand, the ratings are set at levels designed to weather a
normal refining downcycle of average duration. The ratings could
be strained, however, if a more severe downcycle occurred in the
midst of Frontier Oil's heavy 2005-2006 capital spending.
Credit developments to watch for over the next nine months
include:
(i) potential acquisition activity;
(ii) Frontier Oil's cash flow coverage of 2005-2006 capital
spending (heavy low sulfur diesel capital spending);
(iii) degree of unscheduled downtime; crude oil price
differential trends;
(iv) the impact of Frontier Oil's heavy oil supply agreement
with Baytex Energy;
(v) natural gas cost trends;
(vi) regional asphalt margins;
(vii) regional production trends for heavy and medium sour
crude oil feedstock;
(viii) regional trends in gasoline and distillate demand,
supply, and crack spreads; and
(ix) progress on the Beverly Hills and Holly Corporation law
suits.
While the new parent notes are guaranteed by Frontier Oil's
material subsidiaries, improving their position in the capital
structure compared to the unguaranteed 11.75% notes being retired,
the notch between the senior implied rating and the note rating
remains in place due to material existing and material potential
needs for secured borrowings. Still, the fact that the new notes
have upstream guarantees sets the stage for the eventual removal
of the senior notes' notching once Frontier Oil demonstrates:
-- it can fund its heavy 2005-2006 capital spending budget
without materially incurring secured bank debt;
-- existing secured bank debt is materially reduced; and
-- that potential acquisitions are funded by a mix of senior
unsecured notes (not more senior than pari passu with the
new notes) and common equity rather than by secured bank
debt.
With a stable rating outlook, the ratings actions include:
1) Upgrade senior implied rating from B1 to Ba3.
2) Upgrade senior unsecured issuer rating from B2 to B1.
3) Upgrade from B2 to B1 Frontier Oil's 11.75% senior unsecured
non-guaranteed notes due 2009.
4) Assign B1 to Frontier Oil's $150 million of new 6.625%
senior unsecured guaranteed notes due 2011.
First quarter 2004 EBITDA was a low $7.5 million while second
quarter 2004 EBITDA rose to a very strong $93 million, following
$81 million of EBITDA in 2003 and $55 million in 2002. In first
quarter 2004, Frontier Oil under-performed sector benchmarks, with
its performance suffering from unscheduled downtime. Second and
third quarter 2004 results benefited from strong capacity
utilization, supportive sector crack spreads, and wide cost
differentials between heavy/sour and light/sweet crude oil. Such
strength amply offset the negative impact of high natural gas
costs and the impact of high oil costs on asphalt and other by-
product margins.
Gross debt on June 30, 2004 was $208 million (not adjusted for
significant operating leases) and net debt was $120 million (net
of $88 million cash). Moody's estimates pro-forma Gross
Debt/Total Capital of 48% and Net Debt/Total Capital of 40% (up
from 36%). High oil costs and inventory builds for the summer
driving season pushed inventory investment to $176 million by
June 30, 2004, up from $124 million at year-end 2003, and $105
million at year-end 2002. Letters of credit peaked at more than
$150 million in August 2004. Frontier Oil had just over $84
million of undrawn bank revolver under its $175 million working
capital secured facility at June 30, 2004.
The B1 rating of the guaranteed notes is one notch under the
senior implied rating. This is due to their effective
subordination to secured bank debt resident at subsidiary Frontier
Oil Refining Company. While the parent notes are guaranteed by
Frontier Oil Refining, the bank debt is secured by Frontier Oil
Refining's receivables and inventory via a pledge of secured
inter-company notes for Frontier Oil Refining's advances to its
sister refining operating affiliates. Frontier Oil Refining is a
working capital finance subsidiary that owns its sisters'
receivables and inventory. Revolver covenants do mandate no
borrowings for five consecutive days a year, reinforcing its use
for working capital and not long-term funding.
Frontier Oil Corporation is headquartered in Houston, Texas.
FRONTIER OIL: Fitch Says Outlook is Positive on Low-B Rated Debts
-----------------------------------------------------------------
Fitch placed the ratings of Frontier Oil Corporation on Outlook
Positive following the company's announcement that it has
commenced a cash tender offer for its remaining $170 million of
11-3/4% senior unsecured notes due 2009. The company is issuing
new senior unsecured notes in a private placement to help finance
the tender offer. The 11-3/4% notes become callable in November.
Fitch rates Frontier's senior unsecured debt at 'B+' and the
company's secured credit facility at 'BB-'.
The change to Outlook Positive reflects the continued improvement
in Frontier's capital structure as a result of the refinancing.
Positive rating action will be considered upon completion of the
refinancing and resolution of the legal dispute with Holly
Corporation. A decision in the Holly dispute is expected soon.
Frontier's rating reflects the company's position as an
independent refiner with a solid market position within its core
geographic niche markets, the Rocky Mountains and Plains states.
Offsetting factors include the limitations of operating a two
refinery system, vulnerability to refining margins, and the
potential risk of primarily debt-financed acquisitions. However,
Fitch expects that Frontier would include an equity component in
the financing of any sizable acquisition to support the company's
debt ratings.
Frontier Oil Corporation is an independent refiner and wholesale
marketer of petroleum products, operating two refineries, a 46,000
barrel-per-day refinery in Cheyenne, Wyoming, and a 110,000 bpd
refinery in El Dorado, Kansas.
FOSTER WHEELER: Successful Exchange Offer Cuts Debt by $450 Mil.
----------------------------------------------------------------
Foster Wheeler Ltd.'s (OTCBB: FWLRF) equity-for-debt exchange
offer has succeeded by meeting its minimum participation
thresholds. Foster Wheeler will close on the exchange within the
next several days.
The exchange reduces Foster Wheeler's existing debt by
approximately $450 million, reduces interest expense by
approximately $28 million per year, and, when combined with the
sale of new notes to repay amounts currently outstanding under
Foster Wheeler's existing domestic credit agreement, eliminates
substantially all material scheduled corporate debt maturities
prior to 2011.
"The completion of this equity-for-debt exchange is the most
significant accomplishment at Foster Wheeler in many years," said
Raymond J. Milchovich, chairman, president, and chief executive
officer. "We have provided a dramatically improved capital
structure to support our worldwide operating subsidiaries. Our
post-exchange debt level is the lowest we have had since 1995, and
we have eliminated all material corporate debt maturities through
early 2011."
"I would like to express our sincere appreciation to our clients
and employees who have provided continued support and dedication
throughout our restructuring," continued Mr. Milchovich. "I would
also like to thank our debt holders who have shown their
confidence in Foster Wheeler by becoming shareholders in our newly
recapitalized company. We now look forward to focusing on
providing world class products and services to our clients,
pursuing our full business potential, and competing for quality
contracts in the world arena."
Legal Details
The securities proposed to be exchanged are as follows:
(1) Foster Wheeler's Common Shares and its Series B
Convertible Preferred Shares and warrants to purchase
Common Shares for any and all outstanding 9.00% Preferred
Securities, Series I issued by FW Preferred Capital Trust I
(liquidation amount $25 per trust security) and guaranteed
by Foster Wheeler Ltd. and Foster Wheeler LLC, including
accrued dividends;
(2) Foster Wheeler's Common Shares and Preferred Shares for
any and all outstanding 6.50% Convertible Subordinated
Notes due 2007 issued by Foster Wheeler Ltd. and guaranteed
by Foster Wheeler LLC;
(3) Foster Wheeler's Common Shares and Preferred Shares for
any and all outstanding Series 1999 C Bonds and Series 1999
D Bonds (as defined in the Second Amended and Restated
Mortgage, Security Agreement, and Indenture of Trust dated
as of October 15, 1999 from Village of Robbins, Cook
County, Illinois, to SunTrust Bank, Central Florida,
National Association, as Trustee); and
(4) Foster Wheeler's Common Shares and Preferred Shares and up
to $150,000,000 of Fixed Rate Senior Secured Notes due
2011 of Foster Wheeler LLC guaranteed by Foster Wheeler
Ltd. and certain Subsidiary Guarantors for any and all
outstanding 6.75% Senior Notes due 2005 of Foster Wheeler
LLC guaranteed by Foster Wheeler Ltd. and certain
Subsidiary Guarantors; and solicitation of consents to
proposed amendments to the indenture relating to the 9.00%
Junior Subordinated Deferrable Interest Debentures, Series
I of Foster Wheeler LLC, the indenture relating to the
6.50% Convertible Subordinated Notes due 2007 and the
indenture relating to the 6.75% Senior Notes due 2005.
The exchange offer expired at 5:00 p.m., New York City time, on
September 21, 2004.
As of 5:00 p.m. on September 21, 2004, holders have tendered the
following dollar amounts and percentages of the following original
securities:
(1) 9.00% Preferred Securities, $103,750,350 (59.3%);
(2) 6.50% Convertible Subordinated Notes, $209,930,000
(99.97%);
(3) Robbins Series C Bonds due 2024, $56,643,071 (73.4%),
Robbins Series C Bonds due 2009, $12,032,282 (99.2%), and
Robbins Series D Bonds, $35,489,277 based on the balance
due at maturity (99.1%); and
(4) 6.75% Senior Notes, $192,118,000 (96.1%).
Subsequent Offering Period
In order to allow additional investors to participate in the
exchange, Foster Wheeler also announced the commencement of a
subsequent offering period. This period commences September 22,
2004 and will expire at 5:00 p.m., New York City time, on Oct. 20,
2004. Remaining securities tendered during the subsequent offering
period will be immediately accepted and promptly exchanged for new
securities, as described in the registration statement on Form S-4
(File No. 333-107054). Holders tendering securities during the
subsequent offering period will receive the same consideration as
holders who tendered during the initial offering period.
Securities tendered during the subsequent offering period may not
be withdrawn.
The subsequent offering period will not delay the prompt closing
on all securities tendered through and accepted on September 21.
Investors and security holders are urged to read the following
documents filed with the SEC, as amended from time to time,
relating to the exchange offer because they contain important
information: (1) the registration statement on Form S-4 (File No.
333-107054) and (2) the Schedule TO (File No. 005-79124). These
and any other documents relating to the exchange offer, when they
are filed with the SEC, may be obtained free at the SEC's Web site
at http://www.sec.gov/or from the information agent as noted
above.
The foregoing references to the exchange offer and any other
related transactions shall not constitute an offer to buy or
exchange securities or constitute the solicitation of an offer to
sell or exchange any securities in Foster Wheeler Ltd. or any of
its subsidiaries.
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.
GIORGIO SHELLFISH: Case Summary & 16 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Giorgio Shellfish Corporation
dba Jordan's Lobster Dock
dba Hook Creek Seafood Company
3165 Harkness Avenue
Brooklyn, New York 11235
Bankruptcy Case No.: 04-23413
Type of Business: The Company is a lobster specialty restaurant.
Chapter 11 Petition Date: September 20, 2004
Court: Eastern District of New York (Brooklyn)
Judge: Jerome Feller
Debtor's Counsel: Bruce Weiner, Esq.
Rosenberg Musso & Weiner LLP
26 Court Street, Suite 2511
Brooklyn, New York 11242
Tel: (718) 855-6840
Total Assets: $2,952,000
Total Debts: $5,415,078
Debtor's 16 largest unsecured creditors:
Entity Claim Amount
------ ------------
Todtman Young, et. al. $140,000
Harbor Lobster Company $91,695
Portland Maine Lobster Company $44,651
Nelson A. Williams $35,000
Crown Fish $25,697
Gold Coast Lobster Company $12,120
Annelli Seaford Company $11,642
Cesspool Man $9,163
Pitney Bowes Corporation $7,460
Fox Paper $7,298
Ocean Clear Lobster Company $6,337
BFD Fish & Lobster Company $6,103
Arrow Seafood $2,533
Tarter, Krinsky, & Drogin LLP $2,500
Montauk Seafood $1,999
F&L Fillet $880
HOLLINGER INT'L: Declares $0.05 Per Share Quarterly Dividend
------------------------------------------------------------
Hollinger International, Inc.'s (NYSE: HLR) Board of Directors
declared a quarterly dividend of $0.05 per share on the issued and
outstanding common stock of the Company to be payable
October 15, 2004 to stockholders of record on October 1, 2004.
Hollinger International Inc. is a newspaper publisher with
English-language newspapers in North America and Israel. Its
assets include The Chicago Sun-Times and a large number of
community newspapers in the Chicago area, The Jerusalem Post and
The International Jerusalem Post in Israel, a portfolio of new
media investments, and a variety of other assets.
* * *
As reported in the Troubled Company Reporter on August 6, 2004,
Moody's Investors Service has changed the rating outlook on
Hollinger International Publishing Inc. to positive from stable
and has withdrawn other ratings. Details of this rating action
are:
Ratings withdrawn:
-- $45 million Senior Secured Revolving Credit Facility,
due 2008 -- Ba2
-- $210 million Term Loan "B", due 2009 -- Ba2
-- $300 million of 9% Senior Unsecured Notes, due 2010 -- B2
Ratings confirmed:
-- Senior Implied rating -- Ba3
-- Issuer rating -- B2
The outlook is changed to positive.
IMPERIAL SCHRADE: U.S. Trustee Meets Creditors on Oct. 18
---------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of Imperial
Schrade Corp.'s creditors at 11:00 a.m. on October 18, 2004, at 74
Chapel Street, Hearing Room 101, Ground Floor, Albany, New York.
This is the first meeting of creditors required under 11 U.S.C.
Sec. 341(a) in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Ellenville, New York, Imperial Schrade Corp.
-- http://www.schradeknives.com/-- manufactures and designs
knives and tools. The Company filed for Chapter 11 protection on
September 10, 2004 (Bankr. N.D.N.Y. Case No. 04-15877). Charles J.
Sullivan, Esq., at Hancock & Estabrook, LLP, represents the Debtor
in its restructuring efforts. When the Debtor filed for protection
from its creditors, it estimated more than $10 million in assets
and debts.
INSTITUTE FOR CANCER: Case Summary & Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Institute for Cancer Prevention
American Health Foundation
390 Fifth Avenue
New York, New York 10018-8161
Bankruptcy Case No.: 04-16148
Type of Business: The Foundation is a non-profit private
research organization devoted to cancer
prevention and control.
Chapter 11 Petition Date: September 21, 2004
Court: Southern District of New York (Manhattan)
Judge: Allan L. Gropper
Debtor's Counsel: Alan B. Miller, Esq.
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, New York 10153
Tel: (212) 310-8272
Total Assets: $1 Million to $10 Million
Total Debts: $1 Million to $10 Million
Debtor's 20 largest unsecured creditors:
Entity Claim Amount
------ ------------
New York Medical College Cashier's Office $498,544
Administration Building
Valhalla, NY 10595
Con Edison $238,134
Pennsylvania University $173,162
Strang Cancer Prevention Center $116,834
Hilson Management Corporation $57,647
Tatum CFO Partners, LLP $39,933
University of Nebraska $34,012
Nebraska Medical Center
Beckman $25,961
Cedars Sinai Medical Center $25,169
Memorial Sloan-Kettering $24,602
University of Hawaii $24,330
Xerox Corporation $23,980
Kaiser Foundation Research Institute $23,137
Heidrick & Struggles, Inc. $22,606
Shimadzu Scientific $21,024
U.S. Secretary Associates, Inc. $19,623
Darby & Darby $18,837
Medical University of South Carolina $16,572
Accent Maintenance $16,483
La Bio Med $16,065
INTEGRATED TELECOM: 3rd Cir. Tells Bankr. Court to Dismiss Case
---------------------------------------------------------------
Integrated Telecom Express, Inc., said the United States Court of
Appeals for the Third Circuit reversed the May 2004 order of the
United States District Court for the District of Delaware. The
United States Court of Appeals for the Third Circuit also remanded
the case to the Bankruptcy Court with instructions to dismiss
Integrated Telecom Express' petition under Chapter 11. The Company
is currently exploring its appellate options in light of this
decision.
As reported in the Troubled Company Reporter on May 27, 2004, the
United States District Court for the District of Delaware upheld
the January 2003 order of the United States Bankruptcy Court for
the District of Delaware denying the motion filed by the
Integrated Telecom Express, Inc.'s former landlord and largest
creditor to dismiss the bankruptcy case. The United States
District Court also affirmed the Bankruptcy Court's order
confirming the Company's Second Amended Plan of Liquidation under
Chapter 11. The landlord has indicated that it will appeal the
decision to the Third Circuit Court of Appeals.
About the Company
Integrated Telecom Express, Inc. (ITeX) designs, manufactures and
markets ADSL integrated circuits and software solutions. ITeX
products include analog and digital semiconductor devices with
operating system drivers and network protocol software.
INTERSTATE BAKERIES: Files for Chapter 11 Protection in W.D. Mo.
----------------------------------------------------------------
Interstate Bakeries Corp. (NYSE:IBC) and seven debtor-affiliates
filed for chapter 11 protection yesterday in the U.S. Bankruptcy
Court for the Western District of Missouri. The company says the
petitions were filed "to provide it with the necessary time to
complete an operational and financial restructuring."
$200 Million DIP Financing
Concurrent with the filing, the company said that, subject to
Court approval, it has received a commitment for $200 million in
debtor-in-possession financing from JPMorgan Chase Bank to fund
post-petition operating expenses, supplier and employee
obligations. The company said that it would continue to operate
its bakeries, outlet stores and distribution centers and deliver
its products, which include Wonder(R), Merita(R) and Butternut(R)
breads; Drake's(R), Twinkies(R) and Hostess(R) cakes to retail
outlets across the country in the normal course.
Alvarez & Marsal
Separately, the company announced that its Board of Directors had
named nationally recognized turnaround experts, Tony Alvarez as
chief executive officer and John Suckow as chief restructuring
officer. Mr. Alvarez co-founded and is co-chief executive and Mr.
Suckow is a managing director of the global corporate advisory and
turnaround management services firm Alvarez & Marsal, Inc. In
addition, Director Leo Benatar was elected non-executive Chairman
of the company's Board of Directors. James R. Elsesser, the
company's former chairman and CEO, resigned both positions
effective today.
IBC cited liquidity issues, resulting from declining sales, a high
fixed-cost structure, excess industry capacity, rising employee
healthcare and pension costs and higher costs for ingredients and
energy, as major factors in its decision to file.
"IBC has some of the most recognizable and popular baked breads
and sweet goods brands in the nation," said Mr. Alvarez. "By
filing for protection under Chapter 11 and obtaining the DIP
financing, the company should have the liquidity, time and
resources necessary to thoroughly identify, assess and address the
issues that will enable this company to be successful in the
future."
Mr. Alvarez said that the company expects day-to-day operations to
continue as usual during the reorganization and that management
has sought authority from the Bankruptcy Court to pay employees
and honor benefits without interruption or delay.
"DIP financing and the protections afforded under the Bankruptcy
Code provide the liquidity to ensure payment to vendors for post-
petition purchases in the ordinary course," Mr. Alvarez said.
Interstate Bakeries Corporation is the nation's largest wholesale
baker and distributor of fresh baked bread and sweet goods, under
various national brand names, including Wonder(R), Hostess(R),
Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The
Company, which is headquartered here, employs approximately 32,000
in 54 bakeries, more than 1,000 distribution centers and 1,200
thrift stores throughout the U.S.
INTERSTATE BAKERIES: Case Summary & 30-Largest Unsecured Creditors
------------------------------------------------------------------
Lead Debtor: Interstate Bakeries Corporation
12 E. Armour Boulevard
Kansas City, Missouri 64111
Chapter 11 Petition Date: September 22, 2004
Lead Bankruptcy Case No.: 04-45814
Debtor-affiliates filing separate chapter 11 petitions:
Case No. Debtor Entity
-------- -------------
04-45816 Interstate Brands Corporation
04-45817 IBC Sales Corporation
04-45818 IBC Trucking, LLC
04-45819 New England Bakery Distributors, L.L.C.
04-45820 Baker's Inn Quality Baked Goods, LLC
04-45821 IBC Services, LLC
04-45822 Armour and Main Redevelopment Corporation
Bankruptcy Court: United States Bankruptcy Court
Western District of Missouri
Western Division at Kansas City
Charles Evans Whittaker Courthouse
400 E. 9th Street
Kansas City, Missouri 64106
Telephone (816) 512-1800
http://www.mow.uscourts.gov/
Bankruptcy Judge: The Honorable Jerry W. Venters
Circuit: Eighth
Debtors' Lead
Bankruptcy
Counsel: J. Eric Ivester, Esq.
Samuel S. Ory, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
333 West Wacker Drive, Suite 2100
Chicago, IL 60606-1285
Telephone (312) 407-0700
Fax (312) 407-0411
http://www.skadden.com/
- and -
J. Gregory Milmoe, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036-6522
Telephone (212) 735-3000
Fax (212) 735-2000
http://www.skadden.com/
Debtors' Local
Bankruptcy
Counsel: Paul M. Hoffmann, Esq.
Stinson Morrison Hecker LLP
2600 Grand Boulevard
Kansas City, MO 64108
Telephone (816) 691-2600
Fax (816) 474-4208
http://www.stinson.com/
Debtors'
Restructuring
Managers: Antonio Alvarez II
John K. Suckow
Robert A. Campagna
Arthur J. Morissette
Joseph J. Sciametta
Victor Alvarez
Alvarez & Marsal, LLC
101 East 52nd Street
New York, NY 10022
Telephone (212) 759-4433
Fax (212) 759-5532
Debtors'
Financial
Advisor: Miller Buckfire Lewis Ying & Co., LLC
Debtors'
Accountants: Deloitte & Touche LLP
Debtors'
Claims Agent: Eric S. Kurtzman
Jonathan A. Carson
Kurtzman Carson Consultants LLC
12910 Culver Blvd Ste I
Los Angeles, CA 90066
Telephone (310) 823-9000
Fax (310) 923-9133
http://www.kccllc.com/
U.S. Trustee: Charles E. "Sketch" Rendlen III
United States Trustee for Region 13
Paula C. Acconcia, Esq., Asst. U.S. Trustee
400 East 9th Street, Room 3440
Kansas City, MO 64106
Telephone (816) 512-1940
Fax 816-512-1964
Counsel to the
Post-Petition
DIP Lenders: Gregory D. Willard, Esq.
Bryan Cave LLP
211 N. Broadway, Suite 3600
St. Louis, Missouri 63102
- and -
Laurence M. Frazen, Esq.
Bryan Cave LLP
1200 Main Street, Suite 3500
Kansas City, Missouri 64105
Counsel to the
Pre-Petition
Lenders: Kenneth S. Ziman, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
- and -
Scott Goldstein, Esq.
Spencer Fane Britt & Browne LLP
1000 Walnut Street, Suite 1400
Kansas City, Missouri 64106-2140
Financial Condition as of May 29, 2004:
Total Assets: $1,626,425,000
Total Debts: $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated
convertible notes due August 15,
2014 on August 12, 2004)
List of the Debtors' 30-Largest Unsecured Creditors:
Creditor Nature of Claim Claim Amount
-------- --------------- ------------
Highbridge International LLC
9 W. 57th St., 27th Fl.
New York, NY 10019
Fax: 212-287-4915 Convertible Note $35,000,000
Isotope Limited
Waterfronte Centre
28 N. Church St., 2nd Floor
George Town, Grand Caymen,
Caymen Islands,
British West Indies
Fax: 203-422-3500 Convertible Note $35,000,000
AG Offshore
Convertibles LTD
245 Park Ave., 26th Fl.
New York, NY 10167
Attn: Michael Gordon
Fax: 212-867-6395 Convertible Note $10,500,000
Shepherd Investments Int. LTD
3600 South Lake Dr.
St. Francis, WI 53235
Fax: 414-294-7700 Convertible Note $10,500,000
Cereal Foods Processors
2001 Shawnee Mission Parkway
Mission Woods, KS 66205
Attn: Mark Dobbins
Phone: 913-890-6300 Trade $8,642,222
Stark Trading
3600 South Lake Dr.
St. Francis, WI 53235
Fax: 414-294-7700 Convertible Note $5,000,000
Horizon Milling
15407 McGinty Rd. W
Wayzata, MN 55391
Attn: Mike Wagner
Phone: 952-742-5571
Fax: 952-742-7934 Trade $4,850,751
AG Domestic Convertibles LP
245 Park Ave., 26th Fl.
New York, NY 10167
Attn: Michael Gordon
Fax: 212-867-6395 Convertible Note $4,500,000
ADM
8000 W. 110th Street
Overland Park, KS 66201-2312
Attn: Mike Marsh
Phone: 913-491-9400
Fax: 913-491-9610 Trade $4,109,900
Cargill
P.O. Box 5693
Minneapolis, MN 55440
Attn: Sam Schmidt
National Accts. Mngr.
Phone: 952-742-6749
Fax: 952-742-5503 Trade $3,644,723
Campbell-Mithun
NW-1315
Minneapolis, MN 55485
Attn: Steve Gordon
Phone: 612-347-1412
Fax: 612-347-1038 Trade $3,640,176
Con Agra Flour Milling
400 S. Executive Dr., Ste. 100
Brookfield, WI 53005
Attn: Stuart Dalton
Phone: 402-595-7574 Trade $3,354,662
Innovative Cereal Systems
26994 SW 95th Ave.
Building 100
Wilsonville, OR 97070
Attn: Greg Worthington
President
Phone: 503-570-7501
Fax: 503-570-8502 Trade $2,572,971
Bartlett Milling
4800 Main Street, Suite 600
Kansas City, MO 64112
Attn: Rod Geiger, VP
Phone: 800-888-6300
Fax: 816-931-3404 Trade $2,572,971
Accenture
15115 Park Row, Suite 200
Houston, TX 77084
- and -
Accenture
1010 Market, Suite 900
St. Louis, MO 63101
Attn: Mike Fox
Fax: 314-345-3505 Trade $2,441,919
Pliant
1475 Woodfield Rd., Suite 700
Schaumburg, IL 60173
Attn: Doug Bengtson
Phone: 847-969-3301 Trade $2,017,615
American Yeast
4000 Air Park Cove, Suite One
Memphis, TN 38118
Attn: Jean Chagnon, CEO
Phone: 901-547-1579
Fax: 901-362-2961 Trade $1,727,646
Fleishchmann's Yeast
240 Larkin Williams Court
Fenton, MO 63026
Attn: Frank Schoonyang
Phone: 800-247-7473
Telephone: 636-349-8800
Fax: 636-349-8865 Trade $1,612,566
Bunge Foods
10820 Windsor Woods Blvd.
Fort Wayne, IN 46845
Attn: Dan Updike
Phone: 219-425-5202
Fax: 260-416-0852 Trade $1,545,193
General Mills Inc.
3089 N. 86th Place
Scottsdale, AZ 85251
Attn: Michael Carter
Director of Sales
Phone: 513-489-7774
Fax: 480-421-9618 Trade $1,512,408
Ed Miniat
1055 W. 175th St., Suite 201
Homewood, IL 60430
Attn: Mike Botelho, VP
Phone: 800-621-8793
Fax: 708-957-7382 Trade $1,364,869
Chicago Displays
1999 N. Ruby
Melrose Park, IL 60160
Attn: Craig Binney
Phone: 800-681-4340
Fax: 708-681-4340 Trade $1,343,697
Tate and Lyle
2200 E. El Dorado
Decatur, IL 62521
Attn: Tom Szanajda
Territory Manager
Phone: 651-322-8164
Fax: 651-322-1264 Trade $1,171,679
Bay State Milling
100 Congress St.
Quincy, MA 02169
Attn: Steve Bramwell, VP Sales
Phone: 617-328-4400
Fax: 617-328-4400 Trade $1,045,153
Service Warehouse Center
500 South Kitley Ave.
Indianapolis, IN 46219
Attn: Charlie Mong
Phone: 317-698-8437
Fax: 800-541-9649 Trade $933,454
Amalgamated Sugar
2427 Lincoln Ave.
Ogden, UT 84402
Attn: Bill Smith, VP Sales
Phone: 801-399-3431
Fax: 801-393-8042 Trade $909,834
Milner Milling
P.O. Box 2247
Chattanooga, TN 37409
Attn: Peter Fredrick, VP
Phone: 423-265-2313
Fax: 423-265-2468 Trade $868,009
Roman Meal Milling Company
2101 S. Tacoma Way
Tacoma, WA 98409
Attn: Bill Zimmerman
Phone: 253-473-3952
Fax: 253-720-6851 Trade $832,573
Barry Callebaut USA
400 Industrial Park Rd
St. Albans, VT 05478
Attn: Joseph Lucas
Phone: 802-524-9711
Fax: 802-524-5148 Trade $786,151
Manildra Milling
4210 Shawnee Mission Parkway
Suite 312A
Mission, KS 66205
Attn: Jay Peaster
Phone: 913-362-0777
Fax: 913-362-0674 Trade $758,707
INTRAWEST CORPORATION: Offering $325 Million 7.50% Senior Notes
---------------------------------------------------------------
Intrawest Corporation intends to sell, on a private placement
basis in the United States under Rule 144A of the Securities Act
of 1933 and in each of the Canadian provinces, US dollar-
denominated 7.50% senior notes due 2013, and Canadian dollar-
denominated senior notes due 2009. The total aggregate principal
amount of Notes expected to be sold is approximately
US$325 million. The closing of the offerings is expected to take
place on October 7, 2004.
The company intends to use the proceeds from the sale of the
US$ Notes and the Cdn$ Notes to pay a portion of the consideration
under the previously announced tender offer and consent
solicitation in respect of the company's US$394.16 million
aggregate principal amount of 10.50% senior notes due 2010. The
remainder of the consideration payable under the tender offer and
consent solicitation for the 2010 Notes will come from borrowings
under the company's credit facilities and from cash on hand.
The US$ Notes and the Cdn$ Notes will not be and have not been
registered under the Securities Act and may not be offered or sold
in the United States absent registration or an applicable
exemption from the registration requirements under the Securities
Act.
This news release shall not constitute an offer to sell or a
solicitation of an offer to buy any US$ Notes, Cdn$ Notes or any
other securities, nor will there be any sale of the US$ Notes,
Cdn$ Notes or any other security in any jurisdiction in which such
an offer or sale would be unlawful.
Intrawest Corporation (IDR:NYSE; ITW:TSX) (S&P, BB- Long-Term
Corporate Credit Rating, Positive Outlook) develops and operates
village-centered resorts. The company owns or controls 10
mountain resorts, including Whistler Blackcomb, North America's
most popular mountain resort. Intrawest also owns Sandestin Golf
and Beach Resort in Florida and has a premier vacation ownership
business, Club Intrawest. The Company is developing additional
resort villages at six resorts in North America and Europe. The
Company has a 45 per cent interest in Alpine Helicopters Ltd.,
owner of Canadian Mountain Holidays, the largest heli-skiing
operation in the world. Intrawest is headquartered in Vancouver,
British Columbia and is located on the World Wide Web at
http://www.intrawest.com/
INTRAWEST CORP: S&P Assigns B+ Rating to $325M Senior Notes
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' senior
unsecured debt rating to Vancouver, B.C.-based developer and
operator of village-centered resorts Intrawest Corp.'s U.S.
dollar-denominated 7.5% senior notes due 2013 and its Canadian
dollar-denominated notes due 2009, for a total aggregate principal
amount of about US$325 million. At the same time, Standard &
Poor's affirmed its 'BB-' long-term corporate credit rating on
Intrawest. The outlook is positive.
"The proceeds from this issue are intended to finance a tender
offer to purchase US$394.16 million of existing 10.5% senior
unsecured notes," said Standard & Poor's credit analyst Ronald
Charbon. "Although the notes are not callable until
February 2005, Intrawest is extending the tender offer through a
make-whole call provision," Mr. Charbon added. In addition,
Intrawest intends to use borrowings from its credit facilities to
complete the transaction. The offer to purchase the notes
outstanding is subject to completion of the new issue.
The ratings on Intrawest reflect:
* the cyclical and seasonal nature of the resort business,
* an aggressive financial policy, and
* continued uncertainty in travel patterns.
These weaknesses are offset by:
* Intrawest's leading position and successful track record in
owning, operating, and developing village-centered
destination resorts across North America;
* the maturing of the portfolio of resorts into a less capital-
intensive stage; and
* the company's disciplined resort real estate development
strategy.
The effect of the proposed new issue on Intrawest's coverage
measures is slightly positive, given the about 300-basis point
differential in interest costs. Standard & Poor's pro forma
interest coverage is expected to improve to 2.1x from 2.0x. Total
debt to EBITDA is expected to rise marginally to 3.8x from 3.7x as
about US$113 million of additional debt is added as Intrawest
draws down the senior credit facility. Intrawest's level of
secured debt has decreased to about 22%; however, Standard &
Poor's will continue to distinguish (via one notch) between its
corporate credit rating and the senior unsecured debt rating.
The positive outlook reflects the long-term performance prospects
in the company's credit measures:
* as the portfolio of village-centered resorts improve their
cash flow,
* as a heavy capital investment period in the resorts is
completed, and
* as the debt reduction program is fully executed.
Intrawest has a successful record in its resort real estate
business, which continues to have strong prospects.
IPSCO INCORPORATED: Fidelity Discloses 14.79% Equity Stake
----------------------------------------------------------
Fidelity Management & Research Company and Fidelity Management
Trust Company as well as Fidelity International Limited discloses
that certain fund accounts for which Fidelity serves as investment
adviser have purchased 361,600 shares of Ipsco Inc.'s outstanding
common stock. Fidelity has control but not ownership of these
shares. As a result of the purchase, Fidelity holds 7,132,970
shares or 14.79% of Ipsco Inc.'s common stock. Fidelity's
purchase of Ipsco Inc.'s common stock was executed on the Toronto
Stock Exchange.
Fidelity fund purchases have been made for investment purposes
only and not with the purpose of influencing the control or
direction of Ipsco, Inc. The Fidelity funds may, subject to
market conditions, make additional investments in or dispositions
of securities of Ipsco Inc., including additional purchases or
sales of common stock. Fidelity does not, however, intend to
acquire 20% of any class of the outstanding voting or equity
securities of Ipsco Inc.
For all inquiries, contact:
Kim Flood
Vice President, External Communications
Fidelity Investments Canada Ltd.
(416) 217-7566
* * *
As reported in the Troubled Company Reporter on February 26, 2004,
Standard & Poor's Ratings Services lowered its ratings on steel
producer IPSCO Inc., including the long-term corporate credit
rating, which was lowered to 'BB' from 'BB+'. At the same time,
Standard & Poor's lowered its rating on the company's 5.5%
cumulative redeemable first preferred shares to 'B' from 'B+'.
The downgrade affects about US$425 million in unsecured debt. The
outlook is stable.
The downgrade is the result of the company's persistently weak
profitability and cash flow, as well as its aggressive capital
structure amid difficult operating conditions in the North
American steel minimill sector. Although the company's revenues
are expected to increase with the general improvement in steel
market conditions, higher input costs stemming from currently
tight scrap steel supplies could limit profit and cash flow
growth.
ISPAT INLAND: Moody's Raises Senior Secured Ratings to B3
---------------------------------------------------------
Moody's Investors Service upgraded all senior secured ratings of
Ispat Inland Inc., and its affiliate, Ispat Inland U.L.C. to B3
from Caa1. The action is based on the company's significant
improvement in profitability during the first half of 2004 from
higher shipments, prices, and the benefits of operating
efficiencies attributed to recent capital investments. Moody's
ratings also consider Ispat Inland's high debt balance, current
pension fund obligations and exposure to rising costs. The
positive outlook reflects Moody's expectations that the company
will apply internally generated cash flow to delever its balance
sheet. Ispat Inland Inc. is a subsidiary of the Ispat
International N.V. group of companies, which includes Ispat Europe
Group S.A., Ispat Mexicana, S.A. de C.V., Ispat Sidbec Inc., and
Caribbean Ispat Ltd.; the majority of the obligations of these
entities are supported by guarantees from the parent company.
Ratings upgraded:
* Ispat Inland Inc.
-- senior implied rating raised to B3 from Caa1;
-- senior secured first mortgage bonds raised to B3 from
Caa1;
-- senior unsecured issuer rating raised to Caa2 from Caa3;
-- unsecured industrial revenue bonds ratings raised to Caa2
from Caa3.
* Ispat Inland U.L.C
-- $650 million senior secured notes, due 2014, to B3 from
Caa1,
* Ispat Inland U.L.C.
-- $150 million senior secured notes, due 2010, to B3 from
Caa1,
-- Outlook - positive
Moody's upgrade is based on the recent improvement in Ispat
Inland's operating income, and Moody's expectation that improved
performance will continue over the near term. Robust levels of
revenue and profit generation should be sustained over the balance
of 2004 based on continuing high order rates combined with
enhanced operating efficiencies from significant capital
investments made during 2003 to reline its #7 blast furnace.
Nevertheless, Moody's anticipates some moderation in
profitabilaity during 2005 from rising input costs and possible
customer resistance to sustained high steel prices. Additionally,
rising input costs for scrap and natural gas are expected to
restrain Ispat Inland's ability to realize the full benefits of
favorable industry dynamics; although as a vertically integrated
steel maker, the company does have access to adequate supplies of
coke, iron ore and coal.
Moody's ratings consider that Ispat Inland's debt obligations
increased during the first half of 2004 from rising working
capital requirements in support of higher production levels and
rising input costs (scrap and natural gas). On balance sheet debt
at June 30 of $1.406 billion compared unfavorably with
$1.343 billion at year-end 2003. Off balance sheet obligations
for pension fund contributions are significant and a current use
of cash; Ispat Inland is obligated to contribute another
$44 million during the second half of 2004 after having
contributed $67 million earlier in the year. Despite higher debt
levels for working capital needs, the company's on balance sheet
leverage ratio declined to 5.1 times from 13.2 times at year end
(inclusive of other income).
The company's access to liquidity was light at just $160 million
of cash and credit availability; and essentially all its assets
are encumbered. Moody's notes that Ispat Inland's $200 million
receivables-based credit facility will become current in November
2004 and looks for the company to address this upcoming maturity
satisfactorily.
The positive rating outlook anticipates that Ispat Inland will
de-lever with internally generated cash flows. Earlier in the year
the company made its $67 million contribution to its pension fund,
and since the end of the second quarter it prepaid a $15 million
supplier note. Moody's looks for Ispat Inland to de-lever its
balance sheet over the balance of 2004 and into 2005 while
continuing to address off balance sheet obligations. Cash
requirements for capital investments should remain moderate over
the long-term and dividend payments to the parent entity could
resume, but are not expected to redirect significant amounts of
cash away from the company. Incremental positive pressure on
Ispat Inland's ratings could result if the terms of Ispat Inland's
supply contracts are renewed at more favorable prices, ongoing
labor contract negotiations conclude on favorable terms patterned
on agreements at other domestic integrated producers (United
States Steel and ISG), and meaningful progress on debt is
achieved. Conversely, downward pressure may be exerted on the
outlook or ratings if Ispat Inland fails to reduce its obligations
with cash flow, reallocates profit to other entities within the
Ispat International group, or experience a contraction in
profitability from rising input costs or unexpected deterioration
in pricing.
Ispat Inland is the fourth largest integrated steel producer in
the U.S. with approximately 6.0 million tons of capacity.
Headquartered in East Chicago, Indiana, Ispat Inland reported
trailing four quarter revenues of $2.5 billion.
JILLIAN'S ENT: Stalking Horse Bidders Win Auction With $65 Million
------------------------------------------------------------------
Jillian's Entertainment Holdings, Inc., and its affiliates
conducted an auction on September 21, 2004, to sell substantially
all of their assets. The highest and best bid was jointly
submitted by Dave & Buster's Inc. (NYSE: DAB) and Gemini Investors
III, L.P., for approximately $65 million. Both Dave and Buster's
Inc., and Gemini Investors III, L.P., initially submitted
"stalking horse" bids when Jillian's filed for bankruptcy under
Chapter 11 of the U.S. Bankruptcy Code on May 23, 2004. The
auction was conducted pursuant to bidding procedures approved
under Section 363 of the U. S. Bankruptcy Code.
The U.S. Bankruptcy Court for the Western District of Kentucky in
Louisville has tentatively scheduled a hearing today, Sept. 23, to
approve the sale. The parties intend to close the sale by the end
of October, pending U.S. Bankruptcy Court approval.
Headquartered in Louisville, Kentucky, Jillian's Entertainment
Holdings, Inc. -- http://www.jillians.com/-- operates more than
40 restaurant and entertainment complexes in about 20 US states.
The Company filed for chapter 11 protection on May 23, 2004
(Bankr. W.D. Ky. Case No. 04-33192). Edward M. King, Esq., at
Frost Brown Todd LLC and James H.M. Sprayregen, Esq., at Kirkland
& Ellis LLP, represent the Debtors in their restructuring efforts.
When the Company filed for protection from their creditors, they
listed estimated assets of more than $100 million and estimated
debts of over $50 million.
JOLIET JUNIOR: Fitch Holds C Rating & Says Default "Inevitable"
---------------------------------------------------------------
Fitch Ratings' 'C' rating of the Will County, Illinois housing
project revenue bonds -- Joliet Junior College housing project --
is unchanged following the project's latest disclosure filings.
The 'C' rating continues to reflect Fitch's opinion that default
seems inevitable based on the filings, the only sources of
detailed information available.
The Sept. 17 filing by the bonds' obligor, Foundation Housing, LLC
notes that the failure to meet the rate covenant for fiscal 2004
'might give rise' to an event of default. The filing states that
events of default may lead to the trustee or bondholders
accelerating payments on the bonds, applying to a court for
appointment of a receiver, or foreclosing on the mortgage securing
the bonds.
Occupancy at the 296-bed housing project for Joliet Junior
students continues to be under 50%, compared to above 90% reported
occupancy at the beginning of each of the two previous academic
years. According to the Sept. 17 filing, the manager believes
that current occupancy levels should result in sufficient revenues
to meet operating and maintenance expenses 'through the 2004 fall
semester' and, including the moneys on hand in the dwindling debt
service reserve fund, sufficient funds to make the March 2005 debt
service payment in full.
According to a Sept. 21 filing, the manager has identified
numerous marketing challenges for the project, including a more
competitive local rental market and the project's 'reputation,'
which is said to have resulted in a 'negative connotation to the
property and the school.' An estimate included in the filing,
based on current occupancy levels, projects that payment of debt
service during the 2004-2005 operating year would result in a cash
flow deficit of more than $700,000. The only substantial source
of remaining liquidity for the project, the debt service reserve
fund, had a balance of only $360,306 on Sept. 2.
Given these facts, Fitch is skeptical of the claim that the
project will have sufficient resources to meet obligations through
March 2005. Prior years have seen declines in occupancy during
semesters and substantial bad debt, although the project
previously has reported efforts to combat these troubling trends.
Even if the project is able to meet obligations through March
2005, its debt service reserve fund likely would be exhausted at
that point. Without a dramatic and unlikely rise in rental
revenue or a significant decrease in the amount of expenses that
must be supported by rental revenues, default then would be
delayed by only a few more months. Neither Joliet Junior nor its
fundraising foundation is required to meet the project's debt
service obligations or otherwise subsidize project operations, and
the college has indicated that it will not do so.
For these reasons, the 'C' rating continues to reflect Fitch's
opinion that default is inevitable. As stated in prior reports,
Fitch believes that recovery prospects after default are low to
moderate.
MCI PROPERTIES: Case Summary & 4 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: M.C.I. Properties, Inc.
1020 Rock Avenue
San Jose, California 95131
Bankruptcy Case No.: 04-55891
Chapter 11 Petition Date: September 21, 2004
Court: Northern District of California (San Jose)
Judge: Marilyn Morgan
Debtor's Counsel: Charles B. Greene, Esq.
Law Offices of Charles B. Greene
84 West Santa Clara St. #770
San Jose, CA 95113
Tel: 408-279-3518
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 4 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Santa Clara County Tax Real property taxes $90,000
Assessor 2001-2002
2002-2003 est.
Ken Miu Monies lent $30,000
A&E Anodizing, Inc. Lawsuit $22,812
Advanta $4,290
MEDQUEST INC: Moody's Assigns B1 Rating to $60 Million Term Loan
----------------------------------------------------------------
Moody's Investors Service assigned a rating of B1 to MedQuest,
Inc. $60 million senior secured term loan facility. The term loan
facility was part of a $140 million amended and restated senior
secured credit facility completed in September 2003. The term
loan was previously unrated by Moody's. Additionally, the B2
senior unsecured issuer rating at MedQuest, has been reassigned to
MedQuest's parent company, MQ Associates, Inc., and the rating is
revised to Caa1. The reassignment of the rating does not reflect
a downgrade in the rating, but rather the placement of the issuer
rating at the highest corporate debt issuer level and the rating
is equivalent to the senior discount notes issued by MQ Associates
in August 2004.
Ratings assigned:
* $60 million senior secured term loan due 2009 at MedQuest,
rated B1
* Ca senior unsecured issuer rating at MQ Associates, Inc.
Ratings affirmed:
* $80 million senior secured revolving credit facility due
2007, rated B1
* $180 million 11.875% senior subordinated notes due 2012,
rated B3
* B1 senior implied rating
Ratings affirmed:
* $85 million senior discount notes at MQ Associates, Inc. due
2012, rated Caa1
Ratings withdrawn:
* B2 senior unsecured issuer rating at MedQuest Inc.
The outlook for the ratings is negative.
The ratings reflect:
(i) the company's increasing leverage profile;
(ii) the competitive nature of the diagnostic imaging
business;
(iii) the significant number of physician group practices
employing imaging machines and the potential for lost
scan volume of MedQuest;
(iv) the potential for continued pricing pressure of scans
due to competition;
(v) concerns about industry over-utilization of diagnostic
imaging and the potential for volume reductions going
forward;
(vi) the tight technician market and the overall increasing
labor cost trends;
(vii) the potential for lost management focus after a
significant payout on their equity; and
(viii) the limited debt repayment ability of the company due to
weak free cash flows.
The ratings also reflect:
(i) the company's consistent performance of historical
operations;
(ii) management's long tenure and continued significant
equity holdings;
(iii) Moody's expectations for continued scan volume increases
despite concerns about over-utilization within the
industry;
(iv) the company's geographical diversity and clustered
market approach;
(v) a modern equipment base reflecting the company's
significant investment in new and updated equipment; and
(vi) the diversified payor mix of the company thus minimizing
concentration exposure.
The negative outlook reflects Moody's opinion that the aggressive
financial policies of management and J.P. Morgan Partners have
resulted in a releveraging of the company's balance sheet. The
increase in leverage is particularly concerning given the
potential for pressure on revenues and cash flow as a result of
competition or declines in reimbursement. If MedQuest experiences
margin pressure resulting in decreasing cash flow, the ratings
would likely be lowered.
The negative outlook also reflects the weak free cash flow of
MedQuest as a result of the significant capital employed by the
company in both maintenance of existing equipment and new
equipment purchases to expand market share. If MedQuest continues
to aggressively employ capital to expand market share resulting in
limited debt repayment, the outlook and ratings would not likely
be upgraded. However, if the company continues to generate
improving cash flow resulting in deleveraging (without debt
repayment) the outlook would improve. If the company looks to
utilize excess free cash flow to reduce debt, the ratings would
likely improve.
The senior secured term loan is rated at the senior implied level
to reflect the modest collateral value of the company's assets.
MedQuest, Inc., is a leading operator of independent, fixed-site,
outpatient diagnostic imaging centers. MedQuest, Inc. is a wholly
owned subsidiary of MQ Associates, Inc. The company's centers
provide diagnostic imaging services using a variety of
technologies including magnetic resonance imaging, computed
tomography, nuclear medicine, general radiology (fluoroscopy and
x-ray), ultrasound and mammography. MedQuest currently operates a
network of 89 centers in 13 states primarily throughout the
southeastern and southwestern United States. Of the company's
centers, 22 are multi-modality, 34 are dual modality and 33 are
MRI only. For the twelve months ended June 30, 2004, MedQuest
reported total revenues of $266 million.
METROPOLITAN MORTGAGE: Files Joint Plan of Reorganization
---------------------------------------------------------
Metropolitan Mortgage & Securities Co., Inc., and its
debtor-affiliate Summit Securities, Inc., filed a Joint Plan of
Reorganization with the U.S. Bankruptcy Court for the Eastern
District of Washington. A full-text copy of the Plan is available
for a fee at:
http://www.researcharchives.com/download?id=040812020022
The Plan constitutes a separate plan for each of the Debtors.
Each class for Metropolitan is identified by "M" and each class
for Summit is identified by "S."
The Plan groups claims and interests in nine classes and describes
the treatment of each:
Class Treatment
----- ---------
1 - M1: Other Priority Claims Unimpaired. Will be paid in
Against Metropolitan full after the later of the
Distribution Date or the date
Class 1 claim becomes an
allowed priority claim.
Payment will either be in:
a) cash in an amount equal
to the unpaid portion of
such allowed Class 1
claim; or
b) such other treatment as to
which there was an
agreement in writing.
S1: Other Priority Claims Unimpaired. Will be paid in
Against Summit Full after the later of the
Distribution Date or the date
Class 1 claim becomes an
allowed priority claim.
Payment will either be in:
a) cash in an amount equal to
the unpaid portion of such
allowed Class 1 claim; or
b) such other treatment as to
which there was an
agreement in writing.
2 - M2: Secured Claims Against Unimpaired.
Metropolitan A. IDS Secured Claim, WULA
Summit Project Secured Claim,
WULA Madsen Court Secured
Claim On the Effective Date,
the holder of claims will
receive one of these
treatments:
a) fully paid in cash;
b) the sale or disposition
proceeds of the property
securing such claim to
the extent of the value of
such holder's interest in
such property;
c) the surrender of the
property securing such
allowed Secured Claim
to the holder of such
claim; or
d) such other distributions as
shall be necessary to
satisfy the requirements of
chapter 11 of the
Bankruptcy Code for such
claim to be reinstated or
rendered unimpaired under
section 1124.
S2: Secured Claims Against Metropolitan Mortgage
Summit Backed Secured Claim,
Metropolitan KOA Secured
Claim:
On the Effective Date, the
holder of claims will
receive one of these
treatments:
a) fully paid in cash;
b) the sale or disposition
proceeds of the property
securing such claim to
the extent of the value of
such holder's interest in
such property;
c) the surrender of the
property securing such
allowed Secured Claim
to the holder of such
claim; or
d) such other distributions as
shall be necessary to
satisfy the requirements of
chapter 11 of the
Bankruptcy Code for such
claim to be reinstated or
rendered unimpaired under
section 1124.
3 - M3: General Unsecured Claim Impaired. On the Effective
Date, will receive in full
satisfaction, settlement,
release, discharge of and in
exchange for such allowed
Class 3 claim, a pro rata
beneficiary's interest and
distribution in the
Metropolitan Creditors'
Trust.
S3: General Unsecured Claim Impaired. On the Effective
Date, will receive in full
satisfaction, settlement,
release, discharge of and in
exchange for such allowed
Class 3 claim, a pro rata
beneficiary's interest and
distribution in the
Metropolitan Creditors'
Trust.
4 - M4: Intercompany Affiliate Impaired. On the Effective
Claims Date, will receive in full
satisfaction, settlement,
release, discharge of and in
exchange for such allowed
Class 4 claim, a pro rata
beneficiary's interest and
distribution in the
Metropolitan Creditors'
Trust.
S4: Intercompany Affiliate Impaired. On the Effective
Claim Date, will receive in full
satisfaction, settlement,
release, discharge of and in
exchange for such allowed
Class 3 claim, a pro rata
beneficiary's interest and
distribution in the
Metropolitan Creditors'
Trust.
5 - M5: Metropolitan Subordinated Will be cancelled,
Debenture Securities Claims discharged and eliminated in
full on the Effective Date.
S5: Summit Subordinated Will be cancelled,
Debenture Securities Claims discharged and eliminated in
full on the Effective Date.
6 - M6: Metropolitan Preferred Will be extinguished on the
Stock Interests Effective Date.
S6: Summit Preferred Will be extinguished on the
Stock Interests Effective Date.
7 - M7: Metropolitan Subordinated Will be cancelled,
Preferred Stock discharged and eliminated in
Securities Claim full on the Effective Date.
S7: Summit Subordinated Will be cancelled,
Preferred Stock discharged and eliminated in
Securities Claims full on the Effective Date.
8 - M8: Intercompany Claims On the Effective Date, as a
result of rejection of an
executory contract or
unexpired lease, the claim
will be cancelled,
discharged and eliminated in
full.
S8: Intercompany Claims On the Effective Date, as a
result of rejection of an
executory contract or
unexpired lease, the claim
will be cancelled,
discharged and eliminated in
full.
9 - M9: Metropolitan Common Will be extinguished and the
Stock Interests holders will not be entitled
to receive any property or
interest in property under
this Plan.
S9: Summit Common Will be extinguished and the
Stock Interests holders will not be entitled
to receive any property or
interest in property under
this Plan.
Headquartered in Spokane, Washington, Metropolitan Mortgage &
Securities Co., Inc. is into the business of Insurance and Annuity
Operations. It, along with Summit Securities Inc., filed for
Chapter 11 protection (Bankr. E.D. Wash. Case No.: 04-00757) on
February 4, 2004. Bruce W. Leaverton, Esq. of Lane Powell Spears
Lubersky LLP and Doug B. Marks, Esq. of Elsaesser, Jarzabek,
Anderson, Marks, Elliot & McHugh represent the Debtors in their
restructuring efforts. As of petition filing date, Metropolitan
Mortgage listed assets of $420,815,186 and debts of $415,252,120.
MICROCELL TELECOM: Moody's Continues Review of Junk Ratings
-----------------------------------------------------------
Moody's Investor's Service continues to review for possible
upgrade the Caa1 Senior Implied and Ca Issuer ratings of Microcell
Telecommunications, Inc., and the B3 First Priority Senior Secured
and Caa2 Second Priority Senior Secured ratings of Microcell
Solutions, Inc.
The review, which initially commenced in May 2004 following the
C$1.1 billion cash bid for Microcell by TELUS Corporation, will
now consider the announcement that Rogers Wireless Communications,
Inc., Rogers Communications, Inc., and Microcell have entered into
an agreement under which Wireless will make a C$1.4 billion cash
bid for Microcell's securities. The agreement is subject to
regulatory approvals and Microcell shareholder acceptance.
The review will consider the potential for either of the TELUS or
Wireless bids to be completed, and Microcell's debt to be fully
repaid.
Debt affected by this action:
* Microcell Solutions, Inc.
-- 1st Priority Senior Secured B3
-- Revolving bank loan, due February 2010 C$ 50 million
-- Term Loan A, due February 2011 C$200 million
-- 2nd Priority Senior Secured Caa2
-- Term Loan B, due August 2011 C$200 million
Microcell Telecommunications, Inc., is the fourth largest wireless
operator in Canada. Microcell is headquartered in Montreal,
Quebec, Canada.
TELUS Corporation is Canada's second-largest telecommunications
company, offering local, long distance, data and wireless
services. TELUS is headquartered in Vancouver, British Columbia,
Canada.
Rogers Communications, Inc., is a communications holding company
that owns 100% of Rogers Cable, Inc., Canada's largest cable
company, 56% of Rogers Wireless Communications, Inc., which wholly
owns Rogers Wireless Inc., one of Canada's three largest wireless
cellular operators, and 100% of Rogers Media Inc., which owns
radio, TV and publishing assets. All companies are headquartered
in Toronto, Ontario, Canada.
MIRANT CORP: Asks Court to Establish Claim Estimation Procedures
----------------------------------------------------------------
During their Chapter 11 cases, Mirant Corporation and its debtor-
affiliates focused on matters related to stabilization of their
businesses, utilization of the various provisions of the
Bankruptcy Code designed to help facilitate their reorganization
efforts, and the defense and prosecution of certain routine
Chapter 11 matters and certain other extraordinary matters
particularly unique to their cases.
Beginning in the early Spring of 2004 when the Debtors circulated
a business plan to the Committees, the process began to transition
into the plan negotiation and formulation phase of the case.
While the Debtors and creditor constituencies have started to
engage in initial discussions concerning enterprise value, debt
capacity and liquidity, the Debtors also began resolving disputed
claims filed against their estates. The Debtors developed
procedures for resolving disputed claims in an efficient fashion
utilizing minimal Court time that also provided efficiencies to
all parties. The Debtors are pleased with the results achieved
during the early stages of the claim objection process.
The Tier IV Objections and adversary proceedings that the Debtors
have filed or commenced thus far have been directed at disallowing
or reducing some of the more material claims, the liquidation of
which will certainly impact creditor recoveries. Within the
coming months, the Debtors intend to file additional Tier IV
Objections, seeking to resolve certain claims against the estates,
including certain Material Tier IV Claims that could impact
recoveries under a plan of reorganization.
Against this backdrop, the Debtors ask the U.S. Bankruptcy Court
for the Northern District of Texas to:
(a) establish procedures for estimating Material Tier IV
Claims and other claims filed in their cases;
(b) declare that the estimation of any claim pursuant to the
Estimation Procedures is binding for all purposes,
including but not limited to, feasibility of, voting on,
and distribution under a Chapter 11 plan of reorganization
for the Debtors; and
(c) fix notice procedures in connection with the Estimation
Procedures and approve the form and manner of notice for
the estimation and resolution of Claims and Counterclaims.
According to Michelle C. Campbell, Esq., at White & Case, LLP, in
Miami, Florida, the Estimation Procedures will allow the Debtors
to utilize Section 502(c) of the Bankruptcy Code in the event the
liquidation of the Material Tier IV claims or other claims would
serve to unduly delay the plan process and administration of their
Chapter 11 cases. With careful consideration of the due process
rights of the claimants, the Estimation Procedures have been
structured and designed to ensure that each claim is carefully
reviewed and that all claimants receive appropriate due process
protection, while at the same time facilitating the economically
efficient resolution of the claims.
Ms. Campbell tells Judge Lynn that the proposed Estimation
Procedures are the product of numerous discussions among the
Debtors, their professionals and the Committees. The Debtors
anticipate that the Committees will support the approval and
implementation of the Estimation Procedures.
The Estimation Procedures contain, among other things, these
specific procedures and requirements:
A. Tracks
To effectively address the unliquidated, disputed and
contingent claims asserted against the Debtors' estates, the
Debtors divided the claims into three broad groups, referred
to as "Tracks." The Tracks address the varying levels of
legal and factual complexity among the claims and are
specifically tailored to promote expeditious and efficient
resolution of the claims, while providing each claimant with
appropriate due process protection. Through this process, the
Debtors desire to foster an environment conducive to
settlement and avoid potentially unnecessary litigation fees
and expenses.
(a) Track 1: Prepetition Litigation on Appeal
* Litigation decided by a trial court or administrative
agency and for which appellate briefs previously have
been filed; and
* Litigation decided by a trial court or administrative
agency and for which appellate briefs have not yet been
filed.
(b) Track 2: Summary Proceedings
Claims that the Debtors have determined can be resolved
through summary proceedings, including minimal evidentiary
presentations and discovery.
(c) Track 3: Complex Disputes
Claims concerning complex, commercial litigation matters,
including prepetition lawsuits and large rejection damage
claims, the liquidation of which will require more
extensive evidentiary presentations and discovery.
B. Estimation Notice and Estimation Request
The Debtors will provide appropriate notice of a request to
estimate a claim pursuant to the Estimation Procedures. The
Estimation Notice sets forth, among other things, the time
and date (1) of the Estimation Hearing and (2) by which a
claimant may file and serve a response to the Estimation
Request.
Among others, the Estimation Request will provide:
-- the Track to which the claim will be assigned;
-- the legal and factual basis for the Debtors' estimation;
and
-- the Debtors' estimation of the appropriate amount of the
claim and any evidence supporting the estimation.
C. Counterclaim
The Debtors may assert any counterclaims against a claimant
for purposes of set-off by setting forth in the Estimation
Request the legal and factual basis for the Counterclaim.
D. Response
A claimant must file and serve a response to the Estimation
Request and any documents required to be produced within the
period set forth for the particular track to which a claim has
been assigned.
E. Reply
If a claimant timely serves a Response, the Debtors may file
and serve a reply, which may include:
(a) the Debtors' arguments and defenses with respect to the
claim; and
(b) an affidavit to controvert any evidence supporting the
Response.
If the Debtors assert a counterclaim against the claimant that
was not originally asserted in the Notice Package, the Debtors
may set forth in the Reply:
-- the elements and verified statement of evidence supporting
the Counterclaim; and
-- disclosures consistent with the disclosures required in the
Response.
F. Settlement
At any time after the service of the Notice Package, the
Debtors and a claimant may negotiate a settlement of the
estimated amount of a claim. For settlements equal to or less
than $20,000,000 or 120% of the Debtors' estimation of the
claim, the settlement is subject to a negative notice period
of five days. In the absence of any objection, the settlement
establishing the amount of an allowed claim is effective and
binding on the sixth day.
For settlements greater than $20,000,000 or 120% of the
Debtors' estimation of the claim, the Debtors will file a
motion pursuant to Rule 9019(a) of the Federal Rules of
Bankruptcy Procedure and request a hearing on regular notice.
Any settlement reached between the Debtors and a claimant
will be binding on the affected claimant for all purposes,
including but not limited to, the feasibility of, the voting
on, and distribution under a plan. The settlement will not
provide for the payment of a claim other than in accordance
with a confirmed plan.
G. Estimation Hearing
Unless otherwise ordered by the Court, an estimation hearing
will be held for each claim on the date specified in the
Estimation Notice. If a claimant fails to file a timely
Response or fails to comply with any other procedures and
requirements in the Estimation Procedures, the Debtors will
ask the Court at the Estimation Hearing to fix the claim in
the amount of the Debtors' Estimate, without any requirement
for argument or further submission.
H. Status Conferences
If at any time after the claimant files its Response, the
Debtors deem it necessary for the Court to hold a status
conference, the Estimation Procedures allow for the Court to
conduct a status conference on the Debtor's next regularly
scheduled hearing date that is at least three days after the
Debtors serve notice on the claimant and the Committees.
Unless otherwise stated in the notice or ordered by the Court,
the scheduling of a status conference does not stay the
estimation proceedings and applicable deadlines.
I. Modification of Procedures
A party can seek modification of the Estimation Procedures for
good cause shown. A good cause showing must be made no later
than the claimant's Response deadline or the next applicable
deadline to which the proposed modification relates.
J. of Pending Claim Objection & Contested Matters
of Adversary Proceedings
Once an Estimation Notice is served, any pending claim
objection, matter or adversary proceeding, is stayed.
Procedures Must be Approved
The Debtors designed the Estimation Procedures to ensure the
efficient and equitable resolution of certain claims with the
least possible impact and cost to their estates, their creditors,
and the Court. The Estimation Procedures, including the
assignment of claims to Tracks, will:
-- ensure that the claimants receive appropriate due process
protection;
-- conserve the resources of these estates;
-- assist the Court in effectively administering the claims;
and
-- serve the interests of all parties-in-interest.
The Debtors contend that asserting Counterclaims as part of the
Estimation Request will enhance the likelihood that the ultimate
allowed claim is accurate and will minimize the chance that the
Debtors will be forced to seek the Court for subsequent additional
relief.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- together with its direct and indirect
subsidiaries, generate, sell and deliver electricity in North
America, the Philippines and the Caribbean. The Company filed for
chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex.
03-46590). Thomas E. Lauria, Esq., at White & Case LLP represent
the Debtors in their restructuring efforts. When the Company filed
for protection from their creditors, they listed $20,574,000,000
in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News,
Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000)
MOONEY AEROSPACE: Needs More Time to File 2nd Quarter Report
------------------------------------------------------------
Mooney Aerospace Group, LTD, notified the Securities and Exchange
Commission that its Form 10-QSB for the period ended June 30, 2004
could not be filed within the prescribed period because the
Company was unable to complete certain information critical to
filing a timely and accurate report on the internal financial
aspects of the Company. According to the Company such inability
could not have been eliminated by the Company without unreasonable
effort or expense.
Mooney Aerospace Group, Ltd. sold Mooney Airplane Company Inc. to
Allen Holding and Finance, Ltd. on May 28, 2004.
Headquartered in Kerrville, Texas, Mooney Aerospace Group, Ltd.
-- http://www.mooney.com/-- is a general aviation holding company
that owns Mooney Airplane Co., located in Kerrville, Texas. The
Company filed for chapter 11 protection on June 10, 2004 (Bankr.
Del. Case No. 04-11733). Mark A. Frankel, Esq., at Backenroth
Frankel & Krinsky LLP, represents the Debtor in its restructuring
efforts. When the Company filed for protection from its creditors,
it listed $16,757,000 in total assets and $69,802,000 in total
debts.
MUELLER GROUP: Extends Exchange Offer Until Tomorrow
----------------------------------------------------
Mueller Group, Inc., extended its offer to exchange up to
$100,000,000 aggregate principal amount of its new Second Priority
Senior Secured Floating Rate Exchange Notes due 2011 for up to
$100,000,000 of its existing Second Priority Senior Secured
Floating Rate Notes due 2011, and to exchange up to $315,000,000
aggregate principal amount of its new 10% Senior Subordinated
Exchange Notes due 2012 for up to $315,000,000 of its existing 10%
Senior Subordinated Notes due 2012. A Registration Statement
under the Securities Act of 1933 with respect to the Floating Rate
Exchange Notes and the Senior Exchange Notes was declared
effective by the Securities and Exchange Commission on
August 10, 2004.
The Company extended the expiration date of the exchange offer
until 5:00 p.m., New York time, on September 24, 2004.
As of the close of business on September 20, 2004, the Company was
advised by the exchange agent for the exchange offer that:
(i) an aggregate principal amount of $100,000,000 Floating
Rate Restricted Notes had been tendered in exchange for
an equivalent amount of Floating Rate Exchange Notes, and
(ii) an aggregate principal amount of $314,615,000 Senior
Restricted Notes had been tendered in exchange for an
equivalent amount of Senior Exchange Notes.
The terms and conditions of the exchange offer are set forth in
the Company's Prospectus, dated August 17, 2004, and the
accompanying Letter of Transmittal and other attachments. Subject
to applicable law, the Company may, in its sole discretion, waive
any condition applicable to the exchange offer at any time prior
to the expiration date or extend or otherwise amend the exchange
offer.
Copies of the Prospectus and related documents may be obtained
from Law Debenture Trust Company at (212) 750-6474. All other
questions should be directed to Investor Relations at the Company
at 217-425-7320.
About the Mueller Group, Inc.
The Mueller Group is a leading North American manufacturer of a
broad range of flow control products for use in water distribution
networks, water and wastewater treatment facilities, gas
distribution systems and piping systems. It has manufactured
industry-leading products for almost 150 years and currently
operates thirty manufacturing facilities located in the United
States, Canada, and China.
* * *
As reported in the Troubled Company Reporter on March 29, 2004,
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Mueller Group, Inc., and revised the outlook to
stable from positive.
At the same time, Standard & Poor's assigned its 'B+' bank loan
and its recovery rating of '3' to Decatur, Illinois-based Mueller
Group Inc.'s $635 million first-priority senior secured credit
facilities. The '3' recovery rating indicates an expected
meaningful recovery (50%-80%) of principal in the event of a
default.
Standard & Poor's also assigned its 'B-' rating and a recovery
rating of '5' to Mueller's $225 million second priority senior
secured notes due 2011. The '5' recovery rating indicates the
expectation of a negligible recovery (25% or less) of principal.
The company's $190 million senior subordinated notes due 2012 were
also assigned a 'B-' rating.
"The outlook revision reflects the company's aggressive debt
leverage and weak credit protection measures pro forma for the
transaction, its aggressive financial policies, cyclical end-
markets, and the competitive and capital-intensive nature of the
industry," said Standard & Poor's credit analyst Linli Chee.
"These risk factors are partially offset by the company's solid
business positions within niche segments of the North American
flow-control industry, a meaningful percentage of replacement
business, and large installed base."
NATIONAL CENTURY: Court Refuses to Quash July Bank One Subpoena
---------------------------------------------------------------
P. Brian See, Esq., at Squire, Sanders & Dempsey, LLP, in
Columbus, Ohio, recounts that the collapse of National Century
Financial Enterprises, Inc., led to a wave of civil litigation by
investors holding notes issued by NPF VI, Inc., and NPF XII, Inc.
The Noteholders sought to recover not only from the NCFE insiders
directly responsible for the fraud, but also from Bank One, N.A.,
and other institutions that provided services to NPF VI and NPF
XII. Bank One served as the Indenture Trustee for the NPF XII
program.
Initially filed in different forums, the lawsuits were transferred
to the United States District Court for the Southern District of
Ohio by the Judicial Panel on Multi-District Litigation. After
the transfer, Bank One and various other defendants in the MDL
Actions filed motions to dismiss. By operation of the Private
Securities Litigation Reform Act and state law, discovery in the
MDL Actions was stayed pending resolution of the motions.
Despite the discovery stay in the MDL Actions, the MDL Plaintiffs
obtained access to a substantial volume of documents and
information through discovery in the Debtors' bankruptcy cases.
Gibbs & Bruns, LLP, counsel for the vast majority of MDL
Plaintiffs, also serves as special litigation counsel to the
Debtors and to the Unencumbered Assets Trust, which now holds the
Debtors' unasserted legal claims. Bank One alone produced more
than 215,000 pages of documents pursuant to Rule 2004 subpoenas.
On July 30, 2004, the Trust served its Rule 30(b)(6) subpoena on
Bank One. The Trust designated 38 broad topics on which it wishes
to examine Bank One. Mr. See argues that the discovery is
designed to circumvent the MDL discovery stay and obtain one-
sided merits discovery for the MDL Plaintiffs.
Bank One's counsel attempted to compromise with the Trust's
counsel by narrowing the list of topics to conform to the Court's
instruction that the discovery be "reasonable and focused."
However, the Trust's counsel refused to negotiate. Bank One also
offered the Trust a tolling agreement that would preserve its
claims in exchange for coordinating the discovery it seeks with
discovery in the MDL proceeding, thereby saving all parties
substantial time and expense. The Trust rejected the offer.
Bank One now asks the Court to quash the deposition subpoena
served by the Trust.
Mr. See contends that Bank One's request is warranted on these
grounds:
(a) The Subpoena lacks good cause because:
(1) it is designed for the impermissible purpose of
taking discovery for the MDL Action. The
allegations made in the MDL Actions and the topics
designated in the Rule 2004 subpoena are similar;
and
(2) the discovery sought by the Trust -- Bank One's
position on what Indenture means and whether it was
violated -- is neither relevant nor necessary to
the process of identifying or evaluating its
claims.
(b) The Subpoena is unduly burdensome because:
(1) the proposed deposition would impose an undue
burden in time and expense. Preparing a witness to
address 38 separate subjects would consume enormous
resources, including the cost of reviewing numerous
documents bearing on Bank One's performance as
Indenture Trustee, diverting employees from their
normal job functions to testify or assist in
preparing the witness, and paying counsel to assist
in preparing the witness;
(2) the deposition would deprive Bank One of important
procedural protections. Rule 2004 examinations do
not provide the procedural safeguards afforded in
adversary proceedings or civil cases outside the
Bankruptcy Court;
(3) the Rule 2004 Examination would result in
duplicative and wasteful discovery and deprive Bank
One of the benefits of the MDL Proceedings; and
(4) the Trust has no legitimate interests that would
justify the substantial burdens its deposition
would impose on Bank One.
(c) The Subpoena seeks disclosure of attorney work product.
Many of the topics designated by the Trust encompass so-
called "opinion" work product -- the mental impressions,
opinions, and legal theories of counsel -- which courts
have recognized are crucial to the adversarial process
and worthy of heightened protection.
Debtors Respond
Sydney Ballesteros, Esq., at Gibbs & Bruns, in Houston, Texas,
contends that Bank One does not make a single specific objection
to any of the subpoenas' designated topics other than to conclude,
erroneously, that the Debtors' subpoena should be quashed because
it seeks the disclosure of attorney client work product.
While the Debtors do not dispute that courts may quash those
portions of a subpoena that specifically seek the disclosure of
truly privileged or protected material, Ms. Ballesteros asserts,
nothing in the topics disputed by Bank One seeks the disclosure of
that information.
In their requests, the Debtors and the Unencumbered Assets Trust
seek only Bank One's understanding of what the Indenture required,
and to the extent it changed over time, what Bank One's subsequent
understanding became. The request for a party's understanding of
its obligations under a contract it allegedly performed for more
than three years is hardly a request for privileged information,
Ms. Ballesteros remarks. In fact, asking a corporation to provide
its interpretation of a contract through a 30(b)(6) witness has
been suggested by courts to be a preferred method of acquiring
that information.
* * *
The Court denies Bank One's request.
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. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000)
OGLEBAY NORTON: Judge Approves Disclosure Statement
---------------------------------------------------
The Honorable Joel B. Rosenthal of the U.S. Bankruptcy Court for
the District of Delaware approved the Second Disclosure Statement
explaining the Amended Joint Plan of Reorganization filed by
Oglebay Norton Company and its debtor-affiliates on July 23, 2004.
A full-text copy of the Disclosure Statement explaining the Plan
is available for a fee at:
http://www.researcharchives.com/download?id=040812020022
The Debtors are now allowed to transmit their plan to creditors
and ask them to vote to accept or reject the restructuring
proposal.
The Plan groups claims and interests in ten classes and describes
the treatment of each:
Class Treatment
----- ---------
1 - Priority Claims Unimpaired. On the Effective Date,
each holder of an Allowed Claim will
receive cash equal to the amount of
such Allowed Claim, unless the
holder of such claim and the Debtor
agree to a different treatment.
2 - Vessel Term Loan Unimpaired. On the Effective Date,
Claims the Vessel Term Loan Agreement will
Be reinstated. In addition, the
Holder of the claim will be entitled
To retain any amount paid to it
As adequate protection.
Approximately $12,537,151
3 - Old Senior Secured Unimpaired. On the Effective Date,
Note Claims the Old Secured Notes will be
Reinstated and thereafter will be
Redeemed and satisfied in full with
A cash payment of 106 percent of
Principal amount of the old Senior
Secured Notes Purchase Agreement.
Each holder will retain any amount
paid to it or on its behalf as
adequate protection and receive and
retain any other amount that as of
the Effective Date are due.
Approximately 92,642,241
4 - Other Secured Claims Unimpaired. On the Effective Date,
unless otherwise agreed by a Claim
holder and the Debtor, each holder
of an Allowed Claim will receive one
of these treatments:
a) fully paid in cash;
b) reinstated; or
c) will be entitled to receive the
collateral securing such allowed
claim.
Approximately 189,279
5 - General Unsecured Unimpaired. On the Effective Date,
Claims holders will either:
a) receive cash equal to the
principal amount of its Allowed
Claim; or
b) have the principal amount of its
Allowed Claim reinstated.
Approximately 26,933,677
6 - MLO Claims Impaired. As of Effective Date, will
be assumed as amended by the
Reorganized Debtor. The Claim will
be paid in accordance with the
amended MLO Contract.
Approximately $14,000,000 to
$26,000,000
7 - Old Senior Impaired. Will be allowed in the
Subordinated Note aggregate amount of $105,611,111.
Claims On the Effective Date, each holder
will receive its pro rata share of
approximately 2,928,571 shares of
new common stock.
Estimated percentage recovery: 24%
8 - Intercompany Claims Impaired. No property will be
distributed to the holders of this
class. Deemed to have accepted the
Plan.
9 - Subsidiary Debtor Unimpaired. On the Effective Date,
Equity Interests the subsidiary Debtor equity
interests will be reinstated subject
to the restructuring transactions.
10 - Old Common Stock Impaired. On the Effective Date, the
of Oglebay Old Common Stock of Oglebay will be
cancelled. Each holder of an Allowed
Interest on account of Old Common
Stock of Oglebay will receive new
warrants to purchase one-tenth of a
share of new common stock. The
Debtors anticipate that the new
warrants will be exercisable for an
aggregate of approximately 523,869
shares of new common stock. A holder
of Old Common Stock who does not
hold an Allowed Interest on the
Distribution Record Date will not
receive any new warrants.
Headquartered in Cleveland, Ohio, Oglebay Norton Company, mines,
processes, transports and markets industrial minerals for a broad
range of applications in the building materials, environmental,
energy and industrial market. The Company and its debtor-
affiliates filed for chapter 11 protection on February 23, 2004
(Bankr. D. Del. Case Nos. 04-10559 through 04-10560). The Debtors
filed a chapter 11 Joint Plan of Reorganization on April 27, 2004.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger
represents the Debtors in their restructuring efforts. When the
Debtor filed for protection from its creditors, it listed
$650,307,959 in total assets and $561,274,523 in total debts.
OGLEBAY NORTON: Wants Plan Filing Exclusivity Extended to Oct. 20
-----------------------------------------------------------------
Oglebay Norton Company and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend until
October 20, 2004, their exclusive period to file a Plan of
Reorganization. The Debtors ask for a concomitant extension of
their exclusive period to solicit acceptances of a plan through
December 20, 2004.
The Debtors explain that they are substantially and diligently
making progress to emerge successfully in their reorganization,
thereby, satisfying section 1121(d) of the Bankruptcy Code which
provides that exclusivity can be extended where the debtor is
continuing to make significant progress towards a successful
restructuring.
Headquartered in Cleveland, Ohio, Oglebay Norton Company, mines,
processes, transports and markets industrial minerals for a broad
range of applications in the building materials, environmental,
energy and industrial market. The Company and its debtor-
affiliates filed for chapter 11 protection on February 23, 2004
(Bankr. D. Del. Case Nos. 04-10559 through 04-10560). The Debtors
filed a chapter 11 Joint Plan of Reorganization on April 27, 2004.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger
represents the Debtors in their restructuring efforts. When the
Debtor filed for protection from its creditors, it listed
$650,307,959 in total assets and $561,274,523 in total debts.
ORDERPRO LOGISTICS: Shareholders Demand Chairman's Resignation
--------------------------------------------------------------
The shareholders, associates and affiliates of OrderPro Logistics,
Inc., represented by William B. Haseltine, demanded the immediate
resignations of Jeffery Smuda, CEO and Director, Robert Scherne,
acting CFO, and Suzanne Wojner, OrderPro Logistics employee, on
the basis of alleged fraud, malfeasances, misrepresentation, SEC
violations and incompetence perpetrated by those named individuals
(as well as the auditing firm of Weinberg & Co.) accruing to the
great detriment of the company and its shareholders.
"The resignations of Jeffery Smuda, Robert Scherne and Suzanne
Wojner must be presented to the OrderPro Logistics board of
Directors today, September 23, in order to avoid causes of actions
to be filed against those individuals so named and against
OrderPro Logistics, Inc. on the behalf of all shareholders,
consultants and business partners similarly situated," Mr.
Haseltine said in a letter addressed to the Company's board of
Directors.
"Documentary evidence of alleged improprieties exists, and has
been forwarded variously to the Bankruptcy Court, opposing
attorneys and courts of law both with Arizona and Nevada. A
lawsuit will be filed to compel holding an annual meeting of the
shareholders," he added.
About the Company
OrderPro Logistics, Inc. is a customer-oriented provider of
innovative and cost-effective logistics solutions. With expertise
in multi-modal transportation management, OrderPro provides
complete supply chain management, including transportation
services, freight brokerage, on-site logistics management,
packaging assessment, process improvement consulting, claims
management, private fleet management and procurement management.
* * *
As reported in the Troubled Company Reporter on August 24,
OrderPro Logistics, Inc.'s consolidated financial statements have
been prepared on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities and
commitments in the normal course of business. As reflected in the
Company's condensed consolidated financial statements, the Company
has a net loss of $6,313,458, a negative cash flow from operations
of $714,627 and a working capital deficiency of $1,019,391. These
factors raise substantial doubt about its ability to continue as a
going concern.
ORMET CORP: Steelworkers Union Calls Reorganization Plan 'a Sham'
-----------------------------------------------------------------
The United Steelworkers of America says Ormet Corporation's plan
to reorganize and emerge from bankruptcy is not viable, and any
attempt by the company to unilaterally implement its "outrageous"
collective-bargaining demands will result in an immediate work
stoppage.
Ormet's reorganization plan and disclosure statement, filed
September 1 in United States Bankruptcy Court in Columbus, is an
attempt "to coerce and intimidate our members and retirees into
giving up hard won wages and benefits to line the pockets of
management and financial speculators," said David McCall, Director
of USWA District 1 in Ohio and the union's chief negotiator.
"Your Plan of Reorganization is a sham and your Disclosure
Statement a work of fiction," Mr. McCall told Ormet CEO R. Emmett
Boyle in a letter dated September 15.
Ormet's reorganization plan is contingent on the company
negotiating new agreements with the USWA at its Hannibal Reduction
Plant and Hannibal Rolling Mill. But since March, Boyle and his
"minions have engaged in nothing but bad faith bargaining," Mr.
McCall said.
"The USWA will continue to bargain in good faith and to pursue a
constructive path to reorganizing the Company for the benefit of
its members and retirees and the communities in which you
operate," Mr. McCall's letter went on. "Regrettably, to this
point, you have spurned every opportunity to deal in a like
manner."
Mr. McCall noted that other attempts to use the bankruptcy process
to decimate the living standards of Steelworkers members and
retirees, such as those by LTV Steel have been "confrontational
and self-destructive failures.
"But," he added, "where companies like ISG and Wheeling-Pittsburgh
have worked with the union, we have been able to craft productive
solutions to preserve jobs, maintain living standards and restore
profitability.
"We are going to save Ormet," Mr. McCall said, "but this company
is not going to be saved on the backs of its workers and retirees.
"It is Emmett Boyle that got this company into trouble, and now he
is trying to destroy the union and the lives of the people we
represent in order to save himself," Mr. McCall concluded.
"We simply will not let that happen."
Headquartered in Wheeling, West Virginia, Ormet Corporation --
http://www.ormet.com/-- is a fully integrated aluminum
manufacturer, providing primary metal, extrusion and thixotropic
billet, foil and flat rolled sheet and other products. The Company
and its debtor-affiliates filed for chapter 11 protection on
January 30, 2004 (Bankr. S.D. Ohio Case No. 04-51255). Adam C.
Harris, Esq., at New York, New York, represent the Debtor in its
restructuring efforts. When the Company filed for bankruptcy
protection, it listed $50 million to $100 million in estimated
assets and more than $100 million in total debts.
PACIFIC GAS: Wants CPUC to Approve $80 Million ERCA Settlement
--------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Dinyar B. Mistry, Vice President and Controller of
Pacific Gas and Electric Company, discloses that on August 26,
2004, hearings were held and concluded at the California Public
Utilities Commission in PG&E's Electric Restructuring Costs
Account proceeding. The hearings addressed the proposed
settlement agreement to resolve issues in the proceeding reached
between PG&E and the CPUC's Office of Ratepayer Advocates, Aglet
Consumer Alliance, and The Utility Reform Network. The parties
submitted the proposed settlement agreement to the CPUC for
approval on August 13, 2004.
In April 2004, PG&E filed an updated ERCA application to recover
certain costs related to the implementation of electric industry
restructuring totaling $117,000,000 for the period 1999 through
2002. Because PG&E previously could not determine that the
applicable accounting probability standard was met, PG&E has not
recorded a regulatory asset for the costs included in its ERCA
application.
Under the proposed settlement agreement, Mr. Mistry says, PG&E
would be authorized to collect $80,000,000 in revenue
requirements to recover the costs through rates charged to
certain of its customers beginning January 1, 2005. Beginning
January 1, 2007, PG&E would remove from rate base all remaining
net plant in service associated with its capital plant, projected
to be $30,000,000 at the end of 2006.
If the CPUC approves the proposed settlement, PG&E would record a
$50,000,000 net pre-tax regulatory asset, resulting in a
$30,000,000 increase in after-tax net income.
A final decision is expected before the end of the year.
According to Mr. Mistry, PG&E and its parent, PG&E Corporation,
are unable to predict the ultimate outcome of this proceeding.
Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States. The Company filed for Chapter 11 protection on April 6,
2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes,
Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at
Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the
Debtors in their restructuring efforts. On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts. Pacific Gas and Electric emerged from chapter 11
protection on April 12, 2004, paying all creditors 100 cents-on-
the-dollar plus post-petition interest. (Pacific Gas Bankruptcy
News, Issue No. 83; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
PARMALAT USA: Dean Foods Outbids National Dairy in Auction
----------------------------------------------------------
Dean Foods Company offered to purchase Milk Products' assets for
$21,600,000 and assume certain liabilities. At the Auction,
Parmalat USA Corporation and its U.S. debtor-affiliates declared
Dean Foods' offer the winning bid.
As reported in the Troubled Company Reporter on Sept. 17, 2004,
Milk Products of Alabama LLC, will be sold for US$21.6 million.
Milk Products is 80% owned by Farmland and 20% by a minority
shareholder.
The United States Bankruptcy Court for the Southern District of
New York approved the sale on September 15, 2004, which Farmland
expects to close with the buyer by September 30, 2004.
Dean Foods is a food and beverage companies in the country,
according to information on its Web site http://www.deanfoods.com/
Dean Foods processes and distributes milk and other dairy
products, and the leading manufacturer of soymilk, organic milk
and other organic foods. Dean Foods operates more than 120 plants
in the United States and Spain, and employ approximately 29,000
people.
Dean Foods delivered a $2,160,000 good faith deposit to Milk
Products' financial advisor, Lazard Freres & Co., LLC.
Dean Foods will enter into license agreements with Parmalat SpA:
(i) A limited license to use for certain transitional
purposes the Parmalat Name Rights; and
(ii) A license and agreement regarding the continued use of
processes involved in the operation of certain
machinery used by Milk Products that utilize the DASI
Technology owned by Parmalat SpA or its affiliates.
The Asset Purchase Agreement does not restrict Dean Foods from
competing with Farmland Dairies, LLC.
A full-text copy of the parties' Purchase Agreement is available
for free at:
http://bankrupt.com/misc/Dean_Foods_purchase_agreement.pdf
Effective on the date of the Closing, Milk Products will cease all
operations and will thereafter incur no additional debts,
obligations, or expenses except in order to wind down its business
or as allowed upon further Court order. Judge Drain directs the
U.S. Debtors to segregate a portion of the sale proceeds into an
escrow account pending the confirmation of a plan of
reorganization or liquidation for Milk Products.
Judge Drain emphasizes that nothing in the sale will alter or
prejudice Pension Benefit Guaranty Corporation's rights, claims or
interest with respect to Milk Products. Judge Drain directs Milk
Products to notify PBGC before making payments to invoices in
excess of $50,000. PBGC may object to the payment, and ask the
Court find whether the proposed payment is a proper administrative
expense of Milk Products.
Milk Products is authorized, upon the Closing, to disburse to GE
Capital $10,000,000 pursuant to the Final DIP Order to be applied
to repayment of the DIP Financing Facility. Upon disbursement,
Milk Products will have no further liability to GE Capital or
Citibank on account of, among others, the DIP Loans, the DIP
Liens, the Citibank Adequate Protection Liens, the Adequate
Protection Liens, the Superpriority Claim and the Citibank
Adequate Protection Claim.
Judge Drain authorizes Milk Products to pay the break-up fee and
reimburse the expenses of National Diary Holdings.
Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue. The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents. The Company filed for
chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case
No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq.,
at Weil Gotshal & Manges LLP represent the Debtors in their
restructuring efforts. On June 30, 2003, the Debtors listed
EUR2,001,818,912 in assets and EUR1,061,786,417 in debts.
(Parmalat Bankruptcy News, Issue No. 31; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PEGASUS SATTELITE: Judge Haines Okays Employee Retention Program
----------------------------------------------------------------
To recall, certain issues remain unresolved with respect to
Pegasus Satellite Communications, Inc., and its debtor-affiliates'
request to approve their Employee Retention Program. In this
regard, Judge Haines grants the Debtors' Request subject to these
further modifications:
(a) The employee participants in the Employee Retention Plan
will consist of employees who bear the title of manager,
director, vice president, senior vice president and
certain senior officers with responsibilities relating to
the Debtors' Satellite division. The senior vice
president and senior officers who will be included as
Covered Employees are:
-- Howard E. Verlin,
-- Rory J. Lindgren,
-- Joseph W. Pooler,
-- Scott A. Blank,
-- Karen M. Heisler,
-- Cheryl K. Crate, and
-- John Didio;
(b) As of July 1, 2004, the Covered Employees include:
-- 49 managers,
-- 33 directors
-- nine vice presidents,
-- one senior vice president, and
-- six senior officers.
The Debtors agree that a net increase in the amount of
Covered Employees will be made in consultation with:
* the Official Committee of Unsecured Creditors;
* the Steering Committee for the lenders under the Fourth
Amended and Restated Credit Agreement, dated as of
October 22, 2003; and
* Wilmington Trust Company, as agent on behalf of the
lenders under the Amended and Restated Term Loan
Agreement, dated as of August 1, 2003;
(c) As of July 1, 2004, the Covered Employees include 23
employees of Pegasus Communications Management
Corporation, a non-debtor affiliate. The allocation of
the costs of the Employee Retention Plan with respect to
the PCMC Employees will be made in accordance with the
July 22, 2004, Support Services Order;
(d) The term of the Employee Retention Plan will be from
July 1, 2004, through June 30, 2005, or earlier in the
event of the dismissal of the Debtors' Chapter 11 cases or
consummation of a liquidation or reorganization plan for
the Debtors. The Employee Retention Plan consists of four
components:
* monthly award component,
* retention award component,
* severance component, and
* benefits under the healthcare continuation coverage in
accordance with the requirements of Part 6 of Title I of
ERISA and Section 4980B of the Internal Revenue Code --
COBRA Benefits;
(e) The Monthly Incentive Amount will be equal to the sum of:
(i) 1/12th of the Covered Employees' individual
prepetition annual target amount for fiscal year
2004 under Tier 1 of the Debtors' existing Short
Term Incentive Plan; and
(ii) the amount paid under the Debtors' existing Short
Term Incentive Plan for Tier 2, provided that the
actual amount paid for Tier 2 of the existing Short
Term Incentive Plan will be capped at $350,000 per
month for the Covered Employees;
(f) The Retention Award will be:
Employee Level Retention Award
-------------- ---------------
Manager 6.5 weeks of base salary
Director 13 weeks of base salary
Vice President 26 weeks of base salary
Senior Vice President 39 weeks of base salary
Senior Officers 52 weeks of base salary
(g) The Retention Award for Covered Junior Management will be
paid at the earlier of:
(i) closing of a transaction involving a sale,
acquisition or change in control of the Debtors'
Satellite division or substantially all of the
assets of the Debtors' Satellite division with a
third party;
(ii) an involuntary employment termination other than
for cause; or
(iii) December 31, 2004.
The Retention Award for Covered Senior Management will be
paid at the earlier of:
(i) the Closing Date; or
(ii) an involuntary employment termination other than
for cause.
If a Covered Employee voluntarily terminates his or her
employment prior to the Closing Date, that employee will
forfeit all amounts not yet paid as a Retention Award;
(h) The Severance Amount will supersede any prepetition
severance plans for the Covered Employees and will be paid
upon involuntary termination of a Covered Employee for
reasons other than:
* unsatisfactory performance;
* a transaction involving a sale, acquisition or change in
control of the Debtors' Satellite division or
substantially all of the assets of the Debtors'
Satellite division with a third party in which the Buyer
hires the Covered Employee on terms consistent with the
Covered Employee's current employment; or
* if Pegasus Communication Corporation or any of its
direct or indirect subsidiaries hires the Covered
Employee on terms consistent with the Covered Employee's
current employment;
(i) The Severance Amount for a Covered Employee, up to a
$3,210,274 maximum aggregate amount for all Covered
Employees, will be:
Employee Level Severance Amount
-------------- ----------------
Manager 6.5 weeks of base salary
Director 13 weeks of base salary
Vice President 26 weeks of base salary
Senior Vice President 39 weeks of base salary
Senior Officers 52 weeks of base salary
(j) A claim for the Severance Amount will constitute an
administrative priority expense claim pursuant to Section
503(b) of the Bankruptcy Code. The payment of the
Severance Amount to a Covered Employee is conditioned on
the Covered Employee executing a valid release of claims
arising out of its employment or termination of
employment, in a form satisfactory to the Debtors, the
Committee, the Steering Committee, and the Junior Term
Lenders and reasonable in scope; and
(k) The COBRA Benefits will consist of family coverage for
each of the Covered Employees for these time periods:
Employee Level COBRA Benefits
-------------- --------------
Manager 13 weeks
Director 26 weeks
Vice President 52 weeks
Senior Vice President 78 weeks
Senior Officers 104 weeks
The aggregate amount of premiums paid by the Debtors and
allocated in accordance with the terms of the Support
Services Order should not exceed $575,100.
The reasonable expenses for the administration of COBRA
Benefits, including expenses relating to an outsource
benefits manager and a PCMC benefits administrator, will
be paid by PCMC and allocated in accordance with the terms
of the Support Services Order.
Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite
Communications, Inc. -- http://www.pgtv.com/-- is a leading
independent provider of direct broadcast satellite (DBS)
television. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Me. Case No. 04-20889) on
June 2, 2004. Larry J. Nyhan, Esq., James F. Conlan, Esq., and
Paul S. Caruso, Esq., at Sidley Austin Brown & Wood, LLP, and
Leonard M. Gulino, Esq., and Robert J. Keach, Esq., at Bernstein,
Shur, Sawyer & Nelson, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $1,762,883,000 in assets and
$1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue
No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PLAINS EXPLORATION: Inks New Oil Price Collars for 2005-2008
------------------------------------------------------------
Plains Exploration & Production Company (NYSE: PXP) has entered
into new oil price collars for the period 2005 - 2008 and
eliminated approximately 80% of its 2005 fixed price crude oil
swaps. Specifically, PXP exchanged existing 2005 oil price swaps
with respect to 22,000 barrels of oil per day at an average price
of $24.25 for new oil price collars relating to 22,000 barrels of
oil per day during the period 2005 through 2008 that have a floor
price of $25.00 and an average ceiling price of $34.76. The
Company's only remaining 2005 crude oil swaps involve 13,000
barrels of oil per day in the first quarter and 10,000 barrels of
oil per day in the second quarter, at fixed prices averaging
$25.82 and $25.80, respectively.
"This restructuring of PXP's 2005 swap position will enable us to
participate more fully in the strong current oil price
environment," commented Stephen A. Thorington, PXP's Executive
Vice President and Chief Financial Officer. "By converting fixed
price swaps to collars we retain downside protection while
potentially capturing significantly higher cash flow. In addition,
we now have certainty of an attractive price range for a
meaningful amount of our production for the next several years."
Accounting for the restructured hedge position will include the
following elements:
-- The new collars will not qualify for hedge accounting
because they incorporate a net liability position associated
with the cancelled swaps. As a result, changes to the
market value of the collars will be recorded quarterly on
the income statement as Derivative Fair Value Gains or
Losses. For example, if the forward curve for oil prices is
higher at the end of an accounting period than at the
beginning of the period a Derivative Fair Value Loss will be
recorded. Conversely, if the forward curve for oil prices
declines during the accounting period a Fair Value Gain will
be recorded. As a consequence of this accounting treatment
PXP expects that there may be significant volatility in its
reported earnings.
-- Any cash flow impact associated with the new collars will be
reported as a financing activity in the statement of cash
flows rather than an operating cash flow.
-- Other Comprehensive Income will include approximately
$106 million of pre-tax deferred losses as of September 21,
2004 attributable to the cancelled 2005 swaps. These
deferred losses will remain in OCI until the hedged
production is delivered during 2005, at which time they will
be recognized as a reduction to oil revenues.
-- Hedge accounting will continue to be applied to derivatives
that qualify for hedge accounting.
About the Company
PXP is an independent oil and gas company primarily engaged in the
upstream activities of acquiring, exploiting, developing and
producing oil and gas in its core areas of operation: onshore and
offshore California, West Texas, East Texas and the Gulf Coast
region of the United States. PXP is headquartered in Houston,
Texas.
* * *
As reported in the Troubled Company Reporter's June 21, 2004
edition, Standard & Poor's Ratings Services assigned its 'BB-'
rating to independent oil and gas exploration and production
company Plains Exploration & Production Co.'s (PXP; BB/Stable/--)
proposed $250 million senior unsecured notes due 2014. The notes
are rated one notch below the corporate credit rating reflecting
the existence of secured debt that subordinates unsecured debt
holders. The outlook remains stable.
Pro forma for the new notes offering and recent asset sales,
Texas-based PXP will have about $866 million of debt.
"Standard & Poor's recently raised its corporate credit rating on
PXP to 'BB' from 'BB-', following the announcement that PXP and
Nuevo Energy Co. (NEV; BB/Stable/--) stockholders approved the
stock-for-stock acquisition of NEV," noted Standard & Poor's
credit analyst Steven K. Nocar.
QWEST COMMS: Opens 2 Residential Solutions Centers in New Mexico
----------------------------------------------------------------
Qwest Communications International Inc. (NYSE: Q) reported the
opening of new company retail stores in Las Cruces and Farmington.
The company has opened four new Qwest locations in the state since
May as part of a region-wide retail expansion. Qwest now has 49
retail stores in 11 states.
Qwest is the only communications provider to offer a full-service
retail environment with personal, face-to-face assistance for a
complete spectrum of communications choices. Customers can get
expert advice and purchase wireless, high-speed Internet service,
home-phone packages and long-distance service. Additionally, each
Qwest store has a convenient bill drop, and all Qwest retail
associates can assist with feature changes, answer billing
inquiries, offer technical assistance and make minor repairs on
wireless handsets.
"Qwest Solution Centers have been very well received by
customers," said John Badal, Qwest state president for New Mexico.
"Since our first stores opened in May, customers have repeatedly
commended Qwest for fast and efficient customer service in this
face-to-face setting."
Qwest's new locations are at the Mesilla Mall in Las Cruces, and
at the Animas Valley Mall in Farmington. Existing locations are
Cottonwood Mall and the Coronado Center, both in Albuquerque. The
company continues to offer customers new ways to learn about and
choose Qwest services. In addition to these new Qwest retail
locations, customers can work with Qwest over the phone by calling
800-244-1111, and on the Web at http://www.qwest.com/
About the Company
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.
ROCKFORD CORP: Focuses on Core Business in Strategic Realignment
----------------------------------------------------------------
Rockford Corporation (Nasdaq: ROFO) announced plans for the
strategic realignment of its business. The plans include a re-
focus on its core mobile audio business and the divestiture of
non-core businesses. Rockford will focus its growth efforts on
expanding its distribution channels for mobile audio products both
in the U.S. and internationally. This will include a continued
focus on increasing its OEM business.
Rockford noted that the manufacturing and supply chain issues
experienced with the launch of its new Rockford Fosgate product
during the first half of 2004 are largely over. Rockford is
satisfied with its progress and believes that the changes it has
made to the new product development process will prevent similar
issues in 2005.
Gary Suttle, president and chief executive officer of Rockford
said, "As the mobile audio aftermarket begins to stabilize, and as
we continue to see growth in the OEM space, we believe we are in a
good position to focus our efforts on our core mobile audio
business. This has always been our core competency and our
strategic decision to return to this strategy should enable us to
maximize the profitability of the business."
In support of its realignment efforts, Rockford will begin
divesting itself of non-core businesses and is currently in
negotiations to sell its majority interest in the SimpleDevices
Wi-Fi software business. Rockford plans to continue a relationship
with SimpleDevices and will retain Rockford's Omnifi brand and
product offering.
Mr. Suttle continued, "We continue to believe that Wi-Fi will play
an important role in mobile car audio as well as in our strategy
going forward. However, we think that the capital we would deploy
while this business ramps up is better spent on our core business
and reducing our debt."
Due to continued losses at Rockford's MB Quart GmbH subsidiary in
Germany, Rockford will discontinue the German operations of its
subsidiary MB Quart GmbH. After considering several options,
Rockford has decided to place MB Quart GmbH into receivership
under German law. This action will eliminate approximately $750
thousand in operating loss per quarter and is expected to have a
minimal cash impact. Rockford will continue to own and develop the
MB Quart brand in North America. This will result in a reserve
against its investment in the MB Quart German operations in the
third quarter.
In order to facilitate its strategic realignment, Rockford plans
to take additional non-cash reserves or write-offs during the
third quarter. These are expected to total an estimated $25
million, of which comprises:
-- Approximately $11 million in reserves against Rockford's
investment in and inter-company loan to MB Quart GmbH
-- Approximately $7 million to establish a valuation allowance
against Rockford's U.S. deferred tax assets
-- Approximately $3 million for Omnifi and other inventory
-- Approximately $4 million for goodwill associated with
Rockford's acquisition of the Q-Logic brand and business
Rockford noted that its shareholder's equity remains substantially
positive after these adjustments.
Rockford did not meet the requirement of the EBITDA covenant of
its asset based credit facility with Congress Financial as of the
end of August 2004. This constitutes a default under the current
terms of the agreement. In addition, the placement of MB Quart
GmbH into receivership will result in a default under the Congress
facility. Rockford has met with Congress to discuss these matters
and is working closely with Congress to secure a waiver and amend
the terms of the covenants. Rockford believes its relationship
with Congress remains strong.
Mr. Suttle concluded, "We have made some tough decisions to return
Rockford to profitability. We are excited about our core mobile
audio products and the strong reception they continue to get in
the market. We are looking forward to growth across all mobile
audio distribution channels including substantial opportunities in
the OEM market."
About Rockford Corporation
Rockford is a designer, manufacturer and distributor of high-
performance audio systems for the mobile, professional, and home
theater audio markets. Rockford's mobile audio products are
marketed under the Rockford Fosgate, Lightning Audio, MB Quart, Q-
Logic, InstallEdge.com, Omnifi and SimpleDevices brand names.
Rockford's professional audio and home theatre products are
marketed under the Hafler, Fosgate Audionics, MB Quart, NHT and
Omnifi brand names.
* * *
As reported in the Troubled Company Reporter on June 16, Rockford
Corporation has entered into agreements for the private placement
of $12.5 million of the Company's 4.5% convertible senior
subordinated secured notes due 2009 and warrants to purchase
649,810 shares of common stock at $5.75 per share. The private
placement closed on June 11, 2004.
The Company intends to use the net proceeds from the sale to pay
off its $4 million junior term loan with Hilco Capital LP and to
pay down its revolving $45 million asset based credit facility
with Congress Financial Corporation, as agent. This resolves the
default under the Hilco facility previously reported by the
Company.
SCOTT ACQUISITION: U.S. Trustee Meets Creditors on Oct. 18
----------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of Scott
Acquisition Corp.'s creditors at 10:00 a.m. on October 18, 2004,
at Room 2112, 844 North King Street, Wilmington, Delaware. This is
the first meeting of creditors required under 11 U.S.C. Sec 341(a)
in all bankruptcy cases.
All creditors are invited, but not required to attend. This
Meeting of Creditors offers the opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Winter Haven, Florida, Scott Acquisition Corp.,
is a retailer of a wide range of building materials and home
improvement products serving the "do-it-yourself" market for
individual homeowners, as well as the professional builder and
commercial markets. The Debtors filed for protection on
September 10, 2004 (Bankr. D. Del. Case No. 04-12594). Brendan
Linehan Shannon, Esq., at Young, Conaway, Stargatt & Taylor
represent the Debtors in their restructuring efforts. When the
Company and its debtor-affiliates filed for protection from its
creditors, it reported $45,681,000 in assets and $30,068,000 in
debts.
SEMINOLE TRIBE: S&P Assigns BB Issuer Credit Rating
---------------------------------------------------
Standard & Poor Ratings Services assigned its 'BB' issuer credit
rating to the Seminole Tribe of Florida.
Additionally, Standard & Poor's assigned a 'BB' rating to the
Seminoles Tribe's proposed $120 million term loan due 2011. The
credit facility is expected to be secured primarily by a pledge of
revenues of three (Coconut Creek, Immokalee, Brighton) of its six
gaming operations, and it is expected that the majority of the
proceeds from the proposed bank facility will be used to fund
legal settlement costs to a prior developer at the Coconut Creek
facility, with the remainder used towards additional capital
improvements at the Coconut Creek facility and to pay tribal
business and transaction-related expenses.
These ratings are subject to review of final documentation and
legal opinions. The outlook is stable.
The ratings on the Seminole Tribe reflect past weaknesses in
tribal governance and the evolution of various policies and
procedures aimed at improving internal controls. These factors
are partly mitigated by the favorable competitive position of the
gaming operations, which has led to steady performance and a solid
financial profile. In addition, ratings recognize the meaningful
steps that have been implemented to improve internal controls
(associated with both tribal and gaming operations) beginning in
fiscal 2003.
In assessing the ratings on the Seminole Tribe, Standard & Poor's
employed a consolidated approach that considers the economic
relationships between the gaming operations and other Tribal
enterprises.
"An essential element to our rating conclusion is the many actions
that have been taken by the Seminole Tribe in an effort to resolve
its prior issues," said Standard & Poor's credit analyst Peggy
Hwan. These include:
-- The removal of the ex-Chairman;
-- The dismissal of the sexual harassment lawsuit against the
ex-Chairman;
-- The settlement of lawsuits against investment firms
involving the improper authorization of accounts;
-- The hiring of a professional management team;
-- A revision of the discretionary spending plan (regulated in
accordance with the NIGC and the Indian Gaming Regulatory
Act); and
-- The hiring of outside consultants to review and implement
policies and procedures.
SENECA GAMING: Extends 7-1/4% Sr. Debt Offer to Oct. 13
-------------------------------------------------------
Seneca Gaming Corporation has extended the expiration date of its
offer to exchange all outstanding 7-1/4% Senior Notes due 2012 for
7-1/4% Senior Notes due 2012 which have been registered under the
Securities Act of 1933, as amended. As a result of the extension,
the Exchange Offer is now scheduled to expire at 5:00 p.m. New
York City time, Wednesday, October 13, 2004, unless further
extended.
The Exchange Offer was originally set to expire at 5:00 p.m. New
York City time, on Tuesday, September 28, 2004. As of 5:00 p.m.
New York City time, on Monday, September 20, 2004, $6,560,000
aggregate principal amount of the Old Notes had been tendered for
exchange.
Except for the extension of the expiration date, all of the other
terms of the Exchange Offer remain as set forth in the exchange
offer prospectus. This press release is not an offer to exchange
New Notes for Old Notes or the solicitation of an offer to
exchange, which we are making only through a prospectus. Copies of
the prospectus and transmittal materials governing the Exchange
Offer may be obtained from the Exchange Agent, Wells Fargo Bank,
N.A., at the following address and telephone number:
Wells Fargo Bank, N.A.
608 Second Avenue South
Corporate Trust Operations, 12th Floor
Minneapolis, MN 55402
(800) 344-5128
Seneca Gaming Corporation owns and operates the Seneca Niagara
Casino in Niagara Falls.
* * *
As reported in the Troubled Company Reporter's April 23, 2004,
edition, Standard & Poor's Ratings Services assigned its 'BB-'
rating to the Seneca Gaming Corporation's proposed
$225 million senior unsecured notes due 2012. Proceeds from the
proposed note issue, along with expected cash from operations and
existing cash balances, will be used to help fund SGC's planned
expansion project, make a $25 million distribution to the Seneca
Nation of Indians, and for fees and expenses.
In addition, a 'BB-' corporate credit rating was assigned to the
Niagara Falls, New York-based company. The outlook is stable.
Pro forma for the new notes, total debt outstanding at
March 31, 2004, was approximately $320 million.
SGC was created by the Nation to manage and operate three Class
III gaming facilities in western New York. The Nation consists of
approximately 7,300 members and is one of several federally
recognized Native American tribes in New York. The Nation entered
into its compact with the State of New York in 2002, which was
subsequently approved by the Bureau of Indian Affairs. The compact
expires in 2016 with a renewal option to 2023, and requires a
payment based on a percentage of slot win to the state.
"The ratings reflect SGC's current reliance on the Seneca Niagara
Casino, construction risks associated with the planned expansion
project, challenges in managing a larger gaming operation, and an
evolving competitive landscape, which includes the June 2004
opening of a large-scale casino within a few miles of the Seneca
Niagara Casino on the Canadian side of Niagara Falls and the
addition of video lottery terminals at nearby racetracks," said
Standard & Poor's credit analyst Peggy Hwan. "These factors are
mitigated by favorable demographics in its surrounding market,
strong operating performance of SNC since opening, and good
financial profile for the rating."
SK GLOBAL: Bureau of Customs Holds $1,819,485 Claim
---------------------------------------------------
On May 27, 2004, SK Global America, Inc., secured a $1.3 million
customs bond -- Bond number 460453626 -- which the Debtor will
terminate effective on or before May 26, 2005, so that it does not
automatically renew for another annual period.
The Bureau of Customs and Border Protection, formerly known as the
United States Customs Service, timely and properly filed
Claim No. 55 on November 21, 2003, asserting:
* a fixed, aggregate claim against the Debtor's estate for
$1,619,485, consisting of:
-- a $491,812 unsecured priority claim; and
-- a $1,127,673 unsecured non-priority claim; and
* a contingent and unliquidated claim against the Debtor's
estate in an undetermined amount.
The Bureau of Customs cannot at this time estimate or liquidate
the contingent and unliquidated portion of Claim No. 55. The
Debtor and the Bureau of Customs, through their counsel, have
agreed that the Debtor will establish a $1.3 million reserve on
account of goods imported into the United States after
May 27, 2004.
The Bureau of Customs has acknowledged that it currently owes the
Debtor a $26,275 refund on account of:
$520 -- related to its February 27, 2004 liquidation of entry
number 221-08842505 that was made on October 12, 2001,
through the Port of Savannah, Georgia;
$4,174 -- related to its May 14, 2004 liquidation of entry
number N09-00537122 that was made on October 15, 1993,
through the Port of Los Angeles, California;
$5,459 -- related to its May 14, 2004 liquidation of entry
number N09-00540662, which was made on November 23,
1993, through the Port of Los Angeles, California;
$6,784 -- related to its May 14, 2004 liquidation of entry
number N09-00541058 which was made on December 9,
1993, through the Port of Los Angeles, California;
$6,831 -- related to its May 14, 2004 liquidation of entry
number N09-00543419 which was made on January 4, 1994,
through the Port of Los Angeles, California; and
$2,506 -- related to its May 28, 2004 liquidation of entry
number N09-00549044, which was made on March 2, 1994
through the Port of Los Angeles, California.
After arm's-length negotiations and an exchange of documents, the
parties agreed to resolve Claim No. 55 and related matters
pursuant to a stipulation, which the Court approved. The Debtor
and the Bureau of Customs stipulate that:
(1) Claim No. 55 is fixed and allowed against the Debtor for
$1,819,485, of which:
-- $691,812 will be allowed and entitled to treatment as
a Priority Tax Claim against the Debtor, provided
that the Debtor will be entitled to, and is granted,
a $26,275 offset and credit against the Allowed
Priority Tax Claim based on the Current Refund due to
it by the Bureau of Customs; and
-- $1,127,673 will be allowed and entitled to treatment
as a General Unsecured Claim.
(2) The Debtor will establish a $1.3 million reserve on
account of goods imported into the United States after
May 27, 2004, and will take timely action to terminate
Bond No. 460453626 effective on or before May 26, 2005, so
that the bond is not effective for a second annual period
or more.
(3) The Allowed Customs Claim will be in full and complete
satisfaction of any and all claims the Bureau of Customs
may possess, against the Debtor, or on account of, any and
all goods and property imported into the United States by
the Debtor before May 27, 2004.
(4) Nothing will release, waive or discharge any obligations
the Debtor may owe to the Bureau of Customs for, or on
account of, any and all goods and property imported into
the United States by the Debtor on and after May 27, 2004.
The Bureau of Customs will retain its right to offset any
refunds owed to the Debtor against any obligations that
may be owed by the Debtor to the Bureau of Customs based
on its importation of goods and property into the United
States on or after May 27, 2004.
Headquartered in Fort Lee, New Jersey, SK Global America, Inc., is
a subsidiary of SK Global Co., Ltd., one of the world's leading
trading companies. The Debtors file for chapter 11 protection on
July 21, 2003 (Bankr. S.D.N.Y. Case No. 03-14625). Albert Togut,
Esq., and Scott E. Ratner, Esq., at Togut, Segal & Segal, LLP,
represent the Debtors in their restructuring efforts. When they
filed for bankruptcy, the Debtors reported $3,268,611,000 in
assets and $3,167,800,000 of liabilities.
The Court confirmed the Chapter 11 Plan of Liquidation on
September 15, 2004. (SK Global Bankruptcy News, Issue No. 23;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SOLUTIA INC: Asks Court to Fix November 29 as Claims Bar Date
-------------------------------------------------------------
Solutia, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to fix Nov. 29, 2004,
at 5:00 p.m., as the last day and time for creditors to file
proofs of claim against them. The Debtors also ask the Court to
approve the form and manner of notice of the Claims Bar Date.
M. Natasha Labovitz, Esq., at Gibson, Dunn & Crutcher, LLP, in New
York, relates that on March 2, 2004, the Debtors filed their
Schedules of Assets and Liabilities and Statements of Financial
Affairs and are in the process of finalizing amendments. The
Debtors expect to file the amendments with the Clerk of the
Bankruptcy Court before September 28, 2004.
The Debtors developed a business plan and are currently working
toward formulating their Chapter 11 reorganization plan. To
continue their progress in the plan process and to prepare a
disclosure statement containing adequate information, Ms. Labovitz
explains that the Debtors must ascertain the nature, extent and
scope of the claims asserted against each of them.
To set a uniform procedure for submission and processing of
claims, the Debtors propose that each person or entity that
asserts a prepetition claim against them be required to file an
original, written proof of that claim. The Debtors further
propose that all proofs of claim should be received on or before
the Bar Date by The Trumbull Group, LLC, the claims and noticing
agent employed in the Debtors' Chapter 11 cases.
All proofs of claim should be delivered to Trumbull by first-
class mail, overnight delivery or hand delivery at these
addresses:
Mailing Overnight Delivery/Hand Delivery
------- --------------------------------
Solutia, Inc. Solutia, Inc.
c/o Trumbull Group, LLC c/o Trumbull Group, LLC
PO Box 5019 Southern District of New York
Bowling Green Station One Bowling Green, Room 534
New York, NY 10274-5019 New York, NY 10004-1408
Only original proofs of claim will be deemed acceptable for
purposes of claims administration. Trumbull will not accept
proofs of claim sent by facsimile or telecopy. Proofs of claim
will be deemed timely filed only if the original is actually
received by Trumbull on or before the Bar Date.
Exclusions
Persons or entities holding claims or interests in these
categories will be excluded from having to file proofs of claim or
interest by the Bar Date:
(a) claims that were listed in the Schedules, but only if the
Schedules did not list those claims as "contingent,"
"unliquidated" or "disputed" and the holder of the claim
does not dispute the Schedules' description of the amount
or classification of the claim or the Debtor that is
identified as owing the claim;
(b) claims for which a proof of claim already has been filed
with the Clerk of the United States Bankruptcy Court for
the Southern District of New York in a form substantially
similar to Official Bankruptcy Form No. 10, against the
correct Debtor;
(c) claims paid in full by any of the Debtors during these
Chapter 11 cases as authorized by a Court order;
(d) claims of current employees of any of the Debtors, to the
extent that the Debtors were authorized by the Court to
honor those claims in the ordinary course of their
business like for wages and benefits. The current
employees must file proofs of claim by the Bar Date for
all other prepetition claims against the Debtors including
claims for wrongful termination, discrimination and claims
covered by the Debtors' workers' compensation insurance;
(e) claims of retired employees of Pharmacia Corporation or
any of the Debtors for retirement benefits;
(f) claims related to or under the Solutia, Inc., Employees'
Pension Plan;
(g) claims allowable under Sections 503(b) and 507(a)(1) of
the Bankruptcy Code as expenses of administration,
including claims for goods and services provided to, and
accepted by, the Debtors after the Petition Date;
(h) claims which are based exclusively on principal, interest
and other applicable fees and charges on or under the:
-- 6.72% Debentures under an Indenture, dated October 1,
1997;
-- 11.25% Senior Secured Debentures under an Indenture,
dated July 9, 2002;
-- 7.375% Debentures under an Indenture, dated October 1,
1997; and
-- Bank Credit Agreement, dated October 8, 2003;
These claims are excluded provided that:
(1) the exclusion will not apply to the indenture trustee
or designated agent under any of the Debt Instruments
or related documents;
(2) any indenture trustee or designated agent under any of
the Debt Instruments or related documents will be
required to file a proof of claim on account of claims
for the repayment by the Debtors of principal,
interest and other applicable fees and charges on or
under the Debt Instruments;
(3) any person or entity that wishes to assert a claim
arising out of or relating to a Debt Instrument, other
than a claim for the repayment by the Debtors of
principal, interest and other applicable fees and
charges on or under the Debt Instrument, will be
required to file a proof of claim, unless another
exception applies; and
(4) any indenture trustee or designated agent under any of
the Debt Instruments or related documents will only be
required to file proofs of claim asserting claims for
the repayment of principal, interest and other
applicable fees and charges on or under the applicable
Debt Instruments or against the Chapter 11 estates of
the Debtor(s) that is (are) the primary obligor(s) on
the underlying debt, and if the proof of claim
identifies the Debtors, together with their Chapter 11
case numbers, that are guarantors or otherwise
secondary obligors under the applicable Debt
Instruments, that proof of claim will be deemed to
have been filed against the Chapter 11 estate of each
guarantor or secondary obligor;
(i) claims of one Debtor against any of the other Debtors;
(j) claims of any direct or indirect non-debtor subsidiary of
Solutia against any of the Debtors; and
(k) equity interests, which are based exclusively on the
ownership of common or preferred stock in a corporation, a
general or limited partner interest in a limited
partnership, a membership interest in a limited liability
company or warrants or rights to sell or subscribe to the
security or interest.
Procedures for Providing Notice of the Bar Date
The Debtors propose to mail written notice of the Bar Date, a
proof of claim form and an instruction sheet for preparing and
filing the form to:
(a) the United States Trustee for the Southern District of New
York;
(b) counsel to the Official Committee of Unsecured Creditors;
(c) counsel to the Official Committee of Retirees;
(d) counsel to the Official Committee of Equity Security
Holders;
(e) counsel to the agents for the Debtors' postpetition
secured bank lenders;
(f) the indenture trustee or fiscal agent for each of the
public debt securities issued or guaranteed by the
Debtors;
(g) the labor organizations that are party to collective
bargaining agreements with the Debtors;
(h) counsel to any ad hoc committee for the public debt
securities issued or guaranteed by the Debtors;
(i) Pharmacia Corporation;
(j) Monsanto Company;
(k) the Securities and Exchange Commission;
(l) the Internal Revenue Service;
(m) those parties who have formally appeared and requested
service in these cases pursuant to Rule 2002 of the
Federal Rules of Bankruptcy Procedure;
(n) all persons or entities that have filed proofs of claim
against the Debtors;
(o) all persons or entities listed in the Debtors' Schedules
as a holder of a claim against any Debtor or as a party to
an executory contract with any Debtor, using the last
known address; and
(p) all other known holders of claims, using the last known
address.
Given the nationwide scope of their businesses, the Debtors plan
to give notice of the Bar Date by publication, as provided in
Bankruptcy Rule 2002(l), to creditors to whom notice by mail is
impracticable. This includes creditors who are unknown or not
reasonably ascertainable by the Debtors and creditors whose
identities are known but whose addresses are unknown by the
Debtors. The Debtors will publish the General Bar Date Notice
both nationally and locally in the newspapers and periodicals.
In addition, to ensure that unknown creditors who may have
environmental or asbestos claims related to the Plant and Disposal
Sites receive sufficient notice of the Bar Date, the Debtors
intend to supplement the general publication notice with site-
specific Bar Date notices that, like the Site-Specific Mailing
Notices, focus special attention on potential environmental and
asbestos claims related to the Plant and Disposal Sites. The
Debtors will publish site-specific Bar Date notices in newspapers
and periodicals within the towns and cities where the Plant and
Disposal Sites are located.
Consequences of Failure to File a Proof of Claim
Pursuant to Bankruptcy Rule 3003(c)(2), the Debtors propose that
any claimholder against the Debtors who fails to file a Proof of
Claim before the Bar Date will be forever barred, estopped and
enjoined from asserting the claim against the Debtors. The
Debtors will be forever discharged from any and all indebtedness
or liability with respect to the claim, and the holder will not be
permitted to vote to accept or reject any reorganization plan or
participate in any distribution in the Debtors' Chapter 11 case on
account of the claim or to receive further notices regarding the
claim.
Monsanto Claims
All proofs of claim of Monsanto Company and Pharmacia must be
filed on or before the Bar Date in accordance with the proposed
procedures. However, due to the complexity of the Debtors'
relationships with Monsanto, the Debtors further propose that
Monsanto be permitted to amend its Initial Proofs of Claim after
the Bar Date to reflect additional claims that:
(a) Monsanto discovers after the Bar Date as a result of the
review of proofs of claim filed against the Debtors by
other parties; and
(b) are based on the claims or legal theories set forth in
Monsanto's Initial Proofs of Claim.
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. 23;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SYNIVERSE TECH: Moody's Places Ba3 Rating on $244.2M Term Loan
--------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to the new
$244.2 million term loan B available to Syniverse Technologies,
Inc. Moody's also affirmed the company's B1 senior implied rating
and the B3 rating on the company's $245 million 12.75% senior
subordinated notes due 2009, among other rating actions outlined
below. The rating outlook is stable revised from negative.
The affected ratings are:
* Senior implied rating - B1 (affirmed)
* Issuer rating - B2 (affirmed)
* New $244.2 million secured term loan B -- Ba3 (assigned)
* $35 million secured revolving credit facility -- Ba3
(affirmed)
* $245 12.75% million senior subordinated notes due 2009 -- B3
(affirmed)
* Existing secured term loan rating withdrawn
Proceeds from the new term loan, along with cash on hand, will be
used to retire the existing term loan and to acquire the North
American Interoperator Services (IOS) business of EDS for $57
million.
The B1 senior implied rating reflects the company's high leverage
and competitive operating environment, but is supported by the
company's solid market position as a provider of transaction
processing and interoperability services to wireless carriers, and
good free cash flow generating capacity. The Ba3 rating on the
senior secured bank debt reflects the strong position these
lenders enjoy, notwithstanding the large percentage of the total
debt (roughly 50%) these obligations will represent at closing of
the IOS acquisition. Due to the good free cash flow generation of
the company, and the requirement to prepay bank debt with 75% of
excess cash flow, Moody's expects Syniverse to continue its stated
objectives to reduce debt. The B3 rating on the 12.75% notes due
2009 reflects their contractual subordination behind the claims of
the secured lenders and other liabilities of the company's
subsidiaries.
Since the LBO of Syniverse (formerly TSI) from Verizon in February
2002, the company suffered from revenue declines as contracts re-
priced lower and margins contracted. Despite 2003 revenues
declining 18% from 2001 (pre-LBO) levels, Syniverse has repaid
$102.6 million of bank debt. Importantly, over the last five
quarters, revenues have grown substantially with 2Q04 net revenues
(excluding off-network database query fees) up 30% over 2Q03, and
margins have expanded which should bring 2004 EBITDA back to its
pre-LBO level.
The acquisition of the North American IOS business of EDS will
modestly releverage Syniverse, with the incurrence of an
incremental $48 million of debt, Syniverse's total debt of
$489.2 million will still be below its LBO peak debt level of
$543.8 million. Moody's notes the success of the acquisition
rests upon Syniverse's ability to obtain meaningful cost savings
with minimal integration risk since IOS performs substantially the
same services as Syniverse.
Over 50% of IOS's revenues come from AT&T Wireless who is merging
with Cingular in a transaction expected to close later this year.
Cingular's clearing business is done by a third party, and Moody's
expects Cingular will re-bid all or portions of its clearing
business as its various contracts expire. The rating assumes the
risk of the AT&T Wireless revenue loss as a result of the Cingular
acquisition.
The stable outlook reflects Moody's opinion that the ratings are
unlikely to change of the medium term as the company is expected
to continue to generate free cash flow and maintain a good level
of covenant cushion. The loss of revenue growth or further large
debt-financed acquisitions could negatively affect the rating.
Positively, the ratings could be affected by continued strong
revenue growth and margin expansion combined with material
reductions in debt.
Based in Tampa, Florida Syniverse Technologies is a provider of
technology outsourcing to wireless telecommunications carriers
with LTM ended June 30, 2004, net revenues of $272.1 million.
THE HOMESTEADS: U.S. Trustee Meets Creditors on Oct. 18
-------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of The
Homesteads at Newtown LLC's creditors at 1:00 p.m. on Oct. 18,
2004, at 265 Church Street, Suite 1104, New Haven, Connecticut.
This is the first meeting of creditors required under 11 U.S.C.
Sec. 341(a) in bankruptcy cases.
All creditors are invited, but not required to attend. This
Meeting of Creditors offers the opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Guilford, Conneticut, The Homesteads at Newtown,
LLC, -- http://www.homesteadsct.com/-- is a life-care community.
The Company filed for protection on September 10, 2004 (Bankr. D.
Conn. Case No. 04-34262). Mark R. Jacobs, Esq., at Jacobs Partners
LLC, represent the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated more
than $10 million in assets and debts.
TOUCH AMERICA: Confirmation Hearing Scheduled for Sept. 30
----------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
approved the Amended Disclosure Statement explaining Touch America
Holdings, Inc., and its debtor-affiliates' Amended Liquidating
Chapter 11 Plan.
The Honorable Kevin J. Carey will convene a Plan Confirmation
Hearing on September 30, 2004, at 10:00 a.m. at the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania.
As previously reported, on December 23, 2003, Touch America sold
substantially all of its Internet services, private line, and dark
fiber assets to 360networks, a Vancouver, Canada based corporation
for $28,000,000. On December 23, 2003, Touch America also sold
certain dark fiber assets to Qwest Communications, Inc. for
$8,000,000. With the exception of certain wireless services, Touch
America ceased operations as of February 29, 2004.
Shareholder Wipe-Out
On February 25, 2004, an order was entered by the Bankruptcy
Court denying a motion of certain shareholders directing the
United States Trustee to appoint an Official Committee of Equity
Security Holders. It is contemplated that funds will be available
for distribution to unsecured creditors, however the estimated
amount to be distributed and percentage of recovery to unsecured
creditors has not yet been determined. Touch America estimates
that the claims of creditors and costs of administration of its
bankruptcy will exceed the total amount of funds available to
Touch America's bankruptcy estate.
Headquartered in Butte, Montana, Touch America Holdings, Inc.,
through its principal operating subsidiary, Touch America, Inc.,
develops, owns, and operates data transport and Internet services
to commercial customers. The Company filed for chapter 11
protection on June 19, 2003 (Bankr. D. Del. Case No. 03-11915).
Maureen D. Luke, Esq. and Robert S. Brady, Esq. at Young Conaway
Stargatt & Taylor, LLP represent the Debtor. When the Company
filed for bankruptcy protection, it listed $631,408,000 in total
assets and $554,200,000 in total debts.
UAL CORP: Trustee & Machinists Object to Fiduciary Appointment
--------------------------------------------------------------
As reported in the Troubled Company Reporter on Sept. 16, UAL
Corp. and its debtor-affiliates asked the Bankruptcy Court to
approve the appointment of Independent Fiduciary Services,
Inc., as Pension Plan fiduciary under a Fiduciary Services
Agreement entered by the Debtors and IFS on Sept. 3, 2004,
outlining these powers and duties:
(1) IFS, with the concurrence of Labor Department, is
appointed independent fiduciary of the Plans;
(2) IFS will review the Plans' funding policies and make
recommendations to the Board;
(3) IFS will investigate and analyze and pursue or assert any
claims, obligations, debts or liabilities owing to the
Plans connected with the funding or contribution
provisions of the Plans;
(4) IFS will take appropriate action including initiation of
litigation for breaches of fiduciary duty;
(5) The Debtors will pay IFS $175,000 for its services for the
first three months and $50,000 for each month thereafter;
(6) IFS will be entitled to reimbursement for reasonable
out-of-pocket costs;
(7) IFS will maintain a $10,000,000 fiduciary liability
insurance;
(8) The Debtors will indemnify, defend, reimburse and hold IFS
harmless against any losses or other claims for services
performed, other than losses arising from gross
negligence, willful or intentional misconduct or criminal
conduct; and
(9) The Agreement may be terminated with 60 days' notice.
Objections
(1) The U.S. Trustee
Ira Bodenstein, the United States Trustee for Region 11, does not
object to the appointment of an independent fiduciary and does
not question the Debtors' business judgment that Independent
Fiduciary Services is qualified to act in that capacity.
However, the U.S. Trustee does not want the Bankruptcy Court to
enter "a comfort order." Mr. Bodenstein says that the
appointment of an independent fiduciary is within the ordinary
course of business, so no order is necessary or appropriate. The
U.S. Trustee asks the Court to deny the Debtors' request as
unnecessary.
(2) The International Association of Machinists
The International Association of Machinists does no object to the
appointment of an independent fiduciary. However, the IAM
objects to the proposed agreement between the Debtors and IFS.
This Agreement, when placed alongside the Department of Labor
Agreement, inconsistently restricts IFS' duties and obligations
to the potential detriment of the IAM member plan beneficiaries.
Sharon L. Levine, Esq., at Lowenstein Sandler in Roseland, New
Jersey, notes that the Fiduciary Services Agreement defines IFS'
duties and obligations, but does not track the scope language in
the DOL Agreement. For example, paragraph 1(e) of the FSA,
restricts IFS from pursuing breaches of the Employment Retirement
Income Security Act which occurred after the Commencement Date.
Conversely, paragraph 4(c) of the DOL Agreement fully empowers
IFS to pursue potential breaches of fiduciary duty without the
limitation of the Commencement Date. Therefore, the FSA limits
the scope of IFS' obligation to pursue breaches of fiduciary duty
consistent with the DOL Agreement.
Paragraph 1 of the FSA authorizes IFS to act on behalf of the
Pension Plans to investigate any improprieties by the employer
connected with the Plans. However, paragraph 4(b) of the DOL
Agreement provides that IFS may pursue similar instances but
without restriction to "employer." Consequently, the FSA appears
to restrict the responsibilities of IFS more narrowly than the
scope of the DOL Agreement.
The IAM objects to the FSA and related documents to the extent
there are inconsistencies, restrictions or duties or obligations
not reflected in the DOL Agreement. The IAM suggests that the
DOL Agreement be incorporated in the FSA, with the DOL Agreement
controlling where there are inconsistencies.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $24,190,000,000 in
assets and $22,787,000,000 in debts. (United Airlines Bankruptcy
News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
US AIRWAYS: Court OKs Payment of Prepetition Employee Obligations
-----------------------------------------------------------------
US Airways, Inc., and its debtor-affiliates ask Judge Mitchell of
the U.S. Bankruptcy Court for the Eastern District of Virginia for
permission to:
(a) pay and honor prepetition wages, salaries, and commissions,
and prepetition obligations arising under various employee
benefit programs, owing to current and former employees,
independent contractors, including temporary agencies
currently under formal or informal contract, and the
Debtors' retirees;
(b) continue various Employee Benefit Programs in the ordinary
course of business; and
(c) pay prepetition payroll related taxes including all
federal, state and local withholding taxes, Social Security
taxes, Medicare taxes and other withholdings like union
dues, charitable contributions, and garnishment
contributions.
The Debtors also ask the Court to direct all banks to honor their
prepetition checks for Prepetition Wages and Benefits. The
Debtors want the banks barred from placing holds or attempting to
reverse any automatic transfers to Employees' accounts for
Prepetition Wages and Benefits.
According to Brian P. Leitch, Esq., at Arnold & Porter, in Denver,
Colorado, the Debtors employ approximately 34,000 active
employees, with more than 89% at full-time status, while the
remainder are part-time. In addition, the Debtors utilize a
variety of independent contractors whom are paid as vendors
through the accounts payable system. Approximately 92% of all
employees are hourly wage earners, while the remaining 8% are
salaried personnel. Approximately 28,000 of the Debtors'
employees are covered by collective bargaining agreements.
The Debtors' ability to preserve their businesses and to
reorganize is dependent upon the continued service, satisfaction,
and loyalty of their employees. The Debtors and their creditors
will be adversely affected if the Debtors are unable to retain
their employees. To retain employees and maintain morale, the
Debtors must satisfy all Prepetition wages and benefits. Mr.
Leitch assures the Court that the amounts the Debtors will have to
pay are reasonable compared with the importance and necessity of
the employees and the losses the Debtors will likely suffer if the
employees are left unpaid.
The payment of prepetition employee obligations will also reduce
administrative burden. The Debtors will be saved from identifying
the extent to which individual employees hold priority or general
unsecured claims for employee benefits, and from modifying benefit
policies to enforce these distinctions.
Mr. Leitch clarifies that the Debtors' request is not a means to
resolve or address labor relations, benefit or other matters
governed by Sections 1113 and 1114 of the Bankruptcy Code. One of
the most significant causes of these bankruptcy filings is the
Debtors' uncompetitive labor costs. Comprehensive reductions in
those costs during these cases are necessary for the Debtors to
emerge as viable businesses. Therefore, the Debtors will control
and reduce the costs of current labor, legacy costs, and related
obligations under the parameters set forth in Sections 1113 and
1114. However, if the Debtors were to ignore the prepetition
wages or abruptly cease the Employee Benefit Programs, it would
have devastating and immediate effects on employee morale. The
payment of the Debtors' prepetition employee obligations will
facilitate the operation of the Debtors' businesses in a normal
course until changes can be implemented with the unions and other
bargaining units.
Judge Mitchell finds merit in the Debtors' request and grants the
Motion. He rules that no employee obligation should be granted
administrative status.
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of US Airways, Inc.,
Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines,
Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales,
Inc., Material Services Company, Inc. and Airways Assurance
Limited, LLC. Under a chapter 11 plan declared effective on March
31, 2003, USAir emerged from bankruptcy with the Retirement
Systems of Alabama taking a 40% equity stake in the deleveraged
carrier in exchange for $240 million infusion of new capital. US
Airways and its subsidiaries filed another chapter 11 petition on
September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq. and Douglas
M. Foley, Esq. at McGuireWoods LLP represent the Debtors in its
restructuring efforts. In the Company's second bankruptcy filing,
it lists $8,805,972,000 in total assets and $8,702,437,000 in
total debts. (US Airways Bankruptcy News, Issue No. 64; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
US AIRWAYS: Transformation Plan Negotiations with Pilots Continue
-----------------------------------------------------------------
The US Airways pilots' governing body, the Master Executive
Council, a unit of the Air Line Pilots Association, has authorized
its Negotiating Committee to continue talks on Transformation Plan
Negotiations with US Airways management. The following resolution
authorized negotiations to continue:
"WHEREAS the Negotiating Committee has engaged in
negotiations with the Company for several months, and
"WHEREAS the environment has changed since the Company
entered Chapter 11,
"THEREFORE BE IT RESOLVED that the MEC directs the
Negotiating Committee to continue in negotiations with the
Company in order to reach a Tentative Agreement, and
"THEREFORE BE IT FINALLY RESOLVED that the Negotiating
Committee will bring that Tentative Agreement back to the
MEC for its consideration and review."
"This resolution, passed unanimously by our governing body, allows
our pilot negotiators to proceed unrestricted and provides them
with a renewed momentum to reach a Tentative Agreement. Even
though an 1113 motion may be filed by the Company during these
discussions, our negotiators are prepared to continue talks
promptly with the Company to bring closure to a process we
initiated in February of this year. We expect a fair resolution to
the unfortunate circumstances we face," said Captain Jack Stephan,
spokesman for the US Airways ALPA pilots.
"Both ALPA and the Company are in full agreement on the necessity
of returning this airline to profitability. And we are prepared to
work day and night to see that happen," added Captain Stephan.
The MEC will review and consider any tentative agreement that is
reached after negotiations resume, but that agreement will then
have to be sent to the US Airways pilots for ratification before
it becomes effective. Times and locations of the continued talks
between ALPA and the Company are still being worked out.
ALPA is the world's oldest and largest pilot union, representing
64,000 airline pilots at 42 airlines in the U.S. and Canada.
ALPA's website is http://www.alpa.org/
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of US Airways, Inc.,
Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines,
Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales,
Inc., Material Services Company, Inc. and Airways Assurance
Limited, LLC. Under a chapter 11 plan declared effective on
March 31, 2003, USAir emerged from bankruptcy with the Retirement
Systems of Alabama taking a 40% equity stake in the deleveraged
carrier in exchange for $240 million infusion of new capital. US
Airways and its subsidiaries filed another chapter 11 petition on
September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq. and Douglas
M. Foley, Esq. at McGuireWoods LLP represent the Debtors in its
restructuring efforts. In the Company's second bankruptcy filing,
it lists $8,805,972,000 in total assets and $8,702,437,000 in
total debts.
US AIRWAYS: Gets Court Okay to Pay Outside Maintenance Providers
----------------------------------------------------------------
US Airways, Inc., and its debtor-affiliates propose to pay certain
prepetition claims of outside maintenance providers, shippers and
contractors, and to continue honoring, performing and exercising
their rights and obligations under the Maintenance Contracts and
the Pass Through Projects in the ordinary course of business.
Outside Maintenance Providers
The Debtors perform significant maintenance and overhaul work to
maintain their fleet of aircraft in accordance with Federal
Aviation Administration regulations. Although the Debtors perform
a large part of their aircraft maintenance and repair work with
their own personnel, they also rely on outside mechanics and
repairmen to perform some aircraft, engine and other equipment
maintenance and repair work.
Brian P. Leitch, Esq., at Arnold & Porter, in Denver, Colorado,
explains that the Debtors have developed strong, long-standing
relationships with their Outside Maintenance Providers with
favorable pricing and trade credit terms. Failure to honor the
prepetition obligations to the Outside Maintenance Providers will
jeopardize these relationships. Because the universe of qualified
Outside Maintenance Providers with the size and expertise to
service the Debtors is limited, it would be difficult to replace
these providers with new providers on economically viable terms.
Additionally, many of the Outside Maintenance Providers are in
possession of aircraft, engines and other equipment that are vital
to the Debtors' operations. The Outside Maintenance Providers may
assert possessory liens and refuse to redeliver these items until
they are paid prepetition amounts.
Shippers
An integral part of the Debtors' maintenance and repair operations
are domestic and foreign commercial common carriers, movers,
shippers, freight forwarders and consolidators, delivery services,
customs brokers, shipping auditing services and other third party
service providers, that ship, transport, store, move through
customs and deliver goods through established national and
international distribution networks.
The Debtors rely on the Shippers to transport parts, goods and
packages to their Outside Maintenance Providers. The Shippers are
critical to the Debtors' day-to-day operations. At any given
time, there are numerous shipments en route to or from the Outside
Maintenance Providers, meaning Shippers are currently in
possession of engines and other equipment that are vital to the
Debtors' operations. Absent payment, the Shippers might assert
possessory liens against property held in their possession and may
refuse to refuse to deliver or release the property until they are
paid. This could cause a material business disruption that could
impede the Debtors' reorganization.
Mr. Leitch notes that the recent average payments to Outside
Maintenance Providers and Shippers were approximately $33,000,000
per month. The outstanding prepetition obligations owed to the
Outside Maintenance Providers and Shippers are approximately
$35,000,000 as of the Petition Date.
Contractors
The Debtors rely on contractors, subcontractors and professional
service firms to perform construction, maintenance and repairs at
their facilities. The Debtors want to pay these parties to the
extent that they have valid statutory or possessory liens on the
Debtors' assets. The recent average expenditure for the
Contractors is approximately $1,300,000 per month. The
outstanding prepetition obligations owed to the Contractors is
approximately $2,000,000 as of the Petition Date. However, due to
the nature of the billing cycle, this estimate may not reflect
amounts owed for goods and services provided, but not yet billed,
to the Debtors.
Payment Conditions
To avoid undue delay and facilitate the continued operation of the
Debtors' businesses, the maintenance and repair of aircraft,
engines and other equipment, gates, terminals, and hangars, and
the completion of ongoing construction projects, the Debtors will
pay and discharge the claims of Outside Maintenance Providers,
Shippers and Contractors with Liens or Interests against the
Debtors' property.
With respect to each Claim:
(a) the Debtors will not pay a Claim unless the Outside
Maintenance Provider, Shipper or Contractor has perfected
or is capable of perfection of one or more Liens or
Interests;
(b) Claim payment will be made with a full reservation of
rights regarding the extent, validity, perfection or
possible avoidance of any Liens or Interests, if any;
(c) the Outside Maintenance Provider, Shipper or Contractor
agrees to promptly release any Liens or Interests upon
payment of the Claim.
Mr. Leitch also notes that it is vital that the Debtors pay the
prepetition claims of the Outside Maintenance Providers and
Shippers to ensure that the Debtors' fleet is maintained and
serviced in a timely fashion and that there is no disruption to
safe, dependable air travel. Planned maintenance for aircraft is
scheduled months ahead of time, both internally and with the
Outside Maintenance Providers. It is vital that the planned
maintenance schedule is not disrupted. Disruption could impair
operations and lower confidence in the Debtors' safety and
performance records. Disruption could also impair the Debtors'
ability to comply with the FAA maintenance regulations.
* * *
Judge Mitchell grants the Debtors' request on a conditional basis.
Any party-in-interest may object until September 24, 2004. The
U.S. Trustee and any statutory committee appointed in the Debtors'
cases have until September 29, 2004, or 10 days after the
appointment of the committee, whichever is later, to object.
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of US Airways, Inc.,
Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines,
Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales,
Inc., Material Services Company, Inc. and Airways Assurance
Limited, LLC. Under a chapter 11 plan declared effective on
March 31, 2003, USAir emerged from bankruptcy with the Retirement
Systems of Alabama taking a 40% equity stake in the deleveraged
carrier in exchange for $240 million infusion of new capital. US
Airways and its subsidiaries filed another chapter 11 petition on
September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq. and Douglas
M. Foley, Esq. at McGuireWoods LLP represent the Debtors in its
restructuring efforts. In the Company's second bankruptcy filing,
it lists $8,805,972,000 in total assets and $8,702,437,000 in
total debts. (US Airways Bankruptcy News, Issue No. 64; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
UNITED AIRLINES: Revenue Passenger Miles Up 9.9% in August 2004
---------------------------------------------------------------
With its flights averaging 83.8% full, United Airlines' total
scheduled revenue passenger miles (RPMs) increased in August 2004
by 9.9% on a capacity increase of 8.3% available seat miles (ASMs)
vs. the same period in 2003. For the fifth month in a row, United
has broken its load-factor record for the month.
Even with flights fuller than ever, United's operational
performance continues to improve. In fact, the U.S. Department
of Transportation yesterday reported that United led the seven
major U.S. airlines in on-time performance for the month of July,
for the second month in a row.
"Our employees have done a phenomenal job of running an excellent
operation during our busiest and stormiest months of the year,"
says Pete McDonald, Chief Operating Officer. "That's great news
for our customers because we are delivering more reliable on-time
performance that gets them where they need to go. It also
benefits our business - fewer delays bring cost savings to
United."
2004 2003 Percent
August August Change
-------- -------- -------
Scheduled Service Only:
Revenue Plane Miles 71,747,000 66,457,000 8.0%
Number Of Departures 55,917 52,576 6.4%
Revenue Passengers 6,804,000 6,172,000 10.2%
Revenue Passenger Miles (000):
North America 7,140,385 6,441,031 10.9%
Pacific 2,095,689 1,775,746 18.0%
Atlantic 1,406,043 1,390,438 1.1%
Latin America 273,256 322,266 -15.2%
System 10,915,373 9,929,481 9.9%
Available Seat Miles (000):
North America 8,611,815 7,966,732 8.1%
Pacific 2,447,099 2,038,546 20.0%
Atlantic 1,643,106 1,622,933 1.2%
Latin America 329,952 409,837 -19.5%
System 13,031,972 12,038,048 8.3%
Passenger Load Factor (Percent):
North America 82.9 80.8 2.1%
Pacific 85.6 87.1 -1.5%
Atlantic 85.6 85.7 -0.1%
Latin America 82.8 78.6 4.2%
System 83.8 82.5 1.3%
Cargo Ton Miles (000):
Freight 135,195 112,737 19.9%
Mail 27,707 32,817 -15.6%
System 162,902 145,554 11.9%
Total System Inc Charter (000):
Revenue Passenger Miles 10,990,311 9,951,289 10.4%
Available Seat Miles 13,123,934 12,066,680 8.8%
Revenue Psgr. Km. 17,686,707 16,014,908 10.4%
Available Seat Km. 21,120,347 19,418,908 8.8%
Total Revenue Ton Miles 1,261,933 1,140,988 10.6%
Total Avail. Ton Miles 2,061,087 1,892,988 8.9%
Total Rev. Ton Km. 1,829,640 1,653,823 10.6%
Total Avail. Ton Km. 3,009,187 2,763,762 8.9%
Year To Date
----------------------- Percent
2004 2003 Change
-------- -------- -------
Scheduled Service Only:
Revenue Plane Miles 532,688,000 500,556,000 6.4%
Number Of Departures 413,971 401,254 3.2%
Revenue Passengers 47,974,000 44,471,000 7.9%
Revenue Passenger Miles (000):
North America 49,611,034 45,587,364 8.8%
Pacific 15,399,412 11,609,242 32.6%
Atlantic 10,219,256 9,229,296 10.7%
Latin America 2,335,074 2,542,228 -8.1%
System 77,564,776 68,968,130 12.5%
Available Seat Miles (000):
North America 63,204,361 59,512,154 6.2%
Pacific 18,139,607 15,504,279 17.0%
Atlantic 12,391,837 11,736,647 5.6%
Latin America 2,981,988 3,452,280 -13.6%
System 96,717,793 90,205,360 7.2%
Passenger Load Factor (Percent):
North America 78.5 76.6 1.9%
Pacific 84.9 74.9 10.0%
Atlantic 82.5 78.6 3.9%
Latin America 78.3 3.6 4.7%
System 80.6 76.5 3.7%
Cargo Ton Miles (000):
Freight 1,008,952 1,023,142 -1.4%
Mail 240,033 255,148 -5.9%
System 1,248,985 1,278,290 -2.3%
Total System Inc Charter (000):
Revenue Passenger Miles 77,993,375 69,466,034 12.3%
Available Seat Miles 97,241,757 90,813,977 7.1%
Revenue Psgr. Km. 125,514,738 111,791,689 12.3%
Available Seat Km. 156,491,160 146,146,933 7.1%
Total Revenue Ton Miles 9,048,353 8,225,170 10.0%
Total Avail. Ton Miles 15,318,371 14,301,315 7.1%
Total Rev. Ton Km. 13,119,844 11,927,554 10.0%
Total Avail. Ton Km. 22,364,822 20,879,920 7.1%
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $24,190,000,000 in
assets and $22,787,000,000 in debts. (United Airlines Bankruptcy
News, Issue No. 59; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
VLASIC: Campbell Present Two More Witnesses in $250M Spin-Off Suit
------------------------------------------------------------------
Campbell Soup Company called tow more witnesses to testify before
the United States District Court for the District of Delaware in
the $250 million lawsuit commenced by VFB, LLC, attacking the
spin-off of Vlasic Foods from Campbell:
A. Anthony DiSilvestro
Michael W. Schwartz, Esq., representing Campbell, brought in
Campbell's current Vice President and Controller, Anthony
DiSilvestro. VFB's counsel had previously presented to the
District Court a deposition testimony of Mr. DiSilvestro.
With regards to the spin-off, Mr. DiSilvestro admits that he
was responsible for determining or recommending ultimately to
the Board what the amount of debt in the capital of VFI should
be. Ultimately, Mr. DiSilvestro, with Campbell's Corporate
Treasury Group, recommended $500 million.
Mr. DiSilvestro explains at length how they determined the
$500 million figure:
"The first thing we did, and what we do for Campbell is,
within the Corporate Treasury Group, we maintain a
financial modeling capability and that is a projection of
our primary financial statements -- income statement, a
balance sheet and a cash flow. And together with that, we
look at what we call metrics, and there are a number of
metrics used to ascertain the creditworthiness of a
company.
"For example, the ratio of its cash flow to its interest
expense. The ratio of its debt to its total capital.
"And we use this modeling capability to look at different
scenarios for the company going forward. If there's an
acquisition or if there's a change in dividend, we can put
this in to this financial model, it's quite rigorous, and
say what's the projected impact on the company.
"So the first thing we did is we recreated this modeling
capability for Vlasic Foods. So we were able to project
its income statement, its balance sheet, its cash flow and
its debt level.
"So what we did then, we looked at three different levels
of debt, beginning as of July 31, 1997, and they were $300
million, $500 million and $800 million."
Mr. DiSilvestro further expounds that $800 million was a debt
level that was in the range that Goldman Sachs recommended.
Mr. DiSilvestro's team thought it was too high, with interest
obligation that was a little more than they wanted. It was,
however, "doable", Mr. DiSilvestro points out, since they
could have gone out and borrowed that amount without too much
trouble. "[B]ut our objective wasn't to maximize the debt
level of Vlasic. [T]he objective was to provide them a lower
cost capital structure without burdening them. . . ."
The $300 million figure would have been the absolute minimum
because it represented a pro rata share of Campbell's
outstanding debt at the time, Mr. DiSilvestro continues. "Our
feeling was $300 million was too low and then we looked at
$500 million and $500 million seemed to strike the right
balance of employing a certain amount of debt financing in the
capital structure but leaving enough financial flexibility in
Vlasic. . . ."
"My feeling was it was a conservative starting point. We had
valuations for the businesses way in excess of that," Mr.
DiSilvestro says. "Goldman Sachs valued these businesses at
$1.2 billion. The equity market valued these businesses at
$1.5 billion. We valued these businesses at $1.2 billion.
Certainly, the banks who committed to lend $750 million valued
these businesses in excess of that amount."
Mr. Schwartz asked Mr. DiSilvestro how he and his team
determined how to actually finance the $500 million debt. One
way, Mr. DiSilvestro replies, was to create a new loan or new
financing for Vlasic.
"We really thought we wanted to give [Vlasic] the opportunity
to create what they thought was the right debt portfolio in
terms of long-term, short-term, fixed rate, floating rate. So
what we did is, we put in place a very flexible bank credit
agreement, which had committed capacity of $750 million.
Amounts could be borrowed. Amounts could be repaid. There
were different interest rate alternatives within it.
"So it offered a lot of flexibility. And the thought was
provide this flexibility, let Vlasic get going, and then they
can make decisions about whether they wanted to have fixed-
rate debt, long-term debt [and] what-have-you."
Mr. DiSilvestro tells the District Court that it was Richard
Emmet, Campbell's Assistant Treasurer at that time, who was
principally responsible for arranging the bank financing.
To help arrange the bank facility, Campbell solicited from,
among others, its own bank group. In going to the banks, Mr.
DiSilvestro says that he was putting his personal as well as
Campbell's goodwill on the line. Mr. DiSilvestro believes
that were no misstatements made to the banks nor any
information withheld from them that they should have had. Mr.
DiSilvestro further notes that in the aftermath of the spin-
off, no bank ever complained to him that they had been misled
or that things had been kept from them.
Mr. DiSilvestro attests that VFI CFO William Lewis' testimony,
that he was not at liberty to talk to the banks, is wrong.
"We encouraged them to talk to these banks."
Mr. DiSilvestro notes that VFI's contention that the spin-off
was essentially a sale with an implied purchase price of about
$650 million is not correct. "There's no purchase price.
This was a separation of businesses from Campbell via the
distribution of shares in Vlasic Foods to the then-existing
share owners of Campbell."
As to complaints that the Vlasic people did not have an
opportunity to do due diligence, Mr. DiSilvestro remarks, "if
I had my choice between running these businesses for six
months prior to the spin-off or doing two days of due
diligence where you're allowed to rummage through boxes in a
conference room, I would rather run these businesses. That's
a much more extensive and thorough due diligence than any
other kind I can imagine."
Mr. DiSilvestro also explains why supply agreements were kept
to a relatively short term. "Our principles around the supply
agreements were threefold -- at arm's length, consistent with
what the past practices were, and short term in nature," Mr.
DiSilvestro says.
"So if you step back, the whole concept of the spin-off is to
separate these two businesses, and to enter into long-term
contracts at that time. And certainly, the parties were free
to do that after the fact, the idea of having long-term
contracts is certainly inconsistent with the whole concept of
doing the spin-off, which enabled each business to focus on
its own strategies per se."
Mr. DiSilvestro says that there was no conflict between the
principles of the terms to be at arm's length and to be
consistent with past practices.
Mr. DiSilvestro admits that he really doesn't know what
happened to Vlasic. "I've given this a lot of thought and the
truth is, I don't know. I wasn't there, but I can tell you a
few reasons why I think it didn't fail."
"I don't think it failed because it had too much debt. I
think $500 million was a reasonable amount. I think the issue
here was the dramatic and draconian decline in the earnings.
[The] $500 million amount was reasonable. The value of Vlasic
businesses far exceeded that. . . .
"The second reason I don't think it failed was because these
were doomed businesses. You know, Vlasic and Swanson are
brands that had been around for decades. They're well
established. They have strong market positions. They have
good growth prospects. They will continue to prosper well
into the future.
"The third reason . . . is that it clearly happened well after
the spin-off, well after it left the Campbell Soup Company,
and the reason I say that is, you know, I worked closely with
Bob Bernstock on this. He is an honorable, credible Chief
Executive Officer. I don't believe he would knowingly go out
in June 1999, borrow $200 million from lenders, knowing that
there was some fatal flaw in these businesses. So it's clear
to me he didn't know.
"Certainly, the financial institutions that bought the notes
didn't know, and clearly I didn't know. I was optimistic. In
fact, I purchased stock in this company in June or July of
1998. I lost money. I purchased stock again in June or July
of 1999. I lost money. I don't know."
On cross-examination, Mr. DiSilvestro insists that even with
what he has learned now, there's nothing that he would do
differently.
B. Linda Lipscomb
Linda Lipscomb is the deputy general counsel in Campbell
Legal's Department. In connection with the spin-off
transaction, Ms. Lipscomb was asked to handle all legal
aspects of the separation of the businesses out through and
including the distribution of shares to the shareholders.
According to Ms. Lipscomb, she did not have any input into the
business decisions that had to be made in connection with the
various aspects of the spin-off.
Ms. Lipscomb relates that she either prepared VFI's
incorporation papers or directed someone to prepare them.
Ms. Lipscomb recounts that the beef and mushroom supply
agreements were finalized shortly before the closing of the
spin-off.
The transition service agreement between Campbell and Vlasic
contained a requirement on Campbell to consult with VFI to
find commercially available substitutes for a number of the
proprietary ingredients that were being supplied.
When asked if the spin-off could have been done without $500
or $558 million in debt being put on Vlasic, Ms. Lipscomb says
that she does not have any opinion on that. "I was relying on
the project leader and finance team." But she assumes it
could have been done without the debt. (Vlasic
Foods Bankruptcy News, Issue No. 47; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
WORLDCOM INC: Asks Court to Disallow Celtic's $88.9M Claims
-----------------------------------------------------------
Celtic Holdings, LLC, filed seven claims which assert:
-- damages to premises;
-- prepetition rent;
-- amounts for mechanic's liens filed by another claimant,
Spectrum Construction Services, Inc.;
-- legal fees; and
-- brokerage fees.
The seven Claims are:
Claim No. Date Filed Claim Amount
--------- ---------- ------------
27162 01/23/03 $165,583
27163 01/23/03 165,583
27164 01/23/03 34,281
34795 03/28/03 20,139,578
37808 01/26/04 20,717,916
38233 04/13/04 23,331,648
38371 07/08/04 24,379,500
------------
$88,934,089
============
According to Stewart M. Stein, Esq., at Stinson Morrison Hecker,
LLP, in Kansas City, Missouri, Celtic's Claims are duplicative.
The Claims assert the exact or similar dollar amount for the same
alleged debts. Celtic is not entitled to a double recovery and,
therefore, may not recover on more than one Claim.
WorldCom, Inc. and its debtor-affiliates deny any liability to the
damages Celtic allegedly incurred and dispute that Celtic is
entitled to payment of claims asserted by other third parties.
Mr. Stein further asserts that
Celtic's Claims were not stated with specificity.
The Debtors ask the Court to disallow Celtic's Claims in their
entirety.
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. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000)
* Garden City Group Opens New West Coast Regional Headquarters
--------------------------------------------------------------
David A. Isaac, president of The Garden City Group, Inc., recently
announced the opening of the company's new west coast regional
headquarters at a state-of-the-art facility in Seattle,
Washington. Jennifer Keough, vice president and managing director,
will continue to lead GCG's west coast operations.
"Our strong west coast presence compliments our existing
facilities and enables us to provide higher quality and cost-
effective services coast-to-coast," said Ms. Keough. "The key is
accessibility...not just for law firms and corporations on the
west coast, but for those located elsewhere with the need for
legal administration services in this region of the country."
"GCG's operation continues to grow to better serve our clients and
their diverse needs, and our new Seattle office will give us the
necessary space for future expansion," added Mr. Isaac.
GCG's new west coast regional headquarters is located at 815
Western Avenue, Suite 200, in Seattle, Washington. The general
phone number is 206-876-5300, and the toll free phone number is
888-404-8013.
GCG has branch offices in Manhattan; Sarasota, Florida; Columbus,
Ohio; Reston, Virginia and San Francisco, California. Its
corporate office is located in Melville, New York.
The Garden City Group, Inc., a subsidiary of Crawford & Company,
manages Chapter 11 administration, administers class action
settlements, designs legal notice programs, and provides expert
consultation services. Its web address is
http://www.gardencitygroup.com/
Based in Atlanta, Georgia, Crawford & Company --
http://www.crawfordandcompany.com/ -- is the world's largest
independent provider of claims management solutions to insurance
companies and self-insured entities, with a global network of more
than 700 offices in 67 countries. Major service lines include
workers' compensation claims administration and healthcare
management services, property and casualty claims management, and
risk management information services. The Company's shares are
traded on the NYSE under the symbols CRDA and CRDB.
*********
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
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however, be complete or accurate. The Monday Bond Pricing table
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Each Tuesday edition of the TCR contains a list of companies with
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the definitive compilation of stocks that are ideal to sell short.
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For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
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of Delaware, contact Ken Troubh at Nationwide Research &
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*********
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not guaranteed.
The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
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