/raid1/www/Hosts/bankrupt/TCR_Public/050117.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, January 17, 2005, Vol. 9, No. 13
Headlines
ACCURIDE CORP: Launches $225 Million Debt Offering
ADELPHIA COMMS: Fee Committee Wants to Amend LCC Retention Pact
ADELPHIA BUSINESS: Wants Until July 19 to Object to Claims
AIR CANADA: CIBC Divests 2,679,900 Shares of ACE Class B Stock
AIRGAS INC: CEO to Transfer Stock as Settlement of Forward Pact
AMERICAN WAGERING: Youbet.com Withdraws Plan of Acquisition
ATA AIRLINES: Gets Court Nod to Reject SunGard Agreement
BELLAIRE GENERAL: Taps McClain Leppert as Bankruptcy Counsel
BELLAIRE GENERAL: Look for Bankruptcy Schedules on Feb. 17
BLEYER INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
CAIRNS & ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors
CATHOLIC CHURCH: Tucson Hires Tucson Realty as Exclusive Agent
CENTENNIAL SPECIALTY: Inks Pact to Reduce Heartland Bank Loan
CHEMICAL DISTRIBUTION: Voluntary Chapter 11 Case Summary
CMS ENERGY: Fitch Rates $150 Million Senior Note Due 2012 'B+'
DEL MONTE: Subsidiary Contemplates Private Debt Placement
ELCOM INT'L: Gets Preferred Bidder Status for eMarketplace System
EXIDE TECH: Soros Entities Disclose 6.3% Equity Stake
FAIRCHILD SEMICONDUCTOR: Cuts Debt with Call of Sr. Sub. Notes
FAIRPOINT COMMS: Moody's Lifts Senior Implied Rating From B2 to B1
FEDERAL-MOGUL: Court Approves Ernst & Young's Modified Employment
FEDERAL-MOGUL: Asbestos PD Committee Hires Navigant as Consultant
FRANK'S NURSERY: Delays Bankruptcy-Approved Real Property Sales
FRIEDMAN'S INC: Files for Chapter 11 Protection in S.D. Georgia
FUJITA CORP: Judge Smith Confirms Amended Plan of Reorganization
GRAFTECH INT'L: Sets 4th Quarter Conference Call for March 15
HIA TRADING: Wants to Hire Scarcella Rosen as Bankruptcy Counsel
HIA TRADING: Section 341(a) Meeting Slated for Jan. 20
INDYMAC ABS: Fitch Junks Class BV SPMD 2000-C Series
INTERMET CORP: Court Approves Amended Pacts with Major Customers
INTERSTATE BAKERIES: Court Lifts Stay to Allow Huffman Appeal
INTERSTATE BAKERIES: Names Steve Proscino EVP of Sales
INTERSTATE GENERAL: Explores Possible Sale of Remaining Assets
ITSV INC: Court Permits Dismissal of Claims Against iPayment
JP MORGAN: S&P Affirms Junk Rating on Class G 1997-C5 Certificate
KMART: Hearing on Critical Vendor Proceedings Set for Jan. 18
LAIDLAW INT'L: PBGC Extends Deadline to Sell Shares to April 15
LEVI STRAUSS: Completes $450 Million Cash Tender Offer of 7% Notes
LOMBARDI'S OF DESERT: Case Summary & Largest Unsecured Creditors
LORAL SPACE: Expands Asian Satellites with SingTel Pact
MIRANT: Settles Energy Crisis Claims with California Utilities
MOLECULAR DIAGNOSTICS: Settles $750,000 Tax Liability With IRS
MORGAN STANLEY: Fitch Holds Junk Rating on $7.7Mil. 1997-HF1 Cert.
NATIONAL ENERGY: Inks Pact to Settle Edison Mission Dispute
NATIONAL ENERGY: ET Power Wants Aquila Merchant to Pay $8,752,287
NOVELIS INC: Moody's Assigns B1 Rating to $1.4 Bil. Sr. Notes
OMEGA HEALTHCARE: Closes $58.1 Million in New Investments
ORECK CORPORATION: S&P Puts 'B+' Rating on $210 Million Sr. Debt
OWENS CORNING: Court Approves Financial Balloting Group as Agent
PACIFIC ENERGY: Sale to Lehman Cues S&P to Lower Rating to 'BB'
PARMALAT: Court Okays U.S. Debtors' Revised Disclosure Statement
PARMALAT USA: Farmland Can Pay Fees for Proposed Exit Financing
PRESIDION SOLUTIONS: Completes $25 Mil. Financing with Mirabilis
PRESTIGE BRANDS: Moody's Affirms Senior Secured Ratings at B1
PRINTS PLUS INC: Case Summary & 20 Largest Unsecured Creditors
QUANTEGY INC: Wants Until Feb. 25 to File Schedules & Statements
REALM NATIONAL: S&P Junks Credit & Financial Ratings
RCN CORP: Registers New Common Stock & Warrants with SEC
SCOTT RANCH INC: Voluntary Chapter 11 Case Summary
SHOWTIME ENTERPRISES: Case Summary & Largest Unsecured Creditors
SHOWTIME ENTERPRISES: Sparks Inks Pact to Acquire All Assets
SOLECTRON CORP: Offering to Exchange $450-Mil Notes for New Notes
STELCO INC: Steelworkers Director Challenges Bankruptcy Filing
SYNIVERSE TECHNOLOGIES: Moody's Puts Ba3 Rating on $290 Mil. Loan
TEREX CORPORATION: Needs to Restate 2001 to 2003 Financials
THREE PROPERTIES: Judge Isgur Formally Closes Bankruptcy Case
UAL CORPORATION: Wants to Cut Mechanics Pay by 11.5%
US AIRWAYS: Fills Senior Management Positions & Reassigns Duties
VALOR TELECOM: IPO Cues Moody's to Lift Sr. Implied Ratings to Ba3
* Armanino McKenna Promotes Andrew Armanino as Managing Partner
* Fitch: U.S. Public Finance Forecast
* King & Spalding Names 20 New Partners in Four Firms
* Piper Rudnick Joins Forces with DLA Following Gray Cary Merger
* BOND PRICING: For the week of January 10 - January 14, 2005
*********
ACCURIDE CORP: Launches $225 Million Debt Offering
--------------------------------------------------
Accuride Corporation will commence an offering of $225 million of
notes due 2015, in an offering exempt from the registration
requirements of the Securities Act of 1933, to qualified
institutional buyers under Rule 144A and outside the United States
in compliance with Regulation S. The Company intends to use the
net proceeds from the offering to redeem or otherwise retire its
existing 9-1/4% senior subordinated notes due 2008. This
transaction is expected to be completed during the first quarter
of 2005, subject to customary closing conditions.
The notes being sold under the Securities Act of 1933, will not be
registered under the Securities Act of 1933 and may not be offered
or sold in the United States absent registration or an applicable
exemption from registration requirements. This press release
shall not constitute an offer to sell or a solicitation of an
offer to buy such notes and is issued pursuant to Rule 135c under
the Securities Act of 1933.
Accuride Corporation is a manufacturer and supplier of wheels for
heavy/medium trucks and commercial trailers, buses, light trucks,
as well as specialty and military vehicles. Accuride Corporation
has steel wheel operations in Henderson, Kentucky; London,
Ontario, Canada; and Monterrey, Mexico. Accuride has aluminum
wheel operations in Erie, Pennsylvania, and Cuyahoga Falls, Ohio.
* * *
As reported in the Troubled Company Reporter on Jan. 4, 2005,
Standard & Poor's Ratings Services placed its 'B' corporate credit
and other ratings on privately held Accuride Corp. and privately
held Transportation Technologies Industries Inc. on CreditWatch
with positive implications, following Accuride's announcement that
it has agreed to acquire TTI. Combined lease-adjusted debt for
the two companies was around $850 million as of Sept. 30, 2004,
and EBITDA for both companies was around $158 million for the 12
months ended Sept. 30.
While the transaction's capital structure has not been announced,
it appears that existing debt will be refinanced, and some use of
equity is possible. Accuride has indicated that its shareholders
will own 65% of the combined company's stock, and TTI holders will
own the remaining 35%, as well as contingent equity that could
allow them to receive a further 3% if the company meets certain
performance goals. The transaction is expected to close
in January.
"The business profile for the combined operation is likely to be
considered below average, albeit improved from the existing
profile for each company, since the companies serve the medium-
and heavy-duty truck markets and there should be some
opportunities for cost savings," said Standard & Poor's credit
analyst Robert Schulz.
ADELPHIA COMMS: Fee Committee Wants to Amend LCC Retention Pact
---------------------------------------------------------------
As previously reported, the Fee Committee of Adelphia
Communications Corp. retained Legal Cost Control, Inc., as its fee
auditor pursuant to an order entered by the United States
Bankruptcy Court for the Southern District of New York on June 25,
2003. LCC provides legal and accounting cost and case management
services to corporations, local governments, bankruptcy courts,
insurance carriers and governmental agencies. LCC's services
include legal bill processing or payment, Web-based legal cost
solutions, legal cost reviews, law firm audits and legal services
assessments. LCC has extensive expertise in analyzing fee and
expense requests in large Chapter 11 cases.
With the current increase in volume of fee and expense requests,
the Fee Committee believes that further assistance from LCC beyond
that which was originally contemplated in LCC's Original Retention
is warranted.
Accordingly, the Fee Committee seeks the Court's authority to
enter into an amended retention agreement with LCC.
Under the Amended Retention, LCC will continue to:
* audit fee and expense requests;
* assist the Fee Committee in the determination and resolution
of the compliance of the fee and expense requests of
retained professionals with the applicable provisions of
the Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure, the United States Trustee Guidelines, and the
Local Rules and Orders of the U.S. Bankruptcy Court for the
Southern District of New York; and
* provide other services as the Fee Committee may request from
time to time.
James A. Beldner, Esq., at Kronish Lieb Weiner & Hellman, LLP, in
New York, explains that LCC's Amended Retention will aid the Fee
Committee's analysis of fees and expenses and augment the
Committee's ability to properly and efficiently analyze a large
volume of fee and expense requests.
From the inception of these cases through February 29, 2004, the
ACOM Debtors' retained professionals have submitted billings of
around $200 million in fees and expenses. Mr. Beldner tells the
Court that LCC has materially aided in reviewing the prior
applications, and will materially aid in reviewing future fee and
expense requests. Moreover, LCC's experience will enable the
ACOM Debtors to achieve substantial benefits by maximizing cost
control and efficiency.
In consideration for LCC's services, the Fee Committee agreed to
an amended compensation structure. In addition to the $800,000
LCC has earned in reviewing over $200 million in fees and expenses
to date, the firm will be compensated an additional $300,000 for
the remainder of the ACOM Debtors' cases, however long they may
continue in Chapter 11. The Amended Compensation, which is
inclusive of all services and expenses, will be paid in equal
monthly installments through March 31, 2006.
The Fee Committee and LCC believe that the Amended Compensation is
necessary. When the parties entered into the Original Retention,
neither party contemplated fees exceeding an aggregate of $175
million. Additionally, at the time of LCC's Original Retention
there were 20 retained professionals submitted billing information
to the Debtors. As of January 10, 2005, the number of retained
professional exceeds 48.
LCC's engagement may be terminated by the Fee Committee at any
time without liability, except that after termination, LCC will
remain entitled to any fees accrued but not yet paid prior to the
termination.
LCC President John J. Marquess assures the Court that LCC has no
connection with the ACOM Debtors, their creditors, other parties-
in-interest, their professionals, and the United States Trustee.
LCC does not represent any interest materially adverse to the ACOM
Debtors and their estates, or the matters to which LCC is to be
employed. LCC is a "disinterested person," as that term is
defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Coudersport, Pennsylvania, Adelphia
Communications Corporation (OTC: ADELQ) is the fifth-largest cable
television company in the country. Adelphia serves customers in
30 states and Puerto Rico, and offers analog and digital video
services, high-speed Internet access and other advanced services
over its broadband networks. The Company and its more than
200 affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002. Those cases are jointly
administered under case number 02-41729. Willkie Farr
& Gallagher represents the ACOM Debtors. (Adelphia Bankruptcy
News, Issue No. 77; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
ADELPHIA BUSINESS: Wants Until July 19 to Object to Claims
----------------------------------------------------------
Reorganized Adelphia Business Solutions, Inc., now known as
TelCove, Inc., has objected to, or otherwise resolved, or is in
the process of resolving, each disputed claim in its Chapter 11
case. However, unresolved issues remain outstanding with respect
to 50 remaining disputed claims.
Due to the complex nature of the Remaining Disputed Claims, Judy
G. Z. Liu, Esq., at Weil Gotshal & Manges, in New York, explains
that the Reorganized Debtors will require additional time to
complete the claims reconciliation and objection process with
respect to the Remaining Disputed Claims.
Thus, Reorganized ABIZ asks Judge Gerber to extend the deadline by
which it may object to the Remaining Disputed Claims until
July 19, 2005.
The extension will give the parties sufficient time to resolve the
Remaining Disputed Claims in their entirety. The additional time
will also afford Reorganized ABIZ an optimum period of time within
which to potentially resolve the Remaining Disputed Claims without
the need for filing formal objections.
Ms. Liu assures the Court that the extension is not sought for
improper dilatory purposes and will not unduly prejudice
claimants.
Headquartered in Coudersport, Pa., Adelphia Business Solutions,
Inc., now known as TelCove -- http://www.adelphia-abs.com/-- is a
leading provider of facilities-based integrated communications
services to businesses, governmental customers, educational end
users and other communications services providers throughout the
United States. The Company filed for Chapter 11 protection on
March 27, 2002 (Bankr. S.D.N.Y. Case No. 02-11389) and emerged
under a chapter 11 plan on April 7, 2004. Judy G.Z. Liu, Esq., at
Weil, Gotshal & Manges LLP, represents the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $2,126,334,000 in assets and
$1,654,343,000 in debts. (Adelphia Bankruptcy News, Issue No. 77;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
AIR CANADA: CIBC Divests 2,679,900 Shares of ACE Class B Stock
--------------------------------------------------------------
Canadian Imperial Bank of Commerce discloses in a filing with the
Canadian Securities Administrators that between November 1 and
December 10, 2004, it sold a total of 2,679,900 Class B voting
shares of ACE Aviation Holdings, Inc., through the facilities of
The Toronto Stock Exchange in reliance upon the exemption from the
prospectus requirement provided in National Instrument 62-101
- Control Block Distribution Issues. The sales have been reported
separately in accordance with the Control Block Rule.
According to Robert J. Richardson, Vice-President & Associate
General Counsel, Group Head, CIBC World Markets Legal, CIBC
currently holds 812,256 Class B voting shares of ACE, which
represent 7.1% of the outstanding Class B voting shares of ACE.
CIBC holds its ACE voting shares solely for investment purposes
and not for the purpose of influencing the control or direction of
ACE. Mr. Richardson relates that CIBC may receive up to an
additional 221,139 Class B voting shares of ACE upon resolution of
certain disputed unsecured claims by CIBC against Air Canada.
However, CIBC does not intend to acquire ownership of, or control
over, additional securities of ACE.
Air Canada filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and filed a Section
304 petition in the U.S. Bankruptcy Court for the Southern
District of New York (Case No. 03-11971). Mr. Justice Farley
sanctioned Air Canada's CCAA restructuring plan on Aug. 23, 2004.
Sean F. Dunphy, Esq., and Ashley John Taylor, Esq., at Stikeman
Elliott LLP, in Toronto, serve as Canadian Counsel to the carrier.
Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie
Farr & Gallagher, serve as the Debtors' U.S. Counsel. When the
Debtors filed for protection from their creditors, they listed
C$7,816,000,000 in assets and C$9,704,000,000 in liabilities.
On September 30, 2004, Air Canada successfully completed its
restructuring process and implemented its Plan of Arrangement.
The airline exited from CCAA protection raising $1.1 billion of
new equity capital and, as of September 30, has approximately
$1.9 billion of cash on hand. (Air Canada Bankruptcy News, Issue
No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AIRGAS INC: CEO to Transfer Stock as Settlement of Forward Pact
---------------------------------------------------------------
On Jan. 29, 2002, Peter McCausland, chairman and chief executive
officer of Airgas, Inc. (NYSE:ARG), entered into a prepaid
variable share forward contract to sell up to 1.5 million shares
of Airgas common stock. The contract, an agreement to sell the
shares at a price discounted from the current market price at the
time that the contract was entered into, allowed Mr. McCausland to
participate in a portion of the upside potential of Airgas stock
for the three-year contract period, which is now expiring. Mr.
McCausland executed the contract and Airgas made a public
announcement before the start of trading on Jan. 29, 2002. In
connection with the contract, McCausland filed a Form 144 with the
Securities and Exchange Commission showing the disposition of the
shares, which represented approximately 11% of his total holdings.
"I chose this selling method three years ago because I believed
this company was positioned for growth," commented Mr. McCausland.
"The company's strong performance and the resulting stock price
appreciation allow me to keep up to 375,000 of the 1,500,000
shares originally contracted for delivery, assuming an Airgas
stock price above $16.485 per share."
Under the terms of the contract, Mr. McCausland will deliver up to
300,000 shares of stock on the third NYSE business day after each
of the following 2005 dates: Jan. 14, Jan. 21, Jan. 28, Feb. 4 and
Feb. 11. Mr. McCausland will file a separate Form 4 on each of
the aforementioned dates to disclose the actual number of shares
to be delivered. After settlement of the contract, Mr. McCausland
will directly or indirectly beneficially own approximately 13% of
outstanding Airgas shares.
About Airgas, Inc.
Airgas, Inc. (NYSE:ARG) -- http://www.airgas.com/-- is the
largest U.S. distributor of industrial, medical and specialty
gases, welding, safety and related products. Its integrated
network of about 900 locations includes branches, retail stores,
gas fill plants, specialty gas labs, production facilities and
distribution centers. Airgas also distributes its products and
services through eBusiness, catalog and telesales channels. Its
national scale and strong local presence offer a competitive edge
to its diversified customer base.
* * *
As reported in the Troubled Company Reporter on Nov. 8, 2004,
Standard & Poor's Ratings Services raised its ratings on Airgas
Inc. The corporate credit rating was raised to 'BB+' from 'BB'.
The outlook is stable on this Radnor, Pennsylvania-based
industrial gas distributor.
The upgrade reflects the likelihood that credit quality will be
sustained at improved levels, despite periodic moderate-size
acquisitions.
AMERICAN WAGERING: Youbet.com Withdraws Plan of Acquisition
-----------------------------------------------------------
Youbet.com, Inc. (NASDAQ:UBET), a leading online wagering company
and the largest provider of Internet horse racing content in the
United States, has withdrawn its proposal to acquire all of the
issued and outstanding shares of American Wagering, Inc. (AWI)
(OTC BB: BETMQ) for $12 million. Youbet's proposal was contained
in a competing reorganization plan and accompanying disclosure
statement filed with the United States Bankruptcy Court in Reno,
Nevada. The Court approved Youbet's settlement agreement with
American Wagering, Inc., and Leroy's Horse and Sports Place
(Debtors) pursuant to which Debtors paid Youbet $75,000 in
consideration for Youbet's withdrawal of its competing plan and a
release of certain related claims against Debtors, its officers
and directors.
As a result of the withdrawal of the competing reorganization
plan, Youbet will record a one-time charge, net of the settlement
payment, of approximately $275,000 pre-tax in its 2004 fourth
quarter period ended December 31, 2004, for expenses incurred in
connection with its efforts to acquire AWI.
In a separate development, in December 2004, the Company received
an insurance settlement of $1,300,000 from its directors and
officers liability insurance carrier for reimbursement of legal
and other related expenses related to a settlement in the fiscal
2004 second quarter of the TVG legal proceedings. As of Sept. 30,
2004, the Company's balance sheet included a net receivable of
$1,149,368 for this matter. Accordingly, the Company anticipates
that its cash position will reflect the settlement payment and
that it will record, in the period ended Dec. 31, 2004,
approximately $150,000 in pre-tax income reflecting the benefit of
the settlement in excess of the previously accrued net receivable
noted above.
Youbet Chairman and CEO, Charles F. Champion, commented, "While we
continue to believe that our offers represented excellent
financial and strategic proposals for American Wagering's
creditors and shareholders, it became increasingly apparent to us
that none of our proposals would be favorably received by AWI's
controlling shareholders. While we remain fully committed to
expanding into ancillary areas of the gaming and wagering
industries, we will only pursue these growth opportunities in a
prudent manner that benefits Youbet shareholders with the creation
of long-term value.
"Despite the withdrawal of our offer, our focus on leveraging our
existing capabilities and infrastructure, particularly in the
Nevada market, remains a priority for Youbet. To that effect, we
expect to proceed with the substantial licensing process necessary
to do business in the State of Nevada and continue to explore
opportunities in the state on either a stand-alone basis,
investment, or as part of a strategic partnership."
Youbet.com is the largest Internet provider of thoroughbred,
quarter horse and harness racing content in the United States as
measured by handle data published by the Oregon Racing Commission.
Members can watch and, in most states, wager on the widest variety
of horse racing content available via http://www.youbet.com/
Going Concern Doubt
The Company's independent auditors, Piercy Bowler Taylor and Kern,
have indicated in their report dated April 15, 2004, on the
Company's most recent annual financial statements for the fiscal
year ended January 31, 2004, that they had substantial doubt as to
the Company's ability to continue as a going concern.
Headquartered in Reno, Nevada, American Wagering, Inc. --
http://www.americanwagering.com/main.html-- owns and operates a
number of subsidiaries including, but not limited to, (1) Leroy's
Horse and Sports Place, which operates 47 race and sports books
licensed by the Nevada Gaming Commission, giving it the largest
number of books in the state; (2) Computerized Bookmaking Systems,
the dominant supplier of computerized sports wagering systems in
the state of Nevada; and (3) AWI Manufacturing (formerly AWI Keno)
is licensed by the Nevada Gaming Commission as a manufacturer and
distributor, and has developed a self-service race and sports
wagering kiosk. The Company filed for chapter 11 protection on
July 25, 2003 (Bankr. D. Nev. Case No. 03-52529). Thomas H. Fell,
Esq., at Gordon & Silver, Ltd., represents the Debtor in its
restructuring efforts. When the Debtor filed for bankruptcy, it
listed $13,694,623 in total assets and $13,688,935 in total debts.
ATA AIRLINES: Gets Court Nod to Reject SunGard Agreement
--------------------------------------------------------
On March 28, 2000, ATA Airlines and its debtor-affiliates
contracted SunGard Recovery Services to develop a disaster
recovery plan to be used in the event of a loss of the Building 1
Data Center. Under the Recovery Services Agreement, SunGard
provides the Debtors with certain equipment in the event of a data
loss due to a disaster. The Agreement also includes the right to
use a SunGard data center for recovery and provides for the
delivery of equipment required to continue to perform business
functions.
According to Terry E. Hall, Esq., at Baker & Daniels, in
Indianapolis, Indiana, the Agreement costs the Debtors nearly $750
per day. The plan contemplated by the Agreement has not been
tested or modified for several years. The plan in its current
form is not fully executable in the event of a disaster and the
equipment list provided in the Agreement will not support the
Debtors' current key systems and applications. In addition, the
Debtors' communication lines to the disaster recovery facility
have been disconnected as a cost-cutting measure. In sum, the
Agreement provides absolutely no benefit to the Debtors and is an
unnecessary burden.
Pursuant to Section 365 of the Bankruptcy Code, the Debtors sought
and obtained the United States Bankruptcy Court for the Southern
District of Indiana's authority to reject the Agreement.
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations. Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868
through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$745,159,000 in total assets and $940,521,000 in total debts.
(ATA Airlines Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
BELLAIRE GENERAL: Taps McClain Leppert as Bankruptcy Counsel
------------------------------------------------------------
Bellaire General Hospital, L.P. asks the U.S. Bankruptcy Court for
the Southern District of Texas for permission to employ McClain,
Leppert & Maney, P.C. as its general bankruptcy counsel.
McClain Leppert is expected to:
a) advise the Debtor with respect to its rights, duties and
powers in its chapter 11 case;
b) assist and advise the Debtor in its consultations relative
to the administration of its chapter 11 case;
c) assist the Debtor in analyzing the claims of the creditors
and in negotiations with those creditors;
d) assist the Debtor in negotiations with third parties
concerning matters relating to the terms of a proposed plan
of reorganization;
e) represent the Debtor at all hearings and other court
proceedings;
f) review and analyze all applications, orders, statements of
operations and schedules filed with the Court and advise the
Debtor as to their propriety;
g) assist the Debtor in preparing pleadings and applications to
protect its interests and objectives; and
h) perform all other legal services as may be required and
necessary in the Debtor's chapter 11 case.
Daniel F. Patchin, Esq., a Shareholder at McClain Leppert,
discloses that the Firm received a $130,712.19 retainer.
Mr. Patchin will charge the Debtor $325 per hour for his services.
Mr. Patchin reports McClain Leppert's professionals bill:
Designation Hourly Rate
----------- -----------
Shareholder $325 - 350
Associates 175 - 250
Legal Assistants 65 - 120
McClain Leppert assures the Court that it does not represent any
interest adverse to the Debtor or its estate.
Headquartered in Houston, Texas, Bellaire General Hospital, L.P.
-- http://www.bellairemedicalcenter.com/-- operates a hospital.
The Company filed for chapter 11 protection on January 3, 2005
(Bankr. D. Tex. Case No. 05-30089). When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of $10 million to $50 million.
BELLAIRE GENERAL: Look for Bankruptcy Schedules on Feb. 17
----------------------------------------------------------
The Honorable Karen K. Brown of the U.S. Bankruptcy Court for the
Southern District of Texas gave Bellaire General Hospital, L.P.,
more time to file its Statements of Financial Affairs, Schedules
of Assets and Liabilities, Schedules of Current Income
Expenditures, Schedules of Executory Contracts and Unexpired
Leases and Lists of Equity Security Holders. The Debtor has until
February 17, 2005, to file those documents.
The Debtor gave the Court three reasons militating in favor for
an extension to file their bankruptcy schedules:
a) the substantial size and scope of the Debtor's business and
the complexity of its financial affairs,
b) the Debtor has limited staffing available to perform the
required internal review of its accounts and affairs; and
c) the Debtor devoted time and resources in resolving some
business issues related to the commencement of its chapter
11 case that prevented it from completing the information
necessary for its Schedules and Statements.
The Debtor assures Judge Brown that the extension will give them
more time to work with its staff in accurately completing and
filing the Schedules and Statements on or before the extension
deadline.
Headquartered in Houston, Texas, Bellaire General Hospital, L.P.
-- http://www.bellairemedicalcenter.com/-- operates a hospital.
The Company filed for chapter 11 protection on January 3, 2005
(Bankr. D. Tex. Case No. 05-30089). Daniel F. Patchin, Esq., at
McClain, Leppert & Maney, P.C. represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed estimated assets and debts of $10 million
to $50 million.
BLEYER INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Bleyer Industries Inc.
260 West Sunrise Highway
Valley Stream, New York 11580
Bankruptcy Case No.: 05-80176
Type of Business: The Debtor manufactures polypropylene eggs
through the injection molding process and
selling its products to major retailers in
the United States.
Chapter 11 Petition Date: January 11, 2005
Court: Eastern District of New York (Central Islip)
Judge: Dorothy Eisenberg
Debtor's Counsel: Harold S. Berzow, Esq.
Ruskin Moscou Faltiscek
190 EAB Plaza
Uniondale, NY 11556
Tel: 516-663-6596
Fax: 516-663-6796
Total Assets: $3,200,000
Total Debts: $2,833,000
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
9000 N. University, LLC $69,537
c/o Elias Meginnes Riffle
416 Main St., Ste. 1400
Peoria, IL 61602
Denoble Carver & Company $48,479
3100 N. Knoxville Ave.
Peoria, IL 61603
200 West Sunrise Corp. $37,935
VIFAN USA Inc. $31,645
Flint Ink Corp. $15,931
Weiser LLP $15,319
Rock Vick & Assoc. $13,858
Shep Company Inc. $11,938
Brooks-Waterburn Corp. $10,181
Pride Solvents & Chemical $9,326
Allied Extruders, Inc. $9,244
Flexi-Printing Plate $8,369
Kahn & Comings Inc. $7,526
Blue Cross Blue Shield $7,472
Bob Harman & Associates $7,403
Marvin, Larsson, Henkin $7,131
Amerencilco $7,016
Paperboard Products $6,505
200 Fifth Ave. Associates LLC $5,928
B E R Plastics Inc. $5,638
CAIRNS & ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Cairns & Associates, Inc.
641 Lexington Avenue
New York, New York 10022
Bankruptcy Case No.: 05-10220
Type of Business: The Debtor is a public relations and marketing
agency, specializing in strategic consumer
marketing communications, cause marketing,
special events, brand equity and brand image.
Chapter 11 Petition Date: January 13, 2005
Court: Southern District of New York (Manhattan)
Judge: Burton R. Lifland
Debtor's Counsel: Robert L. Rattet, Esq.
Arlene Gordon Oliver, Esq.
Jonathan S. Pasternak, Esq.
Rattet & Pasternak, LLP
550 Mamaroneck Avenue, Suite 510
Harrison, New York 10528
Tel: (914) 381-7400
Fax: (914) 381-7406
Financial Condition as of January 12, 2005:
Total Assets: $117,511
Total Debts: $2,202,086
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Merrill Lynch $59,905
PO Box 1507
Pennington, New Jersey 10007
GRS $18,091
420 Lexington Avenue, 14th Floor
New York, New York 10170
Hanover $17,325
15 Exchange Place
5th Floor, Suite 520
Jersey City, New Jersey 07302
First Lex $17,233
345 Park Avenue
New York, New York 10154-0101
Neopost $14,082
PO Box 45822
San Francisco, California 94145-0822
Wells Fargo $6,844
Eureka $6,624
Davis & Gilbert $5,549
Merrill Lynch, Pierce, Fenner & Smith, Inc. $5,298
AT&T Wireless $3,835
JH Cohn $3,823
Arc Electric $3,784
Yohalem $3,750
Williams Construction $3,101
Nextira One, LLC $3,010
Profnet $2,100
Bacons $2,732
Deltek $1,582
AT&T $1,560
Icorp $1,153
CATHOLIC CHURCH: Tucson Hires Tucson Realty as Exclusive Agent
--------------------------------------------------------------
Pursuant to Sections 327, 328, and 1107 of the Bankruptcy Code
and Rule 2014 of the Federal Rules of Bankruptcy Procedure, the
Diocese of Tucson sought and obtained Judge Marlar's authority to
employ Tucson Realty & Trust Co., as the Diocese's sole and
exclusive agent to sell any or all portions of certain premises.
A complete list of the premises is available for free at:
http://bankrupt.com/misc/tucson_inventory_sheet.pdf
Kasey C. Nye, Esq., at Quarles & Brady Streich Lang, LLP, in
Tucson, Arizona, asserts that Tucson Realty's services to
negotiate the sale of all or any portion of the Premises is
essential to Tucson's reorganization efforts. Tucson Realty has
experience, expertise, and resources that will enable it to
provide the real estate services needed by Tucson.
Tucson Realty is a firm of brokers and agents that provides real
estate agents who have substantial experience, knowledge, and
familiarity with the Arizona real estate market.
The term of Tucson Realty's agreement will commence on January 6,
2005, until May 31, 2005.
Ms. Nye assures the Court that the real estate services to be
provided by Tucson Realty will not duplicate or overlap the
efforts of any other professionals retained by Tucson, including
without limitation the services that may be provided by any
accountants to Tucson in its Chapter 11 case.
Gerald F. Kicanas, Bishop of the Diocese of Tucson, ascertains
that Tucson Realty is "disinterested" and does not represent any
entity which has any interest adverse to Tucson. Tucson Realty
will not represent any other entity in the Chapter 11 case during
its employment as sole agent of Tucson.
The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day. Susan G. Boswell, Esq., and Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese. (Catholic Church Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
CENTENNIAL SPECIALTY: Inks Pact to Reduce Heartland Bank Loan
-------------------------------------------------------------
Centennial Specialty Foods Corporation (Nasdaq: CHLE; Boston Stock
Exchange: CJS) and its lending bank, Heartland Bank, have agreed
to amend the Company's loan agreement effective Jan. 6, 2005.
The amount of the line of credit under the loan agreement has been
reduced from $5,000,000 to $4,000,000, while the consolidated net
worth covenant of the Company has been reduced from $7,000,000 to
$6,400,000. Outstanding borrowings under the line of credit are
approximately $2,400,000. These amendments were negotiated with
the bank, as the Company determined it was likely that it would
not meet the existing loan agreement's $7,000,000 consolidated net
worth requirement as of Dec. 31, 2004, which the bank waived as
part of the amendments.
While management does not believe that the decrease in
availability under the line of credit will impact ongoing
operations, the reduced availability may limit the Company's
ability to pursue part of its planned expansion into additional
markets. Accordingly, the Company will be exploring other
financing alternatives.
A full-text copy of the Company's amended loan agreement is
available at no charge at:
http://www.sec.gov/Archives/edgar/data/1227167/000104746905000277/a2149621z8-k.htm#toc_de1023_1
In its Form 10-Q for the quarterly period ended Sept. 30, 2004,
filed with the Securities and Exchange Commission, Centennial
Specialty Foods said it has $500,000 of preferred stock dividends
in arrears as its board of directors did not declare any preferred
stock dividends for the three months ended June 30, 2004, or the
three months ended September 30, 2004, in order to preserve the
Company's consolidated net worth. The preferred stock dividends
will be placed in arrearage as they are cumulative dividends;
however, its board of directors will not declare and it will not
pay any preferred stock dividends until it has adequate
consolidated net worth to maintain its consolidated net worth
covenant with the Company's bank.
About the Company
Centennial Specialty Foods Corporation is a distributor of ethnic
Southwestern food products. Its products are sold under the
Stokes and Ellis labels, two well-known Southwestern brands that
date back almost 100 years. Principal channels of distribution
for Centennial's products are grocery retailers, superstores and
club stores in Colorado, Arizona, California and, to a lesser
extent, several major metropolitan markets in adjoining states.
More information about Centennial can be found on its Web site at
http://www.centennialspecialtyfoods.com/
CHEMICAL DISTRIBUTION: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Chemical Distribution
240 Foster Avenue
Bensenville, Illinois 60106
Bankruptcy Case No.: 05-00970
Chapter 11 Petition Date: January 12, 2005
Court: Northern District of Illinois (Chicago)
Judge: Bruce W. Black
Debtor's Counsel: John A Lipinsky, Esq.
Coman & Anderson, P.C.
2525 Cabot Drive, Suite 300
Lisle, Illinois 60532
Tel: (630) 428-2660
Estimated Assets: $0 to $50,000
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 Largest Unsecured
Creditors.
CMS ENERGY: Fitch Rates $150 Million Senior Note Due 2012 'B+'
--------------------------------------------------------------
Fitch assigned a 'B+' rating to CMS Energy Corp.'s $150 million
issuance of 6.30% senior unsecured notes, due 2012. Proceeds from
the issuance will be used to refinance higher cost debt and for
general corporate purposes. The Rating Outlook is Positive.
The current ratings for CMS take into consideration the reduced
business risk, improved access to capital markets, and lower
levels of parent and consolidated debt as a result of management
actions over the past two years. The ratings also recognize CMS'
ownership of a regulated utility, Consumers Energy (Consumers,
senior secured rating of 'BBB-', Stable Outlook by Fitch). CMS is
strongly dependent on cash flow from Consumers to service parent
debt obligations. Consumers benefits from relatively stable and
predictable cash flows, as well as sound electric and gas
distribution franchises.
Additionally, Fitch views the regulatory environment in Michigan
to be relatively constructive, as evidenced by recent final orders
from the Michigan Public Service Commission -- MPSC -- on several
rate proceedings. These orders are expected to have a slightly
positive impact on the utility.
The Positive Outlook for CMS reflects the improvement in CMS'
financial profile due to lower parent debt levels and an improved
liquidity position, with no material debt maturities through 2006.
Events that could result in further positive rating action include
the ability to demonstrate continued improvement in the ratio of
consolidated debt to cash flow from operations and further parent
debt reduction. Events that could adversely affect ratings
include credit deterioration at Consumers or the inability to
refinance maturing CMS parent debt. Fitch notes that CMS will be
dependent on additional asset sales or accessing capital markets
to refinance a part of the sizable debt maturing 2007 and 2008,
when $468 million and $410 million of parent debt becomes due,
respectively.
On Jan. 12, 2005, CMS announced it will record a $45 million
pretax, $29 million after-tax, liability for its environmental
obligations associated with the Bay Harbor development project in
the fourth quarter of 2004. Bay Harbor is a
residential/commercial real estate project developed on the site
of a discontinued cement plant and quarry operation in Michigan.
CMS sold its interest in Bay Harbor in October 2002 but retained
the environmental responsibilities of the project.
Environmental issues surrounding the project primarily relate to
the level of pH in the near-by Lake Petoskey. Additionally, CMS
announced that it will record an impairment charge of $19 million,
net of deferred income taxes, in the fourth quarter of 2004,
related to the sale of GVK Industries Ltd. in India. CMS
announced the sale of its 33% interest in the GVK facility, a 240
mw power plant, in February 2004 for approximately $25 million.
Additionally, Consumers recently announced that the Palisades
nuclear plant had an unscheduled outage due to a vacuum reduction
in the main condenser. The company is in the process of
determining the specific source of the vacuum reduction; once the
source has been identified, any necessary repairs are expected to
be made within several days and the plant will return to service
shortly thereafter.
Consumers has also taken Unit 3 of the Campbell Plant offline to
repair what is believed to be a tube leak in the super heater
portion of the boiler. The company expects the leak to be
repaired within a week after determining the source of the leak.
Consumers expects to have sufficient power at all times to meet
its load requirements from its other plants and from purchase
arrangements. These arrangements could increase the cost of power
by an estimated $1.1 million (pretax) per day in the aggregate, of
which approximately $440,000 per day is not recoverable from
ratepayers.
CMS is a utility holding company whose primary subsidiary is
Consumers, a regulated electric and gas utility serving more than
3.4 million customers in western Michigan. CMS also has
operations in natural gas pipelines and independent power
production.
DEL MONTE: Subsidiary Contemplates Private Debt Placement
---------------------------------------------------------
Del Monte Foods Company's (NYSE: DLM) wholly-owned subsidiary Del
Monte Corporation is considering a private placement of senior
subordinated notes. The proceeds of the New Notes, if issued,
would be used, together with borrowings under a contemplated new
or amended senior secured credit facility, to purchase any or all
of Del Monte's outstanding 9-1/4% senior subordinated notes due
2011 which are tendered pursuant to the cash tender offer and
consent solicitation commenced by Del Monte on Jan. 10, 2005, with
respect to the Existing Notes.
This announcement does not constitute an offer to sell or the
solicitation of an offer to buy the New Notes, nor does it
constitute an offer to buy or the solicitation of an offer to sell
the Existing Notes. The New Notes will not be registered under
the Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or an applicable
exemption from registration requirements.
Del Monte Foods Company, with revenues of $3.2 billion, has
headquarters in San Francisco, California. The company's senior
implied rating is Ba3 with a stable outlook.
* * *
As reported in the Troubled Company Reporter on Dec. 22, 2004,
Moody's Investors Service downgraded Del Monte Foods Company's
speculative grade liquidity rating to SGL-2 from SGL-1 due to the
scheduled tightening of financial covenants in July 2005. The
SGL-2 rating indicates good liquidity. Moody's also affirmed Del
Monte's Ba3 senior implied rating and stable outlook.
Moody's expects Del Monte to generate significant free cash flow
over the next twelve months, which the company could direct to
term debt repayment, share repurchases, and acquisitions. Due to
seasonality, the company relies on its revolver on an interim
basis during the year, with utilization typically at a low in
May/June and peaking in Sept/Oct, during the harvest and packing
season, after which utilization quickly decreases. Del Monte's
$300 million revolving credit commitment provides an adequate
cushion of unused revolver availability to meet peak working
capital needs. The SGL rating could be raised again if additional
debt paydown and earnings improvement enhance covenant cushions
under the tighter required levels beginning in July 2005. Given
the seasonal nature of its cash flow, the company's maintenance of
a solid liquidity position is an important factor for its
long-term ratings and outlook (Ba3 senior implied with a stable
outlook).
Del Monte generates relatively stable and predictable operating
cash flow. The company benefits from product diversity across
several food categories with relatively stable consumption trends,
well-known brands, and leading shares in most of its product
categories. Operating cash flow after capital spending (about
$188 million in the LTM ending 10/31/05) is expected to remain
strong despite cost pressures. Required debt amortization is
limited over the next twelve months ($6 million). Working capital
will be a material source of cash in the next six months, but the
company's working capital is highly seasonal due to the annual
crop cycle, so the company will likely need to draw on its
revolver in the autumn to fund a seasonal working capital build.
At 1/25/04, $142 million was drawn under the revolver and about
$50 million of the commitment was utilized for letters of credit,
leaving over $100 million of availability at seasonally high time
of usage. The $300 million revolver matures in 2008. The
company's cushion under financial covenants has been comfortable,
but covenants tighten in F1Q06 (ending Jul 2005), which would
leave a narrower cushion unless debt is paid down and earnings
increase. Del Monte's business diversity provides some scope to
sell assets without impairing remaining assets and enterprise
value, but the assets are largely encumbered.
ELCOM INT'L: Gets Preferred Bidder Status for eMarketplace System
-----------------------------------------------------------------
Elcom International, Inc. (OTC Bulletin Board: ELCO and AIM: ELC
and ELCS), is one of the sub-contractors to PA Consulting Group,
which the Office of Government Commerce has named as the Preferred
Bidder for the creation and deployment of the OGC's Zanzibar
eMarketplace for U.K. public sector organizations. PA is the
envisaged primary contractor with Preferred Bidder status with
Elcom providing the eProcurement and eMarketplace components of
the Zanzibar eMarketplace system.
Preferred Bidder status means that OGC will negotiate exclusively
with PA in respect to a framework agreement targeted to be in
place by the end of February. However, Preferred Bidder status is
at all times contingent on the successful negotiation of the terms
of the framework agreement and the status can be withdrawn by OGC
at its absolute discretion. Accordingly there can be no assurance
that these negotiations will be successful and a framework
agreement consummated. Assuming negotiations are concluded
satisfactorily with the OGC, Elcom expects to execute a back-to-
back contract with PA for the OGC Zanzibar system directly after
the framework agreement is signed.
Robert J. Crowell, Elcom International's Chairman and CEO, said,
"We are extremely pleased to be the eMarketplace and eProcurement
solution provider to the PA consortium that has been selected as
Preferred Bidder for the OGC Zanzibar eMarketplace system. This
is a very large and sophisticated system which will allow all
public sector organizations in England to participate in the OGC
sponsored Zanzibar eMarketplace without having to go out to
tender. We look forward to working closely with PA and the other
members of the consortium to make Zanzibar a system that delivers
quantifiable savings and other benefits to all participants and
thereby serve the public good in the U.K."
Zanzibar will provide a 'Procure to Pay' Marketplace, including an
eHub (data warehouse, single point of access to the government
marketplace for buyers and suppliers), hosted common and
individual catalogues and punch out to catalogues as well as non-
catalogue transactions. Zanzibar will be an OGCbuying.solutions
Framework Agreement and run as a Managed Service on behalf of
Government Departments and Agencies, which are expected to join as
individual agencies.
About the Office of Government Commerce
OGCbuying.solutions is an Executive Agency of the U.K.
Government's Office of Government Commerce, which is part of the
Treasury ministry. Our role is to deliver value for money gains
for central civil government and the wider public sector through
our dedicated, professional procurement service.
We provide our customers with a full range of products and
services designed to encourage effective procurement, achieve
measurable cost savings and improve the efficiency of the
purchasing function throughout the public sector.
About PA Consulting Group
PA Consulting Group -- http://www.paconsulting.com/-- is a
leading management, systems and technology consulting firm.
Operating worldwide in more than 35 countries, PA draws on the
knowledge and experience of 3,000 people, whose skills span the
initial generation of ideas, insights and solutions all the way
through to detailed implementation.
PA focuses on creating benefits for clients rather than merely
proposing them. Our work is founded on powerful insights into our
clients' issues, and in the private sector in particular, on the
need to deliver superior shareholder returns. We help accelerate
business growth by developing innovative products for our clients
and by the application of emerging technology. We deliver major
transformation programs, mobilize human resources, and manage
complex IT and technically-challenging programs.
PA's results-focused approach is founded on a unique commitment to
excellence, value and independence.
About Elcom International, Inc.
Elcom International, Inc. (OTC Bulletin Board: ELCO and AIM: ELC
and ELCS) -- http://www.elcominternational.com/-- operates elcom,
inc., an international B2B Commerce Service Provider offering
affordable solutions for buyers, sellers and commerce communities
to conduct business online. PECOS, Elcom's remotely-hosted
flagship solution, enables enterprises of all sizes to achieve the
many benefits of B2B eCommerce without the burden of
infrastructure investment and ongoing content and system
management.
At Sept. 30, 2004, Elcom International's balance sheet showed a
$1,927,000 stockholders' deficit, compared to a $2,722,000 deficit
at Dec. 31, 2003.
EXIDE TECH: Soros Entities Disclose 6.3% Equity Stake
-----------------------------------------------------
In a Schedule 13D filing with the Securities and Exchange
Commission dated January 11, 2005, Soros Fund Management, LLC,
and George Soros jointly disclose that they each beneficially own
1,522,300 shares of Exide Technologies Common Stock, representing
a 6.3% equity stake in Exide Technologies.
Request for a Meeting
In connection with their ongoing evaluation of the investment in
Exide and their options with respect to that investment, the
Soros Entities have decided to seek to meet with the Company's
board of directors and members of senior management to indicate
their views on issues relating to the strategic direction
undertaken by the Issuer and other matters of interest to
stockholders generally.
On January 11, 2005, in furtherance of its efforts to meet with
the Company's board of directors, SFM LLC sent a letter to Exide:
Soros Fund Management LLC
888 Seventh Avenue
33rd Floor
New York, New York 10106
January 11, 2005
Board of Directors
Exide Technologies
Crossroads Corporate Center
3150 Brunswick Pike, Suite 230
Lawrenceville, New Jersey 08648
Gentlemen:
As the principal investment manager of one of Exide Technologies'
largest stockholders, we are writing to request a meeting with
members of the Board of Directors of Exide, which we believe
should include both Mr. Craig H. Muhlhauser, Exide's President
and Chief Executive Officer, and Mr. John P. Reilly, Exide's
Chairman. We stand ready to meet immediately, and would like to
do so as soon as possible, wherever and whenever is most
convenient for the directors who will attend.
The composition of Exide's Board of Directors and the status of
senior management and succession planning, particularly in light
of the pending departure of Mr. Muhlhauser, are among the issues
that we think it is essential to address. We are acquainted with
a number of well-qualified professionals who we believe could add
substantial value to the Board's deliberations and functioning
and who we believe are qualified to succeed Mr. Muhlhauser. We
would also like to discuss with you potential strategic
initiatives to enhance stockholder value.
We believe these are important matters and hope the Board of
Directors will respond positively to this opportunity to gain the
perspective of, and work constructively with, one of Exide's
largest stockholders to enhance stockholder value and improve
stockholder confidence in Exide's corporate governance.
We look forward to hearing from you promptly.
Very truly yours,
/s/ Richard Brennan
Richard Brennan
Director
Soros Fund Management LLC
Headquartered in Princeton, New Jersey, Exide Technologies is the
worldwide leading manufacturer and distributor of lead acid
batteries and other related electrical energy storage products.
The Company filed for chapter 11 protection on April 14, 2002
(Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and
Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors
in their restructuring efforts. Exide's confirmed chapter 11 Plan
took effect on May 5, 2004. On April 14, 2002, the Debtors listed
$2,073,238,000 in assets and $2,524,448,000 in debts. (Exide
Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FAIRCHILD SEMICONDUCTOR: Cuts Debt with Call of Sr. Sub. Notes
--------------------------------------------------------------
Fairchild Semiconductor (NYSE: FCS) has given notice to call all
of the company's $350 million in 10-1/2% Senior Subordinated Notes
due in 2009 using approximately $213.9 million in cash plus
approximately $154.5 million in proceeds from its newly amended
senior credit facility. Based on LIBOR rates, Fairchild expects
the refinancing to reduce the company's annual interest expense by
approximately $33 million and cut the company's debt by
approximately $200 million.
"This refinancing represents another major achievement toward our
goal of reducing debt and interest expenses," said Matt Towse,
Fairchild's senior vice president and chief financial officer.
"In just seven years since our spinout, Fairchild has matured from
a heavily leveraged, new company financed primarily with high
yield notes to a focused, power semiconductor market leader with
solid cash flow, free of high yield debt, and able to successfully
access lower cost financing. Since 2001, we have cut our debt by
almost $500 million and reduced annual interest expenses by
approximately $80 million. Based on current LIBOR rates, our net
interest savings from this refinancing should equate to
approximately $0.13-$0.15 in annual earnings per share and should
strengthen our cash flow going forward."
The call premium for the 10-1/2% notes is 5.25% over par.
Fairchild will incur cash expense of approximately $19.4 million
in the first quarter of 2005 for the call premium plus refinancing
fees and will record a non-cash charge of approximately $5.6
million for the write-off of deferred financing fees associated
with the redeemed notes. The amended $630 million senior credit
facility which includes a new six-year term B-3 loan of $450
million, replacing the previous $300 million term B-2 loan, and
retains a $180 million revolving line of credit, which remains
undrawn.
The company expects the call of the senior subordinated notes to
close in February and expects to see the favorable impact of lower
interest expense in the second quarter of 2005.
About Fairchild Semiconductor
Fairchild Semiconductor (NYSE: FCS) is the leading global supplier
of high performance power products critical to today's leading
electronic applications in the computing, communications,
consumer, industrial and automotive segments. As The Power
Franchise(R), Fairchild offers the industry's broadest portfolio
of components that optimize system power through minimization,
conversion, management and distribution functions. Fairchild's
9,000 employees design, manufacture and market power, analog &
mixed signal, interface, logic, and optoelectronics products from
its headquarters in South Portland, Maine, USA and numerous
locations around the world. Please contact us on the Web at
http://www.fairchild.com/
* * *
In its Form 10-K for the fiscal year ended December 28, 2003,
filed with the Securities and Exchange Commission, Fairchild
Semiconductor International Inc. reports:
"Our historical financial results have been, and our future
financial results are anticipated to be, subject to substantial
fluctuations. We cannot assure you that our business will
generate sufficient cash flow from operations, that currently
anticipated cost savings and operating improvements will be
realized on schedule or at all, or that future borrowings will be
available to us under our senior credit facility in an amount
sufficient to enable us to pay our indebtedness or to fund our
other liquidity needs. In addition, because our senior credit
facility has variable interest rates, the cost of those borrowings
will increase if market interest rates increase. If we are unable
to meet our expenses and debt obligations, we may need to
refinance all or a portion of our indebtedness on or before
maturity, sell assets or raise equity. We cannot assure you that
we would be able to refinance any of our indebtedness, sell assets
or raise equity on commercially reasonable terms or at all, which
could cause us to default on our obligations and impair our
liquidity. Restrictions imposed by the credit agreement relating
to our senior credit facility and the indenture governing
Fairchild Semiconductor Corporation's 10-1/2% Senior Subordinated
Notes restrict or prohibit our ability to engage in or enter into
some business operating and financing arrangements, which could
adversely affect our ability to take advantage of potentially
profitable business opportunities."
Moody's Investor Services, Inc., rates the 10-1/2% Senior
Subordinated Notes at B2. Standard & Poor's and Fitch Ratings
give their single-B ratings to the 10-1/2% Notes.
FAIRPOINT COMMS: Moody's Lifts Senior Implied Rating From B2 to B1
------------------------------------------------------------------
Moody's Investors Service upgraded FairPoint Communications,
Inc.'s senior implied rating to B1 from B2, as a result of the
Company's planned recapitalization, consisting of a $475 million
Initial Public Offering and new bank credit facility. Moody's
also assigned a B1 rating to FairPoint's proposed $690 million
senior secured bank credit facility. The rating outlook has been
changed from negative to stable.
Moody's has taken these rating actions:
-- Assigned a B1 to proposed $100 million senior secured
revolving credit facility due in 2011
-- Assigned a B1 to proposed $590 million senior secured term
loan due in 2012
-- Upgraded Senior Implied rating to a B1 from a B2
-- Affirmed Senior Unsecured issuer rating at B3
Due to Fairpoint Communications' decision to abandon its
previously proposed IDS offering, the ratings on existing debt
will be withdrawn:
-- $225 million 11.875% Global Notes due in 2010 formerly B3
-- $125 million 9.5% Sr. Sub Notes due in 2008 formerly Caa1
-- $75 million Floating Rate Note due in 2008 formerly Caa1
-- $200 million 12.5% Sr. Sub. Global Notes due in 2010
formerly Caa1
-- $95 million Gtd. Sr. Sec. Revolving Credit Facility maturing
in 2007 formerly B1
-- $40 million Gtd. Sr. Sec Term Loan A maturing in 2007
formerly B1
-- $139 million Gtd. Sr. Sec. Term Loam C maturing in 2007
formerly B1
The ratings associated with FairPoint's proposed IDS will be
withdrawn:
-- $100 million Gtd. Sr. Sec. Revolving Credit Facility
maturing in 2011 formerly B2
-- $350 million Gtd. Sr. Sec Term Loan B maturing in 2009
formerly B2
Moody's expects that the proceeds from the initial public offering
and new bank credit facility will be used to retire all of
FairPoint Communications' existing long-term debt. The rating
action generally reflects the company's improved credit metrics
although Moody's believes the positive benefits of the
deleveraging are substantially offset by the impact of the
company's planned dividend.
On a pro-forma basis for the 2005, Moody's estimates that
FairPoint Communications' net debt to EBITDA falls to 4.3 times
(compared to a LTM 9/30/04 of 5.9 times), and fixed charge
coverage (EBITDA-CAPEX)/Int.Exp., improves to 2.2 times from 1.5
times. In addition to improving financial metrics, FairPoint will
also benefit from lower interest expenses and proven access to the
public equity market, which may prove to be a future source of
secondary liquidity.
The upgrade also reflects Moody's belief that this transaction
embodies a less aggressive financial policy relative the Fairpoint
Communications' former IDS pursuit, in so far as the company will
retain at least a portion of its free cash flow. The ratings are,
however, constrained because of the relatively high dividend
payout ratio the company plans to adopt. Moody's believes that a
sustained high dividend is likely to impair the Company's long-
term competitive position and ability to undertake acquisitions or
other strategic opportunities.
With the abandonment of the proposed IDS structure the ratings
outlook has been changed back to stable reflecting Moody's
expectation that FairPoint Communications will continue to
generate stable pre-dividend free cash flow, and that the
competitive and regulatory environment translates to low business
risk in the RLEC sector. If FairPoint achieves sustained
improvement in its operations, leverage and interest coverage such
that EBITDA margins exceed 52%, free cash flow relative to net
debt exceeds 3%, fixed charge coverage (measured as EBITDA-CAPEX/
Int.exp) surpasses 2.5 times, or debt per access line drops below
$1,800, ratings could improve.
Similarly, if operating margins and free cash flow after dividends
consistently deteriorates or if leverage approaches the dividend
suspension levels as defined in the bank credit agreement, the
ratings are likely to fall. In addition, if FairPoint chooses to
pursue an acquisition that meaningfully reduces its available
liquidity, the ratings are very likely to deteriorate.
As part of this recapitalization, FairPoint Communications will
replace all of its long term financing with a single senior
secured back credit facility. Because this facility will
represent close to 100% of FairPoint's outstanding debt, Moody's
views the instrument's risk profile as equivalent to that of the
company as a whole and has not notched it above the senior implied
rating.
The facility benefits from security as well as guarantees from the
Company's several intermediate holding companies. In Moody's
opinion, the fact that the RLEC operating companies will not
guarantee the debt only slightly increases the risk of potential
structural subordination. Moody's believes that the same
regulatory requirements that inhibit the operating companies from
offering security to the senior credit agreement will also make it
extremely unlikely that they would issue debt structurally senior
to the proposed bank credit facility extended to FairPoint.
Moody's believes that, given FairPoint Communications' regulatory
and competitive environment are favorable, the company will
continue to generate stable free cash flow, and that after
dividends and capital expenditures, FairPoint should generate free
cash flow of at least $15 million per year. While Moody's does
not expect FairPoint to reduce its debt in the intermediate term,
refinancing risk will increase unless FairPoint reduces leverage
through increased cash flow generation over time.
Moody's believes that FairPoint Communications will be able to
comfortably meet its short-term financial obligations as well as
withstand unexpected operational shortfalls with its proposed
current sources of liquidity. FairPoint's liquidity is fairly
strong, characterized by substantial pre-dividend free cash flow
and $100 million of unused availability under its revolving credit
facility.
FairPoint's strong pre-dividend free cash flow supports the
company's ability to withstand market shocks, thus supporting
long-term ratings. While Moody's is concerned that the Company's
high dividend payout ratio may erode the Company's long-term
competitive flexibility and, hence, constrains long-term rating,
Moody's believes that the dividend suspension covenant in the bank
credit facility that restricts dividend payments should leverage
exceed 5.0 times affords the senior lenders meaningful credit
protection and should provide the company with an important source
of secondary liquidity.
FairPoint Communications, Inc., is a rural local exchange
consolidator headquartered in Charlotte, North Carolina, servicing
approximately 273 thousand access line equivalents at 9/30/04. It
currently operates 26 RLEC's in 17 states.
FEDERAL-MOGUL: Court Approves Ernst & Young's Modified Employment
-----------------------------------------------------------------
Out of an abundance of caution, Federal-Mogul Corporation and its
debtor-affiliates ask the United States Bankruptcy Court for the
District of Delaware to approve Ernst & Young, LLP's modified
employment to include five additional services:
(a) Audit and report on the financial statements and
supplemental schedules of the Federal-Mogul Corporation
Employees' Investment Program and the Federal-Mogul
Corporation 401(k) Investment Program for the year ended
December 31, 2003. The fees for those services will be
fixed at $40,000, plus reimbursement of actual out-of-
pocket expenses;
(b) Audit and report on the financial statements and
supplemental schedules of the Federal-Mogul Corporation
Salaried Employees' Investment Program for the year ended
December 31, 2003. The fees for those services will be
fixed at $5,000, plus reimbursement of actual expenses;
(c) Phase 2a of certain previously approved international tax
consulting services relating to the intercompany transfer
pricing policy for intangible assets. Pursuant to Phase
2a of the intercompany transfer pricing project, Ernst &
Young will:
(1) review global R&D activities to identify possible
country locations of an IP Management Company;
(2) calculate buy in royalty and lump sum purchases:
-- identify any IP that should not be transferred or
sold;
-- develop and test royalty and buy in model;
-- model each country's buy in and royalty transfer
price;
-- evaluate buy in method by country;
-- determine royalty buy-in, lump sum buy-in,
prospective buy-in, or capital contribution
amounts;
(3) perform R&D allocation analysis under Section 861 of
the Internal Revenue Code; and
(4) prepare appropriate transfer pricing documentation.
The fees for Phase 2a of the intercompany transfer pricing
project, which are estimated to total $175,000, will be
billed based on Ernst & Young's hourly billing rates:
Partner $500 - $600
Senior Manager $400 - $450
Manager $350 - $400
Senior $200 - $250
Staff $150 - $200
(d) Audit and report on the consolidated financial statements
of Federal-Mogul Corporation for the year ending
December 31, 2004, including reviewing FM's unaudited
interim financial information before FM files its 10-Q,
and examining and reporting on whether management's
assertion about the effectiveness of FM's internal control
over financial reporting as of December 31, 2004, is
fairly stated, in all material respects, based on suitable
control criteria. Based on certain assumptions, the fees
for the audit of the 2004 consolidated financial
statements and review of the unaudited interim financial
information will be $1,520,000, plus reimbursement of
actual out-of-pocket expenses, and the fees for the
examination of and reporting on management's assertion
about the effectiveness of internal control over financial
reporting will be $1,065,000, plus reimbursement of actual
out-of-pocket expenses;
(e) Report on the consolidated financial statements of:
* Federal-Mogul Products, Inc.;
* Federal-Mogul Ignition Company; and
* Federal-Mogul Powertrain, Inc.,
and audit and report on the financial statements of
Federal-Mogul Piston Rings, Inc., for the year ending
December 31, 2004.
The fee for reporting on the 2004 consolidated financial
statements of FM Products and FM Ignition will be $75,000,
plus reimbursement of actual out-of-pocket expenses.
The fee for the report on the consolidated financial
statements of FM Powertrain will be $53,000, plus
reimbursement of actual out-of-pocket expenses.
The fee for the audit and report on the financial
statements of FM Piston Ring will be $45,000, plus
reimbursement of actual out-of-pocket expenses.
David M. Sherbin, Federal-Mogul Corporation's Senior Vice
President, General Counsel and Secretary, tells the Court that the
majority of services are merely continuations of services already
performed by Ernst & Young under previously approved engagement
letters.
A portion of the proposed services cover Ernst & Young's examining
and reporting on whether management's assertion about the
effectiveness of the Debtors' internal control over financial
reporting as of December 31, 2004, is fairly stated, in all
material respects based on suitable control criteria. This
examination will be used for the purpose of issuing a report on
management's assertion about the effectiveness of the Debtors'
internal control over financial reporting, as required by Section
404 of the Sarbanes-Oxley Act of 2002. Although Ernst & Young has
not previously performed those precise services for the Debtors,
Mr. Sherbin asserts that those services fit within the general
retention of Ernst & Young as accounting, tax, valuation and
actuarial advisors.
Ernst & Young Partner Kevin F. Asher assures the Court that the
firm does not represent any interest adverse to the Debtors and
will not represent any entity other than the Debtors in connection
with the bankruptcy cases. Mr. Asher attests that Ernst & Young
is a "disinterested person" under Section 101(14) and as required
by Section 327(a) of the Bankruptcy Code.
Mr. Sherbin believes that Ernst & Young's fees are reasonable.
Based on the firm's prior work for and their familiarity with the
Debtors and their businesses, the Debtors believe that Ernst &
Young is well qualified and able to provide the additional
services in a cost-effective, efficient, and timely manner.
U.S. Trustee Objects
Representing the U.S. Trustee, Richard L. Schepacarter, Esq., in
Wilmington, Delaware, points out that in accordance with the
Sarbanes-Oxley Act of 2002, Ernst & Young maybe prohibited from
performing certain services. Section 201 of the Act provides that
an auditor may not provide contemporaneously with the audit, non-
audit services like ". . . (3) appraisal or valuation
services, . . . ; (4) actuarial services; . . . ."
"In this case, it would appear that E&Y is an auditor for the
Debtors and is contemporaneously performing other non-audit
services," Mr. Schepacarter contends. "E&Y seeks to perform those
services as required under Section 404 of the Act, which it does
not appear to be enabled to perform."
Thus, Roberta A. DeAngelis, Acting United States Trustee for
Region 3, asks the Court to deny the Debtors' request.
* * *
Judge Lyons approves Ernst & Young's modified employment and
authorizes Ernst & Young to perform the Additional Services.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion. The Company filed for chapter 11 protection on
October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J.
Nyhan, Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at
Sidley Austin Brown & Wood, and Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $10.15 billion in
assets and $8.86 billion in liabilities. (Federal-Mogul
Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FEDERAL-MOGUL: Asbestos PD Committee Hires Navigant as Consultant
-----------------------------------------------------------------
Daniel A. Speights, Co-Chairman of the Official Committee of
Asbestos Property Damage Claimants, relates that valuation of
asbestos bodily injury claims is a critical aspect of the plan
process in Federal-Mogul Corporation and its debtor-affiliates'
Chapter 11 cases. Under the Plan of Reorganization, recovery for
asbestos property damage creditors is tied to the projected value
of asbestos bodily injury claims under the proposed trust
distribution procedures. Moreover, under the proposed Plan, each
creditor and equity holder constituency represented by the Plan
Proponents actually stands to gain from a higher estimate of
bodily injury claims.
In the face of complete acquiescence by the Plan Proponents to
the Asbestos Claimants Committee's estimate of bodily injury
claims, it is critical that the Property Damage Committee has the
services of Navigant Consulting, Inc., available to it to
adequately represent the interests of property damage creditors.
No statutory committee other than the PD Committee opposes the
estimate of bodily injury claims. Accordingly, the work Navigant
Consulting will perform will not be duplicative of work performed
by any other professional.
By this application, the PD Committee seeks permission from the
United States Bankruptcy Court for the District of Delaware to
employ Navigant Consulting, nunc pro tunc to October 26, 2004,
to serve as its asbestos claims consultant.
Specifically, Navigant will:
(a) estimate occupational exposures to the Debtors' products;
(b) estimate the incidence of injury from occupational
exposure;
(c) estimate claim filing by disease;
(d) estimate the Debtors' liability for pending and future
asbestos claims;
(e) review and evaluate analyses and reports of the Debtors'
claim experts;
(f) testify in Court on the PD Committee's behalf, if
necessary; and
(g) perform any other necessary services as PD Committee or
the PD Committee's counsel may request from time to time
with respect to any asbestos-related issue.
Navigant Consulting estimates that the fees for its services to
the PD Committee are likely to range from $90,000 to $156,000,
exclusive of time spent in connection with any deposition and
hearing testimony that may be necessary. This estimate assumes
that the current plan schedule is not extended.
Navigant Consulting will be paid on an hourly basis:
Managing Director $375 - $550
Director $350 - $400
Associate Director $280 - $350
Managing Consultant $250 - $300
Senior Consultant $160 - $250
Consultant $150 - $175
Navigant Consulting includes direct labor costs, fringe benefits,
overhead and fees in its hourly rates. The rates do not include
out-of-pocket expenses, like travel, long distance telephone
calls, messenger service, express mail, bulk mailings,
photocopies or entertainment.
Robin Cantor, a director at Navigant Consulting, assures the
Court that the firm does not have or represent any interest
materially adverse to the interests of the Debtors or their
estates, creditors or equity interest holders and has no material
connections to the Debtors or potential parties-in-interest.
Navigant Consulting is a "disinterested person," as that term is
defined in Section 101(14) of the Bankruptcy Code.
Plan Proponents Respond
Navigant Consulting estimates that its services will cost between
$90,000 and $156,000. The Plan Proponents propose that
Navigant's fee be capped at the upper end of the estimate --
$156,000.
Eric M. Sutty, Esq., at The Bayard Firm, in Wilmington, Delaware,
contends that capping Navigant Consulting's fees, at the high end
of its own estimate will help avoid unnecessary costs to the
Debtors' estates and to ensure that Navigant Consulting's
services are not redundant of others' work. Despite the PD
Committee's reservation that the estimate assumes the current
plan schedule remains intact, Mr. Sutty asserts that the cap
ought to control regardless of whether there is any disruption in
the current plan schedule.
Navigant Consulting's work should be the same irrespective of the
plan schedule. If a schedule change or other circumstances
warrant an expansion of Navigant Consulting's services, the PD
Committee is always free to seek a modification of Navigant
Consulting's retention terms from the Court.
* * *
Judge Lyons approves Navigant Consulting's retention, nunc pro
tunc to October 26, 2004. Navigant Consulting's fees will be
limited to $156,000, exclusive of fees generated by Navigant
Consulting with respect to deposition and hearing testimony.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion. The Company filed for chapter 11 protection on
October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J.
Nyhan, Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at
Sidley Austin Brown & Wood, and Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $10.15 billion in
assets and $8.86 billion in liabilities. (Federal-Mogul
Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FRANK'S NURSERY: Delays Bankruptcy-Approved Real Property Sales
---------------------------------------------------------------
Frank's Nursery & Crafts, Inc. (OTCBB:FNCN), which filed for
Chapter 11 bankruptcy protection in the Bankruptcy Court for the
Southern District of New York on Sept. 8, 2004, said that although
the Bankruptcy Court had previously granted the Company's motion
for approval of procedures for the conduct of auction sales for
its owned real estate to be held in February, it has determined
not to conduct sales of its owned locations at this time.
The Company is discussing with representatives of its secured
lender and the official committee of unsecured creditors appointed
in its Chapter 11 case terms of a proposed plan of reorganization
which would contemplate either retention or sale of all or a
portion of its real property holdings.
The Company has concluded an orderly wind-down of its store
operations by completing going out of business sales at its
locations and has also sold or rejected substantially all of its
leasehold interests.
Headquartered in Troy, Michigan, Frank's Nursery & Crafts, Inc.,
operated the largest chain (as measured by sales) in the United
States of specialty retail stores devoted to the sale of lawn and
garden products. Frank's Nursery 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 Nursery 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, represents the Debtor. In the
Company's second bankruptcy filing, it listed $123,829,000 in
total assets and $140,460,000 in total debts.
FRIEDMAN'S INC: Files for Chapter 11 Protection in S.D. Georgia
---------------------------------------------------------------
January 15, 2005 / PR Newswire
Friedman's Inc. (OTC: FRDM.PK), filed on Jan. 14, 2005, voluntary
petitions for reorganization under chapter 11 along with nine of
its subsidiaries to alleviate its short-term liquidity issues,
continue its ongoing restructuring initiatives and facilitate the
Company's turnaround. The Company said the filing should provide
the Company with the breathing room necessary to complete
financial restructuring initiatives the Company embarked upon more
than five months ago. The Company filed its petitions in
Savannah, Georgia, where its executive headquarters are located
and where the first Friedman's store was opened in the 1920's when
Friedman's began as a small, family owned retailer called
Friedman's Jewelers.
The filing was prompted by limitations imposed on funding by the
Company's lenders following the lenders' decision not to agree to
amended financial covenants in the Company's credit facility. As
a result of the funding limitations, Friedman's was unable to
satisfy all of its cash requirements in the ordinary course of
business. The amendment had been necessitated because delayed
receipts of inventory shipments to the Company during the 2004
holiday season and the implementation of more prudent credit
practices had a negative impact on its holiday season sales and
contributed to the Company not meeting December, 2004 minimum
sales covenants in its credit facility. On Friday, the Collateral
Trustee under the Company's Secured Trade Credit Program with the
Company's vendors delivered a notice of program default to the
Company after the lenders declined the written request of the
informal vendors committee to resume ordinary course funding of
the Company. The program default permits the Company's vendors to
discontinue shipments to Friedman's and retain their interests in
a trade creditor lien earlier granted by the Company to the
vendors.
Chief Executive Officer Sam Cusano said, "By availing ourselves of
the Chapter 11 process now, Friedman's expects that our vendors
will resume shipping inventory in anticipation of the upcoming
Valentine's Day holiday."
Chapter 11 Financing
As a result of the timing of the filing necessitated by the
funding limitations imposed by the Company's lenders, the Company
has not yet obtained a debtor-in-possession (DIP) financing
facility. However, the Company said that it had received two DIP
financing proposals this week and anticipated receiving additional
financing proposals over the holiday weekend. The Company said
that it is actively engaged in discussions with its existing and
prospective lenders, and is hopeful that a DIP financing agreement
will be finalized and presented to the Court for approval early
next week. In the interim, the Company will ask the Bankruptcy
Court to authorize the Company to use cash collateral which, upon
Court approval, will enable Friedman's to utilize existing cash
and cash generated through normal business operations to fund
post-petition trade and employee obligations. The Company will
seek the approval of its existing lenders for interim use of cash
collateral pending finalization of a DIP financing agreement and
expects to continue negotiations with its lenders regarding the
terms on which the lenders' interest will be adequately protected
during the proceedings.
Employee And Customer Obligations
The Company is seeking Court permission to honor all obligations
to customers including, return privileges, layaways, product
protection plans, gift certificates and other customer programs
during the restructuring period.
"As the restructuring process progresses, neither Friedman's
customers nor employees of its 653 stores should notice any
difference in the chain's operations as a result of the filing.
We expect to be able to provide our customers with as good or
better selection of merchandise and service as before the filing.
Daily operations will continue as usual, our stores will remain
open and transactions which occur in the ordinary course of
business will proceed as usual," Mr. Cusano stated.
"With the protection provided under the Bankruptcy Code for post-
petition purchases, the Company is confident that its suppliers
will continue to support it while the Company completes its
restructuring," Mr. Cusano said.
Putting The Challenges of The Past Behind It
The Company noted that continued disappointing results, a high
debt structure resulting from its explosive growth beginning in
the mid-1990's and continuing over recent years, higher than
anticipated default rates on the Company's customized customer
credit programs, and the cloud of uncertainty hanging over the
Company resulting from pending litigation and ongoing federal
investigations have limited its ability to secure alternate
financing sources.
"Reorganization through the Chapter 11 process will allow the
Company to effectively put the challenges of the past behind it,
and provide Friedman's with a more appropriate capital structure
and sufficient financial resources to help secure our future,
while addressing the litigation facing the Company. Friedman's
strong niche in the jewelry market and its well-deserved-
reputation for fine jewelry at market leading, value prices
continue to provide tremendous opportunity. Chapter 11 is a tool
that will allow us to build upon our core strengths so that we can
emerge as a stronger, financially viable business," Mr. Cusano
concluded.
While the Company requested that usual "first day" motions be
heard early next week, the Company sought and obtained immediate
Court approval on three motions to ensure that store operations
and potential shoppers are not interrupted by the bankruptcy
filing. The interim orders entered by the Court provided that,
customer policies remain in full force including:
-- exchanges, returns and layaways;
-- all outstanding payroll checks be honored; and
-- the current cash management system remain in place.
The Company was extremely pleased that the Bankruptcy Court was
willing to approve these special motions on an interim basis prior
to the official "first day" hearing and looks forward to
presenting the remaining requests next week.
The Company filed its voluntary Chapter 11 petitions in the U.S.
Bankruptcy Court for the Southern District of Georgia, located in
Savannah, where the cases were assigned to the Honorable Lamar W.
Davis. Judge Davis has scheduled a hearing on the Company's first
day motions to commence at 2:00 p.m. tomorrow, January 18, 2005.
As reported in the Troubled Company Reporter on Nov. 4, 2004,
Friedman's Inc. said it anticipated breaching the financial
covenants contained in its amended and restated credit facility.
In particular, Friedman's expected to fail to meet cumulative
EBITDA requirements and a minimum ratio of Accounts Payable to
Inventory. Friedman's senior secured credit facility, entered
into in Sept. 2004, consists of a senior revolving loan of up to
$67.5 million (maturing in 2006) and a $67.5 million junior term
loan (maturing in 2007). Friedman's issued some warrants to
Farallon Capital Management, L.L.C., in connection with that
refinancing transaction.
Friedman's also entered into a secured trade credit program
providing security to vendors. Part of the deal allows Friedman's
to stretch payment of invoices past due in July 2004 through 2005.
The company's most recently published balance sheet -- dated
June 28, 2003 -- shows $496 million in assets and $190 million in
liabilities. The Company explains that its year-end closing
process was delayed because of an investigation by the Department
of Justice, a related informal inquiry by the Securities and
Exchange Commission, and its Audit Committee's investigation into
allegations asserted in a August 13, 2003, lawsuit filed by
Capital Factors Inc., a former factor of Cosmopolitan Gem
Corporation, a former vendor of Friedman's, as well as other
matters. Ernst & Young has been working on a restatement of the
company's financials. The company's signaled that a 17% or
greater increase to allowances for accounts receivable can be
expected.
Headquartered in Savannah, Georgia, Friedman's Inc. --
http://www.friedmans.com/-- is a leading specialty retailer based
in Savannah, Georgia. The Company is the leading operator of fine
jewelry stores located in power strip centers and regional malls.
The Company, along with its subsidiaries, filed for chapter 11
protection on Jan. 14, 2005 (Bankr. S.D. Ga. Case No. 05-40129
through 05-40137).
FUJITA CORP: Judge Smith Confirms Amended Plan of Reorganization
----------------------------------------------------------------
The Honorable Erithe A. Smith of the U.S. Bankruptcy Court for the
Central District of California, Los Angeles Division confirmed the
Amended Plan of Reorganization filed by Fujita Corporation USA.
The Debtor filed its Amended Disclosure Statement and Amended Plan
on October 6, 2004, and the Court approved the adequacy of the
Disclosure Statement on October 7, 2004.
The Amended Plan provides for the sale and disposition of all
assets and properties of the Debtor's Estate and the distribution
of the proceeds to satisfy the outstanding claims and interests
asserted against the Debtor.
The Plan groups claims and interests into five classes and
provides for these recoveries:
a) Class 1 impaired claims consisting of Secured Claims will be
paid in cash after the Effective Date;
b) Class 2 impaired claims consisting of Non-Tax Priority
Claims will be paid in cash after the Effective Date;
c) Class 3 impaired claims consisting of Prepetition Lender
Claims will receive their Pro Rata share of the Net
Available Cash from the excess proceeds of the sale and
disposition of the Debtor's Estate;
d) Class 4 impaired claims consisting of General Unsecured
Claims will receive 5% of the Face Amount of their allowed
claims in cash on the Initial Distribution Date; and
e) Class 5 impaired claims consisting of Old Equity Interests,
Intercompany Claims and Subordinated Claims will not receive
or retain any cash or property under the Plan on account of
those claims and interests.
Full-text copies of the Disclosure Statement and Amended Plan are
available for a fee at:
http://www.researcharchives.com/download?id=040812020022
Headquartered in Culver City, California, Fujita Corporation USA,
owns various real estate investment properties in the United
States. The Company filed for chapter 11 protection on August 5,
2004 (Bankr. C.D. Calif. Case No. 04-27072). Glenn Walter, Esq.,
at Skadden, Arps, Slate, Meagher, LLP, represents the Company in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $4,469,212 in assets and
$111,484,468 in liabilities.
GRAFTECH INT'L: Sets 4th Quarter Conference Call for March 15
-------------------------------------------------------------
GrafTech International Ltd. (NYSE:GTI) will hold its 2004 fourth
quarter conference call with investors and analysts on March 15,
2005, at 11:00 am EST.
GTI reaffirms its previously disclosed 2004 fourth quarter
earnings guidance before restructuring charges and other
income/expense, net of $0.11-$0.13 per share, excluding the
previously disclosed $0.01 per share impact of 13.6 million shares
underlying the Company's contingent convertible debt. As required
by new accounting rules adopted by the Financial Accounting
Standards Board effective Dec. 15, 2004, shares underlying GTI's
contingent convertible debt will be included in GAAP earnings per
share calculations.
The Company has scheduled its earnings release and related
conference call to closely coincide with the filing of its Form
10-K with the Securities and Exchange Commission. The schedule
reflects the required audit procedures and related internal
control assessment and attestation required by Section 404 of the
Sarbanes-Oxley Act of 2002. This process includes the review of
the internal controls over closing and reporting of information
provided in the Company's Form 10-K.
The dial-in number for the live audio call beginning at 11:00 am
EST is:
Domestic - (800) 218-0204
International - (303) 205-0033
If you are interested in participating in this call, contact Kelly
Powell at (302) 778-8231 or kelly.powell@graftech.com
A replay of the call will be available for 72 hours following the
call. The replay will be accessible within two hours from the
finish of the conference call. You can access the replay by using
the following numbers for domestic and international dial in:
Domestic - (800) 405-2236
International - (303) 590-3000
Passcode - 11021508#
The conference call will also be available on the Company's Web
site at http://www.graftech.com/within two days of the call, in
the investor relations section.
GrafTech International Ltd. is one of the world's largest
manufacturers and providers of high quality synthetic and natural
graphite and carbon based products and technical and research and
development services, with customers in about 60 countries engaged
in the manufacture of steel, aluminum, silicon metal, automotive
products and electronics. For additional information on GrafTech
International, call 302-778-8227 or visit its Web site at
http://www.graftech.com/
* * *
As reported in the Troubled Company Reporter on Nov. 12, 2004,
Standard & Poor's Rating Services affirmed its ratings on GrafTech
International Ltd. and removed them from CreditWatch where they
were placed with negative implications on October 11, 2004. The
outlook is negative. The corporate credit rating on GrafTech is
affirmed at 'B+', the senior unsecured debt rating at 'B', and
convertible debt rating at 'B-'.
"Despite the affirmation and improved fundamentals for graphite
electrodes, the negative outlook reflects concerns about the
company's ability to improve in a timely manner a financial
performance that is still weak for the rating," said Standard &
Poor's credit analyst Dominick D'Ascoli. This is in light of
continual cost pressures, uncertainties about the needle coke
market for 2006 and beyond, and limited free cash flow generation
at GrafTech.
HIA TRADING: Wants to Hire Scarcella Rosen as Bankruptcy Counsel
----------------------------------------------------------------
HIA Trading Associates and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
permission to employ Scarcella Rosen & Slome LLP as its general
bankruptcy counsel.
Scarcella Rosen is expected to:
a) take all necessary action to protect and preserve the
Debtors' estates, including
(i) the prosecution of actions on the Debtors' behalf,
(ii) the defense of any actions commenced against the
Debtors,
(iii) the negotiation of disputes in which the Debtors are
involved, and
(iv) the preparation of objections to claims filed against
the Debtors' estates;
b) prepare on behalf of the Debtors, as debtors in possession,
all necessary motions, applications, answers, orders,
reports, and other papers in connection with the
administration of the Debtors' estates;
c) negotiate and prepare on behalf of the Debtors a plan of
reorganization, a disclosure statement and all related
documents to the plan and disclosure statement; and
d) perform all other necessary legal services to the Debtors in
connection with the prosecution of their chapter 11 cases.
Adam L. Rosen, Esq., a Member at Scarcella Rosen, is the lead
attorney for the Debtors' restructuring. Mr. Rosen discloses that
the Firm received a $150,000 retainer.
Mr. Rosen reports that Scarcella Rosen's professionals bill:
Designation Hourly Rate
----------- -----------
Partners $325 - 400
Associates 190 - 260
Paraprofessionals 100
Scarcella Rosen assures the Court that it does not represent any
interest adverse to the Debtors or their estate.
Headquartered in South Plainfield, New Jersey, HIA Trading
Associates -- http://www.oddjobstores.com/-- and its affiliates
operate 87 retail stores under the name Amazing Savings Stores.
The Debtors purchase overproduced, overstocked and discounted
first-quality, name brand close out merchandise from
manufacturers, wholesalers and retailers, as well as a blended mix
of imports and everyday basic commodity items to be sold
at deep discount prices in its stores located in key regional
centers in New York, New Jersey, Connecticut, Ohio, Pennsylvania,
Kentucky, Delaware, Maryland and Michigan. The Company and its
debtor-affiliates filed for chapter 11 protection on January 12,
2005 (Bankr. S.D.N.Y. Case No. 05-10171). When the Debtor filed
for protection from its creditors, it reported total assets of
$67,500,000 and total debts of $90,000,000.
HIA TRADING: Section 341(a) Meeting Slated for Jan. 20
------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of HIA
Trading Associates and its debtor-affiliates' creditors at
12:00 p.m., on January 20, 2005, at the Office of the United
States Trustee, 80 Broad Street, 2nd Floor, New York, New York
10004. This is the first meeting of creditors required under
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 one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in South Plainfield, New Jersey, HIA Trading
Associates -- http://www.oddjobstores.com/-- and its affiliates
operate 87 retail stores under the name Amazing Savings Stores.
The Debtors purchase overproduced, overstocked and discounted
first-quality, name brand close out merchandise from
manufacturers, wholesalers and retailers, as well as a blended mix
of imports and everyday basic commodity items to be sold
at deep discount prices in its stores located in key regional
centers in New York, New Jersey, Connecticut, Ohio, Pennsylvania,
Kentucky, Delaware, Maryland and Michigan. The Company and its
debtor-affiliates filed for chapter 11 protection on January 12,
2005 (Bankr. S.D.N.Y. Case No. 05-10171). Adam L. Rosen, Esq., at
Scarcella Rosen & Slome LLP, represents the Debtors in their
restructuring efforts. When the Debtor filed for protection from
its creditors, it reported total assets of $67,500,000 and total
debts of $90,000,000.
INDYMAC ABS: Fitch Junks Class BV SPMD 2000-C Series
----------------------------------------------------
Fitch Ratings has affirmed and taken rating actions on the
following IndyMac ABS, Inc. Home Equity issue:
Series SPMD 2000-C Group 2:
-- Class AV-1 affirmed at 'AAA';
-- Class MV-1 affirmed at 'AA';
-- Class MV-2 affirmed at 'BBB';
-- Class BV downgraded to 'CCC' from 'B';
The affirmations reflect credit enhancement consistent with future
loss expectations and affect $36,792,633 of outstanding
certificates. The negative rating action is the result of poor
collateral performance and the deterioration of asset quality
beyond original expectations, and affects $3,375,000 of
outstanding certificates.
Series SPMD 2000-C Group 2 contained 9.51% Manufactured Housing --
MH -- collateral at closing, Nov. 21, 2000, and as of December
2004, this figure has increased to 25.3%. To date, the MH loans
have exhibited very high loss severities, causing Fitch to have
concerns regarding the adequacy of enhancement in this deal. MH
has been responsible for 55% of cumulative losses.
As of the December 2004 distribution, Series 2000-C Group 2, with
15% of the original collateral remaining, has $774,340 of
overcollateralization -- OC -- compared to the OC target of $2.025
million. Monthly excess spread is not keeping pace with monthly
collateral losses (e.g., only $152,647 of last month's excess
spread was available to cover the gross losses of $303,093).
Monthly gross losses are generally increasing, as evidenced by the
12-month average gross loss figure of $289,734 versus the six-
month average gross loss figure of $344,272.
The Group 1 and Group 2 mortgage pools within the SPMD 2000-C
transaction are not cross-collateralized, so excess spread
generated within Group 1 is not available to offset losses in
Group 2, and vice versa. However, the deal was structured with
mortgage insurance -- MI. Currently, approximately 90.03% of the
mortgage pool in Group 2 has MI down to 60% loan to value, which
has served to somewhat mitigate the overall loss numbers.
Fitch will continue to closely monitor this deal.
INTERMET CORP: Court Approves Amended Pacts with Major Customers
----------------------------------------------------------------
The U.S. Bankruptcy Court of the Eastern District of Michigan
entered an order approving INTERMET Corporation's (INMTQ:PK)
assumption of the amended agreements it has reached with its major
customers. As a result, INTERMET has withdrawn its motion for
authority to reject certain executory supply contracts with its
major customers.
As previously announced, Deutsche Bank Trust Company Americas and
The Bank of Nova Scotia have committed $60 million of debtor-in-
possession (DIP) funding to INTERMET under a DIP credit agreement.
INTERMET has had access to $20 million of this facility since
October. With the approval of the amended customer agreements,
INTERMET has now satisfied all conditions relative to accessing
the remaining $40 million of the DIP facility. INTERMET's ability
to borrow under the DIP facility continues to be subject to a
budget and satisfaction of customary reporting and collateral
requirements. INTERMET and the DIP lenders agreed to an amendment
of the DIP credit agreement that extends the due date for certain
deliverables to Jan. 26, 2005, and makes certain technical
revisions to the credit agreement. The amendment will permit
INTERMET to borrow funds under the DIP credit facility pursuant to
a budget pending its satisfaction of these remaining conditions.
Headquartered in Troy, Michigan, Intermet Corporation --
http://www.intermet.com/-- provides machining and tooling
services for the automotive and industrial markets specializing in
the design and manufacture of highly engineered, cast automotive
components for the global light truck, passenger car, light
vehicle and heavy-duty vehicle markets. Intermet, along with its
debtor-affiliates, filed for chapter 11 protection on Sept. 29,
2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04-67614).
Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represents
the Debtors. When the Debtors filed for protection from their
creditors, they listed $735,821,000 in total assets and
$592,816,000 in total debts.
INTERSTATE BAKERIES: Court Lifts Stay to Allow Huffman Appeal
-------------------------------------------------------------
As previously reported, Daniel B. Huffman filed a state court
action in California against Interstate Bakeries Corporation and
its debtor-affiliates alleging age discrimination and wrongful
termination. In July 2002, Mr. Huffman obtained a jury verdict
against the Debtors. The Debtors posted an appeal bond and
appealed to the California Court of Appeals, which reversed and
remanded for a new trial due to trial error. Mr. Huffman filed a
petition for review with the California Supreme Court on
September 20, 2004.
Mr. Huffman sought to lift the automatic stay for the limited
purpose of prosecuting the appeal.
Representing Interstate Bakeries, J. Eric Ivester, Esq., at
Skadden Arps Slate Meagher & Flom, LLP, in Chicago, Illinois,
informs the United States Bankruptcy Court for the Western
District of Missouri that the Debtors have offered to resolve Mr.
Huffman's Request on terms that were disclosed to the Court at the
November 23, 2004, omnibus hearing. Mr. Huffman, however,
declined to resolve his Request on the terms of the proposed
stipulation, even though the Court considered the proposed
stipulation a "good agreement."
Mr. Huffman's claim must be resolved pursuant to the procedures
and terms of the Tort Procedure Order and the Tort Claim
Procedures, Mr. Ivester argues. The Tort Procedure Order
provides that tort claimants will not be entitled to relief from
the automatic stay to establish, liquidate or otherwise engage in
any collection of any tort claim until the procedures have been
exhausted. The Tort Claim Procedures provides that "[t]o the
extent a Claimant files a lift stay motion without exhausting the
Claims Resolution Procedures, the Bankruptcy Court shall deny the
motion, without prejudice to its renewal after the Claims
Resolution Procedures are exhausted."
Mr. Ivester asserts that the fundamental purpose of the stay
imposed by Section 362(a)(i) of the Bankruptcy Code is to provide
a debtor with a breathing spell, by giving the debtor the time
and an opportunity "to attempt a repayment or reorganization
plan." However, Mr. Huffman's request is clearly inconsistent
with the fundamental purpose of the automatic stay since it seeks
to force the Debtors to proceed with potentially time-consuming
appellate proceedings despite the fact that the Debtors'
management and in-house legal team, in particular, are already
taxed with the responsibility for managing and responding to
inquiries from the Debtors' employees and thousands of creditors,
vendors, and other parties-in-interest regarding the Debtors'
Chapter 11 cases.
Mr. Ivester further asserts that lifting the stay at this early
stage would force the Debtors to divert their attention from the
critical issues that require all of their time and energy in the
early stages of their bankruptcy cases.
Mr. Huffman, Mr. Ivester reminds the Court, is seeking to
continue the prosecution of his appeal with the California
Supreme Court and has expressed his intent to collect a
$2,400,000 judgment from the Debtors' $3,600,000 appeal bond,
from which the Debtors have a property interest, as a result of
the Debtors' successful appeal.
Thus, the Debtors would suffer significant prejudice if Mr.
Huffman's request should be granted due to the expense,
distraction from and interference to the Debtors' reorganization
efforts that would flow from allowing Mr. Huffman's claims to
proceed outside the Tort Claim Procedures at this early stage of
the Debtors' bankruptcy cases.
According to Mr. Ivester, "[i]n stark contrast to the substantial
prejudice that the Debtors would suffer, [Mr.] Huffman cannot
show that he would be prejudiced if the Motion were denied. That
denial would only temporarily continue the status quo and, thus,
[Mr.] Huffman would only face the ordinary delay that all
creditors face in complex chapter 11 cases."
"In light of the fact that [Mr.] Huffman has not met the initial
requirement of establishing sufficient cause to modify the
automatic stay, the probability of success on the merits in [Mr.]
Huffman's action has little or no significance in determining
whether the automatic stay should be lifted," Mr. Ivester says.
Thus, the Debtors ask the Court to deny Daniel B. Huffman's
request to lift the automatic stay because:
(1) it is in violation of the Court-approved Tort Claim
Procedures, which provide for orderly procedures to
resolve the hundreds of tort claims brought against the
Debtors in a timely and cost-effective manner; and
(2) Mr. Huffman has not established cause to lift the
automatic stay.
* * *
Judge Venters rules that Mr. Huffman is excluded from
participating in the Tort Claim Procedures for limited purposes.
Judge Venters lifts the automatic stay for the limited purpose of
allowing Mr. Huffman to prosecute the appeal arising out of the
suit he filed against Interstate Brands Companies at the Los
Angeles County Court up to the point of final judgment by the
California Supreme Court.
"If the California Supreme Court does not accept review of the
Appeal or if the California Supreme Court affirms the California
Court of Appeals reversing and remanding for new trial, then the
automatic stay will be reimposed pending further determination by
this Court whether [Mr.] Huffman should still be excluded from
the Tort Claims Motion and whether the stay should be lifted to
allow a new trial," Judge Venters rules. "If the California
Supreme Court grants judgment in the Appeal in favor of Huffman,
then the automatic stay will be reimposed to prevent Huffman from
levying or collecting on the judgment pending further
determination by this Court."
The Court also approves each of the stipulations that the Debtors
entered into to resolve the objections filed by Antonio Martinez,
the Boyd Plaintiffs and Lisle King with respect to the Tort Claim
Procedures.
The Stipulations provide that:
(a) The Objectors' claims are exempted from inclusion in the
Debtors' procedures for liquidating and settling tort
claims; and
(b) To the extent the Objectors seek that the automatic stay
be lifted in the objection, the request is denied without
prejudice. However, the Objectors may file a motion
seeking to lift the stay.
With respect to Mr. Martinez, the Debtors agree that:
(a) The automatic stay will be modified for six months for the
sole and limited purpose of allowing mediation of Mr.
Martinez's claim to proceed in a mutually agreeable
location in the state of Montana;
(b) The automatic stay will remain in full force and effect
for any other purpose;
(c) The mediator will be selected only on mutual consent of
the parties; and
(d) If Mr. Martinez's claim is not resolved within six months,
the automatic stay will return to full force and effect in
all respects and Mr. Martinez will participate in the
Claims Resolution Procedures at that time.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a 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 employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $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) in total debts. (Interstate Bakeries
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
INTERSTATE BAKERIES: Names Steve Proscino EVP of Sales
------------------------------------------------------
Interstate Bakeries Corporation (OTC: IBCIQ) names Steve Proscino
Executive Vice President -- Sales of its Eastern Business Unit,
effective immediately. Mr. Proscino has more than 11 years of
experience in the baked goods industry. All five profit center
vice presidents in the eastern region will report to Mr. Proscino
who will have Profit and Loss responsibility for operations in the
entire eastern region of the United States. He will report
directly to Mike Kafoure, president and chief operating officer,
and will work closely with Mr. Kafoure and other members of senior
management to implement plans designed to improve company
performance. Mr. Proscino replaces outgoing executive vice
president, Tom Bartoszewski, who has retired from the Company
after more than 43 years of service.
"We are extremely pleased that Steve is joining IBC. He has proven
his ability in helping companies, specifically in the baked goods
sector, drive growth and profitability," says Mike Kafoure,
president and COO. "He will be a key member of our sales
organization, and play a significant role in IBC's efforts to
improve our sales and financial performance."
Mr. Proscino, 50, joins IBC after two year(s) as partner and co-
founder of Q6, a performance-based incentive company. Prior to
Q6, Mr. Proscino spent eleven years with Earthgrains, a $2.6
billion baking company, where he most recently had profit and loss
responsibility as the executive vice president and general manager
of the Midwestern United States. Also, Steve led the
restructuring activities of Earthgrains and the integration of the
Metz Baking Co. acquisition. Prior to that, Steve held roles in
Sales, Operations and IT at Anheuser Busch Companies, Inc., in St.
Louis, Missouri.
Mr. Proscino is a graduate of Rensselaer Polytechnic Institute/
College of William and Mary with degrees in Mechanical Engineering
and Mathematics/Physics. He also has an MBA from the Wharton
School of Business at the University of Pennsylvania.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a 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 employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $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) in total debts.
INTERSTATE GENERAL: Explores Possible Sale of Remaining Assets
--------------------------------------------------------------
Interstate General Company L.P. confirmed that its units no longer
trade on the American Stock Exchange or the Pacific Stock
Exchange. The Company previously reported the proposed de-listing
action by the AMEX and the PCXE in news releases dated Dec. 22,
2004, and Jan. 4, 2005. Bid and asked prices for the Company's
units are listed in the "pink sheets" under the symbol IGLPA.PK.
The Company is exploring a possible sale of its remaining land and
other assets for cash, followed by a liquidation of the Company
and distribution to unitholders of the proceeds remaining, if any,
after debt repayment and other financial obligations are met. No
contracts have been entered into for the sale of the Company's
land and until legally binding arrangements are in place, the
Company will not know the amount of cash, if any, that will be
available for distribution to unitholders or the timing thereof.
The Company's objective is to wind up its affairs by Mar. 31,
2005, but there can be no assurances that it will be successful in
selling its land and other assets and winding up its affairs by
such time.
Ownership interests in Interstate Waste Technologies, Inc., and
Caribe Waste Technologies, Inc., not owned by four present or
former employees, are held in trust for the benefit of IGC's
unitholders. These interests will continue to be held in trust
for the benefit of IGC's unitholders subsequent to the proposed
winding up of the Company. IWT/CWT are seeking funding to
continue operations, principally for a waste-to-energy project in
Puerto Rico. The ability to obtain third party funding will
depend upon entering into a power purchase agreement, and probably
at least one municipal waste processing agreement. These
agreements are likely to take at least 90 days and quite possibly
longer. During this period, IWT/CWT will seek funding from
available sources, including related parties. To date no funding
commitments have been made.
About the Company
Interstate General Company L.P.'s principal activities are to
develop and sell residential and commercial land and to find
innovative solutions for disposal of municipal waste. The real
estate activities include community development, development and
ownership of rental apartments and real estate management
services. The Group also pursues waste disposal contracts with
municipalities and government entities as well as industrial and
commercial waste generators.
* * *
Going Concern Doubt
The Company received a "going concern" qualification in the
opinion of its independent auditors for its 2002 financial
statements. The Company has received a similar qualification in
its independent auditor's opinion for its 2003 financial
statements. The Company expects to incur further losses in 2004
and to be severely constrained financially unless and until an
equity investor is obtained for its Brandywine project and
development equity is obtained for its Puerto Rico waste project.
In its Form 10-QSB for the quarterly period ended Sept. 30, 2004,
filed with the Securities and Exchange Commission, Interstate
General posts a $1,504,000 net loss in Sept. 2004 compared to a
$696,000 net loss from the previous year.
ITSV INC: Court Permits Dismissal of Claims Against iPayment
------------------------------------------------------------
Judge Vincent Zurzolo of the United States Bankruptcy Court for
the Central District of California granted iPayment, Inc.'s
(NASDAQ: IPMT) motion for summary judgment, thereby dismissing all
the claims in the first amended complaint filed by the Trustee for
the Estate of ITSV, Inc., against iPayment. Once the order or
judgment is formally entered by the court, the plaintiff will have
10 days in which to file a notice of appeal.
About iPayment, Inc.
iPayment, Inc. is a provider of credit and debit card-based
payment processing services to over 100,000 small merchants across
the United States. iPayment's payment processing services enable
merchants to process both traditional card-present, or "swipe,"
transactions, as well as card-not-present transactions, including
transactions over the Internet or by mail, fax or telephone.
ITSV, Inc., filed for bankruptcy protection on July 26, 2002
(Bankr. C.D. Calif. Case No. 02-31259). The Bankruptcy Clerk in
Los Angeles notified creditors of a possible dividend in ITSV's
case and the need to file proofs of claim in early May 2004. The
Chapter 7 Trustee overseeing the liquidation is:
Howard M. Ehrenberg, Esq.
Sulmeyer Kupetz Baumann & Rothman
333 South Hope St., 35th Floor
Los Angeles, CA 90071-1406
Telephone (213) 626-2311
JP MORGAN: S&P Affirms Junk Rating on Class G 1997-C5 Certificate
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on classes
C, D, E, and F of J.P. Morgan Commercial Mortgage Finance
Corporation's commercial mortgage pass-through certificates series
1997-C5. Concurrently, all other outstanding ratings are
affirmed.
The raised and affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios.
As of December 2004, the trust collateral consisted of 152
commercial mortgages with an outstanding balance of
$548.1 million, down 47% since issuance. To date, there have been
nine realized losses totaling $20.76 million (2.01% of the initial
pool balance).
The master servicer, Midland Loan Services L.P. (Midland),
reported full-year 2003 net cash flow (NCF) debt service coverage
ratios (DSCRs) for 97.7% of the pool. Based on this information,
Standard & Poor's calculated the weighted average DSCR for the
pool at 1.44x, which improved slightly from 1.39x at issuance.
There are no defeased loans in the pool.
The current weighted average DSCR for the top 10 loans, which
comprises 25.8% of the pool, rose to 1.75x from 1.30x at issuance.
DSCRs for nine of the top 10 loans have improved since issuance.
The fourth- and ninth-largest loans appear on the watchlist.
The fourth-largest loan, I-90 Preston Industrial Park, has
suffered from a decline in occupancy due to a soft market, and
DSCR has declined to 1.03x, as of June 30 2004, from 1.55x at
year-end 2003. The borrower is actively marketing the space.
The ninth-largest loan, Crosstown Plaza Shopping Center, is
located in West Palm Beach, Florida and is anchored by a Publix
supermarket. It is watchlisted due to hurricane damage, but a
call to Publix indicated it was open for business. The loan is
expected to be removed from the watchlist.
The most recent inspection report provided by Midland pre-dated
the 2004 hurricanes, at which time the property was noted to be in
good condition. The inspection reports for the other properties
that secure the top 10 loans were all noted to be in at least good
condition.
Six loans totaling $12.2 million were reported as delinquent as of
the December 2004 distribution. Five of the six were with the
special servicer, GMAC Commercial Mortgage Corporation (GMACCM).
One other loan is in specially servicing that failed to refinance
at maturity. Of the six specially serviced loans, three are
secured by lodging properties, two by retail properties, and
one by a multifamily property. The loan secured by the
multifamily property, which has a balance of $1.4 million, is
expected to pay off in full this month. The three-largest loans
in special servicing are discussed below:
-- The largest specially serviced loan has a current balance of
$3.26 million and a total exposure of $3.38 million (0.59%,
$18 per sq. ft.). The loan is 60 days delinquent and is
secured by Mallow Shopping Center, a 183,276-sq.-ft. Kmart-
anchored retail center located in Covington, Virginia
Occupancy and DSCR, as of Feb. 29, 2004, are 77% and 0.72x,
respectively. An April 2004 appraisal valued the property
as is at $2.67 million. GMACCM is pursuing foreclosure.
-- The second-largest loan in special servicing has a balance
of $2.7 million, a total exposure of $3.56 million (0.49%,
$35,600 per key), and is secured by a 100-room Days Inn in
Orlando, Florida. A discounted payoff offer of
$2.17 million has been accepted.
-- The third-largest loan has a balance of $2.3 million (0.42%,
$20,125 per key) and is secured by a 114-room Holiday Inn in
Las Cruces New Mexico. It failed to payoff at maturity, but
a buyer for the property has been found and the loan is
expected to payoff in the first quarter 2005. No principal
loss is anticipated.
The servicer's watchlist includes 28 loans totaling
$105.9 million, or 19.3% of the pool. The loans are on the
watchlist due to low occupancies, DSCRs, or upcoming lease
expirations, and were stressed accordingly by Standard & Poor's.
The pool has geographic concentrations in excess of 5% in:
-- California (16.5%),
-- New York (10.5%),
-- Virginia (9.5%),
-- Florida (8.6%),
-- Texas (8.0%),
-- New Jersey (6.1%), and
-- Maryland (5.4%).
Property type concentrations include:
-- retail (35.7%),
-- multifamily (20.2%),
-- office (11.8%),
-- mixed-use (10.2%),
-- industrial (7.4%),
-- lodging (7.3%), and
-- senior housing (7.1%).
Standard & Poor's stressed various loans in the mortgage pool,
paying closer attention to the specially serviced and watchlisted
loans. The expected losses and resultant credit enhancement
levels adequately support the rating actions.
Ratings Raised
J.P. Morgan Commercial Mortgage Finance Corporation
Commercial mortgage pass-thru certificates series 1997-C5
Rating
------
Class To From Credit Enhancement
----- -- ---- ------------------
C AAA AA+ 30.04%
D AA A- 19.67%
E A BBB 16.84%
F BB B+ 7.41%
Ratings Affirmed
J.P. Morgan Commercial Mortgage Finance Corporation
Commercial mortgage pass-thru certificates series 1997-C5
Class Rating Credit Enhancement
----- ------ ------------------
A-3 AAA 49.85%
B AAA 40.42%
G CCC+ 0.81%
KMART: Hearing on Critical Vendor Proceedings Set for Jan. 18
-------------------------------------------------------------
Kmart Corporation filed over 1,100 adversary proceedings to
recover "critical vendor" payments made immediately after the
Petition Date. The payments were made pursuant to several
orders of the U.S. Bankruptcy Court for the Northern District of
Illinois that allowed Kmart to pay certain prepetition claims of
dairy, egg, media vendors, and claims of foreign vendors.
Capital Factors, a creditor excluded from the critical vendor
program, objected to and appealed from the orders that allowed
Kmart to make these payments. The District Court reversed the
orders on April 10, 2003. Kmart appealed from the ruling to the
Seventh Circuit Court of Appeals.
Because of the approaching expiration of the statute of
limitations, on January 26, 2004, Kmart filed adversary
proceedings to recover the critical vendor payments before the
Seventh Circuit ruled on the appeal. Kmart suspended prosecution
of the proceedings until after February 24, 2004, when the
Seventh Circuit issued its decision in Kmart Corp. v. Capital
Factors, Inc., 359 F. 3d 866 (7th Cir. 2004).
The Seventh Circuit rejected Kmart's appeal, which had been joined
by several recipients of the critical vendor payments as
intervenors, and affirmed the ruling of the District Court that
held that the payments had not been properly authorized. The
Seventh Circuit expressly contemplated, and in fact expected, that
Kmart would bring actions to recover the payments.
Trade Vendors' Defenses
Numerous trade vendors filed motions and raised general and
specific defenses to dismiss the Debtors' complaints.
The General Defenses made by some of the trade vendors provide
that:
(a) Kmart lacks standing to bring actions under Section 549 or
550 of the Bankruptcy Code to avoid and recover the
Critical Vendor payments.
(b) The Critical Vendor payments were authorized by the
Bankruptcy Court. Since Section 549 allows recovery of
postpetition payments only when the payments were not
"authorized by the Court," the Bankruptcy Court's
authorization of the Critical Vendor payments renders the
payments non-recoverable.
(c) Section 105 does not authorize recovery of the Critical
Vendor payments. Section 105 does not provide for or
allow private rights of action and, thus, the Bankruptcy
Court cannot avoid or order the return of the Critical
Vendor payments under Section 105.
(d) Kmart has not stated a claim for unjust enrichment.
(e) The doctrine of judicial estoppel bars Kmart from seeking
to avoid payments it previously argued were "critical" and
"essential" to its reorganization.
(f) Kmart expressly waived the right to avoid the Critical
Vendor Payments in the Reorganization Plan and Disclosure
Statement and that, because of allegedly inadequate
notice, the waiver was not rescinded by the pre-
confirmation modifications made to the Plan.
(g) Kmart's request is barred by the doctrine of res judicata
-- claim preclusion -- due to the confirmation of the
Plan, and that the Plan failed to expressly reserve the
right to pursue the claims.
(h) Kmart's request is moot because distributions have already
been made under the Plan and no amounts were distributed
to the defendants.
(i) The Critical Vendor payments were authorized under Section
363(b)(1) because the payments were made:
-- out of business necessity after notice and a hearing;
and
-- within the ordinary course of business since the
payments are not uncommon in a reorganization.
(j) The Critical Vendor payments were authorized under Section
364(b) as an extension of credit and that, accordingly,
Section 364(e) insulates the payments from avoidance
notwithstanding the reversal of the order authorizing the
payments.
Certain trade vendors presented Special Defenses:
(1) The doctrine of equitable estoppel bars the avoidance and
recovery of the Critical Vendor payments. The argument is
based on an asserted detrimental reliance on the Critical
Vendor Order.
(2) Recovery of the Critical Vendor payments is barred as
against defendants whose executory contracts were assumed
under the Plan.
(3) Marigold Foods, LLC, asserts that the Critical Vendor
payment it received was authorized under Section 365 which
requires a debtor to perform its obligations under leases
or executory contracts and cure prepetition defaults if it
wishes to assume and assign an executory contract.
Marigold alleges it furnished dairy products to Kmart
under an executory contract, and thus, Kmart's payment was
consistent with Section 365 and cannot be avoided.
(4) Morning Star Publishing asserts that it is the wrong
defendant. Morning Star Publishing asserts that,
subsequent to the Critical Vendor payment, "it purchased
the assets of Morning Star Publishing through a bankruptcy
sale free and clear of claims."
(5) Ogden Newspaper Group raises various defenses peculiar to
itself, including:
* Since Kmart was in default under the contract at the
time of the Critical Vendor payments, those payments
effected an assumption of the contracts and a cure of
the defaults;
* Kmart's claims are subject to offset or recoupment on
the savings to Kmart for advertising rates under the
contract that now exceed the amounts claimed by Kmart;
and
* Various defendants named in the complaint are trade
names and not legal entities, and as they have not been
properly served, the complaint against them should be
dismissed based on the statute of limitations.
(6) Hoo Cheung Group alleges that it did not receive a
Critical Vendor payment.
(7) Bowater, Inc., alleges that it had a settlement agreement
with Kmart regarding the Critical Vendor payment.
(8) Irving Pulp & Papers, Ltd., alleges that it was not
properly served with the summons and complaint.
(9) Atico Overseas, Limited, New Atico International Ltd.
Taiwan, SKM Enterprises, Inc., Magic Power Co., Ltd., and
Victory Land Enterprises Co., Ltd., seek dismissal due to
insufficient process and the Bankruptcy Court's lack of
personal jurisdiction over the foreign defendants.
Kmart's Responses
To the extent the Defendants raise General Defenses, Kmart asks
the Bankruptcy Court to deny the Defendants' requests to dismiss
the Adversary Proceedings on these grounds:
A. Kmart has standing to pursue avoidance of the Critical Vendor
payments.
In Kmart v. Intercraft Company, 310 B.R. 107, the Bankruptcy
Court observed that the recovery of funds through avoidance
actions would enhance the value of Kmart's stock, and that the
enhancement would benefit the creditors-turned-owners of the
company who acquired their equity interests on account of
allowed claims. William J. Barrett, Esq., at Barack
Ferrazzano Kirschbaum Perlman & Nagelberg, LLP, contends that
the Intercraft decision applies with equal force to the
actions to avoid the Critical Vendor payments. As with the
preference actions at issue in Intercraft, the cases are
brought under Section 550(a) for the benefit of Reorganized
Kmart.
B. Under its confirmed Plan, Kmart retained the right to seek
avoidance of the Critical Vendor payments:
(a) Kmart did not waive the right to avoid Critical Vendor
payments. The original Plan proposed by Kmart was
incorporated into the Plan confirmed by the Bankruptcy
Court. While the original Plan waived all avoidance
actions, the modified and confirmed Plan preserved actions
to avoid the Critical Vendor payments.
Dean Foods, in its objection to Kmart's Plan, and the
Adversary Defendants, in their motion to dismiss the
complaints, argue that they were entitled to rely entirely
on the waiver of avoidance actions in the original Plan
and on the general discussion of waived causes of action
in the Disclosure Statement. In its ruling on Dean Foods'
Objection, the Bankruptcy Court rejected the argument that
Kmart's proposed modification to the Plan required
re-noticing of the Plan, as modified, on the recipients of
the Critical Vendor payments. The Court held that Dean
Foods or any other critical vendor who chose to focus
solely on the waiver of avoidance actions contained in the
Plan was misguided.
Mr. Barrett asserts that the Bankruptcy Court's ruling
applies with equal force to all recipients of Critical
Vendor payments. The Defendants received the Disclosure
Statement that warned of the possibility of avoidance
actions, and of modifications to the Plan. They also
received notice of the Confirmation Hearing. The Court
concluded that the modifications to the Plan did not alter
the treatment of claims, albeit contingent, then held by
the Critical Vendor payees.
Mr. Barrett argues that the Defendants miss the critical
distinction between the rights they have as creditors and
the rights they have as potential defendants in actions
brought by the Reorganized Debtor. The Bankruptcy Court,
Mr. Barrett says, understood this very well when it held
that as creditors, the critical vendor payees were not
entitled to notice of the modification to the Plan because
the modification did not alter the treatment of their
contingent claims.
(b) The confirmed Plan retained Kmart's right to prosecute
avoidance actions to recover Critical Vendor payments.
The Plan states that Kmart "waive[s] all Avoidance Claims
as of the Effective Date (other than Avoidance Actions
under Section 549 of the Bankruptcy Code with respect to
matters subject to that certain case captioned Capital
Factors, Inc. v. Kmart Corporation . . .)"
Mr. Barrett contends that it would have been sufficient
had the Plan simply retained all actions under Section
549, without further specificity as to what postpetition
transfers Kmart might challenge. Kmart cannot be
penalized because the Plan's description of the retained
causes of action against Critical Vendor payees contained
more detail than what the law required. It was not
necessary that the retention language use the words
"critical vendor" instead of "Capital Factors." In any
event, any follower of the Kmart case would have known
exactly what causes of action Kmart was retaining. When
the confirmed Plan and Disclosure Statement are read as a
whole, clearly Kmart retained the avoidance actions
against Critical Vendor payees.
C. The Critical Vendor payments were not authorized by a final
Bankruptcy Court order and are, thus, subject to avoidance.
The Defendants argue that, because the Critical Vendor
payments were authorized at the time they were made, they
cannot be avoided even though the order authorizing the
payments was later reversed. Mr. Barrett notes that the
District Court and the Seventh Circuit flatly reject this
argument for good reason -- it makes no sense. Every final
order of a bankruptcy court is subject to appeal, at least so
long as real relief can be granted to the appellant if the
order is reversed. If an order is reversed, then the parties
must be restored "to the positions they used to occupy."
Before they received their critical vendor payments, the
Defendants were general unsecured creditors of Kmart. As both
the District Court and the Seventh Circuit recognized, it will
be very easy to restore them to their prior positions. They
return the Critical Vendor payments and, in exchange and
pursuant to Section 502(h), they receive the treatment
afforded to unsecured creditors under Kmart's Plan.
D. The doctrine of judicial estoppel does not apply.
The discussion of judicial estoppel entirely omits any
analysis of the reason the cases were filed -- the orders
authorizing the Critical Vendor payments were reversed.
E. The DIP Financing Order does not provide a defense to Kmart's
avoidance actions.
The Seventh Circuit rejected the argument that the inclusion
of a reference to the Critical Vendor payments in the DIP
financing order separately authorized the payments. Section
364, under which the DIP Financing Order was entered, "has
nothing to say about how the money will be disbursed or about
priorities among creditors," Mr. Barrett says.
The Defendants can claim no rights under or benefits from the
DIP Financing Order. The DIP Financing Order does not shelter
from avoidance what the Seventh Circuit has clearly said were
unauthorized payments.
F. The record cannot be supplemented to address the deficiencies
in the record made by Kmart.
The Seventh Circuit did not remand the Capital Factors appeal
to the District Court or the Bankruptcy Court so that further
facts could be offered to support the original motions.
Rather, the Seventh Circuit affirmed the District Court's
reversal of the Bankruptcy Court's order. The matter is
settled -- the Critical Vendor payments were not properly
authorized.
G. Kmart invokes Section 105 only in aid of relief sought under
Sections 549 and 550, and as necessary to implement the
Seventh Circuit's ruling in Capital Factors.
Kmart can invoke Section 105 as necessary to implement relief
that might be available under Sections 549 and 550 or to
implement the Seventh Circuit's ruling in Capital Factors.
* * *
Judge Sonderby will hold a status hearing on the Critical Vendor
Adversary Proceedings on January 18, 2005, at 11:00 a.m. At that
time, the Bankruptcy Court will address:
-- the Defendants' request to proceed with discovery in
Kmart v. Boone Newspapers and Kmart v. Wicks Communications
Company;
-- issues relating to the correct identity of the Defendant in
Kmart v. Hoo Cheung Group, Ltd.; and
-- the issue of whether briefing will remain stayed in actions
where the Defendants have moved to dismiss based on the
assumption of executory contracts under In re Superior
Toy & Manufacturing Co., Inc.;
The Court will receive oral argument on the Motions to Dismiss
setting forth defenses general to all Defendants on January 31,
2005, at 2:00 p.m. Upon disposition of the Motions to Dismiss
setting forth defenses general to all Defendants, the Court will
schedule a status hearing on all pending critical vendor adversary
proceedings.
Judge Sonderby rules that the current stay of discovery will be
continued until disposition of the Motions to Dismiss asserting
defenses applicable to all defendants.
All Motions to Dismiss setting forth defenses specific to certain
Defendants, and including the Motion to Dismiss filed by defendant
Nan Shan International Co., Ltd., will be continued until
disposition of the Motions to Dismiss asserting defenses
applicable to all defendants.
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- is the
nation's second largest discount retailer and the third largest
merchandise retailer. Kmart Corporation currently operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam. The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474). Kmart emerged from chapter 11 protection on May 6,
2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts. The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection. (Kmart Bankruptcy News, Issue No. 87; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LAIDLAW INT'L: PBGC Extends Deadline to Sell Shares to April 15
---------------------------------------------------------------
Douglas A. Carty, Senior Vice-President and Chief Financial
Officer of Laidlaw International, Inc., disclosed to the
Securities and Exchange Commission that on December 21, 2004, the
Pension Benefit Guaranty Corporation and the company entered into
an amendment to their agreement dated June 18, 2003, whereby the
PBGC has agreed to extend the deadline for the sale of 3.8
million shares of Laidlaw common stock held in trust for the
benefit of the Greyhound U.S. pension plans to April 15, 2005.
Laidlaw intends to use a portion of the proceeds from the sale of
its healthcare companies, due to close by the end of March 2005,
to repurchase all or a portion of those shares.
A full-text copy of the Amendment filed with the Securities and
Exchange Commission is available for free at:
http://www.sec.gov/Archives/edgar/data/737874/000129993304002402/exhibit1.htm
Headquartered in Arlington, Texas, Laidlaw, Inc., now known as
Laidlaw International, Inc., -- http://www.laidlaw.com/-- is
North America's #1 bus operator. Laidlaw's school buses transport
more than 2 million students daily, and its Transit and Tour
Services division provides daily city transportation through more
than 200 contracts in the US and Canada. Laidlaw filed for
chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No.
01-14099). Garry M. Graber, Esq., at Hodgson Russ LLP, represents
the Debtors. Laidlaw International emerged from bankruptcy on
June 23, 2003.
* * *
As reported in the Troubled Company Reporter on Dec. 27, 2004,
Moody's Investors Service has placed the long-term debt ratings of
Laidlaw International, Inc., under review for possible upgrade.
The review is prompted by the recent announcement by the company
that it had entered into a definitive agreement to sell both of
its healthcare businesses to Onex Partners LP, an affiliate of
Onex Corporation, for $820 million. Net proceeds after fees and
assumption of a small amount of debt by the buyer is estimated at
$775 million, with a majority of the proceeds intended to be used
to repay substantial levels of Laidlaw's existing debt. Moody's
has also assigned a Speculative Grade Liquidity Rating of SGL-2 to
Laidlaw International, Inc. As part of the rating action, Moody's
has reassigned to Laidlaw International, Inc., certain ratings,
including the senior implied and senior unsecured issuer ratings,
originally assigned at Laidlaw, Inc., in order to reflect more
appropriately the company's current organizational structure.
As reported in the Troubled Company Reporter on Dec. 9, 2004,
Standard & Poor's Ratings Services placed its ratings, including
its 'BB' corporate credit rating, on Laidlaw International, Inc.,
on CreditWatch with positive implications. The rating action
follows Laidlaw's announcement that it has entered into definitive
agreements to sell both of its health care companies, American
Medical Response and Emcare, to Onex Partners L.P. for
$820 million. Laidlaw expects to receive net cash proceeds of
$775 million upon closing of the transaction, which is expected by
the end of March 2005. Naperville, Illinois-based Laidlaw
currently has about $1.5 billion of lease-adjusted debt.
LEVI STRAUSS: Completes $450 Million Cash Tender Offer of 7% Notes
------------------------------------------------------------------
Levi Strauss & Co. has successfully completed its cash tender
offer for up to $450,000,000 of its outstanding 7.00% Notes due
2006.
As of midnight, New York City time, on Jan. 12, 2005, the
scheduled expiration date, $372,143,000 aggregate principal amount
of the Notes, which represents 83% of the outstanding Notes, had
been validly tendered pursuant to the Offer to Purchase, dated
Dec. 15, 2004, as amended. The Company accepted for payment all
Notes validly tendered in the tender offer and sent payment to the
depositary for the tender offer on Jan. 13.
Citigroup Global Markets, Inc., acted as the Dealer Manager for
the tender offer. Georgeson Shareholder Communications Inc.,
served as the Information Agent.
Levi Strauss & Co. is one of the world's leading branded apparel
companies, marketing its products in more than 110 countries
worldwide. The company designs and markets apparel for men, women
and children under the Levi's(R), Dockers(R) and Levi Strauss
Signature(TM) brands.
Bankruptcy Risk
While any company with debt obligations could make the same
statement, Levi Strauss said in a Form 8-K filed with the SEC on
Dec. 16, 2004:
"If we are unable to service our indebtedness or repay or
refinance our indebtedness as it becomes due, we may be forced to
sell assets or we may go into default, which could cause other
indebtedness to become due, result in bankruptcy or an
out-of-court debt restructuring, preclude full payment of the
notes and adversely affect the trading value of the notes."
The statement was included in a list of updated risk factors in
connection with the private placement transaction. A full-text
copy of the regulatory filing containing this disclosure is
available at no charge at:
http://www.sec.gov/Archives/edgar/data/94845/000119312504214234/d8k.htm
* * *
As reported in the Troubled Company Reporter on Oct. 21, 2004,
Fitch Ratings does not anticipate any rating implications from
Levi Strauss & Co.'s announcement that it will retain the Dockers
business.
Fitch rates Levi's:
* $1.7 billion senior unsecured debt 'CCC+',
* $650 million asset-based loan, ABL, 'B+', and
* $500 million term loan 'B'.
The Rating Outlook is Negative.
LOMBARDI'S OF DESERT: Case Summary & Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Lombardi's Of Desert Passage, Inc.
3663 South Las Vegas Boulevard
Las Vegas, Nevada 89109
Bankruptcy Case No.: 05-10256
Type of Business: The Debtor operates a restaurant.
See http://www.lombardisrestaurants.com/
Chapter 11 Petition Date: January 13, 2005
Court: District of Nevada (Las Vegas)
Debtor's Counsel: Brian E Holthus, Esq.
Jolley, Urga, Wirth, Woodbury & Standish
3800 Howard Hughes Parkway 16th Floor
Las Vegas, Nevada 89109
Tel: (702) 699-7500
Fax: (702) 699-7555
Financial Condition as of January 11, 2005:
Total Assets: $1,527,742
Total Debts: $3,010,146
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Aladdin Bazaar, LLG Property Lease $1,500,000
McDonald Carano Wilson
2300 West Sahara Avenue #1000
Las Vegas, Nevada 89102
Tel: (702) 873-4100
iDine Restaurant Company, Inc. $565,993
290 Park Avenue South
10th floor
New York, New York 10010
Internal Revenue Service 940/941 taxes $335,360
Special Procedures
4750 West Oakey
Las Vegas, Nevada 89102
Tel: (702) 455-1026
Jane Lombardi $290,000
3131 Maple Avenue, Apartment 3D
Dallas, Texas 75201
Taylor International Settlement Agreement $156,443
Corporation
4040 Industrial Road
Las Vegas, Nevada 89103
Attn: Jim Mason
Tel: (702) 604-3702
Boulevard Invest, LLC Monthly Rental Lease $39,775
US Foodservices Trade $34,040
Las Vegas Division
Nevada Department of Taxation Sales Tax $23,547
Pacific Seafood Trade $20,347
NW Farm Credit Services
Get Fresh Sales Trade $9,432
Marquis & Aurbach Legal Services $7,954
Sienna-Food, Inc. Trade $5,295
International Environmental Waste Service $4,983
Management, Inc.
Southwest Linen Linen Service $2,873
Southwest Gas Corporation Gas Service $2,183
XO Communications Telephone Service $1,809
Boyd Coffee Company Trade $1,742
AJ's Restaurant Equipment Trade $1,649
Services
More Than Bread, Inc. Trade $1,643
Enviro Tech Products & Trade $1,335
Services
LORAL SPACE: Expands Asian Satellites with SingTel Pact
-------------------------------------------------------
Loral Skynet, a subsidiary of Loral Space & Communications, has
renewed an agreement with Singapore Telecommunications Limited,
Asia's leading communications group, to distribute video, data,
telecommunications and VSAT services on Loral's Telstar 10
satellite. Also, SingTel has agreed to lease a full C-band
transponder on Loral's new Telstar 18 Asian satellite.
"Loral Skynet's satellite coverage gives SingTel the tools it
needs to expand its reach across Asia," said Patrick Brant,
president, Loral Skynet. "Skynet is focused on increasing its
service offerings in this important region of the world where
demand for satellite communications to and from the US and other
regions remains strong."
Telstar 10, located at 76.5 degrees East longitude, and the
recently launched Telstar 18, located at 138 degrees East
longitude, are powerful Space Systems/Loral-built 1300 satellites
whose combined coverage area stretches from Eastern Europe and the
Middle East, across Central Asia through the Indian sub-continent,
to China, Korea, Japan, South East Asia, Australia and Hawaii.
In addition to hosting intra-regional applications, Loral also
offers highly reliable and low cost "one-hop" connectivity to and
from the US mainland through its earth station in Hawaii dedicated
to Telstar 18.
SingTel is Asia's leading communications group with operations and
investments around the world. With significant operations in
Singapore and Australia (through wholly owned subsidiary SingTel
Optus), it provides a comprehensive portfolio of services that
include voice and data services over fixed, wireless and Internet
platforms.
SingTel also has major investments in India, Indonesia, the
Philippines and Thailand. Together with its regional partners,
SingTel is Asia's largest multi-market mobile operator, serving
more than 56 million customers in six markets. SingTel employs
more than 19,000 people worldwide and had a turnover of
S$12.0 billion (US$7.17 billion) and net profit after tax of
S$4.49 billion (US$2.68 billion) for the year ended 31 March 2004.
More information can be found at http://www.singtel.com/and
http://www.optus.com.au/
A pioneer in the satellite industry, Loral Skynet delivers the
superior service quality and range of satellite solutions that
have made it an industry leader for more than 40 years. Through
the broad coverage of the Telstar satellite fleet, in combination
with its hybrid VSAT/fiber global network infrastructure, Skynet
meets the needs of companies around the world for broadcast and
data network services, Internet access, IP and systems
integration. Headquartered in Bedminster, New Jersey, Loral
Skynet is dedicated to providing secure, high-quality connectivity
and communications. For more information, visit the Loral Skynet
Web site at http://www.loralskynet.com/
About Loral Space
Loral Space & Communications is a satellite communications
company. It owns and operates a fleet of telecommunications
satellites used to broadcast video entertainment programming,
distribute broadband data, and provide access to Internet services
and other value-added communications services. Loral also is a
world-class leader in the design and manufacture of satellites and
satellite systems for commercial and government applications
including direct- to-home television, broadband communications,
wireless telephony, weather monitoring and air traffic management.
The Company and various affiliates filed for chapter 11 protection
(Bankr. S.D.N.Y. Case No. 03-41710) on July 15, 2003. Stephen
Karotkin, Esq., and Lori R. Fife, Esq., at Weil, Gotshal & Manges
LLP, represent the Debtors in their restructuring efforts. When
the company filed for bankruptcy, it listed total assets of
$2,654,000,000 and total debts of $3,061,000,000.
MIRANT: Settles Energy Crisis Claims with California Utilities
--------------------------------------------------------------
Mirant (OTC Pink Sheets: MIRKQ) has entered into a settlement
agreement with California electric utilities and public agencies,
including the state's Attorney General, to resolve various claims
against Mirant and its subsidiaries related to California's energy
crisis in 2000 and 2001.
The settlement agreement was approved on Jan. 13, 2005, by the
California Public Utilities Commission. It still needs approval
from the Federal Energy Regulatory Commission, and the two
respective bankruptcy courts overseeing the Chapter 11 proceedings
of Mirant, and Pacific Gas & Electric Co., one of the utilities
involved in the settlement.
"We are pleased to reach this comprehensive settlement and put
these matters behind us. It is important for Mirant to focus on
its future as we progress toward emerging from bankruptcy as a new
company," said Curt Morgan, Executive Vice President and Chief
Operating Officer, Mirant. "We expect this settlement will
provide the foundation for a positive relationship between Mirant
and the State of California. Importantly, the settlement
maintains our current operations in California and preserves the
potential for future expansion. Mirant is confident that
California will continue on its path to developing a vibrant and
fair wholesale energy market, and we look forward to participating
in these markets to meet the growing needs of California
consumers."
Added Mr. Morgan, "All parties worked diligently to reach this
settlement, including the FERC staff who were instrumental in
bringing the parties together."
Mirant expects to file its plan of reorganization with the U.S.
Bankruptcy Court later this month and has set a timetable to
emerge from Chapter 11 in mid-2005.
"Mirant continues to believe that it did not violate any laws in
its power sales transactions in California. However, the parties
with whom Mirant has entered into this settlement were asserting
claims against Mirant and its subsidiaries for billions of
dollars. By settling those claims on an equitable basis --
similar in scale to settlements agreed to by other energy
providers in California -- we have removed significant financial
uncertainty from Mirant's economic future and thus eliminated a
potential obstacle to achieving an acceptable plan of
reorganization in our Chapter 11 proceeding," said Doug Miller,
Mirant's Senior Vice President and General Counsel.
The settlement agreement states that Mirant's subsidiary Mirant
Americas Energy Marketing, LP, will assign $283 million of unpaid
receivables ($320 million before adjustments directed by the FERC)
to the California parties, which consist of PG&E, Southern
California Edison Co., San Diego Gas & Electric Co., the
California Attorney General, the CPUC, the California Department
of Water Resources and the California Electricity Oversight Board.
These unpaid MAEM receivables are to be divided among the
California parties and any other market participants that choose
to opt into the settlement.
In addition to the transferred receivables, the California parties
will receive an allowed, unsecured claim of $175 million against
MAEM. The DWR will receive an additional allowed unsecured claim
against MAEM of $2.25 million. When Mirant emerges from Chapter
11, those claims will be compensated on the same basis as other
pre-petition claims against MAEM.
The California settlement also resolves all claims asserted by
PG&E against Mirant relating to refunds potentially owed with
respect to sales by Mirant under reliability-must-run agreements.
Pursuant to the settlement, PG&E will receive allowed, unsecured
claims against Mirant that will result in a distribution of
proceeds of $63 million under Mirant's plan of reorganization. In
addition, either:
(1) Mirant's subsidiaries will transfer ownership of the
partially completed 530-megawatt gas-fired Contra Costa
Unit 8 power plant and associated turbines to PG&E or
(2) PG&E will receive an additional amount of as much as
$85 million.
Mirant and PG&E also agreed to enter into long-term power purchase
agreements that will allow PG&E to dispatch and receive the output
of certain electric generating units owned by Mirant's
subsidiaries in Northern California.
Under the settlement agreement, once it is fully approved, the
California parties joining in the settlement will release Mirant,
MAEM and Mirant's California subsidiaries from liability for
claims related to transactions in the western energy markets from
Jan. 1, 1998 to July 14, 2003, including all claims for refunds
asserted by the California parties in proceedings pending before
the FERC. The California parties also release the Mirant parties
from all claims, including claims filed at the FERC seeking
refunds, related to a 19-month power supply contract between MAEM
and the DWR that expired in December 2002. Also, the California
parties receiving the MAEM receivables will assume MAEM's
obligation to pay refunds determined by the FERC to be owed by
MAEM to other parties for transactions in the California
Independent System Operator and the California Power Exchange
markets during the period from October 2, 2000 to June 20, 2001.
MAEM will retain liability for refunds determined by the FERC to
be owed to parties other than the California parties for
transactions in the CALISO and CALPX markets outside the refund
period. The California Attorney General also will dismiss four
lawsuits filed against Mirant and its subsidiaries in the
California state and federal courts. Mirant's subsidiaries retain
ownership of all the operational power plants they own in
California.
While resolving all claims made by the California parties, the
settlement does not cover ratepayer class action suits against
Mirant, or claims by the CALISO, the CALPX or other market
participants that are not parties to the settlement for periods
outside the refund period. However, it is expected that the
FERC's approval of the settlement will cause the CALISO and the
CALPX to modify their books to reflect the terms of the
settlement, which should significantly reduce their claims in
Mirant's bankruptcy proceedings. Furthermore, in December 2004,
the court in Mirant's bankruptcy proceedings orally ruled that it
would deny class status with respect to the claims filed in the
bankruptcy proceedings by the plaintiffs in the ratepayer suits,
which would substantially reduce the potential exposure of Mirant
and its subsidiaries with respect to those claims by limiting the
claims to the damages, if any, incurred by the individual
plaintiffs.
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. Mirant Corporation
filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex.
03-46590). Thomas E. Lauria, Esq., at White & Case LLP,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$20,574,000,000 in assets and $11,401,000,000 in debts.
MOLECULAR DIAGNOSTICS: Settles $750,000 Tax Liability With IRS
--------------------------------------------------------------
Molecular Diagnostics, Inc. (OTCBB: MCDG) -- MDI -- disclosed that
it has successfully completed the payments necessary to settle
their prior Internal Revenue Service federal payroll tax
liability. Over the past twelve months, the Company has paid the
IRS approximately $750,000 in order to settle this outstanding
payroll tax liability. This settlement eliminated a major issue
in the Company's on-going financial restructuring efforts.
Denis M. O'Donnell, M.D., MDI's Chief Executive Officer stated "we
are pleased that our shareholders and the financial community have
continued to support and believe in the value of MDI's technology.
We are excited to be moving forward and to have the IRS payroll
tax liability behind us."
About Molecular Diagnostics, Inc.
Molecular Diagnostics develops cost-effective cancer screening
systems, which can be utilized in a laboratory or at the point-of-
care, to assist in the early detection of cervical,
gastrointestinal, and other cancers. The InPath System is being
developed to provide medical practitioners with a highly accurate,
low-cost, cervical cancer screening system that can be integrated
into existing medical models or at the point-of-care.
At Sept. 30, 2004, Molecular Diagnostics' balance sheet showed a
$4,934,000 stockholders' deficit, compared to a $8,549,000 deficit
at Dec. 31, 2003.
MORGAN STANLEY: Fitch Holds Junk Rating on $7.7Mil. 1997-HF1 Cert.
------------------------------------------------------------------
Fitch Ratings upgrades Morgan Stanley Capital I, Inc.'s commercial
mortgage pass-through certificates, series 1997-HF1:
-- $9.3 million class E to 'AAA' from 'AA+'.
In addition, Fitch affirms these certificates:
-- $33.0 million class A-2 'AAA';
-- Interest-only class X 'AAA';
-- $55.7 million class B 'AAA';
-- $34 million class C 'AAA';
-- $27.8 million class D 'AAA';
-- $41.7 million class F 'BBB-';
-- $4.6 million class G 'BB+';
-- $10.8 million class H 'B'.
The $7.7 million class J remains at 'CCC'. Fitch does not rate
the $4.0 million class K certificates.
The upgrade to class E is the result of increased subordination
levels due to loan payoffs and amortization. As of the December
2004 distribution date, the pool's collateral balance has been
reduced 60% to $228.6 million from $616.4 million at issuance.
One loan (1.8%) is currently 90 days delinquent and being
specially serviced. The loan is secured by a health care property
located in East Northport, New York. The special servicer, GMAC
Commercial Mortgage Corp., is currently determining a workout
strategy. Losses are expected as the appraisal valued the
property significantly less than the loan balance.
NATIONAL ENERGY: Inks Pact to Settle Edison Mission Dispute
-----------------------------------------------------------
NEGT Energy Trading Holdings Corporation, NEGT Energy Trading -
Power, LP, and NEGT Energy Trading - Gas Corporation entered into
a settlement agreement and mutual release with Edison Mission
Marketing & Trading, Inc., consistent with the Court-approved
Procedures for Settlement of Trade Contracts.
ET Power owes Edison Mission $2,546,807. Because Edison Mission
holds a $3,134,831 cash collateral from the ET Debtors, the
parties agree that Edison Mission will set off the Settlement
Amount against the Collateral and pay ET Power $588,023.
Edison Mission has already made a $495,523 initial payment to ET
Power before the Settlement Agreement. Accordingly, Edison
Mission will make a final payment of $92,500, in full and final
satisfaction of all claims arising out of the parties' contracts
and guarantees:
(a) Contracts and Arrangements
* Base Contract for Short Term Sale & Purchase of Natural
Gas between ET Power and Edison Mission, dated
January 1, 2000;
* Base Contract for Short Term Sale & Purchase of Natural
Gas between ET Power and Edison Mission, dated
December 1, 1999; and
* Outstanding swap transactions between ET Power and
Edison Mission;
(b) Guarantees
* $3,000,000 guarantee issued April 1, 2001, by ET
Holdings in favor of Edison Mission; and
* $20,000,000 guarantee issued October 3, 2000, by Edison
Mission in favor of ET Power;
(c) Letters of Credit
* $7,500,000 Irrevocable Standby Letter of Credit issued
on August 6, 2002 (original value: $10,000,000) by
JPMorgan Chase Bank on behalf of ET Power and to the
benefit of Edison Mission, as amended. By certification
of default dated July 22, 2003, Edison Mission has drawn
$3,134,831; and
(d) Cash Collateral
* $3,134,831 drawn by Edison Mission from the August 6
Letter of Credit.
According to Paul M. Nussbaum, Esq., at Whiteford, Taylor &
Preston, LLP, in Baltimore, Maryland, the parties will grant each
other mutual releases from any liabilities whatsoever arising
from the Relevant Contracts and Guarantees.
Mr. Nussbaum states that the consummation of the Settlement
Agreement is advantageous to the ET Debtors in that the
Settlement Amount approximates the maximum recovery that could
otherwise be achieved through litigation, without any of the
attendant risks and costs.
Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services. The Company and
its debtor-affiliates filed for Chapter 11 protection on
July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A.
Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G.
Callari, Esq., at Willkie Farr & Gallagher, and Paul M. Nussbaum,
Esq., and Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston, L.L.P., represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $7,613,000,000 in assets and $9,062,000,000
in debts. NEGT received bankruptcy court approval of its
reorganization plan in May 2004, and that plan took effect on
Oct. 29, 2004. (PG&E National Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
NATIONAL ENERGY: ET Power Wants Aquila Merchant to Pay $8,752,287
-----------------------------------------------------------------
In the ordinary course of business, NEGT Energy Trading - Power,
LP, and NEGT Energy Trading - Gas Corporation regularly enter
into forward contracts, swaps and derivative contracts for
commodities including coal, electricity and environmental
credits.
Martin T. Fletcher, Esq., at Whiteford, Taylor & Preston, LLP, in
Baltimore, Maryland, relates that in August 2001, ET Power and
Aquila Energy Marketing Corporation, now known as Aquila Merchant
Services, Inc., entered into a Master Power Purchase and Sale
Agreement.
In January 2002, ET Power and Aquila Risk Management Corporation,
now known as Aquila Merchant Services, Inc., entered into an ISDA
Master Agreement.
On September 1, 1998, ET Gas and UtiliCorp United, Inc., entered
into an ISDA Master Agreement. On August 21, 2001, UtiliCorp
assigned its rights and obligations under the Gas Financial
Master Agreement to Aquila Risk Management.
On January 22, 2003, ET Gas and ET Power entered into an
Assignment and Assumption Agreement, by which ET Gas assigned its
rights and interests in the Gas Financial Master Agreement to ET
Power.
Use of the Master Agreements
The use of contracts like the Master Agreements is common in the
parties' industry. The specific terms related to the actual
purchase and sale of commodities are not typically set forth in
the master agreement. Due to market and other practical
considerations, parties separately negotiate and agree on the
specific terms -- including quantity, price, delivery dates, etc.
-- related to each purchase and sale of commodities during the
term of the governing master agreement. Parties generally
memorialize each separate transaction in a confirmation letter.
The transactions are governed by both the master agreement and
the terms in the confirmation letters.
The Master Agreements contemplated that ET Power and Aquila
Merchant would enter into various transactions for the purchase
and sale of commodities.
Under master agreements, parties can often agree on the terms of
a transaction orally. The parties then confirm the transactions
in writing. Throughout the terms of the Master Agreements, the
parties agreed on several Transactions for the purchase and sale
of electric capacity, energy, or other related products.
Physical Master Agreement
In September 2002, Moody's Investors Service downgraded Aquila
Merchant's credit rating to Ba2, a non-investment grade.
Standard & Poor's Ratings Services downgraded Aquila Merchant's
credit rating to BB. S&P further downgraded Aquila Merchant to
B+ in February 2003.
ET Power notified Aquila Merchant of the occurrence of a
"Downgrade Event" under the Physical Master Agreement.
Consequently, ET Power was entitled to demand $2,500,000 as
Performance Assurance relating to amounts due at the time of the
Downgrade Notice.
However, Aquila Merchant never deposited any the Performance
Assurance in an escrow account established by ET Power at Aquila
Merchant's request.
The failure to provide the Performance Assurance constituted an
event of default under the Physical Master Agreement.
Accordingly, ET Power notified Aquila Merchant of the Physical
Master Agreement termination. The Physical Termination Notice
established May 9, 2003, as the Early Termination Date.
The Physical Master Agreement provides that on an early
termination, the non-defaulting party must net its gains and
losses under all transactions into a single amount and notify the
defaulting party. As of the Physical Early Termination Date, the
Physical Termination Payment amounts to $1,587,212 in Aquila
Merchant's favor.
Power Financial Master Agreement
In May 2003, ET Power sent a margin call to Aquila Merchant,
demanding a $5,300,000 payment under the Power Financial Master
Agreement.
The parties agreed that an escrow account will be established for
the deposit of the requested margin. Aquila Merchant did not
deposit any margin in the escrow account.
Accordingly, ET Power declared an early termination to the Power
Financial Master Agreement and notified Aquila Merchant.
Pursuant to the Power Financial Termination Notice, ET Power
established June 9, 2003, as the Early Termination Date.
As of the Power Financial Early Termination Date, Aquila Merchant
owed ET Power $22,542,490 as termination payment under the Power
Financial Master Agreement. ET Power notified Aquila Merchant of
the amount due in June 18, 2003. Payment was due from Aquila
Merchant on June 20, 2003.
However, Aquila Merchant failed to make any Power Financial
Termination Payment to ET Power.
Gas Financial Master Agreement
In April 2003, ET Power sent a margin call to Aquila Merchant,
demanding a $2,100,000 payment under the Gas Financial Master
Agreement. Aquila Merchant failed to meet the Gas Margin Call.
In June 2003, ET Power declared an early termination to the Gas
Financial Master Agreement and notified Aquila Merchant of the
termination. Pursuant to the Gas Financial Termination Notice,
ET Power established June 9, 2003, as the Early Termination Date.
As of the Gas Financial Early Termination Date, ET Power owed
Aquila Merchant $13,948,110 as termination payment under the Gas
Financial Master Agreement.
Amount Due
The Power Financial Master Agreement had a $22,542,490 forward
value -- plus applicable interest -- in ET Power's favor on the
Power Financial Early Termination Date.
The Physical Master Agreement had a $1,587,212 forward value --
plus applicable interest -- in Aquila Merchant's favor on the
Physical Early Termination Date. Furthermore, the Gas Financial
Master Agreement had a $13,948,110 forward value -- plus
applicable interest -- in Aquila Merchant's favor on the Gas
Financial Early Termination Date.
Aquila Merchant owes ET Power $1,596,272.
In addition, Aquila Merchant is obligated to provide legal and
brokerage fees under the Master Agreements amounting to $148,847.
The aggregate Amount Due to ET Power from Aquila Merchant is
$8,752,287 plus applicable interest.
According to Mr. Fletcher, the Amount Due is a fully matured
obligation of Aquila Merchant. The Amount Due to ET Power
constitutes property of the estate pursuant to Section 541(a) of
the Bankruptcy Code.
Section 542(b) of the Bankruptcy Code provides that "an entity
that owes a debt that is property of the estate and that is
matured, payable on demand, or payable on order, will pay such
debt to, or on the order of, the trustee." In this regard, Mr.
Fletcher states that ET Power stands in the shoes of the trustee
pursuant to Section 1107 of the Bankruptcy Code.
Aquila Merchant must turn over the amount belonging to ET Power's
estates, in an amount to be determined at trial, but not less
than $8,752,287 plus applicable interest.
Additionally, Mr. Fletcher insists that because of the breaches
of the Master Agreements and the Transactions, ET Power has
suffered injury and is entitled to damages in an amount to be
determined at trial, but which amounts to at least $8,752,287
plus applicable interest.
The withholding of funds represents an unjust benefit to Aquila
Merchant at ET Power's expense. Thus, Aquila Merchant's conduct
has resulted in ET Power suffering substantial damages.
ET Power asks the United States Bankruptcy Court for the District
of Maryland for a judgment against Aquila Merchant for
compensatory damages, interest, attorneys' fees and costs.
Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services. The Company and
its debtor-affiliates filed for Chapter 11 protection on
July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A.
Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G.
Callari, Esq., at Willkie Farr & Gallagher, and Paul M. Nussbaum,
Esq., and Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston, L.L.P., represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $7,613,000,000 in assets and $9,062,000,000
in debts. NEGT received bankruptcy court approval of its
reorganization plan in May 2004, and that plan took effect on
Oct. 29, 2004. (PG&E National Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
NOVELIS INC: Moody's Assigns B1 Rating to $1.4 Bil. Sr. Notes
-------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Novelis, Inc.'s
$1.4 billion senior unsecured, guaranteed note issue due January
2015 and affirmed the Company's existing ratings. The notes will
be guaranteed by all wholly owned subsidiaries in the U.S. and
Canada and certain wholly owned foreign subsidiaries. The
guarantee structure is the same as that provided in the Company's
recently placed senior secured bank facilities. The rating
outlook is stable.
The B1 rating on the senior unsecured notes reflects their
position in the capital structure, behind $1.8 billion in secured,
guaranteed bank facilities, of which $1.3 billion is represented
by secured, guaranteed term loans. The rating also reflects
Moody's view that excess value that might be available over and
above the value of the assets securing the bank facilities is
insufficient to rate the notes at the senior implied level.
The stable outlook reflects Novelis Inc.'s well-placed business
position in the aluminum rolled products industry and the
likelihood that operating and earnings performance over the next
12-15 months should continue sound given the favorable industry
conditions that are anticipated to exist. The outlook also
anticipates that Novelis will be able to manage its cost basis and
continue to achieve satisfactory margins per pound.
Deleveraging of Novelis Inc. and sustainability of the Company's
gross margin position and free cash flow (operating cash flow less
dividends less capital expenditures) generation ability would
positively impact the outlook or the rating, although Moody's
anticipates that timing for meaningful deleveraging could take at
least 24 months. Contraction in margins, sustained increases in
raw material, energy and other key costs, and diversion of cash
flow generated to material dividend payments or other shareholder
payments, which would slow the reduction in debt at Novelis, could
negatively impact the outlook or rating.
The rating assigned:
Novelis Inc.:
-- B1 to $1.4 billion senior unsecured guaranteed
notes due 2015
The ratings affirmed:
Novelis Inc.:
-- Ba2 for the senior secured guaranteed Canadian
term loan B tranche,
-- Ba2 for the senior secured guaranteed revolver, also
available to Novelis Corporation (fka Alcan Aluminum
Corporation (New)), Ba3 senior implied, B2 senior unsecured
issuer rating, SGL-2 speculative grade liquidity rating
Novelis Corporation (fka Alcan Aluminum Corporation (New)),
Ba2 for the senior secured guaranteed US term loan tranche B.
Novelis, Inc., had revenues of $6.2 billion for the fiscal year
ended December 31, 2003.
OMEGA HEALTHCARE: Closes $58.1 Million in New Investments
---------------------------------------------------------
Omega Healthcare Investors, Inc. (NYSE:OHI) closed on
$58.1 million of net new investments on Jan. 13, 2005.
The new investments are a result of the exercise by American
Health Care Centers of a put agreement with Omega for the purchase
of 13 skilled nursing facilities, the terms of which were
previously announced on Oct. 14, 2004.
The gross purchase price of $78.8 million was offset by
approximately $7.0 million paid by the Company to American in 1997
to obtain an option to acquire the properties. The net purchase
price also reflects approximately $13.8 million in mortgage loans
the Company had outstanding with American and its affiliates,
which encumbered 6 of the 13 properties.
The 13 properties, all located in Ohio, will continue to be leased
by Essex Healthcare Corporation. The master lease and related
agreements have approximately six years remaining and in 2005
annual payments are approximately $8.9 million with annual
escalators.
About the Company
Omega is a Real Estate Investment Trust investing in and providing
financing to the long-term care industry. At December 31, 2004,
the Company owned or held mortgages on 221 skilled nursing and
assisted living facilities with approximately 23,105 beds located
in 29 states and operated by 42 third-party healthcare operating
companies.
* * *
As reported in the Troubled Company Reporter on Nov. 2, 2004,
Fitch Ratings published a credit analysis report on Omega
Healthcare Investors, Inc., providing insight into Fitch's
rationale for its ratings of:
-- $300 million of outstanding senior unsecured notes 'BB';
-- $168 million of preferred stock 'B'.
The Rating Outlook is Stable.
ORECK CORPORATION: S&P Puts 'B+' Rating on $210 Million Sr. Debt
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to vacuum cleaner manufacturer and distributor Oreck
Corporation.
At the same time, Standard & Poor's assigned its 'B+' rating and a
recovery rating of '4' to Oreck's proposed $210 million senior
secured bank facilities, indicating that the secured lenders can
expect marginal (25%-50%) recovery of principal in the event of
default. The bank loan rating and accompanying analysis are based
on preliminary documentation and subject to review once final
documentation has been received.
The outlook is stable. Pro forma for the transaction, New
Orleans, Louisiana-based Oreck will have approximately
$193.5 million of debt outstanding.
Net proceeds from the bank term loan will refinance the company's
existing indebtedness (which partially funded the company's 2003
LBO), fund a shareholder dividend, pay related fees and expenses,
and provide for ongoing general corporate purposes.
"The ratings on Oreck reflect its narrow business focus, limited
geographic diversification, the discretionary nature of its
products, and aggressive financial profile," said Standard &
Poor's credit analyst Jean C. Stout.
OWENS CORNING: Court Approves Financial Balloting Group as Agent
----------------------------------------------------------------
William C. Bettinger, Esq., at Pepper Hamilton, LLP, in
Wilmington, Delaware, relates that on February 25, 2003, Owens
Corning and its debtor-affiliates engaged Innisfree M&A
Incorporated to be their special noticing, balloting and
tabulation agent.
The Debtors now seek to justify a termination of their agreement
with Innisfree on the ground that Jane Sullivan -- who was an
Innisfree employee at the time that agreement was executed -- has
since left Innisfree and joined Financial Balloting Group, LLC.
"The Debtors' understated and apparently primary concern seems to
be that their termination of Innisfree, in the face of a clear
Agreement, would constitute a breach of contract giving rise to a
claim by Innisfree, and to a hearing in order to ascertain the
amount of damages resulting from that breach," Mr. Bettinger
notes.
In their proposed Order, the Debtors ask the United States
Bankruptcy Court for the District of Delaware to declare, among
other things, that "Innisfree shall have no claim against the
Debtors or any of the Debtors' officers, directors, employees
and/or attorneys arising from or relating to such termination
and/or this Order."
According to Mr. Bettinger, it is easy to see why the Debtors feel
a need to be granted special protection against the consequences
of their own breach since their Agreement with Innisfree contains
no provision releasing the Debtors from their contractual
commitments in the event of Ms. Sullivan's departure.
"The Agreement, moreover, was explicitly made by the Debtors with
Innisfree, not with Ms. Sullivan. And it is signed on behalf of
Innisfree by co-chairman Alan M. Miller, certainly not by Ms.
Sullivan," Mr. Bettinger adds. "Nor does the Agreement allow for
termination without cause."
Mr. Bettinger tells the Court that the Debtors have already
purported to terminate the Agreement with Innisfree but seek
nonetheless to be relieved of all consequences for that breach.
"We submit that there is no justification for granting that
portion of the Debtors' proposed Order. If the Debtors continue
in their decision not to utilize Innisfree's services any longer,
Innisfree cannot, and does not seek to, force them to do so. Nor
does Innisfree wish to take a position opposing the Court's
authorization of the Debtors' engagement of FBG," Mr. Bettinger
asserts.
The Order, Mr. Bettinger says, ought merely to state that the
earlier agreement with Innisfree has been terminated by Owens
Corning and provide for a reasonable time limit in which
Innisfree may file its application with the Court for the
allowance and payment of an administrative expense claim, to be
determined after notice and hearing.
* * *
The Court approves the Debtors' retention, employment,
compensation, and reimbursement of FBG, nunc pro tunc to
November 10, 2004.
Judge Fitzgerald vacates her prior order authorizing Innisfree to
serve as the Debtors' special noticing, balloting and tabulation
agent. The Innisfree Agreement is terminated. The Debtors are
authorized to pay any amounts due to Innisfree on account of its
services.
Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts. The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
represents the Debtors in their restructuring efforts. At
Sept. 30, 2004, the Company's balance sheet shows $7.5 billion in
assets and a $4.2 billion stockholders' deficit. The company
reported $132 million of net income in the nine-month period
ending Sept. 30, 2004. (Owens Corning Bankruptcy News, Issue No.
91; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PACIFIC ENERGY: Sale to Lehman Cues S&P to Lower Rating to 'BB'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Pacific Energy Partners L.P. (Pacific Energy) to 'BB'
from 'BB+' as a result of the sale by The Anschutz Corporation of
the general partner to Lehman Brothers Merchant Banking (Lehman
Brothers).
The ratings were removed from CreditWatch, where they were placed
on Nov. 1, 2004. The outlook is now stable.
At the same time, Standard & Poor's assigned its 'B-' corporate
credit rating and bank loan rating, as well as a stable outlook to
LB Pacific L.P. and its proposed $170 million senior secured term
loan. LB Pacific is being formed by Lehman Brothers to purchase
Pacific Energy's general partner and another approximate 35%
ownership stake through subordinated equity units.
Long Beach, California-based crude oil transporter Pacific Energy
has about $340 million of debt.
"Standard & Poor's believes the change in Pacific Energy's general
partner will result in a new strategic direction and accelerated
growth that will raise the company's business risk," said Standard
& Poor's credit analyst Todd Shipman. "The additional debt
employed by LB Pacific to finance the purchase will further stress
the overall financial position of Pacific Energy," he continued.
The new owner is expected to redirect corporate strategy to
emphasize expansion opportunities and diversify into commodities
other than the core crude oil transportation and storage
activities. While ultimately such growth and diversification
could lead to improved credit quality, the risks surrounding the
new strategy will negatively affect Pacific Energy's credit
quality until such time as the company can demonstrate its ability
to achieve the desired growth and diversification without
impairing the quality of its cash flow and the combined strength
of the balance sheets of Pacific Energy and LB Pacific.
The outlook is stable, based on Standard & Poor's expectation that
future growth will be accomplished with internal projects and
prudent acquisitions that are financed with roughly equal amounts
of debt and equity. Any new businesses entered into are expected
to display characteristics appropriate to the company's
partnership structure, including mostly stable cash-generating
assets with little associated commodity price risk.
PARMALAT: Court Okays U.S. Debtors' Revised Disclosure Statement
----------------------------------------------------------------
Judge Drain finds that the Parmalat U.S. Debtors' Disclosure
Statement, as revised, contains adequate information within the
meaning of Section 1125 of the Bankruptcy Code. Accordingly,
Judge Drain approves the revised Disclosure Statement.
The U.S. Debtors will distribute to entities entitled to vote on
the Plan a copy of the revised Disclosure Statement and Plan of
Reorganization filed on January 13, 2005. The revised Disclosure
Statement and Plan reflect technical modifications and minor
adjustments. The changes also reflect results of certain
settlements and stipulations relevant to the implementation of
the Debtors' Plan.
A black-lined version of the revised Disclosure Statement is
available for free at:
http://bankrupt.com/misc/Disclosure_Statement_blacklined.pdf
A black-lined version of revised Plan of Reorganization is
available for free at:
http://bankrupt.com/misc/Chapter_11_Plan_blacklined.pdf
The Court will hold a hearing on March 1, 2005, to consider
confirmation of the U.S. Debtors' Plans. Objections must be
filed no later than 4:00 p.m. on February 18, 2005.
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. 39; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PARMALAT USA: Farmland Can Pay Fees for Proposed Exit Financing
---------------------------------------------------------------
A key component of and a condition precedent to Farmland Dairies,
LLC's ability to emerge from Chapter 11 under its Plan of
Reorganization is obtaining a working capital credit facility or
facilities that will provide Reorganized Farmland with the
necessary financing to:
-- repay its DIP facility,
-- fund certain payments under the Plan, and
-- operate its business after the effective date of the Plan.
Farmland currently anticipates a $100,000,000 exit financing
facility. Approximately $55,000,000 of that amount will likely be
provided by one of the potential lenders.
To that end, Farmland's investment banker, Lazard Freres and Co.,
LLC, prepared and delivered an informational memorandum and
related diligence materials regarding the Exit Financing to a
number of potential lenders. Based on those materials, several
potential lenders submitted initial proposals to Lazard. After
reviewing the proposals, Farmland decided to pursue further
discussions with three potential lenders that provided the most
reasonable offer. Lazard then conducted management presentations
with each of the potential lenders, and certain of the potential
lenders subsequently submitted revised proposals to Lazard. Each
of the revised proposals contained terms more favorable to
Farmland than the initial proposals had contained.
As a condition to pursuing the possibility of providing the exit
financing to Farmland, the potential lenders are each seeking
deposits designed to cover the costs of their filed examinations
and certain related preliminary legal due diligence. The
potential lenders' draft proposal letters generally provide that
any unused deposits will either be returned to Farmland in the
event that a potential lender's internal credit approval to
provide the exit financing is obtained but Farmland fails to close
with that potential lender. The potential lenders also require
Farmland to pay reasonable fees and out-of-pocket legal and other
expenses as a condition to signing the proposal letters and the
commitment letters. The fees and expenses include certain costs,
like appraisals, which Farmland could directly incur. Farmland
believes that the deposit, and the fees and expenses sought by the
potential lenders are typical for transactions similar to the exit
financing and are at market rates for those types of deposits and
fees and expenses.
Accordingly, Farmland sought and obtained the United States
Bankruptcy Court for the Southern District of New York's authority
to pay the deposits and the fees and expenses for up to three of
the potential lenders in an amount not to exceed $300,000 in the
aggregate.
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. 39; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PRESIDION SOLUTIONS: Completes $25 Mil. Financing with Mirabilis
----------------------------------------------------------------
Presidion Solutions (OTC Bulletin Board: PSDI.OB), a leading
provider of human resources management services to small and mid-
sized companies, closed the previously announced transaction with
Mirabilis Ventures effective on Dec. 31, 2004. The transaction
will provide $25 million in capital assets, for which Mirabilis
received the equivalent amount of preferred equity and an option
to acquire up to 25% of Presidion's common stock at the current
market price. Mirabilis has also named two individuals to
Presidion's board of directors.
"The completion of this transaction, along with the other
accomplishments announced over the past two months, including debt
restructuring, the placement of convertible preferred stock, board
changes and marketing partnerships, positions Presidion to enter
2005 as a strong and energized company," said Craig A. Vanderburg,
President and Chief Executive Officer. "The Professional Employer
Organization (PEO) industry continues to grow rapidly as companies
realize the value of outsourcing human resources management, and
our target market of small and medium-sized companies is one that
Presidion is particularly well qualified to serve. We intend to
continue creating value for our investors in the coming year by
further strengthening our balance sheet and executing on our
growth strategy."
About Presidion Corporation
Presidion Corporation -- http://www.presidion.com/-- is one of
the largest Professional Employer Organizations (PEO) in the
United States. With more than 1,900 client companies, Presidion
provides human resources, regulatory compliance and employee
benefits management services to approximately 29,000 worksite
employees. The Company's operations are headquartered in Jupiter,
FL and supported by sales and services offices throughout its
market area of Florida, Georgia. South Carolina and Michigan.
About Mirabilis Ventures
Mirabilis Ventures is a leading provider of financial and
investment services. Mirabilis utilizes a unique blend of
multiple disciplines enhancing national and global expertise in
specialized industries and creating a strong reserve of capital
and knowledge in one exceptional network. For more information,
visit http://www.mirabilisventures.com/
At Sept. 30, 2004, Presidion Corporation's balance sheet showed a
$5,384,671 stockholders' deficit, compared to $514,035 deficit at
Dec. 31, 2003.
PRESTIGE BRANDS: Moody's Affirms Senior Secured Ratings at B1
-------------------------------------------------------------
Moody's Investors Service confirmed the B1 ratings on the first
lien senior secured credit facilities of Prestige Brands, Inc.,
and reiterated its review for possible upgrade on Prestige's other
long-term ratings that began on December 2, 2004.
The review continues to reflect the prospects for improved
liquidity and debt protection measures given Prestige Brands'
stated plans to reduce debt with proceeds from its proposed $415
million initial public equity offering. Prestige's funded
leverage may decline to around 4.8x EBITDA from pro forma levels
at September 2004 of around 6.5x, and interest coverage may
improve to over 4.0x from just under 3.0x. Moody's believes that
these prospective credit metrics would comfortably position
Prestige within the B1 senior implied rating category.
Importantly, Moody's notes that the planned transactions do not
contemplate the reduction of the first lien senior secured debt
class. Under the pro forma capital structure, these facilities
will represent the vast majority of outstanding debt and will not
have improved enterprise value or tangible asset coverage
positions. Moody's does not anticipate notching the facilities
above the senior implied rating and has confirmed their B1
ratings.
The terms of a proposed amendment to Prestige Brands' credit
agreement are consistent with the potential senior implied ratings
upgrade, as planned pricing reductions will supplement the cash
flow and liquidity improvements from the IPO-related debt
repayment, and planned covenant tightening will limit the
company's ability to return to its high current debt levels.
Although financial covenants will be adjusted to reflect the
capital structure changes, EBITDA cushions are anticipated to
improve from current single digit percentage levels to a more
customary 15-20% range. Tight covenant cushions have been the key
restraint to Prestige Brands' speculative grade liquidity rating,
and more flexible levels are likely to favor an upgrade to SGL-2
from SGL-3. Further support for raising the liquidity rating
stems from the prospective cash flow benefits from lower debt
levels and pricing, a planned $10 million increase in Prestige's
revolving credit facility, and a relaxation of cash flow sweep
provisions in the credit agreement.
Moody's review will continue to focus on the success and magnitude
of the deleveraging transactions, and on the final terms of its
credit agreement amendment.
The ratings confirmed were:
-- $50 million senior secured revolving credit facility due
April 6, 2009, B1;
-- $373 million senior secured term loan facility due
April 6, 2009, B1.
The ratings under review for possible upgrade:
-- Senior implied rating, B2;
-- $100 million second lien senior secured term loan C facility
due October 6, 2011, B2;
-- $210 million 9.25% senior subordinated notes due
April 15, 2012, Caa1;
-- Senior unsecured issuer rating, B3.
Prestige Brands, Inc., headquartered in Irvington, New York, is a
provider of branded consumer products in the OTC, Household and
Personal Care segments, with brands including Compound W,
Chloraseptic, Comet, and Spic and Span. The Company was formed by
GTCR Golder Rauner to acquire Medtech Holdings, Inc., The Denorex
Company, the Spic and Span Company, and Bonita Bay Holdings from
February to April 2004. Pro forma sales for the twelve-month
period ended September 2004 (excluding Little Remedies) were
approximately $290 million.
PRINTS PLUS INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Prints Plus, Inc.
100 Cambridge Side Place
Cambridge, Massachusetts 02141
Bankruptcy Case No.: 05-10220
Type of Business: The Debtor provides printing services.
Chapter 11 Petition Date: January 11, 2005
Court: District of Massachusetts (Boston)
Judge: Joan N. Feeney
Debtor's Counsel: Alex F. Mattera, Esq.
John G. Loughnane, Esq.
Gadsby Hannah LLP
225 Franklin Street
Boston, MA 02110
Tel: 617-345-7025
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
EMAFYL Trade debt $146,911
c/o Marine Midland Bank
P.O. Box 10014
Church Street Station
New York, NY 10259
Freight Management Inc. Trade debt $135,464
2900 E. La Palma Ave.
Anaheim, CA 92806
Portal Publications Trade debt $64,357
P.O. Box 6172
Novato, CA 94948
About Frames Trade debt $59,457
Box #123
Herscher, IL 60941
Golden Art, Inc. Trade debt $58,385
Scorpio Posters, Inc. Trade debt $53,182
Colorplak Trade debt $51,620
Bunzl Extrusion Trade debt $49,052
Comyns, Smith, McCleary & Co Trade debt $45,994
MCS Industries Inc. Trade debt $43,903
New York Graphic Society Trade debt $39,449
Royal Mouldings Limited Trade debt $35,638
Alcan Composites USA Trade debt $33,999
Williamson Trade debt $31,401
N.M.R. Distribution Inc. Trade debt $31,002
The Art Group Limited Trade debt $30,785
Bruce McGaw Graphics, Inc. Trade debt $28,859
Crescent Cardboard Co. LLC Trade debt $25,187
Import Images Trade debt $20,889
A.D. Lines Trade debt $19,821
QUANTEGY INC: Wants Until Feb. 25 to File Schedules & Statements
----------------------------------------------------------------
Quantegy, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Middle District of Alabama for an extension until
Feb. 25, 2005, to file their Schedules of Assets and Liabilities
and Statements of Financial Affairs.
The Debtors explain that since their businesses are located in
various locations, it is very time-consuming and difficult for
them to gather in so short a time all the necessary information to
accurately complete their Schedules and Statements.
Headquartered in Opelika, Alabama, Quantegy, Inc. --
http://www.quantegy.com/-- provides a full line of audio, video,
data, storage, logging and instrumentation recording media
products. The Company along with its debtor-affiliates filed for
chapter 11 protection on Jan. 10, 2005 (Bankr. M.D. Ala. Case No.
05-80042). Cameron-RRL A. Metcalf, Esq., at Espy, Metcalf &
Poston, PC, represents the Debtors in their restructuring efforts.
When Quantegy, Inc., filed for protection from its creditors, it
estimated assets between $1 million and $10 million and debts
between $10 million to $50 million.
REALM NATIONAL: S&P Junks Credit & Financial Ratings
----------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
and financial strength ratings on Realm National Insurance Company
(RNIC) to 'CCCpi' from 'BBpi'.
The downgrade reflects the company's weak capitalization and
operating performance, poor liquidity, and high geographic
concentration.
Based in New York, RNIC writes general casualty insurance covers
and commercial fire and allied lines. In 2003, RNIC ceased
workers' compensation and other lines of business. The company,
which commenced operations in 1892, is licensed to operate in 24
states. As of Feb. 5, 2004, Alpha Star Insurance Group Ltd.
(Parent) and Stirling Cooke North American Holdings Ltd. (Ultimate
Parent) have entered into a purchase and sale agreement to sell
the company and provide additional surplus funds. The Federal
Bankruptcy Court has approved the agreements. The auction sale of
the company pursuant to the Bankruptcy Code was held on March 4,
2004. Pursuant to the auction process sanctioned by the Court,
the successful bidder was confirmed by the Court on March 9, 2004,
and an initial contribution of approximately $1 million was
made on March 26, 2004, to boost the company's surplus.
The company is rated on a stand-alone basis.
Ratings with a 'pi' subscript are insurer financial strength
ratings based on an analysis of an insurer's published financial
information and additional information in the public domain. They
do not reflect in-depth meetings with an insurer's management and
are therefore based on less comprehensive information than ratings
without a 'pi' subscript. Ratings with a 'pi' subscript are
reviewed annually based on a new year's financial statements, but
may be reviewed on an interim basis if a major event that may
affect the insurer's financial security occurs. Ratings with a
'pi' subscript are not subject to potential CreditWatch listings.
RCN CORP: Registers New Common Stock & Warrants with SEC
--------------------------------------------------------
As of December 21, 2004, the Effective Date of the Joint Plan of
Reorganization of RCN Corporation and certain subsidiaries, all of
the then outstanding securities of RCN, including its existing
common stock, preferred stock and warrants, were cancelled and
deemed extinguished.
In accordance with the Plan, RCN is issuing, as of the Effective
Date:
-- new common stock, par value $0.01 per share, to holders
of Allowed Class 5 General Unsecured Claims; and
-- warrants pursuant to the Warrant Agreement between RCN and
the Warrant Agent dated December 21, 2004, with the
warrants to be issued to Holders of Class 7 Preferred
Interests who voted to accept the Plan and the holders of
Class 8 Equity Interests.
The New Common Stock and New Warrants will be distributed to
holders of the claims subject to the establishment of certain
reserves for claims. RCN also issued 7.375% Convertible Second-
Lien Notes due 2012 on the Effective Date, pursuant to the Note
Purchase Agreement between RCN, certain Guarantors and the
Purchasers of the Notes listed in Schedules II and III to the
Agreement dated December 21, 2004. The initial sale of the Notes
was exempt from registration as a private placement pursuant to
Section 4(2) of the Securities Act of 1933, as amended.
On December 27, 2004, the Company filed a Form 8-A with the
Securities and Exchange Commission to register the Warrants and
the Common Stock.
Under the Plan, the authorized capital stock of the Company will
consist of 100,000,000 shares of New Common Stock, of which
36,020,850 shares are issued and outstanding as of the Effective
Date. As of December 27, 2004, the Company is authorized to
issue 20,000,000 shares of New Preferred Stock.
Approximately 735,119 New Warrants to purchase New Common Stock
were issued on the Effective Date.
Summary descriptions of the New Common Stock and the New Warrants
are available for free at:
http://sec.gov/Archives/edgar/data/1041858/000095017204003121/nyc517493.txt
Headquartered in Princeton, New Jersey, RCN Corporation --
http://www.rcn.com/-- provides bundled Telecommunications
services. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13638) on
May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman,
Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $1,486,782,000 in
assets and $1,820,323,000 in liabilities. (RCN Corp. Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
SCOTT RANCH INC: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Scott Ranch Inc.
P.O. Box 1245
Choteau, Montana 59422
Bankruptcy Case No.: 05-60078
Type of Business: Ranching
Chapter 11 Petition Date: January 13, 2005
Court: District of Montana (Butte)
Judge: Ralph B. Kirscher
Debtor's Counsel: Steven M. Johnson, Esq.
P.O. Box 1645
Great Falls, MT 59403
Tel: 406-761-3000
Total Assets: $7,629,000
Total Debts: $2,571,070
The Debtor did not file a list of its 20-largest creditors.
SHOWTIME ENTERPRISES: Case Summary & Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Showtime Enterprises, Inc.
1240 Forest Parkway, Suite 100
Paulsboro, New Jersey 08066
Bankruptcy Case No.: 05-11089
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Showtime Enterprises West, Inc. 05-11090
Type of Business: The Debtor provides creative design and high
quality fabrication. The Debtor's full-service
portfolio includes trade show and museum
exhibits, corporate interiors, event management,
retail merchandising displays and environments
as well as corporate gifts & incentives.
See http://www.showtimeinc.com/
Chapter 11 Petition Date: January 12, 2005
Court: District of New Jersey (Camden)
Judge: Judith H. Wizmur
Debtors' Counsel: Rocco A. Cavaliere, Esq.
Blank Rome LLP
405 Lexing Avenue
New York, New York 10174
Tel: (212) 885-5000
Fax: (212) 885-5002
Estimated Assets Estimated Debts
---------------- ---------------
Showtime Enterprises, Inc. $1M to $10M $1M to $10M
Showtime Enterprises West, Inc. $1M to $10M $1M to $10M
A. Showtime Enterprises, Inc.'s 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Trammel Crow $210,036
MEPT Forest Park, Building 18
Memphis, Tennessee 38148-0149
Willwork $177,498
23 Norfolk Avenue
South Easton, Massachusetts 02375
Attn: Bill Nixon
Tel: (508) 230-3170
Zenith Labor Net $97,222
1569 Stone Ridge Drive
Stone Mountain, Georgia 30083
Ultimate Display International $94,555
100 Spence Street
Bay Shore, New York 11706-2231
Bekins Van Lines $94,170
Department 1701
135 South LaSalle
Chicago, Illinois 60674-1701
Convention Services $79,417
Midland Metal Products $72,135
Wiresmith Displays $68,850
Janis Plastics Inc. $48,900
Jevic Transportation Inc. $47,650
Bohren's United Van Lines $46,438
Teamwork Labor Services Inc. $31,040
Indian Country $30,040
Penn Hudson Financial Group Inc. $29,345
Hollywood Rentals $29,291
Copernicus $28,000
Laser Exhibitor Service $25,359
Panel Processing $24,603
Bruck 3D $23,959
NPC $22,312
B. Showtime Enterprises West, Inc.'s 20 Largest Unsecured
Creditors:
Entity Claim Amount
------ ------------
Willwork $94,798
23 Norfolk Avenue
South Easton, Massachusetts 02375
Bekins Van Lines $94,170
Department 1701
135 South LaSalle
Chicago, Illinois 60674-1701
Inside Track $32,000
1486 Vernon North Drive
Atlanta, Georgia 30338
Zenith Labor Net $29,655
2535 Royal Place
Tucker, Georgia 30084
Showtronix $17,800
Aero Logistics $9,650
Agam Group Ltd $7,432
Emery Worldwide $5,321
Austin Hardwoods $5,021
Quality Design Products $4,993
Ilford $3,941
Laird Plastics $3,876
DSA Phototech Inc. $3,426
Gordon & Silver, Ltd. $3,234
Tier Rack Corporation $2,738
Montroy Supply Company $2,397
McMaster Carr Supply $1,858
Safety Kleen Systems $1,682
Display Supply & Lighting $1,551
Fusion Specialties, Inc. $1,031
SHOWTIME ENTERPRISES: Sparks Inks Pact to Acquire All Assets
------------------------------------------------------------
Sparks Exhibits & Environments Corp., a subsidiary of Marlton
Technologies, Inc. (AMEX:MTY), has signed an agreement to acquire
substantially all of the assets of Showtime Enterprises, Inc.,
Also, Sparks has acquired an option to purchase from Showtime
investors their secured subordinated debt of Showtime, in the
event the Showtime acquisition is consummated by Sparks. Showtime
designs, markets and produces trade show exhibits, point-of-
purchase displays, museums and premium incentive plans, with
primary production facilities in Paulsboro, N.J. and Las Vegas,
Nevada. Showtime had sales of approximately $21 million in 2004,
and recently filed for protection under Chapter 11 of the
bankruptcy laws. The agreement is subject to a number of
conditions, including approval by the bankruptcy court and there
can be no assurance that closing under the agreement will occur.
Scott Tarte, Vice Chairman of Marlton, said "We are extremely
excited to have the opportunity to join forces with the talented
individuals at Showtime. We have been highly impressed with their
experience, professionalism and corporate culture, as well as
their dedication to their customers. The combination of our two
entities would broaden our respective capabilities and ultimately
yield many new benefits for our clients. They would bring to
Sparks a great culture and share our passion for creativity and
customer service. The combination of our two organizations would
add size and scale, allowing us to be an even greater force in our
industry."
About Marlton Technologies
Marlton Technologies, Inc., through its Sparks Exhibits &
Environments and DMS Store Fixtures subsidiaries, is engaged in
the design, marketing and production of trade show, museum, theme
park and themed interior exhibits, store fixtures and point of
purchase displays.
Headquartered in Paulsboro, New Jersey, Showtime Enterprises, Inc.
-- http://www.showtimeinc.com/-- provides creative design and
high quality fabrication. The Debtor's full-service portfolio
includes trade show and museum exhibits, corporate interiors,
event management, retail merchandising displays and environments
as well as corporate gifts & incentives. The Company and its
debtor-affiliates filed for chapter 11 protection on Jan. 12, 2005
(Bankr. D. N.J. Case No. 05-11089). Rocco A. Cavaliere, Esq., at
Blank Rome LLP, represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they each estimated between $1 million to $10 million
in total assets and debts.
SOLECTRON CORP: Offering to Exchange $450-Mil Notes for New Notes
-----------------------------------------------------------------
Solectron Corporation (NYSE:SLR) has commenced an offer to
exchange all of its outstanding 0.50 percent convertible senior
notes due 2034 for an equal amount of its newly issued 0.50
percent convertible senior notes, series B due 2034 and cash.
The purpose of the exchange offer is to exchange outstanding notes
for new notes with certain different terms, including the type of
consideration Solectron will use to pay holders who convert their
notes. Among their features, the new notes are convertible into
cash or, at Solectron's election, a combination of cash and shares
of its common stock, subject to certain conditions, while the
outstanding notes are convertible solely into Solectron's common
stock. This change will facilitate Solectron's use of the
treasury stock method of accounting for the shares issuable upon
conversion of the new notes. As of Jan. 13, $450 million
aggregate principal amount of the outstanding notes was
outstanding.
In accordance with the terms and subject to the conditions of the
exchange offer, for each validly tendered and accepted $1,000
principal amount of outstanding notes, Solectron is offering to
exchange:
-- $1,000 principal amount of its new notes, and
-- $2.50 in cash.
The full terms of the exchange offer, a description of the new
notes and the differences between the new notes and the
outstanding notes and other information relating to the exchange
offer and Solectron are explained in a Registration Statement on
Form S-4 and the included prospectus filed with the Securities and
Exchange Commission on Jan. 13.
The exchange offer for the outstanding notes will expire at
midnight, New York City time, on Thursday, Feb. 10 of this year,
unless earlier terminated or extended by Solectron. Tendered
outstanding notes may be withdrawn at any time prior to midnight
on the expiration date. The completion of the exchange offer is
subject to conditions described in the documents related to the
exchange offer, which include the exchange not resulting in any
adverse tax consequences for Solectron and certain other customary
conditions. Subject to applicable law, Solectron may waive
certain other conditions applicable to the exchange offer or
extend, terminate or otherwise amend the exchange offer.
The dealer manager for the exchange offer is Goldman, Sachs & Co.
The exchange agent for the exchange offer is U.S. Bank National
Association. The information agent for the exchange offer is
Georgeson Shareholder Communications Inc. Any questions regarding
procedures for tendering the outstanding notes or requests for
additional copies of the prospectus and related documents, which
are available for free and which describe the exchange offer in
greater detail, should be directed to:
Georgeson Shareholder Communications Inc.
17 State Street
10th Floor
New York, NY 10004
Bank and Brokers call: +1 (212) 440-9800
All others call toll-free: +1 (800) 460-0079
Holders should read the registration statement and related
exchange offer materials when they become available because they
contain important information. Holders can obtain a copy of the
registration statement and other exchange offer materials free of
charge from the SEC's Web site at http://www.sec.gov/
The company's board of directors is not making any recommendation
to holders of outstanding notes as to whether or not they should
tender any outstanding notes pursuant to the exchange. A
registration statement relating to these securities has been filed
with the Securities and Exchange Commission but has not yet become
effective. These securities may not be sold nor may offers to buy
be accepted prior to the time the registration statement becomes
effective. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any
sales of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
Solectron Corporation -- http://www.solectron.com/-- provides a
full range of worldwide manufacturing and integrated supply chain
services to the world's premier high-tech electronics companies.
Solectron's offerings include new-product design and introduction
services, materials management, product manufacturing, and product
warranty and end-of-life support. The company is based in
Milpitas, California, and had sales from continuing operations of
$11.64 billion in fiscal 2004.
* * *
As reported in the Troubled Company Reporter on Jan. 13, 2005,
Fitch Ratings affirmed Solectron Corporation's debt ratings:
-- 'BB-' senior unsecured debt;
-- 'BB+' senior secured bank credit facility;
-- 'B' subordinated debt.
The Rating Outlook is Stable. Approximately $1.2 billion of debt
is affected by Fitch's action.
The ratings reflect Solectron's ongoing relatively weak, albeit
improving, operating performance versus tier-1 electronic
manufacturing services -- EMS -- peers, less than optimal capacity
utilization rates, and expectations for flat revenue growth for
fiscal 2005. Additionally, the contract pricing environment
remains pressured, particularly for traditional electronics
manufacturing services, which continue to represent the majority
of industry revenues despite efforts to expand service offerings.
STELCO INC: Steelworkers Director Challenges Bankruptcy Filing
--------------------------------------------------------------
United Steelworkers National Director Ken Neumann has challenged
Stelco CEO Courtney Pratt to either admit that filing for
bankruptcy protection was a sham or else disassociate the company
from the Deutsche Bank Proposal, which does not address pension
plan deficiencies.
The challenge comes in response to statements made by Mr. Pratt in
December that pension plan deficiencies are not part of the
restructuring under the Companies Creditors Arrangement Act
(CCAA).
". . .A key basis . . . for Stelco's application for Court
protection from creditors was its assertion that the pension
deficit was an obligation that so overwhelmed the value of
Stelco's assets as to make the company insolvent," said Mr.
Neumann in a faxed letter to Mr. Pratt. "It is doubtful in the
extreme that Stelco would have been granted insolvency protection
without the representations it made about the pension deficit.
"(Chief Restructuring Officer) Hap Stephen swore before the Court
that in a fairly conducted sale under legal process, the value of
Stelco's working capital and other assets would be greatly
impaired by the increased pension deficiencies that would be
generated on a wind-up of the pension plans.
"If Stelco now takes the position that the restructuring process
will not address the pension deficiency . . . we assume that you
take the position that Stelco will remain insolvent upon its exit
from CCAA."
Mr. Neumann asked Mr. Pratt to advise whether Stelco "now
disapproves of its earlier position, the sworn statements of . . .
Mr. Stephen and its position in front of the Court, the Court of
Appeal and the Supreme Court of Canada."
The Steelworkers' challenge to Stelco's reasons for claiming
bankruptcy protection last January were dismissed by all three
judicial levels.
". . . We expect that Stelco will either (a) request that the
Supreme Court reconsider its refusal to grant the union leave to
appeal, or (b) disavow your statement of December 22 and agree
with the union and others that the pension funding issues must
fact be addressed with this restructuring," said Mr. Neumann.
"In that regard, we would of course also expect that you would
disassociate yourself with the Deutsche Bank Proposal, in that it
does not address this problem and in fact makes it worse."
The bottom line, said Mr. Neumann, is that Mr. Pratt's December
statements indicate that either Stelco was never insolvent or that
the company has signed on to a deal that will still leave it
insolvent once it emerges from CCAA.
About the Company
Stelco, Inc. -- http://www.stelco.ca/-- which is currently
undergoing CCAA restructuring proceedings, is a large, diversified
steel producer. Stelco is involved in all major segments of the
steel industry through its integrated steel business, mini-mills,
and manufactured products businesses. Consolidated net sales in
2003 were $2.7 billion.
SYNIVERSE TECHNOLOGIES: Moody's Puts Ba3 Rating on $290 Mil. Loan
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to the proposed
new $290 million senior credit facilities, comprised of a $240
million term loan B and a $50 million revolver, for Syniverse
Technologies, Inc. Moody's also placed the Company's senior
implied and other ratings on review for possible upgrade pending
completion of the company's IPO.
The ratings on review for possible upgrade are:
-- Senior implied rating -- B1
-- Issuer rating -- B2
-- 12.75% million senior subordinated notes due 2009 B3
The new ratings have been are:
-- New $240 million secured term loan B -- Ba3
-- New $50 million secured revolving credit facility -- Ba3
Syniverse Technologies has launched a major refinancing that
includes an initial public offering of common equity and a new
$290 million credit facility. Proceeds from this new capital will
be used to retire 35% of the 12.75% senior subordinated notes
outstanding (approximately $85 million), refinance the company's
existing term loan B, redeem a portion of the company's class A
convertible preferred stock. Moody's expects to withdraw the Ba3
ratings on the existing credit facilities upon closing of the
proposed transaction.
Upon successful completion of the IPO and associated transactions
as described above, Moody's intends to upgrade the senior implied
rating of Syniverse Technologies to Ba3, reflecting an improved
financial profile, pro forma for the pending transactions, as
total debt balances will be reduced approximately 13%. Interest
expense will also decline thereby improving free cash flow
generation.
The ratings are also supported by Syniverse Technologies' solid
market position as a provider of transaction processing and
interoperability services to wireless carriers. The ratings are
constrained somewhat by the competitive operating environment for
the company, that is exacerbated by the consolidation occurring
among its wireless carrier customers.
The Ba3 rating assigned to the senior secured bank debt reflects
the large share of the company's capital structure these
obligations will comprise at roughly 60% of the pro forma total
debt, compared to the 46% bank debt share of total debt
outstanding September 30, 2004. These lenders will continue to
benefit from a complete collateral and guarantee package from the
company's domestic subsidiaries.
Demonstrating Syniverse Technologies' good free cash flow
capacity, prior to the $53.7 million acquisition of the wireless
clearinghouse business of Electronic Data Systems in September
2004, Syniverse had repaid over $100 million of bank debt since
its LBO February 2002, despite a prolonged period of revenue
declines. Top line performance improved dramatically in 2004 with
total revenue increasing 23% in 2004 over 2003, and EBITDA growing
16.2%.
Moody's does not expect these double digit growth rates to
continue, but does expect that Syniverse will be able to continue
to grow its revenues and cash flows as domestic wireless calling
and transaction volumes continue to increase and the company gains
share both domestically and internationally.
Moody's expects the proposed new capital structure of the company
to materially improve the financial profile of the company
reducing total debt by approximately $60 million and reducing cash
interest expense by over $6 million in 2005. The combination of
lower debt and higher free cash flow improves the company's free
cash flow to total debt metric close to 20%, up from roughly 10%
for the LTM through September 2004.
Based in Tampa, Florida, Syniverse Technologies, Inc., is a
provider of technology outsourcing to wireless telecommunications
carriers with LTM ended 9/30/2004 net revenues of $288 million.
TEREX CORPORATION: Needs to Restate 2001 to 2003 Financials
-----------------------------------------------------------
Terex Corporation has filed a Form 8-K with the Securities and
Exchange Commission disclosing that management of Terex and the
Audit Committee of the Board of Directors of Terex have concluded
that the financial statements of Terex for the years ended
December 31, 2001, 2002 and 2003 need to be restated to correct
certain errors and, accordingly, such financial statements should
no longer be relied upon.
As previously disclosed on October 28, 2004, Terex commenced a
detailed internal examination of its intercompany transactions in
an effort to reconcile imbalances in certain of Terex's accounts.
Management of Terex has conducted this examination and kept the
Board of Directors of Terex, the Audit Committee and
PricewaterhouseCoopers, LLC, Terex's independent registered
accounting firm, informed of the progress of this examination on a
regular basis. In addition, as previously reported, the Audit
Committee has retained independent counsel to advise it with
respect to this matter and authorized such counsel to conduct an
independent investigation into the circumstances giving rise to
the imbalances.
While Terex's review activities are still ongoing, significant
progress has been made in identifying and correcting the
intercompany transactions giving rise to the imbalances. Although
management has not made a final determination of all of the
adjustments necessary or as to the periods in which all of the
correcting entries will be made, Terex currently believes that:
i) the substantial portion of the adjustments to Terex's
financial statements relate to periods in 2002 and earlier;
and
ii) in management's opinion, the cumulative adjustments
required to be made to shareholders' equity at December 31,
2003, resulting from all errors identified to date are
expected not to be material to total shareholders' equity,
as analyzed in accordance with applicable SEC and
accounting guidelines.
Until the conclusion of Terex's internal review activities and the
completion of procedures by Terex's independent registered
accounting firm, there can be no assurance that there will not be
additional errors discovered that may affect the periods indicated
above, which may impact management's determination of the effect
of the adjustments necessary to correct any misstatements, or
which may require Terex to determine that financial statements of
Terex for other fiscal years should no longer be relied upon.
Upon completion of its examination of the above-described
imbalance situation, Terex intends to file appropriate amendments
to its filings with the SEC for the applicable periods as may be
necessary, including restated financial statements for such
periods to the extent required. While no assurance can be given,
Terex currently expects that it will complete its review and be in
a position to file its Annual Report on Form 10-K for the year
ended December 31, 2004, by the required filing date, and to file
its Quarterly Report on Form 10-Q for the three months ended
September 30, 2004, a restated Annual Report on Form 10-K for the
year ended December 31, 2003, and , if required, any applicable
Quarterly Reports on Form 10-Q prior thereto. All such filings
are subject to the prior completion of procedures by Terex's
independent registered accounting firm.
As part of its review, Terex has determined that a "material
weakness" (as defined in Rule 13a-15(f) under the Securities
Exchange Act of 1934, as amended) existed in Terex's internal
controls over financial reporting as they relate to the recording
of certain intercompany transactions. The Public Company
Accounting Oversight Board has defined material weakness as "a
significant deficiency or combination of significant deficiencies
that results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will
not be prevented or detected."
In 2003, Terex commenced a comprehensive effort to review and
improve its controls over its financial reporting processes to
assure the accuracy of its financial reports so as to comply fully
with the requirements of Section 404 of the Sarbanes-Oxley Act of
2002 (the "SOX Act"). As part of this review and improvement
process, a new financial reporting system was put in place in the
later part of 2003 allowing for a more detailed and thorough
review of accounts on a timely basis through analytical report
writing functions, as well as automated back office functions.
Additionally, internal controls have been modified to require,
among other things, monthly activity balancing and the requirement
that any reconciling item that is not resolved within a specified
period of time be escalated for prompt resolution. Terex has also
changed its reporting relationship for operating financial
personnel so that they now report directly to the corporate
financial group, and Terex will provide enhanced training for all
financial personnel. Terex also intends, among other things, to
add additional personnel to the financial organization as
necessary, simplify its reporting structure and migrate to a more
common information technology platform. These measures are
consistent with the principles of Terex's previously announced
Terex Improvement Process and are intended to prevent this type of
situation from occurring in the future.
While management believes that it has taken adequate measures
during 2004 to institute processes and controls as they relate to
recording of intercompany transactions, due to the ongoing
evaluation and testing of Terex's internal controls by management
and Terex's independent auditors, and the adjustments to the
historical financial statements referred to in this filing, there
can be no assurance that "material weaknesses" do not exist that
management and the independent registered accounting firm would be
required to report in their assessment of the effectiveness of
Terex's internal control structure over financial reporting as of
December 31, 2004, in Terex's Annual Report on Form 10-K for the
year ended December 31, 2004, as required by Section 404 of the
SOX Act.
Terex is currently in compliance with the terms of its Amended and
Restated Credit Agreement dated as of July 3, 2002, as amended
(the "Credit Agreement"), and the Indentures (collectively, the
"Indentures") pursuant to which Terex's outstanding Senior
Subordinated Notes were issued. In addition, after giving affect
to all of the adjustments identified to date, Terex would have
been in compliance with the terms of its Credit Agreement and the
Indentures during all prior periods.
Under the terms of the Credit Agreement, Terex is required to
provide audited financial statements for its fiscal year ended
December 31, 2004, to its lenders under the Credit Agreement on or
before March 31, 2005. Terex currently anticipates being able to
timely provide such audited financial statements. However, if
Terex is unable to provide these financial statements within this
time frame, and is unable to obtain a waiver of such requirement
from its lenders under the Credit Agreement, the lenders under the
Credit Agreement may notify Terex of such failure and Terex will
then have 15 days to provide audited financial statements. While
Terex has kept the agent for the lenders under the Credit
Agreement up to date on the progress of its review and has no
reason to believe that it will be unable to obtain the necessary
waiver should it become necessary, the occurrence of an event of
default under the Credit Agreement could result in the lenders
terminating Terex's revolving credit facility and declaring all
outstanding loans under the Credit Agreement due and payable. In
addition, if the lenders under the Credit Agreement were to
declare all outstanding loans under the Credit Agreement to be due
and payable, such acceleration would constitute an event of
default under the Indentures, which would permit the holders of
the notes issued pursuant to the Indentures to declare such notes
due and payable.
The matters discussed in this release are addressed in more detail
in the Form 8-K filed by Terex with the SEC today, and readers are
encouraged to review the Form 8-K for additional information.
Terex will provide further information on the status of its
financial review and its restatement of financial statements for
earlier periods as events warrant.
Terex Corporation is a diversified global manufacturer with 2003
net sales of $3.9 billion. Terex operates in five business
segments:
-- Terex Construction,
-- Terex Cranes,
-- Terex Aerial Work Platforms,
-- Terex Materials Processing & Mining, and
-- Terex Roadbuilding,
-- Utility Products and Other.
Terex manufactures a broad range of equipment for use in various
industries, including the construction, infrastructure, quarrying,
recycling, surface mining, shipping, transportation, refining,
utility and maintenance industries. Terex offers a complete line
of financial products and services to assist in the acquisition of
Terex equipment through Terex Financial Services. More
information on Terex can be found at http://www.terex.com/
* * *
As previously reported in the Jan. 3, 2005, edition of the
Troubled Company Reporter, Moody's Investors Service affirmed the
debt ratings of Terex Corporation, senior implied at B1 with a
stable rating outlook, and lowered the company's speculative grade
liquidity rating to SGL-2 from SGL-1. The rating affirmation
reflects the company's strengthened market position in a number of
key end-markets, increasing scale and diversification of product
offerings and geographic presence, and continued favorable
operating performance, balanced against the continued cyclical
nature of its core businesses.
The SGL-2 rating reflects the company's ongoing good liquidity
profile with significant balance sheet cash and strong operating
cash flows. Nevertheless, because of an ongoing effort to resolve
an imbalance in certain intercompany accounts, the company has not
yet published its third quarter 10Q with the SEC. While this has
not impaired the company's access to its bank credit facilities,
any protracted delays in filing financial statements could
necessitate obtaining bank waivers in the future. While it is
likely that such waivers could be obtained, the current
uncertainty as to the resolution of the imbalances and the timing
of filing financial statements has the potential to diminish the
company's financial flexibility if not resolved in a timely
manner.
THREE PROPERTIES: Judge Isgur Formally Closes Bankruptcy Case
-------------------------------------------------------------
The Honorable Marvin Isgur of the U.S. Bankruptcy Court for the
Southern District of Texas formally closed the bankruptcy case
filed by Three Properties, Ltd., on January 12, 2005.
The Debtor filed a motion to dismiss its chapter 11 case on
November 10, 2004, and the Court dismissed the case on
December 13, 2004.
Judge Isgur based his decision on the three facts cited by Three
Properties in its motion for dismissal:
a) the Debtor's only asset, a 564 unit apartment complex
located in Houston, Texas, has been foreclosed by the Bank
of America, which had asserted a $10,474,226 lien and
security interest on the property;
b) the Debtor has no more assets and all of its remaining cash
has been turned over to Bank of America because the Debtor's
use of the Bank's cash collateral has expired; and
c) with the Debtor having no more assets and cash to distribute
to its creditors, conversion to a Chapter 7 liquidation
proceeding is impossible and rehabilitation or
reorganization under Chapter 11 is unlikely to happen.
The Court concludes that these facts demonstrate causes to dismiss
the Debtor's bankruptcy case as required under Section 1112(b) of
the Bankruptcy Code.
Headquartered in Prairie View, Texas, Three Properties, Ltd.,
operated an apartment complex in Houston, Texas. The Company
filed for chapter 11 protection on August 2, 2004 (Bankr. S.D.
Tex. Case No. 04-40811). The Court dismissed the case on
December 13, 2004. Eric J. Taube, Esq. at Hohmann, Taube &
Summers, LLP, represented the Debtor. When the Debtor filed for
chapter 11 protection, it listed less than $50,000 in estimated
assets and $1 million to $10 million in estimated debts.
UAL CORPORATION: Wants to Cut Mechanics Pay by 11.5%
----------------------------------------------------
Management of UAL Corporation and its debtor-affiliates "has lost
its way," says Thomas Redburn, Esq., at Lowenstein Sandler, in
Roseland, New Jersey, on behalf of the International Association
of Machinists. The latest labor and pension maneuvers are a
desperate attempt to make the Debtors appear a more attractive
investment to potential financiers. However, the Debtors have not
fully explored the potential alternatives to terminating their
pension plans. Further, the Debtors cannot be certain that a
provider of exit financing will demand the requested "draconian
relief," to put up funds.
Absent a committed exit facility or capital funding source, the
Debtors do not know what a secured lender or capital investor
will demand in exchange for money. Mr. Redburn contends that the
Debtors do not need to solve their current liquidity issue by
demanding sweeping labor and pension savings. Nor does the
solution lie in a distress termination of the pension plans.
Since the Debtors' business plan is fraught with uncertainty and
risk, it is premature to demand a fix from the IAM.
The Debtors do not intend to become a low-cost carrier.
Therefore, the Debtors could reduce costs less than proposed and
still be competitive with the other six major carriers. Mr.
Redburn tells the United States Bankruptcy Court for the Northern
District of Illinois that realizing a cost structure equivalent to
the low-cost carriers is an unrealistic goal. Any labor cuts with
this objective in mind are not necessary for the Debtors'
restructuring. Further labor cost reductions should be explored
through good faith negotiations. The Debtors, Mr. Redburn says,
are making a mistake by threatening the ultimate sanction: pension
termination and rejection of collective bargaining agreements.
Debtors Seek Interim Wage Cuts from IAM
The Debtors ask the Court for interim relief from their
collective bargaining agreement with the IAM. Interim relief is
appropriate because, while the Debtors need the cost savings
immediately, the IAM has asked for more time to study the pension
termination issue. The Debtors have engaged in good-faith
negotiations with the IAM. James H.M. Sprayregen, Esq., at
Kirkland & Ellis, says both sides are pleased with the progress.
However, the Debtors must obtain wage reduction to satisfy short-
term liquidity needs. Simultaneously, the Debtors support the
IAM's request for more time to analyze pension termination.
The Debtors propose these changes to the IAM collective
bargaining agreement effective January 6 through April 11, 2005:
a) an 11.5% reduction in pay rates for all employee ranks; and
b) an allocation of 70% of the pay employees would normally
receive for sick days.
The Debtors may damage their relationship with the IAM if they
pursue Section 1113(c) relief whole-heartedly. The IAM is
immersed in a good-faith analysis and is attempting to devise
alternatives that will meet the Debtors' needs. Mr. Sprayregen,
however, emphasizes that interim relief will avoid the risk of
major operational disruption and provide the opportunity for
continued negotiation. The Debtors will pursue Section 1113(c)
relief against the IAM later, if needed.
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.72; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
US AIRWAYS: Fills Senior Management Positions & Reassigns Duties
----------------------------------------------------------------
US Airways Group, Inc., has filled several senior management
positions and restructured responsibilities both at US Airways and
US Airways Express. These changes will take place between now and
the end of January. They include:
-- Bruce Ashby:
Mr. Ashby, currently senior vice-president of alliances and
president of US Airways Express, will become executive
vice-president of marketing and planning, replacing Ben
Baldanza, who has accepted a position at another company.
He will oversee the company's route planning, scheduling,
pricing and yield management functions, as well as
marketing, sales, reservations, distribution, international,
alliances, cargo and US Airways Express. Mr. Ashby was the
lead negotiator in reaching cost savings labor agreements
with the company's pilots and flight attendants.
Mr. Ashby joined US Airways in April 1996 as vice-president
- financial planning and analysis. Before that, he was with
Delta Air Lines in Atlanta as vice-president - marketing
development. He also was employed by United Airlines in
Chicago as vice-president - financial planning and analysis,
and as vice-president and treasurer. Mr. Ashby received his
master's degree in operations research from Stanford
University in Palo Alto, Calif., and a bachelor's degree in
economics, also from Stanford.
-- Andrew P. Nocella:
Mr. Nocella, vice-president of network and revenue
management, will become senior vice-president - planning,
responsible for the company's route planning, scheduling,
pricing, and yield management functions. He joined US
Airways as vice-president of scheduling and planning in April
2002 from America West Airlines where he was vice-president,
planning and scheduling. A graduate of George Mason
University, Mr. Nocella holds a bachelor's of science degree
in decision sciences.
-- Anita P. Beier:
In addition to her existing role as senior vice-president and
controller, Ms. Beier will be responsible for the company's
organizational re-engineering and priorities. She replaces
James Schear, vice-president of restructuring, who will
become vice-president of safety and regulatory compliance.
Mr. Schear succeeds William Bozin, who has accepted a
position at another company.
Ms. Beier currently is responsible for the management of all
accounting functions for US Airways Group, Inc., and its
subsidiaries, including financial reporting, revenue
accounting, accounts payable, and payroll. She came to
US Airways from CSX Corp., where she held a number of
positions in financial management, including vice
president - financial planning. She holds a bachelor's
of science degree in business administration and a
master's in business administration from the University
of Maryland.
-- James P. Schear:
Mr. Schear joined US Airways in September 2004 from the FAA's
Air Traffic Organization, where he was vice-president of
safety, responsible for safety direction and assurance in
all facets of the National Airspace System and
international leadership of the FAA's global safety
efforts. He also was deputy for aviation operations for
the Transportation Security Administration. In that
role, he was responsible for an operational chain of 159
Federal Security Directors, and managed over 60,000
employees at 440 airports.
Mr. Schear, a licensed commercial pilot, started his aviation
career with Pacific Southwest Airlines in 1975, which was
merged into US Airways in 1988. At US Airways, he served
in a variety of management functions, including manager
of flight operations and director of business planning -
flight operations. A career naval aviator and a U.S. Naval
Academy graduate, Mr. Schear served 37 years combined in the
U.S. Navy and Naval Reserve. He flew the P-3 both on active
and reserve duty, retiring as a rear admiral in 2000. Mr.
Schear holds a degree in engineering.
-- Janet Dhillon:
Ms. Dhillon, managing director and associate general counsel,
will become vice-president and deputy general counsel
replacing Kathleen Harris, who left the company in
December. She will be responsible for general corporate
matters, including corporate compliance, internal audit,
Sarbanes-Oxley implementation and environmental issues.
Before joining US Airways in August 2004, Ms. Dhillon was a
counsel with Skadden, Arps, Slate, Meagher & Flom LLP in
Washington, D.C., and Los Angeles. Ms. Dhillon graduated
from the UCLA Law School in 1991, and graduated magna cum
laude and Phi Beta Kappa from Occidental College in 1984
with a degree in history and minor degree in political
science.
-- Stephen Morrell:
Mr. Morrell, vice-president of financial planning and
analysis, will become vice-president of finance and
treasurer, replacing Eilif Serck-Hanssen, who accepted a
position at another company. Mr. Morrell will be responsible
for US Airways' capital markets and aircraft financing and
transactions, insurance programs, risk and cash management,
pensions, investments programs, treasury, and fuel.
Mr. Morrell joined US Airways in 1994 as an analyst,
maintenance operations. Since that time he has served in
a number of positions in treasury, including director of
treasury operations and assistant treasurer. He attended
the University of Rochester and received a bachelor's
degree in economics in 1985. He also holds a master's
degree in business administration with a concentration in
finance from the Fuqua School of Business at Duke
University. Mr. Morrell served in the United States Navy
from 1985-1992.
-- Keith Houk:
At US Airways Express, Mr. Houk, president and chief
executive officer of wholly owned US Airways subsidiary
Piedmont Airlines, will replace Richard E. Pfennig, who
is retiring as president and chief executive officer of
wholly owned US Airways subsidiary PSA. Mr. Houk will be
replaced by Steven Farrow, currently vice-president of
flight operations at Piedmont.
Mr. Houk received a bachelor's of business administration
degree from Ohio University in 1969. He also was a
United States Air Force captain and F-4E Phantom fighter
pilot. Mr. Houk entered aviation in 1974 in sales at
Allegheny Commuter and later joined US Airways in 1988.
-- Steven Farrow:
Mr. Farrow has been vice-president of flight operations at
Piedmont and previously held the same position at Henson
Aviation. He is in charge of all Piedmont's flight
operations. He is a graduate of Dartmouth College and
served 21 years in the U.S. Navy.
"Bruce Ashby has been the architect of our alliance and regional
jet growth strategies, which had been major components of our
ability to generate more revenue and improve service for our
customers. He is eager and well qualified to step into his new
role and quickly take charge," said Bruce R. Lakefield, US
Airways' president and chief executive officer. "As a whole,
these individuals are experienced leaders with a proven record of
delivering positive results. Their depth of talent will serve US
Airways well as it transforms itself into a stronger carrier."
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 their 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.
VALOR TELECOM: IPO Cues Moody's to Lift Sr. Implied Ratings to Ba3
------------------------------------------------------------------
Moody's Investors Service upgraded the senior implied and senior
secured bank loan ratings of Valor Telecommunications Enterprises,
LLC, as a result of the Company's planned $499 million initial
public offering and resulting debt reduction. Moody's has also
assigned a B1 rating to Valor's proposed $280 million guaranteed
senior unsecured notes offering, which is jointly issued by Valor
Telecommunications Enterprises Finance Corp.
Moody's assumes that Valor Telecom will use the proceeds from the
equity and new high yield offerings to prepay its $205 million
second lien loan and $135 million subordinate loan, thus reducing
its aggregate outstanding debt from approximately $1,167 million
to $860 million. As a result, Moody's is withdrawing the B3 and
Caa1 ratings associated with the second lien and subordinate
loans.
The ratings also reflect Valor's strong operating margins and
stable cash flow, as well as, its solid business risk profile as a
rural local exchange carrier offset by the company's commitment to
pay a substantial dividend. The outlook on all ratings is stable.
Moody's has taken the rating actions:
Ratings Assigned:
-- Valor Telecommunications Enterprises, LLC and Valor
Telecommunications Enterprises Finance Corp. Co-Issuers:
-- $280 million Senior Unsecured Notes due in 2015 -- B1
Ratings Upgraded:
-- Valor Telecommunications Enterprises, LLC
-- Senior Implied -- to Ba3 from B2
-- $100 million Senior Secured Revolving Facility due in 2011--
to Ba3 from B2 (note: Valor Telecommunications Enterprises
II, LLC is no longer a co-borrower in this facility)
-- $890 million (originally $1.2 billion) Senior Secured Term
Loan due in 2012-- to Ba3 from B2 (note: Valor
Telecommunications Enterprises II, LLC is no longer a co-
borrower in this facility)
-- Issuer rating --to B2 from Caa1
Ratings Withdrawn:
-- $265 million Second Lien Loan due in 2011 - from B3 to WR
-- $135 million Subordinate Loan due in 2012 - from Caa1 to WR
The rating upgrades acknowledge that the initial public offering
transaction will meaningfully improve several of Valor's key
credit metrics, among them net debt to EBITDA, which declines from
5.9x to 4.1x, and EBITDA-Capex to interest, which improves from
2.1x to 2.8x. In addition to improving these credit metrics, the
proposed transaction should provide Valor better future access to
public debt and equity markets, a critical source of liquidity.
The rating upgrades are tempered by Moody's concern that
sustaining a relatively high dividend may limit Valor's financial
flexibility, curtail its ability to pursue new growth initiatives
and weaken its long-term competitiveness, particularly vis-.-vis
potential cable VoIP service offerings. As a result of Valor's
proposed dividend payout, FCF to net debt is expected to
approximate 4%, which Moody's considers weak for the rating
category. Moody's also believes the company's high leverage,
reflected by its high debt relative to total access lines and cash
flow further constrains the long-term ratings.
The outlook on Valor's ratings is stable due to Moody's
expectation that Valor will continue to generate stable and
predictable pre-dividend free cash flow largely as a result of a
favorable regulatory environment and low competition. Valor's
long-term ratings will be negatively impacted if the Company
adopts an aggressive acquisition strategy that increases leverage
to above 4.5x or notably reduces available liquidity through
extended unanticipated usage of its revolving credit facility.
In addition, if as a result of the Valor's continued dividend
policy free cash flow to debt falls below 2% and Moody's believes
that debt reduction will continue to slow or network investment
will lag, the ratings will likely fall. Similarly, prolonged free
cash flow to debt of above 5% that is generated by EBITDA margin
improvement will likely improve the ratings.
On a pro-forma basis, Valor's senior secured bank debt will
represent approximately 75% of company outstanding debt. As such,
Moody's does not believe that the risk profile of this debt is not
substantially different from that of the firm as a whole, and
therefore, does not merit notching this debt above the company's
Ba3 senior implied rating. The senior secured credit facilities
do benefit from a priority claim on substantially all assets plus
senior secured priority guarantees from the parent company,
intermediate holding companies, and operating subsidiaries.
The senior secured credit facilities effectively limit the
company's ability to incur additional leverage, based on a 4.25x
debt to EBITDA incurrence test. Moody's has notched the $280
million senior unsecured note offering only one notch below the
senior implied rating, to reflect its subordinated unsecured claim
on the company's assets and unsecured guarantees. Valor's issuer
rating at B2 is an additional notch below the B1 $280 million
senior unsecured note given the implied lack of guarantees even on
an unsecured basis.
Valor faces modest access line loss, limited threats from wireless
and technology substitution, and cable competition in only its
largest markets. Moody's notes that Valor's markets are also less
desirable for cable competition because of high current satellite
penetration. Valor's ratings, however, may come under pressure if
cable competition ultimately puts forth a stronger than expected
VoIP launch in Valor's key markets.
The ratings also incorporate Valor's leading position in its
incumbent markets, proven ability to generate stable and
predictable revenue, and its improving capacity to drive operating
cash flow.
Valor derives approximately 24% of its revenues from state and
federal universal service fund subsidies, which is relatively high
compared to other rural local exchange carriers. While Moody's
believes that universal service will remain a political priority
for rural legislators, we are concerned that the current trend at
the FCC, which favors increased competition, may ultimately lead
to a long-term change in the competitive landscape for rural local
exchange carriers, particularly as related to the potential
inclusion of wireless carriers.
Valor's exposure to this regulatory risk is somewhat mitigated by
the support and historical stability of the Texas Public Utilities
Commission, which regulates approximately 20% of Valor's USF
revenue. Valor's ratings may come under pressure to the extent
that potentially adverse regulatory rulings result in a meaningful
compression of Valor's margins and profitability.
Moody's believes that Valor's liquidity is sufficient to meet its
near term financial obligations. Moody's also believes that
Valor's ability to generate significant and stable pre-dividend
free cash flow, coupled with $100 million available under its
revolving credit facility, provides sufficient liquidity to
weather operational shortfalls or unexpected capital needs.
In Moody's opinion, Valor's relatively strong pre-dividend
liquidity profile strengthens its ability to absorb market shock
and thus supports the long term ratings. Moody's is concerned,
however, that consistently high dividend payouts, currently set at
75%-80% of available cash, may limit the company's long term
financial flexibility and ability to potentially pursue
acquisitive growth strategies. Moody's bases its rating on the
assumption that, after dividends and stable capital investment,
Valor should be able to generate at least $25 million a year in
free cash flow.
Valor Telecommunications, headquartered in Irving, Texas, is a
rural local exchange carrier that provides telecommunications
services in four states in the South Western U.S. With
approximately 556 thousand access line, Valor generates
approximately $500 million in revenues annually.
* Armanino McKenna Promotes Andrew Armanino as Managing Partner
---------------------------------------------------------------
Armanino McKenna LLP, the largest accounting firm in the East Bay
and a top 100 firm nationally, has promoted its senior audit
partner, CPA Andrew J. Armanino, to managing partner. Mr.
Armanino replaces Joseph Moore, who is transitioning to retirement
and will continue with the firm in a senior consulting position.
The firm also announced promotion of CPA Paul O'Grady to partner
in the audit department and the addition of CPA Ralph Haskew, MS
(Tax), as manager in the firm's tax practice. The changes were
effective January 1.
Announcement of Andrew Armanino's promotion completes an historic
cycle at the 52-year-old accounting firm founded by his father,
notes Joe Moore. "Andy's vision and leadership have helped our
firm accomplish two mergers and the expansion of services for our
clients," says Mr. Moore. "His ability to rapidly analyze
business problems and find solutions for clients has been
demonstrated over and over. We couldn't be more pleased to have
Andy at the helm."
In 1995 at age 29, Andrew Armanino was the youngest professional
to be named partner at Armanino McKenna. His contributions to the
firm include helping steer Armanino McKenna's growth from 35
employees to more than 100 in less than five years, boosting the
firm's ranking to first in the East Bay and ninth in the Bay Area
overall in terms of annual revenue. He also helped the firm
establish technology and investment management practices.
Armanino holds a bachelor's degree in accounting from Santa Clara
University and was a senior auditor with Arthur Young prior to
joining Armanino McKenna in 1989.
Paul O'Grady, who joined Armanino McKenna in 1995, has performed
extensive audit work and consulting for both non-profit
organizations and for-profit enterprises. He serves on the
accounting standards technical committee of Armanino McKenna and
is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public
Accountants. He earned a bachelor's degree in economics and
political science from the University College in Galway, Ireland
and a degree in accounting from Cal State University, Hayward.
Ralph Haskew joins Armanino McKenna after stints with Deloitte &
Touche and two local firms. He brings more than two decades of
tax and business consulting experience to the firm's growing
client base. Haskew's professional experience includes working
with high net-worth individuals, exempt organizations and closely
held businesses. He holds a bachelor's degree in business
administration from the University of California at Berkeley, as
well as a master's degree in taxation from Golden Gate University.
He is also an adjunct professor at Golden Gate University's Edward
S. Ageno School of Business.
Forecasting Continued Growth
In 2004, Armanino McKenna grew approximately 25 percent. Sixty
percent of the increase has come from clients with compliance
needs related to Section 404 of the Sarbanes-Oxley Act of 2002,
which requires, among other things, the separation of auditing and
many consulting services. The other 40 percent of the growth was
expansion of traditional audit, tax and consulting services.
The new rules have driven a shift in accounting, says Andrew
Armanino. "Shortages in human resources at the national
accounting firms have led to a wave of client referrals to our
firm from the Big Four, plus a growing population of 'orphaned'
companies out on the open market," says Mr. Armanino.
"We have taken full advantage of that circumstance and we're
projecting additional growth next year in Section 404 work,
auditing and tax services not only from publicly held companies,
but also from privately held companies and non-profit
organizations that will be likely to adopt aspects of accounting
reform in response to the needs of banks, suppliers, insurers and
investors."
Additional growth is expected from the migration of wealth from
retiring Baby Boomers who need to either pass businesses and
assets on to the next generation, or liquidate and realize gains
from years of creating value.
Wealth transfer is a process that will last more than 20 years and
involve millions of complex transactions that are essentially "up
for grabs" for a variety of financial and professional services
firms, notes Mr. Armanino. "Services we provide, such as
valuation, succession planning and tax advice, will be in high
demand going forward," he says.
Mr. Armanino also points to labor shortages among skilled,
educated employees, including accountants. "The labor shortage
will cause outsourcing to increase, as well as increased reliance
on automation and technology to augment a smaller workforce," Mr.
Armanino says. "This is another business opportunity for our firm
because of the need for automated enterprise solutions which we
provide."
Information Technology (IT) is no longer a commodity, thanks to
Section 404 of the Sarbanes-Oxley Act, says Mr. Armanino.
"Suddenly, IT has become a much more customized product area for
our clients," he says. "Corporate financial reporting systems
that feature automated controls, data transfer to banks and
vendors, record storage and maintenance have all become points of
additional management accountability, vulnerability and
opportunity.
"At the middle market level, publicly held companies now have a
tremendous need to assess whether their systems are in compliance,
but may not have internal staff to do the work and are outsourcing
that work to firms like ours."
About Armanino McKenna LLP
Armanino McKenna LLP -- http://www.amllp.com/-- is a top 10 San
Francisco Bay Area accounting and consulting firm and a top 100
firm nationally in terms of annual revenue. The firm specializes
in serving the accounting and consulting needs of waste management
companies, non-profit organizations, technology companies,
distribution companies, healthcare organizations, professional
practices and educational institutions. Armanino McKenna employs
140 professionals and staff at offices in San Ramon and San
Leandro, California.
* Fitch: U.S. Public Finance Forecast
-------------------------------------
Fitch Ratings' forecast for the U.S. municipal market has become
less negative in most sectors. Positive macroeconomic trends have
led to more stability for tax-backed credits in most regions of
the country, although the Midwest is still lagging. Expenditures,
particularly pension and health care costs, remain a drag on
financial improvement for state and local governments. Tuition
increases and strong investment returns on endowments have helped
the higher education sector.
Acute health care facilities have benefited from operational
improvements and good managed care reimbursement, while continuing
care retirement communities -- CCRCs -- have stabilized due to
higher investment returns and strong occupancy levels. Fitch
believes that the U.S. airport industry faces growing challenges
over the course of 2005 as the difficult airline operating
environment shows no signs of abating.
During the fourth quarter of 2004, Fitch upgraded 21 municipal
issuers, totaling $7.7 billion in par, and downgraded 20 issuers,
comprising $12.8 billion, for a downgrade to upgrade ratio of
0.95:1 on an issuer basis and 1.7:1 on a par basis. The par
amount downgraded was dominated by several large issuers,
including the State of Michigan, the cities of Philadelphia and
Memphis, and Atlanta-Hartsfield Airport, which together accounted
for over $9.9 billion, or over 77% of the total par downgraded.
The two largest upgrades were Catholic Health Care West and Los
Angeles County Metropolitan Transportation Authority, accounting
for $3.9 billion, or 51% of the total par upgraded.
There were six credits on Rating Watch Negative as of Dec. 31,
2004, which was down by more than half from the 13 credits
reported as of Sept. 30, 2004. During the fourth quarter, six
credits were taken off Rating Watch Negative in conjunction with a
rating affirmation, two were taken off in conjunction with a
downgrade, and one credit, McFarland, California sewer revenue
bonds, was added. The one credit on Rating Watch Positive as of
Sept. 30, 2004, West Suburban Hospital Medical Center in Oak Park,
IL, remains on Rating Watch Positive, and the cities of Pittsburgh
and Providence, rated 'BB' and 'B', respectively by Fitch, were
placed on Rating Watch Positive during the fourth quarter.
The trend at the state level continues to head toward stability.
However, the economic picture is not uniform across the country,
with some Midwest state and local governments still under
significant pressure. As of November 2004, only 19 of 50 states
had reached non-farm employment levels equal to or greater than
those experienced in late 2000 and early 2001. In addition, the
employment trough for seven states occurred during calendar-year
2004, and eight states remain three percent or more below the peak
recorded in 2000/2001. Pension benefits and health care costs
continue to be financial pressure points at the state as well as
local level.
The tax-backed sector had 13 upgrades and 11 downgrades in the
fourth quarter of 2004, for a downgrade to upgrade ratio of 0.85:
1, compared to nine upgrades and eight downgrades in the third
quarter. However, the number of tax-backed issuers with a
Negative Rating Outlook continued to increase, jumping to 51 from
44 as of Sept. 30, 2004, 25 as of Sept. 30, 2003, and only 12 as
of Dec. 31, 2002. The number of tax-backed credits with a
Positive Rating Outlook increased to 28 as of Dec. 31, 2004, as
compared to 24 as of Sept. 30, 2004.
In health care, there were six upgrades and four downgrades in the
fourth quarter of 2004, a significant change from the third
quarter's one upgrade and eight downgrades. The six upgrades in
the fourth quarter are particularly noteworthy in that they are
equal to all of the upgrades in the previous three quarters
combined. In other revenue sectors, there were three downgrades
and one upgrade in transportation, one higher education upgrade,
one water/sewer downgrade, and one downgrade of a parking
facility.
* King & Spalding Names 20 New Partners in Four Firms
-----------------------------------------------------
King & Spalding LLP disclosed the appointment of the following
lawyers as partners in the firm, as of January 1, 2005:
-- Atlanta
John Patterson Brumbaugh - Business Litigation
L. Frank Coan, Jr. - Tort & Environmental Litigation
Halli D. Cohn - Tort & Environmental Litigation
Douglas W. Gilfillan - Litigation & Special Matters
S. Stewart Haskins, II - Business Litigation
Robert M. Keenan, III - Mergers & Acquisitions
Rahul Patel - Mergers & Acquisitions
Ellen G. Ray - Private Equity
David Tetrick, Jr. - Labor & Employment Litigation
Carmen R. Toledo - Tort & Environmental Litigation
John D. Wilson - Corporate Finance
-- Houston
Craig J. Ledet - Litigation
William R. Parish, Jr. - Mergers & Acquisitions/International
Transactions
-- New York
Andrew M. Metcalf - Islamic Finance & Investment
Gary A. Saunders - Financial Restructuring
Larry H. Tronco - Intellectual Property
-- Washington, D.C.
Michael J. Ciatti - Litigation & Special Matters
Mark Jensen - Litigation & Special Matters
Anne R. Ortmans - Litigation & Special Matters
Peter M. Todaro - Litigation & Antitrust
About King & Spalding LLP
King & Spalding LLP is an international law firm with more than
800 lawyers in Atlanta, Houston, London, New York and Washington,
D.C. The firm represents more than half of the Fortune 100, and
in a Corporate Counsel survey in October 2004 was ranked one of
the top ten firms representing Fortune 250 companies overall. For
additional information, visit http://www.kslaw.com/
* Piper Rudnick Joins Forces with DLA Following Gray Cary Merger
----------------------------------------------------------------
Piper Rudnick LLP, one of the United States' leading law firms,
and DLA, which has extensive coverage across Europe and Asia and
is ranked 7th in the UK, disclosed an international merger of
equals that will create one of the largest law firms in the world.
The announcement came two months after Piper Rudnick's
announcement of a merger with Gray Cary Ware & Freidenrich LLP.
The combined firm will be known as DLA Piper Rudnick Gray Cary and
will become the only legal provider in the world with more than
1,000 lawyers on both sides of the Atlantic. Both mergers became
effective on Jan. 1, 2005.
The merger was announced jointly by Piper Rudnick's co-chairs,
Francis B. Burch Jr., and Lee I. Miller, and DLA's managing
partner, Nigel Knowles. The combined firm will be led by Mr.
Burch, Mr. Miller and Mr. Knowles who will all serve as joint
CEOs.
With more than 2,700 lawyers located in 18 countries and projected
2005 revenues of $1.5 billion, the combined firm will become the
third largest law firm in the world based on number of attorneys
and the second largest based on revenue, according to the latest
AmLaw Global 100 rankings. DLA Piper Rudnick Gray Cary will have
49 offices located throughout the U.S., Europe, Asia and Russia,
uniquely positioning the firm to help companies with their
sophisticated legal needs anywhere in the world.
Globalization, Client Needs Drive Combination
"While the size of this combination is certain to capture
attention, this merger represents the culmination of the strategic
plan that was put into motion in 1999 when Piper & Marbury merged
with Rudnick & Wolfe," said Mr. Burch. "More important than size
is delivering a platform that will accommodate the expanding
global needs of our clients."
Mr. Miller continued, "This merger is designed to extend the
global reach of our key practice areas so that we can serve the
needs of clients wherever they choose to do business. As clients
consolidate the number of law firms they retain and as they expand
into new countries and markets, we will be able to offer
consistent, multi-national service across a range of core
practices and geographies from a single point of contact."
"We will differentiate ourselves by being one of few global firms
that is not predominantly capital markets-driven," explained Mr.
Knowles. "Rather, our goal is to become a well-rounded firm of
choice for clients that are seeking legal practice depth and a
single resource for all of their global legal needs."
Leaders of both firms stress that their respective client bases
have become increasingly active across national borders as
consolidation and convergence continue within all industries
served by the legal profession.
"Our clients are distributing products and services across
international borders, opening and closing plants and offices,
interacting with international regulatory bodies and settling
disputes across international jurisdictions," said Mr. Burch. "In
turn, we need to have the legal knowledge and geographic presence
to address those needs."
Coupled with the globalization trend, purchasers of legal services
are reducing the number of law firms they use across regions and
continents. As such, those clients are seeking firms with the
platform to address their expanding needs.
Track Records, Entrepreneurial Cultures Drive Integration
"What is interesting about this merger beyond its size and scale,"
explained Brad Hildebrandt, chairman of legal consulting firm
Hildebrandt International, "is the fact that these firms have very
entrepreneurial cultures and have been successfully expanding
through mergers over the past several years. More importantly,
these firms have demonstrated an ability to effectively integrate
each of their mergers around a common vision which has been
critical to each firm's success up to this point."
The merged organization will provide an extensive range of legal
services across all existing practice areas and will be organized
along the lines of seven global practice groups as follows:
-- Corporate and Finance
On the corporate and finance side, both firms operate
significant transactional-based practices and focus on
middle and upper-mid market clients. The combined corporate
practice would have ranked third in the world in 2004 for
the 111 M&A transactions it completed in the first half of
the year. It is also on the panels of a number of major
banks and financial institutions and has a substantial
bankruptcy and restructuring practice.
-- Litigation
The group brings together more than 800 top litigators in
the US, Europe and Asia and offers lawyers experienced in
patent, class action, securities, antitrust, banking and
finance, technology, telecommunications and insurance
disputes.
-- Real Estate
With over 200 real estate lawyers in both the US and the UK,
this top-ranked group will become one of the world's pre-
eminent international real estate practices, serving the
needs of developers, corporations, retailers and investors.
-- Legislative and Regulatory
Both firms operate groups in this area and are widely
recognized as leaders in this field. The combined group
will have the unique opportunity to help corporations
address challenges and opportunities at any level of
government around the world.
-- Human resources
This practice represents a combination of DLA's market-
leading Human Resources Group and Piper Rudnick's Labor and
Employment Law Group and will include more than 200 lawyers
located in key jurisdictions around the world.
-- Commercial
The group will be a market leader in European Public Private
Partnerships (PPPs) and the provision of infrastructure and
project finance services to sponsors and funders
internationally. The group has lawyers who are particularly
experienced in energy, sports, water, defense, healthcare
and transportation, and is recognized in particular for its
top-ranked franchise practice.
-- Technology, Media and Communications (TMC)
This global practice represents a combination of market-
leading teams in information technology/outsourcing,
telecommunications, IP, media, e-business, sport, data
protection and privacy. With over 420 lawyers globally it
will be the dominant global TMC/TMT practice.
* BOND PRICING: For the week of January 10 - January 14, 2005
-------------------------------------------------------------
Issuer Coupon Maturity Price
------ ------ -------- -----
Adelphia Comm. 3.250% 05/01/21 17
Adelphia Comm. 6.000% 02/15/06 17
AMR Corp. 4.500% 02/15/24 69
Applied Extrusion 10.750% 07/01/11 57
Bank New England 8.750% 04/01/99 22
Burlington Northern 3.200% 01/01/45 60
Calpine Corp. 7.750% 04/15/09 71
Calpine Corp. 7.875% 04/01/08 74
Calpine Corp. 8.500% 02/15/11 71
Calpine Corp. 8.625% 08/15/10 72
Cendant Corp. 4.890% 08/17/06 51
Chic East Ill. RR 5.000% 01/01/54 60
Comcast Corp. 2.000% 10/15/29 44
Delta Air Lines 2.875% 02/18/24 60
Delta Air Lines 7.900% 12/15/09 57
Delta Air Lines 8.000% 06/03/23 61
Delta Air Lines 8.300% 12/15/29 43
Delta Air Lines 9.000% 05/15/16 45
Delta Air Lines 9.250% 03/15/22 44
Delta Air Lines 9.750% 05/15/21 46
Calpine Corp. 10.000% 08/15/08 68
Delta Air Lines 10.125% 05/15/10 56
Delta Air Lines 10.375% 02/01/11 56
Dobson Comm. Corp. 8.875% 10/01/13 72
Falcon Products 11.375% 06/15/09 40
Federal-Mogul Co. 7.500% 01/15/09 32
Finova Group 7.500% 11/15/09 47
Iridium LLC/CAP 14.000% 07/15/05 16
Inland Fiber 9.625% 11/15/07 51
Kaiser Aluminum & Chem. 12.750% 02/01/03 20
Lehmann Bros. Hldg. 6.000% 05/25/05 64
Lehmann Bros. Hldg. 21.680% 02/07/05 66
Level 3 Comm. Inc. 2.875% 07/15/10 61
Level 3 Comm. Inc. 6.000% 03/15/10 58
Level 3 Comm. Inc. 6.000% 09/15/09 62
Liberty Media 3.750% 02/15/30 67
Liberty Media 4.000% 11/15/29 71
Mirant Corp. 2.500% 06/15/21 74
Mirant Corp. 5.750% 07/15/07 74
Mississippi Chem. 7.250% 11/15/17 71
Northern Pacific Railway 3.000% 01/01/47 58
NRG Energy Inc. 6.500% 05/16/06 0
Nutritional Src. 10.125% 08/01/09 68
Oglebay Norton 10.000% 02/01/09 72
O'Sullivan Ind. 13.375% 10/15/09 33
Pegasus Satellite 12.375% 08/01/06 61
Pegasus Satellite 13.500% 03/01/07 0
Pen Holdings Inc. 9.875% 06/15/08 52
Primus Telecom 3.750% 09/15/10 69
Reliance Group Holdings 9.000% 11/15/00 24
Syratech Corp. 11.000% 04/15/07 45
Trico Marine Service 8.875% 05/15/12 63
Tower Automotive 5.750% 05/15/24 72
United Air Lines 9.125% 01/15/12 7
United Air Lines 10.670% 05/01/04 8
Univ. Health Services 0.426% 06/23/20 58
WestPoint Stevens 7.875% 06/15/08 0
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Dylan
Carlo Gallegos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie
Sabijon, Terence Patrick F. Casquejo and Peter A. Chapman,
Editors.
Copyright 2005. All rights reserved. ISSN: 1520-9474.
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