/raid1/www/Hosts/bankrupt/TCR_Public/050509.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, May 9, 2005, Vol. 9, No. 108
Headlines
ADAPTEC INC.: Weakened Profitability Cues S&P's Negative Outlook
ALTERRA HEALTHCARE: Wants Until Aug. 2 to Object to Claims
AMERICAN HOMEPATIENT: Mar. 31 Balance Sheet Upside-Down by $19MM
AMERICAN RESTAURANT: Has Until June 30 to Make Lease Decisions
AMERICAN RESTAURANT: Plan Confirmation Hearing Set for June 22
AMERICAN TOWER: Fitch Puts Ratings on Watch Positive
AMERISTAR CASINOS: Earns $19.2 Million of Net Income in First Qtr.
AMKOR TECHNOLOGY: Liquidity Concerns Cue S&P to Pare Rating to B-
ARABIAN AMERICAN: Auditors Continue to Have Going Concern Doubts
ATA AIRLINES: Okun Withdraws Offer for Chicago Express Assets
ATA AIRLINES: Wants Stay Modified to Let Sapp Litigation Proceed
AXM PHARMA: Auditors Raise Going Concern Doubts
CAREY INT'L: Moody's Puts B3 Rating on Planned $115M Term Facility
CAREY INTERNATIONAL: S&P Junks $85 Million Second-Lien Term Loan
CATHOLIC CHURCH: Tucson Files Amended Plan & Disclosure Statement
CATHOLIC CHURCH: St. George's Delivers BIA Proposal to Creditors
CHAMPIONSHIP AUTO: Auditors Raise Going Concern Doubts
CNE GROUP: Auditors Raise Going Concern Doubts
COMPOSITE TECH: Files Reorganization Plan & Disclosure Statement
CRDENTIA CORP: Completes Prime Staff & Mint Medical Acquisition
DOE RUN: Jan. 31 Balance Sheet Upside-Down by $195 Million
DOLLAR FINANCIAL: Mar. 31 Balance Sheet Upside-Down by $62 Million
EASYLINK SERVICES: Posts $2.5 Million Net Loss in First Quarter
EPIXTAR CORP.: Auditors Raise Going Concern Doubts
FEDERAL METAL: Files Schedules of Assets & Liabilities in New York
FIBERMARK INC: Dec. 31 Balance Sheet Upside-Down by $101.9 Million
FORD MOTOR: S&P Cuts Ratings on 9 Synthetic ABS Transactions
GB HOLDINGS: Auditors Raise Going Concern Doubts
GENERAL MOTORS: S&P Cuts 6 Ratings on 3 Securitization Facilities
GINGISS GROUP: Section 341(a) Meeting Slated for May 19
GOLDSPRING, INC.: Auditors Raise Going Concern Doubts
HAIGHTS CROSS: Declining Profitability Cues S&P's Negative Outlook
HEALTH SCIENCES: Auditors Raise Going Concern Doubts
HEARTLAND PARTNERS: Auditors Express Going Concern Doubts
HEXION SPECIALTY: Moody's Puts B1 Ratings on $675M Loan Facilities
HYTEK MICROSYSTEMS: Posts $2,000 Net Loss in First Quarter
INLAND FIBER: Auditors Express Going Concern Doubts
INTERACTIVE BRANDS: Auditors Raise Going Concern Doubts
INTERNATIONAL RECTIFIER: Good Performance Cues S&P to Lift Ratings
KAISER ALUMINUM: Court Approves Erie Property Transfer
LAICH INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
LMIC INC: Case Summary & 24 Largest Unsecured Creditors
LOAN FUNDING: Fitch Affirms BB Rating on $12 Million Notes
MICHAEL & MARIAN CONDE: Case Summary & 4 Largest Creditors
NATIONAL ENERGY: ET Gas & ET Power Object to Two Mirant Claims
OMNI FACILITY: Plan Administrator Wants to Close Affiliates' Cases
OPTA CORPORATION: Auditors Express Going Concern Doubts
ORGANIZED LIVING: Files for Chapter 11 Protection in S.D. Ohio
ORGANIZED LIVING: Case Summary & 20 Largest Unsecured Creditors
PG&E NATIONAL: NRG Power Claim Reduced to $205,579
PILLOWTEX CORP: Wants to Hire BDO Seidman to Review Tax Returns
PILLOWTEX: Asks Court to Keep Nan Ya Settlement Docs Under Seal
PONDEROSA PINE: Wants to Hire Lowenstein Sandler as Bankr. Counsel
PRIMUS TELECOMMUNICATIONS: Low Earnings Cue S&P to Watch Ratings
RADIO ONE: S&P Rates Proposed $750 Million Credit Facility at BB
RENAL CARE: Moody's Reviewing Low-B Ratings for Possible Downgrade
RIVERS II: Case Summary & 20 Largest Unsecured Creditors
RIVIERA TOOL: Comerica Forebearance Agreement Expired Apr. 29
SONIC AUTOMOTIVE: Subpar Financial Profile Cues S&P to Cut Ratings
SPECTRASITE INC.: American Tower Merger Cues S&P to Revise Watch
SPECTRASITE INC: Merging with American Tower in Stock Transaction
STRONGCO INC: Completes Plan of Arrangement & Trades on the TSX
SUNRISE CDO: Moody's Lowers Sr. Secured Note Rating from Ba2 to B2
TUCKAHOE CREDIT: S&P Lifts CreditWatch on Lease Securitization
TXU CORP: Posts $416 Million Earnings in First Quarter
UAL CORP: Eight Airline Unions Pledge Support for Mechanics
ULTIMATE ELECTRONICS: Committee Taps Huron as Financial Advisors
ULTIMATE ELECTRONICS: Sells Most Assets to CEO for $43,750,000
UNIFORET INC: Posts $100,000 Net Loss in Q1 & Changes Company Name
USGEN NEW ENGLAND: Files 2nd Amended Plan & Disclosure Statement
VISKASE COS.: Possible Sale Prompts S&P to Watch Ratings
VITAL LIVING: Auditors Raise Going Concern Doubts
WESTERN GOLDFIELDS: Auditors Raise Going Concern Doubts
WILD OATS: Names Robert Dimond SVP & Chief Financial Officer
WINN-DIXIE: Section 341(a) Meeting Slated for May 25
WINN-DIXIE: Wants to Reject 24 Grocery Store Leases
WINN-DIXIE: Wants to Sell Aircraft to Studio City Aviation
WORLDCOM INC: Settles Dispute Over Federal Insurance's Claims
YUKOS OIL: Gets Court Nod to Disburse $384,967 from Court Registry
* BOND PRICING: For the week of May 2 - May 6, 2005
*********
ADAPTEC INC.: Weakened Profitability Cues S&P's Negative Outlook
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Standard & Poor's Ratings Services revised its outlook on
Milpitas, California-based Adaptec Inc. to negative from stable,
and affirmed the corporate credit rating at 'B+'. The outlook
revision follows the company's earnings announcement for the
quarter ended March 31, 2005, and the expectation that current
weakened profitability trends will continue. Adaptec had $285
million of rated debt outstanding as of March 31, 2004.
"The ratings on Adaptec Inc. reflect the challenges the company
faces in fortifying and transitioning its business profile in the
face of commoditization and deterioration in the core small
computer systems interface (SCSI) business, which has resulted in
recent quarters weakened profitability and debt protection
metrics," said Standard & Poor's credit analyst Joshua Davis.
These factors partially are offset by financial flexibility
provided by a net cash position on the balance sheet. Adaptec has
a dominant share of the mature market for SCSI chips and adapter
cards, used to connect high-performance peripherals to computer
servers.
SCSI technology is mature, and commoditizing at a rapid rate,
challenged by alternative interconnects, such as serial-attached
ATA and fiber channel. Adaptec is supplementing its SCSI
offerings by integrating redundant array of independent disks
(RAID) functionality to its board-based SCSI products, as well as
addressing the emerging serial-attached SCSI, a successor
interconnect technology to parallel SCSI. RAID is a disk
subsystem architecture that allows data to be written to multiple
disks via a single set of commands, thereby providing increased
performance and fault tolerance.
Adaptec's recent operating performance has been weak. In the
March 2005 and December 2004 quarters, EBITDA was breakeven to
slightly positive, on flat revenues on a year-over-year basis.
Revenues in the four quarters ended March 31, 2005, were up 5% to
$475 million, but EBITDA declined to $26 million from $48 million
in the previous four quarters. A variety of factors have
negatively affected the company's recent operating performance,
including unfavorable mix shifts which reflect a decline in
channel component sales, combined with cost-related ramp-up
problems with the acquired IBM storage array business.
Some of the profitability issues are addressable in the near term,
other factors, including the need to transition the company's
business strategy in the face of rapid commoditization of its
legacy products, could prove more difficult and time consuming.
ALTERRA HEALTHCARE: Wants Until Aug. 2 to Object to Claims
----------------------------------------------------------
Alterra Healthcare Corporation asks the U.S. Bankruptcy Court for
the District of Delaware to extend its time to object to claims to
August 2, 2005.
A hearing will be held on May 25, 2005, at 2:00 p.m., to consider
the Reorganized Debtor's request. The hearing will be held before
the Honorable Mary F. Walrath in Wilmington, Del. Objections, if
any, must be filed and served by 4:00 p.m. on May 18, 2005, and a
copy must be delivered to:
Young Conaway Stargatt & Taylor, LLP
The Brandywine Building
Wilmington, DE 19801
Attn: Robert S. Brady, Esq.
Edmon L. Morton, Esq.
Joseph M. Barry, Esq.
Sean T. Greecher, Esq.
Since December 4, 2003, the Debtor and the Official Committee of
Unsecured Creditors have been working to determine the amount
available for distribution to unsecured creditors under the Plan.
On February 25, 2005, the Court approved the stipulation between
the Debtor and the Committee fixing $2,450,000 as the amount
available for distribution to the holders of general unsecured
claims.
The Debtor has filed a number of objections or motions for
estimation of contingent and unliquidated claims in accordance
with the terms of the settlement. Resolution of those objections
and motions is necessary to determine the pool of claims that will
share in the $2,450,000.
Headquartered in Milwaukee, Wisconsin, Alterra Healthcare
Corporation offers supportive and selected healthcare services to
the elderly and is one of the largest operator of freestanding
Alzheimer's and memory care residences in the U.S. The Company
filed for chapter 11 protection on January 22, 2003 (Bankr. D.
Del. Case No. 03-10254). James L. Patton, Esq., Edmon L. Morton,
Esq., Joseph A. Malfitano, Esq., and Robert S. Brady, Esq., at
Young, Conaway, Stargatt & Taylor, LLP, represent the Debtor in
its restructuring. When the Debtor filed for protection from its
creditors, it listed $735,788,000 in total assets and
$1,173,346,000 in total debts. On Nov. 26, 2003, the Honorable
Judge Mary F. Walrath confirmed the Second Amended Plan of
Reorganization of Alterra. The Plan took effect on Dec. 4, 2003.
AMERICAN HOMEPATIENT: Mar. 31 Balance Sheet Upside-Down by $19MM
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American HomePatient, Inc. (OTCBB: AHOM), one of the nation's
largest home health care providers, reported its financial results
for the first quarter ended March 31, 2005.
Revenues for the first quarter of 2005 were $81.5 million compared
to $84.7 million for the first quarter of 2004, representing a
decrease of $3.2 million, or 3.8%. Net income for the first
quarter of 2005 was $1.2 million compared to $1.0 million for the
first quarter of 2004, representing an increase of $0.2 million,
or 20%.
The reimbursement changes associated with the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003
reduced net income in the first quarter of 2005 by approximately
$4.1 million. This amount is comprised of $3.3 million in
reductions in revenues and $0.8 million in increased cost of
sales. The reductions in revenues include reductions in
inhalation drugs of $2.4 million, reductions in certain items of
durable medical equipment of $0.6 million, and reductions in
oxygen of $0.3 million. Net income was positively impacted in the
current quarter by a $4.3 million reduction in operating expenses
compared to the first quarter of 2004. The reduction in operating
expenses is a direct result of the Company's initiatives to
improve productivity and reduce costs in its operating centers and
billing centers.
EBITDA for the first quarter of 2005 and for the first quarter of
2004 was $12.1 million for both periods. For the first quarter of
2005, adjusted EBITDA (calculated as EBITDA excluding
reorganization items) was $12.3 million or 15.0% of revenues. For
the first quarter of 2004, adjusted EBITDA was $12.1 million or
14.2% of revenues.
On March 30, 2005, the 2005 fee schedule for home oxygen was
released by the Centers for Medicare and Medicaid Services. The
revised fee schedule amounts were implemented by the Medicare
contractors on or about April 2, 2005. Claims received on or
after the implementation date will be paid at the 2005 rates, and
claims received prior to the implementation date that were paid
using the higher 2004 rates will not be adjusted retroactively.
The Company estimates that the revised fee schedule will reduce
the Company's Medicare oxygen revenues by approximately 8.9%
beginning in the second quarter of 2005. This represents a
quarterly decrease in revenues and net income of approximately
$1.9 million. The Company's revenues and net income for the first
quarter of 2005 were reduced by approximately $0.3 million to
reflect first quarter oxygen claims that had not been received by
the Medicare contractors prior to the implementation date of the
2005 fee schedule.
About the Company
American HomePatient, Inc. is one of the United States' largest
home health care providers with 274 centers in 35 states. Its
product and service offerings include respiratory services,
infusion therapy, parenteral and enteral nutrition, and medical
equipment for patients in their home. American HomePatient,
Inc.'s common stock is currently traded in the over-the-counter
market or, on application by broker-dealers, in the NASD's
Electronic Bulletin Board under the symbol AHOM or AHOM.OB.
At Mar. 31, 2005, American HomePatient, Inc.'s balance sheet
showed a $19,330,000 stockholders' deficit, compared to a
$20,729,000 deficit at Dec. 31, 2004.
AMERICAN RESTAURANT: Has Until June 30 to Make Lease Decisions
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, extended, until June 30, 2005, the period
within which American Restaurant Group, Inc., and its debtor-
affiliates can elect to assume, assume and assign, or reject their
unexpired nonresidential real property leases.
The Debtors gave the Court three reasons why the extension is
warranted:
a) the Debtors' bankruptcy cases are large and complex, with
more than $200 million in liabilities, thousands of
creditors and parties in interest, and restaurant locations
spanning more than 10 states;
b) most of the Debtors' restaurants operate from the unexpired
nonresidential leases and are therefore one of the principal
assets of the Debtors; and
c) the Debtors are current on all post-petition rent
obligations of the unexpired nonresidential leases and the
extension will not prejudice the landlords of those leases.
Headquartered in Los Altos, California, American Restaurant Group,
Inc., through its subsidiaries operating as Stuart Anderson's,
specializes in U.S.D.A. Choice fresh-cut steak; seasoned, seared,
and slow-roasted prime rib; and a variety of seafood entrees
complete with 'all the fixin's'. The company and its debtor-
affiliates filed for chapter 11 protection on Sept. 28, 2004
(Bankr. C.D. Calif. Case No. 04-30732). Thomas R. Kreller, Esq.,
at Milbank, Tweed, Hadley & Mccloy represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $77,873,000 in total assets and
$273,395,000 in total debts.
AMERICAN RESTAURANT: Plan Confirmation Hearing Set for June 22
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, will convene a hearing at 10:00 a.m., on
June 22, 2005, to consider confirmation of the First Amended Joint
Plan of Reorganization proposed by American Restaurant Group,
Inc., and its debtor-affiliates.
The Court confirmed the adequacy of the Debtor's Amended
Disclosure Statement explaining the Joint Plan on April 22, 2005.
The Debtors are now authorized to send copies of the Amended
Disclosure Statement and Joint Plan to creditors and solicit their
votes in favor of the Plan.
The purpose of the Amended Joint Plan is to restructure the
Debtors' debt, capital structure and business operations to permit
them to emerge from their chapter 11 cases with a viable business
and a deleveraged capital structure that can be supported by their
cash flow.
The proposed financial restructuring will substantially deleverage
the Debtors' balance sheet. The restructuring will allow the
Debtors to decrease their debt and accrued interest from
approximately $204.5 million to approximately $21.1 million, by
converting approximately $179 million of Old Note Claims and
various Unsecured Claims obligations into approximately 98.75% of
the New Common Stock of the Reorganized Debtors.
Upon completion of the financial restructuring, the Debtors'
annual cash interest costs will be reduced by approximately $19
million. The Amended Joint Plan groups claims and interests into
13 classes. A full-text copy of the Amended Disclosure Statement
is available at no charge at http://www.kccllc.net/arg
All ballots must be returned by June 2, 2005, to the Debtors'
voting agent:
Kurtzman Carson Consultants LLC
12910 Culver Blvd., Suite I
Los Angeles, California 90066
Phone: 866-381-9100, Ext. 494
Objections to the Amended Plan, if any, must be filed and served
by June 9, 2005.
Headquartered in Los Altos, California, American Restaurant Group,
Inc., through its subsidiaries operating as Stuart Anderson's,
specializes in U.S.D.A. Choice fresh-cut steak; seasoned, seared,
and slow-roasted prime rib; and a variety of seafood entrees
complete with 'all the fixin's'. The company and its debtor-
affiliates filed for chapter 11 protection on Sept. 28, 2004
(Bankr. C.D. Calif. Case No. 04-30732). Thomas R. Kreller, Esq.,
at Milbank, Tweed, Hadley & Mccloy represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $77,873,000 in total assets and
$273,395,000 in total debts.
AMERICAN TOWER: Fitch Puts Ratings on Watch Positive
----------------------------------------------------
Fitch Ratings placed the ratings of American Tower Corporation and
American Towers Inc. on Rating Watch Positive following American
Tower's proposed merger announcement with SpectraSite Inc. Fitch
currently rates American Tower's unsecured notes at 'B+', ATI's
senior secured credit facility at 'BB' and ATI's senior
subordinated debt at 'BB-'. Approximately $3.1 billion of debt
securities are affected by these actions. The credit rating had
been on Positive Rating Outlook.
The rating action reflects Fitch's view that the all stock
transaction is positive to American Tower's credit profile.
Support for this rating action includes the deleveraging aspects
of the transaction, Fitch's expectations that American Tower will
continue to meaningfully improve its credit profile during 2005,
the scale benefits associated with the largest tower assets in the
industry, the increased cash flows of the combined company and the
expectations for continued wireless industry demand driven by
footprint expansion, improved coverage, minute growth and
increasing demand for wireless data services particularly
broadband. Furthermore, American Tower's cash flows derive
support from the predictable long-term contracts associated with
its leasing business and the expected sustainability of low
capital investment as American Tower leverages the considerable
scale advantages inherent within the tower business model.
Under terms of the agreement, SpectraSite shareholders will
receive 3.575 shares of American Tower stock for each common share
of SpectraSite. In the new corporate structure, SpectraSite will
be an unrestricted subsidiary of American Tower, thus allowing the
company flexibility to potentially utilize SpectraSite's free cash
flow for share repurchases and/or dividends. The transaction
effectively combines a portfolio of over 22,600 communication
sites, nearly doubling the size of its nearest competitor and
better positions the company for the future given the recent
consolidation within the wireless industry. The combined company
will generate approximately 2/3 of its revenue from the nationwide
wireless operators and affiliates. American Tower expects the
transaction will yield a net present value of $400 million in
synergies based on annual cost reductions of $30 million - $35
million. Fitch believes these estimates are reasonable as this
implies an approximate 60%-70% cost reduction in SpectraSite's
SG&A expenses.
Pro Forma for the transaction, Fitch expects total Debt-to-EBITDA
of 5.5 times or less by the end of 2005. Free cash flow
generation is expected to be approximately $300 million in 2005
and after giving effect for merger synergies, is expected to reach
at least $400 million on an annualized basis by the end of 2006.
Absent the merger announcement, Fitch had expected material
improvement in free cash flow at American Tower driven by organic
revenue growth relating to healthy wireless industry demand and
reduced interest expense through debt reduction / refinancings.
EBITDA margins, reflecting the strong operating leverage, should
approximate 65% for 2005. Providing the merger agreement between
the two companies closes without material changes in the terms,
Fitch anticipates at least a one notch rating upgrade. Key
considerations regarding a new rating level include, but are not
limited to:
-- Continued strong operating performance of the tower
industry and American Tower/SpectraSite specifically.
-- Further deleveraging efforts during 2005 and the final
capital structure at the time of closing.
-- American Tower's intentions regarding the return of
capital to its equity holders after closing.
AMERISTAR CASINOS: Earns $19.2 Million of Net Income in First Qtr.
------------------------------------------------------------------
Ameristar Casinos, Inc. (Nasdaq: ASCA) reported 2005 first quarter
financial results, which set all-time records for consolidated net
revenues, operating income, EBITDA, net income and earnings per
share.
Financial Highlights
* First quarter consolidated net revenues of $240.1 million,
representing an increase of $25.7 million, or 12.0%, over
the first quarter of 2004.
* First quarter consolidated operating income of
$46.3 million, an increase of $4.1 million, or 9.8%, from
the prior-year first quarter.
* First quarter consolidated EBITDA (a non-GAAP financial
measure that is defined and reconciled with operating
income below) of $67.1 million, representing an increase
of $7.6 million, or 12.8%, over the first quarter of 2004.
* First quarter consolidated net income of $19.2 million, up
$3.3 million, or 20.9%, from the first quarter of 2004.
* First quarter diluted earnings per share of $0.68,
compared to $0.58 for the first quarter of 2004.
Analysts' latest consensus estimate for the first quarter,
as reported by Thomson First Call, was $0.62. Our
previously issued earnings guidance for the first quarter
of 2005 indicated a range of $0.58 to $0.63 per share.
* On February 8, 2005, our Board of Directors increased the
amount of our quarterly cash dividend by 25.0%, to
$0.15625 per share. We paid the first quarter's dividend
on March 15, 2005 to shareholders of record as of March 1,
2005.
* On April 29, 2005, our Board of Directors declared a 2-
for-1 split of our common stock, effective at the close of
business on June 6, 2005. The share and per-share
information in this press release does not give effect to
the stock split.
* We improved our total debt leverage ratio (as defined in
our senior credit agreement) from 3.27:1 at March 31, 2004
to 3.18:1 at March 31, 2005, notwithstanding a $63.3
million increase in total debt from March 31, 2004 to
March 31, 2005.
* During the first quarter of 2005, Standard & Poor's
upgraded the Company's credit rating to "BB," citing our
reduced leverage and increased free cash flow.
* We were the leader in market share (based on gross gaming
revenues) in our St. Charles, Kansas City, Council Bluffs,
Vicksburg and Jackpot markets during the first quarter of
2005, while reducing our consolidated promotional
allowances as a percentage of casino revenues by 1.4
percentage points from the first quarter of 2004 to the
same period in 2005.
Craig H. Neilsen, Chairman and CEO, stated: "Our record first
quarter financial results are a testament to the strength of
Ameristar's brand. We continued to improve upon the financial
successes of prior years by setting new records for net revenues,
operating income, EBITDA, net income and earnings per share. Our
St. Charles property broke the all-time monthly Missouri gaming
revenue record in March 2005, further evidencing the success of
the Company's operating strategies. Additionally, with the
continued improvement in our operating results, our Board declared
a 25% increase in our cash dividend that reflects our commitment
to increasing our return to shareholders. We are pleased to report
the Mountain High acquisition is already providing a positive
contribution to our financial results and we expect to see further
growth as we complete our planned major capital improvement
projects at the property."
Financial Results
Net Revenues
Consolidated net revenues for the first quarter of 2005 were
$240.1 million, an increase of 12.0% compared to the first quarter
of 2004. All of our properties improved in net revenues, with
increases of 9.5% at Ameristar Council Bluffs, 8.5% at Ameristar
Kansas City, 3.4% at the Jackpot Properties, 3.1% at Ameristar
Vicksburg and 1.7% at Ameristar St. Charles. Mountain High
contributed $14.2 million in net revenues during its first full
quarter since being acquired in December 2004.
For the quarter, Ameristar Kansas City and Ameristar Council
Bluffs improved their market leadership positions to 35.8% and
42.6%, respectively, with increases of 1.7 and 0.8 percentage
points, respectively, over the prior-year first quarter. Ameristar
Vicksburg's long-time market leadership position was relatively
unchanged at 45.9%. Ameristar St. Charles recaptured the market
share leadership position with 31.6% of the market, despite a 1.5
percentage point decrease from the first quarter of 2004 and a
major facility expansion at the property's primary competitor that
was completed in the third quarter of 2004. Ameristar St. Charles
has led the St. Louis market for 8 of the last 10 quarters.
Led by a $26.7 million (14.4%) increase in slot revenues,
consolidated casino revenues for the first quarter of 2005
increased $27.1 million, or 12.6%, from the first quarter of 2004.
We believe that the growth in slot revenues has been driven by our
complete implementation of coinless slot technology at our
Ameristar-branded properties and our successful slot mix strategy,
which includes the continued installation of popular new-
generation, lower-denomination slot machines. Additionally,
Mountain High contributed $13.9 million to slot revenues during
the first quarter of 2005. We further believe casino revenues
increased in part as a result of our continued successful
implementation of our targeted marketing programs, as evidenced by
a 7.1% increase in rated play at our Ameristar-branded properties
from the first quarter of 2004.
Room revenues decreased 9.2%, from $6.3 million in the first
quarter of 2004 to $5.7 million in 2005. The $0.6 million decrease
was primarily due to reduced room capacity as a result of the
continuing renovation of the hotel rooms at Ameristar Council
Bluffs and Ameristar Kansas City, which are expected to be
completed in the second quarter and third quarter of 2005,
respectively.
Operating Income and EBITDA
In the first quarter of 2005, consolidated operating income
increased $4.1 million, or 9.8%, to $46.3 million. Consolidated
operating income margin decreased 0.4 percentage point from the
prior-year first quarter, to 19.3%. The decrease was driven in
part by a 3.0 percentage point decline at Ameristar St. Charles,
which was partially offset by operating income margin increases at
Ameristar Kansas City, Ameristar Vicksburg and the Jackpot
Properties of 4.7, 1.0, and 6.4 percentage points, respectively.
Consolidated EBITDA increased 12.8% to $67.1 million compared to
the first quarter of 2004. Additionally, consolidated EBITDA
margin in the first quarter of 2005 increased from 27.7% to 27.9%,
driven by improvements at Ameristar Kansas City, Ameristar
Vicksburg and the Jackpot Properties of 4.9, 1.3 and 8.0
percentage points, respectively, from the prior-year first
quarter. The growth in EBITDA margins at these properties was
partially offset by a 2.0 percentage point decline year-over-year
at Ameristar St. Charles. The growth in operating income, EBITDA
and the related margins at Ameristar Kansas City, Ameristar
Vicksburg and the Jackpot Properties was principally driven by the
increase in revenues noted above and the continued concentration
on cost-containment initiatives.
Operating income, EBITDA and the related margins at Ameristar St.
Charles were negatively impacted by higher employee benefit costs
and a more competitive market environment that has resulted in
increased promotional expenses. Additionally, operating income and
the associated margin were negatively affected by an increase in
depreciation expense resulting mostly from our recent slot product
acquisitions.
Ameristar Council Bluffs increased first quarter operating income
by $1.1 million, or 9.4%, and first quarter EBITDA by $1.4
million, or 9.6%, compared to the prior-year period. This
property's operating income and EBITDA benefited from construction
disruption and a reduced number of available slot machines at the
competing racetrack casino. The improvements in operating income
and EBITDA occurred despite a 2.0% increase in the Iowa tax rate
on gaming revenues of riverboat casinos, which became effective
July 1, 2004.
Mountain High provided $2.3 million of operating income in the
first quarter of 2005. Additionally, Mountain High favorably
impacted first quarter 2005 EBITDA by $3.6 million.
Operating income, EBITDA and the related margins were negatively
affected by a $2.8 million increase in corporate expense in the
first quarter of 2005, compared to the same quarter of 2004. The
increase was primarily the result of higher employee compensation,
employee benefits and professional fees and related costs
associated with our expanded development activities. Development-
related costs totaled $2.0 million for the quarter ended March 31,
2005, a $1.4 million increase over the same period in 2004. The
increase was mostly attributable to costs incurred in connection
with the pursuit of development opportunities in the United
Kingdom and costs associated with acquiring a potential gaming
site in Philadelphia and performing due diligence on a potential
acquisition that management elected not to pursue.
Depreciation and amortization expense increased to $20.8 million
in the first quarter of 2005 from $17.3 million in the first
quarter of 2004, primarily due to the increase in our depreciable
assets resulting from the continued purchase of new-generation,
lower-denomination slot product and $1.4 million in additional
depreciation expense relating to Mountain High.
Net Income and Diluted Earnings Per Share
For the first quarter of 2005, net income increased 20.9% to $19.2
million, from $15.9 million for the first quarter of 2004. Diluted
earnings per share were $0.68 in the quarter ended March 31, 2005,
compared to $0.58 in the corresponding prior-year quarter. Average
diluted shares outstanding increased by 0.9 million over the
prior-year quarter, in large part due to the substantial increase
in our stock price that resulted in increased dilution from in-
the-money stock options, adversely affecting diluted earnings per
share by $0.02. Interest expense for the 2005 first quarter was
$15.3 million, down $0.2 million from the first quarter of 2004.
An increase in our average long-term debt level resulting from the
$115.0 million borrowed in December 2004 to acquire Mountain High
was more than offset by the termination of our interest rate swap
agreement on March 31, 2004 and an increase in capitalized
interest. Other non-operating expenses included a $0.7 million
loss on disposal of assets at our Kansas City property during the
first quarter of 2005. For the quarter ended March 31, 2004, we
incurred a $0.2 million loss on early retirement of debt.
Our effective income tax rate for the quarter ended March 31, 2005
decreased to 36.9% from 40.0% for the quarter ended March 31,
2004, due primarily to a decrease in our effective state income
tax rate.
Liquidity and Capital Resources
Our financial position remains strong, with approximately
$100.9 million of cash and cash equivalents and $69.3 million of
available borrowing capacity under our senior credit facilities as
of March 31, 2005. During the first quarter of 2005, we decreased
our long-term debt by approximately $2.2 million from December 31,
2004, due primarily to a $1.0 million prepayment of debt related
to the Jackpot Properties and $1.0 million in scheduled debt
service payments under our senior credit facilities. At March 31,
2005, our total debt was $764.3 million, representing an increase
of $63.3 million from March 31, 2004.
Capital expenditures for the 2005 first quarter totaled
$33.7 million, which included the continued acquisition of new-
generation, lower-denomination slot machines, the ongoing hotel
room renovations at our Council Bluffs and Kansas City properties,
the capital improvement projects underway at Mountain High and the
implementation of information technology solutions to enhance our
operating capabilities.
We are currently seeking local government approvals to expand the
scope of the Mountain High hotel construction project by
increasing the number of rooms to be built from 300 to 400. We
believe that the additional rooms will further improve the
property's competitive position upon the completion of our planned
improvements. After giving effect to the anticipated increase in
the scope of the hotel project, we now expect to incur
approximately $160.0 million in total capital improvements at our
Mountain High property.
Outlook
Based on our preliminary results of operations in April 2005 and
our outlook for the remainder of the quarter, we currently
estimate operating income of $41 million to $43 million, EBITDA of
$62 million to $64 million (given anticipated depreciation expense
of $21 million), interest expense of $16 million and diluted
earnings per share of $0.55 to $0.59 for the second quarter of
2005.
Gaming regulatory authorities in Colorado, Iowa, Mississippi and
Missouri currently publish, on a monthly basis, gross gaming
revenue, market share and other financial information with respect
to the gaming facilities, including Ameristar's, that operate
within their respective jurisdictions. Because various factors in
addition to our gross gaming revenue (including changes in
operating costs, promotional allowances and other expenses)
influence our operating income, EBITDA and diluted earnings per
share, such reported information, as it relates to Ameristar, may
not be indicative of the results of our operations for such
periods or for future periods.
About Ameristar
Ameristar Casinos, Inc., is a leading Las Vegas-based gaming and
entertainment company known for its premier properties
characterized by innovative architecture, state-of-the-art casino
floors and superior dining, lodging and entertainment offerings.
Ameristar's focus on the total entertainment experience and the
highest quality guest service has earned it a leading market share
position in each of the markets in which it operates. Founded in
1954 in Jackpot, Nevada, Ameristar has been a public company since
November 1993. The company has a portfolio of seven casinos in six
markets: Ameristar St. Charles (greater St. Louis); Ameristar
Kansas City; Ameristar Council Bluffs (Omaha, Nebraska and
southwestern Iowa); Ameristar Vicksburg (Jackson, Mississippi and
Monroe, Louisiana); Mountain High in Black Hawk, Colorado (Denver
metropolitan area); and Cactus Petes and the Horseshu in Jackpot,
Nevada (Idaho and the Pacific Northwest).
* * *
As reported in the Troubled Company Reporter on March 4, 2005,
Standard & Poor's Ratings Services raised its ratings on Ameristar
Casinos, Inc., including its corporate credit rating to 'BB' from
'BB-'.
S&P said the outlook is stable. The Las Vegas, Nevada-based
casino owner and operator has $766 million in debt.
"The upgrade reflects Ameristar's continued solid operating
performance, modest debt leverage, and the expectation that the
company will continue to improve its credit measures in 2005,
providing a cushion within the rating to accomplish its growth
objectives," said Standard & Poor's credit analyst Peggy
Hwan.
AMKOR TECHNOLOGY: Liquidity Concerns Cue S&P to Pare Rating to B-
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on West Chester, Pennsylvania-based Amkor Technology, Inc.
to 'B-' from 'B', reflecting heightened liquidity concerns and
depressed operating results. The company remains committed to an
aggressive capital spending plan, despite operating losses and
$233 million of debt maturing in June 2006. The outlook is
negative.
"The ratings reflect strained financial flexibility, high
operating and financial leverage and volatile and competitive
industry conditions. These are only partly offset by the
company's strong market position," said Standard & Poor's credit
analyst Lucy Patricola.
Amkor is a leading independent provider of outsourced packaging
and testing services to semiconductor makers. Annual sales are
$1.9 billion, and total lease-adjusted debt was $2.1 billion at
March 2005.
For the quarter ended March 2005, revenues declined 7.9% from the
earlier quarter and EBITDA margin dropped to about 8% from ranges
of 18%-22% earned at the top of its cycle. Amkor expects revenues
to recover about 10% for the June quarter, driven by numerous
business opportunities in high-end packaging.
Still, profitability will remain low with EBITDA margin of about
10% because of continued excess capacity and high fixed cost
absorption. A recovery is expected in the second half of fiscal
2005.
In order to meet this high-end demand, the company remains
committed to aggressive capital spending, well in excess of
internally generated cash flow. Through June 2005, Amkor is
expected to spend about $190 million for new equipment and may
spend as much as $300 million for the year. Cash balances are
unlikely to be sufficient to cover negative free cash flow and
maturing debt, and as a result, the company will require external
financing to meet its obligations.
ARABIAN AMERICAN: Auditors Continue to Have Going Concern Doubts
----------------------------------------------------------------
Moore Stephens Travis Wolff, LLP, says there's substantial doubt
about Arabian American Development Company's ability to continue
as a going concern. The auditing firm points to cumulative losses
through December 31, 2004 totaling $19,108,460; a $20,428,408
working capital deficit at December 31, 2004; and defaults
totaling $17,509,108 under various loan agreements.
Arabian American Development Company's balance sheet dated
Dec. 31, 2004, shows $51 million in assets. The company reported
a $2.5 million net loss on $56 million of revenue in 2004.
Arabian American Development Company owes $11.0 million on account
of a note payable due the Saudi Arabian government. The note
payable was originally due in ten annual installments beginning in
1984. While the Company has not made any repayments, it has not
received any payment demands or other communications from the
Saudi government regarding the note payable. This is despite the
fact the Company remains active in Saudi Arabia and received the
Al Masane mining lease at a time when it had not made any of the
agreed upon repayment installments. Based on its experience to
date, management believes as long as the Company diligently
attempts to explore and develop the Al Masane project, that no
repayment demand will be made.
The Company has communicated to the Saudi government that its
delay in repaying the note is a direct result of the government's
lengthy delay in granting the Al Masane lease and requested formal
negotiations to restructure this obligation. Based on its
interpretation of the Al Masane mining lease and other documents,
management believes the government is likely to agree to link
repayment of this note to the operating cash flows generated by
the commercial development of the Al Masane project, which would
result in a long-term installment repayment schedule. In the
event the Saudi government was to demand immediate repayment of
this obligation, which management considers unlikely, the Company
would be unable to pay the entire amount due.
The Company also owes approximately $947,000 on account of accrued
salaries and termination benefits to employees working in Saudi
Arabia (this amount does not include amounts due the Company's
President and Chief Executive Officer who also primarily works in
Saudi Arabia and is owed accrued salaries and termination benefits
of approximately $1,195,000). The Company plans to continue
employing these individuals until it is able to generate
sufficient excess funds to begin payment of this liability.
Management will then begin the process of gradually releasing
certain employees and paying its obligation as they are released
from the Company's employment.
Arabian American Development Company's principal business
activities include refining various specialty petrochemical
products and developing mineral properties in Saudi Arabia and the
United States. All of its mineral properties are presently
undeveloped and require significant capital expenditures before
beginning any commercial operations.
ATA AIRLINES: Okun Withdraws Offer for Chicago Express Assets
-------------------------------------------------------------
As previously reported, the United States Bankruptcy Court for the
Southern District of Indiana concurred with the results of the
March 31, 2005 Auction that Okun Enterprises, Inc., tendered the
highest and best offer for substantially all the assets of Chicago
Express Airlines, Inc.
Judge Lorch approved the sale of Chicago Express' assets to Okun,
free and clear of liens, claims and interests, and overruled any
and all objections to the Chicago Express Asset Sale.
* * *
Okun Enterprises, Inc., has terminated its commitment to purchase
assets of Chicago Express Airlines, Inc., and ATA Airlines, Inc.
The Associated Press reported that Okun backed out after the
Federal Aviation Administration and the U.S. Department of
Transportation cancelled Chicago Express' flight certificate,
which was the primary asset it wanted. A re-certification could
take two years, according to Okun.
With Okun's withdrawal, CSC Investment Group became the winning
bidder. The Associated Press relates that CSC was the second
highest bidder with its $3.2 million offer for the Chicago
Express assets.
As previously reported, Okun offered $4,000,000, less adjustments,
for the Chicago Express assets and $2,440,000 for two Saab
aircraft owned by ATA Airlines.
ATA and Chicago Express said in a press release that they will
proceed under the guidelines established by the Bankruptcy Court
to close the transaction with the next highest bidder.
The sale to CSC is subject to the Bankruptcy Court's approval.
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 Nos. 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. 22; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ATA AIRLINES: Wants Stay Modified to Let Sapp Litigation Proceed
----------------------------------------------------------------
ATA Airlines, Inc., asks the United States Bankruptcy Court for
the Southern District of Indiana to modify the stay so that it may
continue to defend the civil case, Gerald Sapp vs. ATA Airlines,
Inc., Case No. 49D12-0408-CT-001619, currently pending in the
Marion County Superior Court 12, in Marion County, Indiana.
On May 18, 2004, Gerald Sapp originally filed the Complaint in the
Tippecanoe County Superior Court No. 2 for the injuries he
sustained as he ascended the stairs to a Chicago Express plane.
ATA Airlines' insurer, United States Aviation Underwriters,
retained Locke Reynolds LLP to defend ATA Airlines in the Sapp
Lawsuit. Prior to the Petition Date, significant discovery and
some motion practice had taken place in the Sapp Lawsuit.
While Mr. Sapp has not yet made a settlement demand, USAU has
informed Locke Reynolds that it has provided ATA Airlines with
adequate liability insurance to cover the damages, including all
costs of defense.
According to Terry E. Hall, Esq., at Baker & Daniels, Mr. Sapp has
agreed that his recovery, if any, will be sought solely from the
insurance policy issued by USAU. Mr. Sapp also agreed not to seek
to recover punitive damages from ATA Airlines.
The stay should be modified, Ms. Hall asserts, because:
(1) the Sapp Lawsuit does not involve issues particular to
the Chapter 11 cases and will not affect the progress of
the Debtors' reorganization;
(2) if successful, Mr. Sapp's damages will be paid by USAU,
not from the Debtors' estates, as well as covering all
costs of defense; and
(3) it is in the Debtors' best interests to allow the State
Court to resolve the Sapp Lawsuit.
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 Nos. 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. 22; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AXM PHARMA: Auditors Raise Going Concern Doubts
-----------------------------------------------
Lopez, Blevins, Bork & Associates, LLP, in Houston, Texas, says
there's substantial doubt AXM Pharma, Inc., can continue as a
going concern after reviewing the company's financial statements
for the year ending Dec. 31, 2004. The auditing firm points to a
$13,989,854 loss in 2004 after a $3,708,067 loss in 2003. The
auditors say that AXM Pharma will require additional working
capital to develop its business until AXM Pharma either (1)
achieves a level of revenues adequate to generate sufficient cash
flows from operations; or (2) obtains additional financing
necessary to support its working capital requirements.
AXM Pharma, Inc. (AMEX:AXJ), is a Nevada corporation, and owns a
pharmaceutical company based in The People's Republic of China.
AXM Pharm sells of over-the-counter and prescription
pharmaceutical products in The People's Republic of China through
its second-level subsidiary, AXM Pharma (Shenyang), Inc., located
in the city of Shenyang in the Northeastern portion of the
People's Republic of China. AXM Pharma (Shenyang), Inc., is 100%
owned by Werke Pharmaceuticals, Inc., which is a first-level
wholly owned subsidiary of the Nevada company. AXM Shenyang
currently holds 42 licenses to produce over-the-counter and
prescription pharmaceutical products in The Peoples Republic of
China. Of these 42 licenses, AXM has commercialized four of these
licenses. The Company's Dec. 31, 2004, balance sheet shows $12.3
million in assets. The Company hosts a Web site at
http://www.axmpharma.com/
CAREY INT'L: Moody's Puts B3 Rating on Planned $115M Term Facility
------------------------------------------------------------------
Moody's Investors Service assigned to Carey International, Inc.,
a B3 rating on its proposed $115 million first lien bank facility,
a Caa2 rating on its proposed $85 million second lien term
facility and a senior implied rating of B3. This is the first
time that Moody's has rated Carey's debt.
The ratings reflect:
(a) a highly leveraged capital structure,
(b) weak track record of free cash flow from operations and
(c) the company's exposure to economic trends and other events
that affect levels of business travel.
The ratings also reflect:
(a) the company's leading market position,
(b) broad portfolio of customers and
(c) cost structure improvements.
Moody's assigned the following ratings:
-- $35 million senior secured first lien revolving credit
facility due 2010, rated B3;
-- $80 million senior secured first lien term loan B facility
due 2011, rated B3;
-- $85 million senior secured second lien term loan facility
due 2012, rated Caa2;
-- Senior implied rating, rated B3;
The ratings outlook is stable.
The ratings are subject to the review of the final executed
documents.
Proceeds from the $80 million first lien term loan, $85 million
second lien term loan, cash on hand and a limited amount of
revolver borrowings will be used to refinance existing secured and
subordinated indebtedness and pay related fees and expenses.
Availability under the first lien revolver at closing is expected
to be about $24 million after reduction for about $10 million of
outstanding letters of credit. The company's parent, Carey
Holdings, Inc. -- Carey Holdings -- is expected to have about $38
million of redeemable pay-in-kind preferred stock with a mandatory
redemption date in 2014 or later, which is owned by the holders of
the company's common stock.
The ratings reflect Carey's highly leveraged capital structure and
weak cash flow generation in the last few years. On a pro forma
basis for the refinancing at November 30, 2004, total debt of $176
million would have been about 7.4 times unadjusted EBITDA. For
the fiscal year ended November 30, 2005, Moody's expects total
debt to EBITDA to decline to about 6 times, which reflects
expected sales growth and improvements in the company's cost
structure.
Free cash flow from operations after capital expenditures was:
Post-CapEx
For the Fiscal Year Ended Free Cash Flow
------------------------- --------------
November 30, 2002 ($7.3) million
November 30, 2003 $1.6 million
November 30, 2004 ($7.5) million
Carey's revenues are vulnerable to trends or events that reduce
overall levels of domestic or international travel including
economic recessions, political instability and terrorist threats.
Carey's revenues declined from $255 million for the fiscal year
ended November 30, 2000 to $200 million for the fiscal year ended
November 30, 2003. The company attributes the decline in revenues
to a sharp decrease in the number of trips booked by its customers
after September 11, 2001 and a weak business climate from 2001 to
2003.
However, even during this difficult period the company was able to
maintain its pricing as average revenue per trip steadily
increased. Carey's revenues increased to $225 million in 2004
reflecting the stronger business climate and increased trip
volume.
Moody's believes that changes made by Carey in the last few years
to reduce its fixed cost structure and to increase its focus on
independent operators will give the company more financial
flexibility to deal with changes in the economy and projected trip
volumes. The company has reduced headcount and other
administrative expenses, consolidated call centers and spent a
significant portion of its capital expenditure budget to improve
its information technology systems.
The company's cash outflows for insurance premiums and claims have
declined from $3.9 million in 2003 to $1.6 million in 2004.
However, the company remains exposed to potential losses due to
policy limits and the scope of its insurance program.
Furthermore, the company, its independent operators and licensees
could experience higher insurance premiums as a result of adverse
claims experience, general increases in premiums by insurance
carriers or both. Significant increases in such premiums, or a
successful claim against the company beyond the scope of its
insurance coverage or in excess of the limits of the policies
could be material. The company's automotive insurance policy
includes a self-insured retention of $750,000 per occurrence.
The company's revenues are generated from limousine service
performed by:
* independent operators,
* company employees,
* franchisees and
* affiliates.
Revenues from independent operators comprised close to 50% of the
company's revenues in 2004. Carey has focused in recent years on
increasing revenues from independent operators since these
revenues generate higher margins and reduce the company's capital
expenditure needs.
The ratings also benefit from Carey's leading position in:
* a highly fragmented industry,
* a diverse customer base and
* the company's relationship with one of its investors and
marketing partners, the Ford Motor Company.
The stable ratings outlook reflects Moody's expectation that trip
volume and average revenue per trip will increase in 2005 and
Carey will generate free cash flow to debt in the 2-5% range over
the next twelve months. Moody's expects the company to benefit
from the improvement in its cost structure and its continued focus
on its special events business, which has higher profit margins.
The ratings or outlook could be pressured if the company continues
to generate negative free cash flow due to a lack of revenue
growth or a substantial increase in operating expenses. The
ratings or outlook would likely be upgraded if the company can
generate sustainable free cash flow to debt in the 6-8% range and
debt to EBITDA declines below 5 times.
The proposed $115 million first lien facility and $85 million
second lien facility are each guaranteed by Carey Holdings and all
domestic subsidiaries of Carey and are secured by first and second
liens, respectively, on Carey's assets, including the stock and
assets of its domestic subsidiaries. The Caa2 rating assigned to
the second lien facility recognizes the effective subordination of
second lien debt holders to a substantial level of first security
debt. Interest payments on the second lien facility are expected
to include a cash and pay in kind component.
Headquartered in Washington, D.C., Carey is a leading provider of
limousine services serving 480 cities in 75 countries. Revenue
for the fiscal year ended November 30, 2004 was about $225
million.
CAREY INTERNATIONAL: S&P Junks $85 Million Second-Lien Term Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to Carey International Inc. At the same time, a
'B-' rating and recovery rating of '3' were assigned to the
company's first-lien bank facilities, consisting of a $35 million
revolving credit facility maturing in 2010 and an $80 million term
loan B maturing in 2011. The '3' recovery rating indicates
expectations of a meaningful (50%-80%) recovery of principal in
the event of a payment default.
In addition, a 'CCC' rating was assigned to the company's $85
million second-lien term loan maturing in 2012, with a recovery
rating of '5', indicating expectations of a negligible recovery of
principal in the event of a payment default.
The outlook is stable. The Washington, D.C. based limousine
company has about $187 million of lease-adjusted debt.
"Ratings reflect Carey's highly leveraged capital structure and
exposure to cyclical and competitive end markets with limited
barriers to entry," said Standard & Poor's credit analyst Lisa
Jenkins. "Helping to mitigate these challenges somewhat are the
company's focus on the more profitable, premium segment of the
market and a fairly flexible cost structure," the analyst added.
Demand for Carey's services is primarily driven by the state of
the economy. The impact of a cyclical downturn is reflected in
Carey's performance during the 2001 to 2003 period, when the
company's annual trip volumes declined by 14% and financial
results suffered accordingly. To better deal with such cyclical
pressures, Carey has reduced the fixed component of its cost
structure by using independent operators, as opposed to company-
owned vehicles and employees.
Today, the company estimates that slightly over two-thirds of its
cost base is variable. The company has also pursued geographic
diversification to help offset cyclical pressures in individual
markets. Carey currently provides services in 542 cities in 59
countries. This global footprint, along with a global reservation
system, enhances the company's competitive position somewhat
relative to other providers of similar services, but barriers to
entry in the business remain relatively low and many local
competitors exist in individual markets.
The ratings and outlook assume that credit protection measures
will improve modestly over the next two years as a result of
healthy demand and continuing efforts to lower costs and improve
efficiency, which should preclude a downgrade or outlook change to
negative. However, the improvement is not expected to be
sufficient to warrant an upgrade or an outlook change to positive.
CATHOLIC CHURCH: Tucson Files Amended Plan & Disclosure Statement
-----------------------------------------------------------------
The Diocese of Tucson delivered a Second Amended Plan of
Reorganization and Disclosure Statement to the U.S. Bankruptcy
Court for the District of Arizona on April 25, 2005. According to
the Rev. Al Schifano, Moderator of the Curia, the Disclosure
Statement has been amended to reflect changes in, among other
things:
* the Settlement Trust and the Litigation Trust;
* appointment of a special arbitrator;
* tort claim evaluation;
* classification of claims;
* real property;
* strong-arm powers;
* tort claims;
* limitation of funding; and
* continuation of committee and release of Unknown Claim
Representative and Guardian ad Litem.
The Trusts
The Second Amended Plan provides that the Settlement Trust and the
Litigation Trust will be funded from:
-- the transfers by the Diocese on the Effective Date and any
earnings obtained by the Trustees from investments of
assets after the Effective Date;
-- any Insurance Action Recoveries after the Effective Date;
and
-- proceeds of settlements with Settling Insurers and payments
from Participating Third Parties up to a maximum of
$20,000,000.
The allocation of the transferred Cash and Assets between the
Settlement Trust and the Litigation Trust will be determined by
the Bankruptcy Court as part of the confirmation process if a
determination is necessary. If no Tort Claimant affirmatively
elects to have his or her Tort Claim determined pursuant to the
terms of the Litigation Trust, there will be no allocation to the
Litigation Trust.
Special Arbitrator
Instead of a Special Master, the Second Amend Plan states that
allowance of the Tort Claims in the Settlement Trust will be
evaluated and determined by a Special Arbitrator proposed by the
Diocese, the Official Committee of Tort Creditors and the
Guardian ad Litem and the Unknown Claims Representative, and
selected by the Bankruptcy Court as part of the confirmation
process. If a Tort Claim is allowed -- whether by the Special
Arbitrator or pursuant to a Claim Allowance Agreement -- the Tort
Claim will be classified into a Tier based on criteria contained
in the Plan.
Under the Second Amended Plan, there are five Tiers for direct
victims of abuse. There is also a provision for treatment of the
Relationship Tort Claims -- claims of parents or spouses of Tort
Claimants who filed Tort Claims and who were allegedly abused by
clerics or other workers related to the Diocese.
The Second Amended Plan also provides for a Tort Claimant who
might otherwise have a credible Tort Claim but which may be barred
by the statute of limitations to participate as a Tort Convenience
Claim, so long as the Tort Claimant elects to do so on the Ballot.
The criteria for each Tier will consist of considerations like the
evidence:
(a) that the abuse occurred;
(b) of injury to plaintiff, both the injury of the event
itself and the emotional injury suffered after the event;
(c) that the claim is not barred by limitations; and
(d) of the Diocese's responsibility for the action.
There will be consideration of issues like (i) the age of the
victim at the time of the abuse, (ii) the frequency and duration
of the abuse, (iii) the notoriety of the alleged abuser, and (iv)
the strength of the victim's repression case, if necessary to
preserve the claim.
The Special Arbitrator will be required to adhere strictly to
established Arizona case and statutory law in allowing or
disallowing Unknown Tort Claims based on a claim of repressed
memory or other incompetence that under currently applicable
Arizona law would toll the statute of limitations.
Tort Claim Evaluation
The Plan contemplates that the Reorganized Debtor and the Tort
Committee will have a continuing role in evaluating Tort Claims.
The Special Arbitrator will give notice to the Reorganized Debtor
and to all professionals retained by the Tort Committee --
Committee Professional -- of the Allowance of any Tort Claim and
the Tier in which the Special Arbitrator is allowing the Tort
Claim.
The Reorganized Debtor or the Tort Committee may object to the
Allowance, including the Tier placement by written objection to
the Special Arbitrator with 20 days of receiving the notice. The
Special Arbitrator will serve notice on the Reorganized Debtor and
the Committee Professional if the Special Arbitrator is changing
the Tier Placement or decision to allow the Tort Claim.
If the Special Arbitrator does not change the Allowance of the
Claim or the Tier placement, the Reorganized Debtor or the Tort
Committee may file an objection to the Allowance in the Bankruptcy
Court pursuant to its retained jurisdiction. The Bankruptcy
Court's decision on any objection will be final and not subject to
any appeal.
If a Tort Claimant wishes to assert his or her right to a jury
trial or trial to the Court to liquidate a Tort Claim -- a Non-
Settling Tort Claimant -- he or she will have to affirmatively
elect the treatment on the Ballot sent with the Plan. Any jury
trial or trial to the Court of a Non-Settling Tort Claimant will
be held in the U.S. District Court for the District of Arizona,
Tucson Division. If a Non-Settling Tort Claimant does not
commence an action against the Trustees of the Litigation Trust
within 90 days of the Effective Date, then the election will be
null and void, and any Tort Claim of the Non-Settling Tort
Claimant will be determined by the Special Arbitrator as that
Tort Claimant was a Settling Tort Claimant.
Classification of Claims
Tucson has added a category for Escrow Agent Secured Claims
(Class 3) under the Second Amended Plan. The Diocese also revised
the estimated distribution for certain classes.
Class Description Recovery Under the Plan
----- ------------ -----------------------
N/A Administrative Paid in full
Claims
Assuming an August 1, 2005 Effective
Date, the Diocese estimates that
the Allowed Administrative Claims
between February 25, 2005, and the
Effective Date would be $750,000 to
$800,000.
N/A Priority Paid in full
Unsecured Claims
N/A Priority Paid in full within six years
Tax Claims of the date of assessment.
Estimated amount of Allowed
Claims: $0
1 Prepetition Impaired, to be satisfied by the
Employee Claims Diocese assuming and honoring policy
after the Effective Date.
Estimated date of distribution
varies depending on the Employee's
status and use of vacation and sick
leave time.
Estimated amount of Allowed Claims
not to exceed $364,000
2 Prepetition Impaired, paid in full, with half of
Property Tax the amount paid 30 days after the
Secured Claims Effective Date and the remaining
half paid six months after the
Effective Date.
Estimated amount of Allowed Claims
not to exceed $8,754
3 Escrow Agent Impaired, to be paid in accordance
Secured Claims with the terms of the Promissory
Note dated March 25, 2002, due
January 24, 2007.
As additional collateral, the
Reorganized Debtor will execute a
pledge of the Restricted St.
Augustine Account.
Estimated amount of Allowed
Claims: $3,000,000
Estimated Distribution: $3,000,000
4 Other Secured Unimpaired, no payment anticipated
Claims but letter of credit will remain in
place. Bank One, N.A. will retain
its collateral securing the letter
of credit.
Estimated amount of Allowed Claims
not to exceed $300,000
Estimated Distribution: $0
5 General Unsecured Impaired, $500 will be distributed
Convenience Claims per claim 30 days after the
Effective Date or applicable Claim
Payment Due.
Estimated amount of Allowed
Claims: $7,353
6 Parish Guaranty Unimpaired, no distribution
Claims
Parishes will continue to pay in
accordance with terms.
Estimated amount of Allowed
Claim: $7,268,203
7 Parish Unsecured Impaired, estimated Distribution
Claims unknown
Interest only at 2.5% per annum,
monthly payments of $44,738 until
paid in full.
Estimated amount of Allowed Claims
not to exceed $6,962,867
8 General Unsecured Impaired, paid in full, in
Claims installments beginning 30 days after
the Effective Date and monthly after
that, until paid in full.
Amortized so that all payments will
be made by the 15th anniversary of
the Effective Date. Obligations
bear Interest at 4.5% per annum.
Estimated amount of Allowed Claims
not to exceed $2,499,518
9 Other Tort and Impaired, to be paid from proceeds
Employee Claims of applicable insurance to the
extent available; otherwise, no
distribution
Estimated amount of Allowed Claims
is unknown
Estimated distribution is unknown
because Claims are unliquidated
10 Tort Claims Impaired
Initial Distribution Amount for:
* Tier 1 is $100,000,
* Tier 2 is $200,000,
* California Tier is $300,000,
* Tier 3 - $425,000, and
* Tier 4 - $600,000
Amounts of distribution are
subject to increase depending on
the number of Tort Claims Allowed
and the number of Unknown Claims
that are asserted and Allowed.
An Unknown Claims Reserve of no
more than $5.5 million Tort Claims
of Non-Settling Tort Claimants will
be determined by a jury or the
District Court and recovery limited
to a Pro Rata share of any of the
Fund allocated to the Litigation
Trust.
Estimated distribution is unknown
because final amount will depend
on the number of Allowed Tort
Claims and Unknown Tort Claims
11 Insurance and Unimpaired, $694,711 will be
Benefit Claims distributed per claim to be paid
from proceeds of applicable
insurance or from operations of the
Diocese or the Reorganized Debtor as
the claims are due.
12 Penalty Claims Impaired, no distribution
Estimated amount of Allowed Claims
is unknown
The Class 3 Claim consists of the amounts due the Escrow Agent
pursuant to the Promissory Note in the amount of $3,000,000. The
Class 3 Claim, as and when it is an Allowed Claim, will be treated
as a fully Secured Claim and will be paid in full without interest
on the due date of the Promissory Note, January 24, 2007. The
Escrow Agent will retain its lien on its collateral to the extent
of its Class 3 Allowed Escrow Agent Secured Claim. On the
Effective Date, the Diocese will provide the Escrow Agent with
additional security by executing a pledge of the Restricted
St. Augustine Account to the Escrow Agent. The Account is
currently invested in certificates of deposit with Smith Barney.
Strong-Arm Powers
Tucson discloses that a claimant sought authority from the Court
to assert the debtor-in-possession's strong-arm authority under
Section 544 of the Bankruptcy Code to supplement a claim that the
Parish Real Property and other Parish Property are part of the
Estate.
As with a claim under Section 541 that the estate's property
includes the Parishes' property, the Diocese does not believe that
the Estate's strong-arm powers under Section 544 would defeat the
Parishes' property interests. Moreover, any litigation seeking to
use strong-arm powers under Section 544 to defeat the Parishes'
property interests would be subject to the same delay, costs and
risks and outweigh the benefits of the litigation.
Tort Claims
The time to file Claims expired on April 15, 2005 and the universe
of Tort Claims, excluding Unknown Tort Claims, became known.
Father Schifano reports that 108 proofs of claim alleging injuries
related sexual abuse committed by clergy or others associated with
the Diocese were filed prior to the Claims Bar Date. Since five
of the timely filed proofs of claim were duplicates of other
Proofs of Claim, an aggregate of 103 individuals filed Proofs of
Claim.
Of the 103 Proofs of Claim:
-- nine claims were filed by parents of direct victims of
sexual abuse, although in two instances, the direct victims
did not file Tort Claims;
-- an estimated 36 claims contain abuse allegations that, on
their face, are subject to objection on various grounds.
The Diocese will work with the Committee to object to these
Tort Claims prior to confirmation.
-- approximately 32 claims require additional information
prior to being allowed, either because they require
additional proof as to the allegation or they appear to be
barred by the statute of limitations. The Plan
contemplates giving these Tort Claimants an election to
their Tort Claims treated as Tort Convenience Claims.
-- the Diocese is presently working with the Tort Committee
and the remaining 24 Tort Claimants and their counsel to
attempt to resolve allowance and treatment of their Tort
Claims under the Settlement Trust or pursuant to a Claim
Allowance Agreement.
Limitation of Funding
If the recoveries from all sources for payment of allowed Tort
Claims, Participating Third Parties, Settling Insurers, Insurance
Action Recoveries, and payments by the Diocese, exceed
$20,000,000 -- prior to any sharing arrangement as provided in the
Plan -- any amount over $20,000,000 will be retained by or
returned to the Diocese to be used by the Diocese in making
payments to Creditors other than Tort Claimants, Relationship
Tort Claimants or Unknown Tort Claimants under the terms of the
Plan or for other purposes as the Diocese deems appropriate.
Continuation of Committee
& Release of Representatives
On the Effective Date, the Tort Committee will continue for
purposes specified in the Plan. The Unknown Claims Representative
and the Guardian ad Litem will be released from all rights and
duties arising from or related to the Reorganization Case.
A full-text copy of the Tucson's Second Amended Disclosure
Statement is available for free at:
http://bankrupt.com/misc/tucson_second_amended_disc_statement.pdf
A full-text copy of the Tucson's Second Amended Reorganization
Plan is available for free at:
http://bankrupt.com/misc/tucson_second_amended_plan.pdf
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. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
CATHOLIC CHURCH: St. George's Delivers BIA Proposal to Creditors
----------------------------------------------------------------
The Roman Catholic Episcopal Corporation of St. George's filed a
proposal to its creditors with the Official Receiver's Office
pursuant to the Bankruptcy and Insolvency Act. A Notice of
Intention filed on March 8, 2005, effected a "stay of proceedings"
in civil actions against the Corporation including those launched
since 1991 on behalf of victims of sexual abuse. On April 18,
2005, the Corporation requested and was granted an extension of
the stay of proceedings until May 6, 2005, allowing the
Corporation time to evaluate its assets and to prepare the
proposal to creditors.
Over the past number of weeks the Corporation and its advisors
have been working with representatives of certain creditors to get
their input for the proposal that was filed Friday, May 6. Within
the next three weeks the creditors will review the proposal and
will meet with Bishop Douglas Crosby and the Trustee to discuss
the terms and to ask questions. Following that meeting the
creditors will vote to accept the Corporation's proposal or to
reject it.
"We are grateful for the cooperation we received from our
creditors in the preparation of this proposal," said Bishop
Crosby. "We remain hopeful that they will find it fair and just
and that they will accept it."
If the proposal is accepted, the Corporation will work towards
fulfilling the commitments as outlined under the proposal, thereby
addressing its moral, legal and financial obligations to its
creditors, particularly those who are victims of sexual abuse, and
will be able to meet its pastoral obligations to the priests and
parishioners of the Diocese. If the creditors reject the
proposal, the Roman Catholic Episcopal Corporation of St. George's
will be deemed to have filed an assignment in bankruptcy and a
trustee will be appointed to administer the estate.
"Our hands are open," said the bishop. "We have offered
everything we have. The future of this diocese and our ministry
is now in the hands of those who have suffered the most. If we
must go bankrupt, then we will do so, accepting our share in their
suffering."
The Diocese of St. George's -- http://www.rcchurch.com/--
is located in Western Newfoundland. Established in 1904, it
serves a Catholic population of 32,060 found in 20 parishes under
the pastoral care of 18 priests. St. George's is one of four
Catholic dioceses in the province. The Diocesan Center is located
in Corner Brook.
CHAMPIONSHIP AUTO: Auditors Raise Going Concern Doubts
------------------------------------------------------
Deloitte & Touche LLP audited Championship Auto Racing Teams,
Inc.'s financial statements for the year ending December 31, 2004.
At the conclusion of that engagement, the auditing firm says
there's substantial doubt about the company's ability to continue
as a going concern. The auditors point to the Company's recurring
loses from operations; the sale of substantially all the operating
assets of its CART, Inc., subsidiary; pending or threatened
litigation against the Company and its subsidiaries; and the
Company's intent to liquidate its remaining assets.
As previously reported in the Troubled Company Reporter, the
Company's formerly wholly owned subsidiary, CART, Inc., filed a
chapter 11 petition on December 16, 2003 (Bankr. S.D. Ind. Case
No. 03-23385). Pursuant to the bankruptcy court order, the
Company sold the operating assets of CART and the stock of Pro-
Motion Agency, Inc., a former wholly owned subsidiary of the
Company and CART Licensed Products, Inc., a former wholly-owned
subsidiary of CART, Inc. Also, pursuant to the bankruptcy court
order, the Company cancelled its stock in CART, Inc. and
transferred the remaining assets and liabilities to an
unconsolidated liquidating trust. During 2003, the Company ceased
the operations of its wholly owned subsidiary, Raceworks LLC, and
intends to liquidate its remaining assets.
Championship Auto Racing Teams, Inc.'s balance sheet dated
Dec. 31, 2004, shows $5.7 million in assets.
CNE GROUP: Auditors Raise Going Concern Doubts
----------------------------------------------
Rosen Seymour Shapss Martin & Company LLP audited CNE Group,
Inc.'s consolidated financial statements for the year ending
Dec. 31, 2004. Their report includes language stating that
substantial doubt exists as to CNE's ability to continue as a
going concern. The auditors observe that CNE's financial
statements show an accumulated deficit at December 31, 2004, of
approximately $21,500,000. The Company has incurred substantial
losses from continuing operations and sustained substantial cash
outflows from operating activities. Further, at December 31,
2004, CNE's balance sheet shows a $3,146,873 working capital
deficit.
CNE Group is a holding company whose primary operating
subsidiaries are SRC Technologies, Inc., and U.S. Commlink, Ltd.
SRC has two operating subsidiaries: Connectivity, Inc., and Econo-
Comm, Inc. Econo-Comm, Inc. conducts business under the name of
Mobile Communications. These companies, which CNE acquired on
April 23, 2003, market, manufacture, repair and maintain remote
radio and cellular-based emergency response products to a variety
of federal, state and local government institutions, and other
vertical markets throughout the United States. SRC has
intellectual property rights to certain key elements of these
products -- specifically, certain communication, data entry and
telemetry devices. In addition, CNE engages in the business of
e-recruiting through its CareerEngine, Inc., subsidiary. The
e-recruiting business does not generate a significant part of
CNE's revenue, and is not significant to the operations of the
Company.
CNE's corporate executive offices are located at 200 West 57th
Street in Manhattan. SRC, Connectivity and ECI are located at
3733 NW 16th Street in Lauderhill, Florida. US Commlink is
located at 6244 Preston Avenue in Livermore, California.
As of April 1, 2005, including its two executive officers, CNE
employed 19 workers. The company generated $2.6 million of
revenue in 2004, and its balance sheet showed
$9.5 in assets at Dec. 31, 2004.
COMPOSITE TECH: Files Reorganization Plan & Disclosure Statement
----------------------------------------------------------------
Composite Technology Corporation (OTC Bulletin Board: CPTC) filed
its plan of reorganization and disclosure statement with the U.S.
Bankruptcy Court for the Central District of California. The Plan
proposes to pay 100% of the Debtor's debts. The plan and
disclosure statement were filed on the same day the Debtor sought
for chapter 11 protection.
CTC's Chairman and CEO Benton Wilcoxon states: "We are pleased to
present a plan that addresses our litigation claims and provides
for payment in full to our creditors. We anticipate that the vast
majority of our creditors will support our reorganization." Mr.
Wilcoxon added that, "Nothing contained in our plan of
reorganization is designed or intended to affect our shareholders.
We understand the concerns of our shareholders and have spent
considerable time addressing and responding to these concerns. We
want them to know that CTC is taking all available measures to
ensure our valued shareholders are protected as we address our
litigation claims."
Leonard M. Shulman of Shulman Hodges & Bastian LLP, CTC bankruptcy
counsel, stated that: "It is extremely rare for a Debtor to move
this quickly through the bankruptcy process. Less than one case
out of a hundred is filed with a finalized plan, particularly one
proposing to pay creditors 100% of their claims. This is another
extraordinary example of CTC's commitment to address the needs of
its many constituencies."
Headquartered in Irvine, California, Composite Technology
Corporation -- http://www.compositetechcorp.com/-- provides high
performance advanced composite core conductor cables for electric
transmission and distribution lines. The proprietary new ACCC
cable transmits two times more power than comparably sized
conventional cables in use today. ACCC can solve high-temperature
line sag problems, can create energy savings through less line
losses, and can easily be retrofitted on existing towers to
upgrade energy throughput. ACCC cables allow transmission owners,
utility companies, and power producers to easily replace
transmission lines without modification to the towers using
standard installation techniques and equipment, thereby avoiding
the deployment of new towers and establishment of new rights-of-
way that are costly, time consuming, controversial and may impact
the environment. The Company filed for chapter 11 protection on
May 5, 2005 (Bankr. C.D. Calif. Case No. 05-13107). Leonard M.
Shulman, Esq., at Shulman Hodges & Bastian LLP, represents the
Debtor in its restructuring efforts. As of March 31, 2005, the
Debtors reported $13,440,720 in total assets and $13,645,199 in
total liabilities.
CRDENTIA CORP: Completes Prime Staff & Mint Medical Acquisition
---------------------------------------------------------------
Crdentia Corp. (OTC Bulletin Board: CRDE) acquired Prime Staff, LP
and Mint Medical Staffing Odessa, LP, providers of per diem
nursing services throughout Texas. Terms of the transactions were
not released.
Prime Staff, which operates out of two locations in Houston, and
Mint Medical Staffing Odessa, with operations in Lubbock and
Odessa, Texas, were both founded by Tony M. Brown. On a combined
basis, the companies have an extensive database of nurses and
dominant contractual relationships in both the Houston Metroplex
and West Texas.
"Prime Staff and Mint Medical Staffing Odessa nicely complement
Crdentia's focus on serving major cities like Houston while
expanding our commitment to underserved rural markets," said
Crdentia's Chairman and Chief Executive Officer James D. Durham.
"This acquisition gives Crdentia a footprint across all of Texas,
and with an operational hub in the Houston Metroplex, we will look
to continue to expand our presence in surrounding areas."
Tony M. Brown, founder of Prime Staff and Mint Medical Staffing
Odessa, commented, "I am convinced that Crdentia's strong market
presence and multidimensional approach to temporary staffing will
help drive solid results for Prime Staff and Mint Medical Staffing
Odessa going forward. Crdentia has the industry experience and
management strength to accelerate the growth prospects for these
businesses."
Crdentia's President Pamela Atherton stated, "As in most areas of
the country, demand for qualified healthcare providers out-paces
the available supply in the communities served by Prime Staff and
Mint Medical Staffing Odessa. We expect to take advantage of this
and grow the business by augmenting their local staff with
additional resources, such as travel nurses, to reduce the amount
of unfilled staffing requests in these markets."
Prime Staff, LP/Mint Medical Staffing Odessa, LP represents
Crdentia's ninth acquisition focusing on healthcare staffing
services since commencing operations in August, 2002. Crdentia
currently ranks among the 10 largest healthcare staffing providers
in the U.S. market.
About the Company
Crdentia Corp. is one of the nation's leading providers of
healthcare staffing services. Crdentia seeks to capitalize on an
opportunity that currently exists in the healthcare industry by
targeting the critical nursing shortage issue. There are many
small, private companies that are addressing the rapidly expanding
needs of the healthcare industry. Unfortunately, due to their
relatively small capitalization, they are unable to maximize their
potential, obtain outside capital or expand. By consolidating
well-run small private companies into a larger public entity,
Crdentia intends to facilitate access to capital, the acquisition
of technology, and expanded distribution that, in turn, drive
internal growth. For more information, visit
http://www.crdentia.com/
At Dec. 31, 2004, Crdentia's balance sheet showed a $24,517,043
stockholders' deficit, compared to $4,741,642 of positive equity
at Dec. 31, 2003.
DOE RUN: Jan. 31 Balance Sheet Upside-Down by $195 Million
----------------------------------------------------------
Doe Run Resources Corp.'s balance sheet dated January 31, 2005,
shows that the company's liabilities exceed assets by $195
million. For the quarter ending Jan. 31, 2005, the company
reported $15.8 million of net income on $235.6 million in net
sales.
For the year ended October 31, 2003 and for several years prior,
the Company reported recurring losses, primarily the result of
declining treatment charges and low metal prices, a condition
exacerbated by the Company's significant interest costs prior to a
restructuring in October 2002. These conditions have resulted in
the Company's net capital deficiency.
The Company is highly leveraged and has significant commitments
for environmental matters and Environmental Remediation and
Management Program (PAMA) expenditures that require it to dedicate
a substantial portion of cash flow from operations to the payment
of these obligations, which will reduce funds available for other
business purposes. These factors also increase the Company's
vulnerability to general adverse conditions, limit the Company's
flexibility in planning for or reacting to changes in its business
and industry, and limit the Company's ability to obtain financing
required to fund working capital and capital expenditures and for
other general corporate purposes. An unfavorable outcome to
certain contingencies discussed below, would have a further
adverse effect on the Company's ability to meet its obligations
when due. The Company's ability to meet these obligations is also
dependent upon future operating performance and financial results,
which are subject to financial, economic, political, competitive
and other factors affecting the Company, many of which are beyond
the Company's control.
The Company has substantial debt service requirements in the
future, including maturities in 2005 of $15.5 million for a Term
Note and $7.5 million of Old Notes, and also significant capital
requirements under environmental commitments in Peru. The
Company's revolving credit facilities also expire in the fourth
quarter of 2005, and will require renegotiation to extend their
terms. "There can be no assurance that the Company will be
successful, or if it is successful, that the renewal would be at
terms that are favorable to the Company," Doe Run cautions.
"Discussions have been held with Renco to extend the Term Note,
but there can be no assurance that the term will be extended," the
Company says in a regulatory filing.
Management will continue to assess market and operating conditions
at prevailing metal prices to maximize its operating profit or
limit losses, while allowing the Company to fulfill its
environmental obligations.
Doe Run Peru's existing PAMA requires it to perform projects in
2005 and 2006 at a total cost of $121.2 million. Doe Run Peru
expects that it will not be able to comply with the spending
requirements of the PAMA investment schedule in 2005 and 2006 with
respect to the construction of a sulfuric acid plant required by
the PAMA and, as a result, could be subject to penalties. Failure
to comply with the PAMA could result in the cessation of
operations at the La Oroya smelter.
The Peruvian Government has issued a supreme decree (Supreme
Decree), which recognized that exceptional circumstances may
justify an extension of one or more projects within the scope of a
PAMA. Doe Run Peru will submit an application for extension to
modify the requirements of the existing PAMA and extend the term
of the PAMA to complete the construction of the sulfuric acid
plant contemplated by the original PAMA. Doe Run Peru will
perform other environmental projects to reduce fugitive emissions,
including heavy metal dust, to address the health issues of the
community. As of January 31, 2005, the remaining total cost of
the current PAMA projects, including the sulfuric acid plant
construction, and these projects is approximately $136,000. If
the extension of the PAMA is approved, management expects to fund
the PAMA projects from cash from operations.
Upon approval of a modified PAMA, Doe Run Peru would be required
to create a trust account. The trust account would administer the
receipts and disbursements related to the extended PAMA project.
The Supreme Decree requires that receipts from sales be remitted
monthly directly to the trust account, in an amount sufficient to
fund the month's cash requirements of the extended PAMA projects.
Such an arrangement is prohibited by Doe Run Peru's revolving
credit facility (the Doe Run Peru Revolving Credit Facility),
which expires on September 23, 2005. Accordingly, a renegotiated
Doe Run Peru Revolving Credit Facility will need to comply with
the requirements established by the Supreme Decree, should Doe Run
Peru's PAMA be extended.
The Supreme Decree also requires that, within 30 days of the
approval of the PAMA extension, the Company provide financial
security in an amount equal to 20% of the projected cost of the
project or projects to be extended. The Company currently expects
the overall investment required to build the sulfuric acid plant
to be approximately $102 million.
A default under the requirements of the PAMA could result in a
default under the Doe Run Peru Revolving Credit facility. A
default under the Doe Run Peru Revolving Credit Facility would
result in a default under the Doe Run Revolving Credit Facility.
These issues raise substantial doubt about the Company's ability
to continue as a going concern. Management believes that Doe Run
Peru will obtain an approval of an extension to complete the
sulfuric acid plant. There is no assurance, however, that Doe Run
Peru will receive an extension, or, if it does, that the project
will be completed within the time limitation specified by the
Supreme Decree. Doe Run Peru has developed a business plan that
identifies several revenue generating and cost reduction
activities. Management believes the plan will enhance liquidity,
which is expected to improve Doe Run Peru's ability to make the
investments under the PAMA, assuming an extension is received.
Revenue enhancement and cost reduction projects include the
processing of zinc ferrites and an effort to bring more recycled
feed into the smelter. Cost reduction measures include manpower
reductions through voluntary retirement and decreased power usage
in the zinc circuit.
Doe Run Peru has received assessments of income tax, including
penalties and interest, and Value Added Tax (VAT) totaling $102.5
million and $41 million, respectively. In addition, the Company
estimates that the effect of similar assessments for periods not
yet assessed would be approximately $1.4 million and $19 million
for the income tax and VAT matters, respectively. Furthermore,
Doe Run Peru would also be required to make additional workers'
profit sharing payments equal to 8% of the increase in taxable
income, or approximately $5.8 million for tax years 1998 through
2004.
Management believes that in each case Doe Run Peru has followed
the applicable Peruvian tax statutes and intends to pursue all
available administrative and judicial appeals. Doe Run Peru is
not required to make any payments pending the administrative
appeal process. If Doe Run Peru is not successful in the
administrative appeal processes and were to appeal in the judicial
system, some type of financial assurance would be required, which
would have a significant adverse effect on liquidity.
Net unused availability at January 31, 2005 and October 31, 2004
under the Doe Run Revolving Credit Facility was approximately
$22.3 million and $22.5 million, respectively and under the Doe
Run Peru Revolving Credit Facility was virtually none. In
addition to the availability under its revolving credit
facilities, cash balances at Doe Run and Doe Run Peru were $1.5
million and $3.9 million, respectively, at January 31, 2005 and
$13.4 million and $6.9 million, respectively, at October 31, 2004.
Management believes that high metal prices and other revenue
enhancements, and the issuance of the Supreme Decree, by allowing
an application to extend La Oroya's PAMA requirement for the
construction of the sulfuric acid plant, will enable the Company
to continue as a going concern through October 31, 2005.
DOLLAR FINANCIAL: Mar. 31 Balance Sheet Upside-Down by $62 Million
------------------------------------------------------------------
Dollar Financial Corp. (NASDAQ:DLLR), reported results for the
fiscal quarter ended March 31, 2005.
Highlights for the Quarter Ended March 31, 2005
-- Acquired the assets of We the People USA, Inc., a legal
document preparation business consisting of 170 franchise
stores; acquired 17 company-operated and 2 franchised
financial services stores in the United Kingdom; and
acquired 24 company-operated financial services stores in
the State of Louisiana.
-- Increased total revenue by 17.0% or $11.0 million to $76.4
million.
-- Increased comparable store sales by $8.4 million or 13.1%;
factoring out the effect of foreign currency it was a 9.3%
increase.
-- Realized a 25.3% increase in revenue for the Company's
international operations to $43.2 million.
-- Realized a 7.7% increase in revenue for the Company's U.S.
operations to $33.3 million.
-- Increased net consumer lending revenue by $6.5 million or
24.5%.
-- Increased check cashing revenue by $2.3 million or 7.6%.
Commenting on the results, Jeff Weiss, the Company's Chairman and
Chief Executive Officer, stated, "We are very pleased with our
performance in our first full quarter as a publicly traded company
as we continued to successfully execute on our long-term strategy
of building out our strong product mix in a diversified set of
international markets. During the quarter, we completed the
acquisition of the assets of We the People, a retail franchise
legal document preparation business, further enhancing our
existing diversified product portfolio. In addition, we completed
two other separate acquisitions of retail financial services
locations in the U.S. and in the U.K., which allowed us to
leverage our existing corporate infrastructure while adding to our
footprint in the multiple markets we operate in. We also continue
to focus our efforts on increasing our store and regional
operating efficiencies, increasing customer service through the
use of our enhanced technology platform, and maintaining our key
lending ratios."
Company funded loan originations were $166.7 million for the third
quarter, representing an increase of 36.2% or $44.3 million
compared to originations of $122.4 million for the same period in
the prior year. Increases in loan origination volumes were
primarily driven by the Company's Canadian market, which realized
an increase of 41.6% or $31.6 million, due primarily to the
extension of increased credit terms to certain of our customers.
As a percentage of gross loan fees, the provision for loan losses
and adjustment to servicing revenue was stable at 11.6% for the
quarter ending March 31, 2005 versus 11.6% for the prior year
quarter. While there was a decline in loss rates for our U.S.
loan portfolio, it was offset by slightly higher loss rates in our
Canadian and U.K. consumer lending operations. Net charge offs on
company-funded consumer loans as a percentage of total company-
funded consumer loan originations were 1.0% for the third quarter
compared to 0.8% for the same period in the prior year. In our
check cashing operations, the face amount of the average check
cashed increased to $437 for the third quarter and the average fee
per check increased 10.5% to $16.94 for the third quarter compared
to $15.33 for the same period in the prior year.
The Company's store and regional margin increased by $4.2 million
to $31.3 million or 40.9% of total revenues for the third quarter,
compared to $27.1 million or 41.5% for the same period in the
prior year. The decrease in store and regional margin percentage
was primarily due to the earnings drag associated with the opening
of nine new company-operated stores in the third quarter and a
total of thirty new store openings thus far in fiscal 2005.
Corporate expenses for the third quarter of fiscal 2005 increased
$2.5 million over the third quarter of the previous year to $10.8
million. The increase is primarily attributable to compensation
costs related to significant growth of the Company's foreign
operations as well as the addition of corporate personnel to
support the continuing rapid expansion of our store network and
new product additions. Additionally, in the fiscal 2005 third
quarter, the Company incurred significant costs associated with
becoming a public company, as well as increased insurance, legal
costs and other professional fees. Finally, the Company has begun
preparations for Sarbanes Oxley internal controls compliance and
although the required compliance date is not until June 2006, the
Company has already incurred incremental costs in order to meet
this requirement.
The Company's interest expense for the third quarter declined to
$7.8 million, a decrease of 23.5% or $2.4 million from $10.2
million for the same period for the prior year. The decrease in
interest expense was primarily the result of the Company using
proceeds from its initial public stock offering to redeem certain
of its long-term senior and senior subordinated debt obligations.
The Company expensed $10.7 million of non-recurring charges in the
third quarter related to the Company's extinguishment of certain
long-term debt obligations and management fees in conjunction with
the Company's initial public stock offering. After expensing the
$10.7 million of non-recurring charges, the Company's income
before income taxes was $958,000 for the quarter ending March 31,
2005. On a proforma basis, income before income taxes would be
$11.7 million, which would represent a $4.3 million or 58.2%
increase over the $7.4 million realized in last year's third
quarter.
Including the effects of the $10.7 million of non-recurring
charges, the Company realized a net loss of $4.5 million for the
three months ended March 31, 2005, as compared to a net income of
$1.6 million for the same period in the prior year.
FDIC Guidance
As the Company previously disclosed, on March 2, 2005, the FDIC
issued revised guidance for member banks operating in the payday
lending business. Commenting on the FDIC revised guidance, Mr.
Weiss stated, "Our bank partners have informed us that they have
submitted to the FDIC plans for compliance with the revised
guidelines, and we continue to discuss with our bank partners our
plans for the potential implementation of the revised guidance in
our U.S. retail store base. To date, we do not believe that the
FDIC has responded to our banks with respect to these plans. Part
of our planning also includes the option of offering company-
funded short-term loan products to our customers under state laws
in most of the states where we presently partner with banks to
offer these loans. In total, only 21 of our 337 domestic
financial services store locations (four stores in Texas and 17
stores in Pennsylvania) are located in states where we do not have
the option of offering customers company-funded loans. We
continue to expect that the impact, if any, of the Guidance on our
store operations will be manageable and we are confident in the
sustainability of our business model."
Fiscal 2005 Guidance
The Company does not currently expect a significant impact from
the recently revised FDIC guidelines on fiscal 2005 results;
however, the company operates in a regulatory environment where
future events may change the Company's current assumptions and
perspective. Given the Company's current assumptions that there
will not be a significant effect on fiscal 2005 results from the
revised FDIC guidance, the Company is raising its guidance for
fiscal 2005 revenue to between $282.0 and $285.0 million and
EBITDA to between $75.0 million and $76.0 million. EBITDA is a
non-GAAP financial measure. The most comparable GAAP financial
measure is income before income taxes. The reconciliation between
EBITDA and income before taxes is consistent with the historical
reconciliation as presented at the end of this release.
About the Company
Dollar Financial Corp. -- http://www.dfg.com/-- is a leading
international financial services company serving under-banked
consumers. Its customers are typically lower- and middle-income
working-class individuals who require basic financial services
but, for reasons of convenience and accessibility, purchase some
or all of their financial services from us rather than from banks
and other financial institutions. To meet the needs of these
customers, Dollar Financial provides a range of consumer financial
products and services primarily consisting of check cashing,
short-term consumer loans, Western Union money order and money
transfer products, reloadable VISA(R) branded debit cards,
electronic tax filing, bill payment services, and legal document
preparation services.
At March 31, 2005 Dollar Financial operated a network of 1,342
stores, including the 170 We the People legal document franchised
locations and 700 company-operated stores, in 35 states, the
District of Columbia, Canada and the United Kingdom. Our store
network is the largest network of its kind in each of Canada and
the United Kingdom and the second-largest network of its kind in
the United States. Our customers, many of whom receive income on
an irregular basis or from multiple employers, are drawn to our
convenient neighborhood locations, extended operating hours and
high-quality customer service. Our products and services,
principally our check cashing and short-term consumer loan
program, provide immediate access to cash for living expenses or
other needs.
At Mar. 31, 2005, Dollar Financial Corp.'s balance sheet showed a
$62,367,000 stockholders' equity, compared to a $50,887,000
deficit at Jun. 30, 2004.
EASYLINK SERVICES: Posts $2.5 Million Net Loss in First Quarter
---------------------------------------------------------------
EasyLink Services Corporation (NASDAQ: EASY) reported financial
results for the first quarter ended March 31, 2005.
First quarter 2005 results were in accordance with the guidance
previously given by the Company. The Company had a net loss of
$2.5 million, which included a one-time pre-tax charge of
$2.5 million relating to the separation agreement with George Abi
Zeid, former President of the international division. The Company
reported net income of $1 million for the fourth quarter of 2004,
and net income of $.9 million in the first quarter of 2004.
Revenues for the first quarter of 2005 were $20.4 million as
compared to $20.9 million during the fourth quarter of 2004 and
$24.3 million in the first quarter of 2004. Gross profit improved
to 62% in the first quarter of 2005 as compared to 61% in the
fourth quarter of 2004 and 58% in the first quarter of 2004.
The Company further reported that it had negative earnings before
interest, taxes, depreciation and amortization during the first
quarter of 2005 of $1.3 million which included a one time pre-tax
charge of $2.5 million relating to the separation agreement with
George Abi Zeid. This compares to $2.9 million during the fourth
quarter of 2004 and $3.3 million during the first quarter of 2004.
EBITDA is not a financial measure within generally accepted
accounting principles. Additionally, a reconciliation of this
non-GAAP financial measure to net income for all periods is also
presented. The Company considers EBITDA to be a financial
indicator of its operational strength, its ability to service debt
and its capacity to make new investments in its services.
Cash and cash equivalents at the end of the first quarter were
$8.1 million, as compared to $12.3 million at the end of the
fourth quarter and $6.1 million at the end of the first quarter
2004. The decline in cash reflects $1.7 million in capital
spending primarily associated with the Company's planned move from
our Bridgeton, MO facility, principal payments on the debt
including a $1.4 million payoff of the last remaining subordinated
debentures and $.7 million in payments associated with the
separation agreement of George Abi Zeid. The Company anticipates
capital spending for the second quarter to be similar to first
quarter levels.
Thomas Murawski, President and Chief Executive Officer of
EasyLink, said, "First quarter 2005 results were in line with our
expectations, reflecting the ongoing execution of our strategic
plan. As planned the Company swung to a loss after six
consecutive profitable quarters, primarily due to the impact of
the one time charge related to the separation agreement with
George Abi Zeid. We continue to see good quarter over quarter
growth from our Transaction Management Services unit, up 9% over
Q4 2004, a trend which we expect to continue during the second
quarter. We also saw improved revenue stability in our
Transaction Delivery Services unit during the first quarter, a
trend we also expect to continue this quarter. These are early
positive indicators that the increased investment in sales
resources put into place in the latter part of 2004, and our
reorganization during the first quarter into focused business
units for transaction delivery and transaction management, are
having their intended effect. We also streamlined our approach to
managing the international part of our business by globally
aligning all product management and marketing functions within
these business units. And finally, we added three more very
capable individuals to our board, which is now comprised entirely
of outside directors other than myself."
About the Company
EasyLink Services Corporation (NASDAQ: EASY) --
http://www.EasyLink.com/-- headquartered in Piscataway, New
Jersey, is a leading global provider of services that power the
exchange of information between enterprises, their trading
communities, and their customers. EasyLink's networks facilitate
transactions that are integral to the movement of money,
materials, products, and people in the global economy, such as
insurance claims, trade and travel confirmations, purchase orders,
invoices, shipping notices and funds transfers, among many others.
EasyLink helps companies become more competitive by providing the
most secure, efficient, reliable, and flexible means of conducting
business electronically.
* * *
Going Concern Doubt
In its Form 10-K for the fiscal year ended Dec. 31, 2005, filed
with the Securities and Exchange Commission, notwithstanding the
significant improvements in EasyLink's financial condition and
results of operations over the past three years, the Company has
again received a going concern qualification from its auditors
stating that EasyLink has a working capital deficiency and an
accumulated deficit that raises substantial doubt about the
Company's ability to continue as a going concern. The Company
also received a going concern qualification from its auditors for
each of the years ended December 31, 2000, 2001, 2002 and 2003.
EPIXTAR CORP.: Auditors Raise Going Concern Doubts
--------------------------------------------------
Rachlin Cohen & Holtz LLP audited Epixtar Corp.'s financial
statements for the year ending Dec. 31, 2004, and says there's
substantial doubt about the Company's ability to continue as a
going concern. The auditing firm points to the Company's
$8 million working capital deficiency and a $733,000 stockholders'
deficiency at Dec. 31, 2004. Auditors at Liebman Goldberg &
Drogin, LLP, expressed similar doubts when they looked at the
company's 2003 financials.
Epixtar Corp. and its subsidiaries engage in two primary lines of
business: Business Process Outsourcing (BPO) and Internet Service
Provider (ISP). Until 2004, revenues were mainly derived from the
ISP business, which provides Internet services, including
unlimited Internet access and email, to small business
subscribers. In the fiscal year ended December 31, 2004, the ISP
business generated approximately 88% of the Company's revenues.
As a result of ongoing interaction with the BPO and contact center
industry in connection with the ISP business, combined with
extensive analysis of the contact center industry, Epixtar made
the strategic decision to focus its energies and resources on
developing and operating offshore contact center services in the
BPO line of business. As a result of this decision, Epixtar
intends to maintain rather than expand the ISP business to
concentrate its efforts in the offshore contact center services
area.
Voxx
In January 2005, Epixtar Corp. (OTCBB: EPXR) disclosed that it
aligned its domestic and international contact center assets under
a wholly owned subsidiary designated Voxx Corporation.
Voxx "leverages Epixtar's accrued expertise in the Business
Process Outsourcing (BPO) market with capacity development,
operational management, and technical infrastructure," the Epixtar
said, "to capture a portion of the $173 billion market estimated
for BPO services."
The decision to put the operating subsidiaries under a single
holding company (Voxx) provides the necessary focus in the
Company's drive toward an anticipated critical mass of over 5,000
workstations before the end of 2005. "Recent transactions and
valuations assigned to comparable organizations in our space
suggests that each of our workstations will be worth a meaningful
multiple over cost as we approach critical mass," according to
David Srour, Epixtar/Voxx chief operating officer. "Annual revenue
per workstation is projected at between $15,000 and $20,000". The
Company has focused its business development efforts on the
financial services and telecommunications industries, favoring
Global 1000 enterprise clients. Currently two major long distance
telecommunications providers, two satellite television providers,
a UK-based wireless provider, a B2C/B2B data management company, a
national mortgage lender, a major financial publication, and
several credit card companies, among others, contract with
Epixtar/Voxx for services.
Recruiting demands driven by sales growth have resulted in the
addition of roughly 800 new personnel over the ast year. Personnel
requirements, one of the most challenging aspects of contact
center operations, are supported by the Company's highly
sophisticated approach to recruiting and retention including the
use of local celebrity MTV VJ's and retail-style career centers
strategically placed throughout the Philippines. The Company's
state-of-the-art production facilities are located in Class-A
office buildings and dedicate a high portion of the floor space to
recreation and training.
Chief executive officer Ilene Kaminsky said, "Grouping all of our
BPO operations under a single entity provides operational clarity
for our outsourcing business. We have expended significant
capital, over $20 million so far, to develop a highly competitive
platform for service delivery. This consists of human resources
best practices, state-of-the-art technology and user-friendly
physical infrastructure intelligently integrated to provide our
clients with the best possible contact center solution. We believe
that this platform, together with our recent acquisition makes us
a preeminent provider of CRM and marketing solutions within the
teleservices industry."
The Company now has roughly 1,400 workstations operational and
4,000 additional workstations scheduled for completion by year-end
(1,000 of those are planned for deployment in the first quarter of
2005.) This includes 400 domestic workstations at contact centers
in Duluth, Minn.; Wheeling, W.V.; and Pittsburg, Kan.
Additionally, the Company maintains back-office and network
operations facilities in Charlotte, N.C., together with its Miami
headquarters and network operations center.
The Company's Philippines facilities are situated in Eastwood City
CyberPark in Manila; Makati, central Manila; Alabang, a suburb
just south of metropolitan Manila; and a facility in the final
phases of development in the Clark Special Economic Zone (formerly
Clark Air Force Base), one hour north of Manila. Expansion will
include the recently acquired lease at Aseana Business Park in
Metro Manila and a possible location at the former Subic Bay Naval
Base. The Company is also exploring potential acquisitions in
Latin America.
About Epixtar/Voxx
Epixtar Corp., based in Miami, Florida, is the parent company of
Voxx Corporation. Voxx, Epixtar's most active subsidiary, is a
business process outsourcing (BPO) company -- aggregating contact
center capacity and robust telephony infrastructure to deliver
comprehensive, turnkey services to the enterprise market. From
campaign design through ongoing management, Epixtar delivers
value-driven, creative outsourcing solutions for customer
relationship management (CRM) and telesales initiatives of its
customers. Clients use the Company's marketing expertise and well-
trained personnel to acquire, support, and enhance the customer
experience, reduce costs and generate top-line revenue.
Epixtar/Voxx currently maintains seven contact centers in the
Philippines and the United States with developmental plans for
additional centers over the next 24 months.
FEDERAL METAL: Files Schedules of Assets & Liabilities in New York
------------------------------------------------------------------
Federal Metal & Glass Corp. filed its Schedules of Assets and
Liabilities with the U.S. Bankruptcy Court for the Eastern
District of New York, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property
B. Personal Property $9,311,645
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims
E. Creditors Holding
Unsecured Priority
Claims $1,431,315
F. Creditors Holding
Unsecured Nonpriority
Claims $1,019,791
---------- ----------
Total $9,311,645 $2,451,106
Headquartered in New York, Federal Metal & Glass Corp., filed for
chapter 11 protection on April 21, 2005 (Bankr. E.D.N.Y.
Case No. 05-16228). When the Debtor filed for protection from its
creditors, it listed $1 Million to $10 Million in estimated assets
and $1 Million to $10 Million in estimated debts.
FIBERMARK INC: Dec. 31 Balance Sheet Upside-Down by $101.9 Million
------------------------------------------------------------------
FiberMark, Inc., (OTC Bulletin Board: FMKIQ) issued its financial
results for the fourth quarter and year ended December 31, 2004.
For full-year 2004, the company reported a net loss of
$25.6 million, versus a loss of $119.2 million in 2003. The
smaller net loss reflects an improvement in operating income to
$20.4 million from an operating loss of $76.8 million in 2003
attributable to improved sales; lower interest expense as
$25.7 million of post-petition interest was stayed by the
company's chapter 11 filing; the lack of asset impairment charges
in 2004 versus $93.6 million of such charges in 2003, including
$92.3 million in goodwill impairment; and, partially offsetting
these amounts, chapter 11-related reorganization expenses in 2004
of $25.1 million.
Sales in 2004 totaled $438.1 million versus $399.3 million in
2003, an increase of $38.8 million or 9.7%. Sales from the
company's German operations were $210.3 million in 2004 compared
with $185.1 million in 2003, an increase of $25.2 million or
13.6%. Excluding the effects of a stronger euro, which accounted
for $22.1 million of the increase, sales from German operations
increased by $3.1 million or 1.7%. Sales from German operations
grew despite continued weak economic conditions, reflecting gains
in automotive filter media, nonwoven wallcovering and tape-base
materials, which offset declines in other markets. North American
operations sales were $227.8 million in 2004 compared with $214.2
million in 2003, an increase of $13.6 million or 6.3%. These sales
gains reflected general economic improvement, as well as new
product and business development that resulted in share gains in
the company's graphic design and packaging businesses.
For the 2004 fourth quarter, the company reported a net loss of
$4.7 million, or $0.66 per share, versus a loss of $2.3 million,
or $0.33 per share, in 2003. Reorganization expense, which was not
present in 2003, accounted for $4.6 million of the net loss in the
fourth quarter of 2004, while interest expense was $8.4 million
lower for the reason indicated above. Fourth-quarter 2003 results
included a $1.4 million non-cash asset impairment charge, as well
as a one-time foreign exchange transaction gain of $4.0 million,
which were not factors in the fourth quarter of 2004. Higher pulp,
energy and other raw material costs were only partially offset by
selling price increases, while higher volume largely filled this
shortfall.
Sales in the fourth quarter of 2004 were $106.9 million versus
$95.2 million in 2003, an increase of $11.7 million or 12.3%.
Sales from German operations were $54.2 million in 2004 compared
with $45.1 million in 2003, an increase of $9.1 million or 20.2%.
Net of foreign currency translation effects of $7.4 million,
German operations sales grew by 3.8%. Sales from North American
operations were $52.7 million compared with $50.1 million, an
increase of $2.6 million or 5.2%.
As of December 31, 2004, FiberMark's pro forma unused borrowing
capacity under its existing credit facilities was $45.2 million.
"Fourth-quarter sales were stronger than in 2003, aided by
strengthening markets and market development successes through our
North American operations, continued strength in key German
operations markets and exchange rate benefits," said Alex Kwader,
chairman and chief executive officer. "Technical specialties and
office products continue to contend with modest market erosion,
while our publishing and packaging businesses generated gains.
Publishing in particular rebounded due to industry improvement and
favorable comparisons versus a weak 2004 quarter."
Headquartered in Brattleboro, Vermont, FiberMark, Inc. --
http://www.fibermark.com/-- produces filter media for
transportation applications and vacuum cleaning; cover stocks and
cover materials for books, graphic design, and office supplies and
base materials for specialty tapes, wallcoverings and sandpaper.
The Company filed for chapter 11 protection on March 30, 2004
(Bankr. D. Vt. Case No. 04-10463). Adam S. Ravin, Esq., D.J.
Baker, Esq., David M. Turetsky, Esq., and Rosalie Walker Gray,
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 $329,600,000 in
total assets and $405,700,000 in total debts.
At Dec. 31, 2004, FiberMark, Inc.'s balance sheet showed a
$101.9 million stockholders' deficit, compared to a $68.9 million
deficit at Dec. 31,2003.
FORD MOTOR: S&P Cuts Ratings on 9 Synthetic ABS Transactions
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on nine
U.S. single-issue synthetic ABS transactions related to Ford Motor
Co. and Ford Motor Credit Co. to 'BB+' from 'BBB-'. The sole
exception is STEERS 2002-3-F, which is lowered to 'B+' from 'BB'.
Last week's downgrades of Ford and its related entities do not
have any immediate rating impact on U.S. CMBS, RMBS, or other ABS
transactions.
Each of the affected securitizations is weak-linked to the long-
term corporate credit, senior unsecured debt, or preferred stock
ratings for Ford or Ford Credit. Either Ford or Ford Credit
provides the underlying collateral/referenced obligations in the
downgraded securitizations, as indicated below.
The May 5, 2005 downgrade of Ford, Ford Credit, and all related
entities to non-investment-grade, reflects Standard & Poor's
skepticism about whether management's strategies will be
sufficient to counteract mounting competitive challenges.
A copy of the Ford Motor Co.-related research update, dated May 5,
2004, is available on RatingsDirect, Standard & Poor's Web-based
credit analysis system http://www.ratingsdirect.com/
Ratings Lowered
Corporate Backed Trust Certificates Ford Motor Co
Deb-Backed Ser 2001-36
Rating
------
Class To From Role
----- -- ---- ----
A-1 BB+ BBB- Underlying Collateral
A-2 BB+ BBB- Underlying Collateral
Corporate Backed Trust Certificates, Ford Motor Company
Note-Backed Series 2003-6
Rating
------
Class To From Role
----- -- ---- ----
A-1 BB+ BBB- Underlying Collateral
CorTs Trust for Ford Debentures
Rating
------
Class To From Role
----- -- ---- ----
Certs BB+ BBB- Underlying Collateral
CorTS Trust II for Ford Notes
Rating
------
Class To From Role
----- -- ---- ----
Certs BB+ BBB- Underlying Collateral
PPLUS Trust Series FMC-1
Rating
------
Class To From Role
----- -- ---- ----
Certs BB+ BBB- Underlying Collateral
PreferredPLUS Trust
Rating
------
Series To From Role
------ -- ---- ----
FRD-1 BB+ BBB- Underlying Collateral
SATURNS Trust No. 2003-5
Rating
------
Series To From Role
------ -- ---- ----
2003-5 BB+ BBB- Underlying Collateral
Trust Certificates (TRUCs) Series 2002-1 Trust
Rating
------
Series To From Role
------ -- ---- ----
2002-1 BB+ BBB- Underlying Collateral
STEERS Credit-Backed Trust Series 2002-3 F
Rating
------
Class To From Role
----- -- ---- ----
Certs B+ BB Referenced Obligation
GB HOLDINGS: Auditors Raise Going Concern Doubts
------------------------------------------------
GB Holdings, Inc., has suffered recurring net losses, has a net
working capital deficiency, and has significant debt obligations
which are due within one year. These matters raise substantial
doubt about GB Holdings' ability to continue as a going concern,
KPMG LLP says, after competing its review of the company's
financial statements for the year ending December 31, 2004.
GB Holdings' balance sheet dated Dec. 31, 2004, shows $216,958,000
in assets. GB Holdings generated $171,243,000 in net revenues in
2004.
Casino History & Operations
GB Holdings, Inc., is a Delaware corporation and was a wholly
owned subsidiary of Pratt Casino Corporation through December 31,
1998. PCC, a Delaware corporation, was incorporated in September
1993 and was wholly owned by PPI Corporation, a New Jersey
corporation and a wholly owned subsidiary of Greate Bay Casino
Corporation. Effective after December 31, 1998, PCC transferred
21% of the stock ownership in GB Holdings to PBV, Inc., a newly
formed entity controlled by certain stockholders of GBCC.
As a result of a certain confirmed plan of reorganization of PCC
and others in October 1999, the remaining 79% stock interest of
PCC in GB Holdings was transferred to Greate Bay Holdings, LLC,
whose sole member as a result of the same reorganization was PPI.
In February 1994, GB Holdings acquired Greate Bay Hotel and
Casino, Inc., a New Jersey corporation, through a capital
contribution by its then parent. From its creation until July 22,
2004, GBHC's principal business activity was its ownership of The
Sands Hotel and Casino located in Atlantic City, New Jersey. GB
Property Funding Corp., a Delaware corporation and a wholly owned
subsidiary of GB Holdings, was incorporated in September 1993 as a
special purpose subsidiary of GB Holdings for the purpose of
borrowing funds for the benefit of GBHC.
On January 5, 1998, GB Holdings, and its then existing
subsidiaries, filed petitions for relief under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the District of New Jersey. On August 14, 2000, the
Bankruptcy Court entered an order confirming the Modified Fifth
Amended Joint Plan of Reorganization Under Chapter 11 of the
Bankruptcy Code Proposed by the Official Committee of Unsecured
Creditors and High River Limited Partnership and its affiliates
for GB Holdings and its then existing subsidiaries.
High River Limited Partnership is an entity controlled by Carl C.
Icahn. On September 13, 2000, the New Jersey Casino Control
Commission approved the Plan. On September 29, 2000, the Plan
became effective. All material conditions precedent to the Plan
becoming effective were satisfied on or before September 29, 2000.
On the Effective Date, Property's existing debt securities,
consisting of its 10-7/8% First Mortgage Notes due January 15,
2004 and all of GB Holdings' issued and outstanding shares of
common stock owned by PBV and GBLLC were cancelled. As of the
Effective Date, an aggregate of 10,000,000 shares of new common
stock, par value $.01 per share, of GB Holdings were issued and
outstanding, and $110,000,000 of 11% Notes were issued by
Property. Holders of the Old Notes received a distribution of
their pro rata shares of (i) the 11% Notes and (ii) 5,375,000
shares of the GB Holdings' Common Stock.
In October 2003, Atlantic Coast Entertainment Holdings, Inc., a
Delaware corporation and a wholly-owned subsidiary of GBHC was
formed. ACE Gaming, LLC, a New Jersey limited liability company
and a wholly-owned subsidiary of Atlantic Holdings was formed in
November 2003. Atlantic Holdings and ACE were formed in
connection with a transaction, which included a Consent
Solicitation and Offer to Exchange in which holders of $110
million of 11% Notes due 2005, issued by Property, were given the
opportunity to exchange their 11% Notes, on a dollar for dollar
basis, for $110 million of 3% Notes due 2008, issued by Atlantic
Holdings.
The Exchange Offer was consummated on July 22, 2004, and holders
of approximately $66.3 million of 11% Notes exchanged such notes
for approximately $66.3 million of 3% Notes. Also on July 22,
2004, in connection with the Consent Solicitation and Offer to
Exchange, the indenture governing the 11% Notes was amended to
eliminate certain covenants and to release the liens on the
collateral securing such notes. The Transaction included, among
other things, the transfer of substantially all of the assets of
GB Holdings to Atlantic Holdings. Also on July 22, 2004, in
connection with the consummation of the Transaction, GBHC and
Property merged into GB Holdings with GB Holdings as the surviving
entity. Atlantic Holdings and ACE own and operate The Sands and
prior to July 22, 2004, Atlantic Holdings and its subsidiary, ACE,
had limited operating activities. GB Holdings has no operating
activities and it has no income. GB Holdings only significant
asset is its investment in Atlantic Holdings.
In connection with the transfer of the assets and certain
liabilities of GB Holdings, including the assets and certain
liabilities of GBHC, Atlantic Holdings issued 2,882,938 shares of
common stock, par value $.01 per share, of Atlantic Holdings to
GBHC, which, following the merger of GBHC, became, the sole asset
of GB Holdings. Substantially all of the assets and liabilities
of GB Holdings and GBHC (with the exception of the remaining 11%
Notes and accrued interest thereon, the Atlantic Holdings Common
Stock, and the related pro rata share of deferred financing costs)
were transferred to Atlantic Holdings or ACE. As part of the
Transaction, an aggregate of 10,000,000 warrants issued by
Atlantic Holdings, were distributed on a pro rata basis to the
stockholders of GB Holdings upon the consummation of the
Transaction.
Those Warrants allow the holders to purchase from Atlantic
Holdings, at an exercise price of $.01 per share, an aggregate of
2,750,000 shares of Atlantic Holdings Common Stock and are only
exercisable following the earlier of (a) either the 3% Notes being
paid in cash or upon conversion, in whole or in part, into
Atlantic Holdings Common Stock, (b) payment in full of the
outstanding principal of the 11% Notes exchanged, or (c) a
determination by a majority of the board of directors of Atlantic
Holdings (including at least one independent director of Atlantic
Holdings) that the Warrants may be exercised. The Sands' New
Jersey gaming license was transferred to ACE in accordance with
the approval of the New Jersey Casino Control Commission.
GB Holdings owns 2,882,938 shares of Atlantic Holdings Common
Stock, which, on a non-diluted basis, represents 100% of the
outstanding Atlantic Holdings Common Stock. At the election of
the holders of a majority of the aggregate principal amount of the
3% Notes outstanding, which they may exercise at any time in their
sole discretion, such Notes are convertible into 4,367,062 shares
of Atlantic Holdings Common Stock. Also, as set forth above, if
such holders so elect, the Warrants will become exercisable for
2,750,000 shares of Atlantic Holdings Common Stock. Currently,
affiliates of Mr. Icahn own approximately 96% of the 3% Notes and
have the ability, which they may exercise prior to the maturity of
the 11% Notes or at any other time in their sole discretion, to
determine when and whether the 3% Notes will be paid in or
convertible into Atlantic Holdings Common Stock at, or prior to,
maturity thereby making the Warrants exercisable.
If the 3% Notes are converted into Atlantic Holdings Common Stock
and if the Warrants are exercised, GB Holdings will own 28.8% of
the Atlantic Holdings Common Stock and affiliates of Carl Icahn
will beneficially own approximately 63.4% of the Atlantic Holdings
Common Stock (without giving effect to the affiliates of Mr.
Icahn's interest in Atlantic Holdings Common Stock which is owned
by GB Holdings). Affiliates of Carl Icahn currently own
approximately 77.5% of GB Holdings' Common Stock.
GB Holdings and Property listed the GB Holdings' Common Stock and
11% Notes on the American Stock Exchange on March 27, 2001. On
January 13, 2004, the Securities and Exchange Commission granted
GB Holdings application to delist the 11% Notes from trading on
the AMEX. On January 14, 2004, AMEX halted trading on the 11%
Notes and on February 2, 2004, trading resumed. On April 12,
2004, the SEC granted GB Holdings application to delist the 11%
Notes from trading on the AMEX. On April 19, 2004 the AMEX
delisted the 11% Notes. On September 2, 2004, the Securities and
Exchange Commission granted GB Holdings application to delist the
GB Holdings' Common Stock from trading on the AMEX effective at
the opening of business on September 3, 2004. On September 4,
2004, the AMEX delisted the GB Holdings' Common Stock.
The Company primarily generates revenues from gaming operations in
its Atlantic City facility. Although the Company's other business
activities including rooms, entertainment, retail store and food
and beverage operations also generate revenues, which are nominal
in comparison to the casino operations. The non-casino operations
primarily support the casino operation by providing complimentary
goods and services to deserving casino customers. The Company
competes in a capital intensive industry that requires continual
reinvestment in its facility and technology.
GENERAL MOTORS: S&P Cuts 6 Ratings on 3 Securitization Facilities
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on six
classes from three U.S. ABS securitizations related to General
Motors Corp. and General Motors Acceptance Corp. to 'BB' from
'BBB-'. Last week's downgrades of GM and its related entities do
not have any immediate rating impact on U.S. CMBS, RMBS, or other
ABS transactions.
Each of the affected securitizations is weak-linked to the long-
term corporate credit or senior unsecured debt ratings of either
GM or GMAC. Either GM or GMAC performs various roles or provides
the underlying collateral for the securitizations, as indicated
below.
The May 5, 2005, downgrades of GM, GMAC, and all related entities
to non-investment-grade reflect Standard & Poor's conclusion that
management's strategies may be ineffective in addressing GM's
competitive disadvantages.
A copy of the GM-related research update, dated May 5, 2005, is
available on RatingsDirect, Standard & Poor's Web-based credit
analysis system, at http://www.ratingsdirect.com/
Ratings Lowered
Corporate Backed Trust Certificates Series 2001-8 Trust
Rating
------
Class To From Role
----- -- ---- ----
A-1 BB BBB- Underlying collateral
A-2 BB BBB- Underlying collateral
Freedom Certificates US Autos Series 2004-1 Trust
Rating
------
Class To From Role
----- -- ---- ----
A BB BBB- Underlying collateral
X BB BBB- Underlying collateral
ARG Funding Corp., series 2003-1
Rating
------
Class To From Role
----- -- ---- ----
C-1 BB BBB- Buyback manufacturer
C-2 BB BBB- Buyback manufacturer
GINGISS GROUP: Section 341(a) Meeting Slated for May 19
-------------------------------------------------------
Alfred T. Giuliano, the chapter 7 trustee overseeing the
liquidation of The Gingiss Group, Inc., and its debtor-affiliates
will convene a meeting of the Debtors' creditors at 3:00 p.m. on
May 19, 2005, at the U.S. District Court, located in 844 King
Street, Room 2112, in Wilmington, Delaware.
This is the first meeting of creditors required under Sec. 341(a)
of the U.S. Bankruptcy Code after a chapter 11 bankruptcy case
converts to a chapter 7 liquidation.
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 officer of the
Debtors under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Claims Bar Date
The U.S. Bankruptcy Court for the District of Delaware, set on
August 19, 2005, as the deadline for all creditors owed money by
The Gingiss Group, Inc., on account of claims arising prior to
November 3, 2003, to file their proofs of claim.
Governmental units must file proofs of claims on or before
October 24, 2005.
Headquartered in Addison, Illinois, The Gingiss Group, Inc., a
national men's formal wear rental and retail company, filed for
chapter 11 protection on November 3, 2003 (Bankr. D. Del. Case No.
03-13364). James E. O'Neill, Esq., and Laura Davis Jones, Esq.,
at Pachulski Stang Ziehl Young Jones & Weintraub represent the
Debtors in their restructuring efforts. The Debtors listed debts
of over $50 million in their petition. The Court converted the
Debtors' chapter 11 cases to chapter 7 liquiation. The Court also
appointed Alfred T. Giuliano as the Debtors' Chapter 7 Trustee.
GOLDSPRING, INC.: Auditors Raise Going Concern Doubts
-----------------------------------------------------
Jewett, Schwartz, & Associates audited Goldspring, Inc.'s
financial statements for the year ending December 31, 2004.
Because the Company has incurred recurring operating losses and
has a working capital deficit at December 31, 2004, the auditors
say there is substantial doubt about the Company's ability to
continue as a going concern. The Auditors note that the Company
is working on various alternatives to improve its financial
resources. But absent the successful completion of one of these
alternatives, the Auditors say, the Company's operating results
will increasingly become uncertain.
Goldspring's Dec. 31, 2004, balance sheet shows $9.7 million in
assets. The company generated less than $1 million in revenue in
2004. Goldspring is involved in the production of gold and other
precious metals.
HAIGHTS CROSS: Declining Profitability Cues S&P's Negative Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Haights
Cross Communications Inc. to negative from stable due to rising
debt leverage, declining profitability, and risks related to the
company's acquisition strategy.
In addition, Standard & Poor's affirmed its ratings, including its
'B-' corporate credit rating, on the company.
White Plains, New York-based HCC is a supplemental education
publisher serving the school and library markets. At Dec. 31,
2004, debt was $381 million.
"Reduced spending for supplemental education materials has
undermined the company's operating performance," said Standard &
Poor's credit analyst Hal F. Diamond.
HCC derives about 70% of its sales from schools, school districts,
and school and public libraries. These institutions depend on
funding from federal, state, and local governments to purchase
products. HCC's high-margin recorded book business accounts for
about 35% of revenues, and has exhibited slightly lower
profitability over the past two years. In addition, the company's
Chelsea House hardcover book business has suffered significant
declines in profits over the past few years.
HCC is investing heavily to develop new products and is increasing
marketing spending. Standard & Poor's believes that larger, less
leveraged players may have greater strength in product development
and marketing, particularly in the supplemental educational
materials business, which is undergoing technological change.
Financial risk is high at HCC. Gross debt to EBITDA (after
amortization of prepublication costs) rose to 10.6x in 2004 from
8.1x in 2003, reflecting increasing debt levels and product
development amortization. EBITDA coverage of gross interest
expense was scant at 1.1x in 2004. Coverage of cash interest
expense was 1.6x, reflecting the pay-in-kind provision of the
$82.3 million 12.5% senior discount notes, which have mandatory
payments starting in 2009.
Discretionary cash flow was minimal in 2004 because of lower
profitability and significant product development expenditures.
Standard & Poor's expects that the company will generate little or
no discretionary cash flow in the full year 2005, as a result of
higher cash interest expense and product development costs.
HEALTH SCIENCES: Auditors Raise Going Concern Doubts
----------------------------------------------------
Stonefield Josephson, Inc., completed its review of Health
Sciences Group, Inc.'s financial statements for the year ending
December 31, 2004, and says that the Company's net loss for the
year and negative working capital balance at year-end raise
substantial doubt about its ability to continue as a going
concern.
Health Sciences' balance sheet dated Dec. 31, 2004, shows $4.4
million in assets, and a $5.3 million stockholders' deficit. The
company reported a $10.9 million net loss on $3.2 million of sales
in 2004.
Health Sciences Group, Inc. describes itself as an integrated
provider of innovative products and services to the nutraceutical,
pharmaceutical, and cosmeceutical industries offering value-added
ingredients, bioactive formulations, and proprietary technologies
used in nutritional supplements, functional foods and beverages,
and skin care products. Its subsidiaries include XCEL Healthcare,
a fully licensed, specialty compounding pharmacy focused on
delivering full service pharmacology solutions to customers with
chronic ailments that require long-term therapy; and BioSelect
Innovations, which develops and sells products based on
proprietary technologies in the areas of topical and transdermal
drug delivery, cosmeceuticals, and integrative medicine to a
global network of customers who manufacture and distribute
compounded pharmaceuticals, skin care products and cosmetics.
In its annual report delivered to the Securities and Exchange
Commission last month, the company says that it intends to soon to
close on the acquisition of the assets of Swiss Research, Inc., a
company which markets and sells branded nutraceutical products
addressing major wellness categories, including weight management,
arthritis support, cholesterol reduction and diabetes management.
HEARTLAND PARTNERS: Auditors Express Going Concern Doubts
---------------------------------------------------------
PricewaterhouseCoopers LLP audited Heartland Partners, L.P.'s
financial statements for the year ending December 31, 2004. At
the conclusion of that engagement, PwC said a number of
uncertainties raise substantial doubt about Heartland's ability to
continue as a going concern. PwC points to the company's
recurring operating losses and management's intention to sell the
Company's remaining assets and dissolve.
Heartland reported a $4,355,000 net loss for the year ended
December 31, 2004.
While Heartland had three parcels of land in Chicago under
contract for sale in 2004 for an aggregate sales price of
approximately $10,000,000, none of them closed in 2004. One of
these properties, with a sales price of $4,200,000, closed during
the first quarter of 2005. Heartland says the buyers for the
other two properties appear to be making progress towards
obtaining the governmental approvals required to close those
transactions. However, the Company cannot be certain that these
sales will close in 2005.
Heartland's other potentially significant asset is a claim against
the Redevelopment Authority of the City of Milwaukee. In 2003,
RACM acquired the Company's Menomonee Valley property in
Milwaukee, Wisconsin. Under the terms of the conveyance to RACM,
Heartland received $3,550,000 in cash and retained the right to
seek additional compensation through an appeal. The appeal was
filed in 2004. The Company's appraiser has valued the property at
$15,000,000. This matter is unlikely to go to trial until 2006.
Heartland Partners, L.P. is a Chicago-based real estate limited
partnership with properties primarily in the upper Midwest and
northern United States. CMC Heartland is a subsidiary of
Heartland Partners, L.P. and is the successor to the Milwaukee
Road Railroad, founded in 1847.
HEXION SPECIALTY: Moody's Puts B1 Ratings on $675M Loan Facilities
------------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Hexion Specialty
Chemicals Inc.'s new $675 million guaranteed senior secured credit
facilities ($275 million revolver due 2010 & $400 million term
loan due 2011), a Caa3 rating to its $350 million preferred stock,
and a speculative grade liquidity rating of SGL-2. These ratings
have been assigned to Borden Chemicals Inc. until the effective
date of the planned merger.
Additionally, Moody's affirmed the existing debt ratings of Borden
Chemicals Inc. and Resolution Performance Products LLC. These
actions follow the announcement last week that Apollo Management
Inc. plans to merge its wholly-owned chemical businesses --
Borden, Resolution Performance Products LLC and Resolution
Specialty Materials LLC -- to create Hexion.
As part of the merger, Hexion shareholders will receive an
extraordinary dividend of $550 million. The outlook has been
returned to negative from developing. However, if Hexion
completes its initial public offering as currently contemplated,
Moody's would change the outlook to stable. Moody's has also
withdrawn the senior issuer ratings for Borden and Resolution
Performance Products LLC and will withdraw the ratings on their
existing credit facilities, once the new facility at Hexion is
funded.
Ratings assigned are:
Hexion Specialty Chemicals Inc. (Currently Borden Chemicals, Inc.)
-- $275 million guaranteed senior secured revolving credit
facility due 2001 at B1
-- $400 million guaranteed senior secured term loan due 2011
at B1
-- $350 million preferred stock at Caa3
Ratings affirmed are:
Borden Chemicals Inc.
-- Guaranteed senior secured credit facility at B1
-- Guaranteed 2nd priority senior secured notes at B3
-- Senior unsecured notes and debentures at Caa1
Resolution Performance Products LLC
-- Guaranteed senior secured credit facility at B1
-- 8% guaranteed senior secured notes at B2
-- 9.5% guaranteed senior secured notes at B3
-- Senior subordinated notes at Caa2
Moody's indicates that the Guaranteed senior secured credit
facility B1 ratings will be withdrawn once the new Hexion facility
is funded.
The B2 senior implied rating of Hexion ratings reflects the
benefits from the merger of Apollo's three businesses plus the
recent acquisition of Bakelite from Rutgers AG. These benefits
include:
(a) the increased size,
(b) improved business diversity and geographic footprint, and
(c) roughly $75 million of potential synergies.
This merger is occurring against the backdrop of an improving
operating environment for many of the company's products,
especially in epoxy resins, which has experienced a substantial
improvement in profitability over the past six months due to
tightness in the markets for bisphenol A and epichlorhydrin.
Hexion's ratings are:
(a) tempered by elevated leverage,
(b) exposure to volatile feedstock costs,
(c) limited free cash flow generation over the next 12-18
months,
(d) legacy environmental and pension liabilities from Borden,
(e) and sizable litigation exposure for a company with a
levered balance sheet.
While Hexion, and previously Borden, believe that current reserves
are adequate, Moody's noted that the level of potential liability
is unusual for a highly levered company.
The negative outlook reflects the increase in debt prior to the
IPO from the issuance of $350 million of preferred stock, as well
as the ability to dividend additional cash under existing
indentures due to the way in which the merger is structured. If
the extraordinary dividend remains roughly $200 million above the
level of proceeds from the IPO, Moody's would change the outlook
to stable upon completion of the IPO process.
Due to the improving operating environment and lack of operating
history with the RSM and Bakelite operations, as well as the
further restructuring that will occur after the merger, actual
result could differ materially from Moody's current estimate.
If Hexion is able to successfully consolidate these businesses,
and over the next year, demonstrate financial performance that
would cause debt to EBITDA to fall below 5 times and free cash
flow to total debt to rise above 5%, Moody's could raise the
company's rating. Conversely, if financial performance is
substantially weaker than currently anticipated, and debt to
EBITDA remains above 6 times, Moody's would likely downgrade the
current ratings.
The notching of the senior secured credit facility (rated B1) one
level above the senior implied reflects the significant level of
collateral coverage and the large percentage of accounts
receivable and inventory in the collateral package. The company's
obligations under the secured facilities will be guaranteed by all
domestic operating subsidiaries and certain international
subsidiaries. It will be secured by a first lien on substantially
all domestic working capital and the tangible and intangible
assets of its operating subsidiaries in Canada, the United
Kingdom, the Netherlands and Germany, as well as a pledge of 65%
of voting stock in international subsidiaries.
As is typical in such facilities, the collateral of international
subsidiaries only secures obligations of the respective
international subsidiaries. However, Hexion expects slightly less
than 50% of the term loan to be borrowed by the international
subsidiaries. The terms of the credit facility have not been
finalized, but there appears to be substantial room under the
financial covenants, which only include a secured bank leverage
test and a limit on capex; likewise a cash flow sweep is triggered
only when financial performance is well below projected levels.
Moody's noted that Hexion also has the ability to borrow an
additional $200 million in revolving credit or term loan debt
under the facility.
Resolution Performance Products LLC's 8% senior secured notes are
notched at the senior implied as they are contractually
subordinate to the credit facility and rank above the other
secured notes issued by Borden and the 9.5% secured notes of
Resolution Performance Products LLC. Borden's senior secured
notes and Resolution Performance Products LLC's 9.5% secured notes
will rank equally in priority and are notched at B3.
Borden's senior unsecured notes are rated Caa1, a notch below the
second priority secured debt; these note holders can take comfort
from the significant amount of subordinated debt and preferred
stock (or potentially common equity) below them in the capital
structure. The notching of Resolution Performance Products LLC's
senior subordinated notes (rated Caa2) three levels below the
senior implied reflects the subordination to a significant amount
of secured and unsecured debt.
The Caa3 rating on the preferred stock reflects its inferior
position to the subordinated notes. However, Moody's noted that
management has a substantial incentive to remove this issue from
the capital structure over the next 6 months. As mentioned above,
the merger process will render the restricted payment clauses in
the secured notes and subordinated notes ineffective and allow the
company to declare several hundred million of additional
dividends. Moody's does take some modest comfort that Apollo is
less likely to utilize this ability, once it has completed the
IPO.
After the merger, Hexion will be a vertically-integrated leading
producer of thermoset resins, as well as a leading producer of
versatic acids. The company also produces other specialty resins
for coatings, inks and other applications. The company is also a
leading producer of several commodity chemicals: formaldehyde,
bisphenol A and epichlorhydrin. Additionally, the combined
company will pursue cost reduction initiatives that are currently
estimated to save the $75 million.
In Moody's opinion, given the 86 facilities in the merged company,
even if the projected synergies are slow to materialize, there
will likely be additional cost saving opportunities from plant
closures over the next several years. While the potential for
meaningful cost synergies should improve the company long-term
financial performance, over the near-term the restructuring costs
will likely reduce the free cash flow available for debt
reduction.
In Moody's opinion, on a pro forma basis Hexion generated roughly
$326 million of EBITDA for the LTM ending December 31, 2004;
Moody's estimate does not include synergies from the transaction
and certain expenses or income that management has excluded or
included in their calculation of pro forma EBITDA. Based on the
pro forma total debt of $2,360 million (this assumes that the IPO
is successfully completed), this would generate a 7 times debt to
EBITDA multiple as of year-end.
In Moody's opinion, this multiple would likely fall to roughly 6.5
times if measured at the end of the first quarter due to the
improving profitability at Resolution Performance Products LLC and
to a lesser extent Borden. Furthermore, Moody's believes that
this ratio could fall toward 5 times by the end of 2005, demand in
the company's major end markets remain healthy. However, due to
restructuring expenses and other normal legacy costs from Borden,
Moody's projects that free cash flow is likely to remain
constrained at less than $50 million. Due to continued exposure
to volatile raw material costs and continued restructuring costs,
free cash flow may continue to trail the increase in EBITDA into
2006.
The SGL-2 rating indicates good liquidity. Hexions's liquidity is
supported by its expected ability to:
(a) generate positive free cash flow,
(b) full availability under its $275 million committed bank
facility,
(c) a favorable debt maturity profile, and
(d) the expectation that credit metrics will greatly exceed the
financial covenants in its credit facility and term loan
over the next five quarters.
Asset sales are not expected to be a significant source of
liquidity in the near term. Moody's notes however that a decline
in anticipated annual free cash flow to less than $20 million, or
a reduction in either cash balances (pro forma at over $50
million) or adjusted EBITDA headroom on the financial covenants
could result in a lower liquidity rating.
Hexion Specialty Chemicals, Inc., headquartered in Columbus, Ohio
is a leading producer of commodities such as formaldehyde,
bisphenol A and epichlorhydrin, as well as formaldehyde-based
thermoset resins, epoxy resins, and versatic acid and its
derivatives. The company is also a supplier of specialty resins
for inks and specialty coatings sold to a very diverse customer
base. Hexion was formed from the merger of Borden Chemicals Inc.,
Resolution Performance Products LLC, Resolution Specialty Material
LLC and the Bakelite Group. On a proforma basis the company would
have reported sales of $4.1 billion as of December 31, 2004.
HYTEK MICROSYSTEMS: Posts $2,000 Net Loss in First Quarter
----------------------------------------------------------
Hytek Microsystems, Inc. (OTC Bulletin Board: HTEK) reported
fiscal 2005 first quarter financial results.
Net revenues for the first quarter ended April 2, 2005 increased
approximately 26% to $3,111,000 from $2,466,000 for the first
quarter ended April 3, 2004. The increase was primarily the
result of increased sales of medical products to Medtronic, Inc.
and other custom hybrids, partially offset by a decrease in
military sales to Chesapeake Sciences Corporation.
Net loss for the first quarter ended April 2, 2005 was $2,000,
compared to net income of $60,000 for the first quarter of 2004.
Last year, net income was aided by an accumulation of scrap
recovery totaling approximately $119,000, which reduced cost of
sales during the first quarter ended April 3, 2004. Conversely,
during the first quarter of fiscal 2005, net income was depressed
as a result of costs relating to the pending merger with Natel
Engineering of approximately $160,000.
"We were successful in our goal to essentially break even for the
first fiscal quarter of 2005," noted John Cole, Hytek's President
and CEO. "Although earnings were depressed as the result of
pending merger-related expenses, these expenses were planned,"
continued Cole.
On January 24, 2005, Hytek received notice from Medtronic that it
would place no further purchase orders with Hytek. Medtronic had
indicated previously that it intended to develop an internal
source of supply for one of the Company's products based upon its
own business considerations. Medtronic confirmed to Hytek that its
discontinuation of purchases from Hytek was not based upon any
dissatisfaction with the quality of the products manufactured by
Hytek for Medtronic.
On February 14, 2005, Hytek Microsystems, Inc. announced that it
had entered into a merger agreement with Natel Engineering Co.,
Inc. The pending merger transaction is conditioned on obtaining
requisite approval from the shareholders of Hytek and other
customary closing conditions. The companies expect to close the
transaction during the second quarter of 2005.
The report of independent auditors on Hytek's financial statements
for the fiscal year ended January 1, 2005 includes an explanatory
paragraph indicating there is substantial doubt about Hytek's
ability to continue as a going concern.
Founded in 1974 and headquartered in Carson City, Nevada, Hytek
specializes in hybrid microelectronic circuits that are used in
military applications, geophysical exploration, medical
instrumentation, satellite systems, industrial electronics, opto-
electronics and other OEM applications.
Certain statements in this release are "forward-looking
statements" within the meaning of the Private Securities
Litigation Act of 1995. All forward-looking statements involve
risks and uncertainties. In particular, any statements contained
herein regarding the consummation of the pending merger are
subject to known and unknown risks, uncertainties and
contingencies, many of which are beyond the control of Hytek,
which may cause actual results, performance or achievements to
differ materially from anticipated results, performance or
achievements. Factors that might affect such forward-looking
statements include, among other things, the ability to meet all of
the contractual closing conditions to the merger (including a
working capital condition and supermajority shareholder approval),
overall economic and business conditions, the demand for Hytek's
goods and services, competitive factors in the industries in which
Hytek competes and changes in government regulations.
Hytek Microsystems, Inc., and its executive officers and directors
may be deemed to be participants in the solicitation of proxies
from the shareholders of Hytek Microsystems, Inc. with respect to
the transactions contemplated by the merger agreement. Information
regarding such officers and directors is included in Hytek
Microsystems, Inc.'s Proxy Statement for its 2005 Annual Meeting
of Shareholders filed with the Securities and Exchange Commission
on April 6, 2005.
* * *
Going Concern Doubt
The report of independent auditors on Hytek's January 1, 2005,
financial statements includes an explanatory paragraph indicating
there is substantial doubt about Hytek's ability to continue as a
going concern.
INLAND FIBER: Auditors Express Going Concern Doubts
---------------------------------------------------
Eisner, LLP, audited Inland Fiber Group, LLC's financial
statements for the year ending Dec. 31, 2004. Pointing to the
company's default under the Indenture governing the $225,000,000
issue of Senior Notes due in 2007, the auditors say there is
substantial doubt about the Company's ability to continue as a
going concern.
On December 19, 2003, an action was brought in the Court of
Chancery of the State of Delaware in and for New Castle County by
the Trustee under the Indenture against the Company, Fiber Finance
Corp., the Manager, American Forest Resources, LLC, Cascade
Resource Holdings Group, LLC, and all of the directors of the
Manager as of January 1, 2003. The complaint alleges that the
Company violated the provisions of the Indenture by transferring
certain assets to its affiliates, the directors of the Company
violated their fiduciary duty to the Company and that the
transfers of the assets were fraudulent conveyances and subject to
rescission.
The Trustee seeks a declaration that the Company has violated the
terms of the Indenture, an injunction against the transfer of
additional assets out of the ordinary course of business, damages
and the imposition of a constructive trust on the assets
transferred by the Company to its affiliates.
In January 2004, the plaintiff's motion to schedule a preliminary
injunction hearing with respect to further transfers to affiliates
and for expedited discovery was denied. In connection with the
denial of the plaintiff's motion, the Company agreed that, through
the earlier of December 31, 2004 and the resolution of the
lawsuit, it would provide at least thirty days' notice before
entering into any transfer of assets to affiliates, other than
payment of management fees. Discovery began in January 2004 and is
ongoing. On February 6, 2004, the Defendants filed a motion to
dismiss. In May 2004, a hearing was held with respect to
Defendants' motion to dismiss.
On May 17, 2004, the Company received a Notice of Default from the
Trustee covering certain of the allegations in the complaint. The
Defendants responded to the Notice of Default denying the
existence of any defaults. On July 29, 2004, the Court of Chancery
dismissed the action without prejudice, based on its determination
that the Trustee under the Indenture lacked standing under the
terms of the Indenture to bring an action against the Defendants
because the requisite notice of default and opportunity to cure
had not been provided to the Company prior to the time the action
was commenced. The Trustee was granted 30 days to file an amended
complaint and on August 27, 2004, the Trustee filed its second
amended complaint.
On October 8, 2004, the Trustee filed a motion for partial summary
judgment seeking a declaratory judgment that the Company violated
certain provisions of the Indenture by permitting its affiliate to
grant security interests in various timberland properties on
various dates prior to September 14, 2001. On October 15, 2004,
the Defendants filed a motion to dismiss the second amended
complaint. On December 23, 2004, the Court of Chancery issued a
memorandum opinion granting the Trustee's motion for partial
summary judgment and declaring that an Event of Default had
occurred under the Indenture. On January 13, 2005, the Company
received a Notice of Default and Acceleration from the Trustee.
On January 21, 2005, the Defendants filed a motion for leave to
pursue an interlocutory appeal of the Chancery Court Order
granting partial summary judgment.
On January 26, 2005, the Court of Chancery granted Defendants'
motion for leave to appeal. On February 10, 2005, the Supreme
Court of the State of Delaware accepted Defendants' appeal.
Defendants' filed their appeal brief on March 23, 2005. The
Trustee's answering papers are due on or before April 27, 2005.
While the interlocutory appeal is heard, the case in the Court of
Chancery is proceeding and a trial is expected to take place in
June 2005. The Company and its legal counsel believe the
litigation and both Notices of Default to be without merit and
intend to continue to vigorously defend the litigation.
On December 7, 2004, the Company, Fiber Finance Corp. and AFR
brought an action against the Trustee based on the Trustee's
failure to remit $4.825 million of the funds paid by the Company
on November 12, 2004 to the Trustee for the benefit of the holders
of the Notes. On January 13, 2005, the Trustee filed its Answer
and Counterclaim, seeking payment from the Company and Fiber
Finance Corp. for its expenses in the litigation described above.
The Company believes it has a meritorious claim against the
Trustee and intends to pursue its action and vigorously defend
against the Trustee's counterclaim, which the Company believes to
be without merit.
Inland Fiber Group reported a $68 million loss on $44 million of
revenue in 2004. At Dec. 31, 2004, Inland Fiber Group's balance
sheet shows $96 million in assets and a $133 million members'
deficiency.
Formerly known as U.S. Timberlands Klamath Falls, LLC, Inland
Fiber Group, LLC's business consists of growing of trees, selling
logs and standing timber and selling timberland. The Company owns
approximately 167,000 fee acres of timberland and cutting rights
on approximately 68,000 acres of timberland containing total
merchantable timber volume estimated as of January 1, 2005 to be
approximately 0.4 billion board feet in Oregon east of the Cascade
Range. Logs harvested from the Timberlands are sold to
unaffiliated domestic conversion facilities. These logs are
processed for sale as lumber, plywood and other wood products,
primarily for use in new residential home construction, home
remodeling and repair and general industrial applications. The
Company also owns and operates its own seed orchard and produces
approximately four million conifer seedlings annually from its
nursery, approximately 50% of which are used for its own internal
reforestation programs, 20% are sold to affiliates, with the
balance sold to other forest products companies.
INTERACTIVE BRANDS: Auditors Raise Going Concern Doubts
-------------------------------------------------------
Jewett, Schwartz, & Associates, audited Interactive Brand
Development, Inc.'s financial statements for the year ending Dec.
31, 2004. Pointing to recurring operating losses and a working
capital deficit at December 31, 2004, the auditing firm says
there's substantial doubt about the Company's ability to continue
as a going concern. The auditors note that the Company is working
on various alternatives to improve its financial resources.
Absent the successful completion of one of these alternatives, the
auditors warn, the Company's operating results will increasingly
become uncertain.
The Company's balance sheet dated Dec. 31, 2005, shows $50 million
in assets and $12 million in liabilities.
On February 11, 2004, the Company was accepted by and began
trading on the American Stock Exchange under the symbol IBD. On
November 29, 2004, the company changed its corporate name to
Interactive Brand Development Inc. from Care Concepts.
Interactive Brand Development, Inc. is a media and marketing
company with interests in online auctions, classic animation
libraries and branded adult entertainment. IBDI holds a 34.7%
equity interest in Penthouse Media Group, Inc., an established
global adult media, entertainment and licensing company founded in
1965 that publishes Penthouse Magazine, and owns and licenses the
PENTHOUSE trademarks and other intellectual property. Subsequent
to December 31, 2004, on January 21, 2005, IBDI acquired 100% of
the membership interests of Media Billing LLC and its wholly owned
subsidiary, Internet Billing Company LLC, an online payment-
processing provider.
Additionally, IBDI purchased 6,250 shares of XTV, Inc. common
stock from XTV Investments LLC on March 31, 2005, representing a
25% interest. A portion of the shares (2,083) are subject to an
escrow agreement in which IBDI must verify either 10,000 qualified
subscribers to earn out 1,042 shares or 20,000 qualified
subscribers to earn out all 2,083 shares on or before October 31,
2006 at which time the balance of any unearned shares is returned
to XTV for cancellation. XTV has developed and launched an
interactive Internet based digital system that can deliver paid
video and other interactive content to consumers directly to their
traditional television sets or computers.
Through its wholly owned subsidiary iBid America, Inc., IBDI
operate an online marketing, advertising and sales promotion
business. At its website, consumers can bid to acquire gift
certificates redeemable for such items as hotel accommodations,
restaurant meals, concerts, golf courses, shopping experiences,
and personal services provided by businesses. In exchange for
promoting and marketing these businesses on the website and
through community functions such as charity events, IBDI retains
the auction revenue generated by the online consumer auctions.
The iBid auction site is localized to specific geographic areas,
and IBDI currently conducts live auctions in Central Florida,
South Florida, and Greater Cincinnati, Ohio.
On October 19, 2004, IBDI consummated a transaction to acquire a
39.5% minority equity interest in the post-bankruptcy, reorganized
Penthouse Media Group, Inc. (formerly known as General Media,
Inc.). That amount of equity was subsequently reduced to 34.7%.
Penthouse Media Group emerged from bankruptcy reorganization on
October 5, 2004. In order to finance the purchase price for our
equity investment in the reorganized Penthouse Media Group, IBDI
sold $9.525 million principal amount of 10% Promissory Notes, due
September 15, 2009, 35,000 shares of Series E convertible
preferred stock, 34,500 shares of Series F convertible redeemable
senior secured preferred stock and 45,000 shares of Series G
convertible preferred stock to 22 investors for $16.475 million of
gross proceeds. Currently, those convertible securities, together
with 3-year warrants to purchase up to 4,216,280 additional shares
of IBDI common stock at $3.00 per share, may be converted or
exercised for up to 72,216,280 shares of IBDI common stock.
Proceeds from warrant conversion are $12,648,840.
In October 2004, in anticipation of the acquisition of iBill and
to collateralize its obligations to holders of the 10% notes and
the series F preferred stock aggregating $14.975 million, PHSL
Worldwide, Inc., Media Billing and iBill granted those investors
subordinated security interests totaling $14.975 million in the
iBill equity and assets. Effective January 21, 2005, IBDI
completed the acquisition of 100% of the equity interests in Media
Billing Company, LLC, which owns 100% of the equity interests in
Internet Billing Company, LLC ("iBill"), from PHSL Worldwide,
Inc., and certain of its affiliates.
In connection with the acquisition of iBill in January 2005, IBDI
issued to PHSL 330,000 shares of its Series D Preferred Stock.
The Series D Preferred Stock is convertible at any time at the
option of the holder, into that number of shares of IBDI common
stock as shall represent 49.9% of the fully-diluted shares of IBDI
common stock on the date of conversion. The Series D Preferred
Stock pays no dividend, has a $100 per share liquidation value,
and is unsecured and non-redeemable.
IBDI's executive offices are located at 2200 S.W. 10th Street in
Deerfield Beach, Florida. The Company hosts a Web site at
http://www.ibidusa.com/
INTERNATIONAL RECTIFIER: Good Performance Cues S&P to Lift Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on El Segundo, California-based International Rectifier
Corp. to 'BB' from 'BB-'. The outlook is revised to stable, from
positive. The actions recognize the company's improving
profitability levels as part of its ongoing product enrichment
program, and its moderate financial practices.
"The ratings continue to reflect aggressive competition and the
company's acquisition orientation, as well as its moderate
leverage and good position in its industry," said Standard &
Poor's credit analyst Bruce Hyman. IR is a major supplier of
power-management integrated circuits. The company also is a
leading supplier of metal oxide semiconductor field effect
transistors (MOSFETs), semiconductor components used across the
economy to control relatively large electrical currents. The
company holds an overall share of about 15% of its served markets.
IR has been expanding its advanced power control module business
for automotive and motor control applications, and has been
developing integrated circuit power management systems for
laptops, cell phones, and similar battery-operated products. Over
75% of orders are for proprietary products, helping to offset
deflationary price pressures. As part of two product line
initiatives, the company intends to discontinue or divest nearly
$250 million in low-margin product lines over the next six
quarters, to raise gross margins by at least 700 basis points in
the process.
Revenues in the March 2005 quarter were $282 million, down 6%
sequentially and up modestly year-over-year. Proprietary product
sales grew 19% year-over-year in the quarter, while the company's
planned discontinuance of low-margin products progressed; revenues
also reflected normal seasonality. Gross margins were 44%,
compared with 40% in the year-ago period. EBITDA in the March
2005 quarter was $75 million, or 27% of sales, compared with 21%
in the year-earlier period. Revenues and margins likely will be
approximately flat in the June 2005 quarter, as the company tracks
toward its goal of 50% gross margins by the June 2006 quarter.
KAISER ALUMINUM: Court Approves Erie Property Transfer
------------------------------------------------------
Kaiser Aluminum Corporation and its debtor-affiliates sought and
obtained the Court's approval to the Erie Property Agreement and
the Settlement Agreement.
As reported in the Troubled Company Reporter on March 28, 2005,
Kaiser Aluminum & Chemical Corporation owns real property and
improvements located at 1015 East 12th Street in Erie,
Pennsylvania, approximately 12 blocks away from Lake Erie. The
Erie Property consists of:
(1) 12 developed acres of land on which an aluminum forging
plant owned and formerly operated by KACC is located; and
(2) 25 undeveloped acres, a portion of which is occupied by a
golf driving range owned and operated by a third-party.
Transfer of KACC's Erie Property Interests
In 1999 and 2000, the Greater Erie Industrial Development
Corporation, which develops and manages industrial and business
parks and buildings throughout Erie County, Pennsylvania,
approached KACC regarding the potential acquisition of the
undeveloped parcel of the Erie Property for re-using and, if
necessary, remediating the property and subsequently redeveloping,
remarketing or selling it to a third-party. While the initial
discussions never materialized into a definitive proposal
acceptable to both parties -- in part, because KACC wanted to
complete divestment of its remaining interests in and related to
the Erie Property -- the Greater Erie Corp. continued to approach
KACC, from time to time, regarding a potential acquisition of the
Erie Property.
In 2003, after KACC had explored the possibility of marketing the
Erie Property as a part of a larger sale transaction in its
Chapter 11 case, the Greater Erie Corp. expressed a renewed
interest in a potential transaction. Consequently, another round
of negotiations continued into and progressed throughout 2004.
Because of its long-term leasehold interests in the Erie Property
and the Forging Plant, Accuride also participated in other
negotiations.
In 2004, based on the progress made by the parties in their
negotiations, KACC formulated and sent to the Greater Erie Corp.
and Accuride an initial draft of definitive documentation
regarding the transfer of their various interests in and related
to the Erie Property. The parties exchanged comments regarding
the documentation for the next several months.
The Erie Property Transfer consists of two components:
(1) The Greater Erie Corp., KACC, Accuride Erie and Erie Land
Holding, Inc. -- an affiliate of Accuride -- will enter
into an agreement that:
(i) transfers title in the Erie Property, including the
Forging Plants and related assets, to the Greater
Erie Corp.; and
(ii) allocates any future environmental clean-up
responsibilities of the parties with respect to the
assets.
(2) KACC, Accuride, Accuride Erie and AKW Partners will enter
into a settlement agreement that resolves any remaining
issues regarding the Accuride Purchase Agreement, the Erie
Lease Agreement, and any other agreements related to the
Accuride Erie or the Erie Property.
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases. Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts. On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
LAICH INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Laich Industries Corp.
1000 Laich Parkway
Cleveland, Ohio 44135
Bankruptcy Case No.: 05-16204
Type of Business: The Debtor manufactures injection molded plastic
products. Dove Bid auctioned some of Laich's
surplus equipment in October 2004.
Chapter 11 Petition Date: May 5, 2005
Court: Northern District of Ohio (Cleveland)
Judge: Pat E. Morgenstern-Clarren
Debtor's Counsel: Harry W. Greenfield, Esq.
Buckley King, P.A.
600 Superior Avenue East, Suite 1400
Cleveland, Ohio 44114
Tel: (216) 363-1400
Fax: (216) 579-1020
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Entec Polymers Material $501,405
P.O. Box 281271
Atlanta, GA 30384
Matrix Polymers Material $492,501
P.O. Box 296
Cold Spring Harbor, NY 11724
Huntsman Corp. Material $247,992
P.O. Box 371190
Pittsburgh, PA 15251
A. Schulman Inc. Material $191,016
P.O. Box 74052
Cleveland, OH 44194
Cal Thermoplastics Judgment $134,872
2660 Townsgate Road,
Suite 150
Westlake Village, CA 91361
Arco Polypropylene Material $131,937
13462 Collections Center Dr.
Chicago, IL 60693
McCann Plastics Material $115,146
P.O. Box 76504
Cleveland, OH 44101
Goldmark Distribution Material $91,058
P.O. Box 8600
Lewiston, ME 04243
Spherion Corporation Judgment $84,722
Los Angeles, CA 90074
Davidson Smith Certo $74,606
23061 B. Center Ridge Road
Westlake, OH 44145
M. Holland Company Material $72,341
P.O. Box 648
Northbrook, IL 60065
GB Holdings Interest $63,600
10020 Aurora-Hudson Road
Streetsboro, OH 44241
Jadcore Material $57,784
300 N. Fruitridge Ave., Ste. A
Terre Haute, IN 47803
Polymer Enterprises Material $56,900
11 Saint Charles Street
Boston, MA 02116
Pure Polymers Judgment $54,678
7966 Century Boulevard
Chanhassen, MN 55317
Illuminating Company Utility $51,797
P.O. Box 3638
Akron, OH 44309
Manner Resins Material $43,286
2901 Riva Trace Pkwy
Annapolis, MD 21401
Jarbeau $37,755
1141 Lake Road
Hiram, GA 30141
McDonald Hopkins Professional Fees $49,629
600 Superior Ave., Suite 2100
Cleveland, OH 44114
Newmarket Partners Professional Fees $44,221
2530 Superior Avenue, Ste. 7-B
Cleveland, OH 44114
LMIC INC: Case Summary & 24 Largest Unsecured Creditors
-------------------------------------------------------
Lead Debtor: LMIC, Inc.
c/o Wharton Capital
520 Madison Avenue, 28th Floor
New York, New York 10022
Bankruptcy Case No.: 05-13274
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
LMIC Manufacturing Inc. 05-13275
Type of Business: The Debtors design, manufacture and maintain
equipment of companies in the telecommunication,
computer, defense, industrial and medical
instrumentation markets.
Chapter 11 Petition Date: May 6, 2005
Court: Southern District of New York (Manhattan)
Judge: Stuart M. Bernstein
Debtors' Counsel: Jonathan S. Pasternak, Esq.
Rattet, Pasternak & Gordon Oliver, LLP
550 Mamaroneck Avenue, Suite 510
Harrison, New York 10528
Tel: (914) 381-7400
Fax: (914) 381-7406
Consolidated Financial Condition as of December 31, 2004:
Total Assets: $5,130,184
Total Debts: $10,518,602
A. LMIC, Inc.'s 3 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Ammendale Commerce Center $757,661
c/o Polinger Shannon & Luchs
5530 Wisconsin Avenue, Suite 1000
Chevy Chase, MD 20815
Laurus Master Fund $400,000
825 Third Avenue, 14th Floor
New York, NY 10022
Attn: Lloyd W. Davis
Gerome Manufacturing Company $119,381
P.O. Box 1089
Uniontown, PA 15401-1089
B. LMIC Manufacturing Inc.'s 21 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Laurus Master Fund $1,500,000
825 Third Avenue, 14th Floor
New York, NY 10022
Attn: Lloyd W. Davis
Ammendale Commerce Center $757,661
c/o Polinger Shannon & Luchs
5530 Wisconsin Avenue, Suite 1000
Chevy Chase, MD 20815
Robert W. O'Neel III $750,000
520 Madison Avenue, 38th Floor
New York, NY 10022
Lucent $720,000
600 Mountain Avenue
Murray Hill, NJ 07974
Aldeburgh Ltd. $375,000
12400 Ellen Court
Silver Spring, MD 20904
William Wilson $200,000
DDK & Company LLP $151,246
Prince George's County $146,311
Willkie Farr & Gallagher, LLP $136,781
Gerome Manufacturing Company $119,381
A&R Engineering, Inc. $113,401
Richard Hurowitz $100,000
Arrow/Wyle Electronics $72,443
Digi-Key $71,004
Avnet Electronics Marketing $58,151
Waytec Electronic $57,203
Primagency, Inc. $50,000
Midwest Printed Circuit Services, Inc. $45,239
Travelers $44,579
Carefirst-Blue Cross Blue Shield $44,274
Lippert Heilshom & Associates $39,057
LOAN FUNDING: Fitch Affirms BB Rating on $12 Million Notes
----------------------------------------------------------
Fitch Ratings affirms two classes of notes issued by Loan Funding
Corp. 2003-1:
-- $25,000,000 class A notes at 'BBB';
-- $12,000,000 class B notes at 'BB'.
Loan Funding Corp. is a synthetic collateralized debt obligation
(CDO) that was established on July 10, 2003 and is managed by
Guggenheim Investment Management LLC. Note proceeds were used to
invest in senior bank notes rated 'AA' or higher by Fitch, and
pledged as collateral to enter into a leveraged total return swap
program, which references a portfolio of predominately non-
investment grade senior secured loans.
Fitch has reviewed the credit quality of the individual assets
comprising the reference portfolio. Since close, Loan Funding
Corp. has not experienced any significant credit migration,
exhibited by the minimal change in the weighted average rating
factor. The weighted average spread has declined marginally from
3.31% to 3.04%, as of the March 31, 2005, trustee report. Since
close, trapped excess spread and market value increases of
reference portfolio assets has resulted in a net collateral value
increase of approximately $6.8 million, providing additional
credit enhancement to the class A and B notes. Excess spread is
captured each period in an amount determined by several market
value tests or at a minimum diversion amount. Currently, there
are no defaulted assets in the reference portfolio.
In addition, Fitch conducted cash flow modeling utilizing various
default timing and interest rate scenarios to measure the
breakeven default rates relative to the minimum cumulative default
rates required for the rated liabilities. The rating on the class
A notes addresses timely payment of interest and repayment of
principal on the stated maturity date. The rating on the class B
notes addresses ultimate payment of interest and principal on the
stated maturity date.
Fitch will continue to monitor and review this transaction for
future rating adjustments. Additional deal information and
historical data are available on the Fitch Ratings web site at
http://www.fitchratings.com/
MICHAEL & MARIAN CONDE: Case Summary & 4 Largest Creditors
----------------------------------------------------------
Debtors: Michael & Marian Conde
12 Crooked Oak Road
Port Jefferson, New York 11777-0000
Bankruptcy Case No.: 05-83103
Chapter 11 Petition Date: May 4, 2005
Court: Eastern District of New York (Central Islip)
Judge: Dorothy Eisenberg
Debtors' Counsel: Edward A. Christensen, Esq.
Law Offices of Edward A. Christensen
127 South Street, Suite 2
Oyster Bay, New York 11771
Tel: (516) 624-3178
Total Assets: $1,336,000
Total Debts: $2,224,809
Debtor's 4 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
RlI Insurance $1,226,100
c/o Carroll McNulty & Kull, LLC
120 Mountain View Boulevard
Basking, NJ 07920
Bankers Trust Company $512,000
c/o Pollack Cooperman & Fisher
5372 Merrick Road, Suite 200
Massapequa, NY 11758
Commissioners of the State Insurance Fund $341,709
199 Church Street
New York, NY 10007
Attn: Douglas J. Hayden, Esq.
Keystone Mechanical Corporation $145,000
c/o Zisholtz & Zisholtz, LLP
170 Old Country Road
Mineola, NY 11501
NATIONAL ENERGY: ET Gas & ET Power Object to Two Mirant Claims
--------------------------------------------------------------
In February 1998, NEGT Energy Trading - Gas Corporation and
Mirant Americas Energy Marketing, L.P., executed a Master Firm
Purchase and Sale Agreement pursuant to which the parties entered
into various transactions to buy and sell natural gas. Gas
Transmission Northwest Corporation, a former affiliate of ET Gas,
is a guarantor of ET Gas under the Purchase Agreement. In
connection with the Purchase Agreement, ET Gas also posted cash
collateral with Mirant Americas. Currently, Mirant Americas
holds $11,203,739 in cash collateral that is owned by ET Gas. ET
Gas terminated the Purchase Agreement before the commencement of
each parties' separate Chapter 11 cases.
Subsequently, ET Gas filed two proofs of claim, totaling
approximately $11.6 million, in Mirant Americas' Chapter 11 case.
Likewise, Mirant Americas filed two proofs of claim -- Claim Nos.
145 and 146 -- in ET Gas' Chapter 11 case. Claim No. 146 is
based on amounts allegedly owed in connection with the Purchase
Agreement, an ISDA Master Agreement, dated September 1, 1998 --
all amounts under which the parties have since resolved -- and
related agreements.
Claim No. 145 is a contingent, unliquidated claim based on two
Agreements and Mutual Releases dated February 14, 2003, and
March 5, 2003, pursuant to which NEGT Energy Trading - Power,
L.P. and Mirant Americas terminated certain trading transactions.
Claim No. 145 merely reserves any claims Mirant Americas may have
in connection with the Release Agreements arising from alleged
breach of representation and warranties by ET Power.
Paul M. Nussbaum, Esq., at Whiteford, Taylor & Preston L.L.P., in
Baltimore, Maryland, states that the Mirant Claims are not
reflected on the ET Debtors' books and records. Moreover,
according to ET Gas' books and records, the Collateral held by
Mirant Americas far exceeds the amount owed by ET Gas under the
Purchase Agreement. Thus, Mirant Americas owes ET Gas $7,379,532
-- but for the automatic stay applicable to Mirant Americas by
virtue of its being a Chapter 11 debtor, ET Gas likely would have
already commenced an action under Section 542(a) of the
Bankruptcy Code to recover the excess collateral amount.
In this regard, the Debtors ask the Court to disallow the Mirant
Claims in their entirety. Mr. Nussbaum points out that if the
Mirant Claims are not expunged, Mirant Americas will receive a
recovery based on a non-existent obligation.
Mediation Protocol
The ET Debtors informs the Court that the Mirant Claims are
appropriate for resolution in accordance with Court-approved
Trade Contract Settlement Protocol.
Mr. Nussbaum explains that pursuant to the Mediation Protocol,
assignment of a claim to mediation occurs automatically on the
last to occur of:
(a) a party to a Trading Contract timely files a proof
of claim against one or more of the ET Debtors for
claims allegedly arising under those Trading
Contracts;
(b) the relevant ET Debtor or Debtors that the claim in
dispute files a objection to the claim; and
(c) the objection includes a settlement by the relevant
ET Debtor or Debtors that the claim in dispute is
appropriate for resolution for resolution by the
Mediator pursuant to the Protocol.
All three requirements of the Mediation Protocol have been met
and, accordingly, the Mirant Claims are automatically assigned to
mediation.
Judge Mannes will convene a status hearing with respect to the
Mirant Claims Mediation on May 12, 2005.
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. 41; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
OMNI FACILITY: Plan Administrator Wants to Close Affiliates' Cases
------------------------------------------------------------------
Michael J. Epstein, the Plan Administrator appointed under the
confirmed First Amended Consolidated Liquidating Plan of
Reorganization of Omni Facility Services, Inc., and its debtor-
affiliates, asks the U.S. Bankruptcy Court for the Southern
District of New York to enter final decrees closing the Subsidiary
Debtors' cases with assigned numbers 04-13971, and 04-13973
through 04-13986.
The Court confirmed the Debtors' Amended Plan on March 24, 2005,
and the Plan took effect on April 4, 2005.
Mr. Epstein tells the Court that:
a) all post-confirmation issues will be administered through
the chapter 11 case of Omni Facility as a result of the
substantive consolidation of the Debtors' estates pursuant
to the confirmed Plan, consequently, the Subsidiary Debtors
have no remaining obligations or responsibilities under the
confirmed Plan;
b) keeping the Subsidiary Debtors' cases open will result in
accrual of U.S. Trustee quarterly fees to the detriment of
the Debtor's estates; and
b) formally closing the Subsidiary Debtors' bankruptcy cases is
in the best interests of the Debtors' estates.
Headquartered in South Plainfield, New Jersey, Omni Facility
Services, Inc. -- http://www.omnifacility.com/-- provides
architectural, janitorial, landscaping, and electrical services.
The Company filed for chapter 11 protection on June 9, 2004
(Bankr. S.D.N.Y. Case No. 04-13972). Frank A. Oswald, Esq., at
Togut, Segal & Segal LLP, represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $80,334,886 in total assets and
$100,285,820 in total debts.
OPTA CORPORATION: Auditors Express Going Concern Doubts
-------------------------------------------------------
Opta Corporation (formerly Lotus Pacific, Inc.) reported losses in
its fiscal year ending June 30, 2004, and the first fiscal quarter
ending Sept. 30, 2004. At September 30, 2004, the Company had an
accumulated deficit of $109,395,000.
Defaults
The Company's sole operating subsidiary, GoVideo, was, and still
is, in default under certain debt covenant provisions of its line
of credit. GoVideo is currently under a forbearance agreement
with its lender, which commenced March 1, 2005 and is due to
expire on August 31, 2005.
Additionally, in June 2003 GoVideo borrowed substantial funds from
T.C.L. Industries Holdings (H.K.) Limited, the majority
stockholder of Opta, and Asia Focus Industrial Ltd., an entity
affiliated with TCL Industries. The purpose of the loans was to
fund inventory purchases and operating expenses. Both loans,
which are subordinate to GoVideo's line of credit, became due
during fiscal year 2004. GoVideo was unable to pay off the loans
and extended the due date three times. The current due date for
the loan with TCL Industries is July 24, 2005. The current due
date for the loan with Asia Focus Industrial Ltd. is August 11,
2005. Both loans are collateralized by 100% of the Common and
Preferred Series D stock of Correlant Communications owned by
Opta.
During fiscal 2004, Opta entered into a financing agreement with
TCL Industries. Opta ultimately loaned the funds to GoVideo to
fund inventory purchases and operating expenses. The financing
agreement has been extended three times with a current maturity
date of July 21, 2005. The loan is collateralized by 100% of the
Common and Preferred Series D stock of Correlant Communications
owned by Opta.
Going Concern Doubt
These matters raise substantial doubt about the Company's ability
to continue as a going concern, management says in its latest
quarterly report filed with the Securities and Exchange
Commission. This statement echoes HEIN & ASSOCIATES LLP's
expression of doubt when it audited the company's Fiscal 2004
financial statements.
Although Opta expects to incur additional losses during the
remainder of fiscal 2005, the Company believes that it will have
sufficient resources to continue normal operations. The Company
says it's taken steps to reorganize certain aspects of its
business. GoVideo replaced its Chief Executive Officer with the
Chief Operating Officer of Opta on an interim basis to further
evaluate the ongoing operations of GoVideo. Additionally, GoVideo
has undertaken cost reduction efforts, including reducing staff,
realigning the roles and responsibilities of management and
reducing other operating expenses in an attempt to return to
profitability. Opta says it its unable to return to profitability
as a result of this realignment, additional steps including, but
not limited to, further cost reductions and eliminating some of
its current activities, may be necessary.
Opta's balance sheet dated Sept. 30, 2004, shows $72 million in
assets.
Opta is a holding company whose operations are conducted through
its subsidiaries. Opta develops, manages, and operates emerging
consumer electronics and communications companies, focusing on
developing next generation consumer electronics and communication
products. Opta provides its subsidiaries with capital and
strategic infrastructure services.
ORGANIZED LIVING: Files for Chapter 11 Protection in S.D. Ohio
--------------------------------------------------------------
Organized Living, Inc., filed for chapter 11 protection with the
U.S. Bankruptcy Court for the Southern District of Ohio in
Columbus citing competition and net losses in the bankruptcy
filing.
The Company owed $7.2 million in principal and accrued, unpaid
interest to Fleet Retail Finance Inc. under its pre-petition
credit agreement. The Company experienced audited net losses of
$4.6 million in 2004, $4 million in 2003 and $6.2 million in 2002,
and reported a $12.2 million unaudited net loss for 2005,
including approximately $2.3 million of one-time transition costs.
As of Apr. 30, 2005, the Debtor had approximately 865 employees in
its Westerville headquarters.
Saunders Karp & Megrue, L.P., as holder of 16,666,667 shares of
preferred stock and 23,117,102 shares of Series F preferred stock,
controls a majority voting interest of the Debtor's board of
directors.
Headquartered in Westerville, Ohio, Organized Living, Inc. --
http://www.organizedliving.com/-- is a specialty retailer of
storage and organization products for the home and office with
stores from coast to coast. The Company filed for chapter 11
protection on May 4, 2005 (Bankr. S.D. Ohio Case No. 05-57620).
Kristin E. Richner, Esq., at Squire, Sanders & Dempsey L.L.P.,
represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated
between $10 million to $50 million in assets and debts.
ORGANIZED LIVING: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Organized Living, Inc.
5150 East Dublin-Granville Road
Westerville, Ohio 43081
Bankruptcy Case No.: 05-57620
Type of Business: The Debtor is an innovative retailer of storage
and organization products for the home and
office with stores from coast to coast.
See http://www.organizedliving.com/
Chapter 11 Petition Date: May 4, 2005
Court: Southern District of Ohio (Columbus)
Judge: Charles M. Caldwell
Debtor's Counsel: Kristin E. Richner, Esq.
Squire, Sanders & Dempsey L.L.P.
41 South High Street
1300 Huntington Center
Columbus, Ohio 43215
Tel: (614) 365-2846
Fax: (614) 365-2499
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Li & Fung Trading Company Merchandise debt $2,068,345
1/Floor, HK Spinners
Industrial Building
800 Cheung Sha Wan Road
Kowloon, Hong Kong
Iris USA, Inc. Merchandise debt $914,953
11111 80th Avenue
P.O. Box 0910
Pleasant Prairie, WI 53158
Schulte Corporation Merchandise debt $770,245
P.O. Box 634342
12115 Ellington Court
Cincinnati, Ohio 45249
JDA Software Group, Inc. Service debt $765,399
14400 North 78th Street
Scottsdale, AZ 85260
Valassis Service debt $574,738
19975 Victor Parkway
Livonia, MI 48152
Maersk Customs Services Inc. Freight debt $406,145
1809 Baltimore Avenue
Kansas City, MO 64108
Sensible Storage/Wire Merchandise debt $397,509
Tech/Focus % Pro Trend Metals
29 Fragkeng Road
Pinghu Countryside
Shenzhen, China
Corporate Relocation Service debt $327,035
Management
6000 Rockside Woods Boulevard
Cleveland, OH 44131
The Nielsen Company Service debt $321,033
7405 Industrial Road
Florence, KY 41042
Atrium Buying Corp. Merchandise debt $229,068
495 East Coshocton Street
Johnstown, OH 43031
Mazurskie Meble Merchandise debt $218,917
International
UL. Dworcowa 3
Olsztyn, Poland 10-413
Saunders Karp & Megrue, LLC Service debt $207,736
Concept Imaging Merchandise debt $171,916
Richards Homewares, Inc. Merchandise debt $141,446
Zen Genius Service debt $132,999
Design Ideas, Ltd. Merchandise debt $132,565
Printing Services Company Service debt $132,560
Whitney Design, Inc. Merchandise debt $130,796
7730 PS-Court Associates LP Merchandise debt $122,721
Chagrin Retail, LLC Merchandise debt $116,266
PG&E NATIONAL: NRG Power Claim Reduced to $205,579
--------------------------------------------------
In accordance with the Court-approved Trade Contract Settlement
Protocol, NEGT Energy Trading - Power, L.P. entered into a
settlement agreement and mutual release with NRG Power Marketing
Inc. Under the Settlement Agreement, NRG Power's existing
$5,057,501 claim against ET Power -- Claim No. 211 -- will be
amended and allowed at $205,579.
The parties will also exchange mutual releases from any liability
arising out of:
-- a Master Agreement dated February 16, 1999, between ET
Power and NRG for the purchase and sale of electric energy
And capacity.
-- three open transactions under the International Swap
Derivatives Association Master Agreement.
-- a $9,000,000 corporate guaranty by Xcel Energy, Inc. in
favor of ET Power.
Paul M. Nussbaum, Esq., at Whiteford, Taylor & Preston L.L.P., in
Baltimore, Maryland, says the Settlement Agreement is warranted
as it allows the Debtors to avoid the risks and costs of
litigation.
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. 41; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PILLOWTEX CORP: Wants to Hire BDO Seidman to Review Tax Returns
---------------------------------------------------------------
Pillowtex Corporation and its debtor-affiliates originally planned
to engage KMPMG LLP, their prior accountants and financial
advisors, to review their federal and state income tax returns and
work papers for the year ended December 31, 2004, and any future
federal and state income tax returns that the Debtors may file.
However, due to the resignation of the Debtors' tax directors in
January 2005 and the retirement of the KMPMG tax partner that
reviewed the Debtors' previous tax returns, the Debtors asked
BDO Seidman LLP to do the review.
Pursuant to Section 327(e), 328(a), and 330 of the Bankruptcy
Code, the Debtors ask the U.S. Bankruptcy Court for the District
of Delaware for permission to employ BDO Seidman to review their
Tax Returns, nunc pro tunc to April 18, 2005.
Gilbert R. Saydah, Esq., at Morris, Nichols, Arsht & Tunnell, in
Wilmington, Delaware reminds the Court that by order dated
October 7, 2003, BDO Seidman was retained as the accountant to
the Official Committee of Unsecured Creditors. In addition, by
order dated November 12, 2004, BDO Seidman was retained by the
Debtors as the auditor of:
* the Pillowtex Corporation 401(k) Plan for Hourly Employees;
* the Pillowtex Corporation 401(k) Plan for Salaried
Employees; and
* the Pillowtex Corporation Employee Medical Benefit Plan for
the years ended December 31, 2003 and 2004.
The Debtors believe that BDO Seidman's role as accountant to the
Committee and auditor of the Benefit Plans do not create a
conflict for purposes of their proposed retention as reviewer of
the Debtors' Tax Returns as the Committee's interests and the
Debtors' interests are aligned in filing timely and accurate
federal and state tax returns.
The Debtors will pay BDO Seidman $38,000 plus expenses for the
review of their federal and state tax returns for the year ending
December 31, 2004. The expenses will be charged at actual costs
incurred. The compensation of BDO Seidman for any tax work for
subsequent periods will be determined at a later date and will be
subject to review pursuant to Section 330.
Mr. Saydah believes that BDO Seidman is well qualified to serve
as the reviewer of the Debtors' Tax Returns since it has
extensive familiarity with the fields of accounting, auditing,
and taxation as well as the accounting practices in insolvency
matters in the bankruptcy courts in the District of Delaware and
in other states.
Furthermore, BDO Seidman's services are necessary to comply with
the requirements of the Internal Revenue Service and the
applicable state taxing authorities. The Committee supports the
Debtors' proposed employment of BDO Seidman.
Robert Klein, a partner and Certified Public Accountant at BDO
Seidman, assures the Court that the firm does not represent any
interest adverse to the Debtors or their estates in the matters
on which it is seeking to be engaged. BDO Seidman is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
Additionally, Mr. Klein discloses that neither BDO Seidman nor
any of its members had any business, professional, or other
connection with the Debtors or any other party-in-interest, the
U.S. Trustee, or any person employed in the office of the U.S.
Trustee in matters on which BDO Seidman is to be engaged, except
that:
(a) it represented the Creditors Committee in connection with
the Debtors' initial Chapter 11 bankruptcy that was filed
on November 14, 2000;
(b) it is currently retained as the accountants to the
Committee in connection with the Debtors' current
Chapter 11 case;
(c) Trenwith Securities, BDO Seidman's majority-owned
affiliate, was engaged to provide investment banking
services to the Committee in connection with the Debtors
current Chapter 11 case; and
(d) it is currently retained as the auditor of the Debtors'
Benefit Plans.
BDO Seidman also has business relationships with these parties,
which are or may be creditors of the Debtors:
-- BDO Seidman has previously performed assurance, tax, or
other services for these creditors or other parties-in-
interest:
* Parkdale Mills, Inc.,
* Credit Suisse First Boston,
* Bank of America,
* Comerica Bank,
* Fleet Bank,
* Foothill Capital Corporation,
* Southern Container Corporation,
* Congress Financial Corporation, and
* Silver Point Capital
Fees for each of these engagements represent less than 1%
of BDO Seidman's annual revenues and relate to matters
totally unrelated to the case for which BDO Seidman is
seeking to be engaged;
-- BDO Seidman has performed and may be presently performing,
assurance, tax, or other services for these creditors or
other parties-in-interest:
* El DuPont,
* Continental Casualty Company,
* Societe Generale,
* The CIT Group,
* Credit Lyonnais,
* Wells Fargo Bank,
* Gotham Partners, LP, and
* KPMG
Fees for each of these engagements represent less than 1%
of BDO Seidman's annual revenues and relate to matters
totally unrelated to the case for which BDO Seidman is
seeking to be engaged.
-- as part of its practice, BDO Seidman's appears in cases,
proceedings, and transactions involving many different
creditors, shareholders, attorneys, accountants, financial
consultants, investment bankers, and other entities, some
of which may be, or represent claimants and parties-in-
interest in the Debtors' Chapter 11 case. However, BDO
Seidman does not represent any of these entity, other than
which has already been disclosed, in connection with the
pending case or have a relationship with any entity or
profession which would be adverse to the Debtor's
Committee or its estate.
BDO Seidman performed a review of potential connections and
relationships between the firm and:
(1) Pillowtex Corporation and its domestic and foreign
subsidiaries and affiliates;
(2) the holders of 10% of Pillowtex's term debt claims;
(3) the holders of revolving credit agreement claims;
(4) the beneficial owners of 5% or more of equity in
Pillowtex;
(5) the Debtors' attorneys and advisors;
(6) the largest unsecured creditors of Pillowtex on a
consolidated basis as identified in the Debtors' Chapter
11 petition; and
(7) parties to significant leases or executory contracts.
If BDO Seidman discovers additional information that, in the
firm's reasonable opinion, requires disclosure, it will file a
supplemental disclosure with the Court as promptly as possible.
Headquartered in Dallas, Texas, Pillowtex Corporation --
http://www.pillowtex.com/-- sold top-of-the-bed products to
virtually every major retailer in the U.S. and Canada. The
Company filed for Chapter 11 protection on November 14, 2000
(Bankr. Del. Case No. 00-4211), emerged from bankruptcy under a
chapter 11 plan, and filed a second time on July 30, 2003 (Bankr.
Del. Case No. 03-12339). The second chapter 11 filing triggered
sales of substantially all of the Company's assets. David G.
Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at
Morris Nichols Arsht & Tunnel, represent the Debtors. On
July 30, 2003, the Company listed $548,003,000 in assets and
$475,859,000 in debts. (Pillowtex Bankruptcy News, Issue No. 77;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
PILLOWTEX: Asks Court to Keep Nan Ya Settlement Docs Under Seal
---------------------------------------------------------------
During the course of ordinary operations, Pillowtex Corporation
and its debtor-affiliates bought Polyester Staple from various
manufacturers, including Nan Ya Plastics Corporation, America and
Nan Ya Plastics Corporation. The Debtors, along with over 25
other signatory plaintiffs, allege that the Nan Ya entities
participated in an unlawful conspiracy to raise, fix, maintain, or
stabilize the price of Polyester Staple in the United States at
artificially high levels and allocate markets and customers for
the sale of Polyester Staple.
Certain of the Debtors and Signatory Plaintiffs have brought
suits against the Nan Ya Entities for violating Section 1 of the
Sherman Act and other laws. The Direct Actions and several
putative class actions to which the Debtors are putative class
members are consolidated in the action In re Polyester Staple
Antitrust Litigation.
As members of a putative class in the Consolidated Action, the
Debtors have entered into settlement negotiations with the Nan Ya
Entities. The settlement documents, among others, provide for
the payment of a specified sum to Pillowtex Corporation as
successor to Fieldcrest Cannon, Inc., and the Signatory
Plaintiffs.
By this motion, the Debtors seek the U.S. Bankruptcy Court for the
District of Delaware's 's authority to enter into the Settlement
Documents, and to perform their obligations under the Settlement.
The salient terms of the Settlement are:
(a) payment by the Nan Ya Entities of the Settlement Amount
to Pillowtex and the Signatory Plaintiffs;
(b) dismissal of Pillowtex and the Signatory Plaintiffs'
Direct Actions as against the Nan Ya Entities only, with
prejudice;
(c) the release of the Nan Ya Entities from all claims,
demands, actions, suits, and causes of action that could
have been asserted in Consolidated Action; and
(d) agreement by the parties not to reveal the terms and
conditions of the Settlement Agreement.
An parties likewise entered into an allocation agreement which
sets forth a method for allocating the Settlement Amount among
the Signatory Plaintiffs.
Gilbert R. Saydah, Esq., at Morris, Nichols, Arsht & Tunnell, in
Wilmington, Delaware, informs Judge Walsh that the terms of the
Settlement Documents reflect the considered judgment not only of
the Debtors, but also of the other Signatory Plaintiffs, many of
whom are among the largest firms in the U.S. textile industry.
The Debtors submit that continued litigation against the Nan Ya
Entities would require substantial time and expense, with no
certain outcome. The Settlement Agreement, on the other hand,
represents a reasonable compromise of disputed claims. The
immediate cash consideration that the Debtors will receive is of
substantial benefit to the Debtors' estates.
Settlement Documents Under Seal
The Debtors and the Signatory Plaintiffs continue to negotiate
settlements with other defendants in the Class Action and other
litigation matters. Since the Settlement Documents contain
confidential, commercial information, the Debtors and the
Signatory Plaintiffs do not want the terms of the Settlement
Documents disclosed to the public as this might jeopardize their
negotiating abilities.
Accordingly, the Debtors seek the Court's permission to file the
Settlement Agreement and Allocation Agreement under seal. The
Debtors promise to provide a copy of each of the Settlement
Documents to the U.S. Trustee and the Official Committee of
Unsecured Creditors upon receipt of the U.S. Trustee's and the
Committee's agreement to keep the Settlement Documents
confidential.
Headquartered in Dallas, Texas, Pillowtex Corporation --
http://www.pillowtex.com/-- sold top-of-the-bed products to
virtually every major retailer in the U.S. and Canada. The
Company filed for Chapter 11 protection on November 14, 2000
(Bankr. Del. Case No. 00-4211), emerged from bankruptcy under a
chapter 11 plan, and filed a second time on July 30, 2003 (Bankr.
Del. Case No. 03-12339). The second chapter 11 filing triggered
sales of substantially all of the Company's assets. David G.
Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at
Morris Nichols Arsht & Tunnel, represent the Debtors. On
July 30, 2003, the Company listed $548,003,000 in assets and
$475,859,000 in debts. (Pillowtex Bankruptcy News, Issue No. 77;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
PONDEROSA PINE: Wants to Hire Lowenstein Sandler as Bankr. Counsel
------------------------------------------------------------------
Ponderosa Pine Energy, LLC, and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of New Jersey for permission to
employ Lowenstein Sandler PC as their general bankruptcy counsel.
Lowenstein Sandler is expected to:
a) prepare on the Debtors' behalf all necessary documents
regarding debt restructuring and asset dispositions and all
necessary motions, applications, answers, orders, reports
and papers in connection with the administration of the
Debtors' chapter 11 cases;
b) advise the Debtors with regards to their rights and
obligations as debtors-in-possession in the continued
operation and management of their properties and businesses;
c) take all necessary actions to protect and preserve the
Debtors' estates, including the prosecution of actions by
the Debtors, the defense of actions commenced against the
Debtors, and negotiations concerning litigation in which the
Debtors are involved and objections to claims filed against
their estates; and
d) appear in Bankruptcy Court to protect the Debtors'
interests, and provide all other legal services for the
Debtors that are necessary in their chapter 11 cases.
Mary E. Seymour, Esq., a Counsel at Lowenstein Sandler, is the
lead attorney for the Debtors. Ms. Seymour discloses that the
Firm received a $200,000 retainer.
Mr. Seymour reports Lowenstein Sandler's professionals bill:
Designation Hourly Rate
----------- -----------
Members $300 - $575
Senior Counsel $275 - $395
Counsel $250 - $350
Associates $160 - $295
Legal Assistants $75 - $150
Lowenstein Sandler assures the Court that it does not represent
any interest materially adverse to the Debtors or their estates.
Headquartered in Morristown, New Jersey, Ponderosa Pine Energy,
LLC, and its affiliates are utility companies that supply
electricity and steam. The Company and its debtor-affiliates
filed for chapter 11 protection on April 14, 2005 (Bankr. D.N.J.
Case No. 05-22068). When the Debtors filed for protection from
their creditors, they listed estimated assets and debts of more
than $100 million.
PRIMUS TELECOMMUNICATIONS: Low Earnings Cue S&P to Watch Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings for McLean,
Virginia-based international long-distance provider Primus
Telecommunications Group Inc. and its related entities on
CreditWatch with negative implications, including its 'B-'
corporate credit rating. The '5' recovery rating on the bank loan
at Primus Telecommunications Holding Inc. is not on CreditWatch.
"This follows the company's recent earnings announcement for the
first quarter of 2005. EBITDA, at $10 million for the quarter,
before writedowns, fell short of our expectations, and dropped by
77% sequentially and 60% on a year-over-year basis," said Standard
& Poor's credit analyst Catherine Cosentino.
EBITDA has been under pressure over the past 12 to 15 months, on
the combination of increased competition from the local incumbent
telephone companies -- especially in the company's Canadian and
Australian markets -- and incremental expenses incurred by the
company for the marketing of new product initiatives to combat
such competition, such as voice over Internet Protocol (VoIP)
services and wireless resale.
There is a high degree of volatility in EBITDA and substantial
loss of investor confidence in the company, as exhibited by
significant declines in the company's bond price since its first
quarter earnings announcement on May 2. As a result, the company
may come under increasing pressure to restructure its debt burden,
and the company indicated in its earnings press release that it
will evaluate and determine the most efficient use of its capital,
including exchanging or retiring certain of its debt in privately
negotiated transactions, open market purchases or by other direct
or indirect means. Moreover, long-term prospects for the
company's residential and business telecom services remains highly
uncertain. Given such factors, Standard & Poor's will revisit the
company's business prospects and likely financial policy in light
of its liquidity resources, to determine if the rating should be
lowered.
RADIO ONE: S&P Rates Proposed $750 Million Credit Facility at BB
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Radio One
Inc., including its long-term corporate credit rating to 'BB-'
from 'B+', acknowledging the company's financial profile
improvement over the past three years. The senior secured debt
rating was raised to 'BB-' from 'B+', and the subordinated debt
rating was raised to 'B' from 'B-'. All the ratings are removed
from CreditWatch, where they were placed with positive
implications on Feb. 3, 2005.
At the same time, Standard & Poor's assigned a 'BB' rating to the
company's proposed $750 million credit facilities, with a recovery
rating of '1', indicating expectations of full recovery (100%) of
principal in the event of a payment default. Borrowings are
expected to be used to refinance the company's existing credit
facilities. The outlook is stable. The Washington, D.C.-based
radio broadcasting company had total debt of about $922 million at
March 31, 2005.
"The rating upgrade reflects a 15% increase in EBITDA in 2004 from
2002, and an 8% decline in total debt, including prior years'
debt-like preferred stock, said Standard & Poor's credit analyst
Alyse Michaelson Kelly. Furthermore, Standard & Poor's expects
that Radio One will prudently allocate free cash flow and approach
acquisitions in a disciplined manner while pursuing its growth
objectives. This should result in debt to EBITDA remaining in
line with 5.5x, Standard & Poor's target for Radio One at the
current rating.
The rating on Radio One reflects:
(1) financial risk from aggressive, largely debt-financed
station purchases;
(2) ongoing expansion particularly in large markets where even
unprofitable stations can be costly;
(3) competition in its niche urban format; and
(4) advertising cyclicality.
These factors are only partially offset by Radio One's:
(1) good competitive position targeting the African-American
audience;
(2) radio broadcasting's high margin potential, minimal
capital spending needs and good discretionary cash flow
generating capabilities; and
(3) resilient station asset values.
Radio One's business position is supported by its portfolio of 69
radio stations with No. 1- or No. 2-ranked clusters in 21 of the
top 50 African-American markets. Revenue growth has benefited
from a concentration of stations in large markets where ad rates
are more attractive. The company has one of the highest EBITDA
margins in the radio broadcasting sector, at nearly 50%,
reflecting good cost control and a clustering strategy that
affords cost efficiencies and better control of inventory.
RENAL CARE: Moody's Reviewing Low-B Ratings for Possible Downgrade
------------------------------------------------------------------
Moody's Investors Service placed the ratings of Renal Care Group,
Inc. under review for possible downgrade following the company's
announcement that it had entered into a definitive agreement to be
acquired by Fresenius Medical Care AG. The all-cash transaction,
which totals approximately $3.5 billion, includes the assumption
of Renal Care Group's debt of approximately $500 million.
Ratings placed under review:
* Senior subordinated notes due 2011, rated B1 (originally
issued by National Nephrology Associates, Inc.)
* Ba2 senior implied rating
* Ba3 senior unsecured issuer rating
Moody's review will focus primarily on the position of the
company's debt in the capital structure of the combined company.
In addition, the rating agency said it would evaluate the effect
the combined company's financial policy will have on Renal Care
Group's existing creditors.
It is expected that the acquisition price will be entirely
financed with debt. Completion of the transaction will be subject
to Renal Care Group's shareholders and expiration of the waiting
period under the Hart-Scott Rodino Antitrust Improvements Act.
Renal Care Group, Inc. is a specialized dialysis services company
that provides care to patients with kidney disease. Renal Care
Group serves over 30,400 patients at more than 425 owned
outpatient dialysis facilities, in addition to providing acute
dialysis services at more than 210 hospitals. Renal Care Group
reported revenues of approximately $1.3 billion for the year ended
December 31, 2004
Fresenius Medical Care AG is the world's leading provider of
dialysis products and services. For the fiscal year ended December
31, 2004, Fresenius Medical Care AG generated net revenues of US
$6,228 million.
RIVERS II: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Rivers II, Inc.
dba Red Dog River Saloon
dba Eddy-Out Eatery
P.O. Box 39
Lansing, West Virginia 25862
Bankruptcy Case No.: 05-50410
Type of Business: The Debtor operates the Rivers Whitewater
Rafting Resort rafting and sports vacation
destination located in Fayetteville, West
Virginia. See http://www.riversresort.com/
Chapter 11 Petition Date: April 28, 2005
Court: Southern District of West Virginia (Beckley)
Judge: Ronald G. Pearson
Debtor's Counsel: James R. Sheatsley, Esq.
Gorman Sheatsley & Co. LC
P.O. Box 5518
Beckley, West Virginia 25801-5518
Tel: (304) 252-5321
Estimated Assets: Unknown
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Progress Printing $89,831
P.O. Box 4575
Lynchburg, VA 24502
Bank One Business Card $39,707
P.O. Box 15153
Wilmington, DE 19886
Bright Images $17,102
3022 Memorial Avenue
Lynchburg, VA 24501
Capital One $12,306
FPIS $11,188
East West Printing $9,870
Kay, Casto & Chaney $9,000
Miles Media Group $8,310
Quality Inn Fayetteville $7,563
Brochures Unlimited $7,188
Leisure Sports Photography $5,996
Karen E. Calvert $5,000
Quray Sportswear $4,356
Southern WV Convention and Visitors Bureau $3,800
Travelers Choice $3,755
Camp David $3,324
Travel Information Services $3,100
Capital Venture Consultants $3,000
Kaeser & Blair Inc. $2,586
Highwind Productions $2,399
RIVIERA TOOL: Comerica Forebearance Agreement Expired Apr. 29
-------------------------------------------------------------
Riviera Tool Company and Comerica Bank entered into a Forbearance
Agreement on Nov. 16, 2004, and amended that agreement eight
times. The agreement expired on April 29, 2005. The Hillstreet
Fund II, L.P., the sole holder of Riviera's subordinated debt,
also agreed not to exercise any rights or remedies it might have
while the standstill agreement was in place. That agreement
expired on April 29, 2005, too. The Eighth Amendment required
Riviera to pay Comerica a fully earned, non-refundable $125,000 on
or before April 25, 2005. The fee may or may not have been paid.
Jeff Lambert at Lambert, Edwards & Associates, a spokesman for
Riviera, didn't return a telephone call Friday asking for
confirmation that the forebearance agreement expired and the
company has not entered into a Ninth Amendment. Peter Canepa,
Riviera's CFO, didn't respond to a parallel e-mail inquiry.
Comerica required the Company to retain the services of a
consulting company and pay the Bank's legal fees.
The loan officer handling Riviera's defaulted loan is:
Karl R. Norton
Account Officer
COMERICA BANK
Special Assets Group
99 Monroe Avenue, NW, Suite 1000
Grand Rapids, Michigan 49503
Telephone (616) 776-5786
Fax (616) 752-4732
Riviera Tool Co. -- http://www.rivieratool.com/-- designs,
develops and manufactures large-scale, custom metal stamping die
systems used in the high-speed production of sheet metal parts and
assemblies for the global automotive industry. A majority of
Riviera's sales are to Mercedes Benz, BMW, Nissan,
DaimlerChrysler, General Motors Corp., Ford Motor Co. and their
Tier One suppliers.
At March 31, 2005, Riviera's balance sheet showed $19.2 million in
assets and a $7.2 million working capital deficit. The company
sold $24.6 million of product in Fiscal 2004.
Deloitte & Touche LLP expressed substantial doubt about the
company's ability to continue as a going concern after it audited
the company's financial statements for the fiscal year ending
August 31, 2004.
SONIC AUTOMOTIVE: Subpar Financial Profile Cues S&P to Cut Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered the corporate credit
rating on Sonic Automotive Inc. to 'BB-' from 'BB'.
"The downgrade reflects the company's slow progress in improving
its operating performance," said Standard & Poor's credit analyst
Martin King. "Furthermore, Sonic's financial profile, though
improving, remains subpar for the 'BB' rating."
Charlotte, North Carolina-based Sonic, a leading consolidator in
the automotive retailing industry, has total debt of about $1.5
billion, excluding floor plan liabilities and including operating
leases at their present value. The rating outlook is stable.
Sonic has struggled in recent years to improve its operating
performance by reducing administrative costs and accelerating
internal growth. It has made some progress with its costs by
realigning regional management, rolling out standard compensation
plans, and controlling advertising expenses. But Sonic has still
fallen short of its performance targets because of tough market
conditions, including slower-than-expected sales and a weak
pricing environment. Operations improvement has also been
hindered by the difficulty of deploying effective human resources
in targeted areas and the complexity of implementing standardized
best-practice processes.
During the first quarter of 2005, net income fell 14% despite a 9%
increase in revenue.
The company attributed the earnings decline to:
(1) excess industry inventory (which is pressuring pricing),
(2) low volume during January and February, and
(3) higher interest costs.
Sonic expects earnings pressure to continue in the second quarter.
The company lowered its full-year earnings per share expectations
to $2.25-$2.40 from its previous guidance of $2.35-$2.45, though
the new figure assumes that there will be a rebound in the second
half. Even if conditions improve as expected, however, the extent
of such a rebound is uncertain because of the continuing
challenges in the new vehicle segment.
Sonic's spotty operating performance and aggressive acquisition
strategy have resulted in a highly leveraged balance sheet and a
weak financial profile. The company's credit statistics have been
stretched for the rating during the past two years (debt to EBITDA
was more than 5x), but they are expected to improve to more
acceptable levels as the company scales back acquisitions and
reduces debt. Credit protection measures have yet to improve
materially, however. EBITDA margins, with floor plan interest
included in the cost of sales, have improved during the past year,
to 2.9% in 2004 from 2.6% in 2003, but could be pressured during
2005 if operating performance does not improve.
SPECTRASITE INC.: American Tower Merger Cues S&P to Revise Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its CreditWatch listing
on the ratings of 'B+' rated, Cary, North Carolina-based tower
operator SpectraSite Inc. to developing from positive. The '1'
recovery rating on SpectraSite's SpectraSite Communications Inc.
unit and American Tower Corp.'s American Tower LLC unit's secured
bank debt are not on CreditWatch.
"These actions follow the recently announced merger agreement
between Boston, Massachusetts-based tower operator American Tower
Corp. and SpectraSite," said Standard & Poor's credit analyst
Catherine Cosentino. Under the agreement, which is expected to
close in the second half of 2005, subject to stockholder and
regulatory approvals, SpectraSite shareholders will receive shares
of American Tower stock.
When completed, these shareholders will own approximately 41% of
the combined company, with American Tower shareholders owning the
remaining 59%. The change in the CreditWatch listing reflects the
fact that the combined entity could be rated as low as 'B', given
the higher leverage of American Tower, at about 8.3x debt to
EBITDA, on an operating lease adjusted basis for 2004, including
interest income from TV Azteca and adjusted for the early 2005
redemption of $133 million of additional debt, compared with 7.2x
for SpectraSite.
If the merger is not consummated, SpectraSite could still be
upgraded because of its better credit metrics. Our ratings on
American Tower Corp. remain on CreditWatch with positive
implications, with two possible paths to upgrade. On its own,
tower co-location growth could support a higher rating; if the
merger does not close, the company could still be raised to at
least 'B'.
SPECTRASITE INC: Merging with American Tower in Stock Transaction
-----------------------------------------------------------------
(BUSINESS WIRE)--May 4, 2005
American Tower Corporation (NYSE:AMT) and SpectraSite, Inc.
(NYSE:SSI) reported an agreement for American Tower to merge with
SpectraSite, in a transaction that would bring together two tower
industry leaders with a combined portfolio of over 22,600
communications sites.
Under the terms of the agreement, which was unanimously approved
by the boards of directors of both companies, American Tower and
SpectraSite will merge in a stock for stock exchange, in which
shareholders of SpectraSite will receive 3.575 shares of American
Tower Class A common stock for each common share of SpectraSite.
Based on American Tower's closing stock price on May 3, 2005, this
exchange ratio equals $61.53 per share, valuing SpectraSite's
equity at approximately $3.1 billion. American Tower expects to
issue approximately 181.0 million shares in the transaction.
Following the closing, American Tower shareholders would own
approximately 59% and SpectraSite shareholders would own
approximately 41% of the combined company. The transaction is
expected to be tax-free to shareholders of both companies for U.S.
federal income tax purposes.
The transaction, which is subject to approval by shareholders of
American Tower and SpectraSite, as well as regulatory approvals
and other customary closing conditions, is expected to close in
the second half of 2005.
"This combination is a defining event in the tower industry,
creating the clear industry leader," said Jim Taiclet, American
Tower's Chairman and Chief Executive Officer. "We believe there
is a compelling alignment between the strategies of American Tower
and SpectraSite. First, we are both fully focused on the tower
leasing business. Second, we are both committed to operational
excellence, investing continually in our people, processes and
systems. And third, we are both committed to delivering superior
returns to shareholders as we generate increasing free cash flow
over time. Combining with SpectraSite creates an even stronger
company, with expanded revenue, decreased leverage for American
Tower, a broader customer base and a more numerous and diverse
tower portfolio."
"The combination of SpectraSite and American Tower will ensure our
ability to compete successfully in serving the needs of our
customers," said Steve Clark, President and Chief Executive
Officer of SpectraSite. "We will have more towers in the best
markets. Together, we will be the premier tower company in North
America."
High Quality Assets
American Tower and SpectraSite bring together high quality
wireless and broadcast tower assets to the combined company.
American Tower has a portfolio of over 14,800 communication sites,
including approximately 12,400 sites in the United States. The
addition of SpectraSite's portfolio of approximately 7,800
communication sites will create a combined company with a
portfolio of over 22,600 communications sites, including over
22,000 wireless towers and over 400 broadcast towers.
The combined company will have over 20,000 tower sites in the
Unites States. With over 85% of the company's tower sites located
in the 100 top basic trading areas, or "BTA," markets and core
corridors, the company will have a broad and compelling footprint
to service its customers.
Commitment to Tower Leasing
"Together, we are committed to growing the tower leasing business
and taking full advantage of the operating leverage of the tower
business model," said Mr. Taiclet. "Wireless voice subscribers
and minutes of use have grown steadily and are expected to
continue to grow over the coming years. We believe that as
wireless carriers seek to improve coverage and network quality,
and deploy next generation voice and data services, we will
continue to enjoy robust growth in our business. By bringing
together strong management, skilled employees and best practices
of both companies, we will be better able to capitalize on the
growth in the wireless industry."
"We recognize that towers are an integral part of our customers'
business operations. As a combined company, we will be able to
offer more than 20,000 sites in the US to our customers. And
combined with our joint dedication to customer service and
continuous process improvement, we believe that our clear scale
leadership will enable us to emerge as the preferred provider to
wireless carriers nationwide."
Financial Expectations
American Tower and SpectraSite expect the proposed transaction
will yield a net present value in excess of $400 million in
synergies. Based on the scalability of the tower business model,
the combined company expects to achieve operational efficiencies
by spreading its relatively fixed tower operating expenses over a
larger number of towers and broader revenue base. By reducing
corporate expense and tower overhead, the combined company
believes that it can achieve annual cost synergies of
approximately $30-35 million per year.
The combined company will also have a strengthened balance sheet.
American Tower currently has approximately $3.1 billion in total
debt and SpectraSite has $750 million. The transaction will
decrease American Tower's overall leverage, which will provide the
company with greater financial flexibility. American Tower
expects the cash flow and financial position of the combined
company to accelerate the company's ability to reduce debt levels
and return cash to shareholders.
Mr. Taiclet will continue to serve as Chief Executive Officer of
the combined company and Chairman of the Board of Directors of
American Tower following the closing, and Brad Singer will serve
as Chief Financial Officer. Mr. Clark will join the American
Tower Board of Directors, as will three other members of
SpectraSite's Board of Directors, including Tim Biltz,
SpectraSite's Chief Operating Officer. As a result, the American
Tower Board of Directors will increase from six to ten members.
The corporate headquarters for the combined company will remain in
Boston, Massachusetts.
About American Tower
American Tower -- http://www.americantower.com/-- is the leading
independent owner, operator and developer of broadcast and
wireless communications sites in North America. American Tower
operates over 14,800 sites in the United States, Mexico, and
Brazil, including approximately 300 broadcast tower sites.
About SpectraSite
Headquartered in Cary, North Carolina, SpectraSite, Inc. --
http://www.spectrasite.com/,is one of the largest wireless tower
operators in the United States. At December 31, 2004, SpectraSite
owned or operated approximately 10,000 revenue producing sites,
including 7,821 towers and in-building systems primarily in the
top 100 markets in the United States. SpectraSite's customers are
leading wireless communications providers, including Cingular,
Nextel, Sprint PCS, T-Mobile and Verizon Wireless.
* * *
As reported in the Troubled Company Reporter on Apr. 25, 2005
Standard & Poor's Ratings Services placed its ratings for four
wireless tower companies:
(1) SpectraSite Inc. ('B+' corporate credit rating),
(2) Crown Castle International Corp. ('B'),
(3) AAT Communications Corp. ('B-'), and
(4) SBA Communications Corp. ('CCC+'),
as well as related entities -- on CreditWatch with positive
implications. These ratings join those for American Tower Corp.
(B-/Watch Pos/--), which were placed on CreditWatch with positive
implications Jan. 14, 2005. These companies collectively have
approximately $7 billion of debt outstanding.
These CreditWatch listings relate to an industry review being
conducted by Standard & Poor's of the tower leasing business and
the position of the companies within this industry.
"Strengthening business prospects could support higher ratings for
the companies in this sector," said Standard & Poor's credit
analyst Catherine Cosentino. "The wireless carriers, particularly
the large national players, are expected to continue to increase
their geographic footprint, coverage, and capacity to support
increased minutes of use both for voice and expanding broadband
services. Tower companies will benefit from these trends, which
should continue to bolster increased tower co-location."
STRONGCO INC: Completes Plan of Arrangement & Trades on the TSX
---------------------------------------------------------------
Strongco Inc. (TSX:SQP) completed its plan of arrangement which
provides for the conversion of Strongco into a new publicly traded
income fund that will carry on the existing Strongco business.
The Plan, which was approved by shareholders on April 28th, 2005,
has received the necessary court and regulatory approvals.
Units of Strongco Income Fund are expected to commence trading on
the Toronto Stock Exchange under the symbol "SQP.UN" on or about
May 10th, 2005.
Strongco is a full-line equipment sales and service company with
operations from Alberta through Atlantic Canada. Its shares are
listed on the Toronto Stock Exchange and its website can be
accessed at http://www.strongco.com/
SUNRISE CDO: Moody's Lowers Sr. Secured Note Rating from Ba2 to B2
------------------------------------------------------------------
Moody's Investors Service downgraded the rating of two Classes of
Notes issued by Sunrise CDO I, Ltd.: $222,600,000 Class A First
Priority Senior Secured Floating Rate Notes Due 2022 has been
downgraded from Aa2 on watch for possible downgrade to A3, and the
U.S. $45,100,000 Class B Second Priority Senior Secured Floating
Rate Notes Due 2037 has been downgraded from Ba2 on watch for
possible downgrade to B2.
According to Moody's, this action is the result of negative credit
migration and par losses due to defaulted asset-backed securities
in the underlying portfolio.
RATING ACTION: DOWNGRADE
Issuer: Sunrise CDO I, Ltd
Tranche Description: U.S. $222,600,000 Class A First Priority
Senior Secured Floating Rate Notes Due 2037
Previous Rating: Aa2 on watch for possible downgrade
New Rating: A3
Tranche Description: U.S. $45,100,000 Class B Second Priority
Senior Secured Floating Rate Notes Due 2037
Previous Rating: Ba2 on watch for possible downgrade
New Rating: B2
TUCKAHOE CREDIT: S&P Lifts CreditWatch on Lease Securitization
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its rating on Tuckahoe
Credit Lease Trust 2001-CTL1's credit lease-backed pass-through
certificates and removed it from CreditWatch negative, where it
was placed Feb. 25, 2005. At the same time, the rating is
assigned a developing outlook.
The CreditWatch removal reflects the May 3, 2005, removal from
CreditWatch of the corporate credit rating assigned to Qwest
Communications International Inc. The rating on the credit lease-
backed certificates is dependent on the rating assigned to Qwest.
The credit lease-backed certificates are collateralized by a first
mortgage and assignment of lease encumbering a condominium
interest in a two-story industrial building in Yonkers, New York.
The entire property is leased to Qwest Communications Corp., a
wholly owned subsidiary of Qwest, on a triple net basis, with QCC
responsible for all operating and maintenance costs.
Rating Affirmed And Removed From Creditwatch Negative
Tuckahoe Credit Lease Trust 2001-CTL1
Credit lease-backed pass-through certs series 2001-CTL1
Rating
------
To From
-- ----
BB-/Developing BB-/Watch Neg
TXU CORP: Posts $416 Million Earnings in First Quarter
------------------------------------------------------
TXU Corp. (NYSE: TXU) reported consolidated results for the first
quarter ended March 31, 2005.
Reported Earnings
For the first quarter of 2005, reported earnings of $416 million
include income from discontinued operations of $15 million.
Income from continuing operations was $406 million for the first
quarter 2005 compared to income of $128 million for the prior year
period. Income from continuing operations for the first quarter
of 2005 includes income from special items, primarily associated
with the benefits of reductions in tax reserves and litigation
settlement expenses net of transitional Capgemini outsourcing
costs and other restructuring-related expenses, totaling
$155 million. For reported earnings per share purposes, the
dilution calculation also subtracts $462 million related to the
estimated true-up (as of March 31, 2005) on the company's
accelerated share repurchase program. Reported earnings of $173
million for the first quarter of 2004 include losses from special
items of $26 million, $0.07 per share and income from discontinued
operations of $50 million, $0.13 per share. Special items are
discussed in more detail below.
Reported and operational earnings per share are diluted. For
periods when common stock equivalents are not dilutive, diluted
shares are equal to basic shares outstanding.
Operational Earnings
The 135 percent increase in operational earnings per share, which
excludes special items and the effect of the accelerated share
repurchase program true-up, reflects improved performance from the
TXU Energy Holdings and TXU Electric Delivery segments, reduced
corporate expenses, and fewer average common shares outstanding.
"The first quarter results are a solid start to delivering on our
2005 outlook, in spite of unsustainably low margins and robust
competition in the retail business, and very volatile commodity
prices," said C. John Wilder, chief executive officer, TXU Corp.
"We continue to progress in transforming TXU into a high-
performance industrial company through a focus on operational
excellence, market leadership, and performance management."
Business Segment Results
The following is a discussion of operational earnings by business
segment. TXU Corp.'s business segments include the TXU Energy
Company LLC (TXU Energy Holdings segment), TXU Electric Delivery,
and Corporate operations.
TXU Energy Holdings Segment
TXU Energy Company LLC, the unregulated business segment (TXU
Energy Holdings segment), consists of electricity generation (TXU
Power) and consumer, business and wholesale markets activities
(collectively, TXU Energy). These businesses are effectively
managed as one business through the wholesale markets function
that captures the natural hedge inherent between the retail and
generation businesses. TXU Power and the retail business of TXU
Energy are separate legal entities that, in accordance with
regulatory requirements, operate independently within the
competitive Texas power market.
Operational Performance
TXU Energy (consumer, business, and wholesale markets) continued
to make progress toward operational excellence and market
leadership in the first quarter of 2005.
Competition in consumer markets remained robust, primarily driven
by increased competitor marketing and higher discounting despite
declining headroom as a result of increased natural gas and power
prices. Net residential customer attrition was 1.2% for the
quarter, down from 2.1% the previous quarter but higher than the
0.5% net growth experienced during Q1 2004, primarily due to
higher native market switching than a year ago when competitive
activity was low and reduced levels of customers returned to TXU
Energy from competitive retailers due to non-payment. However, as
TXU Energy continues to focus on customer service improvements and
bad debt reduction efforts, the relative profitability of the
customer base continues to improve. For example, approximately 50
percent of the customer attrition was from customers with poor
payment history in the past 12 months.
TXU Energy expects to launch several initiatives during the summer
of 2005, including retention programs and competitive offers, to
reduce the level of switching during this period of high
competition. These include expansion of the successfully piloted
TXU Rewards+ program in North Texas. The internet- based TXU
Energy Rewards+ program, a loyalty program allowing TXU Energy
customers to use Rewards dollars to obtain discounts on the
purchase of travel, entertainment and merchandise of up to 45
percent lower than popular on-line travel and shopping sites, was
launched in February. Over 30,000 customers have joined this
program since it began, and expansion of the program is underway.
In addition, to remain aggressive in acquiring and retaining a
high-value customer mix, an assertive advertising campaign is
being launched outside of TXU Energy's native market to highlight
the benefits of switching to TXU Energy. These programs are
expected to increase profitable customer acquisitions since TXU
Energy has improved its bad debt management capabilities and
lowered its cost to serve customers through the Capgemini
agreement. For the year TXU Energy expects native market attrition
to range from 7 to 8 percent as compared to previous forecasts of
around 5 percent.
TXU Energy also continues to improve the customer experience.
Average speed to answer customer calls for the quarter was 12
seconds compared to over 110 seconds in the prior year period.
Customer time in the integrated voice recognition system (IVR) was
down 28 percent from the prior year period to 78 seconds. PUC
complaints were also down by 42 percent from the prior year. The
Capgemini Energy partnership has assisted in delivering these
service improvements and is expected to deliver an estimated $115
million of SG&A expense savings system-wide in 2005 as compared to
2003, of which approximately 30 percent was realized in 2004. TXU
Energy also continues to make substantial progress in reduction of
bad debt expense with an additional $15 million reduction in the
first quarter as compared to the prior year period.
Competition also remains robust in business markets. The churn
rate for small and medium businesses remained at about the fourth
quarter 2004 pace even with increased power prices reducing
headroom during the first quarter of 2005. In response, TXU Energy
has expanded and enhanced the telephone and direct sales forces.
The acquisition process for new small and medium customers has
also been streamlined by eliminating several steps and improving
monitoring which is expected to significantly increase its
effectiveness, simplify the process for customers and reduce the
time required to complete the acquisition. For large commercial
and industrial customers, delivered volumes decreased 35 percent
to 4.4 TWh as compared to 6.7 TWh in the first quarter 2004,
reflecting TXU Energy's change in strategy in 2004 to focus on
more profitable margins and continued fierce competition in the
market. Along with the change in strategy, the business markets
group has improved its contracting activity through more effective
sales coverage and by reducing selling costs by over 35 percent.
TXU Power achieved several significant milestones during the first
quarter of 2005. Excluding planned outages, TXU Power's nuclear
plant safely produced at a 100.1 percent capacity factor
outperforming the 99.2 percent level in the same period of 2004.
Unit 2 recently completed a planned refueling outage that was
completed safely and in 32 days, or 3 days less than the targeted
plan. Performance from the lignite fleet also improved with high
levels of reliable, low cost output, achieving an aggregate
capacity factor excluding planned outages of 96.0 percent as
compared to 92.3 percent in the first quarter of 2004. The lean
operating techniques of the TXU Operating System have had a
dramatic and positive impact on the fleet performance. Planned
outage durations have been reduced by approximately nine percent,
while maintaining the scope of the maintenance performed. Cycle
times for equipment repairs, such as draglines and coal crushers
have also been safely cut by 25 to 30 percent, increasing
availability and output. This and other TXU Operating System
improvements have been achieved by fully engaging employees and
contractors in identifying and eliminating waste and delivering
sustainable operational and earnings improvements. In mid-April,
TXU Power opened the Power Optimization Center (POC). The POC
utilizes telecommunications and on-line technologies to detect
plant performance issues before they become a problem, resulting
in improved heat rates and reliability at the plants. The POC is
already improving reliability by identifying elevated vibration
and temperature trends in fans and motors at TXU Power's lignite
and nuclear plants.
Financial Performance
In the first quarter of 2005, the TXU Energy Holdings segment
reported income from continuing operations of $0.85 per share, a
174 percent increase over income from continuing operations of
$0.31 per share in the first quarter of 2004. Special items for
the first quarter 2005 were $2 million, or $0.01, as detailed in
Appendix Table A. Operational earnings in the first quarter of
2005 were $0.85 per share as compared to $0.33 per share in the
prior year period, a 158 percent increase. Excluding the effect of
lower average shares, the TXU Energy Holdings segment operational
earnings improved by $0.21 per share.
About the Company
TXU Corp., a Dallas-based energy company, manages a portfolio of
competitive and regulated energy businesses in North America,
primarily in Texas. In TXU Corp.'s unregulated business, TXU
Energy provides electricity and related services to 2.5 million
competitive electricity customers in Texas, more customers than
any other retail electric provider in the state. TXU Power has
over 18,300 megawatts of generation in Texas, including 2,300 MW
of nuclear and 5,837 MW of lignite/coal-fired generation capacity.
The company is also one of the largest purchasers of wind-
generated electricity in Texas and North America. TXU Corp.'s
regulated electric distribution and transmission business, TXU
Electric Delivery, complements the competitive operations, using
asset management skills developed over more than one hundred
years, to provide reliable electricity delivery to consumers. TXU
Electric Delivery operates the largest distribution and
transmission system in Texas, providing power to more than 2.9
million electric delivery points over more than 99,000 miles of
distribution and 14,000 miles of transmission lines. Visit
http://www.txucorp.com/for more information about TXU Corp.
* * *
As reported in the Troubled Company Reporter on Feb. 1, 2005,
TXU Corp. securities rated by Fitch Ratings remain unchanged
following the announcement that TXU reached a comprehensive
settlement agreement resolving potential claims relating to TXU
Europe. The ratings are:
-- Senior unsecured 'BBB-';
-- Preferred stock 'BB+';
-- Commercial paper 'F3'.
Under the terms of the settlement, TXU will make a $220 million
one-time payment to creditors. A charge of $220 million
($143 million after tax) will be taken for the fourth quarter of
2004, and TXU expects a portion of the payment to be recovered
from insurance proceeds. In Fitch's view, this loss will not
materially affect TXU's credit profile or liquidity. Additionally,
the possibility of this event was incorporated in current ratings.
UAL CORP: Eight Airline Unions Pledge Support for Mechanics
-----------------------------------------------------------
Union leaders representing mechanics at eight U.S. airlines
meeting in Chicago last week unanimously pledged the full
resources of their organization to support their colleagues at
United Airlines, "up to and including the right to strike."
Aircraft Mechanics Fraternal Association national officers and
leaders for AMFA local unions serving Alaska Airlines, ATA,
Horizon Airlines, Independence Airlines, Mesaba Airlines,
Northwest Airlines, Southwest Airlines and United Airlines vowed
to stand together "in the event that the United Airlines contract
is permanently changed without the approval of the AMFA
membership."
The AMFA leaders met this week in Chicago to make plans for a
pending strike against United Airlines. In January 2005, AMFA
members working for United overwhelmingly voted to authorize a
strike if permanent changes are made to the contract without the
approval of the membership. Bankruptcy Judge Eugene Wedoff has
imposed a temporary 9.8 percent pay cut and reduced sick leave
benefits for AMFA members, for the period February 1 through May
31, 2005, to give AMFA and United additional time to try to reach
a consensual contract agreement.
AMFA said United has not taken the negotiations seriously and has
added fuel to the fire by moving to terminate the mechanics'
pension plan and making itself eligible for up to 40 percent
bonuses while mechanics and other employees receive only five
percent under the company's new success-sharing plan.
According to AMFA National Director O.V. Delle-Femine, "United
says a strike is illegal. We obviously disagree with that
interpretation and are prepared to defend our right to strike. As
AMFA's national director, I am authorized to call for an immediate
nationwide strike against United if modifications are made to our
contract without the approval of the membership and have called
strikes three times before on behalf of AMFA's members. Without
aircraft technicians on duty, the airline cannot safely fly or
comply with federal regulations."
United is seeking to rewrite all its labor contracts to save costs
for the second time in its bankruptcy. After slashing labor costs
by $2.5 billion annually in 2003, including a 13 percent pay cut
for mechanics, the airline later said it needed another
$725 million in yearly reductions.
AMFA represents more aircraft technicians than any other union.
AMFA's credo is "Safety in the air begins with quality maintenance
on the ground." To learn more about AMFA, visit
http://www.amfanatl.org/
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.
ULTIMATE ELECTRONICS: Committee Taps Huron as Financial Advisors
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave the
Official Committee of Unsecured Creditors of Ultimate Electronics,
Inc., and its debtor-affiliates permission to employ Huron
Consulting Services, LLC, as its financial advisors.
Huron Consulting will:
a) review and analyze financial information prepared by the
Debtors, their accountants and other financial advisors, and
of proposed transactions for which the Debtors seek Court
approval;
b) monitor and analyze the Debtors' operations, their cash
expenditures, court filings, proposed retention programs,
business plans and projected cash requirements;
c) review and analyze the plan of reorganization proposed by
the Debtors and any other party, and assist in the
negotiation of a plan on behalf of the Committee;
d) review reports about the Debtors' business and their
operations, and analyze the Debtors' pre-petition property,
liabilities and financial condition, and the transfers to
accounts among the Debtor's affiliates; and
e) provide all other financial advisory services for the
Committee that is necessary in the Debtors' chapter 11
cases.
Bennet S. Gross, a Managing Director at Huron Consulting,
discloses that the Firm will be paid $75,000 per month.
Huron Consulting assures Judge Walsh that it does not represent
any interest materially adverse to the Committee, the Debtors or
their estates.
Headquartered in Thornton, Colorado, Ultimate Electronics, Inc.
-- http://www.ultimateelectronics.com/-- is a specialty retailer
of consumer electronics and home entertainment products located in
the Rocky Mountain, Midwest and Southwest regions of the United
States. The Company operates 65 stores and focuses on mid-to
high-end audio, video, television and mobile electronics products.
The Company and its debtor-affiliates filed for chapter 11
protection on January 11, 2005 (Bankr. D. Del. Case No. 05-10104).
J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represents the Debtors in their restructuring efforts. When
the Debtor filed for protection from its creditors, it listed
total assets of $329,106,000 and total debts of $160,590,000.
ULTIMATE ELECTRONICS: Sells Most Assets to CEO for $43,750,000
--------------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware approved Ultimate Electronics, Inc., and its
debtor-affiliates' request to sell 32 stores, free and clear of
all liens, claims, rights, interests and encumbrances to Ultimate
Acquisition Partners LP. Judge Walsh approved the sale
transaction on April 19, 2005.
The Debtors and Ultimate Acquisition entered into an Asset
Purchase Agreement on April 18, 2005, following an auction.
Ultimate Acquisition purchased the 32 stores for $43,750,000.
That sale agreement included the Debtors' agreement to assume and
assign appropriate executory contracts and leases to Ultimate
Acquisition.
The Debtors tell the Court that the terms of the Asset Purchase
Agreement were negotiated in good faith and that Ultimate
Acquisition is a good faith purchaser. Ultimate Acquisition is
controlled by the Debtors' CEO, Mark Wattles.
On April 8, 2005, the Court approved competitive bidding
procedures calling for the payment of a $6,375 Holdback Amount to
Ultimate Acquisition to be deducted from the purchase price of the
Debtors' assets if no competitor topped its bid. The Asset
Purchase Agreement did not have any provisions for the payment of
a Break-Up Fee and Reimbursement of Expenses to Ultimate
Acquisition in the event a higher bid came forward in an auction.
The Debtors held an auction on April 14 and 15, 2005.
The Debtors still has 30 store and will proceed with the
liquidation of assets from its remaining 30 stores over the next
60 to 90 days in accordance with the terms of an agency agreement.
The Company entered into a sixth amendment to its debtor-in-
possession financing facility that allowed the company to effect
the sale of assets to UAP and the liquidation of the remaining
stores.
The proceeds from the sale to UAP and the liquidation will be used
to satisfy claims of the company's secured lenders and unsecured
creditors of the company and its affiliates and subsidiaries. The
company says it cannot project at this point the extent of any
payment to its unsecured creditors as a result of these
transactions and any additional asset sales the company may
consummate in the future. The company does not believe that its
reorganization will result in any value for the holders of
the Company's common stock.
Headquartered in Thornton, Colorado, Ultimate Electronics, Inc.
-- http://www.ultimateelectronics.com/-- is a specialty retailer
of consumer electronics and home entertainment products located in
the Rocky Mountain, Midwest and Southwest regions of the United
States. The Company operates 65 stores and focuses on mid-to
high-end audio, video, television and mobile electronics products.
The Company and its debtor-affiliates filed for chapter 11
protection on January 11, 2005 (Bankr. D. Del. Case No. 05-10104).
J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represents the Debtors in their restructuring efforts. When
the Debtor filed for protection from its creditors, it listed
total assets of $329,106,000 and total debts of $160,590,000.
UNIFORET INC: Posts $100,000 Net Loss in Q1 & Changes Company Name
------------------------------------------------------------------
Uniforet Inc. reported a net loss of $100,000 for the first
quarter of 2005, compared to a net loss of $7.1 million for the
corresponding period in 2004. Net loss for the fourth quarter of
2004 had amounted to $1.7 million.
The significant decrease in net loss can be attributed to the rise
in the selling prices for lumber and to the takeover of pulp mill
operations by Katahdin. However, improvement in results was
checked by the appreciation of the Canadian dollar, which
eliminated $1.3 million from results for the first quarter of 2005
as compared to the corresponding period in 2004, and by increases
in the cost of raw materials.
In late March 2005, Quebec's Ministry of Natural Resources and
Wildlife stipulated that the forest management and supply
agreements for our two sawmills for the years 2005 to 2007 would
entitle us to a total of 1,485,272 cubic metres, compared to
1,760,000, which amounts to a decrease of 15.6%. The Company is in
the process of assessing its alternatives in order to minimize the
impact of these reductions on its future operating results.
The trade dispute with the US over imports of Canadian lumber to
the American market has not been resolved at this date. During the
first quarter of 2005, the Company had to pay out $2.2 million
($1.7 million US) in countervailing duties and anti-dumping
penalties, which affected its operating results by that amount for
the period and brings the total paid to $33.3 million ($24.0
million US) since those duties were first applied in May 2002.
Sales increased by 19.5% over the corresponding period in 2004 to
reach $42.9 million as compared to $35.9 million, the reason being
the substantial rise in selling prices for lumber and woodchips.
Operating earnings for the first quarter of 2005 totalled $2.7
million, compared to an operating loss of $3.5 million for the
corresponding quarter in 2004. Improvements in the selling prices
for lumber and woodchips and the takeover of pulp mill operations
by Katahdin were responsible for this important turnaround, which
was offset in part by a $15-per-mfbm increase in the unit costs of
sales primarily owing to higher raw material prices.
During the first quarter of 2005, net rental revenues from the
Port- Cartier pulp mill amounted to $0.5 million. Total
maintenance costs for the mill had totalled $1.7 million during
the first quarter of 2004, including an amount of $0.6 million now
presented as non-recurring items. The rest had been assumed by the
lumber sector to reflect operating cost for the biomass boiler and
electricity plant.
Cash generated before changes in non-cash operating working
capital totalled $3.0 million, compared to requirements of $3.4
million for the corresponding period in 2004, primarily because of
the improvement in operating earnings.
At March 31, 2005, bank overdraft stood at $17.5 million and the
Company's working capital amounted to $10.8 million for a ratio of
1.30:1, which compares to a ratio of 1.25:1 at December 31, 2004.
Going Concern Question
"There is doubt about the appropriateness of using the going
concern assumption," the Company says, because although it
completed a financial restructuring on October 3, 2003, and on
April 29, 2004, signed a final agreement to rent its Port-Cartier
pulp and cogeneration mill to a third party, "these improvements
cannot single-handely ensure that the company will remain a going
concern."
The trade dispute with the United States over imports of Canadian
softwood lumber on the U.S. market is still not resolved although
decisions in favour of the Canadian industry were made by the
North American Free Trade Agreement committee in early October
2004, the U.S. government announced its intention to challenge
them before a NAFTA Extraordinary Challenge Committee. Even if
leaders of the major Canadian and US lumber companies have
recently held discussions, there are few grounds for anticipating
a short-term settlement in this dispute.
The sharp appreciation of the Canadian dollar against the U.S.
dollar over the past two years has led to significant shortfalls
for Canadian export industries, seriously eroding their profits
and competitive position. Moreover, soaring energy costs in 2004
and in the first quarter of 2005 drove up the Company's delivery
and production costs, mainly in relation to raw materials and
processing costs. In late March 2005, Quebec's Ministry of Natural
Resources and Wildlife stipulated that the forest management and
supply agreements for our two sawmills for the years 2005 to 2007.
Reductions like these will inevitably entail negative financial
effects for lumber producers in Quebec as a whole.
The Company must provide for the semi-annual interest payments of
$4.2 million due in September 2005 and March 2006 and meet its
general operating cash flow requirements. In this context, the
Company will have to renew the current credit lines or obtain
additional capital funding from its shareholders during the next
fiscal year if the credit lines are not renewed or are
insufficient.
Management believes that the improvement in the Company's
operating results in recent quarters, will help mitigate the
adverse conditions that cast doubt on the appropriateness of the
going concern assumption used in preparing these financial
statements. However, there is no guarantee that the Company will
be able to generate sufficient cash flows and/or that additional
capital will ultimately be obtained to enable the Company to meet
its financial obligations until March 31, 2006.
Outlook
The lumber market exhibited signs of slowing down at the start of
the second quarter of 2005 caused by an excess of supply on the
market, but good selling prices for lumber are expected over the
coming months, with housing start statistics remaining at historic
highs even if, owing to higher interest rates in the US, they show
a reduction when compared with those of 2004. Leaders of the major
Canadian and US lumber companies have held discussions aimed at
resolving the lumber dispute. Lumber shipment volumes for the next
quarter should be slightly up over those of the first quarter of
fiscal 2005.
General Shareholders' Meeting
The special general meeting of the shareholders on May 5,
authorized the change of the Company's corporate name to Arbec
Forest Products Inc. That decision was part of the Company's wish
to project a new image further to the developments of the last few
years. The Company has reserved the new ticker abbreviation "ABR"
on the Toronto Stock Exchange.
Uniforet manufactures softwood lumber and owns a pulp mill now
rented by virtue of a long-term agreement. The Company carries on
business through mills located in Port-Cartier and in the
Peribonka area. Uniforet's Class A Subordinate Voting Shares are
listed on the Toronto Stock Exchange under the trading symbol
UNF.SV.A.
First Quarter 2005 vs. First Quarter 2004
Sales for the first quarter of 2005 increased by 19.5% to reach
$42.9 million, up from $35.9 million for the same period in 2004,
the reason being the substantial rise in selling prices for lumber
and woodchips. Lumber shipment volumes remained consistent at
65.2 million board feet.
Operating earnings for the first quarter of 2005 totalled
$2.7 million, compared to an operating loss of $3.5 million for
the corresponding quarter in 2004. Improvements in the selling
prices for lumber and woodchips and the takeover of pulp mill
operations by Katahdin were responsible for this important
turnaround, which was offset in part by a $15-per-mfbm increase in
the unit costs of sales primarily owing to higher raw material
prices.
Sales and administration costs for the first quarter of 2005 show
an increase of $0.2 million to total $1.7 million because of the
stock incentive plan charge and the increase in certain
professional fees. Fixed-asset depreciation costs (excluding pulp
mill depreciation) amount to $2.2 million for the first quarter of
2005, more or less the same level as for the corresponding period
in 2004.
During the first quarter of 2005, net rental revenues from the
Port- Cartier pulp mill amounted to $0.5 million; operations at
the mill were taken over by Katahdin on May 8, 2004. Fixed-asset
depreciation costs for this mill totalled $0.1 million for the
first quarter of 2005. Total maintenance costs for the mill had
totalled $1.7 million during the first quarter of 2004, including
an amount of $0.6 million now presented as non-recurring items.
The rest had been assumed by the lumber sector to reflect
operating cost for the biomass boiler and electricity plant.
Financial expenses for the first quarter of 2005 amounted to $3.2
million, up $0.3 million over those of the corresponding period in
2004. Interest on the Senior convertible note "B", payable since
September 15, 2004, is presented as interest on long-term debt,
whereas in 2004 it was recorded as accretion in the value of the
Senior convertible note "B". As provided by its long-term debt
agreements, the Company, on March 15, 2005, made a semi-annual
interest payment of $4.2 million.
Income taxes amounted to $44,000 in the first quarter of 2005,
compared to $64,000 for the corresponding period in 2004, and
comprise the taxes payable on the large corporations tax. No
future tax was recorded on the various deductible tax benefits for
the two periods concerned.
Net loss for the first quarter of 2005 amounted to $0.1 million
($0.002 per share), compared to a net loss of $7.1 million ($0.10
per share) for the corresponding period in 2004. Net loss for the
fourth quarter of 2004 had amounted to $1.7 million ($0.02 per
share).
Cash Flow and Financial Resources
Operations for the first quarter of fiscal 2005 generated
$3 million, compared to the $3.4 million required for the
corresponding period of 2004, principally because of the
improvement in operating earnings.
On the other hand, non-cash operating items required $4.3 million
during the first quarter of 2005, and this primarily because of
the increase in accounts receivable and decrease in accounts
payable and accruals, in addition to an increase in prepaid
expenses. Also, inventories were down by $3.4 million. During the
first quarter of 2004, non-cash operating items had required an
amount of $3.9 million, primarily because of increases in accounts
receivable and inventories.
During the first quarter of 2005, financing activities generated
net funds of $6.0 million stemming from recourse to lines of
credit in order to finance operations for the quarter and an
increase in long-term debt of a subsidiary of $2.9 million.
Repayments of long-term debt totalled $0.1 million during the
first quarter of 2005, compared to $0.3 million for the
corresponding period of 2004.
Expenditures during the first quarter of 2005 for additions to
fixed assets totalled $4.7 million, including an amount of $0.8
million for certain acquisitions made in 2004 and an amount of
$2.9 million for fixed assets acquisition by a subsidiary.
Investment activities in the corresponding period of 2004 had
required the net amount of $1.3 million.
At March 31, 2005, bank overdraft stood at $17.5 million and the
Company's working capital amounted to $10.8 million for a ratio of
1.30:1, compared to a ratio of 1.25:1 at December 31, 2004.
The Company must provide for semi-annual interest payments of $4.2
million that will fall due in September 2005 and in March 2006 and
for its normal need for the liquid assets that operations require.
In that context, the Company will once again have to rely on
renewal of its current lines of credit or on additional funding
from its shareholders during the coming quarter in case lines of
credit are not renewed or prove insufficient.
Review of Balance Sheet
On January 3, 2005, the Company acquired a 49.8% interest, for a
nominal consideration, in a newly-formed enterprise to boost the
productivity of its Port-Cartier forestry operations. This
subsidiary started its operations during the first quarter of 2005
and acquired fixed assets of an amount of $3.8 million and issued
long-term debt of an amount of $2.9 million. Moreover, the non-
controlling shareholders' interest in this subsidiary amounts to
$0.9 million as of March 31, 2005.
Current assets remained stable at $46.4 million at March 31, 2005.
Accounts receivable show an increase of $2.3 million owing to the
growth in sales. Inventories decreased by $3.4 million because of
the reduction in stocks of raw materials. Prepaid expenses rose by
$1.0 million because of municipal taxes and certain costs incurred
for logging operations that will be brought forward to future
logging seasons.
Fixed assets stood at $99.8 million at March 31, 2005, an increase
of $2.5 million compared with those at December 31, 2004.
Additions to fixed assets for the first quarter of 2005 totalled
$4.8 million, while an amount of $2.3 million was recorded in
amortization charges.
Current liabilities dropped by $1.5 million during the first
quarter of 2005. The line of credit grew by $3.2 million in order
to finance operations for the quarter. The accounts payable and
expenses due and accrued show a decrease of $5.1 million to total
$17.0 million at March 31, 2005, the principal reason being the
reduction in amounts due to forestry contractors following the
drop in raw material inventories, and in incurred interest on the
Senior convertible note "B".
Long-term debt grew by $3.6 million compared to its level of
December 2004 to total $94.1 million at March 31, 2005, owing to
accretion in the value of the Senior convertible note "B" and the
note payable to a shareholder and to long-term debt incurred by
the subsidiary. Repayment of long-term debt amounted to $0.1
million during the first quarter of 2005.
The Company's share capital consists of an unlimited number of
class "A" subordinate voting shares, class "B" and preferred
shares. The class "A" subordinate voting shares and class "B"
shares carry the same privileges, except that the latter comprise
10 votes per share compared to only one for the class "A"
subordinate voting shares. The preferred shares may be issued in
one or more series. The Senior convertible note "B" of an
aggregate principal amount of $40 million may be converted, at the
holder's discretion, into 80 million class "A" subordinate voting
shares.
Headquartered in Quebec, Canada, Uniforet Inc. is an integrated
forest products company that produces lumber (softwoods), uncoated
paper, and bleached pulp.
USGEN NEW ENGLAND: Files 2nd Amended Plan & Disclosure Statement
----------------------------------------------------------------
On May 2, 2005, USGen New England, Inc., delivered to the U.S.
Bankruptcy Court for the District of Maryland a supplement to its
Second Amended Plan of Liquidation consisting of several documents
relating to:
A. Bear Swamp Land Sale
The Plan Supplement includes the form of letter agreement
relating to the proposed sale of the Bear Swamp Land -- the land
in the Towns of Florida, Berkshire County, Charlemont, and Rowe,
Franklin County, in Massachusetts -- consisting of 201 acres of
land downriver of the Fife Brook Dam.
USGen intends to sell Bear Swamp Land for $1, provided that its
Plan of Liquidation include a global settlement of the adversary
proceeding among USGen, on one hand, and Bear Swamp Generating
Trust No. 1 LLC, Bear Swamp Generating Trust No. 2 LLC, Bear
Swamp I, LLC, Bear Swamp II, LLC, on the other hand, before the
delivery of a "Release Deed." However, if the Plan does not
include a global settlement, the Purchase Price will be
$2,000,000 cash.
A full-text copy of the proposed Bear Swamp Purchase Agreement is
available in two parts at no charge at:
http://bankrupt.com/misc/USGen_Bear_Swamp_Sale_Part1.pdf
http://bankrupt.com/misc/USGen_Bear_Swamp_Sale_Part2.pdf
B. Plan Administrator Agreement
USGen has retained William Runge as Plan administrator. Mr.
Runge will perform the rights, powers, and duties of USGen under
the Second Amended Plan as sole officer of the Debtor and subject
to the authority of USGen's Board of Directors.
Specifically, the powers of the Plan Administrator under the Plan
Administrator Agreement are:
(a) Exercising all power and authority that may be exercised,
and taking all proceedings and acts that may be taken, by
any officer of USGen, including activities consistent with
the Debtor's corporate purposes and the Plan; provided,
however, that the Plan Administrator will not amend
USGen's certificate of incorporation to change the
fundamental purpose of the corporation without approval of
National Energy & Gas Transmission, Inc., and the Board of
Directors;
(b) Managing the Distribution Fund, establishing reserves and
investing USGen's cash, including, but not limited to,
Cash held in the Reserves in:
(i) direct obligations of the United States of America
or obligations of any agency or instrumentality
thereof that is backed by the full faith and credit
of the United States, including funds consisting
solely or predominantly of those securities;
(ii) money market deposit accounts, checking accounts,
savings accounts or certificates of deposit, or
other time deposit accounts that are issued by a
commercial bank or savings institution organized
under the laws of the United States of America or
any state thereof; or
(iii) any other investments that may be permissible under
Section 345 of the Bankruptcy Code or any Bankruptcy
Court order entered in USGen's Chapter 11 case;
(c) Having signatory authority in respect of all of USGen's
deposit accounts, calculating and paying all Distributions
and Catch-Up Distributions, and making all Disputed Claims
Reserves to be made under the Plan, the Plan Administrator
Agreement, the other Plan Documents, the Confirmation
Order and other orders of the Bankruptcy Court to holders
of Allowed Claims;
(d) Employing, supervising and compensating from the
Administrative Reserve professionals retained to represent
the interests of and serve on behalf of USGen and the Plan
Administrator and compensating from the Administrative
Reserve the professionals retained by the Plan
Administrator and the Board of Directors;
(e) Making and filing tax returns for USGen;
(f) Objecting to Claims or Interests filed against USGen on
any basis;
(g) Seeking estimation of contingent or unliquidated Claims
under Section 502(c) of the Bankruptcy Code;
(h) Resolving any Disputed Claims filed against USGen;
(i) Seeking determination of tax liability under Section 505;
(j) Disposing of avoidance actions under Sections 544, 545,
547, 548, 549 and 553;
(k) Prosecuting turnover actions under Sections 542 and 543;
(l) Prosecuting, settling, dismissing or otherwise disposing
of causes of action;
(m) Closing USGen's Chapter 11 case;
(n) Operating the Debtor pursuant to the Plan, the Plan
Administrator Agreement, and the other Plan Documents;
(o) Exercising all powers and rights, and taking all actions,
contemplated by or provided for in the Plan Administrator
Agreement, including, without limitation, coordinating,
cooperating and reporting to the Board of Directors and
furnishing written reports to the Board of Directors as
set forth in the Agreement;
(p) Filing any necessary post-confirmation reports with the
Bankruptcy Court, paying quarterly fees pursuant to
28 U.S.C. Section 1930(a)(6) for USGen until the entry of
a final decree for the Debtor, and filing a final report,
if any, in accordance with applicable rules of the Federal
Rules of Bankruptcy Procedure prior to entry of a final
decree for the Debtor; and
(q) Taking any and all other actions necessary or appropriate
to implement and administer the Plan, the provisions of
the Plan Administrator Agreement, and the other Plan
Documents.
A full-text copy of the Plan Administrator Agreement draft is
available at no charge at:
http://bankrupt.com/misc/USGen_Plan_Administrator_Agreement.pdf
C. Identification of Plan-Related Positions
The Supplement identifies several individuals to fill key
positions in connection with the Second Amended Plan:
-- Members of the Board of Directors:
* Joseph Bondi,
* William Runge, and
* Emmett Bergman
-- Plan Administrator:
* William Runge
-- Disbursing Agent:
* The Wilmington Trust Company
Headquartered in Bethesda, Maryland, USGen New England, Inc., an
affiliate of PG&E Generating Energy Group, LLC, owns and operates
several electric generating facilities in New England and
purchases and sells electricity and other energy-related products
at wholesale. The Debtor filed for Chapter 11 protection on
July 8, 2003 (Bankr. D. Md. Case No. 03-30465). John E. Lucian,
Esq., Marc E. Richards, Esq., Edward J. LoBello, Esq., and Craig
A. Damast, Esq., at Blank Rome, LLP, represent the Debtor in its
restructuring efforts. When it sought chapter 11 protection, the
Debtor reported assets amounting to $2,337,446,332 and debts
amounting to $1,249,960,731. (PG&E National Bankruptcy News,
Issue No. 41; Bankruptcy Creditors' Service, Inc., 215/945-7000)
VISKASE COS.: Possible Sale Prompts S&P to Watch Ratings
--------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B-' corporate
credit and senior secured ratings on Viskase Cos. Inc. on
CreditWatch with positive implications. Willowbrook, Illinois-
based Viskase had about $100 million of total debt outstanding at
Dec. 31, 2004.
"The CreditWatch placement followed Viskase's announcement that
its Board of Directors has engaged Harris Williams Advisors to
evaluate strategic alternatives, which include a possible sale of
the company," said Standard & Poor's credit analyst Franco
DiMartino.
While the timing of a transaction or the identity of a potential
buyer was not revealed, interested parties could include a larger
strategic buyer in the packaging industry or a financial buyer.
An acquisition of Viskase by a strategic buyer with a stronger
credit profile could result in an upgrade. However, an
acquisition by a financial buyer would likely be financed with a
similarly aggressive debt structure to that which is currently on
the balance sheet, thus leading to an affirmation of the ratings.
Viskase, with annual sales of slightly more than $200 million, is
a leading global producer of non-edible cellulosic, fibrous, and
plastic casings used to prepare and package processed meat
products.
Standard & Poor's will continue to monitor developments and will
resolve the CreditWatch listing as more information is made
available.
VITAL LIVING: Auditors Raise Going Concern Doubts
-------------------------------------------------
Epstein Weber & Conover PLC audited Vital Living, Inc.'s financial
statements for the year ending December 31, 2004. Pointing to
recurring losses from operations, a working capital deficit, and
the company's dependency on funding sources from other than
operations, the auditors say there's substantial doubt about the
Company's ability to continue as a going concern.
Vital Living develops and markets nutritional fruit and vegetable
supplements, protein supplements, and nutraceuticals products.
Through a licensing agreement, the Company also has rights to use
a pharmaceutical delivery system known as "GEOMATRIX." Vital
Living's principal products currently are Greensfirst(R), Dream
Protein(R), and Complete Essentials(R). The company is
headquartered in Phoenix, Airzona, and hosts a Web site at
http://www.vitalliving.com/
At Dec. 31, 2004, the company's balance sheet showed $26.1 million
in assets. The company reported a $28.5 million net loss on $4.1
million of revenue in 2004.
WESTERN GOLDFIELDS: Auditors Raise Going Concern Doubts
-------------------------------------------------------
HJ & Associates, LLC, audited Western Goldfields, Inc.'s financial
statements for the year ending Dec. 31, 2004, and says there's
substantial doubt about the Company's ability to continue as a
going concern. The auditors point to significant losses from
operations, insufficient revenues to support operational cash
flows, and a working capital deficit.
At Dec. 31, 2004, the Western Goldfields' balance sheet showed
$17.3 million in assets. The company reported a $4.3 million loss
in 2004 on $10.8 million of gross revenues.
Western Goldfields, Inc. -- http://www.westerngoldfields.com/
acquired the Mesquite Gold Mine in southern California in 2003.
The mine produced approximately 3,000,000 ounces of gold from its
inception in 1986. Western Goldfields is focused on expanding
Mesquite within existing operation permits, exploring for
extensions of high-grade mineralization at depth, and optimizing
current production from the material already stacked on the heap
leach pads. The Company also holds exclusive exploration and
development rights to the Cahuilla gold project in Southern
California, as well as a portfolio of exploration properties in
Nevada and throughout the western United States.
WILD OATS: Names Robert Dimond SVP & Chief Financial Officer
------------------------------------------------------------
Wild Oats Markets, Inc. (Nasdaq: OATS) named Robert B. Dimond
Senior Vice President and Chief Financial Officer of the Company,
nunc pro tunc April 28, 2005. He succeeds Edward Dunlap, who has
served in the position since December 2001, and is now Senior Vice
President of Operations for Wild Oats.
Mr. Dimond brings more than 15 years of financial planning and
management experience in the food retail industry. Most recently
he was Executive Vice President and Chief Financial Officer for
Penn Traffic Company, one of the leading food retailers in the
eastern U.S. Mr. Dimond has also served as Executive Vice
President, Chief Financial Officer and Treasurer for the Nash
Finch Company, a Minneapolis-based food retail and distribution
company with $4 billion in annual sales. Prior to that, he was
Group Vice President and Chief Financial Officer for the Western
Region of the Kroger Company, one of the world's largest food
retailers. Mr. Dimond earned his Bachelor of Science degree in
accounting from the University of Utah and is a Certified Public
Accountant.
"With extensive food retail and financial management experience,
Bob is a great addition to the team at a time when the Company is
exiting its turnaround and entering a period of growth and
expansion," said Perry Odak, President and Chief Executive Officer
of Wild Oats. "Additionally, we thank Ed for his contributions as
CFO and look forward to his continued leadership over our
Company's store operations."
Internal Control
As of Jan. 1, 2005, the Company's management concluded that
material weaknesses existed in its internal control over financial
reporting. A material weakness is a control deficiency, or
combination of control deficiencies, that results in more than a
remote likelihood that a material misstatement of the annual or
interim financial statements may not be prevented or detected.
Management believes that the Company did not maintain effective
controls over the financial reporting process because of the facts
and circumstances that led to the two restatements of the
Company's financial statements relating to restructuring reserves
and lease accounting, and because the Company lacked a sufficient
complement of personnel with a level of technical accounting and
tax expertise that was commensurate with the Company's financial
reporting requirements. As a result of these material weaknesses
in the Company's internal control over financial reporting
management has concluded that, as of Jan. 1, 2005, the Company's
internal control over financial reporting was not effective.
Management's assessment of the effectiveness of the Company's
internal control over financial reporting as of Jan. 1, 2005, has
been audited by Ernst and Young LLP, the Company's independent
registered public accounting firm.
"To remediate this material weakness," the Company stated in its
Annual Report for the fiscal year ended Jan. 1, 2005, "we
developed controls to strengthen our ongoing compliance with
generally accepted accounting principles related to leasing
issues, as well as implemented additional review procedures over
the selection and monitoring of appropriate assumptions and
estimates affecting lease accounting practices. These controls
included:
-- reviews of all lease terms and the associated lives of
additions to the Company's capitalized assets and straight-
line calculations;
-- two independent and separate capital versus operating
analyses to validate the accounting treatment;
-- regular communication between the accounting and capital
asset groups to validate occupancy dates for accounting
purposes; and
-- reviews of every new or modified lease undertaken by two
people within the accounting function to ensure all
components were accounted for consistently and in accordance
with GAAP."
The Company has hired a tax consultant to ensure the deficiencies
related to taxes will be addressed going forward. The work of the
consultant will be reviewed and monitored by a member of the
finance department with knowledge of tax accounting matters.
The Company has also hired three additional Certified Public
Accountants into the accounting and finance departments to ensure
both the controls over financial reporting are operating
effectively as well as to ensure the Company's internal controls
continue to be appropriately assessed. The Company has ongoing
efforts to recruit and retain qualified personnel to staff the
Company's finance and accounting departments.
Financial Restatements
On Feb. 7, 2005, the Office of the Chief Accountant of the
Securities and Exchange Commission issued a letter to the American
Institute of Certified Public Accountants expressing its views
regarding certain lease accounting issues and their application
under generally accepted accounting principles in the United
States of America. In light of this letter, the Company's
management initiated a review of its lease accounting and
determined that its accounting for:
(1) amortization of leasehold improvements and leasehold
interests,
(2) straight-line rent expense,
(3) landlord incentives and allowances,
(4) sale leaseback transactions, and
(5) classification of leases as capital or operating in
accordance with FAS 13 were not consistent with GAAP.
As a result, the Company has restated its consolidated financial
statements for the fiscal years ended Dec. 27, 2003, and Dec. 28,
2002.
Additionally, the Company has determined that an error existed in
its unaudited quarterly results for the quarters ended June 29,
2003, and Dec. 27, 2003, as it relates to the accounting for
litigation and lease obligations for a closed location.
In accounting for the restructuring reserves for the quarter ended
June 28, 2003, the Company understated its charge to accrue for
the remaining lease obligation for a closed store site in Phoenix,
Arizona, in the amount of $500,000 due to the commingling of
litigation and lease-related reserves for this store in the
supporting reserve schedules. During the quarter ended Dec. 27,
2003, the Company recorded a charge to accrue for additional
litigation related restructuring reserves for this closed store
site, which was overstated by the $500,000 due to the commingling
of litigation and lease-related reserves. As a result of the
restatement, restructuring expense has been increased $500,000
($304,000 net of tax) for the quarter ended June 28, 2003, and
decreased $500,000 for the quarter ended December 27, 2003. This
restatement decreased earnings per share $0.01 in the quarter
ended June 28, 2003, and increased earnings per share by the same
in the quarter ended Dec. 27, 2003. There is no net income,
accrual or cash flow impact on fiscal year 2003 as a whole.
Default
Due to these financial restatements, the Company has violated
three of the financial covenants to its credit facility for the
period ended Jan. 1, 2005. The Company has obtained a waiver of
compliance from the requisite lenders under its credit facility.
Even if the Company was in compliance with its monetary covenants,
a technical default could result due to a breach of the financial
covenants. In the absence of a waiver or amendment to these
financial covenants, such non-compliance would constitute a
default under the credit agreement, and the lenders would be
entitled to accelerate the maturity of the indebtedness
outstanding thereunder. However, there can be no assurance that
future amendments or waivers will be obtained.
Credit Facility
On March 31, 2005, the Company entered into a five-year revolving
secured credit facility with Bank of America, N.A. The new credit
facility will allow borrowings and letters of credit up to a
maximum of $40 million, with an option to increase up to
$100 million, subject to a "borrowing base" determined by
inventory levels, credit card receivables, invested cash and
mortgaged leaseholds. The facility is secured by the Company's
assets including, but not limited to, cash, inventory and fixed
assets. Borrowings under the new credit facility bear interest,
at the Company's election, at LIBOR plus 1.25% or prime. The
applicable margin for LIBOR rate borrowings is variable, ranging
from 1.00%, based upon the availability calculation made in
accordance with the agreement. The Company is charged a 0.25%
commitment fee on the unused portion of the line. There are no
financial covenant requirements, except that the Company must
maintain minimum excess availability (as defined in the agreement)
at all times. The new credit facility also contains limitations
on incurring additional indebtedness, making additional
investments and permitting a change of control and cash management
provisions.
Wild Oats Markets, Inc. -- http://www.wildoats.com/-- is a
nationwide chain of natural and organic food markets in the U.S.
and Canada. With annual sales of more than $1 billion, the
company currently operates 111 stores in 24 states and British
Columbia. The Company's natural food stores include Wild Oats
Natural Marketplace, Henry's Farmers Market, Sun Harvest and
Capers Community Markets.
WINN-DIXIE: Section 341(a) Meeting Slated for May 25
----------------------------------------------------
The United States Trustee for Region 21 will convene a meeting of
Winn-Dixie Stores, Inc., and its debtor-affiliates' creditors at
10:00 a.m. Eastern Time, on May 25, 2005, at the Prime F. Osborn,
III Convention Center, 1000 Water Street, in Jacksonville,
Florida. This is the first meeting of creditors required under
11 U.S.C. Sec. 341(a) in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the 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 Jacksonville, Florida, Winn-Dixie Stores, Inc. --
http://www.winn-dixie.com/-- is one of the nation's largest food
retailers. The Company operates stores across the Southeastern
United States and in the Bahamas and employs approximately 90,000
people. The Company, along with 23 of its U.S. subsidiaries,
filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y.
Case No. 05-11063). The Honorable Judge Robert D. Drain ordered
the transfer of Winn-Dixie's chapter 11 cases from Manhattan to
Jacksonville. On April 14, 2005, Winn-Dixie and its debtor-
affiliates filed for chapter 11 protection in M.D. Florida (Case
No. 05-03817 to 05-03840). D.J. Baker, Esq., at Skadden Arps
Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and
Brian C. Walsh, Esq., at King & Spalding LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $2,235,557,000 in
total assets and $1,870,785,000 in total debts. (Winn-Dixie
Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
WINN-DIXIE: Wants to Reject 24 Grocery Store Leases
---------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek the
authority of the U.S. Bankruptcy Court for the Southern District
of New York to reject 24 nonresidential real property leases
effective as of the earlier of:
(a) the date on which the Debtors provide notice of
termination to the landlords party to the Leases and
tender possession of the premises to each landlord; and
(b) the date of entry of an order approving the rejection.
The Leases relate to certain grocery stores and other facilities
where the Debtors have ceased operations as part of prepetition
restructuring plans initiated in April 2004 and earlier. The
Debtors currently derive no benefit from these Leases:
Store
No. Leased Property Location Landlord
------ ------------------------ --------
559 Highway 90 & Lloyd Street Sun West N.C. III Partners
Crestview, FL 32536 Limited Partnership
625 4536 Highway 70 August Urbanek Ivest.
Bradenton, FL 34203
817 5531 Carolina Beach Road Downtown Two, LLC
Wilmington, NC 28401
826 2509 N. Heritage Street Heritage Crossing
Kinston, NC 28501 Associates, LP
886 813 E Boulevard Roanote Landing Limited
Williamston, NC 27892 Partnership
942-BL 12450 Gayton Road DPJ Company Limited
Richmond, VA 23233
942-GL 12450 Gayton Road DPJ Company Limited
Richmond, VA 23233
950 351 North College Drive W.D. of Virginia, Inc.
Franklin, VA 23851
959 5260 Oaklawn Boulevard George D. Zamias
Hopewell, VA 23860
963 4920 Greensboro Road Sheffield Estates, Inc.
Ridgeway, VA 24148
983 1255 Franklin Street W-D Rocky Mount, VA
Rocky Mount, VA 24151 Partners, LLC
1611 1651 Paris Pike Assigned to Malone and Hyde
Georgetown, KY 40324
1704 1065 Reading Road Mason Shopping Center
Mason, OH 45040 Partnership
1758 1535 West Galbraith Road Wiedemann Square, LLC
Cincinnati, OH 45231
1764 2220 Waycross Road Civic Center Station, Ltd.
Cincinnati, OH 45240
1776 1967 Dixie Highway Tappen Properties LP
Ft. Wright, KY 41011
2109 3901 N Kings Highway Sam Development Associates
Myrtle Beach, SC 29577 LLC
2115 124 S Cashua Drive Florence Marketplace
Florence, SC 29501 Investors, LLC
2116 1611 S. Irby Street Carolina Enterprises, Inc.
Florence, SC 29505
2124-BL Highway 501 16th Ave CCP Employee Profit
Conway, SC 29526 Sharing Plan
2124-GL Highway 501 16th Ave CCP Employee Profit
Conway, SC 29526 Sharing Plan
2146 139 Westfield Drive Hazel Park Associates
Hartsville, SC 29550
2537 944 East State Road 436 Casselsquare LLC
Casselberry, FL 32730
9093 210 Century Drive Zurich Structured Finance
Bartow, FL 33830
As part of their restructuring plans, the Debtors sought to sell,
sublet, negotiate buyouts with landlords, or otherwise reduce or
eliminate their liability under the Leases. However, after
marketing the Leases, the Debtors determined that they were
unable to do so. Accordingly, with respect to the stores or
other facilities that are the subject of the Leases, the Debtors
continued to pay the monthly rent required by the Leases.
Because they no longer occupy the Dark Facilities, have
previously marketed the Leases for the Dark Facilities, and are
continuing to pay rent and other charges under the Leases, the
Debtors have concluded that the Leases:
-- constitute a burden on their estates;
-- are not necessary for an effective reorganization; and
-- should be rejected as of the Effective Date.
The Debtors contend that rejecting the Leases will save their
estates $591,000 per month in administrative expenses, including
rent, taxes, insurance premiums and other charges.
To the extent any personal property remains in the Dark
Facilities, the Debtors assert, it is of little or no value to
their estates. Accordingly, the Debtors ask the Court to deem
any interest of any of the Debtors in any personal property
abandoned pursuant to Section 554(a) of the Bankruptcy Code, as
of the Effective Date.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. --
http://www.winn-dixie.com/-- is one of the nation's largest food
retailers. The Company operates stores across the Southeastern
United States and in the Bahamas and employs approximately 90,000
people. The Company, along with 23 of its U.S. subsidiaries,
filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y.
Case No. 05-11063). The Honorable Judge Robert D. Drain ordered
the transfer of Winn-Dixie's chapter 11 cases from Manhattan to
Jacksonville. On April 14, 2005, Winn-Dixie and its debtor-
affiliates filed for chapter 11 protection in M.D. Florida (Case
No. 05-03817 to 05-03840). D.J. Baker, Esq., at Skadden Arps
Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and
Brian C. Walsh, Esq., at King & Spalding LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $2,235,557,000 in
total assets and $1,870,785,000 in total debts. (Winn-Dixie
Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
WINN-DIXIE: Wants to Sell Aircraft to Studio City Aviation
----------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek the
authority of the U.S. Bankruptcy Court for the Southern District
of New York to:
(a) sell a 2002 Gulfstream G-200 aircraft and related
equipment to Studio City Aviation 04, LLC, or to the party
submitting a higher or otherwise better offer, if any,
free and clear of liens, claims, interests and
encumbrances; and
(b) pay a brokerage fee to Bloomer deVere Group Avia, Inc., in
connection with the sale.
Te Airplane is presently situated in Jacksonville, Florida, at
the Jacksonville International Airport. The Airplane is equipped
with two Pratt & Whitney Engines. The Debtors seek to sell the
Airplane and the Engines as well as the appliances, parts,
instruments, appurtenances, accessories, furnishings and other
equipment or property installed on or attached to the Airplane
and Engines, including all books, manuals, logbooks, maintenance
records and other data.
Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in
Jacksonville, Florida, relates that the Debtors have engaged in
extensive marketing efforts for the sale.
To assist with their marketing efforts, as well as to market and
sell a second airplane, the Debtors employed Bloomer deVere Group
Avia, Inc., on October 8, 2004. deVere is considered one of the
preeminent brokers in the airplane industry. deVere's extensive
marketing and sale efforts culminated in seven offers for the
Assets. After reviewing all offers, the Debtors determined that
Studio City's bid was the highest and best offer.
On April 29, 2005, the Debtors and Studio City entered into an
Aircraft Purchase and Sale Agreement, pursuant to which, the
aggregate purchase price for the Assets will be $15,350,000.
Studio City is required to pay a $500,000 deposit prior to
execution of the Purchase Agreement. The remainder of the
Purchase Price is to be paid on or before the Delivery Date.
The Debtors now seek to consummate the sale with Studio City, or,
alternatively, to the party submitting a higher or otherwise
better offer. Notwithstanding that the Assets have been
sufficiently marketed, the Debtors are soliciting higher and
better bids for the Assets. Any person or entity interested in
submitting a higher or otherwise better bid for the Assets must
submit a bid by May 15, 2005, at 4:00 p.m. (prevailing Eastern
Time).
Broker's Fee
Pursuant to a Brokerage Agreement, deVere is entitled to 0.75% of
the purchaser price up to $15,000,000. Furthermore, deVere is
entitled to 5% of any amounts realized over $15,000,000. Since
the Purchaser Price is $15,350,000, the Debtors will pay deVere
$130,500.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. --
http://www.winn-dixie.com/-- is one of the nation's largest food
retailers. The Company operates stores across the Southeastern
United States and in the Bahamas and employs approximately 90,000
people. The Company, along with 23 of its U.S. subsidiaries,
filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y.
Case No. 05-11063). The Honorable Judge Robert D. Drain ordered
the transfer of Winn-Dixie's chapter 11 cases from Manhattan to
Jacksonville. On April 14, 2005, Winn-Dixie and its debtor-
affiliates filed for chapter 11 protection in M.D. Florida (Case
No. 05-03817 to 05-03840). D.J. Baker, Esq., at Skadden Arps
Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and
Brian C. Walsh, Esq., at King & Spalding LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $2,235,557,000 in
total assets and $1,870,785,000 in total debts. (Winn-Dixie
Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
WORLDCOM INC: Settles Dispute Over Federal Insurance's Claims
-------------------------------------------------------------
Prior to filing for chapter 11 protection, WorldCom, Inc. and its
debtor-affiliates entered into various contracts or provider
agreements with certain third parties. To collateralize their
obligations due and owing the Obligees, the Debtors were required
to obtain surety bonds.
Federal Insurance Company issued a number of surety bonds on
behalf of certain of the Debtors to guarantee and collateralize
the obligations of those Debtors due and owing pursuant to the
various agreements between the Bonded Debtors and the Obligees.
To secure the Bonded Debtors' performance under the Bonds,
Worldcom, Inc., individually and on behalf of its direct and
indirect subsidiaries and affiliates, including the Bonded
Debtors, executed and delivered to Federal Insurance a certain
General Agreement of Indemnity dated March 6, 2001.
Pursuant to the Indemnity Agreement, Worldcom agreed to indemnify
Federal Insurance from all loss, cost and expense in connection
with any bond of any WorldCom subsidiary for which Federal
Insurance may be or becomes a surety.
As of the Petition Date, Federal Insurance, as surety to the
Bonded Debtors, made certain payments on the Debtors' behalf,
thereby satisfying its obligations under the Bonds at issue.
Subsequent to the Petition Date, Federal Insurance timely filed
proofs of claim including:
-- the contingent, unliquidated maximum penal amount under
each Bond, plus any attorneys' fees and costs; and
-- the liquidated amount for costs and expenses, including
attorneys' fees, which Federal Insurance had incurred in
connection with the Bonds as of the Petition Date.
Federal Insurance also timely filed Claim No. 16038 against
Worldcom for its obligations due and owing under the Indemnity
Agreement, which included a liquidated portion representing loss
payments, costs and expenses incurred with respect to certain of
the Bonds.
Subsequent to the Effective Date, the Reorganized Debtors asked
the United States Bankruptcy Court for the Southern District of
New York to expunge Federal Insurance's Claims.
The parties wish to resolve the issues and claims without the cost
and expense of further litigation. In a Court-approved
stipulation, the Reorganized Debtors and Federal Insurance agree
that:
(a) Claim No. 16079 will be allowed as a Class 12 General
Unsecured Claim for $164,360 against the Intermedia
Debtors;
(b) Five Claims will be allowed as Class 6 General Unsecured
Claims against the MCI Debtors in these amounts:
Claim No. Claim Amount
--------- ------------
16038 $500,000
16041 222,742
16053 41,054
16088 167,5867
26498 65,711
(c) Federal Insurance will be entitled to receive
distributions on account of the Allowed Claims; and
(d) The Stipulation settles all Federal Insurance's Claims
against the Debtors. All of the remaining claims will be
deemed automatically expunged and disallowed. The entry
of the Stipulation will be sufficient to allow the
Remaining Claims to be removed from the claims register
maintained in the Debtors' cases.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on
October 31, 2003, and on April 20, 2004, the company formally
emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom
Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
YUKOS OIL: Gets Court Nod to Disburse $384,967 from Court Registry
------------------------------------------------------------------
As previously reported, the United States Bankruptcy Court for the
Southern District of Texas authorized Yukos to deposit $21 million
of its money into the Court registry. The Registry Order provides
that "any withdrawal or payment of funds from the Registry of
Court may only be made pursuant to an Order of this Court."
Against this backdrop, Yukos asks the United States Bankruptcy
Court for the Southern District of Texas to authorize payments
totaling $741,955, to be made out of the funds held in the Court
Registry on Yukos' behalf.
* * *
Judge Clark authorizes and directs the Clerk of the Court to issue
checks out of the registry of the United States Bankruptcy Court
for the Southern District of Texas to these payees:
Nature of
Payee Expenditure Amount Necessity of Payment
----- ----------- ------ --------------------
Office of U.S. Trustee $20,000 Revised from the U.S.
the U.S. Quarterly Fees Trustee related to the
Trustee for the 4th period from 4th
Quarter of Quarter of 2004 and
2004 and 1st 1st Quarter of 2005
Quarter of
2005
Expert's Thomas Walde 109,587 Expert witness fees
Fees David Anderson 138,412 incurred in litigation
Peter Maggs 49,307 involving Motion to
Barry E. Carter 67,661 Dismiss.
--------
TOTAL $384,967
========
Headquartered in Houston, Texas, Yukos Oil Company is an open
joint stock company existing under the laws of the Russian
Federation. Yukos is involved in the energy industry
substantially through its ownership of its various subsidiaries,
which own or are otherwise entitled to enjoy certain rights to oil
and gas production, refining and marketing assets. The Company
filed for chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex.
Case No. 04-47742). Zack A. Clement, Esq., C. Mark Baker, Esq.,
Evelyn H. Biery, Esq., John A. Barrett, Esq., Johnathan C. Bolton,
Esq., R. Andrew Black, Esq., Fulbright & Jaworski, LLP, represent
the Debtor in its restructuring efforts. When the Debtor filed
for protection from its creditors, it listed $12,276,000,000 in
total assets and $30,790,000,000 in total debts. (Yukos
Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
* BOND PRICING: For the week of May 2 - May 6, 2005
---------------------------------------------------
Issuer Coupon Maturity Price
------ ------ -------- -----
AAIPharma Inc. 11.000% 04/01/10 40
ABC Rail Product 10.500% 01/15/04 0
Adelphia Comm. 3.250% 05/01/21 6
Adelphia Comm. 6.000% 02/15/06 5
Advanced Access 10.750% 06/15/11 72
Aetna Industries 11.875% 10/01/06 7
Allegiance Tel. 11.750% 02/15/08 25
Allegiance Tel. 12.875% 05/15/08 31
Allied Holdings 8.625% 10/01/07 55
Amer. & Foreign Power 5.000% 03/01/30 74
Amer. Color Graph. 10.000% 06/15/10 64
Amer. Plumbing 11.625% 10/15/08 14
Amer. Restaurant 11.500% 11/01/06 62
Amer. Tissue Inc. 12.500% 07/15/06 62
American Airline 7.377% 05/23/19 66
American Airline 7.379% 05/23/16 65
American Airline 8.839% 01/02/17 74
American Airline 8.800% 09/16/15 74
American Airline 9.070% 03/11/16 72
American Airline 10.180% 01/02/13 69
American Airline 10.600% 03/04/09 66
American Airline 10.610% 03/04/11 67
American Airline 10.680% 03/04/13 65
AMR Corp. 4.500% 02/15/24 71
AMR Corp. 9.200% 01/30/12 70
AMR Corp. 9.750% 08/15/21 62
AMR Corp. 9.800% 10/01/21 67
AMR Corp. 9.880% 06/15/20 63
AMR Corp. 10.000% 04/15/21 65
AMR Corp. 10.125% 06/01/21 68
AMR Corp. 10.150% 05/15/20 60
AMR Corp. 10.200% 03/15/20 62
AMR Corp. 10.290% 03/08/21 63
AMR Corp. 10.450% 11/15/11 63
Anadigics 5.000% 10/15/09 69
Apple South Inc. 9.750% 06/01/06 20
AT Home Corp. 0.525% 12/28/18 14
AT Home Corp. 4.750% 12/15/06 5
ATA Holdings 12.125% 06/15/10 45
ATA Holdings 13.000% 02/01/09 45
Atlantic Coast 6.000% 02/15/34 16
Atlas Air Inc. 9.702% 01/02/08 51
B&G Foods Holding 12.000% 10/30/16 8
Bank New England 8.750% 04/01/99 9
Bank New England 9.500% 02/15/96 8
Bearingpoint Inc. 2.500% 12/15/24 74
Bearingpoint Inc. 2.750% 12/15/24 74
Bethlehem Steel 10.375% 09/01/03 0
Broadband Tech. 5.000% 05/15/01 0
Budget Group Inc. 9.125% 04/01/06 0
Burlington Northern 3.200% 01/01/45 60
Calpine Corp. 4.000% 12/26/06 73
Calpine Corp. 4.750% 11/15/23 56
Calpine Corp. 7.750% 04/15/09 61
Calpine Corp. 7.875% 04/01/08 63
Calpine Corp. 8.500% 07/15/10 73
Calpine Corp. 8.500% 02/15/11 58
Calpine Corp. 8.625% 08/15/10 61
Calpine Corp. 8.750% 07/15/07 66
Calpine Corp. 8.750% 07/15/13 72
Calpine Corp. 9.875% 12/01/11 74
Charter Comm Hld. 8.625% 04/01/09 73
Charter Comm Hld. 9.625% 11/15/09 73
Charter Comm Hld. 10.000% 05/15/11 71
Charter Comm Hld. 10.250% 01/15/10 74
Charter Comm Hld. 11.125% 01/15/11 73
Chic East ILL RR 5.000% 01/01/54 55
Coeur D'Alene 1.250% 01/15/24 70
Collins & Aikman 10.750% 12/31/11 74
Color Tile Inc. 10.750% 12/15/01 0
Comcast Corp. 2.000% 10/15/29 43
Comdisco Inc. 7.230% 08/16/01 0
Comprehens Care 7.500% 04/15/10 0
Cone Mills Corp. 8.125% 03/15/05 10
Continental Airlines 8.312% 04/02/11 72
Covad Communication 3.000% 03/15/24 73
Cray Research 6.125% 02/01/11 61
Curagen Corp. 4.000% 02/15/11 55
Delta Air Lines 2.875% 02/18/24 49
Delta Air Lines 7.299% 09/18/06 56
Delta Air Lines 7.711% 09/18/11 60
Delta Air Lines 7.779% 01/02/12 48
Delta Air Lines 7.900% 12/15/09 34
Delta Air Lines 7.920% 11/18/10 44
Delta Air Lines 8.000% 06/03/23 35
Delta Air Lines 8.270% 09/23/07 70
Delta Air Lines 8.300% 12/15/29 27
Delta Air Lines 8.540% 01/02/07 32
Delta Air Lines 8.540% 01/02/07 45
Delta Air Lines 8.950% 01/12/12 61
Delta Air Lines 9.000% 05/15/16 29
Delta Air Lines 9.200% 09/23/14 42
Delta Air Lines 9.250% 03/15/22 25
Delta Air Lines 9.300% 01/02/10 68
Delta Air Lines 9.300% 01/02/10 63
Delta Air Lines 9.375% 09/11/07 66
Delta Air Lines 9.750% 05/15/21 27
Delta Air Lines 9.875% 04/30/08 73
Delta Air Lines 10.000% 08/15/08 37
Delta Air Lines 10.000% 06/01/10 36
Delta Air Lines 10.060% 01/02/16 50
Delta Air Lines 10.125% 05/15/10 33
Delta Air Lines 10.140% 08/26/12 50
Delta Air Lines 10.375% 02/01/11 35
Delta Air Lines 10.375% 12/15/22 27
Delta Air Lines 10.500% 04/30/16 45
Delta Air Lines 10.790% 03/26/14 28
Delta Air Lines 10.790% 03/26/14 37
Delphi Auto System 7.125% 05/01/29 70
Delphi Corp. 6.500% 08/15/13 74
Delphi Trust II 6.197% 11/15/33 43
Diva Systems 12.625% 03/01/08 1
Dura Operating 9.000% 05/01/09 71
Duty Free Int'l 7.000% 01/15/04 25
DVI Inc. 9.875% 02/01/04 9
E. Spire Comm Inc. 10.625% 07/01/08 0
E. Spire Comm Inc. 12.750% 04/01/06 0
E. Spire Comm Inc. 13.000% 11/01/05 0
Eagle-Picher Inc. 9.750% 09/01/13 62
Eagle Food Center 11.000% 04/15/05 3
Edison Brothers 11.000% 09/26/07 0
Encompass Service 10.500% 05/01/09 0
Enron Corp. 6.400% 07/15/06 32
Enron Corp. 6.500% 08/01/02 33
Enron Corp. 6.625% 10/15/03 33
Enron Corp. 6.625% 11/15/05 33
Enron Corp. 6.725% 11/17/08 33
Enron Corp. 6.750% 09/01/04 29
Enron Corp. 6.750% 09/15/04 30
Enron Corp. 6.750% 07/01/05 0
Enron Corp. 6.750% 08/01/09 30
Enron Corp. 6.875% 10/15/07 32
Enron Corp. 6.950% 07/15/28 30
Enron Corp. 6.950% 07/15/28 33
Enron Corp. 7.000% 08/15/23 33
Enron Corp. 7.125% 05/15/07 34
Enron Corp. 7.375% 05/15/19 33
Enron Corp. 7.625% 09/10/04 29
Enron Corp. 7.875% 06/15/03 34
Enron Corp. 8.375% 05/23/05 33
Enron Corp. 9.125% 04/01/03 33
Enron Corp. 9.875% 06/15/03 11
Epic Resorts LLC 13.000% 06/15/05 2
Evergreen Intl. Avi. 12.000% 05/15/10 73
Exodus Comm. Inc. 10.750% 12/15/09 0
Exodus Comm. Inc. 11.625% 07/15/10 0
Falcon Products 11.375% 06/15/09 42
Fedders North Am. 9.875% 03/01/14 69
Federal-Mogul Co. 7.375% 01/15/06 25
Federal-Mogul Co. 7.500% 01/15/09 25
Federal-Mogul Co. 8.120% 03/06/03 28
Federal-Mogul Co. 8.160% 03/06/03 28
Federal-Mogul Co. 8.250% 03/03/05 28
Federal-Mogul Co. 8.370% 11/15/01 28
Federal-Mogul Co. 8.370% 11/15/01 24
Federal-Mogul Co. 8.460% 10/27/02 28
Federal-Mogul Co. 8.800% 04/15/07 24
Fibermark Inc. 10.750% 04/15/11 72
Finova Group 7.500% 11/15/09 43
Firstworld Comm 13.000% 04/15/08 1
Fleming Cos. Inc. 10.125% 04/01/08 6
Flooring America 9.250% 10/15/07 0
Foamex L.P. 9.875% 06/15/07 55
Ford Motor Co 7.400% 11/01/46 75
Ford Motor Credit 5.900% 02/20/14 75
Fruit of the Loom 8.875% 04/15/06 0
General Motors 7.400% 09/01/25 73
GMAC 5.250% 01/15/14 72
GMAC 5.350% 01/15/14 72
GMAC 5.700% 12/15/13 74
GMAC 5.900% 01/15/19 74
GMAC 5.900% 01/15/19 71
GMAC 5.900% 02/15/19 70
GMAC 5.900% 10/15/19 68
GMAC 6.000% 02/15/19 74
GMAC 6.000% 02/15/19 69
GMAC 6.000% 02/15/19 72
GMAC 6.000% 03/15/19 68
GMAC 6.000% 03/15/19 71
GMAC 6.000% 03/15/19 72
GMAC 6.000% 03/15/19 71
GMAC 6.000% 03/15/19 73
GMAC 6.000% 04/15/19 71
GMAC 6.000% 09/15/19 72
GMAC 6.000% 09/15/19 71
GMAC 6.050% 08/15/19 72
GMAC 6.050% 08/15/19 71
GMAC 6.050% 10/15/19 68
GMAC 6.100% 09/15/19 71
GMAC 6.125% 10/15/19 69
GMAC 6.150% 08/15/19 72
GMAC 6.150% 09/15/19 73
GMAC 6.150% 10/15/19 73
GMAC 6.200% 04/15/19 71
GMAC 6.250% 01/15/18 73
GMAC 6.250% 04/15/19 71
GMAC 6.250% 05/15/19 74
GMAC 6.250% 07/15/19 74
GMAC 6.300% 08/15/19 71
GMAC 6.350% 04/15/19 70
GMAC 6.350% 07/15/19 74
GMAC 6.400% 12/15/18 72
GMAC 6.400% 11/15/19 71
GMAC 6.400% 11/15/19 71
GMAC 6.500% 06/15/18 72
GMAC 6.500% 11/15/18 71
GMAC 6.500% 05/15/19 72
GMAC 6.500% 02/15/20 74
GMAC 6.550% 12/15/19 75
GMAC 6.600% 06/15/19 74
GMAC 6.650% 10/15/18 73
GMAC 6.650% 02/15/20 74
GMAC 6.700% 06/15/18 74
GMAC 6.750% 03/15/18 74
GMAC 6.750% 05/15/19 74
GMAC 6.800% 09/15/18 75
GMAC 7.000% 02/15/21 73
GMAC 7.000% 09/15/21 72
GMAC 7.000% 06/15/22 74
GMAC 7.000% 11/15/24 70
GMAC 7.000% 11/15/24 72
GMAC 7.150% 01/15/25 74
GMAC 7.250% 03/15/25 72
Golden Books Pub 10.750% 12/31/04 1
Golden Northwest 12.000% 12/15/06 10
Graftech Int'l 1.625% 01/15/24 66
GST Network Funding 10.500% 05/01/08 0
Guilford Pharma 5.000% 07/01/08 74
Gulf States STL 13.500% 04/15/03 0
HNG Internorth. 9.625% 03/15/06 31
Icon Health & Fit 11.250% 04/01/12 71
Icos Corp. 2.000% 07/01/23 74
Idine Rewards 3.250% 10/15/23 75
Imperial Credit 9.875% 01/15/07 0
Imperial Credit 12.000% 06/30/05 0
Impsat Fiber 6.000% 03/15/11 74
Inland Fiber 9.625% 11/15/07 50
Intermet Corp. 9.750% 06/15/09 52
Intermune Inc. 0.250% 03/01/11 69
Iridium LLC/CAP 10.875% 07/15/05 16
Iridium LLC/CAP 11.250% 07/15/05 16
Iridium LLC/CAP 13.000% 07/15/05 15
Iridium LLC/CAP 14.000% 07/15/05 13
Isis Pharmaceutical 5.500% 05/01/09 75
Kaiser Aluminum & Chem. 12.750% 02/01/03 11
Key Plastics 10.250% 03/15/07 1
Kmart Corp. 6.000% 01/01/08 23
Kmart Corp. 8.990% 07/05/10 70
Kmart Corp. 9.350% 01/02/20 25
Kmart Funding 8.800% 07/01/10 75
Kmart Funding 9.440% 07/01/18 40
Kulicke & Soffa 0.500% 11/30/08 70
Lehman Bros. Holding 6.000% 05/25/05 62
Lehman Bros. Holding 7.500% 09/03/05 48
Level 3 Comm. Inc. 2.875% 07/15/10 43
Level 3 Comm. Inc. 6.000% 09/15/09 48
Level 3 Comm. Inc. 6.000% 03/15/10 43
Liberty Media 3.500% 01/15/31 74
Liberty Media 3.750% 02/15/30 61
Liberty Media 4.000% 11/15/29 64
Loral Cyberstar 10.000% 07/15/06 74
Lukens Inc. 7.625% 08/01/04 0
LTV Corp. 8.200% 09/15/07 0
MacSaver Financial 7.875% 08/01/03 5
Metaldyne Corp. 11.000% 06/15/12 73
Metamor Worldwide 2.940% 08/15/04 1
Mirant Corp. 2.500% 06/15/21 74
Mississippi Chem. 7.250% 11/15/17 4
Molten Metal Tec 5.500% 05/01/06 0
Muzak LLC 9.875% 03/15/09 52
New Orl Grt N RR 5.000% 07/01/32 74
NGC Copr. 7.625% 10/15/26 73
North Atl Trading 9.250% 03/01/12 72
Northern Pacific Railway 3.000% 01/01/47 61
Northpoint Comm. 12.875% 02/15/10 1
Northwest Airlines 7.875% 03/15/08 47
Northwest Airlines 8.070% 01/02/15 54
Northwest Airlines 8.130% 02/01/14 51
Northwest Airlines 8.700% 03/15/07 61
Northwest Airlines 9.875% 03/15/07 62
Northwest Airlines 10.000% 02/01/09 49
Northwest Steel & Wir. 9.500% 06/15/01 0
Nutritional Src. 10.125% 08/01/09 74
Oakwood Homes 7.875% 03/01/04 30
Oakwood Homes 8.125% 03/01/09 25
Oscient Pharm 3.500% 04/15/11 74
O'Sullivan Ind. 13.375% 10/15/09 40
Orion Network 12.500% 01/15/07 54
Outboard Marine 9.125% 04/15/17 1
Owens Corning Fiber 8.875% 06/01/02 75
Owens Corning Fiber 9.375% 06/01/12 65
Pegasus Satellite 9.625% 10/15/05 58
Pegasus Satellite 9.750% 12/01/06 60
Pegasus Satellite 12.375% 08/01/06 56
Pegasus Satellite 12.500% 08/01/07 58
Pegasus Satellite 13.500% 03/01/07 0
Pen Holdings Inc. 9.875% 06/15/08 64
Penn Traffic Co. 11.000% 06/29/09 46
Piedmont Aviat 9.900% 11/08/06 8
Piedmont Aviat 10.000% 11/08/12 0
Piedmont Aviat 10.250% 01/15/07 23
Piedmont Aviat 10.350% 03/28/12 0
Pixelworks Inc. 1.750% 05/15/24 65
Polaroid Corp. 6.750% 01/15/02 0
Polaroid Corp. 7.250% 01/15/07 0
Polaroid Corp. 11.500% 02/15/06 0
Portola Packaging 8.250% 02/01/12 67
Primedex Health 11.500% 06/30/08 44
Primus Telecom 3.750% 09/15/10 26
Primus Telecom 5.750% 02/15/07 36
Primus Telecom 8.000% 01/15/14 47
Primus Telecom 12.750% 10/15/09 47
Psinet Inc 10.000% 02/15/05 0
Psinet Inc 11.500% 11/01/08 0
Railworks Corp. 11.500% 04/15/09 0
Radnor Holdings 11.000% 03/15/10 72
Read-Rite Corp. 6.500% 09/01/04 56
Reliance Group Holdings 9.000% 11/15/00 28
Reliance Group Holdings 9.750% 11/15/03 2
RJ Tower Corp. 12.000% 06/01/13 54
Safety-Kleen Corp. 9.250% 06/01/08 0
Salton Inc. 10.750% 12/15/05 60
Salton Inc. 12.250% 04/15/08 49
Scotia Pac Co. 7.110% 01/20/14 72
Solectron Corp. 0.500% 02/15/34 65
Specialty Paperb. 9.375% 10/15/06 70
Startec Global 12.000% 05/15/08 0
Syratech Corp. 11.000% 04/15/07 35
Tops Appliance 6.500% 11/30/03 0
Tower Automotive 5.750% 05/15/24 20
Triton PCS Inc. 8.750% 11/15/11 61
Triton PCS Inc. 9.375% 02/01/11 61
Tropical SportsW 11.000% 06/15/08 35
Twin Labs Inc. 10.250% 05/15/06 17
United Air Lines 6.831% 09/01/08 14
United Air Lines 6.932% 09/01/11 53
United Air Lines 7.270% 01/30/13 41
United Air Lines 7.811% 10/01/09 41
United Air Lines 8.030% 07/01/11 15
United Air Lines 8.250% 04/26/08 20
United Air Lines 8.310% 06/17/09 53
United Air Lines 8.700% 10/07/08 48
United Air Lines 9.000% 12/15/03 7
United Air Lines 9.020% 04/19/12 32
United Air Lines 9.060% 09/26/14 46
United Air Lines 9.125% 01/15/12 7
United Air Lines 9.300% 03/22/08 38
United Air Lines 9.350% 04/07/16 48
United Air Lines 9.560% 10/19/18 38
United Air Lines 9.750% 08/15/21 8
United Air Lines 10.110% 01/05/06 41
United Air Lines 10.110% 02/19/06 36
United Air Lines 10.125% 03/22/15 45
United Air Lines 10.250% 07/15/21 8
United Air Lines 10.360% 11/13/12 54
United Air Lines 10.360% 11/20/12 54
United Air Lines 10.670% 05/01/04 8
United Air Lines 11.210% 05/01/14 8
Univ. Health Services 0.426% 06/23/20 67
United Homes Inc. 11.000% 03/15/05 0
Uromed Corp. 6.000% 10/15/03 0
US Air Inc. 7.500% 04/15/08 0
US Air Inc. 8.930% 04/15/08 0
US Air Inc. 9.330% 01/01/06 42
US Air Inc. 10.250% 01/15/07 4
US Air Inc. 10.610% 06/27/07 0
US Air Inc. 10.680% 06/27/08 6
US Air Inc. 10.700% 01/15/07 23
US Air Inc. 10.900% 01/01/08 3
US Airways Pass. 6.820% 01/30/14 40
US West Cap. Fdg 6.875% 07/15/28 72
Venture Hldgs 9.500% 07/01/05 1
Visteon Corp. 7.000% 03/10/14 70
WCI Steel Inc. 10.000% 12/01/04 73
Werner Holdings 10.000% 11/15/07 65
Westpoint Stevens 7.875% 06/15/05 0
Westpoint Stevens 7.875% 06/15/08 0
Winn-Dixie Store 8.875% 04/01/08 52
Winstar Comm 14.000% 10/15/05 1
Winstar Comm Inc. 10.000% 03/15/08 0
Winstar Comm Inc. 12.500% 04/15/08 0
World Access Inc. 4.500% 10/01/02 7
World Access Inc. 13.250% 01/15/08 1
Xerox Corp. 0.570% 04/21/18 47
*********
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, Jazel P.
Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick
F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili,
Jr., and Peter A. Chapman, Editors.
Copyright 2005. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***