/raid1/www/Hosts/bankrupt/TCR_Public/050701.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, July 1, 2005, Vol. 9, No. 154
Headlines
AAR CORP: Fitch Withdraws BB- Rating on Senior Unsecured Debt
ACCO BRANDS: S&P Rates Proposed $750 Million Bank Loan at BB-
ADAHI INC: Court Approves First Amended Disclosure Statement
ADELPHIA COMMS: Court Okays LLC Asset Sale Under Current Protocol
ADVANSTAR COMMS: Gets Nod to Amend Floating Rate Note Indenture
AEROSPACE ENG'G: Wants Court to Approve Accounts Receivable Sale
AOL LATIN: Taps Shearman & Sterling as Lead Bankruptcy Counsel
AOL LATIN: Wants to Hire Young Conaway as Local Counsel
AMERIQUEST MORTGAGE: Moody's Rates Class M-11 Sub. Cert. at Ba2
AMERUS GROUP: Fitch Puts BB+ Rating on Proposed Pref. Stock Issue
ARDENT HEALTH: Extends 10% Sr. Sub. Debt Tender Offer to July 15
ASHLAND INC: Can Transfer 38% Interest in MAP for $3.7 Billion
ASPEN TECH: Names Frederic Hammond as SVP & General Counsel
ASSET BACKED: Moody's Puts Low-B Ratings on M10 & M11 Certificates
ATA AIRLINES: Gets Court Nod to Reject Orlando Airport Lease
ATA AIRLINES: Goodrich Corp.'s Motion to Lift Stay Draws Fire
BANC OF AMERICA: Fitch Puts Low-B Ratings on $2.5MM Class B Certs.
BANC OF AMERICA: Fitch Puts Low-B Ratings on 4 Certificate Classes
BUEHLER FOODS: Brings-In Keen Realty as Real Estate Expert
CALL-NET: Shareholders Okay Share-for-Share Purchase by RCI
CALPINE CORP: Selling Domestic Oil & Gas Assets for $1.05 Billion
CALPINE CORP: Fitch Junks $650 Million 7.75% Convertible Notes
CARAB INC: Voluntary Chapter 11 Case Summary
C-BASS 2005-CB1: Moody's Rates Class B-5 Sub. Certificates at Ba2
CCM MERGER: S&P Rates Proposed $625 Million Sr. Sec. Loan at B+
CHAPARRAL STEEL: Prices $300 Million of Senior Notes at 10%
CHEVY CHASE: Moody's Rates Class B-5 Investor Certificates at B2
CONTRACTOR TECH: Taps Strategic Capital as Financial Consultant
DEEP RIVER DEVELOPMENT: Voluntary Chapter 11 Case Summary
DELPHI CORP: Subsidiary Acquires Caretools' Principal Assets
DELPHI CORP: Fitch Assigns BB- Rating to $2.8 Bil. Bank Facility
DESIGNS BY SKAFFLES: Case Summary & 20 Largest Unsecured Creditors
EMAC OWNER: Moody's Reviews 2 Cert. Classes for Possible Downgrade
EMPIRE FINANCIAL: EFH Partners Purchases 1.6 Million Common Shares
EURAMAX INT'L: Closing GSCP Emax Acquisition Merger Agreement
FAIRPOINT COMMS: Appoints Walter Leach as EVP-Corporate Dev't.
FIREARMS TRAINING: March 31 Balance Sheet Upside-Down by $28 Mil.
FIREARMS TRAINING: Restating 2003, 2004 & 2005 Financial Reports
GE BUSINESS: Fitch Places BB Rating on $17.8 Mil. Class D Certs.
GEM VIII: Moody's Rates $6 Million Class Q-3 Notes at Ba3
GMACM MORTGAGE: Fitch Rates $2.5 Million Class B Certs. at Low-B
GREENWICH CAPITAL: Moody's Affirms $8.7M Class O Cert.'s B2 Rating
HAYES LEMMERZ: Former CFO William Shovers Receives Wells Notice
HAYES LEMMERZ: Wants Court to Dismiss BNY Capital's Counterclaims
HEARTLAND TECHNOLOGY: Section 341(a) Meeting Slated for July 19
HEDSTROM CORP: Hart Corporation Approved as Real Estate Broker
HOLLYWOOD CASINO: HWCC-Shreveport Can Manage Gaming Complex
HOLMES GROUP: Inks $625 Million Merger Pact with Jarden Corp.
HOVNANIAN ENT: Fitch Puts B+ Rating on $100 Million Stock Issuance
IMPERIAL HOME: Ch. 7 Trustee Hires J. Niebuhr for Wind-Up Help
INDOSUEZ CAPITAL: Fitch Holds BB Rating on $14 Mil. Class D Certs.
INTERSTATE BAKERIES: Court Okays CitiCapital & CitiCorp Settlement
INTERSTATE BAKERIES: Selling Hearth Roll Line for $700,000
INTERSTATE BAKERIES: Target Bids $18.7MM for San Pedro Property
JARDEN CORPORATION: To Acquire Holmes Group for $625 Million
LAC D'AMIANTE: Committee Hires Risk Int'l as Insurance Advisor
MAD CATZ: Delays Filing of 2005 Financial Reports Until Aug. 29
MERIDIAN AUTOMOTIVE: Gets Final Court Nod on $75 Million DIP Loan
METROPOLITAN MORTGAGE: Unsec. Creditors Will Recover 11% to 29%
MIRANT CORP: MAGi Committee Demands Production of Documents
MIRANT CORP: MAGi Committee Wants to Prosecute Claims
NOBLE DREW: Creditors Must File Proofs of Claim by July 22
NORCROSS SAFETY: S&P Rates Senior Secured Bank Loans at BB-
NORTEL NETWORKS: Appoints Harry Pearce as Chairman of the Board
NORTHWESTERN CORP: Completes $200M Sr. Credit Facility Amendment
NORTHWESTERN CORP: Good Performance Prompts S&P to Lift Ratings
NRG ENERGY: Invenergy Nelson Wants Judgment Against Dick Corp.
OLENTANGY COMMERCE: Wants Ricketts Co. as Bankruptcy Counsel
OMNOVA SOLUTIONS: Good Performance Cues S&P to Hold B Corp. Rating
PARK PLACE: Fitch Places BB+ Rating on $30 Million Private Class
PERKINELMER INC: Fitch Withdraws BB+ Ratings on Senior Debt
PETCO ANIMAL: Nasdaq Restores Stock Trading After Compliance
PHH MORTGAGE: Fitch Rates $166,300 Private Class Certs. at B
PHOTOWORKS INC: Shareholders' Approve Debt-for-Equity Conversion
PRIDE INTERNATIONAL: Board Elects Louis Raspino as President & CEO
PURADYN FILTER: Files Notice of Voluntary Delisting from AMEX
RBSGC MORTGAGE: Moody's Rates $78,000 Class II-B-5 Cert. at B2
RESI FINANCE: Fitch Places Low-B Ratings on Three Cert. Classes
ROGERS COMMS: Call-Net Acquisition Expected to Close Today
SATELITES MEXICANOS: Creditors Dismayed Over Mexican Bankruptcy
SOUPER SALAD: Taps Atlas Partners as Real Estate Consultant
STATEN ISLAND: Moody's Rates $31.7MM Series 2001A & B Bonds at B2
TEXAS BOOT: McRae Industries Closes $2.16 Mil. Asset Acquisition
TEXAS INDUSTRIES: Prices $250 Million of 7-1/4% Senior Notes
UNIONE ITALIANA: U.K. Scheme Creditors Must File Claims by Oct. 7
US AIRWAYS: Court Approves America West Merger M.O.U.
US AIRWAYS: Files Plan of Reorganization in E.D. Virginia
US DATAWORKS: Negative Cash Flow Triggers Going Concern Doubt
USG CORPORATION: Board Elects Steve Leer as Director
VENTAS INC: Selling 3.2 Million Common Shares to Merrill Lynch
WATSON'S QUALITY: Case Summary & 20 Largest Unsecured Creditors
WESTPOINT STEVENS: Catawba County Balks at Longview Property Sale
WICKES INC: Administrative Claims Must Be Filed by Aug. 31
WINN-DIXIE: Heritage Wants Debtors to Decide on Purchase Contract
WINN-DIXIE: Wants to Implement Employee Retention Programs
W.R. GRACE: Battle Ensues Over Debtors' Exclusive Periods
ZIFF DAVIS: Concerns on Earnings Prompt S&P's Negative Outlook
* Ex-SEC Enforcement Director Stephen Cutler to Join Wilmer Cutler
* Sidley Austin Brown Names 28 New Partners
* BOOK REVIEW: Competition, Regulation, and Rationing
*********
AAR CORP: Fitch Withdraws BB- Rating on Senior Unsecured Debt
-------------------------------------------------------------
Fitch Ratings affirmed its 'BB-' rating of AAR Corporation's
senior unsecured debt and simultaneously withdrew the rating this
week. Fitch will no longer provide ratings or analytical coverage
of this issuer.
Fitch's rating definitions are available on the agency's public
web site http://www.fitchratings.com/
AAR CORP. is the Borrower under a Revolving Loan Agreement dated
as of April 11, 2001, as modified, amended and extended from time
to time, with LASALLE BANK NATIONAL ASSOCIATION.
AAR CORP., AAR Distribution, Inc., AAR Parts Trading, Inc., AAR
Manufacturing, Inc., AAR Engine Services, Inc., and AAR Allen
Services, Inc., are the Borrowers under a Credit Agreement dated
as of May 29, 2003, as amended three times, with Merrill Lynch
Capital a division of Merrill Lynch Business Financial Services
Inc.
Based in Wood Dale, Illinois, AAR Corporation is a leading
independent provider of products and services to the worldwide
aviation and aerospace industry.
ACCO BRANDS: S&P Rates Proposed $750 Million Bank Loan at BB-
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit and 'B' subordinated debt ratings to office products
manufacturer ACCO Brands Inc.
At the same time, Standard & Poor's assigned its 'BB-' rating to
the company's proposed $750 million loan facility, with a '2'
recovery rating, indicating that the asset values provide lenders
with the expectation of meaningful recovery of principal (80%-
100%) in a payment default scenario. Ratings are subject to
review of final documentation.
Pro forma for the transaction, about $950 million in debt will be
outstanding.
"The ratings on Lincolnshire, Illinois-based ACCO reflect the
company's leveraged financial profile, its highly competitive
operating environment, and the relatively low-growth office supply
markets it serves," said Standard & Poor's credit analyst David
Kang. "These factors are somewhat mitigated by ACCO's wide
geographic distribution and broad product lines, some of which
have recurring revenues from consumable products," added Mr. Kang.
ADAHI INC: Court Approves First Amended Disclosure Statement
------------------------------------------------------------
The Honorable Gregg W. Zive of the U.S. Bankruptcy Court for the
District of Nevada approved the First Amended Disclosure Statement
explaining the Plan of Reorganization filed by Adahi Inc. on
April 19, 2005. Judge Zive determined that the Disclosure
Statement contains adequate information for creditors to make
informed decisions when the company asks them to vote to accept
the Plan.
The Court will convene a hearing on July 26, 2005, to discuss the
merits of the Plan. Objections to the Plan, if any, must be filed
by July 15, 2005.
The Plan intends to pay creditors using:
* net revenue from leasing Adahi's commercial real property;
and
* net proceeds from a cash-out refinancing of Adahi's Incline
Village Real Property.
General Unsecured Creditors are promised full payment of their
claims plus 6% interest on the Effective Date.
Unimpaired classes include:
* Administrative claims,
* priority tax claims, and
* claims held by the Sacramento City Employee Retirement
System, and
and will be paid in full on the Effective Date.
Gregory and Sara Skinner, Brandon Skinner and Henry Skinner, will
retain their equity interests in Adahi.
Impaired claims include:
* claims of First Bank & Trust and
* claims of mechanics' lienholders.
Headquartered in Incline Village, Nevada, Adahi Inc. filed for
chapter 11 protection on September 13, 2004 (Bankr. D. Nev.
Case No. 04-52718). Stephen R. Harris, Esq., Chris D. Nichols,
Esq., and Gloria M. Petroni, Esq., at Belding, Harris & Petroni,
Ltd., represents the Debtor in its restructuring efforts. When
the Debtor filed for protection from its creditors, it estimated
more than $50 million in debts and assets.
ADELPHIA COMMS: Court Okays LLC Asset Sale Under Current Protocol
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
amended the procedure to sell the excess assets of Adelphia
Communications Corporation and its debtor-affiliates, at the
Debtors behest.
The Excess Asset Sales Procedure Order is now amended to clarify
that:
-- the phrase "Excess Assets," as used in the Excess Asset
Sale Order, encompasses assets held by the limited
liability companies that were formed to hold assets
formerly held by the Rigas family;
-- the Debtors are authorized to sell Excess Assets held by
these companies pursuant to the Streamlined Procedures set
forth in the Excess Asset Sale Procedure; and
-- ACC Operations, Inc., as the ultimate parent of these
companies, is permitted to authorize the sales.
As reported in the Troubled Company Reporter on Aug 18, 2003, the
proposed procedures governing the sale of excess assets are:
A. Sales may only be completed upon ten days written notice, by
fax or hand delivery, to:
-- the Office of the United States Trustee for the Southern
District of New York;
-- counsel to the agents for the Debtors' prepetition and
postpetition lenders;
-- counsel to the Creditors' Committee;
-- counsel to the Equity Committee; and
-- any party known by the Debtors to assert a lien on the
asset to be sold;
B. Any notice must include:
-- a description of the Excess Assets to be sold;
-- the purchase price being paid for the assets;
-- the name and address of the purchaser, as well as a
statement that the purchaser is not an insider or
affiliate of any Debtor;
-- the name of the applicable Debtor; and
-- a copy of the proposed purchase agreement intended to
govern the sale;
C. All sales will be made subject to higher and better written
offers received by the Debtors prior to the expiration of the
10-day notice period;
D. The Debtors may employ brokers and appraisers to assist in
the sales process on usual and customary terms;
E. If a written objection to any sale is received by the Debtors
within the notice period, then, absent a settlement, Court
approval of the sale will be required;
F. All sales will be free and clear of liens, claims, and
encumbrances, with any liens, claims, and encumbrances to
attach to the proceeds of the sale; and
G. The Debtors will keep a detailed accounting of the proceeds
from all dispositions and the cost of any broker services
used for each transaction, if any. All proceeds of the
dispositions will be allocated and managed in accordance with
this Court's DIP Order, including the Cash Management
Protocol.
Headquartered in Coudersport, Pennsylvania, Adelphia
Communications Corporation (OTC: ADELQ) is the fifth-largest cable
television company in the country. Adelphia serves customers in
30 states and Puerto Rico, and offers analog and digital video
services, high-speed Internet access and other advanced services
over its broadband networks. The Company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002. Those cases are jointly
administered under case number 02-41729. Willkie Farr & Gallagher
represents the ACOM Debtors. (Adelphia Bankruptcy News, Issue No.
98; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADVANSTAR COMMS: Gets Nod to Amend Floating Rate Note Indenture
---------------------------------------------------------------
Advanstar Communications Inc. disclosed the results of its offer
to purchase and consent solicitation launched on May 31, 2005,
which expired at 5:00 p.m., New York City time, on June 28, 2005.
Pursuant to the Offer and Solicitation, Advanstar offered to
purchase any and all of its outstanding Second Priority Senior
Secured Floating Rate Notes due 2008.
Advanstar has been advised by the depositary, Wells Fargo Bank,
N.A., that $117,801,750 aggregate outstanding principal amount of
Floating Rate Notes were validly tendered for purchase and not
withdrawn in the Offer and Solicitation. Advanstar has agreed to
purchase all such notes.
The total consideration to be paid for Floating Rate Notes
purchased in the Offer and Solicitation is $1,073 for each $1,000
principal amount outstanding of Floating Rate Notes, which
includes a $30 consent payment. Holders should note that, as a
result of principal amortization, while each Floating Rate Note
was issued in a face amount of $1,000, the outstanding principal
amount of each Floating Rate Note is currently $982.50.
Accordingly, a holder will not receive $1,073 as the total
consideration in respect of each such Floating Rate Note, but
rather an amount equal to 107.3% of the actual outstanding
principal amount of such Note. Holders whose Floating Rate Notes
are purchased in the Offer and Solicitation will also receive
accrued and unpaid interest to, but not including, the settlement
date.
As previously announced, Advanstar received consents pursuant to
the Offer and Solicitation sufficient to effect all of the
proposed amendments to the indenture governing the Floating Rate
Notes as set forth in the Offer to Purchase and Consent
Solicitation Statement dated May 31, 2005. The proposed
amendments eliminate, with respect to the Floating Rate Notes
only, substantially all of the restrictive covenants and certain
default provisions in the indenture governing the Floating Rate
Notes. The proposed amendments also release the security interest
in the collateral under the indenture and security documents with
respect to the Floating Rate Notes.
Credit Suisse First Boston acted as the exclusive Dealer Manager
and Solicitation Agent for the Offer and Solicitation. Questions
regarding the Offer and Solicitation may be directed to Credit
Suisse First Boston's Liability Management Group, at (800) 820-
1653 or (212) 538-0652 (collect).
Advanstar Communications Inc. -- http://www.advanstar.com/-- is a
leading worldwide media company providing integrated marketing
solutions for the Fashion, Life Sciences and Powerports
industries. Advanstar serves business professionals and consumers
in these industries with its portfolio of 55 expositions and
conferences, 55 publications and directories, 75 electronic
publications and Web sites, as well as educational and direct
marketing products and services. Market leading brands and a
commitment to delivering innovative, quality products and services
enables Advanstar to "Connect Our Customers With Theirs."
Advanstar has roughly 1,000 employees and currently operates from
multiple offices in North America and Europe.
* * *
As reported in the Troubled Company Reporter on Apr. 8, 2005,
Standard & Poor's Ratings Services revised its outlook on
Advanstar Communications Inc. to negative from stable. At the
same time, Standard & Poor's affirmed its existing ratings on the
company, including its 'B' corporate credit rating. The Duluth,
Minnesota-based business-to-business media firm, which is analyzed
on a consolidated basis with its parent company, Advanstar Inc.,
had $753 million in consolidated debt on Dec. 31, 2004.
AEROSPACE ENG'G: Wants Court to Approve Accounts Receivable Sale
----------------------------------------------------------------
A large portion of Aerospace Engineering Research & Associates,
Inc.'s contracts come from agencies of the United States
government. The Debtor says payments under the contracts are
often protracted or delayed. This delay is disruptive to the
Debtor's business operations and impairs its ability to meet
routine operating expenses.
To alleviate this disruption and obtain a consistent revenue
stream, the Debtor searched for a financing entity to which its
accounts receivable will be assigned. They found one.
Accordingly, the Debtor asks the U.S. Bankruptcy Court for the
District of Maryland, Greenbelt Division, to approve a Purchase
and Security Agreement with American Receivable Corporation.
Under the agreement, the Debtor will sell its accounts receivable
to ARC at 80% of the accounts' face amount. In return, the Debtor
will receive prompt and regular payment for its accounts.
Headquartered in Lanham, Maryland, Aerospace Engineering &
Research Associates, Inc. -- http://www.freeflight.com/-- designs
and develops next generation air traffic control and management
systems. The Debtor filed for chapter 11 protection on January 5,
2005 (Bankr. D. Md. Case No. 05-10241). James Greenan, Esq., at
McNamee, Hosea, Jerniga, Kim, Greenan & Walker, P.A., represents
the Debtor in its restructuring efforts. When the company filed
for protection from its creditors, it estimated $50,000 in assets
and $1 million to $10 million in debts.
AOL LATIN: Taps Shearman & Sterling as Lead Bankruptcy Counsel
--------------------------------------------------------------
America Online Latin America, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware for
permission to retain and employ Shearman & Sterling LLP as their
lead bankruptcy counsel.
The Debtors have employed Shearman & Sterling since April 2004 for
assistance in general corporate, tax and restructuring advice.
Shearman & Sterling is expected to:
1) provide legal advice to the Debtors with respect to their
powers and duties as debtors-in-possession in the continued
operation of their businesses and their management and
supervision of the day-to-day operations of the Non-Debtor
Foreign Subsidiaries;
2) pursue confirmation of a proposed plan of reorganization or
liquidation and approval of its accompanying disclosure
statement;
3) prepare on behalf of the Debtors all necessary applications,
motions, answers, orders, reports and other legal papers
required by the Court;
4) appear in Bankruptcy Court and protect the interests of the
Debtors before that Court; and
5) perform all other legal services for that Debtors that are
necessary and required in their chapter 11 cases.
By separate application filed contemporaneously with the Court,
the Debtors are seeking authority to employ Young Conaway Stargatt
& Taylor, LLP, as their lead bankruptcy counsel. Attorneys from
Young Conaway and Shearman & Sterling have conferred with each
other regarding the division of responsibilities and both Firms
will make an effort to avoid duplication of tasks.
Douglas P. Bartner, Esq., a Member at Shearman & Sterling,
discloses that the Firm received a $113,384.50 retainer.
Mr. Bartner reports Shearman & Sterling's professionals bill:
Designation Hourly Rate
------------ -----------
Partners $575 - $750
Counsel & Associates $235 - $600
Legal Assistants & $95 - $195
Specialists
Shearman & Sterling assures the Court that it does not represent
any interest materially adverse to the Debtors or their estates.
Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc., -- http://www.aola.com/-- offers AOL-branded
Internet service in Argentina, Brazil, Mexico, and Puerto Rico, as
well as localized content and online shopping over its proprietary
network. Principal shareholders in AOLA are Cisneros Group, one
of Latin America's largest media firms, Brazil's Banco Itau, and
Time Warner, through America Online. The Company and its debtor-
affiliates filed for chapter 11 protection on June 24, 2005
(Bankr. D. Del. Case No. 05-11778). Pauline K. Morgan, Esq., and
Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
total assets of $28,500,000 and total debts of $181,774,000.
AOL LATIN: Wants to Hire Young Conaway as Local Counsel
-------------------------------------------------------
America Online Latin America, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware for
permission to employ Young Conaway Stargatt & Taylor, LLP, as
their local bankruptcy counsel.
Young Conaway is expected to:
1) provide legal advice with respect to the Debtors' powers and
duties as debtors-in-possession in the continued operation
of their businesses and management of their property;
2) assist in the preparation and pursuit of confirmation of a
plan of reorganization and approval of its accompanying
disclosure statement;
3) prepare on behalf of the Debtors all necessary applications,
motions, answers, orders, reports and other legal papers
required by the Court;
4) appear in Bankruptcy Court and protect the interests of the
Debtors before that Court; and
5) perform all other legal services for the Debtors that are
necessary and proper in their bankruptcy proceedings.
Pauline K. Morgan, Esq., a Partner at Young Conaway, is the lead
attorney for the Debtors. Ms. Morgan discloses that the Firm
received a $50,000 retainer. Ms. Morgan charges $460 per hour for
her services.
Ms. Morgan reports Young Conaway's professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
Edmon L. Morton Associate $345
Margaret B. Whiteman Associate $220
Kimberley A. Beck Paralegal $145
Young Conaway assures the Court that it does not represent any
interest materially adverse to the Debtors or their estates.
Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc., -- http://www.aola.com/-- offers AOL-branded
Internet service in Argentina, Brazil, Mexico, and Puerto Rico, as
well as localized content and online shopping over its proprietary
network. Principal shareholders in AOLA are Cisneros Group, one
of Latin America's largest media firms, Brazil's Banco Itau, and
Time Warner, through America Online. The Company and its debtor-
affiliates filed for chapter 11 protection on June 24, 2005
(Bankr. D. Del. Case No. 05-11778). When the Debtors filed for
protection from their creditors, they listed total assets of
$28,500,000 and total debts of $181,774,000.
AMERIQUEST MORTGAGE: Moody's Rates Class M-11 Sub. Cert. at Ba2
---------------------------------------------------------------
Moody's Investors Service has assigned a rating of Aaa to the
senior certificates issued in Ameriquest's Series 2005-R4
transaction, and ratings ranging from Aa1 to Ba2 to the
subordinate certificates in the deal.
The securitization is backed by subprime mortgage loans originated
through Ameriquest's retail channel using underwriting guidelines
that are slightly more stringent than those used by Ameriquest's
wholesale channel. The ratings are based primarily on:
a) the credit quality of the loans; and
b) on various forms of credit enhancement including:
* excess interest,
* subordination,
* overcollateralization,
* primary mortgage insurance from Mortgage Guaranty
Insurance Corporation, and
* allocation of losses.
Ameriquest Mortgage Company is a specialty finance company engaged
in originating, purchasing and selling sub-prime mortgage loans.
Ameriquest originates loans through more than 200 retail outlets,
primarily though telemarketing and direct mailing efforts, and
deals with more than 3,000 approved brokers. Ameriquest Mortgage
Company, a capable servicer of sub-prime mortgage loans will act
as servicer for the loans in this transaction.
The complete rating actions are:
Issuer: Ameriquest Mortgage Securities Inc.
Securities: Asset-Backed Pass-Through Certificates, Series 2005-R4
Master Servicer: Ameriquest Mortgage Company
Class, Rating:
* Class A-1A, rated Aaa
* Class A-1B, rated Aaa
* Class A-2A, rated Aaa
* Class A-2B, rated Aaa
* Class A-2C, rated Aaa
* Class A-2D, rated Aaa
* Class M-1, rated Aa1
* Class M-2, rated Aa2
* Class M-3, rated Aa3
* Class M-4, rated A1
* Class M-5, rated A1
* Class M-6, rated A2
* Class M-7, rated A3
* Class M-8, rated Baa1
* Class M-9, rated Baa2
* Class M-10, rated Baa3
* Class M-11, rated Ba2
AMERUS GROUP: Fitch Puts BB+ Rating on Proposed Pref. Stock Issue
-----------------------------------------------------------------
AmerUs Group Co. announced Wednesday it was deferring issuance of
its proposed cumulative perpetual preferred stock until market
conditions are more favorable. Fitch Ratings had assigned a 'BB+'
rating to the proposed issuance, and this will remain as a
provisional rating indication should the company proceed with an
issue in the near term. Fitch will update its view at the time of
any issuance to reflect any potential new information material to
the credit.
AmerUs Group Co.
-- Perpetual preferred stock rated 'BB+'/Stable;
-- Long-term issuer 'BBB'/Stable;
-- OCEANs 'BBB-'/Stable;
-- PRIDES 'BBB'/Stable.
AmerUs Capital I
-- Trust preferred 'BB+'/Stable.
AmerUs Life Insurance Co.
-- Insurer financial strength 'A'/Stable.
Indianapolis Life Ins. Co.
-- Surplus note 'BBB+'/Stable;
-- Insurer financial strength 'A'/Stable.
American Investors Life Insurance Co.
-- Insurer financial strength 'A'/Stable.
Bankers Life Insurance Co. of New York
-- Insurer financial strength 'A'/Stable
ARDENT HEALTH: Extends 10% Sr. Sub. Debt Tender Offer to July 15
----------------------------------------------------------------
Ardent Health Services LLC extends the expiration date for the
previously announced cash tender offer and consent solicitation by
its subsidiary, Ardent Health Services, Inc., for its outstanding
10% Senior Subordinated Notes due 2013 to midnight, New York City
time, on July 15, 2005. The company has received tenders and
consents from holders of $224.97 million in aggregate principal
amount of the Notes, representing approximately 99.99% of the
outstanding Notes.
The price determination date will be 2:00 p.m., New York City
time, 10 business days prior to the Expiration Date. The
completion of the tender offer and consent solicitation is subject
to the satisfaction or waiver by the company of a number of
conditions, as described in the Offer to Purchase and Consent
Solicitation Statement dated April 15, 2005. Holders who validly
tender their Notes and which Notes are accepted for purchase are
expected to receive payment on or promptly after the date on which
the company satisfies or waives the conditions of the tender offer
and consent solicitation.
Requests for documents relating to the tender offer and consent
solicitation may be directed to Global Bondholder Services
Corporation, the depositary and information agent for the tender
offer and consent solicitation, at (212) 430-3774 (collect) or
(866) 389-1500 (U.S. toll-free). Additional information
concerning the tender offer and consent solicitation may be
obtained by contacting Banc of America Securities LLC, the dealer
manager and solicitation agent for the tender offer and consent
solicitation at (704) 388-9217 (collect) or (888) 292-0070 (U.S.
toll-free).
This announcement is not an offer to purchase, a solicitation of
an offer to purchase or a solicitation of consents with respect to
any securities. The tender offer and consent solicitation are
being made solely by the Offer to Purchase.
Ardent Health Services is a provider of health care services to
communities throughout the United States. Ardent currently owns
34 hospitals in 13 states, providing a full range of
medical/surgical, psychiatric and substance abuse services to
patients ranging from children to adults.
* * *
As reported in the Troubled Company Reporter on March 15, 2005,
Moody's Investors Service affirmed the ratings of Ardent Health
Services and changed the outlook to developing. This action
follows Ardent's announcement that it has entered into a
definitive agreement to sell its behavioral health division,
consisting of 20 behavioral hospitals, to Psychiatric Solutions,
Inc., in a transaction valued at $560 million.
These ratings were affirmed:
* $150 Million Senior Secured Revolving Credit Facility due
2008, B1
* $300 Million Term Loan B due 2011, rated B1
* $225 Million Senior Subordinated Notes due 2013, rated B3
* Senior implied rating, rated B1
* Senior Unsecured Issuer Rating, rated, B2
ASHLAND INC: Can Transfer 38% Interest in MAP for $3.7 Billion
--------------------------------------------------------------
Ashland Inc.'s (NYSE: ASH) shareholders approved the transfer of
the Company's 38-percent interest in Marathon Ashland Petroleum
LLC and two other businesses to Marathon Oil Corporation (NYSE:
MRO) in a transaction valued at approximately $3.7 billion. The
two other businesses are Ashland's maleic anhydride business and
60 Valvoline Instant Oil Change centers in Michigan and northwest
Ohio.
Approval required the affirmative vote of a majority of the shares
outstanding as of May 12, 2005. Of the 72,984,120 shares eligible
to be voted, 78 percent voted to approve the transaction. Of the
shares voted, more than 98 percent voted to approve the
transaction.
The transaction was expected to close yesterday, June 30.
Ashland Inc. (NYSE: ASH) -- http://www.ashland.com/-- is a
Fortune 500 chemical and transportation construction company
providing products, services and customer solutions throughout the
world.
* * *
As reported in the Troubled Company Reporter on May 3, 2005,
Moody's Investors Services commented that the senior unsecured
ratings of Ashland Inc. would likely be lowered to Ba1 following
the completion of the sale of its 38% equity interest in Marathon
Ashland Petroleum LLC to Marathon Oil Corporation. Moody's also
noted that Ashland's Baa2 ratings will remain under review for
possible downgrade until the completion of the tender offer. The
remaining stub bonds, if any, would be lowered to Ba1 at that time
and the commercial paper rating would be lowered to Not-Prime. If
the MAP transaction does not occur, Ashland's Baa2 and P-3 ratings
would likely be confirmed.
Ratings remaining under review for possible downgrade:
-- Ashland Inc.
* Issuer rating - Baa2
* Senior unsecured notes and debentures - Baa2
* Industrial revenue bonds supported by Ashland - Baa2
* Shelf registration for senior unsecured debt - (P)Baa2
* subordinated debt - (P)Baa3; preferred stock - (P)Ba1
* Rating for commercial paper - Prime-3
ASPEN TECH: Names Frederic Hammond as SVP & General Counsel
-----------------------------------------------------------
Aspen Technology, Inc. (Nasdaq: AZPN) disclosed that Frederic G.
"Fritz" Hammond has joined the company's executive team as Senior
Vice President and General Counsel, with global responsibility for
corporate governance and legal transactions. Mr. Hammond is
replacing Stephen Doyle, AspenTech's current General Counsel and
Chief Legal Officer, who is leaving the company to pursue other
career opportunities in the technology sector.
Mr. Hammond brings to AspenTech nearly two decades of experience
in public company general counsel and global operational and
transactional experience for companies in various stages of
growth. He was most recently a partner in the Boston office of
the law firm Hinckley, Allen & Snyder LLP, where he handled SEC
disclosure and other public company issues. His responsibilities
also included providing Sarbanes-Oxley advice, handling mergers
and acquisitions and corporate finance transactions, and
developing intellectual property strategies. Prior to his
association with the firm, he was Vice President of Business
Affairs and General Counsel at Gomez Advisors, Inc., an Internet
performance measurement and benchmarking technology service firm,
with responsibilities for corporate finance, mergers and
acquisitions, corporate and creditor restructurings and commercial
contracts negotiations.
Mr. Hammond previously served as General Counsel of Avid
Technology, a publicly-held international leader in digital video
and audio editing, special effects and production systems. His
responsibilities at Avid included initial and secondary public
offerings, SEC reporting and disclosure, mergers and acquisitions,
and strategic distribution, licensing and investment transactions.
Before joining Avid, he was a member of the corporate and business
law, intellectual property law and international law groups at the
law firm of Ropes & Gray in Boston. Mr. Hammond is a graduate of
Boston College Law School, cum laude, and Yale College.
"Fritz Hammond's strong combination of corporate governance and
legal transaction skills will be instrumental in ensuring that
AspenTech responsibly delivers on shareholder expectations and
complies fully with the laws governing the conduct of public
companies," said Mark Fusco, President and CEO, AspenTech. "In
addition, his experience in international negotiations and finance
will help AspenTech improve its business execution and strengthen
our efforts to improve its financial performance.
"I would also like to thank Stephen Doyle for his nine years of
service to AspenTech. He has been critical in helping the company
with a number of challenging legal issues, and we wish him the
best as he transitions back to a business role in the high tech
sector."
Aspen Technology, Inc. -- http://www.aspentech.com/-- provides
industry-leading software and professional services that help
process companies improve efficiency and profitability by enabling
them to model, manage and control their operations. The new
generation of integrated aspenONE(TM) solutions are aligned with
the key industry business processes, providing manufacturers the
capabilities they need to optimize operational performance, make
real-time decisions and synchronize the plant and supply chain.
Over 1,500 leading companies already rely on AspenTech's software,
including Bayer, BASF, BP, ChevronTexaco, DuPont, ExxonMobil,
Fluor, GlaxoSmithKline, Sanofi-Aventis, Shell, and Total.
* * *
As reported in the Troubled Company Reporter on Apr. 5, 2005,
Standard & Poor's Ratings Services removed its ratings on
Cambridge, Ma.-based Aspen Technology Inc. from CreditWatch, where
they were placed with negative implications on Nov. 1, 2004, and
affirmed its 'B' corporate credit and 'CCC+' subordinated debt
ratings.
At Mar. 31, 2005, Aspen Technology Inc.'s balance sheet showed a
$20,241,000 stockholders' deficit, compared to a $28,363,000
equity at June 30, 2004.
ASSET BACKED: Moody's Puts Low-B Ratings on M10 & M11 Certificates
------------------------------------------------------------------
Moody's Investors Service has assigned a Aaa rating to the senior
certificates issued by Asset Backed Securities Corporation Home
Equity Loan Trust, Series 2005-HE5, and ratings ranging from Aa1
to Ba2 to the mezzanine and subordinate certificates in the deal.
The securitization is backed by WMC originated adjustable-rate
(approximately 82%) and fixed-rate (approximately 18%) subprime
mortgage loans. The ratings are based primarily on:
a) the credit quality of the loans; and
b) on the protection from:
* subordination,
* overcollateralization, and
* excess spread.
The credit quality of the loan pool is in line with the average
loan pool backing recent subprime securitizations. Moody's
expects collateral losses to range from 4.8% to 5.25%.
Countrywide Home Loans Servicing LP will service the loans.
Moody's has assigned its top servicer quality rating, SQ1, to
Countrywide as a primary servicer of subprime loans.
The complete rating actions are:
Asset Backed Securities Corporation Home Equity Loan Trust
Asset Backed Pass-Through Certificates, Series 2005-HE5
* Class A1, rated Aaa
* Class A1A, rated Aaa
* Class A2, rated Aaa
* Class A2A, rated Aaa
* Class M1, rated Aa1
* Class M2, rated Aa2
* Class M3, rated Aa3
* Class M4, rated A1
* Class M5, rated A2
* Class M6, rated A3
* Class M7, rated Baa1
* Class M8, rated Baa2
* Class M9, rated Baa3
* Class M10, rated Ba1
* Class M11, rated Ba2
ATA AIRLINES: Gets Court Nod to Reject Orlando Airport Lease
------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
March 21, 2005, ATA Airlines, Inc., and its debtor-affiliates
entered into an Airline-Airport Lease and Use Agreement with the
Greater Orlando Aviation Authority, effective as of January 1,
1996. Under the Lease, ATA Airlines was billed monthly for the
use of certain premises and facilities at the Orlando
International Airport.
Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis,
Indiana, notifies the Court that the Debtors concede to Greater
Orlando Aviation Authority that rejection of their January 1,
1996 Airport Lease and Use Agreement mandates the concurrent
rejection of affiliated agreements and that rejection of the
Affiliated Agreements should be effective as of the rejection date
of the Airport Lease.
The Affiliated Agreements are:
* Orlando International Airport Fuel System Lease Agreement,
effective January 1, 1996 between GOAA and ATA Airlines,
Inc., together with Amendment 1 dated September 20, 2000;
* Joinder Orlando International Airport Fuel System
Interline Agreement effective date January 1, 1996;
* Joinder Orlando International Airport Fuel System Access
Agreement, and
* any other affiliated agreements that are dependent upon
the Debtors being a lessee under the Airport Lease or
under the Fuel Lease Agreement.
* * *
The Court authorizes the rejection of the Lease and the Affiliated
Agreements effective April 30, 2005.
According to Judge Lorch, the negotiation and execution of new
agreements substantially similar to the rejected agreements are
ordinary course of business transactions within the meaning of
Section 363 of the Bankruptcy Code. However, the Debtors must
provide the Official Committee of Unsecured Creditors copies of
any new agreements for review at least one business day prior to
their execution.
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. 27; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ATA AIRLINES: Goodrich Corp.'s Motion to Lift Stay Draws Fire
-------------------------------------------------------------
As previously reported, Goodrich Corporation and ATA Airlines,
Inc., are parties to two separate but related agreements expiring
on 2010:
a. Fleet Service Agreement dated June 23, 2000; and
b. Equipment Security Agreement entered into and effective as
of January 19, 2004.
William J. Tucker, Esq., in Indianapolis, Indiana, relates that
under the Fleet Service Agreement, Goodrich agreed to provide ATA
Airlines with its "requirements" for services with respect to its
entire existing fleet of certain aircraft. Goodrich agreed to
provide those requirements to the Debtor's existing fleet and all
aircraft subsequently added to the Fleet. Goodrich is not
obligated under the Agreement to provide services in excess of the
Debtor's requirements.
The Services consist primarily of repairing and refurbishing the
aircraft wheels and brakes of ATA Airlines' Fleet -- the Spares
-- as well as the installation of additional parts, Mr. Tucker
says. Goodrich's compensation for the services is based on a flat
charge per aircraft landing. The Debtor is required to pay the
amount equal to the relevant CPAL multiplied by the number of
Fleet landings during the month.
Mr. Tucker tells the Court that Goodrich's profitability under the
Fleet Service Agreement is entirely dependent on the Fleet being
of a sufficient size -- if the Fleet is too small, there will not
be enough landings per month to enable Goodrich to recoup its
costs in providing the Services. Recognizing this, Goodrich
agreed to provide ATA Airlines with certain incentives, in the
form of spare wheels and brakes, including related parts and
assemblies as well as discounts and rebates, for each new aircraft
that the Debtor adds to the Fleet.
According to Mr. Tucker, Goodrich agreed to provide the
Incentives expecting that the corresponding increase in the number
of Fleet landings would sufficiently compensate Goodrich for the
Incentives and Services. Thus, the Fleet Service Agreement
specifically provides that the Debtor must reimburse all or part
of the Incentives if it subsequently reduces the size of its
Fleet.
After the Petition Date, ATA Airlines decided to remove at least
14 aircraft from its Fleet. This removal, Mr. Tucker says,
triggered the Debtor's obligation under the Fleet Service
Agreement to return at least the Incentives for the 14 Aircraft,
which Incentives aggregated $2,242,380. However, the Debtor has
yet to return any Incentive Spares or otherwise reimburse
Goodrich for the value of the Incentives, Mr. Tucker reports.
Mr. Tucker contends that ATA Airlines' retention of the Incentive
Spares in excess of its requirements allows it to use the parts on
its Fleet, as opposed to having to issue Repair Orders to Goodrich
to repair and refurbish the Spares currently installed on the
Fleet. Therefore, Goodrich believes that the Debtor's reduction
of the Fleet and retention of the Incentive Spares related to the
14 Aircraft reduce the Debtor's requirements for the Services
contemplated under the Fleet Service Agreement.
Mr. Tucker informs the Court that ATA Airlines has and continues
to issue Repair Orders to Goodrich for Services that do not
reflect its now reduced requirements. Nevertheless, Goodrich
continues to fill all of the Repair Orders issued by the Debtor.
Although ATA Airlines may be current with respect to the CPAL
obligations, because Goodrich has been providing Services in
excess of the Requirements, Goodrich believes that its continued
performance of the Agreement has become unduly burdensome and
inequitable; Goodrich is not receiving the benefit of its bargain
and is prejudiced by its continued performance.
Pursuant to the Equipment Security Agreement, Goodrich provided
ATA Airlines with a pool of spare aircraft wheels and brakes, and
the Debtor has granted to Goodrich a continuing security interest
in the spares and all proceeds thereof. Title to the Secured
Spares subject to the Equipment Agreement remains with Goodrich.
The Debtor is required to keep the Secured Spares free and clear
of all claims, liens, and encumbrances, except for those in favor
of Goodrich.
As a direct result of ATA Airline's reduction of its Fleet and
retention of Incentive Spares and other Incentives related to the
14 Aircraft, Goodrich should be entitled to satisfy only those
Repair Orders that accurately reflect the Debtor's reduced
requirements, Mr. Tucker argues.
Moreover, Mr. Tucker points out that the Debtor's obligation to
return the Incentive Spares or otherwise reimburse Goodrich for
the Incentives related to the 14 Aircraft is an obligation of the
Debtor under the Fleet Service Agreement and constitutes an actual
and necessary expense of the Debtor's estate.
Mr. Tucker adds that, pursuant to Sections 503(b) and 507(a)(1) of
the Bankruptcy Code, the Debtor should also be required to return
the Incentive Spares and the other Incentives related to the 14
Aircraft to Goodrich.
Goodrich desires to recover its Secured Spares. The Equipment
Security Agreement, Mr. Tucker notes, does not prohibit Goodrich
from recovering or repossessing its Secured Spares.
Goodrich asks the Court to:
1. find that the Debtor's requirements under the Fleet Service
Agreement have been reduced and Goodrich may reduce the
amount of Services it provides to the Debtor, irrespective
of Repair Orders issued by the Debtor in an amount to be
determined;
2. require the Debtor to return, or otherwise reimburse
Goodrich for all Incentives in accordance with the terms of
the Fleet Service Agreement; and
3. lift the automatic stay so as to allow Goodrich to retake
possession of the Secured Spares.
Debtor Responds
Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis, Indiana,
argues that that there is no legal basis for the Court to grant
Goodrich's request.
Ms. Hall argues that, were the Court to grant Goodrich's request
and ATA Airlines subsequently rejected the contracts, the effect
of the Court's order would be to turn what would be prepetition
breach claims into postpetition administrative expenses. "This is
in direct contravention of the Bankruptcy Code," Ms. Hall
contends.
ATA Airlines has continued to pay its fees due under the Fleet
Service Agreement and has not assumed the contract, Ms. Hall
points out. Goodrich's relief, if any, lies with Section 365 of
the Bankruptcy Code, which governs the parties' rights to
executory contracts. However, Goodrich did not seek relief under
Section 365.
Under Section 365, the debtor is given appropriate time to decide
on the contracts. Courts have construed that an executory
contract generally remains in effect pending assumption or
rejection by the debtor.
Ms. Hall notes that the time in which ATA Airlines may decide to
assume or reject the Agreements has not expired. If there are
disputes on the interpretation of the Wheel and Brake Agreement,
those disputes are not ripe for determination by the Court until
the Debtor moves to assume or reject the Agreements.
Ms. Hall also asserts that Goodrich fails to state a claim upon
which relief may be granted under Rule 12(b)(6) of the Federal
Rules of Civil Procedure, and Rule 7012(b) of the Federal Rules of
Bankruptcy Procedure.
Ms. Hall further informs the Court that the parts supplied to ATA
under the Agreement are property of the ATA estate and may be
subject to liens under cash collateral orders and the DIP
financing orders entered in these Chapter 11 cases.
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. 27; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
BANC OF AMERICA: Fitch Puts Low-B Ratings on $2.5MM Class B Certs.
------------------------------------------------------------------
Banc of America Mortgage Securities, Inc., series 2005-F, mortgage
pass-through certificates, are rated by Fitch Ratings:
-- $690,929,100 1-A-1, 1-A-2, 1-A-R, 2-A-1 through 2-A-4, 3-
A-1, and 4-A-1 (senior certificates) 'AAA';
-- $15,053,000 class B-1 'AA';
-- $4,301,000 class B-2 'A';
-- $2,508,000 class B-3 'BBB';
-- $1,434,000 class B-4 'BB';
-- $1,075,000 class B-5 'B'.
The 'AAA' rating on the senior certificates reflects the 3.60%
subordination provided by the 2.10% class B-1, the 0.60% class B-
2, the 0.35% class B-3, the 0.20% privately offered class B-4, the
0.15% privately offered class B-5, and the 0.20% privately offered
class B-6. The ratings on class B-1, B-2, B-3, B-4, and B-5
certificates reflect each certificate's respective level of
subordination. Class B-6, class 1-IO, and class 2-IO are not
rated by Fitch.
The ratings also reflect the quality of the underlying mortgage
collateral, the primary servicing capabilities of Bank of America
Mortgage, Inc. (rated 'RPS1' by Fitch) and Fitch's confidence in
the integrity of the legal and financial structure of the
transaction.
The transaction consists of four groups of adjustable interest
rate, fully amortizing mortgage loans, secured by first liens on
one- to four-family properties, with a total of 1,326 loans and an
aggregate principal balance of $716,733,785 as of June 1, 2005
(the cut-off date). The four loan groups are cross-
collateralized.
The group 1 collateral consists of 3/1 hybrid adjustable-rate
mortgage (ARM) loans. After the initial fixed interest rate
period of three years, the interest rate will adjust annually
based on the sum of one-year LIBOR index and a gross margin
specified in the applicable mortgage note. Approximately 64.35%
of group 1 loans require interest-only payments until the month
following the first adjustment date.
As of the cut-off date, the group has an aggregate principal
balance of approximately $41,469,904 and an average balance of
$552,932. The weighted average original loan-to-value ratio
(OLTV) for the mortgage loans is approximately 73.27%. The
weighted average remaining term to maturity is 360 months, and the
weighted average FICO credit score for the group is 755. Second
homes and investor-occupied properties constitute 14.65% and 1.40%
of the loans in group 1, respectively. Rate/term and cashout
refinances account for 13.85% and 3.93% of the loans in group 1,
respectively. The states that represent the largest geographic
concentration of mortgaged properties are California (39.38%),
Florida (17.80%), South Carolina (6.56%), North Carolina (6.53%),
and Illinois (5.62%). All other states represent less than 5% of
the outstanding balance of the group.
The group 2 collateral consists of 5/1 hybrid ARM mortgage loans.
After the initial fixed interest rate period of five years, the
interest rate will adjust annually based on the sum of one-year
LIBOR index and a gross margin specified in the applicable
mortgage note. Approximately 74.50% of group 2 loans require
interest-only payments until the month following the first
adjustment date.
As of the cut-off date, the group has an aggregate principal
balance of approximately $586,374,357 and an average balance of
$535,991. The weighted average OLTV for the mortgage loans is
approximately 72.10%. The WAM is 360 months, and the weighted
average FICO credit score for the group is 748. Second homes and
investor-occupied properties constitute 11.09% and 0.67% of the
loans in group 2, respectively. Rate/term and cashout refinances
account for 17.53% and 13.78% of the loans in group 2,
respectively. The states that represent the largest geographic
concentration of mortgaged properties are California (51.24%),
Florida (9.90%), and Virginia (7.04 %). All other states
represent less than 5% of the outstanding balance of the pool.
The group 3 collateral consists of 7/1 hybrid ARM mortgage loans.
After the initial fixed interest rate period of seven years, the
interest rate will adjust annually based on the sum of one-year
LIBOR index and a gross margin specified in the applicable
mortgage note. Approximately 50.04% of group 3 loans require
interest-only payments until the month following the first
adjustment date.
As of the cut-off date, the group has an aggregate principal
balance of approximately $30,707,902 and an average balance of
$558,325. The weighted average OLTV for the mortgage loans is
approximately 69.21%. The WAM is 360 months, and the weighted
average FICO credit score for the group is 757. Second homes and
investor-occupied properties constitute 17.25% and 2.12% of the
loans in group 3, respectively. Rate/term and cashout refinances
account for 17.72% and 7.81% of the loans in group 3,
respectively. The states that represent the largest geographic
concentration of mortgaged properties are California (41.11%),
Florida (11.96%), Georgia (6.89%), and Virginia (6.55%). All
other states represent less than 5% of the outstanding balance of
the pool.
The group 4 collateral consists of 10/1 hybrid ARM mortgage loans.
After the initial fixed interest rate period of 10 years, the
interest rate will adjust annually based on the sum of one-year
LIBOR index and a gross margin specified in the applicable
mortgage note. Approximately 62.63% of group 4 loans require
interest-only payments until the month following the first
adjustment date.
As of the cut-off date, the group has an aggregate principal
balance of approximately $58,181,621 and an average balance of
$570,408. The weighted average OLTV for the mortgage loans is
approximately 69.08%. The WAM is 360 months, and the weighted
average FICO credit score for the group is 753. Second homes
constitute 8.79% of the loans and there are no investor-occupied
properties in group 4. Rate/term and cashout refinances account
for 14.61% and 18.77% of the loans in group 4, respectively. The
states that represent the largest geographic concentration of
mortgaged properties are California (48.81%), Florida (9.85%),
Virginia (7.68%), and Maryland (5.22%). All other states
represent less than 5% of the outstanding balance of the pool.
Approximately 68.92% of the group 1 mortgage Loans, approximately
66.92% of the group 2 mortgage loans, approximately 76.18% of the
group 3 mortgage loans, approximately 68.15% of the group 4
mortgage loans, and approximately 67.53% of all of the mortgage
loans were originated under the accelerated processing programs.
Mortgage loans in the accelerated processing programs are subject
to less stringent documentation requirements. None of the group 1
mortgage loans, approximately 0.31% of the group 2 mortgage loans,
none of the group 3 mortgage loans, none of the group 4 mortgage
loans, and approximately 0.26% of all of the mortgage loans were
originated under the accelerated processing programs of All-Ready
Home and Rate Reduction Refinance.
None of the mortgage loans are 'high cost' loans as defined under
any local, state, or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
see the press release 'Fitch Revises Rating Criteria in Wake of
Predatory Lending Legislation,' dated May 1, 2003, available on
the Fitch Ratings web site at http://www.fitchratings.com/
BANC OF AMERICA: Fitch Puts Low-B Ratings on 4 Certificate Classes
------------------------------------------------------------------
Banc of America Mortgage Securities, Inc., series 2005-6 mortgage
pass-through certificates, is rated by Fitch:
Group 1 certificates:
-- $268,591,100 classes 1-A-1 through 1-A-18, 1-A-R, and 30-
IO 'AAA' ('senior certificates');
-- $3,324,000 class 30-B-1 'AA';
-- $1,385,000 class 30-B-2 'A';
-- $831,000 class 30-B-3 'BBB';
-- $554,000 class 30-B-4 'BB';
-- $277,000 class 30-B-5 'B'.
Group 2 certificates:
-- $65,393,000 classes 2-A-1, and 15-IO 'AAA' (senior
certificates');
-- $399,000 class 15-B-1 'AA';
-- $200,000 class 15-B-2 'A';
-- $133,000 class 15-B-3 'BBB';
-- $100,000 class 15-B-4 'BB';
-- $67,000 class 15-B-5 'B'.
Group 1 and 2 certificates:
-- $1,789,343 class A-PO 'AAA' (representing the $1,602,575
class 30-PO and $186,767 class 15-PO components; which are
not severable).
The 'AAA' ratings on the group 1 senior certificates reflects the
2.45% subordination provided by the 1.20% class 30-B-1, the 0.50%
class 30-B-2, the 0.30% class 30-B-3, the 0.20% privately offered
class 30-B-4, the 0.10% privately offered class 30-B-5, and the
0.15% privately offered class 30-B-6. Classes 30-B-1, 30-B-2, 30-
B-3, 30-B-4, and 30-B-5 are rated 'AA', 'A', 'BBB', 'BB', and 'B',
respectively, based on their respective subordination. Class 30-
B-6 is not rated by Fitch.
The 'AAA' ratings on the group 2 senior certificates reflects the
1.50% subordination provided by the 0.60% class 15-B-1, the 0.30%
class 15-B-2, the 0.20% class 15-B-3 certificates, the privately
offered 0.15% class 15-B-4, the privately offered 0.10% class 15-
B-5, and the privately offered 0.15% class 15-B-6. Classes 15-B-1,
15-B-2, 15-B-3, 15-B-4, and 15-B-5 are rated 'AA', 'A', 'BBB',
'BB', and 'B', respectively, based on their respective
subordination. Class 15-B-6 is not rated by Fitch.
The ratings also reflect the quality of the underlying collateral,
the primary servicing capabilities of Bank of America Mortgage,
Inc. (rated 'RPS1' by Fitch) and Fitch's confidence in the
integrity of the legal and financial structure of the transaction.
The transaction is secured by two pools of mortgage loans. Loan
group 1 collateralizes the group 1 certificates. Loan group 2
collateralizes the group 2 certificates.
The group 1 collateral consists of 577 recently originated,
conventional, fixed-rate, fully amortizing, first lien, one- to
four-family residential mortgage loans with original terms to
stated maturity ranging from 240 to 360 months.
The weighted average original loan-to-value ratio for the mortgage
loans in the pool is approximately 65.67%. The aggregate
outstanding balance of the pool as of June 1, 2005 (the cut-off
date) is $276,980,172, the average balance of the mortgage loans
is $480,035, and the weighted average coupon of the loans is
5.869%. The weighted average FICO credit score for the group is
752. Second homes constitute 6.56%, and there are no investor-
occupied properties. Rate/term and cashout refinances represent
26.27% and 29.61%, respectively, of the group 1 mortgage loans.
The states that represent the largest geographic concentration of
mortgaged properties are California (49.56%), Florida (7.16%),
Maryland (6.12%), and Virginia (5.86%). All other states
constitute fewer than 5% of properties in the group.
The group 2 collateral consists of 125 recently originated,
conventional, fixed-rate, fully amortizing, first lien, one- to
four-family residential mortgage loans with original WAM ranging
from 120 to 180 months. The weighted average OLTV for the
mortgage loans in the pool is approximately 62.46%. The aggregate
outstanding balance of the pool as of the cut-off date is
66,578,764, the average balance of the mortgage loans is $532,630,
and the WAC of the loans is 5.476%. The weighted average FICO
credit score for the group is 753. Second homes constitute
17.70%, and there are no investor-occupied properties. Rate/term
and cashout refinances represent 27.13% and 24.62%, respectively,
of the group 2 mortgage loans.
The states that represent the largest geographic concentration of
mortgaged properties are California (29.88%), Florida (13.95%),
Maryland (6.84%), Texas (6.68%), and Washington (5.41%). All
other states constitute fewer than 5% of properties in the group.
None of the mortgage loans are 'high cost' loans as defined under
any local, state, or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
see the press release 'Fitch Revises Rating Criteria in Wake of
Predatory Lending Legislation,' dated May 1, 2003, available on
the Fitch Ratings web site at http://www.fitchratings.com/
Banc of America Mortgage Securities, Inc. deposited the loans in
the trust, which issued the certificates, representing undivided
beneficial ownership in the trust. For federal income tax
purposes, an election will be made to treat the trust as a real
estate mortgage investment conduit. Wells Fargo Bank, National
Association will act as trustee.
BUEHLER FOODS: Brings-In Keen Realty as Real Estate Expert
----------------------------------------------------------
Buehler Foods, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of Indiana, Evansville
Division, for permission to employ Keen Realty, LLC, as their real
estate consultant.
The Debtors want Keen Realty to initially value the estates'
leases and restructure and renegotiate the terms of the leases.
In addition, Keen will also market any lease the Debtors might
want to sell.
The Debtors will pay Keen realty:
For evaluation:
-- $550 per lease;
For renegotiation:
-- if unsuccessful, $400 per lease;
-- 4% of the total savings of a successful lease
renegotiation or $1,500 if there is no savings;
For disposition:
-- if unsuccessful, $400 per lease; and
-- if successful, 4% of the gross proceeds.
Keen Realty's professionals' current hourly billing rates:
Designation Rate
----------- ----
President and Chairman $500
Associate/Administrative $125
Support/Researcher $125
To the best of the Debtors' knowledge, Keen Realty is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Jasper, Indiana, Buehler Foods, Inc., owns and
operates grocery stores under the BUY LOW and Save-A-Lot banners
in Illinois, Indiana, and Kentucky, North Carolina, and Virginia.
The company also sells gas at about a dozen locations. In 2004
Buehler Foods acquired 16 Winn-Dixie stores in Louisville,
Kentucky, and renamed them Buehler's Markets. Founded in 1940,
the company is still run by the Buehler family. The Company,
along with its three affiliates, filed for chapter 11 protection
on May 5, 2005 (Bankr. S.D. Ind. Case No. 05-70961). Jerald I.
Ancel, Esq., at Sommer Barnard Attorneys, PC, represents the
Debtors in their restructuring efforts. When the Debtor filed for
protection from its creditors, it estimated assets of $10 million
to $50 million and debts of $50 million to $100 million.
CALL-NET: Shareholders Okay Share-for-Share Purchase by RCI
-----------------------------------------------------------
Call-Net Enterprises Inc.'s shareholders voted overwhelmingly to
approve the acquisition of all of the Company's outstanding shares
by Rogers Communications Inc. pursuant to a plan of arrangement.
As reported in the Troubled Company Reporter on May 13, 2005,
Rogers Communications and Call-Net entered into a definitive
agreement under which RCI will acquire 100% of Call-Net in a share
for share transaction under a plan of arrangement.
Under the terms of the agreement, Call-Net Common and Class B
shareholders will receive a fixed exchange ratio of one RCI Class
B Non-voting share for each 4.25 outstanding shares of Call-Net,
representing a fully diluted equity value of approximately
$330 million. In total, it is expected that upon closing of the
transaction approximately 9.0 million RCI Class B Non-voting
shares will be issued representing approximately 3.2% of the pro
forma shares outstanding. Based upon the May 10, 2005 closing
price of the RCI Class B Non-voting shares, the transaction values
Call-Net at approximately $8.71 per share. At March 31, 2005,
Call-Net had senior secured notes due 2008 of $269.8 million
outstanding and cash and short-term investments of $79.6 million.
On Wednesday, June 29, shareholders of Call-Net voted to approve
the acquisition of Sprint Canada by RCI under a plan of
arrangement. Call-Net obtained approval of the transaction from
the Ontario Superior Court of Justice at hearing yesterday
morning. The acquisition is expected to close today, July 1,
2005. Following the closing, Rogers will begin the process of re-
branding Sprint Canada to the Rogers brand in cities across Canada
At March 31, 2005, Call-Net had senior secured notes due 2008 of
$269.8 million outstanding and cash and short-term investments of
$79.6 million.
BMO Nesbitt Burns is acting as financial advisor to Call-Net on
this transaction and has provided Call-Net's Board of Directors
with a fairness opinion that the consideration to be received
under the Plan of Arrangement is fair, from a financial point of
view, to the shareholders of Call-Net. Scotia Capital is acting
as financial advisor to Rogers on this transaction.
Rogers Communications, Inc., (TSX: RCI; NYSE: RG) is a diversified
Canadian communications and media company engaged in three primary
lines of business. Rogers Wireless is Canada's largest wireless
voice and data communications services provider and the country's
only carrier operating on the world standard GSM/GPRS technology
platform; Rogers Cable is Canada's largest cable television
provider offering cable television, high-speed Internet access and
video retailing; and Rogers Media is Canada's premier collection
of category leading media assets with businesses in radio,
television broadcasting, televised shopping, publishing and sport
entertainment.
Call-Net Enterprises Inc. (TSX: FON, FON.NV.B) --
http://www.callnet.ca/and http://www.sprint.ca/-- primarily
through its wholly owned subsidiary Sprint Canada Inc., is a
leading Canadian integrated communications solutions provider of
home phone, wireless, long distance and IP services to households,
and local, long distance, toll free, enhanced voice, data and IP
services to businesses across Canada. Call-Net, headquartered in
Toronto, owns and operates an extensive national fibre network,
has over 151 co-locations in five major urban areas including 33
municipalities and maintains network facilities in the U.S. and
the U.K.
* * *
As reported in the Troubled Company Reporter on May 31, 2005,
Standard & Poor's Rating Services affirmed its 'BB' long-term
corporate credit ratings and 'B-2' short-term credit ratings on
Rogers Communications Inc., Rogers Wireless Inc., and Rogers Cable
Inc. S&P said the outlook is stable.
As reported in the Troubled Company Reporter on June 14, 2005,
Fitch Ratings has initiated coverage of Call-Net Enterprises Inc.
and assigned a 'B-' rating to its senior secured notes. Fitch
also places the ratings of Call-Net on Rating Watch Positive due
to the CDN$330 million all-stock acquisition of Call-Net by Rogers
Communications Inc. (rated 'BB-' by Fitch). Approximately
US$223 million of debt securities are affected by these actions.
CALPINE CORP: Selling Domestic Oil & Gas Assets for $1.05 Billion
-----------------------------------------------------------------
Calpine Corporation (NYSE: CPN) agreed to sell all of its domestic
oil and gas exploration and production assets for $1.05 billion,
less transaction fees and expenses. The sale is scheduled to
close on July 7, 2005.
Rosetta Resources, Inc., a newly formed indirect, wholly owned
subsidiary of Calpine, has agreed to issue 45,312,500 of its
common shares for $725 million. At closing, Rosetta will use the
net proceeds from that transaction, together with $325 million of
proceeds from a new credit facility, to purchase all of Calpine's
domestic oil and gas exploration and production assets. As of
May 1, 2005, Calpine's proved oil and gas reserves totaled
approximately 383 billion cubic feet equivalent. Following this
transaction, which is subject to customary closing conditions,
Calpine will no longer own any interest in Rosetta.
The Rosetta common shares have been offered in a private placement
under Rule 144A, have not been registered under the Securities Act
of 1933, and may not be offered or sold in the United States
absent registration or an applicable exemption from registration
requirements.
The sale is part of a continuing effort to cut debt by $3 billion
in 2005. Reversals in electricity markets have left the Company
with a large amount of debt. The Company is trying to reduce
total debt to about $15 billion from $18 billion, the Wall Street
Journal reports.
Company spokeswoman Katherine Potter declined to identify the
buyer or buyers of the assets in the transaction.
Recently, the Company sold its 1,200-megawatt Saltend power plant
in Hull, England, to International Power PLC and Mitsui & Co. for
$925 million. Last September, it sold its gas reserves in the
Rocky Mountain region for $218.7 million and its Canadian natural-
gas and oil assets for $651.4 million.
Calpine Corporation -- http://www.calpine.com/-- supplies
customers and communities with electricity from clean, efficient,
natural gas-fired and geothermal power plants. Calpine owns,
leases and operates integrated systems of plants in 21 U.S.
states, three Canadian provinces and the United Kingdom. Its
customized products and services include wholesale and retail
electricity, natural gas, gas turbine components and services,
energy management, and a wide range of power plant engineering,
construction and operations services. Calpine was founded in
1984. It is included in the S&P 500 Index and is publicly traded
on the New York Stock Exchange under the symbol CPN.
* * *
As reported in the Troubled Company Reporter on June 23, 2005,
Standard & Poor's Ratings Services assigned its 'CCC' rating to
Calpine Corp.'s (B-/Negative/--) planned $650 million contingent
convertible notes due 2015. The proceeds from that convertible
debt issue will be used to redeem in full its High Tides III
preferred securities. The company will use the remaining net
proceeds to repurchase a portion of the outstanding principal
amount of its 8.5% senior unsecured notes due 2011. S&P said its
rating outlook is negative on Calpine's $18 billion of total debt
outstanding.
As reported in the Troubled Company Reporter on May 16, 2005,
Moody's Investors Service downgraded the debt ratings of Calpine
Corporation (Calpine: Senior Implied to B3 from B2) and its
subsidiaries, including Calpine Generating Company (CalGen: first
priority credit facilities to B2 from B1).
CALPINE CORP: Fitch Junks $650 Million 7.75% Convertible Notes
--------------------------------------------------------------
Fitch Ratings has assigned a 'CCC+' rating and Rating Watch
Evolving status to Calpine Corp.'s $650 million 7.75% contingent
convertible notes due June 2015.
Proceeds from the new notes will be utilized to redeem in full
CPN's outstanding High Tides III trust preferred securities
(issued by Calpine Capital Trust III) and repurchase a portion of
CPN's 8.5% senior notes due 2011. Fitch expects to withdraw its
current 'CCC' rating for CPN's outstanding High Tides III
securities upon completion of the redemption.
The new notes rank pari passu and bear the same rating as
approximately $4.7 billion of outstanding CPN senior unsecured
debt obligations. The notes are convertible into cash and shares
of CPN common stock anytime after May 31, 2014 or earlier based on
certain circumstances including the trading value of the
underlying notes and/or CPN's common stock. In addition, the
notes are convertible upon the occurrence of certain corporate
transactions including a 'change in control.' Based on the various
conversion mechanisms stated in the terms and conditions, the
maximum amount of notes CPN would potentially have to settle in
cash would approximate the $650 million face value of the notes.
CPN's outstanding credit ratings remain on Rating Watch Evolving
status where they were placed on May 25, 2005 following CPN's
announcement of an expanded asset sale program and accelerated
$3.0 billion debt reduction target by year-end 2005. Since that
time, CPN has made good progress toward achieving its goals.
CPN announced an agreement to monetize its remaining U.S. natural
gas reserves for $1.05 billion, proceeds of which will be utilized
to fund the previously announced tender offer for CPN's $785
million first lien secured notes due 2014. This follows the
announced sale of CPN's U.K. based Saltend plant for the
equivalent of $906 million and a nonbinding agreement to divest
four generating plants for $357 million. In addition, CPN has
completed approximately $378.1 million of project financings,
which could return up to $166.2 million net proceeds back to CPN.
Fitch continues to monitor CPN's progress in reducing debt and
achieving its stated operating cost reduction targets. Full
realization of the planned debt retirements and simplification of
CPN's capital structure could have positive credit implications,
while failure to achieve the full benefits from these initiatives
will likely lead to more aggressive restructuring measures that
Fitch would consider inconsistent to its existing rating levels.
CARAB INC: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Carab Inc.
dba Tom Quick Inn
411 Broad Street
Milford, Pennsylvania 18337
Bankruptcy Case No.: 05-53667
Type of Business: The Debtor owns and operates a hotel in Milford,
Pennsylvania.
Chapter 11 Petition Date: June 29, 2005
Court: Middle District of Pennsylvania (Wilkes-Barre)
Judge: John J. Thomas
Debtor's Counsel: Philip W. Stock, Esq.
Law Office of Philip W. Stock
706 Monroe Street
Stroudsburg, Pennsylvania 18360
Tel: (570) 420-0500
Fax: (570) 424-7555
Estimated Assets: $100,000 to $500,000
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 Largest Unsecured
Creditors.
C-BASS 2005-CB1: Moody's Rates Class B-5 Sub. Certificates at Ba2
-----------------------------------------------------------------
Moody's Investors Services has assigned a rating of Aaa to the
senior certificates in C-BASS's 2005-CB1 securitization of
subprime residential mortgage loans. In addition, Moody's
assigned ratings ranging from Aa2 to Ba2 to the subordinate
certificates. Moody's said that the mortgage pool backing the
transaction, which is seasoned about 11 months, is slightly
riskier than a typical subprime mortgage pool.
The rating on each class reflects the amount of credit support
available from:
* subordination,
* overcollateralization, and
* excess spread available to absorb losses.
The strong servicing capabilities of the servicer, C-BASS
affiliate Litton Loan Servicing LP, will help reduce losses on the
underlying collateral pool. Moody's has conferred upon Litton its
highest servicer quality rating, SQ1, for both special servicing
and primary servicing for prime and subprime quality mortgages.
C-BASS (Credit-Based Asset Servicing and Securitization) is a
mortgage investment company that focuses on:
* purchasing;
* servicing; and
* securitizing credit-sensitive residential mortgages, such as:
-- scratch and dent,
-- subprime, and
-- sub- and non-performing loans.
C-BASS is also one of the top purchasers and special servicers of
rated and non-rated subordinate securities in both the prime and
subprime MBS markets.
The complete rating actions are:
Depositor: Bond Securitization, L.L.C
Series: C-BASS Mortgage Loan Asset-Backed Certificates, Series
2005-CB1
Seller: Credit-Based Asset Servicing and Securitization LLC
Servicer: Litton Loan Servicing LP
* Class AV-1, rated Aaa
* Class AV-2, rated Aaa
* Class AV-3, rated Aaa
* Class AF-1, rated Aaa
* Class AF-2, rated Aaa
* Class AF-3, rated Aaa
* Class AF-4, rated Aaa
* Class M-1, rated Aa2
* Class M-2, rated A2
* Class M-3, rated A3
* Class B-1, rated Baa1
* Class B-2, rated Baa2
* Class B-3, rated Baa3
* Class B-4, rated Ba1
* Class B-5, rated Ba2
CCM MERGER: S&P Rates Proposed $625 Million Sr. Sec. Loan at B+
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Detroit, Michigan-based CCM Merger Inc., the
parent company of MotorCity Casino.
At the same time, Standard & Poor's assigned its 'B+' rating and a
recovery rating of '3' to the company's proposed $625 million
senior secured credit facility, reflecting Standard & Poor's
expectation that lenders would realize a meaningful recovery of
principal (50%-80%) in the event of a payment default.
In addition, Standard & Poor's assigned its 'B-' rating to the
company's proposed $200 million in senior unsecured notes due
2013, reflecting the large amount of priority debt in the capital
structure.
Proceeds from the proposed debt issuances will refinance existing
indebtedness used to fund the acquisition of MotorCity. The
outlook is stable.
"The ratings reflect the expectation for high debt levels over the
next few years to fund the acquisition and the future expansion of
MotorCity, as well as the company's reliance on a single-property
for cash flow generation and construction risks associated with a
proposed expansion," said Standard & Poor's credit analyst Emile
Courtney. "These factors are partially mitigated by some barriers
to new competition in Michigan, as commercial gaming cannot be
expanded without a voter referendum, solid customer demographics,
and expectations for stable cash flow generation," Mr. Courtney
added.
CHAPARRAL STEEL: Prices $300 Million of Senior Notes at 10%
-----------------------------------------------------------
Chaparral Steel Co., the wholly owned steel business of Texas
Industries, Inc. (NYSE: TXI), has priced its $300 million
aggregate principal amount of senior notes due 2013 at 10%.
Chaparral Steel intends to use the net proceeds from the Notes
offering and borrowings under a new senior secured revolving
credit facility to pay a cash dividend of approximately
$341 million to TXI in connection with the proposed spin-off of
Chaparral Steel Company to TXI's shareholders.
The Notes have not been registered under the Securities Act of
1933 or any state securities laws, and may not be offered or sold
in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act
and state securities laws.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy such Notes in any jurisdiction in
which such an offer or sale would be unlawful.
Texas Industries, Inc., is the largest producer of cement in Texas
and a major cement producer in California. TXI is also a major
supplier of construction aggregates, ready-mix concrete and
concrete products.
Chaparral Steel Company is the second largest producer of
structural steel products in North America and a major producer of
steel bar products.
* * *
As reported in the Troubled Company Reporter on June 20, 2005,
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Dallas, Texas-based Chaparral Steel Co. At the
same time, Standard & Poor's assigned its 'BB-' rating and its
recovery rating of '1' to Chaparral's proposed $150 million senior
secured revolving bank credit facility due 2010. The bank loan
rating and the '1' recovery rating indicate a high expectation of
full recovery of principal in the event of a payment default.
Standard & Poor's also assigned its 'B' rating to the Chaparral's
proposed $200 million senior unsecured notes due 2013 and its
$100 million senior floating rate notes due 2012. S&P said the
outlook is stable.
CHEVY CHASE: Moody's Rates Class B-5 Investor Certificates at B2
----------------------------------------------------------------
Moody's Investors Service has assigned ratings ranging from Aaa to
B2 for certain classes of investor certificates of the Chevy Chase
Funding LLC, Mortgage-Backed Certificates, Series 2005-2
residential mortgage securitization. Moody's analyst, Kruti Muni,
said the ratings are based on the credit quality of the underlying
loans and the credit support provided through subordination of the
subordinate certificates. The ratings are also based on the
transaction's cash flow and legal structure and on the servicing
ability of Chevy Chase Bank, F.S.B.
The complete rating action is:
Issuer: Chevy Chase Funding LLC, Mortgage-Backed Certificates,
Series 2005-2
Class Rating
* Class A-1 -- Aaa
* Class A-1I -- Aaa
* Class A-2 -- Aaa
* Class A-2I -- Aaa
* Class A-NA -- Aaa
* Class IO -- Aaa
* Class NIO -- Aaa
* Class B-1 -- Aa2
* Class B-1I -- Aa2
* Class B-1NA -- Aa2
* Class B-2 -- A2
* Class B-2I -- A2
* Class B-2NA -- A2
* Class B-3 -- Baa2
* Class B-4 -- Ba2
* Class B-5 -- B2
The notes are being offered in privately negotiated transactions
without registration under the 1933 Act. The issuance was
designed to permit resale under Rule 144A.
CONTRACTOR TECH: Taps Strategic Capital as Financial Consultant
---------------------------------------------------------------
Contractor Technology, Ltd., asks the U.S. Bankruptcy Court for
the Southern District of Texas, Houston Division, to employ
Strategic Capital Corporation as its financial consultant.
The current hourly rates of Strategic Capital's professionals who
will provide financial consultation services for the Debtors and
their current hourly billing rates:
Professional Rate
------------ ----
H. Malcolm Lovett, Jr. $410
Managing Directors $250 - $350
Associates $95 - $200
Administrative Staff $80
H. Malcolm Lovett, Jr., chairman and chief executive officer of
Strategic Capital, will be the primary financial consultant for
the Debtor. Mr. Lovett has served as crisis manager to numerous
business entities.
To the best of the Debtor's knowledge, Strategic Capital doesn't
hold any interest materially adverse to the Debtor, its estates
and creditors.
Headquartered in Houston, Texas, Contractor Technology, Ltd.
-- http://www.ctitexas.com/-- is a producer of recycled concrete
and asphalt. The Company filed for chapter 11 protection on
May 13, 2005 (Bankr. S.D. Tex. Case No. 05-37623). When the
Debtor filed for protection from its creditors, it estimated
assets and debts of $10 million to $50 million.
DEEP RIVER DEVELOPMENT: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Deep River Development Group, L.L.C.
415 Route 24
Chester, New Jersey 07930
Bankruptcy Case No.: 05-31279
Chapter 11 Petition Date: June 29, 2005
Court: District of New Jersey (Newark)
Debtor's Counsel: Morris S. Bauer, Esq.
Ravin Greenberg PC
101 Eisenhower Parkway
Roseland, New Jersey 07068-1028
Tel: (973) 226-1500
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
DELPHI CORP: Subsidiary Acquires Caretools' Principal Assets
------------------------------------------------------------
Delphi Medical Systems, a subsidiary of Delphi Corp. (NYSE: DPH),
acquired the principal assets of Caretools, a provider of
technologically advanced electronics medical record, EMR, systems.
"Delphi Medical's new software package will make Delphi Medical
Systems the only provider of easy-to-use handheld devices that can
monitor and provide 2-way communication with a variety of medical
devices," said Christophe Sevrain, Delphi Medical Systems managing
director. "The combination of Delphi Medical's devices and this
software application can reduce costs and save time for health
care providers, helping them optimize resources and provide care
where and when patients need it most."
This acquisition enables Delphi Medical Systems to immediately
offer this complete electronic medical record system to healthcare
providers on both personal computers and Personal Digital
Assistants or PDAs.
"This strategic acquisition is expected to strengthen our presence
in the medical device market and more importantly, help reduce
healthcare costs. By allowing more frequent patient virtual
visits through remote patient monitoring, these products help
enhance patients' quality of life," Mr. Sevrain said.
"Additionally, by helping health care providers become more
efficient and facilitating more frequent remote medical data
exchanges, we also help reduce overall costs for both patients and
care providers."
The software will soon be enhanced to provide short- and long-
range digital communication between the care provider and I.V.
pumps, vital signs monitors, respiratory devices, and dialysis
equipment, all of which are supplied by Delphi Medical. Medical
devices made by other companies can also be connected to the
software. These medical devices are used in alternate sites such
as long-term care facilities, nursing homes, doctors' offices,
specialized clinics, and ambulatory care vehicles.
This product was developed for GE Medical Information
Technologies, which still owns the licensing rights. The software
can be used with any Windows- based PC, or Windows CE-based PDA,
enabling doctors and nurses to continuously update, view, exchange
and print patients' information. The system complies with the
Health Insurance Portability and Accountability Act, HIPAA, by
protecting patients' health information.
Delphi Medical Systems is a world-class provider of technology,
products, and product development and manufacturing for Dialysis,
Infusion, Respiratory Care, Vital Signs Monitoring and Power
Mobility. Its capabilities stem from Delphi's vast technology
base, product development expertise and manufacturing excellence.
Delphi Corp. -- http://www.delphi.com/-- is the world's largest
automotive component supplier with annual revenues topping
$25 billion. Delphi is a world leader in mobile electronics and
transportation components and systems technology. Multi-national
Delphi conducts its business operations through various
subsidiaries and has headquarters in Troy, Michigan, USA, Paris,
Tokyo and Sao Paulo, Brazil. Delphi's two business sectors --
Dynamics, Propulsion, Thermal & Interior Sector and Electrical,
Electronics & Safety Sector -- provide comprehensive product
solutions to complex customer needs. Delphi has approximately
186,500 employees and operates 171 wholly owned manufacturing
sites, 42 joint ventures, 53 customer centers and sales offices
and 34 technical centers in 41 countries.
* * *
As reported in the Troubled Company Reporter on June 15, 2005,
Moody's Investors Service has affirmed the ratings of Delphi
Corporation, Senior Implied at B2 and Senior Secured Bank
Facilities at B1. Moody's said the rating outlook is Negative.
The bank loan rating was initially assigned on May 19, 2005, as
part of the company's refinancing plan. The affirmation follows
the disclosure by the company in its 8-K filing with the SEC on
June 9, 2005 that its Audit Committee had concluded that Delphi
"did not accurately disclose to credit rating agencies, analysts,
or the Board of Directors the amount of sales of accounts
receivable or factoring arrangements from the date of its
separation from General Motors until year-end 2004."
DELPHI CORP: Fitch Assigns BB- Rating to $2.8 Bil. Bank Facility
----------------------------------------------------------------
Fitch has assigned a rating of 'BB-' to Delphi Corporation's
$2.825 billion revolving credit and term loan agreement. The
assignment follows the indicative rating issued on May 20, 2005.
The ratings remain on Rating Watch Negative pending the
satisfactory resolution of certain accounting issues and the
filing of audited financial statements, although the continuing
deterioration in Delphi's operating performance and financial
position could also cause further downgrades in the interim.
The new bank facilities address short-term liquidity concerns
resulting from projected substantial negative cash flows and
pending maturities. Negative cash flows, expected to persist
through at least 2006, result from Delphi's high fixed-cost
structure, exposure to GM production volumes, outflows related to
restructuring actions, high raw material costs, and high required
pension contributions.
Delphi's balance sheet is expected to continue to deteriorate
through this period, with significant new debt incurred. A
reversal of negative cash flows will require stabilization of GM
volumes, significant reductions in Delphi's fixed cost structure,
and continued healthy growth in the company's non-GM business.
Over the longer term, reduced outflows associated with
restructuring activities and any reduction in the company's
underfunded pension position could free up cash to apply to
balance sheet repair.
Delphi remains highly exposed to GM sales declines or
restructuring actions that could result in further production
cutbacks. However, any concessions GM is able to achieve in its
negotiations with the UAW could assist Delphi in its own
negotiations. Severe conditions in the auto parts segment will
require substantial cost reductions across Delphi's cost structure
and are not limited to the cash-draining Automotive Holdings
Group. The new bank agreement should provide sufficient liquidity
for Delphi to meet its financial obligations through the scheduled
re-opening of its UAW contract in 2007.
Delphi's pension obligation represents a substantial claim on cash
flows over the near term that could be exacerbated by proposed
pension reform efforts. Tighter funding requirements could result
in further adverse rating actions. However, heavy mandated
contributions over the next several years are well in excess of
benefits being paid, indicating that the company could make
progress in narrowing its underfunded position with consistent
asset returns and/or interest rate increases.
The lack of audited financial statements, the surfacing of new
accounting/disclosure issues, and continuing turnover in key
financial positions remain a key concern.
The new bank facility is secured by substantially all of the
domestic assets and 65% of the equity of the first tier of the
foreign subsidiaries. Recoveries are supported by receivables and
inventory, but low value is ascribed to the company's PP&E given
the uncompetitive cost structure associated with a large portion
of its production facilities.
General Motors' U.S. market share has continued to erode in 2005,
with sales of medium and large sport-utility-vehicles declining in
excess of 20% year-to-date 2005 versus the prior year. While
Delphi's average content per GM vehicle is substantial, its
content on GM's SUVs is modestly higher than the GM average. GM
has been aggressively attacking inventories with new incentive
programs, which may support production volumes in the second half.
Nevertheless, with the continued decline in SUV sales, a
relatively dated product line in this segment, and new product
launches scheduled for early 2006, there may be additional
downside risk in GM's second-half SUV production volumes.
DESIGNS BY SKAFFLES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Lead Debtor: Designs by Skaffles, Inc.
10 West 33rd Street, Suite 802
New York, New York 10001
Bankruptcy Case No.: 05-14853
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
My Generation, LLC 05-14854
Type of Business: The Debtors import and distribute hair, belt and
other accessories and costume jewelry to major
retail discount chains throughout the United
States and Canada.
Chapter 11 Petition Date: June 30, 2005
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Scott K. Levine, Esq.
Sherri D. Lydell, Esq.
Platzer, Swergold, Karlin, Levine,
Goldberg & Jaslow, LLP
1065 Avenue of the Americas, 18th Floor
New York, New York 10018
Tel: (212) 593-3000
Fax: (212) 593-0353
Total Assets Total Debts
------------ -----------
Designs by Skaffles, Inc. $431,614 $4,034,000
My Generation, LLC $0 $1,064,000
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Gift House Company, Ltd. $891,776
Room 1202 27 Sec 1
Fu Hsing S Road
Tapei Taiwan Roc
Attn: Danny Hu
Tel: (886) 227-993136
Fax: (886) 226-583205
Accessories Connection, Inc. $734,004
603 Washington Avenue
Building #5, Suite B
Small Commodity Industrial
Dongyank, Zhejiang
Province P.R.O.C. 322100
Tel: (86579) 636-4836
Fax: (86579) 646-4830
IMT Accessories $272,000
1 East 33rd Street
New York, NY 10016
Mattel, Inc. $184,000
333 Continental Boulevard
El Sequndo, CA 90245
Link Logistics Corporation $179,318
4225 Fritch Drive, Suite 1
Bethlehem, PA 18020
Attn: Craig Beal
Tel: (610) 332-4900
Fax: (610) 332-1108
Adams & Co. Real Estate $145,306
P.O. Box 27958
Newark, NJ 07101-7958
Attn: David Levy
Tel: (917) 326-5511
Fax: (212) 689-9541
Alba Wheels Up International Inc. $87,263
150-30 132nd, Suite 208
Jamaica, NY 11434
Bon-Fame Co., Ltd. $82,330
7th Floor, #17
Lane 360 Sec1 Neihudist
Taipei, Taiwan
Attn: Anita or Peggy
Tel: (886) 287-972000
Fax: (886) 287-971000
Amer Grtgs/Joester Loris $60,000
419 Park Avenue South
New York, NY 10016
Evershine Creations (HK) Co. $57,179
9/F Flat 9, Elite Ind. Center
863 Cheung Sha Wan Road
Kowloon, Hong Kong
Attn: Emma Lin
Tel: (02) 253-73368
Fax: (02) 256-21515
Federal Express Corp. $43,323
P.O. Box 371461
Pittsburgh, PA 15250
Attn: Denise Holmes
Tel: (901) 395-3051
Fax: (901) 395-3283
Clo-Shure International, Inc. $41,874
5301 Tacony Street,
P.O. Box 208
Philadelphia, PA 19137
Universal Studio License $40,000
100 Universal City Plaza
Building 1220/02
Universal City, CA 91608
Yumark Bangkok Co., Ltd. $37,030
729/86 Soi Wat-Chan-Nai Ratcha
Dapisek Road Bang Pong Pang
Yannawa Bangkok, Thailand
Attn: Danai
Tel: (662) 898-3266
Fax: (662) 898-3288
Just Born $33,000
1300 Stefko Boulevard
Bethlehem, PA 18017
Evrglory Creations, Inc. $30,575
7th Floor, 17 Sze Ping Street
Taipei, Taiwan
Attn: Bob Tse
Tel: (886) 225-651338
Fax: (886) 225-628502
A & H Manufacturing Company $30,324
P.O. Box 19720
Johnston, RI 02919-0720
Attn: Laurie
Tel: (401) 943-5040 ext. 299
Fax: (401) 942-1160
ETA Import & Export, Ltd. $29,586
1 Cross Island Plaza, 3rd Floor
Rosedale, NY 11422
Attn: Shelly Stone
Felsen-Moscoe-Mitchell & Associates $29,167
6600 City West Parkway, Suite 100
Eden Prairie, MN 55344
Mahoney Cohen & Company $27,343
1065 Avenue of The Americas
New York, NY 10018
Attn: Jay Silver
EMAC OWNER: Moody's Reviews 2 Cert. Classes for Possible Downgrade
------------------------------------------------------------------
Moody's Investors Service has placed two classes of securities
issued by EMAC Owner Trust 2000-1 backed by loans to gas and
convenience store operators on review for possible downgrade. The
complete ratings actions are as follows:
Rating Action:
Issuer: EMAC Owner Trust 2000-1
* Class A-1 Certificates, rated B3, on review for possible
downgrade;
* Class A-2 Certificates, rated B3, on review for possible
downgrade.
The review action is due to the continued deterioration of the
pool and substantial writedowns that has eroded credit support for
the classes. As of the May 2005 distribution date, the
delinquency rate for the pool was 38%. The review will focus on
recoveries for the loans in special servicing and the impact on
the securities.
The notes were sold in a privately negotiated transaction without
registration under the Securities Act of 1933 under circumstances
reasonably designed to preclude a distribution thereof in
violation of the Act. The issuance has been designed to permit
resale under Rule 144A.
EMPIRE FINANCIAL: EFH Partners Purchases 1.6 Million Common Shares
------------------------------------------------------------------
Empire Financial Holding Company (Amex: EFH), a financial
brokerage services firm serving retail and institutional clients,
disclosed that EFH Partners, LLC has exercised its option to
purchase 1,666,666 restricted shares of Empire's common stock at
an aggregate exercise price of $1,000,000. As a result, EFH
Partners now owns:
-- 2,166,666 shares of Empire's common stock;
-- preferred stock of Empire convertible into an additional
1,166,666 shares of Empire's common stock; and
-- options to acquire 1,050,000 shares of Empire's common stock
from Empire's former chief executive officer.
"The additional capital received from EFH Partners will strengthen
our balance sheet, improve our net capital position and permit us
to continue to implement our business plan," Empire's President,
Donald A. Wojnowski Jr., said.
Empire Financial Holding Company, through its wholly owned
subsidiary, Empire Financial Group, Inc., provides full-service
retail brokerage services through its network of independently
owned and operated offices and discount retail securities
brokerage via both the telephone and the Internet. Through its
market-making and trading division, the Company offers securities
order execution services for unaffiliated broker dealers and makes
markets in domestic and international securities. Empire
Financial also provides turn-key fee based investment advisory and
registered investment advisor custodial services through its
wholly owned subsidiary, Empire Investment Advisors, Inc.
Going Concern Doubt
The audit report contained in its Annual Report on Form 10-KSB for
the year ended Dec. 31, 2004, contains an explanatory paragraph
that raises doubt about the Company's ability to continue as going
concern because the Company has had net losses from continuing
operations in 2004, 2003 and 2002, a stockholders' deficit and has
uncertainties relating to regulatory investigations.
At March 31, 2005, Empire Financial's balance sheet showed total
liabilities exceeding total assets by $1,308,937.
EURAMAX INT'L: Closing GSCP Emax Acquisition Merger Agreement
-------------------------------------------------------------
Euramax International, Inc., disclosed the closing of the
transactions contemplated by its previously announced Agreement
and Plan of Merger with GSCP Emax Acquisition, LLC. GSCP Emax
Acquisition, LLC is a newly formed company organized by Goldman
Sachs Capital Partners. Pursuant to the Merger Agreement, GSCP
Emax and certain members of Euramax management have acquired all
of the outstanding stock of Euramax.
In connection with the closing, the Company's previously announced
tender offer and consent solicitation for its outstanding 8-1/2%
Senior Subordinated Notes due 2011 expired at 12:00 P.M. (noon),
New York City time, on Wednesday, June 29, 2005. The Company has
accepted for purchase all of the $197,980,000 aggregate principle
amount of the Notes tendered, representing approximately 99% of
the total principal amount outstanding.
As previously announced, as result of the receipt of the requisite
amount of consents in connection with the Company's tender offer
and consent solicitation, the Company and Euramax International
Holdings B.V., the guarantors of the Notes and JPMorgan Chase
Bank, N.A., as trustee, entered into a Supplemental Indenture
dated May 17, 2005, which, upon becoming operative, amends the
original indenture dated Aug. 6, 2003, as previously amended and
supplemented, relating to the Notes. The Supplemental Indenture
became operative upon acceptance of the Notes for purchase in the
tender offer on June 29, 2005. The Supplemental Indenture
eliminates substantially all of the restrictive covenants and
certain events of default contained in the Original Indenture and
modifies the defeasance and other provisions contained in the
Original Indenture.
Euramax has delivered a notice of redemption to the Trustee to
redeem all $2,020,000 remaining outstanding principal amount of
the Notes, on the redemption date of July 29, 2005, at a
redemption price equal to the original principal amount thereof,
plus accrued interest to the redemption date and Applicable
Premium (as defined in the Indenture) as of the redemption date.
The Company has deposited funds required to pay the redemption
price with the Trustee pursuant to the terms of an irrevocable
trust agreement entered into with the Trustee in accordance with
Section 9.01 of the Indenture.
Euramax International, Inc., is an international producer of
value-added aluminum, steel, vinyl and fiberglass fabricated
products with facilities located in all major regions of the
continental United States as well as in the United Kingdom, The
Netherlands and France. The Company's customers include original
equipment manufacturers; commercial panel manufacturers and
transportation industry manufacturers; rural contractors; home
centers; home improvement contractors; distributors; industrial
and architectural contractors; and manufactured housing producers.
* * *
As reported in the Troubled Company Reporter on June 16, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Euramax International Inc., a manufacturer of various
aluminum, steel, vinyl, and glass fiber products to the building
and construction and transportation markets, to 'B+' from 'BB-'.
The downgrade reflects the debt-financed purchase of the company
by GSCP EMAX Acquisition LLC, a newly formed company organized by
Goldman Sachs Capital Partners and Euramax management. The
ratings have been taken off CreditWatch with negative
implications, where they were placed on April 15.
As part of the transaction, the company is issuing a new $720
million senior secured facility and retiring its 8.5% senior
subordinated notes after a near-complete tender by bondholders.
The borrowers for the new bank facility will include a newly
formed 100% owned subsidiary of Euramax -- Euramax Holdings
Inc. -- and its U.S. and European subsidiaries.
Standard & Poor's assigned a 'B+' rating to the company's $465
million first-lien senior secured bank facility and a 'B-' rating
to the company's $255 million second-lien senior secured bank
facility. Standard & Poor's withdrew its ratings on the 8.5%
senior subordinated notes, due 2011.
S&P said the outlook is negative.
FAIRPOINT COMMS: Appoints Walter Leach as EVP-Corporate Dev't.
--------------------------------------------------------------
FairPoint Communications, Inc. (NYSE: FRP) appointed Walter E.
Leach, Jr., as the company's Executive Vice President, Corporate
Development. John P. Crowley will assume the role of Executive
Vice President and Chief Financial Officer.
"Our acquisition goals are just as important to our strategic
objectives as marketing and efficient operations, and we are
excited that Mr. Leach will now be dedicated to managing this main
strategic objective," said Gene Johnson, FairPoint's Chairman and
Chief Executive Officer. "Mr. Leach's years of experience with
corporate development and finance, and his extensive knowledge of
FairPoint and its mission, will contribute significantly to the
future performance of our business."
Mr. Johnson continued, "Mr. Crowley joined FairPoint in May 2005
as Executive Vice President, Finance and Treasurer. In his role
as Chief Financial Officer, Mr. Crowley brings the financial
training, knowledge and experience needed to manage FairPoint's
careful cost control initiatives and our new, strengthened capital
structure. He will help continue FairPoint's focus on key growth
areas."
Walter Leach joined FairPoint in October 1994 as the company's
Chief Financial Officer. Prior to that, he spent 10 years at
Independent Hydro Developers as Executive Vice President,
responsible for project acquisition, financing and development
activities. From 1980 to 1984, he was Vice President, Investor
Relations for The Pillsbury Company and served as Treasurer,
Assistant Treasurer, and Controller for Burger King Corporation.
Mr. Crowley has extensive experience in finance and in the
telecommunications industry. From 2000 to 2004, Mr. Crowley was
an independent consultant in telecommunications investment
banking, serving clients in Europe and the US. From 1999 to 2000,
he was a Director in corporate finance at PricewaterhouseCoopers,
and from 1996 to 1999, Mr. Crowley was a Managing Director in
investment banking at BT/Alex. Brown and its predecessor company.
Previously he was active in telecommunications finance both as a
principal and in banking.
FairPoint Communications is a leading provider of communications
services to rural communities across the country. Incorporated in
1991, FairPoint's mission is to acquire and operate
telecommunications companies that set the standard of excellence
for the delivery of service to rural communities. Today,
FairPoint owns and operates 27 rural local exchange companies
(RLECs) located in 17 states. FairPoint serves customers with
approximately 276,167 access line equivalents (voice access lines
and high speed data lines, which include DSL, cable modem and
wireless broadband) as of March 31, 2005 and offers an array of
services, including local and long distance voice, data, Internet
and broadband offerings.
At March 31, 2005, FairPoint Communications' balance sheet showed
$266,698,000 of positive equity, compared to a $172,952,000
stockholders' deficit at Dec. 31, 2004.
FIREARMS TRAINING: March 31 Balance Sheet Upside-Down by $28 Mil.
-----------------------------------------------------------------
Firearms Training Systems, Inc. (OTC: FATS) reported its unaudited
fiscal year 2005 fourth quarter and full year results.
Revenues for the year increased $15.3 million to $88.4 million
versus last year's revenues of $73.1 million, an increase of
20.9%. Net income attributable to common stockholders was $2.6
million, compared to $5.8 million, in 2004. Last year's results
benefited significantly from the Company's ability to recognize in
net income a $1.9 million benefit in deferred tax assets. On a
before-tax basis, income in the current year was $5.0 million, a
27.1% increase over last year. This increase is driven by higher
revenues and operating income, as well as lower interest expense
and the elimination of mandatory preferred stock dividends.
For the quarter, revenue was $28 million versus $27.3 million last
year. Net income attributable to common stockholders was $0.03
per diluted share versus $0.11 per diluted share for the same
period of fiscal 2004. The net income per diluted share declined
due to the recognition in 2004 of the deferred tax assets
mentioned above, and by very favorable product mix last year that
drove quarterly gross margins to 48%. The gross margin we
achieved in the fourth quarter of 2005 was 37% and compares
favorably to historical results, reflecting continued cost
reductions and process improvements.
"We are very pleased with the Company's continued progress as
reflected in the 2005 results," Ronavan R. Mohling, the Company's
Chairman and Chief Executive Officer, said. "Revenue of $88.4
million represents a significant achievement towards the Company's
mission of continuing to lead the worldwide market in the
development and installation of systems for small-arms simulation
training."
Fiscal Year 2005 Highlights
During fiscal year 2005, the Company:
* Continued its record of strong growth in revenues for the
fifth consecutive year. Revenues in fiscal year 2005
increased 20.9%.
* Increased income before taxes by 27.1%.
* Negotiated a new five-year revolving credit and term loan
agreement reducing interest rates and enabling the Company
to reduce long-term debt by $12 million.
* Exchanged new Series C Preferred Stock for the Company's
previously issued mandatory redeemable Series B Preferred
Stock, which eliminated quarterly dividends unless declared
by the Company.
* Improved operations and yielded approximately $1.0 million
in cost reductions and continued the Company's long-term
improvements in gross margin.
* Improved working capital and cash management, resulting in
cash flow provided by operating activities of $14.7 million.
* Research and development technology advances generated
BLUEFIRE(TM), the first fully-sensored, patented tetherless
firearm simulator for the training of law enforcement and
military personnel.
* Evolved 21 years of technology expertise and developed one
common platform capable of generating significant
operational and customer benefits in the future.
* Won a $17 million competitive bid contract with the
Singapore government to provide state of the art sea-based
virtual training solutions.
"The Company's resources and technology are well-positioned for
fiscal year 2006," added Mr. Mohling.
Firearms Training Systems, Inc. -- http://www.fatsinc.com/--
designs and sells virtual training systems that improve the skills
of the world's military, law enforcement and security forces.
Utilizing quality engineering and advanced technology, FATS
provides a comprehensive range of training capabilities that
include small and supporting arms, judgmental, tactical and
combined arms. The Company serves U.S. and international
customers from headquarters in Suwanee, Georgia, with branch
offices in Australia, Canada, Netherlands and United Kingdom.
FATS, an ISO 9001:2000 certified company, celebrated its 20th
anniversary in 2004.
At Mar. 31, 2005, Firearms Training Systems, Inc.'s balance sheet
showed a $28,504,000 stockholders' deficit, compared to a
$35,681,000 deficit at Mar. 31, 2004.
FIREARMS TRAINING: Restating 2003, 2004 & 2005 Financial Reports
----------------------------------------------------------------
Firearms Training Systems, Inc. (OTC: FATS) is restating its
annual financial statements for fiscal years 2003 and 2004 and
quarterly financial statements for fiscal years 2004 and 2005.
In preparing its fiscal 2005 financial statements, the Company
determined that two percentage-of-completion contracts denominated
in foreign currencies were accounted for incorrectly resulting in
an understatement of revenues and overstatement of liabilities.
In the past, the accounting procedures used by the Company with
respect to these two contracts deferred the impact on revenues of
foreign currency fluctuations. The Company determined that its
method of deferring the recognition of foreign currency
fluctuations on these percentage-of-completion contracts was
incorrect and that a restatement is necessary. The adjustments
result from the correction of accounting errors and are not
attributable to any misconduct by Company employees.
The restatements, which are expected to result in an increase in
revenues, operating income and net income reported for those
periods, will be included in the Company's Form 10-K for the year
ended March 31, 2005. The Company will file a Form 12b-25
Notification of Late Filing with respect to its 2005 Form 10-K and
intends to file this report no later than July 14, 2005.
The Company said its management and Audit Committee have discussed
the matters giving rise to the restatement with the Company's
independent registered public accounting firm,
PricewaterhouseCoopers LLP.
Firearms Training Systems, Inc. -- http://www.fatsinc.com/--
designs and sells virtual training systems that improve the skills
of the world's military, law enforcement and security forces.
Utilizing quality engineering and advanced technology, FATS
provides a comprehensive range of training capabilities that
include small and supporting arms, judgmental, tactical and
combined arms. The Company serves U.S. and international
customers from headquarters in Suwanee, Georgia, with branch
offices in Australia, Canada, Netherlands and United Kingdom.
FATS, an ISO 9001:2000 certified company, celebrated its 20th
anniversary in 2004.
At Mar. 31, 2005, Firearms Training Systems, Inc.'s balance sheet
showed a $28,504,000 stockholders' deficit, compared to a
$35,681,000 deficit at Mar. 31, 2004.
GE BUSINESS: Fitch Places BB Rating on $17.8 Mil. Class D Certs.
----------------------------------------------------------------
Fitch rates GE Business Loan Trust 2005-1:
-- $622,500,000 (notional amount) class IO certificates 'AAA';
-- $178,936,000 class A-1 certificates 'AAA';
-- $100,000,000 class A-2 certificates 'AAA';
-- $348,575,863 class A-3 certificates 'AAA';
-- $49,915,716 class B certificates 'A';
-- $17,827,042 class C certificates 'BBB';
-- $17,827,042 class D certificates 'BB'.
The class IO and A ratings reflect credit enhancement provided by
the subordination of the class B certificates (7.0%), the class C
certificates (2.50%), the class D certificates (2.50%), the spread
account, and expected excess spread.
The class B rating reflects credit enhancement provided by the
subordination of the class C certificates, class D certificates,
the spread account, and expected excess spread.
The class C rating reflects credit enhancement provided by the
subordination of the class D certificates, the spread account, and
expected excess spread.
The class D rating reflects credit enhancement provided by the
spread account and expected excess spread. The ratings address
the payment of interest and principal in accordance with the terms
of the legal documents.
The certificates are backed primarily by a pool of conventional
business loans and Small Business Administration Section 504
Program (SBA 504) loans made to small businesses. The loans are
secured by first liens on owner-occupied or single-tenant retail,
office, industrial, or other commercial real estate. None of the
underlying business loans are insured or guaranteed by any
governmental agency. The loans were originated by GE Commercial
Finance Business Property Corporation and the Small Business
Finance lending division of General Electric Capital Corporation.
This transaction represents the fifth term securitization of loans
originated by the GECF and SBF business units.
The trust assets consist primarily of 354 business loans made to
305 borrowers. The $713 million underlying collateral pool
consists of approximately $489 million (68.6%) of conventional
business loans originated by GECF and approximately $224 million
(31.4%) of SBA 504 loans originated by SBF. The loans are secured
by first liens on owner-occupied or single tenant retail, office,
industrial, or other commercial real estate. The pool is
diversified geographically, with loans from 42 states. The
largest state concentrations are in California (16.5%), Texas
(10.0%), Florida (7.2%), Washington (5.5%) and New York (5.2%).
Fitch took into consideration both quantitative and qualitative
factors in evaluating GEBLT's credit enhancement structure. After
reviewing historical default and recovery data on both an annual
and static pool basis to develop an expected loss rate, Fitch
analyzed cash flows reflecting stressed default rates, recovery
rates, and recovery timing lags under several default timing
scenarios.
Fitch also assessed borrower and balloon payment concentrations
over the life of the transaction. This review included a
quarterly comparison of top borrower concentrations with expected
credit enhancement. Fitch's ratings also took into consideration
the historical delinquency and loss performance of GECF and SBF;
the origination, underwriting, and servicing experience of GECF
and SBF; the role of GECC as master servicer; and the sound legal
and payment structure.
The IO certificates will receive fixed-rate interest payments.
Classes A-1, A-3, B, C and D certificates will pay floating-rate
interest based on a spread over one-month London Interbank Offered
Rate. The class A-2 certificates will pay interest based on a
fixed rate. Principal will be paid to the class A, B, C and D
certificates on a pro rata basis, however, principal will be
distributed sequentially within the class A certificates.
The interest rate swap counterparty is General Electric Capital
Services, Inc., a subsidiary of General Electric Company. The
class IO, A, B, C, and D certificates were privately placed
pursuant to Rule 144A.
GEM VIII: Moody's Rates $6 Million Class Q-3 Notes at Ba3
---------------------------------------------------------
Moody's Investors Service assigned ratings of:
* Aaa to the U.S.$ 200,000,000 Class A-1A Floating Rate Senior
Secured Delayed Drawdown Notes Due 2017;
* Aaa to the U.S.$ 25,000,000 Class A-1B Floating Rate Senior
Secured Revolving Notes Due 2017;
* Aaa to the U.S.$ 56,000,000 Class A-2 Floating Rate Senior
Secured Term Notes Due 2017;
* Aa2 to the U.S.$ 25,000,000 Class A-3 Floating Rate Senior
Secured Term Notes Due 2017;
* A3 to the U.S.$ 40,000,000 Class B Floating Rate Senior
Subordinate Secured Term Notes Due 2017;
* Baa2 to the U.S.$ 32,000,000 Class C Floating Rate
Subordinate Secured Term Notes Due 2017;
* Ba2 to the U.S.$ 12,000,000 Class D-1 Floating Rate Junior
Subordinate Secured Term Notes Due 2017;
* Ba2 to the U.S.$ 5,000,000 Class D-2 Fixed Rate Junior
Subordinate Secured Term Notes Due 2017;
* A3 to the U.S.$ 10,000,000 Class Q-1 Notes Due 2017;
* Ba2 to the U.S.$ 10,000,000 Class Q-2 Notes Due 2017; and
* Ba3 to the U.S.$ 6,000,000 Class Q-3 Notes Due 2017.
Also issued were U.S.$ 60,000,000 of Notes that were not rated by
Moody's.
The collateral of GEM VIII, Limited consists primarily of emerging
market corporate and sovereign debt.
According to Moody's, the ratings on are based on the expected
loss posed to holders of the notes relative to the promise of
receiving the present value of such payments. Moody's also
analyzed the risk of diminishment of cashflows from the underlying
portfolio of emerging market debt due to:
* defaults,
* the characteristics of these assets, and
* the safety of the transaction's legal structure.
The Collateral Manager is TCW Asset Management Company, located in
Los Angeles.
GMACM MORTGAGE: Fitch Rates $2.5 Million Class B Certs. at Low-B
----------------------------------------------------------------
Fitch rates GMACM mortgage pass-through certificates, 2005-AF1:
-- $218,986,322 classes A-1 through A-13, PO, IO, and R
certificates (senior certificates) 'AAA';
-- $6,946,000 class M-1 'AA';
-- $3,179,000 class M-2 'A';
-- $2,355,000 class M-3 'BBB';
-- $1,648,000 class B-1 'BB';
-- $824,000 class B-2 'B'.
The privately offered class B-3 ($1,531,153) is not rated by
Fitch.
The 'AAA' rating on the senior certificates reflects the 7.00%
subordination provided by the 2.95% class M-1, the 1.35% class M-
2, the 1.00% class M-3, the 0.70% class B-1, the 0.35% class B-2,
and the 0.65% class B-3.
Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the
ratings reflect the quality of the mortgage collateral and the
strength of the legal and financial structures and GMAC Mortgage
Corporation's capabilities as servicer. Fitch currently rates
GMAC Mortgage Corporation 'RPS1' as a primary servicer for prime
residential mortgage loans.
The total mortgage pool consists of 1,227 fixed-rate mortgage
loans with an aggregate principal balance of approximately
$235,469,476.02 as of the cut-off date, secured by first liens on
one- to four-family residential properties. The weighted-average
original loan-to-value ratio was 70.84%. Cash-out and rate/term
refinance loans represent 52.46% and 14.81% of the mortgage pool,
respectively. Second homes and investor property account for
4.22% and 17.45% of the pool. The average loan balance is
$192,608.57. The weighted average FICO credit score is
approximately 697. The three states that represent the largest
portion of mortgage loans are California (19.85%), Massachusetts
(8.78%) and Florida (7.88%).
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
please see the press release issued May 1, 2003 entitled 'Fitch
Revises Rating Criteria in Wake of Predatory Lending Legislation,'
available on the Fitch Ratings web site at
http://www.fitchratings.com/
The loans were sold by GMACM to Residential Asset Mortgage
Products, the depositor. The depositor, a special purpose
corporation, deposited the loans in the trust, which then issued
the certificates. For federal income tax purposes, election will
be made to treat the trust fund as one or more real estate
mortgage investment conduits.
GREENWICH CAPITAL: Moody's Affirms $8.7M Class O Cert.'s B2 Rating
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of three classes
and affirmed the ratings of eighteen classes of Greenwich Capital
Commercial Funding Corp., Commercial Mortgage Pass-Through
Certificates, Series 2002-C1 as:
-- Class A-1, $54,280,192, Fixed, affirmed at Aaa
-- Class A-2, $80,537,961, Fixed, affirmed at Aaa
-- Class A-3, $137,776,000, Fixed, affirmed at Aaa
-- Class A-4, $608,235,000, Fixed, affirmed at Aaa
-- Class XPB, Notional, affirmed at Aaa
-- Class XP, Notional, affirmed at Aaa
-- Class XC, Notional, affirmed at Aaa
-- Class B, $46,515,000, WAC Cap, upgraded to Aa1 from Aa2
-- Class C, $11,629,000, WAC Cap, upgraded to Aa2 from Aa3
-- Class D, $14,536,000, WAC Cap, upgraded to Aa3 from A1
-- Class E, $20,350,000, WAC Cap, affirmed at A2
-- Class F, $15,990,000, WAC Cap, affirmed at A3
-- Class G, $15,989,000, WAC Cap, affirmed at Baa1
-- Class H, $17,443,000, WAC Cap, affirmed at Baa2
-- Class J, $14,536,000, WAC CAP, affirmed at Baa3
-- Class K, $20,350,000, WAC Cap, affirmed at Ba1
-- Class L, $20,351,000, WAC Cap, affirmed at Ba2
-- Class M, $8,721,000, WAC Cap, affirmed at Ba3
-- Class N, $5,815,000, WAC Cap, affirmed at B1
-- Class O, $8,721,000, WAC Cap, affirmed at B2
-- Class P, $4,361,000, WAC Cap, affirmed at B3
As of the June 13, 2005 distribution date, the transaction's
aggregate balance has decreased by approximately 2.9% to $1.14
billion from $1.18 billion at securitization. The Certificates
are collateralized by 111 mortgage loans. The loans range in size
from less than 1.0% to 6.3% of the pool, with the top ten loans
representing 42.6% of the pool. The pool includes one shadow
rated loan. Two loans representing 1.0% of the pool have defeased
and been replaced with U.S. Government securities.
Two loans, representing less than 1.0% of the pool, are in special
servicing. Moody's is not projecting any losses from the
specially serviced loans at this time. Eleven loans, representing
6.7% of the pool, are on the master servicer's watchlist. One
loan has been liquidated from the trust, resulting in a realized
loss of approximately $1.9 million.
Moody's was provided with partial or full year 2004 operating
results for 95.6% of the performing loans. Moody's conduit loan
to value ratio is 85.5% compared to 87.8% at securitization.
Based on Moody's analysis, 6.7% of the conduit pool has a LTV
greater than 100.0% compared to 4.3% at securitization. The
upgrade of Classes B, C and D is primarily due to stable pool
performance and increased subordination levels.
The shadow rated loan is the 311 South Wacker Drive Loan ($72.5
million -- 6.3%), a 50.0% participation interest in a $145.0
million first mortgage loan. The loan is secured by a 1.3 million
square foot Class A office tower located in Chicago's West Loop.
The property was constructed in 1990 and is located adjacent to
Sears Tower. The property was 71.2% occupied as of year-end 2004
compared to 82.4% at securitization. Major tenants include:
* Freeborn & Peters LLP (8.8% NRA; lease expiration
November 2022);
* Reuters Data (3.5% NRA, lease expiration in May 2008); and
* First Industrial Realty (3.4% NRA; lease expiration
June 2007).
Although the Chicago office vacancy rate has stabilized at 15.0%,
rents have declined since securitization. However, the property
benefits from:
* a strong location,
* quality improvements,
* a diversified tenant profile, and
* strong sponsorship.
The loan, which is interest only for its five year term, is
sponsored by Walton Street Capital Fund III. The loan is shadow
rated Baa3, the same as at securitization.
The top three conduit loans represent 15.6% of the outstanding
pool balance. The largest conduit loan is the Lake Merritt Plaza
Loan ($68.3 million -- 6.0%), which is secured by a 513,400 square
foot office property located in Oakland, California. The property
is 85.0% occupied, essentially the same as at securitization. The
largest tenant is the law firm of Crosby, Heafy, Roach and May PC,
(17.0% NRA; lease expiration December 2012). Moody's LTV is
72.5%, compared to 74.8% at securitization.
The second largest conduit loan is the Jamaica Center Loan ($57.6
million -- 5.0%), which is secured by a 215,800 square foot retail
center located in Jamaica (Queens), New York. The property was
completed in May 2002 and is 99.0% occupied, essentially the same
as at securitization. Major tenants include:
* Old Navy (13.9%; lease expiration May 2012);
* The Gap (7.0%; lease expiration May 2012);
* Bally's Fitness (12.1% GLA; lease expiration June 2017); and
* a 15-screen multiplex movie theater operated by National
Amusements (31.2% GLA; lease expiration May 2022).
In addition, the property has an office tenant, Queens Educational
Opportunity Center, which is a division of the State University of
New York (17.5% GLA; lease expiration December 2012). The ten
year loan was structured with an initial two year interest only
period. Moody's LTV is 82.5%, essentially the same as at
securitization.
The third largest conduit loan is the 900 Nicollet Mall Loan
($52.2 million -- 4.6%), which is secured by a 500,000 square foot
Class A office/retail building constructed in 2001 and located in
the central business district of Minneapolis, Minnesota. The
property is 85.7% occupied compared to 79.8% at securitization.
Major tenants include:
* Retek, Inc. (48.6% NRA; lease expiration May 2013); and
* Ryan Companies (14.4%, lease expiration July 2015).
Retek, Inc. is a software company that was recently acquired by
Oracle Corporation (Moody's senior unsecured rating A3). Ryan
Companies is the property management company and an affiliate of
the borrower. Moody's LTV is 81.9%, compared to 83.7% at
securitization.
HAYES LEMMERZ: Former CFO William Shovers Receives Wells Notice
---------------------------------------------------------------
Standard Microsystems Corp., has been advised that William D.
Shovers, Senior Vice President and Chief Financial Officer,
received a "Wells Notice" from the staff of the Securities and
Exchange Commission (SEC) in connection with its investigation
concerning Hayes Lemmerz International, Inc., where Mr. Shovers
previously served as Chief Financial Officer.
The matters referenced in the notice do not relate to SMSC
or Mr. Shovers' employment by SMSC. Mr. Shovers will have an
opportunity to respond to the SEC staff before any formal
recommendation is made, and he has advised the Company that he
intends to cooperate with the SEC staff in an effort to resolve
the matter.
In addition, Mr. Shovers requested, and SMSC agreed, that he be
relieved of his position as Chief Financial Officer pending
disposition of the SEC matter. He will continue to be employed by
the Company in a finance and corporate development capacity.
SMSC's Board of Directors has appointed Andrew M. Caggia, a
Senior Vice President and Director and the former Chief Financial
Officer of the Company, to serve as acting Chief Financial
Officer.
Hayes Lemmerz International, Inc., is a world leading global
supplier of automotive and commercial highway wheels, brakes,
powertrain, suspension, structural and other lightweight
components. The Company filed for chapter 11 protection on
December 5, 2001 (Bankr. D. Del. Case No. 01-11490) and emerged in
June 2003. Eric Ivester, Esq., and Mark S. Chehi, Esq., at
Skadden, Arps, Slate, Meager & Flom represent the Debtors. (Hayes
Lemmerz Bankruptcy News, Issue No. 67; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on April 11, 2005,
Moody's Investors Service assigned a B2 rating for HLI Operating
Company, Inc.'s proposed $150 million guaranteed senior secured
second-lien term loan facility. HLI Opco is an indirect
subsidiary of Hayes Lemmerz International, Inc. The rating
outlook remains stable.
While the company has reaffirmed its earning guidance and the
senior implied and guaranteed senior secured first-lien facility
ratings remain unchanged at B1, Moody's determined that widening
of the downward notching of HLI Opco's guaranteed senior unsecured
notes was necessary to reflect additional layering of the
company's debt. The senior unsecured notes are effectively
subordinated to the proposed new senior secured second-lien term
facility, and approximately $75 million of higher-priority debt
will be added to the capital structure.
These specific rating actions were taken by Moody's:
* Assignment of a B2 rating for HLI Operating Company, Inc.'s
proposed $150 million guaranteed senior secured second-lien
credit term loan C due June 2010;
* Downgrade to B3, from B2, of the rating for HLI Operating
Company, Inc.'s $162.5 million remaining balance of 10.5%
guaranteed senior unsecured notes maturing June 2010 (the
original issue amount of $250 million was reduced as a result
of an equity clawback executed in conjunction with Hayes
Lemmerz's February 2004 initial public equity offering);
* Affirmation of the B1 ratings for HLI Operating Company,
Inc.'s approximately $527 million of remaining guaranteed
senior secured first-lien credit facilities, consisting of:
* $100 million revolving credit facility due June 2008;
* $450 million ($427.3 million remaining) bank term loan B
facility due June 2009 (which term loan is still expected to
be partially prepaid through application of about half of the
net proceeds of the proposed incremental debt issuance);
* Affirmation of the B1 senior implied rating;
* Downgrade to Caa1, from B3, of the senior unsecured issuer
rating (which rating does not presume the existence of
subsidiary guarantees).
HAYES LEMMERZ: Wants Court to Dismiss BNY Capital's Counterclaims
-----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on May 10,
2005, Hayes Lemmerz International, Inc., and BNY Capital Resources
Corporation are parties to a Master Equipment Lease Agreement
dated March 13, 1998. Under the Lease Agreement, Hayes leased
from BNY Capital certain machine tools and related equipment used
in the manufacture of brake components. These machine tools are
assigned to Hayes' manufacturing facility in Homer, Michigan, and
are covered by several Schedules. Each Schedule incorporated the
Lease by reference and constitutes a separate and independent
contractual obligation.
The base term for the Lease, as set forth in each Schedule,
expired on March 31, 2005.
Section 14 of the Lease provides that Hayes may elect to return
the Equipment to BNY Capital at the termination or expiration of
the Lease or Schedule by written notice to BNY Capital 90 days
prior to the return of all, "but not less than all, of the
Equipment."
BNY Capital Sought TRO
BNY Capital asked the U.S. Bankruptcy Court for the District of
Delaware for a temporary restraining order directing Hayes to
cease and desist from using the Equipment, and to disable (but not
to de-install or disassemble) the Equipment.
In the absence of a restraining order, BNY Capital faces immediate
and irreparable exposure to liability arising from Hayes' on-going
use of the unsafe Equipment. BNY Capital also faces impairment of
the Equipment value if Hayes attempts to de-install and
disassemble the Equipment before it is properly repaired and
recertified for use by EMAG, LLC - the manufacturer of the
Equipment.
Parties Stipulate on TRO Motion
As previously reported, BNY Capital Resources Corporation asked
the United States District Court for the Eastern District of
Michigan, Southern Division, for a temporary restraining order
requiring Hayes Lemmerz International, Inc., to cease and desist
from using, and to disable but not disassemble, the equipment.
Hayes denies BNY Capital's allegations and contends that BNY
Capital is not entitled to a TRO.
The parties have reached an agreement with respect to the use of
the Equipment, and the Honorable Judge Arthur Tarnow ordered
Hayes, its officers, employees, agents and anyone acting on its
behalf not to use the Equipment and to power down the equipment
according to the manufacturers' recommended procedures.
The parties stipulate and the Michigan District Court orders Hayes
not to de-install nor disassemble the Equipment until further
order. The Court allows BNY Capital to inspect the Equipment at
reasonable times during normal business hours and with reasonable
notice to Hayes for the purpose of confirming that Hayes is not
using the Equipment. An individual selected by Hayes may
accompany BNY Capital on the inspection.
Hayes Replies to BNY Capital's Counterclaim
Hayes tells Judge Tarnow that it has not breached the Lease and
Schedules by failing to make payments according to their terms and
by failing and refusing to perform other obligations under the
Lease and Schedules. According to Hayes, BNY Capital did not
suffer damages as a result of Hayes' alleged breach of the Lease
and Schedules.
Hayes denies that it has engaged, and continues to engage, in
distinct acts of dominion wrongfully exerted over the Equipment.
BNY Capital, according to Hayes, is not entitled to recover three
times the amount of actual damages sustained, plus costs and
reasonable attorneys' fees from Hayes as a result of its acts of
conversion.
Hayes admits that it received a statement of account from BNY
Capital on February 9, 2005. Hayes denies that the account has
become stated between the parties pursuant to Michigan Compiled
Laws 600.2145. Hayes admits that it has not paid the alleged
"account stated" because it does not owe payment on the alleged
account.
Hayes believes that BNY Capital is not entitled to the Lessee
Liability Amount as alternative measure of damages, which includes
all costs related to repairing, recertifying, de-installing,
disassembling, packing, crating, shipping and re-assembling the
Equipment.
On April 6, 2005, BNY Capital asked Hayes for a written
confirmation that Hayes had disabled and ceased using the
Equipment and that it had contacted EMAG, LLC -- the manufacturer
of the Equipment -- to de-install and disassemble the Equipment.
Hayes admits that as of May 3, 2005, it has not provided the
written confirmation requested in the April 6, 2005, letter
because it had no obligation to provide BNY Capital with that
confirmation. But Hayes denies the allegation that it has not
ceased using or disabled the Equipment. Hayes admits that, as of
May 3, 2005, it had not contacted EMAG to de-install or
disassemble the Equipment because it had no duty to contact EMAG.
Thomas F. Cavalier, Esq., at Barris, Sott, Denn & Driker,
P.L.L.C., in Detroit, Michigan, asserts that BNY Capital has
failed to state a claim on which relief may be granted to it.
Mr. Cavalier notes that Section 19(a) of the Lease is an
unenforceable penalty to the extent that it permits the recovery
of an amount equal to the Stipulated Loss Value of the Equipment,
if BNY Capital cancels the lessee's right of possession.
Additionally, Mr. Cavalier contends that BNY Capital's claims, or
some of them, are barred by the doctrine of unclean hands, the
doctrine of waiver, the doctrine of estoppel, and the choice of
law provision in the Lease.
Hayes therefore asks the Court for a favorable judgment, to
dismiss all of BNY Capital's counterclaims and award Hayes its
costs of suit.
Hayes Lemmerz International, Inc., is a world leading global
supplier of automotive and commercial highway wheels, brakes,
powertrain, suspension, structural and other lightweight
components. The Company filed for chapter 11 protection on
December 5, 2001 (Bankr. D. Del. Case No. 01-11490) and emerged in
June 2003. Eric Ivester, Esq., and Mark S. Chehi, Esq., at
Skadden, Arps, Slate, Meager & Flom represent the Debtors. (Hayes
Lemmerz Bankruptcy News, Issue No. 67; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on April 11, 2005,
Moody's Investors Service assigned a B2 rating for HLI Operating
Company, Inc.'s proposed $150 million guaranteed senior secured
second-lien term loan facility. HLI Opco is an indirect
subsidiary of Hayes Lemmerz International, Inc. The rating
outlook remains stable.
While the company has reaffirmed its earning guidance and the
senior implied and guaranteed senior secured first-lien facility
ratings remain unchanged at B1, Moody's determined that widening
of the downward notching of HLI Opco's guaranteed senior unsecured
notes was necessary to reflect additional layering of the
company's debt. The senior unsecured notes are effectively
subordinated to the proposed new senior secured second-lien term
facility, and approximately $75 million of higher-priority debt
will be added to the capital structure.
These specific rating actions were taken by Moody's:
* Assignment of a B2 rating for HLI Operating Company, Inc.'s
proposed $150 million guaranteed senior secured second-lien
credit term loan C due June 2010;
* Downgrade to B3, from B2, of the rating for HLI Operating
Company, Inc.'s $162.5 million remaining balance of 10.5%
guaranteed senior unsecured notes maturing June 2010 (the
original issue amount of $250 million was reduced as a result
of an equity clawback executed in conjunction with Hayes
Lemmerz's February 2004 initial public equity offering);
* Affirmation of the B1 ratings for HLI Operating Company,
Inc.'s approximately $527 million of remaining guaranteed
senior secured first-lien credit facilities, consisting of:
* $100 million revolving credit facility due June 2008;
* $450 million ($427.3 million remaining) bank term loan B
facility due June 2009 (which term loan is still expected to
be partially prepaid through application of about half of the
net proceeds of the proposed incremental debt issuance);
* Affirmation of the B1 senior implied rating;
* Downgrade to Caa1, from B3, of the senior unsecured issuer
rating (which rating does not presume the existence of
subsidiary guarantees).
HEARTLAND TECHNOLOGY: Section 341(a) Meeting Slated for July 19
---------------------------------------------------------------
The United States Trustee for Region 10 will convene a meeting of
Heartland Technology Inc.'s creditors at 1:30 p.m., on July 19,
2005, at 227 W. Monroe Street, Room 3330 in Chicago, Illinois.
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 Chicago, Illinois, Heartland Technology Inc.
fka Milwaukee Land Company, acquired and managed land used in
the railroad operations. The Company and its affiliates filed for
chapter 11 protection on June 15, 2005 (Bankr. N.D. Ill. Case No.
05-23747). Geoffrey S. Goodman, Esq., at Foley & Lardner LLP
represents the Debtors in their liquidation efforts. When the
Debtors filed for protection from their creditors, they estimated
between $10,000,000 in total assets and $34,000,000 in total
debts.
HEDSTROM CORP: Hart Corporation Approved as Real Estate Broker
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
gave Hedstrom Corporation and its debtor-affiliates permission to
employ The Hart Corporation as their real estate broker.
The Debtors explain that Hart Corporation is well qualified as
their real estate broker because of its considerable experience in
marketing and selling commercial real estate.
The Debtors relate that Hart Corporation's primary services
include marketing and selling their land, buildings and
improvements located at 550 Sunnyside Drive, Bedford,
Pennsylvania. Hart Corp. will also be involved in the marketing
and selling of other property of the Debtors that they plan to
auction or dispose off as part of their reorganization efforts and
increase the value of their estates.
David E. Beal, a Member at Hart Corporation, discloses that the
Firm will be paid for its documented and marketing expenses up to
an aggregate amount of $10,000.
Mr. Beal reports that Hart Corporation will be paid with a Sales
Commission in the sum of the greater of either:
a) $60,000; or
b) 5%, (except in the case of a cooperating brokerage
transaction, in which the Commission will be 6%), of the
greater of:
(i) the gross sale price due under any agreement of sale,
or
(ii) the fair market value of a property in the case of a
sale or other conveyance or donation of that property.
Hart Corporation assures the Court that it does not represent any
interest materially adverse to the Debtor or its estate.
Headquartered in Arlington Heights, Illinois, Hedstrom Corporation
-- http://www.hedstrom.com/-- manufactures and markets well-
established children's leisure, outdoor recreation and home d,cor
products, including outdoor gym sets, spring horses, trampolines,
skating equipment (through Backyard Products Unlimited, currently
in a Canadian receivership proceeding); play balls (through non-
debtor BBS Industries, Inc.); and arts and crafts kits, game
tables, indoor sleeping bags, play tents and wall decorations
(through ERO Industries). The Company filed for chapter 11
protection on October 18, 2004 (Bankr. N.D. Ill. Case No.
04-38543). Allen J. Guon, Esq., and Steven B. Towbin, Esq., at
Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, represent the
Debtors in their restructuring. When the Company filed for
chapter 11 protection, it listed estimated assets of $10 million
to $50 million and estimated debts of more than $100 million.
HOLLYWOOD CASINO: HWCC-Shreveport Can Manage Gaming Complex
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Louisiana,
Shreveport Division, allowed Hollywood Casino Shreveport and its
debtor-affiliates to enter into a New Management Services
Agreement with HWCC-Shreveport, Inc.
On September 22, 1998, HCS entered into a Management Services
Agreement with HWCC-Shreveport which was amended in August 1999.
Under the amended management agreement, HWCC-Shreveport acted as
HCS' sole agent for the supervision and direction of the
management of the day to day operations of the riverboat gaming
complex owned by HCS.
Part of HWCC-Shreveport's services include:
-- hiring and training personnel
-- establishing operating policies and procedures
-- risk management procedures
-- accounting services and
-- review and preparation of annual budget
HCS relies on the umbrella insurance policies, computer systems
and corporate infrastructure of HWCC-Shreveport.
Under the agreement, HCS will pay HWCC-Shreveport 2% of the gaming
complex's gross revenue. As of September 10, 2004, HCS's records
and books showed an accrued but unpaid obligations to HWCC-
Shreveport for $10,264,107.
Under the Debtors' confirmed Plan, Eldorado Resort LLC will
rebrand the gaming complex and manage its day to day operations.
It is essential to the Debtors' operations that HWCC-Shreveport
will continue to manage the gaming complex until the new owners
will take over control of the facility. In addition, the Debtors
say, it is important for the Debtors to continue using the
"Hollywood Casino" name until the complex has been re-branded.
Headquartered in Shreveport, Louisiana, Hollywood Casino
Shreveport operates a casino hotel and resort featuring riverboat
gambling. Its creditors led by Black Diamond Capital Management
filed an involuntary chapter 11 protection on September 10, 2004
(Bankr. W.D. La. Case No. 04-13259). Robert W. Raley, Esq. at 290
Benton Road Spur, Bossier City, LA 71111 and Timothy W. Wilhite,
Esq. at Downer, Hammond & Wilhite, LLC, represent the petitioners
in their involuntary petition against the Debtor. The Company
owed $34,958,113 to the petitioners.
HOLMES GROUP: Inks $625 Million Merger Pact with Jarden Corp.
-------------------------------------------------------------
Jarden Corporation (NYSE: JAH) reported a definitive agreement to
acquire privately-held The Holmes Group, Inc., in a transaction
valued on a debt free basis at approximately $625 million,
consisting of approximately $420 million in cash and 4.1 million
shares of Jarden common stock. The transaction is expected to be
immediately accretive to earnings and close during the third
quarter, subject to customary closing conditions. The Company's
waiting period for Hart-Scott-Rodino approval has already expired.
During the past three years, Jarden has steadily built a broad
portfolio of category leading products and brands used in and
around the home, both organically and through strategic
acquisitions, including the Company's 2005 acquisition of American
Household, Inc. The acquisition of Holmes will create new
international cross-selling and distribution opportunities across
Jarden's existing brand portfolio, particularly in Europe. Holmes
has also developed its own state-of-the-art manufacturing,
distribution and new product development facilities in China
within the last five years, having had an active manufacturing
presence in China for over fifteen years.
Holmes has annual revenues of approximately $700 million and an
adjusted non-GAAP EBITDA of approximately $95 million. Based on a
$625 million enterprise value for the business, the acquisition
multiple is approximately 6.5 times the adjusted non-GAAP EBITDA
run rate, before any synergies.
Due to the share issuance related to the Holmes transaction, the
Company's Board has approved a stock repurchase program of one
million shares. Jarden intends to buy back up to one million
shares of Jarden common stock in the second half of 2005, which is
expected to be funded from free cash flow generated during this
same period.
"Today's announcement represents another important step in
Jarden's long-term plan to grow and diversify our portfolio of
niche branded consumer products into a world class consumer
products company," Martin E. Franklin, Jarden's Chairman and Chief
Executive Officer, said. "Holmes' premier brands, leading market
shares in their respective niche markets and robust international
operations fit well with our established operating criteria. In
fact, given the complementary nature of the businesses and
compelling rationale for a combination, Holmes had numerous
meetings in the past several years to discuss a strategic
combination with American Household, prior to its acquisition by
Jarden. With its history of strong earnings, margins and cash
flow, Holmes is expected to be a positive addition to Jarden's
growing product mix. In addition, we are acquiring a talented
workforce with a proven track record of maintaining margin
discipline, while supporting their brands and new product
development in order to grow the top line organically."
Holmes' principal shareholders are Berkshire Partners, a Boston-
based private equity firm, and Jordan (Jerry) A. Kahn, the founder
and CEO of the business. Commenting on the transaction, Mr. Kahn,
said, "I have been building The Holmes Group for nearly 25 years
and believe that the combination with Jarden will create
significant new growth opportunities that Holmes could not have
capitalized on as a stand alone, private company. I have been
encouraged by the enthusiasm Martin and his team have shown for
our business and employees and look forward to helping ensure the
combination of Holmes into Jarden is a success."
Mr. Franklin concluded, "It has been a pleasure working with Jerry
during our negotiations and I look forward to his positive
contribution to Jarden as a consultant post-closing. After
completion of the transaction, Jarden is expected to have
annualized sales of approximately $3.4 billion and over 16,000
employees located around the globe."
The cash portion of the transaction will be financed through a
combination of available cash and a $350 million add-on to the
Company's senior secured term loan B facility. Citigroup Global
Markets and CIBC World Markets have acted as primary financial
advisors to Jarden and will act as lead arrangers of the
financing.
Founded in 1982, The Holmes Group supplies consumer products for
the home environment and kitchen markets. Holmes' established
relationships with major customers and its new product development
expertise has enabled it to secure leading market positions across
major product categories on a global basis, including Crock-Pot(R)
slow-cookers, Rival(R) roasters and deep fryers, and Bionaire(R)
air purifiers and seasonal humidifiers. Holmes is a leading
manufacturer and distributor of select home environment and small
kitchen electrics under well-recognized consumer brands, including
Bionaire(R), Crock-Pot(R), Harmony(R), Holmes(R), Patton(R),
Rival(R), Seal-a-Meal(R) and White Mountain(TM).
Jarden Corporation -- http://www.jarden.com/-- is a leading
provider of niche consumer products used in and around the home,
under well-known brand names including Ball(R), Bee(R),
Bicycle(R), Campingaz(R), Coleman(R), Crawford(R), Diamond(R),
First Alert(R), FoodSaver(R), Forster(R), Health o meter(R),
Hoyle(R), Kerr(R), Lehigh(R), Leslie-Locke(R), Loew-Cornell(R),
Mr. Coffee(R), Oster(R), Sunbeam(R) and VillaWare(R). Jarden
operates through four business segments: Branded Consumables,
Consumer Solutions, Outdoor Solutions and Other. Headquartered in
Rye, N.Y., Jarden has over 9,000 employees worldwide.
* * *
As reported in the Troubled Company Reporter on May 5, 2005,
Moody's Investors Service assigned a B1 rating to The Holmes
Group's new $85 million tack-on term loan and affirmed the B1
rating on the existing senior secured facilities and the B3 issuer
rating. At the same time, Moody's withdrew the B3 second lien
term facility rating. The rating outlook remains stable.
Holmes' ratings reflect:
(1) its high sales concentration in a few discount retailers,
(2) its weakened balance sheet resulting from the May 2004
special dividend,
(3) its high financial leverage,
(4) the effects of higher steel and other input costs, and
(5) the stiff competition inherent in the consumer products in
which the company competes.
The ratings are supported by:
(1) the company's portfolio of stable and diverse products for
the home,
(2) the company's well known brand names,
(3) the leading market positions for many of the products it
sells,
(4) its well established relationships with growing mass
retailers,
(5) the stability of its operating margin, and
(6) the moderate decline in its leverage since the recap and
special dividend.
With half of the company's products supplied by its manufacturing
subsidiary in China and half sourced from other producers, Holmes
is well positioned to remain price competitive.
The stable rating outlook assumes further gradual deleveraging and
the prospectively favorable impact on interest expense and cash
flow that the lower interest rate on the new Senior Secured Tack-
on Term Loan and the Proposed Amendment and Restatement of its
First Lien Credit Agreement should have
HOVNANIAN ENT: Fitch Puts B+ Rating on $100 Million Stock Issuance
------------------------------------------------------------------
Fitch Ratings has assigned a 'B+' rating to Hovnanian Enterprises,
Inc.'s (NYSE: HOV) $100 million series A noncumulative perpetual
preferred stock issuance. The offering of 4 million depository
shares represent Hovnanian's series A perpetual preferred stock,
with a liquidation value of $25 per depository share. Fitch also
affirms HOV's existing ratings:
-- Senior debt 'BB+';
-- Senior subordinated debt 'BB-';
-- Rating Outlook Stable.
The proceeds from the perpetual preferred stock offering will be
used to repay the debt outstanding under HOV's revolving credit
facility.
Fitch allocated 100% equity credit to the new issuance given the
perpetual term of the preferred stock combined with the
noncumulative dividend feature. The preferred stock will not be
convertible into HOV's common stock and will be redeemable at the
company's option at the liquidation value of the shares five years
after their issuance. If HOV chooses to exercise such redemption
rights, its intention is to only do so with the proceeds from the
issuance of equally equity-like or more-equity like securities.
The preferred stock ranks junior to HOV's debt securities, but
ranks senior to the common stock.
According to Fitch's calculations, proforma April 30, 2005 equity-
adjusted debt-to-total capital at HOV was 45.5%.
Hovnanian Enterprises, Inc., the eighth largest homebuilder in the
United States, designs, constructs and sells single-family
detached homes, attached town homes and condominiums, mid-rise and
high-rise condominiums, urban infill and active adult homes in
planned residential developments. HOV consists of two operating
groups: homebuilding and financial services.
The financial services group provides mortgage loans and title
services to HOV's homebuilding customers. HOV is currently
offering homes for sale in 308 communities in 33 markets in 17
states, primarily marketing and building homes for the first-time
buyers, first-time and second-time move-up buyers, luxury buyers,
active adult buyers and empty nestors. Prices range from $46,000
to $1,350,000 with an average sales price, including options, of
$280,000 in fiscal 2004. HOV reported revenues of $4.16 billion
and net income of $354.76 million last year.
IMPERIAL HOME: Ch. 7 Trustee Hires J. Niebuhr for Wind-Up Help
--------------------------------------------------------------
Montague S. Claybrook, the chapter 7 trustee overseeing the
liquidation of Imperial Home Decor Group Holdings, Inc., and its
debtor-affiliates, sought and obtained permission from the U.S.
Bankruptcy Court for the District of Delaware to retain James
Niebuhr as an independent contractor, nunc pro tunc to
Sept. 1, 2004.
Mr. Claybrook says he requires the services of Mr. Niebuhr to
assist him in the wind-up and liquidation of the Debtors' estates.
Specifically, Mr. Niebuhr is expected to:
a) manage the Debtors' books and records located in
Westminster, Colorado;
b) assist the chapter 7 trustee in the claims administration
process;
c) assist the chapter 7 trustee in the recovery of tax refunds
due to the estates;
d) assist the trustee and his professionals in the termination
of the employee benefit plans; and
e) assist the trustee in the recovery of refunds owed by the
Debtors' insurance carriers and deposits held by utilities.
Mr. Niebuhr will bill the estates for his professional services at
$87.50 per hour.
To the best of the Trustee's knowledge, Mr. Niebuhr is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Cleveland, Ohio, Imperial Home Decor Group, Inc.
-- http://www.ihdg.com-- manufactures and distributes home and
commercial wall-coverings. The Company also provides online
wall-covering information sales services. Products and services
are sold to multiple industries. The Company and its
debtor-affiliates filed for chapter 11 protection on Dec. 27, 2003
(Bankr. D. Del. Case No. 03-13899). The Debtors' cases were
converted to chapter 7 on Sept. 1, 2004. Prior to the conversion
date, substantially all of the Debtors' assets were liquidated.
Currently, the estates are administratively insolvent. On
Sept. 9, Montague S. Claybrook was appointed as chapter 7 Trustee.
Duane David Werb, Esq., at Werb & Sullivan represents the Debtors.
When the Debtor filed for protection from its creditors, it
estimated $100 million in total assets and $100 million in debts.
INDOSUEZ CAPITAL: Fitch Holds BB Rating on $14 Mil. Class D Certs.
------------------------------------------------------------------
Fitch Ratings upgrades two classes of notes and affirms four
classes of notes issued by Indosuez Capital Funding VI, Ltd.
These rating actions are effective immediately:
-- $96,187,017 class A-Ib floating-rate senior term notes
affirmed at 'AAA';
-- $18,000,000 class A-II floating-rate senior notes upgraded
to 'AAA' from 'AA';
-- $33,000,000 class B floating-rate senior subordinate notes
upgraded to 'AA' from 'A';
-- $30,000,000 class C floating-rate senior subordinate notes
affirmed at 'BBB+';
-- $10,000,000 class D-1 fixed-rate subordinate notes
affirmed at 'BB';
-- $ 4,000,000 class D-2 floating-rate subordinate notes
affirmed at 'BB'.
Indosuez VI is a collateralized debt obligation managed by Lyon
Capital Management LLC., which closed Sept. 14, 2000. Indosuez VI
is composed of high yield loans (65%) and high yield bonds (35%).
Included in this review, Fitch discussed the current state of the
portfolio with the asset manager and their portfolio management
strategy going forward.
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 for the rated liabilities.
Indosuez VI has benefited from substantial deleveraging of the
capital structure since the last rating review on Feb. 14, 2004.
On the Sept. 14, 2004 payment date, the $75 million class A-Ia
revolving notes were paid-in-full, and on the June 14, 2005
payment date approximately $176.8 million of the $273 million
class A-Ib notes were redeemed in an effort to cure the failing
class C and class D overcollateralization tests.
As per the June 14, 2005 note valuation report, pay-downs resulted
in class C and class D OC test improvement to 109.4% and 101.4%
from 104.8% and 100.8%, versus triggers of 105% and 102.2%,
respectively. Classes A and B OC ratios were exceeding their
respective triggers as of the May 31, 2005 trustee report. In
addition, the pay-downs reduced negative carry associated with
maintaining a large cash balance and improved credit enhancement
to the rated notes.
Since the last review, the collateral has continued to perform.
The weighted average rating has remained stable at 'B'. Defaulted
assets represented 4.7% of the $200.1 million of aggregate
principal amount of the collateral, and assets rated 'CCC+' or
lower represented approximately 11.9%, excluding defaults, as of
the May 31, 2005 trustee report.
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/
INTERSTATE BAKERIES: Court Okays CitiCapital & CitiCorp Settlement
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
approved a stipulation entered by the Debtors, CitiCapital
Commercial Leasing Corp., and CitiCorp Del-Lease, Inc.
As reported in the Troubled Company Reporter on May 23, 2005,
CitiCapital Commercial formerly known as Associates Leasing, Inc.,
was the holder of a claim on two Komatsu Forklifts with VIN#
516531A and 603836A, under a Lease Agreement dated August 24,
2000. CitiCapital asked the U.S. Bankruptcy Court for the Western
District of Missouri to compel Interstate Bakeries Corporation and
its debtor-affiliates to either assume or reject the Lease since
they were in default of its obligations.
CitiCorp Del-Lease, doing business as CitiCorp Dealer Finance and
CitiCapital Dealer Finance, also asked the Court to shorten the
Debtors' time to decide whether to assume or reject five property
leases:
Property Description VIN# Lease Acct. No.
-------------------- ---------- ---------------
Mitsubishi Forks/Sideshifter AF82C05256 005-0082143-001
Komatsu Lift Truck 650661A 005-0684305-002
Caterpillar Lift Truck ETB5B00705 005-0684305-003
Komatsu Forklift 559125 005-0684305-004
Linde Lift Truck(s) 26921826 & 005-0684305-005
26921827
CitiCorp and CitiCapital complained that the Debtors have not
made any payments to them pursuant to their Agreements since the
Petition Date.
The Debtors, in response, argued that certain of the Agreements
are disguised security agreements that do not need to be assumed
or rejected. Even to the extent they are executory contracts,
the Debtors asserted that it is premature to require them to
decide which contracts will be assumed or rejected until they
complete their business plan and seek to emerge from bankruptcy.
To resolve the dispute, parties agree that:
(1) Until the time as the Court enters an order approving the
Debtors' assumption or rejection of the Agreements or
otherwise determines the nature of the Agreements, the
parties will continue to do business with each other
in accordance with the terms of the Agreements and any
related agreements;
(2) The Debtors will continue to retain the Mitsubishi
forklift and pay to CitiCorp $130 per month for a maximum
of 51 months, beginning January 18, 2005;
(3) The Debtors will continue to retain the Komatsu lift
truck and pay to CitiCorp $145 per month for a maximum of
45 months, beginning January 18, 2005. Postpetition
payments voluntarily made by the Debtors for installments
that came due contractually will be credited so that the
first $145 payment the Debtors will be required to make is
the payment due in May 2005;
(4) The Caterpillar lift truck agreement has expired and the
Debtors will purchase the equipment from CitiCorp for
$12,955 without delay on additional terms mutually
agreeable to the parties. Otherwise, the equipment will
be surrendered;
(5) The Debtors will make the regular $470 monthly payments
due under the Komatsu forklift Agreement from the
Petition Date, with 90 days to cure past due payments;
(6) The Debtors will continue to retain the two Linde pallet
jacks and pay to CitiCorp $237 per month for a maximum of
38 months, beginning January 18, 2005; and
(7) The Debtors will continue to retain the two Komatsu
forklifts and make regular monthly payments due under
the Agreement of $612 per month from the Petition Date,
with 90 days to cure past due payments.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts. (Interstate Bakeries
Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
INTERSTATE BAKERIES: Selling Hearth Roll Line for $700,000
----------------------------------------------------------
As a result of Interstate Bakeries Corporation and its debtor-
affiliates' evaluation of their operation in Florida, the Debtors
have determined that they no longer need the Hearth Roll Line at
their Jacksonville, Florida bakery because the products it produce
are not sufficiently profitable to justify continued production.
The Hearth Roll Line encompasses all of the equipment necessary
for the Debtors to produce and package different varieties of
rolls, including Hoagies, Pistelette Brown & Serves, French twin
rolls, 8" Subs, Bread DeJour French, Bread DeJour, Beefsteak,
Cluster 8 hamburger buns, Brown & Serve Rolls, Onion Kaiser, Honey
Rolls, and Golden Wheat Rolls.
By this motion, the Debtors ask the Court for authority to sell
the Hearth Roll Line to Russell T. Bundy, an Ohio Corporation,
for $700,000. Bundy has already deposited $70,000 in an escrow
account, pursuant to the parties' Sale Agreement.
According to J. Eric Ivester, Esq., at Skadden Arps Slate Meagher
& Flom LLP, in Chicago, Illinois, Bundy is one of the foremost
dealers in used bakery equipment, and has purchased some
equipment from the Debtors during the course of their Chapter 11
cases. Bundy initially became aware of the Debtors' Hearth Roll
Line when it audited the Debtors' equipment in the Jacksonville,
Florida plant.
Bundy, Mr. Ivester relates, approached the Debtors with an offer
to purchase the Hearth Roll Line after becoming aware of a third-
party purchaser for the Hearth Roll Line of which the Debtors
would not otherwise have been aware, and to which Bundy will
re-sell the Hearth Roll Line. Unlike the majority of the
domestic parties that would be interested in purchasing this type
of equipment, the third-party purchaser does not compete with the
Debtors.
The Debtors believe that an auction is unnecessary since they do
not want to sell the Hearth Roll Line to any of their
competitors. An auction would be difficult to manage to ensure
that one of the Debtors' competitors did not buy the Hearth Roll
Line, either directly or indirectly.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts. (Interstate Bakeries
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
INTERSTATE BAKERIES: Target Bids $18.7MM for San Pedro Property
---------------------------------------------------------------
As reported in the Troubled Company Reporter on June 21, 2005,
Interstate Bakeries Corporation and its debtor-affiliates asked
the U.S. Bankruptcy Court for the Western District of Missouri for
permission to sell its San Pedro, California, Property to GMS
Realty, LLC, a Delaware limited liability company, subject to
higher or better offers.
On June 23, 2005, the Debtors conducted an auction for the real
property located at 1605-1701 North Gaffey Street, in San Pedro,
California. Target Corporation emerged as the successful bidder
with its $18,700,000 offer.
The Debtors have executed an asset purchase agreement with
Target. Target has deposited $2,000,000 in an escrow account.
The parties are scheduled to close the transaction five business
days upon the Court's approval of the sale.
The Property includes approximately 9.8 acres of land with an
approximately 171,028-square foot building.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts. (Interstate Bakeries
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
JARDEN CORPORATION: To Acquire Holmes Group for $625 Million
------------------------------------------------------------
Jarden Corporation (NYSE: JAH) reported a definitive agreement to
acquire privately-held The Holmes Group, Inc., in a transaction
valued on a debt free basis at approximately $625 million,
consisting of approximately $420 million in cash and 4.1 million
shares of Jarden common stock. The transaction is expected to be
immediately accretive to earnings and close during the third
quarter, subject to customary closing conditions. The Company's
waiting period for Hart-Scott-Rodino approval has already expired.
During the past three years, Jarden has steadily built a broad
portfolio of category leading products and brands used in and
around the home, both organically and through strategic
acquisitions, including the Company's 2005 acquisition of American
Household, Inc. The acquisition of Holmes will create new
international cross-selling and distribution opportunities across
Jarden's existing brand portfolio, particularly in Europe. Holmes
has also developed its own state-of-the-art manufacturing,
distribution and new product development facilities in China
within the last five years, having had an active manufacturing
presence in China for over fifteen years.
Holmes has annual revenues of approximately $700 million and an
adjusted non-GAAP EBITDA of approximately $95 million. Based on a
$625 million enterprise value for the business, the acquisition
multiple is approximately 6.5 times the adjusted non-GAAP EBITDA
run rate, before any synergies.
Due to the share issuance related to the Holmes transaction, the
Company's Board has approved a stock repurchase program of one
million shares. Jarden intends to buy back up to one million
shares of Jarden common stock in the second half of 2005, which is
expected to be funded from free cash flow generated during this
same period.
"Today's announcement represents another important step in
Jarden's long-term plan to grow and diversify our portfolio of
niche branded consumer products into a world class consumer
products company," Martin E. Franklin, Jarden's Chairman and Chief
Executive Officer, said. "Holmes' premier brands, leading market
shares in their respective niche markets and robust international
operations fit well with our established operating criteria. In
fact, given the complementary nature of the businesses and
compelling rationale for a combination, Holmes had numerous
meetings in the past several years to discuss a strategic
combination with American Household, prior to its acquisition by
Jarden. With its history of strong earnings, margins and cash
flow, Holmes is expected to be a positive addition to Jarden's
growing product mix. In addition, we are acquiring a talented
workforce with a proven track record of maintaining margin
discipline, while supporting their brands and new product
development in order to grow the top line organically."
Holmes' principal shareholders are Berkshire Partners, a Boston-
based private equity firm, and Jordan (Jerry) A. Kahn, the founder
and CEO of the business. Commenting on the transaction, Mr. Kahn,
said, "I have been building The Holmes Group for nearly 25 years
and believe that the combination with Jarden will create
significant new growth opportunities that Holmes could not have
capitalized on as a stand alone, private company. I have been
encouraged by the enthusiasm Martin and his team have shown for
our business and employees and look forward to helping ensure the
combination of Holmes into Jarden is a success."
Mr. Franklin concluded, "It has been a pleasure working with Jerry
during our negotiations and I look forward to his positive
contribution to Jarden as a consultant post-closing. After
completion of the transaction, Jarden is expected to have
annualized sales of approximately $3.4 billion and over 16,000
employees located around the globe."
The cash portion of the transaction will be financed through a
combination of available cash and a $350 million add-on to the
Company's senior secured term loan B facility. Citigroup Global
Markets and CIBC World Markets have acted as primary financial
advisors to Jarden and will act as lead arrangers of the
financing.
Founded in 1982, The Holmes Group supplies consumer products for
the home environment and kitchen markets. Holmes' established
relationships with major customers and its new product development
expertise has enabled it to secure leading market positions across
major product categories on a global basis, including Crock-Pot(R)
slow-cookers, Rival(R) roasters and deep fryers, and Bionaire(R)
air purifiers and seasonal humidifiers. Holmes is a leading
manufacturer and distributor of select home environment and small
kitchen electrics under well-recognized consumer brands, including
Bionaire(R), Crock-Pot(R), Harmony(R), Holmes(R), Patton(R),
Rival(R), Seal-a-Meal(R) and White Mountain(TM).
Jarden Corporation -- http://www.jarden.com/-- is a leading
provider of niche consumer products used in and around the home,
under well-known brand names including Ball(R), Bee(R),
Bicycle(R), Campingaz(R), Coleman(R), Crawford(R), Diamond(R),
First Alert(R), FoodSaver(R), Forster(R), Health o meter(R),
Hoyle(R), Kerr(R), Lehigh(R), Leslie-Locke(R), Loew-Cornell(R),
Mr. Coffee(R), Oster(R), Sunbeam(R) and VillaWare(R). Jarden
operates through four business segments: Branded Consumables,
Consumer Solutions, Outdoor Solutions and Other. Headquartered in
Rye, N.Y., Jarden has over 9,000 employees worldwide.
* * *
As reported in the Troubled Company Reporter on February 11, 2005,
Moody's Investors Service downgraded the rating on Jarden
Corporation's senior subordinated notes to B3 and assigned a
definitive rating of B1 on its $1,050 million loan facility. The
ratings on the refinanced bank facilities have been withdrawn.
The outlook for the ratings is stable. This concludes the review
for possible downgrade that commenced on September 27, 2004.
The ratings downgraded are:
* Senior implied rating to B1 from Ba3;
* $180 million 9-_% senior subordinated notes, due 2012, to B3
from B2;
* Issuer rating to B2 from B1
The ratings assigned definitively are:
* $850 million senior secured term loan facility, due 2012 --
B1;
* $200 million senior secured revolving credit facility, due
2010 -- B1
The ratings withdrawn are:
* $50 million senior secured term loan A, due 2007 of Ba3;
* $150 million senior secured term loan B, due 2008 of Ba3;
* $100 million senior secured add-on term loan B, due 2008 of
Ba3;
* $70 million senior secured revolving credit facility, due
2007 of Ba3;
LAC D'AMIANTE: Committee Hires Risk Int'l as Insurance Advisor
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Lac D'Amiante Du
Quebec Ltee, and its debtor-affiliates sought and obtained
permission from the U.S. Bankruptcy Court for the Southern
District of Texas, Corpus Christi Division, to employ Risk
International Services, Inc., as its insurance advisor.
Risk International is expected to render analysis and
interpretation of the extent and availability of the Debtors'
insurance policies, including potential coverage issues raised by
insurers.
David P. Anderson, Esq., senior counsel at Risk International,
discloses that professionals at his Firm currently bill $180 to
$300 per hour. Asarco, Inc., the Debtors' parent company, agrees
to reimburse Risk International's out-of-pocket expenses.
The professionals who will render services to the Committee and
their current hourly rates are:
Professional Designation Rate
------------ ----------- ----
David P. Anderson Director/Senior Counsel $300
Wendy K. Cressman Senior Insurance Analyst $180
Joseph E. Smith Senior Insurance Analyst $180
To the best of the Committee's knowledge, Risk International is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Tucson, Arizona, Lac d'Amiante Du Quebec Ltee,
fka Lake Asbestos of Quebec, Ltd., and its affiliates, are all
non-operational and dormant subsidiaries of ASARCO Inc., nka
ASARCO LLC. ASARCO mines, smelts and refines copper and
molybdenum in the United States and Peru. The Company and its
debtor-affiliates filed for chapter 11 protection on April 11,
2005 (Bankr. S.D. Tex. Case No. 05-20521). Nathaniel Peter
Holzer, Esq., at Jordan, Hyden, Womble & Culbreth, P.C.,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they each
estimated assets and debts of more than $100 million.
MAD CATZ: Delays Filing of 2005 Financial Reports Until Aug. 29
---------------------------------------------------------------
Mad Catz Interactive, Inc. (AMEX/TSX: MCZ) will delay the filing
of its annual financial statements (including the MD&A) for the
fiscal year ended March 31, 2005. The Company does not believe
that the delay will result in any change to its fiscal 2005
financial results that were released on June 9, 2005.
As previously reported, during the fourth quarter of fiscal 2005,
the Company determined that it no longer met the criteria to
continue filing as a foreign private issuer in the United States
and will file as a U.S. domestic issuer. Accordingly, with the
release of its fiscal 2005 fourth quarter and full year results,
the Company began preparing its financial statements and reporting
its results in accordance with U.S. GAAP (as opposed to Canadian
GAAP which was previously followed). As such, commencing with the
March 31, 2005 fiscal year-end financial statements, the Company
will file its Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K.
As a result of the change in filing status Mad Catz was unable to
complete and file its 2005 Statements by the June 29, 2005
deadline (90 days after Mad Catz's fiscal year end), as required
by applicable securities laws, without unreasonable effort and
expense because additional time is required to finalize and audit
Mad Catz's consolidated financial statements. Mad Catz expects to
file the 2005 Statements by July 14, 2005, and in any event by
Aug. 29, 2005. Mad Catz will also delay the filing of its Annual
Information Form in Form 10-K for the year ended March 31, 2005,
until such time as its 2005 Statements are filed.
Cease Trade Order
The Ontario Securities Commission has indicated that in accordance
with its Policy 57-603, should Mad Catz fail to file the 2005
Statements by Aug. 29, 2005, a cease trade order may be imposed by
the applicable securities commissions, requiring that all trading
of securities of Mad Catz cease for such periods specified in the
order. It is anticipated that during the period of time that the
2005 Financial Statements remain outstanding, the directors and
senior officers of Mad Catz will be subject to the cease trade
order of the Ontario Securities Commission prohibiting such
persons from trading in the Company's securities. Mad Catz
intends to satisfy the provisions of the alternate information
guidelines of Policy 57-603 for as long as it remains in default
of the financial statements filing requirements of applicable
securities laws.
Mad Catz Interactive, Inc. -- http://www.madcatz.com/-- is a
worldwide leader of innovative peripherals in the interactive
entertainment industry. Mad Catz designs and markets a full range
of accessories for video game systems and publishes video game
software, including the industry leading GameShark brand of video
game enhancements. Mad Catz has distribution through most leading
retailers offering interactive entertainment products. Mad Catz
has its operating headquarters in San Diego, California and
offices in Canada, Europe and Asia.
MERIDIAN AUTOMOTIVE: Gets Final Court Nod on $75 Million DIP Loan
-----------------------------------------------------------------
Meridian Automotive Systems, Inc., received final approval from
the United States Bankruptcy Court for the District of Delaware
for a new $75 million debtor-in-possession financing facility
arranged by Credit Suisse First Boston. CSFB is agent and a
holder of Meridian's pre-petition First Lien debt.
The CSFB DIP financing facility replaces the previously announced
JPMorgan facility. As previously announced, Meridian cancelled
the original JPMorgan facility in light of needed changes to its
2005 operating forecasts. The CSFB facility provides Meridian
with a more flexible facility structure and a greater level of
operating liquidity than the JPMorgan facility would have.
Yesterday's ruling provided final court approval of the entire
$75 million facility.
"We are pleased to enter into this financing agreement with our
First Lien Agent and the consent of all of the key lending
constituents, and are gratified by their continued support of
Meridian," Richard E. Newsted, Meridian's President, said.
"[Yester]day's court approval marks an important step forward in
our restructuring. We believe that this DIP financing facility
provides Meridian with ample liquidity to fund our operations
while we plan for our efficient exit from bankruptcy."
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers. Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers. The Company and its debtor-affiliates filed
for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case
Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $530 million in
total assets and approximately $815 million in total liabilities.
METROPOLITAN MORTGAGE: Unsec. Creditors Will Recover 11% to 29%
---------------------------------------------------------------
Metropolitan Mortgage & Securities Co., Inc., and Summit
Securities, Inc., delivered their Second Amended Chapter 11 Plan
and an accompanying Disclosure Statement to the U.S. Bankruptcy
Court for the Eastern District of Washington.
Terms of the Plan
Creditors Trust
The Plan contemplates that the Debtors' assets will be liquidated.
The Plan provides for the establishment of two trusts:
-- the Metropolitan Creditors' Trust, whose sole beneficiaries
are certain general unsecured creditors of Metropolitan,
and
-- the Summit Creditors' Trust, whose sole beneficiaries are
certain general unsecured creditors of Summit.
On the Plan's effective date, all of the assets of Metropolitan
will vest in the Metropolitan Creditors' Trust and all of the
assets of Summit will vest in the Summit Creditors' Trust. The
Metropolitan Creditors' Trust and the Summit Creditors' Trust
will:
(1) control each of the respective Debtor's remaining assets,
(2) be responsible for the sale or liquidation of these assets,
and
(3) determine and make all distributions to the beneficiaries
of the Metropolitan Creditors' Trust and the Summit
Creditors' Trust from the net proceeds of the liquidation
effort.
Treatment of Claims and Interests
Metropolitan
Holders of priority unsecured claims amounting to $120,651 and
secured Claims amounting to $13,400,000 will recover their claim
in full.
Holders of general unsecured claims, aggregating $357,245,839,
will recover 19% of their claims.
The plan sets up a convenience class for small-dollar claims
aggregating $165,485. Payments on account of convenience class
claims are capped at $500.
Holders of:
* subordinated debenture securities,
* preferred stock interest amounting to $102,000,000, and
* subordinated preferred stock interest,
will get nothing.
The holders of Equity Securities will have their securities
canceled. Paul Sandifur, Jr., directly or indirectly owns most of
the Debtors' common stock.
For administrative convenience, all prepetition unsecured
intercompany claims between Metropolitan and Summit will be
discharged.
Summit
Holders of general unsecured claims but who opt to recover only
$500 will be paid in full. These Convenience Claims aggregate
$79,108. Holders of general unsecured claims aggregating
$157,909,000 will recover 11% of their claims. An additional 15
to 18% recovery will be distributed from the proceeds of the
directors and officers insurance policies, avoidance actions and
the sale of the insurance companies.
Holders of:
* subordinated debenture securities,
* preferred stock interest, and
* subordinated preferred stock interest,
will get nothing.
The holders of Equity Securities will have their securities
canceled.
Appointment of Plan Administrator
The Plan contemplates the appointment of a single, independent
Trustee for the administration of the two Creditors' Trusts, but
subject to the advice and consultation of two advisory groups of
beneficiaries, one group comprised of up to ten members designated
by the Metropolitan Creditors' Committee, and one group comprised
of up to ten members designated by the Summit Creditors'
Committee. Maggie Lyons will serve as Plan Administrator. Ms.
Lyons is Summit's Chief Executive Officer and Principal Financial
Officer and Metropolitan's Chief Financial Officer.
The Bankruptcy Court will serve as an ultimate appeal forum, in
the event that the Plan Administrator and one or both of the
Executive Boards will disagree on certain matters on the Plan.
Headquartered in Spokane, Washington, Metropolitan Mortgage &
Securities Co., Inc., owns insurance businesses. Metropolitan
filed for Chapter 11 protection (Bankr. E.D. Wash. Case No. 04-
00757), along with Summit Securities Inc., on Feb. 4, 2004. Bruce
W. Leaverton, Esq., at Lane Powell Spears Lubersky LLP and Doug B.
Marks, Esq., at Elsaesser, Jarzabek, Anderson, Marks, Elliot &
McHugh represent the Debtors in their restructuring efforts. When
Metropolitan Mortgage filed for chapter 11 protection, it listed
total assets of $420,815,186 and total debts of $415,252,120.
MIRANT CORP: MAGi Committee Demands Production of Documents
-----------------------------------------------------------
Mirant Corporation and its debtor-affiliates sought, on June 7,
2005, among other things, to toll the applicable limitations
period as to all causes of action against other Debtors, non-
Debtor affiliates, and non-Debtor third parties.
Thomas Rice, Esq., at Cox Smith Matthews Incorporated, in San
Antonio, Texas, tells the U.S. Bankruptcy Court for the Northern
District of Texas that the Tolling Motion with respect to estate
claims against third parties encompasses claims that the MAGi
estate has against present and former officers and directors or
managers of the Debtors. The Tolling Motion fails to detail any
of the specific third-party defendants from whom tolling
agreements allegedly are being sought. The Debtors, Mr. Rice
notes, have been unable, or unwilling, to provide any party-in-
interest with:
1. a comprehensive list of potential claims;
2. an identification of parties who have entered into tolling
agreements; or
3. an identification of those parties who have not agreed to
toll the statute of limitation.
Mr. Rice relates that the Official Committee of Unsecured
Creditors of Mirant Americas Generation, LLC, has asked for a
schedule of all causes of action and potential defendants
identified by the Debtors and the status of tolling agreements to
assess whether the interests of MAGi creditors are being
adequately protected. The Examiner has also asked for the same
information. But the Debtors have not responded to the requests.
Hence, the MAGi Committee asks the Bankruptcy Court to compel the
Debtors to produce the documents immediately to protect the
interests of MAGi creditors and respond to the Tolling Motion.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally. Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White &
Case LLP, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
(Mirant Bankruptcy News, Issue No. 68; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
MIRANT CORP: MAGi Committee Wants to Prosecute Claims
-----------------------------------------------------
The claims of Mirant Americas Generation, LLC, against other
Mirant debtor entities and third-parties exceed $1 billion in
value, and represent a very substantial asset to satisfy the MAGi
creditors' claims, Thomas Rice, Esq., at Cox Smith Matthews
Incorporated, in San Antonio, Texas, tells the U.S. Bankruptcy
Court for the Northern District of Texas.
Mr. Rice recounts that the Official Committee of Unsecured of
Mirant Americas Generation, LLC, has sought permission from Judge
Lynn to prosecute these claims on behalf of the MAGi estate. The
Bankruptcy Court ruled that the MAGi Committee is the proper
entity to prosecute MAGi's claims against its parent company and
related affiliates. The Court also provided that the MAGi
Committee could seek further leave of Court to commence
prosecution of the intercompany claims and claims against third
parties at later specified stages in the Debtors' proceedings.
Mr. Rice points out that the Debtors have taken no action in the
intervening 18 months since the Order was entered to resolve the
MAGi estate claims. Rather, the Debtors' First Amended Plan of
Reorganization, without any analysis or justification whatsoever,
seeks to release and enjoin prosecution of substantially all of
the MAGi estate claims, Mr. Rice relates. "To make matters
worse, the Debtors, despite urging by both the Examiner and the
MAGi Committee, have failed to adequately preserve the MAGi
estate claims from being potentially time-barred by the statute
of limitations."
Mr. Rice informs Judge Lynn that there is substantial doubt that
the Debtors' proposed Plan would proceed to confirmation at all,
and should it proceed, whether the Plan is confirmable. It is
critical that MAGi's claims be preserved so that MAGi's creditors
can realize on their value when a confirmable Plan is ultimately
filed for MAGi, Mr. Rice asserts. The MAGi estate and its
creditors should not be required to take any risk that the claims
will be lost because of the Debtors' inability to prosecute
estate claims in a timely manner.
In particular, the MAGi Committee believes that the MAGi estate
has significant claims against Mirant and MAI for breach of
fiduciary duty, fraudulent transfer, conversion, and restitution,
among others. The MAGi Committee asserts that the MAGi estate
has claims against certain MAGi managers for breach of fiduciary
duty and aiding and abetting conversion. Mr. Rice contends that
the MAGi estate has significant claims against the Mirant
directors for aiding and abetting breach of fiduciary duty,
aiding and abetting fraudulent transfer, and aiding and abetting
conversion.
On behalf of MAGi's estate, the MAGi Committee asks the Court for
authority to file and assert the estate's claims against other
Debtor entities and third parties.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally. Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White &
Case LLP, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
(Mirant Bankruptcy News, Issue No. 68; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
NOBLE DREW: Creditors Must File Proofs of Claim by July 22
----------------------------------------------------------
The Honorable Judge Prudence Carter Beatty of the U.S. Bankruptcy
Court for the Southern District of New York set on July 22, 2005,
at 5:00 p.m., as the deadline for all creditors owed money on
account of claims arising prior to March 25, 2005, against Noble
Drew Ali Plaza Housing Corp. to file proofs of claim.
Creditors must file written proofs of claim on or before the
July 22 Claims Bar Date and those forms must be sent either by
first class mail, overnight delivery or personal service to:
Clerk of Court
U.S. Bankruptcy Court
Southern District of New York
One Bowling Green, Room 534
New York, NY 10004-1408
Headquartered in Brooklyn, New York, Noble Drew Ali Plaza Housing
Corp., filed for chapter 11 protection on March 25, 2005 (Bankr.
S.D.N.Y. Case No. 05-11915). Gerard R. Luckman, Esq., at
Silverman Perlstein & Acampora, LLP, represents the Debtor. When
the Debtor filed for protection from its creditors, it listed
total assets of $43,500,000 and total debts of $18,639,981.
NORCROSS SAFETY: S&P Rates Senior Secured Bank Loans at BB-
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' senior
secured bank loan rating to two new facilities proposed by leading
personal protection equipment maker Norcross Safety Products LLC,
including a $50 million revolving credit facility due in five
years and an $88 million term loan facility due in seven years.
The recovery rating on these facilities is '1', indicating our
high expectation of full principal recovery by lenders in the
event of a payment default.
Proceeds from the bank facility will be used to partially finance
the acquisition of Norcross by Odyssey Investment Partners for
$495 million. The transaction is expected to close in July 2005.
Norcross has received necessary consents from existing public
debtholders in both its holding and operating companies to change-
of-control waivers that will permit the new ownership and allow
the company to maintain existing public debt.
All other ratings on Norcross, including our 'B+' corporate credit
rating, are affirmed.
The outlook is negative.
Closely held Oak Brook, Illinois-based Norcross is expected to
have about $370 million in consolidated debt outstanding when the
transaction closes.
"The ratings on Norcross reflect the company's weak business
position operating in highly fragmented niche markets, as well as
its highly leveraged financial profile and limited financial
flexibility," said Standard & Poor's credit analyst John R. Sico.
Additional leverage stemming from Norcross' recent distribution to
preferred shareholders weakened the company's financial profile.
Norcross has diverse, consumable product lines and a large
customer base that make it somewhat recession-resistant, even
though the business is driven by commercial and industrial
activity. The company offers branded and patented products that
provide a high level of protection critical to life-threatening
occupations in the high-voltage electricity and firefighting
areas. It also has niche positions in respiratory, hand, and
footwear devices. Its safety products business is driven by
demand from customers who must meet U.S. Occupational Safety &
Health Administration requirements. Demand also stems from
customers' desire to avert occupational safety litigation.
Norcross has broadened its markets internationally through
acquisitions. Small tuck-in acquisitions are expected to augment
existing product lines, though the company now has very limited
capacity to do any debt-financed transactions.
Sales and operating income were up significantly in 2004 because
of the recovery in the manufacturing sector, which stimulates
demand for safety products. This momentum continued into the
early part of 2005. Norcross has also benefited from increased
governmental needs for personal protection equipment and an
increased focus on domestic security preparedness.
In addition to improved demand, Norcross has benefited from cost
reductions.
NORTEL NETWORKS: Appoints Harry Pearce as Chairman of the Board
---------------------------------------------------------------
Nortel Networks Corporation (NYSE:NT)(TSX:NT) reported the
appointment of Harry J. Pearce as its non-executive chairman of
the board. Mr. Pearce replaces Lynton R. (Red) Wilson, who has
served as chairman since November 2001.
Mr. Pearce, 62, of Bloomfield Hills, Michigan, United States, has
been a director of the Company since January 11, 2005 and a
director of Nortel Networks Limited since January 18, 2005. Mr.
Pearce was Chairman of the Board of Hughes Electronics Corporation
(now The DIRECTV Group, Inc.), a company engaged in digital
television entertainment, broadband satellite and network services
as well as global video and data broadcasting, from June 2001 to
January 2004. He was a director and Vice-Chairman of General
Motors Corporation from January 1996 to June 2001. Mr. Pearce is
also a director of Marriott International, Inc. and MDU Resources
Group, Inc.
"Nortel is at the center of the breakthrough technologies that are
advancing global communications," Mr. Pearce said. "I am a firm
believer in Bill Owens' leadership, the passion and commitment of
Nortel employees, and the ability of this Company to continue as a
driving force in the communications industry. I look forward to
the opportunities ahead in rebuilding shareholder value and
confidence."
In addition, four new nominees were elected to the board of
directors of the Company:
* Jalynn Bennett of Toronto, Ontario;
* The Hon. James B. Hunt, Jr. of Raleigh, North Carolina;
* John McNaughton of Toronto, Ontario; and
* Ronald Osborne of Toronto, Ontario.
Previously serving directors re-elected to the board are:
* Dr. Manfred Bischoff,
* Robert Brown,
* John Cleghorn,
* Robert Ingram,
* The Hon. John Manley,
* Richard McCormick,
* William A. Owens, and
* Harry J. Pearce.
In addition to Mr. Wilson, previously serving directors, The Hon.
James Johnston Blanchard, L. Yves Fortier, Guylaine Saucier, and
Sherwood Hubbard Smith, Jr. did not stand for re-election to the
Company's board.
Commenting on Mr. Wilson's service to Nortel, Bill Owens, vice
chairman and chief executive officer, Nortel, said, "Nortel owes a
profound debt of gratitude to Red Wilson for his leadership and
contribution to the Company during a dynamic period in the
Company's history."
Mr. Wilson has served as a director of the Company since March
2000 and of its principal operating subsidiary, Nortel Networks
Limited, since April 1991. Acknowledging his valued contribution
and service, Nortel's board of directors recently conferred the
honorary designation of "Chairman Emeritus" on Mr. Wilson.
In addition to Mr. Wilson, Owens acknowledged the many years of
contribution and service to the Company and Nortel Networks
Limited by retiring directors, Blanchard, Fortier, Saucier, and
Smith, Jr. "Nortel is deeply grateful to these individuals for
their time and dedication to the Company," said Owens. "I am
honored to have served alongside these extraordinary people who
continually operated with the highest integrity and commitment
throughout their tenure at Nortel."
Nortel Networks -- http://www.nortel.com/-- is a recognized
leader in delivering communications capabilities that enhance the
human experience, ignite and power global commerce, and secure and
protect the world's most critical information. Serving both
service provider and enterprise customers, Nortel delivers
innovative technology solutions encompassing end-to-end broadband,
Voice over IP, multimedia services and applications, and wireless
broadband designed to help people solve the world's greatest
challenges. Nortel does business in more than 150 countries.
Nortel does business in more than 150 countries.
* * *
As reported in the Troubled Company Reporter on Jan. 31, 2005,
Standard & Poor's Ratings Services affirmed its 'B-' credit rating
on Nortel Networks Lease Pass-Through Trust certificates series
2001-1 and removed it from CreditWatch with negative implications,
where it was placed Dec. 8, 2004.
The affirmation was based on a valuation analysis of properties
that provide security for the two notes that serve as collateral
for the pass through trust certificates.
The initial rating on the securities relied upon the ratings
assigned to both Nortel Networks Ltd. and ZC Specialty Insurance
Co. The Dec. 8, 2004, CreditWatch placement followed the
Dec. 3, 2004 withdrawal of the rating assigned to ZC.
The properties are secured by five single-tenant, office/R&D
buildings in Research Triangle Park, North Carolina that are
leased to Nortel (B-/Watch Developing), which guarantees the
payment and performance of all obligations of the leases. The
lease payments do not fully amortize the notes. A surety bond
from ZC insures the balloon amount.
Due to the withdrawal of the rating on ZC, Standard & Poor's
current analysis incorporates the rating on Nortel and internal
valuations of the properties, including balloon risk. The
valuations factored in current market data. The rating will not
necessarily be in alignment with Nortel's due to the balloon risk,
which is no longer mitigated by a rated entity.
A balloon payment of $74.7 million is due at maturity in
August 2016. If this amount is not repaid, the indenture trustee
can obtain payment from the surety, provided certain conditions
are met.
NORTHWESTERN CORP: Completes $200M Sr. Credit Facility Amendment
----------------------------------------------------------------
NorthWestern Corporation d/b/a NorthWestern Energy (Nasdaq: NWEC)
successfully completed amending its $225 million senior secured
credit facility, and is now operating with a $200 million senior
unsecured revolving credit facility with lower borrowing costs.
In addition, because the amended facility is now an unsecured
facility, the $225 million of first mortgage bond collateral has
been released by the lenders.
The interest rate for the $200 million amended unsecured revolver
is initially set at the London Interbank Offered Rate (LIBOR) plus
112.5 basis points, based on ratings from Fitch, Moody's and
Standard & Poor's. The interest rate on the amended unsecured
revolver may be reduced further as NorthWestern's credit ratings
improve. The interest rate under the previous $225 million
secured credit facility had been LIBOR plus 175 basis points.
The $225 million secured credit facility included a $125 million
revolver, which was undrawn, and had approximately $19 million in
posted letters of credit. The remaining $100 million tranche was
in the form of a Term B loan of which $74.75 million remained
outstanding. The debt and letters of credit under the
$225 million secured facility were moved to the $200 million
unsecured revolver.
The $200 million amended unsecured revolver matures November 1,
2009, and is being financed by a syndicate of 10 banks with
Deutsche Bank Securities, Inc., and Lehman Brothers Inc. serving
as joint arrangers.
"This amendment demonstrates the financial markets' recognition of
NorthWestern's improving capital structure and credit quality,"
said Michael J. Hanson, NorthWestern President and Chief Executive
Officer.
Brian B. Bird, NorthWestern's Chief Financial Officer, added,
"Since Nov. 1, 2004, we have reduced debt by approximately
$115 million, and this amended facility will pave the way for
further debt reduction as we begin to reach our goal of an
investment grade rating."
Headquartered in Sioux Falls, South Dakota, NorthWestern
Corporation (Pink Sheets: NTHWQ) -- http://www.northwestern.com/
-- provides electricity and natural gas in the Upper Midwest and
Northwest, serving approximately 608,000 customers in Montana,
South Dakota and Nebraska. The Debtors filed for chapter 11
protection on September 14, 2003 (Bankr. Del. Case No. 03-12872).
Scott D. Cousins, Esq., Victoria Watson Counihan, Esq., and
William E. Chipman, Jr., Esq., at Greenberg Traurig, LLP, and
Jesse H. Austin, III, Esq., and Karol K. Denniston, Esq., at Paul,
Hastings, Janofsky & Walker, LLP, represent the Debtors in their
restructuring efforts. On the Petition Date, the Debtors reported
$2,624,886,000 in assets and liabilities totaling $2,758,578,000.
The Court entered a written order confirming the Debtors' Second
Amended and Restated Plan of Reorganization, which took effect on
Nov. 1, 2004.
NORTHWESTERN CORP: Good Performance Prompts S&P to Lift Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on multi-utility NorthWestern Corp. to 'BB' from
'BB-' because the new management has taken positive steps to
improve regulatory relations, resolve litigation, and strengthen
the company. In addition, certain senior secured debt ratings
were raised to 'BB+' from 'BB' and others raised to 'BB' from
'BB-'. The outlook is positive.
Sioux Falls, South Dakota-based NorthWestern had about
$825 million of unadjusted total debt as of March 31, 2005.
The ratings on NorthWestern reflect the company's mostly low-risk
electric and gas utility with a satisfactory business profile and
a weak, but improving, financial profile.
"The low-risk nature of NorthWestern's utility is weakened by its
short track record after emerging from bankruptcy, lower-growth
service territories, and historically unsupportive regulation in
Montana," said Standard & Poor's credit analyst Gerrit Jepsen.
Management's continued ability to favorably resolve outstanding
litigation and no adverse outcome from a pending U.S. SEC
investigation, along with Standard & Poor's expectation that the
financial performance projections will be achieved, all factor
heavily into the ratings. Due to NorthWestern's limited ability
to expand in Montana and South Dakota, there is a greater
importance on cost-cutting and other revenues sources to improve
profitability and cash flow.
Because a large majority of NorthWestern's operating income and
cash flow is from the company's Montana operations, an unfavorable
Montana Public Service Commission ruling such as a rate reduction
after a required September 2006 rate review filing could restrict
cash flow.
NRG ENERGY: Invenergy Nelson Wants Judgment Against Dick Corp.
--------------------------------------------------------------
Martin P. Ochs, Esq., at Ochs & Goldberg, LLP, in New York, tells
the U.S. Bankruptcy Court for the Southern District of New York
that Dick Corporation has threatened to name Invenergy Nelson LLC
as co-defendant in a complaint currently pending in the U.S.
District Court for the Northern District of Illinois captioned
Dick Corporation v. SNC-Lavalin Constructors, Inc., so as to
adjudicate, among other things, alleged copyright infringement
concerning certain design materials.
Kendall Project
On November 11, 1999, LSP-Kendall Energy, LLC, a non-debtor
affiliate of NRG Energy, Inc., and Dick Corporation entered into
a contract for the engineering and construction of a power plant
to be located in Minooka, Illinois.
Dick Corporation asserted a mechanic's lien and a foreclosure
action against the Kendall Project. Dick alleged that it
retained ownership of all patents and other intellectual property
for the construction of the Kendall Project, including vendor
drawings and other data necessary for the operation, maintenance,
repair or alteration of the Kendall power plant.
Dick Corporation further maintained that NRG subsequently
transferred Dick's intellectual property created in connection
with the Kendall Project to LSP-Nelson Energy, LLC. Dick
believes that the intellectual property was transferred to Nelson
Energy for the purpose of constructing a power generation
facility in Dixon, Illinois.
On August 12, 2002, Dick Corporation filed a complaint against,
among others, NRG and Nelson Energy, in the Circuit Court of Lee
County, Illinois. The proceeding was removed on September 18,
2002, to the United States District Court for the Northern
District of Illinois. Dick asserted more than $10 million in
damages for equitable lien, unjust enrichment and conversion
claims arising out of the Kendall and Nelson Projects.
Dick Corporation then filed a notice of lis pendens in Lee County
against the Nelson Project for the full amount of the damages.
The Dick Settlement Agreement
After the Petition Date, Dick Corporation sought to lift the
automatic stay under Section 362 of the Bankruptcy Code so that
it could pursue its equitable liens claim outside the Bankruptcy
Court. Dick also filed proofs of claim in excess of $10 million
in damages based on its equitable lien.
Dick Corporation, the Debtors, and Kendall subsequently entered
into a settlement agreement dated April 2, 2004. In the Court-
approved settlement, the parties agreed to mutually release each
other from claims arising out of or otherwise related to the
Kendall and Nelson Projects.
Purchase of Nelson Entities' Assets
In August 2004, Invenergy Investment Company LLC entered into a
Project Asset Purchase Agreement with Nelson Energy and NRG
Nelson Turbines LLC for the acquisition of substantially all
assets of the Nelson Entities. Included in the sale were all
design documents, construction drawings, shop drawings, equipment
manuals, and other design and construction documents,
constituting the intellectual property disputed by Dick
Corporation. The Court approved the Sale free and clear of all
liens, claims, encumbrances and other interests.
Invenergy Investment subsequently assigned its rights under the
Purchase Agreement to Invenergy Nelson.
Invenergy Seeks Judgment
Mr. Ochs tells the Court that there is a genuine controversy as
to whether the Purchase Agreement, the Sale Order, the Dick
Settlement Agreement, and the Dick Settlement Order granted
Invenergy Nelson all right, title to and interest in the Design
Materials, free and clear of Dick Corporation's alleged interest
in those assets.
Accordingly, pursuant to Section 2201 of the Judicial Procedures
Code, Invenergy Nelson asks the Court to enter a judgment:
(a) declaring that Dick Corporation has no right, title to or
interest in the Design Materials;
(b) declaring that the Purchase Agreement, the Sale Order, and
the Dick Settlement Order granted Invenergy Nelson all
right, title to and interest in the Design Materials, free
and clear of any interests that Dick Corporation may
assert; and
(c) declaring that Dick Corporation is barred under the
principle of res judicata from asserting any interest in
the Design Materials.
NRG Energy, Inc., owns and operates a diverse portfolio of
power-generating facilities, primarily in the United States. Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities. The company, along with its
affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case
No. 03-13024) on May 14, 2003. The Company emerged from chapter
11 on December 5, 2003, under the terms of its confirmed Second
Amended Plan. James H.M. Sprayregen, Esq., Matthew A. Cantor,
Esq., and Robbin L. Itkin, Esq., at Kirkland & Ellis, represented
NRG Energy in its $10 billion restructuring. (NRG Energy
Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
* * *
Moody's Investor Services and Standard & Poor's assigned single-B
ratings to NRG Energy's 8% secured notes due 2013.
OLENTANGY COMMERCE: Wants Ricketts Co. as Bankruptcy Counsel
------------------------------------------------------------
Olentangy Commerce Center Limited Partnership asks the U.S.
Bankruptcy Court for the Southern District of Ohio, Eastern
Division, for permission to employ Ricketts Co., LPA, as its
chapter 11 counsel.
Ricketts Co. will advise the Debtor of its chapter 11 duties,
assist in formulating a plan of reorganization and provide
services requiring legal representation.
Richard T. Ricketts, Esq., and Michael Bornstein, Esq., will serve
as lead attorneys on this case. Mr. Ricketts and Mr. Bornstein
will each bill $230 per hour for their services.
Ricketts Co.'s other professionals expected to work on this case
and their hourly rates are:
Professional Hourly Rate
------------ -----------
Charles H. Lease, Esq. $200
M. Brandon Teeples, Esq. 125
Legal Assistants 80
Law Clerks 70
Ricketts Co.'s engagement contract also entitles the Firm to bill
the Debtor and receive payment for 85% of all legal charges and
100% of all expenses on a monthly basis. The 15% holdback from
each monthly invoice will be paid following Court approval of
interim fee applications under Sec. 331 of the Bankruptcy Code.
All of the firms fees and expenses will be subject to approval by
the Bankruptcy Court of a final fee application under 11 U.S.C.
Sec. 330.
The Debtor tells the Court that Ricketts Co. does not hold any
interest materially adverse to the Debtor or its estate.
Headquartered in Grandview Heights, Ohio, Olentangy Commerce
Center Limited Partnership owns a warehouse and office site in
Grandview Heights. The Debtor filed for bankruptcy protection
(Bankr. S.D. Ohio Case No. 05-59249) on May 27, 2005. after
defaulting on a $11.5 million mortgage held by Connecticut General
Life Insurance Co., a major subsidiary of Cigna Corp. When the
Debtor filed for protection from its creditors, it listed $10 to
$50 million in assets and $10 to $50 million in debts.
OMNOVA SOLUTIONS: Good Performance Cues S&P to Hold B Corp. Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit and senior secured debt ratings on OMNOVA Solutions Inc.
and removed the ratings from CreditWatch with negative
implications, where they were placed on Feb. 14, 2005. The
outlook is negative.
Fairlawn, Ohio-based OMNOVA Solutions, with about $790 million of
annual sales and approximately $198 million of total debt
outstanding, manufactures emulsion polymers, decorative and
functional surfaces, such as commercial wall coverings, and
specialty chemicals.
"The ratings affirmation follows our review of OMNOVA's second-
quarter results, which indicate that operating results appear to
be stabilizing," said Standard & Poor's credit analyst George
Williams.
Operating results were improved through diligent cost-cutting
measures and more aggressive pricing to offset higher raw-material
costs and difficult market conditions in the decorative products
markets.
The ratings on OMNOVA reflect the company's fair market positions
and decent product diversification, offset by competitive markets,
exposure to volatile raw-material costs, and a highly leveraged
financial profile. OMNOVA was created in October 1999 as a spin-
off of GenCorp Inc.'s polymer products businesses. Performance
chemicals, which account for 53% of revenues, focus on the
manufacture of latex and a portfolio of specialty chemicals.
In particular, the company is the second-largest producer of
styrene butadiene latex, which is used in carpet-backing
applications and in manufacturing coated paper. The decorative
and building products segment (about 47% of revenues) focuses on
polyvinyl chloride and paper-based decorative surface products and
single-ply roofing systems. Proficiency in vinyl applications and
design capabilities support the company's well-established global
share of commercial wall coverings and good positions in coated
fabrics and decorative laminates. However, these industry segments
result in considerable exposure to the commercial real estate
cycle.
PARK PLACE: Fitch Places BB+ Rating on $30 Million Private Class
----------------------------------------------------------------
Park Place Securities Inc.'s asset-backed pass-through
certificates, series 2005-WCW2, are rated by Fitch Ratings:
-- $1,435,108,000 privately offered classes A-1A, A-1B, A-1C,
A-1D 'AAA';
-- $480.09 million publicly offered classes A-2A, A-2B, A-2C,
A-2D 'AAA';
-- $78.00 million class M-1 'AA+';
-- $74.40 million class M-2 'AA+';
-- $45.60 million class M-3 'AA';
-- $42.00 million class M-4 'AA-';
-- $38.40 million class M-5 'A+';
-- $34.80 million class M-6 'A';
-- $31.20 million class M-7 'A-';
-- $28.80 million class M-8 'BBB+';
-- $24.00 million class M-9 'BBB',
-- $26.40 million class M-10 'BBB-',
-- $30.00 million privately offered class M-11 'BB+'.
Credit enhancement for the 'AAA' rated class A certificates
reflects the 20.20% credit enhancement provided by classes M-1
through M-11 certificates, monthly excess interest and initial
overcollateralization of 1.30%.
Credit enhancement for the 'AA+' rated class M-1 certificates
reflects the 16.95% credit enhancement provided by classes M-2
through M-12 certificates, monthly excess interest, and initial
OC.
Credit enhancement for the 'AA+' rated class M-2 certificates
reflects the 13.85% credit enhancement provided by classes M-3
through M-12 certificates, monthly excess interest, and initial
OC.
Credit enhancement for the 'AA' rated class M-3 certificates
reflects the 11.95% credit enhancement provided by classes M-4
through M-12 certificates monthly excess interest, and initial OC.
Credit enhancement for the 'AA-' rated class M-4 certificates
reflects the 10.20% credit enhancement provided by classes M-5
through M-12 certificates, monthly excess interest, and initial
OC.
Credit enhancement for the 'A+' rated class M-5 certificates
reflects the 8.60% credit enhancement provided by classes M-6
through M-12 certificates, monthly excess interest, and initial
OC.
Credit enhancement for the 'A' rated class M-6 certificates
reflects 7.15% credit enhancement provided by classes M-7 through
M-12 certificates, monthly excess interest, and initial OC.
Credit enhancement for the 'A-' rated class M-7 certificates
reflects the 5.85% credit enhancement provided by classes M-8
through M-12 certificates, monthly excess interest, and initial
OC.
Credit enhancement for the 'BBB+' rated class M-8 certificates
reflects the 4.65% credit enhancement provided by classes M-9
through M-12 certificates, monthly excess interest, and initial
OC.
Credit enhancement for the 'BBB' rated class M-9 certificates
reflects the 3.65% credit enhancement provided by classes M-10
through M-12 certificates, monthly excess interest, and initial
OC.
Credit enhancement for the 'BBB-' rated class M-10 certificates
reflects the 2.55% credit enhancement provided by class M-11
certificates, monthly excess interest, and initial OC.
Credit enhancement for the non-offered 'BB+' class M-11
certificates reflects the monthly excess interest and initial OC.
In addition, the ratings reflect the integrity of the
transaction's legal structure as well as the capabilities of
Countrywide Home Loans Servicing LP as master servicer. Wells
Fargo Bank, N.A. will act as trustee.
As of the cut-off date, June 1, 2005, the group I mortgage loans
have an aggregate balance of $1,798,381,379. The average
principal balance of the mortgage loans is approximately $166,071.
The weighted average loan rate is approximately 7.574%. The
weighted average remaining term to maturity is 357 months. The
weighted average original loan-to-value ratio is 79.93%, and the
weighted average Fair, Isaac & Co. score is 613. The properties
are primarily located in California (17.26%), Florida (14.67%),
Illinois (9.49%), New York (6.29%), and Arizona (6.03%). All
other states represent less than 5% of the group I pool balance as
of the cut-off date.
As of the cut-off date, the group II mortgage loans have an
aggregate balance of $601,620,613. The average principal balance
of the mortgage loans is approximately $216,566. The weighted
average loan rate is approximately 7.597%. The WAM is 356 months.
The weighted average OLTV ratio is 80.74%, and the weighted
average FICO score is 615. The properties are primarily located
in California (38.34%), Florida (9.70%), and New York (9.31%).
All other states represent less than 5% of the group II pool
balance as of the cut-off date.
The loans were originated or acquired by Argent Mortgage Company,
LLC and Olympus Mortgage Company, both of which are affiliates of
Ameriquest Mortgage Company, a specialty finance company engaged
in the business of originating, purchasing, and selling retail and
wholesale subprime mortgage loans.
PERKINELMER INC: Fitch Withdraws BB+ Ratings on Senior Debt
-----------------------------------------------------------
Fitch Ratings affirms and simultaneously withdraws PerkinElmer,
Inc.'s 'BB+' bank loan rating, 'BB+' senior unsecured debt rating,
and 'BB-' senior subordinated debt rating. Fitch will no longer
provide analytical coverage of the company. The rating action
affects approximately $374 million in senior secured and senior
subordinated debt.
Fitch's rating definitions are available on the agency's public
web site http://www.fitchratings.com/ Published ratings, criteria
and methodologies, and relevant policies and procedures are also
available from this site, at all times.
PETCO ANIMAL: Nasdaq Restores Stock Trading After Compliance
------------------------------------------------------------
PETCO Animal Supplies, Inc. (Nasdaq: PETCE) received notice from
The Nasdaq Stock Market that the Company has evidenced compliance
with all requirements for continued listing on The Nasdaq National
Market and that effective at the market open on Friday, July 1,
2005, the Company's trading symbol will be restored to "PETC".
The Company had previously announced that it received notices of
potential delisting due to the Company's failure to file its
fiscal 2004 Annual Report on Form 10-K and its Quarterly Report on
Form 10-Q for the first quarter of fiscal 2005 on a timely basis.
The Company has filed the 2004 Form 10-K and the First Quarter
10-Q and is now current with respect to its required Securities
and Exchange Commission filings. Accordingly, Nasdaq has
determined that the hearing scheduled for June 30, 2005 is
unnecessary and the hearing file has been closed.
PETCO Animal Supplies, Inc., is a specialty retailer of premium
pet food, supplies and services. PETCO's vision is to best
promote, through its people, the highest level of well being for
companion animals, and to support the human-animal bond.
PETCO generated net sales of more than $1.8 billion in fiscal
2004. It operates over 730 stores in 47 states and the District
of Columbia, as well as a leading destination for on-line pet food
and supplies at http://www.petco.com/Since its inception in 1999,
The PETCO Foundation, PETCO's non-profit organization, has raised
more than $23 million in support of more than 2,700 non-profit
grassroots animal welfare organizations around the nation.
* * *
As reported in the Troubled Company Reporter on Feb. 24, 2005,
Moody's Investors Service upgraded the long-term debt ratings of
Petco Animal Supplies, Inc. Moody's said the outlook is stable.
The upgrade reflects the company's continued solid operating
performance, which has led to a sustained improvement in its
financial metrics, which support a higher rating category.
The ratings are upgraded are:
* Senior implied to Ba2 from Ba3;
* Issuer rating to Ba3 from B1;
* Senior subordinated notes to B1 from B2.
The rating withdrawn is:
* $215.4 million senior secured credit facilities.
PHH MORTGAGE: Fitch Rates $166,300 Private Class Certs. at B
------------------------------------------------------------
PHH Mortgage Capital LLC mortgage pass-through certificates,
series 2005-4, are rated:
-- $110,644,813 classes A-1 through A-8, R-I and R-II
certificates (senior certificates) 'AAA'
-- $4,822,695 privately offered class B-1 certificates 'AA';
-- $776,066 privately offered class B-2 certificates 'A';
-- $388,033 privately offered class B-3 certificates 'BBB';
-- $277,166 privately offered class B-4 certificates 'BB';
-- $166,300 privately offered class B-5 certificates 'B'.
The 'AAA' rating on the senior certificates reflects the 6.00%
subordination provided by the 4.35% class B-1, the 0.70% class B-
2, the 0.35% class B-3, the 0.25% class B-4, the 0.15% class B-5,
and the 0.20% privately offered class B-6 (which is not rated by
Fitch).
Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the
ratings also reflect the quality of the underlying mortgage
collateral, strength of the legal and financial structures and the
servicing capabilities of PHH Mortgage Corporation (rated 'RPS1'
by Fitch Ratings).
The certificates represent ownership in a trust fund, which
consists primarily of 206 one- to four-family conventional, 30-
year and 15-year fixed-rate mortgage loans secured by first liens
on residential mortgage properties. As of the cut-off date (June
1, 2005), the mortgage pool has an aggregate principal balance of
approximately $110,866,545, a weighted average original loan-to-
value ratio of 69.00%, a weighted average coupon of 5.877%, a
weighted average remaining term to maturity of 327 months and an
average balance of $538,187. The loans are primarily located in
California (15.45%), New Jersey (9.49%), and New York (8.66%).
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
please see the press release issued May 1, 2003 entitled 'Fitch
Revises Rating Criteria in Wake of Predatory Lending Legislation',
available on the Fitch Ratings web site at
http://www.fitchratings.com/
All of the mortgage loans were either originated or acquired in
accordance with the underwriting guidelines established by PHH
Mortgage Corporation. Any mortgage loan with an OLTV in excess of
80% is required to have a primary mortgage insurance policy.
Approximately 2.89% of the mortgage loans are pledged asset loans.
These loans, also referred to as 'Additional Collateral Loans',
are secured by a security interest, normally in securities owned
by the borrower, which generally does not exceed 30% of the loan
amount. Ambac Assurance Corporation provides a limited purpose
surety bond, which guarantees that the trust receives certain
shortfalls and proceeds realized from the liquidation of the
additional collateral, up to 30% of the original principal amount
of that Additional Collateral Loan.
Citibank N.A. will serve as trustee. For federal income tax
purposes, an election will be made to treat the trust fund as two
real estate mortgage investment conduits.
PHOTOWORKS INC: Shareholders' Approve Debt-for-Equity Conversion
----------------------------------------------------------------
PhotoWorks(R), Inc. (OTCBB:FOTO) successfully secured shareholder
approval of its recapitalization agreements. The comprehensive
plan negotiated with the holders of the subordinated debt and
holders of the preferred shares results in a $2 million cash
infusion of equity strengthening the company's balance sheet.
In addition, the agreement calls for the conversion of
$4.5 million of interest bearing debt to common stock and the
conversion of the Series A Preferred Stock with its $20 million
liquidation preference into common stock. A five-for-one reverse
stock split was also approved, a move that is aimed at increasing
the marketability and liquidity of the company's common stock.
"I am extremely pleased and gratified by such a positive
endorsement on the part of our shareholders," said Philippe
Sanchez, President and CEO of PhotoWorks and the chief architect
of the restructure. "The management team and I are committed to
increasing the value of the company for our shareholders and this
restructuring gives us the means to build on the strong
foundations we've put in place and position the company for rapid
growth."
As evidence of management's commitment to shareholders' interests,
the restructuring plan also addressed and enhanced several
corporate governance issues. Approved were:
* An amendment of the company's articles of incorporation and
bylaws to repeal its classified board and establish the
annual election of all directors;
* Repeal of the company's "Poison Pill" -- a provision that
allows management to defend against hostile takeover but
that research suggests decreases shareholder value.
"The new capital and governance structure establishes sound
fundamentals for the company and increases credibility with the
investment community," continued Mr. Sanchez. "The approved
measures strengthen our balance sheet, eliminate approximately
$295,000 a year in interest expense, and the simplified capital
structure facilitates the company's ability to engage in future
financing."
The shareholder vote and agreements by the holders of the
subordinated debt and holders of preferred stock to convert into
common stock are votes of confidence in the opportunity ahead and
the rapid progress of the turnaround. Over the past 18 months,
the new management team has succeeded in repositioning the company
from a legacy film processing organization to one focused on the
higher margin and rapidly growing digital photography market. The
company attracted a new leadership team along with marketing and
technology professionals, migrated to a new digital imaging
platform, and launched new digital products and services such as
Custom Photo Books and high-end Signature Greeting Cards that have
been featured on TV shows and high profile publications including
The TODAY Show, ABC-TV New York, Real Simple Magazine, InStyle
Magazine and PC Magazine.
PhotoWorks(R), Inc. (OTCBB:FOTO) -- http://www.photoworks.com/--
is an online photography services company. With a 25-year
national heritage (formerly known as Seattle FilmWorks),
PhotoWorks helps photographers -- both film and digital -- share
and preserve their memories with innovative and inspiring products
and services. Every day, photographers send film, memory cards
and CDs, or go to http://www.photoworks.com/to upload, organize
and email their pictures, order prints, and create Signature Photo
Cards and Custom Photo Books. Offering a 100% satisfaction
guarantee, PhotoWorks has been awarded an "Outstanding" rating by
The Enderle Group technology analysis firm.
At Mar. 26, 2005, PhotoWorks Inc.'s balance sheet showed a
$1,734,000 stockholders' deficit, compared to a $536,000 deficit
at Sept. 25, 2004.
PRIDE INTERNATIONAL: Board Elects Louis Raspino as President & CEO
------------------------------------------------------------------
Pride International, Inc.'s (NYSE: PDE) board of directors elected
Louis A. Raspino to serve as President and Chief Executive Officer
and as a director of Pride. Mr. Raspino replaces Paul A. Bragg,
who has resigned his positions with Pride to pursue other
interests following discussions with and at the request of the
Board.
Mr. Raspino, age 52, has been Executive Vice President and Chief
Financial Officer since joining Pride in December 2003. From July
2001 until December 2003, he was Senior Vice President - Finance
and Chief Financial Officer of Grant Prideco, Inc. Prior to his
service at Grant Prideco, Mr. Raspino held executive positions at
Halliburton, Burlington Resources and Louisiana Land and
Exploration Company.
"We are very pleased that Louis Raspino has agreed to serve as CEO
of Pride," David A. B. Brown, Chairman of the Board of Directors
of Pride, said. "Louis has almost 30 years of experience at
international exploration and production as well as energy service
companies. As such, he provides Pride an in-depth understanding
of both the international service business and its customer base.
Since joining Pride 18 months ago, Louis has been one of the
primary drivers for many of the significant improvements in
Pride's performance. We look forward to utilizing his skills and
vision to continue our progress."
Mr. Brown continued: "The Board also wishes to thank Paul Bragg
for his 12 years of service to Pride -- as CFO, as President and
COO and as CEO. Paul has been an integral part of the
transformation of the Company from a small, domestic land well-
servicing company to one of the world's largest international
drilling contractors."
Pride has commenced a search for a new Chief Financial Officer.
Pride International, Inc., headquartered in Houston, Texas, is one
of the world's largest drilling contractors. The Company provides
onshore and offshore drilling and related services in more than 30
countries, operating a diverse fleet of 289 rigs, including two
ultra-deepwater drillships, 12 semisubmersible rigs, 29 jackup
rigs, 19 tender-assisted, barge and platform rigs, and 227 land
rigs.
* * *
As reported in the Troubled Company Reporter on May 10, 2005,
Fitch Ratings has upgraded Pride International's senior unsecured
rating to 'BB-' from 'B+'. Additionally, the senior secured
credit facility rating has been upgraded to 'BB+' from 'BB'. The
Rating Outlook has been revised to Positive from Stable.
The ratings reflect the significant improvement in capital
structure that has taken place in the last two quarters.
Presently, Pride has less than $1.4 billion of debt, approximately
$600 million less than when Fitch last reviewed the ratings.
Furthermore, Pride management has suggested that it will maintain
a stronger balance sheet going forward.
PURADYN FILTER: Files Notice of Voluntary Delisting from AMEX
-------------------------------------------------------------
puraDYN Filter Technologies Incorporated (AMEX:PFT) submitted to
the American Stock Exchange notice of its intent to withdraw from
listing its common stock, and has filed an application for
delisting with the Securities and Exchange Commission pursuant to
Section 12(d) of the Securities Exchange Act of 1934.
puraDYN's Board of Directors considered several factors in making
this decision, including:
* Determination that the Company, as previously notified on
April 28, 2005, would not be able to timely comply with the
Exchange's ongoing financial compliance listing standards
under Section 1003(a)(i) and (ii) of the Exchange's Company
Guide.
* Subsequent notice received from the Exchange on June 24,
2005 that the Company is not in compliance with Sections
301, 711 and 713(a)(ii) of the Company Guide, the
consequences of which would require the Company to either:
1) limit the amount of financing of its previously
announced private offering or
2) incur additional costs and defer receipt of the
financing pending stockholder approval as required by
the Exchange's rules.
* The expense of maintaining the listing of the Company's
common stock on the Exchange, including the cost for
Exchange-listed shares of complying with requirements
relative to the Sarbanes-Oxley Act of 2002, which has had,
and is expected to have, a significant negative effect on
the Company's cash flow and earnings.
* Continued compliance with the listing rules and requirements
of the Exchange and Sarbanes-Oxley demand significant
attention and time from Company management and personnel
that could be dedicated to developing business and pursuing
strategic opportunities.
"After careful deliberation, our Board of Directors concluded that
the needs of the Company and its stockholders are better served at
this time and the foreseeable future by delisting puraDYN from the
Exchange and trading its common stock on the OTC Bulletin Board,"
Joseph V. Vittoria, Chairman, said.
"In conjunction with senior management, we believe that this
action will result in material savings to the Company and allow
our team to focus solely on our business operations."
puraDYN continues to be required to file reports with the SEC
under Section 13 of the Securities Exchange Act of 1934, including
quarterly and annual reports, and its common stock is expected in
the ordinary course to be included for quotation on the OTC
Bulletin Board.
The Company will also continue to engage the services of its
independent registered public accounting firm, Daszkal Bolton LLP,
to perform quarterly and annual audits of the Company's financial
statements and maintain many of the corporate governance
improvements the Company achieved during its tenure on the
Exchange.
puraDYN will announce the new trading symbol and effective date of
trading when received.
puraDYN Filter Technologies, Inc., (AMEX:PFT) designs,
manufactures and markets the puraDYN(R) Bypass Oil Filtration
System, the most effective filtration product on the market today.
It continuously cleans lubricating oil and maintains oil viscosity
to safely and significantly extend oil change intervals and engine
life. Effective for internal combustion engines, transmissions
and hydraulic applications, the Company's patented and proprietary
system is a cost-effective and energy-conscious solution targeting
an annual $13 billion potential industry.
The Company has established aftermarket programs with several of
the transportation industry leaders such as Volvo Trucks NA, Mack
Trucks, PACCAR; a strategic alliance with Honeywell Consumer
Products Group, producers of FRAM(R) filtration products; and
continues to market to major commercial fleets. puraDYN(R)
equipment has been certified as a 'Pollution Prevention
Technology' by the California Environmental Protection Agency and
was selected as the manufacturer used by the US Department of
Energy in a three-year evaluation to research and analyze
performance, benefits and cost analysis of bypass oil filtration
technology.
At Mar. 31, 2005, puraDYN Filter Technologies, Inc.'s balance
sheet showed a $3,943,382 stockholders' deficit, compared to a
$3,127,358 deficit at Dec. 31, 2004.
RBSGC MORTGAGE: Moody's Rates $78,000 Class II-B-5 Cert. at B2
--------------------------------------------------------------
Moody's Investors Service has assigned Aaa to B2 ratings to the
senior and subordinate classes of the RBSGC Mortgage Loan Trust,
Mortgage Pass-Through Certificates, Series 2005-RP1. The
transaction consists of the securitization of FHA insured and VA
guaranteed reperforming loans virtually all of which were
repurchased from GNMA pools.
The credit quality of the mortgage loans underlying the
securitization is comparable to that of mortgage loans underlying
sub-prime securitizations. However, after the FHA and VA
insurance is applied to the loans, the credit enhancement levels
are comparable to the credit enhancement levels for prime-quality
residential mortgage loan securitizations. The insurance covers a
large percent of any losses incurred as a result of borrower
defaults.
The Federal Housing Administration is a federal agency within the
Department of Housing and Urban Development whose mission is to
expand opportunities for affordable home ownership, rental
housing, and healthcare facilities. The Department of Veterans
Affairs, formerly known as the Veterans Administration, is a
cabinet-level agency of the federal government. The rating of
this pool is based on the credit quality of the underlying loans
and the insurance provided by FHA and the guarantee provided by
VA.
The complete rating action is:
Issuer: RBSGC Mortgage Loan Trust
Mortgage Pass-Through Certificates, Series 2005-RP1
* Class I-F $241,443,000 Aaa
* Class I-SF Notional Aaa
* Class I-SB Notional Aaa
* Class I-B-1 $1,242,000 Aa2
* Class I-B-2 $1,242,000 A2
* Class I-B-3 $1,242,000 Baa2
* Class I-B-4 $994,000 Ba2
* Class I-B-5 $869,000 B2
* Class II-A $25,254,000 Aaa
* Class II-B-1 $116,000 Aa2
* Class II-B-2 $103,000 A2
* Class II-B-3 $91,000 Baa2
* Class II-B-4 $91,000 Ba2
* Class II-B-5 $78,000 B2
RESI FINANCE: Fitch Places Low-B Ratings on Three Cert. Classes
---------------------------------------------------------------
Fitch rates the securities of Real Estate Synthetic Investment
Finance Limited Partnership 2005-B and RESI Finance DE Corporation
2005-B (collectively, the issuers) as indicated below. The rating
on the securities addresses the timely payment of interest and
ultimate repayment of principal upon maturity.
-- $42,861,000 class B3 notes 'AA-';
-- $19,049,000 class B4 notes 'A';
-- $23,811,000 class B5 notes 'BBB+';
-- $7,619,000 class B6 notes 'BBB+';
-- $25,716,000 class B7 notes 'BB';
-- $4,762,000 class B8 notes 'BB-';
-- $4,762,000 class B9 notes 'B+';
-- $4,762,000 class B10 notes 'B';
-- $4,762,000 class B11 notes 'B-'.
The transaction is a synthetic balance sheet securitization that
references a $9.5 billion of diversified portfolio of primarily
jumbo, A-quality, fixed-rate, first lien residential mortgage
loans.
The ratings are based upon the credit quality of the reference
portfolio, the credit enhancement provided by subordination for
each tranche, the financial strength of Bank of America, National
Association, as swap counterparty, and the sound legal structure
of the transaction. The reference portfolio consists of primarily
30-year mortgage loans originated by various lenders.
The issuers have entered into a credit default swap with BOANA,
documented under an International Swaps and Derivatives
Association agreement, and receive a premium in return for credit
protection on the reference portfolio.
The proceeds of the issued securities will be used to purchase
eligible investments, pursuant to a forward delivery agreement
between the trustee and BOANA, whereby the co-issuers are
obligated to purchase eligible investments from BOANA at a
specified yield on each determination date.
Eligible investments will consist of direct obligations of or
guaranteed by the Federal National Mortgage Association, Federal
Home Loan Mortgage Corporation, Federal Home Loan Bank, or any
other agency backed by the U.S. The collateral is pledged first,
to the counterparty to reimburse for credit losses on reference
portfolio during the term of the CDS and, second, to the
noteholders for repayment of principal at maturity. Interest
earned on the collateral during the term of the CSD is used in
combination with the premium from BOANA to make monthly security
payments.
ROGERS COMMS: Call-Net Acquisition Expected to Close Today
----------------------------------------------------------
Rogers Communications Inc. disclosed the significant expansion of
its telephony offerings effective July 1, 2005, with the expected
closing of the acquisition of Call-Net Enterprises Inc. which
currently markets its communications services under the Sprint
Canada name and the introduction of its voice-over-cable local
telephony service offering.
On Wednesday, June 29, shareholders of Call-Net voted to approve
the acquisition of Sprint Canada by RCI under a plan of
arrangement. Call-Net obtained approval of the transaction from
the Ontario Superior Court of Justice at hearing yesterday
morning. The acquisition is expected to close today, July 1,
2005. Following the closing, Rogers will begin the process of re-
branding Sprint Canada to the Rogers brand in cities across Canada
As reported in the Troubled Company Reporter on May 13, 2005,
Rogers Communications and Call-Net entered into a definitive
agreement under which RCI will acquire 100% of Call-Net in a
share-for-share transaction under a plan of arrangement.
Under the terms of the agreement, Call-Net Common and Class B
shareholders will receive a fixed exchange ratio of one RCI Class
B Non-voting share for each 4.25 outstanding shares of Call-Net,
representing a fully diluted equity value of approximately
$330 million. In total, it is expected that upon closing of the
transaction approximately 9.0 million RCI Class B Non-voting
shares will be issued representing approximately 3.2% of the pro
forma shares outstanding. Based upon the May 10, 2005 closing
price of the RCI Class B Non-voting shares, the transaction values
Call-Net at approximately $8.71 per share. At March 31, 2005,
Call-Net had senior secured notes due 2008 of $269.8 million
outstanding and cash and short-term investments of $79.6 million.
Call-Net Enterprises Inc. (TSX: FON, FON.NV.B) --
http://www.callnet.ca/and http://www.sprint.ca/-- primarily
through its wholly owned subsidiary Sprint Canada Inc., is a
leading Canadian integrated communications solutions provider of
home phone, wireless, long distance and IP services to households,
and local, long distance, toll free, enhanced voice, data and IP
services to businesses across Canada. Call-Net, headquartered in
Toronto, owns and operates an extensive national fibre network,
has over 151 co-locations in five major urban areas including 33
municipalities and maintains network facilities in the U.S. and
the U.K.
Rogers Communications, Inc., (TSX: RCI; NYSE: RG) is a diversified
Canadian communications and media company engaged in three primary
lines of business. Rogers Wireless is Canada's largest wireless
voice and data communications services provider and the country's
only carrier operating on the world standard GSM/GPRS technology
platform; Rogers Cable is Canada's largest cable television
provider offering cable television, high-speed Internet access and
video retailing; and Rogers Media is Canada's premier collection
of category leading media assets with businesses in radio,
television broadcasting, televised shopping, publishing and sport
entertainment.
* * *
As reported in the Troubled Company Reporter on June 14, 2005,
Fitch Ratings has initiated coverage of Call-Net Enterprises Inc.
and assigned a 'B-' rating to its senior secured notes. Fitch
also places the ratings of Call-Net on Rating Watch Positive due
to the CDN$330 million all-stock acquisition of Call-Net by Rogers
Communications Inc. (rated 'BB-' by Fitch). Approximately
US$223 million of debt securities are affected by these actions.
As reported in the Troubled Company Reporter on May 31, 2005,
Standard & Poor's Rating Services affirmed its 'BB' long-term
corporate credit ratings and 'B-2' short-term credit ratings on
Rogers Communications Inc., Rogers Wireless Inc., and Rogers Cable
Inc. S&P said the outlook is stable.
SATELITES MEXICANOS: Creditors Dismayed Over Mexican Bankruptcy
---------------------------------------------------------------
Satelites Mexicanos, S.A. de C.V., the leading Mexican satellite
operator in the Americas, decided to file a voluntary concurso
mercantile in Mexico on June 29, 2005, to the dismay of its U.S.
creditors.
The creditors said that they intend to pursue their joint plan to
restructure the Company's U.S.-issued debt obligations through a
U.S. Chapter 11 proceeding. The group of secured and unsecured
noteholders, holding in excess of $379 million of outstanding
notes of Satmex, filed an involuntary Chapter 11 petition against
the Company in the U.S. Bankruptcy Court for the Southern District
of New York on May 25, 2005. The creditors agreed on June 13 to
extend a deadline for Satmex to respond to their petition to
July 7 from June 15.
"The creditors are committed to ensuring the viability of Satmex
and believe that the best chance to achieve a timely and
successful restructuring is under a court-supervised Chapter 11
reorganization in the U.S.," said Mitchell A. Harwood, Managing
Director of Evercore Partners, financial advisor to the ad hoc
committee of holders of the Senior Secured Floating Rate Notes.
The creditors believe that the United States is the proper venue
for a court supervised restructuring because the only debt to be
compromised as part of the restructuring is the bond debt issued
by Satmex in the United States, almost all of which is held by
U.S.-based creditors. Moreover, Satmex consented to jurisdiction
in New York in connection with the bond debt.
The ad hoc committees of holders of:
-- the Senior Secured Floating Rate Notes due 2004, represented
by Wilmer Cutler Pickering Hale and Dorr LLP; and
-- the 10-1/8% Senior Notes due 2004, represented by Akin Gump
Strauss Hauer & Feld LLP,
have proposed a restructuring plan that would put Satmex back on
solid financial footing within 90 days while providing up to
$55 million of financing to launch the Satmex 6 satellite
currently in storage in French Guiana.
"The creditors believe the restructuring plan submitted in
connection with the involuntary Chapter 11 filing represents the
quickest way to inject new capital into Satmex, reduce the
Company's debt levels, and preserve value for all stakeholders,"
said Skip Victor, Senior Managing Director of Chanin Capital
Partners, financial advisor to the ad hoc committee of holders of
the 10-1/8% Senior Notes.
"While the creditors are hopeful that a consensual restructuring
can be reached and remain willing to work with the Company and its
shareholders to achieve that goal, they are concerned that their
requests to meet with the Mexican Government to discuss the terms
of a consensual restructuring have to date been rejected," Mr.
Victor said.
The creditors believe that Satmex may have filed a voluntary
concurso mercantil not because it is in the best interest of the
Company and its customers but rather due to pressure from the
Mexican Government. The creditors' belief is due to Mexican press
reports suggesting that officials of Mexico's Ministry of
Transportation and Communications have pressured the Company into
a concurso mercantil filing to allow the Mexican Government to
extract value from Satmex for a debt that is owed to the Mexican
Government not by Satmex but rather by Satmex's parent company,
Servicios Corporativos.
These press reports suggest that SCT officials want the Satmex
restructuring to proceed in Mexico where they believe the
menoscabo and the Mexican Government's position as minority
shareholder will be treated more favorably than in a U.S. court.
The creditors stressed that their U.S. Chapter 11 restructuring
plan would not compromise the menoscabo debt owed by Servicios
Corporativos. On the contrary, the Creditors fully support the
payment in full of the Mexican Government's menoscabo debt ahead
of any distributions to Satmex shareholders.
Given that the menoscabo debt would not be compromised under the
proposed Chapter 11 restructuring plan, the creditors are
surprised that the Mexican Government, a shareholder in the
Company, would not consider and respond to the creditors'
proposal, which has the support and approval of more than two-
thirds of Satmex's creditors and which would quickly provide the
Company with badly-needed new financing.
Headquartered in Mexico, Satelites Mexicanos, S.A. de C.V.,
derives over 50% of its revenues from United States business, and
all of the Company's over US$500 million in debt was issued in the
United States and is governed by New York law. The Company's
largest shareholder, Loral Space & Communications Ltd., is a
United States public company also undergoing a Chapter 11
reorganization in the U.S. Bankruptcy Court for the Southern
District of New York. The Company is forced into chapter 11 by
three noteholders on May 25, 2005 (Bankr. S.D.N.Y. Case No.
05-13862). The noteholders are represented by Wilmer Cutler
Pickering Hale and Dorr LLP and Akin Gump Strauss Hauer & Feld
LLP.
Under U.S. bankruptcy law, Satmex has 20 days to respond to the
involuntary petition, during which time the Company is entitled to
operate its business in the ordinary course. In the event that
the Company or another party contests the involuntary petition, it
will be up to the Bankruptcy Court to determine whether the
Chapter 11 reorganization will proceed.
SOUPER SALAD: Taps Atlas Partners as Real Estate Consultant
-----------------------------------------------------------
Souper Salad Inc. obtained permission from the U.S. Bankruptcy
Court for the District of Arizona to employ Atlas Partners, LLC,
as real estate consultant.
Atlas Partners specializes in addressing the commercial real
estate problems faced by asset-based lenders, turnaround
management consultants, bankruptcy and workout attorneys and
corporations with restructuring needs.
The Debtor tells the Court that the Firm's background, expertise,
and historical performance will contribute to its successful
reorganization.
In this engagement, Atlas Partner's will:
a) review leases and related documentation, as well as
related correspondence to determine any lease provisions
that might impact, either favorably or unfavorably, on the
ability to achieve rental reductions;
b) review real estate market conditions in specified trade
areas;
c) negotiate with various landlords to achieve the maximum
rental reduction or deferral, and related review of
landlord relationships with the Debtor;
d) assist in efforts to sublease or sell any specified
locations; and
e) provide testimony or court appearances, as required.
The Debtor will pay Atlas Partners according to these terms:
a) a lease review or set-up fee of $350 per designated
location.
b) a base fee of $1,000 for Mitigation (rent reduction and/or
deferral for designated location). Alternatively, the Firm
will receive a success fee of 4% of the rent reduction or
deferral due over remaining term of the lease, including
extension periods, or the Base Fee, which ever is greater.
For "no relief" locations, the Firm will only be entitled
to the Base Fee.
c) a sublease or sale of leases fee equivalent to 6% of the
total consideration to be paid by the replacement tenant,
or 10% of any key money consideration.
d) a testimony or court appearance fee of $475 per hour for
the Firm's president and $425 per hour for its managing
director.
To the best of the Debtor's knowledge, Atlas Partners is a
"disinterested person," as that term is defined in section 101(14)
of the Bankruptcy Code.
Atlas Partners' professionals have years of participation in the
commercial real estate development, investment and disposition
business, and have served as consultants to numerous other
restaurant entities involved in restructurings including, among
others, Chevy's, Inc., International King's Table, Carlos
Murphy's/Garcia's of Scottsdale, Chart House Restaurants, Inc. and
Country Harvest Buffet.
Headquartered in San Antonio, Texas, Souper Salad Inc. --
http://www.soupersalad.com/-- operates an all-you-care-to-eat
soup and salad bar restaurant chain. The Debtor filed for chapter
11 protection (Bankr. D. Ariz. Case No. 05-10160) on June 6, 2005.
Daniel Collins, Esq., at Collins, May, Potenza, Baran & Gillespie,
P.C., and Mark W. Wege, Esq., at Bracewell Giuliani, represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed $16,115,715 in assets and
$50,383,179 in debts.
STATEN ISLAND: Moody's Rates $31.7MM Series 2001A & B Bonds at B2
-----------------------------------------------------------------
Moody's Investors Service has downgraded the long term bond rating
of Staten Island University Hospital to B2 from Ba3 and retained
the negative outlook. The rating is removed from WatchList where
it was placed initially on February 23, 2005 and again on May 24,
2005. The rating action affects $111 million of outstanding
bonds, including the Series 1998, 2001 and 2002 (see detailed list
at end of this report).
The two-notch downgrade is due largely to the adverse outcome
related to the recently announced settlement with the New York
State Attorney General's Office and the risk surrounding the
ongoing negotiations with the federal Office of the Inspector
General and the U.S. Attorney's Office. In conjunction with this
rating action we have also revised the outlook on the A3 rating
assigned to North Shore-Long Island Jewish Health System, SIUH's
parent, to negative from stable.
Legal Security
The public bonds are secured by a pledge of gross receipts and a
mortgage on the health care facilities. An inter-creditor
agreement between the Dormitory Authority of the State of New
York, the New York City Industrial Development Agency and the bond
trustees includes a 120-day standstill provision during which time
the Dormitory Authority has the exclusive right to negotiate a
workout plan and creditor remedies are suspended if the need
arises. The borrowing documents required the hiring of a
consultant as a result of prior covenant violations.
Interest Rate Derivatives
SIUH entered into a $20 million notional amount fixed-to-floating
rate swap, exposing the system to the potential risk of rising
interest rates. Given SIUH's tenuous financial position, any
future covenant violations could result in the posting of cash
collateral or the termination of the swap contract, causing the
hospital to pay a higher fixed rate of interest.
Strengths
* Leading market share on Staten Island of approximately 50%,
compared to less than 40% for the only other competitor
* Clinical breadth that includes open heart surgery, burn,
stereotactic radio-surgery and high end rehabilitation
* Operating cash flow in 2004 that is 55% higher than in 2000,
which formed the basis of our initial credit rating in
November 2001
Challenges
* Low liquidity (32 days cash on hand) and minimal debt service
coverage (1.0 times)
* Total dollar settlement with the AG of $76 million over 12
years, which we believe will stress financial position
* Final settlement with the OIG and USAO was postponed,
suggesting differences among the parties that could lead to
less favorable settlement terms, including a significant up-
front cash payment
* 2004 operating cash flow 20% below budget, capital spending
cut back materially to only 37% of depreciation; first
quarter 2005 cash flow down 17% due to volume softness
* Another five governmental investigations, unrelated to the
above mentioned issues, in process with uncertain outcomes
Recent Developments
On May 17, 2005, the New York State Attorney General announced a
settlement with SIUH in the amount of $76.5 million payable over
12 years, an amount that we believe will place considerable stress
on the hospital's financial position. The settlement requires a
payment of $20 million in 2005, of which $9 million is already
being held by the State. The remaining $11 million will be "paid"
through Medicaid withholding during 2005, which we believe will
greatly strain the hospital's cash flow and liquidity.
Moody's does note that SIUH will benefit in 2005 from a favorable
one-time Medicaid rate adjustment of $12 million, largely
offsetting the settlement amounts payable in 2005. Under the
covenants of one of its bond insurance agreements, SIUH needs to
maintain 30 days cash on hand at the end of the calendar year; as
of March 31, 2005, cash on hand was 32 days. The remaining 11
annual payments will average approximately $5 million each, also
stressing SIUH's cash flow.
SIUH had hoped to reach a "global" settlement concurrently with
both the AG and the federal OIG and USAO. We have been informed
by management that they do not expect a settlement with the
federal authorities to occur before 2006, with terms of amount,
duration and up-front payment unknown. We do not believe this
delay bodes well, suggesting that the authorities are demanding
more than SIUH can financially provide, though the hospital
reports that the AG was further along in its investigation than
the OIG. While the State had publicly stated that it did not want
any settlement to jeopardize the hospital's viability, the OIG has
not been so forthcoming. Nevertheless, we believe it benefits the
federal authorities to maintain SIUH as a going concern in order
to maximize its own settlement recovery.
In addition to the two prominent settlements mentioned above,
there are another five investigations being conducted by the OIG
and USAO which appear to be unrelated. These five include:
* allegations of using unlicensed beds for detoxification
services;
* over-billing by physicians;
* maintenance of administration and billing in radio-surgery
and emergency departments; and
* recordkeeping related to dialysis patients.
The full nature and scope of these investigations are not known at
this time.
Operations have softened over the past 15 months and we believe
SIUH's future cash flow generation provides very little cushion to
cover all of its cash needs. Despite double-digit growth in 2004
revenues, operating cash flow of $36 million was 19% below budget,
due largely to expense increases. In the first quarter 2005,
revenue growth has slowed to 3% and cash flow is 17% below the
prior year quarter. The hospital hired the work-out consultants,
Cambio, which has assisted in reducing costs, including the lay-
off of 130 FTEs in May 2005. Management cannot confirm if recent
volume and financial softness is related to fall-out surrounding
the investigations or just normal market demand and competition
but we suspect the investigation has had a negative impact.
Moody's believes SIUH faces a very difficult five-year period,
given cash requirements dictated by the AG settlement, forecasts
for an ultimate OIG settlement and normal operating and capital
needs. During this timeframe, we expect capital spending will be
held to a bare minimum, possibly jeopardizing physician relations,
which to date appear to have been maintained.
Outlook
The negative outlook is based on the uncertainty that SIUH will be
able to generate sufficient cash flow over the next few years to
service all of its cash requirements, including a future
settlement with the OIG and USAO related to Medicare residency
over-payment during the period 1996-2003.
What Could Change the Rating--UP
If SIUH is able to materially improve its operations (budgeting a
24% increase in 2005 operating cash flow, which we believe is
optimistic), such that it is able to more comfortably service its
cash needs. A "low" monetary settlement with the OIG or
meaningful support from SIUH's parent, North Shore-Long Island
Jewish Health System, would help though NSLIJ has demonstrated no
support to date.
What Could Change the Rating--DOWN
A larger than expected monetary settlement with the OIG, no
improvement in operations or a materially adverse outcome from any
of the other five ongoing federal investigations.
Key Indicators (Audit year ended December 31, 2004; 1999 and 2005
AG settlements and an estimated OIG settlement have been converted
to debt equivalents, adding $115 million of "debt")
-- Inpatient admissions: 41,576
-- Total operating revenues: $585 million
-- Net revenue available for debt service: $38.9 million
-- Total debt outstanding: $257 million (includes $115 million
of settlements converted to debt equivalents)
-- Maximum Annual Debt Service (MADS): $37.4 million
-- MADS Coverage based on reported investment income: 1.05
times
-- MADS Coverage based on investment income normalized
at 6%: 1.04 times
-- Debt-to-cash flow: 12.0 times
-- Days cash on hand: 31.3 days
--Cash-to-debt: 18.9%
-- Operating cash flow margin: 6.1%
Rated Debt:
-- Series 1998 bonds: $62.9 million outstanding; issued through
the Dormitory Authority of the State of New York; rated Aaa
based on Ambac insurance, B2 underlying rating
-- Series 2001A and B bonds: $31.7 million outstanding; issued
through the New York City Industrial Development Agency;
rated B2
-- Series 2002C bonds: $16.8 million outstanding; issued
through the New York City Industrial Development Agency;
rated B2
TEXAS BOOT: McRae Industries Closes $2.16 Mil. Asset Acquisition
----------------------------------------------------------------
McRae Industries, Inc. (Amex: MRIA; MRIB) reported the closing of
its acquisition of certain assets from Texas Boot, Inc. In May
2005, McRae Industries negotiated the terms of an asset purchase
agreement providing for the purchase by the Company of certain
assets from Texas Boot including its trademarks (including the
marks Laredo, J. Chisolm, Code West and Performair), its
outstanding accounts receivable and certain inventory.
Texas Boot is and has been operating as a debtor-in- possession in
a case under Chapter 11 of the United States Bankruptcy Code. In
accordance with applicable bankruptcy court procedures, an auction
for the assets was conducted on June 23, 2005. McRae won the
auction by agreeing to increase the total purchase price payable
under the Purchase Agreement to approximately $2.16 million. Of
the total price, $1,525,000 is allocable to the acquired
trademarks, $519,807 is allocable to the acquired accounts
receivable and $115,500 is allocable to the acquired inventory.
On June 24, 2005, the United States Bankruptcy Court for the
Middle District of Tennessee approved the Purchase Agreement as
modified by the increased purchase price and the Purchase
Agreement became effective. The transaction closed on June 28,
2005.
The purchased assets will be used by McRae's wholly owned
subsidiary, Dan Post Boot Company, which markets and distributes
primarily western footwear for men, women and children under the
Dan Post, Dingo and American West brand names. The Laredo brand
has a strong heritage as a dominant brand in the western boot
market. McRae's boot products are sold nationwide to major
discount stores, regional specialty chain stores, major western
stores and direct mail catalogs.
Headquartered in Nashville, Tennessee, Texas Boot, Inc., was a
boot manufacturer and retailer. The Company filed for chapter 11
protection on Apr. 20, 2005 (Bankr. M.D. Tenn. Case No. 05-04873).
James R. Kelley, Esq., at Neal & Harwell represents the Debtor.
When the Debtor filed for protection from its creditors, it
estimated between $1 million to $10 million in total assets and
debts.
TEXAS INDUSTRIES: Prices $250 Million of 7-1/4% Senior Notes
------------------------------------------------------------
Texas Industries, Inc. (NYSE: TXI) disclosed the pricing of its
previously announced offering of $250 million of the Company's
7-1/4% senior notes due 2013.
TXI intends to use the net proceeds from the Notes offering,
together with a cash dividend from its wholly-owned steel
operations and existing cash to repurchase $600 million in
existing senior notes due 2011.
The Notes have not been registered under the Securities Act of
1933 or any state securities laws, and may not be offered or sold
in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act
and state securities laws.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy such Notes in any jurisdiction in
which such an offer or sale would be unlawful.
Texas Industries, Inc., is the largest producer of cement in Texas
and a major cement producer in California. TXI is also a major
supplier of construction aggregates, ready-mix concrete and
concrete products.
* * *
As reported in the Troubled Company Reporter on June 20, 2005,
Moody's Investors Service has assigned a Ba3 rating to Texas
Industries, Inc.'s $250 million in senior unsecured notes and a
Ba2 rating to the company's new 5-year senior secured credit
facility. In addition, Moody's has upgraded the company's senior
implied rating to Ba3 from B1 and its $200 million subordinated
convertible trust preferred securities to B2 from B3. The ratings
outlook has been changed to stable from developing following the
company's announcement earlier this year that it intends to spin
off its steel business, Chaparral Steel Company (B1 senior
unsecured rating).
Ratings affected include:
Texas Industries, Inc.:
Assigned:
* Ba2 -- $200 million 5-year senior secured credit facility
due 2010
* Ba3 -- $250 million senior unsecured notes due 2013
Upgraded:
* Ba3 from B1 -- senior implied
* B1 from B2 -- senior unsecured issuer rating
TXI Capital Trust I:
Upgraded:
* B2 from B3 -- $200 subordinated convertible trust preferred
securities.
UNIONE ITALIANA: U.K. Scheme Creditors Must File Claims by Oct. 7
-----------------------------------------------------------------
On March 7, 2005, the High Court of Justice of England and Wales
sanctioned a Scheme of Arrangement under Section 425 of the
Companies Act 1985 of England and Wales among Unione Italiana (UK)
Reinsurance Company Limited, and Cavell Insurance Company Limited
and their creditors. The Scheme became effective on June 9, 2005.
The Scheme set Oct. 7, 2005, at 12:00 noon (London Time) as the
deadline for all creditors owed money against Unione Italiana
Cavell Insurance to file proofs of claim.
Creditors must file written proofs of claim on before the Oct.7
Final Claims Submission Bar Date and those forms must be sent to:
Unione Italiana (UK) Reinsurance Company Limited
P.O Box 62
Rose Lane Business Centre
Rose Lane, Norwich, Norfolk, NR1 1JY
United Kingdom
Blank Claims Forms may be obtained by writing to:
James Kay
Cavell Management Services Limited
P.O Box 62
Rose Lane Business Centre
Rose Lane, Norwich, Norfolk, NR1 1JY
United Kingdom
Fax: +44 (0)1603 599441
E-mail: unione.scheme@cavell.co.uk
Blank Claim Forms may also be downloaded and printed from
http://www.cavell.biz/schemes/
Unione Italiana (UK) Reinsurance Company Limited, and Cavell
Insurance Company Limited are headquartered Norfolk, England.
Unione Italiana traded as a motor insurer and Cavell traded as a
marine and aviation insurer. The Companies have been in run-off
since 1995 & 1993, respectively. The Board of Directors of Unione
Italiana (UK) Reinsurance Company Limited and Cavell Insurance
Company Limited filed Section 304 petitions on December 21, 2004
(Bankr. S.D.N.Y. Case Nos. 04-17989 & 04-17990). Howard Seife,
Esq., and Francisco Vazquez, Esq., at Chadbourne & Parke LLP
represent the Debtors. When the Debtors filed for protection from
their creditor, Unione Italiana listed GBP125,588,000 in total
assets and GBP102,688,000 in total debts while Cavell Insurance
listed GBP143,691,000 in total assets and GBP84,496,000 in total
debts.
US AIRWAYS: Court Approves America West Merger M.O.U.
-----------------------------------------------------
Judge Mitchell of the U.S. Bankruptcy Court for the Southern
District of New York approved the Merger Memorandum of
Understanding between US Airways, Inc., and its debtor-affiliates
and America West Holdings Corporation, the term sheets and the
related transactions. The Debtors are authorized to enter into
the Merger MOU with the GE Entities and perform all obligations
under the Merger MOU and the Global Settlement. The Debtors are
authorized to amend the 2001 Credit Facility as contemplated in
the Merger MOU. The Debtors will perform their obligations
related to the 2001 Credit Facility.
Judge Mitchell finds merit in the modifications to the
Sale/Leaseback Transaction and the Debtors' entry into the
modified and new aircraft lease. The Debtors are authorized to
modify existing leases and contracts and enter into new leases
and contracts, with the GE Entities. The Debtors may pay the
fees and expenses to the GE Entities that are outlined in the
Merger MOU.
As reported in the Troubled Company Reporter on June 24, 2005, the
U.S. Department of Justice that the Department has completed its
review of the proposed merger. The waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976 expired at
midnight on June 23, 2005, without a formal request from the
Department for additional information.
On May 19, 2005, America West and US Airways announced an
agreement to merge and create the first full-service nationwide
airline, with a consumer-friendly pricing structure offering a
network of low-fare service to more than 200 cities across the
U.S., Canada, Mexico, Latin America, the Caribbean and Europe, and
amenities that include a robust frequent flyer program, airport
clubs, assigned seating and First Class cabin service. The
airlines will operate under the US Airways brand.
When completed, the merger will be anchored by $500 million in new
equity investment that has already been announced, as well as
other potential equity and financing sources still under
negotiation, and participation by suppliers and business partners
that will provide the company with more than $1.5 billion in cash
at the time of the transactions closing.
The merger remains subject to other approvals, including America
West shareholders, the Securities and Exchange Commission, and the
U.S. Department of Transportation and the Air Transportation
Stabilization Board.
About America West
America West Holdings Corporation is an aviation and travel
services company. Wholly owned subsidiary America West Airlines,
Inc. is the nation's second largest low-fare airline and the only
carrier formed since deregulation to achieve major airline status.
America West's 14,000 employees serve nearly 60,000 customers a
day in 96 destinations in the U.S., Canada, Mexico and Costa Rica.
(AWAG)
About US Airways
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue
No. 96; Bankruptcy Creditors' Service, Inc., 215/945-7000)
US AIRWAYS: Files Plan of Reorganization in E.D. Virginia
---------------------------------------------------------
US Airways Inc. filed with the U.S. Bankruptcy Court for the
Eastern District of Virginia its disclosure statement and Plan of
Reorganization, which are based on its proposed merger with
America West Group Holdings (NYSE: AWA) announced on May 19, 2005.
Yesterday's submission was made within the time period in which
the company has the exclusive right to file a Plan. The timing
also is consistent with the company's agreement with General
Electric Commercial Aviation Services.
In addition to yesterday's filing, US Airways and America West
have achieved a number of other important milestones over the past
week. The U.S. Department of Justice has completed its antitrust
review and cleared the proposed merger. In addition, the
companies have filed registration statements on forms S-4 and S-1
documents with the Securities and Exchange Commission that are
necessary steps in the process of completing the merger.
The bankruptcy court has set a hearing on approval of the
disclosure statement for Aug. 9, 2005.
The airlines remain on track to complete all regulatory and court
requirements and to close on the merger transaction by late
September or early October.
The disclosure statement and Plan are based on the previously
disclosed terms. Under the proposed Plan, creditors having claims
of $50,000 or less will receive a cash payment of 10 percent of
the amount of their claim. Other creditors holding unsecured
claims will receive stock in the reorganized company. The value
of their recoveries will depend on the value of the shares of
stock at emergence, as well as the total amount of allowed claims,
including the amounts of disputed claims that have not yet been
determined.
US Airways and America West will merge to create the first full-
service low-cost nationwide airline, with a consumer-friendly
pricing structure offering a network of low-fare service to over
200 cities across the U.S., Canada, Mexico, Latin America, the
Caribbean and Europe, and amenities that include a robust frequent
flyer program, airport clubs, assigned seating and First Class
cabin service. The airlines will operate under the US Airways
brand and will be headquartered in Tempe, Ariz.
When completed, the merger will be anchored by $500 million in new
equity investment that has already been announced, as well as
other potential equity and financing sources still under
negotiation, and participation by suppliers and business partners
that will provide the company with more than $1.5 billion in cash
at the time of the transaction's closing.
Separately, the period for other potential investors and
interested parties to offer competing bids and alternatives for
the merger proposal concludes at 5 p.m., Eastern time on Friday,
July 1, with a hearing set for Thursday, July 7.
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
US DATAWORKS: Negative Cash Flow Triggers Going Concern Doubt
-------------------------------------------------------------
Ham, Langston & Brezina, LLP, expressed substantial doubt about US
Dataworks Inc.'s ability to continue as a going concern after it
audited the Company's financial statements for the year ended
Mar. 31, 2005. The auditing firm points to the Company's losses
and negative cash flow from operations.
Revenues for the fiscal 2005 fourth quarter were $656,000 compared
with revenues of $1,580,000 for the same period a year ago. Last
year, the company closed a significant license upgrade transaction
in the fourth quarter that resulted in approximately $900,000 of
revenue and did not record a similar large licensing transaction
in the current year. Operating loss for the quarter was
$1,444,000 compared to an operating loss of $123,000 for the
quarter ended March 31, 2004. Net loss for the fourth quarter was
$1,447,000, or $0.05 per share, compared to a net loss of $344,000
or $0.01 per share, for the corresponding period in the prior
year.
Revenues for the fiscal year 2005 were $2,687,000 compared with
revenues of $3,442,000 for the fiscal year 2004. Operating loss
for fiscal 2005 was $4,955,000 compared to an operating loss of
$1,985,000 for fiscal 2004. Net loss for fiscal 2005 was
$6,459,000, or $0.24 per share, compared to a net loss of
$7,088,000 or $0.38 per share, for the corresponding period in the
prior year.
"Fiscal 2005 was a year of transition and new product
introductions," stated Charles E. Ramey, CEO of US Dataworks. "As
we moved our financial model from licensing to a 'transactional'
model, our recurring 'click' revenues from customers that pay by
the transaction grew year over year by 359%. We have
approximately one billion transactions under management available
and processed approximately 540 million actual transactions
between March 31, 2004 and March 31, 2005. We remain confident
about our growth opportunities over the next several years as the
electronification(SM) of payment processing increases.
"Additionally, we are pleased to be currently negotiating several
large contracts and contemplate having at least one contract
signed during the second quarter. Combined with other contracts
we have recently announced, our Clearingworks(TM) product suite is
being embraced, embedded and standardized into the fabric of some
of the world's name brand financial institutions."
In June 2005, US Dataworks raised $1,300,000 prior to expenses of
offering in two private placements wherein was sold:
(1) a convertible debenture in the principal amount of
$770,000, with an original issue discount of $70,000 and
warrants to purchase 879,080 shares of common stock; and
(2) $600,000 of common stock and warrants to purchase an
aggregate of 629,328 shares of common stock.
Ramey added, "As a result of our recent capital raising
transactions, our increased level of transactional revenues
achieved in fiscal 2005, and the increased revenue potential of
contemplated contracts, we believe we currently have adequate
capital resources to fund our anticipated cash needs through the
remainder of the year."
US Dataworks is a developer of payment processing solutions,
focused on the Financial Services market, Federal, State and local
governments, billers and retailers. Software developed by US
Dataworks is designed to enable organizations to transition from
traditional paper-based payment and billing processes to
electronic solutions that automate end-to-end processes for
accepting and clearing checks.
USG CORPORATION: Board Elects Steve Leer as Director
----------------------------------------------------
USG Corporation's (NYSE:USG) Board of Directors elected Steven F.
Leer, as president and chief executive officer of Arch Coal, Inc.,
St. Louis, Missouri, effective July 1, 2005.
Mr. Leer has served as president and CEO of Arch Coal since its
formation in July 1997. Previously, Leer served as president and
CEO of Arch Mineral Corporation, one of Arch Coal's predecessor
companies. Mr. Leer has also held senior management positions
with The Valvoline Company and Ashland Inc.
"We are fortunate to have someone of the caliber of Steven Leer
join our organization," said William C. Foote, chairman, president
and CEO of USG Corporation. "He brings with him a wealth of
knowledge and experience in manufacturing and energy, as well as
broad-based management expertise."
Mr. Leer will initially serve on USG's Finance and Governance
Committees. Like all of the other members of the USG Board of
Directors besides Mr. Foote, Mr. Leer has also been determined to
be independent, as defined by USG and NYSE standards.
A native of Vermillion, South Dakota, Mr. Leer also serves on the
boards of Norfolk Southern Corporation, the Western Business
Roundtable and the Mineral Information Institute. He is a member
of The Business Roundtable and the National Association of
Manufacturers. He is also past chairman and continues to serve on
the Boards of the Center for Energy and Economic Development, the
National Coal Council and the National Mining Association.
Mr. Leer holds a degree in electrical engineering from the
University of the Pacific, and an MBA from Washington University's
Olin School of Business. He also received an honorary doctorate
from the University of the Pacific. In addition, he is a delegate
to the Coal Industry Advisory Board of the International Energy
Agency in Paris, and District Chairman of the New Horizons
District, Greater St. Louis Area Council of the Boy Scouts of
America.
In related news, USG also announced that, following its May annual
stockholder meeting, it has made changes in the Chair positions of
all of its Board Committees.
Five individuals have been appointed to chair USG's Board
Committees:
-- Robert L. Barnett, Audit;
-- Valerie B. Jarrett, Compensation and Organization;
-- Lawrence M. Crutcher, Governance;
-- Judith A. Spreiser, Finance; and
-- W. Douglas Ford, Corporate Affairs.
All of the newly named Chairs have served on their respective
Committees for a number of years. The Chair positions are
approved annually by the full Board of Directors.
Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/ -- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes. The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094). David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones Day represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.
VENTAS INC: Selling 3.2 Million Common Shares to Merrill Lynch
--------------------------------------------------------------
Ventas, Inc. (NYSE: VTR) agreed to sell 3,247,000 shares of its
common stock to Merrill Lynch & Co., as sole underwriter in an
underwritten public offering. Ventas expects to receive net
proceeds of approximately $97 million from the sale. The Company
expects to use the net proceeds to repay indebtedness under its
revolving credit facility and for general corporate purposes,
including to fund acquisitions. Closing of the transaction is
subject to customary closing conditions.
The common shares are being offered under the Company's existing
shelf registration statement, which has been declared effective by
the Securities and Exchange Commission. A prospectus supplement
describing the terms of the offering will be filed with the
Securities and Exchange Commission. When available, copies of the
prospectus supplement and the accompanying prospectus may be
obtained from the offices of Merrill Lynch & Co., 4 World
Financial Center, 250 Vesey Street, Ground Floor, New York, New
York 10080.
Ventas, Inc., is a leading healthcare real estate investment trust
that owns and invests in healthcare and senior housing assets in
41 states. Its properties include hospitals, skilled nursing
facilities and assisted and independent living facilities.
* * *
As reported in the Troubled Company Reporter on Apr. 15, 2005,
Moody's Investors Service affirmed the ratings of Ventas, Inc.,
and its affiliates following the announcement that Ventas and
Provident Senior Living Trust have decided to merge. The
transaction, valued at $1.2 billion, will be funded by Ventas
common stock, the assumption of debt and cash. Provident is an
unlisted senior living REIT that owns 68 independent and assisted
living facilities in 19 states.
These ratings were affirmed, with a positive outlook:
Ventas Realty Limited Partnership:
* Senior debt at Ba3
* senior debt shelf at (P)Ba3
* subordinated debt shelf at (P)B2
Ventas, Inc.:
* Preferred stock shelf at (P)B2
Ventas Capital Corporation:
* senior debt shelf at (P)Ba3
* subordinated debt shelf at (P)B2
Ventas, Inc. [NYSE: VTR] is a health care real estate investment
trust that owns:
* forty long-term acute care hospitals,
* 201 nursing facility,
* thirty assisted and independent living facilities,
* eight medical office buildings, and
* eight other health care assets, in 39 states.
WATSON'S QUALITY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Watson's Quality Food Products, Inc.
641 Black Horse Pike
Turnersville, New Jersey 08012
Bankruptcy Case No.: 05-31296
Debtor-affiliate filing separate chapter 11 petition:
Entity Case No.
------ --------
Irval Realty, Inc. 05-31297
Type of Business: Watson's Quality Food Products, Inc.,
is a wholesale distributor of chicken,
turkey, beef, and pork products.
See http://www.watsonsquality.com/
Chapter 11 Petition Date: June 29, 2005
Court: District of New Jersey (Camden)
Judge: Judith H. Wizmur
Debtors' Counsel: Stephen M. Packman, Esq.
Archer & Greiner, P.C.
One Centennial Square
Haddonfield, New Jersey 08033
Tel: (856) 795-2121
Estimated Assets Estimated Debts
---------------- ---------------
Watson's Quality Food $1 Million to $1 Million to
Products, Inc. $10 Million $10 Million
Irval Realty, Inc. $1 Million to $1 Million to
$10 Million $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Robinson & Harrison Poultry Trade Debt $2,144,867
Company
3021 Merritt Mill Road
Salisbury, MD 21804
American Eagle Poultry Trade Debt $285,340
3301 South Galloway Street
Suite 266
Philadelphia, PA 19148
River Port Co., Inc. Trade Debt $187,121
4100 Mountainview Avenue
Chattanooga, TN 37415
UFCW Local 56 Health & Welfare Union $186,959
7730 Maple Avenue
Pennsauken, NJ 08109
D&A Foods Trade Debt $108,579
8 Bryn Mawr Court
Sicklerville, NJ 08081
Morgan Associates Trade Debt $76,093
Liberty Mutual Trade Debt $68,630
Royal Harvest Foods Trade Debt $66,300
Ronell Industries Trade Debt $60,701
ABC Enterprises Trade Debt $58,667
H&M Bay, Inc. Trade Debt $56,745
Crum & Forster Trade Debt $45,338
Aunt Kitty's Trade Debt $44,912
Air Liquide America Corp. Trade Debt $43,379
The Hartford Insurance $39,592
Mullen Marketing Trade Debt $36,200
WTMUA Utilities $35,686
Continental Seasoning Trade Debt $33,894
Connectiv Power Delivery Utilities $28,000
Scanlon & Associates Trade Debt $26,836
WESTPOINT STEVENS: Catawba County Balks at Longview Property Sale
-----------------------------------------------------------------
To recall, WestPoint Stevens, Inc. and its debtor-affiliates asked
the U.S. Bankruptcy Court for the Southern District of New York to
approve the sale of the Longview Property to the Purchaser in
accordance with the terms of the Sale Agreement.
The Debtors have determined that the $2,850,000 consideration is
reasonable, represents fair market value, and is equal to or
greater than what would otherwise be obtained through a public
sale or auction of the Property.
The Debtors believe that a public auction is unnecessary and would
only entail delay and attendant expense with no corresponding
benefit to their estates.
For the past 16 years, WestPoint Stevens, Inc. and its debtor-
affiliates have owned and operated a plant to manufacture bedding
accessories at a 260,060 square-foot single story facility located
at 2839 Second Avenue NW in Longview, North Carolina.
John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New
York, tells Judge Drain that the Debtors ceased their operations
at the Longview Property in December 2004. To avoid the accrual
of any further costs associated with the continued maintenance of
the property, the Debtors decided to proceed with a sale. In this
regard, the Debtors retained Corporate Properties LLC as their
exclusive real estate broker to market the Longview Property to
prospective purchasers.
Catawba County Objects
Scott Markowitz, Esq., at Todtman, Nachamie, Spizz & Johns, P.C.,
in New York, tells the Court that the facility in Longview, North
Carolina, that the Debtors want to sell is part of Catawba
County. According to Mr. Markowitz, Catawba imposes a real
property deed transfer tax of $2 per $1,000. To the extent the
Debtors seek to obtain an exemption from the tax, Catawba objects.
Catawba believes that the relatively modest sale is not integral
to the anticipated confirmation of a Chapter 11 plan for the
Debtors. Thus, the sale should not qualify for tax exemption
under Section 1146(c) of the Bankruptcy Code. Section 1146(c)
provides that:
The issuance, transfer, or exchange of a security, or the
making or delivery of an instrument of transfer under a plan
confirmed under section 1129 of this title, may not be taxed
under any law imposing a stamp tax or similar tax.
Accordingly, Catawba ask the Court to deny the Debtors' request.
At a minimum, the Court should require that taxes in the modest
sum of $5,600 be escrowed pending the resolution of the dispute.
Headquartered in West Point, Georgia, WestPoint Stevens, Inc.,
-- http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 49; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
WICKES INC: Administrative Claims Must Be Filed by Aug. 31
----------------------------------------------------------
U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, set on Aug. 31, 2005, as the deadline for all
creditors owed money on account of administrative claims specified
in Sections 503(b), 365 and 1114(e)(2) of the U.S. Bankruptcy Code
arising between Jan. 20, 2004, and June 29, 2005, against Wickes
Inc. to file proofs of claim.
Administrative claimants must file written proofs of claim on or
before the Aug. 31 Administrative Claims Special Bar Date and
those forms must be sent either by first class mail, overnight
delivery or personal service to:
Clerk of Court
U.S. Bankruptcy Court
Northern District of Illinois
Eastern Division
219 South Dearborn Street
Chicago, IL 60604
Three types of claims are not subject to the Administrative Claims
Special Bar Date because these claims are still accruing; have
been previously approved by the Court; or are already reconciled
by the Debtor:
(a) compensation or reimbursement awarded or awardable under
Section 330(a), 331 and 503(b) of the U.S. Bankruptcy Code
to professionals retained under a Final Order of the
Bankruptcy Court by the Debtor or the Official Committee of
Unsecured Creditors;
(b) expenses reimbursed or reimbursable to members of the
Creditors Committee; and
(c) any administrative claims that have been previously allowed
by a Final Order of the Bankruptcy Court.
Headquartered in Vernon Hills, Illinois, Wickes Inc.
-- http://www.wickes.com/-- is a retailer and manufacturer of
building materials, catering to residential and commercial
building professionals, repairs and remodeling contractors and
project do-it-yourself consumers Wickes, Inc., and GLC Division,
Inc., filed for chapter 11 protection on January 20, 2004 (Bankr.
N.D. Ill. Case No. 04-02221). The Court dismissed GLC's case on
Feb. 17, 2005. Richard M. Bendix Jr., Esq., at Schwartz Cooper
Greenberger & Krauss represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, it listed $155,453,000 in total assets and $168,199,000
in total debts.
WINN-DIXIE: Heritage Wants Debtors to Decide on Purchase Contract
-----------------------------------------------------------------
On June 3, 2004, Winn-Dixie Stores, Inc., and its debtor-
affiliates executed a contract for the purchase of goods from
Heritage Mint, Ltd. Heritage began shipping goods on
February 15, 2005.
The Contract contains recoupment and reconciliation provisions
that allow Heritage to credit the Debtors' account upon their
return of goods in "original factory seals unopened master
cartons."
As of February 21, 2005, Heritage had delivered a total of
$227,215 in goods to the Debtors pursuant to the Contract. The
Debtors have not paid for the prepetition deliveries.
The next day, Heritage delivered to the Debtors a demand for
reclamation of its merchandise, asserting rights to the return of
goods valued at $285,825. The Debtors subsequently paid for the
goods delivered on February 22, 2005, thus reducing the
reclamation claim to the cost of prepetition deliveries.
Suzanne K. Weathermon, Esq., at Lang & Baker, PLC, in Scottsdale,
Arizona, discloses that the Debtors have paid all invoices for
postpetition deliveries. However, the Debtors told Heritage that
they intend to return goods far in excess of the reclamation
claim.
Heritage asks the Court to compel the Debtors to assume or reject
the Contract.
Heritage believes that the nature of its interests with respect
to the deliveries, the returns and the Contract make immediate
assumption or rejection necessary. If the Contract is rejected,
the Debtors' estate and postpetition lenders may have claims to
the goods to the extent of the valued of the postpetition
deliveries, and thus, Heritage cannot receive the returns without
Court approval. If the Contract is assumed, Heritage is
obligated to accept the returns and enforce its recoupment
rights.
Whether the Contract is assumed or rejected, requiring the
Debtors to file a motion to assume or reject will provide notice
to other parties potentially interested in the postpetition
deliveries to assert their claims before the returns are
delivered to Heritage, Ms. Weathermon notes.
Until the Contract is assumed or rejected, Heritage is bound by
competing duties to the estate, the Court, and the Debtors with
respect to the returns.
Heritage maintains that it will suffer damages beyond the
compensation available under the Bankruptcy Code to the extent
that the Debtors create avoidable transfers by returning goods
and forcing Heritage to "repay" them for the merchandise they
never paid for in the first place.
Furthermore, Ms. Weathermon contends that allowing the Debtors to
wait until a plan confirmation to assume or reject the Contract,
when the Debtors have already determined what they intend to do
with the goods, is not likely to better permit successful
rehabilitation.
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. 16; Bankruptcy Creditors'
Service, Inc., 215/945-7000).
WINN-DIXIE: Wants to Implement Employee Retention Programs
----------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Middle District of Florida
to implement two employee programs:
(1) An expanded key employee retention plan tailored to the
Debtors' retention needs during the course of their
Chapter 11 cases, which will replace their existing
retention plan and provide for periodic retention payments
to certain key employees; and
(b) A severance program covering all employees, which will
formalize the Debtors' severance practices under a
comprehensive program while eliminating any enhanced
severance benefits upon a change in control or other
severance entitlements pursuant to any preexisting
arrangement.
Chapter 11 Retention Plan
Under the Chapter 11 Retention Plan, 290 of the Debtors' key
employees, excluding the chief executive officer, will receive
non-discretionary retention incentive payments ranging from 25%
to 150% of their annual salaries in consideration for remaining
in the Debtors' employ during the pendency of, and through
confirmation of a plan of reorganization.
Participants of the Chapter 11 Retention Plan will be paid
Retention Incentives according to this schedule of payments:
(a) one-third of the total Retention Incentive will be paid on
or as soon as is practicable following the date on which
the Chapter 11 Retention Plan is approved by the Court;
(b) one-third of the Retention Incentive will be paid on
October 15, 2005; and
(c) one-third of the Retention Incentive will be paid on the
date on which a plan of reorganization is confirmed in the
Debtors' Chapter 11 cases.
Participants who have terminated their employment voluntarily or
who are terminated by the Debtors for cause will forfeit their
right to any unpaid Retention Incentives and will not receive any
Retention Payment following the termination. However,
participants whose employment is terminated by reason of a
qualified reduction in the Debtors' workforce, retirement,
disability, or death will be entitled to receive a pro-rata
retention based on:
-- the number of days worked from April 15, 2005, through
October 15, 2005, for participants whose employment is
terminated prior to October 16, 2005; or
-- the number of days worked from October 16, 2005, through
the date on which a plan of reorganization is confirmed in
the Debtors' Chapter 11 cases.
In addition, each new employee hired by the Debtors will, at the
discretion of the Debtors' CEO, be eligible to receive a
Retention Incentive commensurate with those of his or her peers
or equal to the amount forfeited by the person he or she
replaced.
Total payments made under the Chapter 11 Retention Plan will not
exceed $13,977,093.
Corporate Benefits Severance Program
The Corporate Benefits Severance Program formalizes the Debtors'
prior lay-off severance practice and provides for severance
benefits for each of the Debtors' executives and employees during
their Chapter 11 cases. The Corporate Benefit Severance Program
will remain in place through the second anniversary of the
Debtors' emergence from Chapter 11.
Under the Corporate Benefits Severance Program, an executive or
employee who has been employed by the Debtors for a minimum of 60
days and is terminated without cause by the Debtors will entitled
to receive a Severance Benefit in accordance with these levels:
Estimated No.
Tier Title of Employees Severance Benefit
---- ----- ------------ -----------------
1 CEO 1 3 x (base salary + target bonus)
2 Senior VP 8 2 x (base salary + target bonus)
3 VP 25 1 x (base salary + target bonus)
4 Senior
Director 15 6 month's salary
5 Director/
Manager 53 1 week's salary per year of
service (max of 26 weeks)
6 Plant
Manager 7 20 weeks salary
7 Other 4,591 1 week's salary per year of
Full Time service (max of 12 weeks)
Employees
(Exempt)
8 Other 1 $100 for part time employees with
Part Time less than one year of service and
Employees $200 for part time employees with
(Exempt) one year of service or longer
9 Other 28,000 1 week's salary per year of
Full Time service (max of 6 weeks)
Employees
(Non-Exempt)
10 Other 45,022 $100 for part time employees with
Part Time less than one year of service and
Employees $200 for part time employees with
(Non-Exempt) one year of service or longer.
11 PT Pharmacist 277 $1,000 flat amount
Executives and employees who voluntarily terminate their
employment with the Debtors, whose employment is terminated by
the Debtors for cause, or whose employment is terminated prior to
the 60-day minimum employment period will not be entitled to
receive Severance Benefits.
Payment of Severance Benefits under the Corporate Benefits
Severance Program will take the form of:
(a) a lump sum cash payment for those employees listed in
tiers 1 through 6; and
(b) salary continuation for those employees listed in tiers 7
through 11,
and are in lieu of any other severance benefits to which the
participant might otherwise be entitled. To be eligible to
receive any of the Severance Benefits, participants in the
Corporate Benefits Severance Program are required to enter into a
non-solicitation, non-compete, non-disclosure, and non-
disparagement agreement with the Debtors and, to the extent
applicable, a waiver of any enhanced change control or other
severance benefits.
To take advantage of an exemption from payment of Federal
Insurance Contributions Act, Federal Unemployment Tax Act and
federal income tax on severance payments, the Debtors intend to
pay severance employees listed in tiers 7 through 11 by virtue of
a supplemental unemployment benefits plan. To qualify for the
exemption, the Internal Revenue Service requires that payment of
severance through a SUB Plan must be linked to the employee's
receipt of state unemployment compensation. Therefore, severance
must be paid over time rather than in a lump sum. In addition,
the employee must otherwise remain entitled to receive state
unemployment benefits while he or she is receiving periodic
severance payments from the Debtors.
The ultimate cost of the Corporate Benefits Severance Program
will be a function of the number of executives and employees
whose employment is served. Assuming a worst-case scenario, in
which all stores are closed and all executives and employees are
terminated, the estimated maximum cost of the Corporate Severance
Benefits will be $119,624,612, consisting of:
-- $89,305,617 in payments of about 71,000 retail employees;
-- $11,111,927 in payments to about 4,000 logistics
employees;
-- $917,774 in payments to about 300 store maintenance
employees;
-- $2,109,663 in payments to about 700 manufacturing
employees; and
-- $16,179,630 in payments to about 2,000 corporate office
employees.
However, the Debtors do not contemplate that this worst-case
scenario will arise.
The Debtors believe that the uncertainties surrounding their
Chapter 11 cases threatens to distract their workforce from the
demands of their businesses and may lead to significant employee
attrition. The Employee programs are designed to counter
workforce anxieties caused by the filing of the Debtors' Chapter
11 cases and to ensure that employees work effectively toward the
Debtors' reorganization.
The Debtors believe that the costs associated with the adoption
of the proposed Employee Programs are more than justified by the
benefits that are expected to be realized by encouraging all
employees to work together to bring the Debtors' Chapter 11 cases
to a successful conclusion and discouraging employee resignation.
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. 16; Bankruptcy Creditors'
Service, Inc., 215/945-7000).
W.R. GRACE: Battle Ensues Over Debtors' Exclusive Periods
---------------------------------------------------------
As reported in the Troubled Company Reporter on June 10, 2005,
W.R. Grace & Co. and its debtor-affiliates asked the U.S.
Bankruptcy Court for the District of Delaware to extend the
periods within which they have the exclusive right to:
(a) file a Chapter 11 plan of reorganization through and
including November 23, 2005; and
(b) solicit acceptances for that plan through and including
January 23, 2006.
"It's Just Delay"
Asbestos PI Committee Laments
The Official Committee of Asbestos Personal Injury Claimants
argues that the Debtors have failed to demonstrate that any cause
exists for the extension of the exclusive periods. Furthermore,
the Debtors have failed to make good faith progress towards a
plan of reorganization. Hence, the PI Committee asserts that
"the Debtors' latest attempt to delay the resolution of their
cases" must be denied.
The PI Committee tells the Court that the Debtors have been given
ample opportunity, in connection with the granting of their
previous requests for extension, to progress towards a consensual
plan. During that time, the Court has been compelled to direct
the Debtors to move the case forward on multiple occasions.
The PI Committee contends that the Debtors were unable to make an
unequivocal representation to the Court as to whether they would
even be seeking a Section 524(g) injunction. This is despite the
fact that they have repeatedly asserted to the Court that their
cases were filed due to "overwhelming asbestos-related lawsuits
against the Company."
Under Section 1121(d) of the Bankruptcy Code, the Debtors alleged
sufficient "cause" to extend the exclusivity period for an
additional six months, bringing the total extension to
approximately four years. The PI Committee contends that in
seeking the extension, the Debtors intend to retain total control
over the plan process, unencumbered by any input from, and
without any regard to, the creditors' interest.
Furthermore, the PI Committee asserts that the Debtors fail to
meet their burden that cause exists for the exclusivity extension
in that they have failed to demonstrate reasonable prospects for
filing a viable plan. For the first three and a half years of
their Chapter 11 cases, there was minimal meaningful effort made
by the Debtors to reorganize with a consensual plan and emerge.
When the Debtors finally filed a plan of reorganization -- after
being ordered to do so by the Court -- they proposed a completely
"unconfirmable" plan.
The PI Committee is certain that the Debtors have failed to
demonstrate that they have progressed toward the confirmation
arena, since the Court gave them the opportunity to do so over
one year ago. Furthermore, the Debtors have made no showing that
they are capable of successfully reorganizing. In light of these
facts, the PI Committee insists that the Court must allow other
creditors the opportunity to present a plan of reorganization so
that the Debtors' bankruptcy cases may be resolved in a timely
manner.
Asbestos PD Committee Says
"The Time Will Just be Squandered"
According to Theodore Tacconelli, Esq., at Ferry, Joseph &
Pearce, P.A., in Wilmington, Delaware, the Debtors remain
fanatically devoted to a Plan that uses every back-door vehicle
to suppress the role of asbestos creditors. Mr. Tacconelli
argues that the Debtors' disdain for finding common ground is
endemic to the proceedings. In addition to their "outrageous"
Plan, the Debtors are also creating much discord in the embryonic
stages of the estimations of asbestos-related property damage and
personal injury claims.
Thus, as the Debtors will undoubtedly squander any additional
opportunity to propose a consensual plan, the Official Committee
of Asbestos Property Damage Claimants asks the Court to deny the
Debtors' request.
Mr. Tacconelli insists that the Debtors should not be allowed to
abuse the Chapter 11 process or the gift of exclusivity. Certain
asbestos-related criminal indictments involving W.R. Grace &
Co.'s present and former executives represent some of the
Debtors' misdeeds that do not warrant a further extension, but
rather, an immediate termination, of their exclusivity.
The PD Committee contends that the Debtors have failed to
demonstrate that cause exists to extend the Exclusive Periods.
In over four years since the Petition Date, the Debtors have
astonishingly made little progress towards exiting their cases.
Some of the few events worth reporting are:
-- the filing of a Chapter 11 plan,
-- the PD and PI estimations,
-- the Sealed Air Adversary Proceeding,
-- compensation to executives,
-- the ZAI Litigation, and
-- the indictments or civil complaints.
Mr. Tacconelli notes that if the Court extends the Debtors'
Exclusive Periods, the PD Claimholders will continue to be
powerless to a plan process specifically engineered to deny any
voice to the PD Claimholders and other asbestos creditors.
"The only possibility of turning the trajectory of the Debtors'
cases away from the Debtors' scorched earth approach to one of
the consensus is to terminate exclusivity, thereby allowing for
the democratization of the plan process," Mr. Tacconelli says.
"Level Playing Field, Please"
Futures Representative Pleads
Future Claimants' Representative, David T. Austern, asserts that
because the Debtors have failed to propose a confirmable plan,
the time has come to create a level-playing field among the
parties-in-interest by denying the Debtors continued exclusivity
and permitting the filing of one or more alternative plans.
In addition, estimation pursuant to the Case Management Order
should be closely followed by confirmation hearings. The Futures
Representative notes that confirmation of a plan should not be
dependent on the Court determining that asbestos claims are below
fixed amount.
Accordingly, the Futures Representative asks that the Debtors'
request be denied.
John C. Phillips, Esq., at Philips, Goldman, & Spence, P.A.,
believes that the Debtors know well the issues separating the
parties, and are merely using exclusivity, their unconfirmable
Plan, and their latest round of motions as leverage in their
negotiations with the asbestos constituencies. Mr. Phillips
asserts that there is no reason to believe that the Debtors,
after four and a half years, will now begin meaningful
discussions as long as no other party has the authority to file a
competing plan.
"Because the Debtors' companies and stock are flourishing in
bankruptcy, they have no real incentive to emerge from Chapter
11," Mr. Phillips says. "Further, the Debtors have not set up
emergence bonuses or other incentives for their management or key
employees to encourage a speedy exit strategy."
Debtors Insist
"Allow Estimation to Proceed"
Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones &
Weintraub, in Wilmington, Delaware, informs the Court that the
central issue in the Debtors' Chapter 11 Cases is the valuation
of claims. Each constituency has its own view as to the value of
its claims.
Consequently, Ms. Jones asserts, any plan -- at least any plan
that does not involve preconfirmation liquidation of all claims
-- requires an estimation.
Ms. Jones justifies that the delay in the Debtors' cases is not
the product of inaction or inability to propose a confirmable
plan. In fact, in the past several months, the Debtors and all
constituencies have been going down a productive path toward
estimation, as directed by the Court at the January 2005
Disclosure Statement healing. Ms. Jones believes that
terminating the exclusivity now may result in five or more
separate plans being filed. This would distract attention away
from estimation, and would cause great expense and delay.
The practical thing to do, Ms. Jones says, is to keep the parties
marching in the direction the Court previously ordered.
Moreover, the Court has already engaged in substantial work that
is likely to move the Debtors' cases along significantly, even
before estimation is completed.
The creditors' arguments that the process is taking too long are
disingenuous, Ms. Jones says.
The Debtors state that allowing estimation to proceed will
resolve the fundamental issues being disputed. For better and
for worse, all parties will know what the Court's view is as to
the value of the various types of asbestos claims against Grace.
With this knowledge, the parties will be in a much better
position to negotiate or otherwise confirm a plan.
Furthermore, the Debtors remind the Court and the objecting
parties that they have stood ready to estimate or liquidate the
asbestos claims since the very early days of their cases. In
addition, the Debtors have attempted to negotiate in good faith
at every turn. Even after filing their Plan, the Debtors have
made every effort to negotiate mutually agreeable case management
procedures and scheduling.
The Debtors have held multiple meetings with various interests
among the asbestos committees during the last several months in
their attempt to bring together the very divergent and diverse
interests among the parties. With regards to the PD Committee's
allegation that the Debtors' management has been profiting at the
creditors' expense, Ms. Jones points out that the creditors fail
to acknowledge that the management has grown that company while
in bankruptcy, including making 22 strategic acquisitions during
the Debtors' cases, resulting in a growth in revenue from
$1.8 billion to $2.3 billion.
Moreover, the Debtors have never conceded that the Plan is
"unconfirmable." The Court, also, has not decided that issue
but, instead, deferred ruling on impairment, estimation and
Section 524(g) issues until after the estimation process is
concluded.
Accordingly, the Debtors maintain that the exclusivity should
ultimately be extended until at least the estimation hearing is
concluded.
Equity Committee Agrees with Debtors
The Official Committee of Equity Security Holders strongly
supports the Debtors' request to extend the Exclusive Periods.
As the Court recognized earlier this year, it is necessary to
determine the aggregate amount of asbestos personal injury and
property damage claims to confirm the Debtors' Plan. Toward that
end, the Debtors have proposed a comprehensive and sound process
to define, estimate and liquidate their asbestos liabilities.
Teresa Currier, Esq., at Klett Rooney Lieber & Schorling, in
Wilmington, Delaware, recounts that the Debtors delivered to the
Court an agreed case management order with the Asbestos Property
Damage Committee, which envisions a trial in early 2006. When
negotiations with the Asbestos Personal Injury Committee failed
to produce a similar CMO, the Debtors filed a CMO and
Questionnaire seeking to establish a discovery and pretrial
procedure leading to a trial in late 2006. That matter is on for
hearing before the Court on August 17, 2005.
Ms. Currier tells the Court that the proper valuation of asbestos
claims is an essential component of any non-consensual plan of
reorganization that might be filed in the Debtors' case. The
Debtors have taken the appropriate and necessary steps to
implement a sensible process for making that valuation. Ms.
Currier asserts that to permit the filing of competing plans
while that process is ongoing would not only serve no useful
purpose, but also would likely divert the parties from any
constructive negotiations toward a consensual plan.
Headquartered in Columbia, Maryland, W.R. Grace & Co. --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally. The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts. (W.R. Grace Bankruptcy
News, Issue No. 88; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
ZIFF DAVIS: Concerns on Earnings Prompt S&P's Negative Outlook
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Ziff
Davis Media Inc. to negative from stable, based on concerns about
the company's earnings prospects amid expectations for a
meaningful decline in second-quarter EBITDA.
At the same time, Standard & Poor's affirmed its existing ratings,
including its 'CCC+' corporate credit rating, on the company. As
of March 31, 2005, the New York, New York-based integrated media
company, which is analyzed on a consolidated basis with its parent
company, Ziff Davis Holdings Inc., had $340 million in
consolidated debt, pro forma for its second-quarter refinancing.
"The rating could be lowered if the company's limited liquidity
begins to erode or if negative earnings trends persist," said
Standard & Poor's credit analyst Steve Wilkinson.
Restoring a stable outlook would require the company to show
meaningful EBITDA and cash flow growth sufficient help it meet the
onset of cash interest payments on the company's compounding notes
in early 2007.
The rating on Ziff Davis reflects:
* its earnings concentration in a few key technology magazine
titles,
* volatile advertising spending in this subsector,
* high debt leverage,
* marginal coverage ratios, and
* limited liquid resources.
In addition, the onset of cash interest payments on the company's
compounding notes in February 2007 will strain the company's
already marginal discretionary cash flow and liquidity, unless the
company's profitability improves significantly over the next two
years.
These risks are not meaningfully offset by Ziff Davis' established
position in the computer and electronic game magazine publishing
industries. Competition in this niche is fierce; Ziff Davis and
two other publishers account for the bulk of technology magazine
industry revenues.
The sudden slowdown in discretionary advertising spending by key
customers is a significant concern because the bulk of Ziff Davis'
revenue comes from advertising sales to computer, technology, and
electronic gaming companies. Revenue growth from the company's
Internet, new publications, events, and ancillary businesses is
expected to continue but will not be sufficient to offset the
declines from the company's core publications in the second
quarter. The outlook beyond the second quarter is unclear, given
limited visibility for the soft technology advertising market, and
because cost-cutting opportunities are scarce following extensive
restructuring actions and the discontinuation of unprofitable
ventures over the past few years.
* Ex-SEC Enforcement Director Stephen Cutler to Join Wilmer Cutler
------------------------------------------------------------------
Wilmer Cutler Pickering Hale and Dorr disclosed that Stephen M.
Cutler, former Director of the Securities and Exchange
Commission's Division of Enforcement, will join the firm as Co-
chair of its Securities Department and will be based in the firm's
Washington, D.C. office. Mr. Cutler, who announced his departure
from the Commission in mid-April, will begin work with the firm in
the fall of 2005.
Mr. Cutler led the agency's enforcement program through some of
the most active years in SEC history. He oversaw the agency's
investigations of numerous financial reporting failures, including
those at Enron, WorldCom, Adelphia, Tyco, and HealthSouth. In
addition to these investigations, he also led the Commission's
actions involving NYSE Specialists, research analyst conflicts,
and mutual fund abuses. Mr. Cutler also instituted and supervised
the SEC's sweeping review of potential conflicts of interest
within financial services organizations.
On his departure from the Commission, SEC Chairman William
Donaldson said, "Steve Cutler has been an outstanding leader of
the Commission's enforcement program. America's investors have
been enormously well-served by Steve's keen intellect, superb
judgment and abiding sense of justice."
Mr. Cutler joined the agency in January 1999 as the Deputy
Director of Division of Enforcement. In July 2001, he became the
Acting Director of Enforcement, and in November 2001 the Director
of the Division of Enforcement. During his tenure, the Commission
obtained judgments in enforcement actions totaling more than
$6 billion in penalties and disgorgement, more than $4.5 billion
of which is being returned to harmed investors, according to the
SEC. Prior to joining the Commission, Mr. Cutler was a partner at
Wilmer, Cutler & Pickering.
"Steve has helped lead the SEC through one of the most active and
demanding times in its history. He is a great leader and a great
lawyer and I look forward to working with him," said William R.
McLucas, co-chair of the firm's Securities Department, who led the
Division of Enforcement from 1990-1998. "He is a superb talent
and will help to take our securities practice beyond that of any
law firm in the nation." The firm's securities department numbers
more than 200 lawyers practicing in Boston, London, New York and
Washington, D.C.
"Steve has a proven ability to anticipate and respond to critical
issues. His leadership qualities are admirable and we are honored
that he has chosen to rejoin our firm," said William F. Lee and
William J. Perlstein, co-managing partners at Wilmer Cutler
Pickering Hale and Dorr. "We are thrilled that Steve will be
available to assist our clients in helping resolve their most
important securities and corporate governance matters." In
addition to co-chairing the firm's Securities Department, Steve
will be a member of the firm's Public Policy and Strategy
Practice, led by former Deputy Attorney General Jamie S. Gorelick
and former White House counsel C. Boyden Gray.
"I am very excited to return to my former law firm and some of the
most talented securities lawyers anywhere in the world," Mr.
Cutler said. "My time with the SEC was extraordinary and I
learned a great deal that I hope to bring with me to Wilmer Cutler
Pickering Hale and Dorr."
Mr. Cutler received his B.A. summa cum laude from Yale University
and his J.D. from Yale Law School, where he was an editor of the
Yale Law Journal.
Wilmer Cutler Pickering Hale and Dorr LLP --
http://www.wilmerhale.com/-- is nationally and internationally
recognized for its premier practices in antitrust and competition;
bankruptcy; civil and criminal trial and appellate litigation
(including white collar defense); communications; corporate
(including public offerings, public company counseling, start-up
companies, venture capital, mergers and acquisitions, and
licensing); defense and national security; financial institutions;
intellectual property counseling and litigation; international
arbitration; life sciences; securities regulation, enforcement and
litigation; tax; and trade. Wilmer Cutler Pickering Hale and Dorr
was formed in May 2004 through the merger of two of the nation's
leading law firms, Hale and Dorr LLP and Wilmer Cutler Pickering
LLP. With a staunch commitment to public service, the firm is
renowned as a national leader in pro bono representation. The firm
has more than 1,000 lawyers and offices in Baltimore, Beijing,
Berlin, Boston, Brussels, London, Munich, New York, Northern
Virginia, Oxford, Palo Alto, Waltham and Washington, D.C.
* Sidley Austin Brown Names 28 New Partners
-------------------------------------------
Sidley Austin Brown & Wood LLP and its affiliated partnerships
have named 28 new partners in five U.S. offices and London,
effective as of July 1, 2005 and bringing to 601 the number of
partners at the firm. One of the world's largest full-service law
firms, Sidley has more than 1,550 lawyers practicing in 14
domestic and international cities.
"These new partners are outstanding lawyers who embody our
collegial culture and client service orientation," said Thomas A.
Cole, chair of the firm's Executive Committee.
"We value their abilities and skills, knowing that they represent
Sidley's future," added Charles W. Douglas, chair of the firm's
Management Committee. "We are pleased to welcome them as
partners."
The new partners are listed below by office and primary area of
practice:
Chicago
-------
Chris E. Abbinante Corporate
Zulfiqar Bokhari Banking & Financial Transactions
Jeffrey E. Crane Insurance and Financial Services
Thomas D. Cunningham Insurance and Financial Services
Robert N. Hochman Litigation
Sherry A. Knutson Product Liability and Mass Tort
Eileen M. Liu Employee Benefits
Andrew P. Massmann Real Estate
Rachel Blum Niewoehner Litigation
Gregory J. Robbins Investment Products and Derivatives
Allison J. Satyr Banking & Financial Transactions
Dallas
------
Li Chen Intellectual Property
* London
--------
David P. Butler International Finance
Jason A. Richardson International Finance
Los Angeles
-----------
Garrett K. Craig Litigation
Samantha B. Good Banking & Financial Transactions
Ivy H. Jones Tax
Melanie S. Murakami Public Finance
Edward C. Prokop Real Estate
New York
--------
Giselle M. Barth Securitization & Structured Finance
Marshall D. Feiring Tax
Geoffrey T. Raicht Corporate Reorganization &
Bankruptcy
Washington, D.C.
----------------
Jay T. Jorgensen Litigation
Eileen L. Kahaner Health Care
George B. Parizek Litigation
Anna L. Spencer Health Care
James C. Stansel Health Care
Marinn F. Carlson International Trade and
Dispute Resolution
* Sidley Austin Brown & Wood, London, is an English general
partnership.
Sidley Austin Brown & Wood LLP is one of the world's largest full-
service law firms, with more than 1,550 lawyers practicing in 14
domestic and international cities. Sidley was named the Number
One-Ranked U.S. Law Firm for Overall Client Service in 2002 and
2004 in surveys of Fortune 1000 executives by BTI, a Boston-based
consulting and research firm. Sidley received the 2005 Catalyst
Award in recognition of the firm's initiative to recruit, retain
and advance diverse talent.
* BOOK REVIEW: Competition, Regulation, and Rationing
-----------------------------------------------------
Author: Warren Greenberg
Publisher: Beard Books
Softcover: 188 pages
List Price: $34.95
Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587981416/internetbankrupt
This book is fundamental reading for those involved directly in
health care as well as those interested and concerned about the
past, present and future of the health care industry in the United
States. Originally published in 1990, Warren Greenberg examined
the U.S. health care sector over the period 1960-1988 using
standard industrial organization economic analysis. He looked at
regulation and competition, antitrust elements, technology, and
rationing, as well as pricing behavior and advertising. Although
some experts claimed the health care industry to be unique and
outside the purview of such analysis, Dr. Greenberg demonstrated
that all industries differ in their own ways, but nonetheless can
be analyzed using these techniques.
Dr. Greenberg's first goal in writing this book was to educate the
layperson about the economics of the health care industry.
Economists have pointed out two major potential differences
between health care and other sectors of the economy: uncertainty
of demand and imperfect and imbalanced information on the part of
providers and consumers.
Dr. Greenberg agrees with the first and less so with the second.
Obviously, the timing, extent and length of future illness and the
demand for medical services are impossible to know. A good deal of
the consumer's uncertainty is smoothed over by health insurance.
The uncertainty for insurance companies in the sector is somewhat
different than that for other industries: while consumers commonly
seek more health care than they would if they were not covered, it
is rare for someone to burn down his own home just to collect the
insurance. With regard to the imbalance in information,
physicians do indeed know more about a particular illness and
treatment than the average potential patient, but Dr. Greenberg
asks how that differs from plumbing, law and accounting!
Dr. Greenberg identified and described the industries that make up
the health care sector: medical services, hospitals, insurance,
and long-term care. He explored market failures and imperfections
in each and detailed some of the measures government has taken to
correct these imperfections. For example, he described the
efforts of the federal government to force competition in the
medical services field and how barriers to entry imposed by
physicians' lobbies to limit the number of physicians in practice
were lifted, physicians were permitted to advertise, and
restrictions on the services of nonphysicians were eased. He
recounted efforts to require hospitals to disclose information on
mortality rates, infections, and medical complications.
Dr. Greenberg's second goal in writing the book was to consider
policy options. Although he claims skepticism of regulation
(after working for the federal government), he believes that
ongoing efforts to devise a more efficient and equitable health
care system will require more competition, regulation, and
rationing. He examined the Canadian, British and Dutch systems,
so fascinating and different from ours, and found the Dutch system
the least regulatory and most equitable.
This book is a primer on the health care industry. Dr. Greenberg
explains economic terms in a straightforward and clear way without
condescension and takes the reader way beyond Economics 101.
Although the sector has changed significantly since this book was
published, Dr. Greenberg's analysis of the past offers valuable
insight into why our system evolved the way it did and what
direction it might take in future.
Warren Greenberg is Professor of Health Economics and Health Care
Sciences at The George Washington University, as well as Senior
Fellow at the Center for Health Policy Research there.
*********
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 Junior M.
Pinili, 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 ***