/raid1/www/Hosts/bankrupt/TCR_Public/050905.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, September 5, 2005, Vol. 9, No. 210
Headlines
AAIPHARMA: McGladrey & Pullen Approved as Auditors & Accountants
AAIPHARMA INC: Has Until November 7 to Remove Civil Actions
AFFINIA GROUP: S&P Lowers Corporate Credit Rating to B from BB-
ALOHA AIRLINES: Purchase Deal is Reportedly in the Offing
AMERICAN BUSINESS: Chapter 7 Trustee Can Sell Whole Loan Assets
AMERICAN BUSINESS: Inks Fortuna Settlement Pact
AMERICAN BUSINESS: Trustee Taps Obermayer as Litigation Counsel
AMHERST TECHNOLOGIES: Panel Taps Devine Millimet as Local Counsel
ARLINGTON HOSPITALITY: Taps Jenner & Block as Bankruptcy Counsel
ARLINGTON HOSPITALITY: Look for Bankruptcy Schedules on Sept. 30
ARMADA VANCOUVER: Case Summary & 2 Largest Unsecured Creditors
ARVINMERITOR INC: S&P Rates Planned $300MM Sr. Unsec. Notes at BB
ASARCO LLC: Can Use Mitsui Cash Collateral on an Interim Basis
ASARCO LLC: Wants to Pay Costs Related to DIP Financing
ASARCO LLC: Wants Snell & Wilmer as Special Environmental Counsel
ATA AIRLINES: Gets Court OK to Modify Amended BCC Equipment Leases
AUTOCAM CORP: S&P Junks $140 Million Senior Subordinated Notes
AXEDA SYSTEMS: Selling DRM Assets to JMI Equity for $7 Million
BOSTON COMMS: Plans to Appeal District Court Ruling on Patent Suit
CANFIBRE OF RIVERSIDE: Court Confirms Amended Liquidation Plan
CATHOLIC CHURCH: Portland Notifies Parishioners of Class Action
CHASE CMSC: Fitch Lifts $12.2 Million Class H Certs. 1 Notch to B+
CHOWDHURY INVESTMENTS: Case Summary & 32 Largest Unsec. Creditors
CLEARSTORY SYSTEMS: Inks $1.5-Mil Credit Pact with Silicon Valley
CONVERGENCE INC: Paying $15 Million to Nine Somerset Consumers
D&K STORES: Walking Away From Two Leases in Albany & Columbus
DELPHI CORP: Analysts Are Confident GM Will Bail-Out Company
DRESSER INC: Sells Valve Business to Cooper Cameron for $224 Mil.
ENRON CORP: Inks Stipulation Allowing LSP-Kendall's $35-Mil Claim
ENRON CORP: Inks Pact Allowing BofA's Claims for $9 Million
ENRON CORP: CMH Holds $500,000 Allowed Unsecured Claim
ESCHELON TELECOM: S&P Affirms Junk Corporate Credit Rating
EXCALIBUR IND: Soliciting Shareholder Votes on Restructuring
G-FORCE 2002-1: Redeems All Outstanding Notes
GLASS GROUP: Has Until September 19 to Repay $38 Million Loan
GOODYEAR TIRE: Registers $350-Mil Convertible Notes for Resale
INTEGRATED HEALTH: Court Extends Removal Period to December 5
INTERSTATE BAKERIES: 246 Creditors Transfer $25.3-Mil Trade Claims
ISLE OF CAPRI: S&P Places B+ Debt Ratings on Negative CreditWatch
KINETIC SPORTS: Case Summary & 20 Largest Unsecured Creditors
KMART CORP: Settles Dispute Over Waterbury's Claims for $1.8-Mil
KMART CORP: Wants FLOORgraphics Revised Confidentiality Pact OK'd
LORAL SPACE: Equity Committee Can't File Avoidance Action Suit
LUCENT TECHNOLOGIES: Gets $902 Million Refund & Interest from IRS
MARK STEWART: Case Summary & 20 Largest Unsecured Creditors
MARROCCO ENTERPRISES: Case Summary & 7 Largest Unsec. Creditors
MCMILLIN COS: S&P Puts Corporate Credit Ratings on Negative Watch
METABOLIFE INT: Wants Lease Decision Period Stretched to Nov. 30
MORTGAGE ASSET: Fitch Holds Low-B Rating on Two Cert. Classes
MQ ASSOCIATES: Consent Solicitation for Indentures Ends Tomorrow
NATURADE INC: Registers Laurus' 4.99% Equity Stake for Resale
NAZARETH LIVING: Expense Controls Prompt Fitch to Upgrade Rating
NOBLE DREW: U.S. Trustee Adds Two Creditors to Official Committee
NORCRAFT HOLDINGS: S&P Revises Outlook on Low-B Ratings to Stable
NORTHWEST AIRLINES: Frequent Flyer War Brews with United Airlines
ORECK CORP: S&P Places Low-B Ratings on CreditWatch Negative
PARK PLACE: Fitch Assigns BB+ Rating to $9.10 Million Certificates
PHARMACEUTICAL FORMULATIONS: Taps Delaware Claims as Claims Agent
PHARMACEUTICAL FORMULATIONS: Claims Bar Date Set for Oct. 11
PIONEER NATURAL: Commences Cash Tender Offer for 5.875% Sr. Notes
PIONEER NATURAL: Share Buy-Back & Asset Sale Cue Fitch's Downgrade
PIONEER NATURAL: Moody's Places Ratings on Review for Downgrade
PLIANT CORP: Weak Profitability Prompts Moody's to Junk Debts
PONDEROSA PINE: Nixon Peabody Approved as Litigation Counsel
PREMCOR INC: Fitch Lifts Sr. Debt Rating Following Valero Purchase
PRESTIGE MOTORS: Voluntary Chapter 11 Case Summary
PROTOCOL SERVICES: Inks Compensation Insurance Financing Pact
PROXIM CORP: Drinker Biddle Approved as Panel's Counsel
PROTOCOL SERVICES: Kurtzman Carson Approved as Claims Agent
PROXIM CORP: Weiser LLP Approved as Panel's Financial Advisor
RED MOUNTAIN: Fitch Affirms D Rating on $2.9MM Class F Certs.
ROBOTIC VISION: Wants to Sell All Assets to Siemens for $23-Mil
SAINT VINCENTS: Commerce Bank Extends $35 Million DIP Facility
SAINT VINCENTS: Inks Deal to Modify Reimbursement Agreements
SEBASTIAN CARNEVALE: Case Summary & 20 Largest Unsecured Creditors
SECOND CHANCE: Panel Wants Plan-Filing Period Extended to Oct. 31
SOLUTIA INC: Agrees to Sell Astaris Joint Venture for $255 Million
SWEEPRITE MFG: Halts Business Operations & Delists Shares on TSX
TIME WARNER: S&P Puts B Corporate Credit Rating on Negative Watch
TOM'S FOODS: Wants Court OK to Terminate Employee Pension Plan
UAL CORP: Wants Court Nod to Pay Deposit & Ink LOIs for Six Jets
UAL CORP: Court Implements Adequate Protection Agreement
UAL CORP: Wants Court Nod on Trustees & Debt Holders Agreement
UAL CORP: Frequent Flyer War Brews with Northwest
UNITED RENTALS: Extends Consent Solicitation to Sept. 9
US AIRWAYS: Asset Sale Programs Improve Cash Flow
US UNWIRED: S&P Raises Corporate Credit Rating to BBB- from CCC+
USG CORP: Wants Illinois Multi-Mil. Income Tax Claims Liquidated
USI HOLDINGS: Fitch Assigns BB- Long-Term Issuer Rating
VARIG S.A.: Reports BRL342.4 Million Net Loss In 2nd Quarter
VARIG S.A.: Show Slight Domestic Market Share Recovery in July
VARIG S.A.: Willis Lease Wants to Repossess Engines
W.R. GRACE: Files Status Report Concerning Case Management Issues
W.R. GRACE: Future Rep. Insists on Termination of Exclusivity
WINDSWEPT ENVIRONMENTAL: Appoints Andrew C. Lunetta as CFO
* Troy Zander Joins DLA Piper Finance's Practice In San Diego
* FTI Consulting Names 3 Executives to Corporate Finance Practice
* Congress Asked to Let E.D. La. Courts Operate Outside District
* BOND PRICING: For the week of Aug. 29 - Sept. 2, 2005
*********
AAIPHARMA: McGladrey & Pullen Approved as Auditors & Accountants
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The U.S. Bankruptcy Court for the District of Delaware gave
aaiPharma Inc. and its debtor-affiliates permission employ
McGladrey & Pullen LLP as their independent auditors and
accountants, nunc pro tunc to Aug. 9, 2005.
As previously reported, Ernst & Young LLP resigned as the Debtors'
independent registered public accountants in May 2005. Prior to
its resignation, E&Y expressed substantial doubt about aaiPharma's
ability to continue as a going concern after auditing the
Company's 2004 financials. The auditors pointed to the Company's
significant working capital deficit and recurring losses from
operations.
McGladrey will:
-- perform an audit of, and report on the Debtors' consolidated
financial statements as of and for the year ended Dec. 31,
2005;
-- perform an audit of, and report on the effectiveness of, the
Debtors' internal control over financial reporting as of
Dec. 31, 2005;
-- review the Debtors' unaudited interim financial information
before the Debtors file their quarterly reports for the
period ended June 30, 2005, and Sept. 30, 2005;
-- confer with the Debtors on the preparation of submissions to
the Court;
-- consult with the Debtors in the preparation of testimony
required of McGladrey, as may be required; and
-- assist with other matters as management or counsel to the
Debtors may request from time to time.
In addition, McGladrey will consult with the Debtors' management
and counsel in connection with operating, financial and other
business matters relating to the Debtors' ongoing activities.
The Firm's professionals bill based at these hourly rates:
Designation U.S. (in $) Germany (in EUR)
----------- ----------- ----------------
A&A Partners 550 ---
Partners 450 300
Directors 325 ---
Managers 225 220
Seniors 180 180
Staff 135 130
Kenneth Wallace at McGladrey assures the Court that his Firm does
not hold any interest adverse to the Debtors or their estates.
McGladrey & Pullen LLP is a leading national CPA firm focused on
serving middle market companies with over 100 offices across the
country and with an affiliation that links it to leading
accounting firms in over 75 countries. The Firm focuses in the
areas of manufacturing and wholesale, healthcare, financial
services, real estate and construction, governmental entities,
not-for-profit, and auto dealerships.
Headquartered in Wilmington, North Carolina, aaiPharma Inc.
-- http://aaipharma.com/-- provides product development services
to the pharmaceutical industry and sells pharmaceutical products
which primarily target pain management. AAI operates two
divisions: AAI Development Services and Pharmaceuticals Division.
The Company and eight of its debtor-affiliates filed for chapter
11 protection on May 10, 2005 (Bankr. D. Del. Case No. 05-11341).
Karen McKinley, Esq., and Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A.; Jenn Hanson, Esq., and Gary L. Kaplan,
Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP; and the
firm of Robinson, Bradshaw & Hinson, P.A., represent the Debtors
in their restructuring efforts. When the Debtors filed for
bankruptcy, they reported consolidated assets amounting to
$323,323,000 and consolidated debts totaling $446,693,000.
AAIPHARMA INC: Has Until November 7 to Remove Civil Actions
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave
aaiPharma Inc. and its debtor-affiliates an extension of their
time to remove prepetition civil actions through and including
November 7, 2005.
The Debtors are parties to a number of prepetition civil actions
pending in courts throughout the United States. Claims asserted
in those civil actions include employment and contract claims.
aaiPharma need the extension to allow them, their management and
their advisors sufficient time to determine which of the civil
actions should be removed and transferred to the District of
Delaware for further proceedings.
Headquartered in Wilmington, North Carolina, aaiPharma Inc.
-- http://aaipharma.com/-- provides product development services
to the pharmaceutical industry and sells pharmaceutical products
which primarily target pain management. AAI operates two
divisions: AAI Development Services and Pharmaceuticals Division.
The Company and eight of its debtor-affiliates filed for chapter
11 protection on May 10, 2005 (Bankr. D. Del. Case No. 05-11341).
Karen McKinley, Esq., and Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A.; Jenn Hanson, Esq., and Gary L. Kaplan,
Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP; and the
firm of Robinson, Bradshaw & Hinson, P.A., represent the Debtors
in their restructuring efforts. When the Debtors filed for
bankruptcy, they reported consolidated assets amounting to
$323,323,000 and consolidated debts totaling $446,693,000.
AFFINIA GROUP: S&P Lowers Corporate Credit Rating to B from BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on automotive aftermarket parts manufacturer Affinia Group
Inc. to 'B' from 'BB-' and also lowered all other ratings on the
firm. At the same time, all the ratings were removed from
CreditWatch, where they were placed with negative implications on
June 20, 2005. A negative outlook is assigned. Debt totaled
$660 million at June 30, 2005.
"The downgrade on Ann Arbor, Michigan-based Affinia reflects
deterioration of credit statistics due to weaker-than-expected
operating performance," said Standard & Poor's credit analyst
Daniel R. DiSenso.
At June 30, 2005, debt to EBITDA stood at about 5.4x (debt is
adjusted for the present value of operating leases, for that
portion of receivable sales not recorded on the balance sheet, and
for seller holding company notes). The 5.4x debt to EBITDA
measure is well in excess of the 3.5x-4x Standard & Poor's expects
for the rating. Given increasingly challenging industry
conditions and ongoing restructuring actions by the company to
improve operational efficiencies, leverage and cash flow measures
are expected to remain weak for an extended period.
The ratings reflect Affinia's aggressively leveraged balance
sheet, weak debt-protection measures, and exposure to the highly
competitive automotive aftermarket components industry. These
weaknesses are somewhat tempered by the firm's fair position as
one of the largest domestic suppliers of automotive aftermarket
branded name products. It has either a No. 1 or a No. 2 market
position in the primary markets it services.
With annualized sales of about $2.1 billion, Affinia's product
portfolio consists of:
* brake components (50% of total sales);
* filtration products (29%);
* chassis components (7%); and
* distribution operations (14%).
Affinia is well-positioned with well-known brands such as
Raybestos brake components and WIX filtration products, premium
products in growth product niches. The company has long-standing
customer relationships and offers a wide range of customer
services. However, customer concentration is a risk factor.
Affinia's top two customers account for 32% of total sales and its
top 10 customers account for about 55% of sales. Another risk
factor is shifting demand from premium brands to lower margined
value lines from offshore suppliers. Moreover, the quality of
value lines is improving, which will increase the competitive
threat over the next several years.
ALOHA AIRLINES: Purchase Deal is Reportedly in the Offing
---------------------------------------------------------
The Associated Press reports that an unnamed investor offers to
buy Aloha Airlines in a deal that will allow the airline to payoff
its debts and emerge from bankruptcy. The proposed purchase price
is also undisclosed.
To date, the airline has not asked the Bankruptcy Court to approve
any specific transaction or bidding protocol.
Aloha posted operating gains of $3.4 million in June and
$2.5 million in May. This is the third month that the carrier's
reported profits this year.
Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc. --
http://www.alohaairlines.com/-- provides air carrier service
connecting the five major airports in the State of Hawaii. Aloha
Airgroup and its subsidiary Aloha Airlines, Inc., filed for
chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No.
04-03063). Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., and
Simon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevansky
represent the Debtors in their restructuring efforts. When the
Debtor filed for protection from its creditors it listed more than
$50 million in estimated assets and debts.
AMERICAN BUSINESS: Chapter 7 Trustee Can Sell Whole Loan Assets
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
George L. Miller, the Chapter 7 Trustee overseeing the liquidation
of the Debtors' estates, to sell the Whole Loan Assets to Credit-
Based Asset Servicing and Securitization LLC, on the condition
that Credit-Based:
-- irrevocably deliver cash to the Trustee equal to
$29,626,846 to purchase the Whole Loan Assets, such that
the Trustee has received and is in unilateral control of
that cash; and
-- execute and deliver to the Trustee a form of Master
Mortgage Loan Purchase Agreement.
Judge Walrath also rules that if Credit-Based fails to do both
actions, the Trustee is allowed to sell the Whole Loan Assets to
Greenwich Capital Financial Products, Inc., in accordance with a
Master Mortgage Loan Purchase Agreement, in which case Greenwich
Capital will be the successful bidder.
The Trustee will sell the Tape No. 1 and Tape No. 2 Whole Loans
separately through an auction to get the best value out of the
Whole Loan Assets. The sale will be free and clear of all liens,
claims, interests, and encumbrances.
Judge Walrath further terminated the automatic stay to permit
distribution of the Sale proceeds to Greenwich Capital at the
closing date.
Headquartered in Philadelphia, Pennsylvania, American Business
Financial Services, Inc., together with its subsidiaries, is a
financial services organization operating mainly in the eastern
and central portions of the United States and California. The
Company originates, sells and services home mortgage loans through
its principal direct and indirect subsidiaries. The Company,
along with four of its subsidiaries, filed for chapter 11
protection on Jan. 21, 2005 (Bankr. D. Del. Case No. 05-10203).
Bonnie Glantz Fatell, Esq., at Blank Rome LLP represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $1,083,396,000 in
total assets and $1,071,537,000 in total debts. (American
Business Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AMERICAN BUSINESS: Inks Fortuna Settlement Pact
-----------------------------------------------
On December 1, 2003, American Business Financial Services, Inc.,
and its debtor-affiliates, and Marcus Broder Ahart, P.C.,
commenced an action against Philip Fortuna & Associates, Inc., in
the Superior Court of New Jersey in Camden County. Pursuant to
the Fortuna Litigation, the Debtors sought in excess of $500,000
for a claim arising from an appraisal report that Philip Fortuna
provided to them in August or September 1999.
Jeffrey R. Waxman, Esq., at Cozen O'Connor, in Wilmington,
Delaware, relates that pursuant to the Court's order authorizing
the employment of ordinary course professionals, the Debtors
hired Marcus Broder. The firm served as counsel for the Debtors
on a contingency fee basis, pursuant to which it was entitled to
receive one-third of any amount it collected from Philip Fortuna,
as well as a reimbursement of out-of-pocket expenses.
Mr. Waxman clarifies that the OCP Order specifically stated that
a Monthly Fee Cap will not apply to any contingency fees earned
by Marcus Broder.
Mr. Waxman explains that before the conversion of their cases to
Chapter 7, the Debtors could remit payment to Marcus Broder
without the need for an application so long as the professional
remitted an invoice presenting, in reasonable detail, the nature
of the services rendered and the expenses actually incurred.
Under a tentative agreement, George L. Miller, the duly appointed
Chapter 7 Trustee in the Debtors' cases, and Philip Fortuna have
agreed that:
(1) Philip Fortuna will pay the ABFS Trustee $100,000 within
10 days of the approval of the Agreement.
(2) The Trustee will release Philip Fortuna for all claims
related to the Appraisal.
(3) Philip Fortuna will release the Debtors' estates for all
past and future claims.
The Trustee believes that the Fortuna Settlement eliminates any
risk that the Debtors' estates would not be successful if that
matter were to be litigated. In the event that the estates would
succeed, the Trustee would not be able to collect any judgment
received at trial.
Accordingly, Judge Walrath approves the Fortuna Settlement
pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure.
Moreover, the Court directs the Trustee to pay Marcus Broder
$33,333 for legal fees and $1,626 as reimbursement of actual and
necessary expenses incurred in connection with the Fortuna
Litigation.
The Trustee believes that the amounts are reasonable compensation
for Marcus Broder's efforts in the Fortuna Litigation given the
complexity of the lawsuit, the time expended, the nature and
extent of the services rendered, the value of the services, and
costs of services.
Headquartered in Philadelphia, Pennsylvania, American Business
Financial Services, Inc., together with its subsidiaries, is a
financial services organization operating mainly in the eastern
and central portions of the United States and California. The
Company originates, sells and services home mortgage loans through
its principal direct and indirect subsidiaries. The Company,
along with four of its subsidiaries, filed for chapter 11
protection on Jan. 21, 2005 (Bankr. D. Del. Case No. 05-10203).
Bonnie Glantz Fatell, Esq., at Blank Rome LLP represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $1,083,396,000 in
total assets and $1,071,537,000 in total debts. (American
Business Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AMERICAN BUSINESS: Trustee Taps Obermayer as Litigation Counsel
---------------------------------------------------------------
George L. Miller, the Chapter 7 Trustee for American Business
Financial Services, Inc., and its debtor-affiliates, seeks
the U.S. Bankruptcy Court for the District of Delaware's authority
to employ Obermayer Rebmann Maxwell & Hippel LLP as his special
litigation counsel, nunc pro tunc to August 1, 2005.
The Trustee informs Judge Walrath that Obermayer Rebmann has
extensive experience in representing trustees, debtors and
creditors in bankruptcy cases and in complex litigation matters.
As the Trustee's special litigation counsel, Obermayer will
review, investigate and pursue claims against the Debtors'
officers, directors, management and senior employees for the
estates' benefit.
Obermayer associates will be paid $185 per hour and partners will
be paid $235 per hour, in an aggregate amount not to exceed
$250,000.
In addition, Obermayer will be entitled to receive an amount
equal to 25% of the "Financial Benefit" obtained on the Trustee's
behalf in connection with the Debtors' claims whether recovered
by settlement, judgment award, verdict or otherwise. The
Financial Benefit includes, but is not necessarily limited to,
all amounts received or recovered and the fair market value of
any property recovered.
The Trustee notes that if one or more of the Debtors' Claims is
settled before the litigation is commenced in court, Obermayer's
contingent fee will be reduced from 25% to 20% of the Financial
Benefit recovered.
Obermayer will also be reimbursed for necessary costs and
expenses incurred from the Debtors' estates in connection with
its pursuit of the Debtors' claims.
Deirdre M. Richards, Esq., an associate at Obermayer, attests
that the firm does not represent any interest adverse to the
Debtors or their estates and is not a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Philadelphia, Pennsylvania, American Business
Financial Services, Inc., together with its subsidiaries, is a
financial services organization operating mainly in the eastern
and central portions of the United States and California. The
Company originates, sells and services home mortgage loans through
its principal direct and indirect subsidiaries. The Company,
along with four of its subsidiaries, filed for chapter 11
protection on Jan. 21, 2005 (Bankr. D. Del. Case No. 05-10203).
Bonnie Glantz Fatell, Esq., at Blank Rome LLP represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $1,083,396,000 in
total assets and $1,071,537,000 in total debts. (American
Business Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AMHERST TECHNOLOGIES: Panel Taps Devine Millimet as Local Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Amherst
Technologies, LLC, and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of New Hampshire for permission
to employ Devine, Millimet & Branch, Professional Association, as
its local counsel, nunc pro tunc to August 2, 2005.
The Committee tells the Bankruptcy Court that Devine Millimet is
uniquely suited to serve as local counsel because of the Firm's
experience in practicing before the New Hampshire Bankruptcy Court
and because of its knowledge of general bankruptcy practice as
well as business reorganizations under chapter 11 of the
Bankruptcy Code.
In this engagement, Devine Millimet will:
a) advise the Committee with respect to its rights, powers,
and duties in these cases;
b) assist and advise the Committee in its consultations with
the Debtors relative to the administration of these cases
including the proposed sale of the Debtors' businesses as a
going concern;
c) assist the Committee in analyzing the claims of creditors
and in negotiating with such creditors;
d) assist the Committee with its investigation of the acts,
conduct, assets, liabilities, and financial condition of
the Debtors and of the operation of the Debtors' businesses
in order to maximize the value of the Debtors' assets for
the benefit of all creditors;
e) assist the Committee in its analysis of, and negotiations
with the Debtors or any third party concerning matters
related to, among other things, the terms of a plan of
reorganization or plan of liquidation;
f) assist and advise the Committee with respect to
communications with the general creditor body regarding
significant matters in these cases;
g) commence and prosecute necessary and appropriate actions
and/or proceedings on behalf of the Committee;
h) review, analyze or prepare, on behalf of the Committee, all
necessary applications, motions, answers, orders, reports,
schedules, pleadings and other documents;
i) represent the Committee at hearings and other proceedings;
j) confer with other professional advisors retained by the
Committee in providing advice to the members of the
Committee; and
k) perform other necessary legal services in this case as
requested by the Creditors' Committee in this Chapter 11
proceeding in cooperation with Drinker Biddle.
The lead attorneys in this engagement, and their hourly billing
rates, are:
Attorney Hourly Rate
-------- -----------
Daniel J. Callaghan, Esq. $350
Charles R. Powell, Esq. $250
Matthew R. Johnson, Esq. $225
The hourly rates for Devine Millimet's other professionals are:
Designation Hourly Rate
----------- -----------
Partners $200 - $350
Counsel and Associates $160 - $250
Paraprofessionals $ 75 - $170
To the best of the Committee's knowledge, Devine Millimet is a
"disinterested person" as the term is defined in section 101(14)
of the Bankruptcy Code.
Headquartered in Merrimack, New Hampshire, Amherst Technologies,
LLC -- http://www.amherst1.com/-- offers enterprise class
solutions including wired and wireless networking, server and
storage optimization implementations, document management
solutions, IT lifecycle solutions, Microsoft solutions, physical
security and surveillance and complex configured systems. The
Company and its debtor-affiliates filed for chapter 11 protection
on July 20, 2005 (Bankr. D. N.H. Case No. 05-12831). Daniel W.
Sklar, Esq., at Nixon Peabody LLP represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
its creditors, they estimated assets and debts of $10 million to
$50 million.
ARLINGTON HOSPITALITY: Taps Jenner & Block as Bankruptcy Counsel
----------------------------------------------------------------
Arlington Hospitality, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Northern District of Illinois for
permission to employ Jenner & Block LLP as its general bankruptcy
counsel.
Jenner & Block will:
1) advise the Debtors of their powers and duties as debtors-in-
possession and represent them in proceedings and hearings in
the U.S. District and U.S. Bankruptcy Court for the Northern
District of Illinois;
2) prepare on behalf of the Debtors, all necessary motions,
applications, answers, orders, reports, and papers in
connection with the administration of the bankruptcy
estates or as required by the Court or pursuant to the
U.S. Bankruptcy Code and the Local Bankruptcy Rules;
3) assist, advise and represent the Debtors concerning the
confirmation of any proposed chapter 11 and solicitation of
any acceptances or responding to rejections of that plan;
4) assist, advise and represent concerning any possible sale of
the Debtors' assets and in any further investigation of
their assets, liabilities and financial condition of the
that may be required under local, state or federal law;
5) prosecute and defend litigation matters and other matters
that might arise during the Debtors' chapter 11 cases and
counsel and represent the Debtors with respect to assumption
or rejection of executory contracts and leases, sales of
assets and other related bankruptcy-related matters;
6) advise the Debtors with respect to general labor, corporate
and litigation issues related to their chapter 11 cases,
including collective bargaining, securities, corporate
finance, tax, real estate, environmental, employee benefits,
state regulatory and commercial matters; and
7) perform all other legal services to the Debtors that are
necessary and appropriate for the efficient and economical
administration of their chapter 11 cases.
Catherine L. Steege, Esq., a Partner of Jenner & Block, is one of
the lead attorneys for the Debtors. Ms. Steege disclosed that her
Firm received a $35,000 retainer. Ms. Steege charges $560 per
hour for her services.
Brian Meldrum, Esq., a Jenner & Block associate, charges $350 per
hour. Jayne Laiprasert, Esq., another Jenner & Block associate,
charges $215 per hour.
Jenner & Block's other professionals bill:
Designation Hourly Rate
----------- -----------
Partners $410 - $750
Associates $215 - $390
Paralegals $150 - $210
Project Assistants $110
Jenner & Block assures the Court that it does not represent any
interest materially adverse to the Committee, the Debtors or their
estates.
Headquartered in Arlington Heights, Illinois, Arlington
Hospitality, Inc., and its affiliates develop and construct
limited service hotels and own, operate, manage and sell those
hotels. The Debtors operate 15 AmeriHost Inn Hotels under leases
from PMC Commercial Trust. Arlington Hospitality, Inc., serves as
a guarantor under these leases. Arlington Inns Inc., an
affiliate, filed for bankruptcy protection on June 22, 2005
(Bankr. N.D. Ill. Case No. 24749), with the Honorable A. Benjamin
Goldgar presiding.
Arlington Hospitality and its debtor-affiliates filed for chapter
11 protection on Aug. 31, 2005 (Bankr. N.D. Ill. Lead Case No.
05-34885). As of March 31, 2005, Arlington Hospitality posted
$99 million in total assets and $94 million in total debts.
ARLINGTON HOSPITALITY: Look for Bankruptcy Schedules on Sept. 30
----------------------------------------------------------------
Arlington Hospitality, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Northern District of Illinois for
more time to file their Schedules of Assets and Liabilities,
Statements of Financial Affairs, Schedules of Current Income and
Expenditures, Statements of Executory Contracts and Unexpired
Leases. The Debtors want until Sept. 30, 2005, to file those
documents.
The Debtors explain that because of the complexity of their
chapter 11 cases, they cannot file their Schedules and Statements
within 15 days after their August 31 bankruptcy petition date.
Their hotels are located in various states, have separate staff
and different creditors.
The Debtors tell the Court that extension is necessary so they can
have more opportunity to collect and prepare all relevant
information from various property managers and to collate that
information into the requisite format for the Schedules and
Statements.
Headquartered in Arlington Heights, Illinois, Arlington
Hospitality, Inc., and its affiliates develop and construct
limited service hotels and own, operate, manage and sell those
hotels. The Debtors operate 15 AmeriHost Inn Hotels under leases
from PMC Commercial Trust. Arlington Hospitality, Inc., serves as
a guarantor under these leases. Arlington Inns Inc., an
affiliate, filed for bankruptcy protection on June 22, 2005
(Bankr. N.D. Ill. Case No. 24749), with the Honorable A. Benjamin
Goldgar presiding.
Arlington Hospitality and its debtor-affiliates filed for chapter
11 protection on Aug. 31, 2005 (Bankr. N.D. Ill. Lead Case No. 05-
34885). Catherine L. Steege, Esq., at Jenner & Block LLP,
represents the Debtors in their restructuring efforts. As of
March 31, 2005, Arlington Hospitality posted $99 million in total
assets and $94 million in total debts.
ARMADA VANCOUVER: Case Summary & 2 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Armada Vancouver Co.
c/o James W. Lagerquist
1426 Harvard Avenue, #26
Seattle, Washington 98122
Bankruptcy Case No.: 05-21410
Chapter 11 Petition Date: September 1, 2005
Court: Western District of Washington (Seattle)
Judge: Samuel J. Steiner
Debtor's Counsel: Francois L. Fischer, Esq.
Fischer Law Offices
9520 Northeast Daniel Court
Bainbridge Island, Washington 98110-1319
Tel: (206) 780-8555
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 2 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Jeff Kirby Loan $100,000
500 Damonte Ranch Parkway,
Suite 1056
Reno, NV
Sterling Lawn Services Lawn keeping services $800
327 North 30th Street
Mt. Vernon, WA 98273
ARVINMERITOR INC: S&P Rates Planned $300MM Sr. Unsec. Notes at BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to
ArvinMeritor Inc.'s proposed $300 million senior unsecured notes
due September 15, 2015. At the same time, S&P affirmed all other
long-term ratings on the company and related entities. Total
consolidated debt at June 30, 2005, stood at about $1.5 billion.
Troy, Michigan-based ARM is a leading global supplier of
integrated systems, modules, and components to the automotive and
commercial vehicle industries.
The rating actions follow ARM's announcement that it is tendering
to exchange up to $300 million of new senior unsecured notes with
a longer maturity and market coupon, plus a cash payment, for a
like amount of existing notes. The notes being replaced in part
through the tender offer are the company's 6.8% senior notes due
February 15, 2009, ($499 million outstanding) and its 7.125%
senior notes due March 15, 2009, ($150 million outstanding). If
completed, the exchange offer will reduce a significant spike in
debt maturities now scheduled for 2008 and 2009. However, it will
also raise interest costs. The tender offer expires September 28
if not extended.
"The ratings on ARM reflect the firm's aggressive financial
profile, but also the prospects that the company will benefit from
new management's restructuring actions and from a satisfactory
business profile," said Standard & Poor's credit analyst Robert
Schulz. The company is a global supplier of integrated systems,
modules, and components to the automotive and commercial vehicle
industries -- a business characterized by cyclical and highly
competitive end markets.
ARM has strong market positions and diversity in its customer
base, geographic reach, and end markets. These factors are
partially blunted by:
* intense competition;
* constant product pricing pressures;
* and exposure to raw-material price swings.
ARM's profitability has also been hurt by additional incurred
costs at its commercial vehicle systems business. High volume has
resulted in the greater than usual costs, which have limited the
unit's margins at a time when demand for medium- and heavy-duty
trucks is nearing a cyclical peak. S&P still expects those
markets to remain strong in 2006, although visibility in the
medium term is limited.
ASARCO LLC: Can Use Mitsui Cash Collateral on an Interim Basis
--------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Aug. 15, 2005, Judge Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas granted ASARCO LLC authority to use its
cash collateral on an interim basis.
The Court directs ASARCO to deposit $1,280,000 of proceeds of
Mitsui & Co. (U.S.A.), Inc.'s collateral in a newly established
separate segregated bank account.
As ASARCO sells its copper inventory, the Debtor is directed to
continue allocating the proceeds to silver inventory in the same
manner that it has done previously.
As proceeds of Mitsui's collateral are received, the Debtor will
promptly deposit into the Mitsui Cash Collateral Account that
portion of the proceeds that the Debtor has allocated to silver
inventory.
In the event that the Debtor determines that it needs to use
funds in the Mitsui Cash Collateral Account, the Debtor may
request an emergency hearing, on at least three business days'
notice to Mitsui and its counsel, before the Court, provided
however, that Mitsui will be entitled to seek further protection,
including adequate protection, at the hearing.
The Court directs the Debtor to provide Mitsui with reports of
the amount of silver inventory on a bi-weekly basis and of the
amount of the Cash Collateral that is segregated in the Mitsui
Cash Collateral Account on a weekly basis pending a final
hearing.
Court's Ruling
Judge Schmidt authorizes ASARCO to continue to maintain the
proceeds of Mitsui & Co. (USA), Inc.'s collateral in the separate
segregated bank account.
The Court will convene a final hearing on Sept. 14, 2005, at
2:00 p.m. in Corpus Christi. Any objection to ASARCO's request
must be filed by Sept. 9, 2005.
Stephen A. Goodwin, Esq., at Carrington, Coleman, Sloman &
Blumenthal, LLP, in Dallas, Texas, represents Mitsui in ASARCO's
Chapter 11 case.
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining, smelting
and refining company. Grupo Mexico S.A. de C.V. is ASARCO's
ultimate parent. The Company filed for chapter 11 protection on
Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R.
Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq.,
at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A.
Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden,
Womble & Culbreth, P.C., represent the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it listed $600 million in total assets and $1 billion in total
debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
thru 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe
Company, Inc., Cement Asbestos Products Company, Lake Asbestos Of
Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-
driven chapter 11 filings have appeared in the Troubled Company
Reporter since Apr. 18, 2005. ASARCO has asked that the five
subsidiary cases be jointly administered with its chapter 11 case.
(ASARCO Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ASARCO LLC: Wants to Pay Costs Related to DIP Financing
-------------------------------------------------------
Even before ASARCO LLC filed for bankruptcy, the company had
discussions with potential debtor-in-possession lenders to provide
a DIP loan facility during the pendency of the reorganization.
That search has continued postpetition, and ASARCO has reached the
point where potential lenders need to engage in extensive due
diligence as part of finalizing their lending decisions and terms.
When ASARCO selects a DIP lender, that lender requires
reimbursement for all of their out-of-pocket costs and expenses.
These include reasonable fees and expenses of outside legal
counsel, third party advisors and travel-incurred in connection
with the DIP facility. ASARCO estimates that, for a DIP facility
in the range of $75 million to $150 million, out-of-pocket
expenses will range from $275,000 to $350,000. ASARCO has
already received expense reimbursement requests from its
potential DIP lenders.
James R. Prince, Esq., at Baker Botts, LLP, in Dallas, Texas,
asserts that a DIP facility will provide much needed working
capital for the Debtor, and at the same time benefit the Debtor's
estate and creditors. With the liquidity provided by a DIP
facility, ASARCO will be better positioned to obtain goods and
services in connection with its operations on normal credit
terms, thereby permitting it to generate revenues, pay its
employees, and effectively operate its business.
However, before ASARCO can obtain a DIP facility, a lender must
conduct sufficient due diligence so that it will agree to loan
the money. Pursuant to Section 363(b) of the Bankruptcy Code,
ASARCO seeks authority from the U.S. Bankruptcy Court for the
Southern District of Texas to pay the out-of-pocket costs and
expenses incurred by third-party lenders in connection with
potential DIP financing agreements in an amount not to exceed
$350,000. Mr. Prince says these amounts will be funded with
unencumbered cash.
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining, smelting
and refining company. Grupo Mexico S.A. de C.V. is ASARCO's
ultimate parent. The Company filed for chapter 11 protection on
Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R.
Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq.,
at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A.
Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden,
Womble & Culbreth, P.C., represent the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it listed $600 million in total assets and $1 billion in total
debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
thru 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe
Company, Inc., Cement Asbestos Products Company, Lake Asbestos Of
Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-
driven chapter 11 filings have appeared in the Troubled Company
Reporter since Apr. 18, 2005. ASARCO has asked that the five
subsidiary cases be jointly administered with its chapter 11 case.
(ASARCO Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ASARCO LLC: Wants Snell & Wilmer as Special Environmental Counsel
-----------------------------------------------------------------
From Jan. 21, 2005, through its bankruptcy petition date, ASARCO
LLC retained Snell & Wilmer L.L.P., to represent as the company's
special environmental counsel before the Department of the
Interior Bureau of Land Management and Bureau of Indian Affairs.
Snell & Wilmer is a full-service law firm founded in Phoenix,
Arizona, in 1938.
As ASARCO's special counsel, Snell & Wilmer provided advice,
counsel and representation before the two Bureaus to develop a
mine operations plan, including an open-pit copper mine
reclamation plan for the Mission Mine in Arizona that could be
approved by the two bureaus and in related proceedings.
Snell & Wilmer's efforts on ASARCO's behalf have been geared to
establishing the nature, scope and extent of ASARCO's mine
reclamation activities for the Mission Mine and the satisfaction
of corresponding the Bureaus' regulations. Because of the types
of proceedings and entities involved, some of those proceedings
may fall outside the protective umbrella of the Bankruptcy
Code's automatic stay provisions.
Moreover, pursuant to conflict waivers from ASARCO's creditors --
St. Paul Travelers and Road Machinery -- Snell & Wilmer is
authorized to represent ASARCO at least until August 31, 2005.
On that date, a critical meeting is scheduled to occur between
ASARCO and the two Bureaus to discuss the applicability of
certain regulations governing ASARCO's activities at the Mission
Mine. Based on the meeting, the nature, scope and extent of
ASARCO's currently unspecified reclamation obligations will be
defined for the mine plan of operations for the Mission Mine.
Snell & Wilmer's role at the meeting will be to make a case
against including in the mine plan of operations reclamation
obligations that are not specified in the regulations. Thus,
Snell & Wilmer's participation in the August 31, 2005, meeting is
geared to avoiding unnecessary reclamation costs for the Mission
Mine, and so will benefit both ASARCO and its creditors.
ASARCO clarifies that the conflict waivers from St. Paul and Road
Machinery do not address ASARCO's postpetition representation
after August 31, 2005. However, Snell & Wilmer is in the process
of conferring to arrange for conflict waivers for the
representation after August 31, 2005.
In light of the substantial work that Snell & Wilmer has already
performed and the impossibility of obtaining alternative counsel
at this late juncture, ASARCO sought and obtained the authority
to immediately employ Snell & Wilmer as its special environmental
counsel, nunc pro tunc to the Petition Date.
Snell & Wilmer also wants to represent ASARCO after Aug. 31,
2005, conditional on the securing of additional conflict waivers.
In the ordinary course of representing ASARCO before the Petition
Date, Snell & Wilmer obtained a $20,000 retainer from ASARCO. As
of the Petition Date, ASARCO owed Snell & Wilmer $22,055 for
legal fees and costs.
The U.S. Bankruptcy Court for the Southern District of Texas
allows Snell & Wilmer to apply the $20,000 prepetition retainer to
that balance, after which Snell & Wilmer would write off the
remaining amount of prepetition debt.
ASARCO believes that Snell & Wilmer has extensive experience with
and knowledge of the mine plan of operations approval process,
mine reclamation regulations, and related statutes and
regulations as they relate specifically to ASARCO's business at
the Mission Mine. ASARCO ascertains that Snell & Wilmer is
uniquely qualified to assist the company due to Snell & Wilmer's
familiarity with ASARCO's environmental issues and affairs, the
firm's recognized reputation and expertise in law areas for which
it is being retained by ASARCO, and the extremely limited
availability of legal counsel in Arizona performing the kind of
work which Snell & Wilmer would perform for.
Snell & Wilmer will carefully coordinate its efforts with
ASARCO's bankruptcy counsel so as to prevent any duplication of
effort to the fullest extent possible.
Snell & Wilmer's current hourly rates are:
Professionals Hourly Rate
------------- -----------
Phoenix office lawyers $200 to $500
Mark Erpenbeck $205
George Tsiolis $270 (discounted rate: $245)
Paraprofessionals $70 to $180
In the event that no objection is filed no later than
September 13, 2005, any fees and expenses incurred by the firm
will be paid through the final hearing date on the Application.
George Tsiolis, an associate at Snell & Wilmer, attests that the
firm neither holds nor represents an interest adverse to ASARCO
and its estate with respect to the matters for which it is to be
employed as ASARCO's special counsel.
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining, smelting
and refining company. Grupo Mexico S.A. de C.V. is ASARCO's
ultimate parent. The Company filed for chapter 11 protection on
Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R.
Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq.,
at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A.
Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden,
Womble & Culbreth, P.C., represent the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it listed $600 million in total assets and $1 billion in total
debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
thru 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe
Company, Inc., Cement Asbestos Products Company, Lake Asbestos Of
Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-
driven chapter 11 filings have appeared in the Troubled Company
Reporter since Apr. 18, 2005. ASARCO has asked that the five
subsidiary cases be jointly administered with its chapter 11 case.
(ASARCO Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ATA AIRLINES: Gets Court OK to Modify Amended BCC Equipment Leases
------------------------------------------------------------------
As reported in the Troubled Company Reporter on July 22, 2005, the
Official Committee of Unsecured Creditors sought continuance of
ATA Airlines, Inc. and its debtor-affiliates' request to enter
into the amended leases and settlement with BCC Equipment Leasing
Corporation.
The Debtors, BCC and the Creditors Committee have resolved the
disputes by amending the confidential Settlement to terms amenable
to all parties.
Accordingly, Judge Lorch of the U.S. Bankruptcy Court for the
Southern District of Indiana signs the Amended Settlement and the
Amended Leases.
Debtors Postpone Aircraft Return Dates
As part of their July 14, 2005 Amended Leases, ATA Airlines,
Inc., and BCC Equipment Leasing Corporation agreed on the return
dates of various Boeing 737-33N aircraft.
To accommodate their fleet and operational needs, Debtors have
requested, and BCC has agreed, to postpone the return date of the
aircraft with Tail No. N553TZ to approximately seven weeks.
To alleviate the time and expenses necessary to seek Court
approval of any further modifications, the parties also agreed to
seek the Court's authority to postpone the return dates of other
aircraft scheduled for return for a period not to exceed 180 days
for each Aircraft.
The Debtors believe that the modifications are immaterial to the
Amended Leases, as they do not have any significant effect on
BCC's claims under the settlement agreement entered by the parties
in connection with the Amended Leases.
Furthermore, the lease rates during the requested extension
periods will be at the same rates as provided for in the Amended
Leases, whether on a monthly or per diem basis.
The Debtors believe that the modifications constitute the ordinary
course of business for ATA Airlines under Section 363(c) of the
Bankruptcy Code and, therefore, no Court approval is necessary.
To appease BCC, however, the Debtors sought and obtained the
Court's approval of the modifications.
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. 32; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AUTOCAM CORP: S&P Junks $140 Million Senior Subordinated Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Autocam Corp. to 'CCC+' from 'B'. At the same time,
Standard & Poor's lowered its rating on Autocam's $166 million
senior secured credit facilities to 'CCC+' and its rating on
Autocam's $140 million unsecured senior subordinated notes, due
2014, to 'CCC-'. Kentwood, Michigan-based Autocam, a designer and
manufacturer of high-volume, precision-machined specialty metal
alloy components for high-technology automotive applications, had
$282 million of total balance sheet debt at June 30, 2005. The
outlook is negative.
"The rating actions reflect Standard & Poor's view that Autocam's
financial position will be very vulnerable in the next 12 months
to negative developments in the currently unstable industry
environment for automotive suppliers, given the company's limited
liquidity, lack of near-term free cash flow, and weak credit
protection measures," said Standard & Poor's credit analyst Nancy
C. Messer.
Autocam's 2005 financial performance, as of June 30, remains below
Standard & Poor's expectations, reflecting continuing difficult
industry conditions. Access to Autocam's credit facility has been
limited by tight financial covenants, though these were eased in
an amendment effective April 25, 2005. Availability at June 30
under its $50 million multicurrency secured revolving credit
facility was only $13.6 million, constrained by the senior
leverage covenant. Compliance with the leverage covenant will
likely be very tight in the third quarter of 2005, and the senior
leverage and interest coverage covenants begin to tighten in 2006.
Even if lenders waive potential near-term covenant violations,
liquidity will likely continue to be constrained by Autocam's lack
of meaningful free cash flow generation through 2006.
Autocam's credit protection measures at June 30, 2005, were weak,
with lease-adjusted total debt to EBITDA of more than 7x, when
incorporating trade receivables factoring. Twelve-month EBITDA,
less capital spending, covered interest only 1x at June 30.
Contributing to the high debt levels are the company's EBITDA
weakness, the company's increased working capital requirements,
and its incremental capital spending to support new business
wins. Autocam's lack of meaningful near-term free cash flow
generation hampers its ability to improve its capital structure by
reducing debt.
AXEDA SYSTEMS: Selling DRM Assets to JMI Equity for $7 Million
--------------------------------------------------------------
Axeda Systems Inc. (OTC: XEDA.PK) entered into a definitive
agreement to sell its device relationship management business and
related assets to a new corporation formed and owned by JMI Equity
Fund V, L.P., for $7,000,000 plus the assumption of certain
liabilities related to the DRM business.
The Axeda Board of Directors, based on the unanimous
recommendation of a special independent committee of disinterested
directors, has approved the transaction and definitive agreement
and has recommended to Axeda's stockholders that they approve the
transaction. Each of Axeda's officers and directors, other than
the members of the special committee, have agreed in writing to
vote in favor of the transaction.
In connection with the transaction, JMI has committed to provide
$1.5 million of bridge loans, of which the remaining $900,000 will
be advanced promptly.
The asset sale does not involve or affect Axeda's industrial
automation product line which is marketed under the "Supervisor"
name, and which shall continue to operate through the Company's
Axeda Systems S.A.S. subsidiary.
The transaction is expected to close in late October, subject to
customary closing conditions, including approval by the Axeda
stockholders.
Stockholders can also obtain, free of charge, copies of the proxy
statement (when available), together with any other documents
Axeda has filed with the Securities and Exchange Commission, by
directing a request to:
Axeda Systems Inc.
21 Oxford Street
Mansfield, MA 02048
Attn: Investor Relations
Tel: (508) 337-9200
JMI Equity -- http://www.jmiequity.com/-- based in Baltimore and
San Diego, is a private equity firm exclusively focused on
investments in the software and business services industries.
Founded in 1992, JMI has invested in over 60 companies throughout
North America and has approximately $700 million of capital under
management. JMI invests in growing businesses. The firm's focus
is on providing the first institutional capital to self-funded
companies. JMI also invests in select recapitalization and
management buyout financings. Representative investments include
Unica Corporation, Blackbaud, Inc., NEON Systems, Inc., META
Group, Inc. (acquired by Gartner, Inc.), Jackson Hewitt, Inc.,
Transaction Systems Architects, Inc., Control Point Solutions,
Inc., NetPro Computing, Inc., Network Intelligence Corporation and
Panorama Software, Ltd.
Axeda Systems Inc. -- http://www.axeda.com/-- is the world's
leading provider of Device Relationship Management (DRM) software
and services. The Company's flagship product, the Axedar DRM
system helps manufacturing and service organizations increase
revenue while lowering costs, by proactively monitoring and
managing devices deployed at customer sites around the world.
Axeda DRM is a highly scalable, field-proven, and comprehensive
remote management solution that leverages its patented Firewall-
Friendly(TM) technology to enable Machine-to-Machine (M2M)
communication by utilizing the public Internet. Axeda customers
include Global 2000 companies in many markets including Medical
Instrument, Enterprise Technology, Office and Print Production
Systems, and Industrial and Building Automation industries. Axeda
has sales and service offices in the U.S. and Europe, and
distribution partners worldwide.
Going Concern Doubt
KPMG LLP raised substantial doubt about Axeda Systems Inc.'s
ability to continue as a going concern after it audited the
Company's 2004 financials. KPMG stated that the Company's
recurring losses from operations and negative cash flows from
operations since inception triggered that doubt.
"Management has developed and begun to implement a plan to address
these issues and allow the Company to continue as a going concern
through at least the end of 2005," the Company said in its Annual
Report. "This plan includes fundraising from new and current
investors, continued cost-cutting, and stabilizing and growing our
revenue streams. Although we believe the plan will be realized,
there is no assurance that these events will occur."
BOSTON COMMS: Plans to Appeal District Court Ruling on Patent Suit
------------------------------------------------------------------
Boston Communications Group, Inc. (Nasdaq: BCGI), intends to
appeal a federal court judge's ruling which lets stand the
$128 million judgment plus unspecified interest against it and the
other defendants in the Freedom Wireless patent infringement
lawsuit.
The lawsuit was filed by Freedom Wireless, Inc., against:
-- Boston Communications,
-- AT&T Wireless PCS
-- Airtouch Communications, Inc.
-- Alltel Communications Products, Inc.
-- Bell Atlantic Mobile
-- Bellsouth Cellular, Corp.
-- Bellsouth Mobility, Inc.
-- CMT Partners
-- Primeco Personal Communications, L.P.
-- Rogers Wireless, Inc.
-- Southwestern Bell Mobile Systems, Inc.
-- Western Wireless Corporation
-- Cingular Wireless LLC
on Oct. 30, 2000 (Case No. 00-12234).
The Court ruled against bcgi on two issues in the case in which
bcgi sought to reduce the amount of the verdict or have the court
rule that the patents asserted against bcgi are not enforceable.
The disputed patents concern technology developed by bcgi that
enables prepaid wireless service for nearly four million people --
many of whom otherwise would not be qualified for wireless service
because of their credit ratings.
Thursday's judgment by U.S. District Court Judge Edward Harrington
leaves standing a $128 million verdict against bcgi and a number
of its current or former carrier customers (Cingular Wireless LLC,
AT&T Wireless Services, CMT Partners and Western Wireless Corp.)
rendered by a jury on May 20, 2005. The rulings also included the
Court's denial of the Company's motion urging the Court to reduce
the amount of damages the jury awarded, or to grant a new trial on
damages based on newly discovered evidence. The size of the
judgment is more than bcgi's total current assets, and more than
all of the revenue bcgi has ever received from providing the
alleged infringing services to the defendant carriers in the case.
"We are disappointed by the judge's decisions to allow the verdict
to stand and not to reduce the damages," said E.Y. Snowden,
President and CEO of bcgi. "Our fight is far from over, and we
look forward to bringing our appeal to the U.S. Court of Appeals
for the Federal Circuit, which has nationwide jurisdiction over
patent issues and is especially skilled at reviewing complex
patent cases. We do not believe that we infringed Freedom
Wireless' patents or that $128 million bears any relationship to a
reasonable royalty that bcgi would have paid for a license to the
patent rights. We hope the decision on appeal will be favorable,
and we will continue to vigorously defend our technology."
While the appeal is pending, bcgi will be required to provide
adequate security, via an appeal bond or otherwise. Cingular,
bcgi's customer and largest co-defendant, has contractually agreed
to provide security toward the amount of any appeal bond that is
in excess of $41 million and for which bcgi and Cingular are
jointly liable. Under that agreement, announced on July 27, 2005,
bcgi has placed $41 million in escrow to be used for security, and
in exchange, Cingular has agreed to provide sufficient additional
funds to stay the execution of the judgment. This agreement is
expected to allow bcgi to proceed with an appeal without forcing
the Company to seek protection in bankruptcy while the appeal is
pending but does not alter bcgi's obligation to indemnify
Cingular. The agreement specifies that Cingular is required to
post a bond only for the portion of the judgment exceeding
$41 million that is for joint infringement. If the Court enhances
the damages against bcgi for willfulness, Cingular would not be
liable for its enhanced damages and therefore that amount would
not be secured by Cingular.
The plaintiff is expected to file additional motions, which may
include a request for an injunction and a request to enhance
damages, including treble damages and post verdict damages. The
Company intends to contest these motions.
bcgi says it intends to appeal. The appeal will be heard by the
U.S. Court of Appeals for the Federal Circuit in Washington D.C.
and could last twelve to eighteen months, or longer.
As of June 30, 2005, based on managements' assessment of the
potential outcomes of the case and in accordance with FAS 5 and
FIN 14, the Company accrued an estimated loss of $24 million with
respect to the Freedom Wireless verdict, excluding additional
legal charges, which are expensed as incurred. The Company will
reassess the adequacy of this accrual in conjunction with its
third quarter financial results that it expects to release in
October 2005.
Boston Communications Group, Inc. (Nasdaq: BCGI) --
http://www.bcgi.net/-- develops products and services that enable
wireless operators to fully realize the potential of their
networks. bcgi's access management, billing, payment and network
solutions help operators rapidly deploy and manage innovative
voice and data services for subscribers. Available as licensed
products and fully managed services, bcgi's solutions power
carriers and enable MVNOs with market-leading
implementations of prepaid wireless, postpaid billing, wireless
account funding and m-commerce. bcgi was founded in 1988 and is
listed on the Russell 2000 index.
CANFIBRE OF RIVERSIDE: Court Confirms Amended Liquidation Plan
--------------------------------------------------------------
The Honorable Randolph Baxter of the U.S. Bankruptcy Court for the
District of Delaware approved, on June 16, 2005, the First Amended
Plan of Liquidation filed by CanFibre of Riverside, Inc.
Judge Baxter determined that the Plan satisfies the 13 standards
for confirmation stated in Section 1129(a) of the Bankruptcy Code.
The Plan provides for the liquidation of the Debtor's remaining
assets for distribution to creditors. A Liquidation Trust will be
established to:
a) prosecute causes of action;
b) prosecute and settle objections to claims and
interests; and
c) make distributions to holders of allowed claims in
accordance with the terms of the Plan.
The Plan appoints Chad Shandler at Traxi, LLC, as the Liquidation
Trustee.
As reported by the Troubled Company Reporter on June 20, 2005,
the Amended Plan provides that:
-- putting the assets into Group I, Group II, and Group III
categories;
-- full payment of administrative claims, fee claims, and
priority tax claims from the sale of Group II assets;
-- the Bondholders' secured portion of their claims -- totaling
$90.6 million -- will receive distributions from the Group I
assets, and the rest of their claims will be treated as
unsecured claims;
-- the Mechanics' Lien Settlement will be satisfied in
accordance with the terms of the settlement agreement;
-- general unsecured creditors, owed approximately $42 million,
will receive pro rata shares of any cash distributions from
Group II or Group III assets after all other allowed claims
are paid.
CanFibre of Riverside, Inc., a Delaware corporation, developed,
constructed, owned and operated a waste wood recycling facility in
Riverside County, California. The Facility produced medium
density fiberboard -- MDF -- using a proprietary steam injection
process. Riverside's facility was unique due to its ability to
use recyclable dry fiber waste materials normally destined for
landfills, such as clean mill residue, construction and demolition
wood, packaging woods and waste panel board, without the use of
environmentally damaging urea formaldehyde resin.
CanFibre tumbled into chapter 11 on October 24, 2000, after it
failed to obtain working capital to operate its commercial scale
MDF plant using steam injection presses.
Howard Seife, Esq., Joseph H. Smolinsky, Esq., N. Theodore Zink,
Jr., Esq., at Chadbourne & Parke LLP, and James L. Patton, Jr.,
Esq., Brendan Linehan Shannon, Esq., Michael R. Nestor, Esq., and
Matthew B Lunn, Esq., at Young, Conaway, Stargatt & Taylor
represent CanFibre. John H. Knight, Esq., at Richards, Layton &
Finger, P.A., represents the Official Committee of Unsecured
Creditors. When the Company filed for protection from its
creditors, it listed estimated assets and debts of more than
$100 million each.
CATHOLIC CHURCH: Portland Notifies Parishioners of Class Action
---------------------------------------------------------------
The Archdiocese of Portland discloses in a press release that
Catholic parishioners in the Archdiocese will receive notification
that they are part of a class action lawsuit in the Archdiocese's
bankruptcy proceedings.
The U.S. Bankruptcy Court for the District of Oregon certified a
class of defendants composed of parishioners and donors on
July 22, 2005.
The notification states:
"If you are or were a member of a parish or if you have made
gifts, donations, and/or tithes to or for the benefit of any
of the 124 parishes located within the territory of the
Debtor, which is west of the Cascade Mountains in Oregon
("the Territory") your rights as a parishioner (as well as
the rights of the parish) may be affected by the Bankruptcy
Case and the Lawsuit."
The lawsuit has one defendant class composed of two sub-classes.
One sub-class includes all parishes with their schools and
missions. The second sub-class consists of parishioners and
donors. Three Catholic high schools: Central Catholic in
Portland, Regis in Stayton, and Marist in Eugene are not named in
the class action, but the schools are part of the property dispute
litigation.
The Notice summarizes the issue involved in the lawsuit:
"The issue in this Lawsuit is whether parish churches,
schools and certain funds, defined below as the Disputed
Property, are available to pay claims against the Debtor.
The Debtor contends those assets are not available to pay
claims against the Debtor."
Portland says the Notice of Class Action answers a number of
questions parishioners may have concerning the lawsuit. Under no
circumstances will a class member be liable for the payment of any
money solely as a result of being a member of the class, Portland
clarifies.
A hearing is scheduled for October 11, 2005, at 9:30 a.m., at the
U.S. Bankruptcy Court, 1001 SW Fifth Avenue, Seventh Floor, in
Portland. Parishioners and other interested parties are invited
to the hearing. The Notice explains to parishioners their rights
as members of the class, their options and the potential
consequences of those options.
The Notice of Class action is posted on the Web site for the
Archdiocese of Portland at http://www.archdpdx.org/bankruptcyand
on the Web site for the Committee of Parishes and Parishioners at
http://www.parishionerscommittee.org/index.html
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. In its Schedules of Assets and Liabilities filed with
the Court on July 30, 2004, the Portland Archdiocese reports
$19,251,558 in assets and $373,015,566 in liabilities. (Catholic
Church Bankruptcy News, Issue No. 40; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
CHASE CMSC: Fitch Lifts $12.2 Million Class H Certs. 1 Notch to B+
------------------------------------------------------------------
Fitch Ratings has taken these actions on Chase Commercial Mortgage
Securities Corp.'s commercial mortgage pass-through certificates,
series 1997-2:
Fitch upgrades these classes:
-- $44.8 million class D to 'AAA' from 'AA-';
-- $12.2 million class E to 'AA' from 'A';
-- $48.8 million class F to 'BBB-' from 'BB';
-- $6.1 million class G to 'BB+' from 'BB-';
-- $12.2 million class H to 'B+' from 'B';
In addition, Fitch affirms these classes:
-- $267.8 million class A-2 at 'AAA';
-- Interest only class X 'AAA';
-- $32.6 million class B at 'AAA'
-- $48.8 million class C at 'AAA';
-- $8.1 million class I at 'CCC'
The $10.4 million class J certificates are not rated by Fitch.
The upgrades reflect the increased subordination levels due to
scheduled amortization, paydown and defeasance. As of the August
2005 distribution date, the pool's aggregate collateral balance
has been reduced by approximately 39.6%, to $491.8 million from
$814 million at issuance. Eight loans (10.3%) have defeased,
including the second largest loan.
There are currently five loans (7.6%) being specially serviced.
The largest loan (2.62%) in special servicing is a limited-service
hotel property located in Sturbridge, MA. The loan was
transferred to special servicing as a result of a monetary default
and is now real estate-owned. The special servicer is currently
in negotiations with a buyer for this property. Minimal losses
are expected when the asset is liquidated.
The second largest specially serviced loan (1.84%) is a
multifamily property located in Trotwood, OH. The property
transferred to the special servicer due to loan default. Recent
appraisal values of the property indicate the potential for a loss
at liquidation.
CHOWDHURY INVESTMENTS: Case Summary & 32 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Chowdhury Investments, Inc.
dba Traveler's Paradise
dba Prime Stop #1
dba Prime Stop #2
dba Prime Stop #3
dba Discount Gas Tobacco & Beverage
9709 LaRochelle Drive
Greenville, Texas 75402
Bankruptcy Case No.: 05-39949
Chapter 11 Petition Date: September 1, 2005
Court: Northern District of Texas (Dallas)
Judge: Steven A. Felsenthal
Debtor's Counsel: Eric A. Liepins, Esq.
Eric A. Liepins, P.C.
12770 Coit Road, Suite 1100
Dallas, Texas 75251
Tel: (972) 991-5591
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 32 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
AMBEST Unknown
5250 Virginia Way, Suite 250
Brentwood, TN 37027
American Express Unknown
P.O. Box 650448
Dallas, TX 75265-0048
AT&T Universal Card Unknown
P.O. Box 44167
Jacksonville, FL 32231
Beneficial Unknown
151 West Spring Creek Parkway, Suite 519
Plano, TX 75023
Business Loan Center Unknown
645 Madison Avenue, 19th
New York, NY 10022
CIT Small Bussines Lending Corporation Unknown
1 CIT Drive
Livingston, NJ 07039
Citi Bank Unknown
P.O. Box 6000
The Lakes, NV 89163
Classic Star Unknown
6324 Eden Drive
Haltom City, TX 76117
Comdata Unknown
Trendar Merchant Services
P.O. Box 3389
Brentwood, TN 37024
DAS Distributors Unknown
305 Fellowship, Suite 100
P.O. Box 5471
Mount Laurel, NJ 08054
Daum Outdoor Unknown
4455 LBJ Freeway, Suite 806
Dallas, TX 75244
First Data Corporation Unknown
12500 East Belford Avenue
Mail Stop M12-L
Englewood, CO
First National Unknown
Garland Branch
P.O. Box 810
Austin, TX 78754
First National Bank Omaha Unknown
P.O. Box 2951
Omaha, NE 68103
G.E. Capital Unknown
635 Maryville Center, Suite 120
Saint Louis, MO 63141
G.E. Capital Unknown
P.O. Box 953380
Saint Louis, MO 63195-3380
Griffin Communication Unknown
P.O. Box 160
Point, TX 75472
Hagar Restaurant Services Unknown
1229 West Main Street
Oklahoma City, OK 73106
Heller Financial Services Unknown
P.O. Box 676657
Dallas, TX 75267
Home Depot Unknown
P.O. Box 6028
The Lakes, NV 88901
Horizon General Contractors Unknown
Duns Demand
4836 Brecksville
P.O. Box 509
Richfield, OH 44286
Hunt County Unknown
P.O. Box 1042
Greenville, TX 75401
MCI (Progressive Asset Management Service) Unknown
Department 834
P.O. Box 4115
Concord, CA 94524
NRG Petroleum Unknown
1409 Shannon Road
P.O. Box 893
Sulphur Springs, TX 75483
NU Build Associates Unknown
3939 East Highway 80, Suite 308
Mesquite, TX 75150
Order Matic Unknown
P.O. Box 25463
Oklahoma City, OK 73125
Supply One Unknown
CPD Tech Park
3801 Northwest 3rd Street
Oklahoma City, OK 73107
Supply One Unknown
P.O. Box 937
Fort Worth, TX 76134
Tex-Air Cryogenics Unknown
120 West State
Garland, TX 75040
Texas Work Force Commission Unknown
1125 Judson Road
Longview, TX 75601
Texoma Advertising Company Unknown
P.O. Box 869334
Plano, TX 75086
United Central Bank Unknown
P.O. Box 462267
Garland, TX 75046
CLEARSTORY SYSTEMS: Inks $1.5-Mil Credit Pact with Silicon Valley
-----------------------------------------------------------------
ClearStory Systems, Inc., entered into a Loan and Security
Agreement with Silicon Valley Bank, pursuant to which the Bank
agreed to provide the Company with a $1.5 million secured line of
credit.
The interest rate on borrowings under this line of credit is the
Bank's prime rate plus 0.5%. The amounts borrowed under this line
of credit may be repaid and reborrowed by the Company until the
line of credit matures in August 2007, at which time all amounts
borrowed are due and payable.
The Company also has the option, at any time upon 30 days' prior
written notice to the Bank, to terminate the Loan Agreement by
paying to SVB, in cash, all amounts borrowed under the line of
credit, without premium or penalty. Upon the occurrence and
continuation of certain events of default, the Loan Agreement
provides for acceleration of payment of all amounts borrowed under
the line of credit. Pursuant to the Loan Agreement, the Company
granted the Banks a security interest in all of the Company's
assets in order to secure the payment and performance of its
obligations to SVB under the Loan Agreement. The proceeds of the
line of credit will be used by the Company to meet short-term
liquidity needs and for general business purposes.
Guaranty
The Company's obligations that arise in connection with the Loan
Agreement are guaranteed by SCP Private Equity Partners II, L.P.
In consideration for SCP's guaranty, the Company issued a Series C
Convertible Preferred Stock Purchase Warrant to SCP to purchase
232,007 shares of the Company's Series C Convertible Preferred
Stock, par value $0.01 per share, at a purchase price per share of
$1.9396. The number of shares of Series C Preferred issuable upon
exercise of the Warrant and the purchase price per share are
subject to adjustment as set forth in the Warrant. The Warrant
may be exercised in full or in part at any time by SCP until the
Warrant expires in August 2015. If not earlier exercised, the
Warrant will be deemed to have been exercised immediately prior to
expiration. The issuance of the Warrant was not an underwritten
offering and, therefore, no underwriting discounts or commissions
were paid in connection with the Issuance.
SCP may be considered an affiliate of the Company. The holders of
shares of Series C Preferred issuable upon exercise of the Warrant
have certain voting rights.
ClearStory Systems -- http://www.clearstorysystems.com/-- is an
established provider of flexible, on-demand ECM solutions.
ClearStory's Radiant Content Suite provides discrete management
and on-demand access for the full spectrum of content -- from
graphics and video to customer statements and email. The
company's standards-based technology provides a powerful platform
for integrating rich media and business documents into a multitude
of business-critical environments, including marketing and finance
departments, call centers, channel partner portals, compliance
initiatives, and global marketing extranets.
* * *
As reported in the Troubled Company Reporter on July 14, 2005,
Miller Ellin & Company, LLP, expressed substantial doubt about
ClearStory Systems, Inc.'s ability to continue as a going concern
after it audited the Company's financial statement for the year
ended March 31, 2005. The auditing firm points to the Company's
recurring losses and working capital deficiency.
CONVERGENCE INC: Paying $15 Million to Nine Somerset Consumers
--------------------------------------------------------------
Brian Schrock, writing for the Daily American, reports that
NorVergence will pay $15 million to nine customers from Somerset
as a result of a judgment entered by a Somerset County Judge. The
judgment is the result of a lawsuit accusing the Company of
defrauding more than 600 Pennsylvania consumers, including small
businesses, churches, charities, schools and the local chamber of
commerce.
The Company made misrepresentations by claiming it could provide
consumers with dramatic savings on their monthly telephone,
cellular, and Internet bills.
The court found that consumers signed a set of applications and
agreements with a total price equal to the promised monthly
payments over five years. Most of the total payments were
allocated to rental agreements for a "Matrix" or "Matrix Soho"
device that supposedly would provide the promised costs savings.
In reality, the Matrix was just a standard integrated access
device (IAD), commonly used to connect telephone equipment to a
long-distance provider's lines. The Matrix Soho was essentially a
firewall.
The Matrix boxes cost between $200 and $1,550. The total cost to
the consumer was $7,000 to $340,000, with an average cost of
$29,291. The price of the rental agreement had nothing to do with
the cost of the Matrix, which itself was an incidental part of the
promised services.
The court also found that NorVergence failed to tell consumers
that it did not have a long-term commitment from any service
provider for the services it was promising to provide.
NorVergence also failed to tell consumers that the Matrix boxes
covered by the rental agreement would be of little or no value to
them if NorVergence failed to provide the promised
telecommunications services.
Finally, the court found that NorVergence had furnished the
finance companies who purchased its contracts with the means and
instrumentalities to commit deceptive and unfair acts or practices
violating the FTC Act. It provided those finance companies with
rental agreements that allowed the finance companies to:
1) misrepresent that consumers owe money on the rental
agreements, regardless of whether NorVergence provided the
promised telecommunications services; and
2) file collection suits against consumers in courts far from
where the consumers are located.
The FTC said it worked cooperatively on this matter with various
state attorney generals' offices, which also have investigated
NorVergence's business practices. More than 20 states also have
reached settlements with some of the finance companies that
purchased and are collecting on NorVergence rental agreements.
"The commonwealth . . . believes that the finance companies paid
NorVergence in excess of $100 million in upfront payments for the
purchase or assignment of the rental agreements," Senior Deputy
Attorney General Barry Creany wrote in the lawsuit, which was
filed in December 2004.
However, parties-in-interest believe there will be no money left
from the estate to pay these unsecured creditors.
Headquartered in Newark, New Jersey, NorVergence, Inc., is a
reseller of wireless telecommunications services. The Company
filed a chapter 11 petition on June 30, 2004 (Bankr. D. N.J.
04-32079). The Court converted the Debtor's chapter 11 case to a
chapter 7 proceeding at the behest of the Company's creditors.
Popular Leasing USA, Inc., OFC Capital, a Division of ALFA
Financial Corp., and Partners Equity Capital Company, LLC,
asserted total claims amounting to $1.3 million. Inez M.
Markovich, Esq., and Peter J. Deeb, Esq., at Frey, Petrakis, Deeb,
Blum, Briggs et al., represents the Petitioners in their
restructuring efforts.
NorVergence closed its stores located at 550 and 570 Broad St. and
laid off all of its employees. This followed 1,300 firings
earlier in July 2004.
D&K STORES: Walking Away From Two Leases in Albany & Columbus
-------------------------------------------------------------
D & K Stores, Inc., tells the U.S. Bankruptcy Court for the
District of New Jersey it wants to reject two of its 68 unexpired
nonresidential real property leases:
Location Lessor Lease Expiration
-------- ------ ----------------
Store #55 Russell Road Associates Feb. 28, 2007
Westgate Shopping Center 865 Providence Highway
911 Central Avenue Dedham, Massachusetts
Albany, New York
Store #716 Great Eastern Corporation Jan. 31, 2008
932 South Hamilton Road 191 W. Nationwide Boulevard
Columbus, Ohio Suite 200
Columbus, Ohio
The Debtor determined that these two premises are no longer
necessary for its reorganization.
Headquartered in Eatontown, New Jersey, D & K Stores, Inc., filed
for chapter 11 protection on April 8, 2005 (Bankr. D. N.J.
Case No. 05-21445). Timothy P. Neumann, Esq., at Broege, Neumann,
Fischer & Shaver, LLC, represents the Debtor. When the Debtor
filed for protection from its creditors, it estimated assets and
debts from $10 million to $50 million.
DELPHI CORP: Analysts Are Confident GM Will Bail-Out Company
------------------------------------------------------------
John Devine, General Motors' CFO, told analysts in a presentation
in Detroit last week, that the Company is focused on doing what's
most constructive and in the best interests of its shareholders.
According to industry analysts in published reports, GM's
turnaround is dependent on smooth launches of its sports utility
vehicles, which is contingent on parts supplier Delphi Corp.'s
continued existence and operation. Analysts took Mr. Devine's
statement to mean that GM is likely to bail out Delphi Corp. for
its own survival.
Goldman Sachs analyst Robert Barry said in a prepared statement
that he is confident GM will help Delphi. What's at risk, Mr.
Barry says, is that a deal may not be hammered before Delphi's
Oct. 17 deadline.
Aside from GM, Delphi is also seeking wage cuts from members of
the United Auto Workers union.
As previously reported, Delphi Chairman Steve Miller -- Federal-
Mogul's former non-executive chairman and a turnaround pro who
came to Delphi from Bethlehem Steel -- demanded wage cuts of at
least $5 an hour, other benefit reductions and work rule changes
from the UAW. Those concession total around $2.5 billion
in savings for the Company. The Company also asked for the
freedom to close plants and to divest or shut down money-losing
business units, in the shortest time possible.
Delphi is a 1999 spin-off from General Motors. While General
Motors and Delphi are separate entities, GM retains
indemnification obligations for some employee obligations.
Analysts said in reports that should Delphi file for bankruptcy,
GM will be paying up to $9 billion in costs.
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.
At June 30, 2005, Delphi Corporation's balance sheet showed
a $4.56 billion stockholders' deficit, compared to a
$3.54 billion deficit at Dec. 31, 2004.
Delphi is rated by the three major rating agencies:
Senior Senior Preferred
Secured Unsecured Stock
Rating Agency Rating Rating Rating
------------- -------- --------- ---------
Standard & Poor's B- CCC- CC
Moody's B3 Ca C
Fitch Ratings B CCC CCC-
As a result of recent downgrades, Delphi's facility fee and
borrowing costs under its credit facilities increased.
DRESSER INC: Sells Valve Business to Cooper Cameron for $224 Mil.
-----------------------------------------------------------------
Dresser, Inc., agreed to sell its worldwide On/Off valve business
to Cooper Cameron Corporation (NYSE:CAM) in a cash transaction
valued at approximately $224 million, subject to final adjustments
and other matters.
The sale, which is subject to antitrust approvals and the consent
of Dresser's lenders, is expected to close in the fourth quarter
of 2005. Dresser said the proceeds from the sale will primarily
be used to pay down debt.
"Our On/Off division represents approximately 20 percent of our
annual revenue but a smaller percentage of our profitability,"
said Patrick M. Murray, chairman and chief executive officer of
Dresser. "Selling the division will allow us to de-lever the
company and focus our time and resources on our other highly
regarded products."
Dresser's On/Off business includes Control Seal(TM), Entech(TM),
Grove(R), Ring-O(R), TK(TM) and Tom Wheatley(TM) valves; certain
Texsteam(TM) products; and Ledeen(TM) actuators. All the products
are used in oil and gas exploration and production and gas
transmission pipelines. Dresser's Natural Gas Solutions Business
will retain On/Off's Texsteam chemical injection pump product and
ANDCO(R) and RCS(R) electric actuators.
Dresser's On/Off business has its headquarters and a manufacturing
facility in Houston, Texas. Approximately 300 of its 1,500
worldwide On/Off employees are in Houston. The On/Off business
also manufactures in Voghera, Italy; Edmonton, Alberta, Canada;
and Hammond, Lousiana.
Separately, the company said that it would incur impairment to
goodwill for its On/Off business of approximately $50 million in
the fourth quarter of 2004. As announced in March 2005, the
reporting of the company's 2004 results has been delayed due to a
pending restatement.
Headquartered in Dallas, Texas, Dresser, Inc. --
http://www.dresser.com/-- is a worldwide leader in the design,
manufacture and marketing of highly engineered equipment and
services sold primarily to customers in the flow control,
measurement systems, and compression and power systems segments of
the energy industry. Dresser has a comprehensive global presence,
with over 8,500 employees and a sales presence in over 100
countries worldwide.
* * *
As reported in the Troubled Company Reporter on June 23, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Addison, Texas-based Dresser Inc. to 'B+' from 'BB-'.
The company remains on CreditWatch with negative implications.
The ratings downgrade reflects weak credit measures and debt
leverage that remain elevated for the current ratings level.
ENRON CORP: Inks Stipulation Allowing LSP-Kendall's $35-Mil Claim
-----------------------------------------------------------------
On Oct. 15, 2002, LSP-Kendall Energy, LLC, filed Claim No.
16037 in an unliquidated amount against Enron Corporation.
Kendall provided a one-page summary to the Claim that contains
only one paragraph purportedly explaining the basis for the
Claim.
Kendall's Claim was filed for "$35,000,00[0].00 (estimated)."
Enron believes, based on the limited information Kendall
provided, that the Claim allegedly arises from the engineering
and construction of the Kendall Facility.
According to Matthew S. Barr, Esq., at Milbank, Tweed, Hadley &
McCloy LLP, in New York, National Energy Production Corporation
now known as EPC Estate Services, Inc., one of the Reorganized
Debtors, Dick Corporation and Kendall entered into an Amended and
Restated Turnkey Engineering, Procurement and Construction
Agreement, dated November 11, 1999. Under the Turnkey Agreement,
NEPCO and Dick agreed to design, engineer and construct an
electric generating facility in Kendall County, Illinois in the
town of Minooka in Seward Township.
In addition, NEPCO and Dick entered into a Joint Venture
Agreement, dated May 12, 1999, to allocate their duties and
obligations under the Turnkey Agreement.
As required by the Turnkey Agreement, Enron and Kendall entered
into a Construction Contract Guaranty, dated as of October 12,
1999. Under the Guaranty, Enron guaranteed, subject to certain
limitations, NEPCO and Dick's obligations to Kendall under the
Turnkey Agreement.
Furthermore, after Enron filed for bankruptcy and prior to
completion of the Kendall Facility, NEPCO, Kendall and Dick
entered into Change Order No. 18 to the Turnkey Agreement, dated
as of December 19, 2001. Under the Change Order, Kendall agreed
to make available $35 million for the payment of certain costs in
an apparent effort to complete construction of the Kendall
Facility. Enron believes that the construction of the Kendall
Facility was completed by DC in or about 2002.
Counsel to Enron made numerous requests for a detailed
explanation and back-up documentation for the Claim from counsel
to Kendall. As of January 26, 2005, Enron has not received a
response to any of its calls or letters to Kendall's counsel.
In accordance with the Estimation Procedures, Enron asks Judge
Gonzalez to estimate Kendall's Claim at $0.
Mr. Barr tells the Court that Enron is not in a position to
readily determine or verify a fixed amount for the Claim, if any,
by reference to any documents it has currently available to it.
"Therefore, the Claim is properly classified as unliquidated and
subject to estimation under Section 502(c) of the Bankruptcy
Code. The only hints at the nature of the Claim are bare
references to the Turnkey Agreement, the Guaranty and the Change
Order."
Kendall has failed to set forth allegations in the Claim
sufficient to support any enforceable legal or contractual
obligation of Enron, Mr. Barr adds. "While the estimated amount
of the Claim appears to be connected to the amount of the Fund
established under the Change Order, Kendall has not even
attempted to explain what amounts of the Fund, if any, were
expended."
Moreover, Kendall fails to assert any obligation of Enron to pay
Kendall based on amounts paid from the Fund, if any, to complete
the Kendall Facility. In fact, the Change Order was entered
into after the Enron Petition Date without Enron as a party. At
that time, Mr. Barr says, Enron was no longer directly
participating in the Kendall Facility. Thus, Enron does not have
adequate knowledge of events after its Petition Date to verify or
liquidate any alleged liabilities that are not supported by any
detailed information. Accordingly, Kendall does not have a
"claim" as defined in Section 101(5) of the Bankruptcy Code,
against Enron.
Kendall also failed to attach documentation supporting the Claim
as required by Rule 3001(c) of the Federal Rules of Bankruptcy
Procedure, and the factual allegations provided in the Claim are
so deficient that the Claim is not entitled to the presumption of
a prima facie validity pursuant to Bankruptcy Rule 3001(f).
* * *
In a Court-approved stipulation, LSP-Kendall Energy LLC, Enron
Corp., and National Energy Production Corporation now known as
EPC Estate Services, Inc., agree that:
-- Kendall's $35,000,000 claim filed against NEPCO is, and
will be, deemed to have been timely filed on October 31,
2002; and
-- the Reorganized Debtors' objection to Kendall's Claim No.
16037 for $35,000,000 against Enron is, and will be, deemed
amended to include the NEPCO Proof of Claim.
All of the Reorganized Debtors' objections asserted will be
construed to include the NEPCO Proof of Claim.
Headquartered in Houston, Texas, Enron Corporation --
http://www.enron.com/-- is in the midst of restructuring various
businesses for distribution as ongoing companies to its creditors
and liquidating its remaining operations. Before the company
agreed to be acquired, controversy over accounting procedures had
caused Enron's stock price and credit rating to drop sharply.
Enron filed for chapter 11 protection on December 2, 2001 (Bankr.
S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the
Company's Modified Fifth Amended Plan on July 15, 2004, and
numerous appeals followed. The Confirmed Plan took effect on
Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen,
Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in
their restructuring efforts. (Enron Bankruptcy News, Issue No.
157; Bankruptcy Creditors' Service, Inc., 15/945-7000)
ENRON CORP: Inks Pact Allowing BofA's Claims for $9 Million
-----------------------------------------------------------
Before filing for bankruptcy, Enron North America Corp. entered
into agreements for the sale of commodities and exchange of
payments in connection with the prices and indices of commodities
with:
-- Merit Partners, LP,
-- Merit Energy Partners A, LP,
-- Merit Energy Partners B, LP,
-- Merit Energy Partners C-I, LP,
-- Merit Energy Partners C-II, LP,
-- Merit Partners III, LP,
-- Merit Energy Partners VIII, LP,
-- Merit Energy Partners IX, LP, and
-- Merit Energy Partners X, LP.
Enron Corp. guaranteed ENA's obligations under the Agreements.
The Merit Entities assigned their interest in certain claims in
the Debtors' bankruptcy cases to Banc of America Securities LLC,
as agent for Bank of America, N.A.
Banc of America filed claims against ENA on account of the
Contracts and corresponding claims against Enron on account of
the Guaranties:
ENA Enron Asserted
Claim No. Claim No. Amount
--------- -------- --------
12192 11324 $123,970
12182 11325 1,394,781
12191 11326 212,789
12185 11327 1,277,934
12188 12181 557,434
11328 12183 1,609,324
12189 12186 331,739
12190 12187 377,584
12184 12193 113,286
On November 28, 2003, Enron filed an adversary proceeding against
Bank of America, N.A., and Banc of America Securities LLC to
avoid the Guaranties.
In a Court-approved stipulation, the parties agree that:
(1) the ENA Claims will be allowed as Class 5 general
unsecured claims in their entirety;
(2) the Guarantee Claims will be allowed in these amounts:
Claim No. Amount Allowed
--------- --------------
11324 $61,985
11325 697,391
11326 106,395
11327 638,967
12181 278,717
12183 804,662
12186 165,870
12187 188,792
12193 56,643
(3) the Avoidance Action will be dismissed with prejudice and
without costs to any party.
Headquartered in Houston, Texas, Enron Corporation --
http://www.enron.com/-- is in the midst of restructuring various
businesses for distribution as ongoing companies to its creditors
and liquidating its remaining operations. Before the company
agreed to be acquired, controversy over accounting procedures had
caused Enron's stock price and credit rating to drop sharply.
Enron filed for chapter 11 protection on December 2, 2001 (Bankr.
S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the
Company's Modified Fifth Amended Plan on July 15, 2004, and
numerous appeals followed. The Confirmed Plan took effect on
Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen,
Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in
their restructuring efforts. (Enron Bankruptcy News, Issue No.
157; Bankruptcy Creditors' Service, Inc., 15/945-7000)
ENRON CORP: CMH Holds $500,000 Allowed Unsecured Claim
------------------------------------------------------
On Oct. 11, 2002, Children's Memorial Hospital filed Claim No.
9152 against Enron Energy Services, Inc., for $1,651,593. On
October 15, CMH filed Claim No. 16435 against EESI for the same
amount.
In separate objections, the Reorganized Debtors asked the Court
disallow the Claims. The Court disallowed Claim No. 16435.
Reorganized EESI and CMH now agree that the Court's order
disallowing Claim No. 16435 should be vacated.
Accordingly, in a Court-approved stipulation, EESI and CMH agree
that:
1. The Court's order disallowing Claim No. 16435 is vacated;
2. Claim No. 16435 will be allowed against EESI as an
unsecured claim for $500,000;
3. The allowed amount resolves Claim No. 16435 in its entirety
and the related objections; and
4. EESI and CMH will exchange releases.
Headquartered in Houston, Texas, Enron Corporation --
http://www.enron.com/-- is in the midst of restructuring various
businesses for distribution as ongoing companies to its creditors
and liquidating its remaining operations. Before the company
agreed to be acquired, controversy over accounting procedures had
caused Enron's stock price and credit rating to drop sharply.
Enron filed for chapter 11 protection on December 2, 2001 (Bankr.
S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the
Company's Modified Fifth Amended Plan on July 15, 2004, and
numerous appeals followed. The Confirmed Plan took effect on
Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen,
Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in
their restructuring efforts. (Enron Bankruptcy News, Issue No.
157; Bankruptcy Creditors' Service, Inc., 15/945-7000)
ESCHELON TELECOM: S&P Affirms Junk Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Minneapolis, Minnesota-based Eschelon Telecom Inc. to positive
from developing following the company's consummation of its
initial public offering, resulting in net proceeds of
$69.8 million, of which roughly $51 million will be used to
redeem the senior second secured notes due 2010. Additionally,
$63 million of preferred stock will be converted to common shares.
All ratings, including the company's 'CCC+' corporate credit
rating, were affirmed.
"The change in outlook is the result of lower pro forma leverage
of approximately 2.4x (2.7x on an operating lease adjusted basis),
compared to roughly 6.0x prior to the IPO," said Standard & Poor's
credit analyst Allyn Arden.
The ratings reflect the company's vulnerable business position
resulting from, among other factors, the highly competitive nature
of the competitive local exchange carrier business, including
substantial competition from the regional Bell operating
companies. Additionally, the ratings incorporate integration risk
associated with the acquisition of ATI, a CLEC serving small and
medium sized customers, and Eschelon's limited liquidity and
negative discretionary cash flow generation. Tempering factors
include the company's low cost structure and flexibility with
respect to capital spending. Pro forma total debt is
approximately $95 million.
EXCALIBUR IND: Soliciting Shareholder Votes on Restructuring
------------------------------------------------------------
Excalibur Industries, Inc., filed a proxy statement to the
Securities and Exchange Commission in connection with the
Company's proposed financial restructuring.
In a letter to be sent to shareholders in solicitation of their
votes on a number of restructuring transactions, Larry C. Shumate,
the Company's President and Chief Executive Officer, said that the
restructuring will result in a significant reduction of the
Company's outstanding debt and provide its with a strengthened
balance sheet and reduced debt servicing requirement.
The Company plans to complete the restructuring through its
recapitalization plan, which consists of the consensual exchange
of its existing debt for a combination of new debt and common
stock and its reacquisition of the capital stock of Shumate
Machine Works, Inc., its operating subsidiary. To effect the
recapitalization plan, the Company's stockholders must vote to:
(1) approve the terms of the recapitalization plan, including
the issuance of new shares of the Company's common stock in
the restructuring transactions;
(2) approve an amendment to the Company's certificate of
incorporation to effectuate a 1-for-7 reverse stock split
of its outstanding common stock;
(3) approve an amendment to its certificate of incorporation to
change the Company's name to Shumate Industries, Inc.; and
(4) approve the Company's 2005 Stock Incentive Plan and the
grant of restricted stock awards to its officers and
directors.
The Company also asking shareholders to elect certain directors.
The restructuring will significantly dilute the percentage of
outstanding stock owned by the Company's common stockholders, from
100% (before the restructuring) to 21% (following the
restructuring).
Mr. Shumate said that after numerous discussions with the
Company's secured lender, Stillwater National Bank, over the last
eighteen months, the proposed plan is the only adequate solution
for ensuring the continuing viability of the company. Without the
restructuring, Stillwater National Bank will foreclose on its
security interest in the Company's assets and force the Company to
liquidate and seek bankruptcy protection to which is likely to
result in the stockholders receiving nothing.
The proposed restructuring will be effected through an out-of-
court restructuring, or "recapitalization plan," which consists
of:
(1) an agreement to amend and restate a series of notes issued
to Stillwater National Bank, or Stillwater, into one term
note;
(2) an agreement to issue a new note to Stillwater for
settlement of an IRS lien;
(3) the extension of the Company's current line of credit with
Stillwater;
(4) the issuance of a convertible note to Stillwater;
(5) the issuance of a note to our Chief Financial Officer to
advance funds to purchase shares of the Company's common
stock for $250,000;
(6) the conversion of a portion of the Company's debt to
Stillwater into 20% of our then-outstanding common stock
after giving effect to the restructuring;
(7) the Company's reacquisition of the capital stock of its
operating subsidiary, Shumate Machine Works;
(8) a release from Stillwater for any indebtedness;
(9) the exchange of the Company's outstanding unsecured notes,
including principal and accrued interest, for its common
stock; and
(10) the grant of restricted stock awards to the Company's
executive officers, in return for their personal
guarantees on new bank debt, and to its non-employee
directors.
A full-text copy of the regulatory filing is available for free at
http://ResearchArchives.com/t/s?151
Excalibur Industries, Inc., serves the energy field services
market through its Shumate Machine Works operating subsidiary.
With its roots going back more than 25 years, Shumate is a
contract machining and manufacturing company that makes products,
parts, components, assemblies and sub-assemblies for its customers
designed to their specifications. The Company's state-of-the-art
3-D modeling software, computer numeric controlled machinery and
manufacturing expertise are contracted by its customers' research
and development, engineering and manufacturing departments to
ensure optimization and timely desired results for their products.
The diverse line of products Shumate manufactures includes
expandable tubular launchers and liner hangers for oil & gas field
service applications, blow-out preventers, top drive assemblies,
directional drilling products, natural gas measurement equipment,
control & check valves and sub-sea control equipment used in
energy field service. The Company employs about 35 people at its
23,000 square foot plant in Conroe, Texas, north of Houston.
As of June 30, 2005, Excalibur Industries' total liabilities
exceed its total assets by $14,128,939.
As reported in the Troubled Company Reporter on May 26, 2005,
Excalibur Industries entered into a restructuring agreement with
Stillwater National Bank, its secured lender. That loan is
secured by a pledge of 100% of Excalibur Holdings, Inc.'s stock in
Shumate Machine Works, Inc. Excalibur Holdings is a subsidiary of
Excalibur Industries, and filed a voluntary petition for
protection under Chapter 7 of the U.S. Bankruptcy Code (Bankr.
S.D. Tex. Case No. 05-33543) on March 9, 2005. Excalibur Holdings
is represented in its chapter 7 proceeding by:
Jean Petersen Sumers, Esq.
19901 Southwest Freeway
Sugar Land, TX 77479
Telephone (713) 850-7955
Fax (713) 850-8917
The Chapter 7 Trustee overseeing the liquidation of Excalibur
Holdings' estate is:
Kenneth R. Havis
114 N. 10th St.
P.O. Box 750
Navasota, TX 77868
Telephone (936) 825-7982
Stillwater, represented by:
Thomas S. Henderson, Esq.
Munsch Hardt Kopf & Harr, P.C.
700 Louisiana, Suite 4600
Houston, TX 77002-2732
Telephone (713) 222-1470
has obtained relief from the automatic stay in Excalibur Holdings'
chapter 7 case.
The United States Trustee will convene a meeting of Excalibur
Holdings' creditors under Sec. 341(a) of the Bankruptcy Code on
September 20, 2005, at 10:00 a.m., at 515 Rusk, Suite 3401, in
Houston, Texas.
G-FORCE 2002-1: Redeems All Outstanding Notes
---------------------------------------------
The entire capital structure of G-Force 2002-1 was paid in full
reflecting the total redemption of the outstanding notes as of the
Aug. 25, 2005 payment date.
These classes are paid in full:
-- Class A-1MM notes rated 'AAA'/'F1+';
-- Class A-2 notes rated 'AAA';
-- Class BFL notes rated 'AA';
-- Class BFX notes rated 'AA';
-- Class CFL notes rated 'A-';
-- Class CFX notes rated 'A-';
-- Class D notes rated 'BBB+';
-- Class E notes rated 'BBB';
-- Class F notes rated 'BBB-';
-- Class G notes rated 'BB';
-- Class H notes rated 'B'.
G-Force II was a collateralized debt obligation that closed on
June 20, 2002. The CDO was supported by a static portfolio
composed of commercial mortgage-backed securities and commercial
mortgage whole loans and was selected and monitored by G2
Opportunity GP, LLC.
Additional deal information and historical data are available on
the Fitch Ratings web site at http://www.fitchratings.com/ For
more information on the Fitch VECTOR Model, see 'Global Rating
Criteria for Collateralized Debt Obligations,' dated Sept. 13,
2004, also available at http://www.fitchratings.com/
GLASS GROUP: Has Until September 19 to Repay $38 Million Loan
-------------------------------------------------------------
Glass Group Inc. got a 19-day extension from its secured lender,
CapitalSource Finance LLC, in repaying a $38 million loan due on
August 31. The short extension will allow the bankrupt company
more time to find a buyer for all of its assets including the Flat
River Glass Factory in Park Hills, Missouri.
The Company asks the U.S. Bankruptcy Court for the District of
Delaware to approve an amended loan covenant that provides for the
extension.
In an auction on August 29, four competing bids were received and
rejected by Glass Group because none was large enough to payoff
the $38 million debt.
The Debtor's assets auctioned include:
1) Millville, New Jersey Facilities - The Millville
facilities include executive offices, a glass
manufacturing plant, a mold manufacturing plant and a
warehouse and distribution center.
The 58-acre glass manufacturing plant is equipped with
multiple melting furnaces for glass production and can
produce up to 195 tons of glass per day.
The 40,000 square feet mold manufacturing plant designs
and supplies the Debtor's manufacturing plants with molds
for production of its glass products.
The warehouse and distribution center, occupying
approximately 500,000 square feet in two buildings,
stores and coordinates the Debtor's products to its
costumers.
2) Park Hills, Missouri Facility - The Flat River facility
houses a glass manufacturing plant occupying
approximately 375,000 square feet situated on 44 acres.
The facility is equipped with melting furnaces for glass
production and can produce up to 215 tons of glass per
day.
3) Mays Landing, New Jersey Facility - The leased Mays
Landing facility is comprised of a decorating and coating
plant, which occupies approximately 175,000 square feet
on approximately 28 acres.
4) Williamstown, New Jersey Facility - Williamstown facility
is comprised of a decorating plant, which occupies
approximately 65,000 square feet on approximately 30
acres. The facility is equipped with new spray guns,
pressure sensitive labeling machines, high speed round
screen printers, a high speed round screening machine and
Lehr burners and controls.
The facility' capabilities include: Research and
Development, sampling, acid frosting, assembly, ceramic
screening, Type II S02 treatment, precious metals
screening and PVC plastic coating.
5) Beijing Joint Venture Facility - The Beijing Wheaton
Glass Company in China has a layout similar to the Flat
River facility. It is equipped with multiple melting
furnaces and six production lines. The facility's
capabilities include glass manufacturing and decorating.
CapitalSource has previously filed a motion with the Bankruptcy
Court asking to shut down Glass Groups' operations and liquidate
the company. The lender's motion has not been withdrawn despite
the amended loan covenant.
Headquartered in Millville, New Jersey, The Glass Group, Inc.
-- http://www.theglassgroup.com/-- manufactures molded glass
container and specialty products with plants in New Jersey and
Missouri. Its products include cosmetic bottles, pharmaceutical
vials, specialty jars, and coated containers. The Company filed
for chapter 11 protection on Feb. 28, 2005 (Bankr. D. Del. Case
No. 05-10532). Derek C. Abbott, Esq., at Morris, Nichols, Arsht &
Tunnell represents the Debtor in its restructuring efforts. When
the Debtor filed for protection from its creditors, it estimated
assets and debts of $50 million to $100 million.
GOODYEAR TIRE: Registers $350-Mil Convertible Notes for Resale
--------------------------------------------------------------
Goodyear Tire & Rubber Company filed a Registration Statement to
the Securities and Exchange Commission for the resale of
$350 million of 4.00% convertible senior notes due June 15, 2034,
and shares of its common stock into which the notes are
convertible.
The registered convertible notes are owned by:
Selling Noteholders Notes Amount No. of Shares
-------------------- ------------ -------------
Alpine Associates $5,181,000 430,387
Alpine Partners, L.P. 710,000 58,979
American Beacon Funds 225,000 18,690
Aristeia International Limited 14,350,000 1,192,058
Aristeia Trading LLC 3,150,000 261,671
Arkansas Teacher Retirement 3,525,000 292,822
Aventis Pension Master Trust 280,000 23,260
Baptist Health of South Florida 630,000 52,334
Boilermakers - Blacksmith Pension
Trust 1,800,000 149,527
BNP Paribas Equity Strategies SNC 5,267,000 437,531
CALAMOS Convertible Fund
CALAMOS Investment Trust 10,400,000 863,931
CALAMOS Growth & Income Fund
CALAMOS Investment Trust 32,000,000 2,658,250
CALAMOS Global Growth & Income
Fund - CALAMOS Investment Trust 1,450,000 120,452
CALAMOS Growth & Income Portfolio
CALAMOS Advisors Trust 230,000 19,106
CALAMOS Market Neutral Fund
CALAMOS Investment Trust 8,000,000 664,562
The California Wellness Foundation 400,000 33,228
Canadian Imperial Holdings Inc. 1,000,000 83,070
CEMEX Pension Plan 115,000 9,553
Citigroup Global Markets Inc. 2,258,000 187,572
The Company will not receive any proceeds from the resale of the
notes or the shares of common stock.
The notes will mature on June 15, 2034. Noteholders may convert
the notes into shares of the Company's common stock at a
conversion rate of 83.0703 shares of common stock per $1,000
principal amount of notes, which is equivalent to a conversion
price of approximately $12.04 per share.
The Company will pay interest on the notes on June 15 and December
15 of each year. The notes will be issued only in denominations
of $1,000 and integral multiples of $1,000.
On or after June 20, 2008, the Company has the option to redeem
all or a portion of the notes that have not been previously
converted at redemption prices set forth in this prospectus.
The notes are senior, unsecured obligations that rank equally with
our existing and future unsecured and unsubordinated indebtedness.
Prior to this offering, the notes have been eligible for trading
on The PORTALsm Market of the National Association of Securities
Dealers, Inc. Notes sold by means of this prospectus are not
expected to remain eligible for trading on The PORTALsm Market.
The Company does not intend to list the notes for trading on any
national securities exchange or on the Nasdaq Stock Market.
The Company's common stock trades on the New York Stock Exchange
under the symbol "GT." August trading for the shares reached a
closing price as high as $18.49. Share price now fluctuates on
the $16 level.
A full-text copy of the Registration Statement is available for
free at http://ResearchArchives.com/t/s?150
The Goodyear Tire & Rubber Company (NYSE: GT) is the world's
largest tire company. Headquartered in Akron, Ohio, the company
manufactures tires, engineered rubber products and chemicals in
more than 90 facilities in 28 countries. It has marketing
operations in almost every country around the world. Goodyear
employs more than 80,000 people worldwide.
* * *
As reported in the Troubled Company Reporter on June 23, 2005,
Fitch Ratings has assigned an indicative rating of 'CCC+' to
Goodyear Tire & Rubber Company's (GT) planned $400 million issue
of senior unsecured notes.
GT intends to issue $400 million of 10-year notes under Rule 144A.
Proceeds will be used to repay $200 million outstanding under the
company's first lien revolving credit facility and to replace
$190 million of cash balances that were used to pay $516 million
of 6.375% Euro notes that matured June 6, 2005. The Rating
Outlook is Stable.
The rating reflects the substantial amount of senior secured debt
relative to the planned notes. It also incorporates Fitch's
concerns about GT's high leverage, high-cost structure, and weak
profitability and cash flow. In addition, GT's pension plans,
which were underfunded by $3.1 billion at the end of 2004, are
likely to require substantially higher contributions over the near
term.
INTEGRATED HEALTH: Court Extends Removal Period to December 5
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted the
IHS Liquidating LLC's request to extend the period within which it
may file notices of removal with respect to civil actions pending
on the chapter 11 filing, through and including December 5, 2005.
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, says IHS Liquidating has already resolved
many of the disputed claims against the IHS Debtors through the
claims reconciliation process. However, IHS Liquidating
anticipates that removal may be appropriate with respect to
certain unresolved Prepetition Actions. Thus, IHS Liquidating
wants to preserve its right to seek removal until it complete its
analysis of the Prepetition Actions.
Integrated Health Services, Inc. -- http://www.ihs-inc.com/--
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states. The Company and its
437 debtor-affiliates filed for chapter 11 protection on
February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002. Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors. On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts. (Integrated Health Bankruptcy News, Issue
No. 95; Bankruptcy Creditors' Service, Inc., 215/945-7000)
INTERSTATE BAKERIES: 246 Creditors Transfer $25.3-Mil Trade Claims
------------------------------------------------------------------
From March 31 to June 1, 2005, the Clerk of the U.S. Bankruptcy
Court for the Western District of Missouri recorded 246 claim
transfers to:
(a) 3V Capital Master Fund Ltd.
Creditor Claim Amount
-------- ------------
EPS $53,075
Erie Foods International 63,655
Geiler Company 22,329
Green Mountain Energy Co. 22,929
Just Great Bakers, Inc. 21,379
Lifeline Foods 20,518
Mike Sells Potato Chips Company 12,941
Phila Coca Cola Bottling Co. 10,878
Sig Stewart Systems 38,330
(b) Fair Harbor Capital, LLC
Creditor Claim Amount
-------- ------------
Bi Rite Supermarket $800
Charlies Trailer Sales 642
City of Garden City 508
Data System, Inc. 519
Meco, Inc. 631
Mell Moss 668
Pepsi Cola Bottling Co. 780
Terminal Supply Company 2,751
Vernon Associates, Inc. 571
Wholesale Tire Distributors 1,110
(c) Debt Acquisition Company of America V, LLC
Creditor Claim Amount
-------- ------------
@Road, Inc. $3,566
Action Electric Corp. 65
Adelaide Inn 863
Advance Lock Service 170
Advance Monitoring Svc 766
AFI Automotive & Muffler 60
Airduct Cleaning Service 590
Alpha Electric 67
Alpha Reporting Corp. 1,090
Amazingly Clean by Jay Gegner LLC 161
Ameri-Clean 220
American Fire & Security 153
AMPM Door, Inc. 919
ARC Glass 437
Art Ceballes & Sons Janitorial Services 320
A to Z Lock & Key 88
Auto Glass Express 275
Automotive Parts Express, Inc. 604
B & L Alternator & Automotive 100
B-O-F Corporation 304
Barker Muffler Service, Inc. 186
Barrier Protection System, Inc. 140
BDC Enterprises 53
Best Western Royal Inn 2,048
Better Choice Heating & Air Conditioning 173
Boonville Daily News 299
Bubba Green Towing 55
Buchanan Auto Electric, Inc. 467
Burbank Auto Parts, Inc. 63
Business Machine Company 640
Butners Country Mart 200
C&L Gates Service 277
Carolina Communications, Inc. 97
Charlies Day & Nite, Inc. 225
City Pages 897
CK Towing, Inc. 350
Climate Air, Inc. 374
Copley Ohio Newspapers 2,013
Cross Island Window Cleaning 571
Daniel Gregory Bobbitt 280
Dans Overhead Doors 1 387
Days Inn of Natchez 1,558
Diesel Plus LLC 535
Domestic Refrigeration Air Conditioning 193
Dorman Associates, Inc. 985
Drake Supply Company 1,470
E & M Lighting 522
Earth Protection Services, Inc. 668
Edwards Buds Lawn Service 390
Edwards Engineering, Inc. 2,911
FDN Communications 893
Federal Cleaning 56
Fleet Equipment 174
Four Seasons Janitorial 1,038
FSI-Central Kentucky 85
Galles Filter Acct4062484800 757
Gemini Traffic Sales, Inc. 970
Gibson Propane, Inc. 125
Green Guard First Aid & Safety 1,733
Greenlion Lawncare 210
H & H Wheel Service 1,899
Hazen Landscape Services 1,690
Healthy Living News 361
Heartland Inn 398
Heartland Inn-Altoona 231
Heartland Inn Clive 58
Heritage Propane 86
Holders 561
Imperial Coffee Service 235
Integrated Supply of Columbus 4,518
Interstate Battery Systems of Houston 989
Interstate Pest Control, Inc. 200
Jean Pope 126
Jeffco Fire Extinguisher Service 117
Kelly Communications, Inc. 1,800
Klistoff & Sons, Inc. 3,333
Knox Trailers, Inc. 590
Kryger Glass Company 453
Lech Garage & Auto Body Shop, Inc. 203
LM Robbins Co., Inc. 128
Manderfeld Trucking 668
Melissa Johnson 65
Mikes Wrecker Service 1,025
Modern Disposal Svc., Inc. 394
Morris Levin & Son 1,382
Mountain Scales, Inc. 194
Munro Distrib Co., Inc. 98
Natural Concepts Landscaping 265
News Tribune 672
Northwestern Parts Washer, Inc. 241
Northwest Roller Company 72
Oars Computer 337
Oil Changers 228
Old River Volvo 160
Polar Supply Corp. 621
Potomac Farms Dairy 1,701
Prime Controls Co. 181
Quikprint 393
R & S Sales & Service 370
Ralph Deramo Cleaning Services 75
Redwines Salvage Sales, Inc. 150
Regional Supply, Inc. 84
River City Maintenance, Inc. 445
Riversun Pressure Washing 225
Ronald Pena 70
Rons Iga 750
Rosannes Catering 107
RRR 005320-SB_39S047 259
Rubens Fleet Service 85
Rusiniaks Towing, Inc. 390
Sharp Overhead Door 225
Sign Works 535
Smith Florist 234
Southern Indiana Parts, Inc. 322
Superglass Windshield Repair 99
Temperature Service Co. 205
Texas Refinery Corp. 2,226
The Kar Salon 199
Ultra Seating Co., Inc. 530
United Building Services of Indiana 250
Utah Tile & Stone 450
Whiteys Towing, Inc. 205
Wilkinson Outdoor Maintenance 960
WRVEC 227720_10D017 85
Yarde Metals 1,140
Z-Specialty Products 1,199
(d) Deutsche Bank Securities, Inc.
Creditor Claim Amount
-------- ------------
American Yeast Corp. $1,679,236
Bartlett Milling Company LP 2,428,230
Bunge Milling, Inc. 6,154
Bunge North America (East), LLC 1,198,203
Bunge North America, Inc. 166,754
Bunge Oils, Inc. 103,529
General Mills, Inc. 314,100
North America (OPD West), Inc. 172,526
(e) Freestyle Fund Management Company LLC
Creditor Claim Amount
-------- ------------
Groeb Farms, Inc. $333,378
(f) Longacre Master Fund, Ltd.
Creditor Claim Amount
-------- ------------
Agvest, Inc. $70,992
Deutsche Bank Securities, Inc. 1,679,236
Ed Miniat, Inc. 11,779,024
MSC Industrial Supply 279,852
Network Services Company 58,045
Niagara Foods, Inc. 22,579
Premium Food Sales, Inc. 152,416
Service Warehouse Corporation 1,759,057
(g) Madison Liquidity Investors 123, LLC
Creditor Claim Amount
-------- ------------
Adams Outdoor Advertising $5,750
Agricultural Express, Inc. 2,450
Airgas Cardonic, Inc. 70,339
Airgas Dry Ice G2396 12,593
Airgas East 11,744
Airgas Great Lakes 20
Airgas Intermountain 352
Airgas Mid America 182
Airgas Mid South 379
Airgas NCN 2,911
Airgas Norpac 274
Airgas North Central 603
Airgas Safety 137
Airgas South 193
Airgas West 533
Ameripride Uniform Service 2,817
Atlantic Scale Co., Inc. 4,685
B & W Machine 7,211
Best Western Grosvenor Hotel 2,221
Better Made North 4,837
Better Made Potato Chips 62,256
California Caster & Handtruck Co. 1,674
Calvert-Jones Co., Inc. 8,626
C & R Ice 1,206
Consolidated Restoration Sparkle 7,209
Cummins Bridgeway 2,559
Domino Amjet 19,910
Edict Systems 1,443
Elkin Valley C-J-D 2,728
Empire Truck & Trailer Sales 2,693
Halcyon Fund, LP 172,987
Hill Truck Sales, Inc. 1,975
Industrial Razor 2,019
Jack Josephs Coupons 2,800
Jeff Bauer d/b/a Bauer Construction 24,374
K & K Metal 23,422
KCS Plastics 95,962
Kontos Foods, Inc. 6,404
Lansing Community Newspapers 2,747
Made Rite Potato Chip Company 158
Madison Liquidity Investors 129, LLC 870,502
Mill Supply 92,267
Peerless Machinery 33,342
Power Baking Co. 18,431
Process Technologies, Inc. 3,677
Puratos 59,204
Puratos Corporation 8,574
Refreshment Services Pepsi 7,989
Ronald Lee Barnes Splash 1,342
Rose Paving Co. 2,250
Scales Air Compressors 27,198
Shick Tube-Veyor Corp. 3,588
Sunshine Pain & Body 3,407
T & M Plex 36,000
Transport Spring & Suspension 1,972
Turner Dairy 8,988
United Mobile Power Wash 4,629
Virginia Truck Center 1,474
Vortex Industries 1,254
William Tatz Industries 12,150
(h) Madison Liquidity Investors 129, LLC
Creditor Claim Amount
-------- ------------
Madison Liquidity Investors $142,519
123, LLC
(i) Revenue Management
Creditor Claim Amount
-------- ------------
Hunt CR, Inc. $5,156
Interstate Bakeries Corporation 6,795
Kaman Industrial 336,000
North Omaha Auto & Storage Co. 6,795
(j) Sierra Liquidity Fund
Creditor Claim Amount
-------- ------------
Allied Material Handling $2,396
Baymont Inn & Suites 1,398
Bernardino's Bakery 2,466
Bragwells Alignment Service 5,106
Capway Systems, Inc. 6,966
Cintas First Aid & Safety 2,541
Des Moines Mobile Wash, Inc. 1,193
Fleet Acquisitions, LLC 6,058
Gerard J. Morano 1,028
Jims Autobody & Refinishing, Inc. 4,629
Terminal Railroad Assoc. of St. Louis 9,110
Utilimaster Corporation 26,041
(k) Stark Event Trading Ltd.
Creditor Claim Amount
-------- ------------
DH Associates $39,703
Fuchs 36,408
International Flavors & Fragrances 73,691
Master Packaging 302,582
Opta Food Ingredients, Inc. 155,419
Rair Technologies LLC 86,224
Sam Hill Oil, Inc. 40,743
(l) Trade-Debt.net
Creditor Claim Amount
-------- ------------
Engraving Thoughts $825
Keystone Unlimited 148
Perma Vault Safe Co. 633
Roush Plumbing & Heating 150
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. 25; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ISLE OF CAPRI: S&P Places B+ Debt Ratings on Negative CreditWatch
-----------------------------------------------------------------
As a result of its ongoing evaluation of the impact of Hurricane
Katrina on U.S. gaming operators, Standard & Poor's Ratings
Services placed its ratings for Isle of Capri Casinos Inc. (Isle;
BB-/Watch Neg/--) on CreditWatch with negative implications. The
ratings for Isle of Capri Black Hawk LLC (B+/Stable/--), a 57%
unrestricted subsidiary of Isle, were affirmed. At the same time,
Standard & Poor's revised the outlook for Pinnacle Entertainment
Inc. (B+/Stable/--) to stable from positive. The rating actions
followed Standard & Poor's placement of its ratings for Premier
Entertainment Biloxi LLC (B-/Watch Neg/--) on CreditWatch with
negative implications on Aug. 29, 2005.
"The CreditWatch listing for Isle of Capri reflects the
expectation that credit measures, which have been weak for the
ratings, will decline further as a result of the extensive damage
affecting its Biloxi, Miss., property," said Standard & Poor's
credit analyst Peggy P. Hwan.
While Isle-Biloxi represents only about 7% of the company's cash
flow, debt to EBITDA was 5.7x for the 12 months ended July 24,
2005, and this measure is expected to rise to the mid-6x area over
time, given the loss of the Biloxi property and after factoring in
the multiple growth initiatives planned by Isle in the next few
years. While Standard & Poor's anticipates that Isle will recover
a substantial sum through its various insurance policies, the
precise amounts and the timing of these recoveries cannot be
determined at this time.
In resolving the CreditWatch listing, Standard & Poor's will
assess the timing and level of future capital spending,
anticipated insurance recoveries, and the impact that these items
will have on the company's credit measures. Standard & Poor's has
determined that if a downgrade were to occur, it would be limited
to one notch.
"The outlook revision for Pinnacle reflects the damage experienced
at its two Gulf Coast properties, which is likely to extend the
time frame under which we consider an upgrade of the company's
ratings," said Standard & Poor's credit analyst Michael Scerbo.
Pinnacle owns casinos in Biloxi, Mississippi; and New Orleans,
Louisiana, which together account for approximately 30% of the
company's pro forma consolidated EBITDA when including S&P's
estimate for a full year's contribution from the recently opened
Lake Charles, Louisiana asset. Standard & Poor's had previously
expected that, despite the company embarking on an aggressive
period of capital spending over the next few years associated with
its two St. Louis, Missouri developments, credit measures would
improve and be maintained at a level that would be appropriate for
a higher rating during this period.
An outlook revision back to positive could be considered if the
amount and timing of insurance recoveries, when considered in
conjunction with rebuilding plans, supports Pinnacle's ability to
maintain total debt to EBITDA in the 5x area. At this time, S&P
does not expect to change the ratings or outlooks of other gaming
companies as a result of Hurricane Katrina unless there is a
material change in the information emerging from the region.
Other rated gaming companies with exposure to the affected region
either have sufficient diversity to mitigate the impact to their
Gulf Coast properties, or have adequate cushion in their credit
measures to absorb a decline in earnings within the constraints of
their current ratings and outlooks.
It is generally anticipated that property damage insurance
recoveries will be substantial and will fund a significant portion
of the rated companies' rebuilding plans in the area, although it
is possible that more significant, perhaps land-based, facilities
will be constructed that exceed the proceeds from insurance
arrangements. At least several months are likely to pass before
this can be clearly assessed. The timing and amount of payments
under business interruption policies are more difficult to
predict, but clearly, material payments will be made under these
policies. It remains to be seen whether such payments will fully
offset lost earnings from the casinos, particularly if the
rebuilding process is extended because of the meaningful
infrastructure cleanup and repairs that are required in the
region.
KINETIC SPORTS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Kinetic Sports, Inc.
675 New Country Road
Secaucus, New Jersey 07094
Bankruptcy Case No.: 05-38276
Chapter 11 Petition Date: September 1, 2005
Court: District of New Jersey (Newark)
Debtor's Counsel: Stephen Ravin, Esq.
Ravin Greenberg PC
101 Eisenhower Parkway
Roseland, New Jersey 07068-1028
Tel: (973) 226-1500
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Kingswank Investment Ltd. $498,161
46 Belcher's Street
Room 14, Ground Floor
Kennedy Town, Hong Kong
Etonic Worldwide $75,000
260 Charles Street
Waltham, MA 02453
Kevin Leonard $5,436
13807 Village Mill Drive, Suite 104
Midlothian, VA 23236
REM Corp $4,913
519 Falcon Points Drive
New Hope, PA 18938
Attn: Ronald E. Moore
SAI Middlesex Farms LD $2,851
UPS $2,611
Mike Gilroy $2,124
Applied Dynamic Solutions LLC $1,525
Dave Stuckey $1,490
Mike Mikulecky $1,061
Tom Webster $560
Glenn Ikeda $379
Jim Heckard $295
Jerry Wall $248
Federal Express $172
John Kempf $133
Pitney Bowes, Inc. $82
Poland Spring Water Company $43
Danny Kass $43
Bill Claussen $41
KMART CORP: Settles Dispute Over Waterbury's Claims for $1.8-Mil
----------------------------------------------------------------
Waterbury Garment Corp. received distribution on account of its
allowed claims against Kmart Corporation:
Claim No. Asserted Amount Resolved Amount
--------- --------------- ---------------
23568 $722,656 $714,573
23569 274,915 182,453
23575 892,532 592,346
Waterbury disputed the resolution of its Claims. Thus, at
Waterbury's request, the U.S. Bankruptcy Court for the Northern
District of Illinois vacated its prior order reducing and allowing
Claim Nos. 23575 and 23569. Kmart agreed to rescind the
settlement agreement resolving Claim No. 23568.
After further negotiations, the parties agree that:
(i) the Claims will be allowed as Class 5 claims in these full
and final amounts:
Claim No. Allowed Amount
--------- --------------
23568 $690,000
23569 260,000
23575 850,000
(ii) any previous distribution on account of the Waterbury
Claims will be subtracted from the distributions related
to their recent agreement.
Judge Sonderby approves the stipulation.
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam. The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474). Kmart emerged from chapter 11 protection on May 6,
2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts. The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection. Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues. The
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act expired on Jan. 27, without complaint by the Department of
Justice. (Kmart Bankruptcy News, Issue No. 101; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
KMART CORP: Wants FLOORgraphics Revised Confidentiality Pact OK'd
-----------------------------------------------------------------
William J. Barrett, Esq., at Barack Ferrazzano Kirschbaum Perlman
& Nagelberg LLP, in Chicago, Illinois, relates that over the
course of the litigation of Kmart Corporation's objection to
FLOORgraphics, Inc.'s claim and the related litigation concerning
the rejection of the parties' contract, the parties have exchanged
information that they believe is proprietary and should be held in
confidence.
Subsequently, the U.S. Bankruptcy Court for the Northern District
of Illinois entered:
(a) a Confidentiality Agreement and Protective Order, dated
March 21, 2002;
(b) an Agreed Order dated January 11, 2005, regarding the
disclosure of documents in connection with:
-- the bankruptcy proceeding involving FLOORgraphics'
claims against Kmart; and
-- the civil action commenced by FLOORgraphics against
News America Marketing In-Store Services, Inc., now
pending in the United States District Court for the
District of New Jersey; and
(c) an order dated May 12, 2005, allowing Kmart's reply brief
in support of its summary judgment motion in the contested
matter to be filed under seal.
In anticipation of the continued exchange and use of proprietary
information, the parties wish to restate all prior protective
orders and confidentiality agreements.
Accordingly, Kmart, FLOORgraphics and NAMIS ask the Court to
approve a Revised Confidentiality Agreement and Protective Order
regarding FLOORgraphics' claim.
The Revised Protective Order reflects some of the changed
circumstances since the entry of the first order in 2002, and
avoids further orders or confusion as to what orders or provisions
of orders still apply.
Nothing in the Revised Protective Order, however, entitles any
party to use classified information for any purpose other than in
the Kmart Litigation or the New Jersey Litigation.
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam. The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474). Kmart emerged from chapter 11 protection on May 6,
2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts. The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection. Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues. The
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act expired on Jan. 27, without complaint by the Department of
Justice. (Kmart Bankruptcy News, Issue No. 101; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LORAL SPACE: Equity Committee Can't File Avoidance Action Suit
--------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York denied the request of the Official
Committee of Equity Security Holders of Loral Space &
Communications, Ltd., and its debtor-affiliates to pursue
fraudulent conveyance causes of action resulting from a guaranty
extended by Loral Space for certain public-debt obligations owed
by its wholly-owned subsidiary Loral Orion, Inc.
Orion's Unsecured Debt
Prior to its acquisition by Loral Space, Orion had issued two
series of unsecured notes:
a) the 11.25% Senior Notes, due 2006, in the principal amount
of $443 million; and
b) the 12.5% Senior Discount Notes, due 2007, in the
principal amount of $484 million.
Mounting financial difficulties led Orion to refinance these debts
through an exchange offer in 2001. The exchange offer gave note
holders the chance to trade their old notes for new 10% senior
notes due in 2006 plus warrants to purchase common shares of Loral
Space. Loral Space served as guarantor for the new 10% senior
notes issued.
Not all noteholders tendered their notes and approximately
$37 million of the senior notes and $49 million of the discount
notes remained outstanding when the exchange offer closed. As of
the petition date, the Debtors owed approximately $90 million from
the outstanding old notes and $643 million from the new 10% senior
notes.
Fraudulent Conveyance
In its motion to commence an adversary proceeding, the Equity
Committee told Judge Drain that the guaranty issuance was a
fraudulent conveyance because it exposed Loral Space to added
substantial liabilities without receiving any equivalent benefit
for its creditors and equity holders.
The Equity Committee says that Loral Space proceeded to guarantee
the new notes despite knowledge of Orion's insolvency at the time
of the exchange offer. By making the guarantee, the Equity
Committee claims that the Debtors had misallocated the collective
equity value of their other operating subsidiaries.
The Equity Committee claims that the guarantee spreads Orion's
obligations to the creditors and equity holders of Loral Space and
its subsidiaries. Because Orion was insolvent at the time of the
exchange offer and had little chance of paying its debts, the
Equity Committee alleges that Loral Space had, in effect, assumed
all the obligations under the 10% notes. The Equity Committee
says the added debt burden precipitated Loral Space's own
insolvency.
Debtors & Creditors Committee
Refuse to Take Action
The Equity Committee states that the Debtor and the Official
Committee of Unsecured Creditors' refusal to pursue the probable
fraudulent conveyance claim is unjustifiable because a favorable
judgment presents substantial benefit to the Debtors' estates by
reducing hundreds of million of dollars in claims against Loral
Space.
Pursuant to the Bankruptcy Court's order disallowing the proposed
fraudulent conveyance causes of action, the Equity Committees'
complaint (Adversary Proceeding No. 05-02309) is also dismissed
with prejudice. The Bankruptcy Court previously allowed the
Equity Committee to file the complaint solely for the purpose of
preserving the statute of limitations imposed by section 546(a) of
the Bankruptcy Code.
The confidential transcripts of several hearings held in relation
to the Equity Committee's motion are available for viewing, during
regular court hours, at:
U.S. Bankruptcy Court
Southern District of New York
One Bowling Green, Room 511
New York, New York 10004-1408
Copies of these transcripts may also be purchased from:
Veritext, LLC
200 Old Country Road, Suite 260
Mineola, New York 11501
Phone: (212) 867-8228 and (212) 374-1138
Loral Space & Communications -- http://www.loral.com/-- is a
satellite communications company. It owns and operates a fleet of
telecommunications satellites used to broadcast video
entertainment programming, distribute broadband data, and provide
access to Internet services and other value-added communications
services. Loral also is a world-class leader in the design and
manufacture of satellites and satellite systems for commercial and
government applications including direct-to-home television,
broadband communications, wireless telephony, weather monitoring
and air traffic management.
The Company and various affiliates filed for chapter 11 protection
(Bankr. S.D.N.Y. Case No. 03-41710) on July 15, 2003. Stephen
Karotkin, Esq., and Lori R. Fife, Esq., at Weil, Gotshal & Manges
LLP, represent the Debtors in their restructuring efforts. When
the company filed for bankruptcy, it listed total assets of
$2,654,000,000 and total debts of $3,061,000,000.
LUCENT TECHNOLOGIES: Gets $902 Million Refund & Interest from IRS
-----------------------------------------------------------------
Michael C. Keefe, Lucent Technologies Inc.'s Law Vice President
for Corporate and Assistant Secretary informed the Securities and
Exchange Commission in a regulatory filing that it received
$902 million, on August 30, 2005, from the Internal Revenue
Service comprised of:
* a $816 million tax refund, and
* interest of approximately $86 million.
The refund was allowed by the Congressional Joint Committee on
Taxation in its approval with Lucent's tentative agreement with
IRS.
Headquartered in Murray Hill, New Jersey, Lucent Technologies --
http://www.lucent.com/-- designs and delivers the systems,
services and software that drive next-generation communications
networks. Backed by Bell Labs research and development, Lucent
uses its strengths in mobility, optical, software, data and voice
networking technologies, as well as services, to create new
revenue-generating opportunities for its customers, while enabling
them to quickly deploy and better manage their networks. Lucent's
customer base includes communications service providers,
governments and enterprises worldwide.
* * *
As reported in the Troubled Company Reporter on May 19, 2005,
Moody's Investors Service raised the senior implied debt rating of
Lucent Technologies Inc. to B1 from B2 and affirmed the SGL-2
short term ratings. The rating outlook is positive.
Ratings upgraded include:
* Senior implied rating to B1 from B2;
* Senior unsecured to B1 from B2;
* Subordinated rating to B3 from Caa1; and
* Trust preferred securities to B3 from Caa1.
The rating action reflects:
* Lucent's continued stabilization of its revenue base;
* sustained improvement in profitability;
* sufficient internal liquidity to fund operations over the
intermediate term;
* prospects for cash flow generation; and
* modest return of carrier capital spending, particularly in
wireless technologies.
MARK STEWART: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtors: Mark Steven Stewart and Jennifer Barefield Stewart
5100 Crestline Road
Fort Worth, Texas 76107
Bankruptcy Case No.: 05-49131
Chapter 11 Petition Date: September 2, 2005
Court: Northern District of Texas (Ft. Worth)
Judge: D. Michael Lynn
Debtors' Counsel: Mark S. Stewart, Esq.
Law Offices of Mark S. Stewart & Associates, P.C
1115 West Lancaster
Fort Worth, Texas 76102
Tel: (817) 338-4004
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtors did not file a list of their 20 largest unsecured
creditors.
MARROCCO ENTERPRISES: Case Summary & 7 Largest Unsec. Creditors
---------------------------------------------------------------
Debtor: Marrocco Enterprises Texas, L.P.
2504 Live Oak, Suite 204
Dallas, Texas 75204
Bankruptcy Case No.: 05-49061
Chapter 11 Petition Date: September 2, 2005
Court: Northern District of Texas (Ft. Worth)
Judge: Russell F. Nelms
Debtor's Counsel: Eric A. Liepins, Esq.
Eric A. Liepins, P.C.
12770 Coit Road, Suite 1100
Dallas, Texas 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 7 Known Creditors:
Entity Claim Amount
------ ------------
Banker Equipment Unknown
5431 Gregg Street
Dallas, TX 75235
Community Bank Unknown
P.O. Box 489
Burleson, TX 76097
Fleming Sign Unknown
4716 McNutt
Haltom City, TX 76117
Handy and Morgan Unknown
1409 Precinct Line Road
Hurst, TX 76053
Real Estate Tax Consultant Unknown
3325 Silverstone Drive
Plano, TX 75023
Southwest Bank Unknown
P.O. Box 962020
Fort Worth, TX 76162
Wever and Tidwell Unknown
[Address not Provided]
MCMILLIN COS: S&P Puts Corporate Credit Ratings on Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its corporate credit and
senior secured debt ratings on McMillin Cos. LLC on CreditWatch
with negative implications.
The CreditWatch placements follow McMillin's submission of its
audited 2004 financials, which contain a qualified opinion from
its current auditor, McGladrey & Pullen LLP. McGladrey was
engaged in 2004 to replace KPMG LLP. The delay in the release of
the financials and the qualified opinion both are attributed to a
dispute over certain accounting issues, which are related to the
timing of profits recorded on transactions with affiliated joint
ventures as well as the method in which equity in earnings from
joint ventures is recognized.
The CreditWatch placements reflect uncertainty as to how and when
the accounting issues that resulted in the qualified opinion will
be resolved. McMillin may concede to McGladrey's opinion on these
matters, or it could possibly engage a new auditor. Engaging a
new auditor would result in an entirely new audit, which would
consume additional company resources. Furthermore, a new auditor
could ultimately concur with McGladrey, and it is also possible
that other accounting issues or disagreements could arise.
It should be noted that McMillin has not altered its accounting
policies from prior years, when it received unqualified opinions,
and any changes based on McGladrey's opinion would not affect cash
flow, only the timing of profits recognized and the recognition of
equity in earnings from joint ventures for GAAP purposes.
Furthermore, the impact of any changes would not result in bond
or bank violations.
Ratings placed on creditwatch negative:
McMillin Cos. LLC:
Rating
To From
-- ----
Corporate credit B+/Watch Neg/-- B+/Stable/--
Senior secured B-/Watch Neg B-
METABOLIFE INT: Wants Lease Decision Period Stretched to Nov. 30
----------------------------------------------------------------
Metabolife International, Inc., and its subsidiary, Alpine Health
Products, LLC, asks the U.S. Bankruptcy Court for the Southern
District of California to extend, until Nov. 30, 2005, the period
within which they can elect to assume, assume and assign or reject
three unexpired leases on non-residential real property.
The Debtors tell the Bankruptcy Court that they need the leased
premises until the expected closing of the proposed sale of
substantially all of their assets to IdeaSphere, Inc., in
September.
As previously reported in the Troubled Company Reporter,
IdeaSphere has offered to buy the Debtors' business for $23.5
million. IdeaSphere's offer is subject to competitive bidding at
an auction on September 19, 2005. The key assets being acquired
include:
-- the company's core non-ephedra brands, Metabolife Ultra,
Metabolife Complete, Metabolife Ultra Caffeine Free and
Metabolife Green Tea Formula;
-- a state-of-the-art powder and tablet manufacturing facility
located in Orem, Utah; and
-- a distribution center in Memphis.
IdeaSphere, and other potential acquirers, will analyze these
unexpired real property leases to determine which, if any, they
would like to assume:
1) Net Lease between Farnsworth Farms One and Metabolife
International for a warehouse and distribution center in
Memphis, Tennessee. The Debtors rent the space for
$20,825 per month. The lease expires on July 31, 2007.
2) Sublease Agreement between Humco Holding Group, Inc., and
Alpine Health for a manufacturing facility in Orem, Utah.
The Debtors rent the space for $32,773 per month. The
lease expires on Feb. 28, 2016.
3) Lease Agreement between M. Scott Fisher Property #1, LLC,
and Alpine Health Products, LLC, for a warehouse in Orem,
Utah. The Debtors rent the space for $13,295 per month. The
lease expires on Sept. 24, 2005.
The Debtors also ask the Bankruptcy Court to allow their
assumption of a Standard Sublease Multi-Tenant Agreement between
Tapestry Solutions, Inc., and Metabolife International for office
space in San Diego, California. Metabolife has prepaid the
$12,000 monthly rental for the space until the lease expires at
the end of October.
Headquartered in San Diego, California, Metabolife International,
Inc. -- http://www.metabolife.com/-- sells dietary supplements
and management products in grocery, drug and mass retail locations
nationwide. The Company and its subsidiary, Alpine Health
Products, LLC, filed for chapter 11 protection on June 30, 2005
(Jointly Administrated Under Bankr. S.D. Calif. Case No.
05-06040). David L. Osias, Esq., and Deb Riley, Esq., at Allen
Matkins Leck Gamble & Mallory LLP, represent the Debtors in their
chapter 11 cases. When the Debtors filed for protection from
their creditors, they listed $23,983,112 in total assets and
$12,214,304 in total debts.
MORTGAGE ASSET: Fitch Holds Low-B Rating on Two Cert. Classes
-------------------------------------------------------------
Fitch Ratings has affirmed these Mortgage Asset Securitization
Transactions, Inc., Seasoned Securitization Trust mortgage-pass
through certificates:
Series 2004-1 pool 1
-- Class A at 'AAA';
-- Class 15-B-3 at 'BBB';
-- Class 15-B-4 at 'BB';
-- Class 15-B-5 at 'B'.
Series 2004-1 pools 2, 3, and 4
-- Class A at 'AAA'.
The affirmations affect over $449 million of outstanding
certificates. The deal has suffered no losses since the last
rating action date. Although delinquency has increased, a loan-
level analysis involving updated home value appraisals determined
the bonds were not at an increased risk for default.
The collateral in pool 1 (stand-alone) of the above MASTR deal
primarily consists of conventional, fully amortizing 15-year
fixed-rate mortgage loans secured by first liens on one- to four-
family residential properties. The collateral in pools 2, 3, and
4 (cross collateralized) of the above MASTR deal primarily
consists of conventional, fully amortizing 30-year fixed-rate and
3/1, 5/1, and 7/1 hybrid adjustable-rate mortgage loans secured by
first liens on one- to four-family residential properties. The
pool factors, i.e. current mortgage loans outstanding as a
percentage of the initial pool, are 69% for pool 1 and 63% for
pools 2, 3, and 4.
Further information regarding current delinquencies, losses, and
credit enhancement is available on the Fitch web site at
http://www.fitchratings.com/
MQ ASSOCIATES: Consent Solicitation for Indentures Ends Tomorrow
----------------------------------------------------------------
MQ Associates, Inc. and MedQuest, Inc. are each extending the
expiration date for the previously announced consent solicitations
to seek certain amendments to:
(i) the outstanding 12-1/4% Senior Discount Notes due 2012 of
MQ Associates and the related indenture dated as of August
24, 2004, and
(ii) the outstanding 11-7/8% Senior Subordinated Notes due 2012
of MedQuest and the related indenture dated as of August
15, 2002.
The consent solicitations by the Company, each previously
scheduled to expire at 10:00 a.m., New York City time, on
September 2, 2005, will now expire at 1:00 p.m. New York City
time, on Tuesday, September 6, 2005, unless further extended.
The Company has been advised by Global Bondholder Services
Corporation, the tabulation agent for the consent solicitations,
that, as of 10:00 a.m., New York City Time, on September 1, 2005,
valid consents have been received from holders of approximately
$135.8 million in aggregate principal amount at maturity of the 12
1/4% Notes, and $179.2 million in aggregate principal amount of
the 11 7/8% Notes.
The Company has retained Global Bondholder Services Corporation to
serve as the tabulation agent and information agent.
Copies of the consent solicitation statement and related documents
may be obtained at no charge by contacting the information agent
by telephone at (866) 952-2200 (toll-free) or (212) 430-3774, or
in writing at 65 Broadway -- Suite 704, New York, NY 10006,
Attention: Corporate Actions. Questions regarding the consent
solicitations may be directed to the information agent at the same
telephone numbers and address.
MQ Associates is a holding company and has no material assets or
operations other than its ownership of 100 percent of the
outstanding capital stock of MedQuest. MedQuest is a leading
operator of independent, fixed-site, outpatient diagnostic imaging
centers in the United States. These centers provide high quality
diagnostic imaging services using a variety of technologies,
including magnetic resonance imaging, computed tomography, nuclear
medicine, general radiology, ultrasound and mammography. As of
June 30, 2005, MedQuest operated a network of 96 centers in 13
states located primarily throughout the southeastern and
southwestern United States.
* * *
The Company's 12-1/4% senior discount notes due 2012 carry Moody's
Investors Service's and Standard & Poor's junk ratings.
NATURADE INC: Registers Laurus' 4.99% Equity Stake for Resale
-------------------------------------------------------------
Naturade, Inc., filed a Registration Statement with the Securities
and Exchange Commission for the resale of 12,096,375 shares of
common stock of Laurus Master Fund, Ltd. The shares comprise a
4.99% stake in the Company.
The Company's common stock trades on the over-the-counter market
under the symbol "NRDC.OB." The company's share price has
fluctuated from $0.20 to $0.30 in August.
A full-text copy of the Prospectus is available for free at
http://ResearchArchives.com/t/s?152
Naturade Inc. is a branded natural products marketing company
focused on growth through innovative, scientifically supported
products designed to nourish the health and well being of
consumers. The Company primarily competes in the overall market
for natural, nutritional supplements. Nutrition Business Journal,
a San Diego-based research publication that specializes in this
industry, reports that sales for the overall $58 billion
"Nutrition" industry were up 7% in 2004 versus 2003. Naturade
primarily competes in the $19 billion segment defined by NBJ as
Supplements, which grew 3.8% in 2004. In addition, the report
points out that sales of supplements were growing at similar rates
in both the mass market channel and health food and natural
product stores at approximately 3.5%.
As of June 30, 2005, Naturade's balance sheet reflects a
$3,992,088 stockholders' deficit, compared to a $3,031,548
deficit at Dec. 31, 2004.
NAZARETH LIVING: Expense Controls Prompt Fitch to Upgrade Rating
----------------------------------------------------------------
Fitch Ratings has upgraded the rating on approximately
$9.1 million outstanding St. Louis County Missouri Industrial
Development Authority healthcare facilities refunding revenue
bonds, series 1999, Nazareth Living Center) to 'BB+' from 'BB'.
The Rating Outlook is revised to Stable from Negative.
The rating upgrade reflects Nazareth Living Center's improved
financial performance, renegotiated service contract with the
Sisters of St. Joseph of Carondelet, and solid expense controls.
Fitch had downgraded NLC in February 2002 due to declining
liquidity and rate covenant violations in 2000 and 2001. As of
June 30, 2005, NLC's liquidity position has rebounded to
approximately 180 days cash on hand from 80 at fiscal year end
2001, while unrestricted cash relative to debt has increased to
42% from 21% over the same time period.
In addition, historical debt service coverage in years 2002, 2003,
and 2004 rebounded to a solid 3.2 times (x), 1.6x, and 2.4x,
respectively. Through the nine month period ended June 20, 2005,
NLC reported debt service coverage of 2.9x. During 2002, NLC and
the Sisters renegotiated their service agreement, which reduced
the discount of paid by the Sisters.
Previously, the Sisters paid a 17% discount off charges for both
skilled nursing and residential care. The renegotiated contract
allows a 7.5% discount off skilled nursing charges and a 5%
discount on residential care services. Management has been
proactive in limiting expense growth through reduction in agency
nurse expense and group purchasing arrangements in insurance and
supplies. The increase in total expenses from 2001 through 2004
has averaged just 1.8% per year.
Credit concerns include a planned increase in capital spending,
NLC's competitive marketplace, and the decline in occupancy within
the residential care units. NLC's average age of plant has
increased to 10.3 years as capital expenditures, as a percentage
of depreciation expense, has averaged approximately 56% over the
last four years.
Management has outlined capital plans to essentially double NLC's
capital spending in 2007-2009 as compared historical experience.
NLC's marketplace is very competitive with several competitors
opening new assisted living units. Meramec Bluffs, sponsored by
Lutheran Senior Services (rated 'A-' by Fitch), and Friendship
Village of South County (rated 'A' by Fitch) have recently added
new units to their campuses.
Finally, average occupancy in the residential care facilities has
declined over the last three years to 76% as of June 30, 2005 from
87% in fiscal year 2002. The number of Sisters occupying those
units has been steadily declining while private pay residents have
remained fairly constant. Management will be challenged to
increase the number of residents from the 'outside' to stabilize
occupancy in the residential care units.
The Stable Outlook is based on Fitch's belief that management can
maintain NLC's current profitability and liquidity profile. Fitch
believes that management's initiatives to increase Medicare
revenues will allow NLC to pursue the 2007-2009 capital budget
without materially weakening NLC's current balance sheet.
Located in St. Louis, Missouri, Nazareth Living Center operates
135 residential care units and 140 skilled nursing beds. Under
the series 1999 bond documents, NLC is required to disclose only
annual financial statements to the trustee for the benefit of
bondholders. However, Fitch views favorably NLC's distribution of
interim financials and utilization statistics directly to
requesting bondholders.
NOBLE DREW: U.S. Trustee Adds Two Creditors to Official Committee
-----------------------------------------------------------------
The United States Trustee for Region 2 expanded the the Official
Committee of Unsecured Creditors in Noble Drew Ali Plaza Housing
Corp.'s chapter 11 case by adding two seats. The Committee are
now comprised of:
1. Local 32BJ Service Employees International Union AFLCIO
Attn: Elizabeth A. Baker, Esq.
101 Avenue o f the Americas
New York, NY 10013
Tel. No. (212) 388-2060
2. S & G Building Repairs
Attn: Stanley Smith
4333 Whiteplains Road
Bronx, NY 10466
Tel. No. (718) 325-9507
3. Noble Drew Ali Tenants Association, Inc.
Attn: PauIette Forbes
37 New Lots Avenue, #2G
Brooklyn, NY 11233
4. Guardsman Elevator Co., Inc.
Attn: Robert Cummins
276 East 150* Street
Bronx, NY 10451
Tel. No. (718) 402-3700
5. MSC Restorations LLC
Attn: Maria Cullen
P.O. Box 763
Pelham, NY I0803
Tel. No. (718) 937-9339
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.
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.
NORCRAFT HOLDINGS: S&P Revises Outlook on Low-B Ratings to Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Norcraft
Holdings L.P. and its subsidiary, Norcraft Cos. L.P., to stable
from negative and affirmed its 'B+' corporate credit ratings. In
addition, Standard & Poor's raised its senior secured bank loan
rating on Norcraft Cos. L.P. to 'BB' from 'BB-' and assigned its
'1' recovery rating. The outlook revision reflects the
improvement in operating margins.
"After declining because of increased raw material and labor
costs, margins have returned toward historical levels due to
successful price increases, production efficiencies, and operating
leverage gained from higher production levels," said Standard &
Poor's credit analyst Lisa Wright.
The outlook revision also reflects S&P's expectations that free
cash flow will be applied toward bank debt reduction as relatively
strong end-market demand continues over the near term. Norcraft
generated $17 million of free operating cash flow during the first
half of 2005 and reduced bank debt by $15 million over this same
period.
The upgrade on the bank loan reflects S&P's higher expectations
for full recovery of principal in a payment default scenario.
The ratings on Eagan, Minnesota-based Norcraft Holdings reflect:
* limited product diversity in a cyclical industry;
* a small sales and asset base;
* a very aggressive financial policy; and
* thin credit protection measures.
Partly offsetting these negative factors are the company's:
* relatively good cost position;
* experienced management team; and
* currently strong industry demand.
Despite the company's relatively small size and limited end
market, ratings stability should be supported by fairly stable
industry demand. The outlook could be revised to negative, or the
ratings lowered, if earnings and cash flows are constrained by
rising raw material and labor costs that the company is unable to
offset with price increases or operating efficiencies, or if
liquidity tightens. A positive outlook revision is unlikely over
the intermediate term given Norcraft's vulnerable business
position and the potential for additional dividend distributions
to owners.
NORTHWEST AIRLINES: Frequent Flyer War Brews with United Airlines
-----------------------------------------------------------------
The Associated Press reports that Northwest Airlines offered its
passengers double frequent flier miles to counter a frequent flier
promotion launched by United Airlines two days after Northwest
mechanics went on strike.
The AP relates that UAL's double frequent-flier miles promo wasn't
publicized and posted on its Web site. Instead, the offer was
sent via e-mail to what appears to be Northwest's customers in its
core territory in the upper Midwest.
Andy Petersen at Inside Flier commented that it's cheap for United
to move market share since Northwest is on the ropes.
Robin Urbanski, United's spokesperson, acknowledged to the AP that
the promotion is aimed at Northwest's customers. UAL also honors
Northwest paper tickets as long as the itineraries match. Ms.
Urbanski emphasized that United is just helping customers affected
by the strike at Northwest.
United's offer, which ends Sept. 30, is aimed at a narrow group of
travelers in the Midwest. Northwest's offer is good nationwide
and ends Oct. 9, the AP reports
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.
Northwest Airlines Corp. is the world's fifth largest airline with
hubs in Detroit, Minneapolis/St. Paul, Memphis, Tokyo and
Amsterdam, and approximately 1,600 daily departures. Northwest is
a member of SkyTeam, an airline alliance that offers customers one
of the world's most extensive global networks. Northwest and its
travel partners serve more than 900 cities in excess of 160
countries on six continents.
At June 30, 2005, Northwest Airlines' balance sheet showed a
$3,752,000,000 stockholders' deficit, compared to a $3,087,000,000
deficit at Dec. 31, 2004.
ORECK CORP: S&P Places Low-B Ratings on CreditWatch Negative
------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' corporate
credit and senior secured debt ratings on New Orleans,
Louisiana-based Oreck Corp. on CreditWatch with negative
implications. CreditWatch with negative implications means that
the ratings could be affirmed or lowered following the completion
of Standard & Poor's review. Total debt outstanding at June 30,
2005, was about $200 million.
"The CreditWatch placement follows the aftermath of Hurricane
Katrina and reflects the potential damage to the company's
headquarters and more importantly, to its primary manufacturing
facility, and our concerns pertaining to the length and magnitude
of disruption of its business," said Standard & Poor's credit
analyst Alison Sullivan.
Both the company's headquarters, in New Orleans, and manufacturing
facility, in Long Beach, Mississippi, are believed to have escaped
major damage. However, the headquarters is expected to be
inaccessible for several weeks, if not longer, and management is
expected to take steps to restore production. It is likely that
damage to the facility could result in an extended disruption of
production and inability to fill future orders over the near-to-
intermediate term. At this point, it is unclear what the
financial magnitude of these damages or impact to the business
might be.
In resolving the CreditWatch listing, Standard & Poor's will
assess the financial impact of any damages and the ability to
resume production in the near term.
Oreck is a niche and largely domestic manufacturer and distributor
of premium household and commercial vacuum cleaners.
PARK PLACE: Fitch Assigns BB+ Rating to $9.10 Million Certificates
------------------------------------------------------------------
Park Place Securities Inc. asset-backed pass-through certificates
series 2005-WHQ4, is rated by Fitch Ratings:
-- $1,857,537,000 publicly offered classes A-1A, A-2A through
A-2D 'AAA';
-- $74.938 million class M-1 certificates 'AA+';
-- $67.113 million class M-2 certificates 'AA+';
-- $47.775 million class M-3 certificates 'AA';
-- $34.125 million class M-4 certificates 'AA';
-- $34.125 million class M-5 certificates 'A+';
-- $32.988 million class M-6 certificates 'A';
-- $30.718 million class M-7 certificates 'A';
-- $17.063 million class M-8 certificates 'A-';
-- $20.475 million class M-9 'BBB',
-- $13.650 million privately offered class M-10 'BBB-',
-- $9.10 million privately offered class M-11 'BB+'.
Credit enhancement for the 'AAA' rated class A certificates
reflects the 18.35% credit enhancement provided by classes M-1
through M-11 certificates, monthly excess interest and initial
overcollateralization of 1.60%.
Credit enhancement for the 'AA+' rated class M-1 certificates
reflects the 15.10% credit enhancement provided by classes M-2
through M-11 certificates, monthly excess interest and initial OC.
Credit enhancement for the 'AA+' rated class M-2 certificates
reflects the 12.15% credit enhancement provided by classes M-3
through M-11 certificates, monthly excess interest and initial OC.
Credit enhancement for the 'AA' rated class M-3 certificates
reflects the 10.05% credit enhancement provided by classes M-4
through M-11 certificates monthly excess interest and initial OC.
Credit enhancement for the 'AA' rated class M-4 certificates
reflects the 8.55% credit enhancement provided by classes M-5
through M-11 certificates, monthly excess interest and initial OC.
Credit enhancement for the 'A+' rated class M-5 certificates
reflects the 7.05% credit enhancement provided by classes M-6
through M-11 certificates, monthly excess interest and initial OC.
Credit enhancement for the 'A' rated class M-6 certificates
reflects 5.60% credit enhancement provided by classes M-7 through
M-11 certificates, monthly excess interest and initial OC.
Credit enhancement for the 'A' rated class M-7 certificates
reflects the 4.25% credit enhancement provided by classes M-8
through M-11 certificates, monthly excess interest and initial OC.
Credit enhancement for the 'A-' rated class M-8 certificates
reflects the 3.50% credit enhancement provided by classes M-9
through M-11 certificates, monthly excess interest and initial OC.
Credit enhancement for the 'BBB' rated class M-9 certificates
reflects the 2.60% credit enhancement provided by classes M-10
through M-11 certificates, monthly excess interest and initial OC.
Credit enhancement for the non-offered 'BBB-' class M-10
certificates reflects the 2.00% 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 HomEq
Servicing Corporation as master servicer. Wells Fargo Bank, N.A.
will act as trustee.
As of the cut-off date, the Group I mortgage loans have an
aggregate balance of $1,345,234,849. The weighted average loan
rate is approximately 7.442%. The weighted average remaining term
to maturity is 356 months. The average cut-off date principal
balance of the mortgage loans is approximately $159,691. The
weighted average original loan-to-value ratio is 78.55% and the
weighted average Fair, Isaac & Co. score was 600. The properties
are primarily located in California (18.19%), Florida (13.86%),
Illinois (9.00%), Arizona (8.17%), and New York (5.23%).
As of the cut-off date, the Group II mortgage loans have an
aggregate balance of $929,774,121. The weighted average loan rate
is approximately 7.191%. The WAM is 357 months. The average cut-
off date principal balance of the mortgage loans is approximately
$260,441. The weighted average OLTV ratio is 81.25% and the
weighted average FICO score was 627. The properties are primarily
located in California (35.73%), Florida (15.28%), New York
(8.38%), Illinois (5.57%), and Arizona (5.13%).
The loans were originated or acquired by Argent Mortgage Company,
LLC. Argent is an affiliate of Ameriquest Mortgage Company.
Ameriquest Mortgage Company is a specialty finance company engaged
in the business of originating, purchasing and selling retail and
wholesale subprime mortgage loans.
PHARMACEUTICAL FORMULATIONS: Taps Delaware Claims as Claims Agent
-----------------------------------------------------------------
Pharmaceutical Formulations, Inc., asks the U.S. Bankruptcy Court
for the District of Delaware for permission to retain Delaware
Claims Agency LLC as its claims and noticing agent.
Delaware Claims specializes in providing consulting and data
processing services to chapter 11 Debtors in connection with the
administration, reconciliation and negotiation of claims and
solicitation of votes to accept or reject plans of
reorganizations.
The Debtor has in excess of 400 creditors and other parties-in-
interest who are expected to file proofs of claim. The Debtor
believes that the assistance of Delaware Claims to prepare and
serve the notices on all creditors and parties-in-interest as well
as to docket and maintain the enormous number of proofs of claim
filed will avoid straining the resources of the Clerk's office.
Delaware Claims will:
1) transmit certain notices to creditors and parties-in-
interest;
2) receive, docket, scan, maintain and photocopy claims filed
against the Debtor;
3) assist the Debtor in the distribution of solicitation
materials;
4) receive, review and tabulate ballots cast in accordance with
voting procedures approved by the Court; and
5) assist the Debtor with certain administrative functions
relating to its chapter 11 plan.
The Firm will bill the Debtor at these hourly rates:
Designation Hourly Rate
----------- -----------
Senior Consultants $130
Technical Consultants $115
Associate Consultants $100
Processors and Coordinators $50
Joseph L. King, vice president of Delaware Claims, assures the
Court that the firm is "disinterested" as that term is defined in
Section 101(14) of the U.S. Bankruptcy Code.
Headquartered in Edison, New Jersey, Pharmaceutical Formulations,
Inc. -- http://www.pfiotc.com/-- is a publicly traded private
label manufacturer and distributor of nonprescription over-the-
counter solid dose generic pharmaceutical products in the United
States. The Company filed for chapter 11 protection on July 11,
2005 (Bankr. Del. Case No. 05-11910). Matthew Barry Lunn, Esq.,
and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor
LLP, represent the Debtor in its chapter 11 proceeding. As of
Apr. 30, 2005, the Debtor reported $40,860,000 in total assets and
$44,195,000 in total debts.
PHARMACEUTICAL FORMULATIONS: Claims Bar Date Set for Oct. 11
------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware, established 4:00 p.m. on Oct. 11, 2005, as
the deadline for all creditors owed money on account of claims
arising prior to July, 11, 2005, against Pharmaceutical
Formulations, Inc., to file proofs of claim.
Creditors must file written proofs of claim on or before the
Oct. 11 Claims Bar Date and those forms must be actually received
at:
Pharmaceutical Formulations, Inc.
Claims Processing
Delaware Claims Agency, LLC
230 North Market Street, 2nd Floor
Wilmington, Delaware 19801
Government Claims Bar Date
Judge Walrath also established 4:00 p.m. on Jan. 9, 2006, as the
deadline for all governmental units owed money by Pharmaceutical
Formulations, Inc., on account of claims arising prior to July 11,
2005, to file their proofs of claim.
Governmental units must file written proofs of claim on or before
the Jan. 9 bar date and those forms must be actually received at
the same address.
Headquartered in Edison, New Jersey, Pharmaceutical Formulations
-- http://www.pfiotc.com/-- is a publicly traded private label
manufacturer and distributor of nonprescription over-the-counter
solid dose generic pharmaceutical products in the United States.
The Company filed for chapter 11 protection on July 11, 2005
(Bankr. Del. Case No. 05-11910). Matthew Barry Lunn, Esq., and
Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP,
represent the Debtor in its chapter 11 proceeding. As of Apr. 30,
2005, the Debtor reported $40,860,000 in total assets and
$44,195,000 in total debts
PIONEER NATURAL: Commences Cash Tender Offer for 5.875% Sr. Notes
-----------------------------------------------------------------
Pioneer Natural Resources Company (NYSE:PXD) commenced an offer to
purchase for cash any and all of its outstanding 5.875% Senior
Notes due 2012 (CUSIP No. 299900 AD 2). In connection with the
Tender Offer, Pioneer is soliciting consents to proposed
amendments to the indenture governing the Notes. Pioneer is
offering a consent payment of $30 per $1,000 principal amount of
Notes to holders who validly tender their Notes and give their
consent to the proposed amendments before 5:00 p.m., New York City
time, on Thursday, September 15, 2005. The Tender Offer expires
at 12:00 midnight, New York City time, on Thu., Sept. 29, 2005.
Pioneer is offering to purchase any and all of the approximately
$194,500,000 aggregate principal amount of Notes currently
outstanding. The tender price for the Notes is based on a
fixed-spread pricing formula. Pioneer will also pay accrued and
unpaid interest on the Notes accepted in the Tender Offer to, but
not including, the applicable settlement date.
In connection with the Tender Offer for Notes, Pioneer is
soliciting consents to proposed amendments to the indenture
governing the Notes. The proposed amendments will permanently
remove substantially all of the operating restrictions contained
in the indenture governing the Notes. Holders tendering their
Notes will be deemed to have delivered a consent to the proposed
amendments.
On September 15, 2005, the Company will pay the semi annual
interest payment on the Notes to holders of record of the Notes on
September 1, 2005.
The Tender Price for Notes Tendered
The tender price for each $1,000 principal amount of Notes validly
tendered and accepted for payment pursuant to the tender offer
will be calculated as of 2:00 p.m., New York City time, on the
second business day before the Consent Date and will be an amount
equal to:
(i) the present value on the early settlement date of
$1,029.38 per $1,000 principal amount of Notes (the
redemption price payable for Notes on March 15, 2008,
which is the earliest redemption date) and all scheduled
interest payments on the Notes from the early settlement
date up to and including the earliest redemption date,
discounted on the basis of a yield to the earliest
redemption date equal to the sum of:
(a) the bid-side yield on the applicable reference U.S.
Treasury Security, as calculated by the dealer
manager, in accordance with standard market practice,
plus
(b) the applicable fixed spread listed in the table
below, minus
(ii) accrued and unpaid interest to, but not including, the
early settlement date, minus
(iii) the consent payment, being rounded to the nearest cent
per $1,000 principal amount of the Notes.
The Consent Payment for Notes Tendered Early
To encourage holders to tender early, the Company is offering a
consent payment of $30 per $1,000 principal amount of Notes for
Notes that are validly tendered and for which consents are
delivered on or before the Consent Date. The consent payment will
be paid in cash on the early settlement date with respect to those
Notes.
The Total Early Payment for Notes Tendered Early
The total early payment consists of the tender price, plus the
consent payment, plus accrued and unpaid interest to, but not
including, the early settlement date. Holders of Notes that
validly tender (and do not validly withdraw) Notes and deliver
consents on or before the Consent Date will be entitled to the
total early payment. Holders of Notes that validly tender Notes
after the Consent Date but on or prior to the Expiration Date will
be entitled to receive only the tender price, plus accrued and
unpaid interest to, but not including, the final settlement date.
The early settlement date is expected to be Sept. 20, 2005 and the
final settlement date is expected to be Oct. 4, 2005. Pioneer may
extend the Consent Date, early settlement date, Expiration Date
and final settlement date in its sole discretion.
The Tender Offer is subject to the satisfaction of certain
conditions, including the receipt of consents to the proposed
amendments from the holders of a majority of the aggregate
outstanding principal amount of Notes.
Pioneer has engaged D.F. King & Co., Inc., to act as information
agent in connection with the Tender Offer. Requests for copies of
the Offer to Purchase and Consent Solicitation Statement and
questions regarding the Tender Offer may be directed to D.F. King
& Co., Inc. at 1(800)859-8509 (US toll-free). Pioneer has engaged
Goldman, Sachs & Co. to act as dealer managers in connection with
the Tender Offer and as solicitation agent for the consent
solicitation. Questions regarding the Tender Offer and the
consent solicitation may be directed to Goldman, Sachs & Co. at
1(800)828-3182.
Pioneer Natural Resources Company -- http://www.pioneernrc.com/--
is a large independent oil and gas exploration and production
company with operations in the United States, Argentina, Canada
and Africa. Pioneer's headquarters are in Dallas, Texas.
Moody's rates Pioneer Natural's subordinated debt at Ba1 and
preferred stock at Ba2.
PIONEER NATURAL: Share Buy-Back & Asset Sale Cue Fitch's Downgrade
------------------------------------------------------------------
Fitch Ratings has downgraded Pioneer Natural Resources' senior
unsecured debt rating to 'BB+' from 'BBB-' following the
announcement that it will repurchase $1 billion in stock, and
intends to sell its deepwater Gulf of Mexico assets as well as
some of its assets in Argentina. The rating action affects
approximately $1.5 billion in Pioneer debt. The Rating Outlook
for Pioneer is Stable.
Pioneer announced a number of strategic initiatives to enhance
shareholder returns. The first was a $1 billion share repurchase
plan that the company will implement immediately, which will be
funded initially with the company's credit facility. Pioneer will
purchase up to $650 million of its shares by the end of this year.
With the second initiative, the company intends to sell its
properties in the deepwater Gulf of Mexico and in the Tierra del
Fuego part of Argentina. Completion of these asset sales is
expected to take place by the end of this year or early next year.
Proceeds from the transactions are expected to be used to repay
the balances on the company's credit facility and to repurchase
another $350 million of Pioneer's common equity. Other
initiatives include the company's exploration exit from the
deepwater GOM, hedging eligible oil and gas production for 2006
and 2007, and increasing the company's common dividend by 20%.
The downgrade of Pioneer's senior unsecured ratings reflects
Fitch's concern about additional shareholder-friendly actions that
would detrimentally affect bondholders. Pioneer's share price
performance has significantly lagged that of its peers over the
last few years and Fitch sees the potential for additional
shareholder pressure going forward.
Depending on expected sale proceeds from the planned asset
divestures, Pioneer's debt/boe (barrels of oil equivalent) and
debt/PDP (proved developed producing) metrics likely will not look
significantly leveraged. However, the company is selling off
approximately 25% of its current production in an effort to
repurchase shares. Additionally, Fitch notes that Pioneer earlier
this year repurchased $300 million in shares.
Debt reduction, on the other hand, has only been approximately
$100 million from the end of 2004; Fitch counts Pioneer's
Volumetric Production Payments as debt. The current level of debt
remains relatively unchanged since the Evergreen Resources
acquisition last year, at which time Pioneer's Outlook was revised
to Negative. The downgrade also reflects Fitch's concerns about
maintaining production levels post divestures as well as the
company's long-term ability to replace reserves at economic costs.
The Stable Outlook reflects Pioneer's strong reserve position and
expected near- and intermediate-term robust cash flow. The
company should have slightly over 900 million proven boe post
divestures.
Pioneer is a large independent oil & gas exploration and
production company with operations in the U.S., Argentina, Canada,
and Africa. Its headquarters are in Dallas, TX.
PIONEER NATURAL: Moody's Places Ratings on Review for Downgrade
---------------------------------------------------------------
Moody's Investors Service placed Pioneer Natural Resources' (PXD)
ratings on review for downgrade upon PXD's announced second round
of strategic remedial initiatives. PXD's senior unsecured rating
is Baa3 and its rating outlook has been negative. Moody's rates
PXS's subordinated debt at Ba1 and preferred stock at Ba2.
The move to a review for downgrade principally reflects:
* the plan's immediately higher leverage with a substantial
return of capital to shareholders through a large equity
buyback;
* execution and valuation risk in the effort to divest
comparatively unique and challenging deepwater Gulf of Mexico
reserves and exploration prospects and Argentine reserves;
* the need for such asset sale proceeds to pay down debt
incurred to fund the buybacks;
* the risk of unintended consequences from the announcement of
the plan; and
* Pioneer's ongoing negative production trends.
Moody's does view favorably PXD's sharp reduction in its large
global exploration effort and abandonment of its effort to
stabilize or grow total production in the face of dominant and
very steep Gulf of Mexico production declines.
The review will further asses:
* the pro-forma impact of the recapitalization and potential
divestitures relative to its third and fourth quarter 2005
and 2006 production indicators;
* PXD's execution, timing, and proceeds of potential
divestitures;
* the degree of equity market satisfaction with the plan and
whether material unintended consequences arise from the plan;
and
* PXD's pro-forma ability to generate production gains from its
smaller base at competitive unit full-cycle costs.
Assuming that PXD successfully executes the full buyback and
divesture plan announced today, if PXD still remained under
material shareholder pressure in spite of fully executing its
buyback and divestiture plan, Moody's would consider its ratings
to continue to face the risk of further stock buybacks. PXD will
still need to demonstrate it can grow its smaller property base at
competitive full-cycle costs. Moody's also notes that a high
proportion of PXD's durable onshore U.S. production is generated
by higher unit cost, more price sensitive wells producing less
than 10 BOE per day.
In rough sequence, the plan encompasses:
1) a leveraging $650 million equity buyback;
2) tender for up to $223 million of senior notes, funded with
bank debt;
3) a 20% increase in its common dividend;
4) a more aggressive hedging strategy;
5) reduction in exploration outlays and reallocation of such
capital to onshore development activity;
6) the eventual sale of reserves currently generating roughly
53,000 BOE/day of production;
7) and another $350 million stock buyback if the $223 million
notes are retired and asset sale proceeds are deemed
sufficient by PXD's board of directors to justify the added
buybacks.
The initiatives are the second round of PXD's effort to respond to
market pressure to address its equity and operating performance
relative to sector equity performance averages and of sector
leaders. This follows approximately $400 million in buybacks
since fourth quarter 2004 and the sale of roughly $900 million in
volumetric production payments this year. This time, PXD will
make a step-change capital distribution to shareholders, attempt
to eventually fund that distribution by shrinking its base through
the divestiture of its dominant flush but fast declining deepwater
Gulf of Mexico reserves and a portion of its low margin Argentine
reserves, and possibly accelerate the time when it can begin to
show production growth to the market.
The divestitures and reallocation of capital spending replaces
PXD's unsuccessful prior effort to satisfy the market with an
exploration, development, and production portfolio that was
expected to deliver declining production well into 2007 in spite
of PXD's full bore reinvestment attempt. PXD hopes to fund, and
expand to $1 billion, a de-capitalization by divesting for a fair
price its very flush but fast declining, high risk, and especially
capital intensive deepwater Gulf of Mexico properties.
Moody's calculates that the full divestiture of PXD's low
production cost properties will render unit production and
production tax costs in the range of at least $8.50 per barrel-of-
oil-equivalent production, G&A (including G&A included in down
exploration expense) in the range of $3/BOE, and could yield
interest expense in the range of $1.75/BOE. Moody's estimates
that PXD's 2005 all-sources unit reserve replacement costs will be
in the range of $12/BOE to $14/BOE, barring significant negative
reserve revisions. In this scenario, unit full-cycle costs would
be in the $27/BOE range.
Moody's estimates that PXD's actual third quarter production will
be in the 165,000 BOE per day range, down from 183,298 BOE per day
in second quarter 2005, and that third quarter production pro-
forma for all asset sales would be in the 112,000 BOE/day range.
Moody's estimates that year-end 2004 reserves, pro-forma for all
2005 completed and recently announced asset sales, plus three
volumetric payments, would be just over 920 mmboe and proven
developed reserves in the 560 mmboe range.
Including a third quarter 2005 $177 million acquisition of proven
undeveloped reserves, the third quarter buyback of the last $62
million of PXD's current $300 million buyback program, and the new
initial $650 million stock buy back, Moody's estimates that pro-
forma September 30, 2005 lease adjusted debt would be in the $3
billion range, including in debt the $245 million net present
value of future production costs associated with already sold
volumetric production payment volumes. If PXD completes its
announced asset divestitures, such proceeds would fund another:
* $350 million of equity buybacks;
* debt repayment;
* excess of capital spending over cash flow; and
* total plan transactions costs.
After the $650 million leveraged stock buy-back, pro-forma
June 30, 2005 Lease Adjusted Debt/PD Reserves would be in the
$4.75/PD BOE range. If PXD succeeds in divesting its reserves,
fully lease-adjusted leverage could be in the $3.25/PD BOE to
$3.80/PD BOE range, depending on proceeds received and capital
spending relative to cash flow. However, Moody's notes that these
leverage figures include the present value of PXD's future
production costs for volumetric production payment volumes in
adjusted debt, rather than the far higher deferred revenue figure.
PXD has again taken the initiative in an attempt to address
shareholder concerns without unduly sacrificing financial
flexibility. In that effort, historic high prices have
underwritten a more aggressive shareholder-friendly response than
otherwise would have been possible though PXD's continued negative
production trends, Moody's expectation of the existing portfolio's
continued production decline well into 2007, and sharply rising
reserve replacement and operating costs significantly dampen the
impact of high prices. Moody's has viewed the historic sector
pricing conditions, the generally strong sector equity response to
those conditions coupled with PXD's significant equity
underperformance relative to sector peers, and the ensuing equity
pressure to be a material credit risk.
Pioneer Natural Resources Company is headquartered in Dallas,
Texas.
PLIANT CORP: Weak Profitability Prompts Moody's to Junk Debts
-------------------------------------------------------------
Moody's Investors Service downgraded ratings on Pliant Corporation
due to the significant amount of stress reflected in the overall
credit profile, as well as weak profitability and cash generation
relative to expectations. Moody's took these rating actions:
-- $7 million 11 1/8% Senior Secured 1st Lien Notes due
June 15, 2009 (PIK until 2007), lowered to Caa1 from B3
-- $255 million 11 5/8% Senior Secured 1st Lien Notes due
June 15, 2009 (PIK until 2009), assigned Caa1
-- $250 million Senior Secured 2nd Lien Notes due
September 1, 2009, lowered to Caa3 from B3
-- $314 million 13% Senior Subordinated Notes due June 1, 2010,
lowered to Ca from Caa2
-- Corporate Family Rating, lowered to Caa1 from B2
The rating outlook remains negative.
The rating actions reflect that rising raw material and energy
costs, declines in sales volume, and inefficiencies associated
with lower production levels have resulted in financial leverage
(total debt to EBITDA) rising to over 10x for the twelve months
ended June 30, 2005. Free cash flow was negative during the
period as capital expenditures have more than offset modest
improvements in cash generation. EBITDA less capital expenditures
for the twelve months ended June 30, 2005 did not cover cash
interest expense. The annual cash interest expense burden going
forward of over $70 million remains significant in comparison with
EBITDA of about $96 million for the twelve months ended June 30,
2005 and a capital expenditure budget for 2005 of about $30-$35
million. In addition, the industry environment remains
challenging, with the potential for further rises in raw materials
and energy costs to further weaken the credit profile.
The ratings benefit from expectation that Pliant's diverse product
line and customer base will continue to support stable revenue
generation. Moody's believes that Pliant's planned and ongoing
operational restructurings, cost reductions, efficiency efforts,
and new business initiatives will have a favorable impact on free
cash generation and the credit profile, should the operating
environment become less adverse. Moody's notes that slack sales
volumes appear to be an industry-wide phenomena.
At June 30, 2005 Pliant had about $50 million available for
borrowing under the $100 million revolving credit agreement (not
rated by Moody's) and about $4 million in balance sheet cash,
indicating that liquidity is sufficient to meet needs in the very
near term. Pliant does not have significant debt maturities until
2009 and generated positive cash from operations of about $5
million during the first half of 2005, versus a slightly negative
level in the first half of 2004. The current borrowing base
revolver was put in place in February 2004 and has less
restrictive covenants than the facility it replaced.
Pliant improved financial flexibility in May 2005 when it
successfully amended and exchanged $298 million in principal value
of the 11 1/8% senior secured first lien notes due June 15, 2009
for 11 5/8% secured first lien payment-in-kind (PIK) notes due
June 15, 2009 (not previously rated). The old notes were PIK
until 2007, while the new notes are PIK until maturity, resulting
in Pliant having eliminated over $83 million in interest payments
that were due during 2007-2009. About $7 million of the old notes
remain outstanding.
The Caa1 rating on the senior secured first lien notes, notched at
the same level as the corporate family rating, reflects their
priority position in the capital structure and secured status, as
well as the effective subordination to the $100 million bank
revolver, which has a first priority claim on the company's most
liquid assets, the deposit accounts, receivables, and inventory.
The revolver is also secured by:
* the capital stock of existing and future domestic
subsidiaries;
* 65% of the capital stock of foreign subsidiaries; and
* a second lien on real property, fixtures, and equipment and
other assets.
The senior secured first lien notes are secured by a first
priority claim on substantially all of Pliant's real property,
fixtures, and equipment, in which Pliant has invested over $200
million in the last five years, as well as Pliant's intellectual
property and other assets (excluding inventory, receivables, and
deposit accounts). The notes are also secured by:
* a second lien on inventory, receivables, deposit accounts;
* the capital stock of existing and future domestic
subsidiaries; and
* 65% of the capital stock of foreign subsidiaries.
The first lien notes are guaranteed by each of Pliant's existing
and future domestic restricted subsidiaries and, to the extent
they also guarantee any debt of the domestic subsidiaries, by each
of the existing and future foreign restricted subsidiaries. The
notes are effectively subordinated to all liabilities (including
trade payables) of non-guarantor subsidiaries, which generated
about 13% of Pliant's net sales in 2004. There is an
intercreditor agreement governing the relationship between first
and second lien creditors.
The Caa3 rating on the $250 million senior secured second lien
notes due September 1, 2009 reflects the subordination to the
first lien debt and the relatively modest coverage by enterprise
value or eligible collateral in a distressed scenario.
The Ca rating on the $314 million subordinated notes reflects:
* the deep structural and contractual subordination of the
notes to Pliant's other debt;
* first loss position in a restructuring scenario; and
* limited expected recovery.
The negative outlook is based on expectation that the industry
environment is likely to continue to embed a significant level of
uncertainty with regard to costs for raw materials (resins),
energy, and freight costs and that fully passing cost increases
through to customers is likely to remain difficult in the near
term.
The ratings or outlook could move up, if improved operating
performance results in improvement in coverage of cash interest by
operating cash flow less capital expenditures, significant
leverage reduction, and positive free cash flow to debt.
Similarly, an equity injection or other transaction that
significantly improves free cash flow and lowers leverage could
result in improved ratings or outlook.
The ratings or outlook could move down, if further deterioration
in the industry environment further impairs free cash flow,
results in higher leverage, or otherwise weakens Pliant's credit
profile.
Headquartered in Schaumburg, Illinois, Pliant Corporation is a
manufacturer of value-added films and flexible packaging for:
* food,
* personal care,
* medical,
* agricultural, and
* industrial applications.
For the twelve months ended June 30, 2005, Pliant had revenue of
approximately $1.0 billion and EBITDA of about $96 million.
PONDEROSA PINE: Nixon Peabody Approved as Litigation Counsel
------------------------------------------------------------
The Honorable Novalyn L. Winfield of the U.S. Bankruptcy Court for
the District of New Jersey authorized Ponderosa Pine Energy, LLC,
and its affiliates to employ Nixon Peabody LLP as their special
corporate and litigation counsel.
The Debtors want Nixon Peabody to continue to provide legal
services in corporate and litigation matters. Presently, the Firm
advises the Debtors with respect to indemnification claims arising
out of litigation involving property in Johnson County.
Robert N.H. Christmas, Esq., a partner of Nixon Peabody, disclosed
that his Firm's professional bill:
Designation Hourly Rate
----------- -----------
Attorney $290 - $650
Paralegals $150 - $200
Nixon Peabody assured the Court that it's disinterested as that
term is defined in Section 101(14) of the U.S. Bankruptcy Code.
Headquartered in Morristown, New Jersey, Ponderosa Pine Energy,
LLC, and its affiliates are utility companies that supply
electricity and steam. The Company and its debtor-affiliates
filed for chapter 11 protection on April 14, 2005 (Bankr. D.N.J.
Case No. 05-22068). Mary E. Seymour, Esq., and Sharon L. Levine,
Esq., at Lowenstein Sandler PC represent the Debtor in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed estimated assets and debts of more
than $100 million.
PREMCOR INC: Fitch Lifts Sr. Debt Rating Following Valero Purchase
------------------------------------------------------------------
Fitch has raised the ratings of Premcor Inc. following the
company's acquisition by Valero Energy Corporation:
Premcor Refining Group:
-- $1 billion secured credit facility withdrawn;
-- Senior unsecured notes upgraded to 'BBB-' from 'BB';
-- Senior subordinated notes withdrawn.
Port Arthur Finance Company LP:
-- Senior secured notes upgraded to 'BBB' from 'BB+'.
The Rating Outlook for PRG and PAFC is Stable.
One of the largest independent oil refiners in the US, Premcor,
through operating subsidiary Premcor Refining Group, produces
gasoline, diesel, and aviation fuel. It owns refineries in
Delaware, Ohio, Tennessee, and Texas. In 2003 the company
acquired Williams Companies' Memphis refinery for $455 million.
In 2004 Premcor bought Motiva Enterprises' Delaware plant for $800
million. Collectively, the four refineries can process up to
800,000 barrels of crude oil per day. Investment firm Blackstone
Group owns 21% the company. In 2005 Premcor agreed to be acquired
by Southwest refining giant Valero Energy for $6.9 billion.
PRESTIGE MOTORS: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Prestige Motors of Massapequa, Inc.
dba Wantagh Suzuki
3328 Sunrise Highway
Wantagh, New York 11793
Bankruptcy Case No.: 05-86057
Type of Business: The Debtor operates a new and used
automobile dealership.
Chapter 11 Petition Date: September 1, 2005
Court: Eastern District of New York (Central Islip)
Debtor's Counsel: Gary M. Kushner, Esq.
Forchelli, Curto, Schwartz, Mineo,
Carlino & Cohn, LLP
330 Old Country Road
P.O. Box 31
Mineola, New York 11501
Tel: (516) 248-1700
Fax: (516) 248-1729
Estimated Assets: $1 Million to $10 Million
Estimated Debts: [Not provided]
The Debtor did not file a list of its 20 largest unsecured
creditors.
PROTOCOL SERVICES: Inks Compensation Insurance Financing Pact
-------------------------------------------------------------
Protocol Services, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of California for
authority to enter into a premium financing agreement with
Cananwill, Inc.
The Debtors say they've recently renewed their workers'
compensation insurance policy with Aon Risk Services, Inc. The
annual premium for the policy is $995,393.
Under the financing agreement, Cananwill will pay the Debtors'
premium. In turn, the Debtors will pay Cananwill a $426,597
downpayment and eight equal monthly installment payments of
$127,707 plus a one time finance charge of $26,268.
To secure the monthly payments, the Debtors propose to grant
Cananwill a security interest in unearned or returned premiums and
other amounts due under the policy resulting from the cancellation
of the policy.
The Debtors tell the Court that the financing will allow them to
turn what otherwise will be a prepaid asset into a valuable
working capital, increasing their liquidity.
Headquartered in Deerfield, Illinois, Protocol Services, Inc.,
and its subsidiaries offers agency services, database development
and management, data analysis, direct mail printing and
lettershops, e-marketing, media replication, and inbound and
outbound teleservices. Protocol has offices and operations in
California, Colorado, Illinois, Louisiana, Florida, Michigan,
North Carolina, New York, Massachusetts, Connecticut and Canada
and employs over 4,000 individuals. The Company and its
affiliates -- Protocol Communications, Inc., Canicom, Inc., Media
Express, Inc., and 3588238 Canada, Inc. -- filed for chapter 11
protection on July 26, 2005 (Bankr. S.D. Calif. Case Nos. 05-06782
through 05-06786). Bernard D. Bollinger, Jr., Esq., and Jeffrey
K. Garfinkle, Esq., at Buchalter, Nemer, Fields & Younger,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they estimated
more than $100 million in assets and debts.
PROXIM CORP: Drinker Biddle Approved as Panel's Counsel
-------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware gave Proxim Corporation and its debtor-
affiliates' Official Committee of Unsecured Creditors permission
to retain Drinker Biddle & Reath LLP as its counsel, nunc pro tunc
to June 22, 2005.
Drinker Biddle will:
a. advise the Creditors' Committee with respect to its rights,
powers, and duties;
b. assist and advise the Creditors' Committee in its
consultations with the Debtors relative to the
administration of these cases including the proposed sale
of the Debtors' businesses as a going concern;
c. assist the Creditors' Committee in analyzing the claims of
creditors and in negotiating with creditors;
d. assist the Creditors' Committee with its investigation of
the acts, conduct, assets, liabilities, and financial
condition of the Debtors and of the operation of the
Debtors' businesses in order to maximize the value of the
Debtors' assets for the benefit of all creditors;
e. assist the Creditors' Committee in its analysis of, and
negotiations with the Debtors or any third party concerning
matters related to, among other things, the terms of a plan
of reorganization or plan orderly liquidation;
f. assist and advise the Creditors' Committee with respect to
any communications with the general creditor body regarding
significant matters in the Debtors' cases;
g. commence and prosecute necessary and appropriate actions
and proceedings on behalf of the Creditors' Committee ;
h. review, analyze or prepare, on behalf of the Creditors'
Committee, all necessary applications, motions, answers,
orders, reports, schedules, pleadings and other documents;
i. represent the Creditors' Committee at all hearings and
other proceedings;
j. confer with other profesinal advisors retained by the
Creditors' Committee in providing advice to the members of
the Creditors' Committee ; and
k. perform all other necessary legal services in this case as
may be requested by the Creditors' Committee in the
Debtors' chapter 11 proceeding.
Robert K. Malone, Esq., at Drinker Biddle, disclosed the Firm's
standard hourly rates:
Designation Hourly Rate
----------- -----------
Partners $325 - $600
Counsel/Associates $175 - $375
Paraprofessional $75 - $190
Mr. Malone assured the Court that his Firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in San Jose, California, Proxim Corporation --
http://www.proxim.com/-- designs and sells wireless networking
equipment for Wi-Fi and broadband wireless networks. The Debtors
provide wireless solutions for the mobile enterprise, security and
surveillance, last mile access, voice and data backhaul, public
hot spots, and metropolitan area networks. The Debtor along with
its affiliates filed for chapter 11 protection on June 11, 2005
(Bankr. D. Del. Case No. 05-11639). When the Debtor filed for
protection from its creditors, it listed $55,361,000 in assets and
$101,807,000 in debts.
PROTOCOL SERVICES: Kurtzman Carson Approved as Claims Agent
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
gave Protocol Services, Inc., and its debtor-affiliates,
permission to employ Kurtzman Carson Consultants, LLC, as their
claims, noticing and balloting agent.
Kurtzman Carson will:
1) distribute required notices in the Debtors' chapter 11
cases, including notices of claims bar date and objections
to claims, notice of hearings on a disclosure statement and
confirmation of a chapter 11 plan and other miscellaneous
notices to any entities as the Debtors or the Court may
require for the administration of the Debtors' chapter 11
cases;
2) receive, organize and catalog proofs of claim and proofs of
interest filed against the Debtors and create and maintain
official claims registers;
3) print ballots and prepare voting reports by plan class,
creditor or shareholder and amount for review and approval
by the Debtors and their counsel;
4) coordinate the mailing of ballots, any disclosure statements
and plans of reorganization to all voting and non-voting
parties and establish a toll-free 800 number to receive
questions regarding voting on a chapter 11 plan;
5) maintain an up-to-date mailing list for all entities that
have filed proof of claim or proof of interest and provide
public access for examination of copies of the proofs of
claim or interest, without charge;
6) create and maintain a public access website to allow access
to electronic copies of proofs of claim or proofs of
interest and record all transfers of claims pursuant to
Rule(e) of the Federal Rules of Bankruptcy Procedure;
7) comply with all applicable federal, state, municipal and
local statues, ordinances, rules, regulations, orders and
other requirements; and
8) perform all other administrative and support services
related to the Firm's duties as claims, noticing and
balloting agent as the Debtors or the Bankruptcy Clerk's
Office may request.
Christopher R. Schepper, the Chief Restructuring Officer of
Kurtzman Carson disclosed that his Firm received $10,000 retainer.
Mr. Schepper reports Kurtzman Carson's professionals bil:
Designation Hourly Rate
----------- -----------
Sr. Bankruptcy Consultant $225 - $295
Bankruptcy Consultant $125 - $210
Technology Programming Consultant $115 - $195
Case Manager $75 - $115
Kurtzman Carson assures the Court that it does not represent any
interest materially adverse to the Debtors or their estates.
Headquartered in Deerfield, Illinois, Protocol Services, Inc.,
and its subsidiaries offers agency services, database development
and management, data analysis, direct mail printing and
lettershops, e-marketing, media replication, and inbound and
outbound teleservices. Protocol has offices and operations in
California, Colorado, Illinois, Louisiana, Florida, Michigan,
North Carolina, New York, Massachusetts, Connecticut and Canada
and employs over 4,000 individuals. The Company and its
affiliates -- Protocol Communications, Inc., Canicom, Inc., Media
Express, Inc., and 3588238 Canada, Inc. -- filed for chapter 11
protection on July 26, 2005 (Bankr. S.D. Calif. Case Nos. 05-06782
through 05-06786). Bernard D. Bollinger, Jr., Esq., and Jeffrey
K. Garfinkle, Esq., at Buchalter, Nemer, Fields & Younger,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they estimated
more than $100 million in assets and debts.
PROXIM CORP: Weiser LLP Approved as Panel's Financial Advisor
-------------------------------------------------------------
The Honorable Peter J. Walsh approved the request of the Official
Committee of Unsecured Creditors appointed in Proxim Corporation
and its debtor-affiliates' chapter 11 cases to employ Weiser LLP
as its financial advisor, nunc pro tunc to June 22, 2005.
Weiser LLP will:
a. review all financial information prepared by the Debtors'
or its consultants as requested by the Committee including,
but not limited to, a review of Debtors' financial
statements as of filing of the petition, showing in detail
all assets and liabilities and priority and secured
creditors;
b. monitor the Debtors' activities regarding cash
expenditures, receivable collections, asset sales and
projected cash requirements;
c. attend meetings including the Committee, the Debtors,
creditors, their attorneys and consultants, Federal and
state authorities, if required;
d. review the Debtors' periodic operating and cash flow
statements;
e. review the Debtors' books and records for related party
transactions, potential preferences, fraudulent conveyances
and other potential pre-petition investigations;
f. investigate with respect to pre-petition acts, conduct,
property, liabilities and financial condition of the
Debtors', their management, creditors including the
operation of their business, and as appropriate avoidance
actions;
g. review and analyze proposed transactions for which the
Debtors seek Court approval;
h. assist in the sale process of the Debtors collectively or
in segments, parts or other delineations, if any;
i. assist the Committee in developing, evaluation, structuring
and negotiating the terms and conditions of all potential
plans of reorganization including preparation of a
liquidation analysis;
j. analyze claims filed;
k. estimate the value of the securities, if any, that may be
issued to unsecured creditors under any such plan;
l. provide expert testimony on the result of its findings;
m. assist the Committee in developing plans including
contacting potential plan sponsor if appropriate; and
n. provide the Committee with other and further financial
advisory services with respect to the Debtors, including
valuation, general restructuring and advice with respect to
financial, business and economic issues, as may arise
during the course of the restructuring as requested by the
Committee.
James Horgan, a Partner at Weiser LLP, disclosed the Firm's
professionals' standard hourly rates:
Designation Hourly Rate
----------- -----------
Partners $312 - $400
Senior Managers $264 - $312
Managers $204 - $264
Seniors $168 - $204
Assistants $108 - $132
Paraprofessionals $72 - $132
Mr. Horgan assured the Court that his Firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in San Jose, California, Proxim Corporation --
http://www.proxim.com/-- designs and sells wireless networking
equipment for Wi-Fi and broadband wireless networks. The Debtors
provide wireless solutions for the mobile enterprise, security and
surveillance, last mile access, voice and data backhaul, public
hot spots, and metropolitan area networks. The Debtor along with
its affiliates filed for chapter 11 protection on June 11, 2005
(Bankr. D. Del. Case No. 05-11639). When the Debtor filed for
protection from its creditors, it listed $55,361,000 in assets and
$101,807,000 in debts.
RED MOUNTAIN: Fitch Affirms D Rating on $2.9MM Class F Certs.
-------------------------------------------------------------
Fitch Ratings has affirmed Red Mountain Funding's commercial
mortgage pass-through certificates, series 1995-1:
-- $10.2 million class E 'B'.
Fitch also maintains the 'D' rating on the $2.9 million class F
certificates.
The rating affirmation follows Fitch's analysis of the four
remaining loans in the pool. All four loans are secured by
healthcare facilities. Three loans (74%) secured by properties in
PA matured in June 2005 and the servicer is evaluating workout
options, including possible six-month loan extensions. The loans
reported year-end 2005 combined debt service coverage ratio of
1.05 times (x). The borrowers continue to make the debt service
payments. The fourth loan (26%) is secured by a property in TN.
The loan maturity date has been extended to 2007.
As of the August 2005 distribution report, the transaction's
certificate balance declined by approximately 92% to $11.2 million
from $146.1 million at issuance.
ROBOTIC VISION: Wants to Sell All Assets to Siemens for $23-Mil
---------------------------------------------------------------
Acuity CiMatrix, Inc., f/k/a Robotic Vision Systems, Inc., entered
into an Asset Purchase and Sale Agreement to sell to Siemens
Energy and Automation, Inc., substantially all of its operating
assets, including machinery and equipment, inventory, intellectual
property, and certain leases and contracts, for $23 million in
cash, subject to certain price adjustments based on the level of
accounts receivable, accounts payable and current inventory at
closing, the amounts required to cure any defaults in executory
contracts being assigned, and other potential adjustments.
The Sale Transaction is subject to the approval of the U.S.
Bankruptcy Court for the District of New Hampshire.
Simultaneously with execution of the Asset Purchase and Sale
Agreement, Siemens delivered 10% of the purchase price as a
refundable deposit to be held in escrow until closing. The Asset
Purchase and Sale Agreement also provides for a breakup fee of
$700,000 payable upon the occurrence of certain events that result
in the Purchased Assets not being sold to Siemens.
Prior to approval and consummation of the transaction, the Company
wants to conduct an auction on September 21, 2005, governed by
sale procedures (including the solicitation and receipt of higher
or better offers) to be approved by the Bankruptcy Court.
A full-text copy of the Asset Purchase Agreement is available for
free at http://ResearchArchives.com/t/s?14c
Headquartered in Nashua, New Hampshire, Robotic Vision Systems,
Inc., n/k/a Acuity Cimatrix, Inc. -- http://www.rvsi.com/--
designs, manufactures and markets machine vision, automatic
identification and related products for the semiconductor capital
equipment, electronics, automotive, aerospace, pharmaceutical and
other industries. The Company, together with its debtor-
affiliate, filed for chapter 11 protection on Nov. 19, 2004
(Bankr. D. N.H. Case No. 04-14151). Bruce A. Harwood, Esq., at
Sheehan, Phinney, Bass + Green represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $43,046,000 in total assets and
$51,338,000 in total debts.
SAINT VINCENTS: Commerce Bank Extends $35 Million DIP Facility
--------------------------------------------------------------
Saint Vincent Catholic Medical Centers of New York and Commerce
Bank N.A. ask the U.S. Bankruptcy Court for the Southern District
of New York to approve their $35 million DIP financing agreement
pursuant to Section 364 of the Bankruptcy Code.
Stephen B. Selbst, Esq., at McDermott Will & Emery LLP, in New
York, relates that, as of August 26, 2005, SVCMC owes Commerce
Bank $19.1 million pursuant to a prepetition credit revolving
facility. The $19.1 million The Prepetition Facility bears
interest at the prime rate of interest charged by Commerce Bank
plus 2%, and has a maturity date of the earlier of September 30,
2005, or the expiration of the Pools.
Cognizant of the Debtors' cash flow problems, Commerce Bank has
agreed to provide up to $35 million under a revolving credit
facility. The Commerce DIP Facility will include the assumption
of the $19.1 million SVCMC Debt.
Commerce DIP Facility is Necessary
Mr. Selbst explains that the proceeds of the DIP Financing
provided by HFG do not give the Debtors enough overall liquidity
at this time. The Commerce DIP Facility will provide the Debtors
with an additional $16 million in new postpetition funds, which
will clearly benefit the Debtors and all constituencies in the
Debtors' Chapter 11 cases.
The Debtors will use the funds for the purchase of new supplies,
the funding of payroll obligations, the operation of their
healthcare facilities; and other working capital needs.
The salient terms of the Commerce DIP Facility are:
Borrower: SVCMC
Lender: Commerce Bank
Guarantors: SVCMC's Debtor subsidiaries will
guarantee the amounts owed under the DIP
Facility with the exception of the
assumed SVCMC Debt.
Closing: The DIP Facility will close upon the
Court's interim approval of the DIP
Facility. Upon Interim Approval, the
Debtors may borrow up to $27.5 million,
comprised of the assumption of the SVCMC
Debt plus an advancement of $8.4 million.
Interest Rate: Obligations under the DIP Facility will
accrue interest at a rate equal to the
Commerce Prime Rate plus 1% per annum.
Fees: At closing, a fee of 1% of the new amount
being advanced under the DIP Facility
will be due and payable to Commerce Bank.
The Debtors will also be obligated to pay
the Bank's reasonable attorney's fees and
costs.
Advance Rate: Borrowings under the DIP Facility will be
limited to the lesser of the Committed
Amount or 70% of the 2005 and 2006 Pools
due to be paid to SVCMC.
Maturity Date: All amounts owing under the DIP Facility
will be repaid in cash, in full and with
interest upon the earlier of:
(1) the effective date of a confirmed
plan of reorganization;
(2) the Debtors obtaining permanent DIP
or exit financing that seeks to
obtain senior or pari passu liens on
the 2005 and 2006 Pools; and
(3) December 31, 2006.
Security: Commerce Bank will be granted a first
priority priming lien and security
interest in all of the Pools for the
years 2005 and 2006.
Claim: Commerce Bank's claims will have
priority over all administrative expenses
under Sections 503(b) or 507(b) of the
Bankruptcy Code, subject to the
Carve-out.
Repayment of Loan
The parties also agree that, simultaneous with the Debtors
obtaining permanent DIP financing sufficient to fully pay the HFG
DIP Loan, the Debtors will pay a guaranteed $5 million to
Commerce Bank in reduction of the Committed Amount.
In the event the Final DIP Loan seeks to obtain senior or pari
passu liens on the 2005 and 2006 Pools, Commerce Bank will be
paid in full from the Final DIP loan.
In the event the Final DIP Loan is not funded on or before
November 1, 2005, Commerce Bank will be entitled to apply all
payments from the Pools against the Committed Amount until this
amount has been reduced to $30 million. All payments made to or
received by Commerce Bank against the Committed Amount will
permanently reduce the Committed Amount.
In the event the Final DIP Loan has not been funded on or before
December 1, 2005, so long as the Committed Amount has been
reduced before that time, to no more than $30 million, Commerce
Bank will be permitted to apply one half of all payments made on
account of the 2005 and 2006 Pools to reduce the Committed
Amount.
A full-text copy of the Commerce DIP Loan Agreement is available
free of charge at:
http://bankrupt.com/misc/SVCMC_Commerce_DIP_Financing.pdf
The Court will convene a hearing on September 7, 2005, at 2:30
p.m. to consider approval of the Commerce DIP Facility.
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 9; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
SAINT VINCENTS: Inks Deal to Modify Reimbursement Agreements
------------------------------------------------------------
Saint Vincent Catholic Medical Centers of New York and its debtor-
affiliates ask the U.S. Bankruptcy Court for the Southern District
of New York for authority to amend Reimbursement Agreements with
Brooklyn and Queens, Inc., and Republic National Bank of New York,
which will extend the Letter of Credit with respect to St.
Jerome's Health Services Corporation until September 30, 2006.
The Letters of Credit are secured by the Agreements with Brooklyn
and Queens and Republic National.
As of the bankruptcy petition date, Saint Vincents owed the
Dormitory Authority of the State of New York $3,995,762 in respect
of DASNY's Hospital and Nursing Home Revenue Bonds, 1995 Issue A,
which are secured by a Mortgage and Assignment of Gross Receipts
in respect of the receipts generated by the parking garage
relating to St. John's Hospital. The Bonds with respect to
SVCMC's indebtedness (i) bear interest at 5.3%, and
(ii) will mature on July 1, 2014.
As of the Petition Date, St. Jerome's, doing business as Holy
Family Home Brooklyn, owed DASNY $1,200,620 in respect of the
Bonds, which are secured by a Mortgage and Assignment of Gross
Receipts relating to St. Jerome's. The Bonds with respect to St.
Jerome's indebtedness (i) bear interest at 5.5%, and (ii) will
mature on July 1, 2009. The Bonds are further secured by a
$5,968,556 letter of credit issued by HSBC Bank USA, National
Association.
The Letter of Credit was issued pursuant to:
(1) a Letter of Credit and Reimbursement Agreement dated as of
December 1, 1995, between the Catholic Medical Center of
Brooklyn and Queens, Inc., and Republic National Bank of
New York; and
(b) a Letter of Credit and Reimbursement Agreement dated as of
December 1, 1995, between St. Jerome's and Republic
National Bank of New York.
SVCMC has guaranteed the obligation of St. Jerome's under the
St. Jerome's Reimbursement Agreement pursuant to a Guaranty and
Security Agreement dated January 24, 1996.
The obligations of SVCMC and St. Jerome's are secured by
collateral comprised of SVCMC's pledged securities placed in
accounts with a value of $6,468,697 and $13,281 at HSBC
Securities (USA) Inc. HSBC's security interest in the Accounts
is evidenced by the Guaranty, a Continuing General Security
Agreement dated January 24, 1996, and an Account Control
Agreement dated as of January 27, 2003.
On June 30, 2005, SVCMC requested HSBC, on behalf of SVCMC and
St. Jerome's, to extend the Letter of Credit Expiration Date to
September 30, 2006, on the terms and conditions of each of the
Reimbursement Agreements.
Thereafter, SVCMC asked HSBC to amend the Letter of Credit with
respect to St. Jerome's' allocable portion of the Bonds amounting
to $1,200,620, the reimbursement of which will be secured by the
collateral in the Accounts.
The Debtors seek the Court's authority to enter into an amendment
to the Reimbursement Agreements, which will extend the Letter of
Credit with respect to St. Jerome's until September 30, 2006,
secured by the Accounts.
The Debtors contend that an extension and amendment of the Letter
of Credit with respect to St. Jerome's' allocable portion of the
Bonds is warranted because:
-- SVCMC is the guarantor of the obligations of St. Jerome's
under the St. Jerome's Reimbursement Agreement;
-- if The Bank of New York, as Trustee for the Bonds, draws on
the Letter of Credit with respect to St. Jerome's, HSBC
will obtain a matured and liquidated claim against SVCMC's
collateral for the amount of the draw; and
-- if the Letter of Credit is extended, the remaining
collateral will not need to be liquidated.
Therefore, the Parties stipulate and agree that:
(a) after HSBC pays the Trustee $3,995,762 on the Letter of
Credit, HSBC will repay SVCMC's resulting obligation in
the same amount to HSBC under the CMC Reimbursement
Agreement, retain $1,400,000 for the benefit of St.
Jerome's under the amended Letter of Credit, and remit
the $1,000,000 balance remaining in the Accounts to the
Debtors within two business days of the repayment of
SVCMC's then due obligations under the CMC Reimbursement
Agreement; and
(b) HSBC will provide to the Debtors an accounting, reflecting
all the transactions effectuated, which will be reasonably
satisfactory to the Debtors, within 10 business days of
the repayment of SVCMC's obligations under the CMC
Reimbursement Agreement.
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 8; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
SEBASTIAN CARNEVALE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtors: Sebastian Carnevale and Patricia Carnevale
523 Brunswick Pike
Lambertville, New Jersey 08530
Bankruptcy Case No.: 05-38136
Chapter 11 Petition Date: September 1, 2005
Court: District of New Jersey (Trenton)
Debtors' Counsel: Christine M. Gravelle, Esq.
Markowitz, Gravelle & Schwimmer
3131 Princeton Pike
Lawrenceville, New Jersey 08648
Tel: (609) 896-2660
Estimated Assets: Less than $50,000
Estimated Debts: $1 Million to $10 Million
Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Equity One Bank, NA $736,349
Attn: Sherman, Silverstein,
Kohl, Rose
4300 Haddonfield Road
Merchantville, NJ 08109
Tel: (856) 662-0700
Option One Mortgage $228,542
P.O. Box 44042
Jacksonville, FL 32231-4042
Mason Tenders Welfare Fund $65,000
Attn: Michael J. Vollbrecht, Esq.
17 State Street, 4th Floor
New York, NY 10004
Stuart Allen & Associates $36,089
Attn: Thomas R. Dominczyk, Esq.
Maurice & Needleman, PC
250 Route 28, Suite 203
Bridgewater, NJ 08807
Pawnee Leasing $21,654
Attn: Stephen D. Burton, Esq.
5450 East 5th Street
Tucson, AZ 85711
Sherman Acquistition Credit card purchases $18,617
Sears/Citi Card
Attn: Capital Management Services
726 Exchange Street, Suite 700
Buffalo, NY 14210
Atlantic Credit & Finance $8,379
Attn: Syncom
5450 NW Central #1000
Houston, TX 77092
GM Card Credit card purchases $8,350
P.O. Box 37281
Baltimore, MD 21297-3281
Chase Manhattan Bank Credit card purchases $7,747
Attn: American Coradius, Inc.
300 Essjay Road, Suite 150
Buffalo, NY 14221-8231
Ford Motor Credit Judgment Entered $6,000
Attn: Hayt, Hayt & Landau, LLC
2 Industrial Way West
P.O. Box 500
Eatontown, NJ 07724-0500
AIG-Granite State $3,729
Attn: Joseph Marino, Esq.
Marino Plaza 1
75 Kingsland Avenue, Suite 3
Clifton, NJ 07014-2034
Elan Financial Services $3,269
P.O. Box 790084
Saint Louis, MO 63179-0084
New Century Financial $1,086
Attn: Pressler & Pressler
16 Wing Drive, 2nd Floor
Cedar Knolls, NJ 07927
Chase Credit card purchases $660
P.O. Box 15583
Wilmington, DE 19886-1194
Applegate Louisiana, LLC $584
Attn: Sylvia Goldblatt, Esq.
659 Eagle Rock Avenue
West Orange, NJ 07052
AT&T Wireless Telephone Service $312
Attn: BCR
P.O. Box 9001
Minnetonka, MN 55345-9001
Midnight Velvet Credit card purchases $262
1112 7th Avenue
Monroe, WI 53566-1364
AquaSoft, Inc. $257
504 Highway 33 West
Englishtown, NJ 07726
Robert A. Mermet, DDS Medical Services $257
114 Titus Mill Road, Suite 104
Pennington, NJ 08534
Sovereign Bank $154
Attn: Audit Systems Incorporated
P.O. Box 17229
Clearwater, FL 33762
SECOND CHANCE: Panel Wants Plan-Filing Period Extended to Oct. 31
-----------------------------------------------------------------
Second Chance Body Armor, Inc., asks the U.S. Bankruptcy Court for
the Western District of Michigan to extend the deadline within
which it has exclusive right to file a plan through Oct. 31, 2005.
Second Chance asks that its time to solicit acceptances of that
plan be extended through Feb. 1, 2006.
As reported in the Troubled Company Reporter on August 3, 2005,
Armor Holdings, Inc. completed its previously announced
acquisition of substantially all of the Debtor's domestic assets
for $45 million.
As a result, the Debtor wants more time, in light of the sale and
the substantial sale proceeds now available for distribution to
creditors, to develop a plan that fairly and comprehensively
addresses all claims.
Creditors' Committee Wants Limited Extension
The Official Unsecured Creditors' Committee tells the Court that
the hearing on the Debtor's request for extension has been
scheduled to take place before the Committee will hold their next
meeting with the Debtors. The Committee suggests the Court
approve a limited extension of exclusivity at this time, subject
to the Debtor's right to seek a further extension.
Accordingly, the Committee does not object to a short-term
extension of the exclusive period for the Debtor to file a plan
until September 28, 2005, and a corresponding extension to solicit
acceptances for, and to confirm any such plan, until November 30,
2005.
Based in Central Lake, Michigan, Second Chance Body Armor, Inc.
-- http://www.secondchance.com/-- manufactures wearable and soft
concealable body armor. The Company filed for chapter 11
protection on Oct. 17, 2004 (Bankr. W.D. Mich. Case No. 04-12515)
after recalling more than 130,000 vests made wholly of Zylon, but
it did not recall vests made of Zylon blended with other
protective fibers. Stephen B. Grow, Esq., at Warner Norcross &
Judd, LLP, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
estimated assets and liabilities of $10 million to $50 million.
Daniel F. Gosch, Esq., at Dickinson Wright PLLC, represents the
Official Committee of Unsecured Creditors.
SOLUTIA INC: Agrees to Sell Astaris Joint Venture for $255 Million
------------------------------------------------------------------
Solutia Inc. (OTC Bulletin Board: SOLUQ) and FMC Corporation have
reached a definitive agreement to sell Astaris, their 50/50
specialty phosphates joint venture. Under the terms of the
agreement, Israel Chemicals Limited will purchase substantially
all of the assets of Astaris for $255 million. This transaction
is subject to bankruptcy court approval, regulatory clearance and
various other conditions and contingencies.
"The Astaris divestiture is the latest step forward in a key
component of our reorganization strategy: building a portfolio of
high-potential businesses to form the core of reorganized
Solutia," said Jim Sullivan, senior vice president and chief
financial officer, Solutia Inc. "While Astaris has benefited
greatly from restructuring actions taken during 2004, it is a non-
core asset to Solutia that is a better strategic fit for a company
such as ICL."
Solutia will use the proceeds of the Astaris sale to partially pay
down the term loan portion of its debtor-in-possession financing.
The sale will be liquidity neutral for Solutia; however, it will
save the company interest costs associated with its DIP term loan.
ICL Performance Products is one of the four operating segments of
the ICL Group (TASE: CHIM), a multinational producer of a broad
range of chemicals and chemical-based products. ICL Performance
Products' 2004 revenues totaled approximately $583 million with
gross profit of approximately $179 million, two thirds of which
derived from the sale of food-grade phosphoric acid and specialty
downstream products manufactured from it. ICL Performance
Products' phosphoric acid is produced from phosphate rock mined by
ICL Fertilizers in Israel's Negev Desert. ICL Performance
Products' production facilities are located in Europe, Israel,
China and other countries.
FMC Corporation is a diversified chemical company serving
agricultural, industrial and consumer markets globally for more
than a century with innovative solutions, applications and quality
products. The company employs approximately 5,000 people
throughout the world and operates its businesses in three
segments: Agricultural Products, Specialty Chemicals and
Industrial Chemicals.
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. Solutia is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis.
SWEEPRITE MFG: Halts Business Operations & Delists Shares on TSX
----------------------------------------------------------------
Sweeprite Mfg. Inc. ceased business operations effective 4:00 p.m.
on August 30, 2005. The Corporation has requested the TSX Venture
Exchange to impose a halt trade of all shares of the Corporation
and has further expressed its intention to apply to the TSX
Venture Exchange for voluntary delisting of all listed shares of
the Corporation.
No further information on the matter was provided on Canada's
System for Electronic Document Analysis and Retrieval System, the
electronic filing system for the disclosure documents of public
companies and investment funds across Canada.
Sweeprite Mfg. Inc. is a widely held Saskatchewan based company,
which manufactures and distributes chassis-mounted street and
parking lot sweepers. Its principal offices are located in
Regina, Saskatchewan.
TIME WARNER: S&P Puts B Corporate Credit Rating on Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its long-term ratings
for Denver, Colorado-based competitive local exchange carrier
Time Warner Telecom Inc. and its related entities on CreditWatch,
with negative implications, including its 'B' corporate credit
rating. The 'B-2' short-term rating was affirmed. At
June 30, 2005, total debt outstanding for the company was
about $1.2 billion.
"The CreditWatch listing follows our heightened concerns about the
company's high financial leverage, at about 6x debt to EBITDA, and
elevated concern about its ultimate debt repayment prospects,"
said Standard & Poor's credit analyst Catherine Cosentino.
Over the past 18 months, Time Warner Telecom has been unable to
materially increase its overall revenue base. For the six months
ended June 30, 2005, enterprise/end user revenues rose by 17%.
However, this growth was tempered by flat results for the carrier
customer segment, resulting in overall revenue growth of only 7%.
This segment still represents a relatively sizeable part of the
company's overall revenue mix, at about 38% of total revenues,
despite Time Warner Telecom's efforts to expand its retail base.
In addition, net free cash flow after capital expenditures totaled
negative $42 million, reflecting the burden of high capital
expenditures and interest expense.
S&P will evaluate the company's strategic business plans and
prospects for achieving meaningful revenue and accompanying EBITDA
growth over the next six to 18 months in resolving the CreditWatch
placement. Without demonstration of a reasonable path to
achieving meaningful positive cash flow, ratings will be lowered.
TOM'S FOODS: Wants Court OK to Terminate Employee Pension Plan
--------------------------------------------------------------
Tom's Foods Inc., has filed an application with the Pension
Benefit Guaranty Corp. to terminate its employees pension plan,
according to a report by the Ledger-Inquirer. The Debtor filed
its application with the PBGC on Aug. 25, 2005, to terminate the
pension plan.
The Company cited financial difficulties for terminating the
pension plan and it says in its application with the PBGC that it
will stop benefit accruals under the plan by Oct. 7, 2005. The
Debtor says that approximately 3,500 active and retired employees
who are members of the pension plan will be affected by its
termination, according to the Ledger-Inquirer.
The Debtor says that the pension plan is underfunded by
$43 million, partially caused by falling interest rates and the
Company's investments in the bond market, which have been
depressed in recent years.
The Debtor informed its employees on Aug. 23, 2005, that it
decided to replace the pension plan with a 401(k) savings plan to
be funded mostly by the employees themselves. But a small group
of former workers have opposed the proposed termination of the
pension plan.
As reported in the Troubled Company Reporter on Aug. 10, 2005, Lyn
D. Anderson, a representative of Tom's Foods' former employees
filed a motion with the Bankruptcy Court to approve the
establishment of a Special Committee to represent the interests of
former employees pursuant to 11 U.S.C. Section 1102(a)(2) and 11
U.S.C. Section 1114(b).
One of the reasons cited by Ms. Anderson for the formation of a
Special Committee is for the proposed Committee to further study
the reasons for terminating the pension plan and the impact it
will have on both active and former workers. The Court has yet to
issue a ruling on the former employees' request to form a Special
Committee.
Headquartered in Columbus, Georgia, Tom's Foods Inc. manufactures
and distributes snack foods. Its product categories include
chips, sandwich crackers, baked goods, nuts, and candies. The
Company filed for chapter 11 protection on April 6, 2005 (Bankr.
M.D. Ga. Case No. 05-40683). David B. Kurzweil, Esq., at
Greenberg Traurig, LLP, represents the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it listed total assets of $93,100,000 and total debts of
$79,091,000.
UAL CORP: Wants Court Nod to Pay Deposit & Ink LOIs for Six Jets
----------------------------------------------------------------
UAL Corporation and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Northern District of Illinois to approve Letters of
Intent, dated Aug. 10, 2005, for the purchase of six Boeing 767-
300ER Aircraft and 12 Pratt & Whitney PW 4060 Engines.
The Aircraft bear Tail Nos. N642UA, N643UA, N644UA, N646UA,
N647UA and N661UA.
In addition, the Debtors seek the Court's approval, nunc pro
tunc, of the payment of non-refundable Deposits in accordance
with the LOIs.
According to James H.M. Sprayregen, Esq., at Kirkland & Ellis, in
Chicago, Illinois, the Aircraft and Engines were originally
financed through several pre-1997 public debt transactions. The
Debtors expended considerable effort in attempting to retain the
Aircraft due to the route and schedule disruption that would
result upon their loss. However, after lengthy negotiations, the
Debtors and the Trustees could not agree on new lease rates for
the Aircraft.
Without an agreement, Mr. Sprayregen explains, the Debtors risked
repossession of the Aircraft. If the Trustees repossessed the
Aircraft, the Debtors would have had to cancel lucrative flights.
At minimum, absence of the Aircraft will interfere with thousands
of the Debtors' customers, resulting in a material loss of
revenue and impairment of customer goodwill. Since the Aircraft
are optimized for international service, which generates
significant revenue, the Aircraft play an important role in the
Debtors' fleet and business plan.
The risks of repossession are likewise real, Mr. Sprayregen
continues. The Debtors' aircraft experts, Babcock & Brown,
advised that a shortage of supply prevails in the market for
Boeing 767-300 aircraft. Thus, the Trustees had ready
alternatives for the Aircraft in the secondary market. The
Trustees were inclined to repossess the Aircraft and shop them
for higher and better offers.
To solve this dispute, the Debtors have decided to buy the
Aircraft. Mr. Sprayregen says the Debtors will refinance the
transaction through a sale-leaseback or other financial
arrangement with a third party on more attractive terms than
those offered by the Trustees.
The Trustees have demanded that the Debtors pay the 10% Deposit
in exchange for forbearing repossession and suspending marketing
efforts, prior to Court approval of the request.
Mr. Sprayregen notes that the Deposit is non-refundable. If the
parties cannot close the transaction by September 12, 2005, the
Debtors will forfeit the Deposit.
The Trustees will be given an Allowed Unsecured Claim for a
deficiency claim of $786,637,712. The monthly adequate
protection payments will be increased after August 1, 2005, by
$2,269,000, for all six Aircraft.
According to Mr. Sprayregen, the operative documents for the
transaction are filed under seal. Non-redacted copies of the
documents have been provided to the Official Committee of
Unsecured Creditors, the DIP Lenders and the Court.
Responses
(1) Verizon Capital
Joseph D. Frank, Esq., at Frank/Gecker, LLP, in Chicago,
Illinois, tells Judge Wedoff that Verizon Capital Corporation
owns two of the Aircraft slated for sale, Tail Nos. N646UA and
N661UA.
Mr. Frank asserts that the Court cannot authorize the sale of the
Aircraft because the transaction violates industry standard
"anti-squeeze" provisions of the Trust Indentures. These
provisions prohibit the lenders from foreclosing on Verizon's
equity without simultaneously repossessing the Aircraft from the
Debtors. Anti-squeeze provisions are included in aircraft
financings to preclude precisely the strategy employed by the
Debtors. By requiring repossession from the lessee before sale,
the anti-squeeze provisions insure that the lenders will offer
the aircraft in the market place and obtain the best price.
Mr. Frank alleges that the Debtors have not followed the Case
Management Order. The Debtors did not serve a copy of their
request to either Verizon or Wilmington Trust Company, the Owner
Trustee. The request gives no indication that Verizon's rights
may be affected. Verizon only realized it was implicated by
recognizing the Tail Numbers of the aircraft as of its own.
(2) U.S. Bank
U.S. Bank, as Trustee, supports the Debtors' request. However,
Richard Hiersteiner, Esq., at Palmer & Dodge, in Boston,
Massachusetts, wants to clarify a point.
The sale of Aircraft was negotiated on a transaction-by-
transaction basis, Mr. Hiersteiner says. In the shorthand that
has arisen in the case, the Debtors refer to negotiations with
the Trustees.
These "references are regrettable," asserts Mr. Hiersteiner. The
only parties that negotiated the proposed transaction are the
holders and the Trustee in the specific transaction. The Trustee
has been directed and instructed by a majority of the holders in
each of the relevant transactions to proceed with the sale of its
particular Aircraft. Each transaction was master of its own fate
and agreed to the transaction individually.
Walt Disney Objects
Walt Disney Television and Pictures is the Owner Participant
under a structured aircraft lease for a Boeing 767-300 bearing
Tail No. N647UA. The Debtors propose to sell this aircraft,
among others.
Lisa H. Fenning, Esq., at Dewey Ballantine, in Los Angeles,
California, says that Disney was excluded from all negotiations
between the Debtors and the Indenture Trustee on this
transaction. Disney "does not consent to the sale of its
airplane in this manner," Ms. Fenning asserts.
According to Ms. Fenning, the operative lease documents for
N647UA contain provisions that prohibit the sale of the aircraft
to the Debtors without Disney's consent. These provisions
protect Disney's rights. These rights were expressly bargained
for as a material part of the structured lease transaction. As a
result, the Court should deny the Debtors' request to enter into
the transaction.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.
UAL CORP: Court Implements Adequate Protection Agreement
--------------------------------------------------------
On Aug. 2, 2005, UAL Corporation and its debtor-affiliates issued
a 10-day buyout notice to Wells Fargo Bank with respect to the
Senior Tranche of the 1997-1 EETC Transaction. To consummate the
purchase of the Senior Tranche, the Debtors had to deposit the
purchase price into an account designated by Wells Fargo, upon
expiration of the 10-day period.
Judge Wedoff authorized the Debtors to purchase the Senior
Tranche on Aug. 8, 2005.
Although the Debtors were ready to pay the purchase price, James
H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago, Illinois,
relates that Wells Fargo prevented the transaction from going
forward. Despite the Debtors' repeated requests, Wells Fargo
failed and refused to designate an account into which the Debtors
could deposit their payment.
During the 10-day period, Wells Fargo sent the Debtors two
letters openly proclaiming its refusal to act, stating that the
calculation of the purchase price was incorrect. Wells Fargo
alleged that a New York statutory judgment rate of 9% should
apply rather than the applicable Senior Tranche rate of LIBOR
plus 22 basis points. The 9% interest rate would inflate the
price by around $65,000,000.
However, Wells Fargo sold the Senior Tranche to another party.
On August 11, 2005, Wells Fargo faxed the Debtors a purported
"Notice of Sale," advising of a sale of the equipment notes in
the 1997-1 EETC that occurred on August 5, 2005.
The Notice of Sale was sent to the Debtors six days after the
purported sale allegedly happened, Mr. Sprayregen says. Counsel
for Wells Fargo told the Debtors that the sale was a "private
sale," made to a "special purpose vehicle" set up especially for
the purpose of effectuating the sale. Wells Fargo's counsel also
said that the beneficial owners of the special purpose vehicle
are the Holders of the Senior Tranche. Apparently, the sale
price included the $65,000,000 calculated under the inflated 9%
interest rate.
The Interim Adequate Protection Stipulation
Mr. Sprayregen recounts that the Interim Adequate Protection
Stipulation for 1997-1 EETC Aircraft was entered into in March
2003, and approved by the Court on April 16, 2003. The basic
purpose was to provide Wells Fargo, as Pass Through Trustee and
Subordination Agent for Series 1997-1 EETC, with adequate
protection payments, while discussions were ongoing between
itself and the Debtors to renegotiate the 1997-1 EETC.
In return for receiving the adequate protection payments, Wells
Fargo agreed "not to exercise any of [its] rights and remedies
that may exist under the Aircraft Agreements or under Section
1110(c) of the Bankruptcy Code or under any other applicable
law."
By this motion, the Debtors ask the Court to enforce the Interim
Adequate Protection Stipulation.
Mr. Sprayregen maintains that if an agreement between the Debtors
and Wells Fargo is not reached, the 14 aircraft may be
repossessed. Until the Debtors purchase the Senior Tranche, the
aircraft can be repossessed without much warning. Once the
Debtors buy the Senior Tranche, they can then control and
forestall repossession of the aircraft.
The Debtors have reached their desired fleet size and no
rejection opportunities remain. The Debtors must know the fate
of the 14 aircraft subject to the 1997-1 EETC. Time is of the
essence because JPMorgan Chase Bank's commitment to refinance the
transaction expires at the end of September 2005.
Mr. Sprayregen argues that Wells Fargo's attempt to thwart the
transaction should not be countenanced. The purported "August 5,
2005 Sale" is suspect and is a violation of the Interim Adequate
Protection Stipulation.
"The Court should enforce the Interim Adequate Protection
Stipulation and nullify the [August 5, 2005 Sale]," Mr.
Sprayregen asserts.
Wells Fargo Responds
James E. Spiotto, Esq., at Chapman and Cutler, in Chicago,
Illinois, alleges that the Debtors have circumvented the
priorities of the 1997-1 EETC Transaction by purchasing the
Junior Tranches under questionable circumstances.
The 1997 EETC Transaction contains a detailed interest rate reset
mechanism. Upon a Triggering Event like a bankruptcy filing by
the Debtors, the interest rate on the Equipment Notes is reset so
the Notes continue to trade at par. The Senior Tranche is
governed by New York law, which holds that where an agreement is
silent as to the post-maturity interest rate, the state judgment
rate applies. The applicable interest rate and the New York
judgment rate is 9%.
Mr. Spiotto says the Debtors are being unnecessarily hasty. The
Holders of the Senior Tranche have been negotiating with the
Debtors since January 2003. The Holders are entitled to careful
consideration of the purchase price by a court of competent
jurisdiction. There is no immediate threat to any Aircraft the
Debtors possess. There has been no violation of the Adequate
Protection Stipulation. There is no reason why the issue must be
brought before the Court now, Mr. Spiotto says.
* * *
The Court approves the Debtor's request.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.
UAL CORP: Wants Court Nod on Trustees & Debt Holders Agreement
--------------------------------------------------------------
After more than two years of negotiation, UAL Corporation and its
debtor-affiliates reached a settlement with certain pass-through
trustees, subordination agents, indenture trustees, or loan
trustees, and the controlling groups of holders of various public
debt instruments that will result in present value savings of over
$2,900,000,000.
"No other airline debtor has ever attempted, let alone achieved,
a restructuring of public aircraft debt on a comparable scale,"
notes James H.M. Sprayregen, Esq., at Kirkland & Ellis, in
Chicago, Illinois.
For this reason, the Debtors, the Trustees, and the Controlling
Holders ask the Court to authorize:
(a) the amendment or restructuring of certain transactions and
operative agreements, as necessary, and entry into and
consummation of the Restructuring Transactions, all in
accordance with the terms and conditions of certain term
sheets;
(b) the restructuring, settlement, and compromise of the
claims and interests of the Trustees and the Public Debt
Holders -- the Financiers -- relating to or arising from
Transactions and Operative Agreements and from the
Debtors' use of the Public Debt Aircraft;
(c) the modification of the automatic stay to allow the
Financiers to exercise certain remedies under the
Transactions; and
(d) the Permanent Releases.
The Trustees seek (i) a finding that the settlements on the terms
set forth in the Term Sheets are fair and reasonable to the
Public Debt Holders, and (ii) approval to enter into the
Settlement on the terms, so as to bind all Public Debt Holders.
According to Mr. Sprayregen, the Term Sheets embody:
-- global settlements between the Debtors and the Controlling
Holders for the Transactions;
-- a restructuring of the public aircraft debt issued in
connection with the Transactions; and
-- global settlements for certain private transactions in
which certain of the Public Debt Holders have cross-
holdings.
The Debtors' Fleet
Before the Petition Date, the Debtors operated a fleet of 567
aircraft. Of the fleet, 463 aircraft were financed through
leases or mortgages while 95 aircraft were owned outright and
pledged to the DIP lenders.
Out of the 463 financed aircraft, 158 or almost one-third of the
fleet, were funded through publicly traded, pass-through
certificates in 22 transactions. In the second quarter of 2005,
46% of the widebodies and 21% of the narrowbodies in the Debtors'
fleet were pledged to secure obligations to the Public Debt
Holders.
2nd Quarter 2005
Public Debt % Public Debt
Aircraft Aircraft Total Aircraft
-------- ----------- ----- -------------
B737-300 4 65 6%
B737-500 0 30 0%
A319 22 55 40%
A320 21 97 22%
B757 25 97 26%
----------- ----- -------------
Total Narrowbodies 72 344 21%
B767-200 0 0 0%
B767-300 (class ER, 2 & 3) 17 31 55%
B777-200 (class 2 & 3) 5 19 26%
B777-200ER (class 2 & 3) 12 33 36%
B747 (class 2 & 3) 18 31 58%
----------- ----- -------------
Total Widebodies 52 114 46%
----------- ----- -------------
Total 124 458 27%
=========== ===== =============
3-Class International
Aircraft Type
---------------------
B767-300ER 10 17 59%
B777-200 4 13 31%
B777-200ER 12 33 36%
B747-400 18 31 58%
----------- ----- -------------
Total 44 94 47%
=========== ===== =============
According to the Debtors' aircraft professionals at Babcock &
Brown, the aircraft market has recently improved, reducing the
spread between prepetition contractual rates and current market
rates. Meanwhile, the Public Debt Holders are seeking to reduce
their exposure to the Debtors' credit risk, even at market rates.
Thus, the Controlling Holders have attractive and immediate
options to diversify their portfolio by repossession,
foreclosure, re-letting or selling their aircraft to other
operators or lessors.
Aircraft Q1'04 Rent($) Q3'05 Rent($) %Increase
-------- ------------- ------------- ---------
B757s $137,500 $182,500 33%
B767s 257,000 392,000 53%
B747s 468,000 486,000 4%
Mr. Sprayregen maintains that the Term Sheets will produce
significant savings. On an aircraft-by-aircraft basis, the rates
under the Term Sheets do not approach the "auction pool" rates
achieved earlier in the Chapter 11 case, but in light of the
Debtors' need for virtually all of the remaining Public Debt
Aircraft, the Term Sheet rates are fair. The rates reflect hard
bargaining and the confluence of several factors, including:
(a) the Controlling Holders' enhanced leverage after the
Seventh Circuit's rulings, which rejected the Debtors'
antitrust arguments;
(b) the Debtors' progress in reaching its desired fleet size,
which limited lease rejection opportunities;
(c) the Debtors' increased focus on international routes and
the resultant reliance on widebody aircraft; and
(d) an improved used aircraft market.
During the period covered by the Term Sheets, the Debtors will
realize $300,000,000 in annual savings. When coupled with the
Debtors' other aircraft restructurings, from the auction pool,
manufacturer, and cross-border groups, fleet costs will be
reduced by $850,000,000 annually from 2003 to 2008.
Summary of Term Sheets
The Term Sheets restructure 16 Aircraft Financing Transactions:
-- the Post-1997 EETCs which consists of 2001-1 EETCs, 2000-2
EETCs, and 2000-1 EETCs;
-- certain Pre-1997 Transactions including 1991 B ETC, 1991 C
ETC, 1991 D ETC, 1991 E ETC, 1991 A PTC, 1991 B PTC, 1992 A
PTC, 1994 AA PTC, 1994 BB PTC, 1995 A PTC, JETS 1994-A, and
JETS 1995-B; and
-- one privately financed aircraft bearing Tail No. N533UA.
Mr. Sprayregen notes that resolution of the 1997-1 EETC financing
is proceeding along a separate track.
The Term Sheets contemplate:
1) Revised payment schedules for each of the Restructured
Transactions;
2) Deferral of remedies by the Financiers with respect to
each Transaction under the applicable Operative Agreements
and the Bankruptcy Code and suspension of any pending
Section 1110(c) demands;
3) Restructuring the Operative Agreements governing the
Restructured Transactions;
4) The Debtors' agreement not to reject leases or abandon
any additional Public Debt Aircraft. Mr. Sprayregen says
45 Aircraft have already been rejected or abandoned and
seven repossessed;
5) Settlement and release of the Financiers' administrative
claims, in consideration for:
-- the rates paid by the Debtors under the Restructured
Transactions;
-- a $65,000,000 payment to be shared solely among the
Pre-1997 Restructured Transactions;
-- additional principal and interest payments made in
the Post-1997 EETC Restructured Transactions; and
-- the Debtors directing the Pension Benefit Guaranty
Corporation to assign, for the benefit of the Pre-
1997 Restructured Transactions, $0.50 of each dollar
of value derived from 45% of PBGC's unfunded benefit
liability claim up to, but not exceeding,
$100,000,000.
The Debtors will not guarantee the proceeds from the
PBGC's claim and are not obligated to top-off the
PBGC Claim Proceeds if less than $100,000,000;
6) Settlement of the Financiers' general unsecured deficiency
claims in the aggregate amount of $3,100,000,000, with the
Unsecured Claims incorporated into the Debtors' Plan of
Reorganization as allowed prepetition, general unsecured
claims;
7) Payment by the Debtors of all reasonable costs, fees, and
expenses of the Trustees, the Public Debt Holders, the
Controlling Holders and their representatives, including
counsel and technical, financial and other professional
advisors;
8) Performance of certain maintenance obligations by the
Debtors and the posting of security in the event of a
default, including a super-priority administrative claim
for the cost of unperformed obligations;
9) Confirming the rates paid on 1110(a) Aircraft with the
rates under the Term Sheets;
10) Amending the Interim Adequate Protection Stipulations to
conform with the Term Sheets in certain respects; and
11) The purchase of six Aircraft of the Public Debt Aircraft.
Mr. Sprayregen says the Debtors' Plan of Reorganization will be
consistent with the Term Sheets. The Restructuring Transactions
will be:
* incorporated into the Plan;
* unimpaired by the Plan; and
* will be final and binding postpetition obligations of the
Debtors and of Reorganized United, subject to certain
specified "Unwind Events".
In the event of Unwind Events, including conversion to Chapter 7
or failure by the Debtors to file a Plan of Reorganization by
January 31, 2006, or obtain confirmation by June 30, 2006, the
agreements and transactions contemplated by the Term Sheets,
other than the Permanent Release, will be unwound and rescinded
and the parties' rights, claims, obligations, and defenses
would be restored. Notwithstanding the Permanent Release, if an
Unwind Event occurs, any defenses or offsets of the Debtors
existing prior to the Unwind Event are preserved, so long as the
Debtors do not seek any affirmative recovery against the
Financiers.
With respect to the Pre-1997 and private Transactions, the
Restructured Transactions contemplate conversion to operating
leases having terms ranging from 8.4 to 11.3 years. For the
Post-1997 EETCs, the Debtors will issue a new note for each
aircraft with the original contractual coupon rate and maturities
ranging from 6.25 to 7.2 years.
The Restructuring Transactions and the Restructured Operative
Agreements will incorporate, for the benefit of the Public Debt
Holders, cross-collateralization and cross-default provisions
within certain of the Restructuring Transactions, representations
and warranties, and default, loss, return, insurance, inspection,
maintenance, filing, and indemnification provisions.
In addition to these terms, Mr. Sprayregen says the Term Sheets
are notable for their omissions. For instance, the Controlling
Holders requested $400,000,000 in security deposits, which the
Debtors refused to post. The Debtors also declined to pay
maintenance reserves that would have built over time to some $110
million. As an alternative, to preserve liquidity, the Debtors
agreed to the maintenance assurance provisions upon a default in
its maintenance obligations. The Debtors also do not agree to
monetizing equity in Reorganized United, as the June 2004 Final
Deal Term Sheet had contemplated.
In exchange for a full release from the Financiers'
administrative and other postpetition claims, the Debtors have
agreed to the rates and payments in the Term Sheets, including a
$65,000,000 lump-sum payment to the Pre-1997 Transactions, and
the assignment of the PBGC Claim Proceeds to the Pre-1997
Transactions.
By these payments, the Debtors effectively obtain a release from
claims for additional damages suffered by the Financiers from
returned Aircraft. In certain instances, the Public Debt
Aircraft were rejected and returned in "run-out" condition,
requiring significant maintenance and other work on order to
re-market the Aircraft. While the Public Debt Holders may or may
not have legally cognizable claims against the bankruptcy estate
on account of the losses, they certainly could -- and did --
insist on compensation for actual economic harm suffered as the
price to avoid further repossessions. Through the payments and
the offering of the PBGC Claim Proceeds, the Debtors avoid
repossession, and compensate the holders for out-of-pocket
expenses incurred in refurbishing returned aircraft.
Terms Sheets Must Be Approved
The Term Sheets and the Restructuring Transactions constitute an
integral component of the Debtors' overall restructuring and Plan
of Reorganization, Mr. Sprayregen explains. In terms of dollar
amounts, number of aircraft as issue, as well as number of
aircraft and operational consequences, the Term Sheets represent
one of the most important transactions in the Chapter 11 cases.
The Term Sheets will conclude the disposition of the Public Debt
Aircraft and allow the Debtors to move forward with their
business plan and exit from bankruptcy.
A complete list of the Transactions and Aircraft is available for
free at:
http://bankrupt.com/misc/list_of_transactions_&_aircraft.pdf
Filed Under Seal
Mr. Sprayregen notes that the Debtors have filed the Term Sheets
with all proprietary commercial information redacted. The
Debtors intend to file unredacted copies of the Term Sheets under
seal because these contain the purchase price for certain
aircraft, which is proprietary commercial information.
Manufacturers, financiers, and others would gain an advantage in
negotiations if they acquire knowledge of the price at which the
Debtors seek to purchase aircraft. By filing the unredacted Term
Sheets under seal, the Debtors will preserve the confidentiality
of material terms of the Term Sheets and maintain a level playing
field with their competitors.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.
UAL CORP: Frequent Flyer War Brews with Northwest
-------------------------------------------------
The Associated Press reports that Northwest Airlines offered its
passengers double frequent flier miles to counter a frequent flier
promotion launched by United Airlines two days after Northwest
mechanics went on strike.
The AP relates that UAL's double frequent-flier miles promo wasn't
publicized and posted on its Web site. Instead, the offer was
sent via e-mail to what appears to be Northwest's customers in its
core territory in the upper Midwest.
Andy Petersen at Inside Flier commented that it's cheap for United
to move market share since Northwest is on the ropes.
Robin Urbanski, United's spokesperson, acknowledged to the AP that
the promotion is aimed at Northwest's customers. UAL also honors
Northwest paper tickets as long as the itineraries match. Ms.
Urbanski emphasized that United is just helping customers affected
by the strike at Northwest.
United's offer, which ends Sept. 30, is aimed at a narrow group of
travelers in the Midwest. Northwest's offer is good nationwide
and ends Oct. 9, the AP reports
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.
Northwest Airlines Corp. is the world's fifth largest airline with
hubs in Detroit, Minneapolis/St. Paul, Memphis, Tokyo and
Amsterdam, and approximately 1,600 daily departures. Northwest is
a member of SkyTeam, an airline alliance that offers customers one
of the world's most extensive global networks. Northwest and its
travel partners serve more than 900 cities in excess of 160
countries on six continents.
At June 30, 2005, Northwest Airlines' balance sheet showed a
$3,752,000,000 stockholders' deficit, compared to a $3,087,000,000
deficit at Dec. 31, 2004.
UNITED RENTALS: Extends Consent Solicitation to Sept. 9
-------------------------------------------------------
United Rentals, Inc. (NYSE: URI) extended the expiration time for
its pending solicitations of consents from holders of its
outstanding bonds and QUIPs securities. As extended, the consent
solicitations are now scheduled to expire at 5:00 p.m., New York
City time, on September 9, 2005.
As reported in the Troubled Company Reporter on Aug. 25, 2005, the
Company solicited consents for amendments to the indentures
governing its bonds and QUIPs securities, which would allow the
company additional time to make certain SEC filings. As
previously announced, the company has delayed filing its Form 10-K
for 2004 and Form 10-Qs for subsequent 2005 quarters.
The consents are being solicited from the holders of these five
securities:
-- 6 1/2% Senior Notes due 2012;
-- 7 3/4% Senior Subordinated Notes due 2013;
-- 7% Senior Subordinated Notes due 2014;
-- 1 7/8% Convertible Senior Subordinated Notes due 2023; and
-- 6 1/2% Convertible Quarterly Income Preferred Securities.
The indentures for the securities require the company to timely
file required annual and other periodic reports with the SEC. The
proposed amendments would, among other things, allow the company
up until March 31, 2006, to regain compliance with this
requirement and waive any violation of this requirement that has
previously occurred.
United Rentals, Inc. -- http://www.unitedrentals.com/-- is the
largest equipment rental company in the world, with an integrated
network of more than 730 rental locations in 48 states, 10
Canadian provinces and Mexico. The company's 13,200 employees
serve construction and industrial customers, utilities,
municipalities, homeowners and others. The company offers for
rent over 600 different types of equipment with a total original
cost of $3.9 billion. United Rentals is a member of the Standard
& Poor's MidCap 400 Index and the Russell 2000 Index(R) and is
headquartered in Greenwich, Connecticut.
* * *
As reported in the Troubled Company Reporter on July 18, 2005,
Moody's Investors Service lowered the long-term ratings of United
Rental (North America) Inc. and its related entities:
* Corporate Family Rating (previously called Senior Implied)
to B1 from Ba3;
* Senior Unsecured to B2 from B1; Senior Subordinate to B3
from B2; and
* Quarterly Income Preferred Securities to Caa1 from B3.
The rating action is prompted by the continuing challenges facing
the company in resolving the pending SEC investigation and certain
accounting irregularities. These challenges are accentuated by
today's announcement regarding the employment status of the
company's President and Chief Financial Officer. URI's board
determined that refusal by the President and CFO to answer
questions at this time by the special committee of the board
constitutes a failure to perform his duties, and would constitute
grounds for termination if not cured within the thirty-day cure
period provided by his employment agreement. The special
committee of the board is reviewing matters relating to the
previously disclosed SEC inquiry of the company.
US AIRWAYS: Asset Sale Programs Improve Cash Flow
-------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
gave US Airways Group, Inc., and its debtor-affiliates permission
to close on its previously announced plans to sell certain Embraer
regional jet aircraft and slot assets to Republic Airways
Holdings. Upon closing, the transaction, expected to occur within
the next two weeks, will provide US Airways with approximately
$100 million in cash.
US Airways also filed motions this week, and received interim
approval, to sell and leaseback five Airbus A330's, nine Airbus
A319's and five Airbus A320's. The Bankruptcy Court is scheduled
to hear the sale and leaseback transactions on Sept. 9, 2005. If
approved and consummated later this month, US Airways would
realize additional liquidity in excess of $120 million, bringing
the total liquidity generated from aircraft transactions in
connection with its emergence from Chapter 11 to approximately
$300 million, which will strengthen the company's cash position as
part of its proposed merger with America West Airlines. If the
merger closes as planned, the new airline is expected to have
approximately $2.5 billion in total cash shortly after closing,
including approximately $800 million in restricted cash.
"We are very pleased with the results of our asset sale programs.
The
additional liquidity realized from these transactions, when added
to the cash being generated from other capital resources, should
allow us to emerge from Chapter 11 with an even larger cash
cushion than originally anticipated," said Ron Stanley, US Airways
executive vice president of finance and CFO.
Mr. Stanley added that these developments are extremely positive
given that high fuel prices have created financial turmoil for the
airline industry.
The Court also approved a deal reached between US Airways and the
Pension Benefit Guaranty Corp., resolving nearly $2.7 billion in
claims. The agreement provides for US Airways to pay the PBGC
$13.5 million in cash, in addition to giving the PBGC a $10
million note and 70 percent of the common stock being allocated to
unsecured creditors.
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 UNWIRED: S&P Raises Corporate Credit Rating to BBB- from CCC+
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on wireless
telecommunications carrier US Unwired Inc. The corporate credit
rating was raised to 'BBB-' from 'CCC+'.
"The upgrade follows the completion of Sprint Nextel Corp.'s
(A-/Stable/--) acquisition of US Unwired's equity for about $1
billion cash, plus the $365 million in US Unwired debt," said
Standard & Poor's credit analyst Eric Geil.
All ratings on US Unwired are removed from CreditWatch, where they
were placed with positive implications on July 11, 2005, following
the announcement that the company agreed to be acquired by Sprint
Corp. (subsequently renamed Sprint Nextel Corp. upon completion of
the merger of Sprint Corp. with Nextel Communications Inc.) The
outlook is stable.
US Unwired, now a direct subsidiary of Sprint Nextel Corp., was
originally organized as wireless affiliate of Sprint and serves
more than 500,000 customers in regions with a total population of
11.3 million people in the Southeast U.S. US Unwired's operations
are strategic to Sprint Nextel given their importance as an
element of Sprint's nationwide wireless network. For this reason,
S&P imputes material support for US Unwired from Sprint Nextel.
However, at 'BBB-', our corporate credit rating on US Unwired is
lower than that on Sprint Nextel because Sprint Nextel might have
somewhat less incentive to support the US Unwired operations in
the event of financial stress. This view is based on US Unwired's
lack of wireless spectrum licenses, and the longer-term potential
for Sprint Nextel to use Nextel network facilities to serve US
Unwired markets, given plans to consolidate the Sprint and Nextel
networks onto a common technology platform.
USG CORP: Wants Illinois Multi-Mil. Income Tax Claims Liquidated
----------------------------------------------------------------
The State of Illinois recently completed an audit of the Illinois
tax returns for USG Corporation, its debtor-affiliates and its
non-debtor affiliates for calendar years 1997 through 2000. As a
result of the audit, Illinois issued notices of deficiency to the
USG Companies in the amount of $2.1 million, including a
$1,537,705 notice of deficiency issued to USG Corporation and a
$630,505 notice of deficiency issued to USG Funding Corporation, a
direct subsidiary of USG Corporation.
The USG Companies dispute that they owe any of the tax asserted
in the notices of deficiency. Daniel J. DeFranceschi, Esq., at
Richards, Layton & Finger, P.A., in Wilmington, Delaware, tells
Judge Fitzgerald that the legal issue in dispute is whether USG
Funding is a "financial organization" under Illinois tax law.
Mr. DeFranceschi relates that the State of Illinois issued the
deficiency notice on August 12, 2005, and the Debtors received
the notice on August 22, 2005. According to the applicable
Illinois statutes, the USG Companies have until October 11, 2005,
to challenge the deficiencies notices within the Illinois
Department of Revenue.
Mr. DeFranceschi says that if the USG Companies fail to challenge
the deficiency notices within that period, Illinois will assess
the taxes against the USG Companies in the amount reflected in
the notices and, from the state's perspective, those amounts will
be final.
Under the Illinois law, the USG Companies may challenge the
notices by depositing the amount alleged to be owed with the
State of Illinois, including prepetition interest, under protest
pursuant to the Illinois State Officers and Employees Money
Disposition Act, 30 ILCS 2.30, et al. These deposits, Mr.
DeFranceschi says, create jurisdiction with the Illinois trial
courts to determine the tax-related disputes between the USG
Companies and the State of Illinois.
The USG Companies must also make the Deposits, as well as file
complaints with the Illinois state court, on October 11, 2005.
Otherwise, arguably there would be no legal dispute between with
the State of Illinois since, as a matter of Illinois law, the USG
Companies' tax liability would be final.
The Debtors believe that the best forum to challenge the notice
of deficiencies is in the Illinois state courts. In this regard,
the Debtors seek the Bankruptcy Court's authority to liquidate
the Tax Liability in that forum.
Mr. DeFranceschi relates that judgment of the Illinois trial
court would be binding for purposes of liquidating the State of
Illinois' Proof of Claim in the Debtors' bankruptcy cases,
subject to the parties' rights of appeal under Illinois law.
The Debtors also seek permission to make the Deposits required
under Illinois law to create jurisdiction in the Illinois trial
court to hear the tax dispute underlying the notices of
deficiency.
In the event that the Debtors are successful in their challenge
to the deficiency notices, the Deposits will be returned to them
with interest. To the extent the Debtors are not successful,
however, the Illinois Department of Revenue would be entitled to
keep from the Deposits the amount of Tax Liability determined to
be owed by the Illinois state courts.
As a result, Mr. DeFranceschi points out, by making the Deposits,
the Debtors potentially are paying prepetition debt, as, again,
the Tax Liability is for calendar years 1997 through 2000.
Mr. DeFranceschi reminds Judge Fitzgerald that Section
507(a)(8)(A)(i) of the Bankruptcy Code provides that "a tax on or
measured by income" is an eighth priority claim if the tax is
"for a taxable year ending on or before the date of the filing of
the petition for which a return, if required, is last due,
including extensions, after three years before the date of the
filing of the petition."
Under Illinois law, a return for state income taxes is last due,
including extensions, on October 15 of the year following the
calendar year at issue.
As a result, the Debtors' 1997 Illinois state tax return was last
due, with extensions, on October 15, 1998, which is after three
years before the Petition Date. Returns for tax years 1998-2000
obviously were due even later.
Therefore, if the State of Illinois has any claim for the Tax
Liability, that claim is a priority claim in the Debtors' Chapter
11 cases.
As is well known, the Debtors believe that they are solvent,
which assertion is supported by the current market capitalization
of USG Corp.'s common stock, which is in excess of $2.6 billion.
However, because the Debtors have effectively no secured debt --
whether or not they are solvent -- priority claims clearly will
be paid in full in the Debtors' cases, and the Debtors would be
required to pay those priority tax claims in full cash under a
plan of reorganization.
Hence, Mr. DeFranceschi points out, making the Deposits will not
prejudice unsecured creditors even if the Debtors, contrary to
their expectations, do not prevail in their state court tax
litigation. Nonetheless, Mr. DeFranceschi assures Judge
Fitzgerald that neither the making of the Deposits nor any order
on the Motion will permit the Deposits to be used for the payment
of postpetition interest on any prepetition claims against the
Debtors without further Bankruptcy Court order.
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. (USG
Bankruptcy News, Issue No. 95; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
USI HOLDINGS: Fitch Assigns BB- Long-Term Issuer Rating
-------------------------------------------------------
Fitch Ratings has assigned a 'BB-' long-term issuer rating for USI
Holdings Corporation. The Rating Outlook is Stable.
Fitch's rating reflects USIH's adequate capitalization and recent
operating performance improvement, good cash flow and financial
flexibility, niche market position, and management experience.
Partially offsetting these positives include historically high
financial leverage, a significant amount of intangible assets
related to USIH's past acquisition activity, lower operating
margins relative to middle-market peers, a lack of business
diversity relative to the large global brokers, and the effects of
a softening property/casualty insurance market.
Operating performance and balance sheet strength have improved in
recent years as USIH has taken steps to improve operating margins,
reduce debt, and consistently generate positive cash flow,
although first-half 2005 operating results were negatively
affected by the sale of discontinued businesses. Six-months year-
to-date 2005 pretax operating income was $12 million versus $19
million in 2004.
Historically, USIH's growth strategy was focused on quick growth
through acquisitions, resulting in high debt and goodwill levels
as well as integration issues. At June 30, 2005, total debt-to-
total capital was 37% and goodwill was roughly 96% of equity.
Fitch views USIH's current transition toward an organic growth
focus with a greater emphasis on client retention and cross-
selling, with only select strategic acquisitions and improved
expense control, as a positive development.
Although USIH has less business diversity than the largest global
brokers, it is a leading provider of employee benefits brokerage
services in addition to its property/casualty brokerage
operations. Employee benefits business tends to be counter-
cyclical to the property/casualty market. USIH's employee
benefits business generates roughly 42% of is total revenues.
Fitch believes that the ongoing industry-wide broker investigation
related to the pricing and placement of insurance has not
distracted USIH from running its business, nor has it, in Fitch's
opinion, negatively affected USIH's business model. Fitch
believes USIH has taken adequate steps to enhance transparency and
to date has fully cooperated with regulatory entities including
various attorney general and SEC regulatory inquiries.
Fitch believes that the middle-market insurance brokers operate in
an environment with significantly more competition relative to the
global insurance broker market, therefore reducing the potential
for 'bid-rigging' and other fraudulent activities. Contingent
commissions make up 4% of USIH's total commissions and, in Fitch's
view, could more than likely be replaced if contingent commissions
were no longer available.
USIH is a leading provider of insurance products and services to
middle-market companies, specializing in both employee benefits
and property/casualty brokerage business. With operations in 18
states, USIH is the 10th largest insurance broker in the United
States based on full-year 2004 revenues of $407 million.
Fitch has a Stable Outlook on:
USI Holdings Corporation
-- Long-term issuer, 'BB-'
VARIG S.A.: Reports BRL342.4 Million Net Loss In 2nd Quarter
------------------------------------------------------------
VARIG, S.A., reported a BRL342.4 million net loss for the second
quarter of the year 2005, down 13% from BRL393.9 million a year
earlier.
Market share fell to 26.5% at the end of the quarter from 31.2%
a year ago, even though passenger numbers rose around 10% both
on flights inside the country and abroad as Brazilians started
to travel more, encouraged by a stronger economy.
The Company's fuel costs in the first six months of the year
jumped 24%. VARIG closed June with a fleet of 88 aircraft, down
from 92 a year earlier.
VARIG said it benefited from exchange-rate variations, as the
real appreciated about 14% during the quarter. Analysts say it
needs a cash injection urgently to keep flying.
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia. VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage. The Debtors may be the first case under the new law,
which took effect on June 9, 2005. Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative. In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VARIG S.A.: Show Slight Domestic Market Share Recovery in July
--------------------------------------------------------------
VARIG, S.A., recovered some of its share of the domestic market in
July 2005, Dow Jones Newswires reports, citing figures from
Brazil's civil aviation department.
VARIG's share of the domestic market moved up to 26.5% in July
from 26% in June but was still down from last year's 29.5%, the
aviation department's figures revealed.
In the international market, VARIG continued to lose ground
against its Brazilian rivals. Its share of the international
market fell to 76.9%, down from 82% a year ago.
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia. VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage. The Debtors may be the first case under the new law,
which took effect on June 9, 2005. Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative. In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VARIG S.A.: Willis Lease Wants to Repossess Engines
---------------------------------------------------
Willis Lease Finance Corporation asks the U.S. Bankruptcy Court
for the Southern District of New York to modify the Preliminary
Injunction so it can repossess eight engines leased to Varig S.A.
Willis Lease Finance Corporation the engines to VARIG, S.A., and
its affiliate Rio-Sul Linhas Aereas, S.A. All the Leases are
short-term leases, and six of them will expire by September 30,
2005, at the latest. The monthly rent on the eight Willis Engines
aggregates $446,812.
David A. Rosenzweig, Esq., at Fulbright & Jaworski, LLP, in New
York, relates that one lease has already expired, but the engine
has not been returned and is believed to be in VARIG's service.
As of August 22, 2005, rent and maintenance reserve arrears under
the Willis Lease aggregated $904,766.
Mr. Rosenzweig recounts that when the Bankruptcy Court entered
the preliminary injunction on June 27, 2005, the Order provided
that aircraft lessors could initiate a hearing on "an emergency
basis" if VARIG were to remain in payment default five days after
notice. VARIG has not cured defaults on the Willis Engines.
According to Mr. Rosenzweig, the market for spare engines is
strong, in part because many airlines like VARIG are financially
incapable of repairing engines and therefore resort to leasing
spare engines instead. Willis, therefore, believes that it can
return the VARIG engines to service with a more credit-worthy
operator quickly after recovering possession.
VARIG had previously assured the Court that cash flow from
current operations would produce liquidity sufficient to service
aircraft lease payments coming due after the reorganization cases
were begun on June 17, 2005. VARIG's prediction has proven
untrue, Mr. Rosenzweig says. The nature of VARIG's problems
implies that it is incapable of curing its aircraft payment
defaults immediately.
Mr. Rosenzweig notes that Brazilian law does not relieve VARIG
from liens placed on its accounts receivable or credit card
income in Brazil and probably in Europe. Accordingly, VARIG's
incoming cash flow has been compromised. Likewise, Brazilian law
does not afford VARIG protection from the claims of its
employees, in distinction to U.S. law. The two factors in
combination with dramatically rising fuel prices have rendered
VARIG incapable of paying for its aircraft and spare engines.
Mr. Rosenzweig states that VARIG maintained having arranged an
asset sale of receivables in lieu of its $88 million DIP
financing. About one-third of the funds are earmarked to cure
defaults under aircraft and spare engine operating leases.
However, the possibility remains that VARIG may be compelled
under Brazilian law to apply the funds to claims other than from
aircraft finance and leasing parties.
Accordingly, Willis has no assurance that the past due amounts
will be paid. As of the close of business on August 18, 2005, a
letter of intent describing VARIG's proposal was unsigned. Yet,
if the Letter of Intent is signed, approval of the Brazilian
court is required. Thus, the transactions will not close and
funds will not become available for three or four more weeks.
This means that Willis's engines will continue to be used without
payment of maintenance reserves. Even so, VARIG cannot provide
assurance that it will resume regular payments after September.
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia. VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage. The Debtors may be the first case under the new law,
which took effect on June 9, 2005. Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative. In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
W.R. GRACE: Files Status Report Concerning Case Management Issues
-----------------------------------------------------------------
Pursuant to the rulings of the U.S. Bankruptcy Court for the
District of Delaware on July 19, 2005, W.R. Grace & Co., and its
debtor-affiliates delivered to Judge Fitzgerald a status report
on:
-- the selection of a discovery mediator;
-- the personal injury claimant Questionnaire;
-- the PI claims estimation case management order; and
-- the Debtors' intent to seek discovery of claimant's
attorneys.
Selection of a Mediator
The Debtors and the Asbestos Personal Injury Committee jointly
nominate Judge Roger M. Whelan to serve as mediator to facilitate
the settlement of any discovery disputes that may arise in the
asbestos personal injury estimation and objection to claims
process. A certification of counsel reflecting that agreement
has been filed pursuant to the Court's order on July 20, 2005.
The Debtors ask the Court to appoint Judge Whelan as mediator.
The PI Claimant Questionnaire
David W. Carickhoff, Jr., Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub P.C., in Wilmington, Delaware, relates
that after hearing argument from all interested parties and a
line-by-line analysis of the Questionnaire, the Debtors revised
the Questionnaire to reflect the Court's rulings.
On August 10, 2005, the Debtors presented the revised
Questionnaire to the Asbestos PI Committee and other interested
parties. On August 22, 2005, the Debtors, the PI Committee, and
all other interested parties participated in a telephonic
conference to discuss the Questionnaire during which various
parties requested additional changes to the Questionnaire.
Subsequently, the Debtors revised the Questionnaire and CMO to
reflect several of the modifications requested by the PI
Committee, the Futures Claimant Representative, and the insurers.
The Debtors conferred with the PI Committee, the Futures
Representative, and the insurers for a second time on August 24,
2005.
At that time, the parties have reached an agreement that the
Revised Questionnaire accurately reflects the July 19, 2005
rulings made by the Court, with the exception of four provisions
requested by the PI Committee:
-- additional Questionnaire instructions;
-- pulmonary function test tracings;
-- additional text boxes for each condition alleged in the
Questionnaire; and
-- exposure sites to non-Grace asbestos products.
Mr. Carickhoff notes that the PI Committee's proposed changes
threaten to undermine the effectiveness of the Questionnaire as a
discovery tool.
Hence, the Debtors ask the Court to approve the revised
Questionnaire.
A full-text copy of the Revised Asbestos PI Questionnaire is
available for free at:
http://bankrupt.com/misc/Revised_Asbestos_PI_Questionnaire.pdf
The PI CMO
The parties disagree on certain parts of the CMO, which currently
provides that depositions of expert and non-expert witnesses may
commence at any time but must be concluded by July 28, 2006.
The PI Committee had requested inclusion of a provision
restricting expert depositions to one deposition per expert, to
be conducted only after the date for filing supplemental expert
reports.
The Debtors disagree with the PI Committee's proposition because:
(i) the Committee's proposed revision was not part of the
agreed PI CMO presented to the Court at the July 19, 2005,
hearing; and
(ii) the proposed revision dangerously pushes expert discovery
back to the very end of the schedule, making it likely
that the parties will be forced to seek a time extension
under the current schedule to complete the estimation
expert depositions.
To accommodate the PI Committee's request, however, the Debtors
have offered to agree to the proposed modification provided that:
* the PI Committee agrees that its experts and the experts of
the Futures Representative will be deposed first;
* a party may receive additional time to depose an expert upon
good cause shown; and
* the parties be provided an additional 15 to 30 days to
complete the depositions of the estimation experts.
The parties also disagree on the provision stating that any pre-
trial motions, including motions in limine, Daubert, and summary
judgment motions must be filed no later than August 1, 2006.
The PI Committee does not believe that reply briefs should be
allowed to any pre-trial motions including motions in limine,
Daubert motions, and summary judgment motions.
Mr. Carickhoff, however, points that it has been the Court's
practice throughout the entire proceeding to allow parties to
respond to a substantive pleading with a five-page reply brief.
The PI Committee's recommendation to prevent any party from
submitting a reply brief, with respect to the most important
substantive motions that will be filed, abandons the Court's
established practices. Prohibiting reply briefs will prevent the
parties from fully developing those highly relevant issues.
The Debtors ask the Court to approve the revised PI Claims
Estimation CMO.
Discovery of Claimants' Attorneys
As part of the Asbestos PI Questionnaire, the Debtors sought
information relating to the direct and indirect financial
relationships among the claimants' attorneys, doctors and
screening companies. Information regarding those relationships
is relevant to the reliability of the medical data underlying the
claims and to determining whether, as the evidence suggests, many
of the asbestos claims against WR Grace suffer from the same
problems, including unreliability and possibly fraud, that
plagued the Texas Silica MDL claims.
Moreover, Mr. Carickhoff maintains that information is critical
if the Court is to base its estimation on the most accurate
available data, which are important not only to the estimation of
present claims but also to future claims. The Court has
previously recognized the interest the Debtors have in obtaining
this type of information and its potential relevance and
importance to the ultimate estimation of the personal injury
claims.
At the July 19 hearing, however, the Court ruled that the
Questionnaire was not the appropriate vehicle for obtaining the
important information. Instead, the Court suggested that the
claimants' attorneys are uniquely in possession of that relevant
information and therefore are the best and most appropriate
target for the discovery sought by the Debtors. Thus, the
Debtors have given considerable thought to and are prepared to
discuss with the Court how best to obtain that information
through the most efficient and least intrusive means.
The Debtors seek permission to raise to the Court the issue of
how best to obtain relevant information discovery from the
claimants' attorneys.
Court Approves Debtors' Questionnaire and CMO
The Court approves the Debtors' Questionnaire in line with the
proposed case management order governing the estimation of
asbestos personal injury claims. The Court directs all Asbestos
PI Claimholders, for which litigation was commenced before the
Petition Date, to complete and serve the Questionnaire.
Judge Fitzgerald rules that these schedules will govern the
deadlines with respect to the Questionnaire:
September 12, 2005 Last day for the Debtors to serve the
Questionnaire on counsel of record for
all Asbestos PI Prepetition Litigation
Claims via direct U.S. mail to the Office
of the United States Trustee, counsel to
the official committees appointed in the
Debtors' Chapter 11 cases and counsel to
the Future Claimants Representative.
January 12, 2006 Last day for persons who hold, or
5:00 p.m. attorneys who represent persons who hold,
Asbestos PI Prepetition Litigation Claims
against any of the Debtors to complete
and serve the Questionnaire.
Questionnaires that are postmarked as
mailed on or before January 12, 2006,
will be considered timely served.
March 13, 2006 Last day for the Debtors' claims
processing agent to compile the
Questionnaire information into a
navigable database and make it available
to the Debtors and any parties in the
estimation proceedings, including those
parties' experts and advisors.
Judge Fitzgerald directs the Debtors, the Official Committees of
Unsecured Creditors, and the Futures Representative to use their
best efforts, consistent with their duties, to include in any
trust distribution procedures approved as part of a plan of
reorganization provisions prioritizing the processing of claims
for which the Questionnaires have been timely returned as
completely and accurately as possible.
The Court also fixes these deadlines and relevant dates:
November 14, 2005 Last day for all parties seeking to call
one or more experts to testify to
designate the categories to be addressed
by those experts. The expert categories
may be supplemented no later than
November 28, 2005.
December 19, 2005 Last day for all parties to designate
their experts. Thereafter, a party may
substitute and add one or more experts
not previously designated on or before
December 19, 2005.
December 22, 2005 Last day for parties to exchange
preliminary designations of the non-
expert witnesses each intends to call at
the Asbestos PI Estimation Hearing.
February 16, 2006 Last day for parties seeking to call one
or more experts to testify as to matters
other than the number, amount, and value
of present and future asbestos claims, to
produce and serve a report in compliance
with Rule 26(a)(2) of the Federal Rules
of Civil Procedure from each expert.
These expert reports may be supplemented
by April 13, 2006.
April 13, 2006 Last day for parties seeking to call one
or more experts to testify as to an
estimated value of the Debtors' Asbestos
PI Claims, to produce and serve a report
from each expert, which report may be
supplemented by June 12, 2006.
July 2006 A preliminary pre-trial conference on the
Asbestos PI Estimation will be held at
the first omnibus hearing after June 30,
2006, at which time the Court may set a
final pre-trial conference date in August
2006 and a trial date in September 2006.
July 28, 2006 Conclusion of all written fact discovery
and depositions of expert and non-expert
witnesses.
All written fact discovery and
depositions of expert and non-expert
witnesses may commence at any time.
The Debtors' experts will be deposed
first, next are other parties' experts,
to be followed by supplemental
depositions.
July 28, 2006 Parties must file a final fact witness or
expert list pursuant to Rules 26(a)(3)(A)
and 26(a)(3)(B) of the Federal Rules of
Civil Procedure.
August 1, 2006 Last day for filing pre-trial motions,
including motions in limine, Daubert, and
summary judgment motions.
Court Enters CMO for PD Claims Estimation
Judge Fitzgerald also issues a case management order for the
estimation of prepetition claims relating to traditional asbestos
property damage:
(1) Kirkland & Ellis LLP is designated to act as liaison
counsel on behalf of all proponents of the Debtors'
Chapter 11 Plan for all discovery matters with respect to
the PD Estimation. Bilzin Sumberg Baena Price & Axelrod
LLP will act as liaison counsel on behalf of the Asbestos
PD Committee and all Asbestos PD Claimants who elect to
participate in the PD Estimation, solely in respect of
discovery matters in the PD Estimation.
(2) Any party who filed a PD Claim may elect to participate in
the PD Estimation. Regardless, the Court's determination
of all procedural and substantive matters relating to the
PD estimation will be binding on all PD Claimants.
(3) All parties participating in the PD Estimation who fail to
comply with the terms of the Order may be subject to
sanctions requested by any party in accordance with the
Federal Rules of Civil Procedure and the Bankruptcy Rules.
The Court has determined to proceed in two phases. Phase I is to
be bifurcated to deal with two issues -- the Daubert methodology
and constructive notice. Phase II will consist of merits-based
estimation of the Asbestos PD claims
Preliminary Disclosure of Witnesses
On October 3, 2005, all PD Estimation Participants will disclose
to one another the name, including contact address and telephone
number, if known, of each fact witness they anticipate, in good
faith, they will call to testify live or by deposition with
respect to the Phase II Issues. The disclosure will also
identify the subject on which the fact witness is expected to
testify.
On the same date, all PD Estimation Participants will also
disclose to one another:
* the name of each expert who may be used at trial to provide
testimony; or
* if an individual has not yet been retained, the type of each
expert, which that party intends to engage for purposes of
providing that testimony, with respect to Phase II Issues,
which consist of merits-based estimation of the Asbestos PD
Claims.
Each of the Expert Disclosures will specify the subject on which
the experts or specified types of experts will opine and the
nature of the witnesses' expertise.
On October 24, 2005, any PD Estimation Participant may supplement
its Expert Disclosure based on the information it obtained from
the Expert Disclosures of the other PD Estimation Participants.
Phase I Estimation
All written fact discovery relating to certain Phase I Issues may
commence at any time but must be completed by February 15, 2006.
On October 17, 2005, the Debtors will designate experts and
submit expert reports addressing two issues:
(i) that certain methodologies for determining exposure to
asbestos must comply with Rule 702 of the Federal Rules of
Evidence, specifically, the use of dust versus air
sampling; and
(ii) that all claims asserted on or after a certain date are
subject to a statute of limitations defense to the extent
triggered by constructive notice.
On October 17, 2005, the Debtors will also identify any fact
witnesses they intend to call to testify as to Phase I Issues,
and the general subject matter of each fact witness' testimony.
Furthermore, Judge Fitzgerald rules that the Debtors will submit
a brief no later than October 17, 2005, to address whether the
Constructive Notice Issue should be addressed by the Court. The
PD Committee will also submit a brief to address whether the
Methodology Issue should be heard by the Court.
Any PD Estimation Participant may file responses, if any, to the
Constructive Notice Brief and the Methodology Brief. There will
be no reply briefs filed or allowed.
The Briefs will be argued on the merits at the November 14, 2005,
omnibus hearing. After an oral argument, the Court will provide
either a ruling, or preliminary ruling, as to the scope of the
Phase I trial, so that by December 8, 2005, PD Estimation
Participants can comply with the Order.
The PD Estimation Participants will:
-- designate experts and submit responsive expert reports on
the Phase I Issues; and
-- identify any fact witnesses they intend to call to testify
as to Phase I Issues, and the general subject matter of
fact witness' testimony.
Deposition of experts and non-experts relating to Phase I Issues
may commence on December 22, 2005, and all other depositions must
be concluded by February 15, 2006.
Pursuant to Rules 26(a)(3)(A) and 26(a)(3)(B) of the Federal
Rules of Civil Procedure, any PD Estimation Participant will file
and serve on each of the other Participants a final fact witness
or expert list in respect of the Phase I hearing not later than
February 20, 2006. Any pre-trial motions, including motions in
limine, Draubert, and summary judgment motions related to the
Phase I Issues, will be filed not later than February 22, 2006.
A preliminary pre-trial conference on Phase I Issues will be held
at the January 2006 omnibus hearing, at which time the Court may
set a March 2006 trial date for the Phase I Issues and a date for
the final pre-trial conference on Phase I Issues.
Phase II Estimation
Judge Fitzgerald further orders that all written fact discovery
relating to any PD Estimation issues other than Estimation
Phase I Issues may commence at any time but must be completed
by August 7, 2006.
The Court directs the Debtors to designate experts and submit
expert reports addressing the Phase II Issues on May 1, 2006.
The Debtors will also identify any fact witnesses they intend to
call as to Phase II issues and the general subject matter of fact
witness' testimony.
PD Estimation Participants will also designate experts and submit
responsive expert reports on the Phase II Issues on May 29, 2006.
The Debtors' rebuttal expert reports will be filed no later than
June 19, 2006.
The Court will conduct a preliminary pre-trial conference on the
PD Estimation to be held at the June 2006 omnibus hearing, at
which time the Court may set a final pre-trial conference date
and a September 2006 trial date for the PD Estimation.
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. 94; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
W.R. GRACE: Future Rep. Insists on Termination of Exclusivity
-------------------------------------------------------------
David T. Austern, the legal representative for future asbestos
claimants, tells the Court that W.R. Grace & Co. and its debtor-
affiliates' Business Report in support of their request to extend
their exclusive periods, is premised on a series of "ifs,"
"coulds," "mights," and "mays."
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.
"While anything is possible, the Debtors cannot even state
definitely, much less establish a matter of proof, that the
termination of exclusivity will have a detrimental impact on
their businesses," Mr. Austern notes.
The Futures Representative points out that the Debtors have a
strong market position, strong cash flow, a significant cash
position and low borrowing needs. Mr. Austern observes that the
Debtors' financial strength and substantial growth continued
despite a series of potentially business-damaging events, which
the Debtors' management employees, customers, suppliers and
lenders have experienced with no noticeable impact to the
business.
For example, Mr. Austern says, the Debtors saw no material impact
when they announced in 2000 and 2001 that they were unable to
file their financial statements on time. "Even their filing of
chapter 11 bankruptcy protection more than four years ago had
little material lasting impact on the Debtors' business
operations."
Mr. Austern further notes that the Debtors' businesses,
employees, customers, suppliers and lenders were also not
impacted materially:
-- when the Debtors' former chief executive agreed to settle
Securities and Exchange Commission fraud charges;
-- when two former executives agreed to cease-and-desist
orders from the SEC related to fraudulent earnings
reporting in the 1990s;
-- when a federal district court in Missoula, Montana, ordered
the Debtors to repay $54.5 million to the government for
the investigation and cleaning of Libby, Montana;
-- when the Debtors and seven executives were indicted by the
United States for federal crimes arising out of the
Debtors' Libby, Montana, operations; or
-- when the New Jersey Attorney General filed suit against the
Debtors and two former executives for making false
certifications.
When the Court stated that it was close to considering the
appointment of a trustee, Mr. Austern says, the Debtors' business
still did not appear to suffer at all.
"In the aftermath of so many events, the Debtors can hardly now
demonstrate that termination of exclusivity will sound a death
knell, or will have any materially adverse effect, for their
businesses or their relationships with their employees,
customers, suppliers and lenders."
According to Mr. Austern, since the only plan on file is the
Debtors' patently unconfirmable plan, real negotiations will not
proceed until the playing field is finally made level by the
termination of exclusivity.
Thus, the Futures Representative asks the Court to deny the
Debtors' request for an extension of their exclusive periods.
Battle ensued over the exclusivity period with the Debtors and the
Official Committee of Equity Holders on one side and the Official
Committee of Asbestos Personal Injury Claimants, the Official
Committee of Asbestos Property Damage Claimants and the Future
Representative on the other camp.
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. 93; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
WINDSWEPT ENVIRONMENTAL: Appoints Andrew C. Lunetta as CFO
----------------------------------------------------------
Windswept Environmental Group, Inc., is hiring Andrew C. Lunetta
as its Chief Financial Officer.
Mr. Lunetta has over twenty-three years of extensive construction
industry experience in addition to serving three years as the
Chief Financial Officer of Tostel Corp. (TSTLF.PK), a publicly
traded construction company. Prior to joining Windswept, from
January 2004 to August 2005, Mr. Lunetta served as the CFO of The
Tyree Company, a Long Island-based construction company that
performs maintenance and environmental services throughout the New
England states. From November 1998 to December 2003, Mr. Lunetta
served as the CFO of The Holiday Organization, one of the leading
real estate developers on Long Island. Mr. Lunetta is a licensed
CPA in the state of New York and received a BS degree in
Accounting from Long Island University in 1973 and an MBA in
Finance from Pace University in 1980.
On May 31, 2005, the Company hired Walter Gallocher as its
Controller. Mr. Gallocher has over twenty-five years of
construction and manufacturing experience. Prior to joining the
Company, from June 2003 to October 2004, Mr. Gallocher served as
controller of Diversified Construction Corp., a Long Island
demolition and site works contractor. Prior to this position,
from September 2000 to January 2003, Mr. Gallocher served as
controller of Bi-County Industries, Inc., a Long Island equipment
services company. Mr. Gallocher received a BBA degree in
Accounting from St. John's University in 1964 and an MBA in
Finance from Baruch School, CUNY in 1972.
Michael O'Reilly, the President and Chief Executive Officer of the
Company, said, "These hires fill out the Company's financial
management subsequent to the recent financing transaction with
Laurus Master Fund and the divestiture of control of the Company
by Spotless Group. We are thrilled to have brought on board two
financial executives with their valuable industry and public
company experience."
Windswept Environmental Group, Inc. --
http://www.tradewindsenvironmental.com/-- through its wholly
owned subsidiary, Trade-Winds Environmental Restoration, Inc.,
provides a full array of emergency response, remediation, disaster
restoration and commercial drying services to a broad range of
clients.
* * *
In its May 13, 2005 Quarterly Report for the quarter ending
March 29, 2005, the Company disclosed that it defaulted on its
senior securities.
The Company is required to pay quarterly dividends on its Series A
Convertible Preferred Stock, par value $.01 per share, which
dividends accrue from the initial date of issuance of the Series A
Preferred, are cumulative and, if not paid when due, bear interest
on the unpaid amount of the past due dividends at the prime rate
published in The Wall Street Journal on the date the dividend was
payable, plus 3%. The Company is currently in arrears on its
Series A Preferred dividend payments and interest thereon in the
aggregate amount of approximately $102,000 due to a lack of
available cash. Under the terms of the Company's Certificate of
Designations of the Series A Preferred, if the Company fails to
make any four consecutive quarterly dividend payments on the
Series A Preferred, the majority in interest of the holders of the
Series A Preferred have the right to elect a second director to
the Company's board of directors, to serve as a director until
such accrued and unpaid dividends have been paid in full. The
Company failed to pay its fifth consecutive quarterly dividend
payment on March 15, 2005 to the holders of the Series A
Preferred. The majority in interest of the holders of the Series
A Preferred has not exercised the right to elect a second director
to the Company's board of directors. There can be no assurance
when or if the Company will make any Series A Preferred dividend
payments.
* Troy Zander Joins DLA Piper Finance's Practice In San Diego
-------------------------------------------------------------
Troy Zander, Esq., has rejoined DLA Piper Rudnick Gray Cary US
LLP's San Diego office as a partner in DLA Piper's Finance
practice. He was most recently a partner at Sheppard, Mullin,
Richter & Hampton in San Diego. Zander was previously a partner
in Gray Cary's San Diego office prior to the firm's merger.
Mr. Zander focuses on representing lenders and companies in
documenting high-tech and middle-market loans, as well as
representing agents in syndicated facilities. He also represents
companies, secured and unsecured creditors, committees, trustees
and asset-purchasers in bankruptcy proceedings; and lenders and
companies in federal, state and out-of-court proceedings
restructuring debt.
"We are pleased to welcome back Troy as the latest addition to our
finance practice," said John T. Cusack, chair of DLA Piper's
Finance practice group. "Of course, due to the merger and the key
additions we have made to our finance practice this year, he has
returned to a firm that has greater capacity to meet the needs of
the clients with whom he works, both in the U.S. and in global
markets. Another factor that we know was important to his
decision to rejoin us was our continued interest in representing
companies focused on technology."
With the addition of Mr. Zander, DLA Piper has added more than 50
partners and senior-level lawyers since January, including 15
partners in the firm's California and Seattle offices. On Monday,
the firm also announced that Arthur Beeman and Pamela Fulman have
joined the firm's San Francisco office as partners in the firm's
Patent Litigation practice.
In the U.S., DLA Piper's Finance practice group has more than 130
lawyers who represent banks, finance companies, insurance
companies, private funds and other institutional lenders and
investors. The Group counsels its clients in a wide array of
finance transactions including syndicated loans, asset-based and
cash flow loans, mezzanine and private equity investments,
transportation finance and equipment leasing, and leveraged lender
transactions.
Mr. Zander received a B.A., cum laude, Phi Beta Kappa, from the
University of California San Diego, and a J.D. from the University
of San Diego. He is a member of the Uniform Commercial Code
Committee of the Business Law Section of the State Bar of
California, the San Diego and Federal Bar Associations, the
Association for Corporate Growth, the American Bankruptcy
Institute, the San Diego Bankruptcy Forum and the San Diego
Receivers Forum.
Mr. Zander can be reached at:
Troy Zander, Esq.
DLA Piper Rudnick Gray Cary US LLP
4365 Executive Drive, Suite 1100
San Diego, CA 92121
Telephone (858) 677-1486
Fax (858) 677-1401
DLA Piper Rudnick Gray Cary US LLP is a business law firm of 1,400
lawyers in offices throughout the U.S., whose core practices are
real estate, corporate and securities, litigation, intellectual
property and government affairs. Worldwide, DLA Piper Rudnick
Gray Cary has 2,900 lawyers in 53 offices in 20 countries,
including the U.K, mainland Europe and Asia, offering leading
practices in commercial, corporate and finance, human resources,
litigation, real estate, regulatory and legislative, and
technology, media and communications.
* FTI Consulting Names 3 Executives to Corporate Finance Practice
-----------------------------------------------------------------
FTI Consulting, Inc. (NYSE: FCN), a premier provider of problem-
solving consulting and technology services to major corporations,
financial institutions and law firms, disclosed the appointments
of three senior executives to its corporate finance/restructuring
practice. Jerome N. Gold and David W. Smalstig have joined the
company as senior managing directors within the Transaction
Advisory Services group. Christopher T. Nicholls has joined as
senior managing director within the Communications & Media
industry team.
"Today's companies operate in a complex, competitive environment,"
Dominic DiNapoli, FTI's chief operating officer said. "FTI's
successful track record in helping organizations resolve critical
strategic, operational, financial and capital issues depends on
the experience and extraordinary talent of professionals like
Jerry, David and Chris. We look forward to their contributions to
our business, clients and shareholders."
New Appointments
Bringing a wealth of media industry experience, Jerome N. Gold
joins as senior managing director within FTI's Transaction
Advisory Services group, residing in the Los Angeles office. In
his new role, Mr. Gold will advise clients on financial,
operational and commercial issues relating to acquisition and
divestiture transactions, with an emphasis on the media industry.
He joins the company after serving as chief financial officer at
Platinum Equity LLC, a private equity firm specializing in
leveraged buyouts and operating acquired portfolio companies. At
Platinum Equity, Mr. Gold supervised the financing of acquisitions
and was responsible for maintaining relationships with limited
partners, banks and other financial institutions. He was also
responsible for refinancing the firm's acquisitions with both bank
and high yield debt, and instituting appropriate budget and
forecasting models for portfolio companies.
Prior to Platinum Equity, Mr. Gold was managing director at Gold
International LLC, a consulting firm specializing in media,
entertainment and communications. Prior to that, he was executive
vice president and chief financial officer at Warner Music Group,
the music division of AOL Time Warner, for nine years. Earlier in
his career, Mr. Gold spent over 20 years at Ernst & Young where as
partner, he managed the global media and entertainment practice.
Mr. Gold has a BBA from Baruch College and is a certified public
accountant.
With a career spanning 20 years, David W. Smalstig joins as senior
managing director within FTI's Transaction Advisory Services
group, residing in the Chicago office. Mr. Smalstig will advise
clients on complex issues that arise during transactions such as
acquisitions and divestitures. He joins FTI after four years with
PricewaterhouseCoopers where he was a director within the
transaction services group. While there, Mr. Smalstig developed a
significant private equity client base in the Chicago market. He
assisted domestic and international clients with transaction-
related concerns including due diligence, structurings, public
offerings, purchase agreements, negotiations, closing adjustments,
carve-outs, turnarounds, restructurings, cost savings and change
management. He completed due diligence on over 200 deals with
revenues ranging from $100,000 to over $4 billion. Mr. Smalstig
has presented on numerous topics at industry conferences including
"Bullet Proof Due Diligence", "Emerging Transactional Trends" and
"Changes in Accounting Rules Impacting Today's Transactions".
Prior to PricewaterhouseCoopers, Mr. Smalstig was senior manager
in the mergers and acquisitions group at Ernst & Young. Prior to
that, he was the divisional chief of staff for Central U.S. and
Latin America at URS/Dames & Moore where he was responsible for
several acquisitions in the transportation sector. He has a BSBA
from Bloomsburg University of Pennsylvania and completed graduate
studies from the Manchester School of Business. He is also a
certified public accountant.
Christopher T. Nicholls joins as senior managing director within
FTI's Communications & Media industry team, residing in the New
York office. Mr. Nicholls will advise clients in the local, long
distance, wireless, cable and media sectors. He has nearly 20
years of leveraged finance, portfolio management and restructuring
experience, as well as deep telecom and cable industry expertise.
Mr. Nicholls joins FTI after eight years in GE Capital's Media
Communications Group, where, as a senior vice president, he led
its telecom risk management team. In that role, he managed a
$1.5 billion portfolio of distressed and semi-distressed telecom
and cable exposure. He was also responsible for over $2.5 billion
of telecom debt investments, led creditor committees in
restructurings of balance sheets totaling over $10 billion, and
was a principal in at least eight M&A transactions. Among his
distinguished cases was the 100% recovery for senior lenders in
the Allegiance Telecom bankruptcy, where the senior debt traded
below 30% prior to the bankruptcy. In addition to managing
distressed credits, Mr. Nicholls was instrumental in GE
Communication Group's efforts to set up a par and distressed
secondary market bank debt investment effort.
Prior to his time at GE, Mr. Nicholls was with Merrill Lynch and
Morgan Stanley, primarily in fixed income capital markets and
industrial investment banking. He holds a BA in Economics from
Boston University.
FTI Consulting is a premier provider of problem-solving consulting
and technology services to major corporations, financial
institutions and law firms when confronting critical issues that
shape their future and the future of their clients, such as
financial and operational improvement, major litigation, mergers
and acquisitions and regulatory issues. Strategically located in
24 of the major US cities, London and Melbourne, FTI's total
workforce of more than 1,100 employees includes numerous PhDs,
MBAs, CPAs, CIRAs and CFEs, who are committed to delivering the
highest level of service to clients.
* Congress Asked to Let E.D. La. Courts Operate Outside District
----------------------------------------------------------------
Federal courts in three southern states are closed due to the
effects of Hurricane Katrina, and an initial review indicates that
some courthouses will be unusable for weeks or months.
Most notably, three federal courthouses in New Orleans had to be
evacuated, including the John Minor Wisdom U.S. Courthouse --
primary home of the U.S. Court of Appeals for the Fifth Circuit.
Also closed in New Orleans are the courthouse that is home to the
U.S. District Court for the Eastern District of Louisiana and the
Hale Boggs Federal Building, which houses the U.S. Bankruptcy
Court for the Eastern District of Louisiana.
A special problem exists for the district and bankruptcy courts.
They currently have no jurisdiction -- are not authorized to
conduct court business -- outside the geographic boundaries of the
Eastern District.
The Judicial Conference of the United States, which makes policy
for the federal courts, is asking Congress to pass emergency
legislation to allow those courts to operate in another judicial
district. The legislation would allow any court to do so when
emergency circumstances require it.
A copy of the legislative proposal is available at no charge at
http://ResearchArchives.com/t/s?153
Operations of the federal court in Pensacola, Fla., were
interrupted by the hurricane but that courthouse was opened
Sept. 1. Federal courthouses remain closed in Mobile, Ala.,
and Jackson, Miss.
Leonidas Ralph Mecham, director of the Administrative Office of
the United States Courts, called on the "entire judicial family to
support the courts in need." In a message to all federal chief
judges, Mr. Mecham said his agency's Emergency Preparedness Office
"has been meeting daily to monitor the status of the courts
impacted by Katrina and to coordinate assistance efforts."
Those efforts include emergency funding and the provision of
alternative phone and electronic communications systems
* BOND PRICING: For the week of Aug. 29 - Sept. 2, 2005
-------------------------------------------------------
Issuer Coupon Maturity Price
------ ------ -------- -----
ABC Rail Product 10.500% 01/15/04 0
Adelphia Comm. 3.250% 05/01/21 5
Adelphia Comm. 6.000% 02/15/06 5
AHI-DFLT 07/05 8.625% 10/01/07 58
Allegiance Tel. 11.750% 02/15/08 27
Allegiance Tel. 12.875% 05/15/08 27
Amer Comm LLC 11.250% 01/01/08 24
Amer West Air 7.840 07/02/10 71
Amer. Plumbing 11.625% 10/15/08 16
Amer. Restaurant 11.500% 11/01/06 66
American Airline 7.379% 05/23/16 72
American Airline 8.390% 01/02/17 72
American Airline 10.180% 01/02/13 73
American Airline 10.680% 03/04/13 65
American Airline 11.000% 05/06/15 69
Ameritruck Distr 12.250% 11/15/05 1
AMR Corp. 9.000% 09/15/16 75
AMR Corp. 9.750% 08/15/21 66
AMR Corp. 9.800% 10/01/21 69
AMR Corp. 9.820% 10/25/11 73
AMR Corp. 9.880% 06/15/20 63
AMR Corp. 10.000% 04/15/21 66
AMR Corp. 10.200% 03/15/20 72
AMR Corp. 10.550% 03/12/21 73
Amtran Inc. 9.625% 12/15/05 16
Anchor Glass 11.000% 02/15/13 68
Antigenics 5.250% 02/01/25 60
Anvil Knitwear 10.875% 03/15/07 51
AP Holdings Inc. 11.250% 03/15/08 15
Apple South Inc. 9.750% 06/01/06 5
Asarco Inc. 7.875% 04/15/13 54
Asarco Inc. 8.500% 05/01/25 57
ATA Holdings 12.125% 06/15/10 20
ATA Holdings 13.000% 02/01/09 20
Atlantic Coast 6.000% 02/15/34 8
Atlas Air Inc. 8.770% 01/02/11 57
Atlas Air Inc. 9.702% 01/02/08 58
Autocam Corp. 10.875% 06/15/14 71
B&G Foods Hldg. 12.000% 10/30/16 8
Bank New England 8.750% 04/01/99 9
Big V Supermarkets 11.000% 02/15/04 0
Budget Group Inc. 9.125% 04/01/06 0
Burlington North 3.200% 01/01/45 63
Calpine Corp. 4.000% 12/26/03 65
Calpine Corp. 4.750% 11/15/23 64
Calpine Corp. 7.750% 04/15/09 62
Calpine Corp. 7.875% 04/01/08 69
Calpine Corp. 8.500% 07/15/10 75
Calpine Corp. 8.500% 02/15/11 63
Calpine Corp. 8.625% 08/15/10 64
Calpine Corp. 8.750% 07/15/13 73
Cell Therapeutic 5.750% 06/15/08 75
Cell Therapeutic 5.750% 06/15/08 63
Cellstar Corp. 12.000% 01/15/07 72
Cendant Corp. 4.890% 08/17/06 50
Charter Comm Hld 10.000% 05/15/11 75
CHS Electronics 9.875% 04/15/05 1
Classic Cable 9.375 08/01/09 0
Collins & Aikman 10.750% 12/31/11 35
Comcast Corp. 2.000% 10/15/29 43
Comprehens Care 7.500% 04/15/10 23
Conseco Inc. 9.000% 10/15/06 0
Covad Communication 3.000% 03/15/24 68
Cray Inc. 3.000% 12/01/24 57
Cray Research 6.125% 02/01/11 35
Curagen Corp. 4.000% 02/15/11 74
Delco Remy Intl 9.375% 04/15/12 64
Delco Remy Intl 11.000% 05/01/09 70
Delta Air Lines 2.875% 02/18/24 15
Delta Air Lines 7.299% 09/18/06 58
Delta Air Lines 7.700% 12/15/05 28
Delta Air Lines 7.711% 09/18/11 61
Delta Air Lines 7.779% 11/18/05 52
Delta Air Lines 7.779% 01/02/12 43
Delta Air Lines 7.900% 12/15/09 16
Delta Air Lines 7.920% 11/18/10 61
Delta Air Lines 8.000% 06/03/23 15
Delta Air Lines 8.270% 09/23/07 48
Delta Air Lines 8.300% 12/15/29 17
Delta Air Lines 8.540% 01/02/07 26
Delta Air Lines 8.540% 01/02/07 32
Delta Air Lines 8.540% 01/02/07 36
Delta Air Lines 8.540% 01/02/07 63
Delta Air Lines 8.540% 01/02/07 32
Delta Air Lines 9.000% 05/15/16 14
Delta Air Lines 9.200% 09/23/14 29
Delta Air Lines 9.250% 03/15/22 14
Delta Air Lines 9.320% 01/02/09 50
Delta Air Lines 9.750% 05/15/21 15
Delta Air Lines 9.875% 04/30/08 69
Delta Air Lines 10.000% 08/15/08 20
Delta Air Lines 10.000% 05/17/09 26
Delta Air Lines 10.000% 06/01/09 46
Delta Air Lines 10.000% 06/01/10 36
Delta Air Lines 10.000% 06/01/11 43
Delta Air Lines 10.000% 12/05/14 17
Delta Air Lines 10.060% 01/02/16 49
Delta Air Lines 10.080% 06/16/07 44
Delta Air Lines 10.125% 06/16/09 50
Delta Air Lines 10.125% 05/15/10 15
Delta Air Lines 10.125% 06/16/10 44
Delta Air Lines 10.140% 08/26/12 46
Delta Air Lines 10.375% 02/01/11 15
Delta Air Lines 10.375% 12/15/22 18
Delta Air Lines 10.430% 01/02/11 20
Delta Air Lines 10.430% 01/02/11 50
Delta Air Lines 10.500% 04/30/16 41
Delta Air Lines 10.790% 03/26/14 17
Delphi Auto Syst 7.125% 05/01/29 70
Delphi Trust II 6.197% 11/15/33 56
Edison Brothers 11.000% 09/26/07 0
Eagle-Picher Inc. 9.750% 09/01/13 74
Emergent Group 10.750% 09/15/04 0
Empire Gas Corp. 9.000% 12/31/07 0
Epix Medical Inc. 3.000% 06/15/24 69
Exodus Comm. Inc. 5.250% 02/15/08 0
Fedders North Am. 9.875% 03/01/14 72
Federal-Mogul Co. 7.375% 01/15/06 28
Federal-Mogul Co. 7.500% 01/15/09 29
Federal-Mogul Co. 8.370% 11/15/01 24
Federal-Mogul Co. 8.800% 04/15/07 27
Federated Group 7.500% 04/15/10 1
Fibermark Inc. 10.750% 04/15/11 75
Finisar Corp. 5.250% 10/15/08 74
Finova Group 7.500% 11/15/09 42
Foamex L.P. 9.875% 06/15/07 15
Foamex L.P. 13.500% 08/15/05 21
Ford Motor Co. 6.625% 02/15/28 75
Ford Motor Co. 7.400% 11/01/46 71
Fruit of the Loom 8.875% 04/15/06 0
Gateway Inc. 2.000% 12/31/11 71
GMAC 5.900% 01/15/19 73
GMAC 5.900% 10/15/19 74
GMAC 6.000% 02/15/19 73
GMAC 6.000% 03/15/19 74
GMAC 6.000% 09/15/19 74
GMAC 6.050% 08/15/19 72
GMAC 6.150% 08/15/19 75
GMAC 6.250% 12/15/18 75
GMAC 6.250% 05/15/19 74
Golden Books Pub 10.750% 12/31/04 0
Graftech Int'l 1.625% 01/15/24 73
Graftech Int'l 1.625% 01/15/24 75
Gulf States STL 13.500% 04/15/03 0
HNG Internorth 9.625 03/15/06 37
Holt Group 9.750% 01/15/06 0
Huntsman Packag 13.000% 06/01/10 72
Impsat Fiber 6.000% 03/15/11 75
Inland Fiber 9.625% 11/15/07 43
Intermet Corp. 9.750% 06/15/09 36
Iridium LLC/CAP 10.875% 07/15/05 19
Iridium LLC/CAP 11.250% 07/15/05 20
Iridium LLC/CAP 13.000% 07/15/05 18
Iridium LLC/CAP 14.000% 07/15/05 17
Kaiser Aluminum & Chem. 12.750% 02/01/03 5
Kmart Corp. 8.990% 07/05/10 72
Kmart Corp. 9.780% 01/05/20 68
Kmart Funding 8.800% 07/01/10 35
Kmart Funding 9.440% 07/01/18 68
Kulicke & Soffa 0.500% 11/30/08 75
Lehman Bros. Hldg 7.500% 09/03/05 56
Level 3 Comm. Inc. 2.875% 07/15/10 53
Level 3 Comm. Inc. 5.250% 12/15/11 68
Level 3 Comm. Inc. 6.000% 09/15/09 54
Level 3 Comm. Inc. 6.000% 03/15/10 52
Level 3 Comm. Inc. 11.250% 03/15/10 70
Liberty Media 3.250% 03/15/31 75
Liberty Media 3.750% 02/15/30 59
Liberty Media 4.000% 11/15/29 63
Macsaver Financl 7.875% 08/01/03 2
Mississippi Chem 7.250% 11/15/17 4
Muzak LLC 9.875% 03/15/09 51
MSX Intl. Inc. 11.375% 01/15/08 72
Natl Steel Corp. 8.375% 08/01/06 2
Natl Steel Corp. 9.875% 03/01/09 1
New World Pasta 9.250% 02/15/09 8
Nexprise Inc. 6.000% 04/01/07 0
North Atl Trading 9.250% 03/01/12 68
Northern Pacific RY 3.000% 01/01/47 63
Northern Pacific RY 3.000% 01/01/47 63
Northwest Airlines 7.068% 01/02/16 68
Northwest Airlines 7.248% 01/02/12 51
Northwest Airlines 7.360% 02/01/20 58
Northwest Airlines 7.626% 04/01/10 54
Northwest Airlines 7.691% 04/01/17 71
Northwest Airlines 7.875% 03/15/08 43
Northwest Airlines 7.950% 03/01/15 64
Northwest Airlines 8.070% 01/02/15 47
Northwest Airlines 8.130% 02/01/14 49
Northwest Airlines 8.700% 03/15/07 47
Northwest Airlines 8.875% 06/01/06 63
Northwest Airlines 9.875% 03/15/07 57
Northwest Airlines 10.000% 02/01/09 44
Northwest Airlines 10.500% 04/01/09 44
Northwest Stl & Wir 9.500% 06/15/01 0
NTK Holdings Inc. 10.750% 03/01/14 58
Nutritional Src. 10.125% 08/01/09 74
Oakwood Homes 7.875% 03/01/04 28
Oakwood Homes 8.125% 03/01/09 20
O'Sullivan Ind. 10.630% 10/01/08 70
O'Sullivan Ind. 13.375% 10/15/09 7
Outboard Marine 7.000% 07/01/02 0
Outboard Marine 9.125% 04/15/17 0
Owens-Crng Fiber 8.875% 06/01/02 71
Pegasus Satellite 12.375% 08/01/06 37
Pegasus Satellite 12.500% 08/01/07 37
Pen Holdings Inc. 9.875% 06/15/08 62
Pixelworks Inc. 1.750% 05/15/24 71
Pliant Corp. 13.000% 06/01/10 72
Polaroid Corp. 6.750% 01/15/02 0
Polaroid Corp. 7.250% 01/15/07 0
Polaroid Corp. 11.500% 02/15/06 0
Primedex Health 11.500% 06/30/08 50
Primedex Health 11.500% 06/30/08 50
Primus Telecom 3.750% 09/15/10 27
Primus Telecom 5.750% 02/15/07 55
Primus Telecom 8.000% 01/15/14 63
Primus Telecom 12.750% 10/15/09 50
Radnor Holdings 11.000% 03/15/10 65
Raintree Resorts 13.000% 12/01/04 13
RDM Sports Group 8.000% 08/15/03 0
Read-Rite Corp. 6.500% 09/01/04 45
Realco Inc. 9.500% 12/15/07 45
Reliance Group Holdings 9.000% 11/15/00 26
Reliance Group Holdings 9.750% 11/15/03 2
Salton Inc. 12.250% 04/15/08 54
Silicon Graphics 6.500% 06/01/09 74
Solectron Corp. 0.500% 02/15/34 68
Specialty Paperb. 9.375% 10/15/06 65
Sun World Int'l. 11.250% 04/15/04 11
Tekni-Plex Inc. 12.750% 06/15/10 73
Teligent Inc. 11.500% 12/01/07 0
Tom's Foods Inc. 10.500% 11/01/04 68
Tower Automotive 5.750% 05/15/24 32
Trans Mfg Oper 11.250% 05/01/09 58
TransTexas Gas 15.000% 03/15/05 1
Tropical SportsW 11.000% 06/15/08 5
United Air Lines 6.831% 09/01/08 66
United Air Lines 7.371% 09/01/06 25
United Air Lines 7.762% 10/01/05 51
United Air Lines 7.811% 10/01/09 74
United Air Lines 8.030% 07/01/11 66
United Air Lines 9.000% 12/15/03 15
United Air Lines 9.020% 04/19/12 38
United Air Lines 9.125% 01/15/12 15
United Air Lines 9.200% 03/22/08 45
United Air Lines 9.300% 03/22/08 25
United Air Lines 9.560% 10/19/18 41
United Air Lines 9.750% 08/15/21 16
United Air Lines 10.250% 07/15/21 15
United Air Lines 10.670% 05/01/04 14
United Air Lines 11.210% 05/01/14 13
Univ. Health Services 0.426% 06/23/20 60
US Air Inc. 10.250% 01/15/07 5
US Air Inc. 10.250% 01/15/07 4
US Air Inc. 10.300% 01/15/08 15
US Air Inc. 10.300% 07/15/08 15
US Air Inc. 10.610% 06/27/07 5
US Airways Pass- 6.820% 01/30/14 60
Venture Hldgs 11.000% 06/01/07 0
WCI Steel Inc. 10.000% 12/01/04 60
Werner Holdings 10.000% 11/15/07 72
Windsor Woodmont 13.000% 03/15/05 1
Winn-Dixie Store 8.875% 04/01/08 72
Winstar Comm 14.000% 10/15/05 1
World Access Inc. 4.500% 10/01/02 11
World Access Inc. 13.250% 01/15/08 6
Xerox Corp. 0.570% 04/21/18 30
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P.
Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick
F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili,
Jr., and Peter A. Chapman, Editors.
Copyright 2005. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***