/raid1/www/Hosts/bankrupt/TCR_Public/051227.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, December 27, 2005, Vol. 9, No. 306
Headlines
21ST CENTURY: U.S. Trustee Appoints 3-Member Creditors Committee
ACTUANT CORP: Earns $21.3 Mil. of Net Income in 2006 First Quarter
ALLIED DOMECQ: Subordination Issues Cue S&P to Keep Negative Watch
ALLIED HOLDINGS: Has Until March 28 to Decide on Certain Leases
ALLMERICA FINANCIAL: Goldman Merger Talks Cue S&P's Positive Watch
ASARCO LLC: Encycle Trustee Wants ARCADIS as Environmental Advisor
ASARCO LLC: Encycle Trustee Can Sell River Road Assets
ATA AIRLINES: Wilmington Wants Participation Claim Amount Amended
ATA AIRLINES: NatTel Objects to Six C8 Airlines Admin. Claims
ATLANTIC MUTUAL: Alliance Benefits Cue S&P to Affirm BB+ Ratings
B&G FOODS: Agrees to Acquire Grandma's(R) Molasses from Cadbury
B&G FOODS: S&P Places BB- Rating on $25 Mil. Senior Secured Loan
BALLY TOTAL: Seeks Resolution on Shareholder Rights Plan Dispute
BELDEN & BLAKE: Restating Financials to Correct Accounting Errors
BELDEN & BLAKE: Financial Restatements Spur S&P to Review Ratings
BLOCKBUSTER INC: Moody's Affirms Subordinated Notes' Caa3 Rating
BOYDS COLLECTION: Hires Deloitte & Touche as Independent Auditors
BOYDS COLLECTION: Has Until Mar. 15 to Decide on Unexpired Leases
CALPINE CORP: Court Approves Joint Administration of Ch. 11 Cases
CALPINE CORP: Final DIP Financing Hearing Set for January 25
CALPINE CORP: Bankruptcy Court Okays Interim Cash Collateral Use
CELLEGY PHARMACEUTICALS: Nasdaq SmallCap to Halt Stock Trading
CHEMTURA CORP: European Commission Slaps $16-Mil Anti-Trust Fine
CINCINNATI BELL: Buys Cingular's 19.9% Interest in Joint Venture
CIT RV: S&P Junks Rating on Certificates After Review
COLLINS & AIKMAN: Textron Wants Overdue Equipment Lease Rent Paid
COLLINS & AIKMAN: Can Reject Three Contracts Effective Dec. 8
COLLINS & AIKMAN: Wilhelm Karmann Wants Stay Lifted to Pursue Suit
CONTINENTAL AIRLINES: Contributing $50 Million to Pension Plans
CREDIT SUISSE: S&P Lifts Low-B Ratings on Class H & J Certificates
DANA CREDIT: Parent Default Prompts S&P to Downgrade Ratings
DELTA AIR: Creditors Committee Taps Houlihan as Financial Advisor
DELTA AIR: Retired Pilots Want Rule 2004 Examination on Carrier
DOE RUN: Bruce Neil Replaces Jeffrey L. Zelms as President & CEO
DOMINION RESOURCES: S&P Pares Ratings on $39MM Class Certificates
DRUGMAX INC: Selling Drug Distribution Business to Rochester Drug
EXIDE TECH: Gets Court Nod to Enter Into GECC & US Equipment Pact
EXIDE TECH: Discloses Expectations for Third Quarter FY 2006
EXIDE TECH: Board of Directors Forms Ad Hoc Finance Committee
FLORSHEIM GROUP: Files 2nd Amended Disclosure Statement & Plan
FLYI INC: Court Okays Jones Day as Bankruptcy Counsel
FLYI INC: Hires Ford & Harrison as Special Labor Counsel
FLYI INC: Brings-In Young Conaway as Local Counsel
GENTEK INC: Prepays $3 Million More on First Lien Term Loan
GMAC COMMERCIAL: S&P's Rating on Class O Certs. Tumbles to D
HERTZ CORP: S&P Downgrades Ratings on Two Synthetic Securities
IMPAC SECURED: S&P Shaves Rating on Class B 2002-3 Certs. to BB
INDYMAC INDX: S&P Affirms Low-B Ratings on 48 Certificate Classes
JIM RICH: Case Summary & 20 Largest Unsecured Creditors
KAISER ALUMINUM: Court Approves Fourth Old Republic Stipulation
KAISER ALUMINUM: Gets Court Nod for Potato Ridge Mine Agreements
KMART CORP: Audrey Lavigne Wants Stay Lifted to Pursue Lawsuit
LARGE SCALE: Halts Operations Due to Negative Liquidity
LEVEL 3: Launching $1.23-Bil Exchange Offer Via Private Placement
LEVITZ HOME: New Levitz Owners Set Policy on Customer Purchases
MAAX HOLDINGS: Weak Earnings Spur S&P to Junk Senior Debt Ratings
MARYLAND ECONOMIC: Poor Performance Spurs Moody's to Pare Rating
MATHON FUND: U.S. Trustee Appoints 5-Member Creditors Committee
MCI INC: Gets Final State Nod From Washington on Verizon Merger
MCI INC: Will Pay $3.5 Mil. in Incentive Awards to Five Officers
MCLEODUSA INC: Headquarter Sold for $27 Mil. to Aegon Affiliate
MEDICAL TECHNOLOGY: Employs Sutton Frost as Independent Auditor
MEDICAL TECHNOLOGY: Hires Yee & Associates as Patent Counsel
MESABA AVIATION: Hires Sonnenschein Nath as Special Counsel
MESABA AVIATION: ALPA Says Incentive Plans Are Counter-Productive
NEXTEL PARTNERS: Determines Put Price at $28.50 Per Share
NINE DRAGONS: Voluntary Chapter 11 Case Summary
NORTHWEST AIRLINES: Otterbourg Approved as Committee's Counsel
NORTHWEST AIRLINES: Resolves Mail Facility Dispute With MAC
NRG ENERGY: Selling Securities to Fund Buy-Out & Restructure Debt
NRG ENERGY: Selling Audrain Generating to AmerenUE for $115 Mil.
OMEGA HEALTHCARE: Closes Purchase of 11 Facilities for $115.5 Mil.
ON SEMICONDUCTOR: Repays $94.5 Million of Jr. Subordinated Note
PENNSYLVANIA ECONOMIC: S&P Puts BB Rating on Northampton Sr. Bonds
PORT AUTHORITY: S&P Revises JFK Revenue Bonds' Outlook to Positive
POTLATCH CORP: Board Okays Final Steps to REIT Conversion
REAL ESTATE: Moody's Places Low-B Ratings on Four Security Classes
RESIX FINANCE: Moody's Assigns Low-B Ratings to Four Note Classes
ROMACORP INC: Robert Gary Approved as Accounting Consultant
ROUTE 9A REALTY: Case Summary & 4 Largest Unsecured Creditors
SAINT VINCENTS: Parties Oppose Open-Ended Lease Decision Extension
SAINT VINCENTS: Hires Alvarez & Marsal as Crisis Managers
SAINT VINCENTS: Inks Pact Resolving Dispute with New York Nurses
SEARS HOLDINGS: Realigns Merchandising Divisions
SMART HOME: Moody's Places Ba1 Rating on Class B1 Securities
SMURFIT-STONE: Loan Amendment Cues S&P to Withdraw Ratings
STELCO INC: Ernst & Young Files 44th Monitor's Report
SYNDICATED FOOD: U.S. Trustee Will Meet Creditors on February 6
SYNDICATED FOOD: Taps Hostetler & Kowalik as Bankruptcy Counsel
TABERNA PREFERRED: Fitch Rates $24.4M Class E Secured Notes at BB+
TAUBMAN CENTERS: S&P Affirms B+ Rating on $300MM Preferred Stock
TEC FOODS: Files Schedules of Assets and Liabilities
TOMMY HILFIGER: Apax Merger Cues S&P's Negative Watch Listing
TW INC: Committee Wants GBO's $137 Million Claim Tagged as Equity
UAL CORP: Appeal Process on Termination of Pension Plan Expedited
VARIG S.A.: Brazilian Court Restores Ruben Berta's Control
VARIG S.A.: Tap Air Rejects Docas' $139 Million Bid to Buy Units
VENTURE HOLDINGS: Judge Tucker May Dismiss or Convert Case
WCI COMMUNITIES: Will Pay Valid Tenders of 10-5/8% Sr. Sub. Notes
WELLS FARGO: Fitch Rates $2.4 Mil. Class I-B Certs. at Low-B
WINSTAR COMMS: Williams Transfers $21,612,155 Claim to Baldwin
* Large Companies with Insolvent Balance Sheets
*********
21ST CENTURY: U.S. Trustee Appoints 3-Member Creditors Committee
----------------------------------------------------------------
The United States Trustee for Region 17 appointed three creditors
to serve on an Official Committee of Unsecured Creditors in 21st
Century Technologies, Inc.'s chapter 11 case:
1. The Bike Doctor
Contact: Randall S. Henderson
1959 Paloma Street
Pasadena, California 91104
Tel: 626-798-9832
2. Wes Mowery
Contact: Harold W. McAden
4700 So. Washburn
P.O. Box 1148
Decatur, Texas 76234
Tel: 940-626-4811
Fax: 940-626-4955
3. Patricia Wilson
Contact: Jay R. Stucki
2912 West Story Road
Irving, Texas 75038
Tel: 214-441-3000
Fax: 214-441-3001
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 Las Vegas, Nevada, 21st Century Technologies,
Inc. -- http://www.tfctcorp.com/-- provides long-term debt and
equity investment capital to support the expansion of companies
in a variety of industries. The Company filed for chapter 11
protection on Nov. 1, 2005 (Bankr. D. Nev. Case No. 05-28185).
When the Debtor filed for protection from its creditors, it listed
total assets of $13,489,476 and total debts of $2,005,224.
ACTUANT CORP: Earns $21.3 Mil. of Net Income in 2006 First Quarter
------------------------------------------------------------------
Actuant Corporation (NYSE:ATU) reported record results for its
first quarter ended Nov. 30, 2005.
First quarter fiscal 2006 net earnings was $21.3 million. This
compares favorably to net earnings of $16.9 million for the first
quarter of fiscal 2005 which included a $2 million pre-tax gain
($1.3 million after tax), for the favorable settlement of a
liability to a former subsidiary.
First quarter sales increased approximately 42% to $284 million
compared to $200 million in the prior year. Current year results
include those from Key Components, Inc., Hydratight Sweeney,
Hedley Purvis Holdings Limited, and A.W. Sperry Instruments, Inc.,
which were acquired during the second and third quarters of fiscal
2005. Excluding the impact of foreign currency exchange rate
changes, first quarter core sales (year-over-year sales in both
existing and acquired businesses) increased approximately 1%.
Sales from businesses owned at least twelve months were flat
compared to the prior year, excluding foreign currency rate
changes. The increase in core sales resulted from strong
industrial and North American electrical sales, partially offset
by declines in the recreational vehicle and automotive convertible
top markets.
Robert C. Arzbaecher, President and CEO of Actuant, commented, "I
am pleased with the strong start to fiscal 2006 and better than
forecasted first quarter results. Of particular note was the
improvement in year-over-year sales growth excluding foreign
currency exchange rate changes from businesses owned at least
twelve months, which improved from -5% in the fourth quarter of
fiscal 2005 to flat in the first quarter of fiscal 2006."
Mr. Arzbaecher continued, "Tools & Supplies performance exceeded
our expectations, especially the industrial and electrical units,
which more than offset the expected declines in the automotive
convertible top and RV businesses. This favorable sales mix also
benefited margins and earnings. Engineered Solutions segment
results were in line with our expectations. We anticipate
improvement in this segment as the year progresses, reflecting
sales growth from new convertible top platform launches and
improved RV market conditions. Late in the first quarter, we
started actuation system production for two new retractable hard
top convertibles, and are scheduled to start shipping systems for
two additional new models in the next ninety days. Meanwhile, we
believe RV market conditions will improve as production levels
better match retail demand."
Actuant's operating profit in the first quarter of fiscal 2006 was
$38.2 million, or 45% higher than the $26.4 million in the first
quarter of last year, due to operating profit from companies
acquired subsequent to the first quarter of fiscal 2005, and
improvement in operating profit margins. Operating profit margins
expanded to 13.5% in the first quarter of fiscal 2006 from 13.2%
and 12.5% in the first and fourth quarters of fiscal 2005,
respectively, reflecting favorable sales mix, increased low cost
country sourcing, price increases and cost reductions.
Fiscal 2006 first quarter Tools & Supplies segment sales were
$181 million, a 61% increase over last year. Excluding the impact
of foreign currency rate changes, year-over-year first quarter
Tools & Supplies segment core sales increased 9% and sales from
businesses owned at least twelve months increased 11%. First
quarter fiscal 2006 Engineered Solutions segment sales increased
approximately 18% to $103 million, compared to $87 million in the
previous year. Excluding the impact of foreign currency rate
changes, first quarter Engineered Solutions core sales decreased
11% and sales from businesses owned at least twelve months
decreased 14%, both the result of lower sales to automotive
convertible top and RV motorhome original equipment manufacturers.
Total debt at November 30, 2005, was approximately $425 million.
Net debt (total debt less approximately $7 million of cash) was
$418 million, compared to $432 million at the beginning of the
quarter. This $14 million reduction resulted from strong first
quarter cash flow even after considering the seasonal working
capital increases in the business.
The Company also reported sales and earnings guidance for the
second quarter of fiscal 2006 and confirmed its full year
guidance. Mr. Arzbaecher stated, "We expect second quarter sales
and EPS to be lower than the first quarter due to normal
seasonality, but expect year-over year core sales and earnings
growth compared to the prior year period. We are projecting
second quarter sales and EPS to be in the range of $270 - $275
million and $0.58 - $0.63 per share, respectively. Full year
fiscal 2006 sales and earnings guidance remains unchanged from our
previous ranges of $1.150 - $1.175 billion and $2.75 - $3.00 per
share, respectively."
Headquartered in Glendale, Wisconsin, Actuant Corporation --
http://www.actuant.com/-- is a diversified industrial company
with operations in over 30 countries. The Actuant businesses are
market leaders in highly engineered position and motion control
systems and branded hydraulic and electrical tools and supplies.
Formerly known as Applied Power Inc., Actuant was created in 2000
after the spin-off of Applied Power's electronics business segment
into a separate public company called APW Ltd. Since 2000,
Actuant has grown its sales run rate from $482 million to over
$1 billion and its market capitalization from $113 million to over
$1.4 billion. The company employs a workforce of more than 5,000
worldwide. Actuant Corporation trades on the NYSE under the
symbol ATU.
* * *
As reported in the Troubled Company Reporter on Aug. 2, 2005,
Standard & Poor's Ratings Services assigned its preliminary 'B+'
subordinated debt rating to Actuant Corp.'s $900 million universal
415 shelf registration. At the same time, Standard & Poor's
affirmed its 'BB' corporate credit rating on the Milwaukee,
Wisconsin-based company. S&P says the outlook is stable.
ALLIED DOMECQ: Subordination Issues Cue S&P to Keep Negative Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'BB' senior
unsecured debt ratings on U.K.-based wines and spirits
manufacturer Allied Domecq Ltd. (BB/Positive/B), formerly Allied
Domecq PLC, and related entities remain on CreditWatch with
negative implications.
The senior unsecured debt ratings were originally placed on
CreditWatch with negative implications on April 21, 2005, pending
the possible resolution of subordination issues following the
takeover of Allied by France-based spirits manufacturer and
marketer Pernod Ricard S.A. (Pernod; BB/Positive/B). The 'BB/B'
corporate credit ratings on Allied remain aligned with those on
its parent, Pernod.
"We expect Pernod's management to decide on the implementation of
a valid remedy to the current structural subordination situation
within one month," said Standard & Poor's credit analyst Vincent
Allilaire. "This could be reached, for example, through the
granting of a Pernod Ricard guarantee to Allied's remaining
bondholders. Should no valid remedy be provided, Standard &
Poor's will reflect the structural subordination of Allied's
senior debt through a one notch downgrade, to 'BB-'."
The structural subordination is caused by lenders' uneven access
to the group's assets. In particular, bank lenders at the Pernod
level benefit from a guarantee from most of the substantial
entities of the combined group, including Allied Domecq Ltd.,
resulting in enhanced access to the group's assets. In contrast,
holders of outstanding bonds issued by Allied Domecq Financial
Services Ltd., and guaranteed by Allied Domecq Ltd., have to share
the benefit of their guarantor's assets with the Pernod lenders,
and do not benefit from a guarantee from any other company of the
Pernod group.
None of the Allied bonds includes any change-of-control clauses.
Only three outstanding bonds, however, maturing in or beyond 2009,
are expected not to be refinanced through the Pernod group's
multi-year multi-tranche EUR9.4 billion acquisition facility:
-- EUR600 million maturing in 2009;
-- GBP450 million (EUR666 million) maturing in 2011; and
-- GBP250 million (EUR370 million) maturing in 2014.
The ratings on Pernod continue to reflect:
* the highly leveraged capital structure of the group,
* potential integration issues following the acquisition of
Allied, and
* the group's aggressive financial policy.
However, from Pernod's superior business profile as one of the
leading manufacturers in the stable and cash-generative spirits
industry, the ratings benefit:
* the excellent brand diversification of the group's spirit
and wine portfolio,
* its balanced geographical diversification, and
* the group's expected immediate focus on deleveraging.
Allied Domecq's securities are traded in the United States and are
registered in the Securities and Exchange Commission. SEC filings
on the company are available for free at
http://ResearchArchives.com/t/s?3ed
ALLIED HOLDINGS: Has Until March 28 to Decide on Certain Leases
---------------------------------------------------------------
As reported in the Troubled Company Reporter on Dec. 9, 2005,
Allied Holdings, Inc., and its debtor-affiliates asked the U.S.
Bankruptcy Court for the Northern District of Georgia to extend,
until March 28, 2006, their exclusive period to assume, assume and
assign or reject unexpired non-residential real property leases.
Lexington Responds
LEPERCQ Corporate Income Fund L.P., asserts that the Debtors'
time to assume or reject its lease should not be further
extended.
Lexington leases to the Debtors the headquarters facility in
Decatur, Georgia. The facility is valued at over $14,600,000 and
leased to the Debtors for a 10-year term expiring in December
2007, for monthly rent of over $135,000.
Frank W. DeBorde, Esq., at Morris, Manning & Martin, L.L.P., in
Atlanta, Georgia, points out that while the Debtors continued to
pay required monthly rent, they are in breach of their duty to
replace the roof of the building pursuant to the Lease.
In November of 2004, Lexington commissioned an inspection of the
Roof yielding a report on its condition. The 2004 Expert Report
indicated that the Roof, now 23 years old, was showing signs of
exposure and deterioration and should be replaced in 2005 with
some interim repairs to keep the roofs watertight until then.
Estimated cost of replacing the Roof is between $160,000 and
$200,000.
Subsequently, Lexington asked the Debtors to replace the Roof
based on the 2004 Expert Report. The Debtors refused, suggesting
that their obligation to replace the Roof only applied in an
emergency situation. Mr. DeBorde argues that the express terms of
the Lease require the Debtors to replace the Roof if it is
necessary or desirable. "This obligation is not contingent on
the existence of an emergency," Mr. DeBorde contends.
Lexington conducted another inspection on December 13, 2005. The
2005 Expert Report indicated that no repairs appear to have been
conducted since the last site inspection and the Roof should be
scheduled for replacement as soon as is feasible in 2006.
Mr. DeBorde relates that large portions of the Georgia Premises
have been sublet to third parties and at least 25% of the
premises is vacant and not being used by the Debtors. Consistent
with past practices, Lexington wants to sublet the unused portion
of the Georgia Premises to:
(a) lessen the rental burden to the estate under the Lease;
and
(b) mitigate prejudice to Lexington in recovering an empty
leasehold in the event the Debtors ultimately rejects the
Lease.
Regardless of whether the Debtors satisfy their rental
obligations, Mr. DeBorde points out that Lexington is continuing
to suffer injury because as time elapses and the condition of the
Roof continues to deteriorate, the threat caused by natural
elements to the structural integrity of the Premises is
exacerbated. As a result, Lexington loses the opportunity to
market vacant portions of the Georgia Premises to limit its
potential exposure in the event the Lease is rejected.
Accordingly, Lexington asks the Court to deny the Debtors'
request.
In the alternative, Lexington wants the Court to condition
approval on the Debtors' (i) replacement of the Roof within 15
days of the resolution of the Objection and (ii) consent to
permitting Lexington to sublease vacant portions of the Georgia
Premises.
* * *
Except for the Lexington Lease, the Court extends the Debtors'
lease decision period through and including March 28, 2006.
The Court directs the Debtors to assume or reject the Lexington
Lease by February 28, 2006. Lexington may solicit, subject to
the Debtors' approval, offers of sublease for the vacant portions
of the Georgia Premises, the Court rules.
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case No. 05-12515). Jeffrey W. Kelley, Esq., at Troutman Sanders,
LLP, represents 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. (Allied
Holdings Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ALLMERICA FINANCIAL: Goldman Merger Talks Cue S&P's Positive Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch status
of its 'BB' counterparty credit and financial strength ratings on
Allmerica Financial Life Insurance & Annuity Co. to CreditWatch
positive from CreditWatch negative.
This rating action follows discussions with Goldman Sachs
Reinsurance Group, which is in the process of acquiring AFLIAC.
These discussions helped clarify GSRG's plans for AFLIAC.
"Assuming the transaction successfully closes, we now expect that
GSRG will manage AFLIAC as part of an ongoing operation and look
to add business to AFLIAC's books through additional
acquisitions," said Standard & Poor's credit analyst Ovadiah
Jacob. "Under GSRG, AFLIAC will be able to capitalize on its
relationships with Goldman Sachs Group Inc. in managing its
business and associated risks."
Nevertheless, Standard & Poor's still will consider AFLIAC to be a
nonstrategic component of Goldman.
Standard & Poor's also expects that GSRG will enhance AFLIAC's
profitability through expense savings attained by building a
variable cost structure around policy administration and asset
management. Goldman is expected to maintain AFLIAC capital
adequacy at an extremely strong level. GSRG has said that Goldman
has no intentions of taking dividends out of AFLIAC as part of the
transaction or in the near term.
The AFLIAC acquisition is expected to close on or about
Dec. 31, 2005. If the transaction successfully closes, Standard &
Poor's will likely raise its ratings on AFLIAC to 'BBB'.
ASARCO LLC: Encycle Trustee Wants ARCADIS as Environmental Advisor
------------------------------------------------------------------
Michael Boudloche, the Chapter 7 trustee overseeing the
liquidation of Encycle/Texas, Inc.'s estate, seeks authority from
the U.S. Bankruptcy Court for the District of Southern Texas in
Corpus Christi to employ Kenneth Brandner and ARCADIS G&M as
environmental consultants.
The Encycle Trustee solicited the assistance of Mr. Brandner to
manage the real property of Encycle's estate and oversee the
environmental situations at Corpus Christi, in Texas. Mr.
Brandner is a duly licensed geologist, who has examined and
evaluated the property on the Encycle Trustee's behalf.
As environmental consultants, Mr. Brandner will assist and advise
the Encycle Trustee in environmental matters and assist the
coordination of clean up activities.
The current hourly rates charged by ARCADIS for environmental
consulting services are:
Principal $125
Principal Engineer/Geologist/Hydrogeologist III $110
Senior Engineer/Geologist/Hydrogeologist II $105
Associate Engineer/Geologist/Hydrogeologist I $95
Project Manager $90
Staff Engineer/Geologist/Hydrogeologist $80
Field Engineer/Geologist/Hydrogeologist $70
Environmental Scientist $85
Technician II $54
Drafts Person $57
Word Processor $42
Clerical $37
ARCADIS will apply to the Court for approval of all fees.
Mr. Brandner assures the Court that he and firm do not hold any
adverse interest to Encycle's estates and are disinterested
parties within the meaning of Section 101(14) of the Bankruptcy
Code.
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
through 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.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000).
ASARCO LLC: Encycle Trustee Can Sell River Road Assets
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas in
Corpus Christi gave Michael Boudloche, the Chapter 7 trustee
overseeing the liquidation of Encycle/Texas, Inc.'s estate,
authority to sell the Debtor's office equipment, furniture and
fixtures, and miscellaneous items used in the Debtor's business
located at 5500 Up River Road, in Corpus Christi, Texas. The sale
will be free and clear of all liens, claims and interests.
As previously reported in the Troubled Company Reporter on
Dec. 16, 2005, Bond & Bond Auctioneers will auction the assets.
The Chapter 7 Trustee will pay the Firm's fees upon approval of
the Trustee's auction report:
-- 10% fee on first $50,000 of sales,
-- 5% fee on $50,001 to $100,000 of sales, and
-- 3% fee in excess of $100,000 of sales.
Furthermore, a 5% buyer's fee will be assessed to any buyer who
pays with a check or by credit card.
The Chapter 7 Trustee's analysis indicated that only nominal
income taxes will be due as a result of the sale. The Trustee
believes that Encycle/Texas' estate will receive a significant
income from the sale for the creditors' benefit.
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
through 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.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000).
ATA AIRLINES: Wilmington Wants Participation Claim Amount Amended
-----------------------------------------------------------------
Thomas N. Eckerle, Esq., in Indianapolis, Indiana, notes that the
Rights Offering Claim Amount List furnished by ATA Airlines, Inc.,
and its debtor-affiliates provides that the total Rights
Participation Claim Amount for Wilmington Trust Company is
$35,000,000. Wilmington Trust is the Indenture or Loan Trustee,
Senior Pass Through Trustee, Subordinated Pass Through Trustee and
Subordination Agent for the 2000-1 Series of ATA Enhanced
Equipment Trust Certificates.
Wilmington Trust believes that the $35,000,000 represents the
outstanding balance on the Class C Certificates, which is owed to
Wilmington Trust as the Subordinated Pass Through Trustee under
the governing Enhanced Equipment Trust Certificates financing
documents. However, Wilmington Trust avers that the Reorganizing
Debtors failed to recognize any amounts owing to Wilmington
Trust, as Loan Trustee, with respect to the Leases, or the
equipment notes under the EETC financing documents.
Mr. Eckerle explains that Wilmington Trust's claims arise under
various leases with respect to seven aircraft with U.S.
Registration Nos. N515AT, N523AT, N524AT, N525AT, N526AT, N527AT,
and N528AT. Wilmington Trust is the assignee of the rights of the
Lessors under the Leases pursuant to the terms of various
Indentures entered into between the Owner Trustees of the
Aircraft, as Lessors, and Wilmington Trust.
Pursuant to the terms of the Leases, the Lessor may demand payment
of these amounts from the Debtors:
(a) All unpaid Basic Rent due at any time before the
Stipulated Loss Value Date on or immediately preceding the
date of the sale; plus
(b) An amount equal to the excess, if any, of the Stipulated
Loss Value of the Aircraft and for the computation of
unpaid Rent over the proceeds of the sale, minus all
reasonable costs of Lessor and Mortgagee in connection
with the sale; plus
(c) If the date of the sale is not a Stipulated Loss Value
Date, an amount equal to interest on the outstanding
principal amount of the Equipment Notes at the rate per
annum borne from and including the Stipulated Loss Value
Date for the computation of unpaid Rent to the date of the
sale; plus
(d) Interest on the amounts at the Past-Due Rate from and
including the date on which any amount was due to the date
of payment of the amount; plus
(e) Interest on the sum of the amounts at the Past-Due Rate
from and including the date of the sale to the date of
payment of the amounts.
Based on that formula as provided in the Leases, Wilmington Trust
holds a claim against the Reorganizing Debtors in an amount not
less than $148,000,000 as a result of their rejection of the
Leases, Mr. Eckerle informs the U.S. Bankruptcy Court for the
Southern District of Indiana.
Accordingly, Wilmington Trust asks the Court to amend the Rights
Participation Claim Amount for Wilmington Trust Company to an
amount not less than $148,000,000.
Wilmington Trust is not seeking any additional amounts with
respect to other claims under the governing EETC financing
documents or applicable law. The other amounts will be determined
in the pending contested matter concerning the Debtors' objection
to Wilmington Trust's claims.
Wilmington Trust is not disputing the Rights Participation Claim
Amount listed for Ambac Assurance Corporation on the Rights
Offering Claim Amount List.
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. 44; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ATA AIRLINES: NatTel Objects to Six C8 Airlines Admin. Claims
-------------------------------------------------------------
Pursuant to Section 503 of the Bankruptcy Code and Rule 3007 of
the Federal Rules of Bankruptcy Procedure, NatTel, LLC, disputes
six administrative expense claims filed against C8 Airlines, Inc.,
formerly known as Chicago Express Airlines, Inc.:
Claimant Claim Amount Objection
-------- ------------ ---------
AMR Leasing Corp. $9,359,895 AMR Claim is against ATA
Airlines, Inc., and not C8
because the AMR Aircraft
were leased to ATA Airlines.
Bank of Blue $453,528 The leased equipment was
Blue Valley presumably returned to
Blue Valley and Blue Valley
suffered no damages as a
result. To the extent the
Blue Valley Claim is valid,
it should be treated as a
prepetition Claim not a C8
Admin Claim.
Marion County, $21,840 The Marion Claim is untimely
Indiana Treasurer filed with the BMC Group, Inc.,
and thus should be disallowed.
Toledo-Lucas $16,352 The Toledo Claim was untimely
County, Ohio Port filed BMC and thus should be
disallowed.
MBNA America $4,886 The MBNA Claim was untimely
(Delaware) N.A. filed with BMC and thus
should be disallowed.
Lift-A-Loft $2,063 The Lift Claim was untimely
Corporation filed with BMC and thus should
be disallowed.
According to NatTel's analysis, 47 C8 Admin Claims were filed
totaling $10,810,765. If the U.S. Bankruptcy Court for the
Southern District of Indiana upholds NatTel's Omnibus Objection,
there will only be 39 Allowed C8 Admin Claims totaling $952,200.
The Court has scheduled a pretrial conference to consider any
objections to C8 Admin Claims on January 3, 2006, at 10:30 a.m.
EST.
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. 44; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ATLANTIC MUTUAL: Alliance Benefits Cue S&P to Affirm BB+ Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' counterparty
credit and financial strength ratings on Atlantic Mutual Insurance
Co., Centennial Insurance Co., and ALICOT Insurance Co. (f/k/a/
Atlantic Lloyds Insurance Co. of Texas). The outlook is stable.
Subsequently, Standard & Poor's withdrew all its financial
strength ratings on these companies and withdrew its counterparty
credit ratings on Centennial Insurance Co. and ALICOT Insurance
Co., at their request.
Standard & Poor's also affirmed its 'B+' surplus note rating on
Atlantic Mutual Insurance Co. Standard & Poor's is not
withdrawing this rating because the company's surplus notes remain
outstanding and are material in amount.
"The rating action reflects a new strategic alliance between
Atlantic Mutual Group and an insurance company subsidiary of
Countrywide Financial Corp. (A/Stable/--)," explained Standard &
Poor's credit analyst Jason Jones. "Atlantic Mutual Group should
benefit from Countrywide's strong brand and national presence in
the marketing of its personal lines business, and its
capitalization should be strengthened due to quota share
reinsurance in which Countrywide will take part of the risk."
Although the alliance could benefit the rating on Atlantic Mutual
Group's surplus notes, there are offsetting risks that prevent an
upgrade at this time. A future upgrade could occur if the
Countrywide alliance succeeds, results in personal lines are good,
and surplus increases from the March 31, 2005, level. A downgrade
could occur if the Countrywide alliance were unsuccessful, if
agent and customer loyalty were to falter, if personal lines
results are poor, or if there is adverse development in the
run-off commercial book greater than the modest deficiency that
Standard & Poor's incorporates into its capital model.
The personal lines business is expected to generate underwriting
profits in 2005-2006. Agent and customer loyalty should support
premiums, though a moderate decline is likely as Atlantic Mutual
Group begins to share premiums with Countrywide. Restructuring
costs and the effects of a first-quarter 2005 reinsurance
commutation will affect overall 2005 results. After the first
quarter, restructuring costs are expected to decline, and no
further losses from reinsurance commutations are expected now that
all finite reinsurance contacts that increased surplus have been
unwound. The company is expected to have sufficient resources to
meet interest coverage requirements and has sufficient
capitalization. Quality of capital is weakened by excessive
reliance on surplus notes, but this is expected to improve over
time due to retained earnings.
B&G FOODS: Agrees to Acquire Grandma's(R) Molasses from Cadbury
---------------------------------------------------------------
B&G Foods, Inc. (AMEX: BGF) reported that one of its subsidiaries
has signed an agreement to acquire the Grandma's Molasses brand
from Mott's LLP, a Cadbury Schweppes Americas Beverages company,
for $30 million in cash and certain assumed liabilities.
Grandma's Molasses is the leading brand of premium-quality
molasses sold in the United States. Grandma's Molasses is offered
in two distinct styles: Grandma's Original Molasses and Grandma's
Robust Molasses. These products are distributed nationally and in
all trade channels, with the majority of sales originating from
the grocery, food service and mass merchandiser segments of the
market.
"We are very pleased to add Grandma's Molasses to our portfolio of
brands," David L. Wenner, Chief Executive Officer of B&G Foods,
stated. "Not only does it complement our existing product
offerings, but it also leverages our manufacturing and
distribution capabilities. This transaction reflects our ongoing
commitment to acquiring strong brands with leading market
positions and high and sustainable margins at attractive
valuations."
In connection with the signing of the purchase agreement, B&G
Foods entered into an amendment to its existing credit facility.
The amendment, which is subject to the closing of the acquisition
and other customary closing conditions, provides for:
* a new $25 million term loan and
* a reduction in the existing revolving credit facility
commitments from $30 million to $25 million.
B&G Foods intends to use the proceeds of the term loan together
with cash on hand to fund the acquisition and to pay related
transaction fees and expenses.
B&G Foods expects the acquisition of the Grandma's Molasses brand
to close in January 2006, subject to the satisfaction of customary
closing conditions.
Lehman Brothers Inc. acted as financial adviser to B&G Foods and
Lehman Commercial Paper Inc. acts as administrative agent under
B&G Foods' credit facility. Winchester Capital acted as financial
adviser to Mott's.
About Mott's LLP
Mott's LLP, a subsidiary Cadbury Schweppes Americas Beverages,
which is a division of London-based Cadbury Schweppes PLC
(NYSE: CSG), is headquartered in Rye Brook, New York. Mott's is
the nation's leading producer of branded apple sauce and apple
juice.
About Cadbury Schweppes PLC
Cadbury Schweppes -- http://www.cadburyschweppes.com/-- is the
world's largest confectionery company and has a strong regional
presence in beverages in the Americas and Australia. With origins
stretching back over 200 years, today Cadbury Schweppes' products
-- which include brands such as Cadbury, Schweppes, Halls,
Trident, Dr Pepper, Snapple, Trebor, Dentyne, Bubblicious and
Bassett--are enjoyed in almost every country around the world.
The Group employs around 50,000 people.
About B&G Foods, Inc.
Headquartered in Parsippany, New Jersey, B&G Foods --
http://www.bgfoods.com/-- and its subsidiaries manufacture, sell
and distribute a diversified portfolio of high-quality, shelf-
stable foods across the United States, Canada and Puerto Rico.
B&G Foods' products include Mexican-style sauces, pickles and
peppers, hot sauces, wine vinegar, maple syrup, molasses, fruit
spreads, pasta sauces, beans, spices, salad dressings, marinades,
taco kits, salsas and taco shells. B&G Foods competes in the
retail grocery, food service, specialty store, private label, club
and mass merchandiser channels of distribution. B&G Foods'
products are marketed under many recognized brands, including
Ac'cent, B&G, B&M, Brer Rabbit, Emeril's, Joan of Arc, Las Palmas,
Maple Grove Farms of Vermont, Ortega, Polaner, Red Devil, Regina,
San Del, Ac'cent Sa-Son, Trappey's, Underwood, Up Country
Organics, Vermont Maid and Wright's.
* * *
As reported in today's Troubled Company Reporter, Standard &
Poor's Ratings Services assigned its 'BB-' bank loan rating and
recovery rating of '1' to B&G Foods Holding Corp.'s new $25
million five-year senior secured term loan B due 2010, indicating
an expected full recovery of principal in the event of a payment
default.
Standard & Poor's also affirmed its existing ratings on the
Parsippany, New Jersey-based diversified foods company, including
its 'B' corporate credit rating. The outlook is negative. Pro
forma total debt outstanding at Sept. 30, 2005, was about
$431 million.
B&G FOODS: S&P Places BB- Rating on $25 Mil. Senior Secured Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' bank loan
rating and recovery rating of '1' to B&G Foods Holding Corp.'s new
$25 million five-year senior secured term loan B due 2010,
indicating an expected full recovery of principal in the event of
a payment default.
Standard & Poor's also affirmed its existing ratings on the
Parsippany, New Jersey-based diversified foods company, including
its 'B' corporate credit rating. The outlook is negative. Pro
forma total debt outstanding at Sept. 30, 2005, was about
$431 million.
The new term loan will be added to the company's existing
$30 million senior secured credit facility through an amendment.
The amendment will also then reduce the revolving credit facility
from $30 million to $25 million and provide some relief from
existing tight covenants. Proceeds from the term loan and
$5 million in cash will be used to finance the $30 million
acquisition of Grandma's Molasses from Cadbury Schweppes. The
ratings are based on preliminary terms and are subject to review
upon final documentation.
BALLY TOTAL: Seeks Resolution on Shareholder Rights Plan Dispute
----------------------------------------------------------------
Bally Total Fitness Corporation (NYSE:BFT) is considering its
options in seeking a determination of whether its two largest
shareholders, Liberation Investments and Pardus Capital
Management, are acting in concert and whether these concerted
actions may have triggered the Company's Stockholder Rights Plan.
Bally said its options include further pretrial proceedings in
federal court or in a request for relief in the Delaware Chancery
Court where litigation that was recently filed by Liberation,
challenging the Rights Plan, is already pending.
Liberation Dispute
The Company noted that its complaint in federal court had forced
Liberation to disclose the previously omitted facts that
Liberation had suggested Don Kornstein to be nominated as a
candidate on the slate of Pardus European Special Opportunities
Master Fund. The Company also argued that Liberation's general
manager, Emanuel Pearlman had a 17-year-long relationship with Mr.
Kornstein and a close relationship with Bally and its former
management, including its now-discredited CEO Lee Hillman.
Court Rules Disclosure is Adequate
The U.S. District Court for the District of Delaware ruled late
Thursday, Dec. 22, that the disclosure of the dispute between
Liberation and the Company was sufficient at this juncture pending
resolution at a later point in time as to whether or not these
relationships or others resulted in the formation of a "group"
between Liberation and Pardus. Accordingly, the court determined
the need for expedited discovery and a preliminary injunction
hearing has been mooted.
Bally said it continues to believe that Liberation's disclosure is
inadequate. Importantly, the Court's decision did not yet address
the issue of whether Liberation and Pardus are, in fact, acting as
a "group." Bally also noted that Pardus had made certain
additional disclosures in its preliminary proxy materials filed
with the SEC late Thursday.
Bally Total Fitness is the largest and only nationwide
commercial operator of fitness centers, with approximately four
million members and 440 facilities located in 29 states,
Mexico, Canada, Korea, China and the Caribbean under the Bally
Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM),
Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of
Canada(R) brands. With an estimated 150 million annual visits
to its clubs, Bally offers a unique platform for distribution
of a wide range of products and services targeted to active,
fitness-conscious adult consumers.
* * *
As reported in the Troubled Company Reporter on Dec. 6, 2005,
Standard & Poor's Ratings Services revised its CreditWatch
implications on Bally Total Fitness Holding Corp. to developing
from negative. The corporate credit rating remains at 'CCC'.
Bally's ratings were originally placed on CreditWatch on
Aug. 8, 2005, following the commencement of a 10-day period after
which an event of default would have occurred under the company's
$275 million secured credit agreement's cross-default provision
and the debt would have become immediately due and payable.
Subsequently, Bally entered into a consent with lenders to extend
the 10-day period until Aug. 31, 2005. Prior to Aug. 31, the
company received consents from its bondholders extending its
waiver of default to Nov. 30, 2005.
BELDEN & BLAKE: Restating Financials to Correct Accounting Errors
-----------------------------------------------------------------
The Board of Directors for Belden & Blake Corporation concluded
that the financial statements included in the Annual Report on
Form 10-K for 2004 and the three Form 10-Q quarterly reports in
2005 should be restated to correct errors in the company's
accounting for derivatives.
Accordingly, these financial statements should no longer be relied
upon. The company intends to amend its Annual Report on Form 10-K
for the year ended Dec. 31, 2004, and its Quarterly Reports on
Form 10-Q for the periods ended March 31, 2005, June 30, 2005, and
Sept. 30, 2005, to present restated financial statements in these
reports.
The restatement of its financial statements will correct certain
errors related to the accounting for derivatives. The company has
identified certain apparent errors in its accounting for
derivatives which will result in non-cash adjustments in the
periods indicated above. In addition, the company is considering
its review of the accounting for its derivatives, and may
determine that certain other adjustments are necessary. The total
amounts of the adjustments are not known at this time.
Investors are cautioned that the review of the company's
accounting is ongoing. Upon completion of the review, the company
may conclude that additional adjustments to its financial
statements for the periods disclosed above are necessary, that the
proper adjustments are different in type from those summarized
above, or that changes to its financial statements for other
periods may be necessary.
The expected restatements may constitute events of default under
the First Amended and Restated Credit and Guarantee Agreement,
dated as of Aug. 16, 2005, among the company, BNP Paribas, as
Administrative Agent, and certain lenders and the ISDA Master
Agreement, dated as of June 30, 2004, by and between the company
and J. Aron & Company. The company has communicated with the
lenders and J. Aron & Company to seek, if necessary, a waiver of
any potential default. There can be no assurance that the lenders
or J. Aron & Company will grant such a waiver.
Belden & Blake Corporation develops, produces, operates and
acquires oil and natural gas properties in the Appalachian and
Michigan Basins (a region which includes Ohio, Pennsylvania, New
York and Michigan). The company is a subsidiary of Capital C, an
affiliate of EnerVest Management Partners, Ltd.
* * *
As reported in today's Troubled Company Reporter, Standard &
Poor's Ratings Services said that its 'B' corporate credit rating
on oil and gas company Belden & Blake Corp. remains on CreditWatch
with negative implications, following the announcement that Belden
plans to restate its SEC Form 10K for 2004, as well as its Forms
10Q for the first three quarters of 2005.
BELDEN & BLAKE: Financial Restatements Spur S&P to Review Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'B' corporate
credit rating on oil and gas company Belden & Blake Corp. remains
on CreditWatch with negative implications, following the
announcement that Belden plans to restate its SEC Form 10K for
2004, as well as its Forms 10Q for the first three quarters of
2005.
Of great concern is that the restatements may cause an event of
default under Belden's credit agreement with BNP Paribas and a
default under its ISDA master agreement with J. Aron & Co.
"If such an event occurred and Belden were unable to obtain
waivers or otherwise resolve the covenant violation, an
acceleration of the amounts under the credit agreement or the
termination of the ISDA agreement could create a default under the
indenture for Belden's $192 million senior secured notes," said
Standard & Poor's credit analyst Paul Harvey.
At this time, Belden is seeking waivers from both parties.
Standard & Poor's plans to meet with management in the near term
to discuss the recent revisions as well as EnerVest Energy
Partners Ltd.'s growth objectives for Belden. Standard & Poor's
will resolve the CreditWatch listing soon thereafter.
BLOCKBUSTER INC: Moody's Affirms Subordinated Notes' Caa3 Rating
----------------------------------------------------------------
Moody's Investors Service upgraded the speculative grade liquidity
rating of Blockbuster Inc. to SGL-3 from SGL-4 and affirmed the
company's long term debt ratings (corporate family of B3 and
subordinated notes of Caa3) with a negative outlook. The upgrade
of the speculative grade liquidity ratings is prompted by the
banks' recent approval of an amendment to the company's credit
facilities which should provide Blockbuster with sufficient
cushion to comply with its financial covenants over the next
twelve months.
In addition, the upgrade also reflects the additional liquidity
Blockbuster received from the company's $150 million convertible
preferred stock offering last month.
This rating is upgraded:
* Speculative grade liquidity rating to SGL-3 from SGL-4
These ratings are affirmed:
* corporate family rating of B3;
* senior secured bank credit facilities of B3; and
* senior subordinated notes of Caa3.
The upgrade of Blockbuster's speculative grade liquidity rating to
SGL-3 (adequate liquidity) from SGL-4 (weak liquidity) reflects
Moody's expectation that Blockbuster is no longer at risk of
violating its financial covenants over the next 12 months. The
recent amendment Blockbuster received from its bank group was
conditioned upon the company's successful sale of $150 million of
convertible preferred stock and amended the financial covenants.
As a result of the amendment, the company has two covenants it
must adhere to through December 31, 2007: minimum consolidated
EBITDA and maximum capital expenditures. Moody's anticipates that
Blockbuster will have sufficient cushion to comply with these
covenants. As of September 30, 2005, the company had
approximately $190 million of cash on hand.
Moody's expects that Blockbuster is likely to generate break even
free cash flow over the next twelve months, but that this is
contingent on the company's ability to dramatically reduce its
working capital needs versus fiscal year 2005. Blockbuster has
not yet demonstrated that it can support its no late fee policy,
which causes consumers to hold onto rentals for longer periods of
time, without a continued substantial investment in working
capital.
Blockbuster has a $500 million revolving credit facility for
additional liquidity. However, as of September 30, 2005, only $77
million was available after deducting the $150 million Viacom
letters of credit, $33 million for other letters of credit and
$240 million of borrowings that were outstanding. A portion of
the proceeds from the convertible preferred stock offering are
being used to pay down the company's outstanding revolver balance
in the fourth quarter, which Moody's estimates will increase
availability to approximately $180 million. In addition, going
forward the amended credit agreement requires Blockbuster to use
any available cash in excess of $75 million to pay down its
outstanding revolver balance.
The B3 corporate family rating reflects Blockbusters significantly
reduced level of expected operating performance as a result of
management's new initiatives. The rating category reflects
Moody's expectation that operating income (EBIT) will be
insufficient to cover interest expense for the fiscal 2005 and
fiscal 2006 periods. Moody's expects that both earnings and free
cash flow over the next 12 months will continue to be constrained
by the cost of management's new initiatives. As a result, credit
metrics will continue to be weak. The rating category also
reflects the continued erosion of the rental industry, as well as
management's aggressive strategy for dealing with this shift in
its business environment. The ratings continue to be supported by
Blockbuster's clear leadership and global presence in the area of
video and game rentals and its high brand value.
The negative outlook reflects Moody's concern that Blockbuster has
not yet proven that the no late fee policy can generate a level of
operating income and free cash flow sufficient to cover its
current debt burden. The company's ratings could be further
downgraded should Blockbuster not be able to cut costs and working
capital requirements from its current levels during 2006.
To stabilize the rating outlook, Blockbuster needs to demonstrate
that it can generate sufficient earnings and cash flow such that
it has reasonable prospects of reducing leverage to a manageable
level, and that operating income can cover interest expense at
least 1.0x.
Blockbuster Inc., headquartered in Dallas, Texas, is a leading
global provider of in-home movie and game entertainment with
approximately 9,100 stores throughout the:
* Americas,
* Europe,
* Asia, and
* Australia.
Total revenues for fiscal year 2004 were $6.1 billion.
BOYDS COLLECTION: Hires Deloitte & Touche as Independent Auditors
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland approved
The Boyds Collection, Ltd., and its debtor-affiliates' request to
retain Deloitte & Touche LLP as their independent auditors and
accountants.
Deloitte & Touche will:
a) audit and report the Debtors and their non-debtor
affiliates' consolidated financial statements for the year
ending Dec. 31, 2005, and thereafter;
b) review quarterly financial information to be included in
reports of the Debtors filed with the United States
Securities and Exchange Commission; and
c) provide other audit and accounting services, as may be
requested by the Debtors.
The Firm's professionals' current hourly billing rates:
Designation Hourly Rate
----------- -----------
Partner/Principal/Director $600 - $750
Senior Manager $460 - $500
Manager $340 - $400
Senior Staff $270 - $300
Staff $220 - $230
To the best of the Debtors' knowledge, Deloitte & Touche
represents no interest adverse to the Debtors or their estate.
Headquartered in McSherrystown, Pennsylvania, The Boyds
Collection, Ltd. -- http://www.boydsstuff.com/-- designs and
manufactures unique, whimsical and "Folksy with Attitude(SM)"
gifts and collectibles, known for their high quality and
affordable pricing. The Company and its debtor-affiliates filed
for chapter 11 protection on Oct. 16, 2005 (Bankr. Md. Lead Case
No. 05-43793). Matthew A. Cantor, Esq., at Kirkland & Ellis LLP
represents the Debtors in their restructuring efforts. As of
June 30, 2005, Boyds reported $66.9 million in total assets and
$101.7 million in total debts.
BOYDS COLLECTION: Has Until Mar. 15 to Decide on Unexpired Leases
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland extended
The Boyds Collection, Ltd., and its debtor-affiliates' deadline to
assume, assume and assign, or reject unexpired non-residential
real property leases pursuant to Section 365(d)(4) of the
Bankruptcy Code, until March 15, 2006.
The Debtors are parties to four unexpired leases for property
located at:
Premises Expiration Date
-------- ---------------
McSherrystown Warehouse, McSherrystown, Pa. Dec. 31, 2009
Hanover Business Center Ltd., Hanover, Pa. Nov. 30, 2006
AmericasMart location, Atlanta, Ga. April 30, 2009
York County Warehouse, York County, Ga. June 31, 2006
The Debtors are currently using the unexpired leased properties in
the ordinary course of their business operations. The Debtors
said that the extension will give them more time to examine the
unexpired leases and analyze their terms and payments to determine
whether they be assume or rejected.
Headquartered in McSherrystown, Pennsylvania, The Boyds
Collection, Ltd. -- http://www.boydsstuff.com/-- designs and
manufactures unique, whimsical and "Folksy with Attitude(SM)"
gifts and collectibles, known for their high quality and
affordable pricing. The Company and its debtor-affiliates filed
for chapter 11 protection on Oct. 16, 2005 (Bankr. Md. Lead Case
No. 05-43793). Matthew A. Cantor, Esq., at Kirkland & Ellis LLP
represents the Debtors in their restructuring efforts. As of
June 30, 2005, Boyds reported $66.9 million in total assets and
$101.7 million in total debts.
CALPINE CORP: Court Approves Joint Administration of Ch. 11 Cases
-----------------------------------------------------------------
Rule 1015(b) of the Federal Rules of Bankruptcy Procedure
provides, in relevant part, that "[i]f two or more petitions are
pending in the same court by or against a debtor and an
affiliate, the court may order joint administration of the
estates."
Calpine Corporation and its 77 debtor-affiliates are "affiliates"
as that term is defined under Section 101(2) of the Bankruptcy
Code, Eric N. Pryor, the Company's executive vice president,
interim and deputy chief financial officer and corporate risk
officer, tells the U.S. Bankruptcy Court for the Southern District
of New York.
Many of the motions, hearings and orders that will arise in
Calpine's Chapter 11 cases will jointly affect each and every
Debtor. If their cases are jointly administered, Calpine
Corporation and its debtor-affiliates will be able to reduce fees
and costs resulting from the administration of their cases and
ease the onerous administrative burden of having to file multiple
and duplicative documents.
Although the Debtors operate together, on an integrated basis,
the assets and liabilities of each Debtor are separately
maintained. To the extent specific information is needed as to a
particular Debtor entity, Mr. Pryor says, the Debtors are able to
access this information and reassemble it as may be required.
The Debtors will continue to operate as separate and distinct
legal entities, and propose to continue to maintain their books
and records consistent with their prepetition practices.
Joint administration, Mr. Pryor asserts, will avoid duplicative
notices, applications, and orders, thereby saving the Debtors
considerable time and expense. The rights of creditors will not
be adversely affected because the Debtors seek only
administrative, and not substantive, consolidation of their
estates. The rights of all creditors will be enhanced by the
reduced costs that will result from the joint administration of
Calpine's chapter 11 cases. The Court also will be relieved of
the burden of entering duplicative orders and maintaining
duplicative files. Supervision of the administrative aspects of
the Debtors' chapter 11 cases by the United States Trustee for
the Southern District of New York will be simplified.
The Debtors will consult with the U.S. Trustee for authority to
file the monthly operating reports required by the U.S. Trustee's
Operating Guidelines on a consolidated basis. The Debtors
believe that consolidated reports would further administrative
economy and efficiency without prejudice to any party-in-interest
and that those reports would accurately reflect the Debtors'
consolidated business operations and financial affairs.
Accordingly, the Court orders that the Debtors' chapter 11 cases
will be consolidated for procedural purposes only and will be
administered jointly under Case No. 05-60200.
The Honorable Burton R. Lifland of the Bankruptcy Court for the
Southern District of New York rules that all pleadings and papers
filed in the Debtors' cases will be captioned:
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
_______________________________
)
In re: )
) Chapter 11
Calpine Corporation., et al., )
) Case No. 05-60200 (BRL)
Debtors. ) Jointly Administered
_______________________________)
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts. As of Dec. 19, 2005, the Debtors
listed $26,628,755,663 in total assets and $22,535,577,121 in
total liabilities. (Calpine Bankruptcy News, Issue No. 1;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
CALPINE CORP: Final DIP Financing Hearing Set for January 25
------------------------------------------------------------
As previously reported, the Honorable Burton R. Lifland of the
U.S. Bankruptcy Court for the Southern District of New York
authorized Calpine Corporation to borrow up to $500,000,000 of its
$2 billion DIP financing facility for working capital and other
general corporate purposes, and for payment of interest, fees and
expenses related to the DIP Documents. The Company has received
commitments for the DIP facility from Deutsche Bank and Credit
Suisse First Boston.
Pursuant to Section 364(c)(1) of the Bankruptcy Code, all of the
DIP Obligations will constitute allowed claims against the
Calpine Corporation and its debtor-affiliates with priority over
any and all administrative expenses, diminution claims and all
other claims against the Debtors, Judge Lifland rules.
The DIP lenders are granted:
(a) first lien on cash balances and unencumbered property;
(b) liens junior to certain other liens; and
(c) liens senior to certain other liens.
A full-text copy of the Interim DIP Financing Order is available
for free at http://bankrupt.com/misc/calpine_interimDIPorder.pdf
Final DIP Financing Hearing
The Court will convene the Final DIP Financing Hearing on
January 25, 2006, at 10:00 a.m. Objections must be filed and
served no later than January 19, 2006, at 4:00 p.m., prevailing
Eastern time.
At the Final Hearing, the Debtors will seek the Court's authority
to obtain the balance of the borrowings and letter of credit
issuances under the DIP Documents.
The Debtors will also seek to grant to the Collateral Agent on
behalf of the DIP Lenders a superpriority claim to the proceeds
of any Avoidance Actions, including, without limitation, any
property that is subject to an asserted prepetition lien that is
thereafter avoided by the Debtors or any other party-in-interest.
Furthermore, the Debtors will seek a waiver of all claims under
Section 506(c) of the Bankruptcy Code so that, except to the
extent of the Carve Out, no expenses of administration will be
charged against or recovered from the Collateral pursuant to
Section 506(c) of the Bankruptcy Code, without the prior written
consent of the Collateral Agent and no consent will be implied
from any other action, inaction, or acquiescence by the
Collateral Agent or the DIP Lenders.
Peter Pantaleo, Esq., and David Mack, Esq., at Simpson Thacher &
Bartlett LLP, represent Deutsche Bank and Credit Suisse.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts. As of Dec. 19, 2005, the Debtors
listed $26,628,755,663 in total assets and $22,535,577,121 in
total liabilities. (Calpine Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
CALPINE CORP: Bankruptcy Court Okays Interim Cash Collateral Use
----------------------------------------------------------------
Calpine Corporation's primary secured obligations arise under a
series of first and second lien financings totaling $4.32
billion. To secure payment of its obligations, Calpine granted
liens and security interests to its lenders and agents. Those
liens cover substantially all of Calpine's assets.
Prepetition Collateral
The Calpine Corp. Collateral includes:
(a) the stock and equity interests in Calpine's first-tier
domestic subsidiaries including:
-- Calpine International Holdings, Inc.,
-- Calpine Operations Management Company, Inc.,
-- Calpine Fuels Corporation,
-- Calpine Power Company,
-- Calpine Finance Company,
-- Calpine Administrative Services, Inc.
-- Calpine Energy Holdings, Inc.,
-- Calpine Northbrook Corporation of Maine, Inc., and
-- Androscoggin Energy, Inc.,
(b) certain oil and gas reserves and natural gas assets
located in the United States (most of which have been sold
in accordance with the Calpine First Lien Indenture);
(c) certain power plant assets; and
(d) certain intercompany notes issued by Calpine to its
subsidiaries.
The Calpine First Lien Indenture is also secured by first
priority liens upon and security interests in 65% of the stock of
Calpine Canada Energy Ltd.
Unencumbered Assets
Other than CCEC, the Calpine Corp. Collateral does not include
equity interests of any indirect subsidiary of Calpine,
including, without limitation, the equity interests of Thermal
Power Company, Geysers Power I Company and Geysers Power Company
II, LLC.
Project Financing
The Company borrowed money in relation to 16 projects:
a. The CalGen Projects
b. The KIAC Project
c. The Nissequogue Cogen Project
d. The Bethpage Project
e. The Watsonville Project
f. The Greenleaf Project
g. The Gilroy Cogen Project
h. The Geysers Projects
i. The Agnews Project
j. The Rumford-Tiverton Projects
k. The Aries Project
l. The South Point Project
m. The Broad River Project
n. The RockGen Project
o. The Acadia Project
p. The Auburndale Project
The Project Debtors pledged collateral to secure their
obligations under the applicable Project Loan Documents.
Cash Collateral
All of Calpine's cash and cash equivalents -- other than cash
held in deposit accounts up to $50,000,000 in the aggregate --
are "cash collateral" (as defined in Section 363(a) of the
Bankruptcy Code) pledged to secure repayment of the Calpine First
Lien Holders.
Need for Cash
During the first nine months of 2005, cash interest, rent,
principal repayment and debt repurchase obligations exceeded cash
flows from operations.
Calpine Corporation and its debtor-affiliates are now in dire need
to cash to, among other things:
(x) pay present operating expenses (including payroll),
(y) pay vendors on a going-forward basis to ensure a continued
supply of materials, including fuel, essential to the
Debtors' continued viability, and
(z) fund working capital requirements.
Because the Debtors filed for bankruptcy, absent court authority
pursuant to 11 U.S.C. Sec. 363(c), the Debtors can't touch their
lenders' cash collateral.
By this motion, the Debtors seek the U.S. Bankruptcy Court for the
Southern District of New York's authority to use their lenders'
cash collateral. In return, the Debtors propose to grant adequate
protection to their lenders.
Adequate Protection to Project Lenders
To protect the Project Lenders' interest in the Project Lender
Collateral and to protect the Project Lenders from any diminution
in value of the Project Lender Collateral, the Debtors propose:
-- to pay, and continue to pay, all accrued and unpaid
interest due under the Project Loan Documents;
-- to grant replacement liens;
-- to continue complying with all provisions of the Project
Loan Documents, other than provisions that impose
restrictions on the use of Cash solely as a consequence of
the insolvency or bankruptcy filing; and
-- to pay legal fees to the extent provided for under the
Project Loan Documents.
Adequate Protection to Calpine First Lien Holders
The Debtors' first lien debt is comprised of the $785,000,000
9.625% First Priority Senior Secured Notes due 2014, issued by
Calpine pursuant to an Indenture, dated as of September 30, 2004,
between Calpine and Wilmington Trust Company, as trustee, and
certain noteholders. As of the Petition Date, the total
principal amount outstanding under the Calpine First Lien Debt
was approximately $641.11 million.
As adequate protection to protect the Calpine First Lien Holders
from diminution, if any, in the value of their interest in the
Calpine Corp. Cash Collateral, the Debtors propose:
-- to pay, and continue to pay, all accrued and unpaid
interest on the Calpine First Lien Indenture;
-- to grant replacement liens;
-- to pay all reasonable fees and disbursements of counsel for
and the financial advisor to the First Lien Trustee;
-- to provide an equity cushion (the Debtors believe that the
value of the Calpine Corp. Collateral is sufficient to
provide a very meaningful equity cushion); and
-- to apply $400,000,000 on deposit at Union Bank of
California, N.A., to repay $400,000,000 in principal of the
Calpine First Lien Debt.
Adequate Protection to Calpine Second Lien Holders
Calpine's second lien debt is comprised of:
(a) the $500,000,000 Second Priority Senior Secured Floating
Rate Notes due 2007;
(b) the $1,150,000,000 8.50% Second Priority Senior Secured
Notes due 2010;
(c) the $900,000,000 8.75% Second Priority Senior Secured
Notes due 2013, in each case issued by Calpine pursuant to
certain indentures, dated as of July 16, 2003, between
Calpine and Wilmington Trust Company, as trustee;
(d) the $400,000,000 9.875% Second Priority Senior Secured
Notes due 2011, issued by Calpine pursuant to an
Indenture, dated as of November 18, 2003, between Calpine
and the Calpine Second Lien Trustee; and
(e) the $750,000,000 Senior Secured Term Loans due 2007,
issued pursuant to a Credit Agreement, dated as of
July 16, 2003, among Calpine, as borrower, Goldman Sachs
Credit Partners, L.P., as sole lead arranger, sole
bookrunner and administrative agent and the various co-
arrangers, managing agents and lenders named therein.
As of the Petition Date, the total principal amount outstanding
under the Calpine Second Lien Debt was approximately $3.672
billion.
As adequate protection to protect the Calpine Second Lien Holders
from diminution, if any, in the value of their interest in the
Calpine Corp. Cash Collateral, the Debtors propose:
-- to pay the Second Lien Trustee $75,000,000 on March 31,
2006;
-- to pay all reasonable fees and disbursements of counsel for
the ad hoc committee of the Calpine Second Lien Holders and
the financial advisor to the Calpine Second Lien Holders;
and
-- to grant replacement liens, which will be subordinate and
junior to the replacement liens granted to the First Lien
Holders.
The Debtors made concerted efforts to negotiate a consensual cash
collateral order with the Calpine Second Lien Holders. The
Debtors are prepared to pay interest to the Calpine Second Lien
Holders to the extent permitted by their financial situation and
contractual obligations.
Without the use of the Cash Collateral, the Debtors would
experience a severe disruption of their businesses. The Debtors
and their financial advisors believe that the going concern value
of the Debtors' businesses is significantly greater than their
liquidation value. Accordingly, the continued operation of the
Debtors' businesses protects the Project Lenders', Calpine First
Lien Holders' and Calpine Second Lien Holders' interests.
Interim Approval
On an interim basis, the Honorable Burton R. Lifland of the
Bankruptcy Court for the Southern District of New York permits the
Debtors to:
(a) use the Calpine Corp. Cash Collateral to pay ordinary and
necessary business expenses, chapter 11 administration
expenses and other expenses approved by the Court;
(b) use Restricted Cash subject to restrictions under Project
Loan Documents (notwithstanding the existence of any event
of default triggered by the bankruptcy filing or the
Debtors' insolvency); and
(c) allow the Project Debtors to dividend Unrestricted Cash to
their parent entities.
Judge Lifland directs that $400,000,000 of Designated Asset Sale
Proceeds currently deposited in a Control Account at Union Bank
must remain on deposit until a ruling about the disposition of
those funds. Calpine makes it clear that the Debtors intend to
ask the Court for authority at the Final Hearing to pay those
funds to repay $400 million of First Lien Debt.
Judge Lifland finds that the Debtors' proposed adequate protection
proposal is appropriate, and approves it in all respects. The
Calpine Corp. Lienholders and the Project Lenders receive
replacement post-petition liens with a "superpriority"
administrative claim against the Debtors' estates.
A full-text copy of the Interim Cash Collateral Order is available
for free at:
http://bankrupt.com/misc/calpine_interimcashcollateral.pdf
The Court will hold the Final Cash Collateral Hearing on Jan. 25,
2006, at 10:00 a.m. Objections must be filed and served no later
than January 19, 2006, at 4:00 p.m., prevailing Eastern time.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts. As of Dec. 19, 2005, the Debtors
listed $26,628,755,663 in total assets and $22,535,577,121 in
total liabilities. (Calpine Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
CELLEGY PHARMACEUTICALS: Nasdaq SmallCap to Halt Stock Trading
--------------------------------------------------------------
Cellegy Pharmaceuticals, Inc., received a notice from the Listing
Qualifications Panel of the Nasdaq Stock Market indicating that
the Company's common stock will be removed from the Nasdaq
SmallCap Market, effective at the opening of business on Dec. 29,
2005.
The Company anticipates that after removal, the common stock will
be eligible for trading on the OTC Bulletin Board following
completion of required procedures, including the filing and
approval of a Form 211. The Company is taking steps to facilitate
commencement of trading on the OTCBB as soon as practicable and is
in communication with one or more of its market makers to provide
them with information necessary for the Company's shares to be
quoted on the OTCBB. The Company believes that trading of the
common stock on the OTCBB should commence after the required
filing is approved. There can be no assurance that trading on the
OTCBB will be available immediately after removal of the shares
from the Nasdaq SmallCap Market. If the Company's shares are not
immediately traded on the OTCBB, they may be quoted by The Pink
Sheets LLC, which is a privately owned company whose Electronic
Quotation Service provides an Internet-based, real-time quotation
service for OTC equities and bonds.
The delisting from the Nasdaq Stock Market is due to the Company
not currently satisfying the $35 million market capitalization
requirement of Nasdaq Marketplace Rule 4310(c)(2)(B)(ii) for
continued listing on the Nasdaq SmallCap Market. Furthermore, the
Company does not comply with alternative standards for continued
listing on the Nasdaq SmallCap Market in Marketplace Rule
4310(c)(2)(B)(i) or Marketplace Rule 4310(c)(2)(B)(iii), which
require minimum stockholders' equity of $2,500,000 or net income
from continuing operations of $500,000 in the most recent
completed fiscal year or in the last three most recent completed
fiscal years, respectively. The Company has determined not to
request a review of the Panel's determination.
The OTCBB is a regulated quotation service that displays real-time
quotes, last-sale prices and volume information in over-the-
counter securities. OTCBB securities are traded by a community of
market makers that enter quotes and trade reports through a
sophisticated, closed computer network. Trading information and
quotations for securities quoted through the OTCBB are generally
available on business news and financial websites and through
securities brokers. The OTCBB is a quotation medium for
subscribing members, not an issuer listing service, and should not
be confused with The Nasdaq Stock Market.
Cellegy Pharmaceuticals is a specialty biopharmaceutical company
that develops and commercializes prescription drugs for the
treatment of women's health care conditions, including sexual
dysfunction, HIV prevention and gastrointestinal disorders.
At Sept. 30, 2005, Cellegy Pharmaceuticals, Inc.'s balance sheet
showed a $4,525,000 stockholders' deficit compared to a $6,743,000
deficit at Dec. 31, 2004.
* * *
Going Concern Doubt
Due to its cash position and negative operating cash flows,
Cellegy received a going concern qualification in the report of
its independent registered public accounting firm included in the
Annual Report on Form 10-K for the year ended December 31, 2004.
The Company's plans, with regard to its cash position, include
raising additional required funds through one or more of the
following options, among others: making further Kingsbridge SSO
draw downs, seeking partnerships with other pharmaceutical
companies to co-develop and fund research and development efforts,
pursuing additional out-licensing arrangements with third parties,
re-licensing and monetizing future milestone and royalty payments
expected from existing licensees and seeking equity or debt
financing. However, there is no assurance that any of these
options will be implemented on a timely basis or that the Company
will be able to obtain additional financing on acceptable terms.
In addition to these options, Cellegy will continue to implement
further cost reduction programs and reduce discretionary spending,
if necessary, to meet its obligations.
CHEMTURA CORP: European Commission Slaps $16-Mil Anti-Trust Fine
----------------------------------------------------------------
Chemtura Corporation (NYSE:CEM) disclosed that the European
Commission has imposed a fine of EUR13.6 million (approximately
$16 million) on the company in connection with the EC's rubber
chemicals investigation. Chemtura's continual cooperation with
the EC throughout its investigation of conduct prior to October
2002 resulted in the company receiving maximum leniency, a 50
percent reduction in its fine. The company believes that this
marks the end of coordinated investigations by the United States,
Canada and the European Union that were first publicly announced
in the fall of 2002.
"We are pleased to see this lengthy and expensive legacy ordeal
resolved," said Robert L. Wood, chairman, president and CEO.
Separately, Chemtura reported that it has settled rubber chemicals
direct-purchaser, antitrust claims with claimants representing
over half of the company's relevant U.S. rubber chemicals sales
and has also settled other antitrust-related civil matters for a
combined total of approximately $50 million.
In the fourth quarter of 2005, Chemtura will take a charge of
approximately $16 million for the EC fine and a charge of
$11 million to increase its previously established reserves for
antitrust matters.
"The decisions announced reflect the very significant progress we
are making in bringing these legal issues to closure so that we
can give our undivided attention to value-creating commercial
priorities that are in the best interests of our shareholders,"
Mr. Wood concluded.
Chemtura Corporation -- http://www.chemtura.com/-- is a global
manufacturer and marketer of specialty chemicals, crop protection
and pool, spa and home care products. Headquartered in
Middlebury, Connecticut, the company has approximately 7,300
employees around the world.
* * *
As reported in the Troubled Company Reporter on Sept. 26, 2005,
Moody's Investors Service affirmed the ratings of Chemtura
Corporation (Chemtura -- Corporate Family Rating of Ba1) and
changed the outlook on the company's ratings to negative from
stable.
Ratings affirmed:
* Corporate Family Rating -- Ba1
* Senior Unsecured Notes due 2012, $375 million -- Ba1
* Senior Unsecured Floating Rate Notes due 2010, $225 million
-- Ba1
* Senior Unsecured Notes, $260 million due 2023 and 2026 -- Ba1
* Senior Unsecured Notes, $10 million due 2006 -- Ba1
* Senior Unsecured Notes, $400 million due 2009 -- Ba1
As reported in the Troubled Company Reporter on July 7, 2005,
Standard & Poor's Ratings Services raised its ratings, including
the corporate credit rating to 'BB+' from 'BB-', on Chemtura Corp.
(fka Crompton Corp.). The ratings are removed from CreditWatch
with positive implications, where they were placed on March 9,
2005. S&P said the outlook is stable.
The rating actions follow Middlebury, Connecticut-based Chemtura's
recently completed acquisition of Great Lakes Chemical Corp. for
approximately $1.6 billion in common stock, plus the assumption of
debt. The upgrades reflect an immediate strengthening of
Chemtura's business mix and cash flow protection and debt leverage
measures as a result of the equity-financed acquisition of a much
higher-rated company.
CINCINNATI BELL: Buys Cingular's 19.9% Interest in Joint Venture
----------------------------------------------------------------
Cincinnati Bell Inc. received notice from New Cingular Wireless
PCS, LLC, that Cingular is exercising its put right pursuant to
Section 7.4(c) of the Operating Agreement of Cincinnati Bell
Wireless LLC to require the Company to purchase Cingular's 19.9%
membership interest in Cincinnati Bell Wireless.
Cincinnati Bell Wireless is a joint venture, 80.1% owned by the
Company. It provides wireless services in Cincinnati and Dayton,
Ohio.
Pursuant to the terms of the CBW Operating Agreement, the purchase
price for Cingular's 19.9% interest is $83 million plus interest
accreting daily after January 31, 2006, through the closing date
at an annual rate of 5% compounding monthly. Unless otherwise
agreed by the parties, the closing of this purchase is
February 13, 2006. The Company expects to fund the purchase
through operating cash flow and existing credit facilities.
Cincinnati Bell, Inc. (NYSE: CBB) -- http://cincinnatibell.com/--
is parent to one of the nation's most respected and best
performing local exchange and wireless providers with a legacy of
unparalleled customer service excellence. Cincinnati Bell
provides a wide range of telecommunications products and services
to residential and business customers in Ohio, Kentucky and
Indiana. Cincinnati Bell is headquartered in Cincinnati, Ohio.
As of Sept. 30, 2005, the Company's equity deficit widened to
$705.1 million from a $624.5 million deficit at Dec. 31, 2004.
CIT RV: S&P Junks Rating on Certificates After Review
-----------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class B notes and the certificates issued by CIT RV Trust 1998-A.
Concurrently, both ratings are removed from CreditWatch negative,
where they were placed Dec. 5, 2005.
The lowered rating on the certificates reflects the continued
dissipation of credit support. As of Nov. 30, 2005, the series
reserve account balance totaled $213,662, which is insufficient to
cover the 12-month average monthly net loss amount of $299,152.
Standard & Poor's expects that the reserve account will be fully
drawn within the next two payment dates and that excess spread
will be insufficient to cover net losses. At such time, the
certificates will stop receiving interest payments, given that
certificate interest is paid after senior principal in the
waterfall.
The lowered rating on the class B notes reflects revised
cumulative net loss assumptions, which are higher than previously
anticipated. The downgrade of class B also reflects the continued
decrease in credit enhancement. Despite having reached a pool
factor of 11.6%, the trust continues to realize losses at a steady
rate. The monthly net loss rate increased to more than 11% in
each of the past two months, after exhibiting a 12-month average
monthly net loss rate of 7.3% as of Sept. 30, 2005.
The 'AAA' rating on the class A-5 notes remains unchanged and is
not affected by these downgrades.
Ratings Lowered And Off Creditwatch Negative
CIT RV Trust 1998-A
Rating
Class To From
----- -- ----
B BB+ A/Watch Neg
Certs CCC- B-/Watch Neg
Other Outstanding Rating
CIT RV Trust 1998-A
Class Rating
----- ------
A-5 AAA
COLLINS & AIKMAN: Textron Wants Overdue Equipment Lease Rent Paid
-----------------------------------------------------------------
Textron Financial Corporation and Collins & Aikman Corporation and
its debtor-affiliates entered into an Equipment Lease, which
encompasses a significant portion of the equipment and machinery
used for the Debtors' trim business. William A. Sankbeil, Esq.,
at Kerr, Russell and Weber, PLC, in Detroit, Michigan, relates
that the Equipment is located in several of the Debtors' operating
plants. The transactions underlying the Equipment Lease involve
consideration exceeding several hundred million dollars, Mr.
Sankbeil says.
The Equipment Lease contains a basic three-year lease term
extending through 2004 as well as three additional one-year fixed
rate renewal periods. Mr. Sankbeil reports that the Debtors are
currently in the first of these three renewal periods and did not
timely exercise a second Renewal Period. Thus, the Equipment
Lease has now expired and the Debtors are required to pay
additional amounts to Textron under the Equipment Lease.
For calendar year 2005, monthly rental payments under the
Equipment Lease are due on the 18th day of each month. Since the
Petition Date, Mr. Sankbeil discloses that the Debtors made all
monthly lease payments due under the Equipment Lease through
September 2005. However, on October 24, 2005, the Debtors
notified Textron that they would not make the monthly rent due
on October 18, or any payments thereafter. According to Mr.
Sankbeil, the Debtors confirmed that they no longer intended to
make payments under the Equipment Lease because they believe that
the Equipment Lease is a "security interest" and not entitled to
the benefits of Section 365 of the Bankruptcy Code.
Although the burden is on the Debtors to prove that the Equipment
Lease is a financing, Mr. Sankbeil contends that the Equipment
Lease is an operating lease because none of the factors for
finding a security agreement under New York Uniform Commercial
Code 1-201(37)(i-iv) are present in the Equipment Lease.
Mr. Sankbeil relates that despite Textron's efforts to collect
the amounts owed under the Equipment Lease, the Debtors are
delinquent on its payments totaling $1,320,967, plus any late
payment fees and expenses that may apply. Payments under the
Equipment Lease continue to accrue.
Since the amounts due under the Equipment Lease arise
postpetition and the Court has not yet entered an order approving
the assumption or rejection of the Equipment Lease, the Debtors
are obligated to continue making all payments due to Textron, Mr.
Sankbeil notes.
Accordingly, Textron asks the Court to require the Debtors to
comply with their obligations under the Equipment Lease.
"The Debtors should not be permitted to continue to use the
Equipment under the Equipment Lease without fulfilling their
financial and other postpetition obligations to Textron," Mr.
Sankbeil says.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). When the Debtors filed for protection from their
creditors, they listed $3,196,700,000 in total assets and
$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000)
COLLINS & AIKMAN: Can Reject Three Contracts Effective Dec. 8
-------------------------------------------------------------
As reported in the Troubled Company Reporter on Dec. 5, 2005,
Collins & Aikman Corporation and its debtor-affiliates sought
authority from the U.S. Bankruptcy Court for the Eastern District
of Michigan to reject these leases and contracts:
Rejection
Counterparty Contract Effective Date
------------ -------- --------------
Waste Management Service Agreement December 8, 2005
Sansome Pacific, Lease at Roxboro, December 8, 2005
Roxboro, LLC North Carolina
TALX Corporation Employer Service December 8, 2005
Agreement
PAC-EDGE North Professional December 8, 2005
America, LLC Services Agreement
Project Advisors Management December 8, 2005
HK Limited Service Agreement
PAC-EDGE North Memorandum of December 8, 2005
America, LLC Understanding
PAC Edge & Project Advisors Respond
Richard E. Kruger, Esq., at Jaffe, Raitt, Heuer, & Weiss, P.C.,
in Southfield, Michigan, relates that PAC EDGE North America,
LLC, and Project Advisors HK Limited, executed three documents
with Collins and Aikman Products Co., pursuant to which they
provided professional services and management services to the
Debtor.
Specifically, PAC provides onsite engineers while HK provides
management personnel to oversee the engineers. Mr. Kruger
reports that the Personnel are currently working on a Ford Fusion
program and are still providing daily services during the program
launch, which is ongoing.
According to Mr. Kruger, it is not clear if the Debtors have
taken appropriate steps to replace the Personnel or completely
analyzed the potential problems if proper replacements are not in
place.
Neither PAC nor HK are aware of anyone being trained to replace
the Personnel. Moreover, the Debtor is prohibited from
soliciting or hiring any of the Personnel for a year after
termination of the Contract.
Furthermore, the Debtor transferred to PAC certain intellectual
property used by the Personnel in work performed for the Debtor.
Mr. Kruger notes that the Debtors are also not clear if the
Personnel would lose their ability to use the intellectual
property after the rejection.
* * *
The Court continues the hearing on the Debtors' request to
January 5, 2006, with respect to:
(a) the Professional Services Agreement with PAC-EDGE North
America, LLC, dated July 1, 2003;
(b) the Management Services Agreement with Project Advisors HK
Limited dated July 1, 2003; and
(c) the Memorandum of Understanding between Collins & Aikman
Products Co. and PAC-EDGE North America, LLC, dated
June 20, 2003.
The Court permits the Debtors to reject the remaining leases
effective as of December 8, 2005.
Sansome Pacific, Roxboro, LLC, reserves its right to seek payment
of any rent or other obligations due under the Rejected
Agreement.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). When the Debtors filed for protection from their
creditors, they listed $3,196,700,000 in total assets and
$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000)
COLLINS & AIKMAN: Wilhelm Karmann Wants Stay Lifted to Pursue Suit
------------------------------------------------------------------
Wilhelm Karmann GmbH asks the U.S. Bankruptcy Court for the
Eastern District of Michigan to lift the automatic stay so
it can pursue a patent infringement action in the United States
District Court for the Eastern District of Michigan against
Debtor Dura Convertible Systems, Inc.
James E. Deline, Esq., at Kerr, Russell and Weber, PLC, in
Detroit, Michigan, tells Judge Rhodes that Karmann is the
owner/assignee of U.S. Patent No. 5,207,474 for a Folding Top For
A Passenger Car With Folding Roof. The '474 Patent, issued on
May 4, 1993, grants Karmann the right to exclude others from
making, using or selling the invention covered in that Patent.
Karmann discovered that Dura may be infringing the '474 Patent by
manufacturing and selling a convertible top system to Ford for
use on the 2005 model year Ford Mustang that practiced the
invention covered in the '474 Patent.
Karmann's investigations revealed that the convertible top system
manufactured and sold by Dura infringes the '474 Patent. Dura's
patent infringement began prepetition and continues postpetition,
Mr. Deline says.
According to Mr. Deline, lifting the automatic stay would not
materially affect the administration of the Debtors' estate
because Dura is not entitled to violate Karmann's patent rights
with impunity. In addition, Mr. Deline points out that Dura is
attempting to sell its convertible top business, so lifting the
stay should have no impact on the Debtors' estate if the business
is sold.
Mr. Deline maintains that lifting the stay also would not create
any additional expense to the Debtors' estate because it would
merely have the effect of shifting the forum of the litigation
across the street to the United States District Court. To the
contrary, Mr. Deline notes, lifting the stay may reduce the
expense to the estate because Karmann may bring a District Court
action against the Debtor for postpetition infringement without
seeking to lift the automatic stay, thereby requiring the estate
to defend in two forums.
Karmann and its worldwide affiliates supply automotive
convertible systems, among other items, to original equipment
manufacturers like Ford. Karmann, through its affiliates,
maintains an office in Plymouth, Michigan.
Debtors Respond
Karmann has the heavy burden of showing that "cause" exists,
pursuant to Section 362(d) of the Bankruptcy Code, to lift the
automatic stay with respect to its proposed patent infringement
action. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New
York, asserts that Karmann has failed to meet this heavy burden
because it has not -- and cannot -- demonstrate that:
(1) lifting of the stay will not affect the administration of
the Debtors' estates;
(2) the balance of harms weighs in Karmann's favor; and
(3) the court where Karmann proposes to litigate has special
expertise in dealing with the issues in Karmann's patent
infringement action.
According to Mr. Schrock, policy reasons dictate that the
automatic stay remain intact to provide the proper "breathing
spell" to the Debtors.
Mr. Schrock points out that allowing Karmann's patent
infringement lawsuit to proceed will divert significant human and
financial resources, and disrupt the administration of the
Debtors' bankruptcy estates at this significant stage in the
Debtors' cases.
At this early stage of their cases, the Debtors must focus their
limited resources on developing a strategy for a successful
reorganization, without the significant distraction of defending
their interests in Karmann's proposed patent infringement action,
Mr. Schrock notes. The Debtors and their advisors have been
focused on activities that are critically important to their
reorganization. Lifting the automatic stay to permit Karmann to
proceed with its patent infringement action, Mr. Schrock argues,
would strip the Debtors of this desperately needed breathing
spell.
Accordingly, the Debtors ask the Court to deny Karmann's request
in its entirety.
The Official Committee of Unsecured Creditors agrees with the
Debtors' arguments.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). When the Debtors filed for protection from their
creditors, they listed $3,196,700,000 in total assets and
$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000)
CONTINENTAL AIRLINES: Contributing $50 Million to Pension Plans
---------------------------------------------------------------
Continental Airlines, Inc. (NYSE: CAL) has received $172 million
from the sale of approximately 9,000,000 shares of common stock in
the initial public offering of Copa Holdings, S.A., parent company
of Copa Airlines. The company still holds approximately
12,000,000 shares of common stock in Copa Holdings, S.A.
Pension Plan Contribution
The company is contributing $50 million of the proceeds to
Continental Airlines' pension plans. The contribution will bring
its 2005 pension contributions to $354 million.
"We remain committed to meeting our pension obligations," said
Continental Chairman and CEO Larry Kellner. "We are working hard
to keep our promises to employees, even in these difficult times."
Continental expects to end the year with an unrestricted cash and
short-term investments balance of between $1.9 and $2 billion.
Continental Airlines -- http://continental.com/-- is the world's
sixth-largest airline, serving 128 domestic and 111 international
destinations -- more than any other airline in the world -- and
serving nearly 200 additional points via codeshare partner
airlines. With 42,000 mainline employees, the airline has hubs
serving New York, Houston, Cleveland and Guam, and carries
approximately 51 million passengers per year. Fortune ranks
Continental one of the 100 Best Companies to Work For in America,
an honor it has earned for six consecutive years. Fortune also
ranks Continental as the top airline in its Most Admired Global
Companies in 2004.
* * *
As reported in the Troubled Company Reporter on Dec. 14, 2005,
Fitch Ratings has affirmed the 'CCC' issuer default rating of
Continental Airlines, Inc. (NYSE: CAL). Fitch has also affirmed
Continental's senior unsecured rating of 'CC', with a recovery
rating of 'RR6'. Continental's senior unsecured rating applies to
approximately $700 million of outstanding debt. Fitch said the
Rating Outlook for Continental remains Stable.
CREDIT SUISSE: S&P Lifts Low-B Ratings on Class H & J Certificates
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on nine
classes of Credit Suisse First Boston Mortgage Securities Corp.'s
commercial mortgage pass-through certificates from series
2002-CKN2.
At the same time, ratings are affirmed on 10 other classes from
the same transaction.
The raised and affirmed ratings reflect credit enhancement levels
that adequately support the ratings. The ratings also reflect the
stable performance of the transaction.
As of the remittance report dated Dec. 16, 2005, the collateral
pool consisted of 202 loans with an aggregate balance of
$868.7 million, compared with 204 loans with a balance of
$918.1 million at issuance. The collateral pool includes co-op
loans totaling $165.2 million, which are master serviced by
National Cooperative Bank. The master servicer for the non co-op
collateral is KeyBank Real Estate Capital. KeyBank provided
year-end 2004 and six- and nine-month interim 2005 net cash flow
debt service coverage figures for 100% of the non co-op pool,
including defeased loans. Standard & Poor's used this data,
excluding the defeased loans, to calculate a weighted average DSC
of 1.38x for the pool, compared with 1.47x at issuance. All of
the loans in the pool are current with the exception of one loan
that is 30-plus days delinquent. There are no loans with the
special servicer. To date, the trust has experienced losses
totaling $3.1 million.
The top 10 exposures in the pool have an aggregate outstanding
balance of $311 million, and none of the co-op loans are among the
top 10. The weighted average DSC for the top 10 loans is 1.29x,
down from 1.36x at issuance. The decrease is due to the decline
in NCF for several of the top 10 loans. The eighth-largest
exposure was a large contributor to the decline in NCF. This
exposure, along with one other top 10 loans, is on the watchlist.
Standard & Poor's reviewed property inspections provided by
KeyBank for all of the assets underlying the top 10 exposures, and
all were characterized as "good."
At issuance, the second-largest loan, which is secured by the
Beaver Valley Mall, and the fourth-largest loan, the 330 West 34th
Street loan, displayed credit characteristics consistent with
investment-grade obligations in the context of their inclusion in
the pool. Both loans have maintained credit characteristics
consistent with those at issuance.
KeyBank reported a watchlist of 25 loans with an aggregate
outstanding balance of $139.2 million. The Verandah loan is the
largest loan on the watchlist and is secured by a 440-unit
multifamily apartment complex built in 1982 and renovated in 2002.
The property is located in Miami, Florida. The loan was placed on
the watchlist due to damage resulting from Hurricane Wilma. The
borrower reported estimated damage of $1 million, which includes
landscaping, debris removal, and some roof damage. The adjuster
is working on the claim. Year-end 2004 DSC was 1.39x, and
occupancy was 94%.
WestCoast Grand Hotel at the Park and WestCoast Olympia Hotel are
cross-collateralized and cross-defaulted full-service lodging
properties located in Spokane, Washington, and Olympia Washington.
The loan was placed on the watchlist due to the low DSC reported
by WestCoast Olympia Hotel as a result of declining occupancy and
room revenue. The year-end 2004 DSC was 0.58x, and occupancy was
64%. The combined year-end 2004 DSC for both loans was 1.0x, with
WestCoast Grand Hotel reporting year-end DSC of 1.20x. The
combined DSC at issuance for these properties was 1.58x.
One loan in the pool is 30-plus days delinquent, but is not with
the special servicer. The Palm Villa Apartments loan is secured
by a 96-unit apartment complex in Edinburg, Texas, that was built
in 2001. According to the master servicer, the borrower intends
to remit November's payment within 10 days and bring the loan
current in January. As of the six months ended June 2005, DSC was
1.90x, and occupancy was 97%.
Standard & Poor's stressed the loans on the watchlist, along with
other loans with credit issues, as part of its pool analysis. One
loan is secured by a property in New Orleans that was damaged by
Hurricane Katrina. The insurance policies for and potential
damage to this property were considered in the pool analysis. The
resultant credit enhancement levels support the raised and
affirmed ratings.
Ratings Raised
Credit Suisse First Boston Mortgage Securities Corp.
Commercial Mortgage Pass-Through Certificates Series 2002-CKN2
Rating
Class To From Credit enhancement
----- -- ---- ------------------
B AAA AA 15.21%
C-1 AA+ A 11.78%
C-2 AA+ A 11.78%
D AA- A- 10.72%
E A BBB+ 9.40%
F BBB+ BBB 7.82%
G BBB BBB- 6.63%
H BBB- BB+ 5.31%
J BB+ BB 3.86%
Ratings Affirmed
Credit Suisse First Boston Mortgage Securities Corp.
Commercial Mortgage Pass-Through Certificates Series 2002-CKN2
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 19.17
A-2 AAA 19.17
A-3 AAA 19.17
K BB- 3.33
L B+ 2.81
M B 1.75
N B- 1.49
A-SP AAA N/A
A-X AAA N/A
A-Y AAA N/A
N/A - Not applicable.
DANA CREDIT: Parent Default Prompts S&P to Downgrade Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
rating on Dana Credit Corp. to 'B+' from 'BB', and its senior
unsecured debt rating on the company to 'B-' from 'BB'. The
ratings are placed on CreditWatch with negative implications
pending the filing of restated financial statements by Dana Corp.
"The downgrade reflects the downgrade of Dana Corp. on
Dec. 15, 2005, and the fact that a default by Dana Corp. would
trigger cross-default provisions contained in Dana Credit's debt,"
said Standard & Poor's credit analyst Rian M. Pressman, CFA.
Dana Credit Corp.'s unsecured debt is now rated two notches below
the counterparty credit rating. This reflects the debt's
subordinated position to the firm's bank debt, which is now
secured.
If Dana Corp. files its restated financial statements with the SEC
by Dec. 30, 2005, as required under the terms of its amended bank
credit facility, the ratings on Dana Credit will be affirmed and
removed from CreditWatch. Failure to file such statements by
Dec. 30 could result in termination of waivers on both the credit
facility and its accounts receivable securitization program, and
result in lenders pursuing remedies.
DELTA AIR: Creditors Committee Taps Houlihan as Financial Advisor
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Delta
Air Lines Inc., and its debtor-affiliates' chapter 11 proceedings
seeks the U.S. Bankruptcy Court for the Southern District of New
York's authority to retain Houlihan Lokey Howard & Zukin Capital
as its financial advisor, nunc pro tunc to September 29, 2005.
Jordan S. Weltman, chairperson of the Creditors Committee,
relates Houlihan is a nationally recognized firm that provides
investment banking and financial advisory services and execution
capabilities in a variety of areas including financial
restructuring. Houlihan is one of the leading investment bankers
and advisors to debtors, bondholder groups, secured and unsecured
creditors, acquirors, and other parties-in-interest involved in
financially distressed companies.
The Firm has served as financial advisor in some of the largest
and most complex restructuring matters in the United States,
including serving the debtors in the Chapter 11 cases of XO
Communications, Inc., McLeodUSA, Covad Communications, Inc.,
and the official creditors' committees in the cases of Enron
Corporation, WorldCom, Inc., and Winn-Dixie Stores, Inc.
As financial advisor, Houlihan will:
(a) analyze business plans and forecasts of the Debtors;
(b) evaluate the liabilities and operating assets of the
Debtors;
(c) assess the financial issues and options concerning the
sale of the Company and the Debtors' Chapter 11 plan of
reorganization or any other Chapter 11 plans;
(d) analyze and review the financial and operating statements
of the Debtors;
(e) provide specific valuation or other financial analyses as
the Committee may require in connection with the cases;
(f) analyze the Debtors' pension-related replacement or
termination issues;
(g) evaluate all aspects of the Debtors' exit financing;
(h) analyze any proposed Key Employee Retention Plan
programs;
(i) assist the Creditors Committee, as needed, in identifying
potential alternative sources of liquidity;
(j) represent the Committee in negotiations with the Debtors
and third parties;
(k) provide testimony in Court on the Committee's behalf, if
necessary.
Houlihan will be paid a $200,000 monthly fee and a $5,000,000
transaction fee. The Transaction Fee will be earned upon the
confirmation of a Chapter 11 plan or reorganization or
liquidation and will be paid on the effective date of the plan.
In addition, if requested by the Creditors Committee, after 24
months, Houlihan will credit up to 100% of its subsequent Monthly
Fees against the Transaction Fee. The Firm will also be
reimbursed of all reasonable out-of-pocket expenses.
John McKenna, Jr., managing director at Houlihan, assures the
Court that Houlihan does not represent any of the Debtors'
creditors or other parties to the case, or their attorneys or
accountants, in any matter adverse to the interests of any of the
Debtors. The Firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
Mr. McKenna discloses that Houlihan has been retained by an
informal committee of holders of secured aircraft certificates
including Enhanced Equipment Trust Certificates, Equipment Trust
Certificates, and private issues of Northwest Airlines
Corporation to be one of its advisors during the Chapter 11
restructuring of Northwest. The Informal Committee currently
includes a majority of seven of the non-guaranteed A Tranche
EETCs of Northwest.
While Houlihan does not believe that its representation of the
Informal Committee poses any actual, or potential conflict of
interest with its engagement by the Creditors Committee in the
Delta's Chapter 11 case, out of an abundance of caution, separate
teams of Houlihan professionals are working on these two
engagements, and Houlihan has established an "Ethical Wall"
between those professionals working on Delta Committee
engagement, and those working on behalf of the Informal
Committee.
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. As of June 30, 2005, the Company's balance
sheet showed $21.5 billion in assets and $28.5 billion in
liabilities. (Delta Air Lines Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
DELTA AIR: Retired Pilots Want Rule 2004 Examination on Carrier
---------------------------------------------------------------
Retired pilots James H. Gray, James Haigh, Reuben Black, William
Wirth, James Bomar, Ronald Stowe, Evan Gost, Richard Colby, and
Donald Mairose seek the U.S. Bankruptcy Court for the Southern
District of New York's authority to conduct an examination on
Delta Air Lines, Inc., under Rule 2004 of the Federal Rules of
Bankruptcy Procedure.
The retired Delta pilots want Delta to produce documents relating
to and designate representatives to testify:
(i) concerning the administration and operation of the Delta
retired pilot pension and retirement benefit plans,
(ii) the identities of the retired pilots receiving benefits
under the plans, and
(iii) the Debtors' financial condition.
The retired pilots receive pension and other retirement benefits
from the Debtor. The retired pilots hold claims in excess of
$500,000,000.
John A. Christy, Esq., at Schreeder, Wheeler & Flint, LLP, in
Atlanta, Georgia, asserts that the retired pilots are directly
affected by the Debtors' decision to:
-- cease payments of non-qualified pension benefits to
retired pilots and payments to their defined pension
plans; and
-- reject their collective bargaining agreement with their
active pilots.
A list of the documents the retired pilots demand from Delta is
available for free at http://bankrupt.com/misc/1421_docs_req.pdf
DP3 Backs Retirees' Request
DP3, Inc., doing business as Delta Pilots' Pension Preservation
Organization, and Dennis Smith support the request for Rule 2004
examination of Delta Air Lines, Inc., filed by certain retired
pilots of Delta.
Mr. Smith is a participant in the Delta Family Care Savings Plan
and plaintiff in a civil action against Delta pending before the
U.S. District Court for the Northern District of Georgia.
Michael S. Etkin, Esq., at Lowenstein Sandler PC, in New York,
relates that the ERISA Litigation was filed on behalf of all
participants in or beneficiaries of the Plan at any time between
September 29, 2000, and September 30, 2004, and whose accounts
included investments in Delta stock. The Plaintiffs allege
breaches of fiduciary dates in violation of ERISA involving the
Plan, a 401(k) plan established and sponsored by the Debtor as a
benefit for its employees. To the extent the testimony and
documents requested are relevant to the Plaintiffs' claims
against the Debtor, the Plaintiffs seek to attend and participate
in the examination of the representative and to review, inspect
and copy the documents produced by the Debtor.
Debtors Object
Benjamin S. Kaminetzky, Esq., at Davis Polk & Wardwell, in New
York, tells Judge Beatty that in view of (i) the Debtors'
expressed willingness to engage in an informal and efficient
informational process, (ii) the Retired Pilots' flat refusal to
participate in that process, (iii) their demonstrated preference
to file a barrage of overlapping and overly broad formal discovery
motions and notices, and (iv) their insistence on pursuing
unnecessary discovery under both Rule 2004 and the Federal Rules
of Civil Procedure simultaneously, the Pilots' request appears to
have been brought solely for purposes of abuse or harassment.
Where a party seeks a Rule 2004 examination for the impermissible
purpose of abuse or harassment, Mr. Kaminetzky contends that the
application may properly be denied.
Mr. Kaminetzky explains that the Retired Pilots have failed to
show good cause for the examination sought. Although the Pilots
suggest that the request is warranted because pension and
retirement benefits relate to the filing of proof of claim for
terminated benefits and the Debtors' ability to successfully
reorganize and that the information and testimony they seek is
directly related to the claims, the Debtors' financial condition
and certainly the administration of the estate, nowhere do the
Pilots suggest how the vast quantities of information and
testimony sought are in any way necessary to the establishment of
a claim.
Moreover, the scope of the documents and testimony sought by the
Retired Pilots extends far beyond the subject matter of pension
and retiree benefits, encompassing seven years worth of materials
produced by multiple internal departments of the Debtors as well
as many of their outside advisors and extending to the private,
personal data of other potential creditors. As a result, and in
view of the informal informational process otherwise available to
them, the Pilots have failed to demonstrate good cause for the
examination sought.
Even assuming the Retired Pilots could establish good cause for
the information and testimony sought, the request calls for
documents and testimony with respect to virtually every aspect of
the Debtors' operations, and gathering and supplying those
documents and testimony would divert substantial and critical
resources of the Debtors away from the vital effort of preserving
the Debtors estate for the benefit of all stakeholders, Mr.
Kaminetzky notes. The extraordinary burden that compliance with
the Pilots' Rule 2004 requests would entail outweighs any
possible good cause the Pilots arguably may have shown, and
warrants denial of the request, he argues.
Accordingly, the Debtors ask the Court to deny the request for
Rule 2004 Examination.
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. As of June 30, 2005, the Company's balance
sheet showed $21.5 billion in assets and $28.5 billion in
liabilities. (Delta Air Lines Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
DOE RUN: Bruce Neil Replaces Jeffrey L. Zelms as President & CEO
----------------------------------------------------------------
The Doe Run Resources Corporation (aka The Doe Run Company)
reported the planned succession of three of its top management
positions. Pursuant to that plan, Jeffrey L. Zelms, vice
chairman, president and chief executive officer, will retire as
president of The Doe Run Company effective January 1, 2006, and
will retire as vice chairman and CEO on April 1, 2006.
According to the company's succession plan, Bruce Neil, president
of Doe Run Peru, will succeed Mr. Zelms as president of The Doe
Run Company and will relocate to St. Louis. Upon Mr. Zelms'
retirement in April, Mr. Neil will assume the position of CEO.
Until that time, Mr. Neil will also continue to fulfill his role
as president of Doe Run Peru.
The company also reported the promotion of Dr. Juan Carlos Huyhua
to the post of general manager of its subsidiary, Doe Run Peru.
Dr. Huyhua, a Peruvian native, holds a Bachelor of Science degree
in chemical engineering from Universidad Nacional de San Augustin
de Arequipa, a master's degree in metallurgy and a Ph.D. in
metallurgy from the New Mexico Institute of Mining and Metallurgy.
He has served Doe Run Peru for eight years, as vice president and
manager of operations. The succession plan calls for Huyhua to
take over the role of president, Doe Run Peru, on April 1, 2006.
Marvin Kaiser, the company's chief administrative officer, is
retiring effective Feb. 1, 2006.
Mr. Zelms, who led The Doe Run Company for two decades, spent his
entire career in the mining and metallurgical industry. Mr. Zelms
received his mining engineering degree from the University of
Missouri at Rolla. He was also presented the professional degree
of engineer of mines by the University of Missouri at Rolla in
1987 and an Alumni Merit Award for his outstanding professional
and personal achievements in 1994. Prior to joining Doe Run, Mr.
Zelms served as vice president of St. Joe Minerals Corporation.
In addition to his work, Mr. Zelms serves on the board of
directors for the National Mining Association, the National Mining
Hall of Fame and Museum and Phoenix Textiles Corporation. He was
recognized by Mining World News as Man of the Year in 1993.
Credited with leading the company to a 400 percent increase in
sales and through record-low metal prices, financial
reorganization and record safety achievements, Mr. Zelms also
oversaw Doe Run's expansion to South America and the company's
foray into lead recycling in 1991.
"We are a company of people committed to making tomorrow better
than today, and we embrace our role as the preferred global
provider of lead and associated metals and services," Mr. Zelms
said. "I leave knowing the company has in place a leadership team
that recognizes our strengths, our challenges and our capacity for
continued growth."
Mr. Neil, who will succeed Mr. Zelms, is a Canadian national and
has served in the metals industry in three countries, most
recently in Peru. Mr. Neil joined The Doe Run Company in 1998,
serving as operations manager of the company's smelter in Glover,
Mo. Under his leadership, the Glover facility achieved the
National Ambient Air Quality Standard for lead for 28 consecutive
quarters (seven years). Mr. Neil was promoted to president, Doe
Run Peru, in 2003 and is currently responsible for all Peruvian
operations.
Before joining Doe Run, Mr. Neil held positions with ASARCO, where
he was involved in custom lead refining, and with Noranda and
Timminco smelters in Quebec, New Brunswick and Ontario, Canada.
The Doe Run Resources Corporation is one of the world's leading
providers of premium lead and associated metals and services.
At July 31, 2005, the Company's balance sheet showed $481,824,000
in total assets and a $178,981,000 stockholders' deficit.
DOMINION RESOURCES: S&P Pares Ratings on $39MM Class Certificates
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
synthetic securities related to Dominion Resources Inc. and its
related entities.
The downgrades reflect the lowering of the long-term corporate
credit and senior unsecured debt ratings on Dominion Resources
Inc. and its related entities on Dec. 19, 2005.
The ratings on the synthetic securities listed below are
weak-linked to the underlying collateral, Dominion Resources Inc.
debt.
A copy of the Dominion Resources Inc.-related research update,
"S&PCORRECT: Dominion Resources', Subs' Corporate Credit Ratings
Cut To 'BBB'; Outlook Stable," dated Dec. 19, 2005, is available
on RatingsDirect, Standard & Poor's Web-based credit analysis
system at http://www.ratingsdirect.com/
Ratings Lowered:
Dominion Resources Inc.-Related Ratings
STRATS Trust for Dominion Resources Inc. Series 2005-6
$25 Million STRATS Certificates
Rating
Class To From
----- -- ----
Certs BBB BBB+
STRATS Trust for Dominion Resources Inc. Series 2004-3
$25 Million Certificates
Rating
Class To From
----- -- ----
A-1 BBB BBB+
A-2 BBB BBB+
Dominion Resources Capital Trust I-Related Ratings
Corporate Backed Trust Certificates Series 2001-25
$39 Million Corporate Backed Trust Certificates
Rating
Class To From
----- -- ----
A-1 BB+ BBB-
A-2 BB+ BBB-
DRUGMAX INC: Selling Drug Distribution Business to Rochester Drug
-----------------------------------------------------------------
DrugMax, Inc., is selling selected assets related to its wholesale
pharmaceutical distribution business located in New Castle,
Pennsylvania, to Rochester Drug Cooperative.
Under the terms of the purchase agreement, Rochester Drug
Cooperative will acquire the Company's customer lists, fixtures
and equipment, and provide assistance in collection of customer
accounts receivables; the expected approximate value from all of
these assets is $5.6 million.
Additionally, Rochester Drug Cooperative will retain certain
employees and assume lease payments of approximately $200,000 per
year. As part of the overall transaction, inventory valued at
approximately $4.8 million will be allocated to the Familymeds
pharmacies and $3 million will be used to continue servicing the
ongoing physician specialty sales.
The total amount expected to be realized from this transaction
will be applied to our senior credit facility. The deal is
expected to close before year-end 2005.
The Company had previously announced its intention to exit the
lower margin wholesale drug distribution business associated with
the former DrugMax business model acquired as part of the fourth
quarter 2004 merger between DrugMax and Familymeds Group, Inc.
Accordingly, as of October 2005, the Company has categorized its
wholesale distribution business as "discontinued operations." The
sales from this legacy business, which primarily distributed
pharmaceuticals and over the counter products to other pharmacies,
were approximately $90 million annually. As previously reported,
the loss from operations of the discontinued business was
$7.4 million for the nine months ended Oct. 1, 2005, due to the
higher operating expense model of this business and its reduced
purchasing scale. Following the sale, the Company will
concentrate solely on its pharmacy business and specialty
pharmaceutical sales to physicians or related healthcare providers
located in facilities where it operates pharmacies.
Ed Mercadante, R.Ph., Co-Chairman and Chief Executive Officer of
DrugMax, said, "We are pleased to be selling our wholesale
distribution business to a company that has built a strong
reputation in the industry over the past 100 years. The sale of
the business to Rochester Drug Cooperative ensures that customers
will continue to receive a high level of service from an industry
leader."
Mr. Mercadante continued, "We believe the sale of our non-core
wholesale distribution business is a critical accomplishment,
enabling the Company to achieve significant objectives. Our
renewed and sharpened focus on our core pharmacy business
positions us to more fully benefit from the need for cost-
effective treatment of chronic and acute diseases and health
conditions. With 84 specialty pharmacies located at or near the
point of medical care, a growing Worksite Pharmacy(SM) business
and direct distribution into our related physician providers,
DrugMax is poised to take advantage of its integrated specialty
drug platform and capitalize on the industry's favorable
fundamentals. At the same time, our focus on the higher gross
margin core pharmacy business bodes well for the Company
increasing its market share in the specialty pharmacy area and
achieving sustained future profitability."
Mr. Mercadante concluded, "In just over 90 days, we have
effectively transformed the Company into a much stronger and more
focused operation with significant financial liquidity. As we
continue to execute our operational improvements aimed at enhanced
financial performance, we will actively seek opportunities to grow
market share of clinic and specialty pharmacies through
acquisitions while taking advantage of organic growth
opportunities in our worksite pharmacy business. We are excited
about our growth prospects and will take care to ensure that all
transactions are in the best long-term interests of the Company
and its shareholders."
DrugMax, Inc. -- http://www.drugmax.com/-- is a specialty
pharmacy and drug distribution provider formed by the merger on
November 12, 2004 of DrugMax, Inc. and Familymeds Group, Inc.
DrugMax works closely with doctors, patients, managed care
providers, medical centers and employers to improve patient
outcomes while delivering low cost and effective healthcare
solutions. The Company is focused on building an integrated
specialty drug distribution platform through its drug distribution
and specialty pharmacy operations. DrugMax operates two drug
distribution facilities, under the Valley Drug Company and Valley
Drug South names, and 77 specialty pharmacies in 13 states under
the Arrow Pharmacy & Nutrition Center and Familymeds Pharmacy
brand names.
* * *
Going Concern Doubt
Deloitte & Touche LLP issued an unqualified audit report with an
explanatory paragraph raising doubt about the Company's ability to
continue as a going concern after completing its review of
DrugMax' 2004 financials.
EXIDE TECH: Gets Court Nod to Enter Into GECC & US Equipment Pact
-----------------------------------------------------------------
Reorganized Exide Technologies, Inc., and its debtor-affiliates
asked the U.S. Bankruptcy Court for the Southern District of New
York's permission to enter into a settlement agreement resolving
an adversary proceeding and claims against General Electric
Capital Corporation and US Equipment Leasing, LLC.
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., in Wilmington, Delaware, relates that the
Debtors and US Equipment were parties to a master lease agreement
-- the Fleet Agreement -- dated May 19, 1994, under which US
Equipment leased to the Debtors equipment covered by Equipment
Schedule Nos. 31768-03 through and including 31768-11. The
initial term of the Fleet Agreement has expired.
The Debtors and GECC were also parties to:
(a) a master lease agreement dated November 1, 1996, under
which GECC leased to the Debtors equipment covered by
Equipment Schedules E-001 and E-002. The initial term of
the 1996 GE Agreement has expired; and
(b) a master equipment lease dated December 23, 1997, under
which GE Capital leased to the Debtors equipment covered
by Equipment Schedules Nos. T-1, T-2, SB-1, G-1A, G-2, and
G-3, G-2(BB), G-3(BB) and G-4(BB). The initial term of
Equipment Schedule Nos. G-2(BB), G-3(BB) and G-4(BB) has
expired. Equipment Schedule Nos. T-1, T-2, SB-1, G-1A,
G-2 and G-3 have yet to run past their initial term.
In March 2003, the Debtors filed Adversary Proceeding No.
03-51952 against various defendants, including GECC and US
Equipment, seeking a declaration that certain leases, including
the Fleet Agreement, the 1996 GE Agreement, and the 1997 GE
Agreement, are actually disguised financing agreements.
The GECC and US Equipment denied the allegation and affirmatively
asserted that the contracts were "true leases."
In April 2004, the Debtors filed Adversary Proceeding No.
04-53268 against US Equipment seeking to recover certain
prepetition payments made to US Equipment under Schedule Nos.
31768-07 through 31768-11 of the Fleet Agreement. The Preference
Litigation is currently pending before the Court.
The Reorganized Debtors, GECC, and US Equipment have reached a
consensual settlement regarding the Adversary Proceedings and the
claims and defenses set forth in the Proceedings.
The terms of the Settlement Agreement are:
(1) GECC and US Equipment will waive, release and withdraw,
with prejudice, all of their claims against the
Reorganized Debtors, subject to certain reservations;
(2) On the Closing Date, GECC and US Equipment will sell to
the Reorganized Debtors, free and clear, the equipment
then subject to the Fleet Agreement, the 1996 GE
Agreement, and, in the case of the equipment covered by
the 1997 GE Agreement, the 1997 Expired GE Agreement
Schedules for $1,455,351, plus all taxes, including, but
not limited to, personal property, sales, use or excise
taxes, if any, related to the Equipment, and all cost and
expenses associated with the purchase of the Equipment;
(3) The Reorganized Debtors will renew the 1997 GE Agreement,
solely as it relates to Equipment Schedule Nos. T-1, SB-1
and G-1A for an additional 2-year term, effective upon
expiration of the current term. The quarterly rent
payable during the renewal term will equal 73% of the
quarterly rent payable during the initial term and will be
payable quarterly, in arrears. At the end of each
quarterly period, commencing March 23, 2006, and provided
they are not in default, the Reorganized Debtors will have
the option to purchase all, but not less than all, of the
equipment covered by Equipment Schedule Nos. T-1, SB-1 and
G-1A;
(4) On the first month anniversary of the Closing Date, the
Reorganized Debtors will pay to GECC all accrued but
unpaid rent and other sums due with respect to Equipment
Schedules Nos. G-1A and T-2. As of November 16, 2005, the
amount due was $449,402;
(5) On the second month anniversary of the Closing Date, the
Reorganized Debtors will pay to GECC all accrued but
unpaid rent and other sums due with respect to Equipment
Schedule Nos. G-2 and G-3. As of November 16, 2005, the
amount due was $415,259;
(6) On the third month anniversary of the Closing Date, the
Reorganized Debtors will pay to GECC all accrued and
unpaid rent and other sums due with respect to the
Equipment Schedule Nos. T-1 and SB-1. As of Nov. 16,
2005, the amount due was $532,139;
(7) The Reorganized Debtors will have the option to purchase
from GECC certain equipment identified on a schedule
to the Settlement Agreement that is presently leased or
subleased to Daramic, Inc.;
(8) On the Closing Date, US Equipment will pay to the
Reorganized Debtors $372,217 in full and final settlement
of all claims arising out of the Preference Litigation.
US Equipment will waive any claim against the Reorganized
Debtors under Section 502(h) of the Bankruptcy Code
arising from the settlement of the Preference Litigation;
(9) GECC and US Equipment will waive any default or event of
default under the Fleet Agreement, the 1996 GE Agreement,
and the 1997 GE Agreement that occurred on or prior to the
Closing Date, including those relating in any way to the
Reorganized Debtors' Chapter 11 cases or the Joint Plan of
Reorganization. In addition, GECC and US Equipment will
waive, with prejudice, all accrued but unpaid late charges
due under each of the GE Agreements as of the Closing
Date, aggregating $335,000;
(10) All other terms of the Fleet Agreement, the 1996 GE
Agreement, and the 1997 GE Agreement that are not
inconsistent with the terms of the Settlement Agreement
will remain in full force;
(11) The Reorganized Debtors will voluntarily dismiss, with
prejudice, the Adversary Proceedings as to GECC and US
Equipment; and
(12) The Settlement Agreement will not be construed as an
admission or concession by any party of the truth of any
allegation or the validity of any claim asserted in the
Adversary Proceedings, and all allegations are expressly
denied. Specifically, but without limitation, nothing in
the Settlement Agreement will be deemed an admission that
the Fleet Agreement, the 1996 GE Agreement, and the 1997
GE Agreement are, or are not, financing agreements that
create a security interest, or that they are, or are not,
"true leases."
A full-text of the Settlement Agreement is available for free at:
http://bankrupt.com/misc/ge_settlement_agreement.pdf
The Settlement Agreement "is expected to be accretive to the
Reorganized Debtors' fiscal year 2006 EBITDA by approximately
$1.2 million, and by approximately $4.9 million in fiscal year
2007," Ms. Jones says.
The terms of the Settlement Agreement will also avoid the
potential dilutive effect of a Section 502(h) claim that would
otherwise arise upon a settlement of the Preference Litigation,
thereby benefiting unsecured creditors as a whole.
* * *
Judge Carey authorizes the Debtors to enter into the Settlement
Agreement with GECC and US Equipment.
Headquartered in Princeton, New Jersey, Exide Technologies --
http://www.exide.com/-- is the worldwide leading manufacturer and
distributor of lead acid batteries and other related electrical
energy storage products. The Company filed for chapter 11
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, represent the Debtors in their restructuring efforts.
Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On
April 14, 2002, the Debtors listed $2,073,238,000 in assets and
$2,524,448,000 in debts.
* * *
As reported in the Troubled Company Reporter on July 8, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Exide Technologies to 'CCC+' from 'B-', and removed the
rating from CreditWatch with negative implications, where it was
placed on May 17, 2005.
"The rating action reflects Exide's weak earnings and cash flow,
which have resulted in very high debt leverage, thin liquidity,
and poor credit statistics," said Standard & Poor's credit analyst
Martin King. Lawrenceville, New Jersey-based Exide, a
manufacturer of automotive and industrial batteries, has total
debt of about $740 million, and underfunded post-employment
benefit liabilities of $380 million.
EXIDE TECH: Discloses Expectations for Third Quarter FY 2006
------------------------------------------------------------
Exide Technologies (NASDAQ: XIDE) disclosed its expectations for
the third quarter of fiscal year 2006 ending Dec. 31, 2005.
Current indications are that the Company will fall short of
meeting the results from the same quarter a year ago primarily due
to lower Transportation sales in Europe and the most recent spike
in lead prices. The quarter-over-quarter comparison is also
negatively impacted by insurance proceeds in the prior-year
quarter related to property damage in one of the Company's German
facilities as well as the unfavorable impact of foreign exchange
in the current quarter of approximately $2 million.
The Company still expects to comply with its bank covenants as
calculated through the third quarter of fiscal 2006.
The Company also disclosed that it provided a progress report on
its Take Charge! initiative during a meeting with employees on
Monday.
The Company has been working with Proudfoot Consulting since
September to implement the Take Charge! initiative, which is
designed to empower teams of employees to identify opportunities
to eliminate wasteful practices, reduce variability and cut costs
in all aspects of the business. This initiative -- which to date
is being implemented in three North American smelters, four
manufacturing plants in North America and Europe, and one
corporate administrative function - "is intended to accelerate
and build on the momentum of our successful EXCELL lean program,"
said Exide President and CEO Gordon A. Ulsh.
The Take Charge! initiative was launched following an
assessment of the business, which identified a number of quick
payback projects that would require minimal capital investment.
"I have told our employees that I can think of no other
initiative that has as great an opportunity to deliver rapid
improvements to our business and have the potential for a
significant impact on our bottom line," Mr. Ulsh said. "As
liquidity allows, we will continue to invest in this initiative,
which we believe after reviewing a Proudfoot Consulting analysis
could ultimately result in a cost savings of as much as $100
million on an annual basis if fully and successfully implemented.
While we cannot guarantee such cost savings, we are excited about
the potential of Take Charge! and the early progress that we have
seen."
During the first few months of the initiative, Exide's
manufacturing plants in Bristol, Tennessee, and Salina, Kansas,
have experienced improved battery production and reduced scrap
and downtime. Similarly, the Company's smelters in Vernon,
California, and Frisco, Texas, have increased their weekly lead
production and reduced the percentage of impurities that must be
removed from lead during the recycling process.
Headquartered in Princeton, New Jersey, Exide Technologies --
http://www.exide.com/-- is the worldwide leading manufacturer and
distributor of lead acid batteries and other related electrical
energy storage products. The Company filed for chapter 11
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, represent the Debtors in their restructuring efforts.
Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On
April 14, 2002, the Debtors listed $2,073,238,000 in assets and
$2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 78;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on July 8, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Exide Technologies to 'CCC+' from 'B-', and removed the
rating from CreditWatch with negative implications, where it was
placed on May 17, 2005.
"The rating action reflects Exide's weak earnings and cash flow,
which have resulted in very high debt leverage, thin liquidity,
and poor credit statistics," said Standard & Poor's credit analyst
Martin King. Lawrenceville, New Jersey-based Exide, a
manufacturer of automotive and industrial batteries, has total
debt of about $740 million, and underfunded post-employment
benefit liabilities of $380 million.
EXIDE TECH: Board of Directors Forms Ad Hoc Finance Committee
-------------------------------------------------------------
Exide Technologies, Inc., President and Chief Executive Officer
Gordon A. Ulsh discloses to the Securities Exchange Commission
that the Company's Board of Directors created an ad-hoc Finance
Committee to assist in evaluating alternative financing for the
Exide's current Senior Credit Facility and to address other
financially related matters as they arise from time to time.
Carroll Wetzel, a current member of the Audit and Nominating &
Corporate Governance committees, will lead the Ad-Hoc Finance
Committee. Michael Ressner, chair of the Audit Committee, and
Michael D'Appolonia, chair of the Compensation Committee, will
also serve on the Ad-Hoc Finance Committee.
The Ad-Hoc Finance Committee Chair will receive a quarterly
retainer of $2,500, while committee members will be compensated
for attendance at meetings consistent with the Board's
compensation schedule for other committee meetings.
Headquartered in Princeton, New Jersey, Exide Technologies --
http://www.exide.com/-- is the worldwide leading manufacturer and
distributor of lead acid batteries and other related electrical
energy storage products. The Company filed for chapter 11
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, represent the Debtors in their restructuring efforts.
Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On
April 14, 2002, the Debtors listed $2,073,238,000 in assets and
$2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 78;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on July 8, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Exide Technologies to 'CCC+' from 'B-', and removed the
rating from CreditWatch with negative implications, where it was
placed on May 17, 2005.
"The rating action reflects Exide's weak earnings and cash flow,
which have resulted in very high debt leverage, thin liquidity,
and poor credit statistics," said Standard & Poor's credit analyst
Martin King. Lawrenceville, New Jersey-based Exide, a
manufacturer of automotive and industrial batteries, has total
debt of about $740 million, and underfunded post-employment
benefit liabilities of $380 million.
FLORSHEIM GROUP: Files 2nd Amended Disclosure Statement & Plan
--------------------------------------------------------------
Florsheim Group, Inc., and its debtor-affiliates filed their
Second Amended Disclosure Statement and a Second Amended Joint
Plan of Liquidation with the U.S. Bankruptcy Court for the
Northern District of Illinois on Dec. 13, 2005.
Summary of Amended Joint Plan
The Amended Plan will transfer all of Florsheim's remaining
assets to a liquidating trust to be established for the benefit of
all creditors. The provisions of the Creditors' Trust and the
Plan will be implemented by Richard M. Fogel, the Plan Trustee and
Disbursing Agent to be appointed under the Plan.
The Plan will be funded by the orderly liquidation of all
remaining property of the Debtors' estates. Distributions of
proceeds from the Creditors' Trust will start on or after the
effective date of the Plan.
Treatment of Claims and Interests
A) Non-tax priority claims, with allowed claims estimated at less
than $100,000, will be paid in full on or after effective date
of the Plan.
B) Secured claims, totaling approximately $1,750,000, at
Florsheim's sole election will either retain their legal,
equitable and contractual rights, or receive the collateral
securing those claims, or be paid with the liquidation proceeds
of the collateral securing those claims, less Florsheim's costs
of liquidation including professional fees and expenses.
C) Unsecured claims, totaling approximately $40 million, will
receive their pro rata share of the $750,000 carve-out provided
by BT Commercial Corp., the agent for the Debtors' secured
lenders. The unsecured claims' pro rata share of the carve-out
will include accrued interest through the distribution date, in
addition to all liquidating funds not needed to pay
unclassified claims, non-tax priority claims and secured
claims, if any.
D) Untimely filed claims, consisting of all creditor claims filed
after the July 22, 2002 general bar date and all governmental
unit claims filed after the August 28, 2002 bar date and claims
increased through any amendment after those bar dates but only
to the extent of that amendment, will not receive any
distributions under the Plan.
E) Equity interests in Florsheim will be administratively
dissolved and holders of those interests will not receive any
distributions under the Plan.
A full-text copy of the Amended Joint Plan is available for a fee
at http://www.researcharchives.com/bin/download?id=051226201212
Headquartered in Chicago, Illinois, Florsheim Group, Inc.,
marketed, designed, sourced and distributed products in the middle
to upper price range of the men's quality footwear market. The
Company filed for chapter 11 protection to facilitate the sale of
its U.S. wholesale business and 23 retail stores of its U.S.
assets to the Weyco Group, Inc., for $45.6 million in cash, which
the Court approved in May 2002. The Company and its affiliates
filed for chapter 11 protection on March 4, 2002 (Bankr. N.D. Ill.
Case No. 02-08209). Steven B Towbin, Esq., and Mark L Radtke,
Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC
represents the Debtors. When the Debtors filed protection from
their creditors, their listed total assets of $156,755,000 and
total debts of $159,692,000.
FLYI INC: Court Okays Jones Day as Bankruptcy Counsel
-----------------------------------------------------
As reported in the Troubled Company Reporter on Nov. 16, 2005,
FLYi, Inc., and its debtor-affiliates sought the U.S. Bankruptcy
Court for the District of Delaware's permission to employ Jones
Day as their bankruptcy counsel, nunc pro tunc to Oct. 28, 2005,
pursuant to an engagement letter dated Aug. 3, 2005.
The Debtors anticipate that Jones Day will render general legal
services as needed throughout the course of their Chapter 11
cases, including bankruptcy, corporate, employee benefits,
environmental, finance, intellectual property, labor and
employment, litigation, real estate, securities, and tax advice.
In particular, Jones Day will:
(a) advise the Debtors of their rights, powers, and duties in
continuing to operate and manage their businesses and
properties under Chapter 11;
(b) prepare on the Debtors' behalf all necessary and
appropriate applications, motions, draft orders, other
pleadings, notices, schedules, and other documents, and
review all financial and other reports to be filed in
the Debtors' Chapter 11 cases;
(c) advise the Debtors concerning, and preparing responses to,
applications, motions, other pleadings, notices, and other
papers that may be filed by other parties in the Debtors'
Chapter 11 cases;
(d) advise the Debtors with respect to, and assisting in the
negotiation and documentation of, financing agreements and
related transactions;
(e) review the nature and validity of any liens asserted
against the Debtors' property and advising the Debtors
concerning the enforceability of those liens;
(f) advise the Debtors regarding their ability to initiate
actions to collect and recover property for the benefit of
their estates;
(g) advise the Debtors in connection with the formulation,
negotiation, and promulgation of a plan or plans of
reorganization, and related transactional documents;
(h) advise and assist the Debtors in connection with any sales
and potential property dispositions;
(i) advise the Debtors concerning executory contract and
unexpired lease assumptions, assignments, and rejections,
and lease restructurings and recharacterizations;
(j) assist the Debtors in reviewing, estimating, and resolving
claims asserted against the Debtors' estates;
(k) commence and conduct litigation necessary and appropriate
to assert rights held by the Debtors, protect assets of
the Debtors' Chapter 11 estates, or otherwise further the
goal of completing the Debtors' successful reorganization;
(l) provide non-bankruptcy services for the Debtors to the
extent requested by the Debtors; and
(m) perform all other necessary and appropriate legal services
in connection with the Debtors' Chapter 11 cases for or on
behalf of the Debtors.
Jones Day will charge the Debtors in accordance with its ordinary
and customary hourly rates:
Professional Title Rate
------------ ----- ----
Paul D. Leake, Esq. Partner $725
John R. Cornell, Esq. Partner $725
Erica M. Ryland, Esq. Partner $630
Brad B. Erens, Esq. Partner $605
Jane Rue Wittstein, Esq. Partner $560
Thomas E. Gillespie, Esq. Partner $550
Troy B. Lewis, Esq. Partner $525
Richard F. Shaw, Esq. Partner $425
Scott J. Friedman, Esq. Associate $430
Helena C. Huang, Esq. Associate $380
Jill S. Vorobiev, Esq. Associate $375
Robbin S. Rahman, Esq. Associate $315
Ross S. Barr, Esq. Associate $260
Mark H. Robinson, Esq. Associate $195
Denise M. Sciabarassi Paralegal $205
Steven Westberg, FLYi, Inc.'s vice president for restructuring,
relates that Jones Day assisted with the Debtors' pre-Chapter 11
restructuring efforts, including the restructuring efforts in
2004 and early 2005, and the preparations to commence the Chapter
11 cases. The Debtors have provided Jones Day with various
retainer funds for services to be rendered and for reimbursement
of expenses. The Retainer was replenished from time to time to
$500,000.
On Oct. 20, 2005, pursuant to the terms of the Engagement
Letter, the Retainer was increased to $750,000.
Mr. Leake attests that Jones Day is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code
and as required by Section 327(a) of the Bankruptcy Code.
* * *
The Court approves the Debtors' application. Judge Walrath
authorizes Jones Day to:
a. complete its reconciliation of prepetition fees and
expenses actually incurred through the Petition Date; and
b. make corresponding adjustments to the amount and
application of the firm's Retainer.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. As of Sept. 30, 2005, the Debtors listed
assets totaling $378,500,000 and debts totaling $455,400,000.
(FLYi Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FLYI INC: Hires Ford & Harrison as Special Labor Counsel
--------------------------------------------------------
FLYi, Inc., and its debtor-affiliates sought and obtained
authority from the U.S. Bankruptcy Court for the District of
Delaware to employ Ford & Harrison LLP as their special labor and
employment counsel, nunc pro tunc to November 8, 2005.
According to the Debtors, they need Ford & Harrison to guide them
with respect to issues concerning labor relations and employment-
related matters.
Steven S. Westberg, FLYi Inc.'s vice president for restructuring,
notes that Ford & Harrison is intimately familiar with the
complex legal issues that have arisen and are likely to arise in
connection with the Debtors' labor and employment issues. To
hire a substitute counsel to replace Ford & Harrison's unique
role at this juncture would be extremely harmful to the Debtors
and their estates, Mr. Westberg states.
Pursuant to an Engagement Letter dated December 16, 2004, Ford &
Harrison will provide:
(a) analysis, advice and assistance in developing labor
relations strategy, including the negotiations of
restructured collective bargaining agreements;
(b) analysis of labor and employment issues, including advice
and assistance in the administration of the collective
bargaining agreements and the preparation of responses to
disputes under the current collective bargaining
agreements, including various grievances;
(c) representation at labor arbitrations related to the
resolution of disputes under the collective bargaining
agreements;
(d) day-to-day advice and analysis on employment matters,
including compliance with all relevant federal, state and
local laws and regulations governing the employment of
employees; and
(e) other labor and employment-related services, as requested
by the Debtors and agreed to by Ford & Harrison.
The Debtors will pay Ford & Harrison in accordance with its
ordinary and customary hourly rates, as well as reimburse actual,
necessary expenses.
Thomas J. Kassin, a member of Ford & Harrison and head of the
firm's airline practice group, informs the Court that the firm's
current rates as of January 1, 2005, are:
Title Hourly Rate
----- -----------
Partners $300 - $360
Consultant Jerry A. Glass $350
Associates $195 - $295
Paralegals $115 - $165
Professional Analysts $195 - $205
Mr. Kassin notes that the firm may, during the pendency of the
Debtors' cases, change these rates in the ordinary course of
business.
The Ford & Harrison attorneys who will be working on the
engagement and their hourly rates include:
Professional Position Hourly Rate
------------ -------- -----------
Marc J. Esposito, Esq. Partner $310
Patricia G. Griffith, Esq. Partner $325
Thomas J. Kassin, Esq. Partner $330
Sarah B. Pierce, Esq. Partner $275
Norman A. Quandt, Esq. Partner $325
Jay Summer, Esq. Partner $300
Lilia U. Bell, Esq. Associate $260
Margaret F. Holman, Esq. Associate $260
Ellen C. Ham, Esq. Associate $260
Donald N. Lee, Esq. Associate $250
Geetha Nadiminti, Esq. Associate $195
Additional attorneys, paralegals, and other professionals will be
staffed to work on the representation as necessary.
The Debtors have provided Ford & Harrison with a $100,000 advance
payment for services rendered or to be rendered and for
reimbursement of expenses. Ford & Harrison will continue to
apply the Advance Payment to fees and expenses incurred after the
date of application until it is exhausted.
Mr. Kassin attests that Ford & Harrison has no disqualifying
connections with any of the parties-in-interest in the case or
conflicts with the parties-in-interest under Section 327(e) of
the Bankruptcy Code or applicable standards of professional
conduct that would preclude the firm's representation of the
Debtors.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. As of Sept. 30, 2005, the Debtors listed
assets totaling $378,500,000 and debts totaling $455,400,000.
(FLYi Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FLYI INC: Brings-In Young Conaway as Local Counsel
--------------------------------------------------
FLYi, Inc., and its debtor-affiliates sought and obtained
authority from the U.S. Bankruptcy Court for the District of
Delaware to employ Young Conaway Stargatt & Taylor, LLP, as their
local counsel, nunc pro tunc to Oct. 28, 2005.
Young Conaway is expected to:
a. provide legal advice to the Debtors' powers and duties
as debtors-in-possession in the continued operation of
their business and management of their properties;
b. prepare and pursue confirmation of one or more plans and
approval of corresponding disclosure statements;
c. prepare, on the Debtors' behalf, necessary applications,
motions, answers, orders, reports and other legal papers;
d. appear in Court and protect the Debtors' interests before
the Court; and
e. perform all other legal services for the Debtors, which may
be necessary and proper in the Debtors' bankruptcy
proceedings.
The current hourly rates of the Young Conaway professionals
designated to represent the Debtors are:
Professional Rate
----------------- ----
Brendan Linehan Shannon, Esq. $460
M. Blake Cleary, Esq. $385
Matthew B. Lunn, Esq. $290
Ian S. Fredericks, Esq. $225
Debbie E. Laskin, Paralegal $175
FLYi, Inc.'s Vice President for Restructuring, Steven Westberg,
relates that Young Conaway will be employed under a general
security retainer.
Young Conaway was engaged on Oct. 21, 2005, and has
represented the Debtors in connection with their restructuring
efforts. Young Conaway received a $150,000 retainer in
connection with the planning and preparation of initial documents
and its proposed postpetition representation of the Debtors.
Young Conaway has become familiar with the Debtors' businesses
and affairs and many of the potential legal issues that may arise
in the Debtors' Chapter 11 cases, Mr. Westberg says.
According to Mr. Cleary, Young Conaway is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. As of Sept. 30, 2005, the Debtors listed
assets totaling $378,500,000 and debts totaling $455,400,000.
(FLYi Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
GENTEK INC: Prepays $3 Million More on First Lien Term Loan
-----------------------------------------------------------
GenTek Inc. (NASDAQ: GETI) has prepaid an additional $3 million of
its first lien term loan bringing cumulative prepayments of its
term debt over the past five months to $12 million.
"We continue our commitment to improve operating cash flow, reduce
debt levels and drive value for our shareholders," said William E.
Redmond, Jr., President and CEO of GenTek Inc. "The $12 million
in prepayments made since August will result in annual interest
savings of approximately $0.9 million."
GenTek Inc. -- http://www.gentek-global.com/-- provides specialty
inorganic chemical products and services for treating water and
wastewater, petroleum refining, and the manufacture of personal-
care products, valve-train systems and components for automotive
engines and wire harnesses for large home appliance and automotive
suppliers. GenTek operates over 60 manufacturing facilities and
technical centers and has approximately 6,900 employees.
* * *
As reported in the Troubled Company Reporter on Feb. 24, 2005,
Moody's Investors Service assigned the following new ratings
to GenTek Inc., a diversified industrial company. The rating
outlook is stable. The ratings and outlook are subject to review
of the final documentation of the financing transaction.
The new ratings assigned are:
* B2 for the $60 million senior secured revolving credit
facility, due 2010,
* B2 for the $235 million senior secured term loan B, due 2011,
* Caa1 for the $135 million second-lien term loan, due 2012,
* B2 senior implied rating, and
* Caa2 issuer rating.
GMAC COMMERCIAL: S&P's Rating on Class O Certs. Tumbles to D
------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on six
classes of GMAC Commercial Mortgage Securities Inc.'s commercial
mortgage pass-through certificates from series 2001-C1.
At the same time, ratings on four classes from this transaction
are lowered, including class O, which is downgraded to 'D' from
'CCC-'. Additionally the ratings on seven others are affirmed.
The raised and affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios.
The rating on class O is set to 'D' following a $1.6 million
principal loss to the class in November 2005. The other lowered
ratings reflect anticipated losses from the assets secured by
loans with the special servicer as well as credit enhancement
degradation due to cumulative pool losses of $14.5 million to
date.
As of the remittance report dated Dec. 15, 2005, the collateral
pool consisted of 97 loans with an aggregate principal balance of
$764.7 million, down from 101 loans totaling $864.1 at issuance.
The master servicer, GMAC Commercial Mortgage Corp., provided
year-end 2004 and interim 2005 net cash flow debt service coverage
figures for 95% of the non-defeased pool. Defeased loans
represent $64.8 million of the overall pool. Based on this
information, Standard & Poor's calculated a weighted
average DSC of 1.23x, down from 1.32x at issuance. The trust has
experienced four losses totaling $14.5 million. Two loans in the
pool are delinquent and are the only loans with the special
servicer, also GMACCM. One of the two loans with the special
servicer has an appraisal reduction amount in effect for $440,415.
The top 10 loans have an aggregate outstanding balance of
$274.9 million. The weighted average DSC for the top 10 loans is
1.23x, compared to 1.27x at issuance. While the performance of
the collateral supporting three of the top 10 loans has improved
significantly, substantial declines in performance of the
collateral supporting four other loans in the top 10 loans has
also occurred. Additionally, six of the top 10 loans are on
GMACCM's watchlist. Also, another top 10 loan has a DSC below
1.10x. Standard & Poor's reviewed property inspections for all of
the collateral properties securing the top 10 loans and all were
characterized as "good."
The Sandhurst Apartments in Charlotte, North Carolina, is a
162-unit multifamily property built in 1967 that secures a
$3.3-million loan. This loan is more than 90 days delinquent and
is one of the two loans with the special servicer. It was
transferred to the special in July 2005 for monetary default.
Since the transfer, the borrower has only made one payment. As of
Nov. 30, 2005, occupancy was 72%, and the borrower states that the
property is generating negative cash flow for the 11-month period.
An appraisal for $2.3 million was received in September 2005 and
the special servicer is moving forward with foreclosure on the
collateral.
The Finley Terrace Apartments in Irving, Texas, is a 142-unit
multifamily property built in 1968. The property is REO, and the
associated $3.1 million loan is the other loan with the special
servicer. As of Feb. 28, 2005, the DSC was 0.97x; as of
Nov. 27, 2005, occupancy was 89%. The property is listed for sale
at $3.5 million and an ARA of $440,415 is in effect on the loan
based upon an appraisal from February 2005.
The master servicer reported a relatively large watchlist of 37
loans with an aggregate outstanding balance of $336.9 million,
which reflects the weak performance of several collateral
properties in the pool. Included on the watchlist are the
second-, fourth-, sixth, seventh-, eighth-, and 10th-largest
loans.
Also, the fifth-largest loan reported a year-end 2004 DSC that was
below 1.10x. The second-, eighth-, and 10th-largest loans are all
secured by multifamily properties in the western U.S. that are
experiencing soft occupancy and consequential declines in their
respective DSCs. For year-end 2004, the respective DSCs were
0.98x, 1.19x, and 0.96x, while the respective occupancies were
97%, 89%, and 88%.
The fourth-largest loan is secured by the Long Island Industrial
portfolio, which includes 10 properties with 873,562 aggregate sq.
ft. Following a drop in occupancy to 89% as of Dec. 31, 2004, the
DSC for the loan fell to 0.96x as of June 30, 2005. Upcoming
lease roll in 2006 is approximately 18% of the total space.
The sixth-largest loan is secured by the Premier Centre in
Mandeville, Lousiana, which is on the north shore of Lake
Pontchartrain. The 250,351-sq.-ft. retail property was added to
the watchlist following Hurricane Katrina. As of Sept. 22, 2005,
the borrower reported debris on the property and only minor damage
to the collateral building's roof flashing. The borrower also
noted all of the tenants were open albeit on limited hours.
The Laurel Office Building, a 211,812-sq.-ft. office building in
the Detroit suburb of Livonia, Michigan, secures the
seventh-largest loan in the pool. The loan was added to the
watchlist due to a decline in DSC associated with decreased
occupancy at the collateral property. As of June 30, 2005,
occupancy was 94% and DSC for the six-month period was 1.06x.
While not on the watchlist, the fifth-largest loan reported a DSC
of 0.98x for year-end 2004 after reporting a DSC of 1.01x for
year-end 2003. The 195,983-sq.-ft. Southdale Office Building in
the Minneapolis suburb of Edina, Minnesota, secures the loan.
Although the loan is not on GMACCM's watchlist, its ongoing weak
performance does represent a potential credit issue.
Standard & Poor's stressed the loans on the watchlist, along with
other loans with credit issues, as part of its pool analysis. The
resultant credit enhancement levels support the raised, affirmed,
and lowered ratings.
Ratings Raised
GMAC Commercial Mortgage Securities Inc.
Mortgage Pass-Through Certs Series 2001-C1
Rating
Class To From Credit enhancement
----- -- ---- ------------------
B AAA AA 19.85%
C AA A 15.61%
D A A- 13.92%
E A- BBB+ 11.66%
F BBB+ BBB 9.96%
G BBB BBB- 8.27%
Ratings Lowered
GMAC Commercial Mortgage Securities Inc.
Mortgage Pass-Through Certs Series 2001-C1
Rating
Class To From Credit enhancement
----- -- ---- ------------------
L B- B 1.49%
M CCC+ B- 0.92%
N CCC- CCC+ 0.36%
O D CCC- 0.00%
Ratings Affirmed
GMAC Commercial Mortgage Securities Inc.
Mortgage Pass-Through Certs Series 2001-C1
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 25.22%
A-2 AAA 25.22%
H BB 4.88%
J BB- 4.03%
K B+ 3.18%
X-1 AAA N/A
X-2 AAA N/A
N/A - Not applicable.
HERTZ CORP: S&P Downgrades Ratings on Two Synthetic Securities
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
synthetic securities related to Hertz Corp. and its related
entities.
At the same time, the ratings are removed them from CreditWatch,
where they were placed with negative implications Sept. 22, 2005.
The downgrades reflect the lowering of the long-term corporate
credit and senior unsecured debt ratings on Hertz and its related
entities on Dec. 22, 2005, and their subsequent removal from
CreditWatch negative.
The ratings on the synthetic securities listed below are
weak-linked to the underlying collateral, Hertz Corp. debt.
Ratings Lowered, Off Creditwatch Negative
SATURNS Trust No. 2003-8
$25 Million Hertz Corp.
Debenture-Backed Callable Units and Interest-Only Units
Rating
Class To From
----- -- ----
A BB- BBB-/Watch Neg
B BB- BBB-/Watch Neg
SATURNS Trust No. 2003-15
$25 Million 7.00% Class A Callable Units
Notional Amount 0.851% Class B Interest-Only Callable Units
Rating
Class To From
----- -- ----
A BB- BBB-/Watch Neg
B BB- BBB-/Watch Neg
IMPAC SECURED: S&P Shaves Rating on Class B 2002-3 Certs. to BB
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on 15
classes from 11 Impac Secured Assets Corp. transactions. At the
same time, the rating on class B from series 2002-3 is lowered,
and the rating on class B-2 from series 2003-2 is placed on
CreditWatch with negative implications. Additionally, the ratings
on 91 classes from 17 Impac Secured Assets Corp. transactions are
affirmed.
The upgrades reflect:
* increased credit support percentages that are at least
1.92x the loss coverage levels associated with the higher
ratings;
* very low cumulative losses; current pool balances that are
less than 50% of their original size; and
* seasoning of more than two-and-one-half years.
Credit support is expected to remain sufficient for the higher
ratings, as the delinquency and loss triggers are preventing the
credit support from stepping down.
The lowered rating on class B from series 2002-3 reflects:
* realized losses during the most recent six months that have
exceeded excess interest cash flow by an average of at
least 4.8x;
* cumulative realized losses totaling $1,410,360, half of
which were incurred during the most recent 12 months,
thereby reducing credit support;
* serious delinquencies of 8.42%;
* only $441,792 in overcollateralization remaining, which is
$324,664 less than the overcollateralization target amount;
and
* a potential principal write-down to class B within the next
10 months.
The placement of the rating on class B-2 from series 2003-2 on
CreditWatch negative reflects:
* cumulative realized losses of $559,628, which have reduced
the amount of credit support for the class to only
$209,220; and
* over $1 million in severely delinquent loans, with
potential principal write-downs to class B-2.
Standard & Poor's will continue to closely monitor the performance
of this transaction. If losses are considerably below S&P's
projections, the rating will likely be affirmed. If the
delinquent loans translate into losses that are in line with our
projections, the rating on class B-2 is likely to be lowered to
'CCC' from 'B'.
The affirmations reflect stable credit support percentages, as
well as good delinquency and loss performance.
As of the November 2005 distribution date, cumulative realized
losses for these transactions ranged from 0.01% to 1.63%, and
severe delinquencies ranged from 0.78% to 10.94%.
Credit support is provided by a senior/subordinate structure for
series 2000-3, 2001-8, 2002-2, and 2003-2, and through a
combination of subordination, excess spread, and
overcollateralization for the remaining transactions. The pools
were initially composed of fixed- and adjustable-rate mortgage
loans secured by first and second liens on residential properties.
Ratings Raised
Impac Secured Assets Corp.
Mortgage Pass-Through Certificates
Rating
Series Class To From
------ ----- -- ----
2001-2 M-1 AAA AA+
2001-3 M-2 AA AA-
2001-4 M-2 AAA AA
2001-5 M-2 AA A+
2001-6 M-1 AAA AA+
2001-7 M-1 AAA AA+
2001-8 M-1 AAA AA+
2001-8 M-2 AA- A
2002-1 M-1 AAA AA
2002-2 M-1 AAA AA
2002-2 M-2 AA A
2002-2 M-3 BBB+ BBB
2002-3 M-1 AAA AA
2003-1 M-1 AA+ AA
2003-1 M-2 A+ A
Rating Lowered
Impac Secured Assets Corp.
Mortgage Pass-Through Certificates
Rating
Series Class To From
------ ----- -- ----
2002-3 B BB BBB
Rating Placed On Creditwatch Negative
Impac Secured Assets Corp.
Mortgage Pass-Through Certificates
Rating
Series Class To From
------ ----- -- ----
2003-2 B-2 B/Watch Neg B
Ratings Affirmed
Impac Secured Assets Corp.
Mortgage Pass-Through Certificates
Series Class Rating
------ ----- ------
2000-3 A-10,A-11,A-12,A-14 AAA
2001-2 A-5 AAA
2001-2 M-2 A
2001-2 B BBB
2001-3 A-1,M-1 AAA
2001-3 B BBB
2001-4 A-I-5,A-II-3,M-1 AAA
2001-4 B BBB
2001-5 A-I-5,A-II,M-1 AAA
2001-5 B BBB
2001-6 A-I-5,A-IO,A-II AAA
2001-6 M-2 A
2001-6 B BB
2001-7 A-I-4,A-II AAA
2001-7 M-2 A
2001-7 B BBB
2001-8 A-6,A-7,A-IO,A-PO AAA
2001-8 M-3 BBB
2002-1 A-I-5,A-I-6,A-II AAA
2002-1 M-2 A
2002-1 B BBB
2002-2 A-2,A-3,A-IO,A-PO AAA
2002-2 B-1 BB
2002-2 B-2 B
2002-3 A-4 AAA
2002-3 M-2 A
2003-1 A-1 AAA
2003-1 B BBB+
2003-2 A-1,A-2,A-3,A-4,A-IO,A-PO AAA
2003-2 M-1 AA
2003-2 M-2 A+
2003-2 M-3 BBB+
2003-2 B-1 BB
2003-3 A-1,A-IO AAA
2003-3 M-1 AA
2003-3 M-2 A
2003-3 B BBB
2004-1 A-3,A-4,A-5,A-6,A-IO AAA
2004-1 M-1 AA
2004-1 M-2 A
2004-1 M-3 BBB
2004-2 A-2,A-3,A-4,A-5,A-6 AAA
2004-2 M-1 AA
2004-2 M-2 A
2004-2 M-3 BBB
2004-3 1-A-1, 1-A-2, 1-A-3, 1-A-4,1-A-5 AAA
2004-3 2-A-1,2-A-2 AAA
2004-3 M-1,M-2,M-3 AA+
2004-3 M-4,M-5 AA
2004-3 B A+
INDYMAC INDX: S&P Affirms Low-B Ratings on 48 Certificate Classes
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on 305
classes of mortgage-backed certificates from 24 transactions
issued by IndyMac INDX Mortgage Loan Trust.
The affirmations are based on credit support percentages that are
sufficient to maintain the current ratings. The predominant form
of credit support protecting the certificates from losses is
subordination, with the exception of series 2004-AR9, which has
additional support from overcollateralization and excess interest.
As of the November 2005 remittance data, 90-plus day delinquencies
range from 0.46% to 5.57%. None of the transactions have
experienced any losses.
The underlying collateral for these transactions consist mostly of
five loan groups of one- to four-family, conventional, first-lien,
adjustable- or fixed-rate, fully amortizing, residential mortgage
loans.
Ratings Affirmed
IndyMac INDX Mortgage Loan Trust
Mortgage-Backed Certificates
Series Class Rating
------ ----- ------
2004-AR1 1-A-1,2-A-1,A-X-1,A-X-2 AAA
2004-AR1 A-R AAA
2004-AR1 B-1 AA
2004-AR1 B-2 A
2004-AR1 B-3 BBB
2004-AR1 B-4 BB
2004-AR1 B-5 B
2004-AR2 1-A-1,2-A-1,A-X-1,A-X-2 AAA
2004-AR2 A-R AAA
2004-AR2 B-1 AA
2004-AR2 B-2 A
2004-AR2 B-3 BBB
2004-AR2 B-4 BB
2004-AR2 B-5 B
2004-AR3 A-1,A-X-1,A-X-2,A-R,P AAA
2004-AR3 B-1 AA
2004-AR3 B-2 A
2004-AR3 B-3 BBB
2004-AR3 B-4 BB
2004-AR3 B-5 B
2004-AR4 1-A,2-A,3-A,A-R AAA
2004-AR4 B-1 AA
2004-AR4 B-2 A
2004-AR4 B-3 BBB
2004-AR4 B-4 BB
2004-AR4 B-5 B
2004-AR5 1-A-1,2-A-1A,2-A-1B AAA
2004-AR5 2-A-2,A-X-1,A-X-2,A-R AAA
2004-AR5 B-1 AA
2004-AR5 B-2 A
2004-AR5 B-3 BBB
2004-AR5 B-4 BB
2004-AR5 B-5 B
2004-AR6 1-A,2-A,3-A-1,3-A-2 AAA
2004-AR6 3-A-3,4-A,5-A-1,5-A-2 AAA
2004-AR6 6-A-1,6-A-2,A-R AAA
2004-AR6 B-1 AA
2004-AR6 B-2 A
2004-AR6 B-3 BBB
2004-AR6 B-4 BB
2004-AR6 B-5 B
2004-AR7 A-1,A-2,A-3,A-4,A-5,A-X AAA
2004-AR7 A-R AAA
2004-AR7 B-1 AA
2004-AR7 B-2 A
2004-AR7 B-3 BBB
2004-AR7 B-4 BB
2004-AR7 B-5 B
2004-AR8 1-A-1,2-A-1,2-A-2A, AAA
2004-AR8 2-A-2B,A-X-1,A-X-2,A-R AAA
2004-AR8 B-1 AA
2004-AR8 B-2 A
2004-AR8 B-3 BBB
2004-AR8 B-4 BB
2004-AR8 B-5 B
2004-AR9 1-A,2-A,3-A,4-A,5-A-1 AAA
2004-AR9 5-A-2,5-A-3,A-R AAA
2004-AR9 B-1 AA+
2004-AR9 B-2 A+
2004-AR9 B-3 BBB+
2004-AR9 B-4 BB
2004-AR9 B-5 B
2004-AR9 5-M-1 AA
2004-AR9 5-M-2 A
2004-AR9 5-M-3,5-M-4,5-M-5 BBB+
2004-AR10 1-A-1,2-A-1,2-A-2A AAA
2004-AR10 2-A-2B,A-X-1,A-X-2,A-R AAA
2004-AR10 B-1 AA
2004-AR10 B-2 A
2004-AR10 B-3 BBB
2004-AR10 B-4 BB
2004-AR10 B-5 B
2004-AR11 1-A,1-X,2-A,2-X,A-R AAA
2004-AR11 B-1 AA
2004-AR11 B-2 A
2004-AR11 B-3 BBB
2004-AR11 B-4 BB
2004-AR11 B-5 B
2004-AR12 A-1,A-2,A-X-1,A-X-2,A-R AAA
2004-AR12 B-1 AA
2004-AR12 B-2 A
2004-AR12 B-3 BBB
2004-AR12 B-4 BB
2004-AR12 B-5 B
2004-AR13 1-A-1,2-A-1,2-A-2,2-A-3 AAA
2004-AR13 A-R,X AAA
2004-AR13 B-1 AA
2004-AR13 B-2 A
2004-AR13 B-3 BBB
2004-AR13 B-4 BB
2004-AR13 B-5 B
2004-AR14 1-A-1A,1-A-1B,2-A-1A AAA
2004-AR14 2-A-1B,2-A-2A,2-A-2B AAA
2004-AR14 A-X-1,A-X-2,A-R AAA
2004-AR14 B-1 AA
2004-AR14 B-2 A
2004-AR14 B-3 BBB
2004-AR14 B-4 BB
2004-AR14 B-5 B
2004-AR15 1-A-1,2-A-1,3-A-1,4-A-1 AAA
2004-AR15 4-A-2,5-A-1,5-A-2,6-A-1 AAA
2004-AR15 A-R AAA
2004-AR15 B-1 AA
2004-AR15 B-2 A
2004-AR15 B-3 BBB
2004-AR15 B-4 BB
2004-AR15 B-5 B
2005-AR1 1-A-1,1-A-2,2-A-1,3-A-1 AAA
2005-AR1 3-A-2,4-A-1,A-R AAA
2005-AR1 B-1 AA
2005-AR1 B-2 A
2005-AR1 B-3 BBB
2005-AR1 B-4 BB
2005-AR1 B-5 B
2005-AR2 1-A-1,2-A-1A,2-A-1B, AAA
2005-AR2 2-A-2A,2-A-2B,2-A-3 AAA
2005-AR2 2-A-4,A-X-1,A-X-2,A-R AAA
2005-AR2 B-1 AA
2005-AR2 B-2 A
2005-AR2 B-3 BBB
2005-AR2 B-4 BB
2005-AR2 B-5 B
2005-AR3 1-A-1,2-A-1,3-A-1,3-A-2 AAA
2005-AR3 3-X,4-A-1,4-A-2,5-A-1 AAA
2005-AR3 5-A-2,A-R AAA
2005-AR3 B-1 AA
2005-AR3 B-2 A
2005-AR3 B-3 BBB
2005-AR3 B-4 BB
2005-AR3 B-5 B
2005-AR4 1-A-1,2-A-1A,2-A-1B AAA
2005-AR4 2-A-2,A-X-1,A-X-2,A-R AAA
2005-AR4 B-1 AA
2005-AR4 B-2 A
2005-AR4 B-3 BBB
2005-AR4 B-4 BB
2005-AR4 B-5 B
2005-AR5 1-A-1,1-A-2,2-A-1,2-A-2 AAA
2005-AR5 2-A-3,3-A-1,4-A-1,A-R AAA
2005-AR5 B-1 AA
2005-AR5 B-2 A
2005-AR5 B-3 BBB
2005-AR5 B-4 BB
2005-AR5 B-5 B
2005-AR6 1-A-1,1-A-2,1-A-3,2-A-1 AAA
2005-AR6 2-A-2,A-X-1,A-X-2,A-R AAA
2005-AR6 B-1 AA+
2005-AR6 B-2 AA-
2005-AR6 B-3 BBB
2005-AR6 B-4 BB
2005-AR6 B-5 B
2005-AR7 1-A-1,2-A-1,3-A-1,3-A-2 AAA
2005-AR7 3-A-3,4-A-1,5-A-1,6-A-1 AAA
2005-AR7 7-A-1,A-R AAA
2005-AR7 B-1 AA+
2005-AR7 B-2 A+
2005-AR7 B-3 BBB+
2005-AR7 B-4 BB
2005-AR7 B-5 B
2005-AR8 1-A-1,2-A-1A,2-A-1B AAA
2005-AR8 2-A-2,A-X-1,A-X-2,A-PO AAA
2005-AR8 A-R AAA
2005-AR8 B-1 AA
2005-AR8 B-2 A
2005-AR8 B-3 BBB
2005-AR8 B-4 BBB-
2005-AR8 B-5 BB
2005-AR8 B-6 B
2005-AR10 A-1,A-2,A-3,A-X,A-R AAA
2005-AR10 B-1 AA+
2005-AR10 B-2 AA
2005-AR10 B-3 AA-
2005-AR10 B-4 A
2005-AR10 B-5 BBB+
2005-AR10 B-6 BBB
2005-AR10 B-7 BBB-
2005-AR10 B-8 BB
2005-AR10 B-9 B
JIM RICH: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Jim Rich Enterprises, Inc.
270 Main Street
Sugar Grove, Illinois 60554
Bankruptcy Case No.: 05-64170
Chapter 11 Petition Date: December 23, 2005
Court: Northern District of Illinois (Chicago)
Judge: Carol A. Doyle
Debtor's Counsel: Michael J. Davis, Esq.
Springer, Brown, Covey, Gaertner, & Davis
400 S. County Farm Road, Suite 330
Wheaton, IL 60187
Tel: (630) 510-0000 Ext. 29
Estimated Assets: $0 to $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Jerome A. Rich Security interest $2,085,034
7 S. 771 Dugan Road purchased from
Sugar Grove, IL 60554 Northern Trust,
Hinsdale. All fixed
assets of debtor.
GEC Consultants, Inc. $32,500
LLoyd M. Gordon
4606 Birchwood Ave.
Skokie, IL 60076
American Express Revolving Credit $29,437
P.O. 360002
Ft. Lauderdale, FL 33336-0002
American Express Revolving Credit $24,038
PO Box 360002
Ft. Lauderdale, FL 33336-0002
IDine $20,000
Rewards Network
2 N. Riverside Plaza
Ste. 950
Chicago, IL 60606
MBNA America Revolving Credit $19,954
P.O. Box 15137
Wilmington, DE 19886-5137
Northern Trust Miscellaneous $18,000
4 N. Washington St.
Hinsdale, IL 60521
American Express Revolving Credit $17,605
PO Box 360002
Ft. Lauderdale, FL 33336-0002
Chase Platinum Revolving Credit $15,973
PO Box 52064
Phoenix, AZ 85072-2064
Beacon News Advertising in $15,564
101 S. River St. Suburban Chicago
Aurora, IL 60506 Newspapers
US Food Service Food $12,990
1829 Solutions Center
Chicago, IL 606771008
Sysco Food $12,271
250 Wieboldt Dr.
Des Plaines, IL 60016
Tim Dwyer Lawyer $11,500
240 West River Drive
Saint Charles, IL 60174
The Plitt Co. Food $9,637
Dept. 201108
P.O. Box 5940
Carol Stream, IL 601975940
MBNA America Revolving Credit $9,616
P.O. Box 15137
Wilmington, DE 19886-5137
Discover Card Revolving Credit $8,299
P.O. Box 30395
Salt Lake City, UT 84130-0395
Aramark Uniform Services $7,740
PO Box 7177
Rockford, IL 61126-7177
Capital One Revolving Credit $7,127
PO Box 60000
Seattle, WA 98190-6000
VIP Miscellaneous $4,350
890 Tollgate Rd.
Elgin, IL 60123
Computer Accounting Miscellaneous $3,500
Larry Goldman
6306 N. Cicero Ave.
Chicago, IL 60646
KAISER ALUMINUM: Court Approves Fourth Old Republic Stipulation
---------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
December 2, 2005, Old Republic Insurance Company has issued new
workers' compensation, automobile liability and general liability
insurance coverage to Kaiser Aluminum Corporation and its debtor-
affiliates, which will be effective until October 14, 2006, and
has essentially the same terms and conditions as the policies Old
Republic issued through October 2005.
Old Republic did not require that any additional collateral be
posted in connection with the issuance of the New Policies but
required the Debtors to enter into another stipulation.
The principal terms of the parties' Fourth Stipulation are:
(a) Old Republic will be entitled to an unliquidated
administrative claim against the Debtors -- other than
Debtors Alpart Jamaica, Inc., Kaiser Jamaica Corporation,
Kaiser Alumina Australia Corporation, Kaiser Finance
Corporation and Kaiser Bauxite Company -- on account of
the possibility that the Debtors fail to make:
-- premium payments or pay any other amounts due with
respect to the Policies;
-- payments within the deductible layer of the Policies
with respect to claims covered by the Policies; or
-- payments to the third-party administrator that is
administering the covered claims;
(b) The administrative claims will (i) survive confirmation of
the applicable Debtors' plan or plans of reorganization,
(ii) not be liquidated or adjudicated by the U.S.
Bankruptcy Court for the District of Delaware, and
(iii) not be payable upon the effective date of the plan,
unless the confirmed plan or plans for the applicable
Debtors provides for a complete liquidation of the
Debtors, in which event Old Republic's administrative
claim against the applicable Debtors is to be estimated
or adjudicated by the Court, as appropriate, and paid when
allowed by the Court. In addition, in the event these
cases are converted to Chapter 7 cases, Old Republic's
administrative claim against the applicable Debtors is
to be estimated or adjudicated by the Court, as
appropriate, and paid when allowed by the Court;
(c) To the extent that Old Republic draws down on the
$9,644,219 Amended Letter of Credit pursuant to the terms
of the parties' Program Agreement, the Debtors will not
seek before October 14, 2009, to exercise their rights
under the Program Agreement, if any, to recover from Old
Republic any portion of the draws on the Amended Letter of
Credit, unless otherwise agreed to by the parties;
(d) If the Debtors do not make all required premium payments
or do not make all required deductible payments on account
of the claims covered by the Policies or fail to pay all
amounts owed to the TPA, Old Republic will be entitled,
but only after providing the Debtors, the Creditors'
Committee, the Asbestos Committee, the Retirees'
Committee, the Asbestos Representative and the Silica
Representative with no less than 20 business days' prior
written notice, to exercise its state law rights to cancel
the new policies; and
(e) The terms of the Fourth Stipulation will not prejudice any
rights of Old Republic to pursue other claims that might
arise under various workers' compensation, excess workers'
compensation, general liability and automobile insurance
policies that were issued prior to the parties' entry into
the Program Agreement against any of the Debtors other
than Kaiser Bauxite, Kaiser Jamaica, Alpart Jamaica,
Kaiser Finance and Kaiser Australia. Additionally, the
terms of the Fourth Stipulation will not prejudice any
rights of Old Republic to draw upon the Amended Letter of
Credit.
The Court approved the Fourth Stipulation.
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases. Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts. On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 85; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
KAISER ALUMINUM: Gets Court Nod for Potato Ridge Mine Agreements
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted
Kaiser Aluminum Corporation and its debtor-affiliates authority to
enter into:
-- a participation agreement with The Clean Streams
Foundation, Inc.; and
-- a postmining treatment trust consent order and agreement
with the Department of Environmental Protection of the
Commonwealth of Pennsylvania,
regarding postmining obligations in respect of the Potato Ridge
Mine near Ohiopyle, Pennsylvania.
As previously reported in the Troubled Company Reporter on
December 6, 2005, KACC owned the Potato Ridge Mine Land in Stewart
Township, in Fayette County, Pennsylvania, that includes a
reclaimed non-coal surface mine known as the Potato Ridge Mine.
KACC is also the owner of all equipment relating to the operation
of a postmining discharge collection and treatment system that was
constructed during the operation of, and currently exists at, the
Potato Ridge Mine.
The Existing Potato Ridge Mine Treatment System is comprised of
property known as the Township Road System, the Laurel Run Wetland
and the Laurel Run Water Treatment Plant. The Laurel Run Wetland
is located on land owned by Lois A. Alviar and Cesareo H. Alviar
and leased to KACC pursuant to a lease dated July 9, 1990.
Kaiser Refractories, an entity that was related to KACC but no
longer exists, operated the Potato Ridge Mine from 1959 to 1980.
Kaiser Refractories posted surety bonds totaling $223,400 for the
Potato Ridge Mine.
Upon the termination of mining operations, Kaiser Refractories
reclaimed the surface of the Potato Ridge Mine and continued to
operate the existing Potato Ridge Mine Treatment System to collect
and treat postmining discharges. Treated effluent from the
Existing Potato Ridge Mine Treatment System has been discharged to
a stream known as Laurel Run. The treatment is expected to
continue indefinitely.
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases. Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts. On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 85; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
KMART CORP: Audrey Lavigne Wants Stay Lifted to Pursue Lawsuit
--------------------------------------------------------------
On September 14, 1998, Audrey Lavigne commenced a lawsuit in the
Monroe County Supreme Court in New York against Kmart Corporation.
The pending action seeks to recover damages for permanent and
serious injuries, which Ms. Lavigne sustained at a Kmart store
when six mirrors fell from an overhead shelf onto her head.
Ms. Lavigne also asserted Claim No. 7729 in Kmart's Chapter 11
case in connection with her Lawsuit.
Accordingly, Ms. Lavigne asks the U.S. Bankruptcy Court for the
Northern District of Illinois to terminate the automatic stay to
allow her pending personal injury action to proceed.
Michelle Y. Cimino, Esq., at Chamberlain D'Amanda Oppenheimer &
Greenfield, in Rochester, New York, relates that through a letter
dated August 31, 2005, Kmart indicated that it does not intend to
oppose to Ms. Lavigne's request. However, Kmart had said that it
would not agree to a stipulation with the claimant.
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. 105; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LARGE SCALE: Halts Operations Due to Negative Liquidity
-------------------------------------------------------
Large Scale Biology Corporation (Nasdaq: LSBCD) ceased its
operations in the ordinary course effective Dec. 23, 2005, as a
result of a lack of cash and liquid assets.
The company notified all of its employees that it is not able to
continue to fund payroll and that, as a result, their employment
terminated on Friday, Dec. 23, 2005.
"Despite our efforts to generate revenue, obtain debt and equity
funding, and sell or license selected assets at reasonable prices,
our revenue and liquid assets are not sufficient to sustain our
current operations," said Kevin J. Ryan, President and Chief
Executive Officer of the Company. Added Mr. Ryan, "We are taking
steps to preserve our assets for the benefit of our creditors and
stockholders."
"Our ongoing discussions with potential acquirers and licensees,
for significant product collaborations and for partnering
initiatives have not ripened in time to provide cash for current
operations or to meet Nasdaq Capital Market continuing listing
requirements," said Ronald J. Artale, the Company's Chief
Operating Officer and Chief Financial Officer. "These discussions
continue, and the Company is actively exploring alternatives."
Nasdaq Delisting
Trading of Large Scale Biology Corporation's stock on the Nasdaq
Capital Market was halted pending this announcement. The Company
will not appeal the Nasdaq Stock Market's determination to delist
the Company's stock from the Nasdaq Capital Market at the opening
of business today, Dec. 27, 2005. Accordingly, the Company's
stock ceased trading on the Nasdaq Capital Market at the end of
the trading day on Dec. 23, 2005.
Large Scale Biology Corporation -- http://www.lsbc.com/-- is a
product-focused biotechnology company using proprietary
technologies to develop and manufacture recombinant biologics.
The Company's biomanufacturing opportunities include vaccines,
complex proteins and follow-on off-patent therapeutics. The
Company's proprietary systems are supported by patents and patent
applications. The Company's corporate offices, research and
development and its subsidiary company, Predictive Diagnostics,
Inc., are headquartered in Vacaville, California. The Company's
biomanufacturing operation is located in Owensboro, Kentucky.
* * *
Going Concern Doubt
The company's management believes that its history of negative
cash flows and cash balance of $85,000 at September 30, 2005,
raise substantial doubt about its ability to continue as a going
concern, absent any new sources of significant cash flows. In an
effort to mitigate this near-term concern, on October 24, 2005,
the company received $500,000 under a short-term secured loan. On
August 5, 2005, the company has secured $1,000,000 in short-term
debt financing and a private equity agreement, under which the
company may put to investors up to $15,000,000 of its common
stock.
As previously reported in the Troubled Company Reporter, Deloitte
& Touche LLP expressed substantial doubt about the company's
ability to continue as a going concern after it audited the
Company's Form 10-K for the fiscal year ended 2004 due to the
Company's history of negative cash flows and its current cash
balance.
LEVEL 3: Launching $1.23-Bil Exchange Offer Via Private Placement
-----------------------------------------------------------------
Level 3 Communications, Inc. (Nasdaq: LVLT) is commencing private
offers to exchange any and all of its:
-- 9-1/8% Senior Notes due 2008,
-- 11% Senior Notes due 2008, and
-- 10-1/2% Senior Discount Notes due 2008
in a private placement for cash and a maximum of $1,230,272,000
aggregate principal amount of its new 11.50% Senior Notes due
2010.
The exchange offers are being made only to qualified institutional
buyers and institutional accredited investors inside the United
States and to certain non-U.S. investors located outside the
United States.
Each exchange offer will expire at 11:59 p.m., New York City time,
on Jan. 10, 2006, unless extended. Eligible holders who validly
tender and do not withdraw their old notes on or prior to 5:00
p.m., New York City time, on Dec. 22, 2005, unless extended, will
also receive an early participation payment, as set forth below.
The cash and principal amount of new notes to be issued to
eligible holders for each $1,000 principal amount, or principal
amount at maturity, as applicable, of old notes accepted in
exchange as well as the cash payment that will be paid to eligible
holders who validly tender their old notes on or prior to the
early participation date is set forth in the table below.
Aggregate
Principal
Title of old notes Amount
to be Exchanged CUSIP Outstanding
9-1/8% Senior Notes due 2008 52729NAC4 $954,195,000
U52782AA4
52729NAA8
11% Senior Notes due 2008 52729NAK6 $132,495,000
10-1/2% Senior Discount
Notes due 2008(2) 52729NAE0 $143,582,000
Consideration per $1,000 principal
amount of old notes exchanged
Principal
Amount of Early
new notes Participation Total
Title of old notes to be Cash Cash Cash
to be exchanged Issued Payment Payment(1) payment(1)
9 1/8% Senior Notes due 2008 $1,000.00 $40.00 $25.00 $65.00
11% Senior Notes due 2008 $1,000.00 $70.00 $25.00 $95.00
10 1/2% Senior Discount
Notes due 2008(2) $1,000.00 $37.00 $25.00 $62.00
(1) Received only if old notes are tendered on or prior to the early
participation date.
(2) Fully accreted.
The purpose of these private exchange offers is to improve Level
3's financial flexibility by extending the maturities of its
overall indebtedness and reducing the amount of its outstanding
indebtedness with maturities in 2008, the first year in which its
outstanding senior unsecured indebtedness is due.
Tendered old notes may be validly withdrawn at any time prior to
5:00 p.m., New York City time, on Dec. 22, 2005. Notes tendered
after the withdrawal date for any exchange offer may not be
withdrawn unless Level 3 reduces the consideration being offered,
the early participation payment or the aggregate principal amount
of notes being sought in that exchange offer.
Each of the exchange offers is conditioned upon, among other
things, there being validly tendered and not withdrawn prior to
the expiration of the exchange offers at least $645.1 million
aggregate principal amount of old notes (representing
approximately 50% of the aggregate principal amount outstanding of
all of Level 3's notes with a 2008 maturity and approximately 52%
of the aggregate principal amount outstanding of the old notes).
Certain eligible holders holding approximately 42% of the
aggregate principal amount outstanding of old notes (representing
approximately 40% of the aggregate principal amount outstanding of
all of Level 3's notes with a 2008 maturity) have indicated their
intent to exchange their old notes in the exchange offers, subject
to the terms and conditions of the exchange offers.
The new notes have not been registered under the Securities Act of
1933, as amended, and may not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements. Level 3 will enter into a registration
rights agreement pursuant to which it will agree to file an
exchange offer registration statement with the Securities and
Exchange Commission with respect to the new notes.
The new notes will be senior unsecured obligations of Level 3,
ranking equal in right of payment with old notes not tendered in
the exchange offers. The new notes will mature on March 1, 2010,
and will bear interest at a rate per annum equal to 11.50%.
Interest on the new notes will be payable on March 1 and September
1 of each year, beginning on Sept. 1, 2006. Level 3 may redeem
some or all of the new notes at any time on or after March 1,
2009, at 100% of their principal amount plus accrued interest.
The other terms of the new notes will be the same in all material
respects as the terms of the 9-1/8% Senior Notes due 2008 of
Level 3, except that the new notes will not be registered under
the Securities Act or any state securities laws and will therefore
be subject to substantial restrictions on transfer.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any security and shall not
constitute an offer, solicitation or sale in any jurisdiction in
which such offering, solicitation or sale would be unlawful.
Level 3 Communications (Nasdaq: LVLT) -- http://www.Level3.com/--
is an international communications and information services
company. The company operates one of the largest Internet
backbones in the world, is one of the largest providers of
wholesale dial-up service to ISPs in North America and is the
primary provider of Internet connectivity for millions of
broadband subscribers, through its cable and DSL partners. The
company offers a wide range of communications services over its
23,000-mile broadband fiber optic network including Internet
Protocol (IP) services, broadband transport and infrastructure
services, colocation services, and patented softswitch managed
modem and voice services.
* * *
As reported in the Troubled Company Reporter on Dec. 14, 2005,
Standard & Poor's Ratings Services placed its 'CCC' corporate
credit rating and 'CC' ratings on debt maturing in 2008 of Level 3
Communications Inc. on CreditWatch with negative implications.
At the same time, the 'CC' ratings on all other unsecured debt
issues and the 'CCC' rating on the bank loan were also placed on
CreditWatch with positive implications. The actions follow the
company's announcement of an offer to exchange all of its
approximately $1.23 billion senior unsecured debt maturing in 2008
for a like amount of new senior unsecured debt due in 2010.
"We will view completion of the exchange offer for the 2008 issues
as tantamount to a default on original bond issue terms," said
Standard & Poor's credit analyst Eric Geil, "because the affected
bondholders need to choose between accepting a later maturity or
risking a potential payment default in 2008."
However, the transaction will modestly decrease financial pressure
on Level 3 by reducing the company's nearest term debt maturities,
benefiting the overall capital structure and other bondholders.
The CreditWatch positive placement on the non-2008 issues reflects
the favorable impact of the two-year maturity extension. The
exchange offer is conditioned on Level 3 receiving about 50% of
the aggregate principal amount of the existing 2008 notes and will
expire Jan. 10, 2006.
As reported in the Troubled Company Reporter on Nov. 10, 2005,
Fitch has affirmed the 'CCC' issuer default rating, along with
each individual issue rating assigned to Level 3 Communications,
Inc. and Level 3 Financing, Inc. Approximately $6 billion of debt
as of Sept. 30, 2005 is affected by this action.
As reported in the Troubled Company Reporter on Nov. 4, 2005,
Moody's Investors Service affirmed Level 3 Communications, Inc.'s
ratings and changed the outlook for all ratings to developing from
stable following the company's announcement that it is acquiring
WilTel Communications Group LLC for 115 million shares of Level 3
common stock plus $370 million of cash.
The transaction, which Moody's expects to be a delevering event
for Level 3, given that WilTel generates positive free cash flow,
should nominally decrease Level 3's pro forma leverage thereby
decreasing credit risk for Level 3 debt holders. Moody's will
consider the probability of achieving merger synergies, and the
potential for the company to reduce debt.
Moody's has affirmed these ratings:
Level 3:
* Corporate family rating -- Caa2
* Speculative Grade Liquidity Rating -- SGL-1
* $954 Million 9.125% Senior Notes due in 2008 -- Ca
* $132 Million 11% Sr. Notes due in 2008 -- Ca
* EUR50 Million 10.75% Senior Euro Notes due 2008 -- Ca
* $362 Million 6% Convertible Subordinated Notes due 2009 -- C
* $374 Million 2.875% Convertible Senior Notes due 2010 -- Ca
* EUR104 Million 11.25% Senior Euro Notes due 2010 -- Ca
* $96 Million 11.25% Senior Notes due 2010 -- Ca
* $514 Million 6% Convertible Subordinated Notes due 2010 -- C
* $345 Million 5.25% Convertible Senior Notes due 2011 -- Ca
Level 3 Financing, Inc.:
* $730 Million Term Loan due in 2011 -- B3
* $500 Million Senior Notes due in 2011 -- Caa1
Moody's has changed the outlook to developing from stable.
LEVITZ HOME: New Levitz Owners Set Policy on Customer Purchases
---------------------------------------------------------------
An affiliate of Prentice Capital Management LP, the new owner of
Levitz Home Furnishings, Inc., has established a policy for
purchases made by customers on or prior to their acquisition of
the company's assets on Dec. 16, 2005. Following that sale, a new
company with a new owner was created that uses the Levitz brand
name and that no longer operates under chapter 11 protection.
As reported in the Troubled Company Reporter on Dec. 20, 2005,
Levitz Home and its debtor-affiliates sought and obtained the U.S.
Bankruptcy Court for the Southern District of New York's authority
to sell substantially all of their assets to PLVTZ, LLC, an
affiliate of Prentice Capital, and The Pride Capital Group LLC,
doing business as Great American Group, pursuant to an asset
purchase agreement dated Nov. 30, 2005. The Court approved the
Asset Purchase Agreement.
A full-text copy of the Purchase Agreement is available at no
charge at:
http://bankrupt.com/misc/514_levitz_purch_accord.pdf
A full-text copy of the Court Order approving the Sale and the
Purchase Agreement is available at no charge at:
http://bankrupt.com/misc/lvtz_514_sale_ord.pdf
Before the Oct. 11, 2005, bankruptcy filing and the closing of the
sale on Dec. 16, 2005, Levitz collected partial and full deposits
from customers for future delivery of products. Although
operating under the same name, Levitz is now a new company, with a
new owner. Levitz' new owner has committed to filling these past
orders and satisfying customers who have shown brand loyalty.
As part of the policy announced Friday, Dec. 23, the new Levitz
will not be providing refunds to customers for deposits paid on or
prior to the Dec. 16, 2005 sale date. However, the new Levitz
will honor all these outstanding customer deposits by ordering and
delivering the original merchandise ordered, or permitting
customers to use their deposit as a store credit towards the
purchase of alternative merchandise.
"We are pleased to be able to offer this policy to the valued
customers of Levitz who paid the company prior to our acquisition
of the company's assets," said Jonathan Duskin, Managing Director
of Prentice Capital Management LP. "We are aware of the losses
that groups such as investors, suppliers and lenders have suffered
as a result of this restructuring, and are also aware of the great
loyalty customers have shown to the Levitz brand through these
difficult times. We are pleased to be in a position to provide
customers who placed deposits with the old company prior to the
Dec. 16, 2005, acquisition with those products they ordered as
those products become available from suppliers. To facilitate the
rapid flow of products to customers, the new Levitz recently
announced that it has entered into a new $55 million credit
facility with GE Commercial Finance effective upon closing of the
sale to Prentice Capital, and that Prentice has provided an
additional $50 million in funding to the Company.
About Prentice Capital Management LP
Prentice Capital Management LP is a New York-based money
management organization with over $1 billion under management,
primarily in the retail/consumer sector.
About Levitz Home
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts.
MAAX HOLDINGS: Weak Earnings Spur S&P to Junk Senior Debt Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Quebec-based, bathroom fixtures manufacturer MAAX
Holdings Inc. to 'B-' from 'B'.
At the same time, Standard & Poor's lowered the rating on the
company's senior discount notes to 'CCC'. In addition, the
ratings on subsidiary, MAAX Corp., including the secured bank
facility were lowered to 'B-' from 'B', and its senior
subordinated debt rating to 'CCC' from 'CCC+'. The outlook was
revised to negative.
"The ratings on MAAX were lowered because of weak earnings and
Standard & Poor's expectations that the company will continue to
face high raw material costs and a high Canadian dollar. MAAX is
facing difficult conditions with raw material costs having
increased substantially, such as resin and acrylic, and the
appreciation of the Canadian dollar also hurting margins," said
Standard & Poor's credit analyst Dan Parker. "The company's
efforts to cut costs and restructure operations should help
improve earnings, but the company has a very aggressive debt
load," Mr. Parker added.
The ratings on MAAX Holdings reflect the company's very aggressive
financial profile with high leverage, and the weak business
position with high customer concentration in the competitive
bathroom fixtures industry. These risks are partially offset by
the company's attractively positioned product mix and distribution
capability, and its ability to generate free cash flow.
The outlook is negative. The company will continue to be affected
by cost pressures, currency and tough competition in each of its
markets. The company's cash generation will need to improve in
order to satisfy the onerous debt load. The ratings could come
under further pressure if cash flow and earnings do not recover,
and the company is unable to pay down debt. On the other hand,
the business profile could support somewhat higher ratings if debt
leverage were lower.
MARYLAND ECONOMIC: Poor Performance Spurs Moody's to Pare Rating
----------------------------------------------------------------
Moody's Investors Service downgraded the rating to Ba2 from Baa3
on Maryland Economic Development Corporation's Senior Student
Housing Revenue Bonds (University of Maryland, Baltimore Project),
Series 2003A and placed the Ba2 rating on Watchlist for further
potential downgrade.
The downgrade reflects the poor performance of the project and the
expectation that it will perform below underwriting expectations
for the foreseeable future. The placement on Watchlist reflects
the uncertainty of a credit enhancement being provided by MEDCO in
an effort to forestall draws on debt service reserves in April and
October 2006. Moody's will closely monitor the performance of the
project and the status of the potential credit enhancement.
Moody's will make further comment as more information becomes
available and take rating action if warranted.
The project, known as University Suites at Fayette Square, is a
337-bed privatized student-housing complex located adjacent to
University of Maryland, Baltimore. The project, which opened on
August 1, 2004, is comprised of 287 beds in a 17-story tower and
50 beds in a nearby historic building. Lease-up was not as quick
as anticipated (65% occupancy in August 2004). Management
believed the less than expected occupancy rate was due to the
August opening of the project as most students presumably had
already made living arrangements for the school year.
After being open for a full twelve months, occupancy for the fall
semester 2005 did not meet expectations as evidenced by occupancy
of 70% in August and 71% in December. With revenues lower than
expected, MEDCO was unable to certify a budget for fiscal 2006
that would produce debt service coverage of 1.2x, which pursuant
to the indenture, requires the hiring of a management consultant.
The management consultant's report, dated September 30, 2005,
detailed a host of issues contributing to the lower than expected
occupancy, including a poor reputation among students due to the
original late opening, inconvenient location for a sizable number
of tenant parking spaces, over priced parking, a poor unit mix and
competition from other properties. The report noted that low
occupancies in the three and four bedroom units contributed to a
majority of the low overall occupancy as they account for
approximately 47% of the units. In December 2005, occupancy in
the three and four bedroom units was 55% and 58% respectively.
The issuer has recently developed several strategies to address
issues that contributed to low occupancy. Beginning in spring
semester 2006, the project will add eighty more parking spaces,
which are more conveniently located than many of the existing
spaces, and lowered parking fees by 29% to 42%. Rents on two,
three, four and seven bedroom units will be lowered starting in
spring semester 2006 by 2.7%, 10.8%, 17.4% and 9.0%, respectively.
The lowered rental rates will be available to new renters signing
twelve-month leases and existing tenants willing to add twelve
months to their existing lease. The issuer reports eighty-eight
existing tenants have indicated they will take advantage of the
lower rates and extend their leases. In the previous leasing
cycle, seventy-two tenants re-leased. Additionally, the issuer is
working to replace the current property manager with one that has
a national presence and a proven track record in managing student
housing.
The current low occupancy and the reduced rental rates have
resulted in lower revenues than expected. The 2006 budget
produces debt service coverage of 0.74x, when factoring in the
remaining capitalized interest. The 2007 forecast produces 1.02x
debt service, not including the deficit from 2006. The result is
projected shortfalls on principal and interest payment dates in
both fiscal years. Current projections indicate taps on reserves
will be necessary in April 2006 ($163,345) and October 2006
($275,492). In December 2005 debt service reserve is $2,553,863.
In an effort to forestall the use of debt service reserves, MEDCO
is taking steps to establish a credit enhancement for the bonds.
On December 19, 2005, MEDCO adopted a resolution stating they
would provide a credit enhancement in the form of a cash deposit,
letter of credit or line of credit in an amount of $300,000 based
on the simultaneous contribution of matching funds from surplus
cash flow or refinancing proceeds generated by other privatized
student housing projects owned by MEDCO for other University
System of Maryland institutions.
Moody's believes an appropriately structured credit enhancement
could potentially mitigate the near term financial risks facing
the project, but will need to be increased beyond the $600,000
proposed and will need to be created in the immediate term.
Additionally, Moody's believes that recently implemented pricing
and amenity changes, as well as new property management, will
likely improve occupancy rates over time. However, Moody's
anticipates the project will perform below underwritten
projections for the foreseeable future.
MATHON FUND: U.S. Trustee Appoints 5-Member Creditors Committee
---------------------------------------------------------------
The United States Trustee for Region 14 appointed five creditors
to serve on an Official Committee of Unsecured Creditors in Mathon
Fund, LLC's chapter 11 case:
1. Newman Family Trust
Jan Newman
245 East Hudson Lane
Elk Ridge, Utah 84651
Tel: (801) 368-9353
Fax: (801) 423-1879
2. Benimoto Funding
Ben & Christie Funk
4040 E. McLellan, #8
Mesa, Arizona 85205
Tel: (480) 654-2168
Fax: (480) 654-2168
3. Clair & Nancy Jenkins
6106 204th Drive Northeast
Redmond, Washington 98052
Tel: (425) 868-8296
Fax: (425) 868-2146
4. Ty D. Mattingly
22 West 620 South
Orem, Utah 84058
Tel: (801) 368-2000
Fax: (801) 765-1121
5. R. Phil & Janet Zobrist Family Trust
R. Phil Zobrist
2870 Quartz Canyon Drive
Henderson, Nevada 89052
Tel: (702) 496-0900
Fax: (702) 434-6784
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 Phoenix, Arizona, Mathon Fund, LLC, and its
debtor-affiliates filed for chapter 11 protection on Nov. 13, 2005
(Bankr. D. Ariz. Case Nos. 05-27993 through 05-27995). Michael W.
Carmel, Esq., represents the Debtors in their restructuring
efforts. When Mathon Fund, LLC, filed for protection from its
creditors, it listed assets totaling $16,851,721 and debts
totaling $79,259,996.
MCI INC: Gets Final State Nod From Washington on Verizon Merger
---------------------------------------------------------------
Verizon Communications Inc. and MCI Inc. successfully completed
all the state, federal and international approvals for the two
companies to be combined with the approval on Friday, Dec. 23, by
the Washington Utilities and Transportation Commission.
The final state approval sets the stage for Verizon to close on
its acquisition of MCI, as planned, early in January, after all
requirements in the merger agreement are met.
Since the transaction was announced in February, the two companies
had been seeking the approval of various regulatory agencies. The
companies have now received formal approval from 22 states and the
District of Columbia. Although additional formal approval was not
required from other states, many of them reviewed the transaction,
and either approved it or decided to take no further action.
"All the states that reviewed the combination of Verizon and MCI
found that it was in the public interest and that customers will
benefit," said Tom Tauke, Verizon executive vice president, public
affairs, policy and communications. "Verizon's acquisition of MCI
will ensure the continued presence of a national, full-service
company with the technology and financial strength to deliver the
broadband future and create economic growth for America. Verizon
believes this combination is a great deal for both companies. And
it's an even better deal for our customers."
Jim Lewis, MCI senior vice president of policy and planning, said,
"The Verizon-MCI combination will capitalize on the complementary
strengths of each company and benefit Washington businesses and
consumers by creating one of the world's leading providers of
communications services. [Fri]day's approval concludes the
regulatory review process, and we look forward to delivering the
benefits of this transaction to U.S. consumers and the enterprise
market as a combined company."
The Verizon-MCI combination, part of the continuing evolution of
the industry driven by customers and technology, will create one
of the world's leading providers of communications services. The
transaction will enable Verizon to better compete for and serve
large-business and government customers with a full range of
services, including wireless and sophisticated Internet protocol-
based services. It will benefit consumers and businesses by
creating a supplier with the financial strength to maintain and
improve MCI's extensive Internet backbone network.
About Verizon Communications
Verizon Communications Inc. (NYSE: VZ), a Dow 30 company, is a
leader in delivering broadband and other communication innovations
to wireline and wireless customers. Verizon operates
America's most reliable wireless network, serving 49.3 million
customers nationwide, and one of the nation's premier wireline
networks, serving home, business and wholesale customers in 28
states. Based in New York, Verizon has a diverse workforce of
nearly 215,000 and generates annual revenues of more than $71
billion from four business segments: Domestic Telecom, Domestic
Wireless, Information Services and International. For more
information, visit http://www.verizon.com/
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on
October 31, 2003, and on April 20, 2004, the company formally
emerged from U.S. Chapter 11 protection as MCI, Inc.
* * *
As reported in the Troubled Company Reporter on Dec. 23, 2005,
Moody's Investors Service downgraded the long- and short-term debt
ratings of Verizon Communications Inc. to A3 and Prime-2, from A2
and Prime-1, respectively, reflecting the likely pressure on cash
flows arising from the company's plan to upgrade its local
wireline network with fiber-to-the-premises (FTTP or FiOS) over
the next several years.
Moody's has also lowered the ratings of the individual wireline
operating companies to reflect expected pressure on their
operating and financial profiles from competition, combined with
the costs of the network upgrade. Moody's upgraded MCI's long-
term debt ratings to Ba3 from B2 based on expected synergy
benefits resulting from its acquisition by Verizon, as well as
Verizon's likely willingness to financially support MCI, should it
be required.
These actions resolve the reviews, initiated on February 14, 2005
when Verizon announced its plan to acquire MCI for about $8.9
billion in cash, stock and assumed debt. The outlooks for the
ratings of VZ and its wireline operating companies are stable.
Ratings downgraded are:
Verizon Global Funding Corp.:
-- issuer rating to A3 from A2
-- short-term debt rating to Prime-2 from Prime-1
Verizon Network Funding:
-- short-term to Prime-2 from Prime-1
NYNEX Corporation:
-- senior unsecured to A3 from A2
GTE Corporation:
-- senior unsecured to Baa1 from A3
Verizon New York, Inc.:
-- notes and debentures to Baa3 from Baa2
Verizon New England, Inc.:
-- notes and debentures to Baa1 from A3, except the $480M of
Series B debentures, due 2042, which are downgraded to A3
from A2 based on unconditional and irrevocable guarantee
from Verizon Communications
Verizon Delaware, Inc.:
-- debentures to A3 from Aa3
Verizon West Virginia, Inc.:
-- debentures to A3 from Aa3
Verizon New Jersey, Inc.:
-- debentures to A3 from A1
Verizon Pennsylvania, Inc.:
-- debentures to A3 from A1
Verizon Maryland, Inc.:
-- debentures to A3 from A1
Verizon North, Inc.:
-- debentures to A3 from A1
Verizon Northwest, Inc.:
-- debentures to A3 from A1
Verizon California, Inc.:
-- debentures to A3 from A1
Verizon Virginia, Inc.:
-- notes and debentures to Baa1 from A1
Verizon Florida, Inc.:
-- debentures to Baa1 from A1
Verizon South, Inc.:
-- debentures to Baa1 from A2 except the $300M of Series F
debentures, due 2041, which are downgraded to A3 from A2
based on unconditional and irrevocable guarantee from
Verizon Communications
GTE Southwest, Inc.:
-- first mortgage bonds to Baa1 from A2
-- notes and debentures to Baa2 from A3
Ratings upgraded:
MCI, Inc.:
-- Corporate Family to Ba3 from B2
-- Senior Notes to Ba3 from B2
MCI INC: Will Pay $3.5 Mil. in Incentive Awards to Five Officers
----------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Robert T. Blakely, executive vice president and chief
financial officer of MCI, Inc., reports that on Dec. 8, 2005, the
Compensation Committee of the Board of Directors of MCI approved
the payment of incentive awards to the Company's executive
officers.
As previously disclosed, incentive awards were made pursuant to
the terms of the Company's Corporate Variable Pay Plan based on a
"balanced scorecard" of individual performance relating to pre-
identified Key Result Areas and the Company's EBITDA. "Based on
the foregoing, and using third-quarter performance as the measure
for second-half 2005 performance in light of the Company's pending
acquisition by Verizon Communications Inc., the Compensation
Committee approved payment at target levels," Mr. Blakely
explains.
The incentive awards for the second half of 2005 will be given to:
Officer Position Incentive Award
------- -------- ---------------
Robert T. Blakely Exec. VP & CFO $297,500
Jonathan C. Crane Exec. VP - Strategy
& Corp. Development $287,500
Wayne E. Huyard President
U.S. Sales & Service $437,500
Anastasia D. Kelly Exec. VP and
General Counsel $276,250
The Board also approved a $2,250,000 incentive award for Michael
D. Capellas, the Company's chief executive officer, in respect of
the fiscal year 2005 performance period on December 9, 2005, Mr.
Blakely discloses.
In determining the incentive award for 2005, the Board reviewed
Mr. Capellas' outstanding accomplishments during 2005, including:
-- the Company's performance with respect to its financial and
operational goals for 2005;
-- the negotiation of the merger agreement with Verizon
Communications Inc., and securing the shareholder and
regulatory approvals of the merger agreement;
-- retention of all key operating executives during the merger
period;
-- introduction of new products; and
-- improvements in customer service.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on
October 31, 2003, and on April 20, 2004, the company formally
emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom
Bankruptcy News, Issue No. 109; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Feb. 22, 2005,
Standard & Poor's Ratings Services placed its ratings of Ashburn,
Virginia-based MCI Corp., including the 'B+' corporate credit
rating, on CreditWatch with positive implications. The action
affects approximately $6 billion of MCI debt.
MCLEODUSA INC: Headquarter Sold for $27 Mil. to Aegon Affiliate
---------------------------------------------------------------
As previously reported, McLeodUSA Incorporated entered into a
Real Estate Purchase Contract and Escrow Instructions with Life
Investors Insurance Company of America, for the sale of the
Debtors' Technology Park corporate headquarters at 6400 C Street
SW in Cedar Rapids, Iowa.
At the Dec. 15, 2005, hearing on the Debtors' Disclosure
Statement and Plan of Reorganization, Judge Squires approved the
HQ Sale Agreement. A full-text copy of the HQ Sale Agreement is
available at no cost at:
http://bankrupt.com/misc/McLeodUSAHQAgreement.pdf
Life Investors will pay $27,244,000 to the Debtors.
The Court ruled that upon consummation of the HQ Sale Agreement,
the assets sold will be vested on Life Investors, free and clear
of all liens, claims and encumbrances. The Debtors will assume
and assign their janitorial contract with American Building
Maintenance - Janitorial Services to Life Investors.
The Court approved certain leases and security deposits required
under the HQ Sale Agreement. The Debtors will have no legal,
equitable or residual interest in certain related security
deposits, and Life Investors will have an administrative expense
claim pursuant to Section 503(b)(1) of the Bankruptcy Code for
any obligations under certain Leases.
Life Investors will have additional administrative expense claims
pursuant to Section 503(b)(1) for any claims it may have against
the Debtors for any damages it may suffer as a result of
McLeodUSA's breach of the HQ Sale Agreement. The HQ Sale
Agreement and all of McLeodUSA's representations and other
related obligations to Life Investors will be enforceable against
McLeodUSA and will survive the Debtors' Chapter 11 cases.
Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated --
http://www.mcleodusa.com/-- provides integrated communications
services, including local services in 25 Midwest, Southwest,
Northwest and Rocky Mountain states. The Debtor and its
affiliates filed for chapter 11 protection on Oct. 28, 2005
(Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234). Peter
Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate,
Meagher and Flom, represent the Debtors in their restructuring
efforts. As of June 30, 2005, McLeodUSA Incorporated reported
$674,000,000 in total assets and $1,011,000,000 in total debts.
McLeodUSA Inc. previously filed for chapter 11 protection on
January 30, 2002 (Bankr. D. Del. Case No. 02-10288). The Court
confirmed the Debtor's chapter 11 plan on April 5, 2003, and
that Plan took effect on April 16, 2002. The Court formally
closed the case on May 20, 2005. (McLeodUSA Bankruptcy News,
Issue No. 7 Bankruptcy Creditors' Service, Inc., 215/945-7000).
MEDICAL TECHNOLOGY: Employs Sutton Frost as Independent Auditor
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas gave
Medical Technology, Inc., permission to employ Sutton Frost Cary
LLP as its independent auditor and accounting firm.
Sutton Frost will:
a) provide independent auditing of the Debtor's financial
statements;
b) provide general accounting services; and
c) assist with other financial-related services.
The Debtor discloses that the Firm's professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
C. Kenneth Frost, CPA Partner $250
John T. Sutton, cPA Partner $250
Tammy M. Unangst, CPA Senior Associate $110
John Samford Staff $65
John Wood Staff $65
The Debtor assures the Court that the Firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in Grand Prairie, Texas, Medical Technology, Inc.,
dba Bledsoe Brace Systems -- http://www.bledsoebrace.com/home.asp
-- manufactures and distributes orthopedic knee braces, ankle
braces, ankle supports, knee immobilizers, arm braces, sport
braces, boots, and walkers. The Debtor filed for chapter 11
protection on July 25, 2005 (Bankr. N.D. Tex. Case No. 05-47377).
J. Robert Forshey, Esq., Jeff P. Prostok, Esq., and Julie C.
McGrath, Esq., at Forshey & Prostok, LLP, represent the Debtor in
its restructuring efforts. When the Debtor filed for
protection from its creditors, it estimated assets and debts
between $10 million to $50 million.
MEDICAL TECHNOLOGY: Hires Yee & Associates as Patent Counsel
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas gave
Medical Technology, Inc., permission to employ Yee & Associates,
P.C., as its patent counsel.
Yee & Associates specializes in patent law. The firm will render
services for the Debtor in connection with any patent matter.
The Firm's professionals' current billing rates:
Professional Designation Hourly Rate
------------ ----------- -----------
Duke W. Yee Partner $400
Wayne P. Bailey Senior Attorney $275
Gerald H. Glanzman Senior Attorney $250
James O. Skarsten Senior Attorney $250
Lisa Yociss Senior Attorney $250
Theodore D. Fay III Associate $170
Catherine K. Winslow Associate $160
Robert C. Rolnick Associate $157
Brian D. Owens Associate $120
Barry L. Jones Associate $110
John M. Leonard Associate $110
Peter B. Manzo Associate $110
Mary Adams-Moe Associate $100
Hope Shimabuku Associate $100
Mari Stewart Associate $100
To the best of the Debtor's knowledge, Yee & Associates represents
no interest adverse to the Debtor or its estate and is a
"disinterested person" as defined in section 101(14) of the
Bankruptcy Code.
Headquartered in Grand Prairie, Texas, Medical Technology, Inc.,
dba Bledsoe Brace Systems -- http://www.bledsoebrace.com/home.asp
-- manufactures and distributes orthopedic knee braces, ankle
braces, ankle supports, knee immobilizers, arm braces, sport
braces, boots, and walkers. The Debtor filed chapter 11
protection on July 25, 2005 (Bankr. N.D. Tex. Case No. 05-47377).
J. Robert Forshey, Esq., Jeff P. Prostok, Esq., and Julie C.
McGrath, Esq., at Forshey & Prostok, LLP, represent the Debtor in
its restructuring efforts. When the Debtor filed for
protection from its creditors, it estimated assets and debts
between $10 million to $50 million.
MESABA AVIATION: Hires Sonnenschein Nath as Special Counsel
-----------------------------------------------------------
Mesaba Aviation, Inc., doing business as Mesaba Airlines, sought
and obtained permission from the U.S. Bankruptcy Court for the
District of Minnesota to employ Sonnenschein Nath & Rosenthal,
LLP, as its special counsel.
Specifically, Sonnenschein Nath will:
-- represent the Debtor in Northwest Airlines, Inc.'s Chapter
11 case pending before the U.S. Bankruptcy Court for the
Southern District of New York; and
-- provide consulting services regarding airline industry
issues.
Sonnenschein Nath's bankruptcy and restructuring group has been
involved in a number of airline and aircraft industry
restructurings, including Trans World Airlines, Frontier, Pan Am,
Braniff, Eastern Express, and U.S. Africa Airways bankruptcies.
The Debtor will pay Sonnenschein Nath on an hourly basis in
accordance with its hourly rates:
Position Hourly Rate
-------- -----------
Partners and of Counsel $325 - $840
Associates $230 - $435
Paralegals $135 - $225
The Debtor believes that Sonnenschein Nath's employment will not
duplicate the services offered by the Debtor's principal
bankruptcy counsel, Ravich Meyer Kirkman McGrath & Nauman, P.A.
Fruman Jacobson, Esq., a partner at Sonnenschein Nath, attests
that the firm's partners, counsel and associates do not have any
interest adverse to the Debtor or to the Debtor's estate in
connection with the matters for which the firm is to be employed.
Mr. Jacobson discloses that Andrew Weil, Esq., who has practiced
law at Sonnenschein Nath since 1986, is the brother of Robert
Weil, chief financial officer of MAIR Holdings, Inc., the parent
of Mesaba. The firm has not represented MAIR Holdings in the
past, and has represented Robert Weil in a personal, estate
planning matter approximately 10 years ago, which representation
is unrelated to Robert Weil's capacity as an officer or
shareholder of MAIR.
Mr. Jacobson assures the Court that Sonnenschein Nath will not
represent either MAIR Holdings or Robert Weil in the future in
connection with any matter related to the Debtor's Chapter 11
case, Mesaba, Northwest Airlines or any matter for which
Sonnenschein Nath is to be engaged. Andrew Weil will not have
any role or responsibility in the firm's representation of Mesaba
and will be screened from any contact with documents and
communications generated in the course of this representation of
Mesaba, Mr. Jacobson adds.
Carole Neville, Esq., a bankruptcy and restructuring partner in
the firm's New York office, and Mr. Jacobson will be the
attorneys sharing primary responsibility for the engagement.
Mr. Jacobson and Ms. Neville also represent the Official
Committee of Unsecured Creditors in the United Air Lines
bankruptcy cases.
Mesaba Aviation, Inc., d/b/a Mesaba Airlines,--
http://www.mesaba.com/-- operates as a Northwest Airlink
affiliate under code-sharing agreements with Northwest Airlines.
The Company filed for chapter 11 protection on Oct. 13, 2005
(Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at
Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed total assets of $108,540,000 and
total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
MESABA AVIATION: ALPA Says Incentive Plans Are Counter-Productive
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on Nov. 11, 2005,
Mesaba Aviation, Inc., sought the U.S. Bankruptcy Court for the
District of Minnesota's authority to continue its Incentive and
Severance Plans and make payments under the Plans consistent with
its prepetition practices.
ALPA Responds
The Air Line Pilots Association, International, a creditor and
party-in-interest in the Debtor's Chapter 11 case, is the
exclusive collective bargaining representative for approximately
870 pilots of the Debtor. The terms and condition of employment
for the pilots are governed by a collective bargaining agreement
between ALPA and the Debtor. Under the threat of an application
pursuant to Section 1113, the Debtor has sought draconian
concessions from the pilots, Brian F. Leonard, Esq., at Leonard,
O'Brien, Spencer, Gale & Sayre, Ltd., in Minneapolis, Minnesota,
relates.
Mr. Leonard argues that the Debtor's request should be denied
because:
-- "continuation" of the Plans would be detrimental to the
morale of the pilots and counter-productive to a consensual
resolution of the Debtor's Chapter 11 case; and
-- the Debtor has failed to demonstrate that any of the Plans
is necessary.
It is misleading for the Debtor to suggest that it is simply
"continuing" the status quo since three of the four plans at
issue appear to have been amended immediately prior to the filing
to the Debtor's Petition Date, Mr. Leonard says. Moreover, he
adds, some of the plans seem to provide that the Plan
Administrator is free to amend the plan in the future.
According to Mr. Leonard, as of the close of business on Dec. 6,
2005, the Debtor did not provide information requested by ALPA.
ALPA is a member of the Official Committee of Unsecured
Creditors. "Such intransigence by the Debtor is sufficient basis
for denying the Motion," Mr. Leonard insists.
Mesaba Aviation, Inc., d/b/a Mesaba Airlines,--
http://www.mesaba.com/-- operates as a Northwest Airlink
affiliate under code-sharing agreements with Northwest Airlines.
The Company filed for chapter 11 protection on Oct. 13, 2005
(Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at
Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed total assets of $108,540,000 and
total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
NEXTEL PARTNERS: Determines Put Price at $28.50 Per Share
---------------------------------------------------------
Nextel Partners (NASDAQ:NXTP) and Sprint Nextel Corp. (NYSE:S)
reported the put price under Partners' charter has been determined
to be $28.50 per share of Partners' Class A common stock. This is
the price at which Sprint Nextel will purchase Nextel Partners'
Class A common stock under the put right in Nextel Partners'
charter initiated by Nextel Partners shareholders in October 2005
following the Sprint Nextel merger.
The put price was determined after the two appraisers, Morgan
Stanley and Lazard, issued their reports that determined fair
market value for Nextel Partners as defined in the charter. As
set forth in their respective reports, Morgan Stanley determined
fair market value of Partners' equity to be $9.6 billion, or
$29.75 per fully diluted share and Lazard determined fair market
value of Partners' equity to be $8.8 billion, or $27.25 per fully
diluted share.
As provided in the charter, because the two appraisers' values are
within 10% of each other, the final fair market value is the
average of the two appraisers' determinations. The aggregate
amount payable to Partners Class A stockholders will be
$6.5 billion including amounts payable upon conversion of debt
securities and upon settlement of options. This transaction
implies an enterprise value for Nextel Partners at approximately
$10 billion.
"Sprint Nextel shares with Nextel Partners a commitment of
excellence to our customers, employees and shareholders," Sprint
Nextel CEO Gary Forsee, commented. "As we work through the
regulatory approval processes, we intend to focus on plans for
efficiently integrating Partners' business into our operations in
a way that is seamless for customers and employees."
"From inception we have placed the interests of our investors,
customers and fellow partners (employees) first and foremost,"
John Chapple, Nextel Partners Chairman, CEO and President, said.
"We believe that aligned with Sprint Nextel we are poised to move
to the next level. This is an across the board success. It
results in an attractive price and provides certainty for all
Nextel Partners shareholders."
The put price is final and binding on all Nextel Partners
shareholders unless notice of a challenge is provided to Sprint
Nextel before 5 p.m. EST on Jan. 9, 2006. Under the charter,
challenging shareholders will receive a maximum put price that is
estimated to be well below the put price. Sprint Nextel has
waived its right to challenge the put price and has opted to pay
cash as consideration for the purchase of the Class A shares.
The transaction is subject to the customary regulatory approvals,
including review by the Federal Communications Commission and the
Department of Justice, and is expected to be completed by the end
of the second quarter of 2006.
Sprint Nextel was advised in the matter by financial advisors
Goldman Sachs & Co. and JP Morgan Securities Inc. and legal
counsel Jones Day. Nextel Partners was advised in the matter by
financial advisors Morgan Stanley, who served as the principal
financial advisor and appraiser, and Evercore Partners, Inc. and
legal counsel Wachtell, Lipton, Rosen & Katz.
About Sprint Nextel
Sprint Nextel -- http://www.sprint.com/-- offers a comprehensive
range of wireless and wireline communications services to
consumer, business and government customers. Sprint Nextel is
widely recognized for developing, engineering and deploying
innovative technologies, including two robust wireless networks
offering industry leading mobile data services; instant national
and international push-to-talk capabilities; and an award-winning
and global Tier 1 Internet backbone.
About Nextel Partners
Nextel Partners, Inc. -- http://www.nextelpartners.com/-- based
in Kirkland, Washington, has exclusive rights to offer the same
fully integrated, digital wireless communications services offered
by Nextel Communications, Inc. in mid-sized and rural markets in
31 states where approximately 54 million people reside. Nextel
Partners and Nextel together offer the largest guaranteed
all-digital wireless network in the country serving 297 of the top
300 U.S. markets.
* * *
As reported in the Troubled Company Reporter on Dec. 23, 2005,
Standard & Poor's Ratings Services affirmed its 'A-' corporate
credit rating on Sprint Nextel Corp. and subsidiaries. All
ratings on Nextel Partners Inc., including the 'BB' corporate
credit rating, remain on CreditWatch with positive implications.
The outlook on Sprint Nextel is stable. The ratings on Nextel
Partners were placed on CreditWatch on Oct. 25, 2005, following
the exercise of the put right.
NINE DRAGONS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Nine Dragons City Center, LLC
329 North Pearl Street
Albany, New York 12207
Bankruptcy Case No.: 05-20403
Chapter 11 Petition Date: December 22, 2005
Court: Northern District of New York (Albany)
Judge: Robert E. Littlefield Jr.
Debtor's Counsel: David N. Goldin, Esq.
39 N. Pearl Street, Suite 6
Albany, NY 12207
Tel: (518) 626-0347
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
NORTHWEST AIRLINES: Otterbourg Approved as Committee's Counsel
--------------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York authorized the Official Committee of
Unsecured Creditors of Northwest Airlines Corp. and its debtor-
affiliates to retain Otterbourg, Steindler, Houston & Rosen, P.C.,
as its counsel, effective as of Sept. 30, 2005.
Douglas Greco, chairperson of the Creditors Committee, explained
that the Committee has selected Otterbourg because of the firm's
extensive experience in and knowledge of business reorganizations
under Chapter 11 and its particular expertise in airline
reorganizations. The Creditors Committee believes that
Otterbourg is qualified to represent it in a cost-effective,
efficient, and timely manner.
Under the engagement, Otterbourg will:
(a) assist and advise the Creditors Committee in its
consultation with the Debtors relative to the
administration of their cases;
(b) attend meetings and negotiate with the representatives of
the Debtors;
(c) assist and advise the Committee in its examination and
analysis of the conduct of the Debtors' affairs;
(d) assist the Committee in the review, analysis, and
negotiation of any plan of reorganization that may be
filed and to assist the Committee in the review, analysis,
and negotiation of the disclosure statement accompanying
any reorganization plan;
(e) assist the Committee in the review, analysis, and
negotiation of any financing agreements;
(f) take all necessary action to protect and preserve the
interests of the Committee, including:
* possible prosecution of actions on its behalf;
* if appropriate, negotiations concerning all litigations
in which the Debtors are involved; and
* if appropriate, review, and analysis of claims filed
against the Debtors' estates;
(g) prepare on behalf of the Committee all necessary motions,
applications, answers, orders, reports, and papers, in
support of the Committee's positions;
(h) appear, as appropriate, before the Court, the Appellate
Courts, and the United States Trustee, and protect the
interests of the Committee; and
(i) perform all other necessary legal services in the Debtors'
cases.
Otterbourg will be paid in accordance with its current hourly
rates:
Professional Rate
------------ ----
Partner/Counsel $450 - $725
Associate $240 - $525
Paralegal/Legal Assistant $175 - $195
The firm will also be reimbursed for out-of-pocket expenses
incurred in connection with its representation of the Creditors
Committee.
Scott L. Hazan, Esq., member of Otterbourg, assured the Court
that the firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code. He said that
Otterbourg has transacted with certain parties-in-interest in
matters unrelated to the Debtors' chapter 11 cases.
Northwest Airlines Corporation -- http://www.nwa.com/-- is
the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 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. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $14.4 billion in total assets and $17.9
billion in total debts. (Northwest Airlines Bankruptcy News,
Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NORTHWEST AIRLINES: Resolves Mail Facility Dispute With MAC
-----------------------------------------------------------
Northwest Airlines Corp. and its debtor-affiliates and the
Metropolitan Airports Commission are parties to a lease for a
facility located at 6040 28th Avenue South, in Minneapolis,
Minnesota.
The parties have agreed to the rejection of the Lease. However,
they dispute the effective date of the rejection.
After negotiations, the parties agree that:
(a) the Mail Facility Agreement is rejected as of a date no
later than October 7, 2005;
(b) the Debtors will pay to MAC $7,000 in full resolution of
any alleged administrative claims held by MAC with respect
to the Mail Sort Agreement and Mail Sort Facility;
(c) the Debtors agree to remove their personal property from
the Mail Sort Facility within 10 business days; or in the
alternative, that personal property remaining at the
Facility after 10 business days is deemed abandoned by
the Debtors, and they authorize MAC to dispose of the Mail
System and the abandoned personal property, without
seeking modification of the stay; and
(d) MAC reserves its rights to file claims seeking unsecured
rejection damages under Section 502(b)(6) of the
Bankruptcy Code, if any, arising from the Debtors'
rejection of the Mail Sort Agreement, provided however
that the Debtors' right to object to any claim and assert
any defenses are also reserved.
Each of the Parties will pay its own costs and attorneys' fees
incurred with respect to the Filed Claims, the Objection and the
preparation of the Stipulation.
Judge Gropper approves the Stipulation in its entirety.
Northwest Airlines Corporation -- http://www.nwa.com/-- is
the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 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. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $14.4 billion in total assets and $17.9
billion in total debts. (Northwest Airlines Bankruptcy News,
Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NRG ENERGY: Selling Securities to Fund Buy-Out & Restructure Debt
-----------------------------------------------------------------
NRG Energy, Inc., plans to offer senior debt securities, unsecured
debt securities, preferred stock and common stock to finance its
acquisition of Texas Genco LLC, a Delaware limited liability
company, and each of the direct and indirect owners of Texas
Genco, and to re-capitalize the Company.
As reported in the Troubled Company Reporter on Oct. 3, 2005, NRG
Energy and Texas Genco entered into a definitive agreement for NRG
to acquire all the outstanding equity of Texas Genco.
The Company expects to close this transaction during the first
quarter of 2006.
On a pro forma basis, the Company estimates that the total
purchase price will be $6.121 billion. This amount is comprised
of common stock, cash, preferred stock and capitalized expenses.
The number of shares to be issued to Texas Genco is 35,406,320, of
this amount 19,346,788 are from treasury and 16,059,532 are newly
issued shares, at a price of $45.37 which is the average NRG share
price immediately before and after the pro forma date of closing,
or September 30, 2005, with a total value of $1.6 billion for the
shares. NRG will pay $4.031 billion in cash, issue Cumulative
Redeemable Preferred Stock at a value of $368 million, and will
capitalize expenses of $120 million. This purchase price includes
the assumption by the Company of approximately $2.74 billion of
Texas Genco indebtedness. As a result of the acquisition, Texas
Genco will become a wholly owned subsidiary of the Company.
Of the pro forma $6.121 billion consideration to Texas Genco
upon consummation of the acquisition, the Company will pay $4.031
billion in cash, and must issue at least 35,406,320 shares of the
Company's common stock. At the Company's election, the remaining
consideration with a fair value of $368 million may be comprised
of either an issuance of 9,038,125 additional shares of common
stock, additional cash, shares of a new series of NRG's Cumulative
Preferred Stock or a combination.
If issued, the aggregate liquidation preference of the Cumulative
Preferred Stock will be equal to the average trading value of
9,038,125 shares of the Company's common stock over a 20 trading
day period prior to closing. If the Company elects to pay all or
a portion of the remaining purchase price in cash, the amount
payable in cash would be calculated in the same manner.
The financing transactions will also enable the Company to
refinance its outstanding Second Priority Notes and Credit
Facility. This Credit Facility includes a senior secured term
loan, a revolving credit facility and funded letter of credit
facility. In addition, the new financing will supply the source
of funds repay its Term Loan Facility and Senior Notes. NRG
provides a brief summary of its outstanding debt instruments that
will be refinanced with the new debt structure:
Old Debt Structure
As of September 30, 2005 New Debt
(in millions) NRG Texas Genco Structure
------------- ------------------------ ---------
Term loan - adjustable interest 447 1,614 3,200
Second Priority Notes 1,080 n/a n/a
Unsecured senior notes n/a 1,125 3,600
Revolving credit facility 150 325 1,000
Funded letter of credit facility 350 694 n/a
Synthetic letter of credit facility n/a n/a 1,000
NRG Energy, Inc., owns and operates a diverse portfolio of
power-generating facilities, primarily in the United States. Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities. The company, along with its
affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case
No. 03-13024) on May 14, 2003. The Company emerged from chapter
11 on December 5, 2003, under the terms of its confirmed Second
Amended Plan. James H.M. Sprayregen, Esq., Matthew A. Cantor,
Esq., and Robbin L. Itkin, Esq., at Kirkland & Ellis, represented
NRG Energy in its $10 billion restructuring.
* * *
As reported in the Troubled Company Reporter on Oct. 6, 2005,
Moody's Investors Service affirmed the ratings of NRG Energy, Inc.
(NRG: B1 Corporate Family Rating) and Texas Genco, LLC (TGN: Ba3
Corporate Family Rating). This action follows the announcement
that NRG has agreed to acquire all the outstanding equity of TGN
for about $5.8 billion and the assumption of about $2.5 billion of
TGN net debt. The rating outlook for NRG is revised to developing
from stable. The rating outlook for TGN continues to be stable.
Ratings affirmed at NRG include:
* Secured term loan and secured revolving credit rated Ba3;
* Corporate Family Rating at B1;
* Second lien secured notes rated B1;
* Preferred stock at B3;
* Speculative Grade Liquidity Rating of SGL-1.
NRG ENERGY: Selling Audrain Generating to AmerenUE for $115 Mil.
----------------------------------------------------------------
NRG Energy, Inc., entered into an Asset Purchase and Sale
Agreement to sell all the assets of NRG Audrain Generating LLC to
AmerenUE, a subsidiary of Ameren Corporation, for $115 million,
subject to customary purchase price adjustments.
The transaction is expected to close during the first half of
2006. The sale is subject to customary approvals, including
Federal Energy Regulatory Commission, Missouri Public Utilities
Commission, Illinois Commerce Commission, and Hart-Scott-Rodino
review. The Company expects to record a gain of approximately
$15 million at closing.
NRG Energy, Inc., owns and operates a diverse portfolio of
power-generating facilities, primarily in the United States. Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities. The company, along with its
affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case
No. 03-13024) on May 14, 2003. The Company emerged from chapter
11 on December 5, 2003, under the terms of its confirmed Second
Amended Plan. James H.M. Sprayregen, Esq., Matthew A. Cantor,
Esq., and Robbin L. Itkin, Esq., at Kirkland & Ellis, represented
NRG Energy in its $10 billion restructuring.
* * *
As reported in the Troubled Company Reporter on Oct. 6, 2005,
Moody's Investors Service affirmed the ratings of NRG Energy, Inc.
(NRG: B1 Corporate Family Rating) and Texas Genco, LLC (TGN: Ba3
Corporate Family Rating). This action follows the announcement
that NRG has agreed to acquire all the outstanding equity of TGN
for about $5.8 billion and the assumption of about $2.5 billion of
TGN net debt. The rating outlook for NRG is revised to developing
from stable. The rating outlook for TGN continues to be stable.
Ratings affirmed at NRG include:
* Secured term loan and secured revolving credit rated Ba3;
* Corporate Family Rating at B1;
* Second lien secured notes rated B1;
* Preferred stock at B3;
* Speculative Grade Liquidity Rating of SGL-1
OMEGA HEALTHCARE: Closes Purchase of 11 Facilities for $115.5 Mil.
------------------------------------------------------------------
Omega Healthcare Investors, Inc. (NYSE:OHI) reported the closing
of the purchase of 10 skilled nursing facilities and one assisted
living facility, for a total investment of approximately $115.5
million. The facilities total 1,610 beds and are all located in
Ohio. The facilities are subject to a new ten-year master lease
between Omega and affiliates of an existing operator, CommuniCare
Health Services. The annualized rent is approximately $11.6
million. The lease contains annual escalators and has two ten
year renewal options. In addition, Omega will make available for
one year a working capital line of credit totaling $12.5 million.
"We are very excited about expanding our relationship with the
CommuniCare family of companies," said Taylor Pickett, President
and CEO. "The management team at CommuniCare exemplifies the type
of high quality operator we look to partner with in the coming
years."
Headquartered in Timonium, Maryland, Omega HealthCare Investors,
Inc. -- http://www.omegahealthcare.com/-- is a real estate
investment trust investing in and providing financing to the long-
term care industry. At September 30, 2005, the Company owned or
held mortgages on 216 skilled nursing and assisted living
facilities with approximately 22,407 beds located in 28 states and
operated by 38 third-party healthcare operating companies.
* * *
Omega Healthcare's 6.95% notes due 2007 and 7% notes due 2014
carry Moody's Investors Service's B1 rating, Standard & Poor's BB-
rating and Fitch's BB- rating.
ON SEMICONDUCTOR: Repays $94.5 Million of Jr. Subordinated Note
---------------------------------------------------------------
ON Semiconductor Corporation (NASDAQ: ONNN) has repaid the
remaining $94.5 million of principal and accrued interest owed
under its 10% junior subordinated note due 2011 previously issued
by the Company's subsidiary, Semiconductor Components Industries,
LLC. The repayment of the note was financed with proceeds from
the Company's previously announced private offering of 1.875%
convertible senior subordinated notes due 2025 and cash on hand.
With the completion of this transaction, the Company has
eliminated all significant double-digit interest expense debt.
This transaction is expected to have a minimal financial impact to
the Company's fourth quarter 2005 net interest expense, but is
expected to save the Company approximately $7 million of net
interest expense in 2006. Based on the repayment of the 10%
junior subordinated note, previously announced financial
transactions completed in the fourth quarter of 2005, current
LIBOR rates, and assuming no further changes to the amount of
total debt, the Company currently expects to reduce its annual
2006 net interest expense to approximately $49 million.
"The financing actions taken by the Company during the fourth
quarter of 2005 have helped extend the overall maturity of our
debt and reduce its associated costs. The average interest rate
associated with our total debt is expected to be approximately 5%
in 2006. This is substantially lower than in 2003 and 2004 when
the average interest rate on our total debt was approximately 11%
and 9%, respectively" said Donald Colvin, ON Semiconductor senior
vice president and CFO. "We have been very successful over the
past 2 years in transforming our balance sheet and improving our
overall capital structure. As part of our overall financial
strategy, we will continue to focus on reducing our overall debt
levels."
ON Semiconductor Corp. -- http://www.onsemi.com/-- supplies power
solutions to engineers, purchasing professionals, distributors and
contract manufacturers in the computer, cell phone, portable
devices, automotive and industrial markets.
ON Semiconductor Corp.'s 12% Senior Secured Notes due 2010 carry
Standard & Poor's B+ rating.
PENNSYLVANIA ECONOMIC: S&P Puts BB Rating on Northampton Sr. Bonds
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' rating on
Northampton Generating Co. L.P.'s series A senior secured bonds
and its series B senior secured bonds on CreditWatch with negative
implications.
The bonds were issued by the Pennsylvania Economic Development
Financing Authority on behalf of the project, which is a 112 MW
waste coal fired generation facility based in Northampton,
Pennsylvania.
The rating action follows the project's announcement that it will
cease generating power for the remainder of the year to avoid
further carbon dioxide emissions exceedances.
The project reported that the decision to stop generating power
should result in an approximate $2.2 million decrease in cash
available for debt service in the first quarter of 2006.
"We expect to resolve the CreditWatch following a more in-depth
review of the project's ability to make its March 2006 debt
service payments," said Standard & Poor's credit analyst Daniel
Welt.
"We will also review the project's progress on initiatives aimed
at addressing its long-term solvency, such as reducing fuel
costs," said Mr. Welt.
PORT AUTHORITY: S&P Revises JFK Revenue Bonds' Outlook to Positive
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
the Port Authority of New York and New Jersey's series 6 special
facility revenue bonds, issued on behalf of John F. Kennedy
International Air Terminal LLC, to positive from stable.
At the same time, Standard & Poor's affirmed its 'BB+' underlying
rating on the bonds, which were issued in 1997.
JFK IAT was formed as a private, limited liability company solely
to lease, develop, construct, operate, and maintain Terminal 4 at
John F. Kennedy International Airport.
The outlook revision reflects the strong growth in passenger
levels at the airport in the last two years, improved financial
performance, the formal extension of the New York City lease
beyond the final maturity of the bonds, and the favorable terms of
a proposed financial restructuring agreement with the port
authority.
"The operating performance of the project has been very robust
over the past two years," said Standard & Poor's credit analyst
Reid Tomlin. "Passenger enplanements have increased by 50% since
2002."
After opening in May 2001, the project operated in a very
difficult environment following the effects of the Sept. 11, 2001,
terrorist attacks and the outbreak of SARS. In February 2002,
Standard & Poor's lowered its rating on JFK IAT's debt to 'BB+'
from 'BBB+' as a result of the project's significant
under-performance with regard to passenger activity levels and
revenues, and less than 1.0x projected debt service projected for
fiscal 2002.
"In the aftermath of Sept. 11, management has done a good job of
stringently controlling operating expenses, which, in combination
with passenger growth, significantly improved financial margins in
2004 and 2005," said Mr. Tomlin. "Consequently, debt service
coverage increased to 1.30x in fiscal 2004 and is tracking at
1.43x for the current fiscal year."
Other positive rating factors include the extension of the basic
lease between the port authority and New York City in late 2004,
allowing for the series 6 bonds to be paid out pursuant to a
significantly more flexible amortization schedule, and a revised
repayment plan related to $168 million of subordinate debt owed to
the Port authority. The plan also permits the company to receive
a portion of its management fee on parity with the subordinate
debt. Although the company is now current on all of its
subordinate obligations, the repayment provisions are more
flexible and provide long-term stability to the project.
"Overall, we believe the restructuring plan enhances the economic
incentive for management to perform over the long term," said
Mr. Tomlin. "In addition, the degree of cooperation maintained
between the company and the port authority demonstrates their
respective commitments to the facility."
The rating could be raised to investment grade if improvement in
the project's operations continues and solid debt service coverage
levels are maintained into 2006.
"We would also like to see the formal adoption of the terms of the
port authority restructuring agreement," said Tomlin.
Competition for international passengers will likely intensify as
competing facility expansions at JFK Airport are undertaken.
While the facility is considered highly leveraged, its capital
needs over the medium term are expected to be manageable at less
than $12 million over the next six years.
The facility also remains vulnerable to certain external factors
that could affect upward movement in the rating, however,
including sustained geopolitical events, such as SARS, more
aviation-related terrorist attacks, or worsening volatility in the
global aviation industry.
The outlook revision affects roughly $898 million debt.
POTLATCH CORP: Board Okays Final Steps to REIT Conversion
---------------------------------------------------------
Potlatch Corporation's (NYSE:PCH) Board of Directors has approved
the final steps necessary for the company to begin operating as a
real estate investment trust (REIT) on January 1, 2006. No other
Board or regulatory actions are necessary for the conversion of
Potlatch Corporation to a REIT.
"We plan to set a record date for a stockholder meeting for a vote
that will have the effect of increasing the number of authorized
shares," noted Chairman and Chief Executive Officer L. Pendleton
Siegel. He added that increasing the authorized shares to
100 million from the current 40 million will provide the company
with shares that can be used for acquiring additional timberland
assets, future stock splits, or equity offerings to raise capital
for acquisitions or other corporate purposes and, if necessary,
for a portion of the company's taxable distribution of accumulated
earnings and profits. The special E&P distribution is expected to
occur in the first quarter of 2006, as originally announced.
Stockholders will have the opportunity to elect to receive this
special E&P distribution of between $440 and $480 million in cash,
stock or a combination of both, with the aggregate cash payment by
the company to be capped at 20%.
The company expects to pay its first regular quarterly
distribution as a REIT at the end of February 2006. The
distribution amount expected to be paid in the first quarter,
$0.65 per share based on the current number of shares outstanding
(or $2.60 per share annually), will be adjusted downward after the
first quarter to reflect the additional shares that will be issued
in conjunction with the stock portion of the E&P distribution.
Potlatch Corporation -- http://www.potlatchcorp.com/-- owns and
manages approximately 1.5 million acres of timberlands and
operates 13 manufacturing facilities. The Company's timberland
and all of its manufacturing facilities are located within the
continental United States, primarily in Arkansas, Idaho, Minnesota
and Nevada. The Company is engaged principally in growing and
harvesting timber and converting wood fiber into two broad product
lines: (a) commodity wood products; and (b) bleached pulp
products.
* * *
As reported in the Troubled Company Reporter on Oct. 31, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on forest products company Potlatch Corp. to 'BB' from
'BB+'. At the same time, Potlatch's unsecured debt rating was
lowered to 'BB' from 'BB+' and its subordinated debt rating was
lowered to 'B+' from 'BB-'. All ratings were removed from
CreditWatch where they were placed with negative implications on
Sept. 20, 2005. The outlook is stable.
As reported in the Troubled Company Reporter on Oct. 27, 2005,
Moody's Investors Service affirmed Potlatch Corporation's Ba1
senior unsecured and Ba2 senior subordinated debt ratings.
Ratings affirmed:
* Corporate family rating: Ba1
* Senior unsecured notes and debentures: Ba1
* 10.00% senior subordinated notes due 2011: Ba2
Outlook: Stable
As reported in the Troubled Company Reporter on Oct. 24, 2005,
Fitch Ratings has affirmed Potlatch Corporation's senior unsecured
ratings and issuer default rating at 'BB+' and the company's
senior subordinated rating at 'BB'. The Potlatch Rating Outlook
remains Stable.
REAL ESTATE: Moody's Places Low-B Ratings on Four Security Classes
------------------------------------------------------------------
Moody's Investors Service has assigned securities issued by Real
Estate Synthetic Investment Securities, Series 2005-D. The
synthetic transaction provides the owner of a sizable pool of
jumbo mortgages credit protection similar to the credit
enhancement provided through subordination in conventional
residential mortgage backed securities (RMBS) transactions.
The reference portfolio includes approximately $16.8 billion of
jumbo and conforming balance fixed-rate mortgages and jumbo hybrid
mortgages purchased from various originators. The portfolio is
generally static as in most RMBS deals.
Through an agreement with the securities issuer, the Protected
Party pays a fee for the transfer of a portion of the portfolio
risk. Investors in the securities have an interest in the
holdings of the issuer, which include highly rated investment
instruments, a forward delivery agreement and fee collections on
the agreement with the Protected Party. Investors are exposed to
risk from the reference portfolio but do not benefit from cash
flows from these assets. Depending on the class of securities
held, investors have credit protection from subordination.
The complete rating actions are:
Co-Issuer: RESI Finance Limited Partnership 2005-D
Co-Issuer: RESI Finance DE Corporation 2005-D
Issue: Real Estate Synthetic Investment Securities, Series 2005-D
-- Class B3 Notes, rated A2
-- Class B4 Notes, rated A3
-- Class B5 Notes, rated Baa2
-- Class B6 Notes, rated Baa3
-- Class B7 Notes, rated Ba2
-- Class B8 Notes, rated Ba3
-- Class B9 Notes, rated B2
-- Class B10 Notes, rated B3
RESIX FINANCE: Moody's Assigns Low-B Ratings to Four Note Classes
-----------------------------------------------------------------
Moody's Investors Service has assigned ratings ranging from Ba2 to
B3 to securities issued by RESIX Finance Limited Credit-Linked
Notes, Series 2005-D.
The credit-linked notes replicate the cash flow of synthetic RMBS
securities issued with respect to the Class B7 to Class B10 of the
Real Estate Synthetic Investment Securities, Series 2005-D
transaction.
The complete rating actions are:
Issuer: RESIX Finance Limited
Issue: RESIX Finance Limited Credit-Linked Notes, Series 2005-D
-- Class B7 Notes, rated Ba2
-- Class B8 Notes, rated Ba3
-- Class B9 Notes, rated B2
-- Class B10 Notes, rated B3
ROMACORP INC: Robert Gary Approved as Accounting Consultant
-----------------------------------------------------------
The Honorable Barbara J. Houser of the U.S. Bankruptcy Court for
the Northern District of Texas, Dallas Division, authorized
Romacorp, Inc., and its debtor-affiliates to employ J. Robert
Gary, as their accounting consultant, nunc pro tunc to Nov. 6,
2005.
Mr. Gary will perform duties normally associated with a chief
financial officer but he will not assume the position.
In particular, Mr. Gary will:
(a) oversee the financing and accounting operations, including
monthly close process and financial statement review;
(b) prepare and review documents related to the bankruptcy
proceedings;
(c) prepare ad hoc requests related to finance and accounting
operations and bankruptcy activities; and
(d) perform other requests that may be made from time to time
by the Debtor and related constituents.
Mr. Gary disclosed that he received a $5,000 prepetition retainer.
He will bill the Debtors at $140 per hour for his services.
Mr. Gary assured the Court that he is disinterested as that term
is defined in Section 101(14) of the U.S. Bankruptcy Code.
Mr. Gary has over 25 years of finance and accounting experience
serving in senior finance, accounting and chief financial officer
capacities for publicly held and private companies ranging in size
from small organization to Fortune 500 companies.
Headquartered in Dallas, Texas, Romacorp, Inc., own and operate
the Tony Roma chain of restaurants with 22 company-owned stores,
86 domestic franchise stores and 118 international franchise
stores. The Debtor and seven of its affiliates filed for chapter
11 protection on November 6, 2005 (Bankr. N.D. Tex. Case No. 05-
86818). Peter S. Goodman, Esq., Jason S. Brookner, Esq., Monica
S. Blacker, Esq., and Matthew D. Wilcox, Esq., at Andrews Kurth
LLP represent the Debtors in their restructuring efforts. When
the Debtors filed for protection from their creditors, they listed
$20,769,000 in total assets and $76,309,000 in total debts.
ROUTE 9A REALTY: Case Summary & 4 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Route 9A Realty Corporation
867 Saw Mill River Road
Ardsley, New York 10502
Bankruptcy Case No.: 05-27053
Chapter 11 Petition Date: December 23, 2005
Court: Southern District of New York (White Plains)
Judge: Adlai S. Hardin Jr.
Debtor's Counsel: Frank S. Occhipinti, Esq.
Stewart Occhipinti, LLP
65 West 36th Street, 7th Floor
New York, NY 10018
Tel: (212) 239-5500
Total Assets: $2,000,504
Total Debts: $523,889
Debtor's 4 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Architectura, Inc. $224,400
935 River Road, Suite 100
Edgewater, NJ 07020
The Vincent Delorio Law Firm $38,289
2975 Westchester Avenue, Suite 207
Purchase, NY 10577
M. Falak $10,000
c/o Portland Merchandise Cor.
350 West 31st Street, 4th Fl.
New York, NY 10001
Tellier Surveyors $1,200
c/o Charles Shaw
Edwards & Caldwell
1600 Route 208
Hawthorne, NJ 07502
SAINT VINCENTS: Parties Oppose Open-Ended Lease Decision Extension
------------------------------------------------------------------
As reported in the Troubled Company Reporter on Dec. 7, 2005,
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates asked the U.S. Bankruptcy Court for the Southern
District of New York to extend the period within which they can
assume, assume or assign or reject unexpired non-residential real
property leases until the date an order is entered confirming a
plan of reorganization in their chapter 11 cases. The Debtors
were party to 50 Leases as of their bankruptcy petition date.
Objections
(A) RJ Archer
RJ Archer Realty LLC is the owner of a realty located at 147-18
Archer Avenue, Jamaica, New York. The Debtors operate a non-
residential methadone treatment center at the property pursuant
to a Lease Agreement, dated June 1, 1987, as amended. The Lease
expires by its terms on May 31, 2006.
RJ Archer objects to the Debtors' request for an extension of
their deadline to assume or reject unexpired leases through the
date of the confirmation of a plan of reorganization.
According to Lisa M. Golden, Esq., at Jaspan Schlensinger Hoffman
LLP, in Garden City, New York, the "very lengthy extension" will
create uncertainty for all of the Debtors' landlords, including
RJ Archer, with respect to the occupancy of their premises.
The Debtors' extension request subverts the intent of the
provisions of the Bankruptcy Code designed to protect landlord,
Ms. Golden asserts. Granting the extension to the Confirmation
Date would unduly delay the time for the Debtors to decide if
they are going to assume or reject the Lease.
She says that a fair balance of the needs of the Debtors and RJ
Archer would occur if the Court granted the Debtors only a
modest, additional extension of no more than four months, and
allow the Debtors' to reserve the right to seek further
extensions, while reserving the Debtors' landlords concomitant
right to object to any further extension sought. The Debtors
would remain obligated to continue payment of postpetition rent
and other obligations under the Lease during this period.
RJ Archer asks the Court to:
(a) deny the Debtors' request and permit an additional
extension of not more than four months; and
(b) require the Debtors to observe all continuous operation
provisions of their leases during any extension period.
(B) Primary Care
Under a "lease-leaseback transaction," the Debtors leased the
St. Dominic Family Health Center in Jamaica, New York, to the
Dormitory Authority of the State of New York, which subsequently
leased the property to New York City. The City then subleased
the property to Primary Care Development Corporation.
Alan M. Feld, Esq., at Manatt, Phelps & Phillips, LLP, in Los
Angeles, California, relates that the Operating Lease requires
the Debtors to provide monthly payments to Primary Care for
$47,244. The next payment is due on January 1, 2006.
Primary Care's consent to the Debtors' extension request is
contingent on these requirements and their incorporation in the
Court's order:
(a) The Debtors' agreement to comply with the Operating Lease
including the timely payment to Primary Care of all
required rent and other amounts due under the Operating
Lease through the effectiveness of the assumption or
rejection of the Operating Lease pursuant to the entry of
a final order either:
-- confirming a plan of reorganization; or
-- authorizing the assumption or rejection of the
Operating Lease;
(b) The Debtors' agreement to continue to honor their earlier
agreement to:
-- provide at least 60 days' notice to Primary Care in
advance of the effectiveness of any assumption or
rejection of the Operating Lease; and
-- use best efforts to provide Primary Care well in excess
of 60 days' notice in a manner that will permit any
necessary transition to occur in a responsible fashion
in view of patient care needs and in full compliance
with applicable law;
(c) In the event of an existing or future default under the
Operating Lease, the Debtors agree to permit Primary Care
to draw down the Security Deposit as necessary to cure any
defaults under the Operating Lease in accordance with the
Operating Lease, without further Court order or the
necessity to take any other action; and
(d) The Debtors' agreement to:
-- keep Primary Care fully and currently informed of all
efforts and processes to market the St. Dominic
Facility; and
-- actively engage and involve Primary Care in all efforts
and processes to market the St. Dominic Facility in a
manner that allows Primary care to (i) ensure the
fitness of a proposed purchaser of the Debtors'
interests in the St. Dominic Facility, (ii) ensure the
continuity of patient care at the St. Dominic Facility,
and (iii) ensure that the relevant community is not
left underserved with respect to healthcare and medical
services.
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. 17; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
SAINT VINCENTS: Hires Alvarez & Marsal as Crisis Managers
---------------------------------------------------------
As reported in the Troubled Company Reporter on Nov. 29, 2005,
1199SEIU United Healthcare Workers East objected to the proposed
terms of compensation provided in Saint Vincents Catholic Medical
Centers of New York and its debtor-affiliates' employment of
Alvarez and Marsal, LLC. The Debtors hired Alvarez & Marsal as
their crisis managers.
The parties' retention agreement provides for, among other things,
the appointment of Guy Sansone as the Debtors' interim chief
executive officer and chief restructuring officer and Martin
McGahan as the Debtors' interim chief financial officer.
In addition to Mr. Sansone's and Mr. McGahan's services, and
pursuant to an agreement with SVCMC, Alvarez & Marsal will also
provide temporary staff, as required. The Temporary Staff will
supplement where gaps exist in the Debtors' current staffing, not
to replace existing professionals or duplicate the work performed.
Debtors Respond to Healthcare Workers
John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that the Debtors decided to engage in a process to
search for a CEO and CRO after consultation with various external
parties, including the United States Trustee for Region 2 and the
Official Committee of Unsecured Creditors.
Mr. Rapisardi tells the Court that a representative from United
Healthcare Workers East serving as a member of the CEO and CRO
search committee, as well the two law firms representing the
United Healthcare Workers East, were present during all parts of
the CEO and CRO selection process, including:
(a) the meeting to discuss potential candidates;
(b) the initial interviews of candidates;
(c) the final round interviews of the two finalist candidates;
and
(d) the final vote of the Search Committee to select Mr.
Sansone as the Debtors' CEO and CRO.
Mr. Rapisardi asserts that the 1199 Fund voted to support Alvarez
& Marsal, LLC, over the other final candidate firm, after both
firms indicated the fees, including the incentive fees that would
be requested.
The employment of crisis managers in bankruptcy cases in the
Southern District of New York is governed by a protocol, which
provides that in any Chapter 11 cases, a multi-faceted
restructuring advisory firm like Alvarez & Marsal can only be
engaged in one of numerous potential capacities, including:
(i) crisis manager retained under Section 363 of the
Bankruptcy Code;
(ii) financial advisor retained under Section 327;
(iii) claims agent/claims administrator appointed pursuant to
Section 156(c) of the Judicial Procedures Code and any
applicable local rules; or
(iv) investor/acquiror.
The Protocol requires that any retention involving the furnishing
of interim executive officers will be sought under Section
363(b).
The Debtors seek approval of Alvarez & Marsal's engagement
pursuant to Section 363(b).
Mr. Rapisardi tells the Court that the terms of compensation for
Alvarez & Marsal are reasonable and have been approved by the
Creditors' Committee. Moreover, Alvarez & Marsal will file
quarterly compensation reports detailing its monthly fees and
expenses, and all parties-in-interest, including the United
Healthcare Workers East, will have an opportunity to object to
the payment of the fees and expenses and, if necessary, have the
Court determine whether to approve the fees and expenses. The
proposed Incentive Fee is subject to final review at the end of
the Chapter 11 cases under a standard of "reasonableness," as
required by the Protocol.
Mr. Rapisardi says that there will be ample opportunity for all
parties to review Alvarez & Marsal's fees and expenses, including
the Incentive Fee, before the Court awards the fees.
Court Approves A&M Employment
The Court approves the Debtors' request on a final basis.
Alvarez & Marsal's Incentive Fee will be calculated as:
(1) the sum of $2,000,000, on the effective date of a
confirmed Chapter 11 plan in the Debtors' cases that is
supported by their board of directors and the Creditors'
Committee;
(2) the sum of $500,000, on the achievement of performance
objectives to be established by the Board, provided,
however, that the objectives will not be based on the
gross revenues or net income of the Debtors and that the
objectives will remain subject to further approval by the
Department of Health under 10 NYCRR Section 600.9(d).
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. 17; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
SAINT VINCENTS: Inks Pact Resolving Dispute with New York Nurses
----------------------------------------------------------------
As previously reported in the Troubled Company Reporter, Saint
Vincents Catholic Medical Centers of New York asked the U.S.
Bankruptcy Court for the Southern District of New York to deny the
New York State Nurses Association's demand for payment of
prepetition pension and benefit claims.
The Nurses' Association had asked for the payment of retroactive
pay increase commencing Nov. 1, 2004, pursuant to a Memorandum
Agreement signed on June 18, 2005. The Agreement provides the
Base Compensation Rates for nurses who are members of the
Association and working at the Debtors' hospitals.
The Nurses' Association estimated that approximately $507,752 is
due for this retroactive prepetition pay raise and $60,000 for the
one-month postpetition wage increase, exclusive of the employers'
contribution to the Federal Insurance Contributions Act. On a per
nurse basis, this amount comes between $1,000 and $2,000 on the
prepetition raise. The Debtors claimed that only $480,000 is due
to the nurses.
The Debtor's counsel, Stephen B. Selbst, Esq., at McDermott Will &
Emery LLP, argued that by seeking authorization to pay certain
prepetition wages, the Debtors sought to achieve the dual goals of
maintaining financial stability for their employees and not
disrupting their operations or further straining their financial
position.
He recounted that the Debtors agreed with the New York State
Nurses Association to pay its members at the increased rate
specified in a Memorandum of Agreement as of the payroll cycles
commencing July 31, 2005, and August 7, 2005, for Bayley-Seton
and Staten Island Hospitals.
Parties Settle Disputes
The parties sought and obtained Court approval of an agreement to
resolve their disputes.
The Debtors agree to pay members of the Association at the
increased rate specified in the June 18, 2005 Memorandum of
Agreement as of payroll cycles commencing July 31, 2005, and
August 7, 2005, for Bayley-Seton and Staten Island Hospitals.
The Debtors will become current for all unpaid postpetition
amounts accrued at the increased rate commencing at the
completion of the first payroll cycle following the earlier
of 10 days after:
(a) the entry of an order approving the GE Capital DIP
Facility; or
(b) November 15, 2005.
The Debtors will pay the amount due for the prepetition wage
increase for the period from November 1, 2004, through the
Petition Date via payment of six monthly installments commencing
at the completion of the first payroll cycle following the
earlier of:
(i) entry of an order approving the GE Capital DIP Facility;
or
(ii) January 1, 2006.
The Court also directs SVCMC to remit to the New York State
Nurses Association Benefit Fund and the New York Nurses
Association Benefit Fund all trust funds taken from the salaries
of part-time nurses for benefits for the month of June 2005.
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. 17; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
SEARS HOLDINGS: Realigns Merchandising Divisions
------------------------------------------------
Sears Holdings Corporation (Nasdaq: SHLD) reported a realignment
of its merchandising divisions as part of the company's continuing
effort to increase the efficiency and effectiveness of its
business.
Effective immediately, the Sears, Roebuck and Kmart merchandising
organizations will be centralized under the following executives,
who will report to the Chairman of the Board, Edward S. Lampert,
until a Chief Merchant for Sears Holdings is appointed.
Dan Laughlin, currently senior vice president/GMM, Home for Sears,
Roebuck has been named senior vice president, merchandising for
Sears Holdings. Laughlin will lead the Hardlines businesses
across all of Sears Holdings and will oversee merchandising for
Sears, Roebuck.
Peter Whitsett, senior vice president and Kmart merchandising
officer, will lead the General Merchandising businesses across all
of Sears Holdings and will continue to oversee merchandising for
Kmart.
"By centralizing our merchandising teams under these two talented
and experienced merchants, we are able to create a structure that
capitalizes on the strength of this combined organization. It
allows us to better focus on providing our customers with quality
services, products and solutions," said Mr. Lampert. "By building
and aligning these teams, we'll take a more integrated approach to
how we interact with our customers and how we go to market."
Sears Holdings also announced that Roger Detter, senior vice
president/GMM, Hardlines for Sears, Roebuck will retire from the
company at the end of the month.
Mr. Lampert stated, "I'd like to thank Roger for his commitment,
his drive for excellence and for his focus on customers during his
33 years with Sears. I wish Roger and his family all the best in
this next chapter of their lives."
The company also confirmed that Gwen Manto, executive vice
president/GMM, Softlines for Sears Roebuck, has left the company
to pursue other interests. Sears Holdings is currently conducting
a search for senior leadership for the company's apparel
businesses. In the interim, the apparel businesses of Sears and
Kmart will report to Laughlin and Whitsett, respectively.
Sears Holdings Corporation -- http://www.searshc.com/-- is the
nation's third largest broadline retailer, with approximately
$55 billion in annual revenues, and with approximately 3,800
full-line and specialty retail stores in the United States and
Canada. Sears Holdings is the leading home appliance retailer as
well as a leader in tools, lawn and garden, home electronics and
automotive repair and maintenance. Key proprietary brands include
Kenmore, Craftsman and DieHard, and a broad apparel offering,
including such well-known labels as Lands' End, Jaclyn Smith and
Joe Boxer, as well as the Apostrophe and Covington brands. It
also has Martha Stewart Everyday products, which are offered
exclusively in the U.S. by Kmart and in Canada by Sears Canada.
(Kmart Bankruptcy News, Issue No. 105; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on March 31, 2005,
Moody's Investors Service affirmed the Ba1 senior implied rating
of Sears Holding Corporation. Moody's said the rating outlook is
stable.
Ratings assigned:
Sears Holdings Corporation
* Senior implied rating at Ba1;
* Senior unsecured issuer rating at Ba1; and
* $4 billion senior secured revolving credit facility
at Baa3.
As reported in the Troubled Company Reporter on March 30, 2005,
Fitch Ratings assigned a 'BB' rating to Sears Holdings senior
unsecured debt, with a negative outlook.
SMART HOME: Moody's Places Ba1 Rating on Class B1 Securities
------------------------------------------------------------
Moody's Investors Service has assigned ratings from Aa2 to Ba1 to
securities issued by SMART HOME Reinsurance 2005-2 Limited and
SMART HOME Credit 2005-2 LLC (SMART HOME 2005-2).
Smart Home 2005-2 is a synthetic securitization of mortgage
insurance risk associated with a reference portfolio of
approximately $6.27 billion of non-prime and Alt-A mortgage loans.
The mortgage insurance is provided by Radian Guaranty Inc. The
expected performance of the loans in the reference portfolio,
estimated in a range of economic environments, and adjusted for
the loss absorption rates of mortgage insurance, drive the
ratings. Credit enhancement for the securities is provided
primarily through subordination.
The bulk of the loans constituting the reference pool were
originated by:
* Ameriquest Mortgage Corp. (49%),
* Flagstar Bank (7%),
* Option One Mortgage Corp. (7%),
* Wells Fargo Bank, N.A. (3%),
* Homecomings Financial (3%), and
* Citigroup (3%).
The portfolio is static as in most home equity securitizations.
Through a reinsurance agreement with the securities issuers,
Radian pays a fee for the assumption of a portion of the mortgage
insurance risk.
Investors are exposed to risk from the mortgage insurance and have
an interest in the holdings of the issuer, which include highly
rated investments, and fee collections on the reinsurance
agreement.
The complete rating actions are as follows:
Co-Issuer: SMART HOME Reinsurance 2005-2 Limited
Co-Issuer: SMART HOME Credit 2005-2 LLC
Issue: Synthetic Mortgage Notes due on November 2012
-- Class M2, rated Aa2
-- Class M3, rated Aa3
-- Class M4, rated A1
-- Class M5, rated A1
-- Class M6, rated A3
-- Class M7, rated Baa1
-- Class M8, rated Baa2
-- Class M9, rated Baa3
-- Class B1, rated Ba1
SMURFIT-STONE: Loan Amendment Cues S&P to Withdraw Ratings
----------------------------------------------------------
Standard & Poor's Ratings Services removed its ratings, including
its 'B' corporate credit rating, on containerboard manufacturer
Smurfit-Stone Container Corp. and its subsidiaries from
CreditWatch, where they had been placed with negative implications
on Aug. 16, 2005. The removal followed completion of the
company's amendment to its bank credit agreement to loosen
financial covenants. All ratings were affirmed. The outlook is
stable.
The ratings on Chicago, Illinois-based Smurfit-Stone were
originally placed on CreditWatch in connection with weak financial
results and concerns about the company's planned strategic review.
The credit agreement amendment revises the senior secured leverage
and interest coverage ratios through the third quarter of 2007.
Although the company should be able to comply with these new
covenants in the near term, they progressively tighten over the
next two years, which could become a concern if the company's
strategic initiatives are not successful, or if market conditions
worsen. Debt, including off-balance-sheet lease and accounts
receivable financing and debt-like pension and other
postretirement obligations, was $6 billion at Sept. 30, 2005.
"Smurfit-Stone's credit measures will likely remain weaker than
expected for the ratings over the next year or so because of cost
pressures and restructuring outlays," said Standard & Poor's
credit analyst Pamela Rice. "However, actions by the company and
other producers should help improve industry fundamentals over the
intermediate term and allow the company to gradually improve its
financial profile. Ratings could come under pressure if free cash
flow does not begin to turn positive at least by the beginning of
2007 or if the company is in danger of violating financial
covenants. Although the company's business position would support
higher ratings, a positive outlook is unlikely unless the company
can permanently reduce its onerous debt burden."
"We expect that Smurfit-Stone's heavy debt burden will increase
over the next two years while the company faces meaningful risks
in executing its broad strategic agenda," Ms. Rice said.
"Although we believe the company should benefit from these
initiatives over the intermediate term, and there is the potential
for debt reduction from asset sales, the strain on Smurfit-Stone's
highly leveraged financial profile from the incremental spending
necessary to carry out these restructuring actions leaves little
room for unforeseen difficulties, such as an economic slowdown,
operational inefficiencies, or potential customer turnover."
Smurfit-Stone is the world's largest producer of containerboard
and corrugated containers, manufactures other paper-based consumer
packaging, and is engaged in paper recycling.
STELCO INC: Ernst & Young Files 44th Monitor's Report
-----------------------------------------------------
Ernst & Young Inc., the Monitor appointed in Stelco Inc.'s
(TSX:STE) Court-supervised restructuring, filed its Forty-Fourth
Report of the Monitor.
Certain portions of the Report have been redacted due to the
confidential nature of the information. An appropriate court
order will be sought to seal the full version of the Report in due
course.
The Report deals primarily with these matters:
Sanction Hearing Recommendation
The Monitor states its view that the restructuring plan approved
by affected creditors on Dec. 9, 2005, is fair and reasonable.
The Monitor recommends that the Court sanction the plan at the
hearing scheduled for Jan. 17, 2006. In support of this
recommendation the Monitor indicates its belief that Stelco has
satisfied the requirements imposed on it regarding the meetings of
affected creditors held in November and December, including the
requirements under the CCAA and all Court Orders made during the
restructuring process. The Monitor also states the view that the
plan approved on Dec. 9, 2005, represents a fair and reasonable
compromise among stakeholder groups and is fair and reasonable in
terms of its effect on the affected creditors.
Plan Fairness & Implications
The Monitor reviews the elements of the plan approved by affected
creditors on Dec. 9, 2005, describing the plan as the embodiment
of a point of consensus among key stakeholder groups. The Monitor
states that, given the intensity of the negotiations towards an
agreement, it does not appear that an agreement would have been
reached had it been necessary to provide material consideration to
flow to the existing shareholders. The Monitor notes that the
existing shareholders rank behind the creditors of Stelco in terms
of legal priority.
The Report observes that without an agreement such as is embodied
in the plan approved, it is unlikely that Stelco would be able to
emerge as a viable entity. The Report notes that, under a
realization in the absence of an approved plan, the unsecured
creditors would receive approximately 13 to 28 cents on the dollar
on the amount of their claims.
Enterprise Value Analysis &
Impact on Recovery
The Report notes that the Monitor has obtained an independent
estimate of the enterprise value of Stelco. This analysis,
prepared by the Valuation Group of Ernst & Young Orenda Corporate
Finance Inc. is provided as Appendix H to the Report. The Monitor
notes that the EYO analysis estimates the enterprise level, fair
market value of Stelco's integrated steel business at Jan. 1,
2006, to be between $635 million and $785 million. The Monitor
adds that the EYO findings are unlikely to change substantially by
the end of February, 2006, the time at which Stelco is currently
expected to emerge from the CCAA process, subject to the Court's
approval of the restructuring plan.
The Monitor notes that, based on the EYO analysis, the enterprise
value of Stelco's integrated steel business is not sufficient to
satisfy in full all of Stelco's liabilities on emerging from the
CCAA process including the claims of affected creditors. As a
result, the Report notes that the estimated enterprise value is
insufficient to provide value for existing shareholders.
The Monitor notes, as set out in Schedule 1 to the EYO analysis,
that Stelco is forecasting that its new asset based loan facility
will be drawn in the amount of $380 million on exiting from CCAA
after receipt of net proceeds from the Province of Ontario Note
and from the asset sale process, and after payment of $400 million
to the pension plans. The Monitor also notes that, as is also
found in Schedule 1 to the EYO analysis, Stelco's outstanding
interest bearing debt and stayed debt obligations exceed the EYO
estimate of enterprise value by between $257 million and
$407 million.
In light of these considerations, and based on the EYO estimate of
value, the Monitor concludes that the affected creditors will not
receive a full recovery on their claims. As a result, and having
regard to legal priorities, the Monitor expresses the view that
the plan approved by affected creditors is not unfair or
unreasonable to the existing shareholders. The Monitor goes on to
express the view that any plan which did provide for a recovery to
existing shareholders in these circumstances would likely not be
viewed as fair, reasonable or acceptable to the affected
creditors.
Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified
steel producer. Stelco is involved in all major segments of the
steel industry through its integrated steel business, mini-mills,
and manufactured products businesses.
In early 2004, after a thorough financial and strategic review,
Stelco concluded that it faced a serious viability issue. The
Corporation incurred significant operating and cash losses in 2003
and believed that it would have exhausted available sources of
liquidity before the end of 2004 if it did not obtain legal
protection and other benefits provided by a Court-supervised
restructuring process. Accordingly, on Jan. 29, 2004, Stelco and
certain related entities filed for protection under the Companies'
Creditors Arrangement Act.
The Court extended the stay period under Stelco's Court-supervised
restructuring from Dec. 12, 2005, until Jan. 31, 2006.
SYNDICATED FOOD: U.S. Trustee Will Meet Creditors on February 6
---------------------------------------------------------------
The United States Trustee for Region 10 will convene a meeting of
Syndicated Food Service International's creditors at 9:30 a.m. on
Feb. 6, 2006, at Room 416B, U.S. Courthouse in Indianapolis. This
is the first meeting of creditors required under 11 U.S.C. Sec.
341(a) in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Front Royal, Virginia, Syndicated Food Service
International, Inc., is a holding company with three operating
subsidiaries that participate in the wholesale food service
distribution industry. The company filed for chapter 11
protection on Dec. 14, 2005 (Bankr. S.D. Ind. Case No. 05-33375).
When the Debtor filed for protection from its creditors, it listed
$9,908,084 in total assets and $11,182,726 in total debts.
SYNDICATED FOOD: Taps Hostetler & Kowalik as Bankruptcy Counsel
---------------------------------------------------------------
Syndicated Food Service International asks the U.S. Bankruptcy
Court for the Southern District of Indiana, Indianapolis Division,
for authority to employ Hostetler & Kowalik, P.C., as its chapter
11 counsel.
Hostetler & Kowalik is expected to:
a) give the Debtor legal advice with respect to its powers and
duties as debtor-in-possession in the continued management
of its property;
b) take necessary action to avoid the attachment of any lien
against the Debtor's property threatened by secured
creditors holding liens;
c) prepare on behalf of the Debtor all necessary petitions,
answers, orders, reports, and other legal papers; and
d) perform all other legal services necessary in the Debtor's
case.
David R. Krebs, Esq., at Hostetler & Kowalik discloses that the
firm received a $23,961 retainer.
The firm will bill the Debtor for its professionals' services at
an initial rate of $250 per hour.
To the best of the Debtor's knowledge, Hostetler & Kowalik is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Front Royal, Virginia, Syndicated Food Service
International, Inc., is a holding company with three operating
subsidiaries that participate in the wholesale food service
distribution industry. The company filed for chapter 11
protection on Dec. 14, 2005 (Bankr. S.D. Ind. Case No. 05-33375).
When the Debtor filed for protection from its creditors, it listed
$9,908,084 in total assets and $11,182,726 in total debts.
TABERNA PREFERRED: Fitch Rates $24.4M Class E Secured Notes at BB+
------------------------------------------------------------------
Fitch Ratings assigns these ratings to Taberna Preferred Funding
IV Ltd./Inc.:
-- $313,350,000 class A-1 first-priority delayed draw senior
secured floating-rate notes due 2036 'AAA';
-- $50,000,000 class A-2 second-priority senior secured
floating-rate notes due 2036 'AAA';
-- $20,000,000 class A-3 third-priority senior secured
floating-rate notes due 2036 'AAA';
-- $81,450,000 class B-1 fourth-priority senior secured
floating-rate notes due 2036 'AA';
-- $7,000,000 class B-2 fourth-priority senior secured
fixed-rate notes due 2036 'AA';
-- $45,000,000 class C-1 deferrable fifth-priority secured
floating-rate notes due 2036 'A';
-- $20,000,000 class C-2 deferrable fifth-priority secured
fixed/floating-rate notes due 2036 'A';
-- $35,000,000 class C-3 deferrable fifth-priority secured
fixed/floating-rate notes due 2036 'A';
-- $21,000,000 class D-1 deferrable mezzanine secured
floating-rate notes due 2036 'BBB';
-- $13,000,000 class D-2 deferrable mezzanine secured
fixed-rate notes due 2036 'BBB';
-- $24,375,000 class E deferrable subordinate secured
floating-rate notes due 2036 'BB+'.
The ratings of the class A-1, A-2, and A-3 notes, class B-1, and
B-2 notes address the likelihood that investors will receive full
and timely payments of interest, as per the governing documents,
as well as the stated balance of principal by the legal final
maturity date. The ratings of the class C-1, C-2, and C-3 notes,
class D-1, and D-2 notes and class E notes address the likelihood
that investors will receive ultimate and compensating interest
payments, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date. The class
A-1 notes will be delayed-draw whereby approximately 43.56% of
these notes will be issued at closing. The class A-2 notes will
be auction-rate notes that will be auctioned on a monthly basis.
Class A-2 noteholders will receive a maximum spread of 100 bps
over three-month LIBOR. Periodic payments on the notes will be
paid quarterly starting in May 2006.
The notes are supported by the cash flows of a static portfolio
consisting of trust-preferred securities and subordinated debt
issued by subsidiaries of real estate investment trusts, real
estate operating companies, homebuilders, and specialty finance
companies, as well as senior REIT debt securities and commercial
mortgage-backed securities. Of the total portfolio, approximately
90% are trust-preferred securities and subordinated debt,
approximately 7% are senior REIT debt securities, and 3% are CMBS.
The collateral was selected and is monitored by Taberna Capital
Management, LLC, which is a wholly owned subsidiary of Taberna
Realty Finance Trust. Cohen Brothers, LLC formed Taberna Capital
on Aug. 28, 2003 and has since contributed ownership of Taberna
Capital to Taberna Realty Finance Trust, a newly formed REIT.
Taberna Capital has the ability to sell defaulted and credit-risk
securities if the issuer of such security has defaulted in payment
of principal and/or interest on another of its obligations senior
or pari passu to such security. The portfolio is approximately
65% ramped at closing with a 120-day ramp-up period.
The ratings are based on the capital structure of the transaction,
the quality of the collateral, and the overcollateralization and
interest coverage provided for within the indenture. The four OC
tests and four IC tests serve to trap cash to bring the test back
into compliance any time a test is failing. Cash trapped through
any OC or IC test failure will be used to pay down the most senior
notes outstanding sequentially.
As part of the rating process for this transaction, Fitch stressed
the underlying asset portfolio with a variety of default rates,
timing scenarios, and interest-rate scenarios, designed to
simulate varying economic conditions. This included modeling the
cash flows under middle-, front-, and back-loaded default stress
scenarios. The majority of the trust-preferred securities
included in the Taberna IV portfolio are unrated. Fitch used a
hybrid approach to analyze the portfolio. This analysis included
a combination of trust-preferred criteria used by Fitch's
Financial Institutions and Insurance groups and Fitch's VECTOR
model analytics.
For further details on the stress tests and other structural
features of TABERNA IV, including a turbo feature, an interest
reserve account, and an auction call, see the presale report,
available on the Fitch Ratings Web site at
http://www.fitchresearch.com/
The placement agent for this transaction is Merrill Lynch, Pierce,
Fenner & Smith Incorporated.
For more information on Fitch's approach to rating equity and
mortgage REITs and CDOs of trust-preferred securities, see the
criteria reports, 'Rating REITs - Same Foundation, Different
Playing Field,' dated Oct. 25, 1999, 'Mortgage REIT Rating
Criteria,' dated Dec. 16, 2004, and 'Rating Criteria for U.S. Bank
and Insurance Trust Preferred CDOs,' dated Feb. 2, 2005, available
at http://www.fitchratings.com/
TAUBMAN CENTERS: S&P Affirms B+ Rating on $300MM Preferred Stock
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating assigned to Taubman Centers Inc. Additionally, all
other Taubman-related ratings are affirmed, including the 'B+'
preferred stock rating affecting $300 million in preferred stock.
The outlook is stable.
"The ratings acknowledge the quality of Taubman's portfolio, which
is one of the most productive in the U.S. with tenant sales
approaching $500 per sq. ft. The ratings also reflect improved
operating performance, driven in part by Taubman's renewed focus
on repositioning underperforming properties and improving
occupancy levels," explained Standard & Poor's credit analyst
Linda Phelps. "These strengths are tempered by the company's more
aggressive capital structure, which has higher leverage levels and
less financial flexibility relative to unsecured issuers, along
with the possibility of a meaningful investment into new markets
abroad."
Taubman has made good progress toward repositioning and
stabilizing several underperforming assets over the past year.
Rising occupancy rates and steady performance from seasoned
properties have resulted in solid operating performance.
S&P will look for continued progress on the remaining
underperforming properties and upcoming development projects,
particularly the outcome of the company's substantial investment
in the Oyster Bay development, to drive upward ratings momentum.
Though the structure and scope of a possible international
investment are currently unknown, Taubman's entry into new markets
abroad may involve greater development and operating risk, as well
as higher debt levels. As a result, a more aggressive than
anticipated international foray would put downward pressure on
current ratings.
TEC FOODS: Files Schedules of Assets and Liabilities
----------------------------------------------------
TEC Foods, Inc., delivered its Schedules of Assets and Liabilities
to the U.S. Bankruptcy Court for the Eastern District of Michigan,
disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $2,155,000
B. Personal Property $9,578,460
C. Property Claimed
as Exempt
D. Creditors Holding $5,146,123
Secured Claims
E. Creditors Holding $1,962
Unsecured Priority Claims
F. Creditors Holding $19,749,414
Unsecured Nonpriority
Claims
----------- -----------
Total $11,733,460 $24,887,499
Headquartered in Pontiac, Michigan, TEC Foods, Inc., filed for
chapter 11 protection on Nov. 3, 2005 (Bankr. E.D. Mich. case No.
05-89154). Paula A. Hall, Esq., at Butzel Long, P.C., represents
the Debtor in its restructuring efforts. When the Debtor filed
for protection form its creditors, it estimated assets between $10
million to $50 million and debts between $10 million to $50
million.
TOMMY HILFIGER: Apax Merger Cues S&P's Negative Watch Listing
-------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on Tommy
Hilfiger USA Inc., including its 'BB-' corporate credit rating,
remain on CreditWatch with negative implications, where they were
placed on Nov. 3, 2004.
The men's and women's sportswear, jeanswear, and childrenswear
company had about $343 million in long-term debt outstanding as of
June 30, 2005.
The ratings remain on CreditWatch following the company's
announcement that it has agreed to be acquired by Apax Partners
for about $1.6 billion. The transaction is expected to close in
spring 2006 and is subject to shareholder approval, the successful
completion by the company of cash tender offers/consent
solicitations for the outstanding 6.85% notes due 2008 and 9%
senior bonds due 2031, delivery of committed financing, as well as
regulatory approval. Although the financing plans for this
transaction were not disclosed, Standard & Poor's expects a
significant portion would be debt financed.
In addition, the operating challenges in invigorating the Tommy
Hilfiger brand and the ability to reverse the company's negative
operating trends in recent periods are concerns. Other concerns
include the open tax issues with the Hong Kong tax authorities and
the shareholder lawsuits.
Standard & Poor's will continue to closely monitor developments as
they occur. Resolution of the CreditWatch will depend on the
outcome of the above open issues and our review of the company's
business and financial strategies following the acquisition.
TW INC: Committee Wants GBO's $137 Million Claim Tagged as Equity
-----------------------------------------------------------------
The Post-Confirmation Committee of TW, Inc., fka Cablevision
Electronics Investments, Inc., objects to the $137,383,894 claim
asserted by GBO Electronics Acquisition, LLC.
TW and Cablevision's Relationship
TW Inc. was operating under the brand name "The Wiz," an indirect,
wholly owned subsidiary of Cablevision Systems Corporation. Upon
its acquisition by Cablevision Systems in 1998, The Whiz was
undercapitalized. A lending arrangement, under a Demand
Promissory Note, was forged between CEI and Cablevision to provide
the former with capital infusions in order to pay debts as they
become due. The prepetition advances and intercompany charges and
allocations reached approximately $137 million.
GBO's Claim
GBO Electronics relates that in March 2003, it purchased the
purported $137 million claim from Cablevision Systems Corporation.
At the same time, CSC Holdings Inc. transferred to GBO 100% of its
equity interest in Cablevision Electronics, and paid GBO $1.3
million to induce it to enter into the acquisition.
The Committee challenges GBO Electronics' claim and seeks to
recharacterize the claim as equity because all advances from
Cablevision Systems to Cablevision Electronics constituted capital
contributions, not legitimate debt. If the GBO claim is not
recharacterized as equity, the Committee wants the claim
subordinated to the claims of all the other creditors or as a last
resort, disallowed.
The U.S. Bankruptcy Court for the District of Delaware will
convene a hearing on Jan. 12, 2006, at 9:30 a.m. to consider the
Committee's requests.
The Committee is represented by:
Tobey M. Daluz, Esq.
Ballard Spahr Andrews & Ingersoll, LLP
919 North Market Street, 12th Floor
Wilmington, Delaware 19801
Phone: 302-252-4440, Fax: 302-252-4466
-- and --
Mark T. Power, Esq.
Janine M. Cerbone, Esq.
Hahn & Hessen LLP
488 Madison Avenue
New York, New York 10022
Phone: 212-478-7200, Fax: 212-478-7400
TW, Inc., filed for chapter 11 protection on March 14, 2003
(Bankr. Del. Case No. 03-10785). Jeremy W. Ryan, Esq., and Mark
Minuti, Esq., at Saul Ewing LLP, represent the Debtors. When the
Company filed for protection from its creditors, it listed assets
of over $50 million and debts of more than $100 million. The
Court confirmed the Debtor's Third Amended Plan of Liquidation on
May 27, 2005. M. Jacob Renick was appointed as Trustee of the
Creditor Litigation Trust which was formed for the purpose of
pursuing all existing causes of action against Cablevision.
UAL CORP: Appeal Process on Termination of Pension Plan Expedited
-----------------------------------------------------------------
The United Retired Pilots Benefit Protection Association and Air
Line Pilots Association took an appeal from the Hon. Eugene
Wedoff's decision approving the Pension Benefit Guaranty
Corporation's termination of the United Airline Pilots' Defined
Benefit Pension Plan to the U.S. District Court for the Northern
District of Illinois.
The appeal is assigned to Judge John Darrah.
The parties appeared before Judge Darrah on December 15, 2005.
URPBPA and ALPA argued for an expedited appeal process, and the
PBGC objected to this request. The PBGC argued that it would need
additional time to prepare its case due to the complexity of the
issues.
Judge Darrah ruled that the proceedings would be expedited and
set this schedule for the appeal:
Date Briefs to be filed
---- ------------------
December 22, 2005 Initial briefs
January 5, 2006 Opposition briefs
January 12, 2006 Reply briefs
Judge Darrah will rule on the appeal soon after the final briefs
are filed.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No. 106; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
VARIG S.A.: Brazilian Court Restores Ruben Berta's Control
----------------------------------------------------------
The Hon. Siro Darlan of the Rio de Janeiro state court, in Brazil,
reversed a court decision directing Fundacao Ruben Berta to give
up control of VARIG S.A., Bloomberg News reports.
Judge Darlan said the airline company's creditors must hold an
assembly to replace management.
Judges Luiz Ayoub, Marcia Cunha and Paulo Roberto Fragoso of
the 8th Corporate Court of the District of Rio de Janeiro had
ordered Ruben Berta to relinquish control of VARIG after the
foundation instructed VARIG to seek dismissal of the bankruptcy
proceedings because it hampered VARIG's ability to come up with
a restructuring plan.
VARIG sought dismissal of its case one day after the Brazilian
Bankruptcy Court suspended Ruben Berta's deal to sell a
controlling stake in the airline to Docas Investimentos SA for
$112,000,000.
The Brazilian Bankruptcy Court ruled that Ruben Berta lacked
authority to manage VARIG and that Marcelo Bottini, VARIG's
president, should be appointed as the administrator to manage
VARIG's businesses pursuant to Section 64 of the New Bankruptcy
Law of Brazil.
Judges' Neutrality Questioned
The three Bankruptcy Court Judges currently face allegations of
bias.
Gazeta Mercantil reports that Attorney Jose Calixto Ucha a
Ribeiro, on behalf of Breda Transportes e Turismo, asked the
Eighth District Business Court of Rio de Janeiro to remove the
Judges from VARIG's case. The lawyer alleged that the Judges
committed irregularities in anticipating positions about the
judicial reorganization process of VARIG.
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. 13; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VARIG S.A.: Tap Air Rejects Docas' $139 Million Bid to Buy Units
----------------------------------------------------------------
TAP Air Portugal rejected Docas Investimentos SA's proposal to
purchase the two units that TAP acquired from VARIG, S.A., for
$139,000,000.
TAP bought Varig Logistica S.A., and Varig Manutencao e
Engenharia for $62,000,000, in November 2005. At that time, TAP
agreed to sell the VEM maintenance and the VarigLog logistics
units under certain conditions if VARIG received a higher offer.
TAP's board of directors rejected Docas' bid because Docas has
not proven that it has the financial ability to complete the
purchase.
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. 13; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VENTURE HOLDINGS: Judge Tucker May Dismiss or Convert Case
----------------------------------------------------------
The Honorable Thomas J. Tucker of the U.S. Bankruptcy Court for
the Eastern District of Michigan, Southern Division, ordered
Venture Holdings Co. LLC to appear before the Court on Jan. 11,
2006, at 12:00 p.m.
The Debtor's plan filing period expired on Dec. 19, 2005. Venture
Holdings didn't file a plan or sought an extension of the plan-
filing deadline. Against this backdrop, the Debtor must explain
to the Court why its chapter 11 case shouldn't be dismissed or
converted to a chapter 7 liquidation proceeding.
Headquartered in Fraser, Michigan, Venture Holdings Company, LLC,
nka NM Holdings Company, LLC, and its debtor-affiliates filed for
chapter 11 protection (Bankr. E.D. Mich. Case No. 03-48939) on
March 28, 2003. Deluxe Pattern Corporation and its debtor-
affiliates filed for chapter 11 protection on May 24, 2004 (Bankr.
E.D. Mich. Case No. 04-54977). As of March 31, 2002, the Debtors
had total assets of $1,459,834,000 and total debts of
$1,382,369,000. Venture's prepetition lenders acquired Venture's
assets during the chapter 11 proceeding. John A. Simon, Esq., at
Foley & Lardner LLP represent the Debtors. John A. Karaczynski,
Esq., and Robert M. Aronson, Esq., at Akin Gump Strauss Hauer &
Feld LLP, and Joel D. Applebaum, Esq., at Clark Hill PLC represent
the Creditors' Committee.
WCI COMMUNITIES: Will Pay Valid Tenders of 10-5/8% Sr. Sub. Notes
-----------------------------------------------------------------
WCI Communities, Inc. (NYSE:WCI) will pay the total consideration,
including the consent payment, for any and all valid tenders of
its outstanding 10-5/8% Senior Subordinated Notes due 2011
received prior to 5:00 p.m. EST on Dec. 22, 2005, in its
previously announced tender offer and consent solicitation for the
Notes.
As announced by the company on Dec. 15, 2005, the total
consideration for the Notes validly tendered and accepted for
payment is $1,061.72 per $1,000 principal amount of the Notes.
The total consideration includes a consent payment of $30.00 per
$1,000 principal amount of Notes. Notes accepted for payment that
are validly tendered subsequent to the Consent Payment Deadline
but prior to 11:59 p.m. EST on Dec. 30, 2005, the previously
announced expiration time, will receive the tender offer
consideration of $1,031.72 per $1,000 principal amount of the
Notes, which is equal to the total consideration minus the consent
payment. In addition to the total consideration or the tender
offer consideration payable in respect of the Notes purchased in
the tender offer and consent solicitation, the company will pay
accrued and unpaid interest to, but not including, the applicable
payment date. The payment date for the Notes validly tendered
before the Consent Payment Deadline, and accepted for payment, is
expected to be on or about Dec. 23, 2005, subject to the
satisfaction of the conditions set forth in the company's Offer to
Purchase and Consent Solicitation dated Dec. 2, 2005.
As of 5:00 p.m., EST, on Dec. 19, 2005, the company had received
valid tenders and consents from holders of approximately
$286 million aggregate principal amount of the outstanding Notes.
As a result of the receipt of the requisite consents, the company,
the guarantors party to the indenture governing the Notes, and the
Bank of New York Trust Company, N.A., as trustee, have executed a
supplemental indenture dated as of Dec. 15, 2005, in order to
effect the proposed amendments of eliminating substantially all of
the restrictive covenants, certain events of default and other
related provisions from the indenture governing the Notes.
Although the supplemental indenture has been executed, the
amendments will not become operative unless and until validly
tendered Notes are accepted for purchase and paid for pursuant to
the tender offer. As a result of the receipt of the requisite
consents and the execution of the supplemental indenture, Notes
and related consents tendered in the tender offer may not be
withdrawn unless the tender offer is terminated by the company.
The tender offer and consent solicitation are being made solely on
the terms and conditions set forth in the company's Offer to
Purchase and Consent Solicitation dated Dec. 2, 2005 and related
Consent and Letter of Transmittal. Under no circumstances shall
this press release constitute an offer to buy or the solicitation
of an offer to sell the Notes or any other securities of the
company.
The Sole Dealer Manager for the Offer and Solicitation is:
Wachovia Securities
Tel. No.: (704) 715-8341
Toll Free No.: (866) 309-6316
The Information Agent for the Offer and Solicitation is:
Georgeson Shareholder Communications, Inc.
Tel. No.: (212) 440-9800 (collect) or
Toll Free No.: (866) 729-6814
The Depositary for the Offer and Solicitation is:
The Bank of New York Trust Company, N.A.
Tel. No.: (212) 815-5920
Copies of the offer documents and other related documents may be
obtained from the Information Agent.
WCI Communities, Inc. -- http://www.wcicommunities.com/-- named
America's Best Builder in 2004 by the National Association of Home
Builders and Builder Magazine, has been creating amenity-rich,
master-planned lifestyle communities since 1946. Florida-based
WCI caters to primary, retirement, and second-home buyers in
Florida, New York, New Jersey, Connecticut, Maryland, and
Virginia. The company offers traditional and tower home choices
with prices from the high-$100,000s to more than $10 million and
features a wide array of recreational amenities in its
communities. In addition to homebuilding, WCI generates revenues
from its Prudential Florida WCI Realty Division, its mortgage and
title businesses, and its amenities, as well as through land sales
and joint ventures. The company currently owns and controls
developable land of over 17,000 acres.
* * *
WCI Communities' 3% contingent convertible senior subordinated
notes due 2023 carry Moody's Investors Service's Ba3 rating and
Standard & Poor's B+ rating.
WELLS FARGO: Fitch Rates $2.4 Mil. Class I-B Certs. at Low-B
------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities mortgage pass-through
certificates, series 2005-18, are rated by Fitch:
-- $581,233,820 classes I-A-1, I-A-PO, I-A-R, II-A-1 through
II-A-11, and II-A-PO, 'AAA' senior certificates;
-- $10,666,000 class I-B-1 and II-B-1 'AA';
-- $3,613,000 class I-B-2 and II-B-2 'A';
-- $1,957,000 class I-B-3 and II-B-3 'BBB';
-- $1,510,000 class I-B-4 and II-B-4 'BB';
-- $901,000 class I-B-5 and II-B-5 'B'.
The 'AAA' ratings on the group I senior certificates reflect the
3.45% subordination provided by the 1.75% class I-B-1, the 0.65%
class I-B-2, the 0.35% class I-B-3, the 0.30% privately offered
class I-B-4, the 0.15% privately offered class I-B-5, and the
0.25% privately offered class I-B-6.
The 'AAA' ratings on the group II senior certificates reflect the
3.15% subordination provided by the 1.80% class II-B-1, the 0.55%
class II-B-2, the 0.30% class II-B-3, the 0.20% privately offered
class II-B-4, the 0.15% privately offered class II-B-5, and the
0.15% privately offered class II-B-6.
Fitch believes the amount of credit enhancement available will be
sufficient to cover credit losses. The ratings also reflect the
high quality of the underlying collateral, the integrity of the
legal and financial structures, and the primary servicing
capabilities of Wells Fargo Bank, N.A.
The transaction consists of two groups. The first group consists
of 638 fully amortizing, fixed interest rate, first lien mortgage
loans, with an original weighted average term to maturity of
approximately 30 years. The aggregate unpaid principal balance of
the pool is $307,328,776 as of Dec. 1, 2005 and the average
principal balance is $481,707. The weighted average original
loan-to-value ratio of the loan pool is approximately 69.84%;
0.60% of the loans have an OLTV greater than 80%. The weighted
average coupon of the mortgage loans is 5.989% and the weighted
average FICO score is 743. Cash-outs and rate/term refinance
represent 34.10% and 17.8%, respectively. The states that
represent the largest geographic concentration are California,
Virginia, and Maryland. All other states represent less than 5%
of the outstanding balance of the pool.
The second group consists of 519 fully amortizing, fixed interest
rate, first lien mortgage loans, with an original WAM of
approximately 30 years. The aggregate unpaid principal balance of
the pool is $293,763,463 as of Dec. 1, 2005 and the average
principal balance is $566,018. The weighted average OLTV of the
loan pool is approximately 73.48%; 1.8% of the loans have an OLTV
greater than 80%. The WAC of the mortgage loans is 5.976% and the
weighted average FICO score is 745. Cash-outs and rate/term
refinance represent 32.8% and 17.2%, respectively. The states
that represent the largest geographic concentration are
California, New York, Maryland, and Virginia. All other states
represent less than 5% of the outstanding balance of the pool.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
please see the press release issued May 1, 2003 entitled 'Fitch
Revises Rating Criteria in Wake of Predatory Lending Legislation,'
available on the Fitch Ratings Web site at
http://www.fitchratings.com/
All of the mortgage loans were generally originated in conformity
with underwriting standards of WFB. WFB sold the loans to Wells
Fargo Asset Securities Corporation, a special purpose corporation,
which deposited the loans into the trust. The trust issued the
certificates in exchange for the mortgage loans. WFB will act as
servicer and custodian, and Wachovia Bank, N.A. will act as
trustee. Elections will be made to treat the trust as a real
estate mortgage investment conduit for federal income tax
purposes.
WINSTAR COMMS: Williams Transfers $21,612,155 Claim to Baldwin
--------------------------------------------------------------
Williams Communications, LLC, now known as WilTel Communications,
LLC, notifies the U.S. Bankruptcy Court for the District of
Delaware that it has transferred its $21,612,155 claim against
Winstar Communications and its debtor-affiliates' estate to
Baldwin Enterprises Inc.
The Claim asserts secured and unsecured administrative priority
status. Williams Communications filed the Claim in June 2002.
Headquartered in New York, New York, Winstar Communications, Inc.,
provides broadband services to business customers. The Company
and its debtor-affiliates filed for chapter 11 protection on
April 18, 2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-
01462). The Debtors obtained the Court's approval converting their
case to a chapter 7 liquidation proceeding in January 2002.
Christine C. Shubert serves as the Debtors' chapter 7 trustee.
When the Debtors filed for bankruptcy, they listed $4,975,437,068
in total assets and $4,994,467,530 in total debts. (Winstar
Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Abraxas Petro ABP (27) 120 (4)
Accentia Biophar ABPI (8) 34 (20)
AFC Enterprises AFCE (44) 216 53
Alaska Comm Sys ALSK (9) 589 49
Alliance Imaging AIQ (43) 643 42
AMR Corp. AMR (729) 29,436 (1,882)
Atherogenics Inc. AGIX (98) 213 190
Bally Total Fitn BFT (1,463) 486 (442)
Biomarin Pharmac BMRN (65) 209 (38)
Blount International BLT (201) 427 110
CableVision System CVC (2,486) 10,204 (1,881)
CCC Information CCCG (95) 112 34
Centennial Comm CYCL (463) 1,456 85
Cenveo Inc CVO (12) 1,146 127
Choice Hotels CHH (165) 289 (34)
Cincinnati Bell CBB (672) 1,893 (10)
Clorox Co. CLX (532) 3,570 (229)
Columbia Laborat CBRX (13) 17 10
Compass Minerals CMP (83) 686 149
Crown Media HL CRWN (64) 1,250 (125)
Deluxe Corp DLX (101) 1,461 (297)
Denny's Corporation DENN (261) 498 (72)
Domino's Pizza DPZ (553) 414 3
DOV Pharmaceutic DOVP (3) 116 94
Echostar Comm DISH (785) 7,533 321
Emeritus Corp. ESC (134) 713 (62)
Empire Resorts NYNY (18) 65 (4)
Foster Wheeler FWLT (375) 1,936 (186)
Guilford Pharm GLFD (20) 136 60
Graftech International GTI (13) 1,026 283
Hollinger Int'l HLR (141) 998 (361)
I2 Technologies ITWO (144) 352 112
ICOS Corp ICOS (67) 232 141
IMAX Corp IMAX (34) 245 30
Immersion Corp. IMMR (15) 46 29
Indevus Pharma IDEV (115) 113 79
Intermune Inc. ITMN (30) 194 109
Investools Inc. IED (20) 64 (46)
Kulicke & Soffa KLIC (32) 386 186
Ligand Pharm LGND (96) 306 (99)
Lodgenet Entertainment LNET (69) 283 22
Maxxam Inc. MXM (681) 1,024 103
Maytag Corp. MYG (95) 2,989 371
McDermott Int'l MDR (53) 1,627 244
McMoran Exploration MMR (61) 407 118
NPS Pharm Inc. NPSP (55) 354 258
Owens Corning OWENQ (8,443) 8,142 976
ON Semiconductor ONNN (317) 1,171 300
Qwest Communication Q (2,716) 23,727 822
Revlon Inc. REV (1,169) 980 86
Riviera Holdings RIV (28) 221 6
Rural/Metro Corp. RURL (93) 315 56
Rural Cellular RCCC (460) 1,367 46
SBA Comm. Corp. SBAC (47) 886 25
Sepracor Inc. SEPR (213) 1,193 703
St. John Knits Inc. SJKI (52) 213 80
Tiger Telematics TGTL (66) 31 (76)
Tivo Inc. TIVO (9) 163 36
US Unwired Inc. UNWR (76) 414 56
Unigene Labs Inc. UGNE (15) 14 (9)
Unisys Corp UIS (141) 3,888 318
Vector Group Ltd. VGR (38) 536 168
Vertrue Inc. VTRU (35) 441 (80)
Visteon Corp. VC (1,430) 8,823 404
Vocus Inc VOCS (9) 21 (10)
Worldspace Inc. WRSP (1,475) 765 249
WR Grace & Co. GRA (574) 3,465 848
*********
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 A. Soriano-Baaclo, Marjorie C. Sabijon, Terence
Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo
Junior M. Pinili, Tara Marie A. Martin 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 ***