/raid1/www/Hosts/bankrupt/TCR_Public/060210.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, February 10, 2006, Vol. 10, No. 35
Headlines
AAIPHARMA INC: Wants Removal Period Stretched to May 8
AMERICAN MEDIA: Inks New $510-Million Credit Agreement
AOL LATIN: Will Stop Operating in Brazil on March 17
APCO LIQUIDATING: Judge Walsh Confirms Amended Liquidating Plan
APRIA HEALTHCARE: Earns $19 Million in Quarter Ended Dec. 31, 2005
ASARCO LLC: Judge Schmidt Lifts Stay to Set Off Chevron Debt
ATA AIRLINES: Gets Court Nod to Purchase L-1011 Aircraft from GECC
BANKAMERICA: Moody's Puts Single-B Rating on 3 Certificate Classes
BARRETT EINAUGLER: Case Summary & 12 Largest Unsecured Creditors
BERRY-HILL: Settles Dispute with ACG Credit Company
BIONICHE LIFE: Posts CDN$5.7 Mil. Net Loss in Qtr. Ended Dec. 31
CABG MEDICAL: Reduces Operations for Possible Dissolution
CAJBIN LLC: Case Summary & 7 Largest Unsecured Creditors
CALIFORNIA STEEL: Earns $12.7 Mil. in Fourth Quarter Ended Dec. 31
CALPINE CORP: Pays Off $275 Mil. Debt on Geysers Geothermal Assets
CARAUSTAR INDUSTRIES: Exits Coated Recycled Boxboard Business
CENTRAL GARDEN: Moody's Rates Proposed $650 Mil. Sr. Loan at Ba2
CHAZ CONCRETE: Case Summary & 20 Largest Unsecured Creditors
CITIZENS COMM: Moody's Retains Ba3 Bond Rating After Sale of ELI
COLLINS & AIKMAN: Wants Court to OK Intellectual Property Transfer
COLLINS & AIKMAN: Looks for New Executives to Beef Up Ranks
COLLINS & AIKMAN: Inks Amended Steam Purchase Deal with Primary
COMMERCE ONE: Sells All Assets to Perfect Commerce
CONVALESCENT CENTER: Case Summary & 46 Largest Unsecured Creditors
CONWAY WHOLESALE: Case Summary & 10 Largest Unsecured Creditors
CYBERCARE INC: Has Interim Access to Cast-Crete DIP Loan
DANKA BUSINESS: S&P Lowers Corporate Credit Rating to B- from B
DAVE & BUSTER'S: Moody's Rates Proposed $175 Mil. Sr. Notes at B3
DECORATIVE SURFACES: Columbus Plant Sale Draws Fire from EPA
DELPHI CORP: Wants Court OK to Pay UAW And IUE-CWA Advisor Fees
DELPHI CORP: Panel Taps Jefferies & Company as Investment Banker
DELTA AIR: Judge Rules in Favor of Retired Delta Pilots
DOLORES WIEKHORST: Case Summary & 20 Largest Unsecured Creditors
DONALD GATZKE: Case Summary & 3 Largest Unsecured Creditors
DURATEK INC: S&P Puts BB- Corporate Credit Rating on Neg. Watch
DURATEK INC: Merger Agreement Cues Moody's to Affirm B1 Ratings
EDS CORP: Earns $112 Million of Net Income in 2005 Fourth Quarter
ELAN SENIOR: Case Summary & 18 Largest Unsecured Creditors
EMPIRE STATE: Voluntary Chapter 11 Case Summary
EQUINOX HOLDINGS: 9% Senior Notes Offering Expires Today
GADZOOKS INC: Judge Hale Confirms Amended Joint Liquidating Plan
GARDENBURGER INC: Court Approves Disclosure Statement
GE COMMERCIAL: Moody's Affirms Low-B Ratings on 6 Cert. Classes
GENTIVA HEALTH: Moody's Rates Proposed $445 Mil. Facility at Ba3
GERARD NEBEL: Case Summary & 20 Largest Unsecured Creditors
GEORGE STROBERG: Case Summary & 13 Largest Unsecured Creditors
GT BRANDS: Courts Extends Exclusive Plan-Filing Period to March 24
GT BRANDS: Rejects Headquarters Lease Effective January 15, 2006
INFOR GLOBAL: Moody's Affirms Junk Ratings on $315 Mil. Term Loan
INFOR GLOBAL: S&P Puts CCC+ Rating on Proposed $115 Million Loan
INSEQ CORP: Debts Cut by $1.5 Million in Debt to Equity Conversion
JUAN DE VIRGILIIS: Case Summary & 8 Largest Unsecured Creditors
KAISER ALUMINUM: Wants to Settle Grayson County's $525,000 Claim
KMART CORP: Court Lifts Stay for Ms. Dominguez to Pursue Lawsuit
LAZARD LTD: Dec. 31 Balance Sheet Upside-Down by $870 Million
MAYTAG CORP: S&P Holds BB+ Corporate Credit Rating on CreditWatch
MAYTAG CORP: Is Considering Plans to Sell Ailing Hoover Unit
MUSICLAND HOLDING: Taps FTI Consulting as Financial Advisors
MUSICLAND HOLDING: Wants to Employ Abacus as Consultants
NANCY WILSON: Case Summary & 11 Largest Unsecured Creditors
NAPIER ENVIRONMENTAL: Closes $1.3MM Financing for U.S. Contracts
NATIONAL GAS: Meeting of Creditors Scheduled for February 23
NAVIGATOR GAS: Liquidator Wants to Reject NGML Contracts
NEW YORK RACING: State Issues $1.125 Million Tax Warrant
NORTEL NETWORKS: S&P Affirms B- Long-Term Corporate Credit Rating
OCEAN WEST: Amends June 30, 2005 Financials After Failed Spin-Off
OPTIGENEX INC: Restates Year 2004 Financial Statements
PANOLAM INDUSTRIES: Moody's Affirms Junk Ratings on $150MM Notes
PARMALAT BRASIL: Brazilian Court Approves Plan of Reorganization
PEGGY WILLIAMS: Case Summary & 19 Largest Unsecured Creditors
PERFORMANCE TRANSPORTATION: Can Proceed with Intercompany Deals
PERFORMANCE TRANSPORTATION: Can Pay $500K of Customer Obligations
PERFORMANCE TRANSPORTATION: Has Interim OK to Pay Critical Vendors
PHOTOCIRCUITS CORP: Wants Plan-Filing Period Stretched to May 12
PLASTECH ENGINEERED: S&P Affirms Corporate Credit Rating at B+
PLIANT CORP: CEO Bevis Provides Update on Restructuring Process
PLYMOUTH RUBBER: Wants to Employ Titlebaum as Special Counsel
PONDERLODGE INC: Judge Burns Confirms Amended Liquidating Plan
PT HOLDINGS: Posts $6 Million Net Loss in Quarter Ended Dec. 31
RAYE LLC: Voluntary Chapter 11 Case Summary
RIDDELL BELL: Easton Merger Cues S&P to Put Ratings on Neg. Watch
RIDDELL BELL: Moody's Places B1 Long-Term Ratings Under Review
RIDGEBACK RANCH: Case Summary & 20 Largest Unsecured Creditors
ROMACORP INC: Can Hire Keen Realty as Real Estate Consultants
ROMACORP INC: Wants Court OK to Hire BKD LLP as Tax Consultants
S-TRAN HOLDINGS: Court OKs Exclusive Period Extensions to March 8
SIGNATURE 5: Moody's Removes B2 Rating on $20MM Notes from Watch
SILGAN HOLDINGS: S&P Upgrades Corporate Credit Rating to BB+
SOLUTIA INC: Names Kent Davies as President for CPFilms Business
STRUCTURED ASSET: Moody's Cuts Class B-3 Certificate Rating to Ba3
SUMMIT AT PEOH: Case Summary & 7 Largest Unsecured Creditors
SUNRISE SENIOR: Notes Redemption Cues Moody's to Withdraw Ratings
SUPERB SOUND: Wants to Reject Unexpired Lease with Tom Wood Lexus
SYCAMORE CREEK: Case Summary & 16 Largest Unsecured Creditors
SYCAMORE/CUSTOM: Case Summary & 11 Largest Unsecured Creditors
TELEFONICA DEL PERU: Moody's Confirms Ba2 Certificate Rating
THREE-FIVE: Equity Panel Hires Jennings Haug as Bankruptcy Counsel
TRM CORP: Shareholders Sell 950,000 Shares of Common Stock
TRUMP HOTELS: Has Until Mar. 15 to Object to Otis Elevator Claims
TRUMP HOTELS: Judge Wizmur Approves Stipulation With PDS Gaming
TRUST ADVISORS: U.S. Trustee Amends Creditors Committee Membership
UAL: Multi-Mil. Settlement on Aircraft & Tax Indemnity Claims OKd
UAL CORP: Allows American Air's Unsecured Claim at $7.5 Million
UAL CORP: Allows Verizon's Tax Indemnity Claims at $182.5 Million
UNITED WOOD: Files Plan and Disclosure Statement in Oregon
US AIRWAYS: Inks Amended Aircraft Order with Embraer
WACHOVIA BANK: Moody's Affirms Low-B Ratings on Four Trust Classes
WINN-DIXIE: Wants to Pay $1.15 Million to Keep Peter Lynch as CEO
WINN-DIXIE: Equity Security Committee Wants to Be Reinstated
WINN-DIXIE: Konica Wants 2003 Photofinishing Agreement Decided
* Greenberg Traurig Hires World-Class Litigator Allan Van Fleet
* BOOK REVIEW: Entrepreneurship: Back to Basics
*********
AAIPHARMA INC: Wants Removal Period Stretched to May 8
------------------------------------------------------
aaiPharma Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to further extend until May 8,
2006, the period within which they can file notices of removal
with respect to prepetition civil actions.
The Debtors say they haven't had enough time or the opportunity to
evaluate all of the civil actions in consultation with the
attorneys handling those matters in order to determine whether
removal will be appropriate.
The extension will allow aaiPharma's management to make fully
informed decisions concerning the removal of each civil action and
will assure the rights of the Debtors' estates under Section 1452
can be properly exercised.
Headquartered in Wilmington, North Carolina, aaiPharma Inc. --
http://aaipharma.com/-- provides product development services to
the pharmaceutical industry and sells pharmaceutical products that
primarily target pain management. AAI operates two divisions:
AAI Development Services and Pharmaceuticals Division.
The Company and eight of its debtor-affiliates filed for chapter
11 protection on May 10, 2005 (Bankr. D. Del. Case No. 05-11341).
Karen McKinley, Esq., and Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A.; Jenn Hanson, Esq., and Gary L. Kaplan,
Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP; and the
firm of Robinson, Bradshaw & Hinson, P.A., represent the Debtors
in their restructuring efforts. When the Debtors filed for
bankruptcy, they reported $323,323,000 in consolidated assets and
consolidated debts totaling $446,693,000.
AMERICAN MEDIA: Inks New $510-Million Credit Agreement
------------------------------------------------------
American Media Operations, Inc., and American Media, Inc., entered
into a Credit Agreement dated January 30, 2006, with:
* Deutsche Bank Securities Inc., as syndication agent;
* Bear Stearns Corporate Lending Inc., as documentation
agent;
* General Electric Capital Corporation, as documentation
agent;
* Lehman Commercial Paper Inc., as documentation agent; and
* JP Morgan Chase Bank, N.A., as administrative agent.
The company's disclosure about the new credit facility did not
disclose the identity of the lending syndicate members.
The 2006 Credit Agreement allows for revolving loans, swingline
loans and letters of credit in an aggregate principal amount of up
to $510 million (subject to an increase of up to $250 million at
the Company's request, upon certain conditions). The indebtedness
under the 2006 Credit Agreement is secured by security interests
in all of the Company's personal properties (with limited
exceptions) and properties of some of the Company's U.S.
subsidiaries. The loans mature on January 30, 2013, subject to an
early termination provision in the event that certain of the
Registrant's senior subordinated notes are refinanced.
The 2006 Credit Agreement replaces the Restated Credit Agreement,
dated as of January 23, 2003. The 2003 Credit Agreement had
allowed for revolving loans and letters of credit in an aggregate
principal amount, subject to a borrowing base (comprised of a
portion of accounts receivable and inventory), of up to
$485.0 million. The 2003 Credit Agreement would have terminated
on April 1, 2007, had the parties not terminated it earlier.
$445 million was outstanding under the 2003 Credit Agreement.
There were no penalties incurred in connection with the early
termination.
Headquartered in Boca Raton, Florida, American Media Operations
Inc. is the nation's largest publisher of celebrity, health and
fitness, and Spanish language magazines.
* * *
As reported in the Troubled Company Reporter on Jan. 20, 2006,
Moody's Investors Service assigned a B1 rating to American Media
Operations, Inc.'s proposed $510 million senior secured credit
facilities and affirmed other ratings. The rating actions are:
Ratings Assigned:
* $60 million senior secured revolving credit facility,
due 2012 -- B1
* $450 million senior secured term loan, due 2013 -- B1
Ratings Affirmed:
* Corporate Family rating -- B2
* $150 million 8.875% senior subordinated notes,
due 2011 -- Caa1
* $400 million 10.25% senior subordinated notes,
due 2009 -- Caa1
Ratings Affirmed, subject to withdrawal at closing:
* $60 million senior secured revolving credit facility,
due 2006 -- B1
* $3 million senior secured term loan tranche A, due 2006 -- B1
* $304 million (remaining amount) senior secured term loan
tranche C, due 2007 -- B1
* $133 million senior secured term loan tranche C-1,
due 2007 -- B1
Moody's said the rating outlook is stable.
As reported in the Troubled Company Reporter on Jan. 19, 2006,
Standard & Poor's Ratings Services lowered the corporate credit
rating on American Media Operations Inc. to 'B-' from 'B', and the
subordinated debt rating to 'CCC' from 'CCC+'. The 'B' rating on
the company's senior secured bank loan was affirmed. S&P said the
outlook remains negative.
AOL LATIN: Will Stop Operating in Brazil on March 17
----------------------------------------------------
According to published reports, the Brazilian unit of regional
Internet service provider America Online Latin America Inc. aka
AOL Latin America Inc. has decided to end its activities on March
17, 2006. The company confirmed in a statement that it will stop
operating its Brazilian Web pages and services on that date.
As previously reported in the Troubled Company Reporter, the U.S.
Bankruptcy Court for the District of Delaware authorized AOL Latin
America to transfer its subscribers to ISP Terra, a move that
paved the way for cessation of the company's operations in Brazil.
Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc. -- http://www.aola.com/-- offers AOL-branded
Internet service in Argentina, Brazil, Mexico, and Puerto Rico,
as well as localized content and online shopping over its
proprietary network. Principal shareholders in AOLA are
Cisneros Group, one of Latin America's largest media firms,
Brazil's Banco Itau, and Time Warner, through America Online.
The Company and its debtor-affiliates filed for Chapter 11
protection on June 24, 2005 (Bankr. D. Del. Case No. 05-11778).
Pauline K. Morgan, Esq., and Edmon L. Morton, Esq., at Young
Conaway Stargatt & Taylor, LLP and Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represent the Debtors in their
restructuring efforts. When the Debtors filed for protection
from their creditors, they listed total assets of $28,500,000
and total debts of $181,774,000.
APCO LIQUIDATING: Judge Walsh Confirms Amended Liquidating Plan
---------------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware confirmed the First Amended Liquidating Plan
of Reorganization filed by APCO Liquidating Trust and its debtor-
affiliate, APCO Missing Stockholder Trust.
Judge Walsh determined that the Plan satisfies the 13 standards
for confirmation required under Section 1129(a) of the Bankruptcy
Code.
Summary of First Amended Plan
On or before the effective date of the Plan, the Liquidation
Trustee, on behalf of the Debtors, and any Committee will execute
a Liquidation Trust Agreement and will take all steps necessary
to establish a post-confirmation Liquidation Trust. The
Liquidation Trust's sole purpose will be to liquidate and
distribute the Trust Assets; the Trust will not engage in the
conduct of any trade or business.
On the effective date, all of the Debtors' right, title and
interest in all of the Trust Assets will be automatically
transferred to the Liquidation Trust free and clear of liens,
claims or interests.
Treatment of Claims and Interests
A) Allowed non-tax priority claims will be paid in full, in cash,
in the allowed amount of those claims after the effective date,
unless the holders of those claims agree to a different
treatment of their claims.
B) Allowed secured claims will be paid in full after the effective
date and, at the Liquidation Trustee's sole discretion, receive
cash, return of the collateral securing the claim, or other
treatment agreed to between the Liquidation Trustee and the
holder of a secured claim.
C) Allowed unsecured claims, totaling approximately $900,000, will
receive their pro rata share of distributions from the Trust
Assets in accordance with Article IV of the Plan, after the
payment or satisfaction of, or adequate reservation for
administrative claims, tax claims, allowed non-tax priority
claims and allowed secured claims.
D) Interest holders will receive their pro rata share of any
remaining Trust Assets in accordance with Article IV
of the Plan, after payment or satisfaction of all
administrative claims, tax claims, allowed non-tax priority
claims, allowed secured claims and allowed unsecured claims.
A full-text copy of the Disclosure Statement and First Amended
Plan is available for a fee at:
http://www.researcharchives.com/bin/download?id=051222052434
Headquartered in Oklahoma City, Oklahoma, APCO Liquidating Trust
and APCO Missing Stockholder Trust were created on behalf of the
common stockholders of APCO Oil Corporation. The Debtors filed
for chapter 11 protection on August 19, 2005 (Bankr. D. Del. Case
No. 05-12355). Gregory P. Williams, Esq., John Henry Knight,
Esq., and Rebecca L. Booth, Esq., at Richards, Layton & Finger,
P.A., represent the Debtors. When the Debtor filed for
protection, they estimated assets and debts between $10 million to
$50 million.
APRIA HEALTHCARE: Earns $19 Million in Quarter Ended Dec. 31, 2005
------------------------------------------------------------------
Apria Healthcare Group Inc. (NYSE:AHG) reported its financial
results for the quarter and year ended Dec. 31, 2005.
Revenues were $359.7 million in the fourth quarter of 2005, a 4.4%
decrease compared to revenues of $376.4 million for the fourth
quarter in 2004. Net income for the fourth quarter of 2005 was
$19.5 million, compared to $27.3 million for the same period last
year. Full year revenues were $1.474 billion in 2005, compared to
$1.451 billion in 2004. Net income for 2005 was $66.9 million
versus $114 million in 2004.
"Our revenue was disappointing during the second half of 2005,"
said Lawrence M. Higby, Chief Executive Officer. "As a result of
our performance, no executive officer will receive a salary
increase or bonus for 2005. Looking forward, however, the
previously-announced changes we made in the fourth quarter in
sales management, sales force structure and sales incentives
should make 2006 a stronger year. In addition, the rollout of our
electronic Sales Management System should provide improved
territory-level account targeting and accountability as we move
through 2006. Finally, we will also benefit from the new CIGNA
contract, which was effective Feb. 1, 2006, as well as the
expected expansion of Medicare Advantage program enrollment."
Free cash flow for the fourth quarter of 2005 was $51.4 million
compared to $48.4 million in the prior year. For the twelve
months ended Dec. 31, 2005, free cash flow was $87.4 million
compared to $134.3 million in the prior year.
At Dec. 31, 2005, the Company's assets totaled $1.1 billion and
debts totaled $858 million, resulting in a stockholders' equity of
$327 million.
Headquartered in Lake Forest, California, Apria Healthcare Group
Inc. -- http://www.apria.com/-- provides home respiratory
therapy, home infusion therapy and home medical equipment through
approximately 500 branches serving patients in 50 states. With
$1.5 billion in annual revenues, it is the nation's leading
homecare company.
* * *
As reported in the Troubled Company Reporter on Nov. 24, 2005,
Standard & Poor's Ratings Services lowered its ratings on Lake
Forest, California-based home respiratory care, durable medical
equipment, and infusion therapy services provider Apria Healthcare
Group Inc. The corporate credit rating was lowered to 'BB+' from
'BBB-'. All ratings on the company were removed from CreditWatch,
where they were originally placed with negative implications
Oct. 26, 2005. S&P said the outlook is stable.
ASARCO LLC: Judge Schmidt Lifts Stay to Set Off Chevron Debt
------------------------------------------------------------
Judge Schmidt of the U.S. Bankruptcy Court for the Southern
District of Texas in Corpus Christi gave ASARCO LLC authority to:
(a) modify the automatic stay to allow Chevron to set off the
Prepetition Debt against the Prepetition Deposits;
(b) permit Chevron to release the balance of the Prepetition
Deposits to ASARCO; and
(c) retain Chevron's right to utilize the Returned Deposits,
as a defense to any avoidance action brought against it,
as if the deposits had not been returned.
As previously reported in the Troubled Company Reporter on Dec.
23, 2005, Chevron U.S.A., Inc., has provided ASARCO LLC with
lubricants and fuel for use in the Debtor's operations, both
during the prepetition and postpetition periods.
As of the bankruptcy filing, ASARCO owed Chevron $191,870.
Chevron, on the other hand, held two prepetition deposits:
$950,000 for fuel and $150,000 for lubricants.
ASARCO needed to increase its supply of fuel and lubricants
purchased from Chevron. ASARCO's credit line is limited to
$250,000, which is insufficient for ASARCO to accomplish the
necessary increase in supply.
Eric A. Soderlund, Esq., at Baker Botts L.L.P., in Dallas, Texas,
asserted that allowing Chevron to set off the Prepetition Debt
against the Prepetition Deposits and preserving Chevron's defenses
to any potential actions will make it possible for Chevron to
release the deposit balance to ASARCO. By then, ASARCO will be in
a position to negotiate a postpetition deposit with Chevron that
will be sufficient to meet ASARCO's need for increased supply from
Chevron.
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 proceeding. (ASARCO
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
ATA AIRLINES: Gets Court Nod to Purchase L-1011 Aircraft from GECC
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
gave ATA Airlines, Inc., and its debtor-affiliates authority to
purchase a Lockheed L-1011 aircraft, bearing serial number 1230
and U.S. Registration Number N194AT, for nominal consideration
pursuant to a purchase agreement.
As previously reported in the Troubled Company Reporter on
Jan. 31, 2006, ATA Holdings Corp., General Electric Capital
Corporation, and U.S. Bank National Association entered into a
stipulation providing rejection of certain equipment relating to
several aircraft and engines. Among the aircraft covered by the
Stipulation was N194AT. GECC is the beneficial owner with respect
to N194AT, whereas U.S. Bank, as trustee, is the sublessor and
registered owner of N194AT.
Pursuant to that Court-approved Stipulation, the Reorganizing
Debtors were authorized to use N194AT pursuant through Dec. 15,
2005.
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. 47; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
BANKAMERICA: Moody's Puts Single-B Rating on 3 Certificate Classes
------------------------------------------------------------------
Moody's Investors Service has downgraded three certificates from
transactions, issued by BankAmerica Manufactured Housing Contract
Trusts. The transactions are backed by manufactured housing loans
and performance has been weaker than expected. There are also
significant cumulative interest shortfalls on these certificates
that will be payable ahead of principal and may negatively impact
principal paydown.
Complete rating action are:
Issuer: BankAmerica Manufactured Housing Contract Trust
Downgrade:
* Series 1997-1; Class M, Downgraded to B1 from Baa2;
* Series 1997-2; Class M, Downgraded to B2 from Ba1;
* Series 1998-2; Class M, Downgraded to Ba2 from Baa2;
BARRETT EINAUGLER: Case Summary & 12 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Barrett R. Einaugler, Esq.
25 Independence Boulevard, Suite 101
Warren, New Jersey 07059
Bankruptcy Case No.: 06-10908
Chapter 11 Petition Date: February 9, 2006
Court: District of New Jersey (Trenton)
Debtor's Counsel: Brian D. Spector, Esq.
Spector & Ehrenworth, P.C.
30 Columbia Turnpike
Florham Park, New Jersey 07932-2261
Tel: (973) 593-4800
Fax: (973) 593-4848
Total Assets: $1,400,269
Total Debts: $8,523,071
Debtor's 12 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Einaugler, Richard Loan Guaranty $2,236,802
16466 Brookfield Estates Way
Delray Beach, FL 33446
Wachovia Bank, NA Loan Guaranty $2,169,500
Operations NCG039
P.O. Box 2705
Winston Salem, NC 27102-2705
Louis Kapner, P.A. Charging Lien $69,000
Louis Kapner, Esq.
P.O. Box 1428
West Palm Beach, FL 33402-1428
Einagler, Richard and Carole Personal Loans $54,303
16466 Brookfield Estates Way
Delray Beach, FL 33446
Citicard Credit Card $27,608
American Express Credit Card $24,508
USAA Saving Bank Credit Card $22,906
Einaugler, Carole F. $19,000
Diners Club International Credit Card $1,231
Feliciare, Nick Household Expense $208
Good Friends Pools Household Expense $179
Einaugler, Petra Equitable Unknown
Distribution
BERRY-HILL: Settles Dispute with ACG Credit Company
---------------------------------------------------
Berry-Hill Galleries, Inc. executed definitive documentation
resolving all disputes between the Company and one of its lenders,
ACG Credit Company, LLC, an affiliate of Art Capital Group. The
U.S. Bankruptcy Court for the Southern District of New York has
already approved this settlement.
With this deal in place, Berry-Hill is now a step closer to its
eventual emergence from bankruptcy. Berry-Hill filed under
chapter 11 in December 2005 as a strategic decision to protect its
business and customers while dealing with short-term liquidity
issues resulting from a lawsuit filed against the Company in
August 2005 by ACG.
Among other things, the settlement with ACG provides for:
* the dismissal of the lawsuit commenced by ACG against
Berry-Hill;
* resolution of all ACG claims and related controversies,
including restatement and amendment of the existing loan;
and
* the use of cash collateral by Berry-Hill for normal business
operations.
"The announcement represents a positive step forward in our
efforts to strengthen our business and emerge from chapter 11,"
James Berry Hill, a director of Berry-Hill Galleries, Inc., said.
"The challenge of reaching an agreement with ACG is now over,
allowing us to refocus on running our business and implementing a
plan for emergence from bankruptcy. We continue to expect a quick
exit from chapter 11, and our number one priority remains serving
our clients and partners during this time."
"Berry-Hill continues to provide the highest level of service,
stability and expertise to our valued customers," added Frederick
D. Hill, a director of Berry-Hill Galleries, Inc. "Our business
remains strong, and preparations are well underway for our highly-
anticipated upcoming exhibition 'Toward a New American Cubism.'
That show, which will run from May 23 through July at our gallery,
will incorporate original research and present a new point of view
on the subject. It will feature important loans from major
institutions and private collections and be accompanied by a
substantial publication."
Berry-Hill Galleries is represented by the law firm of Kramer
Levin Naftalis & Frankel LLP, and has engaged Gordian Group, LLC
as its investment bank. Alan M. Jacobs of AMJ Advisors, LLC is
the Chief Restructuring Officer.
Headquartered in New York, New York, Berry-Hill Galleries, Inc.
-- http://www.berry-hill.com/-- buys paintings and sculpture
through outright purchase or on a commission basis and also
exhibits artworks. The Debtor and its affiliate, Coram Capital
LLC, filed for chapter 11 protection on Dec. 8, 2005 (Bankr.
S.D.N.Y. Case Nos. 05-60169 & 05-60170). Robert T. Schmidt, Esq.,
at Kramer, Levin, Naftalis & Frankel, LLP, represents the Debtors
in their restructuring efforts. When the Debtors filed for
protection from their creditors, they estimated assets between
$10 million and $100 million and debts between $1 million and
$50 million.
BIONICHE LIFE: Posts CDN$5.7 Mil. Net Loss in Qtr. Ended Dec. 31
----------------------------------------------------------------
Bioniche Life Sciences Inc. (TSX: BNC) released results for its
second quarter of fiscal 2006 for the period ended Dec. 31, 2005.
During the quarter, on Dec. 8, 2005, Bioniche closed a private
financing of $18.5 million -- the Company's largest single
financing -- with Laurus Master Funds, a U.S.-based institutional
investor. This financing included a $7.5 million bridge loan,
which has now been repaid from proceeds of the Pharma sale. It
also provided a $4 million operating facility and a $7 million
secured convertible term loan, both three-year arrangements.
The most significant recent event for the Company - subsequent to
the closing of the quarter - was the sale of Bioniche Pharma Group
Ltd., Bioniche's sterile injectible manufacturing business, to
RoundTable Healthcare Partners, a U.S. private equity group from
Lake Forest, Illinois. The transaction yielded approximately
$13.25 million in cash, prior to transaction expenses and bridge
repayment, and with a combination of cash, debt assumption, equity
in the business going forward and deferred sale proceeds, this
transaction has a additional potential value to Bioniche of
approximately $19.75 million.
"These two events are significant for the Company in terms of
improving our financial flexibility and increasing our focus on
those projects that are key to our future growth," noted Graeme
McRae, President & CEO of Bioniche Life Sciences Inc. "The
combination of a reduced debt load and increased capital resources
through the Pharma Group sale and the Laurus financing allow
us to focus on our proprietary cancer treatment - Mycobacterial
Cell Wall-DNA Complex - which is expected to soon begin a planned
multi-centre Phase III/pivotal clinical trial in superficial
bladder cancer; and our E. coli O157:H7 cattle vaccine, which
should be registered in the U.S. by the U.S. Department of
Agriculture later this year."
In the second quarter of fiscal 2006, consolidated revenues from
marketed products totaled CDN$7.4 million as compared to CDN$6.8
million in the same quarter last year, an increase of 9%.
Overall gross profit improved to 63% in this quarter, compared to
55% in the same period last year, reflecting a proportional
increase in sales of the Company's proprietary products, which
have higher margins than non-branded products.
Net loss for the period reached CDN$5.7 million compared with
CDN$4.9 million for the previous year.
Animal Health sales were CDN$6.1 million for the second quarter of
fiscal 2006 as compared to CDN$5.6 million recorded in the same
period last year. This increase of CDN$500,000, or 9%, reflects
increased sales of Folltropin(R)-V, the Company's top-selling
follicle stimulating hormone product for cattle and sheep, across
all market jurisdictions.
On the Human Health side of the Bioniche business, sales of
Cystistat(R), the Company's proprietary sodium hyaluronate product
for the treatment of cystitis, were CDN$1.1 million compared to
CDN$1 million recorded in the same period last year.
On a year-to-date basis, consolidated revenues remained constant
at CDN$13.7 million this year compared to CDN$13.8 million last
year.
Gross margins on product sales improved to 60% compared to 53%
last year, despite the strengthening of the Canadian dollar. This
is attributable to a higher margin product mix.
Net loss for the period reached CDN$9 million compared with
CDN$9.6 million for the previous year.
At Dec. 31, 2005, assets totaled CDN$27,049,556 and liabilities
totaled CDN$11,685,793, resulting in a stockholders' equity of
CDN15,363,763.
Headquartered in Belleville, Ontario, Bioniche Life Sciences Inc.
-- http://www.bioniche.com/-- is a research-based, technology-
driven Canadian biopharmaceutical company focused on the
discovery, development, manufacturing, and marketing of
proprietary products for human and animal health markets
worldwide. The fully integrated company employs approximately 175
skilled personnel and has three principal operating divisions:
Human Health, Animal Health, and Food Safety. The Company's
primary goal is to develop proprietary cancer therapies supported
by revenues from marketed products in these three segments.
* * *
Going Concern Doubt
Due to a number of factors, including the Company's losses,
decreases in working capital and cash balances, and current burn
rate, as well as the reclassification of certain amounts of long-
term debt to current, the notes to the financial statements
describe a "going concern uncertainty". The Company is addressing
this situation through debt and equity financings, and the
potential sale of Bioniche Pharma Group Limited. These
initiatives are at a preliminary stage and, the Company said,
there is no assurance that they will be completed as currently
planned.
TPC Default
During fiscal 2005, the Company was subject to a compliance audit
in relation to its two agreements with Technology Partnerships, an
agency of Industry Canada. On Sept. 23, 2005, the Company was
advised that it was in default under the TPC agreements due to the
structure of compensation paid to consultants it used to help
secure the agreements.
The Company has entered into a settlement agreement with Industry
Canada, whereby it agreed to pay an amount equal to the portion of
the consultants' fees that were in dispute, plus a portion of the
government's costs associated with the audit, for a total of
approximately C$465,000, to cure the event of default. The amount
has been classified as a reduction in the government incentives on
the consolidated statements of loss in the fourth quarter. Of
this amount, C$100,000 is payable immediately and the remainder is
payable monthly over a 12-month period commencing Oct. 31, 2005,
with interest charged at 3%.
Due to the resolution of its breach with Industry Canada, the
Company will be able to move forward to collect its outstanding
receivable from the Technology Partnerships Canada program of
approximately C$2 million.
CABG MEDICAL: Reduces Operations for Possible Dissolution
---------------------------------------------------------
CABG Medical, Inc. (Nasdaq: CABG) will substantially reduce the
scope of operations in anticipation of a possible dissolution of
the Company and concurrently initiate a formal process to evaluate
strategic alternatives. The Company will terminate seven of its
eleven full-time employees and eliminate research and development
efforts involving the Holly Graft System.
The Company has engaged Goldsmith, Agio, Helms, an investment
bank, to assist the Company's Board of Directors in identifying
and evaluating potential strategic alternatives. If the Company
is unable to complete an acceptable transaction, the Company
intends to distribute its assets, including existing cash and
investments, to shareholders.
Based on information presently available to CABG, if it proceeds
with the liquidation and dissolution of the Company, and assuming
the successful resolution of liabilities to creditors, and
assuming the successful sale or disposition of its remaining
tangible and non-cash assets, and assuming no unanticipated
claims, legal actions or other material adverse events, the
Company believes that its shareholders could receive a
distribution of net available assets of up to approximately $1.47
per share. To be in a position to distribute $1.47 per share to
shareholders, the Company would have to be able to effect the
dissolution generally in the time period presently contemplated,
realize from the sale of assets proceeds as projected, settle
normal course of business obligations in a satisfactory manner,
avoid protracted litigation regarding the dissolution or other
related matters and costly settlements of contingent liabilities
and higher than expected professional fees and costs incurred in
connection with the dissolution. There is no assurance that the
Company will be able to resolve all of these uncertainties
satisfactorily.
However, the Company does not believe that the distribution will
be lower than $1.20 per share except for unusual circumstances.
After an exhaustive effort to evaluate remedies for the Holly
Graft System, the Company has determined that the extensive design
efforts required to re-engage human clinical trials, coupled with
the significant risk associated with such research and development
activities, does not justify further investment in the project and
continuing operations as a publicly traded company.
"I am deeply saddened by this event and regret that we will not be
able to fulfill our commitment to our investors, our surgeons and
most importantly the patients that we aspired to treat," said
Manny Villafana, Chairman and CEO. "It is well known that the
treatment of coronary artery disease is very difficult, and
ultimately our device was not successful in clinical trials.
"Our Board of Directors believes that the best option is to
proceed with an orderly wind down of operations while continuing
to review transactions which could reasonably generate greater
value for the shareholders than would a dissolution of the
Company. The current Holly Graft System would require an
extensive and costly redesign with no assurance that the redesign
would be successful.
"We thank our surgeons and clinical investigators for their time
and effort on the Holly Graft project. And to our employees and
business collaborators, I want to thank them for their dedication
and focus."
Headquartered in Plymouth, Minnesota, CABG Medical Inc. --
http://www.cabgmedical.com/-- is a medical technology company
seeking to improve the treatment of coronary heart disease, or
CHD, by advancing conventional bypass surgery. We have designed
our first product, an artificial coronary graft system that
utilizes drug-eluting technologies known as the Holly Graft
System.
CAJBIN LLC: Case Summary & 7 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: CAJBIN, LLC
dba Airport Days Inn and Suites
23040 U.S. Highway 20
South Bend, Indiana 46628
Bankruptcy Case No.: 06-30088
Type of Business: The Debtor is a Days Inn franchisee.
Chapter 11 Petition Date: February 8, 2006
Court: Northern District of Indiana (South Bend Division)
Judge: Harry C. Dees, Jr.
Debtor's Counsel: James K. Tamke, Esq.
James K. Tamke, P.C.
115 South Lafayette Boulevard, Suite 512
South Bend, Indiana 46601
Tel: (574) 289-8788
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 7 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Shree Ambe, Inc. Third Mortgage $300,000
130 South Dixie Way
South Bend, IN 46637-3316
Days Inns of America, Inc. Franchise Fees $100,000
P.O. Box 278
Parsippany, NJ 07054-0278
Indukumar N. Amin Loan $15,000
1724 Fawn Court
South Bend, IN 46628-4028
Citibank Credit Card $5,000
Internal Revenue Service 941 Taxes $1,000
Indiana Department of Revenue Sales and $1,000
Room Tax
Indiana Department of Workforce Unemployment $100
Development Taxes
CALIFORNIA STEEL: Earns $12.7 Mil. in Fourth Quarter Ended Dec. 31
------------------------------------------------------------------
California Steel Industries, Inc., reported results for the
quarter and year ended Dec. 31, 2005.
Net income for the year is $43.4 million from sales totaling
$1.23 billion, on shipments of 1.8 million tons. Sales during the
quarter were $300.8 million, with net income of $12.7 million and
shipments of 479,380 tons.
Net sales for fourth quarter decreased 12% from the same period a
year earlier, while billed net tons were 6% higher, reflecting a
decline in the average selling price of about 17%, when compared
to fourth quarter 2004. For the year, net sales were just 2%
lower, although billed net tons were 14% lower. The average sales
price for the year is 14% higher than in 2004 but sales prices
fell about 17% during 2005.
"Although 2005 presented some challenges to California Steel, we
finished the year on a more positive note, and are well positioned
through first quarter of 2006," Masakazu Kurushima, the company's
President & Chief Executive Officer said.
Capital expenditures during 2005 total $43 million, which included
the early buyout option of a lease held on equipment.
EBITDA, as adjusted, for the quarter was $38 million, a decline
over 2004's $67.9 million, although substantially higher than
third quarter's $6.7 million. For the year, EBITDA, as adjusted,
was $118.8 million, down from 2004's $224 million.
Liquidity continues to remain high, with a cash balance of
$104.3 million. Availability under the Company's Revolving Credit
Agreement was $108.5 million, with no outstanding balance.
Headquartered in Fontana, Calif., California Steel Industries,
Inc. -- http://www.californiasteel.com/-- manufactures and sells
a wide range of flat rolled steel products to western US
customers. CSI's products includes hot rolled, cold rolled,
electric resistant weld pipe and galvanized coil and sheet. CSI
has about 1,000 employees.
* * *
California Steel Industries, Inc.'s 6-1/8% Series B Senior Notes
due 2014 carry Moody's Investor Service's Ba2 rating and Standard
and Poor's BB- rating.
CALPINE CORP: Pays Off $275 Mil. Debt on Geysers Geothermal Assets
------------------------------------------------------------------
As part of finalizing its $2 billion debtor-in-possession
collateral structure, Calpine Corporation (OTC Pink Sheets: CPNLQ)
paid off the existing operating lease and related debt for its
Geysers geothermal assets for approximately $275 million.
As previously reported in the Troubled Company Reporter, Calpine
intended to retire certain obligations at The Geysers through its
$2 billion DIP facility, which was approved on Jan. 25, 2006.
With this transaction, Calpine has a 100% ownership interest in
its Geysers assets. The company's DIP facility will be secured by
these Geysers assets, together with liens on all of the
unencumbered assets and junior liens on all of the encumbered
assets of Calpine and its subsidiaries that are debtors-in-
possession. The company previously leased its 19 Geysers power
plants from Steam Host LLC and sold up to 750 megawatts of
geothermal power into the northern California power market.
Calpine is the largest geothermal power provider in the United
States. Its geothermal power plants and steam fields are located
in The Geysers region of northern California.
Full-text copies of Court documents and other general information
about the Chapter 11 cases are available at no charge at
http://www.kccllc.net/calpine
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., 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.
CARAUSTAR INDUSTRIES: Exits Coated Recycled Boxboard Business
-------------------------------------------------------------
Caraustar Industries, Inc., exited the coated recycled boxboard
business on Jan. 6, 2006.
Caraustar says it made the decision to end the business on
Dec. 30, 2005.
The Company says that it will record an approximate $40 million
non-cash pre-tax goodwill impairment loss related to this segment
for the year ended Dec. 31, 2005.
Caraustar Industries Inc. -- http://www.caraustar.com/-- a
recycled packaging company, is one of the world's largest
integrated manufacturers of converted recycled paperboard.
Caraustar has developed its leadership position in the industry
through diversification and integration from raw materials to
finished products. Caraustar serves the four principal recycled
boxboard product end-use markets: tubes, cores and composite cans;
folding cartons; gypsum facing paper and specialty paperboard
products.
* * *
As previously reported in the Troubled Company Reporter on
Jan. 24, 2006, Standard & Poor's Ratings Services affirmed its
ratings, including its 'B+' corporate credit rating, on recycled
paperboard producer, Caraustar Industries Inc. on Jan. 20, 2006.
The outlook is stable.
CENTRAL GARDEN: Moody's Rates Proposed $650 Mil. Sr. Loan at Ba2
----------------------------------------------------------------
Moody's Investors Service has assigned at Ba2 rating to Central
Garden & Pet Company's proposed $650 million senior secured credit
facilities, which will fund its acquisition of Farnam Companies,
Inc., and the refinancing of its existing senior secured bank
debt. In addition, Central's existing senior secured and
corporate family ratings were confirmed, and its senior
subordinated notes were downgraded to B2.
The rating confirmations reflect the strategic alignment of the
acquisition along with the substantial financial cushion, which
existed at the senior secured and corporate rating levels.
However, the downgrade of Central's subordinated notes considers
the heightened loss exposure for this debt class given the
significant increase in higher priority debt to fund a high
-multiple, debt-financed acquisition. The rating action concludes
the review for possible downgrade initiated following the purchase
agreement announcement last month. The rating outlook is stable.
These ratings were affected by this action:
* $350 million five-year senior secured revolving credit
facility, assigned at Ba2;
* $300 million seven-year senior secured term loan facility,
assigned at Ba2;
* Corporate family rating, confirmed at Ba3;
* $125 million senior secured revolving credit facility due
2008, confirmed at Ba2;
* $175 million senior secured term loan "B" due 2009,
confirmed at Ba2;
* $150 million senior subordinated notes due 2013, downgraded
to B2 from B1.
Proceeds from the newly rated credit facilities will be used to
purchase Farnam for approximately $291 million, to refinance
Central's existing bank credit facilities, and to pay related fees
and expenses. Moody's will withdraw the ratings on Central's
existing bank credit facilities upon closing of the proposed
transaction.
The confirmation of Central's corporate family rating and the
assignment of a stable ratings outlook, despite concerns regarding
the large purchase price, recognizes the substantial cushion in
Central's existing financial profile. As such, pro forma credits
metrics for the acquisition, with debt-to-EBITDA around 4.0x and
coverage of 3.9x, remain appropriate for the Ba3 category.
Importantly, Moody's recognizes the sensible strategic rationale
of the Farnam acquisition, which:
1) is well-aligned with Central's increasing portfolio of
active-ingredient based products;
2) furthers Central's long-term transformation from
distributor of third-party brands to marketer/manufacturer
of proprietary brands, with a diversified portfolio of
leading names in growing categories; and
3) provides cost savings and efficiency opportunities in
addition to those anticipated from Central's business unit
consolidation/alignment strategy.
Notwithstanding these supportive elements, the acquisition
heightens Central's risk profile and, therefore, significantly
weakens its position in the Ba3 rating category. Moody's views
the fully debt-financed purchase multiple to be high, especially
considering Farnam's modest historical sales growth, thereby
necessitating the timely realization of sales and cost synergies.
Further, increased interest expense and elevated capital spending
levels are expected to meaningfully moderate Central's near-term
free cash flow generation, with free cash flow-to-debt metrics
falling into the mid-single digit percentage range. Lastly,
Moody's recognizes the presence of large pharmaceutical companies
amongst Farnam's competitive set, whose research and development
resources could result in market changing innovations.
Ongoing rating restraints include:
1) Central's acquisitive nature;
2) the potential for competitive challenges from lawn and
garden companies that are either better capitalized or have
more advanced core competencies and financial flexibility,
or from the numerous small and nimble companies in the
highly fragmented pet supplies industry;
3) pressures associated with high retailer concentrations,
with increasing demands for innovative premium goods or
value-oriented merchandise; and
4) exposure to energy and raw material price volatility, as
adverse trends can simultaneously depress profitability and
consumer demand for discretionary or delayable purchases.
Central's ratings and stable outlook reflect the expectation that
future acquisitions will more closely resemble the company's
historical pattern of smaller acquisitions with purchase multiples
in the 5-to-7x EBIT range, and that debt-to-EBITDA will not be
sustained over 4.5x. Favorable demographic and cultural trends
should continue to support organic sales growth. In addition, the
company's efficiency initiatives and its ongoing product mix shift
towards proprietary brands are expected to offset cost and pricing
pressures and benefit long-term margin gains. As such, Moody's
anticipates that free cash flow-to-debt metrics will return to
high single-digit or low double-digit percentage ranges over the
coming eighteen months.
Failure to progress toward free cash flow targets and meet above-
mentioned leverage thresholds, either due a deviation from
financial policy expectations, category or competitive challenges,
or the inability to realize savings and combat cost pressures,
could result in lower ratings or outlooks over the coming year.
Although not anticipated over the coming year, higher rating
levels would require continued margin enhancement, double-digit
free cash flow to debt percentages, and a commitment to target
leverage below 3.0x.
The Ba2 rating on Central's proposed secured credit facilities
reflects their priority position in the capital structure, as
supported by domestic subsidiary guarantees and stock and asset
pledges from Central and its domestic subsidiaries. In
particular, the ratings are assigned at one-notch above the
corporate family rating owing to solid coverage of secured
borrowings on both a tangible asset and enterprise valuation
basis.
Pro forma Sept. 2005 borrowings would require less than a 3.0x
EBITDA multiple for full coverage, which Moody's views as strong,
especially given the diversity of Central's brand portfolio.
Subject to final credit agreement terms, the facilities will
require prepayment with 50% of excess cash flows when leverage
exceeds 4.0x, will permit an additional $150 million of senior
secured borrowings under an accordion feature, and will permit
additional indebtedness in connection with an accounts receivable
securitization. The term loan facility will amortize at 1% per
year on a quarterly basis, with the balance due at final maturity.
The downgrade of Central's subordinated notes to B2, reflects the
substantial, and now increased, subordination to the senior
secured debt class, which heightens the potential loss exposure
for these noteholders in a distress scenario.
Central Garden & Pet Company, located in Walnut Creek, California,
manufactures a broadening array of branded lawn and garden and pet
supply products, and operates as a distributor for other
manufacturers' products in both of these segments.
Central's subsidiaries have leading positions in niche markets,
including Pennington, AMDRO, Norcal Pottery, and New England
Pottery in the Garden Products Group and Four Paws, Kaytee, All-
Glass Aquarium, Nylabone, and TFH names in the Pet Products group.
Net sales for the twelve-month period ended Sept. 2005 were
approximately $1.4 billion.
CHAZ CONCRETE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Chaz Concrete Company, LLC
4121 Algonquin Parkway
Louisville, Kentucky 40211
Bankruptcy Case No.: 06-30226
Type of Business: The Debtor is a certified MBE ready
mix concrete producer and dealer.
See http://www.chazconcrete.com/
Chapter 11 Petition Date: February 7, 2006
Court: Western District of Kentucky (Louisville)
Judge: Thomas H. Fulton
Debtor's Counsel: Gordon A. Rowe, Jr., Esq.
Law Office of Gordon Rowe
Starks Building, Suite 1436
455 South 4th Avenue
Louisville, Kentucky 40202
Tel: (502) 584-0555
Fax: (502) 584-9555
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Louisville Community Raw Materials $736,000
Development Bank Inventory
c/o Helene Williams Located at
Celebrezze & Associates 4121 Algonquin
710 West Main Street, Suite 401 Parkway
Louisville, KY 40202
Lafarge Corporation Trade Debt $450,000
4000 Town Center, Suite 2000
Southfield, MI 48075
LCDB Enterprise Group Trade Debt $125,000
2900 West Broadway
P.O. Box 11699
Louisville, KY 40251-1699
Case Credit Model 721D Case $78,000
P.O. Box 72470170 Wheel Loader
Philadelphia, PA 19170-0170 Value of Security:
$45,000
Louisville Metro Economic January 1999 $78,000
Development MS
c/o John Schardein
531 Court Place, Suite 1001
Louisville, KY 40202
Charles Berkley Deferred Salary $54,546
309 Northwest Parkway
Louisville, KY 40212
Brooks Crushed Stone Trade Debt $35,417
P.O. Box 1312
4404 Coral Ridge Road
Shepherdsville, KY 40165
Nugent Sand Company Raw Materials $31,000
1833 River Road
P.O. Box 6072
Louisville, KY 40206
Bullock Oil Company Trade Debt $27,300
P.O. Box 83
Pendleton, KY 40055
Morgan & Pottinger Legal Services $21,420
601 West Main Street
Louisville, KY 40202
ISG Resources, Inc. Trade Debt $18,310
dba Headwaters
P.O. Box 974157
Dallas, TX 75397-4157
Terry Gollar Trade Debt $11,124
901 Castlerock Drive
Shepherdsville, KY 40165
Terex-Advance Mixer, Inc. Trade Debt $9,370
12223 Collections Center Drive
Chicago, IL 60693
CDM International $9,250
Attn: Ron Covington
4121 Algonquin Parkway
Louisville, KY 40211
Fore, Miller & Schwartz Legal Fees $6,665
200 South Fifth Street
Louisville, KY 40202
Raben Tire Company Trade Debt $2,581
P.O. Box 4835
Evansville, IN 47724
Kingbury Concrete Construction Raw Materials $1,587
P.O. Box 326
Crestwood, KY 40014
Euclid Chemical Trade Debt $1,483
P.O. Box 931111
Cleveland, OH 44193-0511
Pyles Transport, Inc. Trade Debt $1,117
P.O. Box 531
Columbia, KY 42728
Fifth Third Bank Miscellaneous Unknown
c/o John Majors Industrial
Morgan & Pottinger Equipment
Louisville, KY 40202
CITIZENS COMM: Moody's Retains Ba3 Bond Rating After Sale of ELI
----------------------------------------------------------------
In Moody's opinion, Citizens Communications' announced sale of
Electric Lightwave to Integra Telecom, for $247 million, does not
significantly alter Citizens' credit profile. With this
announcement, Moody's expects the company to receive between $220
million and $230 million in after-tax cash proceeds from the sale,
in the third quarter 2006. Moody's believes that given the recent
history of Citizens' stock buy-back programs, the company is
likely to use the bulk of the additional cash to buy back stock,
and still repay the scheduled $228 million of maturing debt out of
operating cash flow.
By year end 2006, Moody's expects Citizens' adjusted leverage to
be 3.7x, and generate about $200MM of free cash flow, pro-forma
the sale of ELI. These metrics reinforce Moody's view of the Ba3
corporate family rating and a stable outlook, and incorporate the
belief that the company will not implement a more shareholder
-friendly payout plan in the intermediate term.
For further analysis regarding Citizens, please refer to our Press
Release dated Jan. 30, 2006.
These ratings remain:
Issuer: Citizens Communications Company
* Corporate family rating --Ba3
* Senior unsecured revolving credit facility --Ba3
* Senior unsecured notes, debentures, bonds -- Ba3
* Multiple seniority shelf -- (P)Ba3 / (P)B2
Outlook Stable
Issuer: Citizens Utilities Trust
* Preferred Stock (EPPICS) - B2
Outlook Stable
Citizens Communications is an ILEC providing wireline
telecommunications services to approximately 2.24 million access
lines in primarily rural areas and small- and medium-sized cities.
The company is headquartered in Stamford, Connecticut.
COLLINS & AIKMAN: Wants Court to OK Intellectual Property Transfer
------------------------------------------------------------------
On July 15, 2005, Collins & Aikman Corporation and its debtor-
affiliates' European companies obtained a "group wide"
administration order pursuant to the jurisdiction of the English
High Court in London. Simon Appell and Alastair Beveridge, among
others, of Kroll UK were appointed joint administrators of each of
the companies. The Administrators act as the European Debtors'
agent with a duty to act in the best interests of their creditors.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, relates that after
the Administration Date, the Administrators marketed the European
Debtors' assets in connection with a potential sale. The initial
sale process focused on (a) a sale of a "core group" of nine
plants, which was subsequently expanded to 12 plants; and (b)
multiple sales of certain individual sites.
One of the European Debtors, Collins & Aikman Europe S.A.,
commonly known as Luxco, owns a controlling equity interest in
Plascar Industria de Componentes Plasticos Ltda, a Brazilian
manufacturer of auto parts. The Administrators engaged
Rothschild, Inc., as investment banker to market Luxco's interest
in Plascar.
On July 29, 2005, the Administrators publicly advertised the
sales in the Financial Times and contacted numerous potential
buyers. The Administrators held discussions with over 100
interested parties, including potential buyers for (a)
substantially all of the European business as a going concern,
(b) groups of plants by country, (c) groups of plants by product
type and (d) individual plants.
On August 10, October 21, and November 4, 2005, bids were
received for the European Assets. Following discussions with the
two major bidders for the "core group" of assets to understand
the relevance of certain conditions placed within their offers,
the Administrators concluded that IAC Acquisition Corporation
Limited should be the successful bidder.
The Administrators then reviewed all of the bids received for
single sites and small groups of sites and determined that those
bids were all less favorable than the bid received from IAC
Acquisition. Therefore, the Administrators decided to proceed
with a sale of the "core group" of assets to IAC Acquisition.
On November 28, 2005, the Administrators and IAC Acquisition
executed a Master Sale Agreement, which contemplates the sale of
substantially all of the European Debtors' assets for a purchase
price in excess of $100,000,000. Under the Master Sale Agreement,
the European Debtors must transfer and license their rights in
certain intellectual property to the Buyer, a portion of which the
Debtors own or have an interest in.
Accordingly, the Debtors ask the U.S. Bankruptcy Court for the
Eastern District of Michigan to approve the transfer and license
of the Intellectual Property Rights. The Debtors, the European
Debtors and the Buyer have negotiated the terms governing the
transfer and license.
To assist in determining and negotiating a fair value for the
Intellectual Property Rights, the Debtors engaged Consor, Inc.,
internationally recognized experts in valuing intellectual
property. The contemplated transfer and license will occur
through the consummation of three separate agreements:
(1) a Transition Services Agreement with the Buyer, which
provides for the continuation of certain information
technology support and related services traditionally
provided by the Debtors to the European Debtors;
(2) an intellectual property license agreement relating to the
license of certain intellectual property used for the
conduct of the business of Plascar; and
(3) an assignment and license agreement relating to the
assignment and license of certain intellectual property
used for the conduct of the business of the European
Debtors.
The Debtors will receive $12,500,000 for the transfer and license
of the Intellectual Property Rights:
-- $11,046,686 will be split between each of the business
units acquired by the Buyer and payable upon the closing of
each sale;
-- $913,288 will be payable on the first closing of the sale
of Luxco's interest in the Italian operations or the assets
of the Italian operations; and
-- $540,026 will be payable on the closing of the sale of
Luxco's interest in Plascar or the assets of Plascar's
operations.
The Debtors believe that the proceeds that they will receive as
part of the transfer and license will increase the value of the
estates. According to Mr. Schrock, the Debtors and their
professionals vigorously negotiated with the Administrators to
secure the highest and best price for the Intellectual Property
Rights. In addition, the Official Committee of Unsecured
Creditors and the Debtors' senior secured lenders were regularly
advised regarding the negotiations with respect to the transfer
and license.
Because the Debtors are one of the largest creditors of the
European Debtors, they stand to gain by consummation of a
successful sale of the European Debtors' assets, Mr. Schrock
explains. The sale of the European Debtors' assets is contingent
on the successful transfer and license of the Intellectual
Property Rights. Therefore, failure to approve the transfer and
license of the Intellectual Property Rights in a timely manner
would place the consummation of the sale at risk, potentially
resulting in a forced liquidation of the European Debtors'
assets.
Mr. Schrock assures the Court that the transfer and license of
the Intellectual Property Rights is the product of good faith,
arm's-length negotiations between the Debtors and the
Administrators, and was negotiated with the active involvement of
the Debtors' officers and representatives. In addition, at all
times, the Committee and the Debtors' senior secured lenders were
advised of the Debtors' dealings with the Administrators and had
input into the negotiations.
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. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000)
COLLINS & AIKMAN: Looks for New Executives to Beef Up Ranks
-----------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Eastern District
of Michigan to employ certain new executives and senior managers
pursuant to the terms of their Key Employee Retention Program.
The Debtors, led by their chief executive officer, Frank Macher,
have been taking a critical look at management resources in a
number of key areas. The Debtors have concluded that certain
changes are necessary to enhance the quality of their senior
management team and improve prospects for maximizing recoveries
for creditors.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, relates that the
Debtors are seeking to fill these critical positions, each of
which is critical to overseeing the success of the Debtors'
business operations:
* Executive Vice President and Chief Technology Officer;
* Executive Vice President Commercial and Program Management;
* Vice President Advanced Manufacturing and Tooling;
* Vice President Finance Plastics; and
* Executive Vice President Human Resources
Employment Agreements
The Debtors want to proceed with employment offers to several new
executives and senior managers.
Mr. Schrock notes that the principal terms of the Employment
Agreements are similar and they include:
A. Annual Base Salaries
Position Annual Base Salary
-------- ------------------
EVP & Chief Technology Officer $400,000
EVP - Commercial & Program Management 425,000
EVP - Human Resources 250,000
VP - Advanced Manufacturing & Tooling 325,000
VP - Finance Plastics 225,000
B. Bonuses
(1) The Executive Vice President and Chief Technology Officer
and the Executive Vice President Commercial and Program
Management will each be paid a guaranteed annual bonus.
The annual bonus percentage will be 50% of the Employee's
base salary for the Employee's first year of employment.
The Employee also will be eligible to participate in the
Success Sharing Plan, under the Debtors' Key Employee
Retention Plan, at the discretion of the chief executive
officer.
(2) The Executive Vice President Human Resources and the Vice
President Advanced Manufacturing and Tooling will each be
entitled to participate in the Debtors' Retention Plan
pursuant to the KERP.
(3) The Vice President Finance Plastics will be paid a
guaranteed annual bonus. The annual bonus percentage for
the Employee will be 30% of the Employee's base salary for
the Employee's first year of employment. The Employee
also will be eligible to participate in the Success
Sharing Plan at the discretion of the chief executive
officer.
C. The Employee will be entitled to fringe benefits and
perquisites and to participate in pension, savings plan and
benefit plans, as are generally made available to similarly
situated executives and senior managers of the company during
the term of the employment agreement.
D. The company will reimburse the Employee for all reasonable
travel, entertainment and other reasonable business expenses
incurred by the Employee in connection with the performance
of his or her duties under the employment agreement, provided
that the Employee furnishes to the company adequate records
or other evidence respecting those expenditures. The
Executive Vice President and Chief Technology Officer will
also receive a moving allowance equal to $150,000.
E. The Executive Vice President and Chief Technology Officer and
Executive Vice President Commercial and Program Management
are each entitled to severance. If the Employee's employment
under the employment agreement is terminated prior to the
expiration of the term of the employment agreement as a
result of a No Cause Termination or a Constructive
Termination, the company will pay and provide to the Employee
base salary for 12 months in the case of the Executive Vice
President and Chief Technology Officer or six months in the
case of the Executive Vice President Commercial and Program
Management, based on the rate of base salary in effect
immediately preceding the Termination Date.
F. Every payment and distribution obligation of the Debtors
under the Employment Agreements will be treated as an
administrative expense pursuant to Section 503(b)(1)(A) of
the Bankruptcy Code.
With the addition of the new executives and senior managers, the
Debtors believe that they will have the resources necessary to
ensure they meet their customer commitments, execute on their
cost savings, successfully launch awarded business and work
toward winning new programs.
"The appointment of the new executives and senior managers will
help the Debtors move forward with their business plan and emerge
from these cases poised to resume business as a strong and viable
automotive industry competitor," Mr. Schrock 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. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000)
COLLINS & AIKMAN: Inks Amended Steam Purchase Deal with Primary
---------------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates ask
permission from the U.S. Bankruptcy Court for the Eastern District
of Michigan to enter into an amended Steam Purchase Contract
agreement with Primary Energy of North Carolina LLC.
The Debtors operate a number of manufacturing plants throughout
the United States, each of which needs utility services based on
the manufacturing processes in those plants. In their plant at
1803 N. Main Street, Roxboro, North Carolina, the Debtors use
steam as part of the manufacturing process. Pursuant to a Steam
Purchase Contract entered into in December 1985, Primary Energy
agreed to provide steam to the Debtors.
On December 23, 2005, the Debtors and Primary Energy amended the
Agreement to provide that:
(a) Starting January 1, 2006, Primary Energy will not provide
the Debtors with compressed air, and Primary Energy will
continue to provide the Debtors with steam.
(b) Starting January 1, 2006, the cost of steam will be set at
a fixed rate rather then determined based on the formula
set forth in the Agreement.
(c) Primary Energy will provide a credit to the Debtors for
$50,000 to be applied in 12 equal monthly amounts.
In addition, the Debtors and Primary Energy executed a new Steam
Purchase Contract on December 23, 2005, with a term that begins
when the original Agreement expires on August 31, 2007.
The New Agreement provides that:
(a) Primary Energy agrees to supply and the Debtors commit to
purchase certain levels of steam generated by Primary
Energy's equipment at a price to be calculated based on
the provisions of the New Agreement.
(b) The term of the New Agreement is from September 1, 2007,
through August 31, 2017, but the Debtors' obligations
under the New Agreement terminate if the Debtors' dying
operations cease at the Roxboro, North Carolina plant on
six months' notice to Primary Energy.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, relates that
before agreeing to the Amendment and the New Agreement, the
Debtors explored alternative suppliers and considered building
their own steam generation facility. If the Debtors were to
pursue an alternative to Primary Energy, they would have to
contract with that alternative supplier in the near term so that
the proper infrastructure could be constructed, at significant
costs, in time to replace Primary Energy when the original
Agreement expires.
Because pursuing an alternative supplier is time and capital
intensive, the Debtors lose leverage in their negotiations with
Primary Energy as the expiration of the Original Agreement gets
closer, Mr. Schrock explains. Building their own steam
generating facility would require significant capital
expenditures by the Debtors for assets that likely would not be
marketable if the Debtors later choose to exercise their
bankruptcy rights and exit the Roxboro, North Carolina plant.
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. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000)
COMMERCE ONE: Sells All Assets to Perfect Commerce
--------------------------------------------------
Barbara Grady of Inside Bay Area reports that Commerce One, Inc.,
has sold its assets to Perfect Commerce, Inc. The transaction
gives Perfect Commerce complete ownership of Commerce One's core
technology and intellectual property, an expanded global presence
and new revenue opportunities. The value of the transaction was
not disclosed.
All Commerce One operations will be integrated into Perfect
Commerce under the leadership of Chairman and CEO Sandy Kemper.
Commerce One President Ches Martin will join Perfect Commerce in a
senior leadership role, initially focusing on merging the
operations of the two organizations. Also, the Professional
Services team of Commerce One, located in Greenville, SC, will
join Perfect Commerce in a variety of roles.
"I am extremely optimistic about the acquisition of Commerce One
by Perfect Commerce and believe it is the most natural progression
for these two companies," said Mr. Martin. "The Greenville team
and I look forward to working with Perfect Commerce management and
staff to ensure a smooth merging of the two organizations and to
continue to provide outstanding customer service."
"This ends the saga of Commerce One as a company," employee Ted
Kinsler told Ms. Grady, adding that the acquisition was good for
customers and better than some alternatives the company could have
faced.
About Perfect Commerce, Inc.
Providing connectivity to trading partners via The Open Supplier
Network(SM) (The OSN(SM)), Perfect(R) Commerce is the largest
provider of On- Demand Supplier Relationship Management (SRM)
solutions with more than 500 clients (over 100 of which are in the
Fortune 500), 165,000 users and 11,500 suppliers. Headquartered in
the metropolitan Kansas City area; with offices in Texas,
California, Nevada and France; Perfect Commerce can be reached at
877.871.3788 or
About Commerce One
Headquartered in San Francisco, California, Commerce One, Inc.
(n/k/a CO Liquidation, Inc.) -- http://www.commerceone.com/--
provides software services that enable businesses to conduct
commerce over the Internet. Commerce One, Inc., and its wholly
owned subsidiary, Commerce One Operations, Inc., filed for
chapter 11 protection on Oct. 6, 2004 (Bankr. N.D. Calif. Case
Nos. 04-32820 and 04-32821). Doris A. Kaelin, Esq., and Lovee
Sarenas, Esq., at Murray and Murray, represent the Debtors in
their restructuring efforts. When the Debtors filed for
bankruptcy, they listed $14,531,000 in total assets and
$12,442,000 in total debts. As of December 2, 2004, Commerce One
estimates that its liabilities owed to creditors total
approximately $9.7 million, including approximately $5.1 million
owed to ComVest.
Plan Distributions to Shareholders
In accordance with the Company's Plan of Reorganization dated
May 20, 2005, which was approved by the United States Bankruptcy
Court for the Northern District of California on July 28, 2005,
Commerce One has paid all claims in full and has made an initial
distribution of $0.11 per share to stockholders of record as of
October 3, 2005. The Company says its stock ledgers are closed
and only those shareholders who were stockholders of record at the
close of business on the Oct. 3 Record Date will receive
distributions from the Company's bankruptcy estate. As provided
by the Confirmed Plan, CO Liquidation says, the Company's stock
transfer agent will not accept or process any requests or
instructions for transfers of the Company's common stock after the
Record Date, and the Company and its representatives will not
recognize any transfer of the Company's common stock after the
Record Date.
CONVALESCENT CENTER: Case Summary & 46 Largest Unsecured Creditors
------------------------------------------------------------------
Lead Debtor: Convalescent Center of Roanoke Rapids, Inc.
dba Convalescent Center of Halifax, Inc.
P.O. Box 1407
Sanford, North Carolina 27330
Bankruptcy Case No.: 06-00310
Debtor-affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Convalescent Center of Sanford, Inc. 06-00311
Convalescent Center, Inc. 06-00312
Type of Business: Convalescent Center operates a nursing home.
Chapter 11 Petition Date: February 3, 2006
Court: Eastern District of North Carolina (Wilson)
Judge: J. Rich Leonard
Debtors' Counsel: Trawick H Stubbs, Jr., Esq.
Stubbs & Perdue, P.A.
P.O. Drawer 1654
New Bern, North Carolina 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
Estimated Assets Estimated Debts
---------------- ---------------
Convalescent Center of $1 Million to $500,000 to
Roanoke Rapids, Inc. $10 Million $1 Million
Convalescent Center of $50,000 to $500,000 to
Sanford, Inc. $100,000 $1 Million
Convalescent Center, Inc. $50,000 to $50,000 to
$100,000 $100,000
A. Convalescent Center of Roanoke Rapids, Inc.'s 20 Largest
Unsecured Creditors:
Entity Claim Amount
------ ------------
Internal Revenue Service $546,768
P.O. Box 21126
Philadelphia, PA 19114
Omnicare of Carolina $90,406
Attn: Manager or Agent
P.O. Box 643396
Cincinnati, OH 45264
Excel Staffing Service $14,102
Attn: Manager or Agent
P.O. Box 6704
Greenville, SC 29606
Halifax Regional Medical $9,079
Attn: Manager or Agent
P.O. Box 1089
Roanoke Rapids, NC 27870
Dominion NC Power $5,577
Eagle Home Medical Group $5,122
EcoLab $4,065
McKesson Medical Surgical $3,328
Direct Supply Equipment $1,486
Reliable Medical Supply $994
Nash Orthopedic Service $630
Roanoke Valley Rescue $480
Halifax Co Emergency Medical $375
Halifax Medical Specialist $354
Bertie Ambulance Service $132
Briggs Corporation $129
SAI Urology, P.A. $56
Davis Refrigeration Service $45
AmeriGas - Weldon $15
Hasler, Inc. $9
B. Convalescent Center of Sanford, Inc.'s 19 Largest Unsecured
Creditors:
Entity Claim Amount
------ ------------
Internal Revenue Service $626,146
P.O. Box 21126
Philadelphia, PA 19114
NeighborCare Pharmacy $106,520
Attn: Manager or Agent
Department AT 40323
Atlanta, GA 31192
M.A.P.P.S., Inc. $70,728
Attn: Manager or Agent
380 Old 41 Highway
Barnesville, GA 30204
Superior Medical Staffing $58,268
Attn: Manager or Agent
109 Monument View Lane
Cary, NC 27519
Division of Medical Assistant $43,833
Genesis Rehabilitation Service $32,907
Nightingale Nursing Service $17,355
American Homepatient $8,226
Blossam Gas, Inc. $2,904
Direct Supply, Inc. $2,390
McGraw Mobile Xray $1,741
Ecolab Pest Elimination $1,130
BFPE International $605
Spectrum Laboratory Net. $536
Excel Staffing Service $351
S. David Ciliberto, MD, PA $318
Doctors Vital Screening $300
Stericycle, Inc. $150
Lowes Business Account $85
C. Convalescent Center, Inc.'s 7 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Xerox Corporation $8,502
Attn: Manager or Agent
P.O. Box 827181
Philadelphia, PA 19182-7598
Medical Support Services $4,667
Attn: Manager or Agent
1130 Kildaire Farm Road
Cary, NC 27511
Manning, Fulton & Skinner $3,476
Attn: Manager or Agent
3605 Glenwood Avenue, Suite 500
Raleigh, NC 27612
North Carolina $1,263
Department of Revenue
Attn: Managing Agent
P.O. Box 25000
Raleigh, NC 27640
The Pilot, LLC $493
MDI Technologies $350
The Herald Sun $222
CONWAY WHOLESALE: Case Summary & 10 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Conway Wholesale Produce, Inc.
1202 Markham
Conway, Arkansas 72032
Bankruptcy Case No.: 06-10381
Debtor affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Raymond and Karen Kelley 06-10382
Type of Business: The Debtor sells fruit, vegetables, and other
agricultural products. Raymond Kelley is the
president and a shareholder of the company.
Chapter 11 Petition Date: February 7, 2006
Court: Eastern District of Arkansas (Little Rock)
Judge: Audrey R. Evans
Debtors' Counsel: Basil V. Hicks, Jr., Esq.
Attorney at Law
P.O. Box 5670
North Little Rock, Arkansas 72119-5670
Tel: (501) 301-7700
Fax: (501) 301-7999
Estimated Assets Estimated Debts
---------------- ---------------
Conway Wholesale Less than $50,000 $1 Million to
Produce, Inc. $10 Million
Raymond and Karen Kelley $1 Million to $1 Million to
$10 Million $10 Million
A. Conway Wholesale Produce Inc.'s 4 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
First State Bank $1,029,553
P.O. Box 966
Conway, AR 72032
Small Business Admin. $190,000
P.O. Box 1229
Little Rock, AR 72203
Affiliated Foods Southwest Judgment $15,804
108 West Third Street
Malvern, AR 72104
Regions Bank Deficiency Balance $7,000
P.O. Box 279
Conway, AR 72032
B. Raymond and Karen Kelley's 6 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
First State Bank $1,029,553
P.O. Box 966
Conway, AR 72032
Small Business Admin. $42,000
P.O. Box 1229
Little Rock, AR 72203
Paul Colonese $16,850
1422 Caldwell
Conway, AR 72034
Affiliated Foods Southwest Judgment $15,804
108 West Third Street
Malvern, AR 72104
Regions Bank Deficiency Balance $7,000
P.O. Box 279
Conway, AR 72032
One Bank $5,000
400 W. Capitol, Suite 2891
Little Rock, AR 72201
CYBERCARE INC: Has Interim Access to Cast-Crete DIP Loan
--------------------------------------------------------
The Hon. Michael G. Williamson of the U.S. Bankruptcy Court for
the Middle District of Florida approved, on an interim basis,
CyberCare, Inc., and CyberCare Technologies, Inc.'s request to
secure postpetition financing from Cast-Crete Corporation.
Judge Williamson allows the Debtors to initially borrow $56,000
from Cast-Crete so they can pay:
-- a retainer to Marshall & Stevens, which they hired as
valuation experts,
-- the costs of publishing notice of the claims bar date in
The Wall Street Journal, and
-- the cost of mailing plan solicitation materials.
The Debtors' DIP obligations to Cast-Crete will be secured by an
unavoidable first-priority lien on all of the Debtors' assets not
subject to a prior lien. Cast-Crete will have a junior lien on
any collateral that is already subject to a valid and perfected
lien. The DIP loan will also have super-priority administrative
expense status in the Debtors' bankruptcy case.
DIP Loan Details
The Debtors sought permission from the Bankruptcy Court to obtain
up to $500,000 of postpetition financing from Cast-Crete. Cast-
Crete provided the Debtors with over $1 million in prepetition
loans to fund its operations. Prior to the petition date, the
Debtors had also explored a possible merger with Cast-Crete.
The Debtors asked the Bankruptcy Court to consider approving an
interim advance of up to $250,000. At the Jan. 23, 2006, Interim
DIP Financing Hearing, the Debtors reduced their initial funding
request to $56,000.
Cast-Crete's loan will accrue 12% annual interest from the date of
each loan advance until all outstanding amounts are repaid in
full. All amounts will become due and payable and interest will
accrue at 20% per annum if the Debtor defaults on the terms of the
DIP loan. Events of default include:
a) a transfer of venue for the Debtor's cases anywhere other
than the U.S. Bankruptcy Court for the Middle District of
Florida, Tampa Division;
b) discovery of any incurable defect in the Debtors'
intellectual property that would prevent its profitable
use;
c) the death, incapacity, resignation or termination of Joe
Forte, the Debtor's Chief Executive Officer; and
f) the Debtors' failure to timely negotiate mutually
acceptable licenses or agreements allowing the profitable
use of their intellectual property.
Cast-Crete agrees to provide the DIP loan facility for six months,
meaning the facility matures on or about July 23, 2006.
Headquartered in Tampa, Florida, CyberCare, Inc., f/k/a Medical
Industries of America, Inc., is a holding company that owns
service businesses, including a physical therapy and
rehabilitation business, a pharmacy business, and a healthcare
technology solutions business. The Company and its debtor-
affiliate, CyberCare Technologies, Inc., filed for chapter 11
protection on Oct. 14, 2005 (Bankr. M.D. Fla. Case No. 05-27268).
Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$5,058,955 in assets and $26,987,138 in debts.
DANKA BUSINESS: S&P Lowers Corporate Credit Rating to B- from B
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured ratings on St. Petersburg, Florida-based
Danka Business Systems PLC to 'B-' from 'B'. The downgrade
reflects continued year-over-year revenue declines and weak
profitability. The outlook is negative.
"The ratings on Danka reflect a leveraged financial profile,
limited liquidity and a second-tier position in the highly
competitive office equipment market," said Standard & Poor's
credit analyst Martha Toll-Reed.
Danka is an independent supplier of office imaging equipment and
related services and supplies. Annual revenue levels have fallen
over the past four years, driven by:
* an ongoing customer-base transition from analog to digital
copiers;
* declines in Danka's installed equipment base; and
* a strategic emphasis on more profitable multi-vendor
equipment service revenue generation.
Despite ongoing cost reduction actions, EBITDA levels remain weak.
In the quarter ended Dec. 31, 2005, EBITDA (excluding
restructuring charges and other one-time items) was about $4.5
million, as compared to about $7.6 million in the year-earlier
period. The current rating incorporates the expectation that
restructuring actions will lead to year-over-year EBITDA
improvement over the next several quarters. Given weak
profitability, leverage is high; total debt to EBITDA is in excess
of 10x.
Danka's free operating cash flow varies seasonally, but
historically has been modestly positive on an annual basis. Weak
earnings and working capital usage resulted in negative operating
cash flow of $50 million for the nine months ended Dececember
2005. While ongoing capital expenditures should be modest (less
than $20 million per annum) near-term operating cash flow,
including the cash impact of restructuring charges, is expected to
remain weak.
DAVE & BUSTER'S: Moody's Rates Proposed $175 Mil. Sr. Notes at B3
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating to
Dave & Buster's, Inc., along with a B1 rating for the proposed
senior secured credit facilities and a B3 rating for the proposed
$175 million senior unsecured notes. At the same time, a SGL-3
Speculative Grade Liquidity rating was also assigned. Proceeds
from the newly rated debt together with $108 million in new cash
equity will fund the leveraged buyout of the company by Wellspring
Capital Management LLC, a private equity sponsor. These assigned
ratings for D&B are subject to review of final documentation. The
ratings outlook is stable.
Ratings assigned with a stable outlook:
-- B2 corporate family rating;
-- B1 for the $60 million senior secured revolving credit
facility maturing in 2011;
-- B1 for the $100 million senior secured term loan B maturing
in 2013;
-- B3 for the $175 million senior unsecured notes maturing in
2014;
-- SGL-3 for the Speculative Grade Liquidity rating.
The B2 corporate family rating reflects D&B's projected highly
levered capital structure, modest free cash flow available for
debt reduction after growth capital expenditures, the wide range
of competition for entertainment revenues and the company's
limited scale, scope and diversification stemming from an existing
small number of operating units. The rating also incorporates
D&B's leading niche position in the combined food & entertainment
industry, fairly consistent financial performance over the past 5+
years, sizable tangible assets in relation to other restaurant
companies and relatively modern store base due to its policy of
continuous capital reinvestment.
The B1 ratings on the revolving credit facility and term loan B,
both secured by a perfected first priority interest in all
tangible and intangible assets of D&B, recognize the structurally
senior position of this debt class in relation to the senior
unsecured notes. In a hypothetical default scenario, Moody's
believes that the orderly liquidation value of monetizable assets
such as inventory and property, plant and equipment, with a
combined total in excess of $375 million at October 30, 2005,
would be sufficient to cover the total bank commitments, even with
the revolver fully drawn. Therefore, notching above the B2
corporate family rating is warranted in this particular debt
structure. Term loan B will amortize at 1% per year with the
balance due in 2013.
Moody's expects the secured credit facilities to include at least
two financial covenants -- a minimum fixed charge coverage ratio
and a maximum total leverage ratio -- with levels yet to be
determined, and that the final covenant levels will provide
sufficient cushion for D&B to remain in compliance at least
through the intermediate term to ensure uninterrupted access to
the revolving credit facility.
Additionally, the $60 million revolver will include a letter of
credit sub-facility, also yet to be determined, which will reduce
the revolver's borrowing availability. The B3 rating on the
senior unsecured notes reflects the structurally subordinated
position of these noteholders in relation to the senior secured
lenders and is notched one level below the corporate family rating
to also reflect the weaker asset or enterprise coverage for this
class of debt; however, both classes of debt will benefit from
upstream guarantees of all domestic subsidiaries.
D&B's unique combination of providing quality food and a variety
of games in relatively large attractive venues targeted
specifically at adults has resulted in nationwide brand
recognition and a well-established concept that began in 1982. The
company has expanded at a measured pace, contributing to the fact
that no D&B location has ever been closed. While new stores are
immediately profitable, the honeymoon effect typically begins to
fade after about two years, resulting in lower but stable revenue
and EBITDA levels beyond that point.
Longer-term growth is expected to be primarily driven by
reasonably-paced new unit expansion plus several marketing
initiatives focused on increasing the frequency of visits by its
core customer base. In addition, completion of the re-branding of
the remaining Jillian's stores, a one-time direct competitor of
D&B's that was acquired in 2004, into D&B Grand Sports Cafe should
also contribute to solid top-line growth. Moody's acknowledges
that D&B's business is fairly capital intensive due to its policy
of continually updating its store base; the $6 to $9 million
investment required to open a new store and its non-franchising
operating model; however, Moody's expects expansion capital
expenditures to be managed effectively and prudently to allow the
company to de-lever at a reasonable pace over the next few years.
The stable outlook anticipates the continuation of strong margins,
positive contributions from existing and new units, improving
operating earnings and steady free cash flow generation which
should reduce leverage and improve financial flexibility over
time. On a pro forma latest twelve month basis at October 30,
2005 using Moody's standard adjustments, debt-to-EBITDA is
approximately 6.1x, EBITDA-to-interest expense is roughly 2x and
free cash flow-to-debt is 5%.
Moody's expects free cash flow generation, which has recently
benefited from new store openings, Jillian's rebranding and recent
marketing promotions that have driven five consecutive months of
positive same store sales growth at mature stores, to steadily
build over the next few years despite an expected increase in
expansion capital expenditures. D&B has a history of accelerating
debt reduction with excess cash generation when unit expansion has
been reduced or delayed.
Better than expected cash generation and accelerated debt
reduction such that debt-to-EBITDA falls below 5.5x, EBITDA-to
-interest approaches 3x and free cash flow-to-debt exceeds 8%
could result in positive rating pressure. Conversely, if debt-to
-EBITDA were to increase to 6.5x or higher and free cash flow-to
-debt fell below 3% on a sustained basis due, in part, to either
overly aggressive unit expansion or a decline in operating
earnings a negative change in the outlook or rating could be
triggered.
The SGL-3 rating reflects adequate liquidity and Moody's
expectation that D&B's internally generated cash flow coupled with
modest seasonal borrowings under the revolving line of credit will
be sufficient in funding upcoming debt obligations, growth capital
expenditures and other internal investments over the next 12
months. Borrowings under the $60 million revolver are expected to
be needed periodically for new construction expenditures rather
than a permanent form of capital. The revolver is expected to
have nearly $54 million of availability at transaction closing
allowing for about $6 million of issued letters of credit.
There is Material Adverse Change representation required for each
individual borrowing in addition to one business day's notice
required to obtain funds. While financial covenant levels have yet
to be set, Moody's expects sufficient cushion to warrant complete
access to the facility at least over the intermediate term. With
all of D&B's tangible and intangible assets pledged to the bank
credit facilities, potential alternative sources of liquidity are
limited.
Dave & Buster's, Inc., headquartered in Dallas, Texas, is a
leading operator of large format specialty restaurant and
entertainment complexes with 46 locations across the United
States.
DECORATIVE SURFACES: Columbus Plant Sale Draws Fire from EPA
------------------------------------------------------------
Ohio's Director of Environmental Protection says Decorative
Surfaces International, Inc., can't sell its Columbus facility
because it failed to provide proof that the prospective buyer, LG
Venture Ohio, Inc., can bring the site into compliance with Ohio
and federal environmental laws.
The Debtor asked the U.S. Bankruptcy Court for the District of
Delaware for permission to sell the Columbus facility to LG
Venture for $300,000, free of any financial or environmental
contingencies, after a long and exhaustive search for a buyer.
The facility has been on the market since 2001.
The Debtor says LG Venture's offer is the only one on the table.
Prior bids from Grant Capital Development Corp. and Campus
Partners for Community Urban Redevelopment fell apart.
LG Venture's $300,000 offer is significantly lower than Grant
Capital and Campus Partners' $385,000 separate bids. In addition
Grant Capital had also agreed to shoulder approximately $70,000 of
closing costs. If the Bankruptcy Court approves LG Venture's bid,
the Debtor would have to pay closing costs out of the proceeds of
the sale.
The Columbus facility is the Debtor's most significant remaining
asset. The proceeds of the sale, minus any closing costs, will be
paid to the Creditor's Trust, established on behalf of unsecured
creditors, in partial satisfaction of its mortgage on the
facility.
Ohio Environmental Action
Timothy J. Kern, Esq., counsel for Ohio's Director of
Environmental Protection, argues that the proposed sale of the
Columbus facility raises significant environmental concerns that
have not been adequately addressed in the Debtor's purchase
agreement with LG Venture.
The Debtor is in violation of the Environmental Protection
Agency's "Cessation of Regulated Obligations" program because it
failed to conduct closure and corrective actions to ensure proper
disposal of wastes and site security. In June 2005, the EPA asked
the Bankruptcy Court to extend its time to file a request for
payment of administrative expenses. The federal agency asserts
$1,043,358 of administrative claims for the purported removal
hazardous substances in the Columbus facility.
Mr. Kern tells the Bankruptcy Court that the Debtor should not be
allowed to pass its property to an unknown entity and then put the
proceeds of the sale not to the compliance it was required to
maintain, but to monetary creditors.
Mr. Kern says that the Debtor may only sell the property if the
State's interest can be satisfied through the acceptance of money.
In this case, he says, "the State's interest most definitely
cannot be satisfied with a monetary settlement."
Decorative Surfaces International, Inc., manufactures wall
coverings, decorative design components for floor tiled and other
laminates. The Company filed for chapter 11 protection on
March 19, 2002 (Bankr. D. Del Case No. 02-10841). Laura Davis
Jones, Esq., James I. Stang, Esq., Bruce Grohsgal, Esq., and
Robert M. Saunders, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub P.C., represent the Debtor. When the Company
filed for protection from its creditors, it listed estimated
assets of $10 million to $50 million and estimated debts of $50
million to $100 million.
DELPHI CORP: Wants Court OK to Pay UAW And IUE-CWA Advisor Fees
---------------------------------------------------------------
Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code,
Delphi Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
permission to pay financial advisor fees and expenses incurred by:
(i) the United Automobile, Aerospace and Agricultural
Implement Workers of America in connection with its
retention of Lazard Freres & Co. LLC and Milliman, Inc.;
and
(ii) the International Union of Electronic, Electrical,
Salaried, Machine and Furniture Workers-Communications
Workers of America in connection with its retention of
Chanin Capital Partners L.L.C.
To address their deteriorating financial performance, the
Debtors, along with General Motors Corporation, have engaged in
negotiations with the Unions regarding the Debtors' proposals to
modify the restrictive terms and costs imposed by the existing
labor agreements.
The UAW and the IUE-CWA represent some 95% of the Debtors' U.S.
hourly employees working at different facilities on different
product lines.
The Unions have requested that Delphi pay for the Financial
Advisors who will assist the Unions in the myriad of issues
expected to arise in connection with the due diligence analysis
and the restructuring discussions with the Debtors and GM:
(a) $175,000 per month to Lazard, plus an additional amount
for related expenses;
(b) $175,000 per month to Chanin, plus an additional amount
for related expenses; and
(c) up to $100,000 per month to Milliman, plus an additional
amount for related expenses.
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Chicago, Illinois, relates that, among other things,
Lazard and Chanin will:
-- independently review and analyze the Debtors'
business, operations, financial condition, and prospects,
and related projections;
-- advise and attend meetings of the UAW and the IUE-CWA and
their officers and advisors, as well as meetings with the
Unions and the Debtors; and
-- review and provide analysis to the Unions of the
financial aspects of any proposed modifications to the
Debtors' existing obligations under the collective
bargaining agreements.
The UAW needs Milliman to provide actuarial services related to
the Delphi employee benefit programs, including the defined
benefit pension plan, covering UAW-represented Delphi employees.
Milliman's services will include, among other things:
* an analysis of the current plans;
* performing expense and liability analyses regarding the
plans;
* actuarial and financial evaluation of proposals and
scenarios regarding the plans; and
* consultation regarding pension and other benefits matters
in connection with the restructuring and its overall
effect on UAW-represented Delphi employees.
The Unions and the Debtors have agreed that the Debtors will not
be obligated to pay the Advisor Fees unless:
(a) the Advisor Fees paid by the Debtors will be applied
against, and be considered part of, any distribution in
respect of any resolution of any claims the Unions may
have -- without diminishing any claims employees may have
-- against the Debtors, whether by settlement agreement or
judgment of the Court;
(b) the Debtors will maintain a unilateral right to terminate
the commitment to pay the Advisor Fees at any time upon
30 days' notice to the Unions;
(c) the Debtors will not be party to any engagement agreement
between the Unions and their Financial Advisors and will
not assume or be subject to any obligations or liabilities
arising as a result of the engagement except with respect
to the payment of the Advisor Fees;
(d) subject to the monthly caps and the agreed terms, each
Financial Advisor may seek, in its first request for
compensation and reimbursement of expenses, compensation
for work performed and reimbursement for expenses incurred
during the period beginning on the date of the Financial
Advisor's retention and ending on the date of the request:
Firm Retention Date
---- --------------
Lazard November 1, 2005
Chanin November 21, 2005
Milliman November 22, 2005
(e) prior to the payment of any Advisor Fees, each Financial
Advisor will be required to submit to the Debtors and the
Creditors' Committee statements specifying the services
performed and the disbursement and expenses incurred, and
will provide the supporting documentation for each
statement; and
(f) in the event that either the Debtors or the Creditors
Committee have an objection to any of the compensation or
reimbursement sought in a particular statement, the
Debtors will withhold payment of that portion of the fee
statement to which the objection is directed until the
time as the objection is resolved or so ordered by the
Court.
The Creditors Committee and the Unions are in talks to agree
upon circumstances under which the Committee may terminate the
commitment to pay the Advisor Fees.
Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology. The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide. The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts. As of
Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530
in total assets and $22,166,280,476 in total debts. (Delphi
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
DELPHI CORP: Panel Taps Jefferies & Company as Investment Banker
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Delphi
Corporation and its debtor-affiliates' chapter 11 cases seeks the
U.S. Bankruptcy Court for the Southern District of New York's
authorization to retain Jefferies & Company, Inc., as its
investment banker and financial advisor, effective as of
October 18, 2005.
David Daigle of Capital Research & Management Company, a member
of the Creditors Committee, explains that the services of
Jefferies are necessary and appropriate to enable the Committee
to evaluate the complex financial and economic issues related to
the Debtors' reorganization proceedings and to effectively
fulfill its statutory duties.
The Creditors Committee selected Jefferies because of its
expertise in providing financial advisory services to debtors and
creditors in restructurings and distressed situations. Since
2000, the employees of Jefferies have been involved in over 100
restructurings, including the Chapter 11 cases of AmeriServe Food
Distribution, Inc., Ames Department Stores, Inc., Diamond Brands
Operating Corp., Federal Mogul Corporation, Heartland Wireless
Communications, ICO Global Communications Services Inc.,
International Wireless Communications. Inc., Kaiser Group
International. Inc., Amerco, Inc., Budget Group, Inc., Exide
Technologies Inc., Formica Corp., Atkins Nutritionals, Inc., WXH
Corp., XO Communications Inc., and VF Brands International.
Pursuant to the engagement, Jefferies agrees to:
(a) become familiar with and analyze the Debtors' business,
operations, assets, financial condition and prospects;
(b) advise the Creditors Committee on the current state of the
"restructuring market";
(c) assist and advise the Creditors Committee in examining
and analyzing any potential or proposed strategy for
restructuring or adjusting the Debtors' outstanding
indebtedness, labor costs or capital structure, whether
pursuant to a plan of reorganization, sale of assets or
equity under Section 363 of the Bankruptcy Code, a
liquidation, or otherwise, including, where appropriate,
assisting the Committee in developing its own strategy for
accomplishing a Restructuring;
(d) assist and advise the Creditors Committee in evaluating
and analyzing the proposed implementation of a
Restructuring, including the value of the securities, if
any, that may be issued under any plan of reorganization
confirmed in the Debtors' cases; and
(e) render other financial advisory services as may from time
to time be agreed upon with the Creditors Committee,
including, without limitation, providing expert testimony
and other expert and financial advisory support related to
any threatened, expected, or initiated litigation.
Pursuant to the terms of an Engagement Letter, dated December 19,
2005, Jefferies will be paid:
(a) a $175,000 monthly fee;
(b) a transaction fee equal to:
(1) 0.5% of the Total Consideration greater than $0.50 up
to and including $0.75 per $1.00 of allowed unsecured
claim;
(2) 0.75% of the Total Consideration greater than $0.75
per $1.00 of allowed unsecured claim; and
(3) reimbursement of out-of-pocket expenses.
The Total Consideration is the aggregate consideration, if any,
paid by the Debtors on account of allowed unsecured claims
pursuant to the Plan -- including any amounts in escrow -- but
excluding any consideration paid on account of allowed claims of
the Pension Benefit Guaranty Corporation, or any assignee
thereof.
The Transaction Fee will not be less than $2,000,000 or greater
than $10,000,000, however Jefferies has reserved the right to
request modification of the Cap.
The Transaction Fee will be payable on the earlier of (a) the
date of the receipt of initial distributions by the Debtors'
unsecured creditors and (b) the effective date of the Plan.
At any time during the time of Jefferies' engagement, the
Creditors Committee may, in its sole discretion, on at least 15
days' prior notice to Jefferies, require the Firm to cease to
provide services for one or more consecutive months, not to
exceed three months in the aggregate.
Jefferies will not be entitled to the Monthly Fee with respect to
the No-Service Period. Half of the Monthly Fees actually paid by
the Debtors commencing with the 19th Monthly Fee will be credited
against the Transaction Fee.
The Creditors Committee also requests that the Debtors' estates
indemnify Jefferies for any claims and liabilities in connection
with its services provided to the Committee.
William Q. Derrough, a managing director of Jefferies, assures
the Court that the Firm's relationships with, or representations
of, potential parties-in-interest concern matters unrelated to
the Debtors. Jefferies previously represented:
-- Goldman Sachs,
-- Gulf Stream Resources,
-- Oak Hill Securities Fund, L.P.,
-- RBC Bearings,
-- Trico Marine Services,
-- Norsk Hydro ASA,
-- Viasystems,
-- AT&T Wireless,
-- Time Warner Inc.,
-- L-3 Communications, and
-- MSX International
Mr. Derrough discloses that Jefferies' equity trading department
has from time to time made a market in and bought or sold or
otherwise effected transactions for customer accounts and for its
own account in the securities of the Debtors through its
department.
He notes, however, that the Trading Desk is not and was not an
investment banker for any outstanding security of the Debtors in
connection with the offer, sale or issuance of a security of the
Debtors. Moreover, the Trading Desk is physically separate from
and does not share any information with the investment banking
group retained by the Creditors Committee. A customary
securities "information wall" exists between Jefferies'
investment banking group and the Trading Desk.
Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology. The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide. The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts. As of
Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530
in total assets and $22,166,280,476 in total debts. (Delphi
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
DELTA AIR: Judge Rules in Favor of Retired Delta Pilots
-------------------------------------------------------
According to a ruling made on Monday, Feb. 6, 2006, by a
bankruptcy court judge, retired Delta Air Lines pilots could
receive a greater say in the airline's restructuring plans.
According to The Associated Press, the judge ruled that the
retired pilots deserved under law to have an official say in how
Delta would restructure in bankruptcy and how that could affect
their retirement benefits.
The Air Line Pilots Association had reportedly declined to
represent the retired pilots in an attempt to maintain benefits
for the airline's current pilots.
In addition the judge also ruled that the airline can carry on
making use of funds set aside for a disability and survivors trust
to meet other financial obligations whilst in Chapter 11, but it
must continue making payments to retirees and other beneficiaries.
A committee representing the retirees, appointed by the court,
wanted to make it a requirement for the airline to have the
approval of its retirees before using funds from the disability
and survivors trust, The Associated Press reported.
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.
DOLORES WIEKHORST: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Dolores Louise Wiekhorst
559 Waterloo Drive
Waterloo, Nebraska 68069
Bankruptcy Case No.: 06-80101
Chapter 11 Petition Date: February 3, 2006
Court: District of Nebraska (Omaha Office)
Judge: Chief Judge Timothy J. Mahoney
Debtor's Counsel: Howard T. Duncan, Esq.
Howard T. Duncan, P.C., L.L.O.
1910 South 72nd Street, Suite 304
Omaha, Nebraska 68124-1734
Tel: (402) 391-4904
Fax: (402) 391-0088
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Liberty Mutual Insurance Lawsuit $3,000,000
Interchange Corporate Center
450 Plymouth Road #400
Plymouth Meeting, PA 19462
Heritage Group Inc. Loan $400,000
P.O. Box 329
Wood River, NE 68883
Rinker Bond $330,000
P.O. Box 318
Valley, NE 68064
Consolidate Concrete Account Bond $200,400
9555 South 147th Street
Omaha, NE 68138
Holcim (US) Inc. Bond/Lawsuit $131,324
75 Remittance Drive, Suite 6430
Chicago, IL 60675-6430
Govic Grading Bond $62,543
6622 Country Sqare Lane
Omaha, NE 68152
Domivon Construction Company Bond $41,791
80237 Berggren Road
P.O. Box 48
Scottsbluff, NE 69363-0048
Ready Mix Concrete Bond $39,999
P.O. Box 3867
Omaha, NE 68103-0867
J Pettiecord Trade Debt $27,527
5043 NE 22nd Street
Des Moines, IA 50313
Conreco Account- $27,426
4901 G Street Bonding
Omaha, NE 68117
Shieldberg Construction Lawsuit $25,229
P.O. Box 358
Greenfield, IA 50649
Martin Marrietta Bond $22,227
P.O. Box 310013
Raleigh, NC 27622-0013
Mallard Sand & Gravel Bond $21,213
P.O. Box 630
Valley, NE 68064
Ivy Steel & Wire Account- $21,000
Attn: Thomas J. Walsh Bond
Old Orchard West
13304 W. Center Road, Suite 222
Omaha, NE 68144-3456
Qwest Trade Debt $17,258
P.O. Box 2348
Seattle, WA 98111-2348
Schildberg Construction Co. Trade Debt $17,000
P.O. Box 358
Kesley, IA 50649
Todco Bonding $16,817
4660 G Street
Omaha, NE 68117
Inspro Insurance Trade Debt $16,568
100 East 6th Street
P.O. Box 689
Fremont, NE 68026-0689
Vangaurd Products Trade Debt $16,328
c/o Berlin Wheeler
2942-A Wanamaker Drive, Suite 200
Topeka, KS 66614
Tadros Associates LLC Services-Bond $15,000
6910 Pacific Street, Suite 204
Omaha, NE 68106-1045
DONALD GATZKE: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Donald A. Gatzke
243 Lake Blaine Drive
Kalispell, Montana 59901-7629
Bankruptcy Case No.: 06-60037
Type of Business: The Debtor is a retired teacher.
Chapter 11 Petition Date: February 6, 2006
Court: District of Montana (Butte)
Judge: Ralph B. Kirscher
Debtor's Counsel: Gregory A. Luinstra, Esq.
John P. Paul, Esq.
Alexander, Baucus, Paul & Young, PLLC
P.O. Box 3169
Great Falls, Montana 59403
Tel: (406) 761-4800
Total Assets: $7,868,243
Total Debts: $2,883,494
Debtor's 3 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
MBNA Platinum Plus Credit Card $100,060
P.O. Box 15288
Wilmington, DE 19886-5288
Discover Platinum Credit Card Credit Card $34,370
P.O. Box 15192
Wilmington, DE 19850-5192
U.S. Bank Line of Credit $11,804
P.O. Box 6352
Fargo, ND 58125-6352
DURATEK INC: S&P Puts BB- Corporate Credit Rating on Neg. Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Duratek
Inc. on CreditWatch with negative implications, including the
'BB-' corporate credit rating. The CreditWatch placement followed
the announcement that the Columbia, Maryland-based company
executed a definitive merger agreement, providing for the
acquisition of Duratek by unrated EnergySolutions LLC (formerly
known as Envirocare of Utah LLC), a Salt Lake City, Utah-based
radioactive waste services company.
Based on preliminary plans, EnergySolutions will acquire all
outstanding shares for $396 million, which includes the assumption
of Duratek's outstanding debt. The details of the acquisition
financing have not been announced but are expected to include a
combination of debt, cash held by EnergySolutions, and equity
provided by the owners of EnergySolutions.
"The CreditWatch listing indicates that the ratings could be
lowered modestly or affirmed depending on the amount of debt in
the financing plan and other important factors including a review
of the business profile of the combined company, operating
prospects for the next several years, and the financial policy of
EnergySolutions following the transaction," said Standard & Poor's
credit analyst Robyn Shapiro.
The merger is subject to approval by Duratek's stockholders,
regulatory approval, and other customary closing conditions
contained in the merger agreement. Duratek expects to submit the
merger to stockholders for consideration during the second quarter
of 2006. Standard & Poor's would expect to withdraw its ratings
on Duratek if the company is acquired by EnergySolutions as
proposed.
Duratek provides radioactive materials disposition and nuclear
facility operations for commercial and government customers. It
had sales of about $300 million for the 12 months ended
Sept. 30, 2005. The combination with EnergySolutions' existing
capabilities in the disposal of radioactive waste should broaden
the combined company's position as a leading provider of waste
services and solutions to the nuclear energy industry.
DURATEK INC: Merger Agreement Cues Moody's to Affirm B1 Ratings
---------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of Duratek,
Inc., following Feb. 7, 2006's announcement of a definitive
merger agreement providing for the acquisition of Duratek by
EnergySolutions, formerly known as Envirocare of Utah, LLC. The
combination will result in an integrated environmental services
company focusing on hazardous waste removal and disposal for
government and the nuclear industry. The merger is subject to
approval by Duratek's stockholders and government regulators.
Moody's affirmed these ratings:
* B1 rating on the $30 million secured revolving credit
facility due 2008;
* B1 rating on the $69 million secured term loan B due 2009;
* B1 Corporate Family Rating.
The ratings outlook remains stable.
The reported transaction price is $396 million, including the
refinancing of Duratek's $69 million of long term secured bank
debt outstanding as of Dec. 31, 2005. The transaction values
Duratek at about 8.8 times reported EBITDA for the twelve-month
period ending Dec. 31, 2005 (about 7.5 times 2004 EBITDA).
Moody's anticipates that Duratek's shareholders will approve the
merger in the second quarter, while a final decision by antitrust
regulators is likely to take several months. Moody's will review
the ratings once further information becomes available regarding
the structure of the proposed financing or other material
developments.
The affirmation takes into account three key factors:
i) Moody's views the acquisition positively given that
Duratek's financial performance has experienced substantial
volatility, albeit within the tolerance of the existing
ratings. Despite its relatively low leverage, its business
on a standalone basis is subject to the incidence of long
-term contracts and fluctuations in government spending on
environmental clean-up projects. Large swings in accounts
receivable mean that operating cash flow may not be
sufficient to cover investments in working capital in any
one period. These factors, in combination with a lower
number of new projects in the Commercial Services segment
in 2005 and energy increases, resulted in substantial
volatility in financial performance and cash generation in
2005.
ii) The acquirer brings to the table an array of hard-to
-acquire permits and licenses relating to the disposal of
Class A low-level radioactive waste including contaminated
soils and debris from government and commercial clean-up
sites and, also, waste produced by the extraction or
concentration of uranium. The enhanced scale and scope of
the combined entity's operations will position it well to
service a diverse range of clients and to moderate the
cyclicality in Duratek's revenue and cash flow stream.
iii) Although the acquisition will involve the issuance of debt
and the use of cash held by Duratek, part of the
acquisition price will be provided in the form of equity by
the owners of EnergySolutions.
The stable outlook is supported by Duratek's relatively low level
of outstanding indebtedness as of Dec. 31, 2005 of $69 million,
and adequate liquidity under the company's $30 million revolving
line of credit to fund working capital requirements. As of Sept.
30, 2005, the company had no outstanding supplemental letters of
credit and had $1.8 million in borrowings outstanding under the
revolving line of credit leaving $28.2 million in availability. As
of Sept. 30, 2005, the company was in compliance with all
financial covenant requirements.
Duratek, Inc., with 2005 revenues of $281 million provides secure
radioactive materials disposition and nuclear facility operations
for commercial and government customers. EnergySolutions is based
in Salt Lake City, Utah, and provides nuclear waste management
services and solutions. The proposed combined organization will
manage over 2000 employees in 40 states and internationally.
EnergySolutions is owned by a private investor group led by
Lindsay Goldberg & Bessemer, Peterson Partners and Creamer
Investments.
EDS CORP: Earns $112 Million of Net Income in 2005 Fourth Quarter
-----------------------------------------------------------------
EDS (NYSE: EDS) reported fourth quarter net income of $112 million
versus net income of $53 million in last year's fourth quarter.
EDS posted fourth quarter total revenue of $5.15 billion from
$5.09 billion in the year-ago quarter.
EDS posted free cash flow of $143 million in the fourth quarter,
an improvement of $27 million versus the year-ago quarter.
"EDS made significant progress in 2005 financially and
competitively," EDS Chairman and CEO Mike Jordan, said. "We
dramatically improved our position in the marketplace, addressed
legacy overhangs and set the foundation for sustainable,
profitable growth. Our success in the landmark GM recompete,
ongoing improvements on NMCI, and progress in building and
deploying our Agile Enterprise platform give us confidence our
momentum will carry into 2006."
For full-year 2005, EDS posted earnings of $150 million versus
earnings the prior year of $158 million.
Full-year 2005 revenue reached $19.8 billion, compared to 2004
revenue of $19.9 billion.
Full-year 2005 free cash flow was $619 million, versus $304
million for full-year 2004.
Headquartered in Plano, Texas, EDS -- http://www.eds.com-- is a
leading global technology services company delivering business
solutions to its clients. EDS founded the information technology
outsourcing industry more than 40 years ago. Today, EDS delivers
a broad portfolio of information technology and business process
outsourcing services to clients in the manufacturing, financial
services, healthcare, communications, energy, transportation, and
consumer and retail industries and to governments around the
world.
EDS' outstanding bonds carry Moody's Investors Service's Ba1
rating and Standard & Poor's and Fitch's BBB- ratings. EDS has
$198,380,250 of of 6.334% Senior Notes issued in 2001 coming due
on August 17, 2006.
ELAN SENIOR: Case Summary & 18 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Elan Senior Living, Inc.
821 E Street
Patterson, California 95363
Tel: (209) 892-3487
Bankruptcy Case No.: 06-90040
Type of Business: The Debtor provides short and long-term
residential treatment for persons with mental
and substance-abuse disorders.
See www.thelivingcentertreatment.com
Chapter 11 Petition Date: February 9, 2006
Court: Eastern District of California (Modesto)
Judge: Robert S. Bardwil
Debtor's Counsel: Hilton A. Ryder, Esq.
McCormick Barstow LLP
P.O. Box 28912
Fresno, California 93729-8912
Tel: (559) 433-1300
Fax: (559) 433-2300
Estimated Assets: Less than $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 18 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Troy and Sherry Dorman Shareholder's Loan $900,000
520 Sherry Court
Modesto, CA 95356
Del Puerto Health Care District $120,000
825 E Street
Patterson, CA 95363
SBC $24,140
SBC Yellow Pages $20,000
AICCO, Inc. $15,000
Michael Abbott $5,080
Dave Johnston $3,500
Turlock Irrigation District $2,699
Trident Consulting $1,875
McCarthy, Burgess, Wolff $1,600
Affiliated Consumer Collection $1,500
Control, Inc.
Johns Resso $1,237
PG&E $1,236
MID $710
SBC Payment Center $105
Waste Management $54
Safeguard $20
Gilton Waste $19
EMPIRE STATE: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Empire State Development Corporation
116 Gill Hall Road
Clairton, Pennsylvania 15025
Bankruptcy Case No.: 06-20487
Chapter 11 Petition Date: February 8, 2006
Court: Western District of Pennsylvania (Pittsburgh)
Debtor's Counsel: Robert O. Lampl, Esq.
Law Offices of Robert O. Lampl
960 Penn Avenue, Suite 1200
Pittsburgh, Pennsylvania 15222
Tel: (412) 392-0330
Fax: (412) 392-0335
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $50,000 to $100,000
The Debtor's list of its 20 largest unsecured creditors was not
available at press time.
EQUINOX HOLDINGS: 9% Senior Notes Offering Expires Today
--------------------------------------------------------
On Feb. 8, 2006, Equinox Holdings, Inc. extended the expiration
date of its previously announced cash tender offer for its 9%
Senior Notes due 2009 (CUSIP No. 29445GAD8) to 11:00 a.m., New
York City time, today, Feb. 10, 2006.
In connection with the Offer, the Company is soliciting consents
from holders of the Notes to effect certain amendments to the
indenture governing the Notes, including:
* the elimination of substantially all of the restrictive
covenants,
* the elimination of certain events of default and
* the amendment of certain other provisions contained in the
Indenture and the Notes.
The Offer and the Solicitation are being made pursuant to the
Company's Offer to Purchase and Consent Solicitation Statement
dated Jan. 11, 2006 and the accompanying Consent and Letter of
Transmittal. As of 5:00 p.m., New York City time, on Feb. 8,
2006, the Company had received valid tenders and consents from
holders of approximately $158,315,000 in aggregate principal
amount of the Notes, representing approximately 98.9% of the
outstanding Notes.
Notes may be tendered pursuant to the Offer until the Expiration
Time, unless the Offer is earlier terminated by the Company. The
total consideration to be paid for each $1,000 principal amount of
Notes validly tendered and not withdrawn prior to 5:00 p.m., New
York City time, on Jan. 25, 2006, subject to the terms and
conditions of the Offer and the Solicitation, is equal to
$1,075.64, which includes a consent payment of $50.00 per $1,000
principal amount of Notes. The total consideration for each
$1,000 principal amount of Notes is equal to the present value of
$1,045 on Dec. 15, 2006 plus the sum of the present value of
scheduled payments on such Notes through the First Call Date, in
each case based on a fixed spread pricing formula utilizing a
yield equal to the 2.875% U.S. Treasury Note due Nov. 30, 2006,
plus 50 basis points. The reference yield and the tender offer
yield to calculate the total consideration are 4.532% and 5.032%,
respectively.
Holders who validly tendered their Notes by the Consent Time will
be eligible to receive the total consideration. Holders who
validly tender their Notes after the Consent Time, but on or prior
to the Expiration Time, will be eligible to receive the tender
offer consideration of $1,025.64 per $1,000 principal amount of
Notes tendered, but will not receive the Consent Payment.
Pursuant to the Solicitation, the Company executed a supplemental
indenture to the Indenture on Jan. 25, 2006, to effect the
Proposed Amendments. Adoption of the Proposed Amendments required
the consent of holders of at least a majority of the aggregate
principal amount of the outstanding Notes. The Proposed
Amendments will become operative when the validly tendered Notes
are accepted for purchase by the Company pursuant to the terms of
the Offer.
The Offer and the Solicitation are conditioned on, among other
things, the satisfaction of certain conditions including:
(1) consummation of the merger of R-E Merger Corp., a
Delaware corporation, with and into the Company, with the
Company continuing as the surviving corporation, pursuant
to the terms and conditions of the Agreement and Plan of
Merger dated as of Dec. 5, 2005 among the Company, The
Related Companies, L.P., a New York limited partnership,
and the Buyer;
(2) the receipt by Related Equinox Holdings Corp., which is an
indirect subsidiary of Related, and/or the Buyer of net
proceeds from one or more debt and/or equity financing
transactions in an amount sufficient to fund:
(a) the merger consideration payable pursuant to the Merger
Agreement,
(b) the purchase of all validly tendered Notes pursuant to
the Offer,
(c) the payment of the Consent Payments pursuant to the
Solicitation, and
(d) all premiums, fees and expenses associated with the
foregoing;
(3) the execution and delivery of the Supplemental Indenture to
the Indenture which implements the Proposed Amendments;
(4) the amendment of the Company's credit agreement to permit
the Company to effect the Proposed Amendments and
(5) certain other customary conditions described in the
Statement.
The Company reserves the right to terminate, extend or amend the
Offer or the Solicitation if any condition of the Offer or the
Solicitation is not satisfied or waived by the Company and
otherwise to amend the Offer or the Solicitation in any respect.
Any Notes not tendered and purchased pursuant to the Offer will
remain outstanding and the holders thereof will be bound by the
Proposed Amendments contained in the Supplemental Indenture even
though they have not consented to the Proposed Amendments.
Holders who tender their Notes must consent to the Proposed
Amendments.
Persons with questions regarding the Offer and the Solicitation
should contact the Dealer Manager for the Offer and as the
Solicitation Agent for the Solicitation:
Merrill Lynch & Co.
Telephone (212) 449-4914 (collect)
Toll Free (888) ML4-TNDR
or the Information Agent for the Offer and the Solicitation:
Global Bondholder Services Corporation
Telephone (212) 430-3774 (collect)
Toll Free (866) 470-4200 (toll free)
Copies of the Offer Documents and other related documents may be
obtained from the Information Agent.
Headquartered in New York, New York, Equinox Holdings, Inc. --
http://www.equinoxfitness.com/-- operates upscale, full-service
fitness clubs, catering to the middle- to upper-end market
segment. The company offers an integrated selection of Equinox-
branded programs, services and products, including strength and
cardio training, group fitness classes, personal training, spa
services and products, apparel and food/juice bars. Since its
inception in 1991, Equinox has developed a lifestyle brand that
represents service, value, quality, expertise, innovation,
attention to detail, market leadership and results. As of
Dec. 1, 2005, the company operated 30 Equinox fitness clubs.
At Sept. 30, 2005, Equinox Holdings, Inc.'s balance sheet showed
a stockholders' deficit of $49,365,000, compared to a $40,464,000
deficit at Dec. 31, 2004.
GADZOOKS INC: Judge Hale Confirms Amended Joint Liquidating Plan
----------------------------------------------------------------
The Honorable Harlin DeWayne Hale of the U.S. Bankruptcy Court for
the Northern District of Texas confirmed the First Amended Joint
Plan of Liquidation filed by Gadzooks, Inc., and its Official
Committee of Unsecured Creditors. Judge Hale entered the
confirmation order on Feb. 6, 2006.
The confirmed Amended Joint Plan was orally modified at the
confirmation hearing to make some clarifications and other non-
material, technical changes pursuant to Section 1127 of the
Bankruptcy Code. Judge Hale declared that those modifications
were permissible and did not require re-solicitation of the Plan.
Judge Hale rules that:
1) the Plan complies with all applicable provisions of
Bankruptcy Code as required by Section 1129(a)(1),
Including Sections 1122 and 1123 of the Bankruptcy Code;
2) the Plan proponents proposed the Plan in good faith and not
by any means forbidden by law, pursuant to Section
1129(a)(3) of the Bankruptcy Code;
3) the Plan represents the best interests of the Debtor's
estate and its creditors pursuant to Section 1129(a)(7) of
the Bankruptcy Code and the Plan does not unfairly
discriminate as required by Section 1129(b); and
4) the Plan is feasible pursuant to Section 1129(a)(11) of the
Bankruptcy Code because the Debtor or the Liquidating
Trustee, as applicable, will have sufficient funds to
satisfy their obligations under the Plan.
As reported in the Troubled Company Reporter on Dec. 14, 2006,
pursuant to the Plan, these claims will be paid in full:
* administrative claims;
* priority tax claims; and
* other priority claims.
Holders of claims under the Other Secured Claims class will
receive the property securing their claims. Any remaining claim
deficiency will be treated as an unsecured claim.
Unsecured creditors, owed approximately $8,890,000, will be paid
pari passu from whatever's left of the proceeds from the sale of
the Debtor's estate.
Senior unsecured creditors, owed $26 million, will receive all
payments that would have been paid to noteholders until all of
their claims are satisfied in full.
Noteholders, holding claims aggregating $14 million, will get paid
after senior unsecured creditors are fully paid.
Old common stock, warrants and securities will be cancelled on the
Plan's Effective Date.
Sources of Cash for Plan Distribution
All Cash necessary for the Liquidating Trustee to make payments
under the Plan will be obtained from:
a) funds added to the Debtor's Available Cash from the net
proceeds of the sale of substantially all of the estate's
assets, and the prosecution and enforcement of causes of
action;
b) existing cash balances of the Debtor on the Effective
Date; and
c) the release of any funds held in reserve.
Gadzooks anticipates that the Liquidation Trust will have
approximately $2,175,000 in available funds by September 30, 2006,
the date on which the final installment payment is due from the
purchaser of the Debtor's assets.
Headquartered in Carrollton, Texas, Gadzooks, Inc. --
http://www.gadzooks.com/-- is a mall-based specialty retailer
providing casual apparel and related accessories for youngsters,
between the ages of 14 and 18. The Company filed for chapter 11
protection on February 3, 2004 (Bankr. N.D. Tex. Case No. 04-
31486). Charles R. Gibbs, Esq., and Keith Miles Aurzada, Esq., at
Akin Gump Strauss Hauer & Feld, LLP, represent the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $84,570,641 in total assets and
$42,519,551 in total debts.
GARDENBURGER INC: Court Approves Disclosure Statement
-----------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
approved the adequacy of the Disclosure Statement explaining
Gardenburger, Inc.'s Plan of Reorganization. The Court determined
that the Disclosure Statement contains adequate information -- the
right amount of the right kind of information -- for creditors to
make informed decisions when the Debtor asks them to vote to
accept the Plan.
Terms of the Plan
As reported in the Troubled Company Reporter on Dec. 29, 2005,
under the Plan, holders of Administrative Expense Claims, Priority
Tax Claims, and Priority Unsecured Claims will be paid in full on
the effective date.
General Unsecured Claims will be paid in full in three
installments:
(i) 25% of the allowed claim six months after the effective
date,
(ii) 25% of the allowed claims 12 months after the effective
date, and
(iii) the remaining 50%, 18 months after the effective date.
Holder of General Unsecured Claims will not receive post-petition
interest payments.
Allowed Claims of Unsecured Note Holders will receive, in full
satisfaction of their claims:
(1) 100% of the New Preferred Stock; and
(2) 83% of the New Common Stock.
Holders of Preferred Shareholder Claims, Common Shareholders
Claims and Equity Interest Related Claims won't get anything under
the Plan.
Warehouseman Claims will be treated in accordance with the
Warehouseman agreements.
Plan Funding
The Plan provides that on the effective date, the Reorganized
Debtor will use its Exit Financing and operating revenues to:
(a) pay all obligations under the DIP Financing;
(b) fund its operations and working capital requirements;
(c) pay Court-approved administrative expenses; and
(d) meet other obligations under the Plan.
Exit Financing
Subject to satisfaction of certain conditions, the Debtor's
postpetition credit facilities will be replaced by an Exit
Financing Facility with a maturity date of Nov. 22, 2008.
As reported in the Troubled Company Reporter on Dec. 5, 2005, the
Court approved two postpetition loan agreements giving the Debtor
access to up to $14.7 million of superpriority debtor-in-
possession financing. Wells Fargo Bank, National Association
(acting through its Wells Fargo Business Credit operating
division) and GB Retail Funding, LLC, are the Debtor's
postpetition lenders.
The Court will convene a hearing on Mar. 15, 2006, at 11:00 a.m.,
to consider confirmation of the Debtor's Plan.
Headquartered in Los Angeles, California, Gardenburger, Inc. --
http://www.gardenburger.com/-- makes original veggie burgers and
innovates in meatless, 100% natural, low-fat food products. The
company distributes its meatless products to more than 35,000
foodservice outlets throughout the United States and Canada.
Retail customers include more than 30,000 grocery, natural food
and club stores. The company filed for chapter 11 protection on
Oct. 14, 2005 (Bankr. C.D. Calif. Case No. 05-19539). David S.
Kupetz, Esq., at SulmeyerKupetz, represent the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed $21,379,886 in assets and $39,338,646 in
debts.
GE COMMERCIAL: Moody's Affirms Low-B Ratings on 6 Cert. Classes
---------------------------------------------------------------
Moody's Investors Service upgraded the ratings of two classes
and affirmed the ratings of sixteen classes of GE Commercial
Mortgage Corp., Commercial Mortgage Pass-Through Certificates,
Series 2002-1:
* Class A-1, $31,475,046, Fixed, affirmed at Aaa
* Class A-2, $158,023,000, Fixed, affirmed at Aaa
* Class A-3, $595,249,000, Fixed, affirmed at Aaa
* Class X-1, Notional, affirmed at Aaa
* Class X-2, Notional, affirmed at Aaa
* Class B, $36,349,000, Fixed, upgraded to Aa1 from Aa2
* Class C, $22,070,000, Fixed, upgraded to Aa3 from A1
* Class D, $16,877,000, Fixed, affirmed at A2
* Class E, $10,385,000, Fixed, affirmed at A3
* Class F, $12,983,000, Fixed, affirmed at Baa1
* Class G, $18,174,000, Fixed, affirmed at Baa2
* Class H, $10,386,000, WAC, affirmed at Baa3
* Class J, $18,175,000, Fixed, affirmed at Ba1
* Class K, $16,877,000, Fixed, affirmed at Ba2
* Class L, $6,491,000, Fixed, affirmed at Ba3
* Class M, $7,789,000, Fixed, affirmed at B1
* Class N, $10,386,000, Fixed, affirmed at B2
* Class O, $5,193,000, Fixed, affirmed at B3
As of the Jan. 10, 2006 distribution date, the transaction's
aggregate principal balance has decreased by approximately 4.4% to
$992.5 million from $1.0 billion at securitization. The
Certificates are collateralized by 137 loans, the same as at
securitization. The loans range in size from less than 1.0% to
5.1% of the pool, with the top ten loans representing 26.8% of the
pool. The pool includes one shadow rated loan, representing 5.1%
of the pool. Five loans, representing 5.5% of the pool, have
defeased and are collateralized by U.S. Government securities.
To date the pool has not experienced any losses and there are no
loans in special servicing. Thirty loans, representing 29.4% of
the pool, are on the master servicer's watchlist.
Moody's was provided with year-end 2004 operating results for
100.0% of the pool, excluding the defeased loans, and partial year
2005 operating results for 90.0% of the pool. Moody's weighted
average loan to value ratio for the conduit component is 83.7%,
compared to 84.3% at securitization. Moody's is upgrading Classes
B and C due to stable overall pool performance and increased
credit support.
The shadow rated loan is the 1555 Lundy Parkway Loan, which is
secured by two Class A suburban office buildings located in
Dearborn, Michigan. The two buildings are connected by a center
lobby/atrium and contain 453,000 square feet. The property is
100.0% leased to the Ford Motor Company under a 15-year bondable
net lease expiring in December 2016. The loan has a 15-year term,
coterminous with the lease term and is self-amortizing. Although
the performance of the property has been stable, the shadow rating
of the loan is partially based on the credit quality of Ford,
which has declined since securitization. Moody's current shadow
rating is Ba1, compared to A3 at securitization.
The top three conduit loans represent 8.7% of the pool. The
largest conduit loan is the Scholls Ferry Boulevard Loan, which is
secured by a 203,000 square foot Class A mixed-use development
located in Beaverton, Oregon. The property contains 123,600
square feet of retail space and 79,700 square foot of office
space. The property is 97.1% occupied, essentially the same as at
securitization. The largest tenants include Metro One
Communications. Property performance has improved due to higher
rents and stable expenses. Moody's LTV is 88.4%, compared to
93.5% at securitization.
The second largest conduit loan is the Fresh Pond Shopping Center
Loan, which is secured by a 214,000 square foot community retail
center that is located in Cambridge, Massachusetts. The property
contains 172,000 square feet of retail space and 36,000 square
foot of office space. The property is 97.5% leased, compared to
98.9% at securitization. The largest tenants include Toys"R"Us,
TJ Maxx and Bread and Circus. Moody's LTV is 85.3%, compared to
86.3% at securitization.
The third largest conduit loan is the Plaza at Cedar Hill Loan,
which is secured by a 300,000 square foot community retail center
located in suburban Dallas, Texas. The property is 100.0%
occupied, the same as at securitization. The center is anchored
by Hobby Lobby, Linens-N-Things, Marshalls, Ross Stores, Old Navy,
Office Max and Barnes & Noble. Moody's LTV is 90.5%, compared to
93.6% at securitization.
The pool's collateral is a mix of retail, multifamily, office,
industrial and self storage, U.S. Government securities, mixed use
and lodging. The collateral properties are located in 27 states
and Washington, D.C. The highest state concentrations are Texas,
California, Maryland, Massachusetts and Florida. All of the loans
are fixed rate.
GENTIVA HEALTH: Moody's Rates Proposed $445 Mil. Facility at Ba3
----------------------------------------------------------------
Moody's Investors Service assigned first time ratings to the
proposed $445 million Senior Secured Credit Facility of Gentiva
Health Services, Inc. The proceeds from the facility will be used
to finance the purchase of The Healthfield Group for $454 million,
including the assumption of approximately $184 million of
outstanding Healthfield debt and the payment of transaction costs
and other expenses. Concurrently, Moody's assigned a first time
Speculative Grade Liquidity rating of SGL-2 reflecting the
expectation of good near term liquidity, minimal near-term debt
service requirements and modest capital expenditures. The ratings
outlook is stable.
The new ratings assigned are:
* $75 million Senior Secured Revolver, due 2012, rated Ba3
* $370 million Senior Secured Term Loan B, due 2013, rated Ba3
* Corporate Family Rating, rated Ba3
-- Stable ratings outlook
* Speculative Grade Liquidity Rating, SGL-2
The ratings are subject to the closing of the proposed acquisition
and our review of executed documentation.
Gentiva Health Services, Inc. intends to issue $55 million in
shares of Gentiva stock while paying $399 million to acquire the
Healthfield Group. Gentiva will finance the cash portion of the
transaction as well as other transaction expenses through a
proposed $370 million new Term Loan B and $58 million of cash on
the balance sheet. While Gentiva also has access to a $75 million
senior secured revolver as part of the credit facility, Moody's
anticipates that the company will not need to draw on the facility
to fund the acquisition. Based on the estimated transaction value
of $454 million, Gentiva is paying over 1.5 times pro-forma
revenue and over 9 times pro-forma reported EBITDA for the twelve
months ended Sept. 30, 2005.
The ratings reflect the substantial increase in outstanding debt
to finance this acquisition as well as the high purchase price
being paid for Healthfield. Pro-forma Debt/EBITDA is expected to
be over 4.1 times at closing and throughout the near term. Moody's
notes that prior to this acquisition, Gentiva had no outstanding
debt and had grown internally over the past few years. The
ratings also considers the increase in operating risk associated
with the proposed transaction, including potential turnover of
employees and customers, unexpected costs and liabilities, and the
integration of cultures and systems. Healthfield has been a highly
acquisitive company and had completed 14 transactions in its 20-
year history.
The above risks are mitigated by the following benefits of the
proposed merger:
a) Healthfield enhances Gentiva's product offering through the
addition of its hospice business and the direct provision
of durable medical equipment, respiratory services and home
infusion services;
b) Healthfield strengthens Gentiva's home health operations in
the Southeast, where its presence is significant with 92
locations in 9 states. In addition to Healthfield's strong
market share, the company has a solid relationship with
Blue Cross Blue Shield and a more favorable payer mix with
a high emphasis on serving the Medicare home health market;
c) Healthfield has developed a successful track record of
integrating acquisitions and increasing their revenues by
adding additional services;
d) On a stand-alone basis, Healthfield has substantially
higher operating margins than Gentiva;
e) Healthfield improves Gentiva's diversity in terms of
geography, business mix, payer mix and lessens its reliance
on Cigna.
f) Healthfield also enhances Gentiva's growth strategy for
rolling out specialty programs, providing a platform for
expanding hospice operations, and greater scale to improve
the employment brand and increase clinical capability.
The ratings also consider the low margins at Gentiva's existing
business, high labor costs, the reimbursement risk from lower
rates from government and private payers, and the highly
competitive nature of the home health markets. Moody's is also
concerned with the company's high dependence on its Cigna
contract, which accounted for over 31% of 2004 revenues. While
Cigna recently extended the term of the existing contract to
January 2009, it eliminated the provision of respiratory therapy
service and almost all durable medical equipment, excluding
infusion pumps and wound suction devices. The change in the
provision of these items should result in a reduction of revenues
of $40 million. Moody's does note that Gentiva should be able to
partially offset the impact of this loss of revenue through better
margins and pricing on the new contract, a reduction in costs to
serve the contract, and expansion into new markets. Due to
declining membership, Cigna had been a drain on revenue growth in
the first half of 2005.
The ratings also consider the high turnover and increasing wages
and benefits needed to retain existing employees and management,
which constrains the level of gross margin improvement. Gentiva
also has some sensitivity to unfavorable economic conditions due
to the pressure on Medicaid budgets and rates as well as the
impact on commercial enrollment. Gentiva has significant
regulatory requirements and compliance costs as a provider of home
health to Medicaid and Medicare patients.
The ratings also reflect Gentiva's position as the largest home
health provider. The home health market is a large and growing
market due to patient acceptance and physician preference for home
health, the demographics of an aging population, as well as
government and managed care support of home health as a low cost
alternative to nursing homes and hospitals. In addition, the
business has benefited from medical and technology advances that
allow more illnesses to be treated at home. The home health
market is very fragmented with public companies accounting for
less than 5% of total home health spending. Further, the industry
benefits from stable reimbursement and has lower relative general
and professional liability costs than nursing homes and hospitals.
The ratings also consider Gentiva's success in diversifying its
payer mix by increasing the proportion of higher margin Medicare
business, adding new commercial contracts, and reducing its
reliance on Cigna. The shift in mix toward Medicare and reduced
participation in low-margin, hourly Medicaid business along with
the rollout of specialty programs has enabled the company to
expand its operating margins over the past few years. The
specialty programs enable Gentiva to differentiate itself from its
competitors, delivering superior clinical outcomes while obtaining
higher margins.
The stable ratings outlook incorporates Moody's belief that the
company will be able to grow revenues by 5% to 7% over the next
few years while expanding operating margins. Moody's projections
include a slow and gradual rolling out of cost saving programs,
resulting in less than a 3% reduction in total operating expenses
over a five year period. Moody's projections do not incorporate
any savings on direct provision of care and exclude any potential
revenue synergies from introducing specialty programs in
Healthfield markets or the addition of Hospice to Gentiva's
markets.
Since working capital is expected to be a minimal source of cash,
and capital spending on an annual basis will continue to be less
than 2% of combined revenues, stable mid single digit revenue
growth and higher margins should translate into expected free cash
flow of $45 to $50 million a year, which translates into adjusted
free cash flow to adjusted debt ratio of between 12% to 14%.
The ratings could face upward pressure if there is a more rapid
repayment of outstanding debt along with a greater than
anticipated improvement in revenue growth and operating margins.
The ratings outlook could also improve if the company is able to
sustain credit metrics of adjusted free cash flow to adjusted debt
in the mid-teens range.
The ratings could face downward pressure if there is a significant
deterioration in the company's core business, including lower than
anticipated volume, higher labor costs and substantial pressure on
rates. In addition, the ratings outlook would become unfavorable
if the company's credit metrics of adjusted free cash flow to
adjusted debt were to fall below the 10% level on a sustained
basis.
The Ba3 rating on the senior secured credit facility reflects the
benefit of a first priority lien on substantially all assets of
the Gentiva and its subsidiaries, including a pledge of all stock
in subsidiaries. The facility is also guaranteed by all
subsidiaries, subject to certain expectations. The senior secured
credit facility is rated at the same level as the corporate family
rating as all of the outstanding debt of the combined company is
at the senior secured level.
The assignment of the SGL-2 speculative grade liquidity rating
reflects good liquidity as Moody's expects that internally
generated cash flow will be sufficient to fund working capital,
capital expenditures and debt service over the next twelve months
ending Jan. 31, 2007. This rating also considers the modest
amount of external committed funding the company is anticipated to
have upon the closing the proposed $75 million revolving credit
facility. Since Moody's anticipates that Gentiva will have a
comfortable cushion to remain in compliance with the proposed
financial covenants inherent in the proposed credit facility,
Gentiva should be able to maintain access to this committed source
of funding. However, the SGL rating recognizes the absence of an
alternate source of liquidity, since all assets will be encumbered
under the credit agreement.
The Healthfield Group, founded in 1986, includes four primary
business lines: home health with 92 locations in nine states;
Hospice with 24 locations in three states; home infusion series
with 15 locations in four states; and durable medical equipment
and respiratory services at 31 locations in five states. The
company is a dominant Medicare provider in the Southeast, and
generated over $244 million in revenues and $41 million of
reported EBITDA for the twelve months ended Sept. 30, 2005.
Gentiva is the largest national provider of comprehensive homecare
services. The company offers direct home nursing and therapies,
specialty programs, and a CareCentrix ancillary care benefit
management program for commercial insurers. For the 12 months
ended Oct. 2, 2005, the company generated $872 million and $35
million in reported revenue and EBITDA, respectively.
GERARD NEBEL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Gerard Thomas Nebel
4000 Newman Place
Nashville, Tennessee 37204
Bankruptcy Case No.: 06-00562
Chapter 11 Petition Date: February 9, 2006
Court: Middle District of Tennessee (Nashville)
Debtor's Counsel: Steven L. Lefkovitz, Esq.
Lefkovitz & Lefkovitz
618 Church Street, Suite 410
Nashville, Tennessee 37219
Tel: (615) 256-8300
Fax: (615) 250-4926
Total Assets: $3,221,778
Total Debts: $3,128,909
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service Federal tax lien $600,000
MDP 146 also recorded
801 Broadway
Nashville, TN 37203
Williams, Charlie $375,000
315 Deaderick Street,
Suite 1425
Nashville, TN 37219
Bellsouth Publishing $371,717
Frank Porter, Esq.
8625 Crown Crescent Court,
Suite 110
Charlotte, NC 28227
Wesley, Ralph $250,000
831 Overton Court.
Nashville, TN 37220
Luker, Tanya Branham & Day $150,000
Wilshire Credit Corp. Mortgage $144,741
Stevenson, Wilson $80,000
McDonald, Mark $35,000
State Resources $35,000
Brothers, Betty $35,000
Watts, Janis $22,644
GMAC $19,809
Armstrong Allen $19,304
Suntrust Bank $18,000
Wyatt, Tarrant, & Combs $16,000
Armstrong Allen $12,171
Frazier, Dean, & Howard $10,520
Howell & Fisher $10,000
Armstrong Allen $7,984
Gullett, Sanford, Robinson & $5,944
Martin
GEORGE STROBERG: Case Summary & 13 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: George Stroberg
ods George Stroberg, D.V.M., P.C.
dba Dry Creek Bird & Avenue Hospital
dba Church Ranch Veterinary Wellness Center
6960 Nile Court
Arvada, Colorado 80007-7046
Bankruptcy Case No.: 06-1038
Type of Business: The Debtor operates a veterinary clinic.
Chapter 11 Petition Date: February 8, 2006
Court: District of Colorado (Denver)
Judge: Michael E. Romero
Debtor's Counsel: Jeffrey Weinman, Esq.
Weinman & Associates, P.C.
730 17th Street, Suite 240
Denver, Colorado 80202
Tel: (303) 572-1010
Total Assets: $2,856,755
Total Debts: $5,274,917
Debtor's 13 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Wells Fargo Financial Leasing $53,807
400 Locust Street, Suite 500
Des Moines, IA 50309-2355
Cardmember Service $41,129
P.O. Box 15298
Wilmington, DE 19850-5298
H&H Data $19,000
1243 Sherman Drive, Suite 6
Longmont, CO 80501-6165
Citi Cards $18,942
Suburban Surgical $14,541
Qwest Dex Media $13,900
NEC $9,900
Flatirons Surveying, Inc. $5,544
ECC $5,400
Atlantic Mutual Insurance Co. $5,100
Home Security Centers $1,956
Pet Food, Ltd., Inc. $1,922
Qwest Communication $269
GT BRANDS: Courts Extends Exclusive Plan-Filing Period to March 24
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended, through and including March 24, 2006, the time within
which GT Brands Holdings LLC and its debtor-affiliates' have the
exclusive right to file a chapter 11 plan. The Debtors also
retain the exclusive right to solicit acceptances of that Plan
from their creditors, through and including June 9, 2006.
The Debtors told the Bankruptcy Court that the extension of
exclusivity will give them sufficient time to allow them, the
Lenders and the Creditors Committee to finalize a consensual and
confirmable chapter 11 plan of liquidation.
To demonstrate cause for these extension, as required under 11
U.S.C. Sec. 1121, the Debtors told the Bankruptcy Court:
a) they have completed the sale of substantially all of
their assets and the transition of their business to
Gaiam, Inc. As part of the transition, the Debtors have
vacated their New York and South Carolina facilities, and
are far along in the process of vacating their New Jersey
warehouse, which the Debtors anticipate will be completed
by mid-February;
b) they have established a bar date of Feb. 1, 2006 for the
filing of proofs of claim and requests for the payment of
certain administrative claims, and are sifting through
these claims to help assess the viability of various
plan alternatives; and
c) they have managed their bankruptcy cases in good faith,
and will continue to make all undisputed post-petition
payments as they become due consistent with their ordinary
business practices;
Headquartered in New York, New York, GT Brands Holdings LLC,
supplies home video titles to mass retailers. The Debtors also
develop and market branded consumer, lifestyle and entertainment
products. The Company and its affiliates filed for chapter 11
protection on July 11, 2005 (Bankr. S.D.N.Y. Case No. 05-15167).
Brian W. Harvey, Esq., at Goodwin Procter LLP, represents the
Debtors in their chapter 11 proceedings. When the Debtors filed
for protection from their creditors, they listed total assets of
$79 million and total debts of $212 million.
GT BRANDS: Rejects Headquarters Lease Effective January 15, 2006
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized GT Brands Holdings LLC and its debtor-affiliates to
reject a real property lease related to their headquarters located
at 16 East 40th Street, New York City. The Debtors are deemed to
have rejected the lease as of Jan. 15, 2006.
Pursuant to the stipulation governing their rejection of the New
York lease, the Debtors agree to pay $117,500 to their landlord,
16 East 40 Realty LLC, in full and complete satisfaction of:
-- their gross rent obligations from Jan. 1, 2006 through
Jan. 15, 2006; and
-- all other obligations of under the lease.
Upon payment, the landlord agrees to discharge the Debtors of all
their obligations under the lease arising on or after the petition
date.
Claims for damages arising from the rejection of the New York
lease must be filed within 30 days after Jan. 15, 2006.
Headquartered in New York, New York, GT Brands Holdings LLC,
supplies home video titles to mass retailers. The Debtors also
develop and market branded consumer, lifestyle and entertainment
products. The Company and its affiliates filed for chapter 11
protection on July 11, 2005 (Bankr. S.D.N.Y. Case No. 05-15167).
Brian W. Harvey, Esq., at Goodwin Procter LLP, represents the
Debtors in their chapter 11 proceedings. When the Debtors filed
for protection from their creditors, they listed total assets of
$79 million and total debts of $212 million.
INFOR GLOBAL: Moody's Affirms Junk Ratings on $315 Mil. Term Loan
-----------------------------------------------------------------
Moody's Investors Service affirmed Infor Global Solutions existing
B3 corporate family rating, the B2 rating to its first lien
facility and Caa2 to its second lien facility. These ratings also
incorporate the additional debt of $305 million to the company's
first lien facility and $115 million to the second lien facility,
the proceeds of which will go towards the purchase of Geac
Computer Corporations' enterprise software line of business with
annual revenue runrate estimated at $120 million and Datastream
Inc., an asset performance management software provider with
annual revenues of approximately $100 million, for $216 million.
The outlook remains stable.
Moody's affirmation of Infor's Corporate Family Rating at B3
reflects:
(1) the company's limited operating history as a standalone
integrated entity given the numerous acquisitions in
recent past as well as integration challenges thereof;
(2) increased though still manageable leverage of 4.7x
assuming projected cost synergies are realized;
(3) intensely competitive operating environment of management
software/ERP business with bigger and better capitalized
competitors increasingly focused on the mid-market
segment;
(4) limited asset protection from a small base of tangible
assets; and
(5) delays in filing fiscal 2005 financials arising from
difficulties in aggregating financials of its
acquisitions.
The ratings also consider:
-- a growing track record and improved performance of Infor's
operations;
-- the mission critical nature of ERP systems which afford
reasonably good revenue visibility;
-- healthy client retention resulting in a stream of
recurring revenues with assured cash flow generation; and
-- large and diversified customer base both in terms of
vertical markets covered and top 10 customers representing
less than 5% of total revenue.
Moody's believes the highly competitive nature of the ERP
industry, despite Infor's current leading position in the mid-
market ERP segment, constrains the ratings. Moody's also believes
that scale is a critical element in this business as the much
larger competitors are increasingly focusing on the mid-market
space. In addition, revenue growth in the sector is expected to
be relatively modest. Incremental cash flow will in part come
from benefits of scale as a result of common platform synergies.
Moody's remains cautious about potential integration issues and
impending cost reductions, both of which result from Infor's
ongoing acquisitions. These concerns are mitigated by Infor's
continuing R&D investments in excess of 10% of revenue, albeit
reduced from prior 13% levels, reflecting the on-going investment
the company is making to achieve significant growth by supporting
its existing customers and growing its offerings to attract new
customers. Infor benefits from the highly recurring nature of the
management software business, with renewal rates of over 90%.
The stable outlook considers Infor's cashflow that amply covers
its CAPEX and moderate working capital requirements. Infor is
expected to have a cash balance over $60 million post current
financing, with additional liquidity in form of a $50 million
revolving credit facility and incremental term facility of $200
million. Free cashflow is positive although leverage is
relatively high at about 4.7x of EBITDA and coverage is at 2.2
times EBITDA assuming cost synergies. However, aforementioned
credit measures may weaken with additional leverage resulting from
financing of possible future acquisitions.
The ratings could be upgraded upon:
(1) evidence of revenue growth partly from cross selling
activities;
(2) success with company's integration efforts including
timely filing of audited financial statements with no
financial control issues;
(3) realization of potential cost synergies thus improving
profitability and cash flow generation ; and
(4) material de-leveraging as a result thereof.
Conversely the ratings would come under pressure to the extent:
a) there is loss of revenues resulting from decline in
customer retention, pricing pressure or general market
trends;
b) there is evidence of issues in effectively integrating its
acquisitions; and
c) additional leverage due partly to further acquisitions.
These ratings have been affirmed:
* $50 million first lien revolving credit facility due 2010
rated B2
* $605 million first lien term loan due 2011 rated B2
* $315 million new second lien term loan due 2012 rated Caa2
* Corporate Family Rating of B3
Infor Global Solutions Topco Ltd., headquartered in Alpharetta,
Georgia and a Cayman Islands exempted company, is a global
provider of enterprise applications software for the manufacturing
and distribution sectors. Infor is privately held by Golden Gate
Capital, Summit Partners and company management. Pro forma for the
transaction, Infor generated revenues $775 million for the LTM
period ending Nov. 30, 2005.
INFOR GLOBAL: S&P Puts CCC+ Rating on Proposed $115 Million Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating and '3'
recovery rating to Alpharetta, Georgia-based Infor Global
Solutions AG's proposed $655 million first-lien senior secured
bank facility, which will consist of:
* a $50 million revolving credit facility (due 2010); and
* a $605 million term loan (due 2011).
At the same time, Standard & Poor's assigned its 'CCC+' rating and
'5' recovery rating to the company's proposed $115 million
incremental second-lien term loan, due 2012. Standard & Poor's
also affirmed its 'B' corporate credit rating and 'CCC+' rating,
with a '5' recovery rating, on the company's existing $200 million
second-lien term facility, and revised its outlook to
developing from positive.
The outlook change reflects the fact that Infor is currently more
than four months late in submitting its fiscal 2005, ended May,
audited financial statements, according to the terms of its credit
agreement. While the company has received a waiver from its
creditors through March 2006, the developing outlook reflects
potential for negative ratings momentum should this delay
continue, or if audited financial performance during fiscal 2005
is significantly different than preliminary estimates.
The first-lien senior secured bank loan rating, the same as the
corporate credit rating, along with the recovery rating, reflect
Standard & Poor's expectation of meaningful (50%-80%) recovery of
principal by lenders in the event of a payment default or
bankruptcy. The 'CCC+' second-lien senior secured bank loan
rating, which is two notches below the corporate credit rating,
along with the '5' recovery rating, indicate Standard & Poor's
expectation that second-lien creditors would likely achieve
negligible (0%-25%) recovery of principal in the event of a
payment default or bankruptcy.
Proceeds from the first- and second-lien facilities, along with
about $73 million of balance sheet cash and $35 million of
additional sponsor equity, will be used to finance the
acquisitions of GEAC Computer Corp.'s ERP business and Datastream
Systems Inc. for a total of $473 million, and to retire Infor's
existing first-lien debt.
"The ratings reflect Infor's limited track record following an
aggressive acquisition strategy, second-tier presence in the
highly competitive enterprise resource planning market, and high
debt leverage," said Standard & Poor's credit analyst Ben Bubeck.
These factors are only partly offset by:
* a leading presence in its selected niche within the ERP
market;
* a largely recurring revenue base; and
* a diverse customer base.
Infor is a global provider of enterprise software applications and
services designed to increase operating efficiency and roductivity
by automating key business processes. The company is focused
primarily on mid-market customers within the:
* discrete manufacturing,
* process manufacturing, and
* distribution verticals.
Pro forma for the proposed transaction, Infor had approximately
$938 million in total funded debt as of November 2005.
INSEQ CORP: Debts Cut by $1.5 Million in Debt to Equity Conversion
------------------------------------------------------------------
GreenShift Corporation agreed to assume the Convertible Debentures
that INSEQ Corporation had issued to Highgate House Funds, Ltd.,
in the amount of $1,150,369. Highgate House Funds, Ltd., released
the Company from all liability under the Debentures.
GreenShift owns 70% of the Company's common stock.
Additionally, on February 2, 2006, Cornell Capital Partners, LP,
converted $404,139.41 of debt into the Company's common shares.
The amount converted equals to the principal plus accrued interest
on the Convertible Debenture the Company issued to Cornell.
The transactions resulted in the conversion of all of the
Company's outstanding convertible debt with Cornell and Highgate,
and the reduction of its debt by $1,554,508.
As reported in the Troubled Company Reporter on November 28, 2005,
the Company reported $39,467 of net income on $1,310,699 of net
revenues for the quarter ending Sept. 30, 2005. At Sept. 30,
2005, the Company's balance sheet showed $5,109,126 in total
assets and $944,227 in positive stockholders equity.
INSEQ Corporation is 70% owned by GreenShift Corporation (OTC
Bulletin Board: GSHF), a business development corporation whose
mission is to develop and support companies and technologies that
facilitate the efficient use of natural resources and catalyze
transformational environmental gains.
The Company's external auditors -- Rosenberg, Rich, Baker,
Berman & Company -- raised going concern doubts after reviewing
the company's 2004 financial statements.
JUAN DE VIRGILIIS: Case Summary & 8 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Juan C. De Virgiliis
P.O. Box 2958
Boone, North Carolina 28607
Bankruptcy Case No.: 06-50056
Type of Business: The Debtor is a physician, who works at
Total Health Integrated Services, Inc.
Chapter 11 Petition Date: January 31, 2006
Court: Western District of North Carolina (Wilkesboro)
Judge: J. Craig Whitley
Debtor's Counsel: David G. Gray, Esq.
Westall, Gray, Connolly & Davis, P.A.
81 Central Avenue
Asheville, North Carolina 28801
Tel; (828) 254-6315
Total Assets: $2,747,391
Total Debts: $2,643,233
Debtor's 8 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
J&C Nationwide $60,000
1150 Hammond Drive, Suite A-1200
Atlanta, GA 30328
Chase MasterCard $37,703
P.O. Box 15902
Wilmington, DE 19850-5902
MBNA America $20,228
P.O. Box 15026
Wilmington, DE 19850-5026
Bank of America $15,000
P.O. Box 1390
Norfolk, VA 23501-1390
Vetro & Lundy, Attorneys $8,000
Sears $3,000
Watauga Medical $1,002
Ford Motor Credit $1,000
KAISER ALUMINUM: Wants to Settle Grayson County's $525,000 Claim
----------------------------------------------------------------
On May 7, 2002, Grayson County in Texas, on behalf of itself,
Grayson College, the City of Sherman, and Sherman Independent
School District, filed Claim No. 245, asserting a secured claim
against Kaiser Aluminum Corporation. Grayson asserts a $90,829
claim plus interest accruing at 12% per year for ad valorem taxes
incurred in 2002 in relation to Kaiser Aluminum & Chemical
Corporation's aluminum extrusion plant located in Sherman, Texas.
In 2005, Grayson County amended Claim No. 245 by filing Claim No.
16579, increasing the amount of the asserted claim to $235,777,
plus interest. Claim No. 16579 was amended and replaced with
Claim No. 16588, further increasing the amount of the asserted
claim to $441,647, plus interest.
KACC reviewed its books and records and determined that the
principal amount asserted in the Grayson Claim is correct and that
the Grayson Claim is secured by a statutory lien on the Sherman
Property.
KACC contacted Grayson County to discuss the possibility of
reaching an agreement on an interest rate that is lower than the
12% statutory rate asserted by the County, to be applied in
determining the allowed amount of the Claim.
Grayson County indicated that, while it believes it is entitled to
the statutory rate, it is willing to accept a lower rate of
interest in exchange for prompt payment of its Claim.
In a stipulation, KACC and Grayson County agree that:
(a) The Grayson Claim will be allowed as a secured claim
against KACC for $525,000 if payment is received by
Grayson County by the earlier of:
* February 28, 2006; or
* within three business days after the Court's entry of
the order approving Stipulation.
(b) Upon receipt of payment of the $525,000, Grayson County
will:
* release and waive any and all claims, disputes or
causes of action with respect to any of the Debtors'
possible prepetition liability; and
* release and waive any and all liens related to the
Sherman Property; and
(c) KACC will waive any and all rights to protest, and any and
all claims for refund of, the Final Claim Amount.
The parties ask the U.S. Bankruptcy Court for the District of
Delaware to approve the Stipulation in its entirety.
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. 89; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
KMART CORP: Court Lifts Stay for Ms. Dominguez to Pursue Lawsuit
----------------------------------------------------------------
Maribel Dominguez was injured at a Kmart Store. Ms. Dominguez
properly and timely filed a notice of claim, and a lawsuit in the
Circuit Court of the 11th Judicial Circuit in Miami-Dade County,
Florida.
Steven R. Simon, Esq., Ms. Dominguez's attorney, relates that
Ms. Dominguez and Kmart Corporation have exhausted settlement
negotiations, and have in good faith complied with the claims
resolution procedure outlined by the Court for personal injury
claims.
Since Kmart is not authorizing any additional amounts to pay
claims without having the automatic stay lifted by the Bankruptcy
Court, Ms. Dominguez asks the Court to lift the stay so that she
may pursue her claim in the Circuit Court in Miami-Dade County,
Florida, against Kmart.
* * *
In an agreed order signed by Judge Sonderby, Kmart and
Ms. Dominguez agree that the automatic stay and the Plan
Injunction are partially lifted to permit the litigation to
proceed to a final judgment or settlement.
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. 106; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LAZARD LTD: Dec. 31 Balance Sheet Upside-Down by $870 Million
-------------------------------------------------------------
Lazard Ltd (NYSE: LAZ) reported financial results for the full
fiscal year and quarter ended Dec. 31, 2005.
Revenues for the quarter ended Dec. 31, 2005 totaled $391 million,
compared $400 million for the same period in 2004. Revenues for
the full fiscal year ended Dec. 31, 2005, totaled $1.3 billion,
compared to revenues of $1.1 billion for the same period in 2004.
Net income for the quarter ended Dec. 31, 2005, was $23 million,
compared to $112 million of net income for the same period in
2004. Net income for the full fiscal year ended Dec. 31, 2005,
was $143 million, compared to $246 million of net income for the
same period in 2004.
"By every measure, 2005 was an outstanding and historic year for
Lazard," said Bruce Wasserstein, Chairman and Chief Executive
Officer of Lazard Ltd. "We have delivered on our promises and
remain dedicated to serving our clients and creating shareholder
value."
At Dec. 31, 2005, assets totaled $1.9 billion and liabilities
totaled $2.7 billion, resulting in a stockholders' deficit of
$870 million.
Lazard Ltd. -- http://www.lazard.com/-- one of the world's
preeminent financial advisory and asset management firms, operates
from 29 cities across 16 countries in North America, Europe, Asia,
Australia and South America. With origins dating back to 1848,
the firm provides services including mergers and acquisitions
advice, asset management, and restructuring advice to
corporations, partnerships, institutions, governments, and
individuals.
MAYTAG CORP: S&P Holds BB+ Corporate Credit Rating on CreditWatch
-----------------------------------------------------------------
Standard & Poor's Ratings Services held its ratings on home
appliance manufacturer Maytag Corp. on CreditWatch with developing
implications, including its 'BB+' corporate credit rating.
These ratings were originally placed on CreditWatch with negative
implications on May 20, 2005, following an investor group led by
private equity firm Ripplewood Holdings LLC's May 19, 2005,
agreement to acquire Maytag for $14 per share, plus the assumption
of debt, which represented a transaction value of $2.1 billion.
The CreditWatch status was revised to developing on July 18, 2005,
following Whirlpool Corp.'s (BBB+/Watch Neg/A-2) higher competing
bid.
Newton, Iowa-based Maytag had about $970 million of debt
outstanding at Dec. 31, 2005.
The acquisition remains subject to regulatory approval but is
expected to close as early as the first quarter of 2006, following
Maytag's shareholder approval in December 2005. The CreditWatch
continues to reflect the possibility that Maytag's ratings would
be raised in a Whirlpool combination. Standard & Poor's will
evaluate the potential implications to the rating on Maytag's
senior unsecured debt, as further information is available.
However, in the event that Whirlpool fails to receive regulatory
clearance, Maytag's corporate credit rating would now be lowered
to 'B' and the rating on Maytag's existing senior unsecured debt
would be lowered to 'B-', one notch below the corporate credit
rating, reflecting this debt's junior position relative to the
company's new secured bank debt. In addition, Maytag's
CreditWatch status would be revised back to negative.
Previously, on Nov. 4, 2005, Standard & Poor's had indicated that
it would lower Maytag's corporate credit rating to 'B+', if the
company were not acquired by Whirlpool. However, the downgrade to
'B' now incorporates Maytag's recent reporting of very weak
operating results. Maytag's 2005 financial results were
substantially lower than previously expected, with operating
income declining almost 200%, despite about a 4% increase in
revenues. Maytag's operating performance continues to be plagued
by its:
* high cost structure;
* lower production volumes;
* elevated raw material and distribution costs;
* limited pricing flexibility; and
* continued unfavorable product pricing and mix (primarily in
floor care).
Moreover, in the fourth quarter, the company incurred additional
restructuring charges, as well as significant M&A-related expenses
as a result of the pending transaction by Whirlpool. Furthermore,
Standard & Poor's believes that Maytag's underfunded pension and
unfunded other post retirement benefit obligations remain
significant, despite voluntary contributions and changes to its
plans.
Despite the improvement in liquidity resulting from Maytag's new
$600 million five-year bank facility and the $120 million
termination fee Whirlpool would be required to pay Maytag, if the
acquisition does not occur, the negative CreditWatch listing would
reflect our ongoing concerns with the company's ability to
significantly improve its financial performance. If current
negative trends continue, Standard & Poor's believes Maytag could
ultimately need to restructure its obligations (including its debt
and contractual obligations), despite its currently adequate
liquidity. Standard & Poor's will continue to monitor the
remaining approval process, as well as Maytag's ability to improve
its operating performance.
MAYTAG CORP: Is Considering Plans to Sell Ailing Hoover Unit
------------------------------------------------------------
Maytag Corp. (NYSE:MYG) intends to sell ailing Hoover vacuum unit
after reporting a 20% drop in fourth-quarter sales, G. Patrick
Kelley writes for The Times Reporter.
Maytag Chief Executive Ralph Hake told Mr. Kelley that the Company
could no longer carry the burden of the underpeforming product
line, so management is exploring other strategic options including
the sale of the floorcare business.
Maytag faces competition from lower-cost models made in Asia that
have gained U.S. appeal and market share. Hoover, known for its
quality vacuums, traces its origins to 1907, and was acquired by
Maytag in 1989 for $1 billion.
But Mr. Hake can't sell Hoover at the moment, or any other
division of Maytag due to the merger with Whirlpool, which has a
firm $1.7 billion offer that includes all of Maytag's major
assets.
Mr. Kelley reports that Whirlpool issued a strongly worded
statement from its chairman and chief executive officer, Jeff M.
Fettig that no sale was going through without his company's
permission.
About Whirlpool
Whirlpool Corporation -- http://www.whirlpoolcorp.com/-- is the
world's leading manufacturer and marketer of major home
appliances, with annual sales of over $13 billion, 68,000
employees, and nearly 50 manufacturing and technology research
centers around the globe. The company markets Whirlpool,
KitchenAid, Brastemp, Bauknecht, Consul and other major brand
names to consumers in more than 170 countries.
About Maytag
Headquartered in Newton, Iowa, Maytag Corporation --
http://www.maytag.com/-- is a leading producer of home and
commercial appliances. Its products are sold to customers
throughout North America and in international markets. The
corporation's principal brands include Maytag(R), Hoover(R),
Jenn-Air(R), Amana(R), Dixie-Narco(R) and Jade(R).
At Dec. 31, 2005, Maytag Corp.'s balance sheet showed a
stockholkders' deficit of $187 million, compared to $75 million
deficit at Jan. 1, 2005.
* * *
As reported in the Troubled Company Reporter on Jan. 17, 2006,
Moody's Investors Service anticipates downgrading Whirlpool
Corp.'s senior long term debt by one notch to Baa2 and
subordinated debt to (P)Baa3 at the conclusion of the purchase of
Maytag Corp. Whirlpool's commercial paper rating is expected to
be confirmed at P-2. The rating outlook will be determined at the
conclusion of the review based on updated financial and operating
trends of the companies. Whirlpool's ratings are currently under
review for possible downgrade pending the acquisition of Maytag.
The acquisition is under review by the U.S. Department of Justice
and has already been approved by European authorities. The
acquisition is expected to close as early as the first quarter of
2006.
Maytag's ratings are under review with direction uncertain,
pending the completion of the merger. If its debt is legally
assumed or guaranteed by Whirlpool on a pari passu basis with
Whirlpool's existing debt, Moody's would rate Maytag's debt at the
same level as Whirlpool's.
Moody's maintains these ratings for Maytag, which are on review
with direction uncertain:
* Corporate family rating of B1
* Senior unsecured notes ratings at B2
* Senior unsecured credit facility rating at B1
MUSICLAND HOLDING: Taps FTI Consulting as Financial Advisors
------------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates seek the U.S.
Bankruptcy Court for the Southern District of New York's authority
to employ FTI Consulting, Inc., together with its wholly owned
subsidiaries, agents, and independent contractors, as their
financial advisors.
Craig G. Wassenaar, Chief Financial Officer of Musicland Holding
Corp., tells Judge Bernstein that FTI has a wealth of experience
in providing financial advisory services in restructurings and
reorganizations, and enjoys an excellent reputation for services
it has rendered in large and complex Chapter 11 cases on behalf of
debtors and creditors throughout the United States.
Mr. Wassenaar relates that in early December 12, 2005, FTI was
engaged to provide financial advisory services to the Debtors.
Since this time, FTI has developed a great deal of institutional
knowledge regarding the Debtors' operations, finance and systems.
Those experience and knowledge will be valuable to the Debtors in
their efforts to reorganize.
Lisa Poulin will be the managing director responsible for the
day-to-day execution of the engagement. Ms. Poulin is a Senior
Managing Director at FTI who has over 24 years of experience
providing a variety of services, including interim management to
troubled businesses or to constituent holders in a troubled
business.
Throughout the engagement, FTI will:
-- assist the Debtors with information and analyses required
pursuant to the Debtors' Debtor-In-Possession financing;
-- assist with the identification and implementation of short
term cash management procedures;
-- assist with the review and development of a long-range
business plan and supporting analyses;
-- assist with the identification of executory contracts and
leases and performance of cost/benefit evaluations with
respect to the affirmation or rejection of each;
-- assist the Debtors' management team and counsel focused on
the coordination of resources related to the ongoing
reorganization effort;
-- assist in the preparation of financial information for
distribution to creditors and others, including, but not
limited to, cash flow projections and budgets, cash
receipts and disbursement analysis, analysis of various
asset and liability accounts, and analysis of proposed
transactions for which Court approval is sought;
-- attend meetings and assist in discussions with potential
investors, banks and other secured lenders, any official
committee appointed in these Chapter 11 Cases, the
United States Trustee, other parties-in-interest and
professionals hired, as requested;
-- analyze creditor claims by type, entity, and individual
claim, including assistance with development of database,
as necessary, to track these claims;
-- assist in the preparation of information and analysis
necessary for the confirmation of a plan of reorganization
in these Chapter 11 Cases, including information contained
in the disclosure statement;
-- assist in the evaluation and analysis of avoidance actions,
including fraudulent conveyances and preferential
transfers;
-- provide accounting and tax support;
-- testify on case-related issues as required by the Debtors;
and
-- render other general business consulting or other
assistance as the Debtors' management or counsel may deem
necessary that are consistent with the role of a financial
advisor and not duplicative of services provided by other
professionals in the bankruptcy proceeding.
The Debtors will pay FTI a $225,000 monthly non-refundable
advisory fee and reimburse out-of-pocket expenses incurred.
Ms. Poulin and the FTI employees will not be entitled to any
salary from the Debtors. The FTI employees will continue to draw
their salary and receive health and other personal benefits from
FTI, thus relieving the Debtors of any payroll expense.
FTI's current standard hourly rates are:
Hourly Rate
-----------
Senior Managing Directors $560 - 625
Directors/Managing Directors $395 - 560
Associate/Consultants $170 - 375
Administrative/Paraprofessionals $60 - 160
FTI is not owed any amounts with respect to its prepetition fees
and expenses. FTI has received various retainers in connection
with preparing for the filing of these Chapter 11 Cases. The
unapplied residual retainer, which is estimated to total
approximately $175,000 will constitute a general retainer for
Postpetition services, will not be segregated by FTI in a separate
account, and will be held until the end of these Chapter 11 Cases
and applied to FTI's finally approved fees in these proceedings.
Ms. Poulin assures the Court that FTI:
(i) has no connection with the Debtors, their creditors, or
other parties-in-interest in this case;
(ii) does not hold any interest adverse to the Debtors'
estates; and
(iii) is a "disinterested person" as defined by Section 101(14)
of the Bankruptcy Code.
Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products. The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis,
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. (Musicland Bankruptcy
News, Issue No. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
MUSICLAND HOLDING: Wants to Employ Abacus as Consultants
--------------------------------------------------------
As previously reported, Musicland Holding Corp. and its debtor-
affiliates have determined to conduct store closing sales and
liquidate their inventory at a number of their retail stores. The
Debtors need advisors and consultants to assist the Debtors in
maximizing the value of their estates through the Store Closing
Sales.
Craig G. Wassenaar, Chief Financial Officer of Musicland Holding
Corp., relates that the Debtors have selected Abacus Advisors
Group LLC as their consultants in part because of the expertise of
Alan Cohen, the Chairman of Abacus. Mr. Cohen has extensive
experience and knowledge in retail chain reorganization. He has
been associated with numerous Chapter 11 reorganizations of large
retailers.
Mr. Wassenar tells the U.S. Bankruptcy Court for the Southern
District of New York that Abacus is capable of providing a wide
range of advising services. Abacus would focus on assisting the
Debtors' in developing a program to dispose of selected assets,
including inventory and fixtures, furniture and equipment.
In this regard, the Debtors seek the Court's permission to employ
Abacus as their advisors and consultants in the sale of certain
assets of the Debtors, nunc pro tunc to the Petition Date.
Abacus will:
-- assist in the preparation of an appropriate information
package regarding closing stores for distribution to
potential bidders;
-- review bid proposals and assistance in negotiations with
the various parties and, if appropriate, orchestration of
an auction to ensure recoveries are maximized;
-- provide observance, if necessary, of physical inventories
that may be taken; and
-- monitor the conduct and results of any third party selected
to liquidate the inventory.
For its services, Musicland will pay Abacus a $250,000 base fee.
In addition, Abacus will be paid a value added fee to be
determined in conjunction with the Company, its lenders and the
creditors committee. Abacus will also be entitled reimbursement
of its reasonable expenses including attorney's fees.
According to Jack Rapp, the Managing Director of Abacus, the Firm
is a "disinterested person" as defined by Section 101(14) of the
Bankruptcy Code.
Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products. The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis,
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. (Musicland Bankruptcy
News, Issue No. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
NANCY WILSON: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Nancy Ley Wilson
5687 Doliver Drive
Houston, Texas 77056
Bankruptcy Case No.: 06-30553
Chapter 11 Petition Date: February 8, 2006
Court: Southern District of Texas (Houston)
Judge: Jeff Bohm
Debtor's Counsel: Joseph M. Hill, Esq.
Theresa D. Mobley, Esq.
Cage, Hill & Niehaus, L.L.P.
5851 San Felipe, Suite 950
Houston, Texas 77057
Tel: (713) 789-0500
Fax: (713) 974-0344
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 11 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Mary Linda Ley Ament, Trust claim $1,454,636
Trustee
Nancy Alice Ley Wilson
Children's Trusts
1310 Caravelle Court
Katy, TX 77494
Internal Revenue Service Taxes $217,000
1919 Smith Street
STOP 5022 HOU
Houston, TX 77002
Internal Revenue Service Taxes $174,181
1919 Smith Street
STOP 5022 HOU
Houston, TX 77002
American Express Credit card $520
Shelley Wilson Melody Trust claim $0
Michael Ley Wilson Trust claim $0
Guarantors Bank loan $0
Emmons & Jackson, P.C. Attorneys fees $0
Donald Gene Wilson Notice only $0
Darby Wilson Mair Trust claim $0
Cheryl Wilson Hairston Trust claim $0
NAPIER ENVIRONMENTAL: Closes $1.3MM Financing for U.S. Contracts
----------------------------------------------------------------
Napier Environmental Technologies Inc. (TSX:NIR) reports the
successful completion of financing arrangements with a major
Canadian Bank to provide $1,350,000 to enable Napier to enter into
forward U.S. dollar contracts.
Under the terms of the Demand Operating Facility, Napier has been
provided with available credit to hedge the U.S. dollar on a spot
basis in the amount of US$150,000 and in the amount of $1,200,000
for contracts during any future twelve-month period.
This financing facility will allow Napier to protect itself from
the fluctuating U.S. dollar over any future twelve months. This
facility is a welcome show of support from Napier's bank.
Headquartered in Delta, British Columbia, Napier Environmental
Technologies, Inc. -- http://wwwbiowash.com/-- is a Canadian
company primarily engaged in the development, manufacture and
distribution of a wide range of products utilizing environmentally
advanced technology. The product lines include coating removal
and wood restoration products for both the industrial/commercial
market and the consumer/retail market.
Napier is currently operating under the protection of the Canadian
Bankruptcy and Insolvency Act.
NATIONAL GAS: Meeting of Creditors Scheduled for February 23
------------------------------------------------------------
The U.S. Bankruptcy Administrator will convene a meeting of
National Gas Distributors, LLC's creditors at 10:00 a.m., on
February 23, 2005, at USBA Creditors Meeting Room, Two Hannover
Square, Room 610, 434 Fayetteville Street Mall in Raleigh, North
Carolina. This is the first meeting of creditors required under
Section 341(a) of the U.S. Bankruptcy Code.
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 Fayetteville, North Carolina, National Gas
Distributors, LLC (f/d/b/a Paul Lawing Jr., LLC) --
http://www.gaspartners.com/-- supplies natural gas, propane, and
oil to industrial, municipal, military, and governmental
facilities. The Company filed for chapter 11 protection on Jan.
20, 2006 (Bankr. E.D.N.C. Case No. 06-00166). Ocie F. Murray,
Jr., Esq., at Murray, Craven & Inman, LLP, represents the Debtor
in its restructuring efforts. When the Debtor filed for
protection from its creditors, it estimated assets between $1
million and $10 million and debts between $10 million and $50
million.
NAVIGATOR GAS: Liquidator Wants to Reject NGML Contracts
--------------------------------------------------------
Michael John Fayle, the Official Liquidator for Navigator Gas
Transport PLC and its debtor-affiliates, asks the U.S. Bankruptcy
Court for the Southern District of New York for authority to
reject any and all executory contracts with Navigator Gas
Management Ltd.
Specifically, the Liquidator wants to repudiate and walk away
from:
a) a Technical Agreement dated as of July 14, 2001;
b) a Master Commercial Marketing and Services Agreement
dated as of March 24, 2000;
c) a Management Agreement dated as of August 1, 1997; and
d) any other contracts that may exist with NGML for commercial
management, technical management, technical supervision, or
administration, to the extent the Liquidating Debtors are
considered to be parties or have any obligations.
Mr. Fayle believes that the NGML management agreements are not
beneficial to the Debtors' current or future business operations
and should be rejected. The Liquidator intends to relocate the
management of the Liquidating Debtors to London, where he will be
better able to supervise the ongoing operations and the Debtor's
reorganization.
Though the NGML management agreements have already been deemed
rejected under the terms of the Plan and Confirmation order, the
Liquidator wants to accelerate the effective rejection date to
Feb. 28, 2006.
The Liquidator also seeks the Court for authority to enter into
new management or consulting agreements, as he deems appropriate,
to continue the Liquidating Debtors' operations.
Headquartered in Castletown, Isle of Man, Navigator Gas Transport
PLC, transports liquefied petroleum gases and petrochemical gases
between ports throughout the world. The Company along with its
debtor-affiliates filed for chapter 11 protection on Jan. 27, 2003
(Bankr. S.D.N.Y. Case No. 03-10471). Adam L. Shiff, Esq., at
Kasowitz, Benson, Torres & Friedman LLP represents the Debtors in
the United States. When the Company filed for protection, it
listed $197,243,082 in total assets and $384,314,744 in total
debts.
NEW YORK RACING: State Issues $1.125 Million Tax Warrant
--------------------------------------------------------
The New York Racing Association has been issued a tax warrant,
dated Feb. 7, 2006, for failure to pay $1.125 million in taxes and
penalties for admission charges and bets, Michael Gormley of the
Associated Press reports.
A tax warrant is a document that is publicly filed and secures the
state's interest in property. A tax warrant is a step in the tax
collection process and preserves the right of the state to sue for
debt.
Mr. Gormley reports that the state-issued warrant involves NYRA's
Queens Property where the Aqueduct racetrack is also housed. The
warrant, according to Mr. Gormley, states that NYRA has been
delinquent in paying its November and December 2005 taxes and owes
the state $70,000 in penalties and interest.
Charles Hayward, president of NYRA, informed the governor's office
that the company would be unable to pay its November and December
2005 taxes since its main focus was on bringing stability to the
company, relates Mr. Gormley.
NYRA president said NYRA informed the governor's office it
wouldn't pay the November and December tax bill, adding its
priority was to first bring stability to the struggling
association.
"We've been working with the governor's office and we're confident
that (bailout) is going to go through and as soon as we get that
financial relief, we'll deal with this issue," said Mr. Hayward,
reports Mr. Gormley.
Mr. Gormley relays that NYRA plans to pay tax bills from its video
slot machine revenue, which is expected to be providing revenue by
the fall.
As part of the state bailout, NYRA has already received $1 million
loan from the state and a $5 million loan from the state Lottery
Division. However, Mr. Gormley reports, NYRA is still negotiating
another package from the state between $20 million and $25
million.
NORTEL NETWORKS: S&P Affirms B- Long-Term Corporate Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Nortel
Networks Limited (NNL) to positive from stable. At the same time,
Standard & Poor's affirmed its 'B-' long-term and 'B-2' short-term
corporate credit ratings on the company. NNL and its parent,
Nortel Networks Corporation (NNC), are collectively referred to as
Nortel; the ratings on NNL are based on the consolidation of NNC.
The outlook revision follows Nortel's announcement of an agreement
in principle to settle all pending and proposed shareholder
lawsuits relating to the company's 2001 revised financial guidance
and to its 2003 financial revisions and restatements.
"These lawsuits are the most material of those pending against
Nortel," said Standard & Poor's credit analyst Joe Morin.
"Settling these lawsuits to the terms in the proposed settlement
will remove a substantial risk overhanging the company," he added.
The terms of the agreement in principle include a cash payment of
US$575 million and the issuance of approximately 629 million
common shares, representing about 14.5% of NNC's current equity.
The settlement will leave Nortel with a Dec. 31, 2005, pro forma
cash balance of about US$2.4 billion. The agreement is subject to
negotiation of final terms and conditions, and could result in the
outlook being revised to stable.
The ratings on Nortel reflect:
* a weak but stable spending environment for telecom equipment
and services globally;
* a highly competitive industry;
* the company's high debt level;
* weak credit protection measures; and
* profitability that is lagging its global peers.
These factors are only partially mitigated by the company's
liquidity position, which should provide adequate financial
flexibility in the medium term.
The positive outlook reflects expectations that Nortel will be
able to make material progress on each and all of its main
operating, legal, financing, and governance issues.
Standard & Poor's expects that there will be modest improvements
in Nortel's operating performance, including modest growth in
revenues, EBITDA, and cash flow. Nortel is now well positioned to
reach final agreement on terms and conditions with respect to the
proposed settlement, to complete its proposed bank facility and
maintain a solid cash balance.
Finally, Nortel management is addressing the remaining weaknesses
in internal controls and we believe these issues will be resolved
over time. If the proposed settlement and the bank credit
facility are not finalized, or should unexpected challenges in
market conditions cause Nortel's performance measures to
deteriorate further in the near term, the outlook will be revised
to stable. If the settlement and financing are finalized, and
should Nortel demonstrate sustained improvements in performance
resulting in at least break-even free operating cash flow, the
ratings could be raised.
The company's biggest challenge on this front is aligning its cost
structure, as Standard & Poor's expects Nortel will generate
modest revenue growth at least in-line with market growth. The
remaining litigations (not resolved with the proposed settlement)
are not a material concern at the current rating level, and would
not preclude a small positive movement in the ratings if the
company demonstrates sustainable positive operating cash flow.
OCEAN WEST: Amends June 30, 2005 Financials After Failed Spin-Off
-----------------------------------------------------------------
Ocean West Holding Corporation restated its financial statements
for the quarter ended June 30, 2005, after determining that the
proposed spin-off of its subsidiary, Ocean West Enterprise, could
not occur until approved by the Securities and Exchange
Commission.
While the dividend of OWE's stock was declared to the Company's
shareholders of record as of May 23, 2005, the Company needed to
effect a registration statement under the Securities Act of 1933
in order to complete the distribution of shares, which had not
occurred as of June 30, 2005.
The Company's restated balance sheet at June 30, 2005, showed
$1,154,996 in total assets and liabilities of $3,652,770,
resulting in a stockholders' deficit of $2,497,774. For the
three-months ended June 30, 2005, the Company incurred a
$1,619,195 net loss on $186,223 of revenue.
A copy of the regulatory filing is available for free at
http://researcharchives.com/t/s?52a
Going Concern Doubt
Chavez and Koch CPA's expressed substantial doubt about Ocean West
Holding Corporation's ability to continue as a going concern after
it audited the Company's financial statements for the fiscal year
ended Sept. 30, 2004. The auditing firm points to the Company's
recurring losses from operations and accumulated deficit of
$6,149,853 as of Sept. 30, 2004.
About Ocean West
Ocean West Holding Corporation is a retail and wholesale mortgage
banking company primarily engaged in the business of originating
and selling loans secured by real property with one-to-four units.
The Company offers a wide range of products aimed primarily at
high quality, low risk borrowers, currently in the state of
California. Under its current business strategy, it makes most of
its loans to: purchase existing residences, refinance existing
mortgages, consolidate other debt, and finance home improvements,
education or similar needs.
OPTIGENEX INC: Restates Year 2004 Financial Statements
------------------------------------------------------
Optigenex Inc. submitted amended financial statements for the year
ended Dec. 31, 2004, to the Securities and Exchange Commission on
Feb. 7, 2006.
The Company's audit committee determined that the previously
submitted Form 10KSB for the period ended Dec. 31, 2004 should no
longer be relied upon because of an error in computing earnings
per share for the reverse merger that occurred during the period.
The impact of the restated earnings per share for the reverse
merger that occurred during the period has increased the loss per
share by $.09 for the year ended Dec. 31, 2004 and $0.32 for the
year ended Dec. 31, 2003.
The Company's restated balance sheet at Dec. 31, 2004, showed
$7,884,973 in total assets and liabilities of $1,095,861. The
Company reported a $5,793,161 net loss on $339,065 of net sales
for the year.
Going Concern Doubt
Goldstein Golub Kessler LLP in Manhattan raised substantial doubt
about Optigenex Inc.'s ability to continue as a going concern
after it audited the company's financial statements for the year
ended Dec. 31, 2004. Goldstein Golub pointed to the Company's
recurring losses from operations.
A full-text copy of the regulatory filing is available for free at
http://researcharchives.com/t/s?529
Based in Manhattan, Optigenex, Inc. -- http://www.ac-11.com/-- is
an applied DNA Sciences Company, which researches, develops and
markets a patented product known as AC-11(TM) within the wellness,
age intervention, personal care markets and in clinically relevant
disease states. Optigenex, Inc., offers effective solutions to
age-related issues. These solutions take the form of supplements,
cosmeceuticals or even specialized services.
PANOLAM INDUSTRIES: Moody's Affirms Junk Ratings on $150MM Notes
----------------------------------------------------------------
Moody's Investors Service affirmed Panolam Industries
International, Inc., ratings including those on its upsized term
loan, and affirmed the rating on the company's upsized revolver.
Moody's also affirmed all of its other Panolam ratings. The
ratings reflect the company's high leverage, low free cash flow
generation relative to debt levels, slow anticipated sales growth,
and exposure to raw material price fluctuations. At the same
time, the ratings recognize Panolam's broad geographical presence,
well known brand names, and low customer concentration. The
ratings outlook has been changed to negative from stable.
The change in the ratings outlook primarily reflects the company's
difficulty in generating free cash flow to total debt that is
consistent with the rating category. Moody's projects the
company's free cash flow generation for 2006 to be negative
primarily due to a $10 million plant expansion. In the press
release dated Aug. 26, 2005, Moody's indicated that the company's
rating outlook could be in jeopardy if its free cash flow to debt
falls below 3%.
Moody's has taken these rating actions:
* $215 million senior secured term loan, due 2012, affirmed at
B2;
* $30 million senior secured revolving credit facility, due
2010, affirmed at B2;
* $150 million senior subordinate notes, due 2013, affirmed at
Caa1;
* Corporate family rating, affirmed at B2;
* Speculative grade liquidity rating affirmed at SGL-3.
The ratings outlook has been changed to negative from stable.
Panolam is upsizing its senior secured credit facilities by $80
million. Proceeds from the add-on along with an $5 million equity
contribution will be used primarily to purchase Nevamar for 7.5
times adjusted 2005 estimated EBITDA. The additional term loan
will increase the company's pro forma debt to EBITDA to 5.8 times
from 5.5 times.
The ratings are constrained by Panolam's weak credit metrics
including, but not limited to, high leverage ratios and low free
cash flow generation relative to debt. The company's ability to
reduce its leverage is now expected to be slower than previously
anticipated by Moody's and free cash flow is anticipated to be in
the mid single digits over the next few years.
The ratings are also impacted by a possible slowdown in the
markets where Panolam operates as well as the company's ability to
pass through raw material prices in a timely manner. Panolam
generates its revenue from the sale of decorative overlay products
used in a wide variety of indoor surfacing applications. Sales to
the commercial market and residential market represent 80% and 20%
of Panolam's revenues, respectively. Moody's anticipates revenue
growth over the next couple of years to be in the low single
digits. As a result, cash flow generation to debt above the low
single digits will hinge on cost reduction and the sale of higher
margin products.
Panolam's ratings benefit from various synergies derived from
Nevamar acquisition including increasing the company's competitive
advantage by increasing the company's customer base in the North
American decorative surfacing industry as well as providing
various cost saving opportunities. Panolam is among the most
widely recognized brand names in the North American thermally
fused melamine panels market. The acquisition expands Panolam's
North American distribution network allowing the company to
provide its customers with a shorter lead time than its
competitors and lowering the company's shipping costs.
The company's outlook or ratings may improve if the company is
able to improve its cash flow generation to total debt to over
6.5% on an annual basis and is believed to be in path for further
improvement, and if its EBITDA coverage of interest was to improve
to over 3 times. The ratings may deteriorate if Moody's does not
see substantial improvement in the company's free cash flow and
ability to pay down debt. For example, free cash flow to debt
generation would need to improve to above 8% for the company to be
well positioned in the B1 ratings category.
The $80 million incremental term loan will be unconditionally
guaranteed by holdings and by each existing and subsequently
acquired or organized domestic subsidiary and secured by
substantially all the assets of holdings, the borrower and each
domestic subsidiary guarantor and 65% of the voting stock in the
company's Canadian subsidiary. Moody's notes that Panolam's
Canadian subsidiary represented approximately 32% of the company's
2004 net sales.
Headquartered in Shelton, Connecticut, Panolam is a leading
designer, manufacturer, and distributor of decorative laminates
including thermally fused melamine panels and high pressure
laminates. Projected pro forma revenues for the year ended 2005
are approximately $470 million.
PARMALAT BRASIL: Brazilian Court Approves Plan of Reorganization
----------------------------------------------------------------
Justice Alexandre Alves Lazzarini, of the First District Company
Recovery and Bankruptcy Court of Justice of Sao Paulo, approved
the recovery plan filed by Parmalat Brasil, a unit of Italian
dairy producer Parmalat Finanziaria S.p.A.
The ratification occurred even without the presentation of the
Negative Tax Debt Certification, as provided for in the new
Company Bankruptcy and Recovery Law.
The plan, drafted with Integra consultants, confirms the unit's
economic viability and presents a schedule for the payment of
its BRL800-million debt to suppliers and banks. The plan
includes the sale of operating assets to help the unit pay off
part of the debt and to reinforce its working capital.
Parmalat Brasil filed for bankruptcy protection on June 24,
2005, under Brazil's new bankruptcy law. The filing came after
the unit's creditors denied the extension of the BRL800-million
payment deadline for the Company's debt.
Parmalat Brasil first filed for bankruptcy protection in 2004
under the old Brazilian bankruptcy law. The unit filed for
bankruptcy again to take advantage of the New Bankruptcy and
Restructuring Law of Brazil, which became effective on June 9,
2005.
Under the NBRL, debtors are permitted to remain in possession
and control of their businesses and properties. In addition, as
part of the judicial reorganization under the NBRL, most
creditors are effectively prohibited from enforcing claims
against the Debtors.
Parmalat Brasil is represented by:
Thomaz Benes Felsberg
Felsberg & Associados
Avenida Paulista 1294, 2nd Floor
Sao Paulo 01310-915 BRAZIL
PEGGY WILLIAMS: Case Summary & 19 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Peggy D. Williams
aka P.D. Williams
aka Peggy Deese Williams
4408 Old U.S. 1 Highway
New Hill, North Carolina 27562
Bankruptcy Case No.: 06-00141
Chapter 11 Petition Date: February 6, 2006
Court: Eastern District of North Carolina (Raleigh)
Judge: A. Thomas Small
Debtor's Counsel: Trawick H. Stubbs, Jr., Esq.
Stubbs & Perdue, P.A.
P. O. Drawer 1654
New Bern, North Carolina 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Phil Honeycutt $21,000
P.O. Box 25
Fuquay Varina, NC 27526
Holland & O'Connor $5,298
Attn: Manager or Agent
P.O. Box 2060
Raleigh, NC 27602
RBC Centura Bank $5,285
Attn: Manager or Agent
P.O. Box 1070
Charlotte, NC 28201
Citi Cards $3,838
Bolton Service, LLC $3,775
BankCard Services $3,282
Holt, York McDarris & High $2,703
Gates Concrete $1,400
NC Farm Bureau $1,089
BellSouth $845
Agri-Waste Technology $795
L.G. Jordan Oil Co., Inc. $788
Wake County Revenue Department $521
Capital City Club $455
The Danbury Mint $87
Hawthorne Village $77
Transworld Systems, Inc. $71
The Hamilton Collection $44
The Hearst Corporation $19
PERFORMANCE TRANSPORTATION: Can Proceed with Intercompany Deals
---------------------------------------------------------------
Performance Transportation Services, Inc., and its debtor-
affiliates sought and obtained permission from the U.S. Bankruptcy
Court for the Western District of New York to continue engaging in
intercompany financial transactions.
Under the Debtors' Cash Management System, funds generated by the
business operations of each participating Debtor in many instances
flow into various centrally maintained bank accounts. Leaseway
Puerto Rico, a non-Debtor affiliate, is an integral part of, and
participates in, the Cash Management System, John Stalker, vice
president and chief financial officer of Debtor Leaseway Motorcar
Transport Company, says.
Prior to the Petition Date, the Debtors and their Non-Debtor
Affiliates engaged in intercompany financial transactions.
Transfers of cash to and from appropriate Bank Accounts were made
on account of the Intercompany Transactions, which typically
included payments for the funding of the Debtors' and the Non-
Debtor Affiliates' working capital requirements. All of the
transfers are made among them in the ordinary course of the
Debtors' businesses as part of their consolidated Cash Management
System.
The Debtors believe that if the Intercompany Transactions are
discontinued, a number of services currently provided by the
Debtors to other Debtors and Non-Debtor Affiliates would be
disrupted.
At any given time, there may be balances due and owing from one
Debtor to another Debtor and between certain Debtors and the Non-
Debtor Affiliates, Mr. Stalker tells the Court. The balances,
Mr. Stalker explains, represent extensions of intercompany credit
made in the ordinary course of business that are an essential
component of the Cash Management System. The Debtors maintain
records of these transfers of cash and can ascertain, trace and
account for these Intercompany Transactions.
Mr. Graber assures the Court that the Debtors will continue to
maintain the records, including records of all current
intercompany accounts receivable and payable.
The Court also rules that all the intercompany claims against a
Debtor by another Debtor or a Non-Debtor Affiliate arising after
the Petition Date as a result of ordinary course Intercompany
Transactions through the Cash Management System will be accorded
administrative priority expense status.
Each entity utilizing funds flowing through the Cash Management
System will continue to bear ultimate repayment responsibility
for the ordinary course transactions, Mr. Stalker says.
Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America. The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment. The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.
Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors
in their restructuring efforts. When the Debtors filed for
protection from their creditors, they estimated assets between $10
million and $50 million and more than $100 million in debts.
(Performance Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PERFORMANCE TRANSPORTATION: Can Pay $500K of Customer Obligations
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
authorized Performance Transportation Services, Inc., and its
debtor-affiliates, on an interim basis, to honor and perform up to
$500,000 in prepetition obligations relating to its Customer
Programs.
In the ordinary course of their businesses, the Debtors engage in
customer programs to develop and sustain a positive reputation in
the marketplace for their products and services. The Debtors'
Customer Programs primarily pertain to obligations arising from
vehicles damaged in the ordinary course of business by the
Debtors.
Obligations to Damaged Vehicles
Consistent with industry practices, the Debtors are liable for any
damage to a vehicle they transport from a vehicle manufacturer to
a vehicle dealership. Upon receipt of the vehicles from the
Debtors, a vehicle dealer inspects the vehicles and makes note of
any damages. If the dealer discovers any damage has occurred to
any vehicle, it informs the vehicle manufacturer who subsequently
submits a claim for payment for the damage to the Debtors. The
Debtors then review the Damage Obligations and periodically make
payment in satisfaction of the obligation.
As of December 31, 2005, the Debtors had yet to process for
payment approximately $2,800,000 in Damage Obligations.
OEM Rebate Program
To preserve their relationships with certain vehicle manufacturers
and thus potentially acquire further business opportunities, the
Debtors, when bidding for new vehicle-hauling contracts, sometimes
agree to rebate a certain amount of money to an original equipment
manufacturer upon the manufacturer's acceptance of the Debtors'
bid. The Debtors believe that the Rebate Program creates valuable
customer goodwill that, in turn, may lead to further business.
The Debtors want to continue, during their Chapter 11 cases, the
Customer Programs that they believe are beneficial to their
business. The Debtors believe that continuing the Customer
Programs is necessary to preserve critical customer relationships
and goodwill for the benefit of their estates.
Accordingly, the Debtors seek the Court's permission to:
a. perform their prepetition obligations related to the
Customer Programs; and
b. continue, renew, replace or terminate the Customer Programs
and implement new programs, in the ordinary course of
business, without further application to the Court.
Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America. The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment. The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.
Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors
in their restructuring efforts. When the Debtors filed for
protection from their creditors, they estimated assets between $10
million and $50 million and more than $100 million in debts.
(Performance Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PERFORMANCE TRANSPORTATION: Has Interim OK to Pay Critical Vendors
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
authorized Performance Transportation Services, Inc., and its
debtor-affiliates to pay, on an interim basis, up to $500,000 in
Critical Vendor Claims.
Pursuant to Sections 105(a), 363(b) and 364 of the Bankruptcy
Code, the Debtors seek the Court's permission to pay prepetition
claims of certain critical vendors and service providers.
As of the Petition Date, the Debtors' books and records show that
they may owe prepetition amounts to over 1,000 vendors and service
providers.
Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York,
tells Judge Kaplan that some of these vendors are essential to the
uninterrupted functioning of the Debtors' business operations.
The services or products these vendors provide cannot be obtained
elsewhere or be replaced except at exorbitant costs to the
estates, Mr. Graber says.
The Debtors' Critical Vendors are:
A. Rig Equipment Vendors
The Debtors' vehicle hauling business is entirely dependent on
the operation of the Rigs used to transport vehicles. Therefore,
proper Rig maintenance is crucial to the Debtors' survival. In
the ordinary course of business, the Debtors rely on a number of
Critical Vendors to supply essential components and replacement
parts required to keep the Rigs in proper working condition.
The Debtors have negotiated discounted pricing structures with
some of the Rig Equipment Vendors where the Debtors may receive
up to a 13% rebate.
The Rig Equipment vendors supplies the Debtors with, among
others:
-- Engines and Engine & Drive-train Parts
-- Trailer-Specific Parts
-- Tires
B. Fuel-Related Vendors
The operation of the Debtors' Rigs is also dependent on the
availability of fuel. Therefore, the Debtors rely on some
Critical Vendors to provide necessary fueling-related services.
The Fuel-Related Vendors can be categorized into three:
1. Fuel delivery services provided by certain vendors to some
of the Debtors' terminals;
2. Fuel credit cards used by the Debtors' drivers at gas
stations across the United States; and
3. Fuel vendors that give the Debtors discounted price
structure with certain gas station chains.
C. Technology Vendors
The Debtors' business is heavily dependent on the Debtors'
network. Without the network, the Debtors' business would
essentially shutdown because the Debtors would not be able to
receive an electronic data interchange from an original equipment
manufacturer requesting services.
The Debtors rely on certain vendors to provide them with network
capabilities and technology support services. The Debtors cannot
quickly replace the services provided by the Technology Vendors
in light of the vendors' substantial familiarity with the
Debtors' network and technology.
Identifying Critical Vendors
The Debtors have carefully considered whether the payments on
account of the prepetition claims of the Critical Vendors are
necessary and whether the payments will ensure that the Debtors
will have access to adequate amounts of trade credit on a
postpetition basis. Specifically, the Debtors have undertaken a
thorough review of their accounts payable and their lists of
prepetition vendors to identify those vendors who are essential
to the Debtors' operations. In determining the amount of claims
to pay, the Debtors consulted with senior management and others
involved in purchasing operations to identify those creditors
that are most essential to the Debtors' operations, using
criteria developed by the Debtors.
The criteria considered by the Debtors to identify which payments
would be deemed critical to avoid business interruption included:
a. whether the vendor in question was a "sole-source" vendor;
b. whether the Debtors receive advantageous pricing or other
terms from a vendor so that replacing the vendor
postpetition would result in significantly higher costs to
the Debtors; and
c. whether finding an alternative vendor would pose a
significant burden that the Debtors' operations would be
disrupted.
After evaluating the information received in response to these
inquiries, the Debtors estimated the payment amount necessary to
ensure the continued supply of critical goods and services,
taking into account:
-- whether failure to pay certain Critical Vendors Claims
would result in the Critical Vendor terminating its
provision of goods or services; and
-- what percentage of the Critical Vendor's claims would need
to be paid to induce it to continue providing goods or
services.
Proposed Critical Vendor Cap
The Debtors propose to pay up to $1,000,00 in Critical Vendor
Claims. According to the consolidated books and records of the
Debtors and their non-Debtor affiliates, the amount represents
less than 1% of their total liabilities, and approximately 10% of
the their total accounts payable liabilities as of the Petition
Date.
While the Debtors reserve the right to seek Court authority at a
later date to increase the Critical Vendor Cap, payment of the
amounts would allow the Debtors to obtain those goods and
services most necessary to their postpetition operations, Mr.
Graber contends.
Payment Terms
To ensure that the Critical Vendors deal on Customary Trade
Terms, the Debtors propose these terms and conditions:
a. The Debtors will pay the Critical Vendors on the conditions
that:
-- the claim is paid by check or via wire transfer; and
-- the Critical Vendor agrees to continue supplying
goods and services to the Debtors on terms that are
consistent with the historical trade terms between
the parties during the Debtors' Chapter 11 cases.
b. The Debtors reserve the right to negotiate trade terms with
any Critical Vendor, as a condition to payment of any
Critical Vendors Claim, that vary from Customary Trade
Terms to the extent the Debtors determine that the terms
are necessary to procure essential goods or services or are
otherwise in the best interests of the Debtors' estates.
c. A Critical Vendor's acceptance of payment is deemed to be
acceptance of the terms of the Order and if the Critical
Vendor later does not provide the Customary Trade Terms or
Negotiated Trade Terms during the Debtors' Chapter 11
Cases, then any payments of prepetition claims made after
the Petition Date may be deemed to be unauthorized
postpetition transfers and therefore recoverable by the
Debtors in their Chapter 11 Cases.
d. The Debtors are authorized to obtain written verification
of the Customary Trade Terms or the Negotiated Trade
Terms to be supplied by the Critical Vendors, before
issuing payment.
If a Critical Vendor refuses to supply goods or services to the
Debtors on Customary Trade Terms or Negotiated Trade Terms after
receipt of payment of its Critical Vendor Claim or fails to
comply with any Trade Agreement entered into between the Critical
Vendor and the Debtors, the Debtors seek the Court's authority
to, in their discretion and without further Court order, declare
that:
a. any Trade Agreement between the Debtors and the Critical
Vendor is terminated; and
b. provisional payments made to Critical Vendors on account of
any Critical Vendor Claims be deemed to have been in
payment of then-outstanding postpetition claims of the
vendors without further Court order or action by any person
or entity.
According to Mr. Graber, the Debtors will maintain a matrix
summarizing:
-- the amount paid to each Critical Vendor on account of its
Critical Vendor Claims; and
-- the goods or services provided by each Critical Vendor.
"The authority to make Critical Vendor payments is key to a
successful reorganization," Mr. Graber states. If the request is
not granted, he says it is likely that Critical Vendors will stop
providing goods to the Debtors on Customary Trade Terms,
effectively reducing the amount of credit available to the
Debtors.
Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America. The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment. The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.
Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors
in their restructuring efforts. When the Debtors filed for
protection from their creditors, they estimated assets between $10
million and $50 million and more than $100 million in debts.
(Performance Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PHOTOCIRCUITS CORP: Wants Plan-Filing Period Stretched to May 12
----------------------------------------------------------------
Photocircuits Corporation asks the U.S. Bankruptcy Court for the
Eastern District of New York to extend until May 12, 2006, the
period within which it has the exclusive right to file a chapter
11 plan. The Debtor also wants the plan solicitation period
extended to July 11, 2006.
The extension, the Debtor says, will provide it more time to move
from focusing on the asset sale process to the bankruptcy exit
process through the liquidation of its remaining assets. Since a
claims bar date has not yet been set, the extension will allow the
Debtor to qualify the claims against it and to proceed with a
viable plan of liquidation.
Headquartered in Glen Cove, New York, Photocircuits Corporation
-- http://www.photocircuits.com/-- was the first independent
printed circuit board fabricator in the world. Its worldwide
reach comprises facilities in Peachtree City, Georgia; Monterrey,
Mexico; Heredia, Costa Rica; and Batangas, Philippines. The
Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr.
E.D.N.Y. Case No. 05-89022). Gerard R Luckman, Esq., at Silverman
Perlstein & Acampora LLP, represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it estimated more than $100 million in assets and
debts.
PLASTECH ENGINEERED: S&P Affirms Corporate Credit Rating at B+
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on automotive supplier Plastech Engineered Products
Inc. and removed it from CreditWatch with negative implications,
where it was placed on Aug. 10, 2005.
At the same time, Standard & Poor's affirmed the 'B+' debt rating
on Plastech's first-lien senior secured credit facility, while the
recovery rating was raised to '3' from '4' to reflect the
repayment of bank term loan debt from 2004-2005. The debt rating
on Plastech's second-lien senior secured term loan was affirmed at
'B-', and the recovery rating was affirmed at '5'.
The ratings outlook on the Dearborn, Mich.-based company is
negative. Plastech, a privately held producer of plastic interior
and exterior trim components for the automotive light vehicle
industry, had total balance sheet debt of $413 million at
Dec. 31, 2005.
"Standard & Poor's rating affirmations reflect Plastech's proven
ability to generate adequate margins and win profitable new
business even amid the very difficult market conditions it
experienced in 2005," said Standard & Poor's credit analyst Nancy
C. Messer. "In addition, the company indicated it is no longer
considering the acquisition of automotive supplier Collins &
Aikman Corp., for which it would have offered a significant cash
bid. This resolves a major credit uncertainty that was the main
reason for the CreditWatch."
Leverage remains above our expectations (lease-adjusted total debt
to EBITDA was 4.4x for the year ended Dec. 31, 2005). However,
Plastech's lease-adjusted funds from operations to total debt was
15.6% in 2005, which is in line with our expectation of 15%. The
company produced free cash flow in 2005, since working capital was
neutral and capital spending declined somewhat year over year.
Plastech reduced funded debt by $100 million in 2005 using, in
part, cash proceeds from nonrecurring sources, so future debt
reduction will be unlikely to match 2005 levels. Challenging
industry conditions will create significant headwinds against the
company's targeted EBITDA expansion and leverage reduction in
2006. The company will also contend with risks to its financial
profile in 2006, including the possibility of:
* weak production volumes;
* high resin costs;
* a high number of launch executions; and
* the potential for labor disruptions that impair OEM
production.
The ratings on Plastech reflect the company's:
* weak operating results;
* high debt leverage; and
* constrained liquidity resulting from relatively disappointing
revenues and EBITDA.
These challenges will continue as automotive industry fundamentals
remain difficult.
PLIANT CORP: CEO Bevis Provides Update on Restructuring Process
---------------------------------------------------------------
Harold Bevis, President and CEO of Pliant Corp., provided an
update on the Company's financial restructuring process.
Pliant voluntarily filed for Chapter 11 on Jan. 3, 2006 in order
to substantially reduce its debt and interest expense. The
Chapter 11 process is underway and Pliant has continued to operate
its businesses without interruption. On the day that Pliant
filed, a number of "first-day" motions were submitted to the court
to ensure that the company can operate smoothly while the Chapter
11 proceeding is underway.
All of Pliant's "first-day" motions have been granted including:
-- payment of wages and benefits to its employees;
-- honoring of customer obligations and customer programs;
-- payments to truckers and freight vendors;
-- payments to vendors that are critical to uninterrupted
operational performance;
-- continued use of the company's existing cash management
system, bank accounts and business forms;
-- continued payments of taxes to federal, state and local
authorities;
-- payment of commissions due to the company's sales brokers;
and
-- uninterrupted service from the company's utilities
suppliers.
On Feb. 1, 2006 the court also granted Pliant a number of "second-
day" motions including:
-- authority to use a brand-new $70 million credit facility,
if the company needs it;
-- continued support of the company's foreign subsidiaries;
-- continued use of the company's existing insurance
programs; and
-- retention of the company's legal advisers.
The Court has also appointed a formal committee of unsecured
creditors. The company will work with this group on certain
decisions. This is a requirement of the Chapter 11 process and we
have an excellent committee.
The company's management team has been meeting with the necessary
parties to implement its pre-negotiated debt-for-equity exchange.
This exchange will eliminate $578 million of debt and preferred
stock and reduce its interest payments by $85 million.
The company intends to pay all of its vendors/trade creditors in
full under this plan and is in active negotiations to restore
normal trade credit terms.
A key next step for the company is to submit a formal Plan of
Reorganization to implement its pre-negotiated agreement. The
company is on-track to consummate the Chapter 11 process in
approximately 6 months. This is a tight timeline but our goal is
to get in-and-out of Chapter 11 as fast as possible.
So far, the company has not needed to use its $70 million credit
facility. The Company has been generating the necessary cash to
pay all of its bills, continue all of our R&D programs, continue
all of our customer programs, continue our operational excellence
programs and continue our capital investment programs. The
Company has been running on an uninterrupted basis and paying all
of its expenses from its own cash flow. Eventually, Pliant
intends to use some of this credit facility to implement new trade
terms and to invest in capex programs to make Pliant an even
stronger company. That is the Company's objective.
More information about Pliant's reorganization is available on the
Company's website at http://www.pliantcorp.com/reorganization/
Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets. The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001). Edmon L. Morton, Esq.,
and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor,
represent the Debtors in their restructuring efforts. As of
Sept. 30, 2005, the company had $604,275,000 in total assets and
$1,197,438,000 in total debts.
PLYMOUTH RUBBER: Wants to Employ Titlebaum as Special Counsel
-------------------------------------------------------------
Plymouth Rubber, Inc., and its debtor-affiliate, Brite-Line
Technologies, Inc., ask the U.S. Bankruptcy Court for the District
of Massachusetts, Eastern Division, for permission to employ
Joseph E. Titlebaum, Esq., as their special local counsel.
On Dec. 16, 2005, the Canton Planning Board submitted a zoning
change warrant adverse to the Debtors, who in turn determined that
they needed to submit their own warrant.
As special local counsel, Mr. Titlebaum will:
a) provide consulting on the zoning issue, including
representing the Debtors before the Canton Planning Board;
and
b) represent the Debtors at the annual town meeting in April.
Victor Bass, Esq., a member of Burns & Levinson LLP, discloses
that Mr. Titlebaum will charge $250 per hour for his services.
To the best of the Debtors' knowledge, Mr. Titlebaum does not hold
or represent any interest adverse to the Debtors or their estates
with respect to the matters for which he is to be employed.
Headquartered in Canton, Massachusetts, Plymouth Rubber, Inc.,
manufactures and distributes plastic and rubber products,
including automotive tapes, insulating tapes, and other industrial
tapes, mastics and films. Through its Brite-Line Technologies
subsidiary, Plymouth manufactures and supplies highway marking
products. The Company and its subsidiary filed for chapter 11
protection on July 5, 2005 (Bankr. D. Mass. Case Nos. 05-16088
through 05-16089). Victor Bass, Esq., at Burns & Levinson LLP,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they estimated
$10 million to $50 million in assets and debts.
PONDERLODGE INC: Judge Burns Confirms Amended Liquidating Plan
--------------------------------------------------------------
The Hon. Gloria M. Burns of the U.S. Bankruptcy Court for the
District of New Jersey confirmed Ponderlodge, Inc.'s First Amended
Liquidating Chapter 11 Plan.
The Court determined that the Plan satisfies the 13 standards for
confirmation required under Section 1129(a) of the Bankruptcy
Code.
Overview of the Plan
As reported in the Troubled Company Reporter on Jan. 25, 2006,
Arthur Abramowitz, the chapter 11 Trustee appointed in the
Debtor's case, will fund the Plan using:
(a) the proceeds from the sale of the Debtor's real and
personal property located in New Jersey, and,
(b) the net proceeds, if pursued, of Avoidance Actions and
other litigation.
New Jersey Sale
The Trustee says that the New Jersey Sale is the product of arms'-
length negotiations with the State of New Jersey, Department of
Open Spaces. Under the New Jersey Sale transaction, substantially
all of the Debtor's real and personal property will be sold as-is
for $8,450,000. Although the Trustee's appraisal indicated that
the property is worth approximately $11,500,000, the $8,450,000
figure is based on the highest and best use for the property. The
Trustee relates that the property is currently not zoned for its
highest and best use and obtaining those zoning approvals would
take at least one year and would be quite costly. In light of the
Court's order granting Steamboat Capital III, LLC relief from the
automatic stay to proceed with a Sheriff's Sale effective Mar. 3,
2006, the Trustee believes that pursuing another sale transaction
is unreasonable and that the New Jersey Sale transaction is the
highest and best offer for the property.
Distributions to Creditors
At the closing of the New Jersey Sale, the Trustee will distribute
the funds to creditors in order of their statutory priority.
A full-text copy of Ponderlodge, Inc.'s Disclosure Statement is
available for free at http://ResearchArchives.com/t/s?48f
Headquartered in Villas, New Jersey, Ponderlodge, Inc. --
http://www.ponderlodge.com/-- operates a golf course. The
Company filed for chapter 11 protection on July 13, 2005 (Bankr.
D. N.J. Case No. 05-32731). D. Alexander Barnes, Esq., at
Obermayer, Rebmann, Maxwell & Hippel LLP represents the Debtor in
its chapter 11 case. When the Debtor filed for protection from
its creditors, it estimated assets of $10 million to $50 million
and debts of $1 million to $10 million.
PT HOLDINGS: Posts $6 Million Net Loss in Quarter Ended Dec. 31
---------------------------------------------------------------
PT Holdings Company, Inc., the parent company of Port Townsend
Paper Corporation reported results for the three months and year
ended Dec. 31, 2005.
For the three months ended Dec. 31, 2005, net sales were
$54.8 million, a 1% increase compared to $54 million for the three
months ended Dec. 31, 2004. The net loss for the three months
ended Dec. 31, 2005 was approximately $6 million compared to a net
loss of $3.4 million for the same period in 2004.
Net sales increased 8% to $220.5 million for the year ended
Dec. 31, 2005 from $203.7 million for the year ended Dec. 31,
2004. For the year ended Dec. 31, 2005, the net loss was
$14.5 million compared to a net loss of $11.9 million for the
same period in 2004.
During the year ended Dec. 31, 2005, earnings from operations
decreased $3.1 million to $5.1 million.
Liquidity
Total debt outstanding at Dec. 31, 2005, including drawings on
revolving credit facilities and exclusive of original issue
discount, was $146.3 million compared to $141 million at Dec. 31,
2004. The Company's liquidity, consisting of cash and
availability under its revolving credit facility, was
approximately $8 million at Dec. 31, 2005. Upon delivery
of its 2004 audited financial statements to its lenders, the
Company will have $3 million of additional borrowing availability
under its credit facilities.
Additionally, if the Company's availability under its revolving
credit facilities drops below $2.5 million on either of its U.S.
or Canadian revolving facilities, the Company would be subject to
certain financial covenants, including minimum fixed charge
coverage and capital expenditure limitations. While the Company
does not anticipate falling below either of the $2.5 million
thresholds for the foreseeable future if it completes its 2004
audit and achieves its operating performance and working capital
improvement goals, it believes if such provisions were triggered
it would not meet the covenant requirements and therefore would
need to either seek a waiver or an amendment of its revolving
credit agreement.
No independent public accounting firm has performed any audit,
review or other procedures on the results. The current re-audit
of the Company's 2002 and 2003 financial statements, the audit of
the Company's 2004 and 2005 financial statements, and review
procedures when subsequently performed on the Company's 2004 and
2005 quarterly financial statements could result in material
adjustments to the unaudited results of operations.
Headquartered in Puget Sound, Washington, The Port Townsend Paper
family of companies -- http://www.ptpc.com/-- employs 800 people
and annually produces more than 320,000 tons of unbleached Kraft
pulp, paper and linerboard at its mill in Port Townsend,
Washington. The Company also manufactures approximately 1.8
billion square feet of corrugated products annually at its three
Crown Packaging Plants and two BoxMaster Plants located in British
Columbia and Alberta.
* * *
As reported in the Troubled Company Reporter on Dec. 23, 2005,
PT Holdings Company Inc., parent company of Port Townsend Paper
Corporation, reported the receipt of a 30-day waiver extension to
deliver its 2004 audited financial statements under their primary
revolving credit facility. Under the extension, the 2004 audited
financial statements are now due by Jan. 31, 2006.
As previously announced, the company is also in the process of
restating and re-auditing its 2002 and 2003 financial statements.
RAYE LLC: Voluntary Chapter 11 Case Summary
-------------------------------------------
Debtor: The Raye LLC
489 Washington Street
Auburn, Massachusetts 01501
Bankruptcy Case No.: 06-40134
Type of Business: The Debtor owns a 40,000 square-foot
multi-retail commercial property.
Chapter 11 Petition Date: February 7, 2006
Court: District of Massachusetts (Worcester)
Judge: Joel B. Rosenthal
Debtor's Counsel: James P. Ehrhard, Esq.
Kressler & Ehrhard, P.C.
11 Pleasant Street
Worcester, Massachusetts 01609
Tel: (508) 791-8411
Financial Condition as of February 7, 2006:
Total Assets: $2,500,000
Total Debts: $1,597,790
The Debtor does not have any unsecured creditors who are not
insiders.
RIDDELL BELL: Easton Merger Cues S&P to Put Ratings on Neg. Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on sporting
goods company Riddell Bell Holdings Inc. on CreditWatch with
negative implications including, its 'B+' corporate credit rating.
About $256 million of existing debt is affected by this action.
The CreditWatch listing follows Riddell Bell's announcement that
it will combine its operations with Easton Sports Inc., a leading
baseball, softball, hockey, and cycling equipment manufacturer, to
form a new entity called Easton-Bell Sports Inc. The transaction,
expected to close during the first quarter of fiscal 2006, is
valued at about $400 million, and will be financed with a
combination of equity and debt. Teachers' Private Capital, York
Street Capital Partners, and Jim Easton will invest additional
equity into the company. Fenway Partners will maintain a majority
ownership in the company.
The combined entity will also use a new $415 million senior
secured bank facility to refinance a portion of Riddell Bell's
existing debt and fund a portion of the merger. Easton-Bell
Sports will generate more than $600 million in annual revenue and
hold leading market positions in:
* baseball,
* softball,
* football,
* hockey,
* cycling,
* auto racing, and
* snow and motorcycle sports equipment.
"However, we are concerned that the additional debt incurred from
this transaction may further weaken credit measures," said
Standard & Poor's credit analyst Patrick Jeffrey.
Standard & Poor's will meet with management to discuss the
transaction and its impact on the ratings. Key areas of the
review will include:
* integration risk,
* the combined entity's debt leverage,
* financial policy and liquidity,
* Riddell Bell Holdings' fiscal 2005 financial performance, and
* the business and financial profile of Easton Sports Inc.
RIDDELL BELL: Moody's Places B1 Long-Term Ratings Under Review
--------------------------------------------------------------
Moody's Investors Service placed the long-term ratings of Riddell
Bell Holdings, Inc., under review for possible downgrade and
affirmed the company's SGL-2 speculative grade liquidity rating
following the announcement that Riddell Bell has reached an
agreement to acquire 100% of the outstanding capital stock of
Easton Sports, Inc., a leading sports equipment company, for $400
million. The review for downgrade reflects the potential for a
material increase in debt and leverage, as well as integration
risk as Riddell Bell absorbs a company that is about two-thirds
its size. The affirmation of the SGL-2 speculative grade rating
reflects the good liquidity of Riddell Bell in its current form.
These ratings were placed under review:
* B1 corporate family rating;
* B1 rating for $50 million guaranteed senior secured
revolving credit facility due 2010;
* B1 rating for $109 million guaranteed senior secured term
loan due 2011;
* B3 for $140 million 8.375% guaranteed senior subordinated
notes due 2012;
This rating was affirmed:
* SGL-2 speculative grade liquidity rating.
The rating review will focus on the impact of the transaction on
Riddell Bell's pro forma leverage metrics and capital structure,
as well as the prospects for future debt reduction. The review
will also include a comprehensive analysis of Easton Sports'
operations, customer base, operational platform, investment needs,
seasonality, recent performance trends as well as potential
synergies and the integration strategy. Additionally, Moody's
will continue to review the performance expectations for Riddell
Bell's existing operations and the potential for future
acquisitions.
Notwithstanding its concerns, Moody's recognizes that the Easton
Sports acquisition diversifies Riddell Bell's revenue base from
its historical concentration in head protection equipment,
provides access to a strong proprietary brand, expands its
research and development capabilities, and accommodates greater
product breadth and depth for its retail customers. Moody's also
notes that limited product overlap between the two companies could
temper potential integration risk and that the equity contribution
from the sponsors is material. If Moody's becomes comfortable
that the transaction will not materially weaken credit metrics and
that the company will not encounter material integration
challenges, the corporate family rating could be affirmed.
The affirmation of the speculative liquidity rating reflects
Moody's expectation that, in its current form, Riddell Bell's free
cash flow to debt will materially improve as integration costs
related to the combination of Riddell and Bell decline. However,
the SGL rating is constrained by the company's minimal cash
balances, which heighten the company's reliance on its committed
bank the facility, both for seasonal purposes and potentially to
meet unexpected operating expenses. The SGL rating is further
constrained by Riddell Bell's limited alternative liquidity
sources, as the vast majority of the company's assets are pledged
to the rated facilities. Moody's notes that the company's
speculative grade liquidity rating could change when the
acquisition closes, depending on the combined entity's cash flow
and liquidity, as well as the terms of the proposed credit
facility.
Headquartered in Irving, Texas, Riddell Bell Holdings, Inc., is a
leading developer and marketer of head protection equipment and
related accessories for numerous athletic and recreational
activities. Sales for the twelve-month period ended Oct. 1, 2005,
were approximately $359.5 million.
RIDGEBACK RANCH: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Ridgeback Ranch, Inc.
P.O. Box 70
Mendota, California 93640
Tel: (559) 655-9000
Bankruptcy Case No.: 06-10116
Type of Business: The Debtor grows and sells fruits & vegetables.
Chapter 11 Petition Date: February 7, 2006
Court: Eastern District of California (Fresno)
Judge: W. Richard Lee
Debtor's Counsel: T. Scott Belden, Esq.
Klein, DeNatale, Goldner, Cooper,
Rosenlieb & Kimball, LLP
4550 California Avenue, 2nd Floor
Bakersfield, California 93309-1172
Tel: (661) 395-1000
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Lockhart Seeds, Inc. Goods $420,749
P.O. Box 1361
Stockton, CA 95205
Western Farm Service, Inc. Goods $393,667
File 73041
San Francisco, CA 94160-3041
Headstart Nursery, Inc. Goods $149,420
4860 Monterey Road
Gilroy, CA 95020
CHEP, USA Goods $94,648
Quad Logistics Professional Services $94,393
International Paper Goods $77,523
Tuff Boy Leasing, Inc. Equipment Rental $73,471
Ultra Gro Plant Food Company Goods $72,773
Guthrie Petroleum Goods $68,756
Pacific Gas & Electric Utility Bills $67,133
Fordel, Inc. Rent in Arrears $54,976
Delta Packing Company of Lodi Professional Services $53,865
Agri-Valley Irrigation Goods $53,242
J&L Irrigation Company, Inc. Goods $52,490
Pioneer Equipment Company Goods $43,693
Wholesale Equipment of Fresno Goods $27,295
Halsey Electric, Inc. Professional Services $21,899
Randall Johnston Personal Loan $20,000
Rabobank, NA Credit Card Purchases $19,259
Ross & Christopher Professional Services $17,947
ROMACORP INC: Can Hire Keen Realty as Real Estate Consultants
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas gave
Romacorp, Inc., and its debtor-affiliates permission, on an
interim basis, to employ Keen Realty, LLC, as their real estate
consultants.
Keen Realty will:
1) organize the lease information for each of the Debtors' 12
real property leases in a manner that clearly displays the
store and lease economies;
2) work together with the Debtors in jointly establishing
negotiating goals and parameters for the real property
leases, including rent reductions, lease term modifications
and other leasehold concessions;
3) contact the each landlord of the 12 real property leases and
negotiate modifications in accordance with the parameters
established by the Debtors;
4) work with the landlords and the Debtors to accurately
document all lease modification proposals and attend and
participate in Bankruptcy Court hearings and creditors'
committee hearings when requested by the Debtors; and
5) perform all other real estate consultancy services as
requested by the Debtors in their chapter 11 cases.
Harold J. Bordwin, a member of Keen Realty, discloses that his
Firm will be paid with:
a) an advisory and consulting fee of $400 for every lease that
is analyze and reviewed;
b) a monetary savings fee equal to 4% of the total rent
reduction savings from a complete lease renegotiation
transaction; and
c) a minimum renegotiation fee of $1,500 in the event the
Debtors complete a material renegotiation transaction that
does not involve monetary savings.
Mr. Bordwin reports Keen Realty's professionals bill:
Designation Hourly Rate
----------- -----------
Chairman & President $530
Executive Vice-President $475
Vice-Presidents $385
Directors $250
Associates $200
Administrative Support and
Researchers $125
Keen Realty assures the Court that it does not represent any
interest materially adverse to the Debtors pursuant to Section
327(a) of the Bankruptcy Code.
The Court will convene a hearing at 9:00 a.m., on March 7, 2006,
to consider the Debtors' request on a final basis.
Headquartered in Dallas, Texas, Romacorp, Inc., owns and operates
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.
ROMACORP INC: Wants Court OK to Hire BKD LLP as Tax Consultants
---------------------------------------------------------------
Romacorp, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Northern District of Texas for permission to employ
BKD LLP as their tax consultants.
BKD will:
1) prepare state income and franchise tax returns for the
Debtors in numerous states throughout the United States and
Prepare the separate U.S. partnership income tax return Form
1065 for Roma Dining, L.P.;
2) consult and assist with the Debtors' bookkeeping as
necessary for the preparation of the Debtors' tax returns;
3) assist the Debtors in estimating quarterly federal and
state tax payments for each of the taxing jurisdictions for
which BKD will assists in the preparation of tax returns;
and
4) perform all other accounting and tax preparation services to
the Debtors that are necessary in their bankruptcy cases.
Cary G. Jones, a member of BKD, discloses that his Firm will not
receive a retainer for services rendered to the Debtors.
Mr. Jones reports that BKD will be compensated at an hourly rate
of 85% of the billing rate for services rendered to the Debtors.
Mr. Jones reports that professionals from BKD performing services
to the Debtors will charge $60 to $280 per hour.
BKD assures the Court that it does not represent any interest
materially adverse to the Debtors pursuant to Section 327(a) of
the Bankruptcy Code.
Headquartered in Dallas, Texas, Romacorp, Inc., owns and operates
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.
S-TRAN HOLDINGS: Court OKs Exclusive Period Extensions to March 8
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended,
until March 8, 2006, the time within which S-Tran Holdings, Inc.,
and its debtor-affiliates have the exclusive right to file a
chapter 11 plan.
The Court also gave the Debtors until March 8, 2006, to solicit
acceptances of that plan from their creditors,
The Debtors completed a sale of substantially all of their assets
in June 2005, and paid off approximately $9 million owed under a
senior secured credit facility to LaSalle Business Credit, LLC.
The Debtors say they are currently addressing the issue of the
numerous freight claims filed against their estates and are
analyzing information relevant to the potential asset recoveries
for their estates. The Debtors look forward to negotiating a
consensual chapter 11 plan with their creditors.
Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc.,
provides common carrier services and specialized in less-than-
truckload shipments and also supplies overnight and second day
service to shippers in 11 states in the Southeast and Midwestern
United States. The Company and its debtor-affiliates filed for
chapter 11 protection on May 13, 2005 (Bankr. D. Del. Case No. 05-
11391). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub P.C. represents the Debtors. Donald A.
Workman, Esq., at Foley & Lardner, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they listed total assets of
$22,508,000 and total debts of $30,891,000.
SIGNATURE 5: Moody's Removes B2 Rating on $20MM Notes from Watch
----------------------------------------------------------------
Moody's Investors Service removed from watch for possible upgrade
the rating of the following class of notes issued by Signature 5
L.P., a collateralized debt obligation issuer:
* $20,000,000 Class C Fixed Rate Notes due 2012
Prior Rating: B2 (on watch for possible upgrade)
Current Rating: B2
Although the rating on the notes was earlier placed on watch for
possible upgrade due to improvement in the credit quality of the
transaction's underlying collateral portfolio, consisting
primarily of senior unsecured corporate bonds, it was determined,
upon further analysis, that the extent of the improvement did not
warrant an upgrade, according to Moody's.
SILGAN HOLDINGS: S&P Upgrades Corporate Credit Rating to BB+
------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term ratings on
metal and plastic packaging maker Silgan Holdings Inc., including
raising the long-term corporate credit rating to 'BB+' from 'BB'.
At the same time, Standard & Poor's affirmed its 'B-1' short-term
rating. The outlook is stable.
"The upgrade acknowledges Silgan's stronger financial profile
following the recent achievement of management's goal to reduce
debt by $300 million," said Standard & Poor's credit analyst
Cynthia Werneth.
Although the company is likely to remain moderately acquisitive,
management is expected to adhere to strict return criteria and
leverage discipline, thereby supporting credit quality. The
company is expected to maintain midteens percentage return on
capital and funds from operations to total debt (adjusted for
capitalized operating leases and unfunded postretirement
obligations) in the 20% to 25% range.
The ratings on Stamford, Connecticut-based Silgan Holdings Inc.
are supported by:
* its satisfactory business position as a major North American
producer of rigid consumer goods packaging;
* fairly steady earnings and free cash flow generation; and
* demonstrated commitment to maintain a capital structure
consistent with the current ratings.
These attributes are offset by still-somewhat aggressive financial
policies that reflect the business and financial risks associated
with its growth-via-acquisition strategy.
With 2005 revenues of $2.5 billion, Silgan's business mix is about
three-quarters metal food cans and closures and one-quarter
plastic containers used primarily for personal care products.
Silgan is the largest producer of metal food cans in North America
and enjoys a large volume market share estimated at 50%. Although
the metal can industry is mature and competitive, end markets are
relatively stable.
However, they are subject to seasonal variations in food
production and consumer buying habits. The plastic container
segment, where Silgan enjoys a co-leadership position in personal
care, is fragmented, and competition is intense. In general,
Silgan's customer concentration is moderate, and a significant
portion of its metal- and plastic-container output is produced
under long-term supply contracts that should continue to provide
meaningful protection against raw-material price movements.
Nevertheless, the 2005 Gulf Coast hurricanes caused plastic resins
to be in tight supply, and costs spiked during the fourth quarter.
This, together with related decisions by consumer products
companies to delay product re-launches, hurt Silgan's plastic
segment operating profits, which had already been under some
pressure earlier in the year. Although costs for all raw
materials and energy are expected to remain high in the
intermediate term, Silgan should continue to offset some of the
impact with continued operating cost reductions and easy-open
ends' increasing penetration of the metal food-can segment.
Credit quality is supported by:
* the company's relatively steady profitability;
* its consistent free cash generation; and
* the expected maintenance of a capital structure appropriate
for the ratings.
Moreover, the company is expected to maintain a disciplined
approach to acquisitions, which should be limited in number and
moderate in size. The ratings could come under pressure in the
unlikely event of a large, debt-financed acquisition. At the new
ratings, upward potential is limited by financial policies and
acquisition-related risks.
SOLUTIA INC: Names Kent Davies as President for CPFilms Business
----------------------------------------------------------------
Solutia Inc. (OTC Bulletin Board: SOLUQ) hired Kent Davies as
senior vice president of Solutia Inc. and president of its CPFilms
business. In this role, Davies will report directly to Jeff
Quinn, president and CEO of Solutia Inc., a reporting relationship
that signifies the heightened level of importance CPFilms will
play in Solutia's future.
"CPFilms is a critical growth engine for Solutia," Mr. Quinn said.
"It has the leading position in a growing market. With Kent's
proven track record for achieving profitable growth, I am
confident he is the best person to take CPFilms to an even higher
degree of success in the future."
CPFilms is the world's largest manufacturer of window films, which
are used primarily by consumers to improve the solar control and
security properties of the windows in their homes and automobiles.
CPFilms is the manufacturer of LLumar, the world's best-selling
brand of professionally installed window films, as well as several
other leading brands.
"I am thrilled to lead such a great organization," said Davies.
"CPFilms has a tradition of innovation, market-leading brands, and
intense customer focus. I am confident that we can build on that
winning foundation while accelerating our pace of growth and
meeting the needs of more customers in more markets around the
world. We will build on our current leadership position and
utilize our significant capabilities to own the momentum in our
growing markets."
Mr. Davies, 42, most recently held the position of senior vice
president of marketing, research and development, and regulatory
affairs for United Industries Corp., the second largest and most
rapidly growing company in the U.S. consumer lawn and garden and
household insect control markets. Prior to that, he served in
general management and marketing capacities at Kimberly-Clark
Corp., in global product strategy, new product development, and
new product introduction roles at 3M, and in sales and sales
management positions at General Mills. Mr. Davies earned an
M.B.A. from the University of Minnesota and a B.A. from the
University of California at Berkeley.
Ken Vickers, previously president of CPFilms, has been named
chairman emeritus. He will continue to play a critically
important role in CPFilms, assisting Mr. Davies in his strategy to
take the business to its next level of growth.
"Under Ken's leadership, CPFilms has grown to become the market
leader in the window film and precision-coated films' markets,"
said Mr. Quinn. "I am confident he will approach his new role
with the drive and enthusiasm that have helped make CPFilms into
the strong company it is today."
CPFilms is the manufacturer of LLumar, LLumar Magnum, Vista,
Formula One, and Gila brands of window films, as well as Halcyon
Shades. Its products are widely used for solar control and
security applications as a glass enhancement product installed on
the interior of windows and doors. In addition, the company
manufactures specialty dyed, coated, metallized, and sputter-
deposition films and laminates for a variety of original equipment
manufacturer applications.
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. Solutia is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis.
STRUCTURED ASSET: Moody's Cuts Class B-3 Certificate Rating to Ba3
------------------------------------------------------------------
Moody's Investors Service has downgraded one certificate from one
transaction, issued by Structured Asset Mortgage Investments Trust
in 2001. The transaction is backed by first-lien fixed-rate
mortgage loans.
The most subordinate certificate has been downgraded because of
weak performance of the underlying loans with historical and
expected cumulative losses exceeding original expectations. Future
losses could cause the write-down of the non-rated subordinate
certificates in the 2001-4 transaction.
Moody's complete rating action:
Issuer: Structured Asset Mortgage Investments Trust
Seller: Structured Asset Mortgage Investments Inc.
* Downgrade: Series 2001-4; Class B-3, downgraded to
Ba3 from Baa3
For more information please see http://www.Moodys.com/
SUMMIT AT PEOH: Case Summary & 7 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Summit at Peoh Point, LLC
12609 Issaquah-Hobart Road
Issaquah, Washington 98027
Bankruptcy Case No.: 06-00195
Chapter 11 Petition Date: February 9, 2006
Court: Eastern District of Washington (Spokane/Yakima)
Judge: Patricia C. Williams
Debtor's Counsel: J. Jarrette Sandlin, Esq.
Sandlin Law Firm
P.O. Box 1005
Zillah, Washington 98953
Tel: (509) 829-3111
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 7 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
John Ritchie Promissory note $340,000
800 Bellevue Way Northeast,
Suite 400
Bellevue, WA 98004
Ross K. Yamashita Promissory note $42,000
1173 Jewel Weed Court
Las Vegas, NV 89123
Christian Englund Promissory note $30,000
910 Place Southeast
Mill Creek, WA 98012
Ingram Realty, LLC Trade debt $11,500
Redhawk Land Services Trade debt $7,500
Barnes & Co. Trade debt $2,500
Perkins & Coie Trade debt $1,500
SUNRISE SENIOR: Notes Redemption Cues Moody's to Withdraw Ratings
-----------------------------------------------------------------
Moody's Investors Service has withdrawn the ratings of Sunrise
Senior Living, Inc., following the redemption of the company's
5.25% convertible subordinated notes. The notes were called for
redemption on Jan. 11, 2005. On Feb. 6, 2006, the company
completed the redemption. Substantially all remaining outstanding
notes had been converted into shares of Sunrise Senior Living
common stock at a conversion price of $17.92 per share prior to
the redemption date. The convertible notes were the only debt
instrument of the company rated by Moody's.
These ratings have been withdrawn:
* $125 million 5.25% convertible subordinated notes, B1
* Corporate family rating, Ba2
As of Dec. 31, 2005, Sunrise Senior Living operated 415
communities in the United States, Canada, Germany and the United
Kingdom offering a full range of personalized senior living
services, including independent living, assisted living, care for
individuals with Alzheimer's and other forms of memory loss, as
well as nursing and rehabilitative care. Sunrise Senior Living
recognized revenue of $1.6 billion for the twelve months ended
Sept. 30, 2005.
SUPERB SOUND: Wants to Reject Unexpired Lease with Tom Wood Lexus
-----------------------------------------------------------------
Superb Sound, Inc., d/b/a Ovation, Ovation Audio/Video, and
Ovation Home, asks the U.S. Bankruptcy Court for the Southern
District of Indiana for permission to reject an unexpired lease
with Tom Wood Lexus.
On Oct. 14, 2005, before filing for bankruptcy protection, the
Debtor leased a 2005 Lexus R330 automobile from Tom Wood Lexus.
The Debtor tells the Court that it no longer uses the Vehicle, the
Lease is a burden to the estate, is not a source of potential
value, and provides no benefit to the estate.
Headquartered in Indianapolis, Indiana, Superb Sound, Inc., d/b/a
Ovation, Ovation Audio/Video and Ovation Home --
http://www.ovation-av.com/-- is an audio, video and mobile
electronics specialist. The Company filed for chapter 11
protection on Oct. 14, 2005 (Bankr. S.D. Ind. Case No. 05-29137).
William J. Tucker, Esq., at William J. Tucker & Associates, LLC,
represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it listed
$9,416,642 in assets and $14,546,796 in debts.
SYCAMORE CREEK: Case Summary & 16 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Sycamore Creek Golf Club, Inc.
RR 1 #427
Ripley, West Virginia 25271
Bankruptcy Case No.: 06-20043
Type of Business: The Debtor owns and operates a golf course
located in Osage Beach, Missouri. See
http://www.sycamorecreekgolfclub.com/
Chapter 11 Petition Date: February 8, 2006
Court: Southern District of West Virginia (Charleston)
Debtor's Counsel: Joseph W. Caldwell, Esq.
Caldwell & Riffee
P.O. Box 4427
Charleston, West Virginia 25364
Tel: (304) 925-2100
Fax: (304) 925-2193
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $100,000 to $500,000
Debtor's 16 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Suntrust Property located at $299,833
P.O. Box 4418 MC 0039 Rural Route 1 #427,
Atlanta, GA 30302 Ripley, WV 25271
United Bank $16,120
2650 Grand Central Avenue
Vienna, WV 261050190
Stull Enterprises, Inc. Judgment $10,006
P.O. Box 887
Concordville, PA 19331
Advanced Turf Solutions $9,154
Sheriff of Jackson County Property taxes $8,221
American Express $4,993
Charter Media $2,393
City National Bank $2,179
United Bank $2,014
Ladco Leasing $1,316
Oglebay Norton Company $1,121
G&M Fuel $757
Callaway Golf $320
Verizon Telephone bill $312
Hodges Rash Company, Inc. Unknown
Textron Financial Lease of golf carts Unknown
SYCAMORE/CUSTOM: Case Summary & 11 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Sycamore/Custom Living, L.L.C.
415 Route 24
Chester, New Jersey 07930
Bankruptcy Case No.: 06-10864
Type of Business: The Debtor is an affiliate of Deep River
Development Group, LLC. Deep River filed for
chapter 11 protection on June 29, 2005 (Bankr.
D. N.J. Case No. 05-31279).
Chapter 11 Petition Date: February 8, 2006
Court: District of New Jersey (Newark)
Debtor's Counsel: Sam Della Fera, Esq.
Booker, Rabinowitz, Trenk, Lubetkin,
Tully, DiPasquale & Webster
100 Executive Drive, Suite 100
West Orange, New Jersey 07052
Tel: (973) 243-8600
Fax: (973) 243-8677
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 11 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Lisa Schmidlin Trade Debt $375,678
15 Springcroft Road
Far Hills, NJ 07931
Mark and Lynette Devlin Trade Debt $356,000
80 Candace Lane
Chatham, NJ 07928
Eugene J. Long Trade Debt $208,125
16 Springcroft Road
Far Hills, NJ 07931
Anthony Sposaro Trade Debt $28,000
Strober Haddonfield Trade Debt $27,535
Carman Massara Trade Debt $21,000
Keller & Kirkpatrick, Inc. Trade Debt $16,509
Jose Abreau General Contractor Trade Debt $15,500
JMS Construction Trade Debt $8,912
Karl A. Fenske Trade Debt $3,288
George Mohr Trade Debt $2,842
TELEFONICA DEL PERU: Moody's Confirms Ba2 Certificate Rating
------------------------------------------------------------
Moody's Investors Service confirmed the Ba2 rating of the pass-
through certificates issued by Telefonica del Peru Grantor Trust.
The rating action reflects the transaction's stable performance
since the rating of the certificates was placed on review for
downgrade in November 2004. Moody's had downgraded the
certificates to Ba2 from Baa3 and placed the ratings on review for
possible downgrade on Nov. 24, 2004.
Historically, the rating of the certificates has been pressured
primarily by:
(i) a prolonged decrease in net settlement rates which --along
with volatile settlement traffic- caused declines in
cashflows and debt service coverage ratios; and
(ii) deterioration in the credit quality of the designated
carriers.
Designated carriers are those international telephone companies
who, in the context of this transaction, make net settlement
payments for services provided by Telefonica del Peru in the
completion of international telephone calls.
The most recent performance information received by Moody's, for
the collection period from July 2005 to Dec. 2005, shows the
overall stabilization of various performance indicators, as
described below.
The average per-minute net settlement rate has been stable over
the last two years, averaging $0.11 per minute during that
timeframe. In addition, the overall credit quality of the
designated carriers has gradually improved, in tandem with
improving credit quality in the telecommunications industry.
In addition, the debt service coverage ratio averaged 2.3 times
debt service during the three most recent semi-annual collection
periods. Although such level continues to be close to the early
amortization trigger of 2.0 times, it has remained stable during
the last 18 months.
THREE-FIVE: Equity Panel Hires Jennings Haug as Bankruptcy Counsel
------------------------------------------------------------------
The Official Equity Holders Committee appointed in Three-Five
Systems, Inc.'s chapter 11 case, sought and obtained authority
from the U.S. Bankruptcy Court for the District of Arizona to
retain Jennings, Haug & Cunningham, LLP as its bankruptcy counsel.
Jennings Haug will:
(a) advise the Equity Holders Committee with respect to its
powers and duties as a duly constituted committee;
(b) attend meetings and negotiate with representatives of the
Debtor, creditors and other parties in interest and advise
and consult the Equity Holders Committee on the conduct of
the Chapter 11 case, including all of the legal and
administrative requirements of operating in Chapter 11;
(c) advise the Equity Holders Committee in connection with any
matter affecting the administration of the Debtor's
estate;
(d) take all action necessary to protect and preserve the
interests of the Equity Holders Committee and its member
constituents;
(e) prepare, on the Equity Holders Committee's behalf, all
motions, applications, answers, orders, reports and papers
necessary to preserve, prosecute and present the issues of
the OEC and its constituents;
(f) appear before the Court, any appellate courts and the U.S.
Trustee and protecting the interests of the estate and the
interests of the Equity Holders Committee before such
courts and the U.S. Trustee; and
(g) perform all other necessary legal services and providing
all other necessary legal advise to the Equity Holders
Committee in connection with the Chapter 11 case.
Philip G. Mitchell, Esq., a partner at Jennings Haug, discloses
his Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Partners. $210 - $365
Associates $170 - $195
Legal Assistants $110 - $125
Mr. Mitchell 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 Tempe, Arizona, Three-Five Systems, Inc. --
http://tfsc.com/-- provides specialized electronics manufacturing
services to original equipment manufacturers. TFS offers a broad
range of engineering and manufacturing capabilities. The Company
filed for chapter 11 protection on Sept. 8, 2005 (Bankr. D. Ariz.
Case No. 05-17104). Thomas J. Salerno, Esq., at Squire, Sander &
Dempsey, LLP, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
$11,694,467 in total assets and $2,880,377 in total debts.
TRM CORP: Shareholders Sell 950,000 Shares of Common Stock
----------------------------------------------------------
TRM Corporation filed Supplement No. 2 to a Prospectus filed on
Dec. 2, 2005. The prospectus was filed to facilitate the resale
of 2,778,375 shares of common stock.
Some of the selling shareholders are:
Selling Shareholder Number of Shares
------------------- ----------------
Bay Pond Partners, L.P. 115,000
Bay Pond Investors (Bermuda), L.P. 35,000
Perry Partners, L.P. 256,000
Perry Partners International, Inc. 544,000
As previously reported in the Troubled Company Reporter on
Jan. 3, 2006, the Company will not receive any proceeds from the
sale of the common stock by the selling shareholders.
The Company's common stock is traded on the Nasdaq National Market
under the symbol "TRMM." Last month, TRM's common stock traded
between $7.18 and $8.90 per share. This month, the company's
common stock reached $9.02 per share.
A full-text copy of the Registration Statement is available for
free at http://ResearchArchives.com/t/s?413
Headquartered in Portland, Oregon, TRM Corporation --
http://www.trm.com/-- is a consumer services company that
provides convenience ATM and photocopying services in high-traffic
consumer environments. TRM's ATM and copier customer base has
grown to over 35,000 retailers throughout the United States and
over 46,200 locations worldwide, including 6,400 locations across
the United Kingdom and over 4,900 locations in Canada. TRM
operates one of the largest multi-national ATM networks in the
world, with over 22,000 locations deployed throughout the United
States, Canada, Great Britain, including Northern Ireland and
Germany.
* * *
As previously reported in the Troubled Company Reporter on
Jan. 24, 2006, Standard & Poor's Ratings Services held its 'B+'
corporate credit and senior secured debt ratings on ATM and
photocopier service provider TRM Corporation on CreditWatch with
negative implications, following the company's announcement that
it has hired Allen & Co. to advise its board on strategic
alternatives to increase shareholder value.
TRUMP HOTELS: Has Until Mar. 15 to Object to Otis Elevator Claims
-----------------------------------------------------------------
In January 2005, Otis Elevator Company filed several claims
against Trump Hotels & Casino Resorts, Inc., nka Trump
Entertainment Resorts, Inc., and its debtor-affiliates:
Claim No. Debtor Claim Asserted Against Claim Amount
-------- ----------------------------- ------------
1795 Trump Taj Mahal Associates $12,958
1796 Trump Plaza Associates 44,605
1797 Trump Marina Associates, L.P. 36,979
1798 Trump Taj Mahal Associates 152,652
1799 Trump Marina Associates, L.P. 87,733
1800 Trump Plaza Associates unliquidated
1801 Trump Marina Associates, L.P. unliquidated
1902 Trump Hotels & Casino Resorts, Inc. unliquidated
1903 Trump Plaza Associates 71,709
1904 Trump Taj Mahal Associates unliquidated
The Debtors and Otis Elevator have stipulated several times to:
-- adjourn the hearing as to Claim Nos. 1795 to 1797; and
-- extend the time for the Debtors to object to Otis
Elevator's Claim Nos. 1798 to 1801 and 1902 to 1904.
In a Court-approved stipulation, the Parties agree that:
a. the deadline by which the Debtors must file objections to
any of the Otis Claims will be extended to March 15, 2006;
b. Otis Elevator should file its response to the Debtors'
objection by March 22, 2006; and
c. the hearing on the objection will be continued on March 39,
2006 at 10:00 a.m.
The Parties also agree that the Continued Hearing will be vacated
if they are able to resolve the Otis Claims before March 29,
2006.
Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and
operates four properties and manages one property under the Trump
brand name. The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring. When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts. The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005. (Trump Hotels
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Nov. 10, 2005,
Moody's Investors Service affirmed the ratings of Trump
Entertainment Resorts, Inc. Trump's rating outlook is stable:
-- $200 million senior secured revolver due 2010 -- B2;
-- $150 million senior secured term loan due 2012 -- B2;
-- $150 million senior secured delayed draw term loan due
2012 -- B2;
-- $1.25 billion second lien senior secured notes due 2015 --
Caa1;
-- Speculative grade liquidity rating -- SGL-3; and
-- Corporate family rating -- B3.
TRUMP HOTELS: Judge Wizmur Approves Stipulation With PDS Gaming
---------------------------------------------------------------
In 2001, PDS Gaming Corporation entered into three master lease
agreements and accompanying lease schedules for gaming and related
equipment with Trump Taj Mahal Associates, Trump Marina Associates
and Trump Plaza Associates.
In January 2005, PDS Gaming filed 36 proofs of claim against Trump
Hotels & Casino Resorts, Inc., nka Trump Entertainment Resorts,
Inc., and its debtor-affiliates asserting amounts reflecting the
sum of the remaining rents under the Leases plus, if applicable,
the estimated value of equipment at the end of the applicable
Lease term.
On March 4, 2005, the Debtors objected to Claim Nos. 1841 through
1845 and 1847 on the grounds that they were duplicative of other
claims filed by PDS Gaming.
On March 10, 2005, the Debtors withdrew their objection to Claim
Nos. 1841, 1843, 1845 and 1847 but maintained their objection to
Claim Nos. 1842 and 1844.
The Debtors' Second Amended Joint Plan of Reorganization became
effective on May 20, 2005. Subsequently, the Debtors assumed the
Leases pursuant to Section 365 of the Bankruptcy Code on the
Effective Date.
To resolve their dispute, the Debtors and PDS Gaming agree that:
(a) the assumption of the three PDS Leases has mooted PDS
Gaming's Claims and accordingly, PDS Gaming withdraws the
Claims;
(b) as a result of the Lease Assumption, their rights,
obligations and remedies as to each other will be governed
by the terms and condition of the Leases; and
(d) the Debtors have waived any right that they might have
under the Bankruptcy Code to recharacterize or dispute the
nature of the Leases in their Chapter 11 cases.
Judge Wizmur of the U.S. Bankruptcy Court for the District of New
Jersey approves the parties' Stipulation.
Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and
operates four properties and manages one property under the Trump
brand name. The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring. When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts. The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005. (Trump Hotels
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Nov. 10, 2005,
Moody's Investors Service affirmed the ratings of Trump
Entertainment Resorts, Inc. Trump's rating outlook is stable:
-- $200 million senior secured revolver due 2010 -- B2;
-- $150 million senior secured term loan due 2012 -- B2;
-- $150 million senior secured delayed draw term loan due
2012 -- B2;
-- $1.25 billion second lien senior secured notes due 2015 --
Caa1;
-- Speculative grade liquidity rating -- SGL-3; and
-- Corporate family rating -- B3.
TRUST ADVISORS: U.S. Trustee Amends Creditors Committee Membership
------------------------------------------------------------------
The United States Trustee for Region 2 amended the appointment of
creditors serving on the Official Committee of Unsecured Creditors
in Trust Advisors Stable Value Plus Fund's chapter 11 case:
Two members have been added to the Committee:
1. R.K. Mechanical Inc. Salary Savings Plan
Rick L. Kinning, President
9300 E. Smith Road
Denver, Colorado 68124
Tel: (303) 355-9696
Fax: (303) 336-5858
2. Wipro Limited 401(k) Plan
Navneet Hrishikesan, Senior Counsel
1300 Crittenden Lane, 2nd Fl.
Mountain View, California 94043
Tel: (617) 850-6053
Fax: (617) 663-6999
and join these previously appointed members of the Creditors'
Committee:
1. HSBC Bank USA, N.A.
Kenneth L. Sniatecki, Sr. Vice-President
One HSBC Center, 17th Fl.
Buffalo, New York 14203
Tel: (716) 841-2411
Fax: (716) 847-1801
2. Associated Bank, N.A.
John Thayer, Chief Investment Officer
200 North Adams Street
Green Bay, Wisconsin 54307-2800
Tel: (920) 433-7737
Fax: (920) 433-3140
3. Showa Denko Carbon, Inc.
James S. Kahl, Vice President/Treasurer
P.O. Box 2947201
Ridgeville, SC 29472
Tel: (843) 851-5432
Fax: (843) 875-2640
4. Lochinvar Corporation
Robert Lancaster, Vice President of H/R
300 Maddox Simpson
Lebanon, Tennessee 37090
Tel: (615) 882-2928
Fax: (615) 547-1012
5. Industrial Supply, Inc.
Jon L. Richards, President/Plan Trustee
1635 South 300 West
Salt Lake City, Utah 84092
Tel: (801) 484-8644
Fax: (801) 481-4563
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 Darien, Connecticut, Trust Advisors Stable Value
Plus Fund filed for chapter 11 protection on Sept. 30, 2005
(Bankr. D. Conn. Case No. 05-51353). Scott D. Rosen, Esq., at
Cohn Birnbaum & Shea P.C. represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it estimated assets and debts of more than
$100 million.
UAL: Multi-Mil. Settlement on Aircraft & Tax Indemnity Claims OKd
-----------------------------------------------------------------
Before UAL Corporation and its debtor-affiliates filed for
bankruptcy protection, they entered into leveraged lease financing
arrangements relating to certain aircraft in their fleet. Keybank
NA, Viacom, Inc., SunAmerica Life Insurance Company, Wilmington
Trust Company, and Public Resource Services Corporation were owner
participants under the Financing Transactions.
The owner participants filed separate claims against the Debtors
for amounts owed pursuant to a tax indemnity agreement under a
Financing Transaction related to a certain aircraft:
Owner
Date Participant Claim No. Amount Aircraft
---- ----------- --------- ------- --------
May 12, 2003 Keybank 38492 $17,389,628 N911UA
May 8, 2003 SunAmerica 33122 127,847,360 N172UA
May 9, 2003 Wilmington 35340 44,235,472 N538UA
42053 44,235,472 N539UA
May 12, 2003 PSRC 33122 37,615,221 N654UA
May 12, 2003 Viacom 38936 13,275,030 N358UA
38938 13,275,030 N359UA
38939 15,195,978 N360UA
38940 15,195,978 N361UA
38941 15,472,718 N375UA
38942 15,472,718 N376UA
38943 15,472,718 N377UA
38937 15,472,718 N378UA
The Debtors objected to the Aircraft and Tax Indemnity Claims.
The Debtors asserted that the claims filed by Keybank, Viacom,
SunAmerica, Wilmington, and PRSC, as well as the claims of
numerous other owner participants, are overstated and should be
significantly reduced.
The Debtors modified their objection to additionally argue that
the Claims were contractually barred and duplicative of other
claims asserted by or on behalf of the debtholders in the
Financing Transactions in the Debtors' Chapter 11 cases, and
requested that the claims be disallowed in full.
After extensive arm's-length negotiations, the Debtors reached
both interim and final Settlements with the Claimants.
The Interim Settlements
The Debtors reached interim settlements with Keybank and Viacom,
which reduce, but do not allow, the Keybank and Viacom Claims.
The Keybank Settlement provides that:
(a) the Keybank Claim will be reduced to a $689,055 non-
priority, unsecured claim -- an approximately 96%
reduction from the filed amount;
(b) the TIA Objection is withdrawn as to the Keybank Claim;
(c) the Debtors reserve their rights to bring a "duplication"
objection, and that Keybank reserves its rights to defend
against the objection; and
(d) unless the Debtors prevail in disallowing all or a portion
of the Keybank Claim pursuant to a duplication-type
objection, the Keybank Claim, as reduced, will be allowed
prior to the closure of the Debtors' Chapter 11
Cases.
The Viacom Settlement, similarly reduces -- but does not allow --
the Viacom Claims, withdraws the TIA Objection to the Viacom
Claims, and preserves the parties rights with respect to a
duplication-type objection.
Pursuant to the Viacom Settlement, the Viacom Claims are reduced
as:
Settled % Reduction
Aircraft No. Claim No. Amount From Filed Amount
------------ --------- ------- -----------------
N358UA 38936 $1,552,277 88%
N359UA 38938 1,552,277 88%
N360UA 38939 1,715,911 88%
N361UA 38940 1,715,911 88%
N375UA 38941 1,386,455 91%
N376UA 38942 1,031,579 93%
N377UA 38943 1,386,455 91%
N378UA 38937 1,386,455 91%
As the duplication issue remains unresolved, and the Debtors
specifically reserved their rights to do so, the Debtors intend
to proceed with the Amended TIA Objection with respect to the
Keybank Claims and the Viacom Claims at the hearing on the TIA
Objection.
The Final Settlements
The Debtors reached final settlement agreements with SunAmerica,
Wilmington, and PRSC, which resolve the Debtors' TIA Objection as
to those parties.
The SunAmerica, Wilmington, and PRSC Settlements provide that:
* the SunAmerica Claim will be reduced to $13,281,139, which
reflects an 89% reduction from the filed amount;
* the Wilmington Claims will be reduced to $3,500,000, which
reflects a 92% reduction from the filed amount; and
* the PRSC Claim will be reduced to $8,000,000, which reflects
a 78% reduction from the filed amount.
The SunAmerica, Wilmington, and PRSC Claims will be allowed as
general, unsecured claims. The Debtors' TIA Objection with
respect the Claims will be withdrawn with prejudice.
The U.S. Bankruptcy Court for the Northern District of Illinois
approved the Settlement Agreement.
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. Judge Wedoff confirmed
the Debtors' Second Amended Plan on Jan. 20, 2006. The Company
emerged from bankruptcy protection on February 1, 2006. (United
Airlines Bankruptcy News, Issue No. 113; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
UAL CORP: Allows American Air's Unsecured Claim at $7.5 Million
---------------------------------------------------------------
On May 8, 2003, American Airlines, Inc., filed Claim No. 36785
against UAL Corporation and its debtor-affiliates for $74,500,000.
Claim No. 36785 had three components:
(a) the JFK Terminal 8 and 9 Claim -- a $70,000,000 claim for
estimated costs allegedly incurred by American at John F.
Kennedy International Airport in connection with
environmental contamination at Terminals 8 and 9
purportedly caused by discharges of jet fuel, gasoline,
and diesel fuel;
(b) the LGA Claim -- a claim for $300,000 based on an
assessment by the New York Department of Conservation for
contamination at the fuel farm and bulk and satellite fuel
facilities at LaGuardia International Airport; and
(c) the JFK Fuel Facilities Claim -- a claim for $4,200,000
based on an assessment by the NY Department of
Conservation for contamination at the JFK bulk and
satellite fuel facilities.
The Debtors objected to Claim No. 36785. American responded.
On July 6, 2005, American filed Claim No. 44609, which amended
and superseded Claim No. 36785. American's Claim No. 44609 still
sought recovery from the Debtors for the same JFK Fuel Facilities
Claim and the same LGA Claim, but reduced the amount of the JFK
Terminal 8 and 9 Claim from $70,000,000 to $34,300,000.
On June 30, 2004, the Court entered a trial order establishing a
schedule to resolve Claim No. 36785. The trial order effectively
held in abeyance litigation over Claim No. 36785 until the
Debtors filed their plan of reorganization. On September 7,
2005, the Debtors filed their Plan, thus, triggering the schedule
set forth in the trial order. The Debtors and American have
since engaged in negotiations to resolve the claim pursuant to
the trial order's scheduling of a settlement conference.
After extensive negotiations, the Debtors and American reached a
settlement agreement resolving Claim No. 36785. By this motion,
the Debtors seek the Court's authority to enter into the
Settlement Agreement with American.
Under the Settlement:
(a) American will be allowed a general unsecured claim against
Debtors for $7,500,000 in full and final compromise and
settlement of any and all claims that American may have
related to Claim No. 36785;
(b) The Debtors and American release, discharge and covenant
not to sue each other from any and all claims that relate
to Claim No. 36785; and
(c) American waives and releases all claims related to any
matter addressed in Claim No. 36785 that it might have now
or in the future against any of Debtors' insurance
carriers, except for $500,000 in sale proceeds in the
event that an "Insurance Sale" is consummated and
approved.
James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, explains that the Debtors are currently negotiating a
separate settlement with certain of their insurers through which
the Debtors would sell back to certain insurers their insurance
policies in exchange for settlement amounts corresponding to the
Debtors' environmental insurance coverage claims at various
sites, including the Debtors' alleged liability with respect to
Claim No. 36785.
If the Insurance Sale is consummated and approved, the Debtors
will pay American $500,000 from the sale proceeds. However, if
the Insurance Sale is not consummated and approved by May 1,
2006, American has the option to elect to convert its right to
the $500,000 of insurance proceeds from the Insurance Sale to a
$10,000,000 unsecured claim against the Debtors. In the event
that the Insurance Sale is not consummated and approved prior to
July 31, 2006, American's right to the $500,000 of proceeds from
the Insurance Sale will automatically convert to a $10,000,000
unsecured claim.
Settlement Must be Approved
The Settlement resolves a substantial claim that has required
extensive review by the Debtors and their consultants, Mr. Mazza
relates. The dispute between the Debtors and American regarding
contamination at JFK Terminal 9 has been pending for nearly a
decade and involves highly complex factual and scientific
matters. In the absence of a settlement, Mr. Mazza says, it
would likely take many months or years and significant resources
to resolve the matter.
In accordance with the agreed-upon and Court-approved trial
procedures to resolve Claim No. 36785, the Debtors would be
required to engage in extensive pre-trial and trial activities
over the next eight months, including:
(1) extensive fact and expert discovery, including depositions
of up to 21 fact witnesses and 12 expert witnesses;
(2) preparation of a complex expert case;
(3) pre-trial briefing and motions; and
(4) potentially a five-day hearing.
The pre-trial and trial activities will result in significant and
unnecessary expenses for the Debtors and would distract the
Debtors from other, more pressing matters.
Given the expense and uncertainty associated with further
litigation of Claim No. 36785, the Debtors have determined that
it is unlikely that they could substantially improve the benefit
to the estate by continuing the litigation rather than accepting
the benefits of the proposed Settlement Agreement.
Additionally, Mr. Mazza asserts that the Settlement Agreement is
a product of good business judgment because it is structured to
minimize the impact of American's claim on the Debtors' estates,
while ensuring American the benefit of its bargain.
As structured, the Settlement Agreement allows the Debtors the
opportunity to satisfy a portion of American' s claim with
insurance proceeds. However, if the Debtors are unable to obtain
insurance proceeds to satisfy American's claim by July 31, 2006,
or, if American exercises its option to convert its right to
insurance proceeds to an unsecured claim during the option
period, American will effectively receive the equivalent economic
value in the form of an additional $10,000,000 general, unsecured
claim.
In effect, Mr. Mazza maintains, the Settlement Agreement provides
the Debtors with a reasonable opportunity to obtain insurance
proceeds, but also ensures that Claim No. 36785 will be finally
resolved within a reasonable period.
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. Judge Wedoff confirmed
the Debtors' Second Amended Plan on Jan. 20, 2006. The Company
emerged from bankruptcy protection on February 1, 2006. (United
Airlines Bankruptcy News, Issue No. 112; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
UAL CORP: Allows Verizon's Tax Indemnity Claims at $182.5 Million
-----------------------------------------------------------------
UAL Corporation and its debtor-affiliates sought and obtained the
U.S. Bankruptcy Court for the Northern District of Illinois'
authority to enter into a settlement with Verizon Capital Corp.,
concerning its tax indemnity claims.
Prior to the Debtors' bankruptcy filing, they entered into
leveraged lease financing agreements relating to certain aircraft.
Verizon, an owner participant under the Financing Transactions,
filed certain claims against United Air Lines, Inc., on account
of liabilities under these transactions.
The Debtors argued that Verizon's claims, as well as the claims
of other owner participants, are overstated and should be
significantly reduced. In response, Verizon pointed out its own
calculation of the tax indemnity portion of its claims.
The Debtors further argued that Verizon's claims were
contractually barred and duplicative of other claims asserted by
or on behalf of the debtholders in the Financing Transactions.
After extensive arm's-length negotiations, the Debtors and
Verizon have reached a settlement. The parties agree that the
Verizon's claims are allowed at these amounts:
Tail No. Claim No. Settlement Amount
-------- --------- -----------------
N351UA 37455 $1,147,059
N353UA 37456 2,147,059
N343UA 37457 2,147,059
N646UA 37458 9,147,059
N550UA 37459 9,147,059
N656UA 37460 10,147,059
N178UA 37466 10,147,059
N777UA 38377 15,147,059
N352UA 38379 1,147,059
N766UA 38380 24,147,059
N191UA 43017 26,147,058
N105UA 43018 8,147,058
N661UA 43019 15,147,058
N350UA 44585 5,147,059
N347UA 44586 4,147,059
N189UA 44587 30,147,059
N173UA 44588 9,147,059
------------
Total: $182,500,000
In addition, the Settlement provides that:
(a) Verizon's claims will be deemed amended to assert claims
only for the Settlement Amounts;
(b) the Claims will be allowed as non-priority, general,
unsecured claims against the Debtors' bankruptcy estate;
and
(c) the Debtors will withdraw their objections as to Verizon
with prejudice.
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. Judge Wedoff confirmed
the Debtors' Second Amended Plan on Jan. 20, 2006. The Company
emerged from bankruptcy protection on February 1, 2006. (United
Airlines Bankruptcy News, Issue No. 116; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
UNITED WOOD: Files Plan and Disclosure Statement in Oregon
----------------------------------------------------------
United Wood Products Company submitted to the U.S. Bankruptcy
Court for the District of Oregon a Chapter 11 Plan of
Reorganization and an accompanying Disclosure Statement.
The Debtor relates that the Plan will be funded using settlement
proceeds or judgments recovered in litigation against Kimberly-
Clark Worldwide, Inc. and Tri-State Construction, Inc.
Kimberly-Clark Litigation
The Debtor's litigation against Kimberly-Clark stems from the
wrongful termination of a Services and Supply Agreement. The
Debtor tells the Court that Kimberly-Clark was its sole customer
and the wrongful termination caused it to file for bankruptcy.
Kimberly-Clark had initiated a lawsuit claiming $500,000 in
damages but it asserted a $57 million counterclaim. The case is
pending in the Superior Court of the State of Washington,
Snohomish County, titled Kimberly-Clark Worldwide, Inc. v. United
Wood Products Company (Case No. 05-2-07978-8).
Tri-State Litigation
The conduct of Tri-State Construction, Inc., and the City of
Everett, Washington, was also another reason for its financial
distress, the Debtor explains. The Debtor says it asserted a
$1 million claim against both Tri-State and the City of Everett.
The Debtor discloses that the City of Everett has been dismissed
from the case but the case proceeds against Tri-State. The case
is pending in the U.S. District Court, Western District of
Washington at Seattle, titled United Wood Products Company v.
Tri-Sate Construction, Inc., and City of Everett, Washington
(Case No. C04-20527).
Treatment of Claims
Under the plan, Administrative Claims and Priority Tax Claims will
be paid in full.
The Debtor tells the Court that Sterling Savings Bank's holds a
security interest in the Debtor's litigation claims against
Kimberly-Clark to secure payment of approximately $1,485,000.
Sterling's secured claim will increase by $500,000 if Kimberly-
Clark draws on a letter of credit issued by Sterling. Pursuant to
the plan, Sterling will receive a Secured Non-Recourse Note in a
principal amount equal to the allowed amount of its secured claim.
A full-text copy of the three-page Secured Non-Recourse Note the
Debtor will deliver to Sterling Savings Bank is available for free
at http://ResearchArchives.com/t/s?528
The Debtor says that the collateral securing the claim of
Commercial Equipment Lease Corp. will be returned to Commercial
Equipment.
Holders of Priority Unsecured Claims will receive a Secured Non-
Recourse Note conforming substantially to the principal amount
equal to the amount of the allowed claims.
Holders of General Unsecured Claims will receive a promissory note
secured by:
-- a first-security interest in the Debtor's interest in the
Tri-State lawsuit; and
-- a second-security interest in the Debtor's interest in the
Kimberly-Clark lawsuit.
The face amount of the note will be an amount equal to 100% of the
allowed claims. The Debtor relates that prior to the effective
date, a plan agent will be designated and that agent will
distribute to holders of general unsecured claims a pro rata share
from the proceeds of the two lawsuits less the payment to secured
claims.
Equity Security Interests will remain unaltered by the plan.
Headquartered in Portland, Oregon, United Wood Products Company,
aka United Oil Company, was a waste wood procession facility that
sold waste wood to Kimberly-Clark Worldwide, Inc. for burning in
Kimberly-Clark's electricity generating boiler. The Debtor filed
for chapter 11 protection on Sept. 19, 2005 (Bankr. D. Ore. Case
No. 05-41285). John G. Crawford, Jr., Esq., at Schwabe,
Williamson & Wyatt represents the Debtor in its restructuring
efforts. As of Sept. 30, 2005, the Debtor listed total assets of
$58,622,000 and total debts of $3,181,125.
US AIRWAYS: Inks Amended Aircraft Order with Embraer
----------------------------------------------------
US Airways Group, Inc. (NYSE: LCC) and Embraer aka Empresa
Brasileira de Aeronautica SA (NYSE: ERJ) have reached an agreement
to amend their original aircraft order.
Under this agreement, the previous 57 undelivered EMBRAER 170s
will be converted into 25 firm EMBRAER 190 aircraft and 32
additional firm EMBRAER 190 aircraft that are subject to
reconfirmation by US Airways. The Amendment also includes up to
50 options to other aircraft in the Embraer 170/190 family.
Deliveries will resume in November 2006.
The new aircraft will be configured with 11 first-class and 88
coach seats and will be powered by GE CF34-10E aircraft engines.
The new agreement is subject to bankruptcy court approval.
"We are excited to bring the superior comfort and advanced
efficiency of the EMBRAER 190 into our fleet, and we are
particularly pleased that these airplanes will be flown with US
Airways mainline pilots and flight attendants," US Airways
Chairman and CEO Doug Parker said.
"We are honored with US Airways' renewed confidence in our E-Jets
family and the opportunity to expand our partnership," Frederico
Fleury Curado, Embraer Executive Vice-President, Airline Market
said.
About Embraer
Based in Sao Jos, dos Campos, Brazil, Embraer aka Empresa
Brasileira de Aeronautica SA -- http://www.embraer.com/-- was
founded in 1969 as a government initiative and then privatized on
Dec. 7, 1994. Embraer has become one of the largest aircraft
manufacturers in the world by focusing on specific market segments
with high growth potential in commercial, defense, and executive
aviation. The Company develops and adapts successful aircraft
platforms and judiciously introduces new technology whenever it
creates value by lowering acquisition price, reducing direct
operating costs, or delivering higher reliability, comfort, and
safety.
About US Airways
US Airways is a member of the Star Alliance, which was established
in 1997 as the first truly global airline alliance to offer
customers worldwide reach and a smooth travel experience. Star
Alliance was voted Best Airline Alliance by Skytrax in 2003 and
2005. The members are Air Canada, Air New Zealand, ANA, Asiana
Airlines, Austrian, bmi, LOT Polish Airlines, Lufthansa,
Scandinavian Airlines, Singapore Airlines, Spanair, TAP Portugal,
THAI, United, US Airways and VARIG Brazilian Airlines. South
African Airways and SWISS will be integrated during the first half
of 2006. Regional member carriers Adria Airways (Slovenia), Blue1
(Finland) and Croatia Airlines enhance the global network.
Overall, Star Alliance offers more than 15,000 daily flights to
790 destinations in 138 countries.
US Airways and America West's recent merger creates the fifth
largest domestic airline, employing 35,000 aviation professionals.
US Airways, US Airways Shuttle and US Airways Express operate
approximately 3,700 flights per day and serve more than 230
communities in the U.S., Canada, Europe, the Caribbean and Latin
America.
US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
WACHOVIA BANK: Moody's Affirms Low-B Ratings on Four Trust Classes
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of seven classes
and affirmed the ratings of ten classes of Wachovia Bank
Commercial Mortgage Trust, Commercial Mortgage Pass-Through
Certificates, Series 2002-C1:
* Class A-1, $18,523,408, Fixed, affirmed at Aaa
* Class A-2, $135,498,000, Fixed, affirmed at Aaa
* Class A-3, $135,167,000, Fixed, affirmed at Aaa
* Class A-4, $404,157,000, Fixed, affirmed at Aaa
* Class IO-1, Notional, affirmed at Aaa
* Class IO-2, Notional, affirmed at Aaa
* Class B, $35,627,000, Fixed, upgraded to Aaa from Aa2
* Class C, $42,752,000, Fixed, upgraded to Aa1 from A2
* Class D, $9,500,000, Fixed, upgraded to Aa2 from A3
* Class E, $13,063,000, Fixed, upgraded to A1 from Baa1
* Class F, $16,626,000, Fixed, upgraded to A3 from Baa2
* Class G, $13,063,000, WAC, upgraded to Baa1 from Baa3
* Class H, $15,438,000, Fixed, upgraded to Baa3 from Ba1
* Class J, $17,814,000, Fixed, affirmed at Ba2
* Class K, $4,750,000, Fixed, affirmed at Ba3
* Class M, $7,036,000, Fixed, affirmed at B2
* Class N, $4,690,000, Fixed, affirmed at B3
As of the January 17, 2006 distribution date, the transaction's
aggregate principal balance has decreased by 4.3% to $909.5
million from $950.0 million at securitization. The Certificates
are collateralized by 92 loans, ranging in size from less than
1.0% to 3.0% of the pool, with the top ten loans representing
24.3% of the pool. Eleven loans, representing 8.1% of the pool,
have defeased and are collateralized by U.S. Government
securities.
To date the pool has not experienced any losses. One loan,
representing less than 1.0% of the pool, is in special servicing.
Moody's has estimated no loss on this loan. Twenty-seven loans,
representing 20.0% of the pool, are on the master servicer's
watchlist.
Moody's was provided with year-end 2004 operating results for
94.5% of the performing loans, excluding the defeased loans, and
partial year 2005 operating results for 83.7% of the performing
loans. Moody's weighted average loan to value ratio is 83.7%,
compared to 89.6% at securitization. Moody's is upgrading Classes
B, C, D, E, F, G and H due to stable overall pool performance, a
relatively high percentage of defeased loans and increased credit
support.
The top three loans represent 8.3% of the pool. The largest loan
is the One Enterprise Center Loan, which is secured by the
leasehold interest in a 319,000 square foot Class A office
building located in Jacksonville, Florida. The property is 94.0%
leased, compared to 89.4% at securitization. The building serves
as the regional headquarters for Wachovia Bank, which occupies
45.0% of the building under a lease expiring in April 2013. The
ground lease expires in 2082. The lease is fully subordinate to
the loan and ground rent payments do not escalate for the
remainder of the term. Moody's LTV is 80.1%, compared to 87.5% at
securitization.
The second largest loan is the Oak Brook Apartments Loan, which is
secured by a 304-unit Class A multifamily property located 10
miles east of Sacramento in Rancho Cordova, California. The
property is 97.0% occupied, compared to 93.6% at securitization.
Despite the improvement in occupancy, performance has declined due
to lower rents. Moody's LTV is in excess of 100.0%, compared to
94.1% at securitization.
The third largest loan is the City Place II Loan, which is secured
by a leasehold interest in a 292,000 square foot Class A office
complex located in downtown Hartford, Connecticut. The property
is 69.0% leased, compared to 86.0% at securitization. The decline
in occupancy is due to Conning & Conning vacating upon its lease
expiration in March 2005. The largest tenant currently is Webster
Bank. The ground lease expires in 2033 with two extension terms
for an additional 100 years. All ground rent has been prepaid
through the initial maturity date. The property is also
encumbered by a $3.7 million B Note, which is held outside the
trust. Moody's LTV is 95.6%, compared to 79.8% at securitization.
The pool's collateral is a mix of retail, multifamily, office and
mixed use, industrial and self-storage, U.S. Government securities
and lodging. The collateral properties are located in 32 states
and Washington, D.C. The highest state concentrations are
California, Florida, Arizona, Texas and Colorado. All of the
loans are fixed rate.
WINN-DIXIE: Wants to Pay $1.15 Million to Keep Peter Lynch as CEO
-----------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates have long
recognized that their prospects for a successful reorganization
and emergence from Chapter 11 depend on the continued leadership
of Peter L. Lynch, their president and chief executive officer.
D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in
New York, informs Judge Funk that although Mr. Lynch's employment
agreement runs through Dec. 9, 2007, he may, at any time,
voluntarily terminate his employment with them on 30 days' notice
without incurring any liability.
To assure Mr. Lynch's continued service through the end of 2005,
the Debtors executed a Retention Bonus Letter Agreement, which
provided him a $1,500,000 retention bonus.
Events of the past year, Mr. Baker notes, have validated the
Debtors' decision in executing the 2005 Letter Agreement. Mr.
Lynch has led the Debtors' reorganization efforts and is, more
than any other person, responsible for the remarkable progress
that the Debtors have made toward achieving a successful
turnaround of their businesses and emergence from Chapter 11, Mr.
Baker says.
According to Mr. Baker, Mr. Lynch's leadership has been pivotal
to:
(a) the development and implementation of the Debtors'
footprint reduction program, which will provide them with
an optimal foundation for the growth of their businesses;
(b) the sale or closure of more than 300 stores as part of the
Footprint Program, including the sale of 81 stores
yielding gross proceeds exceeding $40 million and the
liquidation of 245 stores producing net proceeds of
$136,000,000;
(c) the implementation of various operational initiatives,
including:
* a sustainable strategic sourcing program;
* a significant reduction of corporate overhead costs;
* the reorganization of the Debtors' "field team" by
reducing the number of district managers from 96 to 30;
* the establishment of several merchandising and marketing
programs designed to improve product offerings;
* the rolling out of customer service initiatives; and
* the realignment of the overhead structure to reflect the
new footprint;
(d) the development of a reclamation and trade vendor lien
program; and
(e) the development of a business plan that provides the road
map by which the Debtors intend to operate their
businesses during the next several years and that will
eventually serve as the platform for the development and
negotiation of a plan of reorganization.
Moreover, continues Mr. Baker, Mr. Lynch has significantly
enhanced the Debtors' reorganization prospects through his
demonstrated leadership in communicating with:
-- the Debtors' employees, thereby building the trust and
confidence in the employee base throughout the course of
the restructuring;
-- external constituencies, thereby providing customers,
vendors, community leaders, the media, and the public at
large with important information about the Debtors'
business initiatives and restructuring progress; and
-- the Debtors' Board of Directors, the Official Committee of
Unsecured Creditors, and other key constituencies, thereby
advancing the dialogue among these parties and, by
extension, the Debtors' reorganization efforts.
Accordingly, the Debtors seek authority from the U.S. Bankruptcy
Court for the Middle District of Florida to pay a retention
incentive to Mr. Lynch in consideration for his remaining in their
employ through 2006.
The Debtors originally sought to pay Mr. Lynch a $2,000,000
retention incentive to assure his services through Dec. 31, 2006.
However, to resolve concerns raised by the Creditors Committee,
the Debtors have agreed to reduce Mr. Lynch's retention incentive
to $1,150,000 in exchange for his remaining in the Debtors' employ
through Aug. 31, 2006.
The CEO Retention Incentive, which will be paid as soon as
practicable, will be subject to forfeiture under either of these
circumstances:
(a) the Debtors terminate Mr. Lynch for cause on or before
Aug. 31, 2006; or
(b) Mr. Lynch terminates his employment with the Debtors
without good reason and other than for disability on or
before Aug. 31, 2006.
"It is clear that Lynch's continued leadership as the Debtors'
President and Chief Executive Officer is vital if the Debtors are
to emerge successfully from Chapter 11 and that the Debtors'
prospects for a successful reorganization would be harmed
immeasurably were the Debtors to lose Lynch's services," Mr.
Baker says. "It is also clear that the cost to the Debtors of
the CEO Retention Incentive is far less than the harm that would
result were Lynch to cease his employment with the Debtors."
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Equity Security Committee Wants to Be Reinstated
------------------------------------------------------------
The United States Trustee's notice to disband the Official
Committee of Equity Security of Winn-Dixie Stores, Inc., and its
debtor-affiliates constitutes an abuse of discretion, Karol K.
Denniston, Esq., at Paul, Hastings, Janofsky & Walker, LLP, in
Atlanta, Georgia, argues.
The Official Committee of Unsecured Creditors filed a motion under
seal seeking to disband the Equity Committee. The U.S. Trustee
sought abatement of the Disbandment Motion to conduct an
additional review.
Having reached conclusion that have caused the U.S. Trustee to
reverse its initial appointment decision -- and which is
inconsistent with its prior objection to the Disbandment Motion
-- the U.S. Trustee cannot be permitted to side step the
Disbandment Motion and unilaterally disband the Equity Committee,
Mr. Denniston contends.
Because of the Disbandment Motion, the U.S. Bankruptcy Court for
the Middle District of Florida continues to have jurisdiction over
the disbandment and the U.S. Trustee must comply with the rules of
bankruptcy procedures and provide all interested parties with
notice and an opportunity to be heard at a hearing before the
Court, Mr. Denniston says.
An Equity Committee is Necessary
The Equity Committee wants to continue to represent equity
holders in connection with its request to appoint an examiner and
in plan negotiations as the Debtors and Official Committee of
Unsecured Creditors move forward with the confirmation process.
Mr. Denniston points out that it was not until the Equity
Committee requested an independent investigation and raised
concerns over the actions of the Debtors' prepetition directors,
officers, senior management and third party professionals that
the Debtors began to reconsider their support for the Equity
Committee. The Debtors' change in position highlights the need
for an equity committee to protect the interest holders and the
bankruptcy estates.
Without the Equity Committee's involvement, it is likely that the
scope of the investigation will be reduced rendering it much less
meaningful, Mr. Denniston says. Moreover, without an Equity
Committee, there is no hope of any return to equity holders.
According to Mr. Denniston, the Equity Committee should continue
to exist because:
a. The Debtors have not investigated potential claims against
their prepetition directors, officers, senior management
and professionals. The claims are assets of the bankruptcy
estates and must be independently investigated. Absent the
report of an independent examiner, the materiality and
value of the potential claims is unknown and unquantified
and cannot be valued or addressed in connection with any
plan of reorganization. Without an investigation, any
determination of value of the Debtors' estate is premature.
b. Since the formation of the Equity Committee, the Creditors
Committee has focused on eliminating its existence so that
there is no independent party to challenge valuation and
proposed plan terms. Absent the continued existence of the
Equity Committee, it is a foregone conclusion that the plan
or reorganization will not provide any recovery to equity
holders. By their own admissions, the Debtors are not
hopelessly insolvent.
c. The Equity Committee's request for the appointment of an
examiner, despite the lack of objection thereto, has been
delayed and its scope thwarted by the Notice of Disbandment
and there is no party to represent the equity holders'
interest in connection with the appointment and
investigation.
d. The Debtors are not able to independently and adequately
represent the equity holders because members of Winn-
Dixie's board of directors owe fiduciary duties to parties
other than the Debtors and the shareholders. The Debtors
have acknowledged Winn-Dixie's board of directors is not
independent. Yet, this is the board of directors that will
have a major role in approving any plan of reorganization.
e. Absent an official equity committee, the Plan will no doubt
fail to provide recovery to equity holders. Each day an
official equity committee is not in place jeopardizes the
equity holders' rights and abilities to pursue a plan
distribution and other appropriate remedies.
f. These cases are large and complex involving 24 Debtors with
a complex financial structure including an $800 million DIP
secured financing and over 10,000 creditors and 36,000
beneficial equity holders at the parent level.
g. Winn-Dixie has 36,000 beneficial holders of publicly traded
common stock, the bulk of which are small institutions and
individual investors, including many retirees. Absent the
existence of an official equity committee, these
individuals will not be represented.
h. The need for adequate representation in these cases
outweighs the concern about the cost of an additional
committee because absent the continued appointment of an
official equity committee, claims against the Debtors'
estate may not be thoroughly investigated and subsequently
prosecuted because of conflicts of interest and no other
party is willing or able to represent the interests of the
equity holders.
Accordingly, the Equity Committee asks the Court to:
(1) immediately set aside the Notice of Disbandment and
reinstate the Equity Committee;
(2) require the U.S. Trustee, to the extent it believes that
disbandment is appropriate, to file appropriate pleadings
with the Court seeking to disband the Equity Committee so
that all interested parties will receive notice,
opportunity to conduct discovery and be heard at a
hearing; and
(3) appoint the Equity Committee, nunc pro tunc to Jan. 11,
2006, under Section 1102(a)(2) of the Bankruptcy Code.
The Equity Committee also wants the pleadings and proceedings in
the Disbandment Motion unsealed.
Objections
The Debtors, Creditors Committee, Wachovia Bank, NA, and the U.S.
Trustee separately filed objections to the Equity Committee's
request to set aside the Notice of Disbandment.
The Objections have been filed under seal.
In a January 30 press release, the Debtors said the U.S.
Trustee's disbandment is appropriate in light of current
information, which includes recent financial statements and
recently completed confidential business plan that contains
forecasts regarding the profitability of the reorganized company.
While the Debtors believe the business plan shows that they will
be able to reorganize successfully, it also makes it relatively
clear that there is no substantial likelihood of a meaningful
recovery for existing shareholders under a plan of reorganization,
the Debtors disclosed in the press release.
According to the Debtors, the value of their common stock, if
any, will ultimately be determined on the confirmation of a plan
of reorganization. The company's objective is to negotiate a
plan of reorganization that maximizes recoveries for all
constituencies, including existing shareholders.
"Winn-Dixie is making good progress in its reorganization, and we
are seeing tangible improvements in our performance including an
increase in identical store sales of more than 7% for the second
quarter of fiscal 2006, excluding 11 stores in New Orleans that
have been closed since Hurricane Katrina. However, as we have
worked to prepare a plan of reorganization, it has become clear
that existing holders of Winn-Dixie common stock will probably
receive little or no value for their stock when the Company
emerges from Chapter 11," Jay Skelton, chairman of the Board of
Directors of Winn-Dixie, said.
"While this is not an unusual outcome in most Chapter 11 cases,
we deeply regret this news. Fortunately, we do not believe the
outlook for the Company's existing stock is indicative of the
outlook for our business and future financial performance. We
are pleased with our progress and excited about our prospects for
continued improvement."
Equity Committee Talks Back
The Equity Committee reiterates its arguments that an official
equity committee is still needed to ensure the meaningful
representation of the Debtors' 36,000 shareholders. Other than
equity security holders who collectively constitute the Davis
Family and the entrenched board of directors, the equity security
holders are entirely unrepresented.
Karol K. Denniston, Esq., at Paul, Hastings, Janofsky & Walker,
LLP, in Atlanta, Georgia, tells Judge Funk there is no evidence
before the Court that establishes that the Debtors are hopelessly
insolvent. In light of the Debtors' asserted progress toward
plan negotiation and confirmation and their most recent request
seeking approval of a $2,000,000 incentive payment for their CEO,
the Debtors by their own actions have unequivocally stated they
are far from being insolvent. The Debtors also have repeatedly
advised the Court, and the press, that they intend to exit by
June 2006.
At a December 15, 2005 hearing, Holly Etlin, one of the Debtors'
financial advisors, testified that "for the first time in several
years the company is positive." Ms. Etlin said the sales are
positive and that company has substantially completed its process
to reduce its corporate overhead by approximately 37% or
$100 million annually.
Ms. Etlin also disclosed that only 60 days into the claim
reconciliation process the Debtors have been able to reduce the
initial claims register that was $21 billion in claims to
approximately $1.1 to $1.2 billion in claims.
The Creditors Committee has argued that the counsel for the
Equity Committee had billed the estate in excess of $1.1 million
in fees and expenses. They are wrong, Mr. Denniston tells the
Court. Mr. Denniston points out that through Dec. 31, 2005,
counsel for the Equity Committee has submitted $840,626 in fees
and expenses. Moreover, a significant portion of those fees and
expenses relate directly to disputing the Creditors Committee's
Disbandment Motion. Additionally, to date, despite being a duly
appointed Equity Committee, the Debtors have failed to pay a
single dime to the Equity Committee's professionals.
Mr. Denniston notes that the sale of Albertsons demonstrates that
there is enterprise value to the Debtors' equity and that all or
some of that value may belong to the current equity holders. The
fact that the common stock trades around $0.70 a share indicates
Wall Street does not attribute zero value to the equity but
instead understands that there is still enterprise value left in
the common stock, Mr. Denniston adds. A standard way that
enterprise value is captured in a plan of reorganization is
through the issuance of warrants, he says.
"There are many ways in which the equity can receive a
distribution from an initial distribution of equity in the
reorganized debtors or assigning that value to the creditors and
reserving to equity the enterprise value of the debtors," Mr.
Denniston tells Judge Funk.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Konica Wants 2003 Photofinishing Agreement Decided
--------------------------------------------------------------
Konica Minolta Photo Imaging U.S.A., Inc., and Winn-Dixie Stores,
Inc., are parties to a Photofinishing System Supply and Support
Agreement, dated Feb. 25, 2003, pursuant to which Winn-Dixie
leases from Konica on-site photofinishing equipment. Konica, in
turn, provides training, technical and service support, parts and
accessories for the equipment leased, and color photographic
paper and processing chemicals.
The 2003 Agreement was executed to amend the parties' July 1994
Master Lease Agreement. Under the 2003 Agreement, payment
defaults existing under the 1994 Agreement totaling $3,600,000
were to be forgiven, provided Winn-Dixie performed in accordance
with the terms of the 2003 Agreement. If Winn-Dixie defaulted,
it would be required to repay a pro-rated portion of the 1994
Payment Defaults.
Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser,
P.A., in Tampa, Florida, relates that as of the Petition Date,
Winn-Dixie owed Konica $1,200,000 in connection with open
invoices for paper and consumables. As a result of the defaults,
Konica estimates that the pro-rated portion of the 1994 Payment
Defaults owing to Konica is $2,300,000. This amount is in
addition to the $1,200,000 payment default.
During discussions between the parties, Winn-Dixie requested that
Konica consider modifying the terms of the parties' relationship
relative to Winn-Dixie's photo processing business. In essence,
Winn-Dixie acknowledged that the terms of the 2003 Agreement no
longer made business or financial sense for the Debtors, Mr.
Riedel notes.
As a result, the parties executed a Non-Binding Letter of Intent
on Sept. 1, 2005, pursuant to which Konica agreed to modify
the pricing terms of the 2003 Agreement. The LOI represented a
significant reduction in paper and product costs for the Debtors.
The parties also agreed they would, for a period of 120 days from
the date of the LOI's execution, attempt to formalize a new
agreement. The 120 days expired as of December 31, 2005.
Despite the parties' best efforts, they were unable to reach a
mutually agreeable replacement contract.
As of Jan. 1, 2006, the pricing terms reverted to the terms
set forth in the 2003 Agreement. Since that time, the Debtors
purchase volumes per store have continued to erode from
prepetition levels. Quarterly lease and service billings of
$1,018,093 were invoiced on Jan. 3, 2006, which remain unpaid.
Inquiries to the Debtors as to the status of paying these
invoices remain unanswered.
Mr. Riedel asserts that it is appropriate to compel the Debtors
to decide on the 2003 Agreement in light of:
-- Winn-Dixie's admissions of its inability to perform under
the 2003 Agreement;
-- the millions of dollars due and owing under 2003 Agreement;
and
-- the continuing defaults of Winn-Dixie both under the terms
of the 2003 Agreement and the LOI.
In this regard, Konica asks the U.S. Bankruptcy Court for the
Middle District of Florida to require the Debtors to assume or
reject the 2003 Agreement without further delay.
"It has been eleven months since the Petition Date and four
months since the parties' execution of the LOI, which should have
been sufficient time for the Debtors to appraise their financial
situation and the value of the Konica relationship," Mr. Riedel
says.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000).
* Greenberg Traurig Hires World-Class Litigator Allan Van Fleet
---------------------------------------------------------------
The international law firm Greenberg Traurig, LLP reported that
prominent litigator and antitrust attorney Allan Van Fleet has
joined the firm in the Antitrust Litigation Practice Group. Mr.
Van Fleet's practice also includes complex commercial and
technical litigation; international litigation and arbitration;
and legal ethics.
Prior to joining Greenberg Traurig's Houston office, Mr. Van Fleet
practiced at Vinson & Elkins for 28 years, where he was co-chair
of the firm's Antitrust Practice Group. Mr. Van Fleet is
recognized nationally and internationally in The Best Lawyers in
America and Euromoney's Guide to the World's Leading Competition
and Antitrust Lawyers, among other publications. Texas Monthly
magazine dubs Van Fleet a "Texas Super Lawyer," one of the Top 100
in the state.
"Allan brings a world-class skill set and reputation, as well as
strong litigation capabilities, to our national antitrust
practice," Richard A. Rosenbaum, a National Operating Shareholder,
said.
Mr. Van Fleet's recent representations include:
* a significant victory in freeing a Baytown steel company
from anticompetitive restrictions in contracts with one of
its competitors;
* obtaining a dismissal of a global electronics giant in
a Beaumont computer defect class action in which a
co-defendant settled for over $2 billion;
* winning an international arbitration award requiring a
Mexican railroad company to carry out its agreement to be
acquired by a U.S. railroad; and
* convincing the U.S. Department of Justice not to challenge
a regional airline's acquisition of gates and other assets
at Chicago's Midway Airport from a bankrupt airline.
Mr. Van Fleet is active in the bar, currently serving on the Board
of Directors of the State Bar of Texas. He has been a member of
the ABA House of Delegates and is an officer of the ABA Section of
Antitrust Law, responsible for oversight of the Antitrust
Section's 26 substantive committees. He is the former chair of
the Houston Bar Association's Antitrust Section. Mr. Van Fleet is
also widely published and active in pro bono work including
representing University of Texas Law School in the Hopwood case
challenging affirmative action in law school admissions. He is
the past chair of Texas Appleseed and helped write and lobby for
the Fair Defense Act, which reformed the way counsel are appointed
for indigent criminal defendants in Texas. He previously served
the City of Houston during the Lanier and Brown administrations as
Chair of the Ethics Committee, which investigates alleged
violations of the City's Ethics Code.
About Greenberg Traurig, LLP
Greenberg Traurig, LLP is an international, full-service law firm
with 1,500 attorneys and governmental affairs professionals in The
Americas, Europe and Asia. The firm is eighth on The National Law
Journal's NLJ 250 listing of the largest law firms in the U.S. and
ninth among The American Lawyer's Am Law 100, based on number of
lawyers.
Greenberg Traurig -- http://www.gtlaw.com/-- serves clients from
offices in: Albany, New York; Amsterdam, The Netherlands; Atlanta,
Georgia; Boca Raton, Florida; Boston, Massachusetts; Chicago,
Illinois; Dallas, Texas; Denver, Colorado; Fort Lauderdale,
Florida; Houston, Texas; Las Vegas, Nevada; Los Angeles,
California; Miami, Florida; Morristown, New Jersey; New York, New
York; Orange County, California; Orlando, Florida; Philadelphia,
Pennsylvania; Phoenix, Arizona; Sacramento, California; Silicon
Valley, California; Tallahassee, Florida; Tokyo, Japan; Tysons
Corner, Virginia; Washington, D.C.; West Palm Beach, Florida;
Wilmington, Delaware; and Zurich, Switzerland. Additionally, the
firm has strategic alliances with these independent law firms:
Olswang, London and Brussels; Studio Santa Maria, Milan and Rome;
and Hayabusa Kokusai Law Offices in Tokyo.
Greenberg Traurig's Houston office is located at:
1000 Louisiana, Suite 1800,
Houston, TX 77002
* BOOK REVIEW: Entrepreneurship: Back to Basics
-----------------------------------------------
Author: Gordon B. Baty and Michael S. Blake
Publisher: Beard Books
Softcover: 308 pages
List Price: $34.95
Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587981408/internetbankrupt
Entrepreneurs have to wear many hats -- CEO, CFO, marketing
manager, copywriter, bookkeeper, secretary, and at times delivery
boy or girl. Baty and Blake cover all of these. In one section,
they divide the many different positions and tasks the
entrepreneur has to fulfill, especially in the early stages of a
business, into the general categories of entrepreneurs and
custodians. "Entrepreneurial tasks involve the setting up,
planning, and motivational activities of the firm." This uniquely
entrepreneurial activity includes such business matters as
initiating market research, setting budgets, and finding the right
banker. Custodial tasks, on the other hand, include tracking
budget expenditures, buying materials and supplies, supervising
production or services, and the like.
"As a rule, entrepreneurial tasks are much less delegable than are
custodial tasks." The authors make this fundamental distinction
so that the entrepreneur will understand the different work
necessary during the start-up or early phases of a business, and
not become so absorbed by custodial tasks that the business
suffers from losing the spark most important to it. This
distinction is important for the entrepreneur to keep in mind in
order to understand what kinds of work to delegate if the business
is to remain on a sound footing and to grow properly. If the
reader derives nothing else from this book than this important
fundamental distinction between entrepreneurial and custodial
tasks, Baty and Blake's book will have proved valuable. The
distinction is useful in organizing the entrepreneur's frame of
mind, planning, leadership and management.
But the authors offer much more than this. Both authors are
steeped in entrepreneurial enterprises. Baty has been involved in
founding, running, and financing entrepreneurial businesses,
including three high-tech firm, and has taught entrepreneurship at
MIT and Northeastern University. Blake has worked with budding
entrepreneurs in Russia, and has other international experience in
the field. Their treatment of every conceivable topic of interest
to the entrepreneur is imbued with the right amount of overview,
concrete information, tips, and intangible considerations such as
having the right attitude even for routine but necessary tasks, or
establishing quality personal relationships with key players such
as employees, bankers, and lawyers.
The authors' understanding of the personality of the entrepreneur
comes through in their treatment of each topic. While recognizing
that entrepreneurs may vary from doctors, lawyers, and others who
may work alone to inventors and engineers who may build large
companies from their ideas, Baty and Blake understand that what
ties them all together is the desire for independence, control of
their own destiny, and a good income. The authors understand,
too, the enthusiasm for the entrepreneur for his work, and the
commitment and hopes entailed in entrepreneurship. This
understanding informs the subjects of the book. But the authors
also understand the limitations of the nature of the entrepreneur,
and they deal with these at appropriate points. The very
qualities contributing to an entrepreneur's creation of a
successful business usually work against him when it comes to day-
to-day management and the routine of sustaining an established
business. Thus, the authors also cover how entrepreneurs can
optimally leave their business if and when it becomes necessary.
Mr. Baty is a partner and founder of Zero Stage Capital and
chairman of Navigator Technology Ventures. Mr. Blake is a senior
consultant for Jaako Poyry Management Consulting.
*********
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. Marie Therese V. Profetana, Shimero Jainga, Yvonne L.
Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry
A. Soriano-Baaclo, Terence Patrick F. Casquejo, Christian Q.
Salta, Jason A. Nieva, Lucilo Junior M. Pinili, Tara Marie A.
Martin and Peter A. Chapman, Editors.
Copyright 2006. 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 $725 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 ***