/raid1/www/Hosts/bankrupt/TCR_Public/060301.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, March 1, 2006, Vol. 10, No. 51
Headlines
AAURA INC: Case Summary & 20 Largest Unsecured Creditors
ACURA PHARMACEUTICALS: Fragile Finances May Lead to Bankruptcy
AMERICAN MOULDING: Wants to Sell 63.67 Acres in Stockton, Calif.
ANCHOR GLASS: Wants to Assume Rogers Group Amended Agreement
ANCHOR GLASS: Has Until March 15 to Decide on Temple Contract
ANNA NICOLE SMITH: High Court Entertains Probate Law Arguments
ARI NETWORK: January 31 Balance Sheet Upside-Down by $2.5 Mil.
ARMOR HOLDINGS: Moody's Puts B1 Rated Sr. Subor. Notes on Review
ASARCO LLC: Mitsui Objects to Gerald Metals Debts Set-Off
ASARCO LLC: Court Okays SRK Consulting to Make Production Analysis
ASSET SECURITIZATION: S&P Lifts One Cert. Class' Rating to CCC+
ATA AIRLINES: Emerges from Chapter 11 Protection as Private Entity
ATA AIRLINES: Balks at 19 EETC Owner-Participants' Claims
BIERSTUBE INC: Case Summary & 19 Largest Unsecured Creditors
BIO-RAD LABORATORIES: Earns $13.5 Million in Fourth Quarter 2005
BROKERS INC: Sells North Carolina Property to Coffer for $2.1 Mil.
CABLEVISION SYSTEMS: Loan Completion Prompts S&P to Lift Ratings
CALPINE CORP: Wants Okay of De Minimis Asset Disposition Protocol
CARDTRONICS INC: Equity Deficit Swells 24x to $50 Mil. at Dec. 31
CERVANTES ORCHARDS: U.S. Trustee Wants Case Dismissed or Converted
CHARLES RIVER: Moody's Assigns Ba1 Ratings to Credit Facilities
COMSYS IT: Posts $800,000 Net Loss for Quarter Ended January 1
CORNELL TRADING: Intends to Shutdown Eight Stores Next Week
CREDIT SUISSE: S&P Lowers Two Certificate Class Ratings to D
CRESCENT REAL: Earns $14.5 Million in Fourth Quarter
EXTENDICARE HEALTH: Earns $57.8 Million of Net Income in 2005
GMAC COMMERCIAL: Moody's Holds Low-B Ratings on Three Class Certs.
GS MORTGAGE: Fitch Affirms Three Cert. Classes' Low-B Ratings
GSI GROUP: Earns $4.4 Million of Net Income in Fourth Quarter
HALL DICKLER: Case Summary & 20 Largest Unsecured Creditors
HARBORVIEW MORTGAGE: Moody's Rates Class B-10 Certificates at Ba3
HARRY & DAVID: Moody's Affirms B3 Rating on $175 Mil. Sr. Notes
HIGH VOLTAGE: Yaskawa Wants Court's Help on Discovery Requests
HIGHWOODS REALTY: Looming Debt Due Cues Moody's to Review Ratings
INDYMAC HOME: Moody's Rates Class M-10 Certificates at Ba1
LEGACY ESTATE: Wants Until October 20 to File Chapter 11 Plan
LENNOX INT'L: Reports Fourth Quarter and FY 2005 Financial Results
LONG BEACH: Moody's Assigns Ba2 Rating to Class M-11 Certificates
LONGVIEW FIBRE: Launches Tender Offer for 10% Senior Notes
LUMENIS LTD: December 31 Balance Sheet Upside-Down by $40.4 Mil.
MAGELLAN HEALTH: Delays Release of Fourth Quarter 2005 Financials
MARSH SUPERMARKETS: Closes Nine Stores to Improve Cash Flow
MASTR ALTERNATIVE: Moody's Assigns B2 Rating to Class N-3 Notes
MEG ENERGY: S&P Rates Proposed $750 Million Facilities at BB
METALFORMING TECH: Judge Walrath Approves Disclosure Statement
MUMA SERVICES: Trustee Wants to Retain Lau Lane as Special Counsel
MUSICLAND HOLDING: Wants to Sell 340 Sam Goody & Suncoast Leases
MUSICLAND HOLDING: Can Access $75 Million DIP Loan on Final Basis
NAVISTAR INT'L: Noteholder Group Wants to Negotiate Tender Offer
NOBLE DREW: Committee Gets Okay to Hire Mahoney Cohen as Advisor
NOBLE DREW: Court Sustains Panel's Protest on M.R. Beal Retention
NORTHAMPTON GENERATING: Bad Debt Coverage Cues S&P to Cut Ratings
NORTHWEST AIRLINES: 92% of Pilots Vote to Authorize Strike
OFFICEMAX(R) INC: Incurs $43.1 Mil. Net Loss in Fourth Quarter
OMEGA HEALTHCARE: Exchanging $175M Sr. Notes with Registered Bonds
ON TOP COMMS: Wants Until March 20 to Decide on La. Studio Lease
ON TOP COMMS: Hires McShane Group as Financial Consultants
OUTBOARD MARINE: Trustee Prepares to Make $25 Million Distribution
PERFORMANCE TRANSPORTATION: Court Modifies Terms of BMC Retention
PERFORMANCE TRANSPORTATION: Gives Adequate Protection to Utilities
PERFORMANCE TRANSPORTATION: Can Continue Employing OCPs
PRIMEDIA INC: Posts $13.7 Million Net Loss in Fourth Quarter
PXRE GROUP: Considers Reducing Share Premium Account to Zero
RAMP SERIES: S&P Junks Ratings on Two Certificate Classes
RAVEN MOON: Registers 400MM Common Shares Under Compensation Plan
REGIONAL DIAGNOSTICS: Court Approves Disclosure Statement
RELIANT ENERGY: Reports Fourth Quarter Financial Results
RURAL CELLULAR: Equity Deficit Tops $651.98 Million at December 31
SACO I TRUST: Moody's Assigns Ba1 Rating to Class II-B-4 Certs.
SANITARY & IMPROVEMENT: Has Until May 1 to File Chapter 9 Plan
SANITARY & IMPROVEMENT: Files Amended List of Unsecured Creditors
SHUMATE INDUSTRIES: Raises $2.25MM from Private Equity Placement
SOUTHWEST RECREATIONAL: Trustee Taps Peisner as Tax Accountants
STARWOOD COMMERCIAL: S&P Lifts Rating on Class D-1 Certificates
STONERIDGE INC: Reduced Sales Prompt Moody's to Downgrade Ratings
STRATUS TECHNOLOGIES: Moody's Junks $125 Million Term Loan Rating
TELOGY INC: Wants to Retain Ernst & Young as Independent Auditors
TIMELINE INC: Earns $566,370 in Quarter Ended December 31
TRW AUTOMOTIVE: Earns $59 Million of Net Income in Fourth Quarter
US LEC: Balance Sheet Upside-Down by $260 Million at Dec. 31
US LEC: Offering to Exchange Stock Options with New Ones
VERTICAL COMPUTER: Refinances $2,353,458 of Current Debt
WABTEC CORPORATION: Earns $16 Mil. in Fourth Quarter Ended Dec. 31
WELLS FARGO: Fitch Puts Low-B Ratings on Two Certificate Classes
WESTLAKE CHEMICAL: Earns $226.8 Million for Fiscal Year 2005
WHERIFY WIRELESS: Posts $3.3MM Net Loss in Quarter Ended Dec. 31
WINN-DIXIE: Wants to Sell Jackson Fuel Center to Eckstein
WINN-DIXIE: Wants to Sell Miramar Outparcel to Highest Bidder
WORLDCOM INC: Jackson's Claim Disallowed on Summary Judgment
* Upcoming Meetings, Conferences and Seminars
*********
AAURA INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Aaura, Inc.
67 East Madison Street, #1900
Chicago, Illinois 60603
Bankruptcy Case No.: 06-01853
Type of Business: The Debtor manufactures and markets jewelry.
See http://www.aaura.com
Chapter 11 Petition Date: February 28, 2006
Court: Northern District of Illinois (Chicago)
Judge: Eugene R. Wedoff
Debtor's Counsel: Scott R. Clar, Esq.
Crane Heyman Simon Welch & Clar
135 South Lasalle Suite 3705
Chicago, Illinois 60603
Tel: (312) 641-6777
Fax: (312) 641-7114
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Vieri SpA $270,519
Via Monte Asolon, 67
36022 Cassola (VI) Italy
Societa Italian Lavorazione $208,872
Oro SpA
Via Vecchia Aretina 2/R
52029 Castiglion Fibocchi
(AR) Italy
Auritalia SpA $140,016
Via Galvani, 78
36066 Sandrigo (VI) Italy
Scanavin Srl $105,098
Bob Export Srl $86,674
Jessica SpA $61,011
New Gold Srl $60,031
Carmen International, Inc. $56,354
Tecnigold SpA $51,195
Oreficeria Rezzadore Srl $47,337
Orofranco Srl $44,093
Del Pia Srl $40,476
Pre Met SpA $40,272
Superoro SpA $37,333
Prestige Srl $35,147
Giordini Srl $27,797
OMS SpA $20,581
Aurum Srl $5,910
Kultho Srl $3,874
Consorzio Orafi Vicentini SpA $3,874
ACURA PHARMACEUTICALS: Fragile Finances May Lead to Bankruptcy
--------------------------------------------------------------
Acura Pharmaceuticals, Inc., incurred a net loss of $7.1 million
for the quarter ending Dec. 31, 2005, compared to a net loss of
$2.1 million for the same period in 2004.
For calendar year 2005, the Company had a net loss of $12.1
million compared to a net loss of $70.0 million in 2004.
The Company's 2004 net loss includes a charge of $72.5 million for
amortization of debt discount and private debt offering costs, and
a gain of $14.6 million from debt restructuring and divestment of
non-strategic assets.
Balance Sheet Insolvency
Acura's balance sheet dated Dec. 31, 2005, shows $1,792,000 in
assets. Acura's liabilities exceed that asset base by $6,162,000.
Commercial Strategy Update
To generate revenue, the Company plans to enter into development
and commercialization agreements with strategically focused
pharmaceutical company partners providing that those Partners
license its OxyADF(TM) tablets and other product candidates
utilizing the Aversion(R) Technology and further develop, register
and commercialize multiple formulations and strengths of the
product candidates.
The Company expects to receive milestone payments and a share of
profits and royalty payments derived from the Partners' sale of
products incorporating the Aversion(r) Technology. Future
revenue, if any, would be derived from licensing fees, milestone
payments and a share of profits and royalty payments relating to
our Partners' sale of products incorporating the Aversion(r)
Technology.
To date, the Company does not have any executed collaborative
agreements with Partners nor can there be any assurance that the
Company will successfully enter into such collaborative agreements
in the future.
Cash Reserves Update
As of Feb. 1, 2006, the Company had cash and cash equivalents of
approximately $647,000. The Company estimates its current cash
reserves will be sufficient to fund the development of OxyADF(TM)
tablets and related operating expenses through mid-to-late March,
2006.
To continue operating, the Company confirms that it must raise
additional financing or enter into appropriate collaboration
agreements with third parties providing for cash payments to the
Company.
Bankruptcy Warning
In the absence of new financing or third-party collaborative
agreements, the Company believes that it will be required to scale
back or terminate operations or seek protection under applicable
bankruptcy laws.
Headquartered in Palatine, Illinois, Acura Pharmaceuticals, Inc.
-- http://www.acurapharm.com/-- is a specialty pharmaceutical
company engaged in research, development and manufacture of
innovative and proprietary abuse deterrent, abuse resistant and
tamper resistant formulations intended for use in orally
administered opioid-containing prescription analgesic products.
Acura is actively collaborating with contract research
organizations for laboratory and clinical evaluation and testing
of product candidates formulated with its Aversion(R) Technology.
AMERICAN MOULDING: Wants to Sell 63.67 Acres in Stockton, Calif.
----------------------------------------------------------------
American Moulding and Millwork Company asks the U.S. Bankruptcy
Court for the Eastern District of California to approve uniform
sales procedures for approximately 63.67 acres of real property it
owns in Stockton, California.
Specifically, the Debtor asks the Court to:
a) approve a standard form sale agreement for the sale of the
Property;
b) allow a $250,000 break-up fee for offers made that
substantially conform to the terms of the Proposed
Agreement;
c) require a $350,000 minimum initial overbid on the Property;
and
d) authorize the Debtor to spend up to $25,000 to advertise
the Property in selected national or local newspapers.
Sale Agreements
As part of the transition of their business from the Stockton
Facility to North Carolina, the Debtor entered into two purchase
agreements involving the sale of all of the Stockton Facility real
estate:
1. one agreement called for the sale of approximately 53.14
acres of the Stockton Property for $6,500,000 to Aegis
Alpine, LLC; and
2. a second agreement called for the sale of approximately
10.53 acres of the Stockton Property for $1,250,000 to
Peter Marek.
Environmental Impediment
Neither of the Sales to Aegis and Marek closed, partly due to
incomplete environmental closure on the Property.
To satisfy the requirement, the Debtor came up with a Supplemental
Site Assessment and Comprehensive Assessment Work Plan on the
Property.
Accordingly, in 2005, the California Department of Toxic
Substances Control approved the Work Plan, which allowed the
Debtor to collect all the essential raw data required.
Other Buyers Targeted
With the Environmental Closure Requirement met, the Debtor talked
to the Official Committee of Unsecured Creditors and Wells Fargo
Business Credit about selling the Property based on the new,
cleaner test results. The Debtor, the Committee and the Bank
agreed:
1) that the negotiations on the sale of the Property be opened
up to other parties; and
2) to seek a buyer of the Property as is, with no further
environmental testing or due diligence periods.
The Debtor has also negotiated a slight modification of its
assumed contract with MACTEC (the Debtor's environmental
consultant) to allow all the test data to be posted on MACTEC's
Web site for potential buyers.
Because of environmental data evaluation expenses they must face,
each of the potential bidders have indicated that they will
require some form of break-up fee to induce them to invest the
funds for an environmental consultant and to be the initial
stalking horse bidder.
To prompt the widest possible participation of potential bidders,
the Debtor believes that a break-up fee sufficient for a buyer to
fully evaluate all the environmental and zoning issues posed by
the Property is essential.
The Debtor also believes that although many local and
sophisticated buyers know of the Property and have been in contact
with them, advertising now will attract more potential bidders.
Headquartered in Sanford, North Carolina, American Moulding and
Millwork Company -- http://www.amfurniture.com/-- is a supplier
of real wood furniture and cabinetry. The Company filed for
chapter 11 protection on Oct. 6, 2005 (Bankr. E.D. Calif. Case No.
05-34431). Thomas A. Willoughby, Esq., at Felderstein Fitzgerald
Willoughby & Pascuzzi LLP represents the Debtor in its
restructuring efforts. Lawyers at Parkinson Phinney represent the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed $17,663,776 in assets
and $18,481,093 in debts.
ANCHOR GLASS: Wants to Assume Rogers Group Amended Agreement
------------------------------------------------------------
As of the Petition Date, Rogers Group, Inc., and Anchor Glass
Container Corporation were parties to a pricing agreement whereby
Rogers agreed to provide and deliver limestone to various Anchor
Glass facilities at a fixed price through December 31, 2005.
Pursuant to the Pricing Agreement, Rogers has a prepetition claim
for $91,519 for goods and services provided to Anchor Glass.
Anchor Glass continues to purchase limestone from Rogers.
Accordingly, Anchor Glass and Rogers agree to modify the Pricing
Agreement and assume an Amended Pricing Agreement.
Under the Amended Pricing Agreement, the parties agree that
Anchor Glass will satisfy Rogers' prepetition claim and the term
of the Pricing Agreement is extended through December 31, 2007.
Anchor Glass asks the U.S. Bankruptcy Court for the Middle
District of Florida to:
(a) approve the proposed amendments to the Pricing Agreement;
and
(b) authorize it to assume the Amended Pricing Agreement.
Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States. Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets. The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts. Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors. When the Debtor filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts. (Anchor Glass Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ANCHOR GLASS: Has Until March 15 to Decide on Temple Contract
-------------------------------------------------------------
The Hon. Alexander L. Paskay of the U.S. Bankruptcy Court for the
Middle District of Florida gave Anchor Glass Container Corporation
until March 15, 2006, to decide whether it will assume or reject
its Paperboard Supply Agreement with TIN, Inc., dba Temple-Inland.
As reported in the Troubled Company Reporter on Jan. 17, 2006, the
Debtor asked for more time to decide on the Temple-Inland contract
because it has not completed its analysis of which leases and
contracts should be assumed or rejected.
Temple-Inland supplies the Debtor with paperboard packaging
material at a very favorable pricing pursuant to the Agreement.
Temple-Inland had asserted that the Debtor failed to pay
$2,100,964 for paperboard packaging and asked the Court to impose
a deadline by which Anchor Glass must decide whether to assume or
reject the Supply Agreement.
Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States. Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets. The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts. Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors. When the Debtor filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts. (Anchor Glass Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ANNA NICOLE SMITH: High Court Entertains Probate Law Arguments
--------------------------------------------------------------
The United States Supreme Court heard oral argument yesterday in
the appeal taken by Vicki Lynn Marshall a/k/a Anna Nicole Smith to
resurrect her multi-million-dollar judgment entered in her
bankruptcy case by the Honorable Samuel Bufford in Los Angeles,
California, in 2000.
That bankruptcy court judgment awarded former Playboy Playmate and
Guess? Jeans model Anna Nicole Smith $449 million in a court
battle with the son of her late 90-year-old husband, oil baron J.
Howard Marshall, over his $1.6 billion estate. The U.S. District
Court reduced the judgment to $88 million. The judgment was
tossed out by the United States Court of Appeals for the Ninth
Circuit in a decision reported at 392 F.3d 1119 (9th Cir. 2004).
In Marshall v. Marshall, No. 04-1544, the High Court is being
asked four questions about the intersection of bankruptcy and
probate law:
1. What is the scope of the probate exception to federal
jurisdiction?
2. Did Congress intend the probate exception to apply where a
federal court is not asked to probate a will, administer
an estate, or otherwise assume control of property in the
custody of a state probate court?
3. Did Congress intend the probate exception to apply to
cases arising under the Constitution, laws, or treaties of
the United States (28 U.S.C. Sec. 1331), including the
Bankruptcy Code (28 U.S.C. Sec. 1334), or is it limited to
cases in which jurisdiction is based on diversity of
citizenship?
4. Did Congress intend the probate exception to apply to
cases arising out of trusts, or is it limited to cases
involving wills?
E. Pierce Marshall, the oil baron's son, Ms. Smith's stepson, and
Respondent, says the bankruptcy court's judgment was flawed, the
facts and law are on his side, and no federal court has
jurisdiction over state probate matters.
Before the High Court, Anna Nicole Smith is represented by:
Kent L. Richland, Esq.
5700 Wilshire Boulevard, Suite 375
Los Angeles, CA 90036
Telephone (310) 859-7811
and E. Pierce Marshall is represented by:
George Eric Brunstad, Jr., Esq.
Bingham McCutchen, LLP
One State Street
Hartford, CT 06103
Telephone (860) 240-2717
ARI NETWORK: January 31 Balance Sheet Upside-Down by $2.5 Mil.
--------------------------------------------------------------
ARI Network Services Inc. reported increased revenues, operating
income and net income for the second quarter ended Jan. 31, 2006.
Second Quarter Fiscal 2006 Highlights
-- revenues increased 7% to $3.5 million in the second quarter
of fiscal 2006 from $3.3 million for the second quarter of
fiscal 2005;
-- operating income was $549,000 for the second quarter of
fiscal 2006, an 8% increase from operating income of
$506,000 for the same period in the prior year; and
-- net income was $524,000 or $0.08 per diluted share for the
second quarter of fiscal 2006, a 15% increase from net
income of $455,000 for the same period in the prior year.
First Half Fiscal 2006 Highlights
-- revenues increased 7% to $7.0 million for the first half of
fiscal 2006, from $6.6 million for the first half of fiscal
2005;
-- operating income increased slightly to $1.073 million for
the first half of fiscal 2006, compared to $1.068 million
for the same period in the prior year; and
-- net income was $1.0 million or $0.15 per diluted share for
the first half of fiscal 2006, compared to net income of
$949,000 for the same period in fiscal 2005.
Operations Review
"Our top and bottom line performance in the second quarter of
fiscal 2006 is on track with our expectations," said Brian E.
Dearing, chairman and chief executive officer of ARI. "We also
made some good progress on our four growth initiatives for fiscal
2006. The first initiative is to maintain and enhance our core
electronic catalog business. Recurring revenues in our core
catalog products and services in the U.S. increased 5% for the
quarter. Our renewal rate continues to be very solid at over
85%," said Mr. Dearing.
Mr. Dearing said the Company is also executing on its second
growth initiative for fiscal 2006, expanding the Dealer Marketing
Services area. "We again showed double-digit growth in revenues
from these new value-added services. While this business is still
relatively small, the growth indicates that manufactured equipment
dealers recognize the benefits our Dealer Marketing Services
provide," said Dearing.
MR. Dearing noted that ARI continues to build its suite of Dealer
Marketing Services. The latest additions include new content
management capabilities and a new product, eMailSmart(TM).
eMailSmart is a template-based email service that provides dealers
with an automated, easy-to-use and cost-effective way to reach
their customers throughout the year.
"We've set the stage for growth in Europe (our third growth
initiative) by establishing an office in the Netherlands,
repositioning the business to the successful dealer-centric model
we utilize in the U.S. and adding experienced staff. This month,
we consolidated our worldwide sales organization under Jeff Horn,
vice president - global sales and marketing, to better coordinate
our sales activities across the globe."
"The fourth strategic objective is to expand the business through
accretive acquisitions that enhance our capabilities and expand
our markets. Because we have now consolidated worldwide sales,
John Bray, vice president - business development and strategy, is
now devoting his full-time efforts to corporate development and
strategy. The increased focus in this area recognizes the
significant role we believe acquisitions will have in our future
growth," said Mr. Dearing.
Mr. Dearing said the company has a strong cash position and
continues to pay down its debt. "We have a $2.7 million balance
remaining on our long-term notes, which is less than our cash
balance of $3.6 million. We have the next two payments reserved
and are on schedule to pay off the entire debt on December 31,
2007."
Outlook
"We expect the balance of the fiscal year to be broadly consistent
with the first half, with continued organic growth. We expect to
maintain good cash flow and profitability even as we continue to
invest in initiatives such as Dealer Marketing Services that add
value to our customer relationships and contribute to our long-
term growth," said Mr. Dearing.
ARI Network Services Inc. provides electronic parts catalogs and
related technology and services to increase sales and profits for
dealers in the manufactured equipment markets. ARI currently
provides approximately 89 parts catalogs (many of which contain
multiple lines of equipment) for approximately 72 equipment
manufacturers in the U.S. and Europe. Approximately 81,000
catalog subscriptions are provided through ARI to more than 29,000
dealers and distributors in approximately 89 countries in a dozen
segments of the worldwide equipment market including outdoor
power, power sports, ag equipment, recreation vehicle, floor
maintenance, auto and truck parts aftermarket, marine and
construction. The Company builds and supports a full suite of
multi-media electronic catalog publishing and viewing software for
the Web or CD and provides expert catalog publishing and
consulting services. ARI also provides dealer marketing services,
including technology-enabled direct mail, email and a template-
based dealer website service that makes it quick and easy for an
equipment dealer to have a professional and attractive website.
In addition, ARI e-Catalog systems support a variety of electronic
pathways for parts orders, warranty claims and other transactions
between manufacturers and their networks of sales and service
points. ARI currently operates three offices in the United States
and one in Europe and has sales and service agents in England and
France providing marketing and support of its products and
services.
As of January 31, 2006, the Company's equity deficit narrowed to
$2,506,000 from a $3,609,000 equity deficit at July 31, 2005.
ARMOR HOLDINGS: Moody's Puts B1 Rated Sr. Subor. Notes on Review
----------------------------------------------------------------
Moody's Investors Service placed the ratings of Armor Holdings,
Inc., on review for possible downgrade, prompted by the company's
recent announcement of its planned acquisition of all outstanding
stock of Stewart & Stevenson Services, Inc., for approximately
$755 million, excluding Stewart & Stevenson's cash balance of $312
million as of Jan. 31, 2006.
The ratings review will focus on the ultimate capitalization of
the company considering incremental debt used to fund the
acquisition, a detailed analysis of the earnings and cash flow
that Stewart & Stevenson will likely contribute to Armor Holdings,
as well as an assessment of the strategic rationale and
integration risks associated with this acquisition.
Moody's notes that the proposed purchase of Stewart & Stevenson
represents the largest acquisition that Armor Holdings has
undertaken in terms of size and potential impact on the company's
overall business. While the transaction represents a logical
extension of Armor's existing operations, the current level of
operating earnings the acquired entity will provide to Armor's
financial performance is not clear.
In its 10-Q filed with the SEC for the nine months ended Oct. 29,
2005, Stewart & Stevenson reported operating earnings of $27
million. Absent transactional events that would enhance Stewart &
Stevenson's earnings as a part of Armor, this would suggest that
the purchase price represents a large multiple of underlying
earnings. Also, since Armor, which is currently a components
supplier to vehicle manufacturers such as Stewart & Stevenson,
will now assume the role of manufacturer and prime contractor,
Moody's is concerned as to the level of integration risks that may
ensue from this acquisition.
Moody's also cites the planned use of additional debt to fund the
acquisition as a concern. While Armor intends to use a
substantial amount of its own cash to fund the purchase, the
company has stated its intention to finance the remaining amounts
through proceeds from new senior credit facilities, suggesting
increased leverage resulting from this acquisition.
Moody's notes that Armor's credit metrics have strengthened
significantly over recent quarters, owing to strong demand levels
for its vehicle armor products that have resulted in improved
operating earnings and cash flows, which may offset the effects of
a modest degree of additional debt that the company may undertake.
However, the implementation of a substantial level of senior
secured debt to Armor's debt structure may result in a widening of
notching between the Corporate Family Rating and the subordinated
notes, regardless of whether the Corporate Family Rating is
confirmed as a result of this review.
These ratings have been placed on review for possible downgrade:
* Senior subordinated notes due 2013, rated B1
* Senior convertible subordinated notes due 2024, rated B1
* Corporate Family Rating of Ba3.
Armor Holdings, headquartered in Jacksonville, Florida, is a
manufacturer and provider of security products, vehicle armoring
systems, and security risk management services. The company had
FY 2005 revenues of $1.6 billion.
Stewart & Stevenson Services, Inc., based in Houston, Texas, is a
leading manufacturer of military tactical wheeled vehicles
including the Family of Medium Tactical Vehicles.
ASARCO LLC: Mitsui Objects to Gerald Metals Debts Set-Off
---------------------------------------------------------
Gerald Metals, Inc., and ASARCO LLC are parties to three
prepetition agreements:
* a Copper Concentrate Toll Agreement;
* a Copper Purchase Contract; and
* an Exchange Agreement.
ASARCO rejected the Agreements in October 2005.
Gerald asserts prepetition claims against ASARCO for $13,904,158,
plus interest and reasonable legal fees and expenses. Gerald has
filed a proof of claim with the Court.
Gerald also discloses that it owes ASARCO $7,154,312, subject to
account finalization and verification, on account of the parties'
prepetition transactions.
Accordingly, Gerald asks the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi to lift the automatic
stay to set off the ASARCO Debt against its prepetition rejection
claim.
The set-off should be allowed, Daniel I. Morenoff, Esq., at
Hughes Luce LLP, in Dallas, Texas, contends, because:
1. the Gerald Claim, although the result of ASARCO's
postpetition breach and termination of the Agreements,
constitutes a breach immediately before the Petition Date.
Thus, the Gerald Claim is a prepetition claim that may be
"setoff" against the ASARCO Debt;
2. the ASARCO Debt results from transactions between the
parties that occurred prepetition, including transactions
pursuant to the Agreements;
3. the Gerald Claim and the ASARCO Debt are mutual in that
the debts are owed between the same parties and the
parties are acting in the same capacity; and
4. the Gerald Claim and the ASARCO Debt are both allowable
under New York State law.
The Bankruptcy Code does not create a right of set-off; rather,
it preserves common law right of set-off under state law, subject
to limitations, Mr. Morenoff reminds Judge Schmidt, citing Cohen
v. Savings Buildings & Loan Co. (In re Bevill, Bresler & Schulman
Asset Mgmt. Corp.), 986 F.2d 54, 57 (3rd Cir. 1990).
Mitsui Objects
Pursuant to prepetition agreements with ASARCO, Mitsui & Company
(U.S.A), Inc., holds a security interest in ASARCO's silver
inventory and its proceeds. The Cash Collateral Order provides
that ASARCO will maintain the proceeds of Mitsui's collateral in
a separate segregated bank account, and will promptly deposit the
proceeds allocated to the Mitsui Silver Inventory into the Mitsui
Cash Collateral Account.
Mitsui notes that, pursuant to a contract concerning the sale of
clean copper concentrates from the Ray and Mission mines, ASARCO
has sent an invoice for $3,131,315 to Gerald.
In October 2005, the Court ordered Gerald to withhold $1,500,000
of the Ray Invoice. Shortly, Gerald paid $700,000 to ASARCO,
which included certain amounts attributable to the sale of silver
from ASARCO to Gerald.
Thus, it is clear that ASARCO and Gerald have engaged in
transactions concerning the sale of silver-bearing materials.
However, other than Gerald's statement that the ASARCO Debt
results from prepetition transactions between Gerald and ASARCO,
it is unclear which contracts the ASARCO Debt arose under.
Mitsui objects to Gerald's request because it would result to the
improper set-off of money attributable to Mitsui's silver
inventory and its proceeds. The amount requested by Gerald is
required to be deposited into Mitsui's Cash Collateral Account
and should not be set off.
David G. Gamble, Esq., at Carrington, Coleman, Sloman &
Blumenthal, LLP, in Dallas, Texas, contends that the silver-
imbedded materials sold to Gerald must be accounted for. It is
impermissible to keep payments of the silver materials to Gerald
instead of in the Mitsui Cash Collateral Account, Mr. Gamble
argues.
Furthermore, pursuant to the Uniform Commercial Code, Mitsui's
lien on the silver inventory and its proceeds are superior to
Gerald's alleged set-off rights because a creditor's set-off
rights are subordinate to another creditor's security interest
where the creditor is seeking the set-off received authenticated
notice of the interest.
According to Mr. Gamble, Gerald has received authenticated notice
of Mitsui's security interest on multiple occasions. In addition
to being scheduled by ASARCO, Mitsui's security interest was
clearly and unambiguously made known to Gerald through Mitsui's
objection to the Gerald Contract Rejection Motion.
In addition, without examining all of the contracts under which
the ASARCO Debt arose, it is impossible to determine whether the
mutuality set-off requirement is satisfied. Hence, without more
information concerning the ASARCO Debt, the right of Gerald to
set off even that portion of the ASARCO Debt not attributable to
the sale of silver is unclear. Because Gerald has failed to
provide the information, it would be improper to allow the set-
off at this time.
Mitsui asks the Court to deny Gerald's request.
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. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. 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. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., 215/945-7000).
ASARCO LLC: Court Okays SRK Consulting to Make Production Analysis
------------------------------------------------------------------
ASARCO LLC sought and obtained authority from the U.S. Bankruptcy
Court for the Southern District of Texas in Corpus Christi to
employ SRK Consulting (U.S.), Inc., as its consultant to conduct
an analysis of production and cost projections at the various
mines, smelters and refineries.
As reported in the Troubled Company Reporter on Feb. 8, 2006,
James R. Prince, Esq., at Baker Botts LLP, in Dallas, Texas,
told the Court that the technical audit is expected to identify
opportunities for operational improvement. The analysis will
allow ASARCO to better understand and evaluate its business model
and strategies going forward, which will, in turn, constitute an
essential part of the Debtors' successful reorganization.
ASARCO will pay SRK Consulting $54,000 retainer, which will be
paid before the commencement of any work. ASARCO will also pay
SRK Consulting in its customary hourly rates ranging from $65 to
$250 per hour, and reimburse actual costs and expenses SRK
Consulting will incur in connection with the preparation of the
Production and Cost Projections Analysis.
SRK Consulting estimates that Phase I services will cost $100,964
and Phase II services will cost $35,386. ASARCO is not liable
for any fees or charges in excess of $136,350.
Judge Schmidt authorizes ASARCO LLC to pay not more than $136,350
to SRK Consulting (U.S.), Inc.'s invoices.
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. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. 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. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., 215/945-7000).
ASSET SECURITIZATION: S&P Lifts One Cert. Class' Rating to CCC+
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on four
classes of certificates from Asset Securitization Corp.'s
commercial mortgage pass-through certificates series 1996-D2.
At the same time, the 'AAA' rating on class A-1 is affirmed.
The raised and affirmed ratings reflect the appropriate level of
credit support in various stressed scenarios. The upgrade of the
A-4 and B-1A classes also reflects the repayment of all
accumulated interest shortfalls.
As of Feb. 15, 2006, the trust collateral consisted of 45 loans
with an aggregate balance of $267.0 million, down from 124 loans
with an aggregate balance of $879.5 million at issuance. Full-
year 2004 or partial-year 2005 financial information was provided
for 81.7% of the pool. Based on this information, Standard &
Poor's calculated a weighted-average net cash flow debt service
coverage (DSC) figure of 1.12x, down from 1.66x at issuance. The
trust has incurred 15 losses to date, amounting to $71.3 million.
This has caused six certificates to lose 100% of their principal.
It has also caused the ratings on four certificates to be lowered
to 'D'. There are seven loans in special servicing and there are
no loans on the watchlist, as the master servicer is not required
to maintain a watchlist for this transaction.
The top 10 loans have an aggregate balance of $151.3 million and
the most recent weighted average DSC was 1.07x, down from 1.63x at
issuance. These figures exclude the fourth-largest loan, for
which recent financial information is unavailable. As part of its
surveillance review, Standard & Poor's reviewed servicer-provided
property inspections for assets underlying the top 10 loans
excluding the fourth- and eighth-largest loans. The properties
were characterized as "good" or "excellent" with only one
exception. One of the four properties securing the third-largest
loan was deemed to be in "fair" condition. Three of the top 10
loans are in special servicing and a fourth reported a 2004 DSC of
1.04x.
As of the most recent remittance report, seven loans with an
outstanding balance of $67.8 million were with the special
servicer, CWCapital Asset Management LLC. The largest specially
serviced loan has a balance of $18.3 million and is secured by
three healthcare facilities in Indiana and Illinois that have a
total of 483 beds. This loan has been in special servicing for
more than four years because it was in technical default of
certain insurance covenants. This loan was current in its debt
service payments and was expected to be returned to the master
servicer. The loan recently became delinquent and a liquidation
of the assets is now planned. Standard & Poor's anticipates a
significant loss upon resolution.
The second-largest specially serviced loan has a $14.3 million
balance and is secured by a 579,000-sq.-ft. industrial facility
located in Allen Park, Michigan. The loan was transferred to the
special servicer because the borrower was unable to secure
refinancing proceeds upon the loan's maturity in November 2005,
which occurred after the tenant occupying a majority of the space
vacated. The loan maturity has been extended to June 2006 and the
borrower continues to keep the loan current. The loan presents a
significant loss potential if it defaults. The default
probability will greatly increase if the space goes unleased.
The third-largest specially serviced loan, secured by seven
healthcare properties in Missouri, has an aggregate balance of
$13.9 million and a total exposure of $16.1 million. The loan is
90-plus days delinquent and has been in special servicing for more
than three years. The underlying collateral originally contained
834 beds; since origination, two of the properties have closed,
leaving 603 beds at the five properties that remain open.
Standard & Poor's anticipates a significant loss upon the eventual
resolution of this loan.
The remaining loans with the special servicer have balances of
less than $8.0 million. Standard & Poor's anticipates significant
a loss on the $7.0 million loan secured by two healthcare assets
located in North Carolina. Losses upon the resolution of the
other specially serviced loans, if any, are expected to be
minimal.
Standard & Poor's stressed the specially serviced loans and other
loans with credit issues in its analysis. The resulting credit
enhancement levels adequately support the raised and affirmed
ratings.
Ratings raised:
Asset Securitization Corp.
Commercial mortgage pass-through certs series 1996-D2
Rating
Class To From Credit Enhancement
----- -- ---- ------------------
A-2 AA+ A 49.1%
A-3 A BB+ 29.3%
A-4 B+ CCC 16.1%
B-1A CCC+ D 13.0%
Ratings affirmed:
Asset Securitization Corp.
Commercial mortgage pass-through certs series 1996-D2
Class Rating Credit Enhancement
----- ------ ------------------
A-1 AAA 68.8%
ATA AIRLINES: Emerges from Chapter 11 Protection as Private Entity
------------------------------------------------------------------
ATA Airlines, Inc., reported that it officially emerged from
Chapter 11 on Feb. 28, 2006, following the U.S. Bankruptcy Court
for the Southern District of Indiana's confirmation of the
company's plan of reorganization last Jan. 31, 2006.
The plan of reorganization for ATA and the other affiliated
"Reorganizing Debtors" became effective on Feb. 28, 2006.
"Now that we've accomplished the monumental task of restructuring,
our next focus will be on incrementally improving our operations,"
said ATA President and CEO John Denison. "Going forward we will
be challenging ourselves to operate as efficiently as possible,
leverage our core strengths and bring customer service to the
highest levels of performance. I am confident that our employees
can and will continually meet these challenges."
Since filing for protection under Chapter 11 on Oct. 26, 2004, ATA
has taken several steps to revise its business model and
strengthen its financial position. These have included entering
into a first of its kind, long-term codeshare agreement with
Southwest Airlines, realigning its route structure to focus on its
most promising markets, and obtaining debt and majority equity
funding from private equity firm MatlinPatterson.
"ATA's current scheduled service footprint in markets where the
Company has a proven track-record of success, such as Hawaii, and
the codeshare relationship with Southwest provide an excellent
basis for profitable growth," said Subodh Karnik, ATA Chief
Operating Officer. "In addition, our established military and
commercial charter business provide a solid diversified
foundation. Add to that our commitment to delivering high-end
operating performance, and one begins to see the new winning
picture taking shape at ATA."
During restructuring, old shares of common stock in ATA's parent,
ATA Holdings Corp., were traded over the counter under the symbol
ATAHQ. These shares will no longer trade after Feb. 28, 2006.
Instead, ATA and its new parent company will be operated as a
privately held entity, a status that was in effect from ATA's
certification as a common-air carrier until an initial public
offering made in 1993.
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. Daniel H.
Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland,
Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the
Official Committee of Unsecured Creditors. 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: Balks at 19 EETC Owner-Participants' Claims
---------------------------------------------------------
ATA Airlines, Inc., and its debtor-affiliates object to 19 claims
filed by owner participants with respect to certain 2000 EETC
aircraft.
Prior to their chapter 11 filing, the Debtors engaged in a method
of equipment financing known as enhanced equipment trust
certificates, which are commonly used in the airline industry.
Essentially, an EETC is a publicly issued equipment note, which
relies on one of two sources of funding:
(a) mortgage financing; and
(b) lease financing.
When lease financing is used, the associated structure most often
takes the form of a leveraged lease.
The Debtors employed seven leveraged leases to finance the 2000
EETC Aircraft.
Jeffrey J. Graham, Esq., at Sommer Barnard, PC, in Indianapolis,
Indiana, relates that the leveraged leases relating to the 2000
EETC Aircraft are governed by three interrelated contractual
documents:
(a) a lease agreement between the indenture trustee and
American Trans Air, Inc., also known as ATA Airlines,
Inc., which governs ATA's use of the particular 2000 EETC
Aircraft and the indenture trustee's remedies for default
or casualty;
(b) a participation agreement among:
-- ATA,
-- the owner participant for each aircraft,
-- the owner trustee for each aircraft,
-- the lenders for each aircraft, and
-- the indenture trustee,
which sets forth the owner participant's agreement to make
an equity investment to acquire the aircraft, the EETC
holders' agreement to finance the various debt portions of
the aircraft; and
(c) a tax indemnity agreement, which governs ATA's
indemnification of the owner participant for each 2000
EETC Aircraft for the loss of certain tax benefits under
the leveraged lease transaction.
The Debtors rejected all of the 2000 EETC Aircraft postpetition
and each aircraft was sold at foreclosure for an amount less than
the outstanding indebtedness on the aircraft, giving rise to a
"loss" event under the aircraft owner participant's tax
indemnification agreement.
Either in anticipation of, or as a direct result of, the eventual
"loss" event on the 2000 EETC Aircraft, the owner participant for
each 2000 EETC Aircraft filed a claim against one or more of the
Debtors based on the tax indemnification agreement:
Owner Participant Claim No.
----------------- ---------
Ambac Assurance Corporation 1056
1057
Banc of America Commercial Finance Corp. 1166
1167
1168
Fleet National Bank 1174
1175
1176
ICX Corporation, as Owner Participant 950
960
964
966
Provident Bank 1107
1108
2148
2149
TransAmerica Commercial Finance Corp. I 1157
1158
1159
According to the Debtors, the 2000 TIA claims greatly exaggerate
the amounts owed by ATA to owner participants under the 2000 EETC
leveraged leases. Thus, the Debtors object to the claims.
The Debtors' analysis of the 2000 TIA Claims and the leveraged
leases shows that each owner participant's Actual Loss Claim will
fall between $0 to $2,000,000, Mr. Robinson notes.
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. Daniel H.
Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland,
Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the
Official Committee of Unsecured Creditors. 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. 48; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
BIERSTUBE INC: Case Summary & 19 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Bierstube, Inc.
aka Kclinger's Publik House
895 Old Trail Road
Etters, Pennsylvania 17319
Bankruptcy Case No.: 06-00285
Type of Business: The Debtor owns and operates a restaurant.
See http://www.kclingers.com/
Chapter 11 Petition Date: February 27, 2006
Court: Middle District of Pennsylvania (Harrisburg)
Judge: Mary D. France
Debtor's Counsel: Robert E. Chernicoff, Esq.
Cunningham & Chernicoff, P.C.
2320 North Second Street
Harrisburg, Pennsylvania 17110
Tel: (717) 238-6570
Fax: (717) 238-4809
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
William A. Klinger Loan $465,000
7695 Harmony Grove Road
Wellsville, PA 17365
Bierdetrinken Loan $100,000
304 Poplar Street
Hanover, PA 17331
Leon Haller Loan $50,000
1719 North Front Street
Harrisburg, PA 17107
Purcell King and Haller Legal fees $25,178
Pennsylvania Department of Unpaid taxes $24,000
Labor & Industry
Sysco Trade debt $15,000
Ritter Foods Trade debt $14,000
Reinhart Foods Trade debt $13,543
RH Holsberg Trade debt $11,475
JD Fawn Associates Trade debt $7,000
UGI Utility bills $5,393
MET-ED Trade debt $5,200
Zenith Insurance Co. Trade debt $3,821
Erie Insurance Trade debt $3,609
Princeton Insurance Trade debt $2,511
Waste Management Trade debt $1,236
United Restaurant Equipment Trade debt $1,131
Terminix Trade debt $408
DIRECTV Trade debt $369
BIO-RAD LABORATORIES: Earns $13.5 Million in Fourth Quarter 2005
----------------------------------------------------------------
Bio-Rad Laboratories, Inc. (Amex: BIO; BIOb) reported its
financial results for the fourth quarter and fiscal year ended
Dec. 31, 2005.
Net revenues from continuing operations were $307.3 million for
the fourth quarter, essentially flat versus the prior-year
quarter. On a currency-neutral basis, however, revenues were up
2.9% over the same period last year.
During the quarter, the Life Science segment experienced a
reduction in revenue as well as higher incremental expenses as it
absorbed the impact of the injunction by a Connecticut Federal
District Court stopping all sales and manufacturing in the United
States of the Company's MJ Research line of thermal cycling
products.
For the quarter, income from continuing operations was
$13.5 million compared to $17.1 million in the fourth quarter of
last year. Quarterly net income was negatively impacted by a one-
time, non-cash charge of $19.8 million of pre-tax impairment
expenses primarily due to the write-down of intangible assets
associated with the acquisition of MJ Research.
These negatives were partially offset by fourth-quarter pre-tax
gains of approximately $11 million associated with the liquidation
of our positions in Instrumentation Laboratory S.p.A. and
BioSource International.
For the full year, Company sales from continuing operations grew
by 8.3% to $1,181 million compared to $1,090 million in 2004.
Normalizing for the impact of currency effects, growth was 7.3%.
This growth was largely due to organic growth in Bio-Rad's two
main business segments. Year-over-year income from continuing
operations grew by 17.0% to $77.6 million from $66.3 million.
Full-year gross margin from continuing operations was 54.7%, down
from last year's figure of 56.0%. The decline in gross margin was
largely attributable to sales mix coupled with price erosion in
our BSE (bovine spongiform encephalopathy or mad cow disease)
business.
Fourth-Quarter Highlights
-- Overall net sales from continuing operations for the fourth
quarter were flat versus the prior-year quarter; and
-- Compared to their respective figures in 2004, segment net
sales for the quarter were 5.3% lower for the Life Science
segment and 4.0% higher for the Clinical Diagnostics
segment. The lower revenues in the Life Science segment
were due in large part to the injunction on sales and
manufacturing of our MJ Research line of products in the
United States.
Life Science segment net sales for the quarter were
$140.7 million, down 5.3% compared to the fourth quarter of last
year. On a currency-neutral basis, segment sales contracted by
1.8%. Full-year reported revenues from continuing operations were
$549.9 million for the segment, up 9.0% over the prior year, or
8.2% on a currency-neutral basis.
Performance in this segment was boosted by a number of factors
including sales increases in the protein expression analysis,
automated electrophoresis, amplification reagents and
biotechnology education product areas. The iQTM5 real time
amplification platform also gained market acceptance. However,
segment results continued to be negatively impacted by erosion in
the average selling price of BSE tests.
This erosion is due primarily to increased competition in the
marketplace coupled with a reduction in the overall number of
animals being tested. Also during the quarter, the segment
experienced a reduction in revenue due to the aforementioned
injunction. In February of 2006, the Company settled its dispute
with Applera and Roche, enabling the resumption of sales of
thermal cycling products.
The Clinical Diagnostics segment reported net sales of
$162.9 million for the quarter, up 4.0% compared to the prior-year
quarter, or 6.7% excluding currency effects. Full-year segment
sales from continuing operations were $618.4 million, a 7.3%
increase compared to 2004 results, or 5.9% excluding currency
effects. These results are due in part to continued growth in the
blood virus, diabetes monitoring and quality controls product
lines. U.S. Sales of the segment's Platelia(TM) Aspergillus
enzyme immunoassay (EIA) were also up significantly over last
year. During the year, the Clinical Diagnostics Group launched a
number of products including the new MRSA select chromogenic
media, which detects Methicillin-resistant Staphylococcus aureus.
2005 Highlights
-- Full-year Company sales from continuing operations grew by
8.3% to $1,181 million;
-- Year-over-year income from continuing operations grew by
17.0% to $77.6 million from $66.3 million in 2004;
-- Certain one-time tax benefits caused the Company's effective
tax rate on income from continuing operations to fall for
the year to 16.9%;
-- In July, Bio-Rad and Sysmex America, Inc., signed a
co-marketing agreement in which the two companies will
jointly market their complementary products, the Bio-Rad
VARIANT(TM) II TURBO HST Hemoglobin Testing System and the
Sysmex HST-N(TM) Hematology Automation Line, as a complete,
integrated testing solution. This combination of Bio-Rad's
market-leading assay for hemoglobin A1C and Sysmex's
automated testing platform will enable laboratories to
provide superior diabetes monitoring services to doctors and
their patients throughout the United States;
-- In October, Bio-Rad announced a second collaboration
agreement with Caliper Life Sciences, Inc. to investigate
development of another novel microfluidic system;
-- The Company's new Experion(TM) automated electrophoresis
system was well received by customers worldwide, especially
for use in protein profiling applications;
-- In November, the Company received approval for its medical
decision support software (MDSS) from the U.S. Food and Drug
Administration for its new BioPlex(R) 2200 system, an
automated immunoassay platform capable of analyzing for
multiple disease states from single patient samples. The
system improves both test quality and turnaround time, and
renders the diagnostic process far less labor-intensive.
-- Pfizer's Exubera(R) inhalable insulin product was recently
approved by the U.S. Food and Drug Administration for the
treatment of adults with type 1 and type 2 diabetes.
Bio-Rad's Macro-Prep(R) process chromatography support is an
integral part of the purification of the insulin used in
this product; and
-- In December, Bio-Rad renewed a collaboration agreement with
the Institute Pasteur of Paris, France for an additional
four years. This relationship gives Bio-Rad exclusive
commercialization rights to Pasteur's research developments
in the areas of virology, microbiology, physiology,
biochemistry, parasitology and mycology.
"2005 was a dynamic year," Norman Schwartz, President and Chief
Executive Officer said. "Underneath it all is a solid business in
which we see real opportunities as we head into 2006."
Bio-Rad Laboratories, Inc. -- http://www.bio-rad.com/-- is a
multinational manufacturer and distributor of life science
research products and clinical diagnostics. Based in Hercules,
California, Bio-Rad serves more than 70,000 research and industry
customers worldwide through a network of more than 30 wholly owned
subsidiary offices.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2004,
Moody's Investors Service:
-- assigned a rating of Ba3 to Bio-Rad Laboratories' $200
million senior unsecured subordinated notes due 2014;
-- affirmed Bio Rad Laboratories' Senior Implied and Senior
Unsecured Ratings at Ba2; and
-- affirmed a Ba3 rating on Bio Rad Laboratories' $225 million
Senior Unsecured Subordinated Notes due 2013;
while indicating that the outlook is positive.
As reported in the Troubled Company Reporter on Dec. 15, 2004,
Standard & Poor's Ratings Services assigned its 'BB-' rating to
Bio-Rad Laboratories Inc.'s proposed $200 million of subordinated
notes due Dec. 15, 2014. Proceeds are to be used for general
corporate purposes, including acquisitions. At the same time, the
'BB+' corporate credit rating is affirmed. The outlook is stable.
BROKERS INC: Sells North Carolina Property to Coffer for $2.1 Mil.
------------------------------------------------------------------
The Honorable Catharine R. Carruthers of the U.S. Bankruptcy Court
for the Middle District of North Carolina gave Brokers Inc.
permission to sell its property in Wiley Park Subdivision,
Greensboro, Guilford County, North Carolina, to Kenneth Coffer for
$2.1 million.
The Court also allowed the Debtor to pay Price Commercial
Properties, the Debtor's agent, and GreenPoint Properties, Mr.
Coffer's agent, a $100,000 brokers' commission.
Carlton Eugene Anderson holds a disputed lien on the property
to secure the Debtor's $2,517,611.90 debt to Mr. Anderson.
Hylton-Crowder & Associates, an appraiser, valued the property
at $1.59 million.
The sale is free and clear of liens and encumbrances. But the
Court ordered the Debtor to place part of the sale proceeds in an
interest bearing account to reserve for payment of Mr. Anderson's
secured claim. $1.983,123.74 will be placed in that account. The
rest will be placed in an account designated for the deposit of
proceeds from the sale of unencumbered assets, after property
taxes are fully paid.
Headquartered in Thomasville, North Carolina, Brokers
Incorporated, filed for chapter 11 protection on Nov. 22, 2004
(Bankr. M.D. N.C. Case No. 04-53451). Christine L. Myatt, Esq.,
at Nexsen Pruet Adams Kleemeier, PLLC, represents the Debtor in
its restructuring efforts. C. Edwin Allman, III, Esq., in
Winston-Salem, North Carolina represents the Official Committee of
Unsecured Creditors. When the Debtor filed for protection
from its creditors, it listed estimated assets of $10 million to
$50 million and $1 million to $10 million in estimated debts.
CABLEVISION SYSTEMS: Loan Completion Prompts S&P to Lift Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its selected ratings
on Bethpage, New York-based cable TV operator Cablevision Systems
Corp. and related entities, including:
-- the corporate credit rating, which was upgraded to 'BB'
from 'BB-'; and
-- the short term rating, which was raised to 'B-1' from 'B-2'.
All other ratings also were raised, except the senior secured bank
loan ('BB', and not on CreditWatch) and senior unsecured debt
rating ('B+') at intermediate holding company CSC Holdings Inc.
These ratings were affirmed.
All ratings were removed from CreditWatch with developing
implications: They originally were placed on CreditWatch with
negative implications on June 20, 2005, and a stable outlook was
assigned. Pro forma for new bank refinancings, the company has
about $11 billion of total debt outstanding, on an operating
lease-adjusted basis, including about $1.2 billion of
collateralized indebtedness.
"The upgrades follow the company's completion of its $2.4 billion
in new bank loan facilities, to be used to repay a June 2006 $1.4
billion maturity," said Standard & Poor's credit analyst Catherine
Cosentino.
With removal of this refinancing overhang, the fundamental
strength of the company's cable TV operations support the higher
rating. This business has performed very well and continues to
have favorable business prospects, largely because of the
attractive demographics of the company's overall markets.
The 'B+' rating for CSC Holdings' existing unsecured debt provides
for a two notch differential from the new 'BB' corporate credit
rating because of the increased amount of priority obligations
relative to these unsecured debt issues expected to exist,
principally potentially additional secured debt to fund a possible
dividend being considered by the board of directors, which could
be in the area of the $3 billion level previously proposed by
senior management.
Our short-term credit rating for Cablevision was raised to 'B-1'
to reflect removal of the looming bank loan maturity and the
modest amortization under the new bank loans and about $1 billion
of initial availability under the revolving credit portion of the
facility, which provides ample excess liquidity to support a 'B-1'
rating.
The ratings reflect the solid investment-grade characteristics of
Cablevision's cable TV business, composed of three million basic
subscribers in the metropolitan New York/New Jersey area. These
favorable business characteristics are partially offset by the
company's aggressive financial policy. As a result, debt to
EBITDA, pro forma for the refinancing and potential special
dividend payment, is expected to be in the mid 6x area on an
operating lease adjusted basis for 2006, including contractual
purchase commitments, but excluding collateralized indebtedness
for monetization transactions.
CALPINE CORP: Wants Okay of De Minimis Asset Disposition Protocol
-----------------------------------------------------------------
Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York for authority to
implement procedures to:
(a) sell or transfer surplus, obsolete, non-core or burdensome
assets -- the De Minimis Assets -- in any individual
transaction or series of related transactions to a single
buyer or group of related buyers with a selling price
equal to or less than $15,000,000;
(b) abandon the De Minimis Assets to the extent that a sale or
transfer cannot be consummated at value greater than the
liquidation expense of the assets or where the Debtors
determine that abandonment would be in the Debtors' best
interests; and
(c) take all the requisite actions, particularly where the
Debtors' internal committee or board approvals are
required, or where the Debtors' consent as shareholders is
necessary to sell, transfer or abandon assets of the non-
Debtor subsidiaries of the Debtors without need of Court
approval.
Matthew A. Cantor, Esq., at Kirkland & Ellis LLP, in New York
relates that the Debtors will be identifying underperforming or
surplus assets to consolidate operations and redirect focus on
more profitable activities and locations. As part of this
ongoing process, the Debtors have determined that they currently
possess certain obsolete, excess or burdensome assets, including
various outdated equipment parts, equipment in need of further
repair, emission credits or allowances, real property, other
products, fixtures, and other items no longer used or necessary
for their operations.
Given the small monetary value of the De Minimis Assets relative
to the magnitude of the Debtors' overall operations, it would be
an inefficient use of the Debtors' resources to seek the Court's
approval each and every time the Debtors have an opportunity to
sell or transfer the assets.
Mr. Cantor notes that the Debtors' ability to sell, transfer or
abandon De Minimis or Non-Debtor Assets without having to ask the
Court's permission, will allow the Debtors' management to focus
on the restructuring process, as well as permit them to react
promptly to the business needs of their non-Debtor subsidiaries.
Sale/Transfer Procedures
With regard to sales or transfers of the De Minimis Assets with a
selling price equal to or less than $1,000,000, the Debtors will
consummate the transaction without further Court order or notice
to any party other than the Official Committee of Unsecured
Creditors. Any transactions will be free and clear of all Liens,
with the Liens attaching only to the sale or transfer proceeds
with the same validity, extent and priority as had attached to
the De Minimis Assets immediately prior to the transaction.
With regard to sales or transfers of the De Minimis Assets with a
selling price greater than $1,000,000 and up to or equal to
$15,000,000, the Debtors will give parties-in-interest
opportunity to object to a transaction.
If no written objections are filed within 10 days of the date of
notice, the Debtors will immediately consummate the sale or
transfer. If a written objection is timely filed that cannot be
resolved, the relevant De Minimis Asset will only be sold or
transferred upon further Court order or resolution of the
objection by the parties involved.
Abandonment Procedures
To the extent that the Debtors are unable to identify a
prospective buyer of an asset, the Debtors will abandon the asset
pursuant to Section 554(a) of the Bankruptcy Code. The inability
to consummate a commercially acceptable sale or transfer of the
De Minimis Assets would indicate that the Assets have no
meaningful monetary value to the estates.
Disposition of Non-Debtor Assets
Mr. Cantor also relates that the Debtors have numerous ownership
interests in many gas-fired power generation and cogeneration
facilities, pipelines, geothermal steam fields and geothermal
power generation facilities worldwide, many of which are non-
Debtors. While the Non-Debtor Assets are outside the scope of
their estates' property, there are many instances when the
Debtors are either sole or majority shareholders in a non-Debtor
entity. In these cases, the Debtors may be required, by outside
third parties seeking to purchase the Non-Debtor Assets, to
provide the requisite shareholder consent or approval before the
transaction can be finalized. Thus, the Debtors want the
authority to transfer the Non-Debtor assets without need for
Court approval.
The Debtors will give written notice of a sale or transfer
detailing the non-Debtor subsidiary involved, the assets being
sold and the consideration to parties-in-interest at least 10
days prior to closing the sale or effectuating the transfer.
If no written objections are filed within 10 days of the date of
notice, the Debtors will immediately consummate the transaction.
If a written objection is timely filed that cannot be resolved,
the Debtors will ask the Court to find under Sections 541(a)(1)
and 363(b)(1), whether the sale or transfer of a Non-Debtor Asset
requires the Court's approval.
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. Michael S. Stamer, Esq., at Akin
Gump Strauss Hauer & Feld LLP, represents the Official Committee
of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities. (Calpine Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
CARDTRONICS INC: Equity Deficit Swells 24x to $50 Mil. at Dec. 31
-----------------------------------------------------------------
Cardtronics, Inc., disclosed its financial results for the quarter
and year ended December 31, 2005.
Fourth Quarter Results
For the fourth quarter of 2005, revenues totaled $69.8 million,
representing a 12.6% increase over the $62.0 million in revenues
recorded during the fourth quarter of 2004. The Company incurred
a net loss for the fourth quarter of 2005 of approximately
$0.9 million, compared to net income of approximately $1.5 million
for the same period in 2004. The year-over-year increase in
revenues was primarily due to a number of acquisitions consummated
during 2005, including the BAS Communications, Inc. ATM portfolio
in March 2005, the Neo Concepts, Inc. ATM portfolio in April
2005, and Bank Machine Limited in the United Kingdom in May 2005.
The decrease in net income was primarily due to the additional
interest, depreciation and amortization expense amounts associated
with the aforementioned acquisitions, higher selling, general and
administrative costs resulting from the Company's growth, higher
vault cash rental costs due to rising interest rates, and the
impact of replacing lower-cost bank debt with higher-cost senior
subordinated notes as we put a more permanent capital structure in
place. The accelerated roll out of ATMs in Walgreens and CVS
locations throughout the United States during 2005 also continued
to negatively impact the Company's current period results, as such
machines are still in the process of ramping to profitable
transaction levels.
Earnings before interest, taxes, depreciation and amortization
totaled $11.4 million for the fourth quarter of 2005, representing
a 37.3% increase over the $8.3 million in EBITDA recorded during
the fourth quarter of 2004. Adjusted EBITDA, which represents
EBITDA adjusted for the items described in the tables included in
this release and as provided for by the Company's bank credit
facility, totaled $11.9 million for the fourth quarter of 2005,
representing a 15.5% increase over the $10.3 million in Adjusted
EBITDA for the same period in 2004. The increases in EBITDA and
Adjusted EBITDA were primarily due to the year-over-year revenue
growth resulting primarily from the Company's various acquisitions
during the past year and by continued growth in the Company's bank
and network branding revenues, partially offset by cost increases
in certain areas, including vault cash rental and SG&A costs.
"We are pleased with our growth in revenues and EBITDA and the
progress we made during the year on our key strategic
initiatives," remarked Jack Antonini, Chief Executive Officer of
Cardtronics. "We believe that the investments we've made and
continue to make in our bank and network branding initiatives,
including the accelerated roll out of ATMs in key domestic retail
locations, our acquisition of the Allpoint surcharge-free network,
and the signing of the MasterCard surcharge-free alliance, provide
a solid platform for future growth as financial institutions of
all sizes look for convenient and cost-effective ways to attract
and retain customers."
Full Year Results
For the year ended December 31, 2005, revenues totaled
$269.0 million, representing an increase of 39.5% over the
$192.9 million in revenues recorded during year ended Dec. 31,
2004. Net income for the year ended December 31, 2005, totaled
$0.9 million, compared to $4.6 million for the same period in
2004. The year-over-year increase in revenues was due primarily
to the full year effect of the E-TRADE ATM portfolio acquisition
consummated in June 2004, and the additional acquisitions
consummated during 2005, as previously discussed. The year-over-
year decrease in net income was largely due to the additional
interest, depreciation and amortization expense amounts associated
with the aforementioned acquisitions, higher selling, general and
administrative costs, the continuing impact of the accelerated
Walgreens and CVS ATM roll outs, and the higher cost of debt.
EBITDA totaled $43.5 million for year ended December 31, 2005,
representing a 60.5% increase over the $27.1 million in EBITDA
recorded during the same period in 2004. Adjusted EBITDA totaled
$45.2 million for the year ended December 31, 2005, representing a
34.9% increase over the $33.5 million in Adjusted EBITDA for the
same period in 2004. As was the case with the quarterly results,
the increases in EBITDA and Adjusted EBITDA were driven by the
Company's recent acquisitions and, to a lesser degree, increased
revenues associated with the Company's bank and network branding
initiatives.
Headquartered in Houston, Texas, Cardtronics Inc. --
http://www.cardtronics.com/-- is the world's largest
owner/operator of ATMs with a nationwide U.S. network of more than
26,000 locations operating in every major market and in all 50
states as well as over 1,000 locations throughout the UK. Major
merchant-clients include A&P(R), Albertson's(R), Amerada Hess(R),
Barnes & Noble(R) College Bookstores, BP(R) Amoco, Chevron(R),
Costco(R), CVS(R)/pharmacy, ExxonMobil(R), Duane Reade(R), Rite
Aid(R), SSP/Circle K(R), Sunoco(R), Target(R) and Walgreens(R).
Cardtronics also works closely with financial institutions across
the U.S. to brand ATMs in these major merchants to provide
convenient access for their customers and to preserve and expand
their markets.
As of December 31, 2005, the Company's equity deficit widened to
$50,465,000 from a $2,164,000 deficit at December 31, 2004.
CERVANTES ORCHARDS: U.S. Trustee Wants Case Dismissed or Converted
------------------------------------------------------------------
Ilene J. Lashinsky, the U.S. Trustee for Region 18, asks the
Honorable John A. Rossmeissl of the U.S. Bankruptcy Court for the
Eastern District of Washington to dismiss the chapter 11 case of
Cervantes Orchards and Vineyards LLC or convert it to a chapter 7
liquidation proceeding.
Gary W. Dyer, Esq., the U.S. Trustee's attorney in Spokane,
Washington, tells the Court that the Debtor has failed to:
-- file monthly operating reports as required by Local
Bankruptcy Rule 3016-1; and
-- pay the U.S. Trustee's fees as required under Section
1930(a)(6) Judiciary Procedures Law.
Headquartered in Sunnyside, Washington, Cervantes Orchards and
Vineyards LLC filed for chapter 11 protection on Aug. 19, 2005
(Bankr. E.D. Wash. Case No. 05-06600). R. Bruce Johnston, Esq.,
at Law Offices of R. Bruce Johnston represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed estimated assets of $10 million to
$50 million and estimated debts of $1 million to $10 million.
CHARLES RIVER: Moody's Assigns Ba1 Ratings to Credit Facilities
---------------------------------------------------------------
Moody's Investors Service assigned Ba1 ratings to new credit
facilities of subsidiaries of Charles River Laboratories
International, Inc., which are guaranteed by Charles River.
Moody's also affirmed Charles River's Ba1 Corporate Family Rating,
the Ba1 rating on its existing credit facilities, and the
Speculative Grade Liquidity Rating of SGL-1. The rating outlook
for the company is stable.
These rating actions occurred:
Affirmed Ratings of Charles River Laboratories International,
Inc.:
* $150 Million Revolving Credit Facility -- Ba1
* $400 Million Term Loan A -- Ba1
* Corporate Family Rating -- Ba1
* Speculative Grade Liquidity Rating -- SGL-1
Assigned Ratings to CRL Preclinical Services Montreal:
* $10 Million Revolving Credit Facility (guaranteed by Charles
River Laboratories International, Inc.) -- Ba1
* $65 Million Term Loan (guaranteed by Charles River
Laboratories International, Inc.) -- Ba1
Assigned Ratings to CRL Preclinical Services Edinburgh and CRL
Clinical Services Ltd:
* $10 Million Revolving Credit Facility (guaranteed by Charles
River Laboratories International, Inc.) -- Ba1
* $25 Million Term Loan (guaranteed by Charles River
Laboratories International, Inc.) -- Ba1
Charles River's ratings reflect its dominant position in the
research models industry and pre-clinical toxicology testing, as
well as the continued expansion of operating cash flow over the
past few years. Charles River maintains a strong liquidity
position and benefits from a relatively conservative policy on
leverage as well as its diverse customer base, products and
services, geographic locations and revenues.
Moody's notes that due to the company's large and stable client
base, no one client accounts for more than 5% of revenues. The
diversity of the company's client base, coupled with the fact that
the company's products and services are essential to the drug
discovery and development process and are mandated by law,
contribute to the stability of revenues and cash flow.
The ratings also consider these favorable industry trends:
-- First, there is a large and growing market for global
research and development as well as an increase in clinical
testing based on more compounds and additional tests per
compound being performed due to regulatory concerns.
-- Second, a higher portion of the research budget is being
outsourced to clinical research organizations such as
Charles River due to increased financial incentive to cut
the time to bring a drug to market.
-- Third, Charles River benefits from the lack of excess
research capacity at pharmaceutical companies and the
significant increase in the budget of biotechnology
companies that are even more prone to outsource because of
the limited resources, capacity and expertise.
Charles River and other Clinical Research Organizations enable
firms to develop more drug candidates with the added expense of
additional facilities, equipment and labor. Use of CROs allows
firms to get drugs approved more quickly, while reducing costs.
Moody's anticipates that the reduction in the number of vendors
that the bigger pharmaceutical companies use should benefit
Charles River at the expense of smaller, regional players in the
industry.
The ratings also reflect Charles River's relatively conservative
policy on leverage. In particular, through repayments of existing
debt and the conversion of its convertible notes, outstanding debt
has declined from $686 million at the end of 2004 to $296 million
at the end of 2005. Further, the company has successfully
integrated Inveresk, has realized cost synergies in excess of $10
million, continued to grow the pre-clinical toxicology business
and has met the initial projections established at the time of the
merger.
Although Charles River has reduced debt significantly and has
successfully executed on the Inveresk merger, proving it can run a
much larger organization, the ratings are constrained by the
company's acquisitive acquisition strategy, the implementation of
a recent $100 million stock buy back program, the risks of
managing operations outside of the Americas, and the significant
acceleration in capital spending in comparison to the past few
years. Even though operating cash flow has expanded from $123
million in 2003 to $237 million in 2005, free cash flow has only
increased from $85 million to $137 million as capital spending has
increased from $33 million to $97 million in the same period.
Moody's expects operating cash flow to increase to a range of $260
to $270 million in 2006, but free cash flow is expected to drop to
a range of $75 to $80 million, below 2003 levels, as capital
spending will ramp up to $175 to $200 million. Moody's notes that
the majority of the capital spending is related to the expansion
of pre-clinical capacity and expansion in the research models
segment for production and preconditioning services. The
expansion of the pre-clinical capacity is meant to accommodate
increasing demand for outsourced services from clients and
prospective clients, and entails the building of two new plants
between 2006 and 2007 along with smaller expansions at several
existing facilities during 2006. Moody's also expects the company
to remain committed to its existing share buyback program of a
$100 million.
As a major provider of research models to the pharmaceutical and
biotechnology industries, Charles River faces the risk that
contamination in the animal population could damage existing
inventory and tarnish the reputation for contaminant-free
production. Research models must be free of known contaminants,
such as viruses and bacteria, in order to preserve the quality and
consistency of research results. Any contamination of the animal
population, would result in inventory losses, clean up and start-
up costs, customer credits for prior shipments and the loss of
customer orders. Research model providers also face negative
attention from specialist interest groups and have even
encountered public demonstrations in the U.K. In order to prevent
vandalism and to ensure the safety of its facilities, Charles
River has to spend a significant amount of money on security.
The ratings also consider the poor positioning of Charles River's
existing clinical business. The clinical business has a limited
presence in the U.S. markets, lacks scale and competes against
players with more significant size and diversity of services and
customers. Moody's is concerned that Charles River will need to
make additional acquisitions if it intends to continue to offer
clinical business. In addition, the clinical business has lower
margins compared to the core Research Models and Pre-clinical
segments, and it also has higher risk and less stability.
As one of the larger clinical research organization, the company
faces the following industry risks: consolidation of its customer
base which could result in the cancellation or delay in business;
the renegotiation of existing contracts as the firms have greater
buying power or the risk that they could perform the services in-
house; anemic growth in the National Institute of Health budget,
which affects academic and other non-commercial customers; and a
potential slower rate of research spending as the pharmaceutical
firms, which account for 80% of total spending, face increased
competition and the loss of major drugs to patent expirations, and
have a weaker pipeline.
While the biotechnology firms are growing their research budgets
more heavily than the pharmaceutical firms, biotechnology funding
is heavily dependant on venture capital, private equity and
initial public offerings, which can be quite cyclical and
volatile. Lastly, all clinical research organizations encounter
the risk of cancellation of contracts with little or no notice.
The ratings are also constrained by several near-term operating
challenges. First, the transgenic business is expected to
continue to decline in 2006, after growing between 20% and 40%
from 2002 through 2004. Second, the interventional and surgical
services part of the pre-clinical business has been consolidated
due to softness in the demand for services related to drug eluting
stents. Third, the costs related to increased capacity will
negatively impact operating margins in the research models and
pre-clinical businesses.
While the company will realize revenue from these expansions in
2007 and beyond, Charles River will incur extra operating costs in
2006. In light of these issues, the company recorded a $10
million charge in the fourth quarter of 2005 for the consolidating
of facilities in the ISS business, a reduction in headcount,
particularly in the ISS, transgenic, and clinical business, and
the reallocation of resources to faster growing segments. In
essence, 2006 will be a transition year for Charles River.
The stable outlook incorporates Moody's assumption that revenue
should grow between 7% and 9% in 2006, reflecting 4% to 6% revenue
growth in the Research models segment and 10% to 12% revenue
growth in the pre-clinical and clinical segments. Operating
margins are expected to remain comparable to 2005 due to operating
efficiencies and cost savings from the fourth quarter 2005
restructuring plan offset by the impact of capacity expansion and
foreign exchange losses.
Further, the margins at the research models group is expected to
remain flat while margins at the pre-clinical and clinical group
should improve slightly. The fourth quarter 2005 restructuring
plan will result in a reduced headcount in transgenic,
interventional surgical services and clinical services. This
restructuring plan will contribute to Moody's expectation that
operating cash flow should expand from $237 million in 2005 to a
range of $260 million to $270 million in 2006.
Following the transition year of 2006, Moody's expects revenue
growth to return to a long-term range of 9% to 12% as the company
benefits from the capital spending in 2006. Higher revenue growth
should translate into expansion of operating cash flow and
margins.
As capital spending is expected to drop beyond 2006 peak levels of
$200 million to a range of $125 to $150 million, Moody's
anticipates that the level of free cash flow would rebound from
about $75 million in 2006 to about $175 million in 2007 and a
range of $225 million to $250 million in 2008.
After adjusting debt for leases, Moody's noted that adjusted
operating cash flow and free cash flow from operations to adjusted
debt increased from 19% and 14% in 2004 to 53% and 31%,
respectively, in 2005. While Moody's expects a slight improvement
in the ratio of adjusted operating cash flow to adjusted debt,
significantly higher capital spending will result in a decline in
the free cash flow to adjusted debt ratio to a range of 13% to 15%
in 2006, before rebounding in 2007.
The ratings could be upgraded if the company is able to sustain
adjusted free cash flow to adjusted debt metrics above 20% on a
sustained basis. The ratings would benefit if the company were
able to expand cash flow or reduce debt greater than Moody's
anticipates while limiting shareholder initiatives and the number
and size of acquisitions.
The ratings could be downgraded if the company pursues another
transforming acquisition of similar size to Inveresk and elects to
finance through a substantial increase in debt. Ratings could
also be affected negatively if there is a meaningful deceleration
in operating cash flow.
Effective Dec. 20, 2005, the company amended and restated its $550
million credit agreement, originally entered into on Oct. 15, 2004
and subsequently amended on May 6, 2005. The $550 million credit
agreement originally provided for a $400 million term loan
facility and a $150 million revolving facility. The Dec. 20, 2005
amendment and restatement to the credit agreement modifies certain
restrictive covenants and provides for a $65 million term loan
facility and a $10 million revolving facility for a Canadian
subsidiary and a $25 million term loan facility and a $10 million
revolving facility for two U.K. subsidiaries. Charles River used
the proceeds for the two term loans along with the repatriation of
cash from overseas to prepay $120 million of outstanding debt
under its existing $400 million term loan facility. Due to the
prepayment of debt along with prior prepayments and the conversion
of the convertible notes into equity, total outstanding debt
declined from $686 million at the end of 2004 to $296 million at
the end of 2005.
The assignment of the Ba1 rating to the Canadian senior secured
credit facility and the U.K. credit facility are at the same level
as the corporate family rating since all of the debt is guaranteed
by the parent and at the senior secured level. Further, the
Canadian and U.K. term loans and revolvers under the $660 million
credit agreement are repayable in full and are guaranteed by the
assets of its subsidiaries.
Moody's affirmed Charles River Laboratories International, Inc.'s
speculative grade liquidity rating of an SGL-1.
Charles River Laboratories International, Inc., headquartered
in Wilmington, Massachusetts, provides research tools and
integrated support services for drug and medical device discovery
and development. The company's three business segments are
Research Models and Services, which involves the commercial
production and sale of animal research models and associated
services; Pre-clinical Services, which involves the development
and safety testing of drug candidates; and Clinical Services,
which involves management of clinical drug trials. The company
operates facilities in 21 countries worldwide. The company
reported revenues of over $1.1 billion for the fiscal year
ended Dec. 31, 2005.
COMSYS IT: Posts $800,000 Net Loss for Quarter Ended January 1
--------------------------------------------------------------
COMSYS IT Partners, Inc. (NASDAQ:CITP) reported its results for
the fourth quarter of 2005 and year ended Jan. 1, 2006.
Fourth Quarter and Full Year 2005 Financial Results
Revenue for the fourth quarter of 2005 was $171.3 million, up 5.2%
from $162.8 million in the fourth quarter of 2004 and above the
Company's guidance range of $156 million to $160 million for the
quarter.
Fourth quarter revenue included $3.6 million of revenue from the
company acquired by COMSYS on Oct. 31, 2005. The Company reported
a net loss of $800,000 for the fourth quarter.
Net loss in the fourth quarter included a loss on early
extinguishment of debt of $2.2 million, expenses of $1.0 million
related to the offering of senior notes that the Company withdrew
on Dec. 5, 2005, and a portion of the provision for income taxes
of $0.6 million related to the utilization of acquired net
deferred tax assets from Venturi.
Excluding the loss on early extinguishment of debt and the tax
provision related to utilization of acquired net deferred tax
assets from Venturi, net income for the fourth quarter of 2005 was
$2.0 million.
Net loss for the fourth quarter of 2004 was $7.7 million. The
Company remains in a loss position for income tax purposes and
does not have significant current income taxes payable.
Revenue for fiscal 2005 was $661.7 million compared with
$437.0 million for fiscal 2004. Revenue for fiscal 2005 was 3%
higher than combined pro forma revenue of $639.4 million in 2004.
Net income for fiscal 2005 was $2.1 million, and included $4.8
million of restructuring and integration expenses, $2.0 million of
expenses related to withdrawn capital offerings and $2.2 million
of losses related to the early extinguishment of debt.
Net loss for fiscal 2004 was $55.2 million, which included $10.3
million of restructuring and integration expenses, and $3 million
of loss on early extinguishment of debt.
Other Developments
The Company closed a $230 million credit facility on Dec. 14,
2005, which consisted of:
-- a $120 million senior secured revolving credit facility,
-- a $10 million senior secured term loan, and
-- a $100 million junior secured term loan.
The proceeds were used, in part, to repay the Company's existing
long-term debt. Excess availability under the revolver, which was
approximately $76 million as of Jan. 1, 2006, will be used for
ongoing working capital requirements, strategic acquisitions and
general corporate purposes. In connection with the closing of
this credit facility, the Company withdrew its previously
announced offering of $150 million of senior notes.
The Company closed a public offering of 3,000,000 shares of its
common stock at $11.00 per share on Dec. 28, 2005. The net
proceeds from this offering were used primarily to redeem all of
the Company's outstanding 15% Series A-1 Preferred Stock.
"Fiscal 2005 was a transitional year for COMSYS as we completed
our merger integration efforts and worked all year with the
commercial and capital markets in our refinancing efforts before
closing two separate refinancing transactions in December.
Additionally, we completed an acquisition that we previously
commented on in December," Larry L. Enterline, COMSYS Chief
Executive Officer said.
"With all of these corporate activities behind us, and some
balance sheet flexibility restored, we intend to focus on three
important priorities in 2006," Mr. Enterline added. "First, we
are focusing on sales and recruiting productivity and other
initiatives designed to improve operational efficiency throughout
our field organization and promote organic growth. Second, we
will continue to work on the balance sheet, with a view toward
improving working capital management and maximizing financial
flexibility. Third, we will continue to evaluate selected
acquisitions, including acquisitions in the higher-growth, higher-
margin IT solutions practices consistent with our strategy to
supplement our existing business in these areas."
"I have evaluated the Company's strategic objectives and am happy
with the direction in which we are currently pointed. I would
especially like to thank our operations leaders and their staffs
for their efforts during 2005. Despite the pressures on our
organization caused by our corporate activities and the merger
integration, our operations strengthened in the latter half of the
year, and we have entered 2006 with some cautious optimism that we
are positioned for growth," Mr. Enterline concluded.
"We made good progress in our operations in the fourth quarter of
2005," Joseph C. Tusa, Jr., Senior Vice President and Chief
Financial Officer said. "As expected, we did not incur any merger
integration expenses in the fourth quarter of 2005."
"Our billable headcount continued to increase in the fourth
quarter, and we had approximately 5,000 consultants at the end of
2005, including the 150 consultants we added with the Pure
Solutions acquisition. Our revenue in the fourth quarter of 2005,
excluding revenue acquired in the fourth quarter, was $167.7
million, up 3% sequentially from the third quarter's $163.2
million notwithstanding two fewer billing days in the fourth
quarter. Bill rates remained stable in the fourth quarter of 2005
and gross margins were strong at approximately 24% despite the
normal seasonal pressures caused by the holidays at the end of the
year," Mr. Tusa continued.
As a result of the merger and the sale of Venturi Partners'
commercial staffing business on Sept. 30, 2004, management
believes that the most relevant financial information to the
Company's current stockholders for periods ended prior to
Sept. 30, 2004, is certain non-GAAP financial measures for the
information technology businesses of Venturi Partners, Inc., and
COMSYS Holding, Inc., on a combined basis. One of the non-GAAP
financial measures provided in this earnings release is combined
pro forma revenue.
For the fourth quarter of 2005, the non-GAAP measure of net income
excluding loss on early extinguishment of debt and certain income
tax expense is also provided. A reconciliation of these non-GAAP
financial measures to the financial measures recognized under
generally accepted accounting principles in the United States is
provided in the attached tables.
First Quarter 2006 Financial Guidance
For the first quarter of 2006, the Company expects to report
revenue in a range of $170 million to $175 million. Additionally,
the Company expects to report net income in the range of
$0.5 million to $1.2 million. These estimated net income amounts
include $1.8 million of severance related charges, $0.8 million of
stock-based compensation expense, and up to $0.2 million of income
tax expense. The estimated stock-based compensation expense
amount considers the provisions of SFAS No. 123 (revised 2004),
Share-Based Payment, which the Company is required to adopt in the
first quarter of 2006.
COMSYS IT Partners, Inc. (NASDAQ:CITP) -- http://www.comsys.com/
-- is an information technology services company with 42 offices
across the U.S. and an office in the U.K. Leveraging more than 30
years of experience, COMSYS has enhanced its core competency of IT
staffing services by creating client-centric, cost-effective
information system solutions. COMSYS' service offerings include
contingent staff augmentation of IT professionals, permanent
recruiting and placement, vendor management and project solutions,
including network design and management, offshore development,
customized software development and maintenance, software
globalization/localization translation services and implementation
and upgrade services for SAS, business intelligence and various
ERP packages. COMSYS primarily serves clients in the financial
services/insurance, telecommunications, energy, pharmaceutical and
healthcare industries and government agencies.
* * *
As reported in the Troubled Company Reporter on Sept. 15, 2005,
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to COMSYS IT Partners Inc. and its 'B-' rating to
the company's privately placed, Rule 144A $150 million senior
unsecured notes due 2013. The outlook is negative.
CORNELL TRADING: Intends to Shutdown Eight Stores Next Week
-----------------------------------------------------------
Dan McLean, a Burlington Free Press staff writer, reports that
Cornell Trading, Inc., plans to close eight stores next week.
Cornell closed ten shops last month.
Spokeswoman Chris Powell told Mr. McLean in an interview that the
company's Burlington location would remain open, which is one of
the company's top 10 performing stores.
The 18 locations being closed are "less than lackluster stores"
and are generally located in malls, she said. The stores that
will be closed have been notified.
According to Ms. Powell, the store closures will result in 50 to
65 loss jobs across the country. In January, Cornell Trading had
roughly 750 employees, 39% of whom worked full time.
The list of stores closed and targeted for closure was not
immediately available.
The Debtor separated its wholesale and retail business groups as
independent operating units in 2004 -- creating product-sourcing
and supply issues that led to higher operating costs.
Headquartered in Williston, Vermont, Cornell Trading, Inc. --
http://www.aprilcornell.com/-- sells women's and children's
apparel including dresses, skirts, blouses, and sleepwear.
Cornell also offers books and housewares like table linens,
placemats and napkins, bedding, and dolls and stuffed animals.
The Company filed for chapter 11 protection on January 4, 2006
(Bankr. D. Mass. Case No. 06-10017). Christopher J. Panos, Esq.,
at Craig & Macauley, P.C., represents the Debtor in its
restructuring efforts. When the Debtor filed for protection
from its creditors, it listed estimated debts and assets between
$10 million to $50 million.
CREDIT SUISSE: S&P Lowers Two Certificate Class Ratings to D
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on six
classes of commercial mortgage pass-through certificates from
Credit Suisse First Boston Mortgage Securities Corp.'s series
2001-FL2. Concurrently, the ratings on seven classes are
affirmed.
The lowered rating on class H reflects the susceptibility of the
class to interest shortfalls. The lowered ratings on classes J,
K, L, M, and N reflect the expectation of such interest shortfalls
on a recurring basis. These shortfalls are primarily due to the
non-recoverability determination made on the largest asset in the
trust as of February 2006. The affirmations reflect the
expectation that the classes will continue receiving timely
interest payments as well as the full principal repayment upon the
liquidation of the remaining assets in the trust.
As of Feb. 17, 2006, the trust collateral consisted of two REO
assets with an aggregate balance of $37.2 million and a 60-day
plus delinquent loan with a $21.0 million balance that has been
transferred to the special servicer. At issuance, the trust
collateral totaled $619.1 million and consisted of 31 whole loans
and one pari passu senior participation interest in a whole loan.
All of these loans were interest-only and indexed to one-month
LIBOR.
The largest asset in the trust consists of an unflagged, 394-room,
full-service hotel located in Lake Buena Vista, Florida. These
improvements are subject to a ground lease that expires in
September 2049. This asset became REO in September 2005 and
sustained extensive damage from hurricanes Charley, Frances, and
Ivan, which forced it to close. According to the special
servicer, Archon Group L.P., approximately 249 rooms re-opened in
January 2006, with the remaining rooms re-opening by February
2006. This asset has an unpaid principal balance of $35.0 million
and a total exposure of $50.4 million (which includes
approximately $9.5 million in renovation costs).
The master servicer, ORIX Capital Markets LLC, will no longer
advance interest with respect to this asset and that cash flow
generated by the property will be used to repay advances. Archon
informed Standard & Poor's that it intends to liquidate the
property only after the property's operations have been
stabilized, and this liquidation is not expected to occur in the
short-term future. Consequently, it is possible that this asset
will be the last remaining asset in the trust. If this occurs, it
is probable that the outstanding certificates will stop receiving
interest payments. Standard & Poor's anticipates a significant
loss upon the eventual disposition of this asset.
The second-largest asset in the trust consists of a 60-plus days
delinquent loan secured by a 178,000-sq.-ft. office property
located in Dedham, Massachusetts, with a $21.0 million balance.
This loan was transferred to the special servicer in September
2005 after the borrower requested a second loan extension. The
loan originally was due to mature in January 2004 and had no
extension options; however, the borrower was granted a two-year
extension after meeting certain requirements. The property's
rental income has declined consistently since 2002 and several of
its larger tenants, whose rents are higher than market rents, have
upcoming lease expirations. Standard & Poor's believes that
losses upon the liquidation of this asset could be substantial.
The remaining asset in the trust is a 48-unit, multifamily
property located in Clarkson, Georgia, with a $2.2 million
principal balance. This asset is REO, under contract for sale,
and is expected to be liquidated in the near future with a
moderate loss to the trust.
Standard & Poor's analysis included various loss projections on
the remaining assets in the pool, as well as liquidity scenarios
that were based on such projections. The analysis adequately
supports the lowered and affirmed ratings.
Ratings lowered:
Credit Suisse First Boston Mortgage Securities Corp.
Commercial mortgage pass-through certs series 2001-FL2
Rating
Class To From Credit Enhancement
----- -- ----- ------------------
H BB- BB+ 66.5%
J B- BB- 56.4%
K CCC B- 46.3%
L CCC- CCC+ 37.8%
M D CCC 27.7%
N D CCC- 24.3%
Ratings affirmed:
Credit Suisse First Boston Mortgage Securities Corp.
Commercial mortgage pass-through certs series 2001-FL2
Class Rating Credit Enhancement
----- ------ ------------------
G BBB 88.4
A-X1 AAA N.A.
A-X2 AAA N.A.
A-Y1 AAA N.A.
A-Y2 AAA N.A.
A-Y3 AAA N.A.
A-Y4 AAA N.A.
N.A. - not applicable.
CRESCENT REAL: Earns $14.5 Million in Fourth Quarter
----------------------------------------------------
Crescent Real Estate Equities Company (NYSE:CEI) reported results
for the fourth quarter of 2005.
Net income for the three months ended Dec. 31, 2005, was
$14.5 million. These compare to net income of $202.1 million for
the three months ended Dec. 31, 2004. Net income for the year
ended Dec. 31, 2005, was $63.3 million. These compare to net
income of $141.1 million for the year ended Dec. 31, 2004.
The decrease in net income from 2004 to 2005 is primarily the
result of a $266 million gain recorded in the fourth quarter 2004
that was generated from the sale of joint-venture interests in
certain of Crescent's existing office assets.
Funds from operations -- FFO -- adjusted to exclude impairment
charges and debt extinguishment charges related to the sale of
real estate assets was $61.5 million and equivalent unit, for the
three months ended Dec. 31, 2005, compared to $53.5 million and
equivalent unit, for the three months ended Dec. 31, 2004.
FFO, as adjusted, for the year ended Dec. 31, 2005, was
$146.1 million and equivalent unit, compared to $143.2 million and
equivalent unit, for the year ended Dec. 31, 2004.
Crescent provides this calculation of FFO, as adjusted, because
management utilizes it in making operating decisions and assessing
performance, and to assist investors in assessing Crescent's
operating performance.
Funds from operations calculated in accordance with the NAREIT
definition was $60.5 million and equivalent unit, for the three
months ended Dec. 31, 2005, compared to $11.9 million and
equivalent unit, for the three months ended Dec. 31, 2004.
FFO, for the year ended Dec. 31, 2005, was $144.3 million and
equivalent unit, compared to $95.7 million and equivalent unit,
for the year ended Dec. 31, 2004.
According to John C. Goff, vice chairman and chief executive
officer, "2005 can best be characterized as simply 'our strategy
in action. We achieved a 17.9% total return for our shareholders
this year, exceeding the NAREIT All Equity Index of 12.2%. We
continue to focus on our office investment management business and
are seeing improved results from strengthening occupancy levels in
our office markets. The quarter was highlighted by the sale of 5
Houston Center, a record per-square-foot sale in Houston, which
illustrates the potential value of the promote structure in our
joint-venture partnerships. This sale resulted in FFO of
approximately $27 million, of which almost $14 million was from
our promoted interest, and a 47% internal rate of return to
Crescent. Overall, the partnership recorded a $68 million gain,
while holding 5 Houston Center for a little more than three
years."
Dividends
On Jan. 13, 2006, Crescent announced that its Board of Trust
Managers had declared cash dividends of $0.375 per share for its
Common Shares, $0.421875 per share for its Series A Convertible
Preferred Shares, and $0.59375 per share for its Series B
Redeemable Preferred Shares. The dividends were payable Feb. 15,
2006, to shareholders of record on Jan. 31, 2006.
Office Segment Operating Results
Crescent owned and managed, through its subsidiaries and joint
ventures, 30.7 million square feet at Dec. 31, 2005, including
14.3 million square feet of office properties in unconsolidated
joint ventures and 0.4 million square feet in consolidated joint
ventures.
Denny Alberts, president and chief operating officer, commented,
"Our office portfolio made considerable improvement in 2005. We
had overall positive net absorption, and our leased occupancy
reached 90.8% at Dec. 31, 2005, exceeding our guidance of 90%.
While we had a sizeable portion of our portfolio expiring in 2005,
this was also one of our best leasing years on record, leasing
5.7 million square feet. For 2006, we anticipate modest growth in
occupancy and rental rates as demand continues to improve in our
markets. We expect to be 91% to 92% leased for our stabilized
office portfolio at the end of 2006.
"For 2006, we expect 3.2 million gross square feet to expire, a
much smaller amount than 2005's expirations of 5.2 million gross
square feet. To date, we have addressed 76% of 2006 gross
expirations -- 52% by signed leases and 24% by leases in
negotiation."
Same-store NOI
Office property same-store net operating income declined 2.4% for
the three months ended Dec. 31, 2005, from the same period in 2004
for the 26.7 million square feet of office property space owned
during both periods. Average economic occupancy for these same-
store properties for the three months ended Dec. 31, 2005, was
87.8% compared to 87.1% for the same period in 2004.
Office property same-store net operating income declined 1.5% for
the twelve months ended Dec. 31, 2005, from the same period in
2004 for the 26.7 million square feet of office property space
owned during both periods. Average economic occupancy for these
same-store properties for the twelve months ended Dec. 31, 2005,
was 87.3% compared to 86.3% for the same period in 2004.
Leasing Activity
Crescent leased 1.9 million net rentable square feet during the
three months ended Dec. 31, 2005, of which 752,000 square feet
were renewed or re-leased. The weighted average full service
rental rate (which includes expense reimbursements) increased 5%
from the expiring rates for the leases of the renewed or re-leased
space. All of these leases have commenced or will commence within
the next twelve months. Tenant improvements related to these
leases were $2.12 per square foot per year, and leasing costs were
$1.35 per square foot per year.
Crescent leased 5.7 million net rentable square feet during the
twelve months ended Dec. 31, 2005, of which 2.8 million square
feet were renewed or re-leased. The weighted average full service
rental rate remained flat as compared to the expiring rates for
the leases of the renewed or re-leased space. All of these leases
have commenced or will commence within the next twelve months.
Tenant improvements related to these leases were $1.94 per square
foot per year, and leasing costs were $1.20 per square foot per
year.
Lease Termination Fees
Crescent received $4.3 million and $12.2 million of lease
termination fees during the three and twelve months ended Dec. 31,
2005, respectively. These compare to $1.1 million and
$9.7 million of lease termination fees received during the three
and twelve months ended Dec. 31, 2004, respectively. Crescent's
policy is to exclude lease termination fees from its same-store
NOI calculation.
Dispositions
On Dec. 20, 2005, a partnership of Crescent and a pension fund
investor advised by an affiliate of JP Morgan Asset Management
sold 5 Houston Center, a 580,875 square-foot Class A office
property developed by Crescent in 2002 and located in downtown
Houston. The property was sold for gross proceeds of
$166 million, or $286 per square foot. As a result of Crescent
developing 5 Houston Center, Crescent has recognized its
$26.9 million share of the gain in FFO.
On Feb. 17, 2006, Crescent sold Waterside Commons, a 458,906
square-foot Class A office property located in the Las Colinas
submarket of Dallas. The property was sold for gross proceeds of
$25.3 million, or $55 per square foot. In expectation of the
sale, Crescent recorded $1 million impairment charge in the fourth
quarter 2005.
Acquisitions
On Jan. 23, 2006, Crescent purchased Financial Plaza, a 309,983
square-foot Class A office property located in the
Mesa/Superstition submarket of Phoenix, AZ. Constructed in 1986,
Financial Plaza is currently 90% leased. Crescent acquired
Financial Plaza for $55 million, or $178 per square foot.
Resort Residential Development Segment
Operating Results
Crescent's overall resort residential investments generated
$22.4 million and $43.9 million in FFO for the three and twelve
months ended Dec. 31, 2005, respectively. This compares to
$16.1 million and $31.2 million in FFO generated for the three and
twelve months ended Dec. 31, 2004, respectively.
According to Denny Alberts, "Beginning in late November, we closed
on the sale of its first units at the Village at Northstar in
Tahoe, California. These unit sales, as well as the confirmed
success of lot sales in Gray's Crossing in Tahoe, combined for a
total contribution of $19.3 million in FFO from our Tahoe
development."
Resort/Hotel Segment Operating Results
Crescent reports operating statistics for its five luxury resorts
and spas and three upscale business-class hotels assuming 100%
ownership without adjusting for joint-venture interests.
Same-Store NOI
For the three months ended Dec. 31, 2005, Crescent's overall
resort/hotel segment generated same-store NOI of $12.2 million,
which is a 43% increase from $8.5 million generated for the same
period in 2004. For the year ended Dec. 31, 2005, Crescent's
overall resort/hotel segment generated same-store NOI of
$50.4 million, which is a 36% increase from $37.0 million
generated for the same period in 2004.
Operating Statistics
The average daily rate increased 6%, and revenue per available
room increased 13% for the three months ended Dec. 31, 2005,
compared to the same period in 2004. Weighted average occupancy
was 71% for the three months ended Dec. 31, 2005, compared to 66%
for the three months ended Dec. 31, 2004.
The average daily rate increased 6%, and revenue per available
room increased 12% for the year ended Dec. 31, 2005, compared to
the same period in 2004. Weighted average occupancy was 73% for
the twelve months ended Dec. 31, 2005, compared to 69% for the
twelve months ended Dec. 31, 2004.
Denny Alberts commented, "2004 renovations at Sonoma Mission Inn
and Ventana Inn & Spa certainly contributed to our growth of
occupancy and rates over the last year. In addition, the overall
resort/hotel market is continually improving as demand increases,
and our luxury resorts and business-class hotels are benefiting
from economic expansion."
Temperature-Controlled Logistics Segment
Operating Results
Crescent's investment in temperature-controlled logistics
properties generated $7.0 million and $18.4 million in FFO for the
three and twelve months ended Dec. 31, 2005, respectively. This
compares to $18.2 million and $31.0 million of FFO generated for
the three and twelve months ended Dec. 31, 2004, respectively.
FFO in the prior year included $12.3 million gain recognized on
the sale of 20.7% of Crescent's interest in the temperature-
controlled logistics properties in November 2004. The sale
reduced Crescent's ownership from 40% to 31.7%. The reduction in
ownership and the gain recognized in the prior year are favorably
offset by continually improving operations at the properties.
Mezzanine Investments
During the quarter ended Dec. 31, 2005, Crescent invested in three
mezzanine loans totaling $60.7 million, which are secured by
ownership interests in office and hospitality properties. The
average yield was 11.28% at Dec. 31, 2005, and all loans float
with a spread over LIBOR. Crescent received origination fees on
two of the three loans.
Subsequent to Dec. 31, 2005, Crescent invested in a mezzanine loan
for $15.0 million, secured by ownership interests in six Florida
hotels. The current yield for the loan is 12.57%, which floats
with a spread over LIBOR. Crescent received an origination fee.
On Feb. 1, 2006, Crescent received $18.7 million, including
$1.2 million prepayment fees and $0.2 million accrued interest,
for the full repayment of a mezzanine investment secured by a New
York City office property.
Headquartered in Fort Worth, Texas, Crescent Real Estate Equities
Company (NYSE: CEI) -- http://www.crescent.com/-- is one of the
largest publicly held real estate investment trusts in the nation.
Through its subsidiaries and joint ventures, Crescent owns and
manages a portfolio of 75 premier office buildings totaling 31
million square feet located in select markets across the United
States, with major concentrations in Dallas, Houston, Austin,
Denver, Miami and Las Vegas. Crescent also makes strategic
investments in resort residential development, as well as
destination resorts, including Canyon Ranch(R).
* * *
As reported in the Troubled Company Reporter on July 2, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Crescent Real Estate Equities Co. and its operating
partnership, Crescent Real Estate Equities L.P., to 'BB-' from
'BB'. In addition, S&P cut the rating on the company's senior
unsecured notes to 'B' from 'B+', and the rating on the company's
preferred stock was lowered to 'B-' from 'B'. S&P revised its
outlook to stable from negative at that time.
EXTENDICARE HEALTH: Earns $57.8 Million of Net Income in 2005
-------------------------------------------------------------
Extendicare Health Services, Inc. reported net income from
continuing operations for 2005 of $57.8 million compared to
$76.5 million in 2004. The 2004 results included significant
one-time after-tax gains aggregating $21.8 million compared to
$2.5 million in 2005, which related to the valuation of interest
rate caps, disposal or impairment of assets and the tax benefit of
a prior year sale. Excluding these items, net income from
continuing operations was relatively unchanged at $55.3 million
compared to $54.7 million.
EHSI is a wholly owned subsidiary of Extendicare Inc. (TSX:EXE.MV
and EXE.SV; NYSE:EXE).
The Board of Directors of Extendicare Inc., the parent company of
EHSI, has appointed a committee of independent directors to review
and consider various structures and options that would provide
value to its shareholders. A sale or reorganization of all, or
part of Extendicare Inc., which may include EHSI are among the
alternatives being explored. Extendicare Inc. gives no assurance
that any such transaction will be completed in whole or in part.
Extendicare Inc. has appointed Lehman Brothers to be its advisor.
"EHSI achieved a fourth consecutive year of growth in earnings
before income taxes," said Mel Rhinelander, EHSI's Chairman and
Chief Executive Officer. "To position itself for the nine new
Medicare resource utilization groupings (RUGs) categories, the
Company has increased its recruiting efforts to attract
therapists, which resulted in higher wage and benefit costs in the
fourth quarter. The Company is optimistic that these expenses
incurred, as well as additional measures being put in place, will
contribute to improved results in 2006."
The October 1, 2005, 3.1% Medicare rate increase improved revenue
by approximately $2.1 million in the 2005 fourth quarter. EHSI's
average daily Medicare Part A rate, on a same-facility basis,
increased during the quarter by 5.3% to $363.33 from $345.13 in
the 2005 third quarter, and grew by 7.6% from the 2004 fourth
quarter rate of $337.76, reflecting an improvement in patient mix.
EHSI's performance for the month of January 2006 provides an early
indication that management's fourth quarter initiatives are
working. Though it only represents one month under the new RUGs
categories, EHSI's average daily Medicare rate for January 2006
was approximately $357, representing a decline of only $6 from the
2005 fourth quarter. As a result, the Company has been able to
offset a significant portion of the previously estimated $20 per
patient day Medicare rate decrease that took effect beginning in
2006.
EHSI's average daily census (ADC) of Medicare patients on a
same-facility basis increased 3.7% to 2,189 in the 2005 fourth
quarter compared to 2,111 in the 2004 fourth quarter, although it
declined from 2,210 in the 2005 third quarter. As a percent of
same-facility nursing home census, Medicare ADC was 17.6% in the
2005 fourth quarter compared to 16.9% in the 2004 fourth quarter.
For the year 2005, Medicare ADC on a same-facility basis was 2,302
compared to 2,093 for 2004, and represented 18.4% of nursing home
census, compared to 16.9%. During the 2005 fourth quarter,
nursing home occupancy on a same-facility basis declined modestly
to 92.6% from 92.7% in the 2004 fourth quarter, and from 92.8% in
the 2005 third quarter. EHSI has experienced growth in the first
month of 2006 in its nursing home ADC on a same-facility basis of
23, from the 2005 fourth quarter, in particular in the number of
Medicare patients served, which has improved by 125 ADC.
Assisted Living Concepts, Inc. (ALC) is continuing to perform
well. Since its acquisition on January 31, 2005, ALC contributed
revenue of $169.1 million and EBITDA of $37.3 million. For the
2005 fourth quarter, ALC contributed revenue of $46.6 million
and EBITDA of $10.0 million, which is a moderate decline over
the 2005 third quarter revenue of $46.8 million and EBITDA of
$10.7 million. The decline in performance was due to the start-up
costs of two new assisted living facilities, lower occupancy and
hurricane-related costs, partially offset by an increase in
revenue rates.
Discontinued Operations
Discontinued operations were represented by three owned and
operated nursing facilities and seven nursing facilities that were
leased to and operated by a third party. Six of these facilities
were sold in the 2005 third quarter, one was sold in the fourth
quarter, and the remaining three are held for sale. The loss from
discontinued operations, including gains and losses from disposal
or impairment, net of income taxes, was $0.5 million in the 2005
fourth quarter compared to a loss of $7.4 million in the 2004
fourth quarter. For the twelve months ended December 31, 2005,
the loss from discontinued operations was $5.8 million compared to
a loss of $8.8 million in the same 2004 period.
Extendicare Health Services, Inc. of Milwaukee, Wisconsin, is a
wholly owned subsidiary of Extendicare Inc., and is a major
provider of long-term care and related services in the United
States. Through its subsidiaries, Extendicare Inc. operates 439
long-term care facilities in the United States and Canada, with
capacity for 34,500 residents. As well, through its operations in
the United States, Extendicare offers medical specialty services
such as subacute care and rehabilitative therapy services, while
home health care services are provided in Canada. Extendicare
Inc. employs 37,600 people in North America.
* * *
As reported in the Troubled Company Reporter on Feb. 27, 2006,
Standard & Poor's Ratings Services revised its outlook on nursing
home and assisted-living facilities provider Extendicare Health
Services Inc. to negative from stable.
At the same time, Standard & Poor's affirmed the company's
existing ratings, including its 'BB-' corporate credit rating.
Total Extendicare debt outstanding as of Dec. 31, 2005, was
$519 million.
As reported in the Troubled Company Reporter on Jan. 6, 2006,
Moody's affirmed the ratings of Extendicare Health Services, Inc.
and assigned ratings of Ba2 to the $114 million senior secured
revolving credit facility and $86 million term loan facility under
the company's amended and restated credit agreement. The amended
facilities were primarily used to refinance advances under the old
$155 million revolver. The outlook for the ratings is stable.
Ratings assigned:
* $114 million senior secured revolving credit facility
due 2010, Ba2
* $86 million senior secured term loan facility due 2010, Ba2
Ratings affirmed:
* $150 million 9.5% senior notes due 2010, B1
* $125 million 6.875% senior subordinated notes due 2014, B2
* Corporate family rating, Ba3
Ratings withdrawn:
* $155 million senior secured revolvong credit facility
due 2009, Ba2
GMAC COMMERCIAL: Moody's Holds Low-B Ratings on Three Class Certs.
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of ten classes
and affirmed the ratings of seven classes of GMAC Commercial
Mortgage Securities, Inc., Series 2002-C1 Mortgage Pass-Through
Certificates:
* Class A-1, $101,123,495, Fixed, affirmed at Aaa
* Class A-2, $405,810,000, Fixed, affirmed at Aaa
* Class X-1, Notional, affirmed at Aaa
* Class X-2, Notional, affirmed at Aaa
* Class B, $29,290,000, Fixed, upgraded to Aaa from Aa2
* Class C, $9,763,000, Fixed, upgraded to Aaa from Aa3
* Class D, $15,977,000, Fixed, upgraded to Aa2 from A2
* Class E, $8,875,000, Fixed, upgraded to Aa3 from A3
* Class F, $12,426,000, Fixed, upgraded to A1 from Baa1
* Class G, $10,651,000, Fixed, upgraded to A3 from Baa2
* Class H, $8,876,000, WAC, upgraded to Baa1 from Baa3
* Class J, $14,201,000, Fixed, upgraded to Baa3 from Ba1
* Class K, $12,426,000, Fixed, upgraded to Ba1 from Ba2
* Class L, $5,326,000, Fixed, upgraded to Ba2 from Ba3
* Class M, $5,325,000, Fixed, affirmed at B1
* Class N, $7,988,000, Fixed, affirmed at B2
* Class O, $3,551,000, Fixed, affirmed at B3
As of the Feb. 15, 2006 distribution date, the transaction's
aggregate principal balance has decreased by approximately 6.1% to
$666.7 million from $710.1 million at securitization. The
Certificates are collateralized by 106 loans, ranging in size from
less than 1.0% to 4.8% of the pool, with the top ten loans
representing 27.5% of the pool. Fourteen loans, representing
16.7% of the pool, have defeased and are collateralized by U.S.
Government securities. The largest defeased loan is the Southlake
Town Square Loan, which is the second largest loan in the pool.
One loan has been liquidated from the pool, resulting in a
realized loss of approximately $11,000. One loan, representing
less than 1.0% of the pool, was transferred to special servicing
in January 2006. Moody's is not currently projecting a loss on
this loan due to the recent transfer. Forty loans, representing
33.9% of the pool, are on the master servicer's watchlist.
Moody's was provided with year-end 2004 operating results for
99.7% of the pool, excluding the defeased loans, and partial year
2005 operating results for 85.9% of the pool. Moody's weighted
average loan to value ratio is 87.2%, essentially the same as at
securitization. The upgrade of Classes B, C, D, E, F, G, H, J, K
and L is due to a high percentage of defeased loans, increased
credit support and stable overall pool performance.
The top three non-defeased loans represent 10.7% of the pool. The
largest loan is the 3301 South Norfolk Street Loan, which is
secured by a 1.0 million square foot office/warehouse complex
located in Seattle, Washington. The property serves as the
headquarters and grocery distribution facility for Associated
Grocers, Inc., under a lease expiring in September 2031. Moody's
LTV is 76.3%, compared to 79.3% at securitization.
The second largest loan is the Lakewood Shopping Plaza Loan, which
is secured by a 203,000 square foot retail property located in
Lakewood, New Jersey. The property is 87.0% occupied, compared to
99.7% at securitization. The largest tenants are ShopRite,
Staples and R&S Strauss. The property's financial performance has
been impacted by the decline in occupancy. Moody's LTV is 84.3%,
compared to 82.6% at securitization.
The third largest loan is the Boca Industrial Park Loan, which is
secured by six one-story industrial/flex buildings located in Boca
Raton, Florida. The buildings total 387,000 square feet. The
complex is 100.0% leased, compared to 91.0% at securitization.
The loan is currently on the master servicer's watchlist due to
concerns regarding Hurricane Wilma damage. Moody's LTV is 96.4%,
compared to 99.3% at securitization.
The pool's collateral is a mix of multifamily, retail, industrial
and self storage, office and mixed use, U.S. Government securities
and lodging. Thirteen loans, representing approximately 15.0% of
the pool, are secured by properties leased to single tenants. The
collateral properties are located in 31 states. The highest state
concentrations are California, Washington, New Jersey, Texas and
Florida. All of the loans are fixed rate.
GS MORTGAGE: Fitch Affirms Three Cert. Classes' Low-B Ratings
-------------------------------------------------------------
Fitch Ratings affirmed these GS Mortgage Securities Corp.,
residential mortgage pass-through certificates:
GSAA, Series 2004-NC1:
-- Classes AF-3, AF-4, AF-5 and AF-6, AV-2B 'AAA'
-- Class M-1 'AA'
-- Class M-2 'A'
-- Class B-1 'BBB'
-- Class B-2 'BBB-'
GSAMP, Series 2004-AR1:
-- Classes A1-A, A-1B, A-2A, A2-B, and A-2C 'AAA'
-- Class M-1 'AA+'
-- Class M-2 'AA'
-- Class M-3 'AA-'
-- Class M-4 'A+'
-- Class M-5 'A'
-- Class M-6 'A-'
-- Class B-1 'BBB+'
-- Class B-2 'BBB'
-- Class B-3 'BBB-'
-- Class B-4 'BB+'
-- Class B-5 'BB'
GSAMP, Series 2004-AR2:
-- Classes A1-A, A-1B, A-2A, A2-B, A-3B, and A-3C 'AAA'
-- Class M-1 'AA+'
-- Class M-2 'AA'
-- Class M-3 'AA-'
-- Class M-4 'A+'
-- Class M-5 'A'
-- Class M-6 'A-'
-- Class B-1 'BBB+'
-- Class B-2 'BBB'
-- Class B-3 'BBB-'
-- Class B-4 'BB+'
GSAMP, Series 2004-NC2:
-- Classes A1-A, A-1B, A2-B, and A-2C 'AAA'
-- Class M-1 'AA'
-- Class M-2 'A'
-- Class M-3 'A-'
-- Class B-1 'BBB+'
-- Class B-2 'BBB'
-- Class B-3 'BBB-'
GSAMP, Series 2004-OPT:
-- Classes A-1, A-3, and A-4 'AAA'
-- Class M-1 'AA'
-- Class M-2 'AA-'
-- Class M-3 'A+'
-- Class B-1 'A'
-- Class B-2 'BBB+'
-- Class B-3 'BBB'
-- Class B-4 'BBB-'
The affirmations, affecting approximately $1.8 billion of the
outstanding certificates, reflect a stable relationship between
credit enhancement and expected loss on the pool balance.
The collateral of the above transaction generally consists of:
* first lien and second lien;
* fixed-rate; and
* adjustable-rate subprime mortgage loans.
The loans underlying the transactions containing "AR" were
originated or acquired by Argent Mortgage Company, LLC and Olympus
Mortgage Company and are serviced by Countrywide Home Loans, Inc.
(rated 'RPS1' by Fitch).
The loans underlying the transactions containing "NC" were
originated or acquired by New Century Mortgage Corp. The loans
underlying series 2004-NC1 are serviced by Chase Home Finance, LLC
(rated 'RPS1' by Fitch), and series 2004-NC2 are serviced by
Litton Loan Servicing, LP (rated 'RPS1' by Fitch). The loans
underlying series 2004-OPT were originated or acquired by Option
One Mortgage Corp. and are serviced by Option One Mortgage Corp.
(rated 'RPS1' by Fitch).
The pool factors (i.e., current mortgage loans outstanding as a
percentage of the initial pool) for the transactions range from
44% (2004-NC1) to 57% (2004-OPT1), and the seasoning ranges from
14 months (2004-OPT) to 24 months (2004-NC1).
GSI GROUP: Earns $4.4 Million of Net Income in Fourth Quarter
-------------------------------------------------------------
GSI Group Inc. (Nasdaq: GSIG) disclosed its financial results for
the fourth quarter ended December 31, 2005.
Revenue for the fourth quarter of 2005 was $66.5 million, as
compared to $80.0 million for the fourth quarter of 2004. Net
income was $4.4 million for the fourth quarter of 2005 as compared
to $8.6 million for the fourth quarter of 2004. These results
compare to revenue of $62.6 million and net income of $2.0 million
in the third quarter of 2005.
Revenue for the total year of 2005 was $260.8 million, as compared
to $330.0 million for the total year 2004. Net income for the
total year 2005 was $9.7 million as compared to net income of
$41.5 million for the total year of 2004.
"In the fourth quarter, we saw both a recovery in capital spending
in our semiconductor market and a market share gain, particularly
with existing customers. Last year we also earned qualification
at two new semiconductor manufacturers and just recently became
qualified at another significant account. These successful
qualifications will make a portion of the market available to us,
which was previously un-served by GSI," said Charles Winston, CEO
of GSI Group.
Mr. Winston continued, "Growing demand from the printed circuit
board market, combined with an unanticipated order in the fourth
quarter from the previously dormant mixed signal market are also
positive signs for our business in the coming quarters."
Fourth Quarter Business Highlights:
* bookings of $91.1 million increased $30.3 million from the
third quarter 2005;
* two business segments reported strong increases in sequential
bookings levels with the Systems Segment up 116% and
Precision Motion up 23%;
* the new M350 Wafer Trim system was introduced to increase
throughput and accuracy;
* total Company gross margin rates increased to 42.9%, as
compared to 39.4% in the third quarter 2005;
* cash, cash equivalents and marketable short-term investments
increased $2.5 million to $96.0 million, from $93.5 million
in the third quarter. Cash received in January 2006 from the
sale of an unused Minnesota facility brings current cash
levels above $100.0 million.
Business Outlook
The Company anticipates these results for the first quarter of
2006:
* revenue to be in the range of $70.0 million to $75.0 million;
and
* gross margin rates to be approximately 41%, plus or minus 1
point depending on product mix.
Based in Assumption, Illinois, GSI Group Inc. is one of the
largest global manufacturers of grain storage bins and related
drying and handling systems, as well as capital equipment for
swine and poultry producers. GSI markets its products in
approximately 75 countries through a network of more than 2,500
independent dealers to grain, protein producers and large
commercial businesses. In May 2005, GSI was acquired by
Charlesbank Capital Partners, a Boston-based private equity firm
known for partnering with experienced management teams to grow
fundamentally strong businesses.
* * *
GSI Group Inc.'s 12% Senior Unsecured Notes due 2013 carry Moody's
Investors Service's B3 rating and Standard and Poor's B- rating.
HALL DICKLER: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Hall Dickler, LLP
aka Hall Dickler Kent Friedman & Wood, LLP
aka Hall Dickler Kent Goldstein & Wood, LLP
330 Madison Avenue, 9th Floor
New York, New York 10017
Bankruptcy Case No.: 06-10332
Type of Business: The Debtor is a law firm.
Chapter 11 Petition Date: February 28, 2006
Court: Southern District of New York (Manhattan)
Debtor's Counsel: Richard Steven Miller, Esq.
Greenberg Traurig, LLP
Met Life Building, 200 Park Avenue
New York, New York 10166
Tel: (212) 801-6767
Fax: (212) 801-6400
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
------ --------------- ------------
Vornado Realty Trust Company Lease Obligations $1,500,000
210 Route 4 West
Paramus, NJ 07652
U.S. Bankcorp - Oliver-Allen Lease Obligations $642,063
Technology Leasing
801 Larkspur Landing
Larkspur, CA 94939
Vortex Group LLC Brokerage Agreement $280,000
60 East 42nd Street
Suite 2925
New York, NY 10165
Mack-Cali WP Realty Lease Obligations $141,870
Association, LLC
Greenberg Traurig, LLP Legal Fees $132,212
Julien J. Studley, Inc. Brokerage Agreement $72,000
Perfect Access Speer Computer Services $70,000
Xerox Corporation Lease Obligations $61,813
Clinical Research Expert Witness Fees $55,500
Laboratories, Inc.
Roosevelt & Benowich, LLP Legal Fees $45,949
LECG, LLC Outsourced Services $39,972
Ohrenstein & Brown LLP Legal Fees $34,237
Martindale-Hubbell Library Fees $25,435
Equitrac Corporation Lease Fees $23,936
Broadwing Lease Obligations $20,040
Telecommunication Inc.
Pitney Bowes Credit Corp. Lease Obligations $17,779
Millenium Storage & Storage Fees $17,554
Transfer Corp.
Kramer Kozek LLP Legal Fees/Accounts $15,882
Shook, Hardy & Bacon LLP Outsourced Services $12,388
Nextiraone, LLC Lease Obligations $11,306
HARBORVIEW MORTGAGE: Moody's Rates Class B-10 Certificates at Ba3
-----------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by HarborView Mortgage Loan Trust 2006-1, and
ratings ranging from Aa1 to Ba3 to the subordinate certificates in
the deal.
The certificates are backed by Countrywide Home Loans, Inc
originated adjustable-rate negative amortization Alt-A mortgage
loans. The ratings are based primarily on the credit quality of
the loans, and on the protection from subordination. Moody's
expects collateral losses to range from 1.35% to 1.55%.
Countrywide Home Loans Servicing LP will service the loans.
Moody's considers Countrywide Servicing LP a highly capable
servicer of Prime/Alt-A loans.
Issuer: HarborView Mortgage Loan Trust 2006-1
* Class 1-A1A, Assigned Aaa
* Class 1-A1B, Assigned Aaa
* Class 2-A1A, Assigned Aaa
* Class 2-A1B, Assigned Aaa
* Class 2-A1C, Assigned Aaa
* Class X-1, Assigned Aaa
* Class X-2A1B, Assigned Aaa
* Class PO-1, Assigned Aaa
* Class PO-2A1B, Assigned Aaa
* Class A-R, Assigned Aaa
* Class B-1, Assigned Aa1
* Class B-2, Assigned Aa2
* Class B-3, Assigned Aa3
* Class B-4, Assigned A1
* Class B-5, Assigned A2
* Class B-6, Assigned A3
* Class B-7, Assigned Baa1
* Class B-8, Assigned Baa2
* Class B-9, Assigned Baa3
* Class B-10, Assigned Ba3
HARRY & DAVID: Moody's Affirms B3 Rating on $175 Mil. Sr. Notes
---------------------------------------------------------------
Moody's affirmed all ratings of Harry & David Holdings, Inc., but
revised the rating outlook to negative from stable. Through its
operating subsidiary Harry & David Operations Corp., Harry & David
sells fresh fruit and gourmet food under the Harry and David brand
and markets rose plants and other horticultural products under the
Jackson & Perkins brand.
Revision of the rating outlook to negative is prompted by the
adverse impact of recent operating margin compression, in spite of
increased sales, on credit metrics and liquidity. Moody's current
ratings anticipate that the company will resolve the expected
violation of revolving credit facility covenants before the
inventory build for Holiday season of 2006.
Ratings affirmed are:
* $70 million floating rate senior notes (2012) at B3,
* $175 million 9% senior notes (2013) at B3, and
* Corporate family rating at B2.
Moody's does not rate the $125 million secured revolving credit
facility.
The ratings reflect the adverse impact that weak operating results
during the crucial December 2005 quarter are having on fixed
charge coverage and debt protection measures. The ratings
consider the weak credit metrics, the high fixed charge burden for
interest expense and capital investment relative to cash flow, and
the typical seasonality of revenue and cash flow with about 60% of
sales and more than 100% of operating profit in the December
quarter. Also limiting the ratings are the weak performance of
the Jackson & Perkins horticultural segment and the relatively low
operating margin of the Harry and David Stores division, the
discretionary nature of much of the company's product offering,
and the variability of agricultural production for fruit and rose
bushes. However, credit strengths are the revenue diversity
derived from several distribution channels, the recent ability of
the company to build sales, and the leading position of Harry and
David and Jackson & Perkins as marketers of premium branded
products to a higher income base.
The negative outlook recognizes Moody's concern that ratings could
decline early in 2007 if operating performance during the crucial
December 2006 selling season is weak. Specifically, ratings would
decline if debt to EBITDA remains well above 6 times, outflows for
cash interest expense, capital expenditures, and working capital
exceed EBITDA on an annualized basis, or the company's liquidity
position becomes a concern. In Moody's opinion, stabilization of
ratings at current levels would require greater financial
flexibility as represented by a free cash flow surplus on an
annualized basis, an increase in unused capacity on the revolving
credit facility at peak periods, and a sustained reversal of
weakening credit metrics such that annual gross margin returns to
historical norms of about 50%, leverage falls to 6 times, and EBIT
comfortably covers interest expense. An upgrade is unlikely until
the company establishes that it can grow sales while maintaining
stable margins.
The B3 rating on the two tranches of senior notes issued by Harry
& David Operations Corp., considers that this debt is guaranteed
by the company's operating subsidiaries on a senior basis. This
senior class of debt is contractually subordinated to the bank
loan and effectively ranks pari passu with trade accounts payable.
These notes first become callable in March 2007 at 102.0% of par.
A default on the revolving credit facility would not cause a cross
default on the senior notes. The company does not use the unrated
revolving credit facility for much of the year, but the highly
seasonal nature of the company's sales periodically causes
substantial utilization.
For the twelve months ending Dec. 24, 2005, gross leverage was
greater than 8 times, EBIT covered cash interest expense by about
1 time, and retained cash flow to gross debt was negative. While
sales grew compared to earlier years, gross margins declined to
49% in the Dec. 2005 quarter compared to 52% in the same period of
2004 as costs increased because of higher prices for fuel and
other imputs and greater discounts were needed to clear excess
inventory. Results were uneven with online and catalogue sales
contributing most cash flow compared to about two-thirds of
revenue. For the twelve months ending Dec. 2005, EBITDA of $41
million equaled $23 million for cash interest expense and $18
million for capital expenditures. Borrowings peaked at $104
million in November 2005 and the company had a cash balance of
$147 million on Dec. 24, 2005. Unless amended or waived, at the
end of March 2006 quarter the company likely will violate the
leverage and interest coverage covenants of the revolving credit
facility.
Harry & David Holdings, Inc, with headquarters in Medford, Oregon,
produces and markets (1) premium fresh fruit and gourmet foods
under the Harry and David brand and (2) premium rose plant and
horticultural products under the Jackson & Perkins brand. The
company distributes its products through print catalogues, over
the internet, through retail stores, and via the wholesale
channel. Revenue for the twelve months ending Dec. 24, 2005 was
about $600 million.
HIGH VOLTAGE: Yaskawa Wants Court's Help on Discovery Requests
--------------------------------------------------------------
Yaskawa Electric Corporation asks the Hon. Joan N. Feeney of the
U.S. Bankruptcy Court for the District of Massachusetts, Eastern
Division, to compel:
-- Craig Langley, Siemens Energy & Automation's keeper of
records; and
-- Stephen S. Gray, the chapter 11 Trustee appointed in High
Voltage Engineering Corporation and its debtor-affiliates'
chapter 11 cases
to comply with Yaskawa Electric's discovery requests.
Yaskawa Electric is a party to three prepetition executory
agreements with Debtor Robicon Corporation. Yaskawa says Robicon
had continuing obligations under these agreements when it filed
for bankruptcy protection and didn't perform. Siemens bought
substantially all of Robicon's assets in April 2005, a few months
after the bankruptcy filing.
In May 2005, Yaskawa Electric filed a proof of claim for
$2,903,581.10 against Robicon. In August 2005, the Chapter 11
Trustee obtained authority to reject the Yaskawa Electric
Agreements. Yaskawa Electric sought damages amounting to
$4,598,854.30 for the rejection of the contracts.
Yaskawa Electric has sought discovery from Siemens and the
Chapter 11 Trustee to support its claim, but to no avail.
Yaskawa Electric is now asking the Court for help on the matter.
Headquartered in Wakefield, Massachusetts, High Voltage
Engineering Corporation -- http://www.asirobicon.com/-- owns and
operates a group of three industrial and technology based
manufacturing and services businesses. HVE's businesses focus on
designing and manufacturing high quality applications and
engineered products, which are designed to address specific
customer needs. The Debtor filed its first chapter 11 petition on
March 1, 2004 (Bankr. Mass. Case No. 04-11586). Its Third Amended
Joint Chapter 11 Plan of Reorganization was confirmed on July 21,
2004, allowing the Company to emerge on Aug. 10, 2004.
High Voltage and its debtor-affiliates filed their second chapter
11 petition on Feb. 8, 2005 (Bankr. Mass. Case No. 05-10787). S.
Margie Venus, Esq., at Akin, Gump, Strauss, Hauer & Feld LLP, and
Douglas B. Rosner, Esq., at Goulston & Storrs, represent the
Debtors. In the Company's second bankruptcy filing, it listed
$457,970,00 in total assets and $360,124,000 in total debts.
Stephen S. Gray was appointed chapter 11 Trustee in February 2005.
John F. Ventola, Esq., and Lisa E. Herrington, Esq., at Choate,
Hall & Stewart LLP represent the chapter 11 Trustee. Ira M.
Levee, Esq., at Lowenstein Sandler PC and Steven B. Levine, Esq.,
at Brown Rudnick Berlack Israels LLP represent the Official
Committee of Unsecured Creditors.
HIGHWOODS REALTY: Looming Debt Due Cues Moody's to Review Ratings
-----------------------------------------------------------------
Moody's Investors Service placed the ratings of Highwoods Realty
Limited Partnership on review for possible downgrade. According
to Moody's, this rating action reflects concerns surrounding
Highwoods' timely filing of audited 2005 financial data,
refinancing strategy, and resolution of its 2006 debt maturities
following the REIT's announcement to replace its auditors.
Moody's indicated that Highwoods' change in its auditors is not
the main concern; rather, the concern lies with the approaching
maturities of its bank credit facility and term loan in July 2006.
Neither of these instruments has extension options, which
constrains the REIT's near-term financial flexibility and
liquidity.
In general, it is required by lending institutions for borrowers
to provide current audited financial statements, and Highwoods has
not yet filed its 2005 10Qs, and Moody's does not expect the REIT
to file its 10K on time. Management has advised Moody's that it
has received waivers from the lenders for the credit facility and
term loan relating to the timing of filing its 2005 Form 10Q's and
Form 10K and its first quarter 2006 10Q.
Moody's does acknowledge that in the past, the lenders have worked
with the company regarding waivers. However, the timing of
Highwoods appointment of its new auditors could result in further
delays in filing its 2005 10-K and 10-Qs beyond the waiver period,
according to the ratings agency. Moody's is concerned that this
process could prove lengthy, and interfere with the REIT's capital
market access. Moody's remarked that the REIT has $110 million of
public bonds maturing at the end of 2006.
Moody's notes that Highwoods has various resources available. In
specific, it has a $50 million construction revolver and, in
particular, a large, nearly $2 billion unencumbered property pool,
and should have asset sales proceeds. Should Highwoods need to
rely on the secured debt market for funding, such could lead to a
material, adverse shift in the REIT's capital strategy.
Moody's said that, should Highwoods' secured debt as a percent of
gross assets exceed 30%, such would be inconsistent with its Ba1
rating. Management noted that this ratio is currently about 21%.
In addition, the REIT's ratings would be weakened if its now-
limited access to the capital markets is prolonged, or by
performance deterioration.
Moody's review will focus on Highwoods' resolution of its maturing
credit facility and term loan, timing to complete and become
current on all required financial filings, resolution of any
issues that may arise from Sarbanes-Oxley implementation and
certification, and the resolution of the SEC investigation. A
return to a stable rating would be assisted by resolution of near-
term debt maturities, current financial filings, and at least
stable operating performance.
These securities were placed on review for downgrade:
* Highwoods Realty Limited Partnership -- Senior debt at Ba1,
Senior debt shelf at (P)Ba1
* Highwoods Properties, Inc. -- Preferred stock at Ba2,
Preferred stock shelf at (P)Ba2
Highwoods Properties, Inc., headquartered in Raleigh, North
Carolina, USA, is a Real Estate Investment Trust and one of the
largest developers and owners of Class A suburban office and
industrial properties in the Southeastern USA. As of Dec. 31,
2005, Highwoods owned or had an interest in 447 in-service office,
industrial and retail properties encompassing approximately 37
million square feet. Highwoods also owns 892 acres of development
land.
INDYMAC HOME: Moody's Rates Class M-10 Certificates at Ba1
----------------------------------------------------------
Moody's Investors Service assigned Aaa ratings to the senior
certificates issued by IndyMac Home Equity Mortgage Loan Asset-
Backed Trust, Series INABS 2006-A and ratings ranging from Aa1 to
Ba1 to the subordinated certificates in the deal.
The securitization is backed by IndyMac Bank F.S.B. originated
adjustable-rate and fixed-rate subprime mortgage loans. The
ratings are based primarily on the credit quality of the loans,
and on the protection from subordination, overcollateralization
(OC), excess spread and an interest rate swap provided by Bear
Stearns Financial Products Inc. Moody's expects collateral losses
to range from 4.95.% to 5.45%.
IndyMac Bank will service the mortgage loans. Moody's has
assigned IndyMac Bank F.S.B its SQ2 servicer quality rating as a
primary servicer of subprime loans.
The complete rating actions are:
Issuer: IndyMac Home Equity Mortgage Loan Asset-Backed Trust,
INABS 2006-A
* Class A-1, Assigned Aaa
* Class A-2, Assigned Aaa
* Class A-3, Assigned Aaa
* Class A-4, Assigned Aaa
* Class M-1, Assigned Aa1
* Class M-2, Assigned Aa2
* Class M-3, Assigned Aa3
* Class M-4, Assigned A1
* Class M-5, Assigned A2
* Class M-6, Assigned A3
* Class M-7, Assigned Baa1
* Class M-8, Assigned Baa2
* Class M-9, Assigned Baa3
* Class M-10, Assigned Ba1
LEGACY ESTATE: Wants Until October 20 to File Chapter 11 Plan
-------------------------------------------------------------
The Legacy Estate Group LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Northern District of California to extend
until Oct. 20, 2006, the period within which they have the
exclusive right to file a chapter 11 plan. The Debtors also want
their solicitation period extended to Dec. 20, 2006.
The Debtors tell the Court that their reorganization strategy
focuses on obtaining a capital investment and exit financing, or a
buyer for the enterprise. The Debtors want more time to:
(a) evaluate the various claim filed in these cases following
the expiration of the claims' bar dates,
(b) focus on the their business operations,
(c) preserve the goodwill of the companies, and
(d) maintain relationships with customers.
The extension, the Debtors say, will provide them a full and fair
opportunity to rehabilitate their business and to negotiate and
propose a reorganization plan without the disruption in their
business that might be caused by the filing of competing
chapter 11 plans by non-debtor parties.
The Court will convene a hearing on March 10, 2006, 10:00 a.m., to
consider the Debtors' request.
Headquartered in Saint Helena, California, The Legacy Estate Group
LLC -- http://www.freemarkabbey.com/-- owns Freemark Abbey
Winery, which produces a range of red, white, and dessert wines.
Legacy Estate and Connaught Capital Partners, LLC, filed for
chapter 11 protection on November 18, 2005 (Bankr. N.D. Calif.
Case No. 05-14659). John Walshe Murray, Esq., Lovee Sarenas,
Esq., and Robert A. Franklin, Esq., at the Law Offices of Murray
and Murray represent the Debtors in their restructuring efforts.
Lawyers at Winston & Strawn LLP represents the Official Committee
of Unsecured Creditors. When the Debtors filed for protection
from their creditors, they estimated more than $100 million in
assets and debts between $50 million and $100 million.
LENNOX INT'L: Reports Fourth Quarter and FY 2005 Financial Results
------------------------------------------------------------------
Lennox International Inc. (NYSE: LII) reported record sales, net
income and earnings per share for the fourth quarter and full-year
2005.
"2005 was a record-breaking year for Lennox International," said
Bob Schjerven, CEO. "Supported by enhanced operational
efficiencies, improved pricing, favorable weather patterns, and
sustained strength in the residential new construction market, LII
set several key performance records for the year."
Sales for full-year 2005 increased 13% to a record $3.4 billion,
with all company business segments contributing to the growth.
The company reported net income of $151 million, or $2.11 per
diluted share. Adjusted income from continuing operations for
full-year 2005 as reconciled in the attached reconciliation to
U.S. GAAP table, was $130 million comparing very favorably with
$91 million, or $1.39 per share, in 2004.
LII's focus on cash flow and debt reduction continued to be very
effective. The company generated $227 million in cash from
operations and invested $63 million in capital expenditures,
resulting in full-year free cash flow of $164 million. LII
repurchased $13 million in common stock in the fourth quarter.
Total debt of $121 million at the end of 2005 was a reduction of
$190 million from the prior year, primarily due to conversion of
$144 million in outstanding convertible notes. The company's debt
to capitalization ratio was 13% at December 31, 2005.
Fourth quarter sales increased 17%, or 18% in constant currencies,
to $871 million and net income was $42 million. Adjusted income
from continuing operations was $34 million compared to adjusted
income from continuing operations of $20 million in the prior
year's fourth quarter. In addition, the utilization of tax loss
carry-forwards and other tax items provided a one-time tax benefit
of $4 million.
2006 Outlook
"Our company is truly at a new and very exciting point in our
history, and we are focused on continuing the momentum in 2006,"
said Mr. Schjerven. "We expect full-year diluted earnings per
share will be in the range of $2.00 to $2.10." As announced
earlier this month, LII will close its current operations in
Bellevue, Ohio and consolidate manufacturing, distribution,
research & development, and administration for Allied Air
Enterprises operations in South Carolina, in a phased process
expected to be completed by the end of first quarter 2007. As a
result, LII expects to incur after-tax restructuring charges of
approximately $13 million. The company stated its 2006 guidance
assumes this charge will be offset through gains and other
positive non-operating items.
Capital expenditures in 2006 are projected to be approximately
$70 million including 13 SEER equipment costs carried over from
2005, the costs for a warehouse as part of the recently announced
consolidation program, factory expansion to accommodate continued
domestic Commercial Heating & Cooling growth, and IT investments
for CRM software and the implementation of SAP in Europe.
Lennox International, Inc. -- http://www.lennoxinternational.com/
-- manufactures and markets a broad range of products for heating,
ventilation, air conditioning, and refrigeration (HVACR) markets,
including residential and commercial air conditioners, heat pumps,
heating and cooling systems, furnaces, prefabricated fireplaces,
chillers, condensing units, and coolers. Lennox has solid
positions in its equipment markets, with well-established brand
names, as well as products spanning all price points. Price
competition and maximum geographic coverage are of particular
importance in the U.S. residential sector, as there is often
little perceived difference in equipment quality among competing
brands. Absent acquisition activity, the five leading player's
U.S. residential market shares tend to experience little change.
* * *
As reported in the Troubled Company Reporter on Oct. 31, 2005,
Moody's Investors Service affirmed the ratings of Lennox
International Inc. including the company's Ba2 corporate family
rating, and changed the outlook to positive from stable.
These ratings have been affirmed:
* (P)Ba3 senior, (P)B1 senior subordinated and subordinated;
* (P)B2 preferred and preference stock ratings on the company's
$250 million universal shelf registration; and
* Ba2 corporate family rating.
LONG BEACH: Moody's Assigns Ba2 Rating to Class M-11 Certificates
-----------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by Long Beach Mortgage Loan Trust 2006-1, and
ratings ranging from Aa1 to Ba2 to the subordinate certificates in
the deal.
The securitization is backed by Long Beach Mortgage Company
originated adjustable-rate and fixed-rate mortgages. The ratings
are based primarily on the credit quality of the loans, and on the
protection from subordination, overcollateralization, excess
spread and interest rate swap agreement provided by Credit Suisse
International. Moody's expects collateral losses to range from
4.60 % to 5.10%.
Long Beach Mortgage Company will act as master servicer and
Washington Mutual Bank will act as a servicer. Moody's has
assigned Washington Mutual its servicer quality rating as a
primary servicer of subprime loans.
The complete rating actions are:
Issuer: Long Beach Mortgage Loan Trust 2006-1
* Class I-A, Assigned Aaa
* Class II-A1, Assigned Aaa
* Class II-A2, Assigned Aaa
* Class II-A3, Assigned Aaa
* Class II-A4, Assigned Aaa
* Class M-1, Assigned Aa1
* Class M-2, Assigned Aa2
* Class M-3, Assigned Aa3
* Class M-4, Assigned A1
* Class M-5, Assigned A2
* Class M-6, Assigned A3
* Class M-7, Assigned Baa1
* Class M-8, Assigned Baa2
* Class M-9, Assigned Baa3
* Class M-10, Assigned Ba1
* Class M-11, Assigned Ba2
LONGVIEW FIBRE: Launches Tender Offer for 10% Senior Notes
----------------------------------------------------------
Longview Fibre Company (NYSE:LFB) commenced an offer to purchase
for cash all $215 million outstanding principal amount of its 10%
senior subordinated notes due 2009 (CUSIP No. 543213 AB8).
In connection with the tender offer, consents from holders of the
notes are being solicited for certain amendments which would
eliminate substantially all of the restrictive covenants and
certain events of default. The terms and conditions of the tender
offer and consent solicitation are set forth in an Offer to
Purchase and Consent Solicitation Statement that is being
delivered to holders of the notes.
The consent solicitation will expire at 5:00 p.m., New York City
time, on Mar. 10, 2006, unless extended or earlier terminated.
The tender offer will expire at 9:00 a.m., New York City time, on
Mar. 27, 2006, unless extended or earlier terminated.
Holders that properly tender their notes and consents at or before
the Consent Deadline will, if their notes are accepted for
payment, receive total consideration of $1,052.50 in cash for each
$1,000 principal amount of notes validly tendered and not validly
withdrawn, which includes a consent payment of $20 for each $1,000
principal amount tendered and accepted.
Holders that properly tender their notes after the Consent
Deadline and before the Expiration Time will receive the tender
consideration of $1,032.50 for each $1,000 principal amount of
notes tendered and accepted, but will not receive the consent
payment.
Holders that properly tender notes will, if their notes are
accepted for payment, receive accrued and unpaid interest up to,
but not including, the applicable payment date. Any holder that
tenders notes pursuant to the tender offer must also deliver a
consent.
The tender offer and consent solicitation is part of the
refinancing that the company began in December 2005 and is
expected to be funded with proceeds from new debt and equity
financings. Completion of the tender offer and consent
solicitation is subject to the satisfaction of certain conditions,
including, but not limited to:
(i) receipt of valid tenders and consents from holders of at
least a majority in principal amount of the outstanding
notes and
(ii) the consummation of one or more new equity or debt
offerings with gross proceeds to the company of at least
$330 million.
The tender offer and consent solicitation may be amended, extended
or, under certain conditions, terminated.
Copies of the Statement and other documents, including the related
letter of transmittal, can be obtained by contacting Global
Bondholder Services Corp., the information agent for the tender
offer and consent solicitation, at 866-470-4300 or 212-430-3774.
Goldman, Sachs & Co. and Banc of America Securities LLC are the
dealer managers for the tender offer and consent solicitation.
Questions regarding the tender offer and consent solicitation can
be addressed to Goldman, Sachs & Co. at 800-828-3182 and Banc of
America Securities LLC at 888-292-0070.
Longview Fibre Company -- http://www.longviewfibre.com/-- is a
diversified timberlands owner and manager, and a specialty paper
and container manufacturer. Using sustainable forestry methods,
the company manages approximately 587,000 acres of softwood
timberlands predominantly located in western Washington and
Oregon, primarily for the sale of logs to the U.S. and Japanese
markets. Longview Fibre's manufacturing facilities include a
pulp-paper mill at Longview, Washington; a network of converting
plants; and a sawmill in central Washington. The company's
products include: logs; corrugated and solid-fiber containers;
commodity and specialty kraft paper; paperboard; and dimension and
specialty lumber.
The company's $215 million 10% senior subordinated notes due 2009
carries Standard & Poor's B+ rating. That rating was assigned on
Jan. 3, 2002.
LUMENIS LTD: December 31 Balance Sheet Upside-Down by $40.4 Mil.
----------------------------------------------------------------
Lumenis Ltd. reported financial results for the fourth quarter and
fiscal year ended Dec. 31, 2005.
For the three months ended Dec. 31, 2005, Lumenis Ltd.'s revenues
increased to $74.2 million from $72.8 million for the same period
in 2004.
For the 12 months ended Dec. 31, 2005, Lumenis' total revenues
increased to $283.3 million from total revenues of $272.7 million
for the year ended Dec. 31, 2004. Gross profit for the fiscal
year 2005 decreased to $127.3 million from gross profit of $132.2
million for the fiscal year ended 2004.
For the year 2005, the Company's operating profit increased to
$5.8 million from $5 million in 2004. Net loss for the year 2005
increased to $14.7 million from a net loss of $12 million in 2004.
For the year 2005, Lumenis' net cash flow from operating
activities was a negative $3.5 million from a positive net cash
flow of $21.8 million in 2004. At Dec. 31, 2005, the Company had
$14 million of cash and cash equivalents and unused borrowing
capacity under its committed lines of credit of an additional
$19.1 million. Total bank debt for the year ended Dec. 31, 2005,
increased to $190 million from $188.1 million at Dec. 31, 2004.
Based on the preliminary and unaudited results for the year 2005,
the Company says that it is in compliance with its covenants under
its bank agreements.
For the fiscal year ended Dec. 31, 2005, Lumenis Ltd. reported
total assets of $253,213,000 and total liabilities of
$293,614,000.
Headquartered in Yokneam, Israel, Lumenis Ltd. --
http://www.lumenis.com-- is a global developer, manufacturer and
seller of laser and light- based devices for medical, aesthetic,
ophthalmic, dental and veterinary applications. The Company
offers a wide range of products along with extensive product
support systems including training, education and service.
Lumenis invests heavily in research and development to maintain
and enhance its leading industry position. The Company holds
numerous patents worldwide on its technologies.
As of Dec. 31, 2005, Lumenis Ltd.'s shareholders' equity
deficit widened to $40,401,000 from a $27,107,000 deficit at
Dec. 31, 2004.
MAGELLAN HEALTH: Delays Release of Fourth Quarter 2005 Financials
-----------------------------------------------------------------
Magellan Health Services, Inc. (Nasdaq:MGLN) is delaying the
release of its fourth quarter and fiscal year 2005 financial
results and conference call because it is continuing to evaluate
the accounting treatment of the use of deferred tax assets that
existed prior to the Company's emergence from bankruptcy.
Specifically, the Company is evaluating whether the use of
deferred tax assets, other than net operating losses, generated
prior to its emergence from bankruptcy should be credited to
goodwill as opposed to the Company's treatment in 2004 and 2005 of
reducing its provision for income taxes. This evaluation is not
with respect to the Company's use of the deferred tax assets, but
only with respect to the accounting treatment of such use. Such
evaluation could affect the Company's resulting net income and
earnings per share reported for those years and subsequently, but
will not affect segment profit or cash flow. Once the Company
completes its analysis, if it determines there is a material
change to a previously reported amount, it would restate the
reported results for such period as appropriate.
The Company expects to report 2005 segment profit of $246 million,
which exceeds its previously announced guidance range of $220
million to $240 million. It also reaffirmed that it expects to
generate segment profit in 2006 in the range of $173 million to
$193 million, including the impact of the NIA acquisition.
"Financially, operationally and strategically, 2005 was an
excellent year for Magellan," said Steven J. Shulman, chairman and
chief executive officer of Magellan. "While we are disappointed
in having to delay our earnings release to continue our
evaluation, we are very pleased with our results for 2005. We
exceeded our financial expectations, continued to demonstrate
excellence in service to members, customers and providers, and
ramped up development of our new product suite. We have since
completed our acquisition of NIA, which is a significant step
forward in realizing our strategy of managing a greater portion of
the health care dollar. We look forward to providing more
information in our upcoming earnings call."
Headquartered in Avon, Connecticut, Magellan Health Services, Inc.
(Nasdaq:MGLN) is the United States' leading manager of behavioral
health care and radiology benefits. Its customers include health
plans, corporations and government agencies. The Company filed
for chapter 11 protection on March 11, 2003 (Bankr. S.D.N.Y. Case
No. 03-40515). The Court confirmed the Debtors' Third Amended
Plan on Oct. 8, 2003, allowing the Company to emerge from
bankruptcy protection on Jan. 5, 2004.
The company's $185 million bank facility due 2008 carries
Standard & Poor's B+ rating. That rating was assigned on
Jan. 6, 2004.
MARSH SUPERMARKETS: Closes Nine Stores to Improve Cash Flow
-----------------------------------------------------------
Marsh Supermarkets, Inc.'s total revenues for the third fiscal
quarter ended Jan. 7, 2006, increased to $407.5 million, an
increase of $3.9 million or 1.0% over the prior year quarter.
Marsh's total sales in comparable supermarkets and convenience
stores were 0.7% above last year. Comparable stores are those
that were open during both quarters. Comparable store merchandise
sales, which excludes gasoline sales, declined 1.4% compared to
the same period in 2005.
The Company excludes gasoline sales from its analysis of
comparable store merchandise sales because retail gasoline prices
fluctuate widely and frequently, making analytical comparisons
difficult.
The Company previously announced that the quarter's results would
include a non-cash impairment charge of $12.8 million before tax
and that it has implemented store closings and other initiatives
that are expected to save more than $15.0 million annually.
The Company reported a net loss of ($9.6) million, compared to net
income of $2.7 million for the same period last year.
According to the Company, the quarterly loss includes the
previously announced $8.4 million after tax charge for impairment
of long-lived assets. This non-cash charge will bring the book
value of these assets in line with their estimated fair market
value.
The third quarter results of operations also included $1.9 million
before tax of costs related to the previously announced
exploration of strategic alternatives and debt refinancing as well
as severance costs. Further, gains from real estate sales
declined $1.7 million from the prior year quarter.
Store Closings and Cost Savings
The Company decided to close nine stores as part of its ongoing
efforts to improve the cash flow of the Company.
The Company has already closed six Village Pantry convenience
stores and the Trios Di Tuscanos restaurant in Noblesville. The
Marsh Supermarket in Fort Wayne and the Savin*$ store in Muncie
will be closed by the end of the month.
Upon closing of the stores, the Company expects to record an
additional charge of $6.0 to $10.0 million in the fourth fiscal
quarter, primarily related to future lease payments.
Headquartered in Indianapolis, Indiana, Marsh Supermarkets, Inc.
-- http://marsh.net/-- is a leading regional chain with stores
primarily in Indiana and western Ohio, operating 69 Marsh(R)
supermarkets, 38 LoBill(R) Food stores, 8 O'Malias(R) Food
Markets, 154 Village Pantry(R) convenience stores, 2 Arthur's
Fresh Market(R) stores. The Company also operates Crystal
Catering Food Services(SM) which provides upscale catering,
cafeteria management, office coffee, coffee roasting, vending and
concessions, and Primo Banquet Catering and Conference Centers;
Floral Fashions(R), McNamara(R) Florist and Enflora(R) -- Flowers
for Business.
* * *
On Dec. 12, 2005, Moody's placed Marsh Supermarkets, Inc.'s long
term corporate family rating at B2 and junked Marsh's $150 million
issue of 8-7/8% Senior Subordinated Notes due 2007 with its Caa1
rating.
Standard & Poor's gave the Company a B- credit rating when it
completed its review of the company on Nov. 29, 2005.
MASTR ALTERNATIVE: Moody's Assigns B2 Rating to Class N-3 Notes
---------------------------------------------------------------
Moody's Investors Service assigned a Baa2 rating to the Class N-1
notes of MASTR Alternative Loan NIM 2006-3. In addition a rating
of Ba3 and B2 was assigned to the Class N-2 and Class N-3.
The notes are backed by a 100% interest in Class C and Class P
certificates issued in an underlying securitization of negative
amortization residential mortgage loans, CHL Mortgage Pass-Through
Trust 2006-3, Mortgage Pass-Through Certificates, Series 2006-3.
The cash flows available to repay the notes are most significantly
impacted by the level of prepayments, as well as the timing and
amount of losses on the underlying mortgage pool. Moody's applied
various combinations of loss and prepayment scenarios to evaluate
the adequacy of cash flows to fully amortize the rated notes.
The complete rating actions are:
Issuer: MASTR Alternative Loan NIM 2006-3
* Cl. N-1, Assigned Baa2
* Cl. N-2, Assigned Ba3
* Cl. N-3, Assigned B2
The notes are being offered in privately negotiated transactions
without registration under the 1933 Act. The issuance was
designed to permit resale under Rule 144A.
MEG ENERGY: S&P Rates Proposed $750 Million Facilities at BB
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
corporate credit rating to Calgary, Alberta-based MEG Energy Corp.
At the same time, Standard & Poor's assigned its 'BB' bank loan
rating with a recovery rating of '1' to MEG's proposed bank loan
facilities, which are composed of:
* a seven-year US$700 million secured term loan B; and
* a three-year US$50 million secured revolving credit facility.
The '1' recovery rating reflects expectations for a 100% recovery
of principal in a default scenario. The 'BB' bank loan rating is
two notches above the corporate credit rating, because the
collateral value supporting the loans has a high probability of
enabling lenders to recover all principal and accrued interest
under a default scenario and likely liquidation process. The
outlook is stable.
"The ratings on MEG are constrained by its aggressive financial
risk profile, which reflects the company's lack of significant
cash flow generation until Phase II of its Christina Lake Project
begins operation -- expected in 2009 -- and the risk of
construction cost increases," said Standard & Poor's credit
analyst Jamie Koutsoukis. "Nevertheless, we believe the risk of
cost overruns are tempered by the cost performance of existing
steam-assisted gravity-drainage projects, which have been
completed on time and on budget. Furthermore, MEG has
incorporated meaningful inflation and contingency reserves in its
project estimates," Ms. Koutsoukis added.
MEG holds a 100% interest in 52 sections of oil sands leases
representing 1.9 billion barrels of recoverable resource, adjacent
to EnCana Corp.'s Christina Lake Project in northern Alberta.
Development of the company's Christina Lake Project will be
conducted in phases, with Phase I production of 3,000 barrels of
oil per day (bbls/d) to come online in 2007 and Phase II
production of 22,000 bbls/d expected to begin in 2009. MEG also
has two additional phases planned, which if completed would bring
production up to 95,000 bbls/d in 2013. Absent the risks of
bringing these phases online as expected, Standard & Poor's would
view MEG's business profile as being consistent with investment-
grade oil and gas independents.
The stable outlook reflects Standard & Poor's expectation that MEG
will be able to complete Phases I and II of its Christina Lake
Project on schedule without any material cost increases and,
consequently, without any need for additional funding. Once MEG
begins production at its oil sands project and internally
generated cash flows are sufficient to meet the company's debt and
maintenance capital expenditure commitments, there should be a
material improvement in MEG's financial risk profile. An
improvement in the company's existing financial profile, which
reflects MEG's prefunded construction program and currently
hampers the overall credit rating, would strengthen the overall
credit profile, which should, in turn, result in a positive rating
action. Conversely, if the company encounters cost overruns as it
proceeds with construction and if the project economics
deteriorate, a negative rating action could occur.
METALFORMING TECH: Judge Walrath Approves Disclosure Statement
--------------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware approved the adequacy of the amended
disclosure statement explaining Metalforming Technologies, Inc.,
and its debtor-affiliates' Amended Joint Chapter 11 Plan of
Reorganization. Judge Walrath determined that the amended
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.
Modifications in the Plan
Under the Modified Plan, four claims totaling $11,460,208 filed by
the Internal Revenue Service against the Debtors are deemed
withdrawn.
In addition, the resolution of the three claims asserted by the
Pension Benefit Guaranty Corporation will be determined by the
results of the Debtors' consultation with the Claims Agent and the
Official Committee of Unsecured Creditors. The PBGC Claims
involve insurance obligations in the Northern Tube Pension Plan.
The Debtors say that the consultation will lead to objections to
the PBGC Claims or the Debtors will move to terminate the Northern
Tube Pension Plan. The Debtors relate that if the Northern Tube
Pension Plan is terminated, the PBGC could assert additional
claims for termination liability and minimum funding liability, in
amounts substantially lower than the claims is has already filed.
The Debtors believe that absent termination of the Northern Tube
Pension Plan, the PBGC Claims fail.
Original Plan of Liquidation
The original Plan distributes any remaining proceeds from the sale
of substantially all of the Debtors' assets to Zohar Tubular
Acquisition, LLC, which closed on Nov. 18, 2005. Zohar paid
approximately $41.3 million for the assets and assumed all of the
Debtor's postpetition liabilities.
Settlement Agreement
In December 2005, the Bankruptcy Court approved the settlement
agreement resolving objections raised by the Official Committee of
Unsecured Creditors in connection with the sale of the Debtors'
assets to Zohar.
The settlement agreement recognizes all proceeds of the Zohar sale
as collateral securing the Debtors' prepetition and DIP Loan
obligations to a consortium of lenders led by Patriarch Partners,
LLC. It also outlines how the proceeds should be distributed and
allocates appropriate levels of funding for a wind-down budget.
Under the settlement agreement, the Debtors:
-- repaid their DIP Loan obligations;
-- made a $20 million interim distribution to Patriarch;
-- allocated $4 million to a General Unsecured Claim Fund;
-- created a reserve amount escrow;
-- created a tax reserve account with a $1.8 million
allocation; and
-- created a prepetition lender account that will hold any
excess cash from the Zohar Sale and the sale of the
Debtors' other remaining assets.
Treatment of Claims
Patriarch and the prepetition lenders, which received $20 million
of their $52 million allowed claim under a settlement agreement,
will get additional cash on the effective date that will bring the
lenders' recovery to 70%. The remaining 30% will be paid using
85% of the cash available from a prepetition lender account.
Holders of General Secured Claims will either receive the
collateral securing the their claims or cash equal to the
value of the collateral securing the obligations.
General unsecured claimholders will receive cash equal to a pro
rata share of the general unsecured claim fund. That fund comes
from the 15% slice of the money in the prepetition lender account
that won't be turned over to the lenders.
Equity interests in Metalforming Technologies and its subsidiaries
will be extinguished on the effective date of the Plan and
interest holders get nothing under the Plan.
Michael D. Wilson, the Debtor's Chief Financial Officer, will
oversee the consummation of the plan as Chief Liquidating Officer.
The Court will convene a hearing on Apr. 11, 2006, 3:00 p.m., to
consider confirmation of the Debtors' Plan. Objections must be
filed by Mar. 29, 2006.
Headquartered in Chicago, Illinois, Metalforming Technologies,
Inc., and its debtor-affiliates manufacture seating components,
stamped and welded powertrain components, closure systems,
airbag housings and charge air tubing assemblies for automobiles
and light trucks. The Company and eight of its affiliates filed
for chapter 11 protection on June 16, 2005 (Bankr. D. Del. Case
Nos. 05-11697 through 05-11705). Michael E. Foreman, Esq., Sanjay
Thapar, Esq., and Lia M. Pistilli, Esq., at Proskauer Rose LLP,
and Joel A. Waite, Esq., Robert S. Brady, Esq., Sean Matthew
Beach, Esq., and Timothy P. Cairns, Esq., at Young Conaway
Stargatt & Taylor LLP represent the Debtors in their restructuring
efforts. Francis J. Lawall, Esq., at Pepper Hamilton LLP
represents the Official Committee of Unsecured Creditors. Robert
del Genio at Conway, Del Genio, Gries & Co., LLC, provides the
Debtors with financial and restructuring advice and Larry H.
Lattig at Mesirow Financial Consulting LLC serves as the
Committee's financial advisor. As of May 1, 2005, the Debtors
reported $108 million in total assets and $111 million in total
debts.
MUMA SERVICES: Trustee Wants to Retain Lau Lane as Special Counsel
------------------------------------------------------------------
Charles A. Stanziale, Jr., the Chapter 7 Trustee overseeing the
liquidation of MUMA Services, Inc., f/k/a Murphy Marine Services,
Inc., and its debtor-affiliates asks the U.S. Bankruptcy Court for
the District of Delaware for authority to retain Lau, Lane,
Pieper, Conley & McCreadie, P.A., as his special litigation
counsel, nunc pro tunc to Nov. 1, 2005.
Daniel K. Astin, Esq., at The Bayard Firm, tells the Bankruptcy
Court that Lau Lane will:
a) assist the Trustee in defending the action captioned James
Porter v. McAllister Towing and Transportation Company v.
Charles A. Stanziale, Jr., as Chapter 7 Trustee of NPR,
Inc., pending in the U.S. District Court for the Middle
District of Florida; and
b) perform services that are necessary in the Debtor's Chapter
7 case.
David W. McCreadie, Esq., a partner at Lau Lane, discloses that
the Firm's professional bill:
Professional Designation Hourly Rate
------------ ----------- -----------
David W. McCreadie, Esq. Partner $225
Eddie G. Godwin, Esq. Associate $185
Michael H. Kestenbaum, Esq. Associate $165
Douglas R. Williams, Esq. Paralegal $155
Dorothy Jackson Paralegal $115
Jennifer Reynen Paralegal $115
Michael Costine Paralegal $110
Paul Quintero Paralegal $105
Dorothy Freeman Paralegal $105
Mr. Astin stresses the Trustee's need to employ special counsel
and suggests employing any other law firm will cost more money.
To the best of the Trustee's knowledge, Lau Lane and all of its
employees do not hold any interest adverse to the Debtors or their
estates and are "disinterested persons" as that term is defined
under section 101(14) of the Bankruptcy Code.
Murphy Marine Services, Inc., and its affiliated debtors filed
for chapter 11 protection on March 21, 2001 (Bankr. Del. Case
No. 01-00926). On July 25, 2002, the majority of the Debtors'
chapter 11 cases (excluding Dockside Refrigerated, Inc., and
Emerald Leading, Inc.) were converted to chapter 7 liquidation
proceedings. Donald J. Crecca, Esq., and Jeffrey T. Testa,
Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, in
Montclair, New Jersey, represent the Chapter 7 Trustee.
MUSICLAND HOLDING: Wants to Sell 340 Sam Goody & Suncoast Leases
----------------------------------------------------------------
According to James H.M. Sprayregen, Esq., at Kirkland & Ellis
LLP, Musicland Holding Corp. and its debtor-affiliates lease
around 340 Sam Goody and Suncoast Video store locations whose
inventory is currently being liquidated, in accordance with prior
orders of the U.S. Bankruptcy Court for the Southern District of
New York, in anticipation of Sam Goody and Suncoast vacating the
stores on or before April 30, 2006.
A list of the 340 Sam Goody and Suncoast Leases is available for
free at:
http://bankrupt.com/misc/Musicland_SGSCAuctionProcedures.pdf
The Debtors plan to hold an auction to consider bids for the sale,
free and clear of liens, claims and encumbrances, but otherwise
"as is-where is," of the Debtors' interests in those Sam Goody and
Suncoast Leases.
The Debtors seek the Court's authority to enter into Assumption
and Assignment and Sale Agreements with non-Landlords who
successfully submit the highest or best bid.
Among others, upon execution of an Assumption Agreement, the
Assignee will pay to the Debtors a deposit equal to 15% of the
Purchase Price. Any payments to be made by Assignee will be paid
by bank check or wire transfer, payable to Retail Consulting
Services, Inc., the escrow agent.
A full-text copy of the form of Assumption and Assignment and
Sale Agreement is available for free at:
http://bankrupt.com/misc/Musicland_AssumptionAgreement.pdf
The Debtors also seek the Court's authority to enter into
agreements for the sale of designation rights for the Lease with
non-Landlords who successfully submit the highest or best bid
according to the Bidding Procedures.
The Debtors believe that the ability to sell their right to
designate certain or all of their unexpired Leases may enable them
to obtain, at a minimum, the underlying economic value of the
Leases. Mr. Sprayregen notes that designation rights have
consistently been considered a property interest, under Section
541 of the Bankruptcy Code, subject to sale in bankruptcy cases.
The Debtors will seek to reject those Leases that are not disposed
of in the Auction. A full-text copy of the form of Lease
Termination Agreement is available for free at:
http://bankrupt.com/misc/musicland_leaseterminationpact.pdf
Bidding Procedures
The Debtors also ask the Court to approve uniform bidding
procedures for implementing the sale of approximately 340 Sam
Goody and Suncoast Video store locations.
Any bids for any of the Leases must be submitted in conformity
with the Auction and Bidding Procedures. A Qualified Bidder
must submit a bid before 5:00 p.m. Eastern Standard Time on
March 7, 2006, to:
Kirkland & Ellis LLP
Attn: Bradley V. Ritter
200 East Randolph Drive
Chicago, Illinois, 60601
- and -
Retail Consulting Services, Inc.
Attn: Ivan L. Friedman
460 West 34th Street, 4th Floor
New York, New York 10007
The Debtors ask the Court to schedule the Auction on March 14,
2006, at 10:00 a.m. at:
Kirkland & Ellis LLP
153 E. 53rd Street, 50th Floor
New York, New York 10022
A full-text copy of the Bidding Procedures is available for free
at http://bankrupt.com/misc/Musicland_SGSCAuctionProcedures.pdf
Break-Up Fee
In order to maximize the value of the Leases, the Debtors wish to
enter into agreements with stalking horse bidders. The Debtors
propose to pay the Stalking Horse Bidder a break-up fee of up to:
* $10,000 in the case of bids for individual Leases; or
* 3% of the cash amount of the Stalking Horse Bid for multiple
leases.
Mr. Sprayregen notes that the Break-up Fee will only be payable if
the Debtors fail to consummate the transaction with the proposed
Stalking Horse Bidder, and only if that failure to consummate the
transaction is because the Debtors accept a higher or better offer
from a competing bidder.
Mr. Sprayregen points out that that if the Debtors were required
to request the Court's approval of individual Break-up Fees in
advance of each Lease sale, the sale process would be
unnecessarily delayed and the Debtors would incur additional legal
expenses and may also lose certain significant sale and assignment
opportunities.
Thus, the Debtors believe that it is reasonable to ask the Court
for the flexibility to grant Break-up Fees that are necessary for
inducement of Stalking Horse Bids.
Determining Cure Amounts
The Debtors propose to provide notice to Landlords of the
potential Disposition of the Leases. The Notice of Disposition
will contain, inter alia:
-- the schedule of all the Debtors' outstanding obligations
under the Leases through the Petition Date;
-- the date by which Landlords must file any objection to that
Cure Schedule, on or about March 3, 2006, at 5:00 p.m.
Eastern Standard Time; and
-- the Sale Objection Deadline.
The Debtors expect to remain current on their leasehold
obligations through either surrender of the Leases or the
consummation of any assumption, assignment and sale.
The Debtors are prepared to pay any undisputed Excess Cure
Amounts from the proceeds of the Auction, and to segregate any
disputed Excess Cure Amounts pending the resolution of that
dispute.
Objections
At least 27 landlords object to the auction of the Sam Goody and
Suncoast Leases. The Objecting Landlords are:
-- Aronov Realty,
-- Developers Diversified Realty Corporation,
-- Federal Realty Investment Trust,
-- General Growth Management, Inc.,
-- Kravco Simon Company,
-- New Plan Excel Realty Trust, Inc.,
-- Union Station Venture II, LLC,
-- PREIT Services, LLC,
-- The Macerich Company,
-- The Mills Corporation,
-- Urban Retailers Properties, Co.,
-- Paasco Real Enterprises, Inc.,
-- Rye Rose Partners LLC,
-- CBL & Associates, Inc.,
-- Glimcher Properties Limited Partnership,
-- College Square Mall,
-- Sunset Mall,
-- North Grand Mall,
-- Marshall Town Center,
-- Inland Southern Management Corporation,
-- M.H. Cohen Realty, LLC,
-- Gregory Greenfield & Associates, Ltd.,
-- Jones Lang LaSalle Americas, Inc.,
-- Madison Monroe Mall LLC,
-- Turnberry Associates,
-- Greenash Center, LLC, and
-- The Taubman Landlords
According to the Objecting Landlords, no material changes to the
court-approved Bidding Procedures should be permitted without
further Court approval.
In addition, the Objecting Landlords believe that it is unfair:
-- to require them to waive all claims unless the Debtors are
prepared to place a valuation on the unsecured claims for
each property, and
-- to require that as a minimum bid, any interested party must
bid an amount in excess of that valuation together with any
cure amounts.
The Objecting Landlords point out that the Debtors' proposal that
objections be filed by March 16, 2006, is unduly burdensome. The
Debtors proposed to conduct their auction on March 14, 2006.
Thus, the schedule is unnecessarily short.
The Objecting Landlords also assert that the Debtors should be
required to provide all adequate assurance information to
Objecting Landlords as soon as it is received from a bidder for
one of the Objecting Landlords' properties. Moreover, the Bid
Procedures should be amended to advise all persons seeking to be
qualified bidders that they will be required to participate in
expedited discovery if the assumption and assignment of their
particular lease is a contested matter.
The Sale Hearing as to contested matters should be scheduled no
earlier than seven days after notification to the Objecting
Landlords of the winning bidder for any of their properties, the
Objecting Landlords tell the Court.
Some of the Objecting Landlords object to the deficiency of the
Lease Termination Agreement. They further propose that a lease
rejection should become effective at the later of 10 days after
notice of rejection and the delivery of keys.
The Objecting Landlords also note that any sale of Designation
Lease Rights must be on reasonable notice and must comply with
Section 365 of the Bankruptcy Code.
Moreover, the Objecting Landlords state that they have not been
provided with a list of the proposed cure amounts for the Leases,
and the Debtors' motion did not provide a specific time for the
Debtors to submit a schedule of cure amounts.
Accordingly, the Objecting Landlords ask the Court to modify the
bidding, auction and assignment procedures so as to be consistent
with their objections.
Debtors' Omnibus Response
Pursuant to the numerous objections to the Sam Goody and Suncoast
Lease Sale Motion, the Debtors have revised the:
-- Procedures Order,
-- Bidding Procedures,
-- Assumption and Assignment and Sale Agreement, and
-- Lease Termination Agreement.
James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, assures the
Court that a copy of the Debtors' proposed revised order will be
filed and served.
According to Mr. Sprayregen, one common basis of the objections
goes to timing. In response to these objections, the Debtors
propose a revised timeline:
March 6, 2006 -- Cure Objection Deadline
March 8, 2006 -- Bid Deadline
March 14, 2006 -- Auction
March 18, 2006 -- Sale Objection Deadline
March 18, 2006 -- Assumption Objection Deadline
March 22, 2006 -- Sale Hearing
The Debtors further contend, among others, that:
a. The right to amend sale procedures is appropriate and
common.
b. The Debtors revised the Assumption and Assignment Agreement
to clarify the language to alleviate the objectors'
concerns.
c. The proposed Bidding Procedures require that in order to be
a Qualified Bidder, a potential assignee must provide
sufficient adequate assurance information. Furthermore, if
a landlord is not satisfied with the provided adequate
assurance information, the proposed Order already provides
that it may object to the assumption and assignment. It is
at that point that it would be appropriate for the Court to
determine if there has been adequate assurance.
d. The Debtors have considered the objections and altered the
Bidding Procedures to provide that landlords are
automatically qualified and may attend the auction and bid
the cure amounts for their locations. However, if a
landlord desires to bid an amount in excess of the cure
amount, fairness requires that they be treated as any other
bidder and submit a Qualified Bid and provide a deposit of
15% of the cash portion of their bid.
e. As proposed, a lease rejection becomes effective at the
later of:
-- 10 days after notice of rejection; and
-- the delivery of keys.
If any property is left in the premises, a landlord is
authorized to remove the property.
f. Arguments regarding the permissibility of designation
rights sales ignore the clear weight of authority, and are,
in any event, premature.
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. Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts. (Musicland Bankruptcy News, Issue
No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000)
MUSICLAND HOLDING: Can Access $75 Million DIP Loan on Final Basis
-----------------------------------------------------------------
Representing Musicland Holding Corp. and its debtor-affiliates,
David A. Agay, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, tells the U.S. Bankruptcy Court for the Southern
District of New York that in addition to store closings and
inventory liquidations, the Debtors attempted to shore-up their
liquidity during the past year through equity and debt infusions:
a. On February 28, 2005, the Debtors' amended their
prepetition loan and security agreement with Wachovia Bank,
National Association, as administrative and collateral
agent and co-lead arranger, and other financial
institutions to provide for a $25,000,000 supplemental loan
and to increase maximum borrowings from $200,000,000 to
$300,000,000.
b. On May 24, 2005, Sun Music and a single non-employee
investor were issued Series A Preferred Stock totaling
$25,000,000.
c. On August 29, 2005, the Debtors obtained an additional
$25,000,000 loan from Harris Bank, N.A., which Sun Capital
Partners III QP, LP, and Sun Capital Partners III, LP,
guaranteed.
Mr. Agay notes that, as can be seen from the Company's
prepetition downsizing efforts and liquidity infusions, the
Debtors could not generate enough cash from operations alone to
meet their prepetition commitments.
A. Debtors Cannot Subsist on Cash Collateral Alone
Mr. Agay points out that in its objection, the Official Committee
of Unsecured Creditors stated that the Debtors have the ability to
survive on cash collateral and achieve all of their cash needs
without any advances under the DIP loan.
The Committee reaches that conclusion only by citing out-of-
context figures and by making misplaced assumptions, Mr. Agay
argues. "In point of fact, the Debtors did not (as of the
petition date), and do not, retain any cash collateral from which
to fund operations."
Mr. Agay also notes that from January through October, the
Debtors burn more cash than they generate from operations at a
rate of around $4,000,000 to $6,000,000 per month. The $2,000,000
to $4,000,000 of the monthly cash burn is due to ordinary course
operations and $2,000,000 results from restructuring costs.
Prior to the Petition Date, any net earnings were swept into
blocked accounts controlled by the Senior Secured Lenders to pay
down amounts owing under the Senior Prepetition Loan Facility.
Mr. Agay relates that because of the continuing losses from
operations, the Debtors have relied on draws under the DIP
Facility revolver to meet their commitments. From the Petition
Date through February 13, 2006, borrowings under the DIP Facility
reached around $43,000,000.
As currently budgeted, from February 14 to March 31, 2006, the
Debtors anticipate drawing an additional $20,000,000 to
$30,000,000 under the DIP Facility revolver. Thus, the prospect
of the Debtors relying on cash collateral simply does not exist,
Mr. Agay says.
B. Unwinding or Replacing the DIP Facility Are Not Viable
Options
Mr. Agay notes that the Committee has advanced two alternative
theories:
(1) If the Court unwinds the roll-up under the DIP Facility of
the $30,000,000 outstanding under the Senior Prepetition
Loan Facility, the Debtors will have enough cash proceeds
on-hand from GOB Sales to fund their operations.
(2) The Debtors should replace the DIP Facility with another
lender (or lenders) willing to take-out the DIP Facility
and provide more favorable terms.
According to Mr. Agay, the Committee's first theory assumes much
and accomplishes little. The Committee hypothesizes that if the
Court unwound the roll-up and paydown of the prepetition senior
secured debt, the Debtors could survive on the GOB Sale proceeds
remaining after repaying the postpetition advances under the DIP
Facility -- i.e., approximately $26,000,000. Under that scenario,
the Debtors likely could survive on cash collateral for a period
of time. However, the Debtors either would require the consent of
the Senior Secured Lenders and Secured Trade Creditors, who
currently support the DIP Facility, and who would not support a
cash collateral arrangement, or would have to make a showing of
adequate protection.
The Debtors believe they have had more than sufficient time to
thoroughly evaluate and market their sale or restructuring
alternatives, and any additional delay would merely deplete estate
assets and reduce the recovery of creditors.
Moreover, Mr. Agay says, the Debtors have not been presented with
a viable offer to replace the DIP Facility.
Mr. Agay relates that on January 25, 2006, the Debtors received a
proposal from General Electric Capital Corporation to replace the
DIP Facility. GECC's proposal contemplates a longer term, a
longer timeline for the Debtors to complete a sale of the company
or present an acceptable business plan, and likely more favorable
borrowing base reserves. However, GECC would require the Debtors
to pay an upfront, nonrefundable work fee of $250,000 to commence
its due diligence and a $750,000 commitment fee upon acceptance of
GECC's commitment letter.
The additional up-front, non-refundable fees significantly
diminish the appeal of a GECC take-out, postpetition financing,
Mr. Agay says. The Debtors also anticipate that their Secured
Trade Creditors will not support payment of those fees or a GECC
replacement financing.
Mr. Agay further argues that the bankruptcy estates will likely
lose value under either the cash collateral or replacement DIP
options.
"While the Debtors understand the Committee's concern for
maximizing value for the bankruptcy estates, the Debtors believe
that the alternatives to the DIP Facility presented by the
Committee, even if viable, may harm, rather than enhance, the
recovery of the Debtors' creditors. While not perfect -- a DIP
financing arrangement rarely is from a debtor's perspective -- the
DIP Facility was, and remains, the best option available to the
Debtors."
Thus, the Debtors assert that the DIP Facility constitutes a
prudent exercise of their business judgment, and the DIP
Facility should be approved on a final basis.
Additional Responses
(1) Secured Trade Committee
Richard S. Toder, Esq., at Morgan, Lewis & Bockius LLP, in New
York City, asserts that Informal Committee of Secured Trade
Vendors are entitled to adequate protection despite their
Intercreditor Agreement to forebear the enforcement of their
liens.
Mr. Toder notes that the Creditors' Committee provides no
justification in seeking to limit the adequate protection
replacement lien granted to the Secured Trade Vendors to the Trade
Collateral.
According to Mr. Toder, the payment of reasonable professional
fees as adequate protection is authorized under the Bankruptcy
Code. Whether the Secured Trade Vendors are entitled ultimately
to retain those payments as compensation for diminution in the
value of their collateral, as part of their oversecured claim
under 506(b), or whether those payments are recharacterized as
payments of principal, need not be decided at this time.
The Secured Trade Vendors, Mr. Toder points out, are the parties
whose interests are truly at risk by the Debtors' continued
operation and use of their collateral and cash collateral. They
are entitled to the adequate protection provided under the DIP
Orders -- a replacement lien on all Collateral and payment of
their Informal Committee's reasonable professional fees as
protection against the diminution in value of their interest in
the Debtors' properties, together with a priority claim under
Section 507(b) of the Bankruptcy Code to the extent that the
adequate protection proves insufficient.
(2) Creditors Committee
According to Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in
New York City, the Court should deny the Trade Creditor Objection
because not only is it a further example of the Trade Creditors'
repeated attempts to usurp the authority granted to the Official
Committee, it is also an empty objection as the Trade Creditors
have no ability to challenge the Secured Lenders by virtue of the
Intercreditor Agreement they entered into.
The Intercreditor Agreement states that the Trade Creditors:
-- acknowledged and agreed that the Secured Lenders had a lien
on certain collateral;
-- agreed that they would not contest the validity,
perfection, priority or enforceability of the Secured
Lender's liens on the Collateral;
-- agreed that they would institute any suit or assert in any
suit, bankruptcy, insolvency or other proceeding, any claim
against the Secured Lenders; and
-- waived their right to object to any proposed financing by
the Secured Lenders.
Mr. Indelicato contends that the Trade Creditors' offer to
investigate the Secured Lenders is meaningless, as they have no
ability to challenge any of their actions.
(3) Wachovia
According to Andrew M. Kramer, Esq., at Otterbourg, Steindler,
Houston & Rosen P.C., in New York City, the Official Committee of
Unsecured Creditors' objection is an attempt by an out-of-the-
money party without a real economic interest to extract some value
for themselves.
Mr. Kramer also says that the Debtors' decision to enter into the
DIP Facility is a sound exercise of their business judgment and
should not be disturbed. The Debtors can't survive on cash
collateral alone.
The Committee's claim that the Debtors could continue operations
through the use of cash collateral because Wachovia Bank,
National Association, is oversecured completely ignores the
obligation to provide adequate protection to the Secured Trade
Creditors, Mr. Kramer notes.
Mr. Kramer states that the approval of the DIP facility containing
cross-collateralization and roll-up is permissible because:
a. the DIP facility is essential to the Debtors' ability to
stay in business and conduct efficient and orderly
competitive sale process;
b. the proposed financing is in the best interest of
Creditors;
c. the Debtors are unable to obtain alternative financing on
acceptable terms as of the Petition Date; and
d. Wachovia would not have agreed to advance funds under the
DIP Facility without the roll-up, cross-collateralization
and other protections.
Moreover, Mr. Kramer points out that each member of the Secured
Trade Creditors Committee executed a Consent to Ratification and
Amendment Agreement, and expressly approved the terms and
conditions of the DIP Facility. Having consented to the DIP
Facility, the Secured Trade Creditors cannot now change its terms.
In addition, Mr. Kramer says, contrary to the assertions of the
Objecting Landlords, Wachovia is not seeking any rights greater
than the Debtors' rights in those leases.
Final Approval
On a final basis, Judge Bernstein permits the Debtors to continue
to borrow money under the $75,000,000 DIP Credit Agreement. The
Debtors will use the loan proceeds to pay administrative expenses
in accordance with the Budget.
In addition, Judge Bernstein authorizes the Debtors to:
* pay the Agent and Lenders on account of the Pre-Petition
Obligations in accordance with the Financing Agreements;
* make all payments and transfers of Estate property to the
Agent; and
* continue all prepetition practices and procedures for the
payment and collection of proceeds of the Collateral, the
turnover of cash, and delivery of property to the Agent and
Lenders, and the funding pursuant to the Financing
Agreements.
The liens and security interests granted in favor of Agent and
Lenders will attach to the proceeds and products derived from the
sale or other disposition of those Leasehold Interests, except
with respect to the express terms of any prepetition lease
document, between the Debtors and any of the Objecting Landlords.
A two-page listing of the Objecting Landlords is available for
free at http://bankrupt.com/misc/Musicland_ObjectingLandlords.pdf
The Loan Agreement or other Financing Agreements will not attach
directly to those Leasehold Interests.
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. Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts. (Musicland Bankruptcy News, Issue
No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NAVISTAR INT'L: Noteholder Group Wants to Negotiate Tender Offer
----------------------------------------------------------------
The Ad Hoc Committee of Senior Noteholders of Navistar
International Corporation (NYSE: NAV), whose members are financial
institutions who include holders of Navistar's $400 million issue
of 6-1/4 % Senior Notes due 2012, advised Navistar that holders of
greater than a majority of the 6-1/4% Senior Notes have agreed
with each other not to tender their 6-1/4% Senior Notes or consent
to the proposed amendments to the Indenture governing the 6-1/4%
Senior Notes. The Committee also said that it expects to
negotiate with the Company regarding revisions to the terms of the
Company's outstanding tender offer for its Senior Notes and is
prepared to accelerate the Note obligations if negotiations are
unsuccessful.
The Committee previously had caused the Trustee for the Senior
Notes to issue a notice of default under the Indenture for the
Notes, which the Company has acknowledged that it received on
February 3, 2006. Navistar disclosed on Feb. 21, 2006, that it
had launched a cash tender offer and consent solicitation for
three series of its outstanding senior note debt securities,
including the 6-1/4% Senior Notes. The members of the Ad Hoc
Committee collectively hold more than a majority in principal
amount of the 6-1/4% Senior Notes.
J. Andrew Rahl, Jr. of Anderson Kill & Olick, P.C., counsel to the
Ad Hoc Committee, commented that "The Ad Hoc Committee has a solid
majority of Noteholders who are united in their effort to
negotiate revised terms with Navistar."
Navistar International Corp. -- http://www.nav-international.com/
-- is the parent company of International Truck and Engine
Corporation. The company produces International(R) brand
commercial trucks, mid-range diesel engines and IC brand school
buses, Workhorse brand chassis for motor homes and step vans, and
is a private label designer and manufacturer of diesel engines for
the pickup truck, van and SUV markets. Navistar is also a
provider of truck and diesel engine parts and service sold under
the International(R) brand. A wholly owned subsidiary offers
financing services.
* * *
As reported in the Troubled Company Reporter on Feb. 7, 2006,
Moody's Investors Service lowered the ratings of Navistar
International Corporation (senior unsecured to B1 from Ba3 and
subordinate to B3 from B2) and placed the ratings under review for
further possible downgrade. Moody's rating actions followed
Navistar's announcement that it has received notice from purported
holders of more than 25% of the company's approximately $200
million senior subordinated exchangeable notes due 2009, claiming
that the company is in default of reporting requirements relating
to the filing of its financial statements for the fiscal year
ending Oct. 31, 2005. The company disputes the allegation of
default. Nevertheless, receipt of the notice of default
represents a further negative development for the company stemming
from its inability to file financial statements in a timely manner
because of accounting issues.
The downgrade and review reflect the heightened financial risk
stemming from uncertainty as to Navistar's ability to file its
financial statements in a timely manner given the number and
complexity of various open items that the company continues to
discuss with its auditors Deloitte and Touche. As a result of
these open issues, Navistar cannot estimate the time frame for the
filing of its October 2005 financial statements.
NOBLE DREW: Committee Gets Okay to Hire Mahoney Cohen as Advisor
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Noble
Drew Ali Plaza Housing Corp.'s chapter 11 case sought and obtained
authority from the U.S. Bankruptcy Court for the Southern District
of New York to retain Mahoney Cohen & Company, CPA, PC, as its
accountants and financial advisors to
As reported in the Troubled Company Reporter on Jan. 25, 2006,
Mahoney Cohen is expected to:
a) assist the Committee in the investigation of the pre-
petition acts, conducts, liabilities and financial
condition of the Debtor and its management and business
operations;
b) assist the Committee in the review of the Debtor's monthly
operating statements and in the evaluation of the Debtor's
cash flow projections;
c) monitor the Debtor's activities regarding cash expenditures
and general business operations and analyze the Debtor's
transactions with vendors, insiders and affiliated
companies;
d) assist the Committee in the review of financial aspects of
any proposed chapter 11 plan and assist in any litigation
proceedings against insiders and other potential
adversaries;
e) attend meetings with representatives of the Committee and
its counsel and prepare presentations to the Committee that
provide analyses and updates on diligence performed; and
f) perform all other accounting and financial advisory
services that are requested by the Committee and its
counsel.
Mahoney Cohen's professionals bill:
Designation Hourly Rate
----------- -----------
Shareholders & Directors $350 - $500
Managers & Senior Managers $265 - $350
Senior Accountants & Staff $95 - $265
Headquartered in Brooklyn, New York, Noble Drew Ali Plaza Housing
Corp., filed for chapter 11 protection on March 25, 2005 (Bankr.
S.D.N.Y. Case No. 05-11915). Gerard R. Luckman, Esq., at
Silverman Perlstein & Acampora, LLP, represents the Debtor. When
the Debtor filed for protection from its creditors, it listed
total assets of $43,500,000 and total debts of $18,639,981.
NOBLE DREW: Court Sustains Panel's Protest on M.R. Beal Retention
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
denied the application of Noble Drew Ali Plaza Housing Corp. to
employ M.R. Beal & Company as its financial and private placement
advisor.
As reported in the Troubled Company Reporter on Jan. 25, 2006,
the Official Committee of Unsecured Creditors asked the Court to
deny the Debtor's request, asserting that M.R. Beal's role as the
Debtor's financial and private placement advisor is inappropriate
and superfluous and complaining that various provisions in the
Firm's engagement letter are vague.
Scope of Work
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, pointed out
that it is inappropriate for M.R. Beal to serve as a private
placement advisor, and facilitate private offerings, since the
Debtor is a non-profit corporation. The Debtor can't issue stock
pursuant to the New York Not-for-Profit Corporation Law.
Mr. Bunin further stated that the Debtor should not be allowed to
pay financial advisory fees for a bank loan that it can get on its
own.
In addition, the Committee's counsel explained that any
significant financing secured by the Debtor's real property, to be
arranged by M.R. Beal, is precluded by approximately $5.3 million
in real estate taxes owed to JER Revenue Services, LLC, and
approximately $4.4 million in property taxes owed to the City of
New York.
Engagement Letter Provisions
The Committee's complaints regarding the content of M.R. Beal's
engagement letter focus on:
-- a $45,000 advisory fee supposedly payable upon the
simple execution of a reorganization plan, without a
clear qualification of what M.R. Beal is expected to
contribute towards plan formulation;
-- a placement fee equal to 3.5% of any consideration raised
from an investor, notwithstanding the Debtor's status as a
non-profit corporation; and
-- exclusivity that prohibit the Debtor from accepting
financing not obtained through M.R. Beal.
Headquartered in Brooklyn, New York, Noble Drew Ali Plaza Housing
Corp., filed for chapter 11 protection on March 25, 2005 (Bankr.
S.D.N.Y. Case No. 05-11915). Gerard R. Luckman, Esq., at
Silverman Perlstein & Acampora, LLP, represents the Debtor.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed total assets of
$43,500,000 and total debts of $18,639,981.
NORTHAMPTON GENERATING: Bad Debt Coverage Cues S&P to Cut Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services that it lowered its ratings on
Northampton Generating Co. L.P.'s series A and series B resource
recovery revenue bonds to 'B+' from 'BB'. Standard & Poor's also
removed the ratings from CreditWatch with negative implications.
The outlook is negative. The bonds were issued by the
Pennsylvania Economic Development Financing Authority on behalf of
the project, which is a net 110 MW waste coal-fired generation
facility based in Northampton, Pennsylvania.
The rating action follows a review of long-term financial
projections for the project. The ratings were originally placed
on CreditWatch Dec. 23, 2005.
"The negative outlook reflects our expectation of continuing
financial vulnerability and worsening debt coverage," said
Standard & Poor's credit analyst Daniel Welt.
The project provides electricity to Metropolitan Edison Co. under
a 25-year energy-only power purchase agreement.
NORTHWEST AIRLINES: 92% of Pilots Vote to Authorize Strike
----------------------------------------------------------
The Air Line Pilots Association, Int'l disclosed that Northwest
Airlines Inc. pilots have authorized a strike if management
imposes onerous working conditions on the pilot group. Northwest
pilots overwhelmingly voted to authorize their union leaders, by a
92.16% margin, to utilize all legal self-help options up to and
including a strike.
"We continue to meet with Northwest management in an effort to
reach a consensual agreement, but the outcome will be decided by
management's actions at the negotiating table," NWA ALPA Chairman
Capt. Mark McClain said. "Our goal is not to strike, but we will
retain all legal self-help options if management forces our hand."
Over the past year, NWA pilots have made significant sacrifices in
an attempt to help save their airline. In December 2004,
Northwest pilots agreed to an annual concessionary package valued
at $265 million a year that included a 15 percent pay cut. In
November 2005, Northwest pilots agreed to another concessionary
package, for an interim period, valued at $215 million which
included an additional 23.9% pay cut. First-year NWA pilots earn
$27,000 per year, while 25-year veteran captains may earn up to
$160,000.
"Northwest pilots have given historical sacrifices to help save
our company, but management continues to overreach by demanding
even more," Capt. McClain said. "I have told Northwest management
on many occasions not to misjudge the will of the Northwest pilot
group. There is only so much Northwest pilots can and will do.
Hopefully, [the] strike authorization results provide Northwest
management with a much needed reality check."
As reported in the Troubled Company Reporter on Feb. 28, 2006, the
U.S. Bankruptcy Court for the Southern District of New York gave
Northwest until today, Mar. 1, 2006, to reach consensual
agreements with the Air Line Pilots Association and the
Professional Flight Attendants Association regarding labor
contracts.
About ALPA
Founded in 1931, The Air Line Pilots Association, International
-- http://www.alpa.org/-- represents 62,000 pilots at 39 airlines
in the U.S. and Canada. ALPA represents approximately 5,000
active NWA pilots and 700 furloughed NWA pilots. The NWA ALPA
website can be accessed at http://www.nwaalpa.org/
About Northwest Airlines Inc.
Northwest Airlines Corporation -- http://www.nwa.com/-- is
the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $14.4 billion in total assets and $17.9 billion in total
debts.
OFFICEMAX(R) INC: Incurs $43.1 Mil. Net Loss in Fourth Quarter
--------------------------------------------------------------
OfficeMax(R) Incorporated incurred a net loss of $43.1 million,
for the fourth quarter of 2005, compared with $700,000 of net
income in the fourth quarter of 2004.
For the full year 2005, OfficeMax's net loss is $73.8 million,
compared with net income of $173.1 million for the same period in
2004.
For the fourth quarter of 2005, OfficeMax's net income excluding
special items is $6.0 million compared with a net loss of $18.7
million in the fourth quarter of 2004.
For the full year 2005, excluding special items, the company
reported net income of $23.5 million compared with net income of
$102.8 million for the same period in 2004.
2006 Outlook
The company anticipates full year 2006 Earnings Before Interest
and Taxes, excluding accounting charges, to be in the range of
2.0% to 2.25% of sales, based on the successful implementation of
key operating initiatives that are expected to improve pre-tax
results by approximately $100 million.
The company expects 2006 total consolidated sales to be flat to
slightly up compared to 2005, Retail segment same store sales
growth to be in the low single digits and Contract segment sales
growth to be in the mid-single digits.
Headquartered in Itasca, Illinois, OfficeMax(R) Incorporated --
http://www.officemax.com/-- is a leader in both business-to-
business office products solutions and retail office products.
OfficeMax delivers an unparalleled customer experience -- in
service, in product, in time savings, and in value -- through a
relentless focus on its customers. The company provides office
supplies and paper, print and document services, technology
products and solutions, and furniture to consumers and to large,
medium and small businesses. OfficeMax customers are served by
approximately 40,000 associates through direct sales, catalogs,
the Internet and approximately 950 superstores. OfficeMax trades
on the New York Stock Exchange under the symbol OMX.
* * *
On Dec. 22, 2005, Moody's assigned Ba2 current issuer, corporate
family and senior unsecured debt ratings to OfficeMax.
Standard & Poor's placed the Company's credit ratings at B+ with
negative outlook on Sept. 28, 2005.
Dominion Bond Rating Service rated OfficeMax's senior unsecured
debt at BB on July 27, 2004, and said the outlook is stable.
OMEGA HEALTHCARE: Exchanging $175M Sr. Notes with Registered Bonds
------------------------------------------------------------------
Omega HealthCare Investors, Inc., is offering to exchange up
to $175 million aggregate principal amount of its outstanding
7% Senior Notes due 2016 and related guarantees issued on
Dec. 30, 2005, for new notes with materially identical terms that
have been registered under the Securities Act of 1933, and are
generally freely tradable.
Terms of the Notes
The exchange notes bear interest at the rate of 7% per year. The
Company will pay interest on the exchange notes on January 15 and
July 15 of each year. The first interest payment will be made on
July 15, 2006. The exchange notes mature on January 15, 2016.
The Company has the option to redeem all or a portion of the
exchange notes at any time on or after January 15, 2011. The
exchange notes will be issued only in registered book-entry form,
in denominations of $1,000 and integral multiples of $1,000.
The notes are guaranteed by certain of the Company's present and
future domestic restricted subsidiaries with unconditional
guarantees of payment that will rank equally with existing and
future senior unsecured debt and senior to existing and future
subordinated debt.
A full-text copy of the Prospectus is available at no additional
charge at http://ResearchArchives.com/t/s?5df
Headquartered in Timonium, Maryland, Omega HealthCare Investors,
Inc. -- http://www.omegahealthcare.com/-- is a real estate
investment trust investing in and providing financing to the
long-term care industry. At September 30, 2005, the Company owned
or held mortgages on 216 skilled nursing and assisted living
facilities with approximately 22,407 beds located in 28 states and
operated by 38 third-party healthcare operating companies.
* * *
As reported in the Troubled Company Reporter on Feb. 1, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Omega Healthcare Investors Inc. to 'BB' from 'BB-'.
In addition, ratings are raised on the company's senior unsecured
debt and preferred stock, impacting $603.5 million in securities.
S&P said the outlook is stable.
As reported in the Troubled Company Reporter on Jan. 24, 2006,
Moody's Investors Service raised the ratings of Omega Healthcare
Investors, Inc. (senior unsecured debt to Ba3, from B1). Moody's
said the rating outlook is stable.
ON TOP COMMS: Wants Until March 20 to Decide on La. Studio Lease
----------------------------------------------------------------
On Top Communications, LLC, and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Maryland to further extend,
until March 20, 2006, the period within which they can elect to
assume, assume and assign, or reject their unexpired
nonresidential real property lease for studio space located at
27104 Highway 23, Port Sulphur, Louisiana 70083.
The Debtor has a lease agreement for the space with Dr. Russell
Rawls.
The Debtors say they have been unable to adequately evaluate the
Louisiana Studio Lease because they can't locate a copy of the
Lease Agreement. The Debtors understand that the rent for that
property is approximately $350 per month. But they can't confirm
if that is the real rent amount because the Debtors haven't been
able to contact Dr. Rawls since Hurricane Katrina struck
Louisiana.
The Debtor's president visited the area and was restricted from
driving to the vicinity to inspect the premises that are the
subject of the Louisiana Studio Lease because of damages to the
property that have not been cleared or repaired.
These circumstances, the Debtors argue, constitute cause, as
required by 11 U.S.C. Sec. 365(d)(4), for an extension of the
lease decision period for the Louisiana Studio Lease.
Headquartered in Lanham, Maryland, On Top Communications, LLC, and
its affiliates acquire, own and operate FM radio stations located
in the Southeastern United States. The Company and its debtor-
affiliates filed for chapter 11 protection on July 29, 2005
(Bankr. D. Md. Case No. 05-27037). Thomas L. Lackey, Esq., of
Bowie, Maryland, represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they estimated assets and debts of $10 million to
$50 million.
ON TOP COMMS: Hires McShane Group as Financial Consultants
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland gave
On Top Communications, LLC, and its debtor-affiliates permission
to employ John J. Robinson, Jr. and the McShane Group as their
financial consultants, nunc pro tunc to Nov. 22, 2005.
McShane Group will:
a) assist and advise the Debtors and their counsel in the
analysis of the past and the Debtors' current financial
position;
b) assist and advise the Debtors and their counsel with respect
to any plan(s) of reorganization, strategic transaction(s),
or capital raising initiatives including the valuation of
consideration that is to be provided;
c) assist the Debtors and their counsel in connection with the
evaluation of a potential sale of the Debtors' assets. Any
consultation would typically involve providing financial and
business comments on the marketing efforts performed to
date related to the potential sale including an analysis of
potential buyers previously evaluated or contacted,
historical and projected financial information, offering
memoranda, data room information, previous offers from
buyers, and other documentation;
d) assist the Debtors and their counsel in identifying
potential buyers that meet the Debtors' specifications or
criteria and commenting on the financial and strategic
appeal of each potential buyer; and
e) assist and advise the Debtors and their counsel in such
other services, including but not limited to, other
financial advisory services, bankruptcy, reorganization, and
related litigation support efforts, tax services, valuation
assistance, other corporate finance/M&A advice, compensation
and benefits consulting, or other specialized services as
may be requested by the Debtors and agreed to by the McShane
Group, which may require separate written engagement
letters.
The Firm will bill the Debtors $250 per hour for services
performed.
McShane Group assured the Court that it does not represent any
interest materially adverse to the Debtors or their estates.
Headquartered in Lanham, Maryland, On Top Communications, LLC, and
its affiliates acquire, own and operate FM radio stations located
in the Southeastern United States. The Company and its debtor-
affiliates filed for chapter 11 protection on July 29, 2005
(Bankr. D. Md. Case No. 05-27037). Thomas L. Lackey, Esq., of
Bowie, Maryland, represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they estimated assets and debts of $10 million to
$50 million.
OUTBOARD MARINE: Trustee Prepares to Make $25 Million Distribution
-----------------------------------------------------------------
Alex D. Moglia, the Chapter 7 Trustee appointed in Outboard Marine
Corporation's bankruptcy cases, sought and obtained authority from
the U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, to:
a) reduce a third-party disputed lien reserve to $3.9 million;
and
b) distribute, on an interim basis, $25 million to the holders
of allowed claims as of Feb. 28, 2006.
Third-Party Disputed Lien Reserve
In excess of $9.1 million remains in the Third-Party Disputed Lien
Reserve to date. The Remaining Lien Reserve exceeds the aggregate
value of the Remaining Lien Claims by more than $5 million.
The Remaining Lien Reserve is from the $11.5 million sale proceeds
held in escrow to provide adequate protection to the disputed
third-party lien claims.
The Escrowed Sale Proceeds were reserved from the proceeds of the
Court-approved sale of substantially all of the Debtor's assets
for about $95 million.
As a term of the sale, all valid liens, claims, and encumbrances
held by third parties attached to the Sale Proceeds with the same
extent, validity and priority as they existed prior to the sale.
Banc of America's Adversary Action
On May 18, 2001, Bank of America, N.A., agent for the Debtor's
prepetition and postpetition lenders, initiated an adversary
proceeding against more than 100 lien claimants. The case, styled
Bank of America v. OMC, et al., Adv. Pro. No. 01-A-00471 (Bankr.
N.D. Ill.), seeks determination of Banc of America's security
interest as superior to the defendants' lien claims.
In a stipulation approved by the Court, Banc of America agreed to
transfer all its rights, title, and interest in the Adversary
Proceeding, as amended, to the Trustee.
Pursuant to the Stipulation, the Trustee and Banc of America have
settled all lien claims except the claims of:
(a) Volvo Penta of the Americas, Inc.;
(b) Household Utilities, Inc.;
(c) Intrepid Molding, Inc.; and
(d) the County of Clayton, Georgia.
Interim Distribution
Over 5,300 claims have been filed against the Debtor asserting
over $3.5 billion owed by the estates. To date, the Trustee has
filed seven omnibus claims objections, asserting various
objections to more than 3,000 claims in excess of $2.5 billion.
The Trustee's determined that there are unencumbered funds
sufficient to satisfy payment in full of all allowed secured and
priority claims and to provide a meaningful interim distribution
to the allowed, non-priority, general unsecured claims.
The Trustee also anticipates that additional funds will be
available for a final distribution to creditors, which will be
sufficient to satisfy any claims that have not been allowed as of
Feb. 28, 2006.
Outboard Marine Corporation and its debtor-affiliates filed for
chapter 11 protection on December 22, 2000 (Bankr. N.D. Ill. Case
No. 00-37405). On August 22, 2001, the Chapter 11 cases were
converted to Chapter 7. On Aug. 24, 2001, Alex D. Moglia was
appointed to serve as the Chapter 7 Trustee. Kathleen H. Klaus,
Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin, LLC serves
as Counsel to the Chapter 7 Trustee.
PERFORMANCE TRANSPORTATION: Court Modifies Terms of BMC Retention
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on Feb. 15, 2006,
Performance Transportation Services, Inc., and its debtor-
affiliates obtained permission from the U.S. Bankruptcy Court for
the Western District of New York to retain BMC Group, Inc., as
their noticing, claims and balloting agent.
BMC specializes in noticing, claims processing, balloting and
other administrative tasks in chapter 11 cases, and has provided
its services in other chapter 11 cases in a variety of
jurisdictions.
The Bankruptcy Court clarifies that the Debtors will have no
obligation to indemnify BMC Group, Inc., or to provide
contribution or reimbursement to BMC, for any losses, claims,
damages, liabilities or expenses that are judicially determined to
have resulted from or agreed by BMC to have resulted from reckless
or willful misconduct, gross negligence, breach of fiduciary duty,
bad faith or self-dealing of BMC.
If before the earlier of the confirmation of a Chapter 11 plan
and the entry of an order closing the Debtors' cases, BMC
believes it is entitled to payment of any amounts by the Debtors
on account of the Debtors' indemnification, contribution or
reimbursement obligations, BMC must seek Court approval of the
payments. The Debtors may not make any payment prior to the
entry of the Court's order approving BMC's request.
BMC's claim for indemnification, contribution or reimbursement
arising from BMC's prepetition performance of services will not
be entitled to administrative expense priority.
Judge Kaplan modifies the retention provisions concerning limiting
liability to invoiced amounts and indirect and consequent damages.
These provisions in the BMC Retention Agreement are deleted and
will have no further force or effect:
(1) Except for a breach of confidentiality, BMC will not liable
to the Debtors with respect to any performance or non-
performance of services, if done in good faith and without
negligence or willful or wanton misconduct.
(2) Except for a breach of confidentiality, in no event will
BMC be liable for any indirect, special or consequential
damages, including loss of anticipated profits or other
economic loss in connection with or arising out of the
services provided.
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).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and 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. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
PERFORMANCE TRANSPORTATION: Gives Adequate Protection to Utilities
------------------------------------------------------------------
Judge Kaplan grants Performance Transportation Services, Inc., and
its debtor-affiliates' request to established procedures to
furnish adequate assurance of payment to their utility providers,
except as to four Utility Providers:
1. Pacific Gas & Electric Company,
2. Southern California Edison,
3. AT&T, and
4. Niagara Mohawk Power Corporation.
The hearing to consider the Debtors' request as to Pacific Gas,
SoCal Edison and AT&T is continued until March 21, 2006.
Judge Kaplan forbids these utilities from altering, refusing or
discontinuing services to the Debtors until the Debtors' request
is resolved at the hearing.
In a separate order, Judge Kaplan directs the Debtors to provide
a $22,922 deposit to Niagara Mohawk on or before February 24,
2006, pursuant to the New York State Public Service Commission
Rules and Regulations. Judge Kaplan further rules that the
procedures set forth in the Utility Motion will not apply to
Niagara.
The Court directs the Debtors to pay all postpetition bills from
Niagara Mohawk within 10 days of receipt. Should the Debtors
fail to timely pay the Deposit or any postpetition invoices,
Niagara is allowed to terminate service to the Debtors upon five
days' written notice.
Furthermore, the Court rules that:
-- any prepetition security held by Niagara will be
automatically recouped or set off against prepetition debt
and will not in any way be considered part of adequate
assurance going forward; and
-- Niagara will have administrative priority for any unpaid
postpetition debt.
Request for Additional Assurances
The Court directs the Utility Providers desiring additional
assurances of payment to serve a request on the Debtors and their
counsel, Kirkland & Ellis LLP. Any Additional Assurance Request
must:
-- be made in writing;
-- set forth the location for which utility services are
provided;
-- include a summary of the Debtors' payment history relevant
to the affected accounts; and
-- provide why the Utility Provider believes the Debtors'
proposed adequate assurance is not a sufficient adequate
assurance of future payment.
The Court gives the Debtors 14 days from receipt of the Request
to resolve the Utility Provider's demand for additional assurance
payment.
Niagara Mohawk Comments
Niagara Mohawk Power Corporation, doing business as National Grid,
wants the U.S. Bankruptcy Court for the Western District of New
York to establish proper procedures in compliance with Section 366
of the Bankruptcy Code, as recently amended under the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005, for the
provision of adequate assurance.
As reported in the Troubled Company Reporter on Feb. 21, 2006,
Performance Transportation Services, Inc., established procedures
to furnish adequate assurance of payment to their utility
providers. A list of these Utility Providers is available of free
at http://bankrupt.com/misc/perf_utilities.pdf
William C. Grossman, Esq., attorney for Niagara Mohawk, notes of a
consistent pattern that has developed in recent Chapter 11 cases:
-- The time period between notice and opportunity to respond
is very short, allegedly due to the fear of service
termination.
-- A small percentage of utilities file objections.
-- A debtor's counsel settles with objecting utilities, but
only "on the courthouse steps" and always off the record.
-- A final order is entered against the non-objection
utilities in the same form as proposed by the debtor.
"The intent appears clear: get a few of these egregious Final
Orders entered so that, in new cases, they can be pointed to as
the precedent already established under BAPCPA," Mr. Grossman
says.
Niagara Mohawk asserts that this is happening in the Debtors'
Chapter 11 cases, where the Debtors' counsel cites recent post-
BAPCPA as authority for the request.
According to Mr. Grossman, Section 366 was enacted, in part, to
overrule the bad law established in Virginia Elec. & Power Co. v.
Caldor, 117 F.3d 646 and its progeny where it was held that
"other security" under the old Section 366 could mean zero
dollars and be satisfied by:
-- a good prepetition payment history;
-- administrative expense priority;
-- the lack of prepetition security; and
-- the availability of DIP financing.
"These decisions have been specifically legislated out of the new
Section 366," Mr. Grossman insists. "Nevertheless, [the Debtors]
continue to cite these cases as valid authority for the
proposition that adequate assurance can mean zero security for
utility.
Mr. Grossman contends that the primary goal of amending Section
366 was to clarify and simplify the meaning of adequate assurance
and how it would be provided to utilities.
The Debtors, however, simplified adequate assurance by proposing
a six-page interim order, with 21 ordered provisions, to be
followed by one or more hearings and a final order, all likely to
take substantially longer to resolve that the 30 days from filing
envisioned by Congress, Mr. Grossman notes. Utilities are given
around one week to file an objection to the Debtors' proposed
adequate assurance or risk having to live with whatever draconian
relief that the Debtors decided to unilaterally offer.
Regarding the procedure under which adequate assurance is to be
furnished to a utility, the new law directs the debtor or trustee
to provide adequate assurance, "satisfactory to the utility",
within 30 days of filing, or service may be terminated. If a
party-in-interest disagrees with the adequate assurance amount,
then a motion may be filed after the assurance has been received.
The Debtors have turned the statute on its head by filing the
Utility Motion and putting the burden of proof on the utility to
show why the Debtors' offer of assurance is not adequate, Mr.
Grossman argues.
"There is so much blatantly wrong with the [Debtors'] Utility
Motion. . . ."
Accordingly, Niagara Mohawk asks the Court to write and publish a
decision outlining proper procedures or guidelines for the new
Section 366, post-Caldor.
Mr. Grossman tells the Court that Niagara Mohawk has 13 accounts
with the Debtors instead of the three that the Debtors have
listed. Pursuant to the New York State Public Service Commission
regulations, Niagara asserts that it is entitled to a $61,400
security deposit for those accounts as adequate assurance.
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).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and 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. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
PERFORMANCE TRANSPORTATION: Can Continue Employing OCPs
-------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
authorized Performance Transportation Services, Inc., and its
debtor-affiliates to continue to employ, in the ordinary course 15
professionals, without the submission of separate employment and
compensation applications.
The OCPs provide various legal, accounting, auditing, tax and
other services for the Debtors, Garry M. Graber, Esq., at Hodgson
Russ LLP, in Buffalo, New York, relates. The Debtors believe
that employing the OCPs is essential to avoid disruption of their
businesses.
Committee's Comments
William F. Savino, Esq., at Damon & Morey LLP, in Buffalo, New
York, informs the Court that the Official Committee of Unsecured
Creditors has sought some information from the Debtors with
respect to their request.
In the Debtors' request, Mr. Savino notes that:
-- the scope of the matters being handled by the Ordinary
Course Professionals is not specified;
-- the number of the OCPs is not disclosed;
-- the overall cap for compensation to all the OCPs is not
provided; and
-- the Debtors have not yet provided the memorialization,
history, projections and detail of the OCP Procedures.
Any payment on the OCP Procedures needs to be considered and made
in consultation with and after approval by Huron Consulting
Group, the Committee's financial advisors, Mr. Savino asserts.
If the Debtors provide the lacking information regarding the OCPs
and consent to the inclusion of Huron as a Notice Party, the
Committee will support the Debtors' request.
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).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and 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. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
PRIMEDIA INC: Posts $13.7 Million Net Loss in Fourth Quarter
------------------------------------------------------------
PRIMEDIA Inc. (NYSE: PRM) reported its full year and fourth
quarter 2005 results.
For the fourth quarter ended Dec. 31, 2005, the company reported
$13.7 million net loss, compared to a $13.5 million of net income
for the same period in 2004. For the full year ended Dec. 31,
2006, the company had a $564.6 million of net income, compared to
a $35.5 million of net income for the same period in 2004.
The Company significantly improved the balance sheet during 2005
by divesting non-strategic assets and retiring or refinancing
higher coupon obligations. Debt maturities have been pushed out
with no significant maturities until 2010, and the Company has
reduced its multiple of net debt and preferred to Segment EBITDA
(including discontinued operations not yet sold or shut down) to
7.5x from 12x since September 30, 2001. On December 31, 2005, net
debt was $1.46 billion, with ample unused bank facilities and more
than $1 billion of NOLs.
Last quarter, the Company announced that its Board of Directors
authorized management, along with advisors Goldman Sachs and
Lehman Brothers, and counsel Simpson Thacher & Bartlett, to
explore the separation of its businesses via a tax-free spin-off
into two separate publicly-traded companies. The plan being
contemplated would separate PRIMEDIA's Consumer Guides Segment
from PRIMEDIA's Enthusiast Media and Education Segments. The
Company's management continues to examine all of the relevant
issues before making a recommendation to the Board of Directors,
including how a spin-off would impact taxes, debt, employees,
customers, shareholders and debt holders. The primary focus of
management and employees is improving results in 2006. Hence, the
exploration of the separation may take longer than initially
anticipated. The Company will make an announcement when any
determinations are made by its Board of Directors.
Depreciation, Amortization, and Interest Expense
Depreciation expense was approximately $11.6 million in the fourth
quarter 2005, including a $4.4 million non-cash impairment
provision relating to the Education Segment for certain long-lived
depreciable assets as required by SFAS 144, compared to $7.6
million in the same period of the prior year. Amortization
expense was $11.9 million in the fourth quarter 2005, including an
$8.9 million impairment provision relating to the Education
Segment and resulting from the Company's impairment test for
intangible assets under SFAS 142, "Goodwill and Other Intangible
Assets". Amortization expense was $9.2 million in the fourth
quarter 2004 including impairment charges of $6.7 million in the
Education Segment. Interest expense was approximately $32.3
million in the fourth quarter 2005, compared to $33.3 million in
2004. The decrease of $1.0 million was due to lower average debt
levels, partially offset by higher interest rates.
Severance Related to Separated Senior Executive
The Company recorded a charge of approximately $1.8 million in the
fourth quarter 2005 relating to severance of the former President
and CEO.
Discontinued Operations
In the fourth quarter 2005, the Company decided to actively pursue
the sales of its Crafts and History Groups included in the
Enthusiast Media Segment. Additionally, in the fourth quarter
2005, the Company decided to discontinue the Software on Demand
(SOD) division of Channel One included in the Education Segment.
Also, the Company sold Ward's Automotive Group (Ward's), included
in the Enthusiast Media Segment. The operations of the Crafts and
History Groups, SOD and Ward's have been classified as
discontinued operations for all periods presented, in accordance
with the requirements of SFAS 144, "Accounting for the Impairment
or Disposal of Long-lived Assets."
Call of Preferred Stock and Notes for Redemption
On October 31, 2005, the Company redeemed all of its outstanding
shares of $8.625 Series H Preferred Stock (with an aggregate
liquidation preference of approximately $212 million) and all
outstanding 7 5/8% Senior Notes due 2008 in an aggregate principal
amount of approximately $146 million.
The proceeds of the $500 million Term Loan B credit facility,
which was closed in September, 2005, together with the proceeds
from the sale of the Company's Business Information segment were
used to repay bank debt and redeem the Series H Preferred Stock
and the 7 5/8% Senior Notes.
Liquidity and Leverage
The Company has more than adequate financial resources to meet its
cash needs and service its debt and other fixed obligations for
the foreseeable future. As of December 31, 2005, the Company had
approximately $250 million in cash and unused credit lines,
reflecting the receipt of payment for the sale of its Business
Information segment, the proceeds of its new Term Loan B credit
facility and the decrease in its Revolving Credit Facility from
$355 million to $277 million. The negative swing in Free Cash
Flow from 2004 to 2005 results from the decrease in Segment EBITDA
and an increase in working capital (mostly timing differences),
partially offset by lower debt service and capital expenditures.
For purposes of calculating Free Cash Flow, discontinued
operations are included until sold or shut down. Hence, the
results of the Business Information segment, which was sold at the
end of the third quarter of 2005 and which had its best quarter in
2004 in the fourth quarter, were included in the 2004 Free Cash
Flow calculation for the full year but only for three quarters for
the 2005 Free Cash Flow calculation. The leverage ratio, as
defined by the Company's bank credit agreements, for the 12 months
ended December 31, 2005, is estimated to be approximately 5.9
times versus the permitted maximum of 6.25 times. The amount
available for "Restricted Payments" as determined in accordance
with the indentures relating to the 8 7/8% Senior Notes, the 8%
Senior Notes and the Floating Rate Notes is estimated to be
approximately $375 million at December 31, 2005.
As of September 30, 2005, the Company's balance sheet showed $1.7
billion in total assets and total liabilities of $2.3 billion,
resulting in a stockholders deficit of $558,243,000.
PRIMEDIA Inc. -- http://www.primedia.com/-- is a targeted media
company which owns more than 200 brands that connect buyers and
sellers through:
* print publications,
* web sites,
* events,
* newsletters, and
* video programs.
* * *
As reported in the Troubled Company Reporter on October 27, 2005,
Moody's Investors Service affirmed these PRIMEDIA ratings:
* $300 million of 8.0% senior notes due 2013 -- B2
* $470 million of 8.875% senior notes due 2011 -- B2
* $175 million of floating rate notes due 2010 -- B2
* Corporate Family rating -- B2
* Speculative grade liquidity rating -- SGL - 2
and changed the rating outlook to developing from stable following
the company's announcement that it is exploring the possible
separation of its businesses, via a spin-off, into
two separate publicly-traded companies.
PXRE GROUP: Considers Reducing Share Premium Account to Zero
------------------------------------------------------------
PXRE Group Ltd., incurred a net loss before convertible preferred
share dividends of $446.5 million for the quarter ended Dec. 31,
2005 compared to net income before convertible preferred share
dividends of $32.8 million in the fourth quarter of 2004.
PXRE states that the net loss in the fourth quarter of 2005
principally reflects losses from Hurricane Wilma and increased
estimates of losses from Hurricanes Katrina and Rita.
As of Dec. 31, 2005, the Company's fully diluted shares
outstanding are approximately 77.4 million while its shareholders'
equity is $465.3 million.
As of Sept. 30, 2005, the Company had income tax recoverables of
$47.8 million.
The Company has recorded a valuation allowance against certain
assets, which reduced its income tax recoverable to $6.3 million
as of Dec. 31, 2005. The amount represents expected tax refunds
related to prior periods that are expected to be received in 2006.
The result of the recording of the valuation allowance is the
reversal of approximately $30.9 million of tax benefits that had
previously reduced the net impact of Hurricanes Katrina and Rita
on the Company's results at Sept. 30, 2005.
Share Premium Account
Due to the size of the Company's share premium account, which is
$550.0 million as of Dec. 31, 2005, it is currently prohibited
under Bermuda company law from paying dividends or making
distributions from its contributed surplus to its shareholders.
In order for PXRE to continue to have the flexibility to pay
dividends, its Board of Directors has determined to reduce the
share premium account to zero and allocate $550.0 million to the
Company's contributed surplus as permitted under Bermuda company
law.
With operations in Bermuda, Europe and the United States, PXRE --
http://www.pxre.com/-- provides reinsurance products and services
to a worldwide marketplace. The Company's primary focus is
providing property catastrophe reinsurance and retrocessional
coverage. The Company also provides marine, aviation and
aerospace products and services. The Company's shares trade on
the New York Stock Exchange under the symbol "PXT."
* * *
PXRE carries Standard & Poor's and A.M. Best's BB- credit ratings.
The Company's senior unsecured debt has a BB rating from Fitch.
The thee agencies assigned these ratings in Feb. 2006.
RAMP SERIES: S&P Junks Ratings on Two Certificate Classes
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on classes
M-I-3, M-I-2, and M-II-3 from RAMP Series 2002-RS1 Trust.
Concurrently, the rating on class M-I-2 is placed on CreditWatch
with negative implications. Additionally, the ratings on four
classes from the same transaction are affirmed.
The lowered ratings reflect:
-- continued erosion of credit support due to adverse
collateral pool performance;
-- overcollateralization that has been completely depleted for
the fixed-rate group and reduced to $286,982 for the
adjustable-rate group; and
-- at least 30% of the cumulative losses have occurred in the
past 12 months for both loan groups.
Credit support for the series is provided by:
* subordination,
* excess spread, and
* overcollateralization.
The rating on class M-I-2 is placed on CreditWatch negative
because actual realized losses are greater than original
projections. The depletion of overcollateralization and the high
level of losses experienced by the transaction (monthly losses
averaged $212,794 for the past six months and $227,864 for the
past year) increase the likelihood of a write-down to the
class M-I-2 and M-I-3 certificates. Standard & Poor's will
continue to monitor the performance of this transaction. If
delinquencies and losses continue to increase, it is likely that
Standard & Poor's will take further negative rating actions.
The affirmations reflect actual and projected credit support
percentages that adequately support the current ratings. As of
the January 2006 distribution date, the transaction had serious
delinquencies of 17.11% for the fixed-rate loan group and 42.98%
for the adjustable-rate loan group. Cumulative realized losses
were 2.59% for the fixed-rate loan group and 5.79% for the
adjustable-rate loan group. Furthermore, the transaction benefits
from the cross-collateralization of excess interest from the
fixed- and adjustable-rate loan groups to cover losses.
The collateral for these loans consists of fixed- and adjustable-
rate, first- or second-lien loans, secured primarily by one- to
four-family residential properties.
Ratings lowered:
RAMP Series 2002-RS1 Trust
Residential mortgage-backed certs
Rating
Class To From
----- -- ----
M-I-3 CCC BBB
M-II-3 CCC BBB-
Rating lowered and placed on creditwatch negative:
RAMP Series 2002-RS1 Trust
Residential mortgage backed certs
Rating
Class To From
----- -- ----
M-I-2 BBB-/Watch Neg A
Ratings affirmed:
RAMP Series 2002-RS1 Trust
Residential mortgage backed certs
Class Rating
----- ------
A-I-5*, M-II-1 AAA
M-I-1 AA
M-II-2 A-
* Denotes bond-insured class rating that reflects the financial
strength of the bond insurer.
RAVEN MOON: Registers 400MM Common Shares Under Compensation Plan
-----------------------------------------------------------------
Raven Moon Entertainment, Inc., filed a Registration Statement
with the Securities and Exchange Commission to allow the resale of
400,000,000 shares of its common stock issuable under its 2005
Amended And Restated Equity Compensation Plan. The common shares
are valued at $600,000 at $0.0015 per share.
This is not the first distribution under the Plan. As reported in
the Troubled Company Reporter on Jan. 5, 2006, the Company also
registered 800,000,000 common shares issuable under the Plan.
The Company's authorized stock consists of 15,000,000,000
authorized shares of Common Stock, par value $.0001 per share,
513,806,941 shares of which were outstanding as of Feb. 21, 2006,
and 800,000,000 authorized shares of Preferred Stock, par value
$.0001 par value, 487,750 shares of which were outstanding as of
Feb. 21, 2006.
Each common share is entitled to one vote, either in person or by
proxy, on all matters that may be voted on at a shareholders
meeting, including the election of directors. The holders of
Common Stock:
(1) have equal, ratable rights to dividends from funds legally
available, when, as and if declared by the Board of
Directors of the Company;
(2) are entitled to share ratably in all of the assets of the
Company available for distribution to holders of Common
Stock upon liquidation, dissolution or winding up of the
affairs of the Company;
(3) do not have preemptive or redemption provisions; and
(4) are entitled to one noncumulative vote per share on all
matters on which shareholders may vote at all meetings of
shareholders.
The Company has appointed Florida Atlantic Stock Transfer, Inc.
7130 Nob Hill Road, Tamarac, Florida 33321, as transfer agent and
registrar for the Common Stock and Preferred Stock.
A full-text copy of the 2005 Equity Amended and Restated
Compensation Plan is available for free at
http://ResearchArchives.com/t/s?418
A full-text copy of the Registration Statement is available for
free at http://ResearchArchives.com/t/s?5e5
Raven Moon Entertainment, Inc. -- http://www.ravenmoon.net/--
develops and produces children's television programs and videos,
CD music. At http://www.ginadskidsclub.com/Raven Moon sells
DVDs, music CDs and plush Cuddle Bug toys. Raven Moon also talks
about music publishing and talent management on its Web site.
At Sept. 30, 2005, the company's balance sheet showed a $1,871,796
stockholders' deficit.
REGIONAL DIAGNOSTICS: Court Approves Disclosure Statement
---------------------------------------------------------
The Honorable Pat E. Morgenstern-Clarren of the U.S. Bankruptcy
Court for the Northern District of Ohio approved the adequacy of
the Second Amended Disclosure Statement explaining Regional
Diagnostics, L.L.C., and its debtor-affiliates' Joint Plan of
Liquidation. Judge Morgenstern-Clarren determined that the Second
Amended 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.
Overview of the Plan
The Plan provides for the establishment of Newco, an entity formed
or funded by the Existing Lenders as the successful purchaser of
the Debtors' operating assets.
Under the Court-approved modified Plan, these claims will recover
100%, with all obligations to be assumed by Newco:
a) Administrative Claims;
b) Priority Tax Claims;
c) Class 1 Other Priority Claims; and
d) Class 3 Other Secured Claims.
The Existing Lender Secured Claims will also be paid in full with
obligations to be assumed by Newco, however, the holders have
already received, through the Existing Lender Agent, the value of
their secured claim through its credit bid and have already waived
the right to any Distribution on account of any General Unsecured
Claim.
Class 4 General Unsecured Claims in these subclasses will are
projected to recover 5% under the modified Plan:
Type of Claim Estimated Allowed Claim
------------- -----------------------
Class 4(a) $11,380,556
Seller Note Unsecured Claims
Class 4(b) $15,788,768
Subordinated Lender Claims
Class 4(c) $4,000,000
Trade Claims
All Non-Compensatory Damages Claims will be discharged as of the
Effective Date, and Class 6 RDH Interests will receive no
Distribution under the Plan.
Headquartered in Warrensville Heights, Ohio, Regional Diagnostics,
L.L.C. -- http://www.regionaldiagnostic.com/-- owns and operates
27 medical clinics located in Florida, Illinois, Indiana, Ohio and
Pennsylvania. The Company and its debtor-affiliates filed for
chapter 11 protection on April 20, 2005 (Bankr. N.D. Ohio Case No.
05-15262). Jeffrey Baddeley, Esq., at Baker & Hostetler LLP
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they estimated
assets of $10 million to $50 million and debts of $50 million to
$100 million.
RELIANT ENERGY: Reports Fourth Quarter Financial Results
--------------------------------------------------------
Reliant Energy, Inc., reported a loss from continuing operations
before income taxes of $255 million for the fourth quarter of
2005, compared to $324 million for the same period of 2004.
The reported numbers include net losses from unrealized energy
derivatives of $86 million and $138 million, respectively for 2005
and 2004. Loss from continuing operations before income taxes was
$668 million for the twelve months ended December 31, 2005,
compared to $392 million for the same period of 2004. The
reported numbers include net losses from unrealized energy
derivatives of $177 million and $224 million, respectively for
2005 and 2004.
"Since our third-quarter call, we have undertaken an in-depth
review of our strategy and have identified several elements that
are critical to unlocking the value of the company," said Joel
Staff, chairman and chief executive officer. "Our priorities for
2006 will include completing the transition to a fully competitive
retail market in Texas, converting to an open model in our
wholesale business, improving the commercial capacity factor of
our generating plants and managing our collateral exposure to
reduce postings by $1 billion by year end. These measures,
combined with recent commodity prices, are expected to yield more
than $1 billion in annual open EBITDA."
Open EBITDA (earnings before interest, income taxes, depreciation
and amortization) was $200 million for the fourth quarter of 2005,
compared to $50 million for the fourth quarter of 2004. The
company believes that open EBITDA provides a meaningful
representation of the earnings power of the company as it excludes
the impact of historical wholesale hedging activity, gains on the
sales of emission allowances, gains or losses on the sales of
assets and gains or losses on the sales of equity method
investments. The increase was primarily related to improvements
in wholesale unit margins and increased economic hours, partially
offset by lower retail gross margin and a reduction in the
commercial capacity factor for the wholesale generation assets.
Adjusted EBITDA was $47 million for the fourth quarter of 2005,
compared to $95 million for the fourth quarter of 2004. The
reduction was primarily related to lower gross margin, partially
offset by net gains from the sales of emission allowances and
lower expenses. Adjusted EBITDA for the year ended Dec. 31, 2005,
was $697 million compared to $719 million for the same period of
2004. The reduction was primarily related to lower retail gross
margin, partially offset by net gains from the sales of emission
allowances and lower expenses.
During the year ended December 31, 2005, the company reported a
$1,110 million use of cash in continuing operations from operating
activities, compared to cash provided in continuing operations of
$5 million in 2004. The reported numbers include increases in
cash margin deposits totaling $1,214 million in 2005 and $451
million for 2004. Free cash flow from continuing operations for
the year ended December 31, 2005, was $22 million, compared to
$274 million in 2004. The decrease in free cash flow was
primarily related to lower gross margin and changes in working
capital.
Headquartered in Houston, Texas Reliant Energy, Inc. --
http://www/reliant.com/-- provides electricity and energy
services to retail and wholesale customers in the U.S. The company
provides energy products and services to approximately 1.9 million
electricity customers, ranging from residences and small
businesses to large commercial, industrial, governmental and
institutional customers, primarily in Texas.
Reliant also serves commercial and industrial clients in the PJM
(Pennsylvania, New Jersey, Maryland) Interconnection. The company
is one of the largest independent power producers in the nation
with more than 19,000 megawatts of power generation capacity in
operation or under contract across the U.S. These strategically
located generating assets utilize natural gas, wind, fuel oil and
coal.
* * *
As reported in the Troubled Company Reporter on Feb. 20, 2006,
Fitch Ratings downgraded Reliant Energy, Inc.'s issuer default
rating to 'B' from 'B+'. At the same time, Fitch took these
rating actions:
RRI
-- Senior secured debt affirmed at 'BB-'/ Recovery Rating
upgraded to 'RR2' from 'RR3';
-- Senior subordinated convertible notes affirmed at 'B'/ RR
upgraded to 'RR4' from 'RR5'.
Fitch said RRI's Rating Outlook is Stable.
RURAL CELLULAR: Equity Deficit Tops $651.98 Million at December 31
------------------------------------------------------------------
Rural Cellular Corporation (NASDAQ:RCCC) delivered its financial
results for the fourth quarter and fiscal year ended December 31,
2005, to the Securities and Exchange Commission on Feb. 21, 2006.
Richard P. Ekstrand, the company's President and Chief Executive
Officer, commented: "2005 was yet another year where we executed
our network strategy of leveraging 850 MHz spectrum in our rural
markets. This has resulted in growth on the roaming front,
increasing LSR, increasing levels of USF payments, and exceeding
Adjusted EBITDA expectations. As we look to 2006, we are keenly
focused on improving customer retention and adding value to our
customers."
RCC's fourth quarter highlights include:
* Adjusted EBITDA increased to $54.4 million,
* Continued growth in roaming revenue,
* Continued network construction and handset migration,
* LSR increased from new technology customers, and
* Sale of $175 million of seven-year senior subordinated
floating rate notes.
Revenue and Customers
Positively affecting service revenue was increased LSR. Driving
the higher LSR was increased access and features revenue together
with increased Universal Service Fund payments. USF payments for
the quarter and year ended December 31, 2005 were $10.5 million
and $40.8 million compared with $9.1 million and $28.2 million
last year. Partially offsetting these increases for the year was
the impact of declines in postpaid and prepaid customers. RCC's
service revenue for the quarter decreased slightly to $96.0
million while increasing 3% to $387.8 million for the year.
The Company's total customers, (including postpaid, prepaid and
wholesale), increased by approximately 1,000 during the fourth
quarter bringing total customers to 706,000 at year end, down from
730,000 as of December 31, 2004. The Company's fourth quarter
improvement in customer retention over the third quarter of 2005
reflects progress made in the billing, technology, and service
related issues encountered during the commercial introduction of
its GSM networks. Reflecting customer migration to new technology
products and services together with 44,000 postpaid customer gross
adds, approximately 47% of the Company's postpaid customers were
using new technology devices at December 31, 2005.
Roaming revenue for the quarter increased 53% to $36.3 million
despite roaming yield declining to $0.12 from $0.15 per minute
last year. Additionally, 90% of the Company's roaming minutes
during the fourth quarter of 2005 were carried on the Company's
GSM and CDMA networks, which is an increase from 47% a year ago.
Operating Costs
RCC's network costs for the fourth quarter and year ended December
31, 2005 increased to $31.9 million and $120.3 million. These
increases reflect the additional costs of operating multiple
networks (analog, TDMA, GSM/GPRS/EDGE and CDMA/1XRTT), and over
200 cell sites added since December 31, 2004. Incollect expense,
a component of network costs, declined slightly to $11.5 million
for the quarter while it increased 2.5% for the year to $46.9
million. Per minute incollect cost for the fourth quarter and
full year 2005 was approximately $0.10 per minute compared to
$0.13 last year.
Selling, General and Administrative increased 4% to $38.0 million
for the quarter due to increased customer service and billing
expenses primarily related to servicing new technology products.
Additionally, the Company incurred higher bad debt expense and
pass-through regulatory fees during 2005.
Increased interest expense during the fourth quarter reflects the
Company's higher debt level resulting from the November 2005
issuance of $175 million floating rate senior subordinated notes
and the borrowing of $58 million under the revolving credit
agreement. Partially offsetting the impact of interest expense
from increased debt were gains resulting from the exchange of
common stock for senior exchangeable preferred stock. Cash
interest expense, which included $17.8 million in senior
exchangeable preferred stock dividends paid in October 2005, was
$29.6 million for the quarter and $133.0 million for all of 2005.
Gain on exchange of 11 3/8% senior exchangeable preferred stock
preferred stock for common stock. During the fourth quarter, the
Company exchanged 1,000 shares of its 11 3/8% senior exchangeable
preferred stock for an aggregate of 82,556 shares of its Class A
common stock in a negotiated transaction. For the year ended
December 31, 2005, the Company exchanged an aggregate of 10,535
shares of its senior exchangeable preferred stock for an aggregate
of 1,152,746 shares of its Class A common stock in negotiated
transactions. The shares were issued in reliance upon the
exemption from registration provided in Section 3(a)(9) of the
Securities Act of 1933.
Conversion of Class T Preferred Stock
In the fourth quarter the Company's Class T preferred stock was
converted back into its original number of common shares. This
conversion resulted in a $6.7 million gain recorded within
dividend expense. Accordingly, preferred stock dividends for the
quarter were ($3.1) million as compared to $3.3 million in 2004.
Capital Expenditures
Total capital expenditures for the fourth quarter and year were
approximately $17.5 million and $95.0 million, respectively.
As of Dec. 31, 2005, Rural Cellular's balance sheet showed $1.48
billion in total assets and total liabilities of 1.96 billion
resulting in a stockholders deficit of $651,982,000.
Headquartered in Alexandria, Minnesota, Rural Cellular Corporation
-- http://www.unicel.com/-- provides wireless communication
services to Midwest, Northeast, South and Northwest markets
located in 15 states.
As reported in the Troubled Company Reporter on Feb. 6, 2006,
Fitch assigned these ratings to Rural Cellular Corporation:
* Issuer default rating (IDR) 'CCC';
* $60 million first lien credit facility 'B/RR1';
* $510 million second lien secured notes 'B-/RR2';
* $325 million senior unsecured notes 'CCC-/RR5';
* $475 million senior subordinated notes 'CC/RR6';
* 11.375% senior exchangeable preferred stock 'C/RR6';
* 12.25% junior exchangeable preferred stock 'C/RR6'.
Fitch said the Rating Outlook was Stable at that time.
SACO I TRUST: Moody's Assigns Ba1 Rating to Class II-B-4 Certs.
---------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by SACO I Trust 2006-2, Mortgage-Backed
Certificates, Series 2006-2, and ratings ranging from A3 to Ba1 to
the mezzanine and subordinate certificates in the deal.
The securitization is backed by Southstar Funding LLC, Opteum
Financial Services, LLC, American Home Mortgage Investment Corp.,
and Impac Mortgage Corp. for Group I; and Suntrust Mortgage Inc.,
and Waterfield Mortgage Company for Group II; and various other
originators originated fixed-rate, closed-end subprime mortgage
loans acquired by EMC Mortgage Corporation.
The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination,
overcollateralization, and excess spread. Moody's expects
collateral losses to range from 7.90% to 8.40% for Group I and
collateral losses to range from 7.30% to 7.80% for Group II.
Lasalle Bank, N.A. will act as master servicer.
The complete rating actions are:
SACO I Trust 2006-2
Mortgage-Backed Certificates, Series 2006-2
* Class I-A, Assigned Aaa
* Class II-A, Assigned Aaa
* Class I-M, Assigned A3
* Class II-M, Assigned A3
* Class I-B-1, Assigned Baa1
* Class I-B-2, Assigned Baa2
* Class I-B-3, Assigned Baa3
* Class I-B-4, Assigned Ba1
* Class II-B-1, Assigned Baa1
* Class II-B-2, Assigned Baa2
* Class II-B-3, Assigned Baa3
* Class II-B-4, Assigned Ba1
SANITARY & IMPROVEMENT: Has Until May 1 to File Chapter 9 Plan
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nebraska approved
the joint request of the Sanitary & Improvement District 425 of
Douglas County, Nebraska, and the Official Committee of Unsecured
Creditors appointed in the District's Chapter 9 case to extend,
until May 1, 2006, the time within which a plan of adjustment for
the Debtor's debts may be filed.
The Debtor and the Committee tell the Court that although the
Committee was appointed on Nov. 15, 2005, it was only on Jan. 24,
2006, that a Committee Chairman was appointed and the Committee
employed a counsel. Since then, the Debtor and the Committee have
been continuously meeting, negotiating and working together to
formulate a consensual plan.
The requested extension is therefore necessary to give the Debtor
and the Committee more time and opportunity to analyze the
existing financial information and determine whether increasing
the tax valuation for the property within the Sanitary &
Improvement District 425 of Douglas County can increase the funds
currently being generated by the Debtor.
Headquartered in Omaha, Nebraska, Sanitary & Improvement District
425 of Douglas County, Nebraska, filed for chapter 9 protection on
Oct. 26, 2005 (Bankr. D. Neb. Case No. 05-85871). Mark James
LaPuzza, Esq., at Pansing Hogan Ernst & Bachman, LLP, represents
the Debtor in its restructuring efforts. When the Debtor filed
for protection from its creditors, it estimated assets between
$500,000 to $1 million and estimated debts between $10 million to
$50 million.
SANITARY & IMPROVEMENT: Files Amended List of Unsecured Creditors
-----------------------------------------------------------------
The Sanitary & Improvement District 425 of Douglas County,
Nebraska's chapter 9 case filed with the U.S. Bankruptcy Court for
the District of Nebraska an amended Schedule F listing creditors
holding unsecured nonpriority claims against its estate.
The Debtor filed the amendment on Feb. 22, 2006. A full-text copy
of the Debtor's 30-page amended Schedule F is available for a fee
at:
http://www.researcharchives.com/bin/download?id=060228040019
Headquartered in Omaha, Nebraska, Sanitary & Improvement District
425 of Douglas County, Nebraska filed for chapter 9 protection on
Oct. 26, 2005 (Bankr. D. Nebr. Case No. 05-85871). Mark James
LaPuzza, Esq., at Pansing Hogan Ernst & Bachman, LLP, represents
the Debtor in its restructuring efforts. When the Debtor filed
for protection from its creditors, it estimated assets between
$500,000 to $1 million and estimated debts between $10 million to
$50 million.
SHUMATE INDUSTRIES: Raises $2.25MM from Private Equity Placement
----------------------------------------------------------------
Shumate Industries, Inc. (OTCBB:SHMT), has raised $2.25 million in
new equity capital in a private placement of 3,750,000 shares of
its common stock. The transaction, which included $250,000 from a
lead investor closing in December 2005, had its final closing on
February 22, 2006. First Montauk Securities Corporation, an NASD
member firm, acted as selling agent.
Commenting on the company's new capital injection, Matthew
Flemming CFO stated, "The originally targeted amount of
$1.5 million was raised to $2.25 million based on strong
investor interest in our technology-oriented energy services
company. We intend to use this capital for the launch our new
Hemiwedge(R) valve technology, working capital, and general
corporate purposes."
The company's total outstanding common shares after the offering
are approximately 15,449,500. First Montauk received a cash
commission and warrants to purchase up to 250,000 of the company's
common shares for its services within this offering. In
connection with this offering, the company agreed to file a
registration statement for the resale of these shares and the
shares underlying the First Montauk warrants on form SB-2 with the
SEC no later than April 30, 2006.
Additionally, Shumate Industries' senior lender agreed to forgive
approximately $2.0 million of its $5.6 million term loan as an
incentive to attract this equity. The restated term loan, to be
amended this quarter, will have a revised principal balance of
approximately $3.6 million and an interest rate of prime rate plus
2%. The debt forgiveness will generate a non-cash gain of
approximately $2.0 million, before operations, on the company's
income statement within its first quarter 2006 financial
statements. Management estimates the reduced amount of the term
note will save the company approximately $180,000 in annual cash
flow from reduced interest expense.
Headquartered in Conroe, Texas, Shumate Industries Inc. --
http://www.shumateinc.com/-- formerly known as Excalibur
Industries, serves the energy field services market through its
Shumate Machine Works operating subsidiary. With its roots going
back more than 25 years, Shumate is a contract machining and
manufacturing company utilizing state-of-the-art 3-D modeling
software, computer numeric controlled machinery and manufacturing
expertise to perform close tolerance and precision machining for
energy field service applications.
Its products include expandable tubular launchers and liner
hangers for oil & gas field service applications, blow-out
preventers, top drive assemblies, directional drilling products,
natural gas measurement equipment, control & check valves and sub-
sea control equipment used in energy field service.
On March 9, 2005, Excalibur Holdings, Inc., the parent corporation
of Shumate, filed a voluntary petition for protection under
Chapter 7 of the U.S. Bankruptcy Code in the United States
Bankruptcy Court, Southern District of Texas. As a result of this
bankruptcy filing, 100% of the capital stock of Shumate has become
the sole asset of the bankruptcy estate. The capital stock of
Shumate has been pledged to secure the obligations of Excalibur
Holdings to its senior lender, Stillwater National Bank. Shumate
represents a significant portion of Excalibur's total assets and
operations.
At Sept. 30, 2005, the company's balance sheet showed $15,099,850
in total stockholders' equity deficit compared to a $11,989,065
deficit at Dec. 31, 2004.
Going Concern Doubt
Malone & Bailey, PC, in Houston, Texas, raised substantial doubt
about Shumate Industries' ability to continue as a going concern
after it audited the company's financial statements for the year
ended Dec. 31, 2004. Malone & Bailey pointed to the company's
recurring losses from operations and working capital deficiency.
SOUTHWEST RECREATIONAL: Trustee Taps Peisner as Tax Accountants
---------------------------------------------------------------
Ronald L. Glass, the chapter 7 trustee appointed in Southwest
Recreational Industries, Inc., and its debtor-affiliates'
liquidation proceedings, sought and obtained authority from the
U.S. Bankruptcy Court for the Northern District of Georgia to
employ Peisner Johnson & Company, L.L.P, as his special tax
accountants.
Peisner Johnson is expected to:
a. conduct a detailed review and analysis of the Debtors'
sales and use tax records;
b. copy invoices from the sales and use tax records and other
documents that may qualify for a tax refund;
c. research the applicable issues and schedules items
qualifying for refunds and provide the Trustee with a
detailed report of all areas of state and federal tax
relief, along with the documentation in support of the
accountants' position;
d. upon the Trustee's approval, file appropriate refund claims
or amend state or local tax returns as necessary; and
e. perform any other services commensurate with the Trustee's
needs.
Andrew Johnson, a partner at Peisner Johnson, discloses that the
Firm has agreed to do its work in exchange for 50% of any recovery
of any tax refunds actually received by the Trustee and subject to
provision of Section 328 of the Bankruptcy Code. If there is no
monetary recovery, Mr. Johnson relates, then the Firm will receive
nothing.
Mr. Johnson 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 Leander, Texas, Southwest Recreational
Industries, Inc. -- http://www.srisports.com/-- designs,
manufactures, builds and installs stadium and arena running tracks
for schools, colleges, universities, and sport centers. The
company filed for chapter 11 protection on February 13, 2004
(Bankr. N.D. Ga. Case No. 04-40656). Jennifer Meir Meyerowitz,
Esq., Mark I. Duedall, Esq., and Matthew W. Levin, Esq., at
Alston & Bird, LLP, represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, they listed $101,919,000 in total assets and
$88,052,000 in total debts. On Aug. 11, 2004, Ronald L. Glass was
appointed as Chapter 11 Trustee for the Debtors. Henry F. Sewell,
Jr., Esq., Gary W. Marsh, Esq., at McKenna Long & Aldridge LLP
represent the Chapter 11 Trustee. The Bankruptcy Court converted
the Debtors' chapter 11 cases into liquidation proceedings under
chapter 7 of the Bankruptcy Code on Oct. 14, 2005. Beth E.
Rogers, Esq., Daniel P. Sinaiko, Esq., and David W. Cranshaw,
Esq., at Morris, Mannin & Martin, LLP< represent the Official
Committee of Unsecured Creditors. Bryan E. Bates, Esq., and Henry
F. Sewell, Jr., at McKEnna, Long & Aldrige, LLP, represent the
chapter 7 trustee.
STARWOOD COMMERCIAL: S&P Lifts Rating on Class D-1 Certificates
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings to 'AAA' on
all five classes of commercial mortgage pass-through certificates
from Starwood Commercial Mortgage Trust's series 1999-C1.
The upgrades reflect the full defeasance of the $469.6 million
mortgage loan on Feb. 24, 2006. The previous collateral, which
consisted of 11 full-service hotels in six states and the District
of Columbia, has been replaced by U.S. government obligations.
The defeasance collateral will provide a revenue stream sufficient
to pay each scheduled principal and interest payment when due
through the transaction's Feb. 15, 2009, maturity date.
Ratings raised:
Starwood Commercial Mortgage Trust
Commercial mortgage pass-through certificates series 1999-C1
Rating
Class To From
----- -- ----
A-1-1 AAA AA
A-2-1 AAA AA
B-1 AAA A
C-1 AAA BBB-
D-1 AAA BB+
STONERIDGE INC: Reduced Sales Prompt Moody's to Downgrade Ratings
-----------------------------------------------------------------
Moody's Investors Service lowered the ratings of Stoneridge, Inc.
-- Corporate Family, to B1 from Ba3; guaranteed senior secured
revolving credit facility, to Ba3 from Ba2; and guaranteed senior
unsecured notes, to B2 from B1. The rating outlook is negative.
The downgrade reflects Stoneridge's deteriorating credit metrics,
driven by revenue decreases as the reduced sales of SUV's has
lowered volumes from the company's Original Equipment customers,
and operational inefficiencies resulting from the company's
restructuring efforts. This trend has been compounded by
negotiated price downs with the OE's and higher raw material
costs, resulting in sharply reduced profitability and cash flow
metrics.
While the company anticipates that actions it has taken will help
to stabilize operating trends during 2006, the negative outlook
considers that further weakness could occur if new environmental
regulations, set to take effect in 2007, curtail demand for
components used in commercial vehicles. Commercial vehicle parts
account for approximately 57% of the company's business.
These ratings were lowered:
* guaranteed senior secured revolving credit facility due
April 2008, to Ba3 from Ba2;
* guaranteed senior unsecured notes due May 2012, to B2 from
B1
* Corporate Family rating, to B1 from Ba3
Despite a well established business position and the benefits of a
balanced debt maturity profile, Stoneridge's weak credit metrics
heavily burden the weighted factors considered under Moody's
automotive supplier rating methodology in assessing the company's
Corporate Family rating. The company's recent revenue erosion,
declining margins, weak interest coverage, and deficit free cash
flow are more consistent with lower B rated credits. The current
B1 rating anticipates that actions being taken by the company will
help to stabilize financial metrics, but should the operating
trends evident in the second half of 2005 persist, the ratings
could be subject to further downgrade.
For the last twelve months ended Dec. 31, 2005, Stoneridge's total
debt/EBITDA leverage was approximately 3.6x, EBIT/interest
coverage was about 1.3x. Free cash flow for the trailing twelve
month period ending Dec. 31, 2005, was approximately negative $8
million. Yet, these metrics are heavily supported by results in
the first half of the year, and the later quarters of the year
demonstrated much weaker performance.
At Dec. 31, 2005, the company maintained $41 million in cash and
approximately $96 million of unused capacity under its $100
million revolving credit facility. Availability of the full $96
million is limited by potential covenant pressure stemming from
the recent weak operating trends. The company is currently
pursuing a revision to its bank facility that will accommodate
recent underperformance. The ratings anticipate successful
completion of negotiations with the banks on a revised facility,
and that the facility along with current cash will be sufficient
to meet the company's near term funding needs.
Stoneridge's results have been impacted by current industry
challenges including negotiated price reductions with OEMs, lower
North American vehicle production levels by OEM customers, higher
commodity costs, and losses associated with bankruptcy filings by
certain customers. In addition, Stoneridge was specifically
affected by operational inefficiencies from restructuring efforts
to rationalize certain manufacturing facilities in high cost
regions along with retention issues during this process at certain
facilities.
The company's restructuring efforts will transition additional
production to Mexico and improve the manufacturing overcapacity in
its U.K. operations. The company also expects to focus on the
improvement of direct material procurement. While performance in
2006 should benefit from stabilized performance in certain of the
company's facilities affected by restructuring efforts, Moody's
expects continued operating pressure due to industry factors in
the company's light vehicle segment and regulatory requirements
for OEM's in the company's commercial vehicle segment.
Future events that could result in pressure on Stoneridge's
ratings include continued reductions in OEM production volumes in
either the light vehicle or commercial vehicle segments, rising
raw materials prices which cannot be passed on the customers,
continued operating inefficiencies despite recent restructuring
efforts, the inability to win new business with sufficient margins
to offset customer price concessions, or inability to maintain an
adequate liquidity profile due to more significant cash flow
deficits or any delays in negotiating a revised credit facility
with its banks. Consideration for lower ratings could arise if
any combination of these factors were to increase leverage over
5.0x or cause further deterioration in interest coverage.
Future events that could improve Stoneridge's rating outlook
include the realization of incremental new business awards from
both domestic transplants and foreign OEM's that will serve to
diversify and globalize the customer base, rising average content
per vehicle, stabilized raw material costs resulting in increase
margins, and reduced financial leverage through application of
cash flow to permanent debt reduction. Consideration for an
improved outlook could arise if any combination of these factors
were to reduce leverage consistently under 3.5x or increase
EBIT/interest coverage consistently above 2.0x.
Stoneridge, Inc., headquartered in Warren, Ohio, is a leading
independent designer and manufacturer of highly engineered
electrical and electronic components, modules and systems for the
(i) automotive and light truck, (ii) medium and heavy-duty truck
and (iii) agricultural and off-road vehicle markets. The
company's products interface with a vehicle's mechanical and
electrical systems to activate equipment and accessories, display
and monitor vehicle performance, and control and distribute
electrical power and signals. Stoneridge's products improve the
performance; safety; convenience; and environmental monitoring of
its customers' vehicles. Annual revenues approximate $671million.
STRATUS TECHNOLOGIES: Moody's Junks $125 Million Term Loan Rating
-----------------------------------------------------------------
Moody's Investors Service affirmed Stratus Technologies corporate
family rating of B2 and assigned B1 rating to its proposed first
lien term loan and Caa1 rating to its proposed second lien term
loan. Net proceeds from the $175 million first lien term loan and
$125 million second lien term loan will be used to refinance
existing $145 million senior notes and repurchase $130 million
preferred stock held largely by the company's sponsors. The
rating outlook is stable.
This rating was affirmed:
* B2 corporate family rating
These ratings were assigned:
* $30 million revolving credit facility due 2011 -- B1
* $175 million first lien term loan due 2011 -- B1
* $125 million second lien term loan due 2012 -- Caa1
This rating will be withdrawn:
* $170 million senior unsecured note due 2008 -- B3
The B2 corporate family rating reflects:
(1) product transitioning which started over 3 years ago is
near completion with increasing ftServer sales offsetting
declining legacy Continuum line sales;
(2) good visibility from its high proportion of recurring
services revenue as a result of its higher-than-industry-
average service contract attach and retention rates;
(3) Company's recent track record of free cashflow generation
and debt reduction and the expectation that free cashflow
will continue to be positive post the current
recapitalization; and
(4) credit statistics that are within the boundary of the
current rating category.
The rating also considers:
(1) the increase in leverage as part of the proposed
recapitalization and associated financial risk;
(2) the modest scale of the Company and weak organic growth
partly reflecting the Company's niche product nature;
(3) the uncertainty whether ftServer products will be able to
fully offset the expected declines of legacy Continuum
products going forward;
(4) continued lack of profitability with net deficits the past
three years;
(5) limited asset protection from a small base of tangible
assets.
Stratus has largely completed its product transitioning and the
Company's business risk is less uncertain and more stabilized
compared to that of three years ago when the rating was first
assigned. The decline in legacy Continuum sales has been offset
by the increase in the new ftServer series system sales. However,
total server sales have been relatively stagnant, adjusting for
currency impact, at about $110 million per year. This partly
reflects the niche nature of Stratus products in a vast server
market. The company is reestablishing itself in telecom, a
business where it has had past success, and has identified end-to-
end services businesses as a future growth prospect, which is
still in the early stage of development.
Moody's views that Stratus' financial risk has increased with
existing preferred stock being repurchased through the issuance of
debt as part of the current recapitalization. Leverage will be at
an estimated 4.7x assuming the realization of $13 million synergy
from the recent agreement with NEC. As part of the agreement with
NEC, Stratus will in effect outsource its hardware design and
manufacturing to NEC and reduce its internal cost. Fixed charge
coverage is modest at about 1.9x. The expectation is that Stratus
will continue to be free cash flow positive, a key to Moody's
affirmation of its B2 corporate family rating.
Also contributing to affirmation of Stratus corporate family
rating is its significant service revenue, about 60% of its
overall revenue. Stratus' service is recurring in nature and
provides reasonably good revenue visibility. Its high proportion
of service revenue reflects in part the mission-critical nature of
its products and also its unique architecture which enables the
company to not only monitor but diagnose and remediate problems
remotely. Although service contract attach rates for the ftServer
series are significantly lower than those of legacy Continuum,
they have been improving over the past 3 years to reach 67%.
Service revenue has declined for the first nine months of fiscal
year 2006 due to declining revenue associated with Continuum
sales. Moody's expects that services revenue should continue to
grow post fiscal 2006 as Continuum sales decline plateaus and FT
revenues grow.
The B1 ratings on the secured first lien revolver and term loan
are notched up from its corporate family rating. This reflects
the senior position of the first lien facilities in the Company's
proforma capital structure and the protection provided by the
collateral package. The Caa1 rating on the secured second lien
term loan reflects its contractual subordination to the first lien
facilities, Stratus' low tangible asset protection and the
possibility that this junior class of creditors would be
significantly impaired in the event of a distress.
The stable outlook reflects Moody's expectation that Stratus will
continue to generate free cashflow. Stratus has generated
positive free cashflow for each of the past three fiscal years and
has reduced its senior notes in fiscal 2006 by about $25 million.
Pro forma the recapitalization and the resultant increase in
interest expense, free cash flow is expected to continue to be
positive due partly to aforementioned cost synergy from NEC.
The ratings could be negatively influenced upon a combination of:
(1) decline in revenue partly due to slower growth of ftServer
or less than expected attach/retention rates from related
service contracts;
(2) negative free cash flow generation;
(3) issues vis-a-vis integration due to the NEC joint venture;
(4) deteriorating credit stats;
Conversely, the ratings could be positively influenced to the
extent that the Company is able to generate significant organic
revenue growth due partly to newer opportunities in telecom and
end-to-end services; and apply free cash flow to de-lever.
Stratus Technologies, Inc., is a global solutions provider focused
on helping its customers achieve and sustain the availability of
information systems that support their critical business
processes.
TELOGY INC: Wants to Retain Ernst & Young as Independent Auditors
-----------------------------------------------------------------
Telogy, Inc., and e-Cycle, LLC, ask the U.S. Bankruptcy Court
for the Northern District of California for permission to retain
Ernst & Young LLP as their independent auditors and tax services
providers, nunc pro tunc to November 29, 2005.
Ernst & Young is expected to:
a) complete the audit and report on the Debtors' financial
statements at December 31, 2004 and for the year then ended;
b) provide tax compliance to prepare the U.S. federal income
tax return, Form 1120S, for the Debtors for the year ended
December 31, 2005 and prepare state and local income and
franchise tax returns;
c) provide Sales and Use Tax Consulting, specifically:
i) assessing the amount of sales and use tax due by the
Debtors for the past three years which is triggered
when property enters Illinois (and Chicago);
ii) preparing and reviewing amended sales and use tax
returns, including computation of potential interest
and penalties;
iii) advising Telogy on advantages and disadvantages of
voluntary disclosure process; and
iv) assisting Telogy in reviewing its lease contracts in
Illinois and provide advice on how best to handle any
amounts collected from lessees related to sales and use
tax; and
d) provide assistance to the Debtors for routine small projects
when certain projects are not covered. Those projects may
include assistance with tax issues, assistance with
transactional issues, or providing assistance to the Debtors
in connection with its dealings with tax authorities.
The Firm is owed $10,500 for prepetition services. As a condition
of its retention, Ernst & Young will waive that claim.
Robyn Dahlin, an Ernst & Young member, discloses the Firm's
professionals' billing rates:
a) Audit Services
Professional Hourly Rate
------------ -----------
Partners $416
Senior Managers $388
Managers $270
Seniors $162
Staff $144
b) Business Return Preparation. The Firm's fee for preparing
the federal return will be $28,000 and $35,000 will be
charged for the state and local returns.
c) Routine On-Call Tax Advice/Sales and Use Tax Consulting:
Professional Hourly Rate
------------ -----------
Partners $640
Senior Managers $395
Managers $295
Seniors $225
Staff $150
To the best of the Debtors' knowledge, Ernst & Young does not
represent any interest adverse to them and the estates and is
"disinterested" under applicable sections of the Bankruptcy Code.
Headquartered in Union City, California, Telogy, Inc. --
http://www.tecentral.com/-- rents, sells, leases electronic test
equipment including oscilloscopes, spectrum, network, logic
analyzers, power meters, OTDRs, and optical, from manufacturers
like Tektronix, Rohde & Schwarz. Telogy, Inc., and its
debtor-affiliate, e-Cycle, LLC, filed for chapter 11 protection on
Nov. 29, 2005 (Bankr. N.D. Calif. Case No. 05-49371). Ramon M.
Naguiat, Esq., at Pachulski, Stang, Ziehl, Young Jones & Weintraub
P.C. represents the Debtor in its restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
estimated assets and debts of more than $100 million.
As reported in the Troubled Company Reporter on Feb. 8, 2006,
Telogy and e-Cycle filed a Joint Plan of Reorganization with the
U.S. Bankruptcy Court for the Northern District of California on
January 23, 2005. The Joint Plan proposes that (x) secured
creditors will own the Reorganized Company; (y) unsecured
creditors will share, pro rata, a $100,000 pot of money; and (z)
subordinated debt holders will receive a small basket of new stock
and warrants.
TIMELINE INC: Earns $566,370 in Quarter Ended December 31
---------------------------------------------------------
Timeline, Inc., delivered its financial results for the quarter
ended Dec. 31, 2005, to the Securities and Exchange Commission on
Feb. 14, 2006.
Timeline earned $566,370 of net income on $800,000 of revenue
during the three months ended Dec. 31, 2005, in contrast to a
$51,326 of net income on zero revenues for the comparable period
in 2004. The $800,000 revenue generated during the third quarter
of fiscal 2006 is a one-time payment under a Patent License
Agreement and Release entered into with Sage Software, Inc. in
December 2005. In the third quarter of fiscal 2005, no patent
license revenue was earned.
The Company's balance sheet at Dec. 31, 2005, showed $2,677,773 in
total assets and liabilities of $40,931. As of Dec. 31, 2005, the
Company had net working capital of approximately $1,331,000 and an
accumulated deficit of approximately $7,984,000.
A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?5e1
Amended Fiscal Second Quarter Results
Timeline amended its financial statements for the quarter ended
Sept. 30, 2005, to correct its accounting treatment on gains from
the sale of all of its software licensing operations to Global
Software Inc. in August 2005.
Under the terms of the Asset Purchase Agreement, $480,000 of the
total purchase price was allocated to the Company's covenant not
to compete with the business segment being sold for a period of 48
months following closing.
Originally, Timeline treated this $480,000 of gain allocated to
the covenant not to compete as "deferred revenue", with $10,000
per month being recognized as revenue ratably over the 48-month
non-compete period. As a result, on the Condensed Consolidated
Balance Sheet as of Sept. 31, 2005 in the Original Report, the
Company recorded $10,000 of revenue and the remaining $470,000
unamortized portion was shown as a liability under "deferred
revenue".
After discussions with its auditors, the Company reclassified this
$480,000 as "gain on asset sale" rather than deferred revenues.
The net effect the reclassification with respect to the Company's
Condensed Statement of Operations, for each of the three- and six-
month periods ended Sept. 30, 2005:
-- an increase in the amount of "Gain on Asset Sale" by
$480,000, and a decrease in "Warranty Revenues" of
$10,000, resulting in; and
-- an increase in "Net Income" by $470,000 (to $2,127,353
and $1,892,699, respectively, for each of the three- and
six-month periods ended Sept. 30, 2005).
The net effect the reclassification with respect to the Company's
Condensed Consolidated Balance Sheet as of Sept. 30, 2005:
-- a decrease of "Deferred revenue" (current liabilities) by
$470,000, and a decrease in "Accumulated deficit" of
$470,000, resulting in; and
-- an increase in "Total shareholders' equity" by $470,000.
A full-text copy of the amended regulatory filing is available for
free at http://researcharchives.com/t/s?5e3
Going Concern Doubt
As reported in the Troubled Company Reporter on Jan. 30, 2006,
Williams & Webster, P.S., expressed substantial doubt about
Timeline's ability to continue as a going concern after it audited
the Company's financial statements for the fiscal year ended March
31, 2005. The auditors pointed to the Company's inability to
obtain outside long term financing, increasing stockholders'
deficit and recurring losses from operations.
About Timeline
Timeline -- http://www.timeline.com/-- develops and markets
Microsoft Windows-based financial management reporting software
suitable for complex applications such as those found in medium to
large, multinational corporations.
WorkWise Software, Inc. -- http://www.workwise.com/-- a
subsidiary of Timeline, provides event-based notifications,
application integration and process automation systems to the mid-
market. The WorkWise solutions are exclusively available through
authorized OEM and Reseller Business Partners.
TRW AUTOMOTIVE: Earns $59 Million of Net Income in Fourth Quarter
-----------------------------------------------------------------
TRW Automotive Holdings Corp. (NYSE: TRW) reported fourth-quarter
2005 financial results with sales of $3.1 billion, a decrease of
1.6 percent compared to the same period a year ago. Net earnings
for the quarter were $59 million, which compares to net losses of
$62 million in the prior year quarter.
Fourth-quarter 2005 earnings included a reduction in reserves for
litigation that increased earnings by $18 million. In comparison,
prior year results included pre-tax expenses of $125 million,
primarily for loss on retirement of debt associated with the
repurchase of an acquisition related seller note. Net earnings
excluding the effect of these items in both periods, net of the
assumed tax impacts, were $41 million in the current year compared
to $34 million or $0.34 per diluted share in the prior year
quarter.
Net earnings, excluding the $18 million reduction in reserves for
litigation, were above previously provided guidance primarily due
to a lower amount of tax expense and better than expected
operating performance that in the aggregate offset a higher level
of restructuring costs in the quarter.
During the fourth quarter, the Company completed its acquisition
of a 68.4% controlling stake in Dalphi Metal Espana, S.A. for cash
of approximately $134 million, subject to post closing adjustment,
plus the assumption of debt totaling approximately $91 million.
The Company reported full-year 2005 sales of $12.6 billion, an
increase of 5.3 percent, compared to the prior year. Net earnings
for the year were $204 million, which compares to 2004 earnings of
$29 million.
Full-year 2005 net earnings included positive impacts from the
reduction in reserves for litigation of $18 million and a one-time
benefit of $17 million from a tax law change in Poland. The year
also included expenses of $7 million for loss on retirement of
debt relating to a financing transaction completed in the first
half of the year. In comparison, 2004 net earnings included pre-
tax expenses of $173 million primarily for loss on retirement of
debt associated with various financing transactions completed in
the year. Full year net earnings excluding the effect of these
items from both periods, net of the assumed tax impacts, were
$176 million in 2005 compared to $173 million in the prior year.
"We are pleased to report solid fourth quarter and full year
financial results in-line with the business objectives we set at
the beginning of the year," said John Plant, president and chief
executive officer. "This is quite an achievement considering the
steady decline in industry fundamentals throughout the year,
including lower than expected vehicle production and significant
cost pressures related to higher commodity inflation, together
with our decision to increase the magnitude of cost cutting
actions." Mr. Plant added, "The automotive industry, at all
levels, is evolving at a remarkable pace as global competition
intensifies and economic pressures continue to pose significant
risks to bottom line performance. With this backdrop, TRW has
accelerated its cost reduction efforts, while at the same time
increasing its investment in technology in support of safety
development initiatives. We believe the investments and
sacrifices that are being made today will improve the Company's
long term competitiveness and best position us to support the
growing global demands of our customers."
Fourth Quarter 2005
The Company reported fourth-quarter 2005 sales of $3.1 billion, a
decrease of $50 million or 1.6 percent compared to prior year
sales of $3.2 billion. Excluding the impact of foreign currency
translation, sales improved 3.0 percent compared to last year.
This increase resulted primarily from higher product volumes and
incremental revenue resulting from the acquisition of Dalphimetal,
partially offset by the effect of six fewer calendar days in the
current quarter and price reductions provided to customers.
Operating income for fourth-quarter 2005 was $133 million,
essentially flat compared to the prior year level of $131 million.
The 2005 quarter included the positive impact from the reduction
in reserves for litigation of $18 million and the negative effect
of a higher level of restructuring and asset impairment charges of
$31 million between the two quarters. Excluding the impact of
these items, operating income in the current year was higher due
primarily to the benefit of cost reduction programs, including a
lower level of net pension and OPEB expense resulting from actions
to contain these costs, in excess of price reductions provided to
customers. Additionally, commodity inflation and the effects of
currency movements negatively impacted the current quarter as
compared to last year.
Net interest and securitization expense for fourth-quarter 2005
totaled $58 million, compared to $69 million in the prior year.
The prior year amount included $6 million of expenses related to a
refinancing of the Company's bank debt facilities. Excluding
this amount, net interest and securitization expense declined by
$5 million due to the benefit of the Company's past deleveraging
activities and a favorable level of interest income in the current
quarter, partially offset by the impact of rising interest rates
on the Company's floating rate debt. The prior year period
included $119 million for loss on retirement of debt related
to the repurchase of its $600 million seller note payable to
Northrop Grumman Corporation. Tax expense in the 2005 quarter was
$22 million, which is the amount of expense required to reflect
the actual tax burden for the 2005 year.
Net earnings in fourth-quarter 2005 were $59 million compared to
net losses of $62 million in the 2004 period. Net earnings
excluding the $18 million benefit for the reduction in reserves
for litigation in the 2005 quarter and the $125 million for
expenses related to financing transactions in the prior year
period, net of the assumed tax impact in each case, were
$41 million in the current year, compared to $34 million in the
prior year quarter.
Earnings before interest, securitization costs, loss on retirement
of debt, taxes, depreciation and amortization (EBITDA) were
$268 million for fourth-quarter 2005, which compares to prior year
EBITDA of $264 million.
Full Year 2005
The Company reported 2005 sales of $12.6 billion, an increase of
$632 million or 5.3 percent compared to prior year sales of
$12.0 billion. The increase resulted primarily from higher
product volumes despite lower vehicle production at some of our
major customers, foreign currency translation and the addition of
sales resulting from the acquisition of Dalphimetal, partially
offset by price reductions provided to customers.
Operating income for the 2005 year was $553 million, a decrease of
$27 million compared to the prior year total of $580 million. The
decrease resulted primarily from commodity inflation, increased
restructuring and asset impairment costs, a higher level of
research and development expenses and the impact of customer
solvency issues. These negative factors were partially offset by
the benefits of higher sales and cost reduction programs in excess
of price reductions provided to customers and non-commodity
inflation, lower pension and OPEB expenses and the reduction in
reserves for litigation. Restructuring and asset impairment
expenses for full-year 2005 were $107 million, compared to
$38 million in the prior year period.
Net interest and securitization expense for 2005 totaled
$231 million, which compares to $252 million in 2004. The
reduction in interest related expenses is attributed to the
benefits derived from past deleveraging efforts and the
non-recurrence of debt retirement charges, partially offset by the
impact of rising interest rates associated with the Company's
floating rate debt. In 2005, the Company incurred $7 million for
loss on retirement of debt related to the partial redemption of
its Euro denominated 10-1/8% senior notes. Similarly, in the 2004
period, loss on retirement of debt totaled $167 million, which
consisted of the previously discussed seller note repurchase
transaction and $48 million related to the Company's initial
public offering and a bank debt refinancing transaction. Tax
expense for 2005 was $124 million, which included the one-time tax
benefit of $17 million resulting from a tax law change in Poland.
Excluding the favorable tax law change and both the $18 million
reduction in litigation reserves and the $7 million for loss on
retirement of debt, the effective tax rate was 44% for the year.
Full-year 2005 net earnings were $204 million, which compares to
net earnings of $29 million or $0.29 per diluted share in the
prior year period. Net earnings in 2005 included the previously
discussed one-time items related to the reduction to reserves for
litigation, the tax law change in Poland and expenses for loss on
retirement of debt. In comparison 2004 net earnings included
previously mentioned expenses for loss on retirement of debt
associated with various debt financing transactions. Full year
net earnings excluding the effect of these items from both
periods, net of the assumed tax impacts, were $176 million in 2005
compared to $173 million in the prior year.
EBITDA for the 2005 year totaled $1,075 million, which compares to
$1,080 million in the prior year period. The decline in EBITDA
includes an increased level of restructuring charges and asset
impairments that negatively impacted the year-to-year comparison
by $69 million.
Capital Structure/Liquidity
Fourth quarter net cash provided by operating activities was
$380 million compared to $751 million in the prior year quarter.
The difference between the two periods resulted primarily from a
higher level of working capital and the impact of the prior year
having six additional calendar days, which positively impacted
the cash provided by operating activities in the 2004 period.
Capital expenditures for the quarter were $222 million compared to
$245 million in the prior year period. Full year net cash
provided by operating activities was $502 million compared to
$787 million in the prior year. The decrease of $285 million was
primarily driven by an increase in working capital and an
increased level of pension funding. Capital expenditures for the
2005 year were $503 million compared to $493 million in the prior
year.
As of December 31, 2005, the Company had $3,236 million of debt
and $676 million of cash and marketable securities, resulting in
net debt (defined as debt less cash and marketable securities) of
$2,560 million, which includes $244 million of net debt associated
with the Dalphimetal acquisition. When compared to the prior year
level, net debt at year-end increased by $188 million and declined
by $56 million after excluding the impact of the Dalphimetal
acquisition.
Subsequent Event
On February 2, 2006, the Company's wholly owned subsidiary, Lucas
Industries Limited, completed the tender for its outstanding GBP
94.6 million 10.875% bonds. The transaction was funded with cash
on hand. Additionally, as a result of the transaction, the
Company will incur a $57 million charge for loss on retirement of
debt during the first quarter of 2006, which reflects the
difference between the tender amount and the book value of debt at
the time of the transaction.
2006 Outlook
For full-year 2006, the Company expects revenue in the range of
$12.8 billion to $13.2 billion, which includes the $57 million
charge related to the retirement of the Lucas Bonds.
This guidance range reflects restructuring expenses of
approximately $50 million, includes the annualized effect for the
adoption of FASB Statement No. 123 Revised (recognition of
expenses related to stock based compensation) and assumes an
effective tax rate approximately consistent with the 2005 rate of
44%, which excludes the previously discussed one-time adjustments.
Lastly, the Company estimates capital expenditures will total
approximately 4% of sales for the year.
Mr. Plant commented, "The level of uncertainty surrounding the
2006 environment is daunting as severe economic strain continues
to take its toll on bottom lines and is reshaping the vehicle and
component industry as we know it today. With that said, we have
set expectations for the 2006 year that will again pose a
significant test to our highly disciplined operational programs
and will require significant effort to achieve."
For the first quarter of 2006, the Company expects revenue of
approximately $3.3 billion and earnings per diluted share ranging
from breakeven to $0.15. This guidance includes the previously
discussed $57 million loss on retirement of debt. Also included
in earnings guidance are expected pre-tax restructuring costs of
approximately $9 million.
With 2005 sales of $12.6 billion, TRW Automotive Holdings Corp. --
http://www.trwauto.com/-- ranks among the world's leading
automotive suppliers. Headquartered in Livonia, Michigan, USA,
the Company, through its subsidiaries, employs approximately
63,000 people in 25 countries. TRW Automotive products include
integrated vehicle control and driver assist systems, braking
systems, steering systems, suspension systems,
occupant safety systems (seat belts and airbags), electronics,
engine components, fastening systems and aftermarket replacement
parts and services.
* * *
As reported in the Troubled Company Reporter on Sept. 9, 2005,
Fitch rates TRW Automotive:
-- Senior secured debt 'BB+';
-- Senior unsecured debt 'BB-';
-- Subordinated debt 'B+';
-- Outlook Stable.
US LEC: Balance Sheet Upside-Down by $260 Million at Dec. 31
------------------------------------------------------------
US LEC Corp. (Nasdaq: CLEC) reported strong financial and
operating results for the fourth quarter and year ended
December 31, 2005. In addition, the Company disclosed the
settlement of two outstanding disputes associated with prior
billing of access charges to inter-exchange carriers leaving one
dispute with a large inter-exchange carrier to be resolved.
Operational and financial highlights of the fourth quarter and
year ended 2005 include:
* achieving fourth quarter Adjusted EBITDA of $14.3 million,
compared to Adjusted EBITDA of $11.0 million in the fourth
quarter of 2004 - a 30% improvement;
* exceeding $100.0 million in total revenue for the quarter
ended December 31, 2005, compared to $92.1 million in the
same period last year;
* achieving end-customer revenue of $86.2 million, an increase
of over $11.4 million or 15% compared to the fourth quarter
of 2004;
* increasing US LEC's business class customer base by 3,900 to
over 26,000, a 17% improvement over 2004;
* settling access revenue disputes with two major
inter-exchange carriers, taking a one-time, non-cash charge
of $23.3 million in the fourth quarter of 2005 and
anticipating receipt of cash of approximately $9.0 million in
the first quarter of 2006; and
* continuing the expansion of US LEC's enhanced IP product
suite with the introduction of network wide MPLS VPN IP
services and enhancing its Dynamic TSM VoIP product suite
with the addition of Voice Messaging and Mobility services,
BIGDataSM and BIGVoiceSM features.
Revenue for the fourth quarter ended December 31, 2005, totaled
$100.1 million, compared with $92.1 million for the quarter ended
December 31, 2004. Net loss attributable to common shareholders
was $(30.3) million, on 30.5 million average shares outstanding
for the quarter ended December 31, 2005, compared with a net loss
of $(9.9) million on 30.1 million average shares outstanding for
the quarter ended December 31, 2004. Adjusted EBITDA for the
quarter ended December 31, 2005 was $14.3 million (which excludes
a one-time $23.3 million non-cash charge associated with disputes
related to carrier access revenue) compared with Adjusted EBITDA
of $11.0 million in the fourth quarter of 2004.
Revenue for the year ended December 31, 2005, totaled
$387.7 million compared with $356.2 million for the year ended
December 31, 2004, a 9% year-over-year increase despite a decrease
in inter-carrier compensation of $17.6 million. Net loss
attributable to common shareholders was $(55.5) million on
30.4 million average shares outstanding for the year ended
December 31, 2005, compared with a net loss of $(35.7) million
on 29.9 million average shares outstanding for the year ended
December 31, 2004. Adjusted EBITDA for the year ended
December 31, 2005, was $52.1 million (which excludes a one-time
$23.3 million non-cash charge associated with disputes related to
carrier access revenue) and compared with 2004 Adjusted EBITDA of
$45.7 million.
Aaron D. Cowell, president and chief executive officer of US LEC,
commented, "In the fourth quarter of 2005, we achieved over
$100 million in total revenue and over $14 million in Adjusted
EBITDA. We increased year-over-year top line revenue by 9.0% to
approximately $388 million and end customer revenue grew by 16% or
$46.8 million to $330.8 million for the year. During the year we
had strong organic customer growth with the addition of over 3,900
business class customers or 17% year-over-year growth, net of
customer churn, which remained at an industry leading rate of less
than 1.0% per month due to customer care that continues to be one
of our hallmarks. In addition, we continue to get excellent
productivity gains from our team of 1,128 outstanding employees.
Fourth quarter end customer revenue per employee increased to
$76,400 in 2005 from $70,200 in the fourth quarter of 2004. Our
double digit improvements in end customer revenue, customer count
and Adjusted EBITDA in the fourth quarter are strong indicators
that US LEC continues to be a solid growth company in an industry
that has had few such successes."
Mr. Cowell added, "2005 also marked a year of evolution for US LEC
as we took great strides forward in transitioning the Company into
a next-generation competitive carrier. We introduced our MPLS VPN
offering and expanded its availability to virtually all of our
markets. We also introduced our Dynamic T VoIP product suite in a
number of markets and Ethernet product to nearly half of our
central offices with plans for continued growth of these products
in 2006. We will continue to leverage our strong operating
results to continue to provide strong growth on our top and bottom
line."
J. Lyle Patrick, executive vice president and chief financial
officer of US LEC, added, "Our financial and operating results for
2005 demonstrate solid execution by US LEC. Our recurring revenue
business model continues to leverage our strong customer growth
and very favorable retention rate. Total revenue increased by
$31.6 million year-over-year and we are pleased with a 16%
year-over-year growth in end customer revenue, which accounted for
86% of total revenue for the fourth quarter. Adjusted EBITDA
increased by 30% year over year to reach $14.3 million in the
fourth quarter of 2005. In addition, we are pleased with our
ability to control network expenses, which contributed to gross
margins of 53% for the quarter ended December 31, 2005 and 52% for
the 2005 fiscal year. The Company also achieved $17.8 million of
cash flow from operations for the year. Cash capital expenditures
were $8.8 million for the quarter and $35.0 million for the year.
Finally, the Company ended the year with a strong cash position of
$30.7 million. US LEC has a long history of being able to
leverage its assets, financial strength and market position to
steadily move toward profitability and 2005 was no exception.
Additionally, we are pleased to announce the resolution of all but
one of our inter-exchange carrier access revenue disputes," added
Mr. Patrick. "As a result of the settlement of two inter-exchange
carrier access disputes which primarily relate to charges for
traffic exchanged prior to June 2004 and the interpretation of
the FCC's Eighth Report and Order, the Company took a one-time,
non-cash charge of $23.3 million in the fourth quarter of 2005.
Additionally, US LEC will receive approximately $9.0 million in
cash as part of these settlements. The resolution of these
disputes leaves only one dispute with a large inter-exchange
carrier to be resolved. We believe, based on the facts known at
this time that the one-time charge referred to above and the
reserves reflected on our balance sheet are adequate to account
for the current settlements and the resolution of current
disputes."
Based in Charlotte, N.C., US LEC Corp. -- http://www.uslec.com/--
provides voice, data and Internet services to over 25,200
mid-to-large-sized business class customers throughout the eastern
United States.
As of December 31, 2005, the Company's equity deficit widened
to $260,014,000 from a $205,304,000 equity deficit at
December 31, 2004.
US LEC: Offering to Exchange Stock Options with New Ones
--------------------------------------------------------
US LEC Corp. is offering its employees, including its executive
officers, and three of its directors the opportunity to exchange
their outstanding stock options that were granted before
January 1, 2006, for new options to purchase shares of the
Company's common stock.
The number of shares covered by the new options will be the same
as the number of shares covered by eligible options. There will
be no change in the number of shares the optionholders can acquire
upon exercise of their new options if they accept the Company's
offer.
If optionholders participate in the option exchange, the vesting
schedule of the new options they receive in exchange for their
existing options will be different than the vesting schedule of
your existing options. Generally, existing options vest in four
equal annual installments beginning on the first anniversary of
the date of grant.
The offer will expire on March 27, 2006, unless extended. The
exercise price of the new options will be the average closing
price per share of the Company's common stock on the Nasdaq
National Market for the five consecutive trading days immediately
before the date the new options are granted.
The company's common stock currently trades on the Nasdaq National
Market under the symbol "CLEC." The Company's common shares
traded between $2 and $3 in February.
A full-text copy of the Offer to Exchange filed with the
Securities and Exchange Commission is available for free at
http://ResearchArchives.com/t/s?5e0
A full-text copy of the Amended 1998 Omnibus Stock Plan is
available for free at http://ResearchArchives.com/t/s?5e2
Based in Charlotte, N.C., US LEC Corp. -- http://www.uslec.com/--
provides voice, data and Internet services to over 25,200
mid-to-large-sized business class customers throughout the eastern
United States.
As of December 31, 2005, the Company's equity deficit widened
to $260,014,000 from a $205,304,000 equity deficit at
December 31, 2004.
VERTICAL COMPUTER: Refinances $2,353,458 of Current Debt
--------------------------------------------------------
Vertical Computer Systems, Inc. (OTCBB:VCSY) has refinanced
$2,353,458 of current debt. With respect to the refinanced debt,
$600,000 will be paid out over five years, and $1,753,458 will be
paid out over 12 years.
Richard Wade, Chief Executive Officer and President of VCSY,
stated: "Vertical is pleased to have closed these refinancing
transactions. This refinancing provides Vertical a manageable
repayment plan necessary so Vertical can focus its attention on
expanding its business opportunities based upon its proprietary
technology."
Vertical Computer Systems, Inc. --- http://www.vcsy.com/--
provides of administrative software, Internet core technologies,
and derivative software application products through its
distribution network. VCSY's main administrative software product
is emPath(r), which is developed and distributed by NOW Solutions,
Inc., the Company's wholly-owned subsidiary. VCSY's primary
Internet core technologies include SiteFlash, ResponseFlash,
NewsFlash, and the Emily XML Scripting Language, which can be used
to build web services.
At Sept. 30, 2005, Vertical Computer Systems, Inc.'s balance sheet
showed a $14,612,686 stockholders' deficit compared to a
$13,281,876 deficit at Dec. 31, 2004.
WABTEC CORPORATION: Earns $16 Mil. in Fourth Quarter Ended Dec. 31
------------------------------------------------------------------
Wabtec Corporation (NYSE: WAB) reported its financial results for
the fourth quarter of 2005. This was the seventh consecutive
quarter that Wabtec has reported an earnings increase.
"We exceeded our earnings target for the year and generated
substantial cash flow," William E. Kassling, Wabtec's chairman
said. "Our balance sheet is strong and we have the financial
flexibility to invest in future growth opportunities, both
internally and through acquisitions. With our multi-year
backlog over $1 billion including option orders, we are optimistic
about our future prospects."
2005 Fourth Quarter Results
The company earned $16,301,000 of net income on $270,257,000 of
net sales for the fourth quarter ended Dec. 31, 2005.
Sales increased 20% compared to the prior-year quarter, primarily
due to increased sales of components for freight cars and
locomotives and the CoFren acquisition, which closed in the first
quarter of 2005. Gross margin was 25.7%, compared to 24.8% in the
year-ago quarter, primarily due to higher sales and the company's
cost-improvement programs. The 2005 fourth quarter included
restructuring expenses of $1.8 million. Excluding these expenses,
gross margin in the 2005 quarter was 26.4%.
Operating expenses as a percentage of sales were 14.9%, compared
to 17.6% in the year-ago quarter. Interest expense, net decreased
to $1.8 million, primarily due to a lower debt level during the
2005 quarter and higher interest income. The company had an
effective tax rate of 35% in the 2005 quarter and 36.5% in the
2004 quarter. In the quarter, the company had a loss from
discontinued operations of $1.6 million, primarily due to a
decision to liquidate its bus door joint venture in China.
Debt, net of cash, at Dec. 31, 2005, was $8 million, compared to
$54.9 million at Dec. 31, 2004. In addition to the reduction in
debt, net of cash, Wabtec paid $37 million in cash to acquire
CoFren during 2005.
2006 Outlook Affirmed
Wabtec expects 2006 earnings per diluted share of
about $1.50 excluding expenses for possible restructuring actions
that the company is currently evaluating. If taken, these actions
would be expected to result in significant, ongoing benefits,
including higher margins, but they would require significant, one-
time expenses, a large portion of which would be non-cash. The
company is targeting a payback of less than two years on any
cash restructuring expenses.
"We continue to evaluate various ways to improve our cost position
and increase our gross margin, which will be the primary drivers
for our earnings growth in 2006," Albert J. Neupaver, who joined
Wabtec on Feb. 1 as president and chief executive officer, said.
"In the meantime, demand in our core markets remains strong, and
we are actively pursuing a variety of new business opportunities
and growth initiatives. This is certainly an exciting time for
me to join Wabtec, and I look forward to helping the company
achieve its growth goals in 2006 and beyond."
Wabtec Corporation -- http://www.wabtec.com/-- is a global
provider of value-added, technology-based products and services
for the rail industry.
* * *
Wabtec Corporation's 6-7/8% Senior Notes due 2013 carry Moody's
Investors Service's Ba2 rating and Standard and Poor's Ratings
Service's BB rating.
WELLS FARGO: Fitch Puts Low-B Ratings on Two Certificate Classes
----------------------------------------------------------------
Wells Fargo Mortgage Securities Corp.'s mortgage pass-through
certificates, series 2006-3, are rated by Fitch Ratings as:
-- $914,898,204 classes A-1 to A-12, A-PO and A-R senior
certificates 'AAA'
-- $16,540,000 class B-1 'AA'
-- $5,199,000 class B-2 'A'
-- $3,308,000 class B-3 'BBB'
-- $1,890,000 class B-4 'BB'
-- $1,418,000 class B-5 'B'
The 'AAA' ratings on the senior certificates reflect:
* the 3.20% subordination provided by the 1.75% class B-1;
* 0.55% class B-2;
* 0.35% class B-3;
* 0.20% privately offered class B-4;
* 0.15% privately offered class B-5; and
* 0.20% privately offered class B-6.
The ratings on the class B-1, B-2, B-3, B-4, and B-5 certificates
are based on their respective subordination. Class B-6 is not
rated by Fitch.
Fitch believes the amount of credit enhancement available will be
sufficient to cover credit losses. The ratings also reflect:
* the high quality of the underlying collateral;
* the integrity of the legal and financial structures; and
* the primary servicing capabilities of Wells Fargo Bank, N.A.
(WFB; rated 'RPS1' by Fitch).
The transaction consists of one group of 1,680 fully amortizing,
fixed interest rate, first lien mortgage loans, with an original
weighted average term to maturity of approximately 30 years. The
aggregate unpaid principal balance of the pool is $945,143,635 as
of Feb. 1, 2006 (the cut-off date), and the average principal
balance is $562,585.
The weighted average original loan-to-value ratio (OLTV) of the
loan pool is approximately 69.09%; 1.26% of the loans have an OLTV
greater than 80%. The weighted average coupon of the mortgage
loans is 6.191%, and the weighted average FICO score is 739.
Cash-outs and rate/term refinance represent 34.94% and 16.62%,
respectively.
The states that represent the largest geographic concentration
are:
* California (29.82%);
* New York (10.37%);
* Maryland (5.86%); and
* Virginia (5.82%).
All other states represent less than 5% of the outstanding balance
of the pool.
WESTLAKE CHEMICAL: Earns $226.8 Million for Fiscal Year 2005
------------------------------------------------------------
Westlake Chemical Corporation reported financial results for the
fourth quarter and fiscal year ended Dec. 31, 2005.
For the three months ended Dec. 31, 2005, Westlake Chemical
reported net income of $73.6 million and income from operations of
$112.5 million on net sales of $636.4 million.
For the 12 months ended Dec. 31, 2005, Westlake's net income
increased to $226.8 million from a net income of $120.7 million
for the 12 months ended Dec. 31, 2004. For the year ended
Dec. 31, 2005, income from operations increased to $367 million
compared to $243.2 million for the year ended Dec. 31, 2004.
EBITDA for the year ended Dec. 31, 2005 increased to $450,300,000
from EBITDA of $311,100,000 for the year ended Dec. 31, 2004.
The increase in net income was primarily due to higher sales
volumes in Westlake's Vinyls segment and higher selling prices for
the Company's olefins and vinyls products, which outpaced higher
feedstock and energy costs. Net income for 2005 also benefited
from lower interest expense resulting from lower debt balances.
Financial Transactions
Westlake Chemical completed a refinancing of its long-term debt in
the first quarter of 2006. The Company issued $250 million of new
6 5/8% unsecured senior notes due 2016 and amended its senior
secured revolving credit facility to increase the commitment from
$200 million to $300 million. The proceeds from the $250 million
unsecured senior notes along with cash on hand were used to redeem
the entire $247 million outstanding of the company's 8 3/4%
senior notes due 2011 and repay the term loan balance of
$9 million.
The Company expects to incur a one-time non-operating expense in
the first quarter of 2006 of approximately $25.7 million before
tax for the early retirement of debt and a write-off of previously
capitalized debt-issuance cost. The new debt structure is
expected to give the company more flexibility and result in lower
interest expense in future periods.
For the fiscal year ended Dec. 31, 2005, Westlake Chemical
reported total assets of $1,827,189,000 and total liabilities of
$833,083,000.
Headquartered in Houston, Texas, Westlake Chemical Corporation --
http://www.westlakechemical.com/-- is a manufacturer and supplier
of petrochemicals, polymers and fabricated products with
headquarters in Houston, Texas. The Company's range of products
includes: ethylene, polyethylene, styrene, propylene, caustic,
VCM, PVC and PVC pipe, windows and fence.
* * *
As reported in the Troubled Company Reporter on Jan. 12, 2006,
Standard & Poor's Ratings Services raised its ratings on Westlake
Chemical Corp.
"The upgrade reflects favorable operating prospects over the
intermediate term, and our expectation that management will
continue to adhere to moderate financial policies that will limit
debt in the capital structure," said Standard & Poor's credit
analyst Paul Kurias.
The corporate credit rating was raised to 'BB+' from 'BB' and the
senior unsecured debt rating was raised to 'BB+' from 'BB-'. The
outlook is stable.
At the same time, S&P assigned a 'BB+' rating to Westlake's
proposed $250 million senior unsecured notes due 2016, the
proceeds of which will be used primarily for refinancing purposes.
The senior unsecured debt ratings are the same as the corporate
credit rating to recognize Westlake's progress toward reducing its
secured debt obligations and the expectation that the secured
revolving credit facility is not likely to be utilized to a
meaningful extent.
WHERIFY WIRELESS: Posts $3.3MM Net Loss in Quarter Ended Dec. 31
----------------------------------------------------------------
Wherify Wireless, Inc. (WFYW:OTCBB), fka IQ Biometrix, Inc.,
delivered its financial results for the quarter ended Dec. 31,
2005, to the Securities and Exchange Commission on Feb. 14, 2006.
For the three months ended Dec. 31, 2005, Wherify incurred a
$3,302,506 net loss, as compared to a $2,800,654 net loss for the
same period in 2004.
Net revenues for the quarter ended Dec. 31, 2005 were $58,337
versus negative $49,803 for the quarter ended Dec.31, 2004. Sales
revenues in the current quarter were generated by the sales of
FACES product. Sales revenues in the quarter ended Dec. 31, 2004
were generated by the sales of the Wherify child locator watch.
Wherify discontinued the sale of its child locator watch as of its
fiscal year ended June 30, 2005.
The Company's balance sheet at Dec. 31, 2005, showed $8,793,755 in
total assets and $10,734,892 in liabilities, resulting in a
stockholders' deficit of $1,941,137. The Company's current
liabilities include approximately $3.9 million in past due rent
obligations.
A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?5e4
Restates September 30 Financials
Wherify concluded on Feb. 13, 2006 that the its unaudited interim
financial statements for the three month period ended Sept. 30,
2005, should be restated.
The restatement corrects a misstatement relating to the accounting
for a $12,467,059 deemed dividend on preferred stock. As a result
of correcting this error, the Company's reported net loss for the
quarter decreased by $12,467,059 to a restated loss of $67,046,645
versus the reported loss of $79,513,704.
A full-text copy of the restated regulatory filing is available
for free at http://researcharchives.com/t/s?5e6
Going Concern Doubt
Malone & Bailey, PC, expressed substantial doubt about Wherify's
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal year ended June 30,
2005. The auditing firm pointed to the Company's recurring losses
from operations and insufficient working capital to meet its
operating needs.
About Wherify Wireless, Inc
Based in Redwood Shores, California, Wherify Wireless, Inc., --
http://www.wherifywireless.com/-- develops patented wireless
location products and services for family safety, communications,
and law enforcement. The company's portfolio of intellectual
property includes its proprietary integration of the US
Government's Global Positioning System and wireless communication
technologies; its patented back-end location service; the
Wherifone(TM) GPS locator phone which provides real-time location
information and lets families with pre-teens, seniors, or those
with special needs, stay connected and in contact with each other;
and its FACES(R) industry-leading facial composite technology,
which is currently being used by thousands of public safety
agencies worldwide.
WINN-DIXIE: Wants to Sell Jackson Fuel Center to Eckstein
---------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Middle District of Florida to permit
Winn-Dixie Montgomery, Inc., to sell its closed fuel center and
underlying tract of land located in Jackson, Mississippi, to
Eckstein Properties, LLC, or to a party submitting a higher or
better offer, free and clear of liens, claims, and interests.
D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in
New York, relates that prior to the Petition Date, the Debtors
operated the Jackson Property as a fuel center adjacent to a
Winn-Dixie grocery store. As part of the Debtors' footprint
reduction, they have rejected the Jackson Store and exited the
market.
Through DJM Asset Management, Inc.'s marketing efforts for the
Jackson Property, the Debtors have received two offers including
the offer by Eckstein for $350,000. The Debtors have determined
that Eckstein's offer is the highest or best offer for the
Jackson Property.
Accordingly, the parties entered into a real estate purchase
agreement dated February 3, 2006, for the sale and transfer of WD
Montgomery's interest in the Jackson Property.
Eckstein has paid $100,000 in escrow as an earnest money deposit.
Solicitation of Higher and Better Offers
Notwithstanding that the Assets have been sufficiently marketed,
the Debtors are soliciting higher and better bids for the Assets.
All bids must comply with the Court-approved bidding procedures.
To qualify as a competing bid, the offer must net the Debtors'
estates at least $360,000 and be accompanied by a certified check
made out to Winn-Dixie Stores, Inc., in an amount equal to 10% of
the competing bid.
If the Debtors receive a higher or better offer for the Assets,
they will conduct an auction on March 8, 2006, at 10:00 a.m.
(prevailing Eastern Time) at the offices of Smith Hulsey & Busey,
225 Water Street, Suite 1800, Jacksonville, Florida.
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. Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. 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. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Wants to Sell Miramar Outparcel to Highest Bidder
-------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates lease Store No.
250 located in a shopping center in Miramar, Florida. Winn Dixie
Stories also own a piece of property adjacent to the Miramar
Store. The Debtors have no development plans for the Miramar
Outparcel, D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in New York, relates.
Through the marketing efforts of DJM Asset Management, Inc., the
Debtors received six offers for the Miramar Outparcel. The
Debtors have determined that BankAtlantic's $2,575,000 offer is
the highest and best offer for the Miramar Outparcel.
The Debtors and BankAtlantic entered into a Purchase Agreement
dated Jan. 4, 2006, where the Debtors agreed to sell WD
Stores' fee simple title interest in the Miramar Outparcel, and
WD Stores' interest in all related appurtenances, rights,
easements, rights-of-way, tenement, and hereditaments to
BankAtlantic.
BankAtlantic has deposited an initial earnest money deposit of
$100,000 and a second deposit of $150,000 with an escrow agent.
The parties agree that the initial minimum overbid that may be
accepted by the Debtors at any auction must have a value of at
least $2,555,100.
The Debtors will be responsible for payment of the brokerage
commission due to BankAtlantic's broker, totaling $70,000, only
if the transaction is consummated at the date and time of
Closing.
Accordingly, the Debtors seek authority from the U.S. Bankruptcy
Court for the Middle District of Florida to sell WD Store's
interest in the Miramar Outparcel and all related assets, free and
clear of liens, claims, interests, and subject to higher or better
offers.
Mr. Baker notes that any sale of the Miramar Outparcel, including
the proposed sale to BankAtlantic, will include exclusive use
restrictions to assure that no entity may develop the property in
a way that competes with the Debtors' Miramar Store.
Auction
If the Debtors receive a higher or better offer for the Assets,
they will conduct an auction on March 8, 2006, at 10:00 a.m., at
the offices of Smith Hulsey & Busey, 225 Water Street, Suite
1800, in Jacksonville, Florida.
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. Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. 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. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WORLDCOM INC: Jackson's Claim Disallowed on Summary Judgment
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved WorldCom, Inc., and its debtor-affiliates' request to
disallow Claim No. 38495.
As reported in the Troubled Company Reporter on Jan. 3, 2006,
Stephanie Jackson filed Claim No. 38495 against WorldCom, Inc.,
and its debtor-affiliates, asserting certain wage amounts. The
Debtors employed Ms. Jackson from December 17, 1999, to March 31,
2000.
Teresa L. Clark, Esq., at Stinson Morrison Hecker, LLP, in
Kansas City, Missouri, pointed out Ms. Jackson asserted wages but
did not specify the basis or amount of the Claim or attach any
supporting documentation.
In addition, Ms. Clark contended that Rule 3003(c) of the Federal
Rules of Bankruptcy Procedure mandates that a claimant file a
timely proof of claim against a chapter 11 debtor's estate to
participate in the debtor's reorganization.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News,
Issue No. 113; Bankruptcy Creditors' Service, Inc., 215/945-7000)
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
March 2, 2006
TURNAROUND MANAGEMENT ASSOCIATION
TMA NY Young Professionals - Fourth Annual Networking Event
SLATE Billiards, New York, New York
Contact: 646-932-5532 or http://www.turnaround.org/
March 2, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
Pal's Cabin, West Orange, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
March 2-3, 2006
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
Legal and Financial Perspectives on Business Valuations &
Restructuring (VALCON)
Four Seasons Hotel, Las Vegas, Nevada
Contact: http://www.airacira.org/
March 2-5, 2006
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
2006 NABT Spring Seminar
Sheraton Crescent Hotel, Phoenix, Arizona
Contact: http://www.pli.edu/
March 4-6, 2006
NORTON INSTITUTES ON BANKRUPTCY LAW
Bankruptcy Law Institute
Marriott, Park City, Utah
Contact: 770-535-7722 or
http://www2.nortoninstitutes.org/
March 8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Center Club, Baltimore, Maryland
Contact: 703-912-3309 or http://www.turnaround.org/
March 9, 2006
AMERICAN BANKRUPTCY INSTITUTE
Nuts & Bolts for Young Practitioners
Century Plaza, Los Angeles, California
Contact: 1-703-739-0800; http://www.abiworld.org/
March 9, 2006
TURNAROUND MANAGEMENT ASSOCIATION
"Toot Your Own Horn" Forum
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
March 9, 2006
TURNAROUND MANAGEMENT ASSOCIATION
UTS Fundamentals of Turnaround Management for SMEs
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
March 10, 2006
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Battleground West
Century Plaza, Los Angeles, California
Contact: 1-703-739-0800; http://www.abiworld.org/
March 15, 2006
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
South Florida
Contact: 561-882-1331 or http://www.turnaround.org/
March 15, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Function
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
March 15-17, 2006
STRATEGIC RESEARCH INSTITUTE
Mid-Market March Madness: Capitalizing on M&A, Buyouts &
Turnaround Opportunities
Omni Hotel at CNN Center, Atlanta, GA
Contact: 925-825-8738 or
http://www.srinstitute.com/
March 16, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Speaker Series #1
Ernst & Young Tower, Calgary, Alberta
Contact: 403-294-4954 or http://www.turnaround.org/
March 16, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Morning Meeting with ACG
Dallas Country Club, Dallas, Texas
Contact: 214-228-9706 or http://www.turnaround.org/
March 16, 2006
NEW YORK SOCIETY OF SECURITY ANALYSTS
2nd Annual Strike up a Network with NYSSA:
A Night of Bowling
Leisure Time Bowl, New York, New York
Contact: http://www.nyssa.org/
March 20, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Transaction Exchange Luncheon
Wiley Rein and Fielding LLP, Washington, DC
Contact: 703-912-3309 or http://www.turnaround.org/
March 21, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Dinner Program
TBA, Seattle, Washington
Contact: 503-223-6222 or http://www.turnaround.org/
March 22-25, 2006
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Desert Ridge, Phoenix, Arizona
Contact: http://www.turnaround.org/
March 28, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Centre Club, Tampa, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
March 30-31, 2006
PRACTISING LAW INSTITUTE
Commercial Real Estate Financing: What Borrowers &
Lenders Need to Know Now
Chicago, Illinois
Contact: http://www.pli.edu/
March 30 - April 1, 2006
AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION
Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
Drafting, Securities, and Bankruptcy
Scottsdale, Arizona
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/
April 1-4, 2006
NORTON INSTITUTES ON BANKRUPTCY LAW
Bankruptcy Law Institute
The Flamingo, Las Vegas, Nevada
Contact: 770-535-7722 or
http://www2.nortoninstitutes.org/
April 5-8, 2006
MEALEYS PUBLICATIONS
Insurance Insolvency and Reinsurance Roundtable
Fairmont Scottsdale Princess, Scottsdale, Arizona
Contact: http://www.mealeys.com/
April 6, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Commercial Lenders Breakfast
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
April 6-7, 2006
BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES
The Seventh Annual Conference on Healthcare Transactions
Successful Strategies for Mergers, Acquisitions,
Divestitures, and Restructurings
The Millennium Knickerbocker Hotel, Chicago,
Illinois
Contact: 903-595-3800; 1-800-726-2524;
http://www.renaissanceamerican.com/
April 11, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Comedy Night at Governors
TBA, Levittown, New York
Contact: 631-251-6296 or http://www.turnaround.org/
April 12, 2006
TURNAROUND MANAGEMENT ASSOCIATION
The Great Debate
ANZ Bank, Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
April 12, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Marriott Tyson's Corner, Vienna, Virginia
Contact: 703-912-3309 or http://www.turnaround.org/
April 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Monthly Dallas/Ft. Worth meeting
CityPlace Center, Dallas, Texas
Contact: 214-228-9706 or http://www.turnaround.org/
April 18-22, 2006
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
JW Marriott, Washington, D.C.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 19, 2006
PRACTISING LAW INSTITUTE
Residential Real Estate Contracts & Closings
New York, New York
Contact: http://www.pli.edu/
April 25, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Citrus Club, Orlando, FL
Contact: 561-882-1331 or http://www.turnaround.org/
May 2006
TURNAROUND MANAGEMENT ASSOCIATION
Regional Golf Event
TBD, Austin (tentative), Texas
Contact: 214-228-9706 or http://www.turnaround.org/
May 4, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Commercial Lenders Breakfast
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
May 4-6, 2006
AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION
Fundamentals of Bankruptcy Law
Chicago, Illinois
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/
May 5, 2006
AMERICAN BANKRUPTCY INSTITUTE
Nuts & Bolts for Young Practitioners
Alexander Hamilton Custom House, New York, New York
Contact: 1-703-739-0800; http://www.abiworld.org/
May 7-9, 2006
INTERNATIONAL BAR ASSOCIATION
Restructuring Among the Ruins
Hotel Bretagne
Athens, Greece
Contact: harriet.rowland@int-bar.org or
http://www.ibanet.org/
May 8, 2006
AMERICAN BANKRUPTCY INSTITUTE
NYC Bankruptcy Conference
Millennium Broadway, New York, New York
Contact: 1-703-739-0800; http://www.abiworld.org/
May 10, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Center Club, Baltimore, Maryland
Contact: 703-912-3309 or http://www.turnaround.org/
May 10, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Function
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
May 11, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Casino Night
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
May 17, 2006
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
Bankers Club, Miami, FL
Contact: 561-882-1331 or http://www.turnaround.org/
May 18, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
TBA, Bergen County, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
May 18, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Eastside Wine & Dine
TBA, Seattle, Washington
Contact: 503-223-6222 or http://www.turnaround.org/
May 18-19, 2006
BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES
Third Annual Conference on Distressed Investing Europe
Maximizing Profits in the European Distressed Debt Market
Le Meridien Piccadilly Hotel, London, UK
Contact: 903-595-3800; 1-800-726-2524;
http://www.renaissanceamerican.com/
May 22, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Women's Golf 101
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
May 22, 2006
TURNAROUND MANAGEMENT ASSOCIATION
LI TMA Annual Golf Outing
Indian Hills Golf Club, Long Island, New York
Contact: 631-251-6296 or http://www.turnaround.org/
May 24, 2006
TURNAROUND MANAGEMENT ASSOCIATION
"Toot Your Own Horn" Forum
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
May 30, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Centre Club, Tampa, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
June 1, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Commercial Lenders Breakfast
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
June 1-2, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Southeast Regional Conference
Amelia Island, Florida
Contact: 410-347-7391 or http://www.turnaround.org/
June 5, 2006
TURNAROUND MANAGEMENT ASSOCIATION
TMA NY Golf & Tennis Outing -
MEMBERS & SPONSORSHIP REGISTRATION
Fresh Meadow Country Club, Lake Success, New York
Contact: 646-932-5532 or http://www.turnaround.org/
June 7-10, 2006
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
22nd Annual Bankruptcy & Restructuring Conference
Grand Hyatt, Seattle, Washington
Contact: http://www.airacira.org/
June 8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Speaker Series #2
Ernst & Young Tower, Calgary, Alberta
Contact: 403-294-4954 or http://www.turnaround.org/
June 8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Hedge Fund / Private Equity Round Table
CityPlace Center, Dallas, Texas
Contact: http://www.turnaround.org/
June 14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Signature Luncheon, Charity Event
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
June 14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Marriot Tyson's Corner, Vienna, Virginia
Contact: 703-912-3309 or http://www.turnaround.org/
June 14, 2006 (tentative)
TURNAROUND MANAGEMENT ASSOCIATION
LI TMA Texas Hold'em for Charity
Long Island, New York
Contact: 631-251-6296 or http://www.turnaround.org/
June 15-18, 2006
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
June 20, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
TBA, Morristown, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
June 21-23, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Global Educational Symposium
Hyatt Regency, Chicago, Illinois
Contact: http://www.turnaround.org/
June 22-23, 2006
BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES
Ninth Annual Conference on Corporate Reorganizations
Successful Strategies for Restructuring Troubled
Companies
The Millennium Knickerbocker Hotel, Chicago,
Illinois
Contact: 903-595-3800; 1-800-726-2524;
http://www.renaissanceamerican.com/
June 27, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Citrus Club, Orlando, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
June 29 - July 2, 2006
NORTON INSTITUTES ON BANKRUPTCY LAW
Bankruptcy Law Institute
Jackson Lake Lodge, Jackson Hole, Wyoming
Contact: 770-535-7722 or
http://www2.nortoninstitutes.org/
July 12, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Function
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
July 12, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Center Club, Baltimore, Maryland
Contact: 703-912-3309 or http://www.turnaround.org/
July 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Women's Event
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
July 13-16, 2006
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Newport Marriott, Newport, Rhode Island
Contact: 1-703-739-0800; http://www.abiworld.org/
July 18, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
Marriott, Red Bank, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
July 19, 2006
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
South Florida
Contact: 561-882-1331 or http://www.turnaround.org/
July 25, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Centre Club, Tampa, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
July 26-29, 2006
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz Carlton Amelia Island, Amelia Island, Florida
Contact: 1-703-739-0800; http://www.abiworld.org/
July 31, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Annual Golf & Tennis Outing
Raritan Valley Country Club, Bridgewater, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
July 31, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Summer Social BBQ
Colonial Springs Country Club, Long Island, New York
Contact: 631-251-6296 or http://www.turnaround.org/
August 3, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Commercial Lenders Breakfast
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
August 3-5, 2006
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
August 9, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Professional Development Meeting
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
August 16, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Family Night Baseball with the NJ Jackals
(Yogi Berra Autograph Night)
Jackals Stadium, Montclair, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
August 29, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Citrus Club, Orlando, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
September 6, 2006
TURNAROUND MANAGEMENT ASSOCIATION
4th Annual Alberta Golf Tournament
Kananaskis Country Golf Course, Kananaskis, Alberta
Contact: 403-294-4954 or http://www.turnaround.org/
September 7, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Business Mixer
TBA, Seattle, Washington
Contact: 503-223-6222 or http://www.turnaround.org/
September 7-8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Saratoga Regional Conference
Gideon Putnam Hotel, Saratoga Springs, New York
Contact: http://www.turnaround.org/
September 7-9, 2006
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Wynn Las Vegas, Las Vegas, Nevada
Contact: 1-703-739-0800; http://www.abiworld.org/
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Marriott Tyson's Corner, Vienna, Virginia
Contact: 703-912-3309 or http://www.turnaround.org/
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
TBA, Secaucus, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
LI Turnaround Formal Event
Long Island, New York
Contact: http://www.turnaround.org/
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Function
Sydney, Australia
Contact: 0438 653 179 or www.turnaround.org
September 17-24, 2006
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
Optional Alaska Cruise
Seattle, Washington
Contact: 800-929-3598 or http://www.nabt.com/
September 20, 2006
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
Bankers Club, Miami, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
September 26, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Centre Club, Tampa, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
September 27, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Joint Education Program with NYIC Joint Reception
CFA/RMA/IWIRC
Woodbridge Hilton, Iselin, NJ
Contact: http://www.turnaround.org/
September 27, 2006
TURNAROUND MANAGEMENT ASSOCIATION
7th Annual Cross Border Business Restructuring and
Turnaround Conference
Banff, Alberta
Contact: http://www.turnaround.org/
October 5, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Commercial Lenders Breakfast
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
October 10, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Center Club, Baltimore, Maryland
Contact: 703-912-3309 or http://www.turnaround.org/
October 11, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Professional Development Meeting
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
October 11-14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
2006 Annual Conference
Milleridge Cottage, Long Island, New York
Contact: 312-578-6900; http://www.turnaround.org/
October 19, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Billards Networking Night - Young Professionals
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
October 26, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Speaker Series #3
TBA, Calgary, Alberta
Contact: 403-294-4954 or http://www.turnaround.org/
October 31, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Citrus Club, Orlando, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
November 1-4, 2006
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
San Francisco, California
Contact: http://www.ncbj.org/
November 7, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
Marriott, Bridgewater, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
November 8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Marriott Tyson's Corner, Vienna, Virginia
Contact: 703-912-3309 or http://www.turnaround.org/
November 8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
TMA Australia National Conference
Sydney, Australia
Contact: http://www.turnaround.org/
November 15, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Joint Reception with NYIC/NYTMA
TBA, New York
Contact: 908-575-7333 or http://www.turnaround.org/
November 15, 2006
LI TMA Formal Event
TMA Australia National Conference
Long Island, New York
Contact: http://www.turnaround.org/
November 15, 2006
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
Citrus Club, Orlando, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
November 16, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Dinner Program
TBA, Seattle, Washington
Contact: 503-223-6222 or http://www.turnaround.org/
November 28, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Centre Club, Tampa, FL
Contact: 561-882-1331 or http://www.turnaround.org/
November 29, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Special Program
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
November 30-December 2, 2006
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Hyatt Regency at Gainey Ranch, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
December 7, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
The Newark Club, Newark, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
December 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
LI TMA Holiday Party
TBA, Long Island, New York
Contact: 631-251-6296 or http://www.turnaround.org/
December 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Christmas Function
GE Commercial Finance, Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
February 2007
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
San Juan, Puerto Rico
Contact: 1-703-739-0800; http://www.abiworld.org/
April 11-15, 2007
AMERICAN BANKRUPTCY INSTITUTE
ABI Annual Spring Meeting
J.W. Marriott, Washington, DC
Contact: 1-703-739-0800; http://www.abiworld.org/
March 27-31, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Spring Conference
Four Seasons Las Colinas, Dallas, Texas
Contact: http://www.turnaround.org/
March 29-31, 2007
ALI-ABA
Chapter 11 Business Reorganizations
Scottsdale, Arizona
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/
June 6-9, 2007
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
23rd Annual Bankruptcy & Restructuring Conference
Westin River North, Chicago, Illinois
Contact: http://www.airacira.org/
June 14-17, 2007
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
July 12-15, 2007
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Marriott, Newport, RI
Contact: 1-703-739-0800; http://www.abiworld.org/
October 10-13, 2007
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Orlando, Florida
Contact: http://www.ncbj.org/
October 16-19, 2007
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Copley Place, Boston, Massachusetts
Contact: 312-578-6900; http://www.turnaround.org/
December 6-8, 2007
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Westin Mission Hills Resort, Rancho Mirage, California
Contact: 1-703-739-0800; http://www.abiworld.org/
March 25-29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Ritz Carlton Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
September 24-27, 2008
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Scottsdale, Arizona
Contact: http://www.ncbj.org/
October 28-31, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Copley Place, Boston, Massachusetts
Contact: 312-578-6900; http://www.turnaround.org/
October 5-9, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900; http://www.turnaround.org/
2009 (TBA)
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Las Vegas, Nevada
Contact: http://www.ncbj.org/
October 4-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
2010 (TBA)
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
New Orleans, Louisiana
Contact: http://www.ncbj.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.
*********
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, 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.
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