/raid1/www/Hosts/bankrupt/TCR_Public/060307.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, March 7, 2006, Vol. 10, No. 56
Headlines
ADELPHIA COMMS: Plan Voting Deadline Moved to March 13
ADELPHIA COMMS: Creditor Argues Plan Unfairly Discriminates
ADELPHIA COMMS: Has Access to $1.3MM DIP Facility Until August 7
ALLIANT TECHSYSTEMS: Moody's Rates Proposed Sr. Sub. Notes at B2
ALLIANT TECHSYSTEMS: S&P Rates Proposed $400 Million Notes at B+
AMERISOURCEBERGEN: Canadian Subsidiary Acquires Asenda Pharma
ANGIOTECH PHARMACEUTICALS: S&P Puts B Rating on $250 Mil. Notes
AOL LATIN: Court Extends Plan Solicitation Period to May 20
AOL LATIN: Ct. Extends Cicerone's Employment as Financial Advisor
ATA AIRLINES: Settles Dispute Over ICX Corporation's Unsec. Claims
ATA AIRLINES: Inks Stipulation Resolving Key Equipment's Claims
ATLANTIC GULF: Court Sets March 15 Auction for Sale of 185 Lots
ATLANTIC MUTUAL: A.M. Best Junks Ratings on $100 Mil. 6.05% Notes
BALL CORP: Selling $450 Million of Senior Bonds to Fund Buy-Outs
BANCO INDUSTRIAL: Moody's Rates Step-Up Subordinated Notes at B2
BOMBARDIER INC: Fitch Affirms Preferred Stock's Rating at B+
BOUNDLESS CORP: BP Audit Raises Going Concern Doubt
CAROLINA TOBACCO: Court Confirms Third Amended Chapter 11 Plan
CATHOLIC CHURCH: Portland Co-Defendants' Claims Will Be Estimated
CATHOLIC CHURCH: Portland Asks Court to Estimate DuFresnes' Claims
CELERO TECHNOLOGIES: Court Converts Case to Chapter 7 Liquidation
CELERO TECHNOLOGIES: Section 341(a) Meeting Scheduled for March 23
CHI-CHI'S: Asks Court to Approve Boozer Settlement Agreement
CINRAM INT'L: S&P Assigns BB Ratings With Negative CreditWatch
COLLINS & AIKMAN: Int'l Automotive Completes Buy of Europe Units
CONEXANT SYSTEMS: Offering $200M Conv. Notes in Private Placement
DANA CORP: Fitch Lowers Sr. Unsecured Debt Rating to CC from CCC
DEL MONTE: S&P Revises Outlook to Stable & Affirms BB- Rating
DELPHI CORP: Panel Wants Jefferies' Employment Application Amended
DELPHI CORP: Wants Court to Okay Thompson Hine as I.P. Counsel
DELPHI CORP: ERISA Claimants Wants Court to Certify Their Claims
EINSTEIN ACADEMY: Case Summary & 17 Largest Unsecured Creditors
ELEC COMMS: Nussbaum Yates Raises Going Concern Doubt
ENTERPRISE PRODUCTS: Looks to Raise $375 Mil. in Equity Offering
ESCHELON TELECOM: S&P Raises Corp. Credit Rating to B- from CCC+
ESTATE PROPERTIES: Voluntary Chapter 11 Case Summary
FEDERAL-MOGUL: Wants to Transfer Equity Interests in Chinese Units
FLINTKOTE COMPANY: Wants Removal Period Extended Until August 28
GENCORP INC: Fitch Affirms Subordinated Notes' Ratings at B-
GENERAL MOTORS: Denies Rumors of Suzuki Stake Sale
GENEVA STEEL: Panel Want to Conduct Rule 2004 Examination Tomorrow
GOODYEAR TIRE: Conv. Sr. Notes of 82 Holders Registered for Resale
GRUPO TMM: Earns $23.6 Million in Fourth Quarter 2005
HAPS USA: Posts $2.7 Million Net Loss in Quarter Ended December 31
HEALTHSOUTH CORP: Prices $400M Pref. Stock in Private Placement
HUNTSMAN CORP: Planned Spin-Off Cues Moody's to Affirm B1 Rating
INNOVA PURE: Earns $9,600 in Second Quarter Ended December 31
J.L. FRENCH: Court Approves Pachulski Stang as Bankruptcy Counsel
J.L. FRENCH: Section 341(a) Meeting Scheduled for March 21
JOY GLOBAL: S&P Raises Corporate Credit Rating to BBB- from BB+
JP MORGAN: Moody's Affirms B3 Rating on $4 Mil. Class M Certs.
K-SEA TRANSPORTATION: Moody's Withdraws B2 Rating on Proposed Debt
LARGE SCALE: Selling Owensboro Facility for $6.4 Million
MARSH SUPERMARKETS: Weak Returns Prompt Moody's to Cut Ratings
MIRANT CORPORATION: Court Approves N.Y. State DEC Consent Order
MUSICLAND HOLDING: Creditors Panel Hires Hahn & Hessen as Counsel
MUSICLAND HOLDING: Court Okays Olshan Grundman as Panel's Counsel
NELLSON NUTRACEUTICAL: Hires Pachulski Stang as Bankruptcy Counsel
NELLSON NUTRACEUTICAL: U.S. Trustee Appoints Five-Member Committee
NEW ORLEANS: Case Summary & 20 Largest Unsecured Creditors
NEWQUEST INC: Standard & Poor's Withdraws Single-B Rating
NORTHWEST AIRLINES: S&P Says D Rating Not Affected by Agreement
NORTHWESTERN CORP: Earns $59.5 Million for Year Ended Dec. 31
NOVOSTE CORP: Glass Tells Shareholders to Vote for Dissolution
NTL INC: Telewest Merger Approval Prompts S&P to Affirm B+ Rating
NVE INC: Has Until May 15 to File Chapter 11 Reorganization Plan
NVE INC: Court Approves Nicoll & Davis as Special Patent Counsel
O'SULLIVAN IND: Wants to Walk Away from Seven Executory Contracts
PLUSFUNDS GROUP: Case Summary & 20 Largest Unsecured Creditors
PUBLIC STEERS: S&P Lowers Two Debt Class Ratings to BB from BBB-
QUEEN'S SEAPORT: Court Sets March 28 Mediation For All Parties
QUICKSILVER RESOURCES: S&P Rates Proposed $300 Million Notes at B
SAGITTARIUS BRANDS: S&P Rates Planned $330 Million Bank Loan at B
SEACOR HOLDINGS: S&P Raises $150 Million Notes' Ratings to BBB-
SILICON GRAPHICS: Projects $20 Mil. Lay-Off & Restructuring Costs
SOLUTIA INC: Completes Buy Out of Vitro Plan's 51% Quimica Stake
STAR GAS: S&P Revises Rating's Watch Implication to Developing
SUMMIT METALS: SSG Completes Sale of Riverside & Monarch Units
SUN HEALTHCARE: Lender Consents to Facility Buy-Sell-Lease Deal
SUNNY DELIGHT: S&P Puts B Corp. Credit Rating on Negative Watch
TELEWEST COMMS: NTL Merger Approval Cues S&P to Lower Rating to B+
THREE-FIVE: Wants to Employ Harding Shymanski as Accountants
TIDEL TECHNOLOGIES: Balance Sheet Upside-Down by $1.2MM at Dec. 31
TRUMP ENTERTAINMENT: Incurs $26.1 Mil. Net Loss in Fourth Quarter
UNITED WOOD: Court Conditionally Approves Disclosure Statement
WOLF DEN: Involuntary Chapter 11 Case Summary
WORLD HEALTH: Taps King & Spalding as Lead Bankruptcy Counsel
W.R. GRACE: Wants $250-Mil. DIP Facility Extended for 2 More Years
XTREME COMPANIES: Acquires Challenger Offshore for $4.3 Million
* Pachulski Stang Changes Firm Name & Relocates Wilmington Office
* Proskauer Rose Names Andrew S. Robins as Partner in Fla. Office
* Large Companies with Insolvent Balance Sheets
*********
ADELPHIA COMMS: Plan Voting Deadline Moved to March 13
------------------------------------------------------
The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for
the Southern District of New York extended the deadline for the
submission of ballots and master ballots to accept or reject
Adelphia Communications Corporation and its debtor-affiliates'
Fourth Amended Plan of Reorganization to March 13, 2006, at
4:00 p.m., prevailing New York time.
A full-text copy of the Fourth Amended Disclosure Statement is
available for free at http://ResearchArchives.com/t/s?31b
A full-text copy of the Fourth Amended Plan of Reorganization is
available for free at http://ResearchArchives.com/t/s?31a
Headquartered in Coudersport, Pa., Adelphia Communications
Corporation (OTC: ADELQ) is the fifth-largest cable television
company in the country. Adelphia serves customers in 30 states
and Puerto Rico, and offers analog and digital video services,
high-speed Internet access and other advanced services over its
broadband networks. The Company and its more than 200 affiliates
filed for Chapter 11 protection in the Southern District of New
York on June 25, 2002. Those cases are jointly administered under
case number 02-41729. Willkie Farr & Gallagher represents the
ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee,
Tuchin, Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 122;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADELPHIA COMMS: Creditor Argues Plan Unfairly Discriminates
-----------------------------------------------------------
Scientific-Atlanta, Inc., objects to confirmation of Adelphia
Communications Corporation and its debtor-affiliates' plan of
reorganization.
Scientific-Atlanta is one of the largest non-programming trade
suppliers to Adelphia and its subsidiaries, affiliates and managed
entities. In addition to selling set-tops and related materials
and equipment, Scientific-Atlanta also provides customer and
product support services.
Before the Debtors filed for bankruptcy, Scientific-Atlanta sold
set-tops to ACOM. As instructed by ACOM, Scientific-Atlanta
drop-shipped the items to various warehouse and other locations
throughout the country maintained by the Operating Companies. All
invoices for set-tops sold were issued to and in the name of ACOM
at its Coudersport, Pennsylvania, address and indicated the names
and locations to which the set-tops were shipped. Invoices were
paid through ACOM's centralized cash management systems.
Harvey A. Strickon, Esq., at Paul Hastings Janofsky & Walker LLP,
in New York, notes that the Plan establishes a separate class of
trade creditors for the Holding Company Group designated as
ACC-Trade. Class ACC-Trade includes all trade claims of ACOM.
The ACC-Trade class is estimated to total $341,000,000.
The set-tops sold by Scientific-Atlanta appear to have been
delivered to and used by the FrontierVision, Parnassos, Century,
CCC, Olympus and UCA debtor groups, trade creditors of which are
to receive consideration under the Plan, if confirmed, of 108% of
the allowed amounts of their claims.
The Operating Companies intend to satisfy the claims of their
direct unsecured creditors in full, with interest, while ACOM
intends to satisfy its direct unsecured creditors only to the
extent of a fraction of their claims, estimated to be between 12%
and 24%.
ACOM's Schedules of Assets and Liabilities acknowledged that the
Operating Companies received the benefit of the set-tops that
were drop-shipped directly to them, yet the treatment that the
Plan proposes for Scientific-Atlanta as a Class ACC-Trade
claimant is different than the treatment of those creditors who
did business directly with the Operating Companies, Mr. Strickon
points out.
Scientific-Atlanta objects to the confirmation of the Plan on the
ground that certain trade creditors, like itself, treated and
scheduled as creditors of the Operating Companies will be
receiving different treatment under the Plan from those creditors
who did business directly with the Operating Companies. The Plan
unfairly discriminates between trade creditors of the Operating
Companies and de facto trade creditors of the Operating
Companies, like Scientific-Atlanta and other similarly situated
ACOM trade creditors, Mr. Strickon contends.
Headquartered in Coudersport, Pa., Adelphia Communications
Corporation (OTC: ADELQ) is the fifth-largest cable television
company in the country. Adelphia serves customers in 30 states
and Puerto Rico, and offers analog and digital video services,
high-speed Internet access and other advanced services over its
broadband networks. The Company and its more than 200 affiliates
filed for Chapter 11 protection in the Southern District of New
York on June 25, 2002. Those cases are jointly administered under
case number 02-41729. Willkie Farr & Gallagher represents the
ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee,
Tuchin, Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 122;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADELPHIA COMMS: Has Access to $1.3MM DIP Facility Until August 7
----------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Vanessa A. Wittman, Adelphia Communications
Corporation's executive vice president and chief financial
officer, discloses that on Feb. 21, 2006, the Company and
certain of its subsidiaries entered into a commitment letter and
a related fee letter with:
-- JPMorgan Chase Bank, N.A.,
-- J.P. Morgan Securities, Inc.,
-- Citigroup Global Markets, Inc., and
-- Citicorp North America, Inc.
J.P. Morgan Securities and Citigroup Global Markets are the
Co-Lead Arrangers.
Ms. Wittman relates that the Committed Banks have agreed to
provide to ACOM and certain of its subsidiaries a portion of and
to syndicate an extended debtor-in-possession credit facility.
Among other things, the Extended DIP Facility:
(a) provides for a $1,300,000,000 facility, comprised of an
$800,000,000 revolving credit facility (including a
$500,000,000 letter of credit sub facility) and a
$500,000,000 term loan;
(b) extends the maturity date from March 31, 2006, to
August 7, 2006;
(c) extends the date for delivery of:
-- ACOM's consolidated audited financial statements for
the fiscal year ended December 31, 2005, until no later
than April 30, 2006, and
-- the combining unaudited schedule for each borrower
group under the Extended DIP Facility for the fiscal
year ended December 31, 2005, until no later than
May 31, 2006;
(d) increases the aggregate amount of Intercompany Loans
that may be made to ACOM and the Borrower in the Joint and
Several Borrower Group from $100,000,000 to $130,000,000
that will:
-- be used solely for Permitted Purposes; and
-- not be subject to the monthly true-up required by the
Cash Management Protocol, but will be repaid in full on
the Effective Date;
(e) permits Intercompany loans to be made by each of the
Participating Borrowers to the Holding Company Guarantors
in an aggregate maximum amount of $320,000,000 which will
be used by the Holding Company Guarantors to make payments
to certain Borrower Groups on the implementation of a new
cost allocation methodology that the Debtors are in the
process of finalizing;
(f) increases the amount of Shared Capital Expenditures that
the Joint and Several Borrower Group will be permitted
to allocate to the other Borrower Groups from $200,000,000
to $230,000,000;
(g) eliminates the SPV structure contained in the Existing DIP
Facility and the provision that each existing SPV will be
designated as a Holding Company Guarantor;
(h) decreases the interest rate margin applicable to loans
made under the Extended DIP Facility by 25 basis points;
and
(i) changes the Borrowing Limits and extension of the
financial covenants levels of each Borrower Group through
the new maturity date:
Borrower Group Initial Final
-------------- ------- -----
Century $690,000,000 $650,000,000
Century-TCI 230,000,000 250,000,000
UCA 100,000,000 75,000,000
Parnassos 10,000,000 10,000,000
FrontierVision 215,000,000 205,000,000
Olympus 25,000,000 25,000,000
Seven A 0 0
Seven B 20,000,000 75,000,000
Seven C 10,000,000 10,000,000
------------- -------------
TOTAL $1,300,000,000 $1,300,000,000
The Debtors are required to pay certain fees to the DIP Lenders
as consideration for the commitments under the Commitment Letter
and the extension of the Existing DIP Facility. Pursuant to the
Commitment Letter and the other extension documents, the Debtors
have agreed to reimburse each Co-Lead Arranger and the other DIP
Lenders their reasonable out-of-pocket expenses incurred in
connection with the Extended DIP Facility and related
documentation.
Pursuant to a Fee Letter, the Debtors will be required to pay:
1. Marketing Fees
To the Co-Lead Arrangers (for the account of each lender
under the Extended DIP Facility), up-front fees to market the
Extended DIP Facility equal to 0.05% of each lender's
aggregate commitment under the Extended DIP Facility
(or $650,000 in the aggregate). The Marketing Fees will be
paid in full on the closing date of the Extended DIP Facility.
2. Annual Administrative Fee
To JPMorgan Chase Bank, N.A., as administrative agent under
the Extended DIP Facility, an annual administrative fee of
$250,000, payable in equal quarterly installments.
3. Collateral Fee
To Citicorp North America, Inc., as collateral agent under the
Extended DIP Facility, an annual collateral administration fee
of $250,000, payable in equal quarterly installments.
4. Arrangement Fee
To J.P. Morgan Securities Inc., a $250,000 arrangement fee,
which will be payable on the closing date of the Extended DIP
Facility.
Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher LLP, in New
York, states that it is imperative that the maturity date of the
Existing DIP Facility be extended and that the Debtors have
continued access to borrowings under the Extended DIP Facility in
order to be provided with the financing necessary for them to:
a. pay restructuring expenses and interest on prepetition debt
pending consummation of the Plan and the sale transactions
with Time Warner NY Cable LLC and Comcast Corporation;
b. continue to operate their businesses through consummation
of the Plan and the Sale Transaction;
c. avoid liability for breach of any covenants contained in
the Purchase Agreements.
A full-text copy of the Extended DIP Facility Commitment Letter
with the Summary of Terms and Conditions is available for free
at http://ResearchArchives.com/t/s?617
The Debtors ask the Court to authorize and approve:
-- the amendments to the DIP Credit Agreement;
-- the Commitment letter; and
-- the payment of fees and expenses contemplated in the Fee
Letter.
Cash Management Protocol Amendment
The ACOM Debtors also seek the Court's authority to amend the
Cash Management Protocol.
The Cash Management Protocol provides for the treatment of
certain postpetition intercompany advances and intercompany
claims among the Loan Parties. The Cash Management Protocol
generally requires, among other things, that all advances that
are made by a Loan Party in one Borrower Group to a Loan Party in
another Borrower Group be repaid on or before the 19th business
day of the month following the month in which that intercompany
advance was made. The Protocol has been amended several times.
The ACOM Debtors now want the Protocol further amended to
authorize the making of additional loans to ACOM by the
Participating Borrowers in an aggregate maximum amount of
$30,000,000, which ACOM will use for general corporate purpose
and to make a loan to the 7A Borrower. The 7A Borrower will use
the new 7A Loan only for Permitted Purposes.
Mr. Shalhoub says the New ACOM Loan and the New 7A Loan will not:
1. be calculated in the manner set in the matrix attached to
the Cash Management Protocol;
2. bear interest on a monthly basis at the rate equal to the
blended rate of interest for the relevant period with
respect to amounts outstanding under the Existing DIP
Facility;
3. mature on the last business day of the month in which the
New Loan is made; or
4. be repaid by the 19th business day of the month after the
month of the New Loan's creation.
Rather, the New Loan contemplates that:
1. the aggregate principal amount of the New Loan, together
with all accrued and unpaid interest, will mature and be
repaid on the Effective Date;
2. with respect to each New ACOM Loan made by a Participating
Borrower, the aggregate principal amount will bear interest
at a rate equal to the weighted average interest rate of
the loans made to the applicable Participating Borrower
under the terms of the Extended DIP Facility, with weighted
average interest rate being reset on a monthly basis; or
3. with respect to the New 7A Loan, the aggregate principal
amount will bear interest at the rate equal to the weighted
average interest rate of all New ACOM Loans, with weighted
average interest rate being reset on a monthly basis.
Headquartered in Coudersport, Pa., Adelphia Communications
Corporation (OTC: ADELQ) is the fifth-largest cable television
company in the country. Adelphia serves customers in 30 states
and Puerto Rico, and offers analog and digital video services,
high-speed Internet access and other advanced services over its
broadband networks. The Company and its more than 200 affiliates
filed for Chapter 11 protection in the Southern District of New
York on June 25, 2002. Those cases are jointly administered under
case number 02-41729. Willkie Farr & Gallagher represents the
ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee,
Tuchin, Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 122;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ALLIANT TECHSYSTEMS: Moody's Rates Proposed Sr. Sub. Notes at B2
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Alliant
Techsystems Inc.'s proposed senior subordinated notes, due 2016,
and affirmed all of the company's existing ratings. The rating
outlook is stable.
The ratings continue to reflect the strong and stable financial
performance and cash flow generation that has ensued from
successful integration of recent acquisitions amidst a favorable
industry environment. The ratings also consider the company's
relatively high leverage, the high level of goodwill in the
company's asset base, as well as a sizeable under-funded pension
plan.
The stable ratings outlook reflects Moody's expectations that ATK
will continue to grow its revenue base while pursuing modestly-
sized acquisitions with no significant increases in debt levels,
while returning to a policy of modest debt repayments upon
conclusion of its current share repurchase program.
Ratings or their outlook could be subject to upward revision if
the company were to reduce debt and improve operating profits and
cash flows such that leverage were to fall below 3.5 times and if
free cash flow were to exceed 15% of debt for a sustained period,
while the company curtails its share repurchase program to more
modest levels.
Conversely, ratings could be lowered if loss of contracts or
unexpected deterioration in operating performance were to occur,
if the company were to increase its use of cash for share
repurchase, or if ATK were to increase debt levels materially for
any reason, such that Debt/EBITDA were to exceed 5 times or free
cash flow were to fall below 5% of total debt.
The purpose of the proposed notes offering is to repay, by way of
tender offer, the company's existing $400 million of senior
subordinated notes due 2011. Although Moody's expects that the
new notes offering may lower interest expense marginally and
extend the company's overall debt maturity profile, the rating
agency views the transaction as having an immaterial impact on
ATK's credit fundamentals, as total debt is essentially unchanged.
The subordinated notes being tendered are callable in May 2006.
ATK has illustrated a degree of improvement in its credit metrics
over recent quarters owing to growth in its revenue base at
steady, if not slightly improving operating margins. For the LTM
period ending Jan. 1, 2006, ATK's revenues grew to $3.1 billion,
representing 11% growth from FY 2005 sales, demonstrating
successful integration of acquisitions made in recent years as
well as strength in the defense contracting sector.
The company generated approximately $423 million in EBITDA and
$259 million in operating cash flow over this period. This
resulted in interest coverage metrics and free cash flow levels
which are appropriate for the Ba3 rating.
Moreover, with approximately $125 million expended over this
period on share repurchases, ATK had only reduced balance sheet
debt by approximately $68 million over this time. As such,
leverage remained relatively high for this rating category, at
approximately 4.3 times as of January 2006.
The leverage calculation is heavily influenced by pension under-
funding estimated at about $400 million; the high leverage is
mitigated somewhat by ATK's government contract structures that
treat a substantial portion of the company's pension costs as
allowable costs, which is typical of many U.S. defense
contractors. Going forward, Moody's expects continued moderate
growth in revenue and free cash flows, allowing the company to
resume moderate levels of debt repayment over the near term.
The B2 rating assigned to the new senior subordinated notes, two
notches below the senior implied rating and the same as the
existing senior subordinated notes subject to redemption as well
as the senior convertible subordinated notes due 2024, reflects
the substantial amount of secured debt that is ahead of these
securities in claim, as well as subordination to all current and
future potential senior unsecured obligations of the company.
Also, on a balance sheet with about $3.05 billion in total assets,
over $1.17 billion comprises goodwill, while fixed assets
represents only about $439 million. In Moody's opinion, this
implies weak asset coverage for debt below the senior secured
facilities in claim, increasing the likelihood of loss of
principal to holders of these notes under a distressed or default
scenario.
This rating has been assigned:
* Senior subordinated notes due 2016, rated B2.
These ratings have been affirmed:
* Senior secured credit facilities due 2009, at Ba2
* Senior subordinated notes due 2011, at B2
* Senior convertible subordinated notes due 2024, at B2
* Corporate Family Rating at Ba3
Headquartered in Edina, Minnesota, Alliant Techsystems, Inc.,
supplies propulsion, composite structures, munitions, precision
capabilities, and civil and sporting ammunition.
ALLIANT TECHSYSTEMS: S&P Rates Proposed $400 Million Notes at B+
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
Alliant Techsystems Inc.'s proposed $400 million subordinated
notes due 2016, a drawdown on the company's Rule 415 shelf
registration.
At the same time, Standard & Poor's affirmed its other ratings,
including the 'BB' corporate credit rating, on the ammunition and
propulsion supplier. Ratings were raised to current levels on
Feb. 17, 2006. The outlook is stable.
The proceeds from the new notes will be used to tender for the
company's $400 million 8.5% subordinated notes due 2011. Alliant
has around $1.1 billion in debt.
"The ratings on Alliant reflect a somewhat aggressively leveraged
balance sheet and active acquisition program, but benefit from
leading market positions, satisfactory profitability, and a
generally favorable environment for defense spending," said
Standard & Poor's credit analyst Christopher DeNicolo.
Alliant is the leading manufacturer of solid rocket motors for
space launch vehicles and strategic missiles and is second in the
market for tactical missiles. In addition, the firm is the
largest provider of small caliber ammunition to the U.S. military
and has strong positions in tank and other types of ammunition.
Edina, Minnesota-based Alliant's revenues have more than tripled
since 2000 due mostly to a series of acquisitions that have
improved product and program diversity. Acquisitions in the high-
priority precision-guided munitions area have enabled the company
to win key contracts for advanced guided missiles and mortars.
Other acquisitions have bolstered Alliant's R&D and hypersonic
propulsion capabilities, and added new products such as satellite
components and propellant tanks.
Satisfactory profitability and cash flows, along with debt
reduction, are expected to result in a steadily strengthening
credit profile, despite likely share repurchases and the
possibility of small to moderate size debt-financed acquisitions.
The outlook could be revised to negative if leverage increases
materially to fund a major acquisition. An outlook revision to
positive is less likely in the near term.
AMERISOURCEBERGEN: Canadian Subsidiary Acquires Asenda Pharma
-------------------------------------------------------------
AmerisourceBergen Corporation (NYSE:ABC) reported that its wholly
owned subsidiary, AmerisourceBergen Canada Corporation, has signed
an agreement to acquire substantially all of the assets of
privately held Asenda Pharmaceutical Supplies Ltd. and a related
entity. The purchase price was not disclosed. AmerisourceBergen
expects to complete the acquisition by Mar. 31, 2006 and
anticipates Asenda will be neutral to fiscal year 2006 earnings
per share.
"Asenda is a logical expansion of our pharmaceutical distribution
business in Canada and continues AmerisourceBergen's strategic
focus on the pharmaceutical supply channel," said R. David Yost,
AmerisourceBergen Chief Executive Officer.
About Asenda Pharmaceutical Supplies Ltd.
Headquartered in Richmond, British Columbia, Asenda Pharmaceutical
Supplies Ltd. generated about $172 million in revenue over the
last twelve months. Asenda distributes pharmaceuticals in the
provinces of British Columbia and Alberta, strengthening
AmerisourceBergen Canada's position in western Canada.
About AmerisourceBergen Corporation
AmerisourceBergen Corporation -- http://www.amerisourcebergen.com/
-- is one of the world's largest pharmaceutical services companies
serving the United States, Canada and selected global markets.
Servicing both pharmaceutical manufacturers and healthcare
providers in the pharmaceutical supply channel, the Company
provides drug distribution and related services designed to reduce
costs and improve patient outcomes. AmerisourceBergen's service
solutions range from pharmacy automation and pharmaceutical
packaging to pharmacy services for skilled nursing and assisted
living facilities, reimbursement and pharmaceutical consulting
services, and physician education. With more than $54 billion in
annual revenue, AmerisourceBergen is headquartered in Valley
Forge, Pennsylvania, and employs more than 13,000 people.
* * *
As reported in the Troubled Company Reporter on Feb. 6, 2006,
Moody's Investors Service affirmed AmerisourceBergen Corporation's
debt ratings (Ba2 corporate family rating) and changed the
outlook to positive from stable.
Ratings affirmed:
AmerisourceBergen Corporation:
* Ba2 senior unsecured notes;
* Ba2 corporate family rating; and
* SGL-1 speculative grade liquidity rating.
ANGIOTECH PHARMACEUTICALS: S&P Puts B Rating on $250 Mil. Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' long-term
corporate credit rating to Vancouver, B.C.-based Angiotech
Pharmaceuticals Inc.
At the same time, Standard & Poor's assigned its 'B' senior
secured debt rating to Angiotech's US$250 million senior
subordinated notes and its 'BB-' rating to the company's
US$300 million term B bank loan and US$75 million revolving credit
facility, with a recovery rating of '2', indicating a substantial
recovery of principal in the event of default. The outlook is
negative.
"The ratings on Angiotech reflect our concern over the company's
product concentration, its high initial lease-adjusted debt
following the recently announced acquisition of specialty medical
device manufacturer American Medical Instruments, Inc., in
February 2006, its lack of earnings visibility in the medium term,
and integration risk," Standard & Poor's credit analyst Don
Povilaitis said.
"These factors are partially offset by the strong biotechnology
capability of Angiotech, especially as it relates to the success
of the licensed Taxus coronary drug eluting stent (DES), strong
cash flow capability, and the upside potential of the AMI
acquisition," Mr. Povilaitis added.
Angiotech is a Canadian specialty pharmaceutical company, whose
core strength is adding pharmaceutical compounds to medical
devices; its strategy is to target interventions with high failure
rates that would otherwise result in costly corrective surgeries.
A licensing agreement for the Taxus DES stent with marketing
partner Boston Scientific is the Angiotech's most important
source of revenue.
Product dependence remains a concern for Standard & Poor's as
royalty revenues from the Taxus stent represented more than 90% of
Angiotech's US$195 million fiscal 2005 revenues and despite the
doubling of revenues and increased diversity to result from the
AMI acquisition, Taxus royalties will still represent about half
of the company's 2006 revenues.
On Feb. 1, 2006, Angiotech agreed to acquire privately held AMI,
which Standard & Poor's views positively, as it will allow
Angiotech to transform from a pure R&D firm to a fully integrated
medical devices company, as well as help it migrate from a 100%
royalty and partner-dependent (Boston Scientific) model. The
benefits Angiotech gains from the acquisition include AMI's
manufacturing capability, a direct sales force of 60, and a
distribution network. AMI manufactures wound closure products;
and products for general, plastic, ophthalmic, and vascular
surgery; in addition, other devices are manufactured for
interventional radiology and vascular surgery.
AMI's products are characterized by low physician price
sensitivity and minimal reimbursement exposure. Angiotech's
strong biotechnology capabilities allow it to screen millions of
drugs per year to determine their suitability when applied to
devices (Angiotech does not manufacture devices), one of AMI's
specialties. Angiotech has identified numerous product
enhancement opportunities by combining its pharmaceuticals with
AMI's medical devices.
Angiotech faces numerous challenges with respect to the
integration of AMI, the largest acquisition in the company's
history. The company will have to execute its strategy of
leveraging much of the capital it had spent on previous internal
applications to AMI's devices. Another challenge will be to
prioritize the combined two companies' pipeline opportunities.
Finally, capacity use remains quite low at AMI's facilities at
about 50%, hence Angiotech will have to formulate a strategy to
more efficiently deploy this underutilized space.
The negative outlook incorporates the integration risks associated
with the AMI acquisition, as well as ongoing competitive and legal
dynamics that could potentially affect the company's Taxus-related
royalty revenues. There is limited upside for the ratings at this
time. Should the company's free cash flow be affected by such
unforeseen events, there could be a ratings downgrade.
Conversely, as Angiotech broadens its product portfolio and
reduces debt, the outlook could be revised to stable.
AOL LATIN: Court Extends Plan Solicitation Period to May 20
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware further
extended until May 20, 2006, America Online Latin America Inc.,
and its debtor-affiliates' time to solicit acceptances of their
Joint Plan of Reorganization and Liquidation from their creditors.
As reported in the Troubled Company Reporter on Mar. 6, 2006, the
Court approved the Debtors' Disclosure Statement explaining their
Joint Plan of Reorganization and Liquidation.
The Debtors give the Court three reasons why an extension of their
solicitation period is warranted:
a) it will allow the Debtors to complete the Plan solicitation
process in a reasoned and well-balanced manner without being
potentially distracted by alternative plans of
reorganization being filed and solicited by other parties-
in-interest;
b) the requested extension will not harm the Debtors' creditors
but it will maximize the value of their estates and it is in
the best interest of the Debtors' estates, their creditors
and other parties-in-interest; and
c) the principal stockholders of the Debtors have consented to
the request for an extension of the exclusive solicitation
period.
Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc. -- http://www.aola.com/-- offers AOL-branded
Internet service in Argentina, Brazil, Mexico, and Puerto Rico, as
well as localized content and online shopping over its proprietary
network. Principal shareholders in AOLA are Cisneros Group, one
of Latin America's largest media firms, Brazil's Banco Itau, and
Time Warner, through America Online. The Company and its debtor-
affiliates filed for Chapter 11 protection on June 24, 2005
(Bankr. D. Del. Case No. 05-11778). Pauline K. Morgan, Esq., and
Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP and
Douglas P. Bartner, Esq., at Shearman & Sterling LLP represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed total assets of
$28,500,000 and total debts of $181,774,000.
AOL LATIN: Ct. Extends Cicerone's Employment as Financial Advisor
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
America Online Latin America Inc. to extend its employment of
Cicerone Capital LLC as its financial advisors, nunc pro tunc to
Dec. 1, 2005.
As reported in the Troubled Company Reporter on Feb. 23, 2006, the
Debtor asked to extend its retention of Cicerone Capital pursuant
to the terms of a Second Extension Letter. The Bankruptcy Court
previously approved Cicerone Capital's employment as the Debtor's
financial advisors, nunc pro tunc to June 24, 2005.
Cicerone Capital's services include:
a) assisting the Debtors in identifying the target,
sectors, region and quantity of business entities and
assets in Latin America with respect to a potential
sale of the Debtors, the Non-Debtor Foreign
Subsidiaries or their respective assets;
b) advising and assisting the Debtors in analyzing and
evaluating the business, operations, properties,
financial condition, major liabilities, prospects and
potential synergies of the Debtors and any potential
purchaser;
c) participating in discussions with the Company's
directors shareholders, suppliers and investment
bankers and conduct management interviews, site visits,
data analysis and due diligence of the Company and any
potential purchaser;
d) reviewing the documents related to any potential sale
of the Debtors, the Non-Debtor Foreign Subsidiaries or
their respective assets, and prepare a valuation
analysis of the Debtors and any potential purchaser in
connection with that potential asset sale; and
e) providing all other financial advisory services to the
Debtors in connection with their chapter 11 cases.
Zain A. Manekia, a managing principal at Cicerone Capital,
disclosed that under the terms of the Second Letter Agreement,
the Firm will be paid:
1) a $25,000 monthly advisory fee; and
2) an [undisclosed] success fee in connection with a
marketing operations coordination agreement into between
AOL Brasil, Ltda., a wholly-owned subsidiary of the Debtor
and Terra Networks Brasil S.A.
Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc. -- http://www.aola.com/-- offers AOL-branded
Internet service in Argentina, Brazil, Mexico, and Puerto Rico,
as well as localized content and online shopping over its
proprietary network. Principal shareholders in AOLA are
Cisneros Group, one of Latin America's largest media firms,
Brazil's Banco Itau, and Time Warner, through America Online.
The Company and its debtor-affiliates filed for Chapter 11
protection on June 24, 2005 (Bankr. D. Del. Case No. 05-11778).
Pauline K. Morgan, Esq., and Edmon L. Morton, Esq., at Young
Conaway Stargatt & Taylor, LLP and Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represent the Debtors in their
restructuring efforts. When the Debtors filed for protection
from their creditors, they listed total assets of $28,500,000
and total debts of $181,774,000.
ATA AIRLINES: Settles Dispute Over ICX Corporation's Unsec. Claims
------------------------------------------------------------------
Prior to the bankruptcy filing, ATA Airlines, Inc., and its
debtor-affiliates leased seven aircraft pursuant to a leveraged
lease transaction -- the 2000 EETC Transaction. ICX Corporation
participated in the 2000 EETC transaction as an owner participant
for the aircraft bearing Tail Nos. N515AT and N525AT.
By virtue of being an owner participant for N515AT and N525AT
under the 2000 EETC Transaction, ICX entered into two separate tax
indemnity agreements with certain of the Reorganizing Debtors.
Wilmington Trust Company, as Indenture Trustee, was a party with
the Debtors to two separate lease agreements for N515AT and
N525AT.
After the Petition Date, ICX filed Claim Nos. 950, 960, 964 and
966 relating to the Leases and the TIA.
The Debtors objected to the ICX Claims as they pertained to the
Leases on these grounds:
-- improper amount;
-- insufficient documentation or explanation; and
-- improper classification.
The Debtors provided a method of calculating claims relating to
tax indemnification agreements and objected to the ICX Claims to
the extent that they exceed the TIA Formula.
After arm's-length negotiations between the Reorganizing Debtors
and ICX, the parties agree that:
(a) Claim No. 950 will be an Allowed Unsecured Convenience
Class Claim for $1,000,000, in full and complete
satisfaction of ICX's claims under the TIA for N515AT;
(b) Claim No. 964 will be an Allowed Unsecured Convenience
Class Claim for $1,000,000, in full and complete
satisfaction of ICX's claim under the TIA for N525AT;
(c) Distributions under the Plan on account of Claim No. 950
and Claim No. 964 as allowed will be delivered to:
Citizens Financial Group
Attn: Patrick C. Joyce, Senior Vice President
53 State Street, MBS970
Boston, MA 02109
(d) Claim Nos. 960 and 966 will be disallowed and expunged in
their entirety and Claim Nos. 950 and 964 will be
disallowed to the extent they seek recovery under the
Leases;
(e) Nothing will be deemed to waive, impair or otherwise
affect ICX's rights to pursue a non-Debtor third party for
any contractual or common law remedies it may have under
the Leases or related agreements; and
(f) The Reorganizing Debtors will withdraw their Objections
with respect to ICX and the ICX Claims.
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. 49; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ATA AIRLINES: Inks Stipulation Resolving Key Equipment's Claims
---------------------------------------------------------------
ATA Airlines, Inc., as lessee, and Key Equipment Finance, Inc., as
lessor, were parties to the several leases of aircraft, aircraft
engines, and related equipment:
* Lease Agreement N184AE, dated April 7, 2000, for the lease
of a Saab model 340B aircraft with manufacturer's serial
no. 340B-184, two General Electric model CT7-9B engines and
two Hamilton Standard model 14-RF propellers;
* Lease Agreement N191AE, dated April 7, 2000, for the lease
of a Saab model 340B aircraft with manufacturer's serial
no. 340B-191, two General Electric model CT7-9B engines and
two Hamilton Standard model 14-RF propellers; and
* Lease Agreement 31749, dated August 31, 2000, for the
lease of a Rolls-Royce model RB211-535E4 aircraft engine
with manufacturer's serial no. 31749.
The Aircraft Leases were rejected pursuant to Court orders entered
on March 7, 2005, and April 4, 2005.
On the Petition Date, ATA Airlines and Key Equipment were also
parties to five non-aircraft leases:
(1) a Master Equipment Lease Agreement, dated Nov. 8, 1999;
(2) Equipment Schedule No. 1, dated Nov. 8, 1999, to the
Master Lease;
(3) Equipment Schedule No. 2, dated Dec. 14, 2000, to the
Master Lease;
(4) Equipment Schedule No. 3, dated March 28, 2001, to the
Master Lease; and
(5) Equipment Schedule No. 4, dated June 22, 2001, to the
Master Lease.
On Jan. 31, 2006, ATA Airlines assumed Schedule Nos. 1 and 2 and
the Master Lease. Schedule Nos. 3 and 4 were rejected.
Key Equipment filed Claims Nos. 1297 to 1303 and 1343 to 1349,
asserting unsecured non-priority status. The Debtors objected to
claims.
In a Court-approved stipulation, the Reorganizing Debtors and Key
Equipment agree that these claims will be allowed as unsecured
non-priority claims against the estate of ATA Airlines:
Claim No. Amount
--------- ------
1343 $3,463,169
1344 930,564
1345 681,810
The parties further agree that the allowance of the Allowed Key
Leases Claims fully resolves all of the Key Equipments' Claims,
other than rejection damages claims related to the rejection of
Schedule Nos. 3 and 4 against the Reorganizing Debtors, or any of
the other Debtors.
Claim Nos. 1298, 1299, 1297, 1346, 1300, 1302, 1347, 1301 and
1303 will be expunged.
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. 49; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ATLANTIC GULF: Court Sets March 15 Auction for Sale of 185 Lots
---------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for
the District of Delaware approved uniform procedures governing the
sale of 185 lots of Atlantic Gulf Communities Corporation and its
debtor-affiliates' properties in Cumberland Lakes, Tennessee.
As reported in the Troubled Company Reporter yesterday, Michael B.
Joseph, the chapter 7 trustee appointed in the Debtors' cases,
asked the Court for permission to sell the lots to David Fetzner
and Aldo DiSorbo free and clear of any and all liens, claims,
interests and encumbrances.
Pursuant to a Sale Contract, the Trustee will transfer all of the
Debtors' right, title and interest in and to the 251.60-acre
property for $770,000, subject to certain adjustments, including
the satisfaction of about $140,000 of delinquent real estate
taxes. The transaction is a cash deal with no financing or
inspection contingencies.
The Sale Contract is subject to higher and better offers.
Sale Protocol
Interested parties may request additional materials designated by
the Trustee from J.D. Block Services, Inc.
Interested bidders should deliver written copies of their bids to:
Young Conaway Stargatt & Taylor, LLP
Attn: John D. McLaughlin, Jr., Esq.
The Brandywine Building
1000 West Street, 17th Floor
P.O. Box 391
Wilmington, DE 19899-0391
- and -
J.D. Block Services, Inc.
Attn: Jon N. Block
2301 West Sample Road
Building 3 Suite 4B
Ft. Lauderdale, FL 33073-3011
no later than 4:00 P.M. (ET), Monday, March 13, 2006.
A bidder will only be allowed to bid in the auction if it can:
(1) provide evidence sufficient for the Trustee to reasonably
determine that the potential bidder has the financial
ability to perform if it wins the auction;
(2) submit a qualified bid, other than consideration and the
identity of the buyer, substantially identical to those set
forth in the contract, with consideration for the sale in
an amount not less than $820,000. A full-text copy of the
Contract of Sale is available for free at
http://ResearchArchives.com/t/s?60c
(3) present the Trustee, on or before the Bid Deadline, with
both;
(a) a Qualified Bid; and
(b) a deposit in immediately available Federal funds equal
to 10% of the Qualified Bid.
The Deposit is refundable until the Court approves the
sale.
If there is at least one other qualified bidder aside from Messrs.
Fetzner and DiSorbo, the Trustee will conduct an auction at 11:00
a.m., Eastern time, on Wednesday, March 15, 2006, at Young
Conaway's offices. Bidding at the auction will be in $50,000
increments.
Headquartered in Fort Lauderdale, Florida, Atlantic Gulf
Communities Corporation was a developer and operator of luxury
residential real estate communities. The Company and its
affiliates filed for chapter 11 protection on May 1, 2001 (Bankr.
D. Del. Case Nos. 01-01594 through 01-01597). Michael R.
Lastowski, Esq., at Duane Morris LLP represents the Debtor. The
Bankruptcy Court converted the Debtors' chapter 11 cases to a
chapter 7 liquidation proceeding on June 18, 2002. Michael B.
Joseph is the chapter 7 Trustee for the Debtors' estates. John D.
McLaughlin, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP
represents the chapter 7 Trustee. Kurt F. Gwynne, Esq., at
Richard Reed Smith LLP, and Jan A. T. van Amerongen, Jr., Esq.,
represent the Official Committee of Unsecured Creditors. When the
Debtors filed for chapter 11 protection, they listed $148,546,000
in assets and $170,251,000 in liabilities.
ATLANTIC MUTUAL: A.M. Best Junks Ratings on $100 Mil. 6.05% Notes
-----------------------------------------------------------------
A.M. Best Co. downgraded the debt rating to "ccc" from "b+" on
$100 million of 6.05% 30-year surplus notes issued by Atlantic
Mutual Insurance Company in New York.
A.M. Best has also downgraded the financial strength ratings to B-
(Fair) from B+ (Very Good) and the issuer credit ratings to "bb-"
from "bbb-" of the Atlantic Mutual Companies (Atlantic) in New
York, and its property/casualty subsidiaries. All the above named
companies have been placed under review with negative
implications.
The ratings reflect the group's larger than expected loss of
surplus due to adverse reserve development in its discontinued
commercial lines reserves that caused approximately a $100 million
decline in surplus at year-end 2005.
The potential for continued adverse prior year development of the
group's loss reserves remains present and fuels the uncertainty
regarding its future financial strength, which remains dependent
upon Atlantic's underwriting and operating profitability (having
been weak in recent years) and remains an ongoing concern as the
group attempts to improve its situation.
Atlantic will remain under review with negative implications until
A.M. Best receives and reviews the group's most recent revised
business plans and projections. Atlantic remains challenged to
stabilize the prior year reserve development, continue the
improved profitability in its ongoing personal lines operations
and protect capital.
The following debt rating has been downgraded:
Atlantic Mutual Insurance Company-
-- to "ccc" from "b+" on $100 million 8.15% 30-year surplus
note, due 2028.
The FSRs have been downgraded to B- (Fair) from B+ (Very Good) and
the ICRs to "bb-" from "bbb-"and placed under review with negative
implications for the Atlantic Mutual Companies and its following
subsidiaries:
-- Atlantic Mutual Insurance Company
-- Centennial Insurance Company
A.M. Best Co., established in 1899, is the world's oldest and most
authoritative insurance rating and information source.
BALL CORP: Selling $450 Million of Senior Bonds to Fund Buy-Outs
----------------------------------------------------------------
Ball Corporation is offering $450 million in aggregate principal
amount of its Senior Notes due 2016 to partly fund its acquisition
of:
* the U.S. and Argentinean operations of U.S. Can Corporation;
and
* certain North American plastic bottle operations owned by
Alcan Inc.
The offering hinges on the closing of the U.S. Can buy-out but is
not conditioned on the closing of the Alcan Inc. acquisition.
Terms of the Notes
The Company will issue the notes under a base indenture with The
Bank of New York, as trustee.
Interest is payable on the notes on March 15 and September 15 of
each year beginning on Sept. 15, 2006. The notes mature on
March 15, 2016.
The notes are senior unsecured obligations of the company and will
rank:
-- equally in right of payment to all of existing and future
senior unsecured indebtedness; and
-- senior in right of payment to all future indebtedness that
expressly provides for its subordination to the notes.
The notes are junior to all secured indebtedness of the Company
and all liabilities, including trade payables, of the Company's
subsidiaries that are not guarantors of the notes.
The Company may redeem all or part of the notes on or after
March 15, 2011. Prior to March 15, 2009, the Company may redeem
up to 35% of the notes from the proceeds of certain equity
offerings. Prior to March 15, 2011, the Company may redeem any or
all of the notes upon payment of a "make-whole" premium.
The offer's joint-book running managers are:
* Lehman Brothers,
* Banc of America Securities LLC,
* JPMorgan,
* Deutsche Bank Securities,
* BNP Paribas, and
* Keybanc Capital Markets
Use of Proceeds
The Company estimates that the net proceeds from the notes sale
will be around $444 million after deducting the underwriting
discounts and estimated offering expenses. The net proceeds from
the notes, together with borrowings under a new term loan facility
under the Company's existing credit agreement, will be used to
finance the transactions.
This table summarizes the estimated sources and uses of funds for
the transactions, assuming a closing on March 27, 2006.
Sources of Funds:
Tranche D Term Loan Facility $ 500,000,000
Notes Offered Hereby 450,000,000
Ball Corporation Common Stock 47,000,000
-------------
Total Sources $ 997,000,000
=============
Uses of Funds:
Purchase Price for Alcan Bottles $ 180,000,000
Stock Portion of Purchase Price for U.S. Can 47,000,000
Repayment of U.S. Can Credit Facilities 255,000,000
Repurchase of U.S. Can's 12-3/8%
Senior Subordinated Notes Due 2010 125,000,000
Repurchase of U.S. Can's 10-7/8% Senior
Secured Notes Due 2010 172,000,000
Repayment of Borrowings Under Ball's
Multicurrency Revolving Credit Facility 167,000,000
Estimated Tender Offer Premiums, Accrued Interest,
Fees and Expenses 51,000,000
-------------
Total Uses $ 997,000,000
=============
A full-text copy of the Prospectus is available at no charge at
http://ResearchArchives.com/t/s?612
Headquartered in Broomfield, Colorado, Ball Corporation --
http://www.ball.com/-- is a supplier of high-quality metal and
plastic packaging products and owns Ball Aerospace & Technologies
Corp., which develops sensors, spacecraft, systems and components
for government and commercial customers. Ball reported 2005 sales
of $5.7 billion and the company employs 13,100 people worldwide.
* * *
As reported in the Troubled Company Reporter on Mar. 6, 2006,
Moody's Investors Service assigned ratings to Ball Corporation's
proposed $500 million senior secured term loan D, rated Ba1, and
proposed $450 million senior unsecured notes due 2016-2018, rated
Ba2.
Moody's also affirmed existing ratings, which include Ba1 ratings
on $1.475 billion senior secured credit facilities and
$550 million senior unsecured notes due Dec. 12, 2012. The
ratings outlook is stable. The ratings are subject to review of
final documentation.
As reported in the Troubled Company Reporter on Mar. 2, 2006,
Fitch Ball Corporation (NYSE: BLL) said Ball Corporation's
recently announced acquisitions will not affect the company's
credit ratings based on the currently available information.
Fitch currently rates BLL as:
-- Issuer default rating (IDR) 'BB'
-- Senior secured credit facilities 'BB+'
-- Senior unsecured notes 'BB'
As reported in the Troubled Company Reporter on Feb. 20, 2006,
Standard & Poor's Ratings Services revised its outlook on
Broomfield, Colo.-based Ball Corp. to stable from positive. At
the same time, Standard & Poor's affirmed its ratings, including
its 'BB+' corporate credit rating, on the metal can and plastic
packaging producer. These actions follow the recent announcement
by Ball that it has entered into a definitive agreement to acquire
U.S. Can Corp.'s (B/Watch Dev/--) U.S. and Argentinean operations
for approximately 1.1 million shares of Ball common stock plus the
assumption of $550 million of U.S. Can's debt.
BANCO INDUSTRIAL: Moody's Rates Step-Up Subordinated Notes at B2
----------------------------------------------------------------
Moody's Investors Service assigned a B2 long-term foreign-currency
debt rating to the US$120 million Step-Up Subordinated Notes, due
2016, of Banco Industrial e Comercial S.A. The outlook on the
rating is stable.
The rating agency said that the subordination of the notes had
been taken into consideration and applied to BICBANCO's Ba3 global
local-currency deposit rating. At this rating level, Moody's
notching guidelines determine a two-notch differential from the
base rating.
Moody's had assigned a D- bank financial strength rating to
BICBANCO. The bank's ratings are supported by a track record of
consistent profitability and asset quality, both of which are in
line with its business focus.
BICBANCO's operations are centered on short term, secured lending
to middle market companies. These operations are supported by
disciplined credit risk management and controls, and by a policy
of asset and liability diversification. The bank's financial
performance is therefore indicative of its ability to intermediate
to a higher-margined, riskier business segment while maintaining
adequate credit and operating costs.
BICBANCO is headquartered in Sao Paulo, Brazil. It had total
assets of R$6.7 billion and equity of R$505 million in December
2005.
This rating was assigned:
* US$120 million Step-Up Subordinated Notes: B2 long-term
foreign currency debt rating
BOMBARDIER INC: Fitch Affirms Preferred Stock's Rating at B+
------------------------------------------------------------
Fitch affirmed the ratings on Bombardier Inc. (BBD) and
Bombardier Capital Inc. (BC) as:
BBD:
-- Senior unsecured debt 'BB'
-- Credit facilities 'BB'
-- Preferred stock 'B+'
BC:
-- Senior unsecured debt 'BB'
Fitch also revised the Rating Outlook to Stable from Negative.
Due to the existence of a support agreement and demonstrated
support by the parent, BC's ratings are linked to those of BBD.
These ratings cover approximately $4.7 billion of outstanding debt
and preferred stock.
The Outlook revision is based on:
* continued strength in the business jet and turboprop markets;
* debt reduction; and
* the nearly finished restructuring at Bombardier
ransportation (BT).
Fitch estimates that BBD and BC reduced consolidated debt by more
than $2 billion in the fiscal year-ending Jan. 31, 2006 (FYE
2006), including on-balance sheet securitizations at BC, and they
will likely pay off an additional $1.1 billion of consolidated
debt in FYE2007 using existing cash balances.
Regional jet (RJ) production remains a significant concern, but
Fitch estimates that it accounts for less than 20% of BBD's
revenues and is being offset by the factors mentioned above.
Fitch believes the RJ concerns are reflected in the 'BB' rating,
but weak orders for 70-90 seat aircraft in the next year or a
significant weakening of the business jet market could lead to a
re-examination of the Rating Outlook.
The ratings reflect:
* the variability of free cash flow due to order flow at BT and
Bombardier Aerospace (BA);
* continued low margins and free cash flow;
* business jet market cyclicality;
* the sizable pension plan deficit;
* the impact of exchange rate volatility on financial results
and planning; and
* various RJ concerns.
Large term debt maturities over the next four years, certain
credit facility covenants, and the maturity of most of the
company's credit facilities in FYE2008 highlight the importance of
BBD's continued execution in the areas of margins and free cash
flow.
Factors supporting the ratings include:
* the company's cash position;
* diversification;
* large backlog at BT;
* leading market positions;
* the aforementioned health of the business jet and turboprop
markets;
* debt reduction program; and
* BT restructuring.
BBD's liquidity (excluding BC) remains solid, consisting of large
cash balances ($2.5 billion at Oct. 31, 2005) and several hundred
million dollars of availability under its credit facilities.
Fitch notes that approximately $1.1 billion of the cash on hand at
BBD is related to advances extended by BC to the parent, and much
of BBD's cash will be used to pay debt maturities at BC.
Fitch estimates that BBD and BC have sufficient liquidity to meet
cash obligations in the intermediate term. These obligations
mostly consist of debt maturities of approximately $1.1 billion in
FYE2007 and $900 million in FYE2008.
BBD (ex-BC) has $5.2 billion of credit facilities, with no
borrowings outstanding, but with nearly $4.2 billion of issued
letters of credit (LC). The bulk of these credit facilities
mature in July 2007. Fitch believes that continued operational
execution and lower debt levels will give BBD the flexibility to
renew some or all of these facilities while maintaining adequate
LC capacity.
Fitch believes this is also the case with the company's minimum
liquidity covenant ($1 billion), which Fitch believes could come
under pressure in mid-FYE2008 due to substantial debt payments and
the company's typical working capital cycle.
Strength in the markets for business jets and turboprop regional
aircraft have offset weakness in the RJ market. Through the third
quarter of FYE2006, BA's revenues were up 6.4% and EBITDA margins
improved fifty basis points to 7.8%.
For all of FYE2006, BA's aircraft deliveries rose to 337 from 329,
driven by a 45% increase in business jet deliveries (including
Flexjet deliveries). Industry-wide, Fitch expects business jets
deliveries to rise 10-15% in calendar year 2006.
RJ deliveries declined 32% in FYE2006 and BBD's RJ production
rates continue to be a significant concern. Other RJ concerns
include:
* low backlog;
* weak orders;
* uncertainty regarding development of new aircraft models;
* the future of the 50-seat RJ segment;
* the financing environment;
* contingent obligations related to past aircraft sales;
* the declining differential in labor costs between regional
operators and mainline carriers;
* rising competitive pressures; and
* the financial condition of the U.S. airline industry; which
is the main market for RJ's.
Partly offsetting these concerns are Fitch's estimate that RJ
manufacturing accounts for less than 20% of BBD's revenues and the
potential relaxation of scope clauses at US airlines, which could
spur demand for larger RJ's. Turboprop orders were strong in
FYE2006, and rising deliveries will help partially offset RJ
weakness.
The restructuring at BT should be completed in early FYE2007.
EBIT margins through the first nine months of FYE2006 (2.5% versus
-0.5%) reflect the restructuring efforts. Orders exceeded sales
through October, but sales declined 8% due to weakness in the
European market.
BOUNDLESS CORP: BP Audit Raises Going Concern Doubt
---------------------------------------------------
BP Audit Group, PLLC, expressed substantial doubt about Boundless
Corporation's ability to continue as a going concern after it
audited the Company's financial statements for the years ended
Dec. 31, 2004 and 2003. The auditing firm pointed to:
-- the Company and its subsidiaries' Chapter 11 bankruptcy
filing;
-- the Company's substantial losses from operations since
2000; and
-- the Company's stockholders' deficit of $14,905,000 at Dec.
Dec. 31, 2004.
BP Audit stressed that the continuation of the Company's business
as a going concern depends on its ability to confirm a plan of
reorganization under the Bankruptcy Code and emerge from
bankruptcy protection and then subsequently, among other things:
-- the ability of the Company to restructure the terms of
its secured debtors-in-possession financing to reduce its
cost of borrowing;
-- the ability of the Company to negotiate trade financing
with suppliers at acceptable terms;
-- the ability of the Company to negotiate contracts for the
sale of its manufacturing services to customers to
provide additional liquidity for operations;
-- the ability of the Company to generate cash from
operations and to maintain adequate cash on hand; and
-- the ability of the Company to achieve profitability.
In its annual report submitted with the Securities and Exchange
Commission on March 2, 2006, Boundless reported a $28,000 net
loss, in contrast to a $3,678,000 net loss incurred a year
earlier.
Revenues for the year ended Dec. 31, 2004, totaled $7,309,000,
as compared to $11,750,000 of revenue for the year ended Dec. 31,
2003. Management attributes the revenue decline in 2004 to a
reduction in sales of the Company's text terminals products, as
customers moved to alternative technologies, including graphic
displays.
At Dec. 31, 2004, the Company's balance sheet showed $3,010,000 in
total assets, and $17,915,000 in total liabilities, resulting in a
$14,905,000 stockholders' deficit.
A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?61a
Headquartered in Hauppauge, New York, Boundless Corp., is a global
technology company and is composed of two subsidiaries: Boundless
Technologies, Inc., a desktop display products company, and
Boundless Manufacturing Services, Inc., an emerging EMS company
providing build-to-order systems manufacturing, printed circuit
board assembly. The Company and its debtor-affiliates filed for
chapter 11 protection on March 12, 2003 (Bankr. E.D.N.Y. Case No.
03-81558). Jeffrey A. Wurst, Esq., at Ruskin Moscou Faltischek
PC, represents the Debtors in their restructuring efforts. When
the Debtor filed for protection from its creditors, it listed
total assets of $19,442,850 and total debts of $19,417,517.
CAROLINA TOBACCO: Court Confirms Third Amended Chapter 11 Plan
--------------------------------------------------------------
The Honorable Elizabeth L. Perris of the U.S. Bankruptcy Court for
the District of Oregon confirmed the Third Amended Chapter 11 Plan
of Reorganization filed by Carolina Tobacco Company. Judge Perris
confirmed the Debtor's Plan on Feb. 24, 2005.
The Court determined that the Plan satisfies the 13 standards for
confirmation required under Section 1129(a) of the Bankruptcy
Code.
Summary of Amended Plan
As reported in the Troubled Company Reporter on Nov. 4, 2005, on
the Effective Date, the Reorganized Debtor will be vested with all
of the property of its estate free and clear of all claims, liens,
encumbrances, charges and other interests of creditors, and may
operate its business free of any restrictions imposed by the
Bankruptcy Code or by the Bankruptcy Court.
The affairs of the Reorganized Debtor after the Effective Date
will be governed by the Reorganized Debtor and managed by its
current officers, directors and employees. A Financial Consultant
will be retained to assist the Debtor's financial reporting. The
Financial Consultant, together with the Reorganized Debtor, will
provide financial statements and budget reporting as he or she
deems appropriate, on a quarterly basis to all creditors who filed
with the Court a request that all notices under the Plan after the
Effective Date be given to them.
Treatment of Claims and Interests
The Plan groups claims and interests into seven classes.
Priority Claims are unimpaired. Allowed Priority Claims will be
paid in full with a cash payment equal to the amount of the
Allowed Claim shortly after the Effective Date or after a Priority
Claim becomes an Allowed Claim.
The Impaired Claims are:
1) the HOP Group Claim, which will retain its lien on the
Escrow Account with the same validity, extent and priority
as existed on the Petition Date. On the Plan's
confirmation, the Debtor will execute the HOP Settlement
Agreement since confirmation will be deemed as approval of
the Settlement Agreement on the Debtor's behalf. The Debtor
will contribute $31,009,757 from its Qualified Escrow
Account to the Settlement in full satisfaction of the
HOP Group's Allowed Claim, as soon as all conditions to
the Settlement have been satisfied. If the HOP Settlement
Agreement is not consummated, the HOP Group and the Debtor
will reserve all claims, offsets and rights against each
other as existed on the Petition Date;
2) General Unsecured Claims totaling approximately $64,804
will be paid in full with:
a) 50% of the Allowed Claim to be paid on or before the
later of Sept. 30, 2006, or 30 days after the date upon
which the Priority Claim becomes an Allowed Claim, and
b) the remainder of the Allowed Claim to be paid on or
before the later of Dec. 31, 2006, or 30 days after the
date upon which the Claim becomes an Allowed Claim;
3) Allowed Unsecured Claim of CPI-NV totaling approximately
EUR300,000 will be paid in full, with payments of
EUR66,000 to be paid on or before Sep. 30, 2006, and
payments of EUR33,000 every year from Sept. 30, 2006, until
Sept. 30, 2013;
4) Conditional Allowed Unsecured Claims of the States of the
U.S. for Pre-Petition Escrow Deposits, which are estimated
to be between $4.5 million to $6.8 million. The States
will be paid proceeds of the 2004 Pre-Petition Escrow
Deposits, to be paid 12% in September 2006, 36% in December
2006, 22% in September 2007; and the remaining 30% in
December 2007. The States will receive aggregate deposits
of the 2005 Pre-Petition Escrow Deposits estimated to be
$3,582,666 on or before April 15, 2006;
5) Allowed Penalty Claims will be paid in full so long as the
total of those Allowed Claims do not exceed $500,000. If
the total of those Allowed Claims exceed $500,000, the
Debtor will pay those Claims in quarterly installments of
$250,000, plus interest; and
6) Interest Holders will retain their legal, equitable and
contractual rights under the Plan, but those Holders will
receive no payments until all Claims provided for in the
Plan are paid in full.
A full-text copy of the Third Amended Plan is available for a fee
at http://ResearchArchives.com/t/s?2be
Headquartered in Portland, Oregon, Carolina Tobacco Company
-- http://www.carolinatobacco.com/-- manufactures Roger-brand
cigarettes. The Company filed for chapter 11 protection on
April 18, 2005 (Bankr. D. Ore. Case No. 05-34156). Tara J.
Schleicher, Esq., at Farleigh Wada & Witt P.C., represents the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed $24,408,298 in assets and
$14,929,169 in debts.
CATHOLIC CHURCH: Portland Co-Defendants' Claims Will Be Estimated
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on Feb. 20, 2006, The
Archdiocese of Portland in Oregon asked the U.S. Bankruptcy Court
for the District of Oregon to estimate the claims asserted by its
co-defendants at $0:
Co-defendant Claim No.
------------ ---------
Order of Friar Servants of Mary 120
Redemptorist Society of Oregon 173
St. Mary's Home 323
Mt. Angel Abbey 451
Mt. Angel Abbey 453
Franciscan Friars of California 454
Franciscan Friars of Oregon 455
Thomas W. Stilley, Esq., at Sussman Shank LLP, in Portland,
Oregon, notes that each of Claims are claims for indemnity or
contribution filed by the co-defendants in relation to certain
tort claims asserted against them and the Archdiocese.
St. Mary's Home Objects
N. Robert Stoll, Esq., at Stoll Stoll Bernell Lokting &
Shlachter, P.C., in Portland, Oregon, contends that St. Mary's
Home for Boys has no information on how to value the existing and
threatened claims against it, other than to base its valuation on:
-- the amount alleged by the claimants; or
-- the value set by the Court on other similar claims alleged
by personal injury plaintiffs against the Archdiocese of
Portland.
St. Mary's Home also has no comment on the merits of the pending
and threatened claims against it. However, to the extent that
judgment would be entered, St. Mary's Home believes that a jury
would ultimately assign full liability to the Archdiocese.
Mr. Stoll points out that in the past, the Archdiocese was wholly
responsible for the placement and supervision of its personnel and
the assignment and supervision of various nuns that provided
services at St. Mary's Home. Thus, the Archdiocese has agreed to
indemnify St. Mary's Home for damages it incurred as a result of
alleged physical or sexual abuse.
The Archdiocese is well aware of this, and its counsel has been
given numerous documents and evidence confirming its
indemnification and contribution obligations to St. Mary's Home,
Mr. Stoll asserts.
St. Mary's Home wants the Court to require the Archdiocese to set
aside sufficient funds -- not less than $1,000,000 -- to cover any
indemnification or contribution claims brought by St. Mary's
Home as a result of the abuses committed by the Archdiocese's
employees and individuals.
* * *
The U.S. Bankruptcy Court for the District of Oregon will consider
Portland's request to estimate the seven co-defendants' claims at
the evidentiary hearing on the Archdiocese's request to estimate
the present child sex abuse claims.
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers. David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case. In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities. (Catholic Church Bankruptcy News,
Issue No. 53; Bankruptcy Creditors' Service, Inc., 215/945-7000)
CATHOLIC CHURCH: Portland Asks Court to Estimate DuFresnes' Claims
------------------------------------------------------------------
The Archdiocese of Portland in Oregon asks Judge Elizabeth L.
Perris of the U.S. Bankruptcy Court for the District of Oregon to
estimate and to temporarily allow Claim Nos. 473, 474, and 475,
filed by Nathan DuFresne, Paul DuFresne, and Deborah DuFresne, at
$5,000 each, for purposes of voting and confirmation of its Plan
of Reorganization.
The Archdiocese believes that the DuFresnes' Claims are of little
value because the DuFresnes have no viable legal theory with
regards to their claims.
Thomas Dulcich, Esq., at Schwabe, Williamson & Wyatt, PC, in
Portland, Oregon, relates that the essence of Deborah and Paul
DuFresnes' claims stems from one incident -- the dismissal of
their son Nathan from the seventh grade class of a private school.
Among other things, the DuFresnes assert that they have suffered
emotional distress as a result of Nathan's dismissal.
Under Oregon law, a claim for emotional distress must be supported
by a "defendant's intentionally harming a plaintiff with conduct
that goes beyond all decency of a civilized society," Mr. Dulcich
points out. In Nathan's case, there was no proof of physical
injury. No expenses claimed for counseling, therapy or mental
health treatment was likewise sought.
Basically, Mr. Dulcich contends, the DuFresnes have no damages.
The DuFresnes also have no "jury appeal."
DuFresnes Object
Karl I. Mullen, Esq., in Portland, Oregon, argues that the
Archdiocese's request should be denied because it:
-- failed to address the bulk of the DuFresnes' case; and
-- is premature and not an adequate mechanism for valuing the
DuFresnes' Claims.
Mr. Mullen notes that the Archdiocese still does not care about
the anguish, guilt, embarrassment and emotional distress suffered
by the victims and their families.
"The value of emotional distress cannot be simply determined and
is a jury issue that generally cannot be calculated by a court,"
Mr. Mullen points out.
The DuFresnes, therefore, ask the Court to estimate their Claims
at "$2,250,000 average value." Alternatively, the Claims should
be estimated at their face value, which consists of:
* $919,700, in compensatory damages; and
* $9,000,000, in punitive damages.
Portland Talks Back
Mr. Dulcich informs Judge Perris that the DuFresnes have no
evidence that $2,250,000 is the "average value" of their Claim
against the Archdiocese. The DuFresnes also provide no basis for
their estimation.
Mr. Dulcich tells the Court that the DuFresnes' case is merely a
"spite case" not entitled to a jury trial. The real point of the
DuFresnes' lawsuit is gaining retribution for their "social
disappointment."
"There is nothing more than a non-actionable school disciplinary
matter. It is not the type of claim that merits any significant
estimated value," Mr. Dulcich asserts.
Court Sets Evidentiary Hearing
Since none of the DuFresne's Claims are for damages arising from
child sex abuse, Judge Perris finds it appropriate to consider the
DuFresnes' Claims separate from the child sex abuse claims.
Judge Perris will convene a hearing to consider estimation of
Nathan DuFresne's claim after Portland files an amended plan of
reorganization. The Court has directed Portland to file a revised
Plan by March 28, 2006.
Judge Perris directs the parties to submit to the Court
declarations or affidavits setting forth any direct testimony no
less than 14 days before the date of the hearing. The parties are
also required to advise the Court and opposing counsel, no less
than seven days before the hearing date, whether they intend to
cross-examine the declarants.
Judge Perris finds that the claims of Paul and Deborah DuFresne
include tort claims for which they have a right to jury trial.
Under Portland's proposed Plan, the estimated amount of present
tort claims that would be used to cap the fund available to pay
present tort claims would include the estimated amount of Mr. and
Mrs. DuFresne's claims. Thus, according to Judge Perris,
estimation of Paul and Deborah DuFresne's claims presents the same
issue as estimation of the present child sex abuse claims, in that
estimation is being used for distribution purposes.
"The estimation must be done by the district court," Judge Perris
says.
Judge Perris will recommend to the District Court that Paul and
Deborah DuFresne's claims be estimated at $10,000 each.
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers. David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case. In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities. (Catholic Church Bankruptcy News,
Issue No. 53; Bankruptcy Creditors' Service, Inc., 215/945-7000)
CELERO TECHNOLOGIES: Court Converts Case to Chapter 7 Liquidation
-----------------------------------------------------------------
The Honorable Diane W. Sigmund of the U.S. Bankruptcy Court for
the Eastern District of Pennsylvania approved Celero Technologies,
Inc., fka Sima Training Holdings, Inc.'s request to convert its
chapter 11 case to a chapter 7 liquidation proceeding.
The Debtor reminded the Court that during the course of its
chapter 11 proceedings, Verizon, its largest customer, had until
Dec. 31, 2005, under the terms of a prepetition contract to elect
whether or not to exercise an option to expand its license rights
to use the Debtor's SimShop(R) technology and pay $1.5 million.
The Debtor says that Verizon opted not to exercise that option
and, as a result, the Debtor's prospect for a successful
reorganization dramatically decreased.
The Debtor also disclosed that Verizon failed to pay a $250,000
non-contingent obligation due on Jan. 1, 2006. The Debtor says
that non-payment by Verizon resulted in the company not having
enough cash to continue operating in the short term.
The U.S. Trustee for Region 3 appointed:
Terry P. Dershaw, Esq.
P.O. Box 556
Bryn Athyn, Pennsylvania 19009-0556
Telephone (215) 322-8800
Fax (215) 942-4010
to serve as the chapter 7 trustee, liquidate the Debtor's estate
and distribute the proceeds of that liquidation proceeding to
Celero's creditors.
Headquartered in Philadelphia, Pennsylvania, Celero Technologies,
Inc., filed for chapter 11 protection on August 22, 2005 (Bankr.
E.D. Pa. Case No. 05-31273). Amy E. Vulpio, Esq., Michelle A.
Schultz, Esq., and Robert A. Kargen, Esq., at White and Williams
LLP represent the Debtor. When the Company filed for protection
from its creditors, it listed $500,000 to $1 million in assets and
$10 million to $50 million in liabilities.
CELERO TECHNOLOGIES: Section 341(a) Meeting Scheduled for March 23
------------------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of Celero
Technologies, Inc., fka Sima Training Holdings, Inc.'s, creditors
at 11:30 a.m., on Mar. 23, 2006, at the Office of the U.S.
Trustee, Meeting Room, Suite 501, 833 Chestnut Street in
Philadelphia, Pennsylvania.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in the Debtor's chapter 7
liquidation proceedings.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Philadelphia, Pennsylvania, Celero Technologies,
Inc., filed for chapter 11 protection on August 22, 2005 (Bankr.
E.D. Pa. Case No. 05-31273). Amy E. Vulpio, Esq., Michelle A.
Schultz, Esq., and Robert A. Kargen, Esq., at White and Williams
LLP represent the Debtor. When the Company filed for protection
from its creditors, it listed $500,000 to $1 million in assets and
$10 million to $50 million in liabilities. On Feb. 22, 2006, the
Bankruptcy Court converted the case to a chapter 7 liquidation.
Terry P. Dershaw, Esq., in Bryn Athyn, Pa., serves as the chapter
7 trustee.
CHI-CHI'S: Asks Court to Approve Boozer Settlement Agreement
------------------------------------------------------------
William Kaye, as trustee of the Chi-Chi's Liquidating Trust --
Chi-Chi's, Inc., and its debtor-affiliates' successor-in-interest
-- asks the U.S. Bankruptcy Court for the District of Delaware to
approve a settlement agreement resolving their dispute with Boozer
Real Estate Services Inc.
The Debtors hired Boozer, prepetition, to sell its assets in the
closed restaurant located in 23 Timonium Road, Timonium, Maryland.
Boozer was entitled to 10% of the selling price -- $250,000. When
the Debtors filed for bankruptcy, it sought and obtained approval
of the sale without asking for Court permission to hire Boozer.
Boozer filed a proof of claim asserting its $25,000 commission.
The parties don't want to litigate the matter. Boozer agreed to
accept $12,500. The Trustee is amenable to making the payment.
Headquartered in Irvine California, Chi-Chi's, Inc., is a direct
or indirect operating subsidiary of Prandium and FRI-MRD
Corporation and each engages in the restaurant business. The
Debtors filed for chapter 11 protection on October 8, 2003 (Bankr.
Del. Case No. 03-13063-CGC). Bruce Grohsgal, Esq., Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., and Sandra Gail McLamb,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.,
represent the Debtors. Lawyers at Jaspan Schlesinger Hoffman LLP,
represent the Official Committee of Unsecured Creditors.
The Court confirmed the Debtors' First Amended Plan of Liquidation
on Dec. 15, 2005. The Plan became effective on Dec. 27, 2005.
The Chi-Chi's Liquidating Trust was created under the Plan as the
Debtors' successor-in-interest. William Kaye was appointed at
trustee for the Liquidating Trust. When the Debtor filed for
bankruptcy, it estimated $50 to $100 million in assets and more
than $100 million in liabilities.
CINRAM INT'L: S&P Assigns BB Ratings With Negative CreditWatch
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' long-term
corporate credit and bank loan ratings on prerecorded multimedia
manufacturer Cinram International Inc. on CreditWatch with
negative implications.
The CreditWatch placement follows Toronto-based Cinram's
announcement that its board of directors has approved the
conversion of Cinram into an income trust, subject to shareholder
approval and other conditions. Standard & Poor's is concerned
about the effect on the company's financial profile after
conversion to an income trust, including maintaining the current
debt level given the nonamortizing nature of the proposed new
loans and reducing financial flexibility due to the significant
increase in cash distributions to shareholders.
"Given the challenging conditions of the media replication
industry, including its commodity-like nature and vulnerability to
shifts in technology, Standard & Poor's ratings were based on
management's continued focus on debt repayment in the medium term
to strengthen the company's financial profile," Standard & Poor's
credit analyst Lori Harris said. "This financial strategy
will change upon conversion to an income trust," Ms. Harris added.
In resolving its CreditWatch listing, Standard & Poor's will meet
with management and review Cinram's overall financial policies, as
well as its operating and financial strategies.
Cinram is the world's largest independent manufacturer of
prerecorded multimedia products with revenues of US$2.1 billion in
2005.
COLLINS & AIKMAN: Int'l Automotive Completes Buy of Europe Units
----------------------------------------------------------------
International Automotive Components Group completed the previously
proposed acquisition of certain United Kingdom, German, Dutch,
Belgian, Spanish and Swedish businesses of Collins & Aikman
Europe.
IAC expects to close shortly on additional businesses in the
United Kingdom, Czech Republic and Slovakia. The aggregate
businesses recorded sales exceeding EUR425 million of automobile
interior components to Ford, General Motors, DaimlerChrysler,
Toyota, Renault, Volkswagen, Saab, Volvo, Jaguar and Bentley.
WL Ross & Co. LLC and Franklin Mutual Advisers, LLC provided the
equity funding for the cash purchase. Wilbur L. Ross, Chairman of
IAC, said, "We are delighted that the major international
automobile manufacturers have been so supportive of our entry into
the industry. They are the only reason our company exists." Mr.
Ross added, "Now we will try to finalize our arrangements to
acquire the European Interior Systems operations of Lear
Corporation and begin consolidating the industry."
The Joint Administrators of the Collins & Aikman Europe
restructuring have requested that the purchase price remain
confidential.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
CONEXANT SYSTEMS: Offering $200M Conv. Notes in Private Placement
-----------------------------------------------------------------
Conexant Systems, Inc. (NASDAQ: CNXT) plans to offer $200 million
aggregate principal amount of convertible subordinated notes due
2026 to qualified institutional buyers in a private placement.
Conexant expects to grant the initial purchaser of the notes an
option to purchase up to an additional $50 million aggregate
principal amount of the notes.
The company intends to apply the net proceeds from the offering of
the notes to the repayment or other retirement of outstanding
indebtedness.
The securities to be offered have not been registered under the
Securities Act of 1933, as amended, or applicable state securities
laws, and unless so registered, may not be offered or sold in the
United States except pursuant to an exemption from the
registration requirements of the Securities Act and applicable
state securities laws.
As reported in the Troubled Company Reporter on Jan. 30, 2006,
Dwight W. Decker, the Company's chairman and chief executive
officer said, "We are now focusing our efforts on the third and
final phase of our recovery plan, which consists of capitalizing
on the profit leverage in our current business model to deliver
accelerated earnings growth. In this phase, our highest-priority
goal is the achievement of double-digit core operating margins
before the end of calendar 2006."
Conexant Systems, Inc. -- http://www.conexant.com/-- is a
fabless semiconductor company. The company has approximately
2,400 employees worldwide, and is headquartered in Newport Beach,
California.
* * *
As reported in the Troubled Company Reporter on Dec. 20, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Newport Beach, California-based Conexant Systems, Inc.,
to 'B-' from 'B' on projections of sharply reduced sales and
profitability over the next few quarters. The outlook is
negative.
DANA CORP: Fitch Lowers Sr. Unsecured Debt Rating to CC from CCC
----------------------------------------------------------------
Hours before Dana Corporation sought chapter 11 protection last
Friday, Fitch Ratings downgraded these ratings on the auto parts
maker:
-- Issuer default rating to 'C' from 'CCC'
-- Senior secured bank facility to 'B-' from 'B'
-- Senior unsecured debt to 'CC' from 'CCC'
The recovery rating on the senior unsecured debt is 'RR4', and the
senior secured bank facility has a recovery rating of 'RR1'. Dana
remains on Rating Watch Negative by Fitch.
The rating downgrade reflects Dana's failure to pay $21 million in
interest scheduled for payment on March 1. Fitch's concerns also
include:
a) the protracted period of time in obtaining secured bank
financing;
b) a higher risk that liquidity needs could increase if
suppliers begin to insist on cash terms;
c) the potential for more aggressive restructuring actions
which could increase demands on cash;
d) Dana's reliance on the declining sport utility vehicle (SUV)
market; and
e) the company's financial condition heading into a potential
commercial vehicle downturn in 2007.
While the Rating Watch Negative status includes a going concern
issue, as reflected by the 'C' IDR, it also includes Fitch's
concerns regarding the outcome of an ongoing SEC accounting
investigation and uncertainty with respect to the final amount of
a secured bank line, which could impair the position of unsecured
bondholders.
Fitch estimates that as of Sept. 30, 2005, certain of Dana's bond
indentures restrict the company's ability to incur debt secured by
real property or the value of domestic subsidiary stock to about
$400 million (15% of net tangible assets, as defined) before pari
passu provisions within these indentures would otherwise be
triggered. Debt secured by most other assets is not specifically
restricted under Dana's indentures.
For this reason, Fitch believes that Dana has adequate tangible
assets available to also support a total of approximately $1
billion in bank and asset securitization facilities. Per Dana's
press release dated Nov. 21, 2005, the company has already pledged
to the banks certain domestic current assets and machinery and
equipment.
In the event that Dana's existing accounts receivable agreement
must be terminated, Fitch presumes that the lenders to the credit
agreement would benefit from first liens on the underlying
receivables collateral.
Fitch calculates that as of the end of the third quarter, Dana had
negative free cash flow for the previous 12 months of $712 million
versus full year 2004 negative free cash flow of $329 million. At
Sept. 30, 2005, Dana had:
* $145 million available under its bank facility;
* $55 million available under a $275 million accounts
receivable securitization program; and
* $730 million in cash and cash equivalents.
Given the rate of increase in negative free cash flow and the
amounts drawn at the end of the third quarter, there is a high
probability that Dana's current bank lines could now be fully
drawn.
DEL MONTE: S&P Revises Outlook to Stable & Affirms BB- Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on food
processor Del Monte Foods Co. to stable from positive.
At the same time, Standard & Poor's affirmed its ratings,
including its 'BB-' long-term and 'B-1' short-term corporate
credit ratings. San Francisco, California-based Del Monte had
about $1.3 billion of lease-adjusted total debt outstanding as of
Jan. 29, 2006.
The outlook revision reflects the expected delay in returning
credit measures to levels appropriate for a higher rating
following the company's announced $705 million acquisition of Meow
Mix Holdings Inc., the second-largest U.S. dry cat-food maker,
from the Cypress Group. The company intends to fund the Meow Mix
transaction with:
* about $210 million in expected proceeds from the announced
divestiture of its private label soup and infant feeding
business to Treehoue Foods Inc.;
* $300 million in new debt; and
* cash from operations.
DELPHI CORP: Panel Wants Jefferies' Employment Application Amended
------------------------------------------------------------------
As previously reported in the Troubled Company Reporter on Feb.
10, 2006, the Official Committee of Unsecured Creditors in Delphi
Corporation and its debtor-affiliates' chapter 11 cases seeks the
U.S. Bankruptcy Court for the Southern District of New York's
authorization to retain Jefferies & Company, Inc., as its
investment banker and financial advisor, effective as of
October 18, 2005.
David Daigle of Capital Research & Management Company, a member
of the Creditors Committee, explains that the services of
Jefferies are necessary and appropriate to enable the Committee
to evaluate the complex financial and economic issues related to
the Debtors' reorganization proceedings and to effectively
fulfill its statutory duties.
* * *
To address certain concerns raised by the Office of the United
States Trustee, the Official Committee of Unsecured Creditors
amends its original application to retain Jefferies & Companies,
Inc.
As the Committee's investment banker, Jefferies will:
(a) provide a valuation of the Debtors' enterprise value, on a
consolidated and division basis;
(b) provide a pricing of any securities to be issued in the
Restructuring, as well as evaluation of the terms of any
securities;
(c) evaluate any financing proposed as part of the
Restructuring;
(d) assist and advise the Committee in examining and analyzing
any potential or proposed strategy for restructuring or
adjusting the Debtors' outstanding indebtedness, labor
costs or capital structure;
(e) provide an analysis of restructuring proposals from
various constituencies;
(f) assist and advise the Committee in evaluating and
analyzing the proposed implementation of a Restructuring;
and
(g) render other investment banking services as may from time
to time be agreed.
The Committee has asked for, and Jefferies has agreed to,
additional conditions and procedures in connection with the
allowance and payment of compensation and the reimbursement of
expenses sought. The Additional Procedures, which are
substantially the same as those negotiated with the U.S. Trustee
and recently approved by the court in PSINet Inc., et al., Case
No. 01-13213 (Bankr. S.D.N.Y. July 11, 2001), provide that:
a. the fees and expenses will in all cases be subject to Court
approval under Section 328(a) of the Bankruptcy Code, as
incorporated in Section 330 of the Bankruptcy Code;
b. all fees will be paid to Jefferies on an interim basis only
in accordance with Court-established procedures for the
compensation of professionals; and
c. any fees or expenses paid to Jefferies but disapproved by
the Court will be promptly returned by Jefferies to the
Debtors' estates.
Jefferies' fees, as presented in the Committee's original
application, remain the same.
Accordingly, the Committee seeks the Court's authority to retain
Jefferies.
Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology. The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide. The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts. Robert J.
Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude,
Esq., at Latham & Watkins LLP, represents the Official Committee
of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance
sheet showed $17,098,734,530 in total assets and $22,166,280,476
in total debts. (Delphi Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DELPHI CORP: Wants Court to Okay Thompson Hine as I.P. Counsel
--------------------------------------------------------------
Delphi Corporation and its debtor-affiliates want to employ
Thompson Hine LLP as intellectual property counsel, nunc pro tunc
to October 8, 2005.
The Debtors need Thompson Hine to:
(a) review invention disclosures, prepare patentability
opinions, and prepare and file patent applications with
the U.S. Patent and Trademark Office focusing on, among
others, the areas of automotive braking suspension systems
and wheel bearings components and equipment;
(b) review correspondence from the Patent and Trademark Office
and preparation of amendments to patent applications to
secure grant of the patents related to its areas of
technical expertise;
(c) review potential products and inventions, conduct searches
for relevant patents and publications, review and analyze
uncovered patents and publications, and prepare opinions
related to its areas of technical expertise; and
(d) provide miscellaneous intellectual property advice and
counsel related to copyrights, trademarks and know-how and
contractual matters involving intellectual property.
The Debtors relate that Thompson Hine patent attorneys have
handled intellectual property matters for them since 1998 and
therefore have extensive experience with their products,
technology, personnel and attorneys. Thompson Hine patent
attorneys have technical expertise in the automotive, electrical,
chemical, computer and other technical fields.
David M. Sherbin, vice president, general counsel and chief
compliance officer of Delphi Corporation, discloses that Thompson
Hine has received $133,316 from Debtors in the 90 days prior to
the Petition Date, and no retainer.
As compensation for its services, Thompson Hine will be paid:
(1) $4,500 for preparing a United States utility patent
application; and
(2) $1,800 for preparing a response to an office action from
the United States Patent and Trade Office.
According to Mr. Sherbin, Thompson Hine acknowledges that all
amounts paid during the Debtors' Chapter 11 cases are subject to
the Court's final allowance.
Theodore D. Lienesch, Esq., a member of the firm, assures the
Court that Thompson Hine's professionals do not hold or represent
interest adverse to the Debtors' estate and other party-in-
interest in their Chapter 11 cases.
Aside from Mr. Liensch, the professionals who will have primary
responsibility for providing intellectual property legal services
to the Debtors include:
-- Megan Dowd Dortenzo, partner,
-- Steven J. Elleman, partner,
-- Christopher W. Elswick, associate,
-- Doughlas E. Erickson, senior attorney,
-- Kenneth Lily, patent agent,
-- Michael J. Nieberding, partner,
-- Troy S. Prince, associate, and
-- Victor J. Wasylyna, associate.
Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology. The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide. The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts. Robert J.
Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude,
Esq., at Latham & Watkins LLP, represents the Official Committee
of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance
sheet showed $17,098,734,530 in total assets and $22,166,280,476
in total debts. (Delphi Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DELPHI CORP: ERISA Claimants Wants Court to Certify Their Claims
----------------------------------------------------------------
On Feb. 6, 2006, Neal Folck, Greg Bartell, Donald McEvoy,
Irene Polito and Thomas Kessler filed a proof of claim on behalf
of themselves and a class of persons similarly situated.
The Class consists of all participants of the Delphi Savings-
Stock Purchase Program for salaried employees and the Delphi
Personal Savings Plan for hourly-rate employees and their
beneficiaries, on whose accounts their fiduciaries maintained
investments in Delphi common stock at any time between May 28,
1999, and November 3, 2005. The 401(k) Plans were operated and
administered by Delphi Corporation.
The 401(k) Plans suffered devastating losses as a result of the
imprudent and unlawful investment of the substantial portions of
its assets in Delphi Corporation and its debtor-affiliates' common
stock. The Claimants want to recover on behalf of the 401(k)
Plans for losses suffered as a result of the Debtors' multiple
breaches of their fiduciary duties in violation of Section 404 of
the Employee Retirement Income Security Act.
In this regard, the ERISA Claimants ask the U.S. Bankruptcy Court
for the Southern District of New York to apply Rule 7023 of the
Federal Rules of Bankruptcy Procedure to certify their proposed
class.
Gary A. Gotto, Esq., at Keller Rohrback, LLP, in Seattle,
Washington, asserts that prompt decision on class certification
is important because the losses suffered by the 401(k) Plans are
well in excess of $500,000,000 and affect the retirement accounts
of tens of thousands of current and former employees. There is a
strong public interest in permitting the 401(k) Plans and their
participants to ascertain the scope of their legal rights against
the Debtors arising out of the disastrous investment of
retirement assets in worthless stock, Mr. Gotto says.
Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology. The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide. The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts. Robert J.
Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude,
Esq., at Latham & Watkins LLP, represents the Official Committee
of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance
sheet showed $17,098,734,530 in total assets and $22,166,280,476
in total debts. (Delphi Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
EINSTEIN ACADEMY: Case Summary & 17 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Einstein Academy Charter School
dba T.E.A.C.H.
dba The Einstein Academy Charter School
fka The National Organization for Children, Inc.
One Trenton Road, Suite 16
Morrisville, Pennsylvania 19067
Bankruptcy Case No.: 06-10777
Type of Business: The Debtor operates an online elementary school
for children with special learning needs.
Chapter 11 Petition Date: March 2, 2006
Court: Eastern District of Pennsylvania (Philadelphia)
Judge: Eric L. Frank
Debtor's Counsel: Albert A. Ciardi, III, Esq.
Ciardi & Ciardi, P.C.
One Commerce Square
2005 Market Street, Suite 2020
Philadelphia, Pennsylvania 19103
Tel: (215) 557-3550
Fax: (215) 557-3551
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 17 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Tutor Bots, Inc. $3,000,000
c/o David Dessen
600 Easton Road
Willow Grove, PA 19190
Hewlett-Packard Financial Services Co. $1,426,329
420 Mountain Avenue
P.O. Box 6
New Providence, NJ 07974
Buchanan Ingersoll $560,263
11 Penn Center, 14th Floor
1835 Market Street
Philadelphia, PA 19103
Hoyle Morris & Kerr $498,762
One Liberty Place, Suite 4900
1650 Market Street
Philadelphia, PA 19103
Digital Content Solutions $281,443
3059 Hollow Road
Malvern, PA 19355
Morrisville School District $197,236
William Huganir $191,089
McGraw-Hill Company $88,967
Digital Freedom $58,549
DHL Express $32,438
G.E. Capital $24,011
Mellenicom $19,345
ESPI Northeast $13,763
Compass Learning $8,842
Richard Brickley $8,496
Dr. Alexander Grande $8,415
Millbrook Press Inc. $4,779
ELEC COMMS: Nussbaum Yates Raises Going Concern Doubt
-----------------------------------------------------
Nussbaum Yates & Wolpow, PC, expressed substantial doubt about
eLEC Communications Corp.'s ability to continue as a going concern
after it audited the Company's financial statements for the fiscal
years ended Nov. 30, 2005 and 2004. The auditing firm pointed to
the Company's recurring losses from operations.
Fiscal Year 2005 Results
For the fiscal year ended Nov. 30, 2005, eLEC reported a
$2,265,795 net loss, in contrast to $170,253 of net income earned
in fiscal year 2004.
Revenues for fiscal 2005 increased by approximately 66%, to
approximately $15,881,000 as compared to approximately $9,558,000
of revenues reported for fiscal 2004. Management says that
revenue growth was directly related to the increased number of
leased local access lines served in fiscal 2005.
eLEC plans to generate a large bulk of its revenue in fiscal 2006
from VoIP services rather than from wireline services.
Consequently, almost all of the Company's marketing efforts are
focused on obtaining additional VoIP lines.
At Nov. 30, 2005, the Company's balance sheet showed $4,385,091 in
total assets and $6,748,818 in liabilities, resulting in a
stockholders' deficit of $2,363,727. The Company had cash and
cash equivalents of approximately $206,000 and negative working
capital of approximately $974,000 at Nov. 30, 2005, as compared to
cash and cash equivalents of approximately $372,000 and negative
working capital of approximately $1,939,000 a year earlier.
A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?618
eLEC Communications Corp. -- http://www.elec.net/-- is a
Competitive Local Exchange Carrier that offers local and long
distance calling plans to small business and residential
customers. The Company sells under the names of New Rochelle
Telephone and eLEC Communications, and the Company delivers
telephone services.
ENTERPRISE PRODUCTS: Looks to Raise $375 Mil. in Equity Offering
----------------------------------------------------------------
Enterprise Products Partners L.P. (NYSE:EPD) priced a public
offering of 16,000,000 common units representing limited partner
interests at a price of $23.90 per unit. The net proceeds of
approximately $374.2 million include the general partner's
proportionate capital contribution. Enterprise has granted the
underwriters an option to purchase an additional 2,400,000
additional common units.
Enterprise plans to use the net proceeds from this offering to
temporarily reduce borrowings currently outstanding under its
multi-year revolving credit facility and for general partnership
purposes.
Lehman Brothers Inc. and Morgan Stanley & Co. Incorporated are
acting as joint book-running managers for the offering.
The co-managers for the offering are:
-- Citigroup Global Markets Inc.,
-- UBS Securities LLC,
-- Merrill Lynch,
-- Pierce, Fenner & Smith Incorporated,
-- Wachovia Capital Markets, LLC,
-- A.G. Edwards & Sons, Inc.,
-- Raymond James & Associates, Inc.,
-- RBC Capital Markets Corporation,
-- Sanders Morris Harris Inc.,
-- Banc of America Securities LLC,
-- Credit Suisse Securities (USA) LLC,
-- Deutsche Bank Securities Inc.,
-- Natexis Bleichroeder Inc., and
-- Oppenheimer & Co. Inc.
A copy of the final prospectus supplement can be obtained from
Lehman Brothers Inc. or Morgan Stanley & Co. Incorporated. Direct
any requests to:
Lehman Brothers
c/o ADP Financial Services
Prospectus Fulfillment
1155 Long Island Avenue
Edgewood, New York 11717
Fax: (631) 254-7268
- and -
Morgan Stanley
Prospectus Department
180 Varick Street, 2nd Floor
New York, New York 10014
Tel: (917) 606-8474.
Enterprise Products Partners L.P. -- http://www.epplp.com/-- is
one of the largest publicly traded energy partnerships with an
enterprise value of approximately $15 billion, and is a leading
North American provider of midstream energy services to producers
and consumers of natural gas, NGLs and crude oil. Enterprise
transports natural gas, NGLs and crude oil through 32,776 miles of
onshore and offshore pipelines and is an industry leader in the
development of midstream infrastructure in the Deepwater Trend of
the Gulf of Mexico. Services include natural gas transportation,
gathering, processing and storage; NGL fractionation (or
separation), transportation, storage, and import and export
terminaling; crude oil transportation and offshore production
platform services. Enterprise Products Partners L.P. is managed
by its general partner, Enterprise Products GP LLC, which is
wholly owned by Enterprise GP Holdings L.P. (NYSE:EPE).
* * *
The company's $250 million 5% senior unsecured notes due 2015
carry Standard & Poor's BB+ rating. That rating was assigned on
Feb. 15, 2005.
ESCHELON TELECOM: S&P Raises Corp. Credit Rating to B- from CCC+
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on Minneapolis, Minnesota-based competitive local
exchange carrier Eschelon Telecom Inc. to 'B-' from 'CCC+'. The
outlook is stable.
In addition, ratings are raised on the company's outstanding
senior second secured notes and its $150 million universal shelf
registration.
"The upgrade reflects the company's improved financial profile,
including lower levels of debt and the generation of positive net
free cash flow; the successful integration of ATI, which was
acquired on December 31, 2004; and a demonstrated ability to
capture market share from Qwest Communications International, its
primary incumbent local exchange carrier competition, as
demonstrated by its above average market penetration of over
10%," Standard & Poor's credit analyst Allyn Arden said.
Ratings incorporate the potential for additional debt issuance
including proceeds of roughly $35 million, which will be partially
used to fund the acquisition of Oregon Telecom, Inc.
Following the company's initial public offering in August 2005,
resulting in net proceeds of $69.8 million, Eschelon paid down
approximately $51 million of the senior second secured notes due
2010 and converted $63 million of preferred stock into common
shares.
Total debt to EBITDA as of Dec. 31, 2005, was 2.2x (or 2.7x on an
operating lease adjusted basis), compared with around 6.0x prior
to the IPO. Eschelon generated positive net free cash flow in the
second half of 2005, which should be sustainable in 2006.
The company's flexibility with respect to capital spending gives
it some cushion in the event of an economic downturn. Total debt
outstanding as of Dec. 31, 2005, was approximately $107 million at
full face amount ($92 million accreted value).
The ratings continue to reflect a high degree of credit risk
stemming from the company's vulnerable business position resulting
from, among other factors, the highly competitive nature of the
CLEC business. Additionally, the ratings incorporate:
* integration risk associated with the recent acquisition of
OTI, a CLEC serving the Oregon and Washington markets;
* Eschelon's limited liquidity; and
* the potential for future moderate debt financed acquisitions.
Tempering factors include:
* the company's modest leverage,
* low churn, and
* flexibility with respect to capital spending.
ESTATE PROPERTIES: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Lead Debtor: Estate Properties I, Inc.
1994 Scott Lake Road
Waterford, Michigan 48328
Bankruptcy Case No.: 06-42417
Debtor affiliate filing a separate chapter 11 petition:
Entity Case No.
------ --------
Estate Properties II, Inc. 06-42420
Type of Business: Ronald K. Olzmann, the Debtors' president,
filed for chapter 11 bankruptcy protection
on Feb. 21, 2006 (Bankr. E.D. Mich.
Case No. 06-41988).
Chapter 11 Petition Date: March 2, 2006
Court: Eastern District of Michigan (Detroit)
Judge: Judge Thomas J. Tucker
Debtors' Counsel: Michael I. Zousmer, Esq.
Nathan, Neuman, Nathan & Zousmer, P.C.
29100 Northwestern Highway, Suite 260
Southfield, Michigan 48034
Tel: (248) 351-0099
Fax: (248) 351-0487
Estimated Assets Estimated Debts
---------------- ---------------
Estate Properties I, Inc. $1 Million to $500,000 to
$10 Million $1 Million
Estate Properties II, Inc. $1 Million to $1 Million to
$10 Million $10 Million
The Debtors did not file a list of their 20 largest unsecured
creditors.
FEDERAL-MOGUL: Wants to Transfer Equity Interests in Chinese Units
------------------------------------------------------------------
Federal-Mogul Corp., with its growing business operations in
China, wants to establish a cost-effective and tax-sensitive
method to:
(i) move funds among the F-M Chinese Subsidiaries;
(ii) take advantage of available tax rebates that relieve the
Debtors' tax burden when dividends and other distributions
are made from the F-M Chinese subsidiaries to their parent
companies; and
(iii) protect itself from potential changes in Chinese tax laws.
The Debtors ask the Court to approve transfers of equity interests
in certain Chinese subsidiaries that are currently held either
directly by Federal-Mogul or indirectly through its affiliates, to
Federal-Mogul Holdings, Ltd., a wholly owned non-debtor subsidiary
of FMC that is a holding company organized under the laws of
Mauritius.
James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., in Wilmington, Delaware, relates that current
Chinese law hinders the ability of the F-M Chinese Subsidiaries to
loan money to each other. The proposed Transfers will enable F-M
Mauritius to serve as a conduit to move funds among these F-M
Chinese Subsidiaries:
* Federal-Mogul Qingdao Automotive Company Limited,
* Federal-Mogul (Shanghai) Automotive Co. Ltd.,
* Guangzhou Champion Spark Plug Co., Ltd., and
* Federal-Mogul Shanghai Bearings Co., Ltd.
FMC directly owns 100% of F-M Qingdao and F-M Shanghai. Federal-
Mogul Global, Inc., and Federal-Mogul Pty Australia, both wholly
owned FMC subsidiaries, own equal portions of F-M Guangzhou. F-M
Global also holds a 60% interest in F-M Bearings.
A distribution, whether as a dividend or a loan, maybe made from
a Chinese Subsidiary to F-M Mauritius. If the distribution to
F-M Mauritius is made as a loan, F-M Mauritius may pay back the
interest without any withholding tax. If the loan were made to
parent entities in the United States instead, the U.S. Government
would impose a withholding tax on interest paid back to the
F-M Chinese Subsidiaries. F-M Mauritius may take the loan
distribution and invest it back into a different Chinese
Subsidiary, thereby enabling the funds to move among F-M Chinese
Subsidiaries without incurring the withholding tax that U.S.
ownership requires.
The Transfers also benefit the Debtors through a tax rebate.
Current Chinese law provides a 40% rebate of taxes paid to the
Chinese government by any F-M Chinese Subsidiary if the funds on
which the taxes were paid are distributed to a Mauritius entity
and then reinvested back into China.
In addition, while current Chinese law exempts dividends from
withholding tax, if that law changes, then the tax treaty between
China and Mauritius limits the Chinese withholding tax to 5%,
compared to 10% withholding on dividends if to a U.S.
shareholder.
Ownership Transferred
The proposed Transfers will move ownership of the Chinese
Subsidiaries from FMC and F-M Australia and F-M Global, into F-M
Mauritius. As a result of the Transfers, FMC and F-M Global will
be the shareholders of F-M Mauritius and will hold interests in
F-M Mauritius proportionate to their current interests in the
Chinese Subsidiaries.
Subject to changes in the fair market values of the investments
at the time they are transferred to F-M Mauritius and any
investments other Federal-Mogul affiliates may make in F-M
Mauritius, FMC will own about 33% of F-M Mauritius, and F-M
Global, 67% of F-M Mauritius.
Thus, Mr. O-Neill says, the Transfers will have an economically
neutral impact on the Debtors' ownership of the Chinese
Subsidiaries, and will not affect the Debtors' control of these
entities.
The equity interests of the various Debtors in the Chinese
Subsidiaries are subject to first priority liens held by the
Debtors' lenders. As part of the Revolving Credit and Guaranty
Agreement dated November 23, 2005, the postpetition lenders have
consented to the Transfers. Mr. O'Neill informs the Court that
the Debtors have advised the prepetition lenders about the
Transfers and expect to obtain their consent.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some US$6
billion. The Company filed for chapter 11 protection on Oct. 1,
2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq.,
James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin
Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed US$10.15 billion in
assets and US$8.86 billion in liabilities. At Dec. 31, 2004,
Federal-Mogul's balance sheet showed a US$1.925 billion
stockholders' deficit. At Nov. 30, 2005, Federal-Mogul's balance
sheet showed a US$1,450.4 billion stockholders' deficit, compared
to a US$1.926 billion deficit at Dec. 31, 2004. Federal-Mogul
Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford. (Federal-Mogul Bankruptcy News, Issue No. 104;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
FLINTKOTE COMPANY: Wants Removal Period Extended Until August 28
----------------------------------------------------------------
Flintkote Company and Flintkote Mines Limited ask the U.S.
Bankruptcy Court for the District of Delaware to extend until
Aug. 28, 2006, the time within which they can remove prepetition
actions.
Most of the Debtors' asbestos-related personal injury actions, as
well as other actions unrelated to asbestos, are pending in state
courts across the country and are in various stages in the
litigation process.
The Debtors, in consultation with the Official Committee of
Asbestos Personal Injury Claimants and the Future Claimants
Representative, find it appropriate and beneficial to their
estates to remove certain of the prepetition actions to Federal
Court.
The extension, the Debtors say, will allow them and their creditor
constituencies more time to complete their analysis to remove each
actions.
Headquartered in San Francisco, California, The Flintkote Company
is engaged in the business of manufacturing, processing and
distributing building materials. The Company and its affiliate
filed for chapter 11 protection on April 30, 2004 (Bankr. Del.
Case No. 04-11300). James E. O'Neill, Esq., Laura Davis Jones,
Esq., and Sandra G. McLamb, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub P.C., represent the Debtors in their
restructuring efforts. When the Debtor filed for protection
from its creditors, it estimated assets and debts of more than
$100 million.
GENCORP INC: Fitch Affirms Subordinated Notes' Ratings at B-
------------------------------------------------------------
Fitch Ratings affirmed GenCorp Inc.'s (GY) credit ratings as:
-- Issuer Default Rating 'B-'
-- Senior secured bank credit facility 'BB-', Recovery Rating
'RR1'
-- Senior subordinated notes 'BB-', 'RR1'
-- Convertible subordinated notes 'B-', 'RR4'
-- Contingent convertible subordinated notes 'B-', 'RR4'
The Rating Outlook is Stable. The ratings cover $444 million of
outstanding debt.
GY's ratings benefit from:
* the company's sizable landholdings in the
Sacramento, California area;
* tax loss carry forwards that may allow the company to offset
pretax profits in excess of $350 million at the federal level
and $275 million at the state level;
* the global settlement with the government that provides for
up to 88% reimbursement for most of GY's environmental
remediation costs;
* the renegotiating of the Atlas contract, which will allow GY
to cease production by the end of fiscal 2007 if it does not
receive better terms;
* the completion of its transformation into a company focused
on real estate and aerospace and defense (Aerojet);
* fully funded pension plans;
* a positive defense spending environment; and
* the resolution of a number of outstanding lawsuits.
Partially offsetting the preceding was the U.S. Government's
decision not to make Atlas contractors whole for past losses
incurred due to:
* the significant decline of commercial launches, resulting in
a $169 million write-off;
* unsecured and subordinated seller financing of $26 million
required for the Aerojet Fine Chemicals sale, which reduces
liquidity;
* the loss and payment on a $30 million lawsuit (which may
still end in GY's favor);
* inadequate controls resulting in small restatements in the
first and second quarters of fiscal 2005; and
* the inability to generate positive free cash flow since
before 2000.
In addition, Fitch has concerns regarding activist hedge fund
shareholders and the impact they could have on GY's cash
deployment plans.
The recovery ratings and notching of the debt tranches reflect
Fitch's recovery expectations under a scenario in which distressed
enterprise value is allocated to the various debt classes. The
analysis was based on a liquidation analysis due to the
significant real estate holdings and utilized conservative real
estate values based on unentitled land values.
All the recovery ratings benefit from the value of GY's lands with
the senior secured credit facility and the senior subordinated
debt expected to see 100% recovery ('RR1'), while the convertible
subordinated notes and contingent convertible subordinated notes
are presently expected to see a recovery in the 31% to 50% range
('RR4').
In mid-January, GY announced that it was exploring entering into a
transaction with one or more residential builders for the
company's Rio del Oro property which encompasses 2,700 acres of
land. The land is expected to be entitled for residential and
commercial use by the end of 2006.
Fitch believes that a joint venture or an outright sale is being
considered. Because of the land's low book value, Fitch expects
any such transaction would utilize the loss carry forwards.
Should a transaction occur resulting in a significant cash
infusion, Fitch expects GY to use the monies to repay debt.
Significantly reducing debt could result in a change in ratings,
outlook and/or recovery ratings barring a dramatic deterioration
at Aerojet.
Some of GY's lands still have significant environmental issues,
but in 1999, the U.S. Government and GY entered into an Agreement
in Principle that allows Aerojet to recover up to 88% of
environmental remediation costs associated with Aerojet's
Sacramento site and its former Azusa site. These costs are
recovered through charges to contracts for Aerojet's products and
services sold to the U.S. Government, making Aerojet's continued
role as a supplier to the government critical to its ratings.
Despite prior statements by government officials about the Evolved
Expendable Launch Vehicle program, of which Atlas V is a part, and
ongoing discussions with prime contractor Lockheed Martin (LMT)
over a long period of time, the company recently learned that
government funding would not be available to cover past costs.
As a result, in December, GY renegotiated its contract with LMT
causing a write-off of $169 million of inventory costs for the
design and production of the motors produced under the original
contract. The revised terms include an increase in unit pricing
but are still expected to be free cash flow negative totaling
approximately $10 million over fiscal 2006 and fiscal 2007, which
was included in the write-off.
Later this year, the company expects to negotiate the sale of
additional motors, for delivery in fiscal 2008 and beyond, but
Fitch expects that GY will only do so under terms that are both
profitable and generate free cash. The revised terms are a
significant improvement as performing under the terms of the
original contract could have been a drain on cash for a number of
years.
On Nov. 30, 2005, GY completed the sale of Aerojet Fine Chemicals
for $114 million, including a $26 million seller note, completing
its transformation strategy. The company also resolved a number
of outstanding issues including the southern California and Chino
toxic tort litigations and retiree medical litigation. The Olin
litigation is not quite resolved as GY is seeking relief in other
jurisdictions, but the most negative outcome ($30 million payment)
has already occurred and continued litigation could lead to some
recoveries.
At Nov. 30, 2005, GY had a liquidity position of $171 million,
consisting of $91 million of cash and full availability under its
$80 million credit line. The company has an additional $17
million available for letters of credit. Despite improvements due
to the transformation and recapitalization, GY's credit ratios
remain very weak for the rating category, but are offset by the
company's ability to monetize some of its land holdings should the
need arise.
GY's leverage utilizing Fitch's global definition of debt to
operating EBITDA was 18.5x in fiscal 2005 - a substantial
improvement from the 64.1x in fiscal 2004. Interest coverage,
using Fitch's global definition of operating EBITDA-to-interest
was 1.0x in fiscal 2005, up from 0.3x in fiscal 2004.
With non-cash pension expense higher than EBITDA, ratios utilizing
EBITDAP were far better than those using EBITDA, but were still
weak:
* debt/EBITDAP of 5.9x in fiscal 2005 and 12.3x in fiscal 2004;
and
* EBITDAP/interest of 3.1x in 2005 and 1.3x in 2004.
GENERAL MOTORS: Denies Rumors of Suzuki Stake Sale
--------------------------------------------------
General Motors Corp. stressed that it will not fully dispose of
its 20% percent stake in Suzuki Motor Corp. to quell reports of
the supposed sale that surfaced Sunday.
In a press release, the U.S. auto giant maintained that its
strategic and business relationship with Suzuki is strong and will
continue. GM added that any reduction of its stake in Suzuki will
be done in an orderly manner through an open market transaction.
The Nihon Keizai Shimbun reported that GM may sell its entire
stake in Suzuki for $2.3 billion as part of efforts to restructure
its operations.
GM has disposed of some of its investments. As reported in the
Troubled Company Reporter on October 7, 2005, GM sold its
approximately 20% equity stake in Fuji Heavy Industries to Toyota
Motor Corporation through open market sales for cash proceeds of
approximately $770 million.
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the
world's largest automaker, has been the global industry sales
leader since 1931. Founded in 1908, GM today employs about
317,000 people around the world. It has manufacturing operations
in 32 countries and its vehicles are sold in 200 countries.
* * *
As reported in the Troubled Company Reporter on March 3, 2006,
Fitch Ratings downgraded GM's Issuer Default Rating to 'B' from
'B+'. Fitch has also assigned an 'RR4' Recovery Rating to GM's
senior unsecured debt, indicating average recovery prospects (30-
50%) for this class of creditors in the event of a bankruptcy
filing. GMAC's 'BB' rating remains on Rating Watch Evolving by
Fitch pending further developments in GM's intent to sell a
controlling interest in GMAC.
As reported in the Troubled Company Reporter on Feb. 22, 2006,
Moody's Investors Service lowered the Corporate Family Rating and
senior unsecured rating of General Motors Corporation to
B2/Negative Outlook from B1/Review for Downgrade. GM's ratings
were placed under review for possible downgrade on January 26th.
The downgrade reflects increased uncertainty that the company will
be able to achieve all of the steps necessary to establish a
competitive wage, benefit and supplier cost structure outside of
bankruptcy. These steps include a successful resolution of the
Delphi reorganization and the negotiation of a considerably more
competitive labor contract with the UAW during 2007.
GENEVA STEEL: Panel Want to Conduct Rule 2004 Examination Tomorrow
------------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Geneva
Steel LLC's chapter 11 case asks the U.S. Bankruptcy Court for the
District of Utah for permission to examine Jon Cartwright and
Cartwright Enterprises, Inc., dba Rapid Transit Motor Freight,
pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure.
The Committee reminds the Court that Rapid Transit joined the
Committee as a member in October 2004, with Mr. Cartwright as its
representative. The Committee alleges that in February 2005, Mr.
Cartwright faxed to Geneva's Paul Peterson a privileged and
confidential memorandum and agenda prepared for the Committee by
its counsel. The Committee relates that its counsel eventually
learned that the materials were leaked to the Debtor and had an
examiner appointed to investigate.
The Committee discloses that Mr. Peterson recently testified that
Jen Johnsen, the Debtor's CEO, had a private meeting with Mr.
Cartwright on Sept. 24, 2004, prior to Rapid Transit joining the
Official Committee.
The Committee contends that it needs to conduct a Rule 2004
examination in order to ascertain:
* the extent and nature of the communications between Rapid
Transit and Mr. Cartwright and the Debtor's management,
* the past acts and conduct of the Debtor,
* the effect of the communications on the Debtor's present
liabilities and financial condition, and
* other matters relevant to the administration of the Debtor's
chapter 11 case.
The Committee wants to conduct the 2004 examination tomorrow,
Mar. 8, 2006, at the offices of Parsons Behle & Latimer in Salt
Lake City, Utah.
The Committee tells that Court that if Mr. Cartwright and Rapid
Transit are unwilling to attend or produce the documents
requested, then the Committee will serve a subpoena to compel
compliance pursuant to Bankruptcy Rules 2004 and 9016.
Headquartered in Provo, Utah, Geneva Steel LLC owns and operates
an integrated steel mill. The Company filed for chapter 11
protection on January 25, 2002 (Bankr. Utah Case No. 02-21455).
Andrew A. Kress, Esq., Keith R. Murphy, Esq., and Stephen E.
Garcia, Esq., at Kaye Scholer LLP, represent the Debtor in its
chapter 11 proceeding. James T. Markus was appointed as the
chapter 11 Trustee for the Debtor's estate on June 22, 2005.
John F. Young, Esq., at Block Markus & Williams, LLC represents
the chapter 11 Trustee. Dianna M. Gibson, Esq., and J. Thomas
Beckett, Esq., at Parsons Behle & Latimer, represent the Official
Committee of Unsecured Creditors.When the Company filed for
protection from its creditors, it listed $262 million in total
assets and $192 million in total debts.
GOODYEAR TIRE: Conv. Sr. Notes of 82 Holders Registered for Resale
------------------------------------------------------------------
The Goodyear Tire & Rubber Company reported that 63 more holders
of its $350 million of 4.00% convertible senior notes due June 15,
2034, and shares of its common stock into which the notes are
Convertible, may resell the Convertible Senior Notes.
As reported in the Troubled Company Reporter on Sept. 5, 2005, the
Company filed a Registration Statement to the Securities and
Exchange Commission for the resale of its Convertible Senior
Notes.
Richard J. Kramer, the Company's Executive Vice President and
Chief Financial Officer, informed the SEC in a post-effective
amendment to its Registration Statement that a total of 82
noteholders can now freely trade their notes.
A full list of the Selling Noteholders is available at no charge
at http://ResearchArchives.com/t/s?613
The Company will not receive any proceeds from the resale of the
notes or the shares of common stock.
The notes will mature on June 15, 2034. Noteholders may convert
the notes into shares of the Company's common stock at a
conversion rate of 83.0703 shares of common stock per $1,000
principal amount of notes, which is equivalent to a conversion
price of approximately $12.04 per share.
The Company will pay interest on the notes on June 15 and December
15 of each year. The notes will be issued only in denominations
of $1,000 and integral multiples of $1,000.
On or after June 20, 2008, the Company has the option to redeem
all or a portion of the notes that have not been previously
converted at redemption prices set forth in this prospectus.
The notes are senior, unsecured obligations that rank equally with
our existing and future unsecured and unsubordinated indebtedness.
At http://ResearchArchives.com/t/s?614a full-text copy of the
Post-Effective Amended Registration Statement is available for
free.
Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company
(NYSE: GT) -- http://www.goodyear.com/-- is the world's
largest tire company. The company manufactures tires, engineered
rubber products and chemicals in more than 90 facilities in 28
countries. It has marketing operations in almost every country
around the world. Goodyear employs more than 80,000 people
worldwide.
* * *
Goodyear's 9% Senior Notes due 2015 carry Moody's Investor
Service's B3 rating, Standard & Poor's B- rating, and Fitch
Ratings' CCC+ rating.
GRUPO TMM: Earns $23.6 Million in Fourth Quarter 2005
-----------------------------------------------------
Grupo TMM, S.A. (NYSE: TMM)(BMV: TMM A) a Mexican multi-modal
transportation and logistics company, reported its financial
results for the fourth quarter and full year ended Dec. 31, 2005.
TMM reported these results for the fourth quarter:
-- Revenue of $88.3 million, up 30.2% from $67.8 million the
previous year;
-- Operating income of $2.8 million, up from an operating loss
of $100,000 a year ago;
-- Operating margin of 3.2%, up 3.3 percentage points from the
previous year; and
-- Net income of $23.6 million compared to a net loss after
discontinuing operations of $92.3 million the previous year.
Net income in the fourth quarter of 2005 included a loss
resulting from post-sale adjustments on the sale of the
Company's interest in Grupo TFM to Kansas City Southern of
$5.6 million, net of income taxes.
TMM reported these results for the full year:
-- Revenue of $306.6 million, up 22.2% from $251.0 million the
previous year;
-- Operating income of $5.1 million, up from $3.4 million a
year ago;
-- Operating margin of 1.7%, down 0.3 percentage points from
the previous year; and
-- Net income after discontinuing operations of $171.8 million,
up from a net loss after discontinuing operations of
$102.5 million the previous year. Net income after
discontinuing operations for the full year of 2005 included
a gain on the sale of the Company's interest in Grupo TFM to
Kansas City Southern of $198.0 million, net of income taxes.
Net financial expenses of $19.2 million were recorded in the
fourth quarter of 2005 compared to net financial expenses of
$39.1 million incurred in the fourth quarter of 2004.
For the 2005 full year, net financial expenses were $90.9 million,
which were impacted by the accelerated amortization of certain
expenses related to the issuance of the Company's 2007 Notes and
other related expenses. Without these expenses, net financial
expenses would have been approximately $75.6 million. For the
full year 2004, net financial expenses were $87.8 million, which
were impacted by $20.3 million from the General Motors Put Option.
SG&A increased $0.9 million in the fourth quarter of 2005 to
$8.5 million compared to the 2004 period. This increase was
impacted by a $1.4 million charge, which resulted from severance
payments, from peso appreciation versus the dollar, and from
Sarbanes Oxley Act -related expenses. In the 12-month period,
SG&A increased $2.4 million to $31.7 million compared to the same
period last year and was impacted by $700,000 of peso appreciation
versus the dollar.
Additionally, shareholder equity improved $167.1 million in 2005.
"The year 2005 was a period of transition for Grupo TMM, Javier
Segovia, president of Grupo TMM, said. "The sale of our
controlling interest in Mexico's busiest railway, TFM, set the
stage for a new era for the employees, customers and shareholders
of TMM. By significantly reducing our debt last year, we now have
access to the working and growth capital the Company has been
lacking for several years. Grupo TMM is now in a position to
develop its assets, to improve its operating performance and to
increase cash flow, all of which will ensure long-term growth for
a stronger TMM.
"As the owner and operator of key transportation infrastructure in
Mexico, TMM is the dominant provider of logistics outsourcing
services focused on servicing the NAFTA and intra-Mexico
corridors. Through an excellent brand name and reputation, we are
now concentrating on being the leading provider of services in
supply chain management, IT solutions and consulting, dedicated
trucking, intermodal yard and rail management, specialized
maritime transportation, and port and terminal management."
"During 2005, we acquired two double hull tankers with underlying
five-year contracted revenue of $98.0 million. Each tanker is
projected to produce an average $8.0 million in EBITDA per year
and free cash flow of $2.9 million per year from both vessels. In
these assets we are building equity over the next five years,
resulting in competitively priced vessels at the end of that term.
We are considering the acquisition of additional maritime assets
using the same approach, Segovia continued.
"Our five-year growth strategy centers on the increased demand for
oil exploration and distribution services within Mexico, which
requires a new generation of higher-rated and deeper-water
capabilities. Additionally, by leveraging the Mexican Navigation
Law, which provides seniority for Mexican vessels, we will
increase cabotage services with medium- and long-term contracts
and expand other contracts for logistics and transportation.
"In the specialized maritime division, we are considering the
purchase of additional vessels to take over operations currently
being outsourced by other operators in Mexico. We also plan to
expand dedicated services at Logistics and add three new vessels
in our tugboat division. Each of these projects will provide real
growth opportunities for TMM and will make our previously
announced EBITDA goals for each business unit and for Grupo TMM
attainable."
"In 2006 we estimate $40 million of interest expenses including
debt related to the acquisition of vessels, achieving a reduction
of $27 million of interest expense compared to 2005. With the
proceeds from the sale of our interest in TFM, we reduced our
outstanding debt held in January 2005 from $587.7 million to the
current amount of $229.7 million, which includes $66 million of
project debt. This dramatic change in TMM's interest expense will
provide the Company with the financial ability to focus on
building its assets and developing its future," Segovia concluded.
Segment Results
A. Specialized Maritime
In the fourth quarter, Specialized Maritime reported:
-- Revenue of $43.5 million, up 36.8% from last year's
$31.8 million;
-- Operating income of $7.8 million, up from $3.8 million a
year ago; and
-- Operating margin of 17.8%, up 5.8 percentage points from the
previous year.
In the 12 months, Specialized Maritime reported:
-- Revenue of $159.6 million, up 24.9% from last year's
$127.8 million;
-- Operating income of $22.2 million, up from $14.7 million a
year ago; and
-- Operating margin of 13.9%, up 2.4 percentage points from the
previous year.
Product tanker revenues in the fourth quarter increased by
$12.5 million to $17.6 million compared to $5.1 million in the
same period last year. Gross profit and gross margin increased
$3.8 million and 20.2 percentage points, respectively, compared to
the same quarter last year.
For the full year of 2005, product tanker revenues increased
$33.7 million to $55.1 million compared to $21.4 million last
year. These revenue increases were mainly attributable to
contracted revenue from two new cabotage contracts, which
generated EBITDA of $7.3 million from July, when they began
operations, through December. Revenue increases in the fourth-
quarter and twelve-month periods of 2005 were also positively
impacted by increased short-term contracts compared to the same
periods last year.
The offshore business segment remained stable during the fourth
quarter, with revenues decreasing $600,000 compared to the same
period last year, and decreasing $2.4 million, or 3.6%, in the
twelve months of 2005 compared to 2004.
These revenue decreases were mainly due to a reduction of spot
contracts compared to the same periods last year, and to
maintenance costs of several vessels, which were in dry dock
between contracts. In 2006 the division plans to substitute its
offshore fleet and short-term contracts for longer-term contracts.
Tugboat revenues increased 40.6% and 21.4% in the fourth-quarter
and 12-month periods of 2005, respectively, compared to the same
periods last year.
Gross profit increased 16.0% and 17.8% in the fourth-quarter and
twelve-month periods of 2005, respectively, compared to the same
periods last year. These increases were mainly due to increased
vessel calls at the Port of Manzanillo and by the appreciation of
the peso versus the dollar, which positively impacted revenues by
5.0% in the fourth quarter and by 3.5% in the full year of 2005.
This division operates four tugboats, three of which are owned by
the Company and the fourth under a two-year bareboat contract
since October.
The division currently has a concession to operate tugboats at
Manzanillo, which expires in January 2007. The Company intends to
renew this concession for an additional eight years.
Parcel tanker revenues decreased in the fourth quarter of 2005 by
$600,000, due mainly to decreased demand for these services as a
result of hurricane activity (Katrina and Wilma) in the Gulf of
Mexico during the period.
Parcel tanker revenues remained stable in the twelve months of
2005 compared to the same period last year. Fuel costs in this
business segment were impacted by approximately $1.8 million in
the full year of 2005. However, the Company has successfully
negotiated with several clients a fuel surcharge clause, which
will offset increases in fuel costs and should improve results
going forward.
B. Ports and Terminals
For the fourth quarter, Ports and Terminals reported:
-- Revenue of $13.5 million, up 77.6% from last year's
$7.6 million;
-- Operating income of $400,000, down from $900,000 a year ago;
and
-- Operating margin of 3.2%, down 8.0 percentage points from
the previous year.
In the twelve months, Ports and Terminals reported:
-- Revenue of $38.9 million, up 46.2% from last year's
$26.6 million;
-- Operating income of $1.3 million, up from $400,000 a year
ago; and
-- Operating margin of 3.2%, up 1.7 percentage points from the
previous year.
In the fourth quarter, revenues at Acapulco increased 15.1%
compared to the same period last year. Cruise ship revenues
remained stable in the fourth quarter compared to the same quarter
last year, and auto-handling revenues increased 87.9% compared to
the same period last year due to increased automobile movements.
In the 12 months, revenues at Acapulco increased 37.2% to
$5.9 million from $4.3 million in 2004, and gross profit and gross
margin increased 64% and 8.4 percentage points respectively,
compared to the same period last year.
Cruise ship revenues increased 33.6% in the twelve months of 2005
compared to the 2004 period, mainly due to an increase in cruise
ship calls at this port, as well as a 42.1% increase in passenger
activity over last year.
Port calls at Acapulco totaled 146 in 2005 compared to 109 in
2004. In the 2005 full year, auto-handling revenues increased
49.8 percent compared to last year due to increased automobile
shipments to Asia, Central and South America.
In the fourth quarter, shipping agencies revenues increased to
$8.5 million compared to $300,00 in the same quarter last year,
and gross profit increased 182.6% over the 2005 fourth quarter.
For the full year of 2005, revenues at this division increased to
$14.2 million compared to $1.4 million in 2004. These increases
were mainly due to new contracts at this business segment, which
provide services at all Mexican ports. These new contracts were
the largest contributor to the increases in revenue and gross
profit in this business segment in the fourth quarter and twelve
months of 2005.
Additionally, in the fourth quarter the Company sold its ports
assets in Colombia and incurred a loss of $5.2 million. This loss
is reflected in the Company's consolidated results under other
(expenses) income, net.
C. Logistics
In the fourth quarter, Logistics reported:
-- Revenue of $31.3 million, up 9.8% from last year's
$28.5 million;
-- Operating loss of $900,000 compared to a loss of $700,00 a
year ago; and
-- Operating margin of (3.0%), up (0.7) percentage points from
the previous year.
In the 12 months, Logistics reported:
-- Revenue of $108.4 million, up 11.1% from last year's
$97.6 million;
-- Operating loss of $900,000 down from operating income of
$4.3 million a year ago;
-- Operating margin of (0.9%), down 5.3 percentage points from
the previous year.
The division began implementation of a restructuring plan during
the fourth quarter of 2005, which will be completed in first
quarter of 2006. This plan calls for the tightening of all
processes and procedures, the alignment of operating and financial
systems, the introduction of metrics aimed to improve group and
individual employee performance, and the rationalization of
resources to reflect a more efficient operation.
Comparing the fourth quarter of 2005 to the same period last year,
revenues increased at these segments:
-- trucking by 14.0%;
-- automotive by 20.5%;
-- dedicated logistics services for Volkswagen by 35.6%; and
-- maintenance and repair by 11.2%.
Increased costs at maintenance and repair division impacted
margins.
Comparing the twelve months of 2005 with 2004, revenues increased
at the automotive segment by 85.1% mainly due to increased
activity at the Vehicle Distribution Center for Ford, in Cuatitlan
and for outbound logistics with GM, Chrysler and spare parts
distribution for Nissan, as well as the distribution of increased
output at Ford's Hermosillo Plant.
Also comparing the 12 months of 2005 with 2004, revenues increased
at dedicated logistics services for Volkswagen by 14.8%, and gross
profit and gross margin increased by $900,000 and 5.5 percentage
points, respectively. These increases were mainly due to the
introduction of the new Bora model, mainly for export, and to an
increase in domestic sales.
Overall costs and expenses increased at the Logistics division
mainly due to the acquisition of additional trucks, to additional
resources oriented to the maintenance and upgrading of equipment
that was either idle or malfunctioning, to severance payments of
$700,000 due to personnel reductions, and to a $600,000 reserve
for severance payments in compliance with new accounting
regulations.
This division expects to generate incremental operating profit of
$7 to $10 million and have an incremental running rate of $13
million in EBITDA as new programs and processes take hold.
Other Information
On Jan. 17, 2006, the Company announced that the cash tender
offer to purchase up to $331,018,794 aggregate principal amount
of its outstanding Senior Secured Notes due 2007 expired at
12:00 midnight, New York City time, on Friday, Jan. 13, 2006.
An aggregate of $428,194,642 principal amount of outstanding 2007
notes were tendered in the Offer.
The Company accepted all properly tendered notes on a pro rata
basis, which reduced the outstanding principal amount of 2007
notes to $156,958,040.
As a result of the tender offer and pursuant to the terms of the
2007 Notes Indenture, the interest rate of the 2007 Notes
outstanding after the offer will be reduced by 1% commencing
Feb. 1, 2006, such that if the Company elects to pay interest in
cash the Notes will bear interest at 9-1/2% per annum.
On Feb. 1, 2006, the Company paid the 2007 Notes coupon in cash.
Headquartered in Mexico City, Grupo TMM S.A. --
http://www.grupotmm.com/-- is a Latin American multimodal
transportation and logistics company. Through its branch
offices and network of subsidiary companies, TMM provides a
dynamic combination of ocean and land transportation services.
* * *
As reported in the Troubled Company Reporter on Dec. 20, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on Grupo TMM S.A. to 'B-' from 'CCC.' The rating was
removed from Creditwatch, where it was placed on Dec. 15, 2004.
The outlook is positive.
HAPS USA: Posts $2.7 Million Net Loss in Quarter Ended December 31
------------------------------------------------------------------
Haps USA Inc. reported its financial results for the fourth
quarter ended Dec. 31, 2005.
Haps USA incurred a net loss of $2,711,830 for the three months
ended Dec. 31, 2005, compared to a net loss of $106,635 for the
three months ended Dec. 31, 2004.
For the three months ended Dec. 31, 2005, Haps USA's total
revenues increased to $5,317,736 from total revenues of $4,926,673
for the same period in 2004.
Haps USA's balance sheet at Dec. 31, 2005, showed total assets of
$57,514,670 and total liabilities of $50,189,604. Additionally,
the Company has a working capital deficit of $733,857, as of
Dec. 31, 2005.
Going Concern Doubt
Pritchett, Siler & Hardy, P.C., Haps USA's previous auditors,
expressed substantial doubt about Haps USA's ability to continue
as a going concern after reviewing the Company's financial
statement for the year ended June 30, 2005. "Haps' increasing
working capital raises substantial doubt about the Company's
ability to continue as a going concern in the event it cannot meet
its obligations as they become due," the auditing firm said.
Haps may continue to incur losses during fiscal year 2006 due to
increased costs to provide infrastructure necessary to operate as
a public company and start-up costs incurred with its new store
expansion. "Management is seeking equity or debt financing in the
range of $1 million to $3 million, but there are no absolute
assurances that management will be successful in refinancing the
notes or raising additional capital." management said.
On Feb. 14, 2006, the Board of Directors of HAPS USA, Inc.
approved a change in its independent registered public accounting
firm. The Board of Directors approved the dismissal of Pritchett,
Siler & Hardy, P.C., as HAPS's independent registered public
accounting firm and the selection of McKennon, Wilson & Morgan,
LLP as their replacement.
Haps USA Inc.'s principal activity is to provide entertainment
through pachinko and pachislo games. Pachinko and Pachislo are
games in which players shoot steel metal balls into a vertical
machine that resembles a Western slot machine. Upon completion of
play, patrons can exchange balls for prizes, such as cigarettes,
candy, and other merchandise, or a special prize that can be
exchanged for money. The Group also receives income from
cigarettes, non-alcoholic beverages and sundry items, as well as
one small batting cage and a bowling alley. It owns and operates
thirteen pachinko stores, with a total of 4,492 Pachinko and
Pachislo machines as of June 30, 2005. In July 2005, it closed
the smallest store with 138 machines. The Group operates these
stores in Japan. The Group acquired PGMI Inc on Dec 9, 2005,
accounted for as a reverse acquisition.
HEALTHSOUTH CORP: Prices $400M Pref. Stock in Private Placement
---------------------------------------------------------------
HealthSouth Corporation (OTC Pink Sheets: HLSH) priced
$400 million of convertible perpetual preferred stock through a
private placement to qualified institutional buyers.
Shares of the preferred stock will be convertible into the
Company's common stock at an initial conversion price of $6.10 per
share. Holders of preferred stock will generally be entitled to
receive dividends at the rate of 6.5% per year, payable quarterly.
The Company expects this transaction to close today, March 7,
2006.
The purpose of the preferred stock issuance is to reduce
HealthSouth's outstanding indebtedness.
If HealthSouth successfully completes its previously announced
recapitalization transactions, the amount of senior unsecured
interim term loans HealthSouth will be permitted to borrow in
connection with the recapitalization transactions will be reduced
by the amount of gross proceeds that HealthSouth receives from the
preferred stock issuance.
If the recapitalization transactions are not completed,
HealthSouth will use the net proceeds that it receives from the
preferred stock issuance to repay a portion of its outstanding
senior unsecured indebtedness.
The convertible perpetual preferred stock and the underlying
common stock issuable upon conversion have not been registered
under the Securities Act of 1933 and may not be offered or sold in
the United States absent registration or an applicable exemption
from registration requirements.
HealthSouth Corporation -- http://www.healthsouth.com/-- is one
of the nation's largest providers of outpatient surgery,
diagnostic imaging and rehabilitative healthcare services,
operating facilities nationwide.
At Dec. 31, 2004, HealthSouth Corporation's balance sheet showed a
$1,109,420,000 stockholders' deficit, compared to a $963,837,000
deficit at Dec. 31, 2003.
HUNTSMAN CORP: Planned Spin-Off Cues Moody's to Affirm B1 Rating
----------------------------------------------------------------
Moody's Investors Service affirmed the B1 corporate family rating
of Huntsman Corporation and of Huntsman International LLC, and
changed the outlook on the ratings to developing.
The change in outlook to developing is the result of HC's
announcement that management has decided to pursue the legal
separation of HC's Base Chemicals and Polymer segments from HC's
differentiated segments. Moody's assumes this would ultimately
result in the formation of two separate publicly tradable
companies.
Moody's believes that additional details of the separation will be
announced in the coming six to nine months. Moody's believes that
objectives for incremental debt reduction approaching
$1.45 billion by the end of 2007 are still possible. This
incremental debt pay down is over and above the significant debt
reduction that occurred as part of the initial public offering in
2005.
As of the end of Dec. 31, 2005, total balance sheet net debt was
approaching $4.3 billion down from $6.0 billion a year earlier.
This move to a developing outlook also suggests that over the
medium term that the ratings may change subject to the development
of a debt structure for both companies.
Moody's notes that HC's differentiated business produced revenue
of approximately $7.6 billion or 60% of total revenues and
approximately of 75% of adjusted EBITDA for the full year 2005.
Moreover this announcement would not necessarily preclude a
specific sale of assets or other alternatives whose financial
impact is as yet unknown. Moody's believes the decision to pursue
a split by HC's management was prompted by ongoing concern over a
"low" stock price valuation along with the receipt of an
indication of interest from an outside party, occurring in late
2005, regarding an acquisition of all of the outstanding stock of
the HC.
Huntsman Corporation is a global manufacturer of differentiated
and commodity chemical products. Huntsman's products are used in
a wide range of applications, including those in the adhesives,
aerospace, automotive, construction products, durable and non-
durable consumer products, electronics, medical, packaging, paints
and coatings, power generation, refining and synthetic fiber
industries. Huntsman had $13 billion revenues for the 12 months
ended Dec. 31, 2005.
INNOVA PURE: Earns $9,600 in Second Quarter Ended December 31
-------------------------------------------------------------
Innova Pure Water, Inc., delivered its quarterly report on Form
10-QSB for the second fiscal quarter ending Dec. 31, 2005, to the
Securities and Exchange Commission on Feb. 21, 2006.
The Company reported $9,600 of net income on $148,600 of net
revenues for the quarter ending Dec. 31, 2005. At Dec. 31, 2005,
the Company's balance sheet shows $1,342,600 in total assets,
$597,000 in total liabilities, and $745,600 stockholders' equity.
Innova's Dec. 31 balance sheet shows strained liquidity with
$153,100 in total current assets available to pay $417,300 in
total current liabilities coming due within the next 12 months.
Going Concern Doubt
As reported in the Troubled Company Reporter on Oct. 24, 2005,
Turner, Stone & Company LLP, expressed substantial doubt about
Innova Pure Water, Inc.'s ability to continue as a going concern
after auditing the Company's financial statements for the fiscal
year ended June 30, 2005. The auditing firm pointed to the
Company's $251,800 negative working capital at June 30, 2005, and
$9,369,500 accumulated deficit.
A full-text copy of Innova's financial statements for the second
fiscal quarter ended Dec. 31, 2005, is available for free at
http://researcharchives.com/t/s?610
Innova Pure Water, Inc. -- http://www.innovapurewater.com/--
designs, develops, manufactures, and markets unique consumer water
filtration and treatment products. These products have been
historically of the portable nature and generally consist of a
container serving as a water reservoir incorporating highly
efficient water filtering and treatment technology.
J.L. FRENCH: Court Approves Pachulski Stang as Bankruptcy Counsel
-----------------------------------------------------------------
J.L. French Automotive Castings, Inc., and its debtor-affiliates
sought and obtained authority from the U.S. Bankruptcy Court for
the District of Delaware to employ Pachulski, Stang, Zichl, Young,
Jones & Weintraub P.C. as their bankruptcy counsel.
Pachulski Stang will:
a) provide legal advice to the Debtors' with respect to their
powers and duties as debtors-in-possession in the continued
operation of their business and management of their
properties;
b) prepare and pursue confirmation of the Debtors' plan and
approval of the Debtors' disclosure statement;
c) prepare necessary applications, motions, answers, orders,
reports and other legal papers on behalf of the Debtors;
d) appear in Court and protect the interests of the Debtors
before the Court; and
e) perform all other legal services for the Debtors which may
be necessary and proper in their chapter 11 proceedings.
Laura Davis Jones, Esq., a shareholder at Pachulski Stang, tells
the Court that she will bill $675 per hour for this engagement.
Ms. Jones discloses that the Firm's other professionals bill:
Professional Hourly Rate
------------ -----------
James E. O'Neill, Esq. $445
Scotta E. McFarland, Esq. $450
Sandra G.M. Selzer, Esq. $295
Kathe F. Finlayson $165
Ms. Jones 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 Sheboygan, Wisconsin, J.L. French Automotive
Castings, Inc. -- http://www.jlfrench.com/-- is one of the
world's leading global suppliers of die cast aluminum components
and assemblies. There are currently nine manufacturing locations
around the world including plants in the United States, United
Kingdom, Spain, and Mexico. The company has fourteen
engineering/customer service offices to globally support our
customers near their regional engineering and manufacturing
locations. The Company and its debtor-affiliates filed for
chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No.
06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis
Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang
Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland &
Ellis LLP, represent the Debtors in their restructuring efforts.
When the Debtor filed for chapter 11 protection, it estimated
assets and debts of more than $100 million.
J.L. FRENCH: Section 341(a) Meeting Scheduled for March 21
----------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of J.L.
French Automotive Castings, Inc., and its debtor affiliates'
creditors at 2:00 p.m., on Mar. 21, 2006, at Room 2112, 2nd Floor,
J. Caleb Boggs Federal Building, 844 King Street in Wilmington,
Delaware. This is the first meeting of creditors required under
Section 341(a) of the U.S. Bankruptcy Code in the Debtors'
bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Sheboygan, Wisconsin, J.L. French Automotive
Castings, Inc. -- http://www.jlfrench.com/-- is one of the
world's leading global suppliers of die cast aluminum components
and assemblies. There are currently nine manufacturing locations
around the world including plants in the United States, United
Kingdom, Spain, and Mexico. The company has fourteen
engineering/customer service offices to globally support our
customers near their regional engineering and manufacturing
locations. The Company and its debtor-affiliates filed for
chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No.
06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis
Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang
Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland &
Ellis LLP, represent the Debtors in their restructuring efforts.
When the Debtor filed for chapter 11 protection, it estimated
assets and debts of more than $100 million.
JOY GLOBAL: S&P Raises Corporate Credit Rating to BBB- from BB+
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on mining equipment manufacturer Joy Global Inc. to 'BBB-'
from 'BB+'.
"The action resulted from the continued improved operating
performance stemming from increased sales of mining equipment,"
said Standard & Poor's credit analyst John Sico, "as a result of
the strong global end markets for commodities, especially coal and
copper and from expectations that Joy will generate acceptable
earnings and cash flow measures even at the bottom of the
economic cycle."
The outlook is stable.
Milwaukee, Wisconsin-based Joy Global Inc. had sales of nearly
$2 billion in the fiscal year ended October 2005.
Through its P&H Mining Equipment and Joy Mining Machinery
divisions, Joy Global serves surface and subsurface mining
markets, selling:
* electric mining shovels,
* draglines,
* blast hole drills, and
* complete longwall and continuous mining systems.
"We expect relatively stable aftermarket demand and that end-
market fundamentals will sustain the company's strong cash flow
generation in the intermediate term, despite possible fluctuations
in demand for new equipment," Mr. Sico said. "We also expect Joy
Global to maintain financial discipline commensurate with an
investment-grade rating. Such discipline should include restraint
on such shareholder-value initiatives as large increases in
dividends or large share repurchases, because we expect Joy to
maintain a relatively low level of debt given the cyclicality of
end markets."
Demand for new equipment can vary sharply; it is tied to capital
expenditure programs for the production of coal, copper, iron ore,
and other metals and minerals, and it varies with mineral prices.
Although these prices were depressed for some time, they have
improved significantly. Cyclical downturns are a certainty in the
commodity markets, which will cause Joy's earnings and cash flow
to be volatile.
Although the company is currently debt-free, Standard & Poor's
expects Joy to maintain a modest amount of debt on the balance
sheet. Standard & Poor's expects acquisition activity to be
modest, with possible small niche product line or parts and
service purchases.
JP MORGAN: Moody's Affirms B3 Rating on $4 Mil. Class M Certs.
--------------------------------------------------------------
Moody's Investors Service upgraded the ratings of five classes and
affirmed the ratings of eleven classes of J.P. Morgan Chase
Commercial Mortgage Securities Corp., Commercial Mortgage Pass-
Through Certificates, Series 2002-C1:
* Class A-1, $12,481,033, Fixed, affirmed at Aaa
* Class A-2, $174,000,000, Fixed, affirmed at Aaa
* Class A-3, $410,948,000, Fixed, affirmed at Aaa
* Class X-1, Notional, affirmed at Aaa
* Class X-2, Notional, affirmed at Aaa
* Class B, $30,624,000, Fixed, upgraded to Aaa from Aa2
* Class C, $34,708,000, Fixed, upgraded to Aa2 from A2
* Class D, $10,208,000, Fixed, upgraded to Aa3 from A3
* Class E, $24,500,000, Fixed, upgraded to A3 from Baa2
* Class F, $12,250,000, Fixed, upgraded to Baa2 from Baa3
* Class G, $16,333,000, Fixed, affirmed at Ba1
* Class H, $12,249,000, Fixed, affirmed at Ba2
* Class J, $6,125,000, Fixed, affirmed at Ba3
* Class K, $4,084,000, Fixed, affirmed at B1
* Class L, $8,166,000, Fixed, affirmed at B2
* Class M, $4,083,000, Fixed, affirmed at B3
As of the Feb. 13, 2006, distribution date, the transaction's
aggregate principal balance has decreased by approximately 4.9% to
$776.5 million from $816.7 million at securitization. The
Certificates are collateralized by 127 loans, ranging in size from
less than 1.0% to 5.9% of the pool, with the top ten loans
representing 33.2% of the pool. Five loans, representing 7.1% of
the pool, have defeased and are collateralized by U.S. Government
securities. The largest defeased loan is the Festival at Bel Air
Loan, which is the pool's second largest loan.
One loan has been liquidated from the pool resulting in a realized
loss of approximately $2.7 million. Two loans, representing 1.1%
of the pool, are in special servicing. Moody's is projecting
aggregate losses of approximately $3.0 million for the specially
serviced loans. Thirty-one loans, representing 20.8% of the pool,
are on the master servicer's watchlist.
Moody's was provided with year-end 2004 operating results for
93.4% of the pool, excluding the defeased loans, and partial year
2005 operating results for 69.4% of the pool. Moody's weighted
average loan to value ratio is 86.6%, compared to 88.4% at
securitization. The upgrade of Classes B, C, D, E and F is due to
improved pool performance, a relatively high percentage of
defeased loans and increased credit support.
The top three loans represent 12.5% of the pool. The largest loan
is the Aramark Tower Loan, which is secured by a 634,000 Class A
office building located in downtown Philadelphia, Pennsylvania.
The property serves as the world headquarters for Aramark
Services, Inc. Since securitization, Aramark has extended its
lease to September 2018 and expanded from 47.5% to 58.5% of the
building.
The second largest tenant is the Philadelphia Authority for
Industrial Development. The property is 98.7% occupied,
essentially the same as at securitization. Moody's LTV is 69.4%,
compared to 73.8% at securitization.
The second largest loan is the Silverado Ranch Plaza Loan, which
is secured by a 234,000 square foot retail center located in Las
Vegas, Nevada. Major tenants include Nordstrom Rack, Marshalls,
Michaels and PetsMart. The property is 98.0% occupied, compared
to 93.0% at securitization. Moody's LTV is 91.8%, compared to
95.6% at securitization.
The third largest loan is the 4th & Battery Office Loan, which is
secured by a 201,000 square foot office building located in
downtown Seattle, Washington. The property is occupied primarily
by biotechnology firms. The largest tenants are Northstar
Neuroscience, Practice Partner, formerly known as Physician Micro
Systems, Inc., and Trubion Pharmaceuticals. The property is 96.2%
occupied, the same as at securitization. Moody's LTV is 86.7%,
compared to 94.1% at securitization.
The pool's collateral is a mix of retail, office and mixed use,
multifamily, industrial and self storage and U.S. Government
securities. The collateral properties are located in 30 states.
The highest state concentrations are California, Pennsylvania,
Nevada, Ohio and Michigan. All of the loans are fixed rate.
K-SEA TRANSPORTATION: Moody's Withdraws B2 Rating on Proposed Debt
------------------------------------------------------------------
Moody's Investors Service affirmed the B1 Corporate Family and
SGL-3 Speculative Grade Liquidity Ratings of K-Sea Transportation
Partners L.P., but has changed the outlook to negative from
stable.
In a related action, Moody's withdrew the B2 senior unsecured
rating assigned to a proposed note issuance as K-Sea has decided
not to proceed with an offering.
In Moody's view, while operating conditions for distribution of
petroleum products are likely to remain favorable in K-Sea's
traditional east coast regional markets as well as in the U.S.
West Coast and Alaska markets which K-Sea recently entered, the
company's ongoing re-fleeting requirements and the high dividend
payout expected could limit K-Sea's ability to generate free cash
flow to improve its financial profile.
The ratings consider K-Sea's modest size, expectations of high
capital expenditures for maintenance of the fleet, the limited
financing alternatives as a substantial portion of K-Sea's fleet
is now pledged, the concentration of revenue among a relatively
few customers, and the competitive environment in the coast-wise
trade.
The ratings also factor in the aggressive financial policies of K-
Sea through its Master Limited Partnership, which contemplates a
high dividend payout of a substantial portion of the company's
cash from operations. However, Moody's notes that K-Sea's
financial leverage is moderate for its rating category. In
addition the high portion of fixed-price contracts with a number
of long-tenured customers, and K-Sea's track record in its niche
tug/barge shipping segment support the expectation of a
predictable revenue stream and stable operating margins.
Additionally, the limitations on new entrants garnered from the
protections of the U.S. Jones Act, which restricts operations to
U.S. carriers; the specialized know-how and skill required for
handling petroleum products; and the significant capital required
of start-up operations also support the rating.
The change in outlook to negative reflects Moody's view that free
cash flow is likely to be negative going forward due to ongoing
capital spending and to dividend distributions. Consequently,
Moody's expects that K-Sea will rely on additional debt to fund
dividend distributions and vessel acquisitions. In addition,
Moody's notes the recent decrease in financing flexibility as a
substantial portion of the Company's vessel assets are now pledged
to secure an increase in the amount of senior secured debt.
Moody's believes that oil company and other customers of petroleum
transportation services will, with increasing frequency, have a
preference for modern double-hulled vessels sooner than the
timeframes mandated by the Oil Pollution Act of 1990.
Consequently, K-Sea could be pressured to accelerate investments
in fleet replacement, which would likely prolong the generation of
negative free cash flow, which would likely be financed with
increased debt.
Ratings may be pressured downwards if Debt/EBITDA exceeds 4.0x, if
EBIT/Interest expense declines to below 2.0x, or the company
aggressively increases its acquisition profile. The outlook could
be returned to stable if K-Sea were to adopt a more conservative
financial policy, including devoting cash flow from operations
towards fleet reinvestment, and demonstrating on-going access to
additional equity sufficient to stabilize the capital structure.
Debt at Dec. 31, 2005, was $212 million, or approximately 3.7x
proforma LTM December 2005 EBITDA, which is moderate for the B1
rating category. Interest coverage at approximately 3.0x is also
reasonable for the rating category. However, the current debt
level is secured by a majority of the company's vessel assets,
with vessel assets of only modest fair market value remaining un-
pledged. The recent increase in the number and value of fixed
assets pledged to the senior secured facility has reduced the
Company's financial flexibility, in Moody's view.
Moody's believes that K-Sea's current asset coverage of
outstanding debt is adequate but not robust relative to these
obligations. Of approximately $300 million of net book value of
vessels and equipment, representing 100 owned vessels at Feb. 28,
2006, thirty vessels remain un-pledged. However, these thirty
vessels comprise the balance of the company's older, single-hull
barges, which Moody's estimates would appraise at considerably
lower values relative to the younger double-hulled barges already
pledged.
Further, considering that (a) vessels are, by nature, assets that
depreciate in value over their respective lives and (b) current
estimated vessel values may be upward-biased due to the strong
existing market environment, a substantial reduction in vessel
values is possible during a market downturn. Consequently, the
company's ability to ultimately repay or refinance existing or
subsequently issued debt facilities could be diminished over the
long term.
With the expectation of the continuance of negative free cash flow
generation, Moody's expects debt and leverage to rise absent
additional equity issuance. Regarding K-Sea's MLP structure,
Moody's is concerned about the ongoing access to this source of
capital in sufficient quantity.
K-Sea will be facing ongoing increases in capital expenditures in
upcoming periods as it replaces single-hull vessels to comply with
double-hull provisions of OPA 90. About one-third of K-Sea's
total capacity is still single-hull.
Moody's expects that K-Sea will seek to raise additional equity in
the MLP market in order to fund increased capital expenditures, to
the extent needed to maintain its stated target debt to capital
ratio of approximately 50%. However, access to the MLP market may
not be assured, particularly with a higher interest rate
environment, as higher rates would make MLP yields less attractive
to the return-oriented MLP investors.
K-Sea Transportation Partners L.P. speculative grade liquidity
rating of SGL-3 reflects Moody's belief that K-Sea will maintain
an adequate liquidity profile during the upcoming 12-month period.
K-Sea's liquidity profile is characterized by:
i) expectations of a modest level of cash on hand;
ii) estimated negative free cash flow;
iii) high reliance on the existing senior secured revolving
credit facility;
iv) adequate cushion in the financial covenants of the credit
facility; and
v) a modest amount of collateral value of the vessels that
remain unencumbered.
Rating withdrawn:
* B2 Senior Unsecured Notes due 2012
K-Sea Transportation Partners, L.P., headquartered in Staten
Island, New York, is a leading provider of refined petroleum
product marine transportation, distribution and logistics services
in the U.S.
LARGE SCALE: Selling Owensboro Facility for $6.4 Million
--------------------------------------------------------
The Hon. Michael McManus of the U.S. Bankruptcy Court for the
Eastern District of California in Sacramento approved uniform
bidding procedures related to the proposed sale of Large Scale
Biology Corporation and its debtor-affiliates' facility located at
Owensboro in Kentucky.
The Owensboro facility is a state-of-the-art biomanufacturing
facility owned by Large Scale Bioprocessing, Inc., LSBC's debtor-
affiliate. the facility covers 30,000 square feet and includes
upstream processing modules, downstream separation suites and a
full complement of analytical quality control resources.
The Bankruptcy Court had previously approved a "stalking-horse"
bid from Owensboro-Medical Health System, proposing to purchase
the facility for $6.4 million.
OMHS agreed to advance $25,000 per week until it closes the
purchase agreement with the Debtors. As of Feb. 13, 2006, OMHS
had advanced approximately $100,000. The total advances from OMHS
to the Debtors, less $50,000, will be treated as a post-petition
loan bearing a 10% interest until paid. The loan is secured by a
senior lien on the Owensboro facility.
Other potential buyers who want to submit competitive bids for the
Owensboro facility must present an initial overbid of $250,000 and
execute a sale agreement in substantially the same form and terms
as the agreement between the Debtors and OMHS.
All overbidders must pre-qualify by making a $250,000 refundable
deposit to the Debtors' special counsel, Gerald Sweeney, Esq., at
least five days before the sale hearing.
In addition the successful overbidder must deposit another
$250,000 within 24 hours after the Bankruptcy Court approves the
winning bid. It must also close the sale by April 10, 2006.
OMHS will receive a $150,000 breakup fee if it is outbid at an
auction.
Headquartered in Vacaville, California, Large Scale Biology
Corporation -- http://www.lsbc.com/-- develops, manufactures and
sells plant-made pharmaceutical proteins and vaccines. LSBC and
its debtor-affiliates filed for chapter 11 protection on Jan. 9,
2006. (Bankr. E.D. Calif. Case No. 06-20046). Paul J. Pascuzzi,
Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi, represent
the Debtors in their restructuring efforts. As of Nov. 30, 2005,
the LSBC had $9,760,000 in total assets and $7,836,000 in total
debts.
MARSH SUPERMARKETS: Weak Returns Prompt Moody's to Cut Ratings
--------------------------------------------------------------
Moody's Investors Service lowered the ratings of Marsh
Supermarkets, Inc., including the corporate family rating to B3
from B2, and retained a developing outlook.
The downgrade reflects the deterioration in Marsh's operating
performance and credit metrics as the company and other
traditional supermarkets have lost share to competitors in its
core markets, as well as the weak returns from significant
expenditures in recent years to expand its store base.
The developing outlook reflects the uncertainty about Marsh's
future financial and operating profile given Marsh's ongoing
exploration of strategic alternatives to enhance shareholder
value, including a possible sale of the company.
Ratings lowered:
* Corporate Family Rating to B3 from B2
* 8.875% senior subordinated notes due in 2007, guaranteed by
operating subsidiaries, to Caa2 from Caa1
Moody's does not rate Marsh's:
(1) $95 million senior secured revolving credit agreement
expiring in November 2010, which is secured by the pledge
of material assets and subject to a borrowing base; or
(2) the new $25 million term loan maturing in January 2008
secured by real estate with a second lien on the
collateral pledged to the revolving credit facility.
Both facilities are guaranteed by operating subsidiaries.
Marsh's new ratings incorporate the company's high leverage, weak
profitability and negative free cash flow, as well as the
challenges to improving revenues and profitability in a
promotional food retailing environment.
Intense competition from conventional supermarkets and
supercenters in its narrow geographic region has pressured Marsh's
already low operating margin -- while the reported operating
profit margin of 1.1% in the recent third fiscal quarter, adding
back the non-cash impairment charge, was an improvement over the
second quarter's 0.2% margin, profitability still trails the prior
year's third quarter's margin of 2.2%.
In addition, comparable store sales excluding fuel declined 1.4%.
Free cash flow continues to be negative, with modest operating
cash flow generally supplemented by incremental debt and
sale/leasebacks to fund the company's capital expenditures. Marsh
has taken a number of actions to strengthen its financial
condition including store closings and identification of other
cost reduction initiatives that are expected to save more than $15
million annually.
However, pre-tax charges related to these efforts, for future
lease payments and for severance, are expected to total $11.8
million to $16.8 million in the fourth fiscal quarter. Moody's
believes that a highly promotional and competitive supermarket
environment will preclude significant near term growth in cash
flow, margins and non-fuel comparable store sales.
The ratings also take account of the company's well established
position as a leading supermarket operator around Indianapolis,
its modern store base, and some revenue diversity provided by its
convenience store operations. Moody's also notes that Marsh had
unused availability of $51.7 million under its $95 million asset-
based revolving credit agreement as of Jan. 7, 2006.
The company diversified its funding sources with a new term loan
of $25 million in January. However, at Jan. 7, 2006, Marsh's
consolidated fixed charge ratio, as defined in the senior
subordinated indenture, did not meet the 2 times minimum required
to incur additional debt, although the full capacity under the
company's senior secured revolving credit agreement is available.
The developing rating outlook reflects the uncertainty about the
future configuration of Marsh, given its exploration of strategic
alternatives. The company will likely face downward rating
pressure if it does not adopt initiatives or choose strategic
alternatives that will result in positive non-fuel comparable
store sales, a reported EBIT margin of at least 1% and debt to
EBITDA of 6.5 times or less. The outlook could be changed to
stable if Marsh's undertakings are likely to generate the above
credit metrics.
Marsh Supermarkets, Inc., headquartered in Indianapolis, Indiana,
operates 117 supermarkets, 154 convenience stores, and a catering
company. Sales for the fiscal year ended April 2, 2005 exceeded
$1.7 billion.
MIRANT CORPORATION: Court Approves N.Y. State DEC Consent Order
---------------------------------------------------------------
The New York State Department of Environmental Conservation
complained that Debtor Mirant NY-Gen, LLC, committed environmental
violations in three hydroelectric generating stations located in
Mongaup River, New York.
The three stations consist of:
(1) the Swinging Bridge Facility;
(2) the Mongaup Falls Facility; and
(3) the Rio Facility.
Based on a review of water quality monitoring reports submitted
by Mirant NY-Gen, the DEC determined that from May 1999 to April
2002, discharges from the Facilities contravened the water
quality standards for dissolved oxygen on several occasions.
According to the DEC, each excessive discharge constitutes a
separate and distinct violation of Section 703.3 of Title 6 of
the Official Compilation of the Codes, Rules and Regulations of
the State of New York, and Section 17-0501 of the Environmental
Conservation Law of the State of New York.
Section 71-1929 of the ECL provides:
-- for a maximum penalty of $37,500 per day for each violation
of Article 17 or its related rules or regulation; and
-- that any person who violates Article 17, or its related
rules or regulations, may be enjoined from continuing that
violation.
According to Jeff P. Prostok, Esq., at Forshey & Prostok, LLP, in
Fort Worth, Texas, Mirant NY-Gen met with the DEC to discuss the
dissolved oxygen discharge performance of its Facilities. Mirant
NY-Gen also studied the impact and degradation of water quality
and flow caused by its Facilities on the Mongaup River.
On Sept. 29, 2003, the DEC served Mirant NY-Gen a notice of
hearing and a complaint based on the alleged violations. The DEC
also filed a complaint and a request for summary order against
Mirant NY-Gen with the Office of Hearings and Mediation Services.
To settle and resolve the violations, Mirant NY-Gen agrees to
waive its right to a hearing with respect to the Complaint.
Mirant NY-Gen also agrees to the issuance of a consent order by
the Commissioner of the New York DEC, and to be bound by the
terms, provisions and conditions of the Consent Order.
The essential terms of the Consent Order are:
(a) Without admitting or denying the allegations in the
Complaint, Mirant NY-Gen agrees to pay $8,000 to the DEC,
as civil penalty.
(b) Mirant NY-Gen will comply with the Consent Order's
schedule of compliance, which provides for, among other
things, the installation of a turbine venting apparatus
for Turbine No. 2, and, if operations resume, for Turbine
No. 1, at the Swinging Bridge Facility.
(c) Mirant NY-Gen agrees to certain reporting requirements and
to grant the DEC access to facilities and records to
insure compliance with the Consent Order.
At Mirant NY-Gen's behest, the U.S. Bankruptcy Court for the
District of Delaware approves the Consent Order in its entirety.
Judge Lynn authorizes the Commissioner of the New York DEC to
issue the Consent Order.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally. Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on January 3, 2006. Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring. When the Debtors filed for
protection from their creditors, they listed $20,574,000,000 in
assets and $11,401,000,000 in debts. (Mirant Bankruptcy News,
Issue No. 93 Bankruptcy Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to power generator and developer Mirant Corp. and
said the outlook is stable. That rating reflected the credit
profile of Mirant, based on the structure the company expects to
have on emergence from bankruptcy at or around year-end 2005, S&P
said.
MUSICLAND HOLDING: Creditors Panel Hires Hahn & Hessen as Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors seeks authority from
the U.S. Bankruptcy Court for the Southern District of New York to
retain Hahn & Hessen LLP as its counsel in Musicland Holding Corp.
and its debtor-affiliates' chapter 11 cases, under a general
retainer.
According to Curtis Roberts, co-chairman of the Committee, Hahn &
Hessen is thoroughly familiar with and experienced in chapter 11
matters.
The Committee believes that Hahn & Hessen's attorneys are well
qualified to represent the interest of the Committee and its
constituency. Hahn & Hessen has been representing creditors'
interests in insolvency proceedings for more than 70 years.
As counsel, Hahn & Hessen will:
(a) render legal advice to the;
(b) assist the Committee in its investigation of the acts,
conduct, assets, liabilities and financial condition of
the Debtors, the operation of the Debtors' businesses, the
desirability of continuing business and any other matters
relevant to the proceedings or to the business affairs of
the Debtors;
(c) advise the Committee on any proposed reorganization plan,
the Debtor's prosecution of claims against third parties,
and any other matters relevant to the proceeding or to the
formulation of a plan of reorganization;
(d) assist the Committee in requesting the appointment of a
trustee or examiner pursuant to Section 1104 of the
Bankruptcy Code, if necessary; and
(e) perform other legal services, which may be required by the
unsecured creditors.
Mr. Roberts says that Hahn & Hessen has assured the Committee that
it will not represent any other entity in connection with the
Chapter 11 cases.
Mark S. Indelicato, Esq., a member of Hahn & Hessen LLP, assures
the Court that to the best of his knowledge, the firm does not
have any connection with the Debtor.
In addition, Mr. Indelicato attests that Hahn & Hessen does not
represent any interest adverse to that of the Committee or the
Debtors' estates in the matters upon which it is to be engaged.
Hahn & Hessen will be paid at its customary hourly rates for
services rendered and for actual expenses incurred:
Partners $410 to $595
Associates $280 to $350
Paralegals $90 to $175
Mr. Indelicato notes that Hahn & Hessen has not received a
retainer from the Committee or from anyone else for its retention.
* * *
Judge Bernstein authorizes the Committee to retain Hahn & Hessen
LLP, as its counsel, under a general retainer, effective as of
Jan. 20, 2006.
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: Court Okays Olshan Grundman as Panel's Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors sought to retain
Hahn & Hessen LLP as its general counsel.
The Committee believes that the retention of Olshan Grundman
Frome Rosenzweig & Wolosky LLP as Conflicts Counsel will enhance
the ability of Hahn & Hessen to represent the Committee. Olshan
will handle matters that cannot be handled by Hahn & Hessen, due
to actual or potential conflicts of interest issues.
The Committee notes that Olshan has extensive expertise,
experience and knowledge in the field of creditors' rights.
The Committee believes that the efficient coordination of efforts
between Hahn & Hessen and Olshan will:
* avoid unnecessary litigation;
* add to the effective administration of Musicland Holding
Corp. and its debtor-affiliates' cases; and
* reduce the overall expense of administering the Chapter 11
cases.
According to Curtis Roberts, Committee co-chairman, Hahn & Hessen
and Olshan will function cohesively to ensure that legal services
provided to the Committee by each firm are not duplicated.
Olshan will render professional services:
a. in matters which Hahn & Hessen, may no be able to act as a
result of an actual or potential conflict of interest, or
b. in matters which the Committee or Hahn & Hessen requests
Olshan's assistance.
In addition, Olshan will represent the Committee in all matters
with respect to the Motion for DIP Financing, Use of Cash
Collateral and Adequate Protection.
Olshan's current standard hourly rates are:
Partners $360 to $590
Associates and Counsel $215 to $380
Paraprofessionals $130 to $190
Michael S. Fox, Esq., a partner at Olshan, discloses that the firm
has not received any prepetition payment from the Debtors, any
creditor, or any third party.
Mr. Fox assures the U.S. Bankruptcy Court for the Southern
District of New York that Olshan is a "disinterested person" as
defined in Section 101(14) of the Bankruptcy Code.
"To the best of my knowledge, formed after reasonable inquiry,
neither I nor any other member of, of counsel to, or associate of
Olshan, represents any other entities other than the Committee in
connection with the Chapter 11 Cases," Mr. Fox states.
In addition, Mr. Fox attests that Olshan has no undisclosed
connection with the Debtors, their creditors, the United States
Trustee, or any other party with any actual or potential interest
in the Chapter 11 cases.
* * *
Provided that Olshan does not have any interest adverse to the
Debtors, Judge Bernstein authorizes the Committee to retain
Olshan as its conflicts counsel.
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)
NELLSON NUTRACEUTICAL: Hires Pachulski Stang as Bankruptcy Counsel
------------------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware gave Nellson Nutraceutical, Inc., and its
debtor-affiliates authority to employ Pachulski, Stang, Ziehl,
Young, Jones & Weintraub, P.C., as their bankruptcy counsel, nunc
pro tunc to Jan. 28, 2006.
As reported in the Troubled Company Reporter, Pachulski Stang
will:
(a) provide legal advice with respect to their powers and
duties as debtors-in-possession in the continued operation
of their businesses and management of their properties;
(b) prepare and pursue confirmation of Debtors' plan and
approval of the Debtors' disclosure statement;
(c) prepare necessary applications, motions, answers, orders,
reports and other legal papers on behalf of the Debtors;
(d) appear in Court and protect the interests of the Debtors
before the Court; and
(e) perform all other legal services for the Debtors that are
necessary and proper in the Debtors bankruptcy proceeding.
Laura Davis Jones, Esq., a partner at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub, P.C., disclosed that the Firm received a
$880,000 prepetition retainer. The Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Laura Davis Jones, Esq. $675
Richard M. Pachulski, Esq. $725
Brad R. Godshall, Esq. $625
Maxim B. Litvak, Esq. $395
Rachel Lowy Werkheiser, Esq. $325
Patricia J. Jeffries $175
Marlene Chappe $150
Jorge E. Rojas $120
Headquartered in Irwindale, California, Nellson Nutraceutical,
Inc., formulate, make and sell bars and powders for the nutrition
supplement industry. The Debtors filed for chapter 11 protection
on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072). Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M. Pachulski,
Esq., Brad R. Godshall, Esq., and Maxim B. Litvak, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent
the Debtors in their restructuring efforts. When the Debtors
filed for protection from their creditors, they estimated more
than $100 million in assets and debts.
NELLSON NUTRACEUTICAL: U.S. Trustee Appoints Five-Member Committee
------------------------------------------------------------------
The U.S. Trustee for Region 3 appointed five creditors to serve on
the Official Committee of Unsecured Creditors in Nellson
Nutraceutical, Inc., and its debtor-affiliates' chapter 11 cases:
1. Solae, LLC
Attn: Daniel R. Bouchard
1034 Danforth Drive
St. Louis, Missouri 63102
Tel: (314) 982-3296
Fax: (314) 982-1121
2. Kerry Inc.
Attn: Joseph S. Duncan,
1 Millington Road
Beloit, Wisconsin 53511,
Tel: (608) 361-7015
Fax: (608) 361-7075
3. Pride Transport, Inc.
Attn: Greg R. Low
5499 West 2455 South
Salt Lake City, Utah 84120
Tel: (801) 972-8890
Fax: (801) 478-0047
4. The Blommer Chocolate Company
Attn: Jack S. Larsen, 600 West Kinzie Street,
Chicago, Illinois 60610
Tel: (312) 226-7700
Fax: (312) 226-5357
5. Printpack, Inc.
Attn: Robert P. George
4335 Wendell Drive,
Atlanta, Georgia 30336
Phone: (404) 460-7229
Fax: (404) 696-5058.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Headquartered in Irwindale, California, Nellson Nutraceutical,
Inc., formulate, make and sell bars and powders for the nutrition
supplement industry. The Debtors filed for chapter 11 protection
on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072). Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M. Pachulski,
Esq., Brad R. Godshall, Esq., and Maxim B. Litvak, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent
the Debtors in their restructuring efforts. Lawyers at Young,
Conaway, Stargatt & Taylor, LLP, represent an informal committee
of which General Electric Capital Corporation and Barclays Bank
PLC are members. When the Debtors filed for protection from their
creditors, they estimated more than $100 million in assets and
debts.
NEW ORLEANS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: New Orleans Tours, Inc.
610 South Peters Street
New Orleans, Louisiana 70130
Tel: (504) 592-0560
Bankruptcy Case No.: 06-10136
Type of Business: The Debtor conducts tours & expeditions
throughout the city of New Orleans.
Chapter 11 Petition Date: March 3, 2006
Court: Eastern District of Louisiana (New Orleans)
Judge: Jerry A. Brown
Debtor's Counsel: Stewart F. Peck, Esq.
Lugenbuhi, Wheaton, Peck, Rankin & Hubbard
601 Poydras Street, Suite 2775
New Orleans, Louisiana 70130
Tel: (504) 568-1990
Fax: (504) 529-7418
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Kish & Co. $132,868
315 Metairie Road, Suite 203
Metairie, LA 70005
National Interstate Insurance Co. $113,550
3250 Interstate Drive
Richfield, OH 44286
Smith Law Firm, LLC $90,947
700 Camp Street
New Orleans, LA 70130-3702
Caterpillar Financial Services $70,400
Global International
Conseco Finance Leasing Trust $60,981
G.E. Capital $32,880
Lemle & Kelleher, LLP $30,790
US Bancorp Equipment Finance $25,083
City of New Orleans $19,085
MCII Financial Service, II $17,043
Guest Informant $16,904
Bellsouth Advertising & Publishing $14,208
G&K Services $13,546
Traveling In Pride, Inc. $13,192
Entergy $12,437
Weaver Publications $12,403
Bridgestone/Firestone Inc. $11,989
Klotz & Early $11,805
Southland International $11,092
Travel Host Publications $10,692
NEWQUEST INC: Standard & Poor's Withdraws Single-B Rating
---------------------------------------------------------
Standard & Poor's Ratings Services removed its 'B' counterparty
credit rating on NewQuest Inc. from CreditWatch and withdrew the
rating at the company's request. Consequently, NewQuest Inc. will
no longer be subject to surveillance by Standard & Poor's.
The rating was placed on CreditWatch with positive implications on
Feb. 6, 2006, in connection with its public offering of common
equity shares by its parent, HealthSpring Inc. (NYSE:HS).
HealthSpring raised $366.6 million overall and most of the
proceeds were used to strengthen the company's balance
sheet by eliminating debt outstanding ($190 million), which
Standard & Poor's considered beneficial to the company's financial
profile.
"The rating on NewQuest was based on its limited market profile,
marginal capital adequacy as measured by Standard & Poor's model,
and the high level of intangibles relative to equity," noted
Standard & Poor's credit analyst Joe Marinucci.
Partially offsetting these negative factors are:
* the company's good earnings profile underscored by strong
returns on revenue;
* established competitive position in its niche marketplace;
and
* focused operational skill sets.
NORTHWEST AIRLINES: S&P Says D Rating Not Affected by Agreement
---------------------------------------------------------------
Northwest Airlines Corp. (D/--/D) and its pilots union announced
preliminary agreement on a concessionary labor contract, following
months of tense negotiations and a threatened strike.
Standard & Poor's Ratings Services said its 'D' corporate credit
ratings on Northwest and subsidiary Northwest Airlines Inc. are
defined by the bankruptcy status of those companies and are not
affected. Ratings of enhanced equipment trust certificates
(EETC's) remain on CreditWatch, excepting 'AAA' rated, insured
EETC's.
"The pilots are the last major labor group to reach a preliminary
agreement (excepting striking mechanics, who have been replaced)
and the largest source of labor savings being sought by the
airline," said Standard & Poor's credit analyst Philip Baggaley.
"Accordingly, a ratified agreement would represent a major step
forward in the airline's efforts to reduce costs and reorganize in
bankruptcy," he continued.
The preliminary agreement still has to be approved by the union's
governing body and then voted on by pilots. Proposed contracts
are up for votes also by ground service employees and flight
attendants. Details of the preliminary pilot agreement are not
known as yet.
Northwest is:
* seeking to reorganize in Chapter 11 proceedings;
* reducing losses by shrinking capacity;
* securing labor cost reductions; and
* reducing fixed financial obligations.
Northwest states that it will seek to cut its costs by $2.5
billion annually (15%-20%), including $1.4 billion of reduced
labor costs (an approximate 35% reduction in overall labor
expenses, which
about $500 million had been achieved prior to bankruptcy).
Northwest has not stated whether it will seek to terminate its
underfunded ($3.8 billion deficit, as of the end of 2004) defined-
benefit pension plans, a decision that may be influenced by
whether Congress passes new pension legislation that allows
airlines to stretch out repayment of their pension deficits.
Other key elements of Northwest's turnaround plan include reducing
capacity in marginal markets and lowering aircraft ownership
costs. Northwest has turned back 51 mainline or regional aircraft
to creditors and lessors, and reached concessionary restructuring
agreements on another 140. The airline seeks fleet-related
savings of $400 million annually. Northwest will also be able to
eliminate unsecured debt and preferred stock, but these represent
a relatively small part of the company's capital structure.
Over the intermediate term, the airline faces substantial capital
spending needs to replace its fleet of over 100 small DC9
aircraft. Any decision on a replacement aircraft will be
influenced by terms of the pilot contract, as Northwest would like
to replace the DC9's with new 70-seat to 100-seat regional jets
flown by pilots at lower, regional airline pay scales.
NORTHWESTERN CORP: Earns $59.5 Million for Year Ended Dec. 31
-------------------------------------------------------------
NorthWestern Corporation dba NorthWestern Energy (NASDAQ: NWEC)
reported financial results for the year ended Dec. 31, 2005.
Highlights for the year include:
-- consolidated income from continuing operations was
$61.5 million;
-- consolidated revenues and gross margin increased by
12.2% and 10.35;
-- gross margin increased for all four of our operating
segments;
-- regulated electric gross margin was $325.2 million, up
8.7%;
-- regulated natural gas gross margin was $119.2 million, up
11.9%;
-- gross margin from unregulated electric operations was
$69.6 million, up 12.6%;
-- unregulated natural gas gross margin increased to
$11.3 million, up 28.4%.
Consolidated net income, including discontinued operations, was
$59.5 million for the year ended Dec. 31, 2005, compared with
consolidated net income of $544.4 million for the year ended
Dec. 31, 2004. Results for 2004 included reorganization items of
$532.6 million associated with our emergence from bankruptcy,
caused primarily by a gain from the cancellation of indebtedness
through fresh-start reporting.
When excluding the effects of the Company's bankruptcy
reorganization items, consolidated net income increased by
approximately $55.2 million for 2005 as compared with 2004. This
improvement in 2005 resulted from an increase in gross margin in
all four of our operating segments, a decrease in interest expense
from 2004 and an increase in other income over 2004.
"Our exceptional 2005 year-end results reflect the successful
restructuring of NorthWestern across all core areas of the
business. Our regulated and unregulated businesses performed well
in 2005," Michael J. Hanson, President and Chief Executive Officer
of NorthWestern said. "Going forward, we will continue to focus
on generating and enhancing free cash flow through continued
customer growth, reducing operating costs and investing in
additional utility transmission and distribution assets."
Consolidated revenues for 2005 were $1.2 billion, an increase of
12.2%, compared with $1.0 billion reported for 2004. The increase
was due primarily to an increase in supply costs that are passed
through to customers in the company's regulated natural gas and
electric segments and increased sales volumes in the regulated
electric segment. The company's unregulated natural gas segment
revenues increased mainly from increased supply costs, and the
company's unregulated electric revenues increased due primarily to
increased volumes.
Consolidated gross margin for 2005 was $524.0 million, a 10.3%
increase, compared with $475.2 million for 2004. Margin in the
regulated electric segment increased $25.9 million in 2005 due to
higher market prices on increased sales volume and decreases in
out-of-market costs associated with QF contracts as compared with
2004.
Margin in the regulated natural gas segment increased
$12.7 million in 2005, primarily due to the recovery of previously
disallowed gas costs and increased natural gas volumes compared
with 2004.
Gross margin in the unregulated electric segment was $69.6 million
for 2005, a 12.6% increase, compared with $61.8 million for 2004.
The increase in margin in the unregulated electric segment was due
primarily to increased volumes from our interest in the Colstrip
Unit 4 electric generating plant.
Gross margin in the unregulated natural gas segment was
$11.3 million for 2005 compared with $8.8 million for 2004.
The increase in the margin for the unregulated natural gas
segment was primarily due to a $2.3 million loss recorded on
out-of-market fixed price contracts in 2004.
Liquidity and Capital Resources
As of Dec. 31, 2005, cash and cash equivalents were $2.7 million
compared with $17.1 million at Dec. 31, 2004. Cash provided by
continuing operations totaled $150.5 million during 2005, compared
with $137.1 million during 2004. This improvement in operating
cash flows was due to improved operating income, primarily offset
by increased pension and other postretirement benefits funding of
$19.3 million and an increase in natural gas and electric trackers
undercollections of approximately $26.3 million. As of Dec. 31,
2005, availability on our unsecured $200 million senior revolving
facility was $91.4 million.
The common stock repurchase program announced during the fourth
quarter of 2005 allows the Company to repurchase up to $75 million
of common stock. It repurchased approximately $2.8 million of
common stock as of Dec. 31, 2005.
2006 Earnings Guidance Reaffirmed
NorthWestern reaffirmed its estimate for 2006 basic earnings of
between $1.70 to $1.90 per share from continuing operations.
The guidance assumes normal weather in the Company's electric and
natural gas service areas and excludes any potential impact from
non-ordinary course litigation. The earnings guidance provided
above does not take into consideration the share repurchase
program and costs related to the strategic review process.
Strategic Review Update
NorthWestern is committed to completing its review of strategic
alternatives to maximize value for all shareholders. The Company
has entered into confidentiality agreements with a select number
of parties who have expressed interest in participating in this
process.
Formal due diligence with those parties has begun. The Board has
received several expressions of interest and will make its
determination following completion of due diligence and
confirmation of interest by those parties. The Board has informed
all interested parties that it may terminate the process at any
time and that there is no guarantee that any transaction will take
place.
A full-text copy of NorthWestern Corp.'s financial statements for
the year ended Dec. 31, 2005, is available for free at
http://ResearchArchives.com/t/s?616
NorthWestern Corporation dba NorthWestern Energy --
http://www.northwesternenergy.com/-- is one of the largest
providers of electricity and natural gas in the Upper Midwest and
Northwest, serving more than 617,000 customers in Montana, South
Dakota and Nebraska. On Sept. 14, 2003, Northwestern filed a
voluntary petition for relief under chapter 11 of the Bankruptcy
Code. The U.S. Bankruptcy Court fort he District of Delaware
confirmed Northwestern's Plan of Reorganization on Oct. 19, 2004
and the plan became effective on Nov. 1, 2004.
* * *
As reported in the Troubled Company Reporter on Nov. 30, 2005,
Fitch Ratings has affirmed NorthWestern Corp.'s outstanding senior
secured debt obligations at 'BBB-' and the senior unsecured
revolving credit facility at 'BB+'. The Rating Outlook has been
revised to Evolving from Positive. The rating action follows the
disclosure by NOR on Nov. 23, 2005 that it is evaluating a merger
proposal received from Black Hills Corporation, Inc Plan Committee
overseeing the remaining claims reconciliation and settlement
process.
NOVOSTE CORP: Glass Tells Shareholders to Vote for Dissolution
--------------------------------------------------------------
Novoste Corporation (NASDAQ: NOVT) reported that Glass Lewis &
Co., a leading national independent proxy advisory firm, has
recommended that Novoste's shareholders vote for dissolution and
liquidation and each of the other proposals to be considered at
Novoste's special meeting of shareholders to be held today,
Mar. 7, 2006, on Novoste's BLUE proxy card. Glass Lewis
recommends that Novoste shareholders do not vote Steel Partners'
green proxy card on any proposals.
After reviewing Novoste's proxy materials and the proxy materials
filed by Steel Partners opposing the dissolution and liquidation
proposal, Glass Lewis concluded that Steel did not demonstrate
that the dissolution proposal is contrary to shareholders'
interest.
Glass Lewis is widely recognized as one of the leading independent
proxy advisory firms in the nation. Its recommendations are
relied upon by numerous major institutional investment firms,
mutual funds, and other fiduciaries throughout the country.
Novoste urges shareholders, whether or not they plan to attend the
special meeting in person, to sign, date and return Novoste's BLUE
proxy card as soon as possible. Novoste shareholders who have
questions may call Alfred J. Novak, Novoste's President and Chief
Executive Officer or Daniel G. Hall, Novoste's General Counsel, at
(770) 717-0904. Shareholders who need assistance voting their
shares may call Novoste's proxy solicitor, Morrow & Co., Inc., at
(800) 607-0088.
Novoste has filed with the Securities and Exchange Commission
definitive proxy materials in connection with the proposals to be
considered at the special meeting on March 7, 2006 and has mailed
copies to shareholders. Novoste urges shareholders to read the
definitive proxy materials because they contain important
information.
Novoste Corporation -- http://www.novoste.com/-- based in Atlanta
Georgia, develops advanced medical treatments for coronary and
vascular diseases and is the worldwide leader in vascular
brachytherapy. The Company's Beta-Cath(TM) System is commercially
available in the United States, as well as in the European Union
and several other countries. Novoste Corporation shares are
traded on the NASDAQ National Stock Market under the symbol NOVT.
* * *
Board Okays Unit's Wind-Down & Evaluates Options
As reported in the Troubled Company Reporter on Feb. 24, 2005,
Novoste Corporation's Board of Directors has determined that its
vascular brachytherapy business is no longer viable and, as a
result, has authorized a staged, wind-down of the business.
The Board has determined that this decision is necessary to
preserve the Company's cash resources and arises as a result of
the continuing decline in revenue for the Company's VBT product.
The Board continues to evaluate strategic alternatives, including
liquidation and dissolution, and believes that it will be able to
conclude its evaluation of alternatives within sixty days.
However, it has determined that the strategic alternatives
available to the Company do not include an ongoing requirement for
a field sales force focused on disposable, medical devices.
Accordingly, Novoste will reduce its U.S. workforce in the first
quarter by 52 employees, from 97 employees.
Novoste has posted recurring losses for the past three years.
The company's latest publicly disclosed balance sheet shows
$34 million in assets and $7 million in debt.
As reported in the Troubled Company Reporter on Jan. 11, 2005,
Novoste hired Asante Partners LLC in April 2004 to "identify and
implement strategic and financial alternatives" -- including a
shutdown, dissolution and liquidation of the company.
NTL INC: Telewest Merger Approval Prompts S&P to Affirm B+ Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' long-term
corporate credit rating on U.K. telephony, cable TV, and Internet
business NTL Inc., following shareholder approval to merge with
Telewest Global Inc. The ratings were removed from Creditwatch
where they were placed on Dec. 5, 2005. The outlook is positive.
At the same time, Standard & Poor's affirmed its debt ratings on
related entities of NTL and removed the ratings from CreditWatch,
including the 'BB-' long-term debt rating on the GBP3.3 billion
($5.7 billion) senior secured credit facilities of NTL Investment
Holdings Ltd. The '1' recovery rating on the facilities was also
affirmed.
"The affirmation reflects Standard & Poor's opinion that the
future potential business benefits of the Telewest combination
will be offset in the short term by both strong competitive
challenges and the merged group's leveraged balance sheet," said
Standard & Poor's credit analyst Simon Redmond. "The affirmation
also encompasses our assessment of the anticipated acquisition of
Virgin Mobile Holdings (UK) PLC by NTL, which we view as neutral
for the combined entity's credit profile in the short term."
The shareholders of NTL and Telewest Global Inc .-- the ultimate
parent of U.K.-based cable telephony, TV, and Internet provider
Telewest Communications Networks Ltd. (B+/Positive/--) -- have
approved the business combination, which is expected to close
imminently, resulting in high lease-adjusted gross debt to EBITDA
of about 4.9x. The combined entity will have gross debt of about
GBP6.4 billion ($11.2 billion) pro forma for both transactions.
The ratings on NTL was originally placed on CreditWatch on
Dec. 5, 2005, following the company's announcement of its cash and
equity bid for Virgin Mobile PLC.
"We believe that credit improvement will depend upon NTL's
successful integration of Telewest, and subsequent improvement in
its business risk profile," added Mr. Redmond. "An upgrade could
result from sustained operational improvement, steady growth of
revenues, and free cash flow generation, leading to improved and
sustainable stronger credit measures."
This might prompt a higher rating, although debt reduction from
asset sales alone would not necessarily result in an upgrade. A
sustained lack of revenue growth or deterioration in operating
performance or cash generation could result in an outlook revision
to stable.
NVE INC: Has Until May 15 to File Chapter 11 Reorganization Plan
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey extended,
until May 15, 2006, NVE Inc.'s time to file a chapter 11 plan of
reorganization. The Court also extended, until July 15, 2006, the
Debtor's time to solicit acceptances of that plan.
The Debtor tells the Court that it has reached an agreement on a
claims resolution process with the Official Committee of Unsecured
Creditors and other parties. Under that claim resolution process,
the universe of claims against the Debtor will be fixed in
approximately 60 days, after which the product liability claimants
will be required to submit substantial backup documentation to the
Debtor and certain Plaintiff representatives. The Debtor says
that the parties intend to use the information obtained in the
context of a global mediation of all claims.
The Debtor reminds the Court that it has already filed a motion
for the Court to approve the agreement and will also file a motion
for the appointment of a mediator and sharing of the expenses of
mediation.
The Bankruptcy Court and the Honorable Jed S. Rakoff of the U.S.
District Court have enjoined the continuation of Ephedra product
liability claims against the retail defendants and the principal
of the Debtor, pending the conclusion of the foregoing process.
The Debtor contends that until the claims resolution process and
the global mediation has progressed further, it will be unable to
file a meaningful chapter 11 plan. The Debtor hopes that the
claims resolution and mediation process will result in agreements
that will be incorporated in the plan.
Headquartered in Andover, New Jersey, NVE Inc., dba NVE
Pharmaceuticals, Inc., manufactures dietary supplements. The
Debtor is facing lawsuits about its weight-loss products which
contain the now-banned herbal stimulant, Ephedra. The Company
filed for chapter 11 protection on August 10, 2005 (Bankr. D. N.J.
Case No. 05-35692). Daniel Stolz, Esq., Leonard C. Walczyk, Esq.,
Michael McLaughlin, Esq., and Steven Z Jurista, Esq., at
Wasserman, Jurista & Stolz, represent the Debtor in its
restructuring efforts. Derek John Craig, Esq., at Brown Raysman
Millstein Felder & Steiner LLP, and David J. Molton, Esq., at
Brown Rudnick Berlack Israels LLP, represent the Official
Committee of Unsecured Creditors. When the Debtor filed for
protection from its creditors, it listed $10,966,522 in total
assets and $14,745,605 in total debts.
NVE INC: Court Approves Nicoll & Davis as Special Patent Counsel
----------------------------------------------------------------
NVE Inc. sought and obtained authority from the U.S. Bankruptcy
Court for the District of New Jersey to employ Nicoll & Davis,
LLP, as its special patent, trademark and intellectual property
counsel.
Nicoll & Davis is expected to continue the prosecution of
trademark applications as well as trademark appeals and opposition
proceedings. The Firm will also police and enforce all of the
Debtor's trademark and intellectual property rights, including
identifying and corresponding with entities who infringe upon the
Debtor's rights, seeking injunctive relief against such entities
and pursuing compensatory damages.
Anthony J. Davis, Esq., member of, Nicool & Davis, tells the Court
that he will bill $200 per hour for this engagement. Mr. Davis
discloses that the Firm's paralegals bill $75 per hour.
Mr. Davis assures the Court that the Firm does not hold an
interest adverse to the Debtor or its estate.
Mr. Davis can be reached at:
Anthony J. Davis, Esq.
Nicoll & Davis, LLP
95 Route 17 South
Paramus, New Jersey 07652
Headquartered in Andover, New Jersey, NVE Inc., dba NVE
Pharmaceuticals, Inc., manufactures dietary supplements. The
Debtor is facing lawsuits about its weight-loss products which
contain the now-banned herbal stimulant, Ephedra. The Company
filed for chapter 11 protection on August 10, 2005 (Bankr. D. N.J.
Case No. 05-35692). Daniel Stolz, Esq., Leonard C. Walczyk, Esq.,
Michael McLaughlin, Esq., and Steven Z Jurista, Esq., at
Wasserman, Jurista & Stolz, represent the Debtor in its
restructuring efforts. Derek John Craig, Esq., at Brown Raysman
Millstein Felder & Steiner LLP, and David J. Molton, Esq., at
Brown Rudnick Berlack Israels LLP, represent the Official
Committee of Unsecured Creditors. When the Debtor filed for
protection from its creditors, it listed $10,966,522 in total
assets and $14,745,605 in total debts.
O'SULLIVAN IND: Wants to Walk Away from Seven Executory Contracts
-----------------------------------------------------------------
James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout,
P.A., in Atlanta, Georgia, tells the U.S. Bankruptcy Court for the
Northern District of Georgia that O'Sullivan Industries Holdings,
Inc., and its debtor-affiliates intend to reject seven executory
contracts effective as of the Confirmation Date:
(1) Deferred Compensation Plan,
(2) Microsoft Corp. Intellectual Property License Agreement,
(3) FedEx Pricing Agreement Service Agreement,
(4) FedEx International Economy Freight Service Agreement,
(5) FedEx Heavyweight Pricing Agreement Service Agreement,
(6) James Hillman Severance Agreement, and
(7) ADT - Fire Alarm Protection, UT Facility Service
Agreement.
Pursuant to the Debtors' Plan of Reorganization, each person who
is a party to a Rejected Contract will be entitled to file a
Proof of Claim against the applicable Debtor for alleged
Rejection Claims not later than 30 days after the entry of the
Confirmation Order. Failure to do so will forever bar the non-
Debtor party, applicable to the Rejected Contract, from asserting
any claims against the Debtors.
Except as otherwise provided under the Plan, Rejection Claims will
be treated as Class 3A Claims if these claims are against:
* O'Sullivan Industries, Inc.,
* O'Sullivan Industries - Virginia, Inc., or
* O'Sullivan Furniture Factory Outlet, Inc.
Any rejection claims against O'Sullivan Industries Holdings,
Inc., will be treated as Class 4 Claims, to the extent that they
are allowed.
Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings,
Inc. -- http://www.osullivan.com/-- designs, manufactures, and
distributes ready-to-assemble furniture and related products,
including desks, computer work centers, bookcases, filing
cabinets, home entertainment centers, commercial furniture, garage
storage units, television, audio, and night stands, dressers, and
bedroom pieces. O'Sullivan sells its products primarily to large
retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and
Office Depot. The Company and its subsidiaries filed for chapter
11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049). Joel H. Levitin, Esq., at Dechert LLP, represents the
Debtors. Michael H. Goldstein, Esq., Eric D. Winston, Esq., and
Christine M. Pajak, Esq., at Stutman, Treister & Glatt, P.C.,
represent the Official Committee of Unsecured Creditors. On Sept.
30, 2005, the Debtor listed $161,335,000 in assets and
$254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
PLUSFUNDS GROUP: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: PlusFunds Group, Inc.
1500 Broadway, 11th Floor
New York, New York 10036
Tel: (212) 653-1900
Fax: (212) 653-1970
Bankruptcy Case No.: 06-10402
Type of Business: The Debtor provides hedge funds and other
financial services for individual and corporate
investors. See http://www.plusfunds.com
Chapter 11 Petition Date: March 6, 2006
Court: Southern District of New York (Manhattan)
Judge: James M. Peck
Debtor's Counsel: James David Leamon, Esq.
Steven J. Reisman, Esq.
Curtis, Mallet-Prevost, Colt & Mosle
101 Park Avenue
New York, New York 10178
Tel: (212) 696-6000
Fax: (212) 697-1559
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
------ --------------- ------------
Standard & Poor's License Fees $297,361
55 Water Street, 42nd Floor
New York, NY 10041
Baker & Hostetler Legal Fees $139,684
666 Fifth Avenue, 16th Floor
New York, NY 10103
Deutsche Bank License Fees $119,026
CIB Global Markets-ICG
Winchester House
1 Great Winchester Street
EC2N 2DB England
XL License Fee $116,583
Seward & Kissel Legal Fees $58,657
Deutsche Bank - Risk Distributor $38,333
Raymond James Distributor $38,208
Refco Capital LLC Distributor $31,250
Merrill Lynch - London Distributor $26,549
Christopher Aliprandi Legal Fees $24,539
On-Site Sourcing, Inc. Vendor $24,111
HF Investment Distributor $22,012
Geneva Partners Distributor $19,398
Intranet Express Vendor $17,315
Ofivalmo Distributor $16,449
Citigroup Global Markets Distributor $15,604
Barry Biniaris Distributor $11,970
Cross Border Vendor $8,301
Sentinel Distributor $7,520
Merrill Lynch Japan Distributor $6,640
PUBLIC STEERS: S&P Lowers Two Debt Class Ratings to BB from BBB-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on classes
A and B of the $25 million Public STEERS Series 1998 HLT-1 Trust
to 'BB' from 'BBB-' and removed them from CreditWatch, where they
were placed with negative implications Nov. 10, 2005.
The rating action reflects:
* the Feb. 23, 2006 lowering of the rating on the underlying
securities;
* the $25 million 7.95% senior notes due April 15, 2007, issued
by Hilton Hotels Corp.; and
* its subsequent removal from CreditWatch.
This issue is a swap-independent synthetic transaction that is
weak-linked to the underlying collateral, Hilton Hotels Corp.'s
$25 million 7.95% senior notes.
QUEEN'S SEAPORT: Court Sets March 28 Mediation For All Parties
--------------------------------------------------------------
Wendy Thomas Russell, writing for the Long Beach Press, reports
that Judge Vincent Zurzolo of the U.S. Bankruptcy Court for the
Central District of California recently ordered the key parties in
interest in Queen's Seaport Development, Inc.'s to mediation on
March 28, 2006, to avoid, Mrs. Russell says, what he termed a
"blood bath."
The Debtor has not outlined any reorganization strategy to date.
According to Mrs. Russell, Bandero LLC, the Debtor's shareholder,
filed a chapter 11 plan on Feb. 6, 2006. Bandero laid out a
proposal to pay off several creditors including the city of Long
Beach, which owns the ship and is owed more than $4.5 million
claim in back rent. In total, Bandero promised to pay off some
$8.6 million in Queen Mary debt, renovate the ship and develop its
adjacent 55-acre site.
"Our plan is basically one to pay the creditors primarily,"
Bandero's attorney Michael Spector, Esq., told Mrs. Russell in an
interview. "There is no provision in the plan to pay the
shareholders anything."
Joseph Prevratil, the Debtor's president and CEO, said that he was
looking forward to mediation and prays he and other parties can
settle the case outside the courtroom.
As reported in the Troubled Company Reporter on Feb. 2, 2006, the
Court gave the Debtor until Apr. 20, 2006, to show cause why its
chapter 11 case should not be converted to a chapter 7 liquidation
proceeding or dismissed.
"It was pretty clear from the judge's comments that he wants to
move this thing along," said Charles Parkin, Esq., a deputy city
attorney for Long Beach.
If settlement talks fail, Mr. Prevratil said, the Debtor could
still file a reorganization plan prior to April 20.
Bandero's filing is short on details, but does give a brief
overview of the group's development proposal including a 200-slip
marina, 300-room hotel, 200-room condo suites hotel or time share,
commercial development and a new cruise-line terminal. The plan
is set at a March 30 hearing for discussion.
Mr. Parkin said city officials still know relatively little about
Bandero and haven't determined whether the company's financial
projections are realistic and whether its plans are consistent
with the city's goals for the site.
"We want to know who we are going to do business with," Mr. Parkin
added. "We haven't fleshed out what their plans are for the
premises."
Headquartered in Long Beach, California, Queen's Seaport
Development, Inc. -- http://www.queenmary.com/-- operates the
Queen Mary ocean liner, various attractions and a hotel. The
Company filed for chapter 11 protection on March 15, 2005
(Bankr. C.D. Calif. Case No. 05-15175). Joseph A. Eisenberg,
Esq., at Jeffer Mangles Butler & Marmaro LLP represents the Debtor
in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of $10 million to $50 million.
QUICKSILVER RESOURCES: S&P Rates Proposed $300 Million Notes at B
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to oil and gas exploration and production company
Quicksilver Resources Inc. and its 'B' rating to Quicksilver's
proposed $300 million senior subordinated notes due 2016.
The notes are being offered under the company's shelf
registration. Proceeds from the note offering will be used to
reduce outstanding bank debt and other debt and for general
corporate expenses and fees.
The outlook is stable. Fort Worth, Texas-based Quicksilver had
about $588 million of debt as of Dec. 31, 2005, pro forma for the
proposed note offering.
"The ratings on Quicksilver reflect the company's midsize reserve
base, modest geographic diversification, high financial leverage,
and an aggressive drilling program in a rising service cost
environment," said Standard & Poor's credit analyst Brian Janiak.
Standard & Poor's also said that it expects the company to
continue to aggressively expand its reserves and production levels
predominantly through the drill bit while also maintaining
appropriate liquidity and financial leverage commensurate with its
similarly rated 'BB-' peers.
As of year-end 2005, Quicksilver had a reserve base of
1.1 trillion cubic feet equivalent.
SAGITTARIUS BRANDS: S&P Rates Planned $330 Million Bank Loan at B
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to restaurant operator Sagittarius Brands. At the
same time, Standard & Poor's assigned its 'B' rating to the
company's planned $330 million bank loan. A recovery rating of
'2' was also assigned to the loan, indicating the expectation of
substantial recovery of principal in the event of a payment
default. The outlook is stable.
The ratings on Nashville, Tennessee-based Sagittarius Brands
reflect:
* the company's small size in the highly competitive quick
service sector of the restaurant industry;
* its regional concentration; and
* a very highly leveraged capital structure that limits cash
flow protection.
"Sagittarius' Del Taco brand has demonstrated improving operating
performance over the past five years," said Standard & Poor's
credit analyst Robert Lichtenstein, "but same-store sales and
average unit volume growth moderated in 2005 as traffic slowed."
SEACOR HOLDINGS: S&P Raises $150 Million Notes' Ratings to BBB-
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
oilfield services company SEACOR Holdings Inc. (BBB-/Negative/--)
and at the same time, raised the rating on subsidiary Seabulk
International Inc.'s $150 million senior notes due 2013 to 'BBB-'
from 'BB+'. The outlook is negative.
The rating actions follow the successful completion of the consent
solicitation regarding Seabulk's 9.5% senior notes due 2013. As a
result, the Seabulk notes will now be guaranteed by SEACOR and
rank equally with SEACOR's other senior unsecured debt bligations.
Since its mid-2005 acquisition by EACOR, the Seabulk notes were
rated one notch below the unsecured debt of SEACOR to reflect
their junior position in the capital structure.
"The ratings on SEACOR reflect the company's satisfactory business
profile as a leading, diversified operator of marine vessels and
helicopters that support the offshore oil and gas exploration and
production and oilfield services industries, marine ransportation,
as well as a significant position in the dry bulk inland barge
industry," said Standard & Poor's credit analyst Paul B. Harvey.
"In addition, SEACOR has an entrepreneurial management team
that actively manages its assets, and is viewed as having an
intermediate financial risk profile," he continued.
The negative outlook reflects:
* Standard & Poor's continued concern about the additional debt
leverage incurred as a result of the ERA Aviation Inc. and
Seabulk acquisitions; and
* its longer-term effect on cash flows and earnings through the
business cycle.
In addition, Standard & Poor's remains concerned that SEACOR's
debt leverage may fail to improve if further acquisitions or
aggressive capital spending limit free cash flow, which could lead
to negative rating actions. The ratings could stabilize if SEACOR
can use the current strong market conditions to reduce debt
leverage in preparation for the next cyclical downturn, while
providing the financial footing to meet upcoming capital-expense
requirements.
SILICON GRAPHICS: Projects $20 Mil. Lay-Off & Restructuring Costs
-----------------------------------------------------------------
Silicon Graphics (OTC: SGID) CEO Dennis McKenna unveiled his first
major moves to achieve the goal of returning the company to
profitability.
Mr. McKenna is taking decisive action implementing a new
organizational structure that is based on a distributed and
collaborative management model, with a philosophy to drive
responsiveness, flexibility and accountability throughout the
organization.
As part of this, approximately 12% of the workforce or
250 positions in specific areas will be eliminated in the
restructuring. In addition, SGI will continue to move forward
with the previously announced cost reduction programs, increasing
the total annualized savings objective to $150 million by the end
of 2006. Together these actions will result in a flattened
organization and simplified business processes and structures.
The total incremental restructuring charge, including severance
and other charges, is expected to be approximately $20 million,
and incurred over the next several quarters, as the international
impacts generally take longer to complete. SGI's severance
programs provide, where practical, payments to be made over the
same period in which the payroll expenses otherwise would have
been incurred, with the objective of minimizing incremental cash
expense.
"As promised in late January, the goal for my first 30 days at SGI
was to solidify a strong business foundation and assemble an
organization that is laser-focused on execution," McKenna said.
"We've made tough decisions and we thank all SGI employees for
their hard work and commitment."
Product Portfolio
Mr. McKenna's next strategic step is to effectively position SGI's
existing products for better differentiation in the marketplace.
The Company will consolidate its compute server and visualization
platform, and support customers' visualization needs by leveraging
best-of-breed, industry-standard, and open-source graphics
partnerships.
In addition, the Company will aggressively pursue new markets in
the enterprise space, which are an excellent match for SGI's
highly scalable servers and high-performance storage solutions.
SGI helps these companies efficiently manage big data problems
through its unique technologies, including its NUMAflex global
shared memory, NAS and SAN solutions. Finally, the company will
bring new products to market within different price/performance
bands, specifically targeting the mid-range.
"One thing that is not changing is that customers remain our top
priority," Mr. McKenna said. "SGI is committed to offering
services and solutions to our customers that solve their high-
performance computing needs."
Corporate Financing
The board of directors continues to explore all strategic and
financial options as management moves to stabilize the business.
"Critical obstacles are still in the road and we are actively
recruiting to make strategic hires to bring in the right skill
sets needed in channel, product, and business development to
achieve our objectives and complete this turnaround," Mr. McKenna
continued.
Management Changes
SGI also disclosed the resignation of CFO Jeff Zellmer and
departure of COO Warren Pratt, who are leaving SGI to pursue
personal interests. Kathy Lanterman, currently the corporate
controller at SGI, will replace Jeff Zellmer as CFO.
"Both Jeff and Warren have made significant contributions to SGI
and we wish them well in their future endeavors," Mr. McKenna
concluded. "Kathy brings to the CFO role a strong history of
financial leadership and operational experience. I am confident
that she will execute a seamless transition."
Silicon Graphics, Inc. -- http://www.sgi.com/-- is a leader in
high-performance computing, visualization and storage. SGI's
vision is to provide technology that enables the most significant
scientific and creative breakthroughs of the 21st century.
Whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense or enabling the transition from
analog to digital broadcasting, SGI is dedicated to addressing the
next class of challenges for scientific, engineering and creative
users.
* * *
Silicon Graphics, Inc.'s 6.5% Senior Secured Convertible Notes due
2009 carry Standard & Poor's CCC+ rating.
SOLUTIA INC: Completes Buy Out of Vitro Plan's 51% Quimica Stake
----------------------------------------------------------------
Solutia Inc. (OTC Bulletin Board: SOLUQ) completed its purchase of
Vitro Plan, S.A. de C.V.'s 51% stake in Vitro Plan's joint venture
with Solutia, known as Quimica M, S.A. de C.V. As a result,
Solutia is now the sole owner of Quimica M.
Additionally, Solutia and certain affiliates of Vitro Plan have
entered into agreements under which Solutia will supply those
Vitro Plan affiliates with their requirements for Saflex(R) and
Vanceva(R) PVB interlayer products. Both the purchase and supply
agreements became effective March 1, 2006.
With its buyout of Vitro Plan, Solutia is the sole owner and
operator of the Quimica M PVB interlayer plant in Puebla, Mexico.
These interlayers are used by major glass producers such as Vitro
to make laminated glass for use in automobiles and buildings.
"This acquisition reflects our commitment to meet the growing
global demand for our Saflex and Vanceva PVB interlayers. The
Puebla plant will now make PVB interlayers not only for Vitro Plan
and other valued Mexican customers, but also for our customers
around the world," Luc De Temmerman, president of Solutia's
Performance Products Division said. "The Puebla plant produces
world-class products from a very competitive cost position.
Therefore, we have plans to invest in new capacity as well as
additional capabilities, which will enable us to begin
manufacturing new products that are on the leading edge of
technological development."
Jeffry N. Quinn, chairman, president and CEO, added, "We are
relying on our Laminated Glazing Interlayers business to generate
significant profitable revenue growth for Solutia, both now and
well into the future. This acquisition, in combination with the
new PVB interlayer plant we are building in Suzhou, China,
demonstrates our ongoing commitment to realizing this potential."
The Puebla plant operates state-of-the-art PVB interlayer
manufacturing lines using the same Solutia technology used at
other Solutia production sites. In addition to the Puebla plant,
Solutia's LGI business manufactures PVB interlayers at Ghent,
Belgium; Sao Jose Dos Campos, Brazil; Springfield, Mass., USA; and
Trenton, Mich., USA. It also has a PVB finishing center,
distribution center and regional customer service center in
Singapore. The company's newest PVB interlayer plant, being
constructed in Suzhou, China, is scheduled to begin production in
mid 2007.
In addition to being the world's largest producer and seller of
PVB interlayers, Solutia is the global leader in PVB innovation,
quality and reliability. When laminated between layers of glass,
PVB interlayers greatly enhance the performance characteristics of
glass, providing benefits such as security, solar protection,
sound attenuation, safety and style. Laminated glass made with
Saflex PVB is used in applications for automobiles and buildings.
In addition to Saflex, Solutia manufactures Vanceva high-
performance interlayers, providing customers the world's most
innovative portfolio of laminated glass interlayers.
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. Solutia is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden,
Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin
Gump Strauss Hauer & Feld LLP represent the Official Committee of
Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey
Howard & Zukin Capital provides the Creditors' Committee with
financial advice.
STAR GAS: S&P Revises Rating's Watch Implication to Developing
--------------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch
implications for its 'CCC+' corporate credit rating on home
heating oil distributor Star Gas Partners L.P. to developing from
negative.
As of Dec. 31, 2005, the Stamford, Connecticut-based company had
$267 million of debt outstanding.
The rating action reflects the company's announced plan to
recapitalize through a proposed transaction with Kestrel Energy
Partners LLC, combined with the execution risk associated with a
successful completion of the recapitalization.
"The completion of the transaction as currently proposed could
result in a one-notch upgrade from the company's existing 'CCC+'
corporate credit rating," said Standard & Poor's credit analyst
John Kennedy.
"However, a failure to execute on the transaction, coupled with
continued customer attrition, could further debilitate Star's weak
credit profile and pressure ratings," said Mr. Kennedy.
The plan would include:
* up to $50 million in equity contributions from new general
partner Kestrel; and
* up to $100 million in debt reduction provided that
unitholders approve the transaction via the vote on
March 17, 2006.
Standard & Poor's expects to resolve the CreditWatch listing after
reviewing the final terms of an approved plan or, absent approval,
Star's ability to improve its financial profile.
SUMMIT METALS: SSG Completes Sale of Riverside & Monarch Units
--------------------------------------------------------------
Riverside Millwork Company, Inc., is the largest volume assembler
and specialty distributor of millwork products in New England.
The Company assembles and distributes hundreds of different
products including, but not limited to windows, doors, kitchens,
moldings, pine boards, stair components and exterior decking and
railing systems. Jenkins Manufacturing Company, Inc., dba Monarch
Windows and Doors is a manufacturer of medium to high end windows
and doors for the residential and light commercial markets focused
primarily in the Southeastern United States.
Riverside and Monarch were non-debtor subsidiaries of Summit
Metals, Inc. As a result of IRS tax liens imposed upon them as
subsidiaries of Summit, the Companies were operating under
forbearance agreements with their senior lenders.
SSG Capital Advisors, L.P., was engaged to sell Riverside and
Monarch, in order to provide liquidity to Summit's estate. SSG
assisted the Chapter 11 Trustee in the sale of the Companies'
assets to RHC Acquisition, Inc., and Monarch Windows and Doors,
LLC, a newly formed portfolio company of Morris Capital Management
LLC. The transactions closed in November and December, 2005,
respectively.
The SSG professionals who worked on the transaction were J. Scott
Victor, Managing Director, and Christopher Walsh, Vice President.
David Fries, Esq., at Cleveland, Waters & Bass P.A. served as
counsel to RHC Acquisition and Louann Smith, Esq., of Baker,
Donelson, Bearman, Caldwell & Berkowitz, PC, served as counsel to
Monarch Windows and Doors.
Headquartered in Mountainside, New Jersey, Summit Metals, Inc.,
filed for chapter 11 protection on Dec. 30, 1998 (Bankr. D. Del.
Case No. 98-2870). Joanne B. Wills, Esq., at Klehr, Harrison,
Harvey, represents the Debtor. Francis A. Monaco, Jr., was
appointed chapter 11 Trustee on Sept. 17, 2004. Joe Bodnar, Esq.,
at Monzack & Monaco serves as counsel to the Trustee. Todd
Schlitz, Esq., at Wolf, Block, Schorr & Solis-Cohen LLP represents
the Official Committee of Unsecured Creditors.
SUN HEALTHCARE: Lender Consents to Facility Buy-Sell-Lease Deal
---------------------------------------------------------------
Sun Healthcare Group, Inc., and its operating subsidiaries entered
into a Second Amendment to the Amended and Restated Loan and
Security Agreement with CapitalSource Finance LLC.
The Amendment modified certain of the financial covenants
contained in the Loan Agreement, and included CapitalSource
Finance's consent to a transaction pursuant to which the Company
purchased a long term care facility that the Company was leasing,
sold that facility to a third party, and leased the facility from
the new owner.
Great Falls Health Care Company, L.L.C., a Montana limited
liability company and Sun Healthcare subsidiary wants to:
-- purchase the facility commonly known as The Lodge, located
in Great Falls, Montana, from Great Falls Assisted Living,
L.L.C.;
-- subsequently sell the Lodge to Health Care Property
Investors, Inc., a Maryland corporation; and
-- lease the Lodge from HCPI.
A full-text copy of the Second Amendment to the Amended and
Restated Loan and Security Agreement is available at no charge at
http://ResearchArchives.com/t/s?615
Sun Healthcare Group, Inc., with executive offices located in
Irvine, California, owns SunBridge Healthcare Corporation and
other affiliated companies that operate long-term and postacute
care facilities in many states. In addition, the Sun Healthcare
Group family of companies provides therapy through SunDance
Rehabilitation Corporation, medical staffing through CareerStaff
Unlimited, Inc., and home care through SunPlus Home Health
Services, Inc.
The Company filed for chapter 11 protection on Oct. 14, 1999
(Bankr. D. Del. Case No. 99-03657). Mark D. Collins, Esq., and
Christina M. Houston, Esq., at Richards, Layton & Finger, P.A.,
represent the Debtor. The Court confirmed the Debtor's chapter 11
Plan on Feb. 6, 2002, and the Plan took effect on Feb. 28, 2002.
As of Dec. 31, 2005, the Company's equity deficit narrowed to
$2,895,000 from a $123,380,000 deficit at Dec. 31, 2004.
SUNNY DELIGHT: S&P Puts B Corp. Credit Rating on Negative Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' corporate credit
and bank loan ratings on Sunny Delight Beverages Company on
CreditWatch with negative implications, meaning the ratings could
be affirmed or lowered following the completion of Standard &
Poor's review. The Cincinnati, Ohio-based juice drink producer
had about $117 million of total debt outstanding at Sept. 30,
2005.
"The CreditWatch placement reflects the company's disclosure that
liquidity is extremely limited," said Standard & Poor's credit
analyst Alison Sullivan.
As of March 2, 2006, Sunny Delight was fully drawn on its $30
million revolver during its peak seasonal borrowing period, had
about $10 million of cash, and revolver borrowing is expected to
remain high until the second half of fiscal 2006. Standard &
Poor's believes the company will have limited cushion to meet its
debt amortization payments in 2006.
Standard & Poor's believes Sunny Delight will be challenged to
meet financial covenants for December 2005. Given the company's
weakened outlook, it is likely that quarterly covenant compliance
will also be a challenge in 2006.
Standard & Poor's will review Sunny Delight's operating and
financial plans with management and monitor the status of the
company's year-end covenant compliance as well as its ability to
comply with covenants in 2006 before resolving the CreditWatch
listing.
TELEWEST COMMS: NTL Merger Approval Cues S&P to Lower Rating to B+
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Telewest Communications Networks Ltd., a U.K.-
based cable telephony, TV, and Internet provider, to 'B+' from
'BB-'. The ratings were removed from CreditWatch with negative
implications, where they were placed on Oct. 3, 2005. The outlook
is positive.
At the same time, Standard & Poor's withdrew its 'BB' debt rating
on Telewest's GBP1.55 billion senior secured credit facilities.
The '1' recovery rating was also withdrawn.
The downgrade follows approval of the combination of Telewest
Global Inc. (Telewest's ultimate parent) with NTL Inc.
(B+/Positive/--) by both companies' shareholders.
"The downgrade principally reflects our opinion that the financial
risk profile of the combined NTL/Telewest group will be weaker
than that of Telewest alone," said Standard & Poor's credit
analyst Simon Redmond. "The business benefits of the combination
are not sufficient to result, at least immediately, in a rating
higher than that on NTL, a company roughly twice the size of
Telewest."
Despite the merged entity's potential to reduce its cost base and
improve cash flows over the medium term, its credit quality will
remain heavily constrained by the still-strong competitive
challenges the combined group faces, along with a leveraged
balance sheet.
The companies are to combine through a reverse takeover of NTL by
Telewest Global. The combined entity will have gross debt of
about o5.9 billion ($10.3 billion). The merged entity's lease-
adjusted gross debt to EBITDA will be high, at about 4.9x on a pro
forma basis, including Flextech--Telewest's TV content division.
The positive outlook is in line with that on NTL and reflects:
* Standard & Poor's view that credit improvement will depend
upon NTL's successful integration of Telewest; and
* subsequent improvement in its business risk profile.
An upgrade could result from:
* sustained operational improvement;
* steady growth of revenues; and
* free cash flow generation, leading to improved and
sustainable credit measures.
This might prompt a higher rating, although debt reduction from
asset sales alone would not necessarily result in an upgrade. A
sustained lack of revenue growth or deterioration in operating
performance or cash generation could result in an outlook revision
to stable.
THREE-FIVE: Wants to Employ Harding Shymanski as Accountants
------------------------------------------------------------
Three-Five Systems, Inc., asks the U.S. Bankruptcy Court for the
District of Arizona for permission to employ Harding Shymanski and
Company P.S.C. as its accountants.
Harding Shymanski will:
a. prepare the Debtor's annual federal, state and local income
tax and franchise tax returns that will include the
applicable state for the Debtor as well as any other income
tax returns that it is determined should be filed;
b. provide the return preparation and advisory services in
regards to potential amendments of the previously filed
federal, state and local income tax and franchise tax
returns and other previously filed returns should the need
arise in regards to the Debtor; and
c. provide other tax advisory services as such may be
requested by the Debtor.
Stephen T. Titzer, President of Harding Shymanski, tells the Court
that the Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Vice-President $265
Manager $155 - $190
Staff $90 - $115
Mr. Titzer assures the Court that the Firm is a "disinterested
person" as that term is applied in Sec 101(14) of the Bankruptcy
Code.
Headquartered in Tempe, Arizona, Three-Five Systems, Inc. --
http://tfsc.com/-- provides specialized electronics manufacturing
services to original equipment manufacturers. TFS offers a broad
range of engineering and manufacturing capabilities. The Company
filed for chapter 11 protection on Sept. 8, 2005 (Bankr. D. Ariz.
Case No. 05-17104). Thomas J. Salerno, Esq., at Squire, Sander &
Dempsey, LLP, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
$11,694,467 in total assets and $2,880,377 in total debts.
TIDEL TECHNOLOGIES: Balance Sheet Upside-Down by $1.2MM at Dec. 31
------------------------------------------------------------------
Tidel Technologies, Inc., disclosed its financial results for the
quarter ended Dec. 31, 2005, to the Securities and Exchange
Commission on Feb 21, 2006.
For the three months ended Dec. 31, 2005, the company incurred a
$1,168,795 net loss, compared to a $1,155,564 net loss for the
same period in 2004.
The company recorded a working capital of $526,856 compared with
working capital of $3,731,219 at Sept. 30, 2005. The decrease in
working capital was primarily a result of the reclassification of
notes payable to Laurus Master Fund, Ltd., from long term to
current maturities as of December 31, 2005.
At Dec. 31, 2005, Tidel's balance sheet showed $17,453,593 in
total assets and total liabilities of $16,219,292. The Company
had an accumulated deficit of $30,074,605 as of Dec. 31, 2005.
A full-text copy of Tidel Technologies' financial statements for
the quarter ended Dec. 31, 2005, is available for free at
http://researcharchives.com/t/s?61b
Going Concern
Hein & Associates LLP expressed substantial doubt about Tidel
Technologies, Inc.'s ability to continue as a going concern after
it audited the Company's financial statements for the fiscal years
ended Sept. 30, 2005 and 2004. The auditing firm pointed to the
Company's recurring losses from operations and accumulated deficit
as of Sept. 30, 2005.
Headquarted in Carrollton, Texas, Tidel Technologies, Inc. (Other
OTC: ATMS.PK) -- http://www.tidel.com/-- manufacturers cash
security equipment designed for specialty retail marketers.
TRUMP ENTERTAINMENT: Incurs $26.1 Mil. Net Loss in Fourth Quarter
-----------------------------------------------------------------
Trump Entertainment Resorts, Inc. (NASDAQ NMS: TRMP) disclosed its
operating results for the fourth quarter ended Dec. 31, 2005.
The Company's loss from continuing operations was $26.1 million
for the quarter ended Dec. 31, 2005, compared to the
$108.9 million loss of its Predecessor Company for the quarter
ended Dec. 31, 2004. Net loss, including the results of our
discontinued operations, was $22.1 million in the fourth quarter
of 2005 versus a net loss of $99.8 million in the fourth quarter
of 2004.
For the period from May 20, 2005 -- the effective date of the
Company's reorganization -- through Dec. 31, 2005, loss from
continuing operations was $36.3 million. Net loss, including the
results of its discontinued operations was $26.5 million.
Donald J. Trump, Chairman of the Board commented, "2005 was a year
of tremendous accomplishment for Trump Entertainment Resorts. The
reorganization in May, which resulted in the Company achieving a
much more favorable capital structure, was the catalyst for a
series of significant events that have us excited about the
future. We began by restructuring the management team with
several proven leaders in the gaming industry. Through this team,
we are implementing a series of operational changes at our
properties. We completed the sale of Trump Indiana, which
together with our available credit facilities, has allowed us to
initiate an aggressive capital plan to improve and expand our
facilities. I am very excited about the Company's prospects in
2006 and beyond."
As a result of the Company's reorganization effective in May 2005,
the comparability of its operating results from continuing
operations for the fourth quarter of 2005 versus fourth quarter
2004 were impacted by these items:
-- overall interest expense decreased by $25.0 million from
$57.2 million to $32.2 million due to the decrease in debt
levels and interest rates;
-- depreciation and amortization decreased by $8.1 million from
the revaluation of its assets on May 20, 2005;
-- fourth quarter 2005 loss from continuing operations includes
a minority interest benefit of $6.5 million;
-- the provision for income taxes includes a non cash charge-
in-lieu of income taxes of $8.7 million.
The Company reported adjusted EBITDA of $27.5 million on net
revenues of $234.7 million in the fourth quarter of 2005 compared
to adjusted EBITDA of $41.0 million in 2004 on net revenues of
$236.7 million.
Adjusted EBITDA is EBITDA excluding reorganization expenses and
related costs, development costs, severance costs and property tax
reserve. EBITDA and Adjusted EBITDA are not Generally Accepted
Accounting Principles measurements, but are commonly used in the
gaming industry as measures of performance and as a basis for
valuation of gaming companies.
Mark Juliano, the Company's Chief Operating Officer commented,
"Our fourth quarter financial statements continue to reflect
matters associated with the Company's reorganization and as a
result, generally, are not comparable to prior periods. While
revenues decreased in the fourth quarter we are beginning to see
the impact of the change in our marketing strategy as promotional
allowances decreased by $10.7 million."
"While these changes have negatively impacted revenue and
profitability in the short term, they are designed to enable us to
realize margin improvements going forward. We began the process
of making the necessary operating and cultural changes at our
properties with the expectation that it would take approximately
18 months before we would see the full benefits."
"I believe we are on track to meet this timeframe with the changes
we have implemented, in conjunction with the additional changes we
have planned. To date, we have streamlined the management
structure at our properties and have begun the process of
implementing a renewed focus on how we spend our marketing
dollars."
"In 2006, we will continue to modify and refine our marketing
efforts and will implement a data warehouse, which will allow us
to build programs around our most profitable customers, we will
implement further operating efficiencies through the introduction
of centralized scheduling and yield management systems. As part
of our renewed emphasis on customer service, we will also initiate
customer courtesy and leadership training programs at our three
casinos."
The Company indicated that fourth quarter results are also
impacted by costs associated with the changes made to streamline
the management structure at the properties and complete the
management team at the corporate office, increased utilities costs
and costs connected with the Company's development efforts in
Philadelphia.
James B. Perry, Chief Executive Officer and President added, "With
the sale of Trump Indiana closing in December 2005, we had in
excess of $228.5 million in cash and cash equivalents at Dec. 31,
2005, and had $200 million available under the revolving credit
portion of our credit facility and $150 million available under
the delayed draw term loan."
"In December, we announced the first phase of our capital
improvement plan to spend some $110 million on the reinvigoration
of our properties. This plan will include projects at all three
of our properties, including improved restaurant and retail
venues, more exciting casino floors, improved meeting and
convention space and rethemed entertainment areas, as well as
completing the renovation of all our rooms and suites."
"In addition, we plan to commence construction of a new tower at
the Taj Mahal in June 2006, which should enable us to maximize
operating results by taking advantage of existing capacity on the
gaming floor and in our restaurant and convention facilities."
Mr. Perry concluded, "In addition, we continue to look for growth
opportunities beyond Atlantic City, both domestic and
internationally, that would enable us to lever the Trump brand.
We are excited about the prospects of our proposed casino in
Philadelphia and are preparing for the first set of public
hearings to be held in April 2006."
"We are also actively pursuing a potential venture in Johnston,
Rhode Island, near Providence. While this project would be several
years in the future, we believe it could prove to be a great
growth opportunity for Trump Entertainment Resorts if expanded
gaming is approved in Rhode Island. Additionally, we are
continuing to look for opportunities that will allow us to
introduce the Trump brand to other gaming markets and diversify
our cash flows."
2006 Outlook
The Company expects to begin to see year over year gains in
revenues towards the end of the first quarter as a result of the
initial operational and marketing changes that have been
implemented. The Company expects to see improvements in EBITDA
from these changes beginning sometime in the second quarter.
The Company expects stock based compensation expense for 2006 to
be approximately $5 million. Stock based compensation is a
non-cash operating expense.
Depreciation expense should be approximately $75 million for the
year ended Dec. 31, 2006.
Interest expense for 2006 will be approximately $120 million to
$125 million.
In 2006, the Company expects to record a total provision for
income taxes of $9 million to $11 million including a non-cash
charge-in-lieu of taxes of $4 million to $5 million.
Capital expenditures are expected to be:
Retheming and updating capital $75 to $85 million
Taj Mahal expansion $25 to $30 million
Maintenance and technology $55 to $65 million
--------------------
2006 estimated range $155 to $180 million
====================
Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and
operates four properties and manages one property under the Trump
brand name. The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring. When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts. The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005.
* * *
As reported in the Troubled Company Reporter on Nov. 10, 2005,
Moody's Investors Service affirmed these ratings on Trump
Entertainment Resorts, Inc., and said the outlook is stable:
-- $200 million senior secured revolver due 2010 -- B2;
-- $150 million senior secured term loan due 2012 -- B2;
-- $150 million senior secured delayed draw term loan due
2012 -- B2;
-- $1.25 billion second lien senior secured notes due 2015 --
Caa1;
-- Speculative grade liquidity rating -- SGL-3; and
-- Corporate family rating -- B3.
UNITED WOOD: Court Conditionally Approves Disclosure Statement
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Oregon conditionally
approved United Wood Products Company's disclosure statement
explaining its chapter 11 plan of reorganization.
The Court set until Mar. 31, 2006, as the deadline for objections
to the disclosure statement or plan to be submitted. The Court
also set a hearing on Apr. 10, 2006, to give final approval on the
Debtor's disclosure statement as well as confirmation of the plan.
Overview of the Plan
As reported in the Troubled Company Reporter on Feb. 10, 2006, the
Debtor's Plan will be funded using settlement proceeds or
judgments recovered in litigation against Kimberly-Clark
Worldwide, Inc. and Tri-State Construction, Inc.
Kimberly-Clark Litigation
The Debtor's litigation against Kimberly-Clark stems from the
wrongful termination of a Services and Supply Agreement. The
Debtor tells the Court that Kimberly-Clark was its sole customer
and the wrongful termination caused it to file for bankruptcy.
Kimberly-Clark had initiated a lawsuit claiming $500,000 in
damages but it asserted a $57 million counterclaim. The case is
pending in the Superior Court of the State of Washington,
Snohomish County, titled Kimberly-Clark Worldwide, Inc. v. United
Wood Products Company (Case No. 05-2-07978-8).
Tri-State Litigation
The conduct of Tri-State Construction, Inc., and the City of
Everett, Washington, was also another reason for its financial
distress, the Debtor explains. The Debtor says it asserted a
$1 million claim against both Tri-State and the City of Everett.
The Debtor discloses that the City of Everett has been dismissed
from the case but the case proceeds against Tri-State. The case
is pending in the U.S. District Court, Western District of
Washington at Seattle, titled United Wood Products Company v.
Tri-Sate Construction, Inc., and City of Everett, Washington
(Case No. C04-20527).
Treatment of Claims
Under the plan, Administrative Claims and Priority Tax Claims will
be paid in full.
The Debtor tells the Court that Sterling Savings Bank's holds a
security interest in the Debtor's litigation claims against
Kimberly-Clark to secure payment of approximately $1,485,000.
Sterling's secured claim will increase by $500,000 if Kimberly-
Clark draws on a letter of credit issued by Sterling. Pursuant to
the plan, Sterling will receive a Secured Non-Recourse Note in a
principal amount equal to the allowed amount of its secured claim.
A full-text copy of the three-page Secured Non-Recourse Note the
Debtor will deliver to Sterling Savings Bank is available for free
at http://ResearchArchives.com/t/s?528
The Debtor says that the collateral securing the claim of
Commercial Equipment Lease Corp. will be returned to Commercial
Equipment.
Holders of Priority Unsecured Claims will receive a Secured Non-
Recourse Note conforming substantially to the principal amount
equal to the amount of the allowed claims.
Holders of General Unsecured Claims will receive a promissory note
secured by:
-- a first-security interest in the Debtor's interest in the
Tri-State lawsuit; and
-- a second-security interest in the Debtor's interest in the
Kimberly-Clark lawsuit.
The face amount of the note will be an amount equal to 100% of the
allowed claims. The Debtor relates that prior to the effective
date, a plan agent will be designated and that agent will
distribute to holders of general unsecured claims a pro rata share
from the proceeds of the two lawsuits less the payment to secured
claims.
Equity Security Interests will remain unaltered by the plan.
Headquartered in Portland, Oregon, United Wood Products Company,
aka United Oil Company, was a waste wood procession facility that
sold waste wood to Kimberly-Clark Worldwide, Inc. for burning in
Kimberly-Clark's electricity generating boiler. The Debtor filed
for chapter 11 protection on Sept. 19, 2005 (Bankr. D. Ore. Case
No. 05-41285). John G. Crawford, Jr., Esq., at Schwabe,
Williamson & Wyatt represents the Debtor in its restructuring
efforts. As of Sept. 30, 2005, the Debtor listed total assets of
$58,622,000 and total debts of $3,181,125.
WOLF DEN: Involuntary Chapter 11 Case Summary
---------------------------------------------
Alleged Debtor: Wolf Den, LLC
LAN Executive Center
One Corporate Road
Enfield, Connecticut 06082
Involuntary Petition Date: March 3, 2006
Case Number: 06-20126
Chapter: 11
Court: District of Connecticut (Hartford)
Judge: Robert L. Krechevsky
Petitioners' Counsel: Anthony S. Novak, Esq.
Chorches & Novak, P.C.
1331 Silas Deane Highway, Suite 202
Wethersfield, Connecticut 06109
Tel: (860) 257-1980
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Structures Canatruss, Inc. Construction $244,618
1760 Setlakwe Thetford Mines Services
Quebec, G6G 8B2, Canada
Michael Finnigan Electrical Construction $239,142
Contracting, Inc. Services and
130 Commerce Way Materials
South Windsor, CT 06074
Richard H. Seidman, Esq. Legal Services $75,000
10 Crossroads Plaza
West Hartford, CT 06117
St. Paul Travelers Indemnity Co. Insurance Services $17,510
c/o Lathrop & Gage, DC
Franklin Square, Suite 1050E
1300 Eye Street, NW
Washington, DC 20005
Kostin, Ruffkess & Co. LLC Accounting Services $6,500
c/o Larry Marziale
76 Batterson Park Road
Farmington, CT 06034
List of Additional Creditors that the Debtor did not pay:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Continental Casualty Company Project $325,000
Cook County, Illinois Management
c/o Hinshaw & Culbertson, LLP Fee
Attn: Bradford Carver, Esq.
Jessica Mooney, Esq.
One International Place
Boston, MA 02110
Patricia Gips Real Estate $113,712
dba Patricia Gips Associates Commissions
13 Tilden Commons Drive
Marina Bay
North Quincy, MA 02171
World Hartford, LLC Unreimbursed $95,435
One Corporate Road Costs and
Ensfield, CT 06082 Expenses
WORLD HEALTH: Taps King & Spalding as Lead Bankruptcy Counsel
-------------------------------------------------------------
World Health Alternatives, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for permission
to retain King & Spalding LLP as their lead bankruptcy counsel.
King & Spalding will:
a) advise the Debtors with respect to their powers and duties
as debtors-in-possession in the continued management and
operation of their businesses;
b) take all necessary action to protect and preserve the
Debtors' estates, including the presecution of actions on
the Debtors' behalf, the defense of any actions commenced
against the Debtors, the negotiation of disputes in which
the Debtors are involved, and the preparation of objections
to claims filed against the Debtors' estates;
c) prepare on behalf of the Debtors all necessary motions,
applications, answers, orders, reports, and other papers in
connection with the administration of the Debtors' estates;
d) negotiate and prepare on behalf of the Debtors a plan of
reorganization, a disclosure statement, and all related
documents;
e) negotiate and prepare documents relating to the disposition
of assets, as requested by the Debtors;
f) advise the Debtors, where appropriate, with respect to
federal and state regulatory matters;
g) advise the Debtors on finance and finance-related matters
and transactions and matter relating to the sale of the
Debtors' assets; and
h) perform any legal services for the Debtors as may be
necessary and appropriate.
Sarah Robinson Borders, Esq., a member at King & Spalding,
discloses the Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Attorneys $215 - $750
Clerks & Legal Assistants $90 - $250
The Firm received a $250,000 prepetition retainer, $90,000 of
which continues to be held as a "last bill" retainer subject to
the future direction and orders of the Court.
To the best of the Debtors' knowledge, the Firm represents no
interest materially adverse to the Debtors and their estates.
Headquartered in Pittsburgh, Pennsylvania, World Health
Alternatives, Inc. -- http://www.whstaff.com/-- is a premier
human resource firm offering specialized healthcare personnel for
staffing and consulting needs in the healthcare industry. The
company and six of its affiliates filed for chapter 11 protection
on Feb. 20, 2006 (Bankr. D. Del. Case Nos. 06-10162 to 06-10168).
Stephen M. Miller, Esq., at Morris, James, Hitchens & Williams
LLP, represents the Debtors in their restructuring efforts. When
the Debtors filed for protection from their creditors, they
estimated assets and debts between $50 million and $100 million.
W.R. GRACE: Wants $250-Mil. DIP Facility Extended for 2 More Years
------------------------------------------------------------------
W.R. Grace and its debtor-affiliates want its Postpetition Credit
Agreement extended for another two years.
James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., in Wilmington, Delaware, relates that, as of
Jan. 31, 2006, approximately $33,500,000 in letters of credit
are outstanding under a Postpetition Loan and Security Agreement
among the Debtors, Bank of America, N.A., and other financial
institutions, as lenders.
Under the Postpetition Credit Agreement, the Debtors are
entitled to borrow up to $250,000,000, including up to
$150,000,000 in letters of credit. Although there are currently
no drawings outstanding aside from the Outstanding L/Cs, the
Debtors have determined that the Credit Agreement needs to be
extended at the existing Commitment from the Lenders, to:
(1) continue to support general trade initiatives, as well
as risk management and capital investment initiatives;
(2) provide liquidity protection in the face of significant
economic uncertainty;
(3) support strategic business initiatives that are in the
best interest of the Debtors and their stakeholders; and
(4) manage significant contingencies related to the Debtors'
operations.
Specific liquidity contingencies include:
-- the likelihood of significant contributions to U.S.
qualified pension plans to satisfy the funding requirements
of ERISA;
-- possible settlements of environmental, tax and other
disputes as may be proposed by the Debtors, and approved
for funding by the Bankruptcy Court and creditors in
advance of a confirmed plan of reorganization; and
-- attorneys' fees and expenses in connection with those
disputes.
The Debtors require a liquidity facility for maintenance of
existing and issuance of additional L/Cs in the ordinary course
of their business, including trade-related performance bonds,
support for commodity and foreign currency risk management
instruments, and support of other insurance, environmental and
general trade and corporate-related matters.
However, according to Mr. O'Neill, the necessity, timing and
advisability of expenditures to address the contingencies as well
as to fund the strategic opportunities cannot be predicted at
present time.
The Debtors conclude that maintaining sufficient available credit
will give them the flexibility to preserve, maintain, and enhance
their going concern value, which is of the utmost significance
and importance to a successful reorganization.
Because of the greater certainty of a binding credit commitment,
and because the interest rates and costs of maintaining the L/C
Facility and the available terms are favorable when compared with
recent comparable capital markets transactions, the Debtors
insist that maintaining the L/C at its current level is more
prudent and cost-effective.
Mr. O'Neill further attests that decreasing the size of the L/C
Facility at this juncture would create significant uncertainty as
to the Debtors' ability to manage the contingencies and fund
those initiatives. Moreover, the Debtors would face the risk of
less favorable terms and more adverse market conditions if they
had to go into the credit markets in the future for additional
financing.
Because the Postpetition Credit Agreement will terminate by its
terms on April 1, 2006, the Debtors entered into "good faith"
discussions with BofA to provide for, among other things:
(1) an extension of the Credit Agreement's termination date
through the earlier of the Debtors' emergence from
bankruptcy or April 1, 2008;
(2) an adjustment of certain fees payable to BofA and the
Lenders; and
(3) a modification of certain financial and other covenants
and representations and warranties contained in the Credit
Agreement.
Under the Amendment, upfront fees are lower than those paid under
the Postpetition Credit Agreement because of the two-year
extension, and ongoing fees and interest rates are at or below
comparable market rates. In addition, by extending the Credit
Agreement, the Debtors will avoid substantial expenses attendant
with negotiating a new credit agreement with a new lender.
The Debtors ask the Court to approve the Amendment pursuant to
Section 364 of the Bankruptcy Code.
In the alternative, if the Court is unable to approve the
Amendment prior to April 1, 2006, the Debtors, with BofA's
consent, seek a 60-day extension of the Postpetition Credit
Agreement through May 31, 2006, pending Court approval of the
Amendment.
The Debtors negotiated the Interim Extension to avoid disruption
of their business operations that would result from the need to
cash collateralize the Outstanding L/Cs or face their termination
on April 1. The Debtors have also agreed to pay BofA a fee of
not more than $100,000 for the extension.
"Given the Debtors' current financial condition and capital
structure, the Debtors require an extension of their financing
for continued financial flexibility to manage significant
contingencies related to their past and present operations and to
support general trade, risk management and strategic business
initiatives, as well as for liquidity protection in the event of
any further economic downturn," Mr. O'Neill tells Judge
Fitzgerald.
A working capital facility of the type and magnitude needed
cannot be obtained on an unsecured basis, Mr. O'Neill asserts.
As was found in the first amended order modifying the
Postpetition Credit Agreement, the potential sources of a
$250,000,000 L/C facility for the Debtors, obtainable on
reasonable terms, were very limited.
The Amendment, Mr. O'Neill justifies, is clearly for the benefit
of the Debtors' estates and creditors as means of furthering the
Debtors' relationships with their vendors, and of preserving and
enhancing the Debtors' operations. The continued availability of
credit under the Amendment and the ongoing availability of L/Cs
should give the Debtors' vendors and suppliers the necessary
confidence to continue ongoing relationships with the Debtors,
including the extension of credit terms for the payment of goods
and services, and be viewed favorably by the Debtors' employees
and customers, and all parties-in-interest.
Furthermore, Mr. O'Neil contends that it is essential that the
Debtors immediately receive an extension of the Postpetition
Credit Agreement to ensure the preservation of the Outstanding
L/Cs to prevent defaults under related agreements and the
irreparable harm caused by the damage to relationships with
vendors and the loss of insurance coverage, which would be caused
by those defaults.
Headquartered in Columbia, Maryland, W.R. Grace & Co. --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally. The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at
Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts. The Debtors hired
Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors. The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice. David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., and
Nathan D. Finch, Esq., at Caplin & Drysdalerepresent the
Official Committee of Asbestos Personal Injury Claimants.
The Asbestos Committee of Property Damage Claimants tapped
Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin
Sumberg Baena Price & Axelrod LLP to represent it. Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.
XTREME COMPANIES: Acquires Challenger Offshore for $4.3 Million
---------------------------------------------------------------
Xtreme Companies, Inc. (OTC Bulletin Board: XTME) acquired 100% of
the outstanding shares of semi-custom boat manufacturer Marine
Holdings, Inc., dba Challenger Offshore. In exchange for
$4.3 million in cash, Xtreme received the Challenger business and
assets including its gross order backlog of $1.6 million, boat
inventory, boat molds and real estate which includes Challenger's
65,000 square ft. boat manufacturing facility located on 12 acres
in Washington, Missouri. The transaction was financed with
conventional loans provided by a Missouri-based regional bank.
Xtreme CEO Kevin Ryan stated, "This is a watershed moment in
Xtreme's short history. By acquiring Challenger, we have secured
one of the truly up and coming brands in the commercial marine
craft business today. One year ago, we commenced our partnership
with Challenger by procuring the exclusive distribution rights to
their entire marine line in exchange for stock, operational and
expansion capital, and personnel. The relationship has proven to
be extremely successful and rewarding for both parties. I believe
we have delivered a tremendous opportunity for our investors and
shareholders, that should produce significant short-term and long-
term benefits."
Ron DiBartolo former President of Marine Holdings, Inc.,
commented, "Over the past twelve months, the Xtreme - Challenger
partnership has blossomed and is now I believe poised to become a
significant player in the commercial marine craft industry. Some
of our recent achievements include: the addition of several key
distributors and dealers, significant increase in sales orders,
increases in production capacity, improvements in production
inefficiencies and the continued success of our high performance
racing boats on the national circuit including a victory at the
high profile Florida Grand Prix, which was broadcast on Fox
Sports." Mr. DiBartolo added, "The foundation for the Company has
been laid and I believe the future is a bright one."
Challenger also holds the exclusive rights to a revolutionary hull
technology for boats 40 feet in length and under. The 'DDC' hull
patent is the brain child of legendary designer Harry Schoell.
The DDC design enables Challenger to produce extremely efficient
hull shapes that out can perform its competitors by providing a
stable and safe, high speed platform. The Challenger DDC hulls
possesses superior capabilities in rough water and its design,
combined with modern construction techniques enables boats to run
faster in higher sea states.
About Marine Holdings Inc.
Marine Holdings, Inc., doing business as Challenger Offshore, --
http://www.challengeroffshore.com/ -- manufactures semi-custom
fiberglass boats of 19' to 97' in length, which include leisure,
performance, fishing and motor yachts. MHI is best known for
their products that compete directly with the industry's largest
boat producers. Internationally known race driver and designer
Don Aronow, credited as being the architect of the performance
boat industry, along with Harry Schoell, world-renowned marine
engineer, designed and created some of the hull technologies today
used by Challenger Offshore. Mr. Aronow has also been credited
with creating companies such as Cigarette, Donzi, Formula, Apache
and Magnum.
About Xtreme Companies Inc.
Xtreme Companies, Inc. -- http://www.xtremecos.com/-- is engaged
in manufacturing and marketing of mission-specific Fire-Rescue and
Patrol boats used in emergency, surveillance and defense
deployments. The boats have been marketed and sold directly to
fire and police departments, the U.S. Military and coastal port
authorities throughout the United States.
At Sept. 30, 2005, Xtreme Companies, Inc.'s balance sheet showed a
$1,437,064 stockholders' deficit compared to an $894,853 deficit
at Dec. 31, 2004.
* Pachulski Stang Changes Firm Name & Relocates Wilmington Office
-----------------------------------------------------------------
Laura Davis Jones, Esq., advises that the law firm of Pachulski,
Stang, Ziehl, Young, Jones & Weintraub LLP changed from a
professional corporation to a limited liability partnership
effective March 1, 2006. Additionally, her Firm's Wilmington
office relocated to:
Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705
* Proskauer Rose Names Andrew S. Robins as Partner in Fla. Office
-----------------------------------------------------------------
Proskauer Rose LLP, an international law firm with more than 700
lawyers in the United States and Europe, reported that Andrew S.
Robins, Esq., one of the nation's leading hotel, resort and
condominium lawyers, has joined the firm's Real Estate and
Lodging & Gaming practice groups as a partner.
Coming with Mr. Robins are Susan K. Robin, Esq., and Michelle Oms,
Esq., who join as senior counsel, and two associates. They will
be based in the firm's Boca Raton office.
The addition of Mr. Robins' practice to Proskauer is the latest
move in the continued expansion of the firm's Boca Raton office.
In October, prominent estate and tax planning attorney David Pratt
joined the firm as partner, along with senior counsel Elaine
Bucher and a number of associates.
"We are excited to welcome Andy and his group to Proskauer and
look forward to integrating their formidable practice into our
international platform," said Albert Gortz, head of Proskauer's
Boca Raton office. "Their addition is an important part of our
ongoing strategy to continue to grow both the Boca Raton office
and our overall transactional practices."
Mr. Robins has extensive experience in finance and development in
the real estate and hospitality industries in the United States,
the Caribbean and Latin America and is one of the nation's
foremost experts in the areas of hotels, condominiums, mixed-use
developments, timeshares, fractional interests, and destination
clubs.
Mr. Robins has worked with hotel operators, franchisors and
developers in real estate, community development, and complex
resort and mixed-use development matters, helping them to maintain
brand standards, balance and reconcile the interests of multiple
stakeholders, and comply with applicable securities laws. Mr.
Robins has represented InterContinental, Hyatt, Hilton, Sonesta,
Rosewood, Wyndham, Carlson, Kimpton, Morgans Hotel Group, Donald
Trump, RAL, AIG, WCI Communities, The Blackstone Group and The
Patrinely Group.
"Andy's practice brings a number of synergies to our growing
Lodging & Gaming and Real Estate groups, giving us an even wider
and deeper footprint in the North and Latin American markets,"
said Jeffrey A. Horwitz, co-head of Proskauer's Lodging & Gaming
Practice Group. "Working with our U.S. and international
attorneys, his transactional, finance, development and operational
experience will further enhance the firm's capabilities in the
residential and commercial real estate sectors as well as our
overall corporate work."
Prior to joining Proskauer Rose, Mr. Robins was a partner at
Gunster, Yoakley & Stewart, P.A. in Fort Lauderdale, where he
chaired the firm's Real Estate Department and its Leisure and
Resorts Group. Mr. Robins' prior experience includes work in the
office of the General Counsel of the Department of Housing
Preservation and Development of the City of New York. Mr. Robins
is a member of the Urban Land Institute and a founding member of
the Center for Caribbean and Latin American Development. A
graduate of the State University of New York at Binghamton, Mr.
Robins earned a law degree from Syracuse University School of Law.
Ms. Robin practices in the areas of real estate, hotel and resort
law and commercial leasing. Ms. Robin is a graduate of the
University of Miami School of Law and the University of Colorado.
Both were formerly at Gunster, Yoakley & Stewart. Ms. Oms
practices in the areas of hotel, resort and mixed-use development,
residential and hotel ownership, and hotel operations. Ms. Oms is
a graduate of American University, Washington College of Law, and
the University of Miami, where she received a Master's of Law
Degree in Real Property Development, and Catholic University of
America.
Proskauer's Boca Raton office brings clients the in-depth
resources of an international law firm combined with the Florida
market experience and efficiencies of a locally-based firm.
Proskauer's Boca Raton office and its over 30 attorneys work in a
range of practices - personal planning, corporate and securities,
labor & employment, litigation, aviation, healthcare, real estate,
hospitality, employee benefits and executive compensation - that
are integrated into the firm's national and international
practices.
The firm's Lodging & Gaming Practice Group involves Proskauer's
corporate, real estate, labor, litigation and dispute resolution,
environmental, employee benefits, tax, bankruptcy and intellectual
property practices. A true cross-border practice, the group's
recent transactions include: Kerzner's acquisition of its property
in The Maldives; work for Swissotels in Quito and Lima; mixed-use
developments in Kiev and Tokyo; advising Macquarie, an Australian
bank, on issues relating to a gaming facility in Cambodia; and
acquisitions in Paris.
Proskauer's Real Estate Department advises clients in the diverse
and complex legal aspects pertaining to commercial real estate
including: sales and acquisitions of real property and equity and
debt interests; mortgage and mezzanine loan originations and other
real estate finance vehicles; credit leases, ground leases and
other net leases; office and retail leases; joint ventures and
equity funds; equity and debt securitizations; property
development and construction; and brokerage and management
arrangements. The firm's clients include property owners,
developers, mortgage and mezzanine lenders, debt and equity
investors, tenants, brokers and managers.
Founded in 1875, Proskauer Rose -- http://www.proskauer.com/-- is
one of the nation's largest law firms, providing a wide variety of
legal services to clients throughout the United States and around
the world from offices in New York, Los Angeles, Washington, D.C.,
Boston, Boca Raton, Newark, New Orleans and Paris. The firm has
wide experience in all areas of practice important to businesses
and individuals, including corporate finance, mergers and
acquisitions, general commercial litigation, private equity and
fund formation, patent and intellectual property litigation and
prosecution, labor and employment law, real estate transactions,
bankruptcy and reorganizations, trusts and estates, and taxation.
Its clients span industries including chemicals, entertainment,
financial services, health care, hospitality, information
technology, insurance, internet, manufacturing, media and
communications, pharmaceuticals, real estate investment, sports,
and transportation.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Abraxas Petro ABP (27) 120 (4)
Accentia Biophar ABPI (9) 39 (19)
AFC Enterprises AFCE (44) 216 53
Alaska Comm Sys ALSK (9) 589 49
Alliance Imaging AIQ (43) 643 42
AMR Corp. AMR (729) 29,436 (1,882)
Atherogenics Inc. AGIX (98) 213 190
Bally Total Fitn BFT (1,463) 486 (442)
Biomarin Pharmac BMRN (77) 195 (29)
Blount International BLT (145) 455 112
CableVision System CVC (2,486) 10,204 (1,881)
CCC Information CCCG (95) 112 34
Centennial Comm CYCL (488) 1,511 69
Cenveo Inc CVO (12) 1,146 127
Choice Hotels CHH (167) 265 (57)
Cincinnati Bell CBB (710) 1,863 16
Clorox Co. CLX (528) 3,567 (205)
Columbia Laborat CBRX (13) 17 10
Compass Minerals CMP (79) 750 195
Crown Holdings I CCK (236) 6,545 (98)
Crown Media HL CRWN (64) 1,250 (125)
Deluxe Corp DLX (82) 1,426 (277)
Denny's Corporation DENN (265) 513 (84)
Domino's Pizza DPZ (553) 414 3
DOV Pharmaceutic DOVP (3) 116 94
Echostar Comm DISH (785) 7,533 321
Emeritus Corp. ESC (134) 713 (62)
Encysive Pharm ENCY (11) 147 102
Foster Wheeler FWLT (375) 1,936 (186)
Gencorp Inc. GY (73) 1,057 9
Graftech International GTI (13) 1,026 283
Guilford Pharm GLFD (20) 136 60
Hercules Inc. HPC (13) 2,548 330
Hollinger Int'l HLR (177) 1,001 (396)
I2 Technologies ITWO (71) 202 (34)
ICOS Corp ICOS (67) 232 141
IMAX Corp IMAX (34) 245 30
Immersion Corp. IMMR (15) 46 29
Indevus Pharma IDEV (126) 100 65
Intermune Inc. ITMN (30) 194 109
Investools Inc. IED (20) 64 (46)
Koppers Holdings KOP (186) 570 120
Kulicke & Soffa KLIC (3) 440 217
Level 3 Comm. Inc. LVLT (632) 7,580 502
Ligand Pharm LGND (96) 306 (99)
Lodgenet Entertainment LNET (69) 283 22
Maxxam Inc. MXM (677) 1,044 114
Maytag Corp. MYG (187) 2,954 150
McDermott Int'l MDR (53) 1,627 244
McMoran Exploration MMR (58) 408 67
NPS Pharm Inc. NPSP (98) 331 234
Omnova Solutions OMN (13) 355 46
ON Semiconductor ONNN (276) 1,148 228
Quality Distribu QLTY (26) 377 20
Quest Res. Corp. QRES (73) 247 (61)
Qwest Communication Q (3,217) 21,497 (1,071)
RH Donnelley RHD (292) 3,877 (79)
Revlon Inc. REV (1,169) 980 86
Riviera Holdings RIV (28) 221 6
Rural/Metro Corp. RURL (89) 310 54
Rural Cellular RCCC (651) 1,431 130
Sepracor Inc. SEPR (165) 1,275 879
St. John Knits Inc. SJKI (52) 213 80
Tivo Inc. TIVO (9) 163 36
USG Corp. USG (302) 6,142 1,579
Unigene Labs Inc. UGNE (15) 14 (9)
Unisys Corp UIS (33) 4,029 339
Vector Group Ltd. VGR (38) 536 168
Vertrue Inc. VTRU (30) 446 (82)
Visteon Corp. VC (1,430) 8,823 404
Weight Watchers WTW (81) 836 (43)
Worldspace Inc. WRSP (1,475) 765 249
WR Grace & Co. GRA (559) 3,517 876
XM Satellite XMSR (189) 2,223 356
*********
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.
*** End of Transmission ***