/raid1/www/Hosts/bankrupt/TCR_Public/060531.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, May 31, 2006, Vol. 10, No. 128
Headlines
360 GLOBAL: Defaults on $20MM Promissory Note Issued to Met Life
ABB LUMMUS: Gets Final Court Okay on $320 Million DIP Financing
ABB LUMMUS: Bankruptcy Services Okayed as Claims & Balloting Agent
ABB LUMMUS: Withdraws Request to Employ FTI Consulting as Advisor
ACCESS WORLDWIDE: Posts $1.2 Million Net Loss in First Quarter
ACURA PHARMACEUTICALS: Incurs $4.2 Million Net Loss in 1st Quarter
ADELPHIA COMMS: Dispute Ensues Over Bank Lenders Distribution
ADELPHIA: Barbs on Multi-Mil. Suit with Devon Trustee Continues
ADELPHIA COMMS: TCR Sports Wants FCC to Condition Sale to Comcast
ADVANCED COMMS: Posts $284,621 Net Loss in 2006 3rd Fiscal Quarter
AH-DH APARTMENTS: Hires McGuire Craddock as Bankruptcy Counsel
AH-DH APARTMENTS: DB Holdings Taps PronskePatel as Bankr. Counsel
AIR CANADA: Settles Misconduct Litigation with Westjet Airlines
ALLIED HOLDINGS: Court Approves 4th Amendment to DIP Loan Pact
ALLIED HOLDINGS: Inks Amended Delivery Agreement with Honda
AMERICAN ACHIEVEMENT: Restates 2005 Annual Report
AMERICAN CELLULAR: To Purchase Highland Cellular for $95 Million
APPLETON PAPERS: Solicits Consents to Amend Senior Notes Contract
ARMSTRONG WORLD: Parent Company Earns $28 Million in First Quarter
ASARCO LLC: FCR & Asbestos Panel Balks at Estimation Protocol
ASARCO LLC: Alvarez & Marsal Okayed as Fin'l & Turnaround Advisor
ASARCO LLC: Encycle Trustee Wants to Hire American Appraisers
ATA AIRLINES: Inks Stipulation Allowing GOAA's Claim for $2 Mil.
BAYOU GROUP: Files for Chapter 11 Protection in New York
BAYOU GROUP: Voluntary Chapter 11 Case Summary
BERRY-HILL GALLERIES: Court Sets June 15 as Governmental Bar Date
BIJOU-MARKET: Court Sets July 3 as Deadline for Filing of Claims
BUCKEYE TECHNOLOGIES: Posts $795,000 Net Loss in 2006 1st Quarter
CATHOLIC CHURCH: Dufresne Wants Portland's Claim Estimation Denied
CATHOLIC CHURCH: Tucson Panel Wants to Settle Claim for $367,500
CATHOLIC CHURCH: Portland Asks Court to Disallow Claim No. 437
CERVANTES ORCHARDS: Deere Says Disclosure Statement is Incomplete
CHEMTURA CORP: Gets $85 Million from Water Additives Unit Sale
CLARION TECHNOLOGIES: Posts $2.4 Mil. Net Loss in First Quarter
CLEAN EARTH: Gets Interim Access to $750,000 DIP Financing
CLEAN EARTH: Has Until June 30 to File Chapter 11 Plan
CLEAN EARTH: Court Approves Phil Daetwyler's Retention as COO
CMS ENERGY: Posts $27 Million Net Loss in 2006 First Quarter
COMCAST CORP: Earns $466 Million in First Quarter Ended March 31
DEATH ROW: U.S. Trustee Appoints Five-Member Creditors Committee
DND TECHNOLOGIES: March 31 Balance Sheet Upside Down by $6.9 Mil.
EASYLINK SERVICES: Posts $376,000 Net Loss in 2006 First Quarter
ELECTRIC CITY: Post $1.9 Million Net Loss in 2006 1st Fiscal Qtr.
ELEPHANT TALK: Posts $487,146 Net Loss in 2006 First Fiscal Qtr.
ENRON CORP: Ct. Dismisses Suit v. Caisse de Depot & Australia Bank
ENRON CORP: Asks Court to Approve United Illuminating Settlement
ENRON CORP: Broadband Unit Demands $1.01M Debt Payment from i2
ENTECH ENVIRONMENTAL: Posts $463,449 Net Loss in 2006 1st Quarter
EPIXTAR CORP: Morrison Brown Replaces McClain & Co. as Auditors
EPIXTAR CORP: EICCG Wants to Sell Accounts Receivable to WFCB
FORD MOTOR: S&P Puts Nine Related Debts' Low-B Ratings on Watch
FRIENDLY ICE: Posts $1.8 Mil. Net Loss in 1st Quarter Ended Apr. 2
FTS GROUP: Posts $5.9 Million Net Loss in 2006 1st Fiscal Quarter
FUNCTIONAL RESTORATION: Hires SulmeyerKupetz as Bankruptcy Counsel
FUNCTIONAL RESTORATION: Panel Hires Pachulski Stang as Counsel
FUNCTIONAL RESTORATION: Taps Xroads Solutions as Financial Advisor
GLOBAL HOME: Court Okays Conway as Restructuring Consultants
GSI GROUP: Repurchases Part of 12% Senior Notes for $7.4 Million
GULF COAST: Creditors Panel Wants Winstead Sechrest as Counsel
HAWS & TINGLE: Amends Chapter 11 Plan & Disclosure Statement
INVERNESS MEDICAL: Expects to Spend $16.8 Mil. on Plant Closures
IWT TESORO: McGladrey & Pullen Raises Going Concern Doubt
J. CREW: Earns $3.8 Million in Fiscal Year Ended Jan. 28, 2006
JERNBERG INDUSTRIES: Wants Court to Approve PBGC Settlement Accord
KIWA BIO-TECH: Posts $184,443 Net Loss in 2006 1st Fiscal Quarter
KL INDUSTRIES: Hires Laner Muchin as Special Labor Counsel
KL INDUSTRIES: Court Approves RSM McGladrey as Financial Advisor
L-3 COMMS: Jury Awards OSI $125.6MM in Damages in N.Y. Suit
LARRY'S MARKETS: Gets Interim Nod on Winterbauer as Labor Counsel
LEVITZ HOME: Landlords Want to Collect Unpaid Rents
LEVITZ HOME: Court Grants Lease Assumption and Assignment Plea
LOVESAC CORP: Gets Court Okay to Hire Squire Sanders as Counsel
LOVESAC CORP: Governmental Units Can File Claims Until July 31
MIAD SYSTEMS: Amends Annual 2005 Report & Two 2006 Fiscal Quarters
MIRANT CORP: Proposes to Acquire NRG Energy for $8 Billion
MIRANT CORP: Acquisition Proposal Undervalues NRG Energy
NCP MARKETING: Files Plan & Disclosure Statement in Nevada
NATIONAL MENTOR: To Buy Back $150 Mil. of 9-5/8% Sr. Sub. Notes
NES RENTALS: Accepts $850MM Purchase Offer from Diamond Castle
NEW ORLEANS: Chase Attempting to Arrange a $150 Million Loan
NORSHIELD ASSET: Chapter 15 Petition Summary
NORTHWEST AIRLINES: Wants to Advance Employee Defense Costs
NORTHWEST AIRLINES: Honeywell Wants $889,644 Claim Paid
NRG ENERGY: Rejects Mirant Corp.'s $8 Billion Acquisition Proposal
NRG ENERGY: Board Believes Mirant Corp.'s Proposal Undervalues NRG
ONEIDA LTD: U.S. Trustee Appoints Three-Member Equity Committee
ONEIDA LTD: Court Okays Otterbourg Steindler as Panel's Counsel
OPTINREALBIG.COM: Judge Tallman Dismisses Chapter 11 Cases
ORIS AUTOMOTIVE: BBK Okayed to Provide Management Support Services
OWENS CORNING: Wants to Expand Ernst & Young's Scope of Employment
PARTS PLUS: Del. Bank. Court Closes Remaining Chapter 11 Case
PATH 1: Posts $1.7 Million Net Loss in Quarter Ended March 31
PBS HOLDING: March 31 Balance Sheet Upside Down by $486,382
PLIANT: Wells Fargo Says Plan Violates Indentures & Bankr. Code
REFCO INC: Must Produce Documents for Noteholders' Committee
REFCO INC: Chapter 7 Trustee Can Liquidate Customer Claims
ROO GROUP: Posts $2.6 Mil. Net Loss in 2006 First Fiscal Quarter
SAINT VINCENTS: Queens Hospital Sale Hearing Set for June 26
SAINT VINCENTS: Sets Up Staten Island Sale Bidding Guidelines
SAINT VINCENTS: Wants to Pay $375,000 Break-up Fee to Castleton
SENSOR SYSTEM: Weinberg & Company Raises Going Concern Doubt
SERACARE LIFE: Can Use Cash Collateral on Interim Basis
SIERRA HEALTH: Earns $32.7 Million in 2006 First Fiscal Quarter
SILICON GRAPHICS: Can Continue Workers' Compensation Program
SILICON GRAPHICS: Wants to Hire Ordinary Course Professionals
SILICON GRAPHICS: Seeks Court Nod for Compensation Procedures
TRANSAX INTERNATIONAL: Auditor Raises Going Concern Doubt
USA COMMERCIAL: U.S. Trustee Names 7-Member Contract Rights Panel
USG CORP: Settles CCR, et al., Performance Bond Dispute for $13MM
USG CORP: Illinois Revenue Dept. Demands $2.49MM in Tax Payments
VARIG S.A.: Mitsui Says U.S. Court Protection is Inappropriate
VERILINK CORP: Court Okays William Gibbons as Local Bankr. Counsel
VERILINK CORP: Bankruptcy Administrator Appoints 7-Member Panel
WORLDCOM INC: Inks Stipulation Expunging Bernard Ebbers' Claims
WORLDCOM INC: Settles Philadelphia's Admin. Tax Claims for $432K
ZOOMERS HOLDING: Inks $3.5 Mil. Financing Deal with D'Alessandro
* Upcoming Meetings, Conferences and Seminars
*********
360 GLOBAL: Defaults on $20MM Promissory Note Issued to Met Life
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360 Global Wine Co., currently owning 50% of the membership units
of Kirkland Knightsbridge, LLC, guaranteed the existing obligation
of KKLLC for a promissory note originally issued in the amount of
$20,000,000, to Metropolitan Life Insurance Co. That promissory
note is now delinquent and Met Life notified KKLLC on April 4,
2006 that the loan balance has been accelerated and is due in its
entirety.
The amount due Met Life as of March 31, 2006 was $21,186,832,
including interest of $1,227,499 that has been accruing at a
default rate of 18% per annum since Dec. 1, 2005.
Met Life said it would be initiating a foreclosure action against
the KKLLC assets securing the promissory note as well as assets of
Kirkland Cattle Co. and other assets of KKLLC owner Larry
Kirkland. The Company does not have the financial capacity to
remedy this loan balance demand.
Financial Statements
The Company reported a net loss of $123.2 million on $4.23 million
revenues for the three months ended March 31, 2006, as compared to
a net loss of $1.7 million on $449,000 revenues for the three
months ended March 31, 2005.
As of March 31, 2006, the Company's balance sheet showed a
$25.66 million stockholder's deficit and a strained liquidity
with $18.37 million in total current assets available to pay
$142.9 million in total current liabilities due within the next
12 months.
About 360 Global Wine
Headquartered in Napa Valley, California, 360 Global Wine Company
-- http://www.360wines.com/-- is a California based wine producer
and marketer of wine brands. 360 Global Wine Company's extensive
and diverse portfolio includes premium wines and ultra-premium
luxury wine brands, all with an emphasis on superior quality.
ABB LUMMUS: Gets Final Court Okay on $320 Million DIP Financing
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware allowed ABB
Lummus Global Inc., on a final basis, to obtain up to $320 million
of debtor-in-possession financing from ABB Treasury Center (USA)
Inc. and ABB Holdings, Inc. The DIP Financing is composed of a
$120 million unsecured revolving credit facility and a $200
million credit enhancement facility.
The Debtor told the Court that it needs the financing for the
orderly continuation of its business operations. In addition, the
Debtor pointed out that its ability to obtain sufficient working
capital and liquidity through the incurrence of new debt is vital
to its successful reorganization.
As adequate protection, the Debtor grants ABB Treasury and ABB
Holdings superpriority claims and liens on all of its assets.
Objections to the Final DIP Order from any committee appointed in
the Debtor's case are due today.
Headquartered in Houston, Texas, ABB Lummus Global Inc. --
http://www.abb.com/lummus/-- offers advanced process
technologies, project management, engineering, procurement and
construction-related services for the oil and gas, petroleum
refining and petrochemical process industries. The group oversees
the construction of process plants and offshore facilities. The
company filed for chapter 11 protection on Apr. 21, 2006 (Bankr.
D. Del. Case No. 06-10401). Jeffrey N. Rich, Esq., at Kirkpatrick
& Lockhart Nicholson Graham LLP, represents the Debtor. Laura
Davis Jones, Esq., at Pachulski, Stang, Ziehl Young, Jones &
Weintraub, LLP, serves as the Debtor's co-counsel. An Informal
Asbestos Claimants' Committee has been formed in the Debtor's case
and is represented by Richard B. Schiro. Joseph D. Frank, Esq.,
at Frank/Gecker LLP serves as the Asbestos Committee's counsel.
No Official Committee of Unsecured Creditors has been appointed in
the Debtor's case. When the Debtor filed for protection from its
creditors, it estimated more than $100 million in assets and
debts.
ABB LUMMUS: Bankruptcy Services Okayed as Claims & Balloting Agent
------------------------------------------------------------------
The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court
for the District of Delaware authorized ABB Lummus Global Inc. to
employ Bankruptcy Services, LLC, as its claims, balloting, and
noticing agent, nunc pro tunc to April 21, 2006.
Bankruptcy Services will:
(a) prepare and serve required notices in the Debtor's
bankruptcy case, including:
(1) a notice of the commencement of the chapter 11 case and
the initial meeting of creditors under Section 341(a)
of the U.S. Bankruptcy Code;
(2) a notice of the claims bar date, if any;
(3) notices of objections to claims;
(4) notices of any hearings on the Disclosure Statement and
confirmation of the Plan, as each may be amended; and
(5) other miscellaneous notices as the Debtor or this Court
may deem necessary or appropriate for an orderly
administration of the bankruptcy case;
(b) within five business days after the service of a particular
notice, file with the Clerk's Office a certificate or
affidavit of service that includes:
(1) a copy of the notice served;
(2) an alphabetical list of persons on whom notice was
served, along with their addresses; and
(3) the date and manner of service;
(c) continue to provide necessary services in connection with
prepetition balloting activities;
(d) maintain copies of all proofs of claim and proofs of
interest filed in the Debtor's case;
(e) maintain an official claims register in the Debtor's case
by docketing all proofs of claim and proofs of interest in
a claims database that includes information on:
(1) the name and address of the claimant or interest holder
and any agent thereof, if the proof of claim or proof
of interest was filed by an agent;
(2) the date the proof of claim or proof of interest was
received by BSI or the Court;
(3) the claim number assigned to the proof of claim or
proof of interest; and
(4) the asserted amount and classification of the claim;
(f) implement necessary security measures to ensure the
completeness and integrity of the claims register;
(g) transmit to the Clerk's Office a copy of the claims
register on a weekly basis, unless requested by the
Clerk's Office on a more or less frequent basis;
(h) maintain an up-to-date list for all entities that have
filed proofs of claim or proofs of interest and make that
list available upon request to the Clerk's Office or any
party-in-interest;
(i) maintain and update a website containing up-to-date
information regarding significant events and deadlines in
the Debtor's bankruptcy case and copies of some court
documents, like the Plan and Disclosure Statement;
(j) provide access to the public for examination of the proofs
of claims or proofs of interest filed in the Debtor's
bankruptcy case without charge during regular business
hours;
(k) record and provide notice of all transfers of claims
pursuant to Bankruptcy Rule 2001(e), if directed to do so
by the Court;
(l) promptly comply with further conditions and requirements as
the Clerk's Office or the Court may at any time prescribe;
and
(m) provide other claims processing, noticing, balloting, and
related administrative services as may be requested from
time to time by the Debtor.
Kathy Gerber, a senior vice president at Bankruptcy Services, LLC,
discloses that the Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Senior Managers/On-Site Consultants $225
Other Senior Consultants $185
Programmer $130 - $160
Associate $135
Data Entry Staff $40 - $60
Bankruptcy Services charges $225 per hour for schedule
preparation.
Ms. Gerber assures the Court that Bankruptcy Services does not
represent any interest adverse to the Debtor or its estate and is
"disinterested" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in Houston, Texas, ABB Lummus Global Inc. --
http://www.abb.com/lummus/-- offers advanced process
technologies, project management, engineering, procurement and
construction-related services for the oil and gas, petroleum
refining and petrochemical process industries. The group oversees
the construction of process plants and offshore facilities. The
company filed for chapter 11 protection on Apr. 21, 2006 (Bankr.
D. Del. Case No. 06-10401). Jeffrey N. Rich, Esq., at Kirkpatrick
& Lockhart Nicholson Graham LLP, represents the Debtor. Laura
Davis Jones, Esq., at Pachulski, Stang, Ziehl Young, Jones &
Weintraub, LLP, serves as the Debtor's co-counsel. An Informal
Asbestos Claimants' Committee has been formed in the Debtor's case
and is represented by Richard B. Schiro. Joseph D. Frank, Esq.,
at Frank/Gecker LLP serves as the Asbestos Committee's counsel.
No Official Committee of Unsecured Creditors has been appointed in
the Debtor's case. When the Debtor filed for protection from its
creditors, it estimated more than $100 million in assets and
debts.
ABB LUMMUS: Withdraws Request to Employ FTI Consulting as Advisor
-----------------------------------------------------------------
ABB Lummus Global Inc., informed the U.S. Bankruptcy Court for the
District of Delaware that it is withdrawing its request to employ
FTI Consulting, Inc., as its financial advisor.
The U.S. Trustee for Region 3 had objected to the Debtor's
retention of FTI citing that, George P. Stamas, Esq., a partner at
Kirkland & Ellis LLP, is currently an officer and director of FTI.
Kirkland & Ellis represents the Debtor's parent, ABB Holdings,
Inc.
The Trustee also contended that FTI served as the financial
advisor of David Austern, the future claims representative in
Combustion Engineering's case and the Combustion Engineering
trust. The trustee says that this creates both an appearance of
impropriety and a real actual conflict with FTI acting as Lummus'
financial advisor while at the same time having served the future
claims representative in Combustion Engineering's case.
The Trustee further argued that the proposed engagement suggests
that FTI will have indemnification and limitation of liability
provisions that are not warranted and may be inconsistent with
prior decisions of the bankruptcy court in this district.
Headquartered in Houston, Texas, ABB Lummus Global Inc. --
http://www.abb.com/lummus/-- offers advanced process
technologies, project management, engineering, procurement and
construction-related services for the oil and gas, petroleum
refining and petrochemical process industries. The group oversees
the construction of process plants and offshore facilities. The
company filed for chapter 11 protection on Apr. 21, 2006 (Bankr.
D. Del. Case No. 06-10401). Jeffrey N. Rich, Esq., at Kirkpatrick
& Lockhart Nicholson Graham LLP, represents the Debtor. Laura
Davis Jones, Esq., at Pachulski, Stang, Ziehl Young, Jones &
Weintraub, LLP, serves as the Debtor's co-counsel. An Informal
Asbestos Claimants' Committee has been formed in the Debtor's case
and is represented by Richard B. Schiro. Joseph D. Frank, Esq.,
at Frank/Gecker LLP serves as the Asbestos Committee's counsel.
No Official Committee of Unsecured Creditors has been appointed in
the Debtor's case. When the Debtor filed for protection from its
creditors, it estimated more than $100 million in assets and
debts.
ACCESS WORLDWIDE: Posts $1.2 Million Net Loss in First Quarter
--------------------------------------------------------------
Access Worldwide Communications, Inc., reported financial results
for the three months ended March 31, 2006.
Access reported a net loss of $1.2 million for the quarter ended
March 31, 2006, compared to $600,000 loss for the first quarter of
2005. The decline, although offset by the increased profit in the
Company's Business Services Segment, was the result of the
decrease in revenues from the Company's Pharmaceutical Services
Segment along with the increase in interest expense on its
borrowings. Total weighted average common shares outstanding for
the quarters ended March 31, 2006 and March 31, 2005, were
16,889,039 and 11,177,052, respectively.
The Company's revenues decreased $0.4 million, or 3.8%, to
$10 million for the three months ended March 31, 2006, compared to
$10.4 million for the three months ended March 31, 2005.
Revenues for the Pharmaceutical Segment decreased $1.9 million, or
27.9%, to $4.9 million for the three months ended March 31, 2006,
compared to $6.8 million for the three months ended March 31,
2005. The decrease was primarily attributed to a reduction of
revenue of $1.1 million in our medical education business. This
reduction was caused primarily by a decrease in work being
performed for three significant customers at the Company's medical
education division, which accounted for a loss in revenue of
approximately $978,000 when compared quarter over quarter. The
further reduction was caused by a decrease in revenue of $800,000
in Access' pharmaceutical communication business, which was
primarily the result of a change in programs for two significant
customers.
One of these customers replaced an inbound program, which was in
place in the first quarter of 2005 and ended in August of 2005,
with another similar program that has not had as successful an
enrollment as the program that it replaced, thus causing a
decrease in revenue.
The other customer has two large programs, which previously had
teleservice representatives dedicated to their programs only, but
now utilize the Company's shared pool of representatives that
serve more than one client at a time. This change was requested
by the customer due to budget cut backs and has decreased the
amount per billable hour that the Company charges the customer for
these programs.
Revenues for the Business Segment, which includes the Company's
multilingual communications business, increased $1.5 million, or
41.7%, to $5.1 million for the three months ended March 31, 2006,
compared to $3.6 million for the three months ended March 31,
2005. The increase in revenues was primarily attributed to the
revenue generated in our Philippines communication center of $0.8
million that had not yet begun operations as of the first quarter
of 2005. Additionally, the Company experienced a 20% increase in
revenues domestically due to the acquisition of a significant new
customer and from increased programs with two existing customers.
Full-text copies of the Company's first quarter financial
statements for the three months ended March 31, 2006, are
available for free at http://ResearchArchives.com/t/s?a2a
Going Concern Doubt
BDO Seidman, LLP, in West Palm Beach, Florida, raised substantial
doubt about Access Worldwide Communications, Inc.'s ability to
continue as a going concern after auditing the Company's
consolidated financial statements for the years ended
Dec. 31, 2005, and 2004. The auditors pointed to the Company's
recurring losses from operations, negative cash flows, and
accumulated deficit.
Headquartered in Boca Raton, Florida, Access Worldwide
Communications, Inc. (OTCBB: AWWC) -- http://www.accessww.com/--
is an established marketing company that provides a variety of
sales, communication and medical education services. Its spectrum
of services includes medical meetings management, medical
publishing, editorial support, clinical trial recruitment, patient
compliance, multilingual teleservices, product stocking and
database management, among others. Access Worldwide has about
1,000 employees in offices throughout the United States and the
Philippines.
At March 31, 2006, Access Worldwide Communications, Inc.'s balance
sheet showed a $6,105,582 stockholders' deficit compared to a
$5,060,322 deficit at Dec. 31, 2005.
ACURA PHARMACEUTICALS: Incurs $4.2 Million Net Loss in 1st Quarter
------------------------------------------------------------------
Acura Pharmaceuticals, Inc., disclosed its financial results for
the first quarter ended March 31, 2006, to the Securities and
Exchange Commission on April 26, 2006.
For the year ended March 31, 2006, the Company reported a $4.2
million net loss on $3.9 million of net revenues, compared to a
$1.9 million net loss on $1.9 million of net revenues for the year
ended Dec. 31, 2005.
As of March 31, 2006, the Company's balance sheet showed total
assets of $2 million and total debts of $9.4 million, resulting in
$7.3 million deficit.
A full-text copy of Acura Pharmaceuticals' Quarterly Report is
available for free at http://researcharchives.com/t/s?a1c
Going Concern Doubt
BDO Seidman, LLP, expressed doubt about Acura Pharmaceuticals'
ability to continue as a going concern after auditing the
Company's 2005 financial statements. The auditing firm pointed to
the Company's recurring losses from operations and net capital
deficiency at Dec. 31, 2005.
Headquartered in Palatine, Illinois, Acura Pharmaceuticals, Inc.
-- http://www.acurapharm.com/-- is a specialty pharmaceutical
company engaged in research, development and manufacture of
innovative and proprietary abuse deterrent, abuse resistant and
tamper resistant formulations intended for use in orally
administered opioid-containing prescription analgesic products.
Acura is actively collaborating with contract research
organizations for laboratory and clinical evaluation and testing
of product candidates formulated with its Aversion(R) Technology.
ADELPHIA COMMS: Dispute Ensues Over Bank Lenders Distribution
-------------------------------------------------------------
The Official Committee of Equity Security Holders appointed in the
chapter 11 cases of Adelphia Communications Corporation and its
debtor-affiliates supports the Official Committee of Unsecured
Creditors' request to hold back the distributions to be made to
the prepetition bank lenders under the ACOM Debtors' Modified
Fourth Amended Joint Plan of Reorganization.
Objections
The ACOM Debtors note that pursuant to a Court order approving
three related agreements between the ACOM Debtors and the
Securities Exchange Commission, the Debtors and the Department of
Justice, and the Debtors and Rigas Family, dated May 26, 2005,
the ACOM Debtors are required to oppose the Creditors Committee's
request and are not permitted to propose a plan that withholds
any distribution to the Bank Lenders by reason of the pendency of
the Bank Lender Avoidance Complaint unless ordered to do so by
the Court.
According to Marc Abrams, Esq., at Willkie Farr & Gallagher, in
New York, the Debtors' agreement to oppose any hold back request
was intended to formalize a "handshake" deal between the Bank
Lenders and the Debtors, and to facilitate the Bank Lenders'
cooperation and, ultimately, acceptance of the Plan.
Mr. Abrams notes that while the Creditors Committee's Hold Back
request as framed aims to preserve valuable estate assets,
depending on the rate at which interest would accrue on any held
back distributions, the motion may result in incremental interest
costs of more than $400,000,000.
Thus, the ACOM Debtors ask the Court to deny the Official
Committee of Unsecured Creditor's request to hold back
distributions to prepetition bank lenders until the Court
determines the rate of interest, if any, required to be paid on
held back distributions and the impact of that interest accrued
on the feasibility of the Plan.
Several parties-in-interest agree that the payment of the bank
claims under the terms of the Plan is required under the
Government Settlement Order and appropriate under the standards
of Rule 9019 of the Federal Rules of Bankruptcy Procedure:
a. various Administrative Agents:
-- Wachovia Bank National Association,
-- Bank of America, N.A.,
-- the Bank of Nova Scotia
-- JPMorgan Chase Bank, N.A.,
-- Citibank, N.A., and
-- Bank of Montreal;
b. these Nominal Agents:
-- ABN AMRO Bank N.V.,
-- Barclays Bank PLC,
-- CIBC, INC.,
-- Merrill Lynch Capital Corp.,
-- PNC Bank, National Association,
-- Societe Generale, S.A.
-- Calyon New York Branch
-- Bank of New York, & Bank of New York Company, Inc., and
-- Credit Suisse, Cayman Branch, & the Royal Bank of
Scotland;
c. the Ad Hoc Committee of Non-Agent Secured Lenders;
d. the Toronto-Dominion Bank; and
e. various investment banks, namely:
-- ABN AMRO Inc.,
-- BNY Capital Markets, Inc.,
-- Barclays Capital Inc.,
-- Citigroup Global Markets, Inc.,
-- CIBC World Markets Corp.,
-- Deutsche Bank Securities, Inc.,
-- J.P. Morgan Securities Inc.,
-- Morgan Stanley & Co. Incorporated,
-- PNC Capital Markets, Inc.,
-- Scotia Capital (USA) Inc.,
-- SunTrust Capital Markets, Inc.,
-- TD Securities (USA) LLC, and
-- Banc of America Securities LLC, and its affiliate, Fleet
Securities, Inc.
The Non-Agent Committee asks the Court to reject the Creditors
Committee's request because it attempts to use Section 502(d) to
disallow the Non-Agent Committee members' claims. Under the
plain language of Section 502(d) and established case law, the
Creditors Committee must obtain adjudication on its avoidance
actions before raising Section 502(d).
The Bank of Montreal contends that the Plan represents a
reasonable settlement and compromise of the allowance and
distribution issues.
The Toronto-Dominion Bank relates that pursuant to a prepetition
interest rate swap agreement between TD Bank and Chelsea
Communications, Inc., one of the Debtors, TD Bank holds a general
unsecured claim against Chelsea. Although TD Bank is a named
defendant in the Bank Action Litigation, the litigation do not
specifically allege that TD Bank received any transfers or
property from Chelsea that could be recoverable by Chelsea as a
result of the Bank Action.
Accordingly, TD Bank asks the Court to deny the Creditors
Committee's request to the extent that the request seeks to
disallow or hold back a distribution to TD Bank on account of the
Chelsea Swap Claim. Section 502(d) provides no basis to disallow
or hold back a distribution on TD Bank's Chelsea Swap Claim when
Chelsea has no valid avoidance recovery claim against TD Bank on
account of the Bank Action, Patrick L. Hayden, Esq., at
McGuireWoods LLP, in New York, argues.
The Investment Banks note that the Plan provides for the payment
in cash of the Bank Lender Fee Claims. As affiliates of the Bank
Lenders, some or all of the Investment Banks are holders of Bank
Claims arising from indemnification to which they are entitled
under the relevant Prepetition Credit Agreements. Those claims
constitute Bank Claims under the Plan. Since the Committee has
not sought relief against the Investment Banks, the references in
its request to the treatment of Bank Claims should not be
construed to apply to Bank Claims held by the Investment Banks.
However, in an abundance of caution to the extent the Creditors
Committee's request could be construed to affect Bank Claims held
by the Investment Banks, the Investment Banks ask the Court to
deny the Creditors Committee's request.
Plaintiffs Slam Investment Banks' Response
The putative class action plaintiffs in a lawsuit pending before
the United States District Court for the Southern District of New
York captioned In re Adelphia Communications Corp. Securities &
Derivative Litigation, 03 MD 1529(LLM), believes it would be
wrong to uphold or consider the response of the various
investments banks in connection with the Creditors' Committee's
request to hold back distribution.
As previously reported, the Investment Banks assert that as
"affiliates of the Banks" they are "holders of Bank Claims
arising from indemnification to which they are entitled under the
relevant Prepetition Credit Agreements."
The Plaintiffs tell Judge Gerber that they are not quite sure
exactly what point the Investment Banks are trying to make.
"If they are saying that simply because they may be affiliates of
the Banks, the Prepetition Credit Agreements entitle them to
indemnification without regard to whether the underlying claims
relate to those agreements, the [Plaintiffs] disagree and submit
there is no principled basis for the position. And if they are
saying that as holders of Bank Claims they are entitled to
indemnification even as to claims arising out of their
underwriting activities, there is similarly no merit to the
argument," John H. Drucker, Esq., at Cole, Schotz, Meisel, Forman
& Leonard, P.A., in New York, argues.
The Class Action Plaintiffs never understood that the securities
law claims they assert against the Investment Banks in the
Securities Class Action relate to the Creditors Committee's Hold
Back Motion and do not believe there is any credible, good faith
argument that those claims could give rise to "Bank Claims", Mr.
Drucker explains.
Mr. Drucker informs the Court that if the Investment Banks push
the issue in connection with the Hold Back Motion despite the
transparent lack of merit to any argument that claims relating to
underwriting activities are Bank Claims, it could materially
impact the third-party release issue under the ACOM Debtors' Plan
of Reorganization. This is because the Debtors would no doubt
claim that if the Bank Claims included underwriting claims and if
those claims were indemnifiable, the Debtors' exposure to the
Banks might be increased in amounts to create confirmation
issues, Mr. Drucker says.
Creditors Committee Insists
The Creditors Committee insists that:
(a) the Bank Lenders' entitlement to receive distributions on
the Effective Date has not been "settled" because:
-- the Government Settlement does not assure that the Bank
Lenders will receive distributions on the Effective
Date; and
-- the ACOM Debtors' Plan of Reorganization does not
"settle" the Bank Lenders' entitlement to Effective
Date distribution;
(b) Section 502(d) requires the Hold Back of the Bank Lenders'
distributions; and
(c) as a matter of law, the Bank Claims are not entitled to
interest at the contract rate after the Effective Date.
Based in Coudersport, Pa., Adelphia Communications Corporation --
http://www.adelphia.com/-- 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. PricewaterhouseCoopers serves as the Debtors'
financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and
Klee, Tuchin, Bogdanoff & Stern LLP represent the Official
Committee of Unsecured Creditors. (Adelphia Bankruptcy News,
Issue No. 134; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADELPHIA: Barbs on Multi-Mil. Suit with Devon Trustee Continues
---------------------------------------------------------------
Devon Mobile Communications Liquidating Trust and the ACOM
Debtors stipulate that the Devon Trustee's complaint regarding
ACOM's breach of duty to fund operations is dismissed with
prejudice. Each party bears its own costs.
Motions for Summary Judgment
The Liquidating Trustee assigned in Devon Mobile Communications'
chapter 11 case asks the U.S. Bankruptcy Court for the Southern
District of New York for a summary judgment that Adelphia
Communications Corporation and its debtor-affiliates, as the alter
ego of Devon Mobile Communications, L.P., is liable to the Devon
Trustee:
-- for the $80,000,000 debt that the Devon Trustee is unable
to pay;
-- for $80,000,000 under the doctrine of deepening insolvency;
-- for $53,046,674 on account of its receipt of fraudulent
conveyances from Devon;
-- for $53,046,674 as the result of its breach of the
Agreement of Limited Partnership of Devon.
In a separate pleading, the ACOM Debtors ask the Court for
summary judgment in their favor.
Judge Morris denies the parties' summary judgment motions on
fraudulent conveyance and breach of limited partnership
agreement. Judge Morris finds that material issues of fact exist
as to:
-- whether the transfers made on August 31, 2001; October 26,
2001; November 23, 2001; December 7, 2001; and February 19,
2002, were returns of capital or repayment of undocumented
intercompany loans;
-- whether the transfer of the Florida License sale proceeds
were an improper return of capital, or fraudulent
conveyances;
-- whether the funds were ultimately used to pay Devon's
ongoing operating liabilities;
-- whether the Devon Trustee received reasonably equivalent
value for the transfers; and
-- whether the Devon trustee was left undercapitalize by the
transfers.
The Court denies the Devon Trustee's request for summary judgment
in its entirety.
The Court grants ACOM's request for summary judgment on
fraudulent conveyance and breach of services agreement. The
Court finds that as of February 7, 2002, the transfer of
$22,100,000 was a transfer of funds initially provided by the
ACOM Debtors, and therefore did not diminish the Devon Trustee's
assets and could have not been a fraudulent conveyance or have
caused the Devon trustee any contract damages.
On the deepening insolvency allegation, Judge Morris finds that
the Devon Trustee failed to adequately allege that ACOM prolonged
the Devon Trustee's life in breach of a separate duty owed to the
Devon Trustee or any of its constituency.
Judge Morris also rules that the Devon Trustee does not have
standing to assert an alter ego claim against ACOM.
In a separate order, Judge Morris denies in its entirety the ACOM
Debtors' request for summary judgment with regards to its
counterclaims for breaches of contracts and agreements under the
General Dynamics Agreement where ACOM guaranteed Devon's
obligations:
-- the General Dynamics Claim against ACOM for $34,908,731,
plus consequential damages, interest, attorney's fees,
costs and expenses in defending the Claim;
-- $34,908,731 representing Devon's failure to indemnify ACOM
under its implied obligation under the Partnership
Agreement, plus consequential damages, interest, attorney's
fees, costs and expenses in defending the General Dynamics
Claim; and
-- $34,908,731 in violation of Devon's equitable duty to
indemnify ACOM, plus consequential damages, interest,
attorneys' fees, costs and expenses incurred in defending
the General Dynamics Claim.
Motions in Limine
The Devon Trustee asks the Court to:
a. preclude the ACOM Debtors' expert, Glenn Pomerantz, from
testifying on subjects that the Devon Trustee was prevented
from exploring at deposition;
b. preclude Mr. Pomerantz from testifying at trial in
support of the irrelevant theory that Devon could have
survived by selling its PCS Licenses;
c. limit the ACOM Debtors' evidence and argument in
accordance with the limits they placed on their Rule
30(b)(6) depositions testimony; and
d. exclude a certain expert, Susan M. Simmons, from
testifying at trial to facts and opinions she failed to
supply during her deposition.
The ACOM Debtors ask the Court to deny the Devon Trustee's
motions in limine because:
a. the Devon Trustee failed to follow the discovery rules
governing discovery disputes; and
b. their witnesses properly responded to deposition questions.
Joanne B. Wills, Esq., at Klehr, Harrison, Harvey, Branzburg &
Ellers LLP, in Philadelphia, Pennsylvania, asserts that the
motions in limine are nothing more than a "veiled discovery
motion." The Devon Trustee has needlessly wasted the Court's and
the ACOM Debtors' time with the motions in limine, Ms. Wills
says.
However, the Devon Trustee asserts that:
-- it was not required to confer with the ACOM Debtors before
filing the motions in limine;
-- it gave the ACOM Debtors a full and fair opportunity to
provide the required deposition testimony, which they have
spurned;
-- it is entitled to an order precluding Mr. Pomerantz from
testifying:
a. on subjects that it was prevented from exploring at
deposition by ACOM Debtors' instructions not to answer;
b. in support of his theory that Devon could have survived
by selling its PCS Licenses; and
-- it is entitled to an order limiting the ACOM Debtors'
evidence and argument in accordance with the limits they
placed on their Rule 30(b)(6)deposition testimony.
Court Denies Motions in Limine
For reasons stated in open Court, Judge Morris denied the Devon
Trustee's motions in limine.
ACOM Debtors Amend Counterclaims
The ACOM Debtors ask the Court to enter a declaratory judgment in
their favor that to the extent ACOM is required to pay any monies
to General Dynamics pursuant to ACOM's guarantee of Devon's
obligations to General Dynamics, ACOM is entitled to a dollar-to-
dollar indemnification from the Liquidating Trust.
The ACOM Debtors' counterclaims have been further amended to
reflect that the ACOM Debtors assert counterclaims for breach and
unjust enrichment under the Bridge Financing pursuant to the
terms of the Limited Partnership Agreement:
-- unpaid obligations under the Bridge Financing amounting to
not less than:
* $56,277,605; or
* $106,277,605, if the Court determines that the Florida
License Sale Proceeds were not used to pay Devon vendors
for work and services provided by those vendors to Devon;
and
-- damages of:
* $56,277,605; or
* $106,277,605, if the Court determines that the Florida
License Sale Proceeds were not used to pay Devon vendors
for work and services provided by those vendors to Devon.
Devon Trustee Answers ACOM's Counterclaims
The Devon Mobile Communications Liquidating Trust asserts that:
-- the ACOM Debtors fail to state a [counter]claim on which
relief can be granted;
-- the ACOM Debtors' counterclaims, if any are found to have
merit, must be offset by amount that they took from Devon
Mobile Communications, L.P.;
-- the ACOM Debtors' counterclaims on the counts of:
* breach of contract to the Devon L.P. Agreement,
* breach of implied indemnity contract,
* equitable indemnity, and
* contribution,
are barred in whole or in part because they:
(1) are contingent claims for indemnification or
contribution and are therefore disallowable pursuant
to Section 502(e)(1)(B) of the Bankruptcy Code; and
(2) are subrogated by any ACOM Debtors' unpaid amount of
those claims, pursuant to Section 509(c).
-- the ACOM Debtors' allegedly "advanced" funds should all be
characterized as equity instead of debt, contrary to what
the ACOM Debtors describe it;
-- the ACOM Debtors' claims are barred, in whole or part, by
the doctrine of equitable subordination pursuant to Section
510(c);
-- the ACOM Debtors are obligated to the Devon Trustee thus
entitling them to set-off, recoupment or other equitable
rights;
-- the ACOM Debtors' claims are barred, in whole or part, to
the extent they were asserted after the Court-approved bar
date; and
-- the ACOM Debtors' claims are barred, in whole or part,
because of the ACOM Debtors' inequitable conduct and of
Devon being the alter ego and instrumentality of the ACOM
Debtors.
The ACOM Debtors ask the Court to strike the Devon Trustee's
affirmative defense asserting that the ACOM Debtors' claims are
barred because Devon was the alter ego and instrumentality of the
ACOM Debtors.
Joanne B. Wills, Esq. at Klehr, Harrison, Harvey, Branzburg &
Ellers LLP, in Philadelphia, Pennsylvania, argues that the Devon
Trustee's assertion is a predicament on the same theory of a
summary judgment that the Court had already granted to the ACOM
Debtors. Judge Morris already ruled that the Devon Trustee does
not have standing to bring that claim.
Despite the summary judgment in favor of the ACOM Debtors, the
Devon Trustee indicated that it will press its affirmative
defense at trial, Ms. Wills relates.
Ms. Wills further asserts that the Devon Trustee will prejudice
the ACOM Debtors by forcing it to defend at trial against a claim
on which it has already prevailed at summary judgment.
For reasons stated in open court, the Court denied the ACOM
Debtors' request to strike that affirmative defense asserted by
the Devon Trustee.
Joint Pretrial Order
Pursuant to a Joint Pretrial Order, the parties agree that:
* As of April 3, 2006, the Devon Trustee asserts claims for:
(a) $50,760,000 on account of these transfers, as amended,
which may be avoided as fraudulent conveyances:
Payment Date Payment Amount
------------ --------------
08/03/01 $3,000,000
08/10/01 33,000,000
08/30/01 975,000
10/04/01 13,500,000
10/26/01 40,000
11/23/01 20,000
12/07/01 130,000
02/20/02 95,000
(b) the same $50,760,000 as damages arising from the ACOM
Debtors' material breaches of the Limited Partnership
Agreement.
* As of April 3, 2006, the ACOM Debtors assert counterclaims:
(a) for breach and unjust enrichment under the Services
Agreement dated December 29, 2000:
-- service fees of not less than $2,000,000;
-- consolidated purchase fees of not less than
$5,315,351; and
(b) for breach and unjust enrichment under the Bridge
Financing pursuant to the terms of the Limited
Partnership Agreement:
-- unpaid obligations under the Bridge Financing
amounting to not less than $56,277,605; and
-- $50,011,488 in damages.
(c) for breach and unjust enrichment under a brokerage fee
agreement in connection with the purchase and sale of
certain Devon FCC Licenses, brokerage fees for
$1,440,000 relating to the sale of the Fort Pierce
license; and
(d) for obligations relating to a contract for the provision
of telephone services entered into with ACC
Telecommunication of VA, in which Devon failed to pay
the invoiced charges:
-- $1,701,818 in damages plus consequential damages,
interest, and costs for the breach; and
-- $1,701,818 for damages representing Devon's unjust
enrichment.
* In connection with the indemnity provisions of the Devon
L.P. Agreement, the General Dynamics Agreement, and the
General Dynamics Guaranty; Devon's equitable duty of
indemnity; and Devon's contribution obligation under the
General Dynamics Agreement and the General Dynamics
Guaranty, the ACOM Debtors ask the Court:
(a) for a declaratory judgment of their right to
indemnification with the indemnification amount to be
determined through the adjudication of the General
Dynamics claim in the ACOM Debtors' claims resolution
process; and
(b) to award them attorneys' fees, costs and expenses
incurred in defending the General Dynamics ACC Claim.
Based in Coudersport, Pa., Adelphia Communications Corporation --
http://www.adelphia.com/-- 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. PricewaterhouseCoopers serves as the Debtors'
financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and
Klee, Tuchin, Bogdanoff & Stern LLP represent the Official
Committee of Unsecured Creditors. (Adelphia Bankruptcy News,
Issue No. 134; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADELPHIA COMMS: TCR Sports Wants FCC to Condition Sale to Comcast
-----------------------------------------------------------------
David C. Frederick, Esq., at Kellogg, Huber, Hansen, Todd, Evans
& Figel, P.L.L.C., in Washington, D.C., representing TCR Sports
Broadcasting Holding, L.L.P., tells the Federal Communications
Commission that the sale of substantially all of Adelphia
Communications Corporation's assets to Time Warner, Inc., and
Comcast Corporation should not proceed without significant
conditions placed on it.
In a letter dated May 16, 2006, Mr. Frederick reminded the FCC
that TCR Sports argued that Comcast had "improperly
[discriminated] against TCR in an effort to undo TCR's agreement
with [Major League Baseball] to obtain the broadcast rights for
the [Washington Nationals baseball team games] for Comcast's
wholly owned subsidiary." TCR Sports further argued that the
discrimination reflected not only Comcast's effort to favor its
own affiliate but also its desire to extend its monopoly position
in the multi-channel video programming distributor market.
According to the Associated Press, Comcast is refusing to carry
Mid-Atlantic Sports Network, the registered trade name of TCR
Sports, because of a dispute with Peter Angelos arising from his
plans to move Baltimore Orioles baseball team games telecasts to
MASN after its deal with Comcast expires.
Mr. Angelos, the owner of the Baltimore Orioles, controls MASN.
Mr. Frederick argues that Comcast's proposed acquisition of ACOM
would only increase Comcast's incentive and ability to carry out
those program carriage discriminations.
Based on a letter dated April 6, 2006, from Comcast's President,
Stephen B. Burke, to MLB Commissioner Allah H. Selig, Mr.
Frederick notes that Comcast has expressly proposed to MLB that:
-- the 2005 agreement between the Baltimore Orioles baseball
team and MLB be "terminate[d]";
-- the Nationals receive local television rights contrary to
that agreement; and
-- Comcast broadcast Nationals' games, presumably via its
affiliated regional sports network, Comcast SportsNet.
Mr. Frederick informs FCC that the demands demonstrate in clear
terms that Comcast's objective is to acquire exclusive access to
valuable regional sports programming, thus, advancing interests
of its affiliated regional sports network while solidifying its
monopoly position in the MVPD market at the same time.
Mr. Frederick also notes that Mr. Burke's letter demonstrates
that Comcast has no legitimate business justification for its
failure to carry TCR Sports and that Comcast's conduct can be
explained only as an unlawful discrimination.
Mr. Frederick also informs the FCC that at a congressional
hearing on April 17, David L. Cohen, Comcast's executive vice
president, emphasized that Comcast's aim was to undo the 2005
agreements between TCR Sports and MLB.
Mr. Frederick also refers the FCC to a letter dated April 17,
2006, from Mr. Cohen to Mr. Angelos in which Mr. Cohen confirms
that Comcast will not agree to carry TCR Sports' programming of
Nationals games unless TCR Sports agrees to abrogate its
March 28, 2005, agreement with MLB.
Mr. Frederick relates that meetings between the officials of TCR
Sports and Comcast resulted in no carriage agreement because
Comcast refused to even discuss the terms of carriage unless TCR
Sports either:
-- gives Comcast equity in the network that produces Nationals
games; or
-- abrogates its agreement with MLB.
Mr. Frederick concludes that the ACOM Sale Transaction will
increase Comcast's incentives and power to use its dominant
positions in both the regional sports programming market in the
mid-Atlantic and the cable distribution network to harm competing
non-affiliated regional sports networks, like TCR Sports, and
rival MVPD distributions.
Accordingly, TCR Sports asks the FCC to amend the terms of
conditions in the event that FCC approves the ACOM Sale
Transaction.
Based in Coudersport, Pa., Adelphia Communications Corporation --
http://www.adelphia.com/-- 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. PricewaterhouseCoopers serves as the Debtors'
financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and
Klee, Tuchin, Bogdanoff & Stern LLP represent the Official
Committee of Unsecured Creditors. (Adelphia Bankruptcy News,
Issue No. 134; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADVANCED COMMS: Posts $284,621 Net Loss in 2006 3rd Fiscal Quarter
------------------------------------------------------------------
Advanced Communications Technologies, Inc., filed its third
quarter financial statements for the three months ended March 31,
2006, with the Securities and Exchange Commission on May 19, 2006.
The Company reported a $284,621 net loss on $2,552,055 of revenues
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $4,916,779
in total assets, $2,702,465 in total liabilities, and $2,214,314
in stockholders' equity.
The Company's March 31 balance sheet also showed strained
liquidity with $1,659,563 in total current assets available to pay
$2,514,727 in total current liabilities coming due within the next
12 months.
Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a13
Going Concern Doubt
As reported in the Troubled Company Reporter on Dec. 2, 2005,
Weinberg & Company, PA, expressed substantial doubt about Advanced
Communications Technologies, Inc.'s ability to continue as a going
concern after auditing the Company's financial statements for the
fiscal years ended June 30, 2005, and 2004. The auditing firm
pointed to the Company's net loss and negative cash flow from
operations.
Based in New York, Advanced Communications Technologies, Inc.,
specializes in the technology aftermarket service and supply
chain, known as reverse logistics. Its wholly owned subsidiary
and principal operating unit, Encompass Group Affiliates, Inc.,
acquires and operates businesses that provide computer and
electronics repair and end-of-life cycle services.
AH-DH APARTMENTS: Hires McGuire Craddock as Bankruptcy Counsel
--------------------------------------------------------------
AH-DH Apartments, Ltd., and its debtor-affiliates obtained
authority from the U.S. Bankruptcy Court for the Eastern District
of Texas to employ McGuire, Craddock & Strother, P.C., as their
bankruptcy counsel.
As reported in the Troubled Company Reporter on April 20, 2006,
the Debtors told the Court that DB Holdings, LLC, a debtor-
affiliate that filed for bankruptcy protection on April 10, 2006,
will employ its own bankruptcy counsel.
The Debtors told the Court that McGuire Craddock is expected to
perform legal services necessary during their chapter 11 cases.
The Debtors disclosed that the Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partners $250 - $350
Associates $175 - $235
The lead counsel for this engagement, J. Mark Chevallier, Esq.,
bills $320 per hour. The Debtors inform the Court that Dalcor
Realty, LLC, a direct or indirect equity owner of each of the
Debtors, has paid the Firm a $160,000 retainer.
Mr. Chevallier assured the Court that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not hold or represent any interest
adverse to the Debtors' estates.
Headquartered in Plano, Texas, AH-DH Apartments, Ltd., owns 16
apartment complexes. The company and three of its affiliates
filed for chapter 11 protection on Mar. 22, 2006 (Bank. E.D. Tex.
Case No. 06-40355). J. Mark Chevallier, Esq., at McGuire Craddock
& Strother, P.C., represents the Debtors. When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $50 million and $100 million.
DH Holdings Limited Partnership and DH Holdings GP, Inc., filed
for chapter 11 protection on Apr. 8, 2006 (Bankr. E.D. Tex. Case
Nos. 06-40479 and 06-40480). Another affiliate, DB Holdings, LLC,
filed for chapter 11 protection on Apr. 10, 2006 (Bankr. E.D. Tex.
Case No. 06-40484). The Debtors' chapter 11 cases are jointly
administered under Case No. 06-40355.
AH-DH APARTMENTS: DB Holdings Taps PronskePatel as Bankr. Counsel
-----------------------------------------------------------------
DB Holdings, LLC, a debtor-affiliate of AH-DH Apartments, Ltd.,
asks the U.S. Bankruptcy Court for the Eastern District of Texas
for authority to employ Pronske & Patel, P.C. as its bankruptcy
counsel.
PronskePatel will:
(a) provide legal advice with respect to Debtor's powers and
duties as debtor in possession in the continued operation
of its business and the management of its property;
(b) take all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on
behalf of the Debtor, the defense of any actions
commenced against the Debtor, negotiations concerning
litigation in which the Debtor is involved, and
objections to claims filed against the Debtor's estate;
(c) prepare on behalf of the Debtor all necessary motions,
answers, orders, reports, and other legal papers in
connection with the administration of its estate herein;
(d) assist the Debtor in preparing for and filing one or more
disclosure statements in accordance with Section 1125 of
the Bankruptcy Code;
(e) assist the Debtor in preparing for and filing one or more
plans of reorganization at the earliest possible date;
(f) perform any and all other legal services for the Debtor
in connection with the Chapter 11 case; and
(g) perform such legal services as the Debtor may request
with respect to any matter, including, but not limited
to, corporate finance and governance, contracts,
antitrust, labor, and tax.
Gerrit M. Pronske, Esq., a partner at PronskePatel, discloses that
he bills $500 per hour and Rakhee V. Patel, Esq., also a partner
at PronskePatel, bills $290 per hour. Mr. Pronske further
discloses that the Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partners $500 - $290
Legal Assistants $130
Mr. Pronske assures the Court that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not hold or represent any interest
adverse to the Debtors' estates.
Headquartered in Plano, Texas, AH-DH Apartments, Ltd., owns 16
apartment complexes. The company and three of its affiliates
filed for chapter 11 protection on Mar. 22, 2006 (Bank. E.D. Tex.
Case No. 06-40355). J. Mark Chevallier, Esq., at McGuire Craddock
& Strother, P.C., represents the Debtors. When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $50 million and $100 million.
DH Holdings Limited Partnership and DH Holdings GP, Inc., filed
for chapter 11 protection on Apr. 8, 2006 (Bankr. E.D. Tex. Case
Nos. 06-40479 and 06-40480). Another affiliate, DB Holdings, LLC,
filed for chapter 11 protection on Apr. 10, 2006 (Bankr. E.D. Tex.
Case No. 06-40484). The Debtors' chapter 11 cases are jointly
administered under Case No. 06-40355.
AIR CANADA: Settles Misconduct Litigation with Westjet Airlines
---------------------------------------------------------------
In 2003-2004, certain members of WestJet Airlines Ltd. management
engaged in an extensive practice of covertly accessing a password
protected proprietary employee web site maintained by Air Canada
Inc. to download detailed and commercially sensitive information
without authorization or consent from Air Canada. This practice
was undertaken with the knowledge and direction of the highest
management levels of WestJet and was not halted until discovered
by Air Canada.
This conduct was both unethical and unacceptable and WestJet
accepts full responsibility for such misconduct. WestJet
sincerely regrets having engaged in this practice and unreservedly
apologizes to Air Canada and Mr. Robert Milton.
As a full settlement, WestJet has agreed to pay Air Canada's
investigation and litigation costs of $5.5 million and has
accepted Air Canada's request that WestJet make a donation in the
amount of $10 million in the name of Air Canada and WestJet to
children's charities across the country.
Air Canada has accepted WestJet's apology and withdrawn its claims
in light of this settlement. All legal proceedings between the
parties have been terminated. Both parties have expressed a
desire to turn the page on this unfortunate chapter with finality
and are pleased that children's charities across Canada will also
benefit from this settlement arrangement.
About Westjet
WestJet Airlines Ltd. -- http://www.westjet.com/-- was founded in
1996 by Clive Beddoe, Mark Hill, Tim Morgan and Donald Bell, four
Calgary entrepreneurs who saw an opportunity to provide low fare
air travel across western Canada. The airline operates a fleet of
Boeing aircraft featuring new Next-Generation 737 aircraft with
leather seats and more legroom. Transborder service commenced in
the fall of 2004 to the cities of Los Angeles, San Francisco,
Phoenix, Fort Lauderdale, Tampa, Orlando, and New York. Service
to Palm Springs began in January 2005. WestJet is publicly traded
on the Toronto Stock Exchange under the symbol WJA.
About Air Canada
Air Canada -- http://www.aircanada.com/-- together with Air
Canada Jazz and other business units of parent company ACE
Aviation Holdings Inc. provide scheduled and charter air
transportation for passengers and cargo to more than 150
destinations, vacation packages to over 90 destinations, as well
as maintenance, ground handling and training services to other
airlines.
Canada's flag carrier is recognized as a leader in the global air
transportation market by pursuing a strategy based on value-added
customer service, technical excellence and passenger safety.
* * *
As reported in the Troubled Company Reporter on April 24, 2006,
Standard & Poor's Ratings Services raised the long-term corporate
credit rating on ACE Aviation Holdings Inc. to 'B+' from 'B',
while affirming the 'B' long-term corporate credit rating on its
wholly owned subsidiary, Air Canada. The outlook on both entities
remains stable.
ALLIED HOLDINGS: Court Approves 4th Amendment to DIP Loan Pact
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
approved the Fourth Amendment to Allied Holdings, Inc.'s Credit
Agreement with General Electric Capital Corporation, Morgan
Stanley Senior Funding, Inc., Marathon Structured Financing Fund,
L.P., GECC Capital Markets Group, Inc., and other lenders.
The Court also approves the Consent Agreement between the Debtors
and the lenders. The Consent Agreement extends until May 30,
2006, the date by which Allied is required to deliver to the
Lenders the Company's audited financial statements for the fiscal
year ended December 31, 2005, and other related deliveries
required under the terms of the DIP Facility.
In addition, the Court overruled the Objections filed by the
Official Committee of Unsecured Creditors against certain terms of
the amendment.
As reported in the Troubled Company Reporter on May 16, 2006, the
Committee asserted that any amendment to the Debtors' DIP Facility
Agreement should:
* resolve existing defaults;
* not expand the scope -- and increase the amount -- of
prepayment premiums;
* not force the Debtors to obtain additional financing without
adequate justification;
* not place the Debtors at risk of default; and
* assure that all future benchmarks are likely to be
attainable.
New advances must also not be subject to the Default Rate of
Interest, Richard B. Herzog, Jr., Esq., at Nelson Mullins Riley &
Scarborough, LLP, in Atlanta, Georgia, asserted.
Mr. Herzog informed the Court that the Debtors' Fourth Amendment
to their Credit Agreement and Loan Documents extends the
prepayment premium to Term Loan A, Term Loan B, the Protective
Overadvance, or all three. The Amendment does not guarantee the
Debtors any additional funding. It merely provides for additional
advances "up to $5,000,000" to be advanced by the Term Loan B
Agent "in its discretion," Mr. Herzog said.
To obtain approval of the Fourth Amendment, the Committee asked
the Court to require the Debtors to show whether:
1) the proposed financing is an exercise of sound and
reasonable business judgment;
2) alternative financing is available on any other basis;
3) the proposed financing is in the best interest of the
estates and their creditors;
4) any better offers, bids, or timely proposals are before the
Court;
5) the proposed financing is necessary to preserve the assets
of the estates, and is necessary, essential and appropriate
for the continued operation of the Debtors' businesses;
6) the terms of proposed financing are fair, reasonable and
adequate, given the circumstances of the Debtors and their
postpetition lenders; and
7) the financing agreement was negotiated in good faith and at
arm's-length between the Debtors and their postpetition
lenders.
Headquartered in Decatur, Georgia, Allied Holdings, Inc. (OTC Pink
Sheets: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its
affiliates provide short-haul services for original equipment
manufacturers and provide logistical services. The Company
and 22 of its affiliates filed for chapter 11 protection on
July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through
05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP,
represents the Debtors in their restructuring efforts. Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen
LLP, provides the Official Committee of Unsecured Creditors with
legal advice and Russell A. Belinsky at Chanin Capital Partners,
LLC, provides financial advisory services to the Committee. When
the Debtors filed for protection from their creditors, they
estimated more than $100 million in assets and debts. (Allied
Holdings Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ALLIED HOLDINGS: Inks Amended Delivery Agreement with Honda
-----------------------------------------------------------
Allied Holdings, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Northern District of Georgia for
permission to assume an Amended Agreement with American Honda
Motor Co., Inc., effective as of May 19, 2006.
Allied Systems, Ltd., and Honda entered into a motor
transportation contract in April 2002. Pursuant to the Agreement,
Allied Systems provides delivery and transportation services to
Honda in return for which Honda makes payments in accordance with
agreed rate terms.
In January 2006, the parties amended the Agreement to reflect,
among others, modifications to rate terms, a fuel surcharge
provision, and an extension to the original term.
Thomas R. Walker, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, notes that the Debtors have provided the terms of the
Agreement, as amended, to counsel for the Debtors' postpetition
lenders and counsel for the Official Committee of Unsecured
Creditors, subject to confidentiality agreements. Upon request,
the Debtors will provide a copy of the Second Amendment to the
Court for in camera review.
Mr. Walker says the terms of the Amendment are fair and favorable
to the Debtors. The Amended Agreement will be also be valuable
to the Debtors' ongoing business operations.
"By extending the Agreement and modifying rate terms, the
Amendment will provide Allied Systems with increased revenue flow
starting in April 2006 and continuing through the following
years," Mr. Walker explains.
The Debtors' request must be approved because they have met the
standard required to assume an executory contract, Mr. Walker
tells Judge Mullins.
Headquartered in Decatur, Georgia, Allied Holdings, Inc. (OTC Pink
Sheets: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its
affiliates provide short-haul services for original equipment
manufacturers and provide logistical services. The Company
and 22 of its affiliates filed for chapter 11 protection on
July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through
05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP,
represents the Debtors in their restructuring efforts. Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen
LLP, provides the Official Committee of Unsecured Creditors with
legal advice and Russell A. Belinsky at Chanin Capital Partners,
LLC, provides financial advisory services to the Committee. When
the Debtors filed for protection from their creditors, they
estimated more than $100 million in assets and debts. (Allied
Holdings Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AMERICAN ACHIEVEMENT: Restates 2005 Annual Report
-------------------------------------------------
American Achievement Corporation and AAC Group Holding Corp.
determined that the financial statements included in the Company's
Quarterly Reports on Form 10-Q for the quarters ended Feb. 25,
2006, and Nov. 26, 2005, and Annual Report on Form 10-K for the
year ended Aug. 27, 2005, should no longer be relied upon because
of the need to restate the financial statements.
The restatements correct the revenue recognition policy for class
ring and certain graduation products sales through independent
sales representatives to recognize revenue at the time rings and
certain graduation products are delivered to the student customer
rather than at the time rings and certain graduation products are
shipped to the independent sales representatives.
The restatements result in a deferral of previously recognized
revenue and related selling costs from the date of shipment of
rings and certain graduation products to sales representatives to
the date of delivery of these products to the student customer.
Full-text copies of the amended financial statements are available
for free at:
the year ended
Aug. 27, 2005 http://researcharchives.com/t/s?9f7
quarterly report
ended Nov. 26, 2005 http://researcharchives.com/t/s?9f8
quarterly report
ended Feb. 25, 2006 http://researcharchives.com/t/s?9f9
Austin, Texas-based American Achievement Corporation --
http://www.cbi-rings.com/-- provides products associated with
graduation and important event commemoration, with a legacy based
on the delivery of exceptionally well-crafted products, including
class rings, yearbooks, graduation products, achievement
publications and affinity jewelry through in-school and retail
distribution. AAC's premier brands include: Balfour and
ArtCarved, providers of class rings and graduation products; ECI,
publisher of Who's Who Among American High School Students(R);
Keepsake Fine Jewelry; and Taylor Publishing, publisher of
yearbooks. AAC has over 2,000 employees and is majority-owned by
Fenway Partners.
* * *
As reported in the Troubled Company Reporter on April 4, 2006,
Moody's Investors Service upgraded AAC Group Holding Corp.'s
corporate family rating to B1 from B2 and American Achievement
Corporation's senior secured credit facilities to Ba3 from B1 and
its senior subordinated notes to B2 from B3. Moody's also
affirmed the Caa1 rating for AAC Group Holding Corp.'s senior
discount notes.
As reported in the Troubled Company Reporter on March 17, 2006,
Standard & Poor's Ratings Services raised its bank loan rating
for American Achievement Corp. to 'BB-' from 'B+', and raised the
recovery rating to '1' from '3'.
AMERICAN CELLULAR: To Purchase Highland Cellular for $95 Million
----------------------------------------------------------------
American Cellular Corporation, a subsidiary of Dobson
Communications Corporation, agreed to purchase Highland Cellular
LLC, which provides cellular wireless service to southern West
Virginia and two adjacent counties in Virginia. The market is
primarily south of markets that Dobson owns and operates in West
Virginia, southern Ohio and Pennsylvania, and western Maryland.
The $95 million purchase is subject to customary closing
conditions and approval by the Federal Communications Commission,
which Dobson expects to gain in the second half of 2006.
Highland serves approximately 51,000 subscribers, and its market
has a population of approximately 352,000, which will nearly
double Dobson's market population in West Virginia. The purchase
includes 25 MHz of 850 MHz spectrum over West Virginia 7 RSA,
McDowell and Wyoming counties in WV 6 RSA, and Bland and Tazewell
counties in Virginia 2 RSA. Beckley and Bluefield are the two
largest cities in the region, which also includes the southern
portion of the Monongahela National Forest.
Highland has been operating its markets since 1991 under the brand
name of Cellular One(R), the brand name owned and used by Dobson
Communications. Highland provides GSM, TDMA and analog wireless
service on a network that includes 75 cell sites, eight of which
are company-owned.
Highland also owns PCS spectrum over West Virginia 5 RSA, McDowell
and Wyoming counties in WV 6 RSA, most of WV 7 RSA, and six
additional, adjacent counties in Virginia
Headquartered in Oklahoma City, American Cellular Corp. (Nasdaq:
DCEL) -- http://www.americancellular.net/-- is a rural and
suburban provider of wireless communications services in the
United States. The company provides wireless telephone service in
portions of Illinois, Kansas, Kentucky, Michigan, Minnesota, New
York, Ohio, Oklahoma, Pennsylvania, West Virginia and Wisconsin.
The company offers digital voice, data and other feature services
to subscribers through Global System for Mobile Communications,
General Packet Radio Service, Enhanced Data for GSM Evolution, and
Time Division Multiple Access, digital networks. At Dec. 31,
2005, the company's wireless telephone systems covered a total
population of 5.2 million and had approximately 669,700
subscribers with an aggregate market penetration of 13.0%.
American Cellular's 10% Senior Notes due 2011 carry Standard &
Poor's B- rating.
APPLETON PAPERS: Solicits Consents to Amend Senior Notes Contract
-----------------------------------------------------------------
Appleton Papers Inc. commenced, on May 26, 2006, a consent
solicitation to amend certain provisions of the indentures
governing its 8.125% Senior Notes due 2011 and 9.75% Senior
Subordinated Notes due 2014.
The proposed amendments will permit Appleton to make distributions
to Paperweight Development Corp., the parent company of Appleton,
to allow Paperweight to make certain payments that are required by
Appleton's employee stock ownership plan and applicable laws, and
to make other related changes to the restricted payments covenant
and the definitions in the each of the indentures.
The consent solicitation is scheduled to expire at 11:59 p.m., New
York City time, on June 9, 2006, unless extended.
The proposed amendments to each indenture will require, on or
prior to the expiration date, the consent of note holders of at
least a majority in aggregate principal amount of each of the
senior notes and senior subordinated notes that are outstanding as
of May 25, 2006.
In consideration of the holders' consent to the proposed
amendments, Appleton is offering to make a cash payment of $10 for
each $1,000 principal amount of notes held as of May 25, 2006, for
which consents have been received prior to the expiration date and
not validly revoked.
Additional information concerning the terms and conditions of the
consent solicitation and copies of the Consent Solicitation
Statement and related documents may be obtained from the
information agent:
Global Bondholders Services Corporation
65 Broadway, Suite 723
New York, New York 10006
Telephone (212) 430-3774 (banks and brokers)
Toll Free (866) 952-2200
Questions regarding the consent solicitation may be directed to:
UBS Securities LLC
Attn: Liability Management Group
Telephone (203) 719-4210
Toll Free at (888) 722-9555 ext. 4210
About Appleton
Headquartered in the Appleton, Wisconsin, Appleton Papers Inc. --
http://www.appletonideas.com/-- uses ideas that make a difference
to create product solutions through its development and use of
coating formulations and applications as well as encapsulation,
security, printing and packaging technologies. The Company
produces carbonless, thermal, security, and performance packaging
products and provides secure and specialized print services.
Appleton has manufacturing operations in Wisconsin, Ohio,
Pennsylvania, Massachusetts and the United Kingdom, employs
approximately 3,300 people, and is 100% employee-owned.
ARMSTRONG WORLD: Parent Company Earns $28 Million in First Quarter
------------------------------------------------------------------
Armstrong Holdings, Inc., the parent company of Armstrong World
Industries, Inc., disclosed its financial results for the first
quarter ended March 31, 2006, to the Securities and Exchange
Commission on April 26, 2006.
For the year ended March 31, 2006, the Company reported $28
million of net income on $876.6 million of net revenues, compared
to a $3 million net loss on $840.7 million of net revenues for the
year ended Dec. 31, 2005.
As of March 31, 2006, the Company's balance sheet showed total
assets of $4.6 billion and total debts of $5.9 billion, resulting
in $1.3 billion stockholders' deficit.
A full-text copy of Armstrong Holdings' Quarterly Report is
available for free at http://researcharchives.com/t/s?a1e
About Armstrong World
Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior floor coverings and ceiling
systems, around the world.
The Company and its debtor-affiliates filed for chapter 11
protection on December 6, 2000 (Bankr. Del. Case No. 00-04469).
Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell
C. Silberglied, Esq., at Richards, Layton & Finger, P.A.,
represent the Debtors in their restructuring efforts. The Debtors
tapped the Feinberg Group for analysis, evaluation, and treatment
of personal injury asbestos claims.
Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and
O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and
Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, represent the Official Committee of Unsecured Creditors.
The Creditors Committee tapped Houlihan Lokey for financial and
investment advice. The Official Committee of Asbestos Personal
Injury Claimant hired Ashby & Geddes as counsel.
When the Debtors filed for protection from their creditors, they
listed $4,032,200,000 in total assets and $3,296,900,000 in
liabilities.
ASARCO LLC: FCR & Asbestos Panel Balks at Estimation Protocol
-------------------------------------------------------------
Robert C. Pate, Future Claims Representative, informs the Court
that since the approval of the Stipulation realigning the parties
in the Adversary Proceeding, ASARCO LLC has asked for approval of
an estimation protocol in connection with its derivative
asbestos-related liabilities.
The FCR asserts that Phase I of the Estimation Motion is a
shocking reversal and is duplicative of the Adversary Proceeding.
Debra L. Innocenti, Esq., at Oppenheimer, Blend, Harrison, &
Tate, Inc., at San Antonio, Texas, points out that both Phase I
and the Estimation Motion seek determination of ASARCO's
derivative liability for asbestos claims against its Asbestos
Subsidiary Debtors.
Ms. Innocenti argues that since ASARCO has already filed a
Complaint, ASARCO has already joined the issues presented in the
Estimation Motion and has selected the forum and procedural
vehicle for litigating the derivative asbestos claims, and no
compelling reason exists to abandon that selection.
According to the "first filed rule," where two actions involving
overlapping issues and parties are pending in two federal courts,
there is a strong presumption that favors the forum of the first-
filed suit.
In addition, Ms. Innocenti contends that ASARCO's sudden desire
to move ahead towards confirmation with alacrity is artificial.
ASARCO must resolve a number of more important challenges before
it will be in a position to propose a plan of reorganization to
its creditors. A determination of ASARCO's derivative asbestos
liability is not the most significant impediment to ASARCO's
progress in its Chapter 11 case, Ms. Innocenti argues. If it
were, ASARCO should have proceeded with greater urgency in the
prosecution of the Adversary Proceeding, which has been on file
for nearly 10 months.
By attempting to dispose of the alter ego claims in an
accelerated and abbreviated fashion, ASARCO is asking those
claimants to fight this litigation not only with "both hands tied
behind their backs, but blindfolded and with both legs hobbled
for good measure," Ms. Innocenti says.
If the FCR determines that he must participate in the rigged
contest, Ms. Innocenti says, the FCR will join with no
institutional knowledge, no formal discovery and limited informal
fact development. The proposed shotgun schedule is inadequate
and unjust considering that the FCR has not been able to conduct
any investigation beyond procuring public documents, to shed
light on which witnesses should be called, Ms. Innocenti asserts.
If the FCR determines that he must not participate in the rigged
contest, any resulting order finding that no alter ego liability
exists would not bind future asbestos claimants. The FCR is
specifically appointed for the purposes of due process -- to
protect the rights and interests of future claimants, ensuring
there will be assets available in the future to pay future and
unknown claims on relative par with current claimants.
In light of ASARCO's attempt to short change the future claimants
of a meaningful discovery and litigation process for their alter
ego claims, it appears that to adequately represent the future
asbestos claimants, the FCR may need to decline to participate in
Phase I of the estimation hearing, Ms. Innocenti says.
Regardless of whether the FCR participates, ASARCO's estate will
likely have a Pyrrhic victory in a judgment by the Court finding
that no alter ego exists, Ms. Innocenti asserts. The judgment
will have no binding authority on future asbestos claimants if
the FCR does not participate in the proposed estimation hearing
and will likely be overturned as an exploitive, collusive
proceeding that did not afford future asbestos claimants truly
zealous representation if the FCR does not participate. The only
certain outcome will be a waste of judicial resources and the
Debtors' estates.
Asbestos Committee
Notwithstanding the Parties' expressed intent that the resolution
of the Alter Ego Theories asserting that ASARCO is liable for the
asbestos liabilities of the Asbestos Subsidiary Debtors would
take place through the current Adversary Proceeding, ASARCO
altered its position by filing the Estimation Motion, Jacob L.
Newton, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, notes.
Mr. Newton asserts that the proposed Estimation Motion attempts
to short-circuit the current adversary proceeding and deny the
Asbestos Committee's constituents their right to a meaningful day
in court.
The proposed estimation procedures deny the Plaintiffs the
procedural protections, and place the current adversary
proceeding on a fast track -- a track so fast as to deny all due
process rights to the Debtors' asbestos claimants.
Mr. Newton adds that ASARCO's proposed Phase I schedule of the
Estimation Motion gives the Asbestos Committee and the FCR no
time to conduct discovery, an omission that is particularly
unfair since the Asbestos Committee has outstanding requests for
production of documents to ASARCO that have remained unsatisfied
since October 2004.
In proffering procedures that give the Plaintiffs only six weeks
to conduct any discovery and in limiting the Plaintiffs to only
three witnesses, Mr. Newton says, ASARCO is effectively forcing
the Asbestos Committee and the FCR to pick among the various
legal theories that ASARCO itself has identified as potentially
valid.
Mr. Newton also asserts that asbestos victims, who have been
stayed from pursuing recovery for their injuries based on
ASARCO's bankruptcy petition, deserve nothing less than a full,
non-truncated trial of the merits of their claims against ASARCO,
including the full gamut of procedural and due process rights.
While the Asbestos Committee recognizes the Debtors' need to
obtain a reliable estimate of their asbestos liabilities, the
Asbestos Committee asserts that a typical asbestos estimation
proceeding, using the Debtors' pre-bankruptcy asbestos history
and expert projections of present and future liabilities, is the
optimal method for determining the scope of the Debtors' asbestos
liabilities.
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., 215/945-7000).
ASARCO LLC: Alvarez & Marsal Okayed as Fin'l & Turnaround Advisor
-----------------------------------------------------------------
Judge Schmidt of the U.S. Bankruptcy Court for the Southern
District of Texas in Corpus Christi authorizes ASARCO LLC to
employ Alvarez & Marsal LLC as its financial and restructuring
advisors on an interim basis.
ASARCO's Official Committee of Unsecured Creditors has until
June 1, 2006, to file an objection. If the Committee does not
file a timely objection, the Court's Order will become final.
As reported in the Troubled Company Reporter on May 11, 2006,
Alvarez & Marsal will provide consulting services to ASARCO's
Board of Directors under a two-phase program:
A. Phase I
* Assist ASARCO in cash flow forecasting, management and
reporting, business plan analysis and forecasting,
development of financial, accounting and operational
information and reports and other business management
and bankruptcy case administration issues;
* Evaluate financial, accounting, purchasing and supply
chain, tax, commercial and other administrative and
business-management functions and capacity of ASARCO,
develop a plan to improve ASARCO's administrative and
business-management functions and capacity; and
* Present the results to ASARCO's Board of Directors.
B. Phase II
* Continue to provide the services described in Phase I and
implement the plan approved by ASARCO's Board relative to
Phase I; and
* Provide other advisory management services as may be
requested by ASARCO and agreed by Alvarez & Marsal,
pursuant to an amendment to be executed by the parties
and approved by the Board.
The Debtors will pay Alvarez & Marsal's services on a hybrid
fixed-fee and hourly-basis compensation structure:
(a) $150,000, plus reimbursement for expenses, for services in
Phase I; and
(b) Customary hourly rates, subject to a 25% discount, for all
services it will provide after May 4, 2006:
Professionals Hourly Rates
------------- ------------
Managing Directors $475 - $675
Directors $375 - $450
Associates $300 - $350
Analysts $150 - $225
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., 215/945-7000).
ASARCO LLC: Encycle Trustee Wants to Hire American Appraisers
-------------------------------------------------------------
Mike Boudloche, the Chapter 7 trustee of Encycle/Texas, Inc.,
seeks authority from the U.S. Bankruptcy Court for the Southern
District of Texas in Corpus Christi to employ American Appraisers,
Inc. American Appraisers will assist the trustee in appraising
and evaluating 61 acres of real property in Corpus Christi, Texas.
Mr. Boudloche says AAI employees have extensive knowledge and
experience in rendering real estate appraisals in Nueces County,
Texas, and other areas.
AAI will be paid $5,000, with a retainer of $2,500.
Sidney H. Smith, III, president of American Appraisers, Inc.,
assures the Court that his firm does not represent any adverse
interest against Encycle/Texas, and is a "disinterested person"
as defined in Section 101(14).
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., 215/945-7000).
ATA AIRLINES: Inks Stipulation Allowing GOAA's Claim for $2 Mil.
----------------------------------------------------------------
The Hon. Basil H. Lorch of the U.S. Bankruptcy Court for the
Southern District of Indiana approved the stipulation between ATA
Airlines, Inc., and the Greater Orlando Aviation Authority in its
entirety. Claim No. 2052 will be allowed as a Class 6 General
unsecured Claim for $2,000,000, in full and complete satisfaction
of the Claim and the Objection.
Stipulation Reducing GOAA's Claim to $2,000,000
Before their bankruptcy filing, ATA and the Greater Orlando
Aviation Authority entered into an Airlines-Airport Lease and Use
Agreement dated January 1, 1996.
On May 27, 2005, GOAA filed Claim No. 2052 asserting a $5,878,929
unsecured non-priority claim.
In June 2005, the Reorganizing Debtors sought and obtained the
Court's authority to reject their Agreement with the GOAA. The
Reorganizing Debtors also objected to Claim No. 2052.
After arm's-length negotiations, the Reorganizing Debtors and the
GOAA settled their dispute and agreed that:
(a) Claim No. 2052 will be allowed as a Class 6 General
unsecured Claim for $2,000,000, in full and complete
satisfaction of the Claim and the Objection; and
(b) they will exchange mutual releases.
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. 54; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
BAYOU GROUP: Files for Chapter 11 Protection in New York
--------------------------------------------------------
The Bayou (Domestic) Hedge Funds filed for Chapter 11 bankruptcy
relief on May 30, 2006 in New York. Under the direction of Jeff
Marwil, the domestic Bayou entities' independent fiduciary and
partner at Jenner & Block, with the outside counsel of H. Jeffrey
Schwartz, partner in the bankruptcy and corporate reorganization
and insolvency practice at Dechert LLP, the failed hedge fund will
pursue recoveries for the benefit of defrauded investors under the
protection of Chapter 11.
In connection with filing Chapter 11, Bayou filed lawsuits against
former investors who allegedly received fictitious profits and an
inequitably large return of their principal investments. Mr.
Marwil said that he expects that "Bayou will file additional suits
against the remaining former investors to recover proceeds of
fraudulent conveyances for the benefit of innocent investors who
have received little, if anything, from Bayou." He further stated
that "the pendency of the Chapter 11 cases will provide a
convenient venue to efficiently investigate and pursue former
investors and other non-investor, third-parties allegedly
complicit in the fraud, with the goal of assuring an equality of
distribution among all of Bayou's investors. It is patently
unfair that certain former investors received all of their money
back, plus profit, while other investors received nothing. These
cases will be about equality of distribution, fairness and
equity," he said.
Jeff J. Marwil, a partner at Jenner & Block, was appointed on
April 28, 2006 as the federal equity receiver charged with the
duty to, among other things, seek recoveries for defrauded
investors who invested approximately $450 million, and otherwise
administer the liquidation of the domestic Bayou hedge funds. He
is a member of Jenner & Block's Bankruptcy, Workout and Corporate
Reorganization Practice and serves on the Firm's Management
Committee. Mr. Marwil is AV Peer Review Rated, Martindale-
Hubbell's highest peer recognition for ethical standards and legal
ability. He has a diverse practice with extensive experience in
both the boardroom and the courtroom, and regularly advises
fiduciaries in distressed situations.
The Bayou on-shore entities are being advised by H. Jeffrey
Schwartz, partner at the law firm of Dechert LLP, with assistance
of partners Edward A. McDonald and Gary J. Mennitt and associate
Elise Scherr Frejka. Mr. Schwartz has more than 25 years of major
reorganization and restructuring experience and was recognized in
Chambers USA, Ohio -- Bankruptcy/Restructuring 2004, 2005 and Best
Lawyers in America, 2004, 2005. He has extensive experience in
the reorganization practice under the Bankruptcy Code.
Headquartered in Chicago, Illinois, Bayou Hedge Funds operates and
manages hedge funds. The Company's founder, Samuel Israel III,
and chief financial officer Daniel Marino, have been charged with
fraud and conspiracy for defrauding investors of more than $450
million in hedge funds and using the funds for personal use.
BAYOU GROUP: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Bayou Group, LLC
Jeff J. Marwil, Esq.
c/o Jenner & Block LLP
One IBM Plaza
Chicago, Illinois 60611
Tel: (312) 923-2619
Fax: (312) 923-2719
Bankruptcy Case No.: 06-22306
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Bayou Management, LLC 06-22305
Bayou Superfund, LLC 06-22307
Bayou No Leverage Fund, LLC 06-22308
Bayou Affiliates Fund, LLC 06-22309
Bayou Accredited Fund, LLC 06-22310
Bayou Fund, LLC 06-22311
Bayou Advisors, LLC 06-22312
Bayou Equities, LLC 06-22313
Type of Business: The Debtors operate and manage hedge funds.
The Debtors' founder, Samuel Israel III, and
chief financial officer Daniel Marino, have been
charged with fraud and conspiracy for defrauding
investors of more than $450 million in hedge
funds and using the funds for personal use.
Jeff J. Marwil, Esq., a partner at Jenner &
Block LLP, has been appointed receiver and sole
managing member of the Debtor and its
affiliates.
Chapter 11 Petition Date: May 30, 2006
Court: Southern District of New York (White Plains)
Judge: Adlai S. Hardin Jr.
Debtors' Counsel: Elise Scherr Frejka, Esq.
Dechert LLP
30 Rockefeller Plaza
New York, New York 10112
Tel: (212) 649-8734
Fax: (212) 698-3599
Estimated Assets: More than $100 Million
Estimated Debts: More than $100 Million
The Debtors did not file a list of their 20 largest unsecured
creditors.
BERRY-HILL GALLERIES: Court Sets June 15 as Governmental Bar Date
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
set June 15, 2006, as the deadline for all government entities
owed money by Berry-Hill Galleries, Inc., and its debtor-
affiliate, Coram Capital LLC, on account of claims arising prior
to Dec. 8, 2005, to file their proofs of claim.
Government units must file written proofs of claim on or before
the June 15 Claims Bar Date either by mail to:
U.S. Bankruptcy Court
Southern District of New York
Attn: Berry-Hill/Coram Claims Processing
Bowling Green Station, P.O. Box 5187
New York, New York 10274-5187
or courier:
U.S. Bankruptcy Court
Southern District of New York
Attn: Berry-Hill/Coram Claims Processing
One Bowling Green, Room 534
New York, New York 10004-1408
Headquartered in New York, New York, Berry-Hill Galleries, Inc.
-- http://www.berry-hill.com/-- buys paintings and sculpture
through outright purchase or on a commission basis and also
exhibits artworks. The Debtor and its affiliate, Coram Capital
LLC, filed for chapter 11 protection on Dec. 8, 2005 (Bankr.
S.D.N.Y. Case Nos. 05-60169 & 05-60170). Robert T. Schmidt, Esq.,
at Kramer, Levin, Naftalis & Frankel, LLP, represents the Debtors
in their restructuring efforts. When the Debtors filed for
protection from their creditors, they estimated assets between
$10 million and $100 million and debts between $1 million and
$50 million.
BIJOU-MARKET: Court Sets July 3 as Deadline for Filing of Claims
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
established July 3, 2006 as the deadline for filing proofs of
claims in Bijou-Market, LLC's chapter 11 cases.
All proofs of claim must be filed with the Clerk of the Bankruptcy
Court, and sent either by mail or courier to this address:
Office of the Clerk
U.S. Bankruptcy Court
Northern District of California
19th Floor, 235 Pine Street,
San Francisco, CA 94104
Bijou-Market, LLC -- http://www.msclive.com/-- operates an adult
entertainment facility on Market Street in San Francisco. The
company filed for chapter 11 protection on Feb. 28, 2006 (Bankr.
N.D. Calif. Case No. 06-30118). Michael St. James, Esq., at St.
James Law, P.C., represents the Debtor in its restructuring
efforts. No Official Committee of Unsecured Creditors has been
appointed in this case to date. When the Debtor filed for
protection from its creditors, it listed assets totaling $620,458
and debts totaling $66,308,352.
BUCKEYE TECHNOLOGIES: Posts $795,000 Net Loss in 2006 1st Quarter
-----------------------------------------------------------------
Buckeye Technologies, Inc., reported a $795,000 net loss on $181.4
million of net revenues for the first quarter ended March 31,
2006, compared to $4 million of net income on $180.9 million of
net revenues for the year ended Dec. 31, 2005.
As of March 31, 2006, the Company's balance sheet showed total
assets of $969.7 million and total debts of $688.3 million.
A full-text copy of Buckeye Technologies' Quarterly Report is
available for free at http://researcharchives.com/t/s?a22
Headquartered in Memphis, Tennessee, Buckeye Technologies, Inc. --
http://www.bkitech.com/-- is a leading manufacturer and marketer
of specialty fibers and nonwoven materials. The Company currently
operates facilities in the United States, Germany, Canada, and
Brazil. Its products are sold worldwide to makers of consumer and
industrial goods.
* * *
As reported in the Troubled Company Reporter on March 9, 2006,
Standard & Poor's Ratings Services revised its outlook on Buckeye
Technologies Inc. to negative from stable. At the same time,
Standard & Poor's affirmed its ratings, including the 'BB-'
corporate credit rating, on the Memphis, Tennessee-based specialty
pulp producer.
CATHOLIC CHURCH: Dufresne Wants Portland's Claim Estimation Denied
------------------------------------------------------------------
Nathan DuFresne asks the U.S. Bankruptcy Court for the District of
Oregon to deny the Archdiocese of Portland in Oregon's request to
estimate his claim.
Karl I. Mullen, Esq., in Portland, Oregon, argues that due to the
Archdiocese's motions and actions, Mr. DuFresne was not able to
obtain the discovery needed to establish the value of his claim.
Disclosing much of Mr. DuFresne's evidence at this point would
greatly harm his ability to prove his case at trial.
Mr. Mullen asserts that Mr. DuFresne's claims should be estimated
at $2,250,000 as average value.
There is no need to estimate, Mr. Mullen contends. The face value
of all of the claims is substantially less than the value of the
Archdiocese's assets.
Moreover, the evidence that Mr. DuFresne submitted is sufficient
to establish the face value of his claim, Mr. Mullen says. In
addition, estimation is not a proper procedure in the
circumstances of Mr. DuFresne's case and the bankruptcy case.
Mr. DuFresne, therefore, asks the Court to estimate his claims at
$2,250,000 average value, or at its face value -- $919,700 as
compensatory damages and $9,000,000 as punitive damages.
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. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000)
CATHOLIC CHURCH: Tucson Panel Wants to Settle Claim for $367,500
----------------------------------------------------------------
To avoid the risks of litigation, the Official Committee of Tort
Claimants and the holder of Claim No. 79 entered into a
stipulation with the Diocese of Tucson resolving the dispute over
the Claim.
The Tort Claimants Committee asks the U.S. Bankruptcy Court for
the District of Arizona to approve the Stipulation.
The terms of the Stipulation are:
(a) Claimant No. 79 will have an Allowed Tort Claim for
$367,500. Claimant No. 79 waives any claims for further
distributions afforded to Settling Tort Claimants
pursuant to the Diocese's Plan of Reorganization;
(b) Claimant No. 79 will immediately receive an initial
distribution amount.
The Initial Distribution Amounts for each Tier are:
(i) Tier 1: $100,000;
(ii) Tier 2: $200,000;
(iii) Tier 3: $425,000;
(iv) Tier 4: $600,000; and
(v) California Tier: $300,000.
The claims of parents or spouses of Claimant No. 79, who
have Tort Claims, will receive 5% of the highest amount
recovered by Claimant No. 79 as provided in the Plan.
The Stipulation with each Relationship Tort Claimant is
consistent with the terms of the Plan;
(c) The Committee agree that the distributions and any other
compensation being made to Claimant No. 79 pursuant to
the Stipulation and the Plan are for compensation of his
or her claims for physical injury. The Committee further
agree that it would cooperate with Claimant No. 79 and
the Claimant's attorneys to draft and execute the
appropriate documents to allow the Claimant to place all
or any portion of the distributions in an annuity or
structured settlement, if the Claimant elects;
(d) To the extent it is necessary to determine the full extent
of the Diocese's liability to Claimant No. 79 on account
of Tier 1, Tier 2, Tier 3, Tier 4, California Tier Claims
or Relationship Tort Claims, the parties agree that the
determinations will be made in a proceeding which may be
before the Bankruptcy Court; provided, however, that
notwithstanding the amount of the liability, Claimant No.
79 agree:
-- to be bound by the terms of the Plan in accordance with
the Stipulation; and
-- not to seek further or additional recovery from the
Diocese so long as the Plan provides for treatment of
the Claimant's tort claims in accordance with the terms
of the Stipulation.
O'Connor Objects
On behalf of claimant Brian O'Connor, Walter F. Wood, Esq., in
Tucson, Arizona, asserts that the proposed settlement of Claim
No. 79 does not comport with the provisions of the Plan.
Mr. Wood notes that the Tucson Diocese's Plan provides a tiered
structure for all of the claims of purported victims. Each tier
contained a specific set of facts that denominated and
characterized that tier. Each tier was assigned a compensatory
dollar amount that would be paid to a claim holder upon approval
and "tiering" of the claim.
Each tier also has the capability of receiving additional payments
from the funding pool if certain factors occurred, or did not
occur, Mr. Wood notes. Part of the funding pool was money set
aside for future claimants, which will be distributed among the
tiers when and if no future claimants timely file claims.
The risk of receiving more than the initial distribution falls to
those who have previously negotiated their specific tier placement
based upon the treatment of tiers set out in the Plan, Mr. Wood
points out.
Mr. Wood argues that the proposed settlement gives no authority
for creating a special "tier" or class for Claim No. 79 and offers
no "consideration" for the treatment.
According to Mr. Wood, his client, Mr. O'Connor, settled and
agreed to a Tier 2 claim based on the provisions of the Plan that
called for the risk of future recovery to be born equally by all
victims within a tier.
Thus, Mr. O'Connor, in his personal capacity, asks the Court to
deny the settlement agreement entered into by the Tort Committee
and the Diocese with Claimant No. 79.
Tort Committee Replies
Mr. O'Connor misapprehends both the operation of the Plan and the
nature of the settlement, Warren J. Stapleton, Esq., at Stinson
Morrison Hecker LLP, in Phoenix, Arizona, asserts.
Although the Plan sets out a tiered structure for resolution of
tort claims, that does not prohibit a tort claimant from reaching
a settlement outside of the tier structure, Mr. Stapleton
contends.
"[N]owhere in his objection does Objector identify language in the
Plan which would prevent the parties from reaching a negotiated
settlement," Mr. Stapleton says.
Mr. Stapleton tells the Court that the Committee disputed
Claimant No. 79's claim to a Tier 3 placement, although it did not
dispute placement in Tier 2. The Committee acknowledged that
there was nevertheless some risk that Claimant No. 79 would be
given a Tier 3 placement after discovery and litigation before a
special arbitrator.
To avoid the litigation and the risk that the Special Arbitrator
would award Claimant No. 79 placement in Tier 3, a one-time cash
settlement was reached for the projected amount that a Tier 2
claimant is likely to ultimately receive.
The circumstances of individual tort claims are unique, Mr.
Stapleton points out. "[Mr. O'Connor], himself chose settlement
on the terms offered him rather than litigation."
Hence, the Tort Committee asks the Court to approve the settlement
with Claimant No. 79.
Tort claimant John Doe XXIII supports the Tort Committee's
arguments.
Diocese of Tucson
The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese. (Catholic Church Bankruptcy News, Issue No. 58
Bankruptcy Creditors' Service, Inc., 215/945-7000)
CATHOLIC CHURCH: Portland Asks Court to Disallow Claim No. 437
--------------------------------------------------------------
The holder of Claim No. 437 filed his proof of claim against the
Archdiocese of Portland in Oregon on April 28, 2005.
The Archdiocese scheduled the deposition on April 18, 2006. But
neither Claimant No. 437, nor his lawyer, appeared for the
deposition.
For this reason, the Archdiocese asks the U.S. Bankruptcy Court
for the District of Oregon to:
(a) disallow Claim No. 437 in its entirety; and
(b) compel Claimant No. 437 to pay the appearance fee for the
court reporter and the videographer, incurred as a result
of his non-compliance.
Margaret Hoffmann, Esq., at Schwabe, Williamson & Wyatt, PC, in
Portland, Oregon, relates that at the initial phase of discovery,
all of Claimant No. 437's allegations were "recent enough" to fall
within the criminal statute of limitations for child sex abuse.
The Archdiocese subsequently asked Judge Perris to compel Claimant
No. 437 to submit to a deposition. The Archdiocese asserted that
Claimant No. 437's testimony was integral to the:
-- resolution of Fifth Amendment issues; and
-- the Archdiocese's ability to resolve claims of other
claimants involving the same accused priest.
Since that time, Ms. Hoffmann further relates that she made
several attempts to schedule Claimant No. 437's deposition. In
November 2005, Claimant No. 437's attorney wrote the Archdiocese,
explaining that the deposition cannot be conducted because he
cannot locate his client.
Claimant No. 437's Counsel Responds
On behalf of Claimant No. 437, Gary Bisaccio, Esq., in Portland,
Oregon, tells Judge Perris that Ms. Hoffman arranged for a court
reporter and videographer to appear for a deposition she knew
would not take place.
Mr. Bisaccio also tells the Court that, on several occasions, he
told Ms. Hoffman that his client did not wish to submit to a
deposition. He also told Ms. Hoffman not to incur costs related
to the proceeding. But Ms. Hoffman went on to arrange for the
deposition.
Hence, Mr. Bisaccio asks the Court to charge the deposition
expenses against the Archdiocese.
Mr. Bisaccio, in a separate pleading, asks the Court to be
relieved as counsel for Claimant No. 437.
Mr. Bisaccio says Claimant No. 437 has refused to communicate and
cooperate with him, a conduct, which has, in effect,
constructively relieved him of his ability and obligation to
proceed on the Claimant's behalf.
The Archdiocese of Portland
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. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000)
CERVANTES ORCHARDS: Deere Says Disclosure Statement is Incomplete
-----------------------------------------------------------------
Deere Credit, Inc. objects to the disclosure statement filed by
Cervantes Orchards & Vineyards, LLC for lack of adequate
information.
Deere Credit questions, among others, the Debtor's revenue and
expense projections for 2006 through 2009.
Deere Credit asserts that the projections should include:
a) information allowing creditors to understand the revenue
assumptions by the Debtor;
b) information showing how the payments proposed in the Plan
will work into the Debtor's cash flow; and
c) detailing any contributions to be made by the Debtor's
related entities to support the Plan.
Additionally, Deere Credit wants the Disclosure Statement amended.
According to the Debtor's valuation, Deere Credit is an
oversecured creditor and is entitled to full value of its claim
under the Plan. However, Deere Credit argues that the Disclosure
Statement did not accurately reflect the amount of its claim.
Headquartered in Sunnyside, Washington, Cervantes Orchards and
Vineyards LLC filed for chapter 11 protection on Aug. 19, 2005
(Bankr. E.D. Wash. Case No. 05-06600). R. Bruce Johnston, Esq.,
at Law Offices of R. Bruce Johnston represents the Debtor in its
restructuring efforts. No Official Committee of Unsecured
Creditors has been appointed in this case. When the Debtor filed
for protection from its creditors, it listed estimated assets of
$10 million to $50 million and estimated debts of $1 million to
$10 million.
CHEMTURA CORP: Gets $85 Million from Water Additives Unit Sale
--------------------------------------------------------------
Chemtura Corporation completed the sale of its Industrial Water
Additives business to an affiliate of Close Brothers Private
Equity LLP, a U.K. firm, on May 15, 2006. In connection with this
transaction the company received $85 million in cash. Excluded
from the sale is the LiquiBrom(R) product line. Proceeds from the
sale will be used primarily for debt reduction.
"We are very happy to announce the completion of this transaction,
which we believe will benefit all parties. Industrial Water
Additives is a strong enterprise, which we expect will do well
with Close Brothers, but it doesn't fit our strategy of
concentrating on core businesses that will produce the greatest
results for us," said Chemtura Chairman and CEO Robert L. Wood.
No facilities were included in the transaction. Chemtura will
continue to manufacture products in its Adrian, Mich., and
Trafford Park, U.K. facilities and sell to the purchaser via
supply agreements. Industrial Water Additives' approximately 40
non-manufacturing employees will become employees of BWA Water
Additives, a CBPE affiliate. BWA will act as distributor for the
LiquiBrom product line. There will be no gain or loss booked on
the transaction, which is expected to be dilutive to earnings by
$0.01 in 2006 and $0.02 in 2007.
Industrial Water Additives had pro forma 2005 revenues of
approximately $80 million, excluding the LiquiBrom product line.
Industrial Water Additives is a major producer of organic,
polymer-based antiscalants and corrosion inhibitors and bromine-
based biocides. Its Belclene(R), Belcor(R), Belgard(R),
Belite(R), Bellacide(R), Bellasol(R), Belsperse(R), BromiCide(R),
Flocon(R) and LiquiBrom products help to control scale, corrosion,
foam and problem organisms in industrial cooling, industrial and
municipal wastewater treatment, pulp and paper processing, food
processing, and desalination processes.
About Chemtura Corporation
Headquartered in Middlebury, Connecticut, Chemtura Corporation
(NYSE: CEM) -- http://www.chemtura.com/-- is a global
manufacturer and marketer of specialty chemicals, crop protection
and pool, spa and home care products. With pro forma 2005 sales
of $3.9 billion, the company has approximately 7,300 employees
around the world.
* * *
As reported in the Troubled Company Reporter on Mar 17, 2006,
Standard & Poor's Ratings Services revised its outlook on
Middlebury, Connecticut-based Chemtura Corp. to positive from
stable and affirmed the existing 'BB+' ratings.
As reported in the Troubled Company Reporter on Sept. 26, 2005,
Moody's Investors Service affirmed Ba1 ratings on all of Chemtura
Corporation's outstanding $1.27 billion of senior unsecured debt
obligations, and changed the outlook on the company's ratings to
negative from stable.
CLARION TECHNOLOGIES: Posts $2.4 Mil. Net Loss in First Quarter
---------------------------------------------------------------
Clarion Technologies, Inc., filed its financial results for the
first quarter ended April 1, 2006, with the Securities and
Exchange Commission on May 16, 2006.
For the three months ended April 1, 2006, the company reported a
$2.4 million net loss on $35.8 million of net revenues compared to
a $2.8 million net loss on $32.3 million of net revenues for the
quarter ended April 2, 2005.
At April 1, 2006, the company's balance sheet showed total assets
of $73.6 million and total debts of $108.7 million, resulting in a
$91.7 million stockholders' deficit. As of April 1, 2006, the
Company's accumulated deficit widened to $123.9 million from a
$118.3 million accumulated deficit at Dec. 31, 2005.
A full-text copy of Clarion Technologies' Quarterly Report is
available for free at http://researcharchives.com/t/s?9ee
Going Concern Doubt
As reported in the Troubled Company Reporter on April 27, 2006,
BDO Seidman, LLP, raised substantial doubt about Clarion
Technologies, Inc.'s ability to continue as a going concern after
it audited the company's financial statements for the year ended
Dec. 31, 2005. The auditing firm points to the company's
recurring losses from operations, working capital deficit,
accumulated deficit and violation of certain covenants in its loan
agreements.
Headquartered in Grand Rapids, Michigan, Clarion Technologies,
Inc. -- http://www.clariontechnologies.com/-- creates products
and parts for the automotive, furniture and consumer goods
industry.
CLEAN EARTH: Gets Interim Access to $750,000 DIP Financing
----------------------------------------------------------
The Hon. Joseph M. Scott of the U.S. Bankruptcy Court for the
Eastern District of Kentucky in Lexington allowed Clean Earth
Kentucky, LLC, and its debtor-affiliate, Clean Earth Environmental
Group, LLC, on an interim basis, to obtain postpetition secured
loans of up to $750,000 from US Acquisition, LLC.
US Acquisition is successor-in-interest to National City Bank of
Kentucky. When they filed for bankruptcy, the Debtors had
approximately $14 million in disputed secured and unsecured debts
owed to the bank.
The Debtors tell the Court that the DIP loan proceeds will be used
to pay their employees and finance their operations pursuant to
the New Loan Agreement.
As security for the New Obligations, the Debtors grant the lenders
valid, perfected, and enforceable security interests and liens.
US Acquisition's lien in the collateral will be a first priority,
senior, perfected lien securing the full amount of the New
Obligations.
Headquartered in Cynthiana, Kentucky, Clean Earth Kentucky, LLC --
http://www.cleanearthllc.com/-- manufactures specialized sewer
machines, street sweepers, and refuse trucks. The Company and its
affiliate, Clean Earth Environmental Group, LLC, filed for chapter
11 protection on Jan. 24, 2006. (Bankr. E.D. Ky. Case No.
06-50052). Laura Day DelCotto, Esq., at Wise DelCotto PLLC,
represents the Debtors in their restructuring efforts. R. Scott
Williams, Esq., at Haskell Slaughter Young & Rediker, LLC,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from its creditors, they
estimated individual assets and debts between $10 million to
$50 million.
CLEAN EARTH: Has Until June 30 to File Chapter 11 Plan
------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky
extended until June 30, 2006, the period within which Clean Earth
Kentucky, LLC, and Clean Earth Environmental Group, LLC, have the
exclusive right to file their chapter 11 Plan. The Debtors also
have until Aug. 30, 2006, to solicit acceptances of that Plan.
The Debtors tell the Court that the extension will give them more
time to formulate their disclosure statements and plans. They add
that it will allow them to focus on the operations left after
selling part of their assets and to determine how best to use
these operations in their restructuring efforts.
Headquartered in Cynthiana, Kentucky, Clean Earth Kentucky, LLC --
http://www.cleanearthllc.com/-- manufactures specialized sewer
machines, street sweepers, and refuse trucks. The Company and its
affiliate, Clean Earth Environmental Group, LLC, filed for chapter
11 protection on Jan. 24, 2006. (Bankr. E.D. Ky. Case No.
06-50052). Laura Day DelCotto, Esq., at Wise DelCotto PLLC,
represents the Debtors in their restructuring efforts. R. Scott
Williams, Esq., at Haskell Slaughter Young & Rediker, LLC,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from its creditors, they
estimated individual assets and debts between $10 million to $50
million.
CLEAN EARTH: Court Approves Phil Daetwyler's Retention as COO
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky
approved the request of Clean Earth Kentucky, LLC, and Clean Earth
Environmental Group, LLC, to retain Phil Daetwyler as their Chief
Operating Officer, nunc pro tunc to May 2, 2006.
The Debtors believe that Mr. Daetwyler is well qualified and able
to oversee the Debtors' operations in a cost-effective, efficient
and timely manner. Mr. Daetwyler will be paid $150,000 per annum
plus benefits, and other bonuses.
To the best of the Debtors' knowledge, Mr. Daetwyler is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Cynthiana, Kentucky, Clean Earth Kentucky, LLC --
http://www.cleanearthllc.com/-- manufactures specialized sewer
machines, street sweepers, and refuse trucks. The Company and its
affiliate, Clean Earth Environmental Group, LLC, filed for chapter
11 protection on Jan. 24, 2006. (Bankr. E.D. Ky. Case No.
06-50052). Laura Day DelCotto, Esq., at Wise DelCotto PLLC,
represents the Debtors in their restructuring efforts. R. Scott
Williams, Esq., at Haskell Slaughter Young & Rediker, LLC,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from its creditors, they
estimated individual assets and debts between $10 million to $50
million.
CMS ENERGY: Posts $27 Million Net Loss in 2006 First Quarter
------------------------------------------------------------
CMS Energy incurred a net loss of $27 million for the first
quarter of 2006 compared to a net income of $150 million in the
same quarter of 2005.
The expected reversal of $74 million of mark-to-market gains
recorded in 2005 was the primary factor in the loss. Mark-to-
market is a non-cash accounting adjustment that primarily reflects
changes in the value of certain natural gas contracts.
The Company's adjusted results for the first quarter of 2006,
excluding mark-to-market effects, were net income of $48 million
compared to $73 million in the same period for 2005. The year-
over-year drop in the adjusted results, excluding mark-to-market,
was caused primarily by lower gas and electric sales due to much
warmer weather during the quarter compared to the first quarter of
2005, including the warmest January on record.
CMS Energy maintained its guidance for 2006 adjusted earnings,
excluding mark-to-market impacts, of about $1 per share. The
Company reiterated that its 2006 reported earnings are likely to
be substantially lower than its adjusted earnings because of the
expected reversal of mark-to-market gains and losses from
potential asset sales. CMS Energy isn't providing specific
reported earnings guidance because of the uncertainties associated
with those factors.
"The weather and high natural gas prices have been challenging.
However, operating performance continues to be strong, and we
continue to make progress on our plan" said David Joos, president
and chief executive officer of CMS Energy.
CMCMS Energy is an integrated energy company, which has as its
primary business operations an electric and natural gas utility,
natural gas pipeline systems, and independent power generation.
* * *
As reported in the Troubled Company Reporter on Feb. 2, 2006,
Standard & Poor's Ratings Services affirmed its 'BB' long-term
corporate credit ratings on public utility holding company, CMS
Energy Corp., and its regulated utility subsidiary, Consumers
Energy Co., and removed the ratings from CreditWatch with negative
implications.
Standard & Poor's also affirmed its 'B-1' short-term corporate
credit rating on CMS and removed the rating from CreditWatch with
negative implications. S&P said the outlook is stable.
As reported in the Troubled Company Reporter on Dec. 12, 2005,
Fitch Ratings has assigned a rating of 'BB-' to CMS Energy Corp.'s
$125 million issuance of 6.875% senior unsecured notes, due
Dec. 15, 2015. Fitch said the Rating Outlook for CMS is
Stable.
COMCAST CORP: Earns $466 Million in First Quarter Ended March 31
----------------------------------------------------------------
Comcast Corporation disclosed its financial results for the first
quarter ended March 31, 2006, to the Securities and Exchange
Commission on April 28, 2006.
For the year ended March 31, 2006, the Company reported $466
million of net income on $5.9 billion of net revenues, compared to
$143 million of net income on $5.4 million of net revenues for the
year ended Dec. 31, 2005.
As of March 31, 2006, the Company's balance sheet showed total
assets of $103 billion and total debts of $62.9 billion.
A full-text copy of Comcast Corp.'s Quarterly Report is available
for free at http://researcharchives.com/t/s?a25
Headquartered in Philadelphia, Pennsylvania, Comcast Corp. --
http://www.comcast.com/-- provides cable, and other consumer
entertainment and communication products and services in the
United States.
Comcast Corp.'s preferred stock carries Moody's Investors
Service's Ba1 Rating.
DEATH ROW: U.S. Trustee Appoints Five-Member Creditors Committee
----------------------------------------------------------------
The U.S. Trustee for Region 16 appointed five creditors to serve
on an Official Committee of Unsecured Creditors in Death Row
Records Inc. and its debtor-affiliates' chapter 11 cases:
1. Afeni Shakur
c/o Brian Bloom, Esq.,
Cozen O'Connor
777 S. Figueroa Street, Ste 2850
Los Angeles, CA 90017
Tel: 213-892-7900
212-453-3750
2. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro LLP
c/o Mark L. Block, Esq.
10250 Constellation Blvd., 19th Floor
Los Angeles, CA 90067
Tel: 340-282-6240
Fax: 310-550-2920
3. Amanda Metcalf, Esq.,
29 Marin Bay Park Court
San Rafael, CS 94901
415-454-0945
4. Lydia Harris
c/o David Lally, Esq.
26895 Aliso Creek Road
Suite B663
Aliso Viejo, CA 92656
Tel: 949-349-0022
Fax: 949-349-0019
5. Dwayne Baudy
c/o Joseph E. Porter, III, Esq.
206 3rd Street
Seal Beach, CA 90740
Tel: 562-493-3940
Fax: 562-493-3670
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 Compton, California, Death Row Records Inc. --
http://www.deathrowrecords.net/-- is an independent record
producer. The company and its owner, Marion Knight, Jr., filed
for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif.
Case No. 06-11205 and 06-11187). Daniel J. McCarthy, Esq., at
Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq.,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
total assets of $1,500,000 and total debts of $119,794,000.
DND TECHNOLOGIES: March 31 Balance Sheet Upside Down by $6.9 Mil.
-----------------------------------------------------------------
DND Technologies, Inc., filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 19, 2006.
The Company reported a $417,823 net loss on $1,988,370 of total
revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $3,243,398
in total assets and $10,199,072 in total liabilities, resulting in
a $6,955,674 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $2,979,915 in total current assets available to pay
$10,175,792 in total current liabilities coming due within the
next 12 months.
Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a1a
Going Concern Doubt
As reported in the Troubled Company Reporter on May 22, 2006,
Farber Hass Hurley & McEwen LLP raised substantial doubt about DND
Technologies, Inc.'s ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
year ended Dec. 31, 2005. The auditor pointed to the Company's
losses, negative working capital, receipt of a license agreement
termination notice for its agreement with a major supplier, and
default on the majority of its term debt.
Headquartered in Chandler, Arizona, DND Technologies, Inc.'s
(OTCBB: DNDT) operating subsidiary, Aspect Systems, Inc. --
http://www.aspectsys.com/-- supplies semiconductor manufacturing
equipment and complete after-market support, which includes spare
parts and assemblies, and various engineering services. Through
licensing agreements negotiated with Lam Research Corporation and
Axcelis Technologies, Inc., ASI has become the original equipment
manufacturer of AutoEtch plasma etch systems originally designed
by Lam, and plasma etch and strip products manufactured on the ASI
MX-1 and ASI MX-10, and the Arista and Arista Dual platforms. ASI
also offers new and refurbished support products including a wide
array of sub-assemblies, both consumable and non-consumable repair
and process related parts, and remanufactured temperature control
units that are designed to maintain critical operating
temperatures for the plasma systems.
EASYLINK SERVICES: Posts $376,000 Net Loss in 2006 First Quarter
----------------------------------------------------------------
EasyLink Services Corporation generated $18.5 million of revenues
for the first quarter of 2006 ended March 31, 2006, as compared to
$18.5 million during the fourth quarter of 2005 and $20.4 million
in the first quarter of 2005.
The Company reported a $376,000 net loss during the first quarter,
in contrast to a $2,741,000 net loss for the same period in 2005.
The Company's cash and cash equivalents balance at the end of the
first quarter 2006 was $4.1 million as compared to $6.3 million as
of Dec. 31, 2005. The decline in cash includes principal payments
on existing debt of $1.6 million as required by the Company's
amended Credit agreement with Wells Fargo Foothill.
Subsequent to March 31, 2006, EasyLink raised $5.4 million in new
equity financing. Approximately $3 million of the proceeds were
used to prepay a portion of the Company's debt with Wells Fargo as
required by the Credit Agreement that reduced its debt remaining
with Wells Fargo to $5.8 million as of April 30, 2006. The
balance of the proceeds totaling $2.4 million will be used for
working capital purposes. For the quarter ended March 31, 2006,
net cash from operating activities was approximately breakeven.
Thomas Murawski, Chairman, President and Chief Executive Officer
of EasyLink, said, "The first quarter of 2006 was a strong quarter
for us in several key areas including a 10.6% quarterly revenue
increase in our Transaction Management Services.
"Total revenue was about even with last quarter; however, based on
improved sales productivity we have sufficient momentum to enable
us to forecast the second quarter of 2006 to be the first quarter
with total revenue growth since we became EasyLink Services.
"This positive outcome is the result of the diligent execution of
our strategy to re-architect our company around Transaction
Management Services to put the company on a sustainable growth
footing. Transaction Management Services represented 25% of total
company revenue in the first quarter, up from 18% a year ago.
"We expect this percentage to increase to between 27% to 30%
during the second quarter of 2006 driven by the growth in our
Transaction Management Services which includes the anticipated
closure of a software sale that would generate a one time fee
rather than recurring revenue.
"In summary, EasyLink has made a good start to 2006, and our
revenue, implementation, retention and pipeline indicators are
favorable for the second quarter as well, which should drive
forecasted revenue growth.
"Looking beyond just the numbers, our team sees continual
reaffirmation of our strategy on a daily basis with our existing
customers and new prospects. While it's clear that EasyLink's
corporate execution is improving, most recently through sales
productivity gains and on a continuous basis through Six Sigma, it
is also becoming increasingly apparent that the demand for our
unique mix of outsourced business process automation services is
on the increase.
"We see this through increased requests for proposal from Fortune
500 companies, activity and interest at trade events, inbound
inquiries through our websites and telesales group, project
opportunities arising from our existing customer base, and the
number and quality of customer appointments our sales team has
every week. It's an exciting time for all of us at EasyLink."
Going Concern Doubt
As reported in the Troubled Company Reporter on May 16, 2006,
Grant Thornton LLP expressed substantial doubt about Easylink
Services Corporation's ability to continue as a going concern
after it audited the Company's financial statement for the year
ended Dec. 31, 2005. The accounting firm pointed to the Company's
history of operating losses as well as its $542.0 million
accumulated deficit and $9.5 million working capital deficit at
Dec. 31, 2005.
Headquartered in Piscataway, New Jersey, Easylink Services
Corporation (NASDAQ: EASY) -- http://www.EasyLink.com/-- provides
outsourced business process automation services to medium and
large enterprises, including 60 of the Fortune 100, to improve
productivity and competitiveness by transforming manual and paper-
based business processes into efficient electronic business
processes.
ELECTRIC CITY: Post $1.9 Million Net Loss in 2006 1st Fiscal Qtr.
-----------------------------------------------------------------
Electric City Corp. filed its first quarter financial statements
for the three months ended March 31, 2006, with the Securities and
Exchange Commission on May 15, 2006.
The Company reported a $1,956,605 net loss on $1,146,345 of
revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $7,151,691
in total assets, $5,637,860 in total liabilities, and $2,371,899
in stockholders' equity.
Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a14
Going Concern Doubt
As reported in the Troubled Company Reporter on March 30, 2006,
BDO Seidman, LLP, expressed substantial doubt about Electric City
Corp.'s ability to continue as a going concern after auditing the
Company's financial statements for the years ended Dec. 31, 2005
and 2004. The auditing firm pointed to the Company's recurring
losses from operations.
About Electric City
Headquartered in Elk Grove Village, Illinois, Electric City Corp.
-- http://www.elccorp.com/-- is a leading developer, manufacturer
and integrator of energy savings technologies and performance
monitoring systems. Electric City is comprised of three
integrated operating companies that provide customers with total
energy solutions. With thousands of customer installations across
North America, Electric City has been reducing customers'
operating costs for over 20 years. By linking its customers'
sites, the Company is developing large-scale, dispatchable, demand
response systems we call Virtual Negawatt Power Plan. The Company
is developing its first VNPP(R) development - a 50-Megawatt
negative power system for ComEd in Northern Illinois, a second 27-
Megawatt system with PacifiCorp in the Salt Lake City area, and a
pilot program in Ontario, Canada with Enersource.
ELEPHANT TALK: Posts $487,146 Net Loss in 2006 First Fiscal Qtr.
----------------------------------------------------------------
Elephant Talk Communications, Inc., filed its first quarter
financial statements for the three months ended March 31, 2006,
with the Securities and Exchange Commission on May 22, 2006.
The Company reported a $487,146 net loss on $2,173,260 of revenues
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $14,559,744
in total assets, $11,259,757 in total liabilities, $950,016 in
minority interest, and $2,349,971 stockholders' equity.
The Company's March 31 balance sheet also showed strained
liquidity with $4,051,485 in total current assets available to pay
$7,833,427 in total current liabilities coming due within the next
12 months.
Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free
http://ResearchArchives.com/t/s?a07
Going Concern Doubt
Jimmy C. H. Cheung & Co., in Hong Kong, raised substantial doubt
about Elephant Talk Communications, Inc.'s ability to continue as
a going concern after auditing the Company's consolidated
financial statements for the year ended Dec. 31, 2005. The
auditor pointed to the Company's loss, negative working capital,
and stockholders' and accumulated deficiencies.
Elephant Talk Communications, Inc., is a voice-over-internet-
protocol telecommunications and mobile short message service and
other value added telecom services provider in China. With its
completion of acquisition of Beijing China Wind, the Company
provides its mobile value added services to over 1 million
customers in China. Its services include short message service,
ring tone/wall-paper downloads and mobile e-commerce services.
Its international call services are provided through an integrated
network infrastructure comprising both the packet-switched system
and circuit switched system focusing on the Asia Pacific region
and the U.S.
ENRON CORP: Ct. Dismisses Suit v. Caisse de Depot & Australia Bank
------------------------------------------------------------------
The Honorable Arthur J. Gonzalez of the U.S. Bankruptcy Court for
the Southern District of New York dismissed an adversary
proceeding Enron Corporation and its debtor-affiliates commenced
to recover payments to Caisse de Depot et Placement du Quebec and
National Australia Bank.
CLO Transaction
In December 1999, Enron monetized a portfolio of loan facilities
owned by Enron North America Corp. and certain other Enron
affiliates pursuant to a "collateralized loan obligation"
transaction. Several entities were formed including ENA CLO I
Holding Company I L.P. and ENA CLO I Trust in connection with the
CLO transaction.
As part of the CLO transaction, the contents of the portfolio of
loan facilities were transferred to CLO Holding. The CLO Trust
issued several classes of notes with maturities in 2014. The
proceeds of the CLO Notes were used to purchase the sole limited
partnership interest in CLO Holding.
Security for the Notes was provided by CLO Trust's limited
partnership interest in CLO Holding, without recourse to CLO
Trust or any other entity. Thus, the source of funds from which
the CLO Trust could make payments to holders of the CLO Notes was
CLO Holding. Repayment of the CLO Notes was dependent upon
payment to CLO Holding by the obligors of the collateralized
loans included in the portfolio of loan facilities.
In 2000, the value of CLO Holding's portfolio of loan facilities
declined. In September 2000, Enron provided credit support for
the Notes by granting a "put option" to CLO Holding. Enron was
obligated to purchase from CLO Holding up to $113,000,000 in
defaulted portfolio loans. Enron did not receive a premium
payment in return for its granting of the put option.
In December 2000 and, again, in June 2001, CLO Holding exercised
its rights pursuant to the put option. CLO Holding transferred
the funds received as a result of exercising its rights under the
put option to the CLO Trust. In turn, the CLO Trust transferred
the Put Transfers to certain holders of CLO Notes, including
Caisse de Depot and Australia Bank.
In exchange, the subsequent transferees of the Put Transfers
transferred their CLO Notes to Enron.
The portfolio of loan facilities continued to decline in value as
a result of payment defaults on the underlying loans. In spring
2001, Enron purchased all of the then-outstanding CLO Notes from
certain of the holders at face value plus accrued interest. The
price Enron paid to purchase the CLO Notes was above market
value.
Enron Wants to Avoid Put Transfers
In 2003, Enron sued institutional investors holding the CLO
Notes, including Caisse de Depot and Australia Bank. Enron
alleged that the Put Transfers are avoidable, pursuant to Section
548(a)(1)(B) of the Bankruptcy Code, as constructive fraudulent
transfers of its interest in property. Enron argued that the Put
Transfers were recoverable from the defendants as mediate
transferees pursuant to Section 550(a)(2).
Caisse de Depot and Australia Bank sought dismissal of the
complaint. The Defendants argued that as mediate, or subsequent,
transferees of the Put Transfers, the transfers of a debtor's
interest in property must be avoided under the Bankruptcy Code
against the initial transferee prior to Enron seeking recovery
from them pursuant to Section 550(a).
The Defendants asserted that they were two-steps removed from the
alleged fraudulent transfers. They pointed out that after CLO
Holding exercised the put option, Enron paid the funds to CLO
Holding as initial transferee. In turn, CLO Holding transferred
the funds to the CLO Trust, an immediate transferee. The CLO
Trust then distributed those funds to holders of the CLO Notes,
including the Defendants.
The Defendants also argued that Enron's failure to bring an
avoidance action against the initial transferee resulted from its
own decision not to commence the action prior to the running of
the statute of limitations. To the extent Enron argues, in
equity, that an avoidance action could not be brought within the
statute of limitations because CLO Holdings, as the initial
transferee, was dissolved, the Defendants assert that Enron
itself caused the dissolution.
Enron countered that it may seek recovery from mediate
transferees regardless of whether it has first avoided the
transfers as to the initial transferee. Enron said it must
merely establish that the transfers are avoidable.
Court Dismisses Action
Judge Gonzalez found merit on the Defendants' arguments. In
dismissing the complaint, Judge Gonzalez held that the plain
language of Section 550(a) requires that the transfer first be
established as improper and avoided under one of the avoidance
sections of the Bankruptcy Code prior to actual recovery from any
transferee. Because Enron's complaint does not seek to initially
avoid the transfer as against the initial transferee, the
complaint seeking recovery from the Defendants is properly
dismissed as against them.
Allowing Enron to merely show that the initial transfer was
avoidable prior to recovery rather than actually establishing
that it were avoided would lead to an absurd result in the
context of the two separate statutes of limitations found in
Sections 546(a) and 550(f), Judge Gonzalez said. Section 550(a)
applies to the recovery from the initial transferee as well as to
recovery from subsequent transferees. Section 550(f) provides
the applicable statute of limitations for recovery actions under
Section 550(a).
According to Judge Gonzalez, if Enron were only necessary to
establish that the transfer was avoidable, then the Section
546(a) statute of limitations for commencing an avoidance action
would be rendered nugatory; as the trustee could still recover
even from the initial transferee under the "avoidable" theory
even though an avoidance action had not been commenced within the
requisite two-year statute of limitations.
Even if equitable considerations were sufficient to eliminate the
statutory requirement that the transfer first be avoided, Judge
Gonzalez said the equitable arguments presented by Enron would
not warrant avoidance of the Put Transfers because Enron had
opportunity to bring the avoidance action against the initial
transferee and Enron, itself, caused the dissolution of the
initial transferee, making the avoidance action against the
initial transferee impossible.
About Enron
Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply. Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed. The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.
(Enron Bankruptcy News, Issue No. 173; Bankruptcy Creditors'
Service, Inc., 15/945-7000)
ENRON CORP: Asks Court to Approve United Illuminating Settlement
----------------------------------------------------------------
Reorganized Enron Corporation and its debtor-affiliates ask Judge
Arthur J. Gonzalez of the U.S. Bankruptcy Court for the Southern
District of New York to approve their settlement agreement with
The United Illuminating Company, and UIL Holdings Corporation.
Before the Debtors filed for bankruptcy, Enron Power Marketing,
Inc., entered into various transactions with United Illuminating,
pursuant to which certain amounts are owed to EPMI. As credit
support for the contracts, Enron Corp. and UIL Holdings each
issued certain guaranties, Mark C. Ellenberg, Esq., at Cadwalader,
Wickersham & Taft LLP, in New York, relates.
On Jan. 31, 2003, EPMI filed Adversary Proceeding No. 03-02065
against the UIL Parties, seeking declaratory relief and damages
under some of the Contracts.
The UIL Parties filed their answer and affirmative defenses to
EPMI's allegations on March 6, 2003.
Following discussions, the parties negotiated the Settlement
Agreement. They agree that:
(1) the UIL Parties will make a settlement payment to the
applicable Reorganized Debtor or Debtor;
(2) they will mutually release each other from all claims
related to the Contracts and Guaranties;
(3) they will execute a stipulation providing for the
dismissal, with prejudice, of the Adversary Proceeding;
(4) two general unsecured claims will be deemed as filed
by United Illuminating and automatically allowed as:
(i) a Class 6 Claim for $7,900,000 in favor of Bear
Stearns Investment Products, Inc., as assignee of
United Illuminating, against EPMI; and
(ii) a Class 185 Claim for $7,900,000 in favor of Bear
Stearns, as assignee of United Illuminating, against
Enron; and
(5) All scheduled liabilities in favor of the UIL Parties will
be deemed irrevocably withdrawn, with prejudice, and to
the extent applicable, expunged in their entirety.
Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply. Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed. The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.
(Enron Bankruptcy News, Issue No. 173; Bankruptcy Creditors'
Service, Inc., 15/945-7000)
ENRON CORP: Broadband Unit Demands $1.01M Debt Payment from i2
--------------------------------------------------------------
Enron Broadband Services, Inc., provided services and products to
i2 Technologies, Inc., pursuant to a Network Services Agreement,
dated as of September 17, 2000.
Barry J. Dichter, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, relates that i2 Technologies presently owes a
$1,014,912 matured debt to EBS that is past due.
The matured debt includes $223,898 of interest calculated as
prescribed in the Services Agreement from the due date of the
applicable invoice through March 31, 2006.
EBS has made a demand on i2 Technologies for payment of amounts
that it owes to EBS, but until now, i2 has refused the pay its
obligations, Mr. Dichter tells Judge Gonzalez.
Hence, EBS asks the Court to:
(1) declare that i2 Technologies owes a $1,014,912 matured
debt to EBS and compel i2 to pay its obligations;
(2) declare that i2 Technologies' failure to pay the matured
debt constitutes a violation of Sections 362(a)(3),
362(a)(7) and 542(b) of the Bankruptcy Code; and
(3) award EBS its costs and expenses, including attorney's
fees, incurred in connection with its efforts to obtain i2
Technologies' compliance with its obligations, together
with accrued interest.
Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply. Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed. The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.
(Enron Bankruptcy News, Issue No. 172; Bankruptcy Creditors'
Service, Inc., 15/945-7000)
ENTECH ENVIRONMENTAL: Posts $463,449 Net Loss in 2006 1st Quarter
-----------------------------------------------------------------
Entech Environmental Technologies, Inc., filed its first quarter
financial statements for the three months ended March 31, 2006,
with the Securities and Exchange Commission on May 15, 2006.
The Company reported a $463,449 net loss on $1,765,036 of revenues
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $1,930,530
in total assets and $2,891,181 in total liabilities, resulting in
a $1,100,345 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $1,411,571 in total current assets available to pay
$2,891,181 in total current liabilities coming due within the next
12 months.
Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a16
Going Concern Doubt
As reported in the Troubled Company Reporter on Feb. 27, 2006,
Mendoza Berger & Company, LLP, expressed substantial doubt about
Entech Environmental Technologies, Inc.'s ability to continue as
a going concern after it audited the Company's financial
statements for the fiscal year ended Sept. 30, 2005. The auditing
firm pointed to the Company's significant losses.
The Company's former auditors, Russell Bedford Stefanou
Mirchandani LLP, also expressed substantial doubt about Entech's
ability to continue as a going concern after auditing the
Company's financial statements for fiscal year 2004.
About Entech
Entech Environmental Technologies, Inc., fka Cyber Public
Relations, Inc., through its H.B. Covey subsidiary, provides
construction and maintenance services to petroleum service
stations in the southwestern part of the United States of America,
and provides installation services for consumer home products in
Southern California.
The HBC subsidiary is a 58-year old construction and maintenance
company that specializes in construction and maintenance services
for the retail petroleum industry, commercial and industrial
users, municipal organizations, and in support of major equipment
manufacturers.
EPIXTAR CORP: Morrison Brown Replaces McClain & Co. as Auditors
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida in
Miami authorized Epixtar Corp. and its debtor-affiliates to employ
Morrison, Brown, Argiz & Farra, LLP, as their auditors.
The Debtors retained Morrison Brown to:
a) audit their consolidated financial statements for the
period ended Dec. 31, 2005, in connection with the filing
of their form 10-K and any form 10-Q with the Securities
and Exchange Commission; and
b) perform other work necessary in connection with the
preparation of and filing of any documents required by the
SEC.
The hourly rates for Morrison Brown's professionals expected to
work on this engagement ranges from $150 to $400. Morrison Brown
requested a $50,000 retainer from the Debtors.
Frank Gonzalez, at Morrison Brown, assures the Court that his firm
is "disinterested" as that term is defined in Section 101(14) of
the Bankruptcy Code.
McClain & Company, LC, previously served as the Debtors' auditors.
McClain withdrew from the engagement in April 2006 after
disagreeing with the Debtors' management.
As reported in the Troubled Company Reporter on May 29, 2006,
McClain identified weaknesses in internal controls during its
audit of the Debtor's financial statements for the year ended
Dec. 31, 2005. The control weaknesses eventually gave rise to the
firm's questions regarding the judgment of the Debtors'
management.
About Epixtar
Based in Miami, Florida, Epixtar Corp. -- http://www.epixtar.com/
-- fdba Global Assets Holding, Inc., aggregates contact center
capacity and robust telephony infrastructure to deliver
comprehensive, turnkey services to the enterprise market. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 6, 2005 (Bank. S.D. Fla. Case No. 05-42040). Michael D.
Seese, Esq., at Kluger, Peretz, Kaplan & Berlin, P.L., represents
the Debtors in their restructuring efforts. Glenn D. Moses, Esq.,
at Genovese Joblove & Battista, P.A., represents the Company's
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they listed total assets of
$30,376,521 and total debts of $39,158,724.
EPIXTAR CORP: EICCG Wants to Sell Accounts Receivable to WFCB
-------------------------------------------------------------
Debtor Epixtar International Call Center Group, Inc., asks the
U.S. Bankruptcy Court for the Southern District of Florida in
Miami for permission to:
-- sell its pre-bankruptcy and post-bankruptcy accounts
receivable to Wells Fargo Business Credit, Inc., free and
clear of all liens;
-- obtain debtor-in-possession financing from Wells Fargo
pursuant to its factoring agreement; and
-- grant Wells Fargo a super-priority lien and priority over
administrative claims in relation to factored accounts
receivable.
Howard J. Berlin, Esq., at Kluger, Peretz, Kaplan & Berlin, P.L.,
tells the Court that EICCG's sale of its accounts receivable is
necessary for the continuing operation of its business. It will
also help preserve collateral value for the benefit of secured
creditors and maximize distributions to unsecured creditors.
Factoring Agreement
EICCG's factoring agreement with WFBC is essentially similar to
the factoring agreement between WFBC and another debtor, Epixtar
Marketing Corp., which was previously approved by the Court.
As reported in the Troubled Company Reporter on Nov. 3, 2005, the
factoring agreement allows the Debtors to sell and assign certain
of its accounts receivable to WFBC.
In consideration for the assignment, WFBC pays the Debtors an
initial cash payment equal to 80% of the face of amount of the
receivable. Upon collection of the receivable, WCFB pays the
Debtors the 20% balance, less customary fees and charges.
The Debtors are required to repurchase the receivables in the
event that the account becomes disputed or uncollectible. Since
the Debtors remain liable for the factored accounts pending
collection by WFBC, the 80% initial payment is treated as advanced
funds and are considered as DIP loans. EICCG requires authority
to obtain financing from WFBC in light of the mechanics of their
factoring agreement with WFBC.
About Epixtar
Based in Miami, Florida, Epixtar Corp. -- http://www.epixtar.com/
-- fdba Global Assets Holding, Inc., aggregates contact center
capacity and robust telephony infrastructure to deliver
comprehensive, turnkey services to the enterprise market. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 6, 2005 (Bank. S.D. Fla. Case No. 05-42040). Michael D.
Seese, Esq., at Kluger, Peretz, Kaplan & Berlin, P.L., represents
the Debtors in their restructuring efforts. Glenn D. Moses, Esq.,
at Genovese Joblove & Battista, P.A., represents the Company's
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they listed total assets of
$30,376,521 and total debts of $39,158,724.
FORD MOTOR: S&P Puts Nine Related Debts' Low-B Ratings on Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on nine U.S.
single-issue synthetic ABS transactions related to Ford Motor Co.
(Ford; BB-/Watch Neg/B-2) and Ford Motor Credit Co. (Ford Credit;
BB-/Watch Neg/B-2) on CreditWatch with negative implications.
The May 25, 2006, placement of the ratings on Ford, Ford Credit,
and all related entities on CreditWatch with negative implications
does not have any immediate rating impact on the Ford-related ABS
supported by collateral pools of consumer auto loans or auto
wholesale loans.
Each of the securitizations with ratings placed on CreditWatch
negative is weak-linked to the long-term corporate credit, senior
unsecured debt, or preferred stock ratings for Ford or Ford
Credit. Either Ford or Ford Credit provides the underlying
collateral or referenced obligations in the affected
securitizations.
The May 25, 2006, placement of Ford, Ford Credit, and all related
entities on CreditWatch with negative implications reflects
Standard & Poor's increasing concerns about Ford's performance in
2006 amid deteriorating product mix and market share in North
America and persistently high commodity costs generally.
Ratings Placed On Creditwatch Negative:
Corporate Backed Trust Certificates,
Ford Motor Co. Debenture-Backed Series 2001-36 Trust
Rating
Class To From Role
----- -- ---- ----
A-1 BB-/Watch Neg. BB- Underlying collateral
A-2 BB-/Watch Neg. BB- Underlying collateral
Corporate Backed Trust Certificates,
Ford Motor Co. Note-Backed Series 2003-6 Trust
Rating
Class To From Role
----- -- ---- ----
A-1 BB-/Watch Neg. BB- Underlying collateral
CorTS Trust for Ford Debentures
Rating
Class To From Role
----- -- ---- ----
Cert. BB-/Watch Neg. BB- Underlying collateral
CorTS Trust II for Ford Notes
Rating
Class To From Role
----- -- ---- ----
Certs. BB-/Watch Neg. BB- Underlying collateral
PPLUS Trust Series FMC-1
Rating
Class To From Role
----- -- ---- ----
Certs. BB-/Watch Neg. BB- Underlying collateral
PreferredPLUS Trust Series FRD-1
Rating
Class To From Role
----- -- ---- ----
Certs. BB-/Watch Neg. BB- Underlying collateral
SATURNS Trust No. 2003-5
Rating
Class To From Role
----- -- ---- ----
Units BB-/Watch Neg. BB- Underlying collateral
Trust Certificates Series 2002-1 Trust
Rating
Class To From Role
----- -- ---- ----
A-1 BB-/Watch Neg. BB- Underlying collateral
STEERS Credit-Backed Trust Series 2002-3 F
Rating
Class To From Role
----- -- ---- ----
Certs. B-/Watch Neg. B- Referenced obligation
FRIENDLY ICE: Posts $1.8 Mil. Net Loss in 1st Quarter Ended Apr. 2
------------------------------------------------------------------
Friendly Ice Cream Corporation incurred a $1.8 million net loss
for the first quarter ended April 2, 2006, compared to a net loss
of $3 million reported for the three months ended April 3, 2005.
Total revenues were $125.7 million in the first quarter of 2006,
an increase of $4 million, or 3.3%, as compared to total revenues
of $121.7 million for the first quarter of 2005. Revenues
increased in all business segments.
Restaurant revenues were $95.3 million in the first quarter of
2006, an increase of $2.2 million, or 2.3%, as compared to
restaurant revenues of $93.1 million for the first quarter of
2005. Comparable restaurant sales increased 4.8% for company-
operated restaurants and 0.6% for franchised restaurants for the
quarter ended April 2, 2006 compared to the quarter ended April 3,
2005. Restaurant revenues include a reduction of $3.2 million due
to the re-franchising of 16 company-operated restaurants over the
last fifteen months.
Foodservice revenues were $26.9 million in the first quarter of
2006, an increase of $1.6 million, or 6.3%, as compared to
foodservice revenues of $25.3 million for the first quarter of
2005. Franchise revenues were $3.5 million in the first quarter
of 2006, an increase of $0.2 million, or 9.1%, as compared to
franchise revenues of $3.3 million for the first quarter of 2005.
As of Jan. 1, 2006, the Company had 11 restaurants that were
reported as "held for sale" in accordance with Statement of
Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets".
During the quarter ended April 2, 2006, the Company sold five of
these restaurants. These transactions resulted in gross proceeds
of $5.1 million and a net gain on disposal of $2.9 million.
The net gain on disposal, along with the operating results of the
properties held for sale, was reported separately as discontinued
operations. Income from discontinued operations was $2.6 million
in the 2006 first quarter as compared to a loss from discontinued
operations of $0.4 million in the prior year first quarter.
As a result of the loss for the current quarter and the Company's
intent to continue recording a full valuation allowance on
deferred tax assets until an appropriate level of profitability is
sustained, the benefit from income taxes was $0.0 million for the
three months ended April 2, 2006. The benefit from income taxes
was $0.7 million for the three months ended April 3, 2005.
Performance Highlights
In the first quarter of 2006, Friendly's continued to pursue its
key strategic objectives to 1) stabilize and improve profit in
company-operated restaurants, 2) aggressively grow through
franchising and 3) stabilize and improve profit in its retail
business. Key business highlights for the quarter include:
-- Ongoing improvements to the Friendly's dining experience
based on feedback from the new Internet-based guest
feedback system;
-- The opening of one new company-operated restaurant;
-- The re-franchising of one company-operated restaurant,
which resulted in a gain on franchise sales of restaurant
operations and properties of $0.9 million; and
-- Continued growth in the number of supermarket chains that
carry Friendly's decorated cakes, which are now being sold
in 700 supermarkets.
John L. Cutter, Chief Executive Officer and President of Friendly
Ice Corporation stated, "We are pleased with our first quarter
results. Comparable sales of 4.8% for company-operated
restaurants exceeded our expectations.
"We believe we have the right strategies in place to support long-
term sales and profitability growth. Our current marketing
message is especially relevant in a challenging consumer
environment.
"Each promotion features one to three new products combined with a
value added free sundae. With these promotions, we have launched
a television campaign with a new tag line "Get in. Get Friendly."
The commercials feature families sharing memorable moments over
food and ice cream at Friendly's. The tag line re-enforces the
essence of the brand."
Friendly Ice Cream Corporation (AMEX: FRN) --
http://www.friendlys.com/-- is a vertically integrated restaurant
company serving signature sandwiches, entrees and ice cream
desserts in a friendly, family environment in 530 company and
franchised restaurants throughout the Northeast. The company also
manufactures ice cream, which is distributed through more than
4,500 supermarkets and other retail locations. With a 70-year
operating history, Friendly's enjoys strong brand recognition and
is currently remodeling its restaurants and introducing new
products to grow its customer base.
* * *
As reported in the Troubled Company Reporter on March 24, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on restaurant operator Friendly Ice Cream Corp. to 'B-'
from 'B'. The senior unsecured debt rating was also lowered to
'CCC+' from 'B-'. The outlook is negative.
FTS GROUP: Posts $5.9 Million Net Loss in 2006 1st Fiscal Quarter
-----------------------------------------------------------------
FTS Group, Inc., filed its first quarter financial statements for
the three months ended March 31, 2006, with the Securities and
Exchange Commission on May 15, 2006.
The Company reported a $5,955,143 net loss on $1,633,614 of
revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $7,151,691
in total assets, $5,637,860 in total liabilities, and $1,513,831
in stockholders' equity.
The Company's March 31 balance sheet also showed strained
liquidity with $1,096,833 in total current assets available to pay
$3,885,009 in total current liabilities coming due within the next
12 months.
Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a12
Going Concern Doubt
As reported in the Troubled Company Reporter on May 15, 2006,
R. E. Bassie & Co. in Houston, Texas, raised substantial doubt
about FTS Group, Inc.'s ability to continue as a going concern
after auditing the Company's consolidated financial statements for
the year ended Dec. 31, 2005. The auditor pointed to the
Company's recurring losses from operations.
About FTS Group
FTS Group, Inc., develops and acquires businesses primarily
in the wireless industry. Through FTS Wireless, Inc., a
wholly-owned subsidiary, acquires and develops a chain of
retail wireless locations in the Gulf Coast market of Florida. As
of March 1, 2006, the Company operates nine retail wireless
locations in Florida.
FUNCTIONAL RESTORATION: Hires SulmeyerKupetz as Bankruptcy Counsel
------------------------------------------------------------------
Functional Restoration Medical Center, Inc., obtained permission
from the U.S. Bankruptcy Court for the Central District of
California to employ SulmeyerKupetz as its bankruptcy counsel.
SulmeyerKupetz will:
a) examine the creditors' claims to determine their validity;
b) advise and counsel the Debtor in connection with legal
issues, including:
i) use of cash collateral,
ii) sale or lease of property of the estate,
iii) obtain credit,
iv) assumption and rejection of unexpired leases and
executory contracts,
v) request for security interests,
vi) relief from automatic stay, and
vii) payment of prepetition debts;
c) negotiate with the creditors holding potentially secured and
unsecured claims for a plan of reorganization;
d) draft a chapter 11 plan and disclosure statement; and
e) object to claims as may be appropriate.
Daniel A. Lev, Esq., a member at SulmeyerKupetz, disclosed that
the Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Members and Senior Counsel $375 - $600
Of Counsel $375 - $500
Associates $250 - $400
SulmeyerKupetz received a $50,000 prepetition retainer with a
remaining balance of $48,961.
Mr. Lev assured the Court that his Firm is disinterested as that
term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Encino, California, Functional Restoration
Medical Center, Inc. is the second largest owner and operator of
MRI centers in Southern California. The Debtor filed for chapter
11 protection on Mar. 9, 2006 (Bankr. C.D. Calif. Case No. 06-
10306). Daniel A. Lev, Esq., at SulmeyerKupetz, represents the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, its estimated assets and debts
between $10 million and $50 million.
FUNCTIONAL RESTORATION: Panel Hires Pachulski Stang as Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
bankruptcy case of Functional Restoration Medical Center, Inc.,
asks the U.S. Bankruptcy Court for the Central District of
California for authority to employ Pachulski Stang Ziehl Young
Jones & Weintraub LLP as its counsel.
Pachulski Stang will:
a) assist, advise, and represent the Committee in its
consultations with the Debtor regarding the administration
of this case;
b) assist, advice, and represent the Committee in analyzing
the Debtor's assets and liabilities, investigating the
extent and validity of liens and participating in and
reviewing any proposed asset sales, any asset
dispositions, financing arrangements and cash collateral
stipulations or proceedings;
c) assist, advise, and represent the Committee in any manner
relevant to reviewing and determining the Debtor's rights
and obligations under leases and other executory
contracts;
d) assist, advise, and represent the Committee in
investigating acts, conduct, assets, liabilities and the
Debtor's financial condition, the Debtor's business
operation and the desirability of the continuance of any
portion of the business, and any other matters relevant to
this case or to the formulation of a plan;
e) assist, advise, and represent the Committee in its
participation in the negotiation, formulation, and
drafting of a plan of liquidation or reorganization;
f) provide advice to the Committee on the issues concerning
the appointment of a trustee or examiner under Section
1104 of the Bankruptcy Code;
g) assist, advise, and represent the Committee in the
performance of all of its duties and powers under the
Bankruptcy Code and the Bankruptcy Rules and in the
performance other services as are in the interests of
those represented by the Committee; and
h) assist, advise, and represent the Committee in the
evaluation of claims and on any litigation matters.
Hamid R. Rafatjoo, Esq., at Pachulski Stang, discloses that he
bills at $395 per hour. A copy of the hourly rates for the Firm's
other attorneys and paralegals is available for free at:
http://ResearchArchives.com/t/s?a0d
Mr. Rafatjoo assures the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not hold or represent any interest
adverse to the Debtors' estates.
Headquartered in Encino, California, Functional Restoration
Medical Center, Inc. is the second largest owner and operator of
MRI centers in Southern California. The Debtor filed for chapter
11 protection on Mar. 9, 2006 (Bankr. C.D. Calif. Case No. 06-
10306). Daniel A. Lev, Esq., at SulmeyerKupetz, represents the
Debtor in its restructuring efforts. XRoads Solutions Group, LLC,
serves as its financial advisor. When the Debtor filed for
protection from its creditors, its estimated assets and debts
between $10 million and $50 million.
FUNCTIONAL RESTORATION: Taps Xroads Solutions as Financial Advisor
------------------------------------------------------------------
Functional Restoration Medical Center, Inc., obtained authority
from the U.S. Bankruptcy Court for the Central District of
California to employ XRoads Solutions Group, LLC, as its financial
advisor.
XRoads Solutions will:
a. assist the Debtor in preparing operating budgets and cash
forecasts;
b. analyze and advise the Debtor on restructuring
alternatives;
c. assist the Debtor and its legal counsel, SulmeyerKupetz,
P.C., in negotiations with the Debtor's creditor
constituencies;
d. assist the Debtor in the sale of assets;
e. assist the Debtor and counsel in the preparation of
schedules, statements of financial affairs, monthly
operating reports, and other reports for the Court and the
U.S Trustee;
f. manage claims, including analysis and reconciliation of
unsecured claims, identification and analysis of claims for
objection, providing documentation to support objections,
and providing analysis and support as requested by the
counsel; and
g. submit a 30-day work plan to the counsel starting on the
second month of retention, and perform the projects set
forth in the work plan.
The Debtor told the Court that for the first month of the Firm's
services, the Debtor will pay the Firm a flat fee of $40,000 for
no less than 400 hours of work. Accordingly, the Firm will charge
an effective blended rate of $100 per hour, or less.
For the second and subsequent months, the Debtor will pay the Firm
a monthly fee of $40,000 and the Firm will make its personnel
available for at least 175 hours per month. The Debtor will pay
the Firm at a rate of $275 per hour if the Firm's personnel
performs more than 175 hours in any month.
John F. Walters, a principal at XRoads Solutions, assured the
Court that the Firm is disinterested as that term is defined in
Section 101(14) of the Bankruptcy Code.
Headquartered in Encino, California, Functional Restoration
Medical Center, Inc. is the second largest owner and operator of
MRI centers in Southern California. The Debtor filed for chapter
11 protection on Mar. 9, 2006 (Bankr. C.D. Calif. Case No. 06-
10306). Daniel A. Lev, Esq., at SulmeyerKupetz, represents the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, its estimated assets and debts
between $10 million and $50 million.
GLOBAL HOME: Court Okays Conway as Restructuring Consultants
------------------------------------------------------------
Global Home Products, LLC and its debtor-affiliates obtained
permission from the U.S. Bankruptcy Court for the District of
Delaware to employ Conway, Del Genio, Gries & Co., LLC, as their
restructuring consultant, nunc pro tunc to April 10, 2006.
Conway Del Genio will:
a. assist in managing the Debtors' resources in support of
their restructuring and reorganization activities;
b. assist in the preparation of reports, and communications
with the Debtors' lenders and other constituencies;
c. assist in analyzing the liquidity requirements of the
Debtor and its three business units for the fiscal year
ending March 31, 2007, based on the financial projections
prepared by management for that period;
d. assist in developing an operating plan and associated
liquidity needs for the Debtor and its three business
units;
e. assist in connection with the filing of a Chapter 11
proceeding, including business plans and cash flow
forecasts supporting the negotiation of Debtor-in-
possession financing;
f. assist in the subsequent development, proposal,
negotiation, and confirmation of a Plan of Reorganization;
g. assist in establishing necessary operating and reporting
disciplines to operate the business in a Chapter 11
proceeding; and
h. assist in the development and execution of plans to dispose
of non-core assets.
Ronald F. Stengel, a senior managing director at Conway Del Genio,
tells the Court that when the Debtors filed for bankruptcy, the
Firm held a $77,000 retainer, and a $105,000 postpetition pro rata
portion of the April monthly fee.
Pursuant to an engagement agreement, the Debtors agreed to pay the
Firm a monthly fee of $150,000, payable in advance each month.
Mr. Stengel assures the Court that the Firm is disinterested as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Westerville, Ohio, Global Home Products, LLC
-- http://www.anchorhocking.com/and http://www.burnesgroup.com/
-- sells houseware and home products and manufactures high
quality glass products for consumers and the food services
industry. The company also designs and markets photo frames,
photo albums and related home decor products. The company and
16 of its affiliates , including Burnes Puerto Rico, Inc., and
Mirro Puerto Rico, Inc., filed for Chapter 11 protection on Apr.
10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones,
Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra
G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones &
Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at
Lowenstein Sandler P.C., represents the Official Committee Of
Unsecured Creditors. When the company filed for protection from
their creditors, they estimated assets between US$50 million and
US$100 million and debts of more than US$100 million.
GSI GROUP: Repurchases Part of 12% Senior Notes for $7.4 Million
----------------------------------------------------------------
On May 12, 2006, GSI Group Inc. repurchased a portion of its
outstanding 12% senior notes due in 2013 from Charlesbank, the
majority shareholder of GSI Holdings, Inc., which is the parent
corporation of GSI Group, at 101% of the principal amount, in a
total cash amount of $7,474,000. The Notes will be promptly
cancelled following the repurchase.
The repurchase price for the notes was approved by all of the
independent members of the Company's board of directors, and was
determined after consulting with Lehman Brothers for the most
recent trading price for the notes, and also taking into account
that the record date for the semi-annual payment of interest on
the notes was May 1, 2006 for payment on May 15, 2006.
The effect of the transaction is to reduce the direct financial
obligations of the Company with respect to its long-term
indebtedness.
Based in Assumption, Illinois, GSI Group Inc. is one of the
largest global manufacturers of grain storage bins and related
drying and handling systems, as well as capital equipment for
swine and poultry producers. GSI markets its products in
approximately 75 countries through a network of more than 2,500
independent dealers to grain, protein producers and large
commercial businesses. In May 2005, GSI was acquired by
Charlesbank Capital Partners, a Boston-based private equity firm
known for partnering with experienced management teams to grow
fundamentally strong businesses.
* * *
GSI Group Inc.'s 12% Senior Unsecured Notes due 2013 carry Moody's
Investors Service's B3 rating and Standard and Poor's B- rating.
GULF COAST: Creditors Panel Wants Winstead Sechrest as Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Gulf
Coast Holdings, Inc.'s chapter 11 case asks the U.S. Bankruptcy
Court for the Northern District of Texas for permission to hire
Winstead Sechrest & Minick P.C. as its bankruptcy counsel.
The Committee chose Winstead Sechrest for the firm's expertise,
experience and knowledge practicing before bankruptcy courts.
Winstead Sechrest will:
(a) advise and consult with the Committee concerning legal
questions arising in the administration of the Debtor's
estate and the unsecured creditors' rights and remedies in
connection with the estate;
(b) assist the Committee in preserving and protecting the
Debtor's estate;
(c) investigate and, with Court authority, prosecute
preference, fraudulent transfers, and other actions arising
under the Debtor's avoiding powers;
(d) prepare and prosecute any pleadings, motions, answers,
notices, orders and any reports that are required for the
protection of the Committee's interest and the orderly
administration of the Debtors' estate;
(e) advise the Committee regarding the negotiation and
documentation of debt restructuring and related
transactions or agreements;
(f) monitor transactions proposed by the Debtor during the
course of its chapter 11 cases and advise the Committee;
(g) review the nature and validity of liens asserted against
the Debtor's property and advise the Committee concerning
the enforceability of those liens;
(h) review and monitor the Debtor's ongoing business, if any;
(i) advise the Committee in connection with any suggested or
proposed plans of reorganization;
(j) will counsel the Committee in connection with the
formulation, negotiation, and promulgation of alternative
plans of reorganization, if necessary or appropriate; and
(k) perform any and all of the legal services for the
Committee.
Phillip L. Lamberson, Esq., a partner at the firm, tells the Court
that he charges $350 per hour for his services. He further
discloses that his colleagues at the firm working for the Debtor's
case and their hourly rates are:
Professionals Hourly Rate
------------- -----------
C. Mark Brannum $380
J. Frasher Murphy $295
Jaime Myers $265
Mr. Lamberson assures the Court that his firm and its
professionals do not hold material interest adverse to the
Debtor's estate and are disinterested as that term is defined in
Section 101(14) of the Bankruptcy Code.
Headquartered in Conroe, Texas, Gulf Coast Holdings, Inc., field
for bankruptcy protection on April 28, 2006 (Bankr. N.D. Tex. Case
No. 06-31695). Daniel I. Morenoff, Esq., and Jeffrey R. Fine,
Esq., at Hughes & Luce, LLP, represent the Debtor in its
restructuring efforts. In its schedules filed with the Court, the
Debtor reported assets amounting to $18,258,575 and debts totaling
$19,553,664.
HAWS & TINGLE: Amends Chapter 11 Plan & Disclosure Statement
------------------------------------------------------------
Haws & Tingle, Ltd. delivered to the U.S. Bankruptcy for the
Northern District of Texas an amended disclosure statement
explaining its plan of reorganization.
Under the Amended Plan, holders of Class 1 Other Priority Claims
and Class 2 Secured Tax Claims will receive either full payment in
cash or upon other terms agreed to by the holder and the Debtor.
Class 3 Other Secured Claims will receive, at the Debtor's option:
(i) the return of the collateral securing the Allowed
Other Secured Claim in full satisfaction of the Claim;
(ii) payment in cash in an amount equivalent to the lesser of
(a) the value of the collateral or (b) the full amount of
the Allowed Other Secured Claim; or
(iii) other treatment as may be agreed to in writing by the
holder of the Claim and the Debtor.
If the Allowed Other Secured Claim exceeds the value of the
collateral, the excess will constitute a General Unsecured Claim,
unless the holder of the Claim has elected treatment pursuant to
Section 1111(b) of the Bankruptcy Code.
Class 4 General Unsecured Claims are entitled to a pro rata share
from funds left over after classes senior in priority have been
paid in full.
All interests in the Debtor will be cancelled, and interest
holders will not retain any property on account of their
interests.
Claims of Zurich
Zurich American Insurance Company, the Debtor's bonding company,
holds a stipulated $9,994,040 unsecured claim.
Under the Amended Plan, as to any project where Zurich advanced
funds to complete an obligation of the Debtor, Zurich will be
indemnified by the Debtor, and to a limited extent, by James D.
Hasenzahl, the Debtor's chief executive officer.
Zurich is also entitled to receive any payments from the owners of
the projects entered into by the Debtor, up to the amount of funds
advanced to pay for obligations of the Debtor on said projects.
Zurich will receive funds directly from the Owners on projects
where the Debtor defaulted, which funds are independent of the
estate.
In addition, Zurich is anticipated to have administrative claims
arising from settlements made with third parties.
Distribution
The Plan Trustee will make all distributions required under the
Plan. Zurich has agreed to fund $75,000 directly to the Plan
Trustee from the settlement proceeds it receives from Mr.
Hasenzahl.
Headquartered in Fort Worth, Texas, Haws & Tingle, Ltd., is a
building contractor. The Debtor filed for chapter 11 protection
on October 6, 2005 (Bankr. N.D. Tex. Case No. 05-82478). Mark
Edward Andrews, Esq., and Omar J. Alaniz, Esq., at Neligan Tarpley
Andrews & Foley LLP represent the Debtor in its restructuring
efforts. No Official Committee of Unsecured Creditors has been
appointed in this case. When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
to $50 million.
INVERNESS MEDICAL: Expects to Spend $16.8 Mil. on Plant Closures
----------------------------------------------------------------
As part of an ongoing review of its worldwide operations for the
purpose of improving efficiency, lowering operating costs and
improving margins, on May 16, 2006, Inverness Medical Innovations,
Inc. committed to a plan to cease operations at its Applied
Biotech, Inc., and Scandinavian Micro Biodevices ApS subsidiaries,
and to write-off certain excess manufacturing equipment at other
impacted facilities.
The Company made its final determination to implement the
restructuring after completing its acquisition of a newly
constructed manufacturing facility in Hangzhou, China from ACON
Laboratories, Inc. and certain of its affiliates.
After a period of transition, customers currently supplied with
product manufactured at ABI will be supplied with product
manufactured in the Company's new facility in Hangzhou, China;
while certain equipment and research activities currently
conducted at SMB will be transferred to the Company's Bedford,
England and Stirling, Scotland facilities. The ABI shutdown is
expected to be completed during the first quarter of 2007, while
the closure of SMB is expected to be completed in the first
quarter of 2007.
Total charges to be incurred in connection with the plant closing
are expected to be approximately $16.8 million, including
severance costs of approximately $4.8 million, other cash
expenditures of approximately $1.4 million, principally associated
with lease termination costs, and non-cash fixed and current asset
charges totaling approximately $10.9 million.
Offsetting these charges, the Company expects to record a non-cash
foreign exchange gain of approximately $5.2 million associated
with the completion of the previously announced closure of its
CDIL facility and a cash gain of approximately $1.0 million
associated with the completion of the sale of its interest in
CDIL's former principal manufacturing facility. The charges, net
of the gains, will be recognized over the course of the plant
closing consistent with U.S. GAAP and are expected to be
approximately $6.6 million, $1.7 million and $2.0 million in the
second quarter, third and fourth quarters of 2006 and $.7 million
in the first quarter of 2007.
Savings generated though lower manufacturing costs and reduced
general and administrative expenses are expect to be $.7 million
during 2006 and approximately $6.2 million during 2007 and
thereafter. Additional savings are anticipated to be derived from
the benefits of manufacturing in the anticipated lower cost
environment of the facility in Hangzhou, the timing and amount of
which will depend on the timing of product transfers and
substitutions over the balance of 2006.
About Inverness Medical
Headquartered in Waltham, Massachusetts, Inverness Medical
Innovations, Inc. (Amex: IMA) -- http://www.invernessmedical.com/
-- is a leading global developer of advanced diagnostic devices
and is presently exploring new opportunities for its proprietary
electrochemical and other technologies in a variety of
professional diagnostic and consumer-oriented applications
including immuno-diagnostics with a focus on women's health and
cardiology. The Company's new product development efforts, as
well as its position as a leading supplier of consumer pregnancy
and fertility/ovulation tests and rapid point-of-care diagnostics,
are supported by the strength of its intellectual property
portfolio.
* * *
As reported in the Troubled Company Reporter on July 7, 2005,
Moody's Investors Service downgraded Inverness Medical
Innovations, Inc.'s Corporate Family Rating to B3 from B2;
$150 million Senior Subordinated Notes to Caa3 from Caa1; Senior
Unsecured Issuer Rating to Caa1 from B3. Moody's said the outlook
remains negative.
As reported in the Troubled Company Reporter on April 6, 2005,
Standard & Poor's Ratings Services lowered its ratings on
Inverness Medical Innovations Inc., including the corporate credit
rating to 'B' from 'B+'. S&P said the outlook is stable.
IWT TESORO: McGladrey & Pullen Raises Going Concern Doubt
---------------------------------------------------------
McGladrey & Pullen, LLP, in New Haven, Connecticut, raised
substantial doubt about IWT Tesoro Corporation's ability to
continue as a going concern after auditing the Company's
consolidated financial statements for the year ended Dec. 31,
2005. The auditor pointed to the Company's recurring losses from
operations, and working capital and stockholders' deficiencies.
The Company reported a $4,343,457 net loss on $55,589,223 of net
sales for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $46,962,569
in total assets and $51,139,371 in total liabilities, resulting in
a $4,176,802 stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $43,828,261 in total current assets available to pay
$44,453,340 in total current liabilities coming due within the
next 12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?a1f
IWT Tesoro Corporation (OTCBB: IWTT) -- http://www.iwttesoro.com/
-- is as a wholesale distributor of building materials,
specifically hard floor and wall coverings, which consist of
ceramic, porcelain and natural stone floor, wall and decorative
tile. The Company imports a majority of these products from
suppliers and manufacturers in Europe, South America, and the Near
and Far East.
J. CREW: Earns $3.8 Million in Fiscal Year Ended Jan. 28, 2006
--------------------------------------------------------------
J. Crew Group, Inc., earned $3.8 million of net income on $953.2
million of net revenues for the year ended Jan. 28, 2006, compared
to a $100.3 million net loss on $901.4 million of net revenues for
the year ended Jan. 29, 2005.
Cash provided by operating activities decreased by $2 million to
$56.8 million in fiscal year 2005 compared to $58.8 million in
2004. Cash provided by operating activities in fiscal 2005
consisted of net income of $3.8 million and non-cash adjustments
of $76.8 million, reduced by an increase in working capital of
$23.8 million.
The increase in working capital consisted primarily of an increase
in inventories of $28.1 million, offset by an increase in accounts
payable and other current liabilities of $10.1 million.
Inventories were higher than prior years due to expected sales
increases in Spring 2006, and the earlier receipt of a portion of
these inventories.
The increase in accounts payable and other current liabilities was
primarily due to a $7.3 million increase in accounts payable which
is attributable to the increase in inventories.
As of Jan. 28, 2006, the Company's balance sheet showed total
assets of $337.3 million and total debts of $925.2 million
resulting in $587.8 million deficit.
A full-text copy of J. Crew Group's Annual Report is available for
free at http://researcharchives.com/t/s?a18
Headquartered in New York, J. Crew Group, Inc. --
http://www.jcrew.com/-- is a multi-channel apparel retailer that
operates 159 retail stores, 44 factory outlet stores, and a
catalogue business.
* * *
As reported in the Troubled Company Reporter on April 26, 2006,
Standard & Poor's Ratings Services assigned its 'B' rating and '3'
recovery rating to J. Crew Operating Corp.'s $285 million term
loan and listed that rating on CreditWatch with positive
implications.
JERNBERG INDUSTRIES: Wants Court to Approve PBGC Settlement Accord
------------------------------------------------------------------
Richard J. Mason, the chapter 7 trustee appointed in the
liquidation cases of JII Liquidating, Inc., fka Jernberg
Industries, Inc., and its debtor-affiliates, asks the U.S.
Bankruptcy Court for the Northern District of Illinois to approve
a settlement agreement with the Pension Benefit Guaranty
Corporation pertaining to the termination of Old Jernberg's
defined benefit pension plan and the appointment of PBGC as
trustee.
Michael M. Schmahl, Esq., at McGuireWoods LLP, in Chicago,
Illinois, reminds the Court that on Sept. 7, 2005, Old Jernberg
sold substantially all of its operating assets pursuant to a third
party. Effective October 10, 2005, the cases were converted to
cases under chapter 7 of the Bankruptcy Code, and Mr. Mason was
appointed as trustee.
When Old Jernberg and its affiliates filed for bankruptcy
protection they maintained for their employees certain defined
contribution benefit plans, and Old Jernberg maintained for
certain of its employees a defined benefit plan, known as the
"Jernberg Hourly Pension Plan."
Pursuant to an earlier Court order, the termination and wind-up
of the Defined Contribution Plans by the Trustee was approved.
The Trustee is thus in the process of terminating the Defined
Contribution Plans. The Defined Benefit Plan, certain benefits
of which are guaranteed by the PBGC, maintains approximately
$10.3 million in assets and has approximately 659 participants,
some of whom are now employed by New Jernberg. Investors Bank &
Trust Company is presently acting as the trustee of the trust
forming a part of the Defined Benefit Plan. The PBGC has advised
the Trustee that the Defined Benefit Plan is substantially
underfunded.
The PBGC has also advised the chapter 7 trustee that it will file
substantial priority or secured claims against the Debtors. Since
his appointment, the chapter 7 trustee has attempted to cooperate
with the PBGC in his efforts relative to the termination of the
Defined Benefit Plan.
Pursuant to Section 4042(c) of the Employee Retirement Income
Security Act of 1974, as amended, PBGC can enter into an agreement
with the plan administrator of a defined benefit pension plan
subject to Title IV of ERISA as to the termination of the plan and
as to the appointment of a trustee. PBGC now proposes to enter
into an agreement with the Trustee titled "Agreement for
Termination of Plan and Appointment of Trustee."
The principal features of the Proposed Agreement are that:
(a) the Defined Benefit Plan will be terminated as of
September 7, 2005; and
(b) the PBGC will be appointed trustee of the Defined Benefit
Plan.
Mr. Schmahl contends that the proposed agreement will also relieve
the chapter 7 trustee of any ongoing burdens arising from
administration of the Defined Benefit Plan.
Headquartered in Chicago, Illinois, Jernberg Industries, Inc., --
http://www.jernberg.com/-- is a press forging company that
manufactures formed and machined products. The Company and its
debtor-affiliates filed for chapter 11 protection on June 29, 2005
(Bankr. N.D. Ill. Case No. 05-25909). Jerry L. Switzer, Jr.,
Esq., at Jenner & Block LLP, represented the Debtors. When the
Debtors filed for chapter 11 protection, they estimated assets and
debts of $50 million to $100 million. CM&D Management Services,
LLC's A. Jeffery Zappone served as the Debtors' Chief
Restructuring Officer. The Bankruptcy Court converted the
Debtors' chapter 11 case to a chapter 7 liquidation proceeding on
Sept. 26, 2005.
KIWA BIO-TECH: Posts $184,443 Net Loss in 2006 1st Fiscal Quarter
-----------------------------------------------------------------
Kiwa Bio-Tech Products Group Corporation filed its financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 16, 2006.
The Company reported a $184,443 net loss on $11,023 of total sales
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $3,102,076
in total assets, $1,446,316 in total liabilities, and $611,367 in
stockholders' equity.
The Company's March 31 balance sheet also showed strained
liquidity with $1,244,026 in total current assets available to pay
$2,267,127 in total current liabilities coming due within the next
12 months.
Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?9fc
Going Concern Doubt
Mao & Company, CPAs, Inc., in New York, New York, raised
substantial doubt about Kiwa Bio-Tech Products Group Corporation's
ability to continue as a going concern after auditing the
Company's consolidated financial statements for the year ended
Dec. 31, 2005. The auditing firm pointed to the Company's
operating losses and working capital and net capital deficits.
Headquartered in City of Industry, California, Kiwa Bio-Tech
Products Group Corporation (OTCBB: KWBT.OB) --
http://www.kiwabiotech.com/ -- develops, manufactures,
distributes, and markets innovative, cost-effective and
environmentally safe bio-technological products for agriculture,
natural resources and environmental conservation.
KL INDUSTRIES: Hires Laner Muchin as Special Labor Counsel
----------------------------------------------------------
KL Industries, Inc., obtained authority from the U.S. Bankruptcy
Court for the Northern District of Illinois to employ Laner,
Muchin, Dombrow, Becker, Levin and Tominberg, Ltd., as its special
labor counsel.
Laner Muchin will:
a. give the Debtor legal advice in the areas of labor law,
employment law and employee benefits law;
b. represent the Debtor with respect to its ongoing
negotiations with the United Steelworkers, AFL-CIO, Local
No. 2154-36, including but not limited to negotiating the
Debtor's collective bargaining agreement with USW;
c. assist the Debtor in taking action as may be necessary with
respect to claims that may be asserted against the Debtor
by the USW; and
d. perform any and all other labor or employment related
services on behalf of the Debtor which may be required to
aid in the proper administration of its estate.
Anthony E. Dombrow, Esq., a partner at Laner Muchin, tells the
Court that partners at the firm bill between $225 to $440 per hour
while associates bill between $175 to $310 per hour.
Mr. Dombrow assures the Court that his firm does not hold or
represent any interest adverse to the Debtor or its estate.
Mr. Dombrow can be reached at:
Anthony E. Dombrow, Esq.
Laner, Muchin, Dombrow, Becker,
Levin and Tominberg, Ltd.
515 North State Street, Suite 2800
Chicago, IL 60610
Tel: (312) 467-9800
Fax: (312) 467-9479
Headquartered in Addison, Illinois, KL Industries, Inc.,
manufactures springs, assemblies and other products for the
automotive and electronic markets. The Company does business as
KL Spring & Stamping Division, KL Spring Division, KL Stamping
Division, KL Assembly Division and American Metal Forming
Division. The Company filed for bankruptcy protection on May 2,
2006 (Bankr. N.D. Ill. Case No. 06-04882). Peter J. Roberts,
Esq., and Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz
Wolfson & Towbin LLC represent the Debtor in its restructuring
efforts. The Official Committee of Unsecured Creditors has
retained Winston & Strawn LLP, to represent it in the Debtor's
case. When the Debtor filed for bankruptcy protection, it
reported assets totaling between $1 million and $10 million and
debts amounting between $10 million to $50 million.
KL INDUSTRIES: Court Approves RSM McGladrey as Financial Advisor
----------------------------------------------------------------
KL Industries obtained authority from the U.S. Bankruptcy Court
for the Northern District of Illinois to employ RSM McGladrey
Inc., as its financial advisor.
RSM McGladrey will:
a. provide the Debtor with general financial restructuring
advice;
b. assist the Debtor in the preparation of all required
filings in the Court including, but not limited to,
bankruptcy schedules, statement of financial affairs,
monthly operating reports, cash collateral budgets, etc.;
c. assist the Debtor's management in valuing the Debtor's
assets;
d. market the Debtor's assets to potential purchases and
evaluate any and all purchase offers for those assets;
e. prepare for, meet with and present information to
interested parties and their advisors;
f. review financial information generated by the Debtor,
including monthly operating reports, budgets and other
analyses, for consistency and accuracy, and provide advice
relating to financial and business issues;
g. assist and advise the Debtor in developing, evaluating,
structuring or negotiating the terms and conditions of a
chapter 11 plan;
h. prepare the Debtor's Federal and State income tax returns
and all other tax compliance requirements;
i. provide the Debtor with other financial advisory services
as the Debtor may require during the course of its chapter
11 case; and
j. provide testimony in Court.
Scoot Peltz, managing director of RSM McGladrey, tells the Court
that the Firm's professionals bill:
Professionals Hourly Rate
------------- -----------
Managing Directors and Directors $350 - $470
Managers and Senior Managers $230 - $320
Staff Consultants $180 - $215
Administrative Personnel $100 -$125
To the best of the Debtor's knowledge, the firm is disinterested
as that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Addison, Illinois, KL Industries, Inc.,
manufactures springs, assemblies and other products for the
automotive and electronic markets. The Company does business as
KL Spring & Stamping Division, KL Spring Division, KL Stamping
Division, KL Assembly Division and American Metal Forming
Division. The Company filed for bankruptcy protection on May 2,
2006 (Bankr. N.D. Ill. Case No. 06-04882). Peter J. Roberts,
Esq., and Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz
Wolfson & Towbin LLC represent the Debtor in its restructuring
efforts. The Official Committee of Unsecured Creditors has
retained Winston & Strawn LLP, to represent it in the Debtor's
case. When the Debtor filed for bankruptcy protection, it
reported assets totaling between $1 million and $10 million and
debts amounting between $10 million to $50 million.
L-3 COMMS: Jury Awards OSI $125.6MM in Damages in N.Y. Suit
-----------------------------------------------------------
The jury in U.S. District Court for the District of New York
issued a verdict against L-3 Communications in a litigation
arising out of a letter of intent between the Company and OSI
Systems, Inc., relating to the company's acquisition of the
detection systems business of PerkinElmer, Inc. OSI brought
counterclaims against the company alleging that the company
defrauded OSI and breached fiduciary duties alleged to be owed to
OSI.
The jury awarded OSI $125.6 million in damages, including awards
of $33 million for compensatory damages and $92.6 million for
punitive damages. The company believes this verdict and the
damages awarded are inconsistent with the law and evidence
presented. The company intends to move to have the verdict set
aside and, if necessary, to appeal.
Headquartered in New York City, L-3 Communications (NYSE: LLL) is
a leading provider of Intelligence, Surveillance and
Reconnaissance systems, secure communications systems, aircraft
modernization, training and government services. The company is a
leading merchant supplier of a broad array of high technology
products, including guidance and navigation, sensors, scanners,
fuzes, data links, propulsion systems, simulators, avionics,
electro optics, satellite communications, electrical power
equipment, encryption, signal intelligence, antennas and microwave
components. L-3 also supports a variety of Homeland Security
initiatives with products and services. Its customers include the
Department of Defense, Department of Homeland Security, selected
U.S. Government intelligence agencies and aerospace prime
contractors.
* * *
As reported in the Troubled Company Reporter on Dec. 2, 2005,
Moody's Investors Service affirmed the debt ratings of L-3
Communications Holdings, Inc., Corporate Family Rating of Ba2,
and has changed L-3 Communications Corporation's Speculative Grade
Liquidity Rating to SGL-1 from SGL-2.
LARRY'S MARKETS: Gets Interim Nod on Winterbauer as Labor Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington
gave its interim approval for Larry's Markets, Inc., to employ
Winterbauer & Diamond P.L.L.C. as its special labor and employment
counsel.
Winterbauer & Diamond is expected to provide employment and labor
advice, including matters involving collective bargaining
agreements and the Worker Adjustment and Retraining Notification
Act under Sections 2101 of Title 29 of the U.S. Code.
Steven H. Winterbauer, Esq., a member at Winterbauer & Diamond,
tells the Court that he will bill $285 per hour for this
engagement. Mr. Winterbauer discloses that the firm's other
professionals and support personnel bill between $105 to $190 per
hour.
Mr. Winterbauer assures the Court that his firm is disinterested
as that term is defined in Section 101(14) of the Bankruptcy Code.
Mr. Winterbauer can be reached at:
Steven H. Winterbauer, Esq.
Winterbauer & Diamond P.L.L.C.
1200 Fifth Avenue, Suite 1910
Seattle, WA 98101
Tel: (206) 676-8440
Fax: (206) 676-8441
Headquartered in Kirklan, Washington, Larry's Markets, Inc. --
http://www.larrysmarkets.com/-- operates several supermarkets and
department stores in the U.S. Northwest. The company filed for
chapter 11 protection on May 7, 2006 (Bankr. W.D. Wash. Case No.
06-11378). Armand J. Kornfeld, Esq., at Bush Strout & Kornfeld,
represents the Debtor. The Official Committee of Unsecured
Creditors has selected Marc L. Barreca, Esq., and Michael J.
Gearin, Esq., at Preston Gates & Ellis LLP, to represent it in the
Debtor's case. When the Debtor filed for protection from its
creditors, it listed total assets of $12,574,695 and total debts
of $21,489,800.
LEVITZ HOME: Landlords Want to Collect Unpaid Rents
---------------------------------------------------
MS Elmhurst, LLC, CS Elmhurst, LLC, MS Paramus, LLC, CLS
Diversified, LLC, Sea Plan, LLC and J.J.J.D. Associates, L.L.C.
-- the Landlords -- and Leasehold Agency Associates, Inc., as
agent for the Landlords, ask the U.S. Bankruptcy Court for the
Southern District of New York to compel Levitz Home Furnishings,
Inc., its debtor affiliates and PLVTZ, LLC, to:
(a) pay postpetition rent; and
(b) pay or bond obligations, including attorney's fees and
costs, relating to mechanic liens, or cause the
satisfaction, discharge and release of mechanic liens
filed in respect of certain nonresidential real property
leases with Seaman Furniture Company, Inc.
According to Remy J. Ferrario, Esq., at Golub & Golub, LLP, in
New York, the Debtors or the Purchasers failed to pay
postpetition rent and other charges under four unexpired
non-residential real property leases, and to bond, pay or
satisfy, discharge and extinguish mechanic liens filed against
premises under two of those leases between Seaman and the
Landlords.
The Seaman Leases relate to premises located at:
(1) 86-08 Queens Boulevard, Elmhurst, New York (two mechanic
liens have been filed against the Elmhurst Premises;
(2) 55 Route No. 4, Paramus, New Jersey;
(3) Route 110 and Schmidt Boulevard, Farmingdale, New York
(three mechanic liens have been filed against the
Farmingdale Premises); and
(4) the Nesconset-Port Jefferson Highway, Smithtown, New York.
Mr. Ferrario reminds the Court that, on January 20, 2006, the
Smithtown Lease has been designated by the Purchasers as a
"Dropout Lease." The Purchasers' obligation to pay expenses for
the Dropout Property ceased on January 31, 2006.
On January 25, 2006, the Debtors filed a notice rejecting the
Smithtown Lease.
The Landlords seek immediate payment of:
(a) $74,067 for the Elmhurst Lease;
(b) $81,742 for the Farmingdale Lease;
(c) $41,649 for the Paramus Lease; and
(d) $41,170 for the Smithtown Lease.
The mechanic's liens asserted under the Farmingdale Lease total
$426,369; and $22,675 as to the Elmhurst Lease.
PLVTZ Objects
PLVTZ, LLC, as purchasers of substantially all of the Debtors'
assets, tells the Court that the Prepetition Rent Claims are not
immediately due and payable because the Prepetition Rent Claims
and the Leases have not been assumed.
Under the Asset Purchase Agreement, PLVTZ does not have any
obligation to pay any amounts accruing before the Petition Date
unless they are part of a cure payment. With respect to the
Smithtown Lease, it is a prepetition unsecured claim because the
Debtors rejected it, PLVTZ adds.
D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in
New York, relates that the PLVTZ does not dispute that it is
obligated to pay postpetition October 2005 rent in respect of any
stores that were not Excluded Stores as of the Closing Date,
however, it has not been able to obtain the Landlords'
calculation of the Stub Period Rent Claim or information upon
which to verify the calculation.
Mr. Baker points out that there is no present obligation for the
Debtors and PLVTZ to pay the claims for the Elmhurst, Paramus,
and Farmingdale Premises. It would be premature, Mr. Baker
asserts, to allow claims for stub rent as an administrative
expense and fulfill obligations for postpetition, pre-Closing
amounts.
If the Elmhurst, the Farmingdale, and the Paramus Leases were
ultimately rejected, any claims for postpetition real estate
taxes, CAM, insurance or other obligations would be evaluated and
paid where appropriate upon rejection.
Furthermore, there is no present obligation for the Debtors and
PLVTZ to pay or otherwise satisfy the mechanic's liens filed
against the Elmhurst and Farmingdale Premises, Mr. Baker says.
Accordingly, PLVTZ asks the Court to reject the Landlords'
request.
About Levitz Home
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 13 Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LEVITZ HOME: Court Grants Lease Assumption and Assignment Plea
--------------------------------------------------------------
As reported in the Troubled Company Reporter on May 4, 2006,
Levitz Home Furnishings, Inc., and its debtor-affiliates sought
authority from the U.S. Bankruptcy Court for the Southern District
of New York to assume and assign these leases to PLVTZ, LLC:
Store# Address Landlord Cure Amount
------ ------- -------- -----------
10302 Brooklyn, J.W. Mays, Inc. $0
New York
30301 Rosemead, Glendon Way Associates, $30,118
California c/o Primestor
Development
30307 Hawthorne, Primstor Development, $12,567
California Inc., c/o Sherwood
Village, LLC
30507 Murrieta, Village Walk Retail, $0
California L.P., c/o Aurthur
Pearlman Corporation
30701 Tigard, Oregon Krausz Enterprises & $0
Krausz Puente, LLC
40603 Las Vegas, Nevso, L.L.C. $0
Nevada
40506 Tempe, Arizona Commercial Net Lease $46,301
Realty, Inc.
10102 Holbrook, Sun Lakes Plaza $32,415
New York Associates
10304 Brooklym, Richard Sachs Interiors, $107,979
New York Inc., c/o A.J. Richard &
Sons, Inc.
10903 Valley Stream, Green Acers Mall, L.L.C. $75,211
New York
20502 Bronx, Bay Plaza Community $111,807
New York Center, LLC, c/o
Prestige Properties &
Development Co.
40401 Concord, R&B Heritage Investors, $120,131
California LP, and Marina Square
Partners, LP, c/o Reynolds
& Brown
30401 Anaheim, Wohl/Anaheim LLC, c/o $15,475
California Wohl Investment Company
30101 Ontario, Ontario Home Partners, $49,320
California Ltd.
30302 Cerritos, Cerritos Best Plaza, $116,493
California c/o Barco Real Estate
Management
30204 San Dimas, R&W San Dimas, LLC $24,499
California
30206 Newhall, Glendon Way Associates & $57,177
California PETsMART, Inc.
30402 Huntington Freeway Industrial Park $90,795
Beach, Huntley Associates
California
40602 Las Vegas, Constantino Noval Nevada $148,908
Nevada LLC, c/o American
Management Company
40502 Mesa, Arizona Krausz Puente, LLC, c/o $40,641
The Krausz Companies,
Inc.
Judge Lifland grants the Debtors' request as it relates to the
leases for:
(a) Store Nos. 10302, 30301, 30307, 30701, 40603, 10102,
20502, 30401, 30101, 30302, 30204, 30206 and 30402;
(b) Store No. 30507, to the extent that, among other things,
the assumption and assignment of the Lease will be of the
entire Lease, including the First Amendment and any other
amendments; and
(c) Store No. 10304, to the extent that, among other things:
* The Debtors or PLVTZ will be responsible for the
$165,000 cure amount; and
* PLVTZ will place $130,000 in a separate segregated
account to cover certain cure amounts claimed by
Richard Sachs for Store No. 10304 as part of the
appropriate cure amount, and which PLVTZ disputes; and
* The Objection to Store No. 10304 is resolved in part
with respect to the Cure Payment as provided, which
payment will be final and non-recoverable, and the
Objection is otherwise reserved with regard to the
Disputed Cure Claim.
Counsel for PLVTZ, with assistance from the Debtors, if
required, will identify all disputed issues with regard to
the Disputed Cure Claim by May 11, 2006, and provide
copies of all of the documentation upon which PLVTZ and
the Debtors rely in support of their position concerning
the Disputed Cure Claim as soon as practicable thereafter
but in no event later than May 18, 2006.
In the event that Richard Sachs and PLVTZ cannot reach a
consensual resolution with respect to the Disputed Cure
Claim, a hearing to determine the proper amount, if any,
that will be paid as the additional Cure Amount will be
held.
The Court will conduct a hearing, if necessary, on the Debtors'
request to assume and assign the Leases with respect to Store
Nos. 40506, 10903 and 40401, as well as the Disputed Cure Claim,
at a later date.
More Responses
(a) Freeway Industrial Park, et al.
Five landlords ask the Court to condition the Debtors' proposed
assumption and assignment to PLVTZ, LLC, of their Leases upon
payment of the proper cure amounts that are due and owing.
The objecting parties are:
Debtors' Landlords'
Asserted Asserted
Store No. Objecting Party Cure Amount Cure Amount
--------- --------------- ----------- -----------
30402 Freeway Industrial Park $90,795 $98,570
10903 Vornado Realty Trust, as $75,211 $145,872
agent of Green Acres
Mall, LLC
30204 R&W San Dimas, LLC $24,499 $37,054
40401 Macy's Department Stores, $120,131 $121,810
Inc., formerly known as
Macy's West, Inc.
10304 Richard Sachs Interiors, $107,979 $293,329
Inc.
The Landlords assert outstanding defaults with respect to their
Leases, consisting of:
* outstanding rent payments;
* real estate taxes and adjustments;
* common area maintenance charges;
* due year-end adjustments; and
* other potential unknown indemnification claims.
Additionally, the Landlords reserve their right to amend,
supplement or modify their asserted Cure Amounts for any reason,
including attorneys' fees.
Moreover, some of the Landlords ask the Court not to permit the
Debtors to assign their Leases to PLVTZ unless PLVTZ agrees and
is required to comply with all of the terms of their Leases,
including maintenance obligations.
Racanelli Construction Company, Inc., was retained by the Debtors
to provide extensive general contracting services to a number of
the Debtors' store locations in the tri-state area.
Racanelli asserts it is owed not less than:
(1) $11,883 for Store No. 10302;
(2) $1,055 for Store No. 20502; and
(3) $76,467 for Store No. 10903.
Racanelli thus objects to the proposed assumption and assignment
of the Store Leases to the extent that it does not contemplate a
cure that satisfies the amounts due and owing to Racanelli in
connection with the Leases. Racanelli asserts that the Debtors'
proposed cure is unsatisfactory.
Accordingly, Racanelli asks the Court to condition the approval
of the Debtors' request upon payment of the proper amounts due to
Racanelli, or otherwise resolving Racanelli's liens and claims.
(b) Village Walk
Village Walk Retail, L.P., and Levitz Furniture, LLC, are parties
to a Reverse Build to Suit Lease dated as of December 31, 2004,
covering premises located at Murrieta, California and designated
as Store No. 30507.
After the Petition Date, the parties entered into a First
Amendment to the Original Lease with the knowledge and consent of
the proposed assignee, PLVTZ, LLC.
Village Walk does not oppose the assumption and assignment of its
Lease. Village Walk simply seeks confirmation from the Debtor
and PLVTZ if the Debtor will assume and assign the entire Lease,
including the First Amendment, or only the Original Lease.
(c) R&B Heritage and Marina Square
R&B Heritage Investors, L.P., and Marina Square Partners, L.P.,
the lessors to Macy's West, Inc., ask the Court to deny the
proposed assumption and assignment of their lease with respect to
Store No. 40401 located at Concord, California, because:
(a) The Lease will terminate by its own terms on July 31,
2006, and Levitz Furniture Corporation failed to
effectively exercise any option to extend the Lease beyond
that date;
(b) The Debtors have not and cannot cure the defaults under
the Lease;
(c) PLVTZ has not and cannot provide adequate assurances of
future performance to the Landlord; and
(d) The Debtors have failed to identify a proposed use of the
Premises that is compatible with the shopping center
environment.
About Levitz Home
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 13 Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LOVESAC CORP: Gets Court Okay to Hire Squire Sanders as Counsel
---------------------------------------------------------------
The LoveSac Corporation and its debtor-affiliates obtained
permission from the U.S. Bankruptcy Court for the District of
Delaware to employ Squire, Sanders & Dempsey LLP as their
bankruptcy counsel.
As reported in the Troubled Company Reporter on Feb. 3, 2006,
Squire Sanders will:
(a) advise the Debtors with respect to their power and duties
as debtors-in-possession in the continued management and
operation of their businesses and property;
(b) attend meetings and negotiate with representatives of
creditors and other parties-in-interest and advise and
consult on the conduct of the Debtors' bankruptcy cases,
including all of the legal and administrative requirements
of operating in chapter 11;
(c) assist the Debtors with the preparation of their Schedules
of Assets and Liabilities and Statements of Financial
Affairs;
(d) advise the Debtors in connection with any sales of assets
or business combinations, including the negotiation of
asset, stock, purchase, merger or joint venture agreements,
formulate and implement appropriate procedures with respect
to the closing of any of those transactions, and counseling
the Debtors in connection with those transactions;
(e) advise the Debtors in connection with any postpetition
financing and cash collateral arrangements and negotiate
and draft documents relating to them, provide advice and
counsel with respect to prepetition financing arrangements,
and negotiate and draft documents relating to them;
(f) advise the Debtors on matters relating to the evaluation of
the assumption, rejection or assignment of unexpired leases
and executory contracts;
(g) advise the Debtors with respect to legal issues arising in
or relating to the Debtors' ordinary course of business,
including attendance at senior management meetings,
meetings with the Debtors' financial and turnaround
advisors and meetings of the board of directors;
(h) take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions on
their behalf, the defense of any actions commenced against
them, negotiations concerning all litigation in which the
Debtors are involved and objecting to claims filed against
the Debtors' estates;
(i) prepare, on the Debtors' behalf, all motions, applications,
answers, orders, reports and papers necessary to the
administration of the estates;
(j) negotiate and prepare, on the Debtors' behalf, a plan or
plans of reorganization, disclosure statement and all
related agreements and documents and taking any necessary
action on behalf of the Debtors to obtain confirmation of
those plan or plans;
(k) attend meetings with third parties and participating in
negotiations with respect to the above matters;
(l) appear before the Court, any appellate courts and the
United States Trustee and protecting the interests of the
Debtors' estates before those court and the United States
Trustee;
(m) perform all other necessary legal services and provide all
other necessary legal advice to the Debtors in connection
with their bankruptcy cases; and
(n) perform all other necessary legal services and provide all
other necessary legal as requested by the Debtors including
but not limited to corporate finance, franchising,
litigation, regulatory, labor, tax, corporate and
intellectual property matters.
Stephen D. Lerner, Esq., a partner at Squire, Sanders & Dempsey
LLP, disclosed that the Firm received a $100,000 retainer. The
Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Partners $295 to $790
Associates and Of Counsel $145 to $630
Paralegals and Legal Assistants $50 to $240
Headquartered in Salt Lake City, Utah, The LoveSac Corporation --
http://www.lovesac.com/-- operates and franchises retail stores
selling beanbags furniture. The LoveSac Corp. and three
affiliates filed for chapter 11 protection on Jan. 30, 2006
(Bankr. D. Del. Case No. 06-10080). Anthony M. Saccullo, Esq.,
and Charlene D. Davis, Esq., at The Bayard Firm and P. Casey
Coston, Esq., at Squire, Sanders & Dempsey LLP represent the
Debtors in their restructuring efforts. Michael W. Yurkewicz,
Esq., at Klehr Harrison Harvey Branzburg & Ellers represents the
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $10 million to $50 million.
LOVESAC CORP: Governmental Units Can File Claims Until July 31
--------------------------------------------------------------
Governmental units have until July 31, 2006 to file their proofs
of claim in The LoveSac Corporation and its debtor-affiliates'
chapter 11 cases.
Governmental unit proofs of claim must be sent either by mail or
courier on or before 4:00 pm, Pacific time, to:
The LoveSac Corporation Claims Processing
c/o Kurtzman Carson Consultants LLC
12910 Culver Boulevard, Suite I
Los Angeles, CA 90066
These claims were expected filed as of May 22, 2006:
1. unsecured claims;
2. litigation claims;
3. worker's compensation claims; and
4. administrative agency claims.
Headquartered in Salt Lake City, Utah, The LoveSac Corporation --
http://www.lovesac.com/-- operates and franchises retail stores
selling beanbags furniture. The LoveSac Corp. and three
affiliates filed for chapter 11 protection on Jan. 30, 2006
(Bankr. D. Del. Case No. 06-10080). Anthony M. Saccullo, Esq.,
and Charlene D. Davis, Esq., at The Bayard Firm and P. Casey
Coston, Esq., at Squire, Sanders & Dempsey LLP represent the
Debtors in their restructuring efforts. Michael W. Yurkewicz,
Esq., at Klehr Harrison Harvey Branzburg & Ellers represents the
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $10 million to $50 million.
MIAD SYSTEMS: Amends Annual 2005 Report & Two 2006 Fiscal Quarters
------------------------------------------------------------------
MIAD Systems Ltd. filed with the Securities and Exchange
Commission on May 26, 2006, its amended financial statements for:
-- the year ended Sept. 30, 2005;
-- the first quarter ended Dec. 31, 2005; and
-- the second quarter ended March 31, 2006.
The company's Statement of Operations showed:
For the period ended
----------------------------------
Year Quarter Quarter
09/30/05 12/31/05 03/31/06
---------- ---------- ----------
Revenue $8,321,083 $1,631,180 $1,296,470
Net Income (Loss) $28,492 ($778,827) ($910,701)
The company's Balance Sheet showed:
For the period ended
----------------------------------
Year Quarter Quarter
09/30/05 12/31/05 03/31/06
---------- ---------- ----------
Current Assets $1,374,212 $1,266,200 $861,177
Total Assets $1,537,169 $1,422,976 $1,016,985
Current
Liabilities $1,695,319 $1,611,504 $1,337,387
Total
Liabilities $1,695,319 $1,611,504 $1,337,387
Stockholders'
Deficit $158,150 ($188,528) ($320,402)
Full-text copies of the company's financial statements are
available for free at:
Year Ended Sept. 30, 2005 http://ResearchArchives.com/t/s?a03
First quarter ended
Dec. 31, 2005 http://ResearchArchives.com/t/s?a04
Second quarter ended
March 31, 2006 http://ResearchArchives.com/t/s?a05
Markham, Ontario-based MIAD Systems Ltd. -- http://www.miad.com/
-- is an established full-line supplier of business computer
systems as well as a provider of computer maintenance,
installation and networking services. MIAD does not sell to
individuals but provides these goods and services to its major
clients who are primarily engaged in the corporate, institutional,
municipal, utilities and education fields, typically as part of
their computer networks.
MIRANT CORP: Proposes to Acquire NRG Energy for $8 Billion
----------------------------------------------------------
Mirant Corporation made a proposal to acquire NRG Energy, Inc. at
a premium of approximately 33% to NRG's share price as of Tuesday,
May 30, 2006. The proposal would be immediately accretive to the
pro forma free cash flow per share of Mirant. Mirant received a
financing commitment from JPMorgan of approximately $11.5 billion
for the transaction.
NRG flatly rejected the proposal without engaging in any
discussions with Mirant. Mirant continues to believe that the
proposal creates significant value for the owners of both
companies and has decided to make its proposal public in a letter
to NRG's board of directors.
Edward R. Muller, Mirant's Chairman and Chief Executive Officer,
stated in the letter that:
"We were disappointed that you would reject so quickly on behalf
of your shareholders, without any discussion with us, our
acquisition proposal of May 10, 2006, which provides your
shareholders a substantial premium to their share price and the
opportunity to participate in the additional value creation we
expect from the combined company. We think that it is important
for your shareholders to be informed of such a compelling
opportunity, and, therefore, we are simultaneously releasing this
letter to the public.
"In the transaction we proposed, your shareholders would receive,
at their election, $57.50 per share in cash or Mirant Corporation
common stock at an exchange ratio of 2.25 Mirant shares for each
share of NRG common stock, based upon our understanding that you
have 137.5 million fully diluted shares outstanding. Your
shareholders' elections to receive the total of approximately
$3.9 billion in cash (representing 50% of the total consideration)
or Mirant common stock would be subject to proration to preserve
the 50/50 cash/stock mix in the deal.
"This transaction would provide a blended value of approximately
$57.16 per share of NRG common stock and would represent a
substantial premium of approximately 33% to NRG's share price,
based on the closing prices of Mirant and NRG on Tuesday, May 30,
2006. In addition, your shareholders would receive a premium of
approximately 33% to your one-year average trading price and
approximately 55% to your two-year average trading price.
"We think that a combination of Mirant and NRG would create an
enterprise with significant opportunities for expense and
operational synergies and a national footprint that is without
parallel. The combination would generate a number of specific and
compelling benefits. Our best estimate of the annual cost savings
from the reduction of overlapping functions is $150 million (based
on publicly available information), in addition to significant
opportunities for cost savings from the procurement and use of
fuel and in the application of emissions credits. The combination
also would diversify the risks associated with the assets and
operations of both companies. In addition, the combination would
create the largest independent power company in the United States
with a strong presence in four key regions (Texas, Mid- Atlantic,
Northeast and California). The combined company would have over
43,000 megawatts globally, with over 37,500 megawatts in the
United States. Approximately 32% of its domestic capacity would
be low-cost, baseload generating capacity. Finally, the
combination would enhance liquidity and value for the shareholders
of both companies. We estimate that the combined company would
have adjusted EBITDA for 2007 in excess of $3 billion. The
transaction would be immediately accretive to Mirant's pro forma
free cash flow per share. In short, we think that the combined
company would deliver superior returns to our combined shareholder
base, with benefits flowing to our respective customers, employees
and other constituencies as well.
"Mirant emerged from Chapter 11 on January 3, 2006, with what
most observers characterize as the strongest balance sheet in
the industry. Since Jan. 3, 2006, a total of approximately
275 million of our shares have traded, representing approximately
92% of our total outstanding shares. Our hedging strategy has
been effective in reducing risk while improving our earnings
profile. We currently expect that cash flows from operations
through 2011 will be sufficient to fund our forecasted capital
expenditures, including those for required environmental controls.
Finally, we have a new management team with extensive experience
in the industry.
"We think that now is the right time to pursue a combination of
our companies, and we are committed to doing so on an expedited
basis. Our Board of Directors has approved our proposal, and we
are prepared to begin negotiations of the terms of our proposal
with you immediately and to enter into a definitive merger
agreement and complete the transaction as soon as possible. We
have received a financing commitment from JPMorgan of
approximately $11.5 billion which, when combined with our
available cash, will:
* fund the cash portion of the purchase consideration for your
common and, if necessary, preferred stock;
* refinance your senior credit facilities; and
* fund the purchase of your 7.250% Senior Notes and 7.375%
Senior Notes pursuant to a change of control offer at a price
equal to 101% of the aggregate principal amount, plus accrued
and unpaid interest.
"The indebtedness of our subsidiaries, including Mirant Americas
Generation, LLC and Mirant North America, LLC, would remain in
place. We expect that due diligence can be completed quickly. In
addition, given the complementary geographies of our respective
operations, we expect that all regulatory approvals will be
obtained expeditiously. With your cooperation, we think that we
can close the transaction in 2006.
"We expect your shareholders to respond enthusiastically to this
transaction: current shareholders who wish to exit will have the
opportunity to do so at an attractive premium; those shareholders
who choose to continue as investors in the combined company will
receive both an attractive premium and have the opportunity to
participate in the additional value creation we expect from the
combination. We believe ardently in the wisdom and strategic
value of this transaction and the benefits it offers to our
combined shareholders and stakeholders. This matter has the
highest priority for us."
About NRG Energy
Headquartered in Princeton, New Jersey, NRG Energy, Inc. --
http://www.nrgenergy.com/-- currently owns and operates a diverse
portfolio of power-generating facilities, primarily in the
Northeast, South Central and Western regions of the United States.
Its operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities. NRG also has ownership interests in
generating facilities in Australia and Germany.
About Mirant
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 Jan. 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.
At Dec. 2, 2005, Moody's Investors Service assigned a B1 long-term
corporate family rating to Mirant Corp.
MIRANT CORP: Acquisition Proposal Undervalues NRG Energy
--------------------------------------------------------
NRG Energy, Inc. confirmed, on May 30, 2006, that it has received
an unsolicited proposal from Mirant Corporation regarding a
potential combination in letters dated May 10 and 30, 2006.
Consistent with its fiduciary duties and in consultation with its
financial advisor and legal counsel, NRG's Board of Directors
reviewed the Mirant proposal and deemed it not in the best
interests of NRG shareholders. NRG shareholders do not need to
take any action at this time.
Citigroup is serving as financial advisor to NRG, and Skadden,
Arps, Slate, Meagher & Flom LLP is legal counsel.
On May 23, 2006, NRG sent a response letter to Edward R. Muller,
Chairman and Chief Executive Officer of Mirant Corporation and the
Mirant Board of Directors.
The letter from Howard Cosgrove, NRG's Chairman of the Board, and
David Crane, NRG's President and Chief Executive Officer, stated
that:
"The Board of Directors of NRG Energy, Inc., with the assistance
of its financial and legal advisors, has reviewed and thoroughly
considered your May 10, 2006 letter. Based upon this review the
Board has unanimously rejected your proposal because it is not in
the best interests of NRG shareholders. The NRG Board has
specifically authorized this response.
"As discussed below, the Board has found your proposal deficient
in at least three key respects:
* it significantly undervalues NRG;
* our concerns about Mirant's value and your stock's relative
lack of liquidity and trading history makes Mirant's stock an
unacceptable currency; and,
* finally, having taken into account trends and developments in
the wholesale power generation sector, we do not believe this
is the appropriate time to engage in a sale process.
"Having spent considerable time analyzing Mirant, its assets and
prospects -- both during the three years you spent in bankruptcy
and the four months since you emerged -- we have concluded that
Mirant is a company and stock with flat earnings, little to no
growth opportunity beyond 2007, substantial and imminent
environmental capital expenditures, and significant EBITDA
exposure to developing country risk. Additionally, with only a
four-month trading history and an average daily trading volume of
2.7 million shares during those four months, we believe that
Mirant's stock lacks a sufficient track record and liquidity for
us to recommend to our shareholders that they accept over 150
million Mirant shares as you propose. These factors far outweigh
any synergistic benefits that might come from a combination of the
two companies.
"For these reasons, NRG's Board and management strongly believe
that our shareholders would be poorly served by being exposed to
Mirant's challenges through ownership of Mirant equity on the
terms set forth in your proposal.
On the question of timing, we believe our cyclical industry has
just begun to emerge out of a multi-year trough and, over the next
couple of years, we will experience continued robust commodity
prices, supply shortfalls in our core regions, spark spread
recovery and a rationalization of the utility industry in such a
way that the intrinsic value of NRG (and the value of NRG as a
potential acquisition candidate) will rise rapidly. And we are
confident that we will be able to convert the rise in intrinsic
value of NRG into increased market value. Over the past 24
months, NRG's stock has appreciated 120% as the market has
recognized the value of our asset mix, the soundness of our
strategy and our track record in its implementation, including:
* a diverse multi-regional domestic portfolio of 22,848 MW;
* a substantial EBITDA growth rate past 2007 from hedges placed
at rising prices;
* a thriving brownfield development program across all regions;
and
* a history of returning capital to shareholders through two
substantial share buybacks in the first 18 months of our
existence.
"We are confident that our stock is poised for further
appreciation as we capitalize on the positive industry trends and
as the market comes to recognize our embedded growth potential
particularly post-2007. In this regard, we note that the premium
reflected in your proposal is far less than the annual compound
average growth rate of NRG's share price appreciation.
"To clarify one point, your letter references past meetings
between you and our Chief Executive Officer, David Crane, on the
topic of combining NRG and Mirant. Our Company's strategic
interest in Mirant predates your tenure there and is well known to
anyone who has read transcripts of your bankruptcy hearings. When
Mr. Crane discussed a combination of the two companies with you
last November, it was in the context of NRG acquiring Mirant,
since at that time Mirant's stock was neither listed nor actively
traded. Once your company finally emerged from bankruptcy in
January 2006, our Board specifically reviewed the possible
acquisition of Mirant by NRG. We decided not to do so on the
grounds that at $25 per share Mirant's stock was overvalued, and
we were not willing to risk NRG's reputation for financial
discipline on an overpriced bid for Mirant. When you approached
Mr. Crane in March to propose a "no premium" acquisition of NRG by
Mirant, Mr. Crane advised you that such a transaction (at the
price for NRG's shares implied by your proposal) was not worth
pursuing further given that it would be massively dilutive to NRG
shareholders -- a point of view which neither you nor Goldman
Sachs has ever attempted to refute.
"As you know, NRG believes that industry consolidation is
inevitable, and we expect to participate -- either as a buyer or a
seller. You should also know that we would only pursue
transactions that create unquestionable value for our
stockholders. Your proposal is simply the wrong deal at the wrong
time."
About NRG Energy
Headquartered in Princeton, New Jersey, NRG Energy, Inc. --
http://www.nrgenergy.com/-- currently owns and operates a diverse
portfolio of power-generating facilities, primarily in the
Northeast, South Central and Western regions of the United States.
Its operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities. NRG also has ownership interests in
generating facilities in Australia and Germany.
About Mirant
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 Jan. 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.
At Dec. 2, 2005, Moody's Investors Service assigned a B1 long-term
corporate family rating to Mirant Corp.
NCP MARKETING: Files Plan & Disclosure Statement in Nevada
----------------------------------------------------------
N.C.P. Marketing Group, Inc., delivered to the U.S. Bankruptcy
Court for the District of Nevada a disclosure statement explaining
its plan of reorganization.
Under the Plan, Administrative and Priority Tax Claims will be
paid in full in cash.
Holders of Century Secured Claim will receive a plan note interest
which will entitle Century Incorporated to a priority payment from
the Plan Trust until the Century Secured Claim is paid in full.
Holders of General Unsecured Priority Claims will also receive
plan note interests, which will entitle them to payment pursuant
to a Plan Trust Agreement.
Holders of Non-Tax Priority Claims will receive cash equal to the
allowed amount of their claim while holders of Other Secured
Claims will receive payment pursuant to a Plan Trust Agreement.
Holders of Qualified Equity Interests will not receive any
distribution under the Plan unless and until all claims in senior
classes have been paid in full. Intercompany claims which
consists General Unsecured Claims of the Debtors' affiliates will
receive nothing under the Plan
Headquartered in North West Canton, Ohio, N.C.P. Marketing Group,
Inc. is an infomercial producer and global marketer of the
platinum award-winning original Billy Blanks' Tae-Bo Video
Library. The Debtor filed for chapter 11 protection on
April 13, 2004 (Bankr. Nev. Case No. 04-51071). Jeffrey Baddeley,
Esq., at Spangenberg Shibley & Liber LLP and Jennifer A. Smith,
Esq., at Lionel Sawyer & Collins represent the Debtor in its
restructuring efforts. No Official Committee of Unsecured
Creditors has been appointed in this case. When the Debtor filed
for protection from its creditors, it estimated assets and debts
between $10 million to $50 million.
NATIONAL MENTOR: To Buy Back $150 Mil. of 9-5/8% Sr. Sub. Notes
---------------------------------------------------------------
National Mentor, Inc., commenced a cash tender offer and consent
solicitation for any and all outstanding $150,000,000 aggregate
principal amount of its 9-5/8% Senior Subordinated Notes due 2012
(CUSIP No. 63688XAB0). This tender offer and consent solicitation
is subject to the terms and conditions set forth in Offer to
Purchase and Consent Solicitation Statement dated May 25, 2006.
This offer to purchase the Notes is part of the Company's
refinancing in connection with its pending merger with an
affiliate of Vestar Capital Partners V, L.P. The merger is
currently expected to close on June 29, 2006.
The tender offer is scheduled to expire at 8:00 a.m., New York
City time, on June 29, 2006, unless extended. The consent
solicitation is scheduled to expire at 5:00 p.m., New York City
time, on June 12, 2006, unless extended.
The total consideration for each $1,000 principal amount of Notes
validly tendered and accepted for payment and consents validly
delivered on or prior to the Consent Date will be equal to the
present value of $1,048.13 and all future interest payments on the
Notes to Dec. 1, 2008, minus accrued and unpaid interest from the
last date on which interest has been paid, up to, but not
including, the settlement date. The present value will be
determined using a yield equal to the bid price on the 3.375% U.S.
Treasury Note due Dec. 15, 2008 at 2:00 p.m., New York City time,
on June 12, 2006, plus a fixed spread of 50 basis points. The
total consideration for each Note tendered includes a consent
payment of $30.00 per $1,000 principal amount of Notes to holders
who validly tender their Notes and deliver their consents prior to
5:00 p.m. on the Consent Date.
Holders who tender their Notes after the Consent Date will not
receive the consent payment. Payment for all Notes validly
tendered in the tender offer, including the consent payment for
consents validly delivered on or prior to the Consent Date, will
be made promptly after expiration of the tender offer for the
Notes.
In conjunction with the tender offer, the Company is soliciting
the consents of the holders of the Notes to eliminate
substantially all of the restrictive covenants and certain events
of default and related provisions in the indenture under which the
Notes were issued. Holders who tender their Notes must consent to
the proposed amendments.
The tender offer and consent solicitation is subject to the
satisfaction of certain conditions, including
(1) the merger of NMH MergerSub, Inc., a wholly owned
subsidiary of NMH Investments, LLC, an affiliate of Vestar
Capital Partners V, L.P., with and into National Mentor
Holdings, Inc., the parent company of the Company;
(2) the Company having repaid its obligations under its
existing senior secured credit facilities pursuant to a
refinancing of those facilities;
(3) the Company having received, on or prior to the Consent
Date, consents, which have not been revoked in respect of
at least a majority in principal amount of the Notes and a
supplemental indenture having been signed and delivered in
respect of the proposed amendments; and
(4) certain other customary conditions.
The Company may waive some or all of these conditions in its sole
discretion and may amend, extend or terminate the tender offer and
consent solicitation in its sole discretion.
The complete terms and conditions of the tender offer and consent
solicitation are described in the Offer to Purchase and Consent
Solicitation Statement dated May 25, 2006, copies of which may be
obtained from the information agent for the tender offer and
consent solicitation:
MacKenzie Partners, Inc.
Telephone (212) 929-5500 (collect)
U.S. Toll Free (800) 322-2885
The Company has engaged J.P. Morgan Securities Inc. to act as
dealer manager and solicitation agent in connection with the
tender offer and consent solicitation. Questions regarding the
tender offer and consent solicitation may be directed to:
J.P. Morgan Securities Inc.
Telephone (212) 270-9769
The Depositary for the tender offer and consent solicitation and
can be contacted at:
U.S. Bank National Association
Telephone (800) 934-6802
About the Company
Headquartered in Boston, Massachusetts, National MENTOR, Inc. --
http://www.thementornetowrk.com/-- is a leading provider of home
and community-based services for individuals with mental
retardation and other developmental disabilities, at-risk youth
and persons with acquired brain injury.
* * *
As reported in the Troubled Company Reporter on April 3, 2006,
Standard & Poor's Ratings Services placed its ratings on
Boston, Massachusetts-based special-needs services provider
National Mentor Inc., including the 'B+' corporate credit rating,
on CreditWatch with negative implications (indicating that the
ratings could be lowered or affirmed upon further review). The
CreditWatch placement follows National Mentor's announcement that
management, in partnership with Vestar Capital Partners, will
acquire the company.
NES RENTALS: Accepts $850MM Purchase Offer from Diamond Castle
--------------------------------------------------------------
NES Rentals Holdings, Inc., concluded its strategic review process
by signing a definitive agreement to be acquired by affiliates of
Diamond Castle Holdings, LLC, a New York-based private equity
firm, in a transaction valued at approximately $850 million,
including the assumption of certain liabilities.
Under the terms of the agreement, Diamond Castle will acquire
all of the outstanding common stock of NES Rentals for $18.75
per share in cash. The purchase price per share represents a
42% premium to the Company's closing price per share of $13.25
on Jan. 12, 2006, the day on which the Company reported it would
explore strategic alternatives.
NES Rentals Chairman and Chief Executive Officer Andrew Studdert
said the implementation of a series of operating and revenue
initiatives during the past two years has improved return on
investment. "After undergoing significant change in recent years,
NES Rentals has emerged as a well-positioned and profitable
business," he said. "The progress we have made allowed us to be
in a position to consider options to unlock the value of our
Company."
As reported in the Troubled Company Reporter on Jan. 18, 2006, the
Company's Board of Directors retained Bear, Stearns & Co. Inc. to
assist in reviewing strategic alternatives. Mr. Studdert said
this review included consideration of a variety of options,
including the sale of the Company.
"As part of this effort, the Board undertook a wide-ranging
auction process ultimately resulting in the decision that the
offer from Diamond Castle is in the best interests of the Company
and its shareholders. When completed, this deal will allow NES
Rentals to continue to meet and exceed the high standards we've
established for customer service, quality equipment and financial
growth."
Bear, Stearns & Co. Inc. and Houlihan Lokey Howard & Zukin each
provided fairness opinions on the transaction to the Board of
Directors.
Completion of the sale is expected within 60 days. It is
contingent upon customary closing conditions, including regulatory
approvals, delivery of the committed financing, and the approval
of NES Rentals' stockholders. NES Rentals scheduled a special
meeting of stockholders to vote on the proposed transaction that
will be held on June 23, 2006.
Mr. Studdert agreed to continue on in his capacity as Chief
Executive Officer and Chairman of the Board following the
completion of the transaction. Diamond Castle expects to retain
NES Rentals' company name, management team and product lines.
Bear, Stearns & Co. Inc. acted as exclusive financial advisor to
NES Rentals Holdings, Inc. Kirkland & Ellis LLP acted as legal
counsel to NES Rentals Holdings, Inc. Banc of America Securities
LLC acted as exclusive financial advisor to Diamond Castle.
Gibson, Dunn & Crutcher LLP acted as legal counsel to Diamond
Castle. In addition, Deutsche Bank Securities, Inc. is leading
the syndicate to deliver the committed financing for the
acquisition.
About Diamond Castle Holdings
Headquartered in New York City, Diamond Castle Holdings, LLC --
http://www.diamondcastleholdings.com/-- is a private equity
investment firm founded in 2004 by Larry Schloss, the former
Global Head of CSFB Private Equity and Chairman of DLJ Merchant
Banking Partners, and four former managing directors of DLJ
Merchant Banking. Diamond Castle has 22 employees located in New
York and focuses on investments in the power, financial services,
media and telecom, healthcare, and industrial sectors.
About NES Rentals Holdings
Headquartered in Chicago, Illinois, NES Rentals Holdings, Inc. --
http://www.nesrentals.com/-- is the fifth largest company in the
$29 billion equipment rental industry. The company focuses on
renting specialty and general equipment to industrial and
construction end-users. It rents more than 750 types of machinery
and equipment, and distributes new equipment for nationally
recognized original equipment manufacturers. NES Rentals also
sells used equipment as well as complementary parts, supplies and
merchandise, and provides repair and maintenance services to its
customers. In addition to the rental business NES Rentals is the
second largest supplier of traffic and safety services to the
construction industry. The company is a leading competitor in
many of the geographic markets it reaches, from its approximately
117 locations in 34 states.
* * *
As reported in the Troubled Company Reporter on Feb 24, 2006,
Standard & Poor's Ratings Services placed its ratings on equipment
rental company NES Rental Holdings Inc., including its 'B+'
corporate credit rating, on CreditWatch with developing
implications.
NEW ORLEANS: Chase Attempting to Arrange a $150 Million Loan
------------------------------------------------------------
At March 31, 2006, the City of New Orleans had 48.2 million in its
general fund, down from $166 million a year ago. In the eight-
month period following Hurricane Katrina's devastation of the Big
Easy, annual revenues have fallen sharply. The City collected $22
million in taxes in March 2006 -- about 22% of what it collected
in March 2005.
A report prepared last month by the Bureau of Governmental
Research and the public Affairs Research Council of Louisiana,
suggests that New Orleans should file for bankruptcy. That joint
report, entitled "Municipal Bankruptcy in Perspective" --
available at no charge at http://ResearchArchives.com/t/s?8d5--
shares a wealth of financial details, provides a brief overview of
federal and state law on municipal bankruptcy, describes the
advantages and disadvantages of the option, and looks at the
financial condition of selected local entities in three of the
hardest hit parishes: Cameron, Orleans, and St. Bernard.
Despite steps taken to date, the joint Report says, the City of
New Orleans and the Orleans Parish School Board are teetering on
the edge of the cliff. The School Board is dealing with chronic
cash flow problems, and the City is one month away from running
out of cash. With their tax bases in shambles, it is unclear
whether they will be able to meet the threefold challenge of
servicing existing debt, providing services, and rebuilding
damaged infrastructure.
John Kallenborn at Chase Bank in New Orleans thinks the City
should and can avoid a bankruptcy filing. In an interview with
Deon Roberts, writing for the New Orleans City Business newspaper,
Mr. Kallenborn explains that a reorganization under Chapter 9 of
the Bankruptcy Code might reduce $50 million in debt service to
$25 million, but "the problem with it is that we don't really have
a debt problem in the city of New Orleans. We've got a revenue
problem," he said.
"You wouldn't create any revenues, which is what you really need,"
Mr. Kallenborn continued.
Mr. Kallenborn related to Mr. Roberts that he has been recruiting
10 foreign and large banks with New Orleans operations to give the
city a $150-million, three-year loan to fund basic services. Mr.
Kallenborn wouldn't say how many lenders have committed. His bank
has agreed to loan $50 million.
"We're cobbling it together slowly but surely," Mr. Kallenborn
said. "I don't know what probability we have." Mr. Kallenborn
said there's a 33% chance "that we will call back to the city and
say that we were unsuccessful. That happens. You shouldn't be
shocked. It's not an easy credit. [New Orleans'] revenues went
from $475 million to $100 million. You're in a trough and it's
just hard for lenders sometimes to step up during a trough. "The
question is just how fast are revenues going to come back." The
loan would buy the city time for revenues to pick up, he said.
"If this (loan) doesn't happen, I don't know what Plan B is," Mr.
Kallenborn told Mr. Roberts.
NORSHIELD ASSET: Chapter 15 Petition Summary
--------------------------------------------
Petitioner: Eric Rodier
RSM Richter, Inc.
2, Place Alexis Nihon, Suite 2200
Montreal, Quebec H3Z3C2
Debtor: Norshield Asset Management (Canada) Ltd.
Debtor affiliates with related foreign proceedings:
Entity
------
Norshield Investment Partners Holdings Ltd.
Olympus United Fund Holdings Corporation
Olympus United Funds Corporation
Olympus United Bank and Trust SCC
Olympus United Group Inc.
Norshield Capital Management Corporation
Honeybee Software Technologies Inc.
Case No.: 06-40997
Type of Business: The Debtors offer financial services, hedge fund
management and alternative investment solutions.
Chapter 15 Petition Date: May 30, 2006
Court: District of Minnesota (Minneapolis)
Judge: Robert J. Kressel
Petitioner's Counsel: John C. Thomas
Dorsey & Whitney LLP
50 South Sixth Street, Suite 1500
Minneapolis, Minnesota 55402-1498
Tel: (612) 340-2600
Fax: (612) 340-2868
Estimated Assets: $10 Million to $50 Million
Estimated Debts: More than $100 Million
NORTHWEST AIRLINES: Wants to Advance Employee Defense Costs
-----------------------------------------------------------
Northwest Airlines Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
permission to advance the defense costs incurred by certain
directors, officers or employees who are named as defendants in
certain pending ERISA and securities class actions.
Class Action Suits
On October 14, 2005, Jennifer Karpiuk filed a complaint in the
United States District Court for the District of Minnesota on
behalf of a purported class of participants in various Northwest-
sponsored retirement plans, alleging violations of the Employment
Retirement Income Security Act of 1974. On November 3, 2005, Neil
Hastings filed a nearly identical complaint with the Minnesota
District Court.
On December 20, 2005, Bernard J. Gesenhues filed a complaint in
the United States District Court for the Southern District of New
York on behalf of a purported class of persons who purchased or
otherwise acquired Northwest securities during the relevant class
period alleging violations of the Securities and Exchange Act of
1934.
On April 7, 2006, various participants in Northwest Airlines-
sponsored retirement and pension plans filed a complaint in the
United States District Court for the Southern District of New
York on behalf of a purported class of participants in the Plans,
alleging ERISA violations. The plaintiffs are:
-- Bruce W. Cress, Peter Ochabauer, Walter Boulden, Keith
Schilling, Mark A. Knudsen, and Christopher J. Parkyn,
allegedly participants in both the Northwest Airlines
Retirement Savings Plan for Pilot Employees and the
Northwest Airlines Pension Plan for Pilot Employees; and
-- Amanda R. Ochabauer and Bernard C. Larkin, allegedly
participants in both the Northwest Airlines Retirement
Savings Plan for Contract Employees and the Northwest
Airlines Pension Plan for Contract Employees.
Class Action Defendants
The ERISA Complaints name 26 individuals and two committees as
defendants. Among the defendants are:
a. Douglas Steenland, the Debtors' chief executive officer;
b. Terri Keimig, the Debtors' director of Retirement Savings
and Stock Plans;
c. Timothy Meginnes, vice president of Compensation Benefits;
d. Michael Becker, senior vice president of Human Resources
and Labor Relations;
e. Daniel Matthews, senior vice president and treasurer;
f. Robert Brodin, the Debtors' former senior vice president of
Labor Relations and is currently a Debtors' consultant to
supervising labor negotiations with the their pilots union;
g. four current members of the Debtors' Board of Directors:
-- Mr. Gary Wilson,
-- Mr. Frederic Malek,
-- Mr. Dennis Hightower, and
-- Mr. George Kourpias;
h. Richard Blum and V.A. Ravindran, the Debtors' former
directors;
i. Richard Anderson and John Dasburg, the Debtors' former
chief executive officers; and
j. James Mathews, the Debtors' former vice president of
Finance and chief accounting officer.
The Securities Complaint is also brought against the Debtors'
current or former officers and board members:
-- Mr. Steenland,
-- Mr. Wilson,
-- Bernard Han, a former officer, and
-- Alfred Checchi, a former member of the Debtors' Board of
Directors.
Northwest previously filed a request to stay the Class Actions.
The Court denied the Debtors' request, noting that there appears
to be a large deductible in the case that would leave the
defendants uninsured for up to $5,000,000 and that the insurer's
obligation to defend does not provide for defense costs in the
interim.
Judge Gropper added that the Debtors have their remedies before
the Court. He held that the incurrence of costs that the Debtors
have obligations to advance under their charter might constitute
an immediate distraction.
Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, notes that the Class Action Defendants are entitled
under applicable state law and Northwest's bylaws to
indemnification, including the advancement of legal expenses,
including attorneys' fees, incurred to defend the Class Actions.
Northwest is the owner of two liability insurance policies:
a. an Employee Benefit Plan Fiduciary Liability Insurance
Policy with National Union Fire Insurance Co. of
Pittsburgh, PA, as issuer, which provides coverage for
loss, including defense costs, resulting from claims
against Northwest, certain of its benefit plans, plan
fiduciaries or administrators, arising from an actual or
alleged violation of fiduciary duties with respect to an
ERISA plan; and
b. an Executive and Organization Liability Insurance Policy
-- the D&O Policy -- with the National Union, which
provides coverage for loss, including defense costs,
arising from claims against an executive or employee of
Northwest, arising from any actual or alleged act or
omission by such executive or employee in his or her
official capacity.
Mr. Petrick discloses that, in the case of an indemnifiable loss,
National Union is liable to Northwest for the amount of loss in
excess of the retention amount of $5,000,000 under each of the
Fiduciary Policy and the D&O Policy.
In the event of a loss that Northwest has neither indemnified nor
is permitted or required to indemnify pursuant to law or contract
or charter, bylaws, operating agreement or similar documents of
Northwest, the Policies provide for coverage by National Union
without regard to any retention.
Accordingly, the Debtors propose to advance the defense costs of
the Class Action Defendants up to the retention amounts under the
Policies.
Mr. Petrick asserts that it is in the Debtors' best interests
that the Class Action Defendants not incur personal pecuniary
injury because of their employment with the Debtors and as a
result of the Class Actions, which create the potential for
distraction of the Debtors' key employees from the task of
reorganizing.
About Northwest Airlines
Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases. When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts. (Northwest Airlines Bankruptcy
News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,
215/945-7000).
NORTHWEST AIRLINES: Honeywell Wants $889,644 Claim Paid
-------------------------------------------------------
Honeywell International Inc., asks the U.S. Bankruptcy Court for
the Southern District of New York to:
-- allow its $889,644 administrative expense claim against
Northwest Airlines Corp. and its debtor-affiliates; and
-- direct the Debtors to promptly pay Honeywell's allowed
claim.
Pursuant to various prepetition executory contracts, Honeywell
provides service, repair and maintenance on aircraft components
installed on the Debtors' aircraft. Honeywell also supplies the
Debtors with parts related to its service, repair and maintenance
of the aircraft components.
Brian H. Meldrum, Esq., at Jenner & Block LLP, Chicago, Illinois,
relates that the Debtors have refused to pay $889,644 in invoices
that Honeywell issued for the postpetition delivery of new
aircraft components, and maintenance and service on those
equipment.
In October 2005, Northwest Airlines, Inc., commenced an adversary
proceeding against Honeywell. According to Mr. Meldrum, the
Debtors asked the Court to compel Honeywell to continue to repair
their equipment, even though they were refusing to pay all of
Honeywell's postpetition invoices. The Debtors asserted that
Honeywell's repair services were "essential to operate aircraft".
The Debtors, which have made partial payments of some of the
invoices, have not formally stated why they are refusing to pay
other, or parts of, invoices. Honeywell has gleaned, however,
that the Debtors may be contending that some of the work
performed by Honeywell was performed prepetition, even though the
full repair was not complete until postpetition and under the
applicable contractual terms and conditions payments would not
have been due until all of the work was done, Mr. Meldrum tells
the Court.
"If this is indeed [the Debtors'] purported justification for
failing to pay Honeywell, [their] position is without merit,"
asserts Mr. Meldrum. The Debtors' argument evidences a
fundamental misunderstanding about the calculation of the amount
of administrative claims, he added.
Mr. Meldrum informs the Court that the executory contracts
contain confidentiality provisions prohibiting the parties from
disclosing proprietary information. Therefore, any invoices or
contracts submitted to the Court must be submitted under seal.
Honeywell is prepared to submit the applicable contracts and
invoices under seal should the Court request them.
Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases. When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts. (Northwest Airlines Bankruptcy
News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,
215/945-7000).
NRG ENERGY: Rejects Mirant Corp.'s $8 Billion Acquisition Proposal
------------------------------------------------------------------
Mirant Corporation made a proposal to acquire NRG Energy, Inc. at
a premium of approximately 33% to NRG's share price as of Tuesday,
May 30, 2006. The proposal would be immediately accretive to the
pro forma free cash flow per share of Mirant. Mirant received a
financing commitment from JPMorgan of approximately $11.5 billion
for the transaction.
NRG flatly rejected the proposal without engaging in any
discussions with Mirant. Mirant continues to believe that the
proposal creates significant value for the owners of both
companies and has decided to make its proposal public in a letter
to NRG's board of directors.
Edward R. Muller, Mirant's Chairman and Chief Executive Officer,
stated in the letter that:
"We were disappointed that you would reject so quickly on behalf
of your shareholders, without any discussion with us, our
acquisition proposal of May 10, 2006, which provides your
shareholders a substantial premium to their share price and the
opportunity to participate in the additional value creation we
expect from the combined company. We think that it is important
for your shareholders to be informed of such a compelling
opportunity, and, therefore, we are simultaneously releasing this
letter to the public.
"In the transaction we proposed, your shareholders would receive,
at their election, $57.50 per share in cash or Mirant Corporation
common stock at an exchange ratio of 2.25 Mirant shares for each
share of NRG common stock, based upon our understanding that you
have 137.5 million fully diluted shares outstanding. Your
shareholders' elections to receive the total of approximately
$3.9 billion in cash (representing 50% of the total consideration)
or Mirant common stock would be subject to proration to preserve
the 50/50 cash/stock mix in the deal.
"This transaction would provide a blended value of approximately
$57.16 per share of NRG common stock and would represent a
substantial premium of approximately 33% to NRG's share price,
based on the closing prices of Mirant and NRG on Tuesday, May 30,
2006. In addition, your shareholders would receive a premium of
approximately 33% to your one-year average trading price and
approximately 55% to your two-year average trading price.
"We think that a combination of Mirant and NRG would create an
enterprise with significant opportunities for expense and
operational synergies and a national footprint that is without
parallel. The combination would generate a number of specific and
compelling benefits. Our best estimate of the annual cost savings
from the reduction of overlapping functions is $150 million (based
on publicly available information), in addition to significant
opportunities for cost savings from the procurement and use of
fuel and in the application of emissions credits. The combination
also would diversify the risks associated with the assets and
operations of both companies. In addition, the combination would
create the largest independent power company in the United States
with a strong presence in four key regions (Texas, Mid- Atlantic,
Northeast and California). The combined company would have over
43,000 megawatts globally, with over 37,500 megawatts in the
United States. Approximately 32% of its domestic capacity would
be low-cost, baseload generating capacity. Finally, the
combination would enhance liquidity and value for the shareholders
of both companies. We estimate that the combined company would
have adjusted EBITDA for 2007 in excess of $3 billion. The
transaction would be immediately accretive to Mirant's pro forma
free cash flow per share. In short, we think that the combined
company would deliver superior returns to our combined shareholder
base, with benefits flowing to our respective customers, employees
and other constituencies as well.
"Mirant emerged from Chapter 11 on January 3, 2006, with what
most observers characterize as the strongest balance sheet in
the industry. Since Jan. 3, 2006, a total of approximately
275 million of our shares have traded, representing approximately
92% of our total outstanding shares. Our hedging strategy has
been effective in reducing risk while improving our earnings
profile. We currently expect that cash flows from operations
through 2011 will be sufficient to fund our forecasted capital
expenditures, including those for required environmental controls.
Finally, we have a new management team with extensive experience
in the industry.
"We think that now is the right time to pursue a combination of
our companies, and we are committed to doing so on an expedited
basis. Our Board of Directors has approved our proposal, and we
are prepared to begin negotiations of the terms of our proposal
with you immediately and to enter into a definitive merger
agreement and complete the transaction as soon as possible. We
have received a financing commitment from JPMorgan of
approximately $11.5 billion which, when combined with our
available cash, will:
* fund the cash portion of the purchase consideration for your
common and, if necessary, preferred stock;
* refinance your senior credit facilities; and
* fund the purchase of your 7.250% Senior Notes and 7.375%
Senior Notes pursuant to a change of control offer at a price
equal to 101% of the aggregate principal amount, plus accrued
and unpaid interest.
"The indebtedness of our subsidiaries, including Mirant Americas
Generation, LLC and Mirant North America, LLC, would remain in
place. We expect that due diligence can be completed quickly. In
addition, given the complementary geographies of our respective
operations, we expect that all regulatory approvals will be
obtained expeditiously. With your cooperation, we think that we
can close the transaction in 2006.
"We expect your shareholders to respond enthusiastically to this
transaction: current shareholders who wish to exit will have the
opportunity to do so at an attractive premium; those shareholders
who choose to continue as investors in the combined company will
receive both an attractive premium and have the opportunity to
participate in the additional value creation we expect from the
combination. We believe ardently in the wisdom and strategic
value of this transaction and the benefits it offers to our
combined shareholders and stakeholders. This matter has the
highest priority for us."
About Mirant
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 Jan. 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.
About NRG Energy
Headquartered in Princeton, New Jersey, NRG Energy, Inc. --
http://www.nrgenergy.com/-- currently owns and operates a diverse
portfolio of power-generating facilities, primarily in the
Northeast, South Central and Western regions of the United States.
Its operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities. NRG also has ownership interests in
generating facilities in Australia and Germany.
* * *
As reported in the Troubled Company Reporter on Jan. 16, 2006,
Fitch Ratings placed a 'BB' rating to NRG's $5.2 billion secured
credit facility, consisting of a $3.2 billion secured term loan B
and $2 billion of revolving credit/synthetic letter of credit
facilities, a 'B' rating to NRG's proposed $3.6 billion issuance
of senior unsecured notes, and a 'CCC+' rating to NRG's proposed
issuance of $500 million mandatory convertible preferred stock.
In addition, Fitch has assigned NRG a 'B' issuer default rating,
as well as recovery ratings for the debt instruments. Fitch said
the Rating Outlook is Stable.
As reported in the Troubled Company Reporter on Jan. 9, 2006,
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on power generation company NRG Energy Inc.
Standard & Poor's assigned its 'BB-' rating and '1' recovery
rating to NRG's $3.2 billion first lien term loan B and
$2 billion revolving credit and LOC facilities, 'B-' rating
to NRG's $3.6 billion unsecured notes, and 'CCC+' rating to
NRG's $500 million mandatory convertible securities.
The 'BB-' rating and '1' recovery rating on the $3.2 billion
term loan B and $2 billion revolving credit and LOC facilities
indicate the expectation of full recovery of principal in the
event of a payment default. Standard & Poor's affirmed its 'CCC+'
ratings on NRG's preferred stock issues. The stable outlook
reflects Standard & Poor's view that NRG's credit quality should
not significantly deteriorate in the short term.
NRG ENERGY: Board Believes Mirant Corp.'s Proposal Undervalues NRG
------------------------------------------------------------------
NRG Energy, Inc. confirmed, on May 30, 2006, that it has received
an unsolicited proposal from Mirant Corporation regarding a
potential combination in letters dated May 10 and 30, 2006.
Consistent with its fiduciary duties and in consultation with its
financial advisor and legal counsel, NRG's Board of Directors
reviewed the Mirant proposal and deemed it not in the best
interests of NRG shareholders. NRG shareholders do not need to
take any action at this time.
Citigroup is serving as financial advisor to NRG, and Skadden,
Arps, Slate, Meagher & Flom LLP is legal counsel.
On May 23, 2006, NRG sent a response letter to Edward R. Muller,
Chairman and Chief Executive Officer of Mirant Corporation and the
Mirant Board of Directors.
The letter from Howard Cosgrove, NRG's Chairman of the Board, and
David Crane, NRG's President and Chief Executive Officer, stated
that:
"The Board of Directors of NRG Energy, Inc., with the assistance
of its financial and legal advisors, has reviewed and thoroughly
considered your May 10, 2006 letter. Based upon this review the
Board has unanimously rejected your proposal because it is not in
the best interests of NRG shareholders. The NRG Board has
specifically authorized this response.
"As discussed below, the Board has found your proposal deficient
in at least three key respects:
* it significantly undervalues NRG;
* our concerns about Mirant's value and your stock's relative
lack of liquidity and trading history makes Mirant's stock an
unacceptable currency; and,
* finally, having taken into account trends and developments in
the wholesale power generation sector, we do not believe this
is the appropriate time to engage in a sale process.
"Having spent considerable time analyzing Mirant, its assets and
prospects -- both during the three years you spent in bankruptcy
and the four months since you emerged -- we have concluded that
Mirant is a company and stock with flat earnings, little to no
growth opportunity beyond 2007, substantial and imminent
environmental capital expenditures, and significant EBITDA
exposure to developing country risk. Additionally, with only a
four-month trading history and an average daily trading volume of
2.7 million shares during those four months, we believe that
Mirant's stock lacks a sufficient track record and liquidity for
us to recommend to our shareholders that they accept over 150
million Mirant shares as you propose. These factors far outweigh
any synergistic benefits that might come from a combination of the
two companies.
"For these reasons, NRG's Board and management strongly believe
that our shareholders would be poorly served by being exposed to
Mirant's challenges through ownership of Mirant equity on the
terms set forth in your proposal.
On the question of timing, we believe our cyclical industry has
just begun to emerge out of a multi-year trough and, over the next
couple of years, we will experience continued robust commodity
prices, supply shortfalls in our core regions, spark spread
recovery and a rationalization of the utility industry in such a
way that the intrinsic value of NRG (and the value of NRG as a
potential acquisition candidate) will rise rapidly. And we are
confident that we will be able to convert the rise in intrinsic
value of NRG into increased market value. Over the past 24
months, NRG's stock has appreciated 120% as the market has
recognized the value of our asset mix, the soundness of our
strategy and our track record in its implementation, including:
* a diverse multi-regional domestic portfolio of 22,848 MW;
* a substantial EBITDA growth rate past 2007 from hedges placed
at rising prices;
* a thriving brownfield development program across all regions;
and
* a history of returning capital to shareholders through two
substantial share buybacks in the first 18 months of our
existence.
"We are confident that our stock is poised for further
appreciation as we capitalize on the positive industry trends and
as the market comes to recognize our embedded growth potential
particularly post-2007. In this regard, we note that the premium
reflected in your proposal is far less than the annual compound
average growth rate of NRG's share price appreciation.
"To clarify one point, your letter references past meetings
between you and our Chief Executive Officer, David Crane, on the
topic of combining NRG and Mirant. Our Company's strategic
interest in Mirant predates your tenure there and is well known to
anyone who has read transcripts of your bankruptcy hearings. When
Mr. Crane discussed a combination of the two companies with you
last November, it was in the context of NRG acquiring Mirant,
since at that time Mirant's stock was neither listed nor actively
traded. Once your company finally emerged from bankruptcy in
January 2006, our Board specifically reviewed the possible
acquisition of Mirant by NRG. We decided not to do so on the
grounds that at $25 per share Mirant's stock was overvalued, and
we were not willing to risk NRG's reputation for financial
discipline on an overpriced bid for Mirant. When you approached
Mr. Crane in March to propose a "no premium" acquisition of NRG by
Mirant, Mr. Crane advised you that such a transaction (at the
price for NRG's shares implied by your proposal) was not worth
pursuing further given that it would be massively dilutive to NRG
shareholders -- a point of view which neither you nor Goldman
Sachs has ever attempted to refute.
"As you know, NRG believes that industry consolidation is
inevitable, and we expect to participate -- either as a buyer or a
seller. You should also know that we would only pursue
transactions that create unquestionable value for our
stockholders. Your proposal is simply the wrong deal at the wrong
time."
About Mirant
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 Jan. 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.
About NRG Energy
Headquartered in Princeton, New Jersey, NRG Energy, Inc. --
http://www.nrgenergy.com/-- currently owns and operates a diverse
portfolio of power-generating facilities, primarily in the
Northeast, South Central and Western regions of the United States.
Its operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities. NRG also has ownership interests in
generating facilities in Australia and Germany.
* * *
As reported in the Troubled Company Reporter on Jan. 16, 2006,
Fitch Ratings placed a 'BB' rating to NRG's $5.2 billion secured
credit facility, consisting of a $3.2 billion secured term loan B
and $2 billion of revolving credit/synthetic letter of credit
facilities, a 'B' rating to NRG's proposed $3.6 billion issuance
of senior unsecured notes, and a 'CCC+' rating to NRG's proposed
issuance of $500 million mandatory convertible preferred stock.
In addition, Fitch has assigned NRG a 'B' issuer default rating,
as well as recovery ratings for the debt instruments. Fitch said
the Rating Outlook is Stable.
As reported in the Troubled Company Reporter on Jan. 9, 2006,
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on power generation company NRG Energy Inc.
Standard & Poor's assigned its 'BB-' rating and '1' recovery
rating to NRG's $3.2 billion first lien term loan B and
$2 billion revolving credit and LOC facilities, 'B-' rating
to NRG's $3.6 billion unsecured notes, and 'CCC+' rating to
NRG's $500 million mandatory convertible securities.
The 'BB-' rating and '1' recovery rating on the $3.2 billion
term loan B and $2 billion revolving credit and LOC facilities
indicate the expectation of full recovery of principal in the
event of a payment default. Standard & Poor's affirmed its 'CCC+'
ratings on NRG's preferred stock issues. The stable outlook
reflects Standard & Poor's view that NRG's credit quality should
not significantly deteriorate in the short term.
ONEIDA LTD: U.S. Trustee Appoints Three-Member Equity Committee
---------------------------------------------------------------
Diana G. Adams, the Acting United States Trustee for Region 2,
appointed three equity holders to serve on an Official Committee
of Equity Security Holders in Oneida Ltd. and its debtor-
affiliates' chapter 11 cases:
1. Xerion Partners LLC & Xerion Partners II Master Fund Limited
c/o Xerion Capital Partners LLC
Attn: Mr. Daniel J. Arbess
450 Park Avenue, 27th Floor
New York, NY 10022
Tel: (212) 940-9822
Fax: (212) 287-0740
2. LKCM Partnership
Attn: Mr. Todd Truitt
301 Commerce Street, Suite 1600
Forth Worth, TX 76102
Tel: (817) 332-3235
3. The Arbitrage Fund
Attn: Mr. John S. Orrico
650 Fifth Avenue, 6th Floor
New York, NY 10019
Tel: (212) 259-2655
Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/
-- is the world's largest manufacturer of stainless steel and
silverplated flatware for both the Consumer and Foodservice
industries, and the largest supplier of dinnerware to the
foodservice industry. Oneida is also a leading supplier of a
variety of crystal, glassware and metal serveware for the tabletop
industries. The Company and its 8 debtor-affiliates filed for
Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case
Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represents the Debtors. Credit Suisse
Securities (USA) LLC is the Debtors' financial advisor. Scott L.
Hazan, Esq., and Lorenzo Marinuzzi, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represent the Official Committee
of Unsecured Creditors. When the Debtors filed for protection
from their creditors, they listed $305,329,000 in total assets and
$332,227,000 in total debts. On May 12, 2006, Judge Gropper
approved the Debtors' disclosure statement.
ONEIDA LTD: Court Okays Otterbourg Steindler as Panel's Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Oneida
Ltd. and its debtor-affiliates' bankruptcy cases obtained
permission from the Honorable Allan L. Gropper of the U.S.
Bankruptcy Court for the Southern District of New York in
Manhattan to retain Otterbourg, Steindler, Houston & Rosen, P.C.,
as its bankruptcy counsel, nunc pro tunc to April 13, 2006.
Otterbourg Steindler will:
(a) assist and advise the Committee in its consultation with
the Debtors relative to the administration of the Debtors'
bankruptcy cases;
(b) attend meetings and negotiate with the representatives of
the Debtors;
(c) assist and advise the Committee in its examination and
analysis of the conduct of the Debtors' affairs;
(d) assist the Committe in the review, analysis and negotiation
of the filed plan and disclusure statement, as well as any
plan of reorganization or related disclosure statement that
may be filed;
(e) assist the Committee in the review, analysis, and
negotiation of any financing agreements, including the
proposed exit facility with Credit Suisse Securities (USA)
LLC and Credit Suisse;
(f) take all necessary action to protect and preserve the
interests of the Committee, including:
(1) possible prosecution of actions on its behalf;
(2) if appropriate, negotiations concerning all litigation
in which the Debtors are involved; and
(3) if appropriate, review and analysis of claims filed
against the Debtors' estates;
(g) generally prepare on behalf of the Committee all necessary
motions, applications, answers, orders, reports and papers
in support of positions taken by the Committee;
(h) appear, as appropriate, before the Bankruptcy Court, the
Appellate Courts, and the United States Trustee, and to
protect the interests of the Committee before those courts
and before the U.S. Trustee; and
(i) perform all other necessary legal services in the Debtors'
cases.
Scott L. Hazan, Esq., a member at Otterbourg, Steindler, Houston &
Rosen, P.C., discloses that the Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Partner or Counsel $490 - $725
Associate $240 - $525
Paralegal and Legal Assistant $125 - $195
Mr. Hazan assures the Court that Otterbourg, Steindler, Houston &
Rosen, P.C., is disinterested as that term is defined in Section
101(14) of the Bankruptcy Code.
Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/
-- is the world's largest manufacturer of stainless steel and
silverplated flatware for both the Consumer and Foodservice
industries, and the largest supplier of dinnerware to the
foodservice industry. Oneida is also a leading supplier of a
variety of crystal, glassware and metal serveware for the tabletop
industries. The Company and its 8 debtor-affiliates filed for
Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case
Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represents the Debtors. Credit Suisse
Securities (USA) LLC is the Debtors' financial advisor. Scott L.
Hazan, Esq., and Lorenzo Marinuzzi, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represent the Official Committee
of Unsecured Creditors. When the Debtors filed for protection
from their creditors, they listed $305,329,000 in total assets and
$332,227,000 in total debts. On May 12, 2006, Judge Gropper
approved the Debtors' disclosure statement.
OPTINREALBIG.COM: Judge Tallman Dismisses Chapter 11 Cases
----------------------------------------------------------
The Honorable Howard R. Tallman of the U.S. Bankruptcy Court for
the District of Colorado dismissed the chapter 11 cases of
OptInRealBig.com, LLC, and its owner, Scott Allen Richter.
The Debtors sought dismissal of their cases after reaching
settlements with Microsoft Corporation and American Family Mutual
Insurance Co. Microsoft and American Family each filed suits
against OptInRealBig prior to the company's bankruptcy filing.
Microsoft's suit, along with separate related suits, alleged
unsolicited e-mail violations. Consequently, American Family, as
the company's insurer, sought declaratory relief denying insurance
coverage for costs of defense and liability associated with the
various lawsuits filed against the Debtors.
In its decision, the Court concluded that the mediation of the
Debtors' litigation matters will benefit most of its creditors.
In addition, the Court ruled that Infinite Monkeys & Co., LLC may
litigate its claim against the Debtors in the state or federal
courts of California.
Infinite Monkeys filed a $49,168,000 claim against the Debtors for
recoverable preferences and subsequently opposed dismissal of the
Debtors' cases.
The Settlements
As reported in the Troubled Company Reporter on Aug. 18, 2005,
the Debtors filed for bankruptcy to stay 13 legal actions filed
against them.
To avoid the costly and time consuming litigations, the Debtors
engaged in settlement discussions with Microsoft and American
Family, their primary adversaries.
The Debtors agreed to pay Microsoft $7 million within 24 hours
after their chapter 11 cases are dismissed. The Debtors also
agreed with American Family for the release of a $2.6 million
claim.
Headquartered in Westminster, Colorado, OptinRealBig.com, LLC, is
an e-mail marketing company. The Company filed for chapter 11
protection on March 25, 2005 (Bankr. D. Colo. Case No. 05-16304).
John C. Smiley, Esq., at Lindquist & Vennum P., LLP, represents
the Debtor. No Official Committee of Unsecured Creditors had been
appointed in this case. When the Debtor filed for protection from
its creditors, it listed estimated assets of $1 million to $10
million and estimated debts of $50 million to $100 million.
ORIS AUTOMOTIVE: BBK Okayed to Provide Management Support Services
------------------------------------------------------------------
The Honorable Tamara O Mitchell of the U.S. Bankruptcy Court for
the Northern District of Alabama in Birmingham gave Oris
Automotive Parts Alabama, Ltd., authority to employ BBK, Ltd.,
nunc pro tunc to March 16, 2006, pursuant to Section 327 of the
U.S. Bankruptcy Code.
BBK will provide management and operations support services. BBK
employees who will work for the Debtor are:
1. Keith Updike will bill $220 per hour. He will act as the
interim plant manager. He will manage the Debtor's hourly
and salaried employees.
2. Walt Ledger will bill $220 per hour. He will expedite
purchases of materials. He will also provide support to
the assembly operation.
3. John Froelich will bill $185 per hour. He will support the
engineering, welding, and fabrication departments.
4. John Parhar will bill $185 per hour. He will provide
technical support. He will also oversee the Debtor's
performance relative to addressing customer issues.
The Debtor assures the Court that BBK has no interest adverse to
the Debtor or its estates.
Headquartered in McCalla, Alabama, Oris Automotive Parts Alabama,
Ltd. -- http://www.oris-gmbh.de/-- manufactures automotive parts.
The company filed for chapter 11 protection on March 16, 2006
(Bankr. N.D. Ala. Case No. 06-00813). Clark R. Hammond, Esq., at
Johnston, Barton, Proctor & Powell LLP, represents the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it estimated assets between $1 million to
$10 million and debts between $10 million to $50 million.
OWENS CORNING: Wants to Expand Ernst & Young's Scope of Employment
------------------------------------------------------------------
Owens Corning and its debtor-affiliates want to further expand the
scope of Ernst & Young LLP's employment to include:
a. additional tax advisory services with respect to the
Debtors' management of intellectual property, global equity
compensation plans and international restructuring; and
b. accounting services in support of the Debtors' preparation
for the hearing to consider confirmation of their Fifth
Amended Plan of Reorganization.
Specifically, the Debtors propose that Ernst & Young perform
these additional services:
A. Intellectual Property Planning
* Providing analysis of the tax implications associated with
various intellectual property management and ownership
alternatives, including re-evaluating the Debtors' current
structure from a state and local tax planning perspective.
* Providing analysis of the ability and potential tax
cost/benefit opportunities for the Debtors to migrate
ownership of economic rights to selected technologies
currently in development.
* Providing assistance with the formulation of a strategy for
a proposed restructuring that will involve the execution of
a cost sharing arrangement under current cost sharing
regulations.
* Providing assistance with respect to the preparation of
necessary agreements regarding implementation of the
proposed restructuring.
* Providing a post-implementation review plan for monitoring
of the ongoing management of the Debtors' intellectual
property.
B. Equity Compensation Plans
* Assisting the Debtors in their review of the tax
requirements associated with the implementation of equity
compensation plans to employees worldwide.
* Conducting a tax feasibility review with respect to
identifying key compliance issues and obstacles regarding
equity plan implementation and tax due diligence and
expatriate tax due diligence.
* Providing assistance to the Debtors with respect to
chargeback and corporate tax deduction issues.
* Conducting meetings and conference calls with the Debtors to
discuss legislative changes and developments that may impact
the proposed equity compensation plans.
* Providing assistance regarding, among other things,
necessary tax filings, the calculation of taxable gain and
various valuation and other services with respect to the tax
issues and implications of the equity compensation plans.
C. International Restructuring
* Providing assistance, tax advisory and related valuation
services with respect to analyzing, developing and
implementing an international holding company structure
designed to assist the Debtors with, among others, an
efficient post-emergence foreign cash management vehicle,
cash repatriation and international expansion.
* Designing and implementing a variety of strategies to reduce
foreign country income tax liabilities, specifically in
Canada, Brazil and Mexico.
The Debtors propose that Ernst & Young will provide the
additional confirmation accounting services, for and at the
direction of Saul Ewing LLP and Sidley Austin LLP, the Debtors'
bankruptcy counsel. Owens Corning VP and General Counsel John W.
Christy advises the Court that specific terms and conditions that
will govern the provision of the accounting services are still
subject to final documentation. Thus, the Debtors plan to submit
additional documents to supplement the Application.
As set forth in their Fifth Amended Plan, the Debtors are seeking
to re-establish the use of equity compensation plans to attract
and retain employees, provide incentives to them and to align
employee interests with those of the Debtors after emergence. To
that end, the Debtors proposed the distribution of equity awards
to their employees around the world under two equity compensation
plans.
In connection with the equity compensation plan services, Ernst &
Young will be coordinating with its allied law firm, Donahue &
Partners LLP.
Mr. Christy notes that the firm has already commenced performing
some of the additional services on April 1, 2006.
Pursuant to Section 327(a) of the Bankruptcy Code, the Debtors
seek the Court's permission to expand Ernst & Young's employment
to include the additional services, nunc pro tunc to April 1,
2006.
The firm's professionals presently expected to have primary
responsibility for providing services to the Debtors and their
current hourly rates are:
IP Planning & Equity Comp.
Billing Category Restructuring Plans
---------------- ------------- ------------
National Principal/Partner $840 - $640 $840 - $640
Principal/Partner $600 - $480 $677 - $611
Manager/Senior Manager $480 - $345 $583 - $403
Senior/Staff $320 - $160 $321 - $200
Ernst & Young updates its billing rates annually on July 1.
Owens Corning (OTC: OWENQ.OB) (BULLETIN BOARD: OWENQ.OB) --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts. Headquartered in Toledo,
Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000
(Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at
Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at
Caplin & Drysdale, Chartered, represents the Official Committee of
Asbestos Creditors. James J. McMonagle serves as the Legal
Representative for Future Claimants and is represented by Edmund
M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy
News, Issue No. 131; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
PARTS PLUS: Del. Bank. Court Closes Remaining Chapter 11 Case
-------------------------------------------------------------
The Honorable Brendan Linehan Shannon of the U.S. Bankruptcy Court
for the District of Delaware entered a final decree closing The
Parts Plus Group, Inc.'s chapter 11 case, at Parts Plus' request.
Peter C. Hughes, Esq., at Dilworth Paxson LLP, in Philadelphia,
Pennsylvania, reminded the Court that the Debtors' First Amended
Joint Liquidating Plan of Reorganization took effect on
Nov. 10, 2003. On May 28, 2004, the Court closed the bankruptcy
cases of each of the subsidiary Debtors.
Parts Plus has no ongoing operations, Mr. Hughes pointed out. The
few remaining accounts receivable have been assigned to Parts
Plus' secured lender. All of Parts Plus' other assets has been
liquidated. Under the Plan, the collected cash account, which is
the source of funds to pay unsecured creditors, is to be created
and administered by the liquidation administrator. Accordingly,
there are no further assets for the Debtor to administer.
The Parts Plus Group, Inc., was a distributor of auto parts
serving independent and chain car repair shops, new car dealers,
municipalities and other fleet owners in the Eastern United
States. The Company and its debtor-affiliates filed for chapter
11 protection on March 24, 2003 (Bankr. Del. Case No. 03-10875).
Peter C Hughes, Esq., and Derrick A. Dyer, Esq., at Dilworth
Paxson LLP represent the Debtors in their restructuring efforts.
Charles J. Brown, Esq., at Elzufon Austin Reardon Tarlov & Mondell
and William David Sullivan, Esq., at Buchanan Ingersoll PC
represent the Official Committee of Unsecured Creditors.
PATH 1: Posts $1.7 Million Net Loss in Quarter Ended March 31
-------------------------------------------------------------
Path 1 Network Technologies Inc. filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 23, 2006.
The Company reported a $1,770,000 net loss on $614,000 of revenues
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $2,333,000
in total assets and $4,456,000 in total liabilities, resulting in
a $2,136,000 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $1,201,000 in total current assets available to
pay $2,032,000 in total current liabilities coming due within the
next 12 months.
Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a0f
Going Concern Doubt
Swenson Advisors, LLP, in New York, raised substantial doubt about
Path 1 Network Technologies Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's operating losses and inability to raise
additional capital.
Path 1 Network Technologies Inc. provides a variety of software
and services used for real-time, high-quality audio and video-on-
demand distribution over Internet Protocol. Its Cx1000 broadcast
video gateway is used to transmit and receive ASI and SDI video
images over FastE and Gigabit Ethernet network interfaces. Paulson
Capital owns almost 14% of it.
PBS HOLDING: March 31 Balance Sheet Upside Down by $486,382
-----------------------------------------------------------
PBS Holding, Inc., filed its first quarter financial statements
for the three months ended March 31, 2006, with the Securities and
Exchange Commission on May 19, 2006.
The Company reported a $398,171 net loss on $1,229,840 of revenues
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $702,191 in
total assets and $1,188,573 in total liabilities, resulting in a
$486,382 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $644,048 in total current assets available to pay
$1,171,906 in total current liabilities coming due within the next
12 months.
Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?9f6
Going Concern Doubt
Madsen & Associates CPAs'. INC. in Murray, Utah, raised
substantial doubt about PBS Holding, Inc.'s ability to continue as
a going concern after auditing the Company's consolidated
financial statements for the years ended Dec. 31, 2005, and 2004.
The auditor pointed to the Company's need for additional working
capital for its planned activity and to service its debt.
PBS Holding, Inc., provides human resource outsourcing services
through its subsidiaries, PBS LLC, Primary HR and AHJR.
PLIANT: Wells Fargo Says Plan Violates Indentures & Bankr. Code
---------------------------------------------------------------
In February 2006, Well Fargo Bank, N.A., succeeded Wilmington
Trust Company in its capacity as indenture trustee and became the
Second Lien Indenture Trustee under the Second Lien Notes
Indenture.
"Despite the contentions of the Debtors, these bankruptcy cases
would not be doomed by denial or delay of confirmation of the
Plan [of Reorganization]," Howard A. Cohen, Esq., at Drinker
Biddle & Reath LLP, in Wilmington, Delaware, asserts.
"Rather denial or delay of confirmation would permit the parties
an opportunity to preserve the full value of the Debtors and
avoid a further financial restructuring or subsequent bankruptcy
proceeding through either the confirmation of a permissible plan
or a plan that restructures the Debtors' capital structure, truly
right sizes the Debtors' balance sheet, ensures solvency and
improves liquidity."
Mr. Cohen tells Judge Walrath that one of the most obvious
defects of the Plan is that it improperly classifies the Class 5
Second Lien Note Claims as unimpaired and thus does not comply
with Sections 1129(a)(1) and (8) of the Bankruptcy Code.
Although the Plan asserts that the Claims of the Second Lien
Noteholders are unimpaired, and classifies them as such, those
claims are clearly impaired as the treatment provided under the
Plan does not "leave[] unaltered the legal, equitable, and
contractual rights" to which the Second Lien Notes Indenture are
entitled, Mr. Cohen maintains.
Moreover, the Plan proposes to issue Tack-On Notes -- additional
First Lien Notes -- to Holders of Class 7 Old Note Claims
pursuant to the First Lien Notes Indenture, which makes the Tack-
On Notes secured instruments. Consequently, the Plan, if
confirmed, would effectuate a mechanism whereby a portion of the
Old Note Claim would be transformed from unsecured debt into
secured debt. Mr. Cohen points out that not only would it be
secured debt, but it would be senior to that of the Second Lien
Noteholders -- to whom the Old Noteholders are contractually
subordinated.
The Debtors also seek to provide Old Noteholders with a
"Bondholder Additional Consideration," which is an amount in cash
equal to 1% of the principal amount of Old Notes held by a holder
of an Old Note Claim. The Debtors define the Bondholder
Additional Consideration as "not a payment in respect of such
principal amount of Old Notes but instead shall be a payment on
account of the acceptance of the Plan by Class 7," Mr. Cohen
notes.
There is no basis under the Bankruptcy Code to provide a
constituency with any sort of payment or distribution other than
on account of a claim, Mr. Cohen contends.
Thus, Wells Fargo asserts that the Plan should not be confirmed
because:
(a) it seeks to impermissibly alter the contractual rights
between non-debtor third parties, in violation of Section
510 of the Bankruptcy Code;
(b) it violates the Second Lien Note Indenture and Old Notes
Indenture by the issuance of the Tack-on Notes; or the
alternative, New Subordinated Notes, Bondholder Additional
Consideration and payment of the Consenting Noteholders'
Professional Fees, in violation of Sections 510 and
1129(a)(1) and contrary to the X-Clause Provision
contained in the Second Lien Notes Indenture; and
(c) the payment of the Bondholder Additional Consideration
violates Sections 1123(a)(3) and (6), 1129(a)(1) and
1129(b)(2)(B).
Wells Fargo asks the Court to:
(a) deny confirmation of the Plan; or
(b) in the alternative, withhold the confirmation of the Plan
until the issues it raised have been addressed
satisfactorily or the Plan is amended consistent with its
Objection and the Bankruptcy Code.
Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets. The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq.,
at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the
Debtors in their restructuring efforts. The Debtors tapped
McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy
counsel. The Ontario Superior Court of Justice named RSM
Richter, Inc., as the Debtors' information officer in their
restructuring proceeding under Companies Creditors Arrangement Act
in Canada. Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C.,
serves as counsel to the Official Committee of Unsecured
Creditors. Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is
local counsel to the Creditors' Committee. As of Sept. 30, 2005,
the company had $604,275,000 in total assets and $1,197,438,000 in
total debts. (Pliant Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
REFCO INC: Must Produce Documents for Noteholders' Committee
------------------------------------------------------------
The Hon. Robert Drain of the United States Bankruptcy Court for
the Southern District of New York directed Refco Inc., and its
debtor-affiliates to produce documents responsive to discovery
requests to be served by the Ad Hoc Committee of holders of the
9.0% Senior Subordinated Notes due 2012 issued by Refco Finance
Inc. and Refco Group Ltd., LLC.
Absent further Court order, Stroock & Stroock & Lavan LLP, and
Mesirow Financial Consulting, the Noteholders Committee's
professionals, may review those documents produced in response to
document requests. Stroock and Mesirow will not disclose
documents to the extent not otherwise available to the
Noteholders Committee, the general public or any other entity.
However, documents may be provided to any party already subject
to an applicable confidentiality agreement.
To the extent that a follow-up information from the Debtors is
required, the Noteholders Committee and the Debtors will first
discuss a consensual resolution of that request in a timely
manner.
Disputes relating to Discovery Requests and Follow-up Information
may be considered by the Court on an expedited basis.
Rule 2004 Request
The Noteholders want to obtain discovery of the Debtors, pursuant
to Section 1109(b) of the Bankruptcy Code and Rule 2004 of the
Federal Rules of Bankruptcy Procedure in order to start analyzing
intercompany claims, so as to determine the rights of the various
creditors and parties-in-interest in the Debtors' cases.
The Noteholders believe it is imperative that all creditors be
able to get an understanding of the intercompany claims as soon
as possible. They are concerned that this effort has been put on
the back burner while the litigation between the Refco Capital
Markets, Ltd. account holders and the Debtors -- to enable the
Account Parties to determine their individual rights against the
Debtors and other creditors and parties-in-interest -- has
monopolized the Debtors' time and resources.
The Noteholders want to receive basic information likely within
the Debtors' immediate control that will permit them to begin an
intercompany claims analysis, including the Debtors' balance
sheets, general ledgers and trial balances, as well as responsive
documents that the Debtors have already produced to other
parties-in-interest, like the Creditors' Committee, AlixPartners
and FTI Consulting.
After the Intercompany Information is digested and analyzed, the
Noteholders would like to obtain more detailed information and
would expect to obtain access to various of the Debtors'
employees and professionals who could provide an explanation of
relevant transactions. The Noteholders would anticipate
conducting this second stage analysis in coordination with the
Debtors, the Creditors' Committee, and their professionals on an
agreed upon timetable.
The Noteholders' request seeks limited discovery and is an
attempt to begin to level the informational playing field that
has been tilted in favor of parties other than the Noteholders
since the inception of these cases, Michael J. Sage, Esq., at
Stroock & Stroock & Lavan LLP, in New York, tell the Court.
The Noteholders collectively hold approximately:
(i) $210 million of the $390 million outstanding issuance of
the 9% Senior Subordinated Notes; and
(ii) $278 million of the $648 million due and owing pursuant to
a Credit Agreement dated August 5, 2004.
In the aggregate, the Noteholders hold over 53% of the Notes and
over 42% of the Bank Debt.
About Refco Inc.
Based in New York, New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base. Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago, New
York, London and Singapore. In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products. Refco is one of
the largest global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue
No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000)
REFCO INC: Chapter 7 Trustee Can Liquidate Customer Claims
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
modified the automatic stay in Refco, LLC's chapter 7 proceedings
in order for Albert Togut, Esq., the interim Chapter 7 trustee
appointed to oversee the liquidation of Refco LLC's estate, to
liquidate customer claims that are asserted in a "specialized
tribunal" in which the Customer Litigation is currently pending.
As reported in the Troubled Company Reporter on Apr. 21, 2006, as
of Nov. 25, 2005, Refco, LLC, was a defendant in certain lawsuits
pending in federal or state courts, in preparation proceedings
pending before the Commodity Futures Trading Commission, and in
arbitration proceedings pending before the National Futures
Association.
Vincent E. Lazar, Esq., at Jenner & Block LLP, in Chicago,
Illinois, relates that substantially all of the Customer
Litigation involves claims asserted by customers of Refco LLC
arising out of trading in accounts maintained at Refco LLC.
Certain of the Customer Litigation Claims are subject to
mandatory arbitration under the applicable agreements and law.
In accordance with Section 362 of the Bankruptcy Code,
prosecution of the Customer Litigation is currently stayed as to
Refco LLC. However, certain of the Customer Litigation, in
particular preparations proceedings pending before the CFTC where
an employee or introducing broker has been named as a co-
defendant with Refco LLC, is continuing against the non-debtor
defendants.
Prior to filing for chapter 7 liquidation, Refco LLC was
represented in a significant percentage of the Customer Litigation
by in-house counsel, who on occasion, also jointly represented
employees or introducing brokers who had been named as co-
defendants in the litigation.
Mr. Lazar asserts that the employees and introducing brokers
named in continuing Customer Litigation generally have continued
to be represented by counsel, but Refco LLC has not been
represented or participated in any ongoing litigation.
Refco LLC was also represented in litigation against customers by
several sets of outside counsel. Mr. Lazar says that two of
those two law firms have been engaged by Mr. Togut, to represent
him in Customer Litigation and other specialized commodities
disputes with customers or brokers.
A list of Refco LLC's Customer Litigation Claims is available for
free at http://ResearchArchives.com/t/s?81c
Mr. Togut will be represented in the Customer Litigation by a
special counsel with experience in litigation and who previously
represented Refco LLC in similar matters. Therefore, Mr. Togut
believes that he is in the best position to effectively contest
the Customer Litigation Claims.
With respect to Customer Litigation where an employee or
introducing broker has been named as a co-defendant with Refco
LLC, Mr. Lazar contends that the estate's interests could be
prejudiced if Mr. Togut is not represented in the ongoing
litigation.
Mr. Togut notes that certain of the Customer Litigation Claims
are subject to mandatory arbitration, and likely could not be
litigated before the Court in any event.
Considering the bar date that has been established for filing
proofs of claim against the Debtor's estate, Mr. Togut intends to
expeditiously review all claims and promptly file objections to
any invalid or contested claims.
Mr. Togut asserts that commencing immediately the process of
liquidating Customer Litigation Claims will facilitate the prompt
administration and distribution of the Debtor's estate.
Mr. Togut notes that there may be additional Customer Litigation
Claims of which he is unaware. In the event he determines that
it is in the estate's interests for the automatic stay to be
lifted, Mr. Togut seeks the Court's authority to file a
supplemental document to identify any Additional Customer
Litigation Claims.
About Refco Inc.
Based in New York, New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base. Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago, New
York, London and Singapore. In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products. Refco is one of
the largest global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue
No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ROO GROUP: Posts $2.6 Mil. Net Loss in 2006 First Fiscal Quarter
----------------------------------------------------------------
ROO Group, Inc., filed its first quarter financial statements for
the three months ended March 31, 2006, with the Securities and
Exchange Commission on May 19, 2006.
The Company reported a $2,647,000 net loss on $1,780,000 of
revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $8,875,000
in total assets, $2,940,000 in total liabilities, $123,000 in
minority interest, and $5,812,000 in stockholders' equity.
Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?9e6
Going Concern Doubt
As reported in the Troubled Company Reporter on May 29, 2006,
Moore Stephens, P.C., in New York, raised substantial doubt about
ROO Group, Inc.'s ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
year ended Dec. 31, 2005. The auditor pointed to the Company's
recurring losses and negative cash flows from operations.
ROO Group, Inc. -- http://www.roo.com/-- is a global provider of
digital media solutions and technology that enables the
activation, marketing and distribution of digital media video
content over the Internet and emerging broadcasting platforms such
as set top boxes and wireless. ROO offers turnkey video solutions
for businesses seeking to improve their web presence with video
broadcasts or broadcast their own latest video clips. ROO helps
business advertise their latest offering with interactive
advertising solutions, 15-30 second video commercials with a
linked call to action and played simultaneously with topical video
content in a television style format over the Internet.
SAINT VINCENTS: Queens Hospital Sale Hearing Set for June 26
------------------------------------------------------------
As reported in the Troubled Company Reporter on May 16, 2006,
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates are seeking to sell Mary Immaculate Hospital and
St. John's Queen's Hospital located in Queens, New York, and
certain related assets.
The Debtors have entered into an Asset Purchase Agreement with
Caritas Health Care Planning, Inc., an affiliate of Wyckoff
Heights Medical Center for the sale of the Queens Hospitals and
related assets, subject to higher or better offers received
through a bidding process and auction.
The U.S. Bankruptcy Court for the Southern District of New York
will convene a hearing on June 26, 2006, at 2:00 p.m., to
consider:
(a) approval of the Sale of the Queens Assets to Caritas
Health Care Planning, Inc., or other Successful Bidders;
(b) the proposed assumption and assignment of the Assumed
Contracts and Leases and related cure claims in connection
with the Sale; and
(c) any issues or objections that are timely interposed by any
parties.
Responses
A) Patsy Merola & GAIC
Patsy Merola and Great American Insurance Company, as contingent
subrogee of Mr. Merola, complain that the Sale Motion failed to:
(a) recognize the lien of the $2,652,538 judgment awarded in
Mr. Merola's favor on October 9, 2003;
(b) furnish Mr. Merola or GAIC "adequate protection" for the
Sale free and clear of Mr. Merola's judgment lien; and
(c) preserve their rights and positions.
Accordingly, Mr. Merola and GAIC ask the Court to deny the
Debtors' Proposed Sale unless they are furnished with adequate
protection.
B) DASNY
The Dormitory Authority of the State of New York tells the Court
that it has not provided its consent to the transfer of (i) the
Debtors' interests in a parcel of land where which St. Dominic's
Family Health Center Clinic was to be constructed and (ii) the
lease agreements related to that property land.
DASNY says it may approve and consent to the transfer of the
Leased Property and the assumption and assignment of the St.
Dominic's Lease Agreements if, among other things:
(1) the Debtors and the Successful Bidder or Caritas Health
Care secure the necessary regulatory approvals and assure
DASNY that the St. Dominic's Family Health Center Clinic
will remain a "health facility"; and
(2) DASNY will have received and accepted an opinion of
counsel that the Sale and the assumption of the Assumed
Liabilities will not adversely affect the exclusion from
gross income of the interest on the Series 1996A Bonds for
federal income tax purposes.
DASNY reserves its right to object to the Proposed Sale on any
grounds and any proposed assumption or rejection of the St.
Dominic's Lease Agreements.
Accordingly, DASNY asks the Court to deny the Debtors' request as
it relates to the Leased Property and the St. Dominic's Lease
Agreements absent its consent and approval.
C) Primary Care
Primary Care Development Corporation seeks to:
* confirm that its Operating Lease will be assumed by the
Debtors and assigned to Caritas Health Care Planning, Inc.;
* clarify that the Debtors' interest in the St. Dominic
Facility will be transferred and assigned to Caritas Health
Care;
* confirm that any transfer and assignment will be subject to
all of the Primary Care Liens;
* confirm that the Primary Care Liens will not be primed in
any manner; and
* confirm that the Debtors and Caritas Health Care have taken
all necessary steps to ensure that the tax exempt status of
the St. Dominic Bonds is preserved and that all required
approvals have been or will be obtained prior to closing.
Accordingly, Primary Care asks the Court to condition the sale of
the St. Dominic Facility and the assumption and assignment of the
Operating Lease on the Debtors' agreement to incorporate each of
the Clarifications into the final sale order.
D) NYSNA
The New York State Nurses Association supports the Debtors'
Propose Sale.
However, Avrum J. Rosen, Esq., counsel for the NYSNA, notes that
the Proposed Sale has provisions for the deletion of certain
executory contracts at the election of the purchaser after the
approval of the transaction.
Mr. Rosen states that under applicable law, the assets of the
Queens Hospitals and related facilities cannot be sold free and
clear of any collective bargaining agreement without compliance
with the dictates of Section 1113 of the Bankruptcy Code.
Mr. Rosen notes that the present Purchase Agreement complies with
the applicable law. Any attempt to modify or terminate a CBA
under the proposed sale must comply with Section 1113, Mr. Rosen
asserts.
Accordingly, the NYSNA asks the Court to approve the Sale in
compliance with applicable law.
E) Creditors Committee
The Official Committee of Unsecured Creditors also supports the
Debtors' Proposed Sale.
The Committee reserves its rights to object to particular
provisions of the Purchase Agreement or terms of the Proposed
Sale at the sale hearing.
The Committee also reserves its rights to assert its position as
to the highest and best bid submitted and to assert the
appropriate factors for the Court to use in ultimately
determining the highest and best bid.
About Saint Vincents
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors. As of Apr. 30, 2005,
the Debtors listed $972 million in total assets and $1 billion in
total debts. (Saint Vincent Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SAINT VINCENTS: Sets Up Staten Island Sale Bidding Guidelines
-------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York to establish uniform bidding procedures for
the sale of St. Vincent's Hospital, Staten Island.
The Debtors intend to value highly, bids that propose to continue
the acute care and other programs at St. Vincent's Hospital,
Staten Island. Accordingly, the Debtors and Bayonne Medical
Center Bayonne have agreed to Bidding Procedures, which will
govern the submission of bids for all or a portion of the
Hospital.
George A. Davis, Esq., at Weil, Gotshal & Manges LLP, in New
York, explains that to participate in the bidding process, a
bidder must first deliver to the Debtors an executed
confidentiality agreement, a written non-binding expression of
interest, and thereafter a Qualified Bid.
To be a Qualified Bid, a bid must:
(a) be on the same terms and conditions as those in the
Debtors' Purchase Agreement with Castleton Acquisition
Corporation, an affiliate of Bayonne Medical Center
Bayonne, and must include an agreement substantially
similar to the Purchase Agreement;
(b) include a purchase price that is greater than $28,500,000
if for all or substantially all of the Hospital's Assets;
and
(c) be accompanied by a deposit equal to at least $1,000,000.
All bids must be received by 5:00 p.m. New York Time on June 30,
2006.
Where the assets covered by a competing bid include the Hospital,
the Debtors will also consider the competing bid's impact on:
* the continuation of the Hospital as an acute care facility,
if possible;
* the continuation of graduate medical education at the
Hospital;
* the Debtors' commitment to the operation of the Hospital in
accordance with Catholic ethical and religious directives
for the operation of a healthcare facility; and
* the Debtors' ability to minimize their losses related to the
Hospital prior to the Closing Date.
The Debtors propose to hold an auction at 11:00 a.m. New York
Time on July 10, 2006.
The Auction will be held if one or more Qualified Bids of
sufficient value is received before the Bid Deadline.
The Debtors also propose to publish a Notice of Auction and Sale
Hearing once in The Wall Street Journal (National Edition).
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors. As of Apr. 30, 2005,
the Debtors listed $972 million in total assets and $1 billion in
total debts. (Saint Vincent Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SAINT VINCENTS: Wants to Pay $375,000 Break-up Fee to Castleton
---------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York to allow the payment of a $375,000 break-up
fee and up to $375,000 expense reimbursement to Castleton
Acquisition Corporation, an affiliate of Bayonne Medical Center
Bayonne, in the event the Debtors sell St. Vincent's Hospital,
Staten Island to another bidder.
The Debtors contend that the Break-Up Fee and Expense
Reimbursement are reasonable in relation to the size of the
proposed sale. Under the Debtors' Purchase Agreement with
Castleton, the Break-Up Fee constitutes 1.4% of the total
consideration to be provided to the Debtors and the Expense
Reimbursement constitutes, at most, 1.4% of total consideration.
The Debtors do not believe that the Break-Up Fee and Expense
Reimbursement will have a "chilling effect" on other prospective
bidders' interest in the Staten Island Assets.
The Break-Up Fee and Expense Reimbursement constitute actual and
necessary costs and expenses of preserving the Debtors' estates
within the meaning of Section 503(b) of the Bankruptcy Code.
Thus, the Debtors assert, the Break-Up Fee and Expense
Reimbursement should be treated as allowed administrative expense
claims under Sections 503(b) and 507(a)(1) of the Bankruptcy
Code.
Moreover, if the Debtors exercise their right to terminate the
Purchase Agreement based on Castleton's inability to procure
approval of its Certificate of Need, and subsequently agree to
sell the Hospital on terms substantially more favorable than
those contained in their Purchase Agreement with Castleton within
six months after termination, the Debtors will pay to Castleton a
$125,000 fee upon the consummation of the alternative sale.
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors. As of Apr. 30, 2005,
the Debtors listed $972 million in total assets and $1 billion in
total debts. (Saint Vincent Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SENSOR SYSTEM: Weinberg & Company Raises Going Concern Doubt
------------------------------------------------------------
Weinberg & Company, P.A., in Boca Raton, Florida, raised
substantial doubt about Sensor System Solutions, Inc.'s ability to
continue as a going concern after auditing the Company's
consolidated financial statements for the year ended Dec. 31,
2005. The auditor pointed to the Company's losses, negative cash
flow from operations, and working capital and stockholders'
deficiencies.
The Company reported a $2,729,273 net loss on $1,324,872 of net
sales for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $1,089,951 in
total assets and $2,785,841 in total liabilities, resulting in a
$1,695,890 stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $751,977 in total current assets available to pay $2,756,747
in total current liabilities coming due within the next 12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?a15
Sensor System Solutions, Inc., through Advanced Custom Sensors,
Inc., designs and manufactures sensors and signal conditioning
modules. The Company offers a variety of digital pressure gauges,
pressure transducers, pressure sensors, force beams, load cells,
intelligent sensor interface electronics, intelligent embedded
control systems, and wireless communication network interfaces.
The Company also supplies thin-film and micro-machined force and
pressure sensors to the medical, chemical, oil, and gas
industries.
SERACARE LIFE: Can Use Cash Collateral on Interim Basis
-------------------------------------------------------
The Honorable Louise DeCarl Adler of the U.S. Bankruptcy Court for
the Southern District of California allowed SeraCare Life
Sciences, Inc., on an interim basis, to use cash collateral
securing repayment of its secured prepetition loan to Union Bank
of California and Brown Brothers Harriman & Co.
The Debtor can use the cash collateral from May 27, 2006, through
June 16, 2006, to pay the Debtor's operating expenses. The
Debtors will also pay senior secured lenders $5 million as
principal payment from the cash collateral. Principal payments to
the senior secured lenders will be paid, in cash, on these dates:
6/1/06 -- $5 million (to be paid during the interim period)
7/1/06 -- $2 million
8/1/06 -- $1 million
9/1/06 -- the remaining principal and interest on the Term Loan
(approximately $1 million)
The Debtor sought authority to use the cash collateral until
Sept. 15, 2006. The Court will consider approval of that request
on a final basis on June 15, 2006, at 2:30 p.m. Any objections
must be filed and served by the close of business on June 5, 2006.
The secured lenders will retain their existing liens against the
cash collateral, and its proceeds. In addition, the secured
lenders are granted a fully perfected replacement lien on assets
of the estate that is coextensive with, and limited by, the scope
and priority of their existing lien rights.
Based in Oceanside, California, SeraCare Life Sciences, Inc. --
http://www.seracare.com/-- develops and manufactures biological
based materials and services for diagnostic tests, commercial
bioproduction of therapeutic drugs, and medical research. The
Company filed for chapter 11 protection on March 22, 2006
(Bankr. S.D. Calif. Case No. 06-00510). The Official Committee of
Unsecured Creditors selected Henry C. Kevane, Esq., and Maxim B.
Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub
LLP, as its counsel. When the Debtor filed for protection from
its creditors, it listed $119.2 million in assets and
$33.5 million in debts.
SIERRA HEALTH: Earns $32.7 Million in 2006 First Fiscal Quarter
---------------------------------------------------------------
Sierra Health Services Inc. earned $32.7 million of net income on
$438.2 million of net revenues for the first quarter ended March
31, 2006, compared to $29.4 million of net income on $335.9
million of net revenues for the year ended Dec. 31, 2005.
As of March 31, 2006, the Company's balance sheet showed total
assets of $767.4 million and total debts of $527.5 million.
A full-text copy of Sierra Health's Quarterly Report is available
for free at http://researcharchives.com/t/s?a21
Headquartered in Las Vegas, Nevada, Sierra Health Services Inc. --
http://www.sierrahealth.com/-- is a diversified health care
services company that operates health maintenance organizations,
indemnity insurers, military health programs, preferred provider
organizations and multispecialty medical groups. Sierra's
subsidiaries serve more than 1.2 million people through health
benefit plans for employers, government programs and individuals.
* * *
Moody's Investors Service rates Sierra Health Services Inc.'s
preferred stock at Ba1.
SILICON GRAPHICS: Can Continue Workers' Compensation Program
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
grants Silicon Graphics, Inc., and its debtor-affiliates' request
to continue their Insurance Programs uninterrupted and to honor
their undisputed prepetition obligations relating to the Insurance
Programs, on an interim basis, except as otherwise provided.
The Court also permits their Banks to receive, honor, process, and
pay all checks drawn, or electronic fund transfers requested or to
be requested fund transfers on the Debtors' general disbursement
accounts to the extent that the checks or electronic fund
transfers relate to any of their obligations arising from the
Insurance Programs.
Judge Gropper permits, but does not require, the Debtors to pay,
in their sole discretion, all obligations arising under the
Insurance Programs, including those Insurance Obligations that:
(i) were due and payable or related to the period before the
Petition Date for up to $509,000; and
(ii) are or become due and payable or related to the period
after the Petition Date.
On a final basis, the Court authorizes:
(a) the Debtors' employees who hold claims under the Workers'
Compensation Programs, at the Debtors' direction, to
proceed with their workers' compensation claims in the
appropriate judicial or administrative forum; and
(b) the Debtors to pay the outstanding premium under the
Debtors' cargo and transit insurance policy maintained
with Lloyds of London for $4,300.
As of April 28, 2006, Silicon Graphics, Inc., had 1,858 employees,
consisting of 1,237 employees in the United States and 621
employees abroad.
According to Gary T. Holtzer, Esq., at Weil, Gotshal & Manges
LLP, in New York, the Debtors maintain a workers' compensation
program and various liability, product, property, directors' and
officers' liability, and other insurance programs through several
different insurance carriers.
A list of the Debtors' Insurance Programs is available for free at
http://ResearchArchives.com/t/s?a28
Mr. Holtzer relates that, as part of their cash management system,
the Debtors draw on funds in their accounts at certain banks and
financial institutions to satisfy their obligations arising from
the Insurance Programs.
The Debtors estimate that their outstanding prepetition Insurance
Obligations aggregate to no more than approximately $509,000.
A. Workers' Compensation Program
The Debtors currently maintain their Workers' Compensation
Program with the National Union Fire Insurance Company of
Pittsburgh, Pennsylvania -- covering claims asserted solely by
their U.S.-based employees. The Debtors pay to National Union
an annual premium that is calculated based on the Debtors'
projected payroll and historic loss rates.
The Workers' Compensation Premium is approximately $434,104
for the period July 1, 2005 to June 30, 2006. The Debtors
paid approximately $301,627 in respect of Workers'
Compensation Deductibles for the period July 1, 2004, to
June 30, 2005.
As of the Petition Date, the Debtors do not believe they have
any outstanding liability on account of 11 open workers'
compensation claims.
Notwithstanding, the Debtors provided to National Union
a $829,000 cash deposit, against which National Union has
debited any Workers' Compensation Deductibles, as well as any
claim amounts in excess of the Workers' Compensation Cap.
As of the Petition Date, approximately $540,000 remains as
cash deposit in favor of National Union to cover the Debtors'
obligations for workers' compensation claims.
B. Liability, Product and Property Insurance Programs
The Debtors also maintain various liability-, product- and
property-related insurance programs, which provide the Debtors
with insurance coverage for liabilities relating to, among
other things:
* personal injuries;
* crime, including employee theft;
* officers' and directors' liability;
* transportation and storage of cargo; and
* umbrella and various other product- and property-related
general liabilities.
Annual Insurance Premiums for the Liability, Product and
Property Insurance Programs aggregate approximately
$4,230,920, which the Debtors finance through AFCO, a Mellon
Financial Company.
As of the Petition Date, the Debtors believe that all
Insurance Premiums have been fully paid.
The Debtors estimate that no more than $330,000 is currently
owed for Insurance Deductibles relating to prepetition claims.
C. Insurance Brokers
The Debtors employ Marsh, Inc., and Willis Insurance Service
as insurance brokers to assist them with the procurement and
negotiation of their Insurance Programs.
As of the Petition Date, the Debtors believe that they owe
approximately $179,000 to Marsh in Broker Fees, and that no
amounts remain unpaid to Willis for prepetition services.
According to Mr. Holtzer, the nonpayment of any premiums,
deductibles, or related fees under one of the Insurance Programs
could result in one or more of the Insurance Carriers declining to
renew their insurance policies or refusing to enter into new
insurance agreements with the Debtors in the future. "If the
Insurance Programs are allowed to lapse without renewal, the
Debtors could be exposed to substantial liability for damages
resulting to persons and property of the Debtors and others, which
exposure could have an extremely negative impact on the Debtors'
ability to successfully reorganize." Furthermore, Mr. Holtzer
continues, the Debtors would then be required to obtain
replacement policies on an expedited basis at a significant cost
to the estates.
Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance
computing. SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data. The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602. (Silicon Graphics Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SILICON GRAPHICS: Wants to Hire Ordinary Course Professionals
-------------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
authority to continue employing and paying ordinary course
professionals, without having to file separate employment
applications and affidavits.
The Debtors retain the services of various attorneys, accountants,
and other professionals in the ordinary course of their business
operations, unrelated to their Chapter 11 cases, including general
corporate, accounting, auditing, tax, and litigation matters.
A list of the Debtors' ordinary course professionals is available
for free at http://researcharchives.com/t/s?a0a
According to Gary Holtzer, Esq., at Weil, Gotshal & Manges LLP, in
New York, the Debtors will continue to require the services of the
OCPs to enable them to continue normal business activities that
are essential to their stabilization and reorganization efforts.
The Debtors' request will save the estates the substantial
expenses associated with applying separately for the employment of
each OCP. Furthermore, it will avoid the incurrence of additional
fees relating to the preparation and prosecution of interim fee
applications.
The Debtors propose to pay each OCP 100% of the fees and
disbursements incurred, on their approval of an appropriate
invoice. The payment is capped at the lesser of $35,000 per month
per OCP or $350,000 per month for all OCPs.
If any amount owed for an OCP's fees and disbursements exceeds
$45,000 per month on a rolling basis, then the payments for those
excess amounts will be subject to the Court's approval.
Each OCP is required to serve on the Debtors' bankruptcy counsel:
a) an affidavit certifying that the OCP does not represent or
hold any interest adverse to the Debtors or their estates
with respect to the matter on which the OCP is to be
employed; and
b) a completed retention questionnaire.
The Debtors' attorneys will then file the OCP Affidavit and the
Retention Questionnaire with the Court and serve copies on the
U.S. Trustee.
No OCP will be paid for invoiced fees and expense reimbursement
until its OCP Affidavit and its Retention Questionnaire have been
filed with the Court.
Mr. Holtzer relates that although the Debtors have diligently
attempted to identify all of their current OCPs, some OCPs may
have been omitted inadvertently and some may cease providing
services to the Debtors during the course of their chapter 11
cases. Moreover, the nature of the Debtors' businesses may
require the retention of additional OCPs from time to time.
Although certain of the OCPs may hold unsecured claims against the
Debtors for prepetition services rendered, the Debtors do not
believe that any of the OCPs have an interest adverse to the
Debtors, their creditors, or other parties-in-interest on the
matters for which they would be employed, Mr. Holtzer maintains.
Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance
computing. SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data. The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602. (Silicon Graphics Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SILICON GRAPHICS: Seeks Court Nod for Compensation Procedures
-------------------------------------------------------------
Pursuant to Sections 105(a) and 331 of the Bankruptcy Code,
Silicon Graphics, Inc., and its debtor-affiliates ask Judge Allan
L. Gropper of the U.S. Bankruptcy Court for the Southern District
of New York to establish uniform procedures for the payment and
reimbursement of various court-approved professionals on a monthly
basis, on terms comparable to procedures established in other
large Chapter 11 cases.
The Debtors propose that:
(a) Each Professional seeking payment will serve a monthly
statement, on or before the 30th day of each month after
the month payment is sought, on:
* Silicon Graphics, Inc.,
* Weil, Gotshal & Manges LLP,
* the attorneys for the Official Committee of Unsecured
Creditors; and
* the Office of the United States Trustee.
(b) The monthly statement does not need to be filed with the
Court and a copy does not have to be delivered to the
presiding bankruptcy judge's chambers.
(c) For Professionals who bill based on time, each monthly fee
statement must contain a list of the individuals who
provided services during the statement period, their
billing rates, the aggregate hours spent, a reasonably
detailed breakdown of the disbursements incurred and
contemporaneously maintained time entries.
(d) The Notice Parties will have 15 days to review a
statement. If a Party objects to the payment or
reimbursement, it must, by no later than 35 days after the
end of the month for which compensation is sought, serve a
written notice of objection containing the nature of the
objection, upon:
* the Professional whose statement is objected to; and
* the Notice Parties.
(e) At the expiration of the 35-day period, and in the absence
of objection, the Debtors will promptly pay 80% of the
undisputed fees and 100% of the undisputed expenses in
each monthly statement.
(f) If the Debtors receive an objection to a fee statement,
they will withhold payment on that objected portion of the
fee statement and promptly pay the remainder of the fees
and disbursements.
(g) If the parties to an objection are able to resolve their
dispute, then the Debtors will promptly pay that portion
of the fee statement, which is no longer subject to an
objection.
(h) All unresolved objections will be preserved and presented
to the Court at the next interim or final fee application
hearing.
(i) An objection will not prejudice the objecting party's
right to object to any fee application made to the Court
in accordance with the Bankruptcy Code on any ground.
(j) Every 120 days, but no more than every 150 days, each of
the Professionals will serve and file an application for
interim or final Court approval and allowance of the
compensation and reimbursement of expenses requested.
(k) At least 30 days prior to the fee application hearing,
the Debtors' attorneys will notify the Court, the U.S.
Trustee and all retained professionals, of the time, date
and location of the fee hearing, the period covered by the
fee applications, and the objection deadline.
(l) Any Professional who fails to file an application seeking
approval of compensation and expenses previously paid
when due:
* will be ineligible to receive further monthly payments
of fees until further Court order; and
* may be required to disgorge any fees paid since the
retention or the last fee application, whichever is
later.
(m) The pendency of an application or a Court order that
payment of compensation or reimbursement of expenses was
improper as to a particular statement will not disqualify
a Professional from the future payment of compensation or
reimbursement of expenses.
(n) Neither the payment of, nor the failure to pay, monthly
compensation and reimbursement will have any effect on the
Court's interim or final allowance of compensation and
reimbursement of any Professional.
(o) The attorneys for the Creditors Committee may collect and
submit statements of expenses, with supporting evidence of
payment, from members of the Committee the person
represents. However, the Committee attorneys must ensure
that the reimbursement requests comply with the Court's
Administrative Orders dated June 24, 1991, and April 21,
1995.
According to the Debtors, the proposed procedures will enable them
to closely monitor the costs of administration, maintain a level
cash flow availability, and implement efficient cash management
procedures. Moreover, the procedures will allow the Court and key
parties-in-interest to ensure the reasonableness and necessity of
the compensation and reimbursement sought.
Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance
computing. SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data. The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602. (Silicon Graphics Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000)
TRANSAX INTERNATIONAL: Auditor Raises Going Concern Doubt
---------------------------------------------------------
Moore Stephens, P.C., in New York, raised substantial doubt about
Transax International Limited's ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's losses, and working capital and stockholders'
deficiencies.
The Company reported a $637,919 net loss on $3,380,150 of revenues
for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $1,669,742 in
total assets and $3,185,120 in total liabilities, resulting in a
$1,515,378 stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $494,244 in total current assets available to pay $2,563,200
in total current liabilities coming due within the next 12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free http://ResearchArchives.com/t/s?a11
Based in Miami, Florida, Transax International Limited (OTCBB:
TNSX) -- http://www.transax.com/-- provides hospitals, physicians
and health insurance companies with innovative health information
management systems to manage coding, compliance, abstracting and
record management's processes. The Company's subsidiaries are:
TDS Telecommunication Data Systems LTDA provides those services in
Brazil; Transax Australia Pty Ltd. provides those services in
Australia; and Medlink Technologies, Inc., initiates research and
development.
USA COMMERCIAL: U.S. Trustee Names 7-Member Contract Rights Panel
-----------------------------------------------------------------
The U.S. Trustee for Region 17 appointed seven members to serve on
an the Official Committee of Holders of Executory Contract Rights
in USA Commercial Mortgage Company and its debtor-affiliates'
chapter 11 cases:
1. William J. Bullard
Fertitta Enterprises, Inc.
P.O. Box 27555
Las Vegas, Nevada 89126-1555
Tel: (702) 221-4715
Fax: (702) 362-5889
2. Helms Homes, LLC
Terry Helms
809 Upland Boulevard
Las Vegas, Nevada 89107
Tel: (702) 258-1044
Fax: (702) 258-0403
3. Terry R. Helms Living Trust 11/94
Terry Helms
809 Upland Boulevard
Las Vegas, Nevada 89107
Tel: (702) 258-1044
Fax: (702) 258-0403
4. Homfeld II, LLC
Edward W. Homfeld
858 Bishop Road
Grosse Pointe Park, Michigan 48230
Tel: (954) 560-7709
Fax: (734) 827-7743
5. Arthur Polacheck
2056 Woodlake Circle
Deerfield Beach, Florida 33442
Tel: (954) 650-8768
Fax: (561) 417-6620
6. Dennis Flier, Inc. Defined Benefit Trust Dated 6/29/87
Dennis Flier
20155 Porto Vita Way, # 1803
Aventura, Florida 33180
Tel: (305) 792-9601
Fax: (305) 792-9602
7. Jim McCollum
1011 F Avenue
Coronado, California 92118
Tel: (619) 890-5125
The Official Committee of Holders Of Executory Contract Rights
through USA Commercial Mortgage Company, along with the Official
Committee of Equity Security Holders in USA Capital Diversified
Trust Deed Fund, LLC, and the Official Committee of Equity
Security Holders of USA Capital First Trust Deed Fund, LLC, has
retained Stutman, Treister & Glatt, P.C., as their special
bankruptcy counsel for all matters of common interest.
Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba
USA Capital -- http://www.usacapitalcorp.com/-- provides
more than $1 billion in short-term and permanent financing to
homebuilders, commercial developers, apartment owners and
institutions nationwide. The Company and its debtor-affiliates
filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev.
Case Nos. 06-10725 to 06-10729). Lenard E. Schwartzer, Esq., at
Schwartzer & Mcpherson Law Firm, represents the Debtors. When the
Debtors filed for protection from their creditors, they estimated
assets of more than $100 million and debts between $10 million and
$50 million.
USG CORP: Settles CCR, et al., Performance Bond Dispute for $13MM
-----------------------------------------------------------------
USG Corporation, its debtor-affiliates, Center for Claims
Resolution, Inc., and Safeco Insurance Company of America agreed
to resolve their disputes, following extensive arm's-length
negotiations.
As previously reported, USG Corporation and United States Gypsum
Company filed an adversary complaint in the Bankruptcy Court on
November 30, 2001, captioned "USG Corporation and United States
Gypsum Company v. Center for Claims Resolution, Inc., and Safeco
Insurance Company of America," Case No. 01-08932.
The Debtors sought to enjoin the CCR from drawing on a
$60,277,000 performance bond and enjoin Safeco from paying on the
Bond during the pendency of the Debtors' Chapter 11 cases.
To date, no final judgment has been entered in the CCR
Litigation.
CCR Member Claims Litigation
Paul Heath, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, recounts that the CCR has filed Claim No.
6505 against U.S. Gypsum in an amount in excess of $104,000,000.
Certain CCR members have also filed these proofs of claim against
U.S. Gypsum, each asserting $100,000,000:
Claimant Claim No.
-------- ---------
Certain Teed Corporation 6399
Dana Corporation 6647
I.U. North America 6412
Maremont Corporation 6529
Nosroe Corp. 6415
Union Carbide Corporation and
Amchem Products, Inc. 6634
National Service Industries, Inc. -
The CCR and the CCR Members generally sought damages from U.S.
Gypsum for, among other things, settlement payments that were
made, or that may have to be made to asbestos personal injury
plaintiffs on U.S Gypsum's behalf.
The Debtors subsequently sought to disallow the CCR Claim and
most of the CCR Member Claims on the basis that most of the
claims related to settlements not consummated as of the Petition
Date, or were contingent claims for contribution or reimbursement
should be disallowed pursuant to Section 502(e)(1)(B) of the
Bankruptcy Code.
The CCR and the CCR Members responded to the Debtors' omnibus
claims objection in July 2005, and asserted that the claims were
for contract damages and should be classified as Class 6 General
Unsecured Claims under the Debtors' joint plan of reorganization,
which provides that any claims of the CCR and the CCR Members are
channeled to the Asbestos Personal Injury Trust.
The Debtors' Claims Objection is currently pending in the
Bankruptcy Court.
$13,000,000 CCR Settlement Agreement
The salient terms of the parties' Settlement Agreement are:
(1) In full and complete satisfaction of the CCR Claim, the
CCR Member Claims and certain other claims as provided
in the Settlement Agreement, within 10 business days
after the Plan's effective date, the Debtors will:
(a) pay $13,000,000 to the CCR; and
(b) deposit $3,500,000 into an interest bearing
escrow account -- Holdback Amount.
However, the CCR Parties remain free to assert against
the Asbestos Personal Injury Trust any asbestos personal
injury claims that they have acquired or may acquire in
the future by assignment. The date on which the Debtors
complete the $13,000,000 payment and deposit the Holdback
Amount will be deemed the "Settlement Payment Date."
(2) The Debtors will file with the Bankruptcy Court not later
than June 23, 2006, either:
* a motion or objection seeking a court order that all
claims filed by any current or former CCR member
companies against the Debtors will be treated
exclusively as Asbestos PI Claims under the Asbestos
Personal Injury Trust or will be disallowed; or
* a stipulation providing for a claim treatment or
disallowance.
No later than 10 business days after the entry of a final
order with respect to the Channeling Objections, the
Debtors will pay to the CCR the Holdback Amount less the
amount of any distributions on account of any allowed
Other CCR Members Claims that are not channeled to the
Asbestos Personal Injury Trust.
(3) On the Settlement Payment Date, the Bond will be deemed
cancelled, and Safeco will have no further obligations
under the Bond. At that time, the CCR will take all
actions as may be reasonably requested by Safeco to
evidence the Bond cancellation, including, without
limitation, a return of the original Bond to Safeco
within 15 days of the Settlement Payment Date.
(4) On the Settlement Payment Date or as soon as practicable:
(i) the parties to the CCR Litigation will dismiss
with prejudice any and all claims asserted; and
(ii) the CCR Claims Litigation will be dismissed with
prejudice as to the CCR Parties, provided that the
CCR Parties remain free to assert against the
Asbestos Personal Injury Trust any Asbestos PI
Claims and that the Asbestos Personal Injury Trust
remains free to object to any claim and assert any
defense of the Debtors.
(5) The CCR Parties will fully support the Plan and will not
file or cause any other party to file objections to or
otherwise oppose the Plan, including the Asbestos
Personal Injury Trust Distribution Procedures, in any
manner.
(6) On the Settlement Payment Date, the parties will exchange
mutual releases of the Settled Claims and any and all
claims related, directly or indirectly, to the CCR, their
membership in the CCR, the Producer Agreement, and the
Member Agreement of any Asbestos PI Claim against the
Debtors and their estates.
Deal Paves Way to Consensual Plan Confirmation
Mr. Heath asserts that absent the Settlement Agreement, the
outcome of the CCR Litigation and the CCR Claims Litigation is
uncertain.
"Although the Debtors believe that they have a strong case with
respect to the claims and defenses they have asserted against the
CCR Parties, there is no guarantee that the results of the
Litigation will prove favorable to the Debtors upon the
completion of a trial and any appeals," Mr. Heath tells Judge
Fitzgerald. "The issues raised in the Litigation are complex and
fact-intensive, and it is impossible to predict with certainty
how a court ultimately would rule."
As a result, Mr. Heath avers, there is no assurance that the
ultimate outcome of continuing the Litigation will be any more
favorable that the proposed treatment under the Settlement
Agreement.
Accordingly, the Debtors ask Judge Fitzgerald to approve the CCR
Settlement Agreement.
Mr. Heath contends that satisfaction of the CCR Claim and the CCR
Member Claims pursuant to the Settlement Agreement saves the
Debtors from the time, expense and distraction of certain
appeals. If the Settlement Agreement is not approved, the
Debtors will be required to continue the Litigation and dispute
the merits of any confirmation objections raised by the CCR
Parties.
Mr. Heath maintains that approval of the Settlement Agreement
will resolve all claims against the Debtors and will eliminate
any potential objections to the Plan from the CCR Parties, thus,
removing a significant obstacle to a consensual Plan
confirmation.
About USG Corp.
Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.
The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.
Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders. Dean M. Trafelet
is the Future Claimants Representative. Michael J. Crames, Esq.,
and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative. Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.
(USG Bankruptcy News, Issue No. 111; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
USG CORP: Illinois Revenue Dept. Demands $2.49MM in Tax Payments
----------------------------------------------------------------
Kevin Harlowe, on behalf of the Department of Revenue of the
State of Illinois, asks the U.S. Bankruptcy Court for the District
of Delaware to compel Debtor U.S.G. Interiors to pay taxes and any
interest or penalty due under the Illinois Revised Statutes.
U.S.G. Interiors owes Illinois Revenue $2,491,873 in taxes as of
April 20, 2006, consisting of various tax obligations with
respect to these tax periods:
Accrued Accrued Balance
Tax Period Tax Due Interest Penalty Due
---------- ------- -------- ------- -------
Jun 2002 $568,497 $252,016 - $820,513
Nov 2003 800,581 112,798 - 913,379
Sept 2004 480,327 32,935 $96,066 609,328
Oct 2004 50,246 2,536 10,049 62,831
Nov 2004 63,174 2,985 12,635 78,794
Feb 2006 6,876 16 136 7,028
Mr. Harlowe asserts that the tax obligations are administrative
claims against U.S.G. Interiors' estate.
About USG Corp.
Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.
The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.
Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders. Dean M. Trafelet
is the Future Claimants Representative. Michael J. Crames, Esq.,
and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative. Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.
(USG Bankruptcy News, Issue No. 110; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VARIG S.A.: Mitsui Says U.S. Court Protection is Inappropriate
--------------------------------------------------------------
Mitsui & Co. Ltd., as representative lessor with respect to two
Boeing 737-300, asks the U.S. Bankruptcy Court for the Southern
District of New York to:
a. allow the preliminary injunction to expire;
b. deny the request for a permanent injunction; and
c. direct VARIG, S.A., and its debtor-affiliates to return the
Aircraft to Mitsui, together with the engines and records.
Mitsui's Complaint
VARIG has again defaulted on its obligations to Mitsui, William
J. Rochelle, Esq., at Fulbright & Jaworski L.L.P., in New York,
relates. Mitsui served the airline with notices of default,
which VARIG has chosen to ignore. VARIG has not returned the
Aircraft and Mitsui believes both are in service generating
revenue for the airline.
At an April 27, 2006 hearing to consider an extension of the
preliminary injunction, UBS Investment Bank, VARIG's financial
advisor, told the U.S. Bankruptcy Court that VARIG had a proposal
in hand from MatlinPatterson -- Plan A -- and another alternative
plan -- Plan B. The financial advisor explained that Plan A was
vastly preferable and could be implemented more quickly than Plan
B.
However, Mr. Rochelle says, no later than April 28, 2006, VARIG
abandoned Plan A and instead adopted Plan B, which has itself
been modified since.
Plan A's immediate repudiation, Mitsui asserts, implies that the
financial advisor was either grossly unaware of unfolding events
or had intentionally misled the Court in the testimony.
Plan B entails spinning off VARIG's operations into a new
company, not liable for its "old" debts, and assumes that a buyer
will pay not less than $870,000,000, for the airline's assets.
Mr. Rochelle also notes that Plan B contemplates that the
Brazilian government's Banco Nacional de Desenvolvimento
Economico e Social will finance two-thirds of a bridge loan for
$250,000,000 to provide liquidity until Plan B can be
consummated. BNDES will finance the bridge loan to a credit-
worthy borrower who intends to buy VARIG's assets.
Mitsui is skeptical that events will unfold as VARIG planned.
Lessors deserve more than promises, Mitsui asserts.
"The time has come for the Bankruptcy Court to restore a modicum
of sanity to the VARIG reorganization by compelling [it] either
to pay the arrears immediately or surrender the aircraft
immediately," Mr. Rochelle says.
VARIG, Mr. Rochelle points out, is once again four months in
arrears to Mitsui and offers no guarantee that the defaulted rent
will be paid on a specific date.
Mitsui is no longer willing for VARIG to continue using and
withholding the Aircraft while paying Mitsui nothing in return,
Mr. Rochelle continues. Although VARIG promised that the
financial problems had been cured and that no new defaults would
occur, the airline is again unilaterally turning lessors into
involuntary lenders funding round two in the airline's
reorganization.
"This Court should allow the existing preliminary injunction to
expire because giving the appearance of U.S. Court protection is
inappropriate when the Brazilian reorganization has failed and
neither the Brazilian government nor a private party is willing
to step forward with the cash to compensate the lessors for the
use of their aircraft," Mr. Rochelle maintains.
Conversion Hearing Set on May 31
As previously reported, the Court extended the Preliminary
Injunction through and including June 1, 2006.
The Court will convene a hearing on May 31, 2006, at 10:00 a.m.,
to consider the Permanent Injunction request.
On or before the May 31 hearing, the Court may, upon request of a
lessor, determine whether to order the implementation of the
Contingency Plan for the Orderly Return of Aircraft with respect
to and to the extent of:
a. any aircraft, engines or other equipment -- including parts
-- that is property of a lessor that is or is proposed to
be sold, assigned or otherwise transferred by a Foreign
Debtor to a third party without the lessor's consent; or
b. any aircraft or engine that is retained by a Foreign Debtor
that is the property of a lessor where the Foreign Debtor
is in default, under the lease for that aircraft or engine,
for nonpayment of rent or maintenance reserves first coming
due after June 17, 2005, and not cured on or before
January 13, 2006, regardless of whether the cure was timely
under the terms of the lessor's lease or other agreement.
In view of developments in the Foreign Proceedings, Eduardo
Zerwes, the Foreign Representative of VARIG, has advised the
Court that he will file a supplement to the Permanent Injunction
request on or before May 25, 2006.
About VARIG
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia. VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage. The Debtors may be the first case under the new law,
which took effect on June 9, 2005. Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative. In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos.
05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VERILINK CORP: Court Okays William Gibbons as Local Bankr. Counsel
------------------------------------------------------------------
The Honorable Jack Caddell of the U.S. Bankruptcy Court for the
Northern District of Alabama in Decatur gave Verilink Corporation
and its debtor-affiliate Larscom, Inc., authority to employ
William J. Gibbons, Jr., Esq., of Gibbons & Furman, P.C., as their
local bankruptcy counsel.
Mr. Gibbons will:
-- appear before the Bankruptcy Court;
-- negotiate and formulate a chapter 11 plan; and
-- perform other necessary legal services.
The Debtors assured the Court that Mr. Gibbons will not duplicate
the services of Powell Goldstein LLP.
Mr. Gibbons will charge $250 per hour for this engagement.
Mr. Gibbons assures the Court that he does not hold or represent
an interest adverse to the Debtor or its estate and is
disinterested as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Gibbons can be contacted at:
William J. Gibbons, Esq.
Gibbons & Furman, P.C.
117 Jefferson Street, North
Huntsville, AL 35801
Headquartered in Hunstville, Alabama, Verilink Corporation --
http://www.verilink.com/-- is a leading provider of next-
generation broadband access solutions for today's and tomorrow's
networks. The Company develops, manufactures and markets a broad
suite of products that enable carriers and enterprises to build
converged access networks to cost-effectively deliver next-
generation communications services to their end customers. The
Company and its debtor-affiliate, Larscom Inc., filed for chapter
11 protection on April 9, 2006 (Bankr. N.D. Ala. Case No. 06-80566
& 06-80567). Robert McCay Dearing Mercer, Esq., at Powell
Goldstein LLP, represents the Debtors. Darryl S. Laddin, Esq., at
Arnall Golden Gregory LLP and Jayna Partain Lamar, Esq., at
Maynard, Cooper & Gale, P.C., give legal advice to the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they listed total assets of
$37,221,000 and total debts of $23,913,000.
VERILINK CORP: Bankruptcy Administrator Appoints 7-Member Panel
---------------------------------------------------------------
The Honorable Jack Caddell approved the recommendation of
Richard M. Blythe, the U.S. Bankruptcy Administrator for the
Northern District of Alabama in Decatur, appointing seven
creditors to serve on an Official Committee of Unsecured
Creditors in Verilink Corporation and its debtor-affiliate
Larscom, Inc.'s chapter 11 cases:
(1) The Kennedy Company, LLC
Representative: Brent R. Cohen, Esq.
Rothgerber Johnson & Lyons LLP
1200 17th Street, Suite 3000
Denver, CO 80202-5855
Tel: (303) 628-9521
Fax: (303) 623-9222
(2) Flash Electronics, Inc.
Representative: Jas Mundra
4050 Starboard Drive
Fremont, CA 94538
Tel: (510) 360-9068
Fax: (510) 440-2844
(3) Jack P. Reily
Reily Communications Consulting
800 West 5th St. #608
Austin, TX 78703
Tel: (512) 322-9742
Fax: (512) 320-9927
(4) CM Solutions, Inc.
Representative: Jack O'Rear
P.O. Box 10
1005 Jefferson Drive
Scottsboro, AL 35768
Tel: (256) 259-6500
Fax: (256) 259-1091
(5) HRH
Representative: David W. Hobbs
P.O. Box 10607
2101 6th Avenue North, Suite 1200
Birmingham, AL 35202-0607
Tel: (205) 871-3300
Fax: (205) 879-5508
(6) Micro Ram Electronics, Inc.
Representative: Patrick Kraujalis
222 Dunbar Court
Oldsmar, FL 34677
Tel: (813) 854-5500
Fax: (813) 818-9673
(7) Professional Teleconcepts, Inc.
dba JT Communications, Inc.
Representative: Theodore Wells
20 Aviador Street
Camarillo, CA 93010
Tel: (805) 528-8577
Fax: (805) 987-8840
Pursuant to Section 1102 of the Bankruptcy Code, the USBA is
authorized to recommend to the Court a committee of creditors
holding unsecured claims.
Darryl S. Laddin, Esq., at Arnall Golden Gregory LLP and Jayna
Partain Lamar, Esq., at Maynard, Cooper & Gale, P.C., gives legal
advice to the Official Committee of Unsecured Creditors.
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 Hunstville, Alabama, Verilink Corporation --
http://www.verilink.com/-- is a leading provider of next-
generation broadband access solutions for today's and tomorrow's
networks. The Company develops, manufactures and markets a broad
suite of products that enable carriers and enterprises to build
converged access networks to cost-effectively deliver next-
generation communications services to their end customers. The
Company and its debtor-affiliate, Larscom Inc., filed for chapter
11 protection on April 9, 2006 (Bankr. N.D. Ala. Case No. 06-80566
& 06-80567). Robert McCay Dearing Mercer, Esq., at Powell
Goldstein LLP, represents the Debtors. Darryl S. Laddin, Esq., at
Arnall Golden Gregory LLP and Jayna Partain Lamar, Esq., at
Maynard, Cooper & Gale, P.C., give legal advice to the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they listed total assets of
$37,221,000 and total debts of $23,913,000.
WORLDCOM INC: Inks Stipulation Expunging Bernard Ebbers' Claims
---------------------------------------------------------------
Consistent with the Ebbers Settlement Agreement, WorldCom, Inc.,
and Bernard J. Ebbers stipulate that Claim Nos. 20659 and 36383
will be disallowed and expunged in their entirety.
On January 22, 2003, former WorldCom Chief Executive Officer
Bernard J. Ebbers filed Claim No. 20659, asserting administrative
expense claims and general unsecured claims for:
-- amounts allegedly due or that become due under a certain
Separation Agreement between Mr. Ebbers and the Debtors;
-- the Debtors indemnification and related expense
reimbursement obligations under the Restated Bylaws of
MCI, Inc.; and
-- the Debtors' obligations under a guaranty and letter
agreements executed in connection with it.
In October 2003, Mr. Ebbers filed Claim No. 36383, asserting a
$12,166,752 unsecured non-priority claim on account of stock
options that the Debtors rejected.
Since April 2002, various actions were filed in, or transferred
to, the United States District Court for the Southern District of
New York, by and on behalf of persons who purchased or otherwise
publicly traded securities of WorldCom. Mr. Ebbers is named
defendant in the Securities Litigation.
The United States Attorney for the Southern District of New York
facilitated a three-way settlement discussion among the Debtors,
the Class and Mr. Ebbers.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News,
Issue No. 117; Bankruptcy Creditors' Service, Inc., 215/945-7000)
WORLDCOM INC: Settles Philadelphia's Admin. Tax Claims for $432K
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved WorldCom, Inc., and its debtor-affiliates' stipulation
with the City of Philadelphia's administrative tax claims.
As reported in the Troubled Company Reporter on April 24, 2006,
the Debtors and the City agree that:
(a) the Debtors will pay $432,634, to the City in full and
complete satisfaction of all of the City's unsecured,
priority and administrative tax claims against the
Debtors. The Amount is to be paid as an administrative
expense priority tax claim under Section 503(b) of the
Bankruptcy Code for taxes and interest only;
(b) the Debtors will pay the Settlement Amount, without delay,
by check made payable to The City of Philadelphia and sent
to:
Carolyn Hochstadter Dicker,
Klehr, Harrison, Harvey,
Branzburg & Ellers LLP,
260 S. Broad Street,
Philadelphia, PA 19102-5003
(c) the non-filer liability listed in Claim No. 38595 for tax
periods ending on or before December 31,1998, has been
resolved through settlement of the Original Claims;
(d) the Stipulation resolves all outstanding claims and tax
liabilities between the Parties;
(e) the Released Parties agree that any and all tax claims
they may have against the City are also resolved by the
Stipulation for any tax period ending on or before
December 31, 2004; and
(f) the City agrees that the overpayment shown on the 2004
Business Privilege Tax Return filed by MCI WorldCom
Communications, Inc., for $334,673, is available to be
used as a credit against the Debtors' 2005 Business
Privilege Tax liability, assuming that the return is duly
filed, as required.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News,
Issue No. 117; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ZOOMERS HOLDING: Inks $3.5 Mil. Financing Deal with D'Alessandro
----------------------------------------------------------------
Zoomers Holding Company, LLC, asks the U.S. Bankruptcy Court for
the Middle District of Florida for authority to obtain debtor-in-
possession financing from D'Alessandro Equity Funding, Inc.
D'Alessandro agreed to lend the Debtor up to $3,500,000. The
Debtor will pay the loan by executing a promissory note on a
24-month term and accruing interest on unpaid note balance at the
annual rate of 12.49%. The Note would be secured by a first lien
against all of the Debtor's real property.
The loan will be guaranteed by the Debtor's manager, Ronald
Heromin, and will prime existing first lien holder, Florida
Community Bank.
The Debtor tells the Court that it failed to obtain better
financing terms from other sources.
The Debtor will use the loan, among others, to:
-- payoff all construction liens on its property and its
outstanding construction indebtedness;
-- provide additional funds to complete the construction of
its family amusement park in Southwest Florida;
-- provide working capital for approximately six months to
be able to commence operations at the Park and develop an
operational record;
-- pay officers' compensation; and
-- pay for the administrative costs of its chapter 11 case.
Headquartered in Osprey, Florida, Zoomers Holding Company, LLC,
filed for chapter 11 protection on Apr. 28, 2006 (Bankr. M.D. Fla.
Case No. 06-02008). Richard Johnston, Jr., Esq., at Kiesel Hughes
& Johnston, represents the Debtor. No Official Committee of
Unsecured Creditors has been appointed in this. When the Debtor
filed for protection from its creditors, it estimated assets and
debts between $10 million and $50 million.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
June 1, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Commercial Lenders Breakfast
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
June 1-2, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Southeast Regional Conference
Amelia Island, Florida
Contact: 410-347-7391 or http://www.turnaround.org/
June 5, 2006
TURNAROUND MANAGEMENT ASSOCIATION
TMA NY Golf & Tennis Outing -
MEMBERS & SPONSORSHIP REGISTRATION
Fresh Meadow Country Club, Lake Success, New York
Contact: 646-932-5532 or http://www.turnaround.org/
June 7-10, 2006
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
22nd Annual Bankruptcy & Restructuring Conference
Grand Hyatt, Seattle, Washington
Contact: http://www.airacira.org/
June 8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Speaker Series #2
Ernst & Young Tower, Calgary, Alberta
Contact: 403-294-4954 or http://www.turnaround.org/
June 8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Hedge Fund / Private Equity Round Table
CityPlace Center, Dallas, Texas
Contact: http://www.turnaround.org/
June 8-9, 2006
MEALEYS PUBLICATION
Asbestos Bankruptcy Conference
Ritz-Carlton Hotel, Chicago, Illinois
Contact: http://www.mealeys.com/
June 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
How Are the Old Clients Doing?
Duquesne Club, Pittsburgh, Pennsylvania
Contact: http://www.turnaround.org/
June 14, 2006
BEARD AUDIO CONFERENCES
Homestead Exemptions under BAPCPA
Audio Conference
Contact: 240-629-3300;
http://www.beardaudioconferences.com
June 14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Annual Charity Golf Outing
Harborside Golf Course, Chicago, Illinois
Contact: 815-469-2935 or http://www.turnaround.org/
June 14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Golf Outing / Spouse Social
Portland, Oregon
Contact: 503-223-6222 or http://www.turnaround.org/
June 14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Signature Luncheon, Charity Event
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
June 14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Marriot Tyson's Corner, Vienna, Virginia
Contact: 703-912-3309 or http://www.turnaround.org/
June 14, 2006 (tentative)
TURNAROUND MANAGEMENT ASSOCIATION
LI TMA Texas Hold'em for Charity
Long Island, New York
Contact: 631-251-6296 or http://www.turnaround.org/
June 15, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Afghanistan - The Ultimate Turnaround Challenge
Oak Hill Country Club, Rochester, New York
Contact: http://www.turnaround.org/
June 15-18, 2006
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
June 20, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
TBA, Morristown, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
June 21-23, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Global Educational Symposium
Hyatt Regency, Chicago, Illinois
Contact: http://www.turnaround.org/
June 22-23, 2006
BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES
Ninth Annual Conference on Corporate Reorganizations
Successful Strategies for Restructuring Troubled
Companies
The Millennium Knickerbocker Hotel, Chicago,
Illinois
Contact: 903-595-3800; 1-800-726-2524;
http://www.renaissanceamerican.com/
June 27, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Citrus Club, Orlando, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
June 27, 2006
TURNAROUND MANAGEMENT ASSOCIATION
What to Do When Internal Crime Strikes Your Company
New Jersey
Contact: http://www.turnaround.org/
June 29, 2006
TURNAROUND MANAGEMENT ASSOCIATION
5th Annual Lenders Panel - Arizona Chapter
National Bank of Arizona Conference Center, Phoenix, AZ
Contact: http://www.turnaround.org/
June 29 - July 2, 2006
NORTON INSTITUTES ON BANKRUPTCY LAW
Bankruptcy Law Institute
Jackson Lake Lodge, Jackson Hole, Wyoming
Contact: 770-535-7722 or
http://www2.nortoninstitutes.org/
July 11, 2006
TURNAROUND MANAGEMENT ASSOCIATION
The New Bankruptcy Code Nine Months Later
Rivers Club, Pittsburgh, Pennsylvania
Contact: http://www.turnaround.org/
July 12, 2006
BEARD AUDIO CONFERENCES
Clash of the Titans -- Bankruptcy vs. IP Rights
Audio Conference
Contact: 240-629-3300;
http://www.beardaudioconferences.com
July 12, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Function
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
July 12, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Center Club, Baltimore, Maryland
Contact: 703-912-3309 or http://www.turnaround.org/
July 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Women's Event
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
July 13-16, 2006
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Newport Marriott, Newport, Rhode Island
Contact: 1-703-739-0800; http://www.abiworld.org/
July 18, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
Marriott, Red Bank, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
July 18-19, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Distressed & Turnaround Investing Congress
Swiss"tel The Drake, New York, New York
Contact: http://www.turnaround.org/
July 19, 2006
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
South Florida
Contact: 561-882-1331 or http://www.turnaround.org/
July 25, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Centre Club, Tampa, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
July 26-29, 2006
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz Carlton Amelia Island, Amelia Island, Florida
Contact: 1-703-739-0800; http://www.abiworld.org/
July 31, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Annual Golf & Tennis Outing
Raritan Valley Country Club, Bridgewater, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
July 31, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Summer Social BBQ
Colonial Springs Country Club, Long Island, New York
Contact: 631-251-6296 or http://www.turnaround.org/
August 3, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Commercial Lenders Breakfast
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
August 3-5, 2006
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
August 9, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Professional Development Meeting
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
August 15, 2006
TURNAROUND MANAGEMENT ASSOCIATION
DIP Panel Discussion
Kansas City, Missouri
Contact: http://www.turnaround.org/
August 16, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Family Night Baseball with the NJ Jackals
(Yogi Berra Autograph Night)
Jackals Stadium, Montclair, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
August 25, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Annual Fishing Trip
Point Pleasant, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
August 29, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Citrus Club, Orlando, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
September 6, 2006
TURNAROUND MANAGEMENT ASSOCIATION
4th Annual Alberta Golf Tournament
Kananaskis Country Golf Course, Kananaskis, Alberta
Contact: 403-294-4954 or http://www.turnaround.org/
September 7, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Business Mixer
TBA, Seattle, Washington
Contact: 503-223-6222 or http://www.turnaround.org/
September 7-8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Saratoga Regional Conference
Gideon Putnam Hotel, Saratoga Springs, New York
Contact: http://www.turnaround.org/
September 7-9, 2006
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Wynn Las Vegas, Las Vegas, Nevada
Contact: 1-703-739-0800; http://www.abiworld.org/
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Marriott Tyson's Corner, Vienna, Virginia
Contact: 703-912-3309 or http://www.turnaround.org/
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
TBA, Secaucus, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
LI Turnaround Formal Event
Long Island, New York
Contact: http://www.turnaround.org/
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Function
Sydney, Australia
Contact: 0438 653 179 or www.turnaround.org
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Formal Event - Major Speaker to be Announced
Long Island, New York
Contact: 631-251-6296 or http://www.turnaround.org/
September 17-24, 2006
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
Optional Alaska Cruise
Seattle, Washington
Contact: 800-929-3598 or http://www.nabt.com/
September 20, 2006
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
Bankers Club, Miami, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
September 24, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Restructuring the Troubled High Tech Company
Arizona
Contact: http://www.turnaround.org/
September 26, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Centre Club, Tampa, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
September 27, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Joint Education Program with NYIC Joint Reception
CFA/RMA/IWIRC
Woodbridge Hilton, Iselin, NJ
Contact: http://www.turnaround.org/
September 27, 2006
TURNAROUND MANAGEMENT ASSOCIATION
7th Annual Cross Border Business Restructuring and
Turnaround Conference
Banff, Alberta
Contact: http://www.turnaround.org/
October 5, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Commercial Lenders Breakfast
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
October 10, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Center Club, Baltimore, Maryland
Contact: 703-912-3309 or http://www.turnaround.org/
October 11, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Professional Development Meeting
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
October 11-14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
2006 Annual Conference
Milleridge Cottage, Long Island, New York
Contact: 312-578-6900; http://www.turnaround.org/
October 17, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Updates on the New Bankruptcy Law
Kansas City, Missouri
Contact: http://www.turnaround.org/
October 19, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Billards Networking Night - Young Professionals
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
October 26, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Speaker Series #3
TBA, Calgary, Alberta
Contact: 403-294-4954 or http://www.turnaround.org/
October 26, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Speaker Series #3
TBA, Calgary, Alberta
Contact: 403-294-4954 or http://www.turnaround.org/
October 31, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Citrus Club, Orlando, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
October 31 - November 1, 2006
INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION
IWIRC Annual Conference
San Francisco, California
Contact: http://www.iwirc.com/
November 1, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Halloween Isn't Over! - Ghosts of turnarounds past who
remind you about what you should have done differently
Portland, Oregon
Contact: http://www.turnaround.org/
November 1-4, 2006
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
San Francisco, California
Contact: http://www.ncbj.org/
November 7, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
Marriott, Bridgewater, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
November 8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Marriott Tyson's Corner, Vienna, Virginia
Contact: 703-912-3309 or http://www.turnaround.org/
November 8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
TMA Australia National Conference
Sydney, Australia
Contact: http://www.turnaround.org/
November 14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon Program
St. Louis, Missouri
Contact: 815-469-2935 or http://www.turnaround.org/
November 15, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Joint Reception with NYIC/NYTMA
TBA, New York
Contact: 908-575-7333 or http://www.turnaround.org/
November 15, 2006
LI TMA Formal Event
TMA Australia National Conference
Long Island, New York
Contact: http://www.turnaround.org/
November 15, 2006
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
Citrus Club, Orlando, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
November 16, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Bankruptcy Judges Panel
Duquesne Club, Pittsburgh, Pennsylvania
Contact: http://www.turnaround.org/
November 16, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Dinner Program
TBA, Seattle, Washington
Contact: 503-223-6222 or http://www.turnaround.org/
November 23, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Martini Party
Vancouver, British Columbia
Contact: 403-294-4954 or http://www.turnaround.org/
November 28, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Centre Club, Tampa, FL
Contact: 561-882-1331 or http://www.turnaround.org/
November 29, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Special Program
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
November 30-December 2, 2006
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Hyatt Regency at Gainey Ranch, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
December 6, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Holiday Dinner
Portland, Oregon
Contact: 503-223-6222 or http://www.turnaround.org/
December 7, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
The Newark Club, Newark, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
December 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
LI TMA Holiday Party
TBA, Long Island, New York
Contact: 631-251-6296 or http://www.turnaround.org/
December 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Christmas Function
GE Commercial Finance, Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
February 2007
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
San Juan, Puerto Rico
Contact: 1-703-739-0800; http://www.abiworld.org/
April 11-15, 2007
AMERICAN BANKRUPTCY INSTITUTE
ABI Annual Spring Meeting
J.W. Marriott, Washington, DC
Contact: 1-703-739-0800; http://www.abiworld.org/
March 27-31, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Spring Conference
Four Seasons Las Colinas, Dallas, Texas
Contact: http://www.turnaround.org/
March 29-31, 2007
ALI-ABA
Chapter 11 Business Reorganizations
Scottsdale, Arizona
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/
June 6-9, 2007
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
23rd Annual Bankruptcy & Restructuring Conference
Westin River North, Chicago, Illinois
Contact: http://www.airacira.org/
June 14-17, 2007
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
July 12-15, 2007
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Marriott, Newport, RI
Contact: 1-703-739-0800; http://www.abiworld.org/
October 10-13, 2007
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Orlando, Florida
Contact: http://www.ncbj.org/
October 16-19, 2007
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Copley Place, Boston, Massachusetts
Contact: 312-578-6900; http://www.turnaround.org/
December 6-8, 2007
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Westin Mission Hills Resort, Rancho Mirage, California
Contact: 1-703-739-0800; http://www.abiworld.org/
March 25-29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Ritz Carlton Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
September 24-27, 2008
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Scottsdale, Arizona
Contact: http://www.ncbj.org/
October 28-31, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Copley Place, Boston, Massachusetts
Contact: 312-578-6900; http://www.turnaround.org/
October 5-9, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900; http://www.turnaround.org/
2009 (TBA)
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Las Vegas, Nevada
Contact: http://www.ncbj.org/
October 4-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
2010 (TBA)
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
New Orleans, Louisiana
Contact: http://www.ncbj.org/
BEARD AUDIO CONFERENCES
Coming Changes in Small Business Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Real Estate under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
High-Yield Opportunities in Distressed Investing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Fundamentals of Corporate Bankruptcy and Restructuring
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Reverse Mergers - the New IPO?
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Dana's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Employee Benefits and Executive Compensation
under the New Code
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Validating Distressed Security Portfolios: Year-End Price
Validation and Risk Assessment
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Changing Roles & Responsibilities of Creditors' Committees
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Calpine's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Healthcare Bankruptcy Reforms
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Changes to Cross-Border Insolvencies
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
The Emerging Role of Corporate Compliance Panels
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.
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, Joel Anthony G.
Lopez, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A.
Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo M.
Pinili, Jr., 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 ***