/raid1/www/Hosts/bankrupt/TCR_Public/060602.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, June 2, 2006, Vol. 10, No. 130
Headlines
400 WEST: Files List of Two Largest Unsecured Creditors
ALM MEDIA: Moody's Lowers Caa1 Rating on $78 Million Loan to Caa2
AMCAST INDUSTRIAL: Can Use Cash Collateral to Pay Revolving Loan
AMERICAN MOULDING: Administrative Claims Bar Date Set on June 30
AMERICAN NATURAL: March 31 Balance Sheet Upside Down by $13.9 Mil.
AMERICAN TISSUE: Ch. 7 Trustee Hires Berger Singerman as Counsel
ANDREW CORP: ADC Merger Prompts S&P to Place BB Rating on Watch
ASARCO LLC: Tennessee Mines Asset Purchase Pact Spurs Bickering
ASARCO LLC: Court Approves Stipulation With Atlantic Richfield
BEARINGPOINT: Moody's Holds Rating on $450 Million Bonds at B3
BEAR STEARNS: S&P Puts Low-B Ratings on Six Certificate Classes
BIO-RAD LABORATORIES: Earns $31 Million in Quarter Ended March 31
BLOUNT INT'L: March 31 Balance Sheet Upside-Down by $133 Million
BOWATER: DBRS Lowers Rating on Senior Debentures to BB(low)
BRAVO! FOODS: Posts $3.8 Mil. Net Loss in 2006 1st Fiscal Quarter
CALBATECH INC: Earns $1.17 Million in Quarter Ended March 31
CARMIKE CINEMAS: Nasdaq Grants Continued Market Listing Request
CARMIKE CINEMAS: Moody's Junks Rating on Sr. Sub. Bonds to Caa1
CENTRAL AMERICAN: Earns $24,767 in 2006 First Fiscal Quarter
CHEMED CORP: Earns $12.2 Million in Three Months Ended March 31
CHIQUITA BRANDS: Moody's Holds Rating on $546.7 Mil. Loan at B1
CIRTRAN CORP: Posts $277,998 Net Loss in 2006 1st Fiscal Quarter
CLEAN EARTH: Has Until June 30 to Remove Actions
CLEARWATER: Moody's Lowers Rating on $13.5 Million Notes to Ba1
COI MIDWEST: Case Summary & 3 Largest Unsecured Creditors
COSINE COMMS: Posts $126,000 Net Loss in First Quarter of 2006
CWALT INC: Fitch Puts Low-B Ratings on Class B-3 & B-4 Certs.
DANA CORP: Fortna Demands Debtors' Payment on $257,803 Claim
DANA CORP: Genuine Parts Wants Stay Lifted to Freeze Debt Payment
DANA CORP: Component Wants Debtors to Decide on Purchase Orders
DOANE PET: Prices Tender Offers for $365 Million Senior Notes
DONALD CREECH: List of 13 Largest Unsecured Creditors
DRESSER INC: Amends Solicitation Terms for 9-3/8% Sr. Sub. Notes
DYNEGY INC: Completes Redemption of Series C Conv. Pref. Stock
EASY GARDENER: Declares Green Thumb as Highest Bidder at $60.5MM
ENRON CORP: Vinson & Elkins Will Pay Enron $30 Million in Cash
EUROGAS INC: March 31 Balance Sheet Upside Down by $16.5 Million
FDL INC: Committee Wants Hamernik LLC as Insolvency Accountant
FIRSTLINE CORP: Committee Asks Court to Appoint Ch. 11 Trustee
FIVECAP INC: List of 12 Largest Unsecured Creditors
GEMSTONE CDO: Moody's Puts Ba2 Rating on $10 Mil. Class E Notes
GLACIER FUNDING: Moody's Rates $4 Million Class E Notes at Ba1
GLEACHER CBO: Moody's Places Junk Rated Class D-1 Notes on Watch
GLOBAL HOME: Can Continue Union Pension and Profit Sharing Plans
GLOBAL HOME: Hires Houlihan Lokey as Investment Banker
GLOBAL MATRECHS: March 31 Balance Sheet Upside Down by $10.5 Mil.
GTC TELECOM: Posts $819,806 Net Loss in 2006 1st Fiscal Quarter
GULF COAST: Files Schedules of Assets and Liabilities
HARDWOOD P-G: Hiring Alvarez & Marsal as Forensic Professional
ICOA INC: Posts $1.3 Million Net Loss in 2006 First Quarter
IMPERO INC: Gets Less than $1 Mil. for Assets Valued at $3 Mil.
INDEPENDENT WHOLESALE: List of 20 Largest Unsecured Creditors
INFORMATION ARCHITECTS: March 31 Equity Deficit Tops $3.6 Million
INFORMATION ARCHITECTS: Completes Purchase of Anywhere Internet
ITC HOMES: Hires Bullivant Houser as Special Counsel
JACOBS ENT: Gets Requisite Consents for 11-7/8% Sr. Sec. Notes
JACOBS INDUSTRIES: Court Approves 2nd Amended Disclosure Statement
JAMES RIVER: Earns $1.4 Million in First Quarter Ended March 31
JEROME DUNCAN: Virchow Krause Hired as Ch. 7 Trustee's Accountant
KASTEN CHASE: Files for Bankruptcy Under Canadian Law
KRISPY KREME: Files FY 2005 10K & Restates 2003 to 2004 Financials
LAGUARDIA ASSOCIATES: Hires Robert Price as Special Counsel
LEVEL 3 COMMS: Fitch Rates Proposed $150 Million Notes at CCC-
LEXINGTON RESOURCES: Posts $3.8 Mil. Net Loss in 2006 First Qtr.
LEXINGTON RESOURCES: Closes $7.65 Million Equity Placement
LOVESAC CORP: Barred From Using G&G's Cash Collateral
LOVESAC CORP: Wants to Walk Away from QB Sack MOU
MACTEC INC: S&P Rates $155 Million Sr. Sec. Credit Facility at B+
MARKSON ROSENTHAL: Court Sets August 18 as Claims Filing Deadline
MASTEC INC: Moody's Holds Ba3 Corporate Family Rating
MIRANT CORP: Resolves Electric Power Purchase Dispute with Pepco
NEFF CORP: S&P Places B+ Corporate Credit Rating on CreditWatch
NES RENTAL: S&P Alters B+ Corp. Credit Rating's Watch to Negative
NEWAVE INC: Swings to Profit in Quarter Ended March 31
NEWMARKET CORP: Moody's Lifts Rating on $150 Million Loan to B1
NVF CO: Wants to Borrow $1 Million More Under DIP Financing Pact
OCA INC: Voluntary Chapter 11 Case Summary
ONEIDA LTD: Panel Wants Klestadt & Winters as Conflicts Counsel
PASCAGOULA HEALTH: List of 3 Largest Unsecured Creditors
PENN OCTANE: Bid Price Deficiency Prompts Nasdaq Delisting Notice
PENN TRAFFIC: Audit Panel Completes Inquiry on Allowance Practices
MIRANT CORP: Agrees to Pay PEPCO $520 Mil. Under Settlement Pact
PETER WORKUM: List of 20 Largest Unsecured Creditors
PINNACLE CBO: Moody's Lowers Rating on $56 Million Notes to C
PINNACLE ENT: Buying President's St. Louis Casino for $31.5 Mil.
POGO PRODUCING: Moody's Rates $400 Million Sr. Sub. Notes at B2
POGO PRODUCING: S&P Rates Proposed $400 Mil. Sr. Sub. Notes at B+
PRESIDENT CASINOS: Court Okays $31.5 Mil. Asset Sale to Pinnacle
PTS INC: Posts $621,930 Net Loss in 2006 First Fiscal Quarter
REPERFORMING LOAN: S&P Affirms Ten Cert. Classes' Low-B Ratings
REXNORD: Moody's Reviews Low-B Rating on Notes & May Downgrade
RIVERSTONE NETWORKS: To File Panel-Approved Plan of Liquidation
ROTEC INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
SAINT VINCENTS: Can Pay $1 Mil. Break-Up Fee to Caritas Health
SAINT VINCENTS: Spring Street Agrees to Lease Rejection
SECURITY INTELLIGENCE: Reports $1.4MM Net Loss in Fiscal 3rd Qtr.
SECURITIZED ASSET: DBRS Puts BB Rating on $6.1 Million Class B-5
SENSOR SYSTEM: Posts $523,284 Net Loss in 2006 1st Fiscal Quarter
SIM SHOLEM: Case Summary & 21 Largest Unsecured Creditors
SOUTHEASTERN MOBILE: List of 19 Largest Unsecured Creditors
SPECIALTY FOODS: Continues Talks with Lenders on Loan Default
STARINVEST GROUP: March 31 Working Capital Upside Down by $1 Mil.
STATE STREET: Apartment Complex Mortgagee Gets Relief from Stay
SUN MICROSYSTEMS: Board Elects to Abolish Stockholder Rights Plan
TITAN GLOBAL: Amends Second Quarter Financials Ended Feb. 28
TODD MCFARLANE: Has Until June 30 to File Chapter 11 Plan
TRANSAX INT'L: March 31 Balance Sheet Upside Down by $2.2 Million
UBR PROPERTIES: List of 20 Largest Unsecured Creditors
UTAH AIRCRAFT: Unperfected Security Interest Defeats Stay Relief
VERILINK CORP: Judge Caddell Okays Interim Cash Collateral Use
VERILINK CORP: Panel Wants A&M Securities as Financial Advisor
VERILINK CORP: Has Until August 7 to File Chapter 11 Plan
VISTEON: Moody's Rates First Lien $800 Million Term Loan at B1
VOUGHT AIRCRAFT: Moody's Lowers Rating on Sr. Unsec. Bonds to B3
WEST TRADE: Moody's Rates $6 Million Class E Notes at Ba1
WORLD HEALTH: U.S. Trustee Asks Court to Appoint Ch. 11 Trustee
* BOOK REVIEW: Going for Broke: How Robert Campeau Bankrupted the
Retail Industry, Jolted the Junk Bond Market, and
Brought the Booming 80s to a Crashing Halt
*********
400 WEST: Files List of Two Largest Unsecured Creditors
-------------------------------------------------------
400 West Broadway LLC filed the list of its two largest unsecured
creditors with the U.S. Bankruptcy Court for the District of
Massachusetts, disclosing:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Estate of Martin Kelly Monies Loaned $250,000
c/o Christopher Sullivan, Esq.
Baker Braverman & Barbodoro, PC
50 Braintree Hill Park
Braintree, MA 02184
Brad Hanley, Manager Monies Loaned $15,000
408 West Broadway
South Boston, MA 02127
400 West Broadway LLC is Based in Boston, Massachusetts. The
company filed for chapter 11 protection on April 26, 2006 (Bankr.
D. Mass. Case No. 06-11167). Carolyn A. Bankowski, Esq., at
Deutsch Williams Brooks DeRensis & Holland, P.C., represents the
Debtor. When the Debtor filed for protection from its creditors,
it estimated assets and debts of $1 million to $10 million.
ALM MEDIA: Moody's Lowers Caa1 Rating on $78 Million Loan to Caa2
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to ALM Media,
Inc.'s proposed $24.7 million incremental senior secured term loan
and a Caa2 rating to its proposed $19.3 million incremental second
lien term loan, which will be used to fund a dividend payment to
its sponsor and the redemption of preferred stock.
In addition, Moody's has downgraded ALM Media's existing
$78 million second lien senior secured term loan facility to Caa2
from Caa1. The downgrade largely reflects the pressure which the
incremental debt places upon second lien holders and the reduction
of the equity cushion which will result from the redemption of the
preferred stock.
Full details of the rating action:
Ratings assigned:
* $24.7 million incremental senior secured first lien
term loan -- B3
* $19.3 million incremental senior secured second lien
term loan -- Caa2
Ratings affirmed:
* $70 million senior secured first lien revolving credit
facility, due 2010 -- B3
* $193 million senior secured first lien term loan facility,
due 2010 -- B3
* Corporate Family rating -- B3
Ratings downgraded:
* $78 million second lien senior secured term loan facility,
2011 -- to Caa2 from Caa1
The rating outlook is stable.
The affirmation of the Corporate Family rating is largely based
upon Moody's expectation that despite the significantly increased
debt burden resulting from $44 million in incremental term loans,
improved EBITDA performance will return the company's leverage to
around its current level by the end of 2007. The ratings are
supported by the defensibility of ALM's market niche, the
reputation and loyal readership of its titles, the diversification
of its customer base and a recent improvement in advertising
spending by the legal sector.
ALM's ratings incorporate the company's persistently high leverage
profile, the dependence of its business on the US legal services
market, its vulnerability to legal advertising spending, its
acquisitiveness, and its willingness to fund dividends and stock
redemptions from the proceeds of senior secured debt, which
evidences management's preference to provide a return to its
equity holders at the expense of debtholders.
The stable outlook indicates Moody's expectation of steady organic
top line growth, margin improvement and a greater income
contribution from trade shows, information services and Internet
business activities.
Headquartered in New York City, New York, American Lawyer Media is
a leading integrated media company, focused on the legal industry.
The company, which is wholly owned by U.S. Equity Partners, L. P.
recorded 2005 sales of $167 million.
AMCAST INDUSTRIAL: Can Use Cash Collateral to Pay Revolving Loan
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
allowed Amcast Industrial Corporation and Amcast Automotive of
Indiana, Inc., to use the cash collateral securing repayment of
their loan to a group of lenders headed by NexBank, SSB, fka
Heritage Bank, SSB.
The Debtors plan to use the cash collateral to pay down their
prepetition debt to the NexBank lenders.
James P. Moloy, Esq, at Dann Pecar Newman & Kleiman, P.C., in
Indianapolis, Indiana, told the Court that before the Debtors
filed for bankruptcy, they entered into three loan facilities:
(a) a revolving credit facility having a current balance of
approximately $11,208,366;
(b) a term loan having a current balance of approximately
$12,967,500; and
(c) a term loan having a current balance of approximately
$54,489,544.
The Debtors continued to draw on the Revolving Loan until their
bankruptcy filing. The Prepetition Lenders assert first priority
liens on all of the Debtors' assets. Included in the collateral
securing the loans are certain segregated funds held in the
Debtors' account at Fifth Third Bank, and having a current balance
of approximately $15,000,000. The segregated funds are not used
or needed in the Debtors' operations. The Debtor plans to use
$10 million from this account to pay the revolving loan balance.
NexBank had refused to consent to further extensions on the cash
collateral use until the revolving loan is paid.
Mr. Moloy assured the Court that the Debtors have additional cash
reserves, after payment of the $10,000,000, in the approximate
amount of $9,700,000 to support the Debtor's operations. The
Debtors' continued operations will also be funded by the Debtors'
revenues generated by the Debtors' ongoing business operations.
About Amcast Industrial
Headquartered in Fremont, Indiana, Amcast Industrial Corporation,
manufactures and distributes technology-intensive metal products
to end-users and suppliers in the automotive and plumbing
industry. The Company and four debtor-affiliates filed for
chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court
for the Southern District of Ohio confirmed the Debtors' Third
Amended Joint Plan of Reorganization on July 29, 2005. The
Debtors emerged from bankruptcy on Aug. 4, 2005.
Amcast Industrial Corporation and Amcast Automotive of Indiana,
Inc., filed for chapter 11 protection a second time on Dec. 1,
2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq.,
and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C.,
represent the Debtors in their restructuring efforts. Henry A.
Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP,
represent the Official Committee of Unsecured Creditors. Kevin I.
Dowd at Berkeley Square Group LLC serves as Amcast's financial
advisor. The Creditors' Committee receives financial advice from
Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its
affiliate filed for protection from their creditors, they listed
total assets of $97,780,231 and total liabilities of $100,620,855.
AMERICAN MOULDING: Administrative Claims Bar Date Set on June 30
----------------------------------------------------------------
The Hon. Christopher M. Klein of the U. S. Bankruptcy Court for
the Eastern District of California established June 30, 2006, as
the deadline for all creditors requesting payment of
administrative claims from American Moulding and Millwork Company
arising from Oct. 6, 2005, through May 31, 2006, to file their
Proofs of Claim.
Creditors must serve notice of allowance of Administrative Expense
Claims to:
Thomas A. Willoughby
Felderstein Fitzgerald Willoughby & Pacuzzi LLP
400 Capitol Mall, Suite 1450
Sacramento, California 95814
Office of the U.S. Trustee
501 I Street #7-500
Sacramento, California 95814
Donna T. Parkinson
Parkinson Phinney
400 Capitol Mall, Suite 2540
Sacramento, California 95814
Headquartered in Sanford, North Carolina, American Moulding and
Millwork Company -- http://www.amfurniture.com/-- is a supplier
of real wood furniture and cabinetry. The Company filed for
chapter 11 protection on Oct. 6, 2005 (Bankr. E.D. Calif. Case No.
05-34431). Thomas A. Willoughby, Esq., at Felderstein Fitzgerald
Willoughby & Pascuzzi LLP represents the Debtor in its
restructuring efforts. Lawyers at Parkinson Phinney represent the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed $17,663,776 in assets
and $18,481,093 in debts.
AMERICAN NATURAL: March 31 Balance Sheet Upside Down by $13.9 Mil.
-----------------------------------------------------------------
American Natural Energy Corp., 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 $710,973 net loss on $586,911 revenues
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $7,128,762
in total assets and $21,039,132 in total liabilities, resulting in
a $13,910,370 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $617,618 in total current assets available to pay
$19,715,929 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?a57
Going Concern Doubt
As reported in the Troubled Company Reporter on May 22, 2006,
PricewaterhouseCoopers LLP expressed substantial doubt about
American Natural Energy Corporation's ability to continue as a
going concern after it audited the Company's financial statements
for the years ended Dec. 31, 2005, and Dec. 31, 2004. The
auditing firm pointed to the Company's substantial losses, working
capital deficit and accumulated deficit.
About American Natural
Headquartered in Tulsa, Oklahoma, American Natural Energy Corp.
-- http://annrg.com/-- is engaged in the acquisition,
development, exploitation and production of oil and natural gas.
AMERICAN TISSUE: Ch. 7 Trustee Hires Berger Singerman as Counsel
----------------------------------------------------------------
Christine C. Shubert, Chapter 7 Trustee for the estate of American
Tissue, Inc. and its debtor-affiliates, obtained permission from
the U.S. Bankruptcy Court for the District of Delaware to employ
Berger Singerman, P.A., as her special litigation counsel.
Ms. Shubert tells the Court that Berger Singerman will represent
her in an ongoing litigation against Donaldson Lufkin & Jenrette
Securities Corporation, pending in the U.S. District Court for the
Southern District of New York.
Court documents showing the responsibilities and compensation of
Bergen Singerman were filed under seal.
To the best of the Trustee's knowledge, Berger Singerman does not
hold or represent any interest adverse to the Debtors' estates,
and is a "disinterested person" as that phrase is defined in
Section 101(14) in the U.S. Bankruptcy Code.
American Tissue Inc. is a leading integrated manufacturer of
tissue products and pulp and paper in North America, with a
comprehensive product line that includes jumbo tissue rolls for
converting and converted tissue products for end-use. The company
filed for Chapter 11 protection on September 10, 2001 (Bankr. Del.
Case No. 01-10370). On April 22, 2004, the Court converted the
Debtors cases into a chapter 7 liquidation proceeding. Laura
Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young & Jones,
represents the Debtors. Dmitry Pilipis, Esq., and Frederick B.
Rosner, Esq., at Jaspan Schlesinger Hoffman LLP, represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it estimated assets and debts
of more than $100 million.
ANDREW CORP: ADC Merger Prompts S&P to Place BB Rating on Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating and other ratings on Andrew Corp. on CreditWatch
with positive implications.
The CreditWatch listing follows the announcement that the company
has agreed to be acquired by unrated ADC Telecommunications Inc.,
in a transaction expected to close in four to six months. The new
entity will have revenues of about $3.3 billion, and it will be
more diversified than either of its predecessors, as the
companies' product lines are largely complementary: Andrew focuses
on the wireless infrastructure industry, while ADC primarily
serves the wireline infrastructure industry.
The debt leverage of the new entity will be about 2.5x
trailing-12-months' EBITDA, somewhat higher than that of Andrew
Corp. by itself, though this does not include expected synergies.
The new company will also have substantially greater liquidity
than Andrew, with pro forma cash balances of $677 million at April
30, 2006, compared with $188 million at Andrew on March 31, 2006.
"Standard & Poor's will monitor the progress of the merger
transaction and assess the combined companies' business and
financial strategies," said Standard & Poor's credit analyst Bruce
Hyman.
Following the merger, the ratings could be adjusted upwards,
likely by one notch.
ASARCO LLC: Tennessee Mines Asset Purchase Pact Spurs Bickering
---------------------------------------------------------------
ASARCO LLC asks the U.S. Bankruptcy Court for the Southern
District of Texas in Corpus Christi to enter a judgment in its
favor on all claims and causes of action TMD Acquisition
Corporation has asserted.
According to Robert C. Wilmoth, Esq., at Baker Botts LLP, in
Dallas, Texas, the issue raised by ASARCO LLC's motion for
summary judgment is simple -- whether the Asset Purchase
Agreement between ASARCO and TMD Acquisition Corporation was
executory when ASARCO filed for bankruptcy.
The answer is likewise simple, Mr. Wilmoth says, TMD failed to
satisfy ASARCO's conditions to closing by the Aug. 1, 2005,
deadline, therefore, ASARCO owed TMD no duty to complete
performance of the APA when it filed its petition in bankruptcy a
week later.
Without an executory contract, Mr. Wilmoth says, TMD cannot
obtain a lien against ASARCO's Tennessee Mines Division Assets
pursuant to Section 365(j) of the Bankruptcy Code.
TMD did not attempt to counter this dispositive argument, Mr.
Wilmoth notes. Instead, TMD offers alternative, contradictory
arguments aimed at discrediting the efficacy of ASARCO's
"termination" of the APA on Aug. 2, 2005, and bolstering its
claim that the APA remains executory.
TMD maintains that the APA could not be terminated after
August 1, 2005, because the APA is silent on the question of
post-Closing Date termination. In the alternative, TMD contends
that ASARCO's August 2, 2005 "termination" of the APA was invalid
because ASARCO allegedly breached the APA by not placing a good-
faith deposit into escrow.
Thus, Mr. Wilmoth asserts, TMD should be denied summary judgment
because there is no causal connection between the lack of an
escrow and TMD's failure to close.
ASARCO also objects to TMD's request to amend its pleadings
because it's untimely.
TMD Seeks Motion for Leave to file Sur Reply
TMD notes that ASARCO has raised new issues and arguments, which
were not previously before the Court.
Thus, TMD asks the Court for leave to file a Sur Reply to explain
to the Court what issues remain to be tried, address the
arguments raised by ASARCO, and call the Court's attention to
additional summary judgment evidence already in the record.
The Court has suggested, without formal ruling, that since the
closing did not occur by August 1, 2005, the APA was validly
terminated.
Michael P. Ridulfo, Esq., at Anderson, Lehrman, Barre & Maraist
LLP, in Corpus Christi, Texas, asserts that the Court must first
analyze two other breaches -- ASARCO's failure to timely provide
information needed for TMD to acquire financing and ASARCO's
violation of the no shop provision of the APA. The facts
concerning these breaches remain in dispute and will need to be
resolved either by further summary judgment motions or by trial.
The Court has observed that the Termination Agreement section is
ambiguous because it refers to termination before and on the
closing date. Both ASARCO and TMD also recognize the ambiguity
of the section.
Since the Termination Agreement section is ambiguous, Mr. Ridulfo
says, the Court is permitted to examine all of the parties'
interpretation of this section. The parties' intent is that the
Termination Agreement section permits the termination because the
closing did not occur on August 1, 2005. Thus, Mr. Ridulfo says,
it is necessary for the Court to examine the various breaches in
light of the language in the Termination Agreement section
precluding termination where the failure to close is the result
of one party's breach.
The parties have already agreed that the escrow issue did not
prevent closing. The inquiry, however, does not end there, Mr.
Ridulfo points out. Although, TMD does not believe that ASARCO's
Motion seeks summary judgment with respect to the other alleged
breaches, there is evidence in the summary judgment record to
demonstrate a factual dispute regarding whether ASARCO's failure
to provide certain critical ore reserve data is a breach which
prevented TMD from closing by August 1, 2005.
ASARCO admits that its failure to provide information delayed the
closing by two to three weeks. TMD informed ASARCO that the ore
reserve issue delayed TMD's ability to obtain public financing by
eight to 10 weeks. While there is no dispute that ASARCO's
failure to provide sufficient ore reserve delayed TMD's
preparations of its public financing documents, there remains a
factual dispute concerning whether ASARCO's failure to provide
the required ore reserve data is a breach, which precludes
termination of the APA. This issue is not resolved by the
pending summary judgment motions and will need to be tried, Mr.
Ridulfo says.
Mr. Ridulfo notes that TMD continues to urge the Court to find,
as a matter of law, that there is nothing in the APA that permits
termination if closing does not occur by August 1, 2005.
Alternatively, he says, the remaining issues to be tried are
whether the delay caused by ASARCO's erroneous ore reserves
report precludes termination, and whether TMD may impose a
constructive trust with respect to the $250,000 escrow payment.
ASARCO Objects to TMD's Filing of Sur Reply
As TMD is surely aware, only "a genuine issue as to a material
fact" will preclude the entry of summary judgment, Robert C.
Wilmoth, Esq., at Baker Botts LLP, in Dallas, Texas, points out.
Nothing in TMD's proposed sur reply explains how the remaining
fact disputes are material in the resolution of ASARCO's summary
judgment motion, Mr. Wilmoth tells the Court.
Mr. Wilmoth says the APA was not executory as of August 9, 2005,
not because ASARCO was somehow ineligible to terminate the APA,
but because TMD failed to trigger ASARCO's obligation to complete
performance of the APA on or before August 1, 2005.
TMD also claims that it needs to file a sur reply to explain how
ASARCO's summary judgment motion is not dispositive of all claims
asserted by TMD in its Complaint for Declaratory Judgment. If
the Court finds that the APA is non-executory, nothing in TMD's
Complaint for Declaratory Judgment will remain, Mr. Wilmoth
argues.
TMD's Motion for Leave provides no good reason for the Court to
permit TMD one or more opportunity to resuscitate its claims for
a lien under Section 365(j), Mr. Wilmoth asserts. The proposed
sur reply sheds no light on the dispositive issue raised by
ASARCO's summary judgment motion -- whether the APA was non-
executory as of the Petition Date because TMD failed to satisfy
ASARCO's conditions precedent and thereby failed to trigger
ASARCO's obligation to complete performance of the APA.
Accordingly, ASARCO asks the Court to deny TMD's Motion for
Leave.
About ASARCO
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: Court Approves Stipulation With Atlantic Richfield
--------------------------------------------------------------
The State of Montana Department of Environmental Quality commenced
an action against Atlantic Richfield, ASARCO LLC, and American
Smelting and Refining Company in the Montana First Judicial
District Court, Lewis & Clark County.
Atlantic Richfield and ARCO Environmental Remediation LLC asked
the U.S. Bankruptcy Court for the Southern District of Texas in
Corpus Christi to lift the automatic stay to file claims against
the Debtors in the Montana Civil Action. Atlantic Richfield and
ARCO also asked the Court to lift the automatic stay to toll time
to file the cross-claims and to expressly preserve them
notwithstanding the Debtors' bankruptcy filings.
In a Court-approved stipulation, the Debtors and Atlantic
Richfield agree that if there is an agreement fixing a period
within which Atlantic Richfield must assert its cross-claims, and
that period has not expired before the ASARCO filed for
bankruptcy, then that period does not expire until the end of the
period, or 30 days after notice of the termination of the
automatic stay with respect to the cross-claims.
Atlantic Richfield expressly reserves the right to pursue all
legal and equitable remedies against the Debtors including,
without limitation, the right to seek further relief from the
automatic stay to assert, file and prosecute the Cross-Claims and
to conduct discovery regarding the Cross-Claims and in defense of
the claims asserted by the DEQ in the Montana Civil Action.
The Parties makes clear that the Stipulation does not exempt the
cross-claims from the established Bar Dates.
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).
BEARINGPOINT: Moody's Holds Rating on $450 Million Bonds at B3
--------------------------------------------------------------
Moody's Investors Service confirmed the ratings for BearingPoint,
Inc. This action concludes the review that began on April 21,
2005 following the company's announcement that it would delay the
filing of its 2004 financials. The rating outlook is negative.
The ratings confirmation reflects the company's ongoing efforts
toward the filing of its delayed financials, as well as ongoing
efforts to remediate internal control deficiencies and cost
imbalances. The company has filed its FY2004 financials but
expects to delay the filing of its FY2005 financials to later this
year. The confirmation also reflects Moody's expectation that
BearingPoint will continue to maintain billing rate stability,
reduce employee turnover, and grow bookings and free cash flow.
The B1 corporate family rating reflects the company's challenging
but stabilizing competitive position, substantial internal control
remediation costs, sizable employee turnover, and weak returns.
Financial leverage, as measured by debt to EBITDA absent unusual
compliance costs and benefiting from bookings growth and bill rate
stability, could potentially map to a higher rating. However, the
company's high employee turnover and ongoing costs of remediating
known internal control deficiencies, and relative size drive the
overall B1 corporate family rating. Moody's considered the
following IT services key ratings factors in its review:
competitive position, financial returns, cash flow generation,
financial leverage, and liquidity.
The negative outlook reflects the challenges and costs that
BearingPoint continues to face to become current on its SEC
financial filings, reduce costs, improve internal controls, and
deal with its remaining legal issues, an SEC investigation, and
high employee turnover.
In addition, bill rates have only recently stabilized and the
negative outlook reflects the potential for bill rate volatility
in the near term. While the company has made progress in recent
quarters, it is not yet clear if the positive trend is
sustainable. Moody's notes that if the company is unable to
become current in its FY2005 and quarterly financial filings by
later in 2006, the ratings may be subject to a downgrade or a
withdrawal.
Ratings confirmed include:
* Corporate Family Rating -- B1
* $250 million series A subordinated convertible bonds
due 2024 -- B3
* $200 million series B subordinated convertible bonds
due 2024 -- B3
* $1 billion multiple seniority
shelf -- (P)Ba3/(P)B2/(P)B3/(P)Caa1
BearingPoint, Inc., headquartered in McLean, Virginia, is a global
business consulting, systems integration and managed services
firms serving government and commercial clients. Moody's
estimates the company's 2005 revenue was in excess of $3 billion.
BEAR STEARNS: S&P Puts Low-B Ratings on Six Certificate Classes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Bear Stearns Commercial Mortgage Securities Trust
Series 2006-PWR12's $2.08 billion commercial mortgage pass-through
certificates series 2006-PWR12.
The preliminary ratings are based on information as of May 31,
2006. Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.
The preliminary ratings reflect:
* the credit support provided by the subordinate classes of
certificates;
* the liquidity provided by the trustee;
* the economics of the underlying loans; and
* the geographic and property type diversity of the loans.
Class A-1, A-2, A-3, A-AB, A-4, A-1A, A-M, and A-J are currently
being offered publicly.
Standard & Poor's analysis determined that, on a weighted average
basis, the pool has a debt service coverage of 1.34x, a beginning
LTV of 98.5%, and an ending LTV of 88.2%. The rated final
maturity date for these certificates is September 2038.
Preliminary Ratings Assigned:
Bear Stearns Commercial Mortgage Securities Trust 2006-PWR12
Preliminary Recommended credit
Class Rating amount support
----- ------ ----------- ------------------
A-1 AAA $68,100,000 30.000%
A-2 AAA $49,000,000 30.000%
A-3 AAA $150,500,000 30.000%
A-AB AAA $119,800,000 30.000%
A-4 AAA $873,250,000 30.000%
A-1A AAA $194,671,000 30.000%
A-M AAA $207,903,000 20.000%
A-J AAA $161,124,000 12.250%
X* AAA $2,079,030,155 N/A
B AA $44,180,000 10.125%
C AA- $18,191,000 9.250%
D A $33,785,000 7.625%
E A- $20,790,000 6.625%
F BBB+ $25,988,000 5.375%
G BBB $20,790,000 4.375%
H BBB- $25,988,000 3.125%
J BB+ $7,796,000 2.750%
K BB $7,797,000 2.375%
L BB- $7,796,000 2.000%
M B+ $5,198,000 1.750%
N B $5,197,000 1.500%
O B- $5,198,000 1.250%
P NR $25,988,155 0.000%
* Interest-only class with a notional amount
N/A -- Not applicable
NR -- Not rated
BIO-RAD LABORATORIES: Earns $31 Million in Quarter Ended March 31
-----------------------------------------------------------------
Bio-Rad Laboratories, Inc., earned $31,198,000 of net income on
$308,338,000 of sales for the quarter ended March 31, 2006
At March 31, 2006, the Company's balance sheet showed
$1,414,785,000 in total assets and $712,130,000 in total
liabilities resulting in a stockholders' equity of $702,655,000.
Full-text copies of the Company's financial statements for the
quarter ended March 31, 2006, are available at no charge at
http://ResearchArchives.com/t/s?a45
Bio-Rad Laboratories, Inc. -- http://www.bio-rad.com/-- is a
multinational manufacturer and distributor of life science
research products and clinical diagnostics. Based in Hercules,
California, Bio-Rad serves more than 70,000 research and industry
customers worldwide through a network of more than 30 wholly owned
subsidiary offices.
Bio-Rad Laboratories, Inc.'s 7-1/2% Senior Subordinated Notes due
2013 carry Moody's Investors Service's Ba3 rating and Standard &
Poor's BB- rating.
BLOUNT INT'L: March 31 Balance Sheet Upside-Down by $133 Million
----------------------------------------------------------------
Blount International, Inc., earned $8,957,000 of net income on
$177,740,000 of sales for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $462,269,000
in total assets and $595,815,000 in total liabilities resulting in
a stockholders' deficit of $133,546,000.
Full-text copies of the Company's financial statements for the
quarter ended March 31, 2006, are available at no charge at
http://ResearchArchives.com/t/s?a44
Blount International, Inc. -- http://www.blount.com/-- is a
diversified international company operating in three principal
business segments: Outdoor Products, Industrial and Power
Equipment and Lawnmower. Blount sells its products in more than
100 countries around the world.
BOWATER: DBRS Lowers Rating on Senior Debentures to BB(low)
----------------------------------------------------------
Dominion Bond Rating Service downgraded the rating of Bowater
Canadian Forest Products Inc. to BB (low) from BB. The trend
remains Negative.
* Senior Debentures Downgraded BB (low) Neg
* Issuer Rating Downgraded BB (low) Neg
The downgrade reflects persistent weakness in Bowater's credit
metrics and the expectation that a significant improvement will
not take place over the near term. The Negative trend recognizes
the considerable headwinds facing the Company.
Bowater's operating performance has been negatively impacted by
the structural decline in North American newsprint demand, by high
energy and input costs, and by the strengthening of the Canadian
dollar. Newsprint is the Company's largest business segment and
accounts for more than 40% of annual revenues. Even though
disciplined industry capacity curtailments are expected to support
moderate newsprint price increases over the near term, the
aforementioned challenges will limit a measurable rebound in
profitability.
DBRS notes that over the near term, modest earnings growth and low
capex are expected to enable Bowater to generate neutral to
modestly positive free cash flow. However, free cash flow will
not be sufficient to measurably reduce debt from aggressive
levels, which increases financial risk. This risk would be
increased with a slowdown in economic conditions. In the event of
weaker-than-expected earnings and cash flow or a major debt-
financed acquisition, further rating action may be considered.
DBRS notes that despite high debt levels, the Company's liquidity
risk is expected to be manageable. Bowater has cash and available
credit of US$488 million at March 31, 2006, and the Company
intends to monetize approximately US$300 million worth of
timberlands. Furthermore, Bowater has no large debt repayment
requirements before 2009.
BRAVO! FOODS: Posts $3.8 Mil. Net Loss in 2006 1st Fiscal Quarter
-----------------------------------------------------------------
Bravo! Foods International 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 $3,885,572 net loss on $3,561,215 of
revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $21,765,256
in total assets, $12,105,552 in total liabilities, and $9,659,704
in stockholders' equity.
The Company's March 31 balance sheet also showed strained
liquidity with $7,141,963 in total current assets available to
pay $10,694,621 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?a41
Going Concern Doubt
As reported in the Trouble Company Reporter on Nov. 28, 2005,
Lazar Levine & Felix LLP expressed substantial doubt about the
company's ability to continue as a going concern after it audited
the company's financial statement for the fiscal year ended
Dec. 31, 2004. The auditing firm pointed to the company's
recurring losses, working capital deficiency, shareholder deficit,
and delinquent debts.
About the company
Bravo! Foods International Corp. develops, brands, markets,
distributes and sells flavored milk products in the United States,
Great Britain and various Middle Eastern countries. Bravo!'s
products are available in the United States and internationally
through production agreements with regional aseptic milk
processors and are currently sold under the brand name
Slammers(R).
CALBATECH INC: Earns $1.17 Million in Quarter Ended March 31
------------------------------------------------------------
CalbaTech, Inc., realized net income for the three months ended
March 31, 2006 of $1,177,539 as compared to a net loss of $270,450
for the same period in 2005. Management attributes the swing to a
net income primarily to an unrealized gain on adjustment of
derivative and warrants liability to the fair value of underlying
securities relating to the convertible notes it obtained in 2005,
Operationally, the Company believes that increased revenues and
profitability generated by its subsidiary, KD Medical, continued
growth and new profitability of Molecula, along with the Stem Cell
Microbank(TM) sales from LifeStem will result in a net profit for
2006.
CalbaTech generated revenues of $412,567 from operations for the
three months ended March 31, 2006, compared to $314,820 for the
three months ended March 31, 2005.
At March 31, 2006 and Dec. 31, 2005, the Company's total
liabilities exceeded its total assets by $4,105,684 and
$5,651,861, respectively. The Company has incurred accumulated
losses of $10,416,865 as of March 31. In addition, its current
liabilities exceeded its current assets by $1,508,557 as of March
31.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?a4b
Going Concern Doubt
De Joya Griffith & Company, LLC, expressed substantial doubt about
Calbatech, 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 pointed to the Company's
recurring losses from operations, negative working capital, and
negative cash flows from operations.
About CalbaTech
CalbaTech, Inc. (OTCBB: CLBE) -- http://www.CalbaTech.com/-- is
an emerging life sciences company concentrating on providing
products and platforms to the research market for biotech and
pharmaceutical companies and to academic institutions.
CARMIKE CINEMAS: Nasdaq Grants Continued Market Listing Request
---------------------------------------------------------------
Carmike Cinemas, Inc. received, on May 24, 2006, a notice from the
Nasdaq Office of General Counsel indicating that the Nasdaq
Listing Qualifications Panel determined to grant Carmike's request
for continued listing on the Nasdaq National Market. The Panel's
determination of continued listing is conditional upon Carmike
filing its Annual Report on Form 10-K for the fiscal year ended
Dec. 31, 2005, all required restatements, and its Quarterly Report
on Form 10-Q for the quarter ended March 31, 2006 on or before
July 27, 2006.
Alternative Financing Commitment Letter
On May 24, 2006, Carmike entered into a commitment letter with
Bear, Stearns & Co. Inc. and Bear Stearns Corporate Lending Inc.,
which provides that if the holders of Carmike's 7.5% senior
subordinated notes due 2014 do not consent to an extension of time
for Carmike to file and deliver financial statements and related
reports, then Bear Stearns will use its commercially reasonable
efforts to obtain the requisite approval from lenders under
Carmike's existing senior secured credit facility for an amendment
permitting a portion of the existing unfunded term loan commitment
to be used to purchase or repay the notes prior to or after any
acceleration. If this lender approval is not received, Bear
Stearns will provide Carmike with replacement senior secured
credit facilities, including an amount sufficient to purchase or
repay the notes. The default cure period under the notes for the
delinquent Form 10-K expires on June 3, 2006, after which the
maturity of the notes may be immediately accelerated by the
trustee or the holders of at least 25% in aggregate principal
amount of the notes. The commitments by Bear Stearns under the
commitment letter are subject to, among other things, the
negotiation, execution and delivery of definitive documentation
with respect to the new credit facilities or the amendment and the
satisfaction of other customary conditions precedent for
financings of this type.
Lease Review Update
Carmike has substantially completed the review of its capital and
operating leases and is currently quantifying the impact of this
review on Carmike's previously issued financial statements for the
years ended Dec. 31, 2003 and Dec. 31, 2004 and the quarters ended
March 31, 2005, June 30, 2005 and Sept. 30, 2005. The review by
PricewaterhouseCoopers LLP, Carmike's independent registered
public accounting firm, is on going. Carmike intends to file its
Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2005
promptly upon completion, followed by the filing of its Quarterly
Report on Form 10-Q for the quarter ended March 31, 2006.
Financial Restatements
Carmike determined that some of its capital leases and operating
leases have not been properly accounted for at the date of
inception or subsequent modification. As a result, Carmike will
restate the previously issued financial statements for the years
ended Dec. 31, 2003 and Dec. 31, 2004 and the quarters ended March
31, 2005, June 30, 2005 and Sept. 30, 2005. Accordingly,
Carmike's Audit Committee, upon the recommendation of management,
has concluded that the previously issued financial statements for
the restated periods should not be relied upon because of the
accounting errors contained. While Carmike is currently
quantifying the impact of these accounting errors on the financial
statements for these periods, it does not expect an impact to net
cash flows for these periods.
In addition, Carmike's management has determined that, as of
Dec. 31, 2005, it had certain material weaknesses in internal
control over financial reporting. Specifically, management has
determined that Carmike did not have a sufficient complement of
personnel with experience in the application and implementation of
generally accepted accounting principles. Further, Carmike did
not maintain effective controls over the selection, application
and monitoring of its accounting policies to ensure the accurate
accounting for leases. Management has not fully completed its
assessment of internal control over financial reporting as of
Dec. 31, 2005 but, based on the material weaknesses identified to
date, has concluded that Carmike's internal control over financial
reporting was not effective as of such date. Carmike intends to
take steps to remediate the identified material weaknesses in
internal control over financial reporting.
Headquartered in Columbus, Georgia, Carmike Cinemas, Inc. (NASDAQ:
CKEC) -- http://www.carmike.com/-- is a premiere motion picture
exhibitor in the United States with 301 theatres and 2,475 screens
in 37 states, as of Dec. 31, 2005. Carmike's focus for its
theatre locations is small to mid-sized communities with
populations of fewer than 100,000.
CARMIKE CINEMAS: Moody's Junks Rating on Sr. Sub. Bonds to Caa1
---------------------------------------------------------------
Moody's Investors Service placed the ratings for Carmike Cinemas,
Inc. on review for downgrade based on concerns over the company's
weak financial reporting and the potential for holders of
Carmike's $150 million of senior subordinated notes to accelerate
repayment of the obligation if the company does not file its Form
10k on or before June 2.
Moody's believes that Carmike's financing commitment from Bear,
Stearns & Co. Inc. is likely to provide sufficient capacity to
repay the $150 million of senior subordinated notes if necessary.
If Carmike replaces the senior subordinated notes with bank debt,
Moody's would lower the rating on the secured bank debt to the
same level as the corporate family rating due to the elimination
of the junior debt cushion. This debt cushion currently supports
a bank credit facility rating higher than the corporate family
rating.
The review will also consider Carmike's inadequate internal
controls and persistent challenges in hiring and retaining
financial staff with the appropriate expertise.
A summary of actions:
Carmike Cinemas, Inc.
* Corporate Family Rating, Placed on Review for Possible
Downgrade, currently B2
* Senior Secured Bank Credit Facility, Placed on Review for
Possible Downgrade, currently B1
* Senior Subordinated Bonds, Placed on Review for Possible
Downgrade, currently Caa1
* Outlook, Changed To Rating Under Review From Negative
The review incorporates Moody's concerns over Carmike's persistent
delay in filing of its form 10k and the resultant potential for
holders of the subordinated notes to demand repayment of
principal. The weak internal controls and continued challenges in
hiring and retaining financial staff with the appropriate
expertise pose risk. While filing of the financial statements
would provide additional clarity, Moody's considers this
development alone insufficient to warrant confirmation of the
ratings.
Moody's would consider confirming the existing ratings should
Carmike resolve concerns regarding the acceleration of its bonds
as well as its reporting and accounting issues. In addition,
Moody's would expect significant progress towards both remediation
of its internal control weaknesses and the employment of
appropriate financial staff prior to a confirmation.
Carmike is one of the country's largest motion picture exhibitors
with approximately 2,500 screens and 300 theaters as of September
30, 2005, and annual revenue slightly under $500 million. The
company maintains its headquarters in Columbus, Georgia.
CENTRAL AMERICAN: Earns $24,767 in 2006 First Fiscal Quarter
------------------------------------------------------------
Central American Equities Corp. filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 17, 2006.
The Company earned $24,767 of net income on $410,121 of revenues
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $5,447,653
in total assets, $674,289 in total liabilities, and $4,773,364 in
stockholders' equity.
The Company's March 31 balance sheet also showed strained
liquidity with $160,930 in total current assets available to pay
$421,032 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?a58
Going Concern Doubt
As reported in the Troubled Company Reporter on May 4, 2006,
Killman, Murrell & Company, P.C., in Odessa, Texas, raised
substantial doubt about Central American Equities Corp.'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 sales growth
uncertainty and inability to raise sufficient capital.
Central American Equity Corp. provides an integrated eco-vacation
experience in Costa Rica, and owns and operates hotels and real
property in that place.
CHEMED CORP: Earns $12.2 Million in Three Months Ended March 31
---------------------------------------------------------------
Chemed Corporation filed its financial statements for the quarter
ended March 31, 2006, with the Securities and Exchange Commission
on May 9, 2006.
The Company reported $12,215,000 of net income on $246,238,000 of
revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $796,597,000
in total assets and $398,091,000 in total liabilities and
stockholders' equity of $398,506,000.
Full-text copies of the Company's financial statements for the
quarter ended March 31, 2006, are available at no charge at
http://ResearchArchives.com/t/s?a40
Headquartered in Cincinnati, Ohio, Chemed Corporation (NYSE:CHE)
-- http://www.chemed.com/-- operates VITAS Healthcare
Corporation, the nation's largest provider of end-of-life care,
and Roto-Rooter, the nation's largest commercial and residential
plumbing and drain cleaning services provider.
* * *
Chemed's 8-3/4% Senior Notes due Feb. 24, 2011, carry Moody's Ba3
rating and Standard & Poor's B+ rating.
CHIQUITA BRANDS: Moody's Holds Rating on $546.7 Mil. Loan at B1
---------------------------------------------------------------
Moody's Investors Service affirmed the B1 rating on Chiquita
Brands LLC's senior secured bank credit facilities, as well as the
B3 rating on senior unsecured notes at Chiquita Brands
International, Inc., as well as its B2 corporate family rating.
These ratings were affirmed:
Chiquita Brands LLC (operating subsidiary)
* $150 million senior secured revolving credit at B1
* $24.5 million senior secured term loan B at B1
* $372.2 million senior secured term loan C at B1
Chiquita Brands International, Inc. (holding company parent)
* $250 million 7.50% senior unsecured notes due 2014 at B3
* $225 million 8.875% senior unsecured notes due 2015 at B3
* Corporate family rating at B2
The outlook remains stable.
These actions are in connection with a proposed amendment in which
Chiquita Brands LLC will loosen financial covenants. The
affirmation and stable outlook reflect the solid business
franchise which Chiquita has created within the competitive fresh
fruit and produce segment of the food industry, the increased
diversity created over the past few years in its product segments
as well as raw material sourcing capabilities, and credit metrics
which have been strong for its rating category.
The affirmation and stable outlook also consider Chiquita's recent
weak financial performance which has begun to negatively impact
the company's credit metrics, the continuing uncertainties
surrounding the ultimate impact of the recently-changed banana
import regulations in key EU markets, as well as continuing
litigation risk.
The key rating factors currently influencing Chiquita's ratings
and stable outlook are as follows: The company is one of the
largest global producers and marketers of fresh fruit and
vegetables, with good geographic and product market diversity.
Its franchise strength and growth potential are considered
moderate, with good market share and volume growth in some
segments, partially offset by the low margin commodity nature of
much of its business which, at times, can lead to earnings and
cash flow volatility.
Liquidity under stress has been weak recently, as evidenced by the
need to seek financial covenant relief. Liquidity should improve
with greater covenant cushion provided. Overall credit metrics
have been relatively strong for its rating category but will
likely weaken in the year ahead due to recent weak operating
performance.
The senior secured credit facilities are notched up from the
corporate family rating to reflect their effective and structural
priority to $475 million of parent company unsecured notes.
Tangible asset coverage is not robust and coverage of principal
would rely on realizing value in trademarks, but enterprise value
at a low multiple of EBITDA would provide adequate coverage of
principal.
The Revolver and Term Loan B are guaranteed by the holding company
and material US and Latin American subsidiaries; they are secured
by the Chiquita trademark and a pledge of 100% of the stock of
material US subsidiaries and 65% of the stock of material European
subsidiaries.
The Term Loan C is guaranteed by the holding company, Fresh
Express and each of Fresh Express' subsidiaries; Term Loan C has a
security in the assets and stock of Fresh Express and its
subsidiaries, including the Fresh Express trademark, but no new
working capital or other new assets of Fresh Express since its
acquisition last year.
With 2005 sales of $3.9 billion, Chiquita, which is headquartered
in Cincinnati, OH, is one of the largest global producers and
marketers of fresh fruit and vegetables.
CIRTRAN CORP: Posts $277,998 Net Loss in 2006 1st Fiscal Quarter
----------------------------------------------------------------
Cirtran Corporation 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 $277,998 net loss on $1,737,824 of net
sales for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $9,675,502
in total assets, $5,475,582 in total liabilities, and $ 3,165,931
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?a52
Going Concern Doubt
Hansen, Barnett & Maxwell in Salt Lake City, Utah, raised
substantial doubt about CirTran Corporation'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 losses, negative working
capital, and accumulated deficit.
About CirTran Corp
Founded in 1993, CirTran Corp. -- http://www.CirTran.com/-- is
a premier international full-service contract manufacturer of
low to mid-size volume contracts for printed circuit board
assemblies, cables and harnesses to the most exacting
specifications. Headquartered in Salt Lake City, CirTran's
modern 40,000-square-foot non-captive manufacturing
facility -- the largest in the Intermountain Region - provides
"just-in-time" inventory management techniques designed to
minimize an OEM's investment in component inventories, personnel
and related facilities, while reducing costs and ensuring speedy
time-to-market.
CLEAN EARTH: Has Until June 30 to Remove Actions
------------------------------------------------
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 its debtor-affiliate Clean Earth Environmental
Group, LLC, may file notices of removal with respect to pending
court actions.
The Debtors tells the Court that they are parties to numerous
judicial proceedings currently pending in various courts
throughout the U.S. Because of the number of actions involved and
the wide variety of claims, the Debtors require additional time to
determine which, if any, of the actions should be removed and, if
appropriate, transferred to this District.
A full-text copy of a List of Actions is available for free at:
http://ResearchArchives.com/t/s?a5f
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.
CLEARWATER: Moody's Lowers Rating on $13.5 Million Notes to Ba1
---------------------------------------------------------------
Moody's Investors Service downgraded the following notes issued by
Clearwater Funding CBO 2000-A, Ltd.:
* $13,500,000 Class B Floating Rate Senior Subordinated Notes
Due 2012
Prior Rating: Baa2
Current Rating: Ba1
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, as well as the occurrence of asset
defaults and par loss.
COI MIDWEST: Case Summary & 3 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: COI Midwest Investments LLC
900 South Turnbull Canyon Road
City of Industry, California 91745
Bankruptcy Case No.: 06-12329
Chapter 11 Petition Date: June 1, 2006
Court: Central District Of California (Los Angeles)
Judge: Richard M. Neiter
Debtor's Counsel: Ron Bender, Esq.
Levene, Neale, Bender, Rankin & Brill, LLP
10250 Constellation Boulevard, Suite 1700
Los Angeles, California 90067
Tel: (310) 229-1234
Fax: (310) 229-1244
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 3 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
CW Capital Asset Mortgage Unknown
Management, LLC Servicing
Attn: Monique Holland
700 12th Street Northwest
Suite 700
Washington, D.C. 20005
Loeb, Kosacz & Sundberg, LLP Legal Services Unknown
2801 Townsgate Road, Suite 210
Westlake Village, CA 91361
PNC Business Credit Unknown
Attn: David Thayer/1 PNC Plaza
249 5th Avenue, 6th Floor
Pittsburgh, PA 15222
COSINE COMMS: Posts $126,000 Net Loss in First Quarter of 2006
--------------------------------------------------------------
CoSine Communications, Inc., reported a $126,000 net loss for the
three months ended March 31, 2006, in contrast to an $878,000 net
loss for the same period in the prior year.
Revenues for the quarter were $579,000, all of which was from
service. For the three months ended March 31, 2005, revenue was
$897,000, of which 24% was from product sales and 76% was from
service. The decrease in revenue from the three months ended
March 31, 2005 to the three months ended March 31, 2006 is due
primarily to the Company's announcement in September 2004 that it
will lay off all its employees and would no longer offer its
product for sale.
CoSine also offered support services to its existing customers
while they transitioned to other vendor's products. During the
quarter ended March 31, 2006, several customers completed their
transition plans and no longer purchased service contracts from
the Company. The Company expects continued decline in its service
revenues since all its major customers are planning to discontinue
usage of its services in 2006. Cosine's business currently
consists of a service operation provided by a third party
contractor. This service will be offered through Dec. 31, 2006,
depending on customer demand.
At March 31, the Company's balance sheet showed $23,544,000 in
total assets and $1,044,000 in total liabilities.
A full-text copy of the Company's quarterly report, filed with the
Securities and Exchange Commission, is available for free
at http://researcharchives.com/t/s?a47
Going Concern Doubt
As reported in the Troubled Company Reporter on April 6, 2006,
Burr, Pilger & Mayer LLP expressed substantial doubt about
CoSine's ability to continue as a going concern after it audited
the Company's financial statements for the years ended
Dec. 31, 2005 and Dec. 31, 2005. The auditing firm pointed to the
Company's decision to terminate most of its employees and
discontinue production activities in an effort to conserve cash as
well as ongoing evaluation of strategic alternatives.
About CoSine
Based in San Jose, California, CoSine Communications, Inc. (OTC:
COSN.PK) -- http://www.cosinecom.com/-- provides customer support
services for managed network-based Internet protocol and broadband
service providers under contract by a third party.
CWALT INC: Fitch Puts Low-B Ratings on Class B-3 & B-4 Certs.
-------------------------------------------------------------
Fitch rated CWALT, Inc.'s Mortgage Pass-Through Certificates,
Alternative Loan Trust 2006-21CB as:
-- $501.9 million classes A-1 through A-8, X, PO and A-R
certificates (senior certificates) 'AAA'
-- $11.3 million class M-1 'AA'
-- $4.2 million class M-2 'A'
-- $1.8 million class B-1 'BBB+'
-- $1.3 million class B-2 'BBB'
-- $1.8 million class B-3 'BB'
-- $1.3 million class B-4 'B';
The 'AAA' rating on the senior certificates reflects:
* the 4.40% subordination provided by the 2.15% Class M-1;
* the 0.80% Class M-2;
* the 0.35% Class B-1;
* the 0.25% Class B-2;
* the 0.35% privately offered Class B-3;
* the 0.25% privately offered Class B-4; and
* the 0.25% privately offered Class B-5 (not rated by Fitch).
Classes M-1, M-2, B-1, B-2, B-3, and B-4 are rated 'AA', 'A',
'BBB+', 'BBB', 'BB' and 'B' based on their respective
subordination only.
Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults. In addition, the rating also
reflects:
* the quality of the underlying mortgage collateral;
* strength of the legal and financial structures; and
* the master servicing capabilities of Countrywide Home Loans
Servicing LP, rated 'RMS2+' by Fitch, a direct wholly owned
subsidiary of Countrywide Home Loans, Inc.
The certificates represent an ownership interest in a group of
primarily 30-year conventional, fully amortizing mortgage loans.
The pool consists of 30-year fixed rate mortgage loans totaling
$524,999,565 as of the initial cut-off date, May 1, 2006, secured
by first liens on one-to four- family residential properties. The
average loan balance is $205,801.
The mortgage pool, as of the initial cut-off date, demonstrates an
approximate weighted-average original loan-to-value ratio of
71.76%. The weighted average FICO credit score is approximately
719. Cash-out refinance loans represent 35.25% of the mortgage
pool and second homes 4.90%. The states that represent the
largest portion of mortgage loans are:
* California (20.00%),
* Florida (10.17%), and
* Texas (5.37%).
All other states represent less than 5% of the pool as of the cut-
off date.
Approximately 57.19% and 42.81% were originated under CHL's
Standard Underwriting Guidelines and Expanded Underwriting
Guidelines, respectively. Mortgage loans underwritten pursuant to
the Expanded Underwriting Guidelines may have higher loan-to-value
ratios, higher loan amounts, higher debt-to-income ratios and
different documentation requirements than those associated with
the Standard Underwriting Guidelines. In analyzing the
collateral pool, Fitch adjusted its frequency of foreclosure and
loss assumptions to account for the presence of these attributes.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.
DANA CORP: Fortna Demands Debtors' Payment on $257,803 Claim
------------------------------------------------------------
Fortna, Inc. asks the U.S. Bankruptcy Court for the Southern
District of New York to direct Dana Corporation and its debtor-
affiliates to pay its $257,803 administrative expense claim within
five business days upon approval of the request.
Before the Debtors' bankruptcy filing, Fortna agreed to build
certain mezzanine structures for the Debtors' factories,
specifically Dana Corp./Structural Solutions CRP.
Constantine D. Pourakis, Esq., at Stevens & Lee, P.C., in New
York, relates that Fortna made several shipments of steel to the
Debtors, which were received within 20 days before the Debtors'
bankruptcy filing and sold in the ordinary course of the Debtors'
business, satisfying the requirements of Sec. 503(b)(9) of the
Bankruptcy Code.
The value of the shipments aggregate $257,803:
Bill of
Lading No. Shipped Delivered Value
---------- ------- --------- -----
2900D 02/10/06 02/13/06 $31,395
2900D1 02/10/06 02/13/06 26,744
2900E 02/14/06 02/15/06 30,814
2900F 02/16/06 02/20/06 25,000
2900G 02/20/06 02/21/06 30,233
2900H 02/27/06 02/28/06 26,744
2900I 02/21/06 02/22/06 27,907
2900I 02/24/06 02/26/06 31,977
2900J 03/01/06 03/02/06 26,989
Mr. Pourakis tells the Court that as of April 19, 2006, the
Debtors have failed to pay Fortna for the value of goods. The
Mezzanine structures were completed on March 17, 2006, and the
Debtors are currently using the platform structures in the
ordinary course of their business.
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies. Dana employs 46,000 people in 28 countries. Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually. The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors. Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker. Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer. Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of Sept.
30, 2005. (Dana Corporation Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
DANA CORP: Genuine Parts Wants Stay Lifted to Freeze Debt Payment
-----------------------------------------------------------------
Genuine Parts Company asks the U.S. Bankruptcy Court for the
Southern District of New York to lift the automatic stay
to allow it to freeze payment of its debts to Dana Corporation.
Genuine Parts wants to withhold the payments to preserve its
right to set-off for unliquidated indemnification claims that it
holds against Dana.
Genuine Parts is a principal member of the National Automotive
Parts Association, commonly known as "NAPA", and sells automotive
parts bearing the NAPA name through company owned stores and
independent retailers.
Pursuant to various contracts, Genuine Parts agreed to purchase
products from Dana. As of March 3, 2006, Genuine Parts owed
$7,283,481 to Dana.
NAPA has licensed to Dana the right to use and place the NAPA
trademark on product that Dana manufactures and sells to Genuine
Parts. In connection with the trademark license, NAPA and Dana
entered into an Indemnity Agreement on Dec. 15, 2004, in which
Dana agreed to indemnify NAPA and its members, including
Genuine Parts, against liability and losses arising from products
that Dana manufactures and sells under the NAPA name.
William J. Barrett, Esq., at Barack Ferrazzano Kirschbaum Perlman
& Nagelberg LLP, in Chicago, Illinois, tells the Court that four
personal injury claims have been asserted against Genuine Parts
based on Dana's product.
Genuine Parts asserts a right of indemnification with respect to
each claim:
a. Chevron U.S.A., Inc.'s claim pending in the United States
District Court for the District of Oregon, for contribution
and indemnity relating to personal injuries and wrongful
death suffered by Roxanne Smith allegedly resulting from an
allegedly defective hydraulic hose manufactured by Dana.
The claim is in the early pre-trial phase;
b. Marsha and John VanSteenburgh's claims for alleged massive
personal injuries allegedly resulting from the failure of
the right front ball joint on the claimants' van. Genuine
Parts believes that Dana manufactured the ball joint.
Genuine Parts has already incurred approximately $9,000 in
defending the claim;
c. James Heggenstaller's claim for injuries arising from a
pressure hose manufactured by Dana. Genuine Parts has
settled the claim for $15,000. In addition, Genuine Parts
incurred $8,204 in expenses in defending the claim; and
d. Robert Girouard's claim for injuries arising from brake
products manufactured by Dana that contained asbestos.
Genuine Parts settled the claim for $50,000. In addition,
Genuine Parts incurred $93,703 in expenses in defending the
claim.
Genuine Parts is also concerned that additional personal injury
claims will be likely asserted against Genuine Parts on account
of Dana's products before the expiration of all applicable
statutes of limitations.
Mr. Barrett asserts that lifting the automatic stay is necessary
because, at present, Genuine Parts' claims against Dana under the
Indemnity Agreement are largely unliquidated until the personal
injury claims are resolved.
In the alternative, Genuine Parts asks the Court to lift the
automatic stay to set off against amounts it owes to Dana:
-- the expenses and losses it had already incurred for which
it is entitled to indemnification under the Indemnity
Agreement, which amounts to $175,907 as of Feb. 28,
2006; and
-- its estimated exposure for claims that are or will be
subject to the Indemnity Agreement.
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies. Dana employs 46,000 people in 28 countries. Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually. The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors. Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker. Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer. Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of Sept.
30, 2005. (Dana Corporation Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
DANA CORP: Component Wants Debtors to Decide on Purchase Orders
---------------------------------------------------------------
Component Bar Products, Inc., supplies hose fittings to Debtor
Coupled Products, Inc., pursuant to two blanket purchase orders,
as amended from time to time.
Dana Corporation and its debtor-affiliates supply modules, systems
and components for original equipment manufacturers. In
accordance with the procedures approved by the U.S. Bankruptcy
Court for the Southern District of New York for paying Essential
Supplier Claims, the Debtors' agreements with their OEM customers
require the Debtors to complete a Production Part Approval Process
to obtain approval for parts to be integrated into their products.
Keith D. Price, Esq., at Sandberg, Phoenix & von Gontard, P.C.,
in St. Louis, Missouri, notes that, as part of the PPAP Process,
the Debtors may be required to undertake a rigorous testing
program with respect to the component parts utilized in the
manufacture of their modules, systems and components.
To continue performing its obligations under the Purchase Orders
and meet the "just-in-time" requirements of the Debtors and their
customers, Component Bar is required to dedicate about one-third
of its total machinery to exclusively manufacture hose fittings
since the Debtors are its largest customers based on annual
sales, Mr. Price avers. Component Bar supplies the Debtors with
approximately $4,000,000 in parts annually.
According to Mr. Price, re-tooling of Component Bar's machines to
manufacture hose fittings for other customers cost $2,500 to
$50,000 per re-tooling.
Thus, if the Debtors were to stop requesting shipment of the
parts covered by the Purchase Orders, Component Bar will incur
substantial expenses due to the down-time of the machinery
currently dedicated to the manufacture of the Debtors' parts.
Furthermore, due to the expensive retooling process, Component
Bar cannot seek new customers to fill any gaps that may occur in
the Debtors' ordering because of the substantial expense.
The Debtors have machinery in Upper Sandusky, Ohio, capable of
manufacturing the hose fittings that Component Bar supplies, Mr.
Price notes. He avers that the Debtors could be undergoing the
PPAP Process to obtain approval to manufacture the hose fittings
at their own machining location so they can reject the Purchase
Orders on receipt of the PPAP approval.
Mr. Price also notes that in an affidavit submitted in support of
certain of Dana's First Day Motions, Paul E. Miller, vice
president of Purchasing of Dana's Supply Chain Management Group,
said, "[I]t would certainly be the Debtors' preference not to
spend a single dime to satisfy prepetition supplier claims."
As of March 24, 2006, the Debtors owe Component Bar $715,916 for
hose fittings shipped more than 20 days before the Mar. 3, 2006.
Based in part of the Debtors' cavalier attitude toward their
suppliers as well as Component Bar's lack of confidence in the
Debtors' ongoing financial condition, Component Bar desires to
terminate its business relationship with the Debtors.
Pursuant to Section 365 of the Bankruptcy Code and Rule 6006 of
the Federal Rules of Bankruptcy Procedure, Component Bar asks the
Court to compel the Debtors to promptly assume or reject the
Purchase Orders.
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies. Dana employs 46,000 people in 28 countries. Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually. The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors. Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker. Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer. Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of Sept.
30, 2005. (Dana Corporation Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
DOANE PET: Prices Tender Offers for $365 Million Senior Notes
-------------------------------------------------------------
Doane Pet Care Company reported that, as of 2:00 p.m., prevailing
eastern time, on May 26, 2006, in connection with its tender
offers and consent solicitations for any and all of its $213
million aggregate principal amount of 10-3/4% Senior Notes due
2010 and $152 million aggregate principal amount of 10-5/8% Senior
Subordinated Notes due 2015, holders who have validly tendered and
not withdrawn their Notes at or prior to 5:00 p.m., prevailing
eastern time, on May 25, 2006, are eligible to receive $1,087.80
for each $1,000 principal amount of the 2010 Notes and $1,243.33
for each $1,000 principal amount of the 2015 Notes.
The Total Consideration includes a consent payment equal to $30
per $1,000 principal amount of Notes. Holders who tender their
Notes after 5:00 p.m., prevailing eastern time, on the Consent
Date will not be eligible to receive the Consent Payment. Holders
who have validly tendered their Notes after 5:00 p.m., prevailing
eastern time, on the Consent Date but at or prior to 5:00 p.m.,
prevailing eastern time, on June 12, 2006 (unless either or both
tender offers are earlier terminated or extended) are eligible to
receive $1,057.80 for each $1,000 principal amount of the 2010
Notes and $1,213.33 for each $1,000 principal amount of the 2015
Notes.
The foregoing prices are based on Reference Yields of 5.017% and
4.937% for the 2010 Notes and 2015 Notes, respectively, and Fixed
Spreads of 50 basis points for both the 2010 Notes and 2015 Notes.
Doane will accept the tendered Notes for purchase promptly after
the Expiration Date, provided that the conditions to the tender
offers, including the completion of the acquisition by Mars,
Incorporated of Doane's parent corporation, Doane Pet Care
Enterprises, Inc., have been satisfied or waived.
Doane has retained Lehman Brothers Inc. to serve as the Lead
Dealer Manager for the tender offers and the Lead Solicitation
Agent for the consent solicitations. CIBC World Markets Corp. and
Harris Nesbitt Corp. have been retained to serve as Co-Dealer
Managers and Co-Solicitation Agents, and D. F. King & Co., Inc.
has been retained to serve as the Tender Agent and Information
Agent for the tender offers and consent solicitations. Requests
for documents may be directed to:
D. F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
Telephone (800) 487-4870 or (212) 269-5550
Questions regarding the tender offers may be directed to:
Lehman Brothers Inc.
Telephone at (800) 438-3242 or (212) 528-7581
About Doane Pet Care
Headquartered in Brentwood, Tennessee, Doane Pet Care Company --
http://www.doanepetcare.com/-- is the largest manufacturer of
private label pet food and the second largest manufacturer of dry
pet food overall in the United States. The Company sells to
approximately 550 customers around the world and serves many of
the top pet food retailers in the United States, Europe and Japan.
The Company offers its customers a full range of pet food products
for both dogs and cats, including dry, semi-moist, soft-dry, wet,
treats and dog biscuits.
Doane Pet Care Company's 10-5/8% Senior Subordinated Notes due
2015 also carry Moody's Investors Service's Caa1 rating.
* * *
As reported in the Troubled Company Reporter on April 28, 2006,
Standard & Poor's Ratings Services placed its ratings on Doane Pet
Care Co. on CreditWatch with positive implications. This included
the 'B+' corporate credit rating and other ratings on the company.
Total debt outstanding at Dec. 31, 2005, was about $564 million.
DONALD CREECH: List of 13 Largest Unsecured Creditors
-----------------------------------------------------
Donald Clyde Creech and Bonita Bingham Creech filed the list of
their 13 largest unsecured creditors with the U.S. Bankruptcy
Court for the Eastern District of Kentucky, disclosing:
Entity Nature of Claim Claim Amount
------ --------------- ------------
National City Bank Potential $410,000
c/o Scott T. Rickman Esq. Deficiency Balance
Morgan & Pottinger from Funeral
133 West Short Street Home Debt
Lexington, KY 40507
Real Estate - $437,927
2102 Cumberland
Avenue
Real Estate - $345,654
Haywood Road
Middlesboro, KY
Internal Revenue Service Unsecured Priority $910,000
Special Procedures Tax Claims, Personal
P.O. Box 1706 Tax Liability
Louisville, KY 40201
Charles E. Sigmon, Sr. Loan Guarantee $300,000
c/o Tracey Wise, Esq.
219 North Upper Street
Lexington, KY 40507
Commercial Bank Real Estate $65,501
Trade Debt $34,194
Unsecured Loan $31,604
Kentucky Revenue Cabinet Unsecured Priority $60,000
Ford Motor Credit Freestar - Potential $15,523
Deficiency balance
From Funeral Home Debt
Navigator - Potential $18,553
Deficiency balance
From Funeral Home Debt
Batesville Casket Co. Collection Suit $19,668
MBNA America Open Credit Card $18,174
Account
Citi Cards Open Credit Card $11,786
Account
Bright Corp. Vendors Debt $1,473
American Express Open Credit Card $1,441
Account
City of Middlesboro Potential Deficiency Unknown
Owed by Funeral Home
Dodge Co. Trade Debt $405
Donald Clyde Creech and Bonita Bingham Creech filed for Chapter 11
protection on April 21, 2006 (Bankr. E.D. Ky. Case No. 06-60173).
John Thomas Hamilton, Esq., at Gess Mattingly & Atchison, P.S.C.,
represents the Debtors. Donald Clyde Creech is the president and
owner of Creech Funeral Home, Inc., which filed for chapter 11
protection on February 24, 2006 (Bankr. E.D. Ky. Case No. 06-
60058). When the Debtors filed for protection from their
creditors, they listed estimated assets of $100,000 to $500,000,
and estimated debts of $1 million to $10 million.
DRESSER INC: Amends Solicitation Terms for 9-3/8% Sr. Sub. Notes
----------------------------------------------------------------
Dresser, Inc. is extending the expiration time of its consent
solicitation from the holders of its outstanding 9-3/8% Senior
Subordinated Notes due 2011 from May 26, 2006, to 5 p.m., New York
City time, on May 31, 2006, unless further extended or terminated
by Dresser.
The Company, also, is amending the terms of the consent
solicitation pursuant to a Supplement to the Consent Solicitation
Statement, dated May 26, 2006.
The Supplement seeks an amendment and waiver of certain reporting
requirements related to the company's delay in issuing its 2005
annual and 2006 quarterly financial statements.
The Supplement also includes these additional terms:
-- An increase in the consent payment offered by the company
from $1.25 to $2.50 per $1,000 principal amount;
-- A 0.50% increase in the interest rate on the notes until the
company files certain periodic reports required under the
indenture's reporting covenant;
-- A one-time payment of 0.50% of the outstanding principal
amount of notes to holders of record on Dec. 31, 2006, if
the company has not filed its financial statements for the
quarters ended March 31, June 30, and Sept. 30, 2006, on or
before Dec. 31, 2006, in which case the company would have
until March 31, 2007, to make these filings;
-- A 0.25 % interest rate increase for any time period during
which the notes are rated CCC+ or lower by Standard &
Poor's; and
-- An additional 0.25 % interest rate increase for any time
period during which the notes are rated Caa1 or lower by
Moody's Investors Service.
All other aspects of the consent solicitation remain unchanged and
in effect.
The consent solicitation is being made solely by the Consent
Solicitation Statement dated May 9, 2006, as amended by the
Supplement.
About Dresser, Inc.
Based in Addison, Texas, Dresser, Inc. -- http://www.dresser.com/
-- designs, manufactures and markets equipment and services sold
primarily to customers in the flow control, measurement systems,
and compression and power systems segments of the energy industry.
The Company has a comprehensive global presence, with over 8,500
employees and a sales presence in over 100 countries worldwide.
* * *
As reported in the Troubled Company Reporter on March 30, 2006,
Moody's Investors Service placed the Ba3 Corporate Family Rating;
the Ba3 rated senior secured Tranche C term loan maturing 2009;
the B1 rated senior unsecured term loan maturing 2010; and the B2
rated senior subordinated notes maturing 2011 for Dresser, Inc.,
under review for possible downgrade as a result of the company's
inability to file its 2005 Annual Report on Form 10-K by the
March 31, 2006, requirement.
DYNEGY INC: Completes Redemption of Series C Conv. Pref. Stock
--------------------------------------------------------------
Dynegy Inc. redeemed all of the outstanding shares of its Series C
Convertible Preferred Stock, which were held by Chevron U.S.A.
Inc., a wholly owned subsidiary of Chevron Corporation (NYSE:CVX).
After giving effect to the redemption, CUSA continues to hold 97
million shares of Dynegy's Class B common stock, which represents
an approximate 20% ownership interest in Dynegy based on the
outstanding shares of Dynegy's common stock as of May 19, 2006.
In order to redeem the Series C preferred, Dynegy paid CUSA
$400 million in cash, plus accrued and unpaid dividends totaling
$6.3 million. The company used approximately $176 million in net
proceeds from an equity offering of 40.25 million shares of its
Class A common stock that closed on May 26, 2006, (including net
proceeds of $23 million from the underwriters' exercise of their
option to purchase an additional 5.25 million shares), with the
balance funded from cash on hand.
"The redemption of the Series C preferred is accretive to all
shareholders in cash flow and earnings per share through the
elimination of the associated $22 million annual preferred
dividend and the significant reduction in the number of diluted
shares outstanding," Bruce A. Williamson, Chairman and Chief
Executive Officer of Dynegy Inc, said.
"In addition, by redeeming the Series C preferred at par, we have
effectively addressed the last remaining security in our capital
structure that had a coupon and also participated in the upside of
our equity. As a result, under this simplified capital structure,
all of the economic benefits beyond debt service from our
continued strong power generation performance, higher commodity
prices and future growth opportunities will now flow directly to
our common stockholders."
Closes $150 Million Term Loan Facility
Also, Dynegy Holdings Inc. closed a $150 million term loan
facility that provides an interim source of liquidity. The term
loan facility is structured as a new tranche under DHI's existing
fourth amended and restated credit agreement. The term loan
facility matures on the earlier of five business days after the
consummation of the previously announced sale of Dynegy's
Rockingham Power Generation Facility and Jan. 31, 2012. DHI
intends to repay the new term loan facility with proceeds from the
Rockingham sale, which is expected to close before the end of
2006, subject to receipt of required regulatory approvals and
other closing conditions. The lead arrangers for the facility
were J.P. Morgan Securities Inc. and Lehman Brothers Inc.
About Dynegy Inc.
Headquartered in Houston, Texas, Dynegy Inc. (NYSE:DYN) --
http://www.dynegy.com/-- produces and sells electric energy,
capacity and ancillary services in key U.S. markets. The
company's power generation portfolio consists of more than 12,800
megawatts of baseload, intermediate and peaking power plants
fueled by a mix of coal, fuel oil and natural gas.
* * *
As reported in the Troubled Company Reporter on April 11, 2006,
Moody's Investors Service assigned a Ba3 rating to Dynegy Holdings
Inc.'s $600 million senior secured bank facility. Moody's says
the rating outlook is stable.
EASY GARDENER: Declares Green Thumb as Highest Bidder at $60.5MM
----------------------------------------------------------------
Easy Gardener Products, Ltd., completed the auction for the sale
of all of its assets pursuant to an order of the U.S. Bankruptcy
Court for the District of Delaware.
The highest bidder was Green Thumb Acquisition Corporation, an
affiliate of Bayside Capital, at a purchase price of approximately
$60.5 million, subject to adjustments for certain fees to be paid.
The agreement with GTAC is subject to limited, customary
conditions to closing. The purchase price consists of:
* $23.475 million,
* plus the principal and interest owed to the Company's senior
secured revolving and term lenders,
* minus certain fees to be paid.
Bayside Capital is an affiliate of H.I.G. Capital, an investment
firm that manages more than $2.5 billion in invested capital and
has invested in over 40 portfolio companies.
The Company intends to use the proceeds of the sale of its assets
to repay 100% of the outstanding principal and unpaid interest due
to the Company's senior secured revolving and term lenders at the
closing of the sale.
The Company expects the balance of the purchase price to be used
to pay, upon confirmation of the plan, amounts owed to holders of
two subordinated promissory notes issued by the Company in the
aggregate principal amount of $4.275 million, plus accrued
interest of $1 million, and, that after paying transaction and
other fees estimated to be between $3.1 million and $4.3 million,
there will be between $15.1 million and $13.9 million remaining
for distribution to holders of the Company's 9.4% Cumulative
Preferred Trust Securities due April 15, 2028 (estimated to be
between approximately $6.25 and $5.75 per Trust Preferred Share).
The amount ultimately paid to the holders of the Trust Preferred
Shares will depend upon several contingencies, including court
approval of the sale scheduled for June 2, 2006, the amount of
transaction and other fees actually incurred in connection with
the sale and the chapter 11 process. No funds will be available
for payment to the Company's common equity securities.
Headquartered in Waco, Texas, Easy Gardener Products, Ltd. --
http://www.easygardener.com/-- manufactures and markets a broad
range of consumer lawn and garden products, including weed
preventative landscape fabrics, fertilizer spikes, decorative
landscape edging, shade cloth and root feeders, which are sold
under various recognized brand names including Easy Gardener,
Weedblock, Jobe's, Emerald Edge, and Ross. The Company and four
of its affiliates filed for bankruptcy on April 19, 2006 (Bankr.
D. Del. Case Nos. 06-10393 to 06-10397). James E. O'Neill, Esq.,
Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at
Pachulski Stang Ziehl Young Jones & Weintraub LLP represent the
Debtors in their restructuring efforts. Young Conaway Stargatt &
Taylor, LLP, represents the Official Committee of Unsecured
Creditors. When the Debtors filed for bankruptcy, they reported
assets amounting to $103,454,000 and debts totaling $107,516,000.
ENRON CORP: Vinson & Elkins Will Pay Enron $30 Million in Cash
--------------------------------------------------------------
Enron Corp. reached an agreement with Vinson & Elkins LLP to
settle all claims in connection with the Enron Bankruptcy Estate.
According to the terms of the agreement, Vinson & Elkins will pay
Enron $30 million in cash, and waive its claims for prior services
of approximately $3.9 million against the Estate.
"We are pleased with this settlement, and remain focused on
continuing to resolve remaining claims with major financial
institutions directly involved in Enron's collapse," John J. Ray
III, Enron's President and Board Chairman said.
The settlement remains subject to the approval of the United
States Bankruptcy Court for the Southern District of New York.
McKool Smith, P.C, represents Enron in this matter.
Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on Dec. 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.
EUROGAS INC: March 31 Balance Sheet Upside Down by $16.5 Million
----------------------------------------------------------------
Eurogas 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 $323,902 net loss on $613,579 revenues
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $3,163,630
in total assets and $18,097,976 in total liabilities, resulting in
a $16,523,424 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $2,564 in total current assets available to pay
$18,097,976 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?a50
As reported in the Troubled Company Reporter on Sept. 21, 2005,
The Company reported an accumulated deficit of $165,014,474
through June 30, 2005. For the years ended Dec. 31, 2004 and
2003, the Company's had:
* no revenue,
* losses from operations, and
* negative cash flows from operating activities.
About Eurogas Inc.
Eurogas Inc. is primarily engaged in the acquisition of rights to
explore for and exploit natural gas, coal bed methane gas, crude
oil, talc and other minerals. The Company has acquired interests
in several large exploration concessions and are in various stages
of identifying industry partners, farming out exploration rights,
undertaking exploration drilling, and seeking to develop
production.
FDL INC: Committee Wants Hamernik LLC as Insolvency Accountant
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in FDL,
Inc.'s chapter 11 case asks the U.S. Bankruptcy Court for the
Southern District of Indiana for permission to employ Hamernik,
LLC, as its insolvency accountant.
The Committee believes Hamernik is qualified to represent them
because of the firm's extensive experience in bankruptcy,
insolvency, and restructuring situations.
Hamernik is expected to analyze, give advice, and provide possible
testimony regarding the Debtor's insolvency, including, but not
limited to:
a) valuations of assets;
b) examinations of avoidance actions;
c) review of Debtor's financial statements; and
d) investigation of allegations concerning excessive
distributions of corporate assets to insiders.
David Hamernik, a partner at Hamernik LLC, discloses that the
Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Mr. David Hamernik $285
Associates $165
Mr. Hamernik assures the Court that his firm does not hold any
interest materially adverse to the Debtor's estate and is
"disinterested" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in Kokomo, Indiana, FDL, Inc., manufactures office
and fast food metal furniture. The company filed for Chapter 11
protection on March 24, 2006 (Bankr. S.D. Ind. Case No. 06-01222).
Deborah Caruso, Esq., and Erick P. Knoblock, Esq., at Dale & Eke,
P.C., represent the Debtor. Elliott D. Levin, Esq., at Rubin &
Levin, represents the Official Committee of Unsecured Creditors.
When the Debtor filed for protection from its creditors, it did
not state its assets but estimated debts between $10 million and
$50 million.
FIRSTLINE CORP: Committee Asks Court to Appoint Ch. 11 Trustee
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in
FirstLine Corporation's Chapter 11 case, asks the U.S. Bankruptcy
Court for the Middle District of Georgia to appoint a chapter 11
trustee.
The Committee cited these events as basis for its request:
(a) bidding procedures "fiasco" and the Debtor's loan defaults;
(b) the intent of Donald J. Murphy, the Debtor's sole
shareholder and sole director, to be part of a "joint
venture" that will submit a bid to acquire the Debtor's
assets of the Debtor;
(c) the Debtor's failure to obey court orders;
(d) the Debtor's failure to cooperate with the Committee;
(e) the utter waste engendered by the Debtor's actions and
inactions;
(f) the Debtor has not yet filed any of the required monthly
operating reports;
(g) the fact that for the past two years the Debtor had
multiple Chief Financial Officers (including a CFO employed
postpetition for only a few weeks) and Chief Restructuring
Officers, evidencing a great deal of instability, largely
attributable to difficulty in dealing with the Debtor's
President.
The "Fiasco" and the Default
Todd C. Meyers, Esq., at Kilpatrick Stockton LLP, in Atlanta,
Georgia, reminds the Court that in connection with the
postpetition financing that the Debtor obtained from Wells
Fargo Bank, National Association, the Debtor specifically agreed
and committed to conduct an auction for the sale of its business
which produces an acceptable purchaser on or before July 17, 2006,
and which closes on or before July 31, 2006.
As part of the sale process to which it committed, the Debtor was
required to file a motion for approval of bidding procedures. The
Debtor was supposed to circulate proposed bid procedures in
advance of the extended April 19 deadline for the Committee's
review, comments, and input. The Debtor failed to do so, Mr.
Meyers tells the Court.
The Debtor also failed to file the Bidding Procedures Motion by
the April 19 deadline as required by the DIP Credit Agreement and
the DIP Financing Final Order, and as a result, the Debtor was in
default. Because of this, Wells Fargo was entitled to declare the
obligations under the DIP Loan due and payable and to exercise all
rights and remedies available to it under the DIP Credit
Agreement, including ceasing funding the Debtor's business
operations and potentially foreclosing on all of the Debtor's
assets. Fortunately, and at the urging of the Committee, the
Debtor was able to obtain a waiver of that default.
After several extensions, the Debtor filed the Bidding Procedures
Motion, which the Court ultimately denied. By failing to obtain
approval of the bidding procedures by May 4, 2006, the Debtor is
in default under the DIP Credit Agreement with Wells Fargo.
Likely Unfair Sale Process
Mr. Meyers asserts that allowing Mr. Murphy to place a bid for the
Debtor's assets while he is in control would tip the scale to his
favor. A chapter 11 trustee is necessary, if for no other reason
and there are many, to ensure the trust of creditors and potential
purchasers and the integrity of the sale process, Mr. Meyers
contends.
Headquartered in Valdosta, Georgia, FirstLine Corporation --
http://www.firstlinecorp.com/-- supplies home-building and
construction materials. The company filed for chapter 11
protection on Mar. 6, 2006 (Bankr. M.D. Ga. Case No. 06-70145).
Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represents the
Debtor in its restructuring efforts. Todd C. Meyers, Esq., at
Kilpatrick Stockton LLP represent the Official Committee of
Unsecured Creditors. As of Jan. 31, 2006, the Debtor reported
assets totaling $37,061,890 and debts totaling $26,481,670.
FIVECAP INC: List of 12 Largest Unsecured Creditors
---------------------------------------------------
FiveCAP, Inc. filed the list of its 12 largest unsecured creditors
with the U.S. Bankruptcy Court for the Western District of
Michigan, disclosing:
Entity Claim Amount
------ ------------
Department of Health and $214,810
Human Services
Regional Administrator
233 North Michigan Avenue
Suite 400
Chicago, IL 60601-5519
Tom Belongia $150,438
Teamsters Local #406
3315 Eastern Avenue Southeast
Grand Rapids, MI 49508
Verna Fugere $140,622
Teamsters Local #406
3315 Eastern Avenue Southeast
Grand Rapids, MI 49508
Dale R. Smith $79,630
Florence Feliczak $71,769
Karen A. Gajewski $68,042
Melissa A. Kukla $31,306
Amanda Lange $14,266
Jane E. Meyers $12,944
David Monton $9,053
Art Burkel $3,591
Bruce Kent $3,115
Based in Scottville, Michigan, FiveCAP, Inc. --
http://www.fivecap.org/-- is one of 31 Community Action Agencies
in the State of Michigan. FiveCAP acts as an advocate, catalyst,
and administrator of 40 programs to promote individual and family
self-sufficiency, utilizing federal, state, and local resources.
The Company filed for chapter 11 protection on April 20, 2006
(Bankr. W.D. Mich. Case No. 06-01749). Perry G. Pastula, Esq., at
Dunn Schouten & Snoap, P.C., represents the Debtor. When the
Debtor filed for protection from its creditors, it listed assets
of $677,000, and debts of $1,384,032.
GEMSTONE CDO: Moody's Puts Ba2 Rating on $10 Mil. Class E Notes
---------------------------------------------------------------
Moody's Investors Service assigned the following ratings to eight
classes of Notes issued by Gemstone CDO V, Ltd.:
* Aaa to the $243,800,000 Class A-1 Floating Rate Notes;
* Aaa to the $152,200,000 Class A-2 Floating Rate Notes;
* Aaa to the $61,000,000 Class A-3 Floating Rate Notes;
* Aaa to the $50,000,000 Class A-4 Floating Rate Notes;
* Aa2 to the $67,500,000 Class B Floating Rate Notes;
* A2 to the $21,700,000 Class C Floating Rate Deferrable
Interest Notes;
* Baa2 to the $37,400,000 Class D Floating Rate Deferrable
Interest Notes Due; and
* Ba2 to the $10,100,000 Class E Floating Rate Deferrable
Interest Notes.
The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to Noteholders, relative to the promise of receiving the
present value of such payments. Moody's also analyzed the risk of
diminishment of cashflows from the underlying portfolio due to
defaults, the characteristics of these assets and the safety of
the transaction's legal structure.
The collateral of Gemstone CDO V, Ltd. consists primarily of
asset-backed securities and synthetic securities. The Collateral
Manager is HBK Investments L.P., a Delaware limited partnership.
GLACIER FUNDING: Moody's Rates $4 Million Class E Notes at Ba1
--------------------------------------------------------------
Moody's Investors Service assigned the following ratings to six
classes of Notes issued by Glacier Funding CDO IV, Ltd:
* Aaa to the $296,000,000 Class A-1 First Priority Senior
Secured Floating Rate Notes Due 2045;
* Aaa to the $40,000,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes Due 2045;
* Aa2 to the $23,000,000 Class B Third Priority Senior
Secured Floating Rate Notes Due 2045;
* A2 to the $14,000,000 Class C Mezzanine Secured
Deferrable Floating Rate Notes Due 2045;
* Baa2 to the $12,000,000 Class D Mezzanine Secured
Deferrable Floating Rate Notes Due 2045 and
* Ba1 to the $4,000,000 Class E Mezzanine Secured
Deferrable Floating Rate Notes Due 2045.
The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to Noteholders, relative to the promise of receiving the
present value of such payments. Moody's also analyzed the risk of
diminishment of cashflows from the underlying portfolio due to
defaults, the characteristics of these assets and the safety of
the transaction's legal structure.
The collateral of Glacier Funding CDO IV, Ltd. consists primarily
of residential mortgage-backed securities, commercial mortgage-
backed securities, other asset-backed securities and synthetic
securities. The Collateral Manager is Terwin Money Management LLC.
GLEACHER CBO: Moody's Places Junk Rated Class D-1 Notes on Watch
----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of the following
classes of notes issued by Gleacher CBO 2000-1 Ltd., a
collateralized debt obligation issuer:
(1) The $276,000,000 Senior Secured Class A Notes
Prior Rating: Aa3 (on watch for possible upgrade)
Current Rating: Aaa
(2) The $33,000,000 Senior Secured Class B-1 Notes
Prior Rating: Baa1 (on watch for possible upgrade)
Current Rating: Aa3 (on watch for possible upgrade)
(3) The $10,000,000 Senior Secured Class B-2 Notes
Prior Rating: Baa1 (on watch for possible upgrade)
Current Rating: Aa3 (on watch for possible upgrade)
Moody's also placed the ratings of these classes of notes on its
watchlist for possible upgrade:
(4) The $13,000,000 Secured Class C Notes
Prior Rating: B2
Current Rating: B2 (on watch for possible upgrade)
(5) The $21,000,000 Secured Class D-1 Notes
Prior Rating: Ca
Current Rating: Ca (on watch for possible upgrade)
(6) The $5,000,000 Secured Class D-2 Notes
Prior Rating: Ca
Current Rating: Ca (on watch for possible upgrade)
The rating actions reflect the improvement in the credit quality
of the transaction's underlying collateral portfolio, consisting
primarily of corporate bonds. In particular, (1) the liquidation
at a high recovery rate of defaulted and Ca/C-rated assets, (2)
the pending amortization of the interest rate swap, which is
currently a liability to the deal, and (3) the ongoing delevering
of the transaction, provided a substantial basis for today's
rating actions, according to Moody's.
GLOBAL HOME: Can Continue Union Pension and Profit Sharing Plans
----------------------------------------------------------------
Global Home Products, LLC and its debtor-affiliates obtained
authority on a final basis from the U.S. Bankruptcy Court for the
District of Delaware to continue:
a) contributions to its union pension;
b) matching pension contributions to the 401(k) plan; and
c) contributions to its profit sharing plan.
401(K) Retirement Plan
The Debtors offer a 401(k) retirement plan administered by
JP Morgan for non-union employees and U.S. union employees.
The Debtors match employee contributions to the 401(k) Plan dollar
for dollar up to the first 3% of the employee contributions, and
then .50 cents per dollar for the next 2% of employee
contributions.
The monthly contributions to the 401(k) Plan, including matching
contributions is approximately $150,000 per month. For the 2005
calendar year, the Debtors transferred approximately $3.4 million
in contributions for participating employees to the 401(k) Plan
and approximately $1.8 million in matching contributions made by
the Debtors.
The Debtors estimate that approximately $120,000 in withholding
obligations under the 401(k) Plan remain unpaid as of April 10,
2006. In this regard, the Debtors requested authority to continue
its existing 401(k) Plan, including the ability to continue to
make matching contributions under the 401(k) Plan in the ordinary
course of business.
Profit Sharing Plan
Full-time non-union employees are eligible to participate in the
Debtors' profit sharing plan if they have been employed with the
company through the end of the profit sharing plan year. Part
time non-union employees who work at least 1,000 hours per plan
year are also eligible to participate in the Profit Sharing Plan.
Under the Profit Sharing Plan, the Debtors may, in their
discretion, contribute up to 2% of their annual net profits to
participants in the Profit Sharing Plan.
As of Apr. 10, 2006, the Debtors have not accrued any obligations
to any employees with respect to its Profit Sharing Plan, and,
consequently, do not need the authority to make any contributions
to the Profit Sharing Plan. However, the Debtors requested
authority, but not the obligation, to continue the Profit Sharing
Plan in the ordinary course of their business.
The Debtors' U.S. union employees receive a defined benefit
pension pursuant to a plan maintained by the Debtors in accordance
with the terms of the different union agreements. The Debtors
next annual contribution to the Pension Plan will be in September
2006 in an amount of approximately $2.2 million.
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.
GLOBAL HOME: Hires Houlihan Lokey as Investment Banker
------------------------------------------------------
Global Home Products, LLC, and its debtor-affiliates obtained
authority from the U.S. Bankruptcy Court for the District of
Delaware to employ Houlihan Lokey Howard & Zukin Capital, Inc., as
their investment banker, nunc pro tunc to Apr. 10, 2006.
As reported in the Troubled Company Reporter on May 22, 2006,
the Debtors expect Houlihan Lokey to:
a. assist in the review of the Burnes Group's financial
position, financial history, operations, competitive
environment, and assets to assist the Debtors in
determining the best means and timing to effect a
transaction with a potential acquirer and strategic
partner, including any of the Debtors' current and former
creditors, and any of the Debtors' affiliates, provided
that neither Cerberus Capital Management nor any of its
affiliates will be deemed to be an acquirer;
b. assist in the development of a list of potential acquirers
and interact with potential acquirers in order to create
interest in one or more transactions;
c. assist in the development of a coordinated sales process;
d. assist in the preparation, with substantial input from the
Debtors, of an offering memorandum to provide to, and
discuss with potential acquirers;
e. actively participate in the negotiating process regarding
a transaction, and coordinate the process with the Debtors
and its other advisors, and otherwise reasonably assist
the Debtors in effectuating each transaction; and
f. assist in the development and presentation of the
Restructuring Alternatives Analyses, as requested by the
Debtors.
The Debtors told the Court that prior to filing for bankruptcy,
they paid the Firm a US$150,000 retainer. The Firm will receive
a monthly fee of US$75,000 for the Restructuring Alternatives
Analysis services that it will perform. Additionally, the
Debtors will pay the Firm an initial amount of US$1 million upon
the consummation of a transaction with an acquirer, plus
incremental amounts according to the base value of the
transaction.
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.
GLOBAL MATRECHS: March 31 Balance Sheet Upside Down by $10.5 Mil.
-----------------------------------------------------------------
Global Matrechs, Inc., filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 17, 2006.
The Company reported a $831,342 net loss on $125 of revenues for
the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $550,345 in
total assets, $7,089,263 in total liabilities, and $4,035,159 in
convertible preferred stock, resulting in a $10,574,077
stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $248,396 in total current assets available to pay
$7,089,263 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?a55
Going Concern Doubt
Sherb & Co., LLP, in Boca Raton, Florida, raised substantial doubt
about Global Matrechs, 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, negative cash
flows and working capital, stockholders' and accumulated
deficiencies.
About Global Matrechs
Global Matrechs, Inc. -- http://www.globalmatrechs.com/--
operates in two major segments:
a) Licensed Technologies Sector - which consists of the
marketing and sales of the technologies licensed from
Eurotech; and
b) Specialty Lighting Subsidiary - which consists of the
design, development, manufacture and sales of specialty
lighting and architectural products acquired in the
merger with True To Form Ltd in Dec. 2004.
The Company is targeting the pursuit of the Homeland Security
market with both segments.
GTC TELECOM: Posts $819,806 Net Loss in 2006 1st Fiscal Quarter
---------------------------------------------------------------
GTC Telecom 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 $819,806 net loss on $1,617,386 of revenues
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $977,701 in
total assets and $5,029,030 in total liabilities, resulting in a
$4,103,081 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $480,073 in total current assets available to pay
$4,950,131 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?a3a
Going Concern Doubt
As reported in the Troubled Company Reporter in Nov. 30, 2005,
Squar, Milner, Reehl & Williamson, LLP, has expressed substantial
doubt about GTC Telecom Corp.'s ability to continue as a going
concern after it audited the Company's financial statements for
the years ended June 30, 2005, and 2004.
About GTC Telecom
GTC Telecom (OTCBB: GTCC) -- http://www.gtctelecom.com/-- is a
national communications provider offering telecommunication
services such as local and long distance telephone services,
Internet related services, and business process outsourcing
services. The Company has focused on selling telecommunications
products, including GTC Telecom Long Distance, GTC Internet, GTC
Teleconferencing, Calling Planet and ecallingcards.com pre-paid
calling cards.
GULF COAST: Files Schedules of Assets and Liabilities
-----------------------------------------------------
Gulf Coast Holdings, Inc., delivered its Schedules of Assets and
Liabilities to the U.S. Bankruptcy Court for the Northern District
of Texas, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $2,900,000
B. Personal Property $15,358,576
C. Property Claimed
as Exempt
D. Creditors Holding $13,985,000
Secured Claims
E. Creditors Holding $2,484
Unsecured Priority Claims
F. Creditors Holding $5,566,180
Unsecured Nonpriority
Claims
------------- ------------
Total $18,258,575 $19,553,664
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.
HARDWOOD P-G: Hiring Alvarez & Marsal as Forensic Professional
--------------------------------------------------------------
Hardwood P-G, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Western District of Texas for permission
to hire Alvarez & Marsal, LLC, as their forensic professional.
The Debtors selected Alvarez & Marsal because of the firm's
extensive experience, knowledge and excellent reputation in
corporate reorganizations and forensic investigations under
bankruptcy. Alvarez & Marsal will provide assistance in
connection with preferential transfers and fiduciary causes of
actions. Alvarez & Marsal will:
(a) assist in the identification, review and determination of
potential claims and preferential and fraudulent transfers
made by the Debtors to insiders and creditors;
(b) assist in the review and analysis of fiduciary and business
tort causes of actions and other potential recoveries;
(c) assist in negotiations as needed with parties-in-interest;
and
(d) assist with the evaluation of damage claims.
Loretta Cross, a principal at Alvarez & Marsal, tells the Court
that the firm charges these hourly rates:
Managing Directors/Principals $525 to $600
Directors/ Vice Presidents $350 to $475
Staff/Consultants $325
Alvarez & Marsal has agreed to a $75,000 cap on its total fees.
Ms. Cross assures the Court that the firm and its professionals do
not hold material interests against the Debtor's estate and are
"disinterested" as defined in Section 101(14) of the Bankruptcy
Code.
Headquartered in San Antonio, Texas, Hardwood P-G, Inc., aka
Custom Forest Products -- http://www.customforestonline.com/--
sell and deliver local and exotic hardwoods. The Company and two
debtor-affiliates filed for chapter 11 protection on Jan. 9, 2006
(Bankr. W.D. Tex. Case No. 06-50057) David S. Gragg, Esq., and
Steven R. Brook, Esq., at Langley & Banack, Inc., represent the
Debtors. Patrick Hughes, Esq., Eric Terry, Esq., and Abigail
Ottmers, Esq., at Haynes and Boone, LLP, represent the Official
Committee of Unsecured Creditors. When the Debtor filed for
protection from its creditors, it listed $37 million in total
assets and $80,417,456 in total debts.
ICOA INC: Posts $1.3 Million Net Loss in 2006 First Quarter
-----------------------------------------------------------
ICOA, Inc., filed its first quarter financial statements for the
period ended March 31, 2006, with the Securities and Exchange
Commission on May 16, 2006.
The Company's Statement of Operations for the period ended March
31, 2006, showed a net loss of $1,393,613 on revenues of $813,991.
At March 31, 2006, the Company's balance sheet showed $5,661,162
in total assets and $1,637,550 in total liabilities, resulting in
a $4,966,066 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $459,041 in total current assets available to pay
$8,989,678 in total current liabilities coming due within the next
12 months.
Full-text copies of the Company's financial statements for the
period ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a49
Going Concern Doubt
Sherb & Co., LLP, in New York, New York, raised substantial doubt
about ICOA, 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 auditing firm pointed to the
Company's operating losses and working capital deficit.
Headquartered in Warwick, Rhode Island, ICOA, Inc. (OTCBB:ICOA) --
http://www.icoacorp.com/-- sells, installs, supports, and
provides wired and wireless Ethernet and Internet access services,
primarily through Wi-Fi "hot spots" (public wireless local area
networks). As of Dec. 31, 2004, ICOA owned or operated over 900
broadband access installations in high-traffic locations servicing
millions of annual patrons in 44 states. In December 2005, ICOA
owned or operated over 1,500 broadband access installations.
IMPERO INC: Gets Less than $1 Mil. for Assets Valued at $3 Mil.
---------------------------------------------------------------
Impero, Inc., dba Quest Redline Products received less than
$1 million from the sale of new boxed auto accessories valued
at $3 million at an auction done on May 17, 2006. The assets sold
include 8 tractor trailers full of 300 pallets.
The Honorable John H. Squires of the United States Bankruptcy
Court for the Northern District of Illinois authorized the
auction. Arthur Horowitz was the auctioneer.
Late last year, the Company also sought the Court's authority to
sell its obsolete, outdated, discontinued or returned merchandise
to retail customers.
Headquartered in Chicago, Illinois, Impero, Inc., manufactures
Neon Ultrabrights -- small, ultra bright neon tubes. The Company
filed for chapter 11 protection on July 12, 2005 (Bankr. N.D. Ill.
Case No. 05-27502). Ann E. Stockman, Esq., and Matthew A.
Swanson, Esq., at Shaw, Gussis, Fishman, Glantz, Wolfson & Towbin
LLC represent the debtor. When the Company filed for protection
from its creditors, it estimated $1 million to $10 million in
assets and $10 million to $50 million in debts.
INDEPENDENT WHOLESALE: List of 20 Largest Unsecured Creditors
-------------------------------------------------------------
Independent Wholesale, Inc. filed the list of its 20 largest
unsecured creditors with the U.S. Bankruptcy Court for the Middle
District of Florida, disclosing:
Entity Claim Amount
------ ------------
Dot Foods $119,450
P.O. Box 952589
Saint Louis, MO 63195
Hershey Foods $83,632
P.O. Box 198510
Atlanta, GA 30384
M&M Mars $82,468
P.O. Box 100593
Atlanta, GA 30384
Swisher International $73,073
Nabisco Brands, Inc. $48,955
Swedish Match NA, Inc. $45,890
Quaker Foods & Beverage $40,421
R.J. Reynolds Tobacco Co. $36,467
Cross, Fernandez & Riley $34,408
Warren Oil $27,073
Campbells Department $26,958
Farley & Sathers Candy Co., Inc. $26,563
John Middleton, Inc. $26,145
Joshen Paper & Packaging $22,964
Lorillard, Inc. $18,950
Santa Fe Natural Tobacco Co. $18,739
Beverage Corporation $15,457
Cadbury Schweppes $15,435
Commonwealth Brands, Inc. $15,208
Sessions Specialty Co. $14,925
Based in Orlando, Florida, Independent Wholesale, Inc. --
http://goiwi.com/-- supplies and retails cigarettes, cigars,
tobacco, candy and sundries throughout the state of Florida. The
Company filed for Chapter 11 protection on April 21, 2006 (Bankr.
M.D. Fla. Case No. 06-00882). Russell M. Blain, Esq. and Scott A.
Stichter, Esq., at Stichter, Riedel, Blain & Prosser, P.A.,
represent the Debtor. When the Debtor filed for protection from
its creditors, it listed estimated assets and debts of $1 million
to $10 million.
INFORMATION ARCHITECTS: March 31 Equity Deficit Tops $3.6 Million
-----------------------------------------------------------------
Information Architects Corporation filed its first quarter
financial statements for the three months ended March 31, 2006,
with the Securities and Exchange Commission on May 17, 2006.
The Company reported a $113,211 net loss on $3,104 of sales for
the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $1,767,509
in total assets and $5,454,923 in total liabilities, resulting in
a $3,687,414 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $5,592 in total current assets available to pay
$5,454,923 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?a53
Gong Concern Doubt
As reported in the Troubled Company Reporter on May 12, 2006,
Jaspers + Hall, PC, in Denver, Colorado, raised substantial doubt
about Information Architects Corporation'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 recurring losses from
operations and stockholders' deficiencies.
Information Architects Corporation (OTCBB: IACH) -
http://www.ia.com/-- provides employment screening and background
investigations software application.
INFORMATION ARCHITECTS: Completes Purchase of Anywhere Internet
---------------------------------------------------------------
Information Architects completed the acquisition of Anywhere
Internet, Inc.
Originally founded in 1993 as Integration & Support Services in
Alexandria, Virginia, by Mr. Bryan Kidd, Anywhere Internet
provided computer integration support and service to U.S.-based
clients at both their stateside and overseas locations.
Anywhere Internet's client base includes the United States Marine
Corps (stateside and worldwide), the U.S. Food and Drug
Administration (Rockville, MD), the U.S. Department of the
Treasury (Washington, DC); the U.S. Department of State
(Washington, DC); Washington Square Securities (Richmond, VA), the
world's largest construction company Turner Construction Company
(Dallas - New York) and its parent company, HOCHTIEF (Essen,
Germany).
"I am very excited about the union of Information Architects with
Anywhere Internet. By combining the creativity and technology of
these two leading-edge companies, we will continue to provide
solutions that will help people and organizations everywhere
communicate better," Bryan Kidd, Founder and President of Anywhere
Internet, said.
"Bryan is a talented professional in the technology industry with
a host of accomplishments. He brings to the table experiences
that range from providing solutions at the Pentagon to design and
deploy high-speed broadband wireless networks throughout the
Southeastern United States.
"We are pleased to have Mr. Kidd on board, his experience and
knowledge will be a great asset to our operations and delivery.
Combining IA and Anywhere Internet will enable us to provide our
customers with a more complete suite of solutions," Jon Grinter,
president of IA, stated.
The acquisition comes on the heels of reorganization at IA and the
release of a series of newly developed business plans. Details of
the agreement between IA and Anywhere Internet, Inc., have not
been released.
About Anywhere Internet
Anywhere Internet, Inc. -- http://www.anywhereinternet.com/--
delivers carrier class, high-speed Internet service and VOIP
solutions to businesses, hotels, marinas, cities, government and
communities using a secure wireless connection. Anywhere Internet
provides needs assessment, site survey, integration, service and
support for every type of environment, without the normal wait for
traditional Internet service installation.
About Information Architects
Information Architects Corporation (OTCBB: IACH) -
http://www.ia.com/-- provides employment screening and background
investigations software application.
* * *
Gong Concern Doubt
As reported in the Troubled Company Reporter on May 12, 2006,
Jaspers + Hall, PC, in Denver, Colorado, raised substantial doubt
about Information Architects Corporation'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 recurring losses from
operations and stockholders' deficiencies.
ITC HOMES: Hires Bullivant Houser as Special Counsel
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona allowed ITC
Homes, Inc., to retain Bullivant, Houser, and Bailey, PC, as its
special counsel.
The Debtor retained BHB on Dec. 8, 2005, to represent it in a
lawsuit entitled Gedalia, et al. v. ITC Financial Services, Inc.,
(Case No. A513040) then pending in the District Court of Clark
County in Nevada. The case has now been removed to the United
States District Court for the District of Nevada (Case No.:
2:06-CV-405). The Debtor wants to retain BHB on behalf of the
estate for the limited purpose of continued representation in the
lawsuit.
Joseph P. Hardy, Esq., has been designated as the attorney in
charge of this case. The hourly rates for BHB's professionals
are:
Designation Hourly Rate
----------- -----------
Shareholders $225 to $425
Associates $175 to $280
Law Clerks & Paralegals $110
Project Assistant $75
To date, BHB's outstanding fees and costs for representation of
the Debtor in the lawsuit total $85,402.
The Debtor assures the Court that BHB does not hold or represent
any material adverse interest to the Debtor's estate and is
disinterested within the meaning of Section 101(14) of the
Bankruptcy Code.
Headquartered in Vail, Arizona, ITC Homes, Inc. --
http://www.itchomesinc.net/-- develops residential real estates.
The Company filed for chapter 11 protection on Jan. 26, 2006
(Bankr. D. Ariz. Case No. 06-00053). Scott D. Gibson, Esq., at
Gibson, Nakamura & Decker, PLLC, represents the Debtor. When the
Debtor filed for protection from its creditors, it estimated
assets and debts of $10 million to $50 million.
JACOBS ENT: Gets Requisite Consents for 11-7/8% Sr. Sec. Notes
--------------------------------------------------------------
Jacobs Entertainment, Inc. reported results to date of its
cash tender offer and consent solicitation with respect to its
outstanding $148 million in aggregate principal amount of 11-7/8%
Senior Secured Notes due 2009.
As of 5:00 p.m., Eastern time, on May 31, 2006, Jacobs
Entertainment had received tenders of Notes and consents for $142
million in aggregate principal amount of the Notes, representing
95.95% of the Notes outstanding.
Accordingly, the requisite consents to adopt the proposed
amendments to the Indenture pursuant to which the Notes were
issued and to effect the proposed release of the collateral
securing the obligations of Jacobs Entertainment and the
guarantors of the Notes under the Indenture have been received,
and a supplemental indenture to effect the proposed
amendments and collateral release has been executed. The proposed
amendments, which will eliminate substantially all of the
restrictive covenants and eliminate or modify certain events of
default and related provisions contained in the indenture, and the
collateral release will become operative when the tendered Notes
are accepted for purchase by Jacobs Entertainment.
The Tender Offer and Consent Solicitation remains open and is
scheduled to expire at midnight, Eastern time, on June 12, 2006,
unless extended.
As a result of Jacobs Entertainment receiving the requisite
consents and notifying the trustee of the receipt of such
consents, withdrawal and revocation rights with respect to validly
tendered Notes and validly delivered consents expired as of this
announcement. Accordingly, holders may no longer validly withdraw
any Notes previously or hereafter tendered or validly revoke any
consents previously or hereafter delivered, except in the limited
circumstances described in the Offer to Purchase.
The Tender Offer and Consent Solicitation are subject to the
satisfaction of certain conditions, including the consummation of
a note offering by Jacobs Entertainment and the consequent receipt
by Jacobs Entertainment of proceeds from the incurrence of new
indebtedness (or the receipt by Jacobs Entertainment of other
available sources of cash on terms and conditions satisfactory to
Jacobs Entertainment sufficient to purchase the Notes). No
assurance can be given that such new financings will be completed
in a timely manner or at all.
Credit Suisse Securities (USA) LLC is acting as the Dealer Manager
for the tender offer and consent solicitation for the Notes.
Questions regarding the tender offer or consent solicitation may
be directed to:
Credit Suisse Securities (USA) LLC
Telephone (212) 325-3784
Toll Free (800) 820-1653
D.F. King & Co., Inc. is acting as the Information Agent for the
tender offer and consent solicitation for the Notes. Questions
regarding the tender offer and consent solicitation and requests
for documents related to the tender offer and consent solicitation
may be directed to:
D.F. King & Co., Inc.
Telephone (212) 269-5550 (for brokers and banks)
Toll Free (800) 290-6429
About Jacobs Entertainment
Headquartered in Golden, Colorado, Jacobs Entertainment is a
geographically diversified gaming and pari-mutuel wagering company
with properties in Colorado, Nevada, Louisiana and Virginia.
Jacobs Entertainment owns and operates three land-based casinos,
11 truck plaza video gaming facilities (two of which are leased)
and a horseracing track with nine off-track wagering facilities
(five of which are leased). In addition, Jacobs Entertainment is
party to an agreement that entitles it to a portion of the gaming
revenue from an additional truck plaza video gaming facility.
* * *
As reported in the Troubled Company Reporter on May 11, 2006,
Standard & Poor's Ratings Services assigned its 'B+' rating and
recovery rating of '1' to Jacobs Entertainment Inc.'s proposed
$100 million senior secured credit facility, indicating the
expectation that lenders would realize full recovery of principal
(100%) in the event of a payment default.
At the same time, Standard & Poor's affirmed its existing ratings
on Jacobs, including its 'B' corporate credit rating. The outlook
remains stable. The Golden, Colorado-headquartered gaming
facilities owner and operator is estimated to have close to
$280 million of pro forma debt outstanding, after taking into
account the bank loan, including the delayed draw term loan, and
expected note financing transactions.
JACOBS INDUSTRIES: Court Approves 2nd Amended Disclosure Statement
------------------------------------------------------------------
The Honorable Thomas J. Tucker of the U.S. Bankruptcy Court for
the Eastern District of Michigan approved the Second Amended
Disclosure Statement explaining the Second Amended Combined
Liquidating Plan of Reorganized filed by the Official Committee of
Unsecured Creditors in the chapter 11 cases of Jacobs Industries,
Inc., and its debtor-affiliates.
Judge Tucker determined that the Disclosure Statement contained
adequate information -- the right amount of the right type of
information necessary for the Committee to make an informed
decision -- as required under Section 1125 of the Bankruptcy Code.
The Committee is now authorized to distribute copies of the Plan
and the Disclosure Statement to solicit acceptances for the Plan.
Terms of the Plan
The Plan contemplates the substantive consolidation of the Debtors
for voting and distribution purposes. The Plan proposes the
creation of a liquidation trust. The Liquidation Trust will
operate under the provisions of an agreement between the Debtors,
the Committee and the Liquidation Trustee establishing the
Liquidation Trust. After the plan's effective date, the Debtors
will have no liability to holders of claims or interests other
than as provided for in the Plan. A Liquidation Trustee will
administer the Plan. On the plan effective date, the Debtors will
transfer all of its assets to the Liquidation Trust.
Holders of secured claims will receive either:
(a) 100% of the net proceeds from the sale of the relevant
collateral, up to the unpaid allowed amount of the claim;
(b) the return of the relevant collateral, after payment of
costs and expenses of maintaining the collateral; or
(c) alternative treatment as leaves unaltered the legal,
equitable and contractual rights of their rights.
Each holder of allowed general unsecured claims will receive a pro
rata share of the Liquidation Trust funds after the secured claims
are satisfied.
Holders of subordinated and inter-company claims and equity
interests will get nothing under the Committee's plan.
A copy of the Plan is available for a fee at
http://www.researcharchives.com/bin/download?id=060531221236
Deadlines
The deadline to return ballots on the Plan, as well as to file
objections to confirmation of the Second Amended Plan, is June 5,
2006. The completed ballot form must be returned by mail to the
Committee's attorney:
Barbara J. Rom
Pepper Hamilton LLP
100 Renaissance Center, Suite 3600
Detroit, MI 48243
The confirmation hearing will be held on June 14, 2006 at
11:00 a.m., in Room 1925, 211 W. Fort Street, Detroit, Michigan.
About Jacobs Industries
Headquartered in Fraser, Michigan, Jacobs Industries, Inc.,
manufactures automotive interiors in roll forming and channel,
stampings and assembled product. The company along with its three
affiliates filed for chapter 11 protection on Sept. 26, 2005
(Bankr. E.D. Mich. Case No. 05-72613). Charles J. Taunt, Esq.,
and Erika D. Hart, Esq., at Charles J. Taunt & Associates,
P.L.L.C., represents the Debtors in their restructuring. Barbara
Rom, Esq., and Deborah Kovsky-Apap, Esq., at Pepper Hamilton LLP
represent the Official Committee of Unsecured Creditors. When the
Debtor filed for protection from its creditors, it listed
$19,513,913 in total assets and $21,413,576 in total debts.
JAMES RIVER: Earns $1.4 Million in First Quarter Ended March 31
---------------------------------------------------------------
James River Coal Company, reported a $1.4 million net income on
$146.7 million of revenues for the first quarter ended Mar. 31,
2006, compared to a $309,000 net loss on $97.9 million of revenues
for the same period in 2005.
At March 31, 2006, the Company's balance sheet showed $488.5
million in total assets and $375 million in total liabilities. As
of March 31, 2006, the Company had an accumulated deficit of $9.8
million, compared to $11.2 million accumulated deficit for the
year ended Dec. 31, 2005.
A full-text copy of the Company's 2006 Quarterly Report is
available for free at http://researcharchives.com/t/s?a5c
Headquartered in Richmond, Virginia, James River Coal Co. --
http://www.jamesrivercoal.com/-- mines, processes and sells
bituminous, low sulfur, steam- and industrial-grade coal through
five operating subsidiaries located throughout Eastern Kentucky.
James River's five mining complexes include 17 mines and seven
preparation plants, five of which have integrated rail loadout
facilities and two of which use a common loadout facility at a
separate location. James River emerged from bankruptcy in May
2004 with its Central Appalachian assets. Subsequently, the
company acquired mining assets located in the Illinois coal basin
on May 31, 2005, that currently account for approximately one
third of production.
* * *
As reported in the Troubled Company Reporter on March 15, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on James River to 'B-' from 'B'. At the same time, the
secured debt rating was lowered to 'B' from 'B+' and unsecured
debt rating to 'CCC' from 'CCC+'. S&P said the outlook is
developing.
As reported in the Troubled Company Reporter on March 6, 2006,
Moody's Investors Service placed James River Coal Company's B2
corporate family rating, its B1 senior secured rating and its B3
senior unsecured rating under review for possible downgrade.
At the same time Moody's affirmed James River Coal's SGL-4
speculative grade liquidity rating, reflecting weak liquidity.
JEROME DUNCAN: Virchow Krause Hired as Ch. 7 Trustee's Accountant
-----------------------------------------------------------------
The Hon. Marci B. McIvor of the U.S. Bankruptcy Court for the
Eastern District of Michigan authorized Shelia J. Solomon, the
interim chapter 7 Trustee appointed in Jerome Duncan, Inc.'s
bankruptcy case, to retain Virchow, Krause and Co. LLP, as her
accountant.
Virchow Krause will provide accounting services to the Trustee and
assist her on all accounting matters.
Barry P. Lefkowitz, a Virchow Krause partner, disclosed that the
firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partner $250 - $335
Professional Staff $95 - $225
Administrative Staff $36
Mr. Lefkowitz assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in Sterling Heights, Michigan, Jerome Duncan Inc.,
was the largest dealer of automobiles manufactured by Ford Motor
Company in the state of Michigan. The Debtor employed over 200
individuals in its operations and generated between $300 and $500
million in annual sales. The company filed for chapter 11
protection on June 17, 2005 (Bankr. E.D. Mich. Case No. 05-59728).
Arnold S. Schafer, Esq., at Schafer and Weiner, PLLC, represents
the Debtor. On April 12, 2006, Judge McIvor converted the case to
chapter 7 liquidation. Shelia J. Solomon served as the Debtor's
interim chapter 7 trustee.
KASTEN CHASE: Files for Bankruptcy Under Canadian Law
-----------------------------------------------------
Kasten Chase reported, on May 31, 2006, that it is ceasing
operations.
The Company has been engaged in discussions with a number of
parties over many months in an effort to rectify the Company's
financial situation and improve its long-term business prospects.
In particular, the Company sought either an expression of interest
in the acquisition of the Company or a reseller arrangement with
an established storage vendor supported by a significant product
commitment for its mainframe tape encryption and key management
solution. The Board and management have now concluded it is
unlikely any such transaction beneficial to the Company or its
stakeholders could be completed on a timely or profitable basis.
Accordingly, the Board has determined it is in the best interests
of the Company to discontinue operations immediately.
The assets of the Company will be assigned to a trustee in
bankruptcy for the benefit of its creditors, at which time each of
the directors of the Company will resign.
Headquartered in Mississauga, Ontario, Kasten Chase (TSX: KCA)
offers enterprise-class, business solutions for secure storage,
secure collaboration, and secure remote access with offices in
Ottawa, Ontario and Sterling, Virginia.
KRISPY KREME: Files FY 2005 10K & Restates 2003 to 2004 Financials
------------------------------------------------------------------
Krispy Kreme Doughnuts, Inc., filed its financial results for the
fiscal year ended Jan. 30, 2005, with the Securities and Exchange
Commission on April 28, 2006.
The Company also restated its consolidated balance sheet as of
Feb. 1, 2004 (the last day of fiscal 2004) and its consolidated
statements of operations, of shareholders' equity and of cash
flows for fiscal 2004 and fiscal 2003. Certain restatement
adjustments affected periods prior to fiscal 2003.
For the fiscal year ended Jan. 30, 2005, the Company reported a
$198.3 million net loss on $707.8 million of net revenues,
compared to $48.6 million of net income on $649.3 million of net
revenues for the year ended Feb. 1, 2004.
As of Jan. 30, 2005, the Company's balance sheet showed total
assets of $480.3 million and total debts of $239.3 million.
As reported in the Troubled Company Reporter on April 19, 2006,
the Company noted that it is unable to file timely its annual
report on Form 10-K for fiscal 2006 because there have been
substantial resources devoted to completing the 10-K for fiscal
2005. The Company intended to file the fiscal 2006 10-K as soon
as practicable after completing its fiscal 2005 10-K.
A full-text copy of Krispy Kreme's Annual Report is available for
free at http://researcharchives.com/t/s?a59
About Krispy Kreme
Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme --
http://www.krispykreme.com/-- is a leading branded specialty
retailer of premium quality doughnuts, including the Company's
signature Hot Original Glazed. There are currently approximately
320 Krispy Kreme stores and 80 satellites operating systemwide in
43 U.S. states, Australia, Canada, Mexico, the Republic of South
Korea and the United Kingdom.
Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC
is a majority-owned subsidiary and franchisee partner of Krispy
Kreme Doughnuts, Inc., in the Philadelphia region. The Debtor
operates six out of the approximately 360 Krispy Kreme stores and
50 satellites located worldwide. The Company filed for chapter 11
protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268).
M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew
Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated
$10 million to $50 million in assets and debts.
Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is
a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11
protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932).
The bankruptcy filing will facilitate the sale of 12 Krispy Kreme
stores, as well as the franchise development rights for Colorado,
Minnesota and Wisconsin, for approximately $10 million to Westward
Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho,
Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP
represents Glazed in its restructuring efforts. When Glazed filed
for protection from its creditors, it estimated assets and debts
between $10 million to $50 million.
KremeKo, Inc., Krispy Kreme's Canadian franchisee, is currently
restructuring under the Companies' Creditors Arrangement Act.
Pursuant to the Court's Initial Order, Ernst & Young Inc. was
appointed as Monitor in KremeKo's CCAA proceedings. The Monitor
is attempting to sell the KremeKo business.
LAGUARDIA ASSOCIATES: Hires Robert Price as Special Counsel
-----------------------------------------------------------
LaGuardia Associates, L.P., and its debtor-affiliates obtained
permission from the U.S. Bankruptcy Court for the Eastern District
of Pennsylvania to employ Robert S. Price, Esq., as its special
counsel.
As reported in the Troubled Company Reporter on Mar. 28, 2006, the
Debtors want Mr. Price's services for bond matters related to the
1998 refinancing of the hotel properties. Mr. Price may also
provide expert testimony to other bond issues arising in the
Debtors' cases.
Mr. Price will bill the Debtors at $200 per hour for his services.
To the best of the Debtors' knowledge, Mr. Price does not hold any
interest adverse to the Debtors, their creditors, or any party-in-
interest.
Headquartered in King of Prussia, Pennsylvania, LaGuardia
Associates, L.P., owns and operates the 358-room Crowne Plaza
Hotel located at 104-04 Ditmars Boulevard in East Elmhurst, New
York. The Company and its debtor-affiliate filed for chapter 11
protection on October 29, 2004 (Bankr. E.D. Pa. Case No.
04-34514). Martin J. Weis, Esq., at Dilworth Paxon LLP represent
the Debtors in their restructuring. Ashely M. Chan, Esq., and
Myron Alvin Bloom, Esq., at Hangley Aronchick Segal & Pudlin
represent the Official Committee of Unsecured Creditors. When the
Company filed for protection from its creditors, it estimated
assets and liabilities of $10 to $50 million.
LEVEL 3 COMMS: Fitch Rates Proposed $150 Million Notes at CCC-
--------------------------------------------------------------
Fitch Ratings assigned a rating of 'CCC-' to Level 3
Communications, Inc.'s proposed issuance of $150 million of
convertible senior notes due 2012, as well as a Recovery Rating
of 'RR5'.
On May 5, 2006, Fitch revised the Rating Outlook of Level 3 and
Level 3 Financing, Inc. to Positive from Stable and affirmed the
'CCC' Issuer Default Rating as well as each issue rating for the
company.
The Positive Rating Outlook reflected Fitch's belief that the
improved operating leverage from Level 3's recently announced
acquisitions, particularly TelCove, Inc., would provide the
company with the ability to materially improve financial metrics
as the integration of each is completed. Fitch expected that
Level 3 would have a greater focus on reducing interest expense,
which along with the announced acquisitions would lead to a
significantly improving level of free cash flow with a neutral
level near year-end 2008.
These proposed notes along with Level 3's announcement to offer
125 million shares of common stock are expected to be used by the
company to repay all or some of its $399 million outstanding
9.125% senior notes due 2008 and $63 million outstanding 10.5%
senior discount notes due 2008. Should the company be successful
it would reduce its 2008 maturity amount to approximately $138
million from the current approximately $600 million. The net
result would also reflect a debt reduction of approximately $312
million if it is successful.
Additionally, Level 3 announced that it would seek to amend and
restate its $730 million senior secured credit agreement at Level
3 Financing with the primary purpose of reducing the interest rate
payable, which is LIBOR plus 700 basis points. Together these
transactions should result in a material interest expense savings
and improvement in free cash flow as well as a reduction in
overall leverage and are clearly credit positive. Excess proceeds
from these new offerings can be used to repay other indebtedness,
or for acquisitions, liquidity enhancement, or other general
corporate purposes.
Fitch expects the company to continue to focus on reducing
interest expense and debt. Level 3 still has $1.2 billion of
senior convertible notes that can convert to equity at less that
$4 per share, which is another method the company has available to
it for further credit improvement. The timing of a ratings
upgrade on Level 3 is linked to the company's continued efforts to
improve free cash flow to a level near neutral or quickly
approaching it, reduce debt-to-EBITDA leverage to a range of
7x-7.5x, generate positive organic revenue growth, and steadily
improve margins. Additionally, the company will need to maintain
liquidity and financial flexibility to address its maturity
schedule.
Fitch's Recovery Ratings, introduced in 2005, are a relative
indicator of creditor recovery on a given obligation in the event
of a default.
LEXINGTON RESOURCES: Posts $3.8 Mil. Net Loss in 2006 First Qtr.
----------------------------------------------------------------
Lexington Resources, Inc., filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 17, 2006.
The Company reported a $3,809,589 net loss on $301,306 of total
revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $13,821,848
in total assets, $6,801,881 in total liabilities, and $7,019,967
stockholders' equity.
The Company's March 31 balance sheet also showed strained
liquidity with $823,074 in total current assets available to pay
$5,265,496 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?a5a
Going Concern Doubt
Dale Matheson Carr-Hilton LaBonte, Chartered Accountants, in
Vancouver, Canada, raised substantial doubt about Lexington
Resources, 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 significant losses since inception and need for
additional financing.
Lexington Resources, Inc. (OTCBB: LXRS) (FSE: LXR) (BER: LXR)
(WKN: AOBKLP) -- http://www.lexingtonresources.com/-- acquires
and develops oil and natural gas properties in the United States.
The Company owns a 590 gross acre section of farm-out acreage in
Pittsburg County, Oklahoma for the development and production of
coal bed methane gas known as the Wagnon Property. The Company is
producing gas from four wells drilled on the Wagnon Property.
Lexington has a 53.2% back-in working interest in each of the
wells. Its current operational focus is gas development
initiatives in the Arkoma Basin, Oklahoma, and the Fort Worth
Basin, in Dallas, Texas.
LEXINGTON RESOURCES: Closes $7.65 Million Equity Placement
----------------------------------------------------------
Lexington Resources, Inc., closed a $7.65 million equity placement
to increase drilling and related capital and operating
expenditures to expedite development of its Barnett Shale, Texas,
and Arkoma Basin, Oklahoma, gas projects.
Proceeds of approximately $7.2 million, net of expenses, will
allow the Company to expand gas production initiatives in its 2006
capital expenditure program.
The Company has entered into purchase agreements with certain
accredited investors for private placement totaling 7.65 million
units at a purchase price of $1.00 per unit for gross proceeds of
$7.65 million.
Included in the units are warrants for an additional 7.65 million
common shares exercisable at $1.25 per share. The warrants are
exercisable for a term the earlier of twelve months after
registration effectiveness, or 18 months.
The Company will file a registration statement with the Securities
and Exchange Commission covering the resale of shares of common
stock sold in the private placement or issuable upon exercise of
the warrants.
Agent success fees relating to the offer are payable in connection
with the private placement in the amount of 5% of the gross
proceeds payable in cash plus 10% of the gross units issued
payable in restricted common shares that carry piggy back
registration rights.
Lexington Resources, Inc. (OTCBB: LXRS) (FSE: LXR) (BER: LXR)
(WKN: AOBKLP) -- http://www.lexingtonresources.com/-- acquires
and develops oil and natural gas properties in the United States.
The Company owns a 590 gross acre section of farm-out acreage in
Pittsburg County, Oklahoma for the development and production of
coal bed methane gas known as the Wagnon Property. The Company is
producing gas from four wells drilled on the Wagnon Property.
Lexington has a 53.2% back-in working interest in each of the
wells. Its current operational focus is gas development
initiatives in the Arkoma Basin, Oklahoma, and the Fort Worth
Basin, in Dallas, Texas.
* * *
Going Concern Doubt
Dale Matheson Carr-Hilton LaBonte, Chartered Accountants, in
Vancouver, Canada, raised substantial doubt about Lexington
Resources, 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 significant losses since inception and need for
additional financing.
LOVESAC CORP: Barred From Using G&G's Cash Collateral
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware denied The
LoveSac Corporation and its debtor-affiliates' request to use cash
collateral securing repayment of G&G, LLC's loan.
As reported in the Troubled Company Reporter on Feb. 20, 2006, the
Debtor had access to a $2,800,000 loan facility from G&G prior to
their bankruptcy filing. The Debtor owed $2.2 million on account
of the G&G loan as of Jan. 30, 2006.
The G&G Loan is secured by:
1) real property in Weber County, Utah, appraised at
$34.6 million;
2) other assets pledged by the Debtor as additional collateral;
and
3) all LoveSac common stock of Scott McDonough, James L. Hyde,
Shawn D. Nelson and Verdi R. White, III, as loan guarantors.
The Court ruled that the scope of G&G's cash collateral is limited
solely to the cash proceeds of property that the Debtors owned as
of the Feb. 25, 2005 merger of The LoveSac Corporation, a Utah
Corporation, and Debtor The LoveSac Corporation, a Delaware
Corporation.
Court's Decision
The Court prohibits the Debtors from using G&G's cash collateral
and directs them to segregate the collateral as it is collected.
The Debtors are required to reserve and segregate these funds:
a) any royalty payment received by the Debtors on account of
franchise agreements that were entered into by LoveSac
Utah, on or before the merger;
b) any payments on account of accounts receivable that were
either outstanding as of the merger, represent cash
proceeds of inventory that existed as of the merger, or
was entered in the name of LoveSac Utah after the merger;
c) any payments received by the Debtors as a result of the
assumption and assignment of leases and franchise
agreements that were entered into by the Debtors or
LoveSac Utah on or before the merger or were entered in
the name of LoveSac Utah after the merger; and
d) an $8,500 payment arising from the sublease for the
Debtors' headquarters in Salt Lake City, Utah but only if
the sublease was entered into prior to the merger.
The Debtors dispute the right of G&G on the franchise agreements,
leases and all other contracts entered in the name of LoveSac Utah
after the merger, but have agreed to segregate these funds.
The Court allows the Debtors to use cash collateral securing
repayment of their debts to lenders other than G&G, including REM,
LLC's cash collateral. As adequate protection for the use of the
cash collateral, the Debtors grant REM replacement liens on
postpetition assets, to the same extent and priority as they held
in prepetition assets, for any diminution caused by the use of the
cash collateral.
The Debtors will use all desegregated cash collateral according to
this budget http://researcharchives.com/t/s?a5e
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: Wants to Walk Away from QB Sack MOU
-------------------------------------------------
The LoveSac Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
reject a Memorandum of Understanding with QB Sack LLC.
QB Sack operated as LoveSac's franchisee pursuant to a Franchise
Development Agreement signed on August 2002. In December 2003, QB
Sack executed a $150,000 promissory note in favor of LoveSac on
account of its obligation under the franchise agreement.
LoveSac and QB Sack entered into a Memorandum of Understanding on
Oct. 12, 2005, in partial settlement of QB Sack's obligations to
LoveSac. As of the execution of the MOU, QB Sack owed
approximately $500,000 to LoveSac for trade debts and was in
default under the 2003 note.
Under the terms of the MOU, QB Sack agreed to transfer the leases
at its Ontario Mills, Milpitas Great Mall and Oakridge stores to
LoveSac. QB Sack are also obliged to issue a new promissory note
to pay for the balance of its debts to LoveSac after the lease
transfers. The new note, to be secured by the QB Sack store at
North Country Fair, carries an 8% interest per year. QB Sack is
required to pay LoveSac $10,000 per month under the new note with
the entire remaining balance due on July 31, 2006.
Since filing for bankruptcy, the Debtors have attempted to
negotiate with QB Sack on the terms of the MOU and the completion
of follow-on documentation for the new note. The parties failed
to reach any agreement. The Debtors eventually concluded that the
MOU is not in the best interests of their estates and claimed
that, in fact, the MOU is not an executory contract but rather, a
statement of intent that presumes additional agreements will
follow.
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.
MACTEC INC: S&P Rates $155 Million Sr. Sec. Credit Facility at B+
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Alpharetta, Georgia-based engineering and
construction services provider MACTEC Inc.
Standard & Poor's also assigned its 'B+' rating and its '3'
recovery rating to the company's $155 million first-lien senior
secured credit facility, indicating a meaningful recovery of
principal (50%-80%) in the event of default. The outlook is
stable.
"The ratings on MACTEC reflect the company's highly leveraged
financial risk profile characterized by fair liquidity and modest
free cash flow generation, and weak business risk profile as a
niche player in the fragmented engineering and construction
services industry," says Standard & Poor's analyst Clarence Smith.
The company's engineering and consulting division (the majority
of revenues) specializes in short-duration projects either under
preferred-provider agreements, or as part of large engagements
that have multi-projects. MACTEC's development division provides
services on large projects, such as landfill closures and
demolitions. The company markets its services through 85
independently managed offices spread throughout the U.S.
Management plans to expand the business by enhancing services to
existing customers and identifying new customers. Acquisitions
are not expected to be main focus going forward. The company had
$440 million of revenues in 2005.
MARKSON ROSENTHAL: Court Sets August 18 as Claims Filing Deadline
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey in Newark
set Aug. 15, 2006, as the deadline for all creditors owned money
by Markson Rosenthal & Co., Inc., prior to April 14, 2006, to file
their Proofs of Claim.
Proofs of claim must be filed with the clerk of the bankruptcy
court at this address:
Office of the Clerk
U.S. Bankruptcy Court
District of New Jersey (Newark)
MLK Jr Federal Building
50 Walnut Street
Newark, NJ 07102
Tel: 973-645-4764
Headquartered in Englewood Cliffs, New Jersey, Markson Rosenthal &
Company, Inc. -- http://www.marksonrosenthal.com/-- manufactures
point of purchase displays and offers contract packaging services.
The Company filed for chapter 11 protection on April 14, 2006
(Bankr. D. N.J. 06-13163). Allen J. Underwood, Esq., and Ben
Becker, Esq., at Becker, Meisel LLC represent the Debtor in its
restructuring efforts. Douglas J. McGill, Esq., and Robert
Malone, Esq., at Drinker, Biddle & Reath represent the Official
Committee of Unsecured Creditors. When the Debtor filed for
protection from its creditors, it reported zero assets and
$11,870,120 in debts.
MASTEC INC: Moody's Holds Ba3 Corporate Family Rating
-----------------------------------------------------
Moody's Investors Service affirmed MasTec, Inc.'s Ba3 Corporate
Family Rating and B2 Senior Subordinated Rating. The outlook has
been changed to stable from negative.
The rating action reflects the meaningful improvement in MasTec's
financial profile as a result of the recent follow-on equity issue
of approximately $157 million and permanent debt reduction of $75
million. As well, Moody's expects the company's operational
performance to continue its recent improving trend over the near
term driven by improving industry fundamentals and a focus on
profitable growth.
The Ba3 corporate family rating reflects MasTec's good market
position as a relatively large-sized specialty contractor,
primarily for the communications sector, with roughly half its
communications revenues concentrated with one customer. Although
Moody's expects that the company's performance will improve over
the ratings horizon, driven partly by strengthening industry
demand and pricing, the rating reflects weak margins relative to
some industry peers.
Finally, the rating reflects management's commitment to further
improve its leverage through increasing cashflow; a recent
reduction in debt with proceeds of its secondary equity offering
took debt to below 3.0 times EBITDA. Moody's further expects the
company to generate free cash flow by the end of 2006.
Based in Coral Gables, Florida, MasTec, Inc. is a specialty
contractor serving communications, utilities and government
sectors.
MIRANT CORP: Resolves Electric Power Purchase Dispute with Pepco
----------------------------------------------------------------
Mirant entered into a settlement with Potomac Electric Power
Company that will resolve outstanding litigation between the
companies that arose from agreements entered into in 2000 as part
of Mirant's acquisition of power plants and other assets from
Pepco.
Mirant emerged from a Chapter 11 reorganization on Jan. 3, 2006,
but unresolved elements of its case have remained pending before
the bankruptcy court, including the disputes with Pepco that are
resolved by this settlement.
The settlement resolves a number of disputed matters, including a
long-term arrangement entered into in 2000 that required Mirant to
buy electric power from Pepco through 2021 at prices significantly
higher than market prices. Mirant will be allowed to reject this
arrangement and avoid future payments.
Terms of the Settlement
Pepco will receive a claim under Mirant's previously approved Plan
of Reorganization that entitles it to receive a distribution of
common shares and cash with a value of $520 million, subject to
certain adjustments. To satisfy the claim, Mirant will distribute
to Pepco up to 18 million shares of Mirant common stock plus an
additional amount of cash so that Pepco receives a total of
$520 million. Mirant will not issue new shares to satisfy the
Pepco claim but will use shares from the shares to be distributed
to creditors under its Plan of Reorganization that were reserved
for distribution on disputed claims.
"It is good to have this matter behind us," Edward R. Muller,
chairman and CEO of Mirant, said. "We look forward to resuming
normal business relations with our valued customer, Pepco."
A full-text copy of the material terms of the settlement agreement
is available at http://ResearchArchives.com/t/s?a4c
About Pepco
Headquartered in Washington, D.C., Potomac Electric Power Company
-- http://www.pepco.com/-- a subsidiary of Pepco Holdings, Inc.,
provides safe and reliable electric service to more than 725,000
residential and commercial customers in Washington, D.C., and
Montgomery and Prince George's counties in Maryland.
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.
NEFF CORP: S&P Places B+ Corporate Credit Rating on CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Miami-
based equipment rental company Neff Corp. on CreditWatch with
positive implications, including its 'B+' corporate credit rating
on the company.
Neff has filed an IPO for approximately $345 million in proposed
maximum aggregate proceeds (including over-allotments) with Neff
receiving an estimated $150 million in proceeds from the sale of
its primary shares.
"If completed, the offering will improve the company's credit
profile and with current favorable industry conditions it could
possibly lead to a modest upgrade," said Standard & Poor's credit
analyst John R. Sico.
Neff plans to use its share of the net proceeds to repay debt
including borrowings under its revolving credit facility. The IPO
is expected to occur in the third quarter of 2006.
The company is currently owned by:
* Odyssey Investment Partners LLC,
* other co-investors, and
* management.
Odyssey is also selling shares in the company in this offering,
and upon completion of the IPO, it will still own a majority of
the company.
Neff has seen an improvement in operating performance in line with
the recovery in the equipment rental industry. 2006 prospects
appear favorable as witnessed by Neff's first quarter 2006
increases in sales and EBITDA of about 26% and 63% respectively
from prior year.
Neff, based in Miami, Florida, is a regional operator in the
competitive equipment rental industry. The company offers
construction and industrial equipment for sale or rent through a
network of 63 locations in the sunbelt regions of the U.S.
Standard & Poor's will meet with management to review its business
strategy and financial policies before taking any rating action.
NES RENTAL: S&P Alters B+ Corp. Credit Rating's Watch to Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch
implications to negative from developing for its ratings on
equipment rental company NES Rental Holdings Inc., including its
'B+' corporate credit rating. Ratings were originally placed on
CreditWatch developing on Feb. 22, 2006.
"The revision follows the recent announcement by NES that it has
signed a definitive agreement to sell the company to affiliates of
Diamond Castle Holdings LLC, a private equity firm, in a
transaction valued at $850 million," said Standard & Poor's credit
analyst John Sico.
"This follows the company's earlier announcement and the reason
for the original CreditWatch listing when it announced a decision
to hire a financial adviser to review strategic alternatives."
Although the financial arrangements are yet to be disclosed,
Standard & Poor's could lower the ratings, as the purchase by a
financial sponsor may result in higher-than-expected leverage.
Chicago, Illinois-based NES is a closely held regional equipment
company with operations in 34 states. Its sales for the year 2005
approached $600 million, and its total debt outstanding was about
$430 million.
NEWAVE INC: Swings to Profit in Quarter Ended March 31
------------------------------------------------------
NeWave, Inc., earned $194,380 of net income for the three months
ended March 31, 2006, as compared to a net loss of $1,294,180 for
the three months ended March 31, 2005.
The Company generated net revenues of $3,932,343 for the quarter
ended March 31, 2006, an increase of 212% compared to $1,258,616
for the three months ended March 31, 2005. The Company's revenues
are derived from three primary sources -- membership revenue,
upsell revenue, and lead revenue.
NeWave's balance sheet at March 31, 2006, showed $3,096,227 in
total assets and $5,177,988 in total liabilities, resulting in a
$2,081,761 stockholders' deficit.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?a48
Going Concern Doubt
As reported in the Troubled Company Reporter on March 29, 2006,
Jaspers + Hall, PC expressed substantial doubt about NeWave's
ability to continue as a going concern after auditing the
Company's financial statements for the year ended Dec. 31, 2005.
The auditing firm pointed to the Company's recurring losses from
operations.
Headquartered in Goleta, California, NeWave, Inc. --
http://www.newave-inc.com/-- is an online auction and e-commerce
company, which through its wholly owned subsidiary,
"onlinesupplier.com", is engaged in providing online solutions and
tools to its customers for monthly membership fees. NeWave
provides its members with a commercial website, hosting a merchant
account (PayPal, Visa & MasterCard) and access to thousands of
high value products and value-added services.
NEWMARKET CORP: Moody's Lifts Rating on $150 Million Loan to B1
---------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating of
NewMarket Corporation to Ba3 from B1, upgraded its senior secured
debt rating to Ba2 from Ba3, and upgraded its unsecured debt
rating to B1 from B2. The ratings were upgraded to reflect the
firm's reduced debt, improved credit metrics despite the recent
negative performance of the TEL business, and positive business
conditions. The rating outlook is stable.
These ratings were raised:
NewMarket Corporation
* Corporate Family Rating -- to Ba3 from B1
* $100 million guaranteed senior secured revolving credit
facility due 2009 -- to Ba2 from Ba3
* $150 million of 8.875% senior unsecured notes due 2010 -
to B1 from B2
The ratings reflect the firm's improved credit metrics, reduced
leverage and healthy free cash flow. The firm has steadily de-
levered its balance sheet to the point where it has only one debt
issue outstanding in addition to its credit facility. However,
the firm does have significant unfunded pension and off balance
sheet lease obligations, aggregating to the equivalent of $184
million of debt using Moody's standard adjustments.
NewMarket has stated that it plans to build cash balances with
excess cash since its remaining outstanding debt issue is not
callable until 2007. However, it has also authorized the
repurchase of up to $50 million in common stock. Additionally,
management has indicated a preference to grow the business through
acquisitions, a possible use for cash and potentially leading to
higher leverage.
The stable outlook reflects Moody's expectation that NewMarket
will modestly improve profit margins and reduce net debt by
generating positive free cash flow. The rating builds in the
possibility of an acquisition of up to $200 million as long as the
transaction represents a reasonable valuation multiple and is
funded by a balanced mix of debt and equity. Additionally, the
stable outlook reflects the company's good liquidity, which is a
function of its strong cash position and undrawn revolving credit
facility.
Moody's last rating action on NewMarket, formerly Ethyl Corp., was
on April 2, 2003, when it assigned a B2 rating to Ethyl Corp.'s
guaranteed senior unsecured notes.
NewMarket, through its Afton subsidiary, develops, manufactures
and markets petroleum additives and, through its Ethyl subsidiary,
is in the tetra ethyl lead business. NewMarket had revenues and
EBITDA, excluding special items, of $1.1 billion and $97 million,
respectively, in 2005.
NVF CO: Wants to Borrow $1 Million More Under DIP Financing Pact
----------------------------------------------------------------
NVF Company and its debtor-affiliate, Parsons Paper Company, Inc.,
ask the U.S. Bankruptcy Court for the District of Delaware for
permission to borrow an additional $1 million from the Estate of
Victor Posner, their debtor-in-possession lender, under the Third
Amendment of their DIP Term Credit and Guaranty Agreement.
As reported in the Troubled Company Reporter on Sept. 16, 2005,
the Court gave the Debtors permission to borrow $2 million from
the DIP Lender. The Court allowed the Debtors to borrow another
$1 million more from the DIP Lender early this year.
The Debtors need more funds to continue making their traditional
products and commence the production of a new vulcanized fiber
product known as "Yorkite Veneer." The Debtors expects to use up
all the funds from earlier DIP draws this month.
The Debtors propose that the additional $1 million to be borrowed
will still be subject to a superpriority claim against their
estate.
Based in Yorklyn, Delaware, NVF Company -- http://www.nvf.com/--
manufactures thermoset composites (glass, Kevlar), vulcanized
fiber, custom containers, circuitry materials, custom fabrication,
and welding products. The Company along with its wholly owned
subsidiary, Parsons Paper Company, Inc., filed for chapter 11
protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and
05-11728). Rebecca L. Booth, Esq., at Richards, Layton & Finger,
P.A., represents the Debtors in their restructuring efforts.
Elizabeth A. Wilburn, Esq., and Jason W. Staib, Esq., at Blank
Rome LLP represent the Official Committee of Unsecured Creditors.
When the Debtors filed for protection from their creditors, they
listed estimated assets between $10 million to $50 million and
estimated debts of more than $100 million.
OCA INC: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: OCA, Inc.
fdba Orthodontic Centers of America, Inc.
3850 North Causeway Boulevard, Suite 800
Metairie, Louisiana 70002
Tel: (504) 834-4392
Bankruptcy Case No.: 06-10179
Debtor affiliates filing separate chapter 11 petitions on June 1,
2006:
Entity Case No.
------ --------
Orthodontic Centers of Hawaii, Inc. 06-10503
Orthodontic Centers of Iowa, Inc. 06-10504
Orthodontic Centers of Idaho, Inc. 06-10505
Debtor affiliates that filed separate chapter 11 petitions on
March 14, 2006:
Entity Case No.
------ --------
Orthodontic Centers of Alabama, Inc. 06-10180
Orthodontic Centers of Arizona, Inc. 06-10181
Orthodontic Centers of Arkansas, Inc. 06-10182
Orthodontic Centers of California, Inc. 06-10183
Orthodontic Centers of Colorado, Inc. 06-10184
Orthodontic Centers of Connecticut 06-10185
Orthodontic Centers of Florida 06-10186
Orthodontic Centers of Illinois 06-10187
Orthodontic Centers of Indiana 06-10187
Orthodontic Centers of Kansas 06-10189
Orthodontic Centers of Kentucky 06-10190
Orthodontic Centers of Louisiana 06-10191
Orthodontic Centers of Maine 06-10192
Orthodontic Centers of Maryland 06-10193
Orthodontic Centers of Massachusetts 06-10194
Orthodontic Centers of Michigan 06-10195
Orthodontic Centers of Minnesota 06-10196
Orthodontic Centers of Mississippi 06-10197
Orthodontic Centers of Missouri 06-10198
Orthodontic Centers of Nebraska 06-10199
Orthodontic Centers of Nevada 06-10200
Orthodontic Centers of New Hampshire 06-10201
Orthodontic Centers of New Jersey 06-10202
Orthodontic Centers of New Mexico 06-10203
Orthodontic Centers of New York 06-10204
Orthodontic Centers of North Carolina 06-10205
Orthodontic Centers of North Dakota 06-10206
Orthodontic Centers of Ohio 06-10207
Orthodontic Centers of Oklahoma 06-10208
Orthodontic Centers of Pennsylvania 06-10209
Orthodontic Centers of Puerto Rico 06-10210
Orthodontic Centers of Rhode Island 06-10211
Orthodontic Centers of South Carolina 06-10212
Orthodontic Centers of Tennessee 06-10213
Orthodontic Centers of Texas 06-10214
Orthodontic Centers of Utah 06-10215
Orthodontic Centers of Virginia 06-10216
Orthodontic Centers of Washington 06-10217
Orthodontic Centers of West Virginia 06-10218
Orthodontic Centers of Wisconsin 06-10219
Orthodontic Centers of Wyoming 06-10220
Type of Business: Publicly held OCA is the leading provider of
business services to orthodontists and pediatric
dentists. The Company's client practices
provide treatment to patients throughout the
United States and in Japan, Mexico, Spain,
Brazil and Puerto Rico. See http://www.oca.com/
and http://www.ocai.com/
Headquartered in Metairie, Louisiana, OCA, Inc.,
was adversely impacted by Hurricanes Katrina and
Wilma.
In December 2005, OCA hired Jefferies & Company,
Inc., as its financial advisor and investment
banker, at a cost of $100,000 per month. In
January 2005, OCA hired Michael F. Gries at
Conway, Del Genio, Gries & Co., LLC, as its
Chief Restructuring Officer, at a cost of
$200,000 per month.
Chapter 11 Petition Date: March 14, 2006
Court: Eastern District of Louisiana (New Orleans)
Judge: Jerry A. Brown
Debtors' Counsel: William H. Patrick, III, Esq.
Heller Draper Hayden Patrick & Horn, LLC
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130
Tel: (504) 568-1888
Fax: (504) 522-0949
ONEIDA LTD: Panel Wants Klestadt & Winters as Conflicts Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Oneida
Ltd. and its debtor-affiliates' bankruptcy cases asks the
Honorable Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York for permission to retain Klestadt &
Winters, LLP, as its conflicts counsel, nunc pro tunc to May 17,
2006.
Klestadt & Winters will represent the Committee in matters
involving Bank of America, Silver Point Capital, and General
Electric Capital Corporation.
Otterbourg, Steindler, Houston & Rosen, P.C., the Committee's
bankruptcy counsel, has a conflict of interest, which may include
but not limited to reviewing prepetition financing transaction
documents between the Debtors and Bank of America, Silver Point
Capital, and General Electric Capital Corporation.
Tracy L. Klestadt, Esq., a partner at Klestadt & Winters,
discloses that the Firm's professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
Tracy L. Klestadt, Esq. Partner $475
Ian R. Winters, Esq. Partner $395
John E. Jureller, Jr., Esq. Partner $375
Sean Southard, Esq. Partner $325
Stacy Bush, Esq. Associate $300
Patrick Orr, Esq. Associate $250
The Firm's paralegals bill at $125 per hour.
Ms. Klestadt assures the Court that Klestadt & Winters, LLP, does
not have any interest adverse to the Debtors, their creditors or
any party-in-interest and 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. Robert J. Stark, Esq., at Brown Rudnick
Berlack Israels LLP represents the Official Committee of Equity
Security Holders. 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.
PASCAGOULA HEALTH: List of 3 Largest Unsecured Creditors
--------------------------------------------------------
Pascagoula Health Care, Inc. filed the list of its 3 largest
unsecured creditors with the U.S. Bankruptcy Court for the
Northern District of Georgia, disclosing:
Entity Nature of Claim Claim Amount
------ --------------- ------------
CLC of Pascagoula, LLC Facility Debt/ $1,063,000
4403 Hospital Road Obligations
Pascagoula, MS 39567
Plaza Health Care, Inc. Prepetition $400,000
c/o William C. Rhodes Damages for
4107 Bellview Street Breach of Lease
Moss Point, MS 39563
Lease Agreement Unknown
Debtor's Rights Unknown
Under the Lease
William C. Rhodes Rights to Unknown
4107 Bellview Street Consulting Fees
Moss Point, MS 39563
Olive Branch, Mississippi based Pascagoula Health Care, Inc. filed
for Chapter 11 protection on April 20, 2006 (Bankr. N.D. Ga. Case
No. 06-20534). William L. Rothschild, Esq., at Ellenberg, Ogier &
Rothschild, P.C., represents the Debtor. When the Debtor filed
for protection from its creditors, it listed estimated assets and
debts of $1 million to $10 million.
PENN OCTANE: Bid Price Deficiency Prompts Nasdaq Delisting Notice
-----------------------------------------------------------------
Penn Octane Corporation received, on May 23, 2006, a written Staff
Determination from The Nasdaq Stock Market's Listing
Qualifications Department.
The Staff Determination stated that Penn Octane has not regained
compliance with the minimum bid price requirement of $1.00 per
share as provided in Marketplace Rule 4310(c)(4) for continued
listing on NASDAQ. Therefore, Penn Octane's common stock is
subject to delisting from the NASDAQ Capital Market at the opening
of business on June 1, 2006. Penn Octane has requested a hearing
before a Nasdaq Listing Qualifications Panel to review the Staff
Determination. There can be no assurance that the Hearing Panel
will grant Penn Octane's request for continued listing. A timely
request for a hearing will stay the delisting pending a
determination by the Hearing Panel. An adverse determination by
the Hearing Panel would result in immediate delisting, whether or
not Penn Octane further appeals the decision of the Hearing Panel.
If Penn Octane's common stock is delisted from the NASDAQ Capital
Market, Penn Octane will continue to file all required reports
with the Securities and Exchange Commission and intends to seek
quotation in the OTC Bulletin Board through a market maker. The
OTC Bulletin Board is a regulated quotation service that displays
real-time quotes, last sale prices and volume information in over-
the-counter securities. Delisting by NASDAQ may result in
decreased market interest in Penn Octane common stock, investors
and stockholders may experience more difficulty in buying and
selling Penn Octane common stock, and Penn Octane's stock price
may decline. In addition, Penn Octane may experience greater
difficulty in obtaining necessary debt and equity capital for
potential acquisitions or the operation of its business.
About Penn Octane
Headquartered in Palm Desert, California, Penn Octane Corporation
(NASDAQ:POCC) -- http://www.pennoctane.com/-- formerly known as
International Energy Development Corporation buys, transports and
sells liquefied petroleum gas for distribution in northeast
Mexico, and resells gasoline and diesel fuel. The Company has a
long-term lease agreement for approximately 132 miles of pipeline,
which connects ExxonMobil Corporation's King Ranch Gas Plant in
Kleberg County, Texas and Duke Energy's La Gloria Gas Plant in Jim
Wells County, Texas, to the Company's Brownsville Terminal
Facility.
* * *
Going Concern Doubt
As reported in the Troubled Company Reporter on May 4, 2006,
Burton McCumber & Cortez, L.L.P., Brownsville, Texas, raised
substantial doubt about the ability of Penn Octane Corporation to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended Dec. 31,
2005.
Burton McCumber pointed to the Company's insufficient cash flow to
pay its obligations when due, inability to obtain additional
financing because substantially all of the Company's assets are
pledged or committed to be pledged as collateral on existing debt,
existing credit facility may be insufficient to finance its
liquefied petroleum gas and Fuel Sales Business, and working
capital deficiency.
PENN TRAFFIC: Audit Panel Completes Inquiry on Allowance Practices
------------------------------------------------------------------
The Audit Committee of the Board of Directors has completed its
internal investigation of The Penn Traffic Company's promotional
allowance practices. The Audit Committee found that the Company
had engaged in certain improper practices principally relating to
the premature recognition of promotional allowances and that these
practices had largely ceased by the time of the Company's Chapter
11 filing under the Bankruptcy Code in May 2003. Penn Traffic
continues to cooperate with the ongoing investigations by the U.S.
Securities and Exchange Commission and the U.S. Attorney's Office.
The Audit Committee also determined, on a preliminary basis, that
these improper practices affected the Company's prior reported
financial results and the Company ultimately may restate its
previously issued financial statements. However, no determination
regarding restatement will be made until the Company completes an
assessment of the financial statement impact.
Penn Traffic has full access to its working capital facility.
At May 26, 2006, Penn Traffic had undrawn availability of
approximately $43.7 million and a 30-day average undrawn
availability of approximately $45.5 million under this revolving
credit facility.
Headquartered in Rye, New York, The Penn Traffic Company operates
109 supermarkets in Pennsylvania, upstate New York, Vermont and
New Hampshire under the BiLo, P&C and Quality trade names. Penn
Traffic also operates a wholesale food distribution business
serving 80 licensed franchises and 39 independent operators.
The Company filed for chapter 11 protection on May 30, 2003
(Bankr. S.D.N.Y. Case No. 03-22945). Kelley Ann Cornish, Esq., at
Paul Weiss Rifkind Wharton & Garrison, represents the Debtors in
their restructuring efforts. When the grocer filed for protection
from their creditors, they listed $736,532,614 in total assets and
$736,532,610 in total debts. The Court confirmed the Debtor's
First Amended Plan of Reorganization on March 17, 2005. The Plan
took effect on Apr. 13, 2005.
MIRANT CORP: Agrees to Pay PEPCO $520 Mil. Under Settlement Pact
----------------------------------------------------------------
Reorganized Mirant Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Northern District of Texas to
approve the settlement agreement it entered into with Potomac
Electric Power Cooperative and other settling parties:
* Conectiv Energy Supply, Inc.;
* PEPCO Energy Services, Inc.;
* PEPCO Gas Services, Inc.;
* PEPCO Holdings, Inc.; and
* Potomac Capital Investment Corporation.
The Debtor and PEPCO have been involved in significant litigation
throughout the Debtors' bankruptcy proceedings.
The parties' disputes mainly relate to an Asset Purchase and Sale
Agreement for Generating Plants and Related Assets between Old
Mirant and PEPCO, a back-to-back arrangement entered into under
the terms of the APSA, and certain other executory contracts and
agreements.
Ian T. Peck, Esq., at Haynes and Boone, LLP, in Dallas, Texas,
tells the Court that with the assistance of William K. Snyder, as
Chapter 11 Examiner for Mirant, the New Mirant Entities and PEPCO
have reached an agreement for the resolution of their disputes.
The Settlement
Under the Settlement Agreement, the Mirant Settling Parties will
assume the APSA, certain agreements with Southern Maryland
Electric Cooperative, and other agreements.
The Mirant Settling Parties are:
* Mirant Corporation, as New Mirant;
* Mirant Power Purchase, LLC;
* MC 2005, LLC;
* Mirant Mid-Atlantic, LLC;
* Mirant Potomac River, LLC;
* Mirant Chalk Point, LLC;
* Mirant Piney Point, LLC;
* Mirant MD Ash Management, LLC;
* Mirant Energy Trading, LLC;
* Mirant Services, LLC; and
* the MC Plan Trust.
The Mirant Settling Parties will reject:
* the Back-to-Back Arrangement; and
* an Assignment and Assumption Agreement, dated December 19,
2000, between PEPCO and certain New Mirant subsidiaries that
PEPCO has asserted creates joint and severable liability on
the part of those subsidiaries for various obligations
assumed by Old Mirant under the APSA.
In addition, the parties will grant each other broad releases
relating to their current disputes.
PEPCO will receive:
* an allowed Mirant Debtor Class 3 - Unsecured Claim, not
subject to offset or reduction for any reason, in an amount
that will result in an aggregate distribution in shares of
common stock of New Mirant; and
* cash having a guaranteed value of $520,000,000 after certain
commissions, fees and expenses have been paid.
PEPCO's Class 3 Claim constitutes damages for rejection of the
Back-to-Back Arrangement and the Assumption Agreement, and for
various other prepetition claims filed by PEPCO against one or
more of the Debtors that are released under the Settlement
Agreement.
A copy of the Settlement Agreement between New Mirant and PEPCO is
available for free at http://ResearchArchives.com/t/s?a6e
Mr. Peck says that the Settlement Agreement concludes almost
three years of intense and costly litigation in the Bankruptcy
Court, the U.S. District Court for the Northern District of
Texas, and the U.S. Court of Appeals for the Fifth Circuit.
Mr. Peck notes that Mirant has entered into a separate settlement
with SMECO. SMECO's Settlement Agreement is part of the overall
resolution of the PEPCO disputes.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally. Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on January 3, 2006. Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring. When the Debtors filed for
protection from their creditors, they listed $20,574,000,000 in
assets and $11,401,000,000 in debts. (Mirant Bankruptcy News,
Issue No. 98; Bankruptcy Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services placed a 'B+' corporate credit
rating on Mirant and said the outlook is stable.
PETER WORKUM: List of 20 Largest Unsecured Creditors
----------------------------------------------------
Peter J. Workum filed the list of his 20 largest unsecured
creditors with the U.S. Bankruptcy Court for the District of
Arizona, disclosing:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Amon Care AG $1,000,000
Zoellnersteig 2
FL-9493 Mauren Lichtenstein CH
Gilbert E. Schoeni Loans $876,963
Muhlestrasse 9
CH 8108 Dallikon
Switzerland
Land Labor & Capital Loans $617,824
Management, LLC
3650 North 40th Avenue
Phoenix, AZ 85019
The Creative Classics Company Loans $530,516
3650 North 40th Avenue
Phoenix, AZ 85019
Thomson Conant PLC Legal Fees $530,000
2398 East Camelback Road
Suite 925
Phoenix, AZ 85016
Pedro Wick Loans $438,481
Hopplenweg 2
8117 Fallenden, Switzerland
Atko Personal Guaranty $378,445
1146 South Sirrine
Mesa, AZ 85210
Pan Am Diversified LLC Loans $350,000
14425 North 14th Street
Phoenix, AZ 85022
Creative Financial Loans $262,842
Solutions LLC
3650 North 40th Avenue
Phoenix, AZ 85019
Swiss Plastering Phoenix, LLC Loans $167,466
Code Hunter Legal Fees $159,777
Jason R. Newburg $135,000
Canada Customs and Revenue Tax Claim $118,419
Agency Technology Center
Kathleen Hennig $50,000
MCA Financial Group, Ltd. Professional $13,000
Services
Pan Am Global Trading LLC Loans $2,500
Alberta Securities Commission Unknown
Brevik & Company Legal Fees Unknown
EnerGCorp, Inc. Asserted Claim Unknown
Groia & Company Unknown
Peter J. Workum filed for Chapter 11 protection on April 24, 2006
(Bankr. D. Ariz. Case No. 06-01146). Steven N. Berger, Esq., at
Engelman Berger, P.C., represents the Debtor. When the Debtor
filed for protection from his creditors, he listed estimated
assets of $10 million to $50 million, and estimated debts of $1
million to $10 million.
PINNACLE CBO: Moody's Lowers Rating on $56 Million Notes to C
-------------------------------------------------------------
Moody's Investors Service lowered its ratings on two classes of
notes issued by Pinnacle CBO, Limited:
* $239,500,000 Senior Secured Fixed Rate Notes due 2009 and
* $56,000,000 Second Priority Senior Secured Fixed Rate Notes
due 2009.
As a result of the action, the Senior Notes are rated Baa3 on
watch for possible downgrade and the Second Priority Senior Notes
are rated C.
The rating actions reflect the deterioration in the credit quality
of the transaction's underlying collateral portfolio, which
consists primarily of high yield and emerging markets securities,
the occurrence of asset defaults and par losses, and the continued
failure of certain collateral and structural tests, according to
Moody's.
As reported in the April 2006 trustee report, the weighted average
rating factor of the portfolio was 3213, compared to the
transaction's trigger level of 2450, the diversity score was 7,
compared to the trigger level of 32, the senior interest coverage
ratio was 134%, compared to the trigger level of 142%, the second
priority overcollateralization ratio was 24%, compared to the
trigger level of 107%, and the second priority interest coverage
ratio was 20%, compared to the transaction's trigger level of
113%.
Rating Action: Downgrade
Issuer: Pinnacle CBO, Limited
Tranche description:
* $239,500,000 Senior Secured Fixed Rate Notes due 2009
Previous Rating: A1 on watch for possible downgrade
New Rating: Baa3 on watch for possible downgrade
Tranche description:
* $56,000,000 Second Priority Senior Secured Fixed Rate Notes
due 2009
Previous Rating: Caa1 on watch for possible downgrade
New Rating: C
PINNACLE ENT: Buying President's St. Louis Casino for $31.5 Mil.
----------------------------------------------------------------
Pinnacle Entertainment, Inc., gets to buy 100% of the issued and
outstanding common stock of President Riverboat Casino-Missouri,
Inc., and trademarks owned by President Casinos, Inc., for
$31.5 million after the bankruptcy court handling the chapter
11 cases of President Casinos and President Riverboat approved
the deal.
The Honorable Kathy A. Surratt-States of the U.S. Bankruptcy Court
for the Eastern District of Missouri gave her stamp of approval
after a scheduled May 16, 2006, auction didn't push through since
no other bidder expressed interest.
PRC-MO owns and operates a gaming casino on board the Admiral on
Laclede's Landing in St. Louis, Missouri and is the owner of all
of the assets used in the operation of the casino
The Debtors initially planned to sell the assets to Columbia
Sussex Corp. and had a plan of reorganization confirmed based on
the planned sale. However, Columbia backed out in October 2005, a
year after it won the auction due to the possibility that the
Missouri Gaming Commission might not approve the sale. The
confirmed plan didn't take effect and had to be abandoned.
Penn National Gaming, Inc., the stalking horse bidder at the first
auction, which bid for $28 million will be paid a breakup fee from
the proceeds of the sale. Libra Securities, LLC, the investment
banker who advised and assisted the Debtors in selling the assets
will also be paid a $900,000 commission. The remaining funds will
be used to pay off creditors.
About President Casinos
Headquartered in St. Louis, Missouri, President Casinos Inc. --
http://www.presidentcasino.com/-- currently owns and operates a
dockside gaming casino in St. Louis, Missouri through its wholly
owned subsidiary, President Missouri. The Debtor filed for
chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No.
02-53055). On July 11, 2002, substantially all of Debtor's other
operating subsidiaries filed for chapter 11 protection in the same
Court. The Honorable Judge Edward Gaines ordered the transfer of
President Casino's chapter 11 cases from Mississippi to Missouri.
The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No.
02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn
LLP, represents the Debtors in their restructuring efforts. David
A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP,
represents the Official Committee of Unsecured Creditors. The
Company's balance sheet at Nov. 30, 2005 showed assets totaling
$66,292,000 and debts totaling $75,531,000.
About Pinnacle Entertainment
Headquartered in Las Vegas, Nevada, Pinnacle Entertainment, Inc.
-- http://www.pnkinc.com/-- owns and operates casinos in
Nevada, Louisiana, Indiana and Argentina, owns a hotel in
Missouri, receives lease income from two card club casinos in
the Los Angeles metropolitan area, has been licensed to operate
a small casino in the Bahamas, and owns a casino site and has
significant insurance claims related to a hurricane-damaged
casino previously operated in Biloxi, Mississippi. Pinnacle
opened a major casino resort in Lake Charles, Louisiana in May
2005 and a new replacement casino in Neuquen, Argentina in July
2005.
* * *
As reported in the Troubled Company Reporter on May 24, 2006,
Standard & Poor's Ratings Services revised its CreditWatch
implications on Las Vegas-based casino owner and operator Pinnacle
Entertainment Inc. to positive from negative.
As reported in the Troubled Company Reporter on March 20, 2006,
Moody's Investors Service placed the ratings of Pinnacle
Entertainment, Inc. on review for possible upgrade. Pinnacle
ratings affected include its B2 corporate family rating, B1 senior
secured bank loan rating, and Caa1 senior subordinated debt
rating.
As reported in the Troubled Company Reporter on Mar. 15, 2006,
Fitch Ratings has placed the ratings of Pinnacle Entertainment
(NYSE: PNK) on Rating Watch Negative. The ratings affected
include:
-- Issuer default rating 'B';
-- Senior secured credit facility rating 'BB/RR1';
-- Senior subordinated note rating 'CCC+/RR6'.
POGO PRODUCING: Moody's Rates $400 Million Sr. Sub. Notes at B2
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Pogo Producing
Company's pending $400 million of seven year senior subordinated
notes. Note proceeds would fund the majority of Pogo's pending
$750 million acquisition of Latigo Petroleum. Latigo's properties
are located in the Permian Basin and, to a lesser degree, the
Texas Panhandle.
Moody's also affirmed Pogo's Ba3 corporate family rating, existing
B2 senior subordinated note ratings, and the stable rating
outlook.
Moody's downgraded Pogo's Corporate Family Rating from Ba2 to Ba3
on May 30, 2006. Per Moody's current notching practice for senior
subordinated notes, Moody's downgraded Pogo's senior subordinated
note rating from Ba3 to B2. That action concluded a review for
downgrade begun April 17, 2006 when Pogo announced the Latigo
acquisition and sale of 50% of its Gulf of Mexico properties for
$500 million, and followed a sustained period of operating
weakness and portfolio restructuring.
Pogo's standing within its ratings had been weak given its rising
unsustainable reserve replacement costs, inconsistent production
trends, and a sharp decline in organic reserve replacement.
The stable rating outlook recognizes that up-cycle prices and cash
flows before capital spending provide a cushion of time during
which Pogo will need to demonstrate stabilized-to-rising
sequential quarter trends for production at tolerable production
and reserve replacement costs for the rating, as well as restrain
further leverage this year.
To retain the stable outlook, towards the end of 2006 and
throughout 2007, Pogo will also need to generate sustained debt
reduction from current levels that are elevated after recent
acquisitions. The rating outlook and ratings could be pressured
during the course of 2006 if sequential quarter production,
reserve replacement, full cycle costs continue to remain weak,
and/or Pogo's leverage rises beyond current forecasted levels.
Beginning with first quarter 2007, Pogo will additionally need to
significantly reduce leverage on proven developed reserves in
2007. The ratings would also be pressured if management engages
in further material shareholder friendly activities that add debt
and/or delay debt reduction.
Per Moody's global ratings methodology for independent exploration
and production firms, on historic pro-forma estimates, Pogo's
composite operating, financial, and strategy profile maps to a B2
corporate family rating. Leverage maps to the B category, overall
returns also map to the B category, and historic reserve
replacement costs map to the Caa range. Pogo displays a very high
full-cycle cost structure, poor organic reserve replacement
trends, and very high leverage on proven developed reserves.
However, other factors warrant a Ba3 rating at this time. These
factors include a high price environment to assist Pogo's post-
acquisition reinvestment activity, a comparatively large reserve
and production scale and diversification for the new ratings, the
fact that Pogo's acquisitions and divestures are yielding a
reserve and prospect portfolio likely to have lower reinvestment
risk, expected lower reserve replacement costs on the newer
properties versus the divested properties, a seasoned historically
fiscally conservative management team, the fact that Pogo's
leverage was incurred for asset acquisitions, and that management
is expected to reduce leverage materially in 2007.
The ratings are also supported by longer lived pro-forma
production, having a PD reserve life in the range of 8 years
compared to approximately 5 years in 2003 and 6 years in 2006.
Pogo Producing Company is headquartered in Houston, Texas.
POGO PRODUCING: S&P Rates Proposed $400 Mil. Sr. Sub. Notes at B+
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to oil
and gas exploration and production company Pogo Producing Co.'s
proposed $400 million senior subordinated notes due 2013.
Proceeds from the note offering will be used to repay senior debt
that was used to finance its recent acquisition of Latigo
Petroleum Inc.
The outlook is negative. As of March 31, 2006, Houston, Texas-
based Pogo had $1.6 billion of debt outstanding.
"We are concerned about the company's ability to successfully
integrate the Northrock and Latigo acquisitions and improve
operational results while also meeting its increased capital
expenditures and reducing its leverage to levels that are more
appropriate for the current ratings," said Standard & Poor's
credit analyst Brian Janiak.
The negative outlook incorporates Pogo's increased leverage for
the proposed transaction, combined with the:
* company's declining production levels;
* increasing costs; and
* its continued operational underperformance in 2005.
PRESIDENT CASINOS: Court Okays $31.5 Mil. Asset Sale to Pinnacle
----------------------------------------------------------------
The Honorable Kathy A. Surratt-States of the U.S. Bankruptcy Court
for the Eastern District of Missouri gave President Casinos, Inc.,
and President Riverboat Casino-Missouri, Inc., permission to sell
100% of the issued and outstanding common stock of PRC-MO and
trademarks owned by PCI to Pinnacle Entertainment, Inc., for
$31.5 million.
PRC-MO owns and operates a gaming casino on board the Admiral on
Laclede's Landing in St. Louis, Missouri and is the owner of all
of the assets used in the operation of the casino
A scheduled May 16, 2006, auction didn't push through since no
other bidder expressed interest.
The Debtors initially planned to sell the assets to Columbia
Sussex Corp. and had a plan of reorganization confirmed based on
planned sale. But Columbia backed out in October 2005, a year
after it won the auction due to the possibility that the Missouri
Gaming Commission might not approve the sale. The confirmed plan
didn't take effect and had to be abandoned.
Penn National Gaming, Inc., the stalking horse bidder at the first
auction, which bid for $28 million will be paid a breakup fee from
the proceeds of the sale. Libra Securities, LLC, the investment
banker who advised and assisted the Debtors in selling the assets
will also be paid a $900,000 commission. The remaining funds will
be used to pay off creditors.
About Pinnacle Entertainment
Headquartered in Las Vegas, Nevada, Pinnacle Entertainment, Inc.
-- http://www.pnkinc.com/-- owns and operates casinos in
Nevada, Louisiana, Indiana and Argentina, owns a hotel in
Missouri, receives lease income from two card club casinos in
the Los Angeles metropolitan area, has been licensed to operate
a small casino in the Bahamas, and owns a casino site and has
significant insurance claims related to a hurricane-damaged
casino previously operated in Biloxi, Mississippi. Pinnacle
opened a major casino resort in Lake Charles, Louisiana in May
2005 and a new replacement casino in Neuquen, Argentina in July
2005.
About President Casinos
Headquartered in St. Louis, Missouri, President Casinos Inc. --
http://www.presidentcasino.com/-- currently owns and operates a
dockside gaming casino in St. Louis, Missouri through its wholly
owned subsidiary, President Missouri. The Debtor filed for
chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No.
02-53055). On July 11, 2002, substantially all of Debtor's other
operating subsidiaries filed for chapter 11 protection in the same
Court. The Honorable Judge Edward Gaines ordered the transfer of
President Casino's chapter 11 cases from Mississippi to Missouri.
The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No.
02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn
LLP, represents the Debtors in their restructuring efforts. David
A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP,
represents the Official Committee of Unsecured Creditors. The
Company's balance sheet at Nov. 30, 2005 showed assets totaling
$66,292,000 and debts totaling $75,531,000.
PTS INC: Posts $621,930 Net Loss in 2006 First Fiscal Quarter
-------------------------------------------------------------
PTS 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 $621,930 net loss on $134,347 of net sales
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $1,688,729
in total assets and $1,825,274 in total liabilities, resulting in
a $166,486 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $125,818 in total current assets available to pay
$1,762,322 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?a43
Going Concern Doubt
Lynda R. Keeton CPA, LLC, in Las Vegas, Nevada, raised substantial
doubt about PTS 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 failure to generate capital and net losses.
About PTS Inc
PTS, Inc., manufactures and distributes paraplegic and
quadriplegic apparatus known in the market as Glove Box. The
company also offers consulting services for marketing production
design through third party contractors.
REPERFORMING LOAN: S&P Affirms Ten Cert. Classes' Low-B Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on 59
classes of asset-backed certificates from eight Reperforming Loan
REMIC Trust transactions.
The affirmations are based on credit support percentages that are
sufficient to maintain the current ratings. These transactions
benefit from credit enhancement provided by subordination.
As of the April 2006 remittance date, total delinquencies ranged
from 35.18% (series 2005-R3) to 61.98% (series 2005-R1).
Cumulative losses, as a percentage of the original trust balances,
ranged from 0.01% (series 2005-R3) to 0.27% (series 2002-2). The
outstanding pool balances ranged from 29.72% (series 2002-2) to
87.14% (series 2005-R3) of their original sizes.
The collateral for these transactions consists of FHA-insured, VA-
or Rural Housing Service-partially guaranteed, fully amortizing
mortgage loans secured by first liens on one- to four-family
residential properties.
Ratings Affirmed:
Reperforming Loan REMIC Trust
Asset-backed certificates
Series Class Rating
------ ----- ------
2002-2 1M, 2M AA
2002-2 1-B-1, 2B-1 A
2002-2 1B-2, 2B-2 BBB
2002-2 1B-3, 2B-3 BB
2002-2 1B-4, 2B-4 B
2002-R3 M AA
2002-R3 B-1 A
2002-R3 B-2 BBB
2002-R3 B-3 BB
2002-R3 B-4 B
2003-R1 1M, IIM AA
2003-R1 1B1, IIB1 A
2003-R1 1B2, IIB2 BBB
2003-R1 1B3, IIB3 BB
2003-R1 1B4, IIB4 B
2003-R2 M AA
2003-R2 B-1 A
2003-R2 B-2 BBB
2003-R2 B-3 BB
2003-R2 B-4 B
2003-R3 M AA
2003-R3 B-1 A
2003-R3 B-2 BBB
2003-R3 B-3 BB
2003-R3 B-4 B
2003-R4 1A-PO, 1A-IO, 2A-IO, 1A-2A, 1A-2F, 1A-2S AAA
2003-R4 1A-3, 1A-4, 2A AAA
2003-R4 M AA
2003-R4 B-1 A
2003-R4 B-2 BBB
2005-R1 1A-F1, 1A-F2, 1A-S, 2A-1, 2A-2, 2A-PO, 2A-IO AAA
2005-R3 A-F, A-S AAA
2005-R3 M AA
2005-R3 B-1 A
2005-R3 B-2 BBB
REXNORD: Moody's Reviews Low-B Rating on Notes & May Downgrade
--------------------------------------------------------------
Moody's Investors Service placed the ratings of Rexnord
Corporation on review for possible downgrade following the
announcement that an affiliate of the private equity firm, Apollo
Management, had signed an agreement to purchase the Company for
approximately $1.825 billion. The acquisition remains subject to
various regulatory and other conditions and is expected to close
in the third calendar quarter of 2006.
The review reflects the likelihood that the pending
recapitalization will result in a material increase in debt and
weakened credit metrics. The details of the financing, capital
structure and business plan have not been disclosed at this time.
Moody's will withdraw ratings on the existing debt facilities upon
consummation of the recapitalization.
These ratings have been placed under review for downgrade:
* Corporate Family Rating -- B1
* $75 million senior secured revolving credit facility
due 2011 -- B1
* $524 million senior secured term loan B due 2011-- B1
* $225 million of senior subordinated notes due 2012 -- B3
Moody's estimates that the announced purchase price represents an
acquisition multiple of approximately 1.8 times trailing revenues
and 9.0 times pro forma adjusted EBITDA for the year ended March
31, 2006. The review will focus on the debt levels in the new
capital structure, the proposed terms and conditions of the
financing agreements and the new business plan.
Moody's previous rating action on Rexnord was the April 25, 2005
affirmation of corporate family rating at B1 and the assignment of
a new B1 rating for the incremental term loan B raised in
connection with the Falk acquisition.
Rexnord Corporation, headquartered in Milwaukee, Wisconsin, is a
manufacturer power transmission products and conveying components
serving industrial and aerospace end markets. For the year ended
March 31, 2006, Rexnord generated revenues of approximately $1.1
billion.
RIVERSTONE NETWORKS: To File Panel-Approved Plan of Liquidation
---------------------------------------------------------------
RNI Wind Down Corporation, formerly Riverstone Networks, reached
an agreement with its Official Creditors Committee and Official
Equity Holders Committee concerning the key terms of a consensual
plan of liquidation to be filed shortly in the on-going bankruptcy
case pending in the U.S. Bankruptcy Court in Wilmington, Delaware.
The parties plan to file the proposed consensual plan of
liquidation and accompanying proposed disclosure statement in mid-
June.
RNI, currently operating as a debtor-in-possession, currently
intends to pay all allowed claims of creditors in full plus
interest and expects to have sufficient cash remaining to pay a
substantial distribution to stockholders after funding certain
required reserves. One of the reserves to be established will be
an indemnification reserve set aside for claims that might be
brought against current directors or officers of the company.
In an effort to avoid unnecessary uncertainty and delay in making
initial distributions to stockholders, the Company is cooperating
with a statutory investigation by the Equity Holders' Committee
into the company's affairs. The purpose of this statutory inquiry
is to determine whether any legal basis exists for bringing claims
to recover funds for the company's bankruptcy estate. The
Committee's investigation will commence immediately, and the
Committee expects to announce the results of its investigation
before the plan of liquidation is confirmed.
"A primary reason to begin the investigation now is so that the
process of establishing the size of the indemnification reserve is
based as much as possible on facts, not speculation," Interim
President Noah D. Mesel said. "We want the reserves to be as low
as reasonably possible to maximize the initial distribution to
investors, while simultaneously preserving legitimate expectations
and legal entitlements of officers and directors who agreed to
serve the company based in part on their indemnification
agreements."
Based in Santa Clara, California, Riverstone Networks, Inc. --
http://www.riverstonenet.com/-- provides carrier Ethernet
infrastructure solutions for business and residential
communications services. The company and four of its affiliates
filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del.
Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP,
represent the Debtors. Jeffrey S. Sabin, Esq., at Schulte Roth &
Zabel LLP represents the Official Committee of Unsecured
Creditors. As of Dec. 24, 2005, the Debtors reported assets
totaling $98,341,134 and debts totaling $130,071,947.
The Plan is scheduled to be reviewed by the Bankruptcy Court in
mid-September and distributions to creditors and stockholders are
expected to be made by the end of September.
ROTEC INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Rotec Industries, Inc.
333 West Lake Street
Elmhurst, Illinois 60126
Bankruptcy Case No.: 06-10542
Type of Business: The Debtor is an industry leader in
concrete products and concrete placing
technology & solutions.
See http://www.rotec-usa.com/Index.htm
Chapter 11 Petition Date: May 31, 2006
Court: District of Delaware (Delaware)
Judge: Kevin Gross
Debtor's Counsel: Edward J. Kosmowski, Esq.
Young, Conaway, Stargatt & Taylor, LLP
1000 West Street, 17th Floor
P.O. Box 391
Wilmington, Delaware 19899
Tel: (302) 571-6600
Fax: (302) 571-1253
-- and --
Robert E. Richards, Esq.
Sonnenschein Nath and Rosenthal, LLP
7800 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606-6404
Tel: (312) 876-8000
Fax: (312) 876-7934
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
China Three Gorges Judgment $3,057,251
Project Corporation
Deheng Chen Chan, LLC
225 Broadway, Suite 1900
New York, NY 10007
Gulf Insurance (Travelers Bond Surety $1,367,121
Indemnity Co.) Related Claim
O'Hagen Smith & Amundsen
150 North Michigan Avenue
Suite 3300
Chicago, IL 60601
Grays Travel Trade $117,763
60 Revere Drive, Suite 900
Northbrook, IL 60062
RM Industries Trade $111,820
Grimm Metal Fabricators Trade $86,180
DC Transport, Inc. Trade $46,719
Spring Grove Distributors Trade $37,965
Apache Hose & Rubber, Inc. Trade $37,525
Motion Industries Trade $26,130
Scheer's Inc. Trade $24,667
DHL Express (USA) Inc. Trade $22,582
Mulchay, Pauritsch, Salvador Trade $18,960
And Co., Ltd.
Pozzo Mack Sales and Trade $15,884
Service, Inc.
Muldoon & Muldoon Trade $14,315
Sakash Company Trade $10,791
Provena St. Joseph Hospital Employee Health $9,538
Reimbursement
Jantzen International, Ltd. Trade $9,415
Airgas Trade $7,763
Johnson, Westra Trade $7,626
Broecker, et al.
M I Napa Auto Parts Trade $6,700
SAINT VINCENTS: Can Pay $1 Mil. Break-Up Fee to Caritas Health
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Saint Vincents Catholic Medical Centers of New York and
its debtor-affiliates to pay a $1 million break-up fee to Caritas
Health Care Planning, Inc.
As reported in the Troubled Company Reporter on May 16, 2006, the
Debtors entered into an Asset Purchase Agreement dated May 9,
2006, with Caritas Health Care Planning, Inc., an affiliate
of Wyckoff Heights Medical Center, for the sale of the Mary
Immaculate Hospital and St. John's Queen's Hospital located in
Queens, New York, subject to higher or better offers received
through a bidding process and auction.
The Purchase Agreement between the Debtors and Caritas Health
provides that in the event a transaction with a different
Qualified Bidder is consummated and Caritas Health Care has not
committed a material breach of the Purchase Agreement, it will be
entitled to a Break-Up Fee of $1,000,000 and an Expense
Reimbursement of up to $400,000.
If the Debtors exercise their right to terminate the Purchase
Agreement for the reason that the Sale has not closed by
Dec. 31, 2006, and:
(i) Caritas Health Care has received approval of its
certificate of need at the time of termination;
(ii) an action or failure to act by a governmental body has
prevented the parties from closing the Sale; and
(iii) at the time of termination, Caritas Health Care was
otherwise capable of closing the Sale;
they will pay Caritas Health Care an Expense Reimbursement of
up to $750,000.
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: Spring Street Agrees to Lease Rejection
-------------------------------------------------------
In April 1997, Saint Vincent Catholic Medical Center entered into
a lease agreement with Spring Street Associates, L.P., also known
as Spring Street Associates Ltd. Pursuant to the Lease, SVCMC
leases a nonresidential real property located at 131-137 Spring
Street, New York.
The Lease has a term of 10 years and 15 days, which expires on
April 30, 2007, subject to SVCMC's option to extend it.
At the time it entered into the Lease, SVCMC provided Spring
Street Associates with a $23,869 security deposit, representing
one and one-fifth month's rent for the Premises. As of March 31,
2006, the Security Deposit was $27,780.
The Premises consists of office space, which is divided into two
office suites of equal size. By agreement, the Debtors sublease
one of these suites to Spring Ob/Gyn P.C., a private group of
physicians. The other suite is currently unoccupied and vacant.
The Sublease expired as of Dec. 31, 2002. However, the
Debtors represent that Spring Ob/Gyn continues to occupy and
sublease Suite 1 from the Debtors on a monthly basis.
The Debtors previously sublet Suite 2, however, the sublease
expired and the subtenant vacated Suite 2 in September 2005.
On account of the Spring Ob/Gyn Sublease, the Debtors collect a
monthly rent of $9,400 from Spring Ob/Gyn. This Sublease income
is only sufficient to cover approximately one-third of the
Debtors' monthly obligations associated with the Lease, which are
comprised of approximately $27,657 in rent, plus taxes and
utilities through April 30, 2006, and as of May 1, 2006, that
amount will increase to $28,763.
The Debtors and Spring Street Associates have engaged in
negotiations and have agreed to terminate the Lease.
Accordingly, the parties agree, among others, that:
(a) As of June 30, 2006, the Lease will be deemed rejected and
the Sublease will be terminated;
(b) The Lease with respect to Suite 2 will be terminated
without further delay. Spring Street Associates will
accept surrender of Suite 2;
(c) Spring Street may enter into one or more lease agreements
for all or part of the Premises with a new tenant or with
Spring Ob/Gyn before June 30, 2006. If Spring Street
enters into a New Lease with Spring Ob/Gyn for Suite 1,
which commences during the Interim Period or otherwise
begins to collect rent from Spring Ob/Gyn during the
Interim Period, Spring Street Associates will:
-- notify the Debtors;
-- be entitled to collect and retain the rent paid by
Spring Ob/Gyn under the New Lease; and
-- deduct on a monthly basis, $9,400 from the Debtors'
Remaining Obligations for the balance of the Interim
Period;
(d) In the event Spring Street Associates finds a new tenant
for the entire premises before June 30, 2006, the Final
Lease Termination Date may be accelerated;
(e) Spring Street Associates will not be entitled to recover
any property of the Debtors or their estates, will not
have an allowed claim or an allowed administrative expense
claim against any of the Debtors or any of the Debtors'
employees, and will have no right to share in any
distribution from any of the Debtors' estates;
(f) Approximately $2,500 will be assessed as a Repair Claim,
which will be deducted by Spring Street Associates from
the Security Deposit on the Partial Surrender and
Termination Date;
(g) Before July 20, 2006, Spring Street Associates will
deliver to the Debtors an accounting of all Remaining
Obligations, less any New Tenant Income.
(h) The parties will release and forever discharge each other
from any and all Claims;
(i) Any of the Debtors' property remaining at the Premises
after the Final Termination Date will be deemed abandoned
and Spring Street Associates may dispose of them.
However, as of the Partial Surrender and Termination Date,
Spring Street Associates will have the right to remove any
of the Debtors' property remaining in Suite 2.
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)
SECURITY INTELLIGENCE: Reports $1.4MM Net Loss in Fiscal 3rd Qtr.
-----------------------------------------------------------------
Security Intelligence Technologies, Inc., incurred a $1,456,621
net loss for the three months ended March 31, 2006, a $6,062,480
decrease from the $7,519,101 loss reported for the same period in
2005.
Revenues for the nine months ended March 31, 2006, were
$2,180,854, a decrease of $320,052 or 12.9%, from revenues of
$2,500,906 for the nine months ended March 31, 2005. The Company
attributes the decrease primarily as a consequence of decreased
sales from its "bombjamming" systems partially offset by an
increase of $463,299 in revenues recognized from the termination
of distribution agreements with non refundable deposit balances to
$562,463 in the 2006 Period from $99,164 in the 2005 Period.
The Company's balance sheet at March 31, 2006 showed $713,141 in
total assets ant $6,014,059 in total liabilities, resulting in a
$5,300,918, stockholders' deficit.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?a4a
Going Concern Doubt
Demetrius & Company, LLC, expressed substantial doubt about
Security Intelligence's ability to continue as a going concern
after it audited the Company's financial statements for the year
ended June 30, 2005. The auditing firm pointed to the Company's
operating losses in fiscal 2005 and 2004, negative cash flows from
operations, and limited cash and other resources to fund future
operations.
Based in New Rochelle, New York, Security Intelligence
Technologies, Inc., and its wholly owned subsidiaries, designs,
assembles and sells security and surveillance products and
systems. The Company purchases finished items for resale from
independent manufacturers, and also assembles off-the-shelf
electronic devices and other components into proprietary products
and systems at its own facilities.
SECURITIZED ASSET: DBRS Puts BB Rating on $6.1 Million Class B-5
----------------------------------------------------------------
Dominion Bond Rating Service assigned these ratings to the
Mortgage Pass-Through Certificates, Series 2006-NC2 issued by
Securitized Asset Backed Receivables LLC Trust 2006-NC2.
* $271.2 million, Mortgage Pass-Through Certificates,
Series 2006-NC2, Class A-1 New Rating AAA
* $113.0 million, Mortgage Pass-Through Certificates,
Series 2006-NC2, Class A-2 New Rating AAA
* $97.2 million, Mortgage Pass-Through Certificates,
Series 2006-NC2, Class A-3 New Rating AAA
* $49.7 million, Mortgage Pass-Through Certificates,
Series 2006-NC2, Class M-1 New Rating AA
* $32.2 million, Mortgage Pass-Through Certificates,
Series 2006-NC2, Class M-2 New Rating A
* $9.5 million, Mortgage Pass-Through Certificates,
Series 2006-NC2, Class M-3 New Rating A (low)
* $8.6 million, Mortgage Pass-Through Certificates,
Series 2006-NC2, Class B-1 New Rating BBB (high)
* $6.4 million, Mortgage Pass-Through Certificates,
Series 2006-NC2, Class B-2 New Rating BBB
* $6.1 million, Mortgage Pass-Through Certificates,
Series 2006-NC2, Class B-3 New Rating BBB (low)
* $4.3 million, Mortgage Pass-Through Certificates,
Series 2006-NC2, Class B-4 New Rating BB (high)
* $6.1 million, Mortgage Pass-Through Certificates,
Series 2006-NC2, Class B-5 New Rating BB
The AAA ratings on the Class A Certificates reflect 21.55% of
credit enhancement provided by the subordinate classes, initial
overcollateralization, and monthly excess spread.
The AA rating on Class M-1 reflects 13.45% of credit enhancement.
The "A" rating on Class M-2 reflects 8.20% of credit enhancement.
The A (low) rating on Class M-3 reflects 6.65% of credit
enhancement.
The BBB (high) rating on Class B-1 reflects 5.25% of credit
enhancement. The BBB rating on Class B-2 reflects 4.20% of credit
enhancement. The BBB (low) rating on Class B-3 reflects 3.20% of
credit enhancement. The BB (high) rating on Class B-4 reflects
2.50% of credit enhancement. The BB rating on Class B-5 reflects
1.50% of credit enhancement.
The ratings on the Certificates also reflect the quality of the
underlying assets and the capabilities of Wells Fargo Bank,
National Association as Servicer, as well as the integrity of the
legal structure of the transaction.
U.S. Bank National Association will act as Trustee. The trust
will enter into an interest rate swap agreement with Barclays Bank
PLC. The trust will pay to the Swap Provider a fixed payment of
5.337% per annum in exchange for a floating payment at LIBOR from
the Swap Provider. In addition, the Certificateholders will
receive the benefits of an interest rate cap agreement with a
strike of 5.12% with Barclays Bank PLC.
Interest and principal payments collected from the mortgage loans
will be distributed on the 25th day of each month commencing in
June 2006. Interest will be paid first to the Class A
Certificates on a pro rata basis and then sequentially to the
subordinate Certificates. Until the step-down date, principal
collected will be paid exclusively to the Class A Certificates
unless their respective note balances have been reduced to zero.
After the step-down date, and provided that certain performance
tests have been met, principal payments will be distributed among
all classes on a pro rata basis. In addition, provided that
certain performance tests have been met, the level of
overcollateralization may be allowed to step down to 3.00% of the
then-current balance of the mortgage loans.
All of the mortgage loans in the Underlying Trust were originated
or acquired by New Century Mortgage Corporation. As of the cut-off
date, the aggregate principal balance of the mortgage loans is
$613,603,037. The weighted average mortgage rate is 8.303%, the
weighted average FICO is 619, and the weighted average original
loan-to-value ratio is 80.81%, without taking into consideration
the combined loan-to-value on the piggybacked loans.
SENSOR SYSTEM: Posts $523,284 Net Loss in 2006 1st Fiscal Quarter
-----------------------------------------------------------------
Sensor System Solutions, Inc., filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 26, 2006.
The Company reported a $523,284 net loss on $530,098 of net sales
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $974,195 in
total assets and $3,002,737 in total liabilities, resulting in a
$2,028,542 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $718,916 in total current assets available to pay
$2,950,888 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?a17
Going Concern Doubt
As reported in the Troubled Company Reporter on May 31, 2006,
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.
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.
SIM SHOLEM: Case Summary & 21 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Sim Sholem Realty Inc.
545 Broadway, Suite 4
Brooklyn, New York 11206
Bankruptcy Case No.: 06-11235
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Tashirs Shi Ltd. 06-11236
Republic Finishing, Inc. 06-11237
Quality Knits, Inc. 06-11238
Type of Business: The Debtors are project contractors and real
estate developers.
Chapter 11 Petition Date: June 1, 2006
Court: Southern District of New York (Manhattan)
Judge: Robert D. Drain
Debtors' Counsel: Robert R. Leinwand, Esq.
Robinson Brog Leinwand Greene
Genovese & Gluck P.C.
1345 Avenue of the Americas, 31st Floor
New York, New York 10105
Tel: (212) 586-4050
Total Assets Total Debts
------------ -----------
Sim Sholem Realty Inc. $1,071,610 $508,422
Tashirs Shi Ltd. $0 $8,321
Republic Finishing, Inc. $0 $0
Quality Knits, Inc. $0 $33,621
A. Sim Sholem Realty Inc.'s 19 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Zumck Realty $219,399
66 West 38 Street
New York, NY 10018
Certified Lumber $40,000
470 Kent Avenue
Brooklyn, NY 11205
M&S Developers $36,000
467 Flushing Avenue
Brooklyn, NY 11206
Cong. Ohel Baurech Krasna $30,000
Kirkpatrick & Lockhart $25,000
CEF Realty $20,000
Insure Secure $14,654
Mayer Rispler Co. $9,500
Business Strategy Advisors $7,000
Keyspan $4,359
Computer Corner $4,215
Roger Archibald $2,000
Sunrise Realty $1,855
Morris Werner $1,800
Gelfand $1,500
Con Edison $1,395
Allied Waste $1,235
Best Rated Appraiser $1,000
United Concordia $390
B. Tashirs Shi Ltd.'s Largest Unsecured Creditor:
Entity Claim Amount
------ ------------
Con Edison $8,321
JAF Station Box 1702
New York, NY 10116
C. Republic Finishing, Inc. does not have any creditors.
D. Quality Knits, Inc.'s Largest Unsecured Creditor:
Entity Claim Amount
------ ------------
Metro Fuel Oil Corp. $33,621
c/o Corash & Hollender, P.C.
1200 South Avenue, Suite 201
Staten Island, NY 10314
SOUTHEASTERN MOBILE: List of 19 Largest Unsecured Creditors
-----------------------------------------------------------
Southeastern Mobile Diagnostics, Inc. filed the list of its 20
largest unsecured creditors with the U.S. Bankruptcy Court for the
Eastern District of Tennessee, disclosing:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service Federal Taxes $479,368
710 Locust Street
Knoxville, TN 37902
Internal Revenue Service Back Taxes $88,652
P.O. Box 21126
Philadelphia, PA 19114
Leona Watson Loan $70,000
P.O. Box 2388
Cleveland, TN 37312
Medlink Imaging, LLC Business Services $64,800
The Hartford Worker's $20,724
Compensation
MBNA America Credit Card $16,000
Capitol One Card FSB Credit Card $13,000
Advanta Bank Corporation Credit Card $11,431
Crown Bank Leasing X-Ray Scanner $10,298
AmSouth Bank Loans $9,549
Viking Office Products Office Supplies $4,500
Innovative Insurance Group Auto Insurance $3,810
Mike Lowe $3,555
Century 21 Apartment Rental $3,500
United Parcel Service Delivery Services $2,674
AmSouth Bank Loans $2,462
Bill McCormick $2,390
Knox County Clerk Property Taxes $1,881
Machine Fabrication and Repairs $1,005
Repair, Inc.
Based in Knoxville, Tennessee, Southeastern Mobile Diagnostics,
Inc. sells and distributes x-ray equipment and supplies. The
Debtor filed for chapter 11 protection on April 26, 2006 (Bankr.
E.D. Tenn. Case No. 06-30850). Russell L. Egli, Esq., at
Lockridge & Valone, PLLC, represents the Debtor. When the Debtor
filed for protection from its creditors, it listed estimated
assets of $1 million to $10 million, and debts of $500,000 to $1
million.
SPECIALTY FOODS: Continues Talks with Lenders on Loan Default
-------------------------------------------------------------
Specialty Foods Group Income Fund provided a default status update
pursuant to the alternate information guidelines of the Ontario
Securities Commission. These guidelines contemplate that the Fund
will normally provide bi-weekly updates on its affairs until such
time as it is in compliance with its filing obligations under
Canadian securities laws.
On May 26, 2006, the Fund reported that SFG has been continuing
negotiations with financial institutions and potential sources of
capital to refinance the SFG Companies' existing term and
revolving credit facilities. While there can be no assurance that
new financing arrangements will be obtained, SFG is engaged in
extensive negotiations, and parties are conducting due diligence,
in an attempt to arrange new financing.
Because the new financing is not anticipated to be in place prior
to May 31, 2006, the date by which the fund must file its
financial statements, the entire $43,000,000 and $30,400,000
amounts drawn on the SFG Companies' term and revolving facilities
as of Dec. 31, 2005, respectively, will be classed as current
rather than long-term debt on the balance sheet. As a result, the
audited financial statements of the Fund will include disclosure
of a going concern footnote addressing the proposed debt
restructuring and management's plans in response to the 2005
operating loss.
Specialty Foods Group Income Fund (TSX: HAM.UN) is an open-ended,
limited purpose trust established under the laws of the Province
of Ontario. SFG is a leading independent U.S. producer and
marketer of premium branded and private-label processed meat
products. SFG produces a wide variety of products such as franks,
hams, luncheon meats, dry sausage and delicatessen meats. These
products are sold to a diverse customer base in the retail (e.g.,
supermarkets) and foodservice (e.g., restaurants) sectors. SFG
sells products under a number of leading national and regional
brands such as Nathan's, Field, Fischer's, Mosey's, Liguria,
Alpine Lace and Scott Petersen as well as on a private-label
basis.
STARINVEST GROUP: March 31 Working Capital Upside Down by $1 Mil.
-----------------------------------------------------------------
StarInvest Group, Inc., fka Exus Global, Inc., filed its first
quarter financial statements for the three months ended March 31,
2006, to the Securities and Exchange Commission on May 18, 2006.
The Company reported a $571 net loss on $80,124 of revenues for
the year three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $2,807,933
in total assets, $1,248,186 in total liabilities, and $1,559,747
in stockholders' equity.
The Company's March 31 balance sheet also showed strained
liquidity with $6,287 in total current assets available to pay
$1,203,186 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?a4d
Going Concern Doubt
Larry O'Donnell, CPA, P.C., raised substantial doubt about
StarInvest 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 negative working capital and accumulated deficit.
StarInvest Group, Inc., fka Exus Global, Inc. --
http://www.starinvestgroup.com/-- specialty investment company
that provides capital and other assistance to small- and medium-
sized technology companies. The Company intends to focus its
portfolio in the these technology sectors: software, Internet, IT
services, media, telecommunications, semiconductors, hardware and
technology-enabled services.
STATE STREET: Apartment Complex Mortgagee Gets Relief from Stay
---------------------------------------------------------------
The United States Bankruptcy Court for the Northern District of
New York granted the mortgagee of the 303-unit Kennedy Plaza
subsidized rent apartment complex located in Utica, New York,
relief from the automatic stay in State Street Associates, L.P.,
and State Street Houses, Inc.'s chapter 11 cases.
In 1971, State Street Houses borrowed $8.1 million from the New
York State Urban Development Corporation, doing business as Empire
State Development Corporation (for which the New York State
Mortgage Loan Enforcement and Administration Corporation acts as
agent) and the New York State Project Finance Agency. The Debtors
have not paid UDC since January 2002.
The lenders moved for relief from the automatic stay. The
Honorable Stephen D. Gerling held a trial in the Bankruptcy Court
and granted that request. Judge Gerling rejected the Lenders'
contention that the Debtors' cases were filed in bad faith.
However, Judge Gerling found that relief from stay was appropriate
because:
(A) the Debtors did not establish that there was a realistic
prospect of an effective reorganization within any
reasonable period of time; and
(B) the Debtors have no equity in the property.
Judge Gerling's Decision is published at 2005 WL 4022334.
Robert N.H. Christmas, Esq., Gregory J. Mascitti, Esq., and
William S. Thomas, Jr., at Nixon Peabody, LLP, represent the New
York State Mortgage Loan Enforcement and Administration
Corporation, New York State Urban Development Corp. and the New
York State Project Finance Agency.
Headquartered in Utica, New York, State Street Houses, Inc., is a
New York Corporation and legal titleholder of Kennedy Plaza
Apartments in Utica, New York. The Company and its affiliate,
State Street Associates, L.P., filed for chapter 11 protection on
May 21, 2004 (Bankr. N.D.N.Y. Case No: 04-63673). When the
Debtors filed for chapter 11 protection, they reported estimated
assets and debts amounting between $10 million to $50 million.
Camille Wolnik Hill, Esq., Daniel B. Berman, Esq., and R. John
Clark, Esq., at Hancock & Estabrook, LLP, represent the Debtors.
SUN MICROSYSTEMS: Board Elects to Abolish Stockholder Rights Plan
-----------------------------------------------------------------
Sun Microsystems Inc.'s board of directors voted to eliminate
Sun's Stockholder Rights Plan. The board also amended Sun's
bylaws to provide that directors will be elected by majority vote
in uncontested elections. These actions cap a series of corporate
governance enhancements enacted over the past year that underscore
Sun's steadfast commitment to governance excellence.
"These actions by our board -- coupled with its approval of the
company's growth plan also announced today -- are indicative of
Sun's reinvigorated commitment to maximizing shareholder value and
enhancing the company's already stellar reputation for tight
corporate governance protocols," Jonathan Schwartz, the Company's
president and chief executive officer, said. "The changes are
consistent with our fiscal year 2007 goals and priorities and will
help us better align our corporate governance practices with the
long-term interests of the company's shareholders."
The Stockholder Rights Plan was originally scheduled to expire on
July 25, 2012. This action is responsive to the expressions of
Sun's stockholders at Sun's 2005 Annual Meeting of Stockholders.
The new policy provides that the board must obtain stockholder
approval prior to adopting a poison pill, unless the board --
including a majority of the independent members of the board -- in
the exercise of its fiduciary responsibilities, determines that,
under the circumstances then existing, it would be in the best
interests of the company and its stockholders to adopt a poison
pill without prior stockholder approval. If a poison pill is
adopted by the board without prior stockholder approval, the
poison pill must provide that it will expire within one year of
adoption unless ratified by stockholders.
The bylaw amendment requiring majority voting for directors
provides that in uncontested elections directors will be elected
by a majority of the votes cast. A majority of the votes cast
means that the number of shares voted for a director must exceed
the number of shares withheld from that director. If a nominee
does not receive a majority of the votes cast, the Corporate
Governance and Nominating Committee of the board will then make a
recommendation to the board as to whether to request the
director's resignation. The board will act on the recommendation
of the Corporate Governance and Nominating Committee. If
requested by the board, the director will tender his or her
resignation. The director is not permitted to participate in the
Corporate Governance and Nominating Committee's recommendation or
the board's decision regarding the resignation. Sun's board of
directors believes that this process provides for a greater level
of accountability of directors to stockholders.
"Sun's board is proud of its track record in the corporate
governance arena," James Barksdale, chairman of Sun's Corporate
Governance and Nominating Committee and presiding director of
Sun's board, said. "We remain dedicated to sound governance
practices and committed to Sun's shareholders."
Over the past year, Sun's board adopted other governance best
practices including:
* a pay-for-performance equity compensation program for its
most senior executives;
* a mandatory retirement age for its Board members;
* a board member to tender his or her resignation if his or her
main job changes;
* the Chairman of the Board and CEO roles;
* a presiding director role on the Board of Directors;
* an annual Board of Directors evaluation; and,
* stock ownership guidelines for Board members and senior
executives.
About Sun Microsystems
Headquartered in Santa Clara, California, Sun Microsystems, Inc.
(Nasdaq: SUNW) -- http://www.sun.com/-- provides products and
services for network computing. It provides network computing
infrastructure solutions that consist of computer systems, network
storage systems, support services, and professional and knowledge
services.
Sun Microsystems, Inc.'s 7-1/2% Senior Notes due Aug. 15, 2006,
and 7.65% Senior Notes due Aug. 15, 2009, carry Moody's Investors
Service's Ba1 rating and Standard & Poor's BB+ rating.
TITAN GLOBAL: Amends Second Quarter Financials Ended Feb. 28
------------------------------------------------------------
Titan Global Holdings, Inc., filed its amended second quarter
financial statements for the three months ended Feb. 28, 2006,
with the Securities and Exchange Commission on May 24, 2006.
The Company's Statement of Operations for the three months ended
Feb. 28, 2006, showed a net loss of $2,597,000 on sales of
$26,003,000.
At Feb. 28, 2006, the Company's balance sheet showed $45,208,000
in total assets and $49,094,000 in total liabilities, resulting in
a $3,886,000 in stockholders' deficit.
The Company's Feb. 28 balance sheet also showed strained liquidity
with $13,214,000 in total current assets available to pay
$30,435,000 in total current liabilities coming due within the
next 12 months.
Reason of Amendment
Titan Global amended its financial statements explaining that the
Company had extensive discussions with the Securities and Exchange
Commission concerning the appropriate accounting for its debt
agreements with Laurus Master Fund, Ltd.
As a result of these discussions, the options, warrants,
registration rights agreement, and prepayment agreement issued to
Laurus in connection with Titan Global's debt agreements have now
been accounted for as derivative instrument liabilities, rather
than as equity. The conversion options related to the debt held
by Laurus, together with other embedded derivative instruments,
have been bifurcated from the debt hosts and accounted for
separately as derivative instrument liabilities.
Full-text copies of the Company's amended financial statements for
the three months ended Feb. 28, 2006, are available for free at
http://researcharchives.com/t/s?a51
Going Concern Doubt
As reported in the Troubled Company Reporter on Jan. 5, 2006, Wolf
& Company, P.C., in Boston, Massachusetts, raised substantial
doubt about Titan Global Holdings, Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the fiscal year ended Aug. 31, 2005. The auditor
pointed to the Company's significant operating losses, high debt
levels, defaults on debt covenants, and negative working capital.
Headquartered in Salt Lake City, Utah, Titan Global Holdings, Inc.
(OTCBB: TTGL) -- http://www.titanglobalholdings.com/-- operates
through three divisions: Oblio Telecom, Inc., Titan PCB East, Inc.
and Titan PCB West, Inc. Oblio is engaged in the creation,
marketing, and distribution of prepaid telephone products for the
wire line and wireless markets and other related activities.
Titan PCB is a printed circuit board manufacturer providing
competitively priced time-sensitive, quality products to the
commercial and military electronics markets. Titan PCB offers
high layer count, fine line production of rigid, rigid-flex and
flex PCBs. Titan PCB targets quick turn and standard delivery
needs from prototype, pre-production through production, using
various standard and advanced materials. Titan PCB combines the
strengths of its design for manufacturing, repetitive quality and
supportive customer service with an extremely cost effective
pricing structure. With this competitive edge, Titan PCB is not
only a reliable resource for all printed circuit board
requirements but also a technical source unmatched in today's PCB
supply chain.
TODD MCFARLANE: Has Until June 30 to File Chapter 11 Plan
---------------------------------------------------------
Todd McFarlane Productions, Inc., obtained permission from the
Hon. Charles G. Case II of the U.S. Bankruptcy Court for the
District of Arizona to further extend the time within which it has
the exclusive right to file a disclosure statement and a plan of
reorganization to June 30, 2006.
The Court will hold a status conference hearing pursuant to
Section 105(a) and (d) of the Bankruptcy Code (1978) at 11:00 a.m.
on June 21, 2006.
Headquartered in Tempe, Arizona, Todd McFarlane Productions, Inc.
-- http://www.spawn.com/-- publishes comic books including Spawn,
Hellspawn, and Sam and Twitch. The Company filed for chapter 11
protection on Dec. 17, 2004 (Bankr. D. Ariz. Case No. 04-21755).
Kelly Singer, Esq., at Squire Sanders & Dempsey, LLP, represents
the Debtor in its restructuring efforts. No Official Committee of
Unsecured Creditors has been appointed in the Debtor's case. When
the Company filed for protection from its creditors, it listed
more than $10 million in assets and more than $50 million in
debts.
TRANSAX INT'L: March 31 Balance Sheet Upside Down by $2.2 Million
-----------------------------------------------------------------
Transax International Limited delivered its first quarter
financial statements for the three months ended March 31, 2006, to
the Securities and Exchange Commission on May 19, 2006.
The Company reported a $629,927 net loss on $981,058 of revenues
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $1,836,246
in total assets and $4,041,575 in total liabilities, resulting in
a $2,205,329 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $691,719 in total current assets available to pay
$3,310,361 in total current liabilities coming due within the next
12 months.
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?a10
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.
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.
UBR PROPERTIES: List of 20 Largest Unsecured Creditors
------------------------------------------------------
UBR Properties LLC filed the list of its 20 largest unsecured
creditors with the U.S. Bankruptcy Court for the Eastern District
of New York, disclosing:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Steves Direct Imports Trade Debt $33,997
1382 B Street
Elmont, New York 11205
Mitch Mosallem Trade Debt $29,500
80 Park Avenue
New York, New York 10016
Sansone Food Products Co. Inc. Trade Debt $24,266
2133 Jericho Turnpike
Garden City Park, New York 11040
American Angus Meats Trade Debt $18,595
Commissioner Of Taxation Taxes $11,689
and Finance
KeySpan Energy Delivery Trade Debt $11,375
Arrow Produce Trade Debt $9,492
Parking Systems Trade $8,395
American International Co. Trade Debt $6,850
LIPA Trade Debt $6,800
Premium Foods Inc. Trade Debt $6,179
MJ Sales Inc. Trade $6,103
Manhattan Beer Distributors Trade Debt $5,163
Fruit & Vegetables Supreme Inc. Trade Debt $4,103
Charmer Industries Trade Debt $3,300
Southern Wine and Trade Debt $3,269
Spirits of New York
Mark A. Brand Provisions Inc. Trade Debt $3,207
Metro Touch Inc. Trade Debt $3,207
Oceanside Pluming & Heating Trade Debt $2,921
United States Treasury Taxes $2,745
Internal Revenue Service
Based in Garden City, New York, UBR Properties LLC operates an
Italian restaurant. The Debtor filed for chapter 11 protection on
April 26, 2006 (Bankr. E.D. N.Y. Case No. 06-70904). Vincent J.
Ancona, Esq., at Ancona Associates, represents the Debtor. When
the Debtor filed for protection from its creditors, it listed
estimated assets of $1 million to $10 million, and estimated debts
of $100,000 to $500,000.
UTAH AIRCRAFT: Unperfected Security Interest Defeats Stay Relief
----------------------------------------------------------------
G & B Aircraft Management sought relief from the automatic stay to
enforce its rights and reclaim five airplanes in Utah Aircraft
Alliance's bankruptcy case. G & B showed the U.S. Bankruptcy
Court for the District of Utah a Purchase Agreements executed
between 2000 and 2002 that say it has title to the aircraft until
the Debtor has made full payment. The Bankruptcy Court held that
G & B is not the owner, does not hold a valid lien on the planes
under Utah law, and FAA registration of the planes in G & B's name
in is meaningless. G & B appealed that decision.
On May 19, 2006, the United States Bankruptcy Appellate Panel for
the Tenth Circuit affirmed the Bankruptcy Court's ruling.
The 10th Cir. BAP's Opinion is published at 2006 WL 1388660 and a
copy of the Slip Opinion is available at
http://www.bap10.uscourts.gov/opinions/05/05-32.pdfat no charge.
Timothy Miguel Willardson, Esq., in Salt Lake City, Utah,
represents G & B Aircraft Management.
Utah Aircraft Alliance filed for chapter 7 protection on Dec. 20,
2004 (Bankr. Utah Case No. 04-40205). Joel T. Marker, Esq., at
McKay Burton and Thurman, represents the Debtor. David E. Smoot,
is the Chapter 7 Trustee liquidating Utah Aircraft Alliance's
estate. Jennifer A. Brown, Esq., and Steven J. McCardell, Esq.,
at Mabey & Murray LC, represent the Chapter 7 Trustee.
VERILINK CORP: Judge Caddell Okays Interim Cash Collateral Use
--------------------------------------------------------------
The Honorable Jack Caddell of the U.S. Bankruptcy Court for the
Northern District of Alabama in Decatur authorized Verilink
Corporation and its debtor-affiliate Larscom, Inc., to use cash
collateral of its secured lenders on an interim basis until June
30, 2006.
The Secured Lenders' consent to the use of cash collateral will
expire at 5:00 p.m., on June 16, 2006, if no auction to sell
substantially all of the Debtors' assets will occur on June 6,
2006, or if there is an auction but the Debtors do not receive
qualified bids providing for a total cash consideration of at
least $7.5 million.
A full-text copy of the cash collateral budget for the month of
June 2006 is available for free at:
http://ResearchArchives.com/t/s?a5d
Objections to the use of cash collateral must be submitted by June
23, 2006. Judge Caddell will convene a cash collateral hearing at
9:30 a.m. on June 28, 2006, at the Federal Building, Cain Street
Entrance, Third Floor Courtroom in Decatur, Alabama.
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: Panel Wants A&M Securities as Financial Advisor
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in
Verilink Corporation and its debtor-affiliate Larscom, Inc.'s
bankruptcy cases asks the Honorable Jack Caddell of the U.S.
Bankruptcy Court for the Northern District of Alabama in Decatur
for permission to retain A&M Securities, LLC, as its financial
advisor, nunc pro tunc to May 3, 2006.
A&M Securities will:
(a) identify and review parties that may have interest in a
transaction;
(b) review materials provided by the Debtor to be given to
parties with a potential interest in a transaction;
(c) provide valuation and financial analyses as the Committee
may require for a transaction or in the Debtors' bankruptcy
cases;
(d) provide testimony in the Debtors' bankruptcy cases on
behalf of the Committee if necessary or requested; and
(e) provide other financial advisory services consistent with
A&M's capabilities as A&M and the Committee deem necessary.
The Committee believes that A&M's efforts will substantially
increase the likelihood of a successful asset sale and eventual
recovery to the general unsecured creditors in this case.
James D. Decker, a managing director at A&M Securities, discloses
that the Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Managing Director $600
Senior Director $500
Director $400
Associate $300
Analyst $200
A&M has agreed to waive any request for a retainer or a success
fee in this engagement.
Mr. Decker assures the Court that A&M Securities, LLC, is
disinterested as that term is defined in Section 101(14) of the
Bankruptcy Code.
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: Has Until August 7 to File Chapter 11 Plan
---------------------------------------------------------
The Honorable Jack Caddell of the U.S. Bankruptcy Court for the
Northern District of Alabama in Decatur ordered Verilink
Corporation and its debtor-affiliate Larscom, Inc., to file a
disclosure statement and chapter 11 plan by Aug. 7, 2006.
If the Debtors will fail to file a disclosure statement and plan,
they have to ask the Court to convert their cases to chapter 7
liquidation proceedings. Otherwise, the Court will dismiss their
cases without further order.
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.
VISTEON: Moody's Rates First Lien $800 Million Term Loan at B1
--------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Visteon
Corporation's new $800 million secured term loan and affirmed the
company's B2 Corporate Family and B3 Senior Unsecured ratings.
The Speculative Grade Liquidity rating of SGL-3 was affirmed and
represents adequate liquidity over the next 12 months. The
actions follow Visteon obtaining commitments for $1.5 billion of
credit commitments to refinance its bank credit facilities which
were otherwise set to expire in June 2007.
When completed, the new financing will buttress Visteon's
liquidity profile, extend the company's debt maturity profile and
better position the company to execute its restructuring
initiatives over the intermediate term.
Those benefits offset a marginal increase in indebtedness that may
occur, should the new facilities be fully drawn, and performance
metrics that on a trailing 12 month basis are weak for the rating
category.
The positive attributes from the new financing combined with
anticipated progress in the company's restructuring program,
support the current Corporate Family rating. The outlook remains
negative.
Ratings assigned:
Visteon Corporation
* 1st Lien $800 million term loan, B1
Ratings updated:
Visteon Corporation
* Speculative Grade Liquidity, SGL-3
Ratings affirmed:
Visteon Corporation
* Corporate Family, B2
* Short term rating, Not prime
* Senior Unsecured Notes, B3
* Shelf ratings for senior unsecured, subordinated and
preferred, (P)B3, (P)Caa2, and (P)Caa3 respectively
Visteon Capital Trust I
* Shelf rating for trust preferred, (P)Caa2
Visteon's current secured bank credit facilities are not rated. In
addition to the new term loan, Visteon has obtained commitments
for a $400 million asset backed revolving credit and a $300
million securitization program for its material European
subsidiaries.
Initially, the company will close under the term loan and use
proceeds to retire existing bank borrowings. In the interim,
through an amendment, commitments under the current $772 million
revolving credit facility will be reduced to $500 million, and
then terminated upon closing of the new asset backed facility.
The asset backed revolving credit facility and the securitization
program are not rated. The last rating action was on January 18,
2006 at which time the Speculative Grade Liquidity rating was
raised to SGL-3 from SGL-4 and the long-term ratings were
affirmed.
Visteon's current bank credit facilities total $1,363 million and
are scheduled to mature in June 2007. Approximately $691 million
was outstanding under those facilities at March 31, 2006 with an
additional $104 million of letters of credit issued under the
revolving credit facility. Upon closing the asset backed
revolving credit, letters of credit will be re-issued under the
new facility. No borrowings are anticipated under the asset
backed revolving credit or European securitization program at
their respective closings.
The new term loan will have a first lien against the company's
shareholdings in certain subsidiaries, which will be limited to
65% in the case of certain international subsidiaries, and
intercompany notes due from subsidiaries. It will have a second
lien against collateral pledged to the new domestic asset backed
revolving credit.
That collateral package will consist of accounts receivable,
inventory, intangible assets, and certain property, plant and
equipment. Liens against the latter will be limited to the extent
required to avoid providing equal and ratable security to
unsecured note holders. In addition, the term loan will benefit
from up-streamed guarantees from material domestic subsidiaries.
Visteon's leverage will not change materially as a result of the
new financing. Similarly, its operating profits and prospects for
free cash flow are not affected by the change in capital
structure. On a trailing twelve month basis, the company's
margins and debt service coverage ratios are weak for the B2
rating category.
However, Visteon's customer and geographic diversification, cost
structure and order book of new business volumes should lead to
further progress over the intermediate term. The company
continues with access to an escrow account funded by Ford Motor
Company to facilitate its restructuring program. That program is
anticipated to revitalize operating margins through further
reduction in the company's cost structure.
The new financing does not involve any financial covenants until
certain defined liquidity levels are penetrated, at which time a
fixed charge coverage ratio would apply until another defined
liquidity threshold is subsequently achieved. On a pro forma
basis, the company will have substantial capacity to satisfy the
minimum liquidity levels.
Consequently, the new financing not only addresses major
approaching debt maturities, but also results in more assured
access to committed funding, and better positions the company to
execute its restructuring program. Nonetheless, near-term
uncertainties in the North American automotive industry have the
ability to disrupt operations and stress liquidity.
Those concerns warrant maintaining a negative outlook. Should
those events occur, and realization of savings from the
restructuring program be delayed, forward progress in Visteon's
business profile and coverage ratios could halt, and debt
protection measures could deteriorate.
The collection of collateral provided to the new term loan from
its first and second liens improves recovery expectations in
downside scenarios sufficient to support an up-notch from the
Corporate Family rating. Accordingly, a B1 rating has been
assigned. However, the unsecured note holders have no collateral,
nor up-streamed guarantees from domestic subsidiaries and will
also see an increase in indebtedness at European subsidiaries
participating in the new securitization program, potentially
adding to their structural subordination. Consequently, ratings
for unsecured notes at B3 and shelf filings have been affirmed.
The Speculative Grade Liquidity rating has been affirmed at SGL-3
and represents adequate liquidity over the next 12 months. This
primarily flows from benefits obtained from the new transactions.
Committed availability will not change significantly, but its term
has been extended and access is more assured. Visteon is expected
to have break-even to positive free cash flow over the next 12
months.
The company is likely to modestly use the asset backed revolving
credit and securitization program to fund seasonal working capital
requirements, leaving sufficient amounts of availability. Internal
sources are supplemented by consolidated cash and temporary
investments on a pro forma basis of just under $1.0 billion at
March 31, with the bulk of those assets outside of the U.S. While
the company is expected to have significant carve-outs for
reinvestment of cash from any future asset sales, the ability to
structure incremental alternate liquidity is constrained by the
extent of the assets pledged and the impact of the lien basket
under the indentures for the unsecured notes.
Visteon Corporation, headquartered in Van Buren Township, MI, is a
leading supplier of automotive systems, modules and components to
global vehicle manufacturers and the automotive aftermarket. With
regional headquarters in Germany and China, the company has a
workforce of 47,000 employees and a network of manufacturing
operations, technical centers, sales offices and joint ventures
around the world.
VOUGHT AIRCRAFT: Moody's Lowers Rating on Sr. Unsec. Bonds to B3
----------------------------------------------------------------
Moody's Investors Service lowered the ratings of Vought Aircraft
Industries Inc., Corporate Family Rating to B2 from B1, prompted
by concerns over the company's cash flow relative to debt levels,
as well as material weaknesses disclosed by the company involving
control procedures affecting financial reporting. The ratings
outlook remains negative.
The ratings downgrade reflects Vought's expected weak cash flow to
debt levels, with 2006 free cash flow expected to be negative
through 2006 owing largely to certain non-recurring costs and
investment requirements placed on the company by its contracts
with key aircraft manufacturers. The ratings, and the negative
outlook, also take into account difficulties that the company
faces relating to remediation of certain material weaknesses in
its internal control procedures, and uncertainty over the timing
and consequences of this remediation program.
Moody's ratings also consider Vought's strong and sustainable
position as a key supplier of important structural commercial and
military aircraft components to major OEM's, Boeing and Airbus in
particular, and the positive affect that this has on revenue
visibility and demand support over the long run.
The negative ratings outlook is focused on two key near-term
concerns:
(1) that the company may encounter additional difficulty in
addressing internal control weaknesses, making it
difficult to meet plans to remediate such problems by
year-end; and
(2) that non-recurring expenditures on, among other things,
program development may not reduce significantly from
recent historical levels, resulting in increasing leverage
as the company would have to draw on its revolver to meet
cash shortfalls.
Ratings could be subject to downward revision if the company were
not able to satisfactorily remediate internal control procedures
by the end of 2006 as planned, or if the remediation process
results in material restatement or delay in publication of
financial reports. The ratings could also be lowered if free cash
flow remains substantially negative or retained cash flow remains
below 5% of debt for a prolonged period, or if EBIT/Interest falls
below 1.2 times. Conversely, ratings could be stabilized if the
company successfully completes remediation tasks by year-end 2006
without any material re-statements of prior period earnings while
completing all required filings on time.
Downgrades:
Issuer: Vought Aircraft Industries, Inc.
* Corporate Family Rating, Downgraded to B2 from B1
* Senior Secured Bank Credit Facility, Downgraded
to B1 from Ba3
* Senior Unsecured Regular Bond/Debenture, Downgraded
to B3 from B2
Vought Aircraft Industries, Inc., headquartered in Dallas, TX, is
a privately held company controlled by The Carlyle Group. The
company is the largest independent developer and producer of
structural assemblies, which include complete fuselages, wing
assemblies, empennages, aircraft doors, nacelles, and control
surfaces for commercial, military, and business aircraft. Vought
had LTM March 2006 revenues of $1.35 billion.
WEST TRADE: Moody's Rates $6 Million Class E Notes at Ba1
---------------------------------------------------------
Moody's Investors Service assigned the following ratings to the
Notes issued by West Trade Funding CDO I, Ltd.:
* Aaa to $1,350,000,000 Class A-1 First Priority Senior
Secured Floating Rate Delayed Draw Notes;
* Aaa to $60,000,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes;
* Aa2 to $52,500,000 Class B Third Priority Senior
Secured Floating Rate Notes;
* A2 to $13,500,000 Class C Fourth Priority Senior
Secured Deferrable Floating Rate Notes;
* Baa2 to $11,300,000 Class D Fifth Priority Mezzanine
Secured Deferrable Floating Rate Notes; and
* Ba1 to $6,000,000 Class E Sixth Priority Mezzanine
Deferrable Floating Rate Notes.
The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to Noteholders, relative to the promise of receiving the
present value of such payments.
The ratings reflect the risks due to the diminishment of cash
flows from the underlying portfolio due to defaults , the
transaction's legal structure and the characteristics of the
underlying assets.
NIR Capital Management LLC will manage the selection, acquisition
and disposition of collateral on behalf of the Issuer.
WORLD HEALTH: U.S. Trustee Asks Court to Appoint Ch. 11 Trustee
---------------------------------------------------------------
Kelly Beaudin Stapleton, the United States Trustee for Region 3
asks the U.S. Bankruptcy Court for the District of Delaware to
appoint a chapter 11 trustee in the bankruptcy cases of World
Health Alternatives, Inc., and its debtor-affiliates or, in the
alternative, convert the cases to chapter 7 liquidation
proceedings.
Joseph J. McMahon, Jr., Esq., Trial Attorney for the U.S.
Department of Justice Office, U.S. Trustee Program, argues that
there are two grounds for appointing a chapter 11 trustee. First,
given the extraordinary accounting and financial statement
irregularities disclosed by the Debtors in the wake of Richard E.
McDonald's resignation from the President and Chief Executive
Officer posts of World Health Alternatives, Inc., it appears that
the Debtors' "precipitous collapse" was caused in part by
inadequate oversight by the Debtors' Board of Directors and its
Audit Committee. As members of the Board and, in John W. Higbee's
case, its Audit Committee during the Debtors' rapid expansion and
sudden decline, Mr. Higbee and Frederick R. Jackson, Sr., a
Company director bears responsibility for results, which, at a
minimum, reflect the inadequacies of the Board and the Audit
Committee.
Assuming, Mr. McMahon contends, that the proposed sale of
substantially all of the Debtors' assets closes, the Debtors'
finite asset base will be continually eroding, as the Debtors will
continue to incur administrative obligations without generating
any revenue. Additionally, assuming that the proposed sale
closes, the Debtors will have abandoned all prospects for
rehabilitating their businesses. These circumstances constitute a
continuing loss to or diminution of the Debtors' estates and the
absence of a reasonable likelihood of rehabilitation under Section
1112(b)(4)(A) of the Bankruptcy Code.
Headquartered in Pittsburgh, Pennsylvania, World Health
Alternatives, Inc. -- http://www.whstaff.com/-- is a premier
human resource firm offering specialized healthcare personnel for
staffing and consulting needs in the healthcare industry. The
company and six of its affiliates filed for chapter 11 protection
on Feb. 20, 2006 (Bankr. D. Del. Case Nos. 06-10162 to 06-10168).
Stephen M. Miller, Esq., at Morris, James, Hitchens & Williams
LLP, represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors elected Young, Conaway,
Stargatt & Taylor, LLP, as its counsel. When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $50 million and $100 million.
* BOOK REVIEW: Going for Broke: How Robert Campeau Bankrupted the
Retail Industry, Jolted the Junk Bond Market, and
Brought the Booming 80s to a Crashing Halt
----------------------------------------------------------------
Author: John Rothchild
Publisher: Beard Books
Paperback: 286 Pages
List Price: $34.95
Order your personal copy at
http://amazon.com/exec/obidos/1893122611/internetbankrupt
Robert Campeau, one of 14 children born to a French Canadian
mechanic and blacksmith, invested $5,000 in a modest house under
construction in Ottawa in 1949, doing most of the carpentry work
himself. Foreseeing the post-war suburb boom, and virtually
creating the Ottawa skyline, he went on to build a successful,
sprawling $200 million real estate corporation.
Then, riding the tidal wave of leveraged buyouts of the late
1980s, he borrowed $11 billion from Wall Street to acquire Allied
Stores and Federated Department Stores, both successful and
relatively debt-free retail conglomerates, in hostile takeovers.
Fortune magazine called the Federated buy "the biggest, looniest
deal ever." Two years later, Allied, Federated, and Campeau
Corporation were plunged into Chapter 11 receivership.
Campeau was so many things: risk-taker extraordinaire, charming,
earnest, eccentric, endearing, cocky, extravagant, persistent,
impetuous, commanding, frenetic, and capricious. He shocked the
conservative Canadian business community with his brazenness,
flamboyance and quirky ways.
In 1980, he showed up at the home of the CEO of Royal Trustco,
Canada's largest trust company and real estate brokerage, at
breakfast time. His English only passable, Campeau told the
astonished CEO that he was taking over Royal Trustco that very
day. Campeau was summarily thrown out and the major business
players in Canada quickly got together and bought up all the
outstanding shares of Royal Trustco to thwart his plan.
Campeau was a total stranger to the U.S. investment banking world.
His quest had begun with the intention of buying a U.S. bank or
S&L. Reading about the hostile takeover of Macy's, however, he
abruptly ordered his Canadian financiers to look for a retail
company instead. Once in contact with Wall Street, he bemused
them with his picturesque and baffling ways of doing business. He
invited them moose-hunting and called them at 5:00 a.m. He
disappeared without warning to get a facelift in Brazil, only to
reappear months later, calling one banker down from the ski
slopes. He sported jaunty hats with feathers and brought his chef
to meetings. He was discovered to have two families, a wife and
three children in Ottawa, a mistress and two children in Montreal.
Blinded or dazzled by all this, enticed by the prospect of
colossal fees, and caught up in their times, investment bankers
assembled the funds needed for Campeau's adventure into retailing.
He drastically overbid for both companies. In the case of
Federated, Campeau paid a little over $8 billion for the company,
which had had a market value of $3 billion, and borrowed about $7
billion. Allied was worth about
$2 billion, but he paid more than $4 billion.
Campeau never found the "synergy between real estate and retail"
he promised the shocked and angry management and employees of the
two companies. Saddled with enormous debt, Campeau's complete
ignorance of the retail industry, his ridiculously high
expectations and broken promises, the companies went into a free-
fall. Casualties included upward of 10,000 employees laid off at
Federated and Allied alone, junk-bond investors, brokerages stuck
with bridge loans, other retailers forced to lower their prices as
Allied and Federated unloaded inventory, and creditors with claims
of over $8 billion.
The first line of Going for Broke reads "This is the story of a
marvelous financial calamity." Read on and be amazed, amused and
saddened.
John Rothchild is a well-known journalist and writer. He has
authored and co-authored eight books, including three co-authored
with Peter Lynch.
*********
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
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
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*** End of Transmission ***