/raid1/www/Hosts/bankrupt/TCR_Public/060711.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, July 11, 2006, Vol. 10, No. 163
Headlines
ADVANCE AUTO: Sees Lower Fiscal 2006 Second Quarter Sales
ADVANCED MATERIALS: Posts 8.9% Year-Over-Year Revenue Hike in 2005
ADVOCAT INC: Secures $30.6 Million Term Loan from Capmark Finance
ALCATEL SA: Expects to Close Lucent Merger Deal by December 2006
ALLIED HOLDINGS: Equity & Creditors Panel Balk at DIP Loan Changes
ALLIED HOLDINGS: Has Until October 13 to Remove Civil Actions
ALPHARMA INC: Improved Financial Profile Cues S&P to Raise Rating
AMERICAN GREETINGS: Earns $16 Million in Quarter Ended May 26
APHTON CORP: Creditors Committee Taps Flaster as Bankr. Counsel
APHTON CORP: Panel Hires NachmanHaysBrownstein as Advisor
ASARCO LLC: Asbestos Panel & FCR Amend Complaint Against ASARCO
ASARCO LLC: Wants to Recover Overshipped Metal From Gerald Metals
ASSOCIATED MATERIALS: Hires Dana Snyder as President and CEO
AVAYA INC: Consolidates Int'l Offices and Reduces Headcount
BETH ISRAEL: Case Summary & 20 Largest Unsecured Creditors
CANWEST: Poor Performance Cues Moody's to Review Low-B Ratings
CERVUS FINANCIAL: Closes $11.5 Mil. Asset Sale to Macquarie Bank
CHECKERED FLAG: Trustee Can Hire Barry Strickland as Accountant
COLLINS & AIKMAN: Seeks to Dump Equipment with Attached GE Liens
COLLINS & AIKMAN: Wants More Time to Decide on Becker Leases
COMMERCE PLANET: Reduces Debt by Over $700,000
COMMONWEALTH PORT: Fitch Lowers $17.6 Million Bonds' Rating to B+
COMMUNICATIONS CORP: Has Until January 3 to Decide on Leases
CONVERSION SERVICES: May Pass Amex Compliance Plan Until July 31
COREL CORP: Posts $4 Million Net Loss in Quarter Ended May 1
CRESCENT JEWELERS: Panel Slams Capital Factors' Multi-Mil. Claim
DAYSPRING-FITCH: Case Summary & Five Largest Unsecured Creditors
DEATH ROW: Judge Carroll Orders Bankr. Trustee Takeover of Label
DELPHI CORP: Sun Opposes Assignment of MobileAria Contracts
DELPHI CORP: Can Use Settlement Protocol to Resolve Claims Dispute
DMX MUSIC: Court Confirms Chapter 11 Liquidation Plan
ENCORE MEDICAL: S&P Puts B Corporate Credit Rating on Neg. Watch
ENTERGY NEW ORLEANS: Hires Taggart Morton as Special Counsel
ENTERGY NEW ORLEANS: Assumes Amended Bridgeline Contract
FASHION SHOP: Case Summary & 20 Largest Unsecured Creditors
FEDERAL-MOGUL: Cooper Industries Resolves Abex Asbestos Claims
FOAMEX INTERNATIONAL: PwC Approved to Work on IP License Deal
GENERAL MILLS: Reports $222 Mil. of Net Earnings in 4th Quarter
GENERAL MOTORS: Fitch Says Potential Alliance Won't Affect Rating
GENEVA STEEL: Chapter 11 Trustee Hires Ian Altman as Actuary
GENEVA STEEL: Plan Confirmation Hearing Set for August 17
GLOBAL HOME: Sells WearEver Cookware Business to Lifetime Brands
GSAMP TRUST: S&P Puts Class B-2 Certificate's Rating on Default
HOLLINGER INC: Seeks to Recover $500MM in Damages from Ravelston
INSIGNIA SOLUTIONS: Burr Pilger Raises Going Concern Doubt
INTEGRATED HEALTH: Wants Until Nov. 3 to Remove Civil Actions
KAISER ALUMINUM: Removal Deadline Expires on August 5
KAISER ALUMINUM: Inks $250 Million JPMorgan-Arranged Loan
LAIDLAW INT'L: Moody's Rates New Senior Secured Term Loan at Ba2
LA PETITE: S&P Places Junk Corporate Credit Rating on Watch
LEVITZ HOME: Landlords Want Summary Judgment on Seaman Leases
LEVITZ HOME: Kathy Guinnessey Named as Levitz Furniture CFO
LONDON FOG: Wants Plan-Filing Period Stretched to October 18
LORETTO-UTICA: No Creditors Interested to Join Official Committee
LUCENT TECH: Expects to Close Alcatel Merger Deal by December 2006
LUCENT TECH: Sees $2 Bil. of Revenues in FY 2006 Third Quarter
MAGSTAR TECH: Amended Credit Agreement Reduces Interest Rate
MAXXAM INC: CFO John Karnes Resigns from Post
MCKLVEEN EXCAVATION: Case Summary & 47 Largest Unsecured Creditors
MCSI INC: Wants Hitachi Settlement and Compromise Claim Approved
MEDMIRA INC: April 30 Balance Sheet Upside Down by CA$6.1 Million
MESABA AVIATION: Ct. Modifies Stay to Settle District Court Suit
MESABA AVIATION: Judge Kishel Okays AIG Insurance Program Renewal
MIDWAY AIRLINES: Ch. 7 Trustee Wants Pact with Pilots Union Okayed
MIRANT CORP: Mitsui Settlement Deal Junks $3-Million Claim
MIRANT CORP: Lovett Unit Wants New York DEC Order Approved
MITSUBISHI CHEMICAL: Closes Business, Accepting Proofs of Claim
NEWPARK RESOURCES: Moody's Cuts Rating on $125MM Sr. Notes to B3
ONEIDA LTD: Equity Committee Says Enterprise Value is Bigger
ONEIDA: Equity Panel Has Until July 21 to Question Plan Treatment
ONETRAVEL INC: Case Summary & 20 Largest Unsecured Creditors
ON TOP COMMS: Selling Virginia Station to Red Zebra for $4.25 Mil.
OUTBOARD MARINE: Trustee Expands Gallinar's Work Scope, Taps Stack
OWENS CORNING: Court Approves 6th Amended Disclosure Statement
OWENS CORNING: Will Create $11MM Fund to Settle MiraVista Claims
PEABODY ENERGY: Excel Acquisition Cues S&P to Affirm BB Rating
PERFORMANCE TRANSPORTATION: Chris Powers Wants to Continue Suit
PORTOLA PACKAGING: Audit Panel Appoints BDO Seidman as Accountants
PREDIWAVE CORP: Latham & Watkins Approved as Bankruptcy Counsel
PREDIWAVE CORP: Wants XRoads as Financial & Restructuring Advisor
RADNET MANAGEMENT: Radiologix Merger Cues Moody's to Hold Ratings
RADNET MANAGEMENT: Radiologix Merger Cues S&P to Affirm B Rating
REFCO INC: Wants Court Approval on Fee Committee and Fee Protocol
REFCO INC: Inks Stipulation with Parties on Rule 2004 Motion
REMOTE DYNAMICS: CEO and Chairman of the Board Resigns
RESIDENTIAL ASSET: S&P Downgrades Class B-5 Cert.'s Rating to CCC
REYNOLDS AMERICAN: Moody's Rates $1.29 Bil. Senior Notes at Ba2
RIVERSTONE NETWORKS: Wants Long-Term Accounts Not Collaterized
SILICON GRAPHICS: Wants $1.3 Mil. Cap Increased to $1.65 Million
SILICON GRAPHICS: Wants Contract Surcharges Paid
SAINT VINCENTS: Can Access CCC's Cash Collateral Until August 18
SAINT VINCENTS: Alston to Serve as Panel's Substitute Counsel
TITAN CRUISE: Florida Court Approves Amended Disclosure Statement
USA COMMERCIAL: Wants to Allot $93MM of Funds to Direct Lenders
VALOR COMMS: Dividends Will Be Paid to July 14 Record Shareholders
VILLAJE DEL RIO: Wants Thomas Kemmy as Special Litigation Counsel
WHERIFY WIRELESS: March 31 Balance Sheet Upside Down at $8.7 Mil.
WHITE RIVER: Court Approves $40 Million DIP Credit Facility
WINN-DIXIE: Wants to Amend Two Schedules to Disallow 93 Claims
WINN-DIXIE: Wants to Assume 512 Store and Office Leases
XPLORE TECH: Closes Series A Preferred Share Financing
* Sheppard Mullin Hires D. Geneson as Partner in Washington D.C.
* Large Companies with Insolvent Balance Sheets
*********
ADVANCE AUTO: Sees Lower Fiscal 2006 Second Quarter Sales
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Advance Auto Parts, Inc., provides updated financial guidance for
its fiscal second quarter, which ends July 15, 2006.
For the quarter, comparable-store sales are now expected to
increase approximately 1% to 2%, versus a 9% increase last year.
This compares to prior guidance of a 3% to 5% increase. In
addition, both gross margin and SG&A rates are expected to be less
favorable than prior expectations.
"Our quarter-to-date results have been lower than we expected,"
said Mike Coppola, Chairman, President and CEO. "In the interest
of timely communication, we felt it is important to share this
information with you now. We believe that macro-economic factors,
including, higher energy prices, ever-higher interest rates, and
higher required credit card payments are further reducing
discretionary income for our lower- and middle-income customers
and has unfavorably impacted customer traffic. Both do-it-
yourself and do-it-for-me sales have been running below
expectations. Our history shows that customers can defer
purchases of non-discretionary replacement parts only for a
limited period of time. With our core customers pressured by
macro factors, we must provide customers more reasons than ever to
visit our stores. We accept that challenge, and know that we must
drive additional traffic to our stores."
"As we focus on driving our sales, we also are working hard to
manage our expenses in-line with our current sales trend," said
Coppola. "In addition, we are working on a number of expense-
reduction initiatives that will further reduce our expense base."
Even if current sales trends persist, the Company continues to
expect growth in earnings per diluted share for 2006, compared to
2005, albeit at a lower rate of growth than previously expected.
The Company will provide a more-detailed update to earnings
guidance for fiscal 2006 on its regularly scheduled August 10
conference call.
About Advance Auto
Headquartered in Roanoke, Va., Advance Auto Parts (NYSE: AAP) --
http://www.advanceautoparts.com/-- is the second-largest retailer
of automotive aftermarket parts, accessories, batteries, and
maintenance items in the United States, based on store count and
sales. As of April 22, 2006, the Company operated 2,927 stores in
40 states, Puerto Rico, and the Virgin Islands. The Company
serves both the do-it-yourself and professional installer markets.
* * *
As reported in the Troubled Company Reporter on June 9, 2006,
Standard & Poor's Ratings Services revised the outlook for Advance
Auto Parts Inc. to positive from stable and affirmed its 'BB+'
corporate credit and senior secured debt ratings.
As reported in the Troubled Company Reporter on Oct. 31, 2005,
Moody's Investors Service upgraded the corporate family and
secured bank facility ratings of Advance Auto Parts, Inc. to Ba1
from Ba2, assigned a positive outlook to the long term ratings,
and affirmed Advance Auto Parts' Speculative Grade Liquidity
Rating of SGL-1.
ADVANCED MATERIALS: Posts 8.9% Year-Over-Year Revenue Hike in 2005
------------------------------------------------------------------
Advanced Materials Group, Inc., reports revenue for fiscal year
2005 of $8.7 million, up 8.9% year-over-year. The Company also
reported 2005 net operating income of $157,000, up 160% year-
over-year. Net Income for 2004 included a one-time release of
accrued liability for settlement of a legal case in the amount of
$974,000. Total reported Net Income for 2004 was $714,548 which
included the release of this accrued liability.
The company remains focused in its efforts to change the company's
direction as AMG's products have traditionally been marketed and
sold primarily to major divisions of large industrial customers,
many of which are industry leaders whose products have significant
market share. AMG does not see a significant change to this
practice although the product mix will change.
In the past, all of AMG's products have been components or
finished products manufactured to order for its industrial
customers. AMG will also sell and manufacture products developed
internally, as well as those licensed from outside inventors. The
customer's purchase decision has often involved the engineering,
manufacturing and purchasing groups within the customer's
management. It is anticipated that the customers' team of
management will continue to be involved in the process, but will
also include sales and executive level management.
AMG recently disclosed its Fiscal Year-ending 2004 results and is
in the process of releasing audited 2005 results along with 2006
quarter-to-date results.
Going Concern Doubt
Fei-Fei Catherine Fang, LLP, CPA, expressed substantial doubt
about AMG's ability to continue as a going concern after auditing
the Company's financial statements for the fiscal year ended Nov.
30, 2004. Ms. Fang pointed to the Company's sustained operating
losses prior to 2004 and significant decline in sales. Ms. Fang
added that the Company is also in technical default under the
compliance provisions of its line of credit and term loan.
The Company earned $714,548 of net income in 2004, compared to a
$631,000 net loss incurred in 2003. The 2004 net income includes
a gain on the settlement of $974,000 and the reversal of a
restructuring reserve of $84,032.
At November 30, 2004, the Company had limited cash resources and
was not in compliance with certain financial covenant ratios
pertaining to its line of credit, and therefore was in technical
default under the compliance provisions of the line of credit and
term loan. In September of 2005, the Company renegotiated the
terms of these debt instruments, reducing the line of credit from
$3.75 million to $1.5 million and extending the term of the term
loan through Oct. 1, 2006 with monthly principal payments of
$7,500 and the remainder due on Oct. 1, 2006. Under the new
agreement, the line of credit and term loan bear interest at Prime
plus 1.5% and Prime plus 2.0%, respectively. As a result of the
new agreement, the Company was able to cure its debt covenant
violations.
A full-text copy of the Company's fiscal 2004 annual report is
available for free at http://researcharchives.com/t/s?d6d
About Advanced Materials
Advanced Materials Group, Inc. (Pink Sheets: ADMG) --
http://www.admaproducts.com/-- manufactures medical, consumer and
industrial products from flexible materials such as foams, films,
fabrics, and pressure sensitive adhesives.
ADVOCAT INC: Secures $30.6 Million Term Loan from Capmark Finance
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Advocat Inc. entered into a commitment with Capmark Finance Inc.
for a comprehensive refinancing of the Company's long-term debt.
Under the terms of the commitment, Capmark will provide mortgage
debt of $22.5 million with a five-year maturity and a term note of
$8.1 million with a four-year maturity to refinance the Company's
remaining mortgage and bank term debt. Final terms remain subject
to negotiation, and the transaction is expected to close during
the third quarter of 2006.
"The completion of this refinancing will be a major milestone in
the turnaround of Advocat," Will Council, President and CEO,
stated. "The new agreement will bring the remaining debt
covenants into compliance and strengthen our balance sheet by
providing long term maturities."
About Advocat Inc.
Headquartered in Brentwood, Tennessee, Advocat Inc. (OTCBB: AVCA)
-- http://www.irinfo.com/avc-- provides long-term care services
to nursing home patients and residents of assisted living
facilities in nine states, primarily in the Southeast. The
Company has 43 centers containing 4,505 licensed nursing beds.
* * *
As reported in the Troubled Company Reporter on April 3, 2006,
BDO Seidman LLP raised substantial doubt about Advocat 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 Company is not in compliance with certain debt covenants that
allow the holders to demand immediate repayment. It has limited
resources, including working capital, available to fund the
reserve recorded for retained professional liability risk and to
meet its debt service requirements during 2006.
ALCATEL SA: Expects to Close Lucent Merger Deal by December 2006
----------------------------------------------------------------
Following the April 2 report of their proposed merger transaction,
Alcatel S.A. and Lucent Technologies provided an update on the
integration process and believe they are on track to complete
their merger transaction by the end of calendar year 2006, which
is within the 6 to 12 month timeframe originally reported. In
recent weeks, the two companies have achieved a number of
significant milestones, including satisfying some regulatory
conditions to the proposed merger.
The business model and the associated organization of the combined
company are now defined and will be implemented immediately upon
closing. More detailed evaluations of cost synergies confirm that
previously reported targets should be fully met.
"The pre-integration work has progressed very satisfactorily and
clearly confirms the high value that will be derived from this
merger for our customers and our shareholders," said Serge Tchuruk
who will become non-executive Chairman of the combined company.
"This merger will create a world-class team that will deliver the
best of both companies to customers around the world, and will
create enhanced value for shareholders" said Patricia Russo,
chairman and CEO of Lucent who will become CEO of the combined
company. "To that end, we are mapping each company's individual
strengths to the changing market dynamics reshaping our industry
and adopting best practices across the business of the combined
company. From R&D to sales, from product development to
marketing, from finance to talent development, we are committed to
being a role model company for the 21st century."
Organization and Business Structure
The combined company will address carrier, enterprise and service
markets with a strong focus on end-to-end solutions maximizing the
value to customers. The overall business will be segmented in
Business Groups structured along the global requirements of those
three markets, while a decentralized regional organization will
provide strong local support to customers.
The Carrier Business Groups, headed by Etienne Fouques will
consist of: Wireless, headed by Mary Chan, Wireline, headed by
Michel Rahier, and Convergence, headed by Marc Rouanne.
The Enterprise Business Group will be headed by Hubert de
Pesquidoux. The Service Business Group will be headed by John
Meyer.
The Company will have four geographic regions: Europe and North,
headed by Vince Molinaro, Europe and South, headed by Olivier
Picard, North America, headed by Cindy Christy, and Asia-Pacific,
headed by Frederic Rose.
The company will have a management committee, which will be headed
by Pat Russo, Chief Executive Officer. The members of this
committee will include Etienne Fouques, Senior Executive Vice
President of the Carrier Group; Frank D'Amelio, Senior Executive
Vice President Integration and Chief Administrative Officer; Jean-
Pascal Beaufret, Chief Financial Officer; Claire Pedini, Senior
Vice President, Human Resources and Communication and Mike
Quigley. Mike Quigley has decided for personal reasons to assume
a different role for the combined company. He will focus on the
strategic direction of the company and will become President,
Science Technology and Strategy. In this capacity he will devote
his attention to assuring that strategic investments align with
evolving market opportunities.
Regulatory Process
On June 7, 2006, the two companies received early termination
under the Hart-Scott-Rodino US Antitrust Improvements Act of 1976
HSR) as it pertains to the merger. On June 16, 2006, the
companies filed for European antitrust approval. Additionally,
the two companies plan to submit a voluntary notice of the merger
to the Committee on Foreign Investment in the United States in the
near future. The merger remains subject to additional customary
regulatory reviews and approvals as well as approval by
shareholders of both Alcatel and Lucent at shareholder meetings
scheduled for Sept. 7, 2006, and other customary conditions.
Cost Synergies
"We remain confident in our ability to achieve the previously
announced EUR1.4 billion ($1.7 billion) of annual pre-tax cost
synergies within three years and continue to expect about 70% of
these savings to be achieved in the first two years post closing,"
Christian Reinaudo, Alcatel integration team leader, said.
"We have collectively performed further analyses of each business
activity and have identified significant cost synergies from
several areas across the businesses, including a reduction of the
combined worldwide workforce by approximately 9,000 people," Janet
Davidson, Lucent Technologies integration team leader, added.
The combined company expects that the synergies will be realized
according to the following general breakdown: 30% from Cost of
Goods Sold and the remainder out of operating expenses.
Based on recently completed analyses, the companies now expect
approximately 55% of the synergies to be related to workforce
reductions, with the remainder derived from non-headcount cost
synergies.
Real Estate: At the closing of the merger, the combined company
will manage 4.3 million square meters of various manufacturing
sites and offices in 850 different locations. Through the
improved utilization of existing facilities as well as the
elimination of excess space the companies are targeting by the end
of year 3 EUR100 million ($122 million) of real estate cost
savings.
Supply Chain and Procurement: At closing, annual external
purchases are estimated at EUR8.7 billion ($10.6 billion).
Savings derived from component purchases, indirect spend, project
sourcing and EMS relationships should amount to at least 3% of
external purchases. This would represent EUR250 million ($305
million) by the end of year 3.
Platform Convergence: The rationalization and migration plans will
leverage the most innovative technologies and products and have
the highest potential in terms of growth and overall customer
satisfaction. Particular emphasis has been placed on the
continuous support of our customers' investments in the installed
base. Moreover, the companies will work on ensuring a gradual
migration path for customers transitioning to the combined future
portfolio to avoid disruptions during the migration process. Cost
synergies associated with this process are currently targeted at
EUR400 million ($488 million) by the end of year 3.
About Lucent Technologies
Headquartered in Murray Hill, New Jersey, Lucent Technologies
(NYSE: LU) -- http://www.lucent.com/-- designs and delivers the
systems, services and software that drive next-generation
communications networks. Backed by Bell Labs research and
development, Lucent uses its strengths in mobility, optical,
software, data and voice networking technologies, as well as
services, to create new revenue-generating opportunities for its
customers, while enabling them to quickly deploy and better manage
their networks. Lucent's customer base includes communications
service providers, governments and enterprises worldwide.
About Alcatel
Headquartered in Paris, France, Alcatel S.A. (Paris: CGEP.PA and
NYSE: ALA) -- http://www.alcatel.com/-- provides communications
solutions to telecommunication carriers, Internet service
providers and enterprises for delivery of voice, data and video
applications to their customers or employees. Alcatel brings its
leading position in fixed and mobile broadband networks,
applications and services, to help its partners and customers
build a user-centric broadband world. With sales of EURO 13.1
billion and 58,000 employees in 2005, Alcatel operates in more
than 130 countries.
* * *
As reported in the Troubled Company Reporter on April 5, 2006,
Moody's Investors Service has placed the Ba1 long-term debt
ratings of Alcatel SA on review for possible downgrade following
its definitive agreement to merge with Lucent Technologies
(rated B1). The ratings placed on review include Alcatel's
senior, unsecured Eurobonds, convertible bonds, Euro-medium term
notes, its EUR1.0 billion revolving credit facility and its
corporate family rating, all at Ba1 currently. Alcatel's rating
for short-term debt was affirmed at Not-Prime.
ALLIED HOLDINGS: Equity & Creditors Panel Balk at DIP Loan Changes
------------------------------------------------------------------
The Ad Hoc Equity Committee and the Official Committee of
Unsecured Creditors of Allied Holdings, Inc., and its debtor-
affiliates ask the U.S. Bankruptcy Court for the Northern District
of Georgia to deny approval of the fifth amendment to the Debtors'
Senior Secured, Super Priority, Debtor-in-Possession credit
facility with its lenders.
As reported in the Troubled Company Reporter on July 3, 2006, the
Court approved the DIP loan amendment on an interim basis. The
amendment provides the Company with $30 million of additional
availability through a new Term Loan C, with the proceeds of the
Term Loan C to be used by the Company to repay any protective
over-advances obtained under the existing facility, reduce the
principal amount of the Company's revolving credit advances under
the facility, and for capital expenditures and other working
capital requirements.
The interim approval allows the Debtors to borrow under the DIP
Facility, as amended by the Fifth Amendment, from the Term Loan C
Lenders, up to $10,000,000, plus additional interest, fees,
charges and expenses. The Court will convene the final hearing on
the Fifth Amendment tomorrow, July 12, 2006.
Objections
1) Ad Hoc Committee
The Ad Hoc Equity Committee -- Virtus Capital, LP, Hawk
Opportunity Fund, LP, Aspen Advisors, LP, and Sopris Capital
Advisors, LLC -- argues that the proposed fifth DIP Amendment
should be denied as it contains extremely expensive financial
terms and improperly grants Term Loan C lenders the option to
convert the outstanding amount of Term Loan C to up to 18% of the
stock of the Reorganized Debtor.
Paul N. Silverstein, Esq., at Andrews Kurth LLP, in New York,
relates that, Yucaipa American Alliance Fund I, L.P., Yucaipa
American Alliance (Parallel) Fund I LP and certain of their
affiliates are also significant creditors of Performance
Transportation Services, Inc., which is one of the Debtors'
competitors. PTS commenced their own Chapter 11 cases earlier
this year in the Western District of New York.
Mr. Silverstein points out that Yucaipa is attempting to use the
proposed DIP Amendment to advance and facilitate its efforts to
effect a combination of the reorganized Debtors and reorganized
PTS.
According to Mr. Silverstein, the approval of the proposed Fifth
Amendment has the effect of evading Chapter 11's plan
confirmation requirements to the detriment of stockholders and
unsecured creditors.
2) Creditors' Committee
The Official Committee of Unsecured Creditors asks the Court to
deny the proposed fifth amendment to the extent it provides for:
(i) an option that would allow the Term Loan C Lenders in
their sole discretion to convert the outstanding principal
into common equity in the reorganized Debtors;
(ii) a number of exorbitant fees; and
(iii) a contingency as to continued interim relief under Section
1113(e) of the Bankruptcy Code.
Richard B. Herzog, Jr., Esq., at Nelson Mullins Riley &
Scarborough, LLP, in Atlanta, Georgia, asserts that the Debtors
have not met their burden of showing that the proposed financing
should be approved under Sections 364(c) or (d) of the Bankruptcy
Code. The lack of accurate valuation information exemplifies the
risks inherent in allowing plan confirmation procedures to be
circumvented, Mr. Herzog says.
Mr. Herzog argues that the Fifth Amendment should not be approved
unless the Debtors show that the concessions exacted by the Term
Loan C Lenders are warranted and that there is no better
alternative. The Debtors' unsecured creditors appear likely to
bear disproportionately the costs associated with the Fifth
Amendment and the additional $30,000,000 financing, Mr. Herzog
notes. Thus, he says, the Creditors' Committee should have an
opportunity to examine the evidence that the Debtors contend
supports their request for approval.
Furthermore, the Creditors' Committee notes that the Amendment is
contingent upon the occurrence of conditions over which the
Debtors have no control, and threatens to dilute any potential
recovery by unsecured creditors by providing for the grant of
equity to secured lenders on the basis of enterprise valuation
that cannot be accurately determined at this point in the
bankruptcy cases.
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor. Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee. When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts. (Allied Holdings Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ALLIED HOLDINGS: Has Until October 13 to Remove Civil Actions
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
extended, until Oct. 13, 2006, Allied Holdings, Inc., and its
debtor-affiliates' period to remove civil lawsuits.
As reported in the Troubled Company Reporter on May 26, 2006, the
Debtors have not had the opportunity to conduct a meaningful
review of the numerous civil lawsuits of which they are parties
to, to determine if removal of any of them is warranted under
Section 1452 of the Judiciary Code.
Thomas R. Walker, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, explained that the Debtors have been focusing on a myriad
of matters attendant to their large and complex Chapter 11 cases.
The Debtors have expended energy rejecting burdensome leases and
executory contracts and addressing matters concerning organized
labor.
The Debtors are also in the process of formulating a program to
deal with the large volume of prepetition civil litigation in
which they are involved, Mr. Walker related. The Debtors believe
that this may involve a form of alternate dispute resolution or
other orderly process for resolving claims.
Mr. Walker told the Court that the extension will provide the
Debtors an opportunity to make informed decisions concerning the
removal of the causes of action and will assure that the Debtors
do not forfeit any of their rights under Section 1452.
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor. Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee. When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts. (Allied Holdings Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ALPHARMA INC: Improved Financial Profile Cues S&P to Raise Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Alpharma Inc. to 'B+' from 'B'. The outlook remains
stable.
The upgrade reflects Alpharma's improved financial profile,
following the sale of its troubled generic drug business
and subsequent repayment of debt with the sale proceeds, and the
continued solid performance of the company's diverse businesses --
animal health, active pharmaceutical ingredient, and specialty
branded pharmaceutical.
"The low-speculative-grade rating on specialty pharmaceutical
maker Alpharma reflects the company's limited position in the
specialty pharmaceutical business and its need to build that
position, possibly with debt financed acquisitions," said Standard
& Poor's credit analyst Arthur Wong.
This uncertainty is offset by Alpharma's currently unleveraged
balance sheet and its solid position in the animal health
business.
Following completion of the sale its generic drug business,
Alpharma has solid positions in animal health, API, and specialty
pharmaceuticals. Animal health is Alpharma's largest franchise,
generating over half its revenues. Alpharma supplies feed
additives to the poultry and livestock industry and is the second
largest player in the worldwide animal feed additives business.
The demand for feed additives is directly related to the
agricultural market and worldwide animal protein consumption,
which has been growing.
However, the business is characterized by very little pricing
leverage, non-exclusive supply agreements, and the entry of lower
cost competitors. Alpharma has responded with ongoing efforts to
cut costs in the segment such as consolidating manufacturing
facilities to better service its customers.
AMERICAN GREETINGS: Earns $16 Million in Quarter Ended May 26
-------------------------------------------------------------
American Greetings Corporation reported net sales of $406.6
million, pre-tax income from continuing operations of $18.9
million and income from continuing operations of $16 million for
the first quarter of fiscal 2007 ended May 26, 2006. For the
first quarter of fiscal 2006, the Company reported net sales of
$439.5 million, pre-tax income from continuing operations of
$43.6 million and income from continuing operations of
$26.9 million.
Chief Executive Officer Zev Weiss said, "We started our 100th year
with results of the first quarter that were generally in line with
our internal expectations. One of the key initiatives of our
100th year is the enhancement of both our greeting card
assortments and the merchandising of those cards. The rollout of
this strategic card initiative has begun. While this initiative
may put downward pressure on earnings, we are pleased with the
execution of the first of many phases of that rollout."
Mr. Weiss added, "Our efforts to refinance our long-term debt were
substantially completed this past quarter and they were concluded
on time, within budget and with terms and conditions that will
permit the simultaneous use of capital for our strategic card
initiative as well as for repurchases of our own shares, as we
believe both investments will grow long-term earnings per share."
During the quarter, the Company completed most of its major
activities related to the refinancing of its long-term debt.
During the first fiscal quarter, the Company:
1. Increased its total senior credit facility from
$200 million to $650 million by increasing its revolving
credit facility from $200 million to $350 million and
adding a new secured $300 million delay draw term loan.
2. Reduced its accounts receivable securitization program
from $200 million to $150 million. The reduction
recognized the decline in the Company's pool of eligible
accounts receivable.
3. Completed a tender offer for its $300 million 6.1% notes
because they were putable back to the Company in August of
2008. The Company retired $277.3 million, or 92% of its
6.1% notes. The indenture that governs the remaining
bonds outstanding was amended in conjunction with the
tender to eliminate certain restrictive covenants and
events of default.
4. Completed a senior unsecured notes offering. The Company
issued $200 million of senior unsecured notes with a
10-year final maturity at a coupon of 7.375%. Proceeds
from the issuance were used to finance the tender for the
6.1% notes.
5. Completed an exchange offer for its convertible notes.
The Company achieved a 91% success ratio in its exchange
offer for its $175 million convertible subordinated notes.
The exchange permits the Company to settle the conversion
of the new notes in cash and stock, whereas the old notes
could only be settled with stock. Assuming all of the
holders of the new notes convert their bonds at maturity
in mid-July, in early August of 2006, the Company expects
to use $159.1 million of cash to settle a portion of the
total conversion value. Based on the range of the
Company's recent stock prices, the exchange offer is
expected to effectively reduce the potential dilution
associated with the conversion by approximately
6.0 to 6.5 million shares.
Share Repurchases and Dividend Declaration
During the first fiscal quarter, the Company purchased, under the
share repurchase program initiated in February of 2006, 2.8
million shares of common stock for $59.4 million. Including the
shares purchased under the same program at the end of the fourth
fiscal quarter of fiscal 2006, the Company has repurchased
approximately 4.9 million shares at an average cost of $21.06 per
share for $102.1 million. As of the end of the first fiscal
quarter, the Company has a balance of $97.9 million available
under the current repurchase program.
The Company's Board of Directors authorized a cash dividend of
8 cents per share to be paid on July 24, 2006 to shareholders of
record at the close of business on July 14, 2006.
About American Greetings
Located in Cleveland, Ohio, American Greetings Corporation (NYSE:
AM) -- http://corporate.americangreetings.com/-- manufactures
social expression products. Along with greeting cards, its
product lines include gift wrap, party goods, candles, stationery,
calendars, educational products, ornaments and electronic
greetings. American Greetings generates annual net sales of
approximately $1.9 billion.
* * *
As reported in the Troubled Company Reporter on June 7, 2006,
Moody's Investors Service lowered the rating on American Greetings
Corporation's $22.7 million 6.1% senior unsecured notes due 2028
to Ba2 from Ba1, reflecting their contractual subordination to the
senior secured credit facilities.
As reported in the Troubled Company Reporter on May 18, 2006,
Standard & Poor's Ratings Services assigned its preliminary 'BB+'
senior unsecured debt rating to American Greetings Corp.'s
Rule 415 shelf registration for debt securities. The new shelf
has an indeterminate aggregate initial offering price or number of
debt securities.
APHTON CORP: Creditors Committee Taps Flaster as Bankr. Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in Aphton Corp.'s
chapter 11 case asks the U.S. Bankruptcy Court for the District of
Delaware for permission to retain Flaster/Greenberg P.C. as its
counsel, nunc pro tunc to June 5, 2006.
Flaster/Greenberg is expected to:
a) give the Committee legal advice with respect to its powers
and duties as a Committee;
b) prepare necessary applications, answers, orders, reports
and other legal papers; and
c) pursue any claims or matters as the Committee desires.
William J. Burnett, Esq., a member at Flaster/Greenberg, told the
Court that he charges $325 per hour for his services, while his
firm's other professionals bill:
Professional Hourly Rate
------------ -----------
Colleen A. Garrity $210
Shareholders/counsel $255 - $420
Associates $165 - $265
Paralegals $105 - $170
Mr. Burnett assures the Court that he and his firm's professionals
do not hold any material interests adverse to the Debtor, and that
they are "disinterested persons" as that term is defined in Sec.
101(14) of the Bankruptcy Code.
Headquartered in Philadelphia, Pennsylvania, Aphton Corporation
-- http://www.aphton.com/-- is a clinical stage biopharmaceutical
company focused on developing targeted immunotherapies for cancer.
Aphton filed for chapter 11 protection on May 23, 2006. (Bankr. D.
Del. Case No. 06-10510). Michael G. Busenkell, Esq., at Eckert
Seamans Cherin & Mellot, LLC, represents the Debtor in its
restructuring efforts. William J. Burnett, Esq., at Flaster
Greenberg, represents the Official Committee of Unsecured
Creditors. Aphton estimated its assets and debts at $1 million to
$10 million when it filed for protection from its creditors.
At Dec. 31, 2005, Aphton's balance sheet showed assets totaling
$6,775,858 and debts totaling $11,641,182.
APHTON CORP: Panel Hires NachmanHaysBrownstein as Advisor
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware allowed the
Official Committee of Unsecured Creditors appointed in Aphton
Corporation's chapter 11 case to retain NachmanHaysBrownstein,
Inc., as its financial advisor.
NHB will assist the Committee in evaluating the Debtor's efforts
to conduct a sale of its business assets. The Committee retained
NHB to provide financial advisory services including, but not
limited to:
a) fact investigation and development concerning actions that
were or were not previously undertaken by the Debtor and
its Management and Board of Director in attempting to
maximize the sale process for the benefit of all parties-at-
interest;
b) the preparation of Sales Procedures and a Marketing Plan for
the sale; and
c) providing ongoing assistance to the Committee and the
Committee's legal counsel.
Keith M. Northern, a Managing Director in NHB's Philadelphia
office and Edward T. Gavin, Managing Director of NHB's Wilmington
office will lead the Aphton engagement.
About NachmanHaysBrownstein
NachmanHaysBrownstein, Inc. -- http://www.nhbteam.com/-- is one
of the country's premier mid-market turnaround and crisis
management firms. NHB has its headquarters near Philadelphia and
has offices in New York, Boston, Wilmington and Atlanta.
About Aphton
Headquartered in Philadelphia, Pennsylvania, Aphton Corporation --
http://www.aphton.com/-- is a clinical stage biopharmaceutical
company focused on developing targeted immunotherapies for cancer.
Aphton's products seek to empower the body's own immune system to
fight disease. Aphton filed for chapter 11 protection on May 23,
2006. (Bankr. D. Del. Case No. 06-10510). Michael G. Busenkell,
Esq., at Eckert Seamans Cherin & Mellot, LLC, represents the
Debtor in its restructuring efforts. William J. Burnett, Esq., at
Flaster Greenberg, represents the Official Committee of Unsecured
Creditors. Aphton estimated its assets and debts at $1 million to
$10 million when it filed for protection from its creditors.
At Dec. 31, 2005, Aphton's balance sheet showed assets totaling
$6,775,858 and debts totaling $11,641,182.
ASARCO LLC: Asbestos Panel & FCR Amend Complaint Against ASARCO
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of the Subsidiary
Debtors and Robert C. Pate, as Future Claims Representative, filed
an amended complaint, realigning parties and seeking to hold
ASARCO, LLC, liable for tort liabilities of the Subsidiary
Debtors.
Subsidiary Debtors Lac d'Amiante du Quebec Ltee, Lake Asbestos of
Quebec, Ltd., LAQ Canada Ltd., Capco Pipe Company, Inc., and
Cement Asbestos Products Company are no longer operating
companies.
Jacob L. Newton, Esq., at Stuzman, Bromberg, Esserman & Plifka,
APC, in Dallas, Texas, relates that as early as December 1976,
numerous asbestos claims were asserted against CAPCO, LAQ and
ASARCO. The Subsidiary Debtors depend on ASARCO and its
insurance coverage to fund their asbestos liabilities.
Under various alter ego theories, Mr. Newton asserts that ASARCO
is directly responsible for the Subsidiary Debtors' asbestos
liabilities because, among others:
(a) ASARCO owns 100% of the Subsidiary Debtors' stock;
(b) The Subsidiary Debtors have failed to adhere to corporate
formalities and maintain adequate corporate records,
underscoring the fact that the relationship between the
Subsidiary Debtors and ASARCO was not at arms' length;
(c) ASARCO caused the Subsidiary Debtors to become and remain
insolvent by siphoning funds and stripping all assets from
the Subsidiary Debtors in the face of massive asbestos
liabilities, leaving the Subsidiary Debtors wholly
dependent upon ASARCO and its insurance policies to fund
those liabilities;
(d) The Subsidiary Debtors have been made to function as mere
facades for ASARCO, as mere shams existing for no other
purpose than as vehicles for fraud;
(e) ASARCO has commingled assets with one or more of the
Subsidiary Debtors;
(f) With knowledge of the massive asbestos and environmental
liabilities asserted against the Subsidiary Debtors,
ASARCO caused all assets to be stripped from the
Subsidiary Debtors, leaving them as mere shell companies,
hopelessly undercapitalized and insolvent;
(g) ASARCO and the Subsidiary Debtors' operations are
significantly intertwined by the sharing of corporate
counsel, staff and offices;
(h) ASARCO asserted control and domination over the Subsidiary
Debtors;
(i) ASARCO, LAQ, CAPCO had an intertwined executive structure
and overlapping officers and directors.
(j) ASARCO and the Subsidiary Debtors share corporate counsel,
staff, corporate offices, addresses, telephone numbers,
and others;
(k) ASARCO guaranteed settlement obligations of at least some
of the Subsidiary Debtors; and
(l) the Subsidiary Debtors' employees are carried on in
ASARCO's payroll.
Accordingly, the Creditors Committee of the Asbestos Debtors known
as the Subsidiary Committee and the FCR ask the U.S. Bankruptcy
Court for the Southern District of Texas in Corpus Christi to
declare that ASARCO is liable for the Subsidiary Debtors' asbestos
liabilities under various Alter Ego Theories, agency principles,
partnership principles, conspiracy principles, and aiding and
abetting a breach of fiduciary duty principles.
The Subsidiary Committee and the FCR reserve their right to add
more defendants in the adversary proceeding as may be deemed
necessary and appropriate.
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. 24; Bankruptcy
Creditors' Service, Inc., 215/945-7000).
ASARCO LLC: Wants to Recover Overshipped Metal From Gerald Metals
-----------------------------------------------------------------
ASARCO LLC believes that it overshipped 352,460 to 534,718 pounds
of metal to Gerald Metals, Inc., in September and October 2005.
In April 2006, ASARCO asked Gerald for the return of 534,718
pounds of the Overshipped Metals and offered to negotiate the
disputed amount of the Overshipped Metal. Gerald did not respond
to ASARCO's request.
James R. Prince, Esq., at Baker Botts LLP, in Dallas, Texas,
argues that the Overshipped Metal is property of the ASARCO
bankruptcy estate.
The Overshipped Metal is worth $1,220,000 to $1,850,000 and
therefore, is not of inconsequential value to the ASARCO
bankruptcy estate, Mr. Prince says.
Mr. Prince argues that by refusing to return the Overshipped
Metal, Gerald has converted the Debtors' property. Thus, ASARCO
is entitled to at least $1,220,000 in damages for Gerald's
conversion of the Overshipped Metal, plus interest and punitive
damages to the fullest allowed by applicable law, Mr. Prince
asserts.
Gerald's default in paying its debts to ASARCO and refusal to
return the Overshipped has made it necessary for ASARCO to employ
legal counsel to file its amended complaint.
Accordingly, ASARCO asks the Court to:
(a) direct Gerald to immediately return the Overshipped Metal;
and
(b) grant judgment in its favor for interest at the highest
legal or contractual rate allowed by law on the
Overshipped Metals' value for the entire period it was in
Gerald's possession.
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. 24; Bankruptcy
Creditors' Service, Inc., 215/945-7000).
ASSOCIATED MATERIALS: Hires Dana Snyder as President and CEO
------------------------------------------------------------
Associated Materials Incorporated reported that it has entered
into an employment agreement with Mr. Dana R. Snyder, who will
serve as its Interim President and Chief Executive Officer
effective July 1, 2006.
Pursuant to the Employment Agreement, Mr. Snyder is employed on an
at will basis and will receive an annual base salary of $600,000
as compensation for his services.
Mr. Snyder, age 59, succeeds Michael Caporale, whose resignation
by mutual agreement with the Company's Board of Directors was
effective June 30, 2006.
Since December 2004, Mr. Snyder has served as a director of AMI,
Holdings, AMH, and AMH Holdings II, Inc. He is also currently
serving as an advisory director of Investcorp S.A., an affiliate
of the Company, and as a director of Werner Holdings Inc.
In addition, Mr. Snyder was also an independent consultant to the
Company until June 30, 2006.
Headquartered in Akron, Ohio, Associated Materials Incorporated --
http://www.associatedmaterials.com/-- manufactures exterior
residential building products, which are distributed through
company-owned distribution centers and independent distributors
across North America. AMI produces a broad range of vinyl
windows, vinyl siding, aluminum trim coil, aluminum and steel
siding and accessories, as well as vinyl fencing, decking and
railing. AMI is a privately held, wholly owned subsidiary of
Associated Materials Holdings Inc., a wholly owned subsidiary of
AMH, a wholly owned subsidiary of AMH II, which is controlled by
affiliates of Harvest Partners, Inc., and Investcorp S.A.
* * *
As reported in the Troubled Company Reporter on Jan. 23, 2006,
Moody's downgraded the ratings of Associated Materials Inc. and
its holding company AMH Holdings, Inc. AMH Holdings' corporate
family rating and ratings on the AMI's senior secured credit
facilities were downgraded to B3 from B2. Moody's said the
ratings outlook is stable.
AVAYA INC: Consolidates Int'l Offices and Reduces Headcount
-----------------------------------------------------------
Avaya Inc.'s management approved a plan to exit and consolidate
international office space facilities to optimize cost structure
and improve operational performance, on June 30, 2006. The move
includes the cease-use of the Company's office space in Guildford,
United Kingdom. Total estimated non-cash charge is approximately
$18 million.
The Company has also taken actions to further reduce headcount in
its Europe, Middle East and Africa region, to reduce costs and
improve the region's operational performance. The Company will
record a charge of approximately $4 to $5 million for the employee
termination benefits and related costs in the third quarter of
fiscal 2006. Employee termination benefits represent cash
severance payments to be paid by the end of fiscal 2007.
Headquartered in Basking Ridge, New Jersey, Avaya, Inc. (NYSE:AV)
-- http://www.avaya.com/-- designs, builds and manages
communications networks for more than one million businesses
worldwide, including more than 90% of the FORTUNE 500(R). Focused
on businesses large to small, Avaya is a world leader in secure
and reliable Internet Protocol telephony systems and
communications software applications and services.
* * *
As reported in the Troubled Company Reporter on Jan. 31, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on Avaya, Inc., to 'BB' from 'B+'.
As reported in the Troubled Company Reporter on Jan. 21, 2005,
Moody's Investors Service upgraded the senior implied rating of
Avaya, Inc., to Ba3 from B1. Moody's said the ratings outlook is
positive.
BETH ISRAEL: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Beth Israel Hospital Association of Passaic
dba PBI Regional Medical Center
aka Passaic Beth Israel Health System, Inc.
aka Passaic Beth Israel Regional Medical Center
aka Passaic Beth Israel Hospital Foundation, Inc.
350 Boulevard
Passaic, New Jersey 07055
Bankruptcy Case No.: 06-16186
Type of Business: The Debtor is a 264-bed, non-profit acute care
hospital located in the City of Passaic, New
Jersey. The Medical Center represents the
consolidation of two significant hospitals,
namely Passaic Beth Israel Hospital and the
General Hospital Center of Passaic, and provides
medical and health services including
comprehensive cardiac services program, bypass
surgery, electrophysiology, off pump surgery,
and others. See http://www.pbih.org/
Chapter 11 Petition Date: July 10, 2006
Court: District of New Jersey (Newark)
Judge: Novalyn L. Winfield
Debtor's Counsel: Mark J. Politan, Esq.
Michael D. Sirota, Esq.
Cole, Schotz, Meisel, Forman & Leonard, P.A.
25 Main Street, 4th Floor
Hackensack, New Jersey 07601
Tel: (201) 525-6303
Fax: (201) 678-6303
Debtor's Special Counsel:
Labor Counsel: James J. McGovern III, Esq.
Genova, Burns & Vernoia
Eisenhower Plaza II, 354 Eisenhower Parkway
Livingston, New Jersey 07039
Tel: (973) 533-0777
Fax: (973) 533-1112
Healthcare Counsel: Margaret Davino, Esq.
Kaufman Borgeest & Ryan LLP
99 Park Avenue, 19th Floor
New York, New York 10016
Tel: (212) 980-9600
Fax: (212) 980-9291
General
Corporate Counsel: Margaret Davino, Esq.
Kaufman Borgeest & Ryan LLP
99 Park Avenue, 19th Floor
New York, New York 10016
Tel: (212) 980-9600
Fax: (212) 980-9291
Estimated Assets: $50 Million to $100 Million
Estimated Debts: $50 Million to $100 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Siemens Medical Sol. $4,434,577
Health Service
P.O. Box 821129
Philadelphia, PA 19182
Saint Jude Medical Sc. Inc. $1,771,248
22400 Network Place
Chicago, IL 60673
Armanti Financial Service, LLC $1,499,458
2 Broad Street
Bloomfield, NJ 07003
Medtronic USA, Inc. $1,257,327
4642 Collections Center Drive
Chicago, IL 60693
Aramark Health $932,263
P.O. Box 33170
Newark, NJ 07188
Caligor Hospital Division $628,074
P.O. Box 223133
Pittsburgh, PA 15251
Zavata, Inc. $587,769
400 Perimeter Center Terrace
Suite 249
Atlanta, GA 30346
Johnson & Johnson Health Care $481,377
Systems Inc.
5972 Collections Ntr. Drive
Chicago, IL 60693
Passaic Hyperbaric, Lli. $458,705
N.Y. Hyperbaric & Wound Care
32 Elm Place, 3rd Floor
Rye, NY 10580
Cardinal Health Pharma. Distr. $410,915
Swedesboro
1120 Commerce Boulevard
Swedesboro, NJ 08085
Aramark Service Master $404,648
Facility Services
P.O. Box 33170
Newark, NJ 07188
New York Blood Center $394,321
Accounts Receivable
P.O. Box 9674
Uniondale, NY 11553
Sodexho, Inc. & Affiliates $381,303
P.O. Box 905374
Charlotte, NC 28290
Horizon CSA, LLC $350,001
P.O. Box 867
Troutman, NC 28166
Boston Scientific Corp. $276,428
P.O. Box 8500-6205
Philadelphia, PA 19178
Navix Diagnostix, Inc. $268,650
P.O. Box 403837
Atlanta, GA 30384
Besler Consulting $256,754
1215 Livingston Avenue
North Brunswick, NJ 08902
Sempra Energy Solutions $255,676
P.O. Box 51345
Los Angeles, CA 90051-5645
Guidant Sales Corporation $227,343
75 Remittance Drive, Suite 6094
Chicago, IL 60675
Dr. Shahrok Ahkami $200,000
110 Passaic Avenue
Passaic, NJ 07055
CANWEST: Poor Performance Cues Moody's to Review Low-B Ratings
--------------------------------------------------------------
Moody's Investors Service placed Canwest MediaWorks Inc.'s Ba3
corporate family and B2 senior subordinate ratings under review
for possible downgrade. At the same time, Moody's lowered
CanWest's speculative grade liquidity rating to SGL-3 from SGL-2.
The ratings action follows CanWest's release of its third quarter
results, which were weaker than previously expected by Moody's
such that we now believe the company's 2007 credit metrics are
unlikely to improve to levels required to sustain the current
rating.
The ratings review will focus on:
1) CanWest's prospects to strengthen operating performance in
its Canadian and Australian broadcasting segments over the
next couple of years,
2) the potential for the company's newspaper assets to grow
revenue and offset margin pressure amidst evolving industry
challenges, and
3) Moody's expectations for cash flow and liquidity available
to CanWest itself.
CanWest MediaWorks Inc. is a communications holding company based
in Winnipeg, Manitoba Canada, with interests in TV, radio and
publishing operations in Canada, Australia, New Zealand, the
Republic of Ireland, Israel, Turkey and the UK.
CERVUS FINANCIAL: Closes $11.5 Mil. Asset Sale to Macquarie Bank
----------------------------------------------------------------
Cervus Financial Group Inc. completed the transfer of certain
assets to its wholly-owned subsidiary, Cervus Financial Corp., and
the subsequent sale of all of the shares of Cervus Financial Corp.
to a wholly-owned subsidiary of Macquarie Bank Limited for
aggregate cash consideration of $11,512,211.62.
As reported in the Troubled Company Reporter on June 20, 2006,
the Company filed for protection under the CCAA on June 8, 2006
and entered into an agreement with a wholly-owned subsidiary of
Macquarie Bank Limited whereby Macquarie Bank will acquire the
business of Cervus. Macquarie established a first priority
$4 million debtor-in-possession operating facility with the
operating subsidiary of the Company, Cervus Financial Corp.
Cervus Financial Corp. will continue to carry on the business of
funding and servicing residential mortgages and is no longer
operating under the Companies Creditor Arrangement Act.
Cervus Financial Group Inc. will continue to operate under the
CCAA protection and received, on July 7, 2006, an extension of the
CCAA proceedings to Sept. 22, 2006. The Company intends to
proceed with a claims identification and barring process. After
the completion of this process and the identification of all
liabilities, creditor claims will be paid and all remaining
proceeds will be distributed to the shareholders of the Company.
The board of directors is considering alternatives for the
ultimate future of the Company.
About Macquarie Bank
Headquartered in Sydney, Australia, Macquarie Bank Ltd. (ASX: MBL)
is a diversified international financial services organization,
listed on the Australian Stock Exchange. Macquarie employs almost
8,300 people in 26 countries.
About Cervus
Headquartered in Toronto, Ontario, Cervus Financial Group Inc.
(CFG:TSX)is a Canadian financial services company created as an
industry initiative with leading mortgage broker companies and
fixed income investment banks to become a high-yield residential
mortgage producer. Cervus is focused on funding and servicing
insurable conventional and high ratio insured residential
mortgages originated through mortgage brokers. Cervus is
currently licensed under Ontario, Quebec, British Columbia and
Alberta mortgage broker/lender legislation and is seeking similar
regulatory approvals in other Canadian Provinces as required.
With additional sales offices in Vancouver, Calgary and in
Montreal, Cervus Financial Group Inc. conducts all lending
operations through its wholly owned subsidiary, Cervus Financial
Corp.
CHECKERED FLAG: Trustee Can Hire Barry Strickland as Accountant
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
allowed Sherman B. Lubman, the chapter 7 trustee appointed to
liquidate Checkered Flag Equipment Sales and Transport, Inc., t/a
Checkered Flag Transport, to hire Barry Strickland & Company, as
his certified public accountants.
The Trustee said he requires the assistance of experienced
accountants to perform various accounting duties that are needed
for the proper administration of the bankruptcy estate including
but not limited to the preparation and filing of local, state and
federal tax returns.
The firm's current standard hourly rates for accountants are
between $190 and $240 while current standard hourly rates for
paraprofessionals are between $60 and $98.
Barry I. Strickland assured the Court that his firm and its
professionals do not hold material interest adverse to the
Debtor's estate and are disinterested as defined in Section
101(14) of the Bankruptcy Code.
Headquartered in Thornburg, Virginia, Checkered Flag Equipment
Sales and Transport, Inc. -- http://www.checkeredflagequip.com/--
offered local and long-distance transport. The Company filed for
chapter 11 protection on March 10, 2004 (Bankr. E.D. Va. Case No.
04-32343). When the Debtor filed for bankruptcy, it reported
assets amounting between $1 million and $10 million and debts
aggregating between $10 million and $50 million. The Court
converted the Debtor's chapter 11 case to a chapter 7 liquidation
proceeding on March 14, 2004, and named Sherman B. Lubman as
chapter 7 trustee. Kevin A. Lake, Esq., in Richmond, Va.,
represent Mr. Lubman.
COLLINS & AIKMAN: Seeks to Dump Equipment with Attached GE Liens
----------------------------------------------------------------
In connection with the wind-down of their fabrics business and
other miscellaneous operations, Collins & Aikman Corporation and
its debtor-affiliates anticipate selling or abandoning equipment
in which General Electric Capital Corporation asserts an interest.
Accordingly, the Debtors seek authority from the U.S. Bankruptcy
Court for the Eastern District of Michigan to sell or abandon the
Equipment pursuant to these procedures:
(a) The Debtors will coordinate with GECC regarding the method
and procedure for the sale or abandonment of any
Equipment. If parties cannot agree on the method and
procedure, a hearing will be scheduled before the Court to
determine a method and procedure.
(b) If the Debtors sell any of the Equipment, they will
deposit and hold the proceeds of the sale in a segregated
account pending final resolution of GECC's claims against
the Debtors related to the Equipment.
(c) Any sale will be free and clear of all liens, claims,
interests and encumbrances with the Liens attaching only
to the sale proceeds in the same validity, extent and
priority as immediately before the transaction.
Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, explains that the GECC Procedures will minimize the
Debtors' postpetition obligations and increase the efficiency and
overall cost-effectiveness of the fabrics business wind-down.
The Debtors will be able to dispose of excess and obsolete
equipment in cooperation with GECC.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 33; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
COLLINS & AIKMAN: Wants More Time to Decide on Becker Leases
------------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Eastern District of Michigan to
extend the period within which they must assume or reject
unexpired leases with Becker Properties, LLC, and Anchor Court,
LLC, until the date a plan of reorganization is confirmed in their
Chapter 11 cases.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, tells Judge Rhodes that the Debtors are currently
negotiating with potential investors for a stalking horse bid in
connection with a plan. These negotiations directly impact on
what steps the Debtors may take regarding certain assets,
including the Leases.
Accordingly, Mr. Schrock relates, the Debtors require more time to
make an informed decision on the Leases. The Debtors expect that
this decision will be made in connection with confirmation of a
plan.
The Debtors intend to finalize a term sheet with a potential
stalking horse bidder and file the necessary pleadings soon.
Mr. Schrock assures the Court that Becker and Anchor are not
damaged by the Debtors' continued occupation of the Leased
properties. The Debtors are complying with their postpetition
obligations related to the Leases on a timely basis.
"Maintenance of the Leases is essential to the Debtors' ability
to reorganize in a smooth and efficient manner, as relocating
from the Lease properties would come at a great expense and
inconvenience, further complicating the Debtors' ability to
reorganize effectively," Mr. Schrock says.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 33; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
COMMERCE PLANET: Reduces Debt by Over $700,000
----------------------------------------------
Commerce Planet, Inc., fka NeWave, Inc., repaid $705,000 in debt
with cash generated from operations during the month of June.
Commerce Planet CEO Michael Hill stated, "Over the past month,
we've repaid $705,000 in debt from cash flow. As previously
stated, during fiscal year 2006, we were looking to reduce our
debt by 50% overall. We have certainly exceeded those 2006
initiatives by reducing our debt by about 70% year to date. We
will continue to strive towards additional debt reduction through
cash flow and earnings growth. We believe that these goals are
attainable and look forward to a strong remainder of 2006."
About Commerce Planet
Commerce Planet, Inc., fka NeWave, Inc. (OTC Bulletin Board:
CPNE) -- http://www.commerceplanet.com/-- provides e-commerce
solutions and thousands of products at significant savings to its
online loyalty club customers and members through its websites:
onlinesupplier.com, buydiscount.com, and mysoftwaretutor.com
At March 31, 2006, NeWave's balance sheet showed a stockholders'
deficit of $2,081,761, compared to a 2,854,264 deficit at Dec. 31,
2005.
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.
COMMONWEALTH PORT: Fitch Lowers $17.6 Million Bonds' Rating to B+
-----------------------------------------------------------------
Fitch downgraded to 'B+' from 'BBB-' $17.6 million outstanding
Commonwealth Port Authority, Commonwealth of the Northern Mariana
Islands, airport revenue bonds, 1998 senior series A. The Rating
Outlook is Negative.
Fitch's Negative Outlook reflects continued uncertainty
surrounding the economic fundamentals of the credit.
The series 1998 bonds are secured by a pledge of net revenues
including approved passenger facility charge moneys. The
authority owns and operates three airports in the CNMI, the
largest of which is Saipan International Airport. The
commonwealth consists of a chain of 14 islands, four of which
are inhabited, located in the western Pacific Ocean approximately
1,461 miles south of Tokyo, Japan and 5,690 miles west of San
Francisco.
The 'B+' rating reflects the authority's inability to generate
sufficient revenues to pay debt service in fiscal 2006 (Sept. 30)
and going forward (2007-2011) absent a new rate structure. Base
case forecasts project a rate covenant default in fiscal 2006 and
the use of $1.1 million in unrestricted cash to make debt service
payments. Although management has several viable options to
decrease the deficit in future years, including implementing a new
cost-recovery airline rate structure and use of PFC hardship
assistance from the Federal Aviation Administration, the system
remains inherently susceptible to operational and financial shocks
that are beyond management's control.
The deterioration of CPA's finances stemmed from the departure of
Japan Air Lines (Issuer Default Rating 'BB-', Rating Outlook
Stable by Fitch), which ceased all scheduled service to CNMI on
Oct. 20, 2005. At the time, JAL was the second leading carrier in
the market accounting for 26% of enplanements.
Northwest Airlines, currently operating under bankruptcy
protection, quickly backfilled some of the lost service, resulting
in a net decline in enplanements for fiscal 2006 of just 9.5%.
Any rate increase would likely affect Northwest, which now has a
dominate market share position at 42% as of May 2006.
Furthermore, CNMI's economy is tourism-based and faces increased
competition with other leisure destinations in the Pacific. Fitch
views the potential for increased service as limited, but
management recently hired consultants for assistance with route
development.
Counterbalancing the above mentioned credit challenges is the
essentiality of an airport system as a key transportation link to
the CNMI. Furthermore, management's experience in operating an
airport system through operational and financial volatility, the
successful implementation of a PFC program, and management's
strong history of obtaining FAA grants also enhance the credit.
COMMUNICATIONS CORP: Has Until January 3 to Decide on Leases
------------------------------------------------------------
The Honorable Gerald H. Schiff of the U.S. Bankruptcy Court for
the Western District of Louisiana extended, until January 3, 2007,
the period within which Communications Corporation of America,
White Knight Holdings, Inc., and their respective debtor-
affiliates, have the right to assume, assume and assign, or reject
unexpired nonresidential real property leases.
The Debtors tell the Court that the leases are important assets of
their estates, thus the decision to assume or reject is central to
any plan of reorganization. The Debtors say that without these
leases, they would be unable to operate, which in turn would
deprive the Debtors of any meaningful opportunity to reorganize.
Further, the Debtors relate that the leases of the properties at
which they are currently operating their businesses are necessary
for them to continue the conduct of their business without
significant interruption.
The Debtors contend that the size and complexity of their chapter
11 cases justify their need for the extension. The Debtors argue
that the statutory 120-day period will not provide them with ample
time to appraise each lease's value in relation to a plan of
reorganization.
The Debtors assure the Court that they are continuing to pay rents
pursuant to the leases for all properties which they operate their
businesses.
About White Knight
Headquartered in Lafayette, Louisiana, White Knight Holdings,
Inc., is a media, television and broadcasting company.
White Knight entered into commercial inventory agreements, joint
sales agreements, and shared services agreements with
Communications Corporation of America. However, both entities are
independent companies and are not affiliates of each other. Along
with Communications Corp., White Knight operates around 23 TV
stations.
White Knight and five of its affiliates filed for chapter 11
protection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50422
through 06-50427). R. Patrick Vance, Esq., and Matthew T. Brown,
Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
LLP, represents White Knight and its debtor-affiliates in their
restructuring efforts. White Knight and its debtor-affiliates'
chapter 11 cases are jointly administered under Communication
Corporation of America's chapter 11 case.
When the Debtors filed for protection from their creditor, they
estimated less than $50,000 in assets and estimated debts between
$100,000 and $500,000.
About Communications Corp. of America
Headquartered in Lafayette, Louisiana, Communications Corporation
of America, is a media and broadcasting company. Along with media
company White Knight Holdings, Inc., it owns and operates around
23 TV stations in Indiana, Texas and Louisiana. Communications
Corporation and 10 of its affiliates filed for bankruptcy
protection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50410
through 06-50421). Douglas S. Draper, Esq., William H. Patrick
III, Esq., and Tristan Manthey, Esq., at Heller, Draper, Hayden,
Patrick & Horn, LLC, represents Communications Corporation and its
debtor-affiliates. When Communications Corporation and its
debtor-affiliates filed for protection from their creditors, they
estimated assets and debts of more than $100 million.
CONVERSION SERVICES: May Pass Amex Compliance Plan Until July 31
----------------------------------------------------------------
Conversion Services International, Inc. received notice from the
Staff of the American Stock Exchange indicating that the Company
is below certain of the Exchange's continued listing standards as
set forth in Sections 1003(a)(i), 1003(a)(ii) and 1003(a)(iv) of
the AMEX Company Guide.
The Company has until July 31, 2006, to submit a plan of
compliance to the Exchange that demonstrates the Company's ability
to regain compliance with Section 1003 of the AMEX Company Guide
within 18 months. If the Company does not submit a plan or if the
plan is not accepted by the AMEX, the Company will be subject to
delisting procedures as set forth in Section 1010 and part 12 of
the Company Guide.
The Company's Common Stock continues to trade on AMEX. Its trading
symbol will remain the same but will have an indicator ".BC" added
as an extension to signify noncompliance with the continued
listing standards.
About Conversion Services International
Based at East Hanover, New Jersey, Conversion Services
International, Inc. (Amex: CVN) -- http://www.csiwhq.com/--
provides professional services focusing on strategic consulting,
data warehousing, business intelligence, business process
reengineering, as well as integration and information technology
management solutions. CSI offers an array of products and
services to help companies define, develop, and implement the
warehousing and strategic use of both enterprise-wide and specific
categories of strategic data.
At March 31, 2006, the Company's balance sheet showed a
stockholders' deficit of $326,506, compared to $1,629,139 of
positive equity at Dec. 31, 2005.
COREL CORP: Posts $4 Million Net Loss in Quarter Ended May 1
------------------------------------------------------------
Corel Corporation generated $44.2 million of revenues in the
second quarter ended May 31, 2006, an increase of 11% over
revenues of $40 million in the second quarter of fiscal 2005.
GAAP net loss in the second quarter of fiscal 2006, which includes
a one time charge of $8.3 million related to the early retirement
of debt, was $4 million. This compares to net income of $158,000
in the second quarter of fiscal 2005.
Non-GAAP adjusted net income for the second quarter of fiscal 2006
was $8.4 million, an increase of 11% compared to non-GAAP adjusted
net income for the second quarter of fiscal 2005 of $7.5 million.
Non-GAAP adjusted EBITDA in the second quarter of fiscal 2006 was
$13.7 million, a 6% increase compared to $13 million in the second
quarter of fiscal 2005.
During the quarter, Corel completed its initial public offering
and refinanced its credit facilities. Net proceeds to Corel from
the offering were $72.5 million. As a result of the offering and
related transactions, Corel reduced its outstanding debt at the
end of the quarter from $140 million to $90 million and ended the
quarter with $33 million in cash and cash equivalents.
"Corel's second quarter performance demonstrates the continued
strength of our business model and the results we are able to
achieve by remaining focused on the needs of our customers and
partners," said David Dobson, CEO of Corel Corporation. "With
strong revenue performance, new global partnerships, and
increasing traction in developing and emerging markets, Corel is
successfully executing its strategy to deliver long-term,
shareholder value. WinZip's contribution further illustrates the
benefits of the Corel acquisition model as we leverage operating
efficiencies to drive incremental earnings."
Mr. Dobson continued, "Corel has proven itself to be a leader in
delivering high-value, affordable software that is easy to learn
and use. We remain committed to that vision and to delivering a
unique customer experience that differentiates Corel in the
marketplace. Our new digital imaging platform, code named "Alta,"
is an example of the innovations we are developing to provide
customers and partners with more flexibility, convenience, and
control in creating their own digital imaging environment.
Corel's employees will continue to work closely with our customers
and partners to deliver software that responds to their evolving
needs."
Corel provided guidance for the third quarter ending
Aug. 31, 2006. The Company currently expects:
-- Revenue in the range of $39 million to $41 million; and
-- GAAP net income of $3.4 million to $4.7 million and non-
GAAP adjusted net income of $7.2 million to $8.5 million.
Corel further provided guidance for the fiscal year ending
November 30, 2006. The Company currently expects:
-- Revenue in the range of $172 million to $175 million; and
-- GAAP net income of $4.7 million to $7.1 million and non-
GAAP adjusted net income of $33.0 million to $35.4
million.
About Corel Corp
Based in Ottawa, Ontario, Corel Corporation
(NASDAQ:CREL)(TSX:CRE) -- http://www.corel.com/-- is a packaged
software company with an estimated installed base of over 40
million users. The Company provides productivity, graphics and
digital imaging software. Its products are sold in over 75
countries through a scalable distribution platform comprised of
original equipment manufacturers, Corel's international websites,
and a global network of resellers and retailers. The Company's
product portfolio features CorelDRAW(R) Graphics Suite, Corel(R)
WordPerfect(R) Office, WinZip(R), Corel(R) Paint Shop(R) Pro, and
Corel Painter(TM).
* * *
As reported in the Troubled Company Reporter on April 7, 2006,
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit and senior secured debt ratings to Corel Corp.
At the same time, Standard & Poor's assigned its 'B' bank loan
rating, with a recovery rating of '3', to the company's US$165
million first-lien senior secured bank facility. The outlook is
positive.
As reported in the Troubled Company Reporter on April 11, 2006,
Moody's Investors Service assigned first time corporate family
rating of B3 to Corel Corporation and B3 ratings to Corel's
proposed senior secured term loan facility and senior secured
revolving credit facility. Moody's also assigned a SGL-2
liquidity rating, reflecting good liquidity. Combined proceeds of
$90 million from the term loan and those of Corel's IPO will be
used to repay Corel's existing debt. The rating outlook is
stable.
CRESCENT JEWELERS: Panel Slams Capital Factors' Multi-Mil. Claim
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in
Crescent Jewelers, Inc.'s chapter 11 case objects to Capital
Factors, Inc.'s $70,240,896 unsecured claim.
The Committee also objects to the $4-million claim of
International Diamonds, L.L.C, and Astra Diamond Manufacturers
Ltd. Capital Factors claims to be the assignee for the
International/Astra Claim.
The Committee wants both claims estimated at $0.
The Capital Factors Claim is the largest single unsecured claim in
the Debtor's case. Likewise, the Committee has determined that
the International/Astra Claim lacks merit. John D. Fiero, Esq.,
at Pachulski Stang Ziehl Young Jones & Weintraub LLP, contends
that the collective determination of these claims will have a
substantial and dramatic impact on the distributions to be
realized by unsecured creditors in this case.
Capital Factors alleges that it provided receivables-based
financing to Cosmopolitan Gem Corporation, a major supplier of
merchandise to Crescent, long before the Debtor filed for
bankruptcy. Sometime in 2003, Cosmopolitan's business collapsed.
International and Astra, suppliers to Cosmopolitan (and to
Crescent), commenced a suit in a New York state court against
Cosmopolitan, Capital Factors, customers of Cosmopolitan including
Crescent and its affiliate Friedman's Inc.
The New York Action sought to recover money and merchandise
allegedly lost by International and Astra in connection with their
Cosmopolitan relationship. International and Astra also sought
recovery of money and merchandise with respect to goods they
consigned directly to Crescent. Capital Factors subsequently made
counterclaims, cross-claims and third party claims in the New York
Action, alleging that Cosmopolitan and its principals had
defrauded Capital Factors by, among other things, inducing it to
advance money to Cosmopolitan against fictitious accounts
receivable. In search of additional sources of recovery, Capital
Factors followed the International/Astra approach and sued
customers of Cosmopolitan (including Crescent and Friedman's),
seeking to:
(1) collect on allegedly unpaid accounts receivable that had
been assigned to Capital Factors as security for its
advances to Cosmopolitan; and
(2) recover its Cosmopolitan-related losses under a series of
civil tort theories alleging that Crescent directly
committed torts against Capital Factors, aided and abetted
Cosmopolitan's fraud in connection with the Crescent
accounts receivable and violated the Racketeer Influenced
and Corrupt Organizations Act.
Capital Factors, International and Astra appear to allege that
Crescent is liable for damages not only relating to the payment of
amounts allegedly owing from Crescent to Cosmopolitan, but all
damages suffered by them as a result of Cosmopolitan's fraudulent
activity, even though such conduct relates to the receivables of
customers other than Crescent. Further, it appears that Capital
Factors, International and Astra seek to treble their damages
under the civil RICO statute, although neither proof of claim
contains a plainly written accounting of the components of their
bankruptcy claims or an accounting of the monies and goods already
deposited into escrow for their benefit.
Mr. Fiero points out that neither Capital Factors, International,
nor Astra ever obtained judgments against Crescent on their
complaints. Although the New York Action has been pending for
several years, Crescent has not been a party to that action since
the commencement of Crescent's chapter 11 case.
Headquartered in Oakland, California, Crescent Jewelers, Inc. --
http://www.crescentonline.com/-- sells jewelry and operates over
160 stores in six western states. The Company filed for chapter
11 protection on August 11, 2004 (Bankr. N.D. Cal. Case No. 04-
44416). Lee R. Bogdanoff, Esq. at Klee, Tuchin, Bogdanoff and
Stern represents the Debtor in its chapter 11 case. John D.
Fiero, Esq., Kenneth H. Brown, Esq., and Tobias S. Keller, Esq.,
at Pachulski, Stang, Ziehl, Young and Jones represent the Official
Committee of Unsecured Creditors. In its April 2006 Monthly
Operating Report, the Debtor reported $77,372,000 in total assets
and $134,972,000 in total debts.
DAYSPRING-FITCH: Case Summary & Five Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Dayspring-Fitch & Sons Funeral Home, Inc.
P.O. Box 18253
Seattle, Washington 98118
Bankruptcy Case No.: 06-12185
Type of Business: The Debtor operates a funeral home.
See http://www.dayspringfitch.com/
Chapter 11 Petition Date: July 7, 2006
Court: Western District of Washington (Seattle)
Judge: Samuel J. Steiner
Debtor's Counsel: Jason E. Anderson, Esq.
1825 Northwest 65th Street
Seattle, Washington 98117
Tel: (206) 706-2882
Total Assets: $1,028,260
Total Debts: $767,714
Debtor's Five Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
York/AJ Distribution Trade Debt $20,000
P.O. Box 24016
Denver, CO 80224
Big O Tire Stores $480
34611 16th Street
Federal Way, WA 98003
Ziegler & Arnes $317
1645 Jills Court
Bellingham, WA 98226
Beck's Funeral Home Inc. $285
405 5th Avenue South
Edmonds, WA 98020
Bellevue Cadillac Oldsmobile Trade Debt $34
1001 106th Avenue Northeast
Bellevue, WA 98004
DEATH ROW: Judge Carroll Orders Bankr. Trustee Takeover of Label
----------------------------------------------------------------
The Hon. Ellen Carroll of the U.S. Bankruptcy Court for the
Central District Of California in Los Angeles, ordered a chapter
11 Trustee takeover of Marion "Suge" Knight's Death Row Records
Inc., saying the record label has undergone gross mismanagement,
the Associated Press reports.
Judge Carroll said the label's accounting practices were in
disarray and noted Mr. Knight's admission of his failure to review
the Debtor's financial statements in a decade.
Mr. Knight was not present at the hearing when Judge Carroll
handed down her order.
Headquartered in Compton, California, Death Row Records Inc. --
http://www.deathrowrecords.net/-- is an independent record
producer. The company and its owner, Marion Knight, Jr., filed
for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif.
Case No. 06-11205 and 06-11187). Daniel J. McCarthy, Esq., at
Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq.,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
total assets of $1,500,000 and total debts of $119,794,000.
DELPHI CORP: Sun Opposes Assignment of MobileAria Contracts
-----------------------------------------------------------
Sun Microsystems Inc. asks the U.S. Bankruptcy Court for the
Southern District of New York to deny Delphi Corporation and its
debtor-affiliates' request to assume and assign any executory
contract, to which it is a party, related to the proposed sale of
MobileAria Inc.
Sun contends that the Debtors have failed to provide sufficient
information to determine the Sun contracts that they seek to
assume and assign in connection with the MobileAria sale.
To the extent the Debtors assign contracts under which Sun has
licensed rights, Sun asserts that the Debtors are precluded from
assuming or assigning those contracts without its express
consent.
As reported in the Troubled Company Reporter on June 14, 2006, the
Debtors asked the Court to approve:
-- the sale of MobileAria to Wireless Matrix or to the
Successful Bidder at an auction;
-- the assumption and assignment of certain contracts and
unexpired leases related to MobileAria to Wireless
Matrix or the Successful Bidder; and
-- the assumption of certain liabilities by Wireless
Matrix or the Successful Bidder.
MobileAria, one of the Debtors, was founded in 2000 and is a
service provider of mobile resource management solutions.
MobileAria will sell its assets to Wireless Matrix for $6,500,000,
$975,000 of which will be placed into an escrow account to satisfy
indemnification obligations. The remaining available funds from
the escrow are to be released on the first anniversary of the date
of closing.
Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology. The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide. The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts. (Delphi Bankruptcy News, Issue No. 31; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DELPHI CORP: Can Use Settlement Protocol to Resolve Claims Dispute
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorizes Delphi Corporation and its debtor-affiliates to utilize
the Claims Settlement Procedures to compromise or settle certain
classes of controversy and allow certain claims within those
classes.
The Court rules that resolution of the disputes will be subject
to these parameters:
(a) If the Settlement Amount for a general unsecured
prepetition claim is less than $1,000,000 -- and $500,000
for a prepetition secured or priority claim,
administrative expense priority claim, or other
postpetition claim -- the Debtors may settle the claim
without the need for further Court approval or notice.
(b) Once the aggregate amount of all Settlement Amounts
obtained exceeds $100,000,000, the Debtors will follow
these procedures with respect to any individual
proposed settlement that is equal to or greater than
$500,000:
-- The Debtors will provide the Notice Parties with a
Proposed Settlement Notice if:
(1) the difference between the Debtors' good faith
estimate of the value of the controversy and the
Settlement Amount for a general unsecured
prepetition claim -- Documented Difference --
is greater than or equal to $1,000,000 -- and
$500,000 for a prepetition secured or priority
claim, administrative expense priority claim, or
other postpetition claim -- but less than
$5,000,000;
(2) the Settlement Amount for a general unsecured
prepetition claim is greater than or equal to
$1,000,000 -- or greater than or equal to $500,000
for a prepetition secured or priority claim,
administrative expense priority claim, or other
postpetition claim; or
(3) the Debtors have determined that a reasonable
compromise or settlement of a claim affects any
claim asserted by them against a third party in
excess of $1,000,000; and
-- Notice Parties will have 10 business days following
receipt to object. After a timely objection is
received, parties will attempt a consensual resolution.
Should either party determine that an impasse exists,
then the Debtors will not be authorized to consummate
the proposed settlement without further Court order.
(c) If the Documented Difference is greater than or equal to
$5,000,000, the Debtors will need Court approval to
consummate the proposed settlement of a claim.
(d) If the Settlement Amount with respect to any individual
proposed settlement is greater than or equal to
$10,000,000, the Debtors will need Court approval to
consummate the settlement.
Furthermore, the Court rules that the Official Committee of
Equity Security Holders will be included as a Notice Party, but
only in instances in which the claim at issue arises as a result
of general labor disputes; the shut down, wind down, or closure
of a manufacturing facility; or the closure of one of the
Debtors' plants or businesses.
Moreover, counsel to the Ad Hoc Equity Committee will be included
as a Notice Party only with respect to claims proposed to be
settled by Delphi Corporation.
As reported in the Troubled Company Reporter on June 20, 2006, the
Debtors wanted to resolve controversies without further Court
approval provided that the final settlement amount is at most
$20,000,000 for general unsecured prepetition controversies and
$10,000,000 for prepetition secured, prepetition priority, and
postpetition controversies. The Debtors expected that the
controversies would include:
(a) disputes regarding any obligations owed by third parties
to the Debtors, or other claims of the Debtors against
third parties;
(b) disputes with regulatory or other governmental or quasi-
governmental agencies; and
(c) other claims or controversies which, in the Debtors'
business judgment, affect the ability of the Debtors to
operate, manage, or otherwise conduct their businesses.
Negotiations would be primarily handled by the employees and
agents of the Debtors who would normally handle these matters.
However, the Debtors will maintain internal approval procedures to
monitor the dispute resolution process and to provide notice
to specified parties-in-interest.
Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology. The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide. The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts. (Delphi Bankruptcy News, Issue No. 31; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DMX MUSIC: Court Confirms Chapter 11 Liquidation Plan
-----------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware approved, on June 27, 2006, the Chapter 11
Liquidation Plan filed by Maxide Acquisition, Inc., dba DMX Music,
Inc. and its debtor-affiliates.
The Court determined that the Plan satisfies the 13 standards for
confirmation under Section 1129(a) of the Bankruptcy Code.
Edward Bond, CPA, has been designated by the Official Committee of
Unsecured Creditors to serve as liquidating trustee.
The Court's confirmation paves the way for the distribution of as
much as $73.25 million in proceeds from the sale of Debtors'
assets, The Deal reports.
As reported in the Troubled Company Reporter on May 8, 2006, under
the Debtors' Plan, holders of these claims will be paid in full:
1) Administrative Claims
2) Priority Tax Claims
3) Priority Claims Against Maxide
4) Priority Claims Against Consolidated Debtors
5) Other Secured Claims Against the Consolidated Debtors
6) Professional Fee Claims
Professional fees and expenses not exceeding $100,000 will be paid
and reimbursed, provided that, without the prior written consent
of Royal Bank of Canada as the lenders' agent, the Liquidating
Debtors may not use:
1) more than $15,000 of the $100,000 to pay any fees or
reimburse any expenses accrued or incurred by any
professionals in connection with the investigation of any
avoidance actions; and
2) any portion of the $100,000 to pay any fees and reimburse
any expenses accrued or incurred by any professionals in
connections with the prosecution or collection of any
avoidance actions.
The Lender Group's Secured Claims Against Maxide are entitled to a
75% pro rata share from the distribution while General Unsecured
Claims Against the Consolidated Debtors will get 20%.
Holders of General Unsecured Maxide Claims, Equity Interests in
Maxide, and Lender Group Secured Claims Against Consolidated
Debtors will receive nothing under the Plan. All Intercompany
Claims and all Equity Interests in Consolidated Debtors will be
cancelled on the effective date of the Plan.
Headquartered in Los Angeles, California, Maxide Acquisition,
Inc., dba DMX MUSIC, Inc. -- http://www.dmxmusic.com/-- is
majority-owned by Liberty Digital, a subsidiary of Liberty Media
Corporation, with operations in more than 100 countries. DMX
MUSIC distributes its music and visual services worldwide to more
than 11 million homes, 180,000 businesses, and 30 airlines with a
worldwide daily listening audience of more than 100 million
people. The Company and its debtor-affiliates filed for chapter
11 protection on Feb. 14, 2005 (Bankr. D. Del. Case No. 05-10431).
The case is jointly administered with Maxide Acquisition, Inc.
(Bankr. D. Del. Case No. 05-10429). Curtis A. Hehn, Esq., and
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., represent the Debtors in their restructuring
efforts. Andrew J. Flame, Esq., and Andrew C. Kassner, Esq., at
Drinker Biddle & Reath LLP, represent the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts.
ENCORE MEDICAL: S&P Puts B Corporate Credit Rating on Neg. Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on
Austin, Texas-based Encore Medical Corp. and subsidiary Encore
Medical IHC Inc., including the 'B' corporate credit rating, on
CreditWatch with negative implications (indicating that the
ratings could be lowered or affirmed upon further review).
"The CreditWatch placement follows Encore's announcement that it
had entered into a definitive merger agreement with a company
formed and controlled by Blackstone Capital Partners V L.P.,"
said Standard & Poor's credit analyst Jesse Juliano.
The total value of the transaction is approximately $870 million.
Standard & Poor's assumes that the company's debt obligation after
the transaction will be greater than the company's current
obligation of $342 million (as of April 1, 2006).
While Standard & Poor's expects that a recapitalization would
retire all of the company's outstanding rated debt, the new
capital structure would likely place downward pressure on the
corporate credit rating (which may remain outstanding following
the recapitalization).
ENTERGY NEW ORLEANS: Hires Taggart Morton as Special Counsel
------------------------------------------------------------
Entergy New Orleans Inc. obtained permission from the U.S.
Bankruptcy Court for the Eastern District of Louisiana to employ
Taggart, Morton, Ogden, Staub, Rougelot & O'Brien, LLC, as its
special counsel to advise and assist it and its general bankruptcy
counsel in connection with utility regulatory advice, including
but not limited to legal services in connection with Lowenburg, et
al v. ENOI.
As reported in the Troubled Company Reporter on May 16, 2006, ENOI
will pay Taggart Morton based on its customary hourly rate. ENOI
will also reimburse expenses of any Taggart Morton professional in
connection with its representation of the Debtor.
Stephen T. Perrien, Esq., will be primarily responsible for giving
legal advice to ENOI. Mr. Perrien's hourly rate is $160. Taggart
Morton will also utilize the skills of the firm's other attorneys
on an as-needed basis.
Stephen T. Perrien, Esq., a partner at Taggart, Morton, assures
the Court that his firm does not represent or hold any interest
adverse to ENOI and its estate. Mr. Perrien also confirms that
Taggart Morton is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code.
Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation. Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans. Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004. Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing. Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000. (Entergy New
Orleans Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ENTERGY NEW ORLEANS: Assumes Amended Bridgeline Contract
--------------------------------------------------------
The Hon. Jerry A. Brown of the U.S. Bankruptcy Court for the
Eastern District of Louisiana approved the request of Entergy New
Orleans Inc. to assume Bridgeline Holdings, L.P.'s Amended Storage
Agreement.
As reported in the Troubled Company Reporter on June 20, 2006,
ENOI and Bridgeline orally agreed to amend and extend the Storage
Agreement and prepared a term sheet to which the parties have
agreed but not yet executed.
Under the Term Sheet, ENOI will execute an amended Storage
Agreement and assume the amended Agreement. The Agreement will be
extended for three years and its provisions for storage, injection
and withdrawal quantities and pricing will be revised. ENOI will
also obtain a secondary delivery point for its stored gas
ENOI is in default to Bridgeline by $386,575 under the Storage
Agreement. Bridgeline also asserts entitlement to interest and
attorneys' fees of more than $15,000.
Under the Term Sheet, Bridgeline will accept $401,575 as total
cure amount, including $15,000 in defaults for interest and
attorneys' fees, from ENOI to be paid in equal installments over
six months, starting in July 2006.
The parties also agree to modify the Stipulation to permit ENOI to
withdraw below the 50,000 MCF of stored gas in increments as the
Cure Amount is paid.
About Entergy New Orleans
Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation. Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans. Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004. Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing. Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000. (Entergy New
Orleans Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FASHION SHOP: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Fashion Shop of Kentucky Inc.
11008 Decimal Drive
Louisville, Kentucky 40299
Bankruptcy Case No.: 06-31697
Type of Business: The Debtor retails fashion accessories and
women's apparel.
Chapter 11 Petition Date: July 10, 2006
Court: Western District of Kentucky (Louisville)
Judge: Joan L. Cooper
Debtor's Counsel: David M. Cantor, Esq.
Seiller Waterman LLC
22nd Floor, Meidinger Tower
462 South 4th Street, Suite 2200
Louisville, Kentucky 40202
Tel: (502) 584-7400
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Dixie Manor LLC $36,744
1020 Industry Road, Suite 40
Lexington, KY 40505
CBL/Springhurst Center $29,745
c/o Key Bank-Galileo Mem.
P.O. Box 74845
Cleveland, OH 44191
Four Hands $28,573
P.O. Box 203801
Houston, TX 77216
Fourth Quarter Prop. VII $28,355
P.O. Box 933418
Atlanta, GA 31193
Louisville Galleria LLC $27,586
601 East Pratt Street, 6th Floor
Baltimore, MD 21202
Stein World Inc. $27,426
Office Max Inc. #821 $25,290
Cincinnati Mills $25,000
Rejiem LLC $25,000
Nationwide Wholesale $24,625
Ben Elias Industries Corp. $23,688
SM New Co. Lou./Shelb Rd. Dev. $19,167
Div. Realty
Wearable Integrity Inc. $17,024
Krazy Kat Sportswear LLC $13,754
Global Too $13,291
YMI Jeans Inc. $13,068
Eastgate Mall Inc. $12,365
Blue Ocean Traders $12,310
Insight Media $10,998
Versailles Ltd. $9,834
FEDERAL-MOGUL: Cooper Industries Resolves Abex Asbestos Claims
--------------------------------------------------------------
Cooper Industries, Ltd. and other parties involved in the
resolution of the Federal-Mogul Corporation bankruptcy proceeding
reached a revised agreement regarding Cooper's participation in
Federal-Mogul's 524(g) asbestos claimants' trust. By
participating in this trust, Cooper will resolve its liability for
asbestos claims arising from the Company's former Abex Friction
Products business. The revised proposed settlement agreement is
subject to court approval, to approval by 75% of the current Abex
asbestos claimants and to certain other approvals. The settlement
will resolve more than 38,000 pending Abex claims. Future claims
will be resolved through the bankruptcy trust, and Cooper will be
protected against future claims by an injunction to be issued by
the court upon plan confirmation.
Cooper sold its Automotive Products business, including its Abex
Friction Products business, to FMC in October 1998 and was
indemnified for liabilities related to the divested business,
pursuant to a Purchase and Sale Agreement. On Oct. 1, 2001, FMC
and several of its affiliates filed a Chapter 11 bankruptcy
petition and indicated that FMC may not honor its indemnity
obligations to Cooper, including its obligations for claims
related to the Abex Friction Products business.
In mid-December 2005, Cooper and other parties involved in the FMC
bankruptcy proceeding reached an agreement regarding Cooper's
participation in Federal-Mogul's 524(g) asbestos claimants' trust.
The proposed settlement agreement was subject to certain
conditions, including the issuance of a preliminary injunction
staying all of the pending Abex asbestos claims for which Federal-
Mogul provided indemnification.
At a hearing on Jan. 20, 2006, FMC and other parties to the
bankruptcy proceedings were unable to satisfy the court's
requirements to grant the required preliminary injunction. As a
result, the proposed settlement agreement required renegotiation
of certain terms, which has now been completed.
"In addition to the terms for participation in the Federal-Mogul
524(g) trust, the revised agreement provides Cooper with a fair
resolution of its claims against Federal-Mogul in the event that
the revised settlement is not approved by the current Abex
asbestos claimants or the bankruptcy court," said Kirk Hachigian,
chairman, chief executive officer and president, Cooper
Industries. "Given the costs of continued litigation, the
uncertainty of legislative reforms and the risks inherent in
remaining in the tort system, we believe resolving the Abex
liabilities through the trust is the preferable option for our
shareholders. With this settlement in place, we will have
certainty and finality regarding the Abex liability and can fully
focus management resources on executing our strategic plan."
Terms of the Revised Proposed Settlement Agreement
* Cooper agreed to pay $256 million in cash into the trust on
the date Federal-Mogul emerges from bankruptcy. With
Cooper's strong cash flow and balance sheet, the Company
negotiated elimination of the contribution of 1.4 million
common shares to the trust by increasing the cash
contribution. Cooper has or will receive $37.5 million from
other parties toward its cash obligation.
* As in the December 2005 agreement, Cooper agreed to make 25
annual payments of up to $20 million each to the trust with
payments being reduced by insurance proceeds. The minimum
annual payment of $3 million in the December 2005 agreement
has been eliminated. However, Cooper has agreed to make
advances, beginning in 2015 through 2021, in the event the
trust is unable to pay outstanding qualified claims at 100%
of the value provided for in the trust agreement. In the
event that advances are made by Cooper, they will accrue
interest at 5% per annum, and will be repaid in years where
excess funds are available in the trust or credited against
the future year annual payments. The maximum advances are
$36.6 million.
* Cooper, through Pneumo-Abex LLC, has access to Abex insurance
policies, with remaining limits on policies with solvent
insurers in excess of $750 million. The trust will retain
10% of the insurance proceeds for indemnity claims paid by
the trust for the first 25 years and thereafter will retain
15%.
* Cooper will pay all defense costs through the date Federal-
Mogul emerges from bankruptcy and will be reimbursed for
indemnity payments to the extent such payments are eligible
for payment from the trust. Cooper will retain the rights to
receive the insurance proceeds related to indemnity and
defense costs paid prior to the date Federal-Mogul emerges
from bankruptcy.
* As in the December 2005 proposed agreement, Cooper will
forego certain claims and objections in the Federal-Mogul
bankruptcy proceedings. However, under the revised proposed
agreement, which is subject to court approval, in the event
that Cooper's participation in the Federal-Mogul 524(g) trust
is not approved for any reason, Cooper would receive a cash
payment of $138 million on the date Federal-Mogul emerges
from bankruptcy and 20% of any insurance policy settlements
related to the former Wagner business purchased by Federal-
Mogul in 1998. If Cooper participates in the trust, it will
receive 12% of any Wagner insurance settlements.
"Removing the Company's common stock as a component of the revised
settlement agreement eliminates additional charges and reversals
of charges that may have occurred to account for any changes in
the market value of the Company's stock," said Terry Klebe, senior
vice president and chief financial officer. "In addition, the
agreement provides Cooper a significant cash payment in the event
that we do not participate in the Federal-Mogul 524(g) trust along
with additional upside from insurance recoveries in excess of the
estimated recoveries currently reflected in the overall accrual."
Although the payments related to the settlement could extend to 25
years and the collection of insurance proceeds could extend beyond
25 years, the liability and insurance will not be discounted on
Cooper's balance sheet, as the amount of the actual annual
payments is not reasonably predictable. Cooper anticipates taking
an after-tax charge to "loss from discontinued operations" of
between $20 million and $25 million in the second quarter ended
June 30, 2006.
Parties to the Agreement
In addition to the Company, parties to the agreement include FMC;
Federal-Mogul Products, Inc.; the Future Claimants' Representative
for FMC and FMP appointed in the Chapter 11 cases known as In re
Federal-Mogul Global Inc., T&N Limited, et al., No. 01-10578,
pending in the United States Bankruptcy Court for the District of
Delaware; the Official Committee of Asbestos Claimants for FMC and
FMP appointed in the Reorganization Cases; Pneumo-Abex LLC; and
PCT International Holdings Inc. These parties agreed to the terms
of the proposed settlement agreement.
About Cooper Industries
Headquartered in Houston, Texas, Cooper Industries, Ltd.
(CBE:NYSE) -- http://www.cooperindustries.com/-- manufactures
electrical products and tools. Incorporated in Bermuda, Cooper
employs 29,000 people and operates eight divisions: Cooper B-Line,
Cooper Bussmann, Cooper Crouse-Hinds, Cooper Lighting, Cooper
Menvier, Cooper Power Systems, Cooper Wiring Devices and Cooper
Tools Group.
About Federal-Mogul
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion. The Company filed for chapter 11 protection on
Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan
Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley
Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $10.15 billion
in assets and $8.86 billion in liabilities. Federal-Mogul
Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath &
Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq.,
and Eric M. Sutty, Esq., at The Bayard Firm represent the Official
Committee of Unsecured Creditors.
FOAMEX INTERNATIONAL: PwC Approved to Work on IP License Deal
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorizes
Foamex International Inc. and its debtor-affiliates to amend the
Retention Order so that they may further utilize the services of
PricewaterhouseCoopers LLP's in relation to the Debtors'
intellectual property license agreement with an undisclosed
licensee.
As reported in the Troubled Company Reporter on June 12, 2006, PwC
will review, investigate and examine the Licensee's business
records and accounting records supporting the calculations due
under the IP Agreement. Upon completion of its review, PwC will
provide the Debtors with a written report of its findings.
The Debtors will pay PwC $250 per hour per professional, and
reimburse all actual and necessary expenses incurred by PwC in
connection with its review and analysis of the IP Agreement.
Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor
LLP, in Wilmington, Delaware, tells the Court that it is necessary
to review the IP Agreement to determine whether the compensation
that the Debtors are currently receiving from the Licensee is
appropriate.
Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts. Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors. As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts. (Foamex International Bankruptcy
News, Issue No. 21; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
GENERAL MILLS: Reports $222 Mil. of Net Earnings in 4th Quarter
---------------------------------------------------------------
General Mills' net sales grew 4% to $11.6 billion, outpacing 2%
growth in unit volume, for the fiscal year ended May 28, 2006.
Segment operating profits increased 5% to $2.1 billion.
Net earnings were below the prior year's reported results, which
included a $284 million after-tax gain from the divestitures of
Lloyd's refrigerated meats and the company's interest in a
European snacks joint venture (SVE).
Chairman and Chief Executive Officer Steve Sanger said, "Our
fourth-quarter results were solid, with both sales and operating
profit up 5%. For the year in total, all three of our operating
segments achieved net sales gains and even stronger growth in
operating profits. We coupled this good growth with improving
returns on invested capital. And we returned nearly $1.4 billion
in cash to shareholders through increased dividends and renewed
share repurchases."
Fourth Quarter Results
Net sales for the fourth quarter of 2006 grew 5% to $2.8 billion,
driven by a 3% unit volume increase. Segment operating profits
rose 5% for the 13-week period to $493 million.
Fourth quarter net earnings in 2006 benefited from a favorable tax
adjustment that reduced the effective tax rate for the period to
31.4%, compared to 35.3% through the first nine months. The
period also included restructuring expenses. Net earnings of $222
million were significantly below prior-year results that included
the gain from divestitures.
* U.S. Retail Segment Results
Net sales for General Mills' domestic retail operations grew 3% in
2006 to exceed $8.0 billion, with unit volume up 2% for the year.
Segment operating profits grew slightly faster than sales to reach
nearly $1.8 billion.
Net sales for the Yoplait division grew 14% to exceed $1 billion
for the first time. Meals division net sales grew 7%, led by
strong growth of Progresso ready-to-serve soups and Hamburger
Helper dinner mixes. Baking Products division net sales grew 6%
and Snacks division net sales rose 5% with strong performance from
new products such as Betty Crocker Warm Delights microwaveable
desserts, Nature Valley Sweet n' Salty nut bars and Turtle Chex
Mix. Both Big G Cereals and the Pillsbury USA division reported
net sales declines of 1%.
For the fourth quarter, U.S. Retail net sales grew 5% to nearly
$1.9 billion, unit volume rose 3%, and operating profits increased
8% to $408 million. Advertising spending for the company's U.S.
Retail businesses rose 8% in 2006, including a $28 million
increase in the final quarter of the year.
* International Segment Results
International net sales grew 6% in 2006 to exceed $1.8 billion,
with unit volume up 4%. Favorable currency exchange contributed 1
point of sales growth. Operating profits rose 18% to $201
million.
For the fourth quarter, International net sales grew 4% and unit
volume was up 1%. Operating profits were down 13% from strong
prior-year results that grew 46%.
* Bakeries & Foodservice Segment Results
Net sales for the Bakeries & Foodservice division grew 2% in 2006
to nearly $1.8 billion. Unit volume matched prior-year levels,
and operating profits increased 4% to $139 million.
Fourth quarter net sales grew 5% to $473 million and unit volume
was up 1%, but segment operating profits were down 5% due to
higher input costs.
* Joint Ventures
After-tax earnings from joint ventures totaled $64 million in
2006, below prior-year results primarily due to the absence of
Snack Ventures Europe earnings. In addition, fourth quarter
results include $8 million of expenses related to the
restructuring project under way for Cereal Partners Worldwide in
the United Kingdom. Earnings from ongoing joint venture
operations grew 5% for the year, including the restructuring
charge.
CPW unit volume grew 6% in 2006 and net sales grew 4%, restrained
by unfavorable foreign exchange. Net sales for the Haagen-Dazs
ice cream joint ventures in Asia were down 7% due to an
unseasonably cold winter and increased competitive pressure in
Japan. 8th Continent, the U.S. joint venture with DuPont, posted
14% net sales growth for its line of soy beverages.
Fourth quarter after-tax earnings from joint ventures totaled
$10 million in 2006, down from $16 million last year due to the
CPW restructuring expenses.
Restructuring and other exit costs totaled $30 million in 2006,
including $14 million in the fourth quarter. In the previous
year, the company recorded restructuring and other exit costs of
$84 million, along with $18 million for associated expenses that
were recorded as cost of sales.
Cash flow from operations totaled $1.8 billion in 2006, up 3% from
$1.7 billion in 2005. Capital expenditures in 2006 totaled $360
million, down from $434 million in 2005. Dividends paid in 2006
grew 8% to $1.34 per share. On June 26, 2006, the company
announced a 1-cent increase in the quarterly dividend rate to 35
cents per share, effective with the August 1, 2006, payment.
General Mills renewed share repurchases in 2006, buying back 19
million shares at an average price of $47.35. As a result,
average diluted shares outstanding declined from 409 million in
2005 to 379 million in 2006. The average diluted share balance in
both years includes the impact of accounting for contingently
convertible debt, as shown in note three to the consolidated
financial statements. As a result of a refinancing and related
actions taken during 2006, this accounting impact ended in
December 2005. Excluding the impact of this accounting rule in
both years, General Mills average diluted shares declined 4% in
2006 to 366 million.
Fiscal 2007 Outlook
Looking ahead to fiscal 2007, Mr. Sanger said, "We expect another
year of good operating performance, consistent with our long-term
growth goals. Our targets call for low single-digit growth in net
sales and mid single-digit growth in segment operating profits.
We anticipate this growth from our businesses will be partially
offset by higher interest expense and a higher tax rate. In
addition, beginning in the first quarter of 2007 our results will
include stock option expense."
About General Mills
General Mills, Inc. (NYSE:GIS) -- http://www.generalmills.com--is
a cereal maker. Among its Big G Cereals unit's brands are
Cheerios, Chex, Total, Kix, and Wheaties. It also makes flour
(Gold Medal), baking mixes (Betty Crocker, Bisquick), dinner mixes
(Hamburger Helper), fruit snacks (Fruit Roll-Ups) and grain snacks
(Chex Mix, Pop Secret). It is also makes branded yogurt (Colombo,
Go-Gurt, and Yoplait). Through joint ventures, the Company has
expanded its cereals and snacks into Europe. Its 2001 acquisition
of Pillsbury (refrigerated dough products, frozen vegetables) from
Diageo doubled the its size.
* * *
As reported in the Troubled Company Reporter on May 1, 2006,
Moody's Investors Service placed under review for possible upgrade
the long-term debt ratings of General Mills, Inc. and affirmed its
Prime-2 short-term debt ratings. The review included Moody's
(P)Ba1 rating on the Company's Preferred shelf.
GENERAL MOTORS: Fitch Says Potential Alliance Won't Affect Rating
-----------------------------------------------------------------
The potential alliance between General Motors Corp., Renault and
Nissan, as currently proposed, would not have implications for the
credit rating of GM, according to Fitch Ratings. Although certain
benefits could be realized from such an alliance over the long
term, the ratings for GM (IDR rated 'B' and on Rating Watch
Negative by Fitch) in the near term will be driven primarily by
the turnaround efforts at its North American auto operations. The
resolution of the Delphi situation and completion of the sale of a
controlling interest in GMAC are also key factors in the current
rating.
GM's challenges in North America, on the revenue and the cost
side, remain numerous, and an alliance is unlikely to have a
significant effect on either in the short term. Over the long-
term, the alliance could result in purchasing synergies and other
engineering, design and manufacturing efficiencies.
However, these synergies typically require a timeframe of at least
four years to be realized to a meaningful degree, even if
implemented successfully, as frequently demonstrated through the
industry. GM is already undertaking such an effort on its own as
it moves to a global design process, with the ultimate benefits
yet to be determined.
At GM, Ford and DaimlerChrysler, either internally or through
alliances, moving to global platforms has proven to be a long-term
challenge, while transplant manufacturers continue to realize the
benefits of further leveraging existing platforms. Historically,
the industry's track record with regard to alliances, and GM's in
particular, has been notably poor.
With GM's purchasing, design, engineering and manufacturing
strategies still evolving, further alliances could certainly
complicate and/or cause revisions to existing efforts before
realizing any ultimate benefits. Should the alliance progress,
there could also be an adverse impact on the supply base, which is
already experiencing substantial stress.
It is also unlikely that an alliance, or a higher-profile role by
Mr. Ghosn, would have a near term effect on one of GM's primary
structural cost issues -- the lack of flexibility incorporated in
GM's existing UAW contract.
Over the long-term, any alliance strategy would certainly address
the partners' global manufacturing footprint, including capacity
issues. Given GM's high manufacturing cost base in the U.S., an
alliance could be expected to try and steer production to more
cost efficient plants and locations. This is likely to cause the
UAW to weigh in on the alliance, potentially complicating and
alliance agreement and the September 2007 contract talks where GM
will already be seeking further concessions to existing wages,
benefits and other structural terms.
Prior to any alliance agreement, Fitch expects that GM's board and
its potential alliance partners would clearly delineate areas of
cooperation and the decision-making process between the partners.
If the major reason Tracinda is encouraging an alliance is to have
Carlos Ghosn take on a primary role in GM's restructuring, this
would certainly be an area of substantive deliberation at GM's
board. At this stage of GM's restructuring efforts, Fitch expects
that this decision would not be taken lightly or quickly.
On the revenue side, GM has benefited from recent product
introductions in the higher-priced SUV segment, but remains
exposed to:
* sliding market share;
* a continuing industry decline in the mid-size and full-size
SUV market;
* price competition and concerns surrounding volumes; and
* pricing in the important heavy-duty pickup market.
On the cost side, GM has made progress in certain cost areas,
including health care and its employee buyout program, but remains
exposed to operating and financial stresses in its supply base,
high commodity costs and other fixed costs. Despite progress on
the cost side, other cost and revenue pressures make it unlikely
that GM will reverse negative operating cash flows in 2006.
GENEVA STEEL: Chapter 11 Trustee Hires Ian Altman as Actuary
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Utah authorized
James T. Markus, the chapter 11 Trustee of Geneva Steel LLC, to
employ Ian H. Altman and his firm, Altman & Cronin Benefit
Consultants, LLC, as his actuary.
The Trustee wants Mr. Altman to evaluate claims asserted by the
Pension Benefit Guaranty Corporation against the estate.
Specifically, Mr. Altman will:
a) prepare on behalf of the Trustee any necessary reports and
papers as dictated by the outstanding unliquidated claims
filed by the PBGC, or as required by the Court, and to
represent the Trustee in related proceedings or hearings;
b) assist the Trustee in analyzing the PBGC work papers and
proofs of claim;
c) review, analyze and advise the Trustee regarding the
actuarial defenses to the PBGC claims;
d) assist the Trustee in negotiation with the PBGC regarding
any possible consensual resolution and payment of the PBGC
claims;
e) review and analyze the validity of the PBGC claims filed and
advised the Trustee as to the filing of objections to any
claims, if necessary;
f) assist the Trustee in determining appropriate discount rates
and net present values for any claims that relate to amounts
accruing in the future or over time; and
g) perform all other necessary actuarial and expert services as
may be prompted by the needs of the Trustee.
Mr. Altman will bill the Debtor $440 per hour for his work.
Mr. Altman assured the Court that he is a "disinterested person"
as that term is used in Sec. 101(14) of the Bankruptcy Code and
does not represent or hold an interest adverse to the Debtor's
estates or the Trustee.
Headquartered in Provo, Utah, Geneva Steel LLC owns and operates
an integrated steel mill. The Company filed for chapter 11
protection on January 25, 2002 (Bankr. Utah Case No. 02-21455).
Andrew A. Kress, Esq., Keith R. Murphy, Esq., and Stephen E.
Garcia, Esq., at Kaye Scholer LLP, represent the Debtor in its
chapter 11 proceeding. James T. Markus was appointed as the
chapter 11 Trustee for the Debtor's estate on June 22, 2005.
John F. Young, Esq., at Block Markus & Williams, LLC represents
the chapter 11 Trustee. Dianna M. Gibson, Esq., and J. Thomas
Beckett, Esq., at Parsons Behle & Latimer, represent the Official
Committee of Unsecured Creditors. When the Company filed for
protection from its creditors, it listed $262 million in total
assets and $192 million in total debts.
GENEVA STEEL: Plan Confirmation Hearing Set for August 17
---------------------------------------------------------
The Honorable Glen E. Clark of the U.S. Bankruptcy Court for the
District of Utah, Central Division, determined that the Disclosure
Statement explaining Geneva Steel LLC's Second Amended Joint
Chapter 11 Liquidating Plan contained adequate information -- the
right amount of the right kind -- required under Section 1125 of
the Bankruptcy Code. With a Court-approved Disclosure Statement
in hand, the Debtor can now ask its creditors to vote to accept
its liquidating plan.
The Court will consider confirmation of the Debtor's plan at 10:00
a.m., prevailing Mountain Time, on Aug. 17, 2006, at Room 369,
Third Floor of the Frank E. Moss United States Courthouse, 350
South Main Street in Salt Lake City, Utah.
Ballots accepting or rejecting plan must be delivered no later
than 5:00 p.m., prevailing Mountain Time, on July 20, 2006, to
Chapter 11 Trustee James T. Markus' counsel:
John F. Young, Esq.
Block Markus & Williams LLC
1700 Lincoln Street, Suite 4000
Denver, Colorado 80203
Objections to confirmation of the Debtor's Plan must also be filed
with the Clerk of the Bankruptcy by July 20. Copies of the
objection must be served to the counsel for the chapter 11
Trustee, the U.S. Trustee for Region 19 and:
Counsel for the Unsecured Creditors Committee:
Dianna M. Gibson, Esq.
Parsons Behle & Latimer
201 South Main Street Suite 1800
P.O. Box 45898
Salt Lake City, Utah 84145-0898
Phone: (801)532-1234
Fax: (801)536-6111
Plan Overview
Mr. Markus' plan calls for the assignment of all of the Debtor's
assets, including claims and causes of action, to Liquidating
Trusts. The Liquidating Trusts will make all the distributions
required under the Plan. Mr. Markus reports that substantially
all of the Debtor's assets have been reduced to cash.
Administrative claims and secured claims will be paid in full.
Holders of General Unsecured Claims are expected to receive
approximately 15% of the allowed amount of their claims.
Additional funds may be paid to general unsecured creditors as a
result of recoveries from avoidance actions and other litigation
initiated by the Trustee. The Trustee anticipates that as a
result of litigation recoveries, allowed unsecured claim holders
may recover, over time, an aggregate of 15% to 40% of their
claims. Unsecured creditors making convenience class elections
will get a one-time distribution equal to 25% of their clams, up
to $1,250.
A copy of the Debtor's Disclosure Statement is available for a fee
at http://www.researcharchives.com/bin/download?id=060710210312
Headquartered in Provo, Utah, Geneva Steel LLC owns and operates
an integrated steel mill. The Company filed for chapter 11
protection on January 25, 2002 (Bankr. Utah Case No. 02-21455).
Andrew A. Kress, Esq., Keith R. Murphy, Esq., and Stephen E.
Garcia, Esq., at Kaye Scholer LLP, represent the Debtor in its
chapter 11 proceeding. James T. Markus was appointed as the
chapter 11 Trustee for the Debtor's estate on June 22, 2005.
John F. Young, Esq., at Block Markus & Williams, LLC represents
the chapter 11 Trustee. Dianna M. Gibson, Esq., and J. Thomas
Beckett, Esq., at Parsons Behle & Latimer, represent the Official
Committee of Unsecured Creditors. When the Company filed for
protection from its creditors, it listed $262 million in total
assets and $192 million in total debts.
GLOBAL HOME: Sells WearEver Cookware Business to Lifetime Brands
----------------------------------------------------------------
Lifetime Brands, Inc., signed an agreement to acquire certain
assets comprising the WearEver cookware and bakeware businesses of
Global Home Products LLC.
"This agreement provides an opportunity for Lifetime Brands
significantly to expand its cookware business and to augment its
bakeware business," said Jeffrey Siegel, Chairman, President and
Chief Executive Officer of Lifetime Brands. "The combination of
WearEver's established and respected brands and Lifetime's
superior design capabilities, sourcing expertise and complementary
customer base will create an excellent platform for growth. In
addition, Lifetime's strong financial position will enable us to
improve WearEver's operations, product deliveries and vendor
relationships."
Global and certain of its affiliates, including certain of the
companies that make up the WearEver business, filed for bankruptcy
protection in April 2006. The agreement provides that Lifetime
will purchase the assets pursuant to Section 363 of the United
States Bankruptcy Code. The transaction is subject to a number of
conditions, including completion of an auction process and
bankruptcy court approval.
About Lifetime Brands
Headquartered in Westbury, New York, Lifetime Brands, Inc.
(Nasdaq: LCUT) designs, markets and distributes kitchenware,
cutlery & cutting boards, bakeware & cookware, pantryware &
spices, tabletop, home decor, picture frames and bath accessories,
marketing its products under various trade names, including
Farberware(R), KitchenAid(R), Pfaltzgraff(R), Calvin Klein(R),
Cuisinart(R), Hoffritz(R), Sabatier(R), Nautica(R), Joseph Abboud
Environments(R), Roshco(R), Baker's Advantage(R), Kamenstein(R),
CasaModa(TM), :USE(R), Pedrini(R), International Silver(R),
Towle(R), Tuttle(R), Wallace(R), Melannco(R), Rochard(R) and
Kenneth Cole Reaction(R).
About Global Home
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 $50 million and
$100 million and estimated debts of more than $100 million.
GSAMP TRUST: S&P Puts Class B-2 Certificate's Rating on Default
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of mortgage pass-through certificates from GSAMP Trust
2004-SEA2. Concurrently, one of the lowered ratings is placed
on CreditWatch with negative implications, and the rating on
class B-2 is removed from CreditWatch because it is being lowered
to 'D'.
Furthermore, the rating on class B-1 remains on CreditWatch
negative, where it was placed May 17, 2006.
The lowered ratings and CreditWatch placements are the result of
excessive realized losses that have completely depleted
overcollateralization. During the previous six remittance
periods, realized losses have outpaced excess interest by
approximately 1.75x. The failure of excess interest to cover
monthly losses resulted in a principal write-down of $1.160
million to the B-2 certificate.
As of the June 2006 distribution date, severely delinquent loans
(90-plus-day, foreclosure, and REO) represented 17.28% of the
current pool balance. Cumulative realized losses represented
2.69% of the original pool balance.
Standard & Poor's will continue to monitor the performance of this
transaction. If delinquencies continue to translate into realized
losses and principal write-downs continue to occur, the rating
agency will take further negative rating actions.
Conversely, if realized losses no longer outpace monthly excess
interest and the level of overcollateralization rebuilds toward
its target balance, the ratings on classes B-1 and M-5 will be
affirmed and removed from CreditWatch.
Credit support for this transaction is provided through a
combination of excess spread, overcollateralization, and
subordination. The underlying collateral consists of subprime,
conventional, one- to four-family, fixed-rate mortgage loans
secured by first- and second-lien on one- to four-family
residential properties.
Rating Lowered and Off Creditwatch Negative:
GSAMP Trust 2004-SEA2
Mortgage pass-through certificate
Class To From
----- -- ----
B-2 D B/Watch Neg.
Rating Lowered and Placed on Creditwatch Negative
GSAMP Trust 2004-SEA2
Mortgage pass-through certificate
Class To From
----- -- ----
M-5 BBB/Watch Neg. A-
Rating Lowered and Remains on Creditwatch Negative
GSAMP Trust 2004-SEA2
Mortgage pass-through certificate
Class To From
----- -- ----
B-1 B/Watch Neg. BB+/Watch Neg.
Other Outstanding Ratings:
GSAMP Trust 2004-SEA2
Mortgage pass-through certificates
Class Rating
----- ------
A-1, A-2A, A-2B, M-1 AAA
M-2 AA+
M-3 AA
M-4 A
HOLLINGER INC: Seeks to Recover $500MM in Damages from Ravelston
----------------------------------------------------------------
Hollinger Inc. and its related companies, are in the process of
serving a Statement of Claim on The Ravelston Corporation Limited
and a number of related parties including Conrad Black, Barbara
Amiel-Black, David Radler, John Boultbee and Peter Atkinson.
Hollinger is asking the Ontario Superior Court of Justice
(Commercial List) for 17 distinct forms of relief, including:
* $500 million in damages for breach of contract, conspiracy,
negligence, breach of fiduciary duty, unjust enrichment and
unlawful interference with the Hollinger Group's economic
interest;
* additional damages totalling approximately $200 million;
* contribution and indemnity with respect to any judgment or
order obtained against the Hollinger Group from certain legal
proceedings;
* relief under the Canada Business Corporations Act, an order
for compensation for oppressive conduct, and;
* a minimum of $5 million in punitive or exemplary damages.
Ravelston is the private company that, with its affiliates, owns a
majority of the shares of Hollinger and, through it, majority-
voting interest in Hollinger International Inc. Ravelston is
currently in receivership under Ontario court protection and was
previously controlled by Conrad Black and his associates.
"We believe that Hollinger was the initial victim of a planned
series of transactions, including the sale of its primary
operating assets at below fair value. This campaign started in
the 1990s and laid the groundwork for better-known events that
continued up to 2003," said Randall Benson, Chief Restructuring
Officer of Hollinger Inc. "On behalf of the public minority
shareholders of Hollinger, we intend to vigorously pursue
restitution."
Battle Between the Hollingers
Hollinger also filed a counterclaim against Hollinger
International Inc. asking the U.S. District Court for Northern
District of Illinois, Eastern Division, for compensatory and
punitive damages in an amount to be determined at trial.
About Hollinger Inc.
Headquartered in Toronto, Ontario, Hollinger Inc.'s
(TSX:HLG.C)(TSX:HLG.PR.B) -- http://www.hollingerinc.com/--
principal asset is its 66.8% voting and 17.4% equity interest in
Hollinger International, a newspaper publisher with assets, which
include the Chicago Sun-Times and a large number of community
newspapers in the Chicago area. Hollinger also owns a portfolio
of commercial real estate in Canada.
Delinquent Financial Statements
Hollinger Inc. has been unable to file its annual financial
statements, Management's Discussion & Analysis and Annual
Information Form for the years ended Dec. 31, 2003, 2004 and 2005
on a timely basis as required by Canadian securities legislation.
In addition, Hollinger has not filed its interim financial
statements for the fiscal quarters ended March 31, June 30 and
September 30 in each of its 2004 and 2005 fiscal years.
The Company says that its Audit Committee is working with the
auditors, and discussing with regulators, various alternatives to
return its financial reporting requirements to current status.
Ravelston Receivership and CCAA Proceedings
On April 20, 2005, the Court issued two orders by which The
Ravelston Corporation Limited and Ravelston Management Inc. were:
(i) placed in receivership pursuant to the Bankruptcy &
Insolvency Act (Canada) and the Courts of Justice Act
(Ontario); and
(ii) granted protection pursuant to the Companies' Creditors
Arrangement Act (Canada).
Pursuant thereto, RSM Richter Inc. was appointed receiver and
manager of all of the property, assets and undertakings of
Ravelston and RMI. Ravelston holds 16.5% of the outstanding
Retractable Common Shares of Hollinger. On May 18, 2005, the
Court further ordered that the Receivership Order and the CCAA
Order be extended to include Argus Corporation Limited and its
five subsidiary companies, which collectively own, directly or
indirectly, 61.8% of the outstanding Retractable Common Shares and
4% of the Series II Preference Shares of Hollinger. On June 12,
2006, the Court appointed Richter as receiver and manager and
interim receiver of all the property, assets and undertaking of
Argent News Inc., a wholly owned subsidiary of Ravelston. The
Ravelston Entities own, in aggregate, 78% of the outstanding
Retractable Common Shares and 4% of the Series II Preference
Shares of Hollinger. The Court has extended the stay of
proceedings against the Ravelston Entities to Sept. 29, 2006.
As reported in the Troubled Company Reporter on Apr. 25, 2005,
Hollinger is in default under the terms of the indentures
governing Hollinger's $78 million principal amount of 11.875%
Senior Secured Notes due 2011 and $15 million 11.875% Second
Priority Secured Notes due 2011 due to Ontario Superior Court of
Justice's appointment of RSM Richter as receiver of all of the
Ravelston Entities' assets (except for certain shares held
directly or indirectly by them, including shares of Hollinger Inc.
and RMI).
Litigation Risks
Hollinger, Inc., faces various court cases and investigations:
(1) a consolidated class action complaint filed in Chicago,
Illinois;
(2) a class action lawsuit that was filed in the Saskatchewan
Court of Queen's Bench on Sept. 7, 2004;
(3) a $425,000,000 fraud and damage suit filed in the State
of Illinois by International;
(4) a lawsuit seeking enforcement of a Nov. 15, 2003,
restructuring proposal to uphold a Shareholders' Rights
Plan, a declaration that corporate by-laws were invalid and
to prevent the closing of a certain transaction;
(5) a lawsuit filed by International seeking injunctive relief
for the return of documents of which it claims ownership;
(6) a $5,000,000 damage action commenced by a lessor of an
aircraft lease, in which Hollinger was the guarantor;
(7) an action commenced by the United States Securities and
Exchange Commission on Nov. 15, 2004, seeking
injunctive, monetary and other equitable relief; and
(8) investigation by the enforcement division of the OSC.
INSIGNIA SOLUTIONS: Burr Pilger Raises Going Concern Doubt
----------------------------------------------------------
Burr, Pilger & Mayer LLP in Palo Alto, Calif., raised substantial
doubt about Insignia Solutions plc'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 operating losses,
stockholders' deficiency and accumulated deficit.
Insignia Solutions reported a $9,081,000 net loss on $3,178,000 of
total net revenues for the year ended Dec. 31, 2005, compared to a
net loss of $7,062,000 on $541,000 of total net revenues for the
same period in 2004.
As of Dec. 31, 2005, the Company's balance sheet showed $6,117,000
in total assets and $7,323,000 in total current liabilities,
resulting in a $1,206,000 stockholders' deficit.
A full-text copy of the Company's annual report is available for
free at http://ResearchArchives.com/t/s?d71
Headquartered in Fremont, California, Insignia Solutions PLC --
http://www.insignia.com/-- enables mobile operators and terminal
manufacturers to manage a growing, complex and diverse community
of mobile devices. Insignia Device Management Suite is a complete
standard-based mobile device management offering, which includes
client provisioning technologies supported by most of the mobile
devices in the past, OMA-DM based technology used by current
mobile devices and future OMA-DM based technologies.
INTEGRATED HEALTH: Wants Until Nov. 3 to Remove Civil Actions
-------------------------------------------------------------
IHS Liquidating LLC asks the U.S. Bankruptcy Court for the
District of Delaware to further extend the period within which it
may file notices of removal with respect to civil actions pending
on the Petition Date, through and including November 3, 2006.
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, relates that IHS Liquidating is still
investigating disputed claims that are the subject of pending
prepetition actions.
Mr. Brady notes that majority of the prepetition actions have been
resolved through the claims reconciliation process. IHS
Liquidating recently spent considerable time and resources to
solve significant disputes with Baltimore County, Maryland, and
the United States Trustee's Office. As a result, IHS Liquidating
believes that the Chapter 11 cases may be nearing closure.
However, removal may be necessary with respect to certain
unresolved prepetition actions, Mr. Brady tells the Court. IHS
Liquidating believes it is prudent to preserve the estates' right
to seek removal until the trustee has completed its analysis of
the prepetition actions.
The extension will provide IHS Liquidating an opportunity to make
more fully informed decisions concerning the removal of each
prepetition action and will assure that it does not forfeit its
valuable rights under Section 1452 of the Judicial Procedures
Code, Mr. Brady asserts.
Judge Walrath will hold a hearing to consider IHS Liquidating's
request on July 24, 2006, at 2:00 p.m. IHS Liquidating's removal
period is automatically extended through the conclusion of that
hearing by application of Del.Bankr.LR 9006-2.
Integrated Health Services, Inc. -- http://www.ihs-inc.com/--
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states. The Company and its
437 debtor-affiliates filed for chapter 11 protection on
February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002. Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors. On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts. (Integrated Health Bankruptcy News, Issue
No. 106; Bankruptcy Creditors' Service, Inc., 215/945-7000)
KAISER ALUMINUM: Removal Deadline Expires on August 5
-----------------------------------------------------
As reported in the Troubled Company Reporter on Nov. 1, 2005,
Judge Judith K. Fitzgerald extended Kaiser Aluminum Corporation
and its debtor-affiliates' Removal Deadline to the later of 30
days:
-- after the effective date of the Plan of Reorganization;
and
-- after the entry of an order terminating the automatic stay
with respect to a particular action sought to be removed.
The Debtors' Second Amended Joint Plan of Reorganization became
effective July 6, 2006. Accordingly, the Debtors' removal
deadline expires on August 5, 2006.
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on Feb.
12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a
number of its commodity businesses during course of its cases.
Corinne Ball, Esq., at Jones Day, represents the Debtors in their
restructuring efforts. Lazard Freres & Co. serves as the Debtors'
financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III,
Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes
represent the Debtors' Official Committee of Unsecured Creditors.
The Debtors' Chapter 11 Plan became effective on July 6, 2006. On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 100;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
KAISER ALUMINUM: Inks $250 Million JPMorgan-Arranged Loan
---------------------------------------------------------
Kaiser Aluminum Corp., Kaiser Aluminum Investments Company,
Kaiser Aluminum Fabricated Products, LLC, and Kaiser Aluminium
International, Inc., entered into a new Senior Secured Revolving
Credit Agreement with JPMorgan Chase Bank, N.A., as administrative
agent and lender, and other financial institutions on July 6,
2006.
The Reorganized Debtors also entered into a Term Loan and
Guaranty Agreement with JPMorgan, as administrative agent and
lender, Wilmington Trust Company, as collateral agent, and other
financial institutions.
The Revolving Credit Agreement provides for $200,000,000 in
revolving loans, swingline loans and protective advances,
including up to $60,000,000 in letters of credit.
The Term Loan Facility provides for a $50,000,000 delayed draw
term loan to Kaiser Aluminum Fabricated Products, LLC, as
borrower, which may be drawn in a single borrowing within the
first 30 days after the Effective Date.
Amounts owed under both credit facilities may be accelerated upon
the occurrence of various events of default set forth in each
agreement.
Both credit facilities place restrictions on the ability of the
company and certain of its subsidiaries to, among other things,
incur debt, create liens, make investments, pay dividends, sell
assets, undertake transactions with affiliates and enter into
unrelated lines of business.
Pursuant to KAC and its affiliates' Second Amended Joint Plan of
Reorganization, the Secured Super-Priority DIP Revolving Credit
and Guaranty Agreement was terminated on July 6, 2006.
Revolving Credit Facility
Under the Revolving Credit Facility, KAC is able to borrow from
time to time in an aggregate amount equal to the lesser of
$200,000,000 and a borrowing base comprised of eligible accounts
receivable, eligible inventory and certain eligible machinery,
equipment and real estate, reduced by certain reserves.
Lenders under the Revolver are:
Lender Commitment
------ ----------
JPMorgan Chase Bank, N.A. $35,000,000
The CIT Group/Business Credit, Inc. 35,000,000
Bank of America 30,000,000
Wachovia Bank 25,000,000
Wells Fargo Foothill 20,000,000
GMAC 20,000,000
Merrill Lynch Capital Corporation 20,000,000
UBS 15,000,000
KAC may request the issuance of letters of credit on account of a
Borrower from JPMorgan, as issuing bank.
The Revolving Credit Facility has a five-year term and matures on
July 6, 2011, at which time all principal amounts outstanding will
be due and payable.
Borrowings under the Revolving Credit Facility bear interest at a
rate equal to either a base rate or LIBOR, at the company's
option, plus a specified variable percentage determined by
reference to the then remaining borrowing availability under the
Revolving Credit Facility.
Subject to certain conditions and the agreement of Lenders, the
Revolving Credit Facility may be increased to up to $275,000,000
at the request of the company.
The Revolving Credit Facility is secured by a first priority lien
on substantially all of the assets of the KAC and certain of its
domestic operating subsidiaries that are also borrowers in the
Revolving Credit Agreement.
J.P. Morgan Securities, Inc., serves as sole bookrunner and co-
lead arranger in the Revolving Credit Agreement together with The
CIT Group/Business Credit, Inc. as co-lead arranger and co-
syndication agent, Bank of America as co-syndication agent, and
Wachovia Bank and Wells Fargo Foothill served as co-documentation
agents.
A full-text copy of the Senior Secured Revolving Credit Agreement
is available for free at http://researcharchives.com/t/s?d6e
Term Loan Facility
The Term Loan Facility matures on July 6, 2011, at which time all
principal amounts outstanding under the Facility will be due and
payable.
Borrowings under the Term Loan Facility bear interest at a rate
equal to either a base rate plus 2.50% or LIBOR plus 4.25%, at the
company's option.
The Term Loan Facility is secured by a second lien on
substantially all of the assets of KAFP, the company and its other
domestic operating subsidiaries that are guarantors.
J.P. Morgan Securities Inc. serves as lead arranger, sole
bookrunner and syndication agent, and The CIT Group/Business
Credit, Inc., served as co-arranger in the Term Loan and Guaranty
Agreement.
A full-text copy of the Term Loan and Guaranty Agreement is
available for free at http://researcharchives.com/t/s?d6f
About Kaiser Aluminum
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on Feb.
12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a
number of its commodity businesses during course of its cases.
Corinne Ball, Esq., at Jones Day, represents the Debtors in their
restructuring efforts. Lazard Freres & Co. serves as the Debtors'
financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III,
Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes
represent the Debtors' Official Committee of Unsecured Creditors.
The Debtors' Chapter 11 Plan became effective on July 6, 2006. On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 100;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
LAIDLAW INT'L: Moody's Rates New Senior Secured Term Loan at Ba2
----------------------------------------------------------------
Moody's Investors Service affirms ratings of Laidlaw International
Inc., -- Corporate Family at Ba2 -- following the company's
announcement of a $500 million debt-financed share repurchase
program. In a related action, Moody's assigned a Ba2 rating to a
new senior secured term loan. The rating outlook is stable.
The ratings reflect the relatively predictable level of operating
cash flow as a result of Laidlaw's market leading position in
school bus operations, and expectations of modestly improving
profit margins over time in both the school bus and Greyhound
segments. Laidlaw's record of steady reduction in leverage and
management's recent statement that EBITDA of approximately
1.7 times is an "appropriate" level of leverage for Laidlaw also
support the ratings.
Moody's notes that this equates to EBITDA of approximately
2.8 times at May 31, 2006 using Moody's standard adjustments and
pro-forma for debt to fund the share repurchases. While this
ratio is somewhat lower than other issuers at the Ba2 rating
level, Laidlaw's ratings are constrained by the relatively low
EBIT margin and growth potential of both the outsourced school bus
and Greyhound markets, and the uncertainty of whether the notable
operating improvement at Greyhound can be sustained. As well,
capital investment is expected to remain substantial, and Moody's
anticipates that Laidlaw will likely apply free cash flow to
future additional share repurchases consistent with its leverage
policy.
The stable outlook reflects the predictability of cash flow from
the contract-based school bus segment, and the expectation of
solid free cash flow generation over the intermediate term. The
ratings may be pressured down if competitive pressure produces
lower a market share or operating margin, a debt-financed
acquisition or stepped-up share purchases results in a sustainable
level of debt to EBITDA above 4 times, or unexpected capital
expenditures or pension plan contributions results in sustained
negative free cash flow. The ratings could be raised following
higher EBIT margins coinciding with growth in the company's
revenue base, demonstrated sustainability of Greyhound's recent
performance and capital investment consistent with a stronger EBIT
margin.
The new term loan will fund Laidlaw's share repurchases. The Ba2
rating on the bank loans are the same as the Corporate Family
rating since these facilities will account for substantially all
of Laidlaw's debt capital. With the new term loan, each of the
facilities will be secured by the stock of Laidlaw's subsidiaries,
although the security could be released under certain conditions.
All subsidiaries of Laidlaw will guarantee the facilities, subject
to customary exceptions.
Assignments:
Issuer: Laidlaw International Inc.
* Senior Secured Bank Credit Facility, Assigned Ba2
Laidlaw International, Inc., headquartered in Naperville, Ill, is
the leading provider of outsourced school bus services in the US
and Canada; and the 100% owner of Greyhound Inc., North America's
largest provider of inter-city passenger bus services. Laidlaw
also provides para-transit services to many U.S. municipalities
through its public transit segment.
LA PETITE: S&P Places Junk Corporate Credit Rating on Watch
-----------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on
Chicago, Illinois-based La Petite Academy Inc., including the
'CCC' corporate credit rating, on CreditWatch with positive
implications (indicating that the ratings could be raised or
affirmed upon further review).
"The CreditWatch placement follows La Petite's announcement of its
intention to explore alternatives to refinance its senior credit
facility and 10% senior notes due in 2008," said Standard & Poor's
credit analyst Jesse Juliano.
The ratings on La Petite were lowered to 'CCC' in June 2002; since
then, management has improved its operations. However, Standard &
Poor's remains concerned about the company's upcoming debt
maturity of $191 million in 2008.
The refinancing of La Petite's long-term debt, if completed, would
address Standard & Poor's concerns with the cost and availability
of funds to cope with the formidable debt maturity. The ratings
could be raised upon completion of the transaction.
LEVITZ HOME: Landlords Want Summary Judgment on Seaman Leases
-------------------------------------------------------------
MS Elmhurst, LLC, CS Elmhurst, LLC, MS Paramus, LLC, CLS
Diversified, LLC, Sea Plan, LLC and J.J.J.D. Associates,
L.L.C. -- the Landlords -- and Leasehold Agency Associates, Inc.,
as agent for the Landlords, inform the U.S. Bankruptcy Court for
the Southern District of New York that they intend to file a
request for partial summary judgment with respect to a portion of
Levitz Home Furnishings, Inc., and its debtor-affiliates' joint
request authorizing the Debtors' assumption and assignment of the
Seaman Leases.
Seaman Leases
Prior to its bankruptcy filing, Seaman Furniture Company, Inc.,
was a tenant on Leases with various landlords affiliated with the
Seaman family, including the leases for these six locations:
(i) Elmhurst, New York;
(ii) Jamaica, New York;
(iii) Paramus, New Jersey;
(iv) Eatontown, New Jersey;
(v) Smithtown, New York; and
(vi) Farmingdale, New York.
Seaman Furniture entered into a Joint Agreement with the
Landlords, pursuant to which Seaman Furniture was required to
provide the agent for the Seaman Landlords with a Letter of Credit
as security for the payment of rent and other amounts due under
the Leases.
As of the Petition Date, the Landlords held a $2,050,000 letter of
credit as a security deposit to cover the four remaining Seaman
Leases -- the Smithtown, the Paramus, the Elmhurst and the
Farmingdale Leases.
On April 28, 2006, PLVTZ, LLC, provided the Debtors with:
* a Lease Assumption Notice relating to the Elmhurst, the
Paramus and the Farmingdale Leases; and
* a notice advising the Debtors that they would not seek to
have the Joint Agreement assumed and assigned to PLVTZ or a
third party.
The Debtors and PLVTZ maintain that the Joint Agreement, the
Remaining Seaman Leases and the Smithtown Lease are separate,
distinct agreements.
Accordingly, the Debtors and PLVTZ asked the Court to:
(a) authorize the Debtors' assumption and assignment of the
Remaining Seaman Leases to PLVTZ and the rejection of the
Joint Agreement;
(b) fix the cure amounts on the Remaining Seaman Leases, with
the Cure Amounts to be satisfied from the Letter of
Credit, or cash presently held by the Landlords or their
agent as a result of a draw on the Letter of Credit:
Asserted
Store# Address Cure Amount
------ ------- -----------
10104 Farmingdale, New York $118,095
10503 Paramus, New Jersey $61,482
10901 Flushing, New York $108,552
The Landlords for these three Leases are:
-- Constantino Noval Nevada LLC;
-- Carl & Associates; and
-- CS Elmhurst LLC-MS Elmhurst LLC, c/o Seaman Partners.
(c) fix the rejection damage claims with respect to the Joint
Agreement, if any, and the Smithtown Lease; and
(d) direct the Landlords and the Agent to deduct the Cure
Amounts and any rejection damage claims from the Letter of
Credit Proceeds and to remit any remaining Letter of
Credit Proceeds to PLVTZ, as an acquired asset under the
Asset Purchase Agreement.
The Debtors believe that the rejection damage claim with respect
to the Smithtown Lease should be fixed and allowed for $739,689,
which amount is the equivalent of the cap set forth in Section
502(b)(6) of the Bankruptcy Code, and likewise includes rejection
damages, if any, in connection with the rejection of the Joint
Agreement. The Debtors believe that the Landlords or the Agent
is presently holding the remaining balance of the Letter of
Credit Proceeds, approximately $1,200,000.
Landlords' Arguments
Remy J. Ferrario, Esq., at Golub & Golub, LLP, in New York,
relates that, pursuant to Rule 7056-1(a) of the Local Rules for
the U.S. Bankruptcy Court for the Southern District of New York,
the Partial Summary Judgment Motion to be filed by the Landlords
and the Agent will ask the Court to deny that portion of the Joint
Request seeking:
(a) to reject the Joint Agreement with Seaman Furniture
Company, Inc.;
(b) authority and a direction from the Court to utilize the
L/C Proceeds in possession of the Seaman Landlords or the
Agent to pay any cure amounts, the unpaid postpetition
rent and additional rent for $41,170, and rejection damage
claims; and
(c) a direction from the Court to the Seaman Landlords and the
Agent requiring the Seaman Landlords and the Agent to draw
on the Seaman L/C, to the extent not previously drawn, for
the purpose of using the drawn L/C Proceeds to pay cure
amounts, the $41,170 Claim, and any rejection damage claim
caused by the rejection of the Smithtown Lease and the
Joint Agreement, and to remit any L/C Proceeds balance to
PLVTZ.
Moreover, the Landlords and the Agent will ask the Court to
declare that a "Reimbursement Condition" must be cured as a
condition to any assumption of the Remaining Seaman Leases.
Under the Reimbursement Condition, Mr. Ferrario explains, the
Seaman Leases are not capable of assumption in the absence of
cure of all defaults, including any failure of the Debtors to
either replace the Letter of Credit or cause the amount of the
Letter of Credit to be increased by the amount of the Smithtown
Lease Rejection Claim of $879,522, or any adjusted amount of the
Smithtown Lease Rejection Claim as may be required, back to the
LC Amount.
Among other things, the Landlords and the Agent assert that:
* the Joint Agreement is not an executory contract and is not
subject to rejection. The Joint Agreement is a contract to
extend a financial accommodation and is not capable of
assumption or rejection;
* "cure" is an obligation of the Debtors or Purchasers and
cannot be deducted from the Seaman L/C security deposit,
which is not property of the estate; and
* the Court cannot grant the request sought by the Debtors and
PLVTZ regarding L/C Proceeds or directing a draw on the
Seaman L/C because letters of credit and proceeds from
letters of credit are not property of the Debtors'
bankruptcy estate.
The Landlords and the Agent reserve their rights to exercise all
rights and remedies under the Joint Agreement, the Remaining
Seaman Leases, and the Bankruptcy Code, and to assert additional
grounds for the granting of Partial Summary Judgment.
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LEVITZ HOME: Kathy Guinnessey Named as Levitz Furniture CFO
-----------------------------------------------------------
Levitz Furniture has appointed Kathy Guinnessey to the position of
Chief Financial Officer.
Ms. Guinnessey has nearly 25 years of experience ranging from
financial planning and analysis to capital structure and debt
issuance. Guinnessey will oversee finance, accounting, financial
planning & analysis internal audit, payroll, treasury and loss
prevention, and will report directly to Tom Baumlin, CEO of Levitz
Furniture.
"We are delighted that Kathy has chosen to join our team at
Levitz," said Mr. Baumlin. "Kathy's reputation and credibility in
the financial community and expertise in the retail industry
strengthens our management team as we continue to make significant
progress revitalizing the Levitz brand."
Having most recently served as leader of tax, treasury and
investor relations at Dun & Bradstreet, Guinnessey's retailing
roots include significant financial roles at both Footstar, Inc.,
and Lechter's. She began her career with Manufacturer's Hanover
Trust and subsequently moved to Marsh & McClennan. Ms. Guinnessey
was recruited to the Maxwell MacMillan Group and later to GAF
Corporation where she served as Vice President & Treasurer before
joining Lechter's. She holds a BA from Rutgers and an MBA in
Finance from Fordham.
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LONDON FOG: Wants Plan-Filing Period Stretched to October 18
------------------------------------------------------------
London Fog Group, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Nevada to extend the period
within which they have the exclusive right to file a chapter 11
plan to Oct. 18, 2006. They also want the period within which
they have the exclusive right to solicit acceptances for any
chapter 11 plan, extended to Dec. 18, 2006.
Stephen R. Harris, Esq., at Belding, Harris & Petroni, tells the
Court that the Debtors' resources have been devoted primarily to
operating their businesses and to the process of marketing and
selling significant assets. In particular, the Debtors sold the
Pacific Trail and related brands to Columbia Sportswear. Even
more recently, the Debtors completed the sale and auction process
relating to the rights to act as Debtors' agent in the process of
conducting going out of business sales at the Debtors' various
factory outlet stores. In addition, the Debtors are contemplating
the sale of other significant assets, including the London Fog(R)
trademark, have retained Houlihan Lokey as investment bankers to
coordinate the sale and are actively marketing those assets.
Mr. Harris contends that the Debtors are still very much engaged
in the process of divesting themselves of other assets and
refocusing their business and restructuring strategies. Therefore,
the Debtors require additional time to formulate a plan consistent
with these developing strategies.
Mr. Harris adds that in order to prepare an accurate disclosure
statement, the Debtors must have an accurate picture of the claims
in their cases. The claims bar date is July 17, 2006.
Headquartered in Seattle, Washington, London Fog Group, Inc. --
http://londonfog.com/-- designs and retails the latest styles in
jackets and other professional apparel. The company and six of
its affiliates filed for chapter 11 protection on March 20, 2006
(Bankr. D. Nev. Case No. 06-50146). Stephen R. Harris, Esq., at
Belding, Harris & Petroni, Ltd., represents the Debtors in their
restructuring efforts. Avalon Group, Ltd., serves as the Debtors'
financial advisor. When the Debtors filed for protection from
their creditors, they estimated assets and debts between
$50 million to $100 million.
LORETTO-UTICA: No Creditors Interested to Join Official Committee
-----------------------------------------------------------------
Diana G. Adams, the acting U.S. Trustee for Region 2, informs the
U.S. Bankruptcy Court for the Northern District of New York that
despite her best efforts to contact unsecured creditors listed in
Loretto-Utica Properties Corporation's list of creditors holding
20 largest unsecured claims, sufficient indications of willingness
to serve on a committee of unsecured creditors have not been
received from persons eligible to serve.
Accordingly, the United States Trustee is unable to appoint a
committee of unsecured creditors in the Debtor's Chapter 11 case.
Headquartered in Syracuse, New York, Loretto-Utica Properties
Corporation filed for chapter 11 protection on Dec. 15, 2005
(Bankr. N.D.N.Y. Case No. 05-73473). Jeffrey A. Dove, Esq., at
Menter, Rudin & Trivelpiece, P.C., represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it estimated $1 million to $10 million in assets
and estimated $10 million to $50 million in debts.
LUCENT TECH: Expects to Close Alcatel Merger Deal by December 2006
------------------------------------------------------------------
Following the April 2 report of their proposed merger transaction,
Alcatel S.A. and Lucent Technologies provided an update on the
integration process and believe they are on track to complete
their merger transaction by the end of calendar year 2006, which
is within the 6 to 12 month timeframe originally reported. In
recent weeks, the two companies have achieved a number of
significant milestones, including satisfying some regulatory
conditions to the proposed merger.
The business model and the associated organization of the combined
company are now defined and will be implemented immediately upon
closing. More detailed evaluations of cost synergies confirm that
previously reported targets should be fully met.
"The pre-integration work has progressed very satisfactorily and
clearly confirms the high value that will be derived from this
merger for our customers and our shareholders," said Serge Tchuruk
who will become non-executive Chairman of the combined company.
"This merger will create a world-class team that will deliver the
best of both companies to customers around the world, and will
create enhanced value for shareholders" said Patricia Russo,
chairman and CEO of Lucent who will become CEO of the combined
company. "To that end, we are mapping each company's individual
strengths to the changing market dynamics reshaping our industry
and adopting best practices across the business of the combined
company. From R&D to sales, from product development to
marketing, from finance to talent development, we are committed to
being a role model company for the 21st century."
Organization and Business Structure
The combined company will address carrier, enterprise and service
markets with a strong focus on end-to-end solutions maximizing the
value to customers. The overall business will be segmented in
Business Groups structured along the global requirements of those
three markets, while a decentralized regional organization will
provide strong local support to customers.
The Carrier Business Groups, headed by Etienne Fouques will
consist of: Wireless, headed by Mary Chan, Wireline, headed by
Michel Rahier, and Convergence, headed by Marc Rouanne.
The Enterprise Business Group will be headed by Hubert de
Pesquidoux. The Service Business Group will be headed by John
Meyer.
The Company will have four geographic regions: Europe and North,
headed by Vince Molinaro, Europe and South, headed by Olivier
Picard, North America, headed by Cindy Christy, and Asia-Pacific,
headed by Frederic Rose.
The company will have a management committee, which will be headed
by Pat Russo, Chief Executive Officer. The members of this
committee will include Etienne Fouques, Senior Executive Vice
President of the Carrier Group; Frank D'Amelio, Senior Executive
Vice President Integration and Chief Administrative Officer; Jean-
Pascal Beaufret, Chief Financial Officer; Claire Pedini, Senior
Vice President, Human Resources and Communication and Mike
Quigley. Mike Quigley has decided for personal reasons to assume
a different role for the combined company. He will focus on the
strategic direction of the company and will become President,
Science Technology and Strategy. In this capacity he will devote
his attention to assuring that strategic investments align with
evolving market opportunities.
Regulatory Process
On June 7, 2006, the two companies received early termination
under the Hart-Scott-Rodino US Antitrust Improvements Act of 1976
HSR) as it pertains to the merger. On June 16, 2006, the
companies filed for European antitrust approval. Additionally,
the two companies plan to submit a voluntary notice of the merger
to the Committee on Foreign Investment in the United States in the
near future. The merger remains subject to additional customary
regulatory reviews and approvals as well as approval by
shareholders of both Alcatel and Lucent at shareholder meetings
scheduled for Sept. 7, 2006, and other customary conditions.
Cost Synergies
"We remain confident in our ability to achieve the previously
announced EUR1.4 billion ($1.7 billion) of annual pre-tax cost
synergies within three years and continue to expect about 70% of
these savings to be achieved in the first two years post closing,"
Christian Reinaudo, Alcatel integration team leader, said.
"We have collectively performed further analyses of each business
activity and have identified significant cost synergies from
several areas across the businesses, including a reduction of the
combined worldwide workforce by approximately 9,000 people," Janet
Davidson, Lucent Technologies integration team leader, added.
The combined company expects that the synergies will be realized
according to the following general breakdown: 30% from Cost of
Goods Sold and the remainder out of operating expenses.
Based on recently completed analyses, the companies now expect
approximately 55% of the synergies to be related to workforce
reductions, with the remainder derived from non-headcount cost
synergies.
Real Estate: At the closing of the merger, the combined company
will manage 4.3 million square meters of various manufacturing
sites and offices in 850 different locations. Through the
improved utilization of existing facilities as well as the
elimination of excess space the companies are targeting by the end
of year 3 EUR100 million ($122 million) of real estate cost
savings.
Supply Chain and Procurement: At closing, annual external
purchases are estimated at EUR8.7 billion ($10.6 billion).
Savings derived from component purchases, indirect spend, project
sourcing and EMS relationships should amount to at least 3% of
external purchases. This would represent EUR250 million ($305
million) by the end of year 3.
Platform Convergence: The rationalization and migration plans will
leverage the most innovative technologies and products and have
the highest potential in terms of growth and overall customer
satisfaction. Particular emphasis has been placed on the
continuous support of our customers' investments in the installed
base. Moreover, the companies will work on ensuring a gradual
migration path for customers transitioning to the combined future
portfolio to avoid disruptions during the migration process. Cost
synergies associated with this process are currently targeted at
EUR400 million ($488 million) by the end of year 3.
About Alcatel
Headquartered in Paris, France, Alcatel S.A. (Paris: CGEP.PA and
NYSE: ALA) -- http://www.alcatel.com/-- provides communications
solutions to telecommunication carriers, Internet service
providers and enterprises for delivery of voice, data and video
applications to their customers or employees. Alcatel brings its
leading position in fixed and mobile broadband networks,
applications and services, to help its partners and customers
build a user-centric broadband world. With sales of EURO 13.1
billion and 58,000 employees in 2005, Alcatel operates in more
than 130 countries.
About Lucent Technologies
Headquartered in Murray Hill, New Jersey, Lucent Technologies
(NYSE: LU) -- http://www.lucent.com/-- designs and delivers the
systems, services and software that drive next-generation
communications networks. Backed by Bell Labs research and
development, Lucent uses its strengths in mobility, optical,
software, data and voice networking technologies, as well as
services, to create new revenue-generating opportunities for its
customers, while enabling them to quickly deploy and better manage
their networks. Lucent's customer base includes communications
service providers, governments and enterprises worldwide.
* * *
As reported in the Troubled Company Reporter on April 7, 2006,
Moody's Investors Service placed Lucent Technologies, Inc.'s B1
corporate family rating, B1 senior unsecured rating, B3
subordinated rating, and B3 trust preferred rating under review
for possible upgrade following the company's announcement of a
definitive merger agreement with Alcatel.
LUCENT TECH: Sees $2 Bil. of Revenues in FY 2006 Third Quarter
--------------------------------------------------------------
Lucent Technologies expects revenues for the third quarter of
fiscal 2006, which ended June 30, 2006, to be $2.04 billion,
subject to the completion of its quarterly closing process. The
company's revenues were $2.14 billion in the second quarter of
fiscal 2006 and $2.34 billion in the year-ago quarter. The
sequential and year-over-year declines were due primarily to lower
sales to North American mobility customers. To a lesser extent,
the year-over-year decline was due to decreased revenues in China.
"During the third quarter, our North American mobility business
was adversely impacted by a slowdown in spending on some of our
current-generation wireless solutions," said Lucent Technologies
Chairman and CEO Patricia Russo. "However, we are beginning to
see some of our customers move toward the next phase of mobile
high-speed data. And in fact, we recently announced contracts
with Verizon Wireless and Telecom New Zealand for our EV-DO RevA
solution, which we expect to make commercially available in late
September.
"Overall, our year-to-date results also have been affected to some
extent by delays in spending that we believe are attributable to
the consolidation efforts of certain customers," added Ms. Russo.
"That said, we believe consolidation will lead to opportunities as
service providers look to us to help them integrate their large,
complex networks."
"We expect investment in both CDMA and UMTS to increase going
forward, driven by the introduction of EV-DO RevA and HSDPA
solutions," said Lucent Technologies Chief Operating Officer Frank
D'Amelio. "As a result, assuming that our EV-DO RevA and HSDPA
rollouts remain on track, we expect that mobility deployments in
North America will enable us to make the fourth quarter our
highest quarterly revenue period for fiscal year 2006 by a
significant margin."
The company will report its quarterly results on Wednesday,
July 26, 2006.
About Lucent Technologies
Headquartered in Murray Hill, New Jersey, Lucent Technologies
(NYSE: LU) -- http://www.lucent.com/-- designs and delivers the
systems, services and software that drive next-generation
communications networks. Backed by Bell Labs research and
development, Lucent uses its strengths in mobility, optical,
software, data and voice networking technologies, as well as
services, to create new revenue-generating opportunities for its
customers, while enabling them to quickly deploy and better manage
their networks. Lucent's customer base includes communications
service providers, governments and enterprises worldwide.
* * *
As reported in the Troubled Company Reporter on April 7, 2006,
Moody's Investors Service placed Lucent Technologies, Inc.'s B1
corporate family rating, B1 senior unsecured rating, B3
subordinated rating, and B3 trust preferred rating under review
for possible upgrade following the company's announcement of a
definitive merger agreement with Alcatel.
MAGSTAR TECH: Amended Credit Agreement Reduces Interest Rate
------------------------------------------------------------
MagStar Technologies, Inc., amended its credit agreement with U.S.
Bank, effective June 30, 2006. The amendment reduces the interest
rate that the Company is charged by 150 basis points, from Prime
Rate plus 2% to Prime Rate plus 0.5%, and increases the borrowing
base limitation of the Company's eligible accounts receivable from
80% to 85%.
Other Amendments include some restrictions on the inclusion of
inventory in the borrowing base and the reduction to 1 collateral
audit from 3 collateral audits that the Company is required to
pay.
Going Concern Doubt
As reported in the Troubled Company Reporter on April 21, 2006,
Virchow, Krause & Company, LLP, expressed substantial doubt about
MagStar Technologies, Inc.'s ability to continue as a going
concern after it audited the Company's financial statements for
the years ended Dec. 31, 2005 and 2004. The auditing firm pointed
to the Company's working capital deficiency and stockholders'
deficit.
About MagStar Technologies
Based in Hopkins, Minnesota, MagStar Technologies, Inc., --
http://www.magstar.com/-- is a prototype developer and
manufacturer of centrifuges, conveyors, medical devices, spindles,
and sub assemblies. Its technical abilities in design, process,
and manufacturing specialize in the "concept-to-production"
process designed to result in short manufacturing cycles, high
performance, and cost effective products such as electro-
mechanical assemblies and devices for over two dozen medical,
magnetic, motion control, factory and laboratory automation and
industrial original equipment manufacturers.
MAXXAM INC: CFO John Karnes Resigns from Post
---------------------------------------------
John H. Karnes, MAXXAM Inc.'s Executive Vice President and Chief
Financial Officer, resigned from the Company on July 7, 2006. Mr.
Karnes indicated that the sole reason for his resignation was in
order to return to the oil and gas industry.
The Company has named M. Emily Madison, its Vice President,
Finance, to the additional position of Acting Chief Financial
Officer.
Headquartered in Houston, Texas, MAXXAM Inc. (AMEX: MXM)
operates businesses ranging from aluminum and timber products to
real estate and horse racing. MAXXAM's top revenue source is
Kaiser Aluminum, which has been in Chapter 11 bankruptcy since
2002. MAXXAM's timber subsidiary, Pacific Lumber, owns about
205,000 acres of old-growth redwood and Douglas fir timberlands in
Humboldt County, California. MAXXAM's real estate interests
include commercial and residential properties in Arizona,
California, Texas, and Puerto Rico. The Company also owns the Sam
Houston Race Park, a horseracing track near Houston. Chairman and
CEO Charles Hurwitz controls 77% of MAXXAM.
* * *
Maxxam's balance sheet at March 31, 2006 showed a $671.3 million
total stockholders' deficit resulting from $1,013.1 million in
total assets and $1,684.4 million in total liabilities.
MCKLVEEN EXCAVATION: Case Summary & 47 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: McKlveen Excavation Company, Inc.
4828 Ridge Road
Mt. Airy, Maryland 21771
Bankruptcy Case No.: 06-13991
Type of Business: The Debtor specializes in commercial,
Residential, and industrial excavating projects.
See http://www.mcklveencentral.com/
Chapter 11 Petition Date: July 7, 2006
Court: District of Maryland (Baltimore)
Judge: James F. Schneider
Debtor's Counsel: Laura J. Margulies, Esq.
Laura Margulies & Associates, LLC
6205 Executive Boulevard
Rockville, Maryland 20852
Tel: (301) 816-1600
Fax: (301) 816-1611
Estimated Assets: Unknown
Estimated Debts: $500,000 to $1 Million
Debtor's 47 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Internal Revenue Service $200,000
31 Hopkins Plaza, Suite 1150
Baltimore, MD 21201
Alban Tractor Co., Inc. $54,780
P.O. Box 64251
Baltimore, MD 21264
Comptroller of Maryland $50,000
Revenue Administration Division
Annapolis, MD 21411
Pennsylvania Department of Revenue $50,000
Bureau of Business Trust Fund Taxes
P.O. Box 280904
Harrisburg, PA 17128-0904
CNH Capital $45,000
P.O. Box 7247-0170
Philadelphia, PA 19170-0170
Caterpillar Financial Services Corp. $42,000
Hughes Supply, Inc. $40,503
Mostoller Landfill, Inc. $38,814
Jacqulain McKlveen $31,100
M&T Credit Corporation $25,500
M&T Bank $20,000
R.I. Lampus Company $19,106
First National Insurance Funding $19,000
Bank of America, N.A. $18,500
Waterford Construction Co. $18,225
Jack Kruell $18,110
GMAC $18,000
Advanta $14,799
CNH Capital $12,500
Exxon Mobil Card Services $10,505
Lou Ann McKlveen $10,400
American Express $7,731
Poland Concrete, LLC $4,340
Babylon Vault Co., Inc. $2,827
Sprint/Nextel $2,780
Sunbelt Rentals $2,005
Highmark Blue Shield $1,700
S&T Bank $1,556
Grimes Truck Center $1,308
C. William Hetzer, Inc. $1,264
Gerguson Enterprises, Inc. $1,177
Verizon Wireless $751
Citizens Bank $711
Southern States Cumberland $682
Noland Company $531
Rapco Industries, Inc. $485
Checknet, Inc. $450
Frontier Communications Solutions $368
Federal Express $249
Adelphia Communications $215
Tractor Supply Co. $208
Sprint $179
Tribune Review $162
Allegheny Power Co. $93
Tribune Democrat $68
Lowe's $41
International Union of $1
Operating Engineers
MCSI INC: Wants Hitachi Settlement and Compromise Claim Approved
----------------------------------------------------------------
MCSi, Inc., and its debtor-affiliates ask the Honorable James F.
Schneider of the U.S. Bankruptcy Court for the District of
Maryland in Baltimore to approve a settlement and compromise claim
with Hitachi America, Ltd., and Hitachi Home Electronics
(America), Inc.
Pursuant to Sections 547 and 550 of the Bankruptcy Code, the
Debtors initiated on Feb. 19, 2004, adversary proceedings by
filing complaints to avoid and recover preferential transfers
against Hitachi America, Ltd., for $1,019,636, and Hitachi Home
Electronics (America), Inc., for $124,399.
After a detailed evaluation of the defenses asserted by Hitachi,
the parties have reached a settlement agreement.
The general terms of the settlement are:
a. HAL will pay to the Debtors the total sum of $35,000;
b. The parties will provide a general release to each other;
c. HAL will have an allowed unsecured claim in the Debtors'
cases in the amount of $1,677,409.26; and
d. Hitachi will waive any claims under section 502(h) of the
Bankruptcy Code for the settlement amount.
Headquartered in Dayton, Ohio, MCSi, Inc., was a leading provider
of state-of-the-art presentation, broadcast and supporting network
technologies for businesses, churches, government agencies and
educational institutions. The Company, along with its affiliates,
filed for chapter 11 protection on June 3, 2003, (Bankr. D.
Maryland Case No. 03-80169). On February 23, 2004, the Bankruptcy
Court allowed the Debtors to wind-down their operations and
liquidate their assets. Aryeh E. Stein, Esq., Paul Nussbaum,
Esq., Martin T. Fletcher, Esq., and Dennis J. Shaffer, Esq., at
Whiteford, Taylor & Preston LLP represent the Debtors in their
bankruptcy cases. When the Debtors filed for protection from its
creditors, they reported assets of $181,058,000 and liabilities
totaling $155,590,000.
MEDMIRA INC: April 30 Balance Sheet Upside Down by CA$6.1 Million
-----------------------------------------------------------------
MedMira Inc., incurred a CA$2.2 million net loss for the three
months ended April 30, 2006, compared to a CA$1.3 million loss in
the same period last year. Product sales in the third quarter
were CA$100 thousand, compared to CA$598 thousand in the same
quarter last year.
At April 30, 2006, MedMira's balance sheet showed a CA$6,133,000
stockholders' deficit, compared to a CA$9,805,000 deficit at July
31, 2005.
For the nine months ended April 30, 2006 product sales were CA$1.7
million, down from CA$2.3 million for the same period last year.
The net loss of the nine month period was CA$5.1 million compared
to CA$3.9 million for the same period last year.
"The results for the quarter are very disappointing for management
and our shareholders." said Stephen Sham, chairman and CEO of
MedMira. "We are restructuring and increasing our sales and
marketing team with the objective of increasing short and mid term
revenues. We will discuss this and provide a general corporate
update on our upcoming quarterly conference call" Sham continued.
Overall gross margin in the third quarter was 35%, and was 53% for
the nine months ended April 30, 2006. The gross margin level is
in line with management's expectations for the mix of markets that
we are operating in.
Operating expenses for the third quarter increased to CA$2.2
million from CA$1.6 million last year. F or the nine months ended
April 30, 2006 operating expenses increased to CA$6.0 million from
CA$4.9 million for the same period in the previous year. These
increases are driven by increased interest costs related to the
issuance of convertible debentures in 2005, stock based
compensation costs recorded in the current year and increased
regulatory and professional fees.
MedMira Inc. (TSX Venture: MIR, NASDAQ:MMIRF) --
http://www.medmira.com/-- manufactures and markets in vitro flow-
through rapid diagnostic tests. MedMira delivers rapid diagnostic
solutions to healthcare communities around the globe. Its
corporate offices and manufacturing facilities are located in
Halifax, Nova Scotia, Canada with a representative office in
Guilin, China.
MESABA AVIATION: Ct. Modifies Stay to Settle District Court Suit
----------------------------------------------------------------
Following the Hon. Gregory Kishel of the U.S. Bankruptcy Court for
the District of Minnesota's denial of the request filed by
Fairbrook Leasing, Inc., Lambert Leasing, Inc., and Swedish
Aircraft Holdings AB's to lift the automatic stay -- without
prejudice to the Motion's renewal after May 1, 2006 --
representatives of Fairbrook, et al., Mesaba Aviation, Inc., dba
Mesaba Airlines, and the Official Committee of Unsecured
Creditors, met to settle the District Court Litigation.
Fairbrook, et al., had commenced a civil action against the Debtor
in the U.S. District Court of Minnesota. Pending in the District
Court Action are cross-motions for summary judgment to determine
the amount of damages owed by the Debtor in connection with the
Debtor's breach of certain leases entered into with Fairbrook, et
al.
Fairbrook, et al., the Debtor, and the Committee were unable to
reach a settlement at the meeting. However, the parties reached
a stipulation with regards the Cross-Motions.
Stipulation
Under the Court-approved stipulation, the Debtor and Fairbrook,
et al., agree that the Automatic Stay may be modified solely to
the extent necessary to enable the District Court to rule on the
Cross Motions.
The Automatic Stay will not be modified for any other purpose,
including permitting Fairbrook, et al., to attempt to obtain any
recovery with any ruling on the Cross Motions, or to attempt to
proceed with the District Court Litigation in any manner beyond
the District Court's ruling on the Cross Motions.
The parties also agree that nothing will operate as a waiver or
modification of the Automatic Stay to permit the prosecution
against the Debtor of any claim or claims by anyone other than
Fairbrook, et al.
The Committee consents to the limited relief from the Automatic
Stay.
About Mesaba Aviation
Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines. The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts. Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy
News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-
7000).
MESABA AVIATION: Judge Kishel Okays AIG Insurance Program Renewal
-----------------------------------------------------------------
The Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the
District of Minnesota authorized Mesaba Aviation, Inc., dba Mesaba
Airlines, to renew its Insurance Program with American
International Group, Inc.
Moreover, Judge Kishel:
-- authorized the Debtor to assume the Insurance Program;
-- approved the Collateral Agreement, Standby Agreement and
the first priority lien in the Deposit; and
-- waived any obligations arising under Section 345 in
connection with the Collateral Agreement or the Deposit.
Will R. Tansey, Esq., at Ravich, Meyer, Kirkman, McGrath &
Nauman, in Minneapolis, Minnesota, notes that the Debtor and
American International Group, Inc., are parties to a worker's
compensation insurance program.
Because the Debtor has been unable to obtain worker's compensation
insurance on terms more favorable than those offered by AIG, the
Debtor wants to renew the AIG Insurance Program, Mr. Tansey tells
the Court.
However, AIG requires the Debtor to:
(1) assume the Insurance Program under Section 365 of the
Bankruptcy Code;
(2) obtain the Court's approval of the annual renewal of the
Insurance Program from April 1, 2006, to April 1, 2007;
and
(3) increase the collateral securing the Debtor's obligations
under the Insurance Program to $3,540,000 by increasing
the current letter of credit from Wells Fargo Bank,
N.A., the Lender, to AIG for $1,040,000.
The Debtor has asked Wells Fargo to provide AIG with the LOC.
Wells Fargo agreed to issue the LOC provided that the Debtor:
(a) makes a $1,040,000 cash deposit with an additional expense
reserve to secure the LOC in accordance with a General
Pledge Agreement -- the Collateral Agreement;
(b) enters into a new Standby Letter of Credit Agreement with
Wells Fargo containing terms and conditions governing the
LOC;
(c) obtains a waiver of Wells Fargo's obligations under
Section 345(b) of the Bankruptcy Code.
Mr. Tansey notes that in connection with the LOC, and in addition
to the new $1,040,000 deposit to the whole time deposit account,
the Debtor intends to transfer $2,500,000 currently securing the
LOC from a brokerage account with Wells Fargo to a wholesale time
deposit account -- also with Wells Fargo -- to reduce the
required collateral and increase the interest earned on the
Deposit.
On April 6, 2006, the Debtor renewed the Insurance Program with
AIG, with the assurance that it will obtain Court approval of the
renewal.
In the event of a default by the Debtor under the Insurance
Program, the Court rules that AIG may exercise all contractual
rights under the terms of the Insurance Program without further
Court order, including AIG's right to (i) cancel the Insurance
Program, (ii) foreclose on any collateral, and (iii) receive and
apply the unearned or returned premiums to the Debtor's
outstanding obligations to AIG.
The Debtor's obligations under the Insurance Program are also
entitled to treatment as administrative expenses under Section
503(b), Judge Kishel said.
A full-text copy of the Collateral Agreement is available for
free at http://ResearchArchives.com/t/s?ccf
A full-text copy of the Standby Agreement is available for free
At http://ResearchArchives.com/t/s?cd0
About Mesaba Aviation
Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines. The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts. Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy
News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-
7000).
MIDWAY AIRLINES: Ch. 7 Trustee Wants Pact with Pilots Union Okayed
------------------------------------------------------------------
Joseph N. Callaway, the chapter 7 trustee liquidating the estates
of Midway Airlines Corp., and its debtor-affiliate, Midway
Airlines Parts, LLC, asks the U.S. Bankruptcy Court for the
Eastern District of North Carolina to approve a settlement
agreement with the Air Line Pilots Association, International.
ALPA served as the exclusive collective bargaining representative
of the bargaining unit pilots employed by Midway and was a party
to a collective bargaining agreement with Midway in effect when
the Debtors filed for bankruptcy. ALPA is seeking $12 million in
administrative claims. The ALPA Claims were based on, among other
things, alleged:
a. damages caused by lay offs, furloughs, and termination of
the Debtors' employees on:
* August 13, 2001,
* September 12, 2001,
* June 2002, and
* October 30, 2003;
b. prepetition claims arising from the asserted assumption
under Sections 365 and 1113 by Debtor of the ALPA collective
bargaining agreement during the Chapter 11 case by operation
of law;
c. accrued and unpaid postpetition, pre-Chapter 7 conversion
claims, i.e., from August 13, 2001, to October 30, 2003,
which includes wages, vacation pay, and grievance claims
arising from the ALPA collective bargaining agreement.
The Chapter 7 Trustee denied that the ALPA and other pilot claims
are valid administrative claims and pleaded substantive defenses.
The Chapter 7 Trustee believes and asserts that the proper
administrative claim of ALPA is less than $2 million.
Extensive litigation and discovery followed between the Chapter 7
Trustee and ALPA, which in turn led to settlement talks, mediation
and other efforts. The parties then agreed that:
a. Each former pilot will receive 30% of the greater of:
(1) the amounts for vacation pay on any proof of claim forms
filed by the individual; and
(2) the amounts for vacation pay stipulated between the
Debtor and the North Carolina Department of Labor;
b. Pilots will also receive around $238 for each date of the
four furlough events that he or she was employed by Midway.
No pilot will receive pay for more than three furlough pay
events.
c. One individual whose individual proof of claim form listed a
bounced postpetition wage check, and three individuals whose
individual proof of claim forms listed medical flex amounts
they were not able to access, will receive 100% of those
amounts without necessity of withholding taxes;
d. Several prepetition individual grievances and an ALPA claim
based on a bounced check for postpetition dues will be paid
at 30%;
Headquartered in Morrisville, North Carolina, Midway Airlines
Corp., is in the commercial passenger airline business and also
provides cargo and charter transportation on a limited bases. The
Company and its debtor-affiliate, Midway Airlines Parts, LLC,
filed for chapter 11 protection on Aug. 13, 2001 (Bankr. E.D.N.C.
Case No. 01-02319-5-ATS). The Court converted the case to a
Chapter 7 liquidation proceeding on Oct. 30, 2003. Joseph N.
Callaway served as the Debtors' Chapter 7 Trustee. Gerald A.
Jeutter, Jr., Esq., at Kilpatrick Stockton LLP, represents the
Debtors. When the Debtors filed for chapter 11 protection, they
listed total assets of $318,291,000 and total debts of
$231,952,000.
MIRANT CORP: Mitsui Settlement Deal Junks $3-Million Claim
----------------------------------------------------------
Reorganized Mirant Corporation and its reorganized
debtor-affiliates ask the U.S. Bankruptcy Court for the Northern
District of Texas to approve a settlement agreement between Mitsui
& Co. (U.S.A.), Inc., and Mirant and its affiliated companies,
including Mirant Americas, Inc., Mirant Bowline, L.L.C., and
Mirant Wyandotte, L.L.C.
The Settlement Agreement resolves the parties' dispute over
alleged breach of contract by the Mirant Debtors under two
prepetition supply agreements -- the Bowline Agreement and the
Wyandotte Agreement. In addition, pursuant to the Agreements,
Mitsui provided the Mirant Debtors with certain letters of
credit.
Michelle C. Campbell, Esq., at White & Case LLP, in Miami,
Florida, relates that the dispute arose when the Mirant Debtors:
* canceled their projects under the Bowline Agreement and the
Wyandotte Agreement; and
* elected not to take delivery of Mitsui's equipment, material
and services provided under the Agreements.
The undelivered equipment, material and services total to
$1,900,000.
As a result, Mitsui filed Claim No. 0000003094 for $3,000,000
against the Mirant Debtors.
Recently, the parties began discussing:
-- Mitsui's potential supply of goods and services to the
Reorganized Debtors in the event they recommence
construction at the Bowline Facility; and
-- the possible need for Mitsui's services in support of the
potential sale by the Reorganized Debtors to a third party
of the equipment provided by Mitsui under the Bowline
Agreement and Wyandotte Agreement.
Because of the parties' intention to re-establish their
professional relationship, Mitsui and the Reorganized Debtors
agree to resolve all issues relating to the Mitsui Claim and the
Undelivered Scope through the Settlement Agreement.
The principal terms of the Settlement Agreement are:
(a) New Mirant will release all claims under any of the
Letters of Credit. New Mirant will also return the
Letters of Credit, in the full undrawn amounts, to the
entity issuing the Letters of Credit. In the event that
the Letters of Credit are lost or missing, or New Mirant
does not return the Letters of Credit within two days of
the effective date of the Settlement Agreement, the
Reorganized Debtors must provide a certification in the
Settlement Agreement;
(b) Mitsui will withdraw the Mitsui Claim once the Letters of
Credit are returned or the Certification has been
provided;
(c) New Mirant will have no further payment obligations under
either the Bowline Agreement or Wyandotte Agreement;
(d) Mitsui will have no further obligation to deliver
materials, supplies or services, or perform under a
warranty or any other obligations, under either of the
Bowline Agreement or the Wyandotte Agreement;
(e) New Mirant will grant Mitsui and Ishikawajima-Harima Heavy
Industries Co., Ltd., a general release, while Mitsui will
grant Mirant a general release. IHI is Mitsui's
subcontractor in connection with the Bowline Agreement and
Wyandotte Agreement. While not a party to the Settlement
Agreement, IHI did agree and consent to the Settlement
Agreement;
(f) Mirant will provide Mitsui prior written notice of the
recommencement of any of its construction at the Bowline
Facility or the sale of any equipment previously supplied
by Mitsui to Mirant under the Bowline Agreement or
Wyandotte Agreement; and
(g} The parties will negotiate in good faith to reach a new
commercial agreement describing the work or services to be
provided by Mitsui to Mirant.
A full-text copy of the Mitsui Settlement Agreement is available
for free at http://researcharchives.com/t/s?d79
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. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to power generator and developer Mirant Corp. and
said the outlook is stable. That rating reflected the credit
profile of Mirant, based on the structure the company expects to
have on emergence from bankruptcy at or around year-end 2005,
S&P said.
MIRANT CORP: Lovett Unit Wants New York DEC Order Approved
----------------------------------------------------------
Mirant Lovett, LLC, a Mirant Corporation debtor-affiliate, owns
and operates the Lovett Coal Ash Management Facility located in
the town of Stony Point, New York. Mirant Lovett purchased the
Lovett Coal Ash Facility from Orange and Rockland Utilities, Inc.
In May 2005, the New York Department of Environmental
Conservation served an administrative Notice of Hearing and
Complaint on Mirant Lovett and Mirant New York, Inc., regarding
the Lovett Coal Ash Facility.
The DEC has the authority to enforce New York's environmental
laws, and has jurisdiction over the operation and closure of
solid waste management facilities.
The DEC Complaint alleged, among other things, that Mirant Lovett
failed to perform certain investigation and remediation or
restoration measures at the Lovett Coal Ash Facility in
compliance with New York's Department of Environmental
Conservation Rules and Regulations.
Based on the allegations in the DEC Complaint, Mirant Lovett
estimated that the cost of compliance with Title 6 Part 360 of
the New York Conservation Rules and Regulations will be more than
$1,000,000.
Additionally, the DEC may impose certain penalties for violation
of the NYCRR of up to $7,500 plus $1,500 per day, for each
violation of any rule or regulation promulgated or order issued.
The DEC Complaint sought a $100,000 penalty against Mirant
Lovett.
New York and the DEC filed administrative claims against the New
York Debtors, including claims against Mirant Lovett in
connection with the Lovett Coal Ash Facility under Section 503(b)
of the Bankruptcy Code.
In late May 2006, Mirant Lovett and the DEC entered into a
preliminary Consent Order resolving the administrative expense
claims asserted against the Lovett Coal Ash Facility.
Mirant Lovett asks Judge Lynn to approve the Order on Consent and
Compliance Schedule entered into with the Department of
Environmental Conservation dated June 2, 2006.
A full-text copy of the Consent Order between Mirant Lovett and
the New York DEC is available for free at
http://ResearchArchives.com/t/s?d27
The salient terms of the Consent Order and Compliance Schedule
are:
(a) Mirant Lovett will pay a $20,000 penalty to the DEC. Upon
payment of $5,000 of the $20,000, the requirement to pay
the remaining $15,000 will be suspended if Mirant Lovett
meets the terms of the Consent Order;
(b) The Consent Order will not constitute an admission of any
violation alleged in the DEC Complaint or Consent Order;
(c) Mirant Lovett's compliance with the Consent Order releases
and satisfies its obligations to the DEC under the
Complaint and Consent Order. However, that compliance
does not satisfy Mirant Lovett's prospective obligations
to the DEC;
(d) In accordance with a DEC-approved schedule, Mirant Lovett
will complete the construction or repair requirements of
the "Cap Stabilization Plan" in accordance with the DEC's
reasonable satisfaction; and
(e) The Compliance Schedule requires Mirant Lovett to, among
others:
i. continue to hold $4,200,000 in an escrow account with
Deutsche Bank Trust Company; and
ii. install certain flow meters and submit a revised
Cap Stabilization Plan.
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. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to power generator and developer Mirant Corp. and
said the outlook is stable. That rating reflected the credit
profile of Mirant, based on the structure the company expects to
have on emergence from bankruptcy at or around year-end 2005,
S&P said.
MITSUBISHI CHEMICAL: Closes Business, Accepting Proofs of Claim
---------------------------------------------------------------
Mitsubishi Chemical America, Inc. dissolved its business in
accordance with Sec. 280 of the Delaware Corp. Law.
All persons having a claim against the Company are requested to
direct their claims not later than Sept. 3, 2006, to:
Mitsubishi Chemical America, Inc.
1 North Lexington Avenue
White Plains, NY 10601
The Company said it may make distribution to other claimants and
to its stockholders without further notice to the claimants.
The Company also said it made no disbursements to its stockholders
during each of the three fiscal years prior to the date the
Company dissolved.
Based in White Plains, New York, Mitsubishi Chemical America, Inc.
-- http://www.mitsubishichemical.com/-- operates through many
subsidiaries and joint ventures that produce inks and drums for
copiers and printers, as well as phosphor used in computers and TV
screens, polyester film used in packaging, and building materials.
Subsidiary Verbatim makes computer storage products including
floppy discs and CDs. Joint ventures include Noltex
(ethylenevinyl alcohol) and GEM Microelectronic Materials
(electronics chemicals). With roots that date back to 1934, MCA
is a wholly owned subsidiary of Mitsubishi Chemical, Japan's
largest chemical company.
NEWPARK RESOURCES: Moody's Cuts Rating on $125MM Sr. Notes to B3
----------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
for Newpark Resources, Inc. to B1 from Ba3 and the ratings on the
company's senior subordinated notes to B3 from B2 following the
company's announcement that it will restate its financial
statements for the last five fiscal years, as well as for the
fiscal quarters within 2004 and 2005, due to accounting
irregularities; has terminated the former CEO and current CFO; and
is conducting an internal investigation into improper stock option
granting practices. The rating outlook remains negative.
Moody's negative rating outlook dating from April 18, 2006 had
reflected both the company's announcement that it was conducting
an internal investigation regarding accounting irregularities and
Moody's concern that Newpark's margins and returns have been lower
than its similarly rated peers.
The accounting irregularities, which were uncovered as part of
routine internal audit procedures and prompted an internal
investigation commissioned by the Audit Committee, primarily
relate to the processing and payment of invoices by Soloco Texas,
LP, one of the Newpark's subsidiaries in its mat and integrated
services segment. The Audit Committee has also commissioned an
internal investigation into improper stock option granting
practices, which while still ongoing has uncovered preliminary
findings of improper practices.
The company estimates the impact of the restatement, including a
preliminary $2 million estimate for the impact of improper option
granting practices, will impact pretax income by less than
$12 million, all of which is non-cash. The company has found
cause for the termination of the current CFO and the former CEO,
who is now the chairman and CEO of Newpark Environmental Water
Services, LLC, and an officer of Soloco Texas, LP, due to their
responsibility for many of the actions uncovered. In addition,
Newpark's COO has announced his resignation; however, the
resignation appears unrelated to the investigation.
The downgrade reflects Moody's concern that the restatements stem
from weak corporate governance and internal controls, uncertainty
regarding the integrity of Newpark's financial information, the
expectation that the restatements and the disruption at the senior
management level have and will continue to create significant
management distractions, the heightened risk of potential costly
litigation and fines, and increased risk that the company's
reputation and relationship with its customers could be impaired.
While Moody's views favorably the company's willingness to take
quick, strong action in response to the accounting irregularities
and notes that the financial impact of the restatements appears
modest, these factors are unable to offset the risks associated
with a weak governance and internal control environment.
As a result of the filing delay, Newpark will be in violation of
the financial reporting covenants under its bank credit facility
and senior subordinated notes. The company has received an
extension of its financial statement delivery requirements from
the lenders under its bank credit facility.
The company has not received a notice of default from the holders
of its 8.625% senor subordinated notes as a result of the filing
delay. If the company were to receive such notice it would have
30 days from the receipt of the notice to cure the default or risk
having the notes accelerated. The inability to either cure the
default or obtain sufficient waivers could result in a further
downgrade, as the company could face liquidity pressures.
The negative outlook reflects Moody's concern that the time to
complete the restatements could be considerable. In addition, with
any such investigation, the possibility remains that additional
issues and concerns will be identified, which could expand the
investigation's original scope. If further material accounting
irregularities are uncovered, the company faces material fines and
legal liabilities, or the company is subject to an acceleration of
its debt obligations the ratings may either be placed on review
for possible downgrade or downgraded.
The outlook could move to stable if the company is able to file
its restated financial statements with the SEC in the near-term
and it becomes current on its quarterly financial statement
filings. However, the rating and outlook would be subject to a
full review of the company and the audited financial statements,
including an assessment of Newpark's credit profile, particularly
in respect to is margins and returns. While Newpark's margins and
returns have been increasing, they have tended to be lower than
certain key peers.
Moody's expects Newpark's operating performance to benefit over
the near term from the current positive sector outlook. However,
we believe that the company could face the risk of market share or
margin erosion from increased competition from lower cost
providers or providers with more financial flexibility,
particularly during an industry downturn.
With a negative outlook, Moody's ratings actions for Newpark
Resources:
* Downgraded to B1 from Ba3 -- Corporate Family Rating
* Downgraded to B3 from B2 -- $125 million 8.625% senior
subordinated notes due 2007
Newpark Resources, Inc. is headquartered in Metarie, Louisiana.
ONEIDA LTD: Equity Committee Says Enterprise Value is Bigger
------------------------------------------------------------
The Official Committee of Equity Security Holders appointed in the
chapter 11 cases of Oneida Ltd. and its debtor-affiliates objects
to the confirmation of the Debtors' pre-negotiated plan of
reorganization.
Robert J. Stark, Esq., at Brown Rudnick Berlack Israels LLP, in
Manhattan tells the U.S. Bankruptcy Court for the Southern
District of New York that the Pre-Negotiated Plan is not
confirmable. The Pre-Negotiated Plan provides for the
cancellation of all existing stock and the distribution to Tranche
B Lenders -- secured lenders who loaned $101-million to the
Debtors in the second tranche of debt placements -- 100% of the
reorganized Debtors' common stock. Mr. Stark argues that this
stock is worth far more than the full amount of the Tranche B
Lender claims. The Equity Committee will establish at the
confirmation hearing that the enterprise value is sufficient to
pay all allowed claims in full, leaving substantial residual value
for existing equity holders.
The Honorable Robert D. Court will consider confirmation of the
Debtors' Pre-Negotiated Plan tomorrow, July 12, 2006.
Mr. Stark adds that the Pre-Negotiated Plan was not proposed in
good faith. The Pre-Negotiated Plan was not negotiated at arm's
length by objective, unbiased parties. Rather, it was negotiated
and approved by officers and directors placed into the Debtors'
management by the Tranche B Lenders. Further, the Debtors were
advised in those negotiations by professionals that count the
Tranche B Lenders as substantial clients, Mr. Stark tells the
Court.
According to Mr. Stark, shareholders were intentionally excluded
from the beginning, and, not surprisingly, the Pre-Negotiated Plan
bares the hallmarks of inside negotiations: over-compensation of
the Tranche B Lenders; management's award to itself of a
substantial share of the reorganized Debtors' stock; and the
waiver of all actions against directors, officers, lenders and
their professionals.
Mr. Stark points out that the Pre-Negotiated Plan provides for a
blanket release of valuable estate and privately held claims
against third parties.
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.
ONEIDA: Equity Panel Has Until July 21 to Question Plan Treatment
-----------------------------------------------------------------
The Official Committee of Equity Security Holders appointed in the
chapter 11 cases of Oneida Ltd. and its debtor-affiliates has
until July 21, 2006, to file an adversary proceeding regarding the
treatment of shareholder interest in the Debtors' Amended Plan of
Reorganization.
As reported in the Troubled Company Reporter on June 6, 2006,
holders of subordinated claims and equity interests will receive
nothing under the Amended Plan.
The Official Committee of Unsecured Creditors waives its right to
investigate, among other things, potential estate causes of action
and claims against other parties-in-interest. If, however, either
the Plan is withdrawn by the Debtors or a plan is filed with the
Court, which materially and adversely impacts the treatment of
unsecured creditors as proposed in the Plan, the Creditors'
Committee, in the exercise of its sole discretion, to investigate
and file an adversary proceeding asserting all creditor claims
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. Judge Groper has set
10:00 a.m. on July 12, 2006, to consider confirmation of the
Debtors' plan.
ONETRAVEL INC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: OneTravel, Inc.
aka OneTravel.com
aka Travel Solutions, Inc.
aka 1travel.com, Inc.
aka Travelogix, Inc.
aka OT Acquisition Corp.
aka www.OneTravel.com
aka www.DiscountHotels.com
801 North Grant
Odessa, Texas 79761
Bankruptcy Case No.: 06-70084
Debtor-affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
OneTravel Holdings, Inc. 06-70085
Farequesty Holdings, Inc. 06-70086
Flightserv, Inc. 06-70087
FS Tours, Inc. 06-70088
Type of Business: The Debtors offer comprehensive travel and
lodging services. See http://www.onetravel.com/
and http://www.discounthotels.com/
Chapter 11 Petition Date: July 7, 2006
Court: Western District of Texas (Midland)
Judge: Ronald B. King
Debtors' Counsel: Carol E. Jendrzey, Esq.
Cox Smith Matthews, Inc.
112 East Pecan Street, Suite 1800
San Antonio, Texas 78205
Tel: (210) 554-5558
Fax: (210) 226-8395
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtors' Consolidated List of their 20 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
American Airlines $972,000
4255 Amon Carter
Boulevard, MD 2400
Fort Worth, TX 76155-2603
Travelzoo, Inc. Judgment Creditors $586,899
(no address provided)
Jim Allen
Tel: (305) 913-3409
Smarter Living Trade $583,000
465 Medford Street, Suite 400
Charlestown, MA 02129
BDO Seidman, LLP Professional $575,000
1001 Morehoead Square Drive Services
Suite 300
Charlotte, NC 28203
Amex $494,995
Travel/VipFares.com/
Amextravel.com
Government Avenue Road # 601
Suite 12, Building #60
Manama, 306 Bahrain
Marc Dsouza
Tel: (323) 908-3205
S&L Travel Partners Supplier $453,000
aka Lynx/Ski.com
1839 York Street
Denver, CO 80206
Indigo Architects Contract Staff $292,000
21 East Chestnut Street
Suite 17B
Chicago, IL 60611
Katten Muchin Rosenman LLP Legal Representative $292,000
525 West Monroe Street
Chicago, IL 60661-3693
Manipal Trade Vendor $247,000
Manipal Informatics
Manipal 576104
Karataka, India
KM Shetty
Tel: 91-920-2574188
Airlines Reporting Corp. $225,000
Skybird Travel & Tours Inc. $200,000
Kayak Supplier $170,000
Uptilit $127,000
Appleone $113,938
Tourico Supplier $90,626
Wiley Rein & Fielding LLP Professional $82,580
Services
Travalco USA Inc. Supplier $65,000
Cheapflights (USA) Inc. $48,724
TravelWorm, Inc. Supplier $43,544
Mobissimio $39,767
ON TOP COMMS: Selling Virginia Station to Red Zebra for $4.25 Mil.
------------------------------------------------------------------
The Hon. Paul Mannes of the U.S. Bankruptcy Court for the District
of Maryland:
a) authorized the sale of On Top Communications, LLC, and its
debtor-affiliates' assets to Red Zebra Broadcasting, LLC,
for $4.25 million, subject to higher and better offers at an
auction;
b) established bidding procedures for the conduct of the
auction including, but not limited to, approval of a $50,000
break-up fee for the buyer's reimbursement of transaction
expenses;
c) set the auction to solicit higher and better offers for the
assets on July 17, 2006, at 3:00 p.m.
Asset Purchase Agreement
On June 2, 2006, the Debtors entered into Asset Purchase Agreement
with Red Zebra to sell their Virginia Station in which the buyer
have the option of requesting that the Debtors assume and assign
the Station Contracts.
The Debtors will satisfy all cure costs associated with the
assumption and assignment of the leases and the buyer, independent
of the purchase price, will satisfy all cure costs associated with
the assumption and assignment of all other Station Contracts.
A full-text copy of the Debtors' Asset Purchase Agreement is
available for free at:
http://researcharchives.com/t/s?d7b
A full-text copy of the Debtors' Station Contracts is available
for free at http://researcharchives.com/t/s?d7c
Bidding Procedures Approved
Competing bids for the assets pursuant to the Bid Procedures are
due at 4:00 p.m. today, July 11, 2006, at 4:00 p.m. Bidders are
required to make a cash deposit of $212,500, payable by certified
check or wire transfer to Miles & Stockbridge, P.C., as escrow
agent.
The sale hearing is scheduled at 3:00 p.m., on July 17, 2006, at:
The U.S. Bankruptcy Court
Courtroom 3-D
6500 Cherrywood Lane
Greenbelt, Maryland 20770
Objections, if any, must be served and filed by July 14, 2006, at
4:00 p.m., with:
i) Clerk of the Court;
ii) the Debtor's Counsel
Attn: Thomas D. Renda, Esq.
Miles & Stockbridge, P.C.
10 Light Street
Baltimore, Maryland 21201;
iii) Counsel to the Senior Secured Lenders
Arent Fox PLLC
Attn: Mary Joanne Dowd, Esq.
1050 Connecticut Avenue, N.W.,
Washington, DC 20036;
iv) the U.S. Trustee
Attn: Lynn A. Kohen, Esq.
6305 Ivy Lane, Suite 600
Greenbelt, Maryland 20770; and
v) Counsel to Red Zebra
Latham & Watkins LLP
Attn: Josef Athanas, Esq. and Caroline Reckler, Esq.
233 S. Wacker Drive, Suite 5800
Chicago, Illinois, 60606
Headquartered in Lanham, Maryland, On Top Communications, LLC, and
its affiliates acquire, own and operate FM radio stations located
in the Southeastern United States. The Company and its debtor-
affiliates filed for chapter 11 protection on July 29, 2005
(Bankr. D. Md. Case No. 05-27037). Thomas L. Lackey, Esq., of
Bowie, Maryland, represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they estimated assets and debts of $10 million to
$50 million.
OUTBOARD MARINE: Trustee Expands Gallinar's Work Scope, Taps Stack
------------------------------------------------------------------
The Honorable John H. Squires of the U.S. Bankruptcy Court for the
Northern District of Illinois in Chicago authorized Alex D.
Moglia, the Chapter 7 Trustee appointed in Outboard Marine
Corporation's bankruptcy cases, to:
-- expand the scope of employment of Michael Gallinar, Esq. of
the law firm of Adams, Gallinar & Iglesias, P.A., as his
special counsel; and
-- employ Brian J. Stack, Esq., and the law firm of Stack
Fernandez Anderson & Harris, P.A., as his special litigation
counsel.
Before filing for bankruptcy, the Debtor held mortgages on four
parcels of real estate located in Florida.
On March 4, 2003, the Chapter 7 Trustee filed a motion for
authority to employ Mr. Gallinar as his special counsel for the
limited purpose of investigating the values of the Florida
Properties and evaluating the feasibility of collecting on the
mortgages or foreclosing on the properties.
On March 12, 2003, the Bankruptcy Court entered an order
authorizing the Chapter 7 Trustee to employ Mr. Gallinar and
limiting his fees for those services to $3,000.
Mr. Gallinar performed an evaluation of the properties and has
determined that the Debtor may have claims in excess of
$1 million. Mr. Gallinar advised that it is appropriate to make
foreclosure proceedings in Florida to attempt to collect on those
claims.
Mr. Gallinar requires the assistance of co-counsel to handle the
litigation aspects of any foreclosure proceedings and Mr. Stack
will provide his services.
Mr. Gallinar will:
(a) coordinate with co-counsel in drafting the real estate
specific portions of the foreclosure complaints;
(b) prepare and handle title and title issues; and
(c) analyze legal issues that may arise in the context of the
foreclosure proceedings.
Mr. Stack will assist the Chapter 7 Trustee in connection with the
litigation aspects of the foreclosure process. Mr. Stack will
also:
(a) coordinate with co-counsel in drafting, serving and filing
the foreclosure complaints;
(b) prepare and serve motions, discovery, and responses to
motions and discovery in connection with the foreclosure
litigation; and
(c) make court appearances on behalf of the Trustee.
Mr. Gallinar and Mr. Stack will bill between $150 and $350 per
hour.
Mr. Gallinar and Mr. Stack assured the Court that they and their
firms neither hold nor represent any adverse interest in
connection with the matters upon which they are to be employed,
and are disinterested as that term is defined in Section 101(14)
of the Bankruptcy Code.
Outboard Marine Corporation and its debtor-affiliates filed for
chapter 11 protection on December 22, 2000 (Bankr. N.D. Ill. Case
No. 00-37405). On August 22, 2001, the Chapter 11 cases were
converted to Chapter 7. On Aug. 24, 2001, Alex D. Moglia was
appointed to serve as the Chapter 7 Trustee. Kathleen H. Klaus,
Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin, LLC serves
as Counsel to the Chapter 7 Trustee.
OWENS CORNING: Court Approves 6th Amended Disclosure Statement
--------------------------------------------------------------
The Honorable Judith K. Fitzgerald approved the Sixth Amended
Disclosure Statement for the chapter 11 cases of Owens Corning and
its debtor-affiliates from the bench yesterday, the Houston
Chronicle reports. A written order will likely be issued today.
Norman L. Pernick, at Saul Ewing LLP, in Wilmington, Delaware,
told Judge Fitzgerald that most of the objections to the
disclosure statement had been resolved. The judge rejected those
that remained, Ramesh Santanam writes.
The U.S. Bankruptcy Court for the District of Delaware determined
that the Disclosure Statement contained adequate information --
the right amount of the right kind of information necessary for
the creditors to make informed decisions -- as required by
Section 1125 of the Bankruptcy Code.
The Debtors, together with the Official Committee of Asbestos
claimants and the Legal Representative for the class of future
asbestos claimants, filed a revised Sixth Amended Joint Plan of
Reorganization and the Disclosure Statement on June 30, 2006.
The Revised Sixth Amended Plan and Disclosure Statement reflect
proposed changes and modifications made to the Plan documents
since June 5, 2006, J. Kate Stickles, Esq., at Saul Ewing LLP, in
Wilmington, Delaware, says.
The Plan Proponents are now authorized to distribute copies of the
Disclosure Statement and solicit acceptances for the Plan. The
Debtors have 17 days to distribute the Disclosure Statement
copies.
The Court will consider confirmation of the Plan on
Sept. 18, 2006. If confirmed by then, the Plan will be effective
on Oct. 30, 2006. Around 131.4 million shares of new stock will
be issued at the Effective Date.
The Plan proposes that around $5 billion will be paid to asbestos
claimants and as much as $2.27 billion to holders of bank debt.
Owens Corning is expected to exit bankruptcy with a value of
$5.86 billion.
Classification of Claims and Interests
The classification of claims and interests, as revised, now
excludes Class B9 Claims -- FB Asbestos Property Damage Claims.
Among others, the Revised Sixth Amended Plan omits the provision
on the FB Asbestos Property Damage Trust. The revised Plan
provides that holders of Allowed Class B6 Claims (Fibreboard
General Unsecured Claims), which are FB Asbestos Property Damage
Claims, if any, will be paid first from any applicable insurance.
The Revised Sixth Amended Plan also splits into two the Class A12
Interest -- OCD Interests:
Class Description Treatment
----- -------------- ---------------------------
A12-A Existing OCD Cancelled, extinguished and
Common Stock retired; may receive Class A12-A
Warrants.
A12-B OCD Interests Cancelled, extinguished and
Other than retired; no distribution.
Existing OCD
Common Stock
The Plan Proponents also notes in the Revised Sixth Amended
Disclosure Statement that Classes A5, A6-A and A6-B each could
receive smaller distributions or distributions in different forms
-- different proportions of cash versus New OCD Common Stock --
if their Class rejects the Plan, or in the case of Class A6-A and
Class A6-B, if Class A-5 rejects the Plan. The differences in
treatment primarily result from the conditioning of certain
waiver of various rights otherwise available to Class A7 on the
acceptance of the Plan by Classes A5, A6-A and A6-B.
Development in Debtors' Cases
The Revised Sixth Amended Disclosure Statement also reports
recent developments in the Debtors' Chapter 11 cases since the
filing of the Sixth Amended Plan. Among others, the Revised
Disclosure Statement relates of:
-- the Court's approval of a settlement dismissing a lawsuit
in the Superior Court of California, County Alameda,
against certain tobacco companies;
-- the Debtors' filing of a motion to approve $2,400,000,000
in exit financing;
-- the Debtors' seeking the Court's approval of their proposed
Rights Offering procedures; and
-- the Court's approval of the Plan Support Agreement and the
Equity Commitment Agreement.
Collar and Registration Rights Agreements
Pursuant to the Court's order approving the Equity Commitment
Agreement, before payment of the Backstop Fee, the Debtors will
have filed on or before July 7, 2006, copies of the Collar
Agreements and Registration Rights Agreements approved by the ACC
and FCR, and signed by the parties.
The Equity Commitment Order provides that, in the event those
documents are filed, then the Order will have full force and
effect commencing on July 10, 2006, and the Debtors will pay the
Backstop Fee no later than that date. In the event that the
documents are not filed, then the Order will not be enforceable
and, among other things, J.P. Morgan Securities Inc. and the
Debtors will have the right to terminate the Equity Commitment
Agreement.
The Plan Proponents filed with the Court, as exhibits to the
Revised Sixth Amended Plan, draft forms of the Collar Agreement
and Registration Rights Agreement between the Debtors and J.P.
Morgan.
The Registration Rights Agreements provide that the Debtors will
grant registration rights to the Asbestos Personal Injury Trust,
J.P. Morgan and the Backstop Providers to permit the registered
resale of securities. As contemplated by the Registration Rights
Agreements, the Asbestos Personal Injury Trust and J.P. Morgan,
et al., will have registration rights after the Effective Date in
respect of the New OCD Common Stock.
A full-text copy of the draft form of the Registration Rights
Agreement with J.P. Morgan is available for free at:
http://ResearchArchives.com/t/s?d81
The Debtors will enter into the Collar Agreements, covering all
of the 28,200,000 Reserved New OCD Shares, with J.P. Morgan and
certain other financial institutions -- the Dealers. Pursuant to
the terms of the Collars, at the Assignment Effective Date, the
Debtors' rights and obligations, as agreed to under the Collars,
will be assigned to the Asbestos Personal Injury Trust.
The Collars provide, among others, that:
a. the Asbestos Personal Injury Trust will grant to each of
the Dealers options to purchase or call, severally, a
portion of all of the shares held by the Asbestos Personal
Injury Trust, for $37.50 per share. The options will
expire 12 months after the date the shares of New OCD
Common Stock are issued to the Asbestos Personal Injury
Trust -- the Issuance Date; and
b. each of the Dealers will grant, severally, to the Asbestos
Personal Injury Trust options to sell, or put, a portion of
all of its shares to the dealer, for $25 per share,
which options will expire three months after the Issuance
Date.
A full-text copy of the draft form of the Collar Agreement with
J.P. Morgan is available for free at:
http://ResearchArchives.com/t/s?d82
Debtors May Seek to Confirm Fifth Amended Plan
As previously reported, the Court has scheduled a plan
confirmation hearing on September 18, 2006.
The Debtors, Ms. Stickles says, intend to seek confirmation and
consummation of the Revised Sixth Amended Plan at the earliest
practicable time.
However, the Debtors disclose that they intend to seek
confirmation of the Fifth Amended Plan filed with the Court on
December 31, 2006, if:
a. the Plan Effective Date does not occur before December 31,
2006; and
b. the Plan Proponents do not agree to extend the conditions
precedent in the Sixth Amended Plan respecting the
occurrence of the Effective Date beyond December 31, 2006.
Consistent with the terms of the Fifth Amended Plan, any
substantive changes to the Fifth Amended Plan and related
documents, including any registration rights agreement and terms
respecting the composition of the Board of Directors of
reorganized Owens Corning, will be subject to the reasonable
consent of the Plan Proponents.
A full-text copy of Owens' Revised Sixth Amended Plan is
available for free at:
http://ResearchArchives.com/t/s?d83
A full-text copy of Owens' Revised Sixth Amended Disclosure
Statement is available for free at:
http://ResearchArchives.com/t/s?d84
The U.S. Supreme Court recently declined to hear an appeal of
another plan that would have lumped together the company's assets.
Earlier reorganization proposals failed because of disputes
between creditors.
Under the original version of the plan, shareholders would have
gotten nothing.
Shareholders and some creditors had hoped there would be
legislation to create a national trust to take over asbestos
liabilities from companies such as Owens Corning. But a bill
that would have set up a $140 million victims' fund failed in the
U.S. Senate in February. Supporters said they will revive it.
Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/--
manufactures fiberglass insulation, roofing materials, vinyl
windows and siding, patio doors, rain gutters and downspouts.
Headquartered in Toledo, Ohio, the Company filed for chapter 11
protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors. James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 135; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
OWENS CORNING: Will Create $11MM Fund to Settle MiraVista Claims
----------------------------------------------------------------
Owens Corning and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to approve a settlement
agreement resolving claims asserted by John Stratton, Robert Lopez
and Anne Rudin, and the claims asserted in the lawsuit entitled
McIlhargie, et al. v. Molded Fiber Glass Cos., et al.
In April 2002, Messrs. Lopez and Stratton, and Ms. Rudin filed
claims individually and on behalf of a purported class of certain
owners of property on which MIRAVISTA(R) TILES manufactured,
distributed or supplied by Owens Corning from January l, 1995,
forward, are installed.
In July 2004, the claimants together with Sherry McIlhargie,
William Mellor, Dewayne Hall, Allison Wilson amended the
McIlhargie Complaint filed in the Superior Court for San Joaquin
County, California, to include claims against Owens Corning
arising from the purchase of MiraVista Tiles after October 5,
2000. Owens Corning removed the McIlhargie Complaint to the U.S.
Bankruptcy Court for the Eastern District of California, which
transferred the case to the Delaware Bankruptcy Court.
Owens Corning disputes the MiraVista Claims in both actions.
The Claimants and Owens Corning engaged in extensive discovery
with respect to the MiraVista Claims. After arm's-length
negotiations, the parties agreed to execute the Settlement
Agreement.
The Settlement resolves, without further litigation, all of the
claims that were asserted or could have been asserted in the
Lopez and McIlhargie lawsuits, J. Kate Stickles, Esq., at Saul
Ewing, LLP, in Wilmington, Delaware, says.
In light of the uncertain but substantial costs that would be
incurred in further litigating the MiraVista Claims, the Debtors
believe that consummation of the Settlement will maximize the
value of the estate.
Request for Class Certification
If the Court approves the Settlement, its implementation will
require compliance with the procedures for class certification
and settlement specified by Rule 23 of the Federal Rules of Civil
Procedure, made applicable to these proceedings by Rule 7023 of
the Federal Rules of Bankruptcy Procedure, Ms. Stickles points
out.
Accordingly, the MiraVista Claimants ask the Court to:
a. certify an "opt-out" class for settlement purposes and two
subclasses -- a subclass for persons who purchased the
MiraVista Tiles before the Debtors' Petition Date and
another for those who purchased after the Petition Date;
and
b. appoint counsel for the Settlement Class and one of the
subclasses.
The MiraVista Claimants contend that the use of subclasses
eliminates the concern that any differences between pre- and
post-petition purchasers might make treatment of the claims in a
single class unfair to one subclass or the other.
The MiraVista Claimants propose that the Court appoint as their
counsel Birka-White Law Offices, Farella Braun + Martel and
Norton & Melnik.
Settlement Terms
The Settlement Agreement calls for the creation of an $11,000,000
Settlement Fund against which the Settlement Class can make
claims based on a Plan of Distribution. Owens Corning will
contribute the $11,000,000 in cash and its complete inventory of
MiraVista Tiles to the Settlement Fund.
The cash payment will cover the notice costs and administrative
costs associated with the Settlement, any attorneys' fees and
monetary awards to the Class Members.
The inventory of MiraVista Tiles will be available as an
alternative to, or a supplement to, a monetary award. Class
Members may recover either for existing damage to their MiraVista
roof or for the costs of prior replacement of a MiraVista roof
due to damage.
In addition, the administrator of the claims process will
consider reimbursing Class Members for other damage to their
buildings that was caused by the MiraVista Tiles. Upon receiving
notification that a claim has been allowed, a Class Member will
elect either a monetary or product award.
The amount of a meritorious claimant's monetary award will depend
on both the size of the MiraVista roof as well as the timing of
the claim. After a one-year processing period, 75% of the cash
in the Settlement Fund will be disbursed on a pro rata basis to
each claimant with a valid claim.
After initial distribution, the Settlement Fund will continue to
accept claims until two years have elapsed, at which point the
remaining 25% will be disbursed. All eligible claimants who
filed their claim in the second year of the fund will receive a
pro rata share, but the amount of their share will be no greater
than their share would have been had they filed their claim in
the first year of the fund. To the extent that any cash remains
after the second distribution, the balance will be paid to all
eligible claimants on a pro rata basis.
In contrast to monetary awards, product awards will be disbursed
throughout the entire life of the Settlement Fund. Claimants may
receive product awards beginning at the time that the Settlement
Fund begins accepting claims and continuing until there is no
inventory remaining. Claimants who fail to file a claim within
the first two years of the fund may nonetheless file a claim for
a product award as long as supplies last.
A full-text copy of the redacted version of the Settlement
Agreement is available for free at:
http://ResearchArchives.com/t/s?d29
The Debtors seek the Court's permission to file the undredacted
version of the Agreement under seal. The Debtors assert that the
redacted information, which states the conditions under which
Owens Corning may exercise its right to terminate the Settlement,
must be kept confidential unless and until the Court finally
approves the Settlement.
The Debtors are concerned that the inclusion of the redacted
terms would unduly influence potential class members' decisions
whether to opt out of the Settlement for reasons unrelated to the
adequacy of the terms. However, the Debtors propose to serve a
copy of the unredacted versions to, among others, the Office of
the U.S. Trustee, and counsel for the Official Committee of
General Unsecured Creditors, the Official Committee of Asbestos
Claimants and Court-appointed representative of Future Claimants.
Proposed Notice Procedures
The MiraVista Claimants propose to distribute notices to the
Settlement Class, which notices set forth:
-- the nature of the action;
-- the definition of the class certified;
-- the class claims, issues or defenses;
-- the right of class member to appear and be heard;
-- that right of a class member to exclude him or herself from
the class; and
-- the binding effect of the settlement on class members who
do not opt-out.
The Claimants' proposed counsel have retained Kinsella/Novak
Communications, Ltd., a legal notification firm, to assist in the
drafting of the Notice and the design and implementation of a
means of dissemination of the Notice -- the Notice Plan.
The Claimants ask the Court to approve the Notice and the Notice
Plan.
Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/--
manufactures fiberglass insulation, roofing materials, vinyl
windows and siding, patio doors, rain gutters and downspouts.
Headquartered in Toledo, Ohio, the Company filed for chapter 11
protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors. James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 133; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PEABODY ENERGY: Excel Acquisition Cues S&P to Affirm BB Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on St.
Louis, Missouri-based coal producer Peabody Energy Corp. to
stable from positive following the company's announcement that it
has entered into an agreement to acquire Australian coal producer,
Excel Coal Limited, for $1.34 billion plus the assumption of $190
million of debt.
At the same time, Standard & Poor's affirmed its ratings on
Peabody, including its 'BB' corporate credit rating.
"The outlook revision reflects Peabody's aggressive use of
financial leverage for this acquisition, which we believe will
prevent sufficient improvement in credit metrics over the
intermediate term that would have supported a higher rating," said
Standard & Poor's credit analyst Thomas Watters.
Pro forma for this transaction, Peabody's total debt will increase
by $1.5 billion or close to 40%.
Standard & Poor's ratings affirmation incorporates a meaningful
reduction in the debt used to fund this acquisition through
internally generated cash or proceeds raised from an equity
offering. The acquisition of Excel significantly expands
Peabody's Australian presence, but does not meaningfully improve
its business risk profile.
Excel is a small coal producer with approximately 5.5 million tons
of sales volume in 2005 compared to Peabody's 240 million tons of
coal sales. Excel's production is expected to increase to 20
million tons by 2008 through expansion projects that are well
underway.
PERFORMANCE TRANSPORTATION: Chris Powers Wants to Continue Suit
---------------------------------------------------------------
Chris Powers asks the U.S. Bankruptcy Court for the Western
District of New York to lift the automatic stay to allow him to
pursue an action against Hadley Auto Transportation, a debtor-
affiliate of Performance Transportation Services, Inc.
On Sept. 17, 2004, Mr. Powers commenced an action in the Superior
Court in and for the County of Maricopa, in Arizona, against,
Hadley Auto. Mr. Powers asserted injuries from a motor vehicle
accident.
The Debtor believes it is entitled to a defense and agreement of
indemnification in connection with the Arizona Action from
Discovery Re Insurance Company, a subsidiary of St. Paul
Travelers, pursuant to an insurance policy. The Policy was in
effect at the time of the alleged accident and provide indemnity
to the Debtor for damages that Mr. Powers asserted.
Francis P. Weimer, Esq., at Aaron Dautch Sternberg & Lawson, LLP,
assures the Court that during the pendency of the Debtors'
Chapter 11 cases, Mr. Powers will seek damages solely from and
pursuant to the general liability insurance maintained and
provided pursuant to the Policy.
Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America. The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment. The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.
Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts. David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors. When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts. (Performance Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PORTOLA PACKAGING: Audit Panel Appoints BDO Seidman as Accountants
------------------------------------------------------------------
On February 13, 2006 the Audit Committee of Portola Packaging
Inc.'s Board of Directors authorized the Company's senior
management to solicit proposals from various accounting firms to
provide audit and related services, because of the Committee's
concerns about the increasing costs of these services.
On June 26, 2006, the Audit Committee dismissed Price Waterhouse
Coopers, LLC as the Company's principal accountants and appointed
BDO Seidman, LLP as its replacement for the fiscal year ended
August 31, 2006. PWC will continue to perform tax services for
the Company.
PWC's report on the Company's financial statements for the past
two years did not contain any adverse opinion nor were they
qualified as to uncertainty, audit scope or accounting principals.
The Company is restating its second fiscal quarter results to
record a $1.5 million loss contingency because it offered to
settle its dispute with Blackhawk Moulding Company, Inc. by paying
$1.5 million.
Portola Packaging Inc. -- http://www.portpack.com/-- designs,
manufactures and markets tamper evident plastic closures used in
dairy, fruit juice, bottled water, sports drinks, institutional
food products and other non-carbonated beverage products. The
Company also produces a wide variety of plastic bottles for use in
the dairy, water and juice industries, including various high
density bottles, as well as five-gallon polycarbonate water
bottles. In addition, the Company designs, manufactures and
markets capping equipment for use in high speed bottling, filling
and packaging production lines. The Company is also engaged in
the manufacture and sale of tooling and molds used in the blow
molding industry.
As of Feb. 28, 2006, Portola's balance sheet showed total assets
of $171,621,000 and total liabilities of $234,818,000, resulting
in a shareholders' deficit of $63,197,000.
PREDIWAVE CORP: Latham & Watkins Approved as Bankruptcy Counsel
---------------------------------------------------------------
The Honorable Randall J. Newsome of the U.S. Bankruptcy Court for
the Northern District of California in Oakland gave Prediwave
Corporation permission to employ Latham & Watkins, LLP, as its
bankruptcy and special litigation counsel, nunc pro tunc to April
14, 2006.
As reported in the Troubled Company Reporter on May 5, 2006,
Latham & Watkins will:
a. advise the Debtor of its powers and duties as debtor in
possession in the continued operation of its business and
management of its properties;
b. assist, advise and represent the Debtor in its
consultations with parties in interest regarding the
administration of their chapter 11 case;
c. provide assistance, advice and representation concerning
the preparation and negotiation of a plan of reorganization
and disclosure statement and any asset sales, equity
investments or other transactions proposed in connection
with the chapter 11 case;
d. provide assistance, advice and representation concerning
any investigation of the assets, liabilities and financial
condition of the Debtor that may be required;
e. represent the Debtor at hearings on matters pertaining to
its affairs as a debtor and debtor in possession;
f. prosecute and defend contested matters, litigation matters,
and other matters that might arise during and related to
the chapter 11 case, except to the extent that the
Debtor has employed or seeks to employ other special
Litigation counsel;
g. provide counseling and representation with respect to the
assumption or rejection of executory contracts and leases
and other bankruptcy-related matters arising from the
case;
h. render advice with respect to the many general corporate
and litigation issues relating to this case, including
real estate, ERISA, securities, corporate finance,
regulatory, tax and commercial matters; and
i. perform other legal services as may be necessary and
appropriate for the efficient and economical administration
of the chapter 11 Debtor.
Robert A. Klyman, Esq., a partner at Latham & Watkins, told the
Court that the Firm's professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
Paul H. Dawes Partner & Counsel $775
Patrick E. Gibbs Partner & Counsel $595
Robert A. Klyman Partner & Counsel $675
Gregory O. Lunt Partner & Counsel $595
James K. Lynch Partner & Counsel $595
Daniel Scott Schecter Partner & Counsel $595
John C. Tang Partner & Counsel $550
Amos E. Hartston Partner & Counsel $525
Xochitl Arteaga Associate $425
Jennifer L. Barry Associate $360
Darcy L. Conklin Associate $390
Shannon M. Eagan Associate $515
Jennie Foote Feldman Associate $490
David M. Friedman Associate $515
Alan L. Leavitt Associate $385
Heather E. Marlow Associate $490
Heather L. Mayer Associate $515
Amy C. Quartarolo Associate $460
Phillip J. Wang Associate $490
Kathryn Bowman Paralegal $230
Colleen Greenwood Paralegal $200
Headquartered in Fremont, Calif., PrediWave Corporation --
http://www.prediwave.com/-- provides cable and satellite
operators with end-to-end digital broadcast platforms, and offers
products like Video On Demand, Digital Video Recording,
interactive video shopping, and subscription services. The Debtor
filed for chapter 11 protection on April 14, 2006 (Bankr. N.D.
California Case No. 06-40547). Robert A. Klyman, Esq., at Latham
& Watkins, LLP, and Jonathan S. Shenson, Esq., at Klee, Tuchin,
Bogdanoff & Stern LLP represent the Debtor in its restructuring
efforts. The Debtor's Schedules of Assets and Liabilities showed
$145,282,246 in total assets and $773,033,371 in total
liabilities.
PREDIWAVE CORP: Wants XRoads as Financial & Restructuring Advisor
-----------------------------------------------------------------
Prediwave Corporation asks the Honorable Randall J. Newsome of the
U.S. Bankruptcy Court for the Northern District of California in
Oakland for authority to employ XRoads Solutions Group, LLC, as
its financial and restructuring advisor, effective as of June 5,
2006.
Vincent Lin, the Debtor's Vice President of Operations and General
Counsel, told the Court that its existing management does not have
the requisite skills and experience to respond efficiently and
effectively to the myriad managerial challenges brought on by the
Debtor's chapter 11 filing, including:
-- developing, negotiating and implementing a restructuring
plan;
-- maximizing and managing the Debtor's liquidity in accordance
with the Bankruptcy Code, and
-- changing the Debtor's business practices to achieve
sustained profitability.
In addition, the Debtor's chief financial officer resigned shortly
before PrediWave filed for bankruptcy, placing additional stress
on the Debtor's financial management capabilities.
The Debtor has selected Dennis I. Simon, the founder and managing
principal of Xroads, to:
-- serve as its Chief Restructuring Officer and a member of its
board of directors, and
-- be responsible for the development and implementation of a
plan of reorganization for the Debtor.
Mr. Simon will also be the person responsible for communicating
with the Debtor's creditors and litigants and meeting with
representatives of those constituents in connection with the
formulation, negotiation, and execution of a plan of
reorganization, as well as its business operations, financial
performance and general condition.
XRoads Solutions will supervise a review of:
a. the Debtor's cash position, management, controls and
disbursements;
b. the status and basis for any inter-company balances between
the Debtor and third parties, including but not limited to
its affiliated entities and advise the Debtor of the
findings;
c. the Debtor's current business operations and future business
plans;
d. the terms of the key contractual arrangements of the Debtor;
e. the value of the Debtor's intellectual property;
f. the Debtor's technology;
g. prepetition avoidable preferences or fraudulent transfers
and make recommendations to the Debtor and its counsel;
h. the status and accuracy of documents required to be filed
with the Bankruptcy Court and remedy variances;
i. forensic analysis as may be requested, directed or
authorized by the Bankruptcy Court;
j. possible causes of action on behalf of the Debtor in
consultation with the Debtor's counsel; and
k. steps to pursue maximization of the value of the Debtor's
estate for the benefit of all constituents.
XRoads will also advise the CRO, on behalf of the Debtor,
including, but not limited to:
a. the Debtor's business plan, cash flow, operations,
contracts, forecasting, litigation and liquidity;
b. preparation of financial reports to creditors and the Court;
and
c. providing support for preparation of claims objections and
claims processing.
In addition, XRoads will serve as the Debtor's general financial
and restructuring advisor, to help the Debtor maximize the value
of its business and its technology for the benefit of creditors
and the estate.
Dawn Ragan, a Managing Director at XRoads, will serve as the
Debtor's Chief Financial Officer. She will assume the day-to-day
duties generally associated with the role of CFO and she will
report to the CRO.
Mr. Simon discloses that he bills $525 per hour. The current
hourly rates of other professionals in the Firm are:
Designation Hourly Rate
----------- -----------
Principals $475
Managing Directors $425
Directors $375
Senior Consultants $325
Consultants $250
Associates & Paraprofessionals $200
Administrators $150
Mr. Simon assures the Court that XRoads Solutions Group, LLC, has
no interest materially adverse to the interests of the estate or
any party-in-interest in this engagement.
Headquartered in Fremont, Calif., PrediWave Corporation --
http://www.prediwave.com/-- provides cable and satellite
operators with end-to-end digital broadcast platforms, and offers
products like Video On Demand, Digital Video Recording,
interactive video shopping, and subscription services. The Debtor
filed for chapter 11 protection on April 14, 2006 (Bankr. N.D.
California Case No. 06-40547). Robert A. Klyman, Esq., at Latham
& Watkins, LLP, and Jonathan S. Shenson, Esq., at Klee, Tuchin,
Bogdanoff & Stern LLP represent the Debtor in its restructuring
efforts. The Debtor's Schedules of Assets and Liabilities showed
$145,282,246 in total assets and $773,033,371 in total
liabilities.
RADNET MANAGEMENT: Radiologix Merger Cues Moody's to Hold Ratings
-----------------------------------------------------------------
Moody's Investors Service changed the outlook on RadNet
Management, Inc.'s debt to positive and affirmed the ratings on
the company's senior secured first lien credit facilities at B3
and its senior secured second lien credit facilities at Caa1.
Moody's concurrently affirmed the company's Corporate Family
Rating at B3 and its speculative grade liquidity rating at SGL-2.
RadNet, is a subsidiary of Primedex Health Systems, Inc.
The rating actions follow Primedex's announcement that it
plans to acquire Dallas-based Radiologix, Inc., an independent
diagnostic imaging company. Primedex will acquire RGX in a cash
and stock transaction valued at the time of the announcement of
approximately $208 million, including net debt.
Ratings affirmed:
* $15 million revolving credit facility due 2011, at B3
* $85 million first lien term loan due 2011, at B3
* $60 million second lien term loan due 2012, at Caa1
* Speculative grade liquidity rating, at SGL-2
* Corporate Family Rating, at B3
* The rating outlook is positive.
Moody's views the proposed combination favorably for several
reasons:
1) the combined entity will have a larger, more diverse
footprint;
2) the merger will improve purchasing leverage of the
combined entity;
3) the combination will afford material cost savings;
4) the transaction combines two companies with a modern
equipment fleet; and
5) the deal will enable the utilization of substantial net
operating loss carryforwards.
Assimilation risk, while considered to be material by Moody's, is
lessened by the fact that the companies employ similar operating
models, occupy complementary footprints in California and will
have an opportunity to save substantial costs through the
reduction of duplicative corporate expenses. As a result of these
factors, Moody's has changed its outlook to positive.
Moody's will comment on the proposed financing for the RGX
acquisition as more details with respect to the financing become
available.
Downward rating pressure could develop if the ratio of adjusted
total debt to EBITDA increases above 7 times or if the ratio of
adjusted free cash flow to debt declines to a level below -2% on a
sustained basis.
Upward rating pressure could materialize if the company is able to
effect a smooth integration of the Radiologix operations and
achieve its cost savings target of $11 million as a result.
Primedex Health Systems, Inc. provides diagnostic imaging services
through a network of 62 fixed-site, free-standing outpatient
imaging centers, consisting of 36 multi-modality and 26 single-
modality facilities, in the state of California.
RADNET MANAGEMENT: Radiologix Merger Cues S&P to Affirm B Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' rating on
RadNet Management Inc. following its parent, Radnet Inc.'s
(previously Primedex Inc.), announcement that it will be
acquiring Radiologix Inc. (B-/Negative/--). The outlook for
RadNet is stable.
At the same time, Standard & Poor's assigned its 'B' debt rating
and '2' recovery rating to the company's $270 million secured
first-lien facility, indicating the expectation of substantial
recovery of principal (80%-100%) in the event of a payment
default. A 'CCC+' debt rating and '5' recovery rating was
assigned to the company's $135 million second-lien facility,
indicating expectations of negligible recovery (0-25%) in the
event of a payment default.
The proceeds will be used to refinance outstanding debt of both
companies. The ratings on Radiologix will be withdrawn upon
completion of the transaction.
"The rating affirmation reflects the greater scale of the combined
entity (132 facilities) and its expanded geographic footprint,"
said Standard & Poor's credit analyst Cheryl Richer. "The
acquisition will bolster Primedex's California market share and
add an East Coast presence."
Notwithstanding a pickup in first-quarter 2006, however,
Radiologix has been experiencing greater competitive pressures and
an uphill battle to drive sales growth. In addition, Primedex is
acquiring a company with greater Medicare reimbursement risk (per
the Deficit Reduction Act of 2005, or DRA) than itself. However,
the acquisition will be financed primarily with cash on hand and
stock and, importantly, the refinancing of the companies' debt
will eliminate the refinancing risk that has been overhanging
Radiologix-$160 million that matures in late 2008.
Los Angeles, California-based RadNet's rating reflects:
* the fragmented and competitive nature of the diagnostic
imaging industry;
* relatively low barriers to entry;
* reimbursement risk; and
* the company's considerable dependence (in California) on an
affiliated entity, Beverly Radiology Medical Group, for its
professional staffing.
These factors overshadow favorable prospects related to the aging
population and the benefits of imaging itself, which can preclude
more expensive medical procedures and aid in the diagnosis of an
increasing variety of disease states. The rating also reflects
high debt leverage (adjusted for operating leases) that had
existed at both companies; Primedex had previously overstretched
its resources and had to restructure its debt in July 2004.
The stable outlook indicates our belief that RadNet will manage
expansion, including debt-financed acquisitions, in a reasonable
manner, and that leverage will not exceed 6x. An aggressive debt-
financed acquisition policy could lead to a downgrade.
In addition, the rating does not anticipate material reimbursement
cuts by commercial payors which, combined with lower scan volumes,
could exert downward pressure on the rating. Due to the current
volatility in the industry, an upgrade is not anticipated within
the next couple of years.
REFCO INC: Wants Court Approval on Fee Committee and Fee Protocol
-----------------------------------------------------------------
Refco Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court
for the Southern District of New York to appoint a fee committee
and approve their proposed fee protocol, pursuant to Section 331
of the Bankruptcy Code.
The Fee Committee will review fee statements submitted by all
professionals retained in the Debtors' Chapter 11 cases for
overall reasonableness and fairness. The Fee Committee will also
review all future interim and final fee applications.
The Fee Committee will reign in the professional costs in the
Chapter 11 cases, Sally McDonald Henry, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, in New York, explains.
As previously reported, 11 bankruptcy professionals have filed
first interim fee applications seeking payment of more than
$33,000,000 in fees and expenses. Due to cash collateral
constraints in the cases of most of the Debtors, the U.S. Trustee
has noted that $2,774,275 has been paid to four professionals.
The Fee Protocol details the Debtors' proposal with respect to:
(a) the purposes for establishing the Fee Committee;
(b) the composition of the Fee Committee;
(c) compensation of certain Fee Committee members;
(d) budget procedures;
(e) procedures for identifying and potentially resolving fee
disputes;
(f) limitations on the Fee Committee's authority; and
(g) exculpation and indemnification provisions for the Fee
Committee members in connection with their performance of
duties on the Fee Committee's behalf.
The Fee Committee will consist of:
1. Harrison J. Goldin, the Debtors' chief executive officer;
2. Marc S. Kirschner, the Chapter 11 Trustee of Refco Capital
Markets, Ltd.;
3. one member appointed by and representative of the Official
Committee of Unsecured Creditors, who is not primarily a
creditor of RCM; and
4. one person appointed by and representative of the United
States Trustee.
As requested by the U.S. Trustee, its representative will be a
non-voting member.
In the event a Fee Committee member resigns, the constituent
group represented by that member may designate a successor
member. The Court may alter the membership of the Fee Committee
at any time.
Messrs. Goldin and Kirschner and the representative of the U.S.
Trustee will not be paid for their services. The other Committee
member will receive $2,000 for each in-person meeting attended
and $500 for each substantive teleconference meeting. All Fee
Committee members will be entitled to reimbursement for
reasonable, documented out-of-pocket costs and expenses from the
estates.
Fee Application Review Process
Pursuant to the Fee Protocol, the Debtors propose to require each
Retained Professional to prepare a budget of the professional
fees it expects to incur over the course of each four-month fee
application period. The budget will include, in reasonable
detail, the services anticipated to be provided over the
application period. To the extent actual fees exceed 25% over
the budgeted fees, the Retained Professional are required to
explain the discrepancy.
After reviewing the fee statements and applications, the Fee
Committee will question any deviations from the budgets submitted
or from the billing guidelines developed by the Fee Committee.
Where appropriate, the Fee Committee will negotiate with the
Retained Professionals regarding their bills.
The Fee Committee will also generate reports, noting disputes the
Fee Committee has with any Retained Professional's fees, which
were unable to be resolved. The reports will be made available
to the Court and appropriate parties-in-interest. The Fee
Committee will not have standing on its own to object to the fees
sought by Retained Professionals.
Fee Examiner
The Fee Committee may retain a fee examiner, subject to Court
approval. The costs of the fee examiner will be reimbursed by
the Debtors' estates.
The fee examiner's role would be limited to providing
quantitative analysis of individual fee applications for the Fee
Committee's review and consideration, but any recommendations or
determinations regarding reasonableness or whether to dispute a
fee statement or application would be determined solely by the
Fee Committee after providing the Retained Professional with an
opportunity to respond to the Fee Committee's concerns.
Chapter 7 Professionals Not Included
The professionals retained by the Chapter 7 trustee for services
to Refco LLC are not subject to the Fee Protocol. Additionally,
in the event the Chapter 11 case of RCM is converted to a case
under Chapter 7 of the Bankruptcy Code, the Chapter 11 Trustee
will resign from the Fee Committee and the Fee Protocol will no
longer apply to RCM's Retained Professionals.
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is
represented by Bingham McCutchen LLP. RCM is Refco's operating
subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue
No. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000).
REFCO INC: Inks Stipulation with Parties on Rule 2004 Motion
------------------------------------------------------------
As reported in the Troubled Company Reporter on July 6, 2006, the
Official Committee of Unsecured Creditors appointed in Refco,
Inc., and its debtor-affiliates cases, asks the U.S. Bankruptcy
Court for the Southern District of New York to compel 22
respondents to produce documents on or before the date that is
30 days after a corresponding subpoena is served.
The 22 Respondents are:
* Arthur Anderson, LLP;
* Delta Flyer Fund, LLC/Eric M. Flanagan;
* Micky Dhillon & the Jasdeep Dhillon Trustee MSD Family Trust;
* Thomas Dittmer;
* Ernst & Young LLP;
* Stephen Grady;
* Thomas Hackl;
* Ingram Micro Inc.;
* Mark Kavanagh;
* Dennis Klejna;
* Levine Jacobs and Co. LLC;
* Eric Lipoff;
* McDermott Will & Emery;
* Joseph Murphy;
* Frank Mutterer;
* Victor Niederhoffer/Niederhoffer Investments Inc.;
* Sean O'Shea and Edward McElwreath;
* PricewaterhouseCoopers, LLP;
* William M. Sexton;
* Philip Silverman;
* Chris Sugrue; and
* David Weaver.
The Committee discloses that, subject to the Rule 2004 Discovery
Motion, it entered into stipulations with:
(1) Dennis Klejna
Dennis Klejna was general counsel of Refco, Inc., and Refco Group
Ltd., LLC. Mr. Klejna is no longer employed by the Debtors and
does not yet know what responsive documentation he will have, if
any.
Mr. Klejna has no objection to the document request so long as
certain unique issues regarding the Debtors' attorney-client
privilege are resolved. He notes that the Debtors may wish to
assert attorney-client privilege as to some or all of the
subpoenaed documents.
The Creditors Committee is willing to permit the Debtors to have
a limited additional period to review documents to determine
whether an assertion of privilege is appropriate.
In a Court-approved stipulation, the Committee agrees that Mr.
Klejna will have 20 days after service of subpoena to produce
documents to either the Committee or the Debtors, through the
Debtors' counsel, with notice to Committee. The Debtors will
have 15 additional days to determine whether or not to assert
attorney-client privilege as to any of the documents.
To the extent that the Debtors do not assert a privilege, the
Debtors agree to promptly transmit the documents to the
Committee. To the extent that the Debtors assert a privilege,
they will be responsible for any appropriate filings or responses
to preserve or assert it -- with notice to Mr. Klejna -- and will
be responsible for providing the documents to the Committee if so
required as a result of any ruling on the privilege issue.
Mr. Klejna will continue to have the same rights as all other
Respondents to assert objections to the subpoenas, all rights
being expressly preserved.
(2) Niederhoffer
The Creditors Committee agrees to withdraw its Rule 2004 Motion
insofar as it seeks discovery from Victor Niederhoffer and
Niederhoffer Investments Inc. The Committee waives no rights or
positions.
In the event that the Committee resubmits a motion for Rule 2004
discovery seeking permission to obtain discovery from
Niederhoffer, Niederhoffer reserves the right to object to that
request.
PwC Responds
PricewaterhouseCoopers LLP does not object to the document
request. PwC, however, needs at least 60 days to produce the
documents the Committee wants. PwC expects that it will be able
to work through to a reasonable solution of the issues with the
Committee's counsel.
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is
represented by Bingham McCutchen LLP. RCM is Refco's operating
subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue
No. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000).
REMOTE DYNAMICS: CEO and Chairman of the Board Resigns
------------------------------------------------------
Remote Dynamics Inc. disclosed on June 30, 2006 that its Chief
Executive Officer and Chairman of the Board of Directors, Dennis
R. Casey, resigned from his position and from the Board of
Directors, to devote more time to family matters.
Also effective June 30, 2006, directors Thomas W. Honeycutt and
Gregg J. Pritchard resigned from their positions on the Company's
Board of Directors.
Neil Read, who is the Company's Vice President, Chief Financial
Officer, Treasurer and Secretary, has assumed the responsibilities
of the Chief Executive Officer on an interim basis, until the
Company's Board of Directors appoints a permanent Chief Executive
Officer.
The Company further disclosed that the Company's Board of
Directors appointed Marshall G. Saffer, age 36, to the Board
effective June 30, 2006. Since March of 2006, Mr. Saffer has
served as the Senior Manager - Business Development for VITEOS
Capital Markets. Previously, Mr. Saffer held senior sales and
marketing positions for SS&C Technologies, DST International and
Financial Models Company. Mr. Saffer holds a Bachelor of
Administration in Psychology degree from Connecticut College.
Based in Richardson, Texas, Minorplanet Systems USA, Inc., nka
Remote Dynamics, Inc. -- http://www.minorplanetusa.com/--
develops and implements mobile communications solutions for
service vehicle fleets, long-haul truck fleets and other
mobile-asset fleets, including integrated voice, data and position
location services. Minorplanet, along with two affiliates, filed
for chapter 11 protection (Bankr. N.D. Texas, Case No. 04-31200)
on February 2, 2004. Omar J. Alaniz, Esq., and Patrick J.
Neligan, Jr., Esq., at Neligan Tarpley Andrews and Foley LLP,
represent the Debtors in their restructuring efforts. When
Minorplanet filed for bankruptcy, it estimated assets and debts at
$10 million to $50 million. The Court confirmed the Debtors'
Third Amended Joint Plan of Reorganization on June 17, 2004.
* * *
As reported in the Troubled Company Reporter on Dec. 29, 2005, BDO
Seidman LLP issued an audit report for the fiscal year ended
Aug. 31, 2005, which expressed an unqualified opinion but included
an explanatory paragraph concerning Remote Dynamics, Inc.'s
ability to continue as a going concern. The auditing firm cited
the company's history of recurring losses from operations and
negative cash flows from operating activities.
RESIDENTIAL ASSET: S&P Downgrades Class B-5 Cert.'s Rating to CCC
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
B-5 certificate from Residential Asset Securitization Trust 2003-
A4 to 'CCC' from 'B'.
At the same time, the 'BB' rating on the class B-4 certificate
from the same transaction is placed on CreditWatch with negative
implications.
The lowered rating reflects actual and projected credit support
percentages that are insufficient to maintain the previous rating.
The current credit support for this class is 0.11%, down 69% from
its original credit support of 0.35%.
The rating on class B-4 is placed on CreditWatch with negative
implications because Standard & Poor's expects additional losses
to result from high delinquencies.
As of the May 2006 distribution date, total delinquencies were
5.49%, with 1.47% categorized as seriously delinquent (90-plus
days, foreclosure, and REO).
Standard & Poor's will continue to closely monitor the performance
of this transaction. If the delinquent loans translate into
realized losses, additional downgrades will be taken, depending on
the size of the losses and remaining credit support.
In contrast, if the delinquent loans decrease without significant
additional realized losses, the rating on class B-4 will be
affirmed and removed from CreditWatch.
The collateral for this transaction consists of a pool of 30-year,
fixed-rate, conventional mortgage loans secured by first liens on
one- to four-family properties.
Rating Lowered:
Residential Asset Securitization Trust 2003-A4
Class To From
----- -- ----
B-5 CCC B
Rating Placed on Creditwatch Negative:
Residential Asset Securitization Trust 2003-A4
Class To From
----- -- ----
B-4 BB/Watch Neg. BB
REYNOLDS AMERICAN: Moody's Rates $1.29 Bil. Senior Notes at Ba2
---------------------------------------------------------------
Moody's Investors Service assigned a rating of Ba2 to Reynolds
American Inc.'s $1.29 billion of new senior secured notes. These
notes were issued in exchange for RAI's subsidiary, RJ Reynolds
Tobacco Holdings Inc.'s senior secured notes as part of a
previously announced exchange offer and consent solicitation.
Moody's recognizes that the new senior secured notes will have
identical terms to the corresponding series of RJR notes exchanged
with respect to principal, interest rates, redemption terms and
maturity dates; however, the new senior secured notes will have
the same collateral package and guarantees as RAI's existing $1.65
billion senior secured notes, rated Ba2, and therefore are rated
the same as these notes. All ratings of RAI are affirmed
including the corporate family rating of Ba2.
Moody's is lowering the rating on the remaining $160 million of
RJR's existing senior unsecured notes that were not tendered under
the exchange offer to B1 reflecting the completion of the exchange
offer and the removal of all restrictive covenants, including
security and the bankruptcy event of default provision. These
notes are now effectively unsecured although the notes will retain
the guarantees of all material subsidiaries.
Moody's notes that this security package, including subsidiary
guarantees, is more favorable than originally expected and
therefore, Moody's has assigned a B1 rating as compared to the B2
rating signaled in the May 18th 2006 press release. RJR's
existing unsecured and unguaranteed notes due 2007-2013, are rated
B2, and are affirmed.
The change in outlook from negative to positive reflects
yesterday's decision by the Florida Supreme Court to decertify the
Engle class and to uphold the 3rd District Court reversal of the
state court jury's award of $145 billion in punitive damages.
The Court did, however, conclude that certain issues decided by
the Engle trial jury may be considered as resolved for any
potential future cases filed by former class members which have a
one year window in which to file individual suits for damages.
Moody's believes that RAI may decide to appeal the Court's
decision regarding the "certain issues" that may be considered as
resolved. In any case, Moody's views this decision as a credit
positive and another step toward lessening the overall risk of
pending tobacco litigation even though this decision may result in
a large number of individual suits being filed by former members
of the Engle class. The potential financial impact of those suits
would be far less than the previously awarded $145 billion in
punitive damages.
These ratings are assigned at Reynolds American Inc.:
* $236.5 million 6.5% notes due 2007, Ba2;
* $185.7 million 7.875% notes due 2009, Ba2;
* $299.3 million 6.5% notes due 2010, Ba2;
* $367.9 million 7.25% notes due 2012, Ba2;
* $199.4 million 7.30% notes due 2015, Ba2.
These ratings are affirmed at Reynolds American Inc.:
* Corporate Family Rating, Ba2
* $1,550 million senior secured guaranteed term loan due 2012,
Ba1;
* $550 million senior secured guaranteed revolving credit
facility due 2011, Ba1
* $1,650 million senior secured guaranteed notes due 2013,2016
and 2018, Ba2
* Speculative Liquidity Rating, SGL-2
These rating actions were taken for the senior unsecured notes
issued by R.J. Reynolds Tobacco Holding Inc.:
* $63.5 million 6.5% notes due 2007, downgraded from
Ba2 to B1;
* $14.3 million 7.875% notes due 2009, downgraded from
Ba2 to B1;
* $0.7 million 6.5% notes due 2010, downgraded from
Ba2 to B1;
* $82.1 million 7.25% notes due 2012, downgraded from
Ba2 to B1;
* $0.6 million 7.30% notes due 2015, downgraded from
Ba2 to B1.
This rating was affirmed at R.J. Reynolds Tobacco Holding Inc.:
* Senior unsecured non-guaranteed bonds due 2007-2013, B2
Based in Winston-Salem, North Carolina, Reynolds American, Inc. is
the parent company of RJR Tobacco Company, the second largest
cigarette company in the United States.
RIVERSTONE NETWORKS: Wants Long-Term Accounts Not Collaterized
--------------------------------------------------------------
Riverstone Networks, Inc., nka RNI Wind Down Corporation, and its
debtor-affiliates ask the U.S. Bankruptcy Court for the District
of Delaware to waive compliance with Section 345 requirements, on
an interim basis, with respect to certain operating accounts until
July 31, 2006, and on a final basis with respect to certain long
term investment accounts.
The Debtors recently sold substantially all of their assets to
Lucent Technologies, Inc. The Debtors' post-sale cash management
system is divided into two primary components. The first
component is a series of accounts with Bank of America. These
accounts maintain a combined balance large enough to cover the
Debtors' remaining monthly expenses, including payroll, which in
general does not exceed $5 million. The Debtors are in the
process of finalizing a collaterization agreement with respect to
the operating accounts.
The second component of the cash management system is a series of
long-term investment accounts maintained with Citigroup, Morgan
Stanley, and Merrill Lynch. These long-term investment accounts
are comprised of low-risk financial instruments, certain
government agency funds, and the United States Treasury bonds.
In the aggregate, the balance maintained in the Long Term
Investment Accounts is around $270 million. The Debtors earn
around $1 million per month in interest income as a results of the
investments maintained in the Long-Term Investment Accounts.
Section 345(a) of the Bankruptcy Code authorizes deposits or
investments of money of a bankruptcy estate, such as cash, in
manner that will "yield the maximum reasonable net return on such
money, taking into account the safety of such deposit of
investment." Section 345(b) of the Bankruptcy Code provides that
the estate must require from the entity with which the money is
deposited or invested a bond in favor of the United States secured
by the undertaking of an adequate corporate surety "unless the
court for cause orders otherwise."
The Debtors have decided on the best structure for their cash
management system, and consistent with this structure, the Debtors
will have the operating accounts collaterized as soon as possible.
The Debtors believe that the 345 requirements as they pertain to
the long term investment should be waived because:
(1) the investments in these accounts will generate around
$400,000 in additional interest over a six-month period
than if placed in a collaterized account;
(2) if forced to transfer the funds in the long term investment
accounts to a collaterized account, the Debtors will be
forced to incur early withdrawal penalties of around
$800,000;
(3) the investments contained in these accounts are low-risk
financial instruments with high ratings; and
(4) these accounts are populated by a wide variety of
investments, and as such, even in the unlikely event that
there is a loss of value in one investment, such loss would
be contained to that investments, and there would only be a
de minimis negative impact on the overall value of the
Debtors' estates.
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. Kerri K. Mumford, Esq., at Landis Rath &
Cobb LLP, represents the Official Committee of Unsecured
Creditors. The firm Brown Rudnick Berlack Israels LLP serves as
counsel to the Official Committee of Equity Security Holders. As
of Dec. 24, 2005, the Debtors reported assets totaling $98,341,134
and debts totaling $130,071,947. The Plan is scheduled for review
by the Bankruptcy Court in mid-September and distributions to
creditors and stockholders are expected to be made by the end of
September.
SILICON GRAPHICS: Wants $1.3 Mil. Cap Increased to $1.65 Million
----------------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York's authority
to increase the $1,300,000 payment cap to $1,650,000.
As reported in the Troubled Company Reporter on May 26, 2006, the
Court authorized the Debtors to pay prepetition obligations up to
an aggregate of $1,300,000.
Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New
York, explains that the Debtors' based the $1,300,000 estimate on
prepetition invoices for Delivery Charges remitted to them as of
the Petition Date, which did not include amounts that:
(i) had yet to be billed to the Debtors by the Common
Carriers, Customs Brokers and Facility Providers and paid
by Software Solutions Unlimited, Inc., on the Debtors'
behalf; and
(ii) had yet to be billed by Software Solutions due to its
payment of the outstanding Delivery Charges on the
Debtors' behalf.
Mr. Waisman tells the Court that the Debtors have become aware of
additional outstanding prepetition Delivery Charges for $350,000.
Majority of the outstanding $350,000 is owed SSI on account of
invoices billed to the Debtors after the Petition Date by several
United Parcel Services entities, DHL Worldwide Express and Danzas
DHL Freight, who each hold a significant portion of the Debtors'
spare parts inventory in over 100 locations worldwide.
Mr. Waisman asserts that the satisfaction of obligations owed in
respect of the prepetition Delivery Charges will allow the Debtors
to minimize costs and comply with customer deadlines.
Mr. Waisman emphasizes that any obstruction of the Debtors'
ability to obtain or access goods and services required in their
ordinary course of business will result in their inability to
operate efficiently and will have a significantly damaging effect
on their restructuring efforts.
About Silicon Graphics
Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance
computing. SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data. The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602. (Silicon Graphics Bankruptcy News,
Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SILICON GRAPHICS: Wants Contract Surcharges Paid
------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
authority to remit the amounts they hold on account of the
Industrial Fund Fees and Scientific & Engineering Workstation
Procurement Surcharges to the General Services Administration and
National Aeronautics and Space Administration.
Silicon Graphics participates in United States government-
sponsored programs that enable federal agencies to procure
technology services and products from vendors like SGI. SGI has
been awarded:
(i) the General Services Administration Multiple Award
Schedule contract, administered by the Federal Supply
Service; and
(ii) the Scientific & Engineering Workstation Procurement III
contract, a Government-Wide Acquisition Contract
administered by the National Aeronautics and Space
Administration.
Under the Contracts, federal agencies and other similar customers
use a streamlined process to procure technology supplies and
services at discounted prices and rates. In addition to discounts
on products and services, participating in the programs affords
customers other benefits like expedited delivery, a simplified
procurement process, and easy access to state-of-the-art supplies.
By participating in the programs that manage the Contracts, SGI is
able to market its products to a broad range of potential federal
customers -- thereby increasing its total annual revenues. The
work and sales generated under the Contracts represent a
significant part of SGI's business, representing approximately
$74,000,000 in annual revenue.
GSA Contract Industrial Fund Fee
Federal agencies and other customers that procure supplies or
services through a GSA Contract pay an Industrial Fund Fee
mandated by 48 C.F.R. 552-238.74. The IFF represents a percentage
-- currently 0.75% -- of the total sales made under the GSA
Contract to a particular customer. The percentage is set at the
discretion of the GSA, which has the unilateral right to change
the amount at any time, but not more than once per year.
The purpose of the IFF is to reimburse the GSA for costs of
operating the Federal Supply Schedules Program.
If the contractor fails to remit the IFF within 30 calendar days
after the end of the applicable reporting period, the United
States government may terminate the GSA Contract for cause.
As mandated by the Code of Federal Regulations, SGI includes the
IFF as part of each customer's purchase price. Each time a
customer orders against a GSA contract, SGI lowers the customer's
discount -- from the prenegotiated GSA discount -- by the 0.75%
current IFF rate. In this sense, the customer pays the IFF by
paying 0.75% more than the pre-negotiated prices
At the end of each quarter, SGI totals the value of GSA Contract
orders invoiced and remits to the GSA the total IFFs collected.
As of the Petition Date, the Debtors were holding approximately
$50,000 in respect of the IFFs collected from counterparties to
the Debtors' GSA Contracts.
SEWP Surcharge
SGI customers under a SEWP Contract also pay a handling fee for
use of the SEWP Contract. The SEWP Surcharge cannot exceed 0.65%
of the total price of orders placed under the SEWP Contract.
The SEWP Surcharge is included as a separate line item on the
customer's purchase order. Like the IFF, the contractor is
charged with collecting the SEWP Surcharge on NASA's behalf. At
the end of every quarter, the contractor must send:
(i) the SEWP Surcharges collected during the quarter to the
NASA/Goddard Space Flight Center, SEWP; and
(ii) an "Agency Administrative Handling Fees Collected" report
to the SEWP Program Office.
The contractor is required to forward those SEWP Surcharges that
actually are collected from its customers, and is not held
responsible for a customer's failure to remit the SEWP Surcharges.
If a customer fails to remit its SEWP Surcharge, the contractor is
simply charged with advising its SEWP representative of the
customer's nonpayment.
As of the Petition Date, the Debtors were holding approximately
$25,000 in respect of outstanding SEWP Surcharges collected from
counterparties to the Debtors' SEWP Contracts.
Debtors Want to Pay Surcharges
The contract surcharges currently held by the Debtors are not
property of the Debtors' estates and can, therefore, be remitted
to NASA and the GSA, as applicable, Shai Y. Waisman, Esq., at
Weil, Gotshal & Manges LLP, in New York, tells Judge Lifland.
The Debtors do not have legal or equitable interest in the
Surcharges, he says. The Debtors hold the Surcharges in
constructive trust.
Mr. Waisman explains that the Surcharges do not reflect payment
for goods or services rendered to the Debtors by the GSA and
NASA; instead, they are handling fees owed by the Debtors'
customers to the GSA and NASA. In transmitting the fees, the
Debtors act merely as conduits on the customers' behalf.
About Silicon Graphics
Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance
computing. SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data. The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602. (Silicon Graphics Bankruptcy News,
Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SAINT VINCENTS: Can Access CCC's Cash Collateral Until August 18
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the stipulation between the Debtors and Comprehensive
Cancer Corporation of New York extending the Debtors' use of CCC's
cash collateral through and including Aug. 18, 2006.
As reported in the Troubled Company Reporter on Sept. 22, 2005,
the Debtors and the CCC are parties to a Second Amended and
Restated Consulting and Administrative Services Agreement dated
April 11, 1996, wherein:
(a) the CCC provides development, consulting, administrative,
and other services to SVCMC with respect to the operation
of its outpatient cancer center at 111 Eight Avenue, in
New York.
(b) the CCC acquires all equipment, furnishings and supplies
necessary for the operation of the Cancer Center and makes
the equipment available to SVCMC for the provision of the
Cancer Center's patient care and treatment.
(c) the CCC, on behalf of SVCMC and as its agent, bills in
SVCMC's name and collects from the Cancer Center patients
and responsible third parties for services provided by the
Cancer Center.
(d) to secure the payment of fees due to the CCC under the
Agreement, SVCMC grants CCC a security interest in
substantially all revenue generated by the Cancer Center.
On May 21, 2004, the Debtors entered into a $100 million Loan
Agreement with HFG HealthCo-4 LLC, pursuant to which SVCMC
granted a security interest to HFG in substantially all of
SVCMC's receivables, including the CCC Receivables.
In connection with the prepetition Loan Agreement, HFG and the CCC
entered into an Intercreditor Agreement pursuant to which HFG
agreed that, notwithstanding the date, manner, or order of
perfection of the security interests granted to the parties, the
CCC's lien on the CCC Receivables was first, prior, and senior to
HFG's liens on the CCC Receivables.
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. 28
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SAINT VINCENTS: Alston to Serve as Panel's Substitute Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized the Official Committee of Unsecured Creditors appointed
in Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates chapter 11 cases to retain Alston & Bird as its
substitute counsel, effective as of March 16, 2006.
As reported in the Troubled Company Reporter on June 9, 2006, the
Committee initially retained Thelen Reid & Priest LLP as its
counsel. On March 16, 2006, the primary attorneys at Thelen Reid
representing the Committee, Martin Bunin, Esq., and Craig Freeman,
Esq., commenced working at Alston & Bird.
Alston & Bird will act as the Committee's primary spokesman. The
firm will also assist, advise, and represent the Committee with
respect to:
(a) the administration of the Debtors' bankruptcy cases and
the exercise of oversight with respect to the Debtors'
affairs, including all issues arising from or impacting
the Debtors or the Committee in the Debtors' Chapter 11
cases;
(b) the preparation on behalf of the Committee of all
necessary applications, motions, orders, reports and other
legal papers;
(c) appearances in the Bankruptcy Court to represent the
Committee's interests;
(d) the negotiation, formulation, drafting, and confirmation
of any plan of reorganization or liquidation and related
matters;
(e) the exercise of oversight with respect to any transfer,
pledge, conveyance, sale or other liquidation of the
Debtors' assets;
(f) the investigation, if any, as the Committee may desire
concerning, among other things, the assets, liabilities,
financial condition, and operating issues concerning the
Debtors that may be relevant to their bankruptcy cases;
(g) the communication with the Committee's constituents and
others, as the Committee may consider desirable in
furtherance of its responsibilities; and
(h) the performance of all of the Committee's duties and
powers under the Bankruptcy Code and the Bankruptcy Rules
and the performance of other services as are in the
interests of those represented by the Committee or as may
be ordered by the Court.
Alston & Bird's hourly rates are:
Professional Hourly Rate
------------ -----------
Partner $360 to $725
Counsel $335 to $795
Associate $195 to $470
Paralegal $110 to $285
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. 28
Bankruptcy Creditors' Service, Inc., 215/945-7000)
TITAN CRUISE: Florida Court Approves Amended Disclosure Statement
-----------------------------------------------------------------
The Hon. Alexander L. Paskay of the U.S. Bankruptcy Court for the
Middle District of Florida approved the Amended Disclosure
Statement explaining the Joint Plan of Reorganization filed by
Titan Cruise Lines and Ocean Jewel Casino & Entertainment, Inc.
The Court determined that the Disclosure Statement contained
adequate information -- the right amount of the right kind
necessary for creditors to make informed decisions -- as required
by Section 1125 of the Bankruptcy Code.
Assets Sold
On Jan. 11, 2006, Titan obtained Court approval for the sale of
substantially all of its assets, including:
-- the Ocean Jewel;
-- the "Sapphire Express," a catamaran shuttle that was
formerly used in the Debtors' business operations;
-- a loading barge; and
-- related office and computer equipment, inventory, and
supplies
for a total price of $7.2 million.
The purchase price was later modified to $6.7 million due to a
post-auction casualty adjustments required by the partial sinking
of the Sapphire Express prior to the closing of the sale.
Pursuant to the Sale Order and Sale Modification Order, the
Debtors created two separate funds from the sale proceeds:
a) Carve-Out Fund of $1.2 million from which to pay the
broker's expenses, unsecured administrative claims, the
costs of closing the estate, and to pay a distribution on
unsecured prepetition claims through a plan of liquidation;
and
b) Secured Creditor Fund of $5.6 million from which all pre and
postpetition maritime lien claims and other allowed secured
claims will be satisfied.
Treatment of Claims
Under the Debtors' Plan, holders of administrative claims,
priority tax claims and priority claims will be paid in full.
Each Holder of Tax Lien Claims will be paid in full upon the
Distribution Date, unless that claim is a disputed tax line claim,
which will be paid upon entry of final order allowing that claim.
The Plan provides that holders of Secured Maritime Claims and
First American Bank, the Debtors' secured lender, will be paid
from the Secured Creditor Fund. Allowed Secured Maritime claims
will be paid in full on the Distribution Date from the sale
proceeds of the specific vessel(s) to which their lien attaches,
unless otherwise agreed by the Debtors, holder of Allowed Secured
Maritime claim and First American Bank.
Unsecured Claim holders will receive a Pro Rate distribution of
the remainder of Carve-Out Fund after paying expenses of the
Debtors, and paying the creditors holding allowed administrative
claims, allowed priority tax claims, and allowed priority claims.
Equity Interests holders will have their interests canceled on the
Effective Date of the Plan.
Judge Paskay will convene a hearing on Aug. 17, 2006, at 10:00
a.m., to consider confirmation of the Debtors' Joint Chapter 11
Plan of Reorganization.
Headquartered in Saint Petersburg, Florida, Titan Cruise Lines and
its subsidiary owns and operates an offshore casino gaming
operation. The Company and its subsidiary filed for chapter 11
protection on August 1, 2005 (Bankr. M.D. Fla. Case Nos. 05-15154
and 05-15188). Gregory M. McCoskey, Esq., at Glenn Rasmussen &
Fogarty, P.A., represents the Debtors in their restructuring
efforts. No Official Committee of Unsecured Creditors has been
appointed in the Debtors' cases. When the Debtors filed for
protection from their creditors, they estimated assets and debts
between $10 million to $50 million.
USA COMMERCIAL: Wants to Allot $93MM of Funds to Direct Lenders
---------------------------------------------------------------
On July 10, 2006, USA Commercial Mortgage Company filed a motion
with the U.S. Bankruptcy Court requesting an order authorizing
USACM to distribute certain funds held in USACM's collection
account to direct lenders, and authorizing the USA Capital
Diversified Trust Deed Fund, LLC to further distribute certain
funds to their respective fund members.
The motion is scheduled to be heard in U.S. Bankruptcy Court in
Las Vegas on Aug. 4, 2006.
Collection Accounts
USACM will mail account statements to direct lenders showing, as
of April 13, 2006, the position of each direct lender with respect
to each of the serviced loans in which the direct lender invested.
Statements showing direct lender positions through June 30, 2006
are intended to be mailed on or about July 14, 2006. Similar
statements for Fund members are being mailed as well.
USACM had $93 million in its collection account as of June 30,
2006, including about $14 million in interest collected
postpetition on nonperforming loans and $60 million collected
post-petition in loan principal repayments. USACM had $9 million
in its loan servicing collection account as of April 12, 2006.
USACM suspended payments to all 3,600 direct lenders, and 3,200
fund members on April 13, 2006 when the company and its affiliates
filed for reorganization under Chapter 11.
"It has been the highest priority of the Mesirow team and the
post-petition USACM management and staff to resume payments to
investors who are owed money from loans serviced by USACM," said
Thomas J. Allison, president and chief restructuring officer of
USACM. "We still have a lot of work to do, but we believe this is
a major step toward restoring the confidence of all interested
parties that our restructuring efforts will be successful. We
will be ready to begin mailing checks as soon as we have court
approval."
The proposed total amount to be distributed by USACM will be
disclosed in a supplemental filing on or before July 14, 2006.
Proposed Distribution Plan
The aggregate proposed distribution amount will be the sum of the
amounts proposed to be distributed to each Direct Lender by
account number (legal vesting name), which in turn will be the net
of the amounts shown on Line 12 of the Direct Lender Statements
for each Direct Lender by account number. Line 12 shows the net
amount per loan due to or from each Direct Lender based on whether
USACM is holding collected funds to be paid to the Direct Lender,
or funds overpaid to the Direct Lender by USACM that USACM did not
receive from the Borrower.
USACM has disclosed repeatedly in court since its Chapter 11
filing that USACM paid interest to its investors on all loans
every month whether the loan was performing or nonperforming, and
the company utilized principal payoffs on some loans to fund
interest payments to all investors.
An example of the proposed netting would be if a particular Direct
Lender invested in five different loans under a single vesting
name, the amounts (which may be positive or negative) shown on
Line 12 of each of the five Direct Lender Statements for that
vesting name will be netted together and the resulting amount, if
positive, will be distributed to the Direct Lender.
In USACM's prepetition loan servicing system, USACM assigned a
unique account number to each Direct Lender for each discrete
legal "vesting" name through which the Direct Lender invested.
For example, "John Doe" would have a different account number and
is considered a different vesting name than "John Doe IRA" or
"John Doe, Trustee of the Doe Family Trust." John Doe may have
invested individually in several loans, and his interest in each
loan would be under the same account number, but he also may have
invested in loans through other legal vesting names, and each
distinct vesting name would have a distinct account number.
The Funds also seek permission to distribute a portion of the
funds that will become property of their respective estates after
the distributions are received by the Funds in their capacity as
Direct Lenders. Each Fund would reserve amounts sufficient to pay
scheduled claims against their respective estates and estimated
unpaid administrative expenses of the estate, and would distribute
the excess amount pro rata to Fund Members in accordance with the
share ownership indicated on the Fund Member Statements.
USACM also seeks authority to make monthly distributions on a
regular basis, after deducting USACM's servicing fees and other
fees and costs it is entitled to charge and after netting amounts
that may still be owed from those Direct Lenders on a vesting-name
basis. The Funds also seek authority to make monthly
distributions on a regular basis based on their pro rata share of
the funds available for distribution in excess of appropriate
reserves for scheduled claims and administrative expenses.
Related to monthly distributions, USACM also seeks authority to
accept loan payment proceeds from borrowers and provide partial or
full releases of collateral on an ongoing basis, and to disburse
funds that USACM thereby receives into its collection account to
the Direct Lenders to which such loan payment proceeds are due and
payable.
A full-text copy of the Motion to Distribute Funds is available
for free at http://ResearchArchives.com/t/s?d85
USA Commercial Mortgage
Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba
USA Capital (USACM) -- http://www.usacapitalcorp.com/-- provides
more than $1 billion in short-term and permanent financing to
homebuilders, commercial developers, apartment owners and
institutions nationwide. The Company and its debtor-affiliates
filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev.
Case Nos. 06-10725 to 06-10729). Lenard E. Schwartzer, Esq., at
Schwartzer & Mcpherson Law Firm, represents the Debtors. Candace
C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea & Carlyon,
Ltd., represent the Debtors' Investor Committees. When the
Debtors filed for protection from their creditors, they estimated
assets of more than $100 million and debts between $10 million and
$50 million.
VALOR COMMS: Dividends Will Be Paid to July 14 Record Shareholders
------------------------------------------------------------------
The Board of Directors of VALOR Communications Group, Inc.
declared a pro-rated dividend of $0.07 per share of common stock
for the third quarter of 2006 for shareholders of record on
July 14, 2006. The dividend is payable on July 28, 2006 and
represents the current quarterly dividend rate of $0.36 pro-rated
from July 1 through July 17, 2006.
Headquartered in Irving, Texas, VALOR Communications Group (NYSE:
VCG) -- http://www.valortelecom.com/-- is one of the largest
providers of telecommunications services in rural communities in
the southwestern United States. The company, through its
subsidiary VALOR Telecom, offers to residential, business and
government customers a wide range of telecommunications services,
including: local exchange telephone services, which covers basic
dial-tone service as well as enhanced services, such as caller
identification, voicemail and call waiting; long distance
services; and data services, such as providing digital subscriber
lines.
* * *
As reported in the Troubled Company Reporter on June 8, 2006,
Standard & Poor's Ratings Services held its ratings on Valor
Communications Group Inc., including the 'BB-' corporate credit
rating, on CreditWatch, where they were placed with positive
implications on Dec. 9, 2005.
VILLAJE DEL RIO: Wants Thomas Kemmy as Special Litigation Counsel
-----------------------------------------------------------------
Villaje Del Rio, Ltd., asks the Honorable Leif M. Clark of the
U.S. Bankruptcy Court for the Western District of Texas in San
Antonio for permission to employ Thomas Kemmy, Esq., and his law
firm -- Law Offices of Thomas Kemmy -- as its special counsel.
The Debtor is the plaintiff in Adv. No. 06-5090, styled "Villaje
Del Rio, Ltd. v. Colina Del Rio, LP, et al.," which is an action
removed from the Bexar County, Texas District Court.
Prior to removal, Mr. Kemmy represented the Debtor. The Debtor
wants Mr. Kemmy, along with the Debtor's counsel, Hohmann, Taube &
Summers, LLP, to continue representing it in connection with the
lawsuit.
Mr. Kemmy and his firm will:
(a) represent the Debtor in connection with the claims and
causes of action in the adversary proceeding, and
(b) provide advise to the Debtor regarding the conduct of the
litigation, and
(c) assist in other court hearings where the matters involved
in the adversary are at issue.
Mr. Kemmy has agreed to represent the Debtor on an hourly basis,
at the rate of $300 per hour, plus expenses. George Geis, the
manager of the Debtor, individually guaranteed the payment to Mr.
Kemmy.
Mr. Kemmy assured the Court that he and his firm do not have any
interest adverse to the Debtor.
The special counsel can be contacted at:
Thomas Kemmy, Esq.
Law Offices of Thomas Kemmy
322 West Woodlawn Avenue
San Antonio, TX 78212
Headquartered in San Antonio, Texas, Villaje Del Rio, Ltd., is a
real estate developer. The company filed for chapter 11
protection on May 1, 2006 (Bankr. W.D. Tex. Case No. 06-50797).
Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P.,
represents the Debtor. No Official Committee of Unsecured
Creditors has been appointed in the Debtor's case. When the
Debtor filed for protection from its creditors, it estimated
assets of less the $50,000 and estimated debts between $10 million
and $50 million.
WHERIFY WIRELESS: March 31 Balance Sheet Upside Down at $8.7 Mil.
-----------------------------------------------------------------
Wherify Wireless, Inc., incurred a $7.6 million net loss on
$20,272 of revenues for the three months ended March 31, 2006,
compared to a $4.1 million net loss on zero revenue for the same
period in 2005.
As of March 31, 2006, the Company's balance sheet showed $11.2
million of total assets and $19.9 million of total liabilities,
resulting in an $8.7 million stockholders' deficit.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?d73
Going Concern Doubt
Malone & Bailey, PC, expressed substantial doubt about Wherify's
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal year ended June 30,
2005. The auditing firm pointed to the Company's recurring losses
from operations and insufficient working capital to meet its
operating needs.
Based in Redwood Shores, California, Wherify Wireless, Inc., --
http://www.wherifywireless.com/-- develops patented wireless
location products and services for family safety, communications,
and law enforcement. The company's portfolio of intellectual
property includes its proprietary integration of the US
Government's Global Positioning System and wireless communication
technologies; its patented back-end location service; the
Wherifone(TM) GPS locator phone which provides real-time location
information and lets families with pre-teens, seniors, or those
with special needs, stay connected and in contact with each other;
and its FACES(R) industry-leading facial composite technology,
which is currently being used by thousands of public safety
agencies worldwide.
WHITE RIVER: Court Approves $40 Million DIP Credit Facility
-----------------------------------------------------------
The Hon. Basil H. Lorch of the U.S. Bankruptcy Court for the
Southern District of Indiana in Evansville authorized White River
Coal, Inc., and its debtor-affiliates to:
-- obtain senior secured superpriority debtor-in-
possession credit from a syndicate of financial
institutions and Standard Bank Plc, as Administrative
Agent; and
-- use cash collateral securing repayment of approximately
$35 million of prepetition obligations owed to Standard
Bank.
Pursuant to Judge Lorch's final order, the Debtors now have access
to up to $40 million of postpetition secured credit from Standard
Bank. The Debtors are authorized to use up to $5 million of the
DIP loans solely for working capital, capital expenditures, and
other general corporate purposes. Remaining amounts under the DIP
facility will be used to repay all of the Debtors' outstanding
obligations under the prepetition loan agreements with Standard
Bank.
As security for the DIP Obligations, Standard Bank, on behalf of
the DIP lenders, is granted a first lien on all of the Debtors'
unencumbered property and a junior lien on property that is
subject to valid, perfected, and unavoidable liens. In addition
to the DIP Liens, all obligations under the DIP loan agreement
will constitute an allowed administrative expense claim with
priority, subject only to a carve-out. The carve-out will cover
payments for:
-- all allowed professional fees and disbursements that are
incurred by professionals retained by the Debtors or a
statutory committee of unsecured creditors prior to the
delivery by Standard bank of an Enforcement Notice;
-- the lesser of $150,000 and the amount of allowed fees and
expenses of Case Professionals that are incurred after the
delivery of the Enforcement Notice; and
-- the aggregate amount of all fees pursuant to Section 1930,
Tile 28 of the U.S. Code and any fees payable to the
clerk of the Bankruptcy Court.
To protect against any diminution in the value of its interest
owing the Debtors' use of its prepetition collateral, Standard
Bank is granted a replacement security interest in and lien upon
all of the Debtors' assets subject only to the security interests
and liens granted for the DIP lenders and the Carve-Out.
Based in Hazleton, Indiana, White River Coal, Inc., operates a
mining company. The Company and its affiliates filed for chapter
11 protection on May 22, 2006 (Bankr. S.D. Ind. Case Nos. 06-70375
through 06-70379). C.R. Bowles, Jr., Esq., at Greenbaum Doll &
McDonald PLLC, represents the Debtors in their restructuring
efforts. When the Debtor filed for protection from their
creditors, they listed assets totaling $2 million and debts
totaling $35 million.
WINN-DIXIE: Wants to Amend Two Schedules to Disallow 93 Claims
--------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Middle District of Florida, under Rules
1009 and 9014 of the Federal Rules of Bankruptcy Procedure, to
deem their schedules of assets and liabilities and schedules of
executory contracts and unexpired leases amended to disallow,
reduce or reclassify 93 scheduled claims.
A. No Liability Claims
The Debtors have identified 14 scheduled claims that their books
and records reflect as zero balance claims, as a result of:
(a) prepetition payments that were not reflected in their
books and records at the time the Schedules were filed; or
(b) the correction of erroneous entries in the books and
records that were scheduled as claims.
The Debtors ask the Court to disallow these No Liability
Scheduled Claims:
Claimant Claim No.
-------- ---------
Anderson News LLC 35573
BVI DBA Primed Wetumpka 33320
Collins & Aikman 33472
Collins Pointe Shopping Center 36167
Finazzle Corporation USA 34830
Folmar & Associates 36314
Gravlee, Macon 36532
JDN Realty Corporation 31015
Marlin Leasing Corp. 32787
Nativa Foods 35158
Ocala Star Banner 31300
Royal & Son 31489
Spartanburg Coca-Cola Bottling 34183
Spartanburg Coca-Cola Bottling 36810
B. Overstated Claims
Upon review of their books and records, the Debtors have also
identified 50 overstated scheduled claims aggregating $4,191,194.
The Overstated Scheduled Claims include:
Reduced
Claimant Claim Amount Claim Amount
-------- ------------ ------------
Birchwood Foods $293,248 $5,712
Chattem, Inc. 152,743 142,743
Citi Systems Leasing 152,825 101,883
Fieldale Farms Corp. 159,961 85,968
Krispy Kreme, NC 229,823 88,909
Krispy Kreme, FL 101,300 84,882
Safe Harbor Seafood 1,265,923 1,107,305
Schwan's Sales Enterprises 240,279 105,349
Wise Foods, Inc. 153,461 82,017
James H. Post, Esq., at Smith Hulsey & Busey in Jacksonville,
Florida, asserts that the Overstated Scheduled Claims should be
reduced to account for:
(a) postpetition payments made on account of prepetition
claims pursuant to a Court order;
(b) postpetition amounts due to the claimants that were
inadvertently included in the Overstated Scheduled Claims;
(c) accounts payable credits and accounts receivable balances
due to the Debtors; or
(d) amounts that are otherwise no longer reflected as
liabilities on the books and records.
Mr. Post adds that certain Overstated Scheduled Claims were based
on the same invoices as the reclamation demands submitted by the
Debtors' suppliers and vendors, thereby partially duplicating the
reclamation claims.
The Debtors and the reclamation vendors have previously agreed to
allowed reclamation claims pursuant to a reclamation trade lien
program. The Debtors ask the Court to reduce these Overstated
Scheduled Claims by the agreed amounts.
C. Misclassified Claims.
The Debtors have identified 29 scheduled claims that are based in
part on the same invoices as the reclamation demands submitted by
the Debtors' suppliers and vendors. As a result, the scheduled
claims partially duplicate the reclamation demands. The Debtors
and the reclamation vendors have previously agreed to their
respective allowed reclamation claims.
The Debtors ask the Court to reclassify the claims as
administrative priority claims, to the extent of the allowed
reclamation claims, with the remainder of the proposed reduced
claim amounts to remain classified as unsecured non-priority
claims.
The Misclassified Scheduled Claims, aggregating $3,222,197,
include:
Claimant Claim No. Claim Amount
-------- --------- ------------
Chloe Foods Corp. 34685 $215,467
Coty US, Inc. 34727 123,178
Gold Kist, Inc. 34888 149,527
Pacific Coast Producers 35212 207,964
Reynolds Metals Co. 35785 166,014
Schwan's Bakery, Inc. 35343 510,795
Silver Eagle Dist. Key West 32203 370,800
St. John's Beverage Co. 35396 313,692
Swift & Co. 35430 194,282
Wenner Bread Products, Inc. 35534 238,149
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Wants to Assume 512 Store and Office Leases
-------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Middle District of Florida
to assume 512 store leases, and related fuel centers and office
leases effective as of the effective date of their reorganization
plan.
The stores, fuel centers, offices and warehouses are located in
Alabama, Florida, Georgia, Louisiana, Mississippi, North
Carolina, and South Carolina.
A list of the Core Leases is available for free at
http://ResearchArchives.com/t/s?d64
http://bankrupt.com/misc/WnDxi_Core_Leases.pdf
The Debtors intend to continue to operate all the stores under
the Core Leases once they emerge from bankruptcy protection,
according to Cynthia C. Jackson, Esq., at Smith Hulsey & Busey,
in Jacksonville, Florida.
To the extent any default exists under any of the Core Leases,
the Debtors intend to pay the landlords the necessary cure
amounts, if any, promptly after the Effective Date.
The Landlords have until July 30, 2006, to object to the Cure
Amounts or otherwise object to the Debtors' request.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000).
XPLORE TECH: Closes Series A Preferred Share Financing
------------------------------------------------------
Xplore Technologies Corp. issued 2,920,585 Series A Preferred
Shares on a private placement basis for gross proceeds to the
Company of $993,000.
The Series A Preferred Shares issued in this private placement
have the same rights and preferences as the 55,520,542 Series A
Preferred Shares issued in connection with the consummation of the
Company's recapitalization. The Series A Preferred Shares
initially convert on a one-for-one basis into common shares of the
Company at any time at the option of the holder, subject to
adjustment for stock dividends, splits, combinations and similar
events. The Series A Preferred Shares carry a cumulative 5%
dividend that may be paid in stock, contain voting rights
consistent with the Company's common shares, and have certain
protective provisions, liquidation preferences and conversion
features.
Pursuant to the terms and conditions of the exchange and purchase
agreement dated April 21, 2006, as amended, between the Company,
Xplore Technologies Corporation of America, Phoenix Enterprises
LLC, Phoenix Venture Fund LLC and each of the other lenders listed
on Schedule 1 thereto, Phoenix and its assignees are entitled to
purchase from the Company at any time prior to July 31, 2006 up to
an additional 8,844,120 Series A Preferred Shares at $0.34 per
share.
About Xplore Technologies
Based in Austin, Texas, Xplore Technologies Corp. (TSX:XPL) --
http://www.xploretech.com/-- engineers, manufactures, markets and
supports rugged mobile wireless computing systems. With corporate
offices in Helsinki, Finland, Xplore offers the broadest
ruggedized wireless Tablet PC computer portfolio in the market.
Xplore's geographical markets continue to expand on a worldwide
basis, with channel partners in the United States, Canada, Europe
and Asia Pacific.
At March 31, 2006, The Company's balance sheet showed a
stockholders' deficit of $14,495,000, compared to a $10,587,000
deficit at March 31, 2005.
* Sheppard Mullin Hires D. Geneson as Partner in Washington D.C.
----------------------------------------------------------------
David F. Geneson has joined the Washington, D.C. office of
Sheppard, Mullin, Richter & Hampton LLP as a partner in the White
Collar and Civil Fraud Defense practice group. Mr. Geneson most
recently practiced with Hunton & Williams in Washington, D.C.
Geneson's practice focuses on white-collar criminal defense and
civil enforcement litigation. His areas of experience include:
numerous significant federal and state criminal and civil trials;
domestic and international internal investigations; Securities and
Exchange Commission investigations and enforcement proceedings;
criminal and civil environmental enforcement; Medicare and
Medicaid fraud; litigation of monetary transactions, including tax
and securities transactions; customs inquiries; civil and criminal
forfeiture proceedings; Independent Counsel and Congressional
inquires; and proceedings before international tribunals.
Prior to private practice, Mr. Geneson practiced law publicly for
15 years as a federal prosecutor in the following positions
Assistant United States Attorney, District of Columbia 1984-1990;
Senior Trial Attorney, Fraud Section, Criminal Division of the
U.S. Department of Justice, 1978-1984; Assistant United States
Attorney, Southern District of Florida, 1975-1977.
"David is a perfect fit for Sheppard Mullin," said Guy Halgren,
chairman of the firm. "His impressive skills and experience
complement our strong national White Collar group. We anticipate
continued growth in this key practice area."
Bob Rose, chair of the practice group, added, "David is a veteran
prosecutor with extensive federal court trial experience who knows
the inner workings of government. He brings additional strength
to our practice and extends our ability to deliver representation
connected to federal criminal matters."
Mr. Geneson has conducted numerous internal investigations in the
U.S. and abroad, both to identify and deal with financial fraud
and abuse, and to defend against regulatory and criminal
investigations. He has represented corporations and corporate
officials in Medicare, Medicaid and qui tam matters including
obtaining the acquittal of a senior corporate officer of the
largest hospital holding company in the U.S. after a multi-month
trial relating to alleged Medicare fraud and abuse. Mr. Geneson
has represented companies in environmental investigations,
including obtaining uniquely successful results in a federal grand
jury investigation and subsequent DOJ enforcement action against
the largest oil pipeline in the country.
Mr. Geneson represented corporations and corporate officials in
grand jury proceedings and enforcement matters, including
successfully representing the largest chemical company in the
world in parallel multidistrict enforcement cases alleging
billions of dollars in potential penalties. He represented one of
the largest electronics companies in the world in international
investigations and numerous proceedings, including a uniquely
successful defense of a multi-million dollar federal trial named
as one of the "Top Twenty Defense Wins" by the National Law
Journal. Mr. Geneson represented both a senior political official
and a foreign government in proceedings before the International
Criminal Tribunal for the former Yugoslavia.
Additionally, Mr. Geneson represented various political officials
and others during Independent Counsel and Congressional
investigations. As a federal prosecutor, he prosecuted Israeli
spies Jonathan and Anne Pollard; prosecuted Chilean Army Major
Armando Fernandez Larios in connection with the assassination of
ambassador Orlando Letelier; prosecuted Deputy Mayor of
Washington, D.C., Ivanhoe Donaldson for fraud and corruption;
prosecuted the Director and Deputy Director of INTELSAT and others
for a multi-million dollar fraud scheme; prosecuted the largest
tax shelter cases brought by the Tax Division of the Department of
Justice; and received numerous awards from the Department of
Justice and various federal law enforcement agencies.
Mr. Geneson earned his law degree from University of Miami School
of Law in 1974 and graduated from Rensselaer Polytechnic
Institute, with a B.S. in 1969. For over twenty years, he has
taught trial practice throughout the United States for the
National Institute for Trial Advocacy and at numerous law schools.
About Sheppard, Mullin, Richter & Hampton LLP
Founded in 1927, Sheppard, Mullin, Richter & Hampton LLP --
http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm
with more than 480 attorneys in nine offices located throughout
California and in New York and Washington, D.C. The firm's
California offices are located in Los Angeles, San Francisco,
Santa Barbara, Century City, Orange County, Del Mar Heights and
San Diego. Sheppard Mullin provides legal expertise and counsel
to U.S. and international clients in a wide range of practice
areas, including Antitrust, Corporate and Securities;
Entertainment, Media and Communications; Finance and Bankruptcy;
Government Contracts; Intellectual Property; Labor and Employment;
Litigation; Real Estate/Land Use; Tax/Employee Benefits/Trusts &
Estates; and White Collar Defense.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Abraxas Petro ABP (22) 125 (6)
AFC Enterprises AFCE (44) 176 31
Adventrx Pharma ANX (26) 23 (27)
Alaska Comm Sys ALSK (29) 550 12
Alliance Imaging AIQ (29) 683 19
AMR Corp. AMR (1,272) 29,918 (1,924)
Atherogenics Inc. AGIX (114) 227 182
Bally Total Fitn BFT (1,430) 452 (430)
Biomarin Pharmac BMRN 46 488 322
Blount International BLT (134) 462 129
CableVision System CVC (2,468) 12,832 2,643
CCC Information CCCG (95) 112 34
Centennial Comm CYCL (1,069) 1,409 32
Cenveo Inc CVO (56) 1,045 157
Choice Hotels CHH (148) 274 (68)
Cincinnati Bell CBB (727) 1,888 33
Clorox Co. CLX (427) 3,622 (258)
Columbia Laborat CBRX 11 43 24
Compass Minerals CMP (59) 702 171
Crown Holdings I CCK 46 6,885 171
Crown Media HL CRWN (165) 1,229 93
Deluxe Corp DLX (71) 1,394 (264)
Denny's Corporation DENN (261) 505 (75)
Domino's Pizza DPZ (632) 387 (10)
Echostar Comm DISH (690) 8,935 1,438
Emeritus Corp. ESC (105) 725 (19)
Emisphere Tech EMIS (26) 13 (11)
Empire Resorts I NYNY (28) 57 (5)
Encysive Pharm ENCY (38) 119 82
Foster Wheeler FWLT (239) 2,032 (52)
Gencorp Inc. GY (88) 990 (28)
Graftech International GTI (175) 919 286
H&E Equipment HEES 204 667 13
Hollinger Int'l HLR (198) 1,038 (271)
I2 Technologies ITWO (65) 195 (20)
ICOS Corp ICOS (51) 248 121
IMAX Corp IMAX (25) 238 33
Immersion Corp. IMMR (18) 47 33
Incyte Corp. INCY (38) 399 189
Indevus Pharma IDEV (134) 86 50
J Crew Group Inc. JCG (489) 353 97
Koppers Holdings KOP (100) 556 150
Kulicke & Soffa KLIC 46 399 204
Labopharm Inc. DDS (8) 46 9
Level 3 Comm. Inc. LVLT (546) 8,284 713
Ligand Pharm LGND (212) 289 (144)
Lodgenet Entertainment LNET (70) 261 7
Maxxam Inc. MXM (661) 1,048 101
Maytag Corp. MYG (187) 2,954 150
McDermott Int'l MDR 50 3,160 277
McMoran Exploration MMR (38) 411 (1)
Movie Gallery MOVI (171) 1,248 (843)
NPS Pharm Inc. NPSP (129) 287 212
New River Pharma NRPH 3 96 82
Omnova Solutions OMN (6) 366 67
ON Semiconductor ONNN (224) 1,211 251
Qwest Communication Q (3,060) 21,126 (923)
Riviera Holdings RIV (30) 219 7
Rural/Metro Corp. RURL (93) 302 50
Sepracor Inc. SEPR (128) 1,284 906
St. John Knits Inc. SJKI (52) 213 80
Sulphco Inc. SUF 31 42 32
Sun Healthcare SUNH 1 531 (46)
Tivo Inc. TIVO (33) 143 19
USG Corp. USG (496) 6,522 1,956
Vertrue Inc. VTRU (24) 466 (78)
Weight Watchers WTW (42) 856 (69)
WR Grace & Co. GRA (548) 3,506 881
*********
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, Robert Max Victor M. Quiblat II,
Shimero R. Jainga, Joel Anthony G. Lopez, Emi Rose S.R. Parcon,
Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q.
Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin
and Peter A. Chapman, Editors.
Copyright 2006. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***