/raid1/www/Hosts/bankrupt/TCR_Public/060803.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, August 3, 2006, Vol. 10, No. 183
Headlines
7-HILLS RADIOLOGY: Voluntary Chapter 11 Case Summary
A.O. SMITH CORP: Earns $25.1 Million in Second Quarter of 2006
ALDERWOODS GROUP: Reports $200,000 Second Quarter Net Income
APHTON CORP: Court OKs Sale of All Assets to Receptor Biologix
AZTAR CORP: Posts $66.1 Million Net Loss for Second Quarter 2006
B/E AEROSPACE: Inks New Revolving Credit & Term Loan Facilities
BARBOSA GROUP: Case Summary & 17 Largest Unsecured Creditors
BLESSED ARE THE CHILDREN: Voluntary Chapter 11 Case Summary
BROOKS AUTOMATION: NASDAQ Listing Conditioned on SEC Compliance
BROOKS AUTOMATION: Stock Option Errors Cue Financials Restatement
CARLO LOZANO: Voluntary Chapter 11 Case Summary
CENTURY ELECTRONICS: Creditor Trusts' D&O Lawsuit Proceeds
CINRAM INT'L: Moody's Puts Rating on $825MM Debt Facility at B1
COLLECTIBLE CONCEPT: May 31 Balance Sheet Upside-Down by $24 Mil.
COMPLETE RETREATS: Sec. 341 Creditors Meeting Slated for Aug. 28
COMPLETE RETREATS: Wants Utility Companies to Continue Services
CRICKET COMMS: Moody's Rates $1.1 Billion Credit Facility at B2
DANA CORP: Releases Second Quarter 2006 Financial Results
DANA CORP: Seeks Appointment of a Non-Union Retirees Committee
DELPHI CORP: Judge Drain Approves MobileAria Sale to @Road Inc.
DELPHI CORP: Judge Drain Clarifies Incentive-Compensation Range
DELPHI CORP: Completes Sale of U.S. Battery Plant to JCI
DELPHI CORP: Negotiations with GM & UAW Slow Down
DELTA AIR: Enters Stipulation Allowing GRP to Pursue Foreclosure
DELTA AIR: Permits PBGC to File Consolidated Claims
DIGITAL LIGHTWAVE: Issues $420,404 Promissory Note to Optel
DOWNEY FINANCIAL: Earns $49.5 Million in Second Quarter of 2006
DRESSER INC: High Leverage Prompts Moody's to Downgrade Ratings
E*TRADE FINANCIAL: Earns $156 Million in Second Quarter of 2006
ECV DEVELOPMENT: Voluntary Chapter 11 Case Summary
EL PASO: Moody's Rates New $1.25 Billion Credit Facility at B1
EL POLLO: Further Extends Tender Offer Expiration to Sept. 29
ENIVID INC: Trust's D&O Lawsuit Survives Summary Judgment
FAIRFAX FINANCIAL: Fitch Holds Low-B Ratings on Negative Watch
FERRO CORPORATION: Pays $50 Million 8% Debentures in Full
FLYI INC: Appoints Richard Kennedy as President
FOAMEX INT'L: Court Lifts Stay to Permit Sealy to Pursue Claims
FOAMEX INTERNATIONAL: Ralph Douglas Sells 21,000 Shares of Stock
GENERAL MOTORS: Negotiations with Delphi & UAW Slow Down
GLOBE BUILDING: Environmental Dispute Brews in Bankruptcy Court
GRANT PRIDECO: S&P Raises Corporate Credit Rating to BB+ from BB
GWIN INC: Wayne Allyn Root Stays On as Chairman and CEO
H&E EQUIPMENT: Prices $250 Million of 8-3/8% Sr. Unsecured Notes
H.P.H. INC: Case Summary & 12 Largest Unsecured Creditors
HANESBRANDS INC: Moody's Rates $2.15 Billion Facilities at Ba2
HANESBRANDS INC: S&P Rates $2.15 Billion Bank Loans at BB-
HARBOURVIEW CLO: Notes' Redemption Cues S&P to Withdraw Ratings
HARSIDHMA VARAHIMA: Case Summary & Two Largest Unsecured Creditors
HEALTH-CHEM CORP: Demetrius & Company Raises Going Concern Doubt
HERBALIFE INT'L: S&P Rates $300 Million Bank Financing at BB+
HEXCEL CORP: Earns $17.6 Million in Second Quarter Ended June 30
HIGH VOLTAGE: Emerges from Bankruptcy Second Time Around
HOLLINGER INC: Board Renews $50MM Liability Insurance of Directors
HOST HOTELS: Earns $330 Million in Second Quarter 2006
HUSKY ENERGY: Earns $978 Million in Second Quarter of 2006
ICEWEB INC: Inks IceMail Affiliate Pacts With Strategic Resellers
INTEGRATED HEALTHCARE: Ramirez Int'l. Raises Going Concern Doubt
INTEGRATED MEDIA: Buys WV Fiber's Assets for $1.6 Million in Cash
INTERSTATE BAKERIES: De Minimis Assets Sold for $1MM in Two Months
INTERSTATE BAKERIES: Wants to Reject 12 Real Property Leases
INTERSTATE BAKERIES: Wants $200 Million DIP Financing Extended
IMC INVESTMENT: Can Use Lenders' Cash Collateral Until August 11
JAMES RIVER COAL: Weak Liquidity Prompts Moody's to Cut Ratings
JUNIPER NETWORKS: Earns $567.5 Million in Quarter Ended June 30
KAISER ALUMINUM: Invests $30 Million to Expand Trentwood Facility
KERN INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
KEYS MANUFACTURING: Voluntary Chapter 11 Case Summary
KNOLL INC: Earns $14.8 Million in Second Quarter 2006
KNOLL INC: Stockholders Commences 9.1 Mil. Secondary Shares Offer
KRISPY KREME: Resolves Suit with Southern California Franchisee
LETAP OF WALTERBORO: Case Summary & Seven Largest Unsec. Creditors
MATTRESS SOURCE: Case Summary & 20 Largest Unsecured Creditors
MAXICARE HEALTH: June 31 Balance Sheet Upside-Down by $5.9 Mil.
MESABA AVIATION: Wants Until February 12 to File Chapter 11 Plan
MOLTEN METAL: Judge Somma Denies Riemer's $400,000 Bonus Request
NORD RESOURCES: March 31 Balance Sheet Upside-Down by $3.1 Million
ORBITAL SCIENCES: 2006 2nd Quarter Net Income Increases to $9.7MM
PATRIOT MOTORCYCLE: Weinberg & Company Raises Going Concern Doubt
PERFORMANCE TRANSPORTATION: Opposes Chris Powers' Lift-Stay Plea
PERFORMANCE TRANSPORTATION: Balks at Crumlich's Move to Lift Stay
PHIBRO ANIMAL: Completes Sale of $240 Million Senior Notes
PHOTOWORKS INC: CEO P. Sanchez Resigns After Company Turnaround
PLASTICON INTERNATIONAL: Files Three Quarterly Reports for 2005
PRESCIENT APPLIED: Inks Settlement Deal With Tak Investment
PROPERTY DEVELOPMENT: Wants to Borrow $700,000 from Great Valley
QWEST COMMUNICATIONS: Moody's Reviews Low-B Ratings & May Upgrade
RECYCLED PAPERBOARD: Asks for Final Decree Closing Chapter 11 Case
REFCO INC: Court to Consider Exclusive Period Requests on Sept. 12
REFCO INC: Chapter 11 Trustee Hires Goldin & AP as Crisis Managers
REVLON INC: Completes $100 Million Term Loan Add-On
SAINT VINCENTS: Can Proceed with Sale of Two Lots
SAINT VINCENTS: Court Approves Amended Staten Assumption Schedule
SAKS INC: Sells Parisian Dept. Stores to Belk Inc. for $285 Mil.
SBA COMMS: Debt Repayment Prompts Moody's to Withdraw Ratings
SILICON GRAPHICS: Hires Bear Stearns as Financial Advisor
SILICON GRAPHICS: Gets Final Nod to Use Existing Business Forms
SOLUTIA INC: Unit Completes Refinancing of EUR200 Million Notes
STATION CASINOS: Moody's Rates $300 Million Senior Notes at Ba3
STATION CASINOS: S&P Rates Proposed $300 Mil. Senior Notes at BB-
STORY COMM: Case Summary & 20 Largest Unsecured Creditors
SYNAGRO TECHNOLOGIES: Launches $0.1 Cash Dividend on Common Stock
TELESOURCE INT'L: Losses & Deficit Prompt Going Concern Doubt
THERMA-WAVE INC: Extends $15 Million SVB Silicon Credit Facility
TITAN INT'L: Acquires Continental Tire Facility for $53 Million
TOM'S FOODS: E-Mails Not Protected by Attorney-Client Privilege
TRAC INC: Case Summary & 20 Largest Unsecured Creditors
UNITED SURGICAL: Gets Requisite Consents for $148.8MM Senior Notes
VELOTTA ASPHALT: Case Summary & 19 Largest Unsecured Creditors
WABTEC CORP: Board Approves $50 Million Share Repurchase Program
WESTERN MEDICAL: Court Okays Osborn Maledon as Bankruptcy Counsel
WESTERN MEDICAL: U.S. Trustee Appoints Four-Member Official Panel
WESTERN MEDICAL: Panel Hires Pachulski Stang as Bankruptcy Counsel
WINN-DIXIE: Court Approves Wachovia Commitment Letter
WINN-DIXIE: Three Parties Object to Solicitation Process
WORLDCOM INC: Court Says Lousiana Right of Way Settlement is Fair
WORLDCOM INC: Court Expunges Claims of Access All and Division 1
WOODCREST LLC: Case Summary & 13 Largest Unsecured Creditors
WV FIBER: Sells Assets to Integrated Media for $1.6 Mil. in Cash
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
7-HILLS RADIOLOGY: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: 7-Hills Radiology, LLC
432 Beardsley Circle
Henderson, NV 89052
Bankruptcy Case No.: 06-11926
Type of Business: The Debtor provides radiology services.
The Debtor's managing member, Chinasa Oliver
Egemonu, filed for chapter 11 June 2, 2006
(Bankr. D. Nev. Case No. 06-11233).
Chapter 11 Petition Date: August 2, 2006
Court: District of Nevada (Las Vegas)
Judge: Linda B. Riegle
Debtor's Counsel: Michael J. Dawson, Esq.
515 South Third Street
Las Vegas, NV 89101
Tel: (702) 384-1777
Debtor's total assets and liabilities as of August 2, 2006:
Total Assets: $5,000,000
Total Debts: $2,896,693
The Debtor did not file a list of its 20 largest unsecured
creditors.
A.O. SMITH CORP: Earns $25.1 Million in Second Quarter of 2006
--------------------------------------------------------------
A. O. Smith Corporation reported $25.1 million net earnings on
record sales of $594.5 million for the second quarter of 2006.
Net earnings for the second quarter of 2005 were $6.5 million.
The Company's revenues for the second quarter were $594.5 million
including sales of $117.8 million from American Water Heater
Company and GSW. Revenues for the same period in 2005 were
$437.7 million.
For the first six months of 2006, A. O. Smith reported net
earnings of $40.6 million on sales of $1.1 billion. Net earnings
for the first six months of 2005 were $20.8 million.
"Our businesses were able to generate strong results in the second
quarter, achieving record sales in both businesses and
significantly improved operating profits in spite of large cost
increases in raw materials and energy," Chairman and Chief
Executive Officer Paul W. Jones commented.
Headquartered in Milwaukee, Wisconsin, A. O. Smith Corporation,
manufactures and markets residential and commercial water heating
equipment. The Company also manufactures electric motors for
residential, commercial, and industrial applications. A. O. Smith
employs 19,500 people at facilities in the United States, Mexico,
China, Canada, and Europe.
* * *
On July 22, 1985, Moody's Investors Service assigned A. O. Smith
Corporation's preferred stock rating at Ba1.
ALDERWOODS GROUP: Reports $200,000 Second Quarter Net Income
------------------------------------------------------------
Alderwoods Group, Inc., disclosed its second quarter and year-to-
date results, representing the 12 weeks and 24 weeks ended
June 17, 2006.
For the 12 weeks ended June 17, 2006, the Company reported net
income of $200,000 on revenues of $172.4 million, compared with
total net income of $12.1 million on revenues of $176.8 million
for the 12 weeks ended June 18, 2005.
Highlights of the Second Quarter:
- Revenue decreased 2.4% to $172.4 million;
- Number of same site funeral services performed declined
3.2% to 25,082;
- Same site average revenue per funeral increased 3.2% to
$4,278;
- Funeral revenue decreased 2.8% to $107.5 million;
- Cemetery revenue decreased 5.4% to $41.5 million;
- Insurance revenue increased 4.7% to $23.4 million;
- Net income decreased to $0.2 million;
- Pre-need funeral contracts written decreased 4.9% to
$44.7 million;
- Pre-need cemetery contracts written decreased 3.2% to
$24 million; and
- Total debt decreased by $5.5 million in the quarter
For the 24 weeks ended June 17, 2006, the Company reported total
net income of $4.7 million on revenues of $354.3 million, compared
with total net income of $25.2 million on revenues of $360.7
million, for the 24 weeks ended June 18, 2005.
Highlights of the Year-to-Date Operations:
- Revenue decreased 1.8% to $354.3 million;
- Number of same site funeral services performed declined
3.6% to 53,070;
- Same site average revenue per funeral increased 3.8% to
$4,294;
- Funeral revenue decreased 2.5% to $228.7 million;
- Cemetery revenue decreased 3.5% to $79.3 million;
- Insurance revenue increased 5.3% to $46.3 million;
- Net income decreased to $4.7 million;
- Pre-need funeral contracts written decreased 5.3% to $85.5
million
- Pre-need cemetery contracts written decreased 1.5% to
$45.1 million
- Total debt decreased by $15.2 million
"It was a difficult quarter as we continued to face a soft market
as we have throughout 2006 and our number of funeral services
performed declined. This made our focus on increasing average
revenue even more critical and I am pleased that we achieved
increased average revenue per funeral service for the seventeenth
consecutive quarter," said Mr. Paul Houston, President and CEO of
Alderwoods Group. "Our efforts on expense management resulted in
satisfactory margins overall at a time when revenues in our core
funeral and cemetery businesses were down."
"While we continued to grow our pre-need backlog this year, it was
at a slower rate than what we had achieved in the last couple of
years. The principal reason was the performance in the markets
affected by Hurricane Katrina in 2005. Both New Orleans and the
Mississippi Gulf Coast were very strong pre-need markets for
Alderwoods in prior years and they are running substantially lower
in 2006 due to the major population shifts which have occurred in
these areas."
Mr. Houston continued, "The comparison of the Company's year over
year result is affected by a number of unusual items. In 2006, we
incurred substantial expenses related to the proposed transaction
with SCI, significant other legal costs and required changes in
accounting for stock based compensation expenses. In 2005,
results included the favorable benefit of a gain on the sale of
excess real estate and the recovery of a corporate receivable that
had been previously fully reserved against.
"In the quarter, we continued to execute our operating strategy
and we remain focused on operating and improving our business."
Significant Activities in the Quarter
The Company's Alderwoods Rooms continue to demonstrate value to
both families and the Company achieved another quarter of
increased average revenue per funeral service performed.
The Company has a total of 326 Alderwoods Rooms as an additional
11 of these standardized merchandise selection rooms were
completed in the quarter. The Company will continue to invest in
the rollout of Alderwoods Rooms as they provide important options
to families during the arrangement process and have proven to
increase average revenue per funeral service.
The Company continues to invest in new locations in 2006. One new
combination funeral and cemetery facility opened its doors in the
first half of the year; Resthaven Garden of Memory in Baton Rouge,
Louisiana. In the second half of 2006, four new combination
funeral home and cemetery locations will be opened, including one
additional site in the state of Louisiana.
Alderwoods Group continued to pay down long-term debt. In the
quarter, $5.5 million was repaid, reducing long-term debt to
$358.2 million.
Proposed Transaction with SCI
On April 3, 2006, Service Corporation International and Alderwoods
Group disclosed that the Boards of Directors of both companies
have approved a definitive agreement under which SCI will acquire
all of the outstanding shares of Alderwoods for $20 per share in
cash and assumption of debt. Alderwoods stockholders voted on May
31, 2006 to approve this agreement.
Subsequent to the stockholders vote the Company together with SCI
entered into a timing agreement with the staff of the Federal
Trade Commission in connection with the proposed merger of the
Company with a subsidiary of SCI. Each of the Company and SCI
have received "Second Requests" from the FTC, and as a result
thereof, the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, during which the parties may not
consummate the proposed merger, has been extended. The parties
are working toward responding to the Second Requests.
As a result of the timing agreement, the Company and SCI expect to
seek to negotiate a consent decree with the FTC, in which case the
proposed merger could close as early as on or before September 30,
2006. The Company and SCI have agreed with the FTC that if the
parties are unable to reach agreement on a consent agreement with
the FTC, they will not close the proposed merger before October
30, 2006. In addition, the Company and SCI have agreed, under a
standard provision of a recently adopted FTC protocol for
administering Second Requests that if the FTC challenges the
proposed transaction by filing an application for preliminary
injunction in federal court, the Company and SCI, jointly with the
FTC, will propose a scheduling order that provides for a 60-day
pre-hearing discovery period.
The Company and SCI continue to expect that the transaction will
close by the end of 2006.
Alderwoods Group
Alderwoods Group -- http://www.alderwoods.com/-- is the second
largest operator of funeral homes and cemeteries in North America,
based upon total revenue and number of locations. As of December
31, 2005, the Company operated 594 funeral homes, 72 cemeteries
and 60 combination funeral home and cemetery locations throughout
North America. The Company provides funeral and cemetery services
and products on both an at-need and pre-need basis. In support of
the pre-need business, the Company operates insurance subsidiaries
that provide customers with a funding mechanism for the pre-
arrangement of funerals.
* * *
As reported in the Troubled Company Reporter on April 3, 2006,
Standard & Poor's Ratings Services raised its credit ratings on
Alderwoods, including the corporate credit rating, which was
raised to 'BB-' from 'B+'. S&P said the outlook is stable.
On July 14, 2006, Moody's announced that its ratings of the
Alderwoods Group had been upgraded. The corporate credit rating
increased from B2/positive outlook to B1/stable outlook. The
senior secured debt was increased from B1 to Ba3 and the senior
unsecured notes increased from B2 to B1.
APHTON CORP: Court OKs Sale of All Assets to Receptor Biologix
--------------------------------------------------------------
The Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court
for the District of Delaware approved the sale of substantially
all of Aphton Corp.'s assets to Receptor Biologix, Inc., for
$750,000 plus any outstanding amount under the Debtor's
debtor-in-possession facility on July 28, 2006.
The Debtor grants Receptor Biologix a perpetual royalty-free
license in the Debtor's liposomal vaccine family of patents, that
is exclusive for Receptor Biologix' use in developing a vehicle
for delivery of its products. The grant of this exclusive license
is subject to the Collaboration and License Agreement, dated
July 1, 2001, between the Debtor and Yissum Research and
Development Company of Hebrew University of Jerusalem, Israel.
DIP Loan
As reported in the Troubled Company Reporter on July 10, 2006, the
Court allowed the Debtor to borrow funds from Receptor Biologix.
The Debtor used the funds to pay its consultants working to secure
approval for Insegia with the European Medicines Agency -- a
European regulatory agency analogous to the Food and Drug
Administration in the United States.
Ronald S. Gellert, Esq., in Wilmington, Delaware, told the Court
that the Debtor did not have sufficient available sources of
working capital to compensate Gillian Gregory and Paul Broome.
The Debtor needed to pay $50,000 to Messrs. Gregory and Broome to
secure the approval, so it can market Insegia to other drug
companies.
The loan earns an 8% annual interest and matures on the
earliest of:
* 10 days after the closing of the sale of Insegia, if the
winning bidder is not Receptor Biologix;
* the closing date of the Insegia sale if Receptor Biologix
wins the auction; or
* August 31, 2006.
Sale Incentives
As reported in the Troubled Company Reporter on July 7, 2006, the
Court allowed the Debtor to defer payment of salaries for some of
its employees and to grant incentives once the Debtor succeeds in
selling substantially all of its assets.
The Debtor and the Committee proposed to pay Patrick Mooney,
Chairman of the Debtor's Board of Directors, $66,666 in deferred
salary and incentive bonus once a sale closes. John McCafferty,
the Debtor's corporate counsel, will get $30,000 in deferred
salary and incentive bonus. Steve Goth will get $5,750 in
deferred salary and incentive bonus.
A copy of the Asset Purchase Agreement is available for a fee at:
http://www.researcharchives.com/bin/download?id=060802212547
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.
AZTAR CORP: Posts $66.1 Million Net Loss for Second Quarter 2006
----------------------------------------------------------------
Aztar Corporation reported a net loss of $66.1 million for the
second quarter of 2006, compared with a net income of
$15.5 million in the second quarter of 2005.
The loss, according to the Company, is largely attributable to
payment of a fee and associated expenses totaling $78.0 million
related to termination of its merger agreement with Pinnacle
Entertainment, Inc.
The Company also reported $221.9 million in revenues for the
second quarter of 2006, compared with $221.4 million in the second
quarter of 2005.
Year-to-Date Results
For the first half of 2006, the Company's consolidated revenue was
$443.2 million, compared with $437.3 million in the first half of
2005.
First-half 2006 net loss was $62.9 million, compared with net
income of $25.4 million in the first half of 2005.
About Aztar Corporation
Headquartered in Phoenix, Arizona, Aztar Corporation (NYSE: AZR)
-- http://www.aztar.com/-- is a publicly traded company that
operates Tropicana Casino and Resort in Atlantic City, New Jersey,
Tropicana Resort and Casino in Las Vegas, Nevada, Ramada Express
Hotel and Casino in Laughlin, Nevada, Casino Aztar in
Caruthersville, Missouri, and Casino Aztar in Evansville, Indiana.
* * *
As reported in the Troubled Company Reporter on Feb. 23, 2006,
Moody's Investors Service placed the ratings of Aztar Corporation
on review for possible downgrade to reflect the likelihood that
its $1.2 billion Las Vegas redevelopment plan outlined on the
company's most recent earnings call could negatively impact the
credit profile of the assets supporting the existing rated notes.
The rating action also acknowledged that the redevelopment plans
have not yet been approved by the company's Board of Directors,
and during the earnings call, Aztar publicly stated that it may
not pursue the project at all.
As reported in the Troubled Company Reporter on Feb. 20, 2006,
Standard & Poor's Ratings Services placed its ratings on Aztar
Corp., including its 'BB' corporate credit rating, on CreditWatch
with negative implications.
B/E AEROSPACE: Inks New Revolving Credit & Term Loan Facilities
---------------------------------------------------------------
B/E Aerospace, Inc. entered into a new senior secured credit
facility consisting of a five-year, $150 million revolving credit
facility and a six-year, $75 million term loan with JPMorgan Chase
Bank, N.A., as Administrative Agent, UBS Securities LLC and Credit
Suisse Securities LLC, as Syndication Agents, and certain lenders
party thereto.
The Credit Agreement also provides for the ability of the Company
to request additional incremental term loans of up to $75 million
and replaces the Company's existing $50 million revolving credit
facility that would have matured in 2007. The Agreement is
secured by liens on substantially all of the Company's domestic
assets, including a pledge of a portion of the capital stock of
certain foreign subsidiaries.
The outstanding balance under the Old Credit Agreement prior to
its repayment on July 26, 2006 was approximately $30.1 million.
The revolving credit facility will mature in 2011, and the term
loan facility portion of the Credit Agreement will mature in 2012.
The Company used the $75 million term loan borrowings and
$120 million of available revolving credit facility borrowings,
along with available cash, to purchase its outstanding 8 1/2%
Senior Notes due 2010 and pay the interest on the tendered Notes,
to repay the outstanding borrowings under the Company's existing
revolving credit facility, and certain related fees and expenses.
The Company disclosed plans to enter into a new term loan, the
proceeds of which will be used to repay all amounts borrowed under
the revolving credit facility and amounts outstanding under the
term loan facility, and enter into a new revolving credit
facility.
Based in Wellington, Florida, B/E Aerospace, Inc. (Nasdaq:BEAV)
-- http://www.beaerospace.com/-- manufactures aircraft cabin
interior products, and is an aftermarket distributor of aerospace
fasteners. B/E designs, develops and manufactures a broad range
of products for both commercial aircraft and business jets. B/E
manufactured products include aircraft cabin seating, lighting,
oxygen, and food and beverage preparation and storage equipment.
The company also provides cabin interior design, reconfiguration
and passenger-to-freighter conversion services. B/E sells and
supports its products through its own global direct sales and
product support organization.
* * *
As reported in the Troubled Company Reporter on Jan. 16, 2006,
Moody's Investors Service raised B/E Aerospace, Inc.'s Corporate
Family Rating to B1 from B3. Moody's said the ratings outlook is
stable.
BARBOSA GROUP: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: The Barbosa Group, Inc.
dba Northpoint Management
dba Executive Security
3 Northpoint Drive, Suite 200
Houston, TX 77060
Tel: (281) 820-5700
Bankruptcy Case No.: 06-33659
Type of Business: The Debtor is a professional guard service firm.
See http://www.execsecurityguard.com/about.html
Chapter 11 Petition Date: July 31, 2006
Court: Southern District of Texas (Houston)
Debtor's Counsel: Barbara Mincey Rogers, Esq.
Rogers, Anderson & Bensey, PLLC
2200 North Loop West, Suite 310
Houston, TX 77018
Tel: (713) 957-0100
Fax: (713) 957-0105
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 17 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
MetroBank, N.A. Deed of Trust, $3,160,000
James Flynn Security Agreement
9600 Belaire Boulevard
Suite 252
Houston, TX 77036
Benetar, Bernstein, Goods and Services $136,852
Schair, Stein
330 Madison
New York, NY 10017-5001
Leboeuf, Lamb, Green, Macrae Goods and Services $117,538
633 17th Street, Suite 2000
Denver, CO 80202
Aldine ISD Taxes $99,111
Tax Office
14909 Aldine Westfield Road
Houston, TX 77032-3027
Internal Revenue Service Payroll Taxes $90,000
1919 Smith Street 1st Quarter 2006
Houston Stop 5024
Houston, TX 77002
Paul Bettencourt Taxes $76,108
Crady, Jewett & McCulley LLP Goods and Services $50,395
MBNA America Goods and Services $28,812
Wells Fargo Business Goods and Services $27,947
Line of Credit
J.R. Moore, Jr. Taxes $27,666
Tax Assessor/Collector
Ramiro R. Canales Taxes $24,273
Bond, Schoeneck & King, PLLC Goods and Services $18,379
American Express Goods and Services $15,090
Mesa Mechanical, Inc. Goods and Services $12,820
Crady, Jewett & McCulley, LLP Goods and Services $11,858
New York State Goods and Services $10,587
Department of Labor
Craco Mechanical Goods and Services $8,059
BLESSED ARE THE CHILDREN: Voluntary Chapter 11 Case Summary
-----------------------------------------------------------
Debtor: Blessed Are the Children Achievement Academy, Inc.
2801 Prince George Drive
DeSoto, TX 75115
Bankruptcy Case No.: 06-42435
Type of Business: The Debtor operates child care centers.
The Debtor's president, Belinda K. Hardy, filed
for chapter 11 protection on July 2, 2006
(Bankr. N.D. Tex. Case No. 06-41992).
Chapter 11 Petition Date: August 1, 2006
Court: Northern District of Texas (Fort Worth)
Judge: Russell F. Nelms
Debtor's Counsel: Julie C. McGrath, Esq.
Forshey & Prostok, LLP
777 Main Street, Suite 1290
Fort Worth, TX 76102
Tel: (817) 877-8855
Fax: (817) 877-4151
Total Assets: $1,750,000
Estimated Debts: $500,000 to $1 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
BROOKS AUTOMATION: NASDAQ Listing Conditioned on SEC Compliance
---------------------------------------------------------------
Brooks Automation, Inc., received a notification from the Nasdaq
Stock Market, on July 25, 2006, that the Nasdaq Listing
Qualifications Panel has determined to grant the Company's request
for continued listing on the Nasdaq Global Market provided that
the Company files its Form 10-Q for the quarter ended March 31,
2006 and all required restatements on or prior to Aug. 15, 2006.
About Brooks Automation
Brooks Automation, Inc. (NASDAQ: BRKS) -- http://www.brooks.com/
-- is a provider of automation solutions and integrated subsystems
to the global semiconductor and related industries. Brooks'
products and global services are used in semiconductor fab in a
number of diverse industries outside of semiconductor
manufacturing.
* * *
As reported in the Troubled Company Reporter on May 19, 2006,
holders of more than 25% of the aggregate outstanding principal
amount of Brooks Automation's 4.75% Convertible Subordinated Notes
due 2008 notified the Company that its previously announced
failure to file its Quarterly Report on Form 10-Q for the period
ended March 31, 2006, on a timely basis represented a breach of
its obligations under the indenture governing the notes.
On July 17, 2006 the Company tendered to the trustee for the
holders of the Notes the entire principal amount of $175 million
due under the Notes. The Company believes that this payment of
principal constitutes full satisfaction of all of the Company's
obligations pursuant to the Indenture to the holders of the Notes.
After fully repaying the principal amount of the Notes, the
Company estimates that the Company's remaining cash, cash
equivalents and marketable securities are in excess of $160
million.
Under the terms of the Indenture holders of a majority in
aggregate principal amount of the outstanding Notes may elect to
rescind an acceleration and its consequences. The Company has
received no notice of any such election.
BROOKS AUTOMATION: Stock Option Errors Cue Financials Restatement
-----------------------------------------------------------------
Brooks Automation, Inc., amended its Annual Report on Form 10-K
for the year ended Sept. 30, 2005, to restate its consolidated
financial statements for the years ended Sept. 30, 2005, 2004 and
2003 and the related disclosures. The amended annual report also
includes the restatement of selected financial data as of and for
the years ended September 30, 2005, 2004, 2003, 2002 and 2001.
A copy of the amended annual report is available for free
at http://researcharchives.com/t/s?eba
The Company discloses that it has not amended and does not intend
to amend any of its other previously filed annual reports on Form
10-K for the periods affected by the restatements or adjustments.
The Company said the consolidated financial statements and related
financial information contained in these previously filed reports
should no longer be relied upon.
Brooks Automation 's Board of Directors concluded in May 2006 that
the Company's consolidated financial statements for the years
ended Sept. 30, 2005, 2004 and 2003 as well as the selected
financial data for the years ended Sept. 30, 2002 and 2001 should
be restated to record additional non-cash stock-based compensation
expense resulting from stock options granted during fiscal years
1996 to 2005 that were incorrectly accounted for under generally
accepted accounting principles.
The Company's decision to restate its financial statements was
based on the facts obtained by management and an independent
investigation into stock option accounting that was conducted
under the direction of a special committee of the Board of
Directors.
The Board created the Special Committee, which was composed solely
of independent directors, to conduct a review of matters related
to past stock option grants after receiving inquiries regarding
the timing of certain stock option grants. Separately, the
Company's management also reviewed stock option grants from 1995
through the second quarter of fiscal 2006 to determine whether any
material accounting errors had occurred with respect to stock
option grants.
Stock Option Investigation
Brooks Automation concluded that there were material accounting
errors with respect to a number of stock option grants. In
general, these stock options were granted with an exercise price
equal to the Nasdaq closing market price for our common stock on
the date set forth on written consents signed by one or more
directors. The Company used the stated date of these consents as
the "measurement date" for the purpose of accounting for them
under GAAP, and as a result recorded no compensation expense in
connection with the grants. A number of written consents were not
fully executed or effective on the date set forth on the consents
and thus that using the stated date as the measurement date was
incorrect.
The Company has determined that the cumulative, pre-tax, non-cash,
stock-based compensation expense resulting from revised
measurement dates was approximately $58.7 million during the
period from its initial public offering in 1996 through Sept. 30,
2005.
The corrections made in the restatement relate to options covering
approximately 6 million shares. In the restatement, the Company
recorded stock-based compensation expense of $1.6 million, $3.1
million and $17.3 million for the years ended Sept. 30, 2005, 2004
and 2003, respectively, and $36.7 million prior to fiscal 2003.
In addition, the Company recorded an income tax benefit of
approximately $1.8 million prior to fiscal 2003.
The cumulative effect of the restatement adjustments on the
Company's consolidated balance sheet at Sept. 30, 2005 was an
increase in additional paid-in capital offset by a corresponding
increase in the accumulated deficit and deferred compensation
which results in no net effect on stockholders' equity.
Approximately 99% of the charges relating to revised measurement
dates arose from incorrect measurement dates for stock options
granted during fiscal years 1996 through 2002. Subsequent to
fiscal 2002 and prior to the inception of the investigation, the
Company had revised its stock option and restricted stock grant
practices.
Neither the Company nor the Special Committee concluded that
anyone now affiliated with the Company was complicit in any
intentional wrongdoing. The Company and the Special Committee
were unable to conclude that the accounting errors relating to
revised measurement dates for stock option grants were the result
of intentional misconduct of any company personnel. There was no
impact on revenue or net cash provided by operating activities as
a result of this compensation expense.
Therrien Loans
In addition to the compensation expenses, the Company also
recorded approximately $5.8 million of non-cash, stock-based
compensation expense in connection with a stock option held by
former CEO Robert J. Therrien that, the Company concludes, he was
permitted to exercise in November 1999 despite its expiration in
August of 1999. This transaction was previously accounted for and
disclosed as a loan by the Company to Mr. Therrien for the purpose
of permitting him to exercise the option.
As a result of facts obtained by the Special Committee, Brooks
Automation determined that Mr. Therrien misrepresented the facts
of the loan. As a result, the Company has determined that the
option expired in August 1999 and that compensation expense should
have been recorded in connection with Mr. Therrien's purchase of
stock in November 1999. At that time, Mr. Therrien paid
approximately $560,000 (the exercise price of $2.43 per share,
plus interest deemed due on the loan) for 225,000 shares then
worth approximately $6,314,000 (or $28.06 per share).
In the restatement, the Company recognized compensation expense in
November 1999 equal to the difference between the price paid by
Mr. Therrien and the market value of the stock on the date of
sale. The three directors including Mr. Therrien are no longer
affiliated with the Company.
About Brooks Automation
Brooks Automation, Inc. (NASDAQ: BRKS) -- http://www.brooks.com/
-- is a provider of automation solutions and integrated subsystems
to the global semiconductor and related industries. Brooks'
products and global services are used in semiconductor fab in a
number of diverse industries outside of semiconductor
manufacturing.
* * *
As reported in the Troubled Company Reporter on May 19, 2006,
holders of more than 25% of the aggregate outstanding principal
amount of Brooks Automation's 4.75% Convertible Subordinated Notes
due 2008 notified the Company that its previously announced
failure to file its Quarterly Report on Form 10-Q for the period
ended March 31, 2006, on a timely basis represented a breach of
its obligations under the indenture governing the notes.
On July 17, 2006 the Company tendered to the trustee for the
holders of the Notes the entire principal amount of $175 million
due under the Notes. The Company believes that this payment of
principal constitutes full satisfaction of all of the Company's
obligations pursuant to the Indenture to the holders of the Notes.
After fully repaying the principal amount of the Notes, the
Company estimates that the Company's remaining cash, cash
equivalents and marketable securities are in excess of $160
million.
Under the terms of the Indenture holders of a majority in
aggregate principal amount of the outstanding Notes may elect to
rescind an acceleration and its consequences. The Company has
received no notice of any such election.
CARLO LOZANO: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Carlos Cantu Lozano Trust
1631 Zamora Drive
Brownsville, TX 78523
Bankruptcy Case No.: 06-33739
Chapter 11 Petition Date: August 1, 2006
Court: Southern District of Texas (Houston)
Judge: Jeff Bohm
Debtor's Counsel: Rogena Jan Atkinson, Esq.
The Law Offices of R.J. Atkinson LLC
3617 White Oak Drive
Houston, TX 77007
Tel: (713) 862-1700
Fax: (713) 862-1745
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
CENTURY ELECTRONICS: Creditor Trusts' D&O Lawsuit Proceeds
----------------------------------------------------------
Under Delaware law, the Honorable Joel B. Rosenthal rules, an
exculpatory clause contained in Century Electronics Manufacturing
Inc.'s Restated Certificate of Incorporation limiting the
liability of company directors does not shield officers who are
also directors from breach of fiduciary duty claims arising from
their acts taken as officers. Judge Rosenthal made that ruling in
a lawsuit (Bankr. D. Mass. Adv. Pro. No. 03-4009) brought by Mark
Lincoln, as Trustee of the Century Electronics Manufacturing, Inc.
D & O Trust, and John J. Monaghan, as Trustee for the Century
Electronics Manufacturing, Inc. Creditors' Trust against Thomas
DePetrillo, Robert S. Cohen, Walter Conroy, Louis Gaviglia, Ofer
Nemirovsky, James M. Roller, individually and in their capacities
as directors and officers of Century Electronics Manufacturing,
Inc., Century Electronics Manufacturing (NE), Inc., Amitek
Corporation, Century Electronics Manufacturing West Coast
Operations, Inc., and Royal & Sun Alliance USA d/b/a Royal
Insurance Company of America.
Judge Rosenthal says the plain language of Section 102(b)(7) of
the Delaware General Corporations Law suggests that officers might
not enjoy the same protections as do directors. The question,
Judge Rosenthal says, then becomes whether or not directors who
are also officers are shielded from liability by the provisions of
the exculpatory clause. Following what he sees as the majority
interpretation of Section 102(b)(7), Judge Rosenthal says the
exculpatory clause in Century Electronics' Restated Certificate of
Incorporation does not shield officers who are also directors from
breach of fiduciary duty claims arising from their acts taken as
officers. Judgre Rosenthal's decision is published at
2006 WL 1999216.
Century Electronics Manufacturing, Inc., Century Electronics
Manufacturing (NE), Inc., Amitek Corporation, and Century
Electronics Manufacturing West Coast Operations, Inc., filed for
chapter 11 protection on January 9, 2001 (Bankr. D. Mass Case Nos.
01-40153-JBR through 01-40156-JBR). On September 14, 2001, the
Court authorized the appointment of a Chapter 11 trustee and on
September 21, 2001, approved the appointment of David Nickless as
the Chapter 11 trustee. Judge Rosenthal entered an order
confirming the First Amended Liquidating Plan proposed by the
Official Committee of Unsecured Creditors on January 28, 2003.
That Plan breathed life into two trusts to recover additional
funds for the benefit of creditors.
CINRAM INT'L: Moody's Puts Rating on $825MM Debt Facility at B1
---------------------------------------------------------------
Moody's Investors Service assigned a definitive B1 senior secured
rating to the $825 million credit facility of Cinram International
Inc. dated May 5, 2006, removing the provisional status from this
rating. Moody's also withdrew the B1 senior secured rating from
Cinram's prior credit facility, originally dated October 2003.
Cinram's Corporate Family Rating is B1 and the outlook is stable.
Assignments:
Issuer: Cinram International Inc.
* Senior Secured Bank Credit Facility, Assigned B1
Withdrawals:
Issuer: Cinram International Inc.
* Senior Secured Bank Credit Facility, Withdrawn, previously
rated B1
Cinram International Inc. is the world's largest manufacturer and
distributor of DVD's, CD's and VHS pre-recorded media, with
headquarters in Toronto, Ontario, Canada.
COLLECTIBLE CONCEPT: May 31 Balance Sheet Upside-Down by $24 Mil.
-----------------------------------------------------------------
Collectible Concepts Group, Inc., delivered its quarterly report
on Form 10-QSB for the quarter ended May 31, 2006 to the
Securities and Exchange Commission on July 24, 2006.
The Company reported a $4,720,384 net loss on $443,795 of net
sales for the three months ended May 31, 2006.
At May 31, 2006, the Company's balance sheet showed $1,585,958
in total assets and $24,257,481 in total liabilities resulting in
a $22,671,523 stockholders' deficit.
The Company's May 31 balance sheet also showed strained liquidity
with $962,872 in total current assets available to pay $6,288,420
in total current liabilities coming due within the next 12 months.
A full-text copy of the regulatory filing is available for free
at http://ResearchArchives.com/t/s?ec0
Going Concern Doubt
Weinberg & Company, P.A., in Boca Raton, Florida, raised
substantial doubt about Collectible Concepts' Inability to
continue as a going concern after auditing the Company's
consolidated financial statements for the year ended Dec. 31,
2005. The auditor pointed to the Company's working capital
deficiency of $5,734,951, stockholders' deficiency of
$19,480,090, net loss of $8,554,857, and net cash used
in operations of $1,611,998 for the year ended
February 28, 2006.
About Collectible Concepts
Headquartered in Doylestown, Pa., Collectible Concepts Group, Inc.
-- http://www.collectibleconcepts.com/-- develops and
markets unique licensed entertainment, sports, and music
collectible merchandise for specialty, mass retail and online
distribution. Licenses include The Three Stooges(R), over 25
Colleges & Universities, The National Football League, The NBA,
Arena Football and others.
COMPLETE RETREATS: Sec. 341 Creditors Meeting Slated for Aug. 28
----------------------------------------------------------------
Diana G. Adams, the Acting United States Trustee for Region 2,
will convene a meeting of creditors of Complete Retreats LLC
and its 61 debtor-affiliates at 1:00 p.m., on Aug. 28, 2006, at
the Bankruptcy Meeting Room, One Century Tower, at 265 Church
Street, Suite 1104, in New Haven, Connecticut.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtors under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses. In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members. Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts. No estimated assets have been listed
in the Debtors' schedules, however, the Debtors disclosed
$308,000,000 in total debts. (Complete Retreats Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000).
COMPLETE RETREATS: Wants Utility Companies to Continue Services
---------------------------------------------------------------
In connection with the operation of their business and management
of their properties, Complete Retreats LLC and its debtor-
affiliates obtain electricity, gas, water, sewer, trash removal,
telephone, Internet, cable television, and other utility services
from various utility companies.
Accordingly, the Debtors ask the U.S. Bankruptcy Court for the
District of Connecticut to:
(i) determine that the Utility Companies have been provided
with adequate assurance of payment under Bankruptcy Code
section 366;
(ii) approve the Debtors' proposed offer of adequate assurance
and procedures governing the Utility Companies' requests
for additional or different adequate assurance;
(iii) prohibit the Utility Companies from altering, refusing,
or discontinuing services on account of prepetition
amounts outstanding or on account of any perceived or
alleged inadequacy of the proposed adequate assurance;
(iv) establish procedures for the Utility Companies to seek to
opt out of the proposed adequate assurance procedures;
(v) determine that the Debtors are not required to provide
any additional adequate assurance;
(vi) set a final hearing on the proposed adequate assurance
procedures on August 17, 2006; and
(vii) provide for the return of the unused portions of all
deposits shortly after the substantial consummation of
any confirmed plan of reorganization in their cases.
A 14-page list of Utility Companies providing services to the
Debtors is available for free at:
http://researcharchives.com/t/s?ec4
The Debtors inform the Court that it is possible that certain
Utility Providers have not yet been identified or included on the
list. The Debtors intend to file amendments to the Utility
Service List and would serve copies of any orders related to the
Utility Motion on the newly identified Utility Providers.
"The Utility Services are essential to the Debtors' operations
and, therefore, must continue uninterrupted during the pendency
of the Debtors' Chapter 11 cases," Joel H. Levitin, Esq., at
Dechert LLP, in New York, asserts.
In the past 12 months, the Debtors paid an average of
approximately $52,000 per month on account of Utility Services.
Until recently, Mr. Levitin says, the Debtors have had a
relatively good payment history with the Utility Companies.
Section 366(a) of the Bankruptcy Code prevents utility companies
from discontinuing, altering, or refusing service to a debtor
during the first 30 days of a Chapter 11 case. After that 30-day
period, however, a utility company has the option of terminating
its services pursuant to Bankruptcy Code section 366(c)(2) if a
debtor has not furnished that utility company adequate assurance
of payment.
Proposed Adequate Assurance
The Debtors intend to pay all postpetition obligations owed to
the Utility Companies. In addition, the Debtors propose to
provide a deposit equal to two weeks of Utility Service to any
Utility Company that requests a deposit in writing. However, no
deposit will be given to a Utility Company that already holds a
deposit equal to or greater than two weeks of Utility Services
and that is paid in advance for its services.
Upon acceptance of the Deposit, the Utility Company would be
deemed to have stipulated that the Deposit constitutes adequate
assurance of payment under Bankruptcy Code section 366 and would
not be able to make an Additional Adequate Assurance Request.
Proposed Adequate Assurance Procedures
In light of the severe consequences to the Debtors of any
interruption in services by the Utility Companies, but
recognizing the right of the Utility Companies to evaluate the
Proposed Adequate Assurance on a case-by-case basis, the Debtors
propose that the Court approve and adopt these uniform
procedures:
a. If a Utility Company does not comply with the Adequate
Assurance Procedures, it will be forbidden from
discontinuing, altering, or refusing service.
b. Any Utility Company requesting a Deposit must make a
request in writing to:
(i) the Debtors
Tanner & Haley Resorts
285 Riverside Avenue, Suite 310
Westport, CT 06880
Attn: Jason I. Bitsky, Esq., and
(ii) counsel to the Debtors
Dechert LLP
30 Rockefeller Plaza
New York, NY 10112
Attn: Joel H. Levitin, Esq., and
David C. McGrail, Esq.
c. If the requesting Utility Company satisfies the
requirements, the Debtors would provide a deposit.
d. Any Utility Company desiring additional adequate assurance
of payment must serve its request on the Debtors and the
Debtors' counsel.
e. The Debtors have at least two weeks to reach a consensual
agreement with the Utility Company resolving the
Additional Adequate Assurance Request.
f. The Debtors would be permitted to resolve any Additional
Adequate Assurance Request by mutual agreement with the
Utility Company and without further Court order.
g. If the Debtors can't reach a timely consensual resolution
with the Utility Company, a hearing will be held to
determine the adequacy of adequate assurance of payment.
h. Pending resolution of the Determination Hearing, that
particular Utility Company would be prohibited from
discontinuing, altering, or refusing service to the
Debtors.
Process for Opting Out
A Chapter 11 debtor was historically able to place the burden on
utility providers to prove that the adequate assurance offered by
the debtor was insufficient. After recent amendments to Section
366 of the Bankruptcy Code, the burden has arguably shifted to
debtors to provide adequate assurance that the utility providers
find satisfactory and to seek court review if a utility provider
does not accept the proposed adequate assurance.
Under the new reading of Section 366 of the Bankruptcy Code, a
Utility Company could, on the 29th day after the Petition Date,
announce that the proposed adequate assurance is not acceptable,
demand an unreasonably large deposit from the Debtors, and
threaten to terminate Utility Service the next day unless
satisfied.
The Debtors believe it is prudent to require Utility Companies to
raise any objections to the Adequate Assurance Procedures, so
that those objections may be heard by the Court within 30 days of
the Petition Date.
The Debtors propose these uniform objection procedures:
a. Any Utility Company that objects to the Adequate Assurance
Procedures must to file a timely objection.
b. Any Procedures Objection must, among others, be made in
writing and set forth the reason why the Utility Company
believes it should be exempted from the Adequate Assurance
Procedures.
c. The Debtors would be permitted to resolve any Procedures
Objection by mutual agreement with the Utility Company and
without further Court order.
d. If no prompt consensual resolution is reached, the
Procedures Objection would be heard at the Final Hearing.
e. All Utility Companies that do not timely file a Procedures
Objection would be deemed to consent to the Adequate
Assurance Procedures.
About Complete Retreats
Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses. In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members. Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts. No estimated assets have been listed
in the Debtors' schedules, however, the Debtors disclosed
$308,000,000 in total debts. (Complete Retreats Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000).
CRICKET COMMS: Moody's Rates $1.1 Billion Credit Facility at B2
---------------------------------------------------------------
Moody's Investors Service assigned a definitive B2 senior secured
rating to the $1.1 billion credit facility of Cricket
Communications Inc., removing the provisional status from this
rating. Moody's also withdrew the B2 senior secured rating from
Cricket's prior $710 million credit facility. Cricket's Corporate
Family Rating is B3 and the outlook is developing.
Assignments:
Issuer: Cricket Communications, Inc.
* Senior Secured Bank Credit Facility, Assigned B2
Withdrawals:
Issuer: Cricket Communications, Inc.
* Senior Secured Bank Credit Facility, Withdrawn, previously
rated B2
Leap Wireless International, Inc. wholly-owns Cricket
Communications Inc., which is a wireless service provider
in operating in 20 states with approximately 1.8 million
subscribers. Both companies are headquartered in San Diego,
California.
DANA CORP: Releases Second Quarter 2006 Financial Results
---------------------------------------------------------
Dana Corporation and its debtor-affiliates filed with the
Securities and Exchanged Commission their financial report for the
second quarter ended June 30, 2006.
Dana Corporation
Unaudited Condensed Consolidated Balance Sheet
At June 30, 2006
ASSETS
CURRENT ASSETS
Cash and cash equivalent assets $871,000,000
Accounts receivable
Trade 1,352,000,000
Other 289,000,000
Inventories 681,000,000
Assets of discontinued operations 516,000,000
Other current assets 252,000,000
----------------
Total current assets $3,961,000,000
----------------
Investments and other assets 1,442,000,000
Investments in equity affiliates 850,000,000
Net property, plant and equipment 1,703,000,000
----------------
TOTAL ASSETS $7,956,000,000
================
LIABILITY AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable, including current portion
of long-term debt $502,000,000
Accounts payable 1,039,000,000
Liabilities of discontinued operations 191,000,000
Other accrued liabilities 758,000,000
----------------
Total current liabilities $2,490,000,000
----------------
Liabilities subject to compromise $3,959,000,000
Deferred employee benefits and other
non-current liabilities 227,000,000
Long-term debt 16,000,000
DIP financing 700,000,000
Commitments and contingencies --
Minority interest in consolidates subsidiaries 80,000,000
Shareholder' equity 484,000,000
----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $7,956,000,000
================
Dana Corporation
Unaudited Consolidated Statement of Operations
For Three Months Ended June 30, 2006
Net Sales $2,300,000,000
Costs and expenses
Costs of sales 2,157,000,000
Selling, general and administrative expenses 120,000,000
Other income, net (38,000,000)
----------------
Income from operations 61,000,000
Interest expense 26,000,000
Reorganization charges 34,000,000
----------------
Income (loss) before income taxes 1,000,000
Income tax benefit (36,000,000)
Minority interest (2,000,000)
Equity in earnings of affiliates 6,000,000
----------------
Loss before continuing operations (31,000,000)
Loss (income) from discontinued operations 3,000,000
----------------
Loss before effect of change in accounting (28,000,000)
Effect of change in accounting --
----------------
Net income (loss) ($28,000,000)
================
Dana Corporation
Unaudited Consolidated Statement of Operations
For Six Months Ended June 30, 2006
Net Sales $4,497,000,000
Costs and expenses
Costs of sales 4,250,000,000
Selling, general and administrative expenses 239,000,000
Other income, net (55,000,000)
----------------
Income from operations 63,000,000
Interest expense 65,000,000
Reorganization charges 89,000,000
----------------
Income (loss) before income taxes (91,000,000)
Income tax (expense) benefit (58,000,000)
Minority interest (3,000,000)
Equity in earnings of affiliates 16,000,000
----------------
Loss before continuing operations (136,000,000)
Loss from discontinued operations (18,000,000)
----------------
Loss before effect of change in accounting (154,000,000)
Effect of change in accounting --
----------------
Net income (loss) ($154,000,000)
================
Dana Corporation
Unaudited Condensed Consolidated Statement of Cash Flows
For Six Months Ended June 30, 2006
OPERATING ACTIVITIES
Net income (loss) ($154,000,000)
Depreciation and amortization 135,000,000
Charges related to divestitures and asset sales 46,000,000
Reorganization charges 89,000,000
Payment of reorganization charges (44,000,000)
Working capital (10,000,000)
Other 24,000,000
----------------
Net cash flows provided by
(used for) operating activities $86,000,000
INVESTING ACTIVITIES
Purchases of property, plant and equipment (182,000,000)
Proceeds from sales of other assets 28,000,000
Payments from partnerships 11,000,000
Payments received on leases and loans 6,000,000
Other 13,000,000
----------------
Net cash flows provide by
(used for) operating activities ($124,000,000)
FINANCING ACTIVITIES
Net change in short-term debt (549,000,000)
Payments of long-term debt (4,000,000)
Proceeds from DIP facility 700,000,000
Issuance of long-term debt 7,000,000
Other (7,000,000)
----------------
Net cash flows provided by
(used for) operating activities $147,000,000
Net increase in cash equivalents 109,000,000
----------------
Cash and cash equivalents, beginning of period 762,000,000
----------------
Cash and cash equivalents, end of period $871,000,000
================
About Dana Corporation
Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies. Dana employs 46,000 people in 28
countries. Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually. The
company and its affiliates filed for chapter 11 protection on Mar.
3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq.,
and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker. Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005. (Dana Corporation
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
The Debtors' consolidated balance sheet at March 31, 2006, showed
a $456,000,000 total shareholder' equity resulting from total
assets of $7,788,000,000 and total liabilities of $7,332,000,000.
DANA CORP: Seeks Appointment of a Non-Union Retirees Committee
--------------------------------------------------------------
Dana Corporation and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to appoint an official
committee of retired employees to act as the authorized
representative of persons receiving certain retiree benefits that
are not covered by an active or expired collective bargaining
agreement.
Corinne Ball, Esq., at Jones Day, in New York, relates that the
Debtors currently sponsor at least 50 different Retiree Benefit
Plans for hourly and salaried retirees and their spouses and
eligible dependents. Approximately 17,200 individuals currently
receive Retiree Benefits under collective bargaining agreements
that were negotiated with unions, including:
(1) the International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America,
(2) the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service
Workers International Union, AFL-CIO, CLC,
(3) the International Association of Machinists and Aerospace
Workers, and
(4) the International Brotherhood of Boilermakers.
Of the 17,200 Union-represented individuals currently receiving
Retiree Benefits, approximately 6,400 of those individuals are
associated with a plant that has either been sold or closed.
Thus, for those individuals, there is no current collective
bargaining agreement in place.
In addition, about 9,700 individuals currently receive Retiree
Benefits under various plans but not pursuant to active or
expired collective bargaining agreements.
Ms. Ball notes that addressing Retiree Benefits and other legacy
costs is likely to be a critical component of the Debtors'
overall restructuring plan. Thus, the Debtors have determined
that it will be necessary for them to seek relief under Section
1114 of the Bankruptcy Code.
Section 1114(d) provides that:
"The court, upon a motion by any party in interest, and after
notice and a hearing, shall order the appointment of a
committee of retired employees if the debtor seeks to modify
or not pay the retiree benefits or if the court otherwise
determines that it is appropriate, to serve as the authorized
representative, under this section, of those persons receiving
any retiree benefits not covered by a collective bargaining
agreement. The United States trustee shall appoint any such
committee."
According to Ms. Ball, the Debtors provided a draft of the
Retiree Committee Motion to the U.S. Trustee to discuss and
develop an appropriate, open and fair procedure by which she will
solicit interested Retirees to serve on the Retiree Committee.
Ms. Ball notes that the U.S. Trustee has no objection to the
Motion. However, the U.S. Trustee informed the Debtors that she
reserves her rights to perform more due diligence with respect to
the solicitation process, if warranted.
The proposed Selection Procedures are:
(a) The Debtors have accumulated and sorted data on all of the
Retirees by job classification and discipline as well as
location and business unit. In addition, the Debtors
identified a wide range of service levels at the time of
retirement. From each category of data summarized, the
Debtors developed lists of Retirees that represent a
cross-section of the current Retiree population and will
share these lists with the U.S. Trustee. Each of the
Potential Representatives have retired within the past 25
years.
(b) Within three business days after the Court's approval of
the Retiree Motion, the U.S. Trustee will mail a notice
and questionnaire to each Potential Representative to
solicit its interest in serving on the Retiree Committee.
The Debtors will also post the notice and questionnaire on
these Web Sites:
* http://www.dana.com/reorganization
* http://www.dana.bmcgroup.com/
* http://www.kccllc.net/danacommittee
(c) The questionnaire would make clear that any Potential
Representative interested in serving on the Retired
Committee should complete the questionnaire and fax or
mail it to the U.S. Trustee's Office to be received no
later than August 22, 2006.
(d) On or before August 29, 2006, the U.S. Trustee will select
the individuals to serve on the Retiree Committee and file
an appropriate notice with the Court.
The Debtors assure the Court that they will continue to work with
the U.S. Trustee to modify or refine the Selection Procedures as
the U.S. Trustee deems necessary or appropriate to ensure that a
Retiree Committee that fairly represents the Retirees will be
appointed.
The Debtors seek the appointment of the Retiree Committee as soon
as possible to maximize the chance of a consensual resolution of
the Section 1114 issues in their cases, without the need for
Court intervention, Ms. Ball notes.
About Dana Corporation
Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies. Dana employs 46,000 people in 28
countries. Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually. The
company and its affiliates filed for chapter 11 protection on Mar.
3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq.,
and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker. Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005. (Dana Corporation
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
The Debtors' consolidated balance sheet at March 31, 2006, showed
a $456,000,000 total shareholder' equity resulting from total
assets of $7,788,000,000 and total liabilities of $7,332,000,000.
DELPHI CORP: Judge Drain Approves MobileAria Sale to @Road Inc.
---------------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York approves the sale of MobileAria
Inc.'s assets to @Road Inc., the successful bidder during the
July 6, 2006, auction.
In connection with the sale, the Debtors sought to assume
MobileAria's contracts with Verizon Services Corp. and assign them
to @Road. Verizon argued that the Debtors cannot do this because
of numerous defaults that remain unresolved and have resulted in
over $450,000 in damages to Verizon since January 2006.
With respect to the assumption and assignment of Verizon's
contracts, Judge Drain rules that these terms, among other things,
will apply:
(a) Verizon has asserted that MobileAria is responsible for a
$700,000 payment of certain charges and other liabilities.
Any amounts paid by MobileAria will be credited to the
$700,000. Verizon and MobileAria will each work in good
faith to resolve these matters.
(b) MobileAria will be responsible for certain previously
unasserted pre-closing defaults under the Verizon Contract
up to $1,000,000. Verizon will have one year from the
Closing to assert any Defaults.
(c) The Purchaser agrees to perform the warranty and indemnity
obligations set forth in the Verizon Contract.
(d) With respect to any future obligations that arise
subsequent to the Closing, the Purchaser will perform
those obligations as and when they become due.
(e) If MobileAria is unable to complete certain work in
process repairs previously agreed to, then Purchaser will
be obligated to promptly complete them. MobileAria will
provide $100,000 in escrow to pay the estimated WIP Costs.
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. 34; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DELPHI CORP: Judge Drain Clarifies Incentive-Compensation Range
---------------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York approved the implementation of an
Annual Incentive Plan covering the six-month period from
July 1, 2006, through Dec. 31, 2006, as reported in the Troubled
Company Reporter on July 27, 2006.
Judge Drain clarifies that the range of incentive-compensation
opportunities for covered employees during that period will be
determined pursuant to certain payout curves, which do not include
any incentive-compensation opportunities for corporate or
divisional performance that is below target.
Target
------
EBITDAR-UG target: ($411,000,000)
OIBITDAR-UG targets:
(1) Powertrain ($58,000,000)
(2) Steering ($114,000,000)
(3) Thermal and Interior ($140,000,000)
(4) Electronics and Safety $179,000,000
(5) Packard Electric ($17,000,000)
(6) Product and Service Solutions $22,000,000
(7) Automotive Holdings Group ($634,000,000)
(8) Medical ($9,000,000)
The remainder of the AIP Supplement relating to the continuation
for performance periods from and after January 1, 2007, is
adjourned to the January 11, 2007, omnibus hearing and will be
subject to notice to interested parties and an opportunity to
object.
The Court will retain jurisdiction over the Debtors and the
Covered Employees participating in any AIP implemented pursuant to
this Supplemental AIP Order, including without limitation for the
purposes of interpreting, implementing, and enforcing the terms
and conditions of any AIP.
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. 34; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DELPHI CORP: Completes Sale of U.S. Battery Plant to JCI
--------------------------------------------------------
Delphi Corporation completed the sale of its battery manufacturing
facility in New Brunswick, New Jersey, to Johnson Controls, Inc.,
effective Aug. 1, 2006. This sale, which includes ownership of
the facility and assets, and employment of approximately one-third
of the hourly workforce, represents the final step in the two-
stage global battery business sale reported in July 2005.
"The sale of this plant is an important step forward in our
overall restructuring plan," said James A. Bertrand, president,
Delphi Automotive Holdings Group. "A consensual agreement with
our customers and the International Union of Electrical Workers
paved the way for the sale of Delphi's U.S.-based battery assets,
and concludes our effort to divest Delphi's global battery
business."
Approximately 100 New Brunswick employees transition with the site
to JCI. The remaining workforce has exercised either an early
retirement or a buy-out option. Delphi has one remaining battery
production facility in Fitzgerald, Georgia, that will continue to
build out batteries as a tier-2 supplier to JCI into 2007.
Based in Troy, Michigan, Delphi Corporation (Pink Sheets: DPHIQ)
-- 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 CORP: Negotiations with GM & UAW Slow Down
-------------------------------------------------
Negotiations among Delphi Corp., General Motors Corp., and the
United Auto Workers union, have lost momentum beginning in July,
Bloomberg News reports, citing people at GM and Delphi.
A union official also told Bloomberg News that the parties are at
odds over wages and Delphi's plant closings.
The hearing on Delphi's request to reject their collective
bargaining agreements with unions is set to begin on August 11,
2006. However, a union official is not optimistic that
negotiations will be resolved by then, Bloomberg relates.
"I don't think management is convinced that we need to get
something done by then," George Anthony, chairman of UAW Local 292
at a Delphi plant in Kokomo, Indiana, told Bloomberg.
Bloomberg's Jeff Green notes that the parties continue to
negotiate. Delphi and GM have expressed that they remain hopeful
that they will arrive at a resolution.
About General Motors Corp.
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the
world's largest automaker, has been the global industry sales
leader since 1931. Founded in 1908, GM employs about 317,000
people around the world. It has manufacturing operations in 32
countries and its vehicles are sold in 200 countries.
About Delphi
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.
DELTA AIR: Enters Stipulation Allowing GRP to Pursue Foreclosure
-----------------------------------------------------------------
GRP Financial Services Corporation intends to commence an action
before the Superior Court of the State of South Carolina
foreclosing a mortgage dated November 10, 2003, executed by Brian
V. and Ann M. Centi. The mortgage is a first lien against the
real property commonly known as 2006 East North Street,
Greenville, South Carolina.
GRP says that Delta Air Lines, Inc., must be named as a defendant
in the Foreclosure Action because Delta has a lien on said
property.
The laws of the State of South Carolina require a plaintiff in a
foreclosure action to name as a defendant each other person with
a subordinate lien on the property.
GRP represents that under the laws of the State of South
Carolina, Delta's lien on the property is subordinate to the GRP
lien.
Pursuant to a stipulation, the parties agree that:
(1) the automatic stay imposed will be lifted with respect to
GRP solely to the limited extent necessary to enable GRP
to proceed with the Foreclosure Action;
(2) In no event will the Debtors or their estates be liable to
GRP in any way whatsoever with respect to the Foreclosure
Action;
(3) GRP waives, releases and discharges the Debtors, their
estates and their respective successors, and assigns from
any liability whatsoever and from all related actions,
causes of action, suits, debts, obligations, liabilities,
accounts, damages, defenses, or demands whatsoever,
whether known or unknown; and
(4) The Debtors' agreement to the modification of the
automatic stay will not be deemed an agreement by the
Debtors to provide assistance to or to cooperate with GRP
in any way in its efforts to prosecute the Foreclosure
Action.
About Delta Air Lines
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
DELTA AIR: Permits PBGC to File Consolidated Claims
---------------------------------------------------
Delta Air Lines, Inc., and its debtor-affiliates' notice of the
Claims Bar Date requires that any holder of a claim against more
than one Debtor must file a separate proof of claim with respect
to each such Debtor.
The Debtors and the Pension Benefit Guaranty Corp. have
identified three pension plans in Delta Air Lines, Inc.'s
controlled group that are covered by Title IV of Employee
Retirement Income Security Act:
-- the Delta Retirement Plan;
-- the Delta Pilots Retirement Plan; and
-- the Western Air Lines, Inc. Pilots Defined Benefit Plan.
The PBGC believes that it must file multiple proofs of claim
against each Debtor, representing the contingent and other claims
for which the PBGC believes the Debtors are jointly and severally
liable to the Plans and the PBGC under 29 U.S.C. Sections 1307
and 1362.
Pursuant to a stipulation, the parties agree that:
(1) any proof of claim or amendment thereto filed in Case No.
05-17923-ASH by the PBGC on its own behalf or on behalf of
the Plans will be deemed to be filed in each of the cases
of the Debtors;
(2) The PBGC will not be required at this point in time to
file any claims with respect to the Delta Retirement Plan.
Rather, the PBGC will have 45 days from the date, if any,
on which:
(i) Delta files a PBGC Form 600 Distress Termination
Notice of Intent to Terminate seeking a distress
termination of Delta Retirement Plan or
(ii) the PBGC commences judicial action to terminate the
Delta Retirement Plan pursuant to 29 U.S.C. Section
4042.
At that point in time or before, the PBGC may file
additional claims with respect to the Delta Retirement
Plan, each of which claims will be filed only in Case No.
17923-ASH but deemed filed against all of the Debtors.
(3) If the PBGC determines that it must file a proof of claim
against any Delta affiliate that files for Chapter 11
relief in the Southern District of New York subsequent to
July 18, 2006, the Debtors and the PBGC may enter into an
agreement under which any proof of claim or amendment that
the PBGC files in Case No. 05-17923-ASH will be deemed to
be filed in the Delta affiliate's case.
Because there are 19 Debtors, the PBGC, absent the Stipulation,
would likely file a great number of separate proofs of claim.
These multiple claims would impose a significant and unnecessary
administrative burden on the Debtors, the claims agent, the PBGC,
and the Court.
About Delta Air Lines
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
DIGITAL LIGHTWAVE: Issues $420,404 Promissory Note to Optel
-----------------------------------------------------------
Digital Lightwave, Inc., issued, on July 18, 2006, a secured
promissory note to Optel in the original principal amount of
$420,404. The issuance of the promissory note was to reimburse
Optel for the draw of $420,404 on the Letter of Credit by MC Test
Service, Inc.
The Company entered into a letter agreement with MC Test Service,
Inc. whereby MC Test provides outsourced manufacturing services to
the Company. Optel Capital, LLC, an entity controlled by the
Company's largest stockholder and current chairman of the board of
directors, Dr. Bryan J. Zwan, renewed $2 million of the
irrevocable letter of credit it established on behalf of the
Company, which names MC Test as beneficiary and extended the
expiration date to December 30, 2006.
The Company's obligation evidenced by the secured promissory note
bears interest at 10.0% per annum and is secured by a security
interest in substantially all of the Company's assets. Principal
and any accrued but unpaid interest under the secured promissory
note is due and payable upon demand by Optel at any time after
August 31, 2006.
The Company continues to have insufficient short-term resources
for the payment of its current liabilities. As of July 18, 2006,
the Company has been unable to secure any financing agreement or
to restructure its financial obligations with Optel.
The Company owed Optel, as of July 18, 2006, approximately $53.9
million in principal plus approximately $8.9 million of accrued
interest.
Based in Clearwater, Florida, Digital Lightwave, Inc., provides
the global communications networking industry with products,
technology and services that enable the efficient development,
deployment and management of high-performance networks. The
Company designs, develops and markets a portfolio of portable and
network-based products for installing, maintaining and monitoring
fiber optic circuits and networks. The Company's product lines
include: Network Information Computers, Network Access Agents,
Optical Test Systems, and Optical Wavelength Managers. The
Company's wholly owned subsidiaries are Digital Lightwave (UK)
Limited, Digital Lightwave Asia Pacific Pty, Ltd., and Digital
Lightwave Latino Americana Ltda.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 11, 2006,
Grant Thornton LLP raised substantial doubt about Digital
Lightwave, Inc.'s ability to continue as a going concern following
its review of the Company's financial statements for the year
ended Dec. 31, 2005. The auditing firm pointed to the Company's
net losses in the years 2004 and 2005 and capital and
stockholders' deficits as of Dec. 31, 2005.
DOWNEY FINANCIAL: Earns $49.5 Million in Second Quarter of 2006
---------------------------------------------------------------
Downey Financial Corp.'s net income for the second quarter of 2006
totaled $49.5 million, down 22.7% from the $64.1 million net
income reported in the second quarter of 2005.
For the first six months of 2006, Downey's net income totaled
$94.3 million, down 18.6% from the $115.8 million for the first
six months of 2005.
The Company's net interest income totaled $132.3 million in the
second quarter of 2006, up $22.0 million or 19.9% from a year ago.
The increase, the Company said, reflected both a higher level of
average interest-earning assets and effective interest rate
spread.
For the first six months of 2006, the Company's net interest
income totaled $258.3 million, up $42.9 million or 19.9% from the
year-ago period.
Operating expense totaled $60.9 million in the current quarter, up
$2.7 million from a year ago due to a 4.4% increase in general and
administrative expense, as most major categories were higher.
However, compared with the first quarter of 2006, general and
administrative expense was down $0.6 million.
For the first six months of 2006, operating expense totaled
$122.5 million, up $6 million from a year ago.
* * *
On Dec. 1, 2003, Moody's Investors Service assigned Downey
Financial a Ba1 issuer rating with a stable outlook.
DRESSER INC: High Leverage Prompts Moody's to Downgrade Ratings
---------------------------------------------------------------
Moody's Investors Service downgraded Dresser, Inc.'s ratings. The
rating outlook is negative.
The downgrade of the company's ratings reflects:
(1) continued high financial leverage for the Ba3 rating,
despite recent debt reduction efforts, and financial
performance, that while improving, remains below Moody's
expectations, particularly given current up-cycle
conditions;
(2) continuing delays with respect to the filing of its
financial statements; and
(3) a weak internal control environment.
This concludes the review of Dresser's ratings that commenced on
March 28, 2006.
The negative outlook reflects:
(1) the challenges the company faces to remediate its material
weaknesses over internal controls; and
(2) that the amount of time to complete the restatements could
be considerable.
The inability to continue receiving support from its lender group
could result in a ratings downgrade, as the company would face
significant liquidity pressures.
Should the delay in completing the financial statements become
extended materially beyond September, 2006 and if Moody's
determines that it lacks sufficient financial information to
appropriately monitor the company's credit, the ratings could be
withdrawn.
The outlook could stabilize if Dresser is able to file its
restated financial statements with the SEC in the near-term and
becomes current on its quarterly financial statement filings;
is able to make material progress in resolving its material
weaknesses; and continues to exhibit positive trends with respect
to its financial performance. However, the rating and outlook
would be subject to a full review of the audited financial
statements.
Moody's recognizes that Dresser has been successful recently
in reducing debt through asset sales and cash flow and that
the company's financial performance has been improving.
Nevertheless, the company's leverage has continued to remain
high for a Ba3 rating and its financial performance has remained
below Moody's expectations, with EBITDA margins, while improving,
well below the average for its Ba3 rated peers. Moody's estimates
Dresser's debt to be materially above the average
for its Ba3 rated peers.
Moody's believes that despite the expectation that domestic and
international demand for energy related goods and services
will remain strong over the near term, we do not anticipate that
Dresser will be able to reduce its leverage sufficiently over the
near term to achieve a level of indebtedness that is in a range
appropriate for a Ba3 rating given the cyclicality and intense
competition inherent in the sector.
Moody's believes that ongoing financial statement filing delays
have created significant management distractions. In March of
this year, the company announced its inability to file its 2005
Annual Report on Form 10-K by the March 31, 2006 requirement. And
in May, the company announced that it would need to restate its
financial statements for fiscal year 2004, as well as the 2004 and
2005 quarterly financial statements, representing the third time
that the company has had to restate its financial results over the
past three years.
The filing delay mainly stemmed from the need for additional
accounting efforts associated with certain foreign joint ventures
and the November 2005 sale of two of its businesses. The latest
restatement is, in part, the result of errors associated with the
company's businesses that were sold last November, including hedge
accounting documentation and income tax treatment on inter-company
inventory transfers. In addition, the restatements are due to
accounting errors related to the company's continuing operations,
including the timing of certain revenue and expense items. It
remains unclear at this time if the company will need to restate
its financial statements for periods prior to 2004.
As a result of the filing delay, Dresser was in violation of its
financial reporting covenants under its senior unsecured term loan
and senior subordinated notes. However, the company
has received extensions for its financial statement delivery
requirements from its lenders. If Dresser is unable to file by
these deadlines and is unable to obtain additional waivers, the
secured lenders will have the option to accelerate payment, which
would put significant liquidity pressure on the company. The
company would have 30 days to cure a notice of default from the
unsecured lenders before they could accelerate the obligations.
Moody's notes that Dresser has continued to receive support from
its lender group over the past two years.
Dresser has reported six material weaknesses, two of which relate
to its on/off valves business, which was sold in November 2005.
These weaknesses are the root cause for the company's filing
delays and restatements. While Moody's notes that the financial
impact of the restatements appears to be modest, the nature and
pervasiveness of the internal control issues reported are very
serious because they relate to company-level controls and indicate
a weak control environment.
Dresser is making efforts to address the material weaknesses;
however, the company still has substantial work to do in
addressing company-level controls and the control environment,
which will continue to remain a significant distraction for
management. While Moody's believes that management has sufficient
information to run the business, they do not appear to have an
integrated system that would enable tighter control of the
business.
Moody's notes that these weaknesses would be much more problematic
if management was facing with a more challenging market
environment. We do not expect the company's material weaknesses
to be fully remediated until at least 2007. Until the material
weaknesses are fully resolved, some uncertainty remains regarding
the company's financial reporting, particularly given the
company's substantial international exposure.
Moody's took action on these Dresser ratings:
i) Corporate Family Rating -- downgraded to B1 from Ba3
ii) Senior secured Tranche C term loan maturing 2009 -
downgraded to B1 from Ba3
iii) Senior unsecured term loan maturing 2010 -- downgraded to
B2 from B1
iv) Senior subordinated notes maturing 2011 -- downgraded to B3
from B2
Dresser, Inc. is headquartered in Addison, Texas.
E*TRADE FINANCIAL: Earns $156 Million in Second Quarter of 2006
---------------------------------------------------------------
E*Trade Financial Corporation reported net income of $156 million
for the second quarter ended June 30, 2006, compared to
$102 million a year ago.
"The strength of our second quarter results demonstrates the
flexibility of our model, particularly amid an environment filled
with significant macroeconomic uncertainty," Mitchell H. Caplan,
chief executive officer of E*Trade Financial Corporation, said.
"As retail customers respond to the market environment, they are
increasingly looking for value from a broader set of financial
solutions. Through our compelling value proposition across
investing, trading, banking and lending products, we remain
ideally positioned to capitalize on short-term market
opportunities and long-term secular growth trends."
The Company's total net revenue for the second quarter increased
58 percent year over year to a record $611 million, and its net
interest income after provision for loan losses also increased 71
percent year over year to $334 million -- representing 55 percent
of total net revenue.
In addition, the Company's enterprise net interest spread
increased to 291 basis points as the Company continued to benefit
from strong organic growth in customer cash and growth in higher
yielding assets. Non-interest income increased 45 percent year
over year to $277 million. Operating margin expanded 700 basis
points year over year to a record 43 percent.
About E*Trade Financial
The E*Trade Financial family of companies provides financial
services including trading, investing, banking and lending for
Retail and Institutional customers. Securities products and
services are offered by E*Trade Securities LLC (NASD/SIPC Member).
Bank and lending products and services are offered by E*Trade
Bank, a Federal savings bank, FDIC Member, or its subsidiaries.
* * *
As reported in the Troubled Company Reporter on June 8, 2006,
Moody's Investors Service upgraded the senior unsecured rating of
E*Trade Financial to Ba2 from B1 and long term deposit rating of
E*Trade's thrift subsidiary, E*Trade Bank, to Baa3 from Ba2. The
rating outlook remains positive.
As reported in the Troubled Company Reporter on March 2, 2006,
Standard & Poor's Ratings Services revised the outlook on E*Trade
Financial Corp. to positive from stable and raised its
counterparty credit ratings on E*Trade Bank to 'BB+/B' from
'BB/B'. The rating on E*Trade was affirmed at 'B+' and the
outlook on E*TRADE Bank remains stable.
ECV DEVELOPMENT: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: ECV Development, LLC
5050 Avenida Encinas, Suite 160
Carlsbad, CA 92008
Bankruptcy Case No.: 06-02001
Chapter 11 Petition Date: July 28, 2006
Court: Southern District of California (San Diego)
Judge: Peter W. Bowie
Debtor's Counsel: Raymond R. Lee, Esq.
Suppa, Trucchi & Henein, LLP
3055 India Street
San Diego, CA 92103
Tel: (619) 297-7330
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
The Debtor does not have any creditors who are not insiders.
EL PASO: Moody's Rates New $1.25 Billion Credit Facility at B1
--------------------------------------------------------------
Moody's Investors Service assigned B1 senior secured ratings to El
Paso Corporation's new $1.25 billion revolving credit facility and
$500 million deposit loan facility and withdrew the B1 senior
secured rating on the bank loans that they replaced. The
borrowers under the facilities are El Paso Corporation and three
of its pipeline subsidiaries: Colorado Interstate Gas Company, El
Paso Natural Gas Company, and Tennessee Gas Pipeline Company.
The B1 ratings reflect the substantial value of the collateral,
which consists of the equity of the above mentioned pipelines.
The B1 ratings also reflect the effective subordination of the
pipeline equity pledged under the credit agreements to the claims
of the Ba2-rated senior unsecured pipeline bonds.
The $1.75 billion of new facilities replace the prior revolver and
letter of credit facility and extend their maturities by two
years. The revolver matures in 2009 and the deposit loan facility
matures in 2011. Both can be used for either revolving loans or
letters of credit. The terms and conditions are similar to those
in the prior facilities. However, one notable change is that ANR
Pipeline Company is no longer a borrower under the facilities, nor
is its equity part of the collateral, resulting in a reduction of
El Paso's encumbered assets.
The facilities require El Paso Corporation to keep its
consolidated debt-to-EBITDA ratio at or below 5.75x and to
maintain a fixed charge coverage ratio of at least 1.75x. Any new
borrowings by the pipeline subsidiary borrowers cannot cause their
respective consolidated debt-to-EBITDA to exceed 5x.
Assignments:
Issuer: El Paso Corporation
* Senior Secured Bank Credit Facility, Assigned B1
Withdrawals:
Issuer: El Paso Corporation
* Senior Secured Bank Credit Facility, Withdrawn, previously
rated B1
Headquartered in Houston, Texas, El Paso Corporation is a
diversified natural gas company.
EL POLLO: Further Extends Tender Offer Expiration to Sept. 29
-------------------------------------------------------------
El Pollo Loco Inc. and EPL Intermediate Inc. disclosed that in
connection with the previously announced tender offer and consent
solicitation by El Pollo Loco for its 11-3/4% Senior Notes Due
2013 and by Intermediate for its 14-1/2% Senior Discount Notes Due
2014, the companies are further extending the expiration time of
the Offer to 5 p.m., New York City time, on Sept. 29, 2006.
As of June 26, 2006, El Pollo Loco had received tenders and
consents for $125,726,000 in aggregate principal amount of the
11-3/4% Notes, representing 100% of the outstanding 11-3/4%
Notes and Intermediate had received tenders and consents for
$39,342,000 in principal amount at maturity of the 14-1/2%
Notes, representing 100% of the outstanding 14-1/2% Notes.
The requisite consents to adopt the proposed amendments to the
indentures governing the Notes have been received, and
supplemental indentures to effect the proposed amendments
described in the Offer to Purchase and Consent Solicitations
Statement, dated May 15, 2006, have been executed. However, the
amendments will not become operative until the Notes are accepted
for payment under the terms of the Offer.
The Offer is subject to the satisfaction of certain conditions,
including:
-- consummation of the Common Stock Offering,
-- El Pollo Loco entering into a new credit facility,
-- a requisite consent condition,
-- minimum tender condition,
-- condition that each of the Offers be consummated and
that each of El Pollo Loco and Intermediate receives
consents from a majority of holders of each of the
11-3/4% Notes and the 14-1/2% Notes and
-- other general conditions.
Except as described above, all other provisions of the Offer with
respect to the Notes are as presented in the Offer to Purchase.
The company reserves the right to further amend or extend the
Offer in its sole discretion.
Requests for documents may be directed to the information agent
for the Offer at:
Global Bondholder Services Corp.
Tel: 866-937-2200
Additional information concerning the Offer may be obtained by
contacting the dealer manager and solicitation agent for the Offer
at:
Merrill Lynch, Pierce, Fenner & Smith Inc.
Tel: 212-449-4914 (collect)
888-ML4-TNDR (U.S. toll-free)
About El Pollo Loco
El Pollo Loco -- http://www.elpolloloco.com/-- pronounced "L Po-
yo Lo-co" and Spanish for "The Crazy Chicken," is the United
States' leading quick-service restaurant chain specializing in
flame-grilled chicken and Mexican-inspired entrees. Founded in
Guasave, Mexico, in 1975, El Pollo Loco's long-term success stems
from the unique preparation of its award-winning "pollo" -- fresh
chicken marinated in a special recipe of herbs, spices and citrus
juices passed down from the founding family.
* * *
As reported in the Troubled Company Reporter on May 23, 2006,
Standard & Poor's Ratings Services expects to raise its corporate
credit rating on El Pollo Loco Inc. to 'B+' from 'B' upon the
successful completion of the company's planned IPO. S&P said the
outlook is stable. Standard & Poor's also assigned a 'B+' rating,
same as the expected corporate credit rating, to the company's
planned $200 million senior secured bank loan. A recovery rating
of '2' is also assigned to the loan, indicating the expectation
for substantial recovery of principal in the event of a payment
default.
Moody's Investors Service upgraded El Pollo Loco, Inc.'s
corporate family rating to B1 from B3 and assigned B1 ratings to
the company's proposed $200 million senior secured credit facility
following the company's proposed initial public offering of shares
of its common stock and planned refinancing of its existing debt.
At the same time, the SGL-2 Speculative Grade Liquidity rating was
affirmed. Moody's said the outlook remains stable.
ENIVID INC: Trust's D&O Lawsuit Survives Summary Judgment
---------------------------------------------------------
James B. Boles, the Liquidation Trust Representative of the
Liquidating Trust created under the Official Committee of
Unsecured Creditors' Amended Plan of Liquidation Under Chapter 11
of the Bankruptcy Code dated September 30, 2004, as Modified
November 23, 2004, for Enivid, Inc. (f/k/a divine, inc.) filed a
113-page Complaint (Bankr. D. Mass. Adv. Pro. No. 04-1439)
containing 411 paragraphs and alleges 16 counts against Andrew J.
Filipowski, Paul Humenansky, Michael Cullinane and Jude Sullivan,
who served as the debtor's former officers and directors. Mr.
Boles asserts claims against the debtor's former officers and
directors for, inter alia, breaches of fiduciary duty, deepening
insolvency, equitable subordination, and avoidance of preferential
and fraudulent transfers. The Defendants moved to dismiss.
In a decision published at 2006 WL 1933807, the Honorable Joan N.
Feeney rules on summary judgment that:
(1) Mr. Boles' allegations of misrepresentations and
nondisclosures by the defendants do not have to
be pleaded with particularity;
(2) the complaint sufficiently alleges claims for
breach of fiduciary duty of loyalty;
(3) the complaint sufficiently alleges claims for
breach of fiduciary duty of care;
(4) the complaint sufficiently alleges claims for
breach of fiduciary duty of good faith;
(5) the complaint fails to state claim for deepening
insolvency;
(6) the complaint supports Mr. Boles' claim for
equitable subordination; and
(7) the complaint states colorable avoidance claims.
Accordingly, the Defendants' Motions to Dismiss are granted in
part and denied in part. A full-text copy of Judge Feeney's 55-
page slip opinion is available at
http://www.mab.uscourts.gov/opinions/5513994.pdfat no charge.
Judge Feeney has directed the Defendants to file their Answers to
Mr. Boles' Complaint and says she'll issue a pre-trial order
thereafter.
Divine, Inc., an affiliate of RoweCom Inc., was "an extended
enterprise company, serving to make the most of customer,
employee, partner, and market interactions, and through a holistic
blend of technology, services, and hosting solutions, to assist
its clients in extending their enterprise." The Company filed for
chapter 11 protection on February 25, 2003 (Bankr. Mass. Case No.
03-11472). When the Debtors sought protection
from their creditors, they listed $271,372,593 in total assets and
$191,957,065 in total debts. Richard E. Mikels, Esq., Kevin J.
Walsh, Esq., Adrienne K. Walker,
Esq., at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo and J.
Douglas Bacon, Esq., Stephen R. Tetro, Esq., and Adam R. Skilken,
Esq., represented the Debtors. Christopher J. Panos, Esq., at
Craig and Macauley, P.C., represented the Official Committee of
Unsecured Creditors, which successfully prosecuted a Chapter 11
Plan of Liquidation to confirmation in 2005. The Plan projected
general unsecured creditors would recover about 27%, excluding
recoveries on account of D&O Insurance.
FAIRFAX FINANCIAL: Fitch Holds Low-B Ratings on Negative Watch
--------------------------------------------------------------
Fitch Ratings did not change the ratings for Fairfax Financial
Holdings Limited, Odyssey Re Holdings Corp and its insurance
subsidiaries, and TIG Holdings Inc. following the company's recent
announcement that it will commute a reinsurance contract and
restate its financial results.
However, the ratings remain on Negative Rating Watch due to the
continued substantial uncertainty surrounding the ongoing
investigations of Fairfax and Odyssey Re.
TIG's Negative Rating Watch reflects the alignment of the
company's and Fairfax's debt ratings given that Fairfax has
traditionally guaranteed TIG's debt. The holding company ratings
of Crum & Forster Holdings Corp., and the insurance company
ratings of Crum & Forster Insurance Group, Northbridge Financial
Insurance Group, and TIG Insurance Group are not affected.
Fairfax announced that it expects to commute its $1 billion
corporate insurance cover with a Swiss Re subsidiary in early
August 2006, resulting in a pretax loss of approximately $415
million in the third quarter 2006. While Fitch has always
adjusted the reported results of Fairfax to exclude the finite
benefit from the Swiss Re Cover and other similar contracts, the
commutation is still viewed favorably as it reduces reinsurance
credit risk, lowers interest expense on funds withheld, improves
liquidity and provides for greater transparency of results.
The company also estimates that its shareholders' equity will be
reduced by approximately $225 million to $240 million as a result
of a restatement of prior period financial results. The
restatement is necessary to correct for various non-cash
accounting errors (primarily in 2001 and prior years) that were
discovered during the company's review of the Swiss Re
commutation, and includes an estimated $175 million to $190
million that relates to erroneous accounting for the Swiss Re
cover. Fitch does not consider this level of restatement to be
significant relative to the company's capitalization.
In addition, Fitch's ratings of Fairfax and its subsidiaries
incorporate a certain amount of risk related to the ultimate
potential negative effect of issues surrounding the company's use
of finite reinsurance and transactions in Fairfax securities.
These issues have led to various subpoenas received by Fairfax,
its subsidiaries, its independent auditors and a shareholder, in
addition to a class action lawsuit filed by the company's debt
holders.
However, there continues to be a risk that the ongoing
investigations of Fairfax and Odyssey Re by the Securities and
Exchange Commission and the U.S. Attorney's office for the
Southern District of New York could bring about a civil action
against the company. Fitch believes that any such action could
negatively affect the companies' franchise, reputation, and
competitive position, particularly for Odyssey Re as a reinsurer,
in addition to the financial implications of any fines and/or
penalties levied.
Fitch will continue to monitor events for any additional
developments related to the restatements or ongoing investigations
of the company.
These ratings remain on Rating Watch Negative by Fitch:
Fairfax Financial Holdings Limited:
-- Issuer Default Rating 'BB-'
-- $62 million unsecured due April 15, 2008 'B+'
-- $466 million unsecured due April 15, 2012 'B+'
-- $100 million unsecured due Oct 1, 2015 'B+'
-- $184 million unsecured due April 15, 2018 'B+'
-- $98 million unsecured due April 15, 2026 'B+'
-- $91 million unsecured due July 15, 2037 'B+'
-- $137 million convertible due July 15, 2023 'B+'
Fairfax, Inc:
-- Issuer Default Rating 'BB-'
-- $101 million exchangeable due Nov 19, 2009 'B+'
Odyssey Re Holdings Corp:
-- Issuer Default Rating 'BBB-'
-- $50 million series A unsecured March 15, 2021 'BB+'
-- $50 million series B unsecured due March 15, 2016 'BB+'
-- $40 million unsecured due Nov 30, 2006 'BB+'
-- $80 million convertible due June 15, 2022 'BB+'
-- $225 million unsecured due Nov 1, 2013 'BB+'
-- $125 million unsecured due May 1, 2015 'BB+'
-- $50 million series A preferred shares 'BB'
-- $50 million series B preferred shares 'BB'
Odyssey Re Group:
Odyssey America Reinsurance Corporation:
Clearwater Insurance Company:
-- Insurer financial strength 'BBB+'
TIG Holdings, Inc:
-- Issuer Default Rating 'BB-'
-- TIG Capital Trust I $52 million trust preferred stock
due 2027 'B'
These ratings remain unchanged by Fitch:
Crum & Forster Holdings Corp:
-- Issuer Default Rating 'BB-'
-- $300 million unsecured due June 15, 2013 'B+'
Crum & Forster Insurance Group:
Crum & Forster Insurance Company:
Crum & Forster Indemnity Company:
The North River Insurance Company:
United States Fire Insurance Company:
-- Insurer financial strength 'BBB-'
Northbridge Financial Insurance Group:
Commonwealth Insurance Company:
Commonwealth Insurance Company of America:
Federated Insurance Company of Canada:
Lombard General Insurance Company of Canada:
Lombard Insurance Company:
Markel Insurance Company of Canada:
Zenith Insurance Co (Canada):
-- Insurer financial strength 'BBB'
TIG Insurance Group:
TIG Indemnity Company:
TIG Insurance Company:
TIG Specialty Insurance Company:
-- Insurer financial strength 'BB+'
FERRO CORPORATION: Pays $50 Million 8% Debentures in Full
---------------------------------------------------------
Ferro Corporation repaid in full its 8% debenture at a cost of
$50,511,111.11, principal plus all accrued and unpaid interest.
The Company disclosed that in a letter dated July 28, 2006, J.P.
Morgan Trust Company accelerated the payment of the Company's 8%
debentures due June 15, 2025, with a principal amount of
$50 million.
The event of default that triggered the acceleration was the
delayed filing of the Company's financial statements and an
Officer's Certificate relating to the Company's compliance with
the terms of the indenture.
In order to meet the accelerated payment requirements, the Company
says it has drawn on the term loans of its credit facility. The
Company relates that the accelerated repayment of the Debentures,
and other previously reported accelerated obligations, is expected
to result in the Company taking a pre-tax charge in the period
ended June 30, 2006 of approximately $2.5 million related to the
immediate expensing of unamortized debt issuance costs and
original issue discounts.
Headquartered in Cleveland, Ohio, Ferro Corporation (NYSE:FOE)
-- http://www.ferro.com/-- produces performance materials for
manufacturers, including coatings and performance chemicals. The
Company has operations in 20 countries and has approximately 6,800
employees globally.
* * *
As reported in the Troubled Company Reporter on April 3, 2006,
Standard & Poor's Ratings Services lowered its ratings on Ferro
Corp., including its corporate credit rating to 'B+' from 'BB'.
All ratings remain on CreditWatch with negative implications,
where they were placed Nov. 18, 2005.
FLYI INC: Appoints Richard Kennedy as President
-----------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, FLYi, Inc., disclose that Richard Kennedy has been
appointed as the president of FLYi and Independence Air, Inc.,
effective July 19, 2006.
Mr. Kennedy retains the title of corporate secretary.
Mr. Kennedy joined the company as its general counsel in 1996,
and was then appointed vice president in 1997. He has been
actively involved in the company's leading activities as well as
its Chapter 11 filing.
From 1991 until 1996, Mr. Kennedy was with British Aerospace
Holdings, Inc., where he served in various capacities including
contract negotiation, aircraft finance, and financial
restructuring. Prior to that, Mr. Kennedy was a private attorney
in Washington, D.C., for more than ten years.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors. As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000. (FLYi Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., 215/945-7000).
FOAMEX INT'L: Court Lifts Stay to Permit Sealy to Pursue Claims
---------------------------------------------------------------
Foamex International Inc. and its debtor-affiliates have reached a
stipulation with Continental Casualty Company and Sealy, Inc.
At the parties' behest, the U.S. Bankruptcy Court for the District
of Delaware lifts the automatic stay to allow Continental and
Sealy to prosecute their declaratory judgment action before the
U.S. District Court for the Southern District of New York to a
final, non-appealable judgment, and execute upon the judgment, if
any, upon the earlier to occur of 30 days after the effective date
of the Debtors' Reorganization Plan or September 30, 2006.
As reported in the Troubled Company Reporter on Feb. 20, 2006,
Sealy, Inc., and Foamex International, Inc., were parties to a
Supply Agreement dated January 1, 2002. Sealy supplied baled
mattress scrap for use in Foamex's manufacture of flexible
polyurethane foam for bedding.
The Insurance Section of the Supply Agreement obligated Foamex to
obtain commercial automobile liability insurance and name Sealy as
an additional insured. The insurance Foamex obtained for
Sealy will be primary to any other valid and collectible
insurance. Sealy's affiliates are provided with the same
additional insured primary coverage.
If the District Court rules in favor of Continental and Sealy, the
judgment will be treated as a non-priority general unsecured claim
in the Debtors' Chapter 11 cases.
During the period that the automatic stay remains in effect,
Judge Walsh directs the Debtors to provide Continental and Sealy
with non-privileged, non-confidential documents that are relevant
to the New York Action.
Continental and Sealy's request to lift the automatic stay is
deemed withdrawn, without prejudice.
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. 23; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
FOAMEX INTERNATIONAL: Ralph Douglas Sells 21,000 Shares of Stock
----------------------------------------------------------------
Ralph K. Douglas, former executive vice president and chief
financial officer of Foamex International, Inc., exercised his
stock options and acquired 21,000 shares of Foamex common stock at
$2.21 per share on July 24, 2006. Mr. Douglas then disposed the
acquired stock at $3.85 per share, according to a Form 4 filed
with the U.S. Securities and Exchange Commission.
Mr. Douglas reported that he no longer owned any shares of Foamex
common stock as of July 25, 2006. His stock options expire
August 12, 2006.
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. 23; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
GENERAL MOTORS: Negotiations with Delphi & UAW Slow Down
--------------------------------------------------------
Negotiations among Delphi Corp., General Motors Corp., and the
United Auto Workers union, have lost momentum beginning in July,
Bloomberg News reports, citing people at GM and Delphi.
A union official also told Bloomberg News that the parties are at
odds over wages and Delphi's plant closings.
The hearing on Delphi's request to reject their collective
bargaining agreements with unions is set to begin on August 11,
2006. However, a union official is not optimistic that
negotiations will be resolved by then, Bloomberg relates.
"I don't think management is convinced that we need to get
something done by then," George Anthony, chairman of UAW Local 292
at a Delphi plant in Kokomo, Indiana, told Bloomberg.
Bloomberg's Jeff Green notes that the parties continue to
negotiate. Delphi and GM have expressed that they remain hopeful
that they will arrive at a resolution.
About Delphi
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.
About General Motors Corp.
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the
world's largest automaker, has been the global industry sales
leader since 1931. Founded in 1908, GM employs about 317,000
people around the world. It has manufacturing operations in 32
countries and its vehicles are sold in 200 countries.
* * *
As reported in the Troubled Company Reporter on April 7, 2006
Moody's Investors Service reviews for possible downgrade General
Motors Acceptance Corporation's Ba1 long-term rating and
Residential Capital Corporation's Baa3 long-term and Prime-3
short-term ratings will continue.
As reported in the Troubled Company Reporter on April 5, 2006,
Standard & Poor's Ratings Services held its ratings on General
Motors Acceptance Corp. ('BB/B-1') and on GMAC's subsidiary,
Residential Capital Corp. ('BBB-/A-3'), on CreditWatch with
developing implications.
GLOBE BUILDING: Environmental Dispute Brews in Bankruptcy Court
---------------------------------------------------------------
Gordon E. Gouveia serves as the Chapter 7 Trustee for Globe
Building Materials, Inc.'s estate. Globe filed for chapter 11
protection (Bankr. N.D. Ind. Case No. 01-60182) on January 19,
2001, and the case converted to a chapter 7 liquidation on On
April 4, 2001.
On June 27, 2005, the Minnesota Pollution Control Agency filed a
Complaint (Adv. Pro. No. 05-6100) seeking injunctive relief to
require action by the Chapter 7 Trustee to investigate and abate
the alleged release of hazardous substances from storage tanks
located on a property located at and around 1107, 1120, 1130, and
1147 East Seventh Street, St. Paul, Minnesota. Globe purchased
the property in 1986. While operating its asphalt building
materials business on the Property, Globe owned and operated
approximately 20 aboveground and underground storage tanks
containing asphalt, fuel oil, and liquid laminate. Four or five
of the tanks appear to have been properly taken out of service;
the State wants all of the tanks taken care of. Otherwise, the
State says, these tanks present imminent threats to public safety
due to the fire hazard they pose and the harm a fire or explosion
could cause in the middle of a mixed residential and business
community that surrounds the Property. The property's been on the
State's radar screen since 2001. Numerous reports have been
generated and they document on-going, post-petition releases of
Benzo(a)pyrene, naphthalene, carbon tetrachloride, acetone and
other hazardous substances at toxic levels in the air, soil and
ground water.
While in bankruptcy, Globe sold the property to the Port Authority
of the City of St. Paul.
On August 3, 2005, the Trustee filed a motion to dismiss the
State's complaint.
Because of the unsettled nature of the law applicable to the
issues presented, the Honorable J. Philip Klingeberger says in his
decision on the Trustee's motion to dismiss published at 2006 WL
2034659, this caused the Court to ponder its decision far longer
than is customary.
In his ruling, Judge Klingeberger finds that the MPCA's complaint
is sufficient to allege that the contamination problems arising
from alleged seepage from, and continued storage in, both surface
and underground tanks on Globe's former St. Paul industrial site
gives rise to an imminent and identifiable harm to public health
or safety. The record before the Court, Judge Klingeberger says,
does not establish whether or not the sale of the facility to the
Port Authority of the City of St. Paul included the tanks; or, if
so included, the circumstances, including the parties' agreement,
as to possible abatement of environment hazards arising from
seepage from the tanks.
Giving the parties some guidance in anticipation of a telephonic
conference to be held on Aug. 30, 2006, to determine the course of
further proceedings on the State's complaint, Judge Klingeberger
writes:
"If the sale of the subject facility did include sale of
the subject tanks to the purchaser, then MPCA will not
succeed in obtaining the relief requested by its complaint
in this adversary proceeding. If the subject sale did not
include some or all of the tanks -- and/or if included, the
sale did not contemplate the purchaser's abatement of the
contaminating source -- and if MPCA establishes that seepage
from, or continued storage in, those tanks of product
constitutes an imminent and identifiable harm to public
health or safety -- then the Trustee will be required to
undertake abatement action to the extent necessary to
eliminate such imminent and identifiable harm -- by the
employment of third party entities -- if the Trustee has
access to the subject tanks under the terms of the contract
for sale of the real property upon which the tanks are
located as determined by that contract and by otherwise
applicable law."
Assistant Attorney General J. Sebastian Stewart, Esq., represents
the State of Minnesota in this matter. Janice A. Alwin, Esq., at
Shaw, Gussis, Fishman, Glantz, Wolfson & Towbin, L.L.C.,
represents the Chapter 7 Trustee.
GRANT PRIDECO: S&P Raises Corporate Credit Rating to BB+ from BB
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating and senior unsecured credit ratings on oilfield services
provider Grant Prideco Inc. to 'BB+' from 'BB'.
As of June, 30, 2006, Houston, Texas-based Grant Prideco had about
$207 million in long-term debt.
"The rating action incorporates meaningful financial risk profile
improvement and continued strength in operating performance and
credit measures," said Standard & Poor's credit analyst Jeffrey
Morrison.
"In addition, we highlight the company's demonstrated track record
of generating consistent free cash flow over the past four years,
the significant business profile improvements that have resulted
from the company's acquisition of ReedHycalog in 2002, and
management's adherence to disciplined financial policies," said
Mr. Morrison.
The ratings on Grant Prideco reflect exposure to the highly
cyclical drill-stem and premium tubular manufacturing markets, as
well as somewhat limited product and service line diversity
relative to that of larger industry participants.
Leading market share in drill-stem products; a solid market
position in drillbit and tubular technology as well as services
product lines; and the more stable cash flow and margin
characteristics of the company's drillbit operations help mitigate
concerns.
The stable outlook is predicated on Standard & Poor's view that
Grant Prideco's cash flow characteristics and credit measures will
remain at levels consistent with its expectations for the current
ratings through the industry cycle.
In the longer term, an upgrade to investment grade, while
possible, would likely hinge upon Standard & Poor's view of the
cyclicality, scale, and product line diversity of the company's
business risk profile, as well as on management's continued
ability to adhere to conservative financial policies.
Negative rating actions do not appear likely in the near to
intermediate term, unless management were to take a more
aggressive posture toward rewarding shareholders or acquisitions.
GWIN INC: Wayne Allyn Root Stays On as Chairman and CEO
-------------------------------------------------------
GWIN Inc. completed the first step in a comprehensive
restructuring plan to strengthen the company's balance sheet, and
retain the services of its key employee and founder, Wayne Allyn
Root.
Jeff Johnson, CFO of GWIN, stated, "Our chairman, Wayne Allyn
Root, agreed to convert a six-figure liability of the company into
preferred equity. He also agreed to remain for the foreseeable
future in the role of chairman and CEO. Furthermore, he agreed to
waive a termination clause in his current contract. We consider
these concessions to be substantial contributions on Mr. Root's
part for the long-term well-being of the company, and the board
wishes to thank him for his continued hard work on behalf of the
GWIN shareholders."
Mr. Root added, "This should give a major boost of confidence to
all GWIN shareholders and future investors. First of all, as
someone who makes big bets for a living, I've decided to put my
money where my mouth is, by agreeing to convert over $200,000 of
GWIN liability into preferred equity -- which shows the faith I
have in the future of GWIN. Secondly, I have agreed to this
conversion at $.045 per share, a price significantly above the
current price of the stock. In an age where CEOs consistently
take stock and options at prices far below the current market
price, I wanted to set a new example. This conversion makes me
the largest individual shareholder in GWIN stock, and firmly ties
my future and my fortunes to this company. It shows my faith that
GWIN is on a path to fulfill our goal of becoming the global brand
name in sports handicapping."
About GWIN
Headquartered in Las Vegas, Nevada, GWIN Inc. (OCTBB:GWNI)
-- http://www.winningedge.com/-- produces television, radio, and
web-based programming related to sports and gaming and provides
sports handicapping analysis and advice to sports bettors
worldwide through its wholly owned subsidiary, Global SportsEDGE,
Inc. Global SportsEDGE provides professional handicapping advice
on professional football games played by the National Football
League, professional basketball games played by the National
Basketball Association, college football and basketball games,
major-league baseball, hockey, NASCAR, and golf.
Going Concern Doubt
As reported in the Troubled Company Reporter on Nov. 7, 2005,
Moore Stephens, PC, expressed substantial doubt about GWIN, Inc.'s
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal year ended July 31,
2005. The auditing firm pointed to the Company's losses from
operations, working capital deficiency and accumulated deficit.
At April 30, 2006, GWIN Inc.'s balance sheet showed a
stockholders' deficit of $597,804, compared to a $444,899 deficit
at January 31, 2006.
H&E EQUIPMENT: Prices $250 Million of 8-3/8% Sr. Unsecured Notes
----------------------------------------------------------------
H&E Equipment Services, Inc. priced $250 million aggregate
principal amount of senior unsecured notes due 2016. The annual
interest rate on the notes will be 8-3/8%.
The Company will use the net proceeds of the offering, together
with cash on hand and borrowings under its existing senior secured
credit facility, to consummate its previously-announced cash
tender offer and consent solicitation for its 11 1/8% Senior
Secured Notes due 2012, and 12 1/2% Senior Subordinated Notes due
2013. The offering of the notes is expected to close on or about
August 4, 2006.
About H&E
Based in Baton Rouge, Louisiana, H&E Equipment Services, Inc.,
(NASDAQ:HEES) -- http://www.he-equipment.com/-- is an integrated
equipment services company with 47 full-service facilities
throughout the Intermountain, Southwest, Gulf Coast, West Coast
and Southeast regions of the United States. The Company is
focused on heavy construction and industrial equipment and rents,
sells and provides parts and service support for four core
categories of specialized equipment: hi-lift or aerial platform
equipment; cranes; earthmoving equipment; and industrial lift
trucks.
* * *
As reported in the Troubled Company Reporter on July 24, 2006,
Standard & Poor's Ratings Services assigned its 'B+' unsecured
debt rating to H&E Equipment Services Inc.'s proposed issue of
$250 million senior unsecured notes due in 2016, 144A with
registration rights. These notes will be used to retire H&E's
approximately $250 million in existing debt which has been
tendered for cash. The ratings on the existing senior secured
notes will be withdrawn following the successful completion of the
tender offer.
The corporate credit rating on H&E is BB-/Stable/--.
H.P.H. INC: Case Summary & 12 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: H.P.H., Inc.
P.O. Box 189
Ava, IL 62907
Bankruptcy Case No.: 06-40776
Chapter 11 Petition Date: August 1, 2006
Court: Southern District of Illinois (Benton)
Debtor's Counsel: Jay B. Howd, Esq.
Herbert and Howd
Bankruptcy Clinic
811 West Main Street
Carbondale, IL 62901
Tel: (618) 549-0567
Fax: (618) 549-0141
Total Assets: $808,285
Total Debts: $1,093,290
Debtor's 12 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
DuQuoin State Bank Business Properties - $97,742
P.O. Box 468 400 North Glenview,
Du Quoin, IL 62832 Carbondale, IL
Business Properties -
795 South Washington,
DuQuoin, IL
Davis and Son Oil Co., Inc. Bottled & Barreled Oil $52,000
P.O. Box 444
Fairfield, IL 62837
Citi Cards Consumer Purchases $38,090
P.O. Box 6000
The Lakes, NV 89163-6000
Financial Pacific Lease Agreement $31,500
3455 South 344th Way
P.O. Box 4568
Federal Way, WA 98063
The Valvoline Company Carbondale Signage $7,350
Division of Ashland, Inc.
3499 Blazer Parkway Herrin Signage $6,500
P.O. Box 14000
Lexington, KY 40512 DuQuoin Signage $6,000
Herrin Equipment $1,500
Carbondale Equipment $150
MBNA Consumer Purchases $8,670
Pawnee Leasing Computer Equipment $7,500
American Express Consumer Purchases $7,223
NAPA Auto Parts and Supplies $3,112
Cintas Corporation Uniform Rental $988
Ace Hardware Supplies $476
Amer Assist, Inc. Debt Consolidation Unknown
Services
HANESBRANDS INC: Moody's Rates $2.15 Billion Facilities at Ba2
--------------------------------------------------------------
Moody's Investors Service assigned first time ratings to
Hanesbrands Inc. The rating outlook is stable.
The ratings assigned:
* Corporate Family Rating at Ba3
* $2.15 billion of 1st lien facilities at Ba2. The 1st
lien facilities are:
(a) $500 million five-year revolving credit facility;
(b) $350 million 6 year term loan A; and
(c) $1.3 billion 7 year term loan B.
$450 million of 2nd lien facilities at Ba3. The 2nd lien facility
is comprised of a $450 million 7.5 year term loan.
* $500 million unsecured bridge loan at B1.
* Speculative Grade Liquidity Rating: SGL-1
The ratings assigned are subject to the receipt of final
documentation with no material changes to the terms as originally
reviewed by Moody's.
Hanesbrands' ratings reflect the size and scale of its operations,
a portfolio of well recognized apparel brands with leading market
shares in their categories, and the staple nature of the products
which provides stable replenishment demand. The ratings also
reflect Moody's view that the product segments in which the
company operates are a relatively commoditized category with
limited ability to achieve brand differentiation relative to
peers.
The categories in which the company operates are highly
competitive and the company faces competition across its product
categories from a number of competitors in the apparel industry,
private label competition and specialty apparel retailers, some of
whom have greater financial resources.
In addition, concentration risk is high with the top 10 customers
accounting for 64% of fiscal 2005 sales. The company's financial
position will be leveraged following a debt financed dividend paid
to Sara Lee, with initial leverage is estimated at adjusted debt
of 5x and fixed charge coverage of 2.2x. These financial metrics
are weak for the rating category and the ratings assigned reflect
Moody's expectation the company will utilize free cash flow to
reduce debt.
Hanesbrands' historical performance has been erratic evidenced
by declining operating margins from fiscal 2003 to fiscal 2005,
primarily due to category price deflation and commodity price
increases not passed on to customers. There were also cutbacks in
marketing spending and the company and its brands have suffered
from underinvestment. The company has begun to take measures to
reduce overhead costs and achieve supply chain efficiencies, and a
positive result from these efforts is evident in fiscal year 2006
results to date.
The company is expected to continue to focus on obtaining further
supply chain efficiencies, though execution risks exist with these
initiatives, and competitive market conditions could result in the
benefits of reduced costs being passed onto consumers rather than
flowing to increased operating margins. Hanesbrands will also
need to manage execution risk associated with the spin-off as an
independent company. However as the company's business was managed
in a fairly decentralized manner from Sara Lee's other businesses,
execution risk is considered modest.
Moody's rating outlook is stable. Moody's expects the company to
utilize free cash flow to reduce debt to levels more appropriate
for the rating category. The rating outlook also reflects
expectations the company will maintain a competitive cost profile
and that the company's transition to a stand-alone company will be
achieved without disruption to operations.
The SGL-1 rating reflects strong liquidity expected to be
available to Hanesbrands from cash on hand at closing of the new
credit facilities, strong level of free cash flow that amply
covers capital expenditure and debt amortization needs, moderate
seasonality and availability under the company's proposed
$500 million committed revolving credit facility, partly offset by
expectations that financial covenants will be set at moderately
tight levels and by the limited alternative sources
of liquidity.
Ratings could improve if the company continues successful
execution of its supply chain initiatives and maintains
investments in its brands, which would be evidenced by sustained
operating margin improvement, as well as sustainably reducing
Adjusted Debt to below 3.5x and improving fixed charge coverage to
3x. Ratings could be lowered if operating margins weaken due to
continued competitive conditions or an inability to achieve
expected supply cost savings. There is no room at the current
time for the company to pursue debt-financed acquisitions, or
to undertake shareholder distributions and delay expected
de-leveraging.
The first and second lien facilities will be secured by a
guarantee from all material domestic operating subsidiaries and
liens on substantially all of the assets of the company. The
Bridge Facility, and Unsecured Notes which are anticipated to
refinance the facility, will rank equally with unsecured creditors
of Hanesbrand Inc. and will be effectively junior to the secured
facilities.
In view of the level of cushion provided to the first lien
facility from the second lien and unsecured facilities and overall
ranking in the structure the 1st lien facilities were rated Ba2, a
one-notch level above the corporate family rating. The second
lien facilities benefit from their priority position to the
unsecured creditors and based on Moody's assessment of recovery
expectations the second lien notes have been rated Ba3, the same
as the corporate family rating. The unsecured bridge loan, being
effectively subordinated to the secured debts is rated B1, one
notch below the corporate family rating.
Hanesbrands Inc. headquartered in Winston-Salem NC, is a major
manufacturer and marketer of branded innerwear and outerwear
apparel. The company markets products under the "Hanes",
"Champion", "Playtex, "Bali", "Wonderbra" and "L'eggs" brands. The
company reported sales of $4.5 billion for the trailing four
quarters ending April 1, 2006.
HANESBRANDS INC: S&P Rates $2.15 Billion Bank Loans at BB-
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
corporate credit rating to intimate apparel and active wear maker
Hanesbrands Inc. The outlook on Winston-Salem, North Carolina-
based Hanesbrands is stable.
At the same time, Standard & Poor's assigned its 'BB-' senior
secured bank loan rating and '1' recovery rating to the company's
$2.150 billion first-lien bank loan facilities, indicating the
expectation for full (100%) recovery of principal in the event of
payment default. The $450 million second-lien loan facility was
assigned a 'B-' with a recovery rating of '4', indicating the
expectation of marginal (25%-50%) recovery of principal in the
event of default.
S&P have assigned a 'B-' senior unsecured debt rating to the
company's proposed $500 million bridge loan facility. The
proposed $500 million bridge loan is rated two notches below the
corporate credit rating, reflecting the significant layer of
secured debt in the company's capital structure. Proceeds from
the bank facility and this interim loan will be used to finance a
$2.4 billion special dividend to Hanesbrands' parent, Sara Lee
Corp., in connection with the company's spin-off from Sara Lee.
(After this transaction is consummated, Hanesbrands Inc. will
operate as an independent entity.) The company expects the $500
million bridge loan to be refinanced in the high yield market
sometime before the end of 2006. The above ratings are subject to
Standard & Poor's review of the final documentation.
"The ratings reflect Hanesbrands' high leverage resulting from its
all debt-financed dividend to Sara Lee, the commodity-like nature
of some of its products, the highly competitive and promotional
retail environment, and its relatively narrow business focus,"
said Standard & Poor's credit analyst Susan H. Ding. "There is
also execution risk for new management in operating the company as
a stand-alone entity. However, the ratings also reflect the
company's strong, widely recognized brand names (including Hanes,
Champion, Playtex, and Bali), its core replenishment business that
is less susceptible to fashion risk, and its relatively stable
cash flows."
Hanesbrands manufactures and markets somewhat commodity-like
apparel essentials including women's intimate apparel, t-shirts,
men's and kids' underwear, socks, hosiery, casual wear, and active
wear. The company's brands hold either the number one or number
two U.S. market positions (based on revenue) in the product
categories it competes in. Hanesbrands competes against Russell
Corp, Warnaco Inc., VF Corp, and The Limited Inc., in the highly
competitive apparel retail market, which is characterized by heavy
promotional activity, including significant discounting and
deflationary pricing.
The outlook is stable. Standard & Poor's expects Hanesbrands to
maintain financial measures stronger than the rating because of
its higher business risk. If the firm can successfully operate as
an independent entity and reduce leverage while improving
financial measures in the intermediate term, the outlook could be
revised to positive. However, if the company encounters operating
difficulties and/or credit protection measures weaken, the outlook
may be revised to negative.
HARBOURVIEW CLO: Notes' Redemption Cues S&P to Withdraw Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on all
rated notes issued by Harbourview CLO V Ltd., a cash flow
arbitrage high-yield CLO transaction.
The rating withdrawals follow the redemption of the notes pursuant
to section 9.4 of the indenture.
Ratings Withdrawn:
Harbourview CLO V Ltd.
Class To From Current Balance Previous Balance
----- -- ---- --------------- ----------------
A-1 NR AAA $0 $200 million
A-2A NR AAA $0 $15 million
A-2B NR AAA $0 $15 million
A-3 NR AA $0 $13 million
B NR A- $0 $18 million
C NR BBB $0 $16 million
D NR BB $0 $5 million
HARSIDHMA VARAHIMA: Case Summary & Two Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Harsidhma Varahima Estate, LLC
dba Quick Food Mart #3
dba Quick Food Mart #4
dba Quick Food Mart #5
P.O. Box 174
Pomaria, SC 29126
Bankruptcy Case No.: 06-03255
Chapter 11 Petition Date: August 2, 2006
Court: District of South Carolina (Columbia)
Debtor's Counsel: Lemuel Showell Blades, IV, Esq.
Lemuel Showell Blades, P.A.
142 Oakland Avenue, Suite C
P.O. Box 10671
Rock Hill, SC 29731
Tel: (803) 329-6115
Fax: (803) 329-6544
Debtor's Total Assets and Liabilities as of Dec. 31, 2005:
Total Assets: $1,087,751
Total Debts: $902,080
Debtor's Two Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service Federal Taxes Payroll $4,000
MDP 39
1835 Assembly Street
Columbia, SC 29201
SC Department of Revenue and State Taxes Payroll $4,000
Taxation
P.O. Box 125
Columbia, SC 29214
HEALTH-CHEM CORP: Demetrius & Company Raises Going Concern Doubt
----------------------------------------------------------------
Demetrius & Company, L.L.C., in Wayne, New Jersey, raised
substantial doubt about Health-Chem Corp.'s ability to continue as
a going concern after auditing the Company's consolidated
financial statements for the years ended Dec. 31, 2004, and 2003.
The auditor pointed to the Company's payments default to its
bondholders and licensors and negative working capital.
License Payments Default
The Company is in default under the terms of a license agreement
with Key Pharmaceuticals, Inc., a subsidiary of Schering-Plough
Corporation. As of Dec. 31, 2004, the Company has not paid any
royalty payments under the agreement and it owes $4,522,000 as of
that date.
The Company has entered into discussions with Key with respect to
payment of past due royalties.
Debenture Payment Default
As of Dec. 31, 2004, the Company is in default of $10,197,000
under the outstanding $8 million of principal under certain
convertible subordinated debentures due April 15, 1999.
The Company also has $5,167,000 of other debts and liabilities as
of Dec. 31, 2004.
Bankruptcy Warning
If the Company is unable to pay its liabilities or otherwise
negotiate satisfactory payment terms, it may be required to
liquidate all of its assets and wind-up or dissolve the Company or
seek protection from our creditors under the bankruptcy laws, in
which case holders of the Company's stock could lose the entire
amount of their investment.
As of Dec. 31, 2005, the Company estimated that its liabilities
and debts are approximately $22,864,000 (unaudited), including
$10,830,000 under the Debentures and $6,108,000 for royalties due
under the license.
Financials
The Company reported net income of $9,000 on $9,192,000 of net
sales for the year ended Dec. 31, 2004, compared with a net loss
of $1,973,000 on $7,896,000 of net sales in 2003.
At Dec. 31, 2004, the Company's balance sheet showed $7,443,000 in
total assets and $19,898,000 in total liabilities, resulting in a
$12,455,000 stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $5,450,000 in total current assets available to pay
$17,862,000 in total current liabilities coming due within the
next 12 months.
Unfiled Financials
The Company has not filed financial reports for the years ended
1999, 2000, 2001, and 2002. The Company said that preparing and
filing those reports are not possible because of its inadequate
financial and other records at that time.
The Company said the SEC could revoke registration of its common
stock because of its filing failure. The Company also said it
cannot predict if the SEC will enforce any penalties, fines,
sanctions, or other actions or proceedings.
A full-text copy of the Company's 2004 annual report is available
for free at http://ResearchArchives.com/t/s?ebf
Health-Chem Corporation develops, manufactures and markets
transdermal drug delivery systems. Since 1986, the Company
manufactured transdermal nitroglycerin patches, the first product
introduced for the generic market in the United States. This
product is used for transdermal relief of vascular and
cardiovascular symptoms related to angina pectoris. The Company
sells patch to distributors and wholesalers for distribution in
the United States.
HERBALIFE INT'L: S&P Rates $300 Million Bank Financing at BB+
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its bank loan and
recovery ratings to Herbalife International Inc.'s $300 million
bank financing.
Herbalife International Inc. is the borrower under the facility,
which is comprised of a $200 million six-year first-lien term loan
and a $100 million six-year first-lien revolving credit facility.
The first-lien loans are rated 'BB+', the same as the corporate
credit rating, with recovery ratings of '3', indicating the
expectation of meaningful (50%-80%) recovery of principal in the
event of default.
Proceeds from the facilities will be used to redeem the company's
$165 million 9.5% notes due 2011 and pay the related accrued
interest.
All obligations under the credit facility are unconditionally
guaranteed by Herbalife Ltd., the parent company, and its direct
and indirect wholly owned subsidiaries except certain non-U.S.
subsidiaries. The facility is secured by a first-priority
security interest in substantially all present and future tangible
and intangible assets of the company, including a pledge of 100%
of the stock of domestic subsidiaries and 66% of the stock of non-
U.S. subsidiaries.
Ratings List:
Herbalife International Inc.:
* Corporate credit rating: BB+/Stable/--
Ratings Assigned:
* $200 mil first-lien term loan: BB+
* Recovery rating: 3
* $100 million first-lien credit facility: BB+
* Recovery rating: 3
HEXCEL CORP: Earns $17.6 Million in Second Quarter Ended June 30
----------------------------------------------------------------
Hexcel Corporation reported results for the second quarter of 2006
and the conclusion of a portfolio review.
Net sales for the three months ended June 30, 2006, were $316.0
million, 1.5% higher than the $311.3 million reported for the
second quarter of 2005. Quarterly operating income was $34.3
million, after reflecting stock compensation expense of $2.5
million and $1.1 million of business consolidation & restructuring
expenses. Net income for the second quarter was $17.6 million
compared to net income of $26.2 million in 2005. The tax
provision for the quarter was $7.1 million higher than in the
second quarter, 2005 primarily due to the Company providing a full
tax provision on its U.S. taxable income in 2006. The resulting
net income available to common shareholders for the quarter was
$17.6 million compared to net income of $23.9 million for the
second quarter of 2005.
Chairman, President and CEO, Mr. David E. Berges, commented,
"Revenues this quarter were less than our expectations at the
start of the year. Ballistic revenues continued to decline from
their record levels at the peak of the U.S. military soft body
armor re-equipping cycle, but at a faster pace than we had
anticipated. Our revenues from space & defense showed more modest
growth this quarter. These applications have long evidenced a
record of quarter-to-quarter variability and the quarter does not
reflect a change in the outlook for this market. Commercial
aerospace sales again grew by double digits driven by the 2006
production rate increases at Boeing and Airbus. Nevertheless,
despite the decline in ballistics revenues we were able to
maintain our gross and adjusted operating margins at 22.7% and
11.2% respectively."
"The push-out in deliveries of the A380 announced on June 13th was
certainly a disappointment but does not reduce the significant
potential of this program for Hexcel over the coming years. The
production requirements of Airbus and its many subcontractors for
this program in the second half of 2006 have yet to fully clarify.
However, we expect that production rates will slow from the first
half of 2006. While this makes forecasting a little more complex,
we still project that our commercial aerospace revenues will grow
by 10% or better in 2006. With the projected ramp up in A380
aircraft deliveries in 2008, our revenues from this program are
expected to start to grow again by the second half of 2007."
Mr. Berges concluded, "Our planned portfolio and organizational
changes will give us additional opportunities to further de-
leverage and improve despite the temporary slowing of our revenue
growth pace."
Portfolio Review
In order to take full advantage of the many growing applications
for advanced composite materials, Hexcel has decided to narrow its
focus and consolidate activities around its carbon fiber,
reinforcements for composites, honeycomb, matrix and structures
product lines. Hexcel will explore strategic alternatives for its
Reinforcements business segment, which includes its ballistics,
electronics and architectural product lines. Reinforcements
products related to composites will be retained and, together with
the Composites and Structures business segments, merged into one
business unit. Hexcel has retained Merrill Lynch & Co. as the
Company's financial advisor to assist in the strategic review and
potential disposition of the non-core assets.
Mr. Berges discussed these decisions, "For the last five years we
have been on a mission to expand our operating margins to a level
appropriate to support the pace of technology change and capital
requirements. After 9/11, we took painful cuts that allowed
margin growth despite the sales decline. Since then our business
model has been to drive operating leverage by containing costs as
we grow. As a result our adjusted operating margins have grown
from 7.1% for the calendar year of 2002 to 11.1% in the first half
of 2006. It is now time to take these additional steps to
strengthen our strategic position and maintain the momentum of
Hexcel's growth of margins and returns."
"As the performance demands of advanced composite materials
increase, Hexcel's ability to vertically integrate the
optimization of fiber, polymer chemistry, reinforcements and
structures into a systems solution gives the Company a critical
competitive advantage. This leads to our decision to consolidate
our advanced composites products lines into a single business
unit. Combining the key elements of current business segments
enables us to improve the pace of development and the technology
supporting our product offerings, develop a common approach to our
customers, and provide Hexcel new opportunities to streamline and
strengthen our organizational efficiency."
"In light of the extremely attractive opportunities for advanced
composites we have determined that it is appropriate to narrow the
focus of our business portfolio and operations to those with the
greatest potential of sustainable growth, such as commercial and
military aerospace, wind energy and other applications for
advanced composites."
"The dedicated teams working in the product lines we now call non-
core have done a wonderful job over the past years in their
respective markets. These are well-run, profitable business lines
with opportunities deserving of focus, capital and resources. But
for Hexcel, the enormous sea change in composite penetration in
our core markets warrants a laser-like strategy to maximize our
long-term shareholder value."
Concluding his remarks on strategy, Mr. Berges commented: "With
the implementation of these actions, we will be able to maintain
the momentum of our quest for margin expansion and fund the
investment needs of our growth with improved returns. Most
importantly, we will be better structured to optimize our
competitive position to take full advantage of the significant
growth projected for advanced composite materials, our core
strength."
Headquartered in Stamford, Connecticut, Hexcel Corporation
(NYSE/PCX: HXL) develops, manufactures and markets lightweight,
high-performance reinforcement products, composite materials and
composite structures for use in commercial aerospace, space and
defense, electronics, and industrial applications.
* * *
As reported in the Troubled Company Reporter on Feb. 21, 2006,
Standard & Poor's Ratings Services raised its ratings on Hexcel
Corp., including the corporate credit rating to 'BB-' from 'B+',
and removed the ratings from CreditWatch, where they were placed
with positive implications. The outlook is positive.
As reported in the Troubled Company Reporter on Feb. 6, 2006,
Moody's Investors Service upgraded the ratings of Hexcel
Corporation's Senior secured revolving credit facility due 2010,
to Ba3 from B2; Senior secured term loan due 2012, to Ba3 from B2;
Senior subordinated notes due 2015, to B3 from Caa1; and Corporate
Family Rating, to B1 from B2. Moody's said the ratings outlook is
stable.
HIGH VOLTAGE: Emerges from Bankruptcy Second Time Around
--------------------------------------------------------
High Voltage Engineering Corporation and its debtor-affiliates
emerged from bankruptcy protection on August 1, 2006, as their
First Amended Plan of Liquidation took effect.
The Debtors' emergence is from their second bankruptcy filing.
They emerged from their first bankruptcy on Aug. 10, 2004.
The Plan is a liquidating plan, and provides for the substantive
consolidation of the Debtors' estates into a single consolidated
estate. On a consolidated basis, the value of the Debtors' assets
exceeds their liabilities and the consolidated estate will be
solvent. Accordingly, the Plan provides for the payment of all
allowed claims against the Debtors in full, including interest, if
any, due on account of those claims, and distributing the Debtors'
surplus funds to the equity holders on account of their equity
interests.
Assets for Distribution
The Chapter 11 Trustee has sold the Debtors' businesses and in so
doing has liquidated substantially all of their assets. The
Debtors have no other known assets of any material value, other
than potential causes of action and other miscellaneous assets,
including:
-- insurance refunds,
-- some share of ReVera Incorporated's stock owned by the
Debtors,
-- cash collateral securing the letter of credit issued by
Citizens Bank of Massachusetts; and
-- receivable from the sale of ASIRobicon S.p.A., an affiliate.
Proceeds realized on the sale of the ReVera Stock and net
recoveries, if any, on Causes of Action and miscellaneous assets
may increase the total value of the Debtors' assets available for
distribution to Equity Holders.
Based on the Debtors' schedules of liabilities, their books and
records, and the claims filed against the Debtors, the Chapter 11
Trustee estimates that remaining Allowed Claims against the
Debtors ultimately will total approximately $46.8 million,
including estimated interest to be paid on account of certain
Claims. In determining this amount, the Chapter 11 Trustee, with
the assistance of counsel, his business advisors and Trumbull,
analyzed claims that have been and might be asserted against the
Debtors. However, there is no way of predicting the final amount
of Allowed Claims with certainty.
The Chapter 11 Trustee currently has on hand approximately
$114 million in cash. Certain amounts of this cash will be
reserved as disputed claims reserve, the post-confirmation
administrative reserve and the trust administrative reserve. As
the amount of proceeds on hand exceeds the Disclosure Statement
Estimated Claims Amount, the Trustee expects that there will be
sufficient funds remaining for distribution to Equity Holders,
which amount may be increased if there are recoveries on the
Debtors' unliquidated assets, including Causes of Action.
Liquidating Supervisor
The Plan provides for the appointment of Stephen S. Gray as the
Liquidating Supervisor for each of the Debtors. The Liquidating
Supervisor will be responsible for, among other things,
administering the Post-Confirmation Estate until a final transfer
date and preparing, filing and resolving the Debtors' final tax
returns on and after the Final Transfer Date.
The Plan further provides for the establishment of the Liquidating
Trust. On the Effective Date, the Trustee will transfer all of
the Debtors' Causes of Action to the Liquidating Trust and the
Beneficiaries of the Liquidating Trust will be deemed to have
transferred all of the Beneficiary Claims to the Liquidating
Trust. On the Effective Date, the Liquidating Supervisor will
transfer the Available Cash to the Liquidating Trust. On the
Final Transfer Date, the Liquidating Supervisor will:
(a) transfer all of the Debtors' remaining assets, whether
liquidated or unliquidated, to the Liquidating Trust; and
(b) cause each of the Debtors to be dissolved.
At this time, the Liquidating Trustee will be responsible for,
among other things, making distributions to holders of as-yet
satisfied Allowed Claims, if any, in accordance with the Plan,
investigating and potentially pursuing Causes of Action, objecting
to Disputed Claims asserted against the Debtors, and winding up
the Liquidating Trust.
The Plan further provides for the establishment of the:
(1) the Plan Committee, the members of which will be:
* Ravi Chachra,
* Nicholas Walsh, and
* Dixon Yee; and
(2) the Liquidating Trust Committee, the members of which will
be:
* Ravi Chachra,
* Nicholas Walsh, and
* Dixon Yee.
The Plan Committee will advise the Liquidating Supervisor with
respect to his duties under the Plan. The Liquidating Trust
Committee will advise the Liquidating Trustee with respect to his
duties under the Plan and Liquidating Trust.
A full-text copy of the Amended Disclosure Statement is available
for a fee at:
http://www.researcharchives.com/bin/download?id=060523224131
About High Voltage
Based in Wakefield, Mass., High Voltage Engineering Corporation --
http://www.asirobicon.com/-- owns and operates a group of three
industrial and technology based manufacturing and services
businesses. HVE's businesses focus on designing and manufacturing
high quality applications and engineered products, which are
designed to address specific customer needs. The Debtor filed its
first chapter 11 petition on March 1, 2004 (Bankr. Mass. Case No.
04-11586). Its Third Amended Joint Chapter 11 Plan of
Reorganization was confirmed on July 21, 2004, allowing the
Company to emerge on Aug. 10, 2004.
High Voltage and its debtor-affiliates filed their second chapter
11 petition on Feb. 8, 2005 (Bankr. Mass. Case No. 05-10787). S.
Margie Venus, Esq., at Akin, Gump, Strauss, Hauer & Feld LLP, and
Douglas B. Rosner, Esq., at Goulston & Storrs, represent the
Debtors. In the Company's second bankruptcy filing, it listed
$457,970,00 in total assets and $360,124,000 in total debts.
Stephen S. Gray was appointed chapter 11 Trustee in February 2005.
John F. Ventola, Esq., and Lisa E. Herrington, Esq., at Choate,
Hall & Stewart LLP represent the chapter 11 Trustee. Ira M.
Levee, Esq., at Lowenstein Sandler PC and Steven B. Levine, Esq.,
at Brown Rudnick Berlack Israels LLP represent the Official
Committee of Unsecured Creditors.
HOLLINGER INC: Board Renews $50MM Liability Insurance of Directors
------------------------------------------------------------------
The Board of Directors of Hollinger Inc. renewed its directors'
and officers' liability insurance in the total amount of
$50 million for the period from July 21, 2006 to July 21, 2007.
On July 17, 2006, Hollinger International Inc. changed its name to
Sun-Times Media Group, Inc. Its ticker symbol on the New York
Stock Exchange is now SVN and the new website address is
http://www.thesuntimesgroup.com/
Financial Statements
Hollinger 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. 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. Also, Hollinger has not filed its financial
statements for the period ended March 31, 2006. The Audit
Committee is working with the auditors, and discussing with
regulators, various alternatives to return its financial reporting
requirements to current status.
Hollinger has released financial information in the form of an
unaudited consolidated balance sheet as at Sept. 30, 2004,
together with notes thereto, prepared on a non-GAAP alternative
basis.
Cash on Hand
As of the close of business July 21, 2006, Hollinger and its
subsidiaries -- other than Sun-Times and its subsidiaries -- had
US$41 million of cash or cash equivalents on hand, including
restricted cash. At that date, Hollinger owned, directly or
indirectly, 782,923 shares of Class A Common Stock and 14,990,000
shares of Class B Common Stock of Sun-Times. Based on the July
21, 2006 closing price of the shares of Class A Common Stock of
Sun-Times on the NYSE of US$7.49, the market value of Hollinger's
direct and indirect holdings in Sun-Times was US$118.1 million.
All of Hollinger's direct and indirect interest in the shares of
Class A Common Stock of Sun-Times is being held in escrow in
support of future retractions of its Series II Preference Shares.
All of Hollinger's direct and indirect interest in the shares of
Class B Common Stock of Sun-Times is pledged as security in
connection with the senior notes and the second senior notes.
In addition to the cash or cash equivalents on hand, Hollinger has
previously deposited approximately CDN$8.8 million in trust with
the law firm of Aird & Berlis LLP, as trustee, in support of
Hollinger's indemnification obligations to six former independent
directors and two current officers. In addition, CDN$752,000 has
been deposited in escrow with the law firm of Davies Ward Phillips
& Vineberg LLP in support of the obligations of a certain
Hollinger subsidiary.
As of July 21, 2006, there was approximately US$112.3 million
aggregate collateral securing the US$78 million principal amount
of the Senior Notes and the US$15 million principal amount of the
Second Senior Notes outstanding.
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 and
Insolvency Act (Canada) and the Courts of Justice Act
(Ontario); and
(ii) granted protection pursuant to the Companies' Creditors
Arrangement Act (Canada).
Pursuant Ravelston Receivership and CCAA Proceedings, RSM Richter
Inc. was appointed receiver and manager of all of the property,
assets and undertakings of Ravelston and RMI.
Ravelston holds approximately 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 approximately 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, approximately 78% of the outstanding
Retractable Common Shares and approximately 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.
About Hollinger Inc.
Toronto, Ontario-based 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.
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 September 7, 2004;
(3) a US$425,000,000 fraud and damage suit filed in the State
of Illinois by International;
(4) a lawsuit seeking enforcement of a November 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 US$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 November 15, 2004, seeking
injunctive, monetary and other equitable relief; and
(8) investigation by the enforcement division of the OSC.
HOST HOTELS: Earns $330 Million in Second Quarter 2006
------------------------------------------------------
Host Hotels & Resorts Inc.'s net income increased $239 million to
$330 million for the second quarter ended June 16, 2006, and $405
million to $502 million for year-to-date 2006.
The Company's total revenue increased $254 million, or 26.5%, to
$1.2 billion for the second quarter and $312 million, or 17.8%, to
$2.1 billion for year-to-date 2006.
As of June 16, 2006, the Company had $524 million of cash and cash
equivalents, approximately $260 million of which it expects to use
to purchase The Westin Kierland Resort & Spa. The Company also
currently has $575 million of availability under its credit
facility.
On April 4, 2006, the Company issued $800 million of 6-3/4% Series
P senior notes due 2016 for net proceeds of approximately $787
million, which were used to fund a portion of the Starwood
acquisition, redeem the remaining $136 million of 7-7/8% Series B
senior notes, redeem all of the $150 million 10% Class C preferred
stock and for other general corporate purposes. In addition,
during the second quarter, the Company repaid the
$84 million mortgage on the Boston Marriott Copley Place.
About Host Hotels & Resorts
Host Hotels & Resorts Inc. -- http://www.hosthotels.com/-- is a
lodging real estate company that currently owns or holds
controlling interests in 129 luxury and upper upscale hotel
properties primarily operated under premium brands like
Marriott(R), Westin(R), Sheraton(R), Ritz-Carlton(R), Hyatt(R),
W(R), Four Seasons(R), St. Regis(R), The Luxury Collection(R),
Fairmont(R), Hilton(R) and Swissotel(R).
The Company conducts its operations through Host Hotels & Resorts,
L.P., of which it is the sole general partner and holds
96% of the partnership interests.
* * *
As reported in the Troubled Company Reporter on June 27, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating for Host Hotels & Resorts Inc. to 'BB' from 'BB-' and
raised its other ratings. All the ratings were removed from
CreditWatch where they were placed on April 26, 2006, with
positive implications. The outlook is stable.
HUSKY ENERGY: Earns $978 Million in Second Quarter of 2006
----------------------------------------------------------
Husky Energy Inc. reported net earnings of $978 million in the
second quarter of 2006, up 148 percent from $394 million in the
second quarter of 2005.
The Company's cash flow from operations in the second quarter was
$1.1 billion, a 33 percent increase compared with $828 million for
the same period in 2005.
Sales and operating revenues, net of royalties, were $3.0 billion
in the second quarter of 2006, compared with $2.4 billion in
the second quarter of 2005.
"We are pleased with Husky's exploration success and White Rose
project execution," John C.S. Lau, president & chief executive
officer of Husky Energy Inc., said. "With a solid balance sheet
and cash flow, Husky will continue to benefit from its integrated
business strategy and quality asset base in this strong price
environment."
Half-Year 2006 Results
For the first six months of 2006, Husky's net earnings increased
93 percent, to $1.5 billion, compared with $778 million in the
first six months of 2005.
The Company's cash flow from operations for the first six months
of 2006 was $2.1 billion, compared with $1.6 billion for the same
period in 2005.
* * *
As reported in the Troubled Company Reporter on July 31, 2006,
Standard & Poor's Rating Services raised its long-term corporate
credit and senior unsecured debt ratings on Calgary, Alta.-based
Husky Energy Inc. to 'BBB+' from 'BBB', and its preferred stock
rating on the company to 'BBB-' from 'BB+' following a review of
the company's current and prospective business and financial risk
profiles. The ratings were also removed from CreditWatch with
positive implications, where they were placed April 13, 2006,
following an initial review of the company's year-end 2005
results. The outlook is stable.
ICEWEB INC: Inks IceMail Affiliate Pacts With Strategic Resellers
-----------------------------------------------------------------
IceWEB, Inc. signed IceMAIL Affiliate agreements with Intelligent
Office of Reston, Virginia and Independent Network Solutions of
Hendersonville. Under the terms of the agreement, both Affiliates
will market and sell IceMAIL Hosted Microsoft Exchange to their
customers.
Intelligent Office provides leased and virtual offices,
receptionist/telephone services, and related business services to
customers throughout the United States. Intelligent Office of
Reston will begin offering the IceMAIL Hosted Exchange services
and IceWEB Office-in-a-Box to its customers who are primarily
small businesses with less than 25 employees. These customers are
ideal for the IceMAIL service that provides an enterprise-class
messaging system that these small businesses could not normally
afford to deploy on their own. With the IceMAIL service,
Intelligent Office can now offer a more complete service offering
to their small and emerging small business customers.
Independent Network Solutions provides Voice, Data & Internet,
Digital & IP Based Telephone Systems, Collocation & Web Hosting in
the Southeastern United States. The addition of IceMAIL will give
INS a more complete solution by providing the applications small
business are demanding.
"We are continuing our plan to sign new strategic resellers and
affiliates to add the IceMAIL service to their existing client
base," John R. Signorello, CEO of IceWEB stated. "The addition of
Intelligent Office of Reston is ideal in that we target the same
small business customers. The small businesses that need office
space, virtual offices, and receptionist/telephone services are
exactly the type of customer IceMAIL is designed for. IceMAIL
will give Intelligent Office customers a unique Internet domain
name and email address along with shared calendars, contacts,
tasks, and documents on their PCs and wireless PDAs no matter
where they are located in the World. Systems such as IceMAIL and
IceWEB Office would normally cost a small business $15K to $25K to
implement themselves but they can purchase this through IceWEB or
our Affiliates as low as $8.95 per month."
About IceWEB
Headquartered in Herndon, Virginia, IceWEB, Inc. (OTC BB: IWEB)
-- http://www.iceweb.com/-- enables small and medium sized
organizations with its, hardware, software and professional
services. The Company's application service provider software
delivery model reduces the customer's Total Cost of Ownership and
improves the efficiency of IT environments.
Going Concern Doubt
As reported in the Troubled Company Reported on Jan. 24, 2006,
Sherb & Co., LLP, expressed substantial doubt about IceWEB, Inc.'s
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal years ended
Sept. 30, 2005 and 2004. The auditing firm pointed to the
Company's consecutive net loss for fiscal year 2005 and 2004.
INTEGRATED HEALTHCARE: Ramirez Int'l. Raises Going Concern Doubt
----------------------------------------------------------------
Ramirez International Financial & Accounting Services, Inc., in
Irvine, California, raised substantial doubt about Integrated
Healthcare Holdings, Inc.'s ability to continue as a going concern
after auditing the Company's consolidated financial statements for
the years ended Dec. 31, 2005, and 2004. The auditor pointed to
the Company's losses, stockholders' deficiency, and need for
additional capital to refinance debt.
The Company reported a $44,558,367 net loss on $284,314,409 of net
revenues for the year ended Dec. 31, 2005, compared with a
$1,840,191 net loss with no revenue for the same period in 2004.
At Dec. 31, 2005, the Company's balance sheet showed $135,045,980
in total assets, $162,151,254 in total liabilities, and $3,341,549
in minority interest, resulting in a $30,446,823 stockholders'
deficit.
At Dec. 31, 2004, the Company's balance sheet showed $887,957 in
stockholders' deficit.
Additional Financing Due December 2006
On May 9, 2005, the Company received notice from Medical Provider
Financial Corporation II that it was in default of a credit
agreement comprised of a $50 million acquisition loan and a
$30 million working capital line of credit.
Outstanding borrowings under the line of credit were $25,330,734
as of Dec. 31, 2005. On Dec. 12, 2005, the Company entered into
an additional credit agreement for $10,700,000, due Dec. 12, 2006,
which included an amendment that:
(a) cured the default,
(b) required the Company to pay $5,000,000 against its
Acquisition Loan,
(c) required the Company to obtain $10,700,000 in additional
new capital contributions to pay in full and retire all
amounts due and owing under the additional credit
agreement, and
(d) included certain indemnities and releases in favor of the
lender.
A full-text copy of the Company's 2005 annual report is available
for free at http://ResearchArchives.com/t/s?ec7
Based in Santa Ana, Calif., Integrated Healthcare Holdings, Inc.,
is a predominantly physician-owned company that acquired from
Tenet Healthcare Corp. four hospital facilities representing
approximately 12% of the hospital beds in Orange County,
California: 282-bed Western Medical Center in Santa Ana; 188-bed
Western Medical Center in Anaheim; 178-bed Coastal Communities
Hospital in Santa Ana; and 114-bed Chapman Medical Center in
Orange.
INTEGRATED MEDIA: Buys WV Fiber's Assets for $1.6 Million in Cash
-----------------------------------------------------------------
Integrated Media Holdings, Inc. will acquire all of the assets and
operations of WV Fiber LLC for $1,662,500 in cash and 4,055,448
shares of IMHI common stock.
The U.S. Bankruptcy Court for the Middle District of Tennessee
approved the sale on July 26, 2006.
The acquisition of the WV Fiber network brings to IMHI $4 million
in current annual network contract revenues, adds $1.75 million in
net assets to the IMHI balance sheet, and has an extensive
pipeline of new network contracts. The sale clears the network
and operations from bankruptcy as the assets and operations of WV
Fiber are being sold to IMHI free and clear of interests from
creditors.
Under the terms of the purchase, preferred shares issued as a part
of this agreement will not have any effect on fully diluted amount
of shares outstanding of IMHI. The network and operations will be
held by a newly formed, wholly owned subsidiary of Integrated
Media and will become a key component of the I-Media Group and its
multi-platform content delivery network. The closing of the
acquisition is expected to occur on Aug. 8, 2006.
"The infrastructure and operations of the WV Fiber network that we
are acquiring, along with the products and services being rolled
out by Endavo and our recently announced acquisition of Bidchaser,
provide a major inflection point for our company," said Paul Hamm,
I-Media's CEO. "The acquisition of the WV Fiber network will
provide I-Media with an immediate and significant base of
recurring and growing contract revenues for the first time -- a
major improvement to our financials -- and the content delivery
network infrastructure to support our broadband video and d-
commerce initiatives."
The WV Fiber network and operations will be used for continued
Internet access, transport, Optical Carrier connectivity,
colocation and peering. The network will also serve as the
IP-based content delivery backbone network for broadband video
platforms and IPTV services deployed by Endavo Media and
Communications, another wholly owned subsidiary of IMHI. WV Fiber
currently has over 400 network peering relationships. With this
in place, I-Media is poised to become a leading global IPTV and
broadband TV player for content, network connectivity and
transport. WV Fiber, Inc. will continue expanding its market
reach as its extensive existing and growing connectivity
simultaneously functions as the content delivery network for
Endavo's delivery of digital content and IP-based services to IPTV
and broadband TV platforms and service providers around the globe.
"We are pleased to be part of the IMHI acquisition, which ensures
the continued success of WV Fiber," said Peter Marcum, chairman of
WV Fiber. "Since it's formation in 2003, we have become one of
the leading backbone networks and I-Media will help us to expand
our reach to new customers."
"We are thrilled about the impact the acquisition of WV Fiber will
have on I-Media and our shareholders," Mr. Hamm added. "This
acquisition greatly accelerates our business model in both the
broadband video and d-commerce markets. We expect continued growth
in WV Fiber's network sales and immediate cost of operations
decrease for our subsidiaries that rely upon content delivery
networks."
About WV Fiber
Headquartered in Nashville, Tennessee, WV Fiber, LLC --
http://www.wvfiber.com/-- a wholly owned company of Wilhagan
Ventures, is a fiber network service provider to more than 70
existing network customers, including leading cable,
telecommunications and content delivery companies such as Charter
Communications, Cincinnati Bell, Akamai, VitalStream, and Knology.
The Company provides national and international communications
services, as well as hosting, collocation and other professional
services. The Company filed for chapter 11 protection on April
15, 2005 (Bankr. M.D. Tenn. Case No. 05-04639). Robin Bicket
White, Esq., at MGLAW PLLC, represent the Debtor. When the Debtor
filed for protection from its creditors, it estimated assets and
debt between $1 million to $10 million.
About Integrated Media
Headquartered in Atlanta, Georgia, Integrated Media Holdings, Inc.
(OTCBB: IMHI) -- http://www.i-mediaholdings.com/-- is a publicly
traded holding company that acquires, invests in, builds and
operates innovative digital communications and media technologies
businesses. The I-Media Group develops, operates and integrates
technologies and network infrastructure to form a digital commerce
EcoSystem that supports multiple forms of distribution for
entertainment, media, and communications services over broadband.
Going Concern Doubt
Ronald N. Silberstein, CPA, PLLC, in Farmington Hills, Michigan,
raised substantial doubt about Integrated Media Holdings, Inc.'s
ability to continue as a going concern after auditing the
Company's consolidated financial statements for the year ended
Dec. 31, 2005. The auditor pointed to the Company's limited
revenue, incurred losses from operations and working capital and
stockholders deficiencies.
INTERSTATE BAKERIES: De Minimis Assets Sold for $1MM in Two Months
------------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates filed
with the U.S. Bankruptcy Court for the Western District of
Missouri a report of the sales of their de minimis assets
concluded during the period from April 1, 2006, through May 31,
2005.
The Debtors report that they sold various De Minimis Assets for
$1,037,053, inclusive of deductions for commissions, fees or
taxes paid. Among the De Minimis assets sold are:
Purchase
Sale Date Purchaser Asset Description Price
--------- --------- ----------------- --------
04/03/06 AMF Cream Yeast System $27,000
04/03/06 AMF Tunnel Oven 77,625
04/03/06 AMF Templex Proofer 270,000
04/03/06 AMF Moulder & Panner 16,875
04/06/06 Brookfield Auto Wrecker Automobiles 19,898
04/14/06 Mike & Deane Ervin Real Property 47,383
04/21/06 Longevity Development Real Property 122,551
04/26/06 Bishop Truck Parts Automobiles 10,414
04/26/06 Eel Automobiles 11,661
04/26/06 Brookfield Auto Wrecker Automobiles 20,529
04/27/06 Markwayne Mullin Real Property 193,828
05/16/06 Continental Banking Co. Pan System 67,500
The Debtors have sold $6,441,177 in De Minimis Assets since they
filed for bankruptcy.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 44; Bankruptcy Creditors' Service, Inc., 215/945-7000)
INTERSTATE BAKERIES: Wants to Reject 12 Real Property Leases
------------------------------------------------------------
Pursuant to Sections 105(a) and 365(a) of the Bankruptcy Code,
Interstate Bakeries Corporation and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Western District
of Missouri to reject 12 unexpired non-residential real property
leases:
Rejection
Landlord Location Date
-------- -------- ---------
Betty Evans Tallulah, Los Angeles 7/20/06
Betty Evans Tallulah, Los Angeles 7/20/06
R.R. Browder Corp. Rockwood, Tennessee 7/20/06
Genecov Investments, Ltd. Tyler, Texas 7/20/06
Walter Hugh Zinnecker Houston, Texas 7/20/06
Leo Frazier Davenport, Iowa 7/20/06
Gayle Tripp Greenville, North Carolina 7/20/06
ASPI Group Moses Lake, Washington 7/20/06
Kensington Van Buren, LP Riverside, California 7/31/06
Ed Perlenfein Albany, Oregon 7/31/06
TNC Leasing Arco, Idaho 8/09/06
Barry L. Nolind Oroville, California 8/09/06
The Debtors seek that any of their remaining personal property in
each of the Premises after the effective rejection date will be
deemed abandoned to the landlord of each Real Property Lease.
The Landlord will be entitled to remove or dispose of the
property in its sole discretion.
The Debtors assert that each of the Real Property Leases do not
have any marketable value beneficial to their estates.
Furthermore, the Debtors note that certain of the Real Property
Leases may obligate them to pay for real estate taxes, utilities,
insurance and other charges.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 44; Bankruptcy Creditors' Service, Inc., 215/945-7000)
INTERSTATE BAKERIES: Wants $200 Million DIP Financing Extended
--------------------------------------------------------------
Interstate Bakeries Corporation filed a motion, on Aug. 2, 2006,
in the U.S. Bankruptcy Court seeking approval of a proposed
extension of its $200 million debtor-in-possession financing
facility to June 2, 2007. The maturity date under the proposed
extension coincides with the end of IBC's 2007 fiscal year.
JPMorgan Chase Bank, the agent for the initial DIP facility, which
expires Sept. 22, 2006, will continue to act as agent and
syndicate the extended financing facility.
"We are pleased to have reached agreement with JPM Chase regarding
the extension and believe the proposed terms provide us with the
liquidity necessary to complete our Chapter 11 restructuring,"
according to Tony Alvarez II, chief executive of IBC and co-
founder and co-chief executive of Alvarez & Marsal, the global
corporate advisory and turnaround management services firm.
"The improvement in financial performance has taken longer to
complete principally due to intense competitive pressures and
significantly higher ingredient costs, particularly flour and
sugar, and energy costs negatively impacting our fiscal 2006
performance. We believe fiscal 2007 will be a transitional year
for the Company during which the operational, financial and
marketing initiatives we have implemented during our restructuring
will begin to impact our results."
Extension of Exclusivity
In a separate motion filed on Aug. 2, 2006, the Company asked the
Court to extend the exclusive periods within which it may file and
seek acceptances of its plan of reorganization until Jan. 31,
2007, and April 2, 2007, respectively. The extension of its
exclusivity period is intended to, among other things, permit IBC
to complete the valuation analysis and explore exit financing
alternatives necessary to develop the plan of reorganization.
Under the previous schedule, the Company had until Sept. 22, 2006,
to file a plan of reorganization and until Nov. 21, 2006, to
solicit acceptance of that plan.
Since voluntarily filing to restructure under Chapter 11 of the
Bankruptcy Code on Sept. 22, 2004, the Company has been engaged on
a number of fronts to streamline operations, enhance revenue and
decrease costs. As part of a comprehensive plan to return it to
profitability, IBC has:
* Restructured its 10 profit centers -- The Company has closed
nine bakeries and approximately 200 distribution centers;
rationalized its delivery route network, reducing the number
of routes by 30%, from 9,100 delivery routes to 6,400; and
reduced its workforce by 7,000 positions.
* Disposed of certain non-core assets during its Chapter 11
case, the aggregate net proceeds of which are $93 million.
* Commenced negotiations of long-term extensions with respect
to most of its 420 collective bargaining agreements with its
union-represented employees resulting in ratification by
employees or agreements reached in principle, subject to
ratification by employees, of 200 CBAs. In total, these CBAs
cover 65% of IBC's unionized workforce. IBC hopes to
negotiate similar agreements with its remaining collective
bargaining units, although there are no assurances that the
CBA negotiation process will proceed in the same time frame
or fashion as it has to date. In addition, because the
framework for the agreements was initially fashioned based
upon operating assumptions made during the early stages of
the PC restructuring process, it is possible that, if actual
results do not meet expectations, these agreements (which
remain subject to assumption or rejection in the Chapter 11
case) may need to be revisited and additional concessions may
be necessary.
* Initiated an aggressive marketing program designed to offset
revenue declines by developing protocols to better anticipate
and meet changing consumer demand through a consistent flow
of new products. Since the beginning of fiscal 2006, IBC has
launched numerous new products and promotions. While these
efforts have met IBC's expectations to date, it continues to
work on other programs and additional new product launches.
"During this fiscal year, we intend to further address our
declining sales through existing and additional marketing
initiatives, complete negotiations with our remaining union-
represented employees, and address the continued cost pressures
through price increases," Mr. Alvarez said. "The success and
timing of those efforts will significantly impact our future
results."
The Company noted that, while there can be no assurances as to
future market developments, any shifts in ingredients and energy-
related costs to more historic levels will also significantly
impact its future results. With the PC restructuring efforts
completed and new marketing initiatives in place, IBC will also
focus on improving its manufacturing processes in the bakeries and
enhancing its service to customers through its field sales force.
Mr. Alvarez said that granting the extension of the plan filing
and solicitation periods will allow the Company time to complete
its remaining restructuring efforts, principally the on-going
negotiations with its union-represented employees.
The extension of its exclusive periods will also permit IBC to
continue what have thus far been constructive discussions with its
constituent groups about various alternatives for emergence from
Chapter 11. However, in light of the inherent uncertainties
resulting from the financial performance of IBC's business and the
bankruptcy process, IBC cannot predict the amount or type of
distributions that stakeholders can expect to receive or retain,
if any.
Search for Permanent CEO
IBC said that in order to build upon the operational and financial
improvements the Company has achieved under the leadership of Mr.
Alvarez, it intends to commence a search for a permanent CEO. The
Board also intends to review candidates to fill its two vacancies
on the Board resulting from the resignations of Charles Sullivan
and James Elsesser in July 2005 and September 2004, respectively.
"From the outset of these cases, the Board has intended to retain
a long-term chief executive to lead IBC into the future," said
Chairman of the Board of Directors Leo Benatar. "The Board
believes that, with the Company's operational initiatives
substantially complete, it is appropriate to begin the search for
long-term leadership to continue the operational efficiency,
marketing and brand initiatives that Tony and his team have begun.
Needless to say, the Board appreciates Tony's leadership and
significant efforts and achievements during this critical time in
IBC's long history."
Mr. Alvarez will remain as CEO throughout the search process and
will be available thereafter to continue in an advisory capacity
to be determined by the Board, including the leadership of the
Company's efforts to complete the negotiation of its remaining
collective bargaining agreements. It is anticipated that John
Suckow, a managing director at A&M and currently executive vice
president and chief restructuring officer of IBC, will remain in
those positions and continue to be assisted by personnel from A&M
on an as-needed basis.
The Company is reviewing lists of candidates for the Board
suggested by the Official Committee of Equity Security Holders, as
well as those submitted directly by Brencourt Advisors, LLC, an
IBC stockholder. "In making its decision at this time, the Board
is hopeful that the addition of new, qualified board members will
augment the industry and financial expertise of the existing
Board, as well as provide strong, new direction in considering the
Company's available restructuring alternatives," Mr. Benatar said,
adding that there is substantial overlap between the two lists,
since four of the total of eight proposed candidates are reflected
on both lists.
Provisions of Extended DIP Financing
Terms of the proposed DIP financing facility extension were
attached to a Form 8-K that the Company filed with the Securities
and Exchange Commission and include, among other proposed terms
and conditions, financial covenants requiring IBC to achieve
minimum financial performance targets. The minimum financial
performance targets resulted from a negotiation process and are
not necessarily indicative of the expected operating performance
of IBC in future fiscal periods, especially periods beyond fiscal
2007.
The proposed extension of the DIP financing facility also contains
a provision to further augment IBC's cash resources by allowing it
to use for general corporate purposes 50% of the restricted cash
previously unavailable to the Company, with the remaining 50
percent going to partially repay IBC's senior secured pre-petition
loans. As of Aug. 2, 2006, the amount of such restricted cash is
approximately $88 million.
As of July 1, 2006, the end of the Company's first period of
fiscal 2007, the Company had $74.5 million of unrestricted cash
and $86.5 million of restricted cash. To date, IBC has not
borrowed under its $200 million DIP financing facility, although
it has issued letters of credit under the DIP financing facility
primarily in support of the Company's insurance programs. As of
July 1, 2006, there were $105.8 million of letters of credit
outstanding and the amount of the DIP financing facility available
for borrowings as of that date was $72.8 million.
IBC is optimistic that it will receive the support of the lenders
party to the DIP financing facility to extend the facility through
fiscal 2007 as well as consent of the pre-petition lenders to such
transactions; however, there can be no assurances that such
lenders will agree to the extended DIP financing facility on the
terms and conditions currently contemplated by the proposed term
sheet or that alternative lenders or sources of financing will be
available in the event no agreement to extend is reached with such
lenders. It is anticipated that both the exclusivity extension
motion and the motion seeking approval of the amended DIP
financing facility will be considered by the Bankruptcy Court at a
hearing scheduled for Aug. 23, 2006.
Sec Reports
IBC continues to work towards completion of its Annual Reports
on Form 10-K for the fiscal years ended May 29, 2004 and May 28,
2005, Quarterly Reports for the quarters ended Aug. 21, 2004,
Nov. 13, 2004, and March 5, 2005 and is hopeful that such reports
may be filed in the near term. Upon completion and filings of the
reports, IBC will be working expeditiously to complete and file
other periodic reports that have not yet been filed. Despite
IBC's desire to complete the reports and file them with the SEC,
there can be no assurances as to the timing thereof or that these
reports will be finalized and filed.
About Interstate Bakeries
Based in Kansas City, Missouri, Interstate Bakeries Corporation
(OTC: IBCIQ) is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs 32,000 in 54
bakeries, more than 1,000 distribution centers and 1,200 thrift
stores throughout the U.S. The Company and seven of its debtor-
affiliates filed for chapter 11 protection on Sept. 22, 2004
(Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and
Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$1,626,425,000 in total assets and $1,321,713,000 (excluding the
$100,000,000 issue of 6.0% senior subordinated convertible notes
due Aug. 15, 2014 on Aug. 12, 2004) in total debts.
IMC INVESTMENT: Can Use Lenders' Cash Collateral Until August 11
----------------------------------------------------------------
The Honorable Harlin DeWayne Hale of the U.S. Bankruptcy Court for
the Northern District of Texas authorized IMC Investment
Properties, Inc. to use, on an interim basis, cash collateral
securing repayment of its debt to its prepetition secured
creditors, Plains Capital Bank and Compass Bank.
Security Interests
The Debtor owns a 143,430 square foot office building located at
6221 Riverside Drive in Irving, Texas, and has pledged the office
building as collateral to secure four obligations. These security
interests have been granted to Plains Capital Bank and Compass
Bank. In addition, the secured creditors have entered into an
intercreditor agreement that may affect the priority of the liens
granted to them.
The secured creditors' security interests include:
A) Compass First Lien
On Sept. 17, 2003, the Debtor executed a promissory first-lien
note payable to Texas Bank for $7,500,000, which was later
assigned to Compass Bank. The approximate principal balance due
and owing on the first lien note is $6,989,000.
Aside from the promissory note, the Debtor executed a deed of
trust, security agreement, and assignment of rents and leases on
Sept. 17, 2003.
B) Compass Second Lien
The Debtor executed a second deed of trust, security agreement and
assignment of rents and leases in favor of Texas Bank. The Debtor
believes that the debt the instrument secures remains unfounded,
and therefore, the second lien note does not secure any
indebtedness.
C) Plains Third Lien
On Sept. 17, 2003, the Debtor executed a revolving line of credit
promissory note payable to Plains Capital for $2,000,000. To
secure the third lien note, the Debtor also executed the deed of
trust security agreement and assignment of rents, leases, incomes
and agreement on Sept. 17, 2003. The approximate principal
balance due and owing on the third lien note is $1,788,181.
D) Plains Fourth Lien
The Debtor also executed a promissory fourth lien note payable to
Plains Capital for $2,200,000. The approximate principal balance
due and owing on the fourth lien note is $2,006,329.
Pursuant to the secured creditors' intercreditor agreement,
Compass Bank subordinated its lien interests to the fourth lien
note as it relates to the payment of rent under a lease executed
between the Debtor and American Esoteric Laboratories, Inc. The
proceeds of the fourth lien note were used to provide tenant
improvements requested by American Esoteric.
Judge Hale orders the Debtor to:
a) use the cash collateral to pay reasonable and necessary
operating expenses of the Debtor's office building,
including supplies, inventory, maintenance expenses, taxes,
and salaries.
b) use the cash collateral according to the Debtor's cash
collateral budget.
A full-text copy of the Debtor's cash collateral budget is
available for free at http://researcharchives.com/t/s?e9b
The Court will convene a final cash collateral hearing on Aug. 11,
2006, at 9:00 a.m.
About IMC Investment
Headquartered Dallas, Texas, IMC Investment Properties, Inc.,
filed for chapter 11 protection on July 3, 2006 (Bankr. N.D. Tex.
Case No. 06-32754). Edwin Paul Keiffer, Esq., and Keith Miles
Aurzada, Esq., at Hance Scarborough Wright Ginsberg and Brusilow,
LLP, represent the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.
JAMES RIVER COAL: Weak Liquidity Prompts Moody's to Cut Ratings
---------------------------------------------------------------
Moody's Investors Service lowered James River Coal Company's
corporate family rating to Caa1 from B2, its senior secured rating
to B3 from B1 and its senior unsecured rating to Caa2 from B3. At
the same time, Moody's assigned a negative outlook and affirmed
the SGL-4 speculative grade liquidity rating.
The revision in ratings was prompted by Moody's belief that the
poor geologic and operating conditions at the company's mines will
result in an ongoing challenge to meet production targets and, in
combination with high input and labor costs, a continuation of
poor earnings and negative free cash flow.
The revision in rating also reflects the company's weak liquidity
in the face of debt service costs and continuing capital
expenditures. Additionally, Moody's believes there is limited
cushion under James River's credit facility financial covenants
such that the company, later this year, may be in default of these
covenants if it does not receive another waiver or amendment, in
which case it may be unable to access its revolver.
Downgrades:
Issuer: James River Coal Company
* Corporate Family Rating, Downgraded to Caa1 from B2
* Senior Secured Bank Credit Facility, Downgraded to B3 from
B1
* Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2
from B3
Outlook Actions:
Issuer: James River Coal Company
* Outlook, Changed To Negative From Rating Under Review
Moody's last rating action on James River Coal was to place the
company's B2 rating under review for possible downgrade on March
2, 2006. James River Coal Company, based in Richmond Virginia, is
engaged in the mining and marketing of steam and industrial coal
and had revenues in the fiscal year ended December 31, 2005 of
$454 million.
JUNIPER NETWORKS: Earns $567.5 Million in Quarter Ended June 30
---------------------------------------------------------------
Juniper Networks Inc. reported net revenues of $567.5 million
for the quarter ended June 30, 2006, an increase of 15%, compared
with $493.0 million for the same quarter last year.
The Company's net cash and investments increased over $200M during
the second quarter of 2006 to $2.25 billion.
"We're pleased with the results for the quarter, the confidence
our customers continue to place in Juniper and the strength of the
business," Scott Kriens, chairman and chief executive officer of
Juniper Networks, said. "We see continued and expanding
opportunity in the marketplace as we participate in the
accelerating convergence on IP and benefit from the resulting
demand for the unique capabilities of Juniper."
Juniper's capital expenditures and depreciation during the second
quarter of 2006 were $25.2 million and $18.6 million,
respectively.
The Company's market capitalization has declined since March 31,
2006, hence, the Company is evaluating the carrying value of
certain long-lived assets, consisting primarily of $4.9 billion of
goodwill recorded on its balance sheet at June 30, 2006.
About Juniper Networks
Juniper Networks Inc. -- http://www.juniper.net/-- enables secure
and assured communications over a single IP network. The
company's IP platforms enable customers to support many different
services and applications at scale.
* * *
As reported in the Troubled Company Reporter on May 24, 2006,
Standard & Poor's Rating Services placed ratings on Juniper
Networks Inc. including its 'BB' long-term and 'B-1' short-term
corporate credit ratings, on CreditWatch with negative
implications.
KAISER ALUMINUM: Invests $30 Million to Expand Trentwood Facility
-----------------------------------------------------------------
Kaiser Aluminum Corporation reported an additional expansion of
capacity at its Trentwood, Washington, rolling mill in order to
address the significant growth in demand for heat treat plate used
in aerospace, defense and general engineering applications. The
$30 million follow-on investment, when combined with a previously
announced $75 million expansion, is expected to effectively double
Kaiser's plate capacity.
The primary element of this further expansion is an additional
horizontal heat treat furnace. The furnace is expected to begin
production in early 2008 and will complement the pair of
previously announced furnace expansions, the first of which has
begun production and is expected to be fully operational later
this year. The second furnace is slated to start production in
early 2007 and be fully operational by mid-year.
"This additional investment is supported by a strong customer
order book that requires capacity beyond what is being provided by
the $75-million expansion," said Jack A. Hockema, chairman,
president and CEO, Kaiser Aluminum.
About Kaiser Aluminum
Based in Foothill Ranch, California, Kaiser Aluminum Corporation
(NASDAQ: KALU) -- http://www.kaiseraluminum.com/-- produces
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.
KERN INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Kern Industries, Inc.
70-A Carolyn Boulevard
East Farmingdale, NY 11735
Bankruptcy Case No.: 06-71805
Chapter 11 Petition Date: August 1, 2006
Court: Eastern District of New York (Central Islip)
Judge: Dorothy Eisenberg
Debtor's Counsel: Andrew M. Thaler, Esq.
Thaler & Gertler, LLP
900 Merchants Concourse, Suite 414
Westbury, NY 11590
Tel: (516) 228-3553
Fax: (516) 228-3396
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
GE Capital Corp. MBO Folding Machines $700,000
44 Old Ridgebury Road
Danbury, CT 06810
John Kern Various Loans and $796,000
66 Elgin Road Credit Charges
Valley Stream, NY 11581
Central Lewmar Promissory Note $491,062
60 McClellan Street dated May 20, 2005
Newark, NJ 07114
U.S. Small Business Admin. Equipment purchased $265,730
2120 River Front Drive with SBA Loan
Little Rock, AR 72202
Kenneth Kern Loans to the $225,000
66 Elgin Road Corporation
Valley Stream, NY 11581
Marquardt & Company Paper Supplier $173,147
U.S. Bancorp Equipment Digital Platesetting $110,000
Finance, Inc. Machine
Fleet Bank Line Credit Line of Credit $101,000
GE Capital Co. Assignee of Security $74,219
Interest
All Points Capital Corp. VIJUK Stitcher and $65,000
Automatic Pocket Folder
ACC Capital Corp. 5120 Imagesetting $65,000
Machine
American Express Line Line of Credit $42,543
Russell Wilson Inc. Mechanic $33,253
Financial Pacific Funding Digital Printer Proofer $30,139
Wells Fargo Bank Line of Credit $29,000
Sheila Paper Corp. Paper Supplier $25,668
Kodak Polychrome LLC $22,563
Bank of America Business Credit Card $16,218
Pitman Company Supplier of Chemicals $15,379
and Plates
Citibank fka EAB Bank Liens on Debtor's $0
Inventory/Equipment
KEYS MANUFACTURING: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Keys Manufacturing Co., Inc.
13338 North 1900th Street
Paris, Illinois 61944
Tel: (217) 465-4001
Fax: (217) 465-2123
Bankruptcy Case No.: 06-90781
Type of Business: The Debtor manufactures animal feeds and pet
food. See http://www.keysmanufacturing.com/
Chapter 11 Petition Date: August 1, 2006
Court: Central District of Illinois (Danville)
Judge: Gerald D. Fines
Debtor's Counsel: Steve Miller, Esq.
Steven Blakely, Esq.
Acton & Snider, LLP
11 East North Street
Danville, Illinois 61832
Tel: (217) 442-0350
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
KNOLL INC: Earns $14.8 Million in Second Quarter 2006
-----------------------------------------------------
Knoll, Inc's net income of $14.8 million for the second quarter
ended June 30, 2006, increased 29.8% over the second in the prior
year and its quarter ending backlog of $169.6 million, increased
29.3% over second quarter 2005.
The Company reported net sales of $247.5 million for the quarter,
a 25.2% increase from second quarter 2005 and operating income
increased 21.2% to $29.2 million from the second quarter 2005.
"We continued to differentiate ourselves with our financial
performance this quarter," Andrew Cogan, chief executive officer
said. "Not only did we deliver industry leading operating margins
in spite of significant inflation and foreign exchange pressures,
but as our growth initiatives have gained traction our top-line
performance versus the industry has accelerated."
Cash provided by operations in the second quarter of 2006 was
$21.2 million compared to $18.6 million during the same period the
year before. The Company repurchased approximately 531,000 shares
of its stock for $10.2 million during the quarter. $8.3 million
of the repurchases were under the Company's $50 million buyback
program with the remaining amount purchased with stock option
proceeds. Also during the quarter the Company repaid $8.1 million
of debt and paid a quarterly dividend of $5.1 million.
Barry McCabe, chief financial officer, said, "While implementing
our $50,000,000 buyback program we were still able to improve our
leverage ratio sequentially from the first quarter 2006 from 2.8
to 2.6 and we are pleased with S&P's recent decision to upgrade
the ratings on our debt to a 'BB' rating."
Headquartered in East Greenville, Pennsylvania, Knoll Inc.,
(NYSE:KNL) designs and manufactures branded office furniture
products and textiles, serves clients worldwide. It distributes
its products through a network of more than 300 dealerships and
100 showrooms and regional offices. The Company operates four
manufacturing sites in North America: East Greenville,
Pennsylvania; Grand Rapids and Muskegon, Michigan; and Toronto,
Ontario. In addition, it has plants in Foligno and Graffignana,
Italy.
* * *
As reported in the Troubled Company Reporter on July 18, 2006
Standard & Poor's Ratings Services raised its corporate credit
rating and senior secured bank loan ratings, on Knoll Inc., to
'BB' from 'BB-'. The outlook was revised to stable from positive.
KNOLL INC: Stockholders Commences 9.1 Mil. Secondary Shares Offer
-----------------------------------------------------------------
Certain of Knoll, Inc.'s stockholders commenced a secondary
offering of 9,100,000 shares of common stock under the Company's
existing effective shelf registration statement.
The shares are sold by Warburg, Pincus Ventures, L.P., and Burton
B. Staniar. Warburg Pincus intends to grant the underwriters of
the offering an option to purchase up to an additional 1,365,000
shares of common stock. Knoll will not issue any shares or
receive any proceeds in the offering.
Goldman, Sachs & Co. and Banc of America Securities LLC are the
joint book-running lead managers and UBS Investment Bank is co-
manager of the offering.
A preliminary prospectus supplement on the proposed offering may
be obtained by contacting:
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Attn: Prospectus Department
212-902-1171
Banc of America Securities LLC
Capital Markets Operations
100 West 33rd Street, 3rd Floor
New York, NY 10001
Attn: Prospectus Fulfillment
Headquartered in East Greenville, Pennsylvania, Knoll Inc.,
(NYSE:KNL) designs and manufactures branded office furniture
products and textiles, serves clients worldwide. It distributes
its products through a network of more than 300 dealerships and
100 showrooms and regional offices. The Company operates four
manufacturing sites in North America: East Greenville,
Pennsylvania; Grand Rapids and Muskegon, Michigan; and Toronto,
Ontario. In addition, it has plants in Foligno and Graffignana,
Italy.
* * *
As reported in the Troubled Company Reporter on July 18, 2006
Standard & Poor's Ratings Services raised its corporate credit
rating and senior secured bank loan ratings, on Knoll Inc., to
'BB' from 'BB-'. The outlook was revised to stable from positive.
KRISPY KREME: Resolves Suit with Southern California Franchisee
---------------------------------------------------------------
Krispy Kreme Doughnuts, Inc. and its wholly owned subsidiary,
Krispy Kreme Doughnut Corporation, reached agreements with their
Southern California franchisee, Great Circle Family Foods, LLC, on
an integrated transaction involving the settlement of all pending
litigation between the parties. As part of the transaction,
Southern Doughnuts, LLC, a wholly owned subsidiary of Krispy Kreme
Doughnut Corporation, will acquire at closing three of GCFF's
stores located in Burbank, Ontario and Orange, California,
together with the related franchise rights.
Southern Doughnuts agreed to pay GCFF $2.9 million for the
acquired stores and related assets, with $400,000 having already
been paid upon the signing of the agreements and $2.5 million to
be paid upon the parties' satisfaction of certain closing
conditions. The parties anticipate closing the transaction in
mid-to-late August. Under the agreements, Krispy Kreme, GCFF and
related parties exchanged mutual releases and dismissals regarding
the pending litigation and arbitration, which releases and
dismissals will remain in effect unless Southern Doughnuts fails
to remit the balance of the consideration owed. In addition, the
parties contemplate negotiating and entering into an option
agreement under which Krispy Kreme will have the option to acquire
100% of the equity of GCFF for nominal consideration, exercisable
following a due diligence period to be agreed to by the parties.
"This agreement is another step in the turnaround of Krispy
Kreme," said Daryl Brewster, President and Chief Executive Officer
of Krispy Kreme. "We look forward to gaining the rights to
several profitable stores in the Southern California market and
continuing to serve our customers there."
About Krispy Kreme
Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme
(NYSE: KKD) --http://www.krispykreme.com/-- is a leading branded
specialty retailer of premium quality doughnuts, including the
Company's signature Hot Original Glazed. There are currently
approximately 320 Krispy Kreme stores and 80 satellites operating
systemwide in 43 U.S. states, Australia, Canada, Mexico, the
Republic of South Korea and the United Kingdom.
Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC
is a majority-owned subsidiary and franchisee partner of Krispy
Kreme Doughnuts, Inc., in the Philadelphia region. The Debtor
operates six out of the approximately 360 Krispy Kreme stores and
50 satellites located worldwide. The Company filed for chapter 11
protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268).
M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew
Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated
$10 million to $50 million in assets and debts.
Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is
a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11
protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932).
The bankruptcy filing will facilitate the sale of 12 Krispy Kreme
stores, as well as the franchise development rights for Colorado,
Minnesota and Wisconsin, for approximately $10 million to Westward
Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho,
Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP
represents Glazed in its restructuring efforts. When Glazed filed
for protection from its creditors, it estimated assets and debts
between $10 million to $50 million.
KremeKo, Inc., Krispy Kreme's Canadian franchisee, is currently
restructuring under the Companies' Creditors Arrangement Act.
Pursuant to the Court's Initial Order, Ernst & Young Inc. was
appointed as Monitor in KremeKo's CCAA proceedings. The Monitor
is attempting to sell the KremeKo business.
LETAP OF WALTERBORO: Case Summary & Seven Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: Letap Of Walterboro, LLC
dba Sleep Inn Of Walterboro
4620 Dorchester Road
North Charleston, SC 29405
Bankruptcy Case No.: 06-03235
Type of Business: The Debtor operates a hotel.
Chapter 11 Petition Date: August 1, 2006
Court: District of South Carolina (Charleston)
Debtor's Counsel: Kevin Campbell, Esq.
Campbell Law Firm, P.A.
P.O. Box 684
890 Jonnie Dodds Boulevard
Mt. Pleasant, SC 29465
Tel: (843) 884-6874
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's Seven Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
GE Capital Leasing $60,000
P.O. Box 802585
Chicago, IL 60680-2585
Internal Revenue Service $14,174
P.O. Box 267 STOP 812
Covington, KY 41019-0001
Marlin Outdoor Advertising, Ltd. $3,600
209 Fountain Centre
Hilton Head Island, SC 29928
South Carolina Logos, Inc. $3,000
1221 Atlas Road
Columbia, SC 29209
Tile & Stone $2,258
c/o Woodard & Butler
P.O. Box 1906
Walterboro, SC 29488
Dell, Inc. $392
Better Business Bureau $295
MATTRESS SOURCE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: The Mattress Source, Inc.
6170 McDonough Drive
Norcross, Georgia 30093
Bankruptcy Case No.: 06-69395
Type of Business: The Debtor manufactures mattresses.
Chapter 11 Petition Date: August 2, 2006
Court: Northern District of Georgia (Atlanta)
Debtor's Counsel: Robert J. Mottern, Esq.
Buker, Jones & Haley, P.C.
115 Perimeter Center Place
South Terraces, Suite 170
Atlanta, Georgia 30346
Tel: (770) 804-0500
Fax: (770) 804-0509
Debtor's Total Assets and Liabilities as of June 30, 2006:
Total Assets: $158,702
Total Debts: $1,050,758
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Georgia Department of Revenue $108,044
Compliance Division
Athens Office
190 Ben Burton Circle
Bogart, GA 30622
Inland U.S. Management $56,465
1955 Lake Park Drive
Suite 300
Smyrna, GA 30080
Atlanta Journal Constitution $34,108
P.O. Box 4689
Atlanta, GA 30302
WFSH FM 104.7 Salem Media of Georgia $28,819
2970 Peachtree Road Northwest
Suite 700
Atlanta, GA 30305
Stonecrest Festival $25,119
c/o The Hayman Company
5700 Crooks Road, Suite 400
Troy, MI 48098-2809
WSB-TV $24,666
Equity One Realty $24,578
Visa Platinum - Bank of America $24,398
Sugarloaf Marketplace $20,259
Protect-A-Bed $20,113
Pellerin & Salomon $19,938
The Blackstock Group, Inc. $19,051
River Pointe/Canton LLC $17,536
Sleep Shop Solutions $12,287
American Express $11,031
L&P Financial Services $10,257
Lionshare Media Services $7,450
The Times $7,319
Gold Bond $6,220
University Directories $5,525
MAXICARE HEALTH: June 31 Balance Sheet Upside-Down by $5.9 Mil.
---------------------------------------------------------------
Maxicare Health Plans, Inc., reported a $233,000 net loss on
$6,000 of net sales for the three months ended June 30, 2006.
At June 30, 2006, the Company's balance sheet showed $271,000
in total assets and $6,261,000 in total liabilities resulting in
$5,990,000 stockholders' deficit.
A full-text copy of the regulatory filing is available for free
at http://ResearchArchives.com/t/s?ec1
Going Concern Doubt
Marcum & Kliegman, LLP, in New York, raised substantial doubt
about Maxicare Health Plans' Inability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's incurred net losses and working capital and
shareholders' deficiencies. At December 31, 2005, The company had
a negative net worth of $5.4 million and a working capital
deficiency of $4.6 million.
About Maxicare Health
Maxicare Health Plans, Inc., is a holding company that formerly
operated health maintenance organizations and other subsidiaries,
in the field of managed healthcare. All significant subsidiaries
formerly operated by Maxicare Health Plans (the California and
Indiana HMOs and Maxicare Life and Health Insurance Company, Inc.)
were placed into bankruptcy, rehabilitation and administrative
supervision, respectively, in May of 2001 and are currently in
liquidation. These former subsidiaries are no longer included in
Maxicare's consolidated financial statements after May 2001. The
Company has not been engaged in any active business and has no
reasonable prospects of obtaining or generating any ongoing
business. The Company is exploring possible strategies to
realize any possible value remaining in the Company.
MESABA AVIATION: Wants Until February 12 to File Chapter 11 Plan
----------------------------------------------------------------
Mesaba Aviation, Inc., dba Mesaba Airlines, asks the United States
Bankruptcy Court for the District of Minnesota to extend the time
within which it has the exclusive right to:
(a) file a Plan to February 12, 2007; and
(b) gain acceptance of that Plan to April 13.
Will R. Tansey, Esq., at Ravich Meyer Kirkman McGrath & Nauman,
in Minneapolis, Minnesota, informs the Court that the Debtor has
made significant progress in its Chapter 11 case.
Specifically, the Debtor has:
(a) participated in extensive negotiations and legal
proceeding in connection with modifying its pilots, flight
attendants and mechanics collective bargaining agreements;
(b) negotiated mutually acceptable labor cost reductions with
one of its unions;
(c) negotiated the terms and conditions for the return of 48
aircraft from three separate lessors;
(d) reduced pilot training costs and other significant cost
reductions;
(e) sold excess equipment;
(f) rejected unnecessary or burdensome contracts;
(g) submitted several separate bids to acquire a new airline
services agreement with both Northwest Airlines, Inc., and
Continental Airlines;
(h) commenced and continued a thorough review of the 777
proofs of claim filed with the court;
(i) negotiated debtor-in-possession financing;
(j) continued the review of real estate leases to determine
whether each lease should be assumed or rejected, and
obtained extensions of time in which to assume or
reject the leases;
(k) responded to numerous motions for relief from stay, to
compel assumption or rejection and other miscellaneous
relief;
(l) enforced rights against Northwest and other executory
contract counterparties; and
(m) negotiated and obtained approval of several letters of
credit to ensure continued, uninterrupted operations.
However, significant work remains to be done before the Debtor
can develop a final business plan, and negotiate a long term air
services arrangement with Northwest or other major carrier,
restructure leases, reduce labor and maintenance costs, and
arrange potential short or long term financing, Mr. Tansey
asserts.
Mr. Tansey says resolution of these matters is necessary before
the Debtor will be able to develop and seek confirmation of a
plan of reorganization that will be in the best interests of the
estate.
The Debtor believes that significant progress has been made
towards reducing its operating costs but formulation of a plan is
not yet possible until it can meaningfully project its revenue
post-bankruptcy -- which is contingent on an ASA.
Mr. Tansey assures the Court that the Debtor's negotiations with
its unions and Northwest remain active and are progressing. The
Debtor continues to generate revenue and pay its bills as they
come due, and will have financing, sufficient operating cost
reductions, or an ASA in place before it no longer has sufficient
capital to operate.
The Debtor believes that its current exclusive periods are
insufficient in light of the size and unusual circumstances of
its Chapter 11 case, particularly its total reliance for revenue
on a business partner currently reorganizing in Chapter 11.
Since Northwest has obtained an additional six months to
exclusively propose a plan based on representations that it will
emerge from bankruptcy as soon as possible, Mesaba hopes that it
will reach an agreement with Northwest on an ASA before
Northwest's exclusivity periods expire.
The Debtor will subsequently be able to formulate a plan before
the end of January 2007, Mr. Tansey tells Judge Kishel.
Pending the Court's entry of a final order on its request, the
Debtor asks the Court to enter an interim order extending its
exclusive plan proposal period to August 25, 2006, and plan
solicitation period to October 24.
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. 21; Bankruptcy Creditors' Service, Inc., 215/945-
7000).
MOLTEN METAL: Judge Somma Denies Riemer's $400,000 Bonus Request
----------------------------------------------------------------
As reported in the Troubled Company Reporter, the U.S. Bankruptcy
Court for the District of Massachusetts appointed Stephen S. Gray
as the Chapter 11 Trustee in Molten Metal Technology and its
debtor-affiliates bankruptcy proceedings in 1999 at request of the
Debtors' principal lenders and over the objection of the Debtors
and the Official Committee of Unsecured Creditors.
Upon installation, Mr. Gray faced a case burdened with a
$20 million administrative insolvency and tainted by significant
allegations of concealment, misrepresentation and questionable
conduct by the Debtors' senior management and board. The Trustee
and his team however, through a systematic campaign of
investigation, asset liquidation and recovery litigation, managed
to achieve:
* $64 million in asset sale proceeds;
* $80 million in claims reduction;
* full payment of administrative and priority claims; and
* 5% distribution to general unsecured creditors.
The Professionals involved in the bankruptcy proceedings sought
final approval of compensation and expense. Riemer & Braunstein,
the Trustee's bankruptcy counsel, requested an additional $400,000
premium over its $4,564,078.75 lodestar request based on hourly
billings and actual expenses.
Riemer & Braunstein cited three factors why the premium was
warranted:
1. outcome-funds available for a 5% distribution to general
unsecured creditors where at the outset there was a
$20 million administrative insolvency;
2. Riemer & Braunstein's risk of nonpayment given that initial
insolvency; and
3. the complexity of the transactional and litigation
challenges overcome to produce the outcome.
The U.S. Trustee opposed the premium request, contending that:
(a) the lodestar is presumed to be a reasonable fee and
(b) an upward adjustment to the lodestar is warranted, if at
all, in the rare case where:
(i) the quality of service surpasses reasonable
expectations given the rates charged and
(ii) the success in the case is exceptional.
In a decision published at 2006 WL 1881851, the Honorable Robert
J. Somma granted Riemer & Braunstein's final compensation and
expense request but denied fee enhancement.
Judge Somma acknowledged that while the result is both substantial
and unexpected, the rare and limited circumstances in which an
upward adjustment is warranted wasn't present in this situation.
Judge Somma says that the outcome wasn't attributable to just one
player but to the whole team.
Judge Somma says management of complex cases requires experienced
and capable professionals, which is why the Trustee hired Riemer &
Braunstein. Riemer & Braunstein's experience and capabilities
contributed to the outcome may justify its engagement but its
lodestar allowance fairly and reasonably compensates it for the
application of those attributes to the requirements of the
engagement.
Molten Metals and its debtor-affiliates were engaged in the
business of pollution prevention and recycling for hazardous, non-
hazardous and radioactive materials.
NORD RESOURCES: March 31 Balance Sheet Upside-Down by $3.1 Million
------------------------------------------------------------------
Nord Resources Corporation filed its amended first quarter
financial statements for the quarterly period ended March 31,
2006, with the Securities and Exchange Commission on June 22,
2006.
The Company reported an $2,055,786 net loss with no net sale for
the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $4,126,123
in total assets and $7,246,696 in total liabilities resulting in
$3,120,573 stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $1,240,714 in total current assets available to
pay $7,050,661 in total current liabilities coming due within the
next 12 months.
A full-text copy of the regulatory filing is available for free
at http://ResearchArchives.com/t/s?ec2
Going Concern Doubt
Mayer Hoffman McCann P.C., in Denver, Colorado, raised substantial
doubt about Nord Resources' Inability to continue
as a going concern after auditing the Company's consolidated
financial statements for the year ended Dec. 31, 2005. The
auditor pointed to the Company's incurred a net loss of
$3,084,166 and $864,357 during the years ended December 31,
2005 and 2004, respectively.
About Claimsnet.com
Headquartered in Dallas, Texas, Claimsnet.com Inc. --
http://www.claimsnet.com/-- provides Internet-based claim
processing solutions for the healthcare payer industry, including
distinctive, advanced ASP technology. Claimsnet offers systems
that are distinguished by ease of use, customer care, security
and measurable cost advantages.
ORBITAL SCIENCES: 2006 2nd Quarter Net Income Increases to $9.7MM
-----------------------------------------------------------------
Orbital Sciences Corp. filed its second quarter financial
statements for the three months ended June 30, 2006, with the
Securities and Exchange Commission on July 26, 2006.
The Company reported net income of $9,799,000 for the three months
ended June 30, 2006, compared with $7,584,000 for the same period
in 2005.
For the three months ended June 30, 2006, the Company's revenues
were $196,974,000 compared with $177,403,000 for the same period
in 2005.
At June 30, 2006, the Company's balance sheet showed $724,987,000
in total assets, $312,937,000 in total liabilities, and
$412,050,000 in total stockholders' equity.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?eb4
Orbital Sciences Corporation (NYSE: ORB) develops and manufactures
small space and rocket systems for commercial, military and civil
government customers. The company's primary products are
satellites and launch vehicles, including low-orbit,
geosynchronous and planetary spacecraft for communications, remote
sensing, scientific and defense missions; ground- and air-launched
rockets that deliver satellites into orbit; and missile defense
systems that are used as interceptor and target vehicles. Orbital
also offers space-related technical services to government
agencies and develops and builds satellite-based transportation
management systems for public transit agencies and private vehicle
fleet operators.
* * *
As reported in the Troubled Company Reporter on May 9, 2006,
Standard & Poor's Ratings Services raised its ratings, including
the corporate credit rating to 'BB' from 'BB-', on Orbital
Sciences Corp. The outlook is stable.
PATRIOT MOTORCYCLE: Weinberg & Company Raises Going Concern Doubt
-----------------------------------------------------------------
Weinberg & Company, P.A., in Boca Raton, Fla., raised substantial
doubt about Patriot Motorcycle Corporation's ability to continue
as a going concern after auditing the Company's consolidated
financial statements for the years ended Sept. 30, 2005, and 2004.
The auditor pointed to the Company's net loss, negative cash flow
from operations, and accumulated deficit.
The Company reported a net loss of $4,298,427 on $7,943,253 of net
sales for the year ended Sept. 30, 2005, compared with an $836,810
net loss on $26,218 of net sales in 2004.
At Sept. 30, 2005, the Company's balance sheet showed $7,408,890
in total assets, $885,170 in total current liabilities, and
$6,523,720 in total shareholders' equity.
At Sept. 30, 2005, the Company's accumulated deficit more than
doubled to $7,342,672 compared to $3,044,245 deficit at Sept. 30,
2004.
The Company said its cash requirements over the next 12 months are
expected to include expenditures in connection with: (i)
increasing investment in research and development, (ii) hiring
additional personnel, if and as necessary; and (iii) implementing
an integrated accounting software package.
The Company believes that its current cash and cash equivalents on
hand and cash expected to generate from operations will be
sufficient to finance its anticipated capital and operating
requirements for at least the next 12 months.
The Company feels slower growth expectations would require fewer
capital expenditures and fewer research and development
investments.
A full-text copy of the Company's annual report for 2005 is
available for free at http://ResearchArchives.com/t/s?eb7
Patriot Motorcycle Corp. manufactures and distributes specialty
motorcycles; distributes a moderately priced line of dirt bike
motorcycles, ATVs, accessories and specialty clothing for families
and other entry-level consumers; and produces the syndicated
television program "Steel Dreams(TM)".
PERFORMANCE TRANSPORTATION: Opposes Chris Powers' Lift-Stay Plea
----------------------------------------------------------------
Performance Transportation Services, Inc., and its debtor-
affiliates ask the U.S. Bankruptcy Court for the Western District
of New York to deny Chris Powers request to lift the automatic
stay to allow him to pursue an action against Debtor Hadley Auto
Transportation.
Mr. Powers commenced an action in the Superior Court in and for
the County of Maricopa, in Arizona, against, Hadley Auto on Sept.
17, 2004. Mr. Powers asserted injuries from a motor vehicle
accident.
Debtors' Objection
Chris Powers implies that pursuant to the terms of the Debtors'
insurance policy with Discover Property & Casualty Insurance
Company, they are entitled to full indemnification in connection
with any damages awarded to him in the Arizona Action, Garry M.
Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York, notes.
This is the only justification Mr. Powers provides for modifying
the automatic stay.
The Debtors' policy coverage, however, is subject to a $500,000
self-funded retention, Mr. Graber informs Judge Kaplan. Thus,
the Debtors are obligated to pay the first $500,000 of any
defense costs incurred or damages awarded against them or their
employees in connection with the Arizona Action.
The payment of the costs at this time will only deplete the
Debtors' assets and decrease the potential distribution to be
provided to their other unsecured creditors, Mr. Graber argues.
"If the Motion is granted, it could open the floodgates to the
filing of other motions for relief from the stay, causing the
Debtors to have to expend significant resources defending against
the Action and the numerous other actions across the United
States," Mr. Graber points out. "As a result, the Debtors'
opportunity to formulate a viable plan of reorganization, which
the automatic stay is meant to provide, would be jeopardized."
The Official Committee of Unsecured Creditors supports the
Debtors' objection.
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. 11; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PERFORMANCE TRANSPORTATION: Balks at Crumlich's Move to Lift Stay
-----------------------------------------------------------------
Performance Transportation Services, Inc., and its debtor-
affiliates ask the U.S. Bankruptcy Court for the Southern District
of New York to deny Donald Crumlich's request to lift the
automatic stay to permit him to commence a personal injury action
against Debtor Leaseway Motorcar Transport Company.
Mr. Crumlich asserts a personal injury claim against Leaseway
believing that it maintains a liability insurance with a pre-
accident deductible of $1,000,000. Mr. Crumlich was a passenger
in one of the three vehicles involved in a June 2004 accident, one
of which was owned by Leaseway. Janet G. Burhyte, Esq., at Gross
Shuman Brizdle & Gilfillan, P.C., in Buffalo, New York, estimates
Mr. Crumlich's personal injury claim not to exceed $1,000,000.
According to Garry M. Graber, Esq., at Hodgson Russ LLP, in
Buffalo, New York, the Debtors are obligated to pay the first
$1,000,000 of any defense costs incurred or damages awarded
against the Debtors or their employees in connection with the Mr.
Crumlich's personal injury action.
If the Court grants Mr. Crumlich's request, he would receive
preferential treatment of his claim in direct violation of the
principle that similarly situated creditors are to be treated
similarly, Mr. Graber argues. The Debtors believe that this is
exactly the type of result that the automatic stay was intended
to avoid.
Mr. Crumlich does not even attempt to articulate any reason, nor
could he if he tried, as to why other like creditors should be
forced to subsidize his efforts to augment his own potential
recovery, Mr. Graber observes.
The Official Committee of Unsecured Creditors supports the
Debtors' arguments.
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. 11; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PHIBRO ANIMAL: Completes Sale of $240 Million Senior Notes
----------------------------------------------------------
Phibro Animal Health Corporation reported the consummation of the
sale of $160 million of its 10% senior notes due 2013 and $80
million of its 13% senior subordinated notes due 2014 in a private
placement and resale under Rule 144A and Regulation S of the
Securities Act of 1933, as amended.
The 10% senior notes and the 13% senior subordinated notes are
guaranteed by PAHC's existing domestic subsidiaries and will be
guaranteed by certain of its future domestic subsidiaries. It is
also anticipated that, at a date following the closing, one of
PAHC's existing foreign subsidiaries will guarantee the 10% senior
notes and the 13% senior subordinated notes.
On June 30, 2006, PAHC and its parent, PAHC Holdings Corporation,
commenced tender offers and consent solicitations with respect to
all of the outstanding 13% Senior Secured Notes due 2007 of PAHC
and one of its subsidiaries, all of the outstanding 9-7/8% Senior
Subordinated Notes due 2008 of PAHC and all of the outstanding
15% Senior Secured Notes due 2010 of Holdings, as described in
the Offer to Purchase and Consent Solicitation Statement, dated
June 30, 2006. PAHC and Holdings have been advised that, as of
11:59 p.m., New York City time on July 28, 2006, the expiration
date of such tender offers and consent solicitations, holders of
100% of the 15% Notes and over 98% of each of the 13% Notes and
9-7/8% Notes in aggregate principal amount had validly tendered
and not withdrawn their notes and had provided their consents to
effect proposed amendments to the indentures governing such
existing notes. PAHC also completed these tender offers and
accepted for payment all notes that had been validly tendered and
not withdrawn.
The 13% Senior Secured Notes not so tendered were defeased to Dec.
1, 2006, on which date such 13% Senior Secured Notes will be
redeemed, and the 9-7/8% Senior Subordinated Notes not so tendered
have been called for redemption on Sept. 1, 2006.
In connection with the foregoing transactions, PAHC has:
-- refinanced its long-term debt,
-- repaid debt outstanding under its existing domestic senior
credit facility,
-- amended the terms of its existing domestic senior credit
facility to provide for up to $65 million of revolving
credit, and
-- simplified its corporate structure by merging its parent
into PAHC with PAHC surviving the merger.
About Phibro Animal Health
Headquartered in Ridgefield Park, New Jersey, Phibro Animal Health
Corporation -- http://www.philipp-brothers.com/-- manufactures
and markets a broad range of animal health and nutrition products,
specifically medicated feed additives and nutritional feed
additives, which it sells throughout the world predominantly to
the poultry, swine and cattle markets. MFAs are used preventively
and therapeutically in animal feed to produce healthy animals.
PAHC is also a specialty chemicals manufacturer and marketer.
At March 31, 2006, Phibro Animal Health Corporation's balance
sheet showed a $48,865,000 stockholders' deficit compared to a
$44,924,000 deficit at June 30, 2005.
* * *
As reported in the Troubled Company Reporter on Aug. 2, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Phibro Animal Health Corp. to 'B' from 'B-'. The rating
was removed from CreditWatch, where it was placed with positive
implications July 13, 2006.
At the same time, Standard & Poor's affirmed its 'B-' senior
unsecured debt rating on the company's $160 million 10% senior
unsecured notes due 2013 and assigned a 'CCC+' subordinated debt
rating to its $80 million 13% senior subordinated notes due 2014.
As reported in the Troubled Company Reporter on Aug. 1, 2006,
Moody's Investors Service assigned a Caa1 rating to the proposed
senior subordinated note offering of Phibro Animal Health
Corporation. At the same time, Moody's affirmed the existing
ratings of Phibro, including the B2 corporate family rating. The
outlook for all ratings is stable.
PHOTOWORKS INC: CEO P. Sanchez Resigns After Company Turnaround
---------------------------------------------------------------
Philippe Sanchez tendered, on July 28, 2006, his resignation from
day to day operations as President and CEO of PhotoWorks(R), Inc.,
having completed the turnaround of the Company. Mr. Sanchez will
remain in an advisory capacity with PhotoWorks as a director on
the Company's Board.
"I was brought on board in late 2003 to drive the turnaround of
PhotoWorks; a task which has now been successfully completed,"
said Mr. Sanchez. "PhotoWorks has emerged from this
transformation as a creative and innovative force, and is well
positioned to capitalize on the continuing explosion of digital
photography."
Under Mr. Sanchez's leadership, PhotoWorks embarked on a
comprehensive restructuring plan. This included the
transformation of the Seattle based mail-order film processing
business into a leading digital photography service focused on the
creation of hard bound custom photo books. In the past year,
PhotoWorks' photo books have been acclaimed by national press and
considered among the elite in the category. For the first 6
months of fiscal year 2006, the company reported that digital
sales grew to $3.6M, an 86% increase over the same period last
year that largely outpaced the rest of the competition.
"We thank Philippe for his great job of turning PhotoWorks into a
fast growing company again, and we look forward to his continued
contribution as a member of the Board," said Joseph W. Waechter,
PhotoWorks' Chairman, who will act as interim CEO until a
successor for Mr. Sanchez is appointed.
Headquartered in Seattle, Washington, PhotoWorks(R), Inc.
(OTCBB:FOTO) -- http://www.photoworks.com/-- is an online
photography services company. Every day, photographers send film,
memory cards and CDs, or go to the Company's website to upload,
organize and email their pictures, order prints, and create
Signature Photo Cards and Custom Photo.
Going Concern Doubt
Williams & Webster, PS, expressed substantial doubt about the
Company's ability to continue as a going concern after it audited
the financial statements for the year ending Sept. 30, 2005. The
auditing firm pointed to the Company's net losses and cash flow
shortages.
PLASTICON INTERNATIONAL: Files Three Quarterly Reports for 2005
---------------------------------------------------------------
Plasticon International, Inc., filed with the Securities and
Exchange Commission its financial statements for:
-- the first quarter ended March 31, 2005, on July 27, 2006;
-- the second quarter ended June 30, 2005, on July 27, 2006;
-- the third quarter ended Sept. 30, 2005, on July 31, 2006.
The Company's Statement of Operations showed:
For the quarter ended
-------------------------------------
03/31/05 06/30/05 09/30/05
---------- ---------- -----------
Revenue $82,370 $135,244 $136,965
Net (Loss) ($2,507,552) ($3,018,067) ($10,992,963)
The Company's Balance Sheet showed:
For the quarter ended
------------------------------------
03/31/05 06/30/05 09/30/05
---------- ---------- ----------
Current Assets $2,153,304 $1,562,497 $752,946
Total Assets $2,701,773 $2,148,122 $1,352,848
Current
Liabilities $8,409,810 $8,146,316 $8,475,676
Total
Liabilities $8,409,810 $8,146,316 $8,475,676
Total Stockholders'
Equity (Deficit) ($5,708,037) ($5,998,194) ($7,122,828)
Full-text copies of the company's financial statements are
available for free at:
First quarter ended
March 31, 2005 http://ResearchArchives.com/t/s?ebb
Second quarter ended
June 30, 2005 http://ResearchArchives.com/t/s?ebc
Third quarter ended
Sept. 30, 2005 http://ResearchArchives.com/t/s?ebd
Plasticon International, Inc., designs, produces, and distributes
high-quality concrete accessories (rebar supports), informational
and directional signage, and plastic lumber, which are all
produced from recycled and recyclable plastics. The Company's
line of plastic concrete accessories has been approved or accepted
in all 50 states and several foreign countries including Poland,
Israel, Canada, Mexico, and Egypt.
PRESCIENT APPLIED: Inks Settlement Deal With Tak Investment
-----------------------------------------------------------
Prescient Applied Intelligence, Inc. (OTCBB:PPID) entered into a
settlement agreement with Tak Investments, LLC and an affiliate
concerning an ongoing dispute with respect to Prescient's
outsourcing agreement with TAK, among other issues.
The settlement provides:
-- Termination of the outsourcing agreement;
-- Cancellation of TAK's equity securities in Prescient
-- A mutual general release by TAK and Prescient of all claims
against each other;
-- A three year secured approximately $2.6 million promissory
note issued by Prescient to TAK that bears interest at the
prime rate plus 2%, which is payable at a rate of $30,000
per month with the remaining amount due at the end of the
three year period;
-- A warrant issued to TAK to purchase 1,000,000 shares of
Common Stock in Prescient at an exercise price equal to the
closing share price of Prescient's common stock on the day
immediately preceding the date of the grant plus 10%. The
warrant expires on December 31, 2006.
The settlement is conditioned upon approval of the terms thereof
by holders of Prescient's Series E Preferred Stock. Prescient is
seeking such approval at a meeting of the holders of the Series E
Preferred Stock on August 10, 2006.
Going Concern Doubt
KPMG LLP expressed substantial doubt Prescient'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 recurring losses from
operations and resulting dependence upon access to additional
external financing.
About Prescient
Prescient Applied Intelligence, Inc. -- http://www.prescient.com/
-- enables retail-trading partners to align planning and execution
with changing market needs to maximize relationships and deliver
on the promise of collaborative commerce. The Company's retailer-
centric and collaborative commerce solutions are designed with the
understanding that product demand and business processes are
fluid. Prescient's solutions capture information at the point of
sale, provide greater visibility into real-time demand, and turn
data into actionable information across the entire supply chain.
As a result, the company's products and services enable trading
partners to compete effectively, increase profitability, and excel
in today's retail business climate.
PROPERTY DEVELOPMENT: Wants to Borrow $700,000 from Great Valley
----------------------------------------------------------------
Property Development Group, LLC, asks the Honorable Whitney Rimel
of the U.S. Bankruptcy Court for the Eastern District of
California in Fresno for authority to obtain postpetition
financing from Great Valley Funding for $700,000, plus fees and
interest for a total of $785,000.
The Bankruptcy Court approved on April 25, 2006, a stipulation
that the Debtor will remain as debtor-in-possession if it will
satisfy certain conditions. If the Debtor fails to market and
sell its 882 acres of real property in Madera County, the Debtor's
property will be revested to the State Court Receiver, Terence J.
Long.
The Debtor says it has no ongoing sources of revenue and virtually
no cash on hand. The Debtor currently needs cash to fund its
postpetition operations, pay professionals, and to comply with the
requirements of the receiver stipulation.
The Debtor will use the loan proceeds:
(a) to pay the Madera County real property taxes of
$244,740.33. The tax claims are delinquent for five years
and accrue interest at 1.5% per month. The Debtor says
payment of the taxes will make the sale of the Madera
property easier and reassure the prospective bidders;
(b) to provide a $275,000 carve out for professional fees of
the Debtor's counsel and accountant, and Committee's
counsel;
(c) to pay $20,000 for the creation, scanning and maintenance
of a Web page on which the Debtor has posted 30,000 pages
of documents needed by prospective bidders;
(d) to pay $15,000 of the U.S. Trustee's fees;
(e) to fund the Debtor's monthly operational expenses including
payroll;
(f) to set up a reserve fund in a blocked account for the
excess loan amount at California Bank & Trust.
All borrowed funds may be used only by Court order.
The loan will have an interest rate of 13.75% and will become due
on Jan. 1, 2007. The loan will be secured by a first priority
deed of trust on the Debtor's Madera property.
Judge Rimel will continue to hear the Debtor's request on Aug. 9,
2006, at 1:30 p.m.
Property Development Group, LLC, is a real estate developer. The
Debtor filed for chapter 11 protection on March 23, 2006 (Bankr.
E.D. Calif. Case No. 06-10324). Riley C. Walter, Esq., at Walter
Law Group, P.C., represents the Debtor in its restructuring
efforts. Rene Lastreto, II, Esq., at Lang, Richert & Patch, P.C.,
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, its listed
$312,512 in total assets and $74,517,980 in total debts.
QWEST COMMUNICATIONS: Moody's Reviews Low-B Ratings & May Upgrade
-----------------------------------------------------------------
Moody's Investors Service placed the B1 corporate family rating of
Qwest Communications International Inc. and related entities on
review for possible upgrade based on better than expected free
cash flow in 2006 and through the first half of 2007 coupled with
unexpected revenue strength. In particular, Qwest's ability to
grow revenues and slow the cash burn at Qwest Communications Corp.
has exceeded Moody's expectations and offset softness in Qwest's
incumbent wireline revenue due to access line erosion.
The review will focus on:
1) the company's plans for further debt reduction and capital
structure simplification;
2) Qwest's revenue prospects and,
3) the profitability and cash flow generating capacity of
Qwest's individual operating segments over the next few
years.
The implementation of a material common stock dividend or share
repurchase plan within the next 12 to 18 months would likely
forestall any improvement in the current ratings.
Moody's will also consider Qwest's long-term operating strategy,
especially as it relates to network investment. Finally, Moody's
will consider the on-going Department of Justice investigation and
pending shareholder lawsuits. Even though these issues
pose a credit risk, the magnitude and timing of cash payments
associated with this litigation may be manageable should recent
operating trends and balance sheet strengthening continue.
In addition, Moody's assigns a B1 rating which is also placed on
review for possible upgrade to the senior secured bank facility of
Qwest Communications International Inc. Qwest Services
Corporation was the previous borrower under the facility which
provided for QCII to become the borrower under certain
circumstances, including substantially all existing QSC debt being
repaid and QSC no longer being permitted to incur indebtedness.
The new credit facility benefits from the same security package
and a guarantee from QSC. This transaction is the latest in a
series of steps undertaken by the company to simplify its capital
structure.
These ratings are placed under review for possible upgrade as part
of the rating action.
At QCII:
* Corporate Family Rating -- B1
* Senior Secured Bank facility -- B1
* $1,265 million 3.5% Convertible Senior Notes due
in 2025 -- B3
* $1,235 million universal shelf registration -- (P)B2 / (P)B3
* $800 million 7.5% senior notes due in 2014 - B2
* $525 million 7.25% senior notes due in 2011- B2
* $500 million 7.5% senior notes due in 2014 -- B2
* $750 million floating rate notes due in 2009 -- B2
* $62 million 7.5% senior unsecured notes due in 2008 -- B3
* $8 million 7.25% senior unsecured notes due in 2008 - B3
At QCF:
* Senior unsecured long-term ratings -- B3
At QSC:
* $21 million senior subordinated notes -- B3
At QC:
* Senior unsecured long-term ratings -- Ba3
* Senior unsecured long-term ratings -- Ba3
* Senior unsecured long-term ratings -- Ba3
Qwest is a RBOC and nationwide inter-exchange carrier
headquartered in Denver, Colorado.
RECYCLED PAPERBOARD: Asks for Final Decree Closing Chapter 11 Case
------------------------------------------------------------------
Recycled Paperboard, Inc., asks the U.S. Bankruptcy Court for the
District of New Jersey for entry of a final decree closing its
chapter 11 case.
Charles Jacobson, the Debtor's former CFO, relates to the Court
that the Plan has been substantially consummated and fully
administered, and is ready for closing.
All payments as required in the Plan have been made, and the
Debtor's counsel is holding $189,230 pending Court allowances of
final professional fees and payment of Trustee's commissions, Mr.
Jacobson adds.
As reported in the Troubled Company Reporter on July 5, 2006, the
Court confirmed the Debtor's First Modified Chapter 11 Plan of
Reorganization.
Judge Walrath will convene a hearing at 12:00 p.m., on Aug. 14,
2006, to consider the Debtor's request.
Headquartered in Clifton, New Jersey, Recycled Paperboard Inc.,
manufactures recycled mixed paper and newspaper to make index, tag
and bristol, and blanks. The Company filed for chapter 11
protection on November 29, 2004 (Bankr. D.N.J. Case No. 04-47475).
David L. Bruck, Esq., at Greenbaum, Rowe, Smith & Davis LLP,
represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it listed total
assets of $17,800,000 and total debts of $41,316,455.
REFCO INC: Court to Consider Exclusive Period Requests on Sept. 12
------------------------------------------------------------------
The Hon. Robert D. Drain of the United States Bankruptcy Court for
the Southern District of New York adjourned, to 10 a.m. on Sept.
12, the hearing to consider Refco Inc., and its debtor-affiliates'
request to extend their:
* Exclusive Plan Filing Period to Sept 1, 2006; and
* Exclusive Solicitation Period to Oct. 31, 2006.
As reported in the Troubled Company Reporter on July 10 the Court
had previously adjourned the hearing from June 27 to July 20.
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. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000).
REFCO INC: Chapter 11 Trustee Hires Goldin & AP as Crisis Managers
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorizes Marc Kirschner, as Chapter 11 trustee of Refco Capital
Markets, Ltd.'s estate, to employ Goldin Associates, LLC, and AP
Services, LLC, as crisis managers for RCM, under the terms of the
Trustee's engagement letters with the two firms, dated May 19 and
May 22, 2006.
For the avoidance of doubt, Judge Robert Drain permits Goldin and
APS to serve the Debtors' interests, and against the RCM's
interests, without restraint, notwithstanding their engagement by
the U.S. Trustee
RCM will compensate Goldin and APS under the Engagement Letters.
Helder P. Pereira, Esq., at Bingham McCutchen LLP, in New York,
recounts that, on December 12, 2005, and on March 17, 2006, the
Bankruptcy Court entered orders authorizing the Debtors to employ
AP Services and Goldin as their crisis managers.
Pursuant to their existing employment arrangements with the
Debtors, neither Goldin nor APS provides employees directly to
RCM. RCM has no employees of its own but instead draws on the
services of executives and employees of other Debtor entities,
including those provided by Goldin and APS.
The Debtors have previously employed the Goldin & APS Employees
on the basis that those employees are critical to the Debtors'
chances of reaching a successful resolution of the chapter 11
cases. The issues pertaining to RCM are no less complex than
those applicable to the cases as a whole, Mr. Pereira asserts.
Prior to the RCM Trustee's appointment, the Goldin & APS
Employees provided these services to RCM, including:
(a) assisting with the management of the bankruptcy process,
including evaluating and implementing strategic and
tactical options through the proceedings;
(b) developing and implementing cash management strategies,
tactics and processes;
(c) coordinating information requests and responses to lender
groups and other parties-in-interest in the bankruptcy
process;
(d) assisting with the preparation of the statement of
affairs, schedules, monthly operating reports and other
regular reports required by the Bankruptcy Court as well
as claims processes; and
(e) assisting with other matters as may be requested that
fall within the expertise of Goldin and APS.
Mr. Pereira says that the appointment of a Chapter 11 Trustee has
not changed RCM's need for APS' and Goldin's services. Moreover,
the Bankruptcy Court has indicated that the RCM Trustee should
"focus on the key issues pertaining to a plan."
To maintain that focus, the RCM Trustee will require the
assistance of professionals with respect to various aspects of
administering or winding down the RCM estate. Thus, the RCM
Trustee seeks to continue the use of the Goldin & APS Employees
in a manner largely consistent with the past practices of the
Debtors' cases.
The Engagement Letters alter slightly the terms of the existing
engagements of Goldin and APS by the Debtors. The alterations
clarify:
(i) the degree to which Goldin & APS Employees will report to
the RCM Trustee in respect of RCM-specific matters; and
(ii) the rights of the RCM Trustee in respect of allocations of
the fees and expenses of the Goldin & APS Employees.
The RCM Trustee clarifies that the Goldin & APS Employees will
not be employed as RCM-specific employees. The RCM Trustee
merely wants to continue existing relationships through which the
Goldin & APS Employees provide services for and on behalf of RCM.
The RCM Trustee does not seek to employ any new or different
members or associates of Goldin and APS as RCM-specific
employees.
Given that the Goldin & APS Employees will continue to provide
similar services to the non-RCM Debtors, it is possible that the
Goldin & APS Employees may take actions or positions that are
adverse to RCM, Mr. Pereira relates.
The Engagement Letters expressly contemplate that possible
conflict, and they contain a related waiver from the RCM Trustee
-- the services to the non-RCM Debtors will not be a breach of
the Engagement Letters nor may the RCM Trustee seek to disqualify
the Goldin & APS Employees from providing the services or being
compensated for them.
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. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000).
REVLON INC: Completes $100 Million Term Loan Add-On
---------------------------------------------------
Revlon, Inc.'s wholly owned operating subsidiary, Revlon Consumer
Products Corporation, consummated the amendment to its bank credit
agreement, dated July 9, 2004. In securing the Amendment,
$100 million was added on to the Credit Agreement's existing
$700 million term loan facility. The Company intends to use the
net proceeds from the term loan add-on for general corporate
purposes.
While not required, the amendment also reset the existing senior
secured leverage ratio covenant (the ratio of RCPC's Senior
Secured Debt to EBITDA, as each such term is defined in the Credit
Agreement) at 5.5 to 1 through June 30, 2007, stepping down to 5.0
to 1 for the remaining term of the Credit Agreement. The
amendment also enables RCPC to exclude from the definition of
EBITDA under the Credit Agreement up to $25 million of
restructuring charges and charges for certain product returns
and/or product discontinuances. The Credit Agreement's existing
asset-based, multi-currency revolving credit facility remains
unchanged.
"We are pleased with this demonstration of support from our
lenders," Revlon President and CEO Jack Stahl stated. "This
amendment and funding provides us with additional financial
resources and flexibility to continue to execute against our
business plan as we continue to take actions to build our great
brands, reduce costs and create sustainable value."
About Revlon
Revlon, Inc. (NYSE:REV) -- http://www.revloninc.com/-- is a
worldwide cosmetics, skin care, fragrance, and personal care
products company. The Company's vision is to deliver the promise
of beauty through creating and developing the most consumer
preferred brands. The Company's brands include Revlon(R),
Almay(R), Vital Radiance(R), Ultima(R), Charlie(R), Flex(R), and
Mitchum(R).
At March 31, 2006, the Company's balance sheet showed
$1,085,400,000 in total assets and $2,127,500,000 in total
liabilities, resulting in a stockholders' deficiency of
$1,042,100,000.
SAINT VINCENTS: Can Proceed with Sale of Two Lots
-------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Saint Vincents Catholic Medical Centers of New York and
its debtor-affiliates to sell two nonresidential real properties,
free and clear of any liens, claims and encumbrances:
-- a vacant lot located at 177 Buffalo Avenue, Brooklyn, New
York 11213, designated as Block 1363, Lot 6 on Kings County
tax maps, to Farmer Property Corp.; and
-- a parcel of nonresidential real property located at 160-24
79th Avenue, Flushing, New York 11366, and designated as
Block 6831, Lot 112 on Queens County tax maps, to World
Homes Group Inc.
Pursuant to the Contract of Sale, Farmer Property will buy and
the Debtors will sell Lot 6 for $190,000, free and clear of all
liens, claims and encumbrances. The purchase price will be paid
by bank or certified check, or by wire transfer. Farmer Property
paid $19,000 upon signing of the Contract of Sale. The purchaser
will pay the remaining $171,000 at the closing of the sale.
The Debtors have agreed to sell, and World Homes has agreed to
purchase, the Property for $407,000 -- nearly $100,000 more than
the amount Massey Knakal specified in its promotional material as
the initial asking price.
The parties entered into a Contract of Sale, pursuant to which
they agreed that the purchase price will be paid by World Homes
in this manner:
(i) $20,350, upon signing of the Contract of Sale;
(ii) $20,350, within five days after World Homes' receipt of
written notice that the Debtors have obtained all of the
Required Approvals; and
(iii) $366,300, at Closing.
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. 30
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SAINT VINCENTS: Court Approves Amended Staten Assumption Schedule
-----------------------------------------------------------------
The Honorable Adlai S. Hardin of the U.S. Bankruptcy Court for the
Southern District of New York permits Saint Vincents Catholic
Medical Centers of New York and its debtor-affiliates to:
a) assume and assign to the Purchaser, and have the
Purchaser accept assignment of the Assumed Contracts and
Leases; and
b) execute and deliver to the Purchaser those documents or
other instruments as may be necessary to assign and
transfer to the Purchaser the Assumed Contracts and
Leases.
As reported in the Troubled Company Reporter on June 15, 2006, the
Court authorized the Debtors to assume and assign executory
contracts and unexpired leases related to St. Vincent's Hospital,
Staten Island to Castleton Acquisition Corporation, an affiliate
of Bayonne Medical Center Bayonne, or to any successful bidder
for the Staten Island assets.
A copy of the Second Amended Assumption Schedule is available for
free at http://researcharchives.com/t/s?ec6
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. 30
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SAKS INC: Sells Parisian Dept. Stores to Belk Inc. for $285 Mil.
----------------------------------------------------------------
Belk, Inc. entered into a stock purchase agreement with Saks
Incorporated to acquire 38 Parisian department stores with
locations in nine states in the Southeast and Midwest. Two new
Parisian stores are scheduled to open in fall 2006. Upon
completion of the transaction, which has been approved by the
boards of directors of both companies, Belk, Inc. will operate a
total of 315 stores in 19 states.
"This is another excellent opportunity for Belk to expand its
store base and further strengthen our market leadership in Alabama
and other key markets within our existing footprint," said Tim
Belk, chairman and CEO of Belk, Inc. "Just as with the earlier
purchase of the Proffitt's and McRae's stores from Saks, the
Parisian stores are located in great markets and are similar to
Belk in many ways. Parisian is known and respected for offerings
of top fashion brands and excellent customer and community
service."
Belk will pay $285 million for the ownership of the Parisian
stores and will assume operating leases of leased store locations.
The stores generated a combined total sales volume last year of
$723 million. The transaction is scheduled to close on Oct. 2,
2006, and is subject to regulatory review and other closing
conditions.
The integration of the stores is expected to take 18 months, and
the company plans to re-brand the acquired stores as Belk in the
third quarter of 2007.
Belk will enter into a transition services agreement with Saks
Incorporated to provide certain support services for the acquired
Parisian stores, including information technology, credit services
and other back- office functions for a limited period of time.
The company will continue to operate the Parisian corporate
offices and distribution center for a transition period
anticipated through March 2007. During that time, associates in
these locations will either be offered positions with Belk or will
be given appropriate severance packages.
Belk was advised in the transaction by Wachovia Securities.
The Parisian stores to be acquired by Belk are located in: Alabama
- Birmingham (2 stores), Decatur, Dothan, Florence, Gadsden,
Homewood, Hoover, Huntsville (2 stores), Mobile, Montgomery,
Trussville (opening fall 2006), Tuscaloosa; Arkansas - Little Rock
(opening fall 2006); Florida - Jacksonville, Pensacola,
Tallahassee; Georgia - Alpharetta, Atlanta (2 stores), Columbus,
Douglasville, Duluth, Kennesaw, Lithonia, Macon; Indiana -
Indianapolis (2 stores); Michigan - Livonia, Rochester Hills;
Mississippi - Tupelo; Ohio - Beavercreek, Cincinnati; South
Carolina - Charleston, Columbia; Tennessee - Chattanooga,
Collierville, Franklin, Knoxville.
Belk purchased 47 Proffitt's and McRae's department stores from
Saks Incorporated in July 2005, and subsequently converted and
re-branded 38 of these stores to Belk in March 2006.
About Belk, Inc.
Headquartered in Charlotte, North Carolina, Belk, Inc. is a
privately-owned department store company with 277 stores located
in 16 states in the Southeast and Mid-Atlantic regions and fiscal
2006 sales of $2.97 billion. Founded by William Henry Belk in
1888 in Monroe, North Carolina, the company is now in its third
generation of Belk family leadership.
About Saks Inc.
Based in Birmingham, Alabama, Saks Incorporated (NYSE: SKS) --
http://www.saksincorporated.com/-- operates Saks Fifth Avenue
Enterprises, which consists of 55 Saks Fifth Avenue stores, 50
Saks Off 5th stores, and Saks.com. The Company also operates 39
Parisian stores and 57 Club Libby Lu specialty stores.
* * *
As reported in the Troubled Company Reporter on July 31, 2006,
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit and senior unsecured ratings on Birmingham, Alabama-based
department store company Saks Inc. The ratings were removed from
CreditWatch, where they had been placed with developing
implications in April 2005. The outlook is positive.
SBA COMMS: Debt Repayment Prompts Moody's to Withdraw Ratings
-------------------------------------------------------------
Moody's withdrew all ratings of SBA Communications Corporation and
its subsidiaries, AAT Communications Corp., SBA Senior Finance,
Inc. and SBA Telecommunications, Inc. as all rated debt at these
entities have been repaid.
Outlook Actions:
Issuer: AAT Communications Corp.
* Outlook, Changed To Rating Withdrawn From Stable
Issuer: SBA Communications Corporation
* Outlook, Changed To Rating Withdrawn From Rating Under
Review
Issuer: SBA Senior Finance, Inc
* Outlook, Changed To Rating Withdrawn From Rating Under
Review
Issuer: SBA Telecommunications, Inc.
* Outlook, Changed To Rating Withdrawn From Rating Under
Review
Withdrawals:
Issuer: AAT Communications Corp.
* Corporate Family Rating, Withdrawn, previously rated B1
* Speculative Grade Liquidity Rating, Withdrawn, previously
rated SGL-2
* Senior Secured Bank Credit Facility, Withdrawn, previously
rated B2
Issuer: SBA Communications Corporation
* Corporate Family Rating, Withdrawn, previously rated B2
Issuer: SBA Senior Finance, Inc
* Senior Secured Bank Credit Facility, Withdrawn, previously
rated B1
Issuer: SBA Telecommunications, Inc.
* Senior Unsecured Regular Bond/Debenture, Withdrawn,
previously rated B3
Based in Boca Raton, Florida, SBA Communications Corporation owns
and operates wireless communication towers in the US.
SILICON GRAPHICS: Hires Bear Stearns as Financial Advisor
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Silicon Graphics, Inc., and its debtor-affiliates to
employ Bear Stearns as their financial advisor, on a final basis.
Bear Stearns will receive a cash fee equal to 1.00% of the
aggregate consideration involved in a sale, only to the extent
that aggregate Sale Fees exceed $1,000,000.
As reported in the Troubled Company Reporter on May 19, 2006, Bear
Stearns will:
(a) review and analyze the business, financial condition and
prospects of the Debtors;
(b) review and consider the potential combination benefits and
other implications of effecting a sale with any acquiror;
(c) review and consider the Debtors' available sale,
restructuring and financing alternatives;
(d) develop a valuation of the Debtors and any securities that
the Debtors offer or propose to offer in connection with a
transaction;
(e) review and consider from a financial point of view
proposed Transaction structures and terms;
(f) develop and implement a strategy to effectuate a
Transaction or a Financing, including in the case of a
Sale:
-- preparation and distribution of marketing materials;
-- screening of prospective Acquirors;
-- coordination of data room and Acquiror due
diligence; and
-- solicitation and review of proposals from
prospective Acquirors;
(g) develop presentations made to any official committee
appointed in the bankruptcy cases, and other interested
parties regarding the Transaction;
(h) negotiate the Transaction with the Debtors' creditors, any
Acquiror or any other interested parties; and
(i) meet with the Debtors' Board of Directors to discuss any
Transaction and Financing alternatives and their financial
implications.
The Debtors agreed to pay Bear Stearns:
(1) A $100,000 monthly cash fee, payable on June 1, 2006, and
on the first business day of each calendar month during
the period of Bear Stearns's engagement;
(2) If the Debtors consummate a Restructuring, a cash fee
equal to $1,500,000, which Restructuring Fee will be
reduced by 50% of any Sale Fee, or by 100% of any Sale Fee
associated with a Sale of substantially all of the assets
or equity securities of the Debtors;
(3) If the Company consummates a Sale or enters into an
agreement pursuant to which a Sale is subsequently
consummated, a cash fee equal to 1% of the aggregate
consideration involved in the Sale;
(4) Upon mutual consent and under terms to be mutually agreed
upon, Bear Stearns will assist the Debtors in consummating
a Financing.
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. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SILICON GRAPHICS: Gets Final Nod to Use Existing Business Forms
---------------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York allowed Silicon Graphics, Inc., and
its debtor-affiliates to continue using existing checks and
business forms, including purchase orders, multi-copy checks,
letterheads, and promotional materials, without reference to the
Debtors' status as debtors-in-possession, on a final basis.
Pursuant to the operating guidelines established by the Office of
the United States Trustee for debtors-in-possession, the Debtors
are required to obtain checks that bear the designation "debtor in
possession" and reference the bankruptcy case number and the type
of account on those checks.
As reported in the Troubled Company Reporter on May 22, 2006, the
Debtors also obtained the Court's permission to use their existing
check stock. As soon as practicable, the Debtors will imprint the
legend "Debtor-In-Possession" and the Debtors' chapter 11 case
number on those checks.
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. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SOLUTIA INC: Unit Completes Refinancing of EUR200 Million Notes
---------------------------------------------------------------
Solutia Inc.'s subsidiary, Solutia Europe SA/NV, through its
subsidiary Solutia Services International S.C.A./Comm. V.A.,
closed on a new EUR200 million loan due in 2011. The new loan is
priced at an adjustable rate of EURIBOR plus a margin, which
currently yields a rate of approximately 5.75% to 6.50%. It
replaces SESA's EUR200 million of 10% Senior Secured Notes that
were due in 2008, which were redeemed today at a 3% redemption
premium. Citigroup Global Markets Limited has fully underwritten
the new loan.
"This new loan will result in significant interest savings for
Solutia," said Jim Sullivan, senior vice president and chief
financial officer, Solutia Inc. "In addition, it provides us with
greater flexibility to divest non-core assets. For example, we
are now able to complete the previously announced sale of our
Pharmaceutical Services business, which we expect to occur later
this month."
Headquartered in St. Louis, Mo., Solutia, Inc. (OTCBB:SOLUQ) --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y.
Case No. 03-17949). When the Debtors filed for protection from
their creditors, they listed $2,854,000,000 in assets and
$3,223,000,000 in debts. Solutia is represented by Richard M.
Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S.
Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represent the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provides the Creditors' Committee with financial
advice.
STATION CASINOS: Moody's Rates $300 Million Senior Notes at Ba3
---------------------------------------------------------------
Moody's Investors Service assigned a Ba3 to Station Casinos,
Inc.'s new $300 million senior notes due 2016. Net proceeds from
the offering will be used to repay a portion of the $1.2 billion
of outstanding borrowings under the company's $2 billion revolving
credit facility. Station has a Ba2 corporate family rating, SGL-2
speculative grade liquidity rating, and stable ratings outlook.
The company has a 'Ba' weighted average indicated rating category
according to Moody's Global Gaming rating methodology.
Station's Ba2 corporate family rating and stable outlook considers
that the company continues to benefit from the rapidly growing Las
Vegas area, and that it has been highly effective
at using debt to further develop its asset profile, market
leadership position, and competitive advantage in the Las Vegas
locals market. A key credit concern is the company's aggressive
common stock repurchase activity. The Ba3 rating on the senior
notes considers that they will be general unsecured obligations
and rank equal in right of payment to all of Station's existing
and futures unsecured debt, and will effectively rank junior to
all secured debt and subsidiary liabilities including trade
payables. Like Station's existing senior unsecured notes, the
new notes will not be guaranteed.
Station's SGL-2 speculative grade liquidity rating indicates
good liquidity and is based on the expectation that internally
generated cash flow combined with existing cash balances and
availability under the company's bank credit facility will be
sufficient to meet capital spending and debt service requirements
over the next twelve months. The SGL-2 also acknowledges that
Station has a considerable amount of land held for development
that could be sold in the event the company wants or needs to
raise cash.
Moodys' previous rating action on Station occurred on June 30,
2006 when the company's ratings were lowered in response to its
announcement that it entered into a bank loan amendment that
allows for the repurchase of up to an additional $600 million of
common stock and increases the maximum debt ratio to 6.5X from
5.5x. These amendments indicated that Station, despite its strong
asset profile and operating results, would not likely not maintain
debt at or below 4.5x. For the 12-month period ended June 30,
2006, debt was about 6x, although pro forma for a full year
earnings contribution from Red Rock Station, debt is about 5.2x.
Station Casinos, Inc. owns and operates hotel in the Las Vegas
locals market including a 50% interest in both Barley's Casino &
Brewing Company and Green Valley Ranch Station Casino, and a
6.7% interest in the Palms Casino Resort. In addition, Station
Casinos manages the Thunder Valley Casino for the United Auburn
Indian Community in California.
STATION CASINOS: S&P Rates Proposed $300 Mil. Senior Notes at BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating to
Station Casinos, Inc.'s proposed $300 million senior notes due
2016. Proceeds will be used to reduce amounts outstanding under
the company's revolving credit facility, a large majority of which
has been the result of aggressive share repurchase activity during
the past few quarters.
At the same, Standard & Poor's affirmed Station's existing
ratings, including its 'BB' issuer credit rating. The outlook is
stable. Pro forma consolidated debt outstanding at June 30, 2006,
was approximately $3 billion.
The ratings on Las Vegas, Nevada-based Station Casinos reflect its
aggressive financial policy and high debt leverage for the
ratings. These factors are tempered by company's leadership
position in the favorable Las Vegas 'locals' market and continued
steady operating results, which are expected to continue over the
intermediate term.
STORY COMM: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Story Communications, Inc.
116 North Camp Street
Seguin, TX 78155
Tel: (830) 303-3328
Bankruptcy Case No.: 06-51385
Type of Business: The Debtor publishes magazines and
sells advertising space.
Chapter 11 Petition Date: July 31, 2006
Court: Western District of Texas (San Antonio)
Judge: Leif M. Clark
Debtor's Counsel: William R. Davis, Jr., Esq.
Langley & Banack, Inc.
745 East Mulberry Avenue, Suite 900
San Antonio, TX 78212
Tel: (210) 736-6600
Fax: (210) 735-6889
Total Assets: $2,351,977
Total Debts: $4,333,851
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service 941 Taxes $544,915
P.O. box 21126
Philadelphia, PA 19114
Narrowgate, Inc. Lawsuit $543,310
101 Summit Avenue, Suite 400
Fort Worth, TX 76102
FH Partners, LP Debt Guarantor of $533,000
P.O. Box 30018 Sequin Media
Hartford, CT 06150-0018 Group, LLC
ECF Partners, LP Lawsuit $445,860
14860 Montfort Drive, Suite 104
Dallas, TX 78524
Diamond Lease Lawsuit $185,067
c/o Patton Boggs, LLP
2001 Ross Avenue, Suite 3000
Dallas, TX 75201
J.R. Rodriguez International Lawsuit $58,497
Humana Insurance Insurance $48,849
Kirkpatrick Mathis & Brown Accounting Services $30,865
Fleet Business Credit, LLC Lawsuit $15,457
Principal Financial Group Insurance $15,368
Pitney Bowes Credit Corp. Services $11,994
Buz Gillentine Services $9,964
Wallock/Herbold Lease Arrears $7,852
Thompson, Coe, Cousins & Irons Legal Services $7,780
Pitney Bowes Credit Corp. Services $7,017
DHL Services $6,409
Premium Recovery AG Lawsuit $4,558
G.E. Capital Lease Arrearage $4,496
Office Depot Credit Card Purchases $4,084
First Commercial Bank, N.A. Services $4,026
SYNAGRO TECHNOLOGIES: Launches $0.1 Cash Dividend on Common Stock
-----------------------------------------------------------------
The Board of Directors of Synagro Technologies declared a cash
dividend of $0.10 per common share to all of its shareholders of
record as of August 11, 2006. The dividend is payable on August
31, 2006.
As reported on the Troubled Company Reporter on May 18, 2006,
Synagro Technologies, Inc. closed its underwritten public offering
of common stock. The Company has issued and sold 2,000,000 shares
of its common stock at a public offering price of $4.15 per share.
The Company also issued and sold 2,000,000 additional shares to
the underwriter upon exercise of its option to purchase such
shares at the public offering price, less underwriting discounts
and commissions. The Company received total net proceeds from the
sale of such shares, after underwriting discounts and commissions
and offering expenses, of approximately $15,636,000. Total common
stock outstanding after this offering is approximately 77,338,568
shares. The Company plans to use the net proceeds from the
offering for working capital and general corporate purposes.
About Synagro Technologies
Headquartered in Houston, Texas, Synagro Technologies, Inc.
(Nasdaq:SYGR)(ArcaEx:SYGR) -- http://www.synagro.com/-- offers a
broad range of water and wastewater residuals management services
focusing on the beneficial reuse of organic, nonhazardous
residuals resulting from the wastewater treatment process,
including drying and pelletization, composting, product marketing,
incineration, alkaline stabilization, land application, collection
and transportation, regulatory compliance, dewatering, and
facility cleanout services.
* * *
The company's $180 million term loan due 2012, $30 million delayed
draw term loan due 2012, and $95 million revolving credit facility
due 2010, all carry Standard & Poor's BB- rating. Those ratings
were assigned on Jan. 31, 2005.
TELESOURCE INT'L: Losses & Deficit Prompt Going Concern Doubt
-------------------------------------------------------------
L J Soldinger Associates, LLC, in Deer Park, Illinois, raised
substantial doubt about Telesource International, Inc.'s ability
to continue as a going concern after auditing the Company's
consolidated financial statements for the year ended Dec. 31,
2005, and 2004. The auditor pointed to the Company's recurring
operating losses and capital deficiency.
The Company reported a net loss of $5,366,610 for the year ended
Dec. 31, 2005, compared with a net loss of $17,451,244 in 2004.
The Company also reported gross revenues of $5,933,887 in 2005
compared with $20,708,834 in 2004.
At Dec. 31, 2005, the Company's balance sheet showed $11,972,321
in total assets and $20,216,038 in total liabilities, resulting in
an $8,243,717 stockholders' deficit.
The Company's stockholders' deficit of $15,740,798 at Dec. 31,
2004, was higher than in 2005.
The Company's balance sheet at Dec. 31, 2005, also showed strained
liquidity with $5,972,540 in total current assets available to pay
$6,014,507 in total current liabilities coming due within the next
12 months.
Liquidity
The Company continues to rely on equity sales to Sayed Hamid
Behbehani & Sons Co. W.L.L. and bank financing to support its
operations. The Company's ability to refinance its existing bank
debt is critical to provide funding to satisfy the Company's
obligations as they mature. As of Dec. 31, 2005, the Company had
total outstanding debt of $17.3 million of which $2.8 million is
due in 2006.
During 2005 management worked to address operating and working
capital deficits by continuing its efforts to eliminate its most
unprofitable business segment, specifically construction.
Management has raised $9.0 million in 2005 through the issuance of
common stock. In addition, the Company was previously able to
raise $6.4 million through the sale of common stock during 2004.
Those sales were made in private, unregistered sales of the
Company's securities. The additional equity raised during 2005
was used to pay down debt and fund continuing operations.
Much of the debt obligations coming due during 2005 are project
financing based and the Company repaid a portion of these
obligations with cash generated through the collection of project
receivables and billings. These collections on the projects along
with the expected additional equity were sufficient to cover
Telesource's 2005 obligations.
The Company has and expects to continue to seek support from its
principal stockholder, SHBC, for its operations, for working
capital needs, debt repayment, and business expansion as may be
required. SHBC has continued its support of the Company. SHBC
has agreed to guarantee or provide letters of credit covering all
of the Company's debt of $17.3 million.
The Company plans to raise approximately $4.4 million of funding
from its principle shareholder, SHBC, in 2006. As of June 30,
2006, the Company received $2.7 million of these anticipated funds
through loans with SHBC related companies. In addition,
management expects to have shareholders increase the authorized
number of common stock shares at its 2006 annual general meeting.
Upon obtaining the increased share authorization, management
expects to convert the funds it received in 2006 from debt into
equity.
A full-text copy of the Company's 2005 annual report is available
for free at http://ResearchArchives.com/t/s?eb8
About Telesource International
Telesource International, Inc. (Pink Sheeet: TSCI) has three main
operating segments: i) power generation, ii) construction of
power plants and construction services, and iii) brokerage of
goods and services. Sayed Hamid Behbehani & Sons Co. W.L.L., a
Kuwait-based civil, electrical and mechanical construction
company, currently controls over 85% of the Company's shares.
Telesource International is located in Lombard, Illinois, U.S.A.,
the Company's headquarters, where it operates a small service for
the procurement, export and shipping of U.S. fabricated products
for use by the Company's subsidiaries or for resale to customers
outside of the mainland.
Telesource Fiji, Ltd., a subsidiary, is located on the island of
Fiji where it maintains and operates diesel fired electric power
generation plants for the sale of electricity in the country. The
Company also is attempting to develop future construction and
other energy related business activities in Fiji.
Telesource CNMI, Inc., is on the island of Tinian, an island in
the Commonwealth of Mariana Islands (U.S. Territory), where it
operates a diesel fired electric power generation plant for the
sale of electricity to the local power grid.
In Saipan, the Company maintains offices for coordinating
marketing and development activities in the region and is
responsible for all operations including the development of future
construction projects and energy conversion opportunities in the
region.
THERMA-WAVE INC: Extends $15 Million SVB Silicon Credit Facility
----------------------------------------------------------------
Therma-Wave, Inc. extended by one year its existing $15 million
line of credit from SVB Silicon Valley Bank, the primary
commercial banking subsidiary of SVB Financial Group. The line of
credit is available to finance working capital needs and has been
extended to run through June 2008.
"We are very pleased to extend our relationship with Silicon
Valley Bank," Joe Passarello, senior vice president and chief
financial officer for Therma-Wave, stated. "The ongoing
availability of this $15 million credit facility benefits Therma-
Wave in terms of increased access to working capital and
strengthens our financial flexibility. This agreement complements
and supports the broader progress we continue to make in terms of
increasing our financial efficiencies and reaffirms the strength
of our partnership with Silicon Valley Bank."
"We are proud to extend our long standing relationship with
Therma-Wave. As a leader in the field of precision metrology
solutions it represents the type of innovation that supports
Silicon Valley's next generation technologies. This ongoing
agreement is in line with our goal to help companies such as
Therma-Wave meet their diverse and growing financial needs," said
Quentin Falconer, senior relationship manager, SVB Silicon Valley
Bank.
About SVB Silicon Valley Bank
Headquartered in Santa Clara, California, SVB Silicon Valley Bank
-- http://www.svb.com/-- is a member of global financial services
firm SVB Financial Group, with SVB Alliant, SVB Capital and SVB
Global. SVB Silicon Valley Bank provides commercial banking
services to emerging growth and mature companies in the
technology, life science, private equity and premium wine
industries.
About Therma-Wave
Based in Fremont, California, Therma-Wave, Inc. (NASDAQ: TWAV) --
http://www.thermawave.com/-- develops, manufactures and markets
process control metrology systems used in the manufacture of
semiconductors. Therma-Wave offers products to the semiconductor
manufacturing industry for the measurement of transparent and
semi-transparent thin films; for the measurement of critical
dimensions and profile of IC features and for the monitoring of
ion implantation.
Going Concern Doubt
As reported in the Troubled Company Reporter on June 20, 2006,
PricewaterhouseCoopers, LLP, in San Jose, California, raised
substantial doubt about Therma-Wave, Inc.'s ability to continue
as a going concern after auditing the Company's consolidated
financial statements for the year ended April 2, 2006. The
auditor pointed to the Company's recurring net losses and
negative cash flows from operations.
The Company reported a $8,749,000 net loss on $66,286,000 of total
revenues for the year ended March 31, 2005.
TITAN INT'L: Acquires Continental Tire Facility for $53 Million
---------------------------------------------------------------
Titan International, Inc's subsidiary, Titan Tire Corporation
acquired the off-the-road tire facility of Continental Tire North
America, Inc. in Bryan, Ohio for approximately $53 million.
"CTNA is pleased to have reached this agreement with Titan, a
leader in the OTR tire business," chief executive officer of
Continental AG Manfred Wennemer said. "The sale of our Bryan
facility is part of our overall strategy to focus on passenger and
light truck and commercial vehicle tire manufacturing. Today's
announcement along with our other restructuring efforts will help
us to secure our continued presence in North America for years to
come."
The OTR facility in Bryan has a workforce of approximately 325
employees and posted sales of $125 million in 2005.
About Continental Tire North America, Inc.
Based in Charlotte, North Carolina, Continental Tire North
America, Inc. -- www.continentaltire.com -- is a group company of
Germany-based Continental Corporation, a supplier of brake
systems, chassis components, vehicle electronics, tires and
technical elastomers. In 2005 the corporation realized sales of
$17.2 billion. At present it has a worldwide workforce of about
80,000.
About Titan International, Inc.
Titan International, Inc. (NYSE:TWI) -- http://www.titan-intl.com
-- is a holding company that owns subsidiaries that supply wheels,
tires and assemblies for off-highway equipment used in
agricultural, earthmoving/ construction and consumer applications.
* * *
Moody's Investors Service placed a Caa3 Issuer rating, a Caa2 Long
Term Family rating, and a Ca Senior Subordinated Debt rating on
Titan International Inc. since Oct. 24, 2003. The outlook is
negative.
TOM'S FOODS: E-Mails Not Protected by Attorney-Client Privilege
---------------------------------------------------------------
Eugene I. Davis, the Responsible Officer for Tom's Foods Inc.,
asked the U.S. Bankruptcy Court for the Middle District of Georgia
for authority to conduct a Rule 2004 Examination and require
production of documents.
Mr. Davis wanted to examine a designated representative of Heico
Holding, Inc., and production of certain documents by Heico. Mr.
Davis contends that employees or agents of Heico removed certain
documents from the Debtor's corporate offices. Mr. Davis says the
documents were property of the Debtor's estate and wanted them
returned.
Heico returned most of the documents. Heico also moved for a
protective order to withhold production of certain e-mail
messages.
Ron Divin's E-Mail
Heico doesn't want to produce ten e-mail messages sent by Ron
Divin between February 22 and May 11, 2005. At that time, Mr.
Divin was president, CEO, and a director of the Debtor. The ten
e-mail messages were sent to Stanley Meadows, Esq., an attorney
serving on the Debtor's board of directors.
Mr. Davis says that five of the e-mail messages were sent by
"blind copy" to:
* three of the Debtor's directors,
* six officers of the Debtor,
* four person associated with Heico, and
* one person who owned 20% of Tom's Foods Holdings and had a
contractual right to appoint a member of the Debtor's board.
Four of the e-mail messages were marked "Attorney-Client
Privilege."
Tom's Foods was having severe financial problems when the e-mail
messages were sent, and some Noteholders were threatening Mr.
Divin and other officers and directors with legal action and
personal liability. Heico contends that Mr. Divin was seeking
legal advice on how to deal with the threats. The Responsible
Officer contends the e-mail messages are not privileged. The
Noteholders want access to those communications too.
Test if Attorney-Client Privilege Exists
The Tenth Circuit Court of Appeals, Chief Judge Robert F. Hershner
observes, teaches that "[a]ny privilege resulting from
communications between corporate officers and corporate attorneys
concerning matters within the scope of the corporation's affairs
and the officer's duties belongs to the corporation and not to the
officer. . . ." In re Grand Jury Subpoenas, 144 F.3d 653 (10th
Cir.), cert denied 525 U.S. 966, 119 S.Ct. 412, 142 L.Ed.2d 334
(1998).
Judge Hersher further observes that the Second and Third Circuits
have employed a five-prong test to determine whether an officer
may assert a personal privilege with respect to conversations with
corporate counsel despite the fact that the privilege generally
belongs to the corporation:
1. they must show they approached the counsel for the purpose
of seeking legal advice;
2. they must demonstrate that when they approached the
counsel, they made it clear that they were seeking legal
advice in their individual rather than representative
capacities;
3. they must demonstrate that the counsel saw fit to
communicate with them in their individual capacities,
knowing that a possible conflict could arise;
4. they must prove that their conversations with the counsel
were confidential; and,
5. they must show that the substance of their conversations
with the counsel did not concern matters within the company
or the general affairs of the company.
Judge Hersher states that a personal privilege does not exist
merely because the officer "reasonably believed" that he was being
represented by corporate counsel on an individual basis. In
certain circumstances, reasonable belief may be enough to create
an attorney-client relationship, but, Judge Hersher says, it is
not sufficient here to create a personal attorney-client
privilege.
In a decision published at 2006 WL 1975988, Judge Hersher rules
that the e-mail messages at issue are protected by the attorney-
client privilege or the joint-defense privilege. Judge Hersher
says that the e-mail messages were widely distributed by Mr. Divin
with several e-mail messages sent to persons who were not officers
or directors of the Debtor. Judge Hersher is not persuaded that
the e-mail messages were confidential communications between
Messrs. Divin and Meadows.
In the Court's view, the e-mail communications sought guidance
from Mr. Meadows on how the Debtor's Board of Directors and
management should respond to the Debtor's financial distress. The
substance of the e-mail correspondence concerned matters within
Debtor's business affairs.
Judge Hersher denies Heico's request for a protective order and
says that the ten e-mail messages must be turned over to the
Responsible Officer.
Mr. Davis is represented by John T. Sanders, IV, Esq., and J.
Robert Williamson, Esq., at Scroggins & Williamson.
Jason J. DeJonker, Esq., at McDermott Will Emery LLP, and
Barbara Ellis-Monro, Esq., and David M. Fass, Esq., at Smith,
Gambrell & Russell, LLP, represent Heico Holding.
Frank W. DeBorde, Esq., and Daniel P. Sinaiko, Esq., at Morris,
Manning & Martin, LLP, and Ira S. Dizengoff, Esq., David P.
Simonds, Esq., Patrick C. Schmitter, Esq., and Charles D. Riely,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Ad Hoc
Committee of Noteholders.
Joseph B.C. Kluttz, Esq., at Kennedy Covington Lobdell & Hickman,
L.L.P., represents Lance, Inc.
Headquartered in Columbus, Georgia, Tom's Foods Inc. manufactures
and distributes snack foods. Its product categories include
chips, sandwich crackers, baked goods, nuts, and candies. The
Company filed for chapter 11 protection on April 6, 2005 (Bankr.
M.D. Ga. Case No. 05-40683). When the Debtor filed for protection
from its creditors, it listed total assets of $93,100,000 and
total debts of $79,091,000.
TRAC INC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: TRAC, Inc.
1415 Indianhead Drive East
Menomonie, WI 54751
Bankruptcy Case No.: 06-11787
Type of Business: The Debtor is a transportation and
trucking company.
See http://www.truckflix.com/companies2/trac.php
Chapter 11 Petition Date: August 2, 2006
Court: Western District of Wisconsin
Judge: Thomas S. Utschig
Debtor's Counsel: Daniel R. Freund, Esq.
920 South Farwell Street, Suite 1800
P.O. Box 222
Eau Claire, WI 54702-0222
Tel: (715) 832-5151
Fax: (715) 832-5491
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
HNI Company, Inc. Trade Debt $515,143
P.O. Box 510187
New Berlin, WI 53151-0187
American Staffing Trade Debt $168,009
600 Westmoreland Office Park
Dunbar, WV 25064
American Interstate Lawsuit $63,102
Insurance Company
2301 Highway 190 West
Deridder, LA 70634
WIPFLI Trade Debt $41,956
P.O. Box 8010
Wausau, WI 54402-8010
Michelin North America, Inc. Complaint $37,006
1 Parkway South
Greenville, SC 29615
Sopus Products Trade Debt $30,731
Pomp's Tire Service, Inc. Trade Debt $21,212
Dell Financial Services Trade Debt $18,393
Snider Tire, Inc. Trade Debt $17,223
A.I. Credit Corporation Trade Debt $15,986
Comfort Inn- Menomonie Trade Debt $15,184
Qualcomm Inc. Trade Debt $13,792
All Season Tire Trade Debt $13,057
Midwest Trailer Sales Trade Debt $12,234
Bob Johnson's Body Shop Inc. Trade Debt $12,073
CDW Computer Trade Debt $11,697
City of Menomonie Trade Debt $9,343
Dell Commercial Credit Trade Debt $9,279
Bauer Built Tire Trade Debt $8,716
Newcourt Leasing Corp. Trade Debt $8,637
UNITED SURGICAL: Gets Requisite Consents for $148.8MM Senior Notes
------------------------------------------------------------------
United Surgical Partners International, Inc., reported that its
subsidiary, United Surgical Partners Holdings, Inc., received, as
of 5:00 p.m., New York City time, on July 27, 2006, tenders and
consents from holders of $148.8 million in aggregate principal
amount of its 10% Senior Subordinated Notes due 2011, representing
99.2% of the outstanding Notes, pursuant to its tender offer and
consent solicitation for the Notes. The Consent Expiration Date
was the deadline for holders to tender their Notes in order to
receive the consent payment in connection with the Offer.
In addition, Holdings has executed a supplemental indenture to the
indenture governing the Notes to, among other things, eliminate
substantially all of the restrictive covenants, eliminate certain
events of default, modify the covenant regarding mergers, shorten
the minimum redemption notice period from 30 to five days should
Holdings elect to redeem any remaining outstanding Notes in
accordance with the Indenture, modify provisions regarding
defeasance to eliminate certain conditions and modify or eliminate
certain other provisions contained in the Indenture and the Notes.
These amendments will become operative only when Notes are
accepted for purchase by Holdings pursuant to the terms of the
Offer.
In accordance with the terms of the Offer, tendered Notes may no
longer be withdrawn and delivered consents may no longer be
revoked, unless Holdings is required by law to permit withdrawal
or revocation.
The Offer remains open and is scheduled to expire at 12:00
midnight, New York City time, on Aug. 10, 2006, unless extended or
earlier terminated. Holdings' obligation to accept for purchase,
and to pay for, any Notes pursuant to the Offer is conditioned
upon, among other things, its completion of financing transactions
with net proceeds of not less than $200 million and receipt of an
amendment to an existing credit facility.
Any Notes not tendered and purchased pursuant to the Offer will
remain outstanding and the holders thereof will be subject to the
terms of the Indenture as modified by the Supplemental Indenture
even though they did not consent to the proposed amendments.
Bear, Stearns & Co. Inc. is acting as the Dealer Manager for the
tender offer and the Solicitation Agent for the consent
solicitation, and they can be contacted at (877) 696-BEAR (toll-
free). Requests for documentation should be directed to the
Information Agent:
D.F. King & Co., Inc.
Telephone (212) 269-5550 (for banks and brokers only)
Toll Free (800) 659-6590
About United Surgical Partners
Based in Dallas, Texas, United Surgical Partners International
Inc. (NASDAQ: USPI) -- http://www.unitedsurgical.com/-- owns
interests or operates 104 surgical facilities. Of the company's
101 U.S.-based surgery centers, 68 are jointly owned with not-for-
profit healthcare systems. United Surgical also operates three
facilities in the United Kingdom.
* * *
As reported in the Troubled Company Reporter on July 25, 2006,
Moody's Investors Service assigned a rating of Ba2 to the proposed
$200 million term loan B for USP Domestic Holdings, Inc., which is
a wholly-owned subsidiary of United Surgical Partners
International, Inc., the ultimate parent company. Concurrently,
Moody's upgraded the corporate family rating of United Surgical
Partners Holdings, Inc. to Ba2 from B1 and moved it to Holdings.
Moody's also upgraded the rating on the $150 million senior
subordinated notes due 2011 at USPH to Ba3 from B3. The rating
outlook for Holdings has been changed to stable, concluding a
review of the company's ratings for possible upgrade initiated on
Feb. 6, 2006. The proceeds of the term loan B will be used to
finance the announced tender for the $150 million senior
subordinated notes, reduce current revolver outstandings and pay
fees and expenses related to the financing.
VELOTTA ASPHALT: Case Summary & 19 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Velotta Asphalt Paving Co., Inc.
P.O. Box 1930
Willoughby, OH 44096
Bankruptcy Case No.: 06-13354
Type of Business: The Debtor is an asphalt paving contractor.
Chapter 11 Petition Date: August 1, 2006
Court: Northern District of Ohio (Cleveland)
Judge: Randolph Baxter
Debtor's Counsel: Glenn E. Forbes, Esq.
Cooper & Forbes
Main Street Law Building
66 Main Street
Painesville, OH 44077
Tel: (440) 942-9027
Fax: (440) 357-1634
Total Assets: $1,724,837
Total Debts: $2,135,953
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Allied Corporation Material $90,418
8920 Danyon Falls Boulevard
Suite 120
Twinsburg, OH 44087
Davis Diggers Subcontractors $54,965
7985 King Memorial Highway
Mentor, OH 44060
Grand River Asphalt Material $71,154
P.O. Box 249
Grand River, OH 44045
M.F. Velotta & Son Material $52,781
P.O. Box 1360
Willoughby, OH 44096
C&S Limestone Material $41,156
P.O. Box 715066
Columbus, OH 43271
Tri County Concrete Material $36,502
Kenmore Asphalt Material $36,326
Newcorner Concrete Material $35,735
Osborne Concrete & Stone Material $30,372
P.S. Construction Fabrics, Inc. Subcontractors $19,040
Supplies $19,040
Ohio Laborers Fringe Benefit Fringes $29,097
Local 18, Ohio Fringes $25,891
Operating Engineers
Easton Leasing Subcontractors $24,420
Osborne, Inc. Material $16,853
Seal Tech Subcontractors $16,417
Weston Hurd, LLP Legal Services $15,633
Welfle, Inc. Subcontractors $15,425
Aeromark, Inc. Material $15,107
S.B. Morabito Trucking Trucking $15,000
WABTEC CORP: Board Approves $50 Million Share Repurchase Program
----------------------------------------------------------------
The Board of Directors of Wabtec Corporation authorized the
repurchase of up to $50 million of the company's outstanding
shares. The company intends to purchase these shares on the open
market or in negotiated or block trades. No time limit was set
for the completion of the program, which qualifies under the
company's current credit agreement as well as the bond indenture
for its currently outstanding debt.
"Our operations continue to perform very well, with significantly
improved operating margins, and strong earnings and cash flow,"
said Albert J. Neupaver, Wabtec president and chief executive
officer. "The decision by our Board to initiate this share
repurchase program reflects their confidence in our long-term
prospects."
"We have the necessary liquidity to enable us to simultaneously
invest in areas which will produce future growth as well as this
repurchase program. We have set forth ambitious growth targets
for the next five years and are committed to meeting them."
About Wabtec
Wabtec Corporation -- http://www.wabtec.com/-- is a global
provider of value-added, technology-based products and services
for the rail industry.
* * *
Wabtec Corporation's 6-7/8% Senior Notes due 2013 carry Moody's
Investors Service's Ba2 rating and Standard and Poor's Ratings
Service's BB rating.
WESTERN MEDICAL: Court Okays Osborn Maledon as Bankruptcy Counsel
-----------------------------------------------------------------
Western Medical, Inc., obtained authority from the U.S. Bankruptcy
Court for the District of Arizona to employ Osborn Maledon, P.A.,
as its bankruptcy counsel.
Osborn Maledon is expected to:
a. advise the Debtor of its rights, powers and duties in its
chapter 11 case;
b. assist the Debtor in the preparation of its Chapter 11
Petition and Statements and Schedules;
c. assist the Debtor in the formulation, preparation and
prosecution of a plan of reorganization and related
disclosure statement, as well as any agreements, if any,
necessary or proper to implement a plan;
d. assist the Debtor's conduct of litigation and other matters
related to the administration and conduct of its bankruptcy
proceedings;
e. assist and advise the Debtor in its discussion with
creditors relating to the administration of its case;
f. assist the Debtor in reviewing claims asserted against it
and in negotiating with claimants asserting such claims;
g. assist the Debtor in examining and investigation potential
preferences, fraudulent conveyances, and other causes of
action;
h. represent the Debtor at all hearings and other proceedings;
i. review and analyze all motion, applications, orders and
other pleadings and papers filed with the Court, and advise
the Debtor with respect thereto;
j. advise the Debtor concerning, and prepare on behalf of the
Debtors, all motions, applications, complaints, replies,
objections, answers, draft orders, other pleadings, notices
and other documents that may be necessary and appropriate
in furtherance of the Debtor's interest, duties and
objectives; and
k. perform other legal services as may be required or
appropriate in accordance with the Debtor's powers and
duties under the Bankruptcy Code.
Brenda K. Martin, Esq., a partner at Osborn Maledon, tells the
Court that the firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partners/Of Counsel $245 - $465
Associates $160 - $240
Paralegals $50 - $155
Ms. Martin assures the Court that her firm is disinterested as
that term is defined in Section 101(14) of the Bankruptcy Code.
Ms. Martin can be reached at:
Brenda K. Martin, Esq.
Osborn Maledon, P.A.
The Phoenix Plaza
2929 North Central Avenue
Twenty-First Floor
Phoenix, Arizona 85012-2793
Tel: 602-640-9000
Fax: 602-640-9050
http://www.osbornmaledon.com/
Headquartered in Phoenix, Arizona, Western Medical, Inc. --
http://www.westernmedicalinc.net/-- sells and distributes medical
and hospital equipment. The company filed for chapter 11
protection on June 15, 2006 (Bankr. D. Ariz. Case No. 06-01784).
Brenda K. Martin, Esq., at Osborn Maledon, P.A., represents the
Debtor. When the Debtor filed for protection from its creditors,
it estimated assets between $1 million to $10 million and debts
between $10 million and $50 million.
WESTERN MEDICAL: U.S. Trustee Appoints Four-Member Official Panel
-----------------------------------------------------------------
The U.S. Trustee for Region 14 appointed for creditors to serve on
an Official Committee of Unsecured Creditors in Western Medical,
Inc.'s chapter 11 case:
1. McKesson Medical-Surgical, Inc.
Attn: Beth Chadwell
8741 Landmark Road
Richmond, Virginia 23228
Tel: (804) 264-7521
Fax: (804) 264-7540
2. Pride Mobility Products
Attn: Laura Tavella
182 Susquehanna Avenue
Exeter, Pennsylvania 18643
Tel: (570) 655-5574
Fax: (570) 883-4132
3. PRN Marketing, Inc.
dba Rx Positive
Attn: James Hewlett
1845 West 25th Street, Suite A
Yuma, Arizona 85364
Tel: (928) 580-3485
Fax: (530) 229-9405
4. Convaid Inc.
Attn: Nancy Smith
2830 California Street
Torrance, California 90503
Tel: (310) 618-0111
Fax: (310) 618-8811
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.
Headquartered in Phoenix, Arizona, Western Medical, Inc. --
http://www.westernmedicalinc.net/-- sells and distributes medical
and hospital equipment. The company filed for chapter 11
protection on June 15, 2006 (Bankr. D. Ariz. Case No. 06-01784).
Brenda K. Martin, Esq., at Osborn Maledon, P.A., represents the
Debtor. When the Debtor filed for protection from its creditors,
it estimated assets between $1 million to $10 million and debts
between $10 million and $50 million.
WESTERN MEDICAL: Panel Hires Pachulski Stang as Bankruptcy Counsel
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of Western Medical,
Inc., obtained authority from the U.S. Bankruptcy Court for the
District of Arizona to employ Pachulski Stang Ziehl Young Jones &
Weintraub LLP, as its bankruptcy counsel.
Pachulski Stang is expected to:
a. assist, advise and represent the Committee in its
consultation with the debtor-in-possession regarding the
administration of the case;
b. assist, advise and represent the Committee in analyzing the
Debtor's assets and liabilities, investigating the extent
and validity of liens and participating in and reviewing
any proposed asset sales, any asset dispositions, financing
arrangements and cash collateral stipulations or
proceedings;
c. assist, advise and represent the Committee in any manner
relevant to reviewing and determining the Debtor's rights
and obligations under leases and other executory contracts;
d. assist, advise and represent the Committee in investigating
the acts, conduct, assets, liabilities and Debtor's
financial condition, Debtor's business operations and the
desirability of the continuance of any portion of the
business, and any other matters relevant to the bankruptcy
proceedings or the formulation of a plan;
e. assist, advise and represent the Committee in its
participation in the negotiation, formulation and drafting
of a plan of liquidation or reorganization;
f. provide advice to the Committee n the issues concerning the
appointment of a trustee or examiner under Section 1104 of
the Bankruptcy Code;
g. assist, advise and represent the Committee in the
performance of all its duties and powers under the
Bankruptcy Code and the Bankruptcy Rules and in the
performance of other services in the interests of those
represented by the Committee; and
h. assist, advise and represent the Committee in the
evaluation of claims and on any litigation matters.
Samuel R. Maizel, Esq., a partner at Pachulski Stang, tells the
Court that he will bill $495 for this engagement. Mr. Maizel
discloses that Hamid R. Rafatjoo, Esq., ad Ira D. Kharasch, Esq.,
will also be providing services. Mr. Rafatjoo bills $395 per hour
while Mr. Kharasch bills $625.
Mr. Maizel assures the Court that his firm does not hold nor
represent interests adverse to the Debtor, its estate, or
creditors.
Mr. Maizel can be reached at:
Samuel R. Maizel, Esq.
Pachilski Stang Ziehl Jones and Weintraub LLP
10100 Santa Monica Boulevard, Suite 1100
Los Angeles, California 90067
Tel: (310) 772-2306
Fax: (310) 201-0760
http://www.pszyjw.com/
Headquartered in Phoenix, Arizona, Western Medical, Inc. --
http://www.westernmedicalinc.net/-- sells and distributes medical
and hospital equipment. The company filed for chapter 11
protection on June 15, 2006 (Bankr. D. Ariz. Case No. 06-01784).
Brenda K. Martin, Esq., at Osborn Maledon, P.A., represents the
Debtor. When the Debtor filed for protection from its creditors,
it estimated assets between $1 million to $10 million and debts
between $10 million and $50 million.
WINN-DIXIE: Court Approves Wachovia Commitment Letter
-----------------------------------------------------
Judge Funk of the U.S. Bankruptcy Court for the Middle District of
Florida approves Winn-Dixie Stores, Inc., and its debtor-
affiliates' request to enter into a commitment letter dated June
28, 2006, with Wachovia Bank, National Association and Wachovia
Capital Markets LLC for the arrangement and provision of a
$725,000,000 senior secured exit financing facility.
In addition, Judge Funk authorizes the Debtors to reimburse
Wachovia for expenses incurred pursuant to the Commitment Letter
and to provide indemnifications to Wachovia and its affiliates,
including their respective directors, officers, agents, employees
and representatives.
If Wachovia does not provide the exit facility set forth in the
Commitment Letter, the Court directs Wachovia to provide the
Debtors with copies of any appraisals, reports or other documents
prepared and provided by third parties that were either paid for
by the Debtors or by Wachovia.
As reported in the Troubled Company Reporter on July 5, 2006,
Wachovia will provide a $725,000,000 facility consisting of
revolving loans, with a $300,000,000 sublimit for letters of
credit.
At its option, Winn-Dixie Stores, Inc., may, not less than 30
days prior to the closing of the Exit Facility, upon notice to
and after consultation with Wachovia, as agent, elect to reduce
the amount of the Maximum Credit but in no event less than
$600,000,000.
The Debtors will have the option to increase the Maximum Credit
by up to $100,000,000 in increments of not less than $25,000,000,
subject to certain terms and conditions.
The Revolving Loan will have a maturity date five years from the
closing date.
Upon its execution of the Commitment Letter, Winn-Dixie, as
administrative borrower, will specify to Wachovia Capital Markets
in writing which of two base alternatives should be included in
the Loan Documents.
Winn-Dixie Stores and its subsidiaries that are borrowers under
the DIP Credit Agreement, dated February 23, 2005, with Wachovia,
will act as borrowers under the Exit Facility. Winn-Dixie's
direct or indirect U.S. subsidiaries will guarantee the Borrowers'
obligations under the Exit Facility.
To secure all obligations under the Exit Facility, Wachovia and
the Lenders will have first priority, perfected security interests
in and liens upon the Collateral, but as to priority, subject to
the liens as are permitted under the Loan Documents.
The Borrowers may elect that all or portions of the Revolving
Loans bear interest at:
(a) the Applicable Margin plus the ABR; or
(b) the Applicable Margin plus the Adjusted Eurodollar Rate.
ABR refers to the higher of (i) Wachovia's prime rate or (ii) the
federal funds effective rate plus 0.50%.
The Debtors agree to pay:
-- an unused line fee of 0.25% per annum on the amount by
which the Maximum Credit exceeds the average monthly
balance of Revolving Loans and L/Cs outstanding, payable
monthly in arrears; and
-- letter of credit fees equal to 1.00% on the daily
outstanding balance of commercial L/Cs and the applicable
percentage of the Applicable Margin for Eurodollar Rate
Loans on the daily outstanding balance of standby L/Cs, in
each case payable monthly in arrears.
A full-text copy of the Exit Facility Term Sheet is available for
free at http://ResearchArchives.com/t/s?cd1
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. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Three Parties Object to Solicitation Process
--------------------------------------------------------
Three parties have filed objections to Winn-Dixie Stores, Inc.,
and its debtor-affiliates' proposed solicitation procedures.
(a) E&A Financing, et al.
E&A Financing II LP, E&A Southeast LP, E&A Acquisition Two LP,
Shields Plaza Inc., Woodberry Plaza (E&A) LLC, Villa Rica Retail
Properties Inc., West Ridge LLC, and Bank of America, as trustee
of Betty Holland, object to the:
(1) proposed requirement that all communications among
creditors in opposition to the Joint Plan of
Reorganization be submitted to the Court for advance
approval; and
(2) proposal that landlords will not be allowed to vote their
claims on guarantees.
Adam N. Frisch, Esq., at Held & Israel, in Jacksonville, Florida,
asserts that the Debtors' proposed restriction on a creditor's
ability to solicit another creditor to reject the Plan is
contrary to law and should be rejected by the Court.
Mr. Frisch notes that in Century Glove Inc. v First American Bank
of New York, 860 F.2d 94 (3rd Cir. 1988), the Third Circuit
expressly rejected the contention that Section 1125 of the
Bankruptcy Code requires Court approval of all communications
among creditors soliciting the acceptance or rejection of a plan.
The Third Circuit held that allowing a bankruptcy court to
regulate communications between creditors conflicts with the
language of the statute.
The E&A Landlords also contend that holders of landlord claims
against multiple Debtors based on a lease and a guarantee should
receive two ballots and be allowed to vote both claims because
the claims are based on different contractual undertakings and
are against different Debtors.
Accordingly, the E&A Landlords ask the Court to disapprove the
Solicitation Procedures unless:
-- creditors are allowed to solicit other creditors to vote
for or against the Plan without having the Court approve
the solicitations; and
-- all claims in a voting class are allowed to vote.
(b) Kentucky and Florida Tax Collectors
Tax collectors from 57 counties within Florida object to the
inclusion of unilateral release provisions within the ballots.
Brian T. FitzGerald, Esq., of the Hillsborough County Attorney's
Office, in Tampa, Florida, asserts that the Court should not
approve ballot forms that provide for a complete, unilateral
release of the Debtors, their employees, agents, and others in
return for an affirmative vote for the Joint Plan of
Reorganization.
The Debtors retain all their rights to object to any claim yet
creditors are left with a release of all defenses they may have
to claim objections, Mr. FitzGerald notes.
The Florida Tax Collectors further object to provisions on the
reverse side of the proposed ballots for Class 10 Secured Tax
Claims outlining a sub-class procedure and vote count process.
According to Mr. FitzGerald, the provisions are subject to
objections within the disclosure statement approval and plan
confirmation process.
The tax collectors for each of the following counties within the
Commonwealth of Kentucky concur with the Florida Tax Collectors'
contentions that the unilateral release provisions in the
ballot forms should be stricken.
(c) Terranova Landlords
Landlords Westfork Tower LLC, Concord-Fund IV Retail LP, TA
Cresthaven LLC, Flagler Retail Associates Ltd., Elston/Leetsdale
LLC, and their property manager Terranova Corp., urge the Court
to deny certain portions of the Debtors' Solicitation Procedures.
The Terranova Landlords aver that they are in danger of being
disenfranchised from voting on the Debtors' Chapter 11 Plan while
possibly having their claims significantly impaired.
Landlords like the Terranova Landlords whose leases the Debtors
have moved to assume and whose cure claims are in dispute, are
apparently unable to vote on the Plan even though their leases
may ultimately be rejected, resulting in their entitlement to
Class 13 Landlord Claims, Karen K. Specie, Esq., at Scruggs &
Carmichael P.A., in Gainesville, Florida, notes.
Under the Solicitation Procedures, Class 13 Landlord Claimants
whose claims are disputed, contingent, or unliquidated also
have no right to vote on the Plan unless they file a motion
seeking to be allowed to vote pursuant to Rule 3018(a) of the
Federal Rules of Bankruptcy Procedure.
Ms. Specie asserts that landlords subject to assumption motions,
including the Terranova Landlords, should either be treated as
administrative claimants whose claims will be paid in full under
the Plan, or they should be allowed to vote without having to
file Rule 3018 motions.
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. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WORLDCOM INC: Court Says Lousiana Right of Way Settlement is Fair
-----------------------------------------------------------------
WorldCom Inc. and its debtor-affiliates together with claimants
XCL, Ltd., LM Holding Assoc. LP, David Odom, Katherine McClellan
Sibille, the Sibille Co., Inc., Sylvia Weil Marcuse, H.M. Kimball
Jr. and Elizabeth Kimball Lewis sought the certification of a
settlement class and the approval of a Louisiana Right of Way
Settlement from the U.S. Bankruptcy Court for the District of New
York.
Procedural Fairness
The Court notes that the Claimants' counsel are skilled attorneys
practicing in a range of fields related to the Louisiana Actions.
Similarly, the Debtors' counsel are experienced litigators and
reorganization attorneys who have ably guided the Debtors through
the bankruptcy process.
The Honorable Arthur Gonzalez acknowledges that the parties
engaged in a lengthy discovery process in the Louisiana Actions
regarding class certification and the substantive factual and
legal issues involved at trial. The Court opines that the
Settlement and the Implementation Agreement were the result of
arm's-length bargaining between the parties.
Accordingly, Judge Gonzalez finds that the procedural
requirements of Rule 23 of the Federal Rules of Civil Procedure
and Rule 9019 of the Federal Rules of Bankruptcy Procedure are
satisfied and that the negotiation process was procedurally fair.
Analysis on Class Members' Objections
Two groups of proposed class members, the McCormick Objectors and
the Alexander Objectors, have filed briefs and appeared before
the Court in opposition to the Settlement.
The Objectors noted that the significant time and expense
involved in traveling to the Court from Louisiana and argued that
the Court's exercise of jurisdiction effectively deprives class
members of the right to appear before the Court and testify
regarding the Settlement.
Judge Gonzalez notes that the Objectors cite no statutory
authority or case law in support of their position. "It is
sufficient to resolve [the] objection to note that the Objectors
have not suffered any real prejudice or deprivation."
The Objectors also suggested that the Court is unable to
reconcile what they characterize as competing obligations under
Civil Rule 23 to safeguard the interests of absent class members,
and under Bankruptcy Rule 9019 to safeguard a debtor's estates.
The Court contends that the argument is without merit. The
Objectors cite no law in support of their position, nor do they
suggest what legal grounds the Court should decline to exercise
jurisdiction.
The Court recognizes that upon review of the relevant legal
standards and the facts present, the Settlement may be found to
be fair to one party yet not meet the applicable standard with
respect to the other. It is also possible that the Settlement
will fall within the appropriate range of reasonableness or
fairness as is required for each party and, thus warrants
approval under both Civil Rule 23 and Bankruptcy Rule 9019, Judge
Gonzalez says.
The Court asserts that those considerations do not signify that
it cannot adequately perform its duties. Rather, the Court must
only be aware of the possible conflict between the interests it
must protect and take care to perform distinct analyses to each
party, Judge Gonzalez says.
The Court concludes that the Objectors have failed to establish
that it cannot or should not exercise jurisdiction over the
Settlement Motion and the Rule 23 determination.
Notice
The Court acknowledges that individual notices of settlement were
mailed to more than 7,000 class members and were published in
major newspapers throughout the state.
The Court finds that the Notice satisfies the applicable
standards of Civil Rules 23(e)(1)(B) and (c)(2)(B):
-- The Notice clearly explains the procedural history of the
Louisiana Actions and the subsequent severing of the
actions as a result of the Reorganized Debtors'
bankruptcy;
-- The Notice concisely explains the nature of the action, the
definition of the class and the class claims;
-- The Notice provides instructions for objecting to the
Settlement or otherwise appearing before the Court; and
-- The Notice clearly explains the consequences of a class
judgment.
Class Certification
The Court finds that the requirements of Civil Rules 23(a)(1) to
(4) regarding certification of the class are satisfied:
-- More than 7,000 class members have been identified and
noticed and joinder of that many parties is clearly
impractical;
-- The Claimants' trespass claims against the Reorganized
Debtors present a number of common questions of law;
-- All class members' claims arise from the installation of
fiber optic cable in railroad rights-of-way and all assert
the same legal theory, namely, that the Reorganized Debtors
did not have the authority to so install that cable; and
-- All class members share the same interest in maximizing
recovery.
Civil Rule 23(b)(3) requires that "question of law or fact common
to the members of the class predominate over any question
affecting only individual members, and that a class action is
superior to other available methods for the fair and efficient
adjudication of the controversy."
Individual factual issues are minor in comparison to the many
unresolved legal issues that will in large part determine the
viability of class members' claims, Judge Gonzalez notes.
Accordingly, the Court concludes that common issues predominate
issues affecting only individual class members.
The Court holds that a class action is superior to other forms of
adjudication. There is a substantial probability that many class
members would hold negative-value claims if forced to litigate
their claims individually, Judge Gonzalez opines. "It is
probable, due to the Reorganized Debtors' bankruptcy, that class
members will only receive compensation through a class action."
Substantive Fairness
In assessing substantive fairness, Judge Gonzalez considered
certain factors identified by the Second Circuit in City of
Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974),
abrogated on other grounds by Goldberger v. Integrated Res.,
Inc., 209 F.3d 43 (2d Cir. 2000):
A. The Complexity, Expense and Likely Duration of the Litigation
The Court is persuaded by the testimony of Professor Randy
Trahan that the litigation presents a large number of
unresolved issues in Louisiana property law.
The Court anticipates that the Debtors would press each of
those unresolved issues, requiring an additional investment of
time and expenses on behalf of the Claimants.
Accordingly, Judge Gonzalez holds that the complexity,
expense, and duration of any trial on the merits strongly
militate in favor of the Settlement.
B. The Reaction of the Class to the Settlement
Excluding the Hurricane-Affected Parishes, the Court notes
that the parties mailed notices to 7,275 landowners registered
on the state tax assessment rolls and published notices in
local newspapers throughout the state.
The Court notes that the Settlement received a favorable
response and this reaction reflects very favorably on the
fairness of the Settlement.
C. The Stage of the Proceedings and the Amount of Discovery
Completed
It is clear that the parties have conducted sufficient
discovery to have an accurate understanding of the various
legal and factual issues affecting the probability of
recovery, Judge Gonzalez says.
D. The Risks of Establishing Liability
Pursuant to Mr. Trahan's testimony, the Court recognizes the
difficulty the Claimants would face in securing class
certification for purposes of trial.
Thus, the Court determines that the risks of establishing
liability weigh heavily in favor of the Settlement.
E. The Risk of Establishing Damages
The Claimants' challenges in establishing liability on their
claims clearly affects the risk of establishing damages, the
Court opines.
There also is a clear risk that the Claimants would be
entitled to only minimal damages even if they successfully
established liability, the Court notes.
Thus, the Court holds that the risk of establishing damages
weighs in favor of the Settlement.
F. The Risks of Maintaining the Class Action Through Trial
The Court is doubtful in light of overwhelming precedent that
a class would be certified for trial. This factor weighs
heavily in favor of the Settlement, Judge Gonzalez contends.
G. The Ability of Defendants to Withstand a Greater Judgment
The Court has considered and has concluded that the ability of
the defendants to withstand a greater judgment neither favors
nor disfavors the Settlement.
H. Range of Reasonableness of the Settlement Fund in Light of the
Best Possible Recovery, and to a Possible Recovery in Light of
All the Attendant Risks Of Litigation
Given the overwhelming precedent denying class certification
for trial in similar class actions and the discharge of the
Debtors' prepetition debts by their bankruptcy proceeding, the
Court doubts that the Claimants could obtain any significant
recovery outside the Settlement.
Moreover, the Court predicts that the Debtors would offer a
number of defenses and counterarguments at trial, which would
come at a substantial cost in legal fees and time to the
Claimants, necessarily reducing any award they might obtain.
After considering the relevant facts and legal issues, the Court
opines that the Debtors probably do not possess the right to
install fiber optic cable on the class members' property under
current Louisiana law. The Court, however, does not consider
that judgment inevitable if the parties proceeded to trial.
Accordingly, the Court holds that the Settlement is fair and
reasonable as to both class members and the estate's creditors
under Civil Rule 23 and Bankruptcy Rule 9019.
About WorldCom
WorldCom, Inc., a Clinton, MS-based global communications company,
filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y.
Case No. 02-13532). On March 31, 2002, WorldCom listed
$103,803,000,000 in assets and $45,897,000,000 in debts. The
Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and
on Apr. 20, 2004, the Company formally emerged from U.S. Chapter
11 protection as MCI, Inc. On Jan. 6, 2006, MCI merged with
Verizon Communications, Inc. MCI is now known as Verizon
Business, a unit of Verizon Communications. (WorldCom Bankruptcy
News, Issue No. 122; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
WORLDCOM INC: Court Expunges Claims of Access All and Division 1
----------------------------------------------------------------
The Honorable Arthur Gonzalez of the U.S. Bankruptcy Court for the
District of New York disallowed and expunged Claim No. 10875 filed
by Access All American L.L.C. and Division 1 Marketing L.C.
at WorldCom Inc. and its debtor-affiliates' behest.
On January 14, 2003, Access All American and Division 1
Marketing filed Claim No. 10875, asserting an unsecured
claim against the Debtors in an indeterminate amount.
On October 5, 1998, Access All American and Total Communications
Services, Inc., entered into a resale agreement.
During the same period, Access All American attempted to enter
into a contract with the Debtors to provide certain
telecommunication and related services, which it intended for TCSI
to resell.
However, the Debtors refused to do business with Access All
American because of its inability to obtain a line of credit
attesting to the financial stability of the company.
TCSI learned that Access All American did not have a
telecommunications agreement with the Debtors. TCSI then
repudiated its Resale Agreement with Access All American.
Access All American also entered into a Confidentiality Agreement
with the Debtors in August 1998, in order not to discuss whether
the Debtors would be interested in providing telecommunication
services. On October 29, 1998, Access All American amended the
Confidentiality Agreement, providing that Access All American
will not to assert any claims against the Debtors or demand any
compensation arising out of its efforts to do business with TCSI.
On the other hand, Division 1 Marketing asserted that the Debtors
breached an agreement to pay it a 5% commission on certain long
distance services the Debtors allegedly sold to TCSI.
The Debtors sought summary judgment against Access All
American and Division 1 Marketing on Claim No. 10875, contending
that Access All American's claim failed as a matter of law for
four reasons:
1. Access All American's claims are contractually barred
because it executed a covenant not to sue the Debtors;
2. Access All American and the Debtors did not enter into a
contract for the sale of telecommunication services;
3. Access All American has failed to provide any evidence,
demonstrating that the Debtors interfered with its
contractual relationships or business expectancies; and
4. Access All American's claims for interference with
contractual relationships or business expectancies are
time-barred under New York's three-year statute of
limitations.
Similarly, the Debtors asserted that Division 1 Marketing's claim
fails as a matter of law because there is no evidence of:
-- any contractual agreement between Division 1 Marketing and
the Debtors; and
-- any damages it sustained as a result of the Debtors'
conduct.
About WorldCom
WorldCom, Inc., a Clinton, MS-based global communications company,
filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y.
Case No. 02-13532). On March 31, 2002, WorldCom listed
$103,803,000,000 in assets and $45,897,000,000 in debts. The
Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and
on Apr. 20, 2004, the Company formally emerged from U.S. Chapter
11 protection as MCI, Inc. On Jan. 6, 2006, MCI merged with
Verizon Communications, Inc. MCI is now known as Verizon
Business, a unit of Verizon Communications. (WorldCom Bankruptcy
News, Issue No. 122; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
WOODCREST LLC: Case Summary & 13 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Woodcrest, LLC
953 East Monroe Road
St. Louis, MI 48880
Bankruptcy Case No.: 06-50226
Chapter 11 Petition Date: July 28, 2006
Court: Eastern District of Michigan (Detroit)
Judge: Phillip J. Shefferly
Debtor's Counsel: Donald C. Darnell, Esq.
Darnell & Lulgjuraj, P.C.
311 Weiser Way
Chelsea, Michigan 48118
Tel: (734) 433-0816
Fax: (734) 433-0817
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 13 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ms. Ann L. Andrews, Esq. Legal Services $166,390
Honigman Miller Schwartz and
Cohn LLP
222 North Washington Square
Suite 400
Lansing, MI 48933-1800
Lee Wilson dba Real Property $150,000
D&G Underground Construction
3825 Wellman Line
Yale, MI 48907
Michigan Pipe and Real Property $120,817
Valve-Flint, Inc.
5701 Weservelt
Saginaw, MI 48604
Northern Concrete Pipe Real Property $88,278
401 Kelton Street
Bay City, MI 48706
Kohn Financial Expert Witness in $11,112
2939 South Rochester Road Litigation
Suite 239
Rochester, MI 48307
Wonsey Tree Service Tree Services $7,454
Mr. Marc A. Goldman, Esq. Legal Services $7,125
Powell's Plumbing and Supply Plumbing Services $5,619
Capital Consultants Expert Witness in $4,264
Litigation
Home Depot Revolving Credit $400
Wells Fargo Revolving Credit $150
Franklin Bank Revolving Credit $150
Dell Computer Leased Computers $38
WV FIBER: Sells Assets to Integrated Media for $1.6 Mil. in Cash
----------------------------------------------------------------
Integrated Media Holdings, Inc. will acquire all of the assets and
operations of WV Fiber LLC for $1,662,500 in cash and 4,055,448
shares of IMHI common stock.
The U.S. Bankruptcy Court for the Middle District of Tennessee
approved the sale on July 26, 2006.
The acquisition of the WV Fiber network brings to IMHI $4 million
in current annual network contract revenues, adds $1.75 million in
net assets to the IMHI balance sheet, and has an extensive
pipeline of new network contracts. The sale clears the network
and operations from bankruptcy as the assets and operations of WV
Fiber are being sold to IMHI free and clear of interests from
creditors.
Under the terms of the purchase, preferred shares issued as a part
of this agreement will not have any effect on fully diluted amount
of shares outstanding of IMHI. The network and operations will be
held by a newly formed, wholly owned subsidiary of Integrated
Media and will become a key component of the I-Media Group and its
multi-platform content delivery network. The closing of the
acquisition is expected to occur on Aug. 8, 2006.
"The infrastructure and operations of the WV Fiber network that we
are acquiring, along with the products and services being rolled
out by Endavo and our recently announced acquisition of Bidchaser,
provide a major inflection point for our company," said Paul Hamm,
I-Media's CEO. "The acquisition of the WV Fiber network will
provide I-Media with an immediate and significant base of
recurring and growing contract revenues for the first time -- a
major improvement to our financials -- and the content delivery
network infrastructure to support our broadband video and d-
commerce initiatives."
The WV Fiber network and operations will be used for continued
Internet access, transport, Optical Carrier connectivity,
colocation and peering. The network will also serve as the
IP-based content delivery backbone network for broadband video
platforms and IPTV services deployed by Endavo Media and
Communications, another wholly owned subsidiary of IMHI. WV Fiber
currently has over 400 network peering relationships. With this
in place, I-Media is poised to become a leading global IPTV and
broadband TV player for content, network connectivity and
transport. WV Fiber, Inc. will continue expanding its market
reach as its extensive existing and growing connectivity
simultaneously functions as the content delivery network for
Endavo's delivery of digital content and IP-based services to IPTV
and broadband TV platforms and service providers around the globe.
"We are pleased to be part of the IMHI acquisition, which ensures
the continued success of WV Fiber," said Peter Marcum, chairman of
WV Fiber. "Since it's formation in 2003, we have become one of
the leading backbone networks and I-Media will help us to expand
our reach to new customers."
"We are thrilled about the impact the acquisition of WV Fiber will
have on I-Media and our shareholders," Mr. Hamm added. "This
acquisition greatly accelerates our business model in both the
broadband video and d-commerce markets. We expect continued growth
in WV Fiber's network sales and immediate cost of operations
decrease for our subsidiaries that rely upon content delivery
networks."
About Integrated Media
Headquartered in Atlanta, Georgia, Integrated Media Holdings, Inc.
(OTCBB: IMHI) -- http://www.i-mediaholdings.com/-- is a publicly
traded holding company that acquires, invests in, builds and
operates innovative digital communications and media technologies
businesses. The I-Media Group develops, operates and integrates
technologies and network infrastructure to form a digital commerce
EcoSystem that supports multiple forms of distribution for
entertainment, media, and communications services over broadband.
About WV Fiber
Headquartered in Nashville, Tennessee, WV Fiber, LLC --
http://www.wvfiber.com/-- a wholly owned company of Wilhagan
Ventures, is a fiber network service provider to more than 70
existing network customers, including leading cable,
telecommunications and content delivery companies such as Charter
Communications, Cincinnati Bell, Akamai, VitalStream, and Knology.
The Company provides national and international communications
services, as well as hosting, collocation and other professional
services. The Company filed for chapter 11 protection on April
15, 2005 (Bankr. M.D. Tenn. Case No. 05-04639). Robin Bicket
White, Esq., at MGLAW PLLC, represent the Debtor. When the Debtor
filed for protection from its creditors, it estimated assets and
debt between $1 million to $10 million.
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:
In re American Voyager Travel, Inc.
Bankr. N.D. Tex. Case No. 06-32974
Chapter 11 Petition filed July 26, 2006
See http://bankrupt.com/misc/txnb06-32974.pdf
In re C-Tec Security & Consultant, Inc.
Bankr. M.D. La. Case No. 06-10538
Chapter 11 Petition filed July 26, 2006
See http://bankrupt.com/misc/lamb06-10538.pdf
In re JanTech Staffing Services, Inc.
Bankr. N.D. Tex. Case No. 06-32972
Chapter 11 Petition filed July 26, 2006
See http://bankrupt.com/misc/txnb06-32972.pdf
In re Van Handel ETS, LLC
Bankr. E.D. Wis. Case No. 06-24030
Chapter 11 Petition filed July 26, 2006
See http://bankrupt.com/misc/wieb06-24030.pdf
In re Brant James Chesbro
Bankr. D. Wyo. Case No. 06-20369
Chapter 11 Petition filed July 27, 2006
See http://bankrupt.com/misc/wyb06-20369.pdf
In re Carpet Place of Westchester Inc.
Bankr. S.D.N.Y. Case No. 06-22460
Chapter 11 Petition filed July 27, 2006
See http://bankrupt.com/misc/nysb06-22460.pdf
In re Financial Crisis Management Inc.
Bankr. C.D. Calif. Case No. 06-11221
Chapter 11 Petition filed July 27, 2006
See http://bankrupt.com/misc/cacb06-11221.pdf
In re Gatsby Properties, Inc.
Bankr. N.D. Tex. Case No. 06-33004
Chapter 11 Petition filed July 27, 2006
See http://bankrupt.com/misc/txnb06-33004.pdf
In re Larry J. Hilliard
Bankr. W.D. Tenn. Case No. 06-11733
Chapter 11 Petition filed July 27, 2006
See http://bankrupt.com/misc/tnwb06-11733.pdf
In re Mountain Music Inn, Inc.
Bankr. W.D. Mo. Case No. 06-60649
Chapter 11 Petition filed July 27, 2006
See http://bankrupt.com/misc/mowb06-60649.pdf
In re Pipkin Mortuary, Inc.
Bankr. D. Colo. Case No. 06-14800
Chapter 11 Petition filed July 27, 2006
See http://bankrupt.com/misc/cob06-14800.pdf
In re 3814 Cleveland Avenue LLC
Bankr. S.D. Ohio Case No. 06-53880
Chapter 11 Petition filed July 28, 2006
See http://bankrupt.com/misc/ohsb06-53880.pdf
In re Valerie Boutique, Inc.
Bankr. M.D. Tenn. Case No. 06-03965
Chapter 11 Petition filed July 28, 2006
See http://bankrupt.com/misc/tnmb06-03965.pdf
In re Corporate Management Team, Inc.
Bankr. N.D. Tex. Case No. 06-42318
Chapter 11 Petition filed July 29, 2006
See http://bankrupt.com/misc/txnb06-42318.pdf
In re Auto Image Motorcars, Inc.
Bankr. M.D. Fla. Case No. 06-03881
Chapter 11 Petition filed July 31, 2006
See http://bankrupt.com/misc/flmb06-03881.pdf
In re Fellowship Missionary Baptist Church of Dallas, Inc.
Bankr. N.D. Tex. Case No. 06-33078
Chapter 11 Petition filed July 31, 2006
See http://bankrupt.com/misc/txnb06-33078.pdf
In re Fredericksburg Herb Farm, Inc.
Bankr. W.D. Texas Case No. 06-51370
Chapter 11 Petition filed July 31, 2006
See http://bankrupt.com/misc/txwb06-51370.pdf
In re Grayson Flying Service, Inc.
Bankr. E.D. Tex. Case No. 06-41198
Chapter 11 Petition filed July 31, 2006
See http://bankrupt.com/misc/txeb06-41198.pdf
In re Gregory Lynn Lynch
Bankr. M.D. Tenn. Case No. 06-04026
Chapter 11 Petition filed July 31, 2006
See http://bankrupt.com/misc/tnmb06-04026.pdf
In re Kevin Paul Judge
Bankr. W.D. N.Y. Case No. 06-02154
Chapter 11 Petition filed July 31, 2006
See http://bankrupt.com/misc/nywb06-02154.pdf
In re Quality Tires, Inc.
Bankr. S.D. Ala. Case No. 06-11269
Chapter 11 Petition filed July 31, 2006
See http://bankrupt.com/misc/alsb06-11269.pdf
In re Spice Bouquet, Inc.
Bankr. E.D. N.C. Case No. 06-02282
Chapter 11 Petition filed July 31, 2006
See http://bankrupt.com/misc/nceb06-02282.pdf
In re Bar-Ray Investments, Inc.
Bankr. S.D. Tex. Case No. 06-50166
Chapter 11 Petition filed August 1, 2006
See http://bankrupt.com/misc/txsb06-50166.pdf
In re JCB Leasing Inc.
Bankr. S.D. Ill. Case No. 06-31226
Chapter 11 Petition filed August 1, 2006
See http://bankrupt.com/misc/ilsb06-31226.pdf
In re John William Arndt
Bankr. S.D. Tex. Case No. 06-50167
Chapter 11 Petition filed August 1, 2006
See http://bankrupt.com/misc/txsb06-50167.pdf
In re P.F. Investments of KY, L.L.C.
Bankr. W.D. Ky. Case No. 06-31939
Chapter 11 Petition filed August 1, 2006
See http://bankrupt.com/misc/kywb06-31939.pdf
In re South Street Equities, Inc.
Bankr. M.D. Tenn. Case No. 06-04063
Chapter 11 Petition filed August 1, 2006
See http://bankrupt.com/misc/tnmb06-04063.pdf
In re Tizus, Inc.
Bankr. S.D.N.Y. Case No. 06-35771
Chapter 11 Petition filed August 1, 2006
See http://bankrupt.com/misc/nysb06-35771.pdf
*********
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. Rizande B.
Delos Santos, Shimero Jainga, Joel Anthony G. Lopez, Tara Marie A.
Martin, Jason A. Nieva, Emi Rose S.R. Parcon, Lucilo M. Pinili,
Jr., Marie Therese V. Profetana, Robert Max Quiblat, Christian Q.
Salta, Cherry A. Soriano-Baaclo, and Peter A. Chapman, Editors.
Copyright 2006. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
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