/raid1/www/Hosts/bankrupt/TCR_Public/060907.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, September 7, 2006, Vol. 10, No. 213
Headlines
AAMES MORTGAGE: S&P Places Class B Certificate's Rating on Default
ACXIOM CORP: ValueAct Proxy Contest Impacts Fiscal 2007 Earnings
ACXIOM CORP: S&P Places BB Rating on Proposed $800 Million Debts
ADVANCED VENDING: Hires Decosimo as Marketing Professional
ADVANTAGE CAPITAL: Equity Deficit Widens to $6.8 Mil. at June 30
AFFINITY GROUP: June 30 Balance Sheet Upside-Down by $87 Million
AH-DH APARTMENTS: Taps Hoover Slovacek as Special Counsel
ALLIED HOLDINGS: Inks Settlement Deal with Kemper and Haul
ALLIED HOLDINGS: Signs Claims Administration Pact With Broadspire
ALLIED PROPERTIES: Wants Court to Dismiss Chapter 11 Case
ALLIED PROPERTIES: Files Schedules of Assets and Liabilities
AMERIPATH INC: Earns $5.2 Million in Quarter Ended June 30, 2006
ASARCO LLC: Court Approves EPA & Point Ruston Settlement Pacts
BELDEN & BLAKE: Earns $4.7 Million in Second Quarter Ended June 30
BEST MANUFACTURING: U.S. Trustee Picks 7-Member Creditors' Panel
BRAVO! FOODS: Noteholders Agree to Cure Default on Senior Notes
BUFFALO COAL: Panel Taps Parente Randolph as Accountant & Advisor
CALPINE CORP: Court Approves Lenczner Slaght as Canadian Counsel
CALPINE CORP: Can Transfer FT Contract Rights to Coral Energy
CATHOLIC CHURCH: Tort Panel Wants Portland Claim Estimation Denied
CATHOLIC CHURCH: Panel's Production of Docs. Request Can Be Reset
CHEMDESIGN CORP: Wants Godfrey & Kahn as Bankruptcy Counsel
CHI-CHI'S: Court Approves Dunbar Adversary Proceeding Settlement
CHI-CHI'S: William Kaye Has Until Nov. 22 to Object to Claims
CINEMARK USA: Moody's Rates Senior Secured Facility at Ba2
CIT HOME: S&P Downgrades Class BF Debt's Rating to B from BB
COLLINS & AIKMAN: Ct. OKs Additional Stipulation on Collateral Use
COLLINS & AIKMAN: GM Insists Discovery Proposal is Adequate
COMPLETE RETREATS: Trustee Supplements XRoads Employment Objection
COMPLETE RETREATS: Creditors Panel Taps Kramer Capital as Advisor
CONSOLIDATED COTTON: No Collateral Surcharge for Ad Valorem Taxes
CONSTAR INT'L: June 30 Balance Sheet Upside-Down by $42.6 Million
COPELANDS' ENTERPRISES: Taps Clear Thinking as Business Advisor
CROWN CASTLE: Net Loss Down to $13 Mil. for Quarter Ended June 30
CROWN CASTLE: 2nd Qtr. 10-Q Filing Prompts S&P to Affirm Ratings
DANA CORP: Court Denies Compensation for Michael Burns, et al.
DANA CORP: Agrees With Creditors Panel on $10.7MM Pension Payments
DEBASIO FURNITURE: Sells Merchandises to Close Family-Owned Biz
ELAN CORP: Incurs $142.6 Million Net Loss in Second Quarter
ENTRINGER BAKERIES: Trustee Avoids $74,000 of Bridge Loan Payments
FEDERAL-MOGUL: Wants Mt. McKinley's Response Overruled
GENERAL MOTORS: Renault Taps BNP Paribas for Three-Way Tie-Up
GENERAL MOTORS: Offers 100,000-Mile/Five-Year Powertrain Warranty
GLOBAL HOME: Wants Plante & Moran to Audit 401(k) & Pension Plans
HANDMAKER JEWISH: Court Okays James Zeeb as Special Bond Counsel
HARPER STREET: Section 341(a) Meeting Scheduled on Sept. 18
ITC^DELTACOM: Incurs $11.7 Mil. Net Loss in Quarter Ended June 30
KAISER ALUMINUM: Extends Long-Term Supply Agreement with Boeing
KERZNER INTERNATIONAL: Completes Going-Private Transaction
KERZNER INTERNATIONAL: Acquisition Cues S&P's Ratings Withdrawal
K&F INDUSTRIES: Net Income Up 22% in Quarter Ended June 30
LDC OPERATING: U.S. Trustee Wants to Determine Case Closing Status
LEVITZ HOME: Ct. OKs Pact Permitting Panel to Bring Estate Actions
LONDON FOG: Court Grants Preliminary Injunction Against Broome
LYONDELL CHEMICAL: Tenders Offer for 9.625% Series A Secured Notes
MOHEGAN TRIBAL: Moody's Holds Low-B Ratings on Senior Debts
NANTICOKE HOMES: Court Approves Pact Paying $665,150 to Estate
NATIONSRENT COS: Completes $1 Bil. Asset Sale to Sunbelt Rentals
NATIONSRENT COS: Debt Repayment Prompts S&P to Withdrew Ratings
NEOPLAN USA: Can Access Lenders' Cash Collateral Until November 12
NEOPLAN USA: Section 341(a) Meeting Scheduled for September 14
NOVELIS INC: Will Proceed with Sale of Certain Brazilian Assets
NOVELIS INC: Spin-Off Prompts Moody's to Downgrade Ratings
PARMALAT USA: Ferguson Files Civil Case Against Farmland, et al.
PERFORMANCE TRANSPORTATION: Has Until Nov. 30 to File Ch. 11 Plan
PERFORMANCE TRANSPORTATION: Can Assume 22 Real Property Leases
PERFORMANCE TRANSPORTATION: Finis Hodge Wants Stay Lifted
PLYMOUTH RUBBER: Sold to Chrysalis Capital for Undisclosed Sum
RIGEL CORP: Hires Sierra Auction as Consultant and Auctioneer
RIVIERA HOLDINGS: Sale Plans Cues Moody's to Hold Ratings
SAN PASQUAL CASINO: S&P Affirms B+ Senior Unsecured Debt Ratings
SATELITES MEXICANOS: Court OKs KCC as Notice and Balloting Agent
SILICON GRAPHICS: Wants to Enter Into $115 Mil. Commitment Letter
SILICON GRAPHICS: Has Until Dec. 4 to Decide on Unexpired Leases
SCOTTISH RE: Possible Downgrade Affects Ba3 Sr. Debt's Rating
SOLECTRON CORPORATION: Secures New $350 Million Credit Facility
SOLUTIA INC: Wants to Implement 2006 Annual Incentive Program
SOLUTIA INC: Panels Want Adversary Proceeding Stay Motion Denied
ST. VINCENTS: Hemragie Radhamodan Wants Claim Deemed Timely Filed
STEEL DYNAMICS: Good Performance Cues Moody's to Upgrade Ratings
TAG ENTERTAINMENT: Net Loss Down to $89K in Quarter ended June 30
TEEKAY SHIPPING: Acquires 40% Stake in Norwegian Petrojarl ASA
TEEKAY SHIPPING: Petrojarl Merger Cues Moody's to Review Ratings
TESCO AMERICAN: Selling Salt Lake Truck Business on October 16
TEX STAR: Has Until December 1 to File Chapter 11 Plan
TKO SPORTS: Texas Court Confirms First Amended Chapter 11 Plan
TOWER RECORDS: 12 Purchasers Interested in Assets
TRUMP ENT: High Leverage Prompts Moody's to Hold Ratings
VERITAS DGC: Inks Definitive Merger Agreement with CGG
VERITAS DGC: Compagnie Merger Cues S&P to Put Rating on Neg. Watch
WARD PRODUCTS: Wants McGuireWoods as Bankruptcy Counsel
WATERFORD GAMING: Moody's Holds B1 Senior Unsecured Note's Rating
WERNER LADDER: WXP Inc. Seeks Payment of $1.17 Mil. Admin Claim
WERNER LADDER: Complainant Wants Stay Lifted to Pursue PI Action
WINDOW ROCK: California Court Confirms Plan of Reorganization
XM SATELLITE: SEC Wants a Peek Into Subscriber Targets and Costs
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
AAMES MORTGAGE: S&P Places Class B Certificate's Rating on Default
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class B and M-2 certificates issued by Aames Mortgage Trust
2001-3.
The rating on class B is lowered to 'D' from 'CCC', and the rating
on class M-2 is lowered to 'B' and remains on CreditWatch, where
it was placed with negative implications on July 17, 2006.
The rating on class B is lowered to 'D' because it realized
principal write-downs of $74,689 and $133,998 during the July and
August 2006 periods. While the mortgage pool had paid down to
approximately 13.33% as of the August 2006 distribution period,
monthly net losses have substantially outpaced excess interest
over the past 12 months.
During this period, average monthly net losses totaled $237,714,
while average monthly excess interest was approximately $58,950.
Credit enhancement for the M-2 class, which is provided by
subordination and a limited amount of excess interest, continues
to erode as delinquencies translate into losses.
As of the August 2006 period, serious delinquencies amounted to
$3.49 million, while cumulative losses amounted to $10.38 million,
or 5.93% of the original principal balance. The moderate amount
of delinquencies in the pool may translate into losses and cause
credit support to fall below the level originally calculated using
Standard & Poor's expected loss projections for those loans.
Standard & Poor's will continue to closely monitor the performance
of the class M-2 certificates. If delinquent loans cure to a
point at which projections become sufficient for the 'B' rating
level, the rating agency will affirm the rating and remove it from
CreditWatch negative.
Conversely, if delinquencies translate into substantial realized
losses in the upcoming months and continue to erode credit
enhancement, Standard & Poor's will take further negative rating
actions on this class.
Aames Capital Corp. either originated or acquired all of the
mortgage loans used as collateral in the pool in accordance with
its underwriting standards. The underlying collateral for this
transaction is mostly fixed- and adjustable-rate, first-lien, 30-
year mortgages on single-family homes.
Rating Lowered:
Aames Mortgage Trust 2001-3
Class To From
----- -- ----
B D CCC
Rating Lowered and Remains on Creditwatch Negative:
Aames Mortgage Trust 2001-3
Class To From
----- -- ----
M-2 B/Watch Neg. BB/Watch Neg.
ACXIOM CORP: ValueAct Proxy Contest Impacts Fiscal 2007 Earnings
----------------------------------------------------------------
Acxiom(R) Corporation quantified the expected cumulative financial
impact of the successful completion of the proxy contest with
ValueAct Capital, the anticipated completion of the Dutch Auction
Self Tender, an $800 million credit facility, and other items
reported on the first-quarter earnings conference call held
July 26, 2006. The net impact of these items will reduce the
midpoint of the original fiscal year 2007 Financial Road Map
earnings target by six to seven cents per fully diluted share.
The six- to seven-cent reduction reflects the anticipated impact
for fiscal 2007 of these five items:
The fiscal 2007 Road Map targets, communicated during the fiscal
2006 year-end conference call on May 17, 2006, were based on
90 million weighted average shares outstanding. Subsequently, the
company reported a net 2 million share increase related to
greater-than-expected exercises of 2.5 million stock options,
partially offset by share repurchases of 0.5 million shares. The
net increase of approximately 2 million shares will increase the
fiscal 2007 weighted average share count to 91 million, a weighted
average increase of 1 million shares that is expected to result in
a reduction of one cent in fiscal 2007 EPS.
The company incurred proxy contest expenses related to financial
and non-financial advisory fees of approximately $1.2 million in
addition to expenses previously reported. These fees were not
anticipated in the earlier fiscal 2007 Road Map targets and are
expected to reduce fiscal 2007 EPS by approximately one cent.
The company expects to repurchase up to $300 million of its shares
through the Dutch Auction Self Tender scheduled to close on
Sept. 12, 2006. The impact on the weighted average fully diluted
shares outstanding for fiscal 2007 is expected to be a reduction
of approximately 6.0 to 6.5 million shares or an increase to
fiscal 2007 EPS of approximately seven to eight cents.
The company expects to incur incremental interest expense of
approximately $14.3 million related to the incremental borrowings
under the new credit facilities scheduled to close on Sept. 15,
2006. These borrowings are to fund the DAST, restructure existing
debt and be available for general corporate purposes. These costs
are anticipated to result in an approximate 10-cent reduction in
fiscal 2007 EPS.
During the first-quarter earnings conference call, the company
reported that its effective tax rate for fiscal year 2007 was
expected to be 39%. Previously reported targets anticipated an
effective tax rate of 38%. The one percentage point increase is
expected to result in an approximate two-cent reduction in fiscal
2007 EPS.
"Since the fiscal 2006 year-end conference call, we have publicly
provided a significant amount of information to investors, and
management is clarifying that information so that shareholders
have a more complete view of Acxiom's full-year earnings
expectation for fiscal year 2007. While the amounts for the DAST
and the credit facilities continue to be estimates, we do not
expect the final amounts to differ materially from our current
expectations," said Frank Cotroneo, Acxiom's Chief Financial
Officer.
About Acxiom Corporation
Based in Little Rock, Arkansas, Acxiom Corporation (Nasdaq: ACXM)
-- http://www.acxiom.com/-- integrates data, services and
technology to create and deliver customer and information
management solutions for many of the largest, most respected
companies in the world. The core components of Acxiom's
innovative solutions are Customer Data Integration technology,
data, database services, IT outsourcing, consulting and analytics,
and privacy leadership. Founded in 1969, Acxiom has locations
throughout the United States, Europe, Australia and China.
ACXIOM CORP: S&P Places BB Rating on Proposed $800 Million Debts
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its loan and recovery
ratings to Little Rock, Arkansas-based Acxiom Corp.'s proposed
$800 million secured first-lien financing. The first-lien
facilities consist of a $200 million revolving credit facility and
a $600 million term loan. They are rated 'BB' (at the same level
as the corporate credit rating on Acxiom) with a recovery rating
of '2', indicating the expectation for substantial (80%-100%)
recovery of principal in the event of a payment default.
Proceeds from the facilities will be used:
* to fund the company's proposed Dutch tender offer for the
repurchase of its common stock;
* to refinance existing debt;
* to finance working capital; and
* for general corporate purposes.
The corporate credit rating on Acxiom is BB/Stable/--.
The 'BB' rating reflects the company's relatively small size in a
growing and fragmented industry that may see the entrance of
several much larger competitors. This is somewhat offset by
Acxiom's good niche market position and adequate cash flow
generation. Business risk is tempered by the company's expertise
in managing its comprehensive consumer databases.
Ratings List:
* Corporate credit rating: BB/Stable/--
Ratings Assigned:
* $800 million secured financing: BB (Recovery rating: 2)
ADVANCED VENDING: Hires Decosimo as Marketing Professional
----------------------------------------------------------
Advanced Vending Systems, Inc., obtained authority from the U.S.
Bankruptcy Court for the Eastern District of Tennessee to employ
Decosimo Corporate Finance as its marketing professional.
Decosimo Corporate will:
a. review the Debtor's business, industry, competition and
financial history;
b. assist the Debtor in recasting, summarizing and presenting
historical financial information on the Debtor to
prospective purchasers;
c. assist the Debtor in preparing an Information memorandum
and Confidentiality Agreement for use in marketing the
Debtor;
d. develop a list of prospective Transaction parties and
initiate discussions and appropriate parties;
e. assist the Debtor in negotiating with Transaction parties;
f. assist the Debtor and its counsel in evaluating any offers
that may be received for the assets of the Debtor; and
g. provide other services as Decosimo deems necessary or
appropriate and within Decosimo's capabilities in order to
assist the Debtor in completing a transaction.
The Debtor tells the Court that it will pay Decosimo a $45,000 fee
upon closing of a transaction as a minimum base fee. The Debtor
discloses that, in the event it consummates a transaction in which
the value exceeds $4.1 million, Decosimo will receive an
additional success fee equal to a certain percentage of the
transaction value. Documents with the Court did not state the
percentage value.
Headquartered in Ringgold, Georgia, Advanced Vending Systems, Inc.
-- http://www.avsvend.com/-- operates snack food vending
machines. The Company filed for chapter 11 protection on Aug. 7,
2006 (Bankr. E.D. Tenn. Case No. 06-12523). Richard C Kennedy,
Esq., at Kennedy, Koontz & Farinash, represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it estimated less than $50,000 in assets and
estimated debts between $10 million and $50 million.
ADVANTAGE CAPITAL: Equity Deficit Widens to $6.8 Mil. at June 30
----------------------------------------------------------------
Advantage Capital Development Corp. reported total revenue of
$52,282 for the three months ended June 30, 2006, compared with
total revenue of $53,238 for the same period in 2005.
Net loss for the three months ended June 30, 2006 was $118,042
versus net loss of $887,369 for the comparable period in 2005.
The Company's balance sheet at June 30, 2006 showed total assets
of $1.7 million and total liabilities $8.5 million resulting in a
total stockholders' deficit $ 6.8 million. Its total
stockholders' deficit at March 31, 2006 stood at $6.3 million.
A full text-copy of the Company's financial report may be viewed
at no charge at http://ResearchArchives.com/t/s?112b
Going Concern Doubt
As reported in the Troubled Company Reporter on Aug. 23, 2006
Wiener, Goodman & Company, P.C., in Eatontown, New Jersey, raised
substantial doubt about Advantage Capital Development
Corporation's ability to continue as a going concern after
auditing the Company's financial statements for the fiscal years
ended March 31, 2006, and 2005. The auditor pointed to the
uncertainty of the Company to satisfy the $8 million judgment
levied against it.
About Advantage Capital
Based in Aventura, Florida, Advantage Capital Development
Corporation is an internally managed, non-diversified, closed-end
investment company.
AFFINITY GROUP: June 30 Balance Sheet Upside-Down by $87 Million
----------------------------------------------------------------
Affinity Group Inc.'s balance sheet at June 30, 2006 showed
total stockholder's deficit of $87,045,000 resulting from total
assets of $398,023,000 and total liabilities of $485,068,000.
The Company's balance sheet also showed strained liquidity with
$101,951,000 in total current assets and $133,925,000 in total
current liabilities.
For the three months ended June 30, 2006, the Company reported
an $18,781,000 net loss on total revenues of $139,003,000,
compared to net income of $5,131,000 from total revenues of
$133,212,000 in the same period last year.
Full-text copies of the Company's financial statements for the
quarter ended June 30, 2006 are available for free at:
http://researcharchives.com/t/s?1132
Headquartered in Ventura, California, Affinity Group Inc. --
http://www.affinitygroup.com/-- and its affiliated companies
serve the safety, security, comfort, and convenience needs of the
North American recreational vehicle market.
AH-DH APARTMENTS: Taps Hoover Slovacek as Special Counsel
---------------------------------------------------------
AH-DH Apartments, Ltd., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Eastern District of Texas for permission
to employ Hoover Slovacek LLP as their special counsel.
The Debtors tell the Court that as special counsel, Hoover
Slovacek will handle eviction matters.
Hal G. Wolff, a partner at Hoover Slovacek, tells the Court that
attorneys of the firm bill between $235 to $280 per hour.
Mr. Wolff assures the Court that his firm does not represent any
interest adverse to the Debtors or their estates.
Headquartered in Plano, Texas, AH-DH Apartments, Ltd., owns 16
apartment complexes. The company and three of its affiliates
filed for chapter 11 protection on Mar. 22, 2006 (Bank. E.D. Tex.
Case No. 06-40355). J. Mark Chevallier, Esq., at McGuire Craddock
& Strother, P.C., represents the Debtors. When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $50 million and $100 million.
DH Holdings Limited Partnership and DH Holdings GP, Inc., filed
for chapter 11 protection on Apr. 8, 2006 (Bankr. E.D. Tex. Case
Nos. 06-40479 and 06-40480). Another affiliate, DB Holdings, LLC,
filed for chapter 11 protection on Apr. 10, 2006 (Bankr. E.D. Tex.
Case No. 06-40484). The Debtors' chapter 11 cases are jointly
administered under Case No. 06-40355.
ALLIED HOLDINGS: Inks Settlement Deal with Kemper and Haul
----------------------------------------------------------
Allied Holdings, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Northern District of Georgia to approve
their stipulation with Kemper Insurance Companies and Haul
Insurance Company.
Prior to the Debtors' bankruptcy filing, Kemper issued a number of
insurance policies through its affiliated property and casualty
insurers in favor of the Debtors. The Insurance Policies provided
coverage with respect to, among other things, workers'
compensation, automobile and general liability risks for various
periods up to March 1, 2003.
Kemper also issued additional policies -- the Indemnity Policies
-- that provided coverage with respect to portions of the self-
insurance retention or deductible liability of the Debtors under
the Insurance Policies.
Certain of Kemper's obligations to the Debtors were re-insured
through Haul Insurance Company, a non-debtor captive insurance
company affiliated with the Debtors, pursuant to certain
agreements. To secure Haul's obligations to Kemper under the
Haul Agreements, Royal Bank of Canada issued letters of credit
currently totaling $23,141,115 in favor of Kemper.
Haul's obligations to the Bank with respect to the LOCs are
secured by Haul's pledging of cash in an amount equal to the LOCs
Amount.
As a result of the parties' obligations under the Insurance
Policies, the Indemnity Polices, and the Haul Agreements,
accounts receivable owed by Haul to the Debtors were generated.
Harris B. Winsberg, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, relates that Haul may only satisfy its obligations with
respect to the Accounts Receivable through the use of funds that
are not Restricted Cash.
According to Mr. Winsberg, the most recent review of the amount
of outstanding claims with potential coverage under the Indemnity
Policies revealed that:
* the potential exposure to Kemper for the claims is projected
to be $17,127,319; and
* the Debtors have been paid in full, either by Kemper or Haul
for all other amounts previously due and owing under the
Indemnity Policies and the Insurance Policies.
As a result, the LOCs Amount needed to secure Haul's obligations
to Kemper under the Haul Agreements has been reduced.
Kemper, Haul and the Debtors agree that it would be appropriate
to reduce the LOCs Amount by $4,300,000 -- the Collateral
Return Amount. For this reason, the parties stipulate that:
(a) upon the reduction of the LOCs Amount by the Collateral
Return Amount, Haul will pay $4,300,000 in Unrestricted
Cash to the Debtors; and
(b) upon receipt of payment, the Debtors will reduce the
Accounts Receivables amount by $4,300,000.
The parties exchange mutual releases.
A full-text copy of the Stipulation is available for free at
http://researcharchives.com/t/s?1133
Stipulation Must be Approved
Against this backdrop, the Debtors ask the Court to:
(i) authorize them to take all steps necessary to achieve the
Collateral Return;
(ii) approve the Stipulation;
(iii) authorize the Debtors to take all actions necessary
related to future adjustments to the LOCs Amount, letters
of credit securing the Debtors' or Haul's obligations to
other insurers under the same conditions set forth in the
Stipulation, without the need for further Court approval;
(iv) authorize the Bank and any other banking institutions
affected by the relief sought to take any actions
necessary to assist the Debtors, Haul, Kemper and any of
the Debtors' other insurers in satisfying their
obligations under the Stipulation or a similar agreement;
(v) clarify that Kemper will be afforded the protections of
insurance carriers under a prior Court order authorizing
the continued maintenance of and payment of obligations
with respect to the Debtors' insurance programs; and
(vi) find that the order granting the request is effective upon
entry and that the automatic stay is waived.
Mr. Winsberg informs the Court that the $4,300,000 payment will
provide additional liquidity to the Debtors for their operations
while protecting the parties' interests through the releases as a
means of avoiding potential litigation regarding related issues.
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor. Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee. When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts. (Allied Holdings Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/
or 215/945-7000)
ALLIED HOLDINGS: Signs Claims Administration Pact With Broadspire
-----------------------------------------------------------------
In light of Allied Holdings, Inc., and its debtor-affiliates'
rejection of their existing claims administration and brokerage
services agreement with USI of Georgia, Inc., the Debtors seek
authority from the U.S. Bankruptcy Court for the Northern District
of Georgia for authority to enter into a claims administration
agreement with Broadspire Services, Inc.
Broadspire will assume responsibility for the management of claims
incurred during, but not paid after, Dec. 31, 2005, Harris B.
Winsberg, Esq., at Troutman Sanders LLP, in Atlanta, Georgia,
explains.
Under the proposed Claims Administration Agreement, Broadspire
will:
(i) adjust, investigate, settle or resist any claim, pursuant
to the terms of a relevant policy;
(ii) file required claim reports and notices, as agreed to --
from time to time -- in writing by the parties;
(iii) establish the appropriate loss reserve for each claim;
(iv) manage all litigation or other proceedings involving any
claim; and
(v) issue checks for losses and expenses in amounts consistent
with the investigation and evaluation of liability and
damages.
The Debtors will pay Broadspire commissions and fees as is
customary in the insurance industry, Mr. Winsberg says.
Furthermore, the Agreement provides that the Debtors will:
-- establish a loss fund for $744,000 for payments of amounts
made by Broadspire on behalf of Allied Holdings, Inc.; and
-- provide a deposit equivalent to 3 months of the total
estimated annual service fees for claims management.
Agreement Must be Approved
Mr. Winsberg informs the Court that the Debtors require an
administrator experienced with achieving cost containment through
early evaluation and disposition of potential claims. To this
end, Mr. Winsberg explains, Broadspire has a demonstrated ability
to minimize legal expense with the best possible results.
Furthermore, the Debtors are confident that by entering into the
Claims Administration Agreement with Broadspire, they will
achieve possible savings against reserves and continue to reduce
the cost of ongoing claims administration, thereby protecting the
interests of their estates and allowing them to continue
successful operations.
Broadspire's services will likewise assist the Debtors in
achieving additional collateral returns, Mr. Winsberg adds.
A full-text copy of the Claims Administration Agreement is
available for free at http://researcharchives.com/t/s?1131
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor. Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee. When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts. (Allied Holdings Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/
or 215/945-7000)
ALLIED PROPERTIES: Wants Court to Dismiss Chapter 11 Case
---------------------------------------------------------
Allied Properties, LLC, asks the Honorable Marvin Isgur of the
U.S. Bankruptcy Court for the Southern District of Texas to
dismiss its Chapter 11 case or in the alternative appoint a
Chapter 11 Trustee.
Centrum Foreclosure
The Debtor discloses that Global Empire Investments and Holdings,
LLC, an affiliate which filed for chapter 11 protection on
December 2005, owned real property, known as the Corridor Office
Buildings, at Southwest Freeway in Houston, Texas. Centrum
Financial Services, Inc., who held a first lien deed of trust on
the property, obtained Court approval for relief from stay to
foreclose against the property.
The Debtor relates that it sought a preliminary injunction against
Centrum citing that it had negotiated a commitment from PIM Black
Mountain Domestic Venture I, LLC, in the amount of $13.5 Million.
The Bankruptcy Court however denied the Debtor's request and
Centrum went on to foreclose on the property and took title of the
building.
Black Mountain Loan
The Debtor tells the Court that its principal, Dr. Muhammad Haroon
Rashid, entered into a Loan Commitment Letter with Black Mountain
for $15 million. Under the Commitment Letter, Black Mountain was
to have a first lien on the Corridor Buildings. Black Mountain
also wanted a second lien on Dr. Rashid's property, a day care
facility known as Vanguard Academy. Dr. Rashid also agreed to
provide his personal guaranty.
Corridor Buildings Purchase
On Apr. 11, 2006, the Debtor relates that it entered into a
Purchase and Sale Agreement with Centrum to acquire the Corridor
Buildings for $12.5 million. On Apr. 13, 2006, Black Mountain
funded the loan and Allied closed the purchase.
The Debtor says however that at the closing of the sale, it was
short of funds in the amount of $734,242, consisting of:
(a) a $500,000 loan reserve not paid to Black Mountain;
(b) a $150,000 down payment not paid to Black Mountain; and
(c) $84,242 in loan costs in excess of original estimate.
The Debtor tells the Bankruptcy Court that Black Mountain closed
on the loan without an appraisal or an environmental report and
with the $734,242 shortage.
Dr. Rashid came away from the closing with no cash, having paid
$50,000 in cash, having pledged his day care facility and having
issued a personal guaranty.
Black Mountain Default
On June 20, 2006, Black Mountain gave a notice of default under
the loan demanding that the Debtor pay the closing shortage plus
additional fees totaling $806,312. Black Mountain gave notice a
few days later on its intent to accelerate the loan. On July 6,
2006, Black Mountain accelerated the loan and said that it was
posting the Corridor Buildings and Vanguard Academy for
foreclosure.
The Debtor and Dr. Rashid filed an Original Petition and
Application for Temporary Restraining Order and Temporary
Injunction against Black Mountain in the 157th Judicial District
Court, Harris County, Texas, Case Number 2006-44939. The District
Court entered a temporary restraining order subject to the Debtor
posting a $150,000 bond. The Debtor was unable to post the bond
as of July 31, 2006.
The Debtor reminds the Bankruptcy Court that one of the reasons it
filed for chapter 11 protection was to give Dr. Rashid an
opportunity to raise approximately $1 million to attempt to bring
the Black Mountain debt current.
Status Hearing
The Debtor says that it had given Dr. Rashid until the Status
Hearing of its case, Aug. 18, 2006, to raise sufficient funds to
cure the Black Mountain default. If Dr. Rashid is unable to raise
the necessary amounts by that time, the Debtor says that the
Bankruptcy Court may dismiss its case. The Debtor discloses that
it doesn't want its case converted to a chapter 7 liquidation.
Court records do not show if Dr. Rashid was or wasn't able to
raise the amount but after the Status Hearing, the Bankruptcy
Court modified the automatic stay to allow Black Mountain to post
the Corridor Buildings for an October 2006 foreclosure sale.
The Court has continued the hearing on the Debtor's request to
dismiss its case to 10:00 a.m., on Sept. 22, 2006.
Headquartered in Houston, Texas, Allied Properties, LLC, is a real
estate developer. The company filed for chapter 11 protection on
August 1, 2006 (Bankr. S.D. Tex. Case No. 06-33754). Leonard H.
Simon, Esq., at Pendergaft & Simon, LLP, represents the Debtor in
its restructuring efforts. In its schedules of assets and
liabilities, it listed $24,000,072 in assets and $16,424,907 in
debts.
ALLIED PROPERTIES: Files Schedules of Assets and Liabilities
------------------------------------------------------------
Allied Properties, LLC, filed with the U.S. Bankruptcy Court for
the Southern District of Texas, Houston Division, its schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $24,000,000
B. Personal Property $72
C. Property Claimed
as Exempt
D. Creditors Holding
Secured Claims $15,000,000
E. Creditors Holding
Unsecured Priority Claims
F. Creditors Holding $1,424,908
Unsecured Nonpriority
Claims
----------- -----------
Total $24,000,072 $16,424,907
In Schedule B of its Schedule of Assets and Liabilities, the
Debtor disclosed that items under office equipment and inventory
are believed to be still the property of the estate of its
affiliate Global Empire Investments and Holdings, LLC, thus,
declared the current value as unknown.
Headquartered in Houston, Texas, Allied Properties, LLC, is a real
estate developer. The company filed for chapter 11 protection on
August 1, 2006 (Bankr. S.D. Tex. Case No. 06-33754). Leonard H.
Simon, Esq., at Pendergaft & Simon, LLP, represents 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.
AMERIPATH INC: Earns $5.2 Million in Quarter Ended June 30, 2006
----------------------------------------------------------------
For the three months ended June 30, 2006, Ameripath Inc.'s net
income increased $158,000, from net income of $5,060,000 in the
three months ended June 30, 2005, to $5,218,000.
Net revenues for the quarter ended June 30, 2006, increased
$48,058,000, from net revenues of $143,634,000 in the quarter
ended June 30, 2005, to $191,692,000.
At June 30, 2006, the Company's balance sheet showed total assets
of $1,370,416,000, total liabilities of $799,189,000, and total
stockholder's equity of $571,227,000.
Full-text copies of the Company's financial statements for the
quarter ended June 30, 2006, are available for free at:
http://researcharchives.com/t/s?111e
Headquartered in Palm Beach Gardens, Florida, AmeriPath, Inc. --
http://www.ameripath.com/-- is one of the leading anatomic
pathology practices in the United States. AmeriPath offers a
broad range of testing and information services used by physicians
in the detection, diagnosis, evaluation and treatment of cancer
and other diseases and medical conditions.
* * *
AmeriPath Inc.'s long-term corporate family rating, bank loan
debt, and senior subordinate debt carry Moody's B2, B1, and B3
ratings respectively. The ratings were placed on Nov. 10, 2005,
with a stable outlook. The Company's long-term local and foreign
issuer credits carry Standard & Poor's B+ ratings with a negative
outlook.
ASARCO LLC: Court Approves EPA & Point Ruston Settlement Pacts
--------------------------------------------------------------
The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for
the Southern District of Texas in Corpus Christi approves the
compromise and settlement agreement between ASARCO LLC and the
United States Environmental Protection Agency with respect to
EPA's Lien on the Tacoma and Ruston Property. The Court also
approves the second amendment to the consent decree relating to
the remediation of the Tacoma, Washington smelter.
As reported in the Troubled Company Reporter on Aug 10, 2006, the
Court authorized ASARCO LLC in January 2006 to sell approximately
97 acres of real property in Tacoma and Ruston, Washington, to MC
Construction Consultants, Inc. MC Construction subsequently
assigned its rights under the Tacoma Purchase Agreement to Point
Ruston LLC.
The Sale Order provides that the Sale will not become effective
and the Closing will not occur until:
-- an agreement resolving the EPA Lien is approved by the
Bankruptcy Court; and
-- the EPA and Ruston Point have entered into an amended
Consent Decree that has been approved and entered by the
Washington District Court.
ASARCO and the EPA agreed that:
(a) Point Ruston LLC will pay $1,500,000, from the Property's
$6,220,000 Purchase Price, directly to the EPA at Closing;
(b) ASARCO will receive a minimum payment of $7,500,000. When
ASARCO receives the payments, 1/3 of each payment will be
paid directly to the EPA and 2/3 of each payment will be
paid to ASARCO until the EPA has received $2,500,000;
(c) any contingent payout will be split evenly between ASARCO
and the EPA until the EPA receives $1,500,000;
(d) ASARCO will grant to the EPA a security interest in the
payments due, owing or payable to ASARCO under the Tacoma
Purchase Agreement and Development Pay-out Agreement only
to the extent of the payments required to be paid to the
EPA; and
(e) immediately after receipt of the $1,500,000 payment, the
EPA will remove and release its Lien on the Property.
A full-text copy of the EPA Settlement Agreement is available for
free at http://ResearchArchives.com/t/s?f21
The EPA and Point Ruston also amended the Tacoma Smelter Consent
Decree to include Point Ruston as a new party to the Consent
Decree. The Second Amendment provides that Point Ruston will be
responsible for the clean-up of the Tacoma smelter and its
adjacent properties. The Amendment therefore suspends ASARCO's
obligations pending satisfactory completion of Ruston Point's
performance obligations.
A full-text copy of the 2nd Amended Tacoma Smelter Consent Decree
is available for free at http://ResearchArchives.com/t/s?f20
About ASARCO LLC
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
BELDEN & BLAKE: Earns $4.7 Million in Second Quarter Ended June 30
------------------------------------------------------------------
Belden & Blake Corporation earned $4,744,000 of net income on
$38,659,000 of total revenues in the three months ended June 30,
2006. This compares to the Company's net income of $5,975,000
on total revenues of $30,686,000 in the three months ended
June 30, 2005.
The Company's balance sheet at June 30, 2006, showed strained
liquidity with $47,475,000 in total current assets and $73,853,000
in total current liabilities.
At June 30, 2006, the Company had total assets of $793,952,000,
total liabilities of $680,107,000, and total shareholder's equity
of $113,845,000.
Full-text copies of the Company's financial statements for the
quarter ended June 30, 2006, are available for free at:
http://researcharchives.com/t/s?1123
Belden & Blake Corporation -- http://www.beldenblake.com/--
develops, produces, operates and acquires oil and natural gas
properties in the Appalachian and Michigan Basins (a region which
includes Ohio, Pennsylvania, New York and Michigan). The company
is a subsidiary of Capital C, an affiliate of EnerVest Management
Partners, Ltd.
* * *
In July 2006, Moody's Investors Service affirmed Belden & Blake's
Corporate Family Rating of Caa1, and note ratings of Caa2.
Moody's also assigned a developing outlook following the Company's
announcement that its parent company, Capital C Corporation, had
agreed to sell its partnership interests to an affiliate of
EnerVest Management Partners Ltd.
BEST MANUFACTURING: U.S. Trustee Picks 7-Member Creditors' Panel
----------------------------------------------------------------
The U.S. Trustee for Region 3 appointed seven creditors to serve
on an Official Committee of Unsecured Creditors in Best
Manufacturing Group LLC and its debtor-affiliates' chapter 11
cases:
1. Denis M. Golden, Chairperson
Milliken & Company
1045 Sixth Avenue
New York, NY 10018
Tel: (212) 819-4586
Fax: (212) 819-4279
2. Bernard S. Berkowitz
Best Manufacturing, Inc.
443 Northfield Avenue
West Orange, NJ 07052
Tel: (973) 243-6025
Fax: (973) 325-7930
3. Michael Helms
The CIT Group/
Commercial Services, Inc.
301 So. Tryon Street, Suite 2200
2 Wachovia Center
Charlotte, NC 28202
Tel: (704) 339-2920
Fax: (704) 339-2822
4. David Greenstein
Homestead Holdings, Inc.
1700 Westlake Avenue N., Suite 200
Seattle, WA 98109
Tel: (206) 270-5300
Fax: (206) 270-5301
5. Gerald Smith
Central Textile Inc.
P.O. Box 68
Central, SC 29630
Tel: (864) 639-2491
Fax: (864) 639-4513
6. Mehtab Uddin Chawla
Al Karam Towel Industries (Pvt) Ltd.
D-11, S.I.T.E., Super Highway
Scheme No. 33
Karachi, PK
Tel: (646) 290-0415 (U.S.)
Fax: 92 21 688-1387
7. John C. Bray
1888 Mills, LLC
1124 Route 202 South, Suite B 16
Raritan, NJ 08869
Tel: (908) 528-2233
Fax: (908) 685-7150
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 Jersey City, New Jersey, Best Manufacturing Group
LLC -- http://www.bestmfg.com/-- and its subsidiaries manufacture
and distribute textiles, career apparel and other products for the
hospitality, healthcare and textile rental industries. The
Company and four of its subsidiaries filed for chapter 11
protection on Aug. 9, 2006 (Bankr. D. N.J. Case No. 06-17415).
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., represent the Debtors. When the Debtors filed for
protection from their creditors, they estimated assets and debts
of more than $100 million.
BRAVO! FOODS: Noteholders Agree to Cure Default on Senior Notes
---------------------------------------------------------------
Five institutional holders of Bravo! Foods International Corp.'s
Senior Convertible Notes who are parties to a Securities Purchase
Agreement, agreed to release the Company from the events of
default under the Notes that occurred as a result of non-filing of
its Form 10-QSB for the quarterly period ended June 30, 2006.
The Company, on Aug. 31, 2006, entered into Amendment Agreements
with all of the holders of the Notes, pursuant to which it will
issue Amended and Restated Notes in exchange for $15 million of
the Notes.
The Amended Notes provide that, for the period:
(a) from the earlier of Oct. 10, 2006 and the date the
stockholders approve to increase the Company's authorized
common stock from 300 million to 500 million shares
(b) through Dec. 15, 2006, the holders may require the Company
to redeem any portion of the Amended Notes in cash at a
price equal to 125% of the amount redeemed.
The amendment also provide that between Nov. 15, 2006 and
Dec. 15, 2006 the Company may request the holders to require the
redemption any portion of the Amended Notes. In the event that a
holder exercises its right to redeem at the Company's request or
fails to comply with the requested redemption, the holder's right
to subsequent requests for redemptions is terminated. The holders
agreed that upon the holder's delivery of a request for an
optional redemption, the holder waives certain debt and equity
restrictions relative to the financing documentation of the
Securities Purchase Agreement. The Amended and Restated Notes
also provide that the conversion price applicable to the Amended
Notes is reduced from $0.70 to $0.51.
Bravo! Foods International Corp., (OTC: BRVOE.OB)
-- http://www.bravobrands.com/-- develops, brands, markets,
distributes and sells flavored milk products throughout the 50
United States, Great Britain and various Middle Eastern countries.
Bravo!'s products are available in the United States and
internationally through production agreements with regional
aseptic milk processors and are currently sold under the brand
names Slammers(R) and Bravo!(TM). Many of Bravo! Foods'
Slammers(R) lines of shelf-stable, single-serve milk drinks are
co-branded through exclusive partnerships with Masterfoods, a
division of Mars Incorporated, and MD Enterprises (Moon Pie(R)),
providing superior name recognition packaged with quality, great-
tasting drinks. On Nov. 1, 2005, Coca-Cola Enterprises, Inc.,
began distribution of the Slammers(R) Masterfoods line, as well as
the Bravo!'s Slim Slammers(R) and Pro Slammers(TM) products, under
a Master Distribution Agreement with Bravo!
Going Concern Doubt
Lazar Levine & Felix, LLP, expressed substantial doubt about
Bravo! Foods International Corp.'s ability to continue as a going
concern after auditing the Company's financial statements for the
years ended Dec. 31, 2005 and 2004. The auditing firm pointed to
the Company's net loss of $14,506,630 for the year ended Dec. 31,
2005 and working capital deficiency of $86,884 as of the same
date. The firm also pointed to the Company's delinquent payment
of certain debts.
BUFFALO COAL: Panel Taps Parente Randolph as Accountant & Advisor
-----------------------------------------------------------------
The Honorable Patrick M. Flatley of the U.S. Bankruptcy Court for
the Northern District of West Virginia in Elkins authorized the
Official Committee of Unsecured Creditors of Buffalo Coal Company,
Inc., to retain Parente Randolph, LLC, as its accountant and
financial advisor, nunc pro tunc to July 18, 2006.
Parente Randolph will:
a. provide specific services outlined in the Firm's 30/45 day
workplan, which was set forth in the letter from Howard
Cohen to the Committee on July, 12, 2006;
b. assist and advise the Committee in the analysis of:
-- the current financial position of the Debtor;
-- the condition of any and all equipment;
-- the requirements of resuming operations;
-- the status of relevant contracts, permits, and leases;
-- value of inventory;
-- other operational and financial issues; and
-- the operating condition of the mines and processing
facility;
c. assist and advise the Committee in its analysis of the
Debtor's business plans and other reports or analyses
prepared by the Debtor or its professionals, in order to
assist the Committee in its assessment of the business
viability of the Debtor, the reasonableness of projections
and underlying assumptions, and the impact of market
conditions;
d. assist and advise the Committee in its analysis of proposed
transactions for which the Debtor seeks Court approval
including, but not limited to, proposed assets sales; DIP
financing or use of cash collateral; assumption, assignment,
or rejection of leases and other executory contracts;
management compensation, retension, and severance plans;
e. attend and advise at meetings and calls with the Committee
and its counsel and representatives of the Debtor and other
parties;
f. assist and advise the Committee and its counsel in the
development, evaluation, and documentation of any plan of
reorganization or strategic transaction, including
developing, structuring, and negotiating the terms and
conditions of potential plan or strategic transactions
including the value of consideration that is to be provided;
g. assist and render expert testimony on behalf of the
Committee (as may be agreed by Parente Randolph, which may
require a separate written engagement letter);
h. assist and advise the Committee in its analysis of the
Debtor's hypothetical liquidation analyses under various
scenarios;
i. if necessary, assist and advise the Committee in identifying
and qualifying potential asset purchasers and potential
replacement operators;
j. assist and advise the Committee in other services, including
but not limited to, other bankruptcy, reorganization, and
related litigation support efforts, tax services, valuation
assistance, corporate finance, M&A advice, compensation and
benefits consulting, or other specialized services as may be
requested by the Committee and agreed to by Parente
Randolph, which may require separate written engagement
letters; and
k. provide other services as requested by the Committee or its
counsel from time to time and agreed to by Parente Randolph.
Howard S. Cohen, CPA, CFE, a principal at Parente Randolph, LLC,
disclosed that the Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Principals/Directors $300 - $415
Managers/Senior Associates $175 - $315
Staff $100 - $175
Paraprofessional $80 - $100
Mr. Cohen assured the Court that the Firm neither holds nor
represents any interest adverse to the Debtor or its estate and is
disinterested as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in Oakland, Maryland, Buffalo Coal Company, Inc., is
engaged in coal mining and processing services. The company filed
for chapter 11 protection on May 5, 2006 (Bankr. N.D. W.Va. Case
No. 06-00366). David A Hoyer, Esq., at Hoyer, Hoyer & Smith,
PLLC, represents the Debtor in its restructuring efforts. Thorp
Reed and Armstrong, LLP, represents Buffalo Coal's Official
Committee of Unsecured Creditors. When the Debtor filed for
protection from its creditors, it listed total assets of
$119,323,183 and total debts of $105,887,321.
CALPINE CORP: Court Approves Lenczner Slaght as Canadian Counsel
----------------------------------------------------------------
Calpine Corp. and its debtor-affiliates obtained authority from
the U.S. Bankruptcy Court for the Southern District of New York to
employ Lenczner Slaght Royce Smith Griffin, LLP, as their Canadian
counsel, nunc pro tunc to June 7, 2006.
On Dec. 20, 2005, Madam Justice B.E.C. Romaine of the Court
of Queen's Bench of Alberta declared that the Companies'
Creditors Arrangement Act applied to each of Calpine Canada
Energy Limited, Calpine Canada Power Ltd., Calpine Canada Energy
Finance ULC, Calpine Energy Services Canada Ltd., Calpine Canada
Resources Company, Calpine Canada Power Services Ltd., Calpine
Canda Energy Finance II ULC, Calpine Natural Gas Services
Limited, and 3094479 Nova Scotia Company.
Lenczner Slaght will:
(a) advise the Debtors and assist the U.S. Debtors' bankruptcy
and reorganization counsel in connection with issues of
Canadian bankruptcy law;
(b) represent the Debtors in the Canadian Proceedings; and
(c) represent the Debtors in the litigation pending in Canada.
The Debtors will pay Lenczner Slaght according to the firm's
customary hourly rates:
Professional Hourly Rate
------------ -----------
Partners CN$475 to CN$750
Associates CN$300 to CN$500
Paraprofessionals CN$125 to CN$225
These professionals will have primary responsibility in providing
services to the Debtors:
Professional Hourly Rate
------------ -----------
Peter Griffin, Esq. CN$700
Peter Osborn, Esq. CN$625
Monique Jilesen, Esq. CN$475
Pinta Maguire, Esq. CN$300
The Debtors will also reimburse all necessary out-of-pocket
expenses Lenczner Slaght will incur.
Peter Griffin, Esq., a senior partner at Lenczner Slaght Royce
Smith Griffin, LLP, in Toronto, Ontario, assures the Court that
his firm does not represent any interest adverse to the Debtors
and their estates, and is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.
About Calpine Corp.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.
The Company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts. Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities. (Calpine Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
CALPINE CORP: Can Transfer FT Contract Rights to Coral Energy
-------------------------------------------------------------
The Hon. Burton R. Lifland of the U.S. Bankruptcy Court for the
Southern District of New York authorized Calpine Corp. and its
debtor-affiliates to transfer their rights, benefits and
privileges in the Firm Transportation Contract to Coral Energy,
free and clear of all liens, claims, interests and encumbrances.
All objections to the Sale Motion that have not been withdrawn or
settled are deemed overruled.
The Court directs all persons and entities that are in possession
of some of Sale Assets on the Closing Date to surrender the
Assets to Coral Energy.
As reported in the Troubled Company Reporter on July 26, 2006,
Rumford Power Associates Limited owned certain real property in
Rumford, Maine. Rumford Power is also a party to certain Leases
related to a gas-fired combined cycle electric generating
facility. Under the Leases, Rumford Power leased its real
property to PMCC Calpine New England Investment, LLC, who owned
the Power Plant, and subleased the same property and leased the
Power Plant back to Rumford Power.
Rumford Power attempted to reject the Leases. On June 8, 2006,
the Court approved the Transition Agreement between Rumford Power
Associates Limited, James A. Goodman, the receiver of PMCC, and
the U.S. Bank National Association, as trustee.
Pursuant to the Transition Agreement, Rumford Power transferred
and surrendered possession of its rights under certain contracts.
The contracts not listed in the Transition Agreement remained the
property of Rumford Power.
Among the contracts not included in the Transition Agreement was a
Firm Transportation Service Contract, dated Jan. 7, 2000, between
Rumford Power and TransCanada Pipelines Limited. Under the FT
Contract, which expires at the end of October 2010, TransCanada
transports 46,403 gigajoules of natural gas daily.
Since Rumford Power is no longer operating the Rumford Power
Plant, it has no further need for the firm transportation capacity
from TransCanada, Bennett L. Spiegel, Esq., at Kirkland & Ellis
LLP, in New York, contends. The FT Contract is a drain on Rumford
Power's estate, Mr. Spiegel adds, as Rumford Power incurs
approximately CDN$521,000 per month of firm demand charges under
the FT Contract.
However, while Rumford Power no longer requires natural gas
transportation from TransCanada, third parties may still be able
to derive significant value from the firm transportation capacity
provided under the FT Contract, Mr. Spiegel says.
After examining all of their alternatives, the Debtors concluded
that a prompt sale of the FT Contract is in the best interests of
Rumford Power's creditors and estate, and will maximize the value
received for the Assets.
Before the consummation of an Asset Purchase Agreement and the
Sale of the FT Contract, Rumford Power intends to assume the FT
Contract and pay its cure amount. The assumption and assignment
of the FT Contract is a precondition to the effectiveness of the
APA, Mr. Spiegel says.
US Bank Objects
U.S. Bank National Association, as successor-in-interest to State
Street Bank and Trust Company of Connecticut, National
Association, serves as Indenture Trustee and Pass Through Trustee
in connection with the leveraged lease financing of two gas-fired
combined cycle electric generating facilities in Tiverton, Rhode
Island and in Rumford, Maine.
U.S. Bank asserts claim in excess of $250,000,000 against Rumford
Power Associates Limited Partnership as a result of Rumford
Power's defaults and breaches under certain operative documents.
Anne H. Pak, Esq., at Ropes & Gray, LLP, in New York, tells the
Court that as a substantial creditor, U.S. Bank is concerned that
the Debtors seek to sell a potentially valuable asset of Rumford
Power Associates Limited for $1. U.S. Bank was informed from a
telephone call of the Debtors' counsel and the Official Committee
of Unsecured Creditors that the single bid proposed to purchase
the Firm Transportation Contract for $1.
A sale of the FT Contract for a dollar simply does not appear to
be appropriate and in the interests of Rumford Power's creditors,
Ms. Pak contends.
Ms. Pak asserts that alternatives to a sale should be actively
discussed and considered. If the original value analysis of more
than $20,000,000 for the FT Contract was incorrect, the degree of
the discrepancy raises a larger issue, namely, whether Rumford
Power's creditors are being given any careful consideration from
the Debtors' estates at large, Ms. Pak says.
Furthermore, Ms. Pak asserts, fiduciaries of Rumford Power should
explain:
(a) whether the initial valuation was grossly inaccurate; or
(b) how it is in the best interest of Rumford Power to sell
the FT Contract at a massive discount, rather than
undertake to realize that value through possible
alternatives.
US Bank asks the Court to continue the hearing on the Debtors'
request on Sept. 13, 2006, to give it adequate time to prepare for
an evidentiary hearing.
Rumford Power & TransCanada Stipulate
Before the consummation of the Sale Transaction, Rumford Power
intends to assume the FT Contract and ensure that any applicable
default cure payments on the FT Contract will be paid. Rumford
Power intends to assign the FT Contract to Coral Energy Canada,
Inc.
Accordingly, Rumford Power and TransCanada Pipelines Limited
stipulate that:
(a) Conditions precedent to the closing of the Sale
Transaction and the effectiveness of the Purchase
Agreement are:
-- TransCanada's approval of the creditworthiness of Coral
Energy in accordance with the TransCanada
Transportation Tariff; and
-- the posting of assurances by Coral Energy in accordance
with the TransCanada Transportation Tariff;
(b) Rumford Power and TransCanada will immediately enter into
an assignment agreement with Coral Energy;
(c) The execution of the Assignment Agreement by Coral Energy
will be a condition precedent to the effectiveness of the
Purchase Agreement;
(d) Payments of firm demand and other charges payable under
the FT Contract due and payable for all periods before
July 1, 2006, have been paid in full;
(e) Payments of firm demand and other charges payable under
the FT Contract for July and August 2006 service and
resolution of Cumulative Variances will be made in
accordance with the TransCanada Transportation Tariff;
(f) If the closing of the Sale Transaction occurs after
Sept. 1, 2006, payments of firm demand and other
charges payable under the FT Contract for September 2006
service and resolution of Cumulative Variances will be
made in accordance with the TransCanada Transportation
Tariff;
(g) Rumford Power is not in default under the FT Contract;
(h) TransCanada will return all collateral and letter of
credit rights issued by the Debtors pursuant to the FT
Contract immediately after Rumford Power's payment of the
Outstanding Amounts Payable;
(g) If the Outstanding Amounts Payable is not timely paid,
TransCanada will have the right to draw on and apply all
assurances it holds related to the FT Contract to the
extent of the Outstanding Amounts Payable, including
interest pursuant to the TransCanada Transportation
Tariff, without further Court order; and
(h) TransCanada consents to the assignment of the FT Contract
rights to Coral Energy.
Court Rulings
Rumford Power's payment of the applicable Cure Amounts will:
(a) effect a cure of all defaults existing under the FT
Contract as of the Closing Date;
(b) compensate for any actual pecuniary loss to the non-Debtor
party resulting from the default; and
(c) constitute adequate assurance of future performance.
After the payment of the relevant Cure Amounts and the
"Outstanding Accounts Payable," neither Rumford Power nor Coral
Energy will have any further liabilities to the non-Debtor
parties to the FT Contract other than Coral Energy's obligations
that become due and payable on or after the Closing Date.
The Court rules that there will be no rent accelerations,
assignment fee increases or any other fees charged to Coral
Energy or Rumford Power as a result of the assumption and
assignment of the FT Contract.
All parties are enjoined from commencing or continuing any
action, whether law or equity, in any judicial, administrative,
arbitral or other proceeding against Coral Energy.
Coral Energy will pay $1 for the FT Contract.
A copy of the Coral Energy Asset Purchase Agreement is available
for free at http://ResearchArchives.com/t/s?112c
About Calpine Corp.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.
The Company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts. Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities. (Calpine Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
CATHOLIC CHURCH: Tort Panel Wants Portland Claim Estimation Denied
------------------------------------------------------------------
The Official Committee of Tort Claimants appointed in the Chapter
11 case of the Archdiocese of Portland in Oregon asks the U.S.
Bankruptcy Court for the District of Oregon to deny Portland's
request for claims estimation, except as it relates solely to plan
confirmation and temporary allowance for voting on a plan.
Albert N. Kennedy, Esq., at Tonkon Torp, LLP, in Portland,
Oregon, contends that the Archdiocese seeks to have the
Bankruptcy Court cap its liability for future child sex abuse tort
claims in the same manner in which it previously sought to have
Judge Perris cap its liability for unresolved present child sex
abuse tort claims.
Mr. Kennedy says Judge Perris properly held in February 2006 that
she does not have the jurisdiction to estimate Present Claims for
distribution purposes, hence, the Court should hold the same with
respect to Future Claims.
Mr. Kennedy notes that in November 2005, the Archdiocese asked the
Bankruptcy Court to estimate the Present Claims not only for
voting and plan confirmation purposes but also for distribution
purposes, creating a cap the tort liability for Present Claims.
The Bankruptcy Court properly held that any estimation for those
purposes must be performed by the U.S. District Court for the
District of Oregon pursuant to Section 157(b)(2)(B) and (c) of the
Judiciary and Judicial Procedures Code.
Moreover, to the extent Portland is asking the Bankruptcy Court to
refer the matter to the District Court for estimation, the Tort
Committee asks Judge Perris to decline to do so as it would serve
no purpose under the circumstances of the bankruptcy case and
would only cause additional delay and expense.
There is nothing to be gained from having the District Court go
through the process of estimating Future Claims, Mr. Kennedy
asserts. The Fifth Amendment prohibition against deprivation of
life, liberty or property without due process of law applies in
bankruptcy proceedings. Tort causes of action are a species of
property rights that are protected by the Fifth Amendment.
Given the Fifth Amendment, Mr. Kennedy argues that the estimate
could not be used to cap the Archdiocese's liability because it
would be impossible for the District Court to provide Future
Claimants with constitutionally adequate notice and opportunity to
be heard before depriving them of their property rights.
Moreover, the Archdiocese is solvent, so confirming a plan
containing a liability cap would violate the absolute priority
rule of Section 1129(b)(2)(B) of the Bankruptcy Code and the more
general "fair and equitable" requirement of Section 1129(b)(1),
Mr. Kennedy points out.
Establishing a liability cap would violate the Future Claimants'
rights to jury trials, Mr. Kennedy further contends. In addition,
the Archdiocese's proposed estimation could eviscerate Future
Claimants' statutory rights to jury trials of their tort claims
against Portland.
Congress has expressly provided that bankruptcy does not affect an
individual's right to trial by jury under applicable non-
bankruptcy law in connection with a personal injury claim,
Mr. Kennedy notes.
Mr. Kennedy relates that the bankruptcy court in In re Dow
Corning Corp., 211 B.R. 545, 570 (Bankr.11 E.D. Mich. 1997),
recognized that the estimation of personal injury claims "cut[s]
the heart out of a claimant's right to a jury trial," because
there is no reason to liquidate a claim at trial once the estate
pays the estimated claim and the funds of the estate have been
disbursed.
In Portland's case, the infringement on Future Claimants' rights
to trials by jury could be even more severe than the Dow Corning
court envisioned -- some Future Claimants could find no funds
remaining in the claims resolution facility to pay their claims,
Mr. Kennedy asserts. The proposed estimation will strip Future
Claimants of any meaningful right to a trial by jury, he adds.
With respect to the absolute priority rule and the "fair and
equitable" requirement of Section 1129(b), Mr. Kennedy maintains
it is more efficient for the Bankruptcy Court to consider those
requirements now than to wait until confirmation of Portland's
reorganization plan calls for the funding of a CRF that will not
necessarily be able to pay the full value of Future Claims.
"There is no reason for the District Court to go through the
exercise of estimating claims if the [Bankruptcy] Court will
ultimately be unable to use the estimate for distribution
purposes," Mr. Kennedy says.
* * *
Judge Perris conducted a hearing to consider the Archdiocese's
request on Aug. 31, 2006. The Court directs the Archdiocese to
file its reply brief on the matter on Oct. 10, 2006.
The Court will continue the hearing to Oct. 25, 2006, at 9:30
a.m.
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers. David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case. In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities. (Catholic Church Bankruptcy News,
Issue No. 67; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: Panel's Production of Docs. Request Can Be Reset
-----------------------------------------------------------------
In separate requests, the Official Committee for Tort Claimants
and certain tort claimants represented by Michael S. Morey, Esq.,
ask the U.S. Bankruptcy Court for the District of Oregon to direct
the Archdiocese of Portland in Oregon to produce for inspection
and copying, transcripts of all depositions, deposition
videotapes, and related exhibits taken with respect to any witness
in the pending litigation between the Archdiocese of Portland in
Oregon and their insurers.
The Court held a hearing on the Tort Committee's and the Tort
Claimants' requests on Aug. 31, 2006.
Judge Perris clarifies that nothing in the Protective Order in the
insurance adversary proceedings prevents a court from ordering
discovery as allowed by applicable laws or rules.
The Court rules that questions regarding privilege and possible
waiver of any privilege will be raised in the court presiding over
the claim in which discovery is sought.
Judge Perris says the Tort Committee's request for production of
documents can be reset once the Archdiocese has filed a request to
settle insurance claims.
Judge Perris directs Erin K. Olson, Esq., to prepare the order.
(A) Tort Committee
Albert N. Kennedy, Esq., at Tonkon Torp, LLP, in Portland,
Oregon, points out that the Archdiocese's claims against its
insurance carriers may be the most valuable asset of the
bankruptcy estate. In March 2006, the Archdiocese's insurance
counsel represented to the Court that Portland's insurance claims:
* on account of settled claims are approximately $30,000,000;
and
* could have a value between $70,000,000 and $80,000,000.
Mr. Kennedy relates that the Tort Committee's counsel met with the
representatives of the Archdiocese and ACE USA, Inc., on July 5,
2006, wherein Portland presented an outline of a proposed
settlement with ACE.
Based on the information given during the meeting, Mr. Kennedy
says it appears that Portland may intend to settle with ACE at a
deep discount from the Insurer's potential exposure. The
principal reason for the discount was for the "expected and
intended" defense asserted by ACE.
The Tort Committee subsequently asked Portland for information to
enable the Committee to analyze ACE's claims and defenses, but
received no response, Mr. Kennedy tells the Court. The Tort
Committee is now informed that Portland is engaged in mediation
with certain insurers.
Without that information, the Tort Committee cannot discharge its
obligations to claimants and make judgments with respect to
insurance coverage and potential settlements relating to insurance
coverage, Mr. Kennedy explains. In particular, the Tort Committee
needs information relating to the defenses of the insurance
carriers, including the "expected and intended" defenses.
The Tort Committee believes that a review of depositions and
exhibits may be the most efficient and expeditious manner in which
it can obtain the information that it needs to analyze insurance
coverage issues.
(B) Morey Claimants
Mr. Morey asserts that he needs the deposition records in
preparation for the trials of his clients T.B., A.E., and Patrick
Fihn against the Archdiocese scheduled in January 2007 before the
U.S. District Court for the District of Oregon. The cases involve
sexual abuse committed by former Father Thomas Laughlin.
Mr. Morey relates that he participated in the depositions of
witnesses in the insurance litigation. In the depositions, the
primary questions asked of the witnesses were with respect to
notice, knowledge and information of what the Archdiocese and
their personnel knew about the sexual abuse of children by Father
Laughlin, and when they knew it.
Mr. Morey tells Judge Perris that the questions that were asked in
the insurance litigation deposition were essentially identical to
the questions he would ask of the Archdiocese personnel in the
depositions relating to T.B., A.E., and Patrick Fihn.
Notice and knowledge to the Archdiocese that children were being
sexually abused or that priests were engaging in sexually
inappropriate behavior is directly relevant to both notice and
knowledge under direct negligence, respondeat superior, and also
for punitive damages, Mr. Morey asserts.
Mr. Morey says he inquired from the Archdiocese's counsel, Thomas
Dulcich, Esq., at Schwabe, Williamson & Wyatt, PC, in Portland,
Oregon, and certain attorneys for the insurers, about the names of
any witnesses that had been deposed, or the number of witnesses
that had been deposed, but both parties did not provide any
answer.
Mr. Morey expects that many of the witnesses are exactly the same
witnesses that have already been deposed in the insurance
litigation. The insurers' counsel has conducted numerous
depositions of witnesses whose testimony are relevant to the
claims of the insurers in the insurance litigation, and relevant
in the tort litigation.
Production of the depositions will expedite subsequent
depositions, in that the some factual inquiries will not have to
be extensively covered again, Mr. Morey says.
(C) C.B.
Claimant C.B. supports the arguments asserted by the Morey
Claimants.
Representing C.B., Erin K. Olson, Esq., in Portland, Oregon,
relates that the Archdiocese presented as evidence in C.B.'s case
portions of a transcript of a videotaped deposition of Fr.
Vincent Cunniff taken on February 3, 2006, in the insurance
litigation.
Ms. Olson says she asked for a copy of the entire transcript, but
the Archdiocese refused.
According to Ms. Olson, Fr. Cunniff is a key witness in C.B.'s
case against the Archdiocese. From 1969 to 1970, Fr. Cunniff was
presented with information by a boy that Fr. Maurice Grammond had
abused him. Fr. Cunniff presented the information personally to
then Archbishop Dwyer, who later arranged to meet with the boy,
but thereafter took no meaningful action to prevent Fr. Grammond
from continuing his practice of pedophilia, leading to the abuse
of C.B.
Ms. Olson adds that she is aware that insurers intended to take
the deposition of Fr. Gregory Gage, a critical notice witness in
the cases involving Fr. Thomas Laughlin, whose warning to the
Archbishop Dwyer about Fr. Laughlin's sexual molestation of boys
was similarly ignored.
The Archdiocese refused to provide Fr. Cunniff's deposition
transcript and those of other relevant witnesses because of a
protective order in the insurance adversaries, which limits
distribution of the evidence, Ms. Olson tells the Court.
Ms. Olson asserts that the Protective Order should not be used to
prevent C.B. and other tort claimants from having access to
materials indisputably discoverable in their own cases or claims.
"Statements of witnesses, taken under oath, are discoverable. No
privilege applies to the deposition transcripts of the witnesses
deposed in the insurance adversaries," Ms. Olson contends.
The Archdiocese's refusal to even identify the witnesses whose
depositions have been taken in the insurance adversaries defies
Rule 26 (a)(1)(a) of the Federal Rules of Civil Procedure, she
points out.
C.B., therefore, asks the Court to:
(a) modify the Protective Order in Portland's Chapter 11 case
and in the insurance adversaries to permit tort claimants'
counsel to obtain copies of the transcripts, exhibits, and
videos taken in the insurance adversaries;
(b) direct Portland to produce a list of witnesses deposed in
the insurance litigation along with the identity of the
court reporter and videographer who took the deposition;
and
(c) notify the Bankruptcy Court's reporters that the tort
claimants' counsel may obtain copies of the transcripts,
videos, and any exhibits entered during the depositions on
payment of the applicable cost.
Portland Objects
The deposition transcripts and exhibits sought by the Tort
Committee and the Tort Claimants are not subject to disclosure
because they are confidential and privileged, Teresa H. Pearson,
Esq., at Miller Nash LLP, in Portland, Oregon, informs Judge
Perris.
For many years, the Archdiocese and the Insurers have exchanged
documents as part of their common interest in defending tort
claims, Ms. Pearson relates. These documents are privileged and
not subject to disclosure to the Tort Claimants or the Tort
Committee.
"This common interest shared by the Archdiocese and the Insurers
remains in spite of the coverage disputes," Ms. Pearson points
out. "The parties who have taken depositions in the insurance
adversary proceedings are under the protection of protective
orders to preserve this common interest."
There are various contractual and common-law rights between the
Archdiocese and the Insurers, which preclude the production of the
depositions to the Tort Claimants and the Tort Committee,
Ms. Pearson adds.
Ms. Pearson relates that Judge Perris already denied in 2004 the
Tort Committee's request to intervene in the insurance adversary
proceedings. "The Tort Claimants should not be able to evade the
Court's ruling on the motion to intervene by seeking production of
these depositions in the main bankruptcy case."
Moreover, the Tort Claimants have cited no legal authority in
support of their motions, Ms. Pearson notes.
Given the importance of the issues raised by the Motions, the
Archdiocese asks Judge Perris to set a briefing schedule so that
the parties can have adequate time and opportunity to present
their respective legal positions.
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers. David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case. In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities. (Catholic Church Bankruptcy News,
Issue No. 67; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CHEMDESIGN CORP: Wants Godfrey & Kahn as Bankruptcy Counsel
-----------------------------------------------------------
Chemdesign Corporation asks the U.S. Bankruptcy Court for the
Eastern District of Wisconsin for permission to employ Godfrey &
Kahn, S.C., as its bankruptcy counsel.
Godfrey & Kahn will:
a) advise the Debtor of its rights, powers and duties as
debtor and debtor-in-possession;
b) advise the Debtor concerning, and assisting in the
negotiation and documentation of financing agreements, debt
restructurings, cash collateral arrangements, debtor in
possession financing, and related transactions;
c) review the nature and validity of liens asserted against
the property of the Debtor and advising the Debtor
concerning the enforceability of such liens;
d) advise the Debtor concerning the actions that it might take
to collect and to recover property for the benefit of the
Debtor's estate;
e) prepare on behalf of the Debtor all necessary and
appropriate applications, motions, pleadings, draft orders,
notices, schedules and other documents, and reviewing all
financial and other reports to be filed in the Debtor's
Chapter 11 Case;
f) advise the Debtor concerning, and preparing responses to,
applications, motions, pleadings, notices and other papers
that may be filed and served in this Chapter 11 Case;
g) counsel the Debtor in connection with the formulation,
negotiation and promulgation of a plan of reorganization
and related documents;
h) counsel the Debtor in connection with any sales out of the
ordinary course of business under Section 363 of the
Bankruptcy Code; and
i) perform all other legal services for and on behalf of the
Debtor that may be necessary or appropriate in the
administration of its Chapter 11 Case and the
reorganization of the Debtor's business, including advising
and assisting the Debtor with
respect to debt restructurings, stock or asset
dispositions, claim analysis and disputes, and legal issues
involving general corporate, bankruptcy, labor,
environmental, employee benefits, securities, tax, finance,
real estate and litigation matters.
The Debtor tells the Court that the firm estimates that their fees
for this engagement may range between $90,000 and $140,000. The
Debtor discloses that the firm's professionals bill:
Professional Hourly Rate
------------ -----------
Shareholders $190 - $450
Associates/Special Counsel $145 - $275
Paralegals $80 - $160
The Debtor further discloses that the professionals and
paraprofessionals who are expected to render services in its
chapter 11 case bill:
Professional Designation Hourly Rate
------------ ----------- -----------
Timothy F. Nixon, Esq. Shareholder $350
Christopher Stroebel, Esq. Associate $250
Marie L. Nienhuis, Esq. Special Counsel $275
Gale Raiche Paralegal $130
Mary Roufus Paralegal $120
To the best of the Debtor's knowledge, Godfrey & Kahn does not
hold or represent any interest adverse to the Debtor or its
estates.
The firm's attorneys can be reached at:
Godfrey & Kahn S.C.
780 North Water Street
Milwaukee, Wisconsin 53202-3590
Tel: (414) 273-3500
Fax: (414) 273-5198
http://www.gklaw.com/
Headquartered in Fitchburg, Massachusetts, ChemDesign Corporation
-- http://www.chemdesigncorp.com/-- is a custom manufacturer of
various fine organic chemicals for paper products, electronics,
agricultural products and other materials. The Debtor filed for
chapter 11 protection on Aug. 27, 2006 (Bankr. E.D. Wis. Case No.
06-24729. When the Debtor filed for protection from its
creditors, it estimated assets and debts between $10 million and
$50 million.
CHI-CHI'S: Court Approves Dunbar Adversary Proceeding Settlement
----------------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware approved the compromise and settlement of the
Adversary Proceeding between The Dunbar Armored, Inc., and William
Kaye, the Liquidating Trustee for the Liquidating Trust
established pursuant to Chi-Chi's, Inc., and its debtor-
affiliates' confirmed plan of reorganization.
The Official Committee of Unsecured Creditors, on behalf of the
estates of Chi-Chi's commenced Oct. 6, 2005, adversary proceeding
no. 05-52979.
The complaint alleged that Dunbar received preferential and
fraudulent transfers from:
-- Koo Koo Roo, Inc.,
-- Chi-Chi's, Inc., and
-- The Hamlet Debtors, H.H.K. of Virginia and H.H.K. of
Maryland.
Under the December 2005 order of the Bankruptcy Court, the
Liquidating Trust was substituted as plaintiff in the complaint.
The Liquidating Trustee and Dunbar have negotiated and agreed a
settlement, which provides for the payment of a certain amount in
exchange for the dismissal of the Adversary Proceeding.
The Dunbar Settlement Agreement is filed under seal to preserve
confidentiality. The settlement amount is not known.
Headquartered in Irvine California, Chi-Chi's, Inc., is a direct
or indirect operating subsidiary of Prandium and FRI-MRD
Corporation and each engages in the restaurant business. The
Debtors filed for chapter 11 protection on October 8, 2003 (Bankr.
Del. Case No. 03-13063-CGC). Bruce Grohsgal, Esq., Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., and Sandra Gail McLamb,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.,
represent the Debtors. Lawyers at Jaspan Schlesinger Hoffman LLP,
represent the Official Committee of Unsecured Creditors.
The Court confirmed the Debtors' First Amended Plan of Liquidation
on Dec. 15, 2005. The Plan became effective on Dec. 27, 2005.
The Chi-Chi's Liquidating Trust was created under the Plan as the
Debtors' successor-in-interest. William Kaye was appointed at
trustee for the Liquidating Trust. When the Debtor filed for
bankruptcy, it estimated $50 to $100 million in assets and more
than $100 million in liabilities.
CHI-CHI'S: William Kaye Has Until Nov. 22 to Object to Claims
-------------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware extended until Nov. 22, 2006, the time within
which William Kaye, the Liquidating Trustee for the Liquidating
Trust established pursuant to Chi-Chi's, Inc., and its debtor-
affiliates' confirmed plan of reorganization, to file objections
to claims.
As reported in the Troubled Company Reporter on Aug. 1, 2006, Mr.
Kaye believed that the extension is necessary to save judicial
resources and avoid litigation of disputed claims that can be
resolved through negotiation.
Headquartered in Irvine California, Chi-Chi's, Inc., is a direct
or indirect operating subsidiary of Prandium and FRI-MRD
Corporation and each engages in the restaurant business. The
Debtors filed for chapter 11 protection on October 8, 2003 (Bankr.
Del. Case No. 03-13063-CGC). Bruce Grohsgal, Esq., Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., and Sandra Gail McLamb,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.,
represent the Debtors. Lawyers at Jaspan Schlesinger Hoffman LLP,
represent the Official Committee of Unsecured Creditors.
The Court confirmed the Debtors' First Amended Plan of Liquidation
on Dec. 15, 2005. The Plan became effective on Dec. 27, 2005.
The Chi-Chi's Liquidating Trust was created under the Plan as the
Debtors' successor-in-interest. William Kaye was appointed at
trustee for the Liquidating Trust. When the Debtor filed for
bankruptcy, it estimated $50 to $100 million in assets and more
than $100 million in liabilities.
CINEMARK USA: Moody's Rates Senior Secured Facility at Ba2
----------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to the proposed
senior secured bank facility of Cinemark USA, Inc., a wholly owned
subsidiary of Cinemark, Inc. Cinemark plans to use the
facility to fund the acquisition of Century Theatres, Inc. and
to refinance existing Century bank debt.
Moody's also affirmed Cinemark's B1 corporate family rating, which
can sustain the less than one turn increase in leverage that
Moody's anticipates will result from the proposed transaction, as
well as all other existing ratings for
Cinemark and Cinemark USA, Inc.
The proposed facility consists of a $150 million revolving credit
facility and a $1,120 million term loan, and Moody's estimates the
acquisition will result in incremental debt of approximately $500
million as well as the assumption of Century's existing debt.
The outlook remains stable, and a summary of actions.
Cinemark USA, Inc.
* Senior Secured Bank Credit Facility, Assigned Ba2
* Affirmed B3 Senior Subordinate Notes Rating
Cinemark, Inc.
* Affirmed B1 Corporate Family Rating
* Affirmed Caa1 Senior Unsecured Notes Rating
Moody's also affirmed Century's Ba3 corporate family rating
and its Ba3 senior secured bank rating. Should the transaction
proceed as planned, Moody's will withdraw Century's ratings and
the ratings on the existing bank facility at Cinemark USA, Inc.
Moody's estimates Cinemark leverage pro forma for the transaction
will be in the mid 6 times range. The affirmation of the B1
corporate family rating incorporates Moody's analysis of the
combined company. The B1 corporate family rating reflects high
leverage, sensitivity to product from movie studios, and a weak
industry growth profile, offset by expectations for continued
positive free cash flow and the advantages of scale and geographic
diversity. Modest upside cash flow benefits
from increased advertising also support the rating.
Cinemark, Inc. operates approximately 300 theaters and 3,300
screens in North America, Latin America, and South America through
its Cinemark USA, Inc. and other subsidiaries. One
of the largest motion picture exhibitors in North America with
annual revenue of approximately $1 billion, the company maintains
its headquarters in Plano, Texas. Century Theatres, Inc. operates
approximately 80 theaters with 1,000 screens located primarily in
the western half of the United States. The company maintains its
headquarters in San Rafael, California, and its annual revenue is
approximately $500 million.
CIT HOME: S&P Downgrades Class BF Debt's Rating to B from BB
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on
class BF from CIT Home Equity Loan Trust 2002-1 to 'B' from
'BB'. The rating remains on CreditWatch with negative
implications, where it was placed March 23, 2006.
At the same time, the ratings on 24 other classes from three
CIT Home Equity Loan Trust transactions, including series
2002-1, were affirmed.
The lowered rating is based on performance that has allowed
monthly losses to consistently outpace monthly excess interest,
causing overcollateralization to fall below its target ($2.49
million currently, versus a target of $5.28 million).
In addition, loss projections indicate that this trend could
continue and further erode credit support to this class. As of
the July 2006 distribution date, cumulative losses were 3.32% of
the original pool balance. Also, delinquencies were 25.46% of the
current pool balance, and 90-plus-day delinquencies were 16.31%.
Standard & Poor's will closely monitor the performance of this
transaction. If monthly realized losses decline to a point where
they no longer outpace monthly excess interest, and the level of
overcollateralization has not been further eroded, Standard &
Poor's will affirm the rating on this class and remove it from
CreditWatch.
Conversely, if losses continue to outpace excess interest, and the
level of overcollateralization continues to decline, the rating
will take further negative rating actions on this class.
The rating affirmations are based on the shifting interest
structure of each transaction, which has allowed subordination
levels to grow to a level that sufficiently supports the current
ratings, despite the poor performance of the pools. Credit
support for these transactions, which were originated in 2002 and
2003, is provided by subordination, overcollateralization, and
excess interest.
As of the July distribution date, total delinquencies for the
transactions with affirmed ratings ranged from 15.49% (series
2003-1) to 49.69 (series 2002-1, group 2). Serious delinquencies
ranged from 9.18% (series 2003-1) to 33.24% (series 2002-1, group
2), and cumulative losses ranged from 1.39% (series 2003-1) to
3.32% (series 2002-1, group 1).
Each pool is backed by fixed- and adjustable-rate subprime
mortgage loans secured by first- and second-liens on owner-
occupied, one- to four-family residences.
Rating Lowered and Remaining on Creditwatch Negative:
CIT Home Equity Loan Trust
Series Class To From
------ ----- -- ----
2002-1 BF B/Watch Neg. BB/Watch Neg.
Ratings Affirmed:
CIT Home Equity Loan Trust
Series Class Rating
------ ----- ------
2002-1 AF-4, AF-5, AF-6, AF-7 AAA
2002-1 AV AAA
2002-1 MV-1 AA+
2002-1 MF-1 AA
2002-1 MF-2, MV-2 A
2002-1 BV BBB
2002-2 AF, AV AAA
2002-2 MF-1, MV-1 AA
2002-2 MF-2, MV-2 A
2002-2 BF, BV BBB
2003-1 A-4, A-5, A-6 AAA
2003-1 M-1 AA
2003-1 M-2 A
2003-1 B BBB
COLLINS & AIKMAN: Ct. OKs Additional Stipulation on Collateral Use
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
approves and additional stipulation between Collins & Aikman
Corporation, its debtor-affiliates and Mayer Textile Machine
Corporation. The additional stipulation provides for the return
of Mayer's collateral in exchange for Mayer waiving its claims.
As reported in the Troubled Company Reporter on Aug. 18, 2006, the
Debtors are winding down their Fabrics Business and production
will cease shortly. Mayer has security interest in the equipment
used in the Fabrics business. Since the Debtors will not need the
Collateral when production ceases, the Collateral will need to be
sold or returned to Mayer.
The Stipulation provides that:
-- the Debtors stipulate to the validity and first priority
of Mayer's liens on the Collateral and the Mayer Claim
Amounts;
-- while the Debtors maintain possession of the Collateral,
(i) the Debtors will maintain the Collateral in reasonably
good working order and will make or seek to make
reasonable repairs,
(ii) the Debtors will keep the Collateral insured, and
(iii) Mayer may inspect and re- the Collateral;
-- the Debtors will provide Mayer with the right to repossess
the Collateral no later than October 1, 2006, at no cost
to the Debtors, and unless Mayer elects not to repossess
the Collateral, the Debtors will not sell, transfer, lease
or otherwise dispose of any of the Collateral without
Mayer's prior written consent;
-- if Mayer repossesses the Collateral, adequate protection
payments by the Debtors to Mayer will cease and Mayer will
waive any claim against the Debtors;
-- if Mayer elects not to repossess the Collateral and the
Debtors sell the Collateral, Mayer will be:
(a) allowed to credit bid, and
(b) entitled to a right of first refusal for an amount no
less than such offer;
-- if Mayer does not repossess the Collateral, Mayer will
retain its claims against the Debtors, which will be
allowed in accordance with Section 506 of the Bankruptcy
Code. If the Collateral is sold, all proceeds -- net of
reasonable expenses of the sale -- up to the amount of the
Mayer Claim Amounts will be turned over to Mayer and
applied against Mayer's claim; and
-- in no event will Mayer be liable for any excise, sales and
other taxes or charges relating to the Collateral for any
period that the Debtors had possession of the Collateral.
The Court has previously approved a stipulation between the
Debtors and Mayer regarding the adequate protection of Mayer's
secured claim. The Debtors are required to pay Mayer monthly
adequate protection payments of US$20,000.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 39; Bankruptcy
Creditors' Service, Inc. http://bankrupt.com/newsstand/or
215/945-7000)
COLLINS & AIKMAN: GM Insists Discovery Proposal is Adequate
-----------------------------------------------------------
General Motors Corp. asks the U.S. Bankruptcy Court for the
Eastern District of Michigan to deny Collins & Aikman Corporation,
its debtor-affiliates and the Official Committee of Unsecured
Creditors' request for discovery beyond that provided in a
proposed discovery.
GM is seeking to lift the automatic stay to take possession of
certain tooling in which it asserts an ownership interest. The
Committee filed an objection to that request and the Debtors have
sought to take discovery of GM.
The Debtors, Committee and GM are currently attempting to
negotiate a stipulation with respect to the requested discovery.
However, to protect the interests of the Debtors' unsecured
creditors in the event the parties are unable to resolve issues,
the Committee filed a separate request to take discovery of GM.
GM's Arguments
Scott A. Wolfson, Esq., at Honigman Miller Schwartz and Cohn LLP,
in Detroit, Michigan, GM drafted and circulated to the Debtors and
the Committee several versions of a proposed discovery order in an
attempt to address their concerns. Neither the Debtors nor the
Committee has stipulated to the entry of the order.
GM believes that the proposed order provides for reasonable
discovery opportunities for all parties to the contested matter.
The proposed discovery order provides for a discovery period of
45 days from the date GM files an amended tooling request. The
scope of discovery would be limited to the these issues:
(a) GM's rights in and to the relevant tooling;
(b) the Debtors rights and equity in and to the relevant
tooling;
(c) rights asserted by third parties;
(d) contracts relating to the relevant tooling;
(e) payments GM has made in connection with the relevant
tooling;
(f) the Debtors' possession, custody, and use of the relevant
tooling; and
(g) the location of the relevant tooling.
Mr. Wolfson relates that depositions would be limited to a
maximum of four by each party, and the maximum number of
interrogatories and requests for admission, including subparts,
would be 15.
"[The] Debtors' and the Committee's insistence on discovery
beyond that proposed by GM seeks to deny its right to an
expedited hearing, ignores the limited determination the Court
must make when considering a motion for stay relief, and should
be denied as a matter of law," Mr. Wolfson argues.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 39; Bankruptcy
Creditors' Service, Inc. http://bankrupt.com/newsstand/or
215/945-7000)
COMPLETE RETREATS: Trustee Supplements XRoads Employment Objection
------------------------------------------------------------------
In support of her objection to the retention of XRoads Claims
Management Services LLC as Complete Retreats LLC and its debtor-
affiliates' claims and noticing agent, Diana G. Adams, the
Acting United States Trustee for Region 2, asserts that Xroads'
proposed services go beyond purely administrative functions.
The U.S. Trustee notes that the Debtors seek XCM's assistance in
the preparation of their Schedules of Assets and Liabilities,
Statements of Financial Affairs, initial reporting package, and
their monthly operating reports. XCM's services are those
generally performed by a professional employed pursuant to
Section 327 of the Bankruptcy Code, the U.S. Trustee says.
The Debtors, however, do not seek to employ XCM pursuant to
Section 327, the U.S. Trustee points out. In addition, the
Debtors do not propose to subject XCM's fees and expenses to
Court oversight and review in accordance with Section 330 of the
Bankruptcy Code, similar to the fees and expenses paid to a
professional employed under Section 327.
The U.S. Trustee maintains that to the extent Holly Felder Etlin,
the Debtors' chief restructuring officer, has the right to
contract for XCM, insider and other issues will arise that would
prohibit XCM's employment by the Debtors.
The U.S. Trustee also notes that the Debtors have not provided
information to show that the fees charged by XCM are commercially
reasonable and standard when compared to those of other parties
offering the same or similar services.
The Troubled Company Reporter on Aug. 23, 2006 related that the
U.S. Trustee sought replacement of Xroads as claims agent to
the Debtors, contending that the XCM Application does not:
-- provide information as to whether or not the Debtors tried
to obtain estimates of the costs from competing service
providers;
-- provide information as to whether or not the charges
proposed for XCM's services are commercially reasonable;
and
-- support whether or not XCM's employment is in the best
interests of the Debtors' estates and their creditors.
XCM is an affiliate of XRoads LLC which may be an insider of
the Debtors, the U.S. Trustee noted.
As reported in the Troubled Company Reporter on Aug. 21, 2006,
the Debtors sought permission from the U.S. Bankruptcy Court for
the District of Connecticut to hire XCM as their claims and
noticing agent.
As their claims and noticing agent, the Debtors expect XCM to:
(a) assist the Debtors and their counsel in the preparation
of the Debtors' schedules of assets and liabilities and
statements of financial affairs;
(b) assist the Debtors and their counsel in the preparation
of the initial reporting package for the United States
Trustee;
(c) assist the Debtors and their counsel in preparation of
the Debtors' monthly operating reports;
(d) design, maintain, and administer the Debtors' claims
database;
(e) provide designated users with access to the claims
database to track claims activity, to view claims-related
documents in PDF format, and to create reports;
(f) send out acknowledgement cards to creditors confirming
receipt of their proofs of claim; and
(g) provide copy and notice service consistent with the
applicable local rules and as asked by the Debtors or the
Court, including acting as the official claims agent in
lieu of the Court in:
(1) serving notice to parties-in-interest;
(2) maintaining all proofs of claim and proofs of
interest filed and received in the bankruptcy cases;
(3) docketing the claims;
(4) maintaining and transmitting to the clerk of the
Court the official claims registers;
(5) maintaining current mailing lists of all entities
that have filed claims and notices of appearance it
receives;
(6) providing public access for examination of the claims
at CMS' premises during regular business hours and
without charge; and
(7) recording assignments of claims to third parties and
recording all transfers received by CMS pursuant to
Rule 3001(e) of the Federal Rules of Bankruptcy
Procedure.
The Debtors proposed to pay XCM these hourly rates for its
consulting services:
Professional Hourly Rate
------------ -----------
Director or Managing Director $225 to $325
Consultant or Sr. Consultant $125 to $225
Type of Service Hourly Rate
--------------- -----------
Accounting and Document Management $125 to $195
Programming and Technical Support $125 to $195
Clerical -- data entry $40 to $65
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. Michael J. Reilly, Esq., at Bingham
McCutchen LP in Hartford, Connecticut, serves as counsel to the
Official Committee of Unsecured Creditors. 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. 7; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
COMPLETE RETREATS: Creditors Panel Taps Kramer Capital as Advisor
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Complete Retreats
LLC and its debtor-affiliates' chapter 11 cases asks the U.S.
Bankruptcy Court for the District of Connecticut for permission to
retain Kramer Capital Partners, LLC, as its financial advisor,
nunc pro tunc to Aug. 7, 2006.
Joel S. Lawson III, chair of the Creditors Committee, relates
Kramer is particularly well suited for the type of representation
required by the Committee. The principals and professionals of
Kramer have extensive experience working with financially
troubled entities in complex financial reorganizations, both in
Chapter 11 cases and in out-of-court restructuring situations.
As the Committee's financial advisor, Kramer will:
(a) evaluate the Debtors' assets and liabilities;
(b) analyze the Debtors' financial and operating statements;
(c) analyze the Debtors' business plans and forecasts;
(d) evaluate the Debtors' liquidity, DIP financing, cash
collateral usage and adequate protection, and the
prospects for any exit financing in connection with any
plan of reorganization and any budgets;
(e) provide specific valuation or other financial analyses;
(f) assess the financial issues and options concerning the
sale of the Debtors or their assets and structure a plan
of reorganization; and
(g) provide testimony in Court on the Committee's behalf.
The Debtors will pay Kramer:
(1) a $100,000 monthly advisory fee; and
(2) upon the effective date of a confirmed Chapter 11 plan or
the closing of any other Transaction, a $500,000
transaction fee, payable in either cash or in the
securities or consideration received by the unsecured
creditors of the Debtors.
Kramer will also be reimbursed for its out-of-pocket expenses,
provided that the amount will not exceed $25,000 in the aggregate
for any one monthly period without the prior written consent of
the Committee.
Furthermore, the Debtors will indemnify and will hold harmless
Kramer and its affiliates from and against all losses, claims or
liabilities in connection with Kramer's provision of services to
the Committee or any transactions contemplated.
Derron S. Slonecker, a managing director at Kramer, discloses
that the firm provides services, or has in the past provided
services, to entities, which may be creditors of the Debtors or
have interests adverse to the Debtors or the Committee in matters
unrelated to the Debtors or their bankruptcy cases.
A five-page list of the Interested Parties that Kramer currently
represents in matters unrelated to the Debtors' bankruptcy cases
is available for free at http://researcharchives.com/t/s?1129
Kramer will not be representing any of the Interested Parties in
the Chapter 11 cases, Mr. Slonecker assures the Court. Moreover,
Kramer's representation of the Parties has not resulted in the
firm having knowledge of any facts or information that would
adversely affect the Parties' rights, obligations or treatment in
the bankruptcy cases or in any related proceedings.
Aside from the Interested Parties, Kramer does not hold or
represent any interests materially adverse to those of the
Committee and is disinterested as defined in Section 101(14) of
the Bankruptcy Code, Mr. Slonecker tells the Court.
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. Michael J. Reilly, Esq., at Bingham
McCutchen LP in Hartford, Connecticut, serves as counsel to the
Official Committee of Unsecured Creditors. 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. 7; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
CONSOLIDATED COTTON: No Collateral Surcharge for Ad Valorem Taxes
-----------------------------------------------------------------
Consolidated Cotton Gin Co., Inc., asked for permission under 11
U.S.C. Sec. 506(c) to surcharge collateral securing repayment of
debts to Bradford L. Moore, as Trustee; the Internal Revenue
Service; and Beal Service Corporation to pay these chapter 11
administrative claims:
(1) attorney's fees of Mullin, Hoard & Brown, L.L.P., counsel
for Consolidated Cotton, in the amount of $30,289.96;
(2) accountant's fees of Robinson, Burdette, Martin & Seright,
L.L.P. in the amount of $11,575;
(3) administrative claims in the amount of $18,000 for
materials and services provided by vendors, suppliers, and
other creditors; and
(4) ad valorem taxes in the amount of $47,000.
Consolidated Cotton argued that the expenses were reasonable and
necessary costs and expenses of preserving or disposing of the
estate's property and thus benefited the secured creditors. The
secured creditors each objected to Consolidated Cotton's motion.
The Honorable Robert J. Jones held a hearing and, in his decision
published at 2006 WL 2383282 and 46 Bankr. Ct. Dec. 229, says that
the secured creditors' collateral can be surcharged for all
administrative expenses except the ad valorem taxes. The taxes,
Judge Jones says, did not confer any quantifiable and direct
benefit on a creditor with a security interest in the property,
which is what's required to surcharge a secured creditors'
collateral. Indirect or speculative benefits, Judge Jones says,
may not be surcharged.
Headquartered in Lubbock, Texas, Consolidated Cotton Gin Co.,
Inc. -- http://www.consolidatedcottongin.com/-- manufactured
cotton ginning equipment and machinery. The Company filed for
chapter 11 protection on May 20, 2005 (Bankr. N.D. Tex. Case No.
05-50630). David R. Langston, Esq., at Mullin, Hoard & Brown,
represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated
assets and debts of $1 million to $10 million.
Consolidated Cotton filed its original plan of reorganization and
accompanying disclosure statement on September 17, 2005. The plan
was set for a confirmation hearing on December 8, 2005. The
original plan classified creditors such that Moore was designated
as a first lienholder on substantially all of the assets of the
bankruptcy estate, Beal was recognized as a second lienholder on
the same assets, and the IRS was recognized as holding a third
lien position. The IRS and Beal objected to confirmation of the
original plan and, specifically, to the proposed priority and
classification of their claims. The December 8, 2005 confirmation
hearing was continued.
On December 13, 2005, Consolidated Cotton filed its complaint to
determine the lien priorities against the various assets of the
debtor as among Moore, the IRS, and Beal. The parties resolved
their differences concerning the relative priorities of liens and
the treatment to be accorded them in the plan. These agreements
were incorporated into an Agreed Fifth Cash Collateral Order,
which was entered by the Court on December 29, 2005. Under the
Fifth Cash Collateral Order, Consolidated Cotton was directed to
file and pursue confirmation of a liquidating plan that reflected
the agreed upon lien positions of the respective secured
creditors. Attached to the Fifth Cash Collateral Order were cash
flow projections approved by the secured creditors that
contemplated the debtor's payment of $15,000 in attorney's fees
and $3,600 of accountant's fees for the period from January 1,
2006, to February 16, 2006, the date of the reset confirmation
hearing.
Consolidated Cotton's plan was in fact confirmed at the
confirmation hearing held on February 16, 2006. The plan is a
liquidating plan that provides that Moore, Beal and the IRS are
the only creditors that receive payment (or property) from
liquidation of Consolidated Cotton's assets. Moore is conveyed
the real property consisting of the manufacturing plant and
facilities, all machinery and equipment, and all intellectual
property and other personal property of Consolidated Cotton, as
well as a specific list of inventory constituting approximately
four percent of Consolidated Cotton's inventory. These assets
were estimated in the plan to have a value in excess of $2
million. Beal and the IRS receive, respectively, 16% and 84% of
the net proceeds collected by a liquidating trustee appointed
under the plan from the sale of Consolidated Cotton's inventory
and collection of its accounts receivable. The plan states that
these assets are anticipated to have a liquidation value of
between $1 million and $2 million.
In addition to the conveyance of the manufacturing plant and
facilities to Moore, the plan also provides that Beal will be
conveyed the real property located at 30th Street and Avenue D in
Lubbock, Texas.
CONSTAR INT'L: June 30 Balance Sheet Upside-Down by $42.6 Million
-----------------------------------------------------------------
Constar International Inc.'s balance sheet showed stockholders'
deficit of $42,638,000 from total assets of $540,389,000 and total
liabilities of $583,027,000, at June 30, 2006.
For the three months ended June 30, 2006, the Company earned
$169,000 of net income on net sales of $258,454,000, compared with
a $7,701,000 net loss on net sales of $257,913,000 in the same
period last year.
Full-text copies of the Company's financial statements for the
quarter ended June 30, 2006 are available for free at:
http://researcharchives.com/t/s?112a
Headquartered in Philadelphia, Pennsylvania, Constar International
Inc. -- http://www.constar.net/-- manufactures polyethylene
terephthalate plastic containers for food and beverages market in
the United States and Europe, including bottles and preforms.
COPELANDS' ENTERPRISES: Taps Clear Thinking as Business Advisor
---------------------------------------------------------------
Copelands' Enterprises, Inc., asks the U.S. Bankruptcy Court for
the District of Delaware for permission to employ Clear Thinking
Group, LLC, as its business advisor.
The Debtor discloses that it originally retained Clear Thinking in
July 2006 to provide certain business advisory. The Debtor says
it wishes to continue Clear Thinking's engagement during its
chapter 11 case.
Clear Thinking will:
a. lead and manage the bankruptcy process on a full-time
basis;
b. assist the Debtor in connection with its Chapter 11
bankruptcy filing, including the preparation of the
necessary schedules and budgets;
c. assist in the process of seeking to obtain debtor-in-
possession financing, if required, and
d. assist the Debtor in every step of the bankruptcy
reorganization process, with the goal of obtaining Court
approval of a plan of reorganization that will be in the
best interest of all stakeholders, including creditors,
equity holders, customers, and employees.
The Debtor tells the Court that Clear Thinking's professionals
bill:
Professional Hourly Rate
------------ -----------
Principals $400
Managers $325
Consultants $250
Analysts $150
Administrative Support Staff $75
To the best of the Debtor's knowledge, Clear Thinking is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Based in San Luis Obispo, California, Copelands' Enterprises,
Inc., dba Copelands' Sports -- http://www.copelandsports.com/--
operates specialty sporting goods stores. The Company filed for
chapter 11 protection on Aug. 14, 2006 (Bankr. D. Del. Case No.
06-10853). Laura Davis Jones, Esq., Marc A. Berlinson, Esq., and
Ira A. Kharasch, Esq., at Pachulski, Stang, Ziehl, Young, Jones, &
Weintraub LLP, in Los Angeles, California, represent the Debtor.
Clear Thinking Group serves as the Debtor's financial advisor.
When the Debtor filed for protection from its creditors, it
estimated assets and debts between $50 million and $100 million.
CROWN CASTLE: Net Loss Down to $13 Mil. for Quarter Ended June 30
-----------------------------------------------------------------
Crown Castle International Corp. reported net revenues of
$194 million for the three months ended June 30, 2006, versus net
income of $168 million for the same period in 2005, an increase of
$26 million.
Net revenues for the six months ended June 30, 2006 increased by
$50 million to $376 million versus net income of $326 million for
the comparable period in 2005.
The increases for the three and six months ended June 30, 2006
resulted from increases in site rental revenues of $22 million and
$42 million, respectively.
The Company reported a net of loss $13 million for the three
months ended June 30, 2006, compared to a net loss of $226 million
for the same period in 2005. For the six months ended
June 30, 2006 its net loss was $20 million versus a net loss of
$353 million for the comparable period in 2005.
The Company's consolidated cash and cash equivalents, as of
June 30, 2006, was $27.5 million, after giving affect to purchases
of its common stock in July 2006, the acquisition of Mountain
Union in July 2006 and the redemption of the 10 3/4% Senior Notes
and the 9 3/8% Senior Notes in Aug. 2006. It also had a
consolidated long-term and short-term debt of $3 billion,
consolidated redeemable preferred stock of $312.4 million and
consolidated stockholders equity of $719.3 million.
The Company, as of July 31, 2006, had $250 million of available
borrowings under its 2006 Credit Facility.
Redemption of Notes
On August 1, 2006, the Company redeemed the outstanding 10 3/4%
Senior Notes and 9 3/8% Senior Notes, utilizing approximately
$12.3 million to redeem the $11.7 million in outstanding principal
amount of the redeemed notes, including accrued interest of
$600,000.
A full text-copy of the Company's financial report for the three
and six months ended June 30, 2006 may be viewed at no charge at
http://ResearchArchives.com/t/s?1137
Crown Castle International Corp. -- http://www.crowncastle.com/--
engineers, deploys, owns and operates technologically advanced
shared wireless infrastructure, including extensive networks of
towers. Crown Castle offers significant wireless communications
coverage to 68 of the top 100 United States markets and to
substantially all of the Australian population. Crown Castle
owns, operates and manages over 10,600 and over 1,300 wireless
communication sites in the U.S. and Australia, respectively.
CROWN CASTLE: 2nd Qtr. 10-Q Filing Prompts S&P to Affirm Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed the ratings on
Houston, Texas-based wireless communications tower operator
Crown Castle International Corp., and its related entities,
including its 'BB' corporate credit rating, and removed them
from CreditWatch, where they had been placed with negative
implications on Aug. 4, 2006. The outlook is stable.
"This action follows the company's Aug. 13 filing of its second-
quarter 10-Q," said Standard & Poor's credit analyst Catherine
Cosentino.
The SEC continues to conduct an informal inquiry into various
accounting matters related to the company, including whether
grants of stock options may have been backdated. In its second-
quarter 10-Q, the company indicated that it had discovered certain
errors in its accounting for equity-based compensation
charges associated with its stock option grants, although it also
indicated that these accounting errors are immaterial.
Moreover, the fact the company filed its 10-Q and did not restate
any financial statements as a result of its review suggests that
the SEC investigation will not have any near-term material adverse
financial impact on Crown Castle.
The rating on Crown Castle reflects its aggressive financial
policy, which is the constraint on the rating. This largely
tempers the promising prospects of its core wireless tower leasing
business, which is expected to generate increasingly stronger
levels of net free cash flow after capital expenditures. However,
the rating assumes that the company will not be subject to any
meaningful negative effects from the SEC investigation.
Crown Castle is expected to engage in material share repurchases
over the next several years, using internally generated cash and
debt incurrence. Such debt is likely to be in the form of
additional securitized revenue notes, which can be issued subject
to a 3.28x minimum securitization fixed-charge coverage ratio, and
could approach the $1 billion area over the next several years.
As such, while the company is expected to grow its EBITDA over the
next several years at healthy levels, it is not expected to
experience any material deleveraging during this time frame and
debt to EBITDA is anticipated to remain around the low-7x area
(excluding operating lease adjustments).
DANA CORP: Court Denies Compensation for Michael Burns, et al.
--------------------------------------------------------------
The Honorable Burton R. Lifland denied Dana Corporation and its
debtor-affiliates' proposed compensation for Michael J. Burns, the
Company's president and chief executive officer, and five key
executives of his core management team.
Judge Lifland finds that the proposed Compensation includes both
the elements of a "Pay to Stay" compensation plan subject to the
limitations of Section 503(c) of the Bankruptcy Code and, a
"Produce Value for Pay" plan to be scrutinized through the
business judgment lens of Section 363.
Judge Lifland also finds that the initial Compensation Motion did
not analyze the requirements under the Bankruptcy Abuse Prevention
and Consumer Protection Act of 2005. Rather, the Debtors proposed
to rely solely on Sections 105, 363(b), 365 and 101(31) of the
Bankruptcy Code as the basis for their request.
Under the BAPCA, Section 503(c) establishes specific evidentiary
standards that must be met before the Court may authorize payments
made to an insider for purposes of inducing that person to remain
with a debtor's business, or payments made on account of
severance. Judge Lifland states that the recent amendment to the
Bankruptcy Code makes it clear that, to the extent a proposed
transfer falls within Sections 503(c)(1)1 or (c)(2)2, then the
business judgment rule does not apply, irrespective of whether a
sound business purpose may actually exist.
Judge Lifland says he cannot categorize the Debtors' proposed
Completion Bonus as an incentive bonus. Rather, the Court finds
that the Completion Bonus is a retention bonus.
In addition, the Court notes that the Debtors try to circumvent
the requirements of Section 503(c)(2) by characterizing the
amounts being paid to the Executives on involuntary dismissal or
resigning for good reason as "payments in exchange for non-compete
agreements."
Furthermore, Judge Lifland points out that the Debtors have failed
to meet their burden of demonstrating that the payments in
exchange for signing a non-compete agreement and other payments do
not constitute "severance", or that the evidentiary requirements
under Section 503(c)(2) have been satisfied.
Pursuant to Section 503(c)(2), an insider's severance payment may
not be approved unless the Debtors have established that the
payment is part of a program generally applicable to all full time
employees, and the amount of the payment is not more than ten
times the amount of mean severance given to non-management
employees in that calendar year.
Subject to a factual determination regarding the extent to which
an individual was in control of a debtor, Judge Lifland says the
term "insider" could include other employees of the Debtors.
Thus, the Court rules that the request is improper and without
basis. The Court says that it is prepared to find that the
Executives are insiders, but has no basis to make a finding that
no other insiders are employed by Dana absent a showing of proof.
While it may be possible to formulate a compensation package that
passes muster under the Section 363 business judgment rule or
Section 503(c) limitations, or both, the Court finds that the
Debtors' proposed Compensation does neither.
As reported in the Troubled Company Reporter on Aug. 22, 2006,
the Debtors sought Court's approval on their employment agreements
with Mr. Burns and five key executives, as modified.
The Debtors previously asked the Court to approve the original
terms of the employment agreements of Mr. Burns and five key
executives.
Based on discussions with, among others, the Official Committee of
Unsecured Creditors regarding concerns relating to terms in the
Original Employment Agreements, the Debtors have made these
modifications:
Item Modified Agreements
---- -------------------
Performance Metric Consummation of a plan of
reorganization.
Total Enterprise Value is six
months after the Effective
Date of a plan.
Threshold Completion Bonus 66% of Target Completion
Bonus if employed on pay-out
date and TEV on the Valuation
Date is equal to
$2,000,000,000.
Minimum Completion Bonus 50% of Target Completion
Bonus if employed on pay-out
date.
Variable Pay-out Above Minimum Completion
Bonus, pay-out varies
depending on TEV, without a
cap.
Form of Payment Minimum Completion Bonus is
payable in cash. Amounts in
excess of Minimum Completion
Bonus payable in common stock
of reorganized Dana, provided
that the common stock is (i)
listed and readily tradable,
or (ii) subject to repurchase
by reorganized Dana if the
Senior Executive is not
employed by reorganized Dana
after the Effective Date,
otherwise payable in cash.
Timing Pay-out Minimum Completion Bonus will
be paid on Effective Date
with the remainder payable
six months after Effective
Date.
Impact of Death, Disability Prior to completion of
or Involuntary Termination business plan: None.
Without Cause or Voluntary
Termination for Good Reason Prior to Effective Date:
(with respect to Mr. Burns) Pro rata.
on Completion Bonus
After Effective Date:
Full pay-out.
Impact of Voluntary Prior to Effective Date:
Termination Without No pay-out.
Good Reason (with
respect to Mr. Burns) After Effective Date:
Full pay-out.
The Original Agreements were further modified to reflect that:
(a) The term of the Employment Agreements of Mr. Burns and the
Executives is until the Effective Date of a plan of
reorganization;
(b) If Mr. Burns and the Executives are (i) involuntarily
terminated without cause, (ii) are voluntarily terminated
for good reason, or (iii) failed to complete a replacement
employment agreement upon expiration of the Agreement
prior to the Plan Effective Date, they are to enter into
an 18-month non-compete agreement in exchange for
compensation equal to 12 months salary, plus annual bonus;
(c) Prior to the Plan Effective Date, if Mr. Burns and the
Executives are involuntarily terminated for cause or are
voluntarily terminated without good reason, they are to
enter into an 18-month non-compete agreement;
(d) Issues regarding termination after the Plan Effective Date
and a change of control after the Plan Effective Date are
deferred; and
(e) The Senior Executive Retention Program will be assumed on
earlier of termination without cause, with good reason
with respect to Mr. Burns, confirmation of a plan, death
or disability.
According to the Debtors, the Modified Employment Agreements will
permit the Senior Executives to make the difficult choices that
must be made in any restructuring while incentivizing them to
maximize the enterprise value of the reorganized Debtors for the
benefit of all stakeholders.
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. Fried, Frank, Harris, Shriver & Jacobson,
LLP serves as counsel to the Official Committee of Equity Security
Holders. 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 CORP: Agrees With Creditors Panel on $10.7MM Pension Payments
------------------------------------------------------------------
Dana Corporation and its debtor-affiliates are parties to
collective bargaining agreements with unions representing some of
their employees. In connection with the CBAs and as part of their
benefit programs for certain non-union employees, the Debtors
maintain defined benefit pension plans and periodically make
contributions to those Pension Plans.
The next contributions required by the Internal Revenue Code and
the Employee Retirement Income Security Act to certain of the
Pension Plans are:
-- $4,554,000 for Sept. 15, 2006; and
-- $6,145,000 for Oct. 15, 2006.
The Debtors desire to make the September 15 and the October 15
Contributions.
However, the Official Committee of Unsecured Creditors asserts
that postpetition contributions to the Pension Plans on account
of prepetition services are not required under the Bankruptcy
Code.
The Debtors and the Creditors' Committee have agreed to resolve
their dispute.
Accordingly, the parties stipulate that the Debtors, with the
Creditors' Committee's consent, will make the September 15 and
the October 15 Contributions. Neither the making of the
September 15 and the October 15 Contributions nor any party's
consent, will be construed as a waiver of the right of any party
to challenge the ability of the Debtors to make any future
Pension Contributions.
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. Fried, Frank, Harris, Shriver & Jacobson,
LLP serves as counsel to the Official Committee of Equity Security
Holders. 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. 20; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DEBASIO FURNITURE: Sells Merchandises to Close Family-Owned Biz
---------------------------------------------------------------
DeBasio Furniture will be going out of business and will soon
close its doors for the last time after 78 years of serving
families in the greater St. Louis area.
To thank all their customers, John DeBasio, Jr., Chairman of
DeBasio and son of the founder, John DeBasio, Sr., disclosed plans
for a store-closing going out of business event started on
Aug. 31, 2006.
Every item in the DeBasio multi-million dollar inventory will be
sold at the lowest prices in the company's history. "Over three
acres of merchandise will be reduced up to 75%, giving customers
the opportunity to own home furnishings at once-in-a-lifetime
savings," Mr. DeBasio, Jr., stated.
According to company president Mike Noblot, the decision to close
DeBasio Furniture was based on trends in the furniture industry as
well as the economy. "In recent years it has become harder and
harder for independent, family owned furniture retailers to
compete with the national and international mass merchandisers.
At the same time, foreign manufacturers have greatly changed the
nature of service and quality. Rather than having to compromise
on quality, value, or service, we felt the time was right to make
a graceful exit."
The DeBasio going-out-of-business total liquidation began on
Aug. 31, 2006, and will continue until all merchandise is sold.
The event will be supported by Northbrook, Illinois-based Deere
Park Associates, one of the leading consultants to the furniture
industry.
The DeBasio store closing liquidation will take place at their two
stores located in South County at 2151 Lemay Ferry Road in St.
Louis, and in West County 15892 Clayton Road in Ellisville.
Headquartered in St. Louis, Missouri, DeBasio Furniture & Mattress
-- http://www.debasio.com/-- sells home furnishings.
ELAN CORP: Incurs $142.6 Million Net Loss in Second Quarter
-----------------------------------------------------------
Elan Corporation, plc, reported its second quarter 2006 financial
results. For the three months ended June 30, 2006, the Company
incurred a $142.6 million net loss on $118.6 million of net
revenues compared to a $77 million net loss on $136.4 million of
net revenues in 2005.
Commenting on Elan's business, Kelly Martin, Elan's president and
chief executive officer, said, "The second quarter, once again,
reflected our continued discipline and focus on delivering
tangible business results. We recently received approval in the
US and Europe to make Tysabri available to patients suffering from
MS. We have been diligently working to have this effective
treatment available to patients and their physicians. We believe
that Tysabri will play a significant role as a treatment
alternative for patients suffering from this chronic and
debilitating disease. We also have made important advances in all
areas of our business, recently demonstrated by our alliances with
Abbott in nanotechnology and Archemix in autoimmune. We continue
to actively evaluate and pursue both internal and external
opportunities that will reinforce our strategic focus, strengthen
our capabilities and generate value as we move the enterprise
forward."
Commenting on Elan's second quarter financial results, Shane
Cooke, Elan's executive vice president and chief financial
officer, said, "We are very pleased to report another solid
quarter with strong progress across all of our business and
development activities and a 37% reduction in net losses. We
reported a 15% increase in revenues, improved operating margins
and, excluding costs and revenues associated with Tysabri,
adjusted EBITDA was positive for the third consecutive quarter.
Since the end of the quarter, we have launched Tysabri in Germany,
Ireland, UK and Sweden and re-introduced it in the US."
Mr. Cooke added, "With the approval of Tysabri and the
improvements we have made to the business, we are now entering
into a new and exciting phase in the development of Elan. We are
confident that revenues from Tysabri will drive our return to
profitability."
Net Interest and Investment Gains and Losses
Net interest and investment losses were $28.4 million for the
second quarter of 2006, compared to net interest and investment
losses of $88.6 million for the same period of 2005. In the
second quarter of 2006, net interest expense amounted to $27.2
million, compared to $34.7 million in the same period of 2005.
Net interest expense decreased in the second quarter of 2006 over
the corresponding period in 2005 primarily as a result of interest
savings due to the early retirement of $242.8 million of debt in
June 2005, and higher interest income earned on cash balances due
to increased interest rates.
During the second quarter of 2005, Elan incurred a net charge of
$52.2 million as a result of the early retirement of $242.8
million of 2008 debt.
Research & Development
Tysabri - US
In June 2006, Elan and Biogen Idec received the approval from the
FDA to re-introduce Tysabri in the US as a monotherapy treatment
for relapsing forms of MS to slow the progression of disability
and reduce the frequency of clinical relapses.
The FDA granted approval for re-introduction based on the review
of Tysabri clinical trial data; revised labeling with enhanced
safety warnings; and a risk management plan (TOUCH Prescribing
Program) designed to inform physicians and patients of the
benefits and risks of Tysabri treatment and minimize potential
risk of progressive multifocal leukoencephalopathy. Tysabri
became commercially available in the US in July 2006.
Tysabri - Europe
In June 2006, Elan and Biogen Idec received approval from the
European Commission to market Tysabri as a treatment for relapsing
remitting MS to delay the progression of disability and reduce the
frequency of relapses. Tysabri was launched in Germany, Ireland,
UK and Sweden in July 2006 and will be launched in other EU
countries over the next twelve months.
Tysabri - Crohn's Disease
The results from the Phase 3 ENCORE (Efficacy of Natalizumab in
Crohn's Disease Response and Remission) trial in Crohn's disease
were presented at Digestive Disease Week in Los Angeles in May
2006. Data from the trial demonstrated significant induction of
clinical response in patients with moderately to severe active
Crohn's disease.
Elan and Archemix Alliance
In July 2006, Elan and Archemix entered into a multi-year, multi-
product alliance focused on the discovery, development, and
commercialization of first-in-class aptamer therapeutics to treat
autoimmune diseases. The companies will seek to develop aptamer
therapeutics to IL-23, a cytokine that has emerged as a mediator
in the chronic autoimmune inflammatory diseases, and additional
protein targets.
Alzheimer's and other Neurodegenerative Diseases
Elan is focused on building upon its breakthrough research and
extensive experience in Alzheimer's disease and is also studying
other neurodegenerative diseases, such as Parkinson's disease.
Elan is continuing to progress its own internal Gamma and Beta
secretase Alzheimer's programs.
AAB-001
The Phase 2 clinical trials for AAB-001, a humanized monoclonal
antibody to A-beta, are progressing as planned. Interim analyses
of Phase II data from AAB-001 will be made in the second half of
this year to determine the time point at which this program can
move into the next phase of clinical trials.
ACC-001
The Phase 1 trials for ACC-001 (active Abeta immunotherapeutic
conjugate) are progressing as planned. Interim analyses of the
Phase 1 data will be made in the second half of this year to
determine the time point at which this program can move into
Phase 2.
Elan Drug Technologies
On July 6, 2006, Elan announced a License Agreement with Abbott
Pharmaceutical PR Ltd in which Abbott has been granted US rights,
in a partnership with AstraZeneca Pharmaceuticals, LP, to utilize
Elan's proprietary NanoCrystal Technology to develop and
commercialize a single fixed-dose combination product containing
the active pharmaceutical ingredients in Abbott's TriCor 145
(fenofibrate) and AstraZeneca's Crestor(R) (rosuvastatin calcium)
products.
About Elan Corporation
Elan Corporation, plc -- http://www.elan.com/-- is a
neuroscience-based biotechnology company that is focused on
discovering, developing, manufacturing, selling and marketing
advanced therapies in neurodegenerative diseases, autoimmune
diseases and severe pain. Elan's (NYSE: ELN) shares trade on the
New York, London and Dublin Stock Exchanges.
* * *
Moody's Investors Service affirms Elan Corporation, plc's
corporate family rating at B3 and revises outlook to stable from
negative.
ENTRINGER BAKERIES: Trustee Avoids $74,000 of Bridge Loan Payments
------------------------------------------------------------------
Aaron E. Caillouet, the Chapter 7 trustee overseeing the
liquidation of Entringer Bakeries, Inc., sued First Bank and Trust
to avoid, on preference theory, payments the debtor made to the
lender to pay off a three-month $180,000 prepetition bridge loan.
The Bridge Loan was paid off after the Debtor received new funding
under a Small Business Administration-guaranteed loan extended by
Whitney National Bank.
In a decision published at 2006 WL 2390239 and 46 Bankr. Ct. Dec.
206, the Honorable Gerald H. Schiff held that:
1) the agreement between the debtor and Whitney that a
portion of the new loan proceeds would be used to repay
the bridge loan, together with the debtor's performance of
this agreement according to its terms, satisfied the first
two prongs of the three-pronged test for deciding whether
the "earmarking" doctrine applied and prevented the
trustee from avoiding the debtor's payment to the bridge
lender except to the extent that, due to the unsecured
nature of the initial bridge loan and secured nature of
the permanent loan, there had been diminution of the
debtor's estate;
2) the court would value the collateral given to the new
lender using a liquidation analysis to determine the
extent of the diminution; and
3) the short-term bridge loan that debtor obtained on
emergency basis to meet its payroll obligations was not a
debt incurred in ordinary course of business.
Accordingly, Judge Schiff ruled in favor of the Trustee, but only
for approximately $74,000.
Doing business as McKenzie's Pastry Shoppes in New Orleans,
Entringer Bakeries, Inc., filed a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code on May 29,
2001 (Bankr. E.D. La. Case No. 01-14388). The case was
subsequently converted to a case under Chapter 7. Aaron E.
Caillouet is the duly appointed, qualified and acting trustee.
FEDERAL-MOGUL: Wants Mt. McKinley's Response Overruled
------------------------------------------------------
The Federal-Mogul Corporation, the Official Committee of Asbestos
Claimants and Professor Eric D. Green, the duly appointed legal
representative for future asbestos-related personal injury
claimants, ask the U.S. Bankruptcy Court for the District of
Delaware to overrule Mt. McKinley's response and approve the
Stipulation for insurance-related modifications to the Third
Amended Plan of Reorganization.
The Plan Proponents, ask the Court for leave to file a reply to
the responses of:
-- Mt. McKinley Insurance Company and Everest Reinsurance
Company; and
-- Certain Underwriters at Lloyds London and certain London
Market Companies;
to the Plan Proponents' proposed stipulation for insurance-
related modifications to the Third Amended Plan of
Reorganization.
The Plan Proponents argue that Mt. McKinley lacks standing to
object since the Stipulation does not bind any insurers that are
not party to it, including Mt. McKinley.
The Court should not be distracted by speculation in which the
Stipulation may hypothetically, adversely affect Mt. McKinley,
Scotta E. McFarland, Esq., at Pachulski Stang Ziehl Young Jones &
Weintraub LLP, in Wilmington, Delaware, says.
"No one has objected to the Stipulation on the basis that it is
not in the best interests of the estates, including [Mt.
McKinley]. In fact . . . [Mt. McKinley] does not object to the
Stipulation," Ms. McFarland notes.
Ms. McFarland contends that Mt. McKinley does not seek to prevent
the Plan Proponents and the Settling Insurers from entering into
the Stipulation. Rather, she asserts, Mt. McKinley seeks to use
the opportunity to test whether the proposed Plan modifications in
the Stipulation will render the Plan insurance-neutral and, thus,
eliminate Mt. McKinley's standing to participate in the Plan
confirmation process.
"[Mt. McKinley's] challenge fails to meet the 'case or
controversy' requirement and is not ripe for determination," Ms.
McFarland argues.
Mt. McKinley's challenges can be answered by referring to the
plain language of the Plan Modifications themselves, Ms. McFarland
insists.
As previously reported, the Plan provides that asbestos personal
injury claimants, both present and future, will be permanently
channeled to a trust or series of trusts established pursuant to
Section 524(g) of the Bankruptcy Code, thereby protecting the
Debtors from existing and future asbestos liability.
The Plan Proponents maintain, among others, that the Plan
Modifications fully preserve for all insurers the ability in
coverage litigation to challenge the reasonableness of the Trust
Distribution Procedures and to contest whether the insurers are
obligated to pay ay asbestos personal injury claim, and, if so,
what amount. Additionally, the Plan Modifications impose no
affirmative obligation on any insurer to pay anything'
Ms. McFarland also argues that the London Underwriters have no
right to dictate the terms of the Plan language. Moreover, the
proposed language goes far beyond preserving London Underwriters'
rights.
Contrary to the Underwriters' arguments, Ms. McFarland asserts
that the Underwriters are not bound by the Terms of the
Stipulation. Furthermore, the Trust Distribution Procedures do
not obligate the Underwriters to defend claims and the Plan
Modifications do not require them to pay Trust expenses.
The Plan Proponents assert that the Underwriters' response is
based on a litany of false assumptions. Thus, the Plan Proponents
want the Underwriters' response overruled.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion. The Company filed for chapter 11 protection on
Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan
Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley
Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $10.15 billion in
assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s
U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath &
Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq.,
and Eric M. Sutty, Esq., at The Bayard Firm represent the Official
Committee of Unsecured Creditors. (Federal-Mogul Bankruptcy News,
Issue No. 113; Bankruptcy Creditors' Service, Inc.
http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: Renault Taps BNP Paribas for Three-Way Tie-Up
-------------------------------------------------------------
Renault SA has named BNP Paribas to advise on a possible three-way
alliance with General Motors Corp. and Nissan Motor Co., AFX News
Limited reports citing a source privy to the matter.
According to AFX, the French carmaker has also drawn up a
shortlist of around eight British and US banks from which it will
choose a second adviser. The selection process is likely to take
several weeks to finalize, the report says.
Anne-Sylvaine Chassany and David Pearson of The Wall Street
Journal cited a source saying that Renault is "now seriously
considering a potential alliance."
Carlos Ghosn, chief executive of Renault and Nissan, refused to
make public statements until internal feasibility studies are
completed in mid-October and Renault decides whether to proceed,
the WSJ relates.
Renault-Nissan is a collaboration between Nissan Motor Co.,
Ltd., and Renault S.A. A GM shareholder, Kirk Kerkorian,
broached the idea of pulling in GM into the two-way tie-up. Mr.
Kerkorian owns 9.9% equity stake in GM through his investment
firm Tracinda Corp.
The WSJ reported last week that Ford Motor Co. Chairman Bill Ford
Jr. has approached Mr. Ghosn about a possible alliance with Ford
if the proposed tie-up with GM fails.
According to GM CEO Rick Wagoner, the company is considering an
alliance but is focusing on its turnaround efforts, which don't
hinge on the outcome of the talks, WSJ adds.
About General Motors
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 July 28, 2006,
Standard & Poor's Ratings Services held all of its ratings on
General Motors Corp. -- including the 'B' corporate credit rating,
but excluding the '1' recovery rating -- on CreditWatch with
negative implications, where they were placed March 29, 2006. The
CreditWatch update followed GM's announcement of second quarter
results and other recent developments involving its bank facility
and progress on the GMAC sale.
As reported in the Troubled Company Reporter on July 27, 2006,
Dominion Bond Rating Service downgraded the long-term debt ratings
of General Motors Corporation and General Motors of Canada Limited
to B. The commercial paper ratings of both companies are also
downgraded to R-3 (low) from R-3.
As reported in the Troubled Company Reporter on June 22, 2006,
Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to
General Motor's new $4.48 billion senior secured bank facility.
The 'RR1' is based on the collateral package and other protections
that are expected to provide full recovery in the event of a
bankruptcy filing.
As reported in the Troubled Company Reporter on June 21, 2006,
Moody's Investors Service assigned a B2 rating to the secured
tranches of the amended and extended secured credit facility of up
to $4.5 billion being proposed by General Motors Corporation,
affirmed the company's B3 corporate family and SGL-3 speculative
grade liquidity ratings, and lowered its senior unsecured rating
to Caa1 from B3. The rating outlook is negative.
GENERAL MOTORS: Offers 100,000-Mile/Five-Year Powertrain Warranty
-----------------------------------------------------------------
General Motors disclosed it is offering the best warranty of any
full-line automaker, with coverage up to 100,000 miles or five
years across its entire 2007 car and light-duty truck lineup in
the United States and Canada, reflecting its success in
dramatically improving the quality and durability of its vehicles.
GM's new 100,000 Mile Warranty coverage is a fully transferable
five-year, 100,000-mile powertrain limited warranty with no
deductible. GM also has decided to expand its roadside assistance
and courtesy transportation programs to match the powertrain
warranty term. Altogether, it's the best coverage in the auto
industry.
"We've been telling everyone how strong GM's cars and trucks are
in terms of value, design, quality and durability. Now we're
going to back it up," Chairman and CEO Rick Wagoner said. "This
new warranty, combined with GM's outstanding quality, competitive
pricing, relevant technologies and a strong new lineup of cars and
trucks, provides motorists with an unprecedented level of value
and peace of mind.
"This latest step in our North America turnaround plan reflects
the confidence we have in the quality of our cars and trucks.
It's the result of years of hard work by our employees, suppliers
and dealers. It's something that motorists want and deserve. For
those who haven't driven a GM car or truck in a while, this is our
way of saying, 'Come on back and see what we've done.'
"The bottom line is GM now has the best coverage in the industry,"
Mr. Wagoner said. "It includes the best warranty of any full-line
automaker, equally compelling roadside assistance and courtesy
transportation programs, unique safety and security technologies
like OnStar and StabiliTrak, and the nation's largest network of
outstanding dealers, with well-trained GM Goodwrench technicians
who service GM cars and trucks better than anybody else."
The no-deductible, fully transferable limited powertrain warranty
covers more than 900 components related to the engine,
transmission, transfer case and final drive assemblies on all 2007
model-year Chevrolet, Pontiac, Buick, GMC, Hummer, Saturn, Saab
and Cadillac cars and light-duty trucks sold in the United States
and Canada. GM will extend the existing roadside assistance plan
to 100,000 miles or five years, and will provide courtesy
transportation for a covered warranty repair.
The new warranty will apply retroactively to 2007 GM cars and
trucks already sold.
For non-powertrain components, GM's Bumper-to-Bumper New Vehicle
Limited Warranty remains in effect: four years or 50,000 miles for
Buicks, Cadillacs, Hummers and Saabs, and three years or 36,000
miles for Chevrolets, GMCs, Pontiacs and Saturns.
The new package is an important part of GM's sales and marketing
strategy, which is focusing consumers on the inherent value of its
cars and trucks. Higher quality vehicles, reduced incentives and
lower daily rental fleet sales are helping increase the residual
value of GM cars and trucks. In addition, GM transaction prices
have been rising, well above the industry average.
Mr. Wagoner said the moves were the result of GM's successful
decade-long effort to dramatically improve the quality of its cars
and trucks. "From the men and women who design, engineer and
build our vehicles, to our union partners, suppliers and dealers,
the GM team's commitment to quality has enabled us to deliver this
consumer confidence package."
GM tracks vehicle quality several ways, including analyzing
warranty visits and the results of 10 million customer surveys
each year, and studying the quality surveys of several independent
organizations. GM has made significant progress on all fronts:
* Warranty repairs at dealers have decreased 40% during the
past five years.
* Two GM brands, Buick and Cadillac, placed in the top five in
the J.D. Power and Associates Vehicle Dependability Study
released last month.
* GM swept the large pickup segment, placed 11 models in the
top three of their segments and had two models top their
segments in the J.D. Power and Associates Initial Quality
Study released earlier this year.
* In the Strategic Vision 2006 Total Quality Index Study, five
GM models topped their segments -- more wins than any other
manufacturer for the second consecutive year.
* GM dealers also rank among the leaders in the most recent
J.D. Power and Associates Consumer Service Index study, which
measures customer satisfaction among new vehicle owners with
the dealer service department during the first three years of
vehicle ownership.
* GM's Buick brand ranked second in the American Customer
Satisfaction Index study released last month, administered by
the University of Michigan's National Quality Research
Center.
GM will begin promoting the new initiative during Thursday night's
NBC-televised NFL season opener between the world champion
Pittsburgh Steelers and the Miami Dolphins. In addition, a
dedicated web site -- http://www.gm.com/warranty/-- provides
consumers with additional details about the program.
About General Motors
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 July 28, 2006,
Standard & Poor's Ratings Services held all of its ratings on
General Motors Corp. -- including the 'B' corporate credit rating,
but excluding the '1' recovery rating -- on CreditWatch with
negative implications, where they were placed March 29, 2006. The
CreditWatch update followed GM's announcement of second quarter
results and other recent developments involving its bank facility
and progress on the GMAC sale.
As reported in the Troubled Company Reporter on July 27, 2006,
Dominion Bond Rating Service downgraded the long-term debt ratings
of General Motors Corporation and General Motors of Canada Limited
to B. The commercial paper ratings of both companies are also
downgraded to R-3 (low) from R-3.
As reported in the Troubled Company Reporter on June 22, 2006,
Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to
General Motor's new $4.48 billion senior secured bank facility.
The 'RR1' is based on the collateral package and other protections
that are expected to provide full recovery in the event of a
bankruptcy filing.
As reported in the Troubled Company Reporter on June 21, 2006,
Moody's Investors Service assigned a B2 rating to the secured
tranches of the amended and extended secured credit facility of up
to $4.5 billion being proposed by General Motors Corporation,
affirmed the company's B3 corporate family and SGL-3 speculative
grade liquidity ratings, and lowered its senior unsecured rating
to Caa1 from B3. The rating outlook is negative.
GLOBAL HOME: Wants Plante & Moran to Audit 401(k) & Pension Plans
-----------------------------------------------------------------
Global Home Products LLC and its debtor-affiliates ask the
Honorable Kevin Gross of the U.S. Bankruptcy Court for the
District of Delaware for authority to employ Plante & Moran, LLP,
nunc pro tunc to May 15, 2006.
The Debtors want Plante & Moran to audit its 401(K) and pension
plans for certain Anchor Hocking employees. Plante & Moran had
audited those 401(K) and pension plans in prior years.
The Debtors are managers of the GHP Operating Company, LLC, 401(k)
Savings Plan and GHP Operating Company, LLC, Pension Plan for
Anchor Hocking Union Employees.
Plante & Moran will audit the financial statements and
supplemental schedules of the 401(k) Savings Plan and the Union
Pension Plan for the year ended Dec. 31, 2005.
The audited financial statements will be included in the Savings
Plan's Form 5500 filing and Union Pension Plan's Form 5500 filing
with the Department of Labor.
As part of the audit, Plante & Moran will recommend any
adjustments to the 401(k) Savings Plan's and Union Pension Plan's
accounting records, and, to the extent necessary, will discuss
with the Debtors any suggestion concerning the accounting records
and financial affairs.
David L. Scheffler, CPA, discloses that the Firm will receive a
fixed fee of $10,000 for the 401(k) Savings Plan Audit and a fixed
fee of $11,500 for the Union Pension Plan Audit.
Mr. Scheffler assures the Court that the Firm neither holds nor
represents any interest adverse to the Debtors' estates and is
disinterested as that term is defined in Section 101(14) of the
Bankruptcy Code.
Judge Gross will convene a hearing at 2:00 p.m. on Oct. 11, 2006,
to consider Plante & Moran's retention. Objections to the Firm's
retention, if any, must be submitted by 4:00 p.m. on Oct. 4, 2006.
Headquartered in Westerville, Ohio, Global Home Products, LLC
-- http://www.anchorhocking.com/and http://www.burnesgroup.com/
-- sells houseware and home products and manufactures high
quality glass products for consumers and the food services
industry. The company also designs and markets photo frames,
photo albums and related home decor products. The company and
16 of its affiliates, including Burnes Puerto Rico, Inc., and
Mirro Puerto Rico, Inc., filed for Chapter 11 protection on
Apr. 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis
Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and
Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at
Lowenstein Sandler, P.C., represents the Official Committee Of
Unsecured Creditors. When the company filed for protection from
their creditors, they estimated assets between $50 million and
$100 million and estimated debts of more than $100 million.
HANDMAKER JEWISH: Court Okays James Zeeb as Special Bond Counsel
----------------------------------------------------------------
The Honorable Eileen W. Hollowell of the U.S. Bankruptcy Court for
the District of Arizona in Tucson authorized Handmaker Jewish
Services for the Aging to employ James W. Zeeb, Esq., as its
special bond counsel.
Mr. Zeeb will:
-- assist the Debtor in all changes of the bond documentation
that will be required;
-- work with the Bond Trustee to the extent that plan
confirmation requires any redocumentation for purposes of
the bond financing, including re-issuance, if necessary; and
-- serve as an expert witness at the evidentiary hearing on the
plan confirmation.
Mr. Zeebs will be paid his normal hourly rate. Court records do
not show how much Mr. Zeebs will be paid.
To the best of the Debtor's knowledge, Mr. Zeeb has no connection
with creditors or any party-in-interest in the Debtor's case.
Headquartered in Tucson, Arizona, Handmaker Jewish Services for
the Aging owns and operates a multiple residence-retirement
community complex facility. The Company filed for chapter 11
protection on Sept. 30, 2005 (Bankr. D. Ariz. Case No. 05-05924).
Michael W. McGrath, Esq., at Mesch Clark & Rothschild, represents
the Debtor in its restructuring efforts. No Official Committee of
Unsecured Creditors has been appointed in the Debtor's case.
Philip R. Rudd, Esq., at Kutak Rock LLP represents the Bond
Trustee. When the Debtor filed for protection from its creditors,
it listed $10,384,351 in assets and $21,625,125 in debts.
HARPER STREET: Section 341(a) Meeting Scheduled on Sept. 18
-----------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of Harper
Street Realty Corp.'s creditors at 10:30 p.m., on Sept. 18, 2006,
at Room 4529 271 Cadman Plaza East in Brooklyn, New York.
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
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Whitestone, New York, Harper Street Realty Corp.
filed for chapter 11 protection on Aug. 18, 2006. (Bankr. E.D.
N.Y. Case No. 06-42966). Matthew G. Roseman, Esq., at Cullen and
Dykman Bleakley Platt L.L.P., represents the Debtor in its
restructuring efforts. Harper Street estimated its assets
at $9.6 million debts at $ $15.2 million when it filed for
protection from its creditors.
ITC^DELTACOM: Incurs $11.7 Mil. Net Loss in Quarter Ended June 30
-----------------------------------------------------------------
ITC^Deltacom Inc. reported an $11,682,000 net loss for the three
months ended June 30, 2006, an increase of $5,292,000, from net
loss of $6,390,000 in the three months ended June 30, 2005.
Total operating revenues for the quarter ended June 30, 2006,
decreased to $123,811,000 from total operating revenues of
$134,118,000 for the same period last year.
At June 30, 2006, ITC^Deltacom Inc.'s balance sheet showed
total assets of $420,566,000 and total liabilities of
$481,702,000, resulting to a total stockholders' deficit of
$61,136,000.
Full-text copies of the Company's financial statements for the
quarter ended June 30, 2006, are available for free at:
http://researcharchives.com/t/s?112e
Headquartered in Huntsville, Alabama, ITC^DeltaCom Inc. offers
integrated voice and data communications, including local and
long-distance phone service and DSL Internet access, primarily to
business customers. The Company also wholesales transmission
capacity on its fiber-optic network, which spans more than 10,000
miles from Florida to New York, to other carriers. The depressed
telecom sector forced the Company into bankruptcy in 2002, and it
emerged with investment firm Welsh Carson owning a controlling
equity stake (it now owns 72%).
KAISER ALUMINUM: Extends Long-Term Supply Agreement with Boeing
---------------------------------------------------------------
Kaiser Aluminum signed a new long-term contract with Boeing to
supply sheet and light gauge aluminum plate for use in Boeing
commercial aircraft products. The new supply contract, which
extends an existing agreement, effectively adds to a prior multi-
year agreement for heavy-gauge plate between Boeing and Kaiser
Aluminum signed earlier this year.
"Kaiser Aluminum and Boeing have a long history of partnership,
and this agreement further solidifies the long-term relationship
between the two companies," said Jack A. Hockema, chairman,
president and chief executive officer, Kaiser Aluminum.
"We're pleased to extend our contract with Kaiser Aluminum," said
John Byrne, Global Partners director of Purchased Outside
Production and Common Commodities for Boeing Commercial Airplanes.
"With the continued strong demand for new airplanes, Kaiser's
support is invaluable to delivering the highest quality airplanes
to our customers."
The contract with Boeing is enabled by a previously announced
$105,000,000 expansion at Kaiser Aluminum's Trentwood Rolling Mill
in Spokane, Washington.
Boeing is the world's leading aerospace company and the largest
manufacturer of commercial jetliners and military aircraft
combined. With additional capabilities in rotorcraft, electronic
and defense systems, missiles, satellites, launch vehicles and
advanced information and communication systems, the company's
reach extends to customers in 145 countries. In terms of sales,
Boeing is the largest U.S. exporter.
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on
Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a
number of its commodity businesses during course of its cases.
Corinne Ball, Esq., at Jones Day, represents the Debtors in their
restructuring efforts. Lazard Freres & Co. serves as the Debtors'
financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III,
Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes
represent the Debtors' Official Committee of Unsecured Creditors.
The Debtors' Chapter 11 Plan became effective on July 6, 2006. On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 104;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 609/392-0900)
KERZNER INTERNATIONAL: Completes Going-Private Transaction
----------------------------------------------------------
Kerzner International Limited, through its subsidiaries, completed
the going-private transaction approved on Aug. 28, 2006, at an
extraordinary general meeting of the Company's shareholders.
As a result of the transaction, each issued and outstanding
ordinary share of the Company was cancelled and converted
automatically into the right to receive $81 in cash, without
interest.
The transaction was led by the Company's Chairman, Sol Kerzner,
and its Chief Executive Officer, Butch Kerzner, and an investor
group including Istithmar PJSC, Whitehall Street Global Real
Estate Limited Partnership 2005, Colony Capital LLC, Providence
Equity Partners, Inc., and The Related Companies, L.P.
Shareholders of the Company who have stock certificates in their
possession will receive instructions by mail from The Bank of
New York, the paying agent, concerning how and where to forward
their certificates for payment.
In connection with the transaction, the Company and its wholly
owned subsidiary, Kerzner International North America, Inc.,
tendered to purchase and solicited consents relating to all of
their outstanding 6-3/4% Senior Subordinated Notes due 2015, and
received tenders and consents with respect to approximately
98.7% of the aggregate outstanding principal amount of their
notes. The Company and KINA have accepted for payment all of
the tenders and consents received.
Kerzner International Limited -- http://www.kerzner.com/--
through its subsidiaries, is an international developer and
operator of destination resorts, casinos and luxury hotels. The
company's flagship brand is Atlantis, which includes Atlantis,
Paradise Island, a 2,317-room, ocean-themed destination resort
located on Paradise Island, The Bahamas -- a unique property
featuring three interconnected hotel towers built around a seven-
acre lagoon and a 34-acre marine environment that includes an
open-air marine habitat.
KERZNER INTERNATIONAL: Acquisition Cues S&P's Ratings Withdrawal
----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on Kerzner
International Ltd. following the August 31 completion of the
acquisition of the company by a private investor group.
In conjunction with the closing of the acquisition, substantially
all of the company's outstanding bond issues are expected to be
redeemed.
As reported in the Troubled Company Reporter on Aug. 8, 2006,
Standard & Poor's Ratings Services said that its ratings on
Kerzner International Ltd., including its 'BB-' corporate credit
rating, remain on CreditWatch with negative implications where
they were placed on March 20, 2006, following Kerzner's
announcement that the company would be acquired by a private
investor group led by the company's Chairman, Sol Kerzner, and its
Chief Executive Officer, Butch Kerzner.
K&F INDUSTRIES: Net Income Up 22% in Quarter Ended June 30
----------------------------------------------------------
K&F Industries Inc. earned $11,302,000 of net income for the
quarter ended June 30, 2006, a 22% increase, compared with the
quarter ended June 30, 2005, net income of $9,217,000.
The Company's net sales for the three months ended June 30, 2006,
was $102,653,000 compared with net sales of $90,302,000 for the
same period in 2005.
At June 30, 2006, the Company had total assets of $1,413,086,000,
total liabilities of $1,049,509,000, and total stockholder's
equity of $363,577,000.
Full-text copies of the Company's financial statements for the
quarter ended June 30, 2006, are available for free at:
http://researcharchives.com/t/s?1130
Headquartered in White Plains, New York, K&F Industries Inc. --
http://www.kandfindustries.com/-- designs, develops, manufactures
and distributes wheels, brakes and brake control systems for
commercial, military and general aviation aircraft, and the
manufacture of materials for fuel tanks, iceguards, inflatable oil
booms and various other products made from coated fabrics for
military and commercial uses.
* * *
K&F Industries Inc.'s bank loan debt and subordinated debt carry
Moody's B2 and Caa1 ratings respectively. The ratings were placed
on Feb. 3, 2005 with a stable outlook. The Company's long-term
local and foreign issuer credits carry Standard & Poor's B+
ratings with a stable outlook.
LDC OPERATING: U.S. Trustee Wants to Determine Case Closing Status
------------------------------------------------------------------
R. Michael Bolen, the U.S. Trustee for Region 5, asks the
Honorable Gerald H. Schiff of the U.S. Bankruptcy Court for the
Western District of Louisiana in Lake Charles to determine the
case closing status of LDC Operating, Inc.
Bryan F. Gill, Jr., the Chapter 7 Trustee of the Debtor, submitted
a Trustee Interim Report for the period ended June 30, 2006. The
report indicated that all assets were fully administered and the
claims bar date had passed.
The report also indicated that the projected date for the Chapter
7 Trustee's Final Report is Sept. 30, 2006.
The U.S. Trustee requests the Chapter 7 Trustee to provide current
information on the case status and the actions necessary before
the case can be closed.
The U.S. Trustee also wants the Court to set a deadline for the
Chapter 7 Trustee to submit his Final Report if his projected
deadline is not met.
LDC Operating, Inc., filed for chapter 11 protection on Aug. 16,
2001 (Bankr. W.D. La. Case No. 01-21063). Philip G. Caire, Esq.,
at Baton Rouge, La., represented the Debtor. The Court approved
the conversion of the case to a chapter 7 proceeding on March 18,
2002. Bryan F. Gill, Jr., is the Chapter 7 Trustee and John L.
Van Norman, III, Esq., at Lake Charles, La., represents the
Chapter 7 Trustee.
LEVITZ HOME: Ct. OKs Pact Permitting Panel to Bring Estate Actions
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a stipulation between Levitz Home Furnishings, Inc., its
debtor-affiliates and their Official Committee of Unsecured
Creditors allowing the Committee to commence Estate Actions, on
behalf of the Debtors' estates, without the necessity of first
filing a motion seeking authority to do so or further
order of Court.
The order authorizing the sale of substantially all the Debtors'
assets to PLVTZ, LLC, and the Pride Capital Group, pursuant to an
Asset Purchase Agreement dated as of Nov. 30, 2005, included the
Debtors' right, title and interest in avoidance actions and other
causes of action, as defined in the APA.
The Sale Order also established a trust for the benefit of general
unsecured creditors, which trust is a product of an agreement
between the Official Committee of Unsecured Creditors and Prentice
Capital Management, L.P.
A full-text copy of the GUC Trust is available for free at
http://researcharchives.com/t/s?fc7
Despite the terms of the Sale Order and APA, which provide the
Debtors with, among other things, the authority to assign right,
title and interest in the Estate Actions to the Purchasers,
neither the Purchasers nor the DIP Lender ever caused the Debtors
to exercise that authority.
Accordingly, the Debtors, the Creditors Committee, and PLVTZ
acknowledged and affirmed that the Estate Actions have at all
times remained in the possession of the Debtors' estates.
In accordance with the terms of the GUC Trust, the DIP Lender and
the GUC Trust, will share any and all proceeds of the Estate
Actions.
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc. http://bankrupt.com/newsstand/or
215/945-7000)
LONDON FOG: Court Grants Preliminary Injunction Against Broome
--------------------------------------------------------------
Brothers Steven and David Greenstein acquired control of Homestead
Holdings, Inc., from Broome & Wellington in 2004. David
Greenstien is the chief executive officer of London Fog Group,
Inc., while Steven Greenstein is the chief operations officer.
Homestead Acquisition
Under the acquisition agreement, the Greensteins guaranteed
Greenco Enterprises Co., Inc.'s obligations to pay the purchase
price, as well as all of Greenco's other obligations. Greenco was
initially set up as Homestead's parent, with negligible assets.
The acquisition agreement also selected English law as its
governing law, and contained an English choice of forum clause as
well.
Broome Dispute
When London Fog and its affiliates, which included Homestead,
filed for bankruptcy on Mar. 20, 2006, Broome filed a proof of
claim just slightly in excess of $7 million in Homestead's case.
Shortly after, Broome sent a letter to the Greensteins indicating
that it would file a suit on all guaranties and file that lawsuit
in England.
Homestead filed an adversary proceeding objecting to the proof of
claim and asserted various counterclaims. Homestead also sought a
preliminary injunction against Broome's prosecution on any action
on the guaranties citing:
* the full attention of the Greensteins was necessary to
Homestead's reorganization and
* that prior determination of the guaranty claim in England
would have adverse consequences on the determination of the
proof of claim of in the bankruptcy court.
Ninth Circuit Standards
In deciding whether to grant a preliminary injunction, the Hon.
Bruce A. Markell of the U.S. Bankruptcy Court for the District of
Nevada said that according to the Ninth Circuit, "[t]he standard
for granting a preliminary injunction balances the plaintiff's
likelihood of success against the relative hardship of the
parties."
The Ninth Circuit, Judge Markell says, recognized two sets of
criteria that can be used to test the appropriate balance:
* the first is a traditional test, under which a plaintiff
must show:
(1) a strong likelihood of success on the merits,
(2) the possibility of irreparable injury to plaintiff
if preliminary relief is not granted,
(3) a balance of hardships favoring the plaintiff, and
(4) advancement of the public interest; and
* the second test requires a plaintiff to show either a
combination of probable success on the merits and the
possibility of irreparable injury or that serious questions
are raised and the balance of hardships tips sharply in his
favor.
Modified Version
Judge Markell relates that to take into account the balancing
required by the Ninth Circuit, he adopted a modified version of
the traditional standard for preliminary injunctive relief, first
stated more than twenty years ago:
* first is that there be the danger of imminent, irreparable
harm to the estate or the debtor's ability to reorganize;
* second, there must be a reasonable likelihood of a
successful reorganization.
* third, the court must balance the relative harm as between
the debtor and the creditor who would be restrained.
* fourth, the court must consider the public interest; this
requires a balancing of the public interest in successful
bankruptcy reorganizations with other competing societal
interests.
Thus, under this criterions, Homestead must show:
* irreparable harm to Homestead's estate or to its ability
to reorganize;
* a reasonable likelihood of a successful reorganization;
* that there is an appropriate balance between the relative
harm as between the debtor and the creditor; and
* that the injunction would be in the public interest.
Homestead's Case
Judge Markell says that injunctions are not lightly granted, and
the benefits of bankruptcy are not casually extended to
nondebtors. However, in this case, when the appropriate balancing
is done, Homestead has made out a sufficient case for a limited
injunction. Diverting key personnel - the Greensteins - would
irreparably harm Homestead's reorganization process. Judge
Markell says that although Homestead has not shown that a
successful reorganization is likely, it has shown that it is a
likely candidate for a reorganization, and that it has taken
significant steps to achieve a reorganization. Against this,
Broome has insisted on its important and indisputable contract
rights, but it has not shown any real prejudice from any delay in
filing an English proceeding.
While the public interest in the sanctity of contract and the
respect due to foreign proceedings is high, it is counterbalanced
by the local interest in reorganization and the speedy resolution
of claims. A limited duration for the injunction preserves the
principle benefits of these rights for Broome while allowing
Homestead to reorganize.
Judge Markell ruled that an injunction is appropriate, but only on
terms that balance the interests.
Terms of the Injunction
Based upon the factors and analysis above, Judge Markell will
issue an injunction that will expire on the effective date of any
plan confirmed in Homestead's case or on Dec. 31, 2006, whichever
comes first.
While the injunction is in effect, Judge Markell ruled that the
Greenstein brothers and Greenco may not transfer any of their
assets except in the ordinary course of business without prior
written notice to, or prior written consent of, Broome and after
court approval with prior written consent of Broome. In addition,
to the extent that any limitations or other similar period may run
or expire between or among the parties during the pendency of
the injunction, that limitation or other period shall be extended.
Stephen R. Harris, Esq., Belding, Harris & Petroni, Ltd., and
Brian A. Jennings, Esq., Alan D. Smith, Esq., at Perkins Coie LLP,
Harry H. Schneider, Esq., Perkins Coie, LLP, represent Homestead
Holdings. Gerald M. Gordon, Esq., and Talitha B. Gray, Esq., in
Las Vegas, Nevada, represent Broome.
Kaaran E. Thomas, Esq., in Reno, Nevada, represented the Official
Committee of Unsecured Creditors in the adversary proceeding.
Nick Strozza, Esq., in Reno, Nevada, represent the U.S. Trustee
for Region 17.
Judge Markell's decision is published at 2006 WL 2037344.
About London Fog
Headquartered in Seattle, Washington, London Fog Group, Inc.,
-- http://londonfog.com/-- designs and retails the latest styles
in jackets and other professional apparel. The company and six of
its affiliates filed for chapter 11 protection on March 20, 2006
(Bankr. D. Nev. Case No. 06-50146). Stephen R. Harris, Esq., at
Belding, Harris & Petroni, Ltd., represents the Debtors in their
restructuring efforts. Avalon Group, Ltd., serves as the Debtors'
financial advisor. Aron M. Oliner, Esq., at Buchalter Nemer,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they
estimated assets and debts between $50 million to $100 million.
In a filing with the U.S. Securities and Exchange Commission,
Iconix Brand Group, Inc., disclosed that on Aug. 28, 2006, it
completed the acquisition of the London Fog trademarks and certain
related intellectual property assets from London Fog Group Inc.
for $30.5 million in cash and 482,423 shares of the Registrant's
common stock.
LYONDELL CHEMICAL: Tenders Offer for 9.625% Series A Secured Notes
------------------------------------------------------------------
Lyondell Chemical Company has commenced a cash tender offer for
all of its outstanding $849,160,000 aggregate principal amount of
its 9.625%, Series A, Senior Secured Notes due 2007.
Relative to the offer, the Company is soliciting consents from
holders of Notes to effect certain proposed amendments to the
indenture governing the Notes, including the elimination of
substantially all the restrictive covenants, certain events of
default, and certain other provisions.
The Company intends to fund the Offer with proceeds from a
financing transaction.
The Offer will expire on Oct. 2, 2006 and the Consent Solicitation
will expire on Sept. 18, 2006. Holders who validly tender Notes
will be deemed to have validly delivered consents related to such
Notes.
The total consideration includes a consent payment of $30 per
$1,000 principal amount of Notes to holders who validly tender and
validly deliver consents, at or prior to the Consent Payment
Deadline. In addition, accrued and unpaid interest from the last
interest payment date to, but not including, the applicable
payment date will be paid on all validly tendered and accepted
Notes.
J.P. Morgan Securities Inc. is the exclusive dealer manager for
the Offer and solicitation agent for the Consent Solicitation.
Questions regarding the Offer and the Consent Solicitation may be
directed to J.P. Morgan Securities Inc., at (212) 270-7407 or
(800) 245-8812 (U.S. toll-free).
Copies of the Offer and Consent Statement and related materials
may be obtained from the Information Agent, D.F. King & Co., Inc.,
at (800) 758-5378 (U.S. toll-free) and (212) 269-5550 (collect).
Headquartered in Houston, Texas, Lyondell Chemical Company
(NYSE: LYO) is North America's third-largest independent, publicly
traded chemical company. Lyondell manufacturers basic chemicals
and derivatives including ethylene, propylene, titanium dioxide,
styrene, polyethylene, propylene oxide and acetyls. It also
refines heavy, high-sulfur crude oil and produces gasoline-
blending components. It operates on five continents and employs
approximately 11,000 people worldwide.
* * *
As reported in the Troubled Company Reporter on Aug. 22, 2006
Fitch Ratings affirmed Lyondell Chemical Company's issuer default
rating at 'BB-'; senior secured credit facility at 'BB+'; and
senior secured notes and debentures at 'BB+'. At the same time,
Fitch downgraded Lyondell's senior subordinated notes rating to
'B' from 'B+' and assigns a 'BB+' rating to Lyondell's $800
million senior secured revolving credit facility and $2.65 billion
senior secured term loan.
MOHEGAN TRIBAL: Moody's Holds Low-B Ratings on Senior Debts
-----------------------------------------------------------
Moody's Investors Service affirmed Mohegan Tribal Gaming
Authority's Ba1 corporate family rating, Ba1 secured bank loan
rating, Ba2 senior debt rating, and Ba3 senior subordinated debt
ratings. The ratings outlook is stable.
The ratings and stable outlook consider that MTGA's positive
operating trends and competitive profile are strong enough to
materially offset its high leverage relative to its current
rating. Connecticut legislation currently prohibits all gaming in
the state except for Mohegan Sun and Foxwoods Resort Casino. The
ratings also take into account that the development of Pocono
Downs will ultimately have a positive impact on MTGA's credit
profile, help to reduce its single-site dependence, and provide
some hedge against potential competition in the Northeast. Debt or
the 12-month period ended June 30, 2006 was 4.1x and includes debt
related to the $280 million acquisition of Pocono Downs which has
not yet been developed into a racino.
Moody's previous rating action on MTGA was on Feb. 4, 2006 with
the assignment of a Ba2 rating to its $250 million senior notes
due 2013 and a Ba3 rating to its $200 million senior subordinated
notes due 2015.
The Mohegan Tribal Gaming Authority is an instrumentality
established by the Mohegan Tribe of Indians of Connecticut,
with the exclusive power to operate the Mohegan Sun casino in
Uncasville, Connecticut. Total reported net revenue for the
12-month period ended June 30, 2006 was $1.4 billion. Total
outstanding debt reported was $1.2 billion.
NANTICOKE HOMES: Court Approves Pact Paying $665,150 to Estate
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the settlement agreement entered into by Nanticoke Homes Inc., the
Official Committee of Unsecured Creditors in Nanticoke Homes'
Chapter 11 case, John Mervine, Sr., John Mervine, Jr., Gregory
Mervine, the Courts of Greenwood LLC, and KMR Management Inc.
The Settlement Agreement combines the separate actions to recover
any claims that the Debtor and the Committee each filed against
KMR, the Mervines, and the Courts of Greenwood.
Accordingly, to avoid the risks, delay, and expense of litigation,
the Mervines, the Courts, and KMR agreed to contribute to a
$1,155,000 settlement fund, which will pay $665,150 to the estate
upon satisfaction of the conditions stated in the Settlement
Agreement.
Greenwood, DE-based modular home builder Nanticoke Homes Inc.
filed for chapter 11 protection on Mar. 1, 2002 (Bankr. Del. Case
No. 02-10651). Lisa Cresci McLaughlin, Esq., and Michael F.
Duggan, Esq., at Phillips, Goldman & Spence represents the Debtor
in its restructuring efforts. James E. Huggett, Esq., at Margolis
Edelstein and Stephanie Ann Fox, Esq., at Klehr Harrison Harvey
Branzburg & Ellers represent the Official Committee of Unsecured
Creditors. When the Company filed for protection from its
creditors, it listed estimated debts and assets of more than $10
million.
NATIONSRENT COS: Completes $1 Bil. Asset Sale to Sunbelt Rentals
----------------------------------------------------------------
Sunbelt Rentals, Inc., has completed the acquisition by merger of
NationsRent Companies, Inc.
The acquisition, valued at over $1 billion, of NationsRent by
Sunbelt Rentals forms the third largest equipment rental provider
in the US rental market. The combined company will continue to
deliver exceptional customer service from over 470 locations,
including the convenience of homeowner and contractor services at
100 NationsRent At Lowe's locations, over $2 billion in rental
fleet, new and used equipment sales, maintenance and repair
services for customer-owned equipment, 24-hour emergency service,
and the Sunbelt Rentals Guarantee.
"We are pleased that the acquisition is completed and we can work
to bring the two organizations together," Cliff Miller, President
and Chief Executive Officer of Sunbelt Rentals, commented. "Our
new geographic footprint and expanded product and service offering
helps achieve Sunbelt's market strategy. NationsRent is a great
company because of the people who serve the customer every day and
we look forward in joining forces with them in that effort."
"The joining of NationsRent and Sunbelt brings together two
companies with a strong focus on providing customers with
solutions and excellent service," Brendan Horgan, Sunbelt Rentals
Chief Operating Officer, also stated. "The combined company gives
us the opportunity to offer more options and continue to set the
industry standard of service and value."
"The NationsRent team is excited to join one of the fastest
growing equipment rental companies in the U.S. There will be
greater opportunities for career growth and development as Sunbelt
continues to grow and set the standard for rental operations in
the industry," Bryan Rich, Co-Chairman and Executive Director of
NationsRent, who is joining the Sunbelt management team, stated.
About Ashtead
Ashtead Group -- http://www.ashtead-group.com/-- based in the
U.K. together with its U.S. subsidiary, Sunbelt Rentals, provides
equipment rental services. The company is publicly traded on the
London Stock Exchange.
About Sunbelt Rentals
Headquartered in Charlotte, North Carolina, Sunbelt Rentals, Inc.
-- http://www.sunbeltrentals.com/-- a wholly-owned subsidiary of
Ashtead Group PLC, provides equipment solutions for the
industrial, construction, and municipal markets, plus the DIY
markets, from its network of over 470 branches in 35 states
including the convenience of homeowner and contractor services at
100 NationsRent At Lowe's locations. The company also offers new
and used equipment sales, maintenance and repair services for
customer-owned equipment, 24-hour emergency service, and the
Sunbelt Rentals Guarantee.
About NationsRent
Headquartered in Fort Lauderdale, Florida, NationsRent Companies
-- http://www.nationsrent.com/-- specializes in rentals and also
sells new and used equipment with related merchandise, parts and
supplies, and provides maintenance and repair services.
NationsRent offers a broad range of high- quality construction
equipment with a focus on superior customer service at affordable
prices with convenient locations in major metropolitan markets
throughout the United States.
NATIONSRENT COS: Debt Repayment Prompts S&P to Withdrew Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services removed its ratings on
NationsRent Cos. Inc., including its 'B+' corporate credit rating,
from CreditWatch, and then withdrew them. The ratings had been
placed on CreditWatch with positive implications on July 20, 2006,
following NationsRent's announcement that it was being acquired by
higher rated Ashtead Group plc.
At that time, Standard & Poor's indicated that it would withdraw
the ratings when the transaction closed and NationsRent debt was
repaid, which occurred on Aug. 31, 2006.
NEOPLAN USA: Can Access Lenders' Cash Collateral Until November 12
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware allowed
Neoplan USA Corporation and its debtor-affiliates to use cash
collateral securing repayment of their indebtedness to their
lenders, until Nov. 12, 2006.
The Debtors will use the cash collateral to satisfy their ongoing
cash requirements to fund ordinary course expenditures.
A full-text copy of the Debtor's cash collateral budget is
available for free at http://ResearchArchives.com/t/s?1126
The Debtors are indebted to the lenders pursuant to an Amended and
Restated Loan and Security Agreement dated Aug. 27, 2003, in the
principal amount of $17,937,581.14, as of their bankruptcy filing.
Neoplan and IAP Intermodal LLC are co-borrowers under the Loan
Agreement. IAP East Coast, Inc., and IAP Acquisition Corp., are
guarantors under separate guaranty agreements.
Pursuant to the Loan Agreement, the obligations are secured by a
continuing perfected lien on all of the Debtors' assets.
To provide the lenders with adequate protection required under 11
U.S.C. Sec. 363 for any diminution in the value of its collateral,
the Debtors grant the lenders replacement liens with the same
extent, validity and priority as the prepetition lien.
Headquartered in Denver, Colorado, Neoplan USA manufactures
standard floor buses, low floor buses, and articulated buses.
Neoplan USA licenses its designs from the German corporation,
Neoplan. Neoplan USA is entirely separate from Neoplan in
Germany. The Company, its parent, IAP Acquisition Corporation,
and two affiliates, filed for chapter 11 protection on Aug. 17,
2006 (Bankr. D. Del. Lead Case No. 06-10872). Tobey M. Daluz,
Esq., at Ballard Spahr Andrews & Ingersoll LLP, represents the
Debtors. When Neoplan USA filed for protection from its
creditors, it listed $13,696,911 in total assets and $59,009,471
in total debts.
NEOPLAN USA: Section 341(a) Meeting Scheduled for September 14
--------------------------------------------------------------
The U.S. Trustee of Region 3 will convene a meeting of Neoplan USA
Corporation and its debtor-affiliates' creditors at 10:00 a.m., on
Sept. 14, 2006, in Room 5209, 5th Floor, J. Caleb Boggs Federal
Building, 844 King Street in Wilmington, Delaware.
This is the first meeting of creditors required under Section
341(a) of the 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 officer of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Denver, Colorado, Neoplan USA manufactures
standard floor buses, low floor buses, and articulated buses.
Neoplan USA licenses its designs from the German corporation,
Neoplan. Neoplan USA is entirely separate from Neoplan in
Germany. The Company, its parent, IAP Acquisition Corporation,
and two affiliates, filed for chapter 11 protection on Aug. 17,
2006 (Bankr. D. Del. Lead Case No. 06-10872). Tobey M. Daluz,
Esq., at Ballard Spahr Andrews & Ingersoll LLP, represents the
Debtors. When Neoplan USA filed for protection from its
creditors, it listed $13,696,911 in total assets and $59,009,471
in total debts.
NOVELIS INC: Will Proceed with Sale of Certain Brazilian Assets
---------------------------------------------------------------
The resignation of Brian W. Sturgell as Novelis Inc.'s chief
executive officer will not change plans to sell some of the firm's
assets in Brazil, a company press official told Business News
Americas.
According to BNamericas, Novelis would consider selling:
-- a primary aluminum plant in Bahia;
-- an integrated mill in Minas Gerais, which includes a
bauxite mine plus alumina and aluminum production;
-- a 50% stake in the 140-megawatt Risoleta Neves
hydroelectric power plant in Minas Gerais, a 50:50 JV
with Brazilian miner CVRD;
-- eight small hydroelectric plants; and
-- a 25% stake in Sao Paulo state-based calcined coke
producer Petrocoque.
BNamericas reported in July that Novelis' asset sale aims to align
Brazil with firm's worldwide strategy to focus on the rolled
aluminum area.
Based in Atlanta, Georgia, Novelis Inc. (NYSE: NVL) (TSX: NVL)
-- http://www.novelis.com/-- provides customers with a regional
supply of technologically sophisticated rolled aluminum products
throughout Asia, Europe, North America, and South America. The
company operates in 11 countries and has approximately 13,000
employees. Through its advanced production capabilities, the
company supplies aluminum sheet and foil to the automotive and
transportation, beverage and food packaging, construction and
industrial, and printing markets.
NOVELIS INC: Spin-Off Prompts Moody's to Downgrade Ratings
----------------------------------------------------------
Moody's Investors Service downgraded Novelis Inc.'s corporate
family rating to B1 from Ba3, the bank revolver rating to Ba3 from
Ba2, the bank term loan rating to Ba3 from Ba2 and its senior
unsecured notes to B2 from B1.
Moody's also downgraded Novelis Corp's bank term loan rating to
Ba3 from Ba2. These ratings remain under review for further
possible downgrade. At the same time, Moody's lowered Novelis'
speculative grade liquidity rating to SGL-4 from SGL-3.
Ratings downgraded are:
Novelis Inc.
* Corporate Family Rating, Downgraded to B1 from Ba3
* Speculative Grade Liquidity Rating, Downgraded to SGL-4 from
SGL-3
* Senior Secured Bank Credit Facility, Downgraded to Ba3 from
Ba2
* Senior Unsecured Regular Bond/Debenture, Downgraded to B2
from B1
Novelis Corporation
* Senior Secured Bank Credit Facility, Downgraded to Ba3 from
Ba2
The downgrades reflect the challenges Novelis faces in its 2006
performance due to its remaining exposure to certain contracts
with price ceilings and the more negative than expected impact
of the differential between used beverage can prices and primary
aluminum prices. In addition, the downgrade acknowledges the
increased costs associated with the review and restatement of
Novelis' financial statements since its spin-off from Alcan, the
increased interest costs due to waivers required under the bank
agreements, and the step-up in the interest rates on the notes due
to non-registration.
While the rating considers the leading position of Novelis in the
can sheet and conversion markets as well as its large geographic
scope and global footprint, Moody's sees 2006 as a transition year
for Novelis both operationally and from a management and reporting
perspective. Therefore, Moody's expects the time frame for
meaningful deleveraging to be more protracted than anticipated.
The continuing review reflects the company's delay in filing
financial statements for 2006 to date and the consequent default
notices received from bondholders. The company filed its 2005 10K
on August 25, 2006, within the required time frame. To the extent
the company is able to file its 2006 10Q's within the time frame
specified in the bank waivers and bondholders default notices, and
obtain any covenant relief that might be required, Moody's expects
the ratings will likely be confirmed.
The change in the speculative grade liquidity rating to SGL-4 from
SGL-3 reflects the potential for covenant shortfalls later in the
year as reduced revenues and increased costs erase existing
covenant cushions. In addition, step-ups in required ratios will
further stress the company's ability to comply. As a consequence,
the company remains vulnerable to the bank's willingness to waive
and or adjust covenant levels.
Headquartered in Atlanta, Georgia, Novelis had revenues of
$8.4 billion in 2005.
PARMALAT USA: Ferguson Files Civil Case Against Farmland, et al.
----------------------------------------------------------------
George H. Ferguson, III, asks the U.S. District Court for the
Northern District of Georgia to find that Farmland Dairies, LLC,
Parmalat Atlanta Dairies, Parmalat USA Corp., and Flagship
Holdings, Inc., violated the Age Discrimination in Employment Act
and the Americans with Disabilities Act in terminating employees
on the basis of age and their perceived disabilities.
Mr. Ferguson brought the suit on behalf of himself and all
employees aged 40 and above, at Farmland's Atlanta, Georgia
facilities, who were laid off in May 2005.
Mr. Ferguson, who was Farmland's director of Human Resources for
the Atlanta Region, was terminated following the sale of
Farmland's Atlanta business to Flagship.
Mr. Ferguson tells District Court Judge Jack T. Camp that his
layoff was the result of Farmland's application of age-neutral
selection rules or rules that had the effect of screening out or
tending to screen out individuals with disability, those
perceived to have a disability, or those with a record of
disability.
Mr. Ferguson also relates that Flagship officials doing due
diligence for the sale of the Atlanta operations bragged that
they were going to have everyone terminated and then rehire only
the ones that they wanted.
Mr. Ferguson notes that management was aware that he was over 40
years old and has diabetes. Mr. Ferguson also tells the Court
that he could and still can perform all the essential functions
of his position.
Victoria L. Helms, Esq., at Helms & Greene, LLC, in Atlanta,
Georgia, contends that Farmland's and Flagship's unlawful actions
were deliberate, wanton, willful and reckless.
Mr. Ferguson seeks reinstatement of the laid-off employees and
payment of back pay, benefits, and punitive and compensatory
damages.
Mr. Ferguson also asks the District Court to certify the class
pursuant to Rule 23(b)(3) of the Federal Rules of Civil
Procedure.
Defendants Want Complaint Dismissed
Farmland Dairies LLC and Flagship Atlanta Dairy, LLC, ask Judge
Camp to dismiss the complaint.
J. Larry Stine, Esq., at Wimberly, Lawson, Steckel, Weathersby &
Schneider, P.C., in Atlanta, Georgia, on Farmland's behalf,
points out that:
(1) The Complaint fails to state a claim upon which relief
can be granted;
(2) Class actions pursuant to Rule 23 of the Federal Rules of
Civil Procedure are not permitted for actions under the
ADEA;
(3) Adverse impact is not a viable theory since all the
Farmland employees in the Atlanta dairy operations were
terminated effective with the sale of the Atlanta dairy
operations;
(4) Mr. Ferguson was terminated for reasons other than his
age and alleged disability;
(5) Mr. Ferguson was terminated from his employment for
legitimate nondiscriminatory reasons;
(6) Some or all of the monetary damages sought by Mr.
Ferguson may be barred by his failure to mitigate
damages;
(7) Some or all of the claims asserted by Mr. Ferguson may be
barred by the statute of limitations;
(8) Farmland acted in good faith and had reasonable grounds
for believing that its actions were not in violation of
ADEA or ADA;
(9) Mr. Ferguson's allegations do not rise to the level
sufficient for a claim of punitive damages; and
(10) Mr. Ferguson released Farmland from all liability for
valuable consideration.
Mr. Stine tells the Court that the Action is frivolous and has no
basis in fact or law. Mr. Stine adds that Parmalat Atlanta
Dairies is not a legal entity and Parmalat USA is no longer in
existence.
Flagship raised similar arguments. Flagship also notes that Mr.
Ferguson sued a non-existent party, Flagship Holdings, Inc.
Flagship is represented in the suit by Ronald G. Polly, Jr.,
Esq., at Hawkins & Parnell, LLP, in Atlanta, Georgia.
Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue. The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents. The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP, represent the Debtors. When the U.S.
Debtors filed for bankruptcy protection, they reported more than
$200 million in assets and debts. The U.S. Debtors emerged from
bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue
No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000,
http://bankrupt.com/newsstand/)
PERFORMANCE TRANSPORTATION: Has Until Nov. 30 to File Ch. 11 Plan
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
extended the period within which Performance Transportation
Services, Inc., and its debtor-affiliates have the exclusive right
to:
(a) file a plan, through and including Nov. 30, 2006; and
(b) solicit and obtain acceptances of that plan, through
Jan. 29, 2007.
The Debtors asked for the extensions in order to continue
discussions with their customers, labor unions and certain debt
holders.
The Debtors are negotiating with their customers and labor unions
concerning concessions that will help strengthen the estate's
financial and operational viability. The outcome of these
negotiations, the Debtors say, will help increase profitability,
maximize the value of the Debtors' estates and creditor recovery,
and develop and confirm a plan of reorganization.
About Performance
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. 13; Bankruptcy
Creditors' Service, Inc. http://bankrupt.com/newsstand/or
215/945-7000)
PERFORMANCE TRANSPORTATION: Can Assume 22 Real Property Leases
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
authorized Performance Transportation Services, Inc., and its
debtor-affiliates to assume 22 unexpired non-residential real
property leases with:
(1) JF Barton;
(2) Union Pacific Railroad;
(3) SP&E, LLC;
(4) Nichols Enterprises, Inc.;
(5) Armand Cerrone, Inc.;
(6) General Motors Corp.;
(7) D.C.A.R., Inc.;
(8) Equity Industrial Partners Corp.;
(9) Volkswagen of America;
(10) CSX Transportation;
(11) Northeast Vehicle Services, LLC;
(12) Staubach Global Services;
(13) Ford Motor Land Services Corp.;
(14) Union Pacific;
(15) Furnkas Properties, LLC;
(16) Metprop, LLC; and
(17) Senatore & Procopio
The Court further fixes the cure amounts for the leases at $0,
except as to the Debtors' contracts with:
Proposed
Counterparty Cure Amount
------------ -----------
Armand Cerrone $6,173
CSX Transportation 1,175
Northeast Vehicle 714
Senatore & Procopio 6,160
The Leases pertain to property in which the Debtors conduct
activities necessary to the operation of their vehicle
distribution business.
About Performance
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. 13; Bankruptcy
Creditors' Service, Inc. http://bankrupt.com/newsstand/or
215/945-7000)
PERFORMANCE TRANSPORTATION: Finis Hodge Wants Stay Lifted
---------------------------------------------------------
Finis Hodge asks the U.S. Bankruptcy Court for the Western
District of New York to lift the automatic stay to allow it to
continue proceedings in a personal injury action against Debtor
Hadley Auto Transport. The action is currently pending before the
Third District Court for Salt Lake County, in Utah.
Bruce W. Hoover, Esq., at Goldberg Segalla, LLP, in Buffalo, New
York, tells the Court that Mr. Hodge suffered injuries when a
semi-truck owned and operated by Hadley collided with the vehicle
he was driving.
Among other injuries, Mr. Hodge suffered serious and permanent
injuries to his arm affecting his day-to-day life, Mr. Hoover
says.
Mr. Hoover points out that the Debtor's liability, as well the
litigation costs that will be incurred in the Action are covered
by financial responsibility requirements maintained by the Debtor
pursuant to 49 CFR Part 387 and federal law requires application
of the insurance coverage without regard to the financial solvency
of the insured.
Since federal law was designed to give special protection to the
public from negligence of carriers, allowing Mr. Hodge to continue
his Action would not unfairly deplete the Debtors' estates, Mr.
Hoover asserts.
Furthermore, Mr. Hoover maintains that lifting the stay will not
prejudice any creditor or party-in-interest due to the liability
insurance coverage and self-insurance, which will cover all
litigation costs and the Debtor's ultimate liability on any
judgment or settlement.
C. Ryan Christensen, Esq., at Berret and Associates, L.C.,
disclosed in an affidavit that during Mr. Hodge's accident, the
Debtor was insured by Discovery Property & Casualty Insurance
Company.
The terms of the Policy provide coverage for any loss or accident
for $2,000,000, Mr. Christensen notes.
Furthermore, Mr. Christensen says that the Debtor also self-
insures for its first $500,000 to meet federally mandated minimum
financial responsibility requirements.
Lifting the automatic stay does not violate the protections
bankruptcy laws were meant to provide, Mr. Hoover says.
About Performance
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. 13; Bankruptcy
Creditors' Service, Inc. http://bankrupt.com/newsstand/or
215/945-7000)
PLYMOUTH RUBBER: Sold to Chrysalis Capital for Undisclosed Sum
--------------------------------------------------------------
Chrysalis Capital Partners closed the acquisition of Plymouth
Rubber Company Inc. and its subsidiary, Brite-Line Technologies,
Inc., for an undisclosed amount.
Chrysalis closed the acquisition after Plymouth Rubber's joint
plan of reorganization was approved by a U.S. Bankruptcy Court in
Boston, Massachusetts. To complete the transaction, Chrysalis
provided new equity, arranged senior exit financing from Wells
Fargo Business Credit, Inc., and negotiated consensual settlements
with certain pre-petition creditors.
"We are very pleased to work with the Chrysalis team on this
transaction," says Maurice Hamilburg, president and chief
executive officer of Plymouth Rubber, who is investing in the
transaction alongside Chrysalis and will remain chief executive
officer of Plymouth Rubber.
"We were initially impressed by their quick insights and
decisiveness, coupled with their knowledge and experience in the
complex bankruptcy procedures needed to address the company's
financial issues. As the transaction continued, our confidence
was increased by the speed at which Chrysalis engaged our company,
negotiated agreements with the interested third-parties, and
focused its efforts on devising plans for constructive operational
change that can be implemented while maintaining full service to
our customers."
Plymouth Rubber and Brite-Line filed for Chapter 11 protection in
July 2005, due to disputes between their secured lenders and the
Pension Benefit Guaranty Corporation. This uncertainty has been
eliminated by the bankruptcy settlement, under which the company's
Pension Plan has been terminated and its liabilities assumed by
the PBGC, while the claims of the pre-petition secured lenders
have been otherwise compromised or satisfied.
About Chrysalis Capital Partners
Chrysalis Capital Partners, Inc. -- http://www.ccpfund.com/-- is
a private equity investment firm. Chrysalis focuses on 'special
situation' investing including turnarounds, financial
restructurings, reorganizations, and recapitalizations in middle-
market companies (typically with revenues of $50 to $500 million),
across a wide range of industries throughout the United States.
Chrysalis is affiliated with Independence Capital Partners, a
family of private equity funds with over $6 billion of committed
capital under management.
About Plymouth Rubber
Headquartered in Canton, Massachusetts, Plymouth Rubber Company,
Inc. -- http://www.plymouthrubber.com/-- manufactures and
distributes plastic and rubber products, including automotive
tapes, insulating tapes, and other industrial tapes, mastics and
films. Through its Brite-Line Technologies subsidiary, Plymouth
manufactures and supplies highway marking products. The Company
and its subsidiary filed for chapter 11 protection on July 5, 2005
(Bankr. D. Mass. Case Nos. 05-16088 through 05-16089). Victor
Bass, Esq., at Burns & Levinson LLP, represents the Debtors in
their restructuring efforts. John J. Monaghan, Esq., at Holland &
Knight LLP, represents the Official Committee of Unsecured
Creditors. When the Debtors filed for protection from their
creditors, they estimated assets and debts between $10 million to
$50 million.
RIGEL CORP: Hires Sierra Auction as Consultant and Auctioneer
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona authorized
Rigel Corporation to employ Sierra Auction Management, Inc., as
its auctioneer and consultant.
Sierra Auction will:
a) represent the Trustee as auctioning agent to the Trustee
regarding sale of the Estate's furniture, fixtures,
equipment, inventory, vehicles, buildings and all other
assets of the Debtor's business that are the subject of
this Estate;
b) represent the Trustee as a consultant to assist with
closing down the Debtor's bakery and manufacturing
operations and facilities;
c) assist with the oversight of equipment, machinery, and
inventory removal;
d) perform all other tasks and duties associated with the
closing down of each business location that is the
subject of this Estate; and
e) provide other services as may be required from time to
time.
Sierra will bill $150 per hour for this engagement.
To the best of the Debtor's knowledge, Sierra does not hold any
interest adverse to its estate and is a "disinterested person" as
that term defined in Section 101(14) of the Bankruptcy Code.
Sierra Auction can be reached at:
Sierra Auction Management Inc.
3570 NW Grand Ave.
Phoenix, AZ 85019
Tel 602-242-7121
Fax: 602-246-1903
http://www.sierraauction.com/
Headquartered in Tempe, Arizona, Rigel Corporation, is a Krispy
Kreme franchisee. The Company also operates Godfather's Pizza,
KFC and Bruegger's Bagels' franchises. The Company filed for
chapter 11 protection on Aug. 9, 2006 (Bankr. D. Ariz. Case NO.
06-02480). Michael W. Carmel, Esq., at Michael W. Carmel, Ltd.,
represents the Debtor. When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
and $50 million.
RIVIERA HOLDINGS: Sale Plans Cues Moody's to Hold Ratings
---------------------------------------------------------
Moody's Investors Service confirmed Riviera's B2 corporate family
rating and the B2 rating of its 11% senior secured notes due 2010.
The rating outlook was changed to negative.
The rating action reflects concerns regarding Riviera's future
strategic direction given recent efforts to sell the company, the
potential that gaming revenues may be negatively impacted by lower
foot traffic to the Las Vegas hotel and casino given the closure
of several properties nearby, and a slightly weaker near term
liquidity profile given the expiration date of the company's
revolving credit facility in July 2007.
Moody's notes that the company had cash balance of $22 million as
of June 30, 2006, and is on track to generate free cash of about
$5 million to 6 million in 2006. Additionally, there are no
significant debt maturities over the next 12 months.
This concludes the review of the company's ratings for possible
downgrade that commenced on April 6, 2006.
Riviera Holdings Corporation owns and operates the Riviera Hotel
and Casino on the Las Vegas Strip and the Riviera Black Hawk
Casino in Black Hawk, Colorado. Net revenues for the trailing
twelve months ended June 30, 2006 were approximately $201 million.
SAN PASQUAL CASINO: S&P Affirms B+ Senior Unsecured Debt Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on the
Valley Center, California-based San Pasqual Casino Development
Group Inc. to positive from stable.
At the same time, the company's 'B+' issuer credit and senior
unsecured debt ratings were affirmed. SPCDG was created to
operate the Valley View Casino for the San Pasqual Band of
Diegueno Mission Indians.
"The outlook revision reflects our assessment that operating
results at the Valley View Casino have exceeded prior
expectations, despite the current construction of the expansion
project, resulting in good credit measures for the rating and
suggesting that peak leverage will be lower than previously
expected," said Standard & Poor's credit analyst Michael Scerbo.
As a result of the good operating performance and strengthened
credit measures, cushion has been established within the SPCDG's
overall financial profile in the event that construction
disruption does occur prior to the project's completion, which is
currently scheduled for the third quarter of 2007.
SPCDG does not publicly disclose its financial statements.
However, its current credit measures are good for the rating and
provide cushion in the event disruption occurs throughout the
construction period.
In addition, following the completion of the expansion, Standard &
Poor's expects SPCDG's financial profile will significantly
strengthen from current levels.
SATELITES MEXICANOS: Court OKs KCC as Notice and Balloting Agent
----------------------------------------------------------------
The Honorable Robert D. Drain, of the U.S. Bankruptcy Court for
the Southern District of New York, at the request of Satelites
Mexicanos, S.A. de C.V., appointed Kurtzman Carson Consultants
LLC, on an interim basis, as notice and balloting agent to the
Office of the Clerk of the Bankruptcy Court.
The Debtor has many foreign creditors and two classes of debt
securities in the United States that are widely held. Carmen
Ochoa Avendano, Esq., the Debtor's general counsel, explains that
the noticing and balloting requirements of the Debtor's Chapter 11
case may impose heavy administrative and other burdens on the
Court and the Clerk's Office. The retention of KCC is intended to
relieve the Clerk's Office of these burdens, she says.
According to Ms. Avendano, KCC is fully equipped to handle the
volume of mailing involved in properly sending the required
notices to creditors and other interested parties in the Debtor's
case. KCC will follow the notice and solicitation procedures
that conform to the guidelines promulgated by the Clerk of the
Court and the Judicial Conference of the United States for the
implementation of 28 U.S.C. Section 156(c), and as may be ordered
by the Court.
In addition, Ms. Avendano notes that KCC's employees are
experienced in all areas pertaining to the identification and
solicitation of holders of widely held securities. KCC has a
state-of-the-art mailing facility and is highly experienced in
dealing with the back offices of the various departments of the
banks and brokerage
KCC, Ms. Avendano continues, is one of the country's leading
Chapter 11 administrators, with experience in noticing, claims
administration, solicitation, balloting, and facilitating other
administrative aspects of Chapter 11 cases. KCC has substantial
experience in matters of the Debtor's size and complexity, and has
acted as, among other things, the official notice and balloting
agent in many large bankruptcy cases pending in the Southern
District of New York and other districts nationwide, including In
re Delphi Corporation, et al., Case No. 05-44481 (Bankr. S.D.N.Y.
2005); In re Panda Gila River, L.P., et al., Case No. 05-01143
(Bankr. D. Ariz. 2005); In re Collins & Aikman Corporation, et
al., Case No. 05-55927 (Bankr. E.D. Mich. 2005); In re Ultimate
Electronics, et al., Case No. 05-10104 (Bankr. D. Del. 2005); In
re Interstate Bakeries Corporation, et al., Case No. 04-45814
(Bankr. W.D. Mo. 2004); In re Haynes International Inc., Case No.
04-05364 (Bankr. S.D. Ind. 2004); In re NorthWestern Corporation,
Case No. 03-12872 (Bankr. D. Del. 2003); and In re NRG Energy,
Inc., et al., Case No. 03-13024 (Bankr. S.D.N.Y. 2003).
As notice and balloting agent, KCC will:
(i) distribute required notices to parties-in-interest;
(ii) solicit, collect, and tabulate acceptances and rejections
of the Debtor's Chapter 11 Plan of Reorganization from
parties entitled to vote;
(iii) maintain and update the master mailing lists of creditors;
(iv) to the extent necessary, gather data in conjunction with
the preparation of the Debtor's schedules of assets and
liabilities and statements of financial affairs; and
(v) perform other administrative tasks pertaining to the
administration of the Chapter 11 case as may be requested
by the Debtor or the Clerk's Office.
At the close of the Debtor's case, KCC will box and transport all
original documents in proper format, as provided by the Clerk's
Office, to the Federal Archives.
The Debtor will pay KCC in accordance with the parties' Agreement
For Services, dated Aug. 3, 2006. The cost of KCC's services will
be paid from the Debtor's estate as provided by 28 U.S.C. Section
156(c) and Section 503(b)(l)(A) of the Bankruptcy Code.
Prior to the filing for chapter 11 protection, the Debtor paid KCC
a $25,000 retainer, Ms. Avendano says.
A full-text copy of KCC's Agreement For Services is available at
no charge at http://ResearchArchives.com/t/s?1124
A full-text copy of KCC's Fee Structure is available at no charge
at http://ResearchArchives.com/t/s?1125
The Debtor will also indemnify and hold KCC, its officers,
employees, and agents harmless, except in circumstances of KCC's
gross negligence or willful misconduct.
Robert Q. Klamser, vice president of operations of Kurtzman
Carson Consultants, LLC, assures the Court that the Firm is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
About Satelites Mexicanos
Satelites Mexicanos, S.A. de C.V., provides fixed satellite
services in Mexico. Satmex provides transponder capacity via its
satellites to customers for distribution of network and cable
television programming, direct-to-home television service, on-site
transmission of live news reports, sporting events and other video
feeds. Satmex also provides satellite transmission capacity to
telecommunications service providers for public telephone networks
in Mexico and elsewhere and to corporate customers for their
private business networks with data, voice and video applications.
Satmex also provides the government of the United Mexican States
with approximately 7% of its satellite capacity for national
security and public purposes without charge, under the terms of
the Orbital Concessions.
The Debtor filed for chapter 11 petition on August 11, 2006
(Bankr. S.D.N.Y. Case No. 06-11868). Luc A. Despins, Esq., at
Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the
U.S. Bankruptcy proceedings. Attorneys from Galicia y Robles,
S.C., and Quijano Cortina Lopez y de la Torre give legal advice in
the Debtor's Mexican Bankrutpcy proceedings. UBS Securities LLC
and Valor Consultores, S.A. de C.V., give financial advice to the
Debtor. Steven Scheinman, Esq., Michael S. Stamer, Esq., and
Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP
give legal advice to the Ad Hoc Existing Bondholders' Committee.
Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer
Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc
Senior Secured Noteholders' Committee. As of July 24, 2006, the
Debtor has $905,953,928 in total assets and $743,473,721 in total
liabilities.
On May 25, 2005, certain holders of Satmex's Existing Bonds and
Senior Secured Notes filed an involuntary chapter 11 petition
against the Company (Bankr. S.D.N.Y. Case No. 05-13862).
On June 29, 2005, Satmex filed a voluntary petition for a Mexican
reorganization, known as a Concurso Mercantil, which was assigned
to the Second Federal District Court for Civil Matters for the
Federal District in Mexico City.
On August 4, 2005, Satmex filed a petition, pursuant to Section
304 of the Bankruptcy Code to commence a case ancillary to the
Concurso Proceeding and a motion for injunctive relief seeking,
among other things, to enjoin actions against Satmex or its assets
(Bankr. S.D.N.Y. Case No. 05-16103). (Satmex Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
SILICON GRAPHICS: Wants to Enter Into $115 Mil. Commitment Letter
-----------------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Southern District of New
York to:
-- enter into a commitment letter with Morgan Stanley Senior
Funding, Inc., and one or more of its affiliates, and
General Electric Capital Corporation, and one or more of
its affiliates, in connection with a proposed several, not
joint, commitment for a senior secured facility of up to
$115,000,000; and
-- pay the fees related to the Senior Secured Facility Letter.
The Debtors also ask Judge Lifland to grant administrative expense
priority to the Lead Lenders in connection with their claims for
the fees provided in the Fee Agreement.
According to Gary T. Holtzer, Esq., at Weil, Gotshal & Manges,
LLP, in New York, the Debtors need an exit financing facility to:
(a) repay their existing indebtedness under their DIP
Financing Facility;
(b) fund payments required to be made under the Plan on the
effective date; and
(c) meet the working capital and other corporate needs of the
Reorganized Debtors.
Under the Plan, the Debtors' exit financing facility will consist
of two facilities -- a revolving line of credit and a term loan
facility.
Mr. Holtzer relates that the Debtors, with the assistance of Alix
Partners, contacted or were contacted by approximately 18
potential lenders, and the Debtors prepared and delivered to those
potential lenders a request for proposals and certain related
diligence materials. "Based on these materials, several potential
lenders submitted initial proposals. After reviewing these
proposals, the Debtors decided to pursue further discussions in
respect of four proposals, which were among the more favorable for
the Debtors' needs."
The Debtors continued their negotiations with the four potential
lenders. During these negotiations, the Debtors, with the
assistance of Alix Partners, compared and analyzed the different
proposals and concluded that Morgan Stanley and GE offered the
most favorable terms for the Debtors' exit financing facility.
The Debtors are required to obtain Court approval of the
Commitment Letter and the Commitment Fee before Sept. 22, 2006.
The salient terms of the Commitment Letter are:
(a) GE will provide a revolving line of credit of up to
$30,000,000 while Morgan Stanley or a syndicate of
financial institutions will provide a Term Loan B of up to
$85,000,000.
(b) Advances under the Revolver are available up to the
Maximum Revolver Facility Amount, which includes a letter
of credit subfacility not to exceed $30,000,000 to be
provided by GE, an affiliate of GE, or a financial
institution.
(c) The Closing Date of the Commitment Letter is on or before
Oct. 31, 2006.
(d) The Facility matures in 60 months.
(e) The Term Loan B will amortize commencing in the third year
after the Closing Date at 20% per year, payable in equal
quarterly installments, with the remaining balance due at
maturity.
(f) The Facility will be secured by fully perfected first
priority security interests in the Borrowers' assets, and
a pledge of all the issued and outstanding capital stock
owned by the Borrowers and a stock pledge of 66-2/3% of
the equity of Silicon Graphics World Trade B.V. and any
material first-tier foreign subsidiaries that become
subsidiaries after the Closing Date.
(g) In an event of default or a liquidation, amounts due on
the Revolver will rank first in priority and right of
payment, and amounts due on the Term B Loan will rank
second.
(h) Advances outstanding under the Revolver will bear
interest, at the Borrowers' option, at the Base Rate plus
1.75% or at the LIBOR Rate plus 3.00%.
(i) The outstanding amounts under the Term Loan B will bear
interest, at the Borrowers' option, at the Base Rate plus
5.75% or the LIBOR Rate plus 7.00%.
(j) The Borrowers will be charged a letter of credit fee
payable monthly at a rate per annum equal to 3% times the
undrawn amount of all outstanding Revolver Letters of
Credit.
(k) Upon issuance, the Borrowers will be charged a letter of
credit fee, plus bank issuance charges, equal to 25 basis
points times the face amount of the Revolver Letter of
Credit issued.
(l) The Borrowers will also be charged an Unused Revolver
Facility Fee.
(m) The Borrowers also agree to pay the Lead Lenders:
-- a $287,500 structuring fee,
-- a $2,000,000 commitment fee,
-- a $100,00 agency fee per annum, and
-- an additional $150,000 expense deposit.
(n) The Borrowers agree to pay all reasonable out-of-pocket
expenses of Morgan Stanley and GE arising in connection
with the Financing.
(o) The Borrowers agree to indemnify the Lead Lenders.
(p) The Borrowers are required to make mandatory prepayments.
(q) The Borrowers may voluntarily reduce the commitments under
the Revolver Facility and must pay a commitment reduction
fee.
(r) The Borrowers may voluntarily prepay the Term Loan B as
long as the prepayment is accompanied by the applicable
prepayment fee.
(s) The Borrowers covenant that they will not permit their
Consolidated EBITDA to be less than:
Quarterly Period Ending Amount
----------------------- ------
December 31, 2006 $1,580,000
March 31, 2007 6,080,000
June 30, 2007 15,310,000
September 30, 2007 20,600,000
December 31, 2007 31,150,000
March 31, 2008 31,150,000
June 30, 2008 29,420,000
September 30, 2008 28,710,000
December 31, 2008 28,720,000
March 31, 2009 28,530,000
June 30, 2009 37,000,000
September 30, 2009 37,000,000
December 31, 2009 37,000,000
March 31, 2010 37,000,000
June 30, 2010 37,000,000
September 30, 2010 37,000,000
December 31, 2010 37,000,000
March 31, 2011 37,000,000
June 30, 2011 37,000,000
September 30, 2011 37,000,000
December 31, 2011 37,000,000
Consolidated EBITDA for the periods ending on Dec. 31,
2006, March 31, 2007, June 30, 2007, and Sept. 30,
2007, will be adjusted to reflect the effects of
restructuring charges.
(t) The Borrowers further pledge not to permit the Total
Leverage Ratio, on an annualized basis, to be more than:
Quarterly Period Ending Ratio
----------------------- -----
December 31, 2006 23.6x
March 31, 2007 9.8x
June 30, 2007 5.0x
September 30, 2007 5.0x
December 31, 2007 3.5x
March 31, 2008 3.5x
June 30, 2008 3.5x
September 30, 2008 3.5x
December 31, 2008 3.5x
March 31, 2009 3.0x
June 30, 2009 3.0x
September 30, 2009 3.0x
December 31, 2009 3.0x
March 31, 2010 3.0x
June 30, 2010 3.0x
September 30, 2010 3.0x
December 31, 2010 3.0x
March 31, 2011 3.0x
June 30, 2011 3.0x
September 30, 2011 3.0x
(u) The Borrowers covenant to limit Capital Expenditures to
$15,000,000 per fiscal year with the ability to carry over
up to $3,000,000 of unused capacity to the next succeeding
year.
(v) Minimum Liquidity must be maintained at not less than
$15,000,000 on or before the first anniversary of the
Closing Date, and $10,000,000 thereafter.
(w) Events of Default include failure to make payments when
due, breaches of representation and warranties, changes in
control, and failure to maintain a first priority
perfected lien on and security interest in the collateral
granted in favor of GE.
A full-text copy of the Commitment Letter is available for free at
http://researcharchives.com/t/s?112f
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. The Debtors' exclusive plan-filing
period will expire on Dec. 29, 2006, and its exclusive
solicitation period will expire on Feb. 28, 2007. (Silicon
Graphics Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
SILICON GRAPHICS: Has Until Dec. 4 to Decide on Unexpired Leases
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extends the time within which Silicon Graphics, Inc., and its
debtor-affiliates may assume or reject their Unexpired Leases
through and including the earlier of:
(i) the effective date of a plan of reorganization in the
Debtors' Chapter 11 cases; and
(ii) December 4, 2006.
The extension is without prejudice to the Debtors' right to seek
further extensions of time to assume or reject Unexpired Leases.
DOLP Objects
Prior to Court's approval, DOLP 655 Properties II, LLC, the owner
and landlord of the premises located at 655 Third Avenue, 15th
Floor, in New York, asks the Court to deny the Debtors' request.
Neil C. Dwork, Esq., at Rosenberg & Estis, P.C., in New York,
notes that Silicon Graphics, Inc., entered into:
(1) a lease for the Premises, dated March 22, 1996, with Royal
Realty Corp., as agent for DOLP, which lease was modified
on March 18, 1997; and
(2) an agreement with Markum & Kliegman LLP to sublease a
portion of the Premises, which DOLP consented to on
March 21, 2003, and which was modified in February 2004.
Because the DOLP Lease and the M&K Sublease terms will expire on
Sept. 30, 2006, DOLP entered into a lease agreement with M&K for
the Premises, which term commences on October 1.
Mr. Dwork asserts that the Debtors should not be permitted to
extend their time to accept or reject the DOLP Lease and the M&K
Sublease beyond Sept. 5, 2006.
Mr. Dwork adds that Silicon has no personal property remaining in
the Premises and will have no lawful continuing interest in the
Premises after Sept. 30, 2006.
Furthermore, Judge Lifland rules that the DOLP Lease is rejected
effective as of Sept. 30, 2006, provided that:
* any party will be forever barred, estopped, and enjoined
from asserting any claims arising from or based on the DOLP
Lease' rejection against the Debtors; and
* the Debtors are forever discharged from any indebtedness or
liability with respect to claims related to the DOLP Lease'
rejection.
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. The Debtors' exclusive plan-filing
period will expire on Dec. 29, 2006, and its exclusive
solicitation period will expire on Feb. 28, 2007. (Silicon
Graphics Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
SCOTTISH RE: Possible Downgrade Affects Ba3 Sr. Debt's Rating
-------------------------------------------------------------
Moody's Investors Service changed the direction of review for
Scottish Re Group Limited's ratings to uncertain from possible
downgrade. The change in the direction of the ratings review
impacts the company's Ba3 senior unsecured debt ratings and the
Baa3 insurance financial strength ratings of the company's core
insurance subsidiaries, Scottish Annuity & Life Insurance Company
Ltd. and Scottish Re, Inc.
The rating agency said the revised direction of the review
indicates the possibility that Scottish Re's ratings could now
be downgraded, upgraded or confirmed depending on the future
developments at Scottish Re.
Moody's stated that the broader range of possible rating
outcomes reflects the possibility that Scottish Re is successful
in implementing its main strategic goal, which is the sale of the
company.
"It is likely that some insurers and reinsurers are interested in
purchasing Scottish Re," According to Scott Robinson, vice
president & senior credit officer. Robinson continued that
"possible suitors consist of those companies that could place the
Scottish Re inforce business into runoff and those that could use
it as a platform to enter or enhance their position in the U.S.
life reinsurance market."
If an acquisition of Scottish Re is completed, the ultimate
ratings of the company would depend upon the financial strength of
the purchaser as well as the structure of the deal, but the
ratings would likely be upgraded from their current level.
Moody's also believes that some private equity firms could be
interested in investing in Scottish Re. However, the rating
agency notes that unless a private equity firm partnered with a
company with insurance expertise, it would view this outcome as
a less viable long term solution than an outright sale of the
company, with limited--if any--upward movement likely in Scottish
Re's ratings.
Notwithstanding the possibility of Scottish Re being acquired,
Moody's emphasized that the company still needs to secure
additional collateral and liquidity over the next several weeks to
prevent further downgrade. The company is currently pursuing
standard reinsurance and surplus relief reinsurance solutions, as
well as private equity capital raising and asset-based financing-
type transactions. Moody's believes the reinsurance initiatives
have a greater probability of being completed in the near term.
It is also possible that potential purchasers of Scottish Re would
provide some form of short-term collateral and liquidity support
to the company.
Robinson emphasized that "any such transactions would be only
temporary solutions, providing Scottish Re with additional
liquidity and collateral that could support the company through
the sales process."
Moody's said that the review would likely result in a downgrade of
Scottish Re if it becomes apparent that the company will not be
successful in completing its near-term collateral solutions and
its capital raising process.
These ratings were changed from being under review for possible
downgrade to being under review with direction uncertain:
Scottish Re Group Limited:
* senior unsecured debt of Ba3;
* senior unsecured shelf of (P)Ba3;
* subordinate shelf of (P)B1;
* junior subordinate shelf of (P)B1;
* preferred stock of B2; and
* preferred stock shelf of (P)B2
Scottish Holdings Statutory Trust II:
* preferred stock shelf of (P)B1
Scottish Holdings Statutory Trust III:
* preferred stock shelf of (P)B1
Scottish Annuity & Life Insurance Company Ltd.:
* IFS rating of Baa3
Premium Asset Trust Series 2004-4:
* senior secured debt of Baa3
Scottish Re, Inc.:
* insurance financial strength of Baa3
Stingray Pass-Through Certificates:
* Baa3, based on IFS rating of SALIC
On Aug. 21, 2006, Moody's downgraded to Ba3 from Ba2 the senior
unsecured debt rating of Scottish Re and also downgraded to Baa3
from Baa2 the IFS ratings of SALIC and Scottish Re, Inc. The
ratings were also placed on review for possible further downgrade.
Scottish Re Group Limited is a Cayman Islands company with
principal executive offices located in Bermuda; it also has
significant operations in Charlotte, North Carolina, Denver,
Colo., and Windsor, England. On June 30, 2006, Scottish Re
reported assets of $14.6 billion and shareholders' equity of
$1.2 billion.
SOLECTRON CORPORATION: Secures New $350 Million Credit Facility
---------------------------------------------------------------
Solectron Corporation disclosed it has secured a three-year,
$350 million revolving credit facility that includes an accordion
feature which allows the facility to be increased to $500 million
at the Company's discretion, subject to certain conditions.
The agreement, which will expire Aug. 28, 2009, amends and
restates a $500 million credit agreement scheduled to expire
Aug. 20, 2007. The new $350 million revolver includes more
favorable terms than the previous agreement and was
oversubscribed.
The company said its cash position has improved since 2004, when
the revolving credit facility was last renewed, and that the size
of the new facility was more appropriate for the company's fiscal
requirements. No amounts are currently drawn on the revolving
credit facility, and the company did not borrow under the previous
agreement.
The facility was co-arranged by Banc of America Securities LLC and
J.P. Morgan Securities Inc. Other top lenders include Scotia
Capital, Citigroup, ABN AMRO and The Royal Bank of Scotland. In
addition, six other lenders committed to the facility.
About Solectron
Solectron Corporation (NYSE:SLR) -- http://www.solectron.com/--
provides a full range of electronics manufacturing and supply
chain management services to the world's leading networking,
telecommunications, computing, consumer, automotive, industrial
and medical device firms. The company's industry-leading Lean Six
Sigma methodology, (Solectron Production System(TM), provides OEMs
with low cost, flexibility and quality that improves competitive
advantage. Solectron's service offerings include new product
introduction, collaborative design, materials management, product
manufacturing, product warranty repair and end-of-life support.
Based in Milpitas, California, Solectron operates in more than 20
countries on five continents and had sales from continuing
operations of $10.4 billion in fiscal 2005.
* * *
Moody's Investors Service placed a B3 rating on Solectron's
$150 million 10-year senior subordinated notes and affirmed
Solectron's existing ratings including its B1 Corporate Family
rating. Moody's said the ratings outlook is stable.
Fitch Ratings also placed a 'B+' rating on Solectron's
$150 million of senior subordinated notes.
SOLUTIA INC: Wants to Implement 2006 Annual Incentive Program
-------------------------------------------------------------
Solutia Inc. and its debtor-affiliates seek authority from the
U.S. Bankruptcy Court for the Southern District of New York to
implement their annual incentive program for 2006.
Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York,
relates that the annual incentive plan is the Debtors' only
broad-based compensation program and is a key tool by which they
drive operational and financial performance throughout the
organization.
If the 2006 Incentive Program is paid at target levels, Solutia
projects awards will be approximately $25,200,000, excluding
overhead.
Solutia will pay the amounts awarded to employees as soon as
practicable after it closes its accounts for fiscal year 2006.
The 2006 Incentive Program is similar to the Court-approved
annual incentive plans the Debtors implemented in 2004 and 2005,
Mr. Henes says. With respect to financial measures and payout
points for 2006, the Debtors' senior management team made
recommendations to the Executive Compensation and Development
Committee of Solutia's board of directors based on actual
financial results for 2005, the 2006 budget and the key drivers
and focus areas for each of business units.
After the terms of the 2006 Incentive Program were approved by
the ECDC, the Debtors presented it to the Official Committee of
Unsecured Creditors, the Ad Hoc Trade Claims Committee, the Ad
Hoc Committee of Solutia Noteholders, Monsanto Company and the
Official Committee of Equity Security Holders.
The Debtors tailored the 2006 Incentive Program to place emphasis
on the performance of the Integrated Nylon, Saflex, CPFilms,
Chemicals, and Plastic Products business units as well as the
business core group that provides support services to the entire
company.
In designing the 2006 Incentive Program, the Debtors established
specific performance targets for each business unit so they can
meet or exceed the 2006 budget. The size of the incentive bonus
pools available for awards to employees is based on actual
performance relative to these targets.
Each Business Unit has up to three financial measures depending
on its key drivers and focus areas. The three measures selected
are EBITDA(R), Free Cash Flow and Gross Margin.
The funding of each Business Unit Incentive Pool and the Core
Incentive Pool will be 90% of the aggregate target bonuses for
individuals assigned to the Pool multiplied by the weighted
average of pre-established funding factor for achievement of
specific objective performance parameters relative to a targeted
performance.
Unit Measure Weight
---- ------- ------
Core Enterprise EBITDAR 45%
Free Cash Flow 55%
Integrated Nylon EBITDA 50%
Free Cash Flow 50%
Saflex EBITDA 33.3%
Free Cash Flow 33.3%
Gross Margin % 33.3%
CPFilms EBITDA 50%
Free Cash Flow 50%
Chemicals Free Cash Flow 100%
Plastic Products Free Cash Flow 100%
In addition, an overall corporate discretionary bonus pool will
be funded by the enterprise-level EBITDAR performance relative to
a pre-established target performance. The funding of the
Enterprise Discretionary Incentive Pool will be 10% of the
aggregate target bonuses multiplied by a pre-established funding
factor.
Targeted performance levels and funding factors have been
established by the ECDC. The Debtors will pay the amounts
awarded to employees as soon as practicable after they close
their accounts for fiscal year 2006.
A full-text copy of the Debtors' 2006 Incentive Program is
available for free at http://ResearchArchives.com/t/s?112d
Headquartered in St. Louis, Missouri, 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. (Solutia Bankruptcy News, Issue No. 67; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
SOLUTIA INC: Panels Want Adversary Proceeding Stay Motion Denied
----------------------------------------------------------------
The Official Committee of Equity Security Holders and the Ad Hoc
Committee appointed in the bankruptcy cases of Solutia Inc. and
its debtor-affiliates ask the U.S. Bankruptcy Court for the
Southern District of New York to deny the Debtors' request to stay
the Adversary Proceeding commenced by the Equity Committee against
Pharmacia Corporation and Monsanto Company.
Solutia filed for Chapter 11 bankruptcy protection on Dec. 17,
2003. Solutia was formed in September 1997 when Pharmacia
Corporation (now a subsidiary of Pfizer, Inc.), formerly known as
Monsanto Company, spun off most of the chemical businesses to
shareowners as an independent entity. Present-day Monsanto
Company is focused on agriculture and was established by Pharmacia
in 2000. At that time, Monsanto agreed to indemnify Pharmacia for
certain liabilities assumed by Solutia at its spinoff to the
extent that Solutia failed to pay, perform or discharge those
liabilities.
Debtors Want the Proceedings Stayed
According to Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in
New York, the Debtors should be allowed to intervene because they
have control over a majority of the documentary evidence and many
of the witnesses are the Debtors' current or former directors,
officers or executives.
The Debtors assure the Court that their intervention would not
unduly delay or prejudice any party to the Adversary Proceeding.
The Debtors promise to coordinate with all parties to maximize
efficiency and minimize duplication of efforts.
Mr. Henes tells the Court that the Debtors have extensively
investigated all potential claims against Pharmacia and Monsanto,
and brought several adversary proceedings against them to
reallocate environmental, tort and retiree liabilities assumed by
Solutia, Inc., in connection with its spin-off from Pharmacia.
The Debtors have also made efforts to reallocate legacy
liabilities to Pharmacia and Monsanto as part of a global
settlement among the three companies, including Solutia's
official committees of unsecured creditors and retirees,
Mr. Henes adds.
The Global Settlement, according to Mr. Henes, is the foundation
of the Debtors' Plan of Reorganization, and that it would allow
the Debtors to emerge from bankruptcy protection as a viable
entity without the need for expensive and protracted litigation.
The Debtors complain that the Adversary Proceeding has stymied
their ability to move forward and seek approval of the Plan and
the Global Settlement.
In addition, the Equity Committee, according to Mr. Henes, has no
standing to bring the claims because the Debtors have already
reached a settlement of the claims the Equity Committee seeks to
bring.
The continued prosecution of the Adversary Proceeding is a
senseless waste of the estates' assets and an abuse of process,
Mr. Henes states.
The Equity Committee should not be allowed to continue to
prosecute the Adversary Proceeding because it will have every
opportunity to make objections or arguments as part of the Plan
confirmation process, Mr. Henes asserts.
Pharmacia and Monsanto have filed an Emergency Petition for a
Writ of Mandamus with the District Court. The Debtors note that
if their request to stay the Adversary Proceeding is granted, the
Mandamus Petition would be moot. If the Bankruptcy Court does
not grant the requested stay, the Debtors urge the District Court
to direct that the stay be entered.
Equity Committee Objects
David A. Crichlow, Esq., at Pillsbury Winthrop Shaw Pittman LLP,
in New York, asserts that "Solutia's remarkably belated motion to
dismiss" should be denied because the relief requested:
(1) would merely delay the Debtors' Chapter 11 cases;
(2) is an improper collateral attack on the Court's dismissal
ruling regarding Pharmacia's and Monsanto's unsuccessful
dismissal motion;
(3) is based on Solutia's false assurance that it adequately
investigated and litigated challenges to Pharmacia's and
Monsanto's claims;
(4) does not satisfy any of the standard requirements for
obtaining a stay; and
(5) is a procedural maneuver to moot the mandamus petition and
avoid the possibility of the District Court granting the
writ.
Mr. Crichlow contends that the Debtors have never meaningfully
challenged Pharmacia and Monsanto, as evidenced by the silent
dockets of their adversary proceedings versus the two companies.
Insofar as the Debtors' contention that the stay is warranted
because the proposed Global Settlement adequately deals with
Pharmacia's and Monsanto's claims, crediting this argument would
short-circuit plan confirmation, Mr. Crichlow contends.
The Equity Committee vigorously disputes the notion that a
proposed plan that honors the claims of Pharmacia and Monsanto by
guaranteeing them substantial recoveries from the bankruptcy
estate preserves the value of Solutia's estate.
The Equity Committee also disputes the allegations that its
claims were duplicative of the Debtors' claims in their adversary
proceedings against Pharmacia and Monsanto because the actions
involved very different allegations and claims.
The Debtors' complaint regarding litigation costs is not
sufficient to establish irreparable harm, since a stay would only
put off the expense and delay of dealing with the issues raised
by the Equity Committee for another day in a slightly different
setting, Mr. Crichlow says.
Although the Debtors aver that the Equity Committee can raise the
same objections and arguments during the Plan confirmation
hearing, Mr. Crichlow maintains that the Equity Committee will
have no meaningful opportunity to object since the Debtors cut
off access to evidence.
The Debtors' attempt to foreclose or limit the Equity Committee's
inquiry into critical matters cannot be permitted, Mr. Crichlow
contends.
Debtors React
The Debtors maintain that the Equity Committee does not have
standing to file, and lacks the standing to pursue, the Adversary
Proceeding.
Binding Second Circuit precedent required the Equity Committee to
seek authority from the Court before bringing the Adversary
Proceeding, Mr. Henes says.
To obtain authority, according to Mr. Henes, the Equity Committee
would have been required to prove that the Debtors had
unjustifiably failed to bring the claims at issue. He emphasizes
that the Equity Committee never did so.
In addition, the Debtors refute the Equity Committee's allegation
that they did not thoroughly investigate the claims by and
against Pharmacia and Monsanto.
The Equity Committee is fully aware that the Debtors engaged in
months of detailed legal and factual analyses of the claims by
and against Pharmacia and Monsanto, Mr. Henes argues. He notes
that, on July 18, 2006, the Equity Committee's counsel, as
directed by the Court, conducted an in camera review of the
"white papers" containing the Debtors' analysis of the claims.
Mr. Henes adds that the Equity Committee's argument that it can
directly prosecute unique claims fails on these grounds:
-- The Equity Committee did not obtain Court approval before
bringing the litigation;
-- The Equity Committee's powers are derivative of the
Debtors and cannot exceed the powers conferred on official
committees by the Bankruptcy Code; and
-- Any claim that is a property of the Debtors' estates may
not be brought by any party other than the Debtors,
regardless of whether the claim is for unique injuries to
a subclass of the Debtors' stakeholders.
The Equity Committee does not have standing to prosecute the
Debtors' claims against Pharmacia and Monsanto, Mr. Henes
reiterates.
The Adversary Proceeding should be stayed to permit the Debtors
to continue to move forward to confirmation and free their
estates from the unnecessary and substantial costs associated
with the proceeding, Mr. Henes asserts.
Ad Hoc Committee Supports Equity Committee
The Ad Hoc Committee of Solutia Noteholders supports the vigorous
pursuit of the claims stated in the Equity Committee's complaint
for the benefit of the bankruptcy estate.
The Ad Hoc Committee maintains that the Equity Committee is
pursuing valid causes of action, and that discovery should
proceed and trial should begin on Sept. 11, 2006, as scheduled.
Bennett J. Murphy, Esq., at Hennigan, Bennett & Dorman LLP, in
Los Angeles, California, contends that the Debtors' request
relies on the "stubborn misimpression" that the Global Settlement
precludes the claims brought by the Equity Committee and is a
basis to stay all efforts to advance claims on behalf of the
bankruptcy estate.
As described in the Ad Hoc Committee's opposition to the Debtors'
disclosure statement, the Global Settlement is largely incoherent
and does not satisfy the requirements of Rule 9019 of the Federal
Rule of Bankruptcy Procedure, Mr. Murphy says.
Mr. Murphy notes that even if the Global Settlement remains a
component of the Plan, the Ad Hoc Committee would represent a
voting bloc and would not support it.
The Debtors' request and the Writ Petition are efforts to thwart
the Court's advancement of a consensual plan and are merely
efforts to exploit procedural issues, Mr. Murphy asserts.
Headquartered in St. Louis, Missouri, 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. (Solutia Bankruptcy News, Issue No. 67; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
ST. VINCENTS: Hemragie Radhamodan Wants Claim Deemed Timely Filed
-----------------------------------------------------------------
Hemragie Radhamodan, executor of the estate of Nanrani Caladeen,
asks the U.S. Bankruptcy Court to deem her proofs of claim against
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates timely filed.
In December 2004, Mr. Caladeen died after suffering 90% brain
damage due to anesthesia malpractice at St. Vincent's Catholic
Medical Centers where he was admitted for hip replacement surgery.
Peter D. Rosenberg, Esq., at Rosenberg, Minc, Falkoff & Wolff,
LLP, in New York, relates that subsequent to being retained on
July 5, 2006, his firm mailed a proof of claim for medical
malpractice to the Court.
Mr. Rosenberg tells the Court that the descendant's family was not
notified of the March 30, 2006, deadline for filing proofs of
claim.
According to Mr. Rosenberg, the Debtors have been aware of the
descendant's possible medical claim months prior to their
bankruptcy filing, and the Debtors' failure to notify the
descendant's family is unacceptable.
In addition, Mr. Rosenberg notes that the Debtors' failure to
comply with Section 521 of the Bankruptcy Code, and Rules 1007
and 3003(c) of the Federal Rules of Bankruptcy Procedure
unnecessarily exposed Ms. Radhamodan to the allegations that her
claims are untimely.
Ms. Radhamodan cannot be penalized for the Debtors' negligence
since neither she nor the descendant's family were in control of
the Debtors' actions, and that action would result in an unfair
and unearned windfall for the Debtors, Mr. Rosenberg asserts.
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. 33 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
STEEL DYNAMICS: Good Performance Cues Moody's to Upgrade Ratings
----------------------------------------------------------------
Moody's Investors Service upgraded Steel Dynamic's corporate
family rating to Ba1 from Ba2. At the same time, the ratings
for the company's $300 million senior unsecured notes due 2009
were upgraded to Ba1 from Ba2 and its $80 million convertible
subordinated notes due 2012 were upgraded to Ba2 from Ba3.
The rating outlook is positive.
Ratings upgraded are:
Upgrades:
Issuer: Steel Dynamics, Inc.
* Corporate Family Rating, Upgraded to Ba1 from Ba2
* Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1
from Ba2
* Subordinated Conv./Exch. Bond/Debenture, Upgraded to Ba2
from Ba3
Outlook Actions:
Issuer: Steel Dynamics, Inc.
* Outlook, Changed To Positive From Stable
The upgrade reflects the company's significantly improved debt
protection metrics over recent years, and its strong operating
margins, which Moody's sees as sustainable. The company's
increased size, broadened geographic diversification, and range of
product offerings, as well as its solid liquidity position
are further factors considered in the upgrade.
SDI is expected to continue to benefit from an exceptionally
strong steel environment and demonstrate further improvement to
its credit profile over the next 12-18 months. SDI's positive
outlook and potential transition to investment grade status are
predicated on it demonstrating an ability to sustain acceptable
metrics and generate positive free cash flow throughout the steel
cycle.
SDI's Ba1 corporate family rating recognizes the company's low
cost mini-mill operating structure, which contributes to its
strong earnings power, its growing production capabilities, its
improving product mix, which is shifting more toward higher value-
added steel, and the robust steel price environment,
in which the company is currently operating.
Overall, SDI's steelmaking process requires only 0.3 man-hours to
produce a hot band ton; Moody's believes that SDI is among the
most profitable steel producers in the United States, on a per ton
basis. Given the fundamental improvement in performance over
recent years and SDI's business strategy, the company has an
acceptable cushion at the Ba1 rating level for a more normalized
"through the cycle" earnings scenario. Additionally, SDI benefits
from flexible labor arrangements, the absence of a defined benefit
pension program, and manageable environmental liabilities.
Factors limiting SDI's rating include its modest size relative
to investment grade steel producers, the secured nature of its
credit facility, and the company's acquisition-driven growth
strategy. The rating also captures the mix of SDI's business
which, although shifting toward a greater proportion of value-
added products, is still mostly comprised of basic flat rolled and
structural products.
Although this product mix and resulting spot market exposure is
suited to SDI's low-cost operations, it leaves SDI more exposed to
cyclical and competitive pressures than steel producers that have
a higher proportion of value-added products and contractual sales.
Similarly, the company's ratings also include its vulnerability to
the cyclical nature of the steel industry, which subjects it to a
great deal of downward pricing pressure caused by excess global
capacity, and trade factors.
Moody's previous rating action on SDI was on November 5, 2004,
when Moody's upgraded its corporate family rating to Ba2, its $300
million senior unsecured notes to Ba2 and convertible subordinated
notes to Ba3.
Headquartered in Fort Wayne, Indiana, Steel Dynamics had total
consolidated steel shipments of approximately 3.6 million tons and
generated revenues of $2.2 billion in 2005.
TAG ENTERTAINMENT: Net Loss Down to $89K in Quarter ended June 30
-----------------------------------------------------------------
TAG Entertainment Corp. reported a net Loss of $89,000 for the
three months ended June 30, 2006, compared with a net loss of
$1.7 million for the same period in the previous year.
Gross revenues for the three months ended June 30, 2006 and 2005
were $740,000 and $278,000, respectively, an increase of $462,000
or 166%. The increase in revenues was principally attributable to
the increase in production and fees arising from film projects
where TAG was engaged to manage filming and related production
activities on behalf of certain investor partnerships.
Net loss for the six months ended June 30, 2006 was $230,000
compared to a net loss of $2.2 million for the comparable period
in 2005.
Gross revenues for the six months ended June 30, 2006 and 2005
were $1.531 million and $659,000, respectively, an increase of
$872,000 or 132%.
The Company disclosed, as of June 30, 2006, it had $126,000 in
cash and cash equivalents and it has an additional need for cash
to fund its working capital requirements and business model
objectives. Since inception, it has financed its operations
primarily through the sale of equity securities and issuance of
debt instruments.
The Company's receivables, at June 30, 2006, included $1.2 million
to be collected from an international film distributor for sub-
distribution rights on the film Supercross. In addition, the
Company's issued note for production funding with a balance of
$1.4 million at June 30, 2006 and will mature in the fourth
quarter of 2006.
Loan Collection Notice
The Company also has received a collection notice in the amount of
approximately $369,000 from R. Michael Webb on behalf of Webb
Development Pension Trust, which seeks repayment of the loan made
by the creditor to Supercross the Movie, LLC. The loan was
guaranteed by TAG Entertainment, Inc., as well as the personal
assets of Steve Austin. The Company is currently negotiating a
resolution of the matter with the creditor.
A full text-copy of the Company's financial report for the three
and six months ended June 30, 2006 may be viewed at no charge at:
http://ResearchArchives.com/t/s?1127
Going Concern Doubt
As reported in the Troubled Company Reporter on April 25, 2006,
A.J. Robbins, PC, in Denver, Colorado, raised substantial doubt
about TAG Entertainment Corp.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditors pointed
to the company's recurring losses and negative cash flows from
operations.
About TAG Entertainment
TAG Entertainment Corp. -- http://www.tagentertainment.com/-- and
its wholly owned subsidiary, TAG Entertainment USA, Inc., are
independent producer of family oriented feature films, television
programming and other entertainment products for theatrical,
television and home video distribution. In 2004, the company
produced 21 episodes of the television series Arizona Highways:
The Television Series for local broadcast.
TEEKAY SHIPPING: Acquires 40% Stake in Norwegian Petrojarl ASA
--------------------------------------------------------------
Teekay Shipping Corporation acquired, through its wholly owned
subsidiary TPO Investments AS, over 40% of the shares of Petrojarl
ASA, which is listed on the Oslo Stock Exchange. In accordance
with Norwegian law, Teekay intends to launch a mandatory bid for
the remaining shares of Petrojarl within the next four weeks.
Petrojarl is a leading operator of Floating Production Storage and
Offloading units in the North Sea. It owns and operates four FPSO
units in addition to operating two shuttle tankers and one storage
tanker. In February of this year, Teekay entered into a joint
venture with Petrojarl to pursue FPSO projects.
"We are excited about the opportunity to expand our existing
relationship with Petrojarl," commented Bjorn Moller, Teekay's
President and Chief Executive Officer. "Petrojarl's offshore
engineering expertise and reputation as a quality operator of
FPSOs is a great fit with Teekay's existing offshore operations
and will allow us to better serve our customers in the growing
offshore oil exploration and production market."
About Teekay
Teekay Shipping Corporation (NYSE: TK) -- http://www.teekay.com/
-- transports more than 10% of the world's seaborne oil and has
expanded into the liquefied natural gas shipping sector through
its publicly listed subsidiary, Teekay LNG Partners L.P. (NYSE:
TGP). With a fleet of over 145 tankers, offices in 17 countries
and 5,100 seagoing and shore-based employees, Teekay provides a
comprehensive set of marine services to the world's leading oil
and gas companies, helping them seamlessly link their upstream
energy production to their downstream processing operations.
* * *
As reported in the Troubled Company Reporter on Sept. 5, 2006,
Standard & Poor's Ratings Services placed its ratings, including
the 'BB+' corporate credit rating, on Teekay Shipping Corp. on
CreditWatch with negative implications.
TEEKAY SHIPPING: Petrojarl Merger Cues Moody's to Review Ratings
----------------------------------------------------------------
Moody's Investors Service placed all debt ratings of Teekay
Shipping Corporation under review for possible downgrade --
including its senior unsecured rating at Ba2. The review was
prompted by Teekay's announcement that is has acquired more than
40% of Petrojarl ASA, and of its intent to make an offer for all
of the remaining Petrojarl shares.
Petrojarl is a Trondheim, Norway-based operator of floating
production storage and offloading vessels and holds a leadership
position in the North Sea. Petrojarl is also Teekay's partner in
a FPSO joint venture the companies initiated in 2006. Moody's
estimates that the total cost of the acquisition could exceed $1.1
billion including debt assumed, and expects that Teekay will pay
for the remaining Petrojarl shares with a combination of cash on
hand and existing revolver availability.
Moody's will review, using the Rating Methodology for the Global
Shipping Industry, the effect of the acquisition on the key credit
metrics, especially of Debt and EBIT. Liquidity is an important
factor in the Methodology, and Moody's will consider the level of
unrestricted cash that Teekay will keep on hand post acquisition
and the timeframe within which Teekay will restore availability
under its revolving credit facilities. In addition, Moody's will
assess Petrojarl's incremental EBITDA potential under Teekay
ownership, and whether the potential growth will
be sufficient to justify the higher post-merger debt levels.
Moody's will also consider whether Teekay will reduce share
repurchases from the high level of the past 18 months.
Under Moody's Methodology, Teekay's credit profile currently
maps to its Ba1 corporate family rating. However, credit metrics
have weakened since December 31, 2005 and free cash flow turned
negative in the Last Twelve Month period ending June 2006.
Although free cash flow generation is pressured by large capital
expenditure commitments for vessels on order, Moody's notes that
Teekay has pre-arranged committed term loan facilities to meet
these obligations. In Moody's view, current spot tanker rates and
the expected firming of tanker rates through year end should
improve these metrics over the short term; however, any such
improvement in Teekay's cash flow as a result of better rates may
not be sufficient to offset the higher debt level that may result
from the potential Petrojarl acquisition.
On Review for Possible Downgrade:
Issuer: Teekay Shipping Corporation
* Corporate Family Rating, Placed on Review for Possible
Downgrade, currently Ba1
* Speculative Grade Liquidity Rating, Placed on Review for
Possible Downgrade, currently SGL-2
* Senior Unsecured Regular Bond/Debenture, Placed on Review
for Possible Downgrade, currently Ba2
Outlook Actions:
Issuer: Teekay Shipping Corporation
* Outlook, Changed To Rating Under Review From Stable
Teekay Shipping Corporation, a Marshall Islands corporation
headquartered in Nassau, Bahamas, having its main operating office
in Vancouver, Canada, operates a fleet of 146 owned or chartered-
in crude, refined products and LNG vessels, including 23
newbuildings on order.
TESCO AMERICAN: Selling Salt Lake Truck Business on October 16
--------------------------------------------------------------
Tesco American Inc. will be selling its custom truck bed and
trailer manufacturing and distributing business in Salt Lake City,
Utah, through an auction on Oct. 16, 2006.
Prospective buyers must submit offers for entire estate asset
package by Oct. 12, 2006, with a minimum bid of $5,200,000.
For more information on the auction, go to
http://www.tescoforsale.com/or contact:
Dell Nichols, SIOR, CCIM
Tel. No.: (801) 303-5433
Ric Horgan
Tel. No.: (801) 303-5569
Commerce CRG
175 East 400 South, Suite 700
Salt Lake City, Utah 84111
Tel. No.: (801) 322-2000
http://www.commercecrg.com/
This is a chapter 11 bankruptcy asset sale of Tesco American Inc.
(Bankr. D. Utah Case No. 01-24789). The Company, through its
subsidiaries, manufactures, sells, and installs truck equipment
and related products to dealers, distributors and end users. The
Company went private in 1990.
TEX STAR: Has Until December 1 to File Chapter 11 Plan
------------------------------------------------------
The Honorable Marvin Isgur of the U.S. Bankruptcy Court for the
Southern District of Texas in Houston extended until Dec. 1, 2006,
the period within which Tex Star Can, LLC, has the exclusive right
to file a plan of reorganization.
The Debtor asked the Court to extend its exclusive plan-filing
period so it can complete its marketing plan and maximize the
value of its property.
Headquartered in College Station, Texas, Tex Star Can, LLC, filed
for chapter 11 protection on Apr. 3, 2006 (Bankr. S.D. Tex. Case
No. 06-31395). Lawrence J. Maun, Esq., at Lawrence J. Maun, P.C.,
represents the Debtor in its restructuring efforts. No Official
Committee of Unsecured Creditors has been appointed in the
Debtor's case. Michael J. Eddy at General Capital Partners, LLC,
gives financial advice to the Debtor. When the Debtor filed for
protection from its creditors, it estimated assets between $10
million and $50 million and estimated debts between $1 million and
$10 million.
TKO SPORTS: Texas Court Confirms First Amended Chapter 11 Plan
--------------------------------------------------------------
The Honorable Marvin Isgur of the U.S. Bankruptcy Court for the
Southern District of Texas confirmed the First Amended Chapter 11
Plan of Reorganization of TKO Sports Group USA Limited.
The Court determined that the Plan satisfies the 13 requirements
for confirmation stated in Section 1129(a) of the Bankruptcy Code.
Plan Overview
The Amended Plan is the result of negotiations among the Debtor
and various other parties. All payments required under the Plan
will be funded from the Debtor's available cash. The Reorganized
Debtor will continue operations after the effective date in an
effort to hold and regain market-share.
Bank of Montreal will get $550,000 of its $587,500 allowed secured
claim. The $42,500 balance will be reallocated for the benefit of
holders of Allowed General Unsecured Claims. The Debtor will pay
the $550,000 out over a period of ten months with minimum equal
monthly payments of $55,000 commencing June 2, 2006. The
additional $5,000 reallocated for the benefit of general unsecured
claim holders will be taken out of the payment due BOM on July 14
2006.
All secured claims, other than those of BOM, will be deemed
general unsecured claims in full under Section 506(a) of the
Bankruptcy Code. If the holder of a secured claim disagrees with
this treatment, the holder may file a motion for valuation with
the Bankruptcy Court no later than 10 business days after the
effective date requesting that the Bankruptcy Court determine the
validity and extent, of the secured claim in dispute. The Debtor
has the option to return the collateral securing the claim or pay
the full value of the claim in cash.
Holders of allowed general unsecured claims, estimated at
approximately $3.8 million, will be paid 15% of their allowed
claim, payable in equal installments every six months for three
years, commencing within thirty days after the effective date.
Funds for the initial payment will come from the BOM Reallocated
Funds and the Reorganized Debtor's cash. The unsecured creditors
will be entitled to a Creditor Representative who will act as
their representative and observation and default notice agent to
observe and monitor the Reorganized Debtor and enforce the
creditors' rights.
Pursuant to the Plan, all Intercompany Claims, estimated at
$7,750,000, will be waived, discharged and expunged, and holders
will not receive any distribution.
TKO Holdings, Inc., will retain its Equity Interest in the
Reorganized Debtor. However, the Reorganized Debtor will be
prohibited from paying dividends, distributions, or extraordinary
payment to TKO, TKO Holdings, Inc., or TSG until all payments
under the Plan are complete and satisfied.
Headquartered in Houston, Texas, TKO Sports Group USA Limited,
aka TKO Sports Group, Inc. -- http://www.strengthtko.com/--
manufactures sporting goods and fitness equipment. The Company
filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D. Tex.
Case No. 05-48509). Edward L. Rothberg, Esq., at Weycer, Kaplan,
Pulaski & Zuber, P.C., represents the Debtor in its restructuring
efforts. Andrew I. Silfen, Esq., and Schuyler G. Carroll, Esq.,
at Arent Fox, PLLC, represent the Official Committee of Unsecured
Creditors. When the Debtor filed for protection from its
creditors, it listed $8,193,809 in assets and $10,571,610 in
debts.
TOWER RECORDS: 12 Purchasers Interested in Assets
-------------------------------------------------
At least 12 bidders are looking to acquire the assets of MTS,
Inc., dba Tower Records, and its debtor-affiliates, Christopher
DiMauro, a managing director at Houlihan Lokey Howard & Zukin
tells the U.S. Bankruptcy Court for the District of Delaware.
Tower Records retained Houlihan Lokey in March of 2006 as its
marketing and sales agent.
In a September 5 affidavit filed in support of the proposed sale
of the Debtor's asset, Mr. DiMauro said that three prospective
purchasers have had face to face meetings with the Debtors and
conducted due diligence at the Company.
Mr. DiMauro told the Court that the Debtors have adequately
marketed their assets and that a prompt sale of these assets is
imperative. He said the Debtors' financial situation dictates
that the sale process should conclude by Oct. 9 2006.
Mr. DiMauro explained that it would be difficult to pursue a sale
later in October since any prospective purchaser will need to
begin building inventory and focus its efforts on the essential
holiday selling season. The Debtor traditionally realized 32% of
its income in the critical seasonal sales period.
The Debtors filed for bankruptcy protection with the intent of
selling their assets under the provisions of Section 363 of the
Bankruptcy Code. An auction of the Debtors' assets is scheduled
on October 5, the Associated Press reports.
Headquartered in West Sacramento, California, MTS, Inc., dba Tower
Records -- http://www.towerrecords.com/-- is a retailer of music
in the U.S., with nearly 100 company-owned music, book, and video
stores. The Company and seven of its affiliates filed for chapter
11 protection on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886
through 06-10893). Richards, Layton & Finger, P.A. and O'Melveny
& Myers LLP represent the Debtors. When the Debtors filed for
protection from their creditors, they estimated assets and debts
of more than $100 million.
The Company and its affiliates previously filed for chapter 11
protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No.
04-10394). The Court confirmed the plan on March 15, 2004.
TRUMP ENT: High Leverage Prompts Moody's to Hold Ratings
--------------------------------------------------------
Moody's Investors Service affirmed Trump Entertainment Resorts
Holdings, LP's B3 corporate family rating, B2 senior secured bank
loan ratings, Caa1 8.75% second lien note rating, and SGL-3
speculative grade liquidity rating. The ratings outlook is
stable.
Trump's ratings and stable outlook acknowledge the company's
continued high leverage, the potential for longer-term competition
from neighboring jurisdictions including Pennsylvania, Delaware,
and New York, and some level of uncertainty regarding the timing
and degree of any cash flow improvement related to the company's
current capital expenditure initiatives.
The rating also considers that although leverage will remain high,
the company has sufficient cash flow and liquidity to fund current
expansion initiatives and service debt. The rating also takes
into account that despite construction disruption at Trump Plaza,
which contributed to a slight EBITDA and EBITDA margin decline at
that property, recent results indicate that refocused marketing
efforts and improved cost efficiencies are beginning to have an
overall positive impact on consolidated operating results and
margins.
Moody's prior rating action on Trump occurred on Nov. 8, 2005 when
the company's ratings were affirmed following the announcement of
the sale of its Indiana riverboat to Majestic Star Casino, LLC.
Trump Entertainment Resorts Holdings, L.P. owns the Trump Taj
Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump
Marina Hotel Casino in Atlantic City. Reported net revenue and
debt for the 12-month period ended June 30, 2006 were $1 billion
and $1.42 billion, respectively.
VERITAS DGC: Inks Definitive Merger Agreement with CGG
------------------------------------------------------
Compagnie Generale de Geophysique and Veritas DGC Inc. have
entered into a definitive merger agreement whereby CGG will
acquire Veritas in a part cash, part stock transaction.
Boards of Directors of both companies have unanimously approved
the transaction and following shareholder and regulatory
approvals, the combined group will operate under the name "CGG-
Veritas".
The transaction is expected to be completed around year end 2006,
subject to receipt of shareholder and regulatory approvals, as
well as the satisfaction of other customary closing conditions.
The combination of CGG and Veritas will create a strong global
pure play seismic company, offering a broad range of seismic
services, and geophysical equipment, through Sercel, to the
industry across all markets. The combined seismic services will
operate the world's leading seismic fleet with 20 vessels,
including 14 high capacity 3D vessels, and land crews operating
with equivalent capacity in both the Western and Eastern
hemispheres. The multi-client services will benefit from two
complementary, recent vintage, well positioned seismic data
libraries. In data processing and imaging, CGG's and Veritas'
respective positions will combine to create the industry
reference.
With a combined workforce of approximately 7,000 staff operating
worldwide, including Sercel, the future group will provide,
through continued innovation, the industry benchmark for seismic
technology and services to a broad base of customers including
independent, international and national oil companies.
CGG's Chairman and CEO, Robert Brunck commented: "We are very
enthusiastic about the business potential of CGG and Veritas being
combined. CGG-Veritas will be a leading global seismic company
and the only pure play listed investment opportunity of this scale
in the seismic sector. Because of our many complementarities,
with all its multidisciplinary and talented personnel, and the
strongest asset base in the sector, the future group will
constitute an excellent platform to maximize the value of our
respective businesses and technologies. In the context of the
seismic sector benefiting from solid fundamentals, as illustrated
by our excellent first half financial performance, and with the
current growth cycle expected to remain strong and lasting, this
transaction will create value to the shareholders of both CGG and
Veritas."
Veritas' Chairman and CEO, Thierry Pilenko commented: "This
transaction presents our combined companies with a tremendous
opportunity. Together, the talent of our people, the strength of
our technology and technique, our leading edge acquisition
capabilities, state-of-the-art proprietary imaging technology and
high quality data library assets will enable CGG-Veritas to better
serve our customers and deliver superior returns to our investors.
Our operations and strategy are very well aligned and I am very
excited about the combination of our companies. I look forward to
working with Robert Brunck to facilitate the integration of these
two outstanding companies".
The total consideration for the shares of Veritas is fixed at
approximately $1.5 billion in cash and approximately 47 million
CGG ADSs, not including cash paid in respect of employee stock
options in the transaction. Veritas shareholders will have the
right to elect cash or CGG ADSs, subject to proration if either
cash or stock is oversubscribed. The cash consideration will be
financed through debt financing fully committed by Credit Suisse.
While the per-share consideration is initially set in the merger
agreement at $75 in cash or 2.2501 CGG ADSs, the per-share
consideration is subject to adjustment upwards or downwards so
that each Veritas share receives consideration representing equal
value. This adjustment will, however, not increase or decrease
the total amount of cash or the total number of ADSs to be issued
in the transaction.
The current value of the transaction to Veritas shareholders,
based on August 29, 2006 closing price of the CGG's ADSs on the
NYSE ($33.33), is approximately $3.1 billion. This represents a
33.5% premium over Veritas' closing stock price on the NYSE of
$56.16 on August 29, 2006 and a 34.7% premium over Veritas' 30-
trading day average closing price of $55.69 for the period ending
on the NYSE on August 29, 2006.
The resulting shareholding of CGG-Veritas should be held
approximately 65% by CGG's shareholders and 35% by Veritas'
shareholders.
Based on the two companies' strong businesses, geographic and
client fit, expected pre-tax run rate synergies are estimated by
CGG at approximately US $65 million per annum. Based on CGG's
estimates, the transaction is expected to be accretive to earnings
per share in CY2008 and approximately neutral to cash earnings per
share in CY2007. In terms of gearing, CGG is confident the
combined group's anticipated cash flows characteristics will
provide significant debt amortization capacity that should allow
it to maintain its current credit profile.
The new Board of Directors is expected to reflect the combined
shareholder base with Robert Brunck as Chairman and CEO. Thierry
Pilenko, currently Chairman and CEO of Veritas, will be proposed
for appointment as one of the combined company's new Board
Directors.
After the merger, Geophysical Services will be headed by CGG's
Christophe Pettenati-Auziere, President Geophysical Services,
reporting to him will be Timothy L. Wells, President Western
Hemisphere and Luc Benoit-Cattin, President Eastern Hemisphere.
Mr. Pettenati-Auziere is currently President, Geophysical Services
of CGG, Mr. Benoit-Cattin is currently Executive Vice President,
Offshore of CGG and Mr. Wells is currently President and COO of
Veritas.
The conduct of Sercel's business will be unchanged in the context
of this transaction.
Credit Suisse and Rothschild are acting as financial advisors to
CGG. Skadden, Arps, Slate, Meagher & Flom LLP, Willkie Farr &
Gallagher LLP, Linklaters and Goodmans LLP are acting as legal
advisors to CGG. Goldman Sachs is acting as financial advisor to
Veritas. Vinson & Elkins LLP and Paul, Hastings, Janofsky &
Walker (Europe) LLP are acting as legal advisors to Veritas.
About CGG
Compagnie Generale de Geophysique -- http://www.cgg.com/-- is a
global participant in the oilfield services industry, providing a
wide range of seismic data acquisition, processing and reservoir
services to clients in the oil and gas exploration and production
business. It is also a global manufacturer of geophysical
equipment through its subsidiary Sercel.
About Veritas
Headquartered in Houston, Texas, Veritas DGC, Inc. --
http://www.veritasdgc.com/-- is a leading provider of integrated
geophysical information and services to the petroleum industry
worldwide. Veritas is listed on New York Stock Exchange under the
ticker VTS.
VERITAS DGC: Compagnie Merger Cues S&P to Put Rating on Neg. Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating on Houston, Texas-based seismic provider Veritas DGC
Inc. on CreditWatch with negative implications.
"The rating action follows the announcement that Veritas and
Compagnie Generale de Geophysique (CGG; BB-/Watch Neg/--) have
entered into a definitive merger agreement," said Standard &
Poor's credit analyst Jeffrey Morrison.
According to terms of the agreement, CGG will acquire Veritas in
a part cash, part stock transaction. The transaction is valued
at $3.1 billion.
The ratings on Paris-based seismic provider CGG were also placed
on CreditWatch with negative implications following the
announcement.
If the acquisition goes ahead under the current terms, close to
50% or $1.5 billion of it will be paid in cash, resulting in a
substantial increase in CGG's consolidated net financial debt to
an estimated EUR1.4 billion. CGG's unadjusted net financial debt
stood at a low EUR240 million at the end of June 2006.
The very expensive price (with a premium of 35% above Veritas' 30-
day average share price as of Aug. 29, 2006) is Standard & Poor's
other key concern.
These factors could be offset by the good geographic fit of the
two entities' operations and the strengthened leading global
position of the combined entity that would be one of two global
leaders.
Finalization of the acquisition is likely to take several months,
as regulatory and shareholder approvals will need to be obtained.
Standard & Poor's intends to indicate future ratings most likely
before finalization of the acquisition, once the rating agency has
studied the group's updated strategic and financing plan and are
confident that the acquisition terms will not change.
WARD PRODUCTS: Wants McGuireWoods as Bankruptcy Counsel
-------------------------------------------------------
Ward Products, L.L.C, asks the U.S. Bankruptcy Court for the
Eastern District of Michigan to employ McGuireWoods, L.L.P, as its
bankruptcy counsel, nunc pro tunc to Aug. 7, 2006.
McGuireWoods will:
a) advise the Debtor with respect to its powers and duties
as a debtor-in-possession in the continues management and
operation of its business and properties;
b) attend meetings and negotiate with representatives of
creditors and other parties-in-interest;
c) take all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on
the Debtor's behalf, the defense of any action commenced
against the Debtor, negotiations concerning all
litigation in which the Debtor is involved, and
objections to claims filed against the estate;
d) prepare on behalf of the Debtor all motions,
applications, answers, orders, reports and papers
necessary to the administration of the estate;
e) negotiate and prepare on the Debtor's behalf a plan of
reorganization, disclosure statement, and all related
agreements and documents, and take any necessary action
on behalf of the Debtor to obtain confirmation of such
plan;
f) represent the Debtor in connection with post petition
financing if obtained;
g) advise the Debtor in connection with any potential sale
of assets;
h) appear before the Court, any appellate courts, and the
U.S. Trustee and protect the interests of the Debtor's
estate before the Courts and the U.S. Trustee;
i) consult with the Debtor regarding tax, intellectual
property, labor and employment, real estate, corporate
finance, corporate and securities, and litigation
matters; and
k) perform all other necessary legal services and provide
all other necessary legal advice to the Debtor in
connection with its chapter 11 case.
The Debtor tells the Court that the Firm holds a general retainer
of $53,000. The Debtor has agreed that the Firm will hold this
retainer during the pendency of the case and will apply the
against the Firm's final fee application.
Mark E. Freedlander, Esq., a partner of McGuireWoods, discloses
the Firm's current customary rates:
Designation Hourly Rates
----------- ------------
attorneys $525 - $255
paralegals $145
Mr. Freedlander assures the Court that the Firm does not hold any
interest adverse and is a "disinterested person" as that term
defined in Section 101(14) of the Bankruptcy Code.
Mr Freedlander can be reached at:
Mark E. Freedlander, Esq.
Sally E. Edison, Esq.
McGuireWoods, L.L.P.
Dominion Tower
625 Liberty Avenue, 23rd Floor
Pittsburgh, PA 15222-3142
Tel: (412) 667-6000
Fax: (412) 667-6050
Headquartered in Royal Oak, Michigan, Ward Products, L.L.C.
manufactures receiving antennas. The Company filed for chapter
11 protection on Aug. 7, 2006 (Bankr. E.D. Mich. Case No.
06-50527). Jay L. Welford, Esq., Judith Greenstone Miller, Esq.,
Paige E. Barr, Esq., and Richard E. Kruger, Esq., at Jaffe
Franklin Heuer & Weis, P.C. represents the Debtor. When the
Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.
WATERFORD GAMING: Moody's Holds B1 Senior Unsecured Note's Rating
-----------------------------------------------------------------
Moody's Investors Service affirmed Waterford Gaming, LLC.'s and
Waterford Gaming Finance Corp.'s B1 corporate family rating and B1
senior unsecured note rating. The ratings outlook is stable.
The ratings and outlook consider that Waterford derives
substantially all of its revenues from its partnership interest in
Trading Cove Associates. TCA receives a revenue-based quarterly
relinquishment fee equal to 5% of the gross revenues
of the Mohegan Sun Casino which is owned by the Mohegan Tribal
Gaming Authority. These fee payments are the only source of cash
used to service the company's outstanding debt.
Positive ratings consideration is given to the historical and
expected performance of the Mohegan Sun casino, as well as the
restrictive covenants contained in Waterford's senior note
indenture that prohibits other business activities and the
incurrence of additional debt, and limits restricted payments.
Also considered is that Waterford is not a bankruptcy remote
entity and could potentially be drawn into a bankruptcy or similar
event by its parent, Waterford Group, L.L.C.
On June 6, 2003, Moody's assigned a B1 rating to Waterford's
8.625% $155 million senior unsecured notes due 2012 of which
$123.1 million was outstanding at June 30, 2006.
Waterford Gaming, LLC, is a special purpose company formed solely
for the purpose of holding its 50% partnership interest, as a
general partner, in Trading Cove Associates, a Connecticut general
partnership and the manager and developer of the Mohegan Sun
casino located in Uncasville, Cincinnati.
WERNER LADDER: WXP Inc. Seeks Payment of $1.17 Mil. Admin Claim
---------------------------------------------------------------
Supplier WXP, Inc., asks the U.S. Bankruptcy Court for the
District of Delaware to allow an administrative claim for
$1,173,530 in its favor and require Werner Holding Co. (DE), Inc.,
aka Werner Ladder Company, and its debtor-affiliates to promptly
pay the claim.
WXP, Inc., supplies aluminum log, aluminum stages, scaffolding,
planks and other products to Werner Co. WXP has supplied a total
of $1,173,530 in goods to Werner within 20 days of the Petition
Date for which it has not received payment, according to Michael
J. Barrie, Esq., at Schnader Harrison Segal & Lewis LLP, in
Wilmington, Delaware.
Mr. Barrie asserts that WXP is entitled to an administrative
expense claim under Section 503(b)(9) of the Bankruptcy Code
because the goods were sold to Werner in the ordinary course of
business and the goods were supplied within 20 days before the
Petition Date. He adds that WXP's claim entitled to priority
distribution under Section 507(a)(2).
About Werner Ladder
Headquartered in Greenville, Pennsylvania, Werner Co. --
http://www.wernerladder.com/-- manufactures and distributes
ladders, climbing equipment and ladder accessories. The company
and three of its affiliates filed for chapter 11 protection on
June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The firm of
Willkie Farr & Gallagher LLP serves as the Debtors' counsel.
Kara Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S.
Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents
the Debtors as its co-counsel. The Debtors have retained
Rothschild Inc. as their financial advisor.
At March 31, 2006, the Debtors reported total assets of
$201,042,000 and total debts of $473,447,000. (Werner Ladder
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
WERNER LADDER: Complainant Wants Stay Lifted to Pursue PI Action
----------------------------------------------------------------
Complainant Jeffrey Lapp asks the U.S. Bankruptcy Court for the
District of Delaware to modify the automatic stay to allow
him to pursue a personal injury action in the U.S. District Court
for the District of Nebraska against Werner Holding Co. (DE),
Inc., aka Werner Ladder Company, and its debtor-affiliates.
Mr. Lapp filed a cause of action on May 19, 2005, in the District
Court of Keith County, Nebraska seeking damages for, inter alia,
injuries he sustained when a brace on a ladder manufactured by
Werner Co. had a rivet, which failed causing the ladder to become
unsteady and him to fall. According to Mr. Lapp, he got injured
while he was on the job. As a result of the accident, Mr. Lapp
sustained serious physical injuries and has incurred $305,910 in
past medical bills. He has been rendered unable to work and
placed on Social Security Disability as a result of the accident
and injuries.
The Debtor removed the action to the United States District Court
for the District of Nebraska on July 1, 2005. The Debtor, in its
Rule 26 Disclosures and in discovery, stated that there is excess
and umbrella coverage in the above-titled action. Mr. Lapp seeks
a jury trial to assess the liability of the Debtor and its
insurance carriers and to assess damages against the Debtor's
insurance carriers.
Substantial discovery in the Action has already been completed.
The Action is set for jury trial on Oct. 30, 2006.
Mr. Lapp asserts he is entitled to a jury trial in the District
Court because the Bankruptcy Court has no authority to hear
personal injury claims. Mr. Lapp stipulates that he is not
seeking, and will not seek immediate recovery against the Debtor
or its estate for any amount owing him over and above the
Debtor's primary, excess or umbrella insurance.
Absent relief from the automatic stay, Mr. Lapp says he would be
prejudiced and harmed by a delay in liquidating his claim against
the Debtor, as he has unpaid medical bills and expenses, which
continue to accrue.
About Werner Ladder
Headquartered in Greenville, Pennsylvania, Werner Co. --
http://www.wernerladder.com/-- manufactures and distributes
ladders, climbing equipment and ladder accessories. The company
and three of its affiliates filed for chapter 11 protection on
June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The firm of
Willkie Farr & Gallagher LLP serves as the Debtors' counsel.
Kara Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S.
Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents
the Debtors as its co-counsel. The Debtors have retained
Rothschild Inc. as their financial advisor.
At March 31, 2006, the Debtors reported total assets of
$201,042,000 and total debts of $473,447,000. (Werner Ladder
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
WINDOW ROCK: California Court Confirms Plan of Reorganization
-------------------------------------------------------------
The Hon. John E. Ryan of the U.S. Bankruptcy Court for the Central
District of California approved the Plan of Reorganization of
Window Rock Enterprises, Inc. on Sept. 6, 2006. This plan
provides for payment in full of Window Rock's secured debt and for
payment of approximately 97.5% of Window Rock's unsecured debt.
"The confirmation of Window Rock's plan of reorganization is an
excellent result for Window Rock and its creditors," noted Robert
E. Opera of the Newport Beach-based reorganization and bankruptcy
law firm, Winthrop Couchot Professional Corporation, counsel for
Window Rock in its Chapter 11 case. "Window Rock's successful
reorganization is a testament to the hard work of Window Rock's
management and the cooperative approach to the reorganization
exhibited by Window Rock's creditors."
In 2004, Window Rock generated approximately $229 million in gross
sales.
"In light of Window Rock's restructuring, Window Rock's management
believes firmly that it is emerging from Chapter 11 as a healthier
company with the financial strength to grow and prosper," says
Adam Michelin, the company's CEO.
Headquartered in Brea, California, Window Rock Enterprises Inc.
-- http://windowrock.net/-- manufactures and sells all-natural
dietary and nutritional supplements. The Debtor also produces its
own TV, radio and print advertising campaigns for nutritional
and dietary supplements and has distribution in over 40,000 Food
Drug Mass Clubs as well as Health and Fitness Channels. The
Company filed for chapter 11 protection on Nov. 23, 2005 (Bankr.
C.D. Calif. Case No. 05-50048). Robert E. Opera, Esq., and
Garrick A. Hollander, Esq., at Winthrop Couchot PC, and Robert E.
Darby, Esq., and Anthony DiResta, Esq., at Fulbright & Jaworski
L.L.P., represent the Debtor in its restructuring efforts. The
Official Committee of Unsecured Creditors selected Peiztman, Weg &
Kempinsky, LLP, as its counsel. When the Debtor filed for
protection from its creditors, it estimated assets between
$10 million to $50 million and debts of more than $100 million.
XM SATELLITE: SEC Wants a Peek Into Subscriber Targets and Costs
----------------------------------------------------------------
The Securities and Exchange Commission has asked XM Satellite
Radio Holdings Inc. to voluntarily provide documents regarding the
Company's subscriber targets, costs associated with attempting to
reach those targets, and related matters during the third and
fourth quarters of 2005.
Joseph M. Titlebaum, the Company's General Counsel and Secretary
said in an SEC filing that the information request appears to
pertain to matters similar to the issues underlying the previously
disclosed securities litigation filed against XM Satellite earlier
this year. Mr. Titlebaum said the Company will cooperate fully
with the SEC's informal inquiry.
Purported nationwide class of purchasers of XM's common stock
between July 28, 2005, and May 24, 2006, have commenced actions in
the U.S. District Court for the District of Columbia against the
Company and Hugh Panero, its chief executive officer.
The complaint seeks an unspecified amount of damages and claims
for alleged violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5. The shareholder
suit alleges that various statements by the Company and its
management failed to project accurately or disclose in a timely
manner the amount of higher costs to obtain subscribers during the
fourth quarter of 2005.
About XM Satellite
Headquartered in Washington, D.C., XM Satellite Radio Inc.
(Nasdaq: XMSR) -- http://www.xmradio.com/-- was incorporated in
1992 and is a wholly owned subsidiary of XM Satellite Radio
Holdings Inc. XM has broadcast facilities in New York and
Nashville, and additional offices in Boca Raton, Florida;
Southfield, Michigan; and Yokohama, Japan. XM is available in
satellite-delivered entertainment and data services for the
automobile market through partnerships with General Motors, Honda,
Toyota, Hyundai, Nissan, Porsche, Suzuki, and Subaru.
* * *
XM Satellite Radio Holdings Inc.'s 1.75% Convertible Senior Noted
due 2009 carry Moody's Investors Service's Caa3 rating and
Standard & Poor's CCC- rating.
* 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 Second Chance International Holding
Bankr. E.D. Calif. Case No. 06-23321
Chapter 11 petition filed August 28, 2006
See http://bankrupt.com/misc/caeb06-23321.pdf
In re Star Of Guyana Et Al.
Bankr. N.D.N.Y. Case No. 06-12210
Chapter 11 petition filed August 29, 2006
See http://bankrupt.com/misc/nynb06-12210.pdf
In re Alen Ghouliance
Bankr. C.D. Calif. Case No. 06-14149
Chapter 11 petition filed August 30, 2006
See http://bankrupt.com/misc/cacb06-14149.pdf
In re Crown Medical Clinic Inc.
Bankr. W.D. Wash. Case No. 06-12940
Chapter 11 petition filed August 30, 2006
See http://bankrupt.com/misc/wawb06-12940.pdf
In re Kenneth Rex Replogle
Bankr. E.D. Mo. Case No. 06-60822
Chapter 11 petition filed August 30, 2006
See http://bankrupt.com/misc/mowb06-60822.pdf
In re Renaissance Medical Clinic Inc.
Bankr. W.D. Wash. Case No. 06-12939
Chapter 11 petition filed August 30, 2006
See http://bankrupt.com/misc/wawb06-12939.pdf
In re Wayne C. Clark
Bankr. N.D. Ga. Case No. 06-70389
Chapter 11 petition filed August 30, 2006
See http://bankrupt.com/misc/ganb06-70389.pdf
In re Island Life Incorporated
Bankr. W.D. Wash. Case No. 06-12973
Chapter 11 petition filed August 31, 2006
See http://bankrupt.com/misc/wawb06-12973.pdf
In re Village Choice Health Care, Inc.
Bankr. E.D. Tex. Case No. 06-10340
Chapter 11 petition filed August 31, 2006
See http://bankrupt.com/misc/txeb06-10340.pdf
In re Zachary Rosenberg
Bankr. W.D. Tenn. Case No. 06-26905
Chapter 11 petition filed August 31, 2006
See http://bankrupt.com/misc/tnwb06-26905.pdf
In re Biz Quick Services, Inc.
Bankr. M.D. Fla. Case No. 06-04660
Chapter 11 petition filed September 1, 2006
See http://bankrupt.com/misc/flmb06-04660.pdf
In re JC Ornamental Ironworks, Inc.
Bankr. E.D. Tex. Case No. 06-41432
Chapter 11 petition filed September 1, 2006
See http://bankrupt.com/misc/txeb06-41432.pdf
In re John Clinton Worley
Bankr. E.D. Tex. Case No. 06-41438
Chapter 11 petition filed September 1, 2006
See http://bankrupt.com/misc/txeb06-41438.pdf
In re Knickerbocker, Inc.
Bankr. D. Conn. Case No. 06-31445
Chapter 11 petition filed September 1, 2006
See http://bankrupt.com/misc/ctb06-31445.pdf
In re Paul Wayne Lee
Bankr. E.D. Mich. Case No. 06-52206
Chapter 11 petition filed September 1, 2006
See http://bankrupt.com/misc/mieb06-52206.pdf
In re Woodwrights Incorporated
Bankr. D. Conn. Case No. 06-50368
Chapter 11 petition filed September 1, 2006
See http://bankrupt.com/misc/ctb06-50368.pdf
In re T&T Sunrise Properties, LLC
Bankr. D. Md. Case No. 06-15329
Chapter 11 petition filed September 2, 2006
See http://bankrupt.com/misc/mdb06-15329.pdf
In re CMGN LLC
Bankr. D. Nev. Case No. 06-50631
Chapter 11 petition filed September 4, 2006
See http://bankrupt.com/misc/nvb06-50631.pdf
In re Goldsmith Galleries, Inc.
Bankr. E.D. Mich. Case No. 06-52260
Chapter 11 petition filed September 4, 2006
See http://bankrupt.com/misc/mieb06-52260.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. Marie Therese V. Profetana, Robert Max Victor M. Quiblat II,
Shimero R. Jainga, Joel Anthony G. Lopez, Emi Rose S.R. Parcon,
Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q.
Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin
and Peter A. Chapman, Editors.
Copyright 2006. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
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