/raid1/www/Hosts/bankrupt/TCR_Public/061010.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, October 10, 2006, Vol. 10, No. 241
Headlines
ADVANCE AUTO: Refinances Secured Credit Facility
ALLIANCE PHARMACEUTICAL: Corbin & Co Raises Going Concern Doubt
ALLIED HOLDINGS: Court Approves New USI Brokerage Pact
ALLIED HOLDINGS: Court Approves Kemper & Haul Settlement Pact
AMERICAN CREDIT: Committee Hires Parker Poe as Bankruptcy Counsel
AMERICAN CREDIT: Has Until November 18 to File Chapter 11 Plan
ANBEC INVESTMENT: Judge Funk Dismisses Chapter 11 Case
ANVIL KNITWEAR: Taps Dechert as General Bankruptcy Counsel
ANVIL KNITWEAR: Taps Donlin Recano as Claims and Noticing Agent
ASARCO LLC: Wants to Expand Envirocon's Scope of Work
ASARCO LLC: Wants Mission Mine South Mill Back From Mineral Park
ASBURY AUTOMOTIVE: Moody's Assigns Loss-Given-Default Rating
AUSTIN COMPANY: Committee Taps Arent Fox as Special ERISA Counsel
AUTONATION INC: Moody's Assigns Loss-Given-Default Rating
BALLY TOTAL: June 30 Stockholders' Deficit Tops $1.4 Billion
BEARINGPOINT INC: Moody's Cuts Ratings on $450 Million Bonds to B3
BOMBARDIER INC: Gets $1.35 Bil. Aircraft Order from Northwest Air
BUFFETS HOLDINGS: Moody's Holds Caa1 Rating on $330 Mil. Sr. Notes
BUILDERS FIRSTSOURCE: Moody's Confirms B1 Corporate Family Rating
CANAL CAPITAL: Accumulated Deficit Widens to $13.6 Mil. at July 31
CATHOLIC CHURCH: Spokane Sells Bishop's Office for $2,050,000
CATHOLIC CHURCH: Spokane Gets Okay for Treatment of Parish Claims
C-BASS: Fitch Rates $13.6 Million Class B-2 Certificates at BB+
CENTENNIAL COMMS: Aug. 31 Balance Sheet Upside-Down by $1.06 Bil.
CENTERSTAGING CORP: Independent Auditor Raises Going Concern Doubt
CHATTEM INC: Buys 5 Brands from Johnson & Johnson for $410 Million
CHATTEM INC: Moody's Reviews Low-B Ratings and May Downgrade
CHEMTURA CORP: Settles Federal Rubber Chemicals Suit for $51 Mil.
CHIQUITA BRANDS: Inks Waiver Agreement with Lenders
CHIQUITA BRANDS: Initiates Organizational Changes
COLLINS & AIKMAN: District Court Dismisses GECC's Appeal
COLLINS & AIKMAN: Has Until Dec. 15 to Decide on Becker Leases
COMPLETE RETREATS: Seeks Court Okay on Ableco Commitment Letter
COMPLETE RETREATS: Panel Can File DIP Loan Objection Until Oct. 26
CONSTELLATION BRANDS: Earns $68.4 Mil. for Quarter Ended Aug. 31
CONTROLLED POWER: Committee Can't Recover Payments to Caroman
CONVERIUM AG: Lenders Agree to Reduce Collateral Requirement
COPELANDS' ENT: Has Until Oct. 13 to File Schedules & Statements
COVENTRY HEALTH: Moody's Affirms Ba1 Rating on Sr. Unsecured Debt
CROWN CASTLE: Moody's Affirms B1 Corporate Family Rating
CSC HOLDINGS: Extends Offer for $500 Mil. 6-3/4% Notes to Nov. 2
DANA CORPORATION: Court Approves Settlement Agreement with WESCO
DANA CORPORATION: Can Walk Away from Four Real Property Leases
DAYTON SUPERIOR: Moody's Assigns Loss-Given-Default Rating
DELPHI CORP: Michigan Labor Department Withdraws Seven Claims
DELPHI CORP: Wants to Expand Scope of FTI's Retention
EVERGREEN INT'L: Extends 12% Senior Notes Offering to October 16
EXTENDICARE HEALTH: Gets Requisite Consents from Sr. Noteholders
FACTORY TRAWLER: Case Summary & 19 Largest Unsecured Creditors
FORD MOTOR: Taps UBS to Filter Aston Martin Bids
FORTE COMMUNICATIONS: Voluntary Chapter 11 Case Summary
GEMINI SERVICES: Transfer Defects Didn't Invalidate Mortgage
GENERAL MOTORS: Kerkorian Backs Out of Share Purchase Plan
GROUP 1 AUTOMOTIVE: Moody's Assigns Loss-Given-Default Rating
GSC ABS: Fitch Rates $10 Million Class C Notes at BB+
H.D. REALTY: Case Summary & Largest Unsecured Creditor
HANESBRANDS INC: Moody's Assigns Loss-Given-Default Rating
HINES HORTICULTURE: Subsidiary Sells Miami Assets for $4.1 Million
HOUSING AUTHORITY: Moody's Puts Watch on Revenue Bonds' B2 Rating
INDIAN CREEK: Files Plan and Disclosure Statement in California
INDIAN CREEK: Disclosure Statement Hearing Set for November 13
INDUSTRIAL ENTERPRISES: Unable to File 2006 Form 10-KSB
INFOR GLOBAL: Moody's Assigns Loss-Given-Default Rating
INSIGHT COMMS: Completes $2.445 Billion Sr. Loan Debt Financing
INTERSTATE BAKERIES: Glenview & Brencourt Named to Equity Panel
INTERSTATE BAKERIES: Court Okays Hilco as Business Asset Appraiser
INTERTAPE POLYMER: Moody's Cuts Rating on Senior Bond to Caa1
JAMES CLINTON: Case Summary & 17 Largest Unsecured Creditors
KELLWOOD COMPANY: Moody's Assigns Loss-Given-Default Rating
KRONOS ADVANCED: Sherb & Co. Raises Going Concern Doubt
LAZY DAYS: Moody's Assigns Loss-Given-Default Rating
LEVI STRAUSS: Moody's Assigns Loss-Given-Default Rating
LOUDEYE CORP: Shareholders File Securities Fraud Class Action
LOUIS STROSNIDER: Case Summary & Seven Largest Unsecured Creditors
MADISON AVENUE: Moody's Junks Ratings on $18 Million Notes
MAIDENFORM BRANDS: Moody's Assigns Loss-Given-Default Rating
MARLIN TRAINER: Case Summary & 17 Largest Unsecured Creditors
MERRILL COMMS: Moody's Puts B3 Rating on Proposed 2nd-Lien Loan
MESABA AVIATION: Reports August 2006 Traffic Results
NELLSON NUTRACEUTICAL: Wants Until Nov. 27 to File Chap. 11 Plan
NEXSTAR BROADCASTING: Moody's Assigns Loss-Given-Default Ratings
NORTHWEST AIRLINES: Reaches Tentative Labor Agreement with AMFA
OCCAM NETWORKS: Common Shares Listing Gets Nasdaq Approval
ONEIDA LTD: Auditor Issued Going Concern Opinion Before Emergence
OWENS CORNING: Wants Oregon Settlement Agreement Approved
OWENS CORNING: Wants to Expand Scope of Ernst & Young Employment
OXFORD IND: Moody's Assigns Loss-Given-Default Rating
PANAVISION INC: Acquires Plus 8 Digital
PANAVISION INC: Moody's Assigns Loss-Given-Default Ratings
PEABODY ENERGY: Moody's Rates Proposed $900 Mil. Sr. Notes at Ba1
PERFORMANCE TRANSPORTATION: Powers' Hearing Continues on Wednesday
PERFORMANCE TRANSPORT: Court Continues Stay v. Crumlich to Nov. 18
PERRY ELLIS: Moody's Assigns Loss-Given-Default Rating
PGMI INC: McKennon Wilson Raises Going Concern Doubt
PHILLIPS-VAN HEUSEN: Moody's Assigns Loss-Given-Default Rating
PLATFORM LEARNING: Gets Court Nod for $750,000 Interim Financing
POE FINANCIAL: Wants Court to Establish General Bar Date
PONY EXPRESS: Case Summary & 13 Largest Unsecured Creditors
PROTECTION ONE: Fitch Affirms & Withdraws Low-B & Junk Ratings
PROTECTIVE COMMERCIAL: Moody's Lifts Ratings on 3 Certs. to Ba2
PUREBEAUTY INC: Committee Hires Winston & Strawn as Counsel
QUIKSILVER INC: Moody's Assigns Loss-Given-Default Rating
RADIO ONE: Moody's Assigns LGD5 Rating to 8-7/8% Senior Notes
RIM SEMICONDUCTOR: Incurs $15.1 Million Net Loss in Third Quarter
R.J. FITZ: Voluntary Chapter 11 Case Summary
SAINT VINCENTS: Sandra Lowery Wants to Pursue Rule 2004 Probe
SAINT VINCENTS: Lori Kruesi Wants to Pursue Civil Action
SALEM COMMS: Moody's Assigns Loss-Given-Default Rating
SHAW GROUP: Plans to Join Toshiba in Westinghouse Acquisition
SILICON GRAPHICS: LGE Wants $75 Million Damage Claim Allowed
SILICON GRAPHICS: Stay Modified Allowing Horrock to Pursue Claim
SIRALOP DEVELOPMENT: Voluntary Chapter 11 Case Summary
SONIC AUTOMOTIVE: Moody's Assigns Loss-Given-Default Ratings
ST. JOHN KNITS: Moody's Assigns Loss-Given-Default Rating
TOWER AUTO: Tower Mexico Wants Grupo Proeza Complaint Sustained
TRANS MAX: Court Finds Flying Car Plan Isn't Feasible
VERILINK CORP: Exclusive Plan-Filing Period Extended to October 31
WARD PRODUCTS: Hires Glass & Associates as Restructuring Advisor
WARNACO GROUP: Moody's Assigns Loss-Given-Default Ratings
WCI COMMUNITIES: Moody's Downgrades Senior Notes' Rating to B1
WHERIFY WIRELESS: Malone & Bailey Express Going Concern Doubt
WILLIAM CARTER: Moody's Assigns Loss-Given-Default Ratings
WILLOWBEND NURSERY: Taps Kenneth Freeman as Bankruptcy Counsel
WINN-DIXIE: Court Grants Protective Order on Visagent Discovery
* PwC Appoints Javier Rubinstein as Global General Counsel
* Large Companies with Insolvent Balance Sheets
*********
ADVANCE AUTO: Refinances Secured Credit Facility
------------------------------------------------
Advance Auto Parts Inc. refinanced its secured credit facility to
a new $750 million unsecured five-year revolving credit facility.
This facility replaces the Company's existing term loans and
revolver.
"This refinancing provides Advance Auto Parts with an attractive
level of financial flexibility, enabling us to increase liquidity
while reducing interest expense," said Michael Moore, Executive
Vice President and Chief Financial Officer. "We greatly
appreciate the confidence our lenders continue to have in
our future."
Approximately $434 million is drawn against the new facility.
While the company has the ability to borrow up to the full amount
of the facility, it does not expect to significantly increase its
leverage. As a result of the improved borrowing costs under the
new facility, the Company anticipates pre-tax interest expense
savings of more than $2.5 million annually.
The facility bears interest at the rate of LIBOR plus a spread.
The spread is currently 75 basis points, resulting in an
annualized interest rate of approximately 6.1%, based on the
current LIBOR. The Company has executed new swap agreements,
which effectively fix the interest rate on $225 million of the new
facility at approximately 5% plus a spread. Under the terms of
the new facility, the spread over LIBOR will adjust to reflect any
future changes in the Company's credit rating.
In conjunction with this refinancing, the Company expects to
record a charge of approximately $1.9 million of deferred
financing charges associated with its prior credit facility,
and record income of approximately $2.9 million associated with
previously unrealized gains on interest-rate swaps. Both of these
amounts will be recorded in the Company's third fiscal quarter,
resulting in a net pre-tax gain of $1 million for the quarter.
The lending group, led by JP Morgan, includes Bank of America,
SunTrust and BB&T.
About Advance Auto
Headquartered in Roanoke, Va., Advance Auto Parts (NYSE: AAP) --
http://www.advanceautoparts.com/-- is the second-largest retailer
of automotive aftermarket parts, accessories, batteries, and
maintenance items in the United States, based on store count and
sales. As of April 22, 2006, the Company operated 2,927 stores in
40 states, Puerto Rico, and the Virgin Islands. The Company
serves both the do-it-yourself and professional installer markets.
* * *
As reported in the Troubled Company Reporter on June 9, 2006,
Standard & Poor's Ratings Services revised the outlook for Advance
Auto Parts Inc. to positive from stable and affirmed its 'BB+'
corporate credit and senior secured debt ratings.
ALLIANCE PHARMACEUTICAL: Corbin & Co Raises Going Concern Doubt
---------------------------------------------------------------
Corbin & Company LLP expressed substantial doubt about Alliance
Pharmaceutical Corp.'s ability to continue as a going concern
after auditing the Company's financial statements for the year
ended June 30, 2006. The auditing firm pointed to the
insufficiency of the Company's working capital to fund operations
through the fiscal year ending June 30, 2007.
The Company reported a $9.6 million net loss for the year ended
June 30, 2006, compared to a $5.7 million net loss a year earlier.
Because of its losses, the Company had an accumulated deficit of
$493.7 million at June 30, 2006.
Alliance Pharmaceutical generated $129,000 of revenue for the year
ended June 30, 2006, in contrast to $1.5 million of revenue
reported for the year ended June 30, 2005.
At June 30, 2006, the Company's balance sheet showed $3,794,000 in
total assets and $14,519,000 in total liabilities, resulting in a
stockholders' deficit of $10,725,000. The Company had
approximately $3.6 million in cash and cash equivalents at June
30, 2006, compared to $6.8 million at June 30, 2005. Working
capital deficit at June 30, 2006 stood at $9.6 million.
A full-text copy of the Company's annual report is available for
free at http://researcharchives.com/t/s?131b
Alliance Pharmaceutical Corp., is focused on developing its lead
product, Oxygent. Alliance is currently the only company that has
advanced a synthetic perfluorochemical emulsion-based oxygen
therapeutic into late-stage multi-center international clinical
trials in both Europe and North America. Alliance is developing
Oxygent as an intravascular oxygen therapeutic, based on its
proprietary PFC and surfactant technologies.
ALLIED HOLDINGS: Court Approves New USI Brokerage Pact
------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
authorized Allied Holdings, Inc., and its debtor-affiliates to
reject their present Claims Administration Agreement with USI of
Georgia, Inc., and enter into a brokerage services agreement with
the company.
As reported in the Troubled Company Reporter on Sept. 5, 2006,
Since 2002, USI has provided claims administration and brokerage
services to the Debtors in connection with the Debtors' insurance
coverage. Pursuant to a claims administration and brokerage
services agreement dated May 1, 2002, USI agreed to perform for
Allied Holdings, Inc., and its subsidiaries brokerage services and
claims administration services related to certain insurance
programs.
The proposed Brokerage Services Agreement provides that:
-- USI will be the Debtors' exclusive record broker for:
(1) auto, property and general liability insurance coverage
for all of the Debtors' operations in the U.S.; and
(2) excess liability, directors and officers liability,
employment practices liability, fiduciary, crime,
kidnap and ransom, chaplain's professional liability,
workers' compensation, excess workers' compensation,
and all other coverages for all Allied operations;
-- the Debtors will pay a monthly fee of $48,333 for the
services from the date of the Court's approval of the
Brokerage Services Agreement through October 31, 2009.
The new Brokerage Services Agreement also provides for additional
compensation to USI with regard to other coverages and products,
as well as for other services, through commissions and other
compensation as is customary in the insurance brokerage industry.
Harris B. Winsberg, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, tells the Court that USI has proven to be a reliable and
capable broker for the Debtors over the past four years. The
Brokerage Services Agreement provides for the continuation of
brokerage services by USI through the same terms originally
contemplated by the Claims Administration Agreement with a
comparable pricing structure.
USI has agreed to the arrangement, and has agreed to waive any
pre- or postpetition claims it may have against the Debtors under
the Claims Administration Agreement except claims for payment for
services rendered under the Claims Administration Agreement.
A full-text copy of the Brokerage Services Agreement is available
for free at http://researcharchives.com/t/s?1106
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. 30;
Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/
or 215/945-7000)
ALLIED HOLDINGS: Court Approves Kemper & Haul Settlement Pact
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
approved Allied Holdings, Inc., and its debtor-affiliates'
collateral return stipulation with Kemper Insurance Companies and
Haul Insurance Company.
As reported in the Troubled Company Reporter on Sept. 7, 2006,
Kemper issued a number of insurance policies through its
affiliated property and casualty insurers in favor of the Debtors
prior to the Debtors' bankruptcy filing.
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, related 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 agreed that it would be appropriate
to reduce the LOCs Amount by $4,300,000 -- the Collateral Return
Amount. For this reason, the parties stipulated 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.
A full-text copy of the Stipulation is available for free at
http://researcharchives.com/t/s?1133
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. 30;
Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/
or 215/945-7000)
AMERICAN CREDIT: Committee Hires Parker Poe as Bankruptcy Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in American Credit
Company's chapter 11 case obtained authority from the U.S.
Bankruptcy Court for the Eastern District of North Carolina to
employ Parker Poe Adams & Bernstein, LLP, as its bankruptcy
counsel.
As counsel, Parker Poe is expected to:
a. assist and advise the Committee in its consultation with
Debtor relative to the administration of the Debtor's
chapter 11 case;
b. attend meetings and negotiate with the representatives of
the Debtor;
c. assist and advise the Committee in its examination and
analysis of the conduct of the Debtor's affairs;
d. assist the Committee in the review, analysis, and
negotiation of any plan of reorganization/liquidation that
may be filed and to assist the Committee in the review,
analysis and negotiation of the disclosure statement
accompanying any plan of reorganization/liquidation;
e. take all necessary action to protect and preserve the
interests of the Committee, including the prosecution of
actions on its behalf, negotiations concerning all
litigation in which the Debtor is involved, and review and
analysis of all claims filed against the Debtor's estates;
f. prepare generally on behalf of the Committee all the
necessary motions, applications, answers, orders, reports
and papers in support of positions taken by the Committee;
g. appear, as appropriate, before the Bankruptcy Court or any
other court of competent jurisdiction and to protect and
serve the interests of the Committee before the Bankruptcy
Court or other courts of competent jurisdiction; and
h. perform all other necessary legal services as requested or
required by the Committee in these cases.
As reported in the Troubled Company Reporter on Sept. 21, 2006,
Brian D. Darer, Esq., a partner at Parker Poe, tells the Court
that he will bill $230 per hour for this engagement. Mr. Darer
discloses that the other attorneys who will render their services
in this engagement bill:
Professional Designation Hourly Rate
------------ ----------- -----------
J. William Porter, Esq. Partner $375
William L. Esser IV, Esq. Associate $220
Mr. Darer assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Darer can be reached at:
Brian D. Darer, Esq.
Parker Poe Adams & Bernstein, LLP
Wachovia Capitol Center
150 Fayetteville Street, Suite 1400
Raleigh, North Carolina 27601
Tel: (919) 828-0564
Fax: (919) 834-4564
http://www.parkerpoe.com/
Headquartered in Greenville, North Carolina, American Credit
Company, aka Resident Lenders of North Carolina, Inc. is a
financial services company that provides consumer loans and auto
financing. The Debtor filed for chapter 11 protection on July 21,
2006 (Bankr. E.D. N.C. Case No. 06-02189). Gregory B. Crampton,
Esq., and Stephani W. Humrickhouse, Esq., at Nicholls & Crampton,
P.A., represent the Debtor. The Debtor's financial condition as
of May 31, 2006 showed total assets of $21,263,884 and total debts
of $18,075,640.
AMERICAN CREDIT: Has Until November 18 to File Chapter 11 Plan
--------------------------------------------------------------
The United States Bankruptcy Court for the Eastern District of
North Carolina gave American Credit Company until Nov. 18, 2006,
to file a chapter 11 plan of reorganization including a disclosure
statement explaining that plan.
The Debtor tells the Court that because the primary objective of
its bankruptcy case is to sell its branch locations and related
contracts and receivables, it needs additional time to formulate a
its plan of reorganization and deal with constituent parties.
The Debtor is actively involved in contacting potential purchasers
and negotiations for the sale of its branch locations, and has
received draft agreements for the purchase of three locations.
The Debtor is also responding to factual inquiries from the
Official Committee of Unsecured Creditors.
Headquartered in Greenville, North Carolina, American Credit
Company, aka Resident Lenders of North Carolina, Inc. is a
financial services company that provides consumer loans and auto
financing. The Debtor filed for chapter 11 protection on July 21,
2006 (Bankr. E.D. N.C. Case No. 06-02189). Gregory B. Crampton,
Esq., and Stephani W. Humrickhouse, Esq., at Nicholls & Crampton,
P.A., represent the Debtor. Brian D. Darer, Esq., at Parker Poe
Adams & Bernstein LLP represents the Official Committee of
Unsecured Creditors. The Debtor's financial condition as of
May 31, 2006 showed total assets of $21,263,884 and total debts
of $18,075,640.
ANBEC INVESTMENT: Judge Funk Dismisses Chapter 11 Case
-------------------------------------------------------
The Honorable Jerry A. Funk dismissed Canbec Investment
Corporation's chapter 11 case because, he ruled, it involved only
two assets, both of which were in foreclosure. Further, the
debtor has no unsecured creditors, no employees and no income.
The debtor's financial problems, Judge Funk said, were nothing
more than a dispute between it and the secured creditor holding a
mortgage on the two assets, which could be resolved in a pending
state court foreclosure proceeding. Judge Funk's decision is
published at 2006 WL 2597871.
Canbec Investments Corporation was incorporated in 1998. Canbec
was in the business of purchasing residential real properties,
renovating them, and reselling them for a profit, otherwise known
as "flipping".
Canbec filed a Chapter 7 bankruptcy petition on November 16, 2004
(Bankr. M.D. Fla. Case No. 04-11640). On July 12, 2005, Canbec
filed a motion to convert the case to Chapter 11. On July 13,
2005 the Court converted the case to Chapter 11. On September 19,
2005, BTDT Investments, Inc., filed a Motion for Relief from the
Automatic Stay. On November 14, 2005 the Court conducted a
hearing on BTDT's Motion and entered an adequate protection order
requiring Canbec to make monthly payments totaling $2,000 on the
Properties. On November 2, 2005 BTDT filed a motion to reconvert
the case to Chapter 7. Ronald Cutler, Esq., in Daytona Beach,
Fla., represents Canbec.
ANVIL KNITWEAR: Taps Dechert as General Bankruptcy Counsel
----------------------------------------------------------
Anvil Knitwear, Inc., and its two debtor-affiliates, Anvil
Holdings, Inc., and Spectratex, Inc., ask the U.S. Bankruptcy
Court for the Southern District of New York for permission to
employ Dechert LLP as their general bankruptcy and restructuring
counsel.
Dechert will:
a. provide legal advice with respect to the Debtors' powers
and duties as debtors-in-possession in the continued
operation of their business and management of their
properties;
b. take all necessary action to protect and preserve the
estates of the Debtors, including the prosecution of
actions on the Debtors' behalf, the defense of any actions
commenced against the Debtors, the negotiations of disputes
in which the Debtors are involved, and the preparation of
objections to claims filed against the Debtors' estates;
c. prepare on behalf of the Debtors, as debtors in possession,
all necessary motions, applications, answers, orders,
reports, and other papers in connection with the
administration of the Debtors' estates;
d. negotiate and draft any agreements for the sale or purchase
of any assets of the Debtors, if appropriate;
e. negotiate and draft their plan of reorganization and all
documents related thereto, including, but not limited to,
the disclosure statements and ballots for voting thereon;
f. take all steps necessary to confirm and implement the Plan,
including, if necessary, modifications and negotiating
financing; and
g. perform all other necessary and appropriate legal services
in connection with the prosecution of these cases.
The Debtors tell the Court that attorneys at the firm bill between
$235 to $745 per hour while paralegals bill between $125 to $225
per hour.
Joel H. Levitin, Esq., a partner at Dechert, assures the Court
that his firm is a "disinterested person," as that term is defined
in Section 101(14) of the Bankruptcy Code.
Mr. Levitin can be reached at:
Joel H. Levitin, Esq.
Dechert LLP
30 Rockefeller Plaza
New York, NY 10112-2200
Tel: (212) 698-3500
Fax: (212) 698-3599
http://www.dechert.com/
Headquartered in New York, Anvil Holdings, Inc., is a Delaware
holding company with no material operations and owns all of the
outstanding common stock of Anvil Knitwear, Inc. Anvil Knitwear,
in turn, owns all of the outstanding common stock of Spectratex,
Inc. fka Cottontops, Inc.
The Debtors design, manufacture, and market high quality
activewear for men, women, and children, including short and long
sleeve T-shirts, sport shirts, and niche products in a variety of
styles and fabrications. The Debtors also sell caps, towels,
robes, and bags. The Debtors primarily market and sell their
products to distributors, screen printers, and private label brand
owners, principally in the United States. The Debtors' products
are available under the "Anvil" brand names. The Debtors also
sell products under the following brands: "chromaZONE," "Cotton
Deluxe," "Towels Plus," and "Teak." The Debtors sometimes sell
their products under private label by agreements with holders of
other brand names.
The Debtors filed for chapter 11 protection on Oct. 2, 2006
(Bankr. S.D.N.Y. Case Nos. 06-12345 through 06-12347). The
Debtors' consolidated financial data as of July 29, 2006 showed
total assets of $110,682,000 and total debts of $244,586,000. The
Debtors' exclusive period to file a chapter 11 plan expires on
Jan. 30, 2007.
ANVIL KNITWEAR: Taps Donlin Recano as Claims and Noticing Agent
---------------------------------------------------------------
Anvil Knitwear, Inc., and its two debtor-affiliates, Anvil
Holdings, Inc., and Spectratex, Inc., ask the U.S. Bankruptcy
Court for the Southern District of New York for permission to
employ Donlin, Recano & Company, Inc. as their claims, notice, and
balloting agent.
Donlin Recano will:
(a) notify all potential creditors of the filing of the
Debtors' bankruptcy petitions and of the setting of the
first meeting of creditors, pursuant to Section 341 of the
Bankruptcy Code, under the proper provisions of the
Bankruptcy Code and the Bankruptcy Rules;
(b) maintain an official copy of the Debtors' schedules of
assets and liabilities and statement of financial affairs
listing the Debtors' known creditors and the amounts owed;
(c) notify all potential creditors of the existence and amount
of their respective claims, as evidenced by the Debtors'
books and records and as set forth in their Schedules;
(d) furnish a notice of the last day for the filing of proofs
of claim and a form for the filing of a proof of claim,
after such notice and form are approved by the Bankruptcy
Court;
(e) file with the Clerk an affidavit or certificate of service
which includes a copy of the notice, a list of persons to
whom it was mailed, in alphabetical order, and the date
the notice was mailed, within 10 days of service;
(f) docket all claims received, maintain the official claims
registers for each of the Debtors on behalf of the Clerk,
and provide the Clerk with certified duplicate unofficial
Claims Registers on a monthly basis, unless otherwise
directed;
(g) specify, in the applicable Claims Register, these
information for each claim docketed:
(i) the claim number assigned,
(ii) the date received,
(iii) the name and address of the claimant and agent, if
applicable, who filed the claim,
(iv) the filed amount of the claim, if liquidated, and
(v) the classification(s) of the claim, e.g. secured,
unsecured, priority, etc., according to the proof of
claim;
(h) relocate, by messenger, all of the actual proofs of claim
filed to Donlin Recano, not less than weekly;
(i) record all transfers of claims and provide any notices of
such transfers required by Bankruptcy Rule 3001;
(j) make changes in the Claims Register pursuant to Court
Order;
(k) upon completion of the docketing process for all claims
received to date by the Clerk's office, turn over to the
Clerk copies of the Claims Registers for the Clerk's
review;
(l) maintain the Claims Register for public examination
without charge during regular business hours;
(m) maintain the official mailing list for each Debtor of all
entities that have filed a proof of claim, which list
shall be available upon request by a party-in-interest or
the Clerk;
(n) assist with, among other things, solicitation,
calculation, and tabulation of votes and distribution, as
required in furtherance of confirmation of the Plan;
(o) provide and maintain a website where parties can view
claims filed, status of claims, and pleadings or other
documents filed with the Court by the Debtors;
(p) 30 days prior to the close of these cases, an order
dismissing Donlin Recano would be submitted terminating
its services upon completion of its duties and
responsibilities and upon the closing of these cases; and
(q) at the close of the case, box and transport all original
documents in proper format, as provided by the Clerk's
office, to the Federal Records Center.
The Debtors tell the Court that Donlin Recano's professionals
bill:
Professional Hourly Rate
------------ -----------
Principals $250
Senior Bankruptcy Consultants/Attorneys $170 - $230
Bankruptcy Analysts $130 - $155
Programming Consultants $135
Case Administrators $65
Data Input $35
Louis A. Recano, principal at Donlin Recano, assures the Court
that his firm does not hold or represent any interest adverse to
the Debtors or their estates.
Headquartered in New York, Anvil Holdings, Inc., is a Delaware
holding company with no material operations and owns all of the
outstanding common stock of Anvil Knitwear, Inc. Anvil Knitwear,
in turn, owns all of the outstanding common stock of Spectratex,
Inc. fka Cottontops, Inc.
The Debtors design, manufacture, and market high quality
activewear for men, women, and children, including short and long
sleeve T-shirts, sport shirts, and niche products in a variety of
styles and fabrications. The Debtors also sell caps, towels,
robes, and bags. The Debtors primarily market and sell their
products to distributors, screen printers, and private label brand
owners, principally in the United States. The Debtors' products
are available under the "Anvil" brand names. The Debtors also
sell products under the following brands: "chromaZONE," "Cotton
Deluxe," "Towels Plus," and "Teak." The Debtors sometimes sell
their products under private label by agreements with holders of
other brand names.
The Debtors filed for chapter 11 protection on Oct. 2, 2006
(Bankr. S.D.N.Y. Case Nos. 06-12345 through 06-12347). The
Debtors' consolidated financial data as of July 29, 2006 showed
total assets of $110,682,000 and total debts of $244,586,000. The
Debtors' exclusive period to file a chapter 11 plan expires on
Jan. 30, 2007.
ASARCO LLC: Wants to Expand Envirocon's Scope of Work
-----------------------------------------------------
ASARCO LLC seeks authority from the Honorable Richard S. Schmidt
of the U.S. Bankruptcy Court for the Southern District of Texas in
Corpus Christi to enter into two change orders with Envirocon,
Inc., for the extra work.
ASARCO LLC has entered into consent decrees with the U.S.
Environmental Protection Agency and the Montana Department of
Environmental Quality requiring ASARCO to clean up a lead smelter
plant in East Helena, Montana, by the end of 2006.
ASARCO opted to demolish the Facility, as it is easier and more
efficient. Thus, pursuant to the Consent Decrees, ASARCO must
demolish two large areas -- Phase 2 and Phase 3 demolition areas
-- within the smelter complex by yearend.
ASARCO lacks the manpower to do the demolition work itself, thus,
it needed to hire a contractor.
ASARCO submitted an Invitation to Bid to seven entities, where it
sought bids for demolition work for the East Helena facility. In
July 2006, the Court permitted ASARCO, in consultation with the
Official Committee of Unsecured Creditors, to select the best and
lowest bid and enter into a contract with that bidder.
In consultation with the Committee, ASARCO has determined that
Envirocon, Inc., submitted the best and lowest bid.
Consequently, ASARCO entered into a Construction Contract for
Phase 2 and 3 Demolition with Envirocon on July 27, 2006.
Tony M. Davis, Esq., at Baker Botts L.L.P., in Dallas, Texas,
relates that the Contract permits ASARCO to order extra work
from, or initiate changes in the work to be done by, Envirocon.
However, the extra work involving the demolition of facilities
and salvage beyond the proposed scope of work will be conducted
only with Court approval.
Pursuant to Change Order Directive No. 1, Envirocon will remove
the inner sheeting of the Hot Cottrell Building. Results of
sampling of the sheeting indicate that it contains an asbestos
coating. The sheeting was only discovered after the outing
sheeting and insulation were removed, thus was not identified in
the original asbestos survey. Envirocon agrees to perform the
removal work for $47,955.
Pursuant to Change Order Directive No. 2, Envirocon will dispose
transformers that sample below 500 ppm PCBs. However, most of
the transformers contain levels above that amount and so will
have higher disposal cost, Mr. Davis notes. Envirocon agrees to
perform the disposal work for $25,487.
Mr. Davis asserts that entry into the Change Orders would be
necessary to complete the demolition work and is in the interests
of public health and safety.
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. 30; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
ASARCO LLC: Wants Mission Mine South Mill Back From Mineral Park
-----------------------------------------------------------------
ASARCO LLC asks the Honorable Richard S. Schmidt of the U.S.
Bankruptcy Court for the Southern District of Texas to:
(a) declare that the Transfer of the Assets of the Mission Mine
South Mill is void;
(b) issue a temporary restraining order and a preliminary
injunction prohibiting Mineral Park from transferring or
dismantling the Assets from the Mission Mine until the
judgment is fully satisfied;
(c) set aside and cancel the APA, the Bill of Sale and any
other documents evidencing the transfer of the Assets from
ASARCO to Mineral Park; and
(d) award it attorneys' fees, prejudgment and postjudgment
interest, and costs to the fullest extent permitted by
law.
When Grupo Mexico, S.A. de C.V., acquired ASARCO LLC in 1999,
ASARCO has suffered from under-capitalization and could not
generate sufficient revenue to pay its debts when they became
due, James R. Prince, Esq., at Baker Botts L.L.P., in Dallas,
Texas, relates. ASARCO was forced to sell its assets as quickly
as possible to raise cash to pay critical operating expenses.
By the end of 2004, ASARCO has already sold many of its key
assets to raise cash, but still needed more money. Thus, ASARCO
considered selling the South Mill of the Mission Mine located in
Sahuarita, Pima County, Arizona.
South Mill Sale
The Mission South Mill has a capacity of milling 20,000 tons of
ore per day. The Mission Mine, as a whole, has approximately
163,000,000 tons of ore and those reserves are not expected to be
depleted for many years, Mr. Prince states.
In July 2005, Mercator Minerals Ltd., Mineral Park, Inc.'s parent
company, offered to purchase the South Mill Assets for
$6,000,000:
-- $3,900,000 for the major mill equipment; and
-- $2,100,000 for the surplus parts and inventory.
The parties did not attempt to value the residual concentrates in
the mill tanks, Mr. Prince informs the Court.
According to Mr. Prince, because of the cash insurgency and thus
without engaging in any negotiations or making any counter
offers, Daniel Tellechea, ASARCO's then chief executive officer,
accepted the offer. No appraisals or detailed market studies of
the Assets were undertaken and the Assets were not put up for
auction or other competitive bidding, Mr. Prince adds.
ASARCO and Mineral Park entered into an Asset Purchase Agreement
on the South Mill sale on July 11, 2005, and signed the Bill of
Sale eight days after. ASARCO's then board of directors formally
approved the Sale on August 24, 2005.
Mr. Prince argues that ASARCO did not receive reasonably
equivalent value for the Transfer. The Assets were worth a
minimum of $20,000,000, significantly more than what Mineral Park
paid for them, and replacement cost for the mill could exceed
$80,000,000. Mr. Prince adds that ASARCO's refurbishing costs in
the Mission South Mill alone exceeds $40,000,000.
Mr. Prince contends that the Transfer also deprived ASARCO of
assets that have appreciated in value since the date of the
Agreement because of the increase in the price of copper. If the
sale to Mineral Park is set aside, ASARCO may then utilize the
Assets to increase its copper production and thereby enhance its
chances of a successful reorganization, Mr. Prince states.
Mr. Prince maintains that ASARCO was hopelessly insolvent at the
time of the sale of the Assets. ASARCO's approximately 1,500
hourly employees were on strike and the company was in default on
many of its debt obligations. Moreover, at the time of the
Transfer, ASARCO engaged in business and transactions for which
the property remaining after the Transfer was an unreasonably
small capital and it had incurred debts that were beyond its
ability to pay as they matured.
Mr. Prince asserts that pursuant to Sections 548(a)(1)(B) and
544(b)(1) of the Bankruptcy Code and the Arizona Revised
Statutes, the Transfers constitute fraudulent transfers:
-- During the 90-day period before the Petition Date, ASARCO
transferred the Assets to or for the benefit of Mineral
Park. The Transfer was made for or on account of an
Antecedent debt owed by ASARCO before it was made;
-- The prepetition Transfer was made while ASARCO was
insolvent;
-- The Transfer enabled Mineral Park to receive more than it
would have received if:
(i) ASARCO's Chapter 11 case was a Chapter 7 case;
(ii) the Transfer had not been made; and
(iii) Mineral Park had received payment of the debt to the
extent provided by the provisions of the Bankruptcy
Code; and
-- ASARCO received less than reasonable equivalent value in
exchange for making the Transfer.
As a result of the Transfer, ASARCO and its creditors have been
harmed, Mr. Prince contends.
Dismantling of the Assets
Pursuant to the APA, Mineral Park was permitted to leave the
Assets at the Mission Mine until Dec. 31, 2008. Storage charges
would not begin to accrue until January 2007, at which time
Mineral Park would be charged storage costs of $5,000 per month.
Mr. Prince relates that Mineral Park has removed or is in the
process of removing the liners from two of the four large
grinding mills. Reinstalling the liners will be expensive, so
halting the removal of the liners immediately is critical, Mr.
Prince asserts. The residual concentrates in the thickener tanks
have also been removed in preparation for transfer of the tanks
to Mineral Park's mine.
The next step in the dismantling process may be to remove the
grinding mills from the site, which would likely cause
substantial damage to the concrete foundation of the equipment,
Mr. Prince says. Mineral Park has retained a contractor to
expedite the dismantling process.
The cost of moving the Assets from the Mission Mine to the
Mineral Park's Copper Mine, and back again if the Transfer is
avoided, is significant, Mr. Prince notes. According to Mineral
Park, it will cost approximately $100,000,000 to dismantle and
relocate the mill to Mineral Park's copper mine.
Dismantling and removing the Assets from ASARCO's property and
possession violates the automatic stay, and most certainly harms
the Debtor's estate, if Mineral Park is not immediately enjoined,
Mr. Prince argues. The threatened injury to ASARCO far outweighs
any harm an injunction may cause Mineral Park. The cost of
moving and reassembling the Assets is substantial, and if Mineral
Park is not enjoined from removing any of the Assets, both
parties will needlessly incur significant expenses. On the
contrary, Mineral Park faces only the prospect of delaying the
relocation of the Assets for the duration of the injunction.
To preserve the status quo and the rights of ASARCO and its
creditors, Mineral Park should be cited to appear and show cause
at the earliest possible hearing before the Court why it should
not be enjoined from moving the Assets from the Mission Mine site
during the pendency of the Adversary Proceeding, Mr. Prince
asserts.
Mercator's Statement
Mercator Minerals Ltd. reports that on Sept. 22, 2006, ASARCO LLC
filed a complaint against Mercator's wholly owned subsidiary,
Mineral Park, Inc., in the United States Bankruptcy Court for the
Southern District of Texas seeking to void Mineral Park. Inc.'s
July 2005 purchase of the mill currently located at ASARCO's
Mission Complex south of Tucson, Arizona. Mercator purchased the
Mission South Mill in 2005 and had been dismantling it in
anticipation of relocating the mill to the Mineral Park mine site
in order to expand Mercator's copper operations at Mineral Park.
Mercator believes the complaint has no merit and that Mercator
will prevail in this litigation.
"ASARCO's complaint in respect of the Mission South Mill came with
no warning," said Mike Surratt, President & CEO of Mercator
Minerals. "We paid ASARCO its asking price for the equipment in
an open sale process, and we see no legitimate reason for ASARCO's
board now to come along more than a year later and attempt to undo
the transaction. If ASARCO believed the Mission South Mill was
worth more than we paid, they were under no obligation to sell it
to us," he said. "We will vigorously defend our ownership of the
Mission South Mill."
The ASARCO complaint will have no impact on current copper
operations at the Mineral Park Mine, which continue to generate
substantial operating cash flow. During the third quarter ending
Sept. 30, 2006, Mercator anticipates producing record pounds
of copper and record cash flow from the Mineral Park Mine.
ASARCO Litigation
At a hearing on Sept. 22, 2006 in Corpus Christi, Texas, notice of
which Mercator did not receive from ASARCO until late Sept. 21,
2006, Mercator agreed to temporarily suspend further dismantling
or removal of the Mission South Mill from the ASARCO site pending
an Oct. 24, 2006, hearing before the Court on ASARCO's request for
a preliminary injunction. The Court also set a schedule for
evidentiary discovery during this period. The October 24 hearing
is to determine if ASARCO is entitled to prevent Mercator from
relocating the Mission South Mill.
Mercator has engaged U.S. bankruptcy and litigation counsel and
believes that it has solid grounds to defeat the ASARCO litigation
and retain ownership of the Mill. Despite the delay in moving the
Mill, Mercator anticipates keeping to its overall schedule to
complete the Mineral Park expansion, should it prevail in the
litigation. Engineering, mine site work, and infrastructure
upgrades will continue on schedule.
In its complaint, ASARCO primarily alleges that the Company failed
to pay "reasonably equivalent value" for the Mission South Mill
and that, under U.S. bankruptcy law, this voids the sale, since it
occurred within one year prior to the bankruptcy filing. In fact,
ASARCO had shut the Mission South Mill down in 2001 and invited
offers for purchase of the mill. Mercator was the successful
bidder in the sale process. It purchased the Mission South Mill
in July 2005 for $6 million, which was ASARCO's asking price.
ASARCO filed for bankruptcy in August 2005 and had, until late
last week, given no indication that it intended to challenge the
sale.
About Mercator
Mercator Minerals Ltd. (ML-TSX) is a copper producer that owns and
operates the Mineral Park SX/EW Copper Mine in Arizona, with a
corporate strategy focused on maximizing the production potential
of the Mineral Park copper-molybdenum deposit. Mercator, in its
Sept. 5, 2006, news release, announced positive results from
an independent technical study for the expansion of its wholly
owned Mineral Park copper mine to a 37,000 ton-per-day milling
operation producing copper-silver and molybdenum concentrates in
parallel with its current SX/EW copper production. The Company
has filed a technical study for an expansion of increased copper
production plus molybdenum, and silver production.
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. 30; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
ASBURY AUTOMOTIVE: Moody's Assigns Loss-Given-Default Rating
------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its B1 Corporate Family Rating for Asbury
Automotive Group, Inc., and its B3 ratings on the company's
$250 million 9% subordinated notes and $200 million 8%
subordinated notes. Additionally, Moody's assigned an LGD5 rating
to those bonds, suggesting noteholders will experience an 84% loss
in the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in New York City, New York, Asbury Automotive Group,
Inc., is an automobile retailer in the U.S. The Company offers
automotive products and services, including new and used vehicle
sales and related financing and insurance, vehicle maintenance and
repair services, replacement parts and service contracts.
AUSTIN COMPANY: Committee Taps Arent Fox as Special ERISA Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of The Austin
Company and its debtor-affiliates asks the U.S. Bankruptcy Court
for the Northern District of Ohio for permission to retain Arent
Fox PLLC as its special ERISA counsel
Arent Fox will:
(a) provide legal service with respect to ERISA matters facing
the Committee;
(b) advise the Committee concerning any Pension Benefit
Guaranty Corporation's claims relating to The Austin
Company Retirement Plan;
(c) assist in negotiating the purchase of annuity contracts
that will fully satisfy The Austin Company's obligations
to the Pension Plan;
(d) prepare necessary responses, objections, motions, answers,
order, reports and other legal papers.
The Debtor tells the Court that the firm's professionals bill:
Professional Hourly Rate
------------ -----------
Carol Connor Flowe, Esq. $480
Nancy S. Heermans, Esq. $470
Jeffrey H. Ruzal, Esq. $295
Jeffrey N. Rothleder, Esq. $275
To the best of the Committee's knowledge, Arent Fox does not hold
or represent an interest adverse to the Debtors or their estates.
Ms. Flowe can be reached at:
Carol Connor Flowe, Esq.
Arent Fox PLLC
1050 Connecticut Avenue, Northwest
Washington, DC 20036-5339
Tel: (202) 857-6000
Fax: (202) 857-6395
http://www.arentfox.com/
Headquartered in Cleveland, Ohio, The Austin Company is an
international firm offering a comprehensive portfolio of
in-house architectural, engineering, design-build, construction
management and consulting services. The Company also offers
value-added strategic planning services including site location,
transportation and distribution consulting, and facility and
process audits. The Company and two affiliates filed for
chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ohio Lead
Case No. 05-93363). Christine M. Pierpont, Esq., at Squire,
Sanders & Dempsey, LLP, represents the Debtors in their
restructuring efforts. M. Colette Gibbons, Esq., and Victoria E.
Powers, Esq., at Schottenstein Zox & Dunn Co., LPA, represent 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.
AUTONATION INC: Moody's Assigns Loss-Given-Default Rating
---------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its Ba1 Corporate Family Rating for AutoNation,
Inc. Additionally, Moody's revised or held its probability-of-
default ratings and assigned loss-given-default ratings on these
loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$600 million unsec.
revolving credit
facility Ba2 Ba2 LGD5 84%
$600 million unsec.
term loan Ba2 Ba2 LGD5 84%
$300 million floating
rate notes Ba2 Ba2 LGD5 84%
$300 million
fixed rate notes Ba2 Ba2 LGD5 84%
Other senior unsec.
fixed rate notes Ba2 Ba2 LGD5 84%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Fort Lauderdale, Florida, AutoNation, Inc.,
-- http://www.autonation.com-- is America's largest automotive
retailer and a component of the Standard and Poor's 500 Index.
AutoNation has approximately 27,000 full-time employees and owns
and operates 346 new vehicle franchises in 17 states.
BALLY TOTAL: June 30 Stockholders' Deficit Tops $1.4 Billion
------------------------------------------------------------
Bally Total Fitness Holding Corporation filed its financial
results for the second quarter and six months ended June 30, 2006,
with the Securities and Exchange Commission.
"Bally's business saw its top-line performance negatively affected
in the first half of 2006 as a result of a lower average number of
total members, a changing mix of new members added and a lower
average monthly selling price for new members added," Barry R.
Elson, acting chief executive officer, commented on the results.
"We are continuing to refine the 'Build Your Own Membership'
business model to address consumers' clear need for added
flexibility, while at the same time positioning the company for
future revenue and earnings growth.
"From an operating perspective, we have instituted a number of
management process disciplines to enhance the understanding of our
performance drivers. We are also continuing to selectively invest
in new equipment to upgrade club facilities, as well as maintain
our strong marketing initiatives."
Don R. Kornstein, interim chairman, added, "We are actively
pursuing both short-term and long-term financing alternatives that
will enable Bally to address its significant debt load and create
financial flexibility for its operations. We continue to believe
that the Company has an attractive brand franchise, operates in a
growing sector of the leisure industry and can achieve improved
operational performance over time."
Second Quarter Financial Results
Net revenues for the quarter of $254.6 million decreased
$5.0 million, or 2%, from the second quarter of 2005. Membership
services revenue declined $3.8 million, or 2%, to $239.5 million,
driven by a 3% decline in the average number of members to
3.581 million. New
member adds in the 2006 quarter of approximately 278,000 were
approximately 5% lower than the 2005 quarter. Average monthly
revenue per member in the quarter was $19.30, up $0.11 compared
with the second quarter of 2005.
Personal training revenue of $32.2 million grew 1% over the second
quarter of 2005. Retail products revenue decreased $1.2 million,
or 9%, to $11.5 million from the same period last year, reflecting
the conversion of lower performing full-size in-club retail stores
to a more cost effective model integrated into front-desk
operations.
Cash collections of membership revenue, exclusive of personal
training, during the quarter were $192.5 million, a decrease of
$3.6 million, or 2%, from 2005 as a result of the lower average
number of members and an unfavorable mix of new member adds,
continuing the trend seen thus far in 2006. The reported average
monthly cash received per member increased $0.13 in the second
quarter of 2006 to $17.92, benefited by an approximate $0.31
increase from accelerated payments from members prepaying value
plan memberships early and reactivations of previously expired
members.
Operating income of $24.0 million for the quarter was $200,000, or
1%, below the second quarter of 2005 reflecting the impact of
lower revenue, partially offset by a reduction in operating
expenses.
These key expense categories are reflected in the second quarter:
-- A $500,000 reduction in membership services expenses.
Expense reduction initiatives continued in the second
quarter, resulting in lower overall expense levels, despite
higher utility, rent and insurance costs.
-- A $2.7 million or 21% decrease in retail product expenses
consistent with the decrease in retail revenue resulted in
retail operating margin improvement to 7%. The Company's
retail operations had an operating loss of $800,000 in the
second quarter of 2005, compared with operating income of
$800,000 in the second quarter of 2006.
-- A $1.5 million or 11% increase in advertising expenses,
due to increases in media spending and television production
costs.
-- A $200,000 or 3% decrease in information technology costs
for the period due to reduced use of outside consultants and
lower telecommunications costs partially offset by increased
salaries.
-- A $1.8 million or 12% decrease in depreciation expense,
reflecting lower capital spending and fewer depreciable
assets resulting from asset impairment charges in prior
periods.
-- A $200,000 or 1% decrease in other general and
administrative costs. Higher levels of spending for
professional fees related to insurance, Directors' fees and
audit costs were offset by a reversal of approximately
$900,000 million of the $4.6 million write-off of equipment
at various clubs recorded in the fourth quarter of 2005.
The net loss from continuing operations for the quarter of
$700,000 reflects a foreign exchange gain of $1.8 million and
interest expense of $26.1 million.
Interest expense increased $5 million over the second quarter of
2005, primarily due to increased amortization of deferred
financing fees incurred related to bondholder consent
solicitations.
The Company uses EBITDA (operating income plus depreciation and
amortization) as a measure of operating performance. The lower
revenue contributed to a $2.0 million, or 5%, decline in this
performance measure to $37.2 million compared with $39.2 million
in the second quarter of 2005.
Operating results for the second quarter of 2005 have been
reclassified to exclude Crunch Fitness, sold Jan. 20, 2006, which
is presented as a discontinued operation.
First Six Months 2006 Financial Results
Net revenues for the first six months of 2006 of $509.8 million
were $3.6 million, or 1%, below the first six months of 2005.
Membership services revenue of $479.2 million was down modestly
from the prior year as increased personal training revenue, up
$2.2 million, or 4%, offset a $2.5 million or 1% decrease in
membership revenue.
The decrease in membership revenue is due to a 2% decrease in
average members to 3.564 million, reflecting the factors. Average
monthly revenue per member increased to $19.46 in the 2006 period
from $19.09 for the first half of 2005.
Retail products revenue decreased $2.6 million, or 10%, from the
same period in 2005 to $23.4 million.
Miscellaneous revenue of $7.2 million was 9% below last year due
to lower revenue from strategic partnerships and franchising fees.
Cash collections of membership revenue during the period were
$393.1 million, a decrease of $9.9 million, or 2%, from 2005.
Reported average monthly cash received per member for the six
months of 2006 was $18.38, equal to the prior year period, and
benefited in 2006 by an approximate increase of $0.11 from
accelerated payments from members prepaying value plan memberships
early and reactivations of previously expired members.
Operating income of $42.3 million was down $5.0 million, or 11%,
below the first six months of 2005 due to lower revenue and a
$1.4 million increase in operating expenses.
Membership services expenses increased $3.8 million, or 1%,
reflecting higher utility and insurance costs offset by lower
personnel costs resulting from expense reduction initiatives.
Retail costs were down $4.6 million, or 17%, with substantial
improvement in retail operating margin to 7% from (1)% in the
first half of 2005.
Advertising expenses increased $3.3 million, or 10%, for the
period reflecting planned media spending and the impact of
deferred production costs from the fourth quarter of 2005.
Information technology costs decreased $400,000, or 4%, for the
period, reflecting the reasons noted earlier for the second
quarter.
Other general and administrative costs increased $3.6 million, or
12%, over the same period in 2005 as a result of the ongoing
litigation and related costs, and increases in insurance,
Directors' fees, and audit costs.
Driven by lower capital spending in past periods and fewer
depreciable assets resulting from impairment charges, depreciation
expense decreased by $2.5 million, or 8%, in the 2006 period.
Net income of $31.9 million increased from $6.2 million in the
first six months of 2005, reflecting the $38.4 million gain on the
disposition of Crunch Fitness.
Interest expense increased by $9.9 million, or 25%, to
$49.2 million in the first half of 2006 due primarily to increased
amortization of deferred financing costs ($6.8 million) incurred
related to bondholder consent solicitations and higher interest
rate levels.
EBITDA for the first six months of 2006 of $69.7 million was
$7.5 million below the six-month 2005 amount of $77.2 million,
reflecting lower revenue and higher operating expenses.
Operating results for the first half of 2005 have been
reclassified to exclude Crunch Fitness, sold Jan. 20, 2006, which
is presented as a discontinued operation.
Cash and Liquidity
At June 30, 2006, the Company had $30 million of borrowings and
$14.1 million in letters of credit outstanding under its
$100 million revolving credit facility, leaving availability at
$55.9 million.
At Aug. 31, 2006, borrowings had increased to $48.5 million with
letters of credit outstanding unchanged at $14.1 million, reducing
availability to $37.4 million.
The increase in utilization of the revolver reflects a combination
of decreased cash collections of membership revenue, customary
expense disbursements associated with the Company's operations,
capital expenditures, and the July scheduled interest payment to
holders of the Company's 10-1/2% Senior Notes due 2011.
In addition, making the upcoming interest payments due to holders
of the 9-7/8% Senior Subordinated Notes due 2007 in October 2006,
and the 10-1/2% Senior Notes due 2011 in January 2007 will further
reduce liquidity.
The entire amount outstanding of $171.4 million on the term loan
and revolving credit has been included in current maturities as of
June 30, 2006, as a result of the early termination provision that
will be triggered in the event that the Company's 9-7/8% Senior
Subordinated Notes due 2007 have not been refinanced on or before
April 15, 2007.
Absent an agreement by the lenders to extend the maturity of the
Credit Agreement or the Company refinancing the Credit Agreement,
the Company will have insufficient liquidity to operate its
business and be unable to satisfy the Credit Agreement obligations
when due in April 2007.
If these events occur, the holders of the 9-7/8% Senior
Subordinated Notes due 2007 and the 10-1/2% Senior Notes due 2011
could accelerate the obligations under those instruments and the
Company would not be able to satisfy those obligations.
The Company is actively evaluating various alternatives to address
its outstanding debt.
Capital Expenditures
Capital expenditures for the first six months of $18.9 million
included $7.3 million of capital expenditures in the second
quarter.
The first half increase of $4.4 million, or approximately 30%,
from 2005 primarily resulted from a large, scheduled replacement
of exercise equipment early in 2006.
The Company has focused its capital spending primarily on
maintenance and improvement of existing clubs and limited new club
growth.
A new club was opened in Carrollton, Tex., in April 2006 and in
Downey, Calif., in September 2006.
One club currently in development is planned to open in 2006,
which replaces an existing club.
The Company expects to continue controlled capital spending and is
currently planning approximately $35 million of capital spending
in 2006.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?1328
Chicago, Ill.-based Bally Total Fitness Holding Corp. (NYSE: BFT)
-- http://www.Ballyfitness.com/-- is a commercial operator of
fitness centers, with over 400 facilities located in 29 states,
Mexico, Canada, Korea, the Caribbean, and China under the Bally
Total Fitness, Bally Sports Clubs, and Sports Clubs of Canada
brands.
At June 30, 2006, Bally Total's balance sheet showed a
$1,410,293,000 stockholder's deficit.
* * *
Moody's Investors Service confirmed its Caa1 Corporate Family
Rating for Bally Total Fitness Holding Corp.
BEARINGPOINT INC: Moody's Cuts Ratings on $450 Million Bonds to B3
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings of BearingPoint,
Inc. and has placed the company's ratings on review for further
possible downgrade. The rating actions reflect the company's YTD
September 2006 cash outflows, which have largely been driven by
higher than expected finance and accounting systems costs, delays
in filing its annual financial reports with the SEC, and increased
Q2 2006 voluntary employee turnover.
The review will focus on the company's prospects for reducing
costs to operate its accounting and financial systems, prospects
for becoming current on the filing of its SEC periodic reports,
reducing its voluntary turnover, and generating free cash flow. As
part of the review, Moody's will also assess the company's
prospects for either achieving bondholder consents or appealing
litigation (or disputing damage claims) stemming from a September
2006 New York State Supreme Court Order, which grants summary
judgment to plaintiffs and finds the company in breach under the
indenture governing the company's 2.75% Series B convertible
subordinated debentures.
On September 26, 2006, the company announced it has further
delayed the filing of its FY 2005 10-K as a direct consequence of
the September 2006 Order and does not expect to be current on the
filing of its SEC financial statements until the spring of 2007 at
the earliest. The company also announced that it expects 2006
cash will be negatively impacted by unanticipated, unusual, and
ongoing costs to operate its accounting and financial systems and
by unanticipated and unusual costs to retain its employees.
Ratings downgraded and placed on review for further possible
downgrade:
* Corporate Family Rating --downgraded to B2 from B1
* $250 million series A subordinated convertible bonds due
2024 --downgraded to B3 from B2
* $200 million series B subordinated convertible bonds due
2024 --downgraded to B3 from B2
Headquartered in McLean, Virginia, BearingPoint, Inc. is a I/T
systems integrator, consultancy, and managed services provider for
commercial and governmental entities worldwide.
BOMBARDIER INC: Gets $1.35 Bil. Aircraft Order from Northwest Air
-----------------------------------------------------------------
Bombardier Aerospace Corp., a subsidiary of Bombardier Inc.,
disclosed that Northwest Airlines Corp. has placed an order for 36
Bombardier CRJ900 aircraft and has taken options on an additional
96, for a total of 132 aircraft if all options are exercised.
The transaction is conditional upon Northwest Airlines receiving
approval from the U.S. Bankruptcy Court for Southern District of
New York.
The value of the orders based on CRJ900 aircraft list price would
be approximately $1.35 billion. The value could rise to
$5.18 billion if all options are exercised.
The aircraft will be offered in a dual class configuration with 12
First Class and 64 Economy Class seats within a spacious cabin.
Concurrent with the purchase of these CRJ900 aircraft, Northwest
has agreed to continue to operate all 141 CRJ200/CRJ440 aircraft
as part of the Northwest Airlink operation.
"[The] order builds on an established relationship with Bombardier
and will provide our customers with a comfortable and efficient
flight experience," said Doug Steenland, Northwest president and
chief executive. "The new aircraft will lower our operating costs
through a combination of significantly lower fuel consumption
along with inherent maintenance cost advantages."
"Major airlines are shifting short- and medium-haul flying to
larger and more fuel-efficient state-of-the-art aircraft," said
Steven Ridolfi, President, Bombardier Regional Aircraft. "The
CRJ900 aircraft fills this requirement perfectly."
Northwest is the 10th customer for the CRJ900 aircraft since the
aircraft was introduced into revenue service in 2003. The CRJ900
aircraft has established itself as having the lowest operating
costs of any jet in the 90-seat class. It is also very popular
with passengers due to its comfortable seating with increased
legroom, modern amenities and additional baggage storage capacity.
As of July 31, 2006, firm orders for the Bombardier CRJ900
airliner stood at 102 aircraft with 59 delivered. Orders for the
CRJ family of regional jets numbered 1,449, making it the fifth
best-selling commercial jetliner family in aviation history.
About Northwest Airlines
Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel. When the
Debtors filed for protection from their creditors, they listed
$14.4 billion in total assets and $17.9 billion in total debts.
About Bombardier Inc.
Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) --
http://www.bombardier.com/-- manufactures innovative
transportation solutions, from regional aircraft and business
jets to rail transportation equipment.
Bombardier Inc.'s 6.3% Notes due 2014 carry Moody's Investor
Service's Ba2 rating and Standard & Poors' and Fitch Ratings' BB
ratings.
BUFFETS HOLDINGS: Moody's Holds Caa1 Rating on $330 Mil. Sr. Notes
------------------------------------------------------------------
Moody's Investors Service confirmed the B2 corporate family rating
on Buffets Holdings, Inc. while assigning a B2 corporate family
rating to Buffets, Inc. and a Ba3 rating to Buffets proposed $610
million 1st lien senior secured credit facility consisting of a
$40 million revolver, a $70 million synthetic letter of credit
facility and a $500 million term loan B. A Caa1 rating was also
assigned to Buffets' $330 million senior unsecured notes.
This proposed capital structure is the result of the company's
announcement in July to acquire Ryan's Restaurant Group, Inc.
(Ryan's) for total consideration of approximately $876 million.
Upon receipt of regulatory and Ryan's shareholder approvals, the
transaction is expected to be completed prior to calendar year
end. The rating outlook is stable. Moody's noted that the rating
assignments are subject to a review of the final documentation.
These rating actions conclude the review for possible downgrade
that was initiated July 25, 2006 for Buffets Holdings, Inc. The
corporate family rating and rating outlook will subsequently be
moved to Buffets from Holdings since it will be the highest
ranking entity within the Buffets' organization with rated debt
under the proposed recapitalization scenario. Should this
proposed transaction not transpire, the corporate family rating
and rating outlook would be moved back up to Holdings.
Following the closing of the proposed credit facility and senior
unsecured notes, Moody's will withdraw the legacy capital
structure ratings including the Caa1 senior unsecured notes at
Holdings along with the Ba2 ratings on the credit facilities and
the B3 subordinated notes of Buffets.
The B2 corporate family rating reflects the combined entity's
significantly enhanced scale and scope, broader domestic footprint
and what should be material, reasonably attainable near-term cost
savings to drive margin improvement and cash flow generation.
Factors that constrict the rating include high financial leverage,
operating within the highly competitive family dining segment of
the restaurant industry and the challenges associated with
effectively and smoothly integrating the two brands.
Ratings assigned with stable outlook:
* Buffets, Inc.
-- B2 corporate family rating,
-- B2 probability of default rating, LGD4-50% loss given
default assessment,
-- Ba3 (LGD2, 25%) for the $40 million revolver maturing in
2011,
-- Ba3 (LGD2, 25%) for the $70 million synthetic letter of
credit facility maturing in 2013,
-- Ba3 (LGD2, 25%) for the $500 million term loan B maturing
in 2013,
-- Caa1 (LGD5, 80%) for the $330 million senior unsecured
notes.
Ratings confirmed:
* Buffets Holdings, Inc.
-- B2 corporate family rating,
-- B2 probability of default rating, LGD4-50% loss given
default assessment,
Ratings confirmed and to be withdrawn after close of transaction:
* Buffets Holdings, Inc.
-- Caa1 (LGD6, 92%) on the senior unsecured notes maturing
in 2010.
* Buffets, Inc.
-- Ba2 (LGD2, 16%) on the $30 million senior secured
revolver,
-- Ba2 (LGD2, 16%) on the $20 million senior secured letter
of credit facility,
-- Ba2 (LGD2, 16%) on the $30 million senior secured letter
of credit facility,
-- Ba2 (LGD2, 16%) on the $230 million senior secured term
loan B,
-- B3 (LGD5, 72%) on the subordinated notes maturing in
2010.
Moody's has applied its new Probability-of-Default and Loss-Given-
Default rating methodology to Buffets and its subsidiaries.
Moody's current long-term credit ratings are opinions about
expected credit loss which incorporate both the likelihood of
default and the expected loss in the event of default. The LGD
rating methodology disaggregates these two key assessments in
long-term ratings. The LGD rating methodology also enhances the
consistency in Moody's notching practices across industries and
improves the transparency and accuracy of our ratings as our
research has shown that credit losses on bank loans have tended to
be lower than those for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations. Loss-given-default assessments are assigned
to individual rated debt issues -- loans, bonds, and preferred
stock.
Moody's opinion of expected loss on an individual security is
expressed as a percent of principal and accrued interest at the
resolution of the default, with assessments ranging from LGD1
(loss anticipated to be 0% - 9%) to LGD6 (loss anticipated to be
90% - 100%). The assignment of ratings to Buffets' new capital
structure reflects Moody's new methodology for assigning ratings
to individual securities rather than a change in the
characteristics of any debt security in the company's fundamental
credit profile.
Buffets, Inc., headquartered in Eagan, Minnesota, operates and
franchises buffet-style restaurants principally under the "Old
Country Buffet" and "Hometown Buffet" brand names. Ryan's
Restaurant Group, Inc., headquartered in Greer, South Carolina,
operates grill/buffet format restaurants under the brand names
"Ryan's" and "Fire Mountain". The combined entity will be the
second largest family dining restaurant in the industry, operating
672 restaurants in 39 states. Pro forma revenues as of June 30,
2006 were approximately $1.7 billion.
BUILDERS FIRSTSOURCE: Moody's Confirms B1 Corporate Family Rating
-----------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its B1 Corporate Family Rating for Builders
FirstSource, Inc. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$110 Mil. Gtd. Sr.
Sec. Revolving
Credit Facility
due 2010 B1 Ba2 LGD2 23%
Gtd. Sr. Sec.
1st Lien Term
Loan B due 2011 B1 Ba2 LGD2 23%
$15 Mil. Gtd. Sr. Sec.
Letter of Credit
Faclity due 2011 B1 Ba2 LGD2 23%
$275 Mil. Gtd. Sr.
Sec. Floating Rate
Notes due 2012 B3 B2 LGD4 65%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Dallas, Texas, Builders FirstSource, Inc.
(Nasdaq: BLDR) -- http://www.bldr.com/-- is a leading supplier
and manufacturer of structural and related building products for
residential new construction. The company operates in 11 states,
principally in the southern and eastern United States, and has 63
distribution centers and 52 manufacturing facilities, many of
which are located on the same premises as our distribution
facilities. Manufacturing facilities include plants that
manufacture roof and floor trusses, wall panels, stairs, aluminum
and vinyl windows, custom millwork and pre-hung doors. Builders
FirstSource also distributes windows, interior and exterior doors,
dimensional lumber and lumber sheet goods, millwork and other
building products.
CANAL CAPITAL: Accumulated Deficit Widens to $13.6 Mil. at July 31
------------------------------------------------------------------
Canal Capital Corporation filed its third quarter financial
statements for the three months ended July 31, 2006, with the
Securities and Exchange Commission.
Canal Capital Corporation incurred a $220,726 net loss on $791,286
of net revenues for the three months ended July 31, 2006.
As of July 31, 2006, the Company's accumulated deficit widened to
$13.6 million from $13.3 million of deficit in the prior year.
A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1313
Going Concern Doubt
Todman & Co., CPAs, PC, expressed substantial doubt about Canal
Capital Corporation's ability to continue as a going concern after
it audited the Company's financial statements for the fiscal years
ended Oct. 31, 2005 and 2004. The auditing firm pointed to the
Company's recurring losses from operations and substantial pension
plan obligations.
About Canal Capital
Canal Capital Corporation is engaged in two distinct businesses --
stockyard and real estate operations.
Canal operates two central public stockyards located in St.
Joseph, Missouri and Sioux Falls, South Dakota. The Company's
stockyards provide all services and facilities required to operate
an independent market for the sale of livestock, including
veterinary facilities, auction arenas, auctioneers, weigh masters
and scales, feed and bedding, and security personnel.
Canal holds property for development or resale consisting of
approximately 31 acres of undeveloped land located in the Midwest.
The Company constantly evaluates proposals received for the
purchase, leasing or development of this asset. Substantially all
of Canal's real property is pledged as collateral for its debt
obligations.
CATHOLIC CHURCH: Spokane Sells Bishop's Office for $2,050,000
-------------------------------------------------------------
The Catholic Diocese of Spokane auctioned off its Catholic
Pastoral Center, known as the Chancery Building, for $2,050,000 to
real estate developer, Centennial Properties, and a 2.65-acre
property in Spokane Valley to Northwest Renovators, Inc.,
according to KXLY.com.
The Diocese will use the proceeds of the sale to pay sex abuse
claimants.
The Chancery Building, located at 1023 W. Riverside in Spokane, is
the main administration headquarters of the Roman Catholic Church
in Eastern Washington and houses the Bishop's office. The
building is among the assets claimed by the Diocese when it filed
for bankruptcy.
The Diocese employed Keen Realty, LLC, as special real estate
consultants, to assist it with the sale. The Diocese has six
months to vacate the Chancery Building, KXLY.com says.
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 70; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: Spokane Gets Okay for Treatment of Parish Claims
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Washington
approved the stipulation of various parishes, the Immaculate Heart
Retreat Center and the Tort Litigants' Committee.
As reported in the Troubled Company Reporter on Sep 12, 2006, the
parishes and the Immaculate Heart Retreat Center filed 151 proofs
of claim against the Catholic Diocese of Spokane, exclusive of
amended claims.
The Parishes, the Retreat Center, and the Tort Litigants
Committee stipulated regarding the treatment of 151 claims to
avoid the cost of litigation and to facilitate a resolution of the
Objections:
(a) All 151 Parish Claims are general unsecured claims and not
secured or lien claims;
(b) The Parish Claims are categorized into three kinds:
(1) D&L Claims, which are claims representing funds
allegedly deposited by a Parish in the Diocese Deposit
& Loan Fund, which funds the Parishes assert they are
entitled to recover;
(2) $1,268 of the Retreat Center's Claim No. 331 for
$3,501,268, on account of prepetition services
performed by the Retreat Center on behalf of the
Diocese; and
(3) Equitable Lien Theory Claims or all other Parish
claims and the residual portion of the Claim No. 331
irrespective of whether that Claim makes reference to
an equitable lien or any other form of lien;
(c) D&L Claims will remain as general unsecured claims subject
to pending or further objections filed by the Tort
Litigants Committee, Tort Claimants Committee, Future
Claims Representative, the Diocese, or any other party
entitled to file an objection to D&L Claims. The
classification and voting rights of D&L Claims are
reserved by all parties to be addressed in the Disclosure
Statement and Plan confirmation process; and
(d) For purposes of any plan of reorganization on which a
Disclosure Statement has been approved or noted for
approval prior to December 6, 2006, and thereafter
approved within 45 days, the Retreat Center Services
Claims:
* are subordinated for distribution purposes; and
* may be classified separately in any plan of
reorganization and disclosure statement.
The Retreat Center:
* may waive the application of confirmation-related
provisions and rights pursuant to Sections
1129(a)(7)(A)(ii), 1129(b)(2)(B), and 1126(g) of the
Bankruptcy Code; and
* will not be entitled to a vote for any Plan in which a
Disclosure Statement has been approved within the time
periods.
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 70; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
C-BASS: Fitch Rates $13.6 Million Class B-2 Certificates at BB+
---------------------------------------------------------------
Fitch rated C-BASS mortgage loan asset-backed certificates, series
2006-CB7:
-- $698,190,000 class A senior certificates 'AAA'
-- $28,562,000 class M-1 'AA+'
-- $40,803,000 class M-2 'AA'
-- $14,508,000 class M-3 'AA-'
-- $14,054,000 class M-4 'A+'
-- $14,961,000 class M-5 'A'
-- $9,974,000 class M-6 'A-'
-- $9,067,000 class M-7 'BBB+'
-- $8,161,000 class M-8 'BBB'
-- $14,054,000 class B-1 'BBB-'
-- $13,601,000 class B-2 'BB+'
The 'AAA' rating on the senior certificates reflects the 23.00%
initial credit enhancement provided by:
* the 3.15% class M-1;
* 4.50% class M-2;
* 1.60% class M-3;
* 1.55% class M-4;
* 1.65% class M-5;
* 1.10% class M-6;
* 1% class M-7;
* 0.90% class M-8;
* 1.55% privately offered class B-1;
* 1.50% privately offered class B-2;
* 1.45% privately offered;
* non-rated class B-3;
* 1.15% privately offered;
* non-rated class B-4; and
* over-collateralization.
The initial and target OC is 1.90%. All certificates have the
benefit of excess interest. In addition, the ratings also reflect
the quality of the loans, the soundness of the legal and financial
structures, and the capability of Litton Loan Servicing LLP (rated
'RPS1' by Fitch) as servicer.
The collateral pool consists of 4,544 fixed- and adjustable-rate
mortgage loans and totals $906.7 million as of the cut-off date.
The weighted average original loan-to-value ratio is 80.53%.
The average outstanding principal balance is $199,547, the
weighted average coupon is 8.206% and the weighted average
remaining term to maturity is 350 months. The weighted average
credit score is 617. The loans are geographically concentrated in
California (27.23%), Florida (22.36%) and Arizona (7.16%).
The mortgage Loans in the mortgage pool were originated or
acquired by various mortgage loan originators. Approximately
28.84% and 25.61% of the mortgage loans were originated by
Ameriquest Mortgage Company and New Century Mortgage Corporation
respectively. The remaining mortgage loans were originated by
mortgage loan originators that each originated less than 20% of
the entire pool of mortgage loans.
CENTENNIAL COMMS: Aug. 31 Balance Sheet Upside-Down by $1.06 Bil.
-----------------------------------------------------------------
Centennial Communications Corp. reported a loss from continuing
operations of $2.2 million for the fiscal first quarter of 2007,
compared to income from continuing operations of $14.6 million in
the fiscal first quarter of 2006.
At Aug. 31, 2006, the Company's balance sheet showed
$1,433,497,000 in total assets and $2,498,651,000 in total
liabilities resulting in a $1,065,154,000 stockholders' deficit.
The fiscal first quarter of 2007 included $2.1 million of stock-
based compensation expense due to the Company's adoption of SFAS
123R.
Total debt less cash equivalents was $2.05 billion for the three
months ended Aug. 31, 2006 as against total debt less cash
equivalents of $1.48 billion for the three months ended Aug. 31,
2005.
The Company reported fiscal first-quarter consolidated revenue
from continuing operations of $243 million, which included
$120.4 million from U.S. wireless and $122.6 million from
Caribbean operations. Consolidated revenue from continuing
operations grew 2% versus the fiscal first quarter of 2006.
Segment Highlights
U.S. Wireless Operations
* Revenue was $120.4 million, a 12% increase from last year's
first quarter. Retail revenue, total revenue excluding
roaming revenue increased 17% from the year-ago period,
supported by strong feature, data and access revenue from a
10% increase in total retail subscribers. Roaming revenue
decreased 9% from the year-ago quarter as a result of a
decline in the per minute rate for GSM roaming traffic.
* Average revenue per user (ARPU) was $67 during the fiscal
first quarter, a 2% year-over-year increase.
* Adjusted Operating Income was $43.7 million, a 7% year-over-
year increase, representing an AOI margin of 36%.
* U.S. wireless ended the quarter with 654,900 total
subscribers including 51,300 wholesale subscribers, compared
to 592,600 for the prior-year quarter including 43,200
wholesale subscribers and to 648,000 for the previous quarter
ended May 31, 2006 including 51,100 wholesale subscribers.
* Capital expenditures were $5.4 million for the fiscal first
quarter.
Caribbean Wireless Operations
* Revenue was $91.3 million, a decline of 5% from the prior-
year first quarter, driven primarily by lower access and
airtime revenue in Puerto Rico and the Dominican Republic.
* ARPU was $41, an 11% decline from the year-ago period, due to
the continued impact of prepaid subscriber growth in the
Dominican Republic and aggressive marketing of companion rate
plans in Puerto Rico.
* AOI totaled $33.6 million, a 9% year-over-year decrease,
representing an AOI margin of 37%.
* Caribbean wireless ended the quarter with 775,500
subscribers, which compares to 715,000 for the prior-year
quarter and to 739,200 for the previous quarter ended
May 31, 2006.
* Capital expenditures were $7.4 million for the fiscal first
quarter.
Caribbean Broadband Operations
* Revenue was $35.1 million, a 4% year-over-year decrease.
* AOI was $17.2 million, a 3% increase from the year-ago
period, representing an AOI margin of 49%.
* Switched access lines totaled approximately 73,100 at the end
of the fiscal first quarter, an increase of 8,400 lines, or
13% from the prior-year quarter. Dedicated access line
equivalents were 298,400 at the end of the fiscal first
quarter, a 17% year-over-year increase.
* Capital expenditures were $4.1 million for the fiscal first
quarter.
Strtategic Alliance with OneLink
The Company, on Sept. 11, 2006, disclosed a strategic alliance
with OneLink Communications that will accelerate the deployment of
converged services by bringing telephony to OneLink's 138,000
customers. The Company, supported by a state-of-the-art fiber
optic backbone and recently completed soft-switch network, will
provide OneLink with service applications and connectivity to the
public telephone network. OneLink Communications, one of the
leading cable companies in Puerto Rico, will be expanding its
service portfolio by adding broadband telephony to its existing
suite of services.
FCC AWS Auction
The FCCs Advanced Wireless Service auction concluded on Sept. 18,
2006, with the Company as the provisional winning bidder on two 20
MHz licenses covering over 1.3 million Pops in Grand Rapids and
Lansing, Michigan for an aggregate value of $9.1 million.
A full-text copy of the Company's financial statement for the
three months ended Aug. 31, 2006, is available for free at:
http://ResearchArchives.com/t/s?1324
About Centennial Communications
Headquartered in Wall, New Jersey, Centennial Communications
Corporation -- http://www.centennialwireless.com/-- provides
wireless communications with cellular licenses covering smaller
markets in the central United States. Centennial also offers
personal communications services in the Caribbean, as well as
wireline and wireless broadband services. It operates as a
competitive local-exchange carrier in Puerto Rico, offering
traditional and Internet-based phone service. Centennial sold its
Puerto Rican cable operations in 2004. Venture capital firm
Welsh, Carson, Anderson & Stowe (54%) and a unit of the Blackstone
Group (24%) are Centennial's controlling shareholders.
* * *
As reported in the Troubled Company Reporter on Jul. 3, 2006,
Fitch assigned Centennial Communications Corp.'s issuer default
rating at 'B-' and senior unsecured notes rating at 'CCC/RR6'.
The rating outlook is stable.
CENTERSTAGING CORP: Independent Auditor Raises Going Concern Doubt
------------------------------------------------------------------
Stonefield Josephson expressed substantial doubt about
CenterStaging Corp, fka Knight Fuller, Inc.'s ability to continue
as a going concern after auditing the Company's financial
statements for the year ended June 30, 2006. The auditing firm
pointed to the Company's substantial net losses and stockholders'
deficit of $5,811,626 at June 30, 2006.
CenterStaging recorded a net loss of $25.3 million in fiscal year
2006, compared to a net loss of $6.5 million for fiscal year 2005.
The increase in the net loss was due primarily to:
a) $7.2 million of expense associated with the conversion of
$7.2 million of outstanding convertible notes at a
conversion price of 50% of the market price;
b) an increase of $7.3 million of costs with the Company's
rehearsals.com division; and
c) $2.5 million of expense associated with the issuance of
Common Stock to consultants for services.
Revenues increased from $4.8 million for fiscal year 2005 to
$5.7 million for fiscal year 2006. This increase was primarily
attributable to an increase in the number of televised award shows
we supported, resulting in increased revenues from production
services and music equipment rentals. Rental rates for studios
and musical equipment remained relatively constant in fiscal years
2005 and 2006.
At June 30, 2006, the Company's balance sheet showed $7,387,490 in
total assets, $12,682,419 in total liabilities and $516,697 in
interest of consolidated variable interest entity, resulting in a
$5,811,626 Stockholders' Deficit.
A full-text copy of the Company's annual report is available for
free at http://researcharchives.com/t/s?131a
About CenterStaging
Based in Burbank, California, CenterStaging Corp. -- is the parent
company of CenterStaging Musical Productions, Inc. and its
division rehearsals.com. The Company provides rehearsal and
production services for all facets of the entertainment industry.
The 150,000 square foot facility features 11 rehearsal studios,
one sound stage, a high-definition broadcast center, thousands of
musical instruments and backline equipment in Burbank. The
facility houses rehearsals.com which is envisioned as a gateway
into the professional artist's workshop, and provides streaming
video as well as digital audio programming, exclusive
performances, candid artist interviews and intimate lessons from
the masters.
CHATTEM INC: Buys 5 Brands from Johnson & Johnson for $410 Million
------------------------------------------------------------------
Chattem, Inc., entered into an agreement to acquire the U.S.
rights to five leading consumer and over-the-counter brands from
Johnson & Johnson and the consumer healthcare business of Pfizer
Inc. for $410 million in cash.
The Company disclosed that the transaction is subject to review
and approval by the Federal Trade Commission and certain closing
conditions, including the acquisition by Johnson & Johnson of the
consumer healthcare business of Pfizer Inc., which is expected to
close by the end of 2006.
The brands being acquired are:
-- ACT, an anti-cavity mouthwash/mouth rinse;
-- UNISOM, an OTC sleep aid;
-- CORTIZONE, a hydrocortisone anti-itch product;
-- KAOPECTATE, an anti-diarrhea product; and
-- BALMEX, a diaper rash product.
The brands are being divested in connection with Johnson &
Johnson's acquisition of Pfizer Consumer Healthcare and certain
regulatory requirements relative to the acquisition.
"This acquisition will provide our Company enduring brands that
mirror our corporate strategy and enhance the level of the
Company's long-term growth potential," Zan Guerry, chairman and
chief executive officer, said.
Mr. Guerry continued, "Each of these brands has a leadership
position within its category, a loyal consumer base and a brand
name with staying power. These brands are responsive to
advertising and can be extended with new products, which plays
perfectly into our proven track record of growing brands through
innovation and advertising,"
The Company also disclosed that the addition of the leading brands
expands its diverse portfolio of high quality brands into several
new niche categories and represents an excellent strategic fit
with the its existing brands. The acquisition will be accretive
to the Company's earnings per share in fiscal 2007 and provides
excellent long-term growth opportunities for both sales and
earnings.
The Company further disclosed that Bank of America has provided a
commitment letter for a $425 million term loan facility to fund
the transaction. Merrill Lynch & Co. is acting as a financial
advisor to the Company with respect to the transaction.
Based in Chattanooga, Tennessee, Chattem Inc. (NASDAQ: CHTT)
-- http://www.chattem.com/-- manufactures and markets a variety
of branded consumer products, including over-the-counter
healthcare products and toiletries and skin care products. The
Company's products include Gold Bond medicated powder, Icy Hot
topical analgesic, Dexatrim appetite suppressant, and Bullfrog
sunblock.
CHATTEM INC: Moody's Reviews Low-B Ratings and May Downgrade
------------------------------------------------------------
Moody's Investors Service placed Chattem Inc's corporate family
rating and senior subordinated ratings of Ba3 and B1,
respectively, under review for possible downgrade prompted by the
company's announcement today that it had entered into an agreement
to acquire the U.S. rights to five leading consumer and over-the-
counter brands from Johnson & Johnson and the consumer healthcare
business of Pfizer Inc. for $410 million in cash. The review for
downgrade reflects the potential for significantly increased
leverage and weakened debt protection measures as a result of this
likely all-debt financed acquisition.
Moody's review will focus on
-- the strategic value of the transaction to Chattem's
existing portfolio of OTC healthcare and consumer products;
-- the potential for integration challenges the company may
face given the added size and complexity the acquisition
creates for the company;
-- the prospect for incremental marketing and promotional
expenditures for the acquired brands; and,
-- the capital structure, financial flexibility and
prospective debt protection measures should the transaction
ultimately close.
These Ratings have been placed under review for possible
downgrade:
-- Corporate family rating of Ba3,
-- Probability of default rating of Ba3, and
-- $108 million senior subordinated notes, B1, (LGD5, 76%)
Based in Chattanooga, Tennessee, Chattem Inc., is a leading
marketer and manufacturer of a broad portfolio of branded OTC
healthcare products, toiletries and dietary supplements. Total
revenues for last twelve months ended May 2006 were approximately
$292 million.
CHEMTURA CORP: Settles Federal Rubber Chemicals Suit for $51 Mil.
----------------------------------------------------------------
Chemtura Corp. agreed to pay $51 million to resolve federal
class actions involving rubber chemicals. This agreement,
combined with settlements with other entities, means that
Chemtura has now resolved over 90% of its exposure for
U.S. rubber chemicals claims.
The Class Action Reporter reported yesterday that the $51 million
settlement, which will be paid in the fourth quarter, is subject
to court approval. In anticipation of this settlement,
$12.2 million was added to already existing rubber chemicals
reserves in the third quarter.
"This represents another important step in Chemtura's resolution
of legacy issues so that we may continue to focus on the
future," said Robert Wood, chairman and chief executive officer.
Chemtura has previously pleaded guilty in a federal case and was
fined by European regulators for its role in artificially
boosting prices of chemicals to make rubber between 1995 and
2001.
In 2005, Chemtura Corp. disclosed that the European Commission
has imposed a fine of $16 million on the company in connection
with the EC's rubber chemicals investigation.
About Chemtura Corporation
Headquartered in Middlebury, Connecticut, Chemtura Corporation
(NYSE: CEM) -- http://www.chemtura.com/-- is a global
manufacturer and marketer of specialty chemicals, crop protection
and pool, spa and home care products. The Company has
approximately 6,400 employees around the world and sells its
products in more than 100 countries.
* * *
As reported in the Troubled Company Reporter on April 21, 2006,
Moody's Investors Service assigned a Ba1 rating to Chemtura
Corporation's $400 million of senior notes due 2016 and affirmed
the Ba1 ratings for its other debt and the corporate family
rating.
As reported in the Troubled Company Reporter on April 21, 2006,
Standard & Poor's Ratings Services assigned its 'BB+' senior
unsecured debt rating to Chemtura Corp.'s $400 million notes due
2016. Standard & Poor's affirmed Chemtura's 'BB+' long-term
corporate credit rating. The outlook remains positive.
CHIQUITA BRANDS: Inks Waiver Agreement with Lenders
---------------------------------------------------
Chiquita Brands International, Inc., and Chiquita Brands LLC, its
main operating subsidiary, entered into Waiver Letter No. 1 with
the lenders under the credit agreement dated as of June 28, 2005,
on Oct. 5, 2006.
In accordance with the terms and conditions under the waiver
letter, compliance with certain financial covenant provisions in
the Credit Agreement has been waived through Dec. 15, 2006.
Chiquita sought to obtain a waiver from its lenders to provide
additional flexibility in light of the current challenging market
environment facing the Company. The Company will evaluate and
seek a more permanent waiver or amendment during the term of the
temporary waiver.
A full-text copy of Waiver Letter No. 1 to the Credit Agreement,
among Chiquita and certain financial institutions as lenders, and
Wachovia Bank, National Association, as administrative agent, is
available for free at http://researcharchives.com/t/s?1323
About Chiquita
Cincinnati, Ohio-based Chiquita Brands International, Inc.
(NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes
fresh food products including bananas and nutritious blends of
green salads. The company markets its products under the
Chiquita(R) and Fresh Express(R) premium brands and other related
trademarks. Chiquita employs approximately 25,000 people
operating in more than 70 countries worldwide.
* * *
As reported in the Troubled Company Reporter on Oct. 3, 2006,
Moody's Investors Service affirmed all ratings for Chiquita Brands
L.L.C. (senior secured at Ba3), as well as for its parent Chiquita
Brands International, Inc. (corporate family rating at B2), but
changed the outlook to negative from stable. This action followed
the company's announcement that its operating performance
continues to be negatively impacted by lower pricing in key
European and trading markets, as well as excess fruit supply.
CHIQUITA BRANDS: Initiates Organizational Changes
-------------------------------------------------
Chiquita Brands International, Inc., disclosed a number of
organizational changes designed to foster further innovation and
growth in its key product segments, bananas and value-added
salads, as well as leverage cold-chain management as a core global
capability.
"The changes announced [Wednes]day are part of our objective to
build a high-performance organization, and are designed to help us
take advantage of market growth opportunities," said Fernando
Aguirre, chairman and chief executive officer. "First, having two
proven senior-level executives focusing on our key product
segments across all geographies will help us apply best-practices
throughout the organization, develop a sustainable pipeline of
innovative products for each segment, and develop a growth
platform for our key products on a global basis. Second, as our
supply chain becomes more complex, it is critical that we focus on
creating efficiency and ensuring that cold-chain management
remains a core capability. We believe the changes announced will
further strengthen our business in these two critical areas and
position us to achieve our goals."
Focus on Global Product Growth
The company has named Jeff Filliater and Scott Komar to newly
created global product leader positions. Filliater becomes vice
president, global strategies for bananas, reporting to Bob
Kistinger, president and chief operating officer of Chiquita
Fresh, and Komar becomes vice president, global strategies for
salads, reporting to Tanios Viviani, president of Fresh Express.
Filliater, who previously served as senior vice president of
Chiquita Fresh North America, is responsible for developing
Chiquita's banana business worldwide, including establishing the
growth platform and innovation pipeline for higher-margin, value-
added banana products and applying best practices across
geographies. As the global product leader for the salads, Komar,
who previously served as vice president of operations at Fresh
Express, is responsible for the company's growth strategy in the
value-added salads category, including developing a business model
by geography to extend the company's salad business to new
markets.
Mr. Aguirre commented, "We believe providing global product
support will enable our organization to better capitalize on
growth opportunities and advance our global leadership position in
these two key categories. We are confident that Jeff and Scott's
experience and leadership will enable them to deliver tangible
benefits to our organization in their new roles."
As Mr. Filliater moves into his new role, Richard M. Continelli, a
veteran with nearly 25 years of experience in the consumer
packaged goods arena, has been hired as president of Chiquita
Fresh North America, reporting to Kistinger. In this role, Mr.
Continelli will be responsible for profitability and all
operations of the Chiquita Fresh business in the North American
market.
"Rick's experience in senior sales and marketing roles for several
leading consumer packaged goods companies fits nicely with our
objective of becoming a consumer-driven, innovative and high-
performance organization," said Mr. Aguirre. "His expertise in
customer, channel and category management and his outstanding
leadership qualities will be assets in helping expand our North
American business through new products, channels and customer
relationship management. I am confident that Rick will continue
the momentum that Jeff and the North American team have generated
to help Chiquita Fresh North America reach its goals."
For the last seven years, Mr. Continelli worked for Mars, Inc.,
most recently as vice president of sales for the Masterfoods USA -
Snackfood subsidiary in New Jersey. While at Mars, Mr. Continelli
was responsible for sales, share and profit targets in all
channels. He launched a new collaborative planning process that
links top customers to Mars' innovation and activity-management
process. In addition, he implemented a customer segmentation
process to provide differentiated services and created a new
customization framework that resulted in increased sales and
profitability.
Mr. Continelli's experience also includes two years as vice
president, field sales for Schering-Plough Healthcare Products and
nine years with RJR/Nabisco where he held positions of increasing
responsibility ranging from division sales manager to vice
president of sales for the Central United States. His
responsibilities included the national SuperValu, Fleming and
Walgreen businesses. At Nabisco, he had extensive experience in
marketing new products, national/regional trade strategies and
category management programs. He began his career with Nestle
Frozen and Refrigerated Food Co. as a retail sales representative,
and advanced to Chicago district sales manager. Mr. Continelli
graduated cum laude from Boston University with a bachelor of arts
degree.
Leveraging Cold-Chain Management
As part of the company's strategic emphasis on excelling in cold-
chain management, Waheed Zaman, senior vice president, global
supply chain organization and procurement, will focus full time on
leading the company's global supply chain. Previously, Mr. Zaman
had served as CIO in addition to his supply chain
responsibilities.
Mr. Zaman's initial priorities include achieving in-market
transportation and logistics efficiencies, creating a
comprehensive network capacity plan and supporting co-
manufacturing initiatives, focusing first on combining some supply
chain activities that are conducted separately today in the North
American market, later to expand to other geographies.
As a result of Mr. Zaman's focus on the global supply chain,
Manjit Singh, who joined the company in April as vice president,
corporate information technology, has been promoted to chief
information officer. In his new role, Mr. Singh will serve on the
company's management committee, reporting to Aguirre, and be
responsible for all facets of Chiquita's global commercial and
innovations systems, infrastructure and applications services,
master planning and architecture, web applications and information
delivery.
"Having both world-class information technology and superior cold-
chain management is critical to our success. As such, we are
pleased to have two proven professionals who will be focused on
leading us forward in each of these areas," Mr. Aguirre said.
"Under Manjit's leadership, IT will continue to play a crucial
role in facilitating our innovation, growth and cost-saving
initiatives. Further, we are pleased to have Waheed's full focus
on driving supply chain efficiency and ensuring cold-chain
management remains a core competency."
Mr. Singh came to Chiquita from Gillette in Singapore where he
served as director, Asia Pacific business systems and regional
chief information officer for four years. He combined three
independent IT organizations into a single unit responsible for
all Asia Pacific IT operations. In addition, he developed a
regional project management office and drove the creation of a
project development and approval process tailored to Asia Pacific
needs and which incorporated Six Sigma concepts while also leading
the regional SAP, JDE, and Fourth Shift enterprise resource
planning teams.
Before joining Gillette, Mr. Singh worked in Cincinnati as chief
information officer of a company whose operations were acquired by
Broadwing, an organization that provided fixed line, wireless,
Internet, e-commerce and hosting services across the United
States. He joined Broadwing subsidiary ZoomTown, serving as
director of strategic alliances, where his responsibilities
included directing a venture capital investment fund and handling
mergers and acquisitions.
Prior to that, Mr. Singh worked for Procter & Gamble in
Cincinnati, where he served in positions ranging from systems
analyst to section manager. Among his accomplishments was the
launch of the first official P&G corporate worldwide web site and
set up of that company's initial Internet e-commerce and marketing
efforts. He earned a bachelor of science in mathematics and
computer science at the State University of New York at Binghamton
and a master of science in computer science from Indiana
University.
About Chiquita
Cincinnati, Ohio-based Chiquita Brands International, Inc.
(NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes
fresh food products including bananas and nutritious blends of
green salads. The company markets its products under the
Chiquita(R) and Fresh Express(R) premium brands and other related
trademarks. Chiquita employs approximately 25,000 people
operating in more than 70 countries worldwide.
* * *
As reported in the Troubled Company Reporter on Oct. 3, 2006,
Moody's Investors Service affirmed all ratings for Chiquita Brands
L.L.C. (senior secured at Ba3), as well as for its parent Chiquita
Brands International, Inc. (corporate family rating at B2), but
changed the outlook to negative from stable. This action followed
the company's announcement that its operating performance
continues to be negatively impacted by lower pricing in key
European and trading markets, as well as excess fruit supply.
COLLINS & AIKMAN: District Court Dismisses GECC's Appeal
--------------------------------------------------------
Judge Gerald E. Rosen of the U.S. District Court for the Eastern
District of Michigan has dismissed General Electric Capital
Corporation's appeal from the order issued by the U.S. Bankruptcy
Court for the Eastern District of Michigan denying its request to
compel payments under a master lease agreements with Collins &
Aikman Corporation and its debtor-affiliates.
Prior to filing for bankruptcy, the Debtors entered into three
"Master Lease Agreements" with GECC, pursuant to which GECC leased
certain equipment to the Debtors. A few months after the Debtors
filed for bankruptcy, GECC filed an initial request to compel the
Debtors to make the rent and tax payments that were due under the
Master Lease Agreements. The initial request was resolved through
a stipulated order pursuant to which the Debtors were directed to
comply with their obligations under the three leases "unless and
until the Court orders otherwise."
In early 2006, however, the Debtors ceased making payments under
the Master Lease Agreements. The Debtors said they intended to
seek to recharacterize the leases as secured financing
arrangements -- an effort which, if successful, would avoid the
statutory requirement of timely performance of the Debtors'
obligations under unexpired leases of personal property. In
response, GECC filed a renewed request to compel the Debtors to
make the payments.
The Debtors, for their part, commenced an adversary proceeding on
April 19, 2006, seeking a declaration that the Master Lease
Agreements were properly characterized as secured financing
arrangements. The Debtors also filed objections in opposition to
GECC's request to compel payments under the leases.
The Bankruptcy Court addressed GECC's request at two hearings.
At the first, held on May 11, 2006, the Bankruptcy Court announced
the procedure it would follow in deciding GECC's request. Citing
the pending adversary proceeding in which the parties would fully
litigate the question whether the Master Lease Agreements should
be recharacterized as secured financing transactions, the
Bankruptcy Court scheduled a expedited hearing at which each side
would make a more limited "offer of proof" and "present their
case" as to the recharacterization issue. At the conclusion of
this hearing, the Bankruptcy Court would then "decide which side
is more likely to prevail" on the recharacterization issue, with
this decision determining the immediate outcome of GECC's request
to compel payments, but "having [no] impact whatsoever" and "not
being binding" upon the Bankruptcy Court's ultimate disposition of
this issue at the conclusion of the adversary proceeding.
Both sides objected to the procedure. GECC pointed out that "the
clock is ticking and . . . a lot of [unpaid] rent . . . is
accruing," and expressed concern that it might be unable to
recover these full amounts if the Debtors' bankruptcy cases
subsequently were converted to Chapter 7 or the "secured creditors
were to foreclose tomorrow." GECC further argued that "there are
a lot of facts and a lot of third-party witnesses that are going
to weigh in at the trial on . . . the underlying issue of whether
these [Master Lease Agreements] are true leases," so that an
expedited hearing on a limited record might not provide a full
opportunity for GECC to demonstrate its entitlement to timely
payment under the leases.
The Debtors, on the other hand, suggested that an expedited
hearing on the recharacterization issue was unnecessary, where
GECC could "file a motion for adequate protection" to safeguard
its interests while the adversary proceeding remained pending.
Despite the objections, the expedited hearing went forward on
June 1, 2006. After hearing 30 minutes of argument from each
side, the Bankruptcy Court concluded that it was "more likely than
not" that the Master Lease Agreements would be recharacterized as
secured financing transactions. The Bankruptcy Court denied
GECC's request to compel payments.
GECC has appealed the Bankruptcy Court's ruling to the United
States District Court for the Eastern District of Michigan,
Southern Division.
As a threshold matter, however, the Debtors argue that the
District Court should not entertain GECC's appeal because:
(a) the Bankruptcy Court's June 9, 2006 order is not "final"
within the meaning of Section 158(a)(1) of the Judiciary
and Judicial Procedures Code, so that GECC is not entitled
to take an appeal; and
(b) GECC purportedly has failed to establish a basis for the
District Court to exercise its discretion to hear an
interlocutory appeal.
Under these circumstances, the District Court shares the Debtors'
view that the Bankruptcy Court's ruling is not "final." GECC's
entitlement to payments under Section 365(d)(5) of the Bankruptcy
Code, after all, turns on the determination whether the Master
Lease Agreements are true "leases" within the meaning of the
statute. According to District Court Judge Gerald E. Rosen, the
Bankruptcy Court did not purport to definitively settle this
question but merely expressed its tentative view. Judge Rosen
states that the Bankruptcy Court merely decided which party
should bear the risk of non- or over-payment in the interim
period before the applicability of Section 365(d)(5) is finally
determined at the conclusion of the adversary proceeding.
GECC has also failed to persuade the District Court that an
interlocutory appeal would materially advance the ultimate
termination of the litigation between the parties. The District
Court is unwilling to entertain an interlocutory appeal for the
purpose of exercising control over the Bankruptcy Court's docket
and insisting that one issue or one participant in the Debtors'
complex and lengthy bankruptcy proceedings go to the head of the
line.
Judge Rosen finds no basis to believe that a denial of leave to
appeal would result in wasted expense and litigation. Since
GECC's appeal provides no legitimate opportunity to address the
central point of contention between the parties -- the proper
characterization of the Master Lease Agreements -- any ruling
that the District Court might issue could not possibly bring the
overall dispute to a speedier or more efficient conclusion, Judge
Rosen notes.
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. 42; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
COLLINS & AIKMAN: Has Until Dec. 15 to Decide on Becker Leases
--------------------------------------------------------------
The Honorable Steven W. Rhodes of the U.S. Bankruptcy Court for
the Eastern District of Michigan rules that the time period within
which Collins & Aikman Corporation and its debtor-affiliates must
assume or reject these unexpired leases with Becker Properties,
LLC, and Anchor Court, LLC, is extended through Dec. 15, 2006:
(a) 6600 East Fifteen Mile Road, Sterling Heights, Michigan;
(b) 1601 Clark Road, Havre de Grace, Maryland; and
(c) 47785 West Anchor Court, Plymouth, Michigan.
As reported in the Troubled Company Reporter on Sept. 20, 2006,
the Debtors intend to file a list of all the executory contracts
and unexpired leases they want to assume or reject 10 days before
the confirmation hearing on their Plan of Reorganization. Mr.
Schrock asserts that until the Debtors have completed the
extensive review of their executory contracts and unexpired
leases, they will be unable to determine whether the Becker Leases
are necessary to continued business operations.
Becker's Objection
Becker and Anchor Court argued that an open-ended extension of the
Debtors' lease decision deadline is contrary to the timetable
Congress provided in the Bankruptcy Code. The Debtors had asked
the Court for an open-ended deadline for them to assume, assume
and assign or reject, their unexpired leases.
Robert J. Diehl, Jr., Esq., at Bodman LLP, in Detroit, Michigan,
said that the Debtors have not justified the grant of an open-
ended extension or the prejudice that will be suffered by Becker
if the extension is granted.
"The date of plan confirmation is not determined and could be
many months or even years away or may never occur," Mr. Diehl
asserted.
Although the Debtors explain that ongoing negotiations regarding
plan confirmation might impact their decision to assume or reject
the Becker leases, Mr. Diehl contended that this justification is
not cause for an extension.
According to Mr. Diehl, the Debtors' request removes the Court's
oversight of the reorganization process as established by the
Bankruptcy Code and shifts the burden to Becker to request a
deadline by which leases must be assumed or rejected. "The
Debtors should not be allowed to circumvent the procedures set
forth in Section 365(d)(4) of the Bankruptcy Code simply because
[their] case involves many nonresidential real property leases,"
Mr. Diehl noted.
If the extension is granted, Becker will have no way to make an
informed business decision about a proposed plan of reorganization
before the final treatment of its leases is known,
Mr. Diehl said.
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. 42; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
COMPLETE RETREATS: Seeks Court Okay on Ableco Commitment Letter
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut's final
order on Complete Retreats LLC and its debtor-affiliates' existing
DIP Financing Agreement with The Patriot Group, LLC, and LPP
Mortgage, Ltd., requires the Debtors to obtain replacement DIP
financing sufficient to "take out" Patriot and LPP Mortgage
by Oct. 31, 2006. Otherwise, Patriot and LPP Mortgage will be
authorized, under certain conditions, to foreclose on the Debtors'
assets.
The Debtors have solicited interest in providing a replacement
credit facility from numerous potential postpetition lenders.
The Debtors received draft commitment letters from two potential
lenders, one from Ableco Finance LLC.
The Debtors believe that the terms of the credit facility proposed
by Ableco are more favorable than the proposed credit facility of
the other potential lender.
Subsequently, the Debtors and Ableco executed a DIP Financing
Commitment Letter on Oct. 4, 2006. The Commitment Letter
contemplates that the Debtors and Ableco will enter into a credit
facility of up to $80,000,000, comprised of a term loan of up to
$50,000,000 and a revolver of up to $30,000,000.
Pursuant to Section 363 of the Bankruptcy Code, the Debtors ask
the Court to approve the Ableco Commitment Letter.
The Ableco Commitment Letter requires the Debtors to pay an
$800,000 non-refundable commitment fee to Ableco. It also
requires that the Debtors pay Ableco's reasonable fees and
expenses, including its reasonable attorneys' and due diligence
fees and expenses incurred in connection with the negotiation,
preparation, execution and delivery of the Commitment Letter, the
related term sheet, and any related definitive documentation. To
cover those fees and expenses, the Debtors would pay Ableco a
$100,000 deposit upon approval of the Commitment Letter.
Moreover, the Ableco Committee Letter requires the Debtors to
indemnify Ableco and certain related parties for any losses
arising out of the Commitment Letter or the contemplated
financing, except to the extent resulting solely from the
indemnified party's gross negligence or willful misconduct.
Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut,
points out that the Commitment Letter will expire by its terms if
Ableco will not receive the commitment fee and cost advance by
Oct. 11, 2006.
The Court will convene a hearing on Oct. 10, 2006, to consider
the Debtors' request.
A full-text copy of the Ableco Commitment Letter is available for
free at http://researcharchives.com/t/s?1326
Terms of Ableco's Proposed DIP Financing
The proceeds of the Loans under the Ableco Facility will be used
to:
(a) refinance the Debtors' existing secured credit facilities
in the aggregate principal amount of up to $74,000,000;
(b) fund working capital and general corporate expenses in the
ordinary course of business of the Debtors, all in
accordance with the Budget; and
(c) pay fees and expenses related to the Financing Facility,
in all cases subject to the Courts' approval.
The Debtors' obligations under the Ableco Facility will be
secured by first priority liens on, and security interests in,
all assets of the Debtors. The DIP Liens will be subject to a
$1,250,000 carve-out for professional fees, and fees payable to
the U.S. Trustee and the Clerk of Court.
At the Debtors' option, the Loans will bear interest at a rate
per annum equal to either:
(i) the rate of interest publicly announced from time to time
by JPMorgan Chase Bank in New York -- provided that at no
time the Reference Rate be less than 8.25 -- plus 4.75%;
or
(ii) LIBOR plus 7.75%.
All Loans are to be repaid in full at the earliest of:
(i) the date which is 18 months after the date of the Final
DIP Order;
(ii) the date of substantial consummation of a plan of
reorganization in the Debtors' cases, which has been
confirmed by the Court; or
(iii) the date on which the Loan will become due and payable in
accordance with the terms of the Loan Documents.
An Event of Default will occur if, among others:
-- any of the Debtors' cases will be dismissed or converted to
a Chapter 7 case;
-- a Chapter 11 trustee or examiner with enlarged powers will
be granted;
-- any other superpriority administrative expense claim will
be granted; or
-- the Court will enter an order granting relief of the
automatic stay to the holder of any security interest in
any asset of the Debtors having a book value equal to or
exceeding $250,000 in the aggregate.
No later than Jan. 1, 2007, the Debtors will be required to:
(i) have a plan of reorganization filed which, among other
items, provides for the repayment in full of the Financing
Facility; or
(ii) retain an auctioneer acceptable to the Lenders and
commence a process of marketing for sale of the Debtors'
real estate assets.
If a plan of reorganization is filed on or before January 1,
2007, the Debtors will be required to have that plan confirmed no
later than March 1, 2007.
The Closing Date is the date on which all definitive loan
documentation satisfactory to the Lenders is executed by the
Debtors and the Lenders, which date will not be later than
Oct. 31, 2006, on or after the date the Court has entered the
Final DIP Order.
The Ableco Facility also provides for an $800,000 non-refundable
Closing Fee.
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. 10; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
COMPLETE RETREATS: Panel Can File DIP Loan Objection Until Oct. 26
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut gave the
Official Committee of Unsecured Creditors in Complete Retreats LLC
and its debtor-affiliates' chapter 11 cases until Oct. 26, 2006,
to file its objections to the Debtors' DIP financing pact with The
Patriot Group, LLC, and LPP Mortgage, Ltd.
As reported in the Troubled Company Reporter on Sept. 25, 2006,
the Committee said it needs the extension to enable it to carry
out a thorough investigation of matters relevant to the Debtors'
prepetition financing.
The Honorable Alan H.W. Shiff previously gave the Committee
and any party-in-interest with requisite standing until Oct. 3,
2006, to object to the validity of the Prepetition Obligations or
assert any Lender Claims.
Kate K. Simon, Esq., at Bingham McCutchen LLP, in Hartford,
Connecticut, told the Court that among other tasks, the Committee
needs to:
-- gather information and analyze numerous real estate
transactions, many of which involve overseas properties and
documentation in foreign languages; and
-- conduct examinations of individuals with knowledge of the
estate transactions.
The Patriot and LPP Mortgage, the lenders for the $10,000,000 DIP
Financing Facility, consented to the Committee's request.
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. 10; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
CONSTELLATION BRANDS: Earns $68.4 Mil. for Quarter Ended Aug. 31
----------------------------------------------------------------
Constellation Brands, Inc., reported net sales of $1.4 billion for
the quarter ended Aug. 31, 2006, up 19% over prior year.
The Increase in net sales was primarily due to the June 5, 2006,
acquisition of Vincor International Inc., and from growth in the
base business. Branded business net sales grew 20%. The increase
was due to the addition of Vincor and 7% growth for branded
business organic net sales on a constant currency basis.
Net Sales
Growth of branded wine for North America, primarily in the U.S.,
drove an overall 6% increase in branded wine organic net sales on
a constant currency basis. The Vincor acquisition complemented
the growth to drive a 28% increase for branded wine on a constant
currency basis.
Net sales of branded wine for North America increased 34%.
Branded wine net sales for Australia/New Zealand increased 15%.
Net sales of branded wine for Europe increased 21%.
Organic net sales for wholesale and other increased 6% on a
constant currency basis, primarily from growth in the Company's
U.K. wholesale business.
The 9% increase in imported beers net sales was primarily due to
volume growth for the Company's portfolio and reflected strong
consumer demand throughout the summer season.
Total spirits net sales increased 8% for the second quarter.
Investments behind the company's premium spirits brands
contributed to an 8% increase in branded spirits, while contract
production services increased 10%.
Net Income
For the three months ended Aug. 31, 2006 the Company reported net
income of $68.4 million, compared to net income of $82.4 million
three months ended Aug. 31, 2005.
Net Income for the six months ended Aug. 31, 2006 was
$153.9 million, versus net income of $158.1 million for the six
months ended Aug. 31, 2005.
The Company disclosed that for the second quarter 2007, operating
income increased primarily due to the acquisition of Vincor, as
well as growth in the base business. The Company incurred
$4.1 million of stock-based compensation expense for the second
quarter related to the its March 1, 2006, adoption of Statement of
Financial Accounting Standards No. 123(R), which reduced operating
income growth by approximately 2 percentage points. For the
quarter, the Company also recorded approximately $1.5 million of
expenses, primarily corporate transaction-related costs associated
with the formation of the Crown Imports LLC joint venture.
Wines segment operating margin increased 100 basis points, due
primarily to a strong increase in operating margin in the U.S.
base business. Beers and spirits segment operating margin
declined 90 basis points for the quarter, primarily due to
increased material costs for spirits, higher spending behind
premium spirits and stock compensation expense recognition.
The company recorded $21.7 million of restructuring and related
charges for strategic business realignment activities for the
second quarter 2007, compared to $2.2 million for the same period
last year. On June 5, 2006, the Company entered into a new
$3.5 billion credit agreement, proceeds of which were primarily
used to fund the acquisition of Vincor, pay certain Vincor
indebtedness, and repay the outstanding balance on the Company's
prior credit agreement. The company recorded $11.8 million of
expense for the write-off of bank fees related to the repayment of
the prior agreement. Interest expense increased 55% to
$72.5 million for the second quarter 2007, primarily due to the
financing of the Vincor acquisition and higher average interest
rates.
Stock Repurchases
The Company also disclosed that during the second quarter 2007 it
purchased 3.24 million shares of its class A common stock at an
aggregate cost of $82 million, or at an average cost of $25.28 per
share under its $100 million share repurchase program.
Outlook
Due to continued intense competition in the U.K. market, the
Company has revised its fiscal 2007 comparable basis diluted EPS
outlook to $1.72 to $1.76 from its previous estimate of $1.72 to
$1.80.
Based in Fairport, New York, Constellation Brands, Inc. (NYSE:STZ,
ASX:CBR) -- http://www.cbrands.com/-- produces and markets
beverage alcohol brands with a broad portfolio across the wine,
spirits and imported beer categories. Well-known brands in
Constellation's portfolio include: Almaden, Arbor Mist, Vendange,
Woodbridge by Robert Mondavi, Hardys, Nobilo, Kim Crawford, Alice
White, Ruffino, Kumala, Robert Mondavi Private Selection, Rex
Goliath, Toasted Head, Blackstone, Ravenswood, Estancia,
Franciscan Oakville Estate, Inniskillin, Jackson-Triggs, Simi,
Robert Mondavi Winery, Stowells, Blackthorn, Black Velvet, Mr.
Boston, Fleischmann's, Paul Masson Grande Amber Brandy, Chi-Chi's,
99 Schnapps, Ridgemont Reserve 1792, Effen Vodka, Corona Extra,
Corona Light, Pacifico, Modelo Especial, Negra Modelo, St. Pauli
Girl, Tsingtao.
* * *
As reported in the Troubled Company Reporter on Aug. 14, 2006,
Moody's Investors Service assigned a (P)Ba2 rating to
Constellation Brands, Inc.'s new shelf and concurrently, a Ba2
rating to Constellation's new $500 million senior unsecured note,
due 2016. Constellation's existing ratings are not affected by
these actions, and have been affirmed. The ratings outlook
remains negative.
As reported in the Troubled Company Reporter on Sept. 26, 2006
Moody's Investors Service's, in connection with its implementation
of its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. beverage company sector, affirmed its Ba2
Corporate Family Rating for Constellation Brands Inc., and
downgraded its Ba3 probability-of-default rating to B1. The
rating agency also assigned its LGD6 loss-given-default ratings on
the Company's $250 million 8.125% Senior Subordinated Notes due
Jan. 15, 2012, suggesting noteholders will experience a 95% loss
in the event of a default.
CONTROLLED POWER: Committee Can't Recover Payments to Caroman
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Controlled Power
Corporation of Ohio sued Caroman Finance Account, Inc. (Bankr.
N.D. Ohio Adv. Pro. No. 05-6176), to recover approximately
$450,000 paid by the Debtor within the one-year period prior to
the company's chapter 11 filing. The Committee asserted that
Caroman fell within the definition of an insider under the
Bankruptcy Code and the one-year reach-back period should apply.
In a decision published at 2006 WL 2590434, the Honorable Russ
Kendig disagreed with the Committee's assessment of Caroman's
relationship to the Debtor. Caroman and Controlled Power have
common officers and directors and shareholders. But, Judge Kendig
finds, those ties are are insufficient to qualify Caroman as a
statutory "insider" for preference-avoidance purposes, as an
entity holder in control of the debtor. While the fact that all
of Caroman's directors had an interest in the debtor may have led
Caroman to offer low interest loans to the debtor with no
documentation, no evidence was presented of any similar control
exercised by Caroman over the debtor.
"Viewing the facts in the light most favorable to [the Committee],
there is no evidence that Caroman had, or exerted, a controlling
influence on Debtor or could compel or force repayment of its
loans," Judge Kendig finds. "The record is devoid of any facts
which indicate Caroman exercised or exerted control or influence
which compelled Debtor to repay the loans. The lack of evidence
on this point is fatal, and the court concludes that [Caroman] was
not an insider."
Accordingly, Judge Kendig dismissed the Committee's Complaint.
Controlled Power Corp. of Ohio filed for chapter 11 protection in
2005 (Bankr. N.D. Ohio Case No. 05-60383).
CONVERIUM AG: Lenders Agree to Reduce Collateral Requirement
------------------------------------------------------------
Converium AG has reached an agreement with its counter-party banks
to reduce the level of collateral requirement on its $1.6 billion
letter of credit facility. As a result of the reduced level of
collateral Converium will free up around $110 million of assets on
its balance sheet.
As reported in the Troubled Company Reporter on Aug. 22, 2006,
Converium disclosed the conclusion of an agreement for an
uncollateralized $250 million letter of credit facility with a
leading European banking group.
"The reduced collateral requirement is a considerable success for
Converium. The agreement will provide us with additional degrees
of freedom in managing our assets," Paolo De Martin, Chief
Financial Officer, commented.
About Converium
Headquartered in Zug, Switzerland, Converium Holding AG --
http://www.converium.com/-- provides treaty and individual
coverage for risks including accident and health, credit and
surety, e-commerce, third party and professional liability,
life, and special casualty. Converium employs about 600 people
in 20 offices around the globe and is organized into four
business segments: Standard Property & Casualty Reinsurance,
Specialty Lines and Life & Health Reinsurance, which are based
principally on ongoing global lines of business, as well as the
Run-Off segment, which primarily comprises the business from
Converium Reinsurance (North America) Inc., excluding the U.S.
originated aviation business portfolio.
* * *
Following its publication of its 2005 year-end results, restated
financial information for the periods 1998 to 2004, and for each
quarter from March 31, 2003, to June 2005, Fitch Ratings
affirmed Converium AG's Insurer Financial Strength BBB- rating
and removed it from Rating Watch Negative on which it had been
placed since Nov. 4, 2005. Fitch also affirmed Converium Holding
AG IDR at BB and Converium Finance S.A.'s $200 million
subordinated debt due 2032 at BB+. Fitch also removed these
ratings from Rating Watch Negative.
COPELANDS' ENT: Has Until Oct. 13 to File Schedules & Statements
----------------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware gave Copelands' Enterprises, Inc., until Oct.
13, 2006, to file its schedules of assets and liabilities and
statements of financial affairs.
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.
COVENTRY HEALTH: Moody's Affirms Ba1 Rating on Sr. Unsecured Debt
-----------------------------------------------------------------
Moody's Investors Service affirmed Coventry Health Care, Inc.'s
ratings -- senior unsecured debt at Ba1 -- and changed the outlook
to positive from stable. Moody's explains that this action is
based on Coventry's continued improvement in after-tax earnings
margin, increased capital strength, and continued progress made in
the integration of First Health.
The last rating action on Coventry occurred on November 17, 2005
when the outlook was changed to stable from negative. The rating
agency noted that since then, Coventry has continued to stabilize
the First Health business and integrate operations. In
particular, Moody's noted that Coventry has been successful in
addressing many key operational issues, including system
conversions, consolidation of medical management operations,
renegotiation of vendor contracts, staff reductions, network
enhancements, and growth in some of First Health's businesses.
While some of the First Health businesses have experienced run-
off, overall revenue is stable and the company is meeting
expectations. Although the integration is not complete, the
rating agency noted that the progress to date is substantial, and
the company is well positioned to grow the First Health business
segments.
Another driver of the outlook change, according to the rating
agency, is the company's M&A strategy, which is now focused on
developing a national diversified benefits company. Under this
more focused strategy, Moody's expects future acquisitions to
concentrate on expansion in key markets and adding specialty
business and core competencies needed to offer comprehensive
products on a national basis.
Moody's added that Coventry has continued to report solid earnings
results with enhanced levels of cash flow from both regulated and
unregulated sources. Membership in the company's core healthcare
business has been stable during this period without a reliance on
growth in Medicare or Medicaid segments. In addition, since the
end of 2004, Coventry has maintained its consolidated NAIC risk
based capital (RBC) above 200% of company action level (CAL). It
is anticipated that the company's RBC will be maintained above
this level at the end of 2006. However, Moody's noted that growth
in Medicare, other business segments, and acquisitions, may cause
a drain on RBC in 2007, but is reflected in the ratings.
Offsetting these positive developments, the rating agency stated,
the company is faced with the challenge of managing, growing, and
unifying its 17 distinct health plans into a national company. In
addition, there are the added concerns that are common to the
healthcare sector, including increased competition, the management
of healthcare costs, pressures to develop and service new
products, and the threat of government regulation.
The rating agency commented that if Coventry balances its RBC
level within the 200% CAL range with reasonable and profitable
growth, maintains annual net margins of at least 4%, and achieves
consistent annual membership growth of 3%, the ratings could be
upgraded. However, Moody's also said that if Coventry's
acquisition strategy changes from its new focus, future upward
ratings movement would be unlikely. The rating outlook may also
be moved back to stable if Coventry were to make a large
acquisition involving significant debt financing or integration
challenges, increase its financial leverage above 25%, experience
a decrease in commercial membership, a 5% drop in First Health
revenues, or if annual net margins fall below 3%.
Ratings affirmed with a positive outlook:
* Coventry Health Care, Inc.: senior unsecured debt rating at
Ba1; corporate family rating at Ba1;
* HealthAssurance Pennsylvania, Inc: Insurance Financial
Strength Rating at Baa1;
* HealthAmerica Pennsylvania, Inc.: Insurance Financial
Strength Rating at Baa1;
* Group Health Plan, Inc.: Insurance Financial Strength Rating
at Baa1.
Coventry Health Care, Inc. headquartered in Bethesda, Maryland
reported medical membership of 2.5 million and Part D Medicare
membership of approximately 660,000 as of June 30, 2006. The
company reported net income of $256 million on revenues of
approximately $3.9 billion for the six months ending June 30,
2006.
Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to repay punctually senior
policyholder claims and obligations.
CROWN CASTLE: Moody's Affirms B1 Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service affirmed all ratings of Crown Castle
Operating Company, including its B1 Corporate Family Rating, B1
Senior Secured Rating and SGL-2 Liquidity Rating. The ratings
reflect a B1 probability of default and loss given default
assessment of LGD 3 (43%) on the senior secured facility. The
outlook remains stable.
The rating action follows the company's announcement that it will
acquire tower operator Global Signal Inc. for total consideration
of approximately $5.8 billion, including the assumption of roughly
$1.8 billion in debt and up to $500 million in cash. The
transaction is subject to certain conditions and approvals and is
expected to close in the first quarter of 2007.
The Corporate Family and Senior Secured ratings have been affirmed
because Moody's believes CCOC has the debt capacity within its
existing rating to withstand the marginal increase in leverage
that will result from the acquisition. The affirmation of CCOC's
SGL-2 liquidity rating reflects no change to our previous
assumptions pending completion of the acquisition. CCOC expects
to fund the cash portion of its acquisition through its existing
unused $250 million revolving facility and a
$300 million add-on to its existing $1 billion term loan.
The B1 Corporate Family Rating and stable outlook reflect CCOC's
ability to generate stable and predictable cash flows from its
pro-forma portfolio of approximately 22,000 tower assets against
significant leverage of roughly 8.4x (on an adjusted, annualized
basis) and a pro-forma free cash flow to debt ratio in the low
single digits. The rating and outlook also reflect Moody's
expectation that Crown Castle will reduce its pro-forma leverage
modestly over the next year towards the upper end of its stated 5x
-- 7x leverage range.
Based in Houston, Crown Castle Operating Company owns and
operators communication towers and is a subsidiary of Crown Castle
International Corp.
CSC HOLDINGS: Extends Offer for $500 Mil. 6-3/4% Notes to Nov. 2
----------------------------------------------------------------
CSC Holdings, Inc., disclosed that it would further extend until
Nov. 2, 2006, at 5:00 p.m., New York City time, its offer to
exchange up to $500 million aggregate principal amount of its
6-3/4% Senior Notes due 2012.
As reported in the Troubled Company Reporter on Aug. 21, 2006, the
Company previously extended its offer to exchange to Sept. 8,
2006, due to its voluntary and ongoing review of its stock options
and SAR grants. The Company had determined that the date and
exercise price assigned to a number of its stock options and SAR
grants during the 1997 to 2002 period did not correspond to the
actual grant date and the closing price of the Company's common
stock on that day.
The notes were initially issued and sold in a private placement in
April 2004, for an equal aggregate amount of its registered 6-3/4%
Senior Notes due 2012. Except for the extension of the expiration
date, all of the other terms of the exchange offer remain as set
forth in the exchange offer prospectus dated July 18, 2006.
Based in Bethpage, New York, CSC Holdings is the operating company
of Cablevision Systems Corporation -- http://www.cablevision.com/
-- is a cable and entertainment firms in the US. Its operations
include a cable television system serving about 2.9 million
customers in the New York City area; Madison Square Garden, owner
of the famous sports arena and its teams, the New York Knicks and
Rangers; as well as Rainbow Media, a cable television network
holding company with such assets as American Movie Classics and
the Independent Film Channel. Cablevision also operates New
York's famed Radio City Music Hall. Chairman Charles Dolan and
his family control Cablevision.
* * *
As reported in the Troubled Company Reporter on July 4, 2006
Standard & Poor's Ratings Services affirmed its 'BB' bank loan
rating and '2' recovery rating on CSC Holdings Inc.'s $5.5 billion
of secured bank facilities.
DANA CORPORATION: Court Approves Settlement Agreement with WESCO
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the settlement agreement Dana Corporation and its debtor-
affiliates entered into with WESCO Distribution, Inc., Bruckner
Supply and WESCO Distribution Canada, LP. The agreement resolves
WESCO's claims against the Debtors.
Pursuant to the agreement, WESCO will have allowed claims against
these Debtors:
WESCO Claims
----------------------------------
Reclamation
General Entitled Section
Unsecured to Admin. 503(b)(9)
Debtor Non-Priority Priority Priority
------ ------------ ----------- ---------
Dana Corporation $4,046,009 $310,182 $1,718,945
Torque-Traction Manufacturing 1,702,178 246,290 628,747
Torque-Traction Integration 927,195 51,084 427,664
Coupled Products, Inc. 148,821 0 53,160
Glacier Vandervell, Inc. 124,986 0 71,785
Dana Atlantic, LLC 106,744 22,150 30,120
Hose & Tubing Products, Inc. 52,907 13,071 15,956
Long USA, LLC 30,266 0 9,338
Long Cooling, LLC 4,300 0 1,599
Reinze Wiscon Gasket, LLC 2,440 0 331
WESCO's claims date back to Sept. 14, 2003, when Dana entered
into:
(1) a Maintenance, Repair and Operating Supplies Management
Agreement United States with WESCO Distribution, Inc., and
its division, Bruckner Supply; and
(2) a Maintenance, Repair and Operating Supplies Management
Agreement Canada with Bruckner, WESCO Distribution, and
its Canadian subsidiary, WESCO Distribution Canada LP,
formerly known as WESCO Distribution-Canada, Inc.
Pursuant to the Agreements, WESCO provides integrated
maintenance, repair, OEM and operating supply services across 75
of the Debtors' assembly and manufacturing locations within the
United States and Canada.
The Agreements also provide that WESCO is obligated to purchase
or source products or services for delivery to the Debtors, and
the Debtors are obligated to purchase from WESCO their
requirements for all products and services for which WESCO has
been selected to manage or supply.
In May 2006, WESCO asked the Court to lift the automatic stay to
allow it to exercise its alleged rights to prevent the automatic
renewal of the Agreements by providing 90 days' written notice to
the Debtors of its intention not to renew the Agreements.
The Debtors opposed WESCO's Lift Stay Motion.
To resolve their disputes, the parties negotiated and entered
into a settlement, which salient terms include execution of a new
MRO Management Agreement that will provide for the continued
supply of MRO Services from WESCO to the Debtors for a two-year
period, and allowance of WESCO Distribution Inc.'s claims against
nine of the Debtors.
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. 22; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DANA CORPORATION: Can Walk Away from Four Real Property Leases
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Dana Corporation and its debtor-affiliates authority to
reject these unexpired non-residential real property leases
effective as of Sept. 30, 2006:
Monthly
Lessor Expiration Rent Amount
------ ---------- -----------
Antea Partnership Dec. 31, 2006 $45,892
Industrial Dvelopment Mar. 19, 2011 3,650
Industrial Coatings, LLC Jul. 31, 2008 3,000
Cost Plus, Inc. Sept. 30, 2006 29,429
The Court directed Antea Partnership, Industrial Development,
Industrial Coatings, LLC, and Cost Plus, Inc., to file a proof of
claim for any rejection damages not later than Oct. 21, 2006.
In their request, published in the Troubled Company Reporter on
Sept. 15, 2006, the Debtors told the Court that the Leases are not
and will not be necessary to their ongoing business operations or
restructuring efforts.
Corinne Ball, Esq., at Jones Day, in New York, explained that the
Debtors' ongoing obligations under the Rejected Leases,
aggregating $81,971 per month, would impose an undue burden on
their estates. The Debtors, therefore, believe that maintaining
the Rejected Leases would unnecessarily deplete the assets of
their estates to the direct detriment of their creditors.
Moreover, the Rejected Leases do not have any realizable value in
the marketplace, the Debtors avered.
The Debtors have surrendered, or intend to surrender, possession
of leased property to its respective lessor.
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. 22; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DAYTON SUPERIOR: Moody's Assigns Loss-Given-Default Rating
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its Caa1 Corporate Family Rating for Dayton
Superior Corporation. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$165 Mil. 10.75% Gtd.
Sr. Sec. Second
Priority Notes
due 2008 Caa1 Caa1 LGD3 44%
$154.7 Mil. 13% Gtd.
Sr. Sub Global Notes
due 2009 Caa3 Caa3 LGD5 85%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Dayton, Ohio, Dayton Superior Corporation
manufactures and distributes metal accessories and forms used in
concrete construction, and metal accessories used in masonry
construction.
DELPHI CORP: Michigan Labor Department Withdraws Seven Claims
-------------------------------------------------------------
The Michigan Department of Labor & Economic Growth, Unemployment
Insurance Agency withdraws seven claims against Delphi Corporation
and its debtor-affiliates:
* Claim No. 2604
* Claim No. 4533
* Claim No. 4532
* Claim No. 5766
* Claim No. 2725
* Claim No. 2723
* Claim No. 2724
Roland Hwang, assistant attorney general, in Detroit, Michigan,
did not disclose the reason for the withdrawal.
Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology. The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide. The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts. (Delphi Bankruptcy News, Issue No. 43; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DELPHI CORP: Wants to Expand Scope of FTI's Retention
-----------------------------------------------------
Delphi Corporation and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the Southern District of New York to
expand the scope of FTI Consulting, Inc., as their restructuring
and financial advisor to include the provision of economic
consulting services, nunc pro tunc to May 25, 2006.
John D. Sheehan, Delphi Corp. vice president and chief
restructuring officer, relates that FTI is currently providing the
Debtors with a wide array of restructuring and financial advisory
services in support of their reorganization process. As part of
this process, the Debtors are seeking to defend themselves against
certain lawsuits.
FTI has been approached by the Debtors and Shearman & Sterling
LLP, the Debtors' special counsel, to assist Shearman in rendering
legal advice and performing legal services by providing economic
consulting services relating to certain legal actions that are
pending against the Debtors.
FTI will continue to apply to the Court for allowance of
compensation and reimbursement of expenses related to the Economic
Consulting Services.
Mr. Sheehan clarifies that FTI will not bill for the Economic
Consulting Services separately from the restructuring and
financial advisory services but will designate one or more
separate billing codes so that the Economic Consulting Services
performed may be distinguishable and distinct from other services.
The Debtors will pay FTI pursuant to customary hourly rates for
Economic Consulting Services:
Daniel R. Fischel $1,000
Senior Vice Presidents $485 - $590
Vice Presidents $450 - $485
Economists $325 - $440
Research Staff $125 - $315
The use of computer capability is not included in the hourly
rates, Mr. Sheehan says. The Economic Consulting Services may
require empirical analysis of large datasets. FTI charges a fee
for use of its computer capability.
Should empirical analysis be required, the charge for this
capability will be measured by FTI's customary rates times the
actual amount of CPU time, connect time, and other functions
actually used. FTI will limit the use of the computer capability
charge to no more than 20% of total professional fees.
Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology. The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide. The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts. (Delphi Bankruptcy News, Issue No. 43; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
EVERGREEN INT'L: Extends 12% Senior Notes Offering to October 16
----------------------------------------------------------------
The pending offer of Evergreen International Aviation, Inc. to
purchase any and all of its outstanding 12% Senior Second Secured
Notes Due 2010 (CUSIP No. 30024DAF7) previously scheduled to
expire at 5:00 p.m., New York City time, on Oct. 6, 2006, has been
extended until 5:00 p.m., New York City time, on Oct. 16, 2006,
unless otherwise extended or earlier terminated. Except for the
above change, all terms and conditions of the tender offer are
unchanged and remain in full force and effect.
Holders of approximately 97.94% of the outstanding principal
amount of the Notes have tendered and consented to the proposed
amendments to the indenture governing the Notes. Subject to the
satisfaction or waiver of the remaining conditions (including the
consummation of a new Senior Secured Credit Facility by Evergreen)
set forth in the Offer to Purchase and Consent Solicitation
Statement dated July 20, 2006, Evergreen currently intends to
accept the entire amount of Notes tendered pursuant to the tender
offer and consent solicitation.
Credit Suisse Securities (USA) LLC is serving as the exclusive
Dealer Manager and Solicitation Agent for the tender offer and
consent solicitation. Questions regarding the terms of the tender
offer or consent solicitation should be directed to:
Credit Suisse Securities (USA) LLC
Attn: Liability Management Group
Telephone (212) 325-7596 or (800) 820-1653
The Tender Agent and Information Agent is D.F. King & Co., Inc.
Any questions or requests for assistance or additional copies of
documents may be directed to the Information Agent toll free at
(800) 290-6426 (bankers and brokers call collect at (212) 269-
5550).
Based in McMinnville, Oregon, Evergreen International Aviation,
Inc. -- http://www.evergreenaviation.com/-- is a privately held
global aviation services company that is active through several
subsidiary companies.
* * *
As reported in the Troubled Company Reporter on Aug. 11, 2006,
Standard & Poors' Ratings Services raised its rating on Evergreen
International Aviation Inc.'s first-lien bank loan rating to 'B+'
from 'B' and changed the recovery rating to '1' from '2'. The
rating action reflects a change in the structure of the proposed
credit facility.
EXTENDICARE HEALTH: Gets Requisite Consents from Sr. Noteholders
----------------------------------------------------------------
Extendicare Health Services Inc., a wholly owned subsidiary of
Extendicare Inc., received the requisite amount of consents from
the holders of its $150 million 9-1/2% Senior Notes Due 2010,
CUSIP No. 302244AF5 and its $125 million 6-7/8% Senior
Subordinated Notes Due 2014, CUSIP No. 302244AH1, as of 5:00 p.m.,
New York City time, on Oct. 5, 2006, to amend the indentures
governing them.
EHSI also has determined the price to be paid in connection with
the Offer and Solicitation of the 2014 Notes.
The Solicitations for the Notes expired at 5:00 p.m., New York
City time, on Oct. 5, 2006. At that time, EHSI received consents
from holders of 100% of the outstanding 2010 Notes and 99.98% of
the outstanding 2014 Notes, being the requisite amount of consents
to amend the indentures governing the Notes to eliminate
substantially all of the restrictive covenants and certain event
of default provisions. As a result, EHSI and the trustee under
each indenture pursuant to which the Notes were issued have
entered into supplemental indentures dated as of Oct. 5, 2006.
The supplemental indentures will become operative on the early
settlement date.
The "Total Consideration" to be paid for each Note validly
tendered and accepted for payment by the Consent Date, will be
equal to (1) $1,050 for each $1,000 principal amount of the 2010
Notes and (2) $1,072.42 for each $1,000 principal amount of the
2014 Notes, which was determined by pricing the 2014 Notes using
standard market practice to the first call date at a fixed spread
of 50 basis points over the bid-side yield on the 4.875% U.S.
Treasury Notes due May 15, 2009, at 2:00 p.m., New York City time,
on Oct. 5, 2006.
The Total Consideration for each Note so tendered includes a
consent payment of $30 for each $1,000 principal amount. Holders
whose valid tenders are received after the Consent Date, but on or
prior to 12:00 midnight, New York City time, on Oct. 20, 2006,
will receive the Tender Offer Consideration but will not receive
the Consent Payment. The "Tender Offer Consideration" is the
Total Consideration less the Consent Payment.
Holders of Notes who validly tender and do not validly withdraw
their Notes in the Offers will also receive accrued and unpaid
interest from the last interest payment date to, but not
including, the applicable settlement date, payable on the
applicable settlement date.
EHSI's obligation to accept for purchase and to pay for the Notes
validly tendered and consents validly delivered, and not validly
withdrawn or revoked, pursuant to the Offers is subject to and
conditioned upon the satisfaction of or, where applicable, EHSI's
waiver of, certain conditions including
(1) the receipt of proceeds from EHSI's anticipated
collateralized mortgage backed securitization and amended
or new revolving credit facility and
(2) certain other general conditions, each as described in more
detail in the Offer to Purchase and Consent Solicitation
Statement dated Sept. 22, 2006.
EHSI has retained Lehman Brothers Inc. to serve as Dealer Manager
and Solicitation Agent and D.F. King & Co., Inc. to serve as
Information Agent and Tender Agent for the Offers and
Solicitations. Requests for documents may be directed to:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
Telephone (212) 269-5550 (collect)
Toll Free (888) 567-1626
Questions regarding the terms of the Offer to Purchase should be
directed to:
Lehman Brothers Inc.
ATN: Liability Management Group
Telephone (212) 528-7581 (collect)
Toll Free (800) 438-3242 (toll free)
About Extendicare Health Services
Extendicare Health Services, Inc. of Milwaukee, Wisconsin, is a
wholly owned subsidiary of Extendicare Inc., and is a major
provider of long-term care and related services in the United
States. Through its subsidiaries, Extendicare Inc. operates 439
long-term care facilities in the United States and Canada, with
capacity for 34,500 residents. As well, through its operations in
the United States, Extendicare offers medical specialty services
such as subacute care and rehabilitative therapy services, while
home health care services are provided in Canada. Extendicare
Inc. employs 37,600 people in North America.
* * *
As reported in the Troubled Company Reporter on Oct. 3, 2006,
in connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Hospital and Long-term Care sectors, the
rating agency confirmed its Ba3 Corporate Family Rating for
Extendicare Health Services, Inc.
FACTORY TRAWLER: Case Summary & 19 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Factory Trawler Supply Inc.
4257 24th Avenue West
Seattle, WA 98199
Bankruptcy Case No.: 06-13486
Chapter 11 Petition Date: October 6, 2006
Court: Western District of Washington Seattle (Seattle)
Judge: Thomas T. Glover
Debtor's Counsel: J. Todd Tracy, Esq.
Crocker Kuno Ostrovsky LLC
720 Olive Way, Suite 1000
Seattle, WA 98101
Tel: (206) 624-9894
Fax: (206) 624-8598
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Fishermen's Insurance Service Insurance $38,133
2815 Eastlake Avenue E, Suite 240
Seattle, WA 98102-3007
Ounalashka Corporation Property Taxes $36,892
P.O. Box 149
Unalaska, AK 99685
Leases $33,851
City of Unalaska Utilities $24,324
P.O. Box 610
Unalaska, AK 99685
Hillis, Clark, Martin Legal Services $5,582
500 Galand Building
1221 Second Avenue
Seattle, WA 98101
Anchor Auto Services Trade/Business Debt $5,061
P.O. Box 920144
Dutch Harbor, AK 99692
Bank of America Credit Card Debt $4,998
Hydra-Pro Dutch Harbor Inc. Trade/Business Debt $4,589
McGladrey & Pullen Tax Service Professional Services $3,465
Alaska Pacific Trade/Business Debt $2,110
Environmental Services
Mundt MacGregor Legal Services $1,849
Petro Star Inc. Trade/Business Debt $1,395
Southeast Carpet & Draperies Trade/Business Debt $1,332
MOL Industries Trade/Business Debt $1,179
Nenana Heating Trade/Business Debt $1,023
Aleutian Propane Sales Trade/Business Debt $961
Otis Elevator Company Trade/Business Debt $900
Pacific Stevedoring, Inc. Trade/Business Debt $726
Unalaska Building Supply Trade/Business Debt $717
State of Alaska License $710
FORD MOTOR: Taps UBS to Filter Aston Martin Bids
------------------------------------------------
Ford Motor Co. is filtering out frivolous approaches for Aston
Martin, as the auction of the British luxury sports car attracted
many potential buyers to express interest in an acquisition deal,
James Mackintosh writes for the Financial Times.
The company has appointed UBS to run the auction, which requested
bids to be confirmed by mid-October, FT cited people familiar with
the sale.
Sources said Aston CEO Ulrich Bez has already discussed the sale
with prospective buyers, indicating his interest in remaining as
head of the new ownership but denying plans to launch a management
buy-out, FT relates.
According to the report, the parties understood to have a firm
interest in the acquisition include, among others:
-- One Equity, the private equity arm of JPMorgan where
former Ford CEO Jac Nasser is a partner;
-- Cerberus, the New York equity group which employs former
Ford executive David Thursfield; and
-- UK's Magma, run by former Ford of Europe CEO Martin Leach.
Ford is exploring strategic options for Aston Martin sports-car
unit, with particular emphasis on a potential sale of all or a
portion of the unit.
Headquartered in Dearborn, Michigan, Ford Motor Company --
http://www.ford.com/-- manufactures and distributes automobiles
in 200 markets across six continents. With more than 324,000
employees worldwide, the company's core and affiliated automotive
brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln,
Mazda, Mercury and Volvo. Its automotive-related services include
Ford Motor Credit Company and The Hertz Corporation.
* * *
As reported in the Troubled Company Reporter on Aug. 22, 2006,
Dominion Bond Rating Service placed long-term debt rating of Ford
Motor Company Under Review with Negative Implications following
announcement that Ford will sharply reduce its North American
vehicle production in 2006. DBRS lowered on July 21, 2006, Ford
Motor Company's long-term debt rating to B from BB, and lowered
its short-term debt rating to R-3 middle from R-3 high. DBRS also
lowered Ford Motor Credit Company's long-term debt rating to
BB(low) from BB, and confirmed Ford Credit's short-term debt
rating at R-3(high).
Fitch Ratings also downgraded the Issuer Default Rating of Ford
Motor Company and Ford Motor Credit Company to 'B' from 'B+'.
Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3'
from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB-
/RR2' from 'BB/RR2'. The Rating Outlook remains Negative.
Standard & Poor's Ratings Services also placed its 'B+' long-term
and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit
Co., and related entities on CreditWatch with negative
implications.
As reported in the Troubled Company Reporter on July 24, 2006,
Moody's Investors Service lowered the Corporate Family and senior
unsecured ratings of Ford Motor Company to B2 from Ba3 and the
senior unsecured rating of Ford Motor Credit Company to Ba3 from
Ba2. The Speculative Grade Liquidity rating of Ford has been
confirmed at SGL-1, indicating very good liquidity over the coming
12-month period. The outlook for the ratings is negative.
FORTE COMMUNICATIONS: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Forte Communications, Inc.
1028 Hull Terrace
Evanston, IL 60202
Bankruptcy Case No.: 06-12818
Type of Business: The Debtor provides communication services.
Chapter 11 Petition Date: October 9, 2006
Court: Northern District of Illinois (Chicago)
Debtor's Counsel: Bradley H. Foreman, Esq.
Law Offices of Bradley H Foreman, P.C.
6914 West North Avenue
Chicago, IL 60707
Tel: (773) 622-4800
Fax: (773) 622-4873
Estimated Assets: $50,000 to $100,000
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 Largest Unsecured
Creditors.
GEMINI SERVICES: Transfer Defects Didn't Invalidate Mortgage
------------------------------------------------------------
Standing in the shoes of a hypothetical bona fide purchaser,
Gemini Services, Inc., sued its creditors (Bankr. S.D Ohio Adv.
Pro. No. 05-3190), whose debts are secured by liens on its real
property, in an attempt to avoid the mortgage lien because there
were defects in certain transfer documents. The secured creditors
are Mortgage Electronic Registration Systems, Inc., Del Norte
Refi, LLC, Key Bank National Association (dismissed from the
litigation because it holds no interest in the property), and the
United States of America, Internal Revenue Service.
After reviewing the evidence put before the Court in this matter,
the Honorable Thomas F. Waldron could not find that a hypothetical
bona fide purchaser might be misled by the assignment documents.
Accordingly, in a decision published at 2006 WL 2594735, Judge
Waldron finds that the Debtor's lawsuit is without merit.
Further, Judge Waldron rules, Del Norte holds the first and best
lien against the property and this lien may not be avoided by
Gemini. Any filed proof of claim in this case by MERS shall be
deemed to have been filed as an agent of Del Norte.
Gemini Services, Inc., filed for Chapter 11 protection on February
18, 200 (Bankr. S.D. Ohio Case No. 05-31317).
GENERAL MOTORS: Kerkorian Backs Out of Share Purchase Plan
----------------------------------------------------------
Investor Kirk Kerkorian has ditched plans to raise his stake in
General Motors Corporation following the collapse of alliance
talks between GM and Renault-Nissan, BBC News Reports.
The three automakers had agreed to conduct a 90-day study of the
benefits of a possible alliance after Mr. Kerkorian, who owns a
9.9% stake in GM, broached the idea early this year.
According to BBC News, Mr. Kerkorian was displeased over GM's
termination of the negotiations prior to the end of the 90-day
period and without first obtaining an independent review from its
Board of Directors. Sarah Karush at the Associated Press reported
last week that Mr. Kerkorian had considered increasing his stake
in GM by much as 12%.
GM ended negotiations after concluding that the alliance framework
required by Renault-Nissan would substantially disadvantage GM
shareholders. GM also asked Renault and Nissan to pay a premium
as part of a potential alliance. Renault-Nissan was unwilling to
pay for this premium saying that payment for this additional
compensation was contrary to the spirit of any successful
partnership.
Jerome York, Mr. Kerkorian's representative to GM, resigned from
the automaker's board after negotiations with Renault-Nissan
ended. In a letter dated October 6 filed with the Securities and
Exchange Commission, Mr. York expressed his reservations over the
ability of GM's current business model to successfully compete in
the marketplace with Asian auto manufacturers.
GM, however, remains committed and focused in its turnaround
program. The Company maintains that it is making real progress in
its efforts. According to GM, these actions are already yielding
significant improvement in its results including more than $9
billion in yearly cost savings on a running rate basis by the end
of 2006, and record revenues in the first two quarters of this
year.
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.
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.
GROUP 1 AUTOMOTIVE: Moody's Assigns Loss-Given-Default Rating
-------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its Ba2 Corporate Family Rating for Group 1
Automotive, Inc. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$150 million
subordinated notes B1 Ba3 LGD5 75%
Guaranteed senior
notes shelf Ba3 Ba3 LGD4 69%
Guaranteed subordinated
notes shelf B1 Ba3 LGD5 75%
Preferred shelf B2 B1 LGD6 97%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Group 1 Automotive, Inc. (NYSE:GPI) owns 95 automotive dealerships
comprised of 136 franchises, 33 brands and 30 collision service
centers in California, Colorado, Florida, Georgia, Louisiana,
Massachusetts, New Hampshire, New Jersey, New Mexico, New York,
Oklahoma and Texas. Through its dealerships, the company sells
new and used cars and light trucks; arranges related financing,
vehicle service and insurance contracts; provides maintenance and
repair services; and sells replacement parts.
GSC ABS: Fitch Rates $10 Million Class C Notes at BB+
-----------------------------------------------------
Fitch Ratings rated these notes issued by GSC ABS CDO 2006-4u,
Ltd. and GSC ABS CDO 2006-4u, Corp.:
-- $502,000,000 class A-S1VF senior secured floating rate notes
due 2046 'AAA'
-- $85,000,000 class A1 senior secured floating rate notes due
2046 'AAA'
-- $45,000,000 class A2 senior secured floating rate notes due
2046 'AA'
-- $45,000,000 class A3 secured deferrable floating rate notes
due 2046 'A'
-- $33,000,000 class B mezzanine secured deferrable floating
rate notes due 2046 'BBB'
-- $10,000,000 class C mezzanine secured deferrable floating
rate notes due 2046 'BB+'
The ratings of the class A-S1VF notes, class A1 notes and class A2
notes address the likelihood that investors will receive full and
timely payments of interest, as per the governing documents, as
well as the aggregate outstanding amount of principal by the
stated maturity date. The ratings of the class A3, class B and
class C notes address the likelihood that investors will receive
ultimate and compensating interest payments, as per the governing
documents, as well as the aggregate outstanding amount of
principal by the stated maturity date.
The ratings are based on the quality of the initial portfolio
assets, as well as the credit enhancement provided by support from
the preference shares, the excess spread, the GIC account, and the
protections incorporated within the structure.
During the four year reinvestment period, the collateral manager,
GSCP (NJ), LP (GSC Partners), may annually trade up to 15% of the
total portfolio balance as well as any credit risk, credit
improved, defaulted or equity securities on a discretionary basis.
GSC 2006-4u is a hybrid cash and synthetic arbitrage
collateralized debt obligation. The collateral pool will have a
maximum Fitch weighted average rating factor of 6.0 ('BBB/BBB-').
With the proceeds of the note issuance and the commitment from the
class A-S1VF noteholder, GSC 2006-4u will invest in a $750 million
portfolio of combined synthetic and cash securities.
Approximately 99% of the collateral will be purchased at close.
The expected effective date portfolio will consist of
approximately 75% credit default swaps, primarily referencing
residential mortgage-backed securities, and approximately 25% cash
RMBS, structured finance CDO cash securities, and commercial real
estate CDO cash securities.
GSC 2006-4u includes a GIC account which is funded initially and
over time from note and cash proceeds, respectively, and a super
senior liquidity facility consisting of the $502 million class A-
S1VF notes.
In the case of any credit events for the CDS contracts, the GIC
account will initially be drawn upon to make credit protection
payments. After the GIC account has been depleted, the class A-
S1VF notes will be drawn upon to make credit protection payments
(or for payment in the case of the physical settlement option).
The outstanding drawn amount on the class A-S1VF notes receives
interest of one-month London Interbank Offered Rate plus 0.32%,
while the unfunded class A-S1VF notes will receive an ongoing
commitment fee of 0.17%.
Also, during the reinvestment period, and after the preference
shares have achieved an annualized coupon of 16%, 50% of the
remaining interest proceeds will be used to redeem the class B and
C notes on a pro rata basis. After the reinvestment period,
principal payments will be applied pro rata to the drawn and
unfunded class A-S1VF notes and the funded notes until the
original collateral balance is 50% paid down or until the failure
of a coverage test, after which principal proceeds will be paid
sequentially for the remainder of the deal.
The portfolio for GSC 2006-4u will be managed by GSC Partners.
Privately owned GSC Partners was established in 1999, and is an
SEC registered investment advisor. Total assets under management
as of June 30, 2006 were $14.7 billion with $10.2 billion
underlying 20 separate CDO transactions (including warehoused
assets) issued via GSC Partners' corporate credit and structured
finance businesses.
The firm describes itself as focused on credit-related alternative
investment strategies. In addition to its CDO activities in
corporate credit, and structured finance, GSC Partners manages
portfolios of control distressed debt, European mezzanine debt,
and corporate credit. The firm is staffed by over 160
professionals headquartered in New Jersey, and has offices in New
York, London, and Los Angeles.
GSC Partners' structured finance activities are led by Frederick
Horton, a GSC senior managing director and former member of TCW
responsible for their structured finance CDO activities. Ed
Steffelin is COO of the group and head of portfolio management.
Daniel Castro, former head of structured finance research at
Merrill Lynch, leads the structured finance team's credit research
efforts. The structured finance team currently numbers 17
professionals.
In addition to its role as collateral manager for GSC Partners'
ABS CDO activities, GSC Partners also manages a long/short
structured finance hedge fund, and is responsible for the
management of the firm's $1.8 billion alternative mortgage REIT,
GSC Capital Corp. The REIT will typically hold 100% of the first
loss in GSC Partners structured finance CDOs. Day-to-day
investment decisions with respect to the CDO are made by a
committee consisting of the structured finance team's four senior
members.
H.D. REALTY: Case Summary & Largest Unsecured Creditor
------------------------------------------------------
Debtor: H.D. Realty Corp.
26 Hanes Drive
Wayne, NJ 07470
Bankruptcy Case No.: 06-19719
Type of Business: The Debtor is engaged in the real estate
business.
Chapter 11 Petition Date: October 9, 2006
Court: District of New Jersey (Newark)
Debtor's Counsel: Allen I. Gorski, Esq.
Teich Groh
691 State Highway 33
Trenton, NJ 08619
Tel: (609) 890-1500
Fax: (609) 890-6961
Total Assets: $3,120,526
Total Debts: $1,931,000
Debtor's Largest Unsecured Creditor:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Anthony Cambria, Esq. Counsel Fees $1,000
146 State Highway 34
Suite 400
Holmdel, NJ 07733
HANESBRANDS INC: Moody's Assigns Loss-Given-Default Rating
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its Ba3 Corporate Family Rating for Hanesbrands,
Inc. Additionally, Moody's revised or held its probability-of-
default ratings and assigned loss-given-default ratings on these
loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$500 million senior
secured revolver Ba2 Ba2 LGD3 31%
$1.65 billion senior
secured 1st lien
term loan Ba2 Ba2 LGD3 31%
$450 million senior
secured 2nd lien
term loan Ba3 B1 LGD5 73%
$500 million senior
bank credit facility B1 B2 LGD5 89%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporatefamily will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Hanesbrands Inc. -- http://www.hanesbrands.com/-- markets
innerwear, outerwear and hosiery apparel under consumer brands,
including Hanes, Champion, Playtex, Bali, Just My Size, barely
there and Wonderbra. The company designs, manufactures, sources
and sells T-shirts, bras, panties, men's underwear, children's
underwear, socks, hosiery, casual wear and active wear.
Hanesbrands has approximately 50,000 employees in 24 countries.
HINES HORTICULTURE: Subsidiary Sells Miami Assets for $4.1 Million
------------------------------------------------------------------
Hines Horticulture, Inc., disclosed that Hines Nurseries, Inc., a
California corporation and wholly owned subsidiary, discontinued
its nursery operations in the Miami, Florida area and sold its
assets located in Miami, Florida to Costa Nursery Farms and to
Pure Beauty Farms.
Costa Nursery Agreement
Hines Nurseries, effective Oct. 2, 2006, entered into an asset
purchase agreement with Costa Nursery Farms, LLC, a Florida
limited liability company, to sell to Costa certain inventory,
vehicles, farm equipment, and other assets located at Hines
Nurseries' Miami, Florida facility. The selling price of the
Costa Purchased Assets was approximately $2.4 million, a portion
of which was used to pay off outstanding lease obligations
relating to the Costa Purchased Assets.
In connection with the Costa Agreement, Hines Nurseries amended
its lease with Quantum Ventures, LLC, a Florida limited liability
company, to sublet certain real property leased from Quantum to
Costa and to change the termination date of the lease from
Sept. 14, 2007 to June 30, 2007. In addition Hines Nurseries
agreed to lease certain other real property it owns in the Miami,
Florida area to Costa.
A full text-copy of the Asset Purchase Agreement with Costa
Nursery Farms may be viewed at no charge at:
http://ResearchArchives.com/t/s?1317
Pure Beauty Agreement
Hines Nurseries, effective Oct. 2, 2006, also entered into an
asset purchase agreement with Pure Beauty Farms, Inc., a Florida
corporation, to sell to Pure Beauty certain inventory, vehicles,
farm equipment, racks and other assets located at its Miami,
Florida facility. The selling price of the Pure Beauty Purchased
Assets was approximately $1.7 million, a portion of which was used
to pay off outstanding lease obligations on the Pure Beauty
Purchased Assets. In connection with the Pure Beauty Agreement,
Hines Nurseries also agreed to lease certain of its owned real
property in the Miami, Florida area to Pure Beauty.
A full text-copy of the Asset Purchase Agreement with Pure Beauty
Farms, Inc., may be viewed at no charge at:
http://ResearchArchives.com/t/s?1319
Each of the Costa Agreement and the Pure Beauty Agreement, the
Company further disclosed, contain various representations,
warranties and other covenants and provisions, including granting
Costa and Pure Beauty certain restricted and limited rights to
facilitate the sale of inventory purchased by Costa and Pure
Beauty through certain The Home Depot Stores within the state of
Florida. With the sale of Costa Purchased Assets and the Pure
Beauty Purchased Assets, the Company ceased active operations at
its Miami Florida locations.
The Company says that there are no material relationships, other
than in respect of the Costa Agreement and the Pure Beauty
Agreement, between the Company, Hines Nurseries or their
respective directors, officers or affiliates.
Exit of Disposal Costs
With the sale of the Costa Purchased Assets and the Pure Beauty
Purchased Assets, the Company ceased active operations at its
Miami, Florida locations. The Company currently estimates that it
will recognize employee severance costs in the range of
approximately $900,000 to $1.1 million as a result of the sale of
the Costa and the Pure Beauty Purchased Assets. While the Company
expects that it will incur additional cash and non-cash charges as
a result of the transactions, it is currently unable to make a
determination of an estimate or a range of the expected additional
charges. In addition, as a result of the sale of the assets, the
Company anticipates recording a loss, which, at this time, it is
unable to estimate the total amount of the potential loss.
Headquartered in Irvine, California, Hines Horticulture Inc.
(NASDAQ: HORT) -- http://www.hineshorticulture.com/-- operates
commercial nurseries in North America, producing a broad
assortment of container grown plants. Hines Horticulture sells
nursery products primarily to the retail segment, which includes
premium independent garden centers, as well as leading home
centers and mass merchandisers, such as Home Depot, Lowe's and
Wal-Mart.
* * *
Hines Horticulture Inc.'s 10-1/4% Bonds carry Moody's Investors
Service's B3 rating and Standard & Poor's Ratings Services' CCC+
rating.
HOUSING AUTHORITY: Moody's Puts Watch on Revenue Bonds' B2 Rating
-----------------------------------------------------------------
Moody's Investors Service has placed the B2 rating on Watchlist
with direction uncertain in response to the direction to the
trustee by holders of a majority in aggregate amount of The
Housing Authority of the City of Dallas, Georgia, Revenue Bonds
Series 2002A and Series 2002B to commence foreclosure proceedings
with respect to the Legacy at Dallas Project, a 106-unit senior
independent housing facility located in the City of Dallas,
Georgia. It is anticipated that foreclosure and sale of the
Project will take place on November 7, 2006.
The trustee has also entered into an agreement, at the direction
of the majority bondholders, with Canyon Creek Development, an
affiliate of SunWest Management, Inc., that SunWest will submit a
minimum bid of $9,435,000 to purchase the Project at the
foreclosure sale subject to certain conditions. The majority
bondholders further directed the trustee to accelerate the
maturity of the Series 2002 bonds, and as of September 15, 2006,
the principal of all the Series 2002 bonds and interest accrued
thereon are immediately due and payable.
As reported by the trustee, occupancy at the Project as of
September 8, 2006 was 93% (99 of 106 units) and $345,059.23 is on
deposit in the Revenue Fund and $63,740,.93 is on deposit in the
Debt Service Reserve Fund as of August 31, 2006.
Outlook
Our outlook for the rating remains developing due to the
uncertainty in the outcome in the pending foreclosure sale as well
as the ability for the borrower of this project to pay the Series
2002A and 2002B bondholders in full upon the acceleration of the
Series 2002 bonds.
INDIAN CREEK: Files Plan and Disclosure Statement in California
---------------------------------------------------------------
Indian Creek Vineyard Estates, LLC, filed with the U.S. Bankruptcy
Court for the Northern District of California its Chapter 11 Plan
of Reorganization and an accompanying Disclosure Statement
explaining that plan.
Overview of the Plan
The Debtor tells the Court that its plan provides for the
repayment of claims from a refinancing on the real property it
owns consisting of approximately 582 acres in Carmel Valley,
California. The Debtor says that this refinancing will allow it
to retire all debt in full upon Court approval of the loan.
The Debtor discloses that it has been successful in obtaining a
commitment to fund the refinancing with a loan brokered by
Remington Financial Group, Inc., for a new loan in an amount
needed to take out existing debt plus provide for needed
improvements, subject to the acceptance of an updated appraisal of
the property. The loan, in a maximum amount of $10.8 million is
the source of funds, which will allow the Debtor to repay all debt
and fund the monetary requirements of a individual share purchase
agreement between John Duval and Richard Smith.
The Plan also provides that upon Confirmation, the Reorganized
Debtor shall make full distribution on claims not previously paid
directly from escrow, following Court approval. Creditors shall
be paid from the Distribution Fund once it is funded by the new
loan.
Treatment of Claims
Under the Plan, Administrative Expenses will be paid in full.
The Secured Claim of Bridge Capital will be paid from the
refinancing of the real property held by the Debtor. The allowed
claim will be paid directly from escrow following Court approval
of the proposed loan.
The Secured Claim of First Hawaiian Bank will be paid from the
Distribution Fund following approval of the loan refinancing the
property. First Hawaiian will retain its pre-petition security
position and collateral pending payoff of the loan from the
Distribution Fund and will release all security and the personal
guaranties upon payment, in full, of its allowed secured claim.
The Secured Claim of the County of Monterey for real property tax
obligations will be paid directly from the escrow for the
refinancing of the real property following Court approval of the
proposed loan.
Unsecured creditors will be paid in full, from the Distribution
Fund upon Court approval of the refinancing loan and funding. No
payment shall be made on account of the claims of John Duval until
the payment under the share sale agreement has been made to
Richard Smith.
The existing equity interest of the members shall remain subject
to the terms of a share sale agreement between John Duval and
Richard Smith, whereby upon payment of an agreed sum, Mr. Smith
will assign his membership interest to Mr. Duval. Mr. Duval will
be the remaining member of the Reorganized Debtor after
confirmation and after Mr. Smith's payoff of amounts due under the
Agreement.
Headquartered in Carmel Valley, California, Indian Creek Vineyard
Estates, LLC, filed for chapter 11 protection on June 14, 2006
(Bankr. N.D. Ca. Case No. 06-51053). Henry B. Niles, Esq.,
represents the Debtor in its restructuring efforts. No Official
Committee of Unsecured Creditors has been appointed in the
Debtor's bankruptcy proceedings. The Debtor's schedules show
total assets of $17,011,000 and total debts of $6,868,740.
INDIAN CREEK: Disclosure Statement Hearing Set for November 13
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
set a hearing at 10:45 a.m., on November 13, 2006, to consider the
adequacy of the Disclosure Statement explaining Indian Creek
Vineyard Estates, LLC's Chapter 11 Plan of Reorganization.
Objections, if any, to the Disclosure Statement must be submitted
by Nov. 6, 2006.
Headquartered in Carmel Valley, California, Indian Creek Vineyard
Estates, LLC, filed for chapter 11 protection on June 14, 2006
(Bankr. N.D. Ca. Case No. 06-51053). Henry B. Niles, Esq.,
represents the Debtor in its restructuring efforts. No Official
Committee of Unsecured Creditors has been appointed in the
Debtor's bankruptcy proceedings. The Debtor's schedules show
total assets of $17,011,000 and total debts of $6,868,740.
INDUSTRIAL ENTERPRISES: Unable to File 2006 Form 10-KSB
-------------------------------------------------------
Although its audit for 2006 is effectively complete, Industrial
Enterprises of America, Inc., is unable to file its 2006 Form
10-KSB because of an issue recently raised by the Company's PCAOB
auditors while reviewing the Company's restatement of the its Form
10-QSB for the Quarter ended March 31, 2006.
The issue revolves around convertible debenture agreements with
various debt features that include detachable warrants, which the
Company entered into during the First and Third Quarters of 2006.
The Company's auditors have asked the Company to research whether
these debentures are derivative securities and to value and book
such debentures as appropriate. The Company is seeking
appropriate help in such research and is working to resolve this
matter as expeditiously as possible.
"We are determined to take the most conservative approach to this
issue," James Margulies, Chief Financial Officer of Industrial
Enterprises of America, Inc., commented. "The result of this
approach will be a non-cash hit to the Company's Income Statement
for the prior quarters in which the debentures were entered. The
resulting non-cash entries due to the resolution of this issue
will have no impact on the Company's strong Fourth Quarter and
fiscal year results. Additionally, this matter will have no
effect on the 2007 fiscal year, and the Company continues to have
confidence in the earnings guidance previously provided for fiscal
year 2007."
Once this matter is resolved, the Company will be filing its
Amended Form 10-QSB for the Quarter ended March 31, 2006, and the
Form 10-KSB will follow soon afterward.
About Industrial Enterprises of America
Headquartered in New York City, Industrial Enterprises of America,
Inc. (OTCBB:IEAM) is an automotive aftermarket supplier that
specializes in the sale of anti-freeze, auto fluids, and other
automotive additives & chemicals. The company has distinct
proprietary brands that collectively serve the retail,
professional, and discount automotive aftermarket channels.
Going Concern Doubt
Beckstead and Watts, LLP, in Henderson, Nevada, raised substantial
doubt about Industrial Enterprises' ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended June 30, 2005. The auditor pointed
to the Company's net losses from its inception, and its limited
operations, since the Company has not commenced planned principal
operations.
INFOR GLOBAL: Moody's Assigns Loss-Given-Default Rating
-------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Technology Software sectors, the rating
agency confirmed its B3 Corporate Family Rating for Infor Global
Solutions Holdings Ltd.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these loans and
bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$150 Million
Senior Secured
Revolving Credit
Facility due 2012 B2 B1 LGD2 25%
$2 Billion
Senior Secured
First Lien
due 2012 B2 B1 LGD2 25%
$1.675 Billion
Senior
Subordinated
Notes due 2013 Caa2 Caa2 LGD5 80%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
umeric scale. They express Moody's opinion of the likelihood that
any entity within a corporate family will default on any of its
debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Infor Global Solutions Holdings Ltd., headquartered in Alpharetta,
Georgia and a Cayman Islands exempted company, is a global
provider of financial and enterprise applications software.
INSIGHT COMMS: Completes $2.445 Billion Sr. Loan Debt Financing
---------------------------------------------------------------
Insight Communications completed the financing of $2.445 billion
of senior secured credit facilities for Insight Midwest. The
facilities comprise term loans in the amount of $2.185 billion and
a $260 million revolving credit facility.
The proceeds will be used to refinance Insight Midwest's
existing senior credit facilities and to redeem all of Insight
Midwest's 10 «% Senior Notes due November 1, 2010 and
$185 million principal amount of its 9-3/4% Senior Notes due
October 1, 2009.
Insight Communications (NASDAQ: ICCI) is the 9th largest cable
operator in the United States, serving approximately 1.3 million
customers in the four contiguous states of Illinois, Indiana,
Ohio, and Kentucky. Insight specializes in offering bundled,
state-of-the-art services in mid-sized communities, delivering
analog and digital video, high-speed Internet, and voice telephony
in selected markets to its customers.
* * *
As reported on the Troubled Company Reporter on Oct. 4, 2006,
Fitch Ratings affirmed the 'B+' Issuer Default Rating assigned to
Insight Communications Company, Inc., Insight Midwest, LP, and
Insight Midwest Holdings, LLC.
In addition Fitch assigned a 'BB+' rating and 'RR1' recovery
rating to Insight Midwest Holdings, LLC's proposed $2.575 billion
senior secured credit facility.
INTERSTATE BAKERIES: Glenview & Brencourt Named to Equity Panel
---------------------------------------------------------------
Charles E. Rendlen, III, the United States Trustee for Region 13,
appoints Glenview Capital Management, LLC, and Brencourt Advisors,
LLC, to serve as members of the Official Committee of Equity
Security Holders in Interstate Bakeries Corporation and its
debtor-affiliates' Chapter 11 cases.
EagleRock Capital Management, LLC, Fidelity Management & Research
and Atticus Capital, LLC, have resigned as members of the Equity
Committee.
The Equity Committee is now composed of:
(1) QVT Financial, LP
Attn: Daniel A. Gold
527 Madison Avenue, 8th Floor
New York, New York 10022
Tel: (212) 705-8800
Fax: (212) 705-8820
(2) Brandes Investment Partners
Attn: Brent Fredberg
11988 El Camina Real
San Diego, California 92130
Tel: (858) 523-3153
(3) Glenview Capital Management, LLC
Attn: John Roden
53 Davies Street
London, England
Tel: (011) 44-207-152-6336
(4) Brencourt Advisors, LLC
Attn: Daniel Chandra
600 Lexington Avenue, 8th Floor
New York 10022
Tel: (212) 313-9764
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 49; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
INTERSTATE BAKERIES: Court Okays Hilco as Business Asset Appraiser
------------------------------------------------------------------
Pursuant to Sections 327 and 328 of the Bankruptcy Code, the U.S.
Bankruptcy Court for the Western District of Missouri authorized
Interstate Bakeries Corporation and its debtor-affiliates to
employ Hilco Appraisal Services, LLC, as their business asset
appraisal consultants.
As reported in the Troubled Company Reporter on Oct. 4, 2006,
Hilco will perform an appraisal of:
-- the Debtors' machinery & equipment, including on-site
inspection at several of the Debtors' facilities, to
provide an opinion of forced liquidation value, net forced
liquidation value, orderly liquidation value and net
orderly liquidation value;
-- the Debtors' titled vehicle fleet, to provide an opinion of
forced liquidation value, net forced liquidation value,
orderly liquidation value and net orderly liquidation
value; and
-- the Debtors' inventory to provide an opinion of gross and
net orderly liquidation value, which will include modeling
the build-out of applicable work-in-process inventory to a
finished good state.
In consideration for the contemplated services to be rendered,
the Debtors will pay Hilco $380,000, plus normal and customary
travel expenses. The payment is due upon completion of the
services.
Arn Dratt, chief executive officer of Hilco, assured the Court
that his firm does not hold or represent any interest materially
adverse to the Debtors or to their estates, and is a
"disinterested person" as that term is defined under Section
101(14) of the Bankruptcy Code.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 49; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
INTERTAPE POLYMER: Moody's Cuts Rating on Senior Bond to Caa1
-------------------------------------------------------------
Moody's Investors Service downgraded the long term debt and
corporate family ratings of IPG Inc. and Intertape Polymer US Inc.
and placed these ratings under review for possible further
downgrade as a result of the company's announcement this week that
highlighted these:
* the Board of Directors has initiated a process to explore
and evaluate various strategic and financial alternatives
available to enhance shareholder value. (TD Securities has
been engaged as a financial advisor to assist with the
process);
* the company anticipates its revenue for the third quarter to
decrease to approximately $195 million from $222 million in
the second quarter of 2006; and,
* the company may not be in compliance with certain financial
covenants under the terms of its credit agreement and will
need to renegotiate these covenants, if required.
In addition, Moody's lowered IPG's speculative grade liquidity
rating to SGL-4 from SGL-3 due to concerns over the company's
compliance with the covenants under its bank credit facility.
Downgrades:
* Issuer: IPG Inc.
-- Corporate Family Rating, Downgraded to B2 from B1
-- Speculative Grade Liquidity Rating, Downgraded to SGL-4
from SGL-3
-- Senior Secured Bank Credit Facility, Downgraded to Ba3
from Ba2
* Issuer: Intertape Polymer US Inc.
-- Senior Subordinated Regular Bond/Debenture, Downgraded to
Caa1 from B3
Outlook Actions:
* Issuer: IPG Inc.
-- Outlook, Changed To Rating Under Review From Stable
-- Issuer: Intertape Polymer US Inc.
-- Outlook, Changed To Rating Under Review From No Outlook
The downgrade reflects IPG's
* weakened liquidity due to the need to renegotiate financial
covenants, if required under its bank credit facility;
* uncertainty over the company's future capital structure;
* expected weakening of earnings and cash flow metrics for the
remainder of 2006 and into 2007; and,
* CEO succession and a potential sale of the company.
The ratings also incorporate the modest scale and diversity of the
company's operations, the significant level of industry
competition, an exposure to fluctuating raw material costs, the
percentage of commodity products in its product mix, and recent
customer rationalization.
The review will examine
* the company's third quarter results and revised forecasts;
* the company's ability to manage its liquidity and amend
covenants, if required; and,
* the potential options that the Board may pursue in order to
enhance shareholder value.
Moody's expects to complete this review within 90 days. A
sustained deterioration in operating performance or credit metrics
due to a decline in product demand or other operational issues, an
increase in leverage to improve shareholder value, or the
inability to successfully amend the company's credit agreement
could result in a further downgrade of the ratings.
The downgrade of the speculative grade liquidity rating to SGL-4
reflects Moody's view that over the next twelve months bank
covenant compliance under IPG's credit agreement is uncertain as
financial covenants tighten significantly, which may require it to
obtain waivers or amendments in order to maintain access to its
revolving credit facility. Moody's SGL ratings and SGL rating
methodology do not assume that borrowers will be able to obtain
waivers or amendments to its facilities.
Intertape Polymer Group, Inc., a parent company of IPG and
Intertape Polymer US Inc., headquartered in Montreal, Quebec,
Canada, and with executive offices located in Sarasota/Bradenton,
Florida, develops, manufactures and sells specialized polyolefin
plastic and paper based packaging products and complementary
packaging systems for industrial and retail use.
JAMES CLINTON: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: James J. Clinton
400 Laguna Avenue
Key Largo, FL 33037
Bankruptcy Case No.: 06-15048
Type of Business: The Debtor previously filed for chapter 11
protection on July 2, 2004 (Bankr. S.D. Fla.
Case No. 04-16350).
Chapter 11 Petition Date: October 6, 2006
Court: Southern District of Florida (Miami)
Judge: Laurel M. Isicoff
Debtor's Counsel: Steven J. Solomon, Esq.
Adorno & Yoss LLP
2525 Ponce De Leon Boulevard, Suite 400
Miami, FL 33134
Tel: (305) 460-1000
Fax: (305) 460-1422
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 17 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Gary Doehla Mortgage Loan $268,000
c/o Robert J. Black, Esq. 707, 712, 714
Welbaum Gurnsey Hingston et al. Sharon Pl.
901 Ponce de Leon Boulevard Key Largo, FL 33037
Coral Gables, FL 33134
Nicholas Mullick, P.A. Attorney's Fees $84,021
91845 Overseas Highway
Tavernier, FL 33070
LLP Mortgage $80,000
c/o Pramco II LLC
6894 Pittsford Palymyra Road
200 Crosskeys Office Park
Suite 230
Fairport, NY 14450
Elaine Swanson Mortgage Loan $53,839
919 Ponce de Leon Boulevard 707, 712, 714
Coral Gables, FL 33134 Sharon Pl.
Key Largo, FL
Sallie Mae Student Loan $28,606
P.O. Box 8500
Wilkes Barre, PA 18773
Timothy Thomas, P.A. Attorney's Fees $26,000
Internal Revenue Service Payroll Taxes $25,000
Misty Page Personal Loan $20,000
Pramed II S.B.A. Loan $13,699
Hershoff and Lupino Attorney's Fees $9,500
First Consumers Bank Credit Card $7,755
Platinum Recovery Credit Card $5,932
Capital One Credit Card $5,900
Mariners Hospital Medical Services $4,108
Providian Credit Card $3,485
Orchard Bank Credit Card $1,500
Household Bank Credit Card $1,024
KELLWOOD COMPANY: Moody's Assigns Loss-Given-Default Rating
-----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its Ba2 Corporate Family Rating for Kellwood
Company, and its Ba3 rating on the company's various senior
unsecured notes. Additionally, Moody's assigned an LGD5 rating to
those bonds, suggesting noteholders will experience a 70% loss in
the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in St. Louis, Missouri, Kellwood Company
-- http://www.kellwood.com/-- markets apparel and consumer soft
goods.
KRONOS ADVANCED: Sherb & Co. Raises Going Concern Doubt
-------------------------------------------------------
Sherb & Co., LLP, expressed substantial doubt about Kronos
Advanced Technologies, Inc.'s ability to continue as a going
concern after auditing the Company's financial statements for the
fiscal years ended June 30, 2006 and 2005. The auditing firm
pointed to the Company's significant losses and working capital
deficiency at June 30, 2006.
The Company reported a $4,000,000 net loss for the year ended
June 30, 2006, versus a $7,094,000 loss for the year ended
June 30, 2005. The decrease in the net loss for the year ended
June 30, 2006, as compared to the prior year, was principally the
result of a $3,857,000 decrease in other income associated with
the restructuring of the Company's debt to HoMedics, USA, Inc., a
$156,000 increase in gross profit to $211,000 and a $32,000
decrease in interest expense to $489,000, partially offset by a
$959,000 or 35% increase in operating costs to $3,731,000.
The Company generates revenues through the sales of services for
design and development of Kronos devices at Kronos Air
Technologies, Inc. Revenues for the year ended June 30, 2006 were
$219,000 compared with $430,000 in the prior year. Current year
revenues were primarily from the Company's DESA and EOL license
agreements, U.S. Navy Small Business Innovative Research Phase II
contract, and U.S. Army Small Business Innovative Research Phase
II contracts.
At June 30, 2006, the Company's balance sheet showed $2,655,856 in
total assets and $5,800,274 in total liabilities, resulting in a
$3,144,418 stockholders' deficit. Total current assets at June
30, 2006 and 2004 were $666,000 and $1,818,000, respectively,
while total current liabilities for those same periods were
$3,225,000 and $5,420,000, respectively, creating a working
capital deficit of $2,559,000 and $3,602,000 at each respective
period end. This working capital deficit is primarily due to
short-term borrowings from Cornell Capital Partners and accrued
interest expense.
A full-text copy of the Company's annual report is available for
free at http://researcharchives.com/t/s?1314
Kronos Advanced Technologies Inc. --http://www.kronosati.com/--
through its wholly owned subsidiary, Kronos Air Technologies,
Inc., has developed a new, proprietary air movement and
purification system that utilizes high voltage electronics and
electrodes to silently move and clean air without any moving
parts. Kronos is actively commercializing its technology for
standalone and embedded products across multiple residential,
commercial, industrial and military markets. The Company's
business strategy includes a combination of building internal
capabilities, establishing strategic alliances and structuring
licensing arrangements. Kronos is located in Belmont,
Massachusetts.
LAZY DAYS: Moody's Assigns Loss-Given-Default Rating
----------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its B2 Corporate Family Rating for Lazy Days'
R.V. Center Inc., and its B3 rating on the company's $152 million
senior unsecured notes. Additionally, Moody's assigned an LGD4
rating to those bonds, suggesting noteholders will experience a
68% loss in the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Located on a 126-acre site outside of Tampa, Florida, Lazy
Days' R.V. Center Inc., is a single-site dealer of recreational
vehicles with a broad selection of new and previously-owned RVs.
The Company is a primary point of distribution for nine of the
leading manufacturers in the recreational vehicle retail industry.
LEVI STRAUSS: Moody's Assigns Loss-Given-Default Rating
-------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its B2 Corporate Family Rating for Levi Strauss &
Co., and its B3 rating on the company's Various senior unsecured
notes. Additionally, Moody's assigned an LGD5 rating to those
bonds, suggesting noteholders will experience a 59% loss in the
event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Levi Strauss & Co. is a branded apparel company, with sales in
more than 110 countries. Levi Strauss designs and markets jeans
and jeans-related pants, casual and dress pants, tops, jackets and
related accessories for men, women and children under its
Levi's(R), Dockers(R) and Levi Strauss Signature(R) brands. Levi
Strauss also licenses its trademarks in various countries
throughout the world for accessories, pants, tops, footwear, home
and other products.
LOUDEYE CORP: Shareholders File Securities Fraud Class Action
-------------------------------------------------------------
Kahn Gauthier Swick, LLC, has filed a class action lawsuit in the
U.S. District Court for the Western District of Washington, on
behalf of shareholders who purchased, exchanged or otherwise
acquired the common stock of Loudeye Corp. between May 19, 2003
and Nov. 9, 2005.
Contrary to the representations made by the Company during the
Class Period, Loudeye was operating well below guidance, Loudeye
was not successfully integrating its acquisitions, and the
Company's recent restructuring was failing. Also, as investors
ultimately learned, at all relevant times, Loudeye suffered from
severe financial and operational control deficiencies. The
shocking revelation of the truth about the Company had a material
and adverse impact on the price of Loudeye stock and following
each of these disclosures shares of the Company declined
precipitously -- falling from a Class Period high of almost $30
per share in late 2004, to less than $2 per share by the time that
defendants disclosed that the remaining assets of the Company
would be sold to Nokia Inc.
Loudeye and certain of its officers and directors are charged with
issuing a series of materially false and misleading statements in
violation of Section 10(b) and 20(a) of the Exchange Act and Rule
10b-5 promulgated thereunder. Particularly, the complaint alleges
that Loudeye:
(1) deceived the investing public regarding Loudeye's business,
operations, management and the intrinsic value of Loudeye
common stock;
(2) raised almost $60 million through the sale of stock and
warrants to private equity investors while materially
misrepresenting its business prospects;
(3) used almost $25 million of its artificially inflated shares
to purchase the once valuable asserts of companies such as
Overpeer Inc. and OD2 during the Class Period; and
(4) caused plaintiffs and other Class members to purchase
Loudeye common stock at artificially inflated prices.
Moreover, investors also charge that Loudeye insiders have
negotiated the merger with Nokia mainly for the purpose of
insulating themselves from liability for their prior illicit and
improper conduct.
If you wish to serve as lead plaintiff, you must move the Court no
later than 60 days from Oct. 5, 2006. Any member of the purported
class may move the Court to serve as lead plaintiff through
counsel of their choice, or may choose to do nothing and remain an
absent class member. If you would like to discuss your legal
rights, you may e-mail or call KGS, without obligation or cost to
you. You may contact Managing Partner Lewis Kahn of KGS direct,
toll free 1-866-467-1400, ext., 100, or 504-648-1850.
About Loudeye Corp.
Based in Seattle, Washington, Loudeye Corp. (Nasdaq: LOUD) --
http://www.loudeye.com/-- is a supplier across Europe of white
label music platforms and business-to-business digital media
distribution services. The Company provides end-to-end digital
media solutions, both white-label and custom, for downloading and
streaming music services to PCs, mobile phones and set top boxes.
Loudeye has over 75 live services in over 20 territories and
multiple languages across Europe and the rest of the world.
Going Concern Doubt
Moss Adams LLP in Seattle, Wash., raised substantial doubt about
Loudeye Corp.'s ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
year ended Dec. 31, 2005. The auditor pointed to the Company's
recurring operating losses, negative cash flows from operations,
accumulated deficit, and negative working capital.
LOUIS STROSNIDER: Case Summary & Seven Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Louis Welsey Strosnider, III
3049 Sand Flat Road
Oakland, MD 21550
Bankruptcy Case No.: 06-16219
Type of Business: The Debtor's affiliate, Stony Brook Development,
filed for chapter 11 protection on June 29, 2006
(Bankr. D. Md. Case No. 06-13781).
Chapter 11 Petition Date: October 8, 2006
Court: District of Maryland (Greenbelt)
Judge: Wendelin I. Lipp
Debtor's Counsel: Ronald J. Drescher, Esq.
Drescher & Associates
4 Reservoir Circle, Suite 107
Baltimore, MD 21208
Tel: (410) 484-9000
Fax: (410) 484-8120
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's Seven Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Sky Bank $2,600,000
20291 Route 19
Cranberry Square Mall
Cranberry Twp, PA 16066
K Bank Red Run Lodge $1,900,000
11407 Cronhill Drive Restaurant
Suite N 175 Red Run Road
Owings Mills, MD 21117 Oakland, MD 21550
Farm Credit $575,000
P.O. Box 187
Oakland, MD 21550
U.S. Express Leasing $45,000
300 Lanidex Plaze, 2nd Floor
Parsippany, NJ 07054
Robert Railey $44,710
106 Lake Forest Drive
Oakland, MD 21550
First United $38,500
Rodeheaver & Associates $3,569
MADISON AVENUE: Moody's Junks Ratings on $18 Million Notes
----------------------------------------------------------
Moody's Investors Service disclosed that it has lowered its
ratings on the following classes of notes issued by Madison Avenue
Structured Finance CDO I, Limited, a collateralized debt
obligation issuer:
* The $5,000,000 Class C-1 Floating Rate Notes Due 2036
-- Prior Rating: Baa3, on watch for possible downgrade
-- Current Rating: Caa2
* The $13,000,000 Class C-2 Fixed Rate Notes Due 2036
-- Prior Rating: Baa3, on watch for possible downgrade
-- Current Rating: Caa2
According to Moody's, the rating actions reflect the deterioration
in the credit quality of the transaction's underlying collateral
portfolio, the occurrence of asset defaults and par losses, and
the failure of certain coverage tests. As reported in the August
2006 trustee report, the weighted average rating factor of the
portfolio was 1091, compared to the transaction's trigger level of
500, the Class C interest coverage ratio was 106.8%, compared to
the trigger level of 107%, and the Class C overcollateralization
ratio was 99.1%, compared to the transaction's trigger level of
101.1%.
Moody's also removed these class of notes from the watchlist for
possible downgrade and has confirmed the current rating:
* The U.S. $21,000,000 Class B Floating Rate Notes Due 2036
-- Prior Rating: Aa2, on watch for possible downgrade
-- Current Rating: Aa2
MAIDENFORM BRANDS: Moody's Assigns Loss-Given-Default Rating
------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its B1 Corporate Family Rating for Maidenform
Brands, Inc. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Senior secured
revolver Ba3 Ba2 LGD2 29%
Senior secured
term loan Ba3 Ba2 LGD2 29%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Maidenform Brands, Inc. -- http://www.maidenform.com/-- is a
global intimate apparel company with a portfolio of established
and well-known brands, top-selling products and an iconic
heritage. Maidenform designs, sources and markets an extensive
range of intimate apparel products, including bras, panties and
shapewear. During the Company's 83-year history, Maidenform has
built strong equity for its brands and established a solid growth
platform through a combination of innovative, first-to-market
designs and creative advertising campaigns focused on increasing
brand awareness with generations of women. Maidenform sells its
products under some of the most recognized brands in the intimate
apparel industry, including Maidenform(R), Flexees(R),
Lilyette(R), Self Expressions(R), Sweet Nothings(R),
Bodymates(TM), Rendezvous(R) and Subtract(R). Maidenform products
are currently distributed in 48 foreign countries and territories.
MARLIN TRAINER: Case Summary & 17 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Marlin Jack Trainer
Kerri Dianne Trainer
4534 West Prickly Pear Drive
Eagle, ID 83616
Bankruptcy Case No.: 06-01250
Chapter 11 Petition Date: October 9, 2006
Court: District of Idaho (Boise)
Debtors' Counsel: D. Blair Clark, Esq.
Ringert Clark Chartered
P.O. Box 2773
Boise, ID 83701-2773
Tel: (208) 342-4591
Fax: (208) 342-4657
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtors' 17 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Key Bank Business Loan for $309,000
P.O. Box 5759 Emergent Care
Boise, ID 83705
Personal Loan: Payoff $128,000
House in Texas
Highland Capital Lending Repossessed Medical $105,600
14180 Dallas Parkway Equipment
Suite 500
Dallas, TX 75254
Internal Revenue Service 2006 Employer Taxes $73,000
Special Procedures
550 West Fort Street
Boise, ID 83724
Comp. Health Associates Physician Recruiting $60,045
Acccounts Receivables Dept.
4021 South 700 East
Salt Lake City, UT 84107
Sun Trust Student Loan $43,400
1001 Semmes Avenue
P.O. Box 27172
Richmond, VA 23261
The Student Loan Student Loan $43,000
Access Nurses Contract Nursing $39,290
CIT Technology Financial Loan $30,161
MBNA America Business Expense $14,300
Business Debt $22,000
Key Bank Overdraft Protection $15,000
17 Corporate Woods
Albany, NY 12211
SonoSite Ultrasound $35,000
Machine Lease Secured:
$20,000
Vista Staffing Solutions Physician Staffing $14,429
Contract
Chase Bank Credit Card Purchase $13,600
Parkstone Management Service Real Estate: 1000 $12,300
Newbury Road, Suites Secured:
150, 155, 160, 195 $2,500,000
Newbury Park, CA Secured Lien:
$2,504,556
American Express Credit Card Purchase $10,528
Acorn Newspapers Newspaper $9,441
Advertising
Nurse JobShop Nurse Recruiter $9,900
DDK Communications Marketing $9,000
MERRILL COMMS: Moody's Puts B3 Rating on Proposed 2nd-Lien Loan
---------------------------------------------------------------
Moody's Investors Service affirmed the B1 corporate family rating
of Merrill Corporation and assigned a B3 rating to its proposed
second lien term loan, which will fund a shareholder dividend.
The transaction increases debt and creates no additional value for
lenders, but the B1 corporate family rating can sustain the
approximately one turn increase in leverage given expectations for
continued positive free cash flow.
Merrill intends to apply approximately $50 million of the term
loan to redeem its preferred stock, which Moody's considered debt,
resulting in an approximately $150 million net increase in debt.
Pro forma for the transaction, Moody's estimates Merrill's
leverage will rise to slightly over 6 times debt-to-EBITDA from
5.2 times (based on trailing twelve months through July 31 and as
per Moody's standard adjustments), which positions Merrill weakly
in the B1 corporate family rating.
Moody's also upgraded the first lien bank rating to Ba3 due to the
introduction of junior debt to the capital structure. Consistent
with the Loss Given Default Methodology, Moody's changed Merrill's
probability of default rating to B1 from B2.
These are the rating actions:
* Merrill Communications, LLC
-- Assigned B3 rating to senior secured second lien term
loan, LGD 5, 85%
-- Upgraded to Ba3 from B1 rating on senior secured first
lien bank credit facility, LGD 3, 35%
* Merrill Corporation
-- Affirmed B1 corporate family rating
-- Changed PDR to B1 from B2
Merrill's B1 corporate family rating incorporates high financial
risk, strategic risk as Merrill continues to transform its
business model, and remaining sensitivity to the capital markets
cycle and the decline in printed material. A track record of
positive free cash flow, improved diversification, a diverse
customer base, and the considerable stream of recurring and
contractual revenue support the ratings.
Headquartered in St Paul, Minnesota, Merrill Corporation provides
document and data management services, litigation support, branded
communication programs, fulfillment, imaging, and printing. The
company recorded revenues of approximately
$900 million for the twelve months ended July 31, 2006.
MESABA AVIATION: Reports August 2006 Traffic Results
----------------------------------------------------
Mesaba Aviation, Inc., a subsidiary company of MAIR Holdings,
Inc. (NASDAQ:MAIR), reported capacity and traffic for August 2006.
Mesaba Aviation flew 127.0 million available seat miles (ASMs) in
August, which was down 50.6% year over year. Mesaba Aviation
carried 308,208 passengers in the month, which was down 38.8% year
over year generating 85.3 million revenue passenger
miles (RPMs). Passenger load factor, representing capacity
filled, remained constant year over year at 67.2%.
Separately, Mesaba Aviation announced its operating performance
for the month of August:
Mesaba Airlines
August Operating Performance
2006 2005 Change
---- ---- ------
Completion Factor 97.7% 98.2% (0.5 pts.)
Arrivals within 14 minutes 81.4% 80.9% 0.5 pts.
Mesaba Airlines
August Traffic Results
FY 2007 FY 2006 Change
------- ------- ------
ASMs (000) 127,025 257,242 (50.6%)
RPMs (000) 85,333 172,852 (50.6%)
Load Factor 67.2% 67.2% 0.0 pts
Passengers 308,208 503,772 (38.8%)
Fiscal Year to Date (5 Months)
------------------------------
FY 2007 FY 2006 Change
------- ------- ------
ASMs (000) 780,209 1,227,191 (38.9%)
RPMs (000) 551,724 866,718 (36.3%)
Load Factor 70.7% 67.5% 3.2 pts.
Passengers 1,791,959 2,540,563 (29.5%)
Calendar Year to Date (8 Months)
-------------------------------
CY 2006 CY 2005 Change
------- ------- ------
ASMs (000) 1,339,098 2,033,871 (34.2%)
RPMs (000) 922,854 1,342,139 (31.2%)
Load Factor 68.9% 67.6% 1.3 pts.
Passengers 2,873,585 3,874,073 (25.8%)
About Mesaba Aviation
Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines. The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts. Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy
News, Issue No. 24; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
NELLSON NUTRACEUTICAL: Wants Until Nov. 27 to File Chap. 11 Plan
----------------------------------------------------------------
Nellson Nutraceutical, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware to extend,
until Nov. 27, 2006, their exclusive period to file a chapter 11
plan. The Debtors also want their exclusive period to solicit
acceptances of that plan extended until Jan. 26, 2007.
The Debtors remind the Court that it is in the midst of a
Valuation Trial over their enterprise value. The Debtors tell the
Court that they need the extension in order to complete the trial
and provide the Court with sufficient opportunity to render its
ruling.
The Debtors tell the Court that the whole purpose of the Valuation
Trial is to take the first step in effectuating a successful
reorganization. If the Court finds that the Debtors are solvent,
then a plan must be structured that provides some level of return
to equity holders, otherwise, an alternative approach will be
adopted. The Debtors contend that they have not had an
opportunity to focus on a plan of reorganization.
The Debtors disclose that they have asked UBS AG, Stamford Branch
and the Official Committee of Unsecured Creditors to stipulate to
the extension of their exclusive periods. The Debtors relate that
without offering any explanation, UBS has refused to consent to
the extension.
Headquartered in Irwindale, California, Nellson Nutraceutical,
Inc., formulates, makes and sells bars and powders for the
nutrition supplement industry. The Debtors filed for chapter 11
protection on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072).
Laura Davis Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M.
Pachulski, Esq., Brad R. Godshall, Esq., and Maxim B. Litvak,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.
represent the Debtors in their restructuring efforts. Lawyers at
Young, Conaway, Stargatt & Taylor, LLP, represent an informal
committee of which General Electric Capital Corporation and
Barclays Bank PLC are members. In its Schedules of Assets and
Liabilities filed with the Court, Nellson Nutraceutical reports
$312,334,898 in total assets and $345,227,725 in total liabilities
when it filed for bankruptcy.
NEXSTAR BROADCASTING: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the US advertising and broadcasting sector, the
rating agency revised or held its probability-of-default ratings
and assigned loss-given-default ratings on these loans and bond
debt obligations issued by Nexstar Broadcasting, Inc.
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Secured Revolver Ba3 Ba2 LGD2 26%
Secured Term Loan B Ba3 Ba2 LGD2 26%
7% Sr. Subor. Notes
due 2014 B3 B2 LGD5 75%
Moody's further attached these ratings to Nexstar Broadcasting,
Inc., Mission Facility's debt:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Secured Revolver Ba3 Ba2 LGD2 26%
Secured Term Loan B Ba3 Ba2 LGD2 26%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Including pending acquisitions, Irving, Texas-based Nexstar
Broadcasting Group, Inc. (NASDAQ: NXST) currently owns, operates,
programs or provides sales and other services to 49 television
stations in 29 markets in the states of Illinois, Indiana,
Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana,
Arkansas, Alabama and New York. Nexstar's television station group
includes affiliates of NBC, CBS, ABC, FOX, and UPN, and reaches
approximately 8% of all U.S. television households.
NORTHWEST AIRLINES: Reaches Tentative Labor Agreement with AMFA
---------------------------------------------------------------
Northwest Airlines reached a tentative agreement with the Aircraft
Mechanics Fraternal Association to end an ongoing labor dispute
with the airline's technicians. A membership ratification vote
will be conducted during the next 30 days.
The agreement, in part, provides striking employees with the
option of accepting layoff status and receiving one week of layoff
pay per year of service, up to a maximum of five weeks, or
employees may leave Northwest and receive one week of separation
pay per year of service, up to a maximum of ten weeks.
Employees accepting layoff will be entitled to remain on furlough
status for two years from the signing date of the agreement.
The positions of current Northwest technicians will not be
affected by the proposed agreement. Striking employees who accept
layoff status may bid on open technician positions.
The agreement maintains the necessary $203 million in annual labor
costs savings from AMFA-represented employees.
Northwest said that if AMFA members ratified the agreement, the
airline would withdraw appeals of state unemployment compensation
determinations, thereby ensuring that members now receiving
benefits would not be subject to having those benefits recouped
should Northwest's appeal be successful.
Northwest has reached agreements on permanent wage and benefit
reduction agreements with the Air Line Pilots Association, the
International Association of Machinists and Aerospace Workers
(IAM), Aircraft Technical Support Association, the Transport
Workers Union of America, and the Northwest Airlines
Meteorologists Association. Two rounds of salaried and management
employee pay and benefit cuts have also been instituted and the
needed flight attendant labor cost savings have been implemented,
allowing Northwest to meet its goal of achieving $1.4 billion in
annual labor savings.
Since beginning its restructuring process in September of last
year, Northwest has remained focused on its plan to realize
$2.5 billion in annual business improvements in order to return
the company to profitability on a sustained basis. The
restructuring plan continues to be centered on three goals:
* resizing and optimization of the airline's fleet to better
serve Northwest's markets;
* realizing competitive labor and non-labor costs; and
* restructuring and recapitalization of the airline's balance
sheet.
Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases. When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.
OCCAM NETWORKS: Common Shares Listing Gets Nasdaq Approval
----------------------------------------------------------
Occam Networks, Inc., has received approval from The NASDAQ Stock
Market LLC to list its common shares on the NASDAQ Global Market
under the symbol "OCNW".
The Company expects to begin trading on the NASDAQ Global Market
on Oct. 9, 2006, until which time, its common shares will continue
to trade on the NASD Electronic Bulletin Board.
Based in Santa Barbara, Calif., Occam Networks Inc. (OTCBB:OCNW)
-- http://www.occamnetworks.com/-- develops and markets
innovative Broadband Loop Carrier networking equipment that enable
telephone companies to deliver voice, data and video services.
Based on Ethernet and Internet Protocol technologies, Occam's
equipment allows telecommunications service providers to
profitably deliver traditional phone services, as well as advanced
voice-over-IP, residential and business broadband, and digital
television services through a single, all-packet access network.
Going Concern Doubt
PriceWaterhouseCoopers, LLP, expressed substantial doubt about
Occam Networks, Inc.'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 continued incurrence significant operating losses and
negative cash flows from operations since inception.
ONEIDA LTD: Auditor Issued Going Concern Opinion Before Emergence
-----------------------------------------------------------------
Days before emerging from Chapter 11 on Sept. 15, 2006, Oneida
Ltd. filed its Annual Report for the year ended Jan. 28, 2006,
with the Securities and Exchange Commission.
Auditors working for BDO Seidman, LLP, raised substantial doubt
about Oneida Ltd.'s ability to continue as a going concern after
auditing its consolidated financial statements for the year ended
Jan. 28, 2006, and Jan. 29, 2005. The auditors pointed to the
Company's uncertainties inherent in the bankruptcy process,
recurring losses, ability to comply with all debt covenants under
the existing debtor-in-possession financing agreement, ability to
generate sufficient cash from operations, and obtain financing
sources to meet its future obligations.
At Jan. 28, 2006, the Company's balance sheet showed $300,171,000
in total assets and $333,468,000 in total liabilities, resulting
in a $33,297,000 stockholders' deficit. The Company had a
$3,619,000 deficit at Jan. 29, 2005.
The Company's January 28 balance sheet also showed strained
liquidity with $153,046,000 in total current assets available to
pay $281,461,000 in total current liabilities coming due within
the next 12 months.
Results of Operation
Foodservice
Net sales of Foodservice Division products during the 12 months
ended Jan. 28, 2006, primarily decreased by $30,520,000 (15.8%),
compared with the corresponding period in the prior year. The
decline in sales is attributed to reduced demand from broadline or
equipment & supply distributors, chain restaurants, and the
airline industry of approximately $15,300,000; $9,900,000; and
$4,000,000 respectively, including the impact of the Company's
decision to discontinue distribution of common glassware products.
The financial uncertainty surrounding the Company during the
fiscal year ended January 2005 resulted in certain chain
restaurants purchasing higher quantities throughout the prior year
as a hedge against potential product flow disruptions.
In addition, the uncertainty associated with the Company's
financial restructuring as well as general business trends also
resulted in certain customers opting to either dual source their
tabletop product requirements with competitors, or direct source
from foreign manufacturers, which has resulted in lower sales in
the current year, especially in the commodity flatware and
dinnerware segments.
Airline segment sales are down due to the continued financial
condition of that sector.
Chain restaurant sales have been adversely impacted by the
emergence of non-traditional competitors in the fiscal year ending
January 2006 as well as the loss of key sales personnel during the
fiscal year ended January 2005.
Consumer
Net Sales of the Consumer Division decreased by approximately
$29,455,000 (19.0%) compared with the corresponding period in the
prior year. On Aug. 28, 2004, substantially all of the assets of
the Encore Promotions subsidiary were sold and the Company entered
into a licensing agreement with the buyer, Bradshaw International,
Inc. Hence, approximately, $11,800,000 of the annual sales
decline is attributed to this sale.
Also, as part of the Company's continuing effort to restructure
the Oneida Home division, 21 stores were closed since the end of
the prior fiscal year accounting for approximately $10,200,000 of
the net sales reduction.
Retail flatware sales were down approximately $7,100,000 (12.1%)
compared with the 12 months ended January 2005. This is mainly
the result of reduced demand for the Company's products and the
Company's customer and product rationalization effort that was
implemented in early 2006.
Partially offsetting these revenue declines were increased sales
of the Company's retail dinnerware (approximately $1,600,000 or
6.2%), Special Markets sales (approximately $500,000 or 4.7%) and
Licensing revenue (approximately $900,000 or 47.4%).
International
Net sales of the International division declined by $7,231,000
(10.9%) as compared with the same period in the prior year,
primarily attributed to the Mexico and United Kingdom operations.
The decrease in sales in the United Kingdom was impacted by the
change in the Company's crystal product supplier and a general
softness in the demand for retail tabletop products.
Mexico sales volume was adversely impacted by the direct import
strategy of certain large volume customers in the Company's
commodity flatware and dinnerware segments, as well as the damage
caused by the hurricanes in the region.
The Company reported a $22,105,000 net loss available to common
stockholders for the year ended Jan. 28, 2006, compared with a
$51,258,000 net loss for the 12 months ended Jan. 29, 2005.
A full-text copy of the Company's Annual Report is available for
free at http://ResearchArchives.com/t/s?1322
About Oneida Ltd.
Headquartered in Oneida, New York, Oneida Ltd. (OTC: ONEI) --
http://www.oneida.com/-- manufactures stainless steel and
silverplated flatware for both the Consumer and Foodservice
industries, and supplies dinnerware to the foodservice industry.
Oneida also supplies a variety of crystal, glassware and metal
serveware for the tabletop industries.
The Company and its 8 debtor-affiliates filed for Chapter 11
protection on March 19, 2006 (Bankr. S.D. N.Y. Case Nos. 06-10489
through 06-10496). Douglas P. Bartner, Esq., at Shearman &
Sterling LLP represents the Debtors. Credit Suisse Securities
(USA) LLC is the Debtors' financial advisor. Scott L. Hazan,
Esq., and Lorenzo Marinuzzi, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C., represent the Official Committee of
Unsecured Creditors. Robert J. Stark, Esq., at Brown Rudnick
Berlack Israels LLP represents the Official Committee of Equity
Security Holders. When the Debtors filed for protection from
their creditors, they listed $305,329,000 in total assets and
$332,227,000 in total debts. On May 12, 2006, Judge Gropper
approved the Debtors' disclosure statement. The pre-negotiated
plan of reorganization of Oneida Ltd. was confirmed, on
Aug. 31, 2006. The Company emerged from Chapter 11 on Sept. 15,
2006, as a privately held company.
OWENS CORNING: Wants Oregon Settlement Agreement Approved
---------------------------------------------------------
Owens Corning and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to approve a settlement
agreement dated July 6, 2006, between Owens Corning, on one hand,
and Oregon State Motor Pool, Portland Motor Pool and Oregon
Department of Administrative Services, on the other.
Between 1965 and 1995, Owens Corning manufactured and sold
fiberglass tanks for the underground storage of petroleum and
water. In 1995, Owens Corning sold its Underground Storage Tank
business to Fluid Containment, Inc., now known as Containment
Solutions, Inc. As part of that prepetition transaction, Owens
Corning retained certain liability for warranty and product-
related claims with respect to the storage tanks it had
manufactured.
Owens Corning manufactured and sold the storage tanks with a
limited 30-year warranty against structural failure. Recovery
under the Warranty was subject to certain conditions and was
limited, at Owens Corning's option, to:
-- repair of a defective tank;
-- delivery of a replacement tank to the point of original
delivery; or
-- refund of the original purchase price.
Owens Corning expressly disclaimed any other warranty or other
obligation.
Since the Debtors sold the UST business prepetition and have no
ongoing UST product line, the Debtors have elected to discharge
their legal obligations under the Warranty pursuant to Section
1141(d) of the Bankruptcy Code as part of their Plan of
Reorganization, as amended.
Two Oregon entities filed claims relating to the storage tanks
they purchased prepetition from Owens Corning:
-- Portland Pool filed Claim No. 7186 for $32,700; and
-- Oregon Motor Pool filed Claim No. 7189 for $65,400.
The Claims assert amounts for the alleged replacement value of
the storage tanks in the event that Warranty claims were to arise
in the future. The Debtors objected to the allowance of the
Claims.
The Debtors and the Oregon Entities agreed to resolve the Claims,
pursuant to these terms:
a. The Oregon Administrative Services Department will receive
an allowed Class A3 OCD Convenience Claim under the Plan
for $4,000, provided that Class A3 OCD Convenience Claims
are paid in full under the Plan. In the event that Class
A3 OCD Convenience Claims are not paid in full under the
Plan, the Allowed Claim will be increased to allow the
Administrative Services Department to receive a $4,000
payment on account of its Allowed Claim;
b. The Allowed Claim is in full and final satisfaction of all
claims, liabilities or demands held by the Oregon Entities
against the Debtors relating to the storage tanks and the
associated Warranties;
c. The Allowed Claim will supersede the original amount of the
Claims and any other claims of the Oregon Entities relating
to the storage tanks and the Warranties, which Claims will
be disallowed and expunged in their entirety; and
d. The Oregon Entities release and forever discharge the
Debtors from all claims, demands, obligations, or causes of
action relating to the storage tanks or the Warranties,
except for the Allowed Claim.
The Court has already disallowed or reduced the amounts of other
Warranty Claims.
About Owens Corning
Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/--
manufactures fiberglass insulation, roofing materials, vinyl
windows and siding, patio doors, rain gutters and downspouts.
Headquartered in Toledo, Ohio, the Company filed for chapter 11
protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors. James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 140; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
OWENS CORNING: Wants to Expand Scope of Ernst & Young Employment
----------------------------------------------------------------
Owens Corning and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to further expand the scope
of Ernst & Young LLP's employment, nunc pro tunc to July 17,
2006, to include transaction service assistance with respect to
Owens Corning's joint venture transaction with Saint-Gobain.
The Debtors assert that the requested expansion is in accordance
with the Master Agreement with the firm approved by the Court on
April 5, 2006.
Previously, Owens Corning and Saint-Gobain announced plans to form
a reinforcement and composite fabrics joint venture.
Under the expanded engagement, Ernst & Young will:
-- assist with project administration required to meet the
objectives of the transaction;
-- assist with the gathering of financial data to allow Owens
Corning to prepare carved-out pro forma financial
information with respect to assets being contributed to the
joint venture and breakout financials for various pieces of
the business;
-- perform due diligence procedures on historical operating
results, historical balance sheets and forecast operating
results;
-- assist in analyzing stand-alone and transitional service
requirements related to the transaction;
-- assist in accumulating information for inclusion in data
rooms;
-- assist in gathering information for management regarding
its preparation of certain memoranda and related management
presentations;
-- assist in gathering information for management as it
addresses supplemental requests related to the transaction;
and
-- assist management in determining its technical needs
including providing information on differences between
generally accepting accounting principles in the United
States and International Financial Reporting Standards, as
well as information on fresh start accounting.
The terms of the expanded engagement are set forth as Project
Addendum 7 - Transaction Advisory Services Assistance to the
Master Agreement.
Considering that the joint venture transaction involves a French
entity and certain assets involved are located in Belgium, the
Debtors anticipate that foreign laws and rules will be
implicated.
The Project Addendum 7 provides that Ernst & Young may
subcontract a portion of certain responsibilities to any of its
foreign member firms located primarily, but not solely, in France
and Belgium in the global Ernst & Young network.
The Debtors believe that the use of the Ernst & Young Entities
will enable the firm to perform the services more efficiently and
cost-effectively.
Pursuant to the subcontracting arrangement, Ernst & Young intends
to pay the Ernst & Young Entities directly for their services and
to seek reimbursement of those payments from the Debtors.
Ernst & Young's current hourly rates are:
Partner $600
Executive Director $540
Senior Manager $510
Manager $410
Senior $290
Staff $175
For Ernst & Young Entities personnel based in Europe, hourly
rates will be 10% higher at each level of professional. The
Debtors will be obligated to pay all applicable taxes incurred in
connection with services rendered by the Ernst & Young Entities.
About Owens Corning
Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/--
manufactures fiberglass insulation, roofing materials, vinyl
windows and siding, patio doors, rain gutters and downspouts.
Headquartered in Toledo, Ohio, the Company filed for chapter 11
protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors. James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 140; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
OXFORD IND: Moody's Assigns Loss-Given-Default Rating
-----------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its Ba3 Corporate Family Rating for Oxford
Industries, Inc., and its B1 rating on the company's $200 million
senior unsecured notes. Additionally, Moody's assigned an LGD5
rating to those bonds, suggesting noteholders will experience a
75% loss in the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Oxford Industries, based in Atlanta, Georgia designs and markets
men's and women's apparel under its owned brands, which include
Ben Sherman, Tommy Bahama, Arnold Brant and Oxford Golf, licensed
brands including Orvis Signature and Nautica, and supplies a
variety of private label apparel brands in multiple channels.
PANAVISION INC: Acquires Plus 8 Digital
---------------------------------------
Panavision Inc. has acquired Plus 8 Digital, one of North
America's largest digital camera rental companies.
"This transaction is another step forward in Panavision's strategy
of diversifying our camera product offerings generally and our
digital offerings specifically and broadens our reach to
cinematographers working in all segments of our business," said
Bob Beitcher, President and CEO, Panavision. "We are very
fortunate to combine our efforts with the employees of Plus 8
Digital as well as Marker Karahadian, the company's founder and
owner."
Plus 8 Digital operates five digital camera rental facilities in
Burbank, New York, Houston, Vancouver and Toronto. "I am excited
that Plus 8 will now have the strength and reputation of
Panavision driving the business," said Karahadian. "The Plus 8
team and I will increase the high quality service and attention
our customers are used to, because they will also benefit from
Panavision's global network. On a personal note, I am also
looking forward to working with the Panavision team to ensure that
Panavision and Plus 8 play an important part in the continued
evolution of digital capture in our industry."
Founded in 1988, Plus 8 Digital's reputation in the industry has
been built on a history of technical innovation and quality
service. Plus 8 was among the first rental facilities in North
America to introduce Carl Zeiss HD Digiprimes, the Thomson Viper,
and Panasonic Varicam. Their extensive HD inventory includes over
20 Viper cameras. Recent film and television productions for
which Plus 8 Digital supplied cameras include "Miami Vice" and
"Everybody Hates Chris."
About Panavision
Located in Woodland Hills, California Panavision Inc. --
http://www.panavision.com/-- designs and manufactures high-
precision camera systems, including film and digital cameras,
lenses and accessories for the motion picture and
television industries.
* * *
As reported in the Troubled Company Reporter on Sept. 28, 2006,
Standard & Poor's Ratings Services affirmed its loan and recovery
ratings on the senior secured first-lien bank facility of
Panavision Inc. (B-/Stable/--), following the announcement that
the company will increase the add-on portion of its first-lien
term loan by $30 million.
PANAVISION INC: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the US advertising and broadcasting sector, the
rating agency affirmed its B2 corporate family rating on
Panavision, Inc.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these loans and
bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Secured Revolver B1 Ba3 LGD3 31%
Secured First
Lien Term Loan B1 Ba3 LGD3 31%
Secured Second
Lien Term Loan B3 Caa1 LGD5 83%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
About Panavision
Located in Woodland Hills, California Panavision Inc. --
http://www.panavision.com/-- designs and manufactures high-
precision camera systems, including film and digital cameras,
lenses and accessories for the motion picture and
television industries.
PEABODY ENERGY: Moody's Rates Proposed $900 Mil. Sr. Notes at Ba1
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 senior unsecured rating
to Peabody Energy Corporation's proposed $900 million senior notes
issue. At the same time Moody's affirmed Peabody's Ba1 corporate
family rating and the Ba1 senior unsecured rating on its existing
notes. The ratings reflect both the overall probability of
default of the company, to which Moody's assigns a PDR of Ba1, and
a loss given default of LGD 4 for the senior unsecured notes.
Moody's also affirmed Peabody's SGL-1 Speculative Grade Liquidity
rating. The rating outlook remains negative.
The proceeds of the $900 million senior notes, along with drawings
under the revolver and term loan, are being used to fund Peabody's
acquisition of Australian coal miner, Excel Corporation, for $1.9
billion, including assumption of debt and fees.
Assignments:
* Issuer: Peabody Energy Corporation
-- Senior Unsecured Regular Bond/Debenture, Assigned Ba1
The Ba1 corporate family rating reflects Peabody's
* currently low leverage ratio and good earnings ratios,
* diversified low-cost operations,
* extensive and geographically diversified reserves of high
quality coal,
* strong management, and,
* portfolio of long-term coal supply agreements with a large
number of electricity generation customers.
However, the rating also reflects the $1.9 billion increase in
debt to be incurred to fund the Excel acquisition, which will
increase the company's pro forma June 30, 2006 debt to EBITDA
ratio to 3.2x from 2.1x based on an annualization of Excel's most
recent six month EBITDA. The rating also considers the volatile
nature of the coal mining business, and operating and development
cost pressures that could constrain Peabody's free cash flow.
Moody's last rating action on Peabody was in September 2006 when
it assigned a Ba1 senior unsecured rating to the revolver and term
loan A, and raised the senior unsecured rating to Ba1.
Peabody Energy Corporation, headquartered in St. Louis, Missouri,
is the world's largest private-sector coal company with revenues
in 2005 of $4.6 billion.
PERFORMANCE TRANSPORTATION: Powers' Hearing Continues on Wednesday
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
will continue the hearing on Chris Powers' motion to lift the
automatic stay at 10:00 a.m. on Wednesday, Oct. 11, 2006.
As reported in the Troubled Company Reporter on Aug. 3, 2006, Mr.
Powers wants the Court to lift the automatic so he can pursue an
action against Debtor Hadley Auto Transportation. Mr. Powers
asserts injuries from a motor vehicle accident and commenced an
action in the Superior Court in and for the County of Maricopa, in
Arizona, against, Hadley Auto on Sept. 17, 2004.
Mr. Powers argues that pursuant to the terms of the Debtors'
insurance policy with Discover Property & Casualty Insurance
Company, the Debtors are entitled to full indemnification in
connection with any damages awarded to him in the Arizona Action.
Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York,
tells the Court that this is the only justification Mr. Powers
provides for modifying the automatic stay. For this reason, the
Debtors asked the Court to deny Mr. Powers' lift-stay plea.
Mr. Graber informs the Honorable Michael J. Kaplan that the
Debtors' policy coverage is subject to a $500,000 self-funded
retention. Thus, the Debtors are obligated to pay the first
$500,000 of any defense costs incurred or damages awarded against
them or their employees in connection with the Arizona Action.
The payment of the costs at this time will only deplete the
debtors' assets and decrease the potential distribution to be
provided to their other unsecured creditors, Mr. Graber argued.
"If the Motion is granted, it could open the floodgates to the
filing of other motions for relief from the stay, causing the
Debtors to have to expend significant resources defending against
the Action and the numerous other actions across the United
States," Mr. Graber points out. "As a result, the Debtors'
opportunity to formulate a viable plan of reorganization, which
the automatic stay is meant to provide, would be jeopardized."
The Official Committee of Unsecured Creditors supports the
Debtors' objection.
Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America. The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment. The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.
Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts. David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors. When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts. (Performance Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PERFORMANCE TRANSPORT: Court Continues Stay v. Crumlich to Nov. 18
------------------------------------------------------------------
The Honorable Michael J. Kaplan of the U.S. Bankruptcy Court for
the Western District of New York continues the stay on Donald W.
Crumlich, Jr.'s personal injury action against Debtor Leaseway
Motorcar Transport Company until Nov. 18, 2006.
Judge Kaplan also orders Mr. Crumlich's counsel to consult the
Court on or before Nov. 21, 2006, regarding the effectiveness of
filing an answer.
As reported in the Troubled Company Reporter on Aug. 25, 2006, the
Court modified the automatic stay to permit Mr. Crumlich to pursue
his bodily injury action against Leaseway Motorcar before the
Connecticut State Court.
Mr. Crumlich asserts a personal injury claim against Leaseway
believing that it maintains a liability insurance with a pre-
accident deductible of $1,000,000. Mr. Crumlich was a passenger
in one of the three vehicles involved in a June 2004 accident, one
of which was owned by Leaseway. Janet G. Burhyte, Esq., at Gross
Shuman Brizdle & Gilfillan, P.C., in Buffalo, New York, estimated
Mr. Crumlich's personal injury claim not to exceed $1,000,000.
Performance Transportation Services, Inc., and its debtor-
Affiliates had asked the Court to deny Mr. Crumlich's request.
The Debtors had argued that if the Court grants Mr. Crumlich's
request, he would receive preferential treatment of his claim in
direct violation of the principle that similarly situated
creditors are to be treated similarly. The Debtors had claimed
that they will obligated to pay the first $1,000,000 of any
defense costs incurred or damages awarded in connection with Mr.
Crumlich's personal injury action.
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. 14; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PERRY ELLIS: Moody's Assigns Loss-Given-Default Rating
------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its B1 Corporate Family Rating for Perry Ellis
International, Inc., and its B3 rating on the company's
$150 million senior subordinated notes. Additionally, Moody's
assigned an LGD5 rating to those bonds, suggesting noteholders
will experience a 78% loss in the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Perry Ellis International Inc., based in Miami, Florida, designs,
sources, markets and licenses a portfolio of brands including
Perry Ellis, Jantzen, John Henry, Cubavera, Munsingwear, Original
Penguin and Farah. The company also operates 38 retail locations
including 3 Original Penguin locations.
PGMI INC: McKennon Wilson Raises Going Concern Doubt
----------------------------------------------------
McKennon, Wilson & Morgan LLP expressed substantial about PGMI,
Inc.'s ability to continue as a going concern after auditing the
Company's financial statements for the fiscal years ended
June 30, 2006 and 2005. The auditing firm pointed to the
Company's losses, working capital deficiency at June 30, 2006 and
commitments to fund new store expansions.
PGMI incurred a $2,098,887 net loss for the year ended
June 30, 2006, versus net loss of $1,625,313 for the year ended
June 30, 2005. This increase in net loss can be attributed to
approximately $2,333,000 of one time reverse acquisition fees
incurred during the year June 30, 2006 and increased income tax
expense in the amount of $640,000 due to increased taxable income
in the Company's Japan operations.
Consistent with the gaming industry, the Company reports revenues
as the net of wagers less payouts. During the year, gaming
revenues increased from $21,533,976 in 2005 to $22,696,178 in
2006, an increase of 5.4 %.
Gross wagers increased by $95,118 or 0.05% from the year ending
June 30, 2005 to $187,972,786 in the year ending June 30, 2006.
The new store that opened in March 2005 contributed $28,892,726 to
the increase in wagers. Four stores increased their gross wagers
to a total of $29,541,223 for the year ended June 30, 2006, while
nine stores decreased their gross wagers to $15,819,076.
Payouts decreased by $1,067,084 or 0.6% from the year ending June
30, 2005 to $165,276,608 in the year ending June 30, 2006.
Payouts as a percentage of wagers slightly decreased from 88.5% in
2005 to 87.9% in 2006 due to a high payout rate campaign to
promote the grand opening of two new stores in the year ended
June 30, 2005, while no stores opened in the year ended
June 30, 2006.
At June 30, 2006, the Company's balance sheet showed $60,240,196
in total assets and $52,177,597 in total liabilities.
A full-text copy of the Company's annual report is available for
free at http://researcharchives.com/t/s?1318
PGMI is a provider of pachinko gaming entertainment in Japan. The
Company traces its origin to its founder Gakushin Kanemoto's
pachinko business in 1951. It later incorporated in Japan as
Marugin Co., Ltd in 1972. The management team brings many decades
of experience in the pachinko industry to PGMI. Currently the
company operates 13 locations in Japan.
PHILLIPS-VAN HEUSEN: Moody's Assigns Loss-Given-Default Rating
--------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. Canadian Retail sector, the rating agency
confirmed its Ba3 Corporate Family Rating for Phillips Van Heusen
Corporation. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$100 million senior
secured notes Ba3 Ba1 LGD2 20%
Various senior
unsecured notes B1 B1 LGD5 73%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporatefamily will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Phillips-Van Heusen Corporation -- http://www.pvh.com/-- owns and
markets the Calvin Klein brand worldwide. It is a shirt company
that markets a variety of goods under its own brands: Van Heusen,
Calvin Klein, IZOD, Arrow, Bass and G.H. Bass & Co., Geoffrey
Beene, Kenneth Cole New York, Reaction Kenneth Cole, BCBG Max
Azria, BCBG Attitude, Sean John, MICHAEL by Michael Kors, Chaps
and Donald J. Trump Signature.
PLATFORM LEARNING: Gets Court Nod for $750,000 Interim Financing
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Platform Learning Inc. authority, on an interim basis, to
advance up to $750,000 from the $4,750,000 postpetition financing
Ascend Venture Group LLC agreed to lend provide to the Debtor.
The Debtor will use the funds to pay down the remainder of its
prepetition indebtedness to Silicon Valley Bank and pay for the
its operating expenses.
The Court also permitted the Debtor to use the cash collateral
securing repayment of its obligations to Ascend Venture, pursuant
to a 13-week budget, which is available for free at:
http://researcharchives.com/t/s?1325
As adequate protection, the Debtor grants Ascend Venture valid,
binding, enforceable and perfected liens in all of its assets.
Subordinated creditors are granted valid, binding, enforceable and
perfected replacement liens in all of the collateral securing
repayment of the Debtor's prepetition indebtedness.
Additionally, subordinated creditors will have a $100,000 claim
against the carve-out and any other estate assets available to pay
professional fees, which claim will share pro-rata with the
allowed pre-Sept. 30, 2006 claims of professional persons until
the professional persons have recovered 80% of their allowed pre-
Sept. 30, 2006 claims and the subordinated creditors have received
$80,000, at which time the subordinated creditors will be deemed
to have an additional $50,000 expense of administration claim
which will share pro rata from recoveries from the estate
available to pay professional fees and other administrative
claims.
The Court scheduled the final hearing considering the Debtor's
request on Oct. 23, 2006, 10:00 a.m., at the United States
Bankruptcy Court for the Southern District of New York, One
Bowling Green, New York City, New York.
Based in Broad Street, New York, Platform Learning Inc. --
http://www.platformlearning.com/-- provides supplemental
educational services through its Learn-to-Succeed tutoring
program to students attending public schools. The Company filed
for chapter 11 protection on June 21, 2006 (Bankr. S.D.N.Y. Case
No. 06-11391). David M. Bass, Esq., and Eric W. Sleeper, Esq., at
Herrick Feinstein LLP represent the Debtor in its restructuring
efforts. Edward Joseph LoBello, Esq., at Blank Rome LLP
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it listed
total assets of $21,026,148, and total debts of $36,933,490.
POE FINANCIAL: Wants Court to Establish General Bar Date
--------------------------------------------------------
Poe Financial Group, Inc., and its debtor-affiliates ask the
Honorable Catherine Peek McEwen of the U.S. Bankruptcy Court for
the Middle District of Florida in Tampa to set a bar date within
which proofs of claim or interest may be filed.
The Debtors wants the Court to establish a bar date within 30 days
of service of the Court's order.
The Debtors believe that it is in the best interest of the
consumer creditors in the Debtors' cases to file their claims
while the case is still fresh in their minds.
Additionally, the Debtors would like to establish a claims bar
date at the outset to assist the Debtors in case administration
and in the development of a plan of reorganization. The Debtors
and their retained professionals will need to negotiate the terms
of a plan.
To intelligently analyze expected distributions and the
feasibility of the plan, the Debtors need to ascertain the full
nature, extent, and scope of the claims against them. An early
bar date will not prejudice any party in interest.
The Debtors believe that the progress of these cases will be
facilitated by the establishment of the bar date, as the
identification of the nature and amount of claims is integral to
the formulation of a plan.
Headquartered in Tampa, Florida, Poe Financial Group, Inc.
-- http://www.poefinancialgroup.com/-- specializes in insuring
coastal properties assumed from Florida's high-risk insurance
pool. The Debtor and three of its affiliates file for chapter 11
protection on Aug. 18, 2006 (Bankr. M.D. Fla. Case No. 06-04288).
Noel R. Boeke, Esq., Leonard Gilbert, Esq., and Rod Anderson,
Esq., at Holland & Knight, LLP, represent the Debtors. When
the Debtors filed for protection from their creditors, they
estimated assets and debts of more than $50 million.
PONY EXPRESS: Case Summary & 13 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Pony Express Greenhouse, LLC
P.O. Box 243
Gothenburg, NE 69138
Bankruptcy Case No.: 06-41335
Type of Business: The Debtor operates a greenhouse & nursery, and
grows fruit and vegetable produce.
See http://www.ponyexpressgreenhouse.com/
Chapter 11 Petition Date: October 9, 2006
Court: District of Nebraska (Lincoln)
Debtor's Counsel: Jocelyn Walsh Golden, Esq.
Knudsen Berkheimer Richardson Endacott
1248 O Street, Suite 1000
Lincoln, NE 68508
Tel: (402) 475-7011
Fax: (402) 475-8912
-- and --
Wayne E. Griffin, Esq.
406 North Dewey
North Platte, NE 69103
Tel: (308) 534-3526
Fax: (308) 532-8649
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 13 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Greentex Greenhouse BV Judgment Lien on $384,605
Jocelyn golden Real Estate
1248 O Street, Suite 1000
Lincoln, NE 68508
Travelers Indemnity and Premium $14,097
Affiliates
3531 Collection Center Drive
Chicago, IL 60693
MESA Oil, Inc. Fuel $11,700
Department 1581
Denver, CO 80291-1581
Estes, Inc. Goods and Services $7,900
P.O. Box 99227
Fort Worth, TX 76199-0227
Dawson County Treasurer 2005 Personal $6,850
P.O. Box 339 Property Taxes
Lexington, NE 68850
Premium Assignment Corp. Premium $5,038
Biobest USA Inc. Goods and Services $2,840
EPCO Carbon Dioxide Goods and Services $2,375
OmniLytics, Inc. Goods and Services $1,052
DKleaning Services $482
Agribusiness and Food Assoc. Unknown
City of Gothenburg TIFF Financing Unknown
Obligations
Nebraska Economic Equipment Unknown
Development Corp.
PROTECTION ONE: Fitch Affirms & Withdraws Low-B & Junk Ratings
--------------------------------------------------------------
Fitch Ratings affirmed and simultaneously withdrawn these ratings
for Protection One Alarm Monitoring Inc.:
-- Issuer Default Rating 'B-'
-- Senior Secured Term Loan 'B+/RR2'
-- Senior Subordinated Debt 'CCC+/RR5'
All debt ratings for this issuer were also withdrawn. Fitch will
no longer provide rating coverage of Protection One.
PROTECTIVE COMMERCIAL: Moody's Lifts Ratings on 3 Certs. to Ba2
---------------------------------------------------------------
Moody's Investors Service upgraded the ratings of 12 classes and
affirmed the ratings of six classes of Protective Finance
Corporation II, Commercial Mortgage FASIT Certificates, Series I:
Class A-1-1, $46,932,176, Fixed, affirmed at Aa2
Class A-1-2, $17,125,626, Fixed, affirmed at Aa2
Class A-1-3, $44,657,861, Fixed, affirmed at Aa2
Class A-2-1, $8,069,768, Fixed, affirmed at Aa2
Class A-2-2, $19,978,382, Fixed, affirmed at Aa2
Class A-2-3, $1, Fixed, affirmed at Aa2
Class B-1, $21,938,172, Fixed, upgraded Aa2 from A2
Class B-2, $2,651,212, Fixed, upgraded to Aa2 from A2
Class B-3, $8,619,834, Fixed, upgraded to Aa2 from A2
Class C-1, $17,550,537, Fixed, upgraded to Aa3 from Baa2
Class C-2, $4,306,694, Fixed, upgraded to Aa3 from Baa2
Class C-3, $11,351,987, Fixed, upgraded to Aa3 from Baa2
Class D-1, $26,325,806, Fixed, upgraded to A1 from Ba2
Class D-2, $6,460,039, Fixed, upgraded to A1 from Ba2
Class D-3, $4,113,286, Fixed, upgraded to A1 from Ba2
Class E-1, $13,162,903, Fixed, upgraded to Ba2 from B2
Class E-2, $3,230,020, Fixed, upgraded to Ba2 from B2
Class E-3, $5,746,556, Fixed, upgraded to Ba2 from B2
As of the September 25, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 66.4%
to $284.2 million from $845.4 million at securitization. The FASIT
consists of Certificates that are collateralized by a static pool
of 211 loans or loan groups ranging in size from less than 1.0% to
5.0% of the pool with the top 10 loan groups representing 23.3% of
the pool. The loans were originated by Protective Life Insurance
Company.
One loan has been liquidated from the pool resulting in a realized
loss of approximately $121,000. Three loans, representing 2.1% of
the pool, are in special servicing. Moody's estimates aggregate
losses of approximately $900,000 for the specially serviced loans.
Moody's was provided with year-end 2004 and 2005 operating results
for 99.8% and 46.5% of the pool, respectively. The pool's
performance has been stable since securitization. Moody's is
upgrading the above listed Certificates due to increased
subordination levels and stable pool performance.
Approximately 50.0% of the loans are secured by single tenant
retail properties. The top three exposures are CVS Corporation
(11.0%; Moody's senior unsecured rating Baa2, stable outlook),
Ingles Markets, Inc. (9.5%; Moody's LT corporate family rating B1,
stable outlook) and Rite Aid Corporation (7.4%; Moody's senior
unsecured rating Caa1, on review for possible downgrade).
Approximately 95.0% of the loans are self amortizing over their
respective loan terms.
The pool's collateral is a mix of retail (86.1%), industrial
(8.7%), office (3.1%) and multifamily (2.1%). The collateral
properties are located in 35 states. The highest state
concentrations are Georgia (12.3%), South Carolina (9.1%),
Tennessee (8.1%), Texas (7.0%) and Alabama (6.4%). All of the
loans are fixed rate.
PUREBEAUTY INC: Committee Hires Winston & Strawn as Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
gave the Official Committee of Unsecured Creditors of PureBeauty
Inc. and Pure Salons Inc.'s bankruptcy cases, permission to employ
Winston & Strawn LLP, as their bankruptcy counsel.
The firm is expected to:
a) provide legal advice to the committee with respect to its
duties and powers in these chapter 11 cases;
b) consult with the committee and the Debtors concerning the
administrative of these chapter 11 cases;
c) assist the committee in its investigation of the acts,
conducts, assets, liabilities, and financial condition of
the Debtors, operation of the Debtors' businesses, and
the desirability of continuing or selling such business
and assets, and any other matters relevant to these
chapter 11 cases or to the formulation of a plan;
d) assist the committee in the evaluation of claims against
the estates, including analysis of and possible
objections to the validity, priority, amount,
subordination, or avoidance of claims and transfers of
property in consideration of such claims;
e) assist the committee in participating in the formulation
of a plan, including the committee's communications with
unsecured creditors concerning the plan and the
collecting of and filling with the Court acceptances or
rejections to such a plan;
f) assist the committee with any effort to request the
appointment of a trustee or examiner;
g) advise represent the committee in connection with
administrative and substantive matters arising in these
chapter 11 cases, including the obtaining of credit, the
sales of assets, and the rejection or assumption of
executory contracts and unexpired leases;
h) appear before this Court, any other federal court, state
court or appellate courts; and
i) perform other legal services as may be required and which
are in the interests of the unsecured creditors.
The firm's professionals billing rates are:
Designation Hourly Rate
----------- -----------
Partners $360 - $765
Associates $225 - $470
Legal Assistants $105 - $230
To the best of the Debtors knowledge, the firm is a "disinterested
person", as that term defined in Section 101(14) of the Bankruptcy
Code.
PureBeauty, Inc. -- http://www.purebeauty.com/-- operated 48
retail stores and salons offering professional hair care and
skincare services, featuring a leading assortment of professional
and prestige personal care products. PureBeauty also operated six
"brand" stores, providing customers with a variety of aspirational
products and services. PureBeauty Inc. and Pure Salons, Inc., an
affiliate, filed for chapter 11 protection on April 18, 2006
(Bankr. C.D. Calif. Case No. 06-10545). Stacia A. Neeley, Esq.,
at Klee, Tuchin, Bogdanoff & Stern LLP represented the Debtors.
The Debtors' Official Committee of Unsecured Creditors selected
Eric E. Sagerman, Esq., and David J. Richardson, Esq., at Winston
& Strawn, LLP, as its counsel. When the Debtors filed for
protection from their creditors, they estimated $14 million in
assets and $82 million in debts.
QUIKSILVER INC: Moody's Assigns Loss-Given-Default Rating
---------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its Ba3 Corporate Family Rating for Quiksilver,
Inc., and upgraded to Ba3 its B1 rating on the company's $400
million senior unsecured notes. Additionally, Moody's assigned an
LGD4 rating to those bonds, suggesting noteholders will experience
a 58% loss in the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Quiksilver, Inc. (NYSE:ZQK) designs, produces and distributes a
diversified mix of branded apparel, wintersports and golf
equipment, footwear, accessories and related products.
RADIO ONE: Moody's Assigns LGD5 Rating to 8-7/8% Senior Notes
-------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the US advertising and broadcasting sector, the
rating agency affirmed its Ba3 corporate family rating on Radio
One, Inc.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these loans and
bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Secured Revolver Ba2 Ba1 LGD2 25%
Secured Term Loan Ba2 Ba1 LGD2 25%
6-3/8% Sr. Sub Notes
Due 2013 B2 B1 LGD5 81%
8-7/8% Sr. Sub. Notes
Due 2011 B2 B1 LGD5 81%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Radio One, Inc. -- http://www.radio-one.com/-- is the nation's
seventh largest radio broadcasting company based on 2004 net
broadcast revenue and the largest radio broadcasting company that
primarily targets African-American and urban listeners. Radio One
owns and/or operates 70 radio stations located in 22 urban markets
in the United States and reaches more than 13 million listeners
every week. Radio One also owns approximately 36% of TV One, LLC,
a cable/satellite network programming primarily to
African-Americans, which is a joint venture with Comcast
Corporation and DIRECTV. Additionally, Radio One owns 51% of the
common stock of Reach Media, Inc., owner of the Tom Joyner Morning
Show and other businesses associated with Tom Joyner, a leading
urban media personality, and programs "XM 169 The POWER" on XM
Satellite Radio.
RIM SEMICONDUCTOR: Incurs $15.1 Million Net Loss in Third Quarter
-----------------------------------------------------------------
Rim Semiconductor Company filed its third quarter financial
statements for the three months ended July 31, 2006, with the
Securities and Exchange Commission.
The Company incurred a $15.1 million net loss on $1,025 of net
revenues for the three months ended July 31, 2006, compared to a
$897,920 net loss on $10,360 of net revenues in 2005.
At July 31, 2006, the Company's balance sheet showed $11.0 million
in total assets and $27.1 million in total liabilities, resulting
in a $16.1 million stockholders' deficit.
The Company's July 31 balance sheet also showed strained liquidity
with $3.1 million in total current assets available to pay
$26 million in total current liabilities coming due within the
next 12 months.
A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1312
Going Concern Doubt
As reported in the Troubled Company Reporter on Feb. 2, 2006,
Marcum & Kliegman LLP expressed substantial doubt about Rim
Semiconductor's ability to continue as a going concern after it
audited the Company's financial statements for the fiscal years
ended Oct. 31, 2005, and 2004. The auditing firm pointed to the
Company's $3,145,391 working capital deficiency at Oct. 31, 2005.
The Company's October 31 balance sheet showed strained liquidity
with $407,512 in current assets available to pay $3,552,903 of
current liabilities coming due within the next 12 months.
About Rim Semiconductor
Headquartered in Portland, Oregon, Rim Semiconductor Company fka
New Visual Corporation -- http://www.rimsemi.com/-- is an
emerging fabless communications semiconductor company. It has
made available an advanced technology that allows data to be
transmitted at greater speed and across extended distances over
existing copper wire.
R.J. FITZ: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: R.J. Fitz, L.P.
dba Hooters of Boston
222 Friend Street
Boston, MA 02114
Bankruptcy Case No.: 06-13542
Debtor-affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Albany H Group, Inc. 06-13544
Binghamton H Group, Inc. 06-13546
Buffalo H Group, Inc. 06-13547
Cape Entertainment Management, Inc. 06-13549
Clay H Group, Inc. 06-13550
Manchester H Group, Inc. 06-13551
Nashua H Group, Inc. 06-13552
Rochester H Group, Inc. 06-13553
Salem H Group II, Inc. 06-13554
Syracuse H Group, Inc. 06-13555
Warwick Group, Inc. 06-13556
New England Wings, Inc. 06-13557
Type of Business: Each Debtor is a franchise of the Atlanta-based,
restaurant chain Hooters of America, Inc. It
has over 435 Hooters locations in 46 states and
18 countries. See http://www.hooters.com/
R.J. Fitz, L.P. filed for chapter 11 protection
on September 21, 2000 (Bankr. D. Mass. Case No.
00-16329).
Chapter 11 Petition Date: October 6, 2006
Court: District of Massachusetts (Boston)
Judge: Joan N. Feeney
Debtors' Counsel: Melvin S. Hoffman, Esq.
Looney & Grossman, LLP
101 Arch Street
Boston, MA 02110
Tel: (617) 951-2800
Estimated Assets: $100,000 to $1 Million
Estimated Debts: $1 Million to $100 Million
The Debtors did not file a list of their 20 largest unsecured
creditors.
SAINT VINCENTS: Sandra Lowery Wants to Pursue Rule 2004 Probe
-------------------------------------------------------------
Sandra Lowery seeks authority from the U.S. Bankruptcy Court for
the Southern District of New York to:
-- conduct an examination of Saint Vincents Catholic Medical
Centers of New York, its debtor-affiliates' and third
Parties pursuant to Rule 2004 of the Federal Rules of
Bankruptcy Procedure; and
-- join in all future discovery proceedings with Great
American Insurance Company and obtain copies of all
previously exchanged discovery pursuant to a March 24, 2006
Court-approved stipulation between the Debtors and GAIC.
Larry Rosenfeld, Esq., at Seidner, Rosenfeld & Guttentag, LLP, in
Babylon, New York, relates that as creditor and payee of an
appeal bond issued on behalf of, or at the request of, the
Debtors, Ms. Lowery asks the Court to compel the Debtors to
produce documentation and information, among other things,
related to:
(a) restricted use accounts or other set asides or accounts
purportedly created by the Debtors relevant to a judgment
in Ms. Lowery's favor against Dr. Henry Lamaute; and
(b) the insurance and self-insurance programs implemented by
Saint Vincent Catholic Medical Centers with respect to its
medical malpractice liabilities.
Mr. Rosenfeld explains that the information sought is necessary
to properly inform and prepare Ms. Lowery to participate in all
hearings and to protect her rights with respect to the Debtors
and their various insurance and self-insurance programs. In
addition, the administration of the bankruptcy proceedings will
not further be delayed by the request.
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. 35 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SAINT VINCENTS: Lori Kruesi Wants to Pursue Civil Action
--------------------------------------------------------
Lori Kruesi, as parent and natural guardian of Lauren Kruesi, an
infant under the age of 14, asks the U.S. Bankruptcy Court for the
Southern District of New York to modify the automatic stay, nunc
pro tunc to July 5, 2005, to allow her:
(a) to proceed with her action against Saint Vincent's
Catholic Medical Centers of New York, Staten Island
Service Division, John Does, M.D., Teresa Lemma, M.D., and
Pediatric Health Care, P.C., pending before the Supreme
Court for the state of New York, Richmond County; and
(b) to take any action necessary to settle and litigate her
claim solely to liquidate and fix the amount due on her
claim and counterclaim.
Christine H. Black, Esq., at Robinson Brog Leinwand Greene
Genovese & Gluck P.C., in New York, asserts that Ms. Kruesi is
entitled to a lifting of the stay because:
-- the defense costs attributable to Ms. Kruesi's Action
against the Staten Island facility are covered by
commercial insurance;
-- Ms. Kruesi duly filed a proof of claim prior to the
March 16, 2006 bar date; and
-- the State Court Action does not seek to impose liability
against any house staff for which the Debtors would be
required to indemnify, and which indemnification costs are
not covered by commercial insurance.
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. 35 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SALEM COMMS: Moody's Assigns Loss-Given-Default Rating
------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the US advertising and broadcasting sector, the
rating agency affirmed its Ba3 corporate family rating Salem
Communications Holding Corporation.
At the same time, the rating agency also held its B2 probability-
of-default rating on the Company's 7-3/4% senior subordinated
notes due 2010, and attached an LGD5 rating on these notes,
suggesting noteholders will experience an 88% loss in the event of
a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Camarillo, California, Salem Communications
Corporation -- http://www.salem.cc/-- is a radio broadcasting
company focused on Christian and family-themed programming. In
addition to its radio properties, Salem owns Salem Radio
Network(R), which syndicates talk, news and music programming to
approximately 1,900 affiliates; Salem Radio Representatives(TM), a
national radio advertising sales force; Salem Web Network(TM), a
leading Internet provider of Christian content and online
streaming; and Salem Publishing(TM), a leading publisher of
Christian-themed magazines.
SHAW GROUP: Plans to Join Toshiba in Westinghouse Acquisition
-------------------------------------------------------------
The Shaw Group Inc. disclosed that, through a 100% owned special
purpose acquisition subsidiary, Nuclear Energy Holdings, L.L.C.,
it will join with Toshiba Corp. to acquire Westinghouse Electric
Co.
Earlier in the year, Toshiba was declared the successful bidder
to acquire Westinghouse from British Nuclear Fuels Limited for
$5.4 billion. Toshiba has formed two acquisition companies (a
U.S. entity and a U.K. entity) for the purpose of making the
acquisition. At closing, expected to occur in October 2006,
Toshiba will own 77% of each of the Westinghouse Acquisition
Companies, Nuclear Energy 20%, and Ishikawajima-Harima Heavy
Industries Co., Ltd. 3%. Nuclear Energy's participation in this
transaction is conditioned upon successful and timely closing of
a $1.08 billion private placement bond financing and other
customary closing conditions.
Nuclear Eenergy intends to finance its acquisition with funding
it is seeking to raise through a private placement of Japanese
Yen-denominated bonds with an approximate principal amount of
$1.08 billion, currently being marketed in Japan and outside
the U.S. These limited-recourse Bonds are expected to have a
term of approximately 6.5 years.
In connection with the acquisition, Nuclear Eenergy will have an
option to sell all or part of its 20% ownership interest in the
Westinghouse Acquisition Companies to Toshiba prior to the
maturity of the Bonds. The Bonds will be secured by the assets
of and 100% of the membership interests in NEH, its shares in
the Westinghouse Acquisition Companies, along with the
corresponding Toshiba option, a US$36 million letter of credit
established by Shaw for the benefit of Nuclear Energyand the
Interest LCs. The Bonds will have no further recourse to Shaw.
In connection with the issuance of the Bonds, Shaw will
establish one or more letters of credit for the benefit of
Nuclear Energy in an aggregate amount to cover Bond interest
payments for a specified period and certain other transaction
costs and expenses. The initial Interest LC is expected to be
approximately $91 million in the aggregate to cover interest
until the beginning of the option period, although the exact
amount will depend upon the Yen coupon rate of the Bonds. Other
than the Principal LC and the Interest LC delivered at the
closing of the Bonds, Shaw is not required to provide any
additional letters of credit or cash to or for the benefit of
Nuclear Energy.
In addition, in connection with the Westinghouse transaction,
Shaw will execute a Commercial Relationship Agreement that
provides Shaw with certain exclusive opportunities to perform
engineering, procurement and construction services on future
Westinghouse AP 1000 Nuclear Power Plants, along with other
commercial opportunities, such as the supply of piping for those
units. Westinghouse technology forms the basis for 63 of 104
licensed reactors in the United States and roughly half of those
worldwide. Westinghouse's AP1000 passive Generation III design,
has obtained Design Certification from the United States Nuclear
Regulatory Commission and is the current technology selection
for 10 proposed new units in the U.S. Westinghouse and Shaw are
consortium partners in proposing the AP1000 technology for 4 new
reactors expected to be built in China. Shaw has performed as
architect-engineer on 17 nuclear units and is currently
completing the construction restart of the Browns Ferry Unit 1
in Alabama for the Tennessee Valley Authority.
Shaw has received approval from its lenders to amend its
revolving credit agreement to allow for the investment in
Westinghouse and to allow for an increase in the facility from
its current $750 million to up to $1 billion. The company
expects to make effective $100 million of the approved
increase, thus increasing the capacity of the facility to
$850 million, in conjunction with this amendment. Subject to
outstanding amounts, the entire credit facility, as amended,
would be available for performance letters of credit, and up to
$525 million would be available for revolving credit loans and
financial letters of credit until Nov. 30, 2007, and $425
million thereafter. The amendment and increase will be effective
upon closing of the Westinghouse transaction.
The Shaw Group Inc. -- http://www.shawgrp.com/-- is a leading
global provider of technology, engineering, procurement,
construction, maintenance, fabrication, manufacturing, consulting,
remediation, and facilities management services for government and
private sector clients in the energy, chemical, environmental,
infrastructure and emergency response markets. Headquartered in
Baton Rouge, Louisiana, with over $3 billion in annual revenues,
Shaw employs approximately 20,000 people at its offices and
operations in North America, South America, Europe, the Middle
East and the Asia-Pacific region.
* * *
As reported on the Troubled Company Reporter on Oct 06, 2006,
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating and other ratings for The Shaw Group Inc. on
CreditWatch with negative implications.
"The CreditWatch placement followed followed the company's
announced agreement to take a 20% ownership interest in the
$5.40 billion acquisition, led by Toshiba Corp. (BBB/Watch
Neg/A-2), of Westinghouse Electrical Company Co. from British
Nuclear Fuels Ltd.," said Standard & Poor's credit analyst Dan
Picciotto.
SILICON GRAPHICS: LGE Wants $75 Million Damage Claim Allowed
------------------------------------------------------------
LG Electronics, Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York to allow Claim No. 623 in its
entirety because Silicon Graphics, Inc., and its debtor-affiliates
failed to:
-- rebut the presumption that the Claim is valid by failing to
cite any factual or legal support for their assertions; and
-- provide any factual support and mention the individual
claims by number in alleging that LGE's patents are invalid
because they fail to comply with the patent laws.
In August 2006, LG Electronics, Inc., filed Claim No. 623 against
Silicon Graphics, Inc., for unsubstantiated and unliquidated
damages, for not less than $75,000,000.
LGE also filed Claim Nos. 619, 620, 621, 622, 624, 625, 626, 627,
628, 629, 630, 631 and 632 against each of the other Debtors.
Each proof of claim asserts an unsubstantiated, unsecured, non-
priority, contingent, and unliquidated claim relating to the
Debtors' alleged infringement of patents owned by LGE.
As reported in the Troubled Company Reporter on Sept. 13, 2006,
Adam P. Strochak, Esq., at Weil, Gotshal & Manges LLP, in New
York, argued that LGE's claims must be disallowed in their
entirety because:
-- LGE has failed to demonstrate even a cursory understanding
of the Debtors' products and has made no effort to clarify
or particularize its allegations;
-- the Patents and each related claim is invalid as they fail
to comply with the provisions of the patent laws, including
Sections 102, 103, and 112 of Title 35 of the United States
Code, which statutes govern the conditions for
Patentability;
-- the Claims are barred under the doctrines of prosecution
history estoppel, laches, and equitable estoppel;
-- LGE is estopped from claiming that the Patents cover or
include any product or service that the Debtors
manufacture, sell, or provide; and
-- the Claims have been exhausted, and LGE has granted to the
Debtors an implied license to practice the invention.
Lee S. Attanasio, Esq., at Sidley Austin LLP, in New York, tells
the Court that LGE has provided prima facie evidence of, among
others, SGI's historic and ongoing infringement through the proof
of claim filed in the Debtors' Chapter 11 cases.
Mr. Attanasio explains that because of the fundamental nature of
the LGE Patents, LGE has been aggressively protecting its
intellectual property rights by conducting an industry-wide
licensing program. Yet, the Debtors ignore the fact that
sophisticated companies in the computer industry, including
Intel, Matsushita, NCR, and Lucent, have all taken a license from
LGE to practice the LGE Patents, he says.
Furthermore, Mr. Attanasio argues that the Debtors' assertions
concerning other alleged affirmative defenses are without merit
for several reasons:
i. LGE can establish that SGI has literally infringed the LGE
Patents, hence, prosecution history estoppel is
inapplicable. The Debtors also fail to explain how the
doctrine of prosecution history estoppel could possibly
limit the scope of LGE's asserted claims;
ii. The Debtors fail to cite any evidence that would support
the "laches" assertion, and LGE is aware of none. Indeed,
attempting to negotiate a license and litigation with third
parties are among the kind of activity which excuses delay
in filing suit;
iii. The Debtors also cite no evidence in support of their
asserted "equitable estoppel" defense. The entire course
of negotiations and correspondence between LGE and SGI
expressly show that LGE intended and still intends to
enforce the LGE Patents against SGI; and
iv. The Debtors' "patent exhaustion" and "implied license"
defenses have already been rejected by the United States
Court of Appeals for the Federal Circuit.
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. Judge Lifland confirms the Debtors' Plan
of Reorganization on Sept. 19, 2006. When the Debtors filed for
protection from their creditors, they listed total assets of
$369,416,815 and total debts of $664,268,602. (Silicon Graphics
Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
SILICON GRAPHICS: Stay Modified Allowing Horrock to Pursue Claim
----------------------------------------------------------------
Dr. Giles Horrocks allegedly sustained personal injuries when a
car driven by Heidi Racanelli -- an employee of Silicon Graphics,
Inc. -- hit his bicycle.
As of the Debtor's chapter 11 filing, Dr. Horrocks has not
commenced any action against the Debtors for his alleged injuries.
Since the Debtors maintain domestic auto liability insurance with
Federal Insurance Company -- which coverage is limited to
$1,000,000 per occurrence -- the Debtors and Dr. Horrocks
stipulate that in return for Dr. Horrocks' agreement to waive any
claims against the Debtors in their Chapter 11 cases, the
automatic stay is modified solely to permit Dr. Horrocks to
proceed against the Insurance Coverage.
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. Judge Lifland confirms the Debtors' Plan
of Reorganization on Sept. 19, 2006. When the Debtors filed for
protection from their creditors, they listed total assets of
$369,416,815 and total debts of $664,268,602. (Silicon Graphics
Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
SIRALOP DEVELOPMENT: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Siralop Development, LLC
16211 North Scottsdale Road, Suite 498
Scottsdale, AZ 85254
Bankruptcy Case No.: 06-03246
Debtor-affiliate that filed a separate chapter 11 petition on
January 25, 2006:
Entity Case No.
------ --------
Scott Alan Rubin 06-00170
Debtor-affiliates that filed separate chapter 11 petitions on
March 8, 2006:
Entity Case No.
------ --------
Lynsco Properties, LLC 06-00572
Rubin Properties, Inc. 06-00573
S&H Construction LLC 06-00574
Scott Rubin Construction Company 06-00575
Sculie Properties LLC 06-00577
Soho Construction LLC 06-00578
Soho Financing LLC 06-00579
Soho Fitness LLC 06-00580
Soho Offices LLC 06-00581
Soho Warehouse LLC 06-00582
The SAR Building Group Inc. 06-00584
Village Holding Company Ltd. 06-00585
Debtor-affiliate that filed a separate chapter 11 petition on May
30, 2006:
Entity Case No.
------ --------
Kennedy Road, Ltd. 06-01586
Chapter 11 Petition Date: October 6, 2006
Court: District of Arizona (Phoenix)
Judge: George B. Nielsen Jr.
Debtor's Counsel: D. Lamar Hawkins, Esq.
Hebert Schenk P.C.
4742 North 24th Street, Suite 100
Phoenix, AZ 85016
Tel: (602) 248-8203
Fax: (602) 248-8840
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
SONIC AUTOMOTIVE: Moody's Assigns Loss-Given-Default Ratings
--------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its Ba3 Corporate Family Rating for Sonic
Automotive, Inc. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$550 million
secured revolver Ba2 Ba2 LGD3 31%
$275 million
subordinated notes B2 B1 LGD5 79%
$130 million
subordinated
convertible notes B3 B2 LGD6 93%
$160 million
subordinated
convertible notes B3 B2 LGD6 93%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Charlotte, North Carolina, Sonic Automotive, Inc.
-- http://www.sonicautomotive.com/-- is one of the largest
automotive retailers in the United States operating 177 franchises
and 38 collision repair centers.
ST. JOHN KNITS: Moody's Assigns Loss-Given-Default Rating
---------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency assigned its B2 Corporate Family Rating for St. John Knits
International, Inc. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Senior secured
revolver B1 B1 LGD3 31%
Senior secured
term loan B1 B1 LGD3 31%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Irvine, California, St. John Knits International,
Inc., designs and produces fine women's clothing. Its core
product is classic women's business, casual, and leisure knit-
wear. St. John also designs, produces, and markets sportswear,
markets fragrance, and licenses swimwear. Marie and Robert Gray
founded St. John in 1962. The Company distributes wholesale to
leading high-end retailers and through its own network of
boutiques and outlets in the U.S. The Company also supplies
specialty stores in 27 foreign countries.
TOWER AUTO: Tower Mexico Wants Grupo Proeza Complaint Sustained
---------------------------------------------------------------
Tower Automotive Mexico, a Tower Automotive Inc. debtor-affiliate,
asks the U.S. Bankruptcy Court for the Southern District of New
York to sustain its complaint against Grupo Proeza, S.A. DE C.V.
"The plain language of an agreement between the parties in this
case calls for the arbitration of all disputes," John F.
Hartmann, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
asserts. "Proeza cannot evade that agreement through the
invocation of foreign proceedings or artful submissions
disclaiming the Bankruptcy Court's jurisdiction."
Mr. Hartmann contends that Grupo Proeza's attempts to use the
forum selection clause of Metalsa, S.A. de C.V.'s amended by-laws
as evidence that Grupo Proeza and Tower Mexico had agreed to
abandon their previous understandings and not to arbitrate their
disputes is spurious and refuted by facts and controlling law.
Mr. Hartmann notes that in the Mexican complaint filed by Grupo
Proeza, the company concedes that the sole purpose for the
December 1997 amendments was to change Metalsa's corporate form.
Therefore, the amendments had nothing to do with the parties'
previous agreements with respect to dispute resolution.
Mr. Hartmann further argues that the Bankruptcy Court has subject
matter jurisdiction over Tower Mexico's complaint, and personal
jurisdiction over Grupo Proeza, because:
* there is no question that the outcome of the dispute
between Grupo Proeza and Tower Mexico will have a
significant effect on R.J. Tower Corporation's estate;
* Tower Mexico's interest in Metalsa will constitute a
substantial part of the value distributed to R.J. Tower's
creditors under an eventual Debtors' plan of
reorganization;
* Grupo Proeza's contacts with the U.S. are sufficient to
justify the exercise of personal jurisdiction; and
* tt is reasonable for the Bankruptcy Court to exercise
personal jurisdiction over Grupo Proeza since it cannot
identify an actual interest Mexico has in litigating its
dispute with Tower Mexico.
Should the Bankruptcy Court find its jurisdictional allegations
lacking, however, Tower Mexico asks the Court to grant it the
right to amend its complaint or take jurisdictional discovery.
Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer, including
BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan,
Toyota, Volkswagen and Volvo. Products include body structures
and assemblies, lower vehicle frames and structures, chassis
modules and systems, and suspension components. The Company and
25 of its debtor-affiliates filed voluntary chapter 11 petitions
on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through
05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq.,
Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet,
Esq., at Kirkland & Ellis, LLP, represent the Debtors in their
restructuring efforts. Ira S. Dizengoff, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they listed $787,948,000 in total assets and
$1,306,949,000 in total debts. (Tower Automotive Bankruptcy News,
Issue No. 46; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
TRANS MAX: Court Finds Flying Car Plan Isn't Feasible
-----------------------------------------------------
The Honorable Bruce A. Markell of the U.S. Bankruptcy Court for
the District of Nevada held a hearing to consider confirmation of
Trans Max Technologies, Inc.'s chapter 11 plan. Judge Markell
held that the proposed plan was not feasible and could not be
confirmed. Judge Markell's decision is published at 2006 WL
2571986.
The Debtor's chapter 11 plan was premised on its ability to
utilize a new type of engine technology and a patent that its
principal already held in order to act as a royalty licensing
vehicle to license a design for flying cars, that were to be
produced entirely with funds supplied by unspecified outside
investors. The debtor had entered into only preliminary
discussions with unspecified third parties to provide post-
bankruptcy financing.
"Any sane investor would have serious and legitimate questions
regarding the viability of Trans Max's technology," Judge Markell
says, "and Trans Max's inability to provide sufficient answers to
those questions reaffirms a lack of feasibility in this case.
Trans Max's technology may be promising, but the idea of
developing a flying car based on that technology in three years .
. . could be considered somewhat implausible. Even more
implausible is the notion that Trans Max could develop such a car
without incurring a cent of debt."
Trans Max Technologies, Inc., designed and manufactured electronic
ignition systems for street vehicles, race cars, boats, scientific
and industrial applications, space and aviation applications, and
clean burning fuel applications. The Company discontinued
operations upon filing a chapter 11 petition on Sept. 8, 2005
(Bankr. D. Nev. 05-19263). John J. Laxague, Esq., at McDonald
Carano Wilson LLP represents the Company. When the Company filed
for protection from its creditors, it had $1,819,578 in total
assets and $2,406,003 in total debts as of June 30, 2005.
VERILINK CORP: Exclusive Plan-Filing Period Extended to October 31
------------------------------------------------------------------
The Honorable Jack Caddell of the U.S. Bankruptcy Court for the
Northern District of Alabama in Decatur gave Verilink Corporation
and its debtor-affiliates until Oct. 31, 2006, to exclusively file
their plan of reorganization.
Judge Caddell also gave the Debtors until Jan. 2, 2007, to
exclusively solicit acceptances of their plan.
The Debtors have been actively negotiating with the Official
Committee of Unsecured Creditors over a potential plan of
reorganization. The Debtors are also soliciting input and
comments about the plan and disclosure statement from the
Committee and the Investment Group.
The Debtors said that incorporating those comments may take some
time.
Headquartered in Hunstville, Alabama, Verilink Corporation --
http://www.verilink.com/-- was a provider of next-generation
broadband access solutions for today's and tomorrow's networks.
The Company developed, manufactured, and marketed a broad suite of
products that enable carriers and enterprises to build converged
access networks to cost-effectively deliver next-generation
communications services to their end customers. The Company and
its debtor-affiliate, Larscom Inc., filed for chapter 11
protection on April 9, 2006 (Bankr. N.D. Ala. Case No. 06-80566
& 06-80567). Robert McCay Dearing Mercer, Esq., at Powell
Goldstein LLP, represents the Debtors. Darryl S. Laddin, Esq., at
Arnall Golden Gregory LLP and Jayna Partain Lamar, Esq., at
Maynard, Cooper & Gale, P.C., give legal advice to the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they listed total assets of
$37,221,000 and total debts of $23,913,000.
WARD PRODUCTS: Hires Glass & Associates as Restructuring Advisor
----------------------------------------------------------------
The Honorable Thomas J. Tucker of the U.S. Bankruptcy Court for
the Eastern District of Michigan in Detroit authorized Ward
Products, LLC, to employ Glass & Associates, Inc., as its
restructuring advisor.
Glass & Associates will:
a. provide financial analysis in support of negotiating
modifications to the existing credit arrangements;
b. identify strategic corporate restructuring alternatives;
c. assist with negotiations with key customers and other
constituents;
d. address the Debtor's challenges, both immediate and
long-term; and;
e. provide any other services as the Debtor may request.
John DiDonato, a principal at Glass & Associates, disclosed the
Firm's hourly rates:
Designation Hourly Rate
----------- -----------
Principals $375 to $575
Case Directors $325 to $450
Senior Consultant $250 to $380
Consultants $200 to $300
Clerical/Administrative Staff $75 to $125
The primary professionals expected to work on the Debtor's case
are:
Professional Designation Hourly Rate
------------ ----------- -----------
John DiDonato Principal in Charge $450
John Gburek Director $350
Sam Heigle Director $350
Sandy Edlein Quality Principal $450
Ken Ollwerther Consultant $275
Jeff Lansworth Consultant $275
In addition to its hourly fees and the reimbursement of its
expenses, Glass & Associates will be entitled to earn and receive
an Incentive Fee to be determined at the discretion of the
Company's Board of Directors.
Mr. DiDonato assured the Court that the Firm represents no
interest adverse to the Debtor's estate with respect to the
matters upon which it is to be engaged.
Headquarted 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., and Mark E. Freedlander, Esq., at
McGuireWoods, L.L.P, represent the Debtor. Christopher J.
Battaglia, Esq., at Halperin Battaglia Raicht, LLP, and Andrew
Kochanowski, Esq, at Sommers & Schwartz, P.C., represent the
Official Committee of Unsecured Creditors. In its schedules of
assets and liabilities, the Debtor listed $81,489,758.70 in total
assets and $29,586,153.44 in total debts.
WARNACO GROUP: Moody's Assigns Loss-Given-Default Ratings
---------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency confirmed its Ba3 Corporate Family Rating for Warnaco
Group, Inc. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$175 million senior
secured revolver Ba2 Ba1 LGD2 22%
$180 million senior
secured term loan Ba2 Ba1 LGD2 22%
$205 million senior
unsecured notes B1 B1 LGD5 78%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
The Warnaco Group, Inc., headquartered in New York, is a leading
apparel company engaged in the business of designing, marketing
and selling intimate apparel, menswear, jeanswear, swimwear, men's
and women's sportswear and accessories under such owned and
licensed brands as Warner's(R), Olga(R), Lejaby(R), Body Nancy
Ganz(TM), Speedo(R), Anne Cole Collection(R), Cole of
California(R) and Catalina(R) as well as Chaps(R) sportswear and
denim, JLO by Jennifer Lopez(R) lingerie, Nautica(R) swimwear and
Calvin Klein(R) men's and women's underwear, men's accessories,
men's, women's, junior women's and children's jeans and women's
and juniors swimwear.
WCI COMMUNITIES: Moody's Downgrades Senior Notes' Rating to B1
--------------------------------------------------------------
Moody's lowered the ratings of WCI Communities, Inc., including
its corporate family rating to Ba3 from Ba2 and the ratings on its
senior subordinated notes to B1 from Ba3. This concludes the
review that was commenced on July 24, 2006. The ratings outlook
is negative.
The downgrade was triggered by a series of increasingly
unfavorable developments regarding WCI's new orders, cancellation
rates, and revenue and earnings generation, which could be
exacerbated if the company's additional share repurchases are not
balanced with sizable reductions in outstanding debt to address
appropriately its relatively high current debt leverage--now in
the mid-60% area.
The negative outlook reflects Moody's expectation that earnings in
2007 will likely decline significantly from 2006 levels, perhaps
testing breakeven levels, and that covenant compliance may become
challenging if the company's unfavorable operating environment is
protracted; and that management's ability to build liquidity and
reduce debt leverage in the face of a downturn of unknown breadth
and duration is as yet unproven
From the time Moody's put WCI on review for possible downgrade on
July 24th, company news has been unfavorable. On August 9th, the
company announced greatly reduced orders, revenues and earnings
for its second quarter ended June 30, 2006, and reduced earnings
guidance for the full year. Adjusted debt leverage at quarter end
was nearly 63%. On September 8th, WCI increased its share
repurchase authorization from two million to five million shares.
Also on September 8th, the company announced that pursuant to EITF
No. 06-8, it could be required to report its tower business on the
completed contract method of accounting beginning in 2008 vs. the
currently-used percentage of completion method, which could have
the effect of causing wide swings in the timing of reported
revenues and earnings in the tower segment (although the cash flow
of this segment is not expected to be impacted significantly by
this accounting rule).
On September 15th, WCI entered into a 10b5 agreement with
Citibank, N.A., encompassing a series of capped one-year call
option transactions for up to five million shares of WCI stock. On
October 3rd, the company announced that third quarter earnings
would be substantially below prior guidance, that new orders had
dropped 80% company-wide and essentially to zero in its tower
segment, and that the high-rise tower cancellation rates had
doubled, from an average of 2% to 4% of deliveries.
Going forward, the ratings could be reduced again if the company
were unwilling or unable to reduce debt leverage at year end to
the mid-to-high 50% range, if earnings turned sharply negative, or
if covenant compliance became problematic. The ratings outlook
could stabilize if the company were to place greater emphasis on
building liquidity and reducing outstanding debt, were to stay
profitable in the coming quarters, and were able to meet its debt
covenant tests with some headroom.
These ratings were affected:
* Corporate family rating changed to Ba3 from Ba2
* Probability of default rating changed to Ba3 from Ba2
* Senior sub debt ratings changed to B1 from Ba3
* LGD assessment and rate on the senior sub debt unchanged at
LGD5, 81%.
Headquartered in Bonita Springs, Florida, WCI Communities, Inc. is
a fully integrated homebuilding and real estate services company
with 60 years of experience in the design, construction, and
operation of leisure-oriented, amenity-rich master planned
communities targeting affluent homebuyers. Revenues and earnings
for 2005 were $2.6 billion and $186 million, respectively.
WHERIFY WIRELESS: Malone & Bailey Express Going Concern Doubt
-------------------------------------------------------------
Malone & Bailey, PC, expressed substantial doubt about Wireless,
Inc.'s ability to continue as a going concern after it audited the
Company's financial statements for the fiscal year ended June 30,
2006. The auditing firm pointed to the Company's recurring losses
from operations and insufficient working capital to meet its
operating needs.
The Company incurred an $81.3 million net loss on $154,936 of net
revenues for the fiscal year ended June 30, 2006, compared to a
$12.4 million net loss on zero revenues in 2005.
At June 30, 2006, the Company's balance sheet showed $3.7 million
in total assets and $15.1 million in total liabilities, resulting
in an $11.3 million stockholders' deficit.
The Company's June 30 balance sheet also showed strained liquidity
with $2.2 million in total current assets available to pay $15.1
million in total current liabilities coming due within the next 12
months.
A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1315
About Wherify
Based in Redwood Shores, California, Wherify Wireless, Inc. --
http://www.wherifywireless.com/-- develops patented wireless
location products and services for family safety, communications,
and law enforcement. The company's portfolio of intellectual
property includes its proprietary integration of the US
Government's Global Positioning System and wireless communication
technologies; its patented back-end location service; the
Wherifone(TM) GPS locator phone which provides real-time location
information and lets families with pre-teens, seniors, or those
with special needs, stay connected and in contact with each other;
and its FACES(R) industry-leading facial composite technology,
which is currently being used by thousands of public safety
agencies worldwide.
WILLIAM CARTER: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. and Canadian Retail sector, the rating
agency assigned its B1 Corporate Family Rating for William Carter
Company, and confirmed its B3 ratings on the company's
$125 million senior secured revolver and $500 million senior
secured term loan. Additionally, Moody's assigned LGD3 ratings to
those loans, suggesting creditors will experience a 32% loss in
the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's
alpha-numeric scale. They express Moody's opinion of the
likelihood that any entity within a corporate family will default
on any of its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Atlanta, Georgia, Carter's Inc.,
-- http://www.carters.com/-- is the nation's largest branded
marketer of children's apparel for ages newborn to six years old.
The Carter's brand is sold through over 4,000 department and
national chain stores and through more than 180 Carter's- operated
retail stores. Carter's Child of Mine and Just One Year brands
are available at Wal-Mart and Target, respectively.
The William Carter Company markets baby and toddler apparel.
WILLOWBEND NURSERY: Taps Kenneth Freeman as Bankruptcy Counsel
--------------------------------------------------------------
Willowbend Nursery, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Northern District of Ohio for permission
to employ Kenneth J. Freeman Co., LPA, as their bankruptcy
counsel.
Kenneth Freeman will:
a. give the Debtors legal advice with respect to their powers
and duties in the continued management of the property of
the Debtors as debtors-in-possession; and
b. perform all other necessary legal services for the Debtors
as debtors-in-possession which may be necessary.
The Debtors tell the Court that the firm's professionals bill:
Professional Hourly Rate
------------ -----------
Kenneth J. Freeman, Esq. $250
Paul S. Kuzmickas $175
The Debtors disclose that the firm has received a $20,000
retainer.
Mr. Freeman assures the Court that his firm does not hold any
interest adverse to the Debtors or their estates.
Mr. Freeman can be reached at:
Kenneth J. Freeman, Esq.
Kenneth J. Freeman Co., LPA
515 Leader Building
526 Superior Avenue
Cleveland, OH 44114-1903
Tel: (216) 771-9980
Fax: (216) 771-9978
Headquartered in Perry, Ohio, Willowbend Nursery, Inc. --
http://www.willowbendnursery.com/-- owns and operates a nursery
and grow quality bareroot plants & shrubs. The Company and its
affiliates filed for chapter 11 protection on Sept. 20, 2006
(Bankr. N.D. Ohio Case No. 06-14353). When the Debtors filed for
protection from their creditors, they listed estimated assets
between $1 million and $10 million and estimated debts between
$10 million and $50 million.
WINN-DIXIE: Court Grants Protective Order on Visagent Discovery
---------------------------------------------------------------
The Honorable Jerry A. Funk of the U.S. Bankruptcy Court for the
Middle District of Florida grants Winn-Dixie Stores, Inc., and its
debtor-affiliates' request and instructs them to affix to each
page of the documents a "confidential" legend.
Judge Funk reminds Visagent Corporation that it can only use the
Confidential information solely for the purpose of contested
matters and adversary proceedings in the Debtors' Chapter 11
cases and that it is prohibited from disclosing the information
to any third party.
Each party will remain bound by the terms of the Court order
until the later of:
(1) entry of the Court order which is no longer subject to
appeal, reconsideration, or re-argument;
(2) the Chapter 11 Plan is confirmed;
(3) the Chapter 11 cases are converted to Chapter 7 of the
Bankruptcy Code; or
(4) conclusion of contested matters and adversarial
proceedings between the parties.
Upon the Termination Date, Visagent is instructed to return all
confidential information to the Debtors or certify in writing
that all documents containing confidential information have been
destroyed.
The parties will be entitled to specific performance and
injunctive or other equitable relief as a remedy for any breach
of the Court order.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates 527 stores in Florida,
Alabama, Louisiana, Georgia, and Mississippi. The Company,
along with 23 of its U.S. subsidiaries, filed for chapter 11
protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063,
transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos.
05-03817 through 05-03840). D.J. Baker, Esq., at Skadden
Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders,
Esq., and Brian C. Walsh, Esq., at King & Spalding LLP,
represent the Debtors in their restructuring efforts.
Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 53; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* PwC Appoints Javier Rubinstein as Global General Counsel
----------------------------------------------------------
PricewaterhouseCoopers appointed Javier H. Rubinstein as Global
General Counsel.
Mr. Rubinstein, 43, has been a partner of Mayer, Brown, Rowe & Maw
LLP, an international law firm with more than 1,400 attorneys in
the United States and Europe. Mr. Rubinstein succeeds Lawrence W.
Keeshan, who has retired from the organization. Mr. Keeshan had
been Global General Counsel since 1995.
A native of Argentina, Mr. Rubinstein has maintained an
international practice throughout his legal career. He is a
leading expert in the field of international commercial,
investment and sports-related arbitration. He has represented
private and public clients from North America, Latin America,
Europe and Asia in complex disputes before the world's leading
arbitral institutions, including the International Centre for the
Settlement of Investment Disputes, the ICC International Court of
Arbitration and the Court of Arbitration for Sport. Through his
practice, Mr. Rubinstein has developed a thorough understanding of
the legal systems in place throughout the world. In the past
several years, he has participated in arbitrations involving the
laws of Argentina, Greece, Mexico, Panama, Peru, Switzerland, the
United Kingdom, France, Israel and the United States. He also has
represented accounting firms in litigation and arbitration matters
throughout the world.
"Javier Rubinstein's high-profile international experience and
background in complex arbitration and litigation around the world
give him the necessary perspective to lead the legal strategy for
PricewaterhouseCoopers' global organization," said Michael Gagnon,
PwC Global Managing Partner, Risk and Quality. "He will be a
superb advisor to and advocate for our global network and its
member firms."
In addition to his international practice, Mr. Rubinstein also has
maintained an active litigation practice in the U.S. particularly
in the area of securities litigation. He has handled numerous
jury trials and appeals before state and federal appellate courts,
including matters before the U.S. Supreme Court.
Mr. Rubinstein was named one of the "World's Leading Experts in
Commercial Arbitration" by Euromoney Magazine in 2006. He also is
currently rated by Chambers and Partners (UK) as one of top
international arbitration specialists both globally and in the
United States.
Javier Rubinstein began his career with Mayer Brown in 1989, after
obtaining his Bachelor's Degree from the University of Michigan, a
Master's Degree in Public Policy from the John F. Kennedy School
of Government at Harvard University, and his J.D. degree from the
Georgetown University Law Center. For the past four years, he has
led Mayer Brown's Chicago litigation group. Since 1997, Mr.
Rubinstein also has served as a Lecturer in Law at the University
of Chicago Law School, teaching courses in International
Arbitration and Supreme Court Litigation. He lives in Northbrook,
Illinois.
PricewaterhouseCoopers -- http://www.pwc.com/-- provides
industry-focused assurance, tax and advisory services to build
public trust and enhance value for its clients and their
stakeholders. More than 130,000 people in 148 countries across
our network share their thinking, experience and solutions to
develop fresh perspectives and practical advice.
"PricewaterhouseCoopers" refers to the network of member firms of
PricewaterhouseCoopers International Limited, each of which is a
separate and independent legal entity.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
AFC Enterprises AFCE (46) 172 5
Alaska Comm Sys ALSK (17) 565 24
Alliance Imaging AIQ (23) 682 26
AMR Corp. AMR (508) 30,752 (1,392)
Atherogenics Inc. AGIX (124) 211 165
Biomarin Pharmac BMRN 49 469 307
Blount International BLT (123) 465 126
CableVision System CVC (5,362) 9,714 (395)
Centennial Comm CYCL (1,062) 1,434 33
Cenveo Inc CVO 24 941 128
Choice Hotels CHH (118) 280 (58)
Cincinnati Bell CBB (705) 1,893 18
Clorox Co. CLX (156) 3,616 (123)
Cogdell Spencer CSA 126 370 N.A.
Columbia Laborat CBRX 10 29 23
Compass Minerals CMP (63) 664 161
Crown Holdings I CCK 144 7,287 174
Crown Media HL CRWN (393) 1,018 133
Deluxe Corp DLX (90) 1,330 (235)
Denny's Corporation DENN (258) 500 (68)
Domino's Pizza DPZ (609) 395 (4)
Echostar Comm DISH (512) 9,105 1,589
Emeritus Corp. ESC (111) 721 (29)
Emisphere Tech EMIS 2 43 19
Empire Resorts I NYNY (26) 62 (3)
Encysive Pharm ENCY (64) 93 56
Foster Wheeler FWLT (38) 2,224 (93)
Gencorp Inc. GY (98) 1,017 (3)
Graftech International GTI (166) 900 250
H&E Equipment HEES 226 707 22
I2 Technologies ITWO (55) 211 (9)
ICOS Corp ICOS (36) 266 116
IMAX Corp IMAX (21) 244 33
Immersion Corp. IMMR (20) 47 32
Incyte Corp. INCY (55) 375 155
Indevus Pharma IDEV (147) 79 35
J Crew Group Inc. JCG (83) 362 102
Koppers Holdings KOP (95) 625 140
Kulicke & Soffa KLIC 65 398 230
Labopharm Inc. DDS (92) 143 105
Level 3 Comm. Inc. LVLT (33) 9,751 1,333
Ligand Pharm LGND (238) 286 (155)
Lodgenet Entertainment LNET (66) 262 15
McDermott Int'l MDR 125 3,181 64
McMoran Exploration MMR (21) 434 (38)
NPS Pharm Inc. NPSP (164) 248 168
New River Pharma NRPH 0 93 68
Omnova Solutions OMN (2) 366 72
ON Semiconductor ONNN (75) 1,423 279
Qwest Communication Q (2,826) 21,292 (2,542)
Riviera Holdings RIV (29) 214 7
Rural/Metro Corp. RURL (91) 299 45
Rural Cellular RCCC (525) 1,441 151
Sepracor Inc. SEPR (109) 1,277 363
St. John Knits Inc. SJKI (52) 213 80
Sulphco Inc. SUF 25 34 12
Sun Healthcare SUNH 10 523 (34)
Sun-Times Media SVN (261) 965 (324)
Tivo Inc. TIVO (33) 132 10
USG Corp. USG (313) 5,657 (1,763)
Vertrue Inc. VTRU (16) 443 (72)
Weight Watchers WTW (110) 857 (72)
WR Grace & Co. GRA (515) 3,612 929
*********
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, Melvin C. Tabao, 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.
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for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***