/raid1/www/Hosts/bankrupt/TCR_Public/061206.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, December 6, 2006, Vol. 10, No. 290
Headlines
AGERE SYSTEMS: LSI Logic Merger Prompts Moody's to Affirm Ratings
ALEXIS NIHON: Cominar Buyout Prompts DBRS to Review Rating
ALLIED HOLDINGS: Criticizes Volvo's Summary Judgment Arguments
ALLIS-CHALMERS: Earnings Up 770.2% to $11.3 Mil. in 2006 3rd Qtr.
AMERICAN MEDIA: Delays Filing of September 30 Quarterly Report
AMERICAN TIRE: Moody's Holds Junk Rating on Senior Unsecured Note
AQUILA INC: Will Not Acquire Calpine Corp.'s Aries Power Plant
BELL MICROPRODUCTS: Gets Default Notice from Well Fargo
BELL MICROPRODUCTS: Filing Delay Cues Nasdaq Delisting Notice
BOSTON GENERATING: S&P Rates $400 Million Second-Lien Loan at B-
BRAVO! FOODS: Sept. 30 Balance Sheet Upside-Down by $35.6 Million
CALPINE CORP: "Stalking Horse" Bidder Loses in Power Plant Auction
CAPITALSOURCE REAL: S&P Rates $47-Mil. Class J Certificates at BB
CARGO CONNECTION: Sept. 30 Balance Sheet Upside-Down by $9.3 Mil.
CEDAR FAIR: Heightened Debt Leverage Prompts S&P's Stable Outlook
COFFEYVILLE RESOURCES: S&P Rates Proposed $1.075 Bil. Loan at B+
CREDIT SUISSE: Fitch Rates $11.5 Million Class B-3 Certs. at BB+
DAIMLERCHRYSLER: Chrysler Group's November U.S. Sales Up 3%
DAIMLERCHRYSLER: Chrysler Group's November Non-U.S. Sales Up 17%
DAIMLERCHRYSLER: Chrysler Group's Eberhardt Moves to Mercedes-Benz
DATALOGIC INTERNATIONAL: Delays Filing of Third Quarter Financials
DELPHI CORP: Court OKs DLA Piper as MobileAria's IP Counsel
DELTA AIR: Comair Pilots to Picket at Atlanta Headquarters Today
DENBURY RESOURCES: Earns $59.3 Million in 2006 Third Quarter
EASTMAN KODAK: Posts $37 Mil. Net Loss in 2006 Third Quarter
ELGIN NATIONAL: Refinancing Risk Cues S&P to Hold Junk Rating
ENRON CORP: Plaintiffs Barred from Prosecuting Derivative Claims
ENRON CORP: Court Approves Deseret Generation Settlement Agreement
ENVIROSOLUTIONS HOLDINGS: Moody's Revises Outlook to Negative
FAREPORT CAPITAL: Cancels Proposed Financing & Debt Restructuring
FINOVA GROUP: Court Okays Thaxton Litigation Pact & Reopens Case
FIRST MERCURY: Restructuring Prompts S&P's BB Credit Rating
FOAMEX INTERNATIONAL: Court OKs Amended Plan Solicitation Protocol
FOAMEX INTERNATIONAL: Chapter 11 Cases Reassigned to Judge Gross
FORD MOTOR: November U.S. Sales Down 10% Compared with Last Year
FORD MOTOR: Moody's Junks Rating on $3 Bil. Convertible Notes
FORD MOTOR: S&P Junks Rating on Proposed $3-Bil. Senior Debt
GETTY IMAGES: Form 10-Q Filing Delay Prompts Default Notice
GETTY IMAGES: Default Notice Prompts S&P's Negative CreditWatch
GLENBOROUGH PROPERTIES: Morgan Stanley Deal Cues Moody's Review
GLOBAL ENERGY: Sept. 30 Balance Sheet Upside-Down by $3.3 Million
GMAC COMMERCIAL: Good Performance Cues S&P to Hold Low-B Ratings
GOLD KIST: Pilgrim's Pride Deal Cues S&P to Retain Positive Watch
GSAA HOME: Moody's Rates Class B-3 Certificates at Ba2
HCA INC: Reports $240 Million Net Income in Quarter Ended Sept. 30
HUDSON PRODUCTS: High Debt Leverage Prompts S&P to Assign B Rating
ITG VEGAS: Case Summary & 52 Largest Unsecured Creditors
JACK IN THE BOX: Weak Credit Metrics Cue Moody's to Cut Ratings
LIGAND PHARMA: September 30 Equity Deficit Tops $251.1 Million
LSI LOGIC: Completes Acquisition of StoreAge Networking for $50MM
MAVERICK COUNTY: Deficits Cue S&P to Pare Ratings to BB from BBB
MCMORAN EXPLORATION: Sept. 30 Stockholders' Deficit Tops $38.3MM
MICROFIELD GROUP: Earns $6.6 Million in Third Quarter of 2006
MORGAN STANLEY: S&P Upgrades Rating Classes D & E Notes
MOSAIC COMPANY: Completes $2 Billion Refinancing
MOTHERS WORK: Earns $9.1 Million in Fiscal Year Ended Sept. 30
NEWMARKET CORP: Moody's Rates $150 Million Senior Notes at B1
NORTEL NETWORKS: Board Taps KPMG as Independent Auditor
NORTHWEST AIRLINES: Can Assume Management Employment Contracts
NORTHWEST AIRLINES: Wants Stay Enforced Against U.S. Bank
OVERWATCH SYSTEMS: Textron Buyout Cues S&P's Ratings Withdrawal
PILGRIM'S PRIDE: Gold Kist Deal Cues S&P to Retain Negative Watch
PHILIPSBURG GENERAL: Employees Get $55,000 In "Paid Time Off"
PRICELINE.COM: Hutchison & Cheung Sell 3.8 Mil. Shares of Stock
PROBE MANUFACTURING: Sept. 30 Stockholders' Deficit Tops $727,280
PSYCHIATRIC SOLUTIONS: S&P Puts Junks Rating on Preferred Stock
REFCO INC: To Present 16 Witnesses at Plan Confirmation Hearing
REFCO INC: Chap. 11 Trustee Wants $101 Mil. JPMorgan Claim Settled
REMEDIATION FINANCIAL: Must File Disclosure Statement by Dec. 15
RESIDENTIAL ACCREDIT: Fitch Holds Low-B Ratings on 2 Certificates
ROWE COS: Sun Capital Discloses Intent to Buy All Assets
SALOMON BROTHERS: Fitch Holds Junk Rating on Class B-5 Certs.
SEA CONTAINERS: Received Dividends from GNER Before Bankruptcy
SEA CONTAINERS: Wants Richards Butler as Special Foreign Counsel
SCOTTISH RE: Amends Credit Deal to Buy Back Convertible Notes
SOLUTIA INC: Court Approves January 15 Plan-Filing Deadline
STATION CASINOS: Acquisition Offer Prompts Moody's Ratings Review
STATION CASINOS: Acquisition Offer Cues S&P to Downgrade Ratings
STEEL PARTS: Resilience Capital Completes Acquisition
STELLAR TECHNOLOGIES: Losses Continue in Quarter Ended Sept. 30
TELOS CORP: Sept. 30 Balance Sheet Upside-Down by $125 Million
TELOS CORP: Annual Stockholders' Meeting Set for December 14
THINKPATH INC: Posts $383,000 Net Loss in Quarter Ended Sept. 30
TPF GENERATION: Moody's Rates Proposed $495 Million Loan at B3
TPF GENERATION: S&P Rates $495 Million 2nd Lien Loan at B-
TRANSAX INT'L: Sept. 30 Balance Sheet Upside-Down by $4.1 Million
TROPICANA ENT: Moody's Rates Corporate Family Rating at B1
UNITY WIRELESS: Sept. 30 Balance Sheet Upside-Down by $4.4 Million
UNITY WIRELESS: Restates First and Second Quarter Financials
VERILINK CORP: Unsecured Creditors to Receive Shares of Stock
WARNER MUSIC: Earns $60 Million in Fiscal Year Ended September 30
WESTLAND HOLDINGS: Takeover OK Cues Moody's to Withdraw Ratings
WESTON NURSERIES: Unsecured Creditors to Receive 100% Under Plan
WILLIAMS PARTNERS: Moody's Rates $600 Million Note Offer at Ba3
WIMAR LANDCO: Moody's Rates Proposed $440 Mil. Senior Loan at B2
YES! ENTERTAINMENT: Wham-O Settles Royalty Suit for $300,000
* Proskauer Names D. E. Remensperger and R. Tanden as Partners
* Upcoming Meetings, Conferences and Seminars
*********
AGERE SYSTEMS: LSI Logic Merger Prompts Moody's to Affirm Ratings
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Moody's affirmed the ratings of Agere Systems Inc. with a
developing outlook after the report that LSI Logic Corporation and
Agere have entered into a definitive merger agreement under which
the companies will be combined in an all-stock transaction with an
equity value of approximately $4 billion.
Subject to customary shareholder and regulatory reviews, the
transaction is expected to close in the first quarter of 2007.
Ratings affirmed with a developing outlook include:
* Agere Systems Inc.,
-- Corporate Family Rating at B1;
-- PDR: Ba3; and
-- $362 million subordinated convertible debt at B1, LGD4,
68%
While the indenture that governs Agere's subordinated convertible
note requires the company to repurchase the notes for cash if
there is a change of control or if there is a termination of
trading of the common stock of Agere or its successor, the
specific terms of these triggers are not met in this proposed
transaction.
The developing outlook reflects the uncertainty with respect to
the legal structure following the merger, including whether there
will be any guarantees from LSI.
Agere Systems is a global leader in semiconductors and software
solutions for storage, mobility, and networking markets.
ALEXIS NIHON: Cominar Buyout Prompts DBRS to Review Rating
----------------------------------------------------------
Dominion Bond Rating Service placed the debt rating of BB (low)
and the stability rating of STA-4 (low) of Alexis Nihon Real
Estate Investment Trust Under Review with Positive Implications
following the announcement that Cominar Real Estate Investment
Trust will acquire all of the Alexis Nihon's issued and
outstanding shares. The Transaction represents approximately
$952 million, including assumed debt and convertible debentures.
Under the proposed transaction, Cominar will acquire all of the
issued and outstanding units of Alexis Nihon. For each Alexis
Nihon unit held, Alexis Nihon unitholders may elect to receive
either $17 in cash, subject to a maximum cash component of
$127.5 million, subject to a maximum of 17 million in Cominar
units offered. If more than the cash amount or unit amount is
elected, then the cash and units will be prorated respectively
ALLIED HOLDINGS: Criticizes Volvo's Summary Judgment Arguments
--------------------------------------------------------------
Allied Holdings Inc. and its debtor-affiliates reiterated their
request to deny Volvo Parts North America Inc.'s cross motion and
grant their summary judgment request.
As reported in the Troubled Company Reporter on April 19, 2006,
Allied Automotive Group had asked the U.S. Bankruptcy Court for
the Northern District of Georgia to compel Volvo to turn over
certain funds and prepetition deposits. The Debtors claimed that
Volvo's continued possession of the funds is an exercise of
control over property of the Debtors' estate. Volvo had asked the
Court to dismiss the adversary proceeding initiated by the Debtors
and, alternatively, demanded a trial by jury. Volvo also asked
the Court to enter a summary judgment declaring that Volvo is
entitled to, and did recoup, the overpayments against the account
balance of Allied Automotive.
Harris B. Winsberg, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, contends that the arguments Volvo made in its request for
summary judgment is an attempt to deflect focus from its
intentionally wrongful retention of property of the Debtors'
estates.
The Debtors has established in their summary judgment motion that
based on the undisputed facts of the case, they are entitled to
recover postpetition overpayments made to Volvo as well as
attorneys' fees, costs, and sanctions, Mr. Winsberg points out.
Mr. Winsberg asserts that allowing Volvo to recoup the excess
funds would violate the requirement that one creditor not be
preferred over similarly situated creditors and the notion that
the automatic stay is designed to prohibit actions that would
violate bankruptcy's priority scheme.
Mr. Winsberg reiterates that recoupment does not apply in the
case because, among other things, Volvo made no overpayments to
the Debtors, and the claims of the Debtors and Volvo are not at
all related, let alone "intertwined."
Because Volvo could not present any applicable bankruptcy case in
support of its position, it relies entirely on antiquated Georgia
contract cases to avoid the consequences of its wrongful conduct,
Mr. Winsberg notes.
The Debtors also deny several statements made by Volvo,
specifically, those pertaining to a certain Comchek payment
procedure and the treatment of overpayments.
Volvo Answers
Volvo argues that it does not seem logical that the application
of the recoupment doctrine depends on whether or not there has
been an overpayment; rather, the issue should be whether the
debts to be recouped arose from the same transaction.
C. David Butler, Esq., at Shapiro Fussell Wedge & Martin, in
Atlanta, Georgia, says there is no dispute that the payments
claimed recouped by Volvo arose under one contract, which is the
Service Agreement terminated by the Debtors. Volvo entered into
the Service Agreement with Allied Automotive Group, Inc., on
January 12, 2004.
Mr. Butler argues that whether one uses the "logical
relationship" or "integrated transaction" test, or uses the "same
transaction" or "same contract" analysis, Volvo was entitled to
recoup AAG's debt to Volvo against AAG's overpayment claim
against Volvo.
Mr. Butler points out that since Volvo established that it is
entitled to recoupment, Volvo did not violate any stay provision
of the Bankruptcy Code and thus, there is no basis for an award
of sanctions against Volvo.
Volvo disputes several factual contentions made by the Debtors,
some of which were not material, while others were not supported
by the Debtors' citations. Volvo also disputes the Debtors'
statements with regard to the Comchek Payment Procedure and
overpayments, Mr. Butler adds.
Accordingly, Volvo asks the Court to grant summary judgment in
its favor on all of the Debtors' claims and reserves its right to
move for the allowance of its administrative claim.
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. 35;
Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/
or 215/945-7000)
ALLIS-CHALMERS: Earnings Up 770.2% to $11.3 Mil. in 2006 3rd Qtr.
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Allis-Chalmers Energy Inc. reported a net income of $11.3 million
for the third quarter of 2006, an increase of 770.2%, compared
with net income of $1.3 million for the same quarter of 2005.
The increase in net income was due to a rise in revenues in all of
the company's business segments and the addition of the
international drilling segment.
For three months ended Sept. 30, 2006, revenues were
$85.7 million, an increase of 196.6% compared with $28.9 million
for the same quarter in 2005.
Revenues increased due to the acquisition of DLS Drilling,
Logistics & Services Corporation, which expanded its operations to
a sixth operating segment, international drilling. Revenues also
increased at its rental tools, casing and tubing services,
compressed air drilling and directional drilling services
segments.
Gross profit for the quarter ended Sept. 30, 2006, increased
249.6% to $28.8 million, or 33.6% of revenues, compared with
$8.2 million, or 28.5%, of revenues for the period in 2005. The
increase in gross profit as a percentage of revenues is primarily
due to the acquisition of Specialty Rental Tools Inc.
Income from operations for the three months ended Sept. 30, 2006,
totaled $19.1 million, a 440.7% increase over income from
operations of $3.5 million for the prior year period.
Liquidity and Capital Resources
The company's primary sources of liquidity are proceeds from the
issuance of debt and equity securities and cash flows from
operations. Cash and cash equivalents were $50.3 million at
Sept. 30, 2006 compared to $1.9 million at Dec. 31, 2005.
Based in Houston, Texas, Allis-Chalmers Energy Inc. (AMEX: ALY)
-- http://www.alchenergy.com/-- provides oilfield services and
equipment to the oil and gas exploration and development companies
primarily in Texas, Louisiana, New Mexico, Colorado, and Oklahoma;
offshore in the United States Gulf of Mexico; and offshore and
onshore in Mexico. The company offers directional drilling,
compressed air drilling, casing and tubing, rental tools, and
production services.
* * *
As reported in the Troubled Company Reporter on Sept. 27, 2006,
Moody's Investors Service in connection with the implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the oilfield service and refining and marketing
sector, confirmed its B3 Corporate Family Rating for Allis-
Chalmers Energy Inc. Moody's also affirmed its B3 rating on the
company's 9% Senior Unsecured Guaranteed Global Notes Due 2014,
and assigned the debentures an LGD4 rating suggesting a projected
loss-given default of 54%.
AMERICAN MEDIA: Delays Filing of September 30 Quarterly Report
--------------------------------------------------------------
American Media Operations Inc. won't be able to file its quarterly
report on Form 10-Q for the quarter ended Sept. 30, 2006, within
the prescribed time period, John F. Craven, the company's
executive vice president and chief financial officer disclosed.
The company will delay filing of the quarterly report due to the
anticipated restatement of its annual report on Form 10-K for the
fiscal year ended March 31, 2005, and its quarterly report on Form
10-Q for each of the quarters ended June 30, 2005, and
Sept. 30, 2005.
As reported in the Troubled Company Reporter on Nov. 7, 2006,
American Media entered into an amendment and waiver of a credit
agreement with Deutsche Bank Securities Inc., as the syndication
agent, Bear Stearns Corporate Lending Inc., General Electric
Capital Corporation and Lehman Commercial Paper Inc., as
documentation agents, and JPMorgan Chase Bank, N.A., as
administrative agent.
The Waiver, among others, extends the deadlines for delivery of
the Company's financial statements:
a) for the fiscal quarter ended Dec. 31, 2005 to
Feb. 15, 2007;
b) for the fiscal year ended March 31, 2006 to
Feb. 15, 2007;
c) for the fiscal quarter ended June 30, 2006 to
March 15, 2007;
d) for the fiscal quarter ended Sept. 30, 2006 to
March 15, 2007; and
e) for the fiscal quarter ending Dec. 31, 2006 to
March 15, 2007.
A full text-copy of the Amendment and Waiver may be viewed at no
charge at http://ResearchArchives.com/t/s?1483
Headquartered in Boca Raton, Florida, American Media Operations
Inc., is a publisher of celebrity, health and fitness, and Spanish
language magazines, including Star, Shape, Men's Fitness, Fit
Pregnancy, Natural Health, and The National Enquirer. AMI also
owns Distribution Services, Inc.
* * *
As reported in the Troubled Company Reporter on Sept. 4, 2006,
Moody's Investors Service downgraded all of its ratings for
American Media Operations Inc., including the company's
$60 million Senior Secured Revolving Credit Facility Due 2012 and
$450 million Senior Secured Term Loan Due 2013, which ratings were
lowered to B2 from B1.
In addition, Moody's downgraded its ratings on the company's
$150 million 8.875% Senior Subordinated Notes Due 2011 and
$400 million 10.25% Senior Subordinated Notes Due 2009 to Caa3
from Caa1.
Moody's also junked the company's B2 Corporate Family Rating. The
rating outlook is negative.
AMERICAN TIRE: Moody's Holds Junk Rating on Senior Unsecured Note
-----------------------------------------------------------------
Moody's Investors Service raised American Tire Distributors Inc.'s
Speculative Grade Liquidity rating to SGL-2 from SGL-3.
The rating, representing good liquidity over the coming twelve
months, considers ATD's more consistent free cash flow generation
over recent periods and expectations that this will continue
during the coming year.
It further reflects improved available capacity under its
revolving credit facility and minimal constraints from financial
covenants. Substantially all assets are pledged under its secured
revolving credit, which limits the ability to develop incremental
alternative liquidity arrangements.
ATD's Corporate Family Rating of B3 and negative outlook have been
affirmed as has the Caa1 LGD4, 70% rating on its senior unsecured
note issues.
The B3 Corporate Family rating emphasizes ATD's aggressive
financial leverage and currently weak interest coverage. It also
reflects the strengths of the company's competitive position and
prospects for free cash flow generation.
The rating further incorporates ATD's dependency on purchases from
a limited number of tire manufacturers/suppliers, geographic
concentration of revenues in the United States, uncertainties
associated with a strategy which will likely involve future
acquisitions, and the characteristically low returns associated
with distribution businesses.
The negative outlook dates from April 2006 and reflects concerns
over the company's modest FCF generation, weak consumer demand,
and continued pressure on working capital levels from
manufacturer's pricing actions. The company should be able to
continue offering an attractive value proposition to both
customers and suppliers as the breadth of tire SKUs expands.
The diversity of its customer channels, broad geographic
footprint, consistent margins and management of working capital
could contribute to less volatile levels of free cash flow
generation. ATD's recent improved liquidity profile presents
encouraging indications that it has adapted to lower replacement
tire demand by trimming its inventories and achieving material
free cash flow.
However, replacement tire purchases in North America have declined
over the last 9 months, and the magnitude of future cash flow will
be dependent upon developments in underlying tire demand which has
yet to demonstrate a resumption of growth.
The last rating action was on Sept. 22, 2006 when ratings on ATD's
senior unsecured notes were adjusted for Moody's Loss Given
Default Methodology.
American Tire Distributors, Inc., headquartered in Huntersville,
NC, is a wholesale distributor of tires, custom wheels, and
related service equipment. Revenues in 2005 were approximately
$1.5 billion.
AQUILA INC: Will Not Acquire Calpine Corp.'s Aries Power Plant
--------------------------------------------------------------
Aquila Inc. concluded its effort to purchase Calpine Corp.'s
580-megawatt, natural gas-fired power plant known as the "Aries"
plant in Pleasant Hill, Missouri. The plant was auctioned off on
Dec. 4, 2006, in New York City.
"The bidding reached a point where it did not make economic sense
for our customers," said Keith Stamm, Aquila's senior vice
president and chief operating officer. "We based that decision on
the cost of power supply alternatives which compete with Aries.
Funds we previously set aside for the purchase of Aries will now
be utilized for debt reduction and other liability management
efforts."
As reported in the Troubled Company Reporter on Sept. 25, 2006,
Aquila agreed to purchase the plant for $158.5 million. By
submitting asset purchase agreements to the U.S. Bankruptcy Court,
Southern District of New York, Aquila became the "stalking horse"
bidder.
The court adopted a procedural schedule that included an auction
that was held on Dec. 4 and Kelson Energy was selected as the
winning bidder.
"We congratulate Calpine on a successful auction and Kelson Energy
on its selection as the Aries purchaser -- we welcome them to
Missouri," said Mr. Stamm.
The auction results are subject to final review and approval
by the court overseeing the Calpine bankruptcy. A ruling is
expected today, Dec. 6, 2006. As part of the auction process
Aquila now holds the position of back-up bidder at its last offer
price, on Dec. 4, 2006, of $230 million until Dec. 28, 2006. This
means that if the Kelson acquisition is terminated, the company
remains obligated until Dec. 28, 2006, to purchase the plant for
$230 million upon the terms and conditions in the asset purchase
agreements signed by Aquila.
Communities in the company's Missouri service area continue to
grow, some at double-digit rates, increasing the demand for
electricity to meet customer needs. To meet those growing needs
Aquila added the South Harper peaking facility to its fleet of
power plants. The company also is participating in the expansion
of the Iatan coal-fired plant being built by KCP&L near Weston,
Missouri.
About Calpine Corp.
Headquartered in San Jose, California, Calpine Corporation (OTC
Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies
customers and communities with electricity from clean, efficient,
natural gas-fired and geothermal power plants. Calpine owns,
leases and operates integrated systems of plants in 21 U.S. states
and in three Canadian provinces. Its customized products and
services include wholesale and retail electricity, gas turbine
components and services, energy management and a wide range of
power plant engineering, construction and maintenance and
operational services.
The Company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts. Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities.
About Aquila
Based in Kansas City, Missouri, Aquila Inc. (NYSE:ILA) --
http://www.aquila.com/-- operates electricity and natural
gas transmission and distribution utilities serving customers
in Colorado, Iowa, Kansas, Michigan, Minnesota, Missouri, and
Nebraska. The company also owns and operates power generation
assets.
* * *
As reported in the Troubled Company Reporter on Sept. 18, 2006,
Moody's Investors Service upgraded the $300 million senior secured
bank facility of Aquila, Inc., to Ba2 from Ba3. At the same time,
Moody's raised Aquila's corporate family rating to B1 from B2.
Moody's rating of Aquila's long-term senior unsecured obligations
remains unchanged at B2. The rating outlook is changed to stable
from positive.
As reported in the Troubled Company Reporter on Sept. 6, 2006,
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on Aquila Inc. to 'B' from 'B-'. The rating remains
on CreditWatch with positive implications.
At the same time, Standard & Poor's raised its short-term
corporate credit rating to 'B-2' from 'B-3' and removed the rating
from CreditWatch with positive implications.
BELL MICROPRODUCTS: Gets Default Notice from Well Fargo
-------------------------------------------------------
Bell Microproducts Inc. disclosed that on Nov. 14, 2006, it
received Notices of Default from Wells Fargo Bank, N.A., with
respect to its 3-3/4% Convertible Subordinated Notes due 2024 and
its 3-3/4% Convertible Subordinated Notes, Series B due 2024.
Wells Fargo serves as the trustee for the holders of the Notes.
Under the terms of the indentures governing the Notes, the company
has an obligation to file with the Securities and Exchange
Commission all reports it is required to file pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934. The
company's failure to timely file its Quarterly Report on Form 10-Q
for the period ended Sept. 30, 2006 constituted a default pursuant
to the terms of the indentures. The company has 30 days from the
date it received the notices, or until Dec. 14, 2006, to cure the
default by filing the Form 10-Q or the holders may accelerate the
payment of the outstanding balance due under the Notes, which
amount would become immediately due and payable in full.
As of Sept. 30, 2006, the combined outstanding balance due under
the Notes was $110 million. The holders of more than 50% of the
outstanding aggregate principal amount of the Notes may grant the
Company a waiver of the default. The Company intends to seek a
waiver in the event it is unable to file the Form 10-Q on or
before Dec. 14, 2006.
Bell Microproducts --- http://www.bellmicro.com/-- (Nasdaq: BELM)
is an international, value-added distributor of a wide range of
high-tech products, solutions and services, including storage
systems, servers, software, computer components and peripherals,
as well as maintenance and professional services. An industry-
recognized specialist in storage products, this Fortune 1000
company is one of the world's largest storage-centric value-added
distributors.
Bell Microproducts is uniquely qualified with deep technical and
application expertise to service a broad range of information
technology needs. From design to deployment, its products are
available at any level of integration, from components to
subsystem assemblies and fully-integrated, tested and certified
system solutions.
BELL MICROPRODUCTS: Filing Delay Cues Nasdaq Delisting Notice
-------------------------------------------------------------
Bell Microproducts Inc. has received a Nasdaq Staff Determination
notice stating that the Company is not in compliance with the
filing requirements for continued listing as set forth in Nasdaq
Marketplace Rule 4310(c)(14).
The company anticipated receipt of this notice because, as
previously disclosed, accounting errors resulting in the company
being required to restate its financials for certain prior periods
have caused the company to delay the filing of its Quarterly
Report on Form 10-Q for the period ended September 30, 2006. The
notice is automatically generated by Nasdaq and indicated that due
to such non-compliance, the company's common stock is subject to
potential delisting. The company, in accordance with Nasdaq
procedures, has requested a hearing to review the determination
notice before a Nasdaq Listing Qualifications Panel.
The hearing request will automatically stay the suspension of
trading of the Company's common stock on the Nasdaq Global Market,
but there can be no assurance that the Panel will grant the
company's request for continued listing. The company intends to
file its Quarterly Report on Form 10-Q as soon as practicable.
Bell Microproducts --- http://www.bellmicro.com/-- (Nasdaq: BELM)
is an international, value-added distributor of a wide range of
high-tech products, solutions and services, including storage
systems, servers, software, computer components and peripherals,
as well as maintenance and professional services. An industry-
recognized specialist in storage products, this Fortune 1000
company is one of the world's largest storage-centric value-added
distributors.
Bell Microproducts is uniquely qualified with deep technical and
application expertise to service a broad range of information
technology needs. From design to deployment, its products are
available at any level of integration, from components to
subsystem assemblies and fully-integrated, tested and certified
system solutions.
BOSTON GENERATING: S&P Rates $400 Million Second-Lien Loan at B-
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Standard & Poor's Ratings Services assigned preliminary ratings to
Boston Generating LLC's proposed debt issues, which, in addition
to $300 million of holding company notes, will refinance Boston
Gen's existing debt, fund a $1 billion share repurchase and
distribution to existing shareholders, provide for LOCs
and liquidity, and be used for other general corporate purposes.
The ratings include:
-- A $70 Million first-lien revolving credit facility due 2011
rated 'B+', with a recovery rating of '1';
-- A $250 Million first-lien LOC facility due 2013 rated 'B+',
with a recovery rating of '1';
-- A $1,080 Million first-lien term loan due 2013 rated 'B+',
with a recovery rating of '1'; and,
-- A $400 Million second-lien term loan due 2014 rated 'B-',
with a recovery rating of '3'.
The '1' recovery rating assigned to the first-lien debt
obligations indicates expectations of full recovery of principal
in a payment default scenario. The '3' recovery rating assigned
to the second-lien term loan indicates meaningful recovery of
principal in that scenario.
The outlook is stable.
The ratings are based on preliminary terms and conditions and are
subject to review once final documentation is received. On
completion of the refinancing, Standard & Poor's will withdraw the
ratings on Boston Gen's existing debt.
The stable outlook on Boston Gen reflects the ability of the
assets to sustain low power prices, given the current forward
price curve for power and gas and the reserves in place. Under
low gas price scenarios, the project will suffer without the
benefit of reliability must run or forward capacity market
payments.
"Standard & Poor's could revise the outlook to negative if spark
spreads deteriorate substantially and RMR payments are reduced,"
said Standard & Poor's credit analyst Kenneth L. Farer.
"On the other hand, we could revise the outlook to positive if RMR
challenges are resolved, and if long-term acceptance of FCM
appears certain," he continued.
BRAVO! FOODS: Sept. 30 Balance Sheet Upside-Down by $35.6 Million
-----------------------------------------------------------------
Bravo! Foods International Corp. nka Bravo! Brands Inc. reported a
$1.2 million net loss on $5.1 million of net revenues for the
three months ended Sept. 30, 2006, compared with $17.6 million of
net income earned on $3.2 million of net revenues for the same
period in 2005.
At Sept. 30, 2006, the company's balance sheet showed
$39.7 million in total assets and $72.9 million in total
liabilities, resulting in a $35.6 million stockholders' deficit.
The company previously had $32.8 million equity deficit at
June 30, 2006.
The company's Sept. 30 balance sheet also showed strained
liquidity with $18 million in total current assets available to
pay $72.7 million in total current liabilities.
As of Sept. 30, 2006, the company reported that net cash used in
operating activities was $16,594,704, net cash provided by
financing activities was $13,462,392 and net cash used in
investing activities was $708,044 during the nine months ended
Sept. 30, 2006.
A full-text copy of the company's quarterly report is available
for free at http://researcharchives.com/t/s?165d
The company says that its operating losses, negative cash flow
from operations and negative working capital is largely the effect
of its recording of $37,075,023 for derivative liabilities.
In addition, the company relates that it has experienced delays in
filing its financial statements and registration statements due to
errors in historical accounting that now have been corrected. The
inability to make these filings resulted in the recognition of
penalties payable to the investors. These penalties have ceased
with the completed filings and the registration of the common
shares into which the investors' financial instruments are
convertible.
Going Concern Doubt
Lazar Levine & Felix LLP expressed substantial doubt about Bravo!
Foods' ability to continue as a going concern after auditing the
Company's financial statements for the years ended Dec. 31, 2005
and 2004. The auditing firm pointed to the Company's net losses,
working capital deficiency at Dec. 31, 2005, and delinquency in
the payment of certain debts.
Based in North Palm Beach, Florida, Bravo! Foods International
Corp. nka Bravo! Brands Inc. -- http://www.bravobrands.com/--
develops, brands, markets, distributes and sells flavored milk
products throughout the 50 United States, Great Britain and
various Middle Eastern countries.
CALPINE CORP: "Stalking Horse" Bidder Loses in Power Plant Auction
------------------------------------------------------------------
Calpine Corp. disclosed that Aquila Inc. lost in the bid for the
purchase Calpine's 580-megawatt, natural gas-fired power plant
known as the "Aries" plant in Pleasant Hill, Missouri. The plant
was auctioned off on Dec. 4, 2006, in New York City.
As reported in the Troubled Company Reporter on Sept. 25, 2006,
Aquila agreed to purchase the plant for $158.5 million. By
submitting asset purchase agreements to the U.S. Bankruptcy Court,
Southern District of New York, Aquila became the "stalking horse"
bidder.
The Court adopted a procedural schedule that included an auction
that was held on Dec. 4 and Kelson Energy LLC was selected as the
winning bidder.
The auction results are subject to final review and approval
by the court overseeing the Calpine bankruptcy. A ruling is
expected today, Dec. 6, 2006. As part of the auction process
Aquila now holds the position of back-up bidder at its last offer
price, on Dec. 4, 2006, of $230 million until Dec. 28, 2006. This
means that if the Kelson acquisition is terminated, the company
remains obligated until Dec. 28, 2006, to purchase the plant for
$230 million upon the terms and conditions in the asset purchase
agreements signed by Aquila.
Communities in the company's Missouri service area continue to
grow, some at double-digit rates, increasing the demand for
electricity to meet customer needs. To meet those growing needs
Aquila added the South Harper peaking facility to its fleet of
power plants. The company also is participating in the expansion
of the Iatan coal-fired plant being built by KCP&L near Weston,
Missouri.
About Aquila
Based in Kansas City, Missouri, Aquila, Inc. (NYSE:ILA) --
http://www.aquila.com/-- operates electricity and natural
gas transmission and distribution utilities serving customers
in Colorado, Iowa, Kansas, Michigan, Minnesota, Missouri and
Nebraska. The company also owns and operates power generation
assets.
About Calpine Corp.
Headquartered in San Jose, California, Calpine Corporation (OTC
Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies
customers and communities with electricity from clean, efficient,
natural gas-fired and geothermal power plants. Calpine owns,
leases and operates integrated systems of plants in 21 U.S. states
and in three Canadian provinces. Its customized products and
services include wholesale and retail electricity, gas turbine
components and services, energy management and a wide range of
power plant engineering, construction and maintenance and
operational services.
The Company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts. Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities.
CAPITALSOURCE REAL: S&P Rates $47-Mil. Class J Certificates at BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to CapitalSource Real Estate Loan Trust 2006-A's
$1.3 billion CDO.
The preliminary ratings are based on information as of
Dec. 4, 2006. Subsequent information may result in the assignment
of final ratings that differ from the preliminary ratings.
The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the economics of the
collateral, the property type diversity of the collateral, and the
backup advancing provided by the trustee.
Preliminary Ratings Assigned
CapitalSource Real Estate Loan Trust 2006-A
Recommended
Preliminary credit
Class Rating amount support
----- ------ ----------- -----------
A-1 AAA $895,375,000 31.13%
B AA $82,875,000 24.75%
C A+ $62,400,000 19.95%
D A $30,225,000 17.63%
E A- $30,225,000 15.30%
F BBB+ $26,650,000 13.25%
G BBB $33,150,000 10.70%
H BBB- $31,200,000 8.30%
J BB $47,450,000 4.65%
K NR $60,450,000 -
NR -- Not rated.
CARGO CONNECTION: Sept. 30 Balance Sheet Upside-Down by $9.3 Mil.
-----------------------------------------------------------------
Cargo Connection Logistics Holding Inc. filed its third quarter
financial statements for the three months ended Sept. 30, 2006,
with the Securities and Exchange Commission reporting a $985,238
net loss on $5,273,639 of net revenues, compared with a $464,079
net loss on $3,837,611 of net revenues in the comparable period
of 2005.
At Sept. 30, 2006, the company's balance sheet showed $2,789,374
in total assets, $12,123,405 in total liabilities, resulting in a
$9,334,031 in total stockholders' deficit.
The Company's September 30 balance sheet also showed strained
liquidity with $2,339,156 in total current assets available to pay
$10,628,082 in total current liabilities coming due within
the next 12 months.
A full-text copy of the regulatory filing is available for free
at http://ResearchArchives.com/t/s?1658
Going Concern Doubt
In its Form 10-QSB filing, the company said that its working
capital deficiency and stockholders' deficit raise substantial
doubt about its ability to continue as a going concern.
Management is seeking to raise additional capital and renegotiate
certain liabilities in order to alleviate the working capital
deficiency.
About Cargo Connection
Headquartered in Inwood, New York, Cargo Connection Logistics
Holding Inc., through its subsidiaries, provides transportation
logistics services in North America. The Company primarily
provides truckload and less-than-truckload transportation
services, as well as provides value-added logistics services,
including provision of the U.S. Customs Bonded warehouse
facilities and container freight station operations. The Company
also provides pick and pack services comprising changing labels or
tickets on items, inspection of goods into the United States, and
recovery of goods damaged in transit.
CEDAR FAIR: Heightened Debt Leverage Prompts S&P's Stable Outlook
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Cedar
Fair L.P. to stable from positive.
At the same time, Standard & Poor's affirmed its ratings,
including its 'B+' corporate credit rating, on the company.
Sandusky, Ohio-based Cedar Fair is the second-largest regional
theme park company in the U.S. in terms of attendance. Total debt
was $1.75 billion as of Sept. 24, 2006.
"The outlook revision is based on relatively flat operating
performance in the key September quarter and the persistence of
heightened debt leverage," said Standard & Poor's credit analyst
Hal F. Diamond.
High debt leverage has persisted since the June 2006,
$1.24 billion acquisition of Paramount Parks Inc. Also, the
company had planned on issuing, by year-end 2006, about
$250 million in a public equity offering, subject to equity market
conditions, in order to reduce its leverage.
However, there remains some uncertainty regarding the timing of
the equity offering because the company is still monitoring market
conditions to minimize dilution among existing unitholders.
The ratings on Cedar Fair reflect its heightened debt leverage
related to the Paramount Parks acquisition and its large
distribution payout history as a result of its master limited
partnership structure. These factors are only partially offset by
the company's competitive position and its good operating track
record.
Cedar Fair currently owns and operates owns and operates
12 amusement parks, five outdoor water parks, one indoor water
park, and six hotels.
COFFEYVILLE RESOURCES: S&P Rates Proposed $1.075 Bil. Loan at B+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered the corporate credit
rating of midsize, independent refiner Coffeyville Resources LLC
to 'B' from 'B+' in anticipation of a reported recapitalization.
At the same time, Standard & Poor's assigned its 'B+' rating to
the proposed $775 million first first-lien senior secured loan,
$150 million revolving credit facility, and $150 million LOC
facility, replacing the company's existing credit facilities.
"The downgrade reflects the highly leveraged financial profile of
the company after recapitalization, given the cyclicality of the
refining business," said Standard & Poor's credit analyst Chinelo
Chidozie.
"In addition, these ratings were placed on CreditWatch with
positive implications, primarily on the expectation that about
$280 million of the proceeds of a planned IPO will go toward
reducing debt. The ratings are subject to receipt and review of
final documentation."
Standard & Poor's also assigned its '1' recovery rating to the
credit facilities that hold a first-lien position. The '1'
recovery rating indicates a high expectation for the full recovery
of principal in a payment default scenario.
Loan proceeds will be used to retire the existing $528 million
first- and second-lien loans, the current $100 million revolving
credit facility, and $150 million LOC facility, and also pay a
dividend to the owners.
On Sept. 26, 2006, Coffeyville filed its Form S-1 with the SEC
under CVR Energy Inc., a newly formed entity specifically
organized for the completion of the planned IPO. The filing
follows about 15 months of operations under owners GS Capital
Partners V and Kelso & Co.
Coffeyville is a 100,000 barrel per day independent refiner in
Coffeyville, Kansas.
CREDIT SUISSE: Fitch Rates $11.5 Million Class B-3 Certs. at BB+
----------------------------------------------------------------
Fitch rates Credit Suisse First Boston Mortgage Securities Corp.
Home Equity Asset Trust 2006-8:
-- $921,150,100 class 1-A-1, 2-A-1, 2-A-2, 2-A-3, 2-A-4, R and
P certificates 'AAA';
-- $77,600,000 class M-1 and M-2 'AA+';
-- $21,300,000 class M-3 'AA';
-- $20,125,000 class M-4 'AA-';
-- $18,400,000 class M-5 'A+';
-- $17,825,000 class M-6 'A';
-- $16,675,000 class M-7 'BBB+';
-- $17,250,000 class M-8 and B-1 'BBB';
-- $6,900,000 class B-2 'BBB-'; and
-- $11,500,000 class B-3 'BB+'.
The 'AAA' rating on the senior certificates reflects the 19.9%
total credit enhancement provided by the 3.6% class M-1
certificate, 3.15% class M-2, 1.85% class M-3, 1.75% class M-4,
1.60% class M-5, 1.55% class M-6, 1.45% class M-7, 0.9% class M-8,
0.6% class B-1, 0.6% class B-2, 1% class B-3, the 1.85% initial
over-collateralization, and the 1.85% target OC.
All certificates have the benefit of monthly excess cash flow to
absorb losses.
In addition, the ratings reflect the quality of the loans and the
integrity of the transaction's legal structure, as well as the
primary servicing capabilities of Wells Fargo Bank and Select
Portfolio Servicing.
The mortgage pool consists of first and second lien, fixed and
adjustable rate, sub-prime mortgage loans with a cut-off date
aggregate principal outstanding balance of $1,075,994,153. As of
the cut-off date, the weighted average loan rate is approximately
8.32%, and the weighted average original term to maturity is
355 months. The average cut-off date principal balance of the
mortgage loans is approximately $186,743. The weighted average
combined original loan-to-value ratio is 80.35%, and the weighted
average Fair, Isaac & Co. score is 628.
The properties are located in California, Florida, and Illinois,
and otherwise distributed over many other states.
On the closing date, the depositor will deposit approximately
$74,005,947 into a pre-funding account. The amount in this
account will be used to purchase subsequent mortgage loans after
the closing date and on or prior to Feb. 23, 2007.
All of the mortgage loans were purchased by an affiliate of the
depositor from various sellers in secondary market transactions.
For federal income tax purposes, an election will be made to treat
the trust as multiple real estate mortgage investment conduits.
DAIMLERCHRYSLER: Chrysler Group's November U.S. Sales Up 3%
-----------------------------------------------------------
DaimlerChrysler AG's Chrysler Group reported that unadjusted U.S.
sales in November 2006 rose 3% to 164,556 units, compared with
November 2005 sales of 159,898 units. November 2006 sales
establish a five-year November record.
"Chrysler Group sales in November were up 3% over last year,
marking the best November in five years," Chrysler Group vice
president for sales and field operations Steven Landry said.
"Our new product lineup continues its customer appeal as they
arrive at our dealerships and drive a big part of the sales
improvement for the Chrysler Group."
The company has launched nearly all of the 10 new products that
were announced at the beginning of the year, and those products
are generating customer and media praise while driving traffic
into Chrysler, Jeep(R), and Dodge showrooms.
Sales of the Jeep Wrangler, a direct descendant of the original
Jeep vehicle, rose 95% to 8,735 units, setting a new November
sales record. Previous year sales of the Jeep Wrangler totaled
4,482 units. The Jeep Wrangler has received in excess of 62,000
dealer orders, which exceeds three-quarters of total Jeep Wrangler
sales in calendar year 2005.
The all-new Dodge Nitro, the first mid-sized SUV for the Dodge
brand continues to distinguish itself in the retail marketplace
with consumers. Sales of the Dodge Nitro totaled 5,489 units for
November 2006, 80% higher than October 2006 sales of 3,044 units.
Customer response to the Dodge Nitro has been very strong and
Dodge dealers nationwide are responding by placing orders for more
than 50,000 units.
Sales of the Chrysler Group's best selling product, the Dodge Ram
Pickup, rose 8% in November, posting sales of 27,826 units.
Previous year sales totaled 25,667 units.
Chrysler Group finished the month with 499,036 units of dealer
inventory, or a 76-day supply.
About DaimlerChrysler
DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- engages
in the development, manufacture, distribution, and sale of various
automotive products, primarily passenger cars, light trucks, and
commercial vehicles worldwide. It primarily operates in four
segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles,
and Financial Services.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler, Jeep,
and Dodge brand names. It also sells parts and accessories under
the MOPAR brand.
The Chrysler Group is facing a difficult market environment in the
United States with excess inventory, non-competitive legacy costs
for employees and retirees, continuing high fuel prices and a
stronger shift in demand toward smaller vehicles. At the same
time, key competitors have further increased margin and volume
pressures -- particularly on light trucks -- by making significant
price concessions. In addition, increased interest rates caused
higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and cut
costs in the short term are being examined at all stages of the
value chain, in addition to structural changes being reviewed as
well.
DAIMLERCHRYSLER: Chrysler Group's November Non-U.S. Sales Up 17%
----------------------------------------------------------------
DaimlerChrysler AG's Chrysler Group operations outside North
America, November sales gains marked the milestone of 18
consecutive months of year-over-year sales gains; and with one
full month left, year-to-date sales have already surpassed the
total for all of 2005.
This month was the best November sales for Chrysler Group's
International operations in 10 years, and the sale of 18,900 units
marked an increase of 17% over the same month last year. Dodge
Caliber sales accounted for much of the growth in November with
2,867 units sold (15,042 units year-to-date), while top-selling
vehicles, such as Jeep(R) Grand Cherokee and Chrysler 300C,
continued to perform well.
"We are confident that we made a sound decision by increasing the
number of vehicles equipped to meet the needs of customers outside
North America," executive director of international sales and
marketing Thomas Hausch said.
"This works hand-in-hand with our long-standing initiative to
continuously improve customer experience, and our dealers'
performance this year has been a major factor in our success."
Chrysler Group's year-to-date sales outside North America climbed
14% compared with the same time period last year with 186,080
units sold. All three of Chrysler Group's brands contributed to
this gain, with Chrysler brand sales up 6% (82,142 units), Jeep
brand up 1% (77,220 units) and Dodge brand up 176% (26,718 units).
"All three brands working together to reach customers with very
diverse needs [are] responsible for boosting sales. However,
despite the significant gains we've made in some of our key
markets, the competition is intense, and we must continue to work
hard to maintain sales growth," Mr. Hausch said.
Western and Central European sales, which account for the largest
part of Chrysler Group's sales outside North America, have reached
100,583 units, a 20% increase over the region's 2005 sales through
November. The top-three markets, Italy, U.K, and Germany
respectively, are all in Western Europe and continued to
experience double-digit sales improvement. Growth in Latin
America has been another driving force in the sales increases,
with year-to-date sales climbing 23% (33,202 units) so far in
2006. Venezuela, the highest-volume market for Chrysler Group in
Latin America, ranks as the Company's number four market outside
North America, and has seen 33% growth so far in 2006.
For the year, the Jeep Grand Cherokee led product sales with
35,558 units sold year-to-date. It was closely followed by the
Chrysler Voyager (32,616 units) and the Jeep Cherokee (24,733
units). The significant sales growth for the Chrysler 300C, 130
percent year-to-date, has landed the vehicle in the number four
position with 23,283 units sold outside North America.
"We anticipate continued positive results as more new products
reach dealerships in the local markets. By the end of this year,
we are confident that a double-digit increase in performance is a
lofty, yet attainable goal," Mr. Hausch said.
"It means, however, that we cannot let up, and must remain
dedicated to the business and needs of customers outside North
America."
Chrysler Group sells and services vehicles in more than 125
countries around the world, and Chrysler Group sales outside North
America currently account for approximately eight percent of the
Company's total global sales. Vehicles available range across all
three Chrysler Group brands, with limited availability on some
trucks and SUV models. The Company's operations outside North
America have been experiencing year-over-year sales increases
since 2004, and will continue to increase the number of product
offerings, powertrain options and RHD availability through 2007.
About DaimlerChrysler
DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- engages
in the development, manufacture, distribution, and sale of various
automotive products, primarily passenger cars, light trucks, and
commercial vehicles worldwide. It primarily operates in four
segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles,
and Financial Services.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler, Jeep,
and Dodge brand names. It also sells parts and accessories under
the MOPAR brand.
The Chrysler Group is facing a difficult market environment in the
United States with excess inventory, non-competitive legacy costs
for employees and retirees, continuing high fuel prices and a
stronger shift in demand toward smaller vehicles. At the same
time, key competitors have further increased margin and volume
pressures -- particularly on light trucks -- by making significant
price concessions. In addition, increased interest rates caused
higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and cut
costs in the short term are being examined at all stages of the
value chain, in addition to structural changes being reviewed as
well.
DAIMLERCHRYSLER: Chrysler Group's Eberhardt Moves to Mercedes-Benz
------------------------------------------------------------------
DaimlerChrysler AG's Chrysler Group president and chief executive
officer Tom LaSorda has announced that Joe Eberhardt, executive
vice president for global sales, marketing, and service, will be
leaving the company in order to return to automotive retailing
within the Mercedes-Benz network in the United States. The senior
vice presidents and vice presidents of sales, marketing,
international and service will report directly to Mr. LaSorda
until further notice.
"Joe brought a much-needed discipline to our sales, marketing and
service organizations when he arrived in the summer of 2003," Mr.
LaSorda said. "Being back in the retail world is something he has
talked about for some time now, and having a proven track record
in that arena, makes it a natural."
Mr. Eberhardt joined Mercedes-Benz in Germany in 1982 as a student
in a work-study program. In the early 1990s, he left the
corporate environment and became General Manager of Mercedes-Benz
Manhattan, turning it into one of the most successful dealerships
in the country.
He returned to Mercedes-Benz in 1995 and, in 1999, was named
President and CEO of DaimlerChrysler UK Ltd., where Eberhardt more
than doubled sales and improved dealer profitability in a stagnant
market.
"Joe's deep understanding of the automotive industry and his
proven leadership will continue to serve the Company well as he
moves back to the retail side," Dieter Zetsche, chairman of the
board of Management DaimlerChrysler/Head of Mercedes Car Group,
said.
Mr. Eberhardt was born in Stuttgart, Germany, on Aug. 26, 1963.
He received his BA and MS degrees in Germany, and earned his
Masters of Business Administration degree at New York University's
Leonard N. Stern School of Business in 1992.
About DaimlerChrysler
DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- engages
in the development, manufacture, distribution, and sale of various
automotive products, primarily passenger cars, light trucks, and
commercial vehicles worldwide. It primarily operates in four
segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles,
and Financial Services.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler, Jeep,
and Dodge brand names. It also sells parts and accessories under
the MOPAR brand.
The Chrysler Group is facing a difficult market environment in the
United States with excess inventory, non-competitive legacy costs
for employees and retirees, continuing high fuel prices and a
stronger shift in demand toward smaller vehicles. At the same
time, key competitors have further increased margin and volume
pressures -- particularly on light trucks -- by making significant
price concessions. In addition, increased interest rates caused
higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and cut
costs in the short term are being examined at all stages of the
value chain, in addition to structural changes being reviewed as
well.
DATALOGIC INTERNATIONAL: Delays Filing of Third Quarter Financials
------------------------------------------------------------------
DataLogic International, Inc., will be unable to file its
quarterly report on Form 10-QSB for the quarter ended
Sept. 30, 2006 on a timely basis because management needs
additional time to finalize its review of the company's financial
statements.
Keith Moore, DataLogic's chief executive officer, disclosed in a
filing with the Securities and Exchange Commission that the
company expects to report a higher operating loss and a
significantly higher net loss in the third quarter of 2006
compared with the third quarter of 2005.
The increased operating loss in the third quarter of 2006 compared
to the comparable period in 2005 is primarily due to higher costs
associated with terminating employment agreements and legal and
other professional services.
The increase in the Company's net loss in the third quarter of
2006 compared with the comparable period in 2005 is primarily due
to the increased operating loss noted above and non-cash non-
recurring losses.
About DataLogic
DataLogic International, Inc. -- http://www.dlgi.com/-- is a
technology and professional services company providing a wide
range of consulting services and communication solutions like GPS
based mobile asset tracking, secured mobile communications and
VoIP. The Company also provides Information Technology
outsourcing and private label communication solutions.
DataLogic's customers include U.S. and international governmental
agencies as well as a variety of international commercial
organizations.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 17, 2006,
Corbin & Company, LLP, in Irvine, California, raised substantial
doubt about DataLogic's ability to continue as a going concern
after auditing the Company's consolidated financial statements for
the year ended Dec. 31, 2005. The auditor pointed to the
Company's recurring losses and need to establish profitable
operations.
DELPHI CORP: Court OKs DLA Piper as MobileAria's IP Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has authorized Delphi Corporation and its debtor-affiliates to
employ DLA Piper LLP as corporate, employment, and intellectual
property counsel, nunc pro tunc to May 1, 2006, for MobileAria,
Inc., a debtor-affiliate.
MobileAria has previously retained DLA Piper as an ordinary
course professional. At the end of April 2006, however, DLA
Piper exceeded the fee cap established in the Ordinary Course
Professionals Order. Pursuant to the OCP Order, the Debtors are
required to formally retain DLA Piper in order to continue
receiving DLA Piper's services.
As MobileAria's counsel, DLA Piper will continue to:
(a) advise and represent MobileAria with respect to general
business, corporate, and employment matters as they arise;
(b) maintain MobileAria's rights in intellectual property
assets and counsel MobileAria with respect to its rights
in connection with any reorganization, restructuring,
sale, or transfer of its intellectual property rights; and
(c) advise and assist MobileAria with the sale of
substantially all of its assets.
As reported in the Troubled Company Reporter on Nov. 7, 2006,
MobileAria will pay DLA Piper its standard hourly rates, subject
to annual adjustment according to the firm's standard policies:
Attorney Hourly Rate
-------- -----------
Christie Branson $405
James Koshland 685
Michael Standlee 495
Victoria Lee 495
MobileAria will also reimburse DLA Piper's expenses according to
their reimbursement policies.
Troy, Mich.-based 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. 48; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DELTA AIR: Comair Pilots to Picket at Atlanta Headquarters Today
----------------------------------------------------------------
The pilots of Comair, represented by the Air Line Pilots
Association, International, will conduct informational picketing
at the Atlanta headquarters of Delta Air Lines Inc at 12:00 noon
to 2:00 p.m. today, Dec. 6, 2006. Comair operates under the
"Delta Connection" livery and is a wholly owned subsidiary of
Delta Air.
The pilots are picketing to demonstrate their frustration with
Comair and Delta management's efforts to sidestep the negotiating
process by filing an 1113(c) motion with the bankruptcy court. If
approved, this motion could repudiate and breach the pilots' labor
contract and allow Comair management to unilaterally impose terms
of employment.
In 2005, the Comair pilots agreed to concessions to help their
airline better manage its finances. Later that year, Comair and
parent company Delta filed for Chapter 11 bankruptcy. In more
recent contract talks, Comair management has taken an unreasonable
position concerning the level of additional concessions the pilots
must provide.
The pilots want Comair to demonstrate that the concessions sought
are necessary for the company's recovery, and not simply a means
of applying pressure to other Delta Connection pilot groups to
lower their compensation and work rules. The Comair pilots have
been flexible throughout these talks, submitting numerous
proposals that offer substantial contract relief.
The Comair pilots would also like something in exchange for any
contract relief, such as job security and wage snap-back
provisions in later years, especially since Comair has returned to
profitability. During recent bankruptcy proceedings, Delta
management and company documents revealed that Comair is projected
to earn at least $50 million in profits for 2006. Unfortunately,
Comair management appears to prefer to litigate in bankruptcy
court rather than seriously negotiate with its pilots.
About ALPA
Air Line Pilots Association, International -- http://www.alpa.org/
-- represents more than 60,000 pilots at 39 airlines in the United
States and Canada.
About Delta Air
Headquartered in Atlanta, Georgia, Delta Air Lines
-- http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities.
DENBURY RESOURCES: Earns $59.3 Million in 2006 Third Quarter
------------------------------------------------------------
Denbury Resources Inc. reported a $59.3 million net income on
$192 million of total revenues for the third quarter ended
Sept. 30, 2006, compared with $38.5 million of net income on
$141.8 million of total revenues for the same period in 2005.
The company explained that a combination of high commodity prices
and record quarterly production resulted in another quarter of
near record earnings and cash flow from operations. Last year's
third quarter production was negatively affected by Hurricanes
Katrina and Rita, with approximately 3,800 BOE/d of production
estimated as having been deferred during that period, the company
says.
Overall industry costs continue to increase, the primary reason
for record, or near record, operating costs and depreciation and
depletion rates per BOE in the third quarter of 2006. Operating
expenses were also impacted by higher energy costs (electrical and
fuel charges) and their continuing emphasis on tertiary
operations. General and administrative expenses increased 18%
between the comparative third quarters as a result of the
continued growth in personnel and inflation in the industry,
including a 5% pay raise to all employees effective July 1, 2006,
in order to remain competitive with industry compensation levels.
The company's income tax expense increased primarily due to higher
pre-tax income and the effective rate increased due to the loss of
their ability to generate enhanced oil recovery credits during
2006 as a result of the high oil prices.
Oil and natural gas revenues for the third quarter of 2006
increased $49.2 million, or 36%, from revenues in the comparable
quarter of 2005, primarily as a result of higher production. The
37% increase in production in the third quarter of 2006, as
compared to production in the third quarter of 2005, increased oil
and natural gas revenues by $51.8 million (105% of the total
revenue increase), while slightly lower overall commodity prices
in the 2006 quarterly period reduced revenue by $2.5 million, or
5% of the total revenue increase.
Balance Sheet and Liquidity
At Sept. 30, 2006, the company's balance sheet showed
$1.962 billion in total assets, $918 million in total liabilities,
and $1.044 billion in stockholders' equity, compared with
$1.505 million in total assets, $771 million in total liabilities,
and $734 million in stockholders' equity at Dec. 31, 2005.
The company's Sept. 30, 2006, balance sheet also showed strained
liquidity of $33 million in working capital deficit with
$142 million in total current assets available to pay $175 million
in total current liabilities, as compared with $145 million in
positive working capital at Dec. 31, 2005, with $299 million in
total current assets available to pay $154 million in total
current liabilities.
As of Nov. 1, 2006, the company had $84 million of bank debt
outstanding, an amount that it estimates will increase another
$10 million to $20 million during the fourth quarter to fund its
capital program. The company expects to end the year with around
$100 million of bank debt.
The company's current capital budget for 2006, excluding
acquisitions, is approximately $550 million, which at commodity
futures prices as of the end of October 2006, is estimated to be
at least $100 million more than its anticipated cash flow from
operations, a shortfall which primarily results from the drop in
commodity prices during the last few months.
Full-text copies of the company's third quarter financials are
available for free at http://researcharchives.com/t/s?15a9
About Denbury Resources
Denbury Resources, Inc. -- http://www.denbury.com/-- is a growing
independent oil and gas company. The company is the largest oil
and natural gas operator in Mississippi, owns the largest reserves
of CO2 used for tertiary oil recovery east of the Mississippi
River, and holds key operating acreage in the onshore Louisiana
and Texas Barnett Shale areas. The company increases the value of
acquired properties in its core areas through a combination of
exploitation drilling and proven engineering extraction practices.
* * *
As reported Troubled company Reporter on Sept. 26, 2006, Denbury
Resources Inc.'s June 30 balance sheet also showed strained
liquidity with $151.31 million in total current assets available
to pay $165.11 million in total current liabilities coming due
within the next 12 months. The company also had a $2.95 million
working capital deficit at March 31, 2006.
In addition, as reported in the Troubled company Reporter on Sept.
25, 2006, Moody's Investors Service confirmed Denbury Resources,
Inc.'s Ba3 Corporate Family Rating in connection with the
implementation of its Probability-of-Default and Loss-Given-
Default rating methodology for the U.S. and Canadian Exploration
and Production sector.
EASTMAN KODAK: Posts $37 Mil. Net Loss in 2006 Third Quarter
------------------------------------------------------------
Eastman Kodak Company filed its third quarter financial statements
ended Sept. 30, 2006, with the Securities and Exchange Commission
disclosing a $37 million net loss on $3.2 billion of revenues,
compared with a $914 million net loss on $3.6 billion of total
revenues for the same period in 2005.
Net worldwide sales were $3.2 billion for the third quarter of
2006 as compared with $3.6 billion for the third quarter of 2005,
representing a decrease of $349 million or 10%. The decrease in
net sales was primarily due to declines in volume and unfavorable
price-mix, which decreased third quarter sales.
Net sales in the U.S. were $1.3 billion for the third quarter of
2006 as compared with $1.4 billion for the prior year quarter,
representing a decrease of $158 million, or 11%. Net sales
outside the U.S. were $1.9 billion for the current quarter as
compared with $2.1 billion for the third quarter of 2005,
representing a decrease of $191 million, or 9%, which includes the
positive impact of foreign currency fluctuations of $25 million,
or 1%.
Gross Profit
Gross profit was $874 million for the third quarter of 2006 as
compared with $922 million for the third quarter of 2005,
representing a decrease of $48 million, or 5%. The gross profit
margin was 27.3% in the current quarter as compared with 25.9% in
the prior year quarter. The increase was primarily attributable
to:
(1) reductions in manufacturing costs, which increased gross
profit margins by approximately 1.2 percentage points;
(2) positive price/mix, primarily attributable to the year-
over-year increase in royalty income related to digital
capture, which increased gross profit margins by
approximately 0.5 percentage points; and
(3) foreign exchange, which positively impacted gross profit
margins by approximately 0.3 percentage points.
These increases were partially offset by volume declines in each
of the company's business lines.
Loss From Continuing Operations
The loss from continuing operations for the third quarter of 2006
was $37 million as compared with a loss from continuing operations
for 2005 third quarter of $915 million, representing an increase
in earnings of $878 million. This decrease in loss from
continuing operations is attributable to the following factors:
(1) Selling, General and Administrative Expenses
Selling, general and administrative expenses (SG&A) were $565
million for the third quarter of 2006 as compared with $670
million for the prior year quarter, representing a decrease of
$105 million, or 16%. SG&A as a percentage of sales decreased
from 19% for the third quarter of 2005 to 18% for the current year
quarter. The absolute dollar decrease in SG&A is primarily
attributable to declines in advertising spending, a reduction in
selling expenses, and lower employee benefit costs resulting from
ongoing company-wide cost reduction initiatives.
(2) Research and Development Costs
Research and development costs (R&D) were $170 million for the
third quarter of 2006 as compared with $212 million for the third
quarter of 2005, representing a decrease of $42 million, or 20%.
R&D as a percentage of sales was 5% for the third quarter of 2006
as compared with the prior year quarter of 6%. This decrease was
primarily driven by significant spending reductions in the current
quarter related to traditional products and services, and was also
impacted by reductions in R&D spending related to the display
business.
(3) Restructuring Costs and Others
Restructuring costs and other were $137 million for the third
quarter of 2006 as compared with $163 million for the third
quarter of 2005, representing a decrease of $26 million or 16%.
(4) Interest Expense
Interest expense for the third quarter of 2006 was $74 million as
compared with $57 million for the prior year quarter, representing
an increase of $17 million, or 30%. Higher interest expense is a
result of a non-recurring charge related to a non-U.S. export tax
claim, and higher interest rates under the Company's October 2005
$2.7 billion Senior Secured Credit Facilities.
Earnings/Loss From Continuing Operations
Earnings from continuing operations before interest, other income,
net and income taxes for the third quarter of 2006 were $2 million
as compared with a loss of $123 million for the third quarter of
2005, representing an increase in earnings of $125 million.
Company's Solvency and Cash Flow Activity
At Sept. 30, 2006, the company's balance sheet showed $14 billion
in total assets, $12.2 billion in total liabilities, and $1.8
billion in stockholders' equity. At Dec. 31, 2005, the company
had $15.2 billion in total assets, $13 billion in total liability,
and $2.3 billion in stockholders' equity.
The company's cash and cash equivalents decreased $563 million
from $1.7 billion at Dec. 31, 2005, to $1.1 billion at
Sept. 30, 2006. The decrease resulted primarily from $72 million
of net cash used in operating activities, $182 million of net cash
used in investing activities, and $319 million of net cash used in
financing activities.
2004 - 2007 Restructuring Program
The company announced on Jan. 22, 2004, that it planned to develop
and execute a comprehensive cost reduction program throughout the
2004 to 2006 timeframe. The objective of these actions is to
achieve a business model appropriate for the company's traditional
businesses, and to sharpen the company's competitiveness in
digital markets.
The Program was expected to result in total charges of $1.3
billion to $1.7 billion over the three-year period, of which $700
million to $900 million are related to severance, with the
remainder relating to the disposal of buildings and equipment.
Overall, the company's worldwide facility square footage will be
reduced by approximately one-third. Approximately 12,000 to
15,000 positions worldwide will be eliminated through these
actions primarily in global manufacturing, selected traditional
businesses and corporate administration.
On July 20, 2005, the company announced that it would extend the
restructuring activity, originally announced in January 2004, as
part of its efforts to accelerate its digital transformation and
to respond to a faster-than-expected decline in consumer film
sales. As a result of this announcement, the overall
restructuring program was renamed the "2004-2007 Restructuring
Program." Under the 2004-2007 Restructuring Program, the company
expected to increase the total employment reduction to a range of
22,500 to 25,000 positions, and to reduce its traditional
manufacturing infrastructure to approximately $1 billion, compared
with $2.9 billion as of Dec. 31, 2004.
These changes were expected to increase the total charges under
the Program to a range of $2.7 billion to $3.0 billion. Based on
the actual actions taken through the end of the third quarter of
2006 under this Program and an understanding of the estimated
remaining actions to be taken, the Company expects that the
employment reductions and total charges under this Program will be
within the ranges of 25,000 to 27,000 positions and $3.0 billion
to $3.4 billion, respectively, as indicated in the second quarter
2006 Form 10-Q. When essentially completed in 2007, the
activities under this Program will result in a business model
consistent with what is necessary to compete profitably in digital
markets.
A full-text copy of the company's financial statements for the
quarterly period ended Sept. 30, 2006 are available for free at
http://researcharchives.com/t/s?15af
About Eastman Kodak
Headquartered in Rochester, New York, Eastman Kodak Co. --
http://www.kodak.com/-- develops, manufactures, and markets
digital and traditional imaging products, services, and solutions
to consumers, businesses, the graphic communications market, the
entertainment industry, professionals, healthcare providers, and
other customers.
* * *
As reported in the Troubled Company Reporter on Nov. 9, 2006,
Moody's Investors Service placed Eastman Kodak Company's B1
Corporate Family Rating on review for a possible downgrade.
Moody's will continue to focus on the company's potential sale of
the Kodak Health Group as well as the fundamental operating
performance of the company. Moody's commented that if the sale of
KHG was not pending, Moody's would expect to confirm the company's
B1 rating with a negative outlook.
The company intends to announce the outcome of the KHG strategic
review by calendar year end 2006.
As reported in the Troubled Company Reporter on Aug. 7, 2006,
Standard & Poor's Ratings Services placed its ratings on Eastman
Kodak Co. (B+/Watch Neg/--) on CreditWatch with negative
implications. The Rochester, New York-based imaging company had
$3.5 billion in debt as of June 30, 2006.
ELGIN NATIONAL: Refinancing Risk Cues S&P to Hold Junk Rating
-------------------------------------------------------------
Standard & Poor's Ratings Serviced affirmed its 'CCC+' corporate
credit rating on Downers Grove, Illinois-based Elgin National
Industries Inc.
In addition, Standard & Poor's removed all ratings from
CreditWatch were they were placed with positive implications on
May 26, 2006, after the company's disclosure in a regulatory
filing that it had hired an advisor in connection with a possible
refinancing or other transaction involving the company's 11%
senior notes due Nov. 1, 2007.
"The affirmation of Elgin National's corporate credit rating
primarily reflects the refinancing risk associated with the
company's 11% senior notes due in Nov. 1, 2007, as well as weak
although somewhat improving operating performance," said
Standard & Poor's credit analyst Clarence Smith.
The ratings on Elgin National continue to reflect the company's
highly leveraged financial profile, characterized by limited cash
flow generation and constrained liquidity, as well as the
company's niche market positions in cyclical end markets.
Elgin had $290 million in revenue for the 12 months ended
Sept. 30, 2006
Elgin operates a number of small, middle-market manufacturing
units serving coal mining, durable goods, and heavy-duty truck
markets, as well as engineering and construction services units
serving the mineral processing and electric utility industries.
"An upgrade in the rating might be in order if the company
addresses its refinancing risk and builds on recent improvement in
operating performance and credit metrics," Mr. Smith said.
"However, we could downgrade the company if it does not refinance
bonds in a timely manner or if operating performance
deteriorates."
ENRON CORP: Plaintiffs Barred from Prosecuting Derivative Claims
----------------------------------------------------------------
The Honorable Arthur Gonzalez of the U.S. Bankruptcy Court for the
Southern District of New York has enjoined Enron Corp. and its
debtor-affiliates' Official Committee of Unsecured Creditors, the
plaintiffs in the Chinn, Young and McMurray Actions, from further
prosecuting any claims in the derivative claim actions initiated
by the reorganized Debtors.
The Debtors had filed a request for a global order to enforce the
automatic stay and prevent various plaintiffs in 13 actions
against current or former officers and directors of Enron Corp.,
as well as certain third-party entities, such as Arthur Andersen
LLP, from further prosecuting derivative claims in violation of
the automatic stay.
The 13 actions were:
-- Chinn, et al. v. Belfer, et al., C.A. No. 03-CV-862 (S.D.
Tex.);
-- Young v. Andersen L.L.P., C.A. No. 04-1546 (S.D. Tex.);
-- Pearson, et al. v. Fastow, et al., C.A. No. 03-5332 (S.D.
Tex.);
-- Rosen, et al. v. Fastow, et al., C.A. No. 03-5333 (S.D.
Tex.);
-- Ahlich, et al. v. Arthur Andersen, L.L.P., et al., C.A.
No. 03-5334 (S.D. Tex.);
-- Delgado, et al. v. Fastow, et al., C.A. No. 03-5335 (S.D.
Tex.);
-- Jose, et al. v. Arthur Andersen, L.L.P., et al., C.A. No.
H-03-1087 (S.D. Tex.)
-- Coy, et al. v. Arthur Andersen, L.L.P., et al., C.A. No.
H-01-4248 (S.D. Tex.);
-- McLaren, et al. v. Arthur Andersen, L.L.P., Cause No.
01CV1059 (Dist. Ct. Tex.);
-- Spector v. Lay, et al., C.A. No. 02-394-HA (D. Or.);
-- Odam, et al. v. Enron Corp., et al., H-01-3914 (S.D.
Tex.); and
-- Bullock, et al. v. Arthur Andersen, L.L.P., et al., Cause
No. 32716 (Dist. Ct. Tex.)
Certain of the plaintiffs objected to the Debtors' request,
asserting, among others, that the Bankruptcy Court lacked
jurisdiction over the Derivative Actions.
On Oct. 4, 2002, Judge Gonzalez granted in part the Debtors'
request to the extent that:
1. the relief sought against the S&C plaintiffs is reserved
awaiting a determination by the state court as to whether
any of their claims are direct or derivative, provided
however, that if the state court determines that any claim
is derivative, the claim would be subject to the Section
362 automatic stay of the Bankruptcy Code;
2. the Coy and McClaren plaintiffs are stayed from continuing
to prosecute their claims because they are based on injury
to the corporation that devolved upon the claimants, thus,
are derivative claims that are property of the Debtors'
estate and subject to Section 362 automatic stay of the
Bankruptcy Code;
3. the relief sought against the Bullock plaintiffs is
reserved awaiting a decision by the state court of whether
any of their "holding" claims are direct or derivative,
provided however, that if any of those claims are
determined to be derivative by the state court, further
prosecution of those claims would be stayed by Section 362;
and
4. the plaintiffs in the remaining F&A actions and the Young
action are ordered to contact the Chambers for the purpose
of scheduling a hearing at which time the parties can
advise the Court as to the status of those actions.
The Reorganized Debtors eventually filed a supplemental motion
asking the Court that the Plaintiffs in the Remaining Actions and
the McMurray Action be enjoined from further prosecuting their
Holding Claims, and to rule that the Claims are derivative and
constitute property of the Debtors' Chapter 11 estates.
Chinn and McMurray Plaintiffs Oppose
The Chinn and McMurray Plaintiffs pointed out that, in reality,
the Debtors are asking the Court to reconsider its Global Stay
Order, in which the Court ruled, with specific reference to the
Chinn Plaintiffs, "that the relief sought in the Motion against
the S&C plaintiffs is reserved awaiting a determination by the
state court as to whether any of their claims are direct or
derivative, provided, however, that if the state court determines
that any claim is derivative, such claim would be subject to the
Section 362 automatic stay of the Bankruptcy Code."
Michael S. Etkin, Esq., at Lowenstein Sandler, PC, in New York,
noted that the question of whether or not Plaintiffs' claims
were, in fact, derivative, still awaited a final ruling by the
Southern District of Texas. Accordingly, the Plaintiffs sought
an adjournment of the hearing on the supplemental motion pending
Judge Harmon's final ruling on their reconsideration motion.
After due consideration, Judge Gonzalez orders that:
(1) the Plaintiffs in the Chinn, Young and McMurray Actions
are enjoined from further prosecuting any claims in the
Actions because all of the claims are based on diminution
in the value of Enron stock, which the Plaintiffs held
during the relevant period;
(2) the Claims are derivative claims as a matter of law and
constitute property of Enron's Chapter 11 estates pursuant
to Section 541(a) and subject to the automatic stay under
Section 362(a)(3); and
(3) the Order will not have any affect on, or stay the
prosecution of any claims alleged in the Stayed Actions
by the Official Committee of Unsecured Creditors pursuant
to:
(a) the Aug. 28, 2006 Order of the U.S. District Court
for the Southern District of Texas in C.A. Nos.
01-3645, H-03-5542 and H-04-1546,
(b) the Feb. 28, 2005 Order of the District Court for
the Southern District of Texas in C.A. Nos. H-01-3645
and H-04-1546, and
(c) the June 14, 2004 and Sept. 12, 2005 Orders of the
District Court for the Southern District of Texas in
C.A. No. H-03-862.
About Enron Corp.
Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply. Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed. The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen,
Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler,
Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP,
Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L.
Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent
the Debtor. Jeffrey K. Milton, Esq., Luc A. Despins, Esq.,
Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank,
Tweed, Hadley & McCloy LLP represents the Official Committee of
Unsecured Creditors. (Enron Bankruptcy News, Issue No. 182;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
ENRON CORP: Court Approves Deseret Generation Settlement Agreement
------------------------------------------------------------------
The Honorable Arthur Gonzalez of the U.S. Bankruptcy Court for the
Southern District of New York approved a settlement agreement
among Enron Corp., Enron North America Corp., and Enron Power
Marketing Inc., and Deseret Generation & Transmission Co-
Operative.
As reported in the Troubled Company Reporter on Nov. 23, 2006, the
Enron Entities and Deseret Generation are parties to an
Oct. 31, 2001, electricity SWAP agreement and an contingent call
contract, dated April 30, 2001. EPMI and Deseret had also entered
into a Confirmation Agreement, dated April 30, 2001, for an
electricity swap pursuant to the Western Systems Power Pool
Agreement.
On May 1, 2001, Enron executed a $75,000,000 Guaranty to support
ENA's obligations to Deseret under the Contingent Call Contract.
On Aug. 1, 2002, Deseret filed Claim Nos. 2594, 2595 and 2597 each
for $16,548,209 against Enron, EPMI and ENA. Deseret alleges that
Enron agreed to guaranty ENA and EPMI's obligations arising under
the Contracts through the Guaranty and an unexecuted guaranty
agreement attached to the EPMI SWAP Contract.
The Debtors subsequently filed objections to Deseret's claims
seeking to avoid the contracts and to reduce Deseret's claim
amounts.
To settle their disputes, the parties reached a settlement
agreement, which specifically provides that:
(1) Deseret's Claim No. 2597 will be reduced and allowed as a
Class 5 Allowed General Unsecured Claim against ENA for
$2,150,925;
(2) Deseret's Claim No. 2595 will be reduced and allowed as a
Class 6 Allowed General Unsecured Claim against ENA for
$6,772,315;
(3) Deseret's Claim No. 2594 will be disallowed and expunged
in its entirety;
(4) they will mutually release each other from all claims
related to the Contracts; and
(5) the Adversary Proceeding will be dismissed with
prejudice.
Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply. Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed. The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen,
Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler,
Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP,
Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L.
Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent
the Debtor. Jeffrey K. Milton, Esq., Luc A. Despins, Esq.,
Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank,
Tweed, Hadley & McCloy LLP represents the Official Committee of
Unsecured Creditors. (Enron Bankruptcy News, Issue No. 183;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
ENVIROSOLUTIONS HOLDINGS: Moody's Revises Outlook to Negative
-------------------------------------------------------------
Moody's Investors Service changed the rating outlook of
EnviroSolutions Holdings Inc. to negative from stable.
The change in outlook reflects the company's performance at
levels, which are below Moody's expectations since the ratings
were first assigned in June 2005.
Specifically, the change in outlook expresses concern regarding
negative cash flow generation, higher than expected capital
expenditures, and delays in the implementation of the company's
rail-based transportation strategy.
The delays gave rise to higher than anticipated disposal costs and
lower than expected gross margins and EBIT to interest coverage.
The change in outlook to negative also reflects emerging weakness
in residential construction along the Eastern seaboard and the
potential impact of any adverse energy price fluctuations in 2007
on EnviroSolutions' costs.
Continuing negative or weak cash flow metrics, significant debt-
financed acquisitions and lack of progress toward improved total
leverage metrics could result in a downgrade.
The ratings could also be downgraded if pricing and volume trends
deteriorate in the company's major markets, capital expenditure
requirements significantly exceed expectations or the company's
rail links at Copper Ridge and Big Run do not become fully
operational in fiscal 2007.
If the company is able to execute on existing investments in
disposal assets to profitably improve internalization, thereby
resulting in positive free cash flow on a sustainable basis,
combined with progress toward debt reduction below adjusted debt
to EBITDA ratios of five times, this could stabilize the ratings
outlook.
These ratings were affected:
-- The B1, LGD3, 41% rated $40 million senior secured revolver
due 2011;
-- The B1, LGD3, 41% rated $185 million senior secured term
loan B due 2012;
-- The B2 Corporate Family and Probability of Default ratings
of EnviroSolutions Holdings, Inc.;
The outlook for the ratings was changed to negative from stable.
EnviroSolutions Holdings Inc., based in Chantilly, Virginia, is an
integrated solid waste management company with a presence in the
Northeastern and Mid-Atlantic United States. The company was
formed in 2003 and since then has completed a series of landfills,
transfer stations and hauling operations. Almost all of the
company's revenues and cash flow are derived from operations in
Northern Virginia, Maryland and New Jersey. The company's assets
include three landfills, three transfer stations and several
hauling and collection operations. Revenue for the twelve months
ended Sept. 30, 2006, was about $169 million.
FAREPORT CAPITAL: Cancels Proposed Financing & Debt Restructuring
-----------------------------------------------------------------
Fareport Capital Inc. provides an update with regards to its
compliance with Ontario Securities Commission Policy 57-603.
Fareport reports that the proposed financing and debt
restructuring has been cancelled, as BG Capital Management Corp.
has decided not to proceed.
Accordingly, the conversion of substantially all of the company's
current debt obligations, the consolidation of the company's
issued and outstanding shares, the creation of a new class of
preference shares, the private placement financing of its common
shares, and the shareholders' meeting required to approve various
aspects of the proposed financing and debt restructuring have also
been cancelled.
Fareport is, however, hopeful that a new financing arrangement
with potential investors can be arranged in the near term.
Fareport reports that the audit of its financial statements for
the years ended July 31, 2006, and for July 31, 2005, has been
completed and financial statements and related Management
Discussion and Analysis will be filed with SEDAR.
Regarding the agreement to settle the civil claim against
Fareport's former management, advisors, and certain investors, the
revised settlement agreement will be completed pending closing of
a new financing arrangement.
The temporary management and insider cease trade order imposed
pursuant to OSC Policy 57-603 continues to be in effect. The MCTO
prohibits present and certain past directors, officers, and
insiders of Fareport from trading in its securities.
Fareport will continue to provide updates on these and related
matters in accordance with OSC Policy 57-603.
Fareport Capital Inc. (TSX-V: CAB) -- http://www.fareport.com/--
operates the Crown Taxi and Olympic Taxi brokerages and dispatch
operations in the city of Toronto. The Crown Taxi division
dispatches over 300 vehicles. In addition, through its Crown
Transportation and Trax Shuttle Services divisions, the Company
also offers charter transportation services.
* * *
Fareport Capital Inc.'s balance sheet at April 30, 2006, showed
CDN$1.7 million in total assets and CDN$3.8 million in total
liabilities, resulting in a CDN$2.1 million shareholders' deficit.
The company's shareholders' deficit at July 31, 2005, stood at
CDN$1.5 million.
FINOVA GROUP: Court Okays Thaxton Litigation Pact & Reopens Case
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave orders
to FINOVA Group Inc. and FINOVA Capital Corp. to:
-- approve the Thaxton Litigation settlement;
-- approve the ongoing sale of FINOVA's remaining assets,
the wind-up of the Reorganized Debtors' operations, and
the future dissolution of FINOVA;
-- reopen FINOVA Group's chapter 11 case; and
-- channel claims related to the Reorganized Debtors'
Chapter 11 Plan into the Bankruptcy Court.
Relevant Plan Provisions
As reported in the Troubled Company Reporter on Nov. 17, 2006,
FINOVA's joint chapter 11 plan was funded by a $5.6 billion senior
secured loan to FINOVA Capital from Berkadia LLC. Berkadia is the
joint venture of Berkshire Hathaway Inc. and Leucadia National
Corporation. In return, FINOVA Group issued to Berkadia
approximately 61 million shares of common stock representing 50%
of FINOVA Group's outstanding shares after giving effect to
implementation of the Plan.
The proceeds of the Berkadia Loan, together with cash on hand and
FINOVA Group's issuance of approximately $3.25 billion of 7.5%
Senior Secured Notes maturing 2009 due 2016, were used to
restructure FINOVA's debt.
The New Senior Notes were secured by a second-priority lien on (i)
the common stock of FINOVA Capital held by FINOVA Group, and (ii)
a secured intercompany note in the principal amount of the New
Senior Notes that was issued to FINOVA Group by FINOVA Capital.
The terms of the New Notes effectively precluded FINOVA from
conducting any new business other than realizing the value of its
assets until those Notes were repaid in full.
The New Notes were issued to the general unsecured creditors of
FINOVA Capital and to certain holders of interests related to the
FINOVA Trust.
Status of Certain Plan Distributions
As of Nov. 15, 2006, the holders of the New Senior Notes will have
received:
a. cash distributions representing 70% of their claims and
b. payments aggregating approximately $1.5 billion in
principal amount of the New Senior Notes plus interest of
$994 million.
Additionally, FINOVA repurchased and retired $285 million of New
Senior Notes at a discount. Approximately $1.5 billion in
principal amount of New Senior Notes is still outstanding.
FINOVA anticipated that there will be insufficient funds to
satisfy in full the obligation arising under the New Notes.
"Gating Issues"
FINOVA said, to effectuate a complete windup, it requires the
Court to resolve key issues it names as "gating issues,"
including:
-- approving the terms of the settlement of litigation related
to The Thaxton Group Inc.;
-- a determination of the 5% Solvency Issue; and
-- an adjudication of the remaining claims.
Thaxton Litigation
In the litigation, the Noteholders alleged that FINOVA conspired
with the Thaxton Debtors to defraud them, and FINOVA and various
parties should be liable for those alleged actions.
On Sept. 11, 2006, all the parties involved in the litigation
reached a global settlement. The salient terms of the settlement
were presented to the South Carolina District Court for approval.
The salient terms of the Master Settlement Agreement are:
a. All Thaxton Noteholders and other unsecured creditors of
the Thaxton Debtors will be certified for settlement
purposes;
b. On the effective date of the agreement, FINOVA will receive
approximately $81 million in cash in full satisfaction of
its claim in the principal amount of $110 million. FINOVA
will also receive half of all net recoveries in excess of
$2.27 million from the avoidance actions in the Thaxton
cases, excluding any recoveries from certain parties named
in the Master Settlement Agreement;
c. On the settlement effective date of the agreement, the
Thaxton Noteholders and other unsecured creditors will
receive all real and personal property of the Thaxton
Debtors (excluding property to be received by FINOVA);
d. All the Thaxton parties will release FINOVA Group,
FINOVA Capital, and certain related parties from all
Thaxton-related claims. All releases will be incorporated
in the Thaxton Debtors' chapter 11 plan;
e. FINOVA Capital and FINOVA Group will release the Thaxton
parties from all claims and liens; and
f. The Master Settlement Agreement must be approved by the:
1. South Carolina District Court in the Settlement Case;
2. Delaware Bankruptcy Court for the Thaxton Cases; and
3. Delaware Bankruptcy Court for FINOVA's cases.
In addition, the settlement effective date cannot occur
until:
1. the effective date of the Thaxton Plan has occurred;
2. the District Court Summary Judgment order has been
vacated; and
3. the Thaxton litigation has been dismissed.
5% Solvency Issue
FINOVA's Plan required it to set aside amounts for eventual
distribution to equity holders at such time as FINOVA would be
permitted to distribute dividends to equity holders. This is
known as the 5% Holdback.
As of Nov. 15, 2006, FINOVA has approximately $78 million in
segregated account in connection with the 5% Holdback.
Because it is insolvent, FINOVA sought the Bankruptcy Court's
permission to cease escrowing the 5% Holdback and use the
segregated account to pay expenses, debts, and other obligations.
Certain members of the statutory equity committee objected to
FINOVA's motion.
The Bankruptcy Court ruled that the 5% provision did not create a
debt to the equity holders. FINOVA would not be able to pay the
equity holders if FINOVA is insolvent or if the payments would:
-- render FINOVA insolvent,
-- be a fraudulent conveyance, or
-- be illegal under applicable law.
The Bankruptcy Court left unresolved the issue of FINOVA's
ultimate solvency.
If the Bankruptcy Court determines that FINOVA is solvent, the
equity holders will receive the balance of the segregated account.
On the other hand, if FINOVA is insolvent, the segregated account
will be used to pay FINOVA's expenses, debts, and other
obligations.
Remaining Claims
More than 3,500 proofs of claims were filed against FINOVA.
At this time, FINOVA said, there are 29 outstanding state and
local tax claims filed by nine taxing authorities totaling
$5 million. In addition, there are five outstanding non-tax
claims.
Re-opening of Chapter 11 Case
FINOVA said that because it will never be able to repay the
Noteholders in full, it would ultimately liquidate. In
anticipation of this inevitability, FINOVA sought and obtained the
Court's approval to take all necessary steps to wind up its
affairs and dissolve itself and its affiliates.
FINOVA said that obtaining shareholder approval for its
dissolution is inappropriate because its shareholders will not
receive any liquidation distributions, given that Noteholders will
not recover in full.
FINOVA wanted to reopen the chapter 11 case of FINOVA Group so
that it may available of a Delaware law provision that allows a
Delaware corporation in bankruptcy to take any action directed by
a bankruptcy court order "with like effect as if exercised and
taken by unanimous action of the directors and stockholders of the
corporation."
Channeling Claims
FINOVA also obtained authority from the Bankruptcy Court to
channel any claims of the Noteholders or the indenture trustee for
the New Senior Notes against FINOVA arising under the Plan, the
ongoing liquidation, the New Senior Notes, or its winding up.
About Finova
Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and mid-sized businesses;
other services include factoring, accounts receivable management,
and equipment leasing. The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets. FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on
shaky ground. The company and its debtor-affiliates and
subsidiaries filed for Chapter 11 protection on March 7, 2001
(U.S. Bankr. Del. 01-00697). Pachulski, Stang, Ziehl, Young &
Jones P.C. and Wachtell, Lipton, Rosen & Katz represent the
Official Committee of Unsecured Creditors. Daniel J.
DeFranceschi, Esq., at Richards, Layton & Finger, P.A., represents
the Debtors. FINOVA has since emerged from Chapter 11 bankruptcy.
Financial giants Berkshire Hathaway and Leucadia National
Corporation (together doing business as Berkadia) own FINOVA
through the almost $6 billion lent to the commercial finance
company. Finova is winding up its affairs.
Going Concern
As reported in the Troubled Company Reporter on May 16, 2006,
Ernst & Young LLP expressed substantial doubt about The Finova
Group Inc.'s ability to continue as a going concern after auditing
the company's financial statements for the year ended Dec. 31,
2005. The auditing firm pointed to the company's negative net
worth as of Dec. 31, 2005 as well as its limited sources of
liquidity to satisfy its obligations.
At Sept. 30, 2006, the Company's balance sheet showed
$473.55 million in total assets and $1,076.45 million in total
liabilities, resulting in a $602.90 million stockholders' deficit.
FIRST MERCURY: Restructuring Prompts S&P's BB Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' counterparty
credit rating to First Mercury Financial Corp. and withdrew its
'BB' counterparty credit and senior debt ratings on First Mercury
Holdings Inc.
The rating action comes after FMR's recent IPO and corporate
restructuring.
The outlook is stable.
Post-IPO, FMR continues to derive its earnings from First Mercury
Insurance Co. as well as other non-rated insurance and non-
insurance subsidiaries.
"Standard & Poor's continues to view any senior obligations of
FMIC's parent holding company, FMR, as subordinate to senior
obligations at FMIC," explained Standard & Poor's credit analyst
Tracy Dolin.
FMR's consolidated pro forma nine-month 2006 pretax GAAP earnings
totaled a satisfactory $28.2 million. Total pro forma
shareholder's equity totaled $164.4 million as of Sept. 30, 2006.
The consolidated parent's financial leverage has improved as it
repurchased all outstanding senior unsecured notes in conjunction
with the IPO.
The stable outlook reflects continued strong earnings and secure
capital strength at FMIC. The outlook also reflects healthy
earnings contributions from the other, unrated affiliates.
Standard & Poor's does not expect FMR to issue debt that would
exceed tolerances for the current rating structure.
FOAMEX INTERNATIONAL: Court OKs Amended Plan Solicitation Protocol
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware directs
Foamex International Inc. and its debtor-affiliates to mail or
cause to be mailed by Dec. 7, 2006, the Solicitation Packages to
the claim or equity security holders entitled to vote on their
Second Amended Plan of Reorganization.
Under the Second Amended Plan, the parties entitled to vote to
accept or reject the Second Amended Plan are:
(1) claim holders of Class 3 claims -- Senior Secured Note
Claims;
(2) interest holders of Class 9 -- Existing Preferred Stock;
and
(3) interest holders of Class 10 -- Existing Common Stock.
Prior to the transmission of the Solicitation Packages, Judge
Kevin Gross authorizes the Debtors to fill any missing dates and
information, correct any typographical errors, reformat and make
other non-material, non-substantive changes to the Second Amended
Plan and Disclosure Statement and any other materials in the
Solicitation Package as they deem appropriate.
Judge Gross directs the Debtors to serve the Unimpaired Party
Notices to holders of these unimpaired claims pursuant to the
Second Amended Plan:
(a) Administrative Claims, Priority Tax Claims, and DIP
Financing Claims;
(b) Class 1 claims -- Other Priority Claims;
(c) Class 2 claims -- Other Secured Claims;
(d) Class 4 claims -- Senior Subordinated Note Claims;
(e) Class 5 claims -- General Unsecured Claims;
(f) Class 6 claims -- Unliquidated Claims;
(g) Class 7 claims -- Intercompany Claims;
(h) Class 8 claims -- Equity Interests in Surviving Debtor-
Subsidiaries; and
(i) Class 11 claims -- Other Common Equity Interests in Foamex
International.
Judge Gross sets Nov. 15, 2006, as the record date with respect to
all holders of claims and equity interests in the Debtors entitled
to vote on the Second Amended Plan.
All ballots and master ballots must be delivered to Bankruptcy
Services LLC, the Debtors' Court-appointed balloting agent, by
Jan. 4, 2007, at 4:00 p.m., prevailing Eastern Time.
Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts. Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors. As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts. (Foamex International Bankruptcy
News, Issue No. 34; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
FOAMEX INTERNATIONAL: Chapter 11 Cases Reassigned to Judge Gross
----------------------------------------------------------------
The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware has reassigned the jointly administered
Chapter 11 cases of Foamex International Inc. and its debtor-
subsidiaries to Judge Kevin Gross.
The reassignment includes the two pending adversary proceedings in
the Debtors' cases:
* Chorman v. Foamex International Inc., et al.,
Case No. 06-50824-PJW
* Foamex International Inc., et al., v. U.S. Bank, N.A.,
Case No. 06-50913-PJW
Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts. Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors. As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts. (Foamex International Bankruptcy
News, Issue No. 34; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
FORD MOTOR: November U.S. Sales Down 10% Compared with Last Year
----------------------------------------------------------------
Ford Motor Company's dealers delivered 182,259 vehicles to U.S.
customers in November, down 10% compared with a year ago.
November car sales were 3% lower than a year ago, reflecting lower
deliveries to fleet customers. Sales to individual retail
customers were up reflecting higher sales for the company's new
mid-size sedans (Ford Fusion, Mercury Milan and Lincoln MKZ).
Fusion was up 66%, Milan was up 29% and MKZ was up 83%. These
2007 models feature standard side-air bags and available all-wheel
drive.
Overall, truck sales were down 13%, but the company's all-new,
full-size sport utility vehicles (Ford Expedition and Lincoln
Navigator) posted higher sales. Expedition sales were up 14% and
Navigator sales were up 65%.
At the end of November, Ford, Lincoln and Mercury inventories were
estimated at 631,000 units. This level is 122,000 units lower
than a year ago. The company estimates 85% of the inventory is
new 2007 models.
North American Production
In the fourth quarter 2006, the company plans to produce 620,000
vehicles (240,000 cars and 380,000 trucks). This plan is 15,000
units lower than the previously announced plan reflecting the
temporary suspension of Freestar production at the Oakville
Assembly Plant in Ontario, Canada.
In the first quarter 2007, the company plans to produce 750,000
vehicles (240,000 cars and 510,000 trucks). In the first quarter
2006, the company produced 876,000 vehicles (316,000 cars and
560,000 trucks). Earlier, the company indicated first half 2007
production would be 8-12% lower than the first half 2006. The
first quarter 2007 plan is consistent with the high end of this
range.
About Ford
Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F)
-- 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.
FORD MOTOR: Moody's Junks Rating on $3 Bil. Convertible Notes
-------------------------------------------------------------
Moody's Investors Service assigned a Caa1, LGD4, 62% rating to
Ford Motor Company's $3 billion of senior convertible notes due
2036.
The rating reflects Moody's expectation that proceeds will be used
to enhance Ford's liquidity position, and also reflects Moody's
Loss Given Default Methodology.
"This convertible issue is an expected component of Ford's
liquidity-building funding program that also includes an announced
$8 billion secured revolving credit facility and a
$7 billion secured term loan," Bruce Clark, senior vice president
with Moody's, said.
Ford has indicated that due to the level of market interest, the
ultimate size of the revolver and the convertible notes could be
larger than the originally indicated amounts of $8 billion and
$3 billion respectively.
Should such increases occur, Moody's anticipates that the
company's current rating levels would be maintained.
These ratings are:
-- corporate family - B3 with Negative Outlook;
-- secured debt - Ba3, LGD2,19%;
-- senior unsecured debt - Caa1, LGD4, 62%; and,
-- trust preferred -- Caa2, LGD6, 93%.
Ford Motor Company, headquartered in Dearborn, Michigan, is the
world's third largest automobile manufacturer.
FORD MOTOR: S&P Junks Rating on Proposed $3-Bil. Senior Debt
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
Ford Motor Co.'s proposed $3 billion senior unsecured convertible
debt issue.
The company is in the process of raising several billion dollars
of financing, including the proposed convertible offering. Much
of the pending financing is secured, resulting in Ford's unsecured
debt being rated two notches below the credit corporate rating.
Ford intends to use the proceeds from the various borrowings under
the senior secured credit facilities and from the offering of the
unsecured notes to fund prospective cash operating losses and
restructuring plans while preserving cash and short-term VEBA
trust balances near current levels of about $20 billion.
GETTY IMAGES: Form 10-Q Filing Delay Prompts Default Notice
-----------------------------------------------------------
Getty Images Inc. disclosed in a regulatory filing with the
Securities and Exchange Commission that on Nov. 22, 2006, it
received two notices of a purported default from certain holders
of the company's $265 million aggregate principal amount of 0.50%
Convertible Subordinated Debentures, Series B due 2023.
The default notices, purportedly representing an aggregate of
approximately 29% of the issued and outstanding Debentures,
asserted that because the company is delinquent in filing its
Quarterly Report on Form 10-Q for the third quarter of 2006 with
the SEC, the company is in default under the Indenture dated as of
Dec. 16, 2004, between the company, as issuer, and The Bank of New
York, as Trustee, relating to the Debentures.
The notices of default demanded that the company cure the
purported default within 60 days from their receipt, after which
such default would develop into an "Event of Default," as defined
in the Indenture. The company is still in the process of
determining the validity of the notices, including the purported
ownership interests represented by the notices. The company has
received no other notices of default with regard to the
Debentures.
The company believes that it has fully performed its obligations
under the Indenture because the Indenture does not contain an
express covenant requiring the company to provide the Trustee or
the bondholders with periodic reports such as the Quarterly Report
on Form 10-Q for the third quarter of 2006. While section 314(a)
of the Trust Indenture Act of 1940 is incorporated into the
Indenture by virtue of Section 17.01 thereof and contemplates the
company providing the Trustee with copies of its periodic reports,
the company believes that the TIA does not require such reports to
be provided within any prescribed period of time. The company
intends to furnish to the Trustee copies of its Quarterly Report
on Form 10-Q for the third quarter of 2006 after it files the
report with the SEC. The company believes that this action would
cure any default of the Indenture provision in question, if any
default exists.
Consequently, in the company's view, these notices of default are,
and any other similar notices of default that may be received in
the future will be, without merit.
While the Company has questioned the claimants' legal theory as to
whether it was in default under the terms of the Indenture, if an
"Event of Default" were to occur following the 60 day cure period,
the Trustee or holders of at least 25% in aggregate principal
amount of the Debentures then outstanding would have the
contractual right to declare all unpaid principal and accrued
interest on the Debentures then outstanding to be immediately due
and payable. The company believes that if an "Event of Default"
were to occur and the Debentures were accelerated, it has adequate
financial resources to pay any unpaid principal and any interest
that would then be due on the Debentures.
Internal Investigation
The company had previously stated that its board of directors
established a special committee to conduct an internal
investigation relating to the company's stock option grant
practices and related accounting for stock option grants. The
review is being conducted with the assistance of outside legal
counsel retained by the special committee.
The Division of Enforcement of the Securities and Exchange
Commission had earlier notified the company that it is conducting
an informal inquiry into the company's stock option grant
practices, and has requested that the company provide the SEC with
certain information relating to the company's stock option grant
practices. The company is cooperating fully with the SEC in this
informal inquiry.
Filing Delay
As of Nov. 9, 2006, the special committee has not completed its
review of the company's stock option grant practices. Until the
special committee's review is complete, the company says that it
will be unable to file its Quarterly Report on Form 10-Q for the
period ended Sept. 30, 2006, which will not occur within the
prescribed time period for the filing of such Form 10-Q, including
the extension under Rule 12b-25. The company intends to file its
Form 10-Q as soon as practicable after the completion of the
special committee's review.
About Getty Images
Getty Images, Inc., -- http://gettyimages.com/-- (NYSE: GYI)
creates and distributes visual content and the first place
creative professionals turn to discover, purchase and manage
imagery. The company's award-winning photographers and imagery
help customers create inspiring work which appears every day in
the world's most influential newspapers, magazines, advertising
campaigns, films, television programs, books and Web sites.
Headquartered in Seattle, WA and serving customers in more than
100 countries, Getty Images believes in the power of imagery to
drive positive change, educate, inform, and entertain.
GETTY IMAGES: Default Notice Prompts S&P's Negative CreditWatch
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Seattle,
Washington-based visual imagery company Getty Images Inc.,
including lowering the corporate credit rating to 'B+' from 'BB',
and placed the ratings on CreditWatch with developing
implications.
The rating and CreditWatch actions came after the company
reported that it had received notices from bondholders that its
delayed third-quarter SEC Form 10-Q filing constituted an event of
default.
CreditWatch with developing implications indicates that the rating
could be either raised or lowered.
As of Sept. 30, 2006, Getty had $265 million of convertible notes
outstanding.
The bondholders in question claim to control 29% of the
outstanding notes. At least 25% of the bondholders would be
required to accelerate the bonds.
"Although it is not clear whether the late filing would legally
constitute an event of default, the notices received present
heightened risk of an acceleration, and the contentious process
around this issue elevates credit risk," said Standard & Poor's
credit analyst Tulip Lim.
As of Sept. 30, 2006, the company had enough liquid resources to
service the obligation should it become payable.
GLENBOROUGH PROPERTIES: Morgan Stanley Deal Cues Moody's Review
---------------------------------------------------------------
Moody's Investors Service confirmed the ratings of Glenborough
Realty Trust with a stable outlook and will be subsequently
withdrawn.
Moody's placed Glenborough's ratings on review for downgrade after
the REIT's disclosure that it would be acquired by Morgan Stanley
Real Estate for $1.9 billion, which included the repayment or
assumption of Glenborough's existing debt, and redemption of its
Series A convertible preferred stock.
Immediately prior to the closing of the transaction on
Nov. 29, 2006, Glenborough redeemed all of its preferred shares.
This rating action concludes the review initiated on
Aug. 22, 2006, when the transaction was reported.
The last rating action was on Aug. 22, 2006, when Glenborough was
put on review for downgrade.
These ratings were confirmed and will be withdrawn:
* Glenborough Realty Trust Incorporated
-- Preferred stock at Ba3;
-- preferred stock shelf at Ba3
* Glenborough Properties, L.P.
-- Unsecured debt shelf at Ba1;
-- subordinate debt shelf at Ba2
Glenborough Realty Trust Incorporated was a San Mateo, California,
USA-based real estate investment trust that owned
44 office properties encompassing approximately 8 million square
feet as of Sept. 30, 2006. The REIT had net book assets of
approximately $1.2 billion at Sept. 30, 2006.
GLOBAL ENERGY: Sept. 30 Balance Sheet Upside-Down by $3.3 Million
-----------------------------------------------------------------
Global Energy Group Inc. filed its third quarter financial
statements for the three months ended Sept. 30, 2006, with the
Securities and Exchange Commission reporting an $11,943,553 net
loss and no revenues for the three months ended Sept. 30, 2006,
compared with a $268,391 net loss on $143,043 of net revenues in
the comparable period of 2005.
At Sept. 30, 2006, the company's balance sheet showed $5,446,652
in total assets, $8,818,651 in total liabilities, resulting in a
$3,371,999 in total stockholders' deficit.
The company's September 30 balance sheet also showed strained
liquidity with $65,075 in total current assets available to pay
$4,461,447 in total current.
A full-text copy of the regulatory filing is available for free
at http://ResearchArchives.com/t/s?165c
Going Concern Doubt
As reported in the Troubled Company Reporter on May 19, 2006,
Baumann, Raymondo & Company Pa, in Tampa, Florida, raised
substantial doubt about Global Energy Group, Inc.'s ability
to continue as a going concern after auditing the Company's
consolidated financial statements for the year ended Dec. 31,
2005. The auditor pointed to the company's negative working
capital and its accumulated deficit of $12,025,561.
About Global Energy
Global Energy Group Inc. invents, develops, and commercializes
new technologies that improve the energy efficiency of existing
products and processes. The Company focuses on thermodynamics,
heat transfer and heat exchange, which are important to the
heating, ventilation, air conditioning, and refrigeration
industries.
GMAC COMMERCIAL: Good Performance Cues S&P to Hold Low-B Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on six
classes of GMAC Commercial Mortgage Securities Inc.'s commercial
mortgage pass-through certificates from series 2002-C3.
Concurrently, ratings were affirmed on the remaining classes from
this transaction.
The raised and affirmed ratings reflect the stable performance of
the pool and credit enhancement levels that provide adequate
support through various stress scenarios. The upgrades of several
senior certificates reflect the defeasance of
$119.1 million of the pool's collateral since issuance.
As of Nov. 10, 2006, the collateral pool consisted of 107 loans
with an aggregate balance of $736.8 million, compared with
108 loans with a balance of $777.4 million at issuance. The
master servicer, Capmark Finance Inc., provided primarily full
year-end 2005 financial information for 95% of the pool, excluding
defeased collateral.
Based on this information, Standard & Poor's calculated a weighted
average debt service coverage of 1.53x for the pool, an increase
from 1.43x at issuance. All of the loans in the pool are current
except for the seventh-largest loan, which is
90-plus-days delinquent and is the only asset with the special
servicer, also Capmark. A $1.2 million appraisal reduction amount
related to this loan is in effect.
To date, the trust has experienced one loss totaling $160,690.
The top 10 loans secured by real estate have an aggregate
outstanding balance of $197.3 million and a weighted average DSC
of 1.47x, up from 1.40x at issuance. The increase in the DSC
resulted primarily from increases in net cash flow of 10% or more
since issuance for four of the top 10 loans. The fourth-largest
loan is on the master servicer's watchlist, and the aforementioned
seventh-largest loan is with the special
servicer. Both loans are discussed further below.
Standard & Poor's reviewed property inspections provided by
Capmark for all of the assets underlying the top 10 loans, and all
were characterized as "good," except for one that was
characterized as "fair."
The Frog Pond loan is the only asset with the special servicer and
is secured by a 120-unit student-housing complex built in 2002 in
Tallahassee, Florida. The loan was transferred to the special
servicer in August 2006 due to imminent default. As of June 30,
2006, occupancy was 94% and DSC was 1.07x. The borrower asked
Capmark to approve the sale of this property in conjunction with
another property the borrower owns for $21.4 million, but the
borrower has not provided Capmark with the sales agreement.
Foreclosure was filed in October 2006. An ARA for $1.2 million is
in effect.
Capmark reported a watchlist of 23 loans with an aggregate
outstanding balance of $142.2 million. The largest loan on the
watchlist is also the fourth-largest loan in the pool. The ARC
portfolio is secured by 10 manufactured home parks with a total of
1,527 pads. Five properties are in Kansas, three are in Oklahoma,
and one each is in Texas and Colorado.
As of Dec. 31, 2005, the combined occupancy and DSC were 74% and
1.01x, respectively. The decline in DSC was primarily due to
increased operating expenses. The reported DSC as of
June 30, 2006, was 1.57x. The loan will be removed from the
watchlist in December's remittance report.
Standard & Poor's stressed various loans in the transaction,
paying closer attention to the asset with the special servicer and
those on the watchlist. The resultant credit enhancement levels
support the raised and affirmed ratings.
Ratings Raised
GMAC Commercial Mortgage Securities Inc.
Commercial Mortgage Pass-Through Certificates Series 2002-C3
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
D AA+ AA 14.09%
E AA AA- 12.51%
F AA- A 11.19%
G A A- 9.87%
H A- BBB+ 8.55%
J BBB BBB- 6.05%
Ratings Affirmed
GMAC Commercial Mortgage Securities Inc.
Commercial mortgage pass-through certificates series 2002-C3
Class Rating Credit enhancement
----- ------ -----------------
A-1 AAA 22.14%
A-2 AAA 22.14%
B AAA 18.18%
C AAA 16.60%
K BB+ 4.86%
L BB4 .07%
M BB- 3.41%
N B+ 2.88%
O-1 B- 2.51%
O-2 B- 2.35%
X-1 AAA N/A%
X-2 AAA N/A%
N/A - Not applicable.
GOLD KIST: Pilgrim's Pride Deal Cues S&P to Retain Positive Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services reported that its 'B+'
corporate credit rating and other ratings on poultry processor
Gold Kist Inc. remain on CreditWatch with positive implications,
where they were originally placed Aug. 21, 2006.
The CreditWatch update comes after the disclosure that Pilgrim's
Pride Corp. and Gold Kist had entered into a definitive merger
agreement under which Pilgrim's Pride will acquire all of Gold
Kist's common stock outstanding for $21.00 per share in cash.
The transaction was unanimously approved by the boards of
directors of both companies and has a total equity value of
$1.1 billion, plus the assumption of about $144 million of Gold
Kist's debt.
About $190 million of Atlanta, Georgia-based Gold Kist's debt and
about $571 million of the debt of Pittsburg, Texas-based Pilgrim's
Pride is affected.
The ratings were originally placed on CreditWatch following the
unsolicited bid by Pilgrim's Pride for the company for $20.00 per
share in cash. This valued the transaction at about $1 billion
plus the assumption of Gold Kist's debt. At that time, Pilgrim's
Pride anticipated that it could realize cost synergies of
$50 million.
At the same time, ratings on Pilgrim's Pride, including the 'BB'
corporate credit rating, were placed on CreditWatch with negative
implications.
On Sept. 28, 2006, Pilgrim's Pride commenced a cash tender offer
to purchase all of Gold Kist's outstanding shares of common stock
for $20 per share and all of its 10.25% senior notes due
March 15, 2014. The tender was begun because there had been no
progress made in negotiating a transaction with Gold Kist since
Pilgrim's Pride public announcement on Aug. 18, 2006.
On Oct. 28, 2006, Pilgrim's Pride had received tenders and related
consents with respect to approximately 99.9% of the principal
amount of the outstanding Gold Kist notes.
On Nov. 30, 2006, Pilgrim's Pride announced that 67% of the shares
of common stock in Gold Kist had been tendered despite
management's opposition to the $1 billion takeover bid.
"We will meet with Pilgrim's Pride management in the near term to
discuss the company's operating plans, financial policies and
strategies, and the transaction's financing," said
Standard & Poor's credit analyst Jayne Ross.
"The ratings on Pilgrim's Pride could be lowered (depending on how
the transaction is financed) or affirmed, and the ratings on Gold
Kist could be raised or affirmed (depending on how the transaction
is financed)."
Gold Kist is the third-largest poultry producer in the U.S., with
about a 9% market share, and Pilgrim's Pride is the second-largest
poultry producer, with about a 16% market share.
GSAA HOME: Moody's Rates Class B-3 Certificates at Ba2
------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by GSAA Home Equity Trust 2006-19, and ratings
ranging from Aa1 to Ba2 to the mezzanine and subordinate
certificates in the deal.
The securitization is backed by adjustable-rate, Alt-A mortgage
loans originated by Countrywide Home Loans, Inc., SunTrust
Mortgage, Inc., First National Bank of Nevada, Goldman Sachs
Mortgage Company, GreenPoint Mortgage Funding, Inc., and various
other originators, none of which originated more than 10% of the
mortgage loans.
The ratings are based primarily on the credit quality of the loans
and on the protection from subordination, overcollateralization,
excess spread, and an interest rate swap agreement.
Moody's expects collateral losses to range from 1.2% to 1.4%.
Avelo Mortgage, LLC, Countrywide Home Loans Servicing LP,
GreenPoint Mortgage Funding, Inc., and SunTrust Mortgage, Inc.
will service the loans. Wells Fargo Bank, N.A. will act as master
servicer.
Moody's has assigned SunTrust Mortgage, Inc. its servicer quality
rating of SQ2+ as primary servicer of prime loans. Furthermore,
Moody's has assigned Wells Fargo Bank N.A. its top servicer
quality rating of SQ1 as master servicer.
These are the rating actions:
* GSAA Home Equity Trust 2006-19
* Asset-Backed Certificates, Series 2006-19
Class A-1, Assigned Aaa
Class A-2, Assigned Aaa
Class A-3-A, Assigned Aaa
Class A-3-B, Assigned Aaa
Class M-1, Assigned Aa1
Class M-2, Assigned Aa2
Class M-3, Assigned Aa3
Class M-4, Assigned A1
Class M-5, Assigned A2
Class M-6, Assigned A3
Class B-1, Assigned Baa1
Class B-2, Assigned Baa3
Class B-3, Assigned Ba2
HCA INC: Reports $240 Million Net Income in Quarter Ended Sept. 30
------------------------------------------------------------------
HCA Inc. disclosed its results for the quarter ended Sept. 30,
2006. Net income for the third quarter of 2006 totaled
$240 million compared with $280 million in the third quarter of
2005. Results for the third quarter of 2006 include gains on
sales of facilities of $41 million and transaction costs related
to the proposed merger of $9 million. Third quarter 2005 results
include costs, net of estimated recoveries, of $33 million related
to hurricane damage and business interruption and a tax benefit of
$22 million from the repatriation of foreign earnings.
Third Quarter Results
Third quarter 2006 results include additional compensation costs
of $11 million due to the expensing of stock options and employee
stock purchase plan shares associated with the Jan. 1, 2006,
adoption of FASB Statement 123, "Share-Based Payment."
Revenues in the third quarter of 2006 totaled $6.2 billion
compared to $6.0 billion in the third quarter of 2005. Same
facility revenues increased 5.4% compared to the third quarter of
2005. Same facility revenue per equivalent admission increased
6.4% in the third quarter of 2006 (6.8% increase when adjusted for
uninsured discounts) compared to the third quarter of 2005.
Same facility admissions increased 0.1% in the third quarter of
2006 compared to the prior year's third quarter. Same facility
equivalent admissions, which take into consideration outpatient
volumes, decreased 0.9% compared to the third quarter of 2005.
Same facility outpatient surgical cases declined 2.8% in the third
quarter of 2006, due to declines of 4.3% in hospital based
outpatient surgeries and 0.1% in freestanding ambulatory surgical
cases compared to the third quarter of 2005.
The provision for doubtful accounts in the third quarter of 2006
totaled $677 million, or 10.9% of revenues, compared to $618
million, or 10.3% of revenues, in the prior year. Adjusted to
reflect uninsured discounts, the provision for doubtful accounts
totaled $954 million, or 14.7% of revenues, in the third quarter
of 2006, compared to $859 million, or 13.7% of revenues, in the
third quarter of 2005.
Uninsured discounts in the third quarters of 2006 and 2005 were
$277 million and $241 million, respectively. HCA's uninsured
discount policy, which became effective in the first quarter of
2005, lowers revenues and the provision for doubtful accounts by
generally corresponding amounts. Charity care totaled $329
million in the third quarter of 2006, compared to $298 million in
the previous year's third quarter. Same facility uninsured
admissions, which include charity patients, increased by 2,257
admissions or 10.1%, in the third quarter of 2006 compared to the
same period of 2005.
Assets Sold
Effective July 1, 2006, the company sold four hospitals (three in
West Virginia and one in Virginia) to LifePoint Hospitals, Inc.
for $256 million. A gain of $32 million pretax on the sale of the
hospital located in Virginia was recognized in the third quarter
of 2006. Certificates of Need are required for the sale of the
three West Virginia hospitals included in the transaction.
Because filings seeking the revocation of the CONs were pending at
the time of the closing, HCA and LifePoint have agreed that under
certain circumstances, LifePoint may require us to repurchase the
three West Virginia Hospitals. Generally, those circumstances
require a final and nonappealable order revoking the CONs or an
order requiring LifePoint to divest the hospitals or cease
operations. In the event of such a repurchase, the repurchase
price would be based upon the original purchase price and adjusted
for working capital changes, capital expenditures and other items.
Due to the CON proceedings and the repurchase provision, the
company has deferred the recognition of the gain of approximately
$61 million pretax related to the three West Virginia hospitals
until the CON appeals are resolved.
Effective Oct. 1, 2006, the company sold two hospitals in Florida
for $266 million. A pretax gain of approximately $91 million will
be recognized in the fourth quarter of 2006 related to this sale.
Cash Flow and Balance Sheet
HCA's cash flows from operations totaled $653 million in the third
quarter of 2006 compared to $938 million in the third quarter of
2005. Cash flows from operations during the third quarter of 2006
were negatively affected by the combined impact of lower net
income and an increase of $153 million in net accounts receivable
during the third quarter of 2006 (primarily due to a delay by CMS
in the processing of Medicare claims in September as mandated by
provisions of the Deficit Reduction Act) compared to a decrease of
$78 million in net accounts receivable during the third quarter of
2005.
As of Sept. 30, 2006, HCA's balance sheet reflected total debt of
$11.3 billion, stockholders' equity (including common and minority
equity) of $6.0 billion and total assets of $23.1 billion. HCA's
ratio of debt-to-debt plus common and minority equity was 65.2% at
Sept. 30, 2006, compared to 64.8% at Dec. 31, 2005.
HCA had 409.7 million common shares outstanding at Sept. 30, 2006,
compared to 417.5 million shares at Dec. 31, 2005.
About HCA
Headquartered in Nashville, Tennessee, HCA (Hospital Corporation
of America) Inc. (NYSE: HCA) -- http://www.hcahealthcare.com/--
is a healthcare services provider, composed of locally managed
facilities that include approximately 182 hospitals and 94
outpatient surgery centers in 22 states, England and Switzerland.
At its founding in 1968, HCA was one of the nation's first
hospital companies.
* * *
As reported in the Troubled Company Reporter on Nov. 22, 2006,
Fitch downgraded and removed from Rating Watch Negative HCA,
Inc.'s existing ratings as a result of the completion of its
leveraged buyout. Fitch's rating action includes a downgrade of
the company's Issuer Default Rating to 'B' from 'BB+' and a
downgrade of its senior unsecured notes to 'CCC+/RR6' from 'BB+'.
Fitch has also withdrawn the 'BB+' rating on the Unsecured Bank
Facility.
As reported in the Troubled Company Reporter on Nov. 22, 2006,
Moody's Investors Service downgraded the ratings of the senior
unsecured notes assumed in the capital structure of HCA Inc. to
Caa1 from Ba2 after the closing of the leveraged buyout of the
company.
HUDSON PRODUCTS: High Debt Leverage Prompts S&P to Assign B Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Hudson Products Holdings Inc., a leading maker of
axial-flow fans and air-cooled heat exchangers.
At the same time, Standard & Poor's assigned its 'B' senior
secured rating and '2' recovery rating to the company's proposed
$125 million first-lien credit facility, which consists of a
$100 million term loan B and $25 million revolving credit
facility.
The financing will be used to help fund the acquisition of Hudson
by The Sterling Group L.P., as well as to provide liquidity. The
outlook is stable. Pro forma the proposed financing, Hudson is
expected to have approximately $144 million of debt outstanding.
"The ratings on Hudson reflect its high debt leverage, weak debt
service coverage, and somewhat limited scope of operations," said
Standard & Poor's credit analyst Paul Harvey.
"Buffering these factors is a leading market share, stable
operating margins in its fan business, some market diversity,
and the ability to generate free cash flow through most points in
the business cycle," Mr. Harvey continued.
The stable outlook reflects expectations of limited near-term debt
repayment and improving EBITDA levels as Hudson continues to
expand its markets. Ratings would be lowered if Hudson pursues a
more aggressive growth strategy than expected to the detriment of
debt leverage and cash flow generation. Positive rating actions
are possible over the longer term if Hudson is able to expand its
business while improving debt leverage and financial performance.
ITG VEGAS: Case Summary & 52 Largest Unsecured Creditors
--------------------------------------------------------
Lead Debtor: ITG Vegas Inc.
dba Palm Beach Princess, Inc.
dba Palm Beach Casino Line
One East 11th Street, Suite 500
Riviera Beach, FL 33404
Bankruptcy Case No.: 06-16350
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
ITG Palm Beach, LLC 06-16351
Cruise Holdings I, LLC 06-16352
Cruise Holdings II, LLC 06-16353
Royal Star Entertainment, LLC 06-16354
Riviera Beach Entertainment, LLC 06-16355
Orion Casino Corporation 06-16356
International Thoroughbred Gaming 06-16357
Development Corp.
Type of Business: The Debtor operates coastal entertainment
cruises. http://www.pbcasino.com/
Chapter 11 Petition Date: December 4, 2006
Court: Southern District of Florida (West Palm Beach)
Judge: Steven H. Friedman
Debtor's Counsel: John W. Kozyak, Esq.
2525 Ponce de Leon Blvd., 9th Floor
Coral Gables, FL 33134
Tel: (305) 372-1800
Fax: (305) 372-3508
Total Assets Total Debts
------------ -----------
ITG Vegas Inc. $28,738,364 $38,833,865
ITG Palm Beach LLC $20,679,047 $36,419,042
Cruise Holdings I LLC $21,802,340 $41,248,221
Cruise Holdings II LLC $9,578,942 $35,250,366
Royal Star Entertainment LLC $3,199,344 $32,979,703
Riviera Beach Entertainment LLC $0 $37,083,631
Orion Casino Corporation $4,278,668 $34,006,597
International Thoroughbred Gaming $289,374 $33,606,651
Development Corp.
A. ITG Vegas Inc.'s 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
American Express $102,630
P.O. Box 360001
Ft. Lauderdale, FL 33336
Cozen and O'Connor $83,987
W1385
P.O. Box 7777
Philadelphia, PA 19175
McAlpin & Brais, P.A. $38,307
Brickwell Bay View Center
80 SW 8th St., Ste. 2805
Miami, FL 33130
Page Mracheck Fitz & Rose, P.A. $35,811
Miles Media Group $31,238
James Crystal & Broadcasting Charles $30,127
Pigott, P.A.
Palm Beach Newspaper $25,980
William Ackerman Arosemena Avenida $25,911
Balboa
Superior Charter Bus, Inc. $25,615
WRMF-FM Radio $24,545
Word of Mouth Advertising Inc. $20,550
Horr Novak $20,141
Jupiter Stadium Ltd. $17,400
Topline Printing & Graphics $16,858
McLeod & Associates $15,500
Wright Ponsoldt & Lozear LLP $15,000
Arias, Fabrega & Fabrega $14,025
Good Karma Broadcasting LLC $14,000
Palm Beach County Tax Collector $11,690
Boomer Times and Senior Life $11,687
B. ITG Palm Beach, LLC's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Churchill Capital, LLC $50,000
805 Third Avenue, 28th Fl.
New York, NY 10022
Viacom Outdoor $48,900
Cheifetz-Iannitelli-Marcolini
1850 North Central Avenue
Phoenix, AZ 85004
Marie Mariucci $36,530
112 La Costa Court
Holmdel, NJ 07733
Oolala Productions Inc. $21,000
Robert Mackall $14,931
The Mathis Group $12,552
Progressive Energy $11,242
Immediacy Public Relations $10,000
Ticketmaster - Vista $9,083
Top Line Printing & Graphics $8,870
Passport Publication & Media Corp. $8,837
Advertisers Display & Exhibits Inc. $8,669
Casino Careers Online $5,000
Upchurch Watson White & Max $4,849
Bell South Advertising & Publishing $2,620
Corp.
Cusano's $2,410
Compton Dancer Consulting Inc. $2,400
WRMF-FM Radio $2,210
Gate Transportation, Inc. $2,130
Stockton Bates $1,375
C. Cruise Holdings II, LLC's Largest Unsecured Creditor:
Entity Claim Amount
------ ------------
Florida Department of State $150
D. Royal Star Entertainment, LLC's 4 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Page Mracheck Fitz & Rose, P.A. $1,725
Holiday Inn $666
Florida Transporation & Tour Crew $65
Leamington Hotel $51
E. International Thoroughbred Gaming Development Corp.'s 7 Largest
Unsecured Creditors:
Entity Claim Amount
------ ------------
Edward Knurck $9,776
Motto Fernandes Rocha $8,293
Charles P. Reay $8,250
William Ackerman Arosemena Avenida $4,577
Balboa
CT Corporation System $839
CSC $646
American Express $319
JACK IN THE BOX: Weak Credit Metrics Cue Moody's to Cut Ratings
---------------------------------------------------------------
Moody's Investors Service made these changes to the existing
ratings of Jack-in-the-Box Inc. and assigned prospective ratings
to the company's proposed new debt offerings.
This concludes Moody's review for possible downgrade initiated on
Nov. 21, 2006.
Ratings lowered are;
-- Corporate family rating lowered to Ba3 from Ba2
-- Probability of default rating lowered to B1 from Ba3
Ratings affirmed;
-- $275 million gtd. senior secured term loan B, due
Jan. 8, 2011 rated Ba1, LGD2, 17%
-- $200 million gtd. senior secured revolving credit facility,
due Jan. 8, 2008, rated Ba1, LGD2, 17%
Prospective ratings assigned are;
-- $475 million gtd. senior secured term loan B, due
December 2012 rated Ba3, LGD3, 37%
-- $150 million gtd. senior secured revolving credit facility,
due Dec. 2011, rated Ba3, LGD3, 37%
The outlook for the ratings is stable.
The ratings downgrade reflects Jack-in-the-Box's weak credit
metrics to date, management's adoption of a more aggressive
financial profile that will likely result in significantly higher
balance sheet debt levels over the near term in addition to
significant competitive pressures and geographic concentration.
The ratings are supported by Jack-in-the-Box's reasonable scale,
brand awareness, and success of new product offerings, as well as
the positive performance and product diversity potential of its
Qdoba brand.
Moody's also views the company's liquidity as good with
approximately $230 million of cash on its balance sheet as of
October 1, 2006, and no current borrowings under its $200 million
revolving credit facility.
Affirmation of the Ba1 senior secured debt ratings reflects the
benefit provided by a secured interest in all personal property of
the company and the current level of debt in regards to overall
liabilities.
The Ba3 senior secured rating on the proposed $475 million term
loan B and $150 million revolver reflects the security package
which is limited to a pledge of stock and a negative pledge on all
tangible and intangible assets as well as the amount of potential
debt in regards to overall liabilities.
Proceeds from the proposed new bank facility along with
approximately $150 million of cash on hand will be used to finance
the company's Dutch tender offering and refinance its existing
bank facility. Upon completion of the new financing and
subsequent repayment of existing bank debt Moody's will withdraw
its ratings on the current bank facility and assign permanent
ratings to the new bank facility.
Jack in the Box Inc, headquartered in San Diego, California,
operates or franchises 2079 quick-service hamburger restaurants
predominantly on the West Coast, in Texas, and in the Southeast.
The company also operates or franchises 318 fast-casual Qdoba
Mexican Grills and 55 Quick Stuff convenience stores. Revenue for
the Fiscal Year ending Oct. 1, 2006, exceeded $2.7 billion.
LIGAND PHARMA: September 30 Equity Deficit Tops $251.1 Million
--------------------------------------------------------------
Ligand Pharmaceuticals Incorporated delivered its financial
results for the quarter ended Sept. 30, 2006, to the Securities
and Exchange Commission on Nov. 15, 2006.
The company's balance sheet at Sept. 30, 2006, showed $231,867,000
in total assets and $470,712,000 in total liabilities, resulting
in a $251,190,000 stockholders' deficit. At June 30, 2006 the
company had a stockholders' deficit of $238.5 million.
Total revenues from continuing operations for the quarter ended
Sept. 30, 2006 were $36.7 million, compared to $32 million for the
same 2005 period, an increase of 15%. Net product sales for the
quarter ended Sept. 30, 2006 were $36.7 million, compared to
$29.9 million for the same period in 2005, an increase of 23%.
Net loss for the quarter ended Sept. 30, 2006, was $14.9 million
compared to $6.3 million for the same 2005 period.
Operating loss from operations was $15.1 million for the three
months ended Sept. 30, 2006, compared to $4.6 million for the same
2005 period. Loss from continuing operations was $16.1 million
for the three months ended Sept. 30, 2006 compared to $7.3 million
for the same 2005 period. Income from discontinued operations for
the quarter ended Sept. 30, 2006 was $1.2 million, compared to
$1 million for the same 2005 period.
"Ligand's product sales growth in continuing operations of 23% in
the third quarter and 30% in the nine months of 2006 compared to
the same periods in 2005 was driven primarily by price increases
and lower rebate trends." said Paul V. Maier, Ligand's Senior
Vice President and Chief Financial Officer. "As we approach the
expected closing of our AVINZA asset sale, we are pleased to have
completed the sale of our oncology product line and corporate real
estate as part of a strategic process that we believe will enhance
shareholder value. With the anticipated upcoming conversion or
redemption of our outstanding convertible notes, we believe the
Company's financial flexibility will increase substantially while
reducing our cash interest expense as we transition to a dynamic
and highly specialized R&D and royalty company."
A full-text copy of Ligand's quarterly report is available for
free at http://researcharchives.com/t/s?166b
About Ligand
Ligand Pharmaceuticals Incorporated (NASDAQ:LGND)
-- http://www.ligand.com/-- discovers, develops and markets new
drugs that address critical unmet medical needs of patients in the
areas of cancer, pain, skin diseases, men's and women's hormone-
related diseases, osteoporosis, metabolic disorders, and
cardiovascular and inflammatory diseases. Ligand's proprietary
drug discovery and development programs are based on gene
transcription technology, primarily related to intracellular
receptors.
LSI LOGIC: Completes Acquisition of StoreAge Networking for $50MM
-----------------------------------------------------------------
LSI Logic Corporation has completed the acquisition of StoreAge
Networking Technologies Ltd. for approximately $50 million in
cash.
"We are excited to add the significant capabilities of the
StoreAge product portfolio to our industry-leading storage
silicon, systems and software building block offerings," LSI Logic
president and chief executive officer Abhi Talwalkar said.
"We look forward to welcoming StoreAge employees and continuing to
serve the needs of StoreAge channel partners and OEM customers."
"With the rapid growth in data storage capacity, enterprise
customers are seeking enhanced levels of data protection, highly
effective storage management tools and reduced cost of ownership,"
LSI Logic senior vice president and general manager of Engenio
Storage Group Phil Bullinger said.
"Through the acquisition of StoreAge, we anticipate offering our
OEM and channel customers a richer set of products and features
that fully address these important end user requirements."
Under terms of the agreement, LSI will acquire all outstanding
StoreAge capital stock. Additionally, LSI anticipates offering
employment to all StoreAge employees, who are expected to join the
company's Engenio Storage Group upon closing. The transaction is
expected to close in the fourth quarter of 2006 and is subject to
satisfaction of customary closing conditions.
Nesher, Israel-based StoreAge Networking Technologies --
http://www.storeage.com/-- has U.S. offices in Irvine,
California. The company provides SAN storage management and
multi-tiered, data protection software for the enterprise.
About LSI Logic
Milpitas, Calif.-based LSI Logic Corporation (NYSE: LSI) --
http://www.lsi.com/-- provides silicon-to-system solutions that
are used at the core of products that create, store, and consume
digital information. LSI offers a broad portfolio of capabilities
including custom and standard product ICs, host bus and RAID
adapters, storage area network solutions, and software
applications. LSI products enable technology companies in the
Storage and Consumer markets to deliver some of the most advanced
and well-known electronic systems in the market today.
* * *
As reported in the Troubled Company Reporter on Dec. 5, 2006,
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating and other ratings on Milpitas, California-based LSI
Logic Corp.
MAVERICK COUNTY: Deficits Cue S&P to Pare Ratings to BB from BBB
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its underlying rating
on Maverick County, Texas' GO debt three notches to 'BB' from
'BBB' based on the county's recurrent general fund deficits that
have resulted in a significant deterioration of its financial
position.
The outlook is stable.
While management has adopted some measures to restore balanced
operations, officials do not expect a return to positive general
fund reserves in the near future.
The county's low wealth and income indicators and structurally
high unemployment also support the SPUR.
The county's growing and diversified property tax base and
low overall net debt burden mitigate these credit weaknesses.
"We believe Maverick County officials will implement the
necessary measures to stabilize financial performance and
eliminate recurring operating deficits," said Standard & Poor's
credit analyst Horacio Aldrete.
"For the county to return to the 'BBB' category, we would require
it to demonstrate a consistent trend of positive financial
performance, adequate general fund reserves, and improved
financial management policies."
A string of three consecutive years of increasing operating
deficits resulted in a $2.3 million general fund deficit, or a
significant 25.4% of expenditures, at fiscal year-end 2005. Fiscal
2006 unaudited figures reflect another $1.1 million deficit and a
roughly $3.3 million cumulative general fund deficit, or 35.8% of
expenditures.
The county's structural imbalance has been, in large part, the
result of overly aggressive revenue projections and a
disproportionate increase in operating expenditures, in particular
those related to public safety. Since 2003, revenues related to
the housing of federal inmates under the Southwest Border
Prosecution Initiative have been roughly $1.7 million under
budget. County officials have been slow to respond to the loss of
federal revenues. Over the past four years, the county's
operating expenditures have ballooned by nearly 59% compared to a
33% increase in operating revenues.
Officials recently amended the fiscal 2007 budget and reduced
operating expenditures by nearly $800,000, including the
elimination of 40 staff positions. Therefore, county officials
are projecting a $1.7 million operating surplus and a reduction in
the cumulative general fund deficit to $1.2 million, or a still-
significant 12.7% of expenditures, at fiscal year-end
2007.
The county's financial practices are considered vulnerable under
Standard & Poor's financial management assessment methodology,
indicating the government lacks policies in many of the areas
deemed most critical to supporting credit quality. The county
lacks policies in several key areas, including general fund and
liquidity, long-term financial and capital projections, and debt
management.
In addition, revenue and expenditure projections have historically
been overly aggressive with little prudent
validation.
Overall net debt is a low 2.8% of market value and $682 per
capita. Debt amortization is faster than average with 83% of
principal being retired over 10 years.
The rating action affects roughly $17.2 million of debt
outstanding.
MCMORAN EXPLORATION: Sept. 30 Stockholders' Deficit Tops $38.3MM
----------------------------------------------------------------
McMoRan Exploration Co.' balance sheet at Sept. 30, 2006,
showed total assets of $437.8 million and total liabilities
of $476.1 million resulting in a stockholders' deficit of
$38.3 million. At Dec. 31, 2006, stockholders' deficit stood
at $86.5 million.
At Sept. 30, 2006, the company's total current assets stood at
$111.3 million and total current liabilities were $157.5 million,
reflecting a strained liquidity.
The company reported that for the third quarter ended Sept. 30,
2006, it incurred a net loss of $18.5 million from total revenues
of $60.4 million, compared with a net income of $7.1 million from
total revenues of $41.4 million for the same quarter in 2005.
The third-quarter 2006 operating loss reflects $23.4 million of
exploration costs, including $18.5 million of nonproductive
drilling and related costs, primarily associated with the
exploratory wells at Vermilion Block 54 of $6.1 million, Long
Point Deep at Louisiana State Lease 180191 of $11.4 million and
the cost associated with drilling and evaluating the deeper
objective of the Zigler Canal well in Vermilion Parish, Louisiana
of $900,000, and $3.2 million of start-up costs associated with
MPEH(TM).
McMoRan Exploration Co. -- http://www.mcmoran.com/-- is an
independent public company engaged in the exploration, development
and production of oil and natural gas offshore in the Gulf of
Mexico and onshore in the Gulf Coast area. McMoRan is also
pursuing plans for the development of the MPEH(TM) which will be
used for the receipt and processing of liquefied natural gas and
the storage and distribution of natural gas.
MICROFIELD GROUP: Earns $6.6 Million in Third Quarter of 2006
-------------------------------------------------------------
Microfield Group Inc. reported a $6.6 million net income on
$20.7 million of sales for the third quarter ended Sept. 30, 2006,
compared with a $536,640 net income on $20.1 million of sales for
the same period in 2005.
At Sept. 30, 2006, the company's balance sheet showed
$61.4 million in total assets, $16.7 million in total liabilities,
and $44.7 million in total stockholders' equity.
The increase in net income is mainly due to a derivative income of
$9.7 million recorded in the third quarter of 2006, compared with
a derivative expense of $43,817 in the third quarter of 2005.
This is a result of the re-valuation of a warrant obligation
initially recorded in the October 2005 and June 29, 2006, private
placements. The warrant liabilities were reclassified to equity
by the end of the third quarter 2006.
The increase in revenue is a direct result of the company's
acquisition of Christenson Power Services and EnergyConnect.
Sales within Christenson Electric totaled $19,720,000. Revenues
within EnergyConnect were $943,000 for the third quarter of 2006.
Cost of sales totaled $19.4 million for the fiscal quarter ended
Sept. 30, 2006, compared with $16.9 million for the same period in
the prior year. This increase in costs reflects the inclusion of
costs of both Christenson Electric and EnergyConnect for the full
three-month period in 2006. There were no costs included in the
prior year's costs for EnergyConnect and only a portion of the
costs for Christenson Electric from the date of its acquisition.
Gross profit for the three months ended Sept. 30, 2006, was
$1.2 million compared to $3.1 million for the same period in 2005.
This decrease in gross margin is due primarily to a loss on a
specific wind project recognized in its entirety in the third
quarter. The company took a reversal of previously recognized
profit on that project of approximately $900,000 and recorded an
additional write down of $200,000.
Operating expenses were $3.3 million for the three months ended
Sept. 30, 2006, compared with $2.2 million for the three months
ended Sept. 30, 2005. This dollar increase is due to the added
operating costs of the acquired companies.
The company had an operating loss of $2.1 million in the third
quarter of 2006, compared with an operating income of $915,000 in
the third quarter of 2005, due mainly to the combined effects of
lower gross margins and increased operating expenses during the
third quarter of 2006.
Interest expense was $929,000 for the three months ended Sept. 30,
2006, compared with $354,000 for the three months ended Sept. 30,
2005. The increase is due to a $669,000 penalty on registration
of shares issued in the October 2005 private placement. Interest
expense in the current quarter without the registration penalty
was $260,000, and is lower than in the prior year quarter due to
lower outstanding borrowings during the current quarter.
Net cash provided by financing activities during the nine-month
period ended Sept. 30, 2006, was $10.4 million compared with
$1.8 million during the same period in 2005. The increase is
mainly due to proceeds from issuance of common stock, net of
issuance costs, of $13.6 million.
Full-text copies of the company's third quarter financials are
available for free at http://researcharchives.com/t/s?1662
Going Concern Doubt
As reported in the Troubled Company Reporter on May 4, 2006,
Russell Bedford Stefanou Mirchandani LLP in McLean, Virginia,
raised substantial doubt about the ability of Microfield Group to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended Dec. 31,
2005. The auditor pointed to the company's recurring losses and
difficulty in generating sufficient cash flow to meet its
obligations and sustain its operations.
About Microfield Group
Headquartered in Portland, Oregon, Microfield Group, Inc. --
http://www.microfield.com/-- specializes in the installation of
electrical products and services, and in transactions between
consumers of electricity and the wholesale market.
MORGAN STANLEY: S&P Upgrades Rating Classes D & E Notes
-------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the
subordinate notes from Morgan Stanley Auto Loan Trust series 2004
HB-1 and 2004 HB-2.
Concurrently, these ratings were removed from CreditWatch with
positive implications, where they were placed on Nov. 7, 2006. At
the same time, the 'AAA' ratings were affirmed on the class A
notes from these transactions.
The upgrades primarily reflect the strong performance of the
underlying collateral pool of prime auto loan receivables
originated by The Huntington National Bank. With the current pool
factors of 26.79% for series 2004 HB-1 and 39.13% for series 2004
HB-2, the current cumulative net losses are 1.32% for series 2004
HB-1 and 1.05% for series 2004 HB-2, which are below Standard &
Poor's initial expectations.
The 90-plus-day delinquencies, expressed as a percentage of the
current pool balances, are 0.18% for series 2004 HB-1 and
0.16% for series 2004 HB-2. The cumulative recovery rates are
45.78% and 51.34% for series 2004 HB-1 and 2004 HB-2,
respectively.
Both transactions have a concurrent payment structure that
maintains hard credit support, which consists of subordination and
overcollateralization, at a target level for each class.
Currently, all classes of notes from both transactions have credit
support at their target levels. Overcollateralization
has reached its floor in both transactions and is growing as a
percentage of each deal's current pool balance. As a result, the
amount of subordination required to meet the target credit support
level for senior notes decreases, and subordinate notes benefit
from principal payments that are larger than their shares.
Standard & Poor's believe the remaining credit support will be
sufficient to support the notes at the raised and affirmed rating
levels.
Ratings Raised
Morgan Stanley Auto Loan Trust 2004 HB-1
Rating
------
Class To From
----- -- ----
B AAA A+/Watch Pos
C AA+ BBB/Watch Pos
D A+ BB/Watch Pos
Morgan Stanley Auto Loan Trust 2004 HB-2
Rating
------
Class To From
----- -- -----
B AAA A+/Watch Pos
C AAA BBB+/Watch Pos
E A+ BB/Watch Pos
Ratings Affirmed
Morgan Stanley Auto Loan Trust 2004 HB-1
Class Rating
----- ------
A-3 AAA
A-4 AAA
Morgan Stanley Auto Loan Trust 2004 HB-2
Class Rating
----- ------
A-3 AAA
A-4 AAA
MOSAIC COMPANY: Completes $2 Billion Refinancing
------------------------------------------------
The Mosaic Company has completed a refinancing pursuant to which:
* Subsidiaries of Mosaic purchased approximately
$1,410,991,676 aggregate principal amount of their
outstanding senior notes and debentures pursuant to tender
offers.
* Mosaic refinanced a $345 million term loan B facility under
its existing senior secured bank credit agreement.
* Mosaic funded the purchase of the existing senior notes and
debentures and the refinancing of the existing term loan B
facility through the issuance of $475 million aggregate
principal amount of 7-3/8% Senior Notes due 2014 and $475
million aggregate principal amount of 7-5/8% Senior Notes
due 2016, and new $400 million term loan A-1 and $612
million term loan B facilities under its amended and
restated senior secured bank credit agreement.
The senior notes and debentures purchased by subsidiaries of
Mosaic pursuant to tender offers consisted of $124,038,000
aggregate principal amount of Mosaic Global Holdings Inc.'s 6.875%
Debentures due 2007, $370,979,676 aggregate principal amount of
its 10.875% Senior Notes due 2008, $374,065,000 aggregate
principal amount of its 11.250% Senior Notes due 2011, and
$396,090,000 aggregate principal amount of its 10.875% Senior
Notes due 2013, and $145,819,000 aggregate principal amount of
Phosphate Acquisition Partners L.P.'s 7% Senior Notes due 2008.
After giving effect to these purchases, $25,962,000 aggregate
principal amount of Mosaic Global Holdings Inc.'s 6.875%
Debentures due 2007, $23,908,324 aggregate principal amount of its
10.875% Senior Notes due 2008, $29,395,000 aggregate principal
amount of its 11.250% Senior Notes due 2011, and $3,525,000
aggregate principal amount of its 10.875% Senior Notes due 2013
and $4,181,000 aggregate principal amount of Phosphate Acquisition
Partners L.P.'s 7% Senior Notes due 2008 remain outstanding. The
indentures pursuant to which these senior notes and debentures
were issued were amended to remove substantially all of their
restrictive covenants.
About The Mosaic Company
The Mosaic Company -- http://www.mosaicco.com/-- produces and
markets concentrated phosphate and potash crop nutrients. For the
global agriculture industry, Mosaic is a single source of
phosphates, potash, nitrogen fertilizers and feed ingredients
* * *
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Standard & Poor's Ratings Services revised its outlook on The
Mosaic Co. to negative from stable. Standard & Poor's affirmed
its 'BB' long-term and 'B-1' short-term corporate credit ratings
on the company.
As reported in the Troubled Company Reporter on Nov. 9, 2006,
Fitch assigned a 'BB' rating to The Mosaic Company's proposed
senior unsecured notes due 2014 and 2016 and a 'BB+' rating to the
company's proposed senior secured term loans. The ratings
affected approximately $950 million of new senior notes and
$1.05 billion of new term loans.
As reported in the Troubled Company Reporter on Nov 9, 2006,
Moody's Investors Service assigned Ba1 ratings to The Mosaic
Company's proposed new $1.05 billion guaranteed senior secured
credit facilities. Moody's also assigned B1 ratings to $900
million of proposed senior unsecured debt. Mosaic's Ba3 corporate
family rating was affirmed but the ratings of the existing
revolver and the term loan A were downgraded to Ba1 from Baa3 and
those of the existing senior unsecured debt lowered to B1 from Ba3
in accordance with the LGD methodology. The ratings outlook is
stable.
MOTHERS WORK: Earns $9.1 Million in Fiscal Year Ended Sept. 30
--------------------------------------------------------------
Mothers Work Inc. reported $9.1 million of net income for the
fiscal year ended Sept. 30, 2006, compared with a $200,000 net
loss for fiscal 2005.
The company completed the repurchase of $10 million principal
amount of its outstanding 11-1/4% Senior Notes during August and
September of 2006, which resulted in an after-tax charge of $0.10
per share in the fourth quarter of fiscal 2006.
Net income before the debt-repurchase charge for fiscal 2006 was
$9.6 million. The company recognized after-tax stock-based
employee compensation expense of $1.7 million for fiscal 2006, and
did not recognize any stock compensation expense in fiscal 2005
since, pursuant to the provisions of Statement of Financial
Accounting Standards No. 123(R), the company was not required to
expense stock compensation expense until the beginning of fiscal
2006.
Net income before debt-repurchase charge and stock compensation
expense for fiscal 2006 was $11.3 million, compared with a net
loss for fiscal 2005 of $200,000, which did not include any debt
repurchase charge or stock compensation expense.
Net sales for fiscal 2006 increased 7.3% to $602.7 million from
$561.6 million for fiscal 2005. Comparable store sales increased
4.3% during fiscal 2006 (based on 932 locations) versus a
comparable store sales decrease of 2.5% during fiscal 2005 (based
on 832 locations). The increase in net sales for the fiscal year
was primarily driven by increased comparable store sales, as well
as increased sales from the company's proprietary Two Hearts(TM)
Maternity collection, which expanded to an additional 497 Sears(R)
locations during late March 2005. The company also realized sales
increases from the full year contribution of the company's Oh
Baby! by Motherhood(TM) licensed arrangement with Kohl's(R), which
launched during the second quarter of fiscal 2005, as well as from
the company's internet sales and its marketing partnerships.
Operating income was $30.3 million for fiscal 2006, a 113%
increase from the $14.2 million of operating income for fiscal
2005. Adjusted EBITDA was $51.7 million for fiscal 2006, a 53%
increase from the $33.9 million of Adjusted EBITDA for fiscal
2005.
Rebecca Matthias, president and chief operating officer of Mothers
Work Inc. noted, "We are extremely pleased with our strong sales,
earnings and cash flow performance for the fourth quarter and full
year fiscal 2006, as we delivered significantly improved financial
results over fiscal 2005. Our comparable store sales increased
6.5% for the fourth quarter and 4.3% for the full year in fiscal
2006. Our strong sales performance for fiscal 2006, a favorable
price promotional environment compared to last year, and our tight
expense controls, enabled us to deliver earnings per share of
$1.72 excluding the charge related to our debt repurchase, which
exceeded our previous full year earnings per share guidance of
between $1.41 and $1.64 per share."
Mothers Work Inc. designs and retails maternity apparel. As of
Oct. 31, 2006, the company operates 1,593 maternity locations,
including 807 stores, predominantly under the tradenames
Motherhood Maternity(R), A Pea in the Pod(R), Mimi Maternity(R),
and Destination Maternity(TM), and sells on the web through its
DestinationMaternity.com and brand-specific Web sites. In
addition, Mothers Work distributes its Oh Baby! by Motherhood(TM)
collection through a licensed arrangement at Kohl's(R) stores
throughout the United States and on Kohls.com.
* * *
As reported in the Troubled Company Reporter on Oct. 17, 2006,
Moody's Investors Service affirmed Mother Work Inc.'s B3 Corporate
Family Rating and Caa1 rating on the company's $125 million 11.25%
senior notes in connection with the rating agency's implementation
of its new Probability-of-Default and Loss-Given-Default rating
methodology.
NEWMARKET CORP: Moody's Rates $150 Million Senior Notes at B1
-------------------------------------------------------------
Moody's assigned a B1 rating to NewMarket Corporation's new
guaranteed senior unsecured notes due 2016 and affirmed its Ba3
corporate family rating.
The new notes are being issued to refinance the existing
$150 million notes due 2010, extending the maturity of NewMarket's
debt and reducing interest expense.
The outlook for NewMarket's long-term ratings is stable.
Assignments:
* Issuer: NewMarket Corporation
-- $150 Million guaranteed senior unsecured notes due 2016
at B1, LGD4, 64%
NewMarket has made a tender offer for all of the outstanding
$150 million notes due 2010 and is also in the process of amending
its revolving credit facility to extend the maturity to 2011 and
amend the facility's covenants and other terms. The ratings on
the existing $100 million guaranteed senior secured revolving
credit facility due 2009 and the $150 million notes due 2010 will
be withdrawn upon completion of the refinancing.
NewMarket's long-term ratings were upgraded on May 31, 2006, and
reflect the firm's improved credit metrics from past years, the
decline in leverage and healthy free cash flow. The firm has
steadily de-levered its balance sheet to the point where it has
only one debt issue outstanding in addition to its credit
facility, which is currently undrawn, but has approximately
$3.6 million of letters of credit outstanding as of
Sept. 30, 2006.
However, the firm does have significant unfunded pension and off
balance sheet lease obligations. Additionally, management has
indicated a preference to grow the business through acquisitions,
a possible use for its cash and potentially re-levering of the
firm, however Moody's notes that the firm has not made significant
acquisitions in the recent past.
The notching down from the corporate family rating for the senior
unsecured notes reflects their estimated 64% loss-given-default,
unsecured nature and the guarantees from domestic subsidiaries.
The stable outlook reflects Moody's expectation that NewMarket
will modestly improve profit margins and reduce net debt by
generating positive free cash flow. Furthermore, the outlook
incorporates the expectation that the firm will not take on
significant amounts of leverage to fund acquisitions.
Additionally, the stable outlook reflects the good liquidity,
which is a function of the strong cash position and undrawn
revolving credit facility.
NewMarket, through its Afton subsidiary, develops, manufactures
and markets petroleum additives and through its Ethyl subsidiary
is in the tetra ethyl lead business. NewMarket had revenues of
$1.3 billion for the LTM ended Sept. 30, 2006.
NORTEL NETWORKS: Board Taps KPMG as Independent Auditor
-------------------------------------------------------
Nortel Networks Corporation's Board of Directors has selected KPMG
LLP as its independent auditor commencing with fiscal year 2007.
The selection concludes a thorough evaluation in which the company
conducted as part of its corporate renewal process.
"Nortel is committed to building a great company founded on world-
class corporate governance. As such, we conducted a rigorous
selection process in search of an independent auditor with the
optimal skills mix to match our current business requirements,"
said Peter Currie, executive vice president and chief financial
officer, Nortel. "We found that KPMG has the expertise to help us
cement a leading-edge corporate governance practice."
The appointment of KPMG as independent auditor is subject to the
approval of the company's shareholders at its next annual
shareholder meeting.
Deloitte & Touche LLP is the company's current independent
auditor. The intended change in independent auditor does not
result from any disagreement or dissatisfaction between Nortel and
Deloitte.
"Nortel has been pleased with the service of Deloitte & Touche
and, in particular, with the close collaboration provided in
recent years. Deloitte helped Nortel overcome significant
challenges to ensure that our financial reporting is accurate and
up-to-date. We thank them for their service and look forward to
continued work with them in other capacities going forward," said
Mr. Currie.
KPMG was also selected as Nortel Networks Limited's independent
auditor commencing with fiscal 2007.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology
solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband
designed to help people solve the world's greatest challenges.
Nortel does business in more than 150 countries.
* * *
As reported in the Troubled Company Reporter on Oct. 5, 2006,
Moody's Investors Service upgraded its B3 Corporate Family Rating
for Nortel Networks Corp. to B2.
NORTHWEST AIRLINES: Can Assume Management Employment Contracts
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York,
at a hearing held on Nov. 21, 2006, grants Northwest Airlines
Corp. and its debtor-affiliates' request, as modified, for:
(i) authorization to assume, subject to certain limitations,
36 prepetition executory management employment contracts;
and
(ii) approval of five new management employment contracts for
officers promoted during the pendency of their Chapter 11
cases.
The Court declares that:
(1) The Management Employment Contracts will immediately
become effective and enforceable against the Debtors at
the reduced compensation and benefit levels they have
previously implemented;
(2) None of the Management Employment Contracts may be
rejected by the Debtors;
(3) The Debtors are authorized to perform all their
obligations under the Management Employment Contracts, in
accordance with the Contracts' terms. The authorization
may not be modified with respect to any Management
Employment Contract, unless the Court will enter an order
under Section 1113(c) of the Bankruptcy Code authorizing
the Debtors to implement further modifications to their
ratified CBAs previously approved by the Court, in which
event, the Debtors may impose further modifications to the
compensation and benefits under the Management Employment
Contracts, as may be equitable under the circumstances;
(4) In the event of a liquidation of the Debtors' estate, the
provisions of the Court order will not give rise to any
administrative expense claims for severance or otherwise
under any Management Employment Contract, except that
amounts which were accrued or earned in the ordinary
course of the Debtors' operations by the Officers prior to
the liquidation, including earned and unpaid severance for
Officers terminated prior to the liquidation event, will
be deemed an administrative expense claim, notwithstanding
the liquidation event; and
(5) Any reductions in compensation or benefits previously
implemented, or hereafter implemented by the Debtors upon
entry of a Subsequent 1113 Order, will not constitute a
basis for any Officer to claim under any Management
Employment Contract a wrongful termination by the Debtors
or a termination by the Officer for good reason, or for an
administrative priority claim against the Debtors for the
reductions.
The Court notes that the Management Employment Contracts will not
be assumed or deemed assumed by the Debtors unless and until
their Chapter 11 plan have been confirmed by the Court and
substantially consummated, at which time all of the Management
Employment Contracts will be assumed automatically, without
further Court approval or any further action by the Debtors.
As reported in the Troubled Company Reporter on Nov. 7, 2006, by
assuming the Contracts, Northwest will not have any discretion
to breach the Contracts, and the Contracts will be legally
enforceable by the Officers, Bruce R. Zirinsky, Esq., at
Cadwalader, Wickersham & Taft LLP, in New York, related.
Mr. Zirinsky noted that Northwest is not seeking to make any
changes to any of the Contracts nor is it seeking to implement
any new compensation, incentive, benefit or severance programs.
According to Mr. Zirinsky, the assumption of the Contracts is
intended solely to make the existing Contracts legally
enforceable against Northwest on a postpetition basis.
The assumption of the Contracts at this time is necessary,
appropriate and important to the Debtors' continued progress in
achieving a successful reorganization, Mr. Zirinsky asserted. He
noted, among others, during the pendency of the Debtors' Chapter
11 cases, the Officers have continued to perform services to the
estates in an exemplary manner, under difficult circumstances,
and without the benefit and security of assumption of their
Contracts.
Responses
(1) Creditors Committee
Initially, the Official Committee of Unsecured Creditors
expressed some concern about the relief being sought the Debtors
for (i) it might be viewed as providing the Debtors' senior
management with something the unions did not have, and (ii) it
also might be unnecessary.
The Creditors Committee believed that the assumption of
management employment contracts at this time could upset the very
delicate balance between management and labor groups, and in the
process, potentially undo some of the progress made between the
parties.
The Creditors Committee sought to negotiate a compromise with the
Debtors that would provide management with the assurances they
sought, while also ensuring that the Debtors would assume the
Contracts at the same time that they agreed to assume their
collective bargaining agreements.
Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen
PC, in New York, tells the Court that the Creditors Committee and
the Debtors were able to agree that:
(a) The Contracts will become effective and enforceable
against the Debtors upon Court approval of the reduced
compensation and benefit levels implemented previously
by the Debtors;
(b) The Contracts will not be assumed or deemed assumed by the
Debtors until their plan of reorganization is confirmed
and substantially consummated;
(c) The Debtors will perform all of their obligations under
the Contracts; and
(d) The Debtors may only impose further modifications to the
management's compensation and benefits, as may be
equitable if the Debtors obtain authorization from the
Court to further modify the CBAs previously approved by
the Court.
The Debtors' request to assume the contracts provides the senior
managers with assurances that their employment contracts will be
honored, while creating parity among the management and labor
groups by ensuring that the contracts will be assumed in a manner
similar to the CBAs approved in the Debtors' Chapter 11 cases,
Mr. Hazan says.
The Creditors Committee urges the Court to grant the Debtors'
request, as modified.
(2) ALPA
The Air Line Pilots Association, International, asks the Court to
deny the Debtors' request or consider it only at the time of the
Chapter 11 Plan confirmation.
According to the ALPA, on any standard of review, the Debtors'
request for approval of assumption at this time should be denied,
as it:
(1) is unnecessary in light of the September 2005 Court order
authorizing the Debtors to pay prepetition employee
obligations, including obligations under executive
employment agreements;
(2) is presented prior to confirmation without demonstrated
needs;
(3) is in some respects inconsistent with the Debtors'
treatment of collective bargaining agreements;
(4) is being presented in isolation from other likely requests
for approval of executive compensation and eliminates any
requirement of mitigation; and
(5) may negatively impact employee morale.
There is also no showing of a need for this relief at this time,
Richard M. Seltzer, Esq., at Cohen, Weiss and Simon LLP, in New
York, says.
According to Mr. Seltzer, the Debtors have not demonstrated that
attrition in the executive ranks has increased in the last few
months.
"This is not a case where there has been public speculation about
a possible liquidation, indeed there is public speculation, and
trading of claims, based on the belief that Northwest will not
only successfully reorganize, but unsecured creditors will
receive a substantial recovery in excess of 50%, even prior to
the public announcement of US Airways' bid for Delta Air Lines,"
according to Mr. Seltzer.
As further compensation programs can be expected for the
executives in question, the ALPA says that the Debtors' request
is better heard at the time of a plan of reorganization,
presumably within the next six to nine months, when all
compensation can be considered at the same time.
(3) IAM
The International Association of Machinists and Aerospace
Workers, AFL-CIO, also asks the Court to deny the Debtors'
request.
According to the IAM, the Debtors are seeking relief the Court
previously authorized in the September 2005 Wage Order, and any
further relief related to the officer and management contracts
should be considered, if at all, as part of their Plan.
The IAM contends that the assumption of senior management
contracts constitute insider transactions subject to heightened
scrutiny, and that the proposed assumption of the management
contracts fails to meet the business judgment test.
The IAM welcomes the modifications the Debtors made to the relief
requested inasmuch as they no longer seek to assume the
management contracts but rather to treat those contracts in a
manner consistent with the treatment of the CBAs previously
modified under Section 1113(c) of the Bankruptcy Code.
The IAM further notes that modifications were made in large part
in response to the concerns raised by the IAM and other labor
groups to the disparate treatment proposed for management under
the motion as originally filed.
However, the IAM asserts that the requested relief should still
be denied because it is unwarranted, or at best premature, under
the circumstances of the Debtors' Chapter 11 cases.
Debtors Respond to Objections
The Debtors assert that the unions' objections are without merit
and should be overruled.
The Debtors underscore that their proposed action does not modify
any Officer's contract, does not provide any additional
compensation or new benefit to the Officers, and will not restore
the very substantial reductions already imposed upon the
Officers.
In response to the objections, the Debtors state, among others,
that the:
(x) Wage Order does not afford protections requested in
their request;
(y) modified relief parallels the protections provided to
each of the ALPA and the IAM under the terms of the
modified collective bargaining agreements approved by the
Court; and
(z) requested relief is necessary to provide the Officers
legal protection and raise their morale.
The Debtors maintain that it is in their business judgment,
exercised through the independent and disinterested compensation
committee of their board of directors, that the action is
necessary, fair and reasonable, and will assist in the retention
of their management team, and is warranted by all the facts and
circumstances.
The Debtors point out that their management team has been working
for 14 months, at reduced levels of compensation and benefits,
without the basic protections offered by their prepetition
employment contracts. Furthermore, granting the request will not
insulate the Officers from further compensation and benefit
reductions in the event of another round of labor cost
reductions.
The Debtors firmly believe that the Officers are entitled to the
assurance at this time that their rights will be protected.
Creditors' Committee's Consent
The Official Committee of Unsecured Creditors has consented to
the Debtors' request after the Debtors made modifications that
would provide for:
(i) the approval of all Management Employment Contracts as
modified to specify all compensation and benefit
reductions imposed as of the date of the Court order;
(ii) the assumption of the Contracts as of the effective date
of a plan of reorganization; and
(iii) the potential for further modification if the CBAs are
subject to further modification.
The Debtors also clarified that in the event of a liquidation
their request will not give rise to administrative claims.
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 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. The Debtors' exclusive period
to file a chapter 11 plan expires on Jan. 16, 2007.
(Northwest Airlines Bankruptcy News, Issue No. 47; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
NORTHWEST AIRLINES: Wants Stay Enforced Against U.S. Bank
---------------------------------------------------------
Northwest Airlines, Inc., filed a complaint against U.S. Bank,
N.A., solely in its capacity as trustee for the Series 1995
Special Airport Facilities Revenue Refunding Bonds.
Northwest Airlines leases (i) certain capital improvements
related to the transportation and storage of jet fuel at the
Detroit Metropolitan Wayne County Airport pursuant to a Nov. 1,
1995 lease between the Wayne County Airport Authority and
Northwest Airlines, and (ii) related Ground Lease which were
constructed with the proceeds of the Series 1985 Special Airport
Facilities Revenue Bonds (Republic Airlines, Inc. Facilities)
issued by the County.
With funds made available to it through issuance of the 1985
Bonds, Northwest Airlines constructed and installed improvements
at the Airport: (a) four fuel tanks, (b) one eight-inch pipeline
joining a manifold to the fuel tanks, (c) one fuel manifold, and
(d) one line (now capped-off) from the fuel tanks to the former
James M. Davey Terminal.
After constructing the Bond-Financed Facilities, Northwest
Airlines was authorized by the County to construct, and did
construct, fuel facilities in 1997 and 2000. The fuel facilities
were not financed with proceeds of the 1985 Bonds, and are not
subject to the Special Facilities Lease, Ground Lease or any
other lease.
The Existing Non-Bond Funded Fuel Components are used by
Northwest Airlines in conjunction with the Bond-Financed
Facilities to store and deliver jet fuel to aircraft operated by
the company and other air carriers at the Airport.
Barry J. Dichter, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, says the Special Facilities Lease has become burdensome
and the Debtor desires to exercise its rights under the
Bankruptcy Code to reject the Special Facilities Lease, but would
likely endanger the estate and its creditors if it were to do so
without having first obtained declaratory and injunctive relief.
Northwest Airlines brings the action to resolve actual
controversies, whether:
(A) if it were to exercise its rights under the Bankruptcy
Code to reject the Special Facilities Lease,
(a) the Trustee may evict the Debtor from improvements at
the Airport that were not constructed with proceeds of
the 1985 Bonds; and
(b) the Trustee has the right to re-lease to a third party
any of the Existing Non-Bond Funded Fuel Components;
(B) the Authority owes the Trustee any fiduciary duty in
making its determinations regarding the Authority's
contractual relationship with Northwest Airlines with
respect to use of property at the Airport; and
(C) there is any provision in any of the Refunding Bond
documents restricting the rights of the Authority and
Northwest Airlines to (1) enter into a ground lease for
the Existing Non-Bond Funded Fuel Components, and
(2) construct new improvements for the storage and
transportation of jet fuel at the Airport.
Mr. Dichter tells the U.S. Bankruptcy Court for the Southern
District of New York that the Trustee has threatened to sue the
Authority if it were to grant the leases and permits that would
allow Northwest Airlines to fuel aircraft notwithstanding its
rejection of the Special Facilities Lease, and has asserted rights
that do not exist.
Northwest Airlines says the Trustee seeks to prevent it from
rejecting the Special Facilities Lease, and the Trustee's threats
delay its ability to plan for and construct the improvements
necessary to allow it continue its operations at the Airport
uninterrupted by its rejection of the Special Facilities Lease.
Given the importance of Northwest Airlines' operations at the
Airport to its reorganization, the delays interfere with the
company's ability to reorganize and emerge from bankruptcy
successfully and promptly, Mr. Dichter says.
Thus, Northwest Airlines asks the Court to declare that:
-- if it rejects the Special Facilities Lease and Ground
Lease, the Trustee may not evict, or direct the Authority
to evict, it from the Existing Non-Bond Funded Fuel
Components;
-- if it rejects the Special Facilities Lease and Ground
Lease, the Trustee may not re-let to a third party, or
direct the Authority to re-let to a third party, the
Existing Non-Bond Funded Fuel Components;
-- in operating the Airport, the Authority does not owe the
Trustee any fiduciary duty in making its decisions
regarding its relationship with Northwest Airlines,
including, without limitation, with respect to granting the
airline leases for any Bond-Financed Facilities or the New
Fuel Components;
-- there is no restriction in any of the Refunding Bond
documents restricting its rights and those of the Authority
to enter into a ground lease for the Existing Non-Bond
Funded Fuel Components and New Fuel Components; and
-- the Trustee's threats to the Authority violate Northwest
Airlines' rights under Sections 362 and 365 of the
Bankruptcy Code.
Northwest Airlines further asks the Court to issue injunctive
relief prohibiting the Trustee, and all persons and organizations
acting in concert with it, from commencing any action or
proceeding to prevent the airlines from entering into any
agreement with the Authority, except in this Court.
NWA Wants Stay Enforced
Northwest Airlines also asks the Court to enforce the automatic
stay against U.S. Bank.
Northwest Airlines alleges that U.S. Bank has violated the
automatic stay by engaging in:
(x) actions whose purpose is to coerce the them into paying a
pre-petition obligation;
(y) acts to exercise control over property of the estate; and
(z) acts calculated to obtain possession of property of the
estate.
The threats were made to the Authority and the Debtor at a
meeting on September 7, 2006, and were repeated to the Authority
on October 25, 2006, Mr. Dichter informs the Court.
Northwest Airlines alleges that the Trustee's violations of the
stay are intended to compel the Debtor to assume an executory
lease under which it would be obligated to pay more than
$135,000,000, including curing prepetition defaults, to avoid
disruption to its flight operations at its largest hub airport,
the Detroit Metropolitan Wayne County Airport located in Detroit,
Michigan.
The cure amounts and rent obligations under the executory lease
would impose a significant and unwarranted burden on the Debtor,
its creditors, employees and suppliers, but the disruption to its
flight operations at the Airport would undoubtedly be far more
detrimental to the Debtor and its reorganization than assuming
the lease, Mr. Dichter tells the Court.
Northwest Airlines says it does not seek sanctions against the
Trustee at this time, but merely wants the Court to enjoin the
Trustee from commencing litigation against the airline.
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 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. The Debtors' exclusive period
to file a chapter 11 plan expires on Jan. 16, 2007.
(Northwest Airlines Bankruptcy News, Issue No. 47; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
OVERWATCH SYSTEMS: Textron Buyout Cues S&P's Ratings Withdrawal
---------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings, including
the 'B+' corporate credit rating, on Overwatch Systems LLC and
removed the ratings from CreditWatch, where they were placed with
positive implications on Oct. 26, 2006.
The ratings are being withdrawn as a result of the intelligence
analysis tools developer being acquired by Textron Inc. for
$325 million and having all its rated debt repaid.
PILGRIM'S PRIDE: Gold Kist Deal Cues S&P to Retain Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services reported that its 'BB'
corporate credit rating and other ratings on the second-largest
U.S. poultry processor, Pilgrim's Pride Corp., remain on
CreditWatch with negative implications, where they were originally
placed Aug. 21, 2006.
The CreditWatch update comes after the report that Pilgrim's Pride
and Gold Kist Inc. had entered into a definitive merger agreement
under which Pilgrim's Pride will acquire all of Gold Kist's common
stock outstanding for $21.00 per share in cash. The transaction
was unanimously approved by the boards of directors of both
companies and has a total equity value of
$1.1 billion, plus the assumption of about $144 million of Gold
Kist's debt.
About $571 million of debt of Pittsburg, Texas-based Pilgrim's
Pride and about $190 million of Atlanta, Georgia-based Gold Kist's
debt is affected.
The ratings of both companies were originally placed on
CreditWatch after the unsolicited bid by Pilgrim's Pride to
acquire Gold Kist for $20.00 per share in cash. This valued the
transaction at about $1 billion, plus the assumption of Gold
Kist's debt. At that time, Pilgrim's Pride anticipated that it
could realize cost synergies of $50 million.
At the same time, ratings on Gold Kist, including the 'B+'
corporate credit rating, were placed on CreditWatch with positive
implications.
On Sept. 28, 2006, Pilgrim's Pride commenced a cash tender offer
to purchase all of Gold Kist's outstanding shares of common stock
for $20 per share and all of its 10.25% senior notes due March 15,
2014. The tender was begun because there has been no progress
made in negotiating a transaction with Gold Kist
since Pilgrim's Pride public disclosure on Aug. 18, 2006.
On Oct. 28, 2006, Pilgrim's Pride had received tenders and related
consents with respect to approximately 99.9% of the principal
amount of the outstanding Gold Kist notes.
On Nov. 30, 2006, Pilgrim's Pride announced that 67% of the shares
of common stock in Gold Kist had been tendered despite
management's opposition to the $1 billion takeover bid.
"We will meet with Pilgrim's Pride management in the near term to
discuss the company's operating plans, financial policies and
strategies, and the transaction's financing," noted
Standard & Poor's credit analyst Jayne Ross.
"The ratings on Pilgrim's Pride could be lowered (depending on how
the transaction is financed) or affirmed, and the ratings on Gold
Kist could be raised or affirmed (depending on how the transaction
is financed)."
Pilgrim's Pride is the second-largest poultry producer in the
U.S., with about a 16% market share, and Gold Kist is the
third-largest poultry producer, with about a 9% share.
PHILIPSBURG GENERAL: Employees Get $55,000 In "Paid Time Off"
-------------------------------------------------------------
Philipsburg General Hospital's 160 former employees will receive
nearly $55,000 in "paid time off," vacation, personal, sick, and
holiday leave, as per order issued by the Honorable Mary D. France
of the U.S. Bankruptcy Court for the Middle District of
Pennsylvania.
The order was relative to several administrative claims filed by
the American Federation of State, County, and Municipal Employees
(AFSCME) District Council 83, which represents the hospital's
employees.
"This is a tremendous victory for our members," Dominic Sgro,
director of District Council 83, said.
"This order covers leave that employees accrued after the
bankruptcy claim was filed," Alaine Williams, Esq. of Willig,
Williams & Davidson, the union's law firm headquartered in
Philadelphia, said. "All former employees should make sure that
the hospital and the union are notified of address changes,
because checks will be sent to their last known address."
Mr. Williams also notes that the union is pursuing approximately
$184,000 for leave time that was accrued before the petition was
filed. The claims, called pre-petition claims, have a high
priority in bankruptcy court, and Mr. Williams said the union is
"cautiously optimistic" about the result.
"We're negotiating with the new owners right now. We'll fight
until the end, both in the courts and at the bargaining table."
Mr. Sgro also said.
Philipsburg General Hospital had been a state-run institution
until it was closed in 1991. A community group, Moshannon Valley
Citizens, reopened it in 1992 and has a lease on the facility that
runs through 2012. In the face of slumping revenues that did not
cover costs, the hospital filed for Chapter 11 bankruptcy in
January 2006. Its administration said, the goal was reorganizing
the debt and staying open. But the 25-bed institution was not
able to cover monthly expenses and closed in April, putting about
155 people out of work. Claims against the hospital total about
$6.2 million.
PRICELINE.COM: Hutchison & Cheung Sell 3.8 Mil. Shares of Stock
---------------------------------------------------------------
Priceline.com Inc. reported that Hutchison Whampoa Limited
and Cheung Kong Limited sold approximately 3.8 million shares
of priceline.com common stock in an at-the-market offering
underwritten by Goldman, Sachs & Co. The shares sold were covered
by a shelf registration statement filed with the Securities and
Exchange Commission on Dec. 4, 2006. The sale
of the shares is expected to close on Dec. 7, 2006.
"We are pleased to see that these two long-term investors in
priceline.com since 2001 have been rewarded with a successful
transaction" said priceline.com President and Chief Executive
Officer Jeffery H. Boyd. "Meanwhile, we still maintain a good
relationship with Hutchison Whampoa through our joint venture,
Hutchison-Priceline, in Asia."
The sale represents the remainder of priceline.com common stock
owned by Hutchison Whampoa Limited and Cheung Kong (Holdings)
Limited. Hutchison Whampoa Limited and Cheung Kong (Holdings)
Limited sold 8.9 million shares of priceline.com common stock in
an underwritten offering on September 5, 2006. Dominic Lai and
Ian Wade, Hutchison Whampoa Limited's representatives on
priceline.com's Board of Directors, intend to resign from
priceline.com's Board at the time of the closing of the sale of
the shares.
About Priceline.com Inc
Priceline.com Inc. (Nasdaq: PCLN) operates priceline.com, a
leading U.S. online travel service for value-conscious leisure
travelers, and Priceline Europe, a leading European online hotel
reservation service.
In the U.S., priceline.com offers customers a variety of ways to
save on their airline tickets, hotel rooms, rental cars, vacation
packages and cruises.
Priceline Europe operates one of Europe's fastest growing hotel
reservation services, operates in 40 countries in 12 languages and
offers its customers in Europe and the U.S. access to
approximately 25,000 participating European hotels.
Priceline.com also operates the following travel websites:
Travelweb.com, Lowestfare.com, RentalCars.com and BreezeNet.com.
Priceline.com also has a personal finance service that offers home
mortgages, refinancing and home equity loans through an
independent licensee. Priceline.com licenses its business model to
independent licensees, including priceline mortgage and certain
international licensees.
* * *
As reported in the Troubled Company Reporter on Oct. 2, 2006,
Standard & Poor's Ratings Services assigned its 'B' rating to
Priceline.com. Inc.'s $150 million convertible senior notes due
2013. Additionally, S&P affirmed the corporate credit rating on
the company at 'B'. The outlook is Stable.
PROBE MANUFACTURING: Sept. 30 Stockholders' Deficit Tops $727,280
-----------------------------------------------------------------
Probe Manuafacturing earned $40,324 of net income on $2.55 million
of revenues for the third quarter ended Sept. 30, 2006, compared
with a $217,844 net loss on $1.49 million of revenues for the same
period in 2005.
At Sept. 30, 2006, the company's balance sheet showed
$2.65 million in total assets and $3.38 million in total
liabilities, resulting in a $727,280 stockholders' deficit.
At Sept. 30, 2006, the company's balance sheet also showed
strained liquidity with $2.29 million in current assets available
to pay $2.3 million in total current liabilities.
In the three month period ended Sept. 30, 2006, the company's cost
of goods sold was reduced to 76% from 78% in the same period in
2005.
In the three month period ended Sept. 30, 2006, the company's
gross margins increased to 24% from 21% in the same period in
2005.
In the three month period ended Sept. 30, 2006, selling, general
and administrative expenses were reduced to 20% from 33% compared
to the same period in 2005.
Improvements in performance in the three month period ended Sept.
30, 2006 are primarily due to increase in revenue and continuation
of process improvement efforts initiated in the 4th quarter of
2005.
Full-text copies of the company's third quarter financials are
available for free at http://researcharchives.com/t/s?1655
Going Concern Doubt
Jaspers + Hall, PC, in Denver, Colorado, raised substantial
doubt about Probe Manufacturing's ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the company's recurring losses from operations and its
difficulties in generating sufficient cash flow to meet its
obligations.
About Probe Manufacturing
Based in Costa Mesa, California. Probe Manufacturing Inc. --
http://www.probemi.com-- provides advanced electronics
manufacturing services to original equipment manufacturers,
primarily in the industrial and instrumentation, communication,
semiconductor, automotive, medical, and military segments. This
includes globally integrated end to end manufacturing solutions
ranging from engineering printed circuit card assembly, cable
assembly, enclosures, complete system integration and test, as
well as global order fulfillment.
PSYCHIATRIC SOLUTIONS: S&P Puts Junks Rating on Preferred Stock
---------------------------------------------------------------
Standard & Poor's Rating Services assigned its preliminary
'B+' senior secured debt, preliminary 'B+' senior unsecured debt,
preliminary 'B-' subordinated debt, and preliminary 'CCC+'
preferred stock ratings to Psychiatric Solutions Inc.'s Rule 415
shelf registration.
This filing falls under the SEC's well-known seasoned issuer
rules, which do not require a dollar amount of securities to be
registered. The registration replaces a previous registration,
filed on Aug. 1, 2005, for securities registered at the time of
PSI's acquisition of Ardent Health Services.
The corporate credit rating on Franklin, Tennessee-based PSI is
'B+' and the rating outlook is negative.
The rating continues to reflect the company's significant debt
burden and the challenge of managing a much larger entity that has
grown largely as a result of acquisitions. PSI is also exposed to
potential government reimbursement changes. These concerns are
partially offset by the company's position as one of the largest
providers in the highly fragmented behavioral health industry, and
its history of successful acquisitions since 2003.
Ratings List:
* Psychiatric Solutions Inc.
-- Corporate credit rating at B+/Negative/
Ratings Assigned:
* Rule 415 WKSI Shelf
-- Senior Secured at B+
-- Senior Unsecured at B+
-- Subordinated at B-
-- Preferred Stock at CCC+
REFCO INC: To Present 16 Witnesses at Plan Confirmation Hearing
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved procedures governing discovery with respect to the
confirmation of the Chapter 11 Plan filed by Refco, Inc., and its
debtor-affiliates; Marc S. Kirschner, the Chapter 11 Trustee for
Refco Capital Markets, Ltd.; and the Joint Sub-Committee of the
Official and Additional Committees of Unsecured Creditors, the
Troubled Company Reporter reported on Nov. 17, 2006.
The Court also authorizes the Plan Proponents to file a list of:
(a) names of witnesses that the Plan Proponents anticipate
presenting at the December 15, 2006 Plan confirmation
hearing; and
(b) specific area for which the testimony of any witness will
be offered including any opinions that the witnesses will
offer, provided that, in the event that the Plan
Proponents determine the need to supplement their Witness
List based on a need that was not anticipated at the time
the list was filed, the Debtors will file a supplement to
that list on or before December 4, 2006, providing
additional witnesses and the general areas of testimony
to be offered.
Plan Proponents Present Witness List
In accordance with the Discovery Order, the Plan Proponents
presented 16 potential witnesses who may testify by direct
testimony, declaration, deposition, or prior testimony before the
Court at the Plan Confirmation Hearing.
The Witnesses are:
* David Pauker, Refco's Chief Restructuring Officer,
* the RCM Trustee,
* Brad Geer of Houlihan Lokey Howard & Zukin Capital, Inc.,
* Jane Sullivan of Financial Balloting Group,
* Todd Brents of Alix Partners, LLC,
* Louis Dudley of Alix Partners, LLC,
* Brian Osborne of Omni Management,
* M. Freddie Reiss of FTI Consulting, Inc.,
* Richard Deitz of VR Global Partners, L.P.,
* Rodrigo Alvarez of RCM,
* Juan Carlos Moreno of Inter Financial Services, Ltd.,
* Gerald Scherer of Refco, Inc.,
* Vera Kraker of RCM,
* Thomas Yorke of RCM,
* Stephen Dispenza of RCM, and
* Jeffery Leadholm of Leuthold Funds, Inc., and Leuthold
Industrial Metals Fund, L.P.
Topics of anticipated testimonies, as well as opinions, include:
-- facts relating to the Section 1129 requirements, including
assumptions underlying the liquidation analysis;
-- facts relating to the assets and liabilities of the
Debtor entities;
-- fairness of settlements;
-- claims asserted against RCM and by RCM creditors against
any of the Debtors;
-- opinion testimony regarding the creation and reliability
of computerized recovery model, as used for projecting
recoveries under the Plan, and in the absence of
confirmation, including in the event of liquidation;
-- opinion testimony regarding the reliability of recovery
model for determining the allocation of joint and several
liabilities among the Contributing Debtors; and
-- voting and tabulation of votes accepting or rejecting the
Plan.
The Plan Proponents reserve the right to modify, supplement or
amend the Witness List.
Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, in New York, advises the Court that the Witness List
is not a representation or commitment that a person will be
called to testify. The Witness List also does not include all of
the witnesses that the Plan Proponents may call as rebuttal
witnesses at the Confirmation Hearing.
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in 14
countries and an extensive global institutional and retail client
base. Refco's worldwide subsidiaries are members of principal
U.S. and international exchanges, and are among the most active
members of futures exchanges in Chicago, New York, London and
Singapore. In addition to its futures brokerage activities, Refco
is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
On Oct. 6, 2006, the Debtors filed their Amended Plan and
Disclosure Statement. On Oct. 16, 2006, the gave its tentative
approval on the Disclosure Statement and on Oct. 20, 2006, the
Court Clerk entered the written disclosure statement order.
The hearing to consider confirmation of Refco, Inc., and its
debtor-affiliates' plan is set for Dec. 15, 2006. Objections to
the plan, if any, must be in by Dec. 1, 2006.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is
represented by Bingham McCutchen LLP. RCM is Refco's operating
subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262).
Refco Commodity Management, Inc., formerly known as CIS
Investments, Inc., a debtor-affiliate of Refco Inc., filed for
chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No.
06-12436). RCMI's exclusive period to file a chapter 11 plan
expires on Feb. 13, 2007.
(Refco Bankruptcy News, Issue No. 49; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
REFCO INC: Chap. 11 Trustee Wants $101 Mil. JPMorgan Claim Settled
------------------------------------------------------------------
Marc S. Kirschner, the Chapter 11 trustee for the estate of Refco
Capital Markets Ltd., asks the Court to approve a Settlement
Agreement and Mutual Release dated Nov. 20, 2006, with JPMorgan
Chase Bank N.A.
JPMC serves as custodian, and cleared and settled trades for RCM.
JPMC also provides monthly valuations of securities held in
custody for RCM's account.
In December 2005, JPMC, through its counsel, served a letter
setting forth the basis for its claims against the RCM estate
together with supporting documentation. JPMC asserted claims
aggregating $101,547,404, comprised of:
(i) a balance outstanding for amounts loaned in the principal
amount of $79,500,000, plus fees and interest. The loan
is secured by a perfected security interest in RCM
securities in and cash in the possession of JPMC in an
aggregate approximate amount of $780,000,000; and
(ii) a net overdraft totaling $22,047,404 in RCM's foreign
currency accounts at JPMC.
Mr. Kirschner relates that there is a $21,947,767 credit due RCM
from JPMC as a result of the liquidation of certain repurchase
agreements and cash collateral previously posted with JPMC in
connection with forward and swap contracts with RCM.
JPMC timely filed a formal proof of claim -- Claim No. 4796 --
setting forth the same bases for the JPMC Claims and attaching
supporting documentation.
According to Mr. Kirschner, the conflicts counsel to the Official
Committee of Unsecured Creditors -- and later, the counsel for
the Additional Committee -- began analyzing the validity and
amount of the JPMC Claims and the attachment, perfection and
priority of the Security Interest, and to determine whether there
exist any viable defenses thereto, in December 2005. The probe
continued after the RCM Trustee was appointed in April 2006.
After arm's-length negotiations with business persons at JPMC,
the RCM Trustee, on RCM's behalf, agrees to pay JPMC the
principal amount of the Loan together with 70% of non-default
interest, calculated at the daily opening Federal Funds Rate plus
50 basis points, without compounding.
The amount, Mr. Kirschner explains, represents a 200 basis point
discount from the contractual default rate alleged by JPMC to
apply, and an additional 30% discount to the non-default contract
rate of interest. The total potential savings to the estate from
this concession, Mr. Kirschner says, by JPMC is approximately
$5,500,000 as of December 12, 2006.
The Settlement Agreement also provides for the $22,041,280 Debit
Balance to be set off against $21,968,247 of credits RCM alleges
are due to it from JPMC. The Bank will waive its rights to
assert a claim for the $99,636 difference between the two
amounts.
RCM will also pay JPMC's reasonable attorneys fees as required by
the underlying agreements, which are currently in the estimated
amount of $1,175,000 as of October 31, 2006, together with
$26,135 of fees that are due and owing with respect to the
monthly transaction charges and fees for the movement of
securities and value of the Portfolio in RCM's securities account
at JPMC. The final amount of the attorneys' fees is to be
determined on the day before the effectiveness of the Settlement
Agreement.
In addition, the Settlement Agreement provides for an exchange of
mutual releases between the parties and the expungement of JPMC's
proof of claim against RCM.
The Settlement Agreement further contains terms providing for RCM
to utilize JPMC for future securities custody accounts and dealer
services, and to provide valuations of the securities and other
financial assets held by the RCM estate as contemplated by the
settlement agreement between the RCM Trustee and certain
customers and creditors of RCM, for appropriate fees, as well as
other customary terms.
Mr. Kirschner notes that pursuant to the Court-approved RCM
Settlement Agreement, the RCM Trustee is required to engage one
or more independent persons of recognized standing to act as a
valuation expert with respect to RCM customer property. As
custodian, JPMC has become familiar with many of the securities
in the RCM portfolio. In addition, the Portfolio Management
Advisory Committee has advised the RCM Trustee that JPMC is
experienced and highly regarded in trading emerging market debt,
which comprises a large percentage of the RCM portfolio.
JPMC has a Client Valuation Group, which provides independent
valuation services to its clients. Mr. Kirschner believes that
valuations prepared by the Client Valuation Group, in
consultation with the emerging markets trading desk, will result
in a fair and independent valuation of customer property pursuant
to the RCM Settlement Agreement.
The RCM Trustee also asks the Court to approve the retention of
JPMC to provide the valuations under the RCM Settlement
Agreement.
"I believe that any objection to the JPMC Claims and Security
Interest has very little likelihood of success, and submit that
the Settlement Agreement therefore is fair and equitable and
falls well within the range of reasonableness," Mr. Kirschner
tells Judge Drain.
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in 14
countries and an extensive global institutional and retail client
base. Refco's worldwide subsidiaries are members of principal
U.S. and international exchanges, and are among the most active
members of futures exchanges in Chicago, New York, London and
Singapore. In addition to its futures brokerage activities, Refco
is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
On Oct. 6, 2006, the Debtors filed their Amended Plan and
Disclosure Statement. On Oct. 16, 2006, the gave its tentative
approval on the Disclosure Statement and on Oct. 20, 2006, the
Court Clerk entered the written disclosure statement order.
The hearing to consider confirmation of Refco, Inc., and its
debtor-affiliates' plan is set for Dec. 15, 2006. Objections to
the plan, if any, must be in by Dec. 1, 2006.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is
represented by Bingham McCutchen LLP. RCM is Refco's operating
subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262).
Refco Commodity Management, Inc., formerly known as CIS
Investments, Inc., a debtor-affiliate of Refco Inc., filed for
chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No.
06-12436). RCMI's exclusive period to file a chapter 11 plan
expires on Feb. 13, 2007.
(Refco Bankruptcy News, Issue No. 49; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
REMEDIATION FINANCIAL: Must File Disclosure Statement by Dec. 15
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona extended the
deadlines and continuation of hearings on Remediation Financial
Inc. and its debtor-affiliates' pending Plan of Reorganization and
Disclosure Statement.
Specifically, the Court:
-- extended the filing deadline of the Amended Disclosure
Statement from Oct. 30, 2006, to Dec. 15, 2006;
-- extended the deadline for filing objections to the Debtors'
Amended Disclosure Statement from Dec. 4, 2006, to Jan. 18,
2007;
-- vacated and reset the hearing on Extension of Exclusivity on
Jan. 12, 2007;
-- vacated and reset the hearing on the Debtors' Disclosure
Statement on Jan. 26, 2007.
Alisa C. Lacey, Esq., at Stinson Morrison Hecker LLP, related that
the Debtors are continuing their lengthy negotiations with their
Porta Bella Lender regarding objections to the existing Plan and
potentially acceptable terms. The Debtors expect to file an
amended Plan, which incorporates the terms of the settlement with
PBL.
Headquartered in Phoenix, Arizona, Remediation Financial, Inc., is
a real estate developer. Remediation Financial, Inc., and Santa
Clarita, L.L.C. filed for chapter 11 protection on July 7, 2004
(Bankr. D. Ariz. Case No. 04-11910). RFI Realty, Inc., filed on
June 15, 2004 (Bankr. D. Ariz. Case No. 04-10486) and Bermite
Recovery, L.L.C., filed on September 30, 2004 (Bankr. D. Ariz.
Case No. 04-17294). Alisa C. Lacey, Esq., at Stinson Morrison
Hecker LLP, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed estimated assets of more than $100 million and estimated
debts of $10 million to $50 million.
RESIDENTIAL ACCREDIT: Fitch Holds Low-B Ratings on 2 Certificates
-----------------------------------------------------------------
Fitch Ratings assigned these assessments on Residential Accredit
Loan, Inc.'s mortgage-pass through certificates:
RALI Mortgage Asset Backed Pass-Through Certificates, Series 2001-
QS17:
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AAA';
-- Class M-3 upgraded to 'AA+' from 'AA';
-- Class B-1 affirmed at 'BBB'; and
-- Class B-2 upgraded to 'CCC/DR2' from 'CC/DR3'.
RALI Mortgage Asset Backed Pass-Through Certificates, Series 2003-
QS20:
--Class A affirmed at 'AAA';
--Class M-1 affirmed at 'AA';
--Class M-2 affirmed at 'A';
--Class M-3 affirmed at 'BBB';
--Class B-1 affirmed at 'BB'; and,
--Class B-2 affirmed at 'B'.
The affirmations reflect satisfactory credit enhancement
relationships to future loss expectations and affect approximately
$114 million outstanding certificates.
The upgrades reflect an improvement in the relationship of CE to
future loss expectations and affect approximately $1.6 million of
certificates.
The mortgage loans in the aforementioned transactions consist of
both 30-year fixed-rate and 15-year fixed-rate mortgages extended
to both Prime and Alt-A borrowers which are secured by first and
second liens, primarily on one- to four-family residential
properties. As of the November 2006 distribution, the pool
factors for 2001-QS17 and 2003-QS20 currently stands at 7% and
54%, respectively. The transactions are seasoned 36 months (2003-
QS20) and 60 months (2001-QS17).
The master servicer for all of aforementioned RALI deals is GMAC
RFC which is rated 'RMS1', Rating Watch Evolving by Fitch.
Fitch's Distressed Recovery ratings, introduced in April 2006
across all sectors of structured finance, are designed to estimate
recoveries on a forward-looking basis while taking into account
the time value of money.
ROWE COS: Sun Capital Discloses Intent to Buy All Assets
--------------------------------------------------------
Sun Capital Partners Inc. submitted a formal letter of intent
whereby it is contemplated that Lexington-Rowe Furniture, Inc., an
affiliate of Sun Capital, will be confirmed as the stalking horse
bidder to acquire, through a Section 363 Bankruptcy Code sale
process, substantially all of the assets of The Rowe Companies,
Rowe Furniture, Inc., and certain of other affiliated debtors, but
specifically excluding Storehouse Inc.
"We are very pleased with the opportunity to become part of the
Sun Capital family and feel that there are great synergies between
our companies and our philosophies" Gerald M. Birnbach, Chairman
and CEO of Rowe Furniture states. "To date, we have had very
positive meetings between our management teams and feel extremely
pleased with our rapid progress in finalizing the details of our
agreement."
Sun Capital Partners focuses on investment opportunities in
companies that demonstrate leadership positions within their
industry and strong competitive advantages. Included in Sun
Capital's portfolio of 57 affiliated portfolio companies are other
furniture industry businesses such as Lexington Home Brands, a
leading marketer and manufacturer of upscale branded home
furnishings; Wickes Furniture, a leading U.S. furniture retailer
with 31 retail locations in four major regional markets; and
Mattress Firm, the third largest bedding retailer in the U.S. with
approximately 350 stores in 35 markets.
"Rowe Furniture is a leading manufacturer of quality furniture at
competitive price points with unique production capabilities that
allow the Company to quickly deliver customized orders" Jason H.
Neimark, Managing Director, Sun Capital Partners, Inc., added.
"We look forward to working with Rowe's management team and its
dedicated employees to consummate this transaction and permit Rowe
Furniture to emerge from bankruptcy as a financially sound and
growing organization focused on its customers."
The proposed sale to an affiliate of Sun Capital Partners is
subject to approval by the Bankruptcy Court.
Headquartered in McLean, Virginia, The Rowe Companies
-- http://www.therowecompanies.com/-- manufactures
upholstered retail home and office furniture, interior
decorations, tableware, lighting fixtures, and other interior
design accessories. The company owns 100% of stock of
manufacturing and retail subsidiaries, Rowe Furniture
-- http://www.rowefurniture.com/-- and Storehouse, Inc.
-- http://www.storehousefurniture.com/
The company and its two of its debtor-affiliates filed for chapter
11 protection on Sept. 18, 2006 (Bank. E.D. Va. Case Nos. 06-11142
to 06-11144). Dylan G. Trache, Esq., H. Jason Gold, Esq., and
Valerie P. Morrison, Esq., at Wiley Rein & Fielding LLP, represent
the Debtors. When the Debtors filed for protection from their
creditors, The Rowe Companies listed total assets of $130,779,655
and total debts of $93,262,974; Rowe Furniture estimated assets
between $50 million and $100 million and debts between $10 million
and $50 million; and Storehouse, Inc. estimated assets and debts
between $10 million and $50 million. The Debtors' exclusive
period to file a chapter 11 plan expires on Jan. 16, 2007.
SALOMON BROTHERS: Fitch Holds Junk Rating on Class B-5 Certs.
-------------------------------------------------------------
Fitch has taken these rating actions on the Salomon Brothers
Mortgage Securities VII Inc. mortgage pass-through certificates
listed below:
* Series 1992-6
-- Class A-1 affirmed at 'AAA'; and
-- Class M affirmed at 'AAA'.
* Series 1994-19
-- Class A affirmed at 'AAA'.
* Series 2000-UP1
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AAA';
-- Class B-2 affirmed at 'AA+';
-- Class B-3 affirmed at 'BBB+';
-- Class B-4 upgraded to 'CCC/DR2' from 'CC/DR4'; and,
-- Class B-5 remains at 'C/DR6'.
* Series 2002-1
-- Class A affirmed at 'AAA'; and,
-- Class B-1 affirmed at 'AA'.
* Series 2003-1
-- Class A affirmed at 'AAA'; and,
-- Class B-1 affirmed at 'A'.
* Sovereign, series 2002-1
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AAA';
-- Class B-2 affirmed at 'AA';
-- Class B-3 upgraded to 'A+ from 'BBB';
-- Class B-4 upgraded to 'BB+' from 'BB'; and,
-- Class B-5 upgraded to 'B+' from 'B'.
The upgrades, affecting approximately $6.1 million of outstanding
certificates, are being taken as a result of an increase in credit
enhancement relative to future loss expectations. The
affirmations, affecting approximately $159.8 million of
outstanding certificates, are due to CE and collateral performance
generally consistent with expectations.
The underlying collateral consists of fully amortizing 30-year
fixed- and adjustable-rate mortgages secured by first liens on
one-to-four family residential properties.
As of the Nov. 2006 distribution date, the transactions are
seasoned from 38 to 169 months. The pool factors range
approximately from 1% to 21%.
SEA CONTAINERS: Received Dividends from GNER Before Bankruptcy
--------------------------------------------------------------
Sea Containers Ltd. received GBP35,700,000 dividend from its
railway subsidiary, Great North Eastern Railway, before SCL filed
for Chapter 11 protection on Oct. 15, 2006, Mark Smith writes
for The Herald.
For the year ended Jan. 7, 2006, GNER's pre-tax profits stood
at GBP8,600,000, compared with GBP22,200,000 for the same period
in 2005.
"Sea Containers' Chapter 11 status does not affect the operations
of GNER. Sea Containers is in Chapter 11, not GNER," Lisa
Barnard, SCL's director of communications was quoted by The
Herald.
Ms. Barnard blamed the sharp decline in GNER's pre-tax profit on
the July 7, 2005, bombings in London.
As per the accounts obtained by the Herald from the Companies
House, GNER's operating expenditure for the year ended Jan. 7,
2006, was GBP470,500,000 from GBP15,000,000 in 2005.
At 52 weeks to Jan. 7, 2006, GNER paid out a dividend of
GBP8,800,000, compared with the GBP26,900,000 dividend for the
53 weeks to Jan. 8, 2005.
Turnover was GBP477,000,000 in 2006 compared with GBP475,000,000
in 2005.
As reported in the Troubled Company Reporter-Europe on Aug. 15,
2006, GNER must pay the U.K. Department for Transport
GBP1,300,000,000 for the right to run trains on the east coast
main line until 2015.
Sea Containers agreed to stand behind a GBP30,000,000 standby
credit facility during the term of the franchise and a
GBP10,000,000 overdraft facility to provide additional working
capital if needed.
According to The Herald, rivals like FirstGroup and Virgin Rail
were waiting for GNER to falter to take over the east coast
franchise.
About GNER
Headquartered in London, United Kingdom, Great North Eastern
Railway (GNER) Limited operates high-speed express train services
on the East Coast Main Line. Most of their trains run between
London King's Cross and either Edinburgh Waverley or Leeds.
About Sea Containers
Headquartered in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they reported
US$1.7 billion in total assets and US$1.6 billion in total
debts. (Sea Containers Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
SEA CONTAINERS: Wants Richards Butler as Special Foreign Counsel
----------------------------------------------------------------
Sea Containers Ltd. and its debtor-affiliates ask permission from
the U.S. Bankruptcy Court for the District of Delaware to employ
Richards Butler LLP as special counsel for certain foreign legal
matters, nunc pro tunc to Oct. 15, 2006.
Richards Butler has served as the Debtors' outside counsel on
legal matters in the United Kingdom and France as well as matters
involving their interests in their non-debtor subsidiary Great
North Eastern Railway, Ltd., since 1987, relates Edwin S.
Hetherington, vice president, general counsel, and secretary of
Sea Containers Ltd.
Mr. Hetherington discloses that the firm's professionals have
become very familiar with the Debtors and their business affairs,
and have gained extensive experience in most aspects of the
Debtors' general legal work and needs outside the United States.
As the Debtors' Special Foreign Counsel, Richards Butler will
continue to advise and represent the Debtors with respect to the
foreign legal matters as well as other non-bankruptcy related
matters, which may arise in the Debtors' Chapter 11 cases in the
ordinary course of business.
Richards Butler's services will be paid in accordance with its
customary hourly rates:
Professional Hourly Rate
------------ -----------
Partners $522 - $997
Associates $360 - $740
Paraprofessionals $295 - $360
The firm will also be reimbursed for necessary out-of-pocket
expenses.
Mr. Hetherington tells the Court that Richards Butler has
received a replenishing prepetition retainer, with a remaining
balance of $150,461, for providing the Debtors with
representation on certain of the foreign legal matters prior to
the Petition Date. In addition, Richards Butler also received
$4,412,000 from the Debtors within one year prior to the Petition
Date for services rendered to certain Foreign Legal Matters.
Jonathan Yorke, Esq., a member of Richards Butler LLP, assures
the Court that his firm does not hold or represent any interests
adverse to the Debtors, or to their estates in matters upon which
his firm is to be engaged.
About Sea Containers
Headquartered in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they reported
US$1.7 billion in total assets and US$1.6 billion in total
debts. (Sea Containers Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
SCOTTISH RE: Amends Credit Deal to Buy Back Convertible Notes
-------------------------------------------------------------
Scottish Re Group Limited has amended its bank credit facility
agreement that permits a payment of up to $115 million from
Scottish Annuity & Life Insurance Company (Cayman) Ltd. to
Scottish Re Group Limited.
The payment was transferred to Scottish Re Group Limited on
Monday, Dec. 4, 2006.
These actions will enable the Company to repurchase the
$115 million 4.5% convertible notes should the holders elect to
exercise their put options. The repurchase will occur today,
December 6.
Scottish Re Group Limited -- http://www.scottishre.com/--
provides reinsurance of life insurance, annuities and annuity-type
products through its operating companies in Bermuda, Charlotte,
North Carolina, Dublin, Ireland, Grand Cayman, and Windsor,
England. At March 31, 2006, the reinsurer's balance sheet showed
$12.2 billion assets and $10.8 billion in liabilities
* * *
Moody's Investors Service continues to review the ratings of
Scottish Re Group Ltd. with direction uncertain following the
announcement by the company that it has entered into an agreement
to sell a majority stake to MassMutual Capital Partners LLC, a
member of the MassMutual Financial Group and Cerberus Capital
Management, L.P., a private investment firm.
Ratings under review include Scottish Re Group Limited's senior
unsecured debt which is rated at Ba3 and preferred stock rated at
B2.
Standard & Poor's Ratings Services has also revised the
CreditWatch status of its ratings on Scottish Re Group Ltd.,
Scottish Re's operating companies, and dependent unwrapped
securitized deals to positive from negative. Scottish Re has a
'CCC' counterparty credit rating, and Scottish Re's operating
companies have 'B+' counterparty credit and financial strength
ratings. These ratings were placed on CreditWatch negative on
July 31, when Scottish Re announced poor second-quarter results
and that liquidity was tight.
Fitch Ratings added that Scottish Re Group Ltd.'s ratings remain
on Rating Watch Negative following the announcement that SCT has
entered into an agreement which will result in a new equity
investment into the company of $600 million. SCT's ratings were
placed on Rating Watch Negative on July 31, due to concerns
regarding the company's ability to repay $115 million of senior
convertible notes that are expected to be put to the company on
Dec. 6. Ratings on Rating Watch Negative include the company's BB
issuer default rating and the BB- rating on its 4.5% $115 million
senior convertible notes.
A.M. Best Co. has downgraded the Financial Strength Rating to B
from B+ and the issuer credit ratings to "bb+" from "bbb-" of the
primary operating insurance subsidiaries of Scottish Re Group
Limited. A.M. Best has also downgraded the ICR of Scottish Re to
"b" from "bb-" and all of Scottish Re's debt ratings. All ratings
remain under review with negative implications.
SOLUTIA INC: Court Approves January 15 Plan-Filing Deadline
-----------------------------------------------------------
The Honorable Prudence Carter Beatty of the U.S. Bankruptcy Court
for the Southern District of New York granted Solutia Inc. and its
debtor-affiliates a 60-day extension of the Exclusive Periods,
Bloomberg News reports. Accordingly, Solutia has the
exclusive right to file a plan until Jan. 15, 2007, and the
exclusive right to solicit acceptances of that plan until
Feb. 9, 2007.
Bruce Bennett, Esq., at Hennigan, Bennett & Dorman LLP, counsel
to the Noteholders Committee, told Bloomberg's Thom Weidlich that
the Court's ruling reflects that it is not satisfied with the
progress of the case and that there hasn't been any serious
effort by other parties to adequately deal with the rights of the
bondholders.
Equity Panel to Continue Plan Talks
Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in
New York, had informed the Court that the Official Committee of
Equity Security Holders continued to explore alternate plan
structures regarding the Debtors' Plan of Reorganization and
Disclosure Statement. She said the Equity Committee and the Old
and New Monsanto were pursuing mediation that could alter the
Plan, if successful.
The Equity Committee reserved its rights with respect to the
Debtors' request to extend their exclusive periods to file and
solicit acceptances of the Plan.
Ms. Dine stated that despite the mediation efforts, the Equity
Committee remained concerned that the Debtors intended to pressure
creditors to give in to their reorganization demands despite
their assertion that they were willing to work with other
constituencies to create a new plan.
While the Equity Committee had determined to not formally object
to the requested extension at this time, it continued to be
concerned about the confirmability of the Debtors' Plan, Ms. Dine
says. While the Committee hoped that mediation would help lead to
a consensual Plan, it wanted confirmation that any further
extension of the Debtors' Exclusive Periods would not unduly
prejudice the panel's rights to either seek to terminate the
exclusivity or object to any further extensions.
Noteholders Committee Objects
Representing the Ad Hoc Committee of Solutia Noteholders, Bennett
J. Murphy, Esq., at Hennigan, Bennett & Dorman LLP, in Los
Angeles, California, stated that in three years, the Debtors had
not presented a viable Plan. He added that they had misused the
privilege of the Exclusive Periods to make wrong choices,
resulting to a retarded, rather than advanced, conclusion and the
"dead-letter global settlement."
Mr. Murphy related that the Debtors' failed management and
strategy had taken millions of the estate's money. He noted
that recent public filings revealed $52,000,000 in professional
fees paid in the year ending Sept. 30, 2006 -- a burn rate of
more than $4,300,000 each month, equating to nearly 20% of the
Debtors' projected 2006 EBITDAR.
Mr. Murphy said the Noteholders Committee, whose professionals
had not been paid by the estate, was the only party pushing for
serious and conclusive plan negotiations. He also contended that
Monsanto Company and Pharmacia, Inc., had refused to engage the
Noteholders Committee in a negotiation to a substantive give-and-
take.
The Noteholders Committee had wanted the Extension Motion denied
because the Debtors:
1) repeatedly failed to submit a memorandum of law despite the
Court's admonishment, indicating their doubtful sincerity
to the request;
2) failed to provide any evidence to warrant another extension
since cause does not exist;
3) squandered the given extensions and, at estate's expense,
assembled a legion of lawyers and advisors to hold a trial
over their claim for millions in bonuses;
4) merely repeated their previous reasons for an extension,
without offering any progress towards a Plan;
5) filled their Motion with excuses as to why they remain
in bankruptcy and offer no viable plan on how to
emerge;
6) did not use their leadership to create a process where all
key parties engage in a bone fide give and take;
7) were improperly using their Exclusive Periods to favor a
single bloc -- Monsanto and Pharmacia -- and pressure the
Noteholders into submitting to their demands;
8) used the JPMorgan and Equity Committee adversary proceedings
as contingencies to justify the extension, which is
entirely self-inflicted; and
9) emphasized the size and complexity of their cases for their
past Motions and the argument is now stale and
insufficient.
Debtors Respond
Based on conversations with the Creditors Committee and Trade
Committee, the Debtors had agreed to reduce the requested
extensions to Feb. 16, 2007, to file a plan and April 19, 2007, to
solicit plan votes.
Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York,
told Judge Beatty that all of the Debtors' constituencies except
the Noteholders Committee, had engaged and were willing to
cooperate in good faith negotiations to reach a consensual
agreement regarding modifications to the Plan. Mr. Henes noted
that each of the parties understood that a negotiation required
compromise and they must make concessions from their original
positions. However, he continued, the Noteholders refused to
acknowledge that risks existed to their litigation position and
instead, attempted to dictate the path for the cases to the
detriment of the other parties-in-interest.
Mr. Henes pointed out to the Court that sufficient cause exists to
extend the Debtors' Exclusive Periods:
(a) the JPMorgan and Equity Committee adversary proceedings
needed to be resolved;
(b) after discussions with constituencies, the Debtors and
their stakeholders had agreed to the Standstill Period to
enable negotiations;
(c) it was for the stakeholders' best interests for the Debtors
to be the sole fiduciary of the estates, to continue to
bring their various constituencies together to reach
consensus and enable Solutia to emerge from bankruptcy;
(d) the Debtors spent the last several months working to
negotiate and develop an amendment to the Plan.
The Noteholders announced their so-called "detailed roadmap for a
consensual plan" but that was not even attached to their
objection nor shared to other parties, Mr. Henes says. He added
that the Noteholders had assumed to be the only one desirous of a
consensual deal, when they had not even recognized their risks
and were not willing to make concessions to achieve a deal.
Mr. Henes disclosed that the Debtors and other constituents had
devised a proposal wherein cash would be reserved to pay the
secured claim in full in the event that a final, non-appealable
Court order ruling that Noteholders were secured. He said the
amendment as embodied in the Proposal preserved the three key
goals of the Plan:
(a) Monsanto would take financial responsibility for
significant legacy liabilities;
(b) Solutia would receive necessary new money to fund the
Retiree Settlement and legacy liabilities through the sale
reorganized Debtors' stocks; and
(c) cash -- as opposed to equity -- would be distributed to
Monsanto and Solutia's unsecured creditor.
Mr. Henes related that the Debtors tried to win the Equity
Committee's support for the Proposal by bringing it to
negotiations for the resolution of the Equity panel's adversary
proceeding.
Terminating the Exclusive Periods was highly detrimental to
the Chapter 11 cases and the Debtors' businesses, Mr. Henes
asserted. The current progress in the negotiations, the customer
and vendor relationships, and the Debtors' ability to generate
new business would be greatly affected, he continued.
Jeffry N. Quinn, chairman, president and CEO of Solutia, told
the Court that contrary to the Noteholders Committee's claims,
the Debtors had enhanced their businesses as evidenced by:
(a) improved financial performance;
(b) continuing grooming of the asset portfolio;
(c) development of new robust business strategies; and
(d) selective strategic investments made.
Mr. Quinn relates that since the beginning of 2004, sales
increased 23% despite shutting down or exiting several
businesses, operating income increased over 1000%, EBIT increased
460% and EBITDAR more than doubled.
However, Mr. Quinn said these improvements were not enough to get
them out of bankruptcy; they had to balance among obtaining new
capital, addressing obligations and reallocating legacy
liabilities inherited from Old Monsanto. Through discussions and
negotiations with Monsanto, Pharmacia, and the Creditors and
Retirees Committees, the Global Settlement materialized that
became the basis for the Plan.
Aside from negotiations, Mr. Quinn said their professionals were
also resolving the adversary cases of the Equity Committee and
JPMorgan. He added that they also spent the last months on
meetings and discussions on the original Plan's modification, as
embodied in the Proposal, to find a compromise that would be
acceptable to all constituents, including the Noteholders.
Other Parties Support Extension
Monsanto and the various committees representing the Retirees,
Creditors and Trade Claimants agreed that the Debtors' Exclusive
Periods should be extended.
Headquartered in St. Louis, Missouri, Solutia, Inc. (OTCBB:SOLUQ)
-- http://www.solutia.com/-- with its subsidiaries, make and sell
a variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y.
Case No. 03-17949). When the Debtors filed for protection from
their creditors, they listed US$2,854,000,000 in assets and
US$3,223,000,000 in debts. Solutia is represented by Richard M.
Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S.
Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represent the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provides the Creditors' Committee with financial
advice. (Solutia Bankruptcy News, Issue No. 73; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
STATION CASINOS: Acquisition Offer Prompts Moody's Ratings Review
-----------------------------------------------------------------
Moody's Investors Service placed the ratings of Stations Casinos
Inc. on review for possible downgrade after the disclosure that it
has a received an offer to be acquired by a group of investors led
by Frank J. Fertitta III, chairman and chief executive officer of
Station, Lorenzo J. Fertitta, vice chairman and president of
Station, and Colony Capital Acquisitions LLC, an affiliate of
Colony Capital LLC, to acquire all of the outstanding shares of
common stock of Station for $82 per share in cash, or about
$4.7 billion.
Station has about $3.4 billion of debt outstanding. Ratings
affected include Station's Ba2 corporate family rating, Ba2
probability of default rating, Ba2 senior unsecured note rating,
and Ba3 senior subordinated note rating.
The review for downgrade acknowledges the possibility that the
proposed buyout could be accepted and financed in a manner that
would have a negative impact on Station's credit profile.
Station's Board of Directors has established a Special Committee
of independent directors to review the proposal. The Special
Committee has also been authorized to review any alternative
proposals that may be received by Station or the Special
Committee.
Moody's review, assuming a definitive agreement with respect to
the current buyout proposal is reached, will focus on the
financing details as well as future operating and development
plans.
Although Station's existing senior unsecured and senior
subordinated notes include a change of control provision where
note holders have the right to require the company to purchase the
notes at 101% of principal plus accrued and unpaid interest, the
investor group's proposal is structured such that Station's
existing public debt would remain outstanding and its revolver
would be refinanced at the closing.
The investor group has received financing commitments which are
sufficient to consummate the proposed acquisition. Colony's
proposed equity contribution is about $2.2 billion while Frank and
Lorenzo Fertitta propose to roll-over a portion of their existing
equity.
Moody's previous rating action related to Station occurred on
September 28, 2006 when probability of default ratings and LGD
assessments were assigned to the company as part of the general
roll-out of the LGD product.
Station Casinos, Inc. owns and operates hotel and casinos in the
Las Vegas locals market including a 50% interest in both Barley's
Casino & Brewing Company and Green Valley Ranch Station Casino,
and a 6.7% interest in the Palms Casino Resort. In addition,
Station Casinos manages the Thunder Valley Casino for the United
Auburn Indian Community in California.
STATION CASINOS: Acquisition Offer Cues S&P to Downgrade Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Station
Casinos Inc., including cutting its corporate credit rating to
'BB-' from 'BB'.
In addition, these ratings remain on CreditWatch with negative
implications where they initially placed on Nov. 2, 2006,
reflecting softer and more competitive conditions in the Las Vegas
"locals" market, coupled with ongoing share repurchases at a time
when the company's credit measures were weak for the ratings.
The Las Vegas, Nevada-headquartered company had about
$3.4 billion of reported debt outstanding as of Sept. 30, 2006.
"The lower ratings and continued CreditWatch listing reflect
Station's announcement that it had received a proposal from
Fertitta Colony Partners LLC to acquire all of Station's
outstanding common stock for $82 per share in cash, or about
$4.7 billion," said Standard & Poor's credit analyst Michael
Scerbo.
Including the assumption of debt, the acquisition proposal is
valued at about $8.1 billion.
Fertitta Colony Partners is a company comprised of Station's
current chairman and CEO, Frank Fertitta; its vice chairman and
president Lorenzo Fertitta; and an affiliate of Colony Capital
LLC. A special committee of Station's board of directors has been
established to review this proposal, in addition to any
alternative proposals that may be received.
The acquiring company has proposed a capital structure comprised
of a new $500 million revolving credit facility, a $2.725 billion
CMBS loan and the combination of new contributed equity of not
less than $2.22 billion and rollover equity in excess of
$700 million.
In addition, the outstanding public debt of Station would remain
outstanding and the existing revolving credit facility would be
refinanced.
"If the board accepts the deal, and financing is structured in the
manner specified in the filing, we would expect that debt
leverage, as measured by total lease-adjusted debt to EBITDA,
would exceed 10x. This would likely result in our lowering the
ratings to the 'B' category in the absence of additional support
by equity owners.
"If the deal does not close, we expect that management would
continue to demonstrate an aggressive financial policy toward
debt-financed share repurchases and development opportunities. As
a result, a lower corporate credit rating is warranted. We will
review our ratings on Station when, and if, a definitive
acquisition is announced and the company's operating and financial
objectives are evaluated," Mr. Scerbo added.
STEEL PARTS: Resilience Capital Completes Acquisition
-----------------------------------------------------
Resilience Capital Partners has completed the acquisition of Steel
Parts Corporation for an undisclosed amount. The new company will
be known as Steel Parts Manufacturing Inc.
"Steel Parts is an important supplier to both OEM's and Tier 1
manufacturers in the automotive and transportation sectors. We
are grateful to the customers, suppliers and employees for their
dedication and support throughout this process," Bassem Mansour, a
managing partner of Resilience Capital Partners, said.
"The completion of this transaction marks a new day in the history
of Steel Parts. We believe that the company is well positioned to
recover and grow beyond levels that it had achieved in the past,"
Steven Rosen, a managing partner of Resilience Capital Partners,
said.
About Resilience Capital Partners
Based in Cleveland, Ohio, Resilience Capital Partners
-- http://www.resiliencecapital.com-- is a private equity firm
focused on investing in underperforming and turnaround situations.
Resilience's investment strategy is to acquire lower middle market
companies that have solid fundamental business prospects, but have
suffered from a cyclical industry downturn, are under-capitalized,
or have less than adequate management resources. Resilience
typically acquires companies with revenues of $25 million to $250
million. Resilience manages two private equity funds with capital
under management of over $75 million. Since its inception in
2001, Resilience has acquired 12 companies with revenues in excess
of $650 million.
About Steel Parts Corp.
Headquartered in Livonia, Michigan, Steel Parts Corporation
-- http://www.steelparts.com/-- supplies automatic transmissions,
suspension, steering components, assemblies and other automotive
parts. The Company filed for chapter 11 protection on Sept. 15,
2006 (Bankr. E.D. Mich. Case No. 06-52972). Scott A. Wolfson,
Esq., E. Todd Sable, Esq., Judy B. Calton, Esq., Michelle E.
Taigman, Esq., and Seth A. Drucker, Esq., at Honigman Miller
Schwartz and Cohn LLP, represent the Official Committee of
Unsecured Creditors. When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
and $50 million.
STELLAR TECHNOLOGIES: Losses Continue in Quarter Ended Sept. 30
---------------------------------------------------------------
Stellar Technologies Inc. incurred a $1,278,449 net loss for the
three-month period ended Sept. 30, 2006, compared to a net loss of
$1,019,532 during the three-month period ended Sept. 30, 2005.
The increase in net loss was primarily the result of a $634,708
increase in operating expenses offset by a $213,188 decrease in
interest expense and a $159,467 loss on derivative liabilities in
2005.
Revenues were $205,234 for the three-month period ended
Sept. 30, 2006 as compared to $200,512 for the three-month period
ended Sept. 30, 2006. Revenues consist of licensing fees received
upon the sale of the company's content management and E-mail
migration solutions.
Revenues for our E-mail migration solutions decreased to $70,656
for the three-month period ended Sept. 30, 2006 as compared to
$129,812 for the period ended Sept. 30, 2005. Licensing revenues
from Stellar's content management solutions increased $63,878 to
$134,578 for the three-month period ended Sept. 30, 2006 as
compared to $70,700 for the three-month period ended
Sept. 30, 2005.
Stellar's balance sheet at Sept. 30, 2006, showed $2,067,085 in
total assets and $2,698,461 in total liabilities, resulting in a
stockholders' deficit of $631,376. At September 30, 2006, the
company had a working capital deficit of $1,970,079 as compared to
a working capital deficit of $1,977,685 at June 30, 2006.
A full-text copy of the company's quarterly report is available
for free at http://researcharchives.com/t/s?1664
Going Concern Doubt
As reported in the Troubled Company Reporter on Oct. 17, 2006,
Malone & Bailey, PC, in Houston, Tex., raised substantial doubt
about Stellar's ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
year ended June 30, 2006, and 2005. The auditing firm pointed to
he Company's recurring losses from operations and negative working
capital.
About Stellar
Stellar Technologies Inc., nka GeM Solutions, Inc., provides
employee internet management products that enable businesses,
government agencies, schools and other organizations to monitor,
analyze and evaluate reports about employee computer use,
including Internet access and instant messaging. The Company's
products consist of Stellar IM Web Based Edition, Stellar IM
Enterprise Edition, Stellar Internet GEM, and E-mail Shuttle.
TELOS CORP: Sept. 30 Balance Sheet Upside-Down by $125 Million
--------------------------------------------------------------
Telos Corporation delivered its quarterly results for the period
ended Sept. 30, 2006, to the Securities and Exchange Commission
reporting a net loss of $5.9 million, an increase of $4 million
compared to a $1.9 million net loss for the same period in 2005.
The company's balance sheet at Sept. 30, 2006, showed $45.09
million in total assets and $170.10 million in total liabilities,
resulting in a stockholders' deficit of $125 million.
Sales for the third quarter of 2006 were $35.1 million, a decrease
of $5.5 million or 13.5%, compared to the third quarter 2005 sales
of $40.6 million. The decrease consists of an $8 million
decrease in sales from Xacta, primarily attributable to decreased
sales in its Secure Wireless business line, offset by a
$2.4 million increase in sales from Managed Solutions, primarily
attributable to increased orders from the NETCENTS contract.
On a non-segmented basis, product revenues decreased from
$27.4 million for the third quarter in 2005 to $22.7 million for
the same period in 2006, primarily attributable to decreased
product sales in the Secure Wireless business line. Services
revenues decreased from $13.2 million for the third quarter in
2005 to $12.4 million for the same period in 2006, primarily
attributable to differences in types and timing of services.
A full-text copy of the company's quarterly report is available
for free at http://researcharchives.com/t/s?1661
Defaults on Senior Securities
Telos Corp has not declared dividends on its Senior Redeemable
Preferred Stock, Series A-1 and A-2, since issuance.
At Sept. 30, 2006, total undeclared unpaid dividends accrued for
financial reporting purposes are $5.9 million for the Series A-1
and A-2 Preferred Stock. The company was required to redeem all
shares and accrued dividends outstanding on Oct. 31, 2005.
However, on April 14, 2005, Toxford Corporation, the holder of
72.6% of the Senior Redeemable Preferred Stock, extended the
maturity of its instruments to Oct. 31, 2008.
The company was scheduled to redeem 27.4% of the outstanding
shares and accrued dividends outstanding on Oct. 31, 2005. Due to
the Company's current financial position, it is precluded by
Maryland law from making the scheduled payment.
Through Nov. 21, 1995, the company had the option to pay dividends
in additional shares of Preferred Stock in lieu of cash.
Dividends are payable by the company, provided that the Company
has legally available funds under Maryland law and is able to pay
dividends under its charter and other senior financing documents.
Since 1991, the Company has not declared or paid any dividends on
its Public Preferred Stock. The Company has accrued $56.7 million
in cash dividends as of Sept. 30, 2006.
Costa Brava Dispute
On Oct. 17, 2005, Costa Brava Partnership III, L.P., a holder of
15.9% of the company's Public Preferred Stock, filed a lawsuit in
the Circuit Court of Baltimore City in the State of Maryland
against the Company.
Costa Brava accused the company and its officers of engaging in
tactics to avoid paying mandatory dividends on the Public
Preferred Stock, and asserts that the Public Preferred Stock has
characteristics of debt instruments even though issued by the
Company in the form of stock.
Costa Brava claims that the company and its directors have done
nothing to improve the company's insolvency, or its ability to
redeem the Public Preferred Stock and pay accrued dividends.
Among other things, Costa Brava sought for the appointment of a
receiver to take charge of the company's assets and operate the
business.
After a series of depositions, the hearing on Costa Brava's plea
was held on Oct. 18, 2006 in Baltimore, Maryland. Costa Brava's
motion for receivership was denied on Nov. 29, 2006.
About Telos Corp
Telos Corporation is a systems integration and services company
addressing the information technology needs of U.S. Government
customers worldwide. The Company also owns all of the issued and
outstanding share capital of Xacta Corporation, a subsidiary that
develops, markets and sells U.S. Government-validated secure
enterprise solutions to federal, state and local government
agencies and to financial institutions.
TELOS CORP: Annual Stockholders' Meeting Set for December 14
------------------------------------------------------------
Telos Corporation will hold its Annual Meeting of Stockholders at
9:30 a.m., on Dec. 14, 2006, Eastern Standard Time, at the
company's headquarters located at 19886 Ashburn Road in Ashburn,
Virginia.
During the meeting, stockholders will be asked to:
a) elect eight Class A/B Directors of the Board of Directors
to serve until the 2007 Annual Meeting of Stockholders or
until their successors are elected and qualified; and
b) transact other business as may properly come before the
annual meeting.
The company's Board of Directors fixed the close of business on
Sept. 28, 2006, as the record date for determining the
stockholders entitled to notice of and to vote at the annual
meeting.
A full-text copy of the definitive proxy statement for the annual
meeting is available for free at:
http://researcharchives.com/t/s?165a
About Telos Corp
Telos Corporation is a systems integration and services company
addressing the information technology needs of U.S. Government
customers worldwide. The Company also owns all of the issued and
outstanding share capital of Xacta Corporation, a subsidiary that
develops, markets and sells U.S. Government-validated secure
enterprise solutions to federal, state and local government
agencies and to financial institutions.
THINKPATH INC: Posts $383,000 Net Loss in Quarter Ended Sept. 30
----------------------------------------------------------------
Thinkpath Inc. reported a net loss of $383,000 for the three
months ended Sept. 30, 2006, a $380,000 or 1268% increase compared
to income of $3,000 for the three months ended Sept. 30, 2005.
Consolidated revenues for the three months ended Sept. 30, 2006
increased by $330,000 or 10% to $3,500,000 as compared to
$3,170,000 for the three months ended Sept. 30, 2005.
The revenue increase is largely attributable to the acquisition of
The Multitech Group Inc. on June 30, 2006. TMG contributed
$600,000 in revenue during the third quarter. Not including the
$600,000 contribution from TMG, the revenue from organic
operations is down $270,000. This decrease is largely
attributable to the decline in sales of approximately $490,000
from one major customer located in the United States who
represented only 9% of the company's consolidated revenue for the
three months ended Sept. 30, 2006 compared to 25% for the three
months ended Sept. 30, 2005.
For the three months ended Sept. 30, 2006, the company derived 88%
of its revenue in the United States compared to 84% for the three
months ended Sept. 30, 2005.
The company's balance sheet at Sept. 30, 2006 showed $8,611,486 in
total assets, $6,485,828 in liabilities and stockholders' equity
of $2,125,658.
A full-text copy of the company's quarterly report is available
for free at http://researcharchives.com/t/s?1665
Going Concern Doubt
As reported in the Troubled Company Reporter on May 16, 2006,
Schwartz Levitsky Feldman LLP, Chartered Accountants, in Toronto,
Ontario, Canada, raised substantial doubt about Thinkpath Inc.'s
ability to continue as a going concern after auditing the
Company's consolidated financial statements for the years ended
Dec. 31, 2005, and 2004. The auditor pointed to the Company's
recurring losses from operations and negative working capital.
About Thinkpath
Thinkpath Inc. -- http://www.thinkpath.com/-- is a global
provider of technological solutions and services in engineering
knowledge management, including design, drafting, technical
publishing, and consulting. Thinkpath enables corporations to
reinvent themselves structurally; drive strategies of innovation,
speed to market, globalization and focus in new and bold ways.
TPF GENERATION: Moody's Rates Proposed $495 Million Loan at B3
--------------------------------------------------------------
Moody's Investors Service assigned ratings of Ba3 to TPF
Generation Holdings, LLC's proposed $850 million first lien senior
secured term loan due 2013, $250 million first lien synthetic
letter of credit facility due 2013 and $50 million first lien
synthetic working capital revolving credit facility due 2011.
Moody's also assigned a rating of B3 to the proposed $495 million
second lien term loan due 2014.
The outlook is stable.
Proceeds from the term loans along with approximately
$451 million of equity provided by Tenaska Power Fund, L.P and a
related co-investment fund will finance the acquisition of several
of generating facilities from Constellation Energy Group
aggregating 3,145 MW and fund various reserve accounts and
transaction costs.
The ratings reflect the inherent high business risk associated
with a predominantly merchant generating portfolio.
However, in comparison to other merchant electricity generators,
TPF Generation's expected cash flows will benefit from a degree of
protection from scheduled capacity payments to be received
primarily during the first five years of the term loans in view of
the power purchase agreement with the California Department of
Water Resources and the energy call option with
J. Aron & Company, for the period 2011 through 2012, following the
expiration of the CDWR contract at the 830 MW High Desert
generation facility in California and the energy call option with
Lehman Brothers at the 800 MW Rio Nogales generating facility in
Texas.
Additionally, the High Desert facility has entered into a gas
hedge with J Aron & Company, for the period 2007 through 2010, to
lock in the price received from the sale of excess gas delivered
under the CDWR PPA.
The credit facilities will benefit from a project style cash
waterfall payment mechanism that will be administered by the
collateral agent. The ratings reflect the inclusion of a 6-month,
cash funded debt service reserve as part of the financing
structure.
Additional liquidity is available through the $250 million
synthetic LC facility and $50 million synthetic working capital
revolving credit facility. While the Ba3 rating for the 1st lien
credit facilities further reflects the inclusion of a 100% cash
sweep for the benefit of the 1st lien lenders, the structure
includes the expected payment of a $6 million annual management
fee to the equity sponsors that will be subordinated to the
project's operating costs and the 1st and 2nd lien debt service.
While TPF Generation's consolidated cash flow coverage metrics map
to a 'B' rating category in comparison to other merchant portfolio
financings, the Ba3 rating for the 1st lien term loan reflects the
greater level of physical capacity contracts that support the cash
flows and reduce overall volatility during the first 5-6 years of
the term loan.
Based upon various gas price scenarios and the independent market
consultant's projections of market power prices, debt service
coverage ratios are projected to be in excess of 1.5x in each year
and range up to 2.5x based upon a 1% annual contractual
amortization level for the 1st lien term loan. Since the debt
service coverage ratios reflect only a minimum 1% required
amortization, Moody's views the ratio of funds from operations to
total debt as a more relevant financial metric.
Accordingly, the consolidated FFO/Debt is expected to be in the
range of approximately 5% to about 7% under reasonable downside
energy price scenarios during the remaining four year term of the
CDWR contract at High Desert ; however, the FFO/Debt on a 1st lien
only basis is expected to be in the 15% to 22% over this period.
These levels of FFO to debt are consistent with a Ba3 and B3
rating for the 1st lien and 2nd lien, respectively, in comparison
to power projects with a similar combination of merchant revenues
that are subject to market conditions and revenues that are
partially supported by contractual arrangements.
The B3 rating of the second lien term loan incorporates the junior
claim that the 2nd lien lenders have on the collateral package and
reflects the relative weaker rights of the second lien lenders
under the inter creditor arrangements.
While the 100% cash sweep will facilitate a reasonable degree of
de-levering of the 1st lien term loan, the degree of pay down is
highly dependent on market conditions for merchant power sales.
Moody's estimates that the cumulative pay down of the
$850 million 1st lien term loan could be expected to be in the
range of approximately $500 million to $800 million by maturity
depending on various gas price scenarios resulting in a modest to
moderate degree of refinancing risk for the first lien holders.
Moody's notes that over 50% of this expected pay down occurs
following the expiration of the CDWR PPA at High Desert, which
increases the vulnerability of the second lien term loan to market
prices and a greater degree of refinancing risk under adverse
market conditions.
The B3 rating of the 2nd lien term loan further reflects the
weaker collateral value that is expected to support the 2nd lien
lenders under various downside scenarios. TPF Generation is
paying a relatively high premium at approximately $520/kw for the
portfolio of generating plants in comparison to recent sales of
other merchant generating plants. However, Moody's notes that the
purchase price includes the value of the above market CDWR PPA,
which is estimated to be about $224 million, based on an
independent appraisal by Stone & Webster.
Moody's expects that while the asset value provides a reasonable
cushion for the 1st lien lenders, the coverage afforded to the 2nd
lien lenders is weaker in comparison to other recent transactions.
Additionally, the financing structure allows for unlimited 1st
lien collateral position to be provided to counterparties in
addition to letters of credit posted under the $250 million 1st
lien synthetic LOC facility, which further weakens the position of
the 2nd lien holders.
The assigned ratings are predicated upon the final structure and
documentation being consistent with Moody's current understanding
of the transaction.
TPF Generation, an indirect subsidiary of Tenaska Power Fund,
L.P., is a special purpose entity created to acquire and own a
3,145 MW portfolio of power generating facilities consisting of
the 830 MW High Desert facility located in California, the 800 MW
Rio Nogales facility in Texas, the 665 MW Holland Energy and the
300 MW University Park facilities in Illinois, the 250 MW Wolf
Hills peaking facility in Virginia and the 300 MW Big Sandy
peaking facility in West Virginia.
TPF GENERATION: S&P Rates $495 Million 2nd Lien Loan at B-
----------------------------------------------------------
Standard & Poor's Rating Services assigned its preliminary 'B+'
and '1' recovery rating ratings to TPF Generation Holdings LLC's
first-lien $850 million senior secured term loan due 2013,
$250 million senior secured synthetic LOC facility due 2013, and
$50 million senior secured synthetic revolver due 2011.
Standard & Poor's also assigned its preliminary 'B-' and '5'
recovery rating to the company's $495 million second lien credit
facility due 2014.
The outlook on all of the facilities is stable.
"The key risks that the project faces are refinancing risk and
asset concentration," said Standard & Poor's credit analyst Daniel
Welt.
"We view two assets, High Desert and Rio Nogales, as having far
greater cash-flow generating potential than the four other plants
in the portfolio," said Mr. Welt.
The stable outlook is driven by strong contractual cash flows
through 2010 and to a lesser extent through 2012 and a good
operating history.
TRANSAX INT'L: Sept. 30 Balance Sheet Upside-Down by $4.1 Million
-----------------------------------------------------------------
Transax International Limited filed its third quarter financial
statements for the three months ended Sept. 30, 2006, with the
Securities and Exchange Commission reporting a $623,578 net loss
on $1,115,930 of revenues for the three months ended Sept. 30,
2006, compared with a $317,780 net loss on $948,993 of net
revenues in the comparable period of 2005.
At Sept. 30, 2006, the company's balance sheet showed $2,003,214
in total assets, $6,179,904 in total liabilities, resulting in a
$4,176,690 in total stockholders' deficit.
The company's September 30 balance sheet also showed strained
liquidity with $849,421 in total current assets available to pay
$5,222,868 in total current liabilities.
A full-text copy of the regulatory filing is available for free
at http://ResearchArchives.com/t/s?165b
Going Concern Doubt
Moore Stephens, P.C., in New York, raised substantial doubt about
Transax International Limited's ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's losses, and working capital and stockholders'
deficiencies.
About Transax International
Based in Miami, Florida, Transax International Limited
(OTCBB: TNSX) -- http://www.transax.com/-- provides hospitals,
physicians and health insurance companies using health information
management systems to manage coding, compliance, abstracting and
recording of management processes. The Company's subsidiaries,
TDS Telecommunication Data Systems LTDA provides services in
Brazil; ransax Australia Pty Ltd. provides those services in
Australia; and Medlink Technologies, Inc., initiates research and
development.
TROPICANA ENT: Moody's Rates Corporate Family Rating at B1
----------------------------------------------------------
Moody's Investors Service assigned first-time ratings to Wimar
OpCo LLC dba Tropicana Entertainment including a Ba3, LGD3, 32% to
the proposed first lien bank facilities, a B3, LGD5, 85% to the
proposed senior subordinated notes, and a B1 corporate family
rating.
The ratings outlook is stable.
Moody's also assigned first-time ratings to Wimar Landco LLC,
including a B2, LGD3, 35% to the proposed $440 million first-lien
senior secured term loan, and a B2 corporate family rating.
The ratings outlook is stable.
The proceeds from Tropicana's first lien term loan and senior
subordinated notes, Landco's first lien term loan together with
contributed equity will be used to fund the acquisition of Aztar
Corporation and Casino Queen, refinance existing debt, fund an
interest reserve for Landco's term loan, and pay associated fees
and expenses.
Tropicana's first lien revolving credit facility provides
alternate liquidity for Tropicana. Tropicana is a privately owned
gaming company owned indirectly by Wimar Tahoe Corporation dba
Columbia Entertainment.
Columbia is an affiliate company of Columbia Sussex Corporation, a
privately held lodging company. Landco is a wholly-owned indirect
subsidiary of Tropicana. Upon closing, Tropicana will own and
operate several gaming properties; Landco will own and operate the
Tropicana Las Vegas casino.
The ratings are subject to final terms and documentation.
Based upon the five key rating factors cited in Moody's Global
Gaming industry methodology, and based on last twelve months pro-
forma financial data, Tropicana's assigned B1 corporate family
rating is in line with its methodology implied rating.
The company's size and diversification are the primary drivers of
the assigned ratings offset by higher than average debt/EBITDA and
lower than average EBITDA/interest metrics.
Tropicana's ratings also reflect the risk associated with the high
purchase multiple paid for Aztar, the company's ability to achieve
cost synergies and to integrate the operations of Aztar with those
of its existing gaming assets. The ratings on the first lien bank
facilities and senior subordinated notes reflect the application
of Moody's Loss Given Default Methodology.
The ratings outlook is stable.
The stable outlook considers the favorable outlook for gaming
demand in the majority of markets in which Tropicana operates and
the likelihood the company can achieve projected cost synergies
and improve operating margins.
Landco's ratings reflect the company's single asset profile, high
leverage, the B1 rating of the company's indirect parent, and in
Moody's opinion, the non-investment grade profile of the sponsor.
The ratings acknowledge the establishment of an interest reserve,
positive cash flow generated by the Las Vegas Tropicana, solid
loan-to-value ratio of around 48%, and location of the property on
gaming entitled land located at the heart of the Las Vegas Strip.
The stable ratings outlook is based on Moody's expectation that
the project will be designed and budgeted appropriately and that
the appraised land value will not change materially to enable a
refinancing of the existing term loan.
These ratings have been assigned to:
* Wimar Opco LLC, dba Tropicana Entertainment:
-- Corporate family rating at B1
-- Probability of default rating at B1
-- $180 million, 5-year first lien revolving credit
facility at Ba3, LGD3, 32%
-- $1,490 million, 5-year first lien term loan at Ba3,
LGD3, 32%
-- $925 million, 8-year senior subordinated notes at B3,
LGD5, 85%
These ratings have been assigned:
* Wimar Landco LLC
-- Corporate family rating at B2
-- Probability of default rating at B3
-- $440 million first lien, 18 month, first lien term loan
at B2, LGD3, 35%
Wimar OpCo LLC, dba Tropicana Entertainment is a privately owned
gaming company. As a result of the pending acquisition of Aztar
Corporation and the contribution of certain gaming assets owned by
Sussex, Tropicana will operate 12 casino properties of which 11
will form the restricted group and the Tropicana Las Vegas will be
an unrestricted subsidiary.
The restricted group will be comprised of five properties
contributed by Columbia Entertainment, two casinos that are owned
by the Yung family that will be obligors and guarantors of
Tropicana's debt obligations, three Aztar properties and Casino
Queen by early 2007. The assets of the restricted group are
located in Atlantic City, New Jersey, Baton Rouge, Louisiana,
Vicksburg and Greenville, Mississippi, Laughlin and Lake Tahoe,
Nevada, Evansville, Indiana and East St. Louis, and Illinois.
Approximately 75% of Tropicana's revenues are generated from
gaming. The restricted group had pro-forma revenues for the
twelve month period ended Sept. 30, 2006 of approximately
$1.3 billion.
Wimar Landco LLC is a wholly-owned indirect subsidiary of
Tropicana. Landco will own and operate the Tropicana Las Vegas
casino to be acquired in the acquisition of Aztar Corporation by
Tropicana. The Tropicana Las Vegas casino is comprised of 1,871
hotel rooms, a 62,000 square foot casino and about 100,000 square
feet of convention space located on 34 acres at the intersection
of Las Vegas Boulevard and Tropicana Avenue.
The Company is currently formulating plans to redevelop the site
to include additional hotels, an expanded gaming floor and more
meeting space. The property is expected to remain open during the
redevelopment which is currently expected to be completed as early
as 2009. During the last twelve months ended
Sept.30, 2006, the property generated revenues of $161.0 million.
UNITY WIRELESS: Sept. 30 Balance Sheet Upside-Down by $4.4 Million
------------------------------------------------------------------
Unity Wireless Corporation reported a $2.3 million net loss on
$1.5 million of net revenues for the three months ended Sept. 30,
2006, compared with a $1 million net loss on $949,700 of net
revenues for the same period in 2005.
At Sept. 30, 2006, the company's balance sheet showed
$27.8 million in total assets and $32.3 million in total
liabilities, resulting in a $4.4 million stockholders' deficit.
The company's Sept. 30 balance sheet also showed strained
liquidity with $10 million in total current assets available to
pay $14.8 million in total current liabilities.
Since its inception, the company has been dependent on investment
capital and debt financing as its primary sources of liquidity.
The company had an accumulated deficit at Sept. 30, 2006, of
$32.6 million.
A full-text copy of the company's quarterly report is available
for free at http://researcharchives.com/t/s?1663
Going Concern Doubt
KPMG LLP expressed doubt about Unity Wireless' ability to continue
as a going concern after auditing the Company's 2005 financial
statements. The auditing firm pointed to the Company's recurring
losses from operations.
About Unity Wireless
Based in Bellingham, Washington, Unity Wireless Corporation
(OTCBB: UTYW) -- http://www.unitywireless.com/-- is a developer
of wireless subsystems and coverage-enhancement solutions for
wireless communications networks.
UNITY WIRELESS: Restates First and Second Quarter Financials
------------------------------------------------------------
Unity Wireless Corporation filed its amended financial statements
for quarterly periods ended March 31, 2006, and June 30, 2006,
with the Securities and Exchange Commission, to restate the
accounting for the $2.2 million convertible debentures and related
warrants issued in February 2006.
During February 2006, the Corporation realized gross cash proceeds
of $2,200,000 from the issuance of 8% redeemable convertible notes
of the Corporation plus 6,875,000 share purchase warrants on the
completion of a private placement effected pursuant to Regulation
D under the Securities Act of 1933. The agreement was signed on
Feb. 28, 2006, and the notes are to mature on Feb. 28, 2009.
Restated First and Second Quarter Results
For the three months ended March 31, 2006, the company incurred a
$2.3 million net loss on $1.1 million of net revenues compared to
a $1.1 million net loss on $1.9 million of net revenues for the
same period in 2005.
At March 31, 2006, the Company's restated balance sheet showed
total assets of $5.1 million, total liabilities of $7.0 million
and total stockholders' equity of $1.8 million.
For the three months ended June 30, 2006, the Company incurred a
$673,934 net loss on $1.9 million of net revenues compared to a
$1.3 million net loss on $1.7 million of net revenues for the same
period in 2005.
At June 30, 2006, the Company's restated balance sheet showed
total assets of $10.1 million, total liabilities of $12.4 million
and total stockholders' equity of $2.3 million.
Full-text copies of the company's amended financial statements for
the quarter ended March 30, 2006, are available for free at:
http://researcharchives.com/t/s?165f
Full-text copies of the company's amended financial statements for
the quarter ended June 31, 2006, are available for free at:
http://researcharchives.com/t/s?1660
Going Concern Doubt
KPMG LLP expressed doubt about Unity Wireless' ability to continue
as a going concern after auditing the Company's 2005 financial
statements. The auditing firm pointed to the Company's recurring
losses from operations.
About Unity Wireless
Based in Bellingham, Washington, Unity Wireless Corporation
(OTCBB: UTYW) -- http://www.unitywireless.com/-- is a developer
of wireless subsystems and coverage-enhancement solutions for
wireless communications networks.
VERILINK CORP: Unsecured Creditors to Receive Shares of Stock
-------------------------------------------------------------
Verilink Corp. and its debtor-affiliate, Larscom Incorporated,
filed with the U.S. Bankruptcy Court for the Northern District of
Alabama a Disclosure Statement explaining their Joint Plan of
Reorganization.
Overview of the Plan
The Debtors' Joint Plan has two major components. First, the Plan
proposes to sell control of Verilink to an investor for $90,000,
deliver 75,000 shares of Verilink's common stock to the
Liquidating Trustee, and deliver 100 shares each of Verilink's
common stock to holders of general unsecured claims. The sale of
the control of Verilink is expected to occur on the effective
date. Thereafter, Reorganized Verilink intends to pursue a
business combination. The Debtors say that if the business
combination is achieved within six months after the effective
date, reorganized Verilink will have its debts discharged.
Otherwise, Verilink may still pursue the business combination but
without the discharge.
Second, the Plan provides that on the effective date, all of the
Debtors' existing assets will transferred to a Liquidating Truste.
The Liquidating Trustee will complete the liquidation of the
assets including pursuing Causes of Action. The Liquidating
Trustee will also be responsible for objections to claims and
distributions to various classes.
Treatment of Claims
The Debtors disclose that they have contested two administrative
expense claims that remain unresolved. The Debtors say that if
they prevail in the position that the sums are not owed, then
there will be sufficient cash on hand by the effective date to pay
all administrative claims in full. However, if the Debtors don't
prevail or the claims remain unresolved, they are likely to have
insufficient funds to play all administrative claims in full. The
Plan however provides that if administrative expense claim are not
paid in full by the effective date, they holders will be paid a
pro rata share of the available distributable cash on the
effective date with the balance being paid when sufficient funds
are available.
Priority Tax Claims will be paid in full either on the effective
date or regular cash installments over a period determined by the
Liquidating Trustee, but not to exceed five years after the
Debtors' petition were filed.
Employee Priority Claims will be paid in full plus 6% interest
after satisfaction of administrative expenses claims and priority
tax claims.
The Debtors disclose that as a result of the sale of substantially
all of their assets, the Secured Claims of Noteholders have been
fully satisfied and released.
The Debtors say that the claim of RBC Centura Bank, a secured
creditor, has also been satisfied and released through a consented
relief from stay with RBC applying a certificate of deposit
securing a letter of credit issued to MetLife. MetLife has drawn
on the letter of credit securing its claim and any remaining claim
is classified as unsecured.
The claims of Agilent Financial Services and Oce Financial
Services are based on equipment leases. These leases have been
rejected and the equipment returned to the respective lessors.
Any remaining claims are thereafter treated as unsecured.
Administrative Convenience Claims consist of allowed claims of
$500 or less or creditors who agree to reduce their claims to $500
or less. Under the Plan, administrative convenience claims will
receive 10% of their allowed claims from available distributable
cash after payment of Administrative Expense Claims, Priority Tax
Claims, and Employee Priority Claims.
Holders of general unsecured claims will receive their pro rata
share of the available distributable cash after payment of all
other claims. Unsecured creditors will also receive their pro
rata share of the Liquidating Trustee's Stock that is not
liquidated and unsecured creditors who are not interest holders
will receive 100 shares of Unsecured Creditors' Stock.
Holders of Verilink's common stock will retain their shares but
the shares will be reversed such that the total amount will be no
more than 10,000 common shares in Verilink. All other equity
interests in Verilink will be cancelled as of the effective date.
The stock in Larscom held by Verilink will be transferred to the
Liquidating Trustee.
A full-text copy of the Debtors' Disclosure Statement is available
for a fee at:
http://www.researcharchives.com/bin/download?id=061205052501
About Verilink Corporation
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.
WARNER MUSIC: Earns $60 Million in Fiscal Year Ended September 30
-----------------------------------------------------------------
Warner Music Group Corp. filed its annual financial statements for
the fiscal year ended Sept. 30, 2006, with the Securities and
Exchange Commission on Dec. 1, 2006.
For the fiscal year ended Sept. 30, 2006, the company reported a
$60 million of net income on $3.516 billion of revenues, compared
with a $169 million net loss on $3.502 billion of revenues in the
comparable prior year.
At Sept. 30, 2006, the company's balance sheet showed
$4.520 billion in total assets, $4.462 billion in total
liabilities, and $58 million in total shareholders' equity. The
company's equity at Sept. 30, 2005, stood at $89 million.
"These year-end results highlight the continued transformation of
Warner Music Group in 2006," Warner Music Group's chairman and
chief executive officer Edgar Bronfman, Jr., said.
"Continued focus on the digital music business yielded dramatic
growth in digital revenue. The increase in our digital Recorded
Music revenue for the fiscal year more than offset declines in our
physical Recorded Music revenue. For the first time our quarterly
digital revenue broke the $100 million barrier. Our quarterly
digital revenue represented 12.2% of our total revenue -- about
double last year's quarter in dollar terms. Obviously, this
quarter we faced the expected tough comparisons against last
year's significant carryover sales and revitalized release
schedule at Atlantic. Based on the company's performance this
year, we're confident that Warner Music is on the right path."
Warner Music Group's executive vice president and chief financial
officer Michael Fleisher added: "We manage our performance on a
fiscal year basis. For the fiscal year, our revenue advanced 1.8%
on a constant-currency basis and OIBDA, excluding non-recurring
items, rose 8.4% driving solid margin expansion. In addition, we
generated strong cash flow for the quarter and fiscal year. Net
cash provided by operating activities for the year was
$307 million, and we had a solid year-ending cash and short-term
investments balance of $385 million."
Fourth-Quarter Results
For the fourth quarter 2006, revenue declined 5.6% to $854 million
from $905 million in the prior-year quarter, driven primarily by
the timing of releases in the Recorded Music business and a
challenging industry environment in both Recorded Music and Music
Publishing. On a constant-currency basis, quarterly revenue
declined 7.1%. Domestic revenue decreased 8.5% while
international revenue was down 3.1%, or 6.0% on a constant-
currency basis.
Operating income for the quarter rose 247.4% to $66 million from
$19 million in the prior-year quarter. Adjusted to exclude the
fourth-quarter non-recurring items, including the Kazaa copyright
infringement settlement in 2006, the Lava restructuring costs, and
certain other non-recurring items in 2005, operating income for
the quarter was $53 million compared with $54 million in the
prior-year quarter and operating margin expanded by 0.2 percentage
points to 6.2%.
OIBDA for the quarter rose 63.6% to $126 million from $77 million
in the prior-year quarter. A djusted to exclude the fourth-quarter
non-recurring items, OIBDA for the quarter was $113 million
compared with $112 million in the prior-year quarter and OIBDA
margin advanced by 0.8 percentage points to 13.2%. The company's
OIBDA margin improvement reflects the benefit of a shift to
higher-margin digital revenue and improved music publishing
margins.
Net income was $12 million for the quarter. Net loss in the
fourth quarter of 2005 was $30 million. Adjusted to exclude the
fourth-quarter non-recurring items, net loss for the fourth
quarter of 2006 was $1 million compared with net income of
$5 million for the comparable quarter in 2005.
The company also reported a cash and short-term investments
balance of $385 million (including a cash balance of $367 million
and short-term investments of $18 million), total long-term debt
of $2.3 billion and net debt (total long-term debt minus cash and
short-term investments) of $1.9 billion, as of Sept. 30, 2006.
For the quarter, net cash provided by operating activities was
$84 million. Free cash flow amounted to $62 million, compared
with $33 million in the comparable fiscal 2005 quarter. Unlevered
after-tax cash flow (defined as free cash flow excluding cash
interest paid and non-recurring management fees) was $85 million,
compared with $55 million in the comparable fiscal 2005 quarter.
Full-Year Results
For the company's full year 2006, revenue increased 0.4% to
$3.516 billion from $3.502 billion last year. On a constant-
currency basis, total revenue advanced 1.8% year on year. Total
revenue in 2006 was split 48% domestic and 52% international.
Reflecting balanced growth, domestic revenue rose 1.6% while
international revenue declined 0.8% but was up 1.9% on a constant-
currency basis. Total digital revenue rose 126% year on year to
$355 million and was split 71% domestic and 29% international,
consistent with the territorial split in recent quarters.
The company's reported operating income of $283 million increased
from $84 million in the last fiscal year. Adjusted to exclude the
non-recurring items, including the Kazaa copyright infringement
settlement in 2006 and the previously announced Lava restructuring
costs, non-recurring items related to the company's IPO and
certain other non-recurring items in 2005, operating income rose
18.4% year over year to $270 million from $228 million.
OIBDA for the fiscal year amounted to $518 million compared with
$322 million last year. Adjusted to exclude the fiscal-year non-
recurring items, OIBDA increased 8.4% to $505 million from
$466 million last year, contributing to a 1.1 percentage point
margin improvement to 14.4%, resulting from higher revenues, cost
containment and a positive mix shift towards digital sales.
For the fiscal year, net cash provided by operating activities was
$307 million. Free cash flow amounted to $172 million, including
$63 million in net cash outflow related to the acquisition of Ryko
Corporation. This compared to free cash flow of $151 million in
fiscal year 2005, including $30 million in net cash outflow
related to the Bad Boy joint venture, plus $49 million in net cash
inflow from the sale of certain assets. Unlevered after-tax cash
flow was $313 million, compared to $308 million in fiscal year
2005 (see below for calculation of Non-GAAP Free Cash Flow and
unlevered after-tax cash flow).
Recorded Music
Recorded Music revenue increased 2.8% to $3,005 million, as
digital growth more than offset declines on the physical side of
the business. On a constant-currency basis, Recorded Music
revenue grew 4.1% from $2,886 million. Digital Recorded Music
revenue of $335 million represented 11.1% of total Recorded Music
revenue for fiscal 2006. Domestic Recorded Music digital revenue
amounted to $242 million or 16.3% of total domestic Recorded Music
revenue. Major sellers for the year were Madonna, James Blunt,
Red Hot Chili Peppers, Enya, and Green Day.
Recorded Music operating income advanced 47.4% to $317 million for
the year from $215 million last year. Adjusted to exclude the
fiscal-year non-recurring items, operating income rose 14.3% to
$304 million and operating income margin expanded 1.0 percentage
point to 10.1%.
Recorded Music OIBDA improved 26.3% to $480 million for the year
from $380 million last year. Adjusted to exclude the fiscal-year
non-recurring items, OIBDA rose 8.4% to $467 million and Recorded
Music OIBDA margin rose 0.8 percentage points to 15.5%.
Music Publishing
Music Publishing revenue declined by 11.4% from the prior year to
$538 million, and declined 9.9% on a constant-currency basis.
Excluding the results of the sheet music business sold on May 31,
2005, which contributed revenue of $34 million in fiscal year
2005, revenue fell 6.1%.
Digital revenue from Music Publishing of $20 million represented
3.7% of total Music Publishing revenue. An increase in
performance revenue of 2.7% was offset by declines in mechanical
and synchronization revenue of 14.8% and 14.4%, respectively.
Music Publishing operating income rose 2.4% to $84 million for the
year, yielding an operating margin of 15.6%, up 2.1 percentage
points year over year. Music Publishing OIBDA was $144 million,
up 2.1% from $141 million in the prior year, leading to a margin
increase of 3.5 percentage points to 26.8%.
Non-Recurring Items
Fourth quarter 2006 and fiscal year 2006 adjustments
In the fourth quarter of 2006 and for the year ended Sept. 30,
2006, non-recurring items consisted of approximately $13 million
of income related to the previously announced settlement of
copyright infringement litigation between the major music
companies and peer-to-peer network, Kazaa. The company recorded
an estimate of the amounts it expects to receive as a result of
the settlement, net of the estimated amounts payable to its
artists in royalties. The tax expense associated with this income
is estimated to be immaterial.
Fourth quarter 2005 adjustments
In the fourth quarter of 2005, non-recurring items included a
restructuring charge of $7 million for the integration of the Lava
label into The Atlantic Records Group, which included severance
and contract terminations related to the integration of
operations, as well as other non-recurring charges of $24 million
specifically related to the departure of an Atlantic executive and
the expensing of certain other amounts. Approximately $20 million
of these charges were non-cash. In addition, the company took a
$4 million charge in the fourth quarter of 2005 for the $5 million
settlement of a government investigation into radio promotion
practices by New York State Attorney General. The remaining
$1 million of this settlement was accrued for in the third fiscal
quarter of 2005. The tax benefit associated with these
adjustments is estimated to be immaterial.
Additional fiscal year 2005 adjustments
For the year ended Sept. 30, 2005, non-recurring, IPO-related
items included the $73 million fee to terminate the management
contract with the Investor Group, $6 million of management fees
paid to the Investor Group under the management contract prior to
the termination, certain cash payments to employees totaling
$29 million related to the issuance of stock awards below fair
market value and payment of an IPO cash bonus to employees, as
well as $35 million resulting from the payment of redemption
premiums and other charges in connection with the previously
announced redemption of debt issued by the company's subsidiary,
WMG Holdings Corp. All of these charges were previously reported
in the third quarter fiscal 2005 results. Non-Recurring Items had
a related tax benefit of $3 million for the 2005 fiscal year.
FAS 123 Expenses
FAS 123 expenses were $16 million and $25 million for the fiscal
years ended Sept. 30, 2006, and 2005, respectively. For the
quarters ended Sept. 30, 2006, and 2005, respectively, FAS 123
expenses were $4 million and $7 million.
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1666
About Warner Music Group
Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- is
a music company that operates through numerous international
affiliates and licensees in more than 50 countries.
* * *
As reported in the Troubled Company Reporter on Nov. 2, 2006,
Standard & Poor's Ratings Services raised its long-term corporate
credit and senior secured ratings on Warner Music Group Corp. to
'BB-' from 'B+'. At the same time, Standard & Poor's raised its
senior subordinated debt rating on WMG to 'B' from 'B-', two
notches below the 'BB-' corporate credit rating. S&P said the
outlook is stable.
Warner Music Group Corp. carries Fitch Ratings' BB- issuer default
rating assigned in May 2006.
WESTLAND HOLDINGS: Takeover OK Cues Moody's to Withdraw Ratings
---------------------------------------------------------------
Moody's Investors Service has withdrawn the ratings of Westland
Holdings, LLC after the disclosure that shareholders of Westland
Development Company, Inc. had approved their own takeover by a
unit of SunCal Companies.
These ratings have been withdrawn:
-- B1 on the $175 million first-lien senior secured term loan
due 2011;
-- B2 on the $50 million second-lien senior secured term loan
due 2012; and,
-- B2 corporate family rating.
Westland Holdings, LLC, a separate entity of The Rhodes Companies,
LLC, attempted to buy Westland Development Company, Inc. for
$211.6 million earlier this year but was subsequently outbid by
SunCal. Westland Development Company, Inc. is a privately-held
but publicly-registered land development firm whose real estate
holdings, currently comprising 55,000 mainly contiguous acres near
the Albuquerque, New Mexico central business district, originated
as a land grant from the king of Spain in 1692.
WESTON NURSERIES: Unsecured Creditors to Receive 100% Under Plan
----------------------------------------------------------------
Weston Nurseries Inc. filed with the U.S. Bankruptcy Court for the
District of Massachusetts a Third Amended Disclosure Statement
explaining its Third Amended Chapter 11 Plan of Reorganization.
Overview of the Plan
The Debtor discloses that the Amended Plan provides for the
reorganization of the Debtor as a going concern, and for the
payment of all Allowed Claims through use of:
(a) a portion of the funds obtained from the proceeds of a
sale pursuant to Section 363 of the Bankruptcy Code to
Boulder Capital LLC, or other counteroffers as approved by
the Bankruptcy Court,
(b) a portion of the funds from the proceeds of the sale of
all of the issued and outstanding shares of stock of
Mezitt Agricultural Corporation, along with certain real
estate owned by the Debtor, Roger N. Mezitt, R. Wayne
Mezitt and certain of their relatives or, alternatively, a
sale of real property owned by the Debtor, MezAg, as well
as by Roger Mezitt, Wayne Mezitt, and certain of their
relatives;
(c) a portion of the funds that the Debtor will borrow on a
secured basis from Business Alliance Capital Company,
Boulder, or other lender or purchaser as the Debtor may
determine;
(d) to the extent necessary, the revenues generated by the
operation of the Debtor's business after confirmation of
the Amended Plan; and
(e) to the extent necessary, the proceeds of recoveries
realized from the prosecution or settlement of any Causes
of Action.
Asset Sale
The Debtor relates that pursuant to a Notice of Intended Sale to
be filed by Dec. 8, 2006, Boulder, or other counteroffers at the
Section 363 Sale, will acquire between 700 and 800 acres of the
Real Property by purchasing all of the stock in MezAg, together
with certain parcels of the Real Property not owned by MezAg. The
closing of the Section 363 Sale will take place 30 days after the
later of:
(i) the expiration or waiver by Boulder of the due diligence
period provided for in the Purchase and Sale Agreement;
(ii) Court approval of the Sale; or
(iii) the expiration or waiver by Hopkinton of its rights under
Chapter 61A.
Exit Financing
The Debtor discloses that it will obtain exit financing pursuant
to a term note to be executed and delivered to BACC or Boulder or
other lender as the Debtor may determine. In accordance with the
Exit Financing Note, the Debtor will have the ability to borrow up
to $2 million, secured by a lien on that portion of the real
property that the Debtor will retain under the Amended Plan.
The Debtor contemplates that if it obtains the exit financing
prior to the closing of the asset sale, in order to fund any
obligations under the Amended Plan, the Exit Financing will be
repaid by use of the Sale Proceeds.
Treatment of Claims
Under the amended Plan, Priority Non-Tax Claims will be paid in
full.
The Secured Claim of Business Alliance will be allowed in an
amount equal to all amounts due to Business Alliance pursuant to
the DIP Facility Order, including all amounts paid on account of
its professional fees and expenses as may be authorized by the
Court. In full satisfaction Business Alliance's Secured Claim,
Business Alliance will retain all payments received prior to the
effective date and in addition, will be paid in full and in cash
from the Sale Proceeds on the closing date of the sale, as the
Debtor may determine.
The Secured Claim of First Pioneer will be allowed in an amount
equal to all amounts due to First Pioneer pursuant to the First
Pioneer Notes, including all amounts paid on account of its
professional fees and expenses as may be authorized by the Court.
In full satisfaction of First Pioneer's Secured Claim, First
Pioneer will retain all payments received prior to the Effective
Date, and will be paid in full and in cash from the Sale Proceeds
on the closing date of the sale.
Other Secured Claims consisting of the claims of holders of
various secured equipment liens, at the option of the Debtor, will
receive either:
(i) cash in an amount equal to the allowed claim, including
any interest required to be paid pursuant to Section
506(b) of the Bankruptcy Code,
(ii) return of the collateral securing the claim, in full and
complete satisfaction of the claim,
(iii) reinstatement of the debt constituting the claim in
accordance with Section 1124(2) of the Bankruptcy Code; or
(iv) modification or compromise of the claim as agreed between
the Debtor and the holder of the claim.
The Claims of Hopkinton, Massachusetts, and the Town of Ashland
will be paid in full and in cash.
The Debtor relates that non-insider holders of General Unsecured
Claims will be paid 100%.
The Unsecured Claims of MezAg and Mezitt Family Members, pursuant
to the Amended Plan and Settlement Agreement, will be waived or
paid according to the terms of the Settlement Agreement.
The Debtor discloses that Wayne Mezitt and Roger Mezitt each own
13% of the issued and outstanding shares of the Debtor's stock and
are equal beneficiaries of the EVM Trust, which owns the remaining
74%. Under the Settlement Agreement, Roger Mezitt will transfer
his shares to Wayne Mezitt
A full-text copy of the Debtors Disclosure Statement is available
for a fee at:
http://www.researcharchives.com/bin/download?id=061205052856
About Weston Nurseries
Headquartered in Hopkinton, Massachusetts, Weston Nurseries, Inc.,
-- http://www.westonnurseries.com/-- is central New England's
premier resource in designing, creating, and enjoying outdoor
living areas. Weston Nurseries grows and sells plants, trees,
shrubs, and perennials. The Company filed for chapter 11
protection on Oct. 14, 2005 (Bankr. D. Mass. Case No. 05-49884).
Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP, represents
the Debtor in its restructuring efforts. Michael J. Fencer, Esq.,
and Steven C. Reingold, Esq., at Jager Smith, PC, represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it estimated assets and debts
of $10 million to $50 million.
WILLIAMS PARTNERS: Moody's Rates $600 Million Note Offer at Ba3
---------------------------------------------------------------
Moody's Investors Service assigned a Ba3 senior unsecured rating
to Williams Partners L.P.'s proposed $600 million note offering,
the same as WPZ's current senior unsecured rating. WPZ intends to
use the proceeds from this offering to fund a portion of the
purchase price of the remaining 74.9% interest in Williams Four
Corners LLC from its parent, The Williams Companies, Inc.
Moody's also affirmed WPZ's Ba3 Corporate Family Rating with a
stable outlook.
WPZ reported it agreed to acquire the remaining 74.9% Four Corners
interest for $1.223 billion from Williams. This comes after WPZ's
acquisition of a 25.1% interest in Four Corners this past June.
Four Corners owns a natural gas gathering, treating and processing
system in the San Juan Basin in Colorado and New Mexico. WPZ
intends to fund the purchase with nearly 50% debt, which is at the
high end of its target to fund acquisitions with 40-50% debt.
Total funding is expected to consist of approximately
$350 million privately placed equity, $270 million public equity,
$30 million in retained B units and General Partner contributions
and the proceeds from this $600 million note offering. The terms
and conditions of the proposed notes are substantially the same as
WPZ's existing $150 million notes issued in June.
Moody's views this transaction as neutral overall for WPZ's credit
profile, as increased scale and fee-based revenue is offset by
greater concentration risk and higher leverage.
The additional interest in Four Corners will add to the company's
size, roughly doubling its assets. Adding the other 74.9% it does
not already own will reduce the complexity associated with a
significant portion of WPZ's assets accounted for under the equity
method.
However, the acquisition increases WPZ's concentration risk as
over 80% of its cash flow will come from Four Corners. While WPZ
is paying proportionately more for the 74.9% share than the
original 25.1% interest, it is paying a reasonable 9x EBITDA.
This acquisition will increase WPZ's leverage, although the
company is starting from a lower leverage level. Based on nine
months EBITDA, Moody's estimates WPZ is funding the debt portion
of the acquisition at about 4.4x debt/EBITDA, which is higher than
its long term target to keep debt/EBITDA below 3.5x. WPZ's
leverage, based on LTM 9/30 and pro forma for the acquisition, is
expected to be 3.6x.
Williams Partners L.P., headquartered in Tulsa, Oklahoma, is a MLP
engaged in midstream natural gas gathering and processing, and
natural gas liquids fractionating and storage.
WIMAR LANDCO: Moody's Rates Proposed $440 Mil. Senior Loan at B2
----------------------------------------------------------------
Moody's Investors Service assigned first-time ratings to Wimar
OpCo LLC, dba Tropicana Entertainment, including a Ba3, LGD3, 32%
to the proposed first lien bank facilities, a B3, LGD5, 85% to the
proposed senior subordinated notes, and a B1 corporate family
rating.
The ratings outlook is stable.
Moody's also assigned first-time ratings to Wimar Landco LLC,
including a B2, LGD3, 35% to the proposed $440 million first-lien
senior secured term loan, and a B2 corporate family rating.
The ratings outlook is stable.
The proceeds from Tropicana's first lien term loan and senior
subordinated notes, Landco's first lien term loan together with
contributed equity will be used to fund the acquisition of Aztar
Corporation and Casino Queen, refinance existing debt, fund an
interest reserve for Landco's term loan, and pay associated fees
and expenses.
Tropicana's first lien revolving credit facility provides
alternate liquidity for Tropicana. Tropicana is a privately owned
gaming company owned indirectly by Wimar Tahoe Corporation dba
Columbia Entertainment.
Columbia is an affiliate company of Columbia Sussex Corporation, a
privately held lodging company. Landco is a wholly-owned indirect
subsidiary of Tropicana. Upon closing, Tropicana will own and
operate several gaming properties; Landco will own and operate the
Tropicana Las Vegas casino.
The ratings are subject to final terms and documentation.
Based upon the five key rating factors cited in Moody's Global
Gaming industry methodology, and based on last twelve months pro-
forma financial data, Tropicana's assigned B1 corporate family
rating is in line with its methodology implied rating.
The company's size and diversification are the primary drivers of
the assigned ratings offset by higher than average debt/EBITDA and
lower than average EBITDA/interest metrics.
Tropicana's ratings also reflect the risk associated with the high
purchase multiple paid for Aztar, the company's ability to achieve
cost synergies and to integrate the operations of Aztar with those
of its existing gaming assets. The ratings on the first lien bank
facilities and senior subordinated notes reflect the application
of Moody's Loss Given Default Methodology.
The ratings outlook is stable.
The stable outlook considers the favorable outlook for gaming
demand in the majority of markets in which Tropicana operates and
the likelihood the company can achieve projected cost synergies
and improve operating margins.
Landco's ratings reflect the company's single asset profile, high
leverage, the B1 rating of the company's indirect parent, and in
Moody's opinion, the non-investment grade profile of the sponsor.
The ratings acknowledge the establishment of an interest reserve,
positive cash flow generated by the Las Vegas Tropicana, solid
loan-to-value ratio of around 48%, and location of the property on
gaming entitled land located at the heart of the Las Vegas Strip.
The stable ratings outlook is based on Moody's expectation that
the project will be designed and budgeted appropriately and that
the appraised land value will not change materially to enable a
refinancing of the existing term loan.
These ratings have been assigned to:
* Wimar Opco LLC, dba Tropicana Entertainment:
-- Corporate family rating at B1
-- Probability of default rating at B1
-- $180 million, 5-year first lien revolving credit
facility at Ba3, LGD3, 32%
-- $1,490 million, 5-year first lien term loan at Ba3,
LGD3, 32%
-- $925 million, 8-year senior subordinated notes at B3,
LGD5, 85%
These ratings have been assigned:
* Wimar Landco LLC
-- Corporate family rating at B2
-- Probability of default rating at B3
-- $440 million first lien, 18 month, first lien term loan
at B2, LGD3, 35%
Wimar OpCo LLC, dba Tropicana Entertainment is a privately owned
gaming company. As a result of the pending acquisition of Aztar
Corporation and the contribution of certain gaming assets owned by
Sussex, Tropicana will operate 12 casino properties of which 11
will form the restricted group and the Tropicana Las Vegas will be
an unrestricted subsidiary.
The restricted group will be comprised of five properties
contributed by Columbia Entertainment, two casinos that are owned
by the Yung family that will be obligors and guarantors of
Tropicana's debt obligations, three Aztar properties and Casino
Queen by early 2007. The assets of the restricted group are
located in Atlantic City, New Jersey, Baton Rouge, Louisiana,
Vicksburg and Greenville, Mississippi, Laughlin and Lake Tahoe,
Nevada, Evansville, Indiana and East St. Louis, and Illinois.
Approximately 75% of Tropicana's revenues are generated from
gaming. The restricted group had pro-forma revenues for the
twelve month period ended Sept. 30, 2006 of approximately
$1.3 billion.
Wimar Landco LLC is a wholly-owned indirect subsidiary of
Tropicana. Landco will own and operate the Tropicana Las Vegas
casino to be acquired in the acquisition of Aztar Corporation by
Tropicana. The Tropicana Las Vegas casino is comprised of 1,871
hotel rooms, a 62,000 square foot casino and about 100,000 square
feet of convention space located on 34 acres at the intersection
of Las Vegas Boulevard and Tropicana Avenue.
The Company is currently formulating plans to redevelop the site
to include additional hotels, an expanded gaming floor and more
meeting space. The property is expected to remain open during the
redevelopment which is currently expected to be completed as early
as 2009. During the last twelve months ended
Sept.30, 2006, the property generated revenues of $161.0 million.
YES! ENTERTAINMENT: Wham-O Settles Royalty Suit for $300,000
------------------------------------------------------------
Wham-O Inc. will pay $300,000 to settle a lawsuit filed in 2003 by
Executive Sounding Board Associates Inc. in its capacity as the
trustee of the YES! Entertainment Corp. Liquidating Trust, which
is overseeing the liquidation of YES! Corp.'s assets.
The lawsuit (Bankr. D. Del. Adv. Pro. No. 99-273) charged Wham-O
with failing to pay certain royalties due and owing pursuant to
the Asset Purchase Agreement under which YES! Entertainment sold
its Food and Girls Activity business units to Wham-O, Inc., in
1998 in exchange for:
-- a $9.8 million up-front cash payment;
-- up to $600,000 more pending a final inventory
reconciliation;
-- a $2.5 million contingency payment to be earned based upon
certain performance criteria for the Food line in the
first year, and
-- royalties of up to $5.5 million over a seven-year period.
The Bankruptcy Court published an opinion on Jan. 6, 2006, ruling
against Wham-O. Both the Trustee and Wham-O appealed to the U.S.
District Court (D. Del. Civ. Action Nos. 06-154 and 06-155) from
that decision. The District Court steered the parties to
mediation in May 2006. The settlement pact calls for the
dismissal of these cross-appeals.
The Trustee will distribute the Settlement Proceeds to YES!
Entertainment's unsecured creditors.
Headquartered in Pleasonton, California, Yes! Entertainment
Corporation, developed, manufactured and marketed toys and other
entertainment and interactive products. The Company filed for
chapter 11 protection on February 9, 1999 (Bankr. D. Del. Case No.
99-273). Anthony M. Saccullo, Esq., and Jeffrey M. Schlerf, Esq.,
at The Bayard Firm represented the Debtor. When the Debtor filed
for protection from its creditors, it listed $18,635,000 in total
assets and $19,680,000 in total debts. Blank Rome Comisky &
McCauley, LLP, and Squadron Ellenoff Plesent & Sheinfeld LLP
represented the Official Committee of Unsecured Creditors. On
December 11, 2001, the Honorable Mary F. Walrath confirmed a First
Amended Plan of Reorganization. In April 2002, the Plan became
effective. Mr. Schlerf also represents the Creditor Trust created
under that Plan.
* Proskauer Names D. E. Remensperger and R. Tanden as Partners
--------------------------------------------------------------
Proskauer Rose LLP has named D. Eric Remensperger and Raj Tanden
as partners in its Los Angeles office. They join a rapidly-
expanding office that has significantly grown its transactional
capabilities in recent years.
Mr. Remensperger, who joins the firm as a real estate partner and
will head Proskauer's West Coast Real Estate Department, was a
real estate partner at Gibson, Dunn & Crutcher, LLP. He has over
20 years of experience advising clients on virtually all aspects
of real estate law, with a focus on institutional investors,
particularly in the area of secured lending work, portfolio
acquisitions and capital deployment.
Mr. Tanden, a tax partner at Morrison & Foerster, brings to the
Proskauer Tax Department a wide-ranging practice that runs the
gamut of domestic and international transactions, including
mergers, acquisitions, spin-offs, joint ventures and divestitures.
"The expertise of Eric and Raj, the latest in our recent string of
important additions to our Los Angeles office, will be a key
component in our continuing emergence as one of the preeminent
transactional practices in Southern California, as well as a
significant enhancement to our international real estate and
lodging and gaming practices," said Allen I. Fagin, chair of
Proskauer.
The additions increase the breadth and depth of the firm's premier
West Coast transactional practice, which includes lawyers handling
a wide array of complex matters in the banking and finance,
capital markets, mergers and acquisitions, private equity,
entertainment, real estate and tax arenas.
Michael Woronoff, who heads Proskauer's California Corporate
Department, said the addition of Mr. Remensperger and Mr. Tanden
will add to the firm's growing reputation as the go-to
transactional firm in Southern California.
"The additions of Eric and Raj bring important capabilities to the
firm that will dramatically bolster our ability to meet the needs
of clients in complex business transactions in this market and
around the world," said Mr. Woronoff.
Mr. Woronoff pointed to the addition earlier this year of
Fred Bernstein, a partner who focuses on a broad spectrum of
activities relating to the creation and financing of entertainment
content, as another example of the firm's success in continuing to
build its transactional platform in Los Angeles.
Mr. Remensperger's experience embraces a wide range of real estate
transactions, including asset purchases and dispositions, secured
and mezzanine financings, sale-leaseback transactions, leveraged
lease transactions, synthetic leases, real estate investment
trusts, construction and development projects, workouts and debt
restructurings, tax-exempt bond financings,
the formation of investment vehicles and joint ventures,
limited partnerships, limited liability companies and other
equity/participation arrangements, securitized debt transactions,
project finance and commercial leases.
A frequent panelist and speaker, Mr. Remensperger has also been
active in the New York and Los Angeles Bar associations and
currently sits on the Executive Committee for the Real Property
Law Section of the Los Angeles County Bar Association. Mr.
Remensperger is admitted to practice in both New York and
California and received his law degree from Brooklyn Law School
and his Bachelor of Arts degree from Manhattanville College.
Beside his transactional expertise, Mr. Tanden represents clients
in state and local tax matters, tax controversies, executive
compensation and general tax planning, and works with pass-through
entities, including partnerships, mutual funds, real estate
investment trusts and S corporations. Mr. Tanden has been an
adjunct professor at Golden Gate University School of Law and is a
frequent author and speaker on issues relating to taxation and
corporate transactions. In addition, Mr. Tanden is a member of
the Tax Advisory Group for the Investment Company Institute, the
Government Relations Committee of the National Association of Real
Estate Investment Trusts, and the Executive Committee of the
University of Southern California Law School Tax Institute. Mr.
Tanden received his LL.M. from New York University Law School, his
J.D. from the University of Southern California Law School, and
his B.S. from the University of Southern California.
About Proskauer Rose
Proskauer Rosen LLP -- http://www.proskauer.com/-- founded in
1875, provides legal services to clients throughout the United
States and around the world from offices in New York, Los Angeles,
Washington, D.C., Boston, Boca Raton, Newark, New Orleans and
Paris. The firm has wide experience in all areas of practice
important to businesses and individuals, including corporate
finance, mergers and acquisitions, general commercial litigation,
private equity and fund formation, patent and intellectual
property litigation and prosecution, labor and employment law,
real estate transactions, internal corporate investigations, white
collar criminal defense, bankruptcy and reorganizations, trusts
and estates, and taxation. Its clients span industries including
chemicals, entertainment, financial services, health care,
hospitality, information technology, insurance, Internet,
manufacturing, media and communications, pharmaceuticals, real
estate investment, sports, and transportation.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
December 7, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
The Newark Club, Newark, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
December 7, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Cash Management After The Storm:
Near-Term Planning for Long-Term Business Success
Sheraton, Metairie, LA
Contact: http://www.turnaround.org/
December 8, 2006
CEB
Creditors' Remedies & Debtors' Rights
Los Angeles / Century City, CA
Contact: http://www.ceb.com/
December 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
LI TMA Holiday Party
TBA, Long Island, New York
Contact: 631-251-6296 or http://www.turnaround.org/
December 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Christmas Function
GE Commercial Finance, Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
December 20, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Holiday Extravaganza - TMA, AVF & CFA
Georgia Aquarium, Atlanta, GA
Contact: 678-795-8103 or http://www.turnaround.org/
January 11, 2007
BEARD AUDIO CONFERENCES
Diagnosing Problems in Troubled Companies: Evaluating
Turnaround Potential and Establishing the Basis for
Actionable, Achievable Solutions
Contact: 240-629-3300 or
http://www.beardaudioconferences.com/
January 11, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Lender's Panel
University Club, Jacksonville, FL
Contact: http://www.turnaround.org/
January 12, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Annual Lender's Panel Breakfast
Westin Buckhead, Atlanta, GA
Contact: http://www.turnaround.org/
January 17, 2007
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
TBA, South FL
Contact: 561-882-1331 or http://www.turnaround.org/
January 17-19, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Distressed Investing Conference
Wynn, Las Vegas, NV
Contact: http://www.turnaround.org/
February 8-11, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Certified Turnaround Professional (CTP) Training
NY/NJ
Contact: http://www.turnaround.org/
February 22, 2007
TURNAROUND MANAGEMENT ASSOCIATION
TMA PowerPlay - Atlanta Thrashers
Philips Arena, Atlanta, GA
Contact: 678-795-8103 or http://www.turnaround.org/
January 25-27, 2007
AMERICAN BANKRUPTCY INSTITUTE
Rocky Mountain Bankruptcy Conference
Hyatt Regency, Denver, CO
Contact: 1-703-739-0800; http://www.abiworld.org/
February 8-9, 2007
EUROMONEY
Leveraged Finance Asia
JW Marriott Hong Kong
Contact: http://www.euromoneyplc.com/
February 21-22, 2007
EUROMONEY
Euromoney Pakistan Conference
Perceptions & Realities
Marriott Hotel, Islamabad, Pakistan
Contact: http://www.euromoneyplc.com/
February 22, 2007
EUROMONEY
2nd Annual Euromoney Japan Forex Forum
Mandarin Oriental, Tokyo, Japan
Contact: http://www.euromoneyplc.com/
February 25-26, 2007
NORTON INSTITUTES
Norton Bankruptcy Litigation Institute
Marriott Park City, UT
Contact: http://www2.nortoninstitutes.org/
February 2007
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
San Juan, Puerto Rico
Contact: 1-703-739-0800; http://www.abiworld.org/
March 1, 2007
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts for Young Practitioners - West
Regency Beverly Wilshire, Los Angeles, CA
Contact: http://www.abiworld.org/
March 2, 2007
AMERICAN BANKRUPTCY INSTITUTE
15th Annual Bankruptcy Battleground West
Regency Beverly Wilshire, Los Angeles, CA
Contact: http://www.abiworld.org/
March 15, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Martini Madness Cocktail Reception with Geraldine Ferraro
Westin Buckhead, Atlanta, GA
Contact: 678-795-8103 or http://www.turnaround.org/
March 15-18, 2007
NATIONAL ASSOCIATION OF BANKRUTPCY TRUSTEES
NABT Spring Seminar
Ritz-Carlton Buckhead, Atlanta, GA
Contact: http://www.NABT.com/
March 21, 2007
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
TBA, South FL
Contact: 561-882-1331 or http://www.turnaround.org/
March 21-22, 2007
EUROMONEY
2nd Annual Vietnam Investment Forum
Melia, Hanoi, Vietnam
Contact: http://www.euromoneyplc.com/
March 21-22, 2007
EUROMONEY
Euromoney Indian Financial Market Congress
Grand Hyatt, Mumbai, India
Contact: http://www.euromoneyplc.com/
March 27, 2007
TURNAROUND MANAGEMENT ASSOCIATION
"The Six Keys of Sustained Profitable Growth"
Rodney Page, Senior Partner of Blue Springs Partners
Citrus Club, Orlando, FL
Contact: http://www.turnaround.org/
March 27-31, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Spring Conference
Four Seasons Las Colinas, Dallas, Texas
Contact: http://www.turnaround.org/
March 29-31, 2007
ALI-ABA
Chapter 11 Business Reorganizations
Scottsdale, Arizona
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/
April 11-15, 2007
AMERICAN BANKRUPTCY INSTITUTE
ABI Annual Spring Meeting
J.W. Marriott, Washington, DC
Contact: 1-703-739-0800; http://www.abiworld.org/
April 12, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
University Club, Jacksonville, FL
Contact: 561-882-1331 or http://www.turnaround.org/
April 12, 2007
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts for Young Practitioners - East
JW Marriott, Washington, DC
Contact: http://www.abiworld.org/
April 20, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast meeting with Chapter President, Bruce Sim
Westin Buckhead, Atlanta, GA
Contact: 678-795-8103 or http://www.turnaround.org/
April 24, 2007
TURNAROUND MANAGEMENT ASSOCIATION
"Why Prospects Become Clients"
Mark Fitzgerald, President of Sales Training Institute Inc
Centre Club, Tampa, FL
Contact: http://www.turnaround.org/
April 26-28, 2007
ALI-ABA
Fundamentals of Bankruptcy Law
Philadelphia, PA
Contact: http://www.ali-aba.org
April 29 - May 1, 2007
INTERNATIONAL BAR ASSOCIATION
International Insolvency Conference
Zurich, Switzerland
Contact: http://www.ibanet.org/
May 14, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Annual TMA Atlanta Golf Outing
White Columns, Atlanta, GA
Contact: 678-795-8103 or http://www.turnaround.org/
May 4, 2007
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts for Young Practitioners - NYC
Alexander Hamilton US Custom House, SDNY
New York, NY
Contact: http://www.abiworld.org/
May 7, 2007
AMERICAN BANKRUPTCY INSTITUTE
9th Annual New York City Bankruptcy Conference
Millennium Broadway Hotel & Conference Center
New York, NY
Contact: http://www.abiworld.org/
May 16, 2007
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
TBA, South FL
Contact: 561-882-1331 or http://www.turnaround.org/
June 6-9, 2007
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
23rd Annual Bankruptcy & Restructuring Conference
Westin River North, Chicago, Illinois
Contact: http://www.airacira.org/
June 14-17, 2007
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
June 28 - July 1, 2007
NORTON INSTITUTES
Norton Bankruptcy Litigation Institute
Jackson Lake Lodge, Jackson Hole, WY
Contact: http://www2.nortoninstitutes.org/
July 12, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
University Club, Jacksonville, FL
Contact: 561-882-1331 or www.turnaround.org
July 12-15, 2007
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Marriott, Newport, RI
Contact: 1-703-739-0800; http://www.abiworld.org/
July 18, 2007
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
TBA, South FL
Contact: 561-882-1331 or http://www.turnaround.org/
July 25-28, 2007
AMERICAN BANKRUPTCY INSTITUTE
12th Annual Southeast Bankruptcy Workshop
The Sanctuary, Kiawah Island, SC
Contact: http://www.abiworld.org/
August 9-11, 2007
AMERICAN BANKRUPTCY INSTITUTE
3rd Annual Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay
Cambridge, MD
Contact: http://www.abiworld.org/
September 6-8, 2007
AMERICAN BANKRUPTCY INSTITUTE
15th Annual Southwest Bankruptcy Conference
Four Seasons
Las Vegas, NV
Contact: http://www.abiworld.org/
September 19, 2007
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
TBA, South FL
Contact: 561-882-1331 or http://www.turnaround.org/
October 10-13, 2007
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Orlando, Florida
Contact: http://www.ncbj.org/
October 11, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
University Club, Jacksonville, FL
Contact: 561-882-1331 or http://www.turnaround.org/
October 16-19, 2007
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Copley Place, Boston, Massachusetts
Contact: 312-578-6900; http://www.turnaround.org/
December 6-8, 2007
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Westin Mission Hills Resort, Rancho Mirage, California
Contact: 1-703-739-0800; http://www.abiworld.org/
December 19, 2007
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
TBA, South FL
Contact: 561-882-1331 or http://www.turnaround.org/
January 10, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
University Club, Jacksonville, FL
March 25-29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Ritz Carlton Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
April 3-6, 2008
AMERICAN BANKRUPTCY INSTITUTE
26th Annual Spring Meeting
The Renaissance, Washington, DC
Contact: http://www.abiworld.org/
June 4-7, 2008
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
24th Annual Bankruptcy & Restructuring Conference
JW Marriott Spa and Resort, Las Vegas, NV
Contact: http://www.airacira.org/
June 12-14, 2008
AMERICAN BANKRUPTCY INSTITUTE
15th Annual Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, MI
Contact: http://www.abiworld.org/
August 16-19, 2008
AMERICAN BANKRUPTCY INSTITUTE
13th Annual Southeast Bankruptcy Workshop
Ritz-Carlton, Amelia Island, FL
Contact: http://www.abiworld.org/
September 24-27, 2008
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Scottsdale, Arizona
Contact: http://www.ncbj.org/
October 28-31, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Copley Place, Boston, Massachusetts
Contact: 312-578-6900; http://www.turnaround.org/
December 4-6, 2008
AMERICAN BANKRUPTCY INSTITUTE
20th Annual Winter Leadership Conference
Westin La Paloma Resort & Spa
Tucson, AZ
Contact: http://www.abiworld.org/
October 5-9, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900; http://www.turnaround.org/
2009 (TBA)
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Las Vegas, Nevada
Contact: http://www.ncbj.org/
October 4-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
2010 (TBA)
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
New Orleans, Louisiana
Contact: http://www.ncbj.org/
BEARD AUDIO CONFERENCES
Coming Changes in Small Business Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Real Estate under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
High-Yield Opportunities in Distressed Investing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Fundamentals of Corporate Bankruptcy and Restructuring
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Reverse Mergers - the New IPO?
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Dana's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Employee Benefits and Executive Compensation
under the New Code
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Validating Distressed Security Portfolios: Year-End Price
Validation and Risk Assessment
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Changing Roles & Responsibilities of Creditors' Committees
Audio Conference Recording
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http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Calpine's Chapter 11 Filing
Audio Conference Recording
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BEARD AUDIO CONFERENCES
Healthcare Bankruptcy Reforms
Audio Conference Recording
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Changes to Cross-Border Insolvencies
Audio Conference Recording
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The Emerging Role of Corporate Compliance Panels
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Privacy Rights, Protections & Pitfalls in Bankruptcy
Audio Conference Recording
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High-Yield Opportunities in Distressed Investing
Audio Conference Recording
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BEARD AUDIO CONFERENCES
BAPCPA One Year On: Lessons Learned and Outlook
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240-629-3300
BEARD AUDIO CONFERENCES
Calpine's Chapter 11 Filing
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Changes to Cross-Border Insolvencies
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Changing Roles & Responsibilities of Creditors' Committees
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Clash of the Titans -- Bankruptcy vs. IP Rights
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240-629-3300
BEARD AUDIO CONFERENCES
Coming Changes in Small Business Bankruptcy
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240-629-3300
BEARD AUDIO CONFERENCES
Dana's Chapter 11 Filing
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Deepening Insolvency - Widening Controversy: Current Risks,
Latest Decisions
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Distressed Market Opportunities
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Distressed Real Estate under BAPCPA
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Employee Benefits and Executive Compensation under the New
Code
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Fundamentals of Corporate Bankruptcy and Restructuring
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Healthcare Bankruptcy Reforms
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
High-Yield Opportunities in Distressed Investing
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Homestead Exemptions under BAPCPA
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Privacy Rights, Protections & Pitfalls in Bankruptcy
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Reverse Mergers-the New IPO?
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Surviving the Digital Deluge: Best Practices in E-Discovery
and Records Management for Bankruptcy Practitioners and
Litigators
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
Validating Distressed Security Portfolios: Year-End Price
Validation and Risk Assessment
Contact: http://www.beardaudioconferences.com
240-629-3300
BEARD AUDIO CONFERENCES
When Tenants File -- A Landlord's BAPCPA Survival Guide
Contact: http://www.beardaudioconferences.com
240-629-3300
The Meetings, Conferences, and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.
*********
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, Ronald C. Sy, Jason A.
Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin, and Peter A.
Chapman, Editors.
Copyright 2006. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***