/raid1/www/Hosts/bankrupt/TCR_Public/061229.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, December 29, 2006, Vol. 10, No. 309
Headlines
ACA CLO: Moody's Rates $10.8 Million Class D Notes at Ba2
AMTROL INC: Organizational Meeting Scheduled for January 3
ARMSTRONG WORLD: PBGC Withdraws All Claims
ARMSTRONG WORLD: Wants Armando Bulacia's Claims Disallowed
ADELPHIA COMMS: Court Declines to Hear Noteholders' Payment Plea
BALLYROCK CLO: Moody's Rates $21 Million Class E Notes at Ba2
BRENTWOOD CLO: Moody's Rates $21 Mil. Class D Senior Notes at Ba2
CADMUS COMMUNICATIONS: Inks Merger Agreement with Cenveo Inc.
CADMUS COMMUNICATIONS: Buyout Prompts Moody's to Review Ratings
CADMUS COMMUNICATIONS: Buyout Prompts S&P's Negative CreditWatch
CALLIDUS DEBT: Moody's Rates $13 Million Class D Sr. Notes at Ba2
CATHOLIC CHURCH: Court Okays Portland's Insurance Pact Notice
CATHOLIC CHURCH: Tucson Tort Panel Gets $3.1 Million Distribution
CENT CDO: Moody's Rates $22.8 Million Class E Junior Notes at Ba2
CENVEO INC: Inks Merger Agreement with Cadmus Communications
CENVEO INC: Moody's to Review Ratings on Planned Cadmus Buy
CENVEO INC: Cadmus Buyout Prompts S&P's Negative CreditWatch
CETUS ABS: Moody's Rates $30 Million Class E Junior Notes at Ba2
COLUMBUSNOVA CLO: Moody's Rates $15 Million Class E Notes at Ba2
CROWN HOLDINGS: W. Voss Resigns as Asia-Pacific Division President
DAYTON SUPERIOR: Lower Debt Leverage Prompts S&P to Lift Ratings
DENNY'S CORP: Subsidiaries Ink New $350 Million Credit Agreement
DURA AUTO: Names David Harbert as Interim Chief Financial Officer
DURA AUTOMOTIVE: Wants to Pay $1.1 Million Prepetition Tax Claims
DURA AUTOMOTIVE: CEO Lawrence Denton Sells 15,000 Common Shares
ENTERGY NEW ORLEANS: Disclosure Statement Hearing Set on Jan. 25
ENTERGY NEW ORLEANS: Financial Projection Under Amended Plan
EXCO RESOURCES: $1.6 Bil. Property Buy Cues S&P's Negative Watch
FEDERAL-MOGUL: Voting Procedure Objection Deadline Set on Jan. 10
FEDERAL-MOGUL: Judge Fitzgerald Okays Ohio State Claims Settlement
FERRO CORP: Discloses Removal from NYSE's Later Filer List
FERRO CORPORATION: S&P Retains Negative Watch on Low-B Ratings
GLOBAL POWER: Bank of America Wants Escrow Funds Released
GLOBAL POWER: Equity Panel Hires Houlihan Lokey as Fin'l Advisor
GOLDEN NUGGET: S&P Upgrades Corporate Credit Rating to BB-
HARVARD PILGRIM: Moody's Lifts Rating on $149 Million Bonds
HOME PRODUCTS: Organizational Meeting Scheduled on January 3
INDUSTRIAL ENTERPRISES: Forms Venture with Chinese Chemical Trader
INTERSTATE BAKERIES: Posts $128.3 Million Net Loss in Fiscal 2006
IVI COMMUNICATIONS: Sept. 30 Balance Sheet Upside-Down by $803,069
J. CREW: Subsidiary Makes $50 Million Prepayment on Credit Pact
JACK IN THE BOX: Accepts for Purchase $142.5 Mil. of Common Stock
KATONAH IX: Moody's Rates $15 Million Class B-2L Notes at Ba2
KRISPY KREME: Expects $117 Million in Revenues for Third Quarter
KRISPY KREME: Files Delayed First Quarter Financial Results
LANDRY'S RESTAURANTS: S&P Holds Corporate Credit Rating at BB-
MCDERMOTT INTERNATIONAL: Completes $355 Mil. Settlement Payments
MOSAIC COMPANY: Refinancing Prompts S&P to Downgrade Ratings
MOST HOME: Posts $734,362 Net Loss in Quarter Ended Oct. 31, 2006
NEPTUNE INDUSTRIES: Sept. 30 Balance Sheet Upside-Down by $819,535
NEWCOMM WIRELESS: Hires Jeffries & Ironbark as Financial Advisors
NEW YORK WESTCHESTER: Organizational Meeting Set for January 3
NEW YORK WESTCHESTER: Taps Garfunkel Wild as Bankruptcy Counsel
PENINSULA GAMING: S&P Holds Rating on $22 Mil. Senior Notes at B
PLAYLOGIC ENT: September 30 Balance Sheet Upside-Down by $7.4 Mil.
PREFERREDPLUS TRUST: El Paso Action Prompts S&P's Positive Watch
REVLON INC: Subsidiary Refinances Bank Credit Agreement
SAINT VINCENTS: Can Proceed with Asset Purchase Pact Amendment
SAINT VINCENTS: Wants Rego Park Lease Extended
SONTRA MEDICAL: Ceases Operations Due to Insufficient Capital
SPECTRX INC: September 30 Balance Sheet Upside-Down by $10.2 Mil.
TAG ENTERTAINMENT: Posts $1.4 Million Loss in 2006 Third Quarter
TAUBMAN CENTERS: S&P Withdraws Low-B Ratings
THAXTON GROUP: Wants Lease Decision Period Extended to May 30
TRINSIC INC: Sept. 30 Balance Sheet Upside-Down by $15.3 Million
WOODWIND & THE BRASSWIND: Taps Fort Dearborn as Fin'l Advisors
* BOOK REVIEW: American Arbitration: Its History, Functions and
Achievements
*********
ACA CLO: Moody's Rates $10.8 Million Class D Notes at Ba2
---------------------------------------------------------
Moody's Investors Service assigned these ratings to Notes issued
by ACA CLO 2006-2, Limited:
-- Aaa to $225,100,000 Class A-1 Senior Secured Floating Rate
Notes Due 2021;
-- Aa2 to $18,500,000 Class A-2 Senior Secured Floating Rate
Notes Due 2021;
-- A2 to $18,800,000 Class B Deferrable Floating Rate Notes
Due 2021;
-- Baa2 to $10,000,000 Class C Deferrable Floating Rate Notes
Due 2021; and,
-- Ba2 to $10,800,000 Class D Deferrable Floating Rate Notes
Due 2021.
The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to noteholders, relative to the promise of receiving the
present value of such payments.
The ratings reflect the risks due to the diminishment of cash flow
from the underlying portfolio consisting mainly of Senior Secured
Loans due to defaults, the transaction's legal structure and the
characteristics of the underlying assets.
ACA Management, L.L.C. will manage the selection, acquisition and
disposition of collateral on behalf of the Issuer.
AMTROL INC: Organizational Meeting Scheduled for January 3
----------------------------------------------------------
The U.S. Trustee for Region 3 will hold an organizational meeting
to appoint an official committee of unsecured creditors in Amtrol
Inc. and its debtor-affiliates' chapter 11 cases at 10:00 a.m., on
Jan. 3, 2007, at the J. Caleb Boggs Federal Building, 844 North
King Street, Room 5209 in Wilmington, Delaware.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases. The
meeting is not the meeting of creditors pursuant to Section 341
of the Bankruptcy Code. However, a representative of the Debtors
will attend and provide background information regarding the
cases.
Creditors interested in serving on a Committee should complete
and return to the U.S. Trustee a statement indicating their
willingness to serve on an official committee.
Official creditors' committees, constituted under Section 1102 of
the Bankruptcy Code, ordinarily consist of the seven largest
creditors who are willing to serve on a committee. In some
Chapter 11 cases, the U.S. Trustee is persuaded to appoint
multiple creditors' committees.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and
financial affairs. Importantly, official committees serve as
fiduciaries to the general population of creditors they
represent. Those committees will also attempt to negotiate the
terms of a consensual Chapter 11 plan -- almost always subject to
the terms of strict confidentiality agreements with the Debtors
and other core parties-in-interest. If negotiations break down,
the Committee may ask the Bankruptcy Court to replace management
with an independent trustee. If the Committee concludes that the
reorganization of the Debtors is impossible, the Committee will
urge the Bankruptcy Court to convert the Chapter 11 cases to a
liquidation proceeding.
Headquartered in West Warwick, Rhode Island, Amtrol Inc. --
http://www.amtrol.com/-- manufactures and markets water storage
and pressure control products, water heaters and cylinders. The
company's major products include pressure tanks used in well
water, hydronic heating and potable hot water applications,
indirect-fired water heaters, and both LPG and disposable
refrigerant gas cylinders.
The company and three of its affiliates filed for chapter 11
protection on Dec. 18, 2006 (Bankr. D. Del. Lead Case No.
06-11446). Mark Daniel Olivere, Esq., Stuart J. Brown, Esq., and
William E. Chipman Jr., Esq., at Edwards Angell Palmer & Dodge
LLP, represent the Debtors. As of Apr. 1, 2006, the Debtors'
consolidated financial condition showed $229,270,000 in total
assets and $235,802,000 in total debts.
ARMSTRONG WORLD: PBGC Withdraws All Claims
------------------------------------------
Pension Benefit Guaranty Corporation notifies the United States
Bankruptcy for the District of Delaware that it withdrew all of
its bankruptcy claims against Armstrong World Industries, Inc. and
its debtor affiliates under Claim Nos. 2951 through 2959.
The Claims are contingent on the termination of the AWI Retirement
Plan, Pension Benefit Guarantee also tells the Court.
Pursuant to AWI's confirmed Plan of Reorganization, the
Reorganized AWI continues to sponsor and maintain the Pension
Plan.
Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc.
-- http://www.armstrong.com/-- the major operating subsidiary of
Armstrong Holdings, Inc., designs, manufactures and sells interior
floor coverings and ceiling systems, around the world. The
company and its affiliates filed for chapter 11 protection on
Dec. 6, 2000 (Bankr. D. Del. Case No. 00-04469).
StephenKarotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell
C.Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors in their restructuring efforts. The company and its
affiliates tapped the Feinberg Group for analysis, evaluation, and
treatment of personal injury asbestos claims.
Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and
O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and
Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, represent the Official Committee of Unsecured Creditors.
The Creditors Committee tapped Houlihan Lokey for financial and
investment advice. The Official Committee of Asbestos Personal
Injury Claimant hired Ashby & Geddes as counsel.
The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The
District Court Judge Robreno confirmed AWI's Modified Plan on
Aug. 14, 2006. The Clerk entered the formal written confirmation
order on Aug. 18, 2006. The company's "Fourth Amended Plan of
Reorganization, as Modified," has become effective and AWI has
emerged from Chapter 11.
* * *
As reported in the Troubled Company Reporter on Oct. 9, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Armstrong World Industries Inc. to 'BB' from 'D',
following the Company's emergence from bankruptcy on Oct. 2, 2006.
The outlook is stable.
ARMSTRONG WORLD: Wants Armando Bulacia's Claims Disallowed
----------------------------------------------------------
Armstrong World Industries, Inc., asks the Honorable Judith K.
Fitzgerald of the U.S. Bankruptcy Court for the District of
Delaware to disallow and expunge the $1,015,125 claims filed by
Armando T. Bulacia against the company.
The company also wants the 2006 Bulacia Claims disallowed to the
extent they assert claims for attorneys' fees and other costs. If
the Claims are not expunged, the Court should reclassify them as
general unsecured claims.
The Claim Nos. 4909 and 4928, each purports to amend Claim No.
3397, which relates to outstanding mobility payment of
Mr. Bulacia.
Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, tells the Court that AWI, sent Armando T.
Bulacia an employment letter in October 1997 outlining the terms
of his employment with AWI.
The Employment Letter provided, inter alia, for Mr. Bulacia's
$30,250 mobility payment due, in part, to his prospective move
from Argentina to the United States. Half of the Mobility Payment
will be paid at the end of Mr. Bulacia's assignment, assuming the
assignment lasted longer than 18 months.
Mr. Madron relates that Mr. Bulacia commenced his assignment in
April 1998, and voluntarily resigned from AWI in June 1999.
Mr. Madron notes that AWI did not remit the remaining $15,125
since the assignment did not last longer than 18 months. AWI
rehired Mr. Bulacia in August 1999.
In April 2000, AWI sent Mr. Bulacia another letter dated April
2000, advising that his eligibility to receive the Outstanding
Mobility Payment ceased to exist when he resigned from AWI.
However, AWI noted that Mr. Bulacia would be eligible to receive
the Outstanding Mobility Payment if he (i) remained on his then-
current assignment for a minimum of 18 months, and (ii)
subsequently returned either to his home country or accepted
another assignment as an AWI employee.
According to AWI's records, Mr. Bulacia completed the second
18-month portion of his assignment with AWI, but did not return to
his home country nor accept another AWI assignment.
In July 2002, Mr. Bulacia's employment with AWI was terminated due
to position elimination. In connection with the termination,
Mr. Bulacia executed a "Severance Payment Release and Covenant Not
to Sue," in which he agreed to relinquish all right or claim of
any kind that is related to his employment with AWI and its
termination of employment.
Mr. Madron recounts that in August 2001, Mr. Bulacia timely filed
a $15,125 general unsecured claim -- Claim No. 3397 -- against AWI
arising the Outstanding Mobility Payment.
In March 2003, AWI sought to disallow certain claims, but later
decided to withdraw its objection with respect to Claim No. 3397.
In October 2006, the Court classified Claim No. 3397 as a Class 11
claim under AWI's Plan of Reorganization, and allowed and remitted
the Claim in full for $15,125.
In September 2006, Mr. Bulacia filed Claim Nos. 4909 and 4928,
asserting an administrative expense against AWI for $1,015,125
plus interest. Both claims also seek payment of the Outstanding
Mobility Payment and an additional $1,000,000 compensatory damage
for breach of contract.
Mr. Madron complains that the 2006 Bulacia Claims do not provide
any reason or legal basis, or cite any provision in the Employment
Letter or any other agreement between Mr. Bulacia and AWI,
indicating why Mr. Bulacia is entitled to $1,000,000. The 2006
Bulacia Claims also do not explain why the Compensatory Damages
Claim, which arises out of the same prepetition obligations
referenced in Claim No. 3397, was not asserted at the time the
original claim was filed or why the 2006 Claims are entitled to
administrative expense priority, Mr. Madron asserts.
Furthermore, Mr. Madron contends that:
(a) the 2006 Bulacia Claims are duplicative;
(b) there is no rational relationship between the
Compensatory Damages Claim and the alleged breach; and
(c) it is not explained how Mr. Bulacia calculated the
Compensatory Damages Claim.
(d) Mr. Bulacia signed a release preventing him from
asserting claims against AWI relating to his employment.
Moreover, Mr. Madron maintains that the 2006 Bulacia Claims do not
satisfy the two-part test to qualify as administrative priority
expenses. The Claims did not arise from a postpetition
transaction with AWI, nor did it provide an actual benefit to the
estate that was necessary to preserve the value of the estate's
assets, Mr. Madron states.
Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc.
-- http://www.armstrong.com/-- the major operating subsidiary of
Armstrong Holdings, Inc., designs, manufactures and sells interior
floor coverings and ceiling systems, around the world. The
company and its affiliates filed for chapter 11 protection on
Dec. 6, 2000 (Bankr. D. Del. Case No. 00-04469).
StephenKarotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell
C.Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors in their restructuring efforts. The company and its
affiliates tapped the Feinberg Group for analysis, evaluation, and
treatment of personal injury asbestos claims.
Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and
O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and
Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, represent the Official Committee of Unsecured Creditors.
The Creditors Committee tapped Houlihan Lokey for financial and
investment advice. The Official Committee of Asbestos Personal
Injury Claimant hired Ashby & Geddes as counsel.
The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The
District Court Judge Robreno confirmed AWI's Modified Plan on
Aug. 14, 2006. The Clerk entered the formal written confirmation
order on Aug. 18, 2006. The company's "Fourth Amended Plan of
Reorganization, as Modified," has become effective and AWI has
emerged from Chapter 11.
* * *
As reported in the Troubled Company Reporter on Oct. 9, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Armstrong World Industries Inc. to 'BB' from 'D',
following the Company's emergence from bankruptcy on Oct. 2, 2006.
The outlook is stable.
ADELPHIA COMMS: Court Declines to Hear Noteholders' Payment Plea
----------------------------------------------------------------
The Honorable Robert E. Gerber of the United States Bankruptcy
Court for the Southern District of New York, for reasons stated in
open court, denied the ACC Senior Noteholders' request to schedule
as soon as possible their request to direct the Adelphia
Communications Corporation and its debtor-affiliates to
immediately pay in full the approximately $5,000,000,000 in
principal amount of senior secured debt currently outstanding, and
any accrued but unpaid interest, under the Prepetition Credit
Agreements.
The Court declines to set a hearing until it renders a decision
with respect to the confirmation of the ACOM Debtors' Plan of
Reorganization.
The ACC Senior Noteholders asked the Court to reconsider its
deferral of their Motion in light of the adjournment of the
hearing on the Disclosure Statement Supplement and to schedule a
hearing on their Motion as soon as possible.
Martin J. Bienenstock, Esq., at Weil, Gotshal & Manges LLP, in New
York, contends that en route toward solicitation and confirmation
of a plan of reorganization, Adelphia Communications Corporation
is spending more than $41,000,000 per month in unnecessary
postpetition interest on the Bank Debt.
The significant erosion of ACOM's estate requires the Court's
immediate action, Mr. Bienenstock contends.
Mr. Bienenstock noted that in excess of $1.5 billion has been paid
as adequate protection interest payments on certain secured bank
debt in the ACOM Debtors' Chapter 11 cases.
Mr. Bienenstock also told the Court that after the sale of
substantially all of the ACOM Debtors' assets, repayment of their
postpetition financing, and consummation of the Joint Venture Plan
of Reorganization for the Parnassos Debtors and Century-TCI
Debtors, the ACOM Debtors are holding in excess of $17.5 billion
in value, approximately $12.5 billion in cash.
The Senior Secured Debts are under the:
-- Olympus Co-Borrowing Facility,
-- Century Co-Borrowing Facility,
-- UCA/HHC Co-Borrowing Facility, and
-- FrontierVision Prepetition Credit Agreement.
The ACC Senior Noteholders are:
-- Aurelius Capital Management, LP;
-- Banc of America Securities, LLC;
-- Catalyst Investment Management Co., LLC;
-- Drawbridge Global Macro Advisors, LLC;
-- Drawbridge Special Opportunities Advisors, LLC;
-- Elliott Associates, LP;
-- Farallon Capital Management, LLC;
-- Noonday Asset Management, LP;
-- Perry Capital LLC; and
-- Viking Global Investors, LP.
Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television
company. Adelphia serves customers in 30 states and Puerto Rico,
and offers analog and digital video services, Internet access and
other advanced services over its broadband networks. The Company
and its more than 200 affiliates filed for Chapter 11 protection
in the Southern District of New York on June 25, 2002. Those
cases are jointly administered under case number 02-41729.
Willkie Farr & Gallagher represents the Debtors in their
restructuring efforts. PricewaterhouseCoopers serves as the
Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman,
LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the
Official Committee of Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the
Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC. The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through
06-10642). Their cases are jointly administered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.
(Adelphia Bankruptcy News, Issue No. 158; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
BALLYROCK CLO: Moody's Rates $21 Million Class E Notes at Ba2
-------------------------------------------------------------
Moody's Investors Service these ratings to Notes issued by
Ballyrock CLO 2006-2 Ltd.:
-- Aaa to $446,900,000 Class A Floating Rate Notes, Due 2020;
-- Aa2 to $25,000,000 Class B Floating Rate Notes, Due 2020;
-- A2 to $30,000,000 Class C Deferrable Floating Rate
Notes, Due 2020;
-- Baa2 to $33,600,000 Class D Deferrable Floating Rate Notes,
Due 2020; and,
-- Ba2 to $21,000,000 Class E Deferrable Floating Rate Notes,
Due 2020.
The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to Noteholders, relative to the promise of receiving the
present value of such payments.
The ratings reflect the risks due to the diminishment of cash flow
from the underlying portfolio consisting primarily of Senior
Secured Loans due to defaults, the transaction's legal structure
and the characteristics of the underlying assets.
Ballyrock Investment Advisors LLC will manage the selection,
acquisition and disposition of collateral on behalf of the Issuer.
BRENTWOOD CLO: Moody's Rates $21 Mil. Class D Senior Notes at Ba2
-----------------------------------------------------------------
Moody's Investors Service assigned these ratings to Notes issued
by Brentwood CLO, Ltd.:
-- Aaa to $388,700,000 Class A-1A Floating Rate Senior Secured
Extendable Notes Due 2022;
-- Aaa to $75,000,000 Class A-1B Delayed Drawdown Floating
Rate Senior Secured Extendable Notes Due 2022;
-- Aaa to $51,500,000 Class A-2 Floating Rate Senior Secured
Extendable Notes Due 2022;
-- A2 to $68,600,000 Class B Floating Rate Senior Secured
Deferrable Interest Extendable Notes Due 2022;
-- Baa2 to $23,800,000 Class C Floating Rate Senior Secured
Deferrable Interest Extendable Notes Due 2022; and,
-- Ba2 to $21,000,000 Class D Floating Rate Senior Secured
Deferrable Interest Extendable Notes Due 2022.
The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to noteholders, relative to the promise of receiving the
present value of such payments.
The ratings reflect the risks due to the diminishment of cash flow
from the underlying portfolio consisting primarily of Senior
Secured Loans and Middle Market Loans due to defaults, the
transaction's legal structure and the characteristics of the
underlying assets.
Highland Capital Management, L.P. will manage the selection,
acquisition and disposition of collateral on behalf of the Issuer.
CADMUS COMMUNICATIONS: Inks Merger Agreement with Cenveo Inc.
-------------------------------------------------------------
Cadmus Communications Corporation and Cenveo Inc. have entered
into a definitive merger agreement for Cenveo to acquire Cadmus in
an all-cash merger at a price of $24.75 per share. The total
value of the transaction, including Cenveo's assumption of Cadmus'
debt, is expected to be approximately $430 million at closing.
Cadmus' board of directors unanimously approved the merger
agreement and is unanimously recommending that Cadmus'
shareholders approve the transaction. The transaction, expected
to close during the first calendar quarter of 2007, requires the
approval of Cadmus' shareholders and regulatory approvals and the
satisfaction of certain other closing conditions contained in the
merger agreement.
Bruce V. Thomas, president and chief executive officer of Cadmus,
said, "Over our 22-year history, Cadmus has grown to become the
leading provider of publishing services to the scientific,
technical, and medical market, the fifth largest periodical
printer in North America, and a leading and global provider of
specialty packaging services. With this transaction, we will now
become part of the third largest graphic communications company in
North America. As part of this larger business, Cadmus will be
positioned to reach the next level of performance and market share
growth in the attractive niche markets we serve. We should now be
better able to meet the growing and full service needs of Cadmus'
customers and better able to use our scale to deliver increased
efficiencies and a wider service offering to our customers."
In connection with the merger, Clary Limited, Purico Limited,
Melham US Inc. and Bruce V. Thomas entered into a voting agreement
with Cenveo pursuant to which they have agreed to vote their
shares of Cadmus in favor of the merger.
Cadmus was advised by Deutsche Bank Securities Inc., which
rendered a fairness opinion to the Cadmus Board of Directors.
Willkie Farr & Gallagher LLP and Troutman Sanders LLP served as
legal advisors to Cadmus on the transaction.
About Cenveo Inc.
Based in Stamford, Connecticut, Cenveo, Inc. (NYSE: CVO) --
http://www.mail-well.com/-- provides print and visual
communications services in North America. It operates through two
segments: Envelopes, Forms, and Labels; and Commercial Printing.
About Cadmus
Based in Richmond, Virginia, Cadmus Communications Corporation
(NASDAQ/GM: CDMS) -- http://www.cadmus.com/-- provides end-to-
end, integrated graphic communications services to professional
publishers, not-for-profit societies and corporations. Cadmus is
the world's largest provider of content management and production
services to scientific, technical and medical journal publishers,
the fifth largest periodicals printer in North America, and a
leading provider of specialty packaging and promotional printing
services.
CADMUS COMMUNICATIONS: Buyout Prompts Moody's to Review Ratings
---------------------------------------------------------------
Moody's Investors Service placed the B1 corporate family rating of
Cenveo Corporation and the Ba3 corporate family rating of Cadmus
Communications Corporation on review for downgrade after Cenveo's
reported plan to acquire Cadmus.
Moody's also placed all security ratings of each company on review
for downgrade.
The review will focus on:
1) projected timing for the combined entity to generate
sustainable positive free cash flow;
2) the plans and capability of Cenveo to sustain Cadmus's core
base of scientific, technical and medical customers;
3) likely timing and amount of cash restructuring costs;
4) the timing and amount of synergy benefits to result from
both cost savings and incremental revenue; and,
5) the structure of the proposed financing.
Moody's does not anticipate a greater than one notch downgrade of
Cenveo's corporate family rating if the review concludes in a
downgrade. Assuming close of the transaction, Moody's would
likely withdraw the corporate family rating for Cadmus.
These are the rating actions:
* Cenveo Corporation
-- B1 Corporate Family Rating, Placed on Review for
Possible Downgrade;
-- Ba3 Senior Secured Bank Rating, Placed on Review for
Possible Downgrade;
-- B2 Senior Notes Rating, Placed on Review for Possible
Downgrade;
-- B3 Senior Subordinated Notes Rating, Placed on Review
for Possible Downgrade; and,
-- Outlook, Changed To Rating Under Review From Negative.
* Cadmus Communications Corporation
-- Ba3 Corporate Family Rating, Placed on Review for
Possible Downgrade;
-- B1 Senior Subordinated Notes Rating, Placed on Review
for Possible Downgrade; and,
-- Outlook, Changed To Rating Under Review From Stable
Headquartered in Stamford, Connecticut, Cenveo is a leading
provider of envelopes, offset and digital printing services, and
printed office products with annual revenue of approximately
$1.6 billion.
Headquartered in Richmond, Virginia, Cadmus Communications
Corporation provides end-to-end integrated graphic communications
and content processing services to professional publishers, not-
for-profit societies, and corporations. Its annual revenue is
approximately $450 million.
CADMUS COMMUNICATIONS: Buyout Prompts S&P's Negative CreditWatch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Cadmus
Communications Corp. on CreditWatch with negative implications,
including its 'BB-' corporate credit rating.
The CreditWatch listing comes after Cadmus's disclosure that it
has entered into a definitive agreement to be acquired by Cenveo
Inc. for $24.75 per common share in cash, or approximately
$430 million, including the assumption of about $190 million in
funded debt at Cadmus as of September 2006.
At the same time, ratings on Cenveo, including the 'B+' corporate
credit rating, were placed on CreditWatch with negative
implications.
Following the close of the acquisition, which is expected in the
first quarter of 2007, if Cadmus's $125 million subordinated notes
are refinanced, all ratings on Cadmus will be withdrawn.
Otherwise, the rating on the subordinated notes would be lowered
to Cenveo's subordinated debt rating level.
CALLIDUS DEBT: Moody's Rates $13 Million Class D Sr. Notes at Ba2
-----------------------------------------------------------------
Moody's Investors Service assigned these ratings to Notes and
Combination Securities issued by Callidus Debt Partners CLO Fund
V, Ltd.:
-- Aaa to $30,000,000 Class A-1A Revolving Senior Secured
Floating Rate Notes Due 2020;
-- Aaa to $270,000,000 Class A-1B Senior Secured Floating Rate
Notes Due 2020;
-- Aa2 to $23,000,000 Class A-2 Senior Secured Floating Rate
Notes Due 2020;
-- A2 to $21,000,000 Class B Senior Secured Deferrable
Floating Rate Notes Due 2020;
-- Baa2 to $20,600,000 Class C Senior Secured Deferrable
Floating Rate Notes Due 2020;
-- Ba2 to $13,000,000 Class D Senior Secured Deferrable
Floating Rate Notes Due 2020;
-- Baa3 to $10,000,000 Class Q-1 Securities Due 2020; and,
-- Baa3 to $3,000,000 Class Q-2 Securities Due 2020.
The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to Noteholders, relative to the promise of receiving the
present value of such payments.
Also based upon the transaction's legal structure and the
characteristics of the Collateral Debt Obligations. The rating
assigned to the Class Q-1 Securities addresses solely the ultimate
repayment of the Class Q-1 Rated Principal and the Class Q-1 Rated
Interest. The rating assigned to the Class Q-2 Securities
addresses solely the ultimate repayment of the Class Q-2 Rated
Principal.
The ratings reflect the risks due to the diminishment of cash flow
from the underlying portfolio consisting of Senior Secured Loans
and High Yield Bonds due to defaults, the transaction's legal
structure and the characteristics of the underlying assets.
Callidus Capital Management, LLC will manage the selection,
acquisition and disposition of collateral on behalf of the issuer.
CATHOLIC CHURCH: Court Okays Portland's Insurance Pact Notice
-------------------------------------------------------------
Teresa H. Pearson, Esq., at Miller Nash LLP, in Portland, Oregon,
relates that on Dec. 22, 2006, the Archdiocese of Portland in
Oregon will file eight motions to approve settlement agreements
and releases with its insurers, which will include the proposed
sale of insurance policies free and clear of liens, claims,
encumbrances, and other interests. Ms. Pearson asserts that the
Archdiocese wants to conserve resources by describing all of the
requests in one form of notice that will be both useful and
understandable.
Judge Elizabeth L. Perris of the U.S. Bankruptcy Court for the
District of Oregon approves the Archdiocese's proposed form of
publication notice regarding the insurance settlements and rules
that publication in the Oregonian will occur twice, with 5 to 10
days interval between each publication -- and at least one
publication will be in the Sunday Oregonian. In addition, the
last paragraph of the published notice will clarify that access
through http://www.orb.uscourts.govis via PACER, Judge Perris
says.
A full-text copy of the Archdiocese's proposed notice is available
for free at http://researcharchives.com/t/s?17b9
Portland intends to serve notice of the motions by mail on, among
others:
(a) all known claimants or counsel for claimants who have
filed a proof of claim in the Chapter 11 case, or who were
scheduled by the Archdiocese;
(b) all persons or entities who have filed notices of
appearance in the Chapter 11 case;
(c) all entities known or alleged by the Archdiocese to have
provided general liability insurance to the Archdiocese;
(d) counsel for the Tort Claimants Committee; and
(e) the Future Claims Representative.
The Archdiocese also proposes publishing the notice once in The
Oregonian to provide the information to all interested parties.
In relation to its proposed notice, the Archdiocese asks the
Court to relieve it from the obligation to comply with LBR 2002-
1.B.3 requiring the use of LBF 760.5.
Ms. Pearson notes that LBF 760.5 is designed to deal with
relatively straightforward sales of personal property or real
estate in consumer cases, and the form is ill-suited to provide
adequate notice of complex settlement agreements which include
proposed sales of insurance policies in a Chapter 11 case.
Ms. Pearson assures the Court that the Archdiocese will
incorporate as many of the features of LBF 760.5 as would make
sense under the settlements and transactions proposed, and will
otherwise generally follow the format and requirements of LBR
2002-1.B.1.b(1).
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers. David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case. In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities. (Catholic Church Bankruptcy News,
Issue No. 75; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: Tucson Tort Panel Gets $3.1 Million Distribution
-----------------------------------------------------------------
Judge James M. Marlar of the U.S. Bankruptcy Court for the
District of Arizona grants the request filed by the Official
Committee of Tort Claimants in the Chapter 11 case of the Diocese
of Tucson, and orders the Trustee to make an additional
distribution from the Settlement Trust an aggregate of $3,152,500
to each of the Claimants with Allowed Claims in:
Claimants Amount
--------- ------
Tier 1 $24,793
Tier 2 49,586
Tier 3 123,966
Tier 4 173,553
California Tier 86,776
Judge Marlar also authorized the Trustee to distribute $152,500
to the Diocese pursuant to the Sharing Agreement.
As reported in the Troubled Company Reporter on Dec. 12, 2006, the
parties have settled all remaining claims except one Tort Claim
and a relationship claim associated with it. The Tort Committee
believes that these two claims face significant proof problems and
do not anticipate a large settlement. The Trust's maximum
exposure for funding distributions for both claims is
approximately $735,000, Warren J. Stapleton, Esq., at Stinson
Morrison Hecker LLP, in Phoenix, Arizona, related.
Thus, since enough funds are available for the unresolved claims,
the Tort Committee believed that the proposed distribution will
not prejudice any Tort Claimant.
The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese. Tucson's Third Amended and Restated Plan of
Reorganization became effective on Sept. 20, 2005. (Catholic
Church Bankruptcy News, Issue No. 75; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CENT CDO: Moody's Rates $22.8 Million Class E Junior Notes at Ba2
-----------------------------------------------------------------
Moody's Investors Service assigned ratings to five classes of
notes issued by Cent CDO 12 Limited:
-- Aaa to the $459,600,000 Class A Floating Rate Senior Notes
Due 2020;
-- Aa2 to the $28,800,000 Class B Floating Rate Senior Notes
Due 2020;
-- A2 to the $32,400,000 Class C Deferrable Floating Rate
Mezzanine Notes Due 2020;
-- Baa2 to the $22,800,000 Class D Deferrable Floating Rate
Mezzanine Notes Due 2020; and,
-- Ba2 to the $22,800,000 Class E Deferrable Floating Rate
Junior Notes Due 2020.
Moody's ratings address the ultimate cash receipt of all required
interest and principal payments as provided by the governing
documents, and are based on the expected loss posed to the
noteholders relative to the promise of receiving the present value
of such payments. These ratings are based upon Moody's review of
the risk of diminishment of cash flow from the underlying assets
due to defaults, the safety of the transaction's legal structure,
and the characteristics of the underlying assets.
Moody's will publish timely notice of the ratings, including any
downgrade or watchlisting for possible downgrade, in accordance
with Moody's standard practice at the time.
RiverSource Investments, LLC will manage the selection,
acquisition and disposition of collateral on behalf of the issuer.
CENVEO INC: Inks Merger Agreement with Cadmus Communications
------------------------------------------------------------
Cadmus Communications Corporation and Cenveo Inc. have entered
into a definitive merger agreement for Cenveo to acquire Cadmus in
an all-cash merger at a price of $24.75 per share. The total
value of the transaction, including Cenveo's assumption of Cadmus'
debt, is expected to be approximately $430 million at closing.
Cadmus' board of directors unanimously approved the merger
agreement and is unanimously recommending that Cadmus'
shareholders approve the transaction. The transaction, expected
to close during the first calendar quarter of 2007, requires the
approval of Cadmus' shareholders and regulatory approvals and the
satisfaction of certain other closing conditions contained in the
merger agreement.
Bruce V. Thomas, president and chief executive officer of Cadmus,
said, "Over our 22-year history, Cadmus has grown to become the
leading provider of publishing services to the scientific,
technical, and medical market, the fifth largest periodical
printer in North America, and a leading and global provider of
specialty packaging services. With this transaction, we will now
become part of the third largest graphic communications company in
North America. As part of this larger business, Cadmus will be
positioned to reach the next level of performance and market share
growth in the attractive niche markets we serve. We should now be
better able to meet the growing and full service needs of Cadmus'
customers and better able to use our scale to deliver increased
efficiencies and a wider service offering to our customers."
In connection with the merger, Clary Limited, Purico Limited,
Melham US Inc. and Bruce V. Thomas entered into a voting agreement
with Cenveo pursuant to which they have agreed to vote their
shares of Cadmus in favor of the merger.
Cadmus was advised by Deutsche Bank Securities Inc., which
rendered a fairness opinion to the Cadmus Board of Directors.
Willkie Farr & Gallagher LLP and Troutman Sanders LLP served as
legal advisors to Cadmus on the transaction.
About Cadmus
Based in Richmond, Virginia, Cadmus Communications Corporation
(NASDAQ/GM: CDMS) -- http://www.cadmus.com/-- provides end-to-
end, integrated graphic communications services to professional
publishers, not-for-profit societies and corporations. Cadmus is
the world's largest provider of content management and production
services to scientific, technical and medical journal publishers,
the fifth largest periodicals printer in North America, and a
leading provider of specialty packaging and promotional printing
services.
About Cenveo Inc.
Based in Stamford, Connecticut, Cenveo, Inc. (NYSE: CVO) --
http://www.mail-well.com/-- provides print and visual
communications services in North America. It operates through two
segments: Envelopes, Forms, and Labels; and Commercial Printing.
CENVEO INC: Moody's to Review Ratings on Planned Cadmus Buy
-----------------------------------------------------------
Moody's Investors Service placed the B1 corporate family rating of
Cenveo Corporation and the Ba3 corporate family rating of Cadmus
Communications Corporation on review for downgrade after Cenveo's
reported plan to acquire Cadmus.
Moody's also placed all security ratings of each company on review
for downgrade.
The review will focus on:
1) projected timing for the combined entity to generate
sustainable positive free cash flow;
2) the plans and capability of Cenveo to sustain Cadmus's core
base of scientific, technical and medical customers;
3) likely timing and amount of cash restructuring costs;
4) the timing and amount of synergy benefits to result from
both cost savings and incremental revenue; and,
5) the structure of the proposed financing.
Moody's does not anticipate a greater than one notch downgrade of
Cenveo's corporate family rating if the review concludes in a
downgrade. Assuming close of the transaction, Moody's would
likely withdraw the corporate family rating for Cadmus.
These are the rating actions:
* Cenveo Corporation
-- B1 Corporate Family Rating, Placed on Review for
Possible Downgrade;
-- Ba3 Senior Secured Bank Rating, Placed on Review for
Possible Downgrade;
-- B2 Senior Notes Rating, Placed on Review for Possible
Downgrade;
-- B3 Senior Subordinated Notes Rating, Placed on Review
for Possible Downgrade; and,
-- Outlook, Changed To Rating Under Review From Negative.
* Cadmus Communications Corporation
-- Ba3 Corporate Family Rating, Placed on Review for
Possible Downgrade;
-- B1 Senior Subordinated Notes Rating, Placed on Review
for Possible Downgrade; and,
-- Outlook, Changed To Rating Under Review From Stable
Headquartered in Stamford, Connecticut, Cenveo is a leading
provider of envelopes, offset and digital printing services, and
printed office products with annual revenue of approximately
$1.6 billion.
Headquartered in Richmond, Virginia, Cadmus Communications
Corporation provides end-to-end integrated graphic communications
and content processing services to professional publishers, not-
for-profit societies, and corporations. Its annual revenue is
approximately $450 million.
CENVEO INC: Cadmus Buyout Prompts S&P's Negative CreditWatch
------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' corporate
credit and 'BB-' bank loan ratings on Cenveo Inc. on CreditWatch
with negative implications after the company's report that it has
signed a definitive agreement to purchase Cadmus Communications
Corporation for about $430 million, including the assumption of
about $190 million in funded debt.
At the same time, ratings on Cadmus, including the 'BB-' corporate
credit rating, were placed on CreditWatch with negative
implications.
The acquisition is expected to close in the first quarter of 2007,
and would add scientific and professional journal printing to
Cenveo's business mix, and would add to the company's position in
short run publications and packaging and printing services. The
addition of Cadmus would increase Cenveo's sales to about
$2 billion and its EBITDA to more than $200 million, including
expected synergies at Cadmus.
A significant increase in the company's existing credit facility
to fund the acquisition could result in the bank loan rating being
lowered to the level of Cenveo's corporate credit rating. Cenveo
has publicly articulated its goal of increasing its sales base to
$3 billion and its EBITDA base to more than $300 million through
acquisitions. In resolving its CreditWatch listing, S&P will
review the combined company's business and financial strategies,
with a particular focus on Cenveo's financial policy exceptions
regarding additional acquisitions over the intermediate term.
CETUS ABS: Moody's Rates $30 Million Class E Junior Notes at Ba2
----------------------------------------------------------------
Moody's Investors Service assigned these ratings to Notes issued
by Cetus ABS CDO 2006-4, Ltd.:
-- Aaa to $150,000,000 Class A-1 Floating Rate Senior Secured
Notes Due 2047;
-- Aa2 to $75,000,000 Class A-2 Floating Rate Senior Secured
Notes Due 2047;
-- A2 to $82,500,000 Class B Floating Rate Deferrable
Subordinate Secured Notes Due 2047;
-- Baa2 to $60,000,000 Class C Floating Rate Deferrable Junior
Subordinate Secured Notes Due 2047;
-- Ba1 to $22,500,000 Class D Floating Rate Deferrable Junior
Subordinate Secured Notes Due 2047; and,
-- Ba2 to $30,000,000 Class E Floating Rate Deferrable Junior
Subordinate Secured Notes Due 2047.
The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to Noteholders, relative to the promise of receiving the
present value of such payments.
GSCP, L.P. will manage the selection, acquisition and disposition
of collateral on behalf of the issuer.
COLUMBUSNOVA CLO: Moody's Rates $15 Million Class E Notes at Ba2
----------------------------------------------------------------
Moody's Investors Service assigned ratings to five classes of
notes issued by ColumbusNova CLO Ltd. 2006-II:
-- Aaa to the $375,000,000 Class A Senior Notes Due 2018;
-- Aa2 to the $30,000,000 Class B Senior Notes Due 2018;
-- A2 to the $22,000,000 Class C Deferrable Mezzanine Notes
Due 2018;
-- Baa2 to the $20,000,000 Class D Deferrable Mezzanine Notes
Due 2018; and
-- Ba2 to the $15,000,000 Class E Deferrable Junior Notes Due
2018.
Moody's ratings address the ultimate cash receipt of all required
interest and principal payments as provided by the governing
documents, and are based on the expected loss posed to the
noteholders relative to the promise of receiving the present value
of such payments. These ratings are based upon Moody's review of
the risk of diminishment of cash flow from the underlying assets
due to defaults, the safety of the transaction's legal structure,
and the characteristics of the underlying assets.
Moody's will publish timely notice of the ratings, including any
downgrade or watchlisting for possible downgrade, in accordance
with Moody's standard practice at the time.
Columbus Nova Credit Investments Management LLC will manage the
selection, acquisition and disposition of collateral on behalf of
the issuer.
CROWN HOLDINGS: W. Voss Resigns as Asia-Pacific Division President
------------------------------------------------------------------
Crown Holdings Inc. disclosed that William Voss has resigned,
effective immediately, from his position as president of the
company's Asia-Pacific Division.
Mr. Voss, who will continue serving as executive vice president of
the company, intends to retire effective July 2007.
Philadelphia, Pa.-based Crown Holdings Inc. (NYSE: CCK)
-- http://www.crowncork.com/-- through its affiliated companies,
supplies packaging products to consumer marketing companies around
the world.
At Sept. 30, 2006, Crown Holdings Inc.'s balance sheet showed a
$107 million shareholders' deficit compared to a $236 million
deficit at Dec. 31, 2005.
DAYTON SUPERIOR: Lower Debt Leverage Prompts S&P to Lift Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Dayton Superior Corp. to 'B-' from 'CCC+'.
At the same time, S&P affirmed the 'CCC+' rating on the company's
$165 million senior second-lien notes and assigned a recovery
rating of '3' to the notes, indicating that lenders can expect
meaningful recovery of principal in the event of a payment
default.
In addition, Standard & Poor's raised the rating on Dayton's
$170 million subordinated notes to 'CCC' from 'CCC-'.
All ratings were removed from CreditWatch, where they were placed
on Oct. 5, 2006, with positive implications in connection with the
company's planned IPO.
The outlook is stable.
"The corporate credit rating upgrade reflects our expectations for
lower debt leverage and greater cash flow due to Dayton's planned
use of its IPO proceeds of about $85 million for debt repayment,"
said Standard & Poor's credit analyst Lisa Tilis.
In addition, Standard & Poor's expects the company to generate
stronger earnings from continued commercial and infrastructure
spending in its regional markets.
The rating actions also reflect improved liquidity provided by
Dayton's amended $130 million revolving credit facility, an
increase of $35 million. The rating on the senior secured
second-lien notes is unchanged at 'CCC+', which is now one notch
below the corporate credit rating because recovery prospects for
these obligations are somewhat diminished because of the larger
first-lien revolving credit facility.
The ratings on Dayton, Ohio-based Dayton reflect the company's
continued high debt burden, cyclical end markets, volatile raw-
material costs, and very aggressive financial policies. Partly
offsetting these factors are the company's good geographic and
customer diversity, its flexible cost structure, and improving
commercial and infrastructure construction demand.
Gradually improving commercial construction activity and healthy
infrastructure spending should support stronger earnings and cash
flow.
However the company continues to face challenges in passing
through relatively high steel and freight costs to customers in a
competitive pricing environment, and high debt service costs and
fleet expansion plans continue to challenge cash flow.
Standard & Poor's could revise the outlook to negative if
liquidity narrows more than expected during the upcoming cash use
period or if commercial construction markets do not continue to
strengthen. Standard & Poor's could revise the outlook to
positive if the company can generate stronger free cash flow
and meaningfully reduce debt.
DENNY'S CORP: Subsidiaries Ink New $350 Million Credit Agreement
----------------------------------------------------------------
Denny's Corporation's operating subsidiaries, Denny's Inc. and
Denny's Realty, LLC, have entered into a new senior secured credit
agreement in an aggregate principal amount of $350 million.
The Company estimates that based on current interest rates, the
refinancing will save approximately $5.5 million per year in cash
interest.
The new credit facility consists of:
* a $50 million revolving credit facility (including a
$10 million revolving letter of credit facility),
* a $260 million term loan, and
* an additional $40 million synthetic letter of credit
facility.
The revolving facility matures in five years and the term loan and
synthetic letter of credit facility mature in five and a half
years.
Banc of America Securities LLC acted as sole lead arranger and
book manager for the new credit facility and Bank of America, N.A.
will serve as administrative agent.
The new credit facility has been used to refinance the company's
prior credit facility and will be available for working capital,
capital expenditures and other general corporate purposes. The
new facility is guaranteed by Denny's Corporation and its other
subsidiaries and is secured by substantially all of the assets of
the company and its subsidiaries.
In addition, the new facility is secured by first-priority
mortgages on 140 company-owned real estate assets. Interest on
loans under the new revolving facility will be payable, initially,
at per annum rates equal to LIBOR plus 250 basis points and
adjusting over time based upon Denny's leverage ratio. Interest
on the new term loan will be payable at per annum rates equal to
LIBOR plus 225 basis points.
Headquartered in Spartanburg, South Carolina, Denny's Corporation
(Nasdaq: DENN) -- http://www.dennys.com/-- is America's largest
full-service family restaurant chain, consisting of 543 company-
owned units and 1,035 franchised and licensed units, with
operations in the United States, Canada, Costa Rica, Guam, Mexico,
New Zealand and Puerto Rico.
At June 28, 2006, Denny's Corporation's balance sheet showed
$500.3 million in total assets and $758.2 million in total
liabilities, resulting in a $257.9 million stockholders' deficit.
DURA AUTO: Names David Harbert as Interim Chief Financial Officer
-----------------------------------------------------------------
DURA Automotive Systems Inc. appointed David L. Harbert as its
interim vice president and chief financial officer, effective
immediately, pending approval by the U.S. Bankruptcy Court for the
District of Delaware.
"I want to thank Keith for his many contributions to DURA and wish
him well on his future endeavors," said Larry Denton, chairman and
chief executive officer of DURA Automotive. "I
also welcome David to DURA and look forward to his contributions.
David's appointment will ensure an orderly transition until a new
CFO is named. His extensive leadership and financial expertise
will help position the company to emerge from bankruptcy as a
stronger, more competitive organization."
Mr. Harbert, 64, brings extensive turnaround and restructuring
experience as a CFO and will help guide the company through
its bankruptcy proceedings. Mr. Harbert succeeds Keith R.
Marchiando, who has served as DURA's CFO since March 2005.
Mr. Marchiando will remain with the company through February 2007,
in order to ensure a smooth transition.
Since 2004, Mr. Harbert has served as a partner with Tatum
FO Partners LLP, a professional services firm, with expertise
in assisting corporations through financial restructuring
activities. P rior to joining Tatum, Harbert served as chief
financial officer for three Citigroup Venture Capital Portfolio
Companies over a nine-year period. Those companies included
FastenTech, Paper-Pak Products and Delco Remy International.
He also served as chief financial officer of Applied Power,
Inc., and Tenneco Automotive.
About Dura Automotive
Rochester Hills, Mich.-based DURA Automotive Systems, Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies, structural
door modules and exterior trim systems for the global automotive
industry. The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries. DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.
The Debtors filed for chapter 11 petition on October 30, 2006
(Bankr. District of Delaware Case No. 06-11202). Richard M.
Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq.,
and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead
counsel for the Debtors' bankruptcy proceedings. Mark D. Collins,
Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of
Richards Layton & Finger, P.A. Attorneys are the Debtors'co-
counsel. Baker & McKenzie acts as the Debtors' special counsel.
Togut, Segal & Segal LLP is the Debtors' conflicts counsel.
Miller Buckfire & Co., LLC is the Debtors' investment banker.
Glass & Associates Inc., gives financial advice to the Debtor.
Kurtzman Carson Consultants LLC handles the notice, claims and
balloting for the Debtors and Brunswick Group LLC acts as their
Corporate Communications Consultants for the Debtors. As of July
2, 2006, the Debtor had $1,993,178,000 in total assets and
$1,730,758,000 in total liabilities.
DURA AUTOMOTIVE: Wants to Pay $1.1 Million Prepetition Tax Claims
-----------------------------------------------------------------
DURA Automotive Systems, Inc. and its debtor affiliates seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to pay, in their sole discretion, the undisputed
prepetition claims of certain governmental units in respect to
real and personal property taxes in an aggregate amount not to
exceed $1,100,000.
The Debtors further request that all their banks and other
financial institutions be authorized and directed, upon their
request, to receive, process, honor and pay any and all checks
drawn on their accounts to pay the Prepetition Property Tax
Claims.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A.,
in Wilmington, Delaware, relates that the Debtors own real and
personal property in at least 12 U.S. states and Canadian
provinces. Under applicable law, state, provincial, and local
governments in the jurisdictions where the properties are located
are granted the authority to levy taxes against the real and
personal property.
The Debtors typically pay taxes on their Owned Properties in the
ordinary course as the taxes are invoiced, which typically covers
taxes for the prior year, or quarter, depending on how the
applicable tax is assessed. Thus, as of the bankruptcy filing
date, the Debtors owed taxes that accrued with respect to the
Owned Properties for some portions of the 2006 calendar year.
Mr. DeFranceschi tells the Honorable Kevin J. Carey of the U.S.
Bankruptcy Court for the District of Delaware, that while the
Bankruptcy Code does not require the Debtors to pay the Property
Taxes at this time, nonpayment or late payment of certain
prepetition Property Taxes will, among others:
(i) likely subject the Debtors to above-market interest rates
and penalties in certain circumstances;
(ii) cause Taxing Authorities' county or municipal to suffer a
significant gross revenue cutback, in turn leading to
reduced funding of public schools, fire and police
departments, and other municipal services from which the
Debtors and their employees enjoy the benefits;
(iii) unnecessarily divert the Debtors' attention away from the
operations of their businesses and the reorganization
process in the event the Taxing Authorities would cause
the Debtors to be audited; and
(iv) result in the creation of statutory liens on the Owned
Properties, which creation and perfection does not violate
the automatic stay under Section 362 of the Bankruptcy
Code.
Rochester Hills, Mich.-based DURA Automotive Systems, Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies, structural
door modules and exterior trim systems for the global automotive
industry. The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries. DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.
The Debtors filed for chapter 11 petition on October 30, 2006
(Bankr. District of Delaware Case No. 06-11202). Richard M.
Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq.,
and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead
counsel for the Debtors' bankruptcy proceedings. Mark D. Collins,
Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of
Richards Layton & Finger, P.A. Attorneys are the Debtors'
co-counsel. Baker & McKenzie acts as the Debtors' special
counsel. Togut, Segal & Segal LLP is the Debtors' conflicts
counsel. Miller Buckfire & Co., LLC is the Debtors' investment
banker. Glass & Associates Inc., gives financial advice to the
Debtor. Kurtzman Carson Consultants LLC handles the notice,
claims and balloting for the Debtors and Brunswick Group LLC acts
as their Corporate Communications Consultants for the Debtors. As
of July 2, 2006, the Debtor had $1,993,178,000 in total assets and
$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DURA AUTOMOTIVE: CEO Lawrence Denton Sells 15,000 Common Shares
---------------------------------------------------------------
Dura Automotive Systems Inc.'s president and chief executive
officer, Lawrence A. Denton, informed the U.S. Securities and
Exchange Commission that on Nov. 21, 2006, he sold 15,000 shares
of Class A common stock of Dura in two transactions:
No. of Shares Price per Share
------------- ---------------
5,000 $0.35
10,000 $0.35
Mr. Denton hold 22,184.997 Dura shares after the transactions,
which holdings include the 699.997 shares acquired through the
company's Employee Stock Discount Purchase Plan through June 30,
2006.
Rochester Hills, Mich.-based DURA Automotive Systems, Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies, structural
door modules and exterior trim systems for the global automotive
industry. The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries. DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.
The Debtors filed for chapter 11 petition on October 30, 2006
(Bankr. District of Delaware Case No. 06-11202). Richard M.
Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq.,
and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead
counsel for the Debtors' bankruptcy proceedings. Mark D. Collins,
Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of
Richards Layton & Finger, P.A. Attorneys are the Debtors'
co-counsel. Baker & McKenzie acts as the Debtors' special
counsel. Togut, Segal & Segal LLP is the Debtors' conflicts
counsel. Miller Buckfire & Co., LLC is the Debtors' investment
banker. Glass & Associates Inc., gives financial advice to the
Debtor. Kurtzman Carson Consultants LLC handles the notice,
claims and balloting for the Debtors and Brunswick Group LLC acts
as their Corporate Communications Consultants for the Debtors. As
of July 2, 2006, the Debtor had $1,993,178,000 in total assets and
$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
ENTERGY NEW ORLEANS: Disclosure Statement Hearing Set on Jan. 25
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Louisiana
set a hearing at 10:00 a.m., on January 25, 2007, to consider
approval of either Entergy New Orleans, Inc.'s Disclosure
Statement explaining its Third Amended Plan of Reorganization or
the Official Committee of Unsecured Creditors' Disclosure
Statement explaining the Committee's plan.
The Court had granted the Committee's request to terminate the
Debtor's exclusive periods to file and solicit acceptances to its
proposed plan of reorganization and at a Dec. 7, 2006, hearing,
held that:
(1) all proposed plans of reorganization and accompanying
disclosure statements must be filed by December 19, 2006;
and
(2) Financial Guaranty Insurance Company may file a plan of
reorganization until Dec. 22, 2006, if ENOI does not
file its third amended plan and disclosure statement by
Dec. 19, 2006.
ENOI delivered to the Court its Third Amended Plan of
Reorganization Dec. 20, 2006. The Committee filed a competing
plan on the same day.
Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation. Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans. Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004. Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing. Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts. Carey L. Menasco, Esq.,
Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq.,
at Liskow & Lewis, APLC, represent the Official Committee of
Unsecured Creditors. When the Debtor filed for protection from
its creditors, it listed total assets of $703,197,000 and total
debts of $610,421,000. (Entergy New Orleans Bankruptcy News,
Issue No. 32; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
ENTERGY NEW ORLEANS: Financial Projection Under Amended Plan
------------------------------------------------------------
Entergy New Orleans Inc. delivered to the U.S. Bankruptcy Court
for the Eastern District of Louisiana a three-year financial
projection together with the Plan. ENOI anticipates that:
(1) Electric load will recover by end of 2009 to a level that
is 65% of the level forecasted to occur ENOI's pre-Katrina
financial plan. Using a 2006 starting point of 3,747,000-
megawatt hours sold, the level of recovery is consistent
with 3.6% compound annual growth from 2006 through 2009.
Gas load recovers to a level of 10,096,000 MDt. Using a
2006 starting point of 7.604 million MDt, the level of
recovery is consistent with a 9.9% compound annual growth
rate from 2006 through 2009.
(2) Storm restoration costs and gas system rebuild costs of
$50,000,000 and $78,000,000 will be incurred from 2007
through 2009. Gas rebuild costs are assumed to occur
at the rate of $40,000,000 per year from 2010 through
2018.
(3) Non-fuel operating and maintenance expense will increase
at a compound annual growth rate of 3.5% from 2006 through
2009, to reflect wage and other inflation.
(4) Insurance proceeds of $218,000,000 will be recovered in
2007, 2008, and 2009 in amounts of $54,000,000,
$9,000,000, and $155,000,000. The proceeds, which were
estimated giving consideration to the Entergy System's
total insurance coverage, the per event cap imposed by one
of its insurers, and the allocation of insurance recovery
among the participants in the Entergy System insurance
program pursuant to the Katrina Insurance Protocol,
represent recovery of 41% of the insured loss that ENOI
incurred.
(5) The $200,000,000 Community Development Block Grant Funds
will be received in 2007. ENOI will also make the
required $39,900,000 minimum pension funding contribution
of in 2007, with insignificant contributions in 2008 and
2009.
(6) Pursuant to the settlement of ENOI's 2006 Storm Cost
Recovery and Reserve Application approved by the City
Council, ENOI will commence in March 2007 collections from
electric and gas customers a total of $6,500,000 per year
for a 10-year period to build up a $75,000,000 storm
reserve fund pursuant to an order issued by the City
Council.
(7) The capital expenditure projections contained in the cash
flow projections are based upon ENOI's forecast of
expenditures for transmission, production and distribution
facilities and other miscellaneous items. ENOI believes
the capital expenditure projections are adequate to ensure
reliable service to its customers.
ENOI's Three-Year Financial Projections
2007 2008 2009
---- ---- ----
Projected Balance Sheets
ASSETS
CURRENT ASSETS
Cash and cash equivalents:
Cash $5,543,000 $12,325,000 110,508,000
Other Temporary Cash
Investments 117,035,000 31,156,000 74,535,000
----------- ----------- -----------
Total cash and cash
equivalents 122,578,000 43,482,000 185,043,000
Accounts receivable:
Customer A/R 51,628,000 51,610,000 50,938,000
Allowance for doubtful
accounts (10,781,000) (10,781,000) (10,781,000)
Associated companies
A/R 6,989,000 122,527,000 110,145,000
Other A/R 6,950,000 6,950,000 6,950,000
Accrued unbilled
revenues 24,125,000 25,110,000 25,667,000
----------- ----------- -----------
Total receivables 138,911,000 195,417,000 182,918,000
Deferred fuel costs 6,147,000 6,896,000 8,155,000
Fuel inventory - at
average cost (995,000) (2,134,000) (3,218,000)
Materials and supplies -
at average cost 7,185,000 7,125,000 6,983,000
Prepayments and Other 6,227,000 6,227,000 6,227,000
----------- ----------- -----------
TOTAL CURRENT ASSETS 280,054,000 257,013,000 386,109,000
OTHER PROPERTY AND INVESTMENTS
Investment in affiliates
- Total 3,259,000 3,259,000 3,259,000
Non-utility property -
at cost (less
accumulated
depreciation) 1,107,000 1,107,000 1,107,000
----------- ----------- -----------
TOTAL OTHER PROP &
INVESTMENTS 4,366,000 4,366,000 4,366,000
UTILITY PLANT
Electric Plant 720,664,000 783,978,000 780,047,000
Natural gas Plant 190,240,000 191,240,000 192,240,000
Construction work
in progress 2,542,000 (1,945,000) (1,945,000)
----------- ----------- -----------
TOTAL UTILITY PLANT 913,446,000 973,274,000 970,342,000
less - accumulated
depreciation and
amortization (446,944,000) (476,506,000) (507,649,000)
----------- ----------- -----------
UTILITY PLANT - NET 466,502,000 496,767,000 462,693,000
DEFERRED DEBITS AND
OTHER ASSETS
Regulatory assets:
Unamortized loss on
reacquired debt 3,616,000 3,365,000 2,912,000
Other regulatory
assets 40,877,000 40,903,000 36,603,000
Long-term receivables 1,022,000 1,022,000 1,022,000
Other Deferred Debits 21,345,000 20,806,000 21,071,000
----------- ----------- -----------
TOTAL DEFERRED DEBITS &
OTHER ASSETS 66,859,000 66,094,000 61,607,000
----------- ----------- -----------
TOTAL ASSETS $817,781,000 $824,241,000 $914,775,000
=========== =========== ===========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Currently maturing
long-term debt $30,000,000 $- $30,000,000
Notes payable:
Associated companies'
Notes Payable 76,380,000 76,380,000 76,380,000
Accounts payable:
Associated companies
A/P 31,991,000 32,378,000 32,778,000
Total Other Accounts
Payable 45,695,000 48,852,000 43,518,000
Customer deposits 14,415,000 14,752,000 15,089,000
Taxes Accrued 8,776,000 19,481,000 21,373,000
Current Accumulated
deferred income
taxes 3,619,000 3,619,000 3,619,000
Interest accrued 11,818,000 11,427,000 11,427,000
Dividends declared 241,000 241,000 241,000
Tax collections payable 2,299,000 2,299,000 2,299,000
Other Current
Liabilities 1,804,000 1,804,000 1,804,000
----------- ----------- -----------
TOTAL CURRENT
LIABILITIES 227,039,000 211,234,000 238,529,000
NON-CURRENT LIABILITIES
Accumulated deferred
income taxes LT 122,704,000 117,958,000 114,133,000
Accumulated deferred
investment tax
credits 2,807,000 2,469,000 2,151,000
SFAS 109 regulatory
liability - net 58,224,000 58,224,000 58,224,000
Decommissioning 2,576,000 2,576,000 2,576,000
Accumulated Provisions 8,138,000 7,933,000 7,933,000
Other Deferred Credits 11,947,000 20,708,000 120,980,000
Total Long-term debt 199,892,000 199,905,000 170,250,000
----------- ----------- -----------
TOTAL NON-CURRENT
LIABILITIES 406,288,000 409,774,000 476,248,000
SHAREHOLDERS' EQUITY
Preferred stock
without sinking fund 19,780,000 19,780,000 19,780,000
Common stock 33,744,000 33,744,000 33,744,000
Paid-in capital
(Capital stock
expenses and other) 36,294,000 36,294,000 36,294,000
Retained earnings 94,637,000 113,415,000 110,180,000
---------- ----------- -----------
TOTAL SHAREHOLDERS'
EQUITY 184,455,000 203,233,000 199,998,000
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $817,781,000 $824,241,000 $914,775,000
=========== =========== ============
Projected Income Statements
Operating Revenue
Domestic Electric:
Residential $121,243,000 $124,835,000 $122,933,000
Commercial 175,928,000 178,960,000 176,960,000
Industrial 43,699,000 43,870,000 43,401,000
Government 59,133,000 59,755,000 58,968,000
----------- ----------- -----------
Total Retail 400,003,000 407,420,000 402,261,000
Adjoining Utility
Systems 2,485,000 1,903,000 1,476,000
Affiliated Sales 186,572,000 191,634,000 155,219,000
----------- ----------- -----------
Total Wholesale 189,058,000 193,537,000 156,695,000
Total Miscellaneous 11,575,000 10,120,000 10,280,000
Domestic Electric 600,636,000 611,077,000 569,236,000
Natural Gas 134,711,000 142,008,000 128,262,000
----------- ----------- -----------
Total Operating Revenue 735,347,000 753,085,000 697,498,000
OPERATING EXPENSES
Operation and Maintenance:
Total Fuel, Fuel
related expenses, and
Gas Purchased for
Resale 292,714,000 295,170,000 235,673,000
Purchased Power 216,492,000 217,521,000 217,398,000
Other Operation and
Maintenance 106,735,000 109,341,000 109,794,000
Taxes Other than
Income Taxes 42,746,000 43,440,000 43,781,000
Depreciation and
amortization 35,432,000 36,320,000 37,900,000
Other Regulatory Charges
(Credits) 4,311,000 4,274,000 -
----------- ----------- -----------
TOTAL OPERATING
EXPENSES 698,430,000 706,066,000 644,546,000
OPERATING INCOME 36,917,000 47,019,000 52,952,000
OTHER INCOME
Allowance for equity
funds used during
construction 561,000 1,608,000 1,105,000
Interest and Dividend
Income 3,845,000 6,011,000 7,657,000
Miscellaneous - Net (1,564,000) (1,720,000) (6,579,000)
----------- ----------- -----------
Total 2,842,000 5,900,000 2,182,000
Interest and Other Charges
Interest on
Long-term Debt 19,357,000 17,815,000 17,643,000
Other Interest - Net 3,184,000 1,124,000 1,145,000
Allowance for borrowed
funds used during
construction (1,439,000) (1,192,000) (819,000)
----------- ----------- -----------
Total 21,102,000 17,747,000 17,968,000
NET INCOME BEFORE TAX 18,657,000 35,172,000 37,166,000
Income Tax Expense 9,248,000 15,429,000 16,937,000
----------- ----------- -----------
NET INCOME BEFORE
PREFERRED 9,409,000 19,743,000 20,230,000
Preferred dividend
requirements 618,000 965,000 965,000
----------- ----------- -----------
NET INCOME $8,791,000 $18,778,000 $19,265,000
=========== =========== ===========
Projected Cash Flow Statements
OPERATING ACTIVITIES
Net income before
preferred dividend
Requirements $9,409,000 $19,743,000 $20,230,000
Noncash items included
in net income:
Other regulatory
charges and (credits) 4,311,000 4,274,000 -
Depreciation,
amortization and
decommissioning 35,432,000 36,320,000 37,900,000
Deferred income taxes
and investment
tax credits 18,955,000 (5,083,000) (4,144,000)
Changes in working
capital:
Receivables (3,227,000) (1,215,000) 4,116,000
Fuel inventory 740,000 1,140,000 1,084,000
Accounts payable (82,885,000) 3,544,000 (4,934,000)
Taxes Accrued (9,347,000) 10,705,000 1,892,000
Interest Accrued (5,176,000) (391,000) 0
Deferred fuel 4,740,000 (749,000) (1,259,000)
Other working capital
accounts 478,000 397,000 478,000
Changes in regulatory
assets 128,733,000 (26,000) 4,300,000
Provision for estimated
losses and reserves (204,000) (205,000) -
Other cash from
Operations (18,260,000) 3,683,000 99,700,000
----------- ----------- -----------
Net cash flow provided/
(used) by operating
activities 83,697,000 72,137,000 159,365,000
INVESTING ACTIVITIES
Construction
expenditures (81,448,000) (75,497,000) (63,697,000)
Allowance for equity
funds used during
construction 561,000 1,608,000 1,105,000
Money Pool Internal
Funding (33,087,000) (55,291,000) 8,383,000
Other Investments 125,478,000 8,912,000 59,871,000
Net cash flow provided/ ----------- ----------- -----------
(used) by investing
activities 11,504,000 (120,268,000) 5,661,000
FINANCING ACTIVITIES
Retirement of:
Bank notes and
long-term debt - (30,000,000) -
Changes in short-term
borrowings, net (63,523,000) - -
Preferred stock
dividends paid (469,000) (965,000) (965,000)
Notes to/from parent/
associated companies 76,380 - -
Money Pool Borrowing (9,000) - -
Money Pool Pre Petition
Interest (Investing) (37,166,000) - -
Dividend paid to Parent - - (22,500,000)
----------- ----------- -----------
Net cash flow provided/
(used) by financing
activities (24,787,000) (30,965,000) (23,465,000)
Net increase (decrease)
in cash & cash
equivalents 70,414,000 (79,097,000) 141,561,000
Cash and cash
equivalents at
beginning of period 52,164,000 122,578,000 43,482,000
----------- ----------- -----------
Cash and cash
equivalents at end
of period $122,578,000 $43,482,000 $185,043,000
=========== =========== ===========
Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation. Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans. Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004. Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing. Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts. Carey L. Menasco, Esq.,
Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq.,
at Liskow & Lewis, APLC, represent the Official Committee of
Unsecured Creditors. When the Debtor filed for protection from
its creditors, it listed total assets of $703,197,000 and total
debts of $610,421,000. (Entergy New Orleans Bankruptcy News,
Issue No. 32; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
EXCO RESOURCES: $1.6 Bil. Property Buy Cues S&P's Negative Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' corporate credit
rating and 'B-' senior unsecured ratings on oil and gas
exploration and production company EXCO Resources Inc. on
CreditWatch with negative implications after the company's
reported $1.6 billion cash acquisition of certain oil and gas
properties in Jackson Parish, Louisiana, from Anadarko Petroleum
Corp.
"The negative CreditWatch listing reflects our concern over the
possible resulting high debt burden, which could weaken EXCO's
credit measures to a level inconsistent with expectations for the
current rating," said Standard & Poor's credit analyst Jeffrey
Morrison.
"In addition, we remain concerned about management's aggressive
growth strategy and its ability to execute a financing plan that
will reduce debt from pro forma levels, both of which will be key
factors in resolving the CreditWatch listing," Mr. Morrison
continued.
Standard & Poor's expects to resolve the CreditWatch listing
around the close of the transaction, after meeting with management
and reviewing its longer-term financing plan and credit profile.
FEDERAL-MOGUL: Voting Procedure Objection Deadline Set on Jan. 10
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has set
4:00 p.m. (E.T.) of Jan. 10, 2007, as the deadline for filing any
response or objections to Federal-Mogul Corporation and its
debtor-affiliates proposed solicitation procedures with respect to
their fourth amended plan.
If objections and responses are timely filed and properly served,
a hearing on the Proposed Solicitation Procedures will be held on
Feb. 2, 2007, at 9:00 a.m. (E.T.)
If no objection or response is filed, the Court may grant the
Debtors' request without further notice or hearing.
Debtors' Proposed Solicitation
Procedures Under the 4th Amended Plan
The debtors ask the Court to approve:
(a) the scope of re-solicitation of votes on the Fourth
Amended Joint Plan of Reorganization including the use of
votes on the Third Amended Plan in computing acceptance or
rejection of the Fourth Amended Plan in classes where the
treatment of claims has not been adversely changed from
that provided under the Third Amended Plan;
(b) procedures for the re-solicitation of votes from the
holders of certain claims whose treatment under the Fourth
Amended Plan has been or may have been materially changed
from that under the Third Amended Plan;
(c) procedures for the solicitation of votes by holders of
Pneumo Asbestos Claims on the Plan that implements the
Plan A Settlement relating to the Pneumo Asbestos Claims;
and
(d) the supplemental notice program intended to provide
creditors, interest holders and other parties-in-interest
with notice of the Fourth Amended Plan and of the hearing
to be set by the Court to consider confirmation of the
Fourth Amended Plan.
According to Scotta E. McFarland, Esq., at Pachulski Stang Ziehl
Young Jones & Weintraub LLP, in Wilmington, Delaware, the Fourth
Amended Plan does not change the treatment for:
(1) Class B Bank Claims;
(2) Class D Noteholder Claims;
(3) Class F Convertible Subordinated Debenture Claims;
(4) Class H Unsecured Claims against the U.S. Debtors;
(5) Class M Preferred Stock Interests;
(6) Class N Subordinated Securities Claims;
(7) Class O Common Stock Interests in or against Federal-
Mogul; and
(8) Miscellaneous Classes, including Priority Claims, On-Site
Environmental Claims, Employee Benefit Claims against
U.S. Debtors, and Affiliate Claims against the U.S.
Debtors.
The Fourth Amended Plan proposes to change the treatment to be
afforded to holders of Claims against the U.K Debtors and the
Class C Surety Claims as a result of certain settlement
agreements, Ms. McFarland notes. Claim holders under those two
Classes have committed to vote in favor of, and not to object to,
the Fourth Amended Plan. As a result, the Debtors do not propose
to re-solicit votes on the Plan from those claim holders.
Additionally, Surety Claims will receive the same treatment as
Bank Claims under the Fourth Amended Plan, and will be allowed for
a fixed $28,000,000.
Ms. McFarland says the treatment of holders of the Asbestos
Personal Injury Claims and Asbestos Property Damage Claims may
materially change under the Fourth Amended Plan. Thus, the
Debtors want to re-solicit the votes of holders of Asbestos
Claims.
The Debtors also propose to re-solicit votes from holders of
Pneumo Asbestos Claims on the Plan that implements the Plan A
Settlement. Pneumo Asbestos Claims should be channeled so that
any recovery on account of those Claims will come solely from the
Pneumo Abex Subfund to be established as part of the Asbestos
Personal Injury Trust.
If the Plan A Settlement is accepted by at least 75% of the
holders of Pneumo Asbestos Claims, Ms. McFarland says the Plan A
Settlement will be deemed accepted by the holders as part of the
Plan. The Pneumo Asbestos Claims will be separately classed into
Class 5J-1 under the Plan for purposes of voting and treatment.
If the Plan A Settlement will not be accepted then the Plan B
Settlement will take into effect.
The Debtors propose these voting and solicitation procedures:
1. If a holder of Asbestos Personal Injury Claims and Asbestos
Property Damage Claims does not cast a vote to accept or
reject the Plan by the voting deadline, any prior vote it
may have cast under the Third Amended Plan will be counted
as it was originally cast pursuant to Section 1127(d) of
the Bankruptcy Code;
2. The key features with respect to the solicitation and
tabulation procedures for Asbestos Personal Injury Claims
and Pneumo Asbestos Claims are:
a. The Debtors will provide Solicitation Packages to
attorneys for holders of Asbestos Personal Injury Claims
and Pneumo Asbestos Claims;
b. Attorneys may vote on the Plan on the Plan on behalf of
their clients provided that they certify under penalty
of perjury that they have the necessary authority to
vote. If the attorney is unable to certify, he or she
must promptly advise the Voting Agent so that the
individual claimant's vote may be solicited directly;
c. The Voting Agent will mail a Solicitation Package
directly to a claimant (i) if his or her attorney timely
advises the Voting Agent of the names and addresses of
the claimant, (ii) at his or her request, or (iii) if
proof of an Asbestos Personal Injury Claim has been
signed and filed by the claimant; and
d. The Debtors will not send a separate Solicitation
Package to each claimant in care of his or her counsel
of record absent a request from that counsel to do so;
3. The Debtors will provide ballots to the appointed CVA
supervisors of holders of U.K. and Australian Asbestos
Personal Injury Claims as well as other Asbestos Claims
treated under the CVA. The CVA Supervisors will cast the
votes with respect to those claims;
4. Asbestos Personal Injury Claims and Pneumo Asbestos Claims
will be allowed for voting purposes;
5. Votes received from holders of Asbestos Personal Injury
Claims and Pneumo Asbestos Claims will not be counted by
the Voting Agent unless the ballot is certified under
penalty of perjury that the holder of the claim has (i)
exposure to asbestos with respect to the relevant Federal-
Mogul entity, and (ii) a disease conforming to a certain
disease level described on the ballot, based on medical
records or similar documentation; and
6. Each holder of an Indirect Asbestos Personal Injury Claim
will receive a single vote on the Plan in the liquidated
amount of their claim or, if the Claim is wholly
unliquidated, $1, while holders of Indirect Pneumo Asbestos
Claims will have their voting amounts calculated in a
similar manner for purposes of voting on the Plan A
Settlement.
The Debtors have fashioned forms of ballots and master ballots to
be used in connection with the solicitation process for Asbestos
Personal Injury Claims and Pneumo Asbestos Claims, and soliciting
acceptances of the Plan A Settlement from holders of the Pneumo
Asbestos Claims.
A ballot will not be counted in the event that the ballot is (i)
returned unsigned; (ii) illegible or contains insufficient
information to identify the claimant; (iii) transmitted by
facsimile or other electronic means; (iv) submitted using the
inappropriate form; or (v) incomplete.
A creditor may not split the liquidated portion of his, her or its
vote into votes partially to accept and partially to reject the
Plan. The Voting Agent will not be obligated to contact voters to
cure any defects in their ballots. Any claim holder who delivers
a valid ballot may withdraw his vote through a written notice of
withdrawal. In case of multiple votes for the same claim, the
latest dated ballot will be counted.
An asbestos claimant who wish to have his or her claim allowed for
purposes of voting on the Plan in an amount other than the
liquidated amount must file with the Court a request to
temporarily allow that claim for voting purposes at an amount he
or she specifies.
The Debtors propose that the Supplemental Voting Deadline will be
on a date not later than 45 days from the date on which the
Solicitation Packages are mailed.
To allow the possibility that the Plan A Settlement will not
ultimately be implemented as part of the Fourth Amended Plan, and
hence, the Plan B Settlement may be implemented, the Debtors
agreed that Cooper Industries, Inc., and Pneumo Abex Corporation
will also be permitted to vote on the Plan with respect to their
claims.
Cooper will be permitted to vote on account of its claims in a
separate class -- Class Q -- at each of five of the Debtors
against which Cooper has filed proofs of claim. Pneumo Abex will
be able to vote its claim in Class Q solely against Federal-Mogul
Products, Inc. F-M Products is the only Debtor against which
Pneumo Abex has filed a proof of claim.
Hence, the Debtors seek the Court's permission to provide Cooper
and Pneumo Abex with appropriate ballots and an opportunity to
vote on their claims in Class Q.
The Solicitation Package will include:
(1) notice of the Confirmation Hearing and the time fixed for
submitting votes on and objections to the Plan;
(2) the Supplemental Disclosure Statement;
(3) the Fourth Amended Plan;
(4) an appropriate ballot or master ballot to be used for:
* voting or re-voting on the Plan by holders of Asbestos
Personal Injury Claims and Asbestos Property Damage
Claims; and
* voting to accept the Plan A Settlement by holders of
Pneumo Asbestos Claims; and
(5) any other material that the Court directs to include.
The Debtors will publish notices of the Fourth Amended Plan, the
Plan A Settlement and the rescheduled Confirmation Hearing once
each in the (i) The Wall Street Journal (National Edition), (ii)
The New York Times, (iii) USA Today, and (iv) The Detroit Free
Press at least 20 days prior to the Supplemental Voting Deadline.
The Debtors will also continue to make significant materials
relating to the Plan and the solicitation process available on the
Internet at http://www.fmoplan.com/
The Debtors further ask the Court to approve that the service of
the notice of the Fourth Amended Plan on the CVA Supervisors, as
agents of holders of claims that are addressed by the CVAs,
constitutes good and proper service of the Fourth Amended Plan on
the holders of those Claims.
Equity Panel May Object to Voting Procedures
The Official Committee of Equity Holders reserves its right to
object to the scope of the proposed re-solicitation of votes to
accept or reject the Fourth Amended Plan. The Equity Committee
believes that the Debtors' Supplemental Disclosure Statement is
inadequate.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is an automotive parts company
with worldwide revenue of some $6 billion. The Company filed for
chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No.
01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and
Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura
Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones &
Weintraub, P.C., represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $10.15 billion in assets and $8.86 billion
in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner &
Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq.,
at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq.,
Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard
Firm represent the Official Committee of Unsecured Creditors.
(Federal-Mogul Bankruptcy News, Issue No. 119; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
FEDERAL-MOGUL: Judge Fitzgerald Okays Ohio State Claims Settlement
------------------------------------------------------------------
The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court
for the District of Delaware approved Federal-Mogul Corporation
and its debtor affiliates settlement with the state of Ohio.
Ohio will be deemed to have an Allowed Unsecured Claim against the
U.S. Debtors. Ohio's claims related to the Caldwell Site will be
withdrawn with prejudice. Certain environmental sites will either
be given a treatment as (i) Additional Site, or (ii) Debtor-Owned
Site.
The Order will not operate to, or have the effect of, impairing
certain insurers' legal, equitable or contractual rights in any
respect. The rights of insurers will be determined under any
applicable insurance policies or applicable insurance settlement
agreements.
As reported in the Troubled Company Reporter on Sept. 29, 2006,
the Debtors asked the Court to approve a settlement agreement with
the state of Ohio, resolving the Claims related to environmental
sites that certain U.S. Debtors either currently own, previously
owned, or sites to which they may have sent industrial waste
containing hazardous substances, to address the U.S. Debtors'
actual and potential environmental liabilities to Ohio.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is an automotive parts company
with worldwide revenue of some $6 billion. The Company filed for
chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No.
01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and
Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura
Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones &
Weintraub, P.C., represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $10.15 billion in assets and $8.86 billion
in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner &
Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq.,
at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq.,
Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard
Firm represent the Official Committee of Unsecured Creditors.
(Federal-Mogul Bankruptcy News, Issue No. 119; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
FERRO CORP: Discloses Removal from NYSE's Later Filer List
----------------------------------------------------------
Ferro Corporation has received notice from the New York Stock
Exchange acknowledging Ferro's current filing status for its SEC
reporting. Accordingly, Ferro has been removed from the late
filers' list maintained by the Exchange, and the late filer
indicator has been removed from the Exchange's profile, data and
news descriptions related to the Company.
Ferro Corporation (NYSE: FOE) -- http://www.ferro.com/-- is a
global supplier of technology-based performance materials for
manufacturers. Ferro materials enhance the performance of
products in a variety of end markets, including electronics,
telecommunications, pharmaceuticals, building and renovation,
appliances, automotive, household furnishings, and industrial
products. Headquartered in Cleveland, Ohio, the Company has
approximately 6,800 employees globally and reported 2005 sales of
$1.9 billion.
FERRO CORPORATION: S&P Retains Negative Watch on Low-B Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services reported that its 'B+' long-
term corporate credit and 'B' senior unsecured debt ratings on
Ferro Corp. remain on CreditWatch with negative implications,
where they were placed Nov. 18, 2005.
"The CreditWatch will be resolved after we review with management
the business prospects for each of its major product lines and
earnings and cash flow forecasts," said Standard & Poor's credit
analyst Wesley Chinn.
"This discussion is expected to occur within the next two months,
with our assessment of Ferro's credit quality also taking into
consideration the significant asset restructurings under way,
management's continuing pursuit of portfolio actions that are
focused on the company's core strengths, and clarity on
prospective use of debt leverage."
Importantly, Ferro is now current on its financial filings, delays
of which were caused by the lengthy accounting investigation and
restatement process. The return to a normal reporting schedule
addresses previous limited transparency on business conditions and
operating performance.
The ratings on Ferro reflect its aggressive debt leverage,
cyclicality of its markets, vulnerability to raw material costs,
lackluster operating margins and return on capital, and
ineffectiveness of the design and operation of disclosure controls
and procedures.
These negatives are partially offset by a significant initiative
to improve the cost structure, recent higher earnings, and likely
debt reduction from eventual asset sales.
Standard & Poor's expects that deficiencies in the company's
internal controls regarding financial reporting or other
accounting areas are being addressed and will not hamper Ferro's
ability to strengthen profitability and its financial condition.
GLOBAL POWER: Bank of America Wants Escrow Funds Released
---------------------------------------------------------
Bank of America, N.A., asks the U.S. Bankruptcy Court for the
District of Delaware for authority to release and distribute the
escrow funds in the Williams Escrow to William Industrial Services
Group, LLC.
Escrow Agreement
BoA informs the Court that prior to Global Power Equipment Group
Inc. and its debtor-affiliates' bankruptcy filing, Global Power
entered into a purchase agreement with WISG.
Pursuant to the purchase agreement, Global Power, WISG and BoA, as
escrow agent, entered into an escrow agreement, dated as of
Apr. 11, 2005, in which $7 million was placed in escrow with BoA
to cover potential purchase price adjustments and Global Power's
potential indemnity claims under the purchase agreement.
Under the Escrow Agreement, WISG and Global Power had an 18-month
period to make demands against the Williams Escrow. The Agreement
provides that upon the expiration date and in the absence of any
purchase price adjustment or indemnity claims by Global Power, the
remaining funds in the William Escrow are to be release to WISG,
according to BoA.
BoA says that the agreement would have expired in Oct. 10, 2006,
if Global Power did not file for bankruptcy. However, BoA
concludes that the expiration date was extended to Nov. 27, 2006,
by virtue of the Global Power's commencement of its chapter 11
case.
Escrow Funds Distribution
On Oct. 19, 2006, WISG, unaware of the Debtor's bankruptcy filing,
demanded upon BoA for the release of the escrow funds. The demand
was honored. However, after it recognized the Debtor's chapter 11
case and the unintended distribution of the funds by BoA, WISG
promptly returned the escrow funds to BoA.
WISG has renewed its demand for the escrow funds distribution.
BoA asserts that Global Power no longer has any interest in the
Williams Escrow, and the funds don't constitute property of the
Debtor's estate after its filing for bankruptcy.
BoA adds that nothing in the Bankruptcy Code should now stop it
from releasing the Williams Escrow funds consistent with the
Escrow Agreement. BoA made the request before the Court in an
abundance of caution.
About Global Power
Headquartered in Tulsa, Oklahoma, Global Power Equipment Group
Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides
power generation equipment and maintenance services for its
customers in the domestic and international energy, power and
infrastructure and service industries. The Company designs,
engineers and manufactures a range of heat recovery and auxiliary
equipment primarily used to enhance the efficiency and facilitate
the operation of gas turbine power plants as well as for other
industrial and power-related applications. The Company has
facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn,
Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai,
China; Nanjing, China; and Heerleen, The Netherlands.
The Company and 10 of its affiliates filed for chapter 11
protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045).
Attorneys at White & Case LLP and The Bayard Firm, P.A., represent
the Debtors. The Official Committee of Unsecured Creditors
appointed in the Debtors' cases has selected Landis Rath & Cobb
LLP as its counsel. As of Sept. 30, 2005, the Debtors reported
total assets of $381,131,000 and total debts of $123,221,000. The
Debtors' exclusive period to filed a chapter 11 plan expires on
Jan. 26, 2007.
GLOBAL POWER: Equity Panel Hires Houlihan Lokey as Fin'l Advisor
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized,
on an interim basis, the Official Committee of Equity Security
Holders appointed in the Chapter 11 cases of Global Power
Equipment Group Inc. and its debtor-affiliates, to retain Houlihan
Lokey Howard & Zukin Capital, Inc. as its financial advisor, nunc
pro tunc Nov. 9, 2006.
Houlihan Lokey is expected to:
a. perform due diligence on the Debtors' businesses, as well as
their prospects and the markets in which they compete;
b. evaluate the assets and liabilities of the Debtors;
c. analyze and review the financial and operating statements of
the Debtors;
d. analyze the business operations, business plans and
forecasts of the Debtors;
e. evaluate all aspects of the Debtors' DIP financing; cash
collateral usage and adequate protection therefor; any exit
financing in connection with any chapter 11 plan of
reorganization and any budgets relating thereto; and any
employee retention programs or similar proposed compensation
plan or program;
f. assist the Equity Committee, as needed, in identifying
potential alternative sources of liquidity in connection
with any chapter 11 plan or otherwise;
g. provide specific valuation and other financial analyses as
the Equity Committee may require in connection with the
Cases;
h. represent the Equity Committee in negotiations with the
Debtors, the official committee of unsecured creditors of
the Debtors and third parties with respect to any of the
foregoing;
i. provide testimony in court on behalf of the Equity
Committee, if necessary;
j. assess the financial issues and options concerning:
* the sale of any assets of the Debtors and/or their non-
debtor affiliates, either in whole or in part, and
* the Debtors' chapter11 plan(s) or any other chapter 11
plan(s); and
k. provide other customary services as may reasonably be
requested by the Equity Committee.
Joel L. Klein, Chair of the Committee, discloses that Houlihan
Lokey will be paid post-petition under the terms of the Engagement
Agreement:
a. $100,000 per month in cash from the Effective Date through
termination of the Engagement Agreement. The first Monthly
Fees will be paid on the first date permitted by the Court,
and then, subject to the orders governing payment of interim
compensation of retained professionals in these Cases, on
each monthly anniversary of the Effective Date; plus
b. a transaction fee payable upon the consummation of each
"Transaction" equal to 2% of the first $23,500,000 of the
"Aggregate Equity Holder Recoveries", 3% of the next
$14,100,000 of Aggregate Equity Holder Recoveries and 4% of
Aggregate Equity Holder Recoveries in excess of $37,600,000.
c. Houlihan Lokey's monthly fees and transaction fees will be
payable in cash, provided however that Houlihan Lokey's
total cash compensation will be capped at $3,000,000. Any
amount due to and payable to Houlihan Lokey in excess of
$3,000,000 will be payable "In Kind" (i.e., in the same
manner and currency/form as and when received by equity
holders).
Houlihan Lokey would also seek reimbursement for reasonable out-of
pocket expenses incurred.
Mr. Klein assures the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not hold nor represent any interest
adverse to the Debtors' estates.
Headquartered in Tulsa, Oklahoma, Global Power Equipment Group
Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides
power generation equipment and maintenance services for its
customers in the domestic and international energy, power and
infrastructure and service industries. The Company designs,
engineers and manufactures a range of heat recovery and auxiliary
equipment primarily used to enhance the efficiency and facilitate
the operation of gas turbine power plants as well as for other
industrial and power-related applications. The Company has
facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn,
Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai,
China; Nanjing, China; and Heerleen, The Netherlands.
The Company and 10 of its affiliates filed for chapter 11
protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045).
Attorneys at White & Case LLP and The Bayard Firm, P.A., represent
the Debtors. The Official Committee of Unsecured Creditors
appointed in the Debtors' cases has selected Landis Rath & Cobb
LLP as its counsel. As of Sept. 30, 2005, the Debtors reported
total assets of $381,131,000 and total debts of $123,221,000. The
Debtors' exclusive period to filed a chapter 11 plan expires on
Jan. 26, 2007.
GOLDEN NUGGET: S&P Upgrades Corporate Credit Rating to BB-
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed the 'BB-' corporate
credit rating for Landry's Restaurants Inc. and raised the
corporate credit rating for Golden Nugget Inc. to 'BB-' from
'B+'.
The outlook is negative.
"The action on Landry's reflects the company's improved credit
metrics following its use of proceeds from the sale of Joe's Crab
Shack to reduce debt, improved profitability at Golden Nugget, and
our expectations that credit metrics should gradually improve over
time," said Standard & Poor's credit analyst Stella Kapur.
"The corporate credit rating on Golden Nugget was raised following
our decision to equalize the ratings of Landry's Restaurants and
its wholly owned subsidiary, Golden Nugget. While Golden Nugget
is an unrestricted subsidiary, we believe the current and expected
future support this entity receives from its parent is more
meaningful than we had originally anticipated."
At the same time the ratings on Landry's Restaurant's and Golden
Nugget's credit facilities and notes were revised to incorporate
the company's updated pro forma capital structure and enterprise
valuations.
All ratings were removed from their respective CreditWatch
listings.
While credit metrics improved after the use of sale proceeds to
pay down debt, credit metrics still remain weak for current
ratings levels. Pro forma consolidated, lease-adjusted debt to
EBITDA is in the low-5x area and pro forma interest coverage is in
the high-2x area.
HARVARD PILGRIM: Moody's Lifts Rating on $149 Million Bonds
-----------------------------------------------------------
Moody's Investors Service upgraded to Baa3 from Ba1 the underlying
rating assigned to Harvard Pilgrim Health Care's outstanding
$149 million of Series 1998A bonds issued by the Massachusetts
Health and Educational Facilities Authority and insured by
Financial Security Assurance Inc.
The outlook is positive at this investment grade level.
The upgrade into an investment grade category reflects continuing
improvement in financial position and competitive profile of this
health plan over the last four years as well as the removal of the
organization from administrative supervision by Commonwealth
agencies. The positive outlook reflects Moody's expectation for
continued favorable financial performance and ongoing benefits to
be realized from the alliance with United HealthCare, which has
provided HPHC the ability to market to multi-site employer groups
and compete more effectively with Blue Cross and Blue Shield of
Massachusetts, the state's largest health plan. The alliance has
contributed significantly to HPHC's growth in membership over the
last year.
In addition, HPHC's systems agreement with United provides HPHC
with access to an up-to-date and reliable platform to service its
customer base.
Legal security:
Gross revenue pledge; GAAP debt service coverage ratio of 1.10x.
Removal from administrative supervision occurred with the
completion of the 2005 audit when HPHC was able to demonstrate
that its statutory net worth exceeded $130 million. An agreement
between HPHC and FSA provides that the bonds will be treated as
Surplus Notes once HPHC is removed from administrative
supervision.
In consideration of FSA's agreement, principal payments will be
increased such that the final maturity of the 1998A bonds will be
in 2019 rather than in 2028 and HPHC will pay FSA an annual fee as
well as provide a mortgage on HPHC's operations facility located
in Quincy, MA.
Interest rate derivatives:
None.
Strengths:
-- Oldest non-profit health plan operating in the northern New
England states with a strong history of operating in
Massachusetts and loyal core membership.
-- Release from supervision by the Insurance Commissioner of
the Commonwealth of Massachusetts six years before expected
as a result of improved performance and balance sheet
strength.
-- Alliance with United HealthCare expands HPHC's geographic
reach and provides new national account opportunities for
future growth as well as a more diversified portfolio of
plan offerings and access to United's benefits-
administration technology. United will exit the PPO
business in HPHC's service area and HPHC will write all
business in its service area. The HPHC culture is to
remain the overriding experience for members with HPHC
managing these national accounts in Massachusetts.
-- Technology provided by United HealthCare surpasses the
system applications used by HPHC's competitors.
-- Steady membership growth, with enrollees expected to exceed
one million members in 2007 as HPHC becomes a full service
plan and re-images itself from its historical staff model
HMO reputation. Targeted growth through acquisition or by
offering multiple product choices has contributed to this
trend of increasing and diversified enrollment despite
geographic concentration. Opportunities for growth and
diversification are being pursued in New Hampshire and
Maine.
-- Acquisition and integration of Health Plans, Inc., the
largest TPA in New England, will substantially mitigate the
self-insured challenge.
-- National recognition for customer service provides a
competitive advantage to HPHC; market leader in e-health.
-- Strong allegiance with employer groups and hospitals -
loyalty has been demonstrated by retained enrollment after
receivership and multi-year contracting arrangements with
providers.
-- Expanded physician network so that its physician network is
as broad and comprehensive as competitors.
-- Strong management team.
-- Trend of financial improvement, significant turnaround
achieved over the last four years with all products now
producing returns at or better than breakeven. Declining
medical cost trend with pharmacy costs below budget and new
volume from increased membership has contributed to the
current year's $31 million operating profit through
Oct.31, 2006.
-- Much improved balance sheet and statutory net worth;
growing liquidity and no plans for additional debt.
-- Investment policy to be revised to include equity
investments to enhance investment returns. Currently, all
investments are in fixed income securities.
Challenges:
-- Uncertainty surrounding health reform that is expected to
begin in July 2007 in Massachusetts.
-- Blue Cross Blue Shield of Massachusetts is a sizable
competitor and leads in market share in the non-group and
small group markets. Pricing pressures in Massachusetts
could impact membership growth and profitability going
forward.
-- Needs to continue to manage healthcare cost trends
especially with respect to pressure from providers for
increased reimbursement rates.
-- Market moving to self-insured products which has not been a
historical strength of HPHC and which provides lower net
profits than fully insured business.
-- Pressure being felt to increase number of Medicare
enrollees. Adding a Medicare Advantage product that is
fee-for-service based, which puts the risk back to HPHC and
was in response to membership change by Harvard Vanguard
physicians to Tufts' product. Government reimbursement for
these products is expected to decline over time.
-- Balancing and maintaining its local strengths and quality
of service with United's scale.
-- Revised agreement with FSA requires additional $9.8 million
principal payment by HPHC to FSA if profits exceed $40
million.
Recent developments:
HPHC has recovered from its financial difficulties and the removal
from supervision by the Commissioner of Insurance closes that
chapter in HPHC's history. Over the last several years, aided in
part by a rising premium market, improved underwriting abilities
and conscious decisions to stop subsidizing money losing account
relationships and by exiting the unprofitable Rhode Island market,
HPHC's financial position has been able to demonstrate marked
improvement year over year.
HPHC's alliance with United HealthCare to offer a co-branded
product began in August 2004. This relationship provides HPHC
with a national partner and the ability to gain membership from
national account employers who seek a standardized approach for
their multi-state employees. Currently, United has 200,000
members in HPHC's geographic market who are employed by multi-
state employers, representing new potential enrollees for HPHC.
Since the Alliance was formed, HPHC has added 54,000 new self-
insured members to its membership list. Beginning Jan. 1, 2007,
HPHC will underwrite coverage for members currently living in the
service area and United will underwrite coverage for members
outside of the service area. Despite its growth in membership,
HPHC was unable to compete effectively for multi-site business
with Blue Cross Blue Shield of Massachusetts who is able to
service national account clients through its relationship with
other Blue Cross Blue Shield Plans throughout the nation. BCBSMA
is the market share leader in Massachusetts and has been growing
its members over the last four years.
Additionally, because the hardware and operating system currently
used by HPHC to operate its claims and benefits system is not
going to be supported after 2009 by Hewlett Packard, HPHC entered
into a separate systems agreement with United HealthCare.
Under the agreement HPHC will migrate to United's system beginning
in October 2008 which provides the added bonus of streamlined
reporting and a single platform for the national account business
the two companies sell jointly. HPHC will be paying an
administrative services fee to United that includes product
development and HPHC will not have to incur the capital costs of
building the system's IT infrastructure. United will be
processing the claims as they are migrated to United's system over
the next three years. The United platform will allow a single
platform for the national program and local HPHC HMO, point of
service and PPO products.
HPHC expects to maintain its not-for-profit independence and
retain its independent identity in the local market. HPHC
purchased HPI, a third party administrator that will be operated
as a stand-alone subsidiary of HPHC in 2005. HPI's business,
which is comprised of local self-insured accounts complements the
larger, multi-state, self-insured accounts targeted with the
United HealthCare alliance and will help HPHC take advantage of
the moving shift of smaller employers to self-insured accounts.
Financial performance has shown consistent improvement since 2000,
generating increasing operating profits since 2003 with very
strong underwriting gain of $52.7 million reported for 2005.
Performance has increased in concert with membership, which has
been slowly growing over the last three years, reaching 974,412
members as of Oct. 31, 2006, a member level greater than
membership prior to receivership. Primary drivers for the
membership growth include the acquisition of HPI, the alliance,
and favorable results in northern New England. Balance sheet
indicators have improved with the performance, with cash balances
increasing to $604.3 million as of Oct. 31, 2006 from
$561.3 million at fiscal year end 2005.
Outlook:
The positive outlook at this investment grade level reflects
Moody's belief in HPHC's ability to maintain current performance
levels and continue benefiting from its expanding product
offerings in Massachusetts and New England and its strategic
alliance with United HealthCare. A strengthened balance sheet, an
improved market position measured by continued membership growth,
and the ability to hold medical expenses to levels that are better
than expectations could result in further rating improvement over
the intermediate term.
What could change the rating -- up
Trend of continued operating profits, improved market share,
materially improved balance sheet indicators from current levels.
What could change the rating -- down
Loss in membership, change in the United alliance, healthcare
reform that requires HPHC to compromise its underwriting and
pricing discipline
key indicators:
* Based on financial statements for Harvard Pilgrim Health
Care Inc. and Affiliates
* First number reflects statutory statements with audit year
ended December 31, 2005
* Second number reflects interim statutory "ten" months
annualized ended October 31, 2006
* Actual Investment returns
-- Total membership: 889,097 members; 974,412 members
-- Premium Revenue: $2.23 billion; $2.48 billion
-- Operating income: $52.6 million; $37.0 million
-- Medical Loss ratio: 84.1%; 85.8%
-- Moody's-adjusted net revenue available for debt service:
$102.1 million; $92.9 million
-- Total debt outstanding: $159.6 million; $148.9 million
-- Maximum annual debt service: $25.2 million
-- MADS coverage based on reported investment income: 4x;
3.7x
-- Debt to cashflow: 1.4x; 1.6x
-- Days cash on hand: 94.7 days; 90.9 days
-- Cash-to-debt: 428.6%; 486.5%
-- Operating margin: 2.3; 1.5%
Rated debt:
* debt outstanding as of December 31, 2005
-- Series 1998A, $148.9 million outstanding, rated Aaa
based on insurance provided by FSA, Baa3 underlying
rating
HOME PRODUCTS: Organizational Meeting Scheduled on January 3
------------------------------------------------------------
The U.S. Trustee for Region 3 will hold an organizational meeting
to appoint an official committee of unsecured creditors in Home
Products International, Inc., and its debtor-affiliate, Home
Products International-North America, Inc.'s chapter 11 cases at
1:30 p.m., on Jan. 3, 2007, at the J. Caleb Boggs Federal
Building, 844 North King Street, Room 5209 in Wilmington,
Delaware.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases. The
meeting is not the meeting of creditors pursuant to Section 341
of the Bankruptcy Code. However, a representative of the Debtors
will attend and provide background information regarding the
cases.
Creditors interested in serving on a Committee should complete
and return to the U.S. Trustee a statement indicating their
willingness to serve on an official committee.
Official creditors' committees, constituted under Section 1102 of
the Bankruptcy Code, ordinarily consist of the seven largest
creditors who are willing to serve on a committee. In some
Chapter 11 cases, the U.S. Trustee is persuaded to appoint
multiple creditors' committees.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and
financial affairs. Importantly, official committees serve as
fiduciaries to the general population of creditors they
represent. Those committees will also attempt to negotiate the
terms of a consensual Chapter 11 plan -- almost always subject to
the terms of strict confidentiality agreements with the Debtors
and other core parties-in-interest. If negotiations break down,
the Committee may ask the Bankruptcy Court to replace management
with an independent trustee. If the Committee concludes that the
reorganization of the Debtors is impossible, the Committee will
urge the Bankruptcy Court to convert the Chapter 11 cases to a
liquidation proceeding.
Headquartered in Chicago, Illinois, Home Products International,
Inc. -- http://www.hpii.com/-- designs, manufactures, and markets
ironing boards, covers, and other high-quality, non-electric
consumer houseware products. The Debtor's product lines include
laundry management products, bath and shower organizers, hooks,
hangers, home and closet organizers, and food storage containers.
Their products are sold under the HOMZ brand name, and are
distributed to hotels, discounters, and other retailers such as
Wal-Mart, Kmart, Sears, Home Depot, and Lowe's.
The company and its affiliate, Home Products International-North
America, Inc., filed for chapter 11 protection on Dec. 20, 2006
(Bankr. D. Del. Case Nos. 06-11457 and 06-11458). Eric D.
Schwartz, Esq., at Morris, Nichols, Arsht & Tunnell, represents
the Debtors. When the Debtors filed for protection from their
creditors, they listed estimated assets between $1 million and
$100 million and debts of more than $100 million.
INDUSTRIAL ENTERPRISES: Forms Venture with Chinese Chemical Trader
------------------------------------------------------------------
Industrial Enterprises of America, Inc. entered into a Joint
Venture agreement with Sinochem Ningbo Ltd., a subsidiary of
Sinochem Corporation, for the packaging of refrigerant gases in
China for worldwide distribution. Sinochem Corporation is a
chemicals trader in China and a Global 500 Company.
Per the agreement, IEAM will provide packaging equipment and
expertise as well as train the staff for the facility, which will
be provided by Sinochem. Profits from the venture will be
effectively equally split between the two parties.
Industrial Enterprises anticipates that the Joint Venture will
begin operations early next year, with a full transfer of
equipment and trained personnel between IEAM and Sinochem's
facilities to be complete by the end of March.
"This new venture has the potential to increase the earnings of
our company dramatically as this facility will be shipping
worldwide," John Mazzuto, Chief Executive Officer of Industrial
Enterprises of America, commented. "We expect this Joint Venture
to be a strong profit center for IEAM for many years to come.
Although it is premature to forecast earnings for the new venture,
I would expect it to have at least the same impact as the
acquisition of Pitt Penn."
Sinochem Ningbo Ltd. was established in 1987 and is a subsidiary
of China National Chemicals Import & Export Corporation
(SINOCHEM), which ranked 276th among the top 500 enterprises in
the world.
Headquartered in New York City, Industrial Enterprises of America,
Inc. (OTCBB:IEAM) is an automotive aftermarket supplier that
specializes in the sale of anti-freeze, auto fluids, and other
automotive additives & chemicals. The company has distinct
proprietary brands that collectively serve the retail,
professional, and discount automotive aftermarket channels.
Going Concern Doubt
Beckstead and Watts, LLP, in Henderson, Nevada, raised substantial
doubt about Industrial Enterprises' ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended June 30, 2005. The auditor pointed
to the company's net losses from its inception, and its limited
operations, since the company has not commenced planned principal
operations.
INTERSTATE BAKERIES: Posts $128.3 Million Net Loss in Fiscal 2006
-----------------------------------------------------------------
Interstate Bakeries Corp. filed its financial statements for the
year ended June 3, 2006, with the Securities and Exchange
Commission on Dec. 20, 2006.
Interstate Bakeries Corp. reported a $128.3 million net loss on
$3.1 billion of net sales for the year ended June 3, 2006,
compared with a $379.3 million net loss on $3.4 billion of net
sales for the year ended May 28, 2005.
Wholesale operations net sales for the 53 weeks ended June 3,
2006, were approximately $2.7 billion, representing a decrease of
approximately $293.7 million, or 9.8%. The decline reflected a
total unit volume decline of approximately 16.9%, partially offset
by a unit value increase of approximately 8.2% in fiscal 2006 as
compared to the prior year. This unit value increase is related
to selling price increases and product mix changes.
Retail operations net sales for the 53 weeks ended Jun. 3, 2006,
were approximately $358.7 million, representing a decrease of
approximately $49.3 million, or 12.1%. The decline in revenue is
mainly attributable to the closing of retail outlets.
Gross profit decreased by approximately $171.7 million in fiscal
2006 compared to fiscal 2005. Gross profit was approximately
$1.51 billion for fiscal 2006, in comparison with approximately
$1.68 billion in fiscal 2005.
The $251 million decrease in net loss in fiscal 2006 is mainly due
to the $229.5 million goodwill and other intangible asset
impairment charge in fiscal 2005, absent in fiscal 2006, a $54.3
million restructuring charge recorded in fiscal 2005, the $127
million decrease in selling, delivery and administrative expenses,
and a net gain of $27.2 million from the sale of assets, which was
offset by a $171.7 million decrease in gross profit.
The decrease in selling, delivery and administrative expenses
results from the impact of the company's restructuring efforts to
consolidate routes, depots, and outlets in fiscal 2006 and 2005.
Interest expense for fiscal 2006 was $52.5 million, representing
an increase of $11.1 million from fiscal 2005's expense of $41.4
million. The increase in interest expense is attributable in
approximate amounts to a $10.7 million increase relating to an
increased average interest rate and amount of debt, a $1.7 million
increase in DIP fees, decreased financing fees of $1.1 million,
and all other interest categories netting to a $200,000 decrease.
At June 3, 2006, the company's balance sheet showed 1.3 billion in
total assets, $1.2 billion in total liabilities and $287.1 million
in liabilities subject to compromise, resulting in a
$240.6 million total stockholders' deficit.
The company's balance sheet at June 3, 2006, also showed strained
liquidity with $460 million in total current assets available to
pay $856.1 million in total current liabilities.
Full-text copies of the company's financial statements for the
year ended June 3, 2006, are available for free at:
http://researcharchives.com/t/s?17bc
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due Aug. 15, 2014, on Aug. 12,
2004) in total debts.
IVI COMMUNICATIONS: Sept. 30 Balance Sheet Upside-Down by $803,069
------------------------------------------------------------------
IVI Communications Inc. reported $364,907 of net income on
$461,103 of revenues for the first fiscal quarter ended Sept. 30,
2006, compared with a $1,531,055 net loss on $664,264 of revenues
for the same period in 2005.
At Sept. 30, 2006, the company's balance sheet showed $4,697,333
in total assets and $5,500,402 in total liabilities, resulting in
a $803,069 stockholders' deficit. The company's accumulated
deficit stood at $25,279,748 as of Sept. 30, 2006.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with $488,835 in total current assets available
to pay $4,504,558 in total current liabilities.
A full-text copy of the company's quarterly report is available
for free at http://researcharchives.com/t/s?17bf
Going Concern
Bagel, Josephs, Levine & Company, LLC, in Gibbsboro, New Jersey,
raised substantial doubt about IVI Communications Inc.'s ability
to continue as a going concern after auditing the company's
consolidated financial statements for the year ended Mar. 31,
2006. The auditor pointed to the company's operating losses and
capital deficits.
About IVI Communications
IVI Communications, Inc. -- http://www.ivn.net/-- acquires,
consolidates and profitably operates locally branded ISPs to offer
state of the art dialup and fixed wireless broadband Internet
access and other services such as VoIP Internet Telephony to
residential and business customers.
IVI has three wholly owned subsidiaries, Internet Business
Consulting, Inc., Futura, Inc., and AppState.Net. IBC is a VoIP
services provider and a source of turnkey wireless networks that
has the expertise required to engineer, install, and support
wireless applications and solutions. Futura, founded in September
1995, is a regional Internet Service Provider serving dialup, DSL
and VoIP in communities surrounding Little Rock, Arkansas.
AppState.net is an Internet Service Provider founded in July 1999
providing wireless and dialup Internet access to the Appalachian
State University town of Boone, NC.
J. CREW: Subsidiary Makes $50 Million Prepayment on Credit Pact
---------------------------------------------------------------
J. Crew Group, Inc.'s subsidiary, J. Crew Operating Corp., made a
$50 million voluntary prepayment under a credit and guaranty
agreement.
The Credit Agreement is by and among Operating, as borrower, J.
Crew Group, Inc. and certain of Operating's direct and indirect
subsidiaries as guarantors, certain lenders named in the Credit
Agreement, Goldman Sachs Credit Partners L.P. and Bear, Stearns &
Co. Inc. as joint lead arrangers and joint bookrunners, Goldman
Sachs Credit Partners L.P. as administrative agent and collateral
agent, Bear Stearns Corporate Lending Inc. as syndication agent
and Wachovia Bank, National Association as documentation agent.
New York City-based J. Crew Group Inc. -- http://www.jcrew.com/--
is a fully integrated multi-channel specialty retailer of women's
and men's apparel and accessories. J.Crew products are
distributed through the Company's 166 retail and 49 factory
stores, the J. Crew catalog, and the company's Internet Web site.
At Oct. 28, 2006 J. Crew Group Inc.'s balance showed a total
stockholders' deficit of $55.1 million compared to a deficit of
$587.8 million at Jan. 28, 2006.
JACK IN THE BOX: Accepts for Purchase $142.5 Mil. of Common Stock
-----------------------------------------------------------------
Jack in the Box Inc. disclosed that it has accepted for purchase,
relative to its modified "Dutch Auction" tender offer, 2,336,023
shares of its common stock at a purchase price of $61 per share,
for a total cost of $142.5 million.
Stockholders who tendered shares of common stock in the tender
offer at or below the purchase price will have all of their
tendered shares purchased, subject to certain limited exceptions,
the Company also disclosed.
Mellon Investor Services LLC, the depositary for the tender offer,
will promptly issue payment for the shares validly tendered and
accepted for purchase under the tender offer.
The number of shares the company accepted for purchase in the
tender offer represents approximately 6.5% of its currently
outstanding common stock.
The company plans to continue purchasing shares of its common
stock in the open market during 2007.
The joint dealer managers for the tender offer are Wachovia
Securities and Morgan Stanley and the depositary is Mellon
Investor Services LLC.
All inquiries about the tender offer should be directed to D.F.
King & Co., Inc., the information agent at (888) 628-8208. Banks
and brokers may call (212) 269-5550.
Headquartered in San Diego, Ca., Jack in the Box Inc. (NYSE: JBX)
-- http://www.jackinthebox.com-- operates and franchises Jack in
the Box(R) restaurants, with more than 2,000 restaurants in 17
states. The company also operates a proprietary chain of
convenience stores called Quick Stuff(R), with more than 50
locations, each built adjacent to a full-size Jack in the Box
restaurant and including a major-brand fuel station.
Additionally, through a wholly owned subsidiary, the company
operates and franchises Qdoba Mexican Grill(R), with more than 300
restaurants in 40 states.
* * *
As reported in the Troubled Company Reporter on Dec. 11, 2006
Standard & Poor's Ratings Services assigned its 'BB-' rating to
Jack in the Box Inc.'s $475 million term loan due 2012 and
$150 million revolver due 2011.
The rating is equal to the 'BB-' corporate credit rating, which
was affirmed. The outlook is negative.
As reported in the Troubled Company Reporter on Dec. 6, 2006
Moody's Investors Service lowered the corporate family rating to
Ba3 from Ba2 on Jack in the Box and its probability of default
rating to B1 from Ba3. The outlook for the ratings is stable.
KATONAH IX: Moody's Rates $15 Million Class B-2L Notes at Ba2
-------------------------------------------------------------
Moody's Investors Service assigned these ratings to Notes issued
by Katonah IX CLO Ltd.:
-- Aaa to $221,000,000 Class A-1L Floating Rate Notes, Due
2019;
-- Aaa to Up To $100,000,000 Class A-1LV Revolving Floating
Rate Notes Due 2019;
-- Aa2 to $23,000,000 Class A-2L Floating Rate Notes, Due
2019;
-- A2 to $26,000,000 Class A-3L Floating Rate Notes, Due 2019;
-- Baa2 to $15,000,000 Class B-1L Floating Rate Notes, Due
2019;
-- Ba2 to $15,000,000 Class B-2L Floating Rate Notes, Due
2019; and,
-- Aaa to $6,000,000 Class X Floating Rate Notes Due 2013.
The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to Noteholders, relative to the promise of receiving the
present value of such payments.
The ratings reflect the risks due to the diminishment of cash flow
from the underlying portfolio consisting primarily of Senior
Secured Loans due to defaults, the transaction's legal structure
and the characteristics of the underlying assets.
Katonah Debt Advisors, L.L.C. will manage the selection,
acquisition and disposition of collateral on behalf of the issuer.
KRISPY KREME: Expects $117 Million in Revenues for Third Quarter
----------------------------------------------------------------
Krispy Kreme Doughnuts Inc. reported that on a preliminary basis
it expects to report revenues of approximately $117 million for
the third quarter of fiscal 2007, which ended Oct. 29, 2006,
compared to revenues of approximately $129 million for the third
quarter of fiscal 2006. The decrease in revenues reflects a
decline in the number of company stores as well as lower sales to
franchisees by the company's Manufacturing and Distribution
segment.
Systemwide sales fell approximately 9% in the third quarter of
fiscal 2007 compared to the third quarter of the prior year
primarily due to an approximately 17% decrease in the number of
factory stores to 293 (total stores, including satellites,
decreased approximately 8%). Average weekly sales per factory
store (which is computed by dividing sales from all factory and
satellite stores by the number of factory stores in operation)
increased approximately 16% and 12% in company stores and
systemwide, respectively, compared to the third quarter of fiscal
2006. Average weekly sales per store (which is computed by
dividing sales from all factory and satellite stores by the
aggregate number of all such stores in operation) increased
approximately 14% for company stores and decreased approximately
0.5% systemwide, compared to the third quarter of fiscal 2006.
Systemwide average sales per store decreased slightly while
company average sales per store rose principally because the
growth in satellite stores, which have lower average sales than
factory stores, largely has been concentrated in franchise stores
and not in company stores. The average sales per unit data
reflect, among other things, store closures and the related shift
in off-premises doughnut production into a smaller number of
stores. Systemwide sales data include sales at all company and
franchise locations. Systemwide sales is a non-GAAP financial
measure; however, the company believes systemwide sales
information is useful in assessing the overall performance of the
Krispy Kreme brand and, ultimately, the performance of the
company.
"While we still have a way to go in Krispy Kreme's turnaround, we
are encouraged by our progress in the third quarter," said Daryl
Brewster, President and Chief Executive Officer. "The company has
agreed to settle the class action lawsuit and most of the
shareholder derivative litigation. Average unit volumes rose at
company-owned stores. Krispy Kreme continued its international
expansion while filling several key management positions critical
to achieving sustained growth."
The company noted that its financial results continue to be
adversely affected by the substantial costs associated with the
legal and regulatory matters previously disclosed by the company.
The company expects to report a net loss for the third quarter of
fiscal 2007.
Financial Position
The company believes that cash flow from operations and existing
cash balances will be sufficient to meet its liquidity needs. As
of Oct. 29, 2006, the company's cash balance was approximately
$35 million and its indebtedness was approximately $119 million
(including capital lease obligations), compared to approximately
$16 million and $123 million, respectively, at Jan. 29, 2006. The
January amounts exclude amounts relating to Glazed Investments,
the company's consolidated franchisee at the time. As of Oct. 29,
2006, the company had no consolidated franchisees.
About Krispy Kreme
Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme
(NYSE: KKD) -- http://www.krispykreme.com/-- is a branded
specialty retailer of premium quality doughnuts, including the
Company's signature Hot Original Glazed. There are currently
approximately 320 Krispy Kreme stores and 80 satellites operating
systemwide in 43 U.S. states, Australia, Canada, Mexico, the
Republic of South Korea and the United Kingdom.
Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC
is a majority-owned subsidiary and franchisee partner of Krispy
Kreme Doughnuts, Inc., in the Philadelphia region. Freedom Rings
operates six out of the approximately 360 Krispy Kreme stores and
50 satellites located worldwide. The Company filed for chapter 11
protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268).
M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew
Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated $10
million to $50 million in assets and debts.
Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is
a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11
protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932).
The bankruptcy filing will facilitate the sale of 12 Krispy Kreme
stores, as well as the franchise development rights for Colorado,
Minnesota and Wisconsin, for approximately $10 million to Westward
Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho,
Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP
represents Glazed in its restructuring efforts. When Glazed filed
for protection from its creditors, it estimated assets and debts
between $10 million to $50 million.
KremeKo Inc., Krispy Kreme's Canadian franchisee, is currently
restructuring under the Companies' Creditors Arrangement Act.
Pursuant to the Court's Initial Order, Ernst & Young Inc. was
appointed as Monitor in KremeKo's CCAA proceedings. The Monitor
is attempting to sell the KremeKo business.
The U.S. District Court for the Middle District of North Carolina
has set Feb. 7, 2007, as the hearing date for the final approval
of the terms of the settlement of the shareholder derivative
action entitled Wright v. Krispy Kreme Doughnuts Inc., et al.
KRISPY KREME: Files Delayed First Quarter Financial Results
-----------------------------------------------------------
Krispy Kreme Doughnuts Inc. delivered its first quarter financial
results to the Securities and Exchange Commission on Dec. 22,
2006. The company's quarterly filings have been delayed due to
accounting problems.
For the three months ended April 30, 2006, the company reported a
$6 million net loss on $119.3 million of net revenues compared
with a $53.3 million net loss on $152.5 million of net revenues
for the same period in 2005.
Net cash provided by operating activities was $7.6 million and
$11.5 million in the first quarter of fiscal 2007 and 2006,
respectively. The company's net loss, adjusted for non-cash
charges and credits, declined approximately $2.0 million in the
first quarter of fiscal 2007 compared to the first quarter of
fiscal 2006. This improvement in operating cash flow was offset
by increases in accounts receivable and a reduction in accounts
payable and accrued liabilities during the quarter.
The company's balance sheet at April 30, 2006, showed $393.1
million in total assets, $282 million in total liabilities and a
$111.1 million positive stockholders' equity.
Full-text copies of the company's first quarter financials are
available for free at http://researcharchives.com/t/s?17bd
As reported in the Troubled Company Reporter on Dec. 15, 2006, the
company's filing with the Securities and Exchange Commission on
Dec. 11, 2006, disclosed that the company has devoted in
completing its annual report on Form 10-K for fiscal 2006, filed
on Oct. 31, 2006, and its quarterly reports on Form 10-Q for the
first three quarters of fiscal 2006, filed on Nov. 9, 2006.
In addition, the company has also been devoting substantial
resources to complete its quarterly reports on Form 10-Q for the
first two quarters of fiscal 2007. Due to the substantial
resources devoted to these reports, the Company was unable to
finalize its quarterly report on Form 10-Q for the third quarter
of fiscal 2007 before the filing deadline of Dec. 8, 2006.
About Krispy Kreme
Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme
(NYSE: KKD) -- http://www.krispykreme.com/-- is a branded
specialty retailer of premium quality doughnuts, including the
Company's signature Hot Original Glazed. There are currently
approximately 320 Krispy Kreme stores and 80 satellites operating
systemwide in 43 U.S. states, Australia, Canada, Mexico, the
Republic of South Korea and the United Kingdom.
Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC
is a majority-owned subsidiary and franchisee partner of Krispy
Kreme Doughnuts, Inc., in the Philadelphia region. Freedom Rings
operates six out of the approximately 360 Krispy Kreme stores and
50 satellites located worldwide. The Company filed for chapter 11
protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268).
M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew
Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated $10
million to $50 million in assets and debts.
Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is
a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11
protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932).
The bankruptcy filing will facilitate the sale of 12 Krispy Kreme
stores, as well as the franchise development rights for Colorado,
Minnesota and Wisconsin, for approximately $10 million to Westward
Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho,
Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP
represents Glazed in its restructuring efforts. When Glazed filed
for protection from its creditors, it estimated assets and debts
between $10 million to $50 million.
KremeKo Inc., Krispy Kreme's Canadian franchisee, is currently
restructuring under the Companies' Creditors Arrangement Act.
Pursuant to the Court's Initial Order, Ernst & Young Inc. was
appointed as Monitor in KremeKo's CCAA proceedings. The Monitor
is attempting to sell the KremeKo business.
The U.S. District Court for the Middle District of North Carolina
has set Feb. 7, 2007, as the hearing date for the final approval
of the terms of the settlement of the shareholder derivative
action entitled Wright v. Krispy Kreme Doughnuts Inc., et al.
LANDRY'S RESTAURANTS: S&P Holds Corporate Credit Rating at BB-
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed the 'BB-' corporate
credit rating for Landry's Restaurants Inc. and raised the
corporate credit rating for Golden Nugget Inc. to 'BB-' from
'B+'.
The outlook is negative.
"The action on Landry's reflects the company's improved credit
metrics following its use of proceeds from the sale of Joe's Crab
Shack to reduce debt, improved profitability at Golden Nugget, and
our expectations that credit metrics should gradually improve over
time," said Standard & Poor's credit analyst Stella Kapur.
"The corporate credit rating on Golden Nugget was raised following
our decision to equalize the ratings of Landry's Restaurants and
its wholly owned subsidiary, Golden Nugget. While Golden Nugget
is an unrestricted subsidiary, we believe the current and expected
future support this entity receives from its parent is more
meaningful than we had originally anticipated."
At the same time the ratings on Landry's Restaurant's and Golden
Nugget's credit facilities and notes were revised to incorporate
the company's updated pro forma capital structure and enterprise
valuations.
All ratings were removed from their respective CreditWatch
listings.
While credit metrics improved after the use of sale proceeds to
pay down debt, credit metrics still remain weak for current
ratings levels. Pro forma consolidated, lease-adjusted debt to
EBITDA is in the low-5x area and pro forma interest coverage is in
the high-2x area.
MCDERMOTT INTERNATIONAL: Completes $355 Mil. Settlement Payments
----------------------------------------------------------------
McDermott International, Inc. and its subsidiaries completed ahead
of schedule its remaining financial obligations it was required to
make under The Babcock & Wilcox Company's plan of reorganization
and settlement agreement to fund the B&W asbestos trust.
On Dec. 21, 2006, McDermott paid the $355 million contingent
payment right from cash on hand. On Dec. 1, 2006, the company
retired the $250 million contingent promissory note utilizing
proceeds from B&W's credit facility. The contingent payment right
and contingent note vested on Dec. 1, 2006 as a result of the
Fairness in Asbestos Injury Resolution Act of 2005, or other
similar legislation, failing to become law by Nov. 30, 2006.
"By completing all payments owed to the asbestos trust ahead of
schedule and during this calendar year, the company accelerates
the tax benefit associated with these payments," indicated Frank
Kalman, Executive Vice President and Chief Financial Officer. "We
currently expect to receive a cash tax refund of approximately
$250 million, most likely in late 2007 or early 2008, subject to
the resolution of open IRS tax audits. In addition, with the
completion of these payments, the company has satisfied all of its
financial obligations to the B&W asbestos trust."
To retire the contingent promissory note, B&W used the term loan
feature under its credit facility. The new term debt matures on
Feb. 22, 2012 and bears interest at the LIBOR plus 3%. McDermott
may prepay this loan at any time without penalty.
"We intend to retire this loan during 2007 if B&W is able to
simultaneously increase its capacity under its revolving credit
facility," continued Mr. Kalman.
As a result of the contingent note retirement, McDermott expects
it will incur a charge of approximately $5 million during the
fourth quarter of 2006.
Consolidation of U.S. Operations
Additionally, McDermott disclosed its intention to combine the
company's two groups of U.S. legal entities, McDermott
Incorporated, the indirect parent company of B&W and BWX
Technologies, Inc., and J. Ray McDermott Holdings, LLC.,
currently, the holding company of J. Ray McDermott, S.A.'s U.S.
operations, into a single U.S. consolidated group. This
reorganization will return the Company to a more tax-efficient
U.S. legal structure now that the B&W asbestos issues have been
resolved. After completion of the proposed consolidation, the
company expects at least $275 million of net operating losses to
be available to offset the combined future taxable income
generated by the single consolidated group. McDermott expects
that this combination will be completed by Dec. 31, 2006 and that
it will likely result in the reversal of a substantial portion of
the company's federal deferred tax asset valuation allowance,
which will increase net income by the amount reversed.
About McDermott Int'l
Headquartered in Houston Texas, McDermott International, Inc.
(NYSE:MDR) -- http://www.mcdermott.com/-- through its
subsidiaries, operates as an energy services company worldwide.
* * *
As reported in the Troubled Company Reporter on Oct. 6, 2006,
Moody's Investors Service's confirmed its B1 Corporate Family
Rating for McDermott International Inc.
MOSAIC COMPANY: Refinancing Prompts S&P to Downgrade Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on The
Mosaic Co.'s $450 million revolving credit facility and
$50 million term loan A, both maturing in 2010, to 'BB' with a
recovery rating of '2' from 'BB+' with a recovery rating of '1'
and removed them from CreditWatch, where they had been placed with
negative implications on Nov. 10, 2006.
"These rating actions were anticipated and follow Mosaic's
recently completed refinancing that resulted in a larger bank
credit facility, all the components of which are now rated 'BB'
with a recovery rating of '2'," said Standard & Poor's credit
analyst Cynthia Werneth.
These ratings reflect Standard & Poor's expectation that credit
facility lenders would experience substantial recovery in a
payment default.
At the same time, Standard & Poor's withdrew its ratings on
Mosaic's $350 million term loan B that was refinanced and on
several senior unsecured debt issues, the large majority of which
were tendered and refinanced.
Standard & Poor's also affirmed its 'BB' corporate credit rating
and other existing debt ratings on Mosaic.
The outlook is negative.
At Aug. 31, 2006, Mosaic had total debt of about $3.2 billion.
The ratings on Plymouth, Minnesota-based Mosaic reflect its
aggressive financial profile, mitigated by its satisfactory
business risk profile as a leading global phosphate and potash
fertilizer and feed producer with annual sales of more than
$5 billion.
The ratings could be lowered if the company is unable to begin
reducing debt in the near term. This could occur because of
prolonged volume weakness, greater price competition as offshore
phosphates capacity increases, a spike in raw material costs, or
weather-related operating disruptions. On the contrary, the
outlook could be revised to stable if favorable agricultural
market prospects translate into improved phosphates sales volumes
and lower debt leverage.
Standard & Poor's views the potential monetization of the Florida
land holdings as an intermediate-to-longer-term event that could
bolster credit quality, although the timing and magnitude of the
benefit is viewed as highly uncertain.
MOST HOME: Posts $734,362 Net Loss in Quarter Ended Oct. 31, 2006
-----------------------------------------------------------------
Most Home Corp. reported a $734,362 net loss on $565,396 of
revenues for the quarter ended Oct. 31, 2006, compared with a
$546,366 net loss on $432,895 of revenues for the same period in
2005.
The increase in revenues is mainly due to the $118,573 increase in
membership and client builder revenues and the $67,608 increase in
wireless and mobility revenue, offset by the $15,779 decrease in
referral revenue.
The increase in net loss is mainly due to the increase in
operating expenses, specifically, research and development
expenses and selling, general and administrative expenses.
At Oct. 31, 2006, 2006, the company's balance sheet showed
$1.4 million in total assets and $1.5 million in total
liabilities, resulting in an $86,690 total stockholders' deficit.
Full-text copies of the company's consolidated financial
statements for the quarter ended Oct. 31, 2006, are available for
free at http://researcharchives.com/t/s?17b6
Going Concern Doubt
Manning Elliott LLP expressed substantial doubt about Most Home's
ability to continue as a going concern after auditing the
company's financial statements for the year ended July 31, 2006.
The auditing firm pointed to the company's working capital
deficiency, recurring losses from operations, and the need for
additional equity/debt financing to sustain its operations.
* * *
Headquartered in Maple Ridge, British Columbia, Canada, Most Home
Corp. (OTC BB: MHMEE.OB) -- http://www.mosthome.com/-- provides
lead acquisition, response and management services to real estate
brokers and agents across North America, along with website and
wireless realty products.
NEPTUNE INDUSTRIES: Sept. 30 Balance Sheet Upside-Down by $819,535
------------------------------------------------------------------
Neptune Industries Inc. posted a $483,198 net loss on $255,877 of
net revenues for the fiscal year ended Sept. 30, 2006, compared to
a $233,335 net loss on $96,143 of net revenues in the prior year.
As of Sept. 30, 2006, the Company's balance sheet showed total
assets of $1,134,652 and total liabilities of $1,954,187,
resulting in a $819,535 stockholders' deficit.
The Company's Sept. 30 balance sheet also showed strained
liquidity with $717,978 in total current assets and $1.2 million
in total current liabilities.
Full-text copies of the company's financial statements are
available for free at http://researcharchives.com/t/s?17be
Going Concern Doubt
As reported in the Troubled Company Reporter on Oct. 20, 2006,
Dohan and Company CPAs, PA, in Miami, Florida, expressed
substantial doubt about Neptune Industries' ability to continue as
a going concern after it audited the Company's financial
statements for the year ended June 30, 2006. The auditing firm
pointed to the Company's recurring losses from operations and
working capital deficiency.
Headquartered in Boca Raton, Florida, Neptune Industries Inc.
(OTCBB: NPDI) -- http://www.neptuneindustries.net/-- is a public
corporation that engages in commercial fish farming and related
production and distribution activities in the seafood and
aquaculture industries.
NEWCOMM WIRELESS: Hires Jeffries & Ironbark as Financial Advisors
-----------------------------------------------------------------
The U.S Bankruptcy Court for the District of Puerto Rico gave
NewComm Wireless Services Inc. permission to employ Jeffries
and Company Inc. and Ironbark Associates LLC, as its financial
advisors.
Jeffries and Ironbark is expected to:
a) advise and assist to the Debtor in connection with
analyzing, structuring, negotiating and effecting and
acting as exclusive financial advisors to the Debtor in
connection with, any potential restructuring of the
Company's outstanding indebtedness, including, without
limitation, the Debtor's:
-- $60.5 million D.B. Zwirn Senior Credit Facility
due March 31, 2007, Federal Communications
Commission Loan due Jan. 3, 2007;
-- $60 million ABN AMRO Bridge Loan Facility due April
30, 2008; and
-- $40 million ABN AMRO Subordinated Loan Facility due
April 30, 2010 through any offer by the Debtor
with respect to any outstanding of the Debtor's
indebtedness, a solicitation of votes, approvals,
or consents giving effect thereto, or any
modification of the terms hereof, including with
respect to a prepackaged plan of reorganization or
other plan pursuant to chapter 11, Title 11 of the
U.S. Code, the execution of any agreement giving
effect thereto, an offer by any party to exchange
any outstanding of the Debtor's indebtedness, or
any similar balance sheet restructuring involving
the Debtor;
b) assist and advise the Debtor in connection with
analyzing, structuring, negotiating and effecting,
and identifying potential buyers in connection
with, the potential sale of the Company or all or
substantially all of its assets through any
structure or form of transaction, including, but
not limited to, any direct or indirect acquisition,
sale of assets, merger, consolidation,
restructuring, transfer of securities or
any similar or related transaction;
c) advise and assist the Debtor in connection with
analyzing, structuring, negotiating and effecting,
and identifying potential investors in, any
financing transaction on behalf of the Debtor
pursuant to a rights offering or other
offering of public or private securities, or any
other similar transaction or series of transactions
or any combination thereof, and acting, at the
request of the Debtor, as placement agent or
underwriter for the Debtor with respect to any
capital raise; and
d) perform these financial advisory services, among
others:
-- become familiar with, to the extent the
advisors deem appropriate, and analyzing, the
business, operations, properties, financial
condition and prospects of the Debtor;
-- advise the current state of the "restructuring
market";
-- assist and advise in developing a general
strategy for accomplishing a Restructuring;
-- assisting and advising the Debtor in
implementing a Restructuring on behalf of
Debtor;
-- assist and advise the Debtor in evaluating and
analyzing a Restructuring, including the value
of the securities, if any, that may be issued to
anyone in any Restructuring; and
-- render other financial advisor services as may
from time to time be agreed upon by the Debtor
and the Advisors.
The Debtor tells the Court that Jeffries and Company received
$470,000 in fees and $51,057.91 in expenses. The Debtor also
discloses that Ironbark Associates received $151,666.67 in fees
and $13,479.67 in expenses.
The firm will be compensated through:
-- a monthly retainer of $100,000 per month during the term
of this agreement, of which $75,000 shall be payable to
Jefferies and $25,000 shall be payable to Ironbark.
Fifty percent of the first ten full monthly retainers
paid to Jefferies and Ironbark, and one hundred percent
of all subsequent Monthly Retainers paid shall be
credited once against a transaction fee;
-- a fee in an amount equal to $2,000,000 upon consummation
of either a Debt Restructuring or an M&A Transaction.
The transaction fee is hereafter referred to as the "Net
Transaction Fee." Jefferies shall be entitled to receive
75% of the Net Transaction Fee, and Ironbark shall be
entitled to 25% of the Net Transaction Fee. In no event
shall the total of the Monthly Retainers and Net
Transaction Fee exceed $2,500,000 in the aggregate; and
-- upon the consummation of a capital raise, a fee based
upon the type of financial instrument in the capital
raise provided that:
(a) the advisors shall not be entitled to a capital raise
fee for any instruments placed to any party; and
(b) the capital raise fee shall be reduced by 50% for any
instruments placed to any party
The capital raise fee may be in the form of a fee paid
to the advisors a "gross spread", or discount to the
purchase price of the instruments paid by the advisors,
as applicable.
Ironbark Associates will be entitled to receive 10% of
any capital raise fee, up to a maximum of $100,000.
Jeffries and Company will be entitled to receive the
remainder of any capital raise fee.
-- in the event the Debtor requests that one or both of the
advisors advise the Debtor with respect to a consent
solicitation that is not related to or pursued in
connection with a restructuring, the Debtor and the
advisors will mutually agree upon a reasonable fee
for services.
To the best of the Debtor's knowledge Jeffries and Company Inc.;
and Ironbark Associates LLC, are "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Guaynabo, PR, NewComm Wireless Services, Inc.,
is a PCS company that provides wireless service to the Puerto Rico
market. The company is a joint venture between ClearComm, L.P.
and Telefonica Larga Distancia. The company filed for chapter 11
protection on Nov. 28, 2006 (Bankr. D. P.R. Case No. 06-04755).
Carmen D. Conde Torres, Esq., at C. Conde & Assoc. and Peter D.
Wolfston, Esq., at Sonnenschein Nath & Rosenthal LLP represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it reported assets and liabilities
of more than $100 million.
NEW YORK WESTCHESTER: Organizational Meeting Set for January 3
--------------------------------------------------------------
The U.S. Trustee for Region 2 will hold an organizational meeting
to appoint an official committee of unsecured creditors in New
York Westchester Square Medical Center's chapter 11 case at
10:00 a.m., on Jan. 3, 2007, at the U.S. Trustee Section 341
Meeting Room, 80 Broad Street, Second Floor in New York.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases. The
meeting is not the meeting of creditors pursuant to Section 341
of the Bankruptcy Code. However, a representative of the Debtors
will attend and provide background information regarding the
cases.
Creditors interested in serving on a Committee should complete
and return to the U.S. Trustee a statement indicating their
willingness to serve on an official committee.
Official creditors' committees, constituted under Section 1102 of
the Bankruptcy Code, ordinarily consist of the seven largest
creditors who are willing to serve on a committee. In some
Chapter 11 cases, the U.S. Trustee is persuaded to appoint
multiple creditors' committees.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and
financial affairs. Importantly, official committees serve as
fiduciaries to the general population of creditors they
represent. Those committees will also attempt to negotiate the
terms of a consensual Chapter 11 plan -- almost always subject to
the terms of strict confidentiality agreements with the Debtors
and other core parties-in-interest. If negotiations break down,
the Committee may ask the Bankruptcy Court to replace management
with an independent trustee. If the Committee concludes that the
reorganization of the Debtors is impossible, the Committee will
urge the Bankruptcy Court to convert the Chapter 11 cases to a
liquidation proceeding.
Headquartered in Bronx, New York, New York Westchester Square
Medical Center -- http://www.nywsmc.org/-- operates a hospital.
The company filed for chapter 11 protection on Dec. 19, 2006
(Bankr. S.D.N.Y. Case No. 06-13050). Burton S. Weston, Esq., at
Garfunkel, Wild & Travis, P.C., represents the Debtor. When the
Debtor filed for protection from its creditors, they listed
estimated assets and debts between $1 million to $100 million.
NEW YORK WESTCHESTER: Taps Garfunkel Wild as Bankruptcy Counsel
---------------------------------------------------------------
New York Westchester Square Medical Center asks the United States
Bankruptcy Court for the Southern District of New York for
permission to employ Garfunkel, Wild & Travis, P.C., as its
bankruptcy counsel.
Garfunkel Wild will:
(a) assist, advise and represent the Debtor in the preparation
and prosecution of the Chapter 11 case and in its
consultations with the creditors' committee and other
parties in interest regarding the administration of this
case;
(b) assist the Debtor with respect to their powers and duties
as a debtor and debtor in possession in the continued
management and operation of their business and properties;
(c) assist the Debtor in connection with any contemplated
sales of assets or business combinations, including
negotiating any asset, stock purchase, merger or joint
venture agreements, formulating and implementing any
bidding procedures, evaluating competing offers, drafting
appropriate corporate documents with respect to the
proposed sales, and counseling the Debtor in connection
with the closing of any such sales;
(d) advise the Debtor in connection with the postpetition
financing and cash collateral arrangements, negotiate and
draft documents relating thereto, provide advise and
counsel with respect to the Debtor's prepetition financing
arrangements, provide advice to the Debtor in connection
with issues relating to financing and capital structure
under any plan of reorganizations, and negotiate and draft
documents relating thereto;
(e) advise the Debtor on matters relating to the evaluation of
the assumption or rejection of unexpired leases or
executory contracts;
(f) advise the Debtor with respect to legal and regulatory
issues arising in or relating to the Debtor's ordinary
course of business, including attendance at senior
management meetings, meetings with Debtor's financial and
turnaround advisors, and meetings of the board of
directors;
(g) assist, advise and represent the Debtor in any
investigation of the acts, conduct, assets, liabilities
and financial condition of the Debtor, the operation of
the Debtor's business and the desirability of the
continuation of such business, and any other matter
relevant to the Debtor's case or to the formulation of a
plan;
(h) prepare on behalf of the Debtor all motions, applications,
answers, orders, report and papers necessary to the
administration of the estate;
(i) assist, advise and represent the Debtor with respect to
the negotiation of a plan of reorganization and related
agreements, and take any actions necessary to obtain
confirmation of the plan, including the collection and
filing with the Court of any acceptances of a plan;
(j) assist, advise and represent the Debtor in the performance
of all of its duties and powers under the Bankruptcy Code
and the Bankruptcy Rules and in the performance of such
other services as are in the best interests of the Debtor,
the creditors and the estate generally; and
(k) perform all other necessary legal services and provide all
other necessary legal advice to the Debtor in connection
with the Debtor's chapter 11 case.
The Debtor tells the Court that it has paid the firm a $150,000
prepetition retainer.
To the best of the Debtor's knowledge, the firm does not hold or
represent any interest adverse to its estate.
Headquartered in Bronx, New York, New York Westchester Square
Medical Center -- http://www.nywsmc.org/-- operates a hospital.
The company filed for chapter 11 protection on Dec. 19, 2006
(Bankr. S.D.N.Y. Case No. 06-13050). When the Debtor filed for
protection from its creditors, they listed estimated assets and
debts between $1 million to $100 million.
PENINSULA GAMING: S&P Holds Rating on $22 Mil. Senior Notes at B
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' rating on
Peninsula Gaming LLC's $22 million senior secured notes due 2012,
which are an add-on to the company's existing $233 million
senior secured notes due 2012.
The notes were privately placed, and are expected to be used in
part to finance the construction of a new moored barge facility at
the company's Diamond Jo casino in Dubuque, Iowa, as well as for
the development and construction of a hotel and events center at
The Old Evangeline Downs racino in Opelousas, Louisiana.
Concurrent with the note issue, the company issued an additional
$36.5 million in senior secured notes at its unrestricted
subsidiary Diamond Jo Worth LLC.
Total lease adjusted debt at Sept. 30, 2006, was $334 million.
At the same time, Standard & Poor's affirmed its existing ratings
on Peninsula, including its 'B' corporate credit rating.
The outlook remains stable.
PLAYLOGIC ENT: September 30 Balance Sheet Upside-Down by $7.4 Mil.
------------------------------------------------------------------
Playlogic Entertainment Inc. reported a $4.6 million net loss on
$1.5 million of revenues for the quarter ended Sept. 30, 2006,
compared with a $1.3 million net loss on $542,579 of revenues for
the same period in 2005.
The $918,615 increase in revenues is mainly due to the release of
the PC game Age of Pirates: Caribbean Tales.
The increase in net loss is primarily due to the $202,007 increase
in selling, marketing, general and administrative expense, the
$979,132 increase in research and development expenses, the
$380,238 increase in interest expenses, a $1.2 million loan
penalty expense and exchange losses of $360,471. In the prior
period quarter, the company recorded reorganization expenses of
$255,155, absent in 2006.
Research and development expenses increased due to the fact that a
lower portion of research and development expenses was
capitalized.
At Sept. 30, 2006, the company's balance sheet showed $8.5 million
in total assets and $15.9 million in total liabilities, resulting
in a $7.4 million total stockholders' deficit.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with $2.8 million in total current assets
available to pay $15.7 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2006, are available for
free at http://researcharchives.com/t/s?17ba
Going Concern Doubt
S. W. Hatfield, CPA, expressed substantial doubt about the
company's ability to continue as a going concern after auditing
the company's financial statements for the year ended Dec. 31,
2005. The auditor pointed to the company's net operating losses
and reliance on outside sources of working capital to meet current
obligations.
About Playlogic Entertainment
Playlogic Entertainment, Inc., publishes interactive entertainment
products, such as video game software and other digital
entertainment products. The company publishes for most major
interactive entertainment hardware platforms, like Sony's
PlayStation2, Microsoft's Xbox and Nintendo's Game Cube, PCs, next
generation consoles and handheld (such as Nintendo's Game Boy,
Nintendo DS, and PSP) and mobile devices.
PREFERREDPLUS TRUST: El Paso Action Prompts S&P's Positive Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' ratings on the
class A and B notes issued by PreferredPLUS Trust Series ELP-1 on
CreditWatch with positive implications.
The rating actions reflect the Dec. 22, 2006, placement of the
senior unsecured debt ratings on El Paso Corp. on CreditWatch with
positive implications.
PreferredPLUS Trust Series ELP-1 is a swap-independent synthetic
transaction that is weak-linked to the underlying collateral, El
Paso Corp.'s senior unsecured debt. The rating actions reflect
the credit quality of the underlying securities issued by El Paso
Corp.
REVLON INC: Subsidiary Refinances Bank Credit Agreement
-------------------------------------------------------
Revlon, Inc.'s wholly-owned operating subsidiary, Revlon Consumer
Products Corporation, consummated the refinancing of its existing
bank credit agreement.
Among other things, the new credit facilities will result in
annual interest savings due to lower interest margins and provide
the company with financial and other covenant flexibility, as well
as extend the maturity dates for RCPC's bank credit agreement to
January 2012.
Commenting on the announcement David Kennedy, president and chief
executive officer, stated, "I am delighted with this demonstration
of support by our lenders. This new credit agreement provides us
with additional liquidity and flexibility as we enter 2007 focused
on our core Revlon, Almay and Mitchum brands, while seeking to
continue to improve our cash flow."
As part of the refinancing, RCPC entered into a new 5-year
$840 million term loan facility, replacing the $800 million term
loan under RCPC's 2004 bank credit agreement. RCPC also amended
its existing $160 million multi-currency revolving credit facility
under its 2004 bank credit agreement and extended its maturity
through the same 5-year period.
The company indicated that the proceeds from the 2006 Credit
Facilities were used to repay in full approximately $800 million
of outstanding indebtedness under the term loan facility of RCPC's
2004 bank credit agreement, plus accrued interest and a prepayment
fee, with the balance of the proceeds being available for general
corporate purposes, after paying fees and expenses incurred in
connection with the 2006 Credit Facilities.
The interest rate on the 2006 Term Loan Facility, which was fully
drawn at the closing, was reduced from LIBOR plus 6% to LIBOR plus
4%. The interest rate on the 2006 Revolving Credit Facility, of
which approximately $57 million was drawn at the closing, was
reduced from LIBOR plus 2.5% to LIBOR plus 2%.
The 2006 Term Loan Facility is guaranteed and secured by
substantially the same collateral package and guarantees that
secured the term loan facility of RCPC's 2004 bank credit
agreement, and the 2006 Revolving Credit Facility continues to be
guaranteed and secured by its existing collateral package and
guarantees.
Revlon Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a
cosmetics, skin care, fragrance, and personal care products
company. The Company's brands include Revlon(R), Almay(R), Vital
Radiance(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R).
* * *
At Sept. 30, 2006, Revlon Inc.'s balance sheet showed $925 million
in total assets and $2.150 billion in total liabilities, resulting
in a $1.225 billion stockholders' deficit.
SAINT VINCENTS: Can Proceed with Asset Purchase Pact Amendment
--------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates obtained permission from the U.S. Bankruptcy
Court for the Southern District of New York to enter into an
amendment of an asset purchase agreement governing the sale of the
School of Allied Professions Business and related assets to St.
John's University, New York, dated July 28, 2006.
Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New
York, informed Judge Hardin that it is taking longer than the
Debtors and St. John's University expected to obtain regulatory
consent from the United States Department of Education regarding
the continued ability of the business to participate in certain
federal educational funding program.
Mr. Troop disclosed that the Debtors' ability to acquire certain
real property that the Asset Purchase Agreement requires the
Debtors to convey to St. John's University as part of the
transaction expires on December 29, 2006.
According to Mr. Troop, the Debtors and St. John's University have
reached an agreement that will permit St. John's University to
acquire the real property while the parties continue to work to
obtain the Regulatory Consent. Once that consent is obtained,
St. John's University will acquire the remaining assets. If the
consent is not obtained within a certain period, St. John's
University may elect either to pay the entire original purchase
price and obtain the property, or cause the Debtors to purchase
the real property for the amount St. John's University has paid.
Mr. Troop explained that the arrangement permits the Debtors to
preserve a valuable right, namely the ability to acquire the real
property, while maintaining the viability of the overall
transaction with St. John's University.
A full-text copy of the first amendment to the Asset Purchase
Agreement is available for free at:
http://researcharchives.com/t/s?1792
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 42 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SAINT VINCENTS: Wants Rego Park Lease Extended
----------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates seek authority from the U.S. Bankruptcy Court
for the Southern District of New York to:
a) extend their lease for a nonresidential real property
located in Rego Park, New York, as amended;
b) assume the Amended Lease; and
c) assign a portion of the Amended Lease to Caritas Health
Care Planning, Inc.
Saint Vincent Catholic Medical Center, as successor in interest to
Catholic Medical Center of Brooklyn and Queens, Inc., and Queens
Office Tower Limited Partnership are parties to a lease agreement
dated as of June 21, 1996.
Pursuant to the Lease, the Debtors occupy office space on the
entire third and fourth floors of a nonresidential real property
located at 95-25 Queens Boulevard, in Rego Park, New York. The
Debtors utilize the Fourth Floor to house the corporate offices of
their home health care agency.
The Debtors also lease from Queens Office:
(a) part of the first floor and the entire second floor of
Queens Tower pursuant to certain standard form of office
lease, dated November 12, 1993; and
(b) part of the fifth floor pursuant to a certain standard
form of office lease, dated September 13, 1999.
In light of the sale of Mary Immaculate Hospital, Queens, St.
John's Hospital, Queens, and related assets and operations to
Caritas, SVCMC and Caritas entered into a license agreement
granting Caritas a revocable license for use of a majority of the
Third Floor of Queens Tower as an administrative office. SVCMC
reserved from the Licensed Area a small space on the Third Floor
to house its Professional Registry group.
In consideration for the license to use the Licensed Area on a
month-to-month basis, Caritas agreed to pay:
-- $34,957 per month during the period commencing October 1,
2006;
-- $49,522 per month during the period commencing January 1,
2007 or, if the fixed rent under the Lease should be in an
amount other than $106,271 per month, an amount equal to
46.6% of the monthly rent;
-- to SVCMC an amount equal to 46.6% of additional rent
payable by SVCMC as tenant under the Lease and all other
charges other than additional rent payable by SVCMC for
services provided to the Licensed Area; and
-- its share of telephone and computer charges and office
supplies.
Pursuant to the order approving the sale of the Queens Assets, as
of the closing date of the Queens Sale, the Lease, the First and
Second Floor Lease, and the Fifth Floor Lease will be assigned to
Caritas in their entirety unless SVCMC, Queens Office, and
Caritas agree to any modifications.
Mr. Troop discloses that SVCMC wants to retain possession of the
Fourth Floor of the Premises and assign only the Third Floor of
the Premises to Caritas. Caritas is amenable to that.
According to Mr. Troop, the Debtors believe it is necessary to
extend and assume the Lease prior to its expiration on Dec. 31,
2006, so that it may be assigned, in part, to Caritas on or
before the Closing Date.
After arm's-length negotiations, the Debtors reached an agreement
in principle with Queens Office, which provides that:
(1) the Debtors will extend the Lease for a term of three
years and nine months beginning January 1, 2007;
(2) the Debtors have the option to terminate the Lease as to
each or both of the Third Floor and the Fourth Floor upon
six months notice to Queens Office;
(3) the Debtors may assign the Third Floor to Caritas, subject
to the Court's approval and the execution and delivery to
Queens Office by Caritas of an assumption agreement;
(4) upon the assignment of the Third Floor to Caritas, the
Lease, will be deemed to be subdivided into two separate
leases, one in favor of Caritas, covering the Third Floor,
and one in favor of SVCMC, covering the Fourth Floor;
(5) upon the assignment of the Third Floor to Caritas, SVCMC
will be relieved of its obligations under the Lease, as
amended, with respect to the Third Floor; and
(6) rent under the Amended Lease for the Third and Fourth
Floors will be $106,000 per month plus additional rent
comprised of, among other things, utility and repair
charges.
As a result of the assignment, each of SVCMC and Caritas will be
obligated for one-half of the fixed rent reserved by the Amended
Lease.
A full-text copy of the Amendment to the Lease is available for
free at http://researcharchives.com/t/s?1793
Mr. Troop explains that the request should be granted because:
* SVCMC will be released from all future obligations
relating to the Third Floor and will only remain liable
for the new Fourth Floor Lease;
* the assumption of the Lease and assignment of the new
Third Floor Lease will facilitate the transfer of
operations relating to the Queens Assets to Caritas as
contemplated by the Queens Purchase Agreement;
* the Debtors have determined that their continued
occupation of the Fourth Floor for the next three years
will avoid the significant costs that would accompany
relocation to a new, suitable location and any
interruption in the administrative affairs of the home
health care office which would accompany a relocation; and
* the Debtors believe that, as compared with other leases
available in the marketplace, the rental obligations under
the Lease, as amended, are reasonably priced, especially
in light of the early termination and assignment options.
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 42 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SONTRA MEDICAL: Ceases Operations Due to Insufficient Capital
-------------------------------------------------------------
Sontra Medical Corporation will cease operations because it has
been unable to raise additional capital. Sontra previously said
that it had sufficient cash to continue operations until December
31, 2006. The Company had been working on seeking additional
capital and the possible completion of a merger transaction;
however, the Company has not been successful in completing a
financing or transaction.
As reported in the Troubled Company Reporter on Nov. 23, 2006,
over the past year, the company has experienced a decline in
investors interested in making an investment in the company. If
it does not raise additional capital by Dec. 31, 2006 (as debt or
equity), then the company will run out of cash and will be unable
to continue operations. Sontra is continuing to pursue additional
capital through several potential identified investors but have
not received a commitment for financing at this time. If it does
not raise additional capital, the Board of Directors of the
company may decide to initiate an orderly wind-down of business
operations or to file for bankruptcy protection under the U.S.
Bankruptcy Code. In the event that the company winds down or
files for bankruptcy, there would likely be little or no proceeds
available for its stockholders.
The company intends to terminate all employees, and through an
orderly wind-down of its operations, pay its current liabilities
and make appropriate accommodations for creditors. The company's
Chief Executive Officer, Thomas Davison, will continue as Acting
Chief Executive Officer on a part-time consulting basis, and the
Company's Chief Financial Officer, Harry G. Mitchell, will
continue as Acting Chief Financial Officer on a part-time
consulting basis. Messrs. Davison and Mitchell intend to continue
to pursue financing for the company, while exploring the sale of
the Company's remaining assets, including its intellectual
property portfolio.
Voluntary Nasdaq Delisting
In connection with Sontra's decision to cease operations, Sontra
has elected to voluntarily delist from the Nasdaq Capital Market.
The company has provided a voluntary delisting notice to the
Nasdaq Stock Market. On Nov. 22, 2006, the company received a
notice from the Nasdaq Stock Market indicating that the company
was not in compliance with Nasdaq's requirements for continued
listing under Marketplace Rule 4310(c)(2)(B) because the Company
did not have either:
(i) a minimum of $2,500,000 in stockholders' equity as of
Sept. 30, 2006,
(ii) at least $35,000,000 market value of listed securities, or
(iii) at least $500,000 of net income from continuing operations
for the most recently completed fiscal year or two of the
three most recently completed fiscal years.
On Dec. 7, 2006, the company submitted a plan to Nasdaq explaining
how it intended to achieve and sustain compliance with all the
Nasdaq Capital Market listing requirements. As of this time, the
Company has been unable to complete its plan, which included
completing a financing or merger transaction, and has therefore
not regained compliance with Marketplace Rule 4310(c)(2)(B).
In addition, on Oct. 17, 2006, the company received a deficiency
letter from the Nasdaq Stock Market indicating that the company
was not in compliance with Marketplace Rule 4310(c)(4) because for
the previous 30 consecutive business days, the bid price had
closed below the $1.00 minimum per share requirement for continued
listing set forth in Marketplace Rule 4310(c)(4). The company has
not regained compliance with Marketplace Rule 4310(c)(4).
Sontra has not arranged for the listing of its common stock on
another national securities exchange or for the quotation of its
common stock in a quotation medium.
The Company's quotation for its common stock is expected to appear
in the "Pink Sheets" under the symbol "SONT." The Company's
common stock may also be quoted in the future on the OTC Bulletin
Board provided a market maker files the necessary application with
the NASD and such application is cleared.
About Sontra Medical
Based in Franklin, Massachusetts, Sontra Medical Corporation
(Nasdaq: SONT) -- http://www.sontra.com/-- develops platform
technology for transdermal science. In addition, the Company owns
technology for transdermal delivery of large molecule drugs and
vaccines.
SPECTRX INC: September 30 Balance Sheet Upside-Down by $10.2 Mil.
-----------------------------------------------------------------
Spectrx Inc. reported a $1.11 million net loss on $457,000 of net
revenues for the quarter ended Sept. 30, 2006, compared with a
$1.15 million net loss on $174,000 of net revenues for the same
period in 2005.
Revenue increased to $457,000 for the quarter ended Sept. 30,
2006, from $174,000 for the same period in 2005. Revenue was
higher due to the increase in contract revenue on the company's
interstitial fluid technology.
At Sept. 30, 2006, the company's balance sheet showed $1.6 million
in total assets and $11.7 million in total liabilities, resulting
in a $10.2 million total stockholders' deficit.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with $931,000 in total current assets available
to pay $11.7 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2006, are available for
free at http://researcharchives.com/t/s?17bb
Going Concern Doubt
Eisner LLP expressed substantial doubt about SpectRx Inc.'s
ability to continue as a going concern after it audited the
company's financial statements for the fiscal year ended Dec 31,
2005. The auditing firm pointed to the company's recurring
losses, negative working capital position and a capital deficit.
The company is also in default on payments due under its
settlement with Abbott Laboratories, Inc., regarding its
redeemable preferred stock agreement.
About SpectRx Inc
SpectRx, Inc. (OTCBB: SPRX) is a diabetes management company
developing and providing innovative solutions for insulin delivery
and glucose monitoring. SpectRx hosts three Web sites at
-- http://www.spectrx.com/--; -- http://www.mysimplechoice.com/
-- and -- http://www.guidedtherapeutics.com/--
SpectRx markets the SimpleChoice(R) line of innovative diabetes
management products, which include insulin pump disposable
supplies. SpectRx also plans to develop a consumer device for
continuous glucose monitoring. The company is commercializing its
non-invasive cancer detection technology through subsidiary
company Guided Therapeutics, Inc., which SpectRx intends to
separately finance with private funds.
TAG ENTERTAINMENT: Posts $1.4 Million Loss in 2006 Third Quarter
----------------------------------------------------------------
Tag Entertainment Corp. reported a $1.4 million net loss on
$251,000 of total revenues for the quarter ended Sept. 30, 2006,
compared with $589,000 of net income on $1.7 million of total
revenues for the same period in 2005.
The decrease in revenues was principally attributable to the
decrease in production and fees arising from film projects where
the company was engaged to manage filming and related production
activities on behalf of certain investor partnerships.
The net loss is primarily attributable to the decrease in revenues
and the increase in selling, general and administrative expenses
of $687,000 offset by decreases in amortization of film costs of
$410,000.
The increase in selling, general and administrative expenses is
primarily attributable to an increase of $787,000 in a bad debt
allowance due to slow and less than anticipated collections on the
previously released Supercross and Popstar movies, an increase in
consulting expenses of $66,000, an increase in legal fees of
$15,000, and an increase in accounting/auditing fees of $13,000.
These increases were offset by a decrease in payroll and staffing
cost of $81,000, a decrease in marketing and investor relations
costs of $36,000, a decrease of $34,000 in travel and
entertainment, a decrease in rent expense of $19,000, and a
decrease in overall corporate office expenses of approximately
$24,000.
At Sept. 30, 2006, the company's balance sheet showed $7.8 million
in total assets, $7.2 million in total liabilities, and $2 million
in minority interest, resulting in a $1 million total
stockholders' deficit.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2006, are available for
free at http://researcharchives.com/t/s?17b5
Going Concern Doubt
As reported in the Troubled Company Reporter on April 25, 2006,
A.J. Robbins, PC, in Denver, Colorado, raised substantial doubt
about TAG Entertainment Corp.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditors pointed
to the company's recurring losses and negative cash flows from
operations.
About TAG Entertainment
TAG Entertainment Corp. -- http://www.tagentertainment.com/-- and
its wholly owned subsidiary, TAG Entertainment USA, Inc., are
independent producers of family oriented feature films, television
programming and other entertainment products for theatrical,
television and home video distribution. In 2004, the company
produced 21 episodes of the television series Arizona Highways:
The Television Series for local broadcast.
TAUBMAN CENTERS: S&P Withdraws Low-B Ratings
--------------------------------------------
Standard & Poor's Ratings Services withdrew its 'BB+' corporate
credit rating assigned to Taubman Centers Inc. and all other
Taubman-related ratings, including the 'B+' preferred stock
rating affecting $187 million in preferred stock.
Standard & Poor's is withdrawing its ratings because the company
recently disclosed that Standard & Poor's will no longer have
access to the portfolio-level information necessary for it to
perform their analyses, and the rating agency will no longer have
the opportunity to periodically meet with members of Taubman's
senior management team.
Additionally, Taubman no longer has publicly rated unsecured debt
securities outstanding, and it is Standard & Poor's understanding
that the company does not intend to reenter the public unsecured
debt market in the foreseeable future.
Bloomfield Hills, Michigan-based Taubman is an operator of
regional malls with a market capitalization of roughly
$4.8 billion. Taubman's portfolio is composed largely of
high-quality regional malls, including its flagship property, The
Mall at Short Hills in northern New Jersey.
Standard & Poor's ratings have previously acknowledged that
Taubman has one of the most productive mall portfolios in the
U.S., with tenant sales in excess of $500 per square feet, as well
as an improving financial profile that has largely resulted from
robust operating performance and favorable financing activity.
These credit strengths have historically been tempered by the
company's more aggressive capital structure, with higher leverage
levels, and the possibility that Taubman would make a meaningful
investment into new markets abroad.
Ratings Withdrawn
Taubman Centers Inc.
Taubman Realty Group L.P.
Rating
------
To From
-- -----
Corporate credit NR BB+/Stable/--
Preferred stock NR B+
THAXTON GROUP: Wants Lease Decision Period Extended to May 30
-------------------------------------------------------------
The Thaxton Group, Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend, until May
30, 2007, the period within which they can assume, assume and
assign, or reject unexpired leases of nonresidential real
property.
As reported in the Troubled Company Reporter on July 25, 2006, the
Debtors disclose that they have reviewed and analyzed real
property leases in connection with their going-forward business
plan. As of June 2006, the Debtors are party to approximately 193
unexpired leases.
The Debtors remind the Court that they have focused their time
negotiating and drafting their proposed plan and discussed the
course of action with the parties-in-interest.
The Debtors need additional time to evaluate the leases in the
context of their plan.
The Debtors also argue that if the extension isn't granted, then
they would be compelled to either:
a. assume large, long-term liabilities which would create
substantial administrative expense claims, or
b. forfeit leases which would otherwise have given additional
value to the estates.
A list of the Debtors' unexpired nonresidential property leases is
available for free at http://ResearchArchives.com/t/s?66c
Headquartered in Lancaster, South Carolina, The Thaxton Group,
Inc., is a diversified consumer financial services company.
The Company filed for Chapter 11 protection on Oct. 17, 2003
(Bankr. Del. Case No. 03-13183). Daniel B. Butz, Esq.,
Michael G. Busenkell, Esq., and Robert J. Dehney, Esq., at
Morris, Nichols, Arsht & Tunnell, represent the Debtors in their
restructuring efforts. Alan Kolod, Esq., at Moses & Singer LLP,
represents the Offical Committee of Unsecured Creditors. As of
Dec. 31, 2005, the Debtors reported assets totaling $98,889,297
and debts totaling $175,693,613.
TRINSIC INC: Sept. 30 Balance Sheet Upside-Down by $15.3 Million
----------------------------------------------------------------
Trinsic Inc. filed its financial statements for the quarter ended
Sept. 30, 2006, with the Securities and Exchange Commission on
Dec. 21, 2006.
At Sept. 30, 2006, the company's balance sheet showed
$34.6 million in total assets and $49.9 million in total
liabilities, resulting in a $15.3 million total stockholders'
deficit.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with $14.3 million in total current assets
available to pay $49.4 million in total current liabilities.
Trinsic Inc. had a $1.4 million net loss on $38.5 million of
revenues for the quarter ended Sept. 30, 2006, compared with a
$4.5 million net loss on $44 million of revenues for the same
period in 2005.
The decrease in revenues is mainly due to the decrease in
wholesale segment revenues from $10 million in the 2005 quarter to
$400,000 in the current quarter. This is mainly due to the
termination of the company's wholesale operations.
The company had an $11.4 million operating loss in the current
quarter, versus a $1.8 million operating loss in the prior year
quarter, primarily due to the decrease in revenues and the
increase in operating expenses. The increase in operating
expenses is mainly due to a $2.6 million impairment charge on the
company's VoIP assets, and the $2.9 million increase in
depreciation and amortization expenses related to the company's
customer list intangible that was created upon the acquisition of
the Sprint lines in 2006.
The company however reported a decrease in net loss due to an
$8.2 million gain from a legal settlement and $2.6 million of
proceeds from the sale of access lines to Access Integrated.
The legal settlement pertains to the settlement with an ILEC over
disputed balances that reduced accounts payable balance by $12.1
million. The company paid a total of $3.9 million. The
settlement, which was contingent upon final payment of the full
$3.9 million, resulted in a net gain of approximately $8.2
million.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2006, are available for
free at http://researcharchives.com/t/s?17af
Recent Developments
Pursuant to a definitive agreement with Sprint dated Oct. 25,
2005, the company acquired 111,697 UNE-P local access lines from
Sprint for which the company previously provided services on a
wholesale basis. Under the agreement the company purchased the
lines for $11.2 million, $5.5 million of which has been paid as of
Sept. 30, 2006. The total purchase price includes $1.3 million
that was escrowed during the latter part of 2005. The remaining
purchase price will be paid in monthly installments through July
2007.
On Mar. 3, 2006, the company terminated the employment of
approximately 118 employees. All post termination wages and
salaries were paid out as of April 7, 2006.
On Aug. 8, 2006 and Sept. 6, 2006, the company completed the sale
of 13,439 and 13,923 local access lines to Access Integrated
Networks Inc., a privately-held telephone company headquartered in
Macon, Georgia. The sales price for these lines was $2.6 million.
On Oct. 23, 2006, the company entered into a definitive agreement
to sell approximately 300 of its VoIP-based lines to CommX
Holdings Inc., a privately-held provider of business-class voice
services, headquartered in Tampa, Florida. The lines, located in
Tampa, Florida and New York City, represent all of the company's
VoIP-based business. The total purchase price will depend upon
the number of lines in service at the time of closing.
About Trinsic Inc.
Trinsic Inc. (OTCBB: TRIN) -- http://www.trinsic.com/-- provides
residential and business telecommunications services. The company
offers local and long distance telephone services in combination
with enhanced communications features accessible through the
telephone, the internet and certain personal digital assistants.
WOODWIND & THE BRASSWIND: Taps Fort Dearborn as Fin'l Advisors
--------------------------------------------------------------
Dennis Bamber, Inc. dba The Woodwind & the Brasswind asks
permission from the U.S. Bankruptcy Court for the Northern
District of Indiana to employ Vito Mitria, Jeffrey E. Schneiders
and John L. Waller of Fort Dearborn Advisors, LLC, as its
financial advisors and investment bankers.
Fort Dearborn will:
a. give the Debtor complete financial evaluation and analysis
in developing an overall strategy for the sale of the
Debtor's assets and business consistent with its powers and
duties as debtor-in-possession;
b. assist in the preparation of an information memorandum
designed to introduce potential purchasers to the marketing
opportunity offered;
c. assist the Debtor in identifying and screening potential
purchasers;
d. with the approval of the Debtor, initiate contact at senior
levels with potential purchasers and coordinate review
process of the Debtor's assets and business with interested
and qualifying parties;
e. participate in the structuring and negotiating of offers to
purchase the Debtor's assets, including serving as an expert
witness in support of the Debtor's sale and marketing
efforts and feasibility of any offers to be submitted to the
Court for approval at a sale hearing; and
f. take other actions as may be necessary on behalf of the
Debtor in connection with the case.
Howard L. Adelman, Esq., one of the Debtor's counsel, disclosed
that pursuant to an Engagement Letter dated Oct. 23, 2006, the
compensation arrangements are:
a. non-refundable retainer fees of $50,000 on the 1st and 15th
day of each month, up to the aggregate amount of $400,000.
Prior to the commencement of the Chapter 11 case, Fort
Dearborn received prepayments from the Debtor of $100,000 on
Nov. 10, 2006 and $50,000 on Nov. 15, 2006.
b. a "Success Fee" payable in cash upon closing of a sale equal
to 2% of the transaction amount;
c. a minimum "Success Fee" of $600,000 provided that the sale
closes.
Mr. Adelman assures the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code and does not hold or represent any interest
adverse to the Debtors' estates.
About The Woodwind & The Brasswind
Headquartered in South Bend, Indiana, Dennis Bamber, Inc. dba The
Woodwind & The Brasswind sells musical instruments through its
retail store, catalogs and Internet sites. The company filed for
chapter 11 protection on Nov. 21, 2006 (Bankr. N.D. Ind. Case No.
06-31800). Howard L. Adelman, Esq., at Adelman & Gettleman, Ltd.,
in Chicago, Illinois, represents the Debtor. When the Debtor
filed for protection from its creditors, it estimated assets and
debts between $1 million and $100 million.
* BOOK REVIEW: American Arbitration: Its History, Functions and
Achievements
---------------------------------------------------------------
Author: Frances Kellor
Publisher: Beard Books
Paperback: 280 pages
List Price: $34.95
Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1893122581/internetbankrupt
Francis Kellor's American Arbitration: Its History, Functions and
Achievements covers the rise of the Armerican Arbitration
Association and the beginneings of the important role that
arbitration has come to play in the commercial arena.
This book makes for interesting reading as it traces the two
pioneer organizations that consolidated in 1926 to form the
American Arbitration Association.
The role and influence of the Association in its first twenty
years of existence are noteworthy as the book covers the practice
of American arbitration and the American concept and organization
of international commercial arbitration.
The final chapter is devoted to the builders of American
arbitration.
*********
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 ***