/raid1/www/Hosts/bankrupt/TCR_Public/070116.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, January 16, 2007, Vol. 11, No. 13
Headlines
ADELPHIA COMMS: Plan Effective Date Gets Extended Until Jan. 19
ADVANCED MARKETING: Wants to Employ Richards Layton as Counsel
ADVENTURE PARKS: Exclusive Plan-Filing Period Stretched to May 9
AGILENT TECH: S&P Lifts Corporate Credit Rating to BBB- from BB+
AHERN RENTALS: Prices 2nd Priority Sr. Notes Offering at $90 Mil.
AMCAST INDUSTRIAL: Cedarburg Property Sale Hearing Set on Jan. 22
AMCAST INDUSTRIAL: Disclosure Statement Hearing Slated for Jan. 22
AMCAST INDUSTRIAL: Court Sets February 15 Admin. Claims Bar Date
AMERICAN CAMSHAFT: Court Approves KCC as Claims & Noticing Agent
ANN-LEE CONSTRUCTION: Case Summary & 20 Largest Unsec. Creditors
ANVIL KNITWEAR: Court Confirms Amended Plan of Reorganization
APPLICA INC: Asks Holders to Reject Amended NACCO Tender Offering
ARAMARK: $500 Mil. Term Loan Add-on Cues S&P to Hold 'B+' Rating
ARAMARK CORP: Moody's Holds Ba3 Rating on Proposed $4.15 Bil. Loan
ASARCO LLC: Hires Marten Law as Omaha Environmental Counsel
ASARCO LLC: Wants Keegan Linscott's Scope of Services Expanded
ATLAS AIR: Distributes Common Stock Under Plan of Reorganization
BANC OF AMERICA: Fitch Junks Rating on Class B-5 Certificates
BEAR STEARNS: S&P Cuts Rating on Loan Classes M-9A and M-9B to BB
CALPINE CORP: Gets OK on 2nd Lien Debt Adequate Protection Payment
CARAUSTAR INDUSTRIES: Closes Lafayette Paperboard Mill
CATALYST PAPER: Board Accepts CEO and CFO Resignations
CATHOLIC CHURCH: Treatment of Claims Under Spokane's Joint Plan
CENDANT MORTGAGE: Fitch Holds Low-B Ratings on Various Certs.
CENTRAL DESIGN: Case Summary & 20 Largest Unsecured Creditors
CHENIERE ENERGY: Subsidiary Inks 2 Creole Trail Construction Pacts
COLLINS & AIKMAN: Court Approves Second Stipulation With Lear
COLLINS & AIKMAN: Four Parties Question Deal with Major Customers
COLLINS & AIKMAN: Judge Rhodes Approves ASC Inc. License Agreement
COUDERT BROTHERS: Court Okays McGrigors LLP as Special Counsel
COUDERT BROTHERS: Court Sets Jan. 31 as General Claims Bar Date
CREATIVE FOODS: Wants Access to First Tennessee's Cash Collateral
CWABS ASSET: Moody's Puts Ba1 Rating on Class B Certificates
DAIMLERCHRYSLER: Might Delay Releasing 2006 Financial Statements
DANA CORP: Trade Creditors Sell 203 Claims Totaling $31.7 Million
DANA CORP: Will Share Parts Production for Ford's F-150 Truck
DAVID'S BRIDAL: Moody's Places Corporate Family Rating at B2
EMI GROUP: Chairman & CEO Levy and Vice Chairman Munns Resign
ENERGY TRANSFER: First Fiscal Quarter Net Income Decreases to $71M
ENERGY TRANSFER: General Counsel and Secretary Robert Burk Resigns
EQUITY ONE: S&P Pares Rating on Class B-2 Loan to BB from BBB
FINISAR CORP: Receives Notice of Default from U.S. Bank
GENERAL MOTORS: Eyes Purchase of Stake in Malaysia's Proton
GLOBAL GEOPHYSICAL: S&P Junks Rating on Proposed $40 Million Loan
GOTTAPLAY INTERACTIVE: Recurring Losses Prompt Going Concern Doubt
HOLLINGER INC: Provides Update on Ravelston Corp. Proceedings
HOME PRODUCTS: Receives Court Approval for $60 Million DIP Loan
INNOVATIVE COMMS: Trustee Appointment Hearing Set for Friday
JENNIFER OK: Case Summary & 19 Largest Unsecured Creditors
KEVIN TRIPP: Case Summary & 12 Largest Unsecured Creditors
LE-NATURE INC: Todd Neilson Appointed as Chapter 11 Trustee
MAGNA INT'L: Sees Plant Closures and Consolidations in 2007
MAIDENFORM BRANDS: S&P Affirms Corporate Credit Rating at B+
MALDEN MILLS: Board OKs Sale of Company to Gordon Bros. for $44MM
MARCAL PAPER: Committee Wants Lowenstein Sandler as Counsel
MARCAL PAPER: Court Approves NatCity as Investment Banker
MARCAL PAPER: Gets Okay to Hire J.H. Cohn as Financial Advisors
MARCAL PAPER: Wants Andora & Romano as Tax Appeals Counsel
MELO BIOTECH: Has CDN$298,318 Stockholders' Deficit at Sept. 30
MESABA AVIATION: Committee Wants Exclusive Period Modified
MESABA AVIATION: Riley & Thales Object to Panel's Exclusivity Plea
MODAVOX INC: Earns $53,708 in 2006 Second Quarter Ended August 31
MORGAN STANLEY: S&P Holds Rating on $3 Mil. Class A-7 Notes at B
NEW YORK WESTCHESTER: Court Approves Donlin Recano as Claims Agent
NEW YORK WESTCHESTER: U.S. Trustee Appoints Five-Member Committee
NEXEN INC: S&P Affirms Subordinated Debt Rating at 'BB+'
NOMURA ASSET: Fitch Holds BB Rating on Class B4 S. 2003-A1 Certs.
NORTH ATLANTIC: Moody's Cuts Rating on $35 Mil. Senior Notes to Ca
NYU HOSPITALS: S&P Rates $167.8 Million Series 2007A Bonds at BB
PACER HEALTH: Subsidiary Closes on Hospital Operating Lease Pact
PANTRY INC: Reports Lower Gas Margins for Quarter Ended Dec. 28
PHOTRONICS INC: Posts $29.3 Million Net Income in Fiscal 2006
PINNACLE ENT: Reports 10 Mil. New Shares Priced at $32 Per Share
PORTOLA PACKAGING: Nov. 30 Balance Sheet Upside-Down by $88 Mil.
PROPEX INC: Moody's Holds Junk Rating on $150 Million Senior Debt
Q.E.P. CO: Discloses Violation of Financial Covenant
QUEST MINERALS: Gets Kentucky Permit to Conduct Mining Operations
REFCO INC: Court Reduces Seven Deficient Claims to Zero
REFCO INC: Trustee Wants More Time to File List of Securities
RIGEL CORP: Chapter 7 Trustee Hires Cavanagh as Special Counsel
RIGEL CORP: Trustee Gets Court OK to Hire KPMG as Tax Accountant
SAID VEDAD: Case Summary & 3 Largest Unsecured Creditors
SCOTT'S MIRACLE: Moody's Lowers Corporate Family Rating to Ba2
SHAW COMMUNICATIONS: Acquires Mascon's B.C. Cable Operations
SHAW COMMS: Board Declares Dividends on Class A and B Shares
SHAW COMMS: Earns CDN$84.1 Million in Quarter Ended November 30
SMART MODULAR: Amends Loan Agreement with Wells Fargo Foothill
SONIC CORP: Moody's Withdraws Low-B Corporate Ratings
SPECIALTY FILAMENTS: Mulls Chapter 7 Bankruptcy Filing
STANDARD MGT: Posts $10.8 Mill. Net Loss in Quarter Ended Sept. 30
SUNSTATE EQUIPMENT: S&P Lifts Corp. Credit Rating to B+ from B
TERWIN MORTGAGE: S&P Junks Rating on Class B-8 Certificate
VENTAS INC: Acquiring Sunrise Senior Living REIT for CDN$2.1 Bil.
VISTEON CORP: Inks Exclusive Retail Distribution Accord With AGT
VISTEON CORP: Sees Challenging 2007 but Improved 2008 Production
VOLT INFORMATION: Earns $30.7 Million in Fiscal Year Ended Oct. 29
VWE GROUP: District Judge Says Malpractice Suit Not "Core" Process
W.R. GRACE: Hires Ogilvy Renault as Canadian Special Counsel
W.R. GRACE: Reaches Settlement Pacts with AIG and Zurich Insurance
* Large Companies with Insolvent Balance Sheets
*********
ADELPHIA COMMS: Plan Effective Date Gets Extended Until Jan. 19
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in Adelphia
Communications Corporation and its debtor-affiliates' bankruptcy
cases informed the ACOM Debtors that the settlement parties have
extended the deadline for the effective date contained in Section
12.2(c) of the ACOM Debtors' first modified fifth amended joint
Chapter 11 plan of reorganization from Jan. 12, 2007, to Jan. 19,
2007.
As reported Troubled Company Reporter on Jan. 9, 2007, the
Honorable Robert E. Gerber of the U.S. Bankruptcy Court for the
Southern District of New York entered an order confirming the
First Modified Fifth Amended Plan.
Under the Federal Rules of Bankruptcy Procedure, the order is
subject to a stay pending appeal, which will expire on Jan. 16,
2007. If no additional stay is issued, the ACOM Debtors expect
the Plan to become effective on Jan. 17, 2007.
The Plan was jointly proposed by the ACOM Debtors, the Unsecured
Creditors Committee, and bank lender agents Wachovia Bank, N.A.,
the Bank of Montreal, and the Bank of America, N.A.
A full-text copy of the First Modified Fifth Amended Plan is
available for free at http://ResearchArchives.com/t/s?16ee
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.
ADVANCED MARKETING: Wants to Employ Richards Layton as Counsel
--------------------------------------------------------------
Advanced Marketing Services Inc. and its debtor-affiliates seek
the authority of the United States Bankruptcy Court for the
District of Delaware to employ Richards, Layton & Finger, P.A. as
their local bankruptcy counsel, nunc pro tunc to Dec. 29, 2006.
Richards Layton will be performing extensive legal services that
will be necessary during the Chapter 11 proceedings.
Aside from the firm's extensive knowledge in the field of
debtors' and creditors' rights and business reorganizations, the
Debtors also desire to employ Richards Layton because of its
expertise, experience and knowledge in practicing before the
Delaware Bankruptcy Court, its proximity to the Court and its
ability to respond quickly to emergency Court matters.
Richards Layton began providing legal services and advice to the
Debtors since December 2006. During the firm's representation
period, it has acquired knowledge of the Debtors' business,
financial affairs and capital structure.
The Debtors believe that Richards Layton is well qualified and
capable to efficiently represent them in the Chapter 11 cases.
As the Debtors' counsel, Richards Layton will:
(a) advise the Debtors of their rights, powers and duties as
debtors and debtors in possession;
(b) take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions,
the defense of any actions against the Debtors, the
negotiation of disputes involving the Debtors and the
preparation of objections to claims;
(c) prepare all necessary motions, applications, answers,
orders, reports and papers in connection with the
administration of the debtors' estates; and
(d) perform all other necessary legal services in connection
with the Chapter 11 cases.
Richards Layton will be paid on an hourly basis at its normal and
customary hourly rates, plus reimbursement of actual, necessary
expenses and other charges incurred:
Professional Hourly Rate
------------ -----------
Mark D. Collins $520
Paul N. Heath $350
Chun I. Pang $225
Aja E. McDowell $165
Mark D. Collins, Esq., a director at Richards Layton, reports
that prior to the filing of the bankruptcy case, the Debtors paid
the firm a $125,000 retainer.
The Debtors propose that the amount paid be treated as an
evergreen retainer to be held by the firm as security throughout
the Chapter 11 cases, until its fees and expenses are awarded.
Mr. Collins assures the Court that his firm is a "disinterested
person," as that term is defined in Section 101(14) of the
Bankruptcy Code, and does not hold or represent any interest
adverse to the estates.
About Advanced Marketing
Based in San Diego, California, Advanced Marketing Services, Inc.
-- http://www.advmkt.com/-- provides customized merchandising,
wholesaling, distribution and publishing services, currently
primarily to the book industry. The company has operations in the
U.S., Mexico, the United Kingdom and Australia and employs
approximately 1,200 people Worldwide.
The company and its two affiliates, Publishers Group Incorporated
and Publishers Group West Incorporated filed for chapter 11
protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480
through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron,
Esq., and Alexandra B. Feldman, Esq., at O'Melveny & Myers, LLP,
represent the Debtors. Chun I. Jang, Esq., Mark D. Collins, Esq.,
Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., are
the Debtors' local counsel. When the Debtors filed for protection
from their creditors, they listed estimated assets and debts of
more than $100 million. The Debtors' exclusive period to file a
chapter 11 plan expires on Apr. 28, 2007. (Advanced Marketing
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
ADVENTURE PARKS: Exclusive Plan-Filing Period Stretched to May 9
----------------------------------------------------------------
The Honorable John T. Laney, III, of the U.S. Bankruptcy Court for
the Middle District of Georgia, Valdosta Division, has extended
Adventure Parks Group LLC and its debtor-affiliates':
-- exclusive period to file a Plan of Reorganization until
May 9, 2007; and
-- exclusive period to solicit acceptances of a Plan through
July 9, 2007.
The Debtors tell the Court that they have implemented numerous
changes at their amusement parks designed, among other things, to
increase attendance and cut operating costs.
The Debtors argue that in order to prepare a Reorganization Plan,
they need to complete a business cycle at the amusement parks so
that the full effects of the implemented changes can be measured.
They say that prior to that time, they will not be able to
accurately project their income and expenses for the coming years
and their ability to service debt.
Headquartered in Valdosta, Georgia, Adventure Parks Group LLC is
the holding company of Wild Adventures and Cypress Gardens. Wild
Adventures operates an amusement park in Valdosta, Georgia, while
Cypress operates an amusement park in Winter Haven, Florida. The
Company, along with Wild Adventures and Cypress Gardens, filed for
chapter 11 protection on Sept. 11, 2006 (Bankr. M.D. Ga. Case
Nos. 06-70659 through 06-70661). George H. McCallum, Esq., James
P. Smith, Esq., and Ward Stone, Jr., Esq., at Stone & Baxter, LLP,
represent the Debtors. Mark J. Wolfson, Esq., at Foley & Lardner
LLP and James C. Frenzel, Esq., at James C. Frenzel P.C. in
Georgia represent the Official Committee of Unsecured Creditors.
When the Debtors filed for protection from their creditors, they
estimated assets and debts between $50 million and $100 million.
AGILENT TECH: S&P Lifts Corporate Credit Rating to BBB- from BB+
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Palo Alto, California-based Agilent Technologies Inc. to
'BBB-' from 'BB+', and removed it from CreditWatch, where it was
placed with positive implications on Dec. 6, 2006.
The rating outlook is stable.
"The upgrade reflects the recent completion of various strategic
actions, which have resulted in the transformation of Agilent into
a pure-play measurement company," said Standard & Poor's credit
analyst Ben Bubeck.
Agilent's remaining businesses, focused on electronic and bio-
analytical measurement, are expected to demonstrate lower
volatility than the previous portfolio, which included a
substantial exposure to the more-volatile semiconductor sector.
The rating on Agilent reflects an improved operating profile after
the divestiture of various business units, S&P's expectation for
improved and more stable operating margins, and a modest financial
risk profile. These are partially offset by a limited track
record of both performance and financial policy following
substantial divestitures and restructuring actions and
continued exposure to cyclical end markets.
With annual revenues of approximately $5 billion, Agilent is a
leading provider of electronic and bio-analytical measurement
solutions to the electronics, communications, life sciences, and
chemical analysis industries. Agilent had approximately
$1.8 billion of operating lease- and pension-adjusted debt as of
October 2006.
AHERN RENTALS: Prices 2nd Priority Sr. Notes Offering at $90 Mil.
-----------------------------------------------------------------
Ahern Rentals Inc. has priced an offering of $90 million aggregate
principal amount of its 9-1/4% second priority senior secured
notes due 2013 in a private offering under Rule 144A of the
Securities Act of 1933. The notes were priced at 103.75% of par,
representing a yield to maturity of 8.497%.
The offering is an add-on to the company's existing series
of 9-1/4% second priority senior secured notes due 2013,
$200 million aggregate principal amount of which was issued in
August 2005. The new notes and the existing notes will be treated
as a single class under the governing indenture.
The company intends to use the net proceeds from the offering to
repay a portion of outstanding indebtedness under its bank credit
facility and pay transaction fees and expenses. The offering of
the notes is expected to close on or about Jan. 17, 2007.
Ahern Rentals, headquartered in Las Vegas, Nevada, is a regional
equipment supplier with 35 branches predominately in the Mid-West
and West Coast regions. Original equipment cost was $516 million
at Sept. 30, 2006.
* * *
On Jan. 12, 2007, Moody's Investors Service affirmed the ratings
of Ahern Rentals Inc. after the company's recent report that it is
increasing the size of its second priority senior secured notes to
$275 million from $200 million at B3. Proceeds from the upsized
note issuance will be used to reduce outstanding under the
company's $250 million revolving credit facility.
AMCAST INDUSTRIAL: Cedarburg Property Sale Hearing Set on Jan. 22
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
will convene a hearing at 1:30 p.m. on Jan. 22, 2007, to consider
the sale of Amcast Industrial Corporation and Amcast Automotive of
Indiana Inc.'s real property in Ozaukee County, Wisconsin to the
highest bidder.
The hearing will be held at Room No. 329 at the U.S. Courthouse,
in Indianapolis, Indiana.
The Wisconsin Property, known as Cedarburg Real Estate, is a two-
parcel land consisting of a manufacturing facility, office
buildings, parking lots and other structures. The Debtors have
been marketing the Cedarburg Real Estate for over a year, with the
assistance of Keen Realty LLC.
Proceeds from the proposed sale of the Cedarburg Real Estate will
be used to pay down the Debtors' indebtedness to NexBank SSB,
which has a security interest and existing lien on the property.
To qualify, all bids must be submitted to and actually received
no later than 12:00 p.m. (CST) on Feb. 9, 2007, by counsel for the
Debtors:
Bracewell & Giuliani LLP
Attn: William A. "Trey" Wood, III
Suite 2300
711 Louisiana
Houston, TX 77002
Copies of the bids must be sent to the Debtor's real estate
consultant:
Keen Realty LLC
Attn: Matthew Bordwin
Suite 214,
60 Cutter Mill Road
Great Neck, NY 11021
Qualified bids must be accompanied by a good faith deposit to the
Debtors in the amount equal to 10% of the purchase price in cash
or cash equivalent funds which the Debtors will segregate from
other Debtor funds.
The Debtors propose to conduct a live auction on Feb. 13, 2007, at
the offices of Dann Pecar Newman & Kleiman P.C., Suite 2300, One
American Square, in Indianapolis, Indiana, and will commence at
10:00 a.m. Indianapolis, Indiana Time (EDT)
About Amcast Industrial
Headquartered in Fremont, Indiana, Amcast Industrial Corporation,
manufactures and distributes technology-intensive metal products
to end-users and suppliers in the automotive and plumbing
industry. The Company and four debtor-affiliates filed for
chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court
for the Southern District of Ohio confirmed the Debtors' Third
Amended Joint Plan of Reorganization on July 29, 2005. The
Debtors emerged from bankruptcy on Aug. 4, 2005.
Amcast Industrial Corporation and Amcast Automotive of Indiana,
Inc., filed for their second chapter 11 petitions on Dec. 1,
2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman,
Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman,
P.C., represent the Debtors in their restructuring efforts. Henry
A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP,
represent the Official Committee of Unsecured Creditors. Kevin I.
Dowd at Berkeley Square Group LLC serves as Amcast's financial
advisor. The Creditors' Committee receives financial advice from
Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its
affiliate filed for protection from their creditors, they listed
total assets of $97,780,231 and total liabilities of $100,620,855.
AMCAST INDUSTRIAL: Disclosure Statement Hearing Slated for Jan. 22
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
will convene a hearing on Jan. 22, 2007, at 1:30 p.m., to consider
the adequacy of Amcast Industrial Corp. and Amcast Automotive of
Indiana Inc.'s amended disclosure statement explaining their
Amended Joint Plan of Reorganization.
The hearing will be held at Room 329, U.S. Bankruptcy Court,
46 E. Ohio Street, in Indianapolis, Indiana.
Objections to the hearing are due tomorrow, Jan. 17, 2007.
At the hearing -- which is also the last day of the Debtors'
exclusivity periods -- if their Amended Plan is approved, the
Debtors will request:
a) a confirmation hearing on or about March 7, 2007; and
b) an exclusive period to solicit acceptances on the Amended
Plan until March 15, 2007.
The Amended Plan, as published in the Troubled Company Reporter on
Jan. 12, 2007, incorporates and constitutes a settlement and
compromise of any and all claims by and between the Debtors, the
Debtors' Estates and the Official Committee of Unsecured Creditors
on the one hand, and the Lenders on the other.
As part of the Settlement, cash on hand, which the Lenders claim a
lien on, will be distributed as:
* $7 million to the Term B Lenders,
* $2 million to the General Unsecured Creditors, excluding any
Allowed Unsecured Claims of the Lenders and General Motors
Corp., and
* $2 million to fund prosecution of the Estates' claims
against GM.
Any amount remaining from the cash on hand will be used to pay:
-- Allowed Administrative Expense Claims, including any
Allowed Administrative Claims under Section 503(b)(9) of
the Bankruptcy Code;
-- Allowed Priority Claims;
-- Allowed Priority Tax Claims;
-- the fees and expenses incurred in winding down the Estates
post-confirmation and pursuing the GM Causes of Action and
any other claims of the Estates against third parties,
including Chapter 5 Causes of Action; and
-- payment of GM's Allowed Class 6 and 7 Claims, if any, to
the extent the Claim is Allowed and not otherwise subject
to setoff.
Treatment of Claims
Under the Amended Plan, Administrative Claims, Priority Tax
Claims, and Priority Claims will be paid in full using the
Debtors' cash on hand.
The Debtors disclose that the Secured Claim of the Revolving
Lenders and Secured Claims of Term Loan A Lenders have been paid
in full. The Plan and Settlement will discharge, waive and enjoin
any claims or rights to seek disgorgement of any of those
payments.
The Allowed Claims of the Term Loan B Lenders will be allowed in
the amount of $52,907,107.23. NexBank, SSB, as administrative
agent for the Term Loan B Lenders, will receive these monies to be
applied in accordance with the Credit Agreement an initial
distribution on the effective date of $7 million from Cash on Hand
plus the Net Proceeds from sale or collection of all remaining
assets of the Estates including:
-- outstanding pre-petition accounts receivable,
including prepetition accounts receivable owed to the
Estates from GM,
-- tooling assets and tooling receivables,
-- inventory on hand not yet converted to Cash as of the
effective date,
-- Stowe, Pennsylvania real property,
-- Cedarburg real property,
-- Net Proceeds from Estates' Third Party Litigation
Claims, and Net Proceeds from Chapter 5 Causes of
Action, and
-- all Cash remaining after prosecution of all Claims of
and against the Estate.
Holders of Allowed Unsecured Claims, excluding any Allowed
Unsecured Claims of GM and Lenders, will receive their pro rata
portion of the $2 million from cash on hand. Provided, however,
if the Plan Proponents are unsuccessful in objecting to GM's Re-
Pricing Claim, the amount will be reduced to $1.75 million.
The Debtors tell the Court that "unsuccessful" is defined as a
determination by the Court, and not through settlement, that:
(a) GM has an Allowed Re-Pricing Claim and;
(b) the Estates are ordered to pay funds to GM on account of
GM's Allowed Re-Pricing Claim over and above any asserted
offsets the Estates may claim against the Re-Pricing
Claim.
Other Secured Claims will be paid in full using proceeds from the
sale of their Collateral or the return of their Collateral. Under
the Plan, Intercompany Claims will be extinguished.
Equity Interestholders will not receive any distribution on
account of their Equity Interests unless and until all other
classes are paid in full. Any assets remaining after payment in
full of all other claims will be distributed pro rata to the
Equity Interestholders. The Equity Interests will be canceled
upon dissolution of the Debtors.
GM's Claims
To the extent Allowed, and not subordinated, GM's Claim for re-
pricing and Allowed will be repaid in the same percentage as
Allowed Unsecured Claims unless GM's Allowed Re-Pricing Claim, if
any, is determined to be of a higher or lower priority. In this
case, the claim will be repaid in the same percentage as similar
level Claimants from these sources in this order:
* as an offset to pre-petition accounts receivable owed to the
Estates from GM, estimated to be approximately $4.3 million;
* as an offset against postpetition accounts receivable owed
to the Estates from GM, estimated to be approximately
$2 million;
* as an offset against tooling accounts receivable owed to the
Estates from GM, estimated to be approximately $3 million;
* as an offset against GM Causes of Action; and
* to the extent GM's Allowed Re-Pricing Claim exceeds all of
the foregoing, from cash on hand.
To the extent Allowed and not subordinated, GM's Allowed Unsecured
Claim will receive same percentage of distribution as Unsecured
Claim Holders payable:
* as an offset to prepetition accounts receivable owed to the
Estates from GM, estimated to be approximately $4.3 million;
* as an offset against postpetition accounts receivable owed
to the Estates from GM, estimated to be approximately
$2 million;
* as an offset against tooling accounts receivable owed to the
Estates from GM, estimated to be approximately $3 million;
* as an offset against GM Causes of Action; and
* to the extent GM's Pro Rata Distribution exceeds all of
the foregoing, from cash on hand.
About Amcast Industrial
Headquartered in Fremont, Indiana, Amcast Industrial Corporation,
manufactures and distributes technology-intensive metal products
to end-users and suppliers in the automotive and plumbing
industry. The Company and four debtor-affiliates filed for
chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court
for the Southern District of Ohio confirmed the Debtors' Third
Amended Joint Plan of Reorganization on July 29, 2005. The
Debtors emerged from bankruptcy on Aug. 4, 2005.
Amcast Industrial Corporation and Amcast Automotive of Indiana,
Inc., filed for their second chapter 11 petitions on Dec. 1,
2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman,
Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman,
P.C., represent the Debtors in their restructuring efforts. Henry
A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP,
represent the Official Committee of Unsecured Creditors. Kevin I.
Dowd at Berkeley Square Group LLC serves as Amcast's financial
advisor. The Creditors' Committee receives financial advice from
Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its
affiliate filed for protection from their creditors, they listed
total assets of $97,780,231 and total liabilities of $100,620,855.
AMCAST INDUSTRIAL: Court Sets February 15 Admin. Claims Bar Date
----------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
Indiana set Feb. 15, 2007, as the last day for creditors to file
requests for allowance and payment of any administrative claims
against Amcast Industrial Corporation and Amcast Automotive of
Indiana Inc.
The bar date applies to, among others, these entities:
a) vendors and suppliers;
b) former employees;
c) customers;
d) parties to assumed or rejected executory
contracts and unexpired leases;
e) taxing authorities and other governmental units; and
f) parties to lawsuits.
BMC Group Inc. is the Debtors' noticing and claims agent in these
cases.
About Amcast Industrial
Headquartered in Fremont, Indiana, Amcast Industrial Corporation,
manufactures and distributes technology-intensive metal products
to end-users and suppliers in the automotive and plumbing
industry. The Company and four debtor-affiliates filed for
chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court
for the Southern District of Ohio confirmed the Debtors' Third
Amended Joint Plan of Reorganization on July 29, 2005. The
Debtors emerged from bankruptcy on Aug. 4, 2005.
Amcast Industrial Corporation and Amcast Automotive of Indiana,
Inc., filed for their second chapter 11 petitions on Dec. 1,
2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman,
Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman,
P.C., represent the Debtors in their restructuring efforts. Henry
A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP,
represent the Official Committee of Unsecured Creditors. Kevin I.
Dowd at Berkeley Square Group LLC serves as Amcast's financial
advisor. The Creditors' Committee receives financial advice from
Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its
affiliate filed for protection from their creditors, they listed
total assets of $97,780,231 and total liabilities of $100,620,855.
AMERICAN CAMSHAFT: Court Approves KCC as Claims & Noticing Agent
----------------------------------------------------------------
American Camshaft Specialties Inc. and its debtor-affiliates
obtained authority from the U.S. Bankruptcy Court for the Eastern
District of Michigan to employ Kurtzman Carson Consultants LLC as
their claims, noticing and balloting agent.
KCC is expected to:
(a) prepare and serve required notices in the Debtors' chapter
11 cases, including:
* a notice of the commencement of the Debtors' chapter 11
cases and the initial meeting of creditors under
Section 341(a) of the Bankruptcy Code;
* a notice of the claims bar date;
* notices of objections to claims;
* notices of any hearings on a disclosure statement and
confirmation of a plan or plans or reorganization or
liquidation; and
* other miscellaneous notices as the Debtors or Court may
deem necessary or appropriate for an orderly
administration of the Debtors' chapter 11 cases;
(b) within five business days after the service of a
particular notice, file with the Clerk's Office a
certificate or affidavit of service that includes:
* a copy of the notice services,
* an alphabetical list of persons on whom the notice was
served, along with their addresses, and
* the date and manner of service;
(c) maintain copies of all proofs of claim and proofs of
interest filed in these cases;
(d) maintain official claims registers in these cases by
docketing all proofs of claim and proofs of interest in a
claims database that includes these information for each
claim or interest asserted:
* the name and address of the claimant or interest holder
and any agent thereof, if the proof of claim or proof
of interest was filed by an agent;
* the date the proof of claim or proof of interest was
received by the Claims Agent or the Court;
* the claim number assigned to the proof of claim or
proof of interest; and
* the asserted amount and classification of the claim;
(e) implement necessary security measures to ensure the
completeness and integrity of the claims registers;
(f) transmit to the Clerk's Office a copy of the claims
registers on a weekly basis, unless requested by the
Clerk's Office on a more or less frequent basis;
(g) maintain an up-to-date mailing list for all entities that
have filed proofs of claim or proofs of interest and make
such list available upon request to the Clerk's Office or
any party in interest;
(h) provide access to the public for examination of the proofs
of claim or proofs of interest filed in these cases
without charge during regular business hours;
(i) record all transfers of claims pursuant to Bankruptcy
Rule 3001(e) and provide notice of such transfers as
required by Bankruptcy Rule 3001(e), if directed to do so
by the Court;
(j) comply with applicable federal, state, municipal and local
statutes, ordinances, rules, regulations, orders and other
requirements;
(k) provide temporary employees to process claims, as
necessary;
(1) promptly comply with such further conditions and
requirements as the Clerk's Office of the Court may at any
time prescribe; and
(m) provide such other claims processing, noticing, balloting,
and related administrative services as may be requested
from time to time by the Debtors.
Pursuant to a consulting agreement, KCC's professionals bill:
Professional Hourly Rate
------------ -----------
Clerical $40 - $65
Project Specialist $75 - $115
Consultant $125 - $195
Senior Consultant/
Senior Managing Consultant $205 - $250
Technology/Programming Consultant $115 - $195
To the best of the Debtors' knowledge, KCC is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About American Camshaft
American Camshaft Specialties Inc. is located at the southwest
corner of M-45 and U.S. 31, includes two plants -- ACS Grand
Haven, which is solely owned by Asimco Technologies, and a joint
venture between Nippon Piston Ring and ACS Inc. Asimco
Technologies -- http://www.asimco.com/-- is headquartered in
Beijing, China, and produces a wide range of power train, chassis
and diesel fuel injection products for light duty and commercial
vehicle applications. Asimco assembles semi-fully finished cast,
steel and assembled camshafts. Aside from its U.S. operations,
Asimco has 18 manufacturing facilities and 52 sales offices in
China and one regional office in Europe and Japan. Asimco's major
customers are automotive-based, such as DaimlerChrysler, Ford, GM,
Cummins and CAT.
American Camshaft and three other U.S. affiliates filed for
chapter 11 protection on Dec. 9, 2006 (Bankr. E.D. Mich. Lead Case
No. 06-58298). Christopher A. Grosman, Esq., and Robert A.
Weisberg, Esq., at Carson Fischer, P.L.C., represent the Debtors.
When the Debtors filed for protection from their creditors they
listed estimated assets and debts between $10 million and
$50 million.
ANN-LEE CONSTRUCTION: Case Summary & 20 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Ann-Lee Construction & Supply Company, Inc.
3346 Olivet Road
Saltsburg, PA 15681
Bankruptcy Case No.: 07-20226
Chapter 11 Petition Date: January 11, 2007
Court: Western District of Pennsylvania (Pittsburgh)
Judge: Jeffery A. Deller
Debtor's Counsel: Michael J. Henny, Esq.
Law Offices of Michael J. Henny
600 Allegheny Building
429 Forbes Avenue
Pittsburgh, PA 15219
Tel: (412) 261-2640
Fax: (412) 261-1793
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
M. H. Corbin, Inc. Trade Debt $380,389
8420 Estates Court
Plain City, OH 43064
Valmont Structures, Inc. Trade Debt $224,277
7239 Collections Center Drive
Chicago, IL 60693
Adlee Precast, Inc. Trade Debt $157,968
3346 Olivet Road
Saltsburg, PA 15681
Interstate Safety Service Trade Debt $125,887
1301 Winola Road
Clarks Summit, PA 18411
McQuaide Truckload Trade Debt $99,698
Faddis Concrete/PLC Trade Debt $91,225
Sherrard, German & Kelly, P.C. Trade Debt $89,791
Maxim Crane Works Trade Debt $82,928
LSG Trucking Trade Debt $75,620
Lyle Signs, Inc. Trade Debt $75,435
American Express Platinum Trade Debt $69,553
M & A Transport, Inc. Trade Debt $46,957
Faddis Concrete Products Trade Debt $33,470
The Mason & Dixon Lines, Inc. Trade Debt $33,368
Breon Leasing Trade Debt $32,645
Trio Trucking, Inc. Trade Debt $29,525
Strongstown B & K Enterprises Trade Debt $26,501
Harcheiroad Trucking Company Trade Debt $24,570
Green Acres Contracting Co. Trade Debt $23,830
Buckeye Ready Mix, LLC Trade Debt $21,805
ANVIL KNITWEAR: Court Confirms Amended Plan of Reorganization
-------------------------------------------------------------
The Honorable Allan L. Gropper of the U.S. Bankruptcy Court for
the Southern District of New York in Manhattan confirmed the
Modified First Amended Joint Plan of Reorganization of Anvil
Holdings Inc., Anvil Knitwear Inc., and Spectratex Inc.
As reported in the Troubled Company Reporter on Dec. 7, 2006,
under the plan, these claims will be paid in full:
-- Allowed Administrative Claims,
-- Allowed Debtor-In-Possession Facility Claims,
-- Allowed Tax Claim,
-- Allowed Priority Claims,
-- Allowed Revolving Credit Facility Claims, and
-- Allowed Other Secured Claims.
Class 3A Allowed General Unsecured Claims against Anvil Holdings,
Class 3B Allowed General Unsecured Claims against Anvil Knitwear,
and Class 3C Allowed General Unsecured Claims against Spectratex
will be reinstated.
Holders of Class 3D Old Senior Notes Claims will receive a pro
rata share of 9.9 million shares of New Anvil Holdings common
stock. This represents, as of the Plan Effective Date, 99% of the
Reorganized Anvil Holdings outstanding shares.
Holders of Class 4 Old Anvil Holdings Preferred Stock Interests
will receive a pro rata share of:
a. 100,000 shares of New Anvil Holdings common stock,
representing 1% of the outstanding shares of Reorganized
Anvil Holdings;
b. any shares issued upon the exercise of New Warrants or any
shares issued on the exercise of any options issued under
the Management and Director Equity Plan;
c. the New Class A Warrants; and
d. the New Class B Warrants.
Holders of Class 5 Old Anvil Holdings Common Stock Interests,
Class 6 Intercompany Claims, and Class 7 Old Stock of Debtor
Subsidiaries will not receive anything.
Headquartered in New York, Anvil Holdings Inc. is a Delaware
holding company with no material operations and owns all of the
outstanding common stock of Anvil Knitwear, Inc. Anvil Knitwear,
in turn, owns all of the outstanding common stock of Spectratex,
Inc., fka Cottontops, Inc. The Debtors design, manufacture, and
market active wear. The Debtors filed for chapter 11 protection
on Oct. 2, 2006 (Bankr. S.D.N.Y. Case Nos. 06-12345 through
06-12347). Richard A. Stieglitz, Jr., Esq., Stephen J. Gordon,
Esq., and Joel H. Levitin, Esq., at Dechert LLP represent the
Debtors in their restructuring efforts. Milbank, Tweed, Hadley &
McCloy LLP serves as counsel for the Official Committee of
Unsecured Creditors. The Debtors' consolidated financial data as
of July 29, 2006, showed total assets of $110,682,000 and total
debts of $244,586,000.
APPLICA INC: Asks Holders to Reject Amended NACCO Tender Offering
-----------------------------------------------------------------
Applica Inc.'s Board has recommended that shareholders reject the
revised offer announced by NACCO on Jan. 9, 2007, and not tender
their shares in the NACCO offer.
The recommendation is being made despite an increase to $7.90 per
share of the price of the unsolicited tender offer to purchase all
outstanding shares of Applica's common stock that was commenced by
Apex Acquisition Corporation, a newly formed Florida corporation
and an indirect, wholly owned subsidiary of NACCO Industries, Inc.
The Board reached its determination based, among other factors, on
its belief that the revised NACCO offer includes a number of
conditions that create significant concerns as to whether the
revised NACCO offer can be completed, especially when considered
in light of the fact that NACCO's increased offer is less than
2% more than the consideration to be paid in the merger with
affiliates of Harbinger Capital Partners.
In particular, the Board believes that NACCO's minimum
tender condition, which requires that a majority of Applica's
outstanding shares of common stock on a fully diluted basis be
tendered, presents a significant risk that the NACCO tender offer
will not be consummated, especially in light of Harbinger Capital
Partners' ownership of approximately 39% of Applica's outstanding
common stock and its existing merger agreement with Applica.
The Applica Board of Directors recommends that Applica
shareholders vote "FOR" the adoption of the amended merger
agreement between Applica and affiliates of Harbinger Capital
Partners.
The meeting of shareholders scheduled tomorrow, Jan. 17, 2007, is
for the purpose of approving the transaction with the affiliates
of Harbinger Capital Partners will be convened as planned.
Completion of the transaction, which is currently expected to
occur not later than the day after the January 17th meeting, is
subject to customary closing conditions. Applica believes that,
subject to the receipt of the requisite shareholder vote at the
meeting, substantially all of these conditions have been or will
be satisfied.
Applica, Inc. (NYSE: APN) -- http://www.applicainc.com/-- is a
marketer and distributor of a range of branded small household
appliances in five categories: kitchen products, home products,
pest control products, pet care products and personal care
products.
* * *
Applica Inc.'s 10% Senior Subordinated Notes dues 2008 carries
S&P's CCC- rating.
ARAMARK: $500 Mil. Term Loan Add-on Cues S&P to Hold 'B+' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its loan and recovery
ratings on the proposed senior secured credit facilities of
Aramark, after the report that the company will increase the term
loan by almost $500 million.
With the add-on, the total amount of the term loan is now
$4.15 billion. The loan rating was affirmed at 'B+' and the
recovery rating was affirmed at '2', indicating the expectation
for substantial recovery of principal in the event of a
payment default. The company will also increase its senior debt
offering by about $80 million in lieu of the prior expectation of
issuing $570 million of subordinated debt.
Net proceeds from the company's proposed enlarged term loan and
senior unsecured debt offering, together with about $2.1 billion
of equity, will be used to finance the acquisition of Aramark by a
group of investors led by its chairman and CEO, Joseph Neubauer,
which includes the repayment of about $1.7 billion of Aramark's
outstanding debt.
Ratings Affirmed:
* Aramark Corp.
-- Corporate Credit Rating rated B+/Negative
-- Senior Secured at B+, Recovery Rtg: 2
-- Senior Unsecured rated B-
Rating Withdrawn:
* Aramark Corp.
-- Subordinated; NR and previously rated B-
ARAMARK CORP: Moody's Holds Ba3 Rating on Proposed $4.15 Bil. Loan
------------------------------------------------------------------
Moody's Investors Service affirmed the Ba3 rating on Aramark
Corporation's proposed $4.15 billion secured term loan and the B3
rating on $1.78 billion of proposed senior notes. The upsized
term loan and senior note offerings are intended to replace a $570
million senior subordinated note offering that was cancelled.
Concurrently, Moody's withdrew the B3 rating on the $570 million
of proposed senior subordinated notes. Pro-forma for the
aforementioned capital mix changes, Moody's affirmed the B1
Corporate Family Rating.
The ratings outlook is stable.
The leveraged buyout of Aramark is expected to be financed with a
$4.15 billion secured term loan, $1.78 billion of senior unsecured
notes and an equity contribution of $2.1 billion.
Rating actions:
* Aramark
-- Affirmed $600 million secured revolving credit facility
due 2013, Ba3 to LGD3, 36% from LGD3, 32%
-- Affirmed $4.15 billion secured term loan due 2014,
Ba3 to LGD3, 36% from LGD3, 32%
-- Affirmed $250 million secured synthetic letter of credit
facility due 2013, Ba3 to LGD3, 36% from LGD3, 32%
-- Affirmed $1.78 billion senior unsecured notes due 2015,
B3 to LGD5, 86% from LGD5, 80%
-- Affirmed Corporate Family Rating at B1
-- Affirmed Probability of Default Rating at B1
-- Withdrew $570 million senior subordinated notes due
2016 rated at B3 LGD6, 93%
These ratings are subject to Moody's review of final
documentation.
Rating actions:
* Aramark
-- Affirmed Corporate Family Rating, B1
-- Affirmed Probability of default rating, B1
-- Affirmed senior unsecured shelf registration rated
B3, LGD6, 96%
-- Affirmed senior subordinated shelf registration rated
B3, LGD6, 97%
Ratings actions:
* Aramark Services
-- Affirmed $250 million senior unsecured notes due 2012,
B3, LGD6, 96%
-- Affirmed senior unsecured shelf registration B3, LGD6,
96%
-- Affirmed senior subordinated shelf registration rated
B3, LGD6, 97%
-- Affirmed $300 million senior unsecured notes due 2007,
Baa3
-- Affirmed $31 million senior unsecured notes due 2007,
Baa3
-- Affirmed $300 million senior unsecured notes due 2008,
Baa3
Aramark Corporation, headquartered in Philadelphia, Pennsylvania,
is one of the largest U.S. providers of food and support services
to a variety of end markets across the country, including
businesses, the educational and healthcare sectors, sports and
entertainment venues and correctional institutions. The company
also operates the second largest uniform and career apparel rental
services and sales business in the U.S., catering to a diversified
client portfolio through an extensive national service network.
For the twelve month period ending Sept. 30, 2006, revenues were
approximately $11.6 billion.
ASARCO LLC: Hires Marten Law as Omaha Environmental Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas in
Corpus Christi authorized ASARCO LLC to employ Marten Law Group,
PLLC, as special counsel in connection with the company's
environmental claims litigation, including but not limited to the
Omaha Lead Site in Omaha, Nebraska.
As reported in the Troubled Company Reporter on Dec. 15, 2006,
Marten Law Group will render all services necessary for the
litigation of ASARCO's environmental liabilities.
SARCO will pay Marten Law Group in its hourly rates:
Professional Hourly Rates
------------ ------------
Larson, Linda, Esq. $450
Marten, Bradley, Esq. 450
Jones, Steven, Esq. 355
Martin, Connie Sue, Esq. 315
Yowell, Margaret, Esq. 305
Kray, Jeffrey, Esq. 315
Lufkin, Michael, Esq. 295
Ferrell, Jessica, Esq. 225
Till, Dustin, Esq. 225
Fandino, Laura, Esq. 225
Pollock, Eve 155
Chow, Rosanne 115
Linda R. Larson, Esq., at Marten Law Group, PLLC, assures the
Court that her firm does not represent any interest adverse to
ASARCO and its estate. Ms. Larson adds that Marten Law Group is
a "disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About ASARCO LLC
Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an
integrated copper mining, smelting and refining company. Grupo
Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company
filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex.
Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq.,
and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel
Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble,
Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the
Debtor in its restructuring efforts. Lehman Brothers Inc.
provides the ASARCO with financial advisory services and
investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for chapter 11
protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to
06-20776).
(ASARCO Bankruptcy News, Issue No. 35; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ASARCO LLC: Wants Keegan Linscott's Scope of Services Expanded
--------------------------------------------------------------
ASARCO LLC asks the U.S. Bankruptcy Court for the Southern
District of Texas' permission to expand the responsibilities of
Keegan, Linscott & Kenon, P.C., to include certain bankruptcy
claims reconciliation services.
James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas,
relates that the Debtors have an immediate need to employ an
outside firm to facilitate their claims reconciliation process
because of the volume of claims filed against them.
Under the expanded employment, Keegan will provide reconciliation
services in connection with claims under administrative, priority,
secured and unsecured categories. ASARCO expects the bulk of the
claims reconciliation work to relate primarily to unsecured
claims.
Keegan will also:
(a) review and analyze the proofs of claim filed in the
various categories;
(b) review its findings with ASARCO's management;
(c) prepare a list of claims objections to be submitted to
Baker Botts, L.L.P, ASARCO's bankruptcy counsel; and
(d) identify any adjustments that may be needed to be
done to the Debtors' books based on its claim
investigation, analysis and reconciliation.
ASARCO will pay Keegan's professionals an hourly rate of $75 to
$250 for services rendered. ASARCO will also reimburse Keegan for
any necessary out-of-pocket expenses.
Christopher Linscott, director at Keegan, Linscott & Kenon, P.C.,
assures the Court that his firm does not represent any interest
adverse to ASARCO or its estate, and is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
About ASARCO LLC
Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an
integrated copper mining, smelting and refining company. Grupo
Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company
filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex.
Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq.,
and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel
Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble,
Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the
Debtor in its restructuring efforts. Lehman Brothers Inc.
provides the ASARCO with financial advisory services and
investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for chapter 11
protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to
06-20776).
(ASARCO Bankruptcy News, Issue No. 35; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ATLAS AIR: Distributes Common Stock Under Plan of Reorganization
----------------------------------------------------------------
Atlas Air Worldwide Holdings Inc. has begun distribution of
406,464 shares of AAWW's common stock to holders of allowed
general unsecured claims against AAWW and certain of its
subsidiaries pursuant to the terms of a Joint Plan of
Reorganization under which AAWW and the subsidiaries emerged from
Chapter 11 bankruptcy protection on July 27, 2004.
The current issuance of shares under the Plan follows an initial
pro rata distribution of 16,095,776 shares of common stock of AAWW
to holders of allowed general unsecured claims in July 2005 and
subsequent interim distributions to eligible claimholders of
40,940 shares in October 2005, 7,493 shares in January 2006,
40,824 shares in April 2006, and 396,625 shares in October 2006.
Distributions from the remaining 214,544 shares of common stock
reserved for issuance to holders of allowed general unsecured
claims by the Plan will take place on a periodic basis.
Altogether, the Plan allocates a total of 17,202,666 shares of
AAWW's common stock to holders of allowed general unsecured claims
against the bankruptcy estates of AAWW, Atlas Air, Inc., Airline
Acquisition Corp I, and Atlas Worldwide Aviation Logistics, Inc.
Under the Plan, these shares will be issued to holders of allowed
claims in the same proportion as each holder's allowed claim bears
to the total amount of allowed claims. The exact number of shares
that each claimholder ultimately receives pursuant to the Plan is
dependent on the final total of allowed claims and other factors,
such as unclaimed distributions and fractional share interests.
Should any distribution of common stock result in a claimholder
being entitled to the receipt of a fractional share, AAWW's
disbursing agent will retain the fractional share until a
distribution would result in a whole number of shares being
distributed to the claimholder on the next applicable distribution
date.
For purposes of a final share distribution under the Plan,
fractions of common stock will not be issued. Instead, fractions
of common stock will be rounded up or down to the nearest whole
number, with fractions equal to or less than 0.5 of a share
rounded down. Any remaining undistributed shares on the final
distribution date will be released from AAWW's common stock
reserve and become authorized, unissued common stock of AAWW.
Claimholders seeking additional information regarding the number
of shares distributed to them may refer to:
http://www.atlasreorg.com/stockdistributionlist.html
As of Dec. 31, 2006, $607 million of general unsecured claims
against AAWW and the named subsidiaries had been allowed and
claims of $7.6 million remained in dispute.
Following the current distribution of shares to holders of allowed
unsecured claims, the remaining balance of shares of common stock
authorized for issuance under the Plan will be reserved for
issuance to holders of disputed general unsecured claims against
the bankruptcy estates of AAWW and the named subsidiaries, in the
event such disputed claims are subsequently determined to be
allowed claims.
To the extent that any such disputed claims become disallowed
claims, the shares of common stock reserved for issuance to the
holders of such disputed claims will be distributed pro rata to
holders of allowed general unsecured claims previously receiving
shares of common stock.
Including the current distribution, AAWW will have a total of
approximately 21 million shares of common stock outstanding.
About Atlas Air Worldwide Holdings
Based in Purchase, New York, Atlas Air Worldwide Holdings, Inc.
(Nasdaq: AAWW) -- http://www.atlasair.com/-- is an all-cargo
carrier which operates fleets of Boeing 747 freighters. The
Company filed for chapter 11 protection (Bankr. S.D. Fla. Case
No. 04-10794) on Jan. 30, 2004. The Honorable Robert A. Mark
presided over Atlas' restructuring proceeding. Jordi Guso, Esq.,
at Berger Singerman, represents the debtor. Atlas Air emerged
from bankruptcy on July 27, 2004. When the Company filed for
bankruptcy, it listed $1,451,919,000 in assets and $1,425,156,000
in debts.
BANC OF AMERICA: Fitch Junks Rating on Class B-5 Certificates
-------------------------------------------------------------
Fitch Ratings has taken these rating actions on 6 classes from
Banc of America Funding Corporation, mortgage pass-through
certificates, series 2002-1:
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AAA;
-- Class B-2 affirmed at 'AAA;
-- Class B-3 affirmed at 'AAA';
-- Class B-4 affirmed at 'AA';
-- Class B-5 downgraded to 'CCC' from 'BBB'; and assigned a
-- Distressed Recovery rating of 'DR1'.
The collateral of consists of slightly seasoned, conventional,
fixed-rate, fully amortizing, first lien, one- to four-family
residential mortgage loans with original terms to stated maturity
ranging from 180 to 360 months. The majority of the pool consists
of loans underwritten according to Bank of America's 'Alternative
A' guidelines. Such guidelines are less stringent than Bank of
America's general underwriting guidelines and may include factors
such as reduced documentation or a maximum loan-to-value ratio of
up to 103%. The original LTV for this mortgage pool is
approximately 79.26%. BAFC, a special purpose corporation,
purchased the mortgage loans from Bank of America, N.A. The
transaction is being serviced by Bank of America, N.A., which is
currently rated 'RPS1' for prime and Alt-A product.
The affirmations on the above transaction reflect consistent
relationships of credit enhancement to future loss expectations
and affect approximately $7.79 million in outstanding
certificates.
The downgrade reflects the deterioration in the relationship of CE
to future loss expectations and affects approximately $292,719 of
outstanding certificates. In the December 2006 remittance period,
the trust experienced a loss of $361,381 which depleted the entire
class B-6 decreasing CE for the class B-5 to 0% from 3.11% in
November. Additionally, class B-5 also suffered a write-down of
$61,358 from the December loss. The loss was the result of one
loan that had a much higher-than-expected loss severity of 95%.
Currently, the trust has no loans in the 60+ delinquency.
BEAR STEARNS: S&P Cuts Rating on Loan Classes M-9A and M-9B to BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on classes
M-8, M-9A, and M-9B from Bear Stearns Asset Backed Securities I
Trust 2004-BO1.
Concurrently, the ratings on classes M-7 and M-8 were placed on
CreditWatch with negative implications, and the ratings on classes
M-9A and M-9B remain on CreditWatch negative. At the same time,
the ratings on the remaining 11 classes from the same transaction
were affirmed.
The lowered ratings and CreditWatch placements reflect the
deteriorating performance of this collateral pool. Credit support
for series 2004-BO1 is derived from a combination of
subordination, excess interest, and overcollateralization. Over
the lifetime of this deal, cumulative losses have amounted to
$50.368 million, or 3.75% of the original pool balance. The
transaction incurred a record loss of $11.439 million in November
2006 due to a one-time charge-off. Over the past six months,
realized losses have consistently outpaced excess interest spread
and eroded O/C.
As of the December remittance period, O/C for classes M-9A and
M-9B had been reduced to $21.673 million, $17.346 million below
its target. Severe delinquencies and total delinquencies
constitute 11.57% and 21.22% of the current pool balance,
respectively.
Standard & Poor's will continue to closely monitor the performance
of these classes from series 2004-BO1. If the delinquent loans
cure to a point at which monthly excess interest begins to outpace
monthly net losses, thereby allowing O/C to build and provide
sufficient credit enhancement,
Standard & Poor's will affirm the ratings and remove them from
CreditWatch.
Conversely, if delinquencies cause substantial realized losses in
the coming months and continue to erode credit enhancement,
Standard & Poor's will take further negative rating actions on
these classes. The affirmations are based on credit support
percentages that are sufficient to maintain the current ratings.
This transaction was initially backed by a pool of fixed- and
adjustable-rate mortgage loans secured by first, second, or third
liens on one- to four-family residential properties.
Bear Stearns Asset Backed
Securities I Trust 2004-BO1
Rating Lowered And Placed On Creditwatch Negative
Rating
------
Series Class To From
------ ----- -- ----
2004-BO1 M-8 BBB/Watch Neg AA-
Ratings Lowered And Remaining On Creditwatch Negative
Series Class To From
----- ----- -- ----
2004-BO1 M-9A, M-9B BB/Watch Neg A/Watch Neg
Ratings Placed On Creditwatch Negative
Series Class To From
------ ----- -- ----
2004-BO1 M-7 AA/Watch Neg AA
Ratings Affirmed
Series Class Rating
------ ----- ------
2004-BO1 I-A-1, I-A-2, I-A-3, II-A-1, II-A-2 AAA
2004-BO1 M-1, M-2, M-3 AAA
2004-BO1 M-4, M-5 AA+
2004-BO1 M-6 AA
CALPINE CORP: Gets OK on 2nd Lien Debt Adequate Protection Payment
------------------------------------------------------------------
The Honorable Burton R. Lifland of the U.S. Bankruptcy Court
for the Southern District of New York approved a settlement
agreement, as amended, among Calpine Corp. and its debtor-
affiliates, the Official Committee of Unsecured Creditors, the
Official Committee of Equity Security Holders and the Unofficial
Committee of Second Lien Debtholders, providing adequate
protection to the Debtors' second lien debtholders.
The Amended Agreement states that:
(a) Under no circumstances will the Debtors be permitted to
draw on their $1,000,000,000 revolving credit facility to
make any adequate protection payments with respect to
Calpine Corporation's Second Lien Debt. For Calpine Corp.
to make any adequate protection payment, the Revolver must
have a zero balance after giving effect to an adequate
protection payment, provided, however, that the Debtors'
letter of credit facilities need not have a zero balance.
(b) Calpine Corp. will use its unrestricted cash to make the
adequate protection payments subject to a $10,000,000
cushion and a zero balance on the Revolver -- the Net
Corporate Liquidity Requirement -- provided, however, that
it will use commercially reasonable efforts to upstream
cash from its direct and indirect subsidiaries to meet the
Net Corporate Liquidity Requirement.
(c) Subject to the Net Corporate Liquidity Requirement and
provided that no default or event of default under the DIP
Facility will have occurred, Calpine Corp. will pay as
adequate protection to the applicable Second Lien Trustee
and the Term Loan Agent $100,262,269 in the aggregate in
four equal quarterly installments in 2007.
(d) Calpine will also pay the interest due under each of the
Floating and Fixed Rate Notes and Credit Agreement, which
will be calculated at the Base Rate plus 4.75%.
(e) The settlement and adequate protection payments will be in
exchange for the agreement by the Second Lien DebtHolders
that they will not be entitled to and will thus waive any
claim for or entitlement to:
-- interest at the default rate that they may have
accrued during the period from January 1, 2006,
through and including the last applicable payment
date; and
-- any make-whole amount or any prepetition premium or
penalty to the extent that any portion of the 2006
and 2007 Adequate Protection Amounts is ultimately
characterized as a repayment of principal and not a
payment of interest.
(f) If any party challenges the Second Lien Term Loan Lenders'
entitlement to receive interest plus 4.75%, then the Term
Loan Agent and Second Lien Term Loan Lenders will be
entitled to claim and seek default interest for the period
from and after June 30, 2006.
(g) If Calpine Corp. fails to pay the 2006 and 2007 Adequate
Protection Amounts and the 2007 Adequate Protection
Amount when due, then the Second Lien Committee may
terminate its adequate protection arrangement described in
the Cash Collateral Order without the need for further
Court order.
To resolve the objection of the Ad Hoc Committee of Second Lien
Bank Debt Holders, the Amended Agreed Order provides that:
(a) Each of the Second Lien Term Loan Lenders will have until
12:00 p.m. on January 12, 2007, to notify the Term Loan
Agent whether it elects not to receive the Payment
Package. A Second Lien Lender that do not notify the Term
Loan Agent on or before the deadline will be deemed to
have elected to receive the Payment Package.
(b) Pending further Court order, the Objecting Holders will
not receive the Payment Package and will reserve the right
to seek interest at the default rate and adequate
protection other than as provided for by the Payment
Package.
(c) A hearing will be held on Feb. 27, 2007, which will
address whether:
-- Objecting Holders are entitled to elect not to
receive the Payment Package, or are entitled to
receive adequate protection other than as provided
for by the Payment Package;
-- the Credit Agreement permits the Term Loan Agent, or
the Term Loan Agent is administratively able, to
implement a process or mechanism to allow certain
Second Lien Lenders to receive the Payment Package
and also allow for the Objecting Holders not to
receive the Payment Package; and
-- Requisite Lenders have the right to bind, or have
bound by written direction to the Term Loan Agent,
all other Second Lien Lenders to receive the Payment
Package, by amendment to, or waiver of any provision
of, the Credit Agreement.
A full-text copy of the Amended Agreed Order on the Adequate
Payments to Second Lien Lenders is available for free at:
http://ResearchArchives.com/t/s?1854
Headquartered in San Jose, California, Calpine Corporation
(OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies
customers and communities with electricity from clean, efficient,
natural gas-fired and geothermal power plants. Calpine owns,
leases and operates integrated systems of plants in 21 U.S. states
and in three Canadian provinces. Its customized products and
services include wholesale and retail electricity, gas turbine
components and services, energy management and a wide range of
ower plant engineering, construction and maintenance and
operational services.
The company previously produced a portion of its fuel consumption
requirements from its own natural gas reserves. However, in July
2005, the company sold substantially all of its remaining domestic
oil and gas assets to Rosetta Resources Inc.
The company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts. Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities (Calpine Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
CARAUSTAR INDUSTRIES: Closes Lafayette Paperboard Mill
------------------------------------------------------
Caraustar Industries Inc. has announced the closure of its
Lafayette Paperboard mill in Lafayette, Ind.
The Lafayette mill is an uncoated recycled boxboard (URB)
manufacturing facility with an annual capacity of 64 thousand
tons.
Associated with this mill closure, the company will record a
pre-tax charge of approximately $9.3 million, of which
approximately $7.9 million will be non-cash. This rationalization
is expected to generate an estimated $5 million in annual pre-tax
savings.
The closure of the Lafayette mill will affect approximately 73
salaried and hourly employees.
The company also announced the rationalization of four tube and
core converting facilities in Amarillo, Tex.; Vacaville, Calif.;
Grand Rapids, Mich., and Leyland, U.K.
Associated with these closures, the company will record pre-tax
charges of approximately $2.6 million, of which approximately
$1.2 million will be non-cash.
These rationalizations are expected to generate an estimated
$1.5 million in annual pre-tax savings. The closure of the tube
and core facilities will affect approximately 58 salaried and
hourly employees.
The closure of the Lafayette mill and the tube and core facilities
reflects the company's previously announced plans to achieve
greater cost efficiencies throughout its system and better utilize
capacity.
With the exception of the Leyland, U.K., facility, Caraustar
expects to consolidate the majority of its mill, and tube and core
converting facility production, into other existing Caraustar
locations.
Caraustar will provide a comprehensive program of separation pay,
benefits coverage and job assistance to the affected employees to
facilitate their transition to alternate employment.
The company additionally announced an investment of $4 million in
five high-speed tube winders. These machines will be installed
throughout the Caraustar system in 2007. This investment will
allow Caraustar to reduce its manufacturing costs and provide
higher quality products and better service to its customers.
Headquartered in Austell, Ga., Caraustar Industries, Inc.
(NASDAQ-NGM: CSAR) -- http://www.caraustar.com/-- manufacturers
recycled paperboard, producing a wide variety of tubes, cores,
composite containers, folding cartons, and industrial and consumer
packaging.
* * *
As reported in the Troubled Company Reporter on Dec. 4, 2006
Moody's Investors Service affirmed Caraustar Industries, Inc.'s B2
corporate family rating and B3 senior unsecured rating. The
rating outlook remains stable.
CATALYST PAPER: Board Accepts CEO and CFO Resignations
------------------------------------------------------
Catalyst Paper Corporation's board of directors accepted the
resignations of two executives who have elected to exercise change
of control agreements.
Russell J. Horner, president and chief executive officer, and
Ralph Leverton, vice-president, finance and chief financial
officer, have tendered their resignations. An executive search is
underway to identify their successors and both executives have
agreed to remain with the company to the end of the next annual
meeting of shareholders, to be held on March 28, 2007, or the
appointment of successors or interim successors, to assist in the
transition.
"Russ stabilized the operational and financial performance of our
company during a challenging period of industry restructuring and
consolidation," said board chairman Keith Purchase. "At the same
time, Ralph led the cost management and capital refinancing of the
business to significantly improve the balance sheet during a
protracted downturn in this cyclical sector.
"We appreciate their loyalty, dedication and willingness to
facilitate a smooth transition as the board completes its
selection of new executives who will build on the fundamental
strengths of the business."
Mr. Horner worked for Catalyst and its predecessor companies for
more than 30 years. Prior to his appointment to lead Catalyst
Paper, he served as chief operating officer Australasia for
Fletcher Challenge Paper, president and chief operating officer of
Fletcher Challenge Canada and president and chief executive
officer of Norske Skog Canada. In 2001, he guided the merger of
Norske Skog Canada and Pacifica Papers to create NorskeCanada,
which was renamed Catalyst Paper in 2005.
During Mr. Horner's tenure, Catalyst Paper set new benchmarks for
safety, and community and environmental group relations in British
Columbia.
Mr. Leverton joined Catalyst in 1999 after holding executive
positions at Pope & Talbot and Harmac Pacific and a variety of
financial positions with MacMillan Bloedel.
The recent acquisition by Third Avenue Management LLC of an
additional 39 million common shares of Catalyst on behalf of
various client accounts, exceeding a 25% threshold established
under the executives' agreements with Catalyst, constituted a
change of control under such agreements. Under the terms of the
control change agreement, Mr. Horner and Mr. Leverton are entitled
to receive change of control and pension benefits totaling
$4,779,865 and $1,582,546, respectively, on the date that their
employment ends.
Based in Vancouver, British Columbia, Catalyst Paper Corporation
(TSX: CTL) -- http://www.catalystpaper.com/-- produces mechanical
printing papers in North America. The Company also produces
market kraft pulp and owns Western Canada's largest paper
recycling facility. With five mills employing 3,800 people at
sites within a 160-kilometer radius on the south coast of British
Columbia, Catalyst has a combined annual capacity of 2.4 million
tons of product.
* * *
Catalyst Paper's 8-5/8% Series C Senior Notes carry Moody's
Investors Service's B2 rating, Standard & Poor's B+ rating, and
Dominion Bond Rating Service's BB rating.
CATHOLIC CHURCH: Treatment of Claims Under Spokane's Joint Plan
---------------------------------------------------------------
Under the Diocese of Spokane's Joint Plan of Reorganization, each
holder of a Class 7 Tort Claim -- except the Future Claims
Representative, Future Tort Claimants, Settled Compromise Tort
Claimants, and Settled Matrix Tort Claimants -- may elect to be
treated as a holder of:
* a Convenience Tort Claim,
* a Compromise Tort Claim,
* a Matrix Tort Claim,
* a Litigation Tort Claim, or
* a Non-Releasing Litigation Tort Claim.
After election, the Tort Claimants, except the Non-Releasing Tort
Claimants, will execute and deliver to the Diocese a release of
Claims against the Parishes, the Catholic Entities except Morning
Star Boys Ranch, and the Insurers in exchange for the treatment of
the Claims under the Plan.
If before or after the Plan Effective Date, the holder of a Class
7 Tort Claim fails to give sworn oral statement to Tort Claim
Reviewer regarding the Abuse it suffered, the holder will be
deemed to have elected to be treated as a holder of a Convenience
Tort Claim, and to have executed and delivered a Release of
Claims.
Counsel for any Tort Claimant who is required to provide a sworn
oral statement will be provided a copy of the Matrix Protocol
before the statement is given. The Diocese says it will provide
the Court a copy of its Matrix Protocol at a later date.
If a holder of a Litigation Tort Claim or a Non-Releasing
Litigation Tort Claim has not filed a complaint alleging its claim
in a court of competent jurisdiction before making an election,
the holder must file and serve on the Plan Trustee a complaint
within 60 days after the Plan Effective Date.
Otherwise, the holder will be deemed to have elected to be treated
as a holder of a Matrix Tort Claim. A holder of a Non-
Releasing Litigation Tort Claim who does not file a complaint will
be deemed to have conditionally elected to be treated as a holder
of a Matrix Tort Claim.
Holders of:
* Settled Compromise Tort Claims, which are claims settled by
the Diocese for $45,000 or less and approved by the
Bankruptcy Court, will be deemed to have elected to be
treated under the Compromise Process; and
* Settled Matrix Tort Claims, which are claims settled by the
Diocese for $45,000 and approved by the Bankruptcy Court
will be deemed to have elected to be treated under the
Matrix Process.
Holders of these two types of Tort Claims are also required to
execute and deliver to the Diocese a Release of Claims.
Tort Claim Allowance Processes
(A) Convenience Process
A Convenience Tort Claim will be allowed for $15,000 if the TCR
determines that the Tort Claimant was Abused. The TCR will not
consider whether the person who Abused the Tort Claimant was a
Responsible Person, or any applicable statute of limitations or
the passage of time since the date of the Abuse and any other
defenses of the Diocese. The TCR may consider the credibility of
the Tort Claimant and the facts alleged in support of the Claim.
(B) Compromise Process
A Compromise Tort Claim will be allowed if the TCR determines that
the Tort Claimant was Abused by a Responsible Person, and that the
Abuse would fall within one or more of Tiers 1 to 3 of the Matrix
Protocol if the Claim were determined under the Matrix
Process. If the holder of the Claim was a minor at the time of
the Abuse, the Claim will be allowed for $45,000. Otherwise, the
Claim will be allowed for $30,000. The TCR will not consider any
applicable statute of limitations, the passage of time since the
date of the Abuse, or any other defenses of the Diocese. The TCR
may consider the credibility of the Tort Claimant and the facts
alleged in support of the claim.
Settled Compromise Tort Claims will be automatically allowed on
the Effective Date in the amount set forth in the Plan. A
schedule of amounts is available for free at:
http://researcharchives.com/t/s?1877
If the TCR determines that the Abuse of a Tort Claimant would fall
within only Tier 4 of the Matrix Protocol if the Claim were
determined under the Matrix Process, the Claimant's Claim will be
determined, and, if allowed, paid under the Convenience Process.
The allowed amount of the Claim will be transferred from the
Matrix Fund to the Convenience Fund.
(C) Matrix Process
A Matrix Tort Claim will be allowed if the TCR determines that the
Tort Claimant was Abused by a Responsible Person, and does not
find that there is clear, cogent and convincing evidence that the
applicable statute of limitations under Chapter 4.16 of the
Revised Code of Washington for the Matrix Tort Claim had run on or
before December 6, 2004. The TCR will assign the Tort Claim a
value pursuant to the Matrix Protocol. The TCR may consider the
credibility of the Tort Claimant and the facts alleged in support
of the Tort Claim and, in the TCR's sole discretion, reduce or
deny the Tort Claim.
Settled Matrix Tort Claims will be automatically allowed on the
Effective Date in the amounts set forth in the Plan. A schedule
of amounts is available for free at:
http://researcharchives.com/t/s?1878
(D) Litigation Process
Allowance of a Litigation Tort Claim or a Non-Releasing Litigation
Tort Claim will be determined either by a trial of the Tort Claim
conducted by a court of competent jurisdiction, or a settlement
between the Tort Claimant and the Plan Trustee. Any
Litigation Tort Claim or Non-Releasing Litigation Tort Claim is
subject to all defenses, including but not limited to the
applicable statute of limitations, available to the Diocese.
Nothing in the Plan will affect any right the holder of a
Litigation Tort Claim may have to demand a jury trial under
applicable law.
(E) FC Process
Holders of Allowed Future Tort Claims filed on or before the 9th
anniversary of the Effective Date -- Future Tort Claim-Initial --
will be paid in full in Cash by the Plan Trust from the FC Fund
and the proceeds of the Future Claims Commitment, which will
become part of the FC Fund, within 30 days after the latter of the
date on which the Future Tort Claim-Initial is Finally
Determined or the date on which the FC Fund is initially funded
with the $1,000,000 million allocation provided for in Plan, and
the Future Claims Commitment becomes effective.
The Future Tort Claim-Initial holder may elect to proceed with
allowance under:
* the FTC Compromise Process wherein the Claim will be allowed
for $45,000 if the TCR determines that the holder of the
Claim was Abused as a minor by a Responsible Person, and
that the applicable statute of limitations under Chapter
4.16 had not begun to run on or before March 10, 2006;
* the FTC Matrix Process wherein the claim will be allowed (i)
if the TCR determines that the holder of the Claim was
Abused by a Responsible Person, and that the applicable
statute of limitations under Chapter 4.16 had not begun to
run on or before March 10, 2006; and (ii) if the TCR does
not find that there is clear, cogent and convincing evidence
that the applicable statute of limitations under Chapter
4.16 had run after March 10, and before the date the
Holder of the Claim filed a Proof of Claim. The TCR will
assign the Claim a value pursuant to the Matrix Protocol; or
* the FTC Litigation Process wherein the Claim will be
determined either by a trial of the Claim conducted by the
District Court, or a settlement between the holder of the
Claim and the Plan Trustee. The Future Tort Claim-Initial
will be disallowed unless the holder of the Claim proves
that the applicable statute of limitations under Chapter
4.16 had not begun to run on or before March 10, 2006. The
Claim is also subject to all defenses. Nothing in the Plan
will affect any right the holder of a Future Tort Claim-
Initial may have to a jury trial under applicable law.
The FCR Tort Claim and Future Tort Claims will be allowed and paid
through the FC Process.
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 76; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CENDANT MORTGAGE: Fitch Holds Low-B Ratings on Various Certs.
-------------------------------------------------------------
Fitch has taken rating actions on Cendant Mortgage Corporation's
Mortgage Pass-Through Certificates:
Series 2002-4
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AAA';
-- Class B-2 affirmed at 'AAA';
-- Class B-3 affirmed at 'AA+';
-- Class B-4 affirmed at 'AA'; and,
-- Class B-5 affirmed at 'A'.
Series 2002-8
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AAA';
-- Class B-2 affirmed at 'AA';
-- Class B-3 affirmed at 'A';
-- Class B-4 affirmed at 'BBB'; and,
-- Class B-5 affirmed at 'BB'.
Series 2003-1
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA+';
-- Class B-2 upgraded to 'AA-' from 'A+';
-- Class B-3 upgraded to 'BBB+' from 'BBB';
-- Class B-4 upgraded to 'BB+' from 'BB'; and,
-- Class B-5 affirmed at 'B'.
Series 2003-4
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA+';
-- Class B-2 affirmed at 'A+';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB'; and,
-- Class B-5 affirmed at 'B'.
Series 2003-6
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB'; and,
-- Class B-5 affirmed at 'B'.
Series 2003-8 Group 1
-- Class IA affirmed at 'AAA';
-- Class IB1 affirmed at 'AA';
-- Class IB2 affirmed at 'A';
-- Class IB3 affirmed at 'BBB';
-- Class IB4 affirmed at 'BB'; and,
-- Class IB5 affirmed at 'B'.
Series 2003-8 Group 2
-- Class IIA affirmed at 'AAA';
-- Class IIB1 affirmed at 'AA';
-- Class IIB2 affirmed at 'A';
-- Class IIB3 affirmed at 'BBB';
-- Class IIB4 affirmed at 'BB'; and,
-- Class IIB5 affirmed at 'B'.
Series 2003-9 Group 1
-- Class IA affirmed at 'AAA';
-- Class IB1 affirmed at 'AA';
-- Class IB2 affirmed at 'A';
-- Class IB3 affirmed at 'BBB';
-- Class IB4 affirmed at 'BB'; and
-- Class IB5 affirmed at 'B'.
Series 2003-9 Group 2
-- Class IIA affirmed at 'AAA';
-- Class IIB1 affirmed at 'AA';
-- Class IIB2 affirmed at 'A';
-- Class IIB3 affirmed at 'BBB';
-- Class IIB4 affirmed at 'BB'; and,
-- Class IIB5 affirmed at 'B'.
Series 2004-1
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB'; and,
-- Class B-5 affirmed at 'B'.
Series 2004-2
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB'; and,
-- Class B-5 affirmed at 'B'.
Series 2004-3
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB'; and,
-- Class B-5 affirmed at 'B'.
Series 2004-4
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB'; and,
-- Class B-5 affirmed at 'B'.
Series 2004-5
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB'; and,
-- Class B-5 affirmed at 'B'.
Series 2005-1
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB'; and,
-- Class B-5 affirmed at 'B'.
All of the mortgage loans in the aforementioned transactions were
either originated or acquired in accordance with the underwriting
guidelines established by Cendant Mortgage Corporation. The
mortgage loans consist of 15 and/or 30-year fixed-rate mortgages
secured by first liens, primarily on one to four-family
residential properties. Additionally, any mortgage loan with an
original Loan to Value in excess of 80% is required to have a
primary mortgage insurance policy.
The affirmations reflect a satisfactory relationship between
credit enhancement and future loss expectations and affect
approximately $1.374 Billion of outstanding certificates. The
upgrades reflect an improvement in the relationship between CE and
future loss expectations and affect approximately
$2.9 million of outstanding certificates. The CE levels for all
the upgraded classes have at least doubled since closing. As of
the December 2006 distribution date, all of the pools have
experience little to no losses. All of the mortgage loans are
currently being serviced by PHH Mortgage Corporation, rated
'RPS1-' by Fitch.
CENTRAL DESIGN: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Central Design Systems, Inc.
81W Modular Avenue
Commack, NY 11725
Bankruptcy Case No.: 07-70106
Type of Business: The Debtor is a sheet metal contractor.
Chapter 11 Petition Date: January 12, 2007
Court: Eastern District of New York (Central Islip)
Judge:
Debtor's Counsel: Gary M. Kushner, Esq.
Forchelli, Curto, Schwartz, Mineo, et al.
330 Old Country Road
P.O. Box 31
Mineola, NY 11501
Tel: (516) 248-1700
Fax: (516) 248-1729
Total Assets: $6,077,647
Total Debts: $2,887,229
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Local 28 $690,000
195 Mineola Boulevard
Mineola, NY 11501
Internal Revenue Service $600,000
10 Metro Tech Center
625 Fulton Street
Brooklyn, New York 11201
Milman & Heidecker $280,000
3000 Marcus Avenue
Suite 3W3
Lake Success, NY 11042
NYS Department of Tax and Finance $100,000
Queens District Office
80-02 Kew Gardens Road
Kew Gardens, NY 11415
Teamsters Local $71,000
282 Teamsters
2500 Marcus Avenue
Lake Success, NY 11042
Sheet Metal Industry $25,000
500 Greenwich Street
New York, NY 10013
New York Islanders $23,600
200 Old Country Road
Plainview, New York 11803
The Hartford $21,050
P.O. Box 5556
Hartford, CT 06102
Ron Schule $19,571
1 Glamor Court
Smithtown, New York 11787
Empire Distributors $16,494
100-A Brenner Drive
Congers, NY 10920
Midland Steel Corp. $16,101
1120 Legatt Avenue
Bronx, NY 10474
The State Insurance Fund $13,688
P.O. Box 4788
Syracuse, NY 13221
Erlin of Long Island $9,500
857 N. Richmond Avenue
Lindenhurst, NY 11757
Compensation Consulting Services $7,793
P.O. Box 0040251
Brooklyn, NY 11204
Financial Pacific Leasing $7,000
3455 S. 344th Way, Suite 300
Federal Highway
Washington 96001
American Express - 1 $6,463
Suite 0002
Chicago, ILL 606799
Siberling & Siberling $5,901
300 Rabro Drive
Hauppauge, NY 11788
Capital Hardware $5,734
300 Murray Hill Parkway
East Rutherford, NJ 07073
Merrill Lynch Fin. Services $5,684
2356 Collections Center
Chicago, IL 60693
Empire Blue Cross Blue Shield $4,267
P.O. Box 1407
Church Street Sta.
New York, New York 10006
CHENIERE ENERGY: Subsidiary Inks 2 Creole Trail Construction Pacts
------------------------------------------------------------------
Cheniere Energy Inc.'s wholly owned subsidiary, Cheniere Creole
Trail Pipeline L.P., entered into two construction agreements with
Sunland Construction Inc. and Sheehan Pipe Line Construction
Company in connection with the construction of the Creole Trail
pipeline system.
As reported in the Troubled Company Reporter on Aug. 10, 2006, the
approximately 252 miles Creole Trail pipeline system is comprised
of 117 miles of dual 42-inch diameter pipe and 18 miles of 42-inch
diameter interconnection.
Sunland Agreement
Pursuant to the Construction Agreement, Sunland, a Louisiana
corporation, will construct the approximately 23.39-mile, 42-inch
pipeline segment of the Creole Trail pipeline system, originating
in Cameron Parish on the west shore of Calcasieu Pass and
traversing Lake Calcasieu to the project terminus on the north
lakeshore in Calcasieu Parish. The work to be performed by
Sunland will include all construction for the Sunland Project,
including providing all equipment, construction equipment, labor,
workmanship, inspection, manufacture, fabrication, installation,
delivery, transportation, storage, assembly, erection and
installation of CCTP-provided equipment and all other items or
tasks that are set forth in the Sunland Agreement.
CCTP will pay Sunland a contract price equal to the sum of (i) the
fixed unit prices multiplied by the actual quantity of unit price
work completed, plus (ii) the lump sum amounts for all lump sum
work performed in accordance with the Sunland Agreement. The
contract price is currently estimated to be $70,078,195.00.
The company will provide credit support of up to $12,000,000 for
CCTP's obligations under the Sunland Agreement in the form of a
guaranty, letter of credit or escrowed funds.
The Construction agreement also provides that if within twelve
months after substantial completion any work is found to be
defective, Sunland will be obligated to immediately and on an
expedited basis correct any such defective work.
Sheehan Agreement
Pursuant to the Construction Agreement, Sheehan, an Oklahoma
general partnership, will construct the 36.1-mile, 42-inch
diameter pipeline segment of the Creole Trail pipeline system,
originating on the north shore of Lake Calcasieu in Calcasieu
Parish and extending northeasterly to the project terminus in
Beauregard Parish. The work to be performed by Sheehan will
include all construction for the Sheehan Project, including
providing all equipment, construction equipment, labor,
workmanship, inspection, manufacture, fabrication, installation,
delivery, transportation, storage, assembly, erection and
installation of CCTP-provided equipment and all other items or
tasks that are set forth in the Sheehan Agreement.
CCTP will pay to Sheehan a contract price based upon the sum of
(i) the fixed unit prices multiplied by the actual quantity of
unit price work completed, plus (ii) the lump sum amounts for all
lump sum work performed in accordance with the Sheehan Agreement.
Sheehan may not bill CCTP for any costs relating to any portion of
the work in excess of the estimated contract price of $65,605,739.
For eighteen months after substantial completion, Sheehan warrants
that the work and each component thereof will be: (i) performed in
the most diligent, efficient, trustworthy and workmanlike manner,
according to the highest professional standards and practices in
the field; (ii) new, complete, fit for the purposes intended, of
suitable grade for the intended function and use and free from
faults and defects; (iii) in accordance with all of the
requirements of the Sheehan Agreement, including in accordance
with applicable law and permits; and (iv) free from encumbrances
to title.
If within eighteen months after substantial completion any work is
found to be defective, Sheehan will be obligated to immediately
and on an expedited basis correct any such defective work.
A full text-copy of the Construction Agreement with Sunland may be
viewed at no charge at http://ResearchArchives.com/t/s?187b
A full text-copy of the Construction Agreement with Sheehan may be
viewed at no charge at http://ResearchArchives.com/t/s?187c
Based in Houston, Texas, Cheniere Energy Inc. (AMEX:LNG) operates
a network of three, 100% owned, onshore LNG receiving terminals,
and related natural gas pipelines, along the Gulf Coast of the
United States. The company is in the early stages of developing a
business to market LNG and natural gas. To a limited extent, it is
also engaged in oil and natural gas exploration and development
activities in the Gulf of Mexico. The company operates four
business segments: LNG receiving terminal, natural gas pipeline,
LNG and natural gas marketing, and oil and gas exploration and
development.
* * *
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Cheniere Energy Inc. and affirmed its 'BB' rating
on the $600 million term B bank loan at Cheniere LNG Holdings LLC,
an indirectly owned, 100% subsidiary of Cheniere Energy. The
outlook is stable.
COLLINS & AIKMAN: Court Approves Second Stipulation With Lear
-------------------------------------------------------------
The Honorable Steven W. Rhodes of the U.S. Bankruptcy Court for
the Eastern District of Michigan approves a second stipulation
between Collins & Aikman Corp. and its debtor-affiliates, and
Lear Corporation regarding certain amounts owed to the Debtors.
As reported in the Troubled Company Reporter on Jan. 9, 2007, the
Debtors and Lear provided each other with certain automotive
component parts. It was agreed on the first stipulation that the
prepetition Lear receivable owed to the Debtors was $4,441,028.
The Debtors also believed that they were owed an additional
$866,622 from Lear on account of prepetition shipments to Lear.
It was also agreed in the First Stipulation that Lear was owed
$331,899. At the time of the First Stipulation, Lear asserted
that it continued to be owed on account of prepetition shipments
to the Debtors an additional $88,209 from the Debtors. Both
parties have reconciled and agreed that the additional receivable
is due to Lear.
On Nov. 3, 2006, Lear filed a motion seeking a declaration that
the automatic stay did not prohibit it from recouping the
prepetition amounts owed to Lear against prepetition amounts that
Lear owed the Debtors.
Under certain agreements, the Debtors transferred certain accounts
to Carcorp Inc., who in turn assigned substantially all accounts
receivable to General Electric Capital Corporation.
GECC alleged that under the terms of the Agreements, around
$1,776,305 of the Lear Receivable was assigned to GECC. It was
agreed in the First Stipulation that $1,323,907 was owed in
respect to the assigned accounts.
On Dec. 22, 2005, GECC filed a complaint for declaratory
judgment and related relief against the Debtors and Lear seeking
payment of the portion of the Lear Receivable assigned to GECC.
In accordance with the First Stipulation, Lear paid the Debtors
$2,697,683 and paid GECC $1,323,907.
On Oct. 13, 2006, the Court approved a stipulation regarding a
Receivables Transfer Agreement between the Debtors and GECC.
The Debtors and Lear now agree that $513,168 of the disputed
prepetition debt is actually owed by various other customers of
the Debtors or is otherwise not payable by Lear; and $273,272 is
based on invoices that were paid by Lear, and therefore, were not
properly categorized as part of the Lear Receivable. The
remaining Disputed Prepetition Debt is $79,512.
Pursuant to the Second Stipulation, the Debtors and Lear have
agreed that:
* Lear will pay $39,756 to the Debtors within five business
days from the entry of Court order, and the payment will
absolve Lear of any and all liability for any debt on
account of the Lear Receivable or the Disputed Prepetition
Debt; and
* Lear may recoup the Reserve and apply it in full
settlement of the Additional Receivable.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in
cockpit modules and automotive floor and acoustic systems and is
a leading supplier of instrument panels, automotive fabric,
plastic-based trim, and convertible top systems. The Company
has a workforce of approximately 23,000 and a network of more
than 100 technical centers, sales offices and manufacturing
sites in 17 countries throughout the world. The Company and its
debtor-affiliates filed for chapter 11 protection on May 17,
2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri,
Esq., at Kirkland & Ellis LLP, represents C&A in its
restructuring. Lazard Freres & Co., LLC, provides the Debtor
with investment banking services. Michael S. Stammer, Esq., at
Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors Committee. When the Debtors
filed for protection from their creditors, they listed
$3,196,700,000 in total assets and US$2,856,600,000 in total
debts. (Collins & Aikman Bankruptcy News, Issue No. 49;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
COLLINS & AIKMAN: Four Parties Question Deal with Major Customers
-----------------------------------------------------------------
Four parties-in-interests objected to Collins & Aikman Corp. and
its debtor-affiliates' deal with major customers and JPMorgan
Chase Bank N.A.:
a. H.S. Die & Engineering Inc.,
b. State of New Hampshire Department of Environmental Services,
c. D&F Corporation, and
d. Brown Corp.
Objections
(1) H.S. Die
H.S. Die & Engineering, Inc., on behalf of itself and its
subsidiaries, including H.S. Die Rantoul Mold Service, L.L.C.,
asks the Court to:
-- enter an order clarifying that the approval of the
Customer Agreement is without prejudice to or impact to
any of its liens or rights against certain tooling it has
produced, or is in the process of producing, for the
Debtors; or
-- deny entry of the final order requested by the Debtors
until a language protecting its rights is included in the
Customer Agreement.
H.S. Die manufactures and repairs tooling and dies and serves as
a supplier of tooling to the Debtors in connection with the
Debtors' work for their customers, including DaimlerChrysler
Corporation, Ford Motor Company, General Motors Corporation, and
Auto Alliance International, Inc.
Robert D. Wolford, Esq., at Miller Johnson, in Grand Rapids,
Michigan, counsel to H.S. Die, notes that the Customer Agreement
requires the entry of a final approval order, which would
provides that, with the exception of the unpaid tooling or
supplier tooling, the Customers own, free and clear of all liens,
claims or encumbrances, all other tooling used in the production
of their respective component parts.
H.S. Die has produced or is in the process of producing certain
tooling for the Debtors, some of which may be considered Customer
Tooling under the terms of the Motion and the Customer Agreement
to the extent the Customer has paid for the H.S. Die Tooling,
Mr. Wolford says.
To the extent the Debtors have not paid H.S. Die for the H.S. Die
Tooling, H.S. Die claims a lien on the H.S. Die Tooling for
amounts owed pursuant to the Michigan Mold Lien Act, MCL 445.611,
et. seq., the Michigan Special Tools Lien Act, MCL 570.541, et.
seq., or the Illinois Tool and Die Lien Act, 770 ILCS 105/0.01,
et. seq., Mr. Wolford informs the Court.
Although the parties to the Customer Agreement may not have
intended the Agreement to impact H.S. Die's lien rights in the
H.S. Die Tooling, the language of the Customer Agreement and the
proposed final order could be argued as having that result, Mr.
Wolford argues.
(2) New Hampshire
Collins & Aikman Automotive Interiors, Inc., formerly known as
Textron Automotive Interiors, Inc., owns and operates a
manufacturing facility in Farmington, New Hampshire, where it
produces plastic automotive components.
Representing the State of New Hampshire Department of
Environmental Services, Peter C.L. Roth, senior assistant
attorney general, Environmental Protection Bureau, states that
the Farmington Plant site is contaminated by chlorinated solvents
and other volatile organic compounds that the Debtor released
into the soil and groundwater. The Debtor is strictly liable for
hazardous waste contamination in the soil and groundwater at the
Farmington Plant under the applicable New Hampshire state law,
N.H. RSA 147-B:10, he adds.
The State issued a groundwater management permit dated Aug. 30,
2002, to the Debtor, which governs the current remedial efforts
being taken at the Farmington Plant site by the Debtor and its
consultants.
Mr. Roth says that under the Permit, the Debtor must monitor
groundwater quality and submit data to the State, including a
summary in a yearly annual report. The Debtor must maintain and
operate a hydraulic containment system, evaluate system
performance yearly in the Annual Report, and attain the
performance standards for the system specified in condition 11(B)
of the Permit.
According to Mr. Roth, the Debtor is in violation of Permit
condition 10 and must complete a remedial action plan revision to
achieve compliance with the Ambient Groundwater Quality Standards
established by state law at the final groundwater management zone
boundary within an expedited timeframe. The State can seek
injunctive relief and penalties up to $10,000 per day against
violations of the Permit under the state law, N.H. RSA 485-C:19,
Mr. Roth informs the Court.
The Debtor funded certain activities associated with the control
and remediation of the contaminants at the Farmington Plant and
taken steps to comply with the Permit. However, the Customer
Agreement appears to shift costs for the Farmington Plant to
others in accordance with a funding protocol and budget, Mr. Roth
argues.
The Debtor's obligation to pay for costs of the Farmington Plant
is constrained and determined by the Customer Agreement and other
orders. Neither the funding protocol nor the budget was provided
despite repeated requests, Mr. Roth maintains. Consequently, the
State cannot determine whether the Debtor will be able to
continue to take necessary steps to comply with State law in the
operation of its New Hampshire facilities, he adds.
Mr. Roth asserts that a budget for environmental compliance
should be provided, and argues that the Debtor cannot use the
Customer Agreement to:
* avoid its responsibilities under generally applicable
State laws; and
Approval of the Customer Agreement does not exempt the
Debtor from its responsibilities under environmental
permits and regulations. Moreover, the costs of
compliance with the Permit are administrative expenses
against the estate.
* constructively abandon the Farmington Plant.
A debtor cannot abandon property of the estate without
taking steps to ensure that environmental conditions at
the property do not pose a threat to public health and
safety. The Customer Agreement appears to cede the
Debtor's financial control over the Farmington Plant to
the major Plastics & Convertibles Customers until the exit
date or closing date when presumably the facility's fate
will be determined, Mr. Roth points out.
If the Customer Agreement does not provide for
environmental compliance costs, the Debtor is effectively
abandoning the Farmington Plant to the State and the
customers, Mr. Roth asserts.
The State can seek injunctive relief and civil penalties in the
New Hampshire courts if compliance costs are not provided,
Mr. Roth notes. The Debtor's liability for civil penalties would
constitute administrative expenses, he adds.
New Hampshire asks the Court to deny final approval of the
Customer Agreement, or in the alternative, grant it only upon the
express condition that the Debtor demonstrates to the State's and
the Court's satisfaction that the Customer Agreement, the Funding
Protocol, and the budget provide for and allow appropriate
funding of environmental compliance costs, including costs
associated with compliance with the Permit.
(3) D&F
D&F Corporation is a tooling supplier with a lien against certain
tool fixtures it supplied to the Debtors, preserved pursuant to
the Michigan Moldbuilder's Lien Act, MCLA 445.611 et. seq.
D&F previously filed a motion requesting relief from the
automatic stay, or in the alternative, for an order granting
adequate protection in connection with the Debtors' continued use
of the property secured by D&F's molder's lien. A stipulated
protection order was entered resolving D&F's motion, and
protecting D&F's rights.
The Debtors owed D&F $175,999 for the fixtures, and have been
making monthly adequate protection payments -- as of January 5,
2007, six payments of $4,500, or a total of $27,000 have been
made -- under the terms of the D&F Order. The Debtors are also
obligated to give D&F written notice when the D&F fixtures are no
longer in the Debtors' possession, and to notify D&F and its
counsel with 10 days of any information received by the Debtors
indicating a reduction of the useful life of the fixtures or "the
duration or resourcing of any customer program for which the
fixtures are used."
The interim order approving the Customer Agreement authorizes the
Debtors to resource production, and the Debtors have failed to
give any written notice of the proposed resourcing of production,
Frederick A. Berg, Esq., at Kotz, Sangster, Wysocki & Berg, P.C.,
in Detroit, Michigan, notes.
The Interim Order further proposes that customers pay the
"supplier" -- Collins & Aikman Corp. -- for unpaid tooling.
Mr. Berg argues that the Interim Order prejudices D&F in that:
-- Collins should not receive payment for tooling supplied by
D&F, or other tooling suppliers, for which it has not
already paid the tooling supplier, unless the tooling
supplier's lien attaches to proceeds, but if there are no
proceeds, then the lien should survive;
-- the Debtors should not be permitted to terminate adequate
protection payments or transfer the liened property unless
the Court also lifts the automatic stay to permit D&F, or
other tooling suppliers, to recover possession of
collateral secured by statutory liens; and
-- the Interim Order does not propose to transfer the liens
of D&F or other unpaid tooling suppliers to proceeds, it
only transfers Collins' lien to proceeds.
Mr. Berg points out that neither the Interim Order nor the
Customer Agreement addresses how unpaid tooling supplier liens
will be paid when Collins has previously been paid in full by
Customers for the tools. The Customers will not pay for the
tools that have, upon information and belief, been previously
paid for. Accordingly, it is arguable there are no proceeds on
which D&F's lien may attach, he says.
The tools should not be transferred by Collins free and clear of
liens as the Interim Order proposes. The liens must remain
attached, or the tools paid for, Mr. Berg asserts.
D&F objects to the entry of a final order approving the Motion,
and asks the Court to rescind the Interim Order.
(4) Brown Corp.
Brown Corp. is a Tier II supplier for certain of the Debtors'
Customers, which means that Customers contracted with the Debtors
to produce the component parts pursuant to certain purchase
orders.
The Debtors, in turn, arranged with Brown to produce certain
component parts, and to acquire the tooling to manufacture the
Brown component parts. The Debtors purchased production parts
directly from Brown for the Brown Component Parts and in most
cases arranged for Brown to acquire the Brown tooling.
Brown has not been paid for all of the Brown Tooling or been paid
for parts promised with the Brown Tooling, Mark L. Collins, Esq.,
at Varnum, Riddering, Schmidt & Howlett LLP, in Grand Rapids,
Michigan, informs the Court.
Mr. Collins notes that Section 17 of the executed Customer
Agreement includes language allowing the Customers the option of
having the Debtors assign existing supplier contracts without
stating or recognizing that the rights of a vendor to the Debtors
are independent of the agreement between the Debtors and
customers.
Brown objects to the Motion to the extent it implies that the
Customers and Debtors can, via contract, motion or otherwise,
prejudice or require Brown to act in any way inconsistent with
Brown's rights under either prior or existing arrangements to the
Debtors.
Mr. Collins also notes that Section 19 of the Customer Agreement
may allow Customers to use the motion and any approving order as
a means to obtain possession of the Brown Tooling, which has not
been paid for or which may be subject to lien rights in favor of
Brown arising under the Michigan Tooling Lien statues, MCL
510.541, et. seq. or other similar statues or laws in other
states.
While Brown acknowledges that the Debtors and Customers may only
intend that the Motion pertain to tooling in the Debtors'
possession, the Motion is ambiguous, Mr. Collins tells the Court.
For any Customer to assert that it owns the Brown Tooling, free
and clear would be in direct contravention of Brown's ownership
rights and lien rights in the Brown Tooling. The Customer
Agreement cannot circumvent and preempt Brown's ownership in the
Brown Tooling or other lien rights, Mr. Collins maintains.
The proposed order approving the Customer Agreement gives a
Customer the right to take immediate possession of the Tooling,
Mr. Collins notes. The Debtors' requested relief should be
limited to exclude the Brown Tooling or other tooling in the
possession of third parties or otherwise subject to the rights of
third parties, and the Customer's rights should be subject to
Brown's ownership or other lien rights with respect to the
tooling, Mr. Collins asserts.
Brown asks Judge Rhodes to limit the relief requested by the
Debtor in the Motion so as to:
-- clarify that any arrangement entered into between the
Debtors and the Customers to transition the Debtors'
supply arrangements is without prejudice to Brown's rights
with respect to prior or existing supply arrangements
between Brown and the Debtors; and
-- preclude Customers from taking ownership of the Brown
Tooling in contravention of Brown's rights or free and
clear of Brown's interests and to preclude Customers from
taking any actions to recover possession of the Brown
Tooling.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in
cockpit modules and automotive floor and acoustic systems and is
a leading supplier of instrument panels, automotive fabric,
plastic-based trim, and convertible top systems. The Company
has a workforce of approximately 23,000 and a network of more
than 100 technical centers, sales offices and manufacturing
sites in 17 countries throughout the world. The Company and its
debtor-affiliates filed for chapter 11 protection on May 17,
2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri,
Esq., at Kirkland & Ellis LLP, represents C&A in its
restructuring. Lazard Freres & Co., LLC, provides the Debtor
with investment banking services. Michael S. Stammer, Esq., at
Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors Committee. When the Debtors
filed for protection from their creditors, they listed
$3,196,700,000 in total assets and US$2,856,600,000 in total
debts. (Collins & Aikman Bankruptcy News, Issue No. 49;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
COLLINS & AIKMAN: Judge Rhodes Approves ASC Inc. License Agreement
------------------------------------------------------------------
The Honorable Steven W. Rhodes of the U.S. Bankruptcy Court for
the Eastern District of Michigan approved a settlement and license
agreement between Collins & Aikman Corp. and its debtor-
affiliates, and ASC Incorporated.
No plan of reorganization of the Debtors will contain terms,
provisions or treatment of the Settlement in a manner
inconsistent with the Settlement.
ASC is granted relief from the automatic stay of Section 362 of
the Bankruptcy Code to exercise any and all rights and remedies
available to it under the Settlement upon Dura Convertible
Systems Inc.'s uncured breach.
Dura Convertible is Collins & Aikman's debtor-affiliate.
In a TCR Report on Jan. 8, 2007, Judge Rhodes authorized the
Debtors to file under seal a settlement and license agreement
between Dura Convertible Systems Inc. and ASC Incorporated
resolving litigation between them.
As reported in the Troubled Company Reporter on Dec. 20, 2006,
ASC commenced on March 30, 2006, Adversary Proceeding No.
06-04507 in the Bankruptcy Court against Dura. The ASC Complaint
alleged four counts of patent infringement relating to
convertible tops produced by Dura for the Dodge Viper and Ford
Mustang. Specifically, the ASC Complaint alleged infringement
of:
(a) US Reissue Patent No. RE38,546;
(b) US Design Patent No. D442,541;
(c) US Design Patent No. D464,605 and
(d) US Patent No. 5,785,375.
Dura filed its answer to the ASC Complaint on June 21, 2006, and
asserted counterclaims seeking declaratory judgments of non-
infringement and invalidity of the ASC Patents.
The Bankruptcy Court held an initial scheduling conference on
Aug. 14, 2006. The triable issues of (a) liability and (b)
damages were bifurcated and the Court entered an order setting a
trial date of Jan. 9, 2007, on the issue of liability.
The parties have each served discovery requests on the issues of
liability and damages. To alleviate the potential costs to the
Debtors' estates, Dura requested that the discovery process be
bifurcated as well, however, this request was denied. Dura
produced hundreds of thousands of documents and responded to ASC's
written discovery. On the verge of spending exorbitant sums to
conduct discovery, the Parties agreed to a stay of discovery as
they pursue a settlement.
Dura and ASC have engaged in significant negotiations to resolve
the ASC Lawsuit. Dura and ASC have agreed to resolve the ASC
Lawsuit pursuant to the terms and conditions in the Settlement.
The Settlement provided, among other things, that Dura will have
a license to the ASC Patents for the Ford Mustang and Dodge Viper
convertible roof assemblies. The Settlement also allows for the
assignment of the license for the ASC Patents to a potential
purchaser.
The Debtors also agree to pay for a royalty fee, which is far
less than the royalty fee that would likely be determined in the
event that ASC were to prevail in the ASC Lawsuit.
The Ford Mustang and Dodge Viper convertible roof systems can
continue to be manufactured and sold at a profit by Dura after
paying the royalty fee to ASC.
Outside of the bankruptcy process, the information contained in
the Settlement generally is held to be confidential because,
otherwise, Dura and ASC believe would be competitively
disadvantaged in the operation of their businesses by the
disclosure of the information.
The ASC licenses the ASC Patents for use by Dura in the production
and sale of convertible roof systems for the Ford Mustang and
Dodge Viper. If the competitors of Dura or ASC knew the terms of
the Settlement, it could provide them with a competitive advantage
in their dealings with ASC or Dura, as the case may be. Further,
if Dura's customers were aware of the terms of the Settlement, it
could provide them with a competitive advantage in negotiating
agreements with Dura.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in
cockpit modules and automotive floor and acoustic systems and is
a leading supplier of instrument panels, automotive fabric,
plastic-based trim, and convertible top systems. The Company
has a workforce of approximately 23,000 and a network of more
than 100 technical centers, sales offices and manufacturing
sites in 17 countries throughout the world. The Company and its
debtor-affiliates filed for chapter 11 protection on May 17,
2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri,
Esq., at Kirkland & Ellis LLP, represents C&A in its
restructuring. Lazard Freres & Co., LLC, provides the Debtor
with investment banking services. Michael S. Stammer, Esq., at
Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors Committee. When the Debtors
filed for protection from their creditors, they listed
$3,196,700,000 in total assets and US$2,856,600,000 in total
debts. (Collins & Aikman Bankruptcy News, Issue No. 49;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
COUDERT BROTHERS: Court Okays McGrigors LLP as Special Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New
York gave Coudert Brothers LLP permission to employ McGrigors
LLP as its English special counsel, nunc pro tunc to Sept. 22,
2006.
McGrigors will represent the Debtor with respect to potential
malpractice claims in England and general issues related to the
wind-down of Debtor's London office. The firm's responsibilities
will include serving as counsel of record in Norman's Bay Limited
v. Coudert Brothers, in the High Court of England and Wales -- an
action arising out of allegations of malpractice.
The hourly rates of the McGrigors attorneys who are expected to
perform services for the Debtor are:
Level of Employment Hourly Rate
------------------- -----------
Partners $680
Associates $555
Assistant Solicitors $270-$485
Trainee Solicitors $195
The Debtor owed McGrigors approximately $46,731 for services the
firm rendered prepetition.
Allan David Reason, a partner at McGrigors, assured the Court that
his firm does not hold any interest materially adverse to the
Debtor's estate.
Mr. Reason can be reached at:
McGrigors LLP
5 Old Bailey
London EC4M 7BA, England
Coudert Brothers LLP was an international law firm specializing in
complex cross border transactions and dispute resolution. The
firm had operations in Australia and China. The Debtor filed for
Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No.
06-12226). John E. Jureller, Jr., Esq., and Tracy L. Klestadt,
Esq., at Klestadt & Winters, LLP, represents the Debtor in its
restructuring efforts. Brian F. Moore, Esq., and David J. Adler,
Esq., at McCarter & English, LLP, represent the Official Committee
Of Unsecured Creditors. In its schedules of assets and debts,
Coudert listed total assets of $29,968,033 and total debts of
US$18,261,380. The Debtor's exclusive period to file a chapter 11
plan expires on Jan. 20, 2007.
COUDERT BROTHERS: Court Sets Jan. 31 as General Claims Bar Date
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
set 5:00 p.m., Eastern Time, on Jan. 31, 2007, as the last day for
persons owed money by Coudert Brothers LLP to file their proofs of
claim against the Debtor. The January 31 bar date applies only to
claims that arose prior to Sept. 22, 2006.
Governmental units have until March 21, 2007, to file their
claims.
Proofs of claim must be received on or before their respective bar
dates by:
a) if by mail:
United States Bankruptcy Court
Southern District of New York
Coudert Brothers LLP
Claims Processing Center
Bowling Green Station
P.O. Box 5045
New York, NY 10274-5045
b) if by messenger or overnight courier:
United States Bankruptcy Court
Southern District of New York
Coudert Brothers LLP
Claims Processing Center
Room 534, One Bowling Green
New York, NY 10004-1408
Coudert Brothers LLP was an international law firm specializing in
complex cross border transactions and dispute resolution. The
firm had operations in Australia and China.
Coudert Brothers LLP filed for Chapter 11 protection on Sept. 22,
2006 (Bankr. S.D.N.Y. Case No.06-12226). John E. Jureller, Jr.,
Esq. and Tracy L. Klestadt, Esq. at Klestadt & Winters, LLP,
represent the Debtor in its restructuring efforts. Brian F.
Moore, Esq. and David J. Adler, Esq. at McCarter & English LLP
represent the Official Committee Of Unsecured Creditors. In its
schedules of assets and debts, Coudert listed total assets of
$29,968,033 and total debts of $18,261,380. The Debtor's
exclusive period to file a chapter 11 plan expires on Jan. 20,
2007.
CREATIVE FOODS: Wants Access to First Tennessee's Cash Collateral
-----------------------------------------------------------------
Creative Foods LLC asks the U.S. Bankruptcy Court for the Eastern
District of Arkansas for permission to use the cash collateral
securing repayment of its debts to First Tennessee Bank N.A.,
pursuant to Section 363 of the Bankruptcy Code.
The Debtor will use the cash collateral in accordance with the
terms of a proposed budget, a copy of which is available for free
at http://ResearchArchives.com/t/s?187f
The Debtor tells the Court that its needs the cash collateral in
order to continue the operation of its business and to preserve
the value of its assets.
As adequate protection, the Debtor grants First Tennessee a valid
and perfected lien on and security interest in, any and all of the
Debtor's rights, titles, and interests in and to all of their
goods, property, and interests in property and all assets of the
Debtor.
Obligations
On or about Nov. 20, 2003, the Debtor, as borrower and First
Tennessee, as lender and as agent for Farmers Bank and Trust,
executed these documents:
* a revolving credit note payable to First Tennessee in the
principal amount of $3,928,500;
* a term loan note payable to First Tennessee in the amount of
$6,071,500;
* a revolving credit note payable to Farms Bank and Trust in
the principal amount of $1,571,500; and
* a term loan note payable to Farmers Bank in the amount of
$2,428,500
These obligations are secured by liens in substantially all of the
assets of the Debtor, including real property located in
Mississippi County, Arkansas specifically including all accounts
receivable and proceeds.
First Tennessee alleges that as of its bankruptcy filing, the
Debtor's outstanding indebtedness owed under the Loan Agreement
was at least $13,500,000.
Based in Osceola, Arkansas, Creative Foods LLC manufactures and
exports natural and imitation margarine. The company and its
affiliate, Osceola Foods Inc., filed for chapter 11 protection on
Jan. 3, 2007 (Bankr. E.D. Ark. Case Nos. 07-10043 & 07-10044).
Michael Patrick Coury, Esq., at Farris, Mathews, Branan, Bobango,
Hellen & Dunlap PLC, represents the Debtors. When the Debtors
filed for protection from their creditors, they listed estimated
assets and debts between $1 million and $100 million.
CWABS ASSET: Moody's Puts Ba1 Rating on Class B Certificates
------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by CWABS Asset-Backed Certificates Trust 2006-
BC5 and ratings ranging from Aa1 to Ba1 to the subordinate
certificates in the deal.
The securitization is backed by adjustable-rate and fixed-rate
subprime mortgage loans originated by various originators. The
ratings are based primarily on the credit quality of the loans and
on protection against credit losses by subordination, excess
spread, and overcollateralization. The ratings also benefit from
an interest-rate swap agreement provided by Deutsche Bank AG, New
York Branch. Moody's expects collateral losses to range from 4%
to 4.5%.
Countrywide Home Loans Servicing LP will act as master servicer of
the mortgage loans.
These are the rating actions:
* CWABS Asset-Backed Certificates Trust 2006-BC5
* Asset-Backed Certificates, Series 2006-BC5
Class 1-A, Assigned Aaa
Class 2-A-1, Assigned Aaa
Class 2-A-2, Assigned Aaa
Class 2-A-3, Assigned Aaa
Class 2-A-4, Assigned Aaa
Class A-R, Assigned Aaa
Class M-1, Assigned Aa1
Class M-2, Assigned Aa2
Class M-3, Assigned Aa3
Class M-4, Assigned A1
Class M-5, Assigned A2
Class M-6, Assigned A3
Class M-7, Assigned Baa1
Class M-8, Assigned Baa2
Class M-9, Assigned Baa3
Class B, Assigned Ba1
The Class B certificate was sold in privately negotiated
transactions without registration under the Securities Act of 1933
under circumstances reasonably designed to preclude a distribution
thereof in violation of the Act. The issuance has been designed
to permit resale under Rule 144A.
DAIMLERCHRYSLER: Might Delay Releasing 2006 Financial Statements
----------------------------------------------------------------
DaimlerChrysler AG's fourth quarter and full year 2006 financial
statements may not be released as planned on Feb. 14, and the
company's April 4 annual general assembly may be postponed, a
company spokeswoman told the Frankfurter Allgemeine
Sonntagszeitung.
She confirmed that the delay is caused by the refusal of the
company's works council to approve overtime work for accountants
to complete the annual report on time, reports said.
The prohibition to work extra hours by the council is in protest
against management plans to cut 6,000 administrative jobs.
The company plans to move some administrative work to Prague where
labor costs are lower than in Germany.
About DaimlerChrysler
Based in Stuttgart, Germany, DaimlerChrysler AG --
http://www.daimlerchrysler.com/-- develops, manufactures,
distributes, and sells various automotive products, primarily
passenger cars, light trucks, and commercial vehicles worldwide.
It primarily operates in four segments: Mercedes Car Group,
Chrysler Group, Commercial Vehicles, and Financial Services.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler, Jeep,
and Dodge brand names. It also sells parts and accessories under
the MOPAR brand.
The Chrysler Group is facing a difficult market environment in the
United States with excess inventory, non-competitive legacy costs
for employees and retirees, continuing high fuel prices and a
stronger shift in demand toward smaller vehicles. At the same
time, key competitors have further increased margin and volume
pressures -- particularly on light trucks -- by making significant
price concessions. In addition, increased interest rates caused
higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and cut
costs in the short term are being examined at all stages of the
value chain, in addition to structural changes being reviewed as
well.
DANA CORP: Trade Creditors Sell 203 Claims Totaling $31.7 Million
-----------------------------------------------------------------
Papers filed with the U.S. Bankruptcy Court for the Southern
District of New York showed claims transfers in the months of
October, November, and December.
December Claims Transfers
In December 2006, the Clerk of the Bankruptcy Court recorded 63
claims transfers totaling $12,231,303, to:
(a) Silver Point Group, LLC:
Transferor Claim Amount
---------- ------------
Tracetech, Inc. $1,264,295
Kaiser Aluminum Fabricated 467,946
Eaton Corporation 423,150
Eaton Corporation 159,093
Eaton Electrical, Inc. 110,014
JB Tool & Die & Engineering 103,360
Almco Steel Products 100,412
Eaton MDH Company, Inc. 93,562
Eaton Aeroquip, Inc. 45,329
Almco Steel Products 44,196
Eaton Aeroquip, Inc. 20,083
Eaton Corporation 20,000
Eaton Corporation 2,108
Eaton Hydraulics, Inc. 2,062
Eaton Aeroquip, Inc. 1,202
Eaton Aerospace, LLC 528
(b) Amroc Investments, LLC:
Transferor Claim Amount
---------- ------------
Ulbrich of Georgia $406,402
McDaniel Machinery, Inc. 305,750
Jonesville Tool & Mfg. 70,916
Ohio Gasket & Shim Co. 41,239
Grand Haven Steel Products 40,727
Arkansas Industrial Machinery 35,301
West Machine & Tool, Inc. 34,839
Jonesville Tool & Mfg. 18,095
Bailey Company, Inc. 16,243
West Field Services, Inc. 13,825
West Field Services, Inc. 13,825
Jonesville Tool & Mfg. 12,619
Ohio Gasket & Shim Co. 3,090
(c) Sierra Liquidity Fund:
Transferor Claim Amount
---------- ------------
Snadvik Materials Technology $94,716
Columbia City Municipal 8,867
BWP Industries, Inc. 968
Factoria 838
Modern Electrical Contracting 653
Allstar Fence & Supply Co. 500
(d) Debt Acquisition Company of America:
Transferor Claim Amount
---------- ------------
Penn Fibre Plastics, Inc. $1,635
Gibbs Wire & Steel Co., Inc. 904
Rochester Hills Corp. Center 253
(e) Contrarian Funds, LLC:
Transferor Claim Amount
---------- ------------
Engineered Materials Solutions $97,113
Moehrle, Inc. 80,400
Engineered Materials Solutions 77,763
AP&T North America, Inc. 22,326
(f) Merrill Lynch Credit Products, LLC:
Transferor Claim Amount
---------- ------------
Ludlum Corporation $741,250
United States Steel Corp. 696,503
Three claims filed by Ridout & Maybee, LLP, totaling $109,258,
were transferred to Distressed/High Yield Trading Opportunities
Fund.
Two claims filed by Prolift Industrial Equipment, aggregating
$242,178, were transferred to Cargill Financial Markets, PLC.
Two claims filed by the Milton Makoski Estate, totaling
$1,450,558, were transferred to 3V Capital Master Fund, Ltd.
The Court Clerk also recorded 12 claims transfers to various
transferees:
Transferor Transferee Claim Amount
---------- ---------- ------------
Wesco Distribution, Inc. Argo Partners $4,046,009
Webb Wheel Products, Inc. Lehman Commercial 616,272
Oakley Industries, Inc. Longacre Master 69,395
Mitchell Water & Sewer Fair Harbor Capital 2,205
Refrigeration Appliance Trade-Debt 530
Rexnord Corporation Redrock Capital -
H.C. Starck, Inc. Redrock Capital -
Atmos Energy Redrock Capital -
Garrison Service Corp. Hain Capital -
WJ Carey Construction Hain Capital -
Standard Locknut, Inc. Hain Capital -
Mansfield Brass Hain Capital -
October and November Claims Transfers
In October and November 2006, the Clerk of the Bankruptcy Court
recorded 140 claim transfers totaling $19,471,143, to:
Transferee Transfers Total Amount
---------- --------- ------------
3V Capital Master Fund, Ltd. 5 $9,418,230
Longacre Master Fund 20 3,776,455
Amroc Investments, LLC 24 2,506,792
JPMorgan Chase Bank, N.A. 2 1,675,532
Merrill Lynch Credit Products, LLC 6 1,212,944
Madison Investment Trust 11 277,373
Redrock Capital Partners, LLC 4 234,841
Revenue Management 1 158,992
Fair Harbor Capital, LLC 1 65,476
Sierra Liquidity Fund 6 55,652
Airgas, Inc. 8 44,548
Debt Acquisition 36 38,973
Trade-Debt.net 6 5,335
Hain Capital 10 -
Airgas can be reached through Nick Chiros, at 259 Radnor-Chester
Road, Suite 100, P.O. Box 6675, in Radnor, Pennsylvania.
About Dana Corp.
Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs
and manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies. Dana employs 46,000 people in
28 countries. Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.
The company and its affiliates filed for chapter 11 protection on
Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30,
2005, the Debtors listed $7,900,000,000 in total assets and
$6,800,000,000 in total debts.
Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in
Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represent the Debtors. Henry S. Miller at
Miller Buckfire & Co., LLC, serves as the Debtors' financial
advisor and investment banker. Ted Stenger from AlixPartners
serves as Dana's Chief Restructuring Officer.
Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors. Fried,
Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the
Official Committee of Equity Security Holders. Stahl Cowen
Crowley, LLC serves as counsel to the Official Committee of
Non-Union Retirees.
The Debtors' exclusive period to file a plan expires on Sept. 3,
2007. They have until Nov. 2, 2007, to solicit acceptances to
that plan. (Dana Corporation Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
DANA CORP: Will Share Parts Production for Ford's F-150 Truck
-------------------------------------------------------------
Dana Corporation will share production of structural components
and assembly of frames for the next generation of Ford Motor
Company's F-150 trucks, Michael L. DeBacker, Dana Corporation's
vice president, general counsel and secretary, discloses in a
regulatory filing with the Securities and Exchange Commission.
Dana Corp., however, will continue to supply 100% of hydroformed
side rails and a significant portion of other structural
components for the frames, Mr. DeBacker adds.
Greg Bensinger of Bloomberg News says Magna International, Inc.,
based in Aurora, Ontario, won the portion of the Ford contract
that Dana Corp. lost.
About Dana Corp.
Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs
and manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies. Dana employs 46,000 people in
28 countries. Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.
The company and its affiliates filed for chapter 11 protection on
Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30,
2005, the Debtors listed $7,900,000,000 in total assets and
$6,800,000,000 in total debts.
Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in
Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represent the Debtors. Henry S. Miller at
Miller Buckfire & Co., LLC, serves as the Debtors' financial
advisor and investment banker. Ted Stenger from AlixPartners
serves as Dana's Chief Restructuring Officer.
Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors. Fried,
Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the
Official Committee of Equity Security Holders. Stahl Cowen
Crowley, LLC serves as counsel to the Official Committee of
Non-Union Retirees.
The Debtors' exclusive period to file a plan expires on Sept. 3,
2007. They have until Nov. 2, 2007, to solicit acceptances to
that plan. (Dana Corporation Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
DAVID'S BRIDAL: Moody's Places Corporate Family Rating at B2
------------------------------------------------------------
Moody's Investors Service assigned first time ratings to David's
Bridal Inc., including a corporate family rating of B2 and a
senior secured term loan rating of B2.
The rating outlook is stable.
The ratings are conditioned upon review of final documentation.
These are the rating actions:
-- Corporate family rating at B2;
-- Probability-of-default rating at B2; and,
-- $315 million senior secured term loan at B2 LGD3, 44%.
David's Bridal along with Priscilla's of Boston are being sold by
Federated Department Stores to Leonard Green & Partners for
approximately $750 million. The acquisition will be financed with
the proceeds of the proposed $315 million term loan along with an
unrated privately placed subordinated notes offering, and an
equity contribution by Leonard Green.
The B2 corporate family rating of David's Bridal reflects post-
transaction credit metrics that will be weak, particularly the
very high leverage and low cash flow coverage. The B2 rating is
further supported by the company's high seasonality, small scale
with top line revenues for the LTM period ended Sept. 30, 2006 of
$623 million, and its shareholder friendly financial policies.
Offsetting these high yield characteristics are several investment
grade characteristics including:
-- its national diversification:
-- leading position in the very defined bridal sub-sector of
retail;
-- profitability that is in line with its apparel retailing
peer group; and,
-- its consistent comparable store sales growth.
The stable outlook reflects Moody's expectation that the company
will continue to reasonably grow comparable store revenues,
improve operating margins, and maintain moderately positive free
cash flow and adequate liquidity.
Given the magnitude of David's Bridal post-transaction leverage,
an upgrade is unlikely in the intermediate term. Over the longer
term, an upgrade would require continuing solid operating
performance coupled with Debt/EBITDA being sustained below 6x and
FCF/Debt above 5% on a sustainable basis.
Conversely, negative rating pressure would develop if:
-- operating performance is weaker than expected;
-- liquidity erodes; or,
-- if overall comparable store sales were to become negative.
Quantitatively, ratings would be lowered should, as calculated
using Moody's standard adjustments, Debt/EBITDA rise above 7.5x,
EBITA/IE fall below 1x, or if FCF/Debt remains negative.
The $315 million senior secured term loan is rated at the
corporate family rating reflecting its weak collateral package, as
all the accounts receivable and inventory will be pledged to the
asset based revolving credit facility, its lack of meaningful
financial covenants, and its size and scale relative to the whole
capital structure. The senior secured term loan will be secured
by all of the assets of the company, excluding accounts receivable
and inventory. However, given the lack of sizable tangible assets
excluding accounts receivable and inventory, the term loan is in
essence secured by goodwill. The term loan will also be
guaranteed by Priscilla's of Boston and DBP Holding Corp.
David's Bridal, Inc., headquartered in Conshohocken, Pennsylvania,
is the leading national bridal specialty retailer with an
estimated 30% market share for bridal gowns in 2006. The company
operates 281 stores in 46 states and 2 stores in Puerto Rico.
Revenues for the LTM period ended Sept. 30, 2006 were
$623 million.
EMI GROUP: Chairman & CEO Levy and Vice Chairman Munns Resign
-------------------------------------------------------------
Alain Levy, who has been chairman and chief executive officer of
EMI Music since October 2001, is stepping down from the Board and
both he and David Munns, vice chairman of EMI Music, will be
leaving the Company effective immediately.
Eric Nicoli, who has been executive chairman of EMI Group since
July 1999, becomes chief executive officer of EMI Group and, as
part of this role, takes direct responsibility for the management
of EMI Music, the Group's recorded music business.
John Gildersleeve, currently non-executive deputy chairman of EMI
Group and senior non-executive director, becomes non-executive
chairman of EMI Group.
Martin Stewart continues as chief financial officer of EMI Group
and, as part of this role, takes direct responsibility for the
management of the finance function of EMI Music.
Realignment
To secure sustainable growth in underlying profits and cash flow,
EMI Group plc will re-align its investment priorities and focus
its resources. This will include:
-- De-layering the Group's management structure to allow a
more streamlined approach, particularly within the
developing digital landscape,
-- Investing and operating in territories and business areas
where superior, secure returns can be generated, and
reducing exposure to territories and business areas in which
these conditions are not satisfied,
-- Continuing expansion of the Group's presence across the
music value chain,
-- Extracting revenue and cost synergies between recorded music
and music publishing,
-- Strengthening EMI's digital and consumer marketing
capabilities, and
-- Pursuing partnerships, which allow EMI to extract further
leverage from its operating infrastructure (e.g.
distribution and administration arrangements).
The company believes that the move will align EMI's business more
closely to its operating environment, allow a continuing strong
focus on artist and songwriter development, re-allocate resources
to attractive growth areas, increase the level and certainty of
overall return on investment, and significantly improve margins,
and the generation of free cash flow.
Restructuring Program
As part of its focus on delivering higher and more certain returns
on investment, the Group will significantly reduce the size of its
cost base.
This cost saving plan is expected to deliver GBP110 million of
annual savings across the Group (incremental to previously
announced cost saving initiatives), with over half of these
savings being reflected in the financial results for the year
ended March 31, 2008, and the full GBP110 million reflected in the
financial results for the year ended March 31, 2009.
The significant majority of these cost savings will be achieved
through the elimination of fixed costs with a small proportion
resulting from a permanent reduction in the variable cost base.
The initiatives will impact all regions in which EMI operates.
The cost savings will be generated largely from EMI Music, with
the remainder from EMI Music Publishing.
Specific fixed cost saving initiatives will include the reduction
of front and back-office overhead and an increase in shared
services in both divisions and across all regions. In addition
there will be a significant reduction in central overheads at EMI
Music and EMI Group.
The one-off cash cost of implementing the restructuring is
expected to be no more than GBP150 million. EMI has secured bank
financing commitments with respect to both this entire amount and
the recently announced purchase of the outstanding 45% minority
interest in its Japanese subsidiary Toshiba-EMI.
In the context of these restructuring initiatives, the company is
reviewing its balance sheet. This will be completed by March 31,
2007, and it is expected to result in a non-cash charge being
reported separately in the Group's 2006 and 2007 income statement.
The cash flow generation of the business is expected to strengthen
significantly when the gains from the cost savings are fully
realized. In this context, the Board will continue to review the
optimal capital structure for the Group.
Outlook
EMI Music's second half financial performance to date combined
with the expectation of continuing weak market conditions, and the
expected significant disruption to the business from the
implementation of the restructuring initiatives, has led to a
change in the outlook for the Group for the financial year ended
March 31, 2007. As a result, EMI Music's full year revenues could
decline, year on year, by approximately 6% to 10% on a constant
currency basis.
The Group expects that disruption from the restructuring
initiatives will continue into the early months of the following
financial year, constraining revenue at EMI Music in the year
ended March 31, 2008, but expects to see a significant improvement
in margins as cost savings are delivered.
Headquartered in London, United Kingdom, EMI Group PLC --
http://www.emigroup.com/-- is the world's largest independent
music company, operating directly in 50 countries and with
licensees in a further 20. The group has operations in China,
Brazil, and Hungary. The group employs over 6,600 people.
Revenues in 2005 were near GBP2 billion and operating profit
generated was over GBP225 million.
EMI Music operates the world famous recording facilities Abbey
Road Studios in London and Capitol Studios in Los Angeles.
* * *
As reported in the Troubled Company Reporter-Europe on Dec. 21,
2006, Standard & Poor's Ratings Services affirmed its 'BB/B' long-
and short-term corporate credit and 'BB' senior unsecured debt
ratings on U.K.-based music major EMI Group PLC.
ENERGY TRANSFER: First Fiscal Quarter Net Income Decreases to $71M
------------------------------------------------------------------
Energy Transfer Partners L.P. reported $71.032 million of net
income for the first fiscal quarter ended Nov. 30, 2006, compared
with $119.808 million of net income for the same period in 2005.
At the same time, the company reported $1.388 billion of total
revenues for the three months ended Nov. 30, 2006, compared with
$2.416 billion of revenues for the same period in 2005.
Midstream Segment
For the three months ended Nov. 30, 2006, midstream's gross margin
decreased by $63.5 million primarily due to these factors:
-- Decrease in net trading revenues
The decrease was due to gains recognized during the three
months ending Nov. 30, 2005, as a result of the volatility
caused by the hurricanes that struck the east Texas and
Louisiana coastlines in August and September 2005, and
-- Decrease in non-trading margin from its marketing
activities
The prior period benefited from favorable pricing conditions
attributed to the effects of the hurricanes. Due to price
fluctuations between market hubs, its marketing activities
realized higher margins during the three months ended
Nov. 30, 2005. In the fiscal 2007 period, the market
conditions were less favorable resulting in lower margins on
buying and selling natural gas between the west and east
Texas markets. The period was also impacted by a decrease
in the value of its non-trading open derivatives position as
of Nov. 30, 2006, as compared to Nov. 30, 2005.
The decrease was offset by an increase in processing margin and
fee-based revenue. The increase was due to the favorable
processing conditions that the company continued to experience in
its first fiscal quarter of 2007. Liquid prices remained high
while natural gas prices continued to decline or remain relatively
low, thereby making processing more attractive. This resulted in
higher margins in the current period as compared to the same
period last year.
Transportation and Storage Segment
For the three months ended Nov. 30, 2006, as compared to three
months ended Nov. 30, 2005, transportation and storage gross
margin decreased by $7.2 million, principally due to lower natural
gas prices. Excluding the impact of volumetric changes, its fuel
retention fees are directly impacted by changes in natural gas
prices. Increases in natural gas prices tend to increase its fuel
retention fees and decreases in natural gas prices tend to
decrease its fuel retention fees. The company's average natural
gas prices for retained fuel decreased from a range of $10.00 -
$11.00/MMBtu during the first quarter of fiscal 2006 to $5.00 -
$6.00/MMBtu during the first quarter of fiscal 2007.
Retail Propane Segment
Of the total increase in retail propane revenue of $103.9 million
between the three months ended Nov. 30, 2006, and 2005,
$78.1 million is due to the increase in volumes sold by customer
service locations added through the identifiable Titan locations.
Revenues also increased in relation to the increased volumes from
blended locations, the increase in volumes sold by customer
service locations added through other propane acquisitions and, to
a lesser extent, higher selling prices over the same period last
year. These increases were offset by a decrease due to the
adverse impact of weather related volume decreases. Other propane
related revenues increased $9.3 million for the three months ended
Nov. 30, 2006, compared to 2005 primarily due to the Titan
acquisition in June 2006.
The overall increase in gross margins for the three months ended
Nov. 30, 2006, compared to the three months ended Nov. 30, 2005,
is primarily related to the Titan acquisition in June 2006.
Wholesale Propane Segment
Of the $5.1 million increase in wholesale revenue for the three
months ended Nov. 30, 2006, compared to the same three months in
2005, $4.5 million is related to the increase in gallons sold to
new customers in its eastern wholesale and Canadian operations and
$600,000 is related to higher selling prices.
Recent Developments
Transwestern Pipeline
The company acquired on Nov. 1, 2006, pursuant to agreements
entered into with GE Energy Financial Services and Southern Union
Company, the member interests in CCE Holdings LLC from GE and
certain other investors for $1 billion.
The member interests acquired represented a 50% ownership in CCEH.
CCEH owns, among other pipelines, the Transwestern Pipeline, a
2,500 mile interstate natural gas pipeline.
In a second and related transaction, CCEH redeemed ETP's 50%
interest ownership in CCEH in exchange for 100% ownership of
Transwestern Pipeline Company LLC on Dec. 1, 2006, following which
Southern Union will own all of the member interests of CCEH.
Following the final step, Transwestern became a new operating
subsidiary of ETP.
In connection with the December 1 transaction, the company assumed
approximately $520 million of long-term indebtedness of
Transwestern and received cash of approximately $55 million (of
which approximately $49 million was received before Nov. 30,
2006).
The company financed a portion of the purchase price with the
proceeds from its issuance of approximately 26.1 million Class G
Units issued to Energy Transfer Equity L.P. simultaneous with the
closing on Nov. 1, 2006.
Midcontinent Express Pipeline
The company entered on Dec. 13, 2006, into an agreement with
Kinder Morgan Energy Partners L.P. for a 50/50 joint development
of the Midcontinent Express Pipeline.
The approximately 500-mile pipeline, which will originate near
Bennington, Oklahoma, be routed through Perryville, Louisiana, and
terminate at an interconnect with Transco in Butler, Alabama, will
have an initial capacity of 1.4 Bcf per day.
Pending necessary regulatory approvals, the approximately
$1.3 billion pipeline project is expected to be in service by
February 2009.
MEP has prearranged binding commitments from multiple shippers for
800,000 dekatherms per day which includes a binding commitment
from Chesapeake Energy Marketing, Inc., an affiliate of Chesapeake
Energy Corporation for 500,000 dekatherms per day.
MEP has executed a firm capacity lease agreement for up to 500,000
dekatherms per day with Enogex, a subsidiary of OGE Energy, an
Oklahoma intrastate pipeline, to provide a seamless transportation
path from various locations in Oklahoma into and through MEP.
The new pipeline will also interconnect with Natural Gas Pipeline
Company of America, a wholly owned subsidiary of Kinder Morgan,
Inc., and with its previously announced 36-inch pipeline extending
from the Barnett Shale and interconnecting with its Texoma
pipeline near Paris, Texas.
North Texas gathering system
In December 2006, the company purchased a gathering system in
north Texas for $32 million, subject to adjustments as defined in
the agreements. The gathering system consists of approximately
36 miles of pipeline and has an estimated capacity of 70 MMcf/d.
The company expects the gathering system will allow it to continue
expanding in the Barnet Shale area of north Texas.
Balance Sheet
At Nov. 30, 2006, the company's balance sheet showed
$6,674,747,000 in total assets, $3,712,438,000 in total
liabilities, and $2,962,309,000 in total partners' capital.
Full-text copies of the company's first fiscal quarter financials
are available for free at http://ResearchArchives.com/t/s?1876
Energy Transfer Partners, L.P. -- http://www.energytransfer.com/
-- is a publicly traded partnership owning and operating a
diversified portfolio of energy assets. The Partnership's natural
gas transportation and storage operations include intrastate
natural gas gathering and transportation pipelines, natural gas
treating and processing assets located in Texas and Louisiana, and
three natural gas storage facilities located in Texas.
Energy Transfer Equity L.P. owns the general partner interest,
100% of the incentive distribution rights in the general partner,
and approximately 36.4 million Common Units and 26.1 million Class
G Units of Energy Transfer Partners, L.P.
* * *
As reported in the Troubled Company Reporter on Nov. 6, 2006,
Fitch Ratings has initiated rating coverage on Energy Transfer
Equity, L.P. by assigning a BB- Issuer Default Rating. The
company's $1.3 billion senior secured series B term loan maturing
Nov. 1, 2012 is rated 'BB'; its $150 million outstanding senior
secured term loan maturing Feb. 8, 2012 is rated 'BB'; and its
$500 million outstanding senior secured revolving credit facility
maturing Feb. 8, 2011, is rated 'BB'. The Rating Outlook is
Stable.
As reported in the Troubled Company Reporter on Nov. 6, 2006,
Moody's Investors Service assigned first-time ratings to Energy
Transfer Equity, L.P. Moody's assigned a Ba2 rating and a Loss-
Given-Default rating of LGD 5, 88% to ETE's senior secured credit
facilities which consist of an existing $500 million revolving
credit facility, an existing $150 million Term Loan A, and a
proposed $1.3 billion Term Loan B. ETE owns the general partner
interest of Energy Transfer Partners, L.P. as well as ETP's
incentive distribution rights and a substantial amount of ETP's
limited partner units. The rating outlook is stable.
ENERGY TRANSFER: General Counsel and Secretary Robert Burk Resigns
------------------------------------------------------------------
Robert A. Burk resigned as vice president, general counsel, and
secretary of Energy Transfer Partners L.L.C., effective Jan. 5,
2007.
Mr. Burk is also the general partner of Energy Transfer Partners
GP, L.P., and the general partner of Energy Transfer Partners,
L.P.
ETP LLC has received a commitment from a partner at a major
energy-focused law firm to become general counsel of ETP LLC on
Feb. 1, 2007.
Mr. Burk is expected to remain as an employee of ETP LLC during a
transition period until the new general counsel assumes his
duties.
Mr. Burk's departure is not related in any manner to any
disclosure, legal or other issue or to any disagreement with ETP
LLC's board of directors or management over any issue or policy.
Energy Transfer Partners, L.P. -- http://www.energytransfer.com/
-- is a publicly traded partnership owning and operating a
diversified portfolio of energy assets. The Partnership's natural
gas transportation and storage operations include intrastate
natural gas gathering and transportation pipelines, natural gas
treating and processing assets located in Texas and Louisiana, and
three natural gas storage facilities located in Texas.
Energy Transfer Equity, L.P. owns the general partner interest,
100% of the incentive distribution rights in the general partner,
and approximately 36.4 million Common Units and 26.1 million Class
G Units of Energy Transfer Partners, L.P.
* * *
As reported in the Troubled Company Reporter on Nov. 6, 2006,
Fitch Ratings has initiated rating coverage on Energy Transfer
Equity, L.P. by assigning a BB- Issuer Default Rating. The
company's $1.3 billion senior secured series B term loan maturing
Nov. 1, 2012 is rated 'BB'; its $150 million outstanding senior
secured term loan maturing Feb. 8, 2012 is rated 'BB'; and its
$500 million outstanding senior secured revolving credit facility
maturing Feb. 8, 2011, is rated 'BB'. The Rating Outlook is
Stable.
As reported in the Troubled Company Reporter on Nov. 6, 2006,
Moody's Investors Service assigned first-time ratings to Energy
Transfer Equity, L.P. Moody's assigned a Ba2 rating and a Loss-
Given-Default rating of LGD 5, 88% to ETE's senior secured credit
facilities which consist of an existing $500 million revolving
credit facility, an existing $150 million Term Loan A, and a
proposed $1.3 billion Term Loan B. ETE owns the general partner
interest of Energy Transfer Partners, L.P. as well as ETP's
incentive distribution rights and a substantial amount of ETP's
limited partner units. The rating outlook is stable.
EQUITY ONE: S&P Pares Rating on Class B-2 Loan to BB from BBB
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
B-2 mortgage-backed security issued by Equity One Mortgage Pass-
Through Trust 2002-3 to 'BB' from 'BBB' and placed it
on CreditWatch with negative implications.
Concurrently, the 'BBB+' rating on class B-1 was also placed on
CreditWatch negative. At the same time, the ratings on 87
certificates issued by various Equity One Mortgage Pass-Through
Trust transactions were affirmed.
The lowered rating and negative CreditWatch placements reflect
recent performance that has allowed the overcollateralization
level for series 2002-3 to fall to $1.45 million, below its target
of $1.89 million. For most of the past six months, monthly losses
have exceeded monthly excess spread.
In addition, loss projections based on the delinquency pipeline
suggest that this trend could continue. Cumulative losses are
currently 2.26% of the original pool balance, while 90-plus-day
delinquencies are 13.53% of the current pool balance.
The affirmations on the non-bond-insured transactions are based on
sufficient credit support to maintain the current rating levels.
Additionally, a positive relationship between monthly loss and
excess spread has allowed these deals to remain at or close to
their O/C targets. The 90-plus-day delinquency levels in these
pools range from 5.8% to 19.81%of the current pool balances.
Cumulative net losses range from 0.38% to 2.69% of the original
pool balances. The rating affirmations on the bond-insured
transactions are based on the financial strength of Ambac
Assurance Corp.
Credit support for these transactions is provided through a
combination of subordination, excess interest, and O/C. In
addition, some series have additional support through bond
insurance policies.
The underlying collateral for all of these transactions is mostly
fixed- and adjustable-rate, 30-year mortgages on one- to four-
family homes. The loans were originated or purchased by Equity
One Inc. or its affiliates according to guidelines that target
borrowers with less-than-perfect credit histories. The guidelines
are intended to assess both the borrower's ability to repay the
loan and the adequacy of the value securing the mortgaged
property.
Rating Lowered And Placed
On Creditwatch Negative
Equity One Mortgage Pass-Through Trust
Rating
------
Series Class To From
------ ----- -- ----
2002-3 B-2 BB/Watch Neg BBB
Rating Placed On Creditwatch Negative
Equity One Mortgage Pass-Through Trust
Rating
------
Series Class To From
------ ----- -- ----
2002-3 B-1 BBB+/Watch Neg BBB+
Ratings Affirmed
Equity One Mortgage Pass-Through Trust
Series Class Rating Affirmed
------ ----- ---------------
1999-1 A* AAA
2001-1 A*, A-IO* AAA
2001-3 AF-4*, AV-1* AAA
2002-1 AV-1 AAA
2002-1 M-1 AA
2002-1 M-2 A
2002-1 B BBB
2002-2 AF-3*, AF-4*, AV-1* AAA
2002-3 AF-4, AV-1 AAA
2002-3 M-1 AA
2002-3 M-2 A
2002-4 AF-4, AV-1A*, AV-1B AAA
2002-4 M-1 AA
2002-4 M-2 A
2002-4 B BBB
2002-5 M-1 AA+
2002-5 M-2 A
2002-5 B BBB
2003-1 AF-4, AV-1A, AV-1B AAA
2003-1 M-1 AA
2003-1 M-2 A
2003-1 B BBB
2003-2 AV-1 AAA
2003-2 M-1 AA
2003-2 M-2 A
2003-2 M-3 BBB+
2003-3 AF-4 AAA
2003-3 M-1 AA
2003-3 M-2 A
2003-3 M-3 BBB+
2003-4 AF-4, AF-5 AAA
2003-4 AF-6, AV-1, AV-2 AAA
2003-4 M-1 AA
2003-4 M-2 A
2003-4 M-3 A-
2003-4 M-4 BBB+
2003-4 B-1 BBB
2003-4 B-2 BBB-
2004-1 AF-3, AF-4, AF-5 AAA
2004-1 AF-6, AV-1, AV-2 AAA
2004-1 M-1 AA
2004-1 M-2 A
2004-1 M-3 A-
2004-1 M-4 BBB+
2004-1 B-1 BBB
2004-1 B-2 BBB-
2004-2 AF-3, AF-4 AAA
2004-2 AF-5, AF-6, AV-1, AV-2 AAA
2004-2 M-1 AA
2004-2 M-2 A
2004-2 M-3 A-
2004-2 M-4 BBB+
2004-2 B-1 BBB
2004-2 B-2 BBB-
2004-3 AF-3, AF-4, AF-5, AF-6 AAA
2004-3 AV-1, AV-2 AAA
2004-3 M-1 AA
2004-3 M-2 A
2004-3 M-3 A-
2004-3 M-4 BBB+
2004-3 B-1 BBB
2004-3 B-2 BBB-
2004-3 B-3 BB+
*Bond-insured.
FINISAR CORP: Receives Notice of Default from U.S. Bank
-------------------------------------------------------
Finisar Corporation received on Jan. 4, 2007, a purported notice
of default from U.S. Bank Trust National Association, as trustee
for the company's 2-1/2% Convertible Senior Subordinated Notes due
2010.
The notice asserted that its failure to timely file its Form 10-Q
for the quarter ended Oct. 29, 2006, with the Securities and
Exchange Commission constituted a default under the Indenture,
dated as of Oct. 12, 2006, between the company and the Trustee
governing the Notes.
The Notice indicated that if the company does not cure this
purported default within 60 days, an "Event of Default" would
occur under the Indenture.
The company believes that it is not in default under the terms of
the Indenture.
As announced, the company has delayed filing its Form 10-Q for the
quarter ended Oct. 29, 2006, pending the completion of a review of
its historical stock option grant practices being conducted by the
Audit Committee of its Board of Directors.
The company plans to file its Form 10-Q as soon as practicable
after conclusion of the review.
The Notice states that the Indenture requires the Company to file
with the SEC, and provide copies to the Trustee within 15 days
after such filing, its annual and quarterly reports, information,
documents, and other reports, which the Company is required to
file with the SEC pursuant to Sections 13 or 15(d) of the
Securities Exchange Act of 1934.
Section 4.02 of the Indenture states that: "(a) The Company shall
file with the Trustee, within 15 days after it files such annual
and quarterly reports, information, documents and other reports
with the Commission, copies of its annual report and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules
and regulations prescribe) which the Company is required to file
with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act."
The company argues that is not in breach of Section 4.02 of the
Indenture because that section only requires the company to file
with the Trustee reports that have been filed with the SEC, and,
since the company's Form 10-Q for the quarter ended Oct. 29, 2006,
has not been filed with the SEC, the company is under no
obligation to file it with the Trustee.
Furthermore, the company says that even if Section 4.02 of the
Indenture requires the company to file a Form 10-Q for the quarter
ended Oct. 29, 2006, with the Trustee within 15 days of the time
such filing is required to be filed with the SEC, the company
would have 60 days from receiving notice of an actual default
before such failure to file would ripen into an "Event of
Default."
Thus, because it did not receive the Notice until Jan. 4, 2007,
the company avers that it would have until March 5, 2007, to file
its Form 10-Q for the quarter ended Oct. 29, 2006, with the
Trustee.
If an "Event of Default" were to occur under the Indenture, the
Trustee or holders of at least 25% in aggregate principal amount
of the Notes then outstanding would have the contractual right to
declare all unpaid principal, and any accrued, default or
additional interest, on the Notes then outstanding to be due and
payable.
As of this date, there is $100 million in aggregate principal
amount of the Notes outstanding and no accrued but unpaid
interest.
If an "Event of Default" were to occur, the noteholders would have
a right to receive the $100 million in aggregate principal amount
outstanding plus any additional interest or default interest
(which would accrue at a rate of 2-1/2% per annum from the date on
which full payment of the Notes was due to the date that full
payment is made) which may have accrued.
About Finisar Corporation
Headquartered in Sunnyvale, Calif., Finisar Corporation (NASDAQ:
FNSR) -- http://www.finisar.com/- is a technology leader for
fiber optic components and subsystems and network test and
monitoring systems. These products enable high-speed data
communications for networking and storage applications over
Gigabit Ethernet Local Area Networks, Fibre Channel Storage Area
Networks, and Metropolitan Area Networks using Fibre Chanel, IP,
SAS, SATA, and SONET/SDH protocols.
GENERAL MOTORS: Eyes Purchase of Stake in Malaysia's Proton
-----------------------------------------------------------
General Motors Corp. has expressed interest in buying a stake in
Malaysian carmaker Proton Holdings Bhd., Soraya Permatasari and
Angus Whitley write for Bloomberg. Reports say GM could offer
more than MYR10 for each Proton share.
Nik Azhar Abdullah, who oversees about $684 million at Avenue
Asset Management Sdn. in Kuala Lumpur, told Bloomberg that GM can
use Malaysia as an Asian platform in connection with its expansion
to China, India and other Asian emerging markets. According to
Malaysian Automotive Association, Proton held 24% of Malaysia's
car market as of September 30.
GM's Shanghai-based spokesman Rob Leggat has disclosed that GM
held talks with Proton. However, Faridah Idris, a spokeswoman at
Proton, declined to comment. In November 2000, GM held talks with
Proton about a deal in Malaysia but the discussions did not result
in any partnership.
According to Bloomberg, Proton, which has suffered low profits in
the past seven years, is seeking a new partner to stem losses
following the end of its 21-year partnership with Mitsubishi
Motors Corp. in March 2004.
Proton disclosed a MYR250.3 million loss in the quarter ended
Sept. 30, 2006, compared to a MYR154.3 million loss for the same
period in 2005.
Malaysia's Second Finance Minister Nor Mohamed Yakcop told
reporters that separate discussion are also ongoing between
Volkswagen AG and PSA Peugeot Citroen, which could lead to the
sale of a stake in Proton.
About General Motors Corp.
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the
world's largest automaker and has been the global industry sales
leader since 1931. Founded in 1908, GM employs about 327,000
people around the world. It has manufacturing operations in
33 countries and its vehicles are sold in 200 countries. GM sells
cars and trucks under these brands: Buick, Cadillac, Chevrolet,
GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and
Vauxhall.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with negative implications, where
they were placed March 29, 2006. S&P said the outlook is
negative.
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
proposed US$1.5 billion secured term loan of General Motors Corp.
The term loan is expected to be secured by a first priority
perfected security interest in all of the US machinery and
equipment, and special tools of General Motors and Saturn Corp.
GLOBAL GEOPHYSICAL: S&P Junks Rating on Proposed $40 Million Loan
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to Houston, Texas-based seismic company Global
Geophysical Services Inc.
At the same time, Standard & Poor's assigned its 'B' senior
secured rating and '1' recovery rating to Global's proposed
$30 million first-lien senior secured credit facility and
$60 million first-lien senior secured term facility.
In addition, Standard & Poor's assigned a 'CCC' senior secured
rating and '4' recovery rating to Global's proposed $40 million
second-lien senior secured term facility.
The outlook is stable.
Pro forma for the pending bank debt, Global is expected to have
$110.8 million in adjusted debt, including capital-lease
obligations and operating-lease adjustments. Proceeds from the
debt will be used to refinance existing debt and for capital
expenditures.
"The stable outlook on Global is predicated on our expectation
that despite participation in a highly cyclical industry,
liquidity and cash flow should remain sufficient to fund interest
payments and maintenance capital spending over the near to
intermediate term," said Standard & Poor's credit analyst Aniki
Saha-Yannopoulos.
"In addition, we note that the current backlog and favorable
industry conditions should be positive for additional cash flow
improvement, allowing Global to pursue its growth strategy," she
continued.
In the longer term, however, positive rating actions would be
directly linked to Global's ability to reduce debt from current
levels, and demonstrate continued operational improvement as the
company pursues its growth strategy. Conversely, an aggressive
use of debt for growth or the significant weakening of operating
metrics and liquidity could adversely affect ratings.
GOTTAPLAY INTERACTIVE: Recurring Losses Prompt Going Concern Doubt
------------------------------------------------------------------
Lake & Associates CPA's LLC in Boca Raton, Florida, expressed
substantial doubt about Gottaplay Interactive Inc.'s ability to
continue as a going concern after auditing the company's financial
statements for the year ended Sept. 30, 2006. The auditing firm
cited that the company has suffered recurring losses and has yet
to generate internal cash flow.
Gottaplay Interactive Inc. reported a $2 million net loss on
$464,531 of revenues for the year ended Sept. 30, 2006, compared
with a $793,381 net loss on $96,573 of revenues for the year ended
Sept. 30, 2005.
Video game revenue for fiscal 2006 was $127,257. Internet
connectivity revenue for the period of July 24, 2006 to Sept. 30,
2006 was $337,275.
The increase in net loss in primarily due to the increase in
general and administrative expenses from $107,388 in fiscal 2005
to $1.3 million in fiscal 2006.
General and administrative expenses in fiscal 2006 included non-
cash compensation of $765,549 and consulting expenses of $550,000.
At Sept. 30, 2006, the company's balance sheet showed $1.7 million
in total assets and $3.1 million in total liabilities, resulting
in a $1.4 million total stockholders' deficit.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with $330,893 in total current assets available
to pay $3 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the year ended Sept. 30, 2006, are available for
free at http://researcharchives.com/t/s?1871
Merger Agreement with Gotaplay
On July 24, 2006, pursuant to a merger agreement, Gotaplay
Interactive, Inc., a privately held Nevada corporation, merged
with Donobi Inc. In accordance with the agreement, the registrant
completed a one for six reverse stock split, issued 17,744,618
post-reverse split shares of common stock to the former
stockholders of Gotaplay, and amended the Articles of
Incorporation by changing the name of the registrant from Donobi
Inc. to Gottaplay Interactive, Inc.
About Gottaplay Interactive
Headquartered in Gig Harbor, Washington, Gottaplay Interactive
Inc. fka as Donobi Inc. -- http://www.gottaplay.com/and
http://www.donobi.com/-- provides on-line video game rental
services. The company also operates as an Internet service
provider with operations in Washington, Oregon, and Hawaii,
offering Internet connectivity to individuals, multi-family
housing, businesses, organizations, educational institutions and
government agencies.
HOLLINGER INC: Provides Update on Ravelston Corp. Proceedings
-------------------------------------------------------------
Hollinger Inc. advised the Ontario Superior Court of Justice that
it intended to serve, next week, a motion in the Court seeking an
order confirming the secured obligations owed by Ravelston
Corporation Ltd. and Ravelston Management Inc., to the company and
its subsidiary, Domgroup Ltd., and declaring that the applicable
security agreements are valid, perfected and enforceable in
accordance with their terms.
The Ontario Superior Court of Justice had extended the stay of
proceedings on Jan. 12, 2006, against the Ravelston Entities to
June 8, 2007 pursuant to the provisions of the Companies'
Creditors Arrangement Act (Canada).
Ravelston Receivership and CCAA Proceedings
RSM Richter Inc. has served a motion seeking, among other things,
approval of a Plea Agreement negotiated with the U.S. Attorney's
Office in respect of indictments laid by the USAO against
Ravelston. It is expected that this motion will be heard on
January 18, 2007. Conrad Black Capital Corporation and Peter G.
White Management Limited have advised that they will oppose
approval of the Plea Agreement.
On April 20, 2005, the Court issued two orders by which the
Ravelston Entities were:
(i) placed in receivership pursuant to the Bankruptcy &
Insolvency Act (Canada) and the Courts of Justice Act
(Ontario); and
(ii) granted protection pursuant to the Companies' Creditors
Arrangement Act (Canada).
Pursuant to the order, Richter was appointed receiver and manager
of all of the property, assets and undertakings of Ravelston and
RMI. Ravelston holds approximately 16.5% of the outstanding
Retractable Common Shares of Hollinger.
On May 18, 2005, the Court further ordered that the Receivership
Order and the CCAA Order be extended to include Argus Corporation
Limited and its five subsidiary companies which collectively own,
directly or indirectly, 61.8% of the outstanding Retractable
Common Shares and approximately 4% of the Series II Preference
Shares of Hollinger.
On June 12, 2006, the Court appointed Richter as receiver and
manager and interim receiver of all the property, assets and
undertaking of Argent News Inc., a wholly owned subsidiary of
Ravelston. The Ravelston Entities own, in aggregate,
approximately 78% of the outstanding Retractable Common Shares and
approximately 4% of the Series II Preference Shares of Hollinger.
The Court has extended the stay of proceedings against the
Ravelston Entities to June 8, 2007.
Updates on Financial Statements
The company has been unable to file its annual financial
statements, Management's Discussion & Analysis and Annual
Information Form for the fiscal years ended Dec. 31, 2003, 2004
and 2005 and for its new fiscal year ended March 31, 2006 on a
timely basis as required by Canadian securities legislation.
Hollinger has not filed its interim financial statements for the
fiscal quarters ended March 31, June 30 and September 30 in each
of its 2004 and 2005 fiscal years and for the fiscal quarters
ended June 30 and Sept. 30, 2006. The company has obtained a
decision dated Dec. 7, 2006 from certain Canadian securities
regulatory authorities which, among other things, permits the
company to file financial statements for periods ending on or
after Dec. 31, 2003, using the fair value basis.
The company intends to finalize and file financial statements for
the financial years ended December 31, 2003, 2004, and 2005 and
March 31, 2006 as well as interim financial statements for the
current fiscal year and other continuous disclosure documents with
a view to bringing its disclosure filings current and compliant
with applicable law. Once these documents are filed, the company
will apply to the Ontario Securities Commission for the revocation
of the MCTO. The company is required by the recent decision to
complete its filings within 90 days of the date of the decision.
Supplemental Financial Information
As of the close of business Jan. 5, 2007, Hollinger and its
subsidiaries -- other than Sun-Times and its subsidiaries -- had
approximately $31.1 million of cash or cash equivalents on hand,
including restricted cash, other than as described separately
below. At that date, Hollinger owned, directly or indirectly,
782,923 shares of Class A Common Stock and 14,990,000 shares of
Class B Common Stock of Sun-Times. Based on the Jan. 5, 2007
closing price of the shares of Class A Common Stock of Sun-Times
on the New York Stock Exchange of $4.80, the market value of
Hollinger's direct and indirect holdings in Sun-Times was $75.7
million. All of Hollinger's direct and indirect interest in the
shares of Class A Common Stock of Sun-Times is being held in
escrow in support of future retractions of its Series II
Preference Shares. All of Hollinger's direct and indirect
interest in the shares of Class B Common Stock of Sun-Times is
pledged as security in connection with the senior notes and the
second senior notes.
In addition to the cash or cash equivalents on hand noted above,
Hollinger has previously deposited approximately CDN8.8 million in
trust with the law firm of Aird & Berlis LLP, as trustee, in
support of certain obligations Hollinger may have indemnified to
six former independent directors and two current officers. In
addition, CDN759,000 has been deposited in escrow with the law
firm of Davies Ward Phillips & Vineberg LLP in support of the
obligations of a certain Hollinger subsidiary.
As of January 5, 2007, there was approximately $72 million
aggregate collateral securing the $78 million principal amount of
the Senior Notes and the $15 million principal amount of the
Second Senior Notes outstanding. Hollinger is current on all
payments due under its outstanding Senior Notes and Second Senior
Notes. However, it is non-compliant under the Indentures
governing the Notes with respect to certain financial reporting
obligations and other covenants arising from the insolvency
proceedings of the Ravelston Entities. Neither the trustee under
the Indentures nor the holders of the Notes have taken any action
as a result of such defaults.
About Hollinger Inc.
Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B)
-- http://www.hollingerinc.com/-- owns approximately 70.1% voting
and 19.7% equity interest in Sun-Times Media Group Inc. (formerly
Hollinger International Inc.), a newspaper publisher with assets
which include the Chicago Sun-Times and a large number of
community newspapers in the Chicago area. Hollinger also owns a
portfolio of commercial real estate in Canada.
Litigation Risks
Hollinger Inc. faces various court cases and investigations:
(1) a consolidated class action complaint filed in Chicago,
Illinois;
(2) a class action lawsuit that was filed in the Saskatchewan
Court of Queen's Bench on Sept. 7, 2004;
(3) a $425,000,000 fraud and damage suit filed in the State
of Illinois by International;
(4) a lawsuit seeking enforcement of a Nov. 15, 2003,
restructuring proposal to uphold a Shareholders' Rights
Plan, a declaration that corporate by-laws were invalid
and to prevent the closing of a certain transaction;
(5) a lawsuit filed by International seeking injunctive relief
for the return of documents of which it claims ownership;
(6) a $5,000,000 damage action commenced by a lessor of an
aircraft lease, in which Hollinger was the guarantor;
(7) an action commenced by the United States Securities and
Exchange Commission on Nov. 15, 2004, seeking injunctive,
monetary and other equitable relief; and
(8) investigation by the enforcement division of the OSC.
HOME PRODUCTS: Receives Court Approval for $60 Million DIP Loan
---------------------------------------------------------------
The Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court
for the District of Delaware authorized Home Products
International Inc. on Jan. 11 to borrow up to $60 million under a
debtor-in-possession debt facility, the Associated Press reports.
The DIP loan provides up to $11.5 million of in new financing to
fund the Debtor's bankruptcy case. Majority of the $60-million
loan is allotted as payment for Bank of America.
Home Products filed for bankruptcy protection about a month after
it failed to make a $5.6-million interest payment due to
bondholders, the AP reports.
Home Products blamed its financial troubles on increasing raw
materials prices, specifically for plastic resin. AP discloses
that the company listed assets of $172.2 million and debts of
$217.4 million in its bankruptcy filing.
A hearing to consider approval of the Disclosure Statement
explaining the Debtor's plan is slated for Jan. 30, 2007.
Terms of the Plan
AP relates that under the company's proposed Chapter 11 plan,
bondholders, who are owed $122.2 million, will control 95% of the
reorganized company.
The reorganized Home Products will issue $30 million in new bonds
to fund its exit from bankruptcy. Third Avenue Management LLC,
Home Products largest bondholder, will backstop 85% of the debt
offering.
AP reports that the company's existing shares will be canceled.
Current shareholders will get 5% of shares in the new company.
About Home Products
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.
INNOVATIVE COMMS: Trustee Appointment Hearing Set for Friday
------------------------------------------------------------
The Bankruptcy Division of the District Court of the Virgin
Islands will convene an evidentiary hearing at 9:00 a.m. on
Jan. 19, 2007, to consider the appointment of a Chapter 11 Trustee
in Innovative Communication Company LLC and Emerging
Communications Inc.'s bankruptcy cases.
The hearing will be held at Courtroom A, 54th Floor, US Steel
Building in Pittsburgh, Pennsylvania. All witnesses are required
to appear in person in Pittsburgh. However, counsel may appear
via video conference in the U.S. Bankruptcy Court, Ron de Lugo
Federal Building, 3rd Floor, 5500 Veterans Drive in St. Thomas.
Felicia S. Turner, the United States Trustee for Region 21, wants
the Court to appoint a Chapter 11 Trustee for the Debtors'
estates. Ms. Turner argues that the Debtors have failed to carry
out their fiduciary duty to creditors to credibly pursue a timely
rehabilitation of their businesses.
Ms. Turner adds that creditors and other parties-in-interest have
lost confidence in the Debtors' management and have acknowledged
the need for the appointment of an independent fiduciary.
Creditors have alleged that the Delay in the Debtors' cases do not
stem from their inability to structure a deal but from their
continuing attempts to structure a deal wherein control or equity
is preserved for the current management.
About Innovative
Headquartered in St. Thomas, Virgin Islands, Innovative
Communication Company, LLC -- http://www.iccvi.com/-- and
Emerging Communications, Inc., are diversified telecommunications
and media companies operating mainly in the U.S. Virgin Islands.
Jeffrey J. Prosser owns Emerging Communications and Innovative
Communications. Innovative and Emerging filed for Chapter 11
protection on July 31, 2006 (D.C. V.I. Case Nos. 06-30007 and 06-
30008). When the Debtors filed for protection from their
creditors, they estimated assets and debts of more than
$100 million.
Mr. Prosser also filed for chapter 11 protection on July 31, 2006
(D.C. V.I. Case No. 06-10006).
Greenlight Capital Qualified, L.P., Greenlight Capital, L.P., and
Greenlight Capital Offshore, Ltd., which holds an $18,780,614
claim against Mr. Prosser, had filed an involuntary chapter 11
petition against Innovative Communication, Emerging
Communications, and Mr. Prosser on Feb. 10, 2006 (Bankr. D. Del
Case Nos. 06-10133, 06-10134, and 06-10135). Mr. Prosser argued
that the Greenlight entities, the former shareholders of
Innovative Communications, and Rural Telephone Finance
Cooperative, Mr. Prosser's lender, conspired to take down his
companies into bankruptcy and collect millions in claims.
JENNIFER OK: Case Summary & 19 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Jennifer O'K Anderson
7029 Highfield Road
Fayetteville, NY 13066
Bankruptcy Case No.: 07-30044
Chapter 11 Petition Date: January 9, 2007
Court: Northern District of New York (Syracuse)
Judge: Stephen D. Gerling
Debtor's Counsel: Wayne R. Bodow, Esq.
Bodow Law Firm, PLLC
1925 Park Street
Syracuse, NY 13208
Tel: (315) 422-1234
Fax: (315) 422-9113
Estimated Assets: $1 Million to $100 Million
Estimated Debts: $1 Million to $100 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
IRS Insolvency Group 1 Form 1040 Taxes $75,000
Niagara Center, 2nd Floor
130 South Elmwood Avenue
Buffalo, NY 14202
Pene James SOFA Notice $40,000
1107 West 8th Street
Marshfield, WI 54449
CNY Sales Unpaid Bills $39,000
649 Old Liverpool Road
Liverpool, NY 13088
Onondaga County 2006/2007 School $25,087
Taxes & 2007 Town
Taxes
Collier County Tax Collector Property Taxes $19,455
Bartolotta Furniture Unpaid Bills $17,669
NYS Department of Form IT Estimated $15,000
Taxation and Finance Taxes
Howard Deland Unpaid Bills $13,971
Ord Agency Insurance $13,807
George Vega, Jr., Esq. Legal Fees $12,827
Joseph's At The Carriage House Unpaid Bills $12,500
Romano Motors Ltd. Unpaid Bills $8,286
Averson & Klinetop, LLP Unpaid Bills $7,902
Northway Plaza Investors, L.P. Listed for Notice $5,939
The Davey Tree Expert Notice $5,860
Credit Management Services Unpaid Bills $5,006
Travelers Insurance $3,139
Mercedes-Benz Automobile $2,495
Skaneateles Country Club Membership Dues $2,088
KEVIN TRIPP: Case Summary & 12 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Kevin Tripp
Robin Tripp
West 2109 County Highway A
Springbrook, WI 54875
Bankruptcy Case No.: 07-10064
Type of Business: The Debtor filed for chapter 11 protection on
December 26, 2006 (Bankr. W.D. Wis. Case No. 06-
13466).
Chapter 11 Petition Date: January 9, 2007
Court: Western District of Wisconsin (Madison)
Judge: Robert D. Martin
Debtor's Counsel: Kevin T. Duffy, Esq.
Duffy Law Office
1008 West Second Street
P.O. Box 715
Thief River Falls, MN 56701
Tel: (218) 681-8524
Estimated Assets: $100,000 to $1 Million
Estimated Debts: $1 Million to $100 Million
Debtor's 12 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Shannon Mortgage Mortgage $1,277,805
228 North Keller Avenue Secured:
Amery, WI 54001 $400,000
Unsecured:
$877,805
GCI Capital, Inc. Personal Guarantee $659,000
c/o Fidelity Bank on Equipment
GCI Suite 2
P.O. Box 1575
Minneapolis, MN 55480
Washburn County Forestry Timber Contract $76,131
850 West Beaver Brook Avenue
Suite 4
Spooner, WI 54801
Star Bank Lease $200,000
P.O. Box 188 Secured:
Bertha, MN 56437 $140,000
Unsecured:
$60,000
NCO Financial System Credit Card $49,122
P.O. Box 15760 Purchases
Department 07
Wilmington, DE 19850-5760
Stellar Holding Timber Contract $40,104
Ponsse North America Parts and Service $13,222
Cabelas Club Visa Parts and Gas $11,571
Diversified Financial Resources Deficiency $10,707
GMAC Purchase Money $47,000
Security Secured:
$44,000
Unsecured:
$3,000
Lease $27,660
Secured:
$25,000
Unsecured:
$2,660
Lawson Products, Inc. Parts and Services $1,719
Lamar Companies Advertising $632
LE-NATURE INC: Todd Neilson Appointed as Chapter 11 Trustee
-----------------------------------------------------------
The Hon. M. Bruce McCullough of the U.S. Bankruptcy Court for the
Western District of Pennsylvania appointed R. Todd Neilson of LECG
as the chapter 11 Trustee in Le-Nature's Inc.'s chapter 11 case,
Len Boselovic of Pittsburgh Post-Gazette reports.
According to the source, a spark between lenders and Wachovia
Bank, Le-Nature's financial advisor, was put on hold. Lenders
holding 70% of the company's $285 secured debt have subpoenaed
former officers and directors, Le-Nature's accountants and
Wachovia to find out the situation. Other creditors support the
action but Wachovia objected it citing that untangling the
company's jumbled books is not of the creditors' job but of the
Trustee's.
Judge McCullough said last week that he would delay a decision on
whether to permit the subpoenas for three weeks, allowing
Mr. Neilson a period to decide in conducting investigation or
letting creditors proceed with their own probe.
Kroll Zolfo Cooper LLC, Le Nature's custodian after a Delaware
judge concluded the company had engaged in potentially criminal
activity, has reportedly filed an assessment of the company's
financial dilemma last week, listing assets of $40.1 million and
debts of $453.3 million. The company owed to secured creditors
for $281 million claim. Creditors could try to seek damages from
Wachovia and other firms over their failure to uncover the fraud
because the assets cover less than 10 cents of every $1 creditors
are owed, Pittsburgh Post-Gazette adds.
According to Kroll Zolfo, the estimates filed with the Court last
week might be unreliable due to the destroyed evidence and the
remaining documents, including two set of books, which couldn't be
trusted.
Citing Wachovia's attorney Menachem Zelmanovitz, the source said
that the bank is looking for a full and fair investigation. He
added that the creditors should first point that matter to ex-
officers, directors, and accountants who prepared the company's
financial statements.
Reports showed that the secured lenders referred to the charges
that previous management tearing down evidence before Kroll Zolfo
took over, obtaining more than $20 million by forging documents
and converting lender financing into expensive jewelries recovered
at the Latrobe headquarters.
Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. --
http://www.le-natures.com/-- makes bottled waters, teas, juices
and nutritional drinks. Its brands include Kettle Brewed Ice
Teas, Dazzler fruit juice drinks and lemonade, and AquaAde
vitamin-enriched water. Le-Nature's creditors filed for a chapter
7 liquidation of the company on Nov. 1, 2006 (Bankr. W.D. Pa. Case
No. 06-25454). Judge McCullough converted the case to chapter 11
proceeding to give the custodian, Kroll Zolfo Cooper LLC a chance
to restructure the company. Douglas Anthony Campbell, Esq., at
Campbell & Levine, LLC, represents the Debtor in its restructuring
efforts. When the Debtor filed for bankruptcy, they estimated
less than $10,000 in assets and more than $100 million in debts.
MAGNA INT'L: Sees Plant Closures and Consolidations in 2007
-----------------------------------------------------------
Magna International Inc. will restructure its operations through
plant closings and consolidations in order to remain profitable,
Tony Van Alphen at the Toronto Star reports.
Magna president Mark Hogan disclosed the restructuring plan at the
Auto Analysts of New York Detroit Auto Conference. However the
Toronto Star says Mr. Hogan did not provide details on job cuts or
estimate reductions for this year.
The current plight of the North American auto industry has
negatively impacted Magna's operations. According to Mr. Van
Alphen, Magna's outlook for growth in 2007 contrasts with the
optimistic forecasts it had delivered in prior years.
Magna expects consolidated sales to be between $22.9 billion and
$24.2 billion for the full year 2007, based on full year 2007
light vehicle production volumes of approximately 15.5 million
units in North America and approximately 15.6 million units in
Europe. The company sees full year 2007 complete vehicle assembly
sales to be between $3.4 billion and $3.7 billion.
Full year 2007 spending for fixed assets will be in the range of
$850 million to $900 million, the company disclosed.
The company hopes to stem revenue loss by securing more contracts
from Asian manufacturers and reducing its dependence on General
Motors, Ford and DaimlerChrysler. According to Mr. Van Alphen,
Magna is working to increase its sales to Asian manufacturers to
10% to 15% by 2010.
Headquartered in Aurora, Ontario, Magna International Inc. --
http://www.magnaint.com/-- designs, develops and manufactures
automotive systems, assemblies, modules and components, and
engineer and assemble complete vehicles, primarily for sale to
original equipment manufacturers of cars and light trucks in North
America, Europe, Asia and South America. The company has
approximately 83,000 employees in 228 manufacturing operations and
62 product development and engineering centers in 23 countries.
MAIDENFORM BRANDS: S&P Affirms Corporate Credit Rating at B+
------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Bayonne, New Jersey-based intimate apparel designer and marketer
Maidenform Brands Inc. to positive from stable.
Ratings on the company, including the 'B+' corporate credit
rating, were affirmed. Total debt outstanding at Sept. 30, 2006
was $120 million.
"The outlook revision reflects Maidenform's improving trends in
revenue, margins, and credit protection measures--in particular,
debt leverage, which improved to 2.2x at Sept 30, 2006, from a
high point of 3.4x at fiscal year-end December 2004," noted
Standard & Poor's credit analyst Susan Ding.
"Since we initially assigned our rating to the company in May
2004, Maidenform has successfully revitalized its well-recognized
brands, expanded its distribution channel into the mass market,
and improved operating efficiencies and performance."
The rating reflects Maidenform's participation in a highly
competitive and very promotional retail environment, its
relatively small size in the intimate apparel sector, its narrow
product focus, and some customer concentration. Maidenform's
limited business focus in the intimates segment of the apparel
industry and its more than 50% concentration in the department
store/chain store channel are also rating concerns. Furthermore,
Maidenform competes against much larger players in the industry,
including VF Corp., Warnaco Group Inc., and Hanesbrands Inc.
The retail environment remains challenging, driven by price
pressures and competition from private labels. The previously
mentioned factors are somewhat mitigated by the company's well-
known Maidenform brand, which was introduced in 1922 and which
still has very good brand recognition.
In addition, the rating incorporates the company's solid market
shares in its core market, intimate apparel, which is
characterized by relatively stable demand, low fashion risk, and
high replenishment rates.
In July 2005, Maidenform completed an IPO and used the net
proceeds to redeem its preferred stock. At that time, the company
refinanced its higher interest bearing $50 million second-lien
loan. For the past 12 months ended Sept. 30, 2006, revenues and
EBITDA continued to improve, while credit-protection measures
remain above the medians for the rating category.
EBITDA interest coverage was 4.3x for the period, while total debt
to EBITDA was 2.2x, versus 2.8x in the prior-year period.
MALDEN MILLS: Board OKs Sale of Company to Gordon Bros. for $44MM
-----------------------------------------------------------------
Malden Mills Industries Inc.'s board of directors unanimously
approved sale of the company to Gordon Brothers Group of Boston,
Massachusetts for $44 million.
The company will continue normal manufacturing operations at both
its facilities in Lawrence, Massachusetts and Hudson, New
Hampshire.
In order to implement the sale, the company filed voluntary
petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. The Chapter 11 process will provide an efficient
environment for completion of the sale. The sale is subject to
higher and better offers, and completion of the sale is expected
by the end of Feb. 2007, subject to court approval.
GE Commercial Finance will be providing a Debtor in Possession
(DIP) financing facility, which ensures that the company has the
working capital required for a seamless transition in operations
to new ownership.
Michael Spillane, chief executive officer, said, "Over the past
three years we have worked diligently to improve every aspect of
the operational side of the business. Our on-time delivery,
manufacturing quality, and product innovation have never been
better. The sale of Malden Mills to Gordon Brothers Group
transitions the company into a state of permanent ownership and
financial stability. This financial transaction will
significantly improve the Company's balance sheet enabling Malden
Mills to continue to serve our customers in both the commercial
and military markets."
Headquartered in Lawrence, Massachusetts, Malden Mills Industries,
Inc. -- http://www.polartec.com/-- develops, manufactures, and
markets Polartec(R) performance fabrics. Polartec(R) products
range from lightweight wicking base layers to insulation to
extreme weather protection and are utilized by the best clothing
brands in the world. In addition, Polartec(R) fabrics are used
extensively by all branches of the United States military,
including the Army, Navy, Marine Corps, Air Force, and Special
Operations Forces. The company also has operations in Germany,
Spain, France and the U.K.
The company and four of its affiliates filed for chapter 11
protection on Jan. 10, 2007 (Bankr. D. Del. Case Nos. 07-10048
through 07-10052). Laura Davis Jones, Esq., and Michael Seidl,
Esq., at Pachulski, Stang, Ziehl Young, Jones & Weintraub, PC,
represent the Debtors. When the Debtors filed for protection from
their creditors, they listed estimated assets between $1 million
to $100 million and estimated debts of more than $100 million.
The Debtors' exclusive period to file a chapter 11 plan expires on
May 10, 2007.
MARCAL PAPER: Committee Wants Lowenstein Sandler as Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Marcal
Paper Mills Inc.'s chapter 11 case asks the U.S. Bankruptcy Court
for the Eastern District of Michigan for authority to retain
Lowenstein Sandler PC as its bankruptcy counsel.
Lowenstein Sandler is expected to:
(a) provide legal advice as necessary with respect to the
Committee's powers and duties;
(b) assist the Committee in investigating the Debtor's acts,
conduct, assets, liabilities, and financial condition, the
operation of the Debtor's business, potential claims, and
any other matters relevant to the cases or to the
formulation of a plan of reorganization;
(c) participate in the formulation of a Plan;
(d) provide legal advice as necessary with respect to any
disclosure statement and Plan filed in this case and with
respect to the process for approving or disapproving
disclosure statements and confirming or denying
confirmation of a Plan;
(e) prepare on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers;
(f) appear in Court to present necessary motions, applications,
and pleadings, and otherwise protect the interests of those
represented by the Committee;
(g) assist the Committee in requesting the appointment of a
trustee or examiner, should any action be necessary; and
(h) perform other legal services as may be required and that
are in the best interests of the Committee and creditors.
Kenneth A. Rosen, Esq., a Lowenstein Sandler member, discloses
that the firm's professionals bill:
Position Hourly Rate
-------- -----------
Partners $320 - $595
Counsel $265 - $425
Associates $165 - $300
Legal Assistants $75 - $150
Mr. Rosen assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankrutpcy Code.
Headquartered in Elmwood Park, NJ, Marcal Paper Mills Inc.
-- http://www.marcalpaper.com/-- produces over 160,000 tons of
finished paper products, including bath tissue, kitchen towels,
napkins and facial tissue, distributed to retail outlets for home
consumption and to distributors for away-from-home use in hotels,
restaurants, hospitals offices and factories. Marcal, founded in
1932, is a privately-held, fourth generation family business. It
employs over 900 people in its Elmwood Park, New Jersey and
Chicago, Illinois manufacturing operations.
The Debtor filed for chapter 11 protection on Nov. 30, 2006
(Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, represent the Debtor. When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of more than $100 million.
MARCAL PAPER: Court Approves NatCity as Investment Banker
---------------------------------------------------------
The United States Bankruptcy Court for the District of New Jersey
authorized Marcal Paper Mills Inc. to employ NatCity Investments
Inc. as its investment banker.
NatCity is expected to:
(a) assist the Debtor in negotiating with the Debtor's
creditors regarding a possible financial restructuring of
existing claims and equity;
(b) prepare and issue an enterprise valuation of the Debtor;
(c) consult with and advise the Debtor with respect to the
financial aspects of any proposed restructuring, including
price, terms and conditions of such restructuring;
(d) advise, in light of current market conditions, on
all aspects of any Financing, including timing, structure,
and terms;
(e) conduct due diligence and complete a Financing information
memoranda, which describes the Financing and the Debtor's
business, including its history and future prospects;
(f) approach potential lenders and investors, including
commercial banks, commercial financing companies, private
capital investment funds, and other institutional investors
after approval by the Debtor;
(g) solicit terms sheets from those lenders and investors
interested in the Debtor;
(h) negotiate with lenders and investors regarding the terms
and structure of the Financing;
(i) assist the Debtor, its attorneys and accountants, as
necessary through closing the Financing on a best efforts
basis;
(j) prepare an information memoranda with respect to any Sale
describing the Debtor, its historical performance and
prospects, including existing contracts, marketing and
sales, labor force, and management and anticipated
financial results of the Debtor;
(k) assist the Debtor in developing a list of suitable
potential buyers who will be contacted on a discreet and
confidential basis after approval by the Debtor;
(l) coordinate the execution of confidentiality agreements for
potential buyers wishing to review the information
memoranda;
(m) assist the Debtor in coordinating site visits for
interested buyers and work with the management team to
develop appropriate presentations for such visits;
(n) solicit competitive offers from potential buyers;
(o) advise and assist the Debtor in structuring the transaction
and negotiating the transaction agreements; and
(p) assist the Debtor, its attorneys, and accountants, as
necessary through closing the Sale on a best efforts basis.
The Debtor previously provided NatCity with an initial fee of
$50,000 upon execution of the employment agreement. The Debtor
also provided NatCity with an initial fee of $50,000 upon
execution of the addendum, which will be credited against any
transaction fees.
The Debtor discloses that NatCity will be paid:
(a) Valuation Fee: Upon delivery by NatCity of an enterprise
valuation of the Debtor, the Debtor shall pay NatCity a
valuation fee of $100,000.
(b) Monthly Fees: Monthly fees of $50,000 per month payable
beginning Jan. 2, 2007 and continuing each month thereafter
during the Engagement Term. The total of all Monthly Fees
actually received by NatCity beginning in January 2007 will
be credited against any Transaction Fees owed to NatCity.
(c) Sale Fee: Upon the consummation of a Sale Transaction, the
Debtor shall pay NatCity a fee payable in cash, in federal
funds via wire transfer or certified check, at, and as a
condition of, closing of such transaction, equal to the
greater of $1,000,000 or 1% of Total Consideration.
In the event the Debtor's Chicago division is sold in a
separate transaction, the Debtor shall pay NatCity a fee
equal to 3% of Total Consideration up to $12,500,000
and 5% of Total Consideration in excess of $12,500,000.
(d) Financing Fee: Upon the first closing of a Financing, the
Debtor shall pay NatCity a fee, payable in cash, in federal
funds via write transfer or certified check at, and as a
condition of, closing such Financing, regardless of whether
the Debtor chooses to draw down the full amount of the
committed financing at that time, equal to the greater of
$1,000,000 or the sum of (i) 0.5% of any Senior Debt
raised, (ii) 2% of any Tranche B/Secured Subordinated Debt
raised, and (iii) 4% of any Traditional Subordinated
Debt/Equity raised.
In the event that Financing is provided by one or more of
the Existing Lenders, then NatCity will not be owed a
Financing Fee as it relates to the Existing Lenders'
financing.
If a financing source obtained during the Engagement Term
increases the total amount made available to the company
within twelve months of the first closing of the Financing,
NatCity shall be entitled to receive an additional
Financing Fee based upon the above formulas as applied to
the such increased amount.
NatCity also will seek reimbursement for reasonable out-of-pocket
expenses incurred in connection with this engagement.
To the best of the Debtor's knowledge, NatCity is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
NatCity does not, to its knowledge, represent any party with an
interest materially adverse to the Debtor or its estate.
Headquartered in Elmwood Park, New Jersey, Marcal Paper Mills Inc.
-- http://www.marcalpaper.com/-- produces over 160,000 tons of
finished paper products, including bath tissue, kitchen towels,
napkins and facial tissue, distributed to retail outlets for home
consumption and to distributors for away-from-home use in hotels,
restaurants, hospitals offices and factories. Marcal, founded in
1932, is a privately-held, fourth generation family business. It
employs over 900 people in its Elmwood Park, New Jersey and
Chicago, Illinois manufacturing operations.
The Debtor filed for chapter 11 protection on Nov. 30, 2006
(Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, represent the Debtor. When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of more than $100 million.
MARCAL PAPER: Gets Okay to Hire J.H. Cohn as Financial Advisors
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
allowed Marcal Paper Mills Inc. to employ J.H. Cohn LLP as its
financial advisors.
J.H. Cohn will:
(a) review all financial information prepared by the Debtor
including, but not limited to, a review of the Debtor's
financial statements as of the Filing Date, showing in
detail all assets and liabilities and priority and secured
creditors;
(b) provide advice and assistance to the Debtor in preparation
of monthly operating reports and other information that may
be required by the Bankruptcy Court, the U.S. Trustee, or
the Debtor's creditors, and other parties-in-interest;
(c) monitor the Debtor's activities regarding cash
expenditures, receivable collections, asset sales and
projected cash requirements;
(d) attend meetings including the Debtor, creditors, their
attorneys and consultants, and federal and state
authorities, if required;
(e) review or prepare the Debtor's periodic operating and cash
flow statements, including cash collateral budgets and
actual vs. budget operating results;
(f) review the Debtor's books and records for inter-company
transactions, related party transactions, potential
preferences, fraudulent conveyances and other potential
prepetition investigations;
(g) review and analyze proposed transactions for which the
Debtor seeks Court approval;
(h) assist in a sale process of the Debtor collectively or in
segments, parts or other delineations, if any;
(i) assist the Debtor in developing, evaluating, structuring
and negotiating the terms and conditions of all potential
plans of reorganization, including preparing a liquidation
analysis;
(j) analyze claims filed;
(k) estimate the value of the securities, if any, that may be
issued to unsecured creditors under any such plan;
(l) provide expert testimony on the results of JH Cohn's
findings;
(m) assist the Debtor in developing alternative plans including
contacting potential plan sponsors, if appropriate; and
(n) provide the Debtor with other and further financial
advisory services, including valuation, general
restructuring and advice with respect to financial,
business, and economic issues, as may arise during the
course of this proceeding.
Bernard A. Katz, a J.H. Cohn member, discloses that the firm's
professionals bill:
Designation Hourly Rate
----------- -----------
Senior Partner $550
Partner $495
Director $420
Senior Manager $400
Manager $385
Senior Accountant $300
Staff $210
Paraprofessional $140
Mr. Katz assures the Court that his firm does not hold nor
represent any interest adverse to the Debtor's estate.
Headquartered in Elmwood Park, NJ, Marcal Paper Mills Inc.
-- http://www.marcalpaper.com/-- produces over 160,000 tons of
finished paper products, including bath tissue, kitchen towels,
napkins and facial tissue, distributed to retail outlets for home
consumption and to distributors for away-from-home use in hotels,
restaurants, hospitals offices and factories. Marcal, founded in
1932, is a privately-held, fourth generation family business. It
employs over 900 people in its Elmwood Park, New Jersey and
Chicago, Illinois manufacturing operations.
The Debtor filed for chapter 11 protection on Nov. 30, 2006
(Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, represent the Debtor. When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of more than $100 million.
MARCAL PAPER: Wants Andora & Romano as Tax Appeals Counsel
----------------------------------------------------------
Marcal Paper Mills Inc. asks the U.S. Bankruptcy Court for the
District of New Jersey for permission to employ Andora & Romano
LLC as its special real property tax appeals counsel.
The Debtor owns real property located at Block 902, Lots 3 and 4,
in Elmwood Park, New Jersey, which is assessed for real property
taxes by the Borough of Elmwood Park. As special real property
tax appeals counsel, Andora & Romano will represent the Debtor in
connection with its 2005, 2006, and 2007 real estate tax appeals
before the Tax Court of New Jersey against the Borough and all
future real estate tax appeals for the Debtor's property in
Elmwood Park.
As compensation, Andora & Romano is entitled to a contingency fee
equal to 25% of the reduction in taxes realized by the Debtor as a
result of the reduction in assessments under appeal. The Debtor,
however, is responsible for all disbursements and costs incurred
in connection with Andora's representation.
The Debtor assures the Court that Andora & Romano does not
represent or hold any interest adverse to its estate.
Headquartered in Elmwood Park, NJ, Marcal Paper Mills Inc.
-- http://www.marcalpaper.com/-- produces over 160,000 tons of
finished paper products, including bath tissue, kitchen towels,
napkins and facial tissue, distributed to retail outlets for home
consumption and to distributors for away-from-home use in hotels,
restaurants, hospitals offices and factories. Marcal, founded in
1932, is a privately-held, fourth generation family business. It
employs over 900 people in its Elmwood Park, New Jersey and
Chicago, Illinois manufacturing operations.
The Debtor filed for chapter 11 protection on Nov. 30, 2006
(Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, represent the Debtor. When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of more than $100 million.
MELO BIOTECH: Has CDN$298,318 Stockholders' Deficit at Sept. 30
---------------------------------------------------------------
Melo Biotechnology Holdings Inc. reported a CDN$140,168 net loss
on CDN$8.8 million of sales for the year ended Sept. 30, 2006,
compared with CDN$28,492 of net income on CDN$8.3 million of sales
for the year ended Sept. 30, 2005.
The net loss for fiscal 2006 is mainly due to lower reported gross
margins of CDN1.37 million compared to CDN$1.4 million in fiscal
2005 and the increase in operating expenses.
Cost of sales for the fiscal year ended Sept. 30, 2006, were
CDN$7.4 million compared to CDN$6.9 million for the fiscal year
ended Sept. 30, 2005. This increase was due to increased costs of
materials, products and parts. Gross profit on product sales
decreased 2.2 % to CDN$1.37 million in the current fiscal year
from CDN$1.4 million in fiscal 2005.
Operating expenses increased to 17.2% of revenue in fiscal year
2006 compared to 16.5% of revenue in the previous fiscal year.
Operating expenses in fiscal year 2006 were CDN$138,254 higher
than in the fiscal year 2005 due primarily to the CDN$145,267 of
additional payroll expenses incurred in the current year.
At Sept. 30, 2006, the company's balance sheet showed
CDN$1.5 million in total assets and CDN$1.8 million in total
liabilities, resulting in a CDN$298,318 total stockholders'
deficit.
The company's balance sheet at Sept. 30, 2006, also showed
strained liquidity with CDN$1.4 million in total current assets
available to pay CDN$1.8 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the year ended Sept. 30, 2006, are available for
free at http://researcharchives.com/t/s?186f
Headquartered in Markham, Ontario, Melo Biotechnology Holdings
Inc. fka MIAD Systems Ltd. -- http://www.miad.com/-- supplies
business computer systems and provides computer maintenance,
installation and networking services to major clients primarily
engaged in the corporate, institutional, municipal, utilities and
education fields.
* * *
Melo Biotechnology Holdings Inc., at Sept. 30, 2006, had total
stockholders' deficit of CDN$298,318.
MESABA AVIATION: Committee Wants Exclusive Period Modified
----------------------------------------------------------
Mesaba Aviation Inc.'s exclusive right to file and solicit
acceptance of a plan of reorganization has been extended several
times, most recently to Feb. 12, 2007, and April 13, pursuant to
an order by the U.S. Bankruptcy Court for the District of
Minnesota entered on Nov. 13, 2006, extending the Exclusivity
Period under Section 1121(d) of the Bankruptcy Code.
Thomas J. Lallier, Esq., at Foley & Mansfield, P.L.L.P, in
Minneapolis, Minnesota, relates that historically, the Debtor has
generated substantially all of its revenue through its operation
of aircraft on behalf of Northwest Airlines Inc., pursuant to
various airline service agreements.
Since filing for bankruptcy, the Debtor's fleet has been reduced
to just 49 Saab 340 turboprops and one Canadair Regional Jet, Mr.
Lallier notes. All of the Debtor's remaining aircraft are sub-
leased from Northwest.
In light of Northwest's decision to create a subsidiary for the
purpose of flying large regional aircraft and the awarding of
substantially all of Northwest's CRJ flying to Pinnacle Airlines,
Inc., the likelihood of the Debtor obtaining regional jet flying
on behalf of Northwest after independently reorganizing as a
stand-alone carrier appears remote, Mr. Lallier explains.
As reported in the Troubled Company Reporter on Dec. 22, 2006,
Northwest Airlines Corp. disclosed its plan to acquire Mesaba
Aviation. On Jan. 8, 2007, the Troubled Company Reporter related
that Northwest had struck a definitive stock purchase agreement to
acquire Mesaba.
Besides providing for the acquisition of the Debtor by Northwest,
the agreement:
(a) liquidates the Debtor's claim against Northwest for the
rejection of the existing ASA;
(b) provides for a significant cash distribution to unsecured
creditors -- likely consisting of payment in full; and
(c) establishes a foundation on which the Debtor can continue
to operate its existing business and likely expand the
business through the receipt of additional aircraft from
Northwest.
As part of the transaction, Mesaba will also receive $10 million
in cash and a $145 million general unsecured claim in Northwest's
bankruptcy estate.
Mr. Lallier notes that the terms of the Northwest Transaction
have been vigorously negotiated among the parties involved. The
Debtor's management and the Committee's professionals proceeded
with the general goal of maximizing the recovery of the Debtor's
estate and all parties-in-interest through a Plan that
incorporates the terms of the Northwest Transaction. The
Committee's professionals and the Debtor's management have
concluded that the consideration provided to the Debtor's estate
is fair and adequate compensation for the value transferred to
Northwest, and that confirmation of a Plan without a longer-term
ASA with Northwest is unlikely.
Mr. Lallier points out that a material term of the Northwest
Transaction requires that the Debtor file a Plan on or before
January 15, 2007, and obtain confirmation of that plan by
April 15.
As reported in yesterday's Troubled Company Reporter, Northwest
Airlines Corporation and certain of its subsidiaries filed their
joint Chapter 11 plan of reorganization with the U.S. Bankruptcy
Court for the Southern District of New York.
Before the Debtor may propose its Plan, its Board of Directors
must first vote in favor of the Plan. After the Board approves
the Plan, MAIR Holdings, Inc., must give its unanimous
affirmative vote of approval of the proposed Plan in accordance
with the Debtor's bylaws, Mr. Lallier adds.
The Debtor disclosed the terms of the Northwest Transaction to
MAIR on December 20, 2006, with a recommendation from management
that the proposal be accepted, Mr. Lallier tells the Court. MAIR
has not yet approved the Northwest Transaction.
Until January 2, 2007, the Debtor's Board was comprised of three
members:
(a) John Spanjers, Mesaba's president and chief operating
officer;
(b) Thomas Schmidt, Mesaba's vice president of finance; and
(c) Jann Ozello Wilcox, senior vice-president and chief
financial officer of Marquette Financial Companies, a
representative appointed by MAIR.
Consequently, MAIR exercised its right to appoint an additional
member to the Board, and appointed Mark Sheffert of the
Manchester Companies. As a result, the Board is now comprised of
four members: two members of the Debtor's management, and two
members appointed by MAIR.
A Board meeting was commenced on December 31, 2006, and was
reconvened on January 3, 2007, but did not result in approval of
the Northwest Transaction and was again adjourned. Mr. Lallier
asserts that there's no evidence that the Board will approve the
Northwest Transaction in a timely manner.
Furthermore, Riley Investment Management, LLC, holder of 5.2% of
MAIR's outstanding common stock, has publicly disclosed a letter
it delivered to MAIR questioning the disclosed terms of the
Northwest Transaction, and demanding that any transaction be
approved by a majority of the "independent" shareholders of MAIR,
Mr. Lallier also notes.
Thus, the Official Committee of Unsecured Creditors of Mesaba asks
the Court to enter a ruling modifying the Debtor's exclusive right
to file and solicit approval of a Plan by permitting the Committee
to file a Plan that incorporates the terms of the Northwest
Transaction on or before January 15, 2007, in the event the Debtor
is unable to do so.
Although the Debtor holds the exclusive right to propose and
solicit approval of a Plan under Section 1121 and the Final
Exclusivity Order, the Debtor likely will be unable to do so,
either because the Board may become deadlocked on whether to
recommend the Plan to MAIR between the two members representing
management and the two members representing MAIR, or because MAIR
will not approve a Plan that incorporates the terms of the
Northwest Transaction, Mr. Lallier explains.
"It is the Committee's view that the proposal and implementation
of a Plan adopting the terms of the Northwest Transaction is in
the best interests of the Debtor's estate, its creditors, and
most likely, MAIR," Mr. Lallier says. "Absent approval of a Plan
incorporating the terms of the Northwest Transaction, the best-
case scenario for the Debtor's plan of reorganization will be the
continuation of Saab flying for Northwest. Even this scenario
requires that Northwest assume the Saab portion of the current
ASA or negotiate a new ASA and permit Mesaba to continue
providing Saab service."
Should the consummation of the Northwest Transaction occur within
the timeframe outlined in the agreement, the Debtor may be
awarded some of the large regional jet flying that Northwest is
planning to begin in 2007, Mr. Lallier adds. If the Northwest
Transaction is not consummated within the timeframe, Northwest
may place these aircraft at other regional carriers to assure
that they can be entered into service upon delivery. Northwest
has informed the Debtor's management that Northwest must soon
select alternative providers of Saab flying and ground handling
services unless it can reasonably expect that the Northwest
Transaction will be approved by Judge Kishel and subsequently
consummated.
Mr. Lallier also notes that MAIR has not indicated whether it
will seek to block the filing of a Plan that incorporates the
terms of the Northwest Transaction. However, MAIR has appointed
another member to the Board as its representative, giving rise to
potential deadlock on the Board if MAIR's representatives are
instructed not to vote for a proposed Plan. Even worse, Mr.
Lallier says, these directors face a severe conflict of interest
between their obligations as representatives of MAIR and their
fiduciary obligations as the Debtor's directors.
MAIR must likewise respond to its own shareholders, including
Riley, who have objected to the Northwest Transaction and
demanded the right to approve any Plan that ultimately is
proposed.
The Creditors Committee asks the Court to hear its request on an
expedited basis.
A full-text copy of the Northwest Transaction is available for
free at http://ResearchArchives.com/t/s?1879
A full-text copy of the Debtor's Bylaws is available for free at:
http://ResearchArchives.com/t/s?187a
About Mesaba Aviation
Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines. The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts. Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy
News, Issue No. 34; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
MESABA AVIATION: Riley & Thales Object to Panel's Exclusivity Plea
------------------------------------------------------------------
The Official Committee of Unsecured Creditors in Mesaba Aviation
Inc.'s chapter 11 case asks the U.S. Bankruptcy Court for the
District of Minnesota to enter a ruling modifying the Debtor's
exclusive right to file and solicit approval of a Plan by
permitting the Committee to file a Plan that incorporates the
terms of the Northwest Transaction on or before Jan. 15, 2007, in
the event the Debtor is unable to do so.
The Committee also asks the Court to hear its request on an
expedited basis.
Riley and Thales Objection
Riley Investment Partners Master Fund, L.P. and Thales Fund
Management, LLC, as substantial shareholders of MAIR, Judge Kishel
to deny the Committee's request.
If the request is granted, the Shareholders ask Judge Kishel
that:
(i) exclusivity should be opened to permit any party to file a
Plan; and
(ii) if any party -- including the Committee or the Debtor --
files a Plan that incorporates the Northwest Transaction,
the Court should direct the Debtor to impose a market test
for the sale of the Debtor's reorganized equity.
Kristine K. Nogosek, Esq., at Stein & Moore, P.A., in St. Paul,
Minnesota, says that the Shareholders' opposition to the request
and the Northwest Transaction is aligned with the interests of
the vast majority of other MAIR shareholders, with the notable
exception of Northwest who owns 28% of MAIR's outstanding shares.
Ms. Nogosek contends that the Shareholders are aware of no
principle under the Bankruptcy Code or applicable law that allows
an insider to retain for itself all of the residual value of a
debtor so long as creditors of a debtor favor that outcome.
At a minimum, Ms. Nogosek says, the conflicts of interest in
Mesaba's bankruptcy case -- particularly those of Northwest who
negotiated the ASA on both sides of the table knowing all along
it was going to file for Chapter 11 protection -- are sufficient
grounds to deny the Committee's request and permit the Debtor's
Board to continue exploring alternative plans without Northwest's
heavy handed influence.
Ms. Nogosek further notes that the consideration proposed by the
Northwest Transaction falls far short of the Debtor's fair market
value to the substantial detriment of Mesaba and MAIR's non-
insider shareholders.
According to Ms. Nogosek, Mesaba's true value is at least
$360,400,000. The difference, then, between the Debtor's true
value and what Northwest is willing to "pay" for it is at least
$216,400,000, representing a substantial 60% discount of Mesaba's
true value, and is evidence that Northwest's proposed purchase
price is insufficient by any objective standard.
Furthermore, the Shareholders are unaware of any efforts to
market or sell Mesaba to anyone other than Northwest. Ms.
Nogosek asserts that fast-tracking a sale to an insider in the
absence of any attempt to maximize value for all stakeholders
through an open sale process or market test is not appropriate.
Ms. Nogosek asserts, among other things, that:
(a) The proposed purchase price consideration -- a
$145,000,000 allowed general unsecured claim -- is not
cash. The Debtor would have to reduce the claim to cash,
which may result in a recovery of substantially less than
100 cents on the dollar, or it would have to wait for a
Plan to be confirmed in the Northwest bankruptcy cases and
bear the associated economic risk; and
(b) Under certain circumstances, Northwest will have a so-
called "Buyer Claim" for $7,300,000 in the Mesaba case.
Thus, Northwest will be paying itself a portion of the
$145,000,000 claim, ahead of the other MAIR shareholders.
MAIR's Objection to Expedited Hearing Plea
MAIR objects to the Creditors Committee's request for an
expedited hearing.
"Given the unusual nature of the relief sought and the
speculative allegations included in the Exclusivity Motion, MAIR
believes that a longer response time and perhaps limited
discovery are appropriate," Kenric D. Kattner, Esq., at Haynes
and Boone, LLP, in Houston, Texas, tells the Court.
Mr. Kattner asserts that the Creditors Committee's request to
modify exclusivity is premature because it is premised upon a
potential deadlock on the Debtor's Board of Directors that might
prevent the Debtor from filing a Plan during its exclusive
period.
Debtor's Statement
Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman,
in Minneapolis, Minnesota, informs the Court that the Debtor has
been working its way through the process required by its
corporate governance documents regarding possible approval of the
Northwest Transaction. The process requires not only the
approval of the Mesaba Board, but also of MAIR, which have not
yet been obtained but remain in process.
The terms of the Northwest Transaction also require MAIR's
consent to the transaction as a condition of closing, although
this condition can be waived by Northwest. While this consent
may occur in the near future, it has not yet occurred, Mr. Meyer
notes.
According to Mr. Meyer, despite the procedural requirements in
the Debtor's governance documents, the Mesaba Board has reviewed
the proposed transaction to discharge its duties as debtor-in-
possession to all parties-in-interest in the Debtor's bankruptcy
case, and has unanimously concluded that:
(1) the proposed Northwest Transaction represents a plausible
solution for all stakeholders in Mesaba, including the
Debtor, its creditors, its shareholder, its employees and
the community;
(2) the financial consideration to the Debtor's estate in the
proposed transaction is within the band of reasonableness
given all the circumstances;
(3) the alternatives to the Northwest Transaction are either
speculative or unacceptable; and
(4) it is important to stay substantially on the timeline set
forth in the transaction documents.
Mr. Meyer submits that the Mesaba Board is supportive of a
consensual transaction and a Reorganization Plan that all parties
can support. The Debtor believes that MAIR and Northwest are
negotiating in good faith to obtain MAIR's consent to the
transaction. Additionally, the Mesaba Board believes that a
consensual agreement among the Debtor, the Creditors Committee,
MAIR and Northwest would be preferable to a contested process
with a contested Plan, whether filed by the Debtor or the
Committee.
Based on information from the parties, the Mesaba Board believes
an agreement may be made between Northwest and MAIR in a short
period of time. However, if that agreement is not made, the
Debtor encourages the commencement and continuance of the Plan
process substantially in the timeframe set forth in the
transaction documents.
Against this backdrop, the Debtor asks the Court to enter a
ruling on the exclusivity request within the parameters of the
arguments and statements it has presented.
About Mesaba Aviation
Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines. The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts. Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy
News, Issue No. 34; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
MODAVOX INC: Earns $53,708 in 2006 Second Quarter Ended August 31
-----------------------------------------------------------------
Modavox Inc. reported $53,708 of net income on $698,946 of
revenues for the quarter ended Aug. 31, 2006, compared with a
$1.1 million net loss on $289,699 of revenues for the same period
in 2005.
Revenues for the quarter ended Aug. 31, 2006 included $341,823
from the Interactive Media Division and $357,123 from
the Broadcast Media Division while all revenues in the 2005
quarter were generated though the Broadcast Media Division.
Selling, General, and Administrative expenses were $201,598 for
the second quarter of 2006 compared with $829,943 for the second
quarter ending 2005, a reduction of $628,344. This reduction
resulted from better control over costs and a reduction in
occupancy, payroll and various consulting expense.
At Aug. 31, 2006, the company's balance sheet showed $3.5 million
in total assets, $1.1 million in total liabilities, and
$2.4 million in total stockholders' equity.
The company's balance sheet at Aug. 31, 2006, also showed strained
liquidity with $424,929 in total current assets available to pay
$1.1 million in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Aug. 31, 2006, are available for
free at http://researcharchives.com/t/s?1886
Going Concern Doubt
As reported in the Troubled Company Reporter on June 20, 2006,
Epstein Weber & Conover P.L.C. in Scottsdale, Arizona, raised
substantial doubt about Modavox Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Feb. 28, 2006. The auditor pointed
to the company's recurring losses from operations, and working
capital deficit.
About Modavox Inc
Modavox Inc. (OTC BB: MDVX.OB) -- http://www.modavox.com/--
produces and distributes online audio and video streaming media
content to targeted communities worldwide. Modavox is the leading
producer and distributor of online, talk radio content. Modavox
streams over 140 programs weekly on its flagship VoiceAmerica
Channel, VoiceAmerica Business Channel and VoiceAmerica Health
Channel. Operating since 1999, the VoiceAmerica Network has
introduced new personalities, products and programs to a rapidly
expanding online audience. VThrough Modavox T Central, Modavox's
patented, advanced distribution technology, Modavox is executing a
pioneering desktop delivery strategy. Modavox T Central takes the
search out of search, delivering content straight to computer
desktops and portable devices.
MORGAN STANLEY: S&P Holds Rating on $3 Mil. Class A-7 Notes at B
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' rating on the
$3 million class A-7 secured fixed-rate notes from Morgan Stanley
ACES SPC's series 2006-8 and removed it from CreditWatch, where it
was placed with positive implications Oct. 12, 2006.
The rating action reflects the Jan. 11, 2007, affirmation of the
rating on the referenced obligations issued by Huntsman
International LLC, a subsidiary of Huntsman Corp., and its removal
from CreditWatch positive.
Morgan Stanley ACES SPC's $46 million secured fixed-rate notes
series 2006-8 is a swap-dependent synthetic transaction that is
weak-linked to the lower of:
(a) the ratings on the respective reference obligations for
each class;
(b) the long-term rating on the swap counterparty and
contingent forward counterparty's guarantor, Morgan
Stanley; and,
(c) the credit quality of the underlying securities, BA Master
Credit Card Trust II's class A certificates from series
2001-B due 2013.
NEW YORK WESTCHESTER: Court Approves Donlin Recano as Claims Agent
------------------------------------------------------------------
New York Westchester Square Medical Center obtained authority from
the U.S. Bankruptcy Court for the Southern District of New York to
employ Donlin, Recano & Company Inc. as its claim, notice and
balloting agent.
Donlin Recano is expected to:
(a) notify all potential creditors of the filing of the
Debtor's bankruptcy petitions and of the setting of the
first meeting of creditors, pursuant to Section 341(a) of
the Bankruptcy Code, under the proper provisions of the
Bankruptcy Code and the Bankruptcy Rules;
(b) maintain an official copy of the Debtor's schedules of
assets and liabilities and statement of financial affairs
listing the Debtor's known creditors and the amounts owed
thereto;
(c) notify all potential creditors of the existence and amount
of their respective claims, as evidenced by the Debtor's
books and records and as set forth in the Schedules;
(d) serve all creditors with notice of the last date for the
filing of proofs of claim and a form for the filing of
such proofs of claim, after such notice and form are
approved by the Court;
(e) file with the Clerk an affidavit or certificate of service
which includes a copy of the notice, a list of persons to
whom it was mailed (in alphabetical order), and the date
the notice was mailed, within 10 days of service;
(f) docket all claims received, maintain the official claims
registers for the Debtor on behalf of the Clerk, and
provide the Clerk with a certified duplicate unofficial
Claims Register on a monthly basis, unless otherwise
directed;
(g) specify, in the Claims Register, these information for
each claim docketed:
* the claim number assigned,
* the date received,
* the name and address of the claimant and agent, if
applicable, who filed the claim,
* the filed amount of the claim, if liquidated, and
* the classification(s) of the claim (e.g. secured,
unsecured, priority, etc.) according to the proof of
claim;
(h) relocate, by messenger, all of the actual proofs of claim
filed to DR&C, not less than weekly;
(i) record all transfers of claims and provide any notices of
such transfers required by Bankruptcy Rule 3001;
(j) make changes in the Claims Register pursuant to Court
Order;
(k) upon completion of the docketing process for all claims
received to date by the Clerk's; office, turn over to the
Clerk copies of the Claims Registers for the Clerk's
review;
(1) maintain the Claims Register for public examination
without charge during regular business hours;
(m) maintain the official mailing list for the Debtor of all
entities that have filed a proof of claim, which list
shall be available upon request by a party-in-interest or
the Clerk;
(n) assist with, among other things, solicitation,
calculation, and tabulation of votes and distribution, as
required in furtherance of confirmation of the Plan;
(o) provide and maintain a web site where parties can view
claims filed, status of claims, and pleadings or other
documents filed with the Court;
(p) 30 days prior to the close of this case, an order
dismissing DR&C would be submitted terminating its
services upon completion of its duties and
responsibilities and upon the closing of this case; and
(q) at the close of the case, box and transport all original
documents in proper format, as provided by the Clerk's
office, to the Federal Records Center.
Donlin Recano's professionals bill:
Professional Hourly Rate
------------ -----------
Data Input/Clerical $40 - $65
Bankruptcy Specialist $130 - $155
Bankruptcy Consultants $170 - $220
IT Programming Consultants $135 - $195
Attorneys/Senior Bankruptcy Consultants $225 - $250
Louis A. Recano, president of Donlin Recano, assures the Court
that his firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
Headquartered in Bronx, New York, New York Westchester Square
Medical Center -- http://www.nywsmc.org/-- is a not-for-profit,
community acute care hospital and certified stroke center that has
served a working class population in the Bronx community since
1929. Its primary facility, located at 2475 St. Raymond Avenue,
Bronx, New York 10461, houses 205 beds and provides acute adult
medical and surgical care, emergency medicine and ambulatory
services. NYWSMC is a membership corporation whose members are
selected by the New York-Presbyterian Healthcare System, Inc.
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. As of
Oct. 31, 2006, the Debtor's total assets were valued at
$30,017,586 and liabilities totaling $40,496,354. The Debtor's
exclusive period to file a chapter 11 plan expires on Apr. 18,
2007.
NEW YORK WESTCHESTER: U.S. Trustee Appoints Five-Member Committee
-----------------------------------------------------------------
The U.S. Trustee for Region 2 appointed five creditors to serve on
the Official Committee of Unsecured Creditors in New York
Westchester Square Medical Center's chapter 11 case:
1. Westchester Square Emergency Physician Services, PLLC
484 Temple Hill Road
New Windsor, NY 12553
Attn: Marie M. Buekanan, CFO
Tel: (845) 565-3700
2. Medical Resources, Inc.
1455 Broad Street
Bloomfield, NJ 07003
Attn: John Valla, President and COO
Tel: (973) 873-9850
3. 1199 SEIU United Healthcare Workers East
310 West 43 Street Road
New York, NY 10036
Attn: Joyce Neil, Vice President
4. Sodexho, Inc.
9801 Washington Boulevard
Raithersburg, MD 20878
Attn: Adrienne Sturges
Tel: (301) 987-4505
5. New York and Presbyterian Hospital
Room 790
333 East 38th Street
New York, NY 10016
Attn: Mark Larmore, VP
Tel: (212) 297-4356
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Headquartered in Bronx, New York, New York Westchester Square
Medical Center -- http://www.nywsmc.org/-- is a not-for-profit,
community acute care hospital and certified stroke center that has
served a working class population in the Bronx community since
1929. Its primary facility, located at 2475 St. Raymond Avenue,
Bronx, New York 10461, houses 205 beds and provides acute adult
medical and surgical care, emergency medicine and ambulatory
services. NYWSMC is a membership corporation whose members are
selected by the New York-Presbyterian Healthcare System, Inc.
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. As of
Oct. 31, 2006, the Debtor's total assets were valued at
$30,017,586 and liabilities totaling $40,496,354. The Debtor's
exclusive period to file a chapter 11 plan expires on Apr. 18,
2007.
NEXEN INC: S&P Affirms Subordinated Debt Rating at 'BB+'
--------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Calgary,
Alberta-based upstream oil and gas producer Nexen Inc. to positive
from stable after an annual review of the company's overall credit
profile.
Standard & Poor's also affirmed its 'BBB-' corporate credit and
senior unsecured debt ratings and its 'BB+' subordinated
debt rating on the company.
"The recent completion of the company's U.K. North Sea Buzzard
project and the near completion of its Long Lake in-situ oil sands
project have strengthened the company's business risk profile,"
said Standard & Poor's credit analyst Michelle Dathorne.
"These projects are also expected to strengthen Nexen's
consolidated profitability, based on the high margins
associated with their production volumes," Ms. Dathorne added.
Given Standard & Poor's forecast of the company's 2007 operating
cash flows and spending requirements, Nexen should generate about
CDN$600 million of free cash flow. As a result, any subsequent
improvement in credit quality will be contingent on the use of
free cash flow for debt repayment, or cash flows increasing such
that Nexen's cash flow protection measures improving to levels
Standard & Poor's deems commensurate with a 'BBB' rating.
Specifically, an upward rating revision would be contingent on its
debt-to-EBITDA not exceeding 1.0x.
The positive outlook reflects Standard & Poor's expectation that
the recent improvements to Nexen's business risk profile, with the
completion of key development projects, should allow the company
to also strengthen its financial profile. Nexen's ability to
increase its proven reserve base and production by exploiting its
inventory of low-risk prospects should strengthen
its cash flow protection measures, despite the lack of material
near-term debt reduction.
If the company can reduce its debt-to-EBITDA ratio to below 1.0x,
from its Sept. 30, 2006, level of 1.8x, the corporate credit
rating could be raised to 'BBB'.
As these improvements should occur within the next two years,
Standard & Poor's expects to reevaluate its ratings on the company
in 2008. Conversely, Nexen's inability to improve its overall
financial profile could result in the outlook being revised to
stable.
NOMURA ASSET: Fitch Holds BB Rating on Class B4 S. 2003-A1 Certs.
-----------------------------------------------------------------
Fitch Ratings has taken rating actions on these classes of Nomura
Asset Acceptance Corporation's Alternative Loan Trust mortgage
pass-through certificates:
Series 2003-A1
-- Class A affirmed at 'AAA';
-- Class M affirmed at 'AAA';
-- Class B1 affirmed at 'AA';
-- Class B2 affirmed at 'A';
-- Class B3 affirmed at 'BBB'; and,
-- Class B4 affirmed at 'BB'.
Series 2003-A2
-- Class A affirmed at 'AAA'
-- Class M1 affirmed at 'AAA'
-- Class M2 affirmed at 'AAA';
-- Class B1 affirmed at 'AAA';
-- Class B2 affirmed at 'AA';
-- Class B3 affirmed at 'AA-';
-- Class B4 affirmed at 'A';
-- Class B5 affirmed at 'BBB'; and,
-- Class B6 affirmed at 'BB+'.
Series 2003-A3
-- Class A affirmed at 'AAA';
-- Class M1 upgraded to 'AA+' from 'AA';
-- Class M2 upgraded to 'A+' from 'A'; and,
-- Class B1 upgraded to 'BBB+' from 'BBB'.
Series 2005-AR3
-- Class A affirmed at 'AAA'
-- Class M1 affirmed at 'AA'
-- Class M2 affirmed at 'A+';
-- Class M3 affirmed at 'A-';
-- Class M4 affirmed at 'BBB+'; and,
-- Class M5 affirmed at 'BBB'.
The mortgage pool consists of fixed- and adjustable-rate mortgage
loans secured by one- to four-family residential properties. A
majority of the loans from 2003 vintage series are serviced by
Option One Mortgage Corporation. GMAC Mortgage Corp. is the
servicer for the series 2005-AR3.
The affirmations, affecting approximately $450.57 million of the
outstanding certificates, reflect credit enhancement consistent
with future loss expectations. Cumulative losses as a percentage
of the original collateral balance for the affirmed transactions
range from 0.03% to 0.77%.
The upgrades reflect an improvement in the relationship of CE to
future loss expectations and affect approximately $12.26 million
of outstanding certificates. The overcollateralization of series
2003-A3 is currently at the target amount of $1.6 million. The
deal has incurred cumulative losses of 0.04%.
The transactions are seasoned from a range of 18 to 44 months and
the pool factors range from 15% to 61%.
NORTH ATLANTIC: Moody's Cuts Rating on $35 Mil. Senior Notes to Ca
------------------------------------------------------------------
Moody's Investors Service downgraded North Atlantic Holding
Company's $35 million senior discount notes to Ca from Caa2, and
downgraded the $200 million 9-1/4% global notes at North Atlantic
Trading Company, Inc. to Caa2 from Caa1.
NATC's corporate family rating of B3 was withdrawn and a new
lower, corporate family rating of Caa2 was assigned at the holding
company, NAHC. This rating action reflects the company's very
high leverage, poor EBIT coverage, and meaningfully negative free
cash flow as well as Moody's expectation that competition in the
smokeless tobacco category will intensify with the participation
of larger, better resourced participants.
The outlook is stable.
"NAHC's corporate family rating is constrained by the company's
small scale and extremely weak financial profile offset in part by
its portfolio of well known brands, albeit with weaker market
shares, and improved EBITA margins, " says Moody's Vice President
Janice Hofferber.
NAHC's long-term ratings and stable outlook reflect the increased
risk of additional debt restructurings that may be unfavorable to
current bondholders, as well as the significant financial
challenges that the company will face over the next twelve months.
In addition, Moody's believes that corporate governance is weak at
the company due to the high concentration of ownership as well as
the limited independence of its board of directors.
Moody's expects liquidity to remain adequate in the near-term with
sufficient availability under the company's $55 million revolving
credit facility to continue to fund operating losses. However, if
the company's financial performance deteriorates further, there is
a possibility that the company may need to seek relief from its
financial covenants. More significantly, the current financing
agreement requires that the Chief Executive Officer of NAHC to be
reasonably acceptable to the banks -- a provision that could
increase the bank group's negotiating leverage in a time of
stress.
Ratings assigned:
* North Atlantic Holding Company, Inc.
-- Corporate family rating of Caa2
-- Probability of default rating of Caa2
Ratings withdrawn:
* North Atlantic Trading Company, Inc.
-- Corporate family rating of B3
Ratings downgraded:
* North Atlantic Holding Company, Inc.
-- $35 million senior discount notes due 2014, to Ca,
LGD6, 94% from Caa2, LGD6, 94%
* North Atlantic Trading Company, Inc.
-- $200 million 9 ¬% global notes due 2012, to Caa2, LGD4,
59% from Caa1, LGD4, 58%
Outlook is stable.
North Atlantic Holding Company, Inc. and its subsidiaries is the
third largest manufacturer and marketer of loose leaf chewing
tobacco in the United States, and the largest importer and
distributor in the United States of premium cigarette papers and
related products. Total revenues for the last twelve months ended
September 2006 were approximately $118 million.
NYU HOSPITALS: S&P Rates $167.8 Million Series 2007A Bonds at BB
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to New
York State Dormitory Authority's $167.8 million series 2007A
bonds, issued for NYU Hospitals Center, reflecting the center's
very low liquidity, measurable capital needs, competitive and
fragmented market, and lack of commercial excess coverage for
malpractice liability.
The outlook is stable.
Recent and current trends are generally positive, including
improved payment rates, solid volume trends for most lines of
business, strong revenue cycle improvements, and stronger income
statement performance than NYUHC has produced in many years.
Planned infrastructure projects should also help to attract
patient volumes.
"Despite the generally positive trends, NYU Hospitals Center's
financial flexibility remains quite thin, and given the sizable
increase in debt underway, including the current and planned
$120 million financing for later in 2007, already factored into
the rating, NYUHC has little cushion for a slip in operations or
liquidity," said Standard & Poor's credit analyst Liz Sweeney.
"An unexpected decline in liquidity or operations could cause a
lower rating or revised outlook."
Credit strengths include NYUHC's improved financial performance in
the past three years, including completion of a turnaround from a
loss in 2003 to positive operating income in 2004 and 2005,
continuing in 2006.
In addition, although unrestricted liquidity remains quite low,
liquidity is rising, and NYUHC has improved other balance sheet
measures, reducing accounts payable and beefing up self-insurance
reserves. NYUHC also has a management team and operating
structure that is highly integrated with the New York University
School of Medicine, an impressive roster of trustees, and a niche
in the Manhattan market.
The low liquidity, while a major factor preventing a higher
rating, does not preclude the 'BB' rating because of NYUHC's
access to lines of credit, the positive trend in cash levels in
the past year, and the organization's long history of managing
with a modest level of liquidity.
Bond proceeds finance approximately $51 million of infrastructure
projects at the main NYUHC campus, refinancing of the $25 million
series 2000B bonds, and $91 million of refinancing related to
NYUHC's outpatient cancer center.
PACER HEALTH: Subsidiary Closes on Hospital Operating Lease Pact
----------------------------------------------------------------
Pacer Health Corporation's wholly owned subsidiary, Pacer Health
Management Corporation of Kentucky, closed on the Hospital
Operating Lease Agreement with Knox Hospital Corporation, dba Knox
County Hospital, a Kentucky non-profit corporation and the County
of Knox, Kentucky.
Pursuant to Agreement Pacer Health Management will lease all of
the assets and real property used in connection with the Hospital
from the Knox County Parties for an annual lease payment equal to
the amount of annual payment due by Knox County on those certain
County of Knox, Kentucky Taxable General Obligation Refunding
Bonds, Series 2006, after applying the capitalized interest which
is to be paid from the proceeds of the Bonds. The annual lease
payment shall be payable by Pacer to a Trustee for the Bonds in
equal monthly installments. Knox County had issued the Bonds in
the aggregate principal amount of $15,775,000.
About the Hospital
The Hospital is a general acute care hospital located on a parcel
of real property owned by Knox County and leased to the Hospital.
Pursuant to the Agreement, the Knox County Parties transferred and
delegated full and complete management responsibility and
operational control for the Hospital to Pacer Health Management.
Additionally, at any time during the term of the Agreement, Pacer
Health Management, or its designee, shall have the option to
purchase all of the Facility Assets from the Knox County Parties
and assume all of the Facility Liabilities, excluding liability
for the Excluded Liabilities as defined in the Agreement for a
purchase price equal to the sum of (a) the lesser of: (i) the
outstanding principal amount of the Bonds on the closing of such
purchase or (ii) what the principal balance of the Bonds would
have been if all lease payments and other payments to be made by
Pacer Health Management to the Trustee were used to satisfy the
principal and interest due under the Bonds at the date of each
such payment plus (b) any prepayment penalties on the Bonds and
(c) less any funds then held in any debt service reserve fund,
bond fund or any other fund or account in any way pertaining to
the Bonds.
A full text-copy of the Hospital Operating Lease Agreement with
Knox Hospital Corporation and The County of Knox, Kentucky may be
viewed at no charge at http://ResearchArchives.com/t/s?1883
Miami, Nev.-based Pacer Health Corporation (OTCBB: PHLH)
-- http://www.pacerhealth.com/-- owns and operates medical
treatment centers and acute care facilities, primarily serving the
growing senior citizen population and low-to-moderate income
individuals.
The company's balance sheet at Sept. 30, 2006 showed $8.9 million
in total assets and $9.8 million in total liabilities, resulting
in an $885,146 total stockholders' deficit.
PANTRY INC: Reports Lower Gas Margins for Quarter Ended Dec. 28
---------------------------------------------------------------
The Pantry Inc. reported significantly lower gas margins for its
first fiscal quarter ended Dec. 28, 2006.
Peter J. Sodini, chairman and chief executive officer, said, "As
we have previously indicated, our first quarter results will be
significantly below a year ago, and unusually low relative to our
historical seasonal trends, primarily due to an average gasoline
margin per gallon in the low 8-cent range. However, gas margins
over the past few weeks have been more in line with historical
seasonal trends."
The company disclosed that it expects to release results for the
quarter on Jan. 25, 2007 and to host a conference call that day at
10:00 a.m. Eastern Time. The conference call will be broadcast
live over the Internet and will be accessible at
http://www.thepantry.comor http://www.companyboardroom.com.
Headquartered in Sanford, North Carolina, The Pantry, Inc.
(NASDAQ: PTRY) -- http://www.thepantry.com/--operates convenience
store chains in the southeastern United States. As of
June 29, 2006, the Company operated 1,499 stores in eleven states
under select banners including Kangaroo Express(SM), its primary
operating banner.
* * *
As reported in the Troubled Company Reporter on Oct. 30, 2006,
Moody's Investors Service confirmed The Pantry Inc.'s B1 corporate
family rating in connection with the rating agency's
implementation of its new Probability-of-Default and Loss-Given-
Default rating methodology.
Standard & Poor's Ratings Services raised its corporate credit
rating on The Pantry Inc. to 'BB-' from 'B+'. At the same time,
the bank loan rating was raised to 'BB' from 'BB-', with the
recovery rating unchanged at '1', indicating expectations for full
recovery of principal in the event of a default. The subordinated
debt rating was also raised to 'B' from 'B-'. The outlook was
stable.
PHOTRONICS INC: Posts $29.3 Million Net Income in Fiscal 2006
-------------------------------------------------------------
Photronics Inc. filed its financial statements for the fiscal year
ended Oct. 29, 2006, with the Securities and Exchange Commission
on Jan. 11, 2007.
Net income for fiscal 2006 amounted to $29.3 million compared to
the prior fiscal year's net income of $38.7 million. Net income
for the 2006 fiscal year included a restructuring charge of
$15.6 million after tax in connection with the company's
operations in North America.
Sales for the 2006 fiscal year were $454.9 million, up 3.2% from
the $440.8 million reported in fiscal 2005. Semiconductor
photomasks accounted for $355.1 million or 78.1% of revenues
during fiscal 2006, while sales for FPD photomasks accounted for
$99.8 million or 21.9%. Year-over-year, semiconductor photomask
revenues decreased 1.8%, while FPD photomask revenues increased
25.9%.
Fourth Quarter Results of Operations
Net income for the fourth quarter of fiscal 2006 amounted to
$9.8 million compared to the prior year's fourth quarter net
income of $8.7 million. Net income for the fourth quarter of 2006
included a restructuring charge of $2.4 million after tax in
connection with the company's operations in North America.
Sales for the fourth quarter ended Oct. 29, 2006, were
$115.3 million, up 3.1%, compared to $111.8 million for the fourth
quarter of 2005. Semiconductor photomasks accounted for
$90.5 million or 78.5% of revenues during the fourth quarter of
fiscal 2006, while sales for flat panel display (FPD) photomasks
accounted for $24.8 million or 21.5% of revenues.
Michael J. Luttati, Chief Executive Officer shared his views of
the company's reported results. "We are very pleased to have
finished our fiscal year on a high note with solid performance in
our fourth quarter. The entire Photronics team executed with
clarity and purpose throughout fiscal 2006 to deliver positive
results while undertaking a significant transformation of the
company."
At Oct. 29, 2006, the company's balance sheet showed $1 billion in
total assets, $385.4 million in total liabilities, $46 million in
minority interest, and $614.3 million in total stockholders'
equity.
Full-text copies of the company's consolidated financial
statements for the year ended Oct. 29, 2006, are available for
free at http://researcharchives.com/t/s?1873
About Photronics Inc.
Photronics Inc. -- http://www.photronics.com/ -- is a worldwide
manufacturer of photomasks. Photomasks are high precision quartz
plates that contain microscopic images of electronic circuits. A
key element in the manufacture of semiconductors and flat panel
displays, photomasks are used to transfer circuit patterns onto
semiconductor wafers and flat panel substrates during the
fabrication of integrated circuits, a variety of flat panel
displays and, to a lesser extent, other types of electrical and
optical components. They are produced in accordance with product
designs provided by customers at strategically located
manufacturing facilities in Asia, Europe, and North America.
* * *
As reported in the Troubled Company Reporter on Oct. 31, 2006,
Moody's Investors Service affirmed its B1 corporate family rating
on Photronics, Inc. Additionally, Moody's revised its
probability-of-default rating on the company's $190 million 4.75%
convertible subordinated notes due 2006 to B2 from B3 and assigned
a LGD5 loss-given-default rating on the loan.
Moody's also upgraded to B2 from B3 its probability-of-default
rating on the company's $150 million 2.25% convertible
subordinated notes due 2008 and assigned a LGD5 loss-given-default
rating on the loan.
PINNACLE ENT: Reports 10 Mil. New Shares Priced at $32 Per Share
----------------------------------------------------------------
Pinnacle Entertainment Inc. entered into an underwriting agreement
with Bear, Stearns & Co. Inc. and Lehman Brothers Inc. as the
representatives of the several underwriters, for the sale to the
public of 10 million shares of its common stock, par value $0.10
per share, at $32 per share resulting in gross proceeds of
$320 million.
Bear, Stearns & Co. Inc. and Lehman Brothers Inc. are acting as
joint book-running managers of the offering. In addition,
Deutsche Bank Securities Inc. is acting as lead manager of the
offering.
According to the terms of the underwriting agreement, the
underwriters will receive an underwriting discount equal to $1.25
per share.
The company has granted the underwriters an option exercisable for
thirty days after the date of the underwriting agreement to
purchase 1.5 million additional shares of its common stock at the
same public offering price minus the underwriting discount.
The offering is expected to close on Jan. 18, 2007, subject to
customary closing conditions. The underwriters of the offering
have a 30-day option to purchase an additional 1.5 million shares
of common stock from Pinnacle.
The proceeds of the offering are expected to be used for general
corporate purposes and for one or more of its capital projects,
including expansions at existing facilities, its St. Louis
construction projects, its Sugarcane Bay and Atlantic City
development projects, and possible other future development
projects.
The company also disclosed Bear Stearns Corporate Lending Inc., an
affiliate of Bear, Stearns & Co. Inc., is a syndication agent and
lender under the Credit Facility. Lehman Commercial Paper Inc.,
an affiliate of Lehman Brothers Inc., is the administrative agent
and a lender under the Credit Facility. Deutsche Bank Securities,
Inc. is one of the joint documentation agents and one of its
affiliates is a lender under the Credit Facility.
Either directly or through their affiliates, several other
underwriters, including Merrill Lynch, Pierce, Fenner & Smith
Incorporated, JP Morgan Securities Inc., Bank of America
Securities LLC, Wachovia Capital Markets, LLC, Societe Generale
Securities Corporation, Wells Fargo Securities, LLC and
Commerzbank Capital Markets Corporation, are also lenders under
the Credit Facility. The underwriters and/or their affiliates
receive customary fees and expenses for such services.
Copies of the prospectus supplement relating to the offering may
be obtained from Bear, Stearns & Co. Inc., Prospectus Department,
383 Madison Avenue, New York, New York 10179, Tel. No.
1-866-803-9204 or Lehman Brothers Inc., c/o ADP Financial
Services, Prospectus Fulfillment, 1155 Long Island Avenue,
Edgewood, NY 11717 at Fax No. (631) 254-7268.
A full text-copy of the Underwriting Agreement with Bear, Stearns
& Co., Inc. & Lehman Brothers Inc. may be viewed at no charge at
http://ResearchArchives.com/t/s?187d
A full text-copy of the Opinion and Consent of Irell & Manella LLP
relative to the Public Sale may be viewed at no charge at
http://ResearchArchives.com/t/s?187e
Headquartered in Las Vegas, Nevada, Pinnacle Entertainment Inc.
(NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates casinos
in Nevada, Louisiana, Indiana and Argentina, owns a hotel in
Missouri, receives lease income from two card club casinos in the
Los Angeles metropolitan area, has been licensed to operate a
small casino in the Bahamas, and owns a casino site and has
significant insurance claims related to a hurricane-damaged casino
previously operated in Biloxi, Mississippi. Pinnacle opened a
major casino resort in Lake Charles, Louisiana in May 2005 and a
new replacement casino in Neuquen, Argentina in July 2005.
* * *
As reported in the Troubled Company Reporter on Oct. 4, 2006,
Moody's Investors Service's confirmed Pinnacle Entertainment
Inc.'s B2 Corporate Family Rating.
At the same time, Standard & Poor's Ratings Services affirmed its
'BB-' rating and '1' recovery rating following Pinnacle
Entertainment Inc.'s $250 million senior secured bank facility
add-on.
PORTOLA PACKAGING: Nov. 30 Balance Sheet Upside-Down by $88 Mil.
----------------------------------------------------------------
Portola Packaging Inc. filed its financial statements for the
first quarter ended Nov. 30, 2006, with the Securities and
Exchange Commission on Jan. 12,2007.
Portola Packaging Inc.'s balance sheet at Nov. 30, 2006, showed
$154.3 million in total assets and $242.3 million in total
liabilities, resulting in an $88 million total stockholders'
deficit.
Portola Packaging Inc. reported a $2.1 million net loss on
$67.4 million of sales for the first quarter ended Nov. 30, 2006,
compared with a $3.2 million net loss on $65.9 million of sales
for the same period in 2005.
Portola reported operating income of $3.3 million for the first
quarter of fiscal year 2007, compared to operating income of
$2.1 million for the first quarter of fiscal year 2006, an
increase of 57.1%.
Improvements in operations of $1.2 million were mainly the result
of lower general and administrative expenses and decreased
restructuring charges in the first quarter of fiscal year 2007
compared to the first quarter of fiscal year 2006. Also, during
the first quarter of fiscal year 2006, the company incurred a one-
time charge of $300,000 relating to the dissolution of the
company's Management Deferred Compensation Plan partially offset
by a gain of $200,000 on the sale of the company's San Jose
California facility.
EBITDA increased $1.2 million to $7.2 million in the first quarter
of fiscal year 2007 compared to $6 million in the first quarter of
fiscal year 2006. Adjusted EBITDA which excludes the effect of
restructuring charges, gains or losses on the sale of assets and
costs relating to the dissolution of the company's Management
Deferred Compensation Plan, increased $700,000 or 10.6% to
$7.3 million in the first quarter of fiscal year 2007 compared to
$6.6 million in the first quarter of fiscal year 2006.
Full-text copies of the company's consolidated financial
statements for the quarter ended Nov. 30, 2006, are available for
free at http://researcharchives.com/t/s?1875
About Portola Packaging
Portola Packaging -- http://www.portpack.com/-- designs,
manufactures and markets tamper-evident plastic closures used in
the dairy, fruit juice, bottled water, sports drinks,
institutional food products and other non-carbonated beverage
products. The company also produces a wide variety of plastic
bottles for use in the dairy, water and juice industries,
including various high density bottles, as well as five-gallon
polycarbonate water bottles. In addition, the company designs,
manufactures and markets capping equipment for use in high speed
bottling, filling and packaging production lines. The company is
also engaged in the manufacture and sale of tooling and molds used
in the blow molding markets.
About Portola Tech
Portola Tech International -- http://www.techindustries.com/-- a
wholly owned subsidiary of Portola Packaging, manufactures,
markets and designs plastic packaging components for the cosmetic,
fragrance and toiletries industry. PTI's capabilities include
injection and compression molding, thermal and ultraviolet
metallizing, ultraviolet one-coat spray technologies, silk
screening, hot stamping, lining and multiple component assembly.
In addition to offering the largest stock line of closures in the
industry, with over 450 styles and sizes, PTI has a complementary
line of heavy wall PETG and polypropylene jars.
* * *
As reported in the Troubled Company Reporter on Dec. 13, 2006,
Moody's Investors Service affirmed its B1 rating for the company's
$60 million Guaranteed Senior Secured Revolver and its Caa2 rating
for the company's $180 million Guaranteed Senior Unsecured Notes
due 2012. At the same time, Moody's revised the ratings outlook
to Stable from Negative.
PROPEX INC: Moody's Holds Junk Rating on $150 Million Senior Debt
-----------------------------------------------------------------
Moody's Investors Service changed the outlook on Propex Inc.'s
long term debt ratings to negative from stable.
The action was prompted by operating weakness, including declining
sales and profitability resulting from a cyclical slowdown in
residential construction and overall economic activity. The
company is currently in the process of renegotiating its bank
covenants.
The operating weakness was exacerbated by the greater than
expected impact of the backward integration of the large
residential carpet manufacturers, namely Shaw Industries, Inc. and
Mohawk Industries, Inc. into the carpet backing business. Volumes
in geotextiles as well as other industrial and concrete
applications were also below expectations, as was the case with
other polypropylene converters in recent months. Moody's expects
that weak performance is likely to continue through 2007 or until
residential construction begins to recover.
Although Moody's believes that current ratings appropriately
balance the company's leadership position in its principal markets
with the mature and cyclical nature of many of these markets,
companies are at a point in the business cycle which, if
prolonged, presents increased risk for the lenders.
Notwithstanding the probable covenant breach as of Dec. 31, 2006,
Moody's believes that covenant relief should be provided by the
lender group at levels which recognize current weakness in the
company's principal end markets.
The B2 Corporate Family Rating and instrument ratings continue to
reflect the company's high leverage, weak interest coverage and
low free cash flow generation relative to debt. The ratings also
reflect the highly competitive, mature industry that Propex
operates in and the cyclical nature of many of the end markets.
Residential renovation and construction are particularly
vulnerable to economic downturns, increases in interest rates and
housing-specific market disruptions or corrections. The ratings
benefit from scale and diversification opportunities offered by
the integration of SI's industrial fabrics, geotextiles and
concrete systems businesses and a shift away from carpet backing
as the source of the majority of the revenues along with a
reduction in customer concentration.
The ratings recognize the completion of key initiatives to achieve
cost reductions and eliminate duplication. The ratings also
acknowledge Propex's leadership position in its principal market
segments and historical ability in managing price fluctuations
relating to raw materials.
Moody's affirmed these ratings:
-- The Ba3 LGD3, 30% rating on the senior secured credit
facilities consisting of a $50 million revolver due 2011,
and the original $260 million term loan due 2012;
-- The Caa1, LGD5, 82% rating on the $150 million senior
unsecured due 2012;
-- The B2 Corporate Family Rating;
-- The B2 Probability of Default Rating;
The ratings outlook was changed to negative from positive.
The Speculative Grade Liquidity Rating is SGL-3. Adequate
liquidity is subject to covenant relief.
Q.E.P. CO: Discloses Violation of Financial Covenant
----------------------------------------------------
Q.E.P. Co. Inc. disclosed in a regulatory filing with the U.S.
Securities and Exchange Commission that in the course of preparing
it quarterly report for the fiscal 2007 third quarter, it
determined, on Jan. 4, 2007, that it was in violation of a
financial covenant under the company's credit facility with its
senior lenders that required the company to maintain a certain
senior debt to trailing EBITDA ratio
A violation of this financial covenant would, unless waived by the
Lenders, constitute an event of default under the Credit Facility,
giving the Lenders the right to prohibit additional borrowing
under the Credit Facility, accelerate the company's indebtedness
thereunder, and take other actions as provided for in the Credit
Facility.
As of Jan. 4, 2007, $24,585,168 of borrowings was outstanding
under the Credit Facility, including reserves and outstanding
letter of credit.
The company is currently in discussions with the Lenders with
respect to the violation of the financial covenant with a view
toward obtaining a waiver of the current non-compliance with the
covenant. There can be no assurance that the Company will be able
to negotiate a waiver or that such a waiver will be on terms
acceptable to the company. If the company is unable to obtain a
waiver from the Lenders, it could have a material adverse effect
on the company's financial position.
Q.E.P. Co. Inc. -- http://www.qep.com/-- (NASDAQ: QEPC)
manufactures, markets and distributes a broad line of flooring
tools and accessories for the home improvement and professional
installer markets.
QUEST MINERALS: Gets Kentucky Permit to Conduct Mining Operations
-----------------------------------------------------------------
Quest Minerals & Mining Corp. has received a permit from the
Kentucky Department of Natural Resources to conduct coal mining at
its Pond Creek Mine at Slater's Branch, Kentucky. The mining
permit is held by Quest's wholly owned subsidiary, Gwenco, Inc.,
and allows Gwenco to recommence mining operations at the Pond
Creek Mine.
"We are very pleased that we have received the required mining
permits," Eugene Chiaramonte, Jr., President of Quest, stated.
"which allow us to recommence mining operations at our Pond Creek
mine at Slater's Branch. We believe that obtaining this permit is
perhaps the most significant step we have taken in our efforts to
start mining again."
"We now intend to complete the rehabilitation of the mine,
including pumping the mine free of water and taking other steps
necessary for the mine to be ready for operation."
About Quest Minerals & Mining
Based in Paterson, New Jersey, Quest Minerals & Mining Corp.
(OTC BB:QMMG.OB) -- http://www.questminerals.com/-- acquires and
operates energy and mineral related properties in the southeastern
part of the United States. Quest focuses its efforts on
properties that produce quality compliance blend coal.
At Sept. 30, 2006, the Company's balance sheet showed total assets
of $6,465,372 and total liabilities of $7,579,981, resulting in a
stockholders' deficit of $1,114,609.
REFCO INC: Court Reduces Seven Deficient Claims to Zero
-------------------------------------------------------
At the request of Marc S. Kirschner, the Chapter 11 Trustee of
Refco Capital Markets, Ltd., the U.S. Bankruptcy Court for the
Southern District of New York reduces to $0 seven proofs of claim,
aggregating more than $300,000,000, for purposes of voting on the
Refco Inc. and its debtor-affiliates' Modified Joint Chapter 11
Plan.
The Claims are:
Claimant Claim No. Claim Amount
-------- --------- ------------
PCMG Trading Partners V LP 9315 $196,874,882
William T. Esrey Trading Partners 9314 36,957,887
Global Macro Fund Limited 12080 40,384,866
OFI Palmares 12054 12,943,388
SPhinX Managed Futures Index Fund LP 13253 39,005,537
Masonic Medical Research Laboratory 11787 3,600,000
Trustees of Masonic Hall & Asylum 13229 34,869,937
Jared R. Clark, Esq., at Bingham McCutchen LLP, in New York,
relates that Claim Nos. 9314 and 9315 are claims against RCM for
the value of the collateral pledged to RCM to secure loans to the
claimants. The Loans are (i) outstanding and unpaid, and (ii) of
equal of greater amount than the Collateral value.
On the other hand, Claim Nos. 12080, 12054, 13253, 11787 and
13229 are claims based on the facts and circumstances underlying
the disputes between the Debtors and SPhinX Managed Futures Fund
SPC and certain other entities. All of those were resolved
through a settlement agreement approved in June 2006.
Mr. Clark asserts that the SPhinX-Related Claims cannot stand as
independent claims against RCM to the extent that they are
identical to, or derivative of, claims that were expressly
released in the SPhinX Settlement.
Although appeals on SPhinX Settlement approval are pending, the
appellants have not sought a stay of those proceedings, and the
current value of the SPhinX-Related Claims is nil, Mr. Clark
tells Judge Drain.
Pursuant to the Order, each holder of the Pledged Collateral
Claims and the SPhinX-Related Claims will retain its claim for
distribution purposes, unless that claim is otherwise disallowed.
The Order is without prejudice to the RCM Trustee's right to
object to any other claims in the Debtors' Chapter 11 cases, or
to further object to claims subject to the Motion, on any grounds
whatsoever.
About Refco Inc.
Headquartered in New York City, Refco Inc. (OTC: RFXCQ) --
http://www.refco.com/-- is a diversified financial services
organization with operations in 14 countries and an extensive
global institutional and retail client base. Refco's worldwide
subsidiaries are members of principal U.S. and international
exchanges, and are among the most active members of futures
exchanges in Chicago, New York, London and Singapore. In addition
to its futures brokerage activities, Refco is a major broker of
cash market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco is one of the largest global clearing firms for
derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and $16.8 billion in debts to
the Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC,
is a regulated commodity futures company that has businesses in
the United States, London, Asia and Canada. Refco, LLC, filed
for bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as
Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner
is represented by Bingham McCutchen LLP. RCM is Refco's
operating subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management
LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC,
filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-11260 through 06-11262).
Refco Commodity Management, Inc., formerly known as CIS
Investments, Inc., a debtor-affiliate of Refco Inc., filed for
chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No.
06-12436). (Refco Bankruptcy News, Issue No. 54; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
Plan Update
On Sept. 14, 2006, Refco, Inc., and 25 of its subsidiaries, along
with Marc S. Kirschner, the Chapter 11 Trustee for the estate of
Refco Capital Markets, Ltd., delivered a Chapter 11 plan of
reorganization and accompanying Disclosure Statement to the Court.
On Oct. 10, 2006, the Debtors filed an Amended Plan and Disclosure
Statement and on Oct. 13, filed a Modified Amended Disclosure
Statement. On Oct. 16, 2006, the Court gave its tentative
approval on the Disclosure Statement and the Court Clerk entered
an order on Oct. 20, 2006.
On Dec. 15, the Modified Joint Chapter 11 Plan of Refco Inc. and
certain of its direct and indirect subsidiaries, including Refco
Capital Markets, Ltd., and Refco F/X Associates LLC, was confirmed
by the Court. That Plan became effective on Dec. 26, 2007.
REFCO INC: Trustee Wants More Time to File List of Securities
-------------------------------------------------------------
Marc S. Kirschner, the Chapter 11 Trustee for Refco Capital
Markets, Ltd. estate, asks the U.S. Bankruptcy Court for the
Southern District of New York to extend to April 15, 2007, the
deadline for him to file a cumulative list of securities sold by
RCM between October 1, 2006, and March 31, 2007.
The RCM Securities List will include details of sale price
received, method of sale used and commission paid, as well as a
report for the first quarter of 2007, which report is due to the
Court by April 15.
The RCM Trustee asserts that it would be detrimental to the RCM
stakeholders to publicly disclose the list of securities sold to
date because that disclosure may:
(i) reveal market sensitive information about his liquidation
strategy; and
(ii) adversely affect the price of securities remaining in the
portfolio.
The RCM Trustee anticipates that all of the RCM Securities will
have been substantially liquidated by the end of February 2007.
About Refco Inc.
Headquartered in New York City, Refco Inc. (OTC: RFXCQ) --
http://www.refco.com/-- is a diversified financial services
organization with operations in 14 countries and an extensive
global institutional and retail client base. Refco's worldwide
subsidiaries are members of principal U.S. and international
exchanges, and are among the most active members of futures
exchanges in Chicago, New York, London and Singapore. In addition
to its futures brokerage activities, Refco is a major broker of
cash market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco is one of the largest global clearing firms for
derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and $16.8 billion in debts to
the Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC,
is a regulated commodity futures company that has businesses in
the United States, London, Asia and Canada. Refco, LLC, filed
for bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as
Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner
is represented by Bingham McCutchen LLP. RCM is Refco's
operating subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management
LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC,
filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-11260 through 06-11262).
Refco Commodity Management, Inc., formerly known as CIS
Investments, Inc., a debtor-affiliate of Refco Inc., filed for
chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No.
06-12436). (Refco Bankruptcy News, Issue No. 54; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
Plan Update
On Sept. 14, 2006, Refco, Inc., and 25 of its subsidiaries, along
with Marc S. Kirschner, the Chapter 11 Trustee for the estate of
Refco Capital Markets, Ltd., delivered a Chapter 11 plan of
reorganization and accompanying Disclosure Statement to the Court.
On Oct. 10, 2006, the Debtors filed an Amended Plan and Disclosure
Statement and on Oct. 13, filed a Modified Amended Disclosure
Statement. On Oct. 16, 2006, the Court gave its tentative
approval on the Disclosure Statement and the Court Clerk entered
an order on Oct. 20, 2006.
On Dec. 15, the Modified Joint Chapter 11 Plan of Refco Inc. and
certain of its direct and indirect subsidiaries, including Refco
Capital Markets, Ltd., and Refco F/X Associates LLC, was confirmed
by the Court. That Plan became effective on Dec. 26, 2007.
RIGEL CORP: Chapter 7 Trustee Hires Cavanagh as Special Counsel
---------------------------------------------------------------
Anthony H. Mason, the duly appointed Chapter 7 Trustee for Rigel
Corp., obtained authority from the U.S. Bankruptcy Court for the
District of Arizona to employ The Cavanagh Law Firm, P.A., as his
special counsel.
The Trustee discloses that Jeffrey B. Smith, Esq., and Peter
Guild, Esq., both of Cavanagh, will be the lead attorneys for this
engagement.
The Trustee tells the Court that the firm will assist him in
litigation pending before the Arizona Tax Court, captioned Rigel
Corporation v. State of Arizona, et. al., Case No. TX 2006-050010,
concerning tax refund claims.
Cavanagh's Fee
Subject to approval of the Court, Cavanagh will be paid on a
contingency fee basis.
The contingency fee will be computed on a sliding scale from 14%
to 18% as:
* The base contingency fee for any recovery on the Refund
Claims will be 14% of the gross recovery before expenses.
* If an appeal to the Arizona Court of Appeals is filed by
either party to the Tax Court Litigation, the contingency
fee will be 16% of the gross recovery before expenses.
* If a petition for review is filed in the Arizona Supreme
Court by either party to the Tax Court Litigation, the
Contingency fee will be 18% of the gross recovery before
expenses.
The fee arrangement pertains to all recoveries of the Debtor from
the pending tax court litigation, and all recoveries for all time
periods thereafter through the filing of the petition.
In addition to the Refund Claims, the Tax Court Litigation also
includes deficiency assessments for Arizona use and business taxes
asserted by the Arizona Department of Revenue to be owing by Rigel
for the audit period covering Aug. 1, 1999 through Sept. 30, 2001.
The Trustee and Cavanagh agree that Cavanagh's representation
concerning the Deficiency Assessments will not be on a contingency
fee basis. Cavanagh will bill for the services of Messrs. Guild
and Smith at the rate of $275 per hour each. All other Cavanagh
service providers also shall bill at their normal hourly rates.
The number of hours of service rendered with respect to the
Deficiency Assessments portion of the Tax Court Litigation will be
deemed to be equal to 10% of the total time expended by each of
Cavanagh's service providers on the overall Tax Court Litigation;
provided, however, that under no circumstances will the fee
attributable to the Deficiency Assessments to be paid to Cavanagh
exceed 36% of the gross savings (principal taxes and interest)
generated.
Cavanagh will also be reimbursed for any costs and expenses paid
during the course of the Tax Court Litigation. If Cavanagh does
not recover any refunds for the estate, the estate will still be
responsible for payment of Cavanagh's costs. Cavanagh agrees that
it will not seek reimbursement of any costs and expenses in excess
of the aggregate amount of $10,000 unless the Trustee authorized
such expenses in writing before they were incurred.
To the extent legal fees are recovered in connection with the
pursuit of the tax Court Litigation, 100% of such recoveries will
be paid to the estate and will not impact the contingency fee
agreement. Cavanagh also will not participate in costs recovered
except to the extent that it advanced such costs and has not been
reimbursed for such amounts as of such recovery.
To the best of the Trustee's knowledge, the firm does not hold or
represent any interest adverse to the Debtor, its creditors, or
its estate.
About Rigel Corp
Headquartered in Tempe, Arizona, Rigel Corporation, is a Krispy
Kreme franchisee. The Company also operates Godfather's Pizza,
KFC, and Bruegger's Bagels' franchises. The Company filed for
chapter 11 protection on Aug. 9, 2006 (Bankr. D. Ariz. Case No.
06-02480). Michael W. Carmel, Esq., at Michael W. Carmel, Ltd.,
represents the Debtor. When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
and $50 million.
The Court converted the Debtor's chapter 11 case to a chapter 7
proceeding on Aug. 15, 2006. Anthony H. Mason is the Chapter 7
Trustee. Thomas H. Allen, Esq., and Kevin C. McCoy, Esq., at
Allen & Sala, P.L.C., represent the Chapter 7 Trustee.
RIGEL CORP: Trustee Gets Court OK to Hire KPMG as Tax Accountant
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona approved the
application of Anthony H. Mason, the chapter 7 trustee appointed
in Rigel Corporation's bankruptcy case, to employ KPMG LLP as his
tax accountant.
KPMG is the United States member firm of KPMG LLP International, a
Swiss cooperative.
The Trustee needs the firm's services in pursuing refunds from the
State of Arizona relating to sales and use taxes.
The tax refund dispute is pending before the Arizona Tax Court,
captioned Rigel Corporation v. State of Arizona, et. al., Case
No. TX 2006-050010.
KPMG agreed to perform its services on a contingency fee basis,
which fee will be computed on a sliding scale from 22% to 18% as
follows:
-- The base contingency fee for any recovery on the Refund
Claims will be 22% of the gross recovery before expenses;
-- If an appeal to the Arizona Court of Appeals is filed by
either party to the Tax Court Litigation, the contingency
fee will be 20% of the gross recovery before expenses; or
-- If a petition for review is filed in the Arizona Supreme
Court by either party to the Tax Court Litigation, the
contingency fee will be 18% of the gross recovery before
expenses.
KPMG has been performing specialized tax services for the Debtor
since 2002. To the best of the Trustee's knowledge, KPMG does not
hold or represent an interest adverse to the estate and its
creditors.
Headquartered in Tempe, Arizona, Rigel Corporation is a Krispy
Kreme franchisee. The Company also operates Godfather's Pizza,
KFC, and Bruegger's Bagels' franchises. The Company filed for
chapter 11 protection on Aug. 9, 2006 (Bankr. D. Ariz. Case
No. 06-02480). Michael W. Carmel, Esq., at Michael W. Carmel,
Ltd. represented the Debtor. When the Debtor filed for protection
from its creditors, it estimated assets and debts between
$10 million and $50 million.
The Court converted the Debtor's chapter 11 case to a chapter 7
proceeding on Aug. 15, 2006. Anthony H. Mason is the Chapter 7
Trustee. He is represented in this case by Thomas H. Allen, Esq.
and Kevin C. McCoy, Esq., at Allen & Sala, P.L.C.
SAID VEDAD: Case Summary & 3 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Said Vedad
515 East 72nd Street
New York, NY 10021
Bankruptcy Case No.: 07-10075
Type of Business: The Debtor owns a restaurant.
Chapter 11 Petition Date: January 12, 2007
Court: Southern District of New York (Manhattan)
Judge: Robert D. Drain
Debtor's Counsel: Randy M. Kornfeld, Esq.
Stavis & Kornfeld, LLP
260 Madison Avenue, 22nd Floor
New York, NY 10016
Tel: (212) 557-6767
Fax: (212) 557-3760
Estimated Assets: $100,000 to $1 Million
Estimated Debts: $1 Million to $100 Million
Debtor's 3 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
NYS Dept. of Tax & Finance Sales Tax $1,581,207
W. A. Earriman State Campus
Albany, NY 12227
Internal Revenue Service $248,485
Holtsville, NY 00501
DiCarlo Distributors, Inc. $223,102
SCOTT'S MIRACLE: Moody's Lowers Corporate Family Rating to Ba2
--------------------------------------------------------------
Moody's Investors Service downgraded the long-term debt ratings of
Scott's Miracle Gro Company, including the company's corporate
family rating to Ba2 from Ba1.
This rating action reflects the negative impact on the company's
financial profile after the company's recently launched leveraged
recapitalization expected to close by the end of February 2007.
This recapitalization includes returning $750 million to its
shareholders through share repurchases of up to $250 million via a
Dutch auction tender offer and a special one-time cash dividend
for the balance, not to be less than $500 million.
Scott's plans to finance these shareholder initiatives with a new
$2.1 - $2.3 billion secured revolving credit and term loan
facility. In addition to refinancing the current bank facilities,
Scott's will use the remaining proceeds to launch a tender offer
for its $200 million 6-5/8% senior subordinated notes. Upon the
successful completion of the tender, Moody's will withdraw its
ratings on the senior subordinated notes. Moody's also affirmed
the company's SGL-2 speculative grade liquidity assessment. The
rating outlook is stable. This concludes a review for possible
downgrade initiated on
Dec. 14, 2006.
Scott's Ba2 corporate family rating and stable outlook continue to
benefit from the company's dominant market position, efficient
operational platform, strong customer relationships and commitment
to brand support and product development. However, the ratings
are constrained by the company's weak free cash flow due to its
increased working capital and ongoing capital expenditure
requirements, the potential for earnings and cash flow volatility
due to the company's high seasonality, its exposure to volatile
raw materials prices, and its highly concentrated customer base.
In addition, Scott's more aggressive financial policies including
paying out its financial cushion via its recently announced
leveraged dividend and share repurchase have resulted in
substantially increased leverage and weakened credit metrics.
Accordingly, Average Debt to EBITDA is expected to be 4.3x.
"This reduction in financial flexibility comes at a time when the
company is actively growing its core operations while working to
restore growth to its difficult European operation and
Smith & Hawken business," says Moody's Vice President Janice
Hofferber.
Nevertheless, Moody's recognizes the long-term favorable growth
trends for lawn and garden products driven by favorable
demographic and economic trends, and anticipates the company will
achieve debt reduction by applying free cash flow to debt
reduction.
Ratings affirmed:
-- Specualtive Grade Liquidity, SGL-2
Ratings downgraded:
-- Corporate family rating to Ba2 from Ba1;
-- Probability of default rating to Ba2 from Ba1; and,
-- $200 million senior subordinated notes to B1, LGD6, 93%
from Ba2, LGD6, 93%.
Outlook is stable.
The Scotts Miracle-Gro Company, with headquarters in Marysville,
Ohio, is a leading manufacturer and marketer of consumer lawn care
and garden products, primarily in North America and in Europe.
The company also operates the Scotts Lawn Service business which
provides lawn and tree and shrub fertilization, insect control and
other related services in the United States. Scotts sells
professional products to commercial nurseries, greenhouses,
landscape service providers and specialty crop growers in North
America and internationally. Sales for the fiscal year ended
September 2006 were $2.7 billion.
SHAW COMMUNICATIONS: Acquires Mascon's B.C. Cable Operations
------------------------------------------------------------
Shaw Communications has entered an agreement with Mascon
Communications and its affiliates to acquire the cable systems in
Winfield, Lumby, Pender Island, Mayne Island, Galiano Island and
Lillooet, British Columbia.
"We are delighted with the acquisition of these B.C. cable
systems", said Peter Bissonnette, President of Shaw
Communications, "these cable systems compliment our existing cable
properties in and around Kelowna and the Gulf Islands."
"We are proud of the cable operations we have developed in
Winfield, Lillooet and the Gulf Islands," said Ian Mackay who
founded Mascon Communications and operated its cable systems over
the past 20 years. "Shaw's purchase of these cable operations is
a great deal for our customers who will enjoy an enhanced offering
of entertainment and Internet services, and in some cases, digital
phone services, through Shaw."
Shaw Communications Inc. (TSX: SJR.B) (NYSE: SJR)
-- http://www.shaw.ca/-- is a diversified Canadian communications
company whose core business is providing broadband cable
television, Internet, Digital Phone, telecommunications services
(through Big Pipe Inc.) and satellite direct-to-home services
(through Star Choice Communications Inc.) to approximately
3 million customers. Shaw is a member of the S&P/TSX 60 index.
* * *
As reported in the Troubled Company Reporter on Nov. 15, 2006,
Dominion Bond Rating Service confirmed the long-term rating of
Shaw Communications Inc.'s Senior Notes at BB (high) Positive and
maintained the Positive trend at this time. While DBRS continues
to recognize Shaw's sustained EBITDA growth, DBRS is concerned
with Shaw's focus on principally returning all or the majority of
its free cash flow to shareholders with ongoing share repurchases
and its increased dividend for F2007.
Moody's Investors Service rates Shaw Communications Inc.'s CDN$300
million senior unsecured debenture at Ba2. The outlook is stable.
The CDN$300 million senior unsecured notes due 2016 also carry
Standard & Poor's Ratings Services BB+ rating. S&P has also
affirmed the Company's 'BB+' long-term corporate credit rating.
The outlook is stable.
SHAW COMMS: Board Declares Dividends on Class A and B Shares
------------------------------------------------------------
Shaw Communications Inc.'s board of directors has declared monthly
dividends of $0.0829166667 per Class A Participating Share and
$0.0833333333 per Class B Non-Voting Participating Share, payable
on each of March 30, 2007, April 30, 2007 and May 31, 2007 to all
holders of record at the close of business March 15, 2007, April
15, 2007 and May 15, 2007, respectively.
The company's Board of Directors reviews the applicable dividend
rates on a quarterly basis.
Shaw Communications Inc. (TSX: SJR.B) (NYSE: SJR)
-- http://www.shaw.ca/-- is a diversified Canadian communications
company whose core business is providing broadband cable
television, Internet, Digital Phone, telecommunications services
(through Big Pipe Inc.) and satellite direct-to-home services
(through Star Choice Communications Inc.) to approximately
3 million customers. Shaw is a member of the S&P/TSX 60 index.
* * *
Moody's Investors Service rates Shaw Communications Inc.'s CDN$300
million senior unsecured debenture at Ba2. The outlook is stable.
The CDN$300 million senior unsecured notes due 2016 also carry
Standard & Poor's Ratings Services BB+ rating. S&P has also
affirmed the Company's 'BB+' long-term corporate credit rating.
The outlook is stable.
As reported in the Troubled Company Reporter on Nov. 15, 2006,
Dominion Bond Rating Service confirmed the long-term rating of
Shaw Communications Inc.'s Senior Notes at BB (high) Positive and
maintained the Positive trend at this time.
SHAW COMMS: Earns CDN$84.1 Million in Quarter Ended November 30
---------------------------------------------------------------
Shaw Communications Inc. reported CDN81.1 million of net income
for the first quarter ended Nov. 30, 2006 compared to net income
of CDN75.7 million for the same quarter last year. Excluding
certain non-operating items, net income for the three-month period
ended Nov. 30, 2006 would have been CDN$81 million this quarter
compared to net income of CDN$38.8 million in the comparable
period.
The company disclosed Consolidated service revenue of CDN$671
million for the three-month period ended Nov. 30, 2006, a 13.8%
over the comparable quarter. Total service operating income
before amortization of CDN$299.8 million improved by 17.4%. Funds
flow from operations increased to CDN$243.9 million for the
quarter compared to CDN$197.2 million.
Commenting on the results, Jim Shaw, Chief Executive Officer,
noted: "We are off to a solid start in fiscal 2007. Both
divisions reported strong revenue growth and improved service
operating income before amortization over last year. We continued
the roll out of Digital Phone with the service now available to
approximately 2.3 million homes, representing approximately 70% of
homes passed. We provide a facilities-based, competitive
alternative to the traditional phone companies and offer the
services and value our customers are looking for."
The company posted customer gains in the quarter across all
products. Digital Phone lines increased 38,197 to 250,904 as of
Nov. 30, 2006. Internet and Digital subscribers increased by
35,877 to 1,348,639 and 25,331 to 696,887, respectively. Basic
subscribers were up 12,664 to 2,213,457 and DTH customers
increased 2,426 to 871,634.
Free cash flow for the quarter was CDN$76.1 million compared to
CDN$32.1 million for the same period last year. The growth in
free cash flow was primarily related to the increase in service
operating income before amortization.
"Shaw's continued customer growth and improved financial
performance results from our focus on the customer, the commitment
of our team, the capabilities of our network, and the strength of
our product offering. The performance to date sets us on a clear
path to meet Shaw's fiscal 2007 free cash flow guidance of CDN$300
- CDN$320 million as announced in October." said Mr. Shaw.
Cable service revenue for the quarter of CDN$499.2 million was up
15.8% over the same period last year primarily as a result of
customer growth and rate increases. Service operating income
before amortization for the three month period increased 14.6%
over the same quarter to CDN$237.8 million driven by the growth in
revenue.
Satellite division quarterly service revenue of CDN$171.8 million
improved 8.4% over the same period last year primarily due to rate
increases and customer growth. Service operating income before
amortization for the quarter increased by 29.7% to CDN$62 million.
The improvement was largely due to growth in DTH revenues.
In closing, Mr. Shaw summarized: "Throughout the remainder of this
year we will continue to focus on our key priorities of customer
service, the further expansion of the Digital Phone foot print,
strengthening our video offering with new programming and HDTV
services, and bundling strategies. We also plan to launch a
business voice service. Our customer focus continues to
differentiate us, strengthen our financial position, and build
value for all shareholders."
Shaw Communications Inc. (TSX: SJR.B) (NYSE: SJR)
-- http://www.shaw.ca/-- is a diversified Canadian communications
company whose core business is providing broadband cable
television, Internet, Digital Phone, telecommunications services
(through Big Pipe Inc.) and satellite direct-to-home services
(through Star Choice Communications Inc.) to approximately
3 million customers. Shaw is a member of the S&P/TSX 60 index.
* * *
As reported in the Troubled Company Reporter on Nov. 15, 2006,
Dominion Bond Rating Service confirmed the long-term rating of
Shaw Communications Inc.'s Senior Notes at BB (high) Positive and
maintained the Positive trend at this time. While DBRS continues
to recognize Shaw's sustained EBITDA growth, DBRS is concerned
with Shaw's focus on principally returning all or the majority of
its free cash flow to shareholders with ongoing share repurchases
and its increased dividend for F2007.
Moody's Investors Service rates Shaw Communications Inc.'s CDN$300
million senior unsecured debenture at Ba2. The outlook is stable.
The CDN$300 million senior unsecured notes due 2016 also carry
Standard & Poor's Ratings Services BB+ rating. S&P has also
affirmed the Company's 'BB+' long-term corporate credit rating.
The outlook is stable.
SMART MODULAR: Amends Loan Agreement with Wells Fargo Foothill
--------------------------------------------------------------
Smart Modular Technologies (WWH) Inc. amended the amended and
restated loan and security agreement with the company as obligor,
SMART Modular Technologies, Inc., SMART Modular Technologies
(Europe) Limited, and SMART Modular Technologies (Puerto Rico)
Inc., as borrowers, the other obligor parties named therein and
Wells Fargo Foothill, Inc., as lender, arranger, administrative
agent and security trustee.
Pursuant to the amendment, the definition of "Change in Control"
was changed so that it will be a Change in Control under the Loan
Agreement if certain existing shareholders cease to be the
beneficial owner of less than 30% of the company's voting power.
Prior to the amendment, the threshold had been 35%.
A full text-copy of the First Amendment to Amended and Restated
Loan and Security Agreement with Wells Fargo Foothill, Inc. may be
viewed at no charge at http://ResearchArchives.com/t/s?1885
Smart Modular Technologies (WWH) Inc. (Nasdaq: SMOD)
-- http://www.smartm.com/-- designs, manufactures and supplies
electronic subsystems to original equipment manufacturers (OEMs).
Smart offers more than 500 standard and custom products to OEMs
engaged in the computer, industrial, networking, gaming,
telecommunications, and embedded application markets.
Solectron Corp. owned SMART Modular between 1999 and 2004. The
business was later spun out of Solectron in April 2004 to private
equity investors and management.
* * *
Moody's Investors Service assigned a B2 rating to SMART Modular
Technologies (WWH) Inc.'s $125 million senior secured second lien
notes due 2012 issued under Rule 144A.
Standard & Poor's Ratings Services assigned its B+ corporate
credit rating to Fremont, California-based SMART Modular
Technologies (WWH) Inc.
SONIC CORP: Moody's Withdraws Low-B Corporate Ratings
-----------------------------------------------------
Moody's Investors Service withdrew its corporate ratings and
outlook on Sonic Corp. after the completion of its securitized
debt financing in December.
The company refinanced its secured bank facility, consisting of a
term loan and revolver, through a securitization of Franchise and
Partner Drive-In royalties and Partner Drive-In rental streams. As
a result, Sonic no longer has corporate debt ratings with the
rating agency.
Ratings withdrawn:
-- Ba3 corporate family rating;
-- B1 probability of default rating, LGD3-35% loss given
default assessment;
-- Ba3, LGD3, 34% on the $675 million senior secured term loan
maturing in 2013;
-- Ba3, LGD3, 34% on the $150 million senior secured revolver
maturing in 2011; and,
-- SGL-2 Speculative Grade Liquidity rating.
Sonic Corp., headquartered in Oklahoma City, Oklahoma, operates
and franchises the largest chain of drive-in restaurants in the
United States. As of Nov. 30, 2006, the company owned, operated
and franchised over 3,200 restaurants in 33 states and Mexico with
significant presence in the Southern and Midwestern United States.
Revenues for fiscal 2006 totaled approximately
$693 million.
SPECIALTY FILAMENTS: Mulls Chapter 7 Bankruptcy Filing
------------------------------------------------------
Specialty Filaments, Inc. intends to file for bankruptcy
protection under Chapter 7 of the Federal Bankruptcy Code, in the
U. S. Bankruptcy Court for the District of Vermont.
The Board of Directors and senior management of Specialty
Filaments, Inc. were in discussions over the weekend and the last
few business days with the company's senior lender regarding the
lender's demand that the company turn over its assets pursuant to
its secured loan agreements with the lender. In light of the
bank's actions, and after reviewing all of the alternatives, the
company determined that a filing of a Chapter 7 bankruptcy
petition is in the best interests of the company and its various
constituents. The company regrets this action and appreciates the
hard work and support the employees and community have
historically given to the company.
All of the company's facilities, at 3046 Case Street and 183
Industrial Avenue in Middlebury and 125 College Street in
Burlington, in Vermont, have been permanently closed, and all
employees have been terminated, effective as of Jan. 5, 2007.
"We are saddened and disappointed to have to take this necessary
step," said D. James Marler, President and CEO of SFI. "Despite
our hard working employees and high quality products, we simply
were not able to continue to operate the business. We want to
thank our employees, the town of Middlebury and the State of
Vermont for all they have done to support us over the years."
A court-appointed trustee will manage the liquidation of the
company. Employees will be eligible for unemployment benefits
from the state of Vermont and may be eligible to participate in
certain Federal programs. The company, having consulted with its
counsel, also believes that pension benefits will be unaffected by
this filing, although the responsibility for payment will transfer
to the Pension Benefit Guaranty Corporation, a governmental
agency.
About Specialty Filaments
Headquartered in Burlington, Vermont, Specialty Filament Inc. --
http://www.specialtyfilaments.com/-- manufactures synthetic
monofilaments, including a full line of specialty highly-
engineered filaments serving the Abrasive, Toothbrush, Cosmetic,
Industrial, Paint, Construction and Janitorial/Sanitation markets.
STANDARD MGT: Posts $10.8 Mill. Net Loss in Quarter Ended Sept. 30
------------------------------------------------------------------
Standard Management Corp. reported a $10.8 million net loss on
$4.9 million of revenues for the third quarter ended Sept. 30,
2006, compared with a $3.8 million net loss on $5.5 million of
revenues for the same period in 2005.
Sales for the third quarter of 2006 decreased $578,000 or 10.6% to
$4.9 million compared to the third quarter of 2005, primarily due
to a decline in revenue of $1.9 million or 77% in the company's
base of business existing prior to the 2005 business acquisitions
(due to the loss of a major customer) offsetting the $1.3 million
increase in sales from the company's third quarter 2005 business
acquisitions.
The increase in net loss is mainly due to the $273,000 decrease in
gross profit, a $950,000 goodwill impairment charge, the $727,000
increase in interest expense and the $4.8 million increase in net
loss from discontinued operations, partly offset by the $475,000
decrease in selling, general and administrative expenses.
Gross profit for the third quarter of 2006 decreased by $273,000
or 21% to $1 million compared to the third quarter of 2005,
primarily due to a $600,000 decrease of gross profit from the
company's base of business existing prior to the 2005 business
acquisitions, primarily at the company's Apothecary Solutions
operations, partially offset by a $300,000 increase from the
company's third quarter 2005 business acquisitions.
Interest expense for the third quarter of 2006 increased primarily
due to financing fees related to short-term senior notes issued
and settled during the third quarter of 2006. Additional interest
expense from new debt issuances during the 2006 quarter were
offset by lower interest expense related to fewer outstanding
subordinated debentures as a result of the Trust Preferred
Securities exchange in June 2006.
Net loss from discontinued operations for the third quarter of
2006 was $5 million compared to a net gain of $239,000 for the
third quarter of 2005. Included in the 2006 results is a $300,000
loss related to the settlement of the purchase price adjustment
dispute with Capital Assurance in regards to the June 2005 sale of
Standard Life and $4.7 million of losses related to Rainier,
Holland and PCA, including related impairment charges. The 2005
balance includes only the operating results of Rainier, Holland
and PCA since their third quarter 2005 acquisition dates.
At Sept. 30, 2006, the company's balance sheet showed
$24.2 million in total assets and $34.4 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 $5.9 million in total current assets
available to pay $10 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?1884
Going Concern Doubt
As reported in the Troubled Company Reporter on May 19, 2006, BDO
Seidman, LLP, expressed substantial doubt about Standard
Management Corporation's ability to continue as a going concern
after auditing the company's financial statements for the year
ended Dec. 31, 2005. The auditing firm pointed to the company's
recurring losses from operations and likely lack of adequate
financing to meet all of its near-term operating needs.
* * *
Headquartered in Indianapolis, Indiana, Standard Management
Corporation -- http://www.sman.com/-- is a holding company that,
through its operating subsidiaries, provides pharmaceutical
products and services to the healthcare industry. The company
focuses on providing pharmaceuticals to long-term care and
infusion therapy patients. Through its regional pharmacies, the
company offers custom packaging for all long-term care facilities
in addition to creating solutions for specialized healthcare
facilities in a growing number of regions of the United States.
SUNSTATE EQUIPMENT: S&P Lifts Corp. Credit Rating to B+ from B
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on equipment
rental company Sunstate Equipment Co. LLC, including its corporate
credit rating to 'B+' from 'B'.
The outlook is stable.
"The upgrade results from the improved operating performance and
credit profile Sunstate has demonstrated, as well as currently
favorable conditions in the industry," said Standard & Poor's
credit analyst Anita Ogbara.
Sunstate's revenues are modest at about $210 million in 2005. This
is up 37% from relatively small revenue base in 2004, and
substantially higher compared with overall industry end markets,
which were up about 4%. EBITDA margins are 45% which are above
average for the industry. More than 90% of sales are for rental,
and there are minimal new- and used-equipment sales.
The company has benefited from favorable industry fundamentals, a
successful organic growth strategy, and financial discipline.
Operating performance is expected to continue as industry
conditions remain positive. An outlook revision to negative could
result from any departure from its disciplined financial policy or
use of aggressive growth objectives that include plans to
diversify from its concentrated base of operations.
TERWIN MORTGAGE: S&P Junks Rating on Class B-8 Certificate
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
B-8 certificate issued by Terwin Mortgage Trust 2005-13SL to 'CCC'
from 'BB-'.
At the same time, the rating on the class B-7 certificate was
lowered to 'BB-' from 'BB' and placed on CreditWatch with negative
implications. Additionally, the remaining ratings
from this transaction were affirmed.
The downgrades and negative CreditWatch placement reflect
excessive realized losses that have deteriorated available credit
support to $2,000 during recent months.
Standard & Poor's believes that due to the nature of the
collateral and the fact that issues have arisen early in the
lifetime of the deal, there is a strong likelihood that class B-8
will default and that the B-7 certificate will be downgraded again
in the coming months if this trend continues.
Credit support protection is provided by a building
overcollateralization target, subordination, a limited amount of
excess interest, and a reserve account. As of the Dec. 25, 2006,
remittance date, the transaction had realized 1.31% in cumulative
losses. While the deal is only 11 months seasoned, O/C has yet to
reach its target of 3% of the original principal balance.
Overcollateralization had built to 0.40% as of the Aug. 25, 2006,
remittance date; however, this amount has been fully depleted
since that time due to realized losses incurred by the pool. The
reserve fund currently has approximately $2,000 in available
support, while heavy losses have spiked during the past three
periods to an average of $1.9 million. This transaction
has paid down to 69.91% of its original size, while total and
serious delinquencies are 5.46% and 2.54% of the current pool
balance, respectively.
Standard & Poor's will continue to monitor the performance of this
transaction. If realized losses continue to erode credit
enhancement, Standard & Poor's will take further negative rating
action. Conversely, if O/C rebuilds to its target balance,
Standard & Poor's will affirm the rating on the class B-7
certificate and remove it from CreditWatch.
The affirmations are based on credit support percentages that are
sufficient at the current rating levels.
The collateral for this pool consists of subprime, fixed-rate,
closed-end second-lien loans and home equity line of credit loans.
Rating Lowered
Terwin Mortgage Trust 2005-13SL
Rating
------
Class To From
----- -- ----
B-8 CCC BB-
Rating Lowered And Placed On Creditwatch Negative
Terwin Mortgage Trust 2005-13SL
Rating
------
Class To From
----- -- ----
B-7 BB-/Watch Neg BB
Ratings Affirmed
Terwin Mortgage Trust 2005-13SL
Class Rating
----- ------
A-1A, A-1B, A-2, A-X, G AAA
M-1 A
B-1 A-
B-2 BBB+
B-3 BBB
B-4 BBB-
B-5, B-6 BB+
VENTAS INC: Acquiring Sunrise Senior Living REIT for CDN$2.1 Bil.
-----------------------------------------------------------------
Ventas, Inc., has reached a definitive agreement with Sunrise
Senior Living REIT to acquire its interest in 74 private pay
assisted living communities in the U.S. and Canada and the
exclusive right of first offer to acquire other newly developed
assets in Canada and portions of the U.S. for CDN$15 per unit, for
a total value including debt of CDN2.1 billion (or approximately
$1.8 billion at current exchange rates).
The 74 communities are located in metropolitan areas of 17 states
and two Canadian provinces. Ventas also expects to acquire five
communities in the U.S. and Canada that are currently under
development.
The acquired assets are high-quality new communities, almost all
of which were developed by Sunrise Senior Living, Inc. Sunrise is
the manager of all of the properties under the existing long-term
management contracts, which will remain in place, and is a
minority joint venture partner in 56 of the communities.
"This transaction will add 74 exceptional private pay assets to
our diverse high-quality portfolio and is expected to increase our
revenue from private pay assets to approximately two-thirds of our
total revenue. The acquired assets are all new assisted living
communities located in large metropolitan areas, with high
barriers to entry, and extraordinary growth prospects. We welcome
the opportunity to establish a new, important relationship with
Sunrise, the world's premier manager of senior living residences,"
Ventas Chairman, CEO and President Debra A. Cafaro said. "This
transaction will broaden our footprint in North America with entry
into the Canadian seniors housing market. With the exclusive
right of first offer on additional Sunrise-developed assets in
Canada and portions of the U.S., we believe that this transaction
will position Ventas for long-term growth and add a new dimension
to our diversification program."
"We are moving from one excellent capital partner in the Sunrise
REIT to another in Ventas," said Thomas Newell, Sunrise's
President. "We are growing rapidly because we see tremendous
growth in demand for our resident-centered senior living services.
We believe the new Ventas relationship provides a great new
partner to help us meet the needs of more seniors."
Of the 74 acquired communities, 63 are located in the U.S.,
clustered in metropolitan areas of California, Illinois, New
Jersey, Pennsylvania, New York and Colorado, and 11 are located in
the Canadian provinces of Ontario and British Columbia. Three of
those assets are currently in lease-up.
Four of the five development properties that Ventas expects to
acquire are in the U.S. and one is in Ontario. Two communities,
located in Staten Island, New York and Sandy, Utah, opened in late
2006; two communities are expected to open in early to mid-2007;
and the Ontario community, which is principally a 229-suite
independent living community, is expected to open by 2008.
In 2007, total revenue from the 74 acquired communities should
approximate $387 million, and net operating income should
approximate $132 million, using current exchange rates. Because
Sunrise is a minority joint venture partner in some of the assets,
Ventas's share of the total expected revenue and NOI is
approximately 85 percent.
The transaction is expected to be initially five to seven cents
dilutive to the Company's normalized Funds from Operations per
share in 2007, and is expected to be break even to the Company's
normalized FFO per share in 2008, in each case excluding
development properties. The Company expects the transaction to
increase Ventas's internal growth rate due to the attractiveness
of the assets coupled with the positive fundamentals in the
seniors housing market.
Benefits of the Transaction
-- Significant diversification by tenant and by asset class.
With the close of this transaction, annualized REIT
revenues from Kindred Healthcare, Inc., should represent
approximately 30 percent of Ventas's run rate total
revenue and annualized revenue from private pay assets in
the Company's portfolio should represent approximately 67
percent of the Company's run rate total revenue.
-- Upon completion of the transaction, Ventas will own over
525 assets in 43 states and two Canadian provinces.
-- The 74 acquired communities include approximately 6,000
suites and capacity for over 7,000 residents. Ventas will
acquire a 100 percent interest in 18 communities that are
wholly owned by Sunrise REIT, and between a 75 to 85
percent interest in 56 communities.
-- The average age of the portfolio is seven years, including
the 74 acquired communities and Five Development
Properties.
-- The transaction brings added geographic diversification to
the Ventas portfolio and international expansion into
Canada.
-- The acquired communities enjoy (excluding lease-up
properties) strong occupancies of 94 percent and
compelling margins, due to Sunrise's brand and
standardized operating model, the high quality of the
assets and the excellent location of the communities.
-- An initial NOI yield to Ventas of approximately 6.2
percent and excellent prospects for growth in the existing
portfolio.
-- An exclusive right of first offer to acquire additional
assets developed by Sunrise in Canada and limited right to
acquire certain Sunrise developed assets in the U.S.
-- Ventas will enjoy an important new relationship with
Sunrise, one of the world's premier providers of senior
living services. Through minority partnership interests
in 56 of the acquired communities, and an incentive
management fee structure at all the assets, Sunrise is
invested in the long-term success of the communities.
-- Ventas will enjoy true economic benefits from the
projected growth in the portfolio, through use of its
taxable REIT subsidiary.
"The Sunrise REIT communities are desired for their exceptional
care and resident-centered services, as well as outstanding
architectural and interior design. We believe these communities
will continue to be highly successful," Mr. Cafaro added.
Completion of the transaction will be subject to satisfaction of
customary closing conditions, including approval by the
unitholders of Sunrise REIT. Ventas expects the acquisition to be
completed early in the second quarter of 2007, although there can
be no assurance that the transaction will close or, if it does,
when the closing will occur.
Merrill Lynch & Co. acted as the Company's exclusive financial
advisor and delivered a fairness opinion to its Board of
Directors. Interim financing for the acquisition will be provided
by Merrill Lynch. Wachtell, Lipton, Rosen & Katz and Osler,
Hoskin & Harcourt acted as legal advisors to Ventas.
About Ventas
Headquartered in Louisville, Kentucky, Ventas, Inc. (NYSE:VTR) --
http://www.ventasreit.com/-- is a healthcare real estate
investment trust that is the nation's largest owner of seniors
housing and long-term care assets. Its portfolio of properties
located in 42 states includes independent and assisted living
facilities, skilled nursing facilities, hospitals and medical
office buildings.
* * *
As reported in the Troubled Company Reporter on Dec. 28, 2006,
Standard & Poor's Ratings Services revised its outlook on Ventas
Inc. to positive from stable. At the same time, the 'BB+'
corporate credit and senior note ratings were affirmed for Ventas,
its operating partnership, Ventas Realty L.P., and Ventas Capital
Corp. The rating actions affected roughly $1.5 billion in senior
notes.
As reported in the Troubled Company Reporter on Dec. 19, 2006,
Moody's placed a Ba2 rating on $230 million of 3-7/8% Convertible
Senior Notes issued by Ventas, Inc., the REIT holding company of
Ventas Realty Limited Partnership and Ventas Capital Corporation.
Moody's also rates Ventas, Inc.'s senior debt shelf at Ba3.
VISTEON CORP: Inks Exclusive Retail Distribution Accord With AGT
----------------------------------------------------------------
Visteon Corporation and Advanced Global Technology have entered
into an exclusive retail distribution agreement to market, sell,
and distribute electronics products.
AGT will be distributing three new HD Radio(TM) receivers: Visteon
HD Radio receivers, the Visteon HD Jump(TM); the HD EZ Connect,
and the HD Table Top Radio along with a full line of accessory
products designed to enhance the installation and reception of HD
Radio(TM).
HD Jump(TM) is the first true HD Radio(TM) plug and play receiver
of its kind. The unit delivers premium new HD2 multicast channels
and crystal-clear sound quality and can be used in a car, truck,
RV or home.
Visteon's HD Jump(TM) docks into a cradle in the vehicle and an
optional home kit allows the receiver to also be used with a home
stereo.
HD Jump offers the full spectrum of HD Radio(TM) features,
including program associated data, such as real-time song title,
artist and album information, as well as multicasting, where
available.
The clarity of HD Radio technology allows FM stations to be
enjoyed with CD quality sound and boosts AM quality up to that of
FM sound.
More than 1,000 radio stations now broadcast HD Radio(TM) signals
in the U.S., with more than 400 offering new formats on HD2
channels.
The cradle's built-in auxiliary input jack also enables users to
plug in an MP3 player and hear its contents through the vehicle's
sound system.
HD EZ Connect is a new HD Radio(TM) receiver that is designed to
easily connect to either an aftermarket or factory-installed car
audio systems to receive digital HD Radio(TM) programming.
HD Table Top Radio is a new HD Radio(TM) receiver delivering high
performance audio with a sleek design and intuitive controls. The
unit features a large backlit six-line display, alarm clock
feature and is available in a variety of colors to match any
decor.
"This agreement allows Visteon to expand its automotive product
expertise and advanced technology," Greg Gyllstrom, vice
president, Visteon North American aftermarket, said.
"The relationship between Visteon and Advanced Global Technology
is an ideal match," Advanced Global Technology president Ben
Lowinger said.
"When you pair Visteon's advanced technology leadership in the
automotive electronics space with Advanced Global Technology's
proven capabilities in the retailer sector, we expect these new
products to deliver explosive growth for HD Radio(TM) in both
awareness and sales."
The Visteon HD Jump(TM), HD EZ Connect, and HD Table Top Radio
will be available at retailers this spring.
The products can be seen at the following CES 2007 locations;
Visteon - Central Plaza (CP7), North Hall Booth 6427, Advanced
Global Technology - Central Hall Booth 9817, and HD Radio(TM) -
North Hall Booth 4616.
About HD Radio
More than 1,100 AM and FM radio stations, available to
approximately 80% of the U.S. population, are using HD Radio --
http://www.hdradio.comand http://www.ibiquity.com-- technology
to transmit digital audio and data to their listeners. Beyond
delivering dramatically improved sound quality over analog,
digital HD Radio technology allows stations to expand their
programming via HD2 multicast channels. Over 500 stations today
are using HD2 channels to broadcast fresh new music and news
formats, showcase young artists and local bands, air non-English
language programming, and more. Other HD Radio applications
include scrolling text and graphics content on receiver display
screens and delivery of real-time traffic updates.
About Advanced Global Technology
Advanced Global Technology LLC -- http://www.advancedgt.com-- is
a cutting-edge product designer. AGT globally distributes and
markets high quality and high performance XM Satellite Radio plug-
and-play receivers combined with all-encompassing technologically
advanced satellite radio accessories. In addition to its XM
Satellite Radio products, AGT provides an extended and original
line of consumer electronics that blends technology with the
lifestyles of today's consumers. AGT produces inventive and
imaginative products that integrate with automobiles, home-
stereos, home-theaters, boats, motorcycles and recreational
vehicles, and personal-wearable portables.
About Visteon Corporation
Headquartered in Van Buren Township, Mich., Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. With corporate offices in the Michigan
(U.S.); Shanghai, China; and Kerpen, Germany; the company has more
than 170 facilities in 24 countries and employs approximately
50,000 people.
At Sept. 30, 2006 the Company's balance sheet showed total assets
of $6.721 billion and total liabilities of $6.823 billionresulting
in a total shareholders' deficit of $102 miilion. Total
shareholders' deficit at Dec. 31, 2005 stood at $48 million.
* * *
As reported in the Troubled Company Reporter on Sept. 13, 2006,
Standard & Poor's Ratings Services has lowered its long-term
corporate credit rating on Visteon Corp. to 'B' from 'B+' and its
short-term rating to 'B-3' from 'B-2'. These actions stem from
the company's weaker-than-expected earnings and cash flow
generation, caused by vehicle production cuts, inefficiencies at
several plant locations, sharply lower aftermarket product sales,
continued pressure from high raw material costs, and several
unusual items that will impact 2006 results.
As reported in the Troubled Company Reporter on Nov. 24, 2006,
Moody's Investors Service has downgraded Visteon Corporation's
Corporate Family Rating to B3 from B2, changed the ratings outlook
to stable from under review for possible downgrade and affirmed
the company's liquidity rating of SGL-3.
VISTEON CORP: Sees Challenging 2007 but Improved 2008 Production
----------------------------------------------------------------
Visteon Corp. revealed last week that it expects a challenging
2007 but forecast an improvement in 2008. The company said it
will focus on its restructuring efforts and cash flow management.
The company said it expects to have lower production on platforms
it supplies to Ford Motor Corp., Renault SA, Peugeot S.A., and
Nissan Motor Co. Ltd. in North America. It expects production
increases for Ford in Europe, Hyundai Motor Co. Ltd., and Kia
Motors Corp.
Visteon also disclosed that it won $1 billion in new contracts for
products from:
-- North America:
a. General Motors Corp. for electronics, interiors, and
climate,
b. Ford Motor for electronics and climate,
c. DaimlerChrysler AG for electronics, interiors, climate,
and lighting, and
d. Other Asian Original Equipment Manufacturers for
interiors,
-- Europe:
a. Volkswagen for electronics,
b. Peugeot for interiors and electronics,
c. General Motors for interiors, and
d. Ford Motor for climate, electronics, and interiors,
-- Asia Pacific:
a. Mazda for climate,
b. Hyundai and Kia for climate and interiors,
c. General Motors for climate and interiors, and
d. Ford Motor for climate.
Liquidity
The company expects to use free cash flow in 2007 and 2008, with
positive figures in 2009. The company further says that it does
not have significant debt maturities until 2010.
At the end of 2006, it expects to have a cash balance of $1
billion, 70% of which comes from U.S. and Europe sales.
About Visteon Corporation
Headquartered in Van Buren Township, Mich., Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. With corporate offices in the Michigan
(U.S.); Shanghai, China; and Kerpen, Germany; the company has more
than 170 facilities in 24 countries and employs approximately
50,000 people.
At Sept. 30, 2006 the Company's balance sheet showed total assets
of $6.721 billion and total liabilities of $6.823 billionresulting
in a total shareholders' deficit of $102 miilion. Total
shareholders' deficit at Dec. 31, 2005 stood at $48 million.
* * *
As reported in the Troubled Company Reporter on Sept. 13, 2006,
Standard & Poor's Ratings Services has lowered its long-term
corporate credit rating on Visteon Corp. to 'B' from 'B+' and its
short-term rating to 'B-3' from 'B-2'. These actions stem from
the company's weaker-than-expected earnings and cash flow
generation, caused by vehicle production cuts, inefficiencies at
several plant locations, sharply lower aftermarket product sales,
continued pressure from high raw material costs, and several
unusual items that will impact 2006 results.
As reported in the Troubled Company Reporter on Nov. 24, 2006,
Moody's Investors Service has downgraded Visteon Corporation's
Corporate Family Rating to B3 from B2, changed the ratings outlook
to stable from under review for possible downgrade and affirmed
the company's liquidity rating of SGL-3.
VOLT INFORMATION: Earns $30.7 Million in Fiscal Year Ended Oct. 29
------------------------------------------------------------------
Volt Information Sciences Inc. filed its financial statements for
the year ended October 29, 2006, with the Securities and Exchange
Commission on Jan. 12, 2007.
For the twelve months of fiscal 2006, the company reported net
income of $30.7 million compared to net income of $17.0 million in
the comparable fiscal 2005 period, an increase of 80%. Net sales
for the twelve months of fiscal 2006 increased by 7% to
$2.3 billion, compared to $2.2 billion last year. Income before
minority interest and income taxes was $51.6 million in the fiscal
year 2006 compared to $36.3 million last year, an increase of 42%.
Fourth Quarter 2006 Results
For the fourth quarter of fiscal 2006 ended Oct. 29, 2006, the
company reported net income of $13.6 million compared to
$8.4 million in the fiscal 2005 fourth quarter, an increase of
62%. Net sales for the 2006 quarter increased by 3% to
$610.2 million, compared to $590.2 million in last year's
comparable quarter. Income before minority interest and income
taxes increased by $4.3 million, or 25%, compared to the 2005
comparable quarter. The minority interest was repurchased from
Nortel Networks Inc. on Dec. 29, 2005.
Commenting on the results for the fourth quarter and year, Mr.
Steven A. Shaw, President and CEO of Volt, stated "Staffing
Services continued to be the main force behind our improved fourth
quarter and full fiscal year results. Strong demand in our IT and
Engineering markets, tight control of workers' compensation and
unemployment costs, and solid execution of our business plan to
focus on higher margin clients and services were the primary
drivers for the improved results. In addition to our Staffing
Services segment, the Directory Services and Computer Systems
segments continue to be major contributors to the bottom line. We
are pleased with both our results and corporate initiatives and
are confident that our capable employees and broad array of
workforce, technology, and telecommunications solutions will
provide us with the opportunity and ability to continue to grow
our company."
The $34.7 million, or 7%, increase in staffing service sales in
the fourth quarter of fiscal 2006 was due to a 12% increase in the
Technical Placement division partially offset by a 1% decrease in
the Administrative and Industrial division.
The Computer Systems segment's sales increase of $3 million, or
7%, in the fourth quarter of fiscal 2006 was primarily due to
increases of $5.5 million in new business as a result of the
segment's acquisition of Varetis Solutions in December 2005 and an
increase in the Maintech division's IT maintenance sales of
$900,000 partially offset by decreases in the segment's other
divisions.
The Telephone Directory segment's sales decrease of $400,000, or
2%, for the fourth quarter of fiscal 2006 from the comparable 2005
period resulted from decreases of $600,000, or 3%, in publishing
sales due to the timing of delivery of telephone directories.
The Telecommunications Services segment's sales decrease of
$16.1 million, or 36%, in the fourth quarter of fiscal 2006 was
due to decreases of $14.5 million in the Construction and
Engineering division and $1.6 million in the Network Enterprise
Solutions division.
Cash and Cash Equivalents
Cash and cash equivalents, excluding restricted cash, was
$38.5 million at the end of the year. At Oct. 29, 2006, the
company had sold a participating interest in accounts receivable
of
$110 million under its securitization program and had the ability
to finance an additional $90 million under the facility.
In addition, the company may borrow under a $40 million revolving
secured credit facility. The facility requires the maintenance of
certain accounts receivable balances in excess of borrowings and
terminates in April 2008 unless extended.
Effective Dec. 19, 2006, the company's wholly owned subsidiary,
Volt Delta Resources entered into a stand-alone three year
$70 million secured, syndicated, revolving credit agreement with
Wells Fargo,N.A. as the administrative agent and arranger, and as
a lender thereunder. Wells Fargo and the other three lenders
under the Delta Credit Facility, Lloyd TSB Bank Plc, Bank of
America, N.A and JPMorgan Chase also participate in the company's
$40 million revolving credit facility.
About Volt Information
Volt Information Sciences Inc. (NYSE: VOL) -- http://www.volt.com/
-- provides national Staffing Services and Telecommunications and
Information Solutions to Fortune 100 customers. Operating through
a network of over 300 Volt Services Group branch offices, the
Staffing Services segment fulfills IT and other technical,
commercial and industrial placement requirements of its customers,
on both a temporary and permanent basis. The Telecommunications
and Information Solutions businesses, which include the
Telecommunications Services, Computer Systems and Telephone
Directory segments, provide complete telephone directory
production and directory publishing; a full spectrum of
telecommunications construction, installation and engineering
services; and advanced information and operator services systems
for telephone companies.
* * *
As reported in the Troubled Company Reporter on July 4, 2006 Fitch
Ratings upgraded Volt Information Sciences' Issuer Default Rating
to 'BB' from 'BB-', and has affirmed its senior secured rating at
'BBB-'. The Rating Outlook is Stable.
VWE GROUP: District Judge Says Malpractice Suit Not "Core" Process
------------------------------------------------------------------
The Honorable Colleen McMahon of the U.S. District Court for the
Southern District of New York withdrew last week the Official
Committee of Unsecured Creditors of The VWE Group Inc.'s
malpractice suit against 10 former partners of defunct New York
law firm Hall Dickler from the Bankruptcy Court, Anthony Lin of
the New York Law Journal reports.
Judge McMahon said the grounds for the malpractice claim were not
"core" proceeding under chapter 11.
The Committee had sought to continue the suit before the Honorable
Adlai S. Hardin of the U.S. Bankruptcy Court for the Southern
District of New York, Mr. Lin added.
The Committee said VWE's earlier chapter 11 filing would have
preserved money for the estate. Instead, Hall Dickler's lawyers
represented VWE on transactions regarding the 2003 sale of the
company's greeting card business to Taylor Corp. for $8 million.
According to Mr. Lin, the lawyers also advised VWE to grant a lien
to Taylor to cover a previous debt. It turned out that VWE paid
over half of the sale proceeds back to Taylor to pay the debt and
clear the lien.
The Committee said an earlier bankruptcy filing would have
preserved the money in the estate.
Mr. Lin did not enumerate the 10 former partners.
Sheldon Hirshon, Esq., at Proskauer Rose represents the Creditors'
Committee.
John R. Sachs, Esq., at Epstein, Becker & Green represents Hall
Dickler's former partners.
Yonkers, N.Y.-based The VWE Group Inc. was a istributor of
corporate greeting cards and human resources forms. The company
filed for chapter 11 protection on June 2, 2004 (Bankr. S.D.N.Y.
Case No. 04-20308. Joseph O'Neil, Jr., Esq., at Reed Smith LLP
represents the Debtor.
W.R. GRACE: Hires Ogilvy Renault as Canadian Special Counsel
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted
authority to W.R. Grace & Co. and its debtor affiliates to employ
Ogilvy Renault LLP as their special counsel to perform legal
services primarily relating to pending asbestos property damage
and personal injury claims identified as having been brought by
certain Canadian claimants.
Since 2001, Ogilvy Renault and its partners and associates have
worked with U.S. legal counsel to the Debtors in connection with,
inter alia, formulating strategy in respect of asbestos claims
against the Debtors and their affiliated entity, Grace Canada,
Inc.
The Debtors believe that Ogilvy Renault is intimately familiar
with many of the complex legal issues that arise in connection
with the ongoing issues related to their Chapter 11 cases because
of the firm's extensive experience and expertise in bankruptcy and
insolvency, personal injury, and class action proceedings in
Canada.
Specifically, Ogilvy Renault will:
(a) advise and assist the Debtors and their U.S. legal
counsel with respect to research, preparation of
materials for court, and Canadian expert-related issues;
and
(b) perform other related services as the Debtors and their
U.S. counsel may deem necessary or desirable.
While it is possible that certain aspects of the representations
will necessarily involve both Ogilvy and the Debtors' bankruptcy
and reorganization counsel, the Debtors assure the Court that
Ogilvy's services will be unique and specialized rather than
duplicative of the services to be performed by their bankruptcy
and reorganization counsel.
Ogilvy's, subject to periodic adjustments, will bill:
Professional Position Hourly Rate
------------ -------- -----------
Derrick C. Tay, Esq. Senior Partner $850
Ian Ness Partner 635
Karen Galpern Partner 575
Orestes Pasparakis, Esq. Partner 535
Teresa Walsh, Esq. Partner 490
Jennifer Stam, Esq. Lawyer 400
Allison Kuntz, Esq. Lawyer 270
Karen Whibley Law Clerk 210
Penny Adams Law clerk 140
Katie Legree Law clerk 95
Articling Student 160
Other counsel or law clerks may from time to time serve the
Debtors in the matters for which Ogilvy's employment is sought.
The Debtors will also pay Ogilvy for expenses incurred in
connection with the case.
Teresa J. Walsh, Esq., a partner at Ogilvy, assures the Court that
the firm does not represent or hold any interest adverse to the
Debtors or their estates with respect to the matters for which it
is to be employed.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally. The Company and its
debtor-affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. D. Del. Case No. 01-01139). James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts. The Debtors hired
Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors. The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice. David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA. Anderson Kill & Olick, P.C.,
represent the Official Committee of Asbestos Personal Injury
Claimants. The Asbestos Committee of Property Damage Claimants
tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C.
Alan Runyan, Esq., at Speights & Runyan,to represent it. Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders. (W.R. Grace Bankruptcy
News, Issue No. 119; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
W.R. GRACE: Reaches Settlement Pacts with AIG and Zurich Insurance
------------------------------------------------------------------
W.R. Grace & Co. and its debtor affiliates, authorized pursuant to
Court-approved procedures to settle certain claims and causes of
action brought by or against the Debtors in a judicial,
administrative, arbitral or other proceeding, advise the Honorable
Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District
of Delaware that they have reached separate settlement agreements
with:
(a) American International Group; the Office of the Attorney
General of the State of New York; and the Superintendent
of Insurance of the State of New York; and
(b) Zurich American Insurance Company; Zurich Holding Company
of America, Inc.; the attorneys general of New York,
Connecticut and Illinois; and the Superintendent of
Insurance for the State of New York,
to release potential claims that the Debtors may have against AIG
or Zurich for the Insurers' participation in schemes to steer
business and rig bids for excess casualty insurance through Marsh
& McLennan Companies, Inc. or Marsh, Inc.
James E. O'Neill, Esq., at Pachulski Stang Ziehl Young Jones &
Weintraub LLP, in Wilmington, Delaware, relates that the Debtors
will receive $624,805 from a $375,000,000 settlement fund AIG
established pursuant to (i) a settlement agreement between AIG and
the NY Attorney General and (ii) a stipulation with the NY
Insurance Department.
The Debtors will receive $200,258 from an $88,000,000 settlement
fund Zurich established pursuant to:
-- Zurich's agreement with the attorneys general of New York,
Connecticut and Illinois; and
-- a separate agreement between Zurich and the Insurance
Superintendent.
The U.S. Government has conducted investigations regarding the
marketing, sale, renewal and placement or servicing of insurance;
bid rigging; and broker compensation practices. AIG and Zurich
have cooperated in those investigations.
Grace is among AIG and Zurich policyholders who purchased or
renewed excess casualty insurance policies through Marsh from
Jan. 1, 2000, to Sept. 30, 2004.
AIG and Zurich will make settlement payments by Feb. 28, 2007.
The Release does not include claims based on the purchase or sale
of AIG securities, and AIG's Life Insurance Operations. The
Release also does not preclude policyholders, like Grace, from
seeking relief against other entities or individuals.
The Debtors believe that both claim settlements are fair and
reasonable because they prohibit the costs to investigate and
litigate the Debtors' claims independently.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally. The Company and its
debtor-affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. D. Del. Case No. 01-01139). James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts. The Debtors hired
Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors. The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice. David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA. Anderson Kill & Olick, P.C.,
represent the Official Committee of Asbestos Personal Injury
Claimants. The Asbestos Committee of Property Damage Claimants
tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C.
Alan Runyan, Esq., at Speights & Runyan,to represent it. Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders. (W.R. Grace Bankruptcy
News, Issue No. 119; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Accorda Therapeut. ACOR (8) 40 5
AFC Enterprises AFCE (40) 157 4
Affymax Inc. AFFY (114) 61 53
Alaska Comm Sys ALSK (25) 566 26
Alliance Imaging AIQ (18) 674 30
AMR Corp. AMR (514) 30,128 (1,202)
Armstrong World AWI (1,197) 4,721 1,132
Atherogenics Inc. AGIX (136) 197 146
Bare Essentials BARE (620) 139 42
Blount International BLT (107) 441 121
CableVision System CVC (5,400) 9,777 (400)
Carrols Restaurant TAST (104) 497 (25)
Centennial Comm CYCL (1,092) 1,422 112
Charter Comm-a CHTR (5,632) 15,198 (999)
Choice Hotels CHH (78) 286 (48)
Cincinnati Bell CBB (679) 1,889 55
Claymont Stell H PLTE (30) 177 112
Clorox Co. CLX (55) 3,539 (20)
Compass Minerals CMP (74) 671 145
Corel Corp. CRE (22) 113 11
Crown Media HL CRWN (449) 917 190
Dayton Superior DSUP (171) 281 63
Delphi Corp DPHIQ (7,756) 17,514 2,250
Deluxe Corp DLX (68) 1,296 (188)
Denny's Corporation DENN (231) 454 (73)
Domino's Pizza DPZ (592) 360 (20)
Double-Take Soft DBTK (54) 19 (2)
Echostar Comm DISH (365) 9,352 1,696
Emeritus Corp. ESC (115) 713 (34)
Empire Resorts I NYNY (25) 61 (2)
Encysive Pharm ENCY (88) 69 33
Gencorp Inc. GY (98) 1,017 (3)
Graftech International GTI (157) 875 253
Guidance Software GUID (2) 22 (1)
Hansen Medical I HNSN (32) 38 33
HealthSouth Corp. HLS (1,339) 3,310 (314)
I2 Technologies ITWO (46) 208 1
ICO Global C-New ICOG (60) 657 (380)
ICOS Corp ICOS (18) 285 111
IMAX Corp IMAX (33) 243 84
Immersion Corp IMMR (22) 47 31
Immunomedics Inc IMMU (21) 50 21
Incyte Corp INCY (66) 465 295
Indevus Pharma IDEV (124) 92 55
Inergy Holdings NRGP (19) 1,647 (12)
Investools Inc. IEDU (64) 120 (79)
IPG Photonics IPGP (31) 115 24
J Crew Group Inc. JCG (55) 414 128
Kaiser Aluminum KALU (3,105) 1,598 123
Koppers Holdings KOP (86) 637 148
Life Sciences LSR (25) 205 23
Ligand Pharm LGND (239) 232 (162)
Lodgenet Entertainment LNET (62) 269 18
Maxxam Inc. MXM (201) 992 26
McMoran Exploration MMR (38) 438 (46)
Navisite Inc. NAVI (3) 100 (9)
New River Pharma NRPH (65) 170 135
Northwest Airlines NWACQ (7,718) 13,498 659
NPS Pharm Inc. NPSP (182) 237 150
Obagi Medical OMPI (51) 50 12
Omnova Solutions OMN (2) 366 72
ON Semiconductor ONNN (1) 1,417 316
Qwest Communication Q (2,576) 21,114 (1,569)
Radnet Inc. RDNT (74) 127 (1)
Riviera Holdings RIV (29) 222 10
Rural Cellular RCCC (540) 1,410 164
Rural/Metro Corp. RURL (89) 305 51
Savvis Inc. SVVS (142) 442 16
Sealy Corp. ZZ (188) 933 89
Sepracor Inc. SEPR (33) 1,352 424
St. John Knits Inc. SJKI (52) 213 80
Sun-Times Media SVN (322) 905 (383)
Town Sports Inte. CLUB (25) 417 (55)
Vertrue Inc. VTRU (9) 441 (75)
Weight Watchers WTW (103) 935 (72)
Worldspace Inc. WRSP (1,574) 604 140
WR Grace & Co. GRA (480) 3,641 902
*********
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
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liabilities that may never materialize. The prices at which
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than a balance sheet solvency test.
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related conferences are encouraged. Send announcements to
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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
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For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
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of Delaware, contact Ken Troubh at Nationwide Research &
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*********
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, Shimero Jainga, Ronald C. Sy,
Joel Anthony G. Lopez, Robert Max Victor M. Quiblat II, Rizande B.
Delos Santos, Cherry A. Soriano-Baaclo, Jason A. Nieva, Lucilo M.
Pinili, Jr., Tara Marie A. Martin, and Peter A. Chapman, Editors.
Copyright 2007. All rights reserved. ISSN: 1520-9474.
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